Updated (See end of story for updates): Chinese electric vehicle makers are rapidly gaining share outside of the US, enough so that Ford’s CEO Jim Farley recently said Ford’s biggest competitor is not GM or Toyota but Chinese vehicles, reported NBC News.
Western automakers are expected to give up a fifth of their worldwide market share “due to the unstoppable rise of more-affordable, cheaper-to-produce Chinese electric vehicles,” said Automotive News, quoting UBS Group analysts.
Why do we not see more Chinese vehicles in the US? Because the US charges a 27.5 percent tariff on Chinese-made vehicles.
That said, Polestar is making inroads in the US. It is headquartered in Sweden but now owned by Chinese car company Geely. It sold almost 10,000 vehicles in 2022 and it plans to have 40 retail outlets in the US by the end of the year. It will begin producing cars out of South Carolina by 2024, reports ForeignPolicy.
Maybe you have heard of BYD (Build Your Dreams) the top Chinese EV car maker, which is backed by Warren Buffet. It surpassed Tesla as the world’s biggest EV seller in June.
BYD’s new EV called the Seagull is the cheapest subcompact in the world at $11,000 (compared to Toyota’s cheapest at $25K and Tesla’s Model Y at $40K). After its debut in April, The Washington Post wrote, “This year has marked a moment of arrival not just for BYD but for the much-maligned Chinese auto sector as a whole.”
How did this happen? China is the leader in making EV batteries and materials for EVs such as lithium and cobalt, so it controls their prices. Also the Chinese government has provided billions of dollars in subsidies and tax breaks to Chinese EV makers. Chinese consumers enjoy exemption from a 10 percent purchase tax on EVs.
Even without the mega market of the US, Chinese car makers are expected to double their share of the global auto market to 33 percent by 2030, said UBS. And Western automakers will see a drop in share from the current 81 percent to 58 percent, in what UBS calls “a crisis moment.”
China overtook Japan as the world’s leading auto exporter in Q1 this year.
Oliver Zipse, CEO at BMW, said recently, “Chinese automakers pose an imminent risk to Europe’s auto industry,” wrote the ZoZoGo Newsletter.
Sources: Automotive News, NBC News, The Washington Post, ZoZoGo Newsletter, ForeignPolicy
Photo: BYD’s The Seagull
UPDATE:
Since we published the story the following news may impact China’s grip on the worldwide EV market:
Europe is starting to crack down on Chinese EV Imports–-France is moving to limit the import of Chinese EVs and the European Union announced it will investigate China’s use of EV subsidies to allow it to flood the market with cheap cars….
Lithium Discovery in US Volcano Could Be Biggest Deposit Ever Found–Mining could begin in 2026 but Native Americans are contesting it as they consider the site sacred…
Sodium ion is going to be a game changer and will further bring down the cost of China made EV’s