US-China Economic War Will Keep EVs ONLY for the Gentrified & Aids Global Warming?

The White House also plans to more than triple tariffs on Chinese EV batteries and battery parts to 25%. Graphite, permanent magnets used in EV motors and other EV minerals would get new 25% duties added. These tariffs could affect a broader range of vehicles.
Also solar cell tariffs that are set to double from 25% to 50%. There will also be a bump in semiconductor tariffs from 25% to 50%.

Without access to lower-cost batteries and battery materials made in China, EVs will be too expensive for mainstream U.S. consumers, automakers have said.

Chinese retaliatory tariffs that targeted U.S. vehicles could hurt workers at the BMW factory in Spartanburg, South Carolina, which sends about 25,000 vehicles to China per year, or the Mercedes-Benz SUV plant in Alabama that builds electric SUVs sold in the world’s largest market.

A clean-technology trade war between the United States and China could also drive up the costs of EVs, batteries and other EV hardware, keeping overall EV prices high, industry executives and some analysts said. EVs wearing U.S. brands, such as the Mustang Mach-E or Tesla Model 3, have 30% to 51% Chinese content, according to U.S. Transportation Department data.

“From the battery, from the mining, from all the technology integration, the Chinese supply chain now is the leading supply chain. It’s the best,” Stella Li, head of Chinese EV and battery maker BYD’s operations in the Americas, said at the Milken Conference last week. “Why don’t you allow a U.S. company to have the freedom to choose the best supplier?”

Experts are divided over whether stronger tariff protection will help U.S. automakers in the long run, or work to the benefit of consumers.

“The tariffs buy important time,” said Michael Dunne, a consultant who has watched the Chinese auto industry for years. “The U.S. is five to seven years behind China when it comes to electric vehicles and battery supply chains.” China protected its automakers in the 1990s and 2000s, Dunne said. “U.S. political leaders could rightly say we are just borrowing a page from China’s playbook.”

I would say US political & corporate leaders ALWAYS operate on the short term view. US off-shoring policy reduced US industrial might within the country and laid waste to US blue collar workers & set up the Covid supply chain collapse. China recently seems to operate with a long term view. The China exception was that they really shot themselves, maybe fatally with the one child policy in the past.

BYD’s recent announcement that it plans to build an electric pickup truck in Mexico transforms a hypothetical threat into a real one for incumbent U.S. automakers. A Mexican-made EV with sufficient North American-sourced parts could qualify for tariff-free entry to the U.S. market.

BYD will utilize the same strategy in the EU with its new factory in Hungary. That plant is currently under construction.

I expect the Chinese will follow the Japanese path of building factories eventually in the USA.


Sounds like a good thing for the American worker, who can’t buy EVs or solar panels without jobs. Would also probably reduce the risk of war with China.

That’s assuming BYD can make a profit selling their EVs at Chinese prices while paying EU-level wages. It still isn’t clear that they make a profit from BEV sales in China.

I’m guessing BYD made-in-Mexico vehicles will not be for the American market. Made-in-Mexico batteries will be. I’m guessing battery profit margins are a lot better than low priced BEVs.


Reuters thinks that the US can’t build mass market EVs? That might have been true when Japan ate the Big Three’s lunch but now there is Tesla working on the unboxed Redwood model.

The Captain


US automakers don’t want to build “mass market” anything anymore. Everyone wants to be “upmarket” and take a premium profit margin. The average price of a new car in the US now is about $48,000, enabled by E-Z Credit, and ever lengthening payment periods.



Tesla is not in the everyone group.

The Captain

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I’m talking about mass market producers, Ford and VW in particular, who say they don’t care about volume and market share. They are only interested in increasing ATP and GP.

In an interview with Financial Times, VW Group Chief Financial Officer, Dr. Arno Antlitz, explained that the company’s sales strategy will be changing drastically with the company moving away from large-volume models like the Golf and Tiguan and toward few but more premium models. Of course, this direction has become quite common with larger legacy automakers since premium cars have become more in demand lately. However, it leaves one to wonder if Volkswagen can pull it off. I’ve always said that Volkswagen thinks it’s more premium than it is, which is the exact reason why the Touareg failed in America – Volkswagen was charging premium prices for an SUV that had more hard plastic inside than your typical GM car.

And what has been the result of VW’s profit margin push? Cars loaded with gimmicks like touch controls that don’t work very well, umpteen color “ambient lighting” and illuminated grills, while product reliability and customer satisfaction have crashed.

Steve…is very satisfied with his reliable, high quality, 10 year old VW, but they don’t make cars like that anymore.

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Chinese EVs have enjoyed a number of advantages over Western automakers. BYD, for example, has control over its entire supply chain, with its battery supply being a huge advantage.

It has helped them eke out market share in Europe at a frantic pace. EU imports of Chinese EVs jumped from $1.6 billion in 2020 to $11.5 billion in 2023,

*BYD’s affordable Seal U car as an illustrative example. *

The car sells for €20,500 ($21,950) in China and €42,000 ($45,000) in the EU.

China must be matching Tesla 2020 margins!

That’s because Chinese automakers’ profits in the EU are so vast that only an eye-popping tariff would be enough to put carmakers like BYD off the prospect of selling EVs in the country.

“Duties in the 40% to 50% range—arguably even higher for vertically integrated manufacturers like BYD—would probably be necessary to make the European market unattractive for Chinese EV exporters.”

Such a number is effectively unworkable for now, thanks to WTO rules the EU currently trades on with China.

Looks like EU automakers will continue to lose market share to China EV imports.

Sept, 23, 2023 article:
EU tries to buy time in electric car race with China
The average of a China EV sold in EU was $48,581 in the first half of 2023, compared with a cost of $67,687 for non-Chinese brands, according to data group Jato Dynamics.

It’s a bit rich of the EU to ding China over EV subsidies

Indeed, the European Union itself offers an array of benefits for EV producers and consumers, including tax breaks for manufacturers, thousands of euros of subsidies per car for buyers and tax credits for households and businesses that install EV chargers.
Similar to what the USA does.

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