The Road to Dominance: How China's EV Giants Are Reshaping Global Auto Markets

The global auto industry is undergoing a seismic shift, and China's electric vehicle (EV) titans—BYD and Geely—are at the epicenter. Driven by subsidies, scale economies, and aggressive export strategies, these companies are not just competitors but architects of a new automotive order. For investors, the question is clear: How can one capitalize on this structural transformation?

The Three Pillars of China's EV Ascendancy

1. Subsidies and Scale: China's EV industry has been turbocharged by state support, including subsidies, tax breaks, and infrastructure investments. BYD, for instance, leverages its vertically integrated supply chain—owning battery production (through its FinDreams subsidiary) and semiconductor design—to undercut global rivals. This scale has enabled BYD to sell its EVs at prices 30–40% lower than Tesla's in key markets like Europe.

2. Export Aggression: While traditional automakers like Toyota and Volkswagen have been slow to pivot to EVs, BYD and Geely are exporting at breakneck speed. In H1 2025, BYD's exports surged 229.8% year-on-year to 470,000 units, nearly matching Tesla's European registrations. Geely, despite a temporary dip in H1 exports (-8% YoY), is countering with localized manufacturing—e.g., a joint venture with Renault in Brazil and a CKD (Completely Knocked Down) plant in Vietnam—to bypass tariffs and capture emerging markets.

3. Battery Supremacy: China's dominance in lithium-ion batteries is a linchpin of its EV strategy. CATL, the world's largest battery maker, supplies not just BYD and Geely but also Tesla and European automakers. With 60% global battery cell capacity by 2026, CATL is positioned to profit from both domestic and global EV demand.

Investment Opportunities: Follow the Supply Chain and Exports

Battery Suppliers (e.g., CATL):
The EV boom hinges on battery production. CATL's vertically integrated model—controlling lithium mining, cathode production, and recycling—gives it a cost advantage.

Export-Driven Automakers (BYD, Geely):
BYD's 229.8% export growth in H1 2025 reflects its global ambition. Its Ro-Ro ships, built to carry 30,000 EVs at a time, and plans for factories in Hungary and Brazil signal a long-term play for market share.

Geely's $20B joint venture with Renault in Brazil—to produce EVs at a 100,000-unit annual capacity—shows how alliances can unlock high-growth markets.

Risks to Watch

• Subsidy Tapering: China's EV subsidies are set to decline after 2025, potentially squeezing margins.
• Trade Barriers: EU tariffs and “rat-race” price wars (e.g., BYD's 34% discounts in China) could pressure profitability.
• Overcapacity: With global EV production set to hit 20 million units in 2025, oversupply risks could emerge in niche segments.

The Bull Case: A Decade of Structural Growth

Despite near-term risks, the long-term tailwinds are undeniable. By 2030, EVs could account for 50% of global auto sales, driven by stricter emissions rules and consumer demand for lower-cost transportation. China's firms are best positioned to capitalize:
- Cost Leadership: BYD's $26,000 Seagull model undercuts Tesla's $38,000 Model 3 in Europe.
- Geographic Diversification: BYD's 30% export share to Europe and Geely's 18% to Southeast Asia reflect a balanced risk profile.
- Technological Edge: CATL's 800V fast-charging batteries and BYD's blade batteries are setting new benchmarks for energy density and safety.

Investment Thesis

• Buy CATL: Its scale, cost advantages, and global partnerships make it a must-own for investors.
• Hold BYD: Despite near-term profit pressures, its export growth and vertical integration justify a long-term hold.
• Monitor Geely: Its partnerships (e.g., Proton in Malaysia, Renault in Brazil) offer exposure to high-growth markets without the volatility of pure-play automakers.

Conclusion

The EV revolution is not a fad—it's a generational shift. China's automakers and battery giants are leading this charge, and their export-driven strategies are rewriting the rules of global competition. For investors, the path to profit is clear: follow the supply chain and the shipping lanes.

Risk Disclosure: EV markets are volatile and subject to regulatory and geopolitical risks. Past performance does not guarantee future results.