Blink and you may have missed it, but China now dominates the electric vehicle market. One second it was Tesla and daylight behind it. The next, China’s BYD is the largest electric vehicle maker in the world and China’s electric vehicle market is 8 times the size of America’s (in 2022, Chinese consumers bought 6.8 million EVs, while Americans bought 800,000).
If you’re ever wondering why free-speech absolutist Elon Musk suddenly gets quiet when it comes to China, the answer lies in the Tesla Gigafactory in Shanghai. The factory will be able to produce 5,000 cars per day and is Tesla’s avenue to the most important electric vehicle market in the world.
This article from MIT Technology review looks at how China managed to pull off this feat. An country with a weak car industry, starting well behind their American, Japanese and German peers, has managed to overtake them all.
As we read this article, it made us think this is a nation-wide story of the innovators dilemma. China, as the upstart car maker, went all in on electric vehicle technology while many of the larger, legacy car makers dithered. As a result, China now has some of the world’s biggest EV makers, is the largest market of EV buyers, and controls supply chains for many key EV inputs (most notably processing 90% of the world’s rare earth minerals and 60% of the world’s lithium). Now the rest of the world is playing catch up.
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