Even with the new 100% tariff on electric vehicles imported from China, BYD would still have the cheapest EV in the US. According to a new report, BYD’s lowest-priced EV would still undercut all US automakers at under $25,000.
After discontinuing the production of vehicles powered entirely by internal combustion engines in March 2022, BYD has been at the forefront of the industry’s shift to EVs.
Honestly in my opinion it is time to remove all tariffs on EVs under 25k and let anyone who wants to fill that slot in. American car manufacturers refuse to fill the market need.
One essential thing bears repeating: it’s not the manufacturer that bears the cost of tariffs, it’s the customers. Or said another way, if BYD cars double in price in the US, it’s American customers who will pay the difference.
A certain presidential candidate loves to beat that drum but consistently fails to mention that the immediate effect of new tariffs is making Americans poorer.
There are some situations where imports being cheaper is due to foreign government subsidies undercutting local production and tarrifs are the wat to level the field. Frequently this gets warped into protectionism, allowing local production to have a leg up while continuing their crappy business practices, like most US auto manufacturers.
In this case the 100% tariffs is mostly the latter. It was not a thought out rate based on any kind of logic, just an emotional overreaction.
We do not need someone in office proposing reactionary, emotionally based tax policies.
??? China has literally been subsidizing BYD to help it to beat out foreign manufactures and to make it competitive in foreign markets. So yeah, there may be some protectionism involved, but there is definitely an argument that China is unfairly subsidizing BYD, making it impossible for rival companies to compete.
https://electrek.co/2024/04/12/china-gave-byd-an-incredible-3-7-billion-to-win-the-ev-race/
And we’ve been subsidizing ours too. We just do it differently than straight up handing them money. (Although we’ve done that before too)
The main issue is that China seems to subsidize BYD quite a bit more than other countries do. In addition, this seems to match China’s general policy of finding ways to give its own companies advantages in foreign markets, while limiting the equivalent from other countries
Yes, yes, yes.
But why does the West, which has been technologically ahead the entire time, can’t produce a cheap simple EV?
Like sure, China is propping up their shit maybe more than the West is, but why can’t we get one small inexpensive simple car?
It’s because the so-called “subsidies” from the Chinese government are much more than the “subsidies” wielded by the American government. In America a subsidy amounts to throwing money and tax breaks at corporations and asking them to make something with it - but Chinese subsidies are direct investments, with the government controlling how the money is spent and staying involved every step of the way. That’s why they turn so reliably into increased production and reduced prices while our own subsidies tend to turn into stock buybacks.
There’s really no practical reason why the US couldn’t adopt a similar industrial policy - imagine going to GM/Ford/Chevy and paying them to build new EV factories in Detroit, directly overseeing the whole process from start to finish, and leaving behind government representatives at all levels of the factories’ operation - but the reason we don’t do it is pretty much purely ideological.
Most of the subsidies that article was talking about are actually domestic buyers subsidies.
But wouldn’t that be communism?! We wouldn’t want that! 😱
I mean the tech is still new as well as the point that SSJMarx mentioned. To add to the list of reasons to make expensive version of cars first:
I do expect that over time manufactures will begin to release cheaper EVs over time that are aimed for average consumers.
I’m sorry, but that makes 0 sense.
Not everyone can spend 20k, so let’s make 100k cars?
And when China is selling such cheap cars, let’s stop them too, because there is no demand?
There is nothing logical about your arguments.
The reason we stop China is not related to supply and demand so much as stopping companies that China has given unfair advantages to. If BYD was making cars without signifcant Chinese subsidies, then yes I would be bothered by these tariffs as well.
The person who buys $100k cars isn’t going to be shopping in the $20k car market. This $20k EV already exists as the Nissan Leaf and it sells like shit because people don’t really want a stripped-down, barebones car. Teslas’ cheapest cars are twice the price and outsell it by several orders of magnitude.
We’re stopping China from selling cars here because they’re selling $50k cars for $20k which is a big problem for everyone but China.
There is logic to their argument. I think you just don’t understand the situation very well.
Pretty sure other incentives have been implemented for other car companies like tax rebates. Let’s not forget the fossil fuel industry being subsidized still…
Those incentives don’t just apply to US companies only which is what China is doing with their state-owned companies.
You’re correct, but what I was, not clearly, talking about is increasing the incentives so its easier for people to purchase electric vehicles. You do bring up a good point that fossil fuel subsidies should also be reduced to better reflect its true costs.
During global boiling crisis we should completely reverse and start taxing fossil fuel
The complicated thing about that is it will harm your average worker until cheap alternatives are available.
?? Then why tarriff EVs?
I agree with you there!
Yes, that is a reason for having tariffs to offset the government subsidy. But “100% tariffs” instead of one set based on the actual impact of the government subsidies is an emotional overreaction.
What would be the alternative? China is no releasing numbers to how much they subsidize BYD, I doubt BYD would want to be that transparent either.
From my point of view the US could either wait, try to study and figure out the puzzle for how much China subsidizes BYD in order to come up with a good tariff amount, all while China still accomplishes its goals, or they can put tariffs now and make adjustments later. For all we know, 100% tariff may be too low, we don’t know for certain.
Let me know if there’s a better plan that’s being talked about.
The 100% tariff was Trump spouting the first thing that came to his lips during the debate. It was stupid and as you pointed out, it might not be high enough depending on subsidies received by BVD. Or it could be way too high, because of the reduced costs to manufacture like most things we buy from China.
A better plan is for knowledgeable experts to evaluate the situation and set tariffs, which is the normal process.
Or the other option, subsidize American EVs. They’ve been trying to do that, but pretty half assed, to the point where only Tesla and a few Chevys qualify.
My understanding is that the subsidize are to also encourage american manufacturing which those companies you listed satisfy. These subsidies are incentives for manufacturers rather than buyers, as it encourages these companies to change their manufacturing process which would lead to reduced costs.
Yeah, tax incentives and consumer rebates won’t encourage investment in American EV manufacturing capacity because they could disappear overnight and the extra capacity would then be wasted.
Free money to build new factories will do it though, and that’s what Uncle Sam has been spending on - its less risky to tool up a factory for mass production of a low margin family sedan when somebody else is paying for the tools and you won’t lose money if your new model sedan doesn’t sell enough units to cover the one time factory startup costs.
What US manufacturers? There is only GM, Ford, and Tesla left. People are so ignorant of the market here while simultaneously telling us all “how it is” with their strong, uninformed opinions.
The point of tariffs like that is to allow us made vehicles be the option of choice to buy.
The $25,000 ev means it’s a cheaply made car at what would have been an awesome price at $12,500, but not so great at $25,000.
American manufacturers could/would never be able to compete against a $12,500 ev sedan. So the tarriff keeps American evs bloated prices from looking too unreasonable. They can still compete against a $12,500 car being sold for $25,000
The higher price point caused by passing on the tariffs to consumers hurts the manufacturer through reduced sales.
Tariffs do hurt companies by driving potential sales elsewhere.
Or they would, if the product wasn’t still the cheapest available by 10-30% after the tariffs.
And the locals that lose their means of providing for themselves.