Filenews 17 December 2025
The delay in the transition to electric cars in the US and Europe has given Chinese carmakers a chance to consolidate their dominance in the electrification race, according to analysts.
In two blows to the prospects of electric vehicles, the European Commission on Tuesday effectively abandoned a ban on vehicles with internal combustion engines from 2035. A day earlier, Ford Motor Co. announced that it would record charges of $19.5 billion. linked to its pullback from its strategy on electric vehicles, as reported by Bloomberg.
This creates a gap that can be filled by Chinese carmakers, which over the past decade have solidified their position as the leading producers of electric vehicles, with companies like BYD Co. and Xiaomi Corp. making rapid advances in cabin technology, advanced driver assistance systems, and ultra-fast charging.
Instead, Ford is abandoning plans for F-Series electric trucks and shifting production towards vehicles with internal combustion engines and hybrids.
"It is now becoming clear that the US or the EU cannot catch up," said Daniel Kollar, head of automotive and mobility at consultancy Intralink Group.
Traditional automakers, such as Ford, are realizing that they need to offer electric vehicles that meet local needs, Kollar said. With a range of just 240 miles, the electric F-150 could not carry heavy loads over equivalent distances to the gasoline-powered version of the iconic model. He added that they need to find a strategy that allows them to leverage their expertise in internal combustion engines — such as through plug-in hybrids or extended-range electric vehicles — while also facing competition from Chinese manufacturers, which are far ahead of all-electric battery-powered vehicles.
Although the brilliance of the electric vehicle market has faded, BNEF still predicts that global electric car sales will grow by 16% in 2026, reaching 25.4 million vehicles.
Europe is a key market for Chinese electric vehicle brands looking for growth and higher profit margins to compensate for the slowdown and long-running price war in their domestic market. Although the withdrawal from the ban on internal combustion engines and the reduction of incentives in favour of electric vehicles in the region could hurt demand, Chinese cars still have room to compete, according to Yale Zhang, chief executive of consultancy Automotive Foresight.
"It will not have an immediate impact," Zhang said. Even with Europe's tariffs, Chinese carmakers "have sufficient competitive advantage to stand in the market," he added.
One of the key barriers for drivers considering switching to an electric car is price, an area in which Chinese companies excel. BYD earlier this year launched in Europe the Dolphin Surf, an all-electric hatchback that sells for under €23,000 ($27,000).
The European Commission's withdrawal from banning exhaust emissions by 2035 shows a lack of will to do "the right but difficult thing," Zhang said. Although it seems to be a positive development for European manufacturers, "it will inevitably lead to laziness and complacency".
Volkswagen AG will end production of the ID.3 electric hatchbacks in Dresden this month, marking the first time in 88 years that the automaker has ceased production at an assembly plant in Germany.
Of course, Chinese electric vehicle manufacturers are also facing their own challenges, such as slowing domestic demand, intensifying competition and increased regulatory oversight. BYD's total sales have fallen for three consecutive months, while the company continues to produce a plug-in hybrid with a gasoline engine for every all-electric battery vehicle. At the same time, the Chinese authorities are limiting unjustified price reductions and asking automakers to pay their suppliers faster, which could affect sales and cash flow.
And while Chinese electric vehicles have been effectively excluded from the U.S. market due to punitive tariffs, they are recording steady penetration in markets from South America to the Middle East and Southeast Asia. The lack of competitive models from European and American manufacturers carries the risk that these markets will also be ceded to China.
