The electric car race is shaping up to be one of the all-time economic battles

<p>The great scramble for the global car market is underway and it looks like China will win.</p><p>Last year China unleashed a carefully planned ramp up in EV production from the ground up, including an entirely domestic battery industry that also holds 70% of global market share.</p><p>Combine that with China's incredible manufacturing prowess along with low wages and they have a winning hand. This is one of the most-impressive economic charts I've ever seen.</p><p>The speed with which China has passed the world in cars is breathtaking and it has people in Washington and Berlin frightened.</p><p>For its part, the US took some action to protect its important domestic market, with heavy tariffs placed on Chinese cars and various EV subsidies that only apply to cars built in the USA. That isn't exactly textbook capitalism and goes against what the US has preached on competition for generations but it is what it is.</p><p>Europe was caught watching and is now in a panic.</p><p>European Commission President Ursula von der Leyen delivered her annual State of the EU address on Wednesday and focused much of it on Chinese EVs. She singled out Chinese companies receiving subsidies and said they were dumping cars on the EU at below-market prices. She said the EU may need tariffs.</p><p>Talk about subsidies is rich from the EU and US who wildly subsidize their own automotive industries and, especially, green industries. As for dumping, here's the data from CleanTechnica:</p><ul><li>BYD Dolphin — In France: €28,990, In China: 116,800 yuan (€15,200)</li><li>MG ZS — In Germany: €31,310, In China: 119,800 yuan (€15,600)</li><li>Zeekr X — In Germany: €44,990, In China: 189,800 yuan (€24,700)</li><li>Polestar 2 — In Germany: €48,990, In China: 299,800 yuan (€38,900)</li><li>BMW iX3 — In Germany: €67,300, In China: 405,000 yuan (€51,800)</li><li>Nio ET7 — In Germany: €69,900 without battery, €81,900 with battery, In China: 428,000 yuan (€55,600)</li></ul><p>There's no certainly no evidence of dumping there.</p><p>But I don't know if the facts matter in Germany, which is already reeling on the energy front. A loss in the automotive market would be crippling to the economy.</p><p>So duties will come. In the end, that will leave the world's auto market siloed with Chinese, European and US automakers increasingly locked out of each other's markets. Japan and South Korea look to have played their hands relatively well, preserving access to global markets and also ready to compete.</p><p>The real battle will be for the rest of the world and that's where I think China will win. We see this already in Russia where six of the top-10 models are Chinese. One popular model is at $14,000 Geely Coolray, which looks pretty good to me. </p><p>The same model eating up the market in the Philippines, where it sells for about $23,000.</p><p>The conclusion here is simple — these prices are far, far less than what US and European EV manufacturers are charging. There's some understandable hesitancy around quality, parts and durability but at half the price, there's a market. And the market outside of the US and Europe is a big and growing one. </p><p>The rest of the world doesn't care about subsidies, protectionism and trade relations, it just wants an affordable car.</p>

This article was written by Adam Button at www.forexlive.com.