A comparison of the US and China’s approaches to electric vehicles highlights dramatic differences in strategies for developing this rapidly growing sector.
Technological Development in China’s EV Sector
China is actively promoting driver assistance technology and electric vehicles (EVs), placing the country in the spotlight. Following an incident involving a Xiaomi car with semi-autonomous capabilities that resulted in three fatalities, regulators tightened their oversight. Leading companies like Dongfeng and Huawei are involved in developing new safety regulations. China is expected to implement level three autonomy systems, which allow drivers to divert attention from the road, by 2026.
The Situation with US EV Incentives
The US Senate has approved a bill that will see the popular tax credit of $7,500 for new EV purchases and $4,000 for used electric vehicles expire on September 30, 2025. Experts warn that this move could lead to a decrease in interest in EVs within the American market. The termination of this program, following its expansion in 2022, could adversely affect sales and lead to a sharp drop in demand once the credit expires.
Market Prospects for Electric Vehicles
Studies suggest that ending tax credits may reduce EV market penetration in the U.S. by 6% by 2030. While China continues to subsidize EV manufacturing and software development, American manufacturers may face new challenges. Markus Schaefer, CTO of Mercedes-Benz, noted that despite cheaper chips, achieving the necessary safety standards for widespread piloting systems remains a challenging task.
The stark differences in the US and China’s approaches to the electric vehicle industry highlight a shift in the global balance of power regarding technology. While China actively enhances its production and implements new technologies, the US may lose its competitiveness in the global market.
