In recent months I have been hearing serious concern about what is going on in the European and indeed U.S. automotive sector. The reason I have such an interest is how relevant this sector is and will be to ‘6G’ when it comes. This is where European climate policy is crashing into the reality of the macroeconomics of technology leadership and dominance. Thing is, China’s electric vehicle (EV) revolution is reshaping the global automotive landscape, but don’t mistake it for a noble quest to slash carbon emissions. The driving force is economics, not environmentalism. Chinese drivers are flocking to EVs, lured by fuel savings of $250-$350 a month, thanks to electricity priced at a mere $0.08-$0.10 per kilowatt-hour—far cheaper than gasoline at $6-$7 per gallon equivalent. This affordability stems from China’s reliance on coal-fired power plants, which generate 58% of its electricity at costs as low as $0.04-$0.06 per kWh, among the cheapest globally. As the rest of the world shuns coal to meet Paris Agreement targets, China and India, unbound by stringent mandates until 2030, capitalize on low global coal prices, which dropped 15% in 2023.
This economic edge has propelled China’s EV market to a commanding 37% of new vehicle sales in 2023, with exports hitting 1.2 million units in 2024, capturing 35% of the global market. Companies like BYD and NIO churn out EVs 20-30% cheaper than Western rivals, undercutting brands like Volkswagen and Tesla. Yet, the environmental narrative is shaky: EVs in China, powered by coal, emit 150-200 grams of CO2 per kilometer—20-30% less than gasoline cars but still carbon-intensive. China’s coal plants spewed 5.4 billion tons of CO2 in 2023, nearly half the global coal-related total, belying green rhetoric.
The West, meanwhile, is hamstrung by its own climate commitments. The EU’s €100-per-ton carbon price and 55% emissions reduction target by 2030, alongside the US’s 50% cut, inflate production costs. Western automakers face expensive transitions to renewables, while China added 47 GW of coal capacity in 2023—68% of global additions. This uneven playing field is crushing the Western auto sector: Volkswagen and Stellantis reported 15-20% profit margin declines in 2024, while Chinese firms expand aggressively.
Beyond economics, a darker threat looms. Modern EVs are data-gathering platforms, collecting real-time information on drivers’ locations and habits. Chinese EVs, governed by the 2017 Cybersecurity Law, could funnel data to state-linked entities. If BYD achieves its 10% EU market share goal by 2025, these vehicles could form a vast surveillance network, potentially integrating with TikTok’s 1.5 billion users and Huawei’s 30% share of Europe’s 5G infrastructure. This unparalleled information ecosystem could compromise Western privacy and security.
The West’s self-imposed Paris constraints, without reciprocal obligations on China, are not just eroding our automotive competitiveness—they’re ceding strategic ground in a data-driven world. Policymakers must rethink trade and technology strategies to counter China’s EV juggernaut before it’s too late.
Declan Ganley is an Irish Entrepreneur and is Chairman & CEO of Rivada Space Networks.