China made more than 70% of the world’s electric vehicles in 2024 and took 67% of global sales. In 2025 it exported more than 2.62 million of them. That scale is why Washington is now debating how much of it to let in.
Washington looks at a conditional opening
In September 2026, President Donald Trump suggested he is open to Chinese automakers building cars in the United States. A policy brief from the Peterson Institute for International Economics argues the US could replace its blanket ban on Chinese EVs with a phased, conditional approach. Chinese carmakers could produce in the US if they source substantial local content, create American jobs and transfer technology. The brief says the benefits to the US economy must be measurable.
National security risks would have to be managed with strict rules on vehicle data privacy, supply chain transparency and oversight of Chinese state subsidies, plus protection against data weaponization. The brief draws on past US experience with color televisions, semiconductors, solar panels and wind turbines, and says carefully regulated Chinese investment could lower EV prices, speed up climate goals and ease US-China tensions. It also calls China’s EV capabilities formidable.
How big the home market is
China’s China Association of Automobile Manufacturers (CAAM) reported 16.49 million passenger EV sales in 2025, and 51% of vehicles sold in the country that year were electric. Plug-in sales, battery electric and plug-in hybrid together, made up 47.9% of the market in 2024, up from 6.3% in 2020. In 2024, 60% of EV sales were battery electric and 40% were plug-in hybrids. In the plug-in market BYD Auto and SAIC Motor hold the top two spots, and Chinese firms take five of the top seven.
The field has thinned sharply. Bloomberg counted 500 Chinese electric car makers in 2019 and only 100 by 2023. In commercial vehicles, China logged 447,000 new commercial EV sales in 2023, and its more than 500,000 electric buses are 95% of the global stock.
Why the batteries matter
Batteries account for around a third of an EV’s cost, and about 80% of the world’s lithium-ion batteries go into EVs. China’s presence in that supply chain is heavy: CATL, the world’s largest battery maker, sits alongside BYD FinDreams, CALB, Gotion, SVOLT and EVE Energy. Controlling the costliest component helps explain how Chinese brands price their cars. Western rivals are not idle. General Motors says its next-generation architecture will bring 40 times more computing power and 30 percent less wiring, starting with the 2028 Cadillac Escalade IQ, and that its fourth-generation EVs will use lithium manganese-rich prismatic batteries.
Sources
- Electric vehicle industry in China
- The US should consider allowing Chinese production of electric vehicles in America under certain conditions
- GM Is Coming for Tesla, Rivian, and China, on Your Phone and in the Car
Photo: Alexander Migl (CC BY-SA 4.0)
