The EV Market Beijing Already Won

The Beijing Auto Show 2025 hall is packed as visitors explore XPeng and Lynk & Co cars on display alongside other.

On October 22^nd, 2025, Tesla reported a 37 percent profit drop in their third fiscal quarter of 2025. However, revenue rose 12 percent, currently valuing Tesla at $28.1 billion. However, Tesla sold more cars from July through September than it did in the same time frame in 2024. Yet, Tesla earned less due to exorbitant price cuts and low-interest loans. However, it may be too late for Tesla, as the People’s Republic of China (PRC) has cemented itself as the dominant supplier of electric vehicles both globally and in the Western Hemisphere. In the second fiscal quarter of 2025, China’s Build Your Dreams (BYD) tripled Tesla’s sales in plug-in electric vehicles (PEV), selling an estimated 1.1 million PEVs, while Tesla only sold 380,000. Furthermore, in the same period, BYD sold more than 600,000 battery electric vehicles (BEV) compared to Tesla’s 380,000 BEV sales. 

Since 2009, PRC President Hu Jintao then Xi Jinping after his rise to power in 2012, pushed for carmakers in mainland China to receive low-interest loans, cheap land, and rebate incentives, totaling $230 billion of aid to jump-start China’s electric vehicle (EV) industry. As a result, China now maintains more than one hundred functioning automobile factories with the theoretical capacity to produce over 40 million vehicles per year, double what China’s consumer market can absorb. Overcapacity has forced China to look globally. 

By 2024, China has exported 5.7 million vehicles, more than any other country. Furthermore, from January 2024 to November 2024, China accounted for 69.6 percent of global EV sales, and 51 percent of EV sales in Latin America. The Latin American Association of Automobile Dealers reported EV sales in Latin America grew to 412,493 units in 2024. In that same year, battery electric vehicles (BEV) sales grew 139.3% and plug-in hybrid (PEV) sales rose 156.1% in Latin America. 

Furthermore, as of September 2025, global EV sales reached 2.1 million, propped by Chinese demand, accounting for over half the global trade. Overall, Latin America has quickly become one of the most vital destinations for EVs because the products are cheaper, arrive faster, and are bundled with infrastructure support funded by China’s EV companies. 

Brazil has become an epicenter of China’s EV demand. In 2022, China registered 49,245 EVs in Brazil. Moreover, registration increased by 91 percent for 2023 with 93,927 units registered. Then in May 2025 alone, Brazil sold 14,000 EVs, a 64 percent growth from May 2024. In that same period, BEV grew 35 percent, and PEV increased 104 percent in sales. BYD holds the largest market shares at 64 percent of the entire Brazilian EV market, with China’s Great Wall Motors holding the second highest at 18 percent. In contrast, Tesla is not on the top ten of EV brands in Brazil. Finally, from February 2024 to February 2025, BYD controlled more than 70 percent of Brazil’s battery-electric market and approximately 60 percent of the plug-in market. 

China’s success in Brazil is about more than price. BYD has been aggressively localizing its operations by engaging with local businesses. In 2015, BYD opened a factory set to make 1,000 electric buses per year. Then, in 2020, BYD began operation in Manaus producing lithium iron phosphate batteries and installing electric bus chassis for an initial investment of $2.7 million. The factory is set to produce 18,000 batteries a year. Additionally, in 2025, BYD converted the former Ford manufacturing plant in Bahia into an EV production site for $978 million, creating a capacity of 150,000 EVs a year. The facility was inaugurated by BYD and Brazilian President Lula, highlighting Beijing’s expanding industrial footprint. However, in 2024, Brazilian authorities closed a BYD facility due to slave-like conditions. The workers were hired by Jinjiang Construction Brazil, living in four facilities across Camacari. One bathroom was shared amongst 31 workers. More importantly, most workers were forced laborers as many had their wages withheld and faced excessive cost for contract termination.

