China is driving the EV revolution

China offers more affordable BEVs across all range categories

Data scraped from autocango.com (China) and carsheet.io (USA)

Interactive version at https://jhelvy.github.io/science-2025/

China offers more affordable BEVs across all range categories

Data scraped from autocango.com (China) and carsheet.io (USA)

Interactive version at https://jhelvy.github.io/science-2025/

China dominates mineral processing supply chain

Source: https://thegraduatepress.org/2022/04/01/how-china-came-to-dominate-the-supply-chain-of-rare-earths-and-critical-minerals/

How did this happen?

It’s the subsidies, right?!

Estimated $230B in subsidies (2009 - 2023)


Type of Support 2009-2017 2018 2019 2020 2021 2022 2023 Total
Rebate 37.8 4.3 3.3 3.5 7.4 9.2 0.0 65.7
Sales Tax Exemption 10.8 7.7 6.4 6.6 16.4 30.3 39.6 117.7
Infrastructure Subsidies 2.3 0.2 0.2 0.3 0.3 0.6 0.6 4.5
Research & Development 2.0 3.6 3.4 3.5 4.3 3.9 4.3 25.0
Government Procurement 7.8 1.6 1.4 2.9 1.7 1.8 0.8 18.0
Total 60.7 17.4 14.8 16.8 30.1 45.8 45.3 230.9
Spending as Share of Total Sales 42.4% 22.7% 23.3% 25.4% 18.3% 15.1% 11.4% 18.8%
Subsidy per Vehicle (US$) – 13,860 12,311 12,294 8,538 6,656 4,764 –





https://www.csis.org/blogs/trustee-china-hand/chinese-ev-dilemma-subsidized-yet-striking

Estimated $230B in subsidies (2009 - 2023)


Type of Support 2009-2017 2018 2019 2020 2021 2022 2023 Total
Rebate 37.8 4.3 3.3 3.5 7.4 9.2 0.0 65.7
Sales Tax Exemption 10.8 7.7 6.4 6.6 16.4 30.3 39.6 117.7
Infrastructure Subsidies 2.3 0.2 0.2 0.3 0.3 0.6 0.6 4.5
Research & Development 2.0 3.6 3.4 3.5 4.3 3.9 4.3 25.0
Government Procurement 7.8 1.6 1.4 2.9 1.7 1.8 0.8 18.0
Total 60.7 17.4 14.8 16.8 30.1 45.8 45.3 230.9
Spending as Share of Total Sales 42.4% 22.7% 23.3% 25.4% 18.3% 15.1% 11.4% 18.8%
Subsidy per Vehicle (US$) – 13,860 12,311 12,294 8,538 6,656 4,764 –
30% direct rebates
50% sales tax exemptions





https://www.csis.org/blogs/trustee-china-hand/chinese-ev-dilemma-subsidized-yet-striking

Chinese OEM Advantages Come from
Structure not Subsidies

Source: Why Are Chinese EVs So Cheap?, Gregor Williams, February 19, 2026 https://rhg.com/research/why-are-chinese-evs-so-cheap/

Why are Chinese firms making the best EVs?
(and not multinationals)

Institutions Matter

The Chinese Joint Venture System

1980s: 以市场换技术 = “Exchange market for technology”

“这就像吸食鸦片一样，一旦你沾染上了就永远也无法戒掉。”

何光远, 中国前机械工业部部长


“It’s like opium. Once you’ve had it you will be addicted forever.”

Guangyuan He, Former Minister of Machinery and Industry (Reuters, 2012)

Who’s going to make the EVs?


❌ Multinationals don’t want to share cutting-edge technology


❌ Chinese JV partners lack incentives to innovate


✅ Indigenous non-JV firms


Multinational OEMs dominate traditional auto sector through large JVs


Indigenous non-JV firms dominate emerging EV sector




Helveston, J. P., Y. Wang, V. Karplus, E. Fuchs (2018) “Institutional Complementarities: The Origins of Experimentation in China’s Plug-in Electric Vehicle Industry.” Research Policy. 48(1), pg. 206-222


Multinational OEMs dominate traditional auto sector through large JVs


Indigenous non-JV firms dominate emerging EV sector




Helveston, J. P., Y. Wang, V. Karplus, E. Fuchs (2018) “Institutional Complementarities: The Origins of Experimentation in China’s Plug-in Electric Vehicle Industry.” Research Policy. 48(1), pg. 206-222

EV Challenges in the US

EV Challenges in the US


1) Policy environment
2) Consumer preferences
3) Affordability crisis

Decades of Policy Whiplash

Obama
(2009–2016)
  • $7,500 EV tax credit
  • Goal: 1M EVs by 2015
  • DOE battery R&D investment
Trump I
(2017–2020)
  • Proposed eliminating EV tax credits
  • Rolled back fuel economy standards
  • Withdrew from Paris Agreement
Biden
(2021–2024)
  • IRA: $369B in clean energy investment
  • Expanded EV credits, domestic content rules
  • 100% EV federal fleet goal
Trump II
(2025–Now)
  • Gutted IRA
  • Rolled back fuel economy standards

