China is able to produce and sell EVs at a much cheaper price, which can outpace the EV makers in the west
Donald Trump, the 45th President of the US again caught himself in a heated controversy when he remarked that there should be a 100 percent tax imposition on those cars, which are manufactured in Mexico by the Chinese firms for sales in the states. The former President presented a war of words in his speech by saying that the US automobile market will be furnished with serious challenges if he does not win in the coming election.
Although his comments sparked serious controversy some experts in the US feel that there is a huge concern in the West in regards to China’s evolving electric vehicle market. If some actions are not taken, then China's EV market will completely tarnish the western market with its pricing structures. The EV market in China is growing at a staggering rate with better availability of raw materials and batteries. Therefore, they are able to produce and sell EVs at a much cheaper price, which can outpace the EV makers in the west.
Gina Raimondo, the US Commerce Secretary in a recent interaction with MSNBC has said that cars are now like iPhone on wheels and the US roads will be flooded with Chinese EVs if there are not ample government controls on sensors and software. In retaliation, a spokesperson in China has shot holes in Raimondo’s comment and said the US is creating a controversial theory and fallacious narrative about China’s business policies. According to a report of Bloomberg, China’s largest EV firm BYD’ Seagull electric car is now having a strong foothold in the global market, which has left no choice for Detroit, USA’s automobile hub, to unveil cheaper EVs.
In the US, cars sold by Chinese firms are imposed with 25 percent tax, but if they appear from Mexico, then the tariff will be 2.5 percent due to the US-Mexico-Canada trade pact. In an effort to grow its presence globally, Chinese EV companies are now looking to construct more vehicle factories in numerous countries. BYD has built car-making units in Uzbekistan, Thailand, Brazil, and Hungary. In fact, China’s biggest EV exporter Chery Auto has now proclaimed $400 million to set-up another unit in Argentina, which would manufacture 1,00,000 vehicles by 2030. With a massive presence in Latin America, Chery Auto’s largest overseas market is in Russia. It has another unit in Brazil with a yearly production capacity of 1,50,000 units.
SAIC, another leading Chinese company, is now looking to set-up another unit in Europe for EV manufacturing. As of now, the company has three manufacturing units overseas in India, Thailand, and Indonesia. A year, China even overtook Japan as the global leader in car exports with a record of 5.26 million shipping units for $102 billion. The threat from China’s automobile companies have forced Japan’s Nissan and Honda to form a joint venture to develop auto intelligence and EV technology.
