A decade ago, the United States looked like it owned the future of electric vehicles.
Tesla had redefined what an electric car could be. The technology, the brand, the cultural momentum—all American. With early policy support under Barack Obama, the US had both the innovation and the initial market lead.
And yet, today, the centre of gravity in the EV market sits firmly in China.
China accounts for roughly two-thirds of global EV sales. The United States is a distant third. The question is obvious: how did that happen?
One popular answer—particularly in the US—is politics. Electric vehicles became entangled in the culture wars. Under Donald Trump, emissions standards were rolled back and EVs were framed as an elite, impractical indulgence. Even now, support for EVs varies sharply by region and political identity.
This mattered—but not in the way people think.
Political hostility to EVs did slow adoption. It created policy instability, weakened consumer confidence, and left infrastructure patchy outside a handful of states. While China pushed towards mass adoption, the US drifted, with EVs reaching only around 10% of new car sales.
But that is not why the US lost the market.
The deeper issue is that the US and China were playing entirely different games.
The American model treated EVs as a consumer technology. Innovation would come from firms like Tesla. Adoption would follow market demand. Government’s role was to nudge—tax credits here, regulation there—but ultimately to let the market decide.
China took the opposite view.
EVs were not a product. They were an industry.
Over the past decade, China built an entire ecosystem around electric vehicles. It subsidised production and consumption. It scaled domestic demand into the millions. It invested heavily in battery manufacturing, and now dominates global battery production and processing. It integrated supply chains in a way that dramatically lowered costs.
This is the key point: China did not just support EVs. It ensured that it controlled the conditions under which EVs could be produced.
Once that happens, the outcome is largely set.
Costs fall fastest where production is largest. Innovation follows scale. Supply chains cluster around dominant producers. By the time EVs became a genuinely mass-market product, China was already the cheapest, fastest, and most complete place to build them.
The US, by contrast, had innovation without scale.
Tesla remains a remarkable company, but it is one company, and some of it’s recent decisions (the cyber truck?) haven’t been great. The broader ecosystem—batteries, materials, mass-market manufacturing—was never built at the same speed or scale. And while political arguments raged about EVs, China quietly made sure that the global industry would run through its factories.
In that sense, the political debate in the US is slightly beside the point.
Opposition to EVs did not lose America the market. It merely distracted from the real issue: the absence of a coherent industrial strategy. China won the race because it wasn’t scared of old fashioned socialist style industrial intervention. America left it to the market and the market failed. State socialism won, even in a country like China which is more capitalist than socialist these days.
Even a fully pro-EV political consensus in the US would have struggled to match what China achieved. At best, it might have accelerated adoption. It would not, on its own, have delivered supply chain dominance.
That has consequences.
The EV transition is not just about cars. It is about batteries, energy systems, manufacturing capability, and ultimately economic power. Ceding leadership in this sector is not like losing ground in consumer electronics. It reshapes the industrial base.
And it is not clear that this was ever fully understood in Washington. And under Trump such profound thinking is discouraged.
The lesson is an uncomfortable one, particularly for countries that prefer market-led solutions. Innovation is not enough. Being first is not enough. Even being best is not enough.
America doesn’t make enough things the world wants to buy, tariffs won’t change that. China does. Hiding behind tariff protection and regulatory barriers America is falling further and further behind the rest of the world.
If another country is willing to build the entire system—and you are not—it will win.
America did not reject electric vehicles. It simply assumed that inventing them would be sufficient.
China understood that owning the future requires something more prosaic.
It requires building it.
Three more reasons for China’s dominance of EVs are as follows:
1. China is a hugely populous (and still relatively poor) country full of people wanting their first car: this means there’s a far bigger domestic market than in rich countries where new cars are only produced to replace the ones that wear out,
2. China already dominated production of the most important technology for EVs (batteries) before EVs themselves became a mainstream thing: in part this is because China’s relative poverty and authoritarian government made it more amenable to the highly-polluting industry of battery manufacture, and
3. China sees a strong strategic case for electrifying its motor vehicle fleet, as it means that it won’t have to worry so much about the US Navy cutting off their oil supply when they invade Taiwan.
All good points!!
Just out of curiosity, how would you feel about buying a Chinese EV yourself?
I don’t think that I do enough miles to justify being another car of any kind!