By 2025, one in four newly sold cars will be electric – fully electric or plug-in hybrids. This is impressive growth over only five years before, when fewer than one in twenty new cars sold were electric. According to the International Energy Agency, however, despite much of the world taking part in this growing EV movement, the United States and Canada stand apart with lower penetration and limited access to China’s significant EV industries.
The Global EV movement
China is the largest car market globally and has taken a strong lead in electrification. More than half of all new cars sold are electric, compared to about one-in-ten new cars in the U.S. in 2024. The basis for China’s results is price. Two-thirds of fully electric cars sold in China now have a lower cost than the gasoline equivalent. Together with lower operational and maintenance costs, EVs are now the default choice for millions of drivers in China.
Meanwhile, China’s automakers, such as BYD, NIO, Xpeng, and even smartphone maker Xiaomi, own the domestic market. Their names may not be tied to cars yet for many outside of China; however, their reputations are growing fast in Europe, especially BYD, Latin America, and beyond.
Variety and Innovation
China’s automakers produce EVs that cover the entire range of automobile experiences. On the low end, the BYD Seagull is a little budget-priced compact automobile; on the high end, models include the Xpeng G9 SUV or Zeekr 009 luxury van. Chinese models have received high ratings for safety in European tests, with many priced drastically lower than comparable products offered by legacy automotive manufacturing companies.
Chinese companies have also been creative and innovative with design and technology. One of the popular design choices has been to include large displays as centre consoles and give them flexibility in use with features such as storage for food, a karaoke station, or even for golf-club storage. Their factories have turned to more use of automation lately, resulting in what some have called the “dark factory”, or a factory with minimal human interaction. BYD has recently become the largest EV seller in the world and has over 100,000 engineers and scientists to advance its technology.
The time it takes to move concepts into manufacture is an advantage as well for Chinese EV manufacturers. If BYD can concept-manufacture in 18 months (half the typical time of U.S. manufacturers) – that’s an advantage.
Another advantage is in battery technology. BYD is the world’s second most reliable EV battery manufacturer. The company claims it has produced a battery cell with fast charging that can recharge in approximately minutes, barely longer than a gasoline car fill-up time.
The Export Push – Automakers Look Outwards
With the ability to manufacture a lot more than what China’s domestic market can consume, Chinese automakers are looking abroad. China has overtaken every other country in total auto exports, although most are still gasoline-powered. However, EVs are now being rapidly exported to Europe, Southeast Asia, Australia, and South America.
But North America remains largely closed. The U.S. and Canadian governments, like some would say, have made a “tariff fortress”, applying a 100% tariff on EV imports from China. Essentially, this policy doubles the cost of any Chinese model sold in the U.S., thus taking away their competitive advantage.
Price Pressure in North America
Affordability among consumers is a massive concern in North America. The average EV in the U.S. costs approximately $55,000, an expense out of reach of a vast number of buyers. Federal tax credits have alleviated some of the sticker shock, but under the latest alterations (expected to arrive late in 2025), those credits will end.
On the other hand, Chinese automakers have already started to make executive-funded EVs, like BYD’s Dolphin and Xpeng’s M03, that are regularly priced under $25,000, and if it were not for the tariffs, could be well-positioned to make a real entrance into the American market.
Tesla, Ford, and General Motors all say they are working toward more affordable options, but higher-priced vehicles offer more profit margins, and the tariffs take away some of the pressure for U.S. automakers to compete based on price.