Overall, the rapid development of production facilities in Brazil has allowed BYD to bypass tariffs and reduce shipping costs. Moreover, BYD has formed a strategic partnership with Brazil’s Raízen Power to build electric charging hubs across eight major cities, with an estimated 600 charging piles planned. The cities include São Paulo, Rio de Janeiro, Belo Horizonte, Brasília, Curitiba, Florianópolis, Salvador, and Belém. Also, BYD and Brazilian President Lula recently announced a new powertrain developed specifically for Brazilian markets. BYD’s “Super Hybrid” vehicle is compatible with biofuel, a popular fuel source in Brazil. Overall, this strategy creates a supportive ecosystem around Chinese brands through strategic partnerships with local companies like Raizen Power and growing ties with President Lula. 

On the other hand, Chile’s EV market, while smaller, is undergoing a dramatic and rapid transformation. In Chile, EV sales represent an estimated 2 percent of the automobile market. From May 2023 to May 2024, EV sales in Chile grew approximately 500 percent, with monthly sales consistently surpassing 400 units. Furthermore, Chile’s market has been shifting toward BEVs specifically, growing sevenfold since early 2022. Although Tesla maintains the highest-selling individual model in Chile, BYD has secured a larger share of the overall market because it offers more models, more price points, and more flexibility. On average, in Chile, a Tesla Ev costs $42,359 while BYD costs $21,191.

The underlying question remains: Why are Chinese EV companies outcompeting U.S. companies so effectively? Even after accounting for transoceanic shipping, Chinese EVs often cost half as much as their American counterparts. But price is really a product of China’s dominance of the supply chain. Modern EV batteries require lithium, nickel, cobalt, and manganese. American vehicles rely heavily on a nickel, cobalt, and manganese (NMC) cathodes. China owns most of these minerals and refines most rare earth elements. More specifically, China controls 41 percent of cobalt, 28 percent of lithium, 6 percent of nickel 78 graphite, and 5 percent manganese. Similarly, China refines 95 percent of the manganese, 73 percent of cobalt, 67 percent of lithium, and 63 percent of nickel. The United States refines almost none. Without processing capacity, raw minerals are just rocks. China turns them into batteries, forcing American companies like Tesla to rely on importing many rare earth minerals, sinking costs into tariffs due to China’s capacity of manufacturing 73 percent of any NMC cathode.

Also, BYD primarily uses lithium-iron phosphate (LFP) batteries, which are safer, cheaper, and faster-charging than higher-density batteries like Tesla’s nickel-manganese-cobalt designs. Furthermore, BYD’s batteries run simpler cooling nodes and require fewer safety components in addition to a smaller battery capacity. Currently, BYD has announced plans to make all vehicles charge from 0 to 100 percent in five minutes. 

On the other hand, Tesla’s frequent recalls of EVs, such as the Cybertruck, have been recalled eight times since its release, significantly weakening investor and consumer confidence. Tesla’s global production also relies heavily on Chinese suppliers. Beginning in 2025, Tesla’s Shanghai megafactory is expected to supply 20 percent of its battery supply from BYD’s subsidiary FinDreams. The rest will come from CATL, the world’s largest battery producer based in China, manufacturing 10,000 megapack batteries yearly. Also, in 2024, CATL and Tesla began a partnership to explore a new battery to fuse both lithium and a NMC cathode to ensure high density with pure lithium cells.

China’s aggressive approach to Latin America’s EV industry overshadows their “new infrastructure” approach, focusing on finished goods and technology versus infrastructure projects. Yet, it is not too late for the United States to respond. Strengthening partnerships through mechanisms such as the Department of Energy’s Federal Consortium for Advanced Batteries could improve access to critical minerals and expand research collaboration. Moreover, the U.S. International Development Finance Corporation could provide grants or loans enabling American automakers to build charging networks across Latin America, directly competing with Chinese infrastructure projects. Lastly, regional coordination through U.S. Southern Command could help create investment-screening systems like the Committee on Foreign Investment in the United States, providing transparency around foreign influence.

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This article was written by Martin Brown, a graduate student in the Global Affairs program at Florida International University. He holds a B.A. in International Relations and Political Science with a certificate in National Security Studies, and currently works as an open source analyst at FIU’s Jack D. Gordon Institute.