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Home»Electric Vehicles»Detroit’s Isolation Tactics Can’t Halt China’s Thriving EV Market
Electric Vehicles

Detroit’s Isolation Tactics Can’t Halt China’s Thriving EV Market

William D. KouchBy William D. KouchSeptember 16, 2024Updated:April 21, 2025No Comments4 Mins Read
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Detroit's Isolation Tactics Can't Halt China's Thriving Ev Market
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FYI: Established Western automakers are considering collaborations with Chinese companies to advance in the EV market, much like the joint ventures seen in China’s automotive industry in the early 2000s.


Western Automakers Teaming Up with China: A Strategic Move?

There’s increasing speculation and strategic discussion about whether Western automakers should collaborate with Chinese companies to get ahead in the electric vehicle (EV) market. This scenario echoes the early 2000s when China required foreign automakers to partner with local firms to gain market access.

Key Collaborations Already in Motion

Volkswagen and Stellantis have already made their moves. Volkswagen is working with Xpeng to create EVs tailored for the Chinese market. Stellantis is in collaboration with Leapmotor to bring EVs to Europe.

In the U.S., the political climate remains cautious. High tariffs and stringent regulations around battery sourcing have kept Chinese automakers and components at arm’s length. Lawmakers have cited national security and economic concerns for these barriers.

However, Bloomberg’s Liam Denning suggests that such an approach might lead to "Detroit’s isolationism," a scenario with potential downsides for the U.S. auto industry’s future. He argues that a better solution may lie in adopting a cooperative strategy akin to China’s earlier policies.

The Case for Collaboration

Denning argues that the two largest auto markets, the U.S. and China, should align their interests. Consider the following points:

  • Market Dynamics: Chinese automakers like BYD have significantly increased their market share domestically. For instance, their share skyrocketed to over 60% in 2023, up from less than half four years ago.
  • Economic Impacts: General Motors saw a dramatic drop in profits from its Chinese operations, earning only a quarter of what it did five years prior.
  • Technological Edge: Chinese manufacturers have embraced electrification more comprehensively than most Western automakers, except Tesla, which is also seeing its market share erode in China.

The notion of a declining market share for American automakers like GM and Ford is a stark possibility unless they adapt and innovate faster.

EV Market Constraints in America

The U.S. auto market faces its challenges. Presently, the Big Three are highly dependent on profitable gas-powered trucks and SUVs. However, demand for these vehicles is plateauing:

  • Stagnation in Sales: The U.S. vehicle market hasn’t shown significant growth for decades.
  • Electrification Challenges: Electric trucks and SUVs are harder to produce efficiently due to their size and design.

These factors suggest that without strategic changes, the U.S. auto industry may face stagnation while Chinese competitors expand globally.

Global Implications of EV Partnerships

China, on the other hand, is also experiencing market saturation and needs to expand abroad, targeting markets like Europe and potentially the U.S. A cooperative venture could benefit both markets, potentially easing geopolitical tensions by creating interdependent business interests.

Japan’s Auto Industry: A Parallel Struggle

While the U.S. faces its own set of challenges, Japan’s auto industry is also scrambling to adapt. Long resistant to full electrification, Japanese automakers are now rapidly pivoting:

  • Job Impact: Over 666,000 people work in Japan’s auto parts sector, which significantly outweighs the number employed in vehicle manufacturing.
  • Carbon Neutral Goals: Japan aims for carbon neutrality by 2050, pushing for a complete transition to zero-emission vehicles by 2035.

Some Japanese companies, like those partnered with BYD, are thriving, indicating the potential success of strategic partnerships.

Honda Prologue: An Unexpected Contender

In the midst of these industry shifts, the Honda Prologue has emerged as a popular choice. Based on GM’s EV platform, this vehicle has showcased strong demand:

  • Sales Surge: The Honda Prologue saw an increase in registrations, contributing to an 18% growth in EV registrations in July 2023.
  • Incentives: Substantial dealer discounts and incentives have driven these sales, although this approach might not be sustainable long-term.

Crafting a U.S.-China EV Partnership

The Toyota bZ3, an electric vehicle co-developed with BYD for the Chinese market, exemplifies the potential for cross-border partnerships. Could a similar model work for an American brand, manufactured within the U.S.?

Conclusion

While creating such partnerships would necessitate significant shifts in American political attitudes and reduced resistance to Chinese influence, the benefits could be substantial. Developing mutually beneficial collaborations might not only invigorate the U.S. auto industry but also stabilize global economic and political relations.


For more insights and updates, reach out to us at tips@automotive.fyi, or on Twitter @automotivefyi.

Written by William Kouch, Editor of Automotive.fyi

Chinas Detroits Halt Isolation Market Tactics Thriving
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William D. Kouch

William Kouch, EV Senior Editor at automotive.fyi, graduated with a degree in Communications from Illinois Wesleyan University. With an extensive background in electric vehicles and a focus on Tesla and other leading brands, he brings deep industry insights and a passion for sustainable transportation. Follow William for expert analysis and updates on the future of electric mobility.

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