At this year’s European Automotive Dealer Day, one of the major fairs in Europe, the majority of exhibitors were Chinese. The European industry, once a player at the global level, could only trail their Chinese and American competitors. The numbers corroborate this impression. In 2025, 19% of EVs sold in Europe were built in China; in 2026 that figure has already climbed to 22%. Analysis shows Chinese passenger-car market share already above 10% in Norway, the UK and Italy, with battery electric vehicles accounting for roughly 14% of the European BEV market — and projections of 15–25% within four to five years.
What we are witnessing is not an industrial accident but the visible upper layer of an organic, decades-long project. Lacking domestic hydrocarbons, Beijing made a different bet: produce electricity at industrial scale from renewables — solar, wind, hydro, nuclear fission and, prospectively, fusion — and turn the kilowatt into the strategic unit of account. The bet has paid off spectacularly. In the first half of 2025, China accounted for 67% of global solar installations, with wind and solar on track to make up half of installed generating capacity by the end of 2026. In 2025 alone the National Energy Administration installed 543 gigawatts of new generation, roughly twice Germany’s entire power system. China has, in short, become the world’s first electro-state — a polity whose comparative advantage runs not through pipelines but through copper and silicon.
Step two of the doctrine is export. The Belt and Road Initiative, paired with its less-discussed sibling the Digital Silk Road, has carried Chinese grid hardware, ultra-high-voltage transmission, batteries and EV charging infrastructure to client states across Asia, Africa and Latin America — what analysts now term Electro-State as a Service. The model is elegantly self-reinforcing: Chinese capital builds the grid, Chinese turbines and panels feed it, Chinese vehicles drive on it, and Chinese standards govern it.
Step three is the connective tissue: a currency, necessarily digital, to settle the trade that the first two steps generate. Enter the e-CNY, running on the Cross-border Interbank Payment System (CIPS), which now has about 1,700 participants in 190 countries, with daily transaction volume exceeding 1.22 trillion renminbi — roughly $179.7 billion — and approximately 53% of China’s cross-border receipts and payments now denominated in renminbi, against 10% in 2017. CIPS settles in 300 milliseconds against SWIFT’s 48 hours, with average transaction fees of 0.01%; e-CNY cross-border transfers complete in as little as ten seconds. Project mBridge extends the architecture to the Gulf and Southeast Asia. The full stack is now operational: cars, grid, batteries, payments. All interoperable, all Chinese.
The American response is a different stack assembled from different parts: Tesla and Detroit’s surviving EV champions for the vehicles, dollar-denominated stablecoins (turbocharged by the GENIUS Act) for the rails, and a doubled-down bet on hydrocarbons — hence the recent escalations in Iran and Venezuela, which are best read as energy-corridor politics dressed in security clothing. It is coherent, if anachronistic.
Europe’s predicament is harder. It has neither the auto champions, nor the grid sovereignty, nor, critically, the currency. The ECB will be ready for a potential first issuance of the digital euro only during 2029, assuming co-legislators deliver the regulation this year;. That is three years of asymmetry against rivals already in deployment. In a contest fought between integrated stacks, owning one or two layers is not a strategy, it is a vulnerability. Thus Europe must decide, and quickly, whether it intends to be a producer in this new order, or merely its most lucrative market.
