Artificial Intelligence and the Rise of the Chinese EV Industry

Abstract

This paper examines how artificial intelligence (AI) has enabled China's rapid emergence as the dominant force in global electric vehicle (EV) production. While Western analyses often emphasize demand-side subsidies, this study demonstrates that China's competitive advantage stems primarily from systematic AI integration throughout the entire EV value chain—from initial design and battery development through manufacturing optimization and supply chain management. AI technologies enable Chinese EV manufacturers to accelerate product development cycles, reduce production costs, enhance vehicle performance, and respond dynamically to market demands. The analysis reveals how AI-powered tools facilitate advanced capabilities including generative design, digital twin prototyping, intelligent battery management systems, autonomous driving features, and predictive supply chain optimization. Furthermore, this paper highlights complementary government policies that have been instrumental to industry success, particularly strategic investments in enabling infrastructure such as ultra-high voltage power grids and nationwide 5G networks. This study argues that China's leadership position results not merely from subsidization but from a comprehensive innovation ecosystem where AI serves as the foundational technology driving competitive advantage across design efficiency, manufacturing excellence, and operational intelligence throughout the EV industry.