China’s EV revolution threatens to leave the US behind

As China drives an electric revolution in the global auto industry, the United States has retreated. Instead, it has doubled down on old technologies, shunning competition in new ones that are quickly conquering the rest of the planet.

In a new report for CFR’s Climate Realism Initiative, I argue that a smarter strategy would be to take on the challenge, rather than cede the future of the world’s largest manufacturing sector to Chinese carmakers. 

They have struggled for decades to build internationally competitive internal combustion engine or ICE vehicles. But with support and encouragement from all levels of the Chinese government, they have changed the game. 

These manufacturers have developed and learned to efficiently produce electricity-powered, internet-connected, smart vehicles that can increasingly operate autonomously. They are often referred to as ACE.

Spreading trend

The surge was initially centered in China, where ACE vehicles are now less expensive than ICE versions and EV purchases have surpassed 50% of car sales. But this trend is rapidly spreading to the rest of the world. 

Chinese exports of batteries and EVs grew eightfold in value during the first half of this decade. In Brazil, the share of EVs in total car sales shot up from 0.2% in 2020 to 6.4% in 2025, while in Turkey it went from 0.2% to 11%.

Elsewhere, the numbers in Thailand climbed from 1.1% to 13%, while most analysts expect ACE to continue to eat into ICE’s market share in the coming years. 

The drivers of this paradigm shift are manifold. Many nations have encouraged ACE adoption, as they hope to lessen dependence on imported oil, reduce local air pollution, and cut greenhouse gas emissions. 

At the same time, many buyers have found that ACE vehicles are more affordable and perform better than traditional vehicles. Price reductions and performance improvements are likely to strengthen EVs in the future.

Although the America auto company Tesla pioneered the ACE vision, its adoption has been more gradual in the US. Consumer preferences, limited choices, and charging infrastructure shortfalls help explain the lagging adoption rate. 

Bipartisan theme

Policy support for a transition from ICE to ACE has been inconsistent as well. It has been marked by the move by President Donald Trump and his administration to remove tax incentives for EV purchases and support for manufacturing. 

The only consistent bipartisan theme has been protection of the US market from Chinese imports through tariffs and regulation. Such protection is necessary and appropriate as a temporary measure. 

But keeping it in place indefinitely risks isolating the world’s largerst economy. American drivers and the nation’s transportation system would miss out on features enjoyed by their counterparts abroad.

American producers would also become increasingly uncompetitive in international markets, and domestic greenhouse gas emissions reductions would stagnate. A smarter response would be to compete with China globally, rather than retreat. 

That doesn’t mean opening the floodgates to Chinese imports or forcing Americans to buy cars that they don’t want. Domestic manufacturers need time and assistance to build their capabilities and diversify supply chains dominated by China. 

Federal agencies need time to refine regulations that ensure privacy and security as cars continue to collect more data about their passengers and surroundings. And American drivers need to get used to plugging in, rather than filling up.

Isolated island

But the clock to implement such policies is ticking. Change is accelerating in the rest of the world. If Washington waits too long to respond more fully and constructively, the US could become an isolated island of ICE vehicles in a world driven by Chinese EVs.

David M Hart is a senior fellow for climate and energy at the Council on Foreign Relations.

This work represents the views and opinions solely of the author. The Council on Foreign Relations is an independent, nonpartisan membership organization, think tank, and publisher, and takes no institutional positions on matters of policy. 

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