President Trump’s effort to revive American auto manufacturing is running into a paradox. While aiming to protect U.S. industry, the Republican rollback of electric vehicle (E.V.) incentives may end up doing the opposite—leaving China even further ahead in a market that is increasingly shaping the global automotive future.
China already controls 70 percent of global E.V. production. The U.S. accounts for just 5 percent, with Tesla as the only domestic player in the global top ten. General Motors and Ford, long-standing icons of American manufacturing, have become regional rather than global players, with international sales steadily declining.
The policy shift now underway in Washington threatens to deepen that gap. The recently passed Senate bill would eliminate up to $7,500 in tax credits for E.V. buyers, scale back subsidies for fast-charging infrastructure, and withdraw support for domestic battery and mining operations. Environmental law experts estimate that over $200 billion in planned investment tied to these programs is now at risk. Projects already in motion—like AESC’s battery plant in South Carolina—have paused.
Chinese manufacturers, meanwhile, are accelerating. Companies like BYD and Geely benefit from robust domestic support and intense internal competition, allowing them to produce high-quality electric vehicles at prices well below their U.S. counterparts. China’s dense charging infrastructure and streamlined supply chains give it additional competitive advantages. Chinese battery makers CATL and BYD alone control over half of global production.
Republicans have defended the cuts, arguing that subsidies disproportionately benefit affluent buyers and that American E.V.s remain too expensive and impractical. It is true that U.S. sales remain modest: just a 3 percent increase in North America so far in 2025, compared to 33 percent in China and 27 percent in Europe. But analysts agree that E.V.s are on a cost curve that favors mass adoption over time. Gasoline-only cars already account for less than three-quarters of the U.S. market, and the trend is downward.
Industry leaders like Mary Barra (GM) and Jim Farley (Ford) say they remain committed to the transition. But they are also hedging. Barra has acknowledged a “moderation” in E.V. production to avoid steep discounts. Farley, after test-driving Chinese models, called their quality “humbling.”
The U.S. currently keeps Chinese vehicles out with 100 percent tariffs. But that is a temporary fix, not a long-term strategy. As American tourists encounter Chinese E.V.s abroad, political pressure could mount. And if U.S. automakers grow too reliant on trade barriers and fall further behind in innovation, they may find themselves unprepared when those barriers eventually fall.
The issue is not about ideology—it is about global competitiveness. Policy decisions made today will shape whether U.S. companies are building the cars of tomorrow, or watching them arrive from overseas.