While much of the world remains a bit hesitant to fully commit to electric vehicles, that hasn’t been the case in China, which has long sought to replace ICE models with EVs. Flush with government funding, a number of EV automakers have emerged in China over the past several years as a result, which – coupled with the fact that most raw materials used in EV battery construction come from that same country – has more than one automotive executive worried about the future. Ford CEO Jim Farley previously said that Chinese EV makers are the company’s biggest rivals now – sentiments echoed by chairman Bill Ford – and he also believes that they’ll soon be sold in the U.S., though the current administration is mulling an increase in tariffs to level the playing field. Now, Tesla CEO Elon Musk has also expressed his own concerns about the burgeoning Chinese EV scene, according to Reuters.
“If there are no trade barriers established, they will pretty much demolish most other car companies in the world,” Musk said on a post-earnings call with analysts this week. “They’re extremely good.” Musk also noted that Chinese automakers are the “most competitive” and “will have significant success outside of China, depending on what kind of tariffs or trade barriers are established.”
Musk is already well aware of the threat posed by Chinese EVs after BYD overtook Tesla as the best-selling EV maker on earth in Q4 2023, and that same company is working to expand its global reach by entering other markets right now. This occurred even in spite of deep price cuts that Tesla rolled out in China last year.
After years of state-issued subsidies helped Chinese EV automakers grow their business domestically, it seems as if they’re now looking to take the competition to a world stage, and given that country’s stronghold on the supply chain, analysts seem to agree with both Farley and Musk on this topic. “The completeness and resilience of China’s multi-decade state-directed battery materials processing infrastructure build out is biting hard,” said Ross Gregory, a partner at Melbourne-based consultant New Electric Partners.
We’ll have more on Ford’s competition from around the globe soon, so be sure and subscribe to Ford Authority for continuous Ford news coverage.
Comments
The Chinese EV companies will evenentually ship EV product to the U.S., but they still have quite a lot of disadvantages and many obstacles to overcome still. Their big advantage is low-cost production in China. If BYD, etc start to build factories in the U.S., the cost advantage mostly goes away. Plus, as seen with the Gotion (Chinese) Battery factory, most U.S. communities (especially in the midwest) don’t want a Chinese factory in their community… its going to take YEARs in the courts to resolve.
There’s already 27.5% tariff on ALL EVs from China. (Could go higher, if needed). Keeping China out seems to be the one issue that all U.S. voters seem to agree on, so protectionism against China is popular with Congress on both sides of the aisle.
The IRA gives a $7,500 tax credit for buying an EV (under $80k for SUV and Truck); The Chinese brands built in China aren’t eligible for this tax credit to consumers.
Plus there is a $45/kWh PTC (Production Tax Credit) for producing the battery in USA (with US or U.S. friendly-nation battery materials). On a 100 KWh battery, thats $4,500 per EV. Every made-in-China EV isn’t eligible for the PTC.
Add in that the Chinese (1) still don’t have any dealerships built out, (2) have little brand awareness (expensive to build a new brand from scratch) and (3) the cost to ship product across the Pacific Ocean is high, and (4) the Chinese-made software systems provoke a lot of criticism due to privacy concerns, (if its a connected vehicle – which EVs are -, they will likely store the customers info on the cloud in China – which will be a no-go. Will U.S. consumers want to own a product where the Chinese gov’t will have access to their personal info? I bet most U.S. consumers won’t want that). Until these issues are worked out, made-in-China EVs probably won’t be coming for quite awhile yet.
I think its likely still YEARS away before Chinese EVs come to the U.S. in any significant numbers.
China will dump EV’s on our shores like they did with solar panels.
Sadly this could mark a bleak outlook for the domestic auto manufacturers and the well paying jobs associated with it. The oil industry has long put the brakes on the domestic development of the EV industry to their profit and determent of the US auto industry.
Here’s an idea. Put a tariff on Chinese EV’s, but eliminate the ridiculous “chicken tax”
And…Americans will buy these Chinese manufactured vehicles, thereby funding the CCP and all that goes with that – to great detriment of the United States.
It will be a cold day in hell when I buy a car made in China.
Well when you use forced labor and have zero concerns about safety or emissions and are just a tool of economic warfare, yeah, you can decimate your competition.