On a long list of disputes between the U.S. China, electric car play an increasingly prominent role.
As a rising star in the automotive industry, electric vehicles are now also the subject of fierce business competition and national security concerns in the world’s two largest economies.
And this metropolis, known as China’s Silicon Valley, is in the midst of The country strives to dominate the lucrative global market.
BYD and other Chinese companies are U.S. auto companies’ biggest global competitors Teslais forcing Western carmakers to change the way they produce electric vehicles if they want to stay competitive in a growing industry.
“They’re not ready yet,” said Stella Li, chief executive of BYD Americas. “For BYD, we are ready. We are ready for technology and we are ready in the supply chain,” she told NBC News exclusively at BYD’s headquarters in the southern city of Shenzhen in April. said during the interview.
Despite their lower prices, Chinese EVs typically have more powerful batteries and more advanced technology.
But they are inaccessible in the United States, where they face high trade barriers and have been accused of Chinese government subsidies giving them an unfair advantage.this American Manufacturing AllianceThe advocacy group said that the entry of Chinese cars into the U.S. market would be an “extinction-level event” for the U.S. auto industry.
China says its advantages in electric vehicles come from “continuous innovation,” a sound supply chain system and market competition. But U.S. officials and others worry that years of government support for the industry has created overcapacity, raising the risk of excess Chinese products flooding overseas markets and undermining domestic production.
BYD is a private company founded in 1995 as a battery manufacturer. Ships to overseas.
In the final quarter of 2023, BYD surpassed Tesla to become the world’s largest electric vehicle manufacturer by sales. Although Tesla regained the title in the first quarter of this year, BYD reported a 43% sales drop from the previous quarter. .
The rise of BYD and the entire Chinese EV industry has been fueled by more than a decade of strong support from Beijing in the form of subsidies, tax breaks and consumer incentives – in line with the ruling Communist Party’s larger strategy to deliver That global climate commitment But industry experts generally believe that this is a competitive means to build China’s automobile industry.
Competition among hundreds of Chinese electric vehicle manufacturers spurs rapid innovation.
“The Chinese have made amazing achievements in the quality of their cars over the past 10 to 12 years,” said former Ford CEO Mark Fields. “The design has improved a lot and the quality has improved a lot.”
This year, up to 45% of cars on China’s roads could be electric, according to one company, compared with 25% in Europe and about 11% in the United States. Report from the International Energy Agency.
All of this could spell trouble for U.S. automakers struggling to catch up.
Even Tesla CEO Muskwho made a Surprise visit to Beijing It said last week that without trade barriers, Chinese electric car makers would “destroy” their rivals.
China’s electric cars tend to be smaller, cheaper and more accessible to the masses – BYD’s Seagull is a small all-electric hatchback that starts at less than $10,000. In the U.S., by contrast, EV makers have been emphasizing larger, more luxurious models aimed at wealthy buyers, although Musk said in April the company would start producing new affordable EVs early next year car model.
Fields said that as domestic sales slow, Chinese automakers are looking for new markets for their lower-priced inventory, eventually including the U.S.
“This is no different from the playbook they use in other industries, whether it’s steel, aluminum or solar panels,” he said. “This could pose a real threat to U.S. and Western automakers.”
Fields said Western electric car makers cannot avoid competing with Chinese companies in the global industry, but it will take time for them to catch up, especially on price.
“At the end of the day, consumers are going to vote with their wallets, and when mainstream consumers actually support electric vehicles, you know that’s going to dominate their thinking,” he said.
One thing that comes with buying a U.S. automaker is the 27.5% import tax on any vehicle built in China and shipped to the United States. Lawmakers from both parties have called for higher tariffs.In turn, China also has File a lawsuit with the World Trade Organization Accused the United States of discriminating against Chinese products in terms of subsidies for electric vehicles.
The European Commission is also considering whether to impose punitive tariffs on Chinese electric vehicle imports as part of an investigation into Chinese government subsidies, which Beijing has criticized as protectionist and detrimental to Chinese manufacturers.according to a April report Rhodium Group said that EU tariffs need to be as high as 55% to curb the import of Chinese electric vehicles.
As BYD seeks to build a plant in Mexico, there are concerns that the company and other Chinese automakers may try to evade tariffs by exporting vehicles to the United States from there. (Li said the company’s Mexican operations are focused solely on local sales, and BYD has no current plans to enter the U.S. market.)
“I think it’s going to require not only potentially higher tariffs but also trade restrictions,” Fields said.
Fields said that in addition to tariffs and trade restrictions, Chinese electric vehicle manufacturers face many regulatory and compliance obstacles to selling vehicles in the United States. It takes time to establish sales and distribution networks, and Chinese electric vehicle manufacturers may face a perception that the United States Consumer issues.
The Biden administration also Investigating “Smart Cars” Made in China Its functionality is said to be used to collect personal information about U.S. drivers.
Lee said there was no data to support such an investigation and that U.S. national security concerns were “exaggerated.”
“If you have national security concerns, you should be more concerned about your phones,” most of which are also made in China, she said.
She added that BYD had “world-class” standards in protecting personal data.
China has its own privacy concerns about Tesla, with the company’s electric vehicles reportedly banned from some government-related properties in the country due to concerns about what information Tesla might collect. During Musk’s visit last week, the China Association of Automobile Manufacturers announced that some models from Tesla, BYD and four other Chinese manufacturers had passed China’s data security requirements.
The move could clear the way for Tesla’s highest level of self-driving software to be approved in China, the safety and performance of which was criticized by U.S. regulators in a recent report.
Lee said the atmosphere in the United States is similar to that of decades ago, when U.S. automakers felt threatened by imports from South Korea and Japan. American brands survived and “aggressive competition” ultimately benefited consumers, she said.
The auto market “has never been dominated by one company, and it has never been dominated by one country,” she said. “If you look at all history, this doesn’t happen.”
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