Chinese tech holds 70% battery share as Apple, Ford deepen ties

Chinese automakers captured 63 percent of global EV sales in 2025, battery makers held 70 percent, as Apple, Ford, and Volkswagen deepen reliance on Chinese tech despite US export controls.

"Five years ago, China was primarily where global companies went to sell. Today, in certain sectors, it is where they go to source capability," Kitty Fok, managing director at IDC China, told CNBC.

Apple has adopted AI from Alibaba and Baidu for its China operations, while Ford is using CATL's lithium-iron phosphate battery technology at a $3.5 billion plant in Michigan. Volkswagen is developing smart EVs with Xpeng, and Stellantis is expanding EV production and joint purchasing with Leapmotor. CATL alone controls roughly 37 percent of the global EV battery market.

The structural shift carries investment implications across both US and Chinese equities. Chinese tech names including Alibaba, Baidu, CATL, BYD, and Xpeng gain revenue visibility from deepening Western partnerships, while Apple and Ford face supply-chain concentration risk that Washington policymakers continue to scrutinize.

From market to technology source

China has built formidable positions across a growing number of technology industries. Automakers including BYD, Changan, and Chery accounted for nearly 63 percent of the global EV market in 2025, while battery makers including CATL, BYD, CALB, and Gotion held close to 70 percent, according to Soumen Mandal, principal analyst at Counterpoint Research.

Mandal pointed to cost, scale, manufacturing depth, supply-chain integration, and speed of innovation as powerful reasons for global companies to continue engaging with Chinese firms. "China's technological rise is shifting from low-cost manufacturing to scale, supply-chain depth, and speed of innovation," he said, adding that global companies are balancing geopolitical risk against commercial realities.

That shift is particularly advanced in EV batteries. Fok said the integration of Chinese EV battery technology into global supply chains can be difficult to unwind. "In EV batteries, the structural shift is already complete. Switching suppliers is not a procurement decision you make in a quarter. It takes years of engineering, testing, and recertification."

AI emerges as the next frontier

The trend is also beginning to play out in artificial intelligence, where increasingly capable Chinese models are challenging the assumption that companies turn to Chinese technology mainly because it is cheaper. An IDC survey of European companies earlier this year found security and compliance requirements and superior performance — not costs — were the top two reasons for extensive adoption of Chinese AI models.

"So the popular narrative that Western companies are rushing to Chinese AI because it's cheap gets this backwards," Fok said. "The decision is performance-led and compliance-gated."

Unlike US-based Anthropic and OpenAI, Chinese firms including Alibaba and DeepSeek have focused on open-source models, making them more accessible to developers globally. DeepSeek's latest models reportedly achieve comparable performance to GPT-4 class systems while requiring significantly less training compute.

Lian Jye Su, chief analyst at Omdia, said US restrictions have accelerated Chinese domestic innovation and efficiency. Chinese vendors remain competitive in AI, batteries, and automotive software, he added.

Geopolitical considerations continue to shape how and where Chinese technology is adopted. Su expects resistance to be strongest in advanced semiconductors, cybersecurity, defense, and national security-related services. Counterpoint's Mandal expects Chinese technology adoption to expand globally across EVs, batteries, consumer electronics, robotics, drones, and selected areas of AI and semiconductors, leading to what he described as a more fragmented but pragmatic global technology market.

For investors, the divergence between policy and procurement creates a complex trade. Chinese AI and EV names — Alibaba, Baidu, CATL, BYD, Xpeng, Leapmotor — benefit from structural demand tailwinds as Western partners integrate their technology. US-listed Apple and Ford gain cost and innovation advantages but carry geopolitical exposure that could trigger regulatory friction. The market has yet to fully price in this interdependence, leaving room for repricing as partnerships deepen or sanctions expand.

This article is for informational purposes only and does not constitute investment advice.