In Germany, Japan and the United States, famous carmakers are in trouble. One reason is intense competition from Chinese electric vehicle manufacturers – and growing public demand for EVs. The automakers who dominated the 20th century have largely failed to shift to electric.

Volkswagen was once the biggest carmaker in China. Now it only has a bit part. In June, it announced plans to cut 100,000 jobs worldwide. “We have no chance against this,” admitted Honda CEO Toshihiro Mibe after visiting a high-tech EV factory in Shanghai. Months earlier, Ford CEO Jim Farley warned Western carmakers were “in a fight for our lives”.

In 2025, Chinese factories produced almost 75% of the world’s EVs. As more and more drivers go electric, esteemed brands and luxury carmakers have been forced to close factories and scramble to stay relevant. The global shift to EVs has accelerated amid the US-Iran conflict.

China’s rise wasn’t a given. It was a gamble. But it is now paying off – and legacy automakers are struggling to cope.

Sudden success, decades in the making

In 1949, the Communists won the Chinese civil war. That same year, the new People’s Republic of China established its first car factory to reduce reliance on imports and develop manufacturing strength.

In the late 1970s, leader Deng Xiaoping began opening China to outside investment – including the car industry. During the 1980s and 1990s, local........

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