Ecosystem Alignments: What China’s EV Surge Teaches the U.S.

Trade wars don’t build industries. Ecosystem alignments do.

As tariffs escalate between the U.S. and China, electric vehicles (EVs) are the newest casualty. But the real threat isn’t foreign competition—it’s domestic inaction.

While the U.S. protects its turf, China is building an electric future.

Two Countries, Two Trajectories

The U.S. is stuck in the early-adopter phase. China has already crossed the chasm: market share of EV (BEV&PHEV) 48%!

Two consumer-centric factors stand out:

1. Price: In China, 60% of EVs are cheaper than their ICE equivalents—even after national subsidies were removed in 2023.

2. Charging: China has 17 times more charging ports than the U.S.

A common myth

“China succeeded only because of top-down governance.”

Wrong!

China succeeded:

• NOT through authoritarian mandates

• NOT through subsidies alone

• But through ecosystem alignment—of markets, policies, and consumers

Ecosystem Alignment: Five Reasons China Pulled Ahead

| Coherent Policy Support | Rigorous Market Competition | Mature Charging Infrastructure | Technology-Oriented Consumer Preference | Deep EV Supply Chain |

1. Coherent policy across two dimensions:

• Horizontal: National policies on climate, technology, and infrastructure are fully aligned.

• Vertical: National governments set the agenda, and cities follow through with robust local implementation frameworks.

EVs are not only a transportation or environmental solution but also an industrial-modernization and energy-security strategy.

2. Fierce market competition

Picture this:

If there were 20 Tesla-like EV companies battling it out in the US, how dynamic would our market be? That is exactly China today.

There will be blood in the water as Chinese EV firms compete and consolidate. There will be blood in the water as Chinese EV firms compete and consolidate. In 2019, 500 EV startups registered in China; today, only about 140 remain—perhaps 20 will survive in the long run.

3. Infrastructure at scale

China has 3,600,000 charging points (vs. 204,000 in the U.S.)—and they work. In contrast, roughly a quarter of non-Tesla chargers in the U.S. are down. No range anxiety. No convenience gap.

4. Future-hungry consumers

U.S. buyers tend to focus on price and range; Chinese buyers prioritize technology—connectivity, seamless digital experiences, and cutting-edge safety. They demand the “car of the future” today.

5. A deep EV supply chain

From raw materials to battery cells, China controls the entire stack

Source: IEA Report: Global Supply Chains of EV Batteries

The U.S. Response?

"High Tariffs ➕High Ego" is the worst possible combination.

Tariffs are neither inherently good nor bad—they can incubate new industries (e.g., U.S. protective duties after the War of 1812; South Korea’s import barriers in the 1960s–’80s; China’s graduated tariffs through the 1990s–2010s).

But today’s high U.S. tariffs—paired with a refusal to engage—are destructive, ceding leadership in innovation. The longer we isolate, the longer we delay our own transformation.

When is Tariff Useful?

Tariff is helpful when it facilitates learning

Tariffs help only when they create space to learn and adapt within a clear, long-term plan:

• Incubation: Protective duties give domestic firms breathing room to master new technologies—only if paired with workforce training, rigorous learning, and knowledge transfer.

• Sunset clauses: Effective tariffs include clear timelines and phase-outs, forcing companies to compete—or perish.

• Complementary measures: Duties should be paired with R&D incentives, infrastructure investment, and regulatory certainty so new entrants can scale once the tariff expires.

What Should the U.S. Do Instead?

Do what China did in 1990s.

Open doors to collaboration – Invite leading global EV manufacturers to form joint ventures, bringing proven platforms and supply-chain expertise to U.S. soil—while U.S. OEMs still hold consumer and union relationships to offer meaningful partnerships. – Host international technology-and-policy exchanges where U.S., Chinese, Asian, and European automakers, policy-makers, utilities, and cities co-design interoperability standards and tackle shared challenges.

Align policies – Forge an Industrial-Environment-Infrastructure Compact with coherent targets for vehicle electrification, grid modernization, and job creation. – Synchronize federal, state, and municipal regulations, permitting, and incentives so they work in concert.

Embrace humility and invite the world’s best innovators.

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