China's EV Dominance Is Its Geopolitical Trump Card Against the US

China's dominance in the global electric vehicle industry gives Beijing a major asymmetric advantage in its tech rivalry with the US — not just in automotive markets, but across critical mineral processing, battery manufacturing, and the data/AI ecosystem that EVs increasingly depend on. Analysts broadly see this control as a potent form of geopolitical leverage that China has already begun to wield.

Key strategic advantages for China

China's leverage rests on a few distinct structural strengths that are difficult for the US and its allies to replicate in the short term.

Near-total control over EV battery supply chains. China processes over 60% of global lithium, more than 70% of cobalt refining, and around 90% of graphite and rare earth processing . This concentration means most non-Chinese EV manufacturers remain dependent on Chinese inputs, making supply disruptions a credible threat .

Dominant manufacturing scale. As of 2025, six of the world's top ten EV manufacturers are Chinese companies, and China produces more than 60% of all electric vehicles globally . China also accounted for more than 70% of global EV and EV battery production in 2024 . This scale advantage translates into lower costs that Western competitors find difficult to match.

Integration with AI and data. Chinese EVs are increasingly platforms for AI-driven autonomy and connected services. The Institute of Geoeconomics notes that the integration of EVs with AI creates new vectors for data collection and technological lock-in, extending China's influence beyond hardware into software ecosystems .

Global factory footprint. Chinese EV makers are outpacing US automakers in overseas factory investments across Europe, Asia, and the Middle East, creating long-term dependency relationships with host countries . As one Brookings fellow told CNBC, companies like BYD "are becoming essentially the new GMs and Fords of the EV era" .

How Beijing is using this leverage

Beijing has moved beyond simply producing EVs cheaply. It is actively deploying its supply chain dominance as a policy tool.

Export controls on battery technology. In 2025, China imposed export restrictions on key EV battery manufacturing technologies, including equipment for lithium-ion battery production and battery cathode technology . These controls target the high-value processing and manufacturing know-how that other countries cannot easily replicate.

Critical mineral chokepoints. The US-China rivalry has moved beyond chip bans to critical raw materials that power EVs, grid storage, and defense industries . The US-China Economic and Security Review Commission documents that Beijing has already deployed export controls on critical minerals to seek trade concessions and punish other countries .

Battery export restrictions as trade-negotiation leverage. Bloomberg reports that China's restrictions on battery exports now give it a powerful new tool in trade negotiations with Washington — one that goes beyond its earlier use of rare earth controls . The Washington Post similarly notes that China is "discreetly broadening its export control framework" against the US and its allies beyond rare earths .

Creating dependencies in third countries. As SCMP reports, analysts argue that China may increasingly seek to use its EV dominance as geopolitical leverage over countries that become dependent on its technology, batteries, and supply chains — potentially influencing diplomatic positions on issues from Taiwan to trade .

The broader geoeconomic picture

The EV industry is not an isolated sector. It sits at the intersection of China's broader strategy to dominate the technologies of the future. Le Monde observes that China is "locking down its dominance over the cornerstones of the economy of tomorrow: Industrial artificial intelligence, robotics, batteries, biotechnology, renewable and nuclear energy" through massive research investment and targeted subsidies . The Center for Security Studies at ETH Zurich notes that China's use of export restrictions on critical minerals for retaliation, negotiation, and market control "exploits key global vulnerabilities" in the energy, electronics, and defense sectors .

What this means for the US and its allies

The US and its allies face a strategic challenge that goes beyond tariffs or trade deficits. The question is whether Western countries can build alternative supply chains fast enough to reduce dependency, or whether China's EV dominance will translate into durable geopolitical influence across the global economy. While de-risking strategies focused on supply chain diversification are underway, as the WEF notes, these efforts are costly and take time . In the meantime, China's commanding position in the EV ecosystem gives Beijing a powerful new form of leverage in its tech competition with the US.