At the World Economic Forum in Davos last month, US President Donald Trump said that while China sells wind turbines to "silly people who buy them," it does not use wind energy itself. This statement, however, is not merely inaccurate; it is spectacularly detached from the reality of what has become the most consequential industrial transformation of the twenty-first century.

The Scale of China's Renewable Surge

China has not merely increased its wind and solar power to record levels in 2025, it has done so at a pace and scale that defies historical precedent in the energy sector. According to official data from China's National Energy Administration (NEA), the country added 434 gigawatts of new wind and solar capacity in 2025 alone, a 22% increase over the previous year's already record-breaking figures. To place that in perspective, this single year of additions represents roughly twice Germany's entire power generation capacity from all sources. In a vivid illustration of the installation speed, Lauri Myllyvirta, lead analyst at the Centre for Research on Energy and Clean Air (CREA), calculated that the 2025 additions were equivalent to approximately 17,000 wind turbines and 500 million solar panels, or, as he put it, two wind turbines installed per hour and a solar panel surface area of 20 football fields per hour, around the clock, for the entire year.

These additions pushed China's cumulative grid-connected wind and solar capacity to 1.84 billion kilowatts (1,840 GW) by the end of 2025, accounting for 47.3% of the country's total installed power capacity. In a landmark moment, this meant that wind and solar surpassed thermal power for the first time in Chinese history. The gap is no longer marginal: by the close of 2025, wind and solar capacity exceeded thermal power by approximately 300 GW. The crossover first occurred in Q1 2025, when combined wind and solar reached 1,482 GW against thermal's 1,451 GW, and it has widened continuously since.

China's solar capacity alone reached 1,200 GW by the end of 2025, a 35.4% year-on-year increase, while wind power grew by 22.9% to 640 GW. China's annual renewable additions have accelerated at a breathtaking rate, from 120 GW in 2022 to 290 GW in 2023, 360 GW in 2024, and now 434 GW in 2025. The trajectory of acceleration itself is accelerating.

Globally, China's wind and solar operating capacity now accounts for 44% of the world's total, exceeding the combined capacity of the European Union, the United States, and India. As reported by the American NGO Global Energy Monitor, China has surpassed a historic milestone and can now produce three times more energy from renewables than its closest competitors. China also provides the lion's share of the global clean technology needed for the energy transition, manufacturing over 80% of solar panels, 60% of wind turbines, and 75% of electric vehicles and batteries. Over the past decade, China's manufacturing scale has helped reduce the average cost per kilowatt-hour of global wind power projects by 60% and photovoltaic power generation projects by 80%.

"Economically and industrially, the US has fallen behind and will fall further behind as a result of the current administration's hostile approach to moving away from coal," Li Suo, director of the China Climate Hub at the US-based Asia Society Policy Institute, told DW. By "recklessly withdrawing from many international forums related to climate and energy," the US is abandoning its political influence, the expert added.

"It has distanced itself from the science that the whole world accepts," David Hart, senior researcher on climate and energy at the US think tank, The Council on Foreign Relations, told DW. "It's a foolish decision that will hurt the US in the long run."

The Emissions Inflection Point

Perhaps the most consequential development of 2025 is the growing evidence that China may have reached, or is on the verge of reaching, peak carbon dioxide emissions. According to a detailed analysis by CREA for Carbon Brief published in February 2026, China's CO₂ emissions likely declined by approximately 0.3% in 2025, extending a flat-or-falling trend that has now persisted for nearly two years, dating back to early 2024. Crucially, this is the first time that the decline has been driven not by an economic downturn, as in 2009, 2012, and 2022, but by the structural growth of clean energy generation.

The data is striking: solar power output increased by 43% year-on-year in 2025, wind by 14%, and nuclear by 8%. Together, these clean sources contributed roughly 530 TWh of new power generation, more than enough to cover the 520 TWh growth in electricity demand. In April 2025, wind and solar together generated 26% of China's electricity, a new monthly record, up from 23.7% just the month before. For the full year, solar and wind accounted for 22% of total electricity output.

Energy storage capacity grew by a record 75 GW in 2025, outpacing the 55 GW rise in peak electricity demand, another potential inflection point suggesting that the grid infrastructure is beginning to accommodate the variability of renewables at a pace that reduces rather than merely supplements the need for fossil backup.

