The US blinked, and China built an electric vehicle empire.
“They dominate the world, except for North America,” said Lei Xing, an expert on China’s auto industry. “The US will be the last frontier.”
In the last 15 years, China has rolled out a public charging network over 10 million strong, convinced billions of drivers to go electric by dangling subsidies and other incentives, and introduced over 100 EV brands with a bevy of pricing options. The push is an example of “China Speed,” a term Xing uses to describe the country’s hypersonic development.
The speed and scale of change has seen China overtake the US and every other country in the transition to electric vehicles, while also positioning Chinese automakers at the front of the pack to dominate the market for years. In July and August 2024, for example, industry data shows that more than half of total automotive sales in China will be electric or hybrid.
The US is, quite simply, playing catch-up. The Biden administration has made the transition to EVs a top priority, saying that by 2030 it wants half of all vehicles sold to be electric, plug-in hybrid or fuel cell EVs. The White House has also sought to throw sand at China’s equipment impose stiff rates on Chinese-made EVs, a move to protect US automakers.
But with limited supply chain access, lagging EV infrastructure development and a culture where American motorists remain partial to gas-powered cars, the jury is still out on whether that goal is achievable. John Bozzella, CEO of the Alliance for Automotive Innovation, a trade group that represents U.S. and foreign automakers along with other industry players, called the Biden administration’s goal “a viable edge.”
The skeptics may have a point: EV adoption, and the development of the country’s necessary energy infrastructure, has been glacial compared to China. According to the Federal Highway Administration, as of August 29, there were 192,500 public chargers in the US – a number that doubled under the Biden-Harris administration – with 1,000 new ones being activated each week. Biden has committed to building 500,000 charging stations nationwide by 2030.
To achieve this goal, the government is spending $7.5 billion behind electric charging infrastructure. Of that amount, $5 billion is earmarked to expand the fast charging network on highways. So far, only 69 fast chargers are operational in eight states, according to the Highway Administration.
Slow infrastructure development has hampered adoption, as drivers contend with “few concerns.” In June, battery and plug-in electric vehicles represented less than 10% of U.S. auto sales, according to federal data.
“China has a head start in the race that is still at the starting line,” said Baratunde Cola, CEO and founder of Carbice, a nanotube manufacturer whose products help keep electric cars from overheating.. “Everybody is still adjusting to the race block.
How China came to dominate the EV market
China’s leadership in electric cars did not happen overnight. Key driver: China’s recognition more than a decade ago that EVs are the most important transportation innovation since Henry Ford revolutionized automobile manufacturing in the early 20th century.
Determined to race ahead, Beijing is throwing its economic might behind EV development, similar to the centrally controlled industrial policies that drove Japan’s automotive sector in the 1970s and 80s.
In 2009, the Chinese government launched a pilot subsidy program to lay the groundwork for a network of electric vehicles. Named “Ten Cities and a Thousand Vehicles,” the program’s goal is to subsidize new electric and hybrid vehicles in the public transportation sector like buses and taxis, Xing said.
Since 2013, subsidies have been available to individual consumers through a tiered system based on the range of electric vehicles, Xing said. The government is phasing out subsidies in 2022, but by then, China is well on its way to EV dominance. The country also offers an exemption from the 10% sales tax on car sales, which is scheduled to end in 2027.
In total, the Chinese government provided $231 billion in subsidies from 2009 to 2023 according to a report from the Center for Strategic and International Studies.
This “carrot” approach to driving consumption is proving to be very effective. According to the International Energy Agency, new electric car registrations in China will reach 8.1 million in 2023, an increase of 35% from 2022.
China has also made progress by building a massive charging network. According to the National Energy Administration, in June China had 10.2 million EV chargers, up 54% from the previous year.
China has surpassed the US not only in terms of quantity, but also in terms of quality. Part of this, Xing says, has to do with the country’s streamlined charging system, which offers one standard plug for all vehicles.
“You don’t have to think about the type of plug or adapter and the type of charging station you use,” he said.
Another advantage China has over the US is access to critical raw materials. The International Energy Agency estimates that 90% of graphite and 77% of refined rare earths – key inputs in EV and battery production – will come from China by 2030. The US currently imports 100% of graphite, accounting for one-third of that supply. sources from China, according to the Alliance for Automotive Innovation.
Proximity to semiconductor chip manufacturing also gives China an edge, Hooman Shahidi, CEO and co-founder of EVPassport, told CBS MoneyWatch. Taiwan, right behind China, produces about 90% of the world’s most advanced chips, according to the United States Institute of Peace.
“The US and Canada are actually trying to break their dependence on China, but that’s easier said than done,” Xing said. “I think that will take at least ten years.”
Can the US still catch up?
US drivers have been slower to jump on the EV train.
“We have more laggards, compared to early adopters,” said Shahidi, who is also an adviser to the Biden administration on EV charging infrastructure policy.
Still, experts say it’s too soon to count on America, which has the means and technical expertise — if not necessarily the political will — to quickly improve its electric transportation system. The next few years will be the “most critical” period for domestic EV development, Bozzella said in a blog post for the Alliance for Automotive Innovation.
The Biden administration in March lowered its EV sales target to half the market by 2030. This “should give the market and supply chain a chance to catch up and bypass China,” Bozzella wrote.
Washington has set a “good pace” so far in setting mandates and incentives to achieve these goals, Shahidi added. But he believes more can be done to reward companies focused on the rail and logistics side, which China is doing with flying colors.
“We need to incentivize and reward the additional economy associated with electrification,” Shahidi said.
For the U.S. to get ahead, Cola, which runs Carbice, said the U.S. needs to make more investments in robotics and automating assembly, investing in advanced materials and the production of critical mineral resources to reduce dependence on China.
“If we focus our efforts on improving new technologies, such as carbon nanotubes, if we count on robotics, we can catch China and become the world leader in ten years,” he said.
Another focal point for the US will be building charging infrastructure. “In order for us to deploy more chargers, we need more people doing the deployment,” Shahidi said.
As federal and local initiative seeks to fill the gap in the clean energy workforce, the US is forging ahead. The Federal Highway Administration says federally funded projects are currently underway for more than 24,100 EV chargers. More is on the way.
“We expect to see hundreds of federally funded chargers this year, thousands next year, and hundreds of thousands of chargers by the end of the decade,” a Highway Administration spokesman said.
