It's not (or at least not just) about subsidies, cheap Chinese labor, etc. It's a fairly classic tech disruption story. Globally, the established carmakers know the future is electric, but they've got existing plants, workers who are trained to build ICEs, long established suppliers who make ICE parts, and so forth. You can argue that executives are being paid big bucks to solve such issues, which is true, but it's truly a hard problem. Especially when these are real factories and workers and industrial equipment you're dealing with.
But why did the disrupters come from China? Everyone is pointing to state support and existing strengths in battery tech, which are supply side factors, but there are also reasons on the demand side. Chinese people have relatively few cars (300 cars per capita, versus 850 per Capita in the US or 603 in the UK). As people get richer and start buying cars, there's a chance for EV makers to get in the door. This, by the way, is why it makes sense that the Chinese EVs are entering on the cheap end of the market, whereas Tesla, which started out selling to western consumers, entered on the premium end.
China has its own ICE carmakers, but they aren't established enough (and politically connected enough) to really push back against the onslaught of EV firms. (China can hardly impose tariffs on itself...) And at this point, the smarter ones like Geely have decided to go with the flow.
See, this was always the problem with Chinese efforts to indigenize their semiconductor industry. Each individual Chinese firm had no incentive to use Chinese suppliers, rather than their more established Western competitors. Well, guess what, the US Government has solved that coordination problem for them. Just about every Chinese company, up and down the supply chain, now has an excellent reason to buy Chinese. Sure, they'll take years to work out the kinks, and there will be lots of chances to point and laugh in the meantime. But in the long run, the Sullivan-Blinken strategy of squeezing the Chinese chip industry might end up being one of the most counterproductive geostrategic ideas of all time.