UNITED STATES – You have probably heard of BYD. A middling player in the auto industry just a few years ago, the Chinese electric vehicle (EV) manufacturer surpassed American company Tesla in 2024 to become the world’s top-selling EV brand and is expected to pull even with the world’s biggest carmakers, Toyota and Volkswagen, by 2030.

Yet, most Americans have never seen a BYD, and probably will not any time soon.

BYD, which stands for “Build Your Dreams”, is essentially banned from American roads by tariffs imposed to protect American automakers that double the price of imported Chinese plug-ins. Erecting tariff walls may buy the domestic auto industry some time, but it ultimately will not insulate American manufacturers from BYD or the bigger threat that it represents.

The company embodies a Chinese industrial model that is leaving the United States in the dust. This model, which combines government financial support, methodical long-term planning and aggressive innovation, has already enabled China to achieve global dominance in a range of high-tech industries – from batteries to robotics to drones.

Losing those markets to Chinese companies was bad enough. If the same happens in auto manufacturing, the impact would be far worse for the US due to the industry’s size and its economic, political and strategic importance.

The success of BYD and several other upstart Chinese car brands should be a warning for US auto manufacturing and the industrial sector as a whole.

The US needs the courage to recognise how badly it is falling behind, shake off complacency and adopt an urgent government-led effort – think of a “Manhattan Project”, but for cars – to restore US competitiveness.

When I opened my automotive business in Beijing in 1992, cars produced by China’s then-fledgling auto industry were terrible. Shoddily designed and made from cheap materials, they were quick to break down, befitting the country’s reputation at the time as a factory for inferior knock-offs.

BYD, a ba...