How China's Car Companies Built So Wide a Lead in the Race to Make EVs

Electric vehicles are the future of the auto industry. That’s been a widely held assumption for a while, but it’s only in the past year that it’s become clear how big a lead Chinese automakers have opened in the field. Chinese-made cars now not only dominate their home market, the world’s largest, but are being exported in growing numbers. In addition to the lower cost and advanced technology of made-in-China cars, the country has also come to dominate the EV supply chain in ways that will make it difficult for manufacturers elsewhere to close the gap. Analysts have warned that Western automakers could lose a quarter of their market share because of the rise of cheaper Chinese EVs.

Chinese brands account for about half of all EVs sold globally. Chinese companies have succeeded in taking domestic market share from former leaders such as Volkswagen, while homegrown champion BYD Co., the top brand within China, sold more cars than Tesla Inc. in the fourth quarter of 2023 to become the world’s biggest EV company. China’s consumers are going electric in large numbers: EVs accounted for a quarter of all new passenger car sales there in 2022, a figure that had risen to 37% in September. UBS analysts predicted that China’s global market share will almost double to 33% by 2030 while traditional Western carmakers will see their share fall to 58% from 81% in 2023; they also estimated that in 2023 BYD had a 25% cost advantage over North American and European brands.