In 2009, fewer than 500 electric vehicles were sold in China. In 2024, that number was 11 million. Nearly half of all cars sold in the country last year had a plug. That didn’t happen by accident. It is the result of two decades of planning and production from the top of the Chinese government on down.
Before Canadians can have an honest conversation about EV tariffs, critical minerals, or our own sluggish adoption targets, we need to understand the machine that produced this transformation. China has built an entire ecosystem around EVs, from the mines to the batteries to the chargers to the ships that carry finished vehicles overseas. And it did it with a level of coordination that Western democracies are struggling to replicate.
The roots of China's EV strategy go back to 2001, when Beijing designated electric vehicles as a priority under its national science and technology program. But the real starting gun fired in 2009, with the launch of the "Ten Cities, Thousand Vehicles" program. The plan was straightforward: subsidize 1,000 electric buses, taxis, and fleet vehicles in each of 10 pilot cities. It quickly expanded to 25 cities.
China knew it couldn't beat Germany, Japan, and the U.S. at building internal combustion engines. For decades, the best-selling cars in China were designed by foreign companies and built through joint ventures. Chinese-made gas cars were seen as low-quality knockoffs. But electric vehicles reset the playing field. EVs have far fewer moving parts, radically reducing the engineering moat that traditional automakers had spent a century digging.
In 2010, new energy vehicles were formally designated one of China's seven strategic emerging industries. What followed was a subsidy apparatus of extraordinary scale. According to the Center for Strategic and International Studies, China spent roughly $231 billion on EV-related support from 2009 through 2023, including buyer rebates, tax exemptions, charging infrastructure, government procurement, and R&D funding.
But the subsidies were designed to get tougher over time. Each year, the range, battery density, and efficiency thresholds required to qualify got stricter, forcing manufacturers to innovate rather than coast. When subsidies were slashed by more than 50 percent in 2019, the industry consolidated. The weakest players died, and the survivors emerged stronger.
The real story, however, is the battery supply chain.
CATL, founded in 2011 as a spinoff from a portable electronics battery company, now controls roughly 38 percent of the global EV battery market. BYD, founded in 1995 as a phone battery maker by Wang Chuanfu, a chemistry graduate from rural Anhui province, now delivers over four million electric vehicles per year. Crucially, both companies made their bets on lithium-ion technology before government policy fully caught up.
BYD's approach has been compared to Henry Ford's. The company manufactures its own batteries, motors, semiconductors, and software. It owns stakes in lithium mines. It recently launched its own fleet of car-carrier ships. This level of vertical integration gives BYD a cost advantage that legacy automakers in Detroit, Stuttgart, and Tokyo simply cannot match on short timelines.
Critical minerals, however, are the chokepoint for the entire EV industry, and it is something Canadian policymakers should pay attention to.
China controls over 90 percent of global refining capacity for graphite and rare earth elements. It processes about 60 percent of the world's lithium and cobalt. It manufactured more than 80 percent of all battery cells globally in 2024. And Chinese companies own 80 percent of cobalt production in the Democratic Republic of Congo, which produces more than half the world's cobalt supply.
Even when minerals are mined in Australia, Chile, or Canada, they typically flow through Chinese refineries before reaching battery factories. China’s dominance in this sector lies in its processing capabilities, and these take decades and billions of dollars to build up to scale.
A battery made outside of China costs an estimated 50 percent more than a Chinese equivalent.This is a structural advantage built over 15 years of strategic investment.
In October 2024, Canada slapped a 100 percent tariff on Chinese-made EVs, mirroring a similar U.S. move. China retaliated with duties on Canadian canola, peas, and seafood. By early 2026, a deal was struck: the tariff came down to 6.1 percent for up to 49,000 vehicles, and China reopened its doors to Canadian agricultural exports.
The tariff debate is real, but it obscures the issue of Canada’s zero-emission targets and related EV infrastructure. Canada's zero-emission vehicle targets require a dramatic ramp-up in EV adoption. We currently lack the domestic battery manufacturing, mineral processing, and charging infrastructure to get there without relying on supply chains that run through China. And building alternatives will take decades.
China built the entire value chain, from the lithium in the ground to the charger on the curb. Understanding the scale and sophistication of that project is the first step toward figuring out how Canada fits into the picture.
Next in the series: Part 3 will examine what Chinese EV dominance means specifically for Canada's auto sector, critical mineral ambitions, and climate targets.