What oil crisis? China’s EVs are ready to dominate the 21st century

By Simone McCarthy, CNN

Beijing (CNN) — A sleek SUV offers mechanical foot massages, a luxury minivan has rotating seats to help passengers hop into its third row – and a surprising proportion of models offer in-car karaoke with professional-grade speakers. Others have headlights that can project movies onto a wall to make anywhere a drive-in cinema. Here, intelligent driving features are ubiquitous, even in affordable models.

To many consumers peering in from the outside, the options in China – on display in Beijing this week at the world’s largest auto show – seem like a dream. But to some automakers and politicians around the world, they’re an existential threat.

Chinese carmakers are cranking out their offerings at a large scale and a comparatively low price. And there’s another major sell: while oil and gas costs skyrocket due to the Iran war, the vast majority of these cars are electric or hybrid.

The contrast with the US has never been as stark: Washington last year rolled back support for EVs in favor of gas guzzlers, and it has effectively barred Chinese cars from entering the market, citing a need to protect national security and local industry.

With US President Donald Trump expected in China in mid-May for talks with leader Xi Jinping, the country’s EV makers are also eyeing another frontier, watching whether growing global demand for EVs will help them pry open the door to the US market.

Regardless, the intended message from the 70-football-field-sized showcase is clear: China is relentlessly moving forward with the technology it believes will win the 21st century.

And China’s top carmakers – and Beijing – are betting big that the rest of the world will choose their vision of an electric future, rather than one still tied to the gas pump.

Rising gas prices are “a wake-up call for the people who never touch EV,” BYD executive Stella Li told CNN on the show’s sidelines, where she discussed the world’s largest EV maker’s ambitious expansion strategy. “When you jump to the electric car, you never walk back to switch to the gas vehicle.”

Outward push

Winning customers overseas is now imperative for China’s major players.

By a wide margin, the country has the world’s largest EV market. More than half of new cars sold in China are electric or hybrid. In its megacities and beyond, traffic is increasingly falling silent, the dull whir of the electric motor replacing the purr of an internal combustion engine.

But its industry titans are also locked in a knock-down, drag-out fight for market share, with brutal price wars and competition in a crowded home market deflating profits and stymieing growth.

Outward expansion is already ramping up as major brands push to build out charging infrastructure and woo customers and partners abroad. China’s EV exports in the first quarter surged 78% year on year, according to official data.

But China’s automakers are also navigating a global landscape that’s wary of the competition.

An open letter from more than 70 American lawmakers to Trump last week warned the president against “any effort to lower barriers for Chinese automobiles or otherwise facilitate their entry into the US market,” saying the consequences for American workers, supply chains and national security “would be profound.”

Hefty tariffs on cars imported from China to the US make for a de facto embargo, and a ban on Chinese-connected software in new cars complicates any plan to produce cars in the US or neighboring countries for the market.

Europe has opted for tariffs it sees as leveling the playing field, not blocking the competition. And Chinese carmakers are fast gaining market share there. New-car registrations for BYDs were up nearly 170% in the first quarter of this year in European Union countries, industry data shows.

What strikes fear into the hearts of overseas rivals is the sheer scale of production in China, where automakers can rely on deep domestic supply chains and have automated their factories.

Underlying that concern is that the government’s long-standing backing for the sector, in subsidies, tax breaks and other perks, has made Chinese cars unfair competitors that will wipe out global competition.

But Chinese firms take a different view.

BYD’s Li described to CNN her view that America’s strength comes down to its ability to attract the most intelligent companies and most talented people from around the world to compete. “Once you become a protected market, then you will lose this advantage … you will make the country weaker,” she said.

But BYD and other Chinese automakers including its major domestic rival, auto giant Geely, are not holding their breath on the US.

“We are open for discussion, but we do not have a plan to go to the US market to sell our cars to end customers in the short or medium run,” Geely’s senior vice president Victor Yang told CNN at the auto show.

Outside the US? Yang, whose company has joint ventures in a handful of countries including Brazil, South Korea and the United Kingdom, sees this push as a win-win. “The best from China’s electrification, smartification practices can be shared with partners in other parts of the world, so that customers can finally benefit from the growth of the technology as a whole,” he said.

Fight for the future

Tech transfer from Chinese auto firms to foreign peers is an abrupt reversal from a situation just decades ago when it was Chinese automakers relying on joint ventures with foreign brands in their market for know-how.

Now, much in the way that Ford and the assembly line came to symbolize American ingenuity of the 20th century, China’s EV sector and its heavily automated production have become emblematic of China’s rise as a tech powerhouse in the 21st.

Global success for China’s EV makers could offer Beijing a new lever of soft power – at a time when the country is trying to position itself as an alternative global leader to the US.

And the over-two-month-long global oil shock also underscores what Beijing sees as a merit in its chosen path.

China’s EVs fit into the government’s broader, yearslong push to reduce reliance on oil and gas and electrify its economy, including with renewable energy. It’s a strategy that appears to have served the world’s second-largest economy well in the current crunch.

China’s fleet of electric and hybrid vehicles has reduced national oil demand by more than 1 million barrels per day, according to a 2025 study by the Rhodium Group.

But a lap through the halls of the Beijing auto show makes it clear that Chinese brands don’t see their race as one that’s simply about fuel efficiency. Instead, it’s one about tech.

And just as US firms like Tesla and Waymo are building out a future where fleets of autonomous cars shuffle people through their daily commutes and lives, their Chinese rivals – carmakers like XPeng, Geely, BYD, and tech firms like Baidu, Huawei and Pony.Ai – are building out their own tech ecosystems to do the same.

And there, too, Chinese firms are confident in they can compete.

The-CNN-Wire
™ & © 2026 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.

CNN’s Joyce Jiang and Martha Zhou contributed to this report.