The global automotive industry’s transformation from internal combustion engine vehicles (ICEVs) to electric vehicles (EVs) represents a fundamental reordering of global value chains, industrial capabilities, and strategic influence. Technologies core to EVs (batteries and their components, motors and magnets, semiconductors, software) have broad applications in other industries, including energy production and defense.
China has emerged as the undisputed leader in EVs and their key components—batteries, semiconductors, software, and rare earth minerals. Its success stems from sustained industrial policy, investment, and national vertical integration across the EV technology stack.
In contrast, the United States has remained tied to legacy ICEV technology. Once the global leader of automotive innovation in a petroleum era, the U.S. risks being left behind in the energy transition. Leadership in EV technology has broad implications for our national security, energy independence, and economic competitiveness. It is not simply an environmental goal.
This report calls for an urgent, coordinated dialogue generating a series of actions to develop an industrial strategy to rebuild US competitiveness and avoid becoming stranded on a shrinking ICE island. We must develop global-class capabilities to innovate and produce the key components of the EV technology stack, and ensure they are Competitive, Resilient, Sustainable, and Secure (CRSS). Coming from a trailing position, we must establish a forward-looking agenda that invests in American innovation, establishes alliances with trusted partners, and carefully manages relations with foreign producers, particularly China.
