President Donald Trump’s newly approved transportation and energy “megabill” will halt U.S. federal subsidies for electric vehicles on 30 September 2025 and tilt incentives toward gasoline-powered models. The head of a leading Chinese auto industry group said the measure effectively hands a competitive edge to China’s fast-growing electric-vehicle manufacturers at the very moment they are stepping up exports. Shipments of battery-electric and plug-in hybrid cars from China jumped 48 percent in the first half of 2025, according to industry figures cited by the association. Companies such as BYD have already announced new assembly plants in Europe, and analysts warn the U.S. policy shift could further accelerate their overseas push while undercutting American automakers’ efforts to scale up domestic EV production. Inside China, regulators have begun to voice concern about an escalating price war, describing the fierce discounting among carmakers as “involution-style competition” that risks eroding profit margins and fueling deflationary pressure. The dual developments underscore the divergence in industrial policy: Beijing grapples with oversupply at home even as Washington withdraws support for a sector many see as strategic.