Taipei, Taiwan – American-Chinese rivalry has a new flash point in the battle for technological supremacy: electric cars.
So far, the United States has lost.
Last year, China became the leading world car exporter, according to China Passenger because Assn., Exceeding Japan with more than 5 million sales abroad. New energy vehicles have represented around 25% of these exports, and more than half of them were created by Chinese brands, a passage from the traditional assembly role that China has played for foreign car manufacturers.
“Great growth has occurred in the past three years,” said Stephen Dyer, head of the Asia Automotive and Industrials unit in Alixpartners, a consulting company. “With Chinese car manufacturers piercing during most of the market share, this is a huge challenge for foreign car manufacturers.”
The rapid expansion of China at the national level and abroad has added fuel to a series of clashes between the United States and China on trade and advanced technologies, because competition is intensifying between the two superpowers.
The United States has high goals to extend its own VE industry. California, which represented 37% of the country's electric car sales in 2022, aims at Eliminate purchases new cars running on fossil fuels by 2035.
The concerns of the supply of Chinese have occurred as is a wider slowdown in sales have struck the manufacturers of electric vehicles. Tesla announced on Monday that he Put into play more than 10% of its workforce in order to reduce costs and increase productivity.
In the latest report on the results of the company in January, the director general Elon Musk warned against the competitiveness of Chinese brands. Byd, the largest electric vehicle manufacturer in China, exceeded Tesla in car sales last year.
“If there are no established commercial barriers, they will demolish almost most of the other automotive companies in the world,” said Musk.
This year, Fisker Inc., based in Manhattan Beach, a startup of electric vehicles, reduced 15% of its workforce, had been radiated and said that it could deposit protection against bankruptcy. Apple has also recently announced the end of its long -standing ambitions to make an autonomous EV.
An area in which Chinese car manufacturers easily beat Western competitors are being price, thanks to government subsidies that have supported the initial increase in industry as well as cheap access to minerals and critical components such as lithium-ion batteries, which represent approximately a third of the overall cost of production.
“He has always made these ingredients wait,” said Cory Combs, associate director of Chinese energy policy of the Consulting Society Trivium China. “It was a kind of magical moment for these things to come together.”
This allowed the success of Byd, which began to produce lithium-ion batteries in 1996 and to make cars in 2005.
In March, Byd reduced the price of its cheapest EV model in China to less than $ 10,000. According to Kelley Blue Book, the average EV retail price is $ 55,343 in the United States, compared to $ 48,247 on all vehicles.
Although the pricing wars have forced Chinese car manufacturers to reduce the beneficiary margins at home, they can charge more in foreign markets, further encouraging exports as domestic growth has slowed down. According to the research office Givekal Dragonomics, the demand in China has cooled due to the abolition of tax alternatives and the increase in the use of post-paymic public transport.
“There is a ton of pressure, especially if you are a smaller player, to find a less competitive market,” said Combres. “And each market is less competitive than that of China.”
Although prices of 27.5% in fact locked Chinese electric vehicles on the American market, the fear that cheaper models could possibly undermine American car manufacturers have started to spread.
The Alliance of American Manufacturing warned in a February report that authorizing it Chinese electric vehicles in the country would be an “event at the level of extinction” for the American automotive industry. The group also cited the risks of construction of Chinese automotive companies across the border in Mexico which could bypass the prices.
When the global market is flooded by artificially cheap Chinese products, the viability of American companies and other companies is questioned
– Janet Yellen
After a trip to China in April, the secretary of the Treasury Janet L. Yellen expressed her concerns about the overcapacity funded by the government in the Chinese manufacturing of electric vehicles, batteries and solar panels. She noted that other advanced and emerging markets shared these concerns and compared the excess offer to a flow of Chinese steel at low cost hitting the world economy over ten years ago.
“When the global market is flooded by artificially cheap Chinese products, the viability of American and other foreigners is called into question,” said Yellen.
The European Union has opened an investigation into public subsidies used by the Chinese industry by China and if such support violates international trade laws.
The Chinese state news agency postponed overcapacity allegations in an April article, which said exports represented 12% of Chinese electric vehicle sales last year. It attributed the success of industry to competitive prices and technology, rather than government grants.
After meeting German Chancellor Olaf Scholz in April, Chinese President Xi Jinping has declared protectionism in other countries and said that exports from Chinese electric vehicles have contributed to facilitating global inflation and fighting climate change.
The way the United States tackles the emergence of the Evacre dominance of China has already become a hot button problem for the presidential election in November.
President Biden has encouraged internal expansion with the adoption of the inflation reduction law, which includes electric vehicle tax credits for American manufacturers, but not if they get minerals and materials of “worrying foreign entities”, like China. Meanwhile, the alleged republican candidate, Donald Trump, said that the manufacture of electric cars would reduce jobs in the automotive industry and called for a decline in policies adapted to electric vehicles promulgated during Biden's mandate.
Politicians of the two parties have offered even harder prices on Chinese manufacturing electric vehicles if they try to penetrate the American market, prioritizing the protection of American jobs on the objectives of reducing carbon emissions.
“This will make even more important for Chinese companies to set up local assembly operations in order to minimize these costs,” said Gregor Sebastian, principal analyst of the New York Rhodium Group research company. “Many companies adopt an expected approach.”
Even without Chinese automotive imports, vehicle technology has annoyed US officials. In March, Biden announced an investigation into Chinese manufacturing “smart cars” and data that internet -connected vehicles could collect on American users. The collaborations between American companies and CATL, the Chinese battery giant, were also subjected to a more meticulous examination, because the tensions between the two countries have worsened.
But China has spent decades to cement its status as a world leader in the purchase of minerals and develop critical technologies such as EV batteries while the United States has been late. This will now make it more difficult for Western car manufacturers to fully cut Chinese suppliers, said you, founder and managing director of Sino Auto Insights, a consulting company.
“If car manufacturers will build clean and clean energy vehicles this decade, the only way that occurs is to use Chinese batteries,” said the.
