There’s a new trade war brewing – over global dominance in the electric car market
There’s a trade war brewing between China and the West, at stake is who will dominate the global market for electric vehicles.
Outside the port city of Ningbo, Chinese car company Zeekr is rolling out luxury EVs and growing fast. The factory has only been up and running for three years, but this year it’s more than doubling production.
Chinese car company Zeekr is rolling out luxury EVs at its factory near the port city of Ningbo. Pic: Lex Ramsay
Zeekr is a new player in the EV market, but it has unbridled ambition to sell its high-end, high-tech cars abroad. It’s a subsidiary of a state-backed company, Geely.
However, US and EU critics say the financial backing and vast resources of China’s government gives companies like Zeekr an unfair advantage.
In a recent trip to Beijing US treasury secretary Janet Yellen accused China of “overproduction” and “dumping” its EVs on overseas markets. The European Commission has started an investigation into whether to impose punitive tariffs on China’s industry.
But at Zeekr the threat of tariffs is being talked down. The company insists the global market is big enough for everyone.
Zeekr is a new player in the EV market. Pic: Lex Ramsay
Speaking to Sky News at a massive auto show on the outskirts of Beijing, Zeekr vice president Chen Yu explained that when foreign car companies first started setting up EV plants in China, local car companies watched on and learned fast.
“Definitely,” Mr Chen said. “We learned about the performance, the design, the culture, everything.”
Now companies like Zeekr, and BYD which is a giant in the Chinese EV manufacturing market, are taking on traditional car companies.
“I would not say (Chinese EVs) are dominating the market. I would say just they bring more diversity to the local customer, that is the nature of competition as you know,” Mr Chen said.
However, the possibility of Europe slapping tariffs on Chinese EVs is a concern for the Zeekr executive: “Definitely, if the tariff goes up, no doubt we are worried about the potential challenge.”
Mr Zhang, EV owner Pic: Lex Ramsay
On the floor of the auto show, car dealers and importers were clearly impressed with China’s EVs and warned legacy car manufacturers that they are in trouble.
New Zealand car dealer Matthew Foot has been attending the annual show for five years, and said: “It’s going to be very hard to beat China. They get incredible resources from the government; from lithium mines, to the ships and everything in between.
“Obviously you can see why Europe is fearing them and taxing them as well.”
This week US Secretary of State Antony Blinken is in China. Trade tensions are on the agenda, alongside the world’s geo-political crises.
The US already imposes a 27.5% tariff on Chinese cars. But in Europe it’s only 10% and that makes companies like VW, Volvo and BMW increasingly nervous.
In Beijing last week German Chancellor Olaf Scholz said: “It’s clear that we have to talk about questions of overcapacity, and that we have to talk about subsidy competition.”
BYD car at Beijing Auto Show Pic: Lex Ramsay
Germany is in a difficult position. As Europe’s largest car manufacturer, it fears that if the EU slaps tariffs on Chinese cars, China could retaliate by restricting access to its vast market.
But the fact is, more than half of all new electric cars sold worldwide are from China and it can make them cheaper and faster than its competitors.
At the end of last year China’s EV giant, BYD, sold more electric cars than Tesla. Tesla was back on top last quarter, but the competition is fierce.
The scale of production is staggering. BYD owns its mines, battery factories and eight ships.
Even a comparatively smaller company like Zeekr is the model of efficiency, with 2,700 workers churning out around 500 cars a day.
The focus on EVs is part of Chinese President Xi Jinping’s plan to overhaul the country’s debt-driven economy. He calls it “new production forces”. Investing in infrastructure is out, new technology is in.
In the industrial hub of Anhui Province, local officials are also brushing off the looming threat of tariffs. Provincial official Pan Feng said: “Some countries, thinking about their short-term self-interests, introduced some regulations, but I think they are only temporary.
“China is a big country, with a big market, it has huge power and confidence to counteract these conflicts.”
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Chinese buyers are also confident about their country’s electric cars, purchasing more than seven million of them domestically last year.
The country also has more charging stations than anywhere else on the planet.
