The global transformation of the automotive industry has an increasingly clear center of gravity. Nearly 22 million electric cars were manufactured worldwide in 2025, and almost three out of every four came from plants in China. The country produced around 16 million and exported more than 2.5 million, twice as many as a year earlier. These figures illustrate the scale its industry has attained, but they do not by themselves explain the advantage it has built over Europe, the United States, and other major producers.
To understand that position, it is necessary to look beyond the factories where vehicles are assembled. China also accounts for more than 80% of global lithium-ion battery cell production and even higher shares of some of the materials needed to make them. Its presence throughout the supply chain, combined with a vast domestic market, competitive costs, and an industry that has been producing at scale for years, is one of the keys to its current leadership.
The situation is not the result of a single innovation, nor can it accurately be described as a technological monopoly. Europe, the United States, Japan, and South Korea retain significant manufacturers, suppliers, and technological capabilities. The difference lies in the degree of concentration China has achieved at virtually every stage required to turn raw materials into a finished electric car.
China’s advantage begins with batteries
Batteries offer a particularly clear view of this imbalance. According to the International Energy Agency, China produced more than 80% of the world’s lithium-ion battery cells in 2025, while Chinese manufacturers supplied around three-quarters of the batteries installed in electric vehicles. Further upstream in the supply chain, concentration rises: the country accounts for approximately 85% of global production of cathode active materials and more than 90% of those used in anodes.
This means that opening a battery factory in Europe or the United States does not automatically eliminate foreign dependence. Cells can be produced locally while certain processed materials and components continue to arrive from China. This industrial integration provides advantages in scale, cost, and production speed, while also helping innovations developed by battery and automotive manufacturers reach the market quickly.
Companies such as CATL and BYD have grown within this ecosystem into international players. China, however, does not control all the natural resources needed to supply the industry. Australia and Chile play a key role in lithium extraction, while Indonesia does so in nickel. Much of China’s strength lies in the subsequent stages: materials processing, component manufacturing, battery production, and vehicle assembly.
Nor was this position built on the recent commercial boom in electric cars. For more than two decades, China has viewed new mobility technologies as an industrial opportunity. Compared with European, U.S., and Japanese manufacturers that had accumulated generations of experience and established brands built around the internal combustion engine, electrification offered an opportunity to compete on different technological ground. Public policies supported the production and purchase of electric vehicles, infrastructure construction, and the development of a domestic supply chain; subsequently, intense competition among Chinese manufacturers accelerated cost reductions and the development of new models.
Volume ultimately became another advantage. The more vehicles and batteries the industry produced, the greater its ability to improve processes and reduce costs. But that same expansion has created a problem within China: production capacity has grown faster than domestic demand, and the price war has squeezed the margins of numerous manufacturers. In 2025, China’s electric-car production exceeded the needs of its domestic market by roughly 20%, while exports doubled to more than 2.5 million units.
Europe faces competition that extends beyond the automobile
Excess production is shifting an increasingly large share of competition to international markets. Outside China, Europe, and the United States, 55% of electric cars sold in 2025 were imported from China. Five years earlier, that proportion was below 5%. The shift illustrates the extent to which Chinese manufacturers have moved from focusing on their vast domestic market to competing for customers in regions where they had only a limited presence a few years ago.
Europe occupies a particularly delicate position. The European Union wants to accelerate the electrification of transport to reduce emissions, but it also needs to preserve an automotive industry that provides jobs, exports, investment, and industrial activity across numerous regions. The challenge is not merely to ensure that European brands manufacture good electric vehicles, but to prevent an increasing share of the automobile’s value added from shifting to suppliers located outside the continent.
Europe’s response combines trade protection with industrial investment. Battery manufacturing capacity within the Union is increasing and, in 2025, grew faster than China’s in percentage terms, although from a much smaller base. Europe currently accounts for around 6% to 7% of global capacity, compared with more than 80% concentrated in China. Closing that gap requires more than building new plants: it requires suppliers, processed materials, technological know-how, specialized workers, and sufficient production volume to compete on cost.
The difficulty lies precisely in rebuilding an industrial supply chain while technology continues to advance. Chinese manufacturers are not standing still while waiting for their competitors to close the gap. They are investing in new battery chemistries, manufacturing processes, and lower-cost models, while expanding their international presence. The International Energy Agency expects that, under currently announced policies, China will remain the world’s leading manufacturer of batteries and related materials through at least 2035.
Figueruelas links Aragon to this global transformation
This industrial shift has a direct connection to Aragon. Stellantis and CATL are developing a battery plant in Figueruelas that places Zaragoza on Europe’s map of the new automotive industry. The project aims to bring to Europe part of the production needed to supply electric vehicles and strengthen an industrial complex that has been tied to conventional automobiles for decades.
At the same time, the operation reflects one of the paradoxes of Europe’s strategy. To reduce its dependence on batteries produced in Asia, Europe must in some cases turn to the capital, technology, and expertise of Chinese companies that currently lead the sector. CATL is not merely a foreign investor in Figueruelas: it is one of the world’s largest battery manufacturers and part of the industrial ecosystem whose advantage Europe is seeking to reduce.
The future plant in Aragon can help localize production, attract suppliers, and preserve the industrial importance of the Figueruelas area in the transition to electric vehicles. But manufacturing batteries in Zaragoza does not mean that their entire value chain will automatically become European. The origin and processing of raw materials, the manufacture of certain components, and control over essential technologies will remain decisive factors for
