David Moschella, a senior fellow at the Information Technology and Innovation Foundation (ITIF), stated that China leads global supply chains for electric vehicle (EV) production. This dominance allows China to set prices and charge less for domestic EV sales. Moschella shared his statement during a July 5 episode of the China Desk podcast.
"We can't afford to cede any more strategic industries," said Moschella. "We've seen quite a few in recent years, and you see that with cars coming right down and staring us in the face. They [have] enormous advantages in EVs versus the cost in Europe or America trying to make similar products, because the supply chain is out there."
According to China Briefing, China "holds a dominant position in the EV supply chain, with over three-quarters of the world’s battery production capacity." The battery is one of the "most important components" of an EV and constitutes "40 percent of the vehicle’s total price." Additionally, China houses "more than half of the world’s processing and refining capacity" for critical raw materials (CRM) including cobalt, lithium, and graphite. These CRMs are "essential materials for making EV batteries." Furthermore, China has "70 percent of the global production capacity for cathodes and 85 percent for anodes."
According to MIT Technology Review, the Chinese government has utilized "generous government subsidies, tax breaks, procurement contracts, and other policy incentives" to invest more into the EV sector for Chinese production. Between 2009 and 2022, the government invested "over 200 billion RMB ($29 billion) into relevant subsidies and tax breaks." The Chinese government also provides subsidies to non-domestic companies to encourage dependence on China for EVs.
AP News reports that Chinese-made EVs are cheaper in China than in the U.S. or Europe. BYD’s Seal U Comfort EV sells for "the equivalent of 21,769 euros ($23,370) in China but 41,990 euros ($45,078) in Europe," according to Rhodium Group figures.
MarketWatch notes that "about 1.6 million EVs were sold in the U.S. in 2023," which is a "60% increase from the 1 million sold nationwide in 2022." From 2016 to 2020, annual sales fluctuated between 0.2 and 0.4 million but saw a sharp increase from 2021 (0.6 million) to 2023 (1.6 million).
Moschella is a nonresident senior fellow at ITIF, according to the organization’s website. He previously was a research fellow at Leading Edge Forum (LEF), where he focused on "global impact of digital technologies." He has lectured and consulted on digital trends and strategies in over 30 countries.
