The United States blinked and China built an electric vehicle empire.
“They are taking over the world, except North America,” said Lei Xing, a Chinese auto industry expert. “The United States will be the last frontier.”
Over the past 15 years, China has rolled out a public charging network of more than 10 million vehicles, convinced billions of drivers to go electric with subsidies and other incentives, and launched more than 100 EV brands with a multitude of pricing options. The move exemplifies “China speed,” a term Xing uses to describe the country’s hypersonic development.
The speed and scale of this transition have propelled China ahead of the United States and all other countries in the shift to electric vehicles, while positioning Chinese automakers to lead the pack to dominate the market for years to come. In July and August 2024, for example, industry data shows that more than half of total auto sales in China were electric or hybrid.
The United States is simply playing catch-up. The Biden administration has made the transition to electric vehicles a key priority, saying it wants half of the vehicles sold to be electric, plug-in hybrids or fuel cells by 2030. The White House has also sought to throw sand in China’s gears by impose high customs tariffs on electric vehicles made in China, a move aimed at protecting American automakers.
But with limited supply chain access, lagging infrastructure development for electric vehicles and a culture in which American drivers remain fond of gasoline-powered cars, it’s not yet clear whether those goals are achievable. John Bozzella, CEO of the Alliance for Automotive Innovation, a trade group representing U.S. and foreign automakers and other industry players, called the Biden administration’s goals “the edge of what’s achievable.”
Skeptics may be right: The adoption of electric vehicles and the building of the necessary energy infrastructure has been slow in the United States compared to China. According to the Federal Highway Administration, as of August 29, there were 192,500 public charging stations in place in the United States—a number that has doubled under the Biden-Harris administration—and 1,000 new stations were being activated each week. Biden has pledged to build 500,000 charging stations nationwide by 2030.
To achieve that goal, his administration has committed $7.5 billion to electric charging infrastructure. Of that, $5 billion is earmarked for expanding a fast-charging network along highways. So far, only 69 of those fast chargers are operational in eight states, according to the Highway Administration.
Slow infrastructure development has hampered adoption of these vehicles as drivers face “range anxiety.” As of June, battery-electric and plug-in vehicles accounted for less than 10% of U.S. car sales, according to federal data.
“China has a head start in a race that is just beginning,” said Baratunde Cola, CEO and founder of Carbice, a nanotube maker whose products help keep electric cars from overheating.. “Everyone is still installing running blocks.”
How China Became the Electric Vehicle Market Leader
China’s advance in electric cars didn’t happen overnight. The key factor: China’s recognition more than a decade ago that electric vehicles were the most significant innovation in transportation since Henry Ford revolutionized automobile manufacturing in the early 20th century.
Determined to move forward, Beijing has put its economic muscle behind the development of electric vehicles, similar to the centrally controlled industrial policy that fueled Japan’s auto boom in the 1970s and 1980s.
In 2009, the Chinese government launched a pilot subsidy program to lay the foundation for an electric vehicle network. Dubbed “Ten Cities, Thousand Vehicles,” the program aimed to subsidize new electric and hybrid vehicles in the public transportation sector, such as buses and taxis, Xing said.
Since 2013, subsidies have been provided to individual consumers through a tiered system based on an electric vehicle’s range, Xing said. The government ended the subsidies in 2022, but by then China was well on its way to electric vehicle dominance. The country also offered a 10% sales tax exemption to cover the cost of the cars, which is set to phase out in 2027.
In total, the Chinese government distributed $231 billion in subsidies between 2009 and 2023, according to a report by the Center for Strategic and International Studies.
This “carrot” approach to boosting consumption has proven highly effective. According to the International Energy Agency, new electric car registrations in China will reach 8.1 million in 2023, a 35% increase from 2022.
China has also taken the lead in building a vast network of charging stations. According to the National Energy Administration, as of June, China had 10.2 million electric vehicle charging stations, a 54% increase from a year earlier.
China has surpassed the United States not only in quantity, but also in quality. This is partly due, Xing said, to the country’s simplified charging system, which offers a standard plug for all vehicles.
“You don’t have to think about what kind of plugs or adapters and what kind of charging stations to use,” he said.
China also has another advantage over the United States: It has access to critical raw materials. The International Energy Agency estimates that 90% of graphite and 77% of refined rare earths—critical inputs in the production of electric vehicles and batteries—will come from China by 2030. The United States currently imports 100% of its graphite, with a third of that coming from China, according to the Alliance for Automotive Innovation.
Proximity to semiconductor manufacturing sites also gives China an advantage, Hooman Shahidi, CEO and co-founder of EVPassport, told CBS MoneyWatch. Taiwan, located just behind China, produces about 90% of the world’s most advanced chips, according to the U.S. Institute of Peace.
“The United States and Canada are trying to end their dependence on China, but that’s easier said than done,” Xing said. “I think it will take at least a decade.”
Can the United States Still Catch Up?
American drivers have been much slower to jump on the electric vehicle bandwagon.
“We have a lot more laggards than early adopters,” said Shahidi, who is also an adviser to the Biden administration on electric vehicle charging infrastructure policy.
But experts say it’s too early to write off America, which has the means and technical expertise — and even the political will — to rapidly develop its electric transportation systems. The next few years will be the “most critical” period for electric vehicle development in the United States, Bozzella said in a blog post for the Alliance for Automotive Innovation.
In March, the Biden administration lowered its goal for electric vehicle sales to half the market by 2030. That “should give the market and supply chains a chance to catch up and further bypass China,” Bozzella wrote.
Washington has so far set a “steady pace” in establishing mandates and incentives to achieve these goals, Shahidi added. But he said more can be done to reward companies focused on supply chain and logistics, something China has done brilliantly.
“We need to encourage and reward the ancillary economy related to electrification,” Shahidi said.
For the United States to gain the upper hand, Cola, who heads Carbice, said the United States must invest more in robotics and assembly automation, invest in advanced materials and boost production of critical mineral supplies to reduce dependence on China.
“If we focus our efforts on developing new technologies, such as carbon nanotubes, if we redouble our efforts in robotics, we could catch up with China and become the world leader within a decade,” he said.
Another important point for the United States will be building charging infrastructure. “To be able to deploy more chargers, we need more people to deploy them,” Shahidi said.
As a federal government and local Initiatives to address clean energy workforce gaps have helped the United States move forward. The Federal Highway Administration (FHA) reports that federally funded projects are currently underway for more than 24,100 electric vehicle charging stations. More projects are underway.
“We expect to see hundreds of federally funded chargers operational this year, thousands next year and hundreds of thousands of chargers by the end of the decade,” a Highway Administration spokesperson said.
