Sourсe: CNBC
On May 14, President Joe Biden is expected to impose 100% taxes on imported Chinese industrial products, including electric cars, in response to numerous calls from local automakers and trade unions.
For some time now, the Chinese government has been providing local «green» automakers with substantial subsidies that far exceed those of the US and Europe. For companies such as BYD, this brings in billions of dollars every year — in addition to tax breaks for electric car buyers that stimulate sales of «green» cars.
BYD and similar brands have focused on making cars cheaper to manufacture — for example, using only one wiper instead of two, and introducing vertical integration. Automakers in the U.S. (except Tesla), Europe, Japan, and Korea instead rely on multiple layers of suppliers, most of whom provide parts to multiple manufacturers.
Chinese manufacturers, like other brands, are also adding video surveillance systems and connected online services to their cars, raising questions about potential tracking — currently under investigation by the US Department of Commerce, whether cars imported from China pose a threat to national security. For the same reason, the Chinese government has restricted access to Tesla cars on the territory of certain organizations (including the military) in the country.
Currently, Chinese companies sell electric vehicles in foreign markets at prices that few can compete with, undermining the local industry If you look at the numbers in Europe, where BYD and MG opened representative officeslast year, 1 in 5 electric cars sold were made in China — in 2024, according to forecasts, the figures will increase to 1 in 4.
Last year, the European Union launched an investigation into anti-competitive behavior by Chinese manufacturers, and it is expected that in the next few weeks, it will also impose higher tariffs on Chinese electric vehicles.
«If trade barriers are not imposed, they will destroy most other car companies in the world», — Tesla CEO Elon Musk said in January.
The US already levies a 25% duty on imported Chinese cars in addition to the standard 2.5% duty that applies to any vehicle imported into the US. As early as today, Biden may introduce new duties of 102.5% — in particular for Polestar and Lotus, which manufacture their electric cars for the US market in China.
Source: Ars Technica