The Climate Action Tracker now projects that 2025 could mark the peak of China's CO2 emissions if the current clean energy momentum continues. China has already exceeded its 2030 Nationally Determined Contribution target of installing 1,200 GW of wind and solar, nearly six years ahead of schedule. The country's new 2035 NDC marks a shift from intensity-based targets to, for the first time, an absolute emissions reduction target, committing to reducing economy-wide net greenhouse gas emissions by 7–10% from peak levels by 2035.

However, the picture is not without complexity. Coal and gas power additions also surged in 2025, rising by 93 GW, 75% more than in 2024, pushing total installed thermal capacity up 6.3%. China started construction on 94.5 additional gigawatts of coal projects in 2024, and coal production rose from 3.9 billion tons five years ago to 4.8 billion tons. An additional 290 GW of coal-fired capacity remains under construction. These investments, while partly serving as backup capacity and grid stabilization tools, risk creating lock-in effects and obstacles to further clean energy deployment if not carefully managed.

Chinese Leadership in Climate Action — or Strategic Restraint?

Despite having more solar energy potential than the rest of the world combined, China does not appear to be actively seeking a confrontational leadership role on climate. As Li Suo explains, Beijing "does not want to promise too much, especially at the international level." This is a hallmark of Chinese climate diplomacy: systematically understating targets to ensure delivery, prioritizing the credibility of implementation over the ambition of announcements. China has already surpassed multiple 2030 NDC targets years ahead of schedule — a pattern that makes its official pledges look conservative relative to actual trajectories.

Although China continues to invest heavily in coal, it does not use such power plants as its primary source of energy, opting instead for a more flexible strategy, including energy storage in batteries. Xi Jinping has pledged to "strictly control" coal power before "phasing it down" from 2026 to 2030. At the same time, Beijing is promoting the reduction of carbon dioxide emissions, while also encouraging other countries to do the same, as Hart points out, a stance that contributes to strengthening China's leading role in the climate transition.

Li Suo observes a "rhetorical shift" in which "climate action is not seen as a burden on economic growth", but rather as something positive and a tool for economic growth. Clean energy technologies drove more than a third of China's economic growth in 2025. According to the expert, this change in Beijing's attitude is one of "the most important developments in international climate action in the last decade." China ranked 12th out of 118 countries in the World Economic Forum's Fostering Effective Energy Transition 2025 report, achieving its highest-ever Energy Transition Index score.

The American Reversal

The US, on the other hand, has moved decisively in the opposite direction under the second Trump administration. On his first day in office, January 20, 2025, Trump declared a "national energy emergency," signed executive orders to open up drilling in Alaska's Arctic National Wildlife Refuge, and began a systematic rollback of renewable energy policy. The administration's approach has been comprehensive and deliberate: it blocked government auctions for offshore wind development, halted permits for offshore wind projects already under construction, proposed massive expansion of offshore oil and gas drilling, and issued executive orders to reinvigorate the coal industry.

On April 8, 2025, Trump signed Executive Order 14261, "Reinvigorating America's Beautiful Clean Coal Industry," declaring coal "essential to national and economic security" and mobilizing federal agencies to support coal production. The Department of Energy directed $200 billion in low-cost financing for coal infrastructure, announced $625 million in direct funding to expand the coal industry, reinstated the National Coal Council under the chairmanship of Peabody Energy's CEO, and issued emergency orders compelling coal plants in multiple states to continue operating past their planned closure dates. By the end of 2025, the DOE claimed to have preserved more than 17 GW of coal-fired generation.

In September 2025, the Department of Energy canceled more than $13 billion in unobligated funds originally appropriated for clean energy initiatives, returning them to the US Treasury. The administration's legislative centerpiece, the "One Big Beautiful Bill Act," passed by the House in May 2025, proposed terminating or accelerating the phase-out of key clean energy tax credits under the Inflation Reduction Act, including the Clean Electricity Production Tax Credit (Section 45Y) and electric vehicle tax credits.

The consequences have been swift and measurable. According to E2's Clean Economy Tracker, businesses canceled, closed, or scaled back nearly $34.8 billion worth of clean energy projects in 2025, resulting in the loss of more than 38,000 announced jobs. For the first time since 2022, more clean energy investment left US communities than came in, companies abandoned nearly three dollars in clean energy investment for every one dollar announced. Republican-led congressional districts bore the brunt of these losses, shedding $12.4 billion in investment and nearly 15,000 jobs through September alone. Major cancellations included GM scaling back EV production lines, SK On withdrawing $2.8 billion from Tennessee, Ford canceling a manufacturing plant in Ohio, and KORE Power abandoning a $1 billion battery plant in Arizona that would have brought 3,000 jobs.

