Chinese companies are taking over the EV market. What’s behind their meteoric rise?
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https://theconversation.com/chinese-companies-are-taking-over-the-ev-market-whats-behind-their-meteoric-rise-287490
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If producing electric vehicles (EVs) was an Olympic sport, China would be dominating the medals podium.
China now leads the world in the sale and export of EVs, a term encompassing everything from battery-powered cars to plug-in hybrids. Chinese companies also produce the lion’s share of the rechargeable batteries that keep EVs running.
Between 2009 and 2022, the Chinese government dished out more than A$41 billion in subsidies and tax benefits to boost the production of electric cars, taxis and buses.
But subsidies alone can’t explain the meteoric rise of China’s EV industry. Over two decades, Beijing has built a manufacturing sector that fosters domestic competition, rapid production and company-level innovation.
The rise of Chinese EVs
By producing more EVs, China aims to reduce its reliance on imported oil from countries such as Iran, Russia and Venezuela. It also hopes to leapfrog countries that historically have dominated the global car manufacturing industry, including Germany, Japan and the US. In September 2020, the Chinese government folded these objectives into a national decarbonisation strategy.
In 2025, more than half of the new cars sold in China were EVs. And Chinese-made vehicles are gaining traction around the world. In the United Kingdom, more than 30% of the new cars sold in 2025 were EVs. In Norway, EV sales surged to represent more than 95% of the country’s total car sales in 2025.
But they are proving less popular in the United States, with EV sales sitting at just 10%. That’s even despite the US walling out Chinese EVs through tariffs.
Australia has also been slow to adopt Chinese-made EVs. But our market reached a tipping point in June 2026, when EVs made up close to 30% of new car sales.
Crucially, Chinese-made vehicles are no longer marginal. In 2026, China overtook Japan – the market leader over nearly three decades – as Australia’s primary source of new vehicles. Affordable models, rising fuel prices, an expanding charging network and the New Vehicle Efficiency Standard all accelerated this shift.
Tesla still sells the most pure battery EVs in Australia, holding 28% of the market. However, Chinese brands such as BYD, Geely and XPeng have gone from being fringe players to mainstream companies. BYD is a prime example, chasing Tesla with its 24% share of the Australian market.
Read more:<br>20 years ago, China bet big on electric vehicles. Now Western carmakers are feeling the pain
Survival of the fittest
These companies didn’t achieve success overnight. They spent years competing, failing and innovating in an often brutal domestic market.
At the height of China’s EV boom, more than 500 companies rushed into the EV sector. They were driven by cheap capital, local government backing and start-up enthusiasm.
Most did not survive.
As subsidies were wound back and purchase incentives became less generous, roughly 90% of early movers were squeezed out. So the state created the early market, but the market then ruthlessly punished weak players.
To stay afloat, companies had to adapt. Here are three examples.
Geely/Zeekr
Legacy brand Geely began as a refrigerator parts maker. But in 1994, it pivoted to produce motorcycles and China’s first domestically built scooters. It entered the automotive industry in 1997. To produce a competitive EV, Geely drew on the international engineering expertise of Volvo to improve on the product of premium global EV brand Zeekr.
Xiaomi
As a latecomer, Xiaomi launched its first EV in 2024. Founded in 2010 as a software start-up, Xiaomi’s first successful product was an Android-like operating system for smartphones. But it soon brought this technology into the world of smart home appliances and EVs.
BYD
BYD started out manufacturing batteries, becoming China’s largest rechargeable battery producer by the early 2000s. But in 2003, BYD made the leap to EVs after acquiring a struggling state-owned carmaker. And in just two decades, BYD has become the vertically integrated titan of the EV world. By controlling its EV supply chain – ranging from power electronics to vehicle platforms and shipping – the company is able to assemble one vehicle every 52 seconds. In 2025, BYD delivered a record 4.5 million cars globally.
China’s hubs of regional expertise ensure individual companies can rapidly move from design to production. One example is the Pearl River Delta, where EV brands can tap into Shenzhen’s electronics prowess and Guangzhou’s long history in car...