The Biden administration's new tariffs on Chinese electric vehicles will not have a significant immediate impact on U.S. consumers or the auto market, as few such vehicles are sold in the United States.
But the decision reflects deep concerns within the U.S. auto industry, which is increasingly concerned about China's ability to mass-produce cheap electric vehicles. U.S. automakers on Tuesday welcomed the Biden administration's decision to impose 100% tariffs on Chinese electric vehicles, saying the vehicles would undermine billions of dollars of investment in U.S. electric vehicle and battery factories. .
“Today's announcement is a necessary response to combat the Chinese government's unfair trade practices that jeopardize the future of our auto industry,” Sen. Gary Peters, D-Mich., said in a statement. “It will help level the playing field, keep the auto industry competitive, and support good-paying union jobs at home.”
President Biden on Tuesday announced a series of new tariffs on certain Chinese-made products, including 25% tariffs on steel and aluminum and 50% tariffs on semiconductors and solar panels. Tariffs on Chinese-made electric cars have been quadrupled from 25%. China's lithium-ion batteries for electric vehicles will be subject to tariffs ranging from 7.5% to 25%.
The United States only imports electric vehicles or gasoline from China, and only a few manufacturers. One of them is the Polestar 2, an electric car made in China by a Swedish automaker in which Chinese company Zhejiang Geely has a controlling stake. Pollstar said in his statement that it was assessing the impact of Biden's announcement.
“We believe free trade is essential to accelerating the transition to more sustainable mobility through increased adoption of EVs,” the company said.
Polestar sold just 2,200 vehicles in the U.S. in the first quarter of this year. However, production of the new Polestar 3 is scheduled to begin later this year at a South Carolina plant operated by Geely's Volvo Cars.
Volvo sells the Chinese-made plug-in hybrid sedan “S90 Recharge'' in the United States, and plans to begin importing the new compact sports utility vehicle “EX30'' from China to the United States this year. The price of this car is expected to start from $35,000, making it one of the most affordable battery-powered models available in the country. This model quickly became Volvo's best-selling car in Europe.
Volvo said Tuesday it is evaluating the potential impact of Biden's new tariffs on its plans.
Internal combustion engine models manufactured in China and sold in the United States include General Motors' Buick Envision SUV and Ford Motors' Lincoln Nautilus. They are not affected by tariffs.
Tesla, GM, Ford, Volkswagen, Hyundai and several other automakers have invested tens of billions of dollars in battery and electric vehicle factories in the United States. But with the exception of Tesla, U.S., European and Japanese automakers lag behind Chinese companies in terms of scale, raw material production and key technologies.
Last month, Chinese manufacturer Contemporary Amperex Technology Company Ltd. (CATL), the world's largest producer of electric vehicle batteries, announced that it has developed a battery that can be charged in 10 minutes with enough power for a car to travel about 370 miles. announced that it had developed. It's a big improvement compared to the batteries used by existing automakers in Europe, the US, and Asia, including Tesla.
China's lead in electric vehicles, seen as the future center of the auto industry, may bring Chinese cars to the U.S. market at prices that GM, Ford and other traditional automakers can't match. There are growing concerns that this may be the case.
BYD, China's fast-growing major auto and battery company, already sells its small electric car, the Seagull, in China for less than $15,000. On Tuesday, the automaker announced that it would start selling plug-in hybrid pickup trucks in Mexico, but added that there are no plans yet for sales in the United States.
Chinese automakers such as BYD, Geely Automobile, and SAIC Motor are increasing their car exports to Europe, Latin America, and Asian countries. The European Commission, the European Union's executive arm, is investigating Chinese government subsidies for electric car manufacturers.
Some representatives of the U.S. auto industry said the Chinese government's support for its automakers leaves Chinese factories with the capacity to produce far more cars than they can sell domestically. .
“They have a serious problem with overcapacity in EVs,” said John Bozella, president of the Alliance for Automotive Innovation, the main lobbying group for U.S. automakers.
“They're building too many EVs, heavily subsidized EVs, for the domestic market, and they have no choice but to look overseas to unload those vehicles at affordable prices. ” Bozella added. “If heavily subsidized Chinese EVs were sold to American consumers at below-market prices, the competitiveness of the U.S. auto industry would be undermined.”
Chinese officials have denied that the country is overproducing electric vehicles, solar panels and other products targeted by the Biden administration. “We hope the United States will take a positive view of China's development and stop using excess production capacity as an excuse for protectionism,” Liu Pengyu, a spokesperson for the Chinese embassy in Washington, said on Tuesday.
Automakers are already experiencing how price competition can disrupt their electric vehicle plans. Tesla lowered the prices of its models several times last year, reducing the total cost of some models by more than 20%. These cuts, along with slowing growth in electric vehicle sales, have made it extremely difficult for GM and Ford to turn a profit on battery-powered models.
Ford's electric vehicle division lost $1.3 billion in the first three months of this year, before expenses. Both Ford and GM are slowing electric vehicle production and delaying the introduction of new models. GM is losing money on electric vehicles, but the company said it expects them to start turning a profit later this year.
The Biden administration is seeking to support and encourage battery and electric vehicle production in the United States to combat climate change and encourage the expansion of domestic manufacturing.
China is not the only stumbling block. Americans' enthusiasm for electric cars has waned over the past year, largely because they sell for relatively high prices. Some buyers are reluctant to make the purchase because they aren't sure there will be enough places to easily and quickly charge those cars.
According to Kelley Blue Book, 269,000 EVs were sold in the U.S. market in the first quarter of this year. Compared to the previous year, the increase was only 2.6%. Total sales of passenger cars and light trucks increased by more than 5% to 3.8 million units.
“Purchasing an EV requires a lifestyle change in many ways,” said Jessica Caldwell, executive director of insights and market researcher at Edmunds. She says, “A lot of people just say, 'I don't want the hassle of EVs.'”
Alan Rapeport Contributed to the report.