The Federal Energy Regulatory Commission nonetheless forecasts that the US will still add 92.6 GW of new solar and 22.6 GW of new wind between August 2025 and July 2028, while no new coal is expected to be built during that period and 25 GW of existing coal capacity is set to retire. Wind and solar overtook coal in the US power mix for the first time in 2024, together contributing 17% of the country's electricity compared to coal's 15%. The economic fundamentals favor renewables regardless of policy: solar and wind are simply cheaper. But the pace of transition is being significantly retarded by deliberate policy choices.

The Tariff Wall

The Trump administration has deployed tariffs as a central tool in its approach to clean energy trade with China, with effects that reverberate throughout the US solar industry. Chinese solar polysilicon, wafers, and cells now face combined duties of approximately 60% under Section 301. Reciprocal tariffs announced on April 2, 2025, initially set at 10% for most countries, were escalated to 125% (later 145%) for Chinese imports. Anti-dumping and countervailing duties finalized on April 21, 2025, target solar cells and modules from Vietnam, Malaysia, Thailand, and Cambodia, the four countries that accounted for more than 75% of US solar panel imports, with rates ranging from 46% to an extraordinary 3,521% in the case of certain Cambodian producers.

The practical effects are substantial. Solar panel prices have increased 20–40% depending on origin, inverters by 10–30%, and battery storage costs by 30% or more. Research indicates that every $1 in tariffs imposed on manufacturers translates to a $1.35 increase in final prices for consumers. A Solar Energy Industries Association analysis found that earlier rounds of solar tariffs cost the US industry 62,000 jobs and increased installation costs for homeowners. A study published in Nature estimated that cutting China out of solar supply chains increases module prices 20–30% compared to globalized procurement. The costs of solar modules are already two to three times higher in the US than in Europe.

"When it comes to clean technology, the US is essentially holding itself back," says Li Suo. "When it comes to solar panels, for example, tariffs are prohibitively high."

The Electric Vehicle Chasm

When it comes to electric vehicles, the divergence between the two countries has become a gulf. In China, EVs surpassed 50% of new car sales for the first time in 2025, reaching approximately 53% market share with an estimated 13.2 million vehicles sold. According to industry data from the China Association of Automobile Manufacturers, EVs maintained above 50% market share for five consecutive months in the second half of 2025. Battery-electric vehicles alone accounted for 37% of the overall passenger vehicle market. By November 2025, plugins held 59% of total auto sales, with the market setting new monthly records.

"The average new car in China is an electric vehicle, while the percentage in the US is closer to 10%," Jeremy Wallace, professor of Chinese Studies at Johns Hopkins, tells DW. The actual US figure for 2025 was approximately 9.4% EV share of new light-vehicle sales, slightly below the 9.8% recorded in 2024, representing the first year-on-year decline. With the expiration of the federal EV tax credit under the One Big Beautiful Bill, projections suggest US EV market share could edge down further to around 6–8% in 2026.

China's EV exports surpassed 2.2 million units in 2025, up 34% year-on-year, with particularly strong growth in Europe (681,000 units, up 17%), Asia (1.1 million, up 40%), and rapid expansion in Latin America (up 81%) and Africa (up 122%). BYD, now the world's leading EV manufacturer, sold more than 130,000 vehicles outside China in a single month (November 2025), up nearly 300% year-on-year. In at least 10 markets where both BYD and Tesla compete, BYD's most affordable model undercuts Tesla's cheapest offering by more than $10,000.

China's transportation sector has largely switched to electric vehicles, which Hart says is expected to happen "in the rest of the world within a decade or two, while the US may actually be left on the sidelines of this industry." The IEA's Global EV Outlook 2025 projects China will achieve an EV sales share of around 80% by 2030, while the US may reach only about 20%, less than half the share projected just one year earlier. The implications extend far beyond the vehicle sector. "If you don't have electric vehicles to create demand for the battery industry and other industries such as electric motors, then other sectors that use these technologies will also be hurt," Hart notes.

