The Los Angeles Times reported that the U.S.-China conflict “has introduced a new flashpoint in the race for technological supremacy: electric cars.”
“Right now, the United States is losing.”
According to the China Passenger Car Association, last year China became the world's largest car exporter, with overseas sales exceeding 5 million vehicles, surpassing Japan. New energy vehicles account for about 25% of these exports, more than half of which are produced by Chinese brands, shifting from the traditional assembly role China has played for foreign automakers. “We've seen significant growth over the past three years,” said Stephen Dyer, head of Asia automotive and industrial at consulting firm AlixPartners. “This is a big challenge for foreign automakers, as Chinese automakers are moving into the lion's share of the market share.” China's rapid domestic and international expansion comes as competition between the two superpowers intensifies. The expansion has spurred a series of clashes between the United States and China over trade and advanced technology.
One area where Chinese automakers can easily beat their Western competitors is on price. This is thanks to government subsidies that supported the industry's early rise and cheap access to key minerals and components, such as lithium-ion batteries, which make up about a third of the total. Production costs…In March, BYD lowered the price of its cheapest EV model in China to less than $10,000. According to Kelley Blue Book, the average retail price for an EV in the U.S. is $55,343, compared to $48,247 for a full vehicle. The 27.5% tariff effectively keeps Chinese EVs out of the U.S. market, but there are growing concerns that cheaper models will eventually be shut out. A movement to weaken American automakers has begun to spread. In a February report, the American Manufacturing Alliance warned that allowing Chinese-made EVs to enter the country would be an “extinction-level event” for the U.S. auto industry. The group also cited the risks of Chinese auto companies building facilities across the Mexican border to avoid tariffs.
“As artificially cheap Chinese products flood global markets, the viability of American and other foreign companies is called into question.” [said America’s Treasury Secretary in April]. The European Union has launched an investigation into government subsidies used by China's EV industry and whether such support violates international trade law.