While charging his BYD electric car in Zhejiang Province, Mr Zhang told us: “Chinese-made cars are good enough for us ordinary Chinese. If you’re thinking of buying an EV, there’s no need to go for a Mercedes or a German EV.”
World
Romania scrambles fighter jets after Russian drone ‘breaches airspace’ – as Zelenskyy warns of war ‘expansion’
Romania has said a drone breached its airspace during a Russian attack on neighbouring Ukraine.
Fighter jets were scrambled on Saturday, coming close to taking down the aircraft as it was flying very low before it left national airspace toward Ukraine, defence minister Ionut Mosteanu said.
Romania is the latest NATO member state to report an incursion, with Poland deploying aircraft and closing an airport in the eastern city of Lublin on Saturday, three days after it shot down Russian drones in its airspace.
They are the first known shots fired by a member of the Western alliance during Russia’s war in Ukraine.
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Russian drones enter Polish airspace: What we know
Meanwhile, military exercises are taking place over the Barents Sea, with Russia and Belarus conducting joint drills.
Russian MiG-31 fighter jets equipped with hypersonic ballistic missiles completed a four-hour flight over the neutral waters as part of ongoing “Zapad 2025” military exercises, the Interfax news agency reported on Saturday.
Romania has had Russian drone fragments fall on to its territory repeatedly since Russia began waging its full-scale invasion of Ukraine three years ago.
Two F-16 fighter jets were initially scrambled by Romania, and later two Eurofighters.
Citizens in the southeastern county of Tulcea near the Danube and its Ukrainian border were warned to take cover, the defence ministry said.
The ministry said the drone dropped off their radar 20km (12 miles) southwest of the village of Chilia Veche.
While helicopters were surveying the area looking for possible drone parts, Mr Mosteanu told private television station Antena 3 that “all information at this moment indicates the drone exited airspace to Ukraine”.
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Russia getting ‘ready for war with NATO’
Ukrainian President Volodymyr Zelenskyy said on social media that data showed the drone breached about 10km (six miles) into Romanian territory and operated in NATO airspace for around 50 minutes.
He said Belarusian airspace was also used for entry into Ukraine’s airspace.
Mr Zelenskyy described the reported incursion as “an obvious expansion of the war by Russia,” and called for “tariffs against Russian trade” and a “collective defence”.
He warned: “Do not wait for dozens of “shaheds” [Iranian-designed drones] and ballistic missiles before finally making decisions.”
NATO has said it plans to strengthen eastern flank defence, following earlier Polish airspace violations.
US secretary of state Marco Rubio called the Polish incursion “unacceptable and unfortunate and dangerous”, and said while it was unclear if the drones were intentionally sent to Poland, if it was the case, it would be “a highly escalatory move”.
Experts, including Sky News international affairs editor Dominic Waghorn have previously suggested the Kremlin is testing the West with gradual but steady escalation – a tactic known as “salami slicing”.
Donald Trump boarding Air Force One on Saturday. Pic: Reuters
On Saturday, Donald Trump said on his Truth Social platform that he was “ready to do major sanctions on Russia”, but only when all NATO nations “do the same thing” and “stop buying oil from Russia”.
Mr Trump has repeatedly threatened sanctions against Moscow, so far without any action.
The president also said NATO members should also put 50% to 100% tariffs on China – and only withdraw them if the conflict ends.
NATO member Turkey has been the third largest buyer of Russian oil since 2023, after China and India, according to the Centre for Research on Energy and Clean Air, with fellow members Hungary and Slovakia also buying energy supplies from Moscow.
The war in Ukraine would end if all NATO countries stopped buying oil from Russia, Donald Trump has said.
The US president, in a post on his Truth Social platform on Saturday, said the alliance’s commitment to winning the war “has been far less than 100%” and the purchase of Russian oil by some members is “shocking”.
Doing so “greatly weakens your negotiating position and bargaining power, over Russia,” he said.
NATO member Turkey has been the third largest buyer of Russian oil since 2023, after China and India, according to the Centre for Research on Energy and Clean Air, with fellow members Hungary and Slovakia also buying energy supplies from Moscow.
A NATO ban on the practice plus tariffs on China would “also be of great help in ENDING this deadly, but RIDICULOUS, WAR”, he added.