EV Challenges in the US

1) Policy environment
2) Consumer preferences
3) Affordability crisis

US buyers are more opposed to EVs than Chinese buyers

Helveston et al. (2015) “Will subsidies drive electric vehicle adoption? Measuring consumer preferences in the U.S. and China” Transportation Research Part A: Policy and Practice. 73, 96–112. DOI: 10.1016/j.tra.2015.01.002

US buyers demand far more driving range than Chinese buyers

EV Challenges in the US

1) Policy environment
2) Consumer preferences
3) Affordability crisis

The EV “Deserts” of America

Data: 128M vehicle listings from 60k dealerships (2016 - 2025), marketcheck.com

The EV “Deserts” of America

Data: 128M vehicle listings from 60k dealerships (2016 - 2025), marketcheck.com

How should the US
respond to Chinese EVs?



Option A
Exclude Chinese EVs


- China “cheated” with subsidies
- Need to protect local automakers from Chinese competition
- Chinese connected EVs are a security threat, so let’s ban them
Option B
Engage strategically


- China built real competitive advantages in manufacturing and supply chains
- Chinese EVs are winning markets, US OEMs are losing markets
- Actually address security concerns

Bipartisan Response: Ban Chinese tech

Block imports: Steep tariffs on imported Chinese EVs, batteries (First Biden, continued w/Trump)


Block investment: Stricter Foreign Entities of Concern (FEOC) rules


Ban the tech: Connected Vehicle Security Act of 2026 bans any connected vehicles with Chinese tech (import or domestic)

The European Model:
Block Imports, Welcome Chinese FDI


Access to cutting-edge battery tech

Create local jobs

Increase supply chain resilience


CATL

$7.6B battery plant in Debrecen

100 GWh/year for Mercedes-Benz, BMW, Volkswagen

BYD

First European EV manufacturing facility

Producing BEVs and PHEVs for the European market

US Opportunities

Technology Licensing Agreements


Ford-CATL: Licensing battery technology in a Michigan plant
Challenge: CATL recently added to DOD’s list of “Chinese military companies”
Chinese FDI
into U.S.


Gotion batteries: Multi-billion dollar investments in Illinois and Michigan
Challenge: Uncertainty around Foreign Entities of Concern (FEOC) status

Banning Chinese EVs Doesn’t
Buy You Security

U.S. connected cars are already a security problem

Examples at home

Mozilla Foundation (2023)

Reviewed the privacy policies of 25 automakers selling in the U.S.: “all new cars today are privacy nightmares on wheels.”

New York Times (2024)

GM sold OnStar data on millions of drivers without consent, via LexisNexis to insurers. Premiums rose based on data from drivers’ own cars.

What we actually need

Connected car safety standards

Regulate data privacy and
cybersecurity for all automakers,
regardless of national origin

https://policyoptions.irpp.org/2026/03/ev-cars-data-privacy/

The Tesla Example


China allowed Tesla in via
targeted compliance:
  • Store vehicle data within China
  • Restrict operations near sensitive areas
  • Use only government-approved mapping systems (Baidu)


Consumers aren’t waiting for Washington

The U.S. risks becoming an
“island of tailpipes”

Strategic Responses

🇨🇦🇲🇽 North American Integration: Build sufficient scale through Canada and Mexico partnerships

📋 Transparent Security Standards: Develop compliance frameworks all connected vehicles must meet — regardless of origin

🔋 Battery Manufacturing Focus: Prioritize domestic production as platform for commercializing next-gen U.S. technologies

🤝 Strategic Chinese Partnerships: Pursue licensing agreements and FDI with targeted safeguards — not wholesale restrictions

📈 Sustained Policy Support: Restore and maintain IRA incentives long enough for investments to mature



Thanks!
Slides available at jhelvy.com/slides







jhelvy.com

jph@gwu.edu

@jhelvy

Extra Slides

China’s EV subsidies are on par with typical subsidies needed to start an industry

China offers more affordable BEVs across all range categories

Data scraped from autocango.com (China) and carsheet.io (USA)

Interactive version at https://jhelvy.github.io/science-2025/

How many dealerships are carrying EVs?

4/5 dealers have new BEV; 2/5 dealers have used BEV

Most dealers carry very few EVs

EV percentage of vehicle listings for $40-50k price bin


Majority of BEV listings in high-price segments

How hard is it to get to a PEV dealer?

Vehicle accessibility metric:
Road travel time from census tract centroid to
nearest dealership with a target vehicle

*Road travel times obtained using Open Source Routing Machine (OSRM)

PEV travel times are converging towards conventional vehicle times

80% of pop:

  • CV in ~12 min
  • PEV in ~22 min (2024)
  • PEV in ~60 min (2016)

Additional travel times (PEV - CV) by demographic blocks shows disparities

Places with worse PEV access:

  • Lower income areas
  • Rural areas
  • Republican strongholds

Local vehicle market: Vehicles in 90 minute driving isochrone

Combine ML algorithm of predicted household vehicle budget (using Census data) with local market characteristics

https://rhg.com/research/why-are-chinese-evs-so-cheap/

https://rhg.com/research/why-are-chinese-evs-so-cheap/