The global battle for electric vehicle supremacy has entered a new and excitingly combative phase. Last week, the US proposed a broad ban on Chinese software being used in any EV sold in the US. This Friday, after a fierce lobbying battle, EU member states vote on imposing anti-subsidy tariffs on EV imports from China.
Superficially, it looks like the rich economies collectively sticking up trade barriers against competition from China. In practice, the tactics are very different, with the Europeans integrating with the Chinese industry while the Americans decouple. As with much of its geostrategic policy towards Beijing, Washington wants its more China-sceptical model adopted by allies. But the US has failed to do the economic groundwork at home to give it overwhelming leverage.
Chinese EV supremacy is extraordinary in size — China makes and owns more than half the world’s electric cars, including plug-in hybrids — but also, unlike earlier generations of consumer goods (electronics, clothes), Chinese brands dominate the market. What this owes to decades of state subsidy is debatable. What is not is that the Chinese companies emerging from the cut-throat (and oversupplied) domestic market are ferociously globally competitive in their own right, as indeed are the foreign ones that increasingly export from their Chinese bases. And Chinese brands are in the lead in developing software to enhance their vehicles’ performance.