The US automotive industry needs a national strategy to answer the competitive challenge from China, according to a new report from the Information Technology and Innovation Foundation (ITIF). The Washington-based think tank argues that piecemeal, company-by-company responses will not be enough to hold off Chinese automakers and their suppliers as they push into global markets.

The report lands at a moment when the question is no longer theoretical for US plants and the supplier base behind them. Chinese vehicle exports have grown rapidly over the past several years, and Chinese manufacturers are building assembly capacity outside their home market — in Southeast Asia, Latin America and Europe — while their battery and components suppliers follow them abroad. ITIF's core argument is that the United States has no comparable, government-backed industrial answer for the auto sector, and that the absence of one puts domestic production capacity and manufacturing jobs at risk over the next decade.

That framing matters for plant-level planning. Suppliers in tiers two and three — stampers, electronics module makers, drivetrain component producers — are the first to feel volume shifts when OEM sourcing moves toward lower-cost Chinese supply chains. ITIF contends that without a coordinated national approach, individual suppliers will keep making rational but collectively weakening decisions: relocating capacity offshore, accepting Chinese contracts, or exiting segments entirely.

The report positions the auto sector alongside semiconductors as a foundational industry where the United States cannot rely on market forces alone. ITIF has long advocated industrial policy instruments — R&D support, tax incentives, trade measures and procurement standards — as tools Washington should deploy deliberately rather than episodically. In the auto context, the report argues these instruments should add up to a strategy with explicit goals for domestic production share, technology leadership in electrified and software-defined vehicles, and supplier-base resilience.

A national strategy, in ITIF's telling, is distinct from the current mix of policies. The United States already deploys tariffs on Chinese vehicle imports, Inflation Reduction Act sourcing rules tied to domestic battery production, and loan and grant programs for plants. ITIF's argument is that these operate as separate levers rather than as a coherent whole, and that adversaries — above all China, which ITIF treats as deploying a full-scope, state-directed industrial strategy — plan at the national level while US firms and agencies plan at the program level. The mismatch, the report says, is structural.

For manufacturers, the practical stakes are concrete. If Chinese automakers consolidate global share at the pace ITIF warns about, the effects would show up first in export-dependent US plants and in segments where Chinese cost advantages are largest: entry-level electric vehicles, batteries, and standard commodity components. Tier-one suppliers with global footprints can hedge by localizing inside China and inside third markets; smaller domestic suppliers cannot. That asymmetry, ITIF suggests, is exactly why the response has to be national rather than corporate.

The report is an argument, not legislation. It does not by itself shift a single unit of production, and its recommendations would require Congress and the executive branch to act — on trade policy, on R&D funding, and on how federal support for vehicle and battery plants gets structured. ITIF has a track record of framing debates of this kind; its reports on Chinese industrial policy have circulated widely in US policy discussions over the past decade, and this one is aimed squarely at moving auto manufacturing onto that same agenda.

Manufacturing executives reading the report will find little comfort and some direction. The claim to test against production data is whether Chinese expansion actually erodes North American output and supplier volume, or whether tariffs and local-content rules contain it. Watch three things next: whether the current administration converts any of ITIF's framing into formal policy proposals, whether Congress takes up auto-sector provisions in any industrial legislation, and whether Chinese automakers announce their first assembly plants in Mexico or elsewhere in the Americas — the capacity milestone that would turn this debate from strategic paper into a plant-siting fight.