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China has long been considered not only an ever-more-efficient manufacturing force to be reckoned with, but it is also regarded as the “world’s factory” by many (1), as it’s responsible for as much as 30% of global manufacturing (2) — and its mastery of certain sectors, like automotive, is a growing cause for concern among stakeholders.
A whopping 70% (3) of all new electric vehicles (EVs) hailed from China in 2024, with Shenzhen-headquartered brand BYD far outpacing Tesla and others in sales (4), and scaling its worldwide operations as a result (5). Its success even has automakers like Toyota, Honda and Ford rethinking their own projects (6) and overhauling strategies (7), with Ford executives saying three years ago that China was way ahead of the game (8).
A recent tour of one of the Asian powerhouse’s vehicle plants has proved this beyond a shadow of a doubt, at least to Honda President and CEO Toshihiro Mibe (9).
“We have no chance against this,” Mibe said after visiting a Shanghai parts factory, commenting on its seamless automation across all levels of production. Logistics, procurement and all aspects of the process were so automated, in fact, that he did not spot a single human worker on the supplier’s floor.
All of this raises the question: What’s behind China’s success? And what can you do to shockproof your portfolio before it’s too late?
Leaders from both Ford (10) and Toyota (11) have expressed similar sentiments to Honda’s president regarding Chinese manufacturers’ sheer speed in not just building cars, but designing them.
The nation is already known for its expedient development of all sorts of products (12), and its ability to bring vehicles from concept to market in half the time of competitors (13) is one of the more noteworthy examples of this.
China’s cheap labor costs, lack of red tape, well-harmonized supply chain, tax rebates and more (1) have also helped to create an unmatchable, cost-competitive edge that other industry players are understandably spooked about (11).
And investors with money on the line have a right to be apprehensive, too.
Honda’s sales within China — a country that was once a boon for the maker — have plummeted from some 1.6 million units in 2020 to just 640,000 in 2025 (14), with the brand expected to produce even less than 600,000 vehicles this year at its Chinese facilities, which are only operating at 50% capacity due to waning interest (15). Toyota has also just reported year-over-year sales declines within the country in March (16) as homegrown BYD’s lead in the EV sector continues to grow (17).
What’s more, Canadian Prime Minister Mark Carney’s move to drastically slash tariffs on Chinese EVs in January 2026 has made companies like BYD more of a threat closer to home (18).
Read More: Robert Kiyosaki warned of a ‘Greater Depression’ — with millions of Americans going poor. Was he right?
Automotive stocks are a common part of many broad-based mutual funds and ETFs (19) — historically a cornerstone for some (20) — with Tesla perennially among the more contentious picks.
While some experts have warned of a crash in its stock, the Musk-helmed company remains among the best-known investment options in the sector, alongside traditional staples like Ford and Toyota (21). However, big shifts in focus under the threat of Chinese manufacturing, in combination with disappointing sales numbers, could understandably make investment feel risky.
In response to the shifting landscape, Honda recently reanimated its shuttered R&D arm (22) in hopes of spurring more innovation, with Mibe telling journalists in March that the company needs to focus on digitization, and quickly (23). At the same time, executives announced “losses associated with the reassessment of its automobile electrification strategy” at the end of March, leading to the cancellation of a number of Honda’s EV projects for the U.S. market, including the Honda 0 SUV, Honda 0 Sedan and Acura RSX (24).
Toyota’s CEO has likewise said regarding not just his company, but the industry in general, “unless things change, we will not survive,” and calling for some major productivity pivots to match Chinese manufacturers (25). Meanwhile, homegrown EV competitors like Rivian are showing promise in the face of deterioration elsewhere in the sector (26).
So far, 2026 has been a rocky year for investors. Economic uncertainty, geopolitical tensions and shifting domestic policies have sent markets on a rollercoaster ride.
At one point in late March, the S&P 500 slipped nearly 10% below its record high — a drop big enough to qualify as a “correction,” in the words of Wall Street (27). The slide came as investors grew increasingly worried about the economic fallout from the ongoing war in Iran.
But the downturn didn’t last long. The benchmark index has since rebounded and closed at record highs on April 22 (28), highlighting just how quickly sentiment can shift.
The lesson here is that these kinds of pullbacks can create buying opportunities, as strong companies occasionally trade at discounted prices during market pullbacks. The tricky part is figuring out which stocks are genuine bargains and which are simply value traps.
