Global Implications of China’s EV Dominance: Assessing Benefits, Supply Chain Risks, and Market Concentration

This study provides a comprehensive assessment of the global implications arising from China’s dominant position in the electric vehicle (EV) transition. By 2030, under current policy trends, China is projected to account for approximately 57% of the global EV stock (238 million vehicles) and 53% of the worldwide EV-driven oil displacement (2.75 million barrels per day). Its demand for automotive batteries will reach 1516 GWh, representing 47% of the global total. Employing LMDI-I decomposition, we find that China’s outsized impact is driven not merely by the scale but by the higher vehicle utilization intensity (contributing 61% of its advantage) and policy support for efficient vehicle types like plug-in hybrids and two/three-wheelers (contributing 31%). The extreme geographic concentration creates a significant systemic risk; our Monte Carlo simulation indicates a 92% probability that a moderate supply shock in China would trigger a severe global battery shortage. Conversely, China stands to gain substantial economic benefits, estimated at USD 117 billion annually by 2030 (90% CI: 78–173 billion) from the avoided oil imports and potential carbon revenues. These findings highlight a central paradox of the energy transition: while China delivers immense climate and energy security benefits, its dominance introduces unprecedented supply chain vulnerabilities and a highly asymmetric distribution of economic gains, necessitating urgent policy responses for diversification and resilience.