The world's carmakers are struggling to compete with China

Key developments are emerging from the global stage. The world's carmakers are struggling to compete with China45 minutes ago Share Save Add as preferred on GoogleSuranjana TewariAsia Business Correspondent, Beijing and Hefei, China Watch: China’s electric vehicle success in light of Iran warGlobal carmakers are facing a reckoning as US, European and Japanese brands lose ground to Chinese rivals setting the pace not only in electric vehicles, but also in batteries, design and software. The visited factory floors in Beijing and Hefei on the sidelines of Auto China 2026 - the world's largest car show - and found striking levels of automation and software development speed, leaving foreign brands that once dominated the Chinese market struggling to keep up. "We have no chance against this," Honda chief executive Toshihiro Mibe told Japanese media after visiting a highly automated factory in Shanghai.

Ford chief executive Jim Farley has also warned that Western carmakers, are "in a fight for our lives" as Chinese rivals expand globally. After decades spent investing in joint ventures with Chinese partners to build vehicles, foreign carmakers are now changing the nature of those partnerships to stay competitive. "The biggest mistake that the developed world is making is believing that the transition is only about electric cars," says Shanghai-based auto analyst Bill Russo.

The Details

"It's about who will lead the next generation of mobility technology. "Smartphones on wheelsChina's dominance goes beyond the cars themselves. It makes the most exports in more than 315 product categories, up from 163 in 2016, according to a report by Rhodium Group.

Many of these are linked to electric vehicle (EV) supply chains, including batteries, components and manufacturing machinery. The International Energy Agency estimates it is at least 30% cheaper to produce a small electric SUV in China than in more advanced economies, largely because of lower battery costs and elaborate supply chains. That advantage was built through years of state support.

Rhodium estimates China has channelled tens of billions of dollars into EV and battery manufacturing in recent years alone. Those subsidies, heavily criticised in the EU and US for distorting markets, have helped companies expand rapidly and cut prices. Getty ImagesXpeng told the it is now prioritising the development of robots and flying cars Competition inside China has also sped up innovation.

What Experts Say

Tech giants like Xiaomi, Huawei and Alibaba are now making EVs, bringing consumer technology into the car industry. "They're not racing the West anymore," says Russo. "They're racing each other.

"As cars increasingly rely on software, from driver assistance to entertainment systems, these companies are giving Chinese carmakers yet another edge. The shift is most visible inside Xiaomi's EV factory outside Beijing, where a car rolls off the production line roughly every 76 seconds. Xiaomi only launched its first EV in 2024 but it is already one of China's top-selling brands.

The development has drawn wide international attention, with diplomatic circles watching closely.