Intellectual Property Theft Enables China to Dominate EV Industry: Former US Intelligence Official

An electric concept car from Chinese vehicle manufacturer BYD displayed at an auto show in Beijing on April 26, 2018. Wang Zhao/AFP via Getty Images

Intellectual property theft allows China to dominate the world of electric vehicles (EVs), according to former senior intelligence official and author Nicholas Eftimiades.

From 2021 to 2022, the number of EVs sold annually in China grew to 6.8 million from 1.3 million, making 2022 the eighth consecutive year in which China was the world’s largest EV market. The United States sold about 800,000 EVs in 2022, according to a report by MIT Technology Review.

“As a result of generous government subsidies, tax breaks, procurement contracts, and other policy incentives, a slew of homegrown EV brands have emerged and continued to optimize new technologies so they can meet the real-life needs of Chinese consumers,” the report reads.

“They’ve [China] given a lot of incentives for not only companies but universities to invest in this area, battery technology, etc. And they’ve done a lot of intellectual property theft,” Eftimiades told “China in Focus” on NTD, a sister media outlet of The Epoch Times.

As the author of the book “Chinese Intelligence Operations,” he pointed to the database he maintains on Chinese espionage cases reported worldwide.

“Out of 724 cases of Chinese espionage, we find about 500 are directed toward main technologies, [including] aerospace technologies, IT technologies, clean energy technologies, and automotive, electric vehicle technology,” Eftimiades said.

To accommodate China’s mass market of 1.4 billion people, he said that “they understand that stealing technologies and doing it themselves allows their domestic economy to thrive and allows them to build a very, very strong domestic economy.”

“So they’re keenly aggressively stealing select technologies,” Eftimiades said.

Unlike traditional espionage, the Chinese regime has adopted a “whole-of-society” approach to acquiring foreign intellectual property, and “they’re turning their collection capabilities against industry.”

Meanwhile, the United States faces difficulties in defending itself against these challenges as “our security apparatus is all geared to protecting the government,” according to Eftimiades.

“So we’re really not geared towards protecting private industry, which is where these old technologies, advanced technologies lie,” he said.

“So most often, they’re [private sector] pretty well left to fend for themselves. It’s created an entirely new industry in the United States of insider threat and security. But still, many of them are no match for the Chinese government.”

Millions of jobs have been lost just in the United States “as a result of their espionage efforts,” Eftimiades said, as it “translates to manufacturing capabilities.”

Influence Operations

The Chinese regime’s espionage campaign allowed it to conduct influence operations through coercion and corruption, according to Eftimiades.

“China does it through holding or releasing funding under the table for academics so that they’re quiet on certain issues relative to China,” the expert said.

He described the approach as “frightening to any nation-state because it means you’re losing control of your country, your vote is meaningless or will be meaningless because China is actually controlling a lot of the policy issues that your country is compelled to deal with.”

To counter intellectual property theft from China, Eftimiades said the United States should empower the private sector by putting more resources into helping them to secure themselves.

Washington has to warn Beijing of the consequences if it’s caught violating the law, he said.

“We might take economic action against China, maybe take some of their state-owned enterprises off the stock exchange or something like that,” Eftimiades said.

“China has to understand that there’s a cost for their illegal behavior.”