The Global EV Transition in 2026: China Dominates, the West Scrambles
By Sanna the Weaver • Mon Jan 26 2026 • Science
By any measure of production scale, China has won the electric vehicle transition — so far. Chinese automakers produced approximately 11 million electric vehicles in 2025, accounting for more than 60% of global EV production. BYD surpassed Tesla as the world's largest EV seller by volume in 2023 and has extended its lead. China's manufacturing cost advantage in EVs — estimated at 20 to 30% below comparable Western models at the same specification — is driven by vertical integration of the battery supply chain, lower labor costs, and government subsidies that permeate every layer of the production system. The Tariff Response The European Union imposed tariffs on Chinese EV imports in 2024, peaking at 45% for BYD, 48% for Geely, and 35% for other Chinese manufacturers. The United States already had a 100% tariff on Chinese EVs inherited from the Biden administration and maintained by Trump. These measures have slowed Chinese EV imports to Europe and blocked them from the US entirely. They have not solved the underlying competitiveness problem: European and American automakers are still struggling to produce EVs at price points competitive with Chinese models, and the Chinese are responding to tariffs by building factories in third countries — including Turkey, Thailand, and Hungary — to circumvent import duties. What China Is Actually Winning The Chinese EV advantage extends beyond the vehicles themselves. China controls approximately 75% of global lithium-ion battery manufacturing capacity and dominates the refining and processing of the critical minerals — lithium, cobalt, nickel, manganese — that batteries require. Even if Western EV manufacturers compete on the vehicle, their battery supply chains run through China. The EU's Critical Raw Materials Act and the US Inflation Reduction Act have both attempted to incentivize domestic battery supply chain development, but building new refining and processing capacity takes a decade. The dependency is not easily unwound. "Tariffs protect markets. They do not create industrial capacity. China spent twenty years building its EV ecosystem. Europe cannot replicate that in five." — Boston Consulting Group, January 2026 Consumer Impact For consumers, the tariff regime means higher EV prices in Europe and the US than they would otherwise face — a tension that cuts against climate goals. A BYD Seagull, China's most popular budget EV with a price of approximately
0,000 in China, would be competitive in European and American markets at any tariff rate below about 200%. Affordable EVs available widely would likely accelerate the transition away from gasoline vehicles. The policy choice to protect domestic manufacturers through tariffs is simultaneously a climate policy choice to make EVs more expensive and hence less accessible — a trade-off that governments are making without fully acknowledging it.