In China, electric vehicles are now cheaper than gas cars. In the United States, the three large have not closed a bonus of $ 14,000 per vehicle

Dan Sperling, founding director of the UC Davis Transport Studies Institute, said Fortune He thought that the figure of $ 14,000 had been overestimated – but conceded that there was a strong and real gap.

This chasm reflects more than consumer preferences, said Sperling. In China, there has also been a “competition frenzy” to make low -cost electric vehicles, with the chiefs of different provinces trying to withdraw for first place. The labor and battery costs are also lower in China, thanks to its interior supply chains.

“People talk about subsidies, but at this point, the grant effect is quite minor,” he added.

The average price of an internal Chinese combustion engine is € 22,500 (around $ 26,205), while a battery electric vehicle costs 3% less, or € 21,900 ($ 25,509) on average, according to Jato. It is a big change compared to only five years ago, when electric gas vehicles cost 10% more.

The results are visible everywhere. The first Chinese car manufacturer BYD sold more than 4 million cars last year – 10 times what it sold in 2020 – and now dominates the roads around the world, from Bogotá to Budapest. In Europe, its compact dolphin model sells for less than € 20,000 ($ 23,200), about half the price of Tesla model 3.

The relentless rhythm of byd of new launches, the close control of its battery supply chain and the desire to sacrifice short -term profits are crushing inherited car manufacturers, said analysts previously told Fortune. Chinese business partners also argue that Beijing feeds overproduction that floods export markets with reduced rate electric vehicles.

Meanwhile, Sperling warned that the United States was too caught by playing prices to develop its own VE industry. His words echoed the old adage that the best defense is offensive. Prices of more than 100% have kept Chinese cars out of the American market, protection that can buy time, but may also make car manufacturers.

“There is a long history showing that absolute protectionism undermines an industry rather than supporting it,” he said.

Without the pressure of direct competition, the three major in the automotive industry – GM, Ford and Stellantis – are less incentive to innovate with electric vehicles, said Sperling.

However, the United States has also improved EV affordability compared to gas cars in the past five years, according to Jato data. In 2019, gas cars was 44% cheaper than electric cars and, in 2024, the gap narrowed at 31%.

But while progress is underway, Sperling said that the United States lacked the type of structural policies – tax credits, purchasing mandates, subsidies in general – which encourage car manufacturers to build large -scale electric vehicles.

The struggles of the three large

Admittedly, car manufacturers are trying large EV thrusts, even when losses linked to electric vehicles accumulate.

Ford announced this month a new $ 5 billion electric vehicle initiative, where the automaker will reconfigure its Kentucky factory to build an electric pick-up of $ 30,000 by 2027, an ambitious attempt to build large-scale electric vehicles.

Analysts say that it could either mark a historical reinvention, or flow more billions in a division already losing in currency: the Ford EV arm has accumulated more than $ 12 billion in losses since the beginning of 2023.

GM also announced in June that it invests $ 4 billion in interior manufacturing, including its EV wing. During the last quarter of 2024, the GM electrical portfolio became “a profit of positive value”, which means that for each sale of electric vehicles, GM covers the manufacturing costs of each car (but not the fixed costs involved, such as labor or EV factories).

GM has the second most robust EV portfolio on the American market, sitting behind Tesla in terms of total sales. However, James Picallo, main analyst of automotive research at BNP Paribas Exane, previously said Fortune That he estimated that GM lost some 2.5 billion dollars out of the 189,000 electric vehicles he built and sold to dealers last year.

Earlier this year, GM said during a profits that he hoped to bring about $ 2 billion in savings improvement for its electric vehicles.

Stellantis also tripped in its EV transition, displaying a net loss of 2.3 billion euros in the first half of 2025 while the operating margins decreased to only 0.7%. The automaker has struggled to trigger American demand, reducing prices on electric models such as Jeep Wagoneer to move the inventory.

At the same time, the prices and low demand prompted Stellantis to extend the content on its Termoli site in Italy. However, the company is still in advance: it has unveiled the STLA framework platform, a flexible architecture supporting gas, hybrid, electric vehicle and hydrogen transmissions. In addition, Stellantis has teamed up with Chinese Leapmotor in the hope of staying in the game, investing 1.5 billion euros for a 21% stake in the company. Stellantis hopes that its outgoing advantage and its respected brand can combine with the innovation of Leapmotor to provide a more affordable EV.

Industrial policy failures

For industry experts, part of the price difference is clearly attributable to American failure to promote electric vehicles with policies. President Donald Trump switched on his opinion on electric vehicles, but his large and magnificent Bill Act ended the tax credits for new, used and rented electric vehicles.

Meanwhile, the decades of forced joint ventures of China – forcing car manufacturers to associate with national car manufacturers in EV Manufacturing – have commonly built EV technology and software, said Sterling. For America, he suggested a version of this approach: “Encouraging joint venture investments” to accelerate the skill necessary to make up for it, like that that Stellantis does with China.

“You create a whole group of technicians and engineers and workers who are capable of technology,” said Sterling. “Detroit seriously lacks that.”

He rejected the idea that Detroit is condemned, but stressed that it depends entirely on politics. In its opinion, American -inherited automakers are currently taking place on SUVs and microphones, without making investments in electric vehicles or software that Chinese rivals have already controlled.

“If the United States continues to keep the Chinese and discourage electric vehicles, it will take decades to catch up,” said Sterling. “But if politicians change, yes, it can make up for sure.”