Great Lakes Wire

Michael Dunne, CEO of Dunne Insights, said that China's dominance in battery manufacturing has resulted in a global supply glut, complicating market entry for startups. The statement was made on X.

"Imagine you're a battery startup in America or Europe," said Dunne. "You've got financing, a smart team, know-how and ambition. Then, whoah, you step into an industry where capacity is running 3x demand. China drives global EV battery supply to over 3 times demand."

According to the International Energy Agency (IEA), China accounts for 85% of global electric vehicle (EV) battery cell manufacturing capacity, with Chinese producers owning over 75% of that base. This dominance allows Beijing to dictate supply and pricing, forcing automakers worldwide into dependency. Critics argue that building an energy system around EVs and their batteries effectively transfers strategic leverage to China, undermining energy security in the United States and Europe.

President Trump's One Big Beautiful Bill Act (OBBBA), signed on July 4, 2025, eliminates the $7,500 federal tax credit for new EVs and the $4,000 credit for used EVs beginning September 30, 2025. Road & Track reports that these subsidies have cost taxpayers billions of dollars while disproportionately benefiting higher-income households purchasing expensive vehicles. By ending these incentives, the law forces the EV industry to face market realities without government support, exposing both the affordability problem for consumers and the fragility of the sector’s growth model.

Contemporary Amperex Technology Co. Ltd. (CATL), identified as the world’s largest battery maker by South China Morning Post, had 676 gigawatt-hours (GWh) of installed production capacity in 2023, with an additional 219 GWh under construction. Industry analysts argue that CATL’s scale far exceeds real demand, flooding the market with cheap batteries and distorting global competition. This scenario illustrates how industrial overbuild, encouraged by government subsidies and mandates, creates unstable markets while leaving Western startups little chance of survival.

Dunne is the founder and CEO of Dunne Insights, a San Diego-based advisory firm launched in 2018 that delivers intelligence on the automotive and mobility sectors. He is known for analyzing China’s automotive rise and frequently cautions against overreliance on Chinese supply chains in EVs. Through his writings and podcast "Driving with Dunne," he emphasizes what he sees as risks associated with rapid EV adoption without sustainable, diversified supply systems.