If you’re looking to take advantage of recent volatility but aren’t sure where to start, the experts at Moby can help.
Their team of former hedge fund analysts spend hundreds of hours sifting through financial news and data to provide you with stock and crypto reports delivered straight to you. Their research keeps you up-to-the-minute on market shifts and can help you reduce the guesswork behind choosing stocks and ETFs.
Moby’s success speaks for itself. In four years, and across almost 400 stock picks, their recommendations have beaten the S&P 500 by almost 12% on average. They also offer a 30-day money-back guarantee.
Even better, their reports are easy to understand for beginners, so you can become a smarter investor in just five minutes.
Keeping costs down can make a big difference over time.
“Costs really matter in investments,” Warren Buffett once said during an interview with CNBC (29).
“If returns are going to be 7 or 8 percent and you’re paying 1 percent for fees, that makes an enormous difference in how much money you’re going to have in retirement,” he added.
For those looking for a way to cut down on unnecessary fees, there are discount brokerages like SoFi, which offers no-commission trading that could help you save thousands in fees over the long run.
Their easy-to-use DIY investing platform lets you buy stocks, ETFs and more without the burden of paying commission fees or maintaining account minimums. SoFi also delivers the real-time investing news, curated content and data that you need to make smart decisions about the stocks that matter most to you.
Even better, for a limited time, you can get up to $1,000 in stock when you fund a new account.
When markets get choppy, it’s easy to second-guess your portfolio. One sharp downturn is often enough to shake confidence — especially if you’re not sure whether your investments are aligned with your goals or risk tolerance.
If you find that financial anxiety is getting the best of you, a financial advisor could help get you back on track. A financial advisor can crunch the numbers and build a plan that works for you.
But hiring an advisor can be a lifelong commitment, which might make or break your retirement. That’s where Advisor.com comes in — the platform that connects you with an expert in your area, for free.
All you have to do is enter a few details about your finances and goals, and Advisor.com’s AI-powered matching tool will connect you with a qualified expert suited to your unique financial needs and goals. The platform’s advisors are also fiduciaries, meaning they are legally obligated to act in your best interest.
What’s more, Advisor.com lets you set up a free, no-obligation consultation with your match to see if you’re on the same page.
Even though downturns can feel unsettling, history shows that markets don’t move in a straight line. U.S. stocks have consistently recovered from declines over time, often rebounding after periods of sharp volatility.
“American business will do fine over time,” legendary investor Warren Buffett wrote in Berkshire Hathaway’s 2012 shareholder letter. “Periodic setbacks will occur, yes, but investors and managers are in a game that is heavily stacked in their favor (29).”
But if market swings are making you nervous, one of the simplest ways to invest is through index funds or ETFs. Buffett believes it makes the “most sense practically all of the time (30).”
And data backs Buffett’s claims. According to research from S&P Global, 79% of all active large-cap U.S. equity funds underperformed the S&P 500 in 2025 (31).
The real secret isn’t trying to time the market — it’s getting started and staying consistent. Even investing $20 a week can add up over time, thanks to the power of compounding.
The easiest way to stay consistent is to invest automatically, without even thinking about it. But how exactly can you do that?
These days, it’s easier than ever with a platform like Acorns, which allows you to turn your spare change from everyday purchases into an investment opportunity.
Once you link all your cards, Acorns will automatically round up all expenses to the nearest dollar and set aside the difference, which is then invested in a diversified portfolio of ETFs managed by experts at leading firms like Vanguard and BlackRock. This way, your everyday purchases can start working for you behind the scenes.
The best part? Sign up today and get a $20 bonus investment.
— With files from Becky Robertson
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Investopedia (1), (19); The Economist (2); International Energy Agency (3); Autovista24 (4); Financial Post (5); Motor1 (6), (15); Car Dealership Guy (7); Reuters (8), (13); Nikkei Asia (9); CarBuzz (10), (11), (23); LinkedIn (12); AutoGuide (14); Asia News Network (16); Statista (17); Prime Minister of Canada (18); ETF Database (20); The Motley Fool (21); MSN (22); Honda (24); Yahoo Finance (25); The Globe and Mail (26); PBS (27); Morningstar (28); Berkshire Hathaway (29); CNBC (30); S&P Global (31)
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