CAR Research Identifies Six Factors Driving China’s Global Automotive Competitiveness

The Center for Automotive Research (CAR) released a new white paper, China’s Automotive Surge: The Six ‘S’ Framework Underpinning China’s Global Competitiveness, providing an independent analysis of the interconnected factors that have propelled China to the forefront of the global automotive industry.

China is now the world’s largest automotive market, producer, and exporter, while Chinese automakers continue to gain market share across global markets. CAR’s analysis finds that this emergence is not the result of a single competitive advantage, but rather six reinforcing factors that have developed over decades.

CAR identifies the Six “S” Factors of China’s Automotive Competitiveness:

• Set Up: A decades-long industrial architecture combining government policy, technology transfer, domestic scale, and electrification.
  
  
• Supply Chain: A highly developed domestic supply chain, particularly for electric propulsion, batteries, critical mineral processing, and related technologies.
  
  
• Speed: Faster decision-making, compressed development cycles, platform and component reuse, and a greater tolerance for launch risk.
  
  
• Saturation: Production and manufacturing capacity increasingly exceeding domestic demand, creating pressure to expand into global export markets.
  
  
• Subsidies: Extensive producer, consumer, and non-monetary government support that has advanced broader industrial policy objectives.
  
  
• Sales: Rapidly expanding domestic and global sales that are shifting long-standing automotive market-share dynamics.
  
  

“China’s automotive competitiveness has been built over decades through a combination of industrial strategy, supply chain development, scale, and an extraordinary ability to move quickly,” said Elizabeth Krear, President & CEO of the Center for Automotive Research. “For North American automakers, suppliers, and policymakers, understanding how these factors reinforce one another is essential. The goal of this research is not simply to document China’s rise, but to provide the industry with a clearer framework for understanding where competitive pressures are coming from and where opportunities exist to strengthen North America’s automotive ecosystem.”

Among the findings highlighted in the report:

• Chinese automaker global market share increased from 14% in 2020 to 25% in 2025, approaching Japanese automakers’ 26% share.
  
  
• Total Chinese automaker sales increased 101% between 2020 and 2025, compared with 7% growth among all other global automakers combined.
  
  
• China produced approximately 68% of global EV batteries in 2025 and holds approximately 85% of global battery recycling capacity.
  
  
• China’s automotive production exceeded domestic sales by approximately 6.2 million vehicles, while excess manufacturing capacity reached approximately 15 million units in 2025.
  
  
• Passenger vehicle exports from China increased approximately 69% from Q1 2024 to Q1 2026, with New Energy Vehicle exports increasing 211% during that period.
  
  
• In Mexico, Chinese automakers increased market share from less than 1% in 2020 to 14.5% in 2025.
  
  

The findings underscore both the scale of the competitive challenge and the opportunity for North American industry stakeholders to study the practices that have enabled China’s rapid growth. CAR points to lessons surrounding government-industry coordination, supply chain resilience, manufacturing and product-development practices, industrial policy, and emerging technologies.

The white paper serves as foundational research for CAR’s broader work examining global automotive competitiveness and the implications of China’s continued expansion for North American manufacturers, suppliers, policymakers, economic development organizations, and other industry stakeholders.

“China’s automotive trajectory is reshaping competitive expectations across the industry,” Krear added. “North America has tremendous automotive capabilities, but maintaining global competitiveness will require informed decisions, greater coordination, and a clear understanding of how the competitive environment is changing.”

Read the Full Report

China’s Automotive Surge: The Six ‘S’ Framework Underpinning China’s Global Competitiveness is available through the Center for Automotive Research.

Download the full white paper.

Organizations interested in exploring how these trends may affect their business, supply chain, investment strategy, or policy environment can also engage CAR for independent research, scenario planning, economic impact analysis, and strategic industry insights.

Center for Automotive Research

The Center for Automotive Research (CAR) is an independent, non-profit organization conducting industry-driven research and analysis. Focusing on critical areas like Energy & Sustainability, Technology, and Labor, Economics, and Policy. CAR has been a trusted resource for the automotive industry for over twenty years. www.cargroup.org