Recent data has revealed that China’s share of the worldwide electric vehicle market has surged to 76% thanks to robust domestic demand. The East Asian country has made significant investments in its EV sector over the past decade and is now reaping the results in the domestic and foreign markets.
Even though import tariffs in major Western markets have risked China’s exposure to foreign electric vehicle markets, strong demand from domestic buyers allowed its global EV industry to rise to 76% in October, the China Passenger Car Association says. Chinese EV makers sold 14.1 million electric vehicle units between January and October, the automotive body reports, with 69% of these sales occurring in China compared to just under 60% in 2023.
This brings China’s share of the global EV market to three-quarters even as the EU, the United States, and Canada levy steep import tariffs on Chinese electric vehicle exports. Chinese automakers also sold electric cars to buyers in the U.S. and EU in addition to the domestic market, but Western tariffs will likely impact these sales over the next few years.
Both the U.S. and Canada passed a 100% import tariff on Chinese EV imports, while the EU currently has provisional tariffs of up to 35% on electric vehicles manufactured in China. EU member states voted to increase these tariffs last month.
Western policymakers argue that China’s decade-long EV subsidy program gave its EV sector an unfair advantage and that allowing China to export its cheap electric cars would devastate carmakers in the West. Beijing has condemned all the import tariffs imposed on its electric vehicle exports and claims they will make it harder for the world to achieve its green energy goals in time.
Fortunately, domestic demand for electric cars is strong enough to make up for China being locked out of the American and Canadian markets. Beijing has also doubled its electric vehicle purchase subsidy for buyers who trade in internal combustion engine (ICE) cars to $2,752, making the cost of EV ownership even cheaper.
China already manufactures the most affordable electric cars on the globe thanks to strategic policy decisions and billions of dollars in subsidies that have allowed Chinese carmakers to build EVs at low cost and pass the savings to their customers. These cars may not be of the best quality, but their affordability makes them a much more attractive choice compared to EVs developed by Western carmakers, especially for local buyers who also have access to a purchase subsidy.
North American EV makers like ElectraMeccanica Vehicles Corp. Ltd. (NASDAQ: SOLO) have an uphill task of growing their market share to chip away at the global dominance of Chinese firms.
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