New Report Shows China’s Dominance of the Electric Vehicle Production Threatens the Entire U.S. Auto Industry

Washington, D.C. — Millions of jobs are threatened and the future of the American auto industry is at stake because of China’s rising dominance of the global auto industry, a startling new report from Horizon Advisory concludes. The findings prove that It Is past time for the United States to get serious about investing in not only in electric vehicle production, but in the supply chains and related infrastructure needed to support them.

China’s government long has prioritized the auto industry as a source of jobs and technology, Including for military purposes, according to Horizon Advisory. But China has found it difficult to break into the high-end auto market. It is now hedging its bets that it can take over and dominate the global industry with the rise of electric vehicles.

If that happens, U.S. automakers may end up out of business.

This report must serve a wake-up call to American policymakers that the country needs to get serious about growing and strengthening the U.S. electric vehicle sector, related supply chain, and necessary infrastructure. 

Alliance for American Manufacturing President Scott Paul said:

“It is crucial now that Members of Congress and the Biden administration work together to ensure that the U.S. auto industry and its millions of workers have what they need to compete in the electric vehicle future.

“The American auto industry is critical to America’s success. It long has been a leader in innovation, and has offered a pathway to the middle class for millions upon millions of Americans. Auto industry leadership helped build the Arsenal of Democracy in World War II, and just last year, when the country needed critical supplies in the darkest days of the COVID-19 pandemic, U.S. automakers and workers stopped making vehicles and started making PPE, ventilators, and more.

“All of this is now at risk. We already know that China’s government doesn’t play fair, and this new report clearly shows China is determined to do whatever it takes to dominate the entire global auto industry.”

China’s government has heavily subsidized EV production and purchases, and Is positioning to establish control over critical EV Inputs like cobalt and batteries. It also has deployed a four-pronged Industrial strategy to dominate the global EV market, which Includes:

  • Building low-cost domestic production (e.g., through subsidies and preferential policies);
  • Inflating domestic demand (e.g., through consumer-side subsidies and incentives);
  • “Bringing in” foreign technology, expertise, and brands (e.g., through joint ventures that dangle China’s government-bolstered domestic market as bait); and
  • “Going out” to acquire foreign resources, technology, expertise, and brands – and, ultimately, market share (e.g., by targeting distressed assets and suppliers abroad).

Horizon Advisory warns that the “US must compete, immediately. It must do so in a fashion that accounts for the positions of global dependence China has already secured, as well as the non-market subsidization, regulatory arbitrage, and mercantilism that feed China’s model.” 

Added Scott Paul:

“This report is a call to action. I’m confident that if American auto workers and manufacturers have what they need to compete — and the government is willing to enforce our trade laws so there’s a level-playing field for them to do so — America’s auto industry will continue to lead the way as the world transitions to electric vehicles. Now, U.S. policymakers just need to get to work.”

Click here to read the full report