The global automotive industry is at a pivotal moment, facing industrial, environmental, and geopolitical pressures. This report examines the shift toward cleaner vehicle technologies and argues that small electric cars (EVs) are an underappreciated part of the solution—helping to address economic and supply chain challenges while delivering environmental, safety, and strategic benefits.
The report begins by analyzing the evolution of the global automotive market since 2005. It highlights how China has secured a competitive edge in EV technology, including in battery supply chains, as well as in manufacturing efficiency and the electronics sector, with the latter contributing more recently to its competitiveness in software-defined vehicle development. Increasing competition from Chinese manufacturers is now considered a significant challenge to legacy automotive manufacturing companies in high-income countries and emerging economies. The grip of China over battery supply chains has also led to perceptions of material dependency and supply chain risks.