China is extending its dominance of electric vehicles from passenger cars to heavy trucks as President Trump’s Big Beautiful Bill eliminates federal subsidies at a time when European support for the industry remains weaker than it once was.
Production and consumption of gasoline and diesel are declining in China, reducing demand for imported oil and resulting in less road noise, cleaner air and better health for urban residents.
In addition to the environmental benefits, the US and Europe are missing out on another clean-energy market opportunity. Economic research organization Mordor Intelligence expects the global electric truck market to more than double in size to $89 billion in 2025 and grow at a CAGR of 26% to $227 billion by 2029.
The medium-duty commercial truck segment is projected to grow most rapidly (39% CAGR over the same period), but the heavy-duty segment is the largest, having accounted for 87% of the market in 2024.
Zero-emission targets are the main demand driver, but a well-developed charging infrastructure is essential. Improvements in battery performance (longer range), the expansion of battery manufacturing capacity and the development of new and more efficient vehicles equipped with driver assistance systems facilitate and enhance the growth. China has it all.
According to the International Energy Agency (IEA), global sales of bettery-powered electric trucks increased by nearly 80% in 2024, led by a 2X increase in China, which accounted for more than 80% of the total.
Starting from a very low base and propelled by government incentives, the number of electric trucks sold in China rose to about 75,000 vehicles. Sales in Europe and the US, the second and third largest markets, were roughly flat.
The total cost of ownership of a heavy-duty electric truck used in long-haul transport, in the estimation of the IEA, has already reached parity with diesel trucks in China, with savings on fuel offsetting shigher price for electric trucks. In Europe and the US, the IEA expects parity to be reached by 2030. The operating cost of electric trucks can be lowered by charging batteries during the rest periods required for commercial drivers.
Chinese Truck Review reports that sales in China of new energy vehicle (NEV) heavy-duty trucks, including hybrids and hydrogen fuel-cell-powered vehicles, amounted to 82,773 vehicles last year. That works out to a market penetration rate of 13%, compared with about 2% in Europe and 1% in the US.
The world’s top makers of electric trucks include
BYD, Dongfeng Motor, SANY Heavy Industry XCMG and Sinotruk in China;
AB Volvo (Volvo Trucks) and Daimler Truck in Europe; and
Paccar and Tesla in the US.
AB Volvo is separate from Volvo Cars, which is 78.6%-owned by Chinese automaker Geely. Geely is AB Volvo’s largest shareholder, but has only 15.7% of the voting rights.
Europe and the US, therefore, have the ability to build up their electric truck industries over time.
Like China, the EU is promoting their introduction with zero emission targets, market incentives and the build-out of battery charging infrastructure. But its electricity grid is not yet ready to handle the power requirements.
According to Chief Commercial Vehicles Officer Thomas Fabian of the European Automobile Manufacturers’ Association (ACEA): “A fit-for-purpose charging network for heavy-duty vehicles is essential to decarbonize road transport. But without a future-ready grid, this transition simply will not happen.”
As an ACEA position paper on the matter explains that, by 2030, “for operators of charging infrastructure, there is a need for further political measures.” It lists these:
reduced bureaucracy,
acceleration, standardization, digitalization of grid connections and building permits,
transparent and non-discriminatory access to public sites, and
support for a strong ramp-up of zero-emission vehicles.
In the US, on the other hand, the Trump administration is tearing down the regulatory supports for zero-emission vehicles, including electric trucks. On June 12, the president signed Congressional Review Act resolutions revoking California’s Clean Air Act waivers, which allow the state to set its own strict vehicle emission standards, including those for heavy trucks, and would have phased out sales of new gasoline-powered cars by 2035.
The statement from the White House reads: “These bipartisan measures prevent California’s attempt to impose a nationwide electric vehicle mandate and to regulate national fuel economy by regulating carbon emissions.”
That comment reflects the size of California’s economy, which gives it great influence over the decisions of automakers. It also influences the policies of other states, more than a dozen of which follow California’s emissions standards.
Trump himself stated that “We officially rescue the US auto industry from destruction by terminating the California electric vehicle mandate once and for all.”
But California Governor Gavin Newsom and Attorney General Rob Bonta immediately filed a lawsuit challenging the resolutions signed by Trump with a statement reading:
Last month, the Republican-controlled House and Senate illegally used the Congressional Review Act (CRA) to attempt to revoke California’s Clean Air Act waivers, which authorize California’s clean cars and trucks program. This defies decades of precedent of these waivers not being subject to the CRA, and contradicts the non-partisan Government Accountability Office and Senate parliamentarian, who both ruled that the CRA’s short-circuited process does not apply to the waivers.
Governor Newsom was quoted as saying, “Trump’s all-out assault on California continues – and this time he’s destroying our clean air and America’s global competitiveness in the process. We are suing to stop this latest illegal action by a President who is a wholly-owned subsidiary of big polluters.”
The statement then pointed out that “The state’s efforts to clean its air ramped up under then-Governor Ronald Reagan when he established the California Air Resources Board. California’s Clean Air Act waivers date back to the Nixon Administration – allowing the state to set standards necessary for cleaning up some of the worst air pollution in the country.”
Those standards were approved by conservative politicians and they are meant to be business friendly. The statement continuesd:
Since the Clean Air Act was adopted in 1970, the U.S. EPA [Environmental Protection Agency] has granted California more than 100 waivers for its clean air and climate efforts. California has consistently demonstrated that its standards are feasible, and that manufacturers have enough lead time to develop the technology to meet them. It has done so for every waiver it has submitted.
Waivers do not expire, and there is no process for revoking a waiver. This is important because governments and industry rely on market certainty that waivers provide for years after they are granted to deliver clean vehicles and develop clean air plans.
California’s clean air regulations are also intended to protect and improve public health, something the White House did not mention but the California statement did:
Air pollution is a silent killer that causes heart and lung diseases, and cancer. Over the last 50 years, the state’s clean air efforts have saved $250 billion in health costs through reduced illness including reducing diesel-related cancer risk nearly 80%.
If upheld, President Trump’s illegal rollback of these regulations would cost Californian taxpayers an estimated $45 billion in health care costs.
Finally, the statement noted, eliminating California’s emission control and electric vehicle promotion policies would amount to “Giving the keys to China” – the keys to the global market for electric vehicles outside the US.
Follow this writer on X: @ScottFo83517667
