China has cemented its position as the undisputed leader in the global electric vehicle (EV) market, capturing an impressive 76% of the worldwide share in October, according to data from the China Passenger Car Association (CPCA).
The surge reflects both robust domestic demand and strategic government support, even as Western tariffs increasingly stymie exports.
Between January and October 2024, global EV sales totaled 14.1 million units, with 69% of those occurring in China. In October alone, the country’s share rose beyond three-quarters, reinforcing its dominance in the sector. This marks a significant leap from 2023, when China accounted for just under 60% of new EV registrations globally, as reported by the International Energy Agency.
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China’s Green Push Meets Western Resistance
EVs, named by Beijing as one of the “new three” priority areas for economic growth and green transition, are a cornerstone of China’s broader strategy to lead the global energy revolution. However, this ambition is being met with growing resistance from Western markets.
The United States has effectively barred Chinese EVs from its market, with President Joe Biden raising tariffs on Chinese electric cars from 25% to 100% earlier this year. Former President Donald Trump, a contender in the upcoming elections, has vowed to impose an additional 10% levy on all Chinese imports if reelected.
The European Union has similarly escalated its trade measures, imposing tariffs of up to 35% on Chinese EVs, in addition to existing duties of 10%. These actions have drawn sharp criticism from Beijing, which views the moves as protectionist barriers against its rapidly expanding EV industry.
Resilience at Home and Strategic Shifts Abroad
Against the backdrop of Western tariffs, China’s domestic market has remained a pillar of strength for its EV industry. The government recently doubled subsidies for EV buyers, providing 20,000 yuan ($2,750) to consumers trading in conventional vehicles. This policy has buoyed domestic demand, allowing Chinese manufacturers to maintain robust production levels.
Tesla, the American EV giant led by Elon Musk, has also benefited from China’s pro-EV policies. The company reported a 7% increase in sales during the third quarter, partly attributed to the enhanced subsidies. Musk’s relationship with Beijing and Tesla’s localized production facilities have enabled the company to navigate the complex trade environment more effectively than other Western automakers.
Expanding Markets to Russia and Beyond
China’s auto exports to Russia have surged amid declining shipments to the U.S. and Europe. Over the past two years, exports to Russia have grown by 109%, contrasting with a 23% decline in exports to the United States during the same period.
Cui Dongshu, secretary-general of the CPCA, highlighted the strategic importance of the Russian market.
“Chinese carmakers are eager to export to Russia,” he said, pointing out that many international competitors have avoided the market due to geopolitical risks following the invasion of Ukraine in 2022.
China’s dominance in the EV market comes at a pivotal moment in global energy and economic transitions. With domestic sales providing a buffer against Western trade restrictions, Chinese automakers are well-positioned to explore emerging markets in Africa, the Middle East, and South America.
However, the increasing reliance on state subsidies and the growing isolation from Western markets pose challenges. As Western nations intensify their tariffs and promote domestic production, China may face hurdles in maintaining its growth trajectory without significant shifts in its export strategy.
For now, China’s electric vehicle market stands as a testament to its industrial and economic might, showcasing a blend of strategic government intervention, technological innovation, and market adaptability. Whether this dominance can withstand rising geopolitical tensions and trade barriers remains a crucial question for the future of global EV markets.
However, there is a growing belief that China is on the right path to conquer every sector of the global economy, resulting in the tariffs by the West, rattled by the South Asian giant’s rapid acceleration.