Battery Dominance: The Strategic Chokepoint

China's control over battery manufacturing represents perhaps the most strategically significant dimension of the clean energy competition. According to SNE Research data, six Chinese battery manufacturers controlled 68.9% of all global EV battery installations in January–October 2025, up nearly three percentage points from the previous year. Total global EV battery installations reached 933.5 GWh during that period, a 35.2% year-on-year increase, with the global market expected to have surpassed 1,187 GWh for the full year.

CATL, headquartered in Ningde, Fujian province, maintained its position as the undisputed global leader with a 39.2% market share for 2025, totaling 464.7 GWh in installations, a 35.7% increase from 2024. The company supplies batteries to virtually every major global automaker, including Tesla, BMW, Mercedes-Benz, Volkswagen, Hyundai, Honda, and Toyota, alongside Chinese brands like NIO, Li Auto, Xiaomi, and Zeekr. BYD ranked second globally with 194.8 GWh and a 16.4% market share, leveraging its vertically integrated model spanning battery production and vehicle manufacturing. Together, CATL and BYD accounted for 55.6% of all global EV battery installations in 2025.

Meanwhile, South Korean and Japanese competitors faced accelerating pressure. LG Energy Solution maintained third place but saw its market share erode from 11.1% to 9.3% year-on-year, partly due to Tesla's shift toward lithium iron phosphate (LFP) batteries and multi-supplier strategies. Samsung SDI experienced outright declining sales volumes. The three South Korean manufacturers' combined market share fell to 16.8%, a decline of 3.8 percentage points from the same period in 2024.

China is also forecast to invest approximately $131 billion in battery manufacturing during the 2025/26 period, 71% of global battery investment. European production costs remain roughly 50% higher than China's, and the continent's largest domestic battery maker, Northvolt, declared bankruptcy in March after missing production targets. As Tu Le of consultancy Sino Auto Insights stated in 2024, the US was "years behind" China in batteries, and "if the US is going to be competitive on the global stage with EVs, through 2030, they're going to have to use Chinese batteries."

Li Suo believes "there is a gap of at least a decade in terms of industrial competitiveness when it comes to renewable energy, electric vehicles, and batteries." As for batteries used for energy storage and in electric vehicles, the expert believes that "the US simply does not have the necessary expertise to produce them."

The Economic Cost of Retreat

Investments in clean energy being canceled under Trump's policies carry a "real economic cost," Hart points out, compared to the economic growth projected under previous policies. Between 2021 and 2024, the United States experienced an unprecedented clean energy manufacturing boom, with quarterly investment nearly tripling. Since the IRA's passage in August 2022, 415 major clean energy projects were announced across 42 states, representing nearly $135 billion in planned investments and about 125,000 permanent jobs. But 2025 reversed that trajectory sharply: total new clean energy investment announcements fell to $12.3 billion for the year, the lowest since E2 began tracking four years ago.

Green jobs were on the rise in the US, with those in the clean energy sector outnumbering those in the oil, natural gas, and coal sectors by more than three to one. As of 2023, the US solar industry alone employed 279,447 workers, with installation and project development accounting for 64% of all solar jobs. The cancellation wave of 2025 disproportionately hit Republican-voting states and districts that had been the primary beneficiaries of IRA-era investment.

Hart notes that the US will lag behind in "a number of rapidly growing industries," a development that represents a "missed opportunity." A 2024 analysis by Energy Innovation found that full-scale implementation of the Project 2025 agenda could result in $320 billion in annual GDP losses, 1.7 million clean energy jobs lost, and $32 billion in higher household energy costs by 2030.

The contrast with China's approach could not be starker. As Jackson Ewing, director of energy and climate policy at Duke University, observed: "China's made a strategic decision, that's over a decade old at this point, to try to electrify their economy to as great an extent as possible, in a way that remains consistent with their economic growth targets. In the US, we've just had a much less consistent set of approaches and policies… to an energy and industrial transition. There's been real wide vacillations between administrations."

Li Suo believes that China may take on a greater leadership role on climate in the long term, given the overall shift in the Chinese leadership's attitude toward climate transition. The fact that China, as the world's largest emitter, may have reached peak emissions, driven not by economic contraction but by the sheer velocity of its clean energy deployment, would represent one of the most significant structural shifts in the history of global energy. Whether the United States chooses to compete in this transformation or retreat from it will define not only its energy future but also its industrial competitiveness and geopolitical standing for decades to come.