The president said NATO members should also put 50% to 100% tariffs on China – and only withdraw them if the conflict ends.
‘China’s grip’ on Russia
“China has a strong control, and even grip, over Russia,” Mr Trump posted, and powerful tariffs “will break that grip”.
The US president has already placed a 25% import tax on goods from India over its buying of Russian energy products.
Mr Trump said responsibility for the war fell on his predecessor Joe Biden and Ukrainian President Volodymyr Zelensky.
He did not include in that list Russian President Vladimir Putin, who launched the invasion.
President Donald Trump at a New York Yankees baseball game on Thursday. Pic: AP
Pic: AP
Village changes hands
On the battlefield on Saturday, Russian troops took control of the village of Novomykolaivka in Ukraine’s southeastern Dnipropetrovsk region, the Russian Defence Ministry said.
A drone attack hit an oil refinery in the city of Ufa, around 870 miles (1,400km) from the border with Ukraine, the local governor said, calling it a terrorist incident.
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Drones shot down in Poland
NATO Secretary-General Mark Rutte said on Friday the 32-nation alliance would place military equipment on the border with Belarus, Russia and Ukraine to deter potential Russian aggression.
Operation ‘Eastern Sentry’ followed Wednesday’s provocative incursion by multiple Russian drones into the airspace of Poland, another NATO member.
Polish forces shot down the drones, which Moscow said went astray because they were jammed.
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Prince Harry’s surprise visit to Ukraine
Prince Harry’s surprise visit
The Duke of Sussex made a surprise visit to Ukraine on Friday, promising to do “everything possible” to help the recovery of injured military staff.
Travelling on an overnight train to Kyiv, Prince Harry, who has since left the country, told The Guardian: “We cannot stop the war but what we can do is do everything we can to help the recovery process.
“We have to keep it [the war] in the forefront of people’s minds. I hope this trip will help to bring it home to people because it’s easy to become desensitised to what has been going on.”
A barrage of airstrikes has killed at least 32 people in Gaza City as Israel continued intensifying its offensive there, medical staff have said.
The dead include 12 children, according to the morgue in Shifa Hospital, where the bodies were brought.
Health officials said one of the strikes killed a family of 10, including a mother and her three children.
The Palestinian Football Association said a player for the Al-Helal Sporting Club, Mohammed Ramez Sultan, was killed with 14 members of his family.
Israel’s army did not immediately respond to questions about the strikes when contacted by the Associated Press news agency.
Israel has in recent days increased its strikes on Gaza City, having ordered residents to leave what it says is Hamas’s last stronghold.
Palestinians run for cover. Pic: AP
Hundreds of thousands of people are still in the city, struggling under conditions of famine, which was declared by the Integrated Food Security Phase Classification (IPC) three weeks ago. Israel previously denied there is a famine in Gaza.
Aid workers say the number of people leaving has spiked in recent weeks, but many families remain stuck due to difficulties with transportation and housing.
Others have been displaced many times and do not want to move again, not trusting that anywhere in the Strip is safe.
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Earlier this month: IDF drops evacuation flyers on Gaza before tower bombed
In a message shared on social media on Saturday, Israel’s army told the remaining Palestinians in Gaza City to “leave immediately” and move south into what it is calling a humanitarian zone.
Sites in southern Gaza, where Israel is telling people to go, are overcrowded, the United Nations has said.
A spokesperson for the Israeli army said more than 250,000 people have left Gaza City – but the UN puts the number at around 100,000 between mid-August and mid-September.
The UN and aid groups have warned that displacing hundreds of thousands of people will exacerbate the dire humanitarian crisis in the enclave.
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The Hamas-run Gaza health ministry said on Saturday that seven people, including children, died from malnutrition-related causes over the past 24 hours.
Israel has said it now controls 75% of Gaza, much of which has been reduced to fields of rubble. It has vowed to take the rest.
The current conflict followed Hamas’s attack on Israel on 7 October 2023, when militants killed 1,200 people and took around 250 people hostage.
Israel’s retaliatory offensive has killed at least 64,803 Palestinians, according to Gaza’s health authorities. It does not distinguish between civilians and combatants in its count.
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