Chinese EV Industry Losing Luster in the US
Anyone paying attention can hear the Chinese electric vehicle (EV) industry knocking at the door, trying to pry its way into the American market. The country’s interest comes as no big surprise, with America strongly pushing toward electrified transportation.
While Chinese entry into the United States would increase market competition, alarm bells over China’s dominance of the EV market have long been ringing. As such, the Biden administration is taking steps to sever U.S. dependency on China by funding American mining activity and other measures, such as consumer rebates for American-made EVs, to encourage domestic supply chains and production.
China has enjoyed a good run over the past decade, producing EV batteries, components, and refined ingredients for a growing American EV market that has been more than happy to offshore the gritty industrial processes. Without question, China wants to sustain its dominance and stranglehold on the EV market.
The bottom line is the lithium-ion battery bridge between China and the U.S. is beginning to crack under Washington's drive to build up a domestic supply chain. For example, according to the Federal Reserve Bank of Dallas, more than 15 new gigafactory projects totaling at least $40 billion have been announced since 2021. That is good news for our domestic EV industry.
Along with the U.S., the EU and Canada are also challenging Chinese dominance in the EV space. As the U.S. and others seek to cultivate their own resources, we can expect the knocking from China will only get louder.