The U.S. auto industry once held a leading global position, but a recent report by the Information Technology and Innovation Foundation (ITIF) states that this advantage has significantly diminished. The report argues that the widening gap between the U.S. and China in electric vehicles and batteries is pushing industrial competition issues to broader manufacturing and safety dimensions.
Global market share continues to decline
The report shows that the United States' share of global automobile production has fallen from 46% in 1965 to 14.7% currently. In the domestic market, the combined share of the three major traditional automakers—Ford, Stellantis, and General Motors—has also decreased from 92% to 38%.
The competitive structure of the US market has also changed. In addition to emerging automakers like Tesla expanding in the electric vehicle sector, the scale of production and sales by overseas automakers in the US has continued to rise. Data from industry organization Autos Drive America shows that in 2024, international automakers produced 4.9 million vehicles in the US, higher than the 4.6 million vehicles produced by the Big Three automakers.
At the same time, the United States has become increasingly reliant on imported automobiles. The ITIF reports that from 1963 to 2023, the U.S. auto trade deficit accumulated to $3.3 trillion.
China expands its lead in the electric vehicle sector
The report identifies China as the biggest external pressure facing the U.S. auto industry, particularly in the areas of electric vehicles and batteries. The report states that while the U.S. was the first to promote electric vehicle technology, Chinese automakers have gained a significant advantage in recent years in terms of production volume, exports, and industrial investment.
Among them, BYD surpassed Tesla last year to become the world's highest-selling electric vehicle company. The report also mentioned that between 2021 and 2023, China's total subsidies for the electric vehicle industry reached US$120.9 billion, and it continues to invest in the research and development of next-generation batteries.
The report links the automotive industry to national security.
ITIF argues that automobile manufacturing is not only related to employment and exports, but also to broader industrial capabilities. Its authors state that the automotive industry connects workers, equipment, R&D systems, and educational resources—capabilities that simultaneously support advanced manufacturing and parts of defense production.
The report recalls that during World War II, General Motors was one of the largest contractors for the U.S. military, providing equipment such as trucks, tanks, aircraft, and artillery. The article also mentions that last month, Pentagon officials reportedly contacted executives from Ford and GM to discuss the companies' manufacturing capabilities in military supplies.
ITIF calls on the United States to increase public investment in high-tech innovation, with a focus on electric vehicle deployment, robotics and battery research and development, while continuing to restrict Chinese cars from entering the U.S. market and enhancing the competitiveness of U.S.-made cars in the global market.
