Chinese electric vehicle manufacturers went from domestic players to global exporters in a few years, offering cars that are competitive on quality and substantially cheaper. Established manufacturers and governments are responding, mostly defensively.
Why the cars are cheaper
Vertical integration. Several manufacturers make their own batteries, which is the most expensive component. Scale from a domestic market that adopted electric vehicles faster than anywhere else. State support over years, which built the supply chain. And genuine engineering efficiency in designing for cost.
The gap is not entirely subsidy, which is what makes it difficult for competitors.
The trade response
Tariffs, in several major markets, at levels designed to erase the price advantage. That protects domestic manufacturers and raises prices for consumers, which slows electric adoption in those markets.
Requirements for local production, which Chinese manufacturers are meeting by building plants abroad.
What it means for buyers
In markets without high tariffs, cheaper electric cars and more choice. In markets with them, higher prices and the same cars arriving later through local factories.
What it means for incumbents
A cost structure they cannot match without restructuring, on a timeline they did not choose. Several have announced partnerships with Chinese manufacturers rather than competing directly.
The longer view
The industry is reorganising around a new set of leaders, the way it did when Japanese manufacturers arrived in the seventies. The tariffs slow it and do not stop it.