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.
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.