The global race for electric vehicle (EV) dominance is heating up, with China emerging as the undisputed powerhouse. This article explores the complex interplay between climate change, economics, and the West’s efforts to curb Chinese EV exports. As the world grapples with ambitious emissions reduction goals, the need for affordable and accessible EVs has become paramount. Electric vehicles are crucial in the fight against climate change, and China’s dominance in this sector could shape the future of the global automotive industry.
China’s EV Ascendance
The Western powers have awoken to the fact of China’s meteoric rise as the world’s numero uno producer of electric vehicles. A government that provided vast subsidies and worked to promote electric cars for its green-technology industries: This is the mechanism by which China’s electric-car industry has grown so fast in the last few years, with companies like BYD posting annual profits larger than those of all four of Detroit’s oldest automakers combined. They have the lion’s share of the global electric vehicle market (estimated to be over 50% by 2023), which is proof in and of itself.
Not to be outdone, the West has certainly noticed this recent wave of Chinese EV production. Both the European Union and the United States have attempted to throttle the flow of cheap, subsidized Chinese electric cars for fear of what they would do to domestic automotive industries. But the experts caution that such a tactic may hinder efforts to counter climate change, since what the world needs right now is affordable EVs, and China has proven it can deliver them at scale to hasten our move toward cleaner transportation.
Struggling to Prioritize
The West wants to keep Chinese cars out to protect its auto industry from cheap, high-flow imports but that stands at odds with the pressing global need to clamp down on climate change. This is the context in which both the EU and the US have set ambitious emissions reduction goals — and where the cost structure associated with EVs becomes very important to how policymakers go about reaching those targets. There is no way the EU and US can meet their climate goals in the timeframes they’ve outlined originally without Chinese EVs, as analysts at the Center for Strategic and International Studies note.
Western policymakers face a conundrum on this front. For one, they aim at bolstering their national automotive sectors and fostering fair competition. At the same time, they cannot afford to stifle global efforts to combat climate change by restricting the availability of inexpensive and high-quality electric vehicles. New European Commission legislation including an end date of 2035 for new combustion engine cars as part of its ambitious “Green Deal”, gives further credence to the case that a solid run of EVs is necessary in order to hit these targets.
The Geopolitical Implications
The strain to command the electric vehicle market has wider geopolitical implications than simply matters regarding the automotive industry. If it succeeds in this arena, China has a strategic advantage of being the world’s most important exporter and two of the largest markets to use these EV exports as leverage to expand its influence in international markets. Chinese carmakers have already started to export to countries such as in Latin America, where sales of Chinese cars have grown significantly over the past few years.
The speed with which Chinese EV companies have expanded has already alarmed politicians in Washington and Brussels, enabling them to quickly take over the market. Western countries accused China of “cheating” and set tariffs, exacerbating tensions between the Western world and China. But as the Rocky Mountain Institute analysis indicated, China “will be the clear market leader in delivering cleaner, high quality and cost-effective vehicles” — a fact that has to change how the West addresses climate change.
