Editor's note: Warwick Powell is an adjunct professor at Queensland University of Technology. The article reflects the author's opinions and not necessarily the views of CGTN.

Western commentary on Chinese manufacturing has spent years circling one phrase like a mantra: "overcapacity." It is meant to sound sober and technical. In practice, it has often functioned as an ideological complaint against the one country that has built industrial scale across the full electrification chain: Vehicles, batteries, charging systems, grid equipment, renewables, storage, and now increasingly the heavy transport, maritime, and aerial platforms that will define the next phase of energy transition.

That complaint now looks dangerously out of date.

As the war against Iran has driven severe disruption through the Strait of Hormuz, the world is being reminded, brutally, of a fact it should never have forgotten: Hydrocarbon dependence is not merely an environmental problem but a strategic vulnerability. Roughly one-fifth of global oil supply and a major share of LNG trade have been tied to flows through the Gulf, and the current conflict has already produced major export disruptions, shipping risk, surging insurance costs and price spikes across energy markets. The IEA's Fatih Birol has described the present crisis as potentially the most severe energy shock in history.

In that world, the question is no longer whether Chinese electrification capacity is "too large." The real question is: Who needs Chinese electrification capacity?

The answer is simple. We all do.

The phrase "overcapacity" assumes a world in which existing demand is the natural measure of appropriate production. But that is the wrong benchmark for a system in transition. When the world has to replace oil-burning cars, diesel trucks, fossil-based industrial systems, weak grids, imported fuel dependency, and vulnerable logistics chains, then "current demand" is not the ceiling. It is merely the lagging reflection of legacy infrastructure, old prices, old politics, and dated habits.

Necessary capacity always appears excessive to incumbents.

That is especially true in electrification, because electrification is not one product. It is a system. Electric vehicles are the visible tip of the iceberg, but beneath them sits the real transformation: Batteries, battery minerals processing, power electronics, charging systems, local storage, renewable generation, digital energy management, and the growing integration of transport with distributed energy networks. Of course, electrification replaces the internal combustion engine with a motor, but it also builds a lower-cost, more resilient civilisational platform.

China has done more than any other country to assemble that platform at scale. According to the IEA, global electric car exports rose nearly 20% in 2024 to around 3.2 million vehicles, and China accounted for the largest share, with 40% of global exports — nearly 1.25 million cars. China is not some marginal participant in electrification. It is the central manufacturing hub in the world's most important industrial transition.

And this is not confined to passenger motor vehicles. The heavy transport story matters just as much. The economics of electric trucks are improving rapidly as battery costs fall, charging systems expand, and the total cost of ownership improves across more use cases. The IEA's latest outlook explicitly highlights heavy-duty truck economics as a major frontier of transition to 2030. Meanwhile, Chinese battery firms have already moved beyond the lithium templates and entered into sodium-ion systems suited not only to stationary storage, but also to commercial vehicles and power grid applications. That matters because it expands the material base of electrification and reduces pressure on some critical minerals bottlenecks.

This is where the old Western critique begins to collapse under its own contradictions.

For years, Western officials and commentators have argued that the world needs faster decarbonization, more affordable clean technology, quicker EV adoption, more storage, more resilient grids, and less dependence on unstable fossil fuel supply routes. Yet when Chinese firms actually deliver the industrial means to make that possible at scale and at lower cost, the same voices call it "distortion," "dumping," or "overcapacity."

One cannot lament the slow pace of decarbonisation while denounce the largest pool of manufacturing capacity capable of accelerating it.

The truth is that what looks like "too much" capacity from the vantage point of protected incumbent industries looks like barely enough when viewed from the standpoint of the world's actual needs.

Consider the Global South. Across Africa, Asia, and Latin America, energy transition is not a matter of consumer preference or elite climate branding. It is about social and economic development. It is about reducing oil import bills, stabilizing electricity supply, expanding mobility, supporting agri-processing, modernizing logistics, and building the material basis for industrialisation without repeating the fossil-intensive path followed by the West.

For many developing countries, electrification is inseparable from energy sovereignty.

Chinese capacity is critical here because it lowers the entry cost of transition. Cheaper EVs, batteries, solar modules, storage, and increasingly electrified freight systems create practical options for countries that cannot afford premium-priced green transitions designed around Western industrial protection. The real choice facing much of the developing world is not between Chinese electrification and some equally available Western alternative. It is between Chinese electrification and delayed electrification.

That is not trivial. It is the difference between development now and development later. It is a question of reducing fuel vulnerability or remaining hostage to imported oil. It raises the challenge of building distributed power systems today or choosing to live with chronic energy insecurity.

The Eurozone, too, has a stake in this, even if it rarely admits it openly. Europe's energy crisis after the rupture of the Russian pipeline gas exposed the structural fragility of an economy built on high-cost energy inputs. The current Gulf shock only intensifies that pressure. In such a setting, affordable electrification is not a Chinese problem for Europe. It is part of Europe's survival strategy. The same is true for Japan and Korea, whose industrial prowess now faces a new competitive landscape shaped not by legacy combustion engineering but by batteries, software, power management and scale manufacturing.

That is why the "overcapacity" trope has become less an economic diagnosis than a political defence mechanism. It expresses the discomfort of incumbent powers confronting a competitor that has built productive capabilities they no longer command so comprehensively themselves.

Expanding Chinese capacity has delivered abundance. The ongoing challenge is how to best organise abundance inside a rapidly evolving industrial ecosystem.

And abundance, in this domain, is precisely what the world needs.

The present oil shock makes that plain. When Hormuz disruption can send physical crude prices soaring, halt exports, strand shipping and destabilize economies from Asia to Europe, the strategic value of electrified transport and power systems becomes impossible to ignore. Every electric bus that displaces diesel demand, every battery-backed distributed network that reduces dependence on imported fuel, every electric truck that cuts freight exposure to oil volatility, and every local storage system that supports renewable integration is part of a wider geopolitical de-risking.

This is why Chinese electrification capacity should be understood as globally enabling capacity.

It enables countries to move faster than they otherwise could, catalysing industrial catch-up without fossil lock-in. It enables a practical response to energy insecurity. It opens up development paths in which modernisation is less tethered to oil chokepoints and cartel pricing. Critically, it enables a world in which the material means of transition are available beyond a narrow club of rich nations.

The real scandal of the last decade has not been that China built too much battery or EV capacity. It is that so many Western economies, after talking endlessly about climate leadership and strategic autonomy, failed to build enough of their own while trying to impede the one country that did. Complaining that Chinese producers are too competitive is not an energy strategy. It is an admission of industrial failure.

So let us retire the phrase "overcapacity" where electrification is concerned. Or at least let us say clearly what it really means in this context: Capacity beyond what incumbent firms in the West would prefer to face.

But the world is larger than incumbent preference.

Africa needs Chinese electrification capacity. Latin America needs it. South and Southeast Asia need it. Europe needs it. Oil-importing states facing strategic vulnerability need it. Freight systems trying to escape diesel exposure need it. Cities choking on pollution need it. Power systems trying to integrate renewables need it. Households and firms needing cheaper energy infrastructure need it.

We all do.

In a post–Oil Shock 2.0 world, Chinese manufacturing capacity is not the obstacle to transition. It is one of the main conditions making transition materially possible. The issue is no longer whether China has built "too much." The issue is whether the rest of the world – by which one mainly means the advanced West – is politically mature enough to recognize necessary capacity when it sees it.

The age of cheap and secure oil is over. The era of strategic electrification has arrived. And the country that has built the industrial bridge into that future is not suffering from an excess of relevance. It is supplying one of the world's most urgent needs.