The Global EV Shift: The Role of China and Industrial Policy in Emerging Economies

This report analyzes the rise of electric vehicles (EVs) in emerging markets and its implications for the global automotive industry. Passenger vehicle sales in these markets are relatively small, but in aggregate, emerging markets are expected to be a source of growth for the industry in the future. Chinese exports and investment have been the leading driver of growth in sales in several markets, complicating the geopolitical implications of the EV shift. Several governments are also seeking to promote EVs for economic reasons: EV adoption can help reduce oil imports and stabilize foreign currency reserves or bolster emerging domestic industries, such as charging infrastructure and digital platform providers. 

Emerging and developing markets are often overlooked in discussions concerning technological diffusion and industrial strategies, but they offer powerful lessons on how industrial policy can either work or fail, the role of Chinese investment, and important implications for the future of the automotive sector. The case studies covered in this report—which focus especially on developments in Costa Rica, Brazil, Indonesia, India, Mexico, and South Africa—offer insights for policymakers as they grapple with industrial transformation, technological transition in the mobility sector, creating new opportunities for their countries, and their relationship with China. 

This report is made possible by the generous support of the Drive Electric Campaign.