When world leaders gather in Brazil next month for the annual United Nations climate conference, the dignitaries likely will spot shiny new electric vehicles made in China.
For many of the visitors, it’ll be a familiar sight. Chinese brands such as BYD Auto dominate the EV market in Central and South America. They’re a growing presence in Asia. And Chinese companies are among the fastest-growing EV carmakers in Europe, too.
But for those visiting from the U.S. and Canada, the cars may seem a little unusual — as the two countries have used high tariffs to dissuade Chinese EV companies from entering their markets.
While the protectionist strategy may work for now, industry analysts say the rapid expansion of Chinese EVs across the world is just getting started. What that means is that — at a minimum — it soon could be much more difficult for American carmakers to sell EVs outside the United States.
“Chinese cars are pouring at a breathtaking pace into virtually every nation in every time zone — except the United States and Canada,” wrote Michael Dunne, an auto analyst who follows China’s car market closely, in a research note this week. “Never in a hundred years has the auto industry witnessed such explosive growth in exports from a single country.”
The rapid growth could help reduce global greenhouse gas pollution, but it also presents a problem for older, established car companies, particularly in the United States. The Trump administration eliminated regulations and financial incentives that were intended to push the U.S. car industry toward electrification.
In the short term, analysts expect new EV sales in the United States will drop after a record-setting stretch earlier this year. And going forward, the big Detroit companies could find themselves boxed out of China and other growing markets — and struggling against low-price competition in Europe.
“Certainly the Chinese have committed to dominate this marketplace and we are going to have to work harder to compete against them,” said Genevieve Cullen, president of the Electric Drive Transportation Association.
China has spent more than a decade supporting both private and state-run companies that build EVs, manufacture batteries, and mine the lithium and other critical materials needed for the whole process.
As a result, China now has more than 100 car companies, who produce more than half the vehicles sold in the country. EVs, hybrids and fuel-cell vehicles have come to dominate the market, which has cut into sales of Western-made gasoline-powered cars.
Tesla, the biggest American EV maker, saw its sales in China slump through the first eight months of 2025, before making a modest 2.8 percent bounce in September, Reuters reported. General Motors said its sales rose in China in the third quarter of this year, but the company saw its sales drop sharply in 2024.
Meanwhile, Chinese car companies are exporting more vehicles, according to the Associated Press.
Chinese companies have sold 18 percent of the EVs in Europe so far in 2025 — up from 2 percent in 2020, according to data from Benchmark Mineral Intelligence. In the United Kingdom, BYD alone saw its sales grow nearly ninefold in September from the same month in 2024.
In Asian countries outside China, Chinese companies accounted for 30 percent of EV sales in 2025, up from 1 percent in 2020. Across Mexico and Central and South America, EV adoption has been slower than Europe, but Chinese companies sold more than 80 percent of the EVs, up from virtually nothing in 2020, according to Benchmark.
A big advantage for China is its access to the resources and components needed to build EVs.
That’s helped Beijing on several levels; China for example has restricted exports of rare-earth magnets as part of its ongoing trade war with the Trump administration.
Yet the growth of China’s EV sector won’t provide a silver bullet to the country’s climate goals. And it comes with some cost, too.
The country’s EV boom — coupled with growth in wind and solar power — decreased China’s use of fossil fuels by 2 percent in the first half of 2025, compared to the first half of 2024, according to a recent think tank report. But China remains the world’s largest emitter of greenhouse gases. In addition, its auto and battery industries have a history of brutal workplace practices — including forced labor.
Still, Western automakers are watching the growth with alarm.
In Germany, Volkswagen and other carmakers have found themselves with spare factory capacity as the newcomers cut into demand for domestic vehicles, according to the consulting firm AlixPartners.
Ford CEO Jim Farley, who has test-driven Chinese EVs, called the upstart industry “an existential threat.” But if there is a silver lining for the United States, competition from China could spur the U.S. automakers to start producing more, and cheaper, EVs.
U.S. companies already have invested billions of dollars to develop EVs, and prices could drop as production increases, said Ben Prochazka, executive director of the nonprofit Electrification Coalition.
Even so, the industry may still need help to compete with government-supported Chinese companies, he said.
“We all need to be thinking about strong demand side policies that ensure that the U.S. manufacturers could succeed in this global competition,” he said.
U.S. tariffs on Chinese imports will buy the industry time, but there are real risks if the industry doesn’t adapt.
The U.S. could become an isolated market where buyers are stuck with more expensive, gas-powered vehicles while the rest of the world shifts to cheaper EVs, Robbie Orvis, an analyst at the think tank Energy Innovation, wrote in an email.
“Unless U.S. automakers can quickly figure out how to bring down manufacturing costs and improve their vehicle offerings, they will continue to lose market share outside the U.S.,” Orvis wrote.
This story also appears in Energywire.
