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Chinese EVs Could Decimate U.S. Auto Industry

Posted on Tuesday, April 30, 2024
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by Ben Solis
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19 Comments
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AMAC EXCLUSIVE

Biden; Geely manufacturer of china logo; chinese EVs entering auto industry

In late March, the corporate media pounced on former President Donald Trump’s comment that a second Biden term would be a “bloodbath” for American auto manufacturers, falsely claiming that Trump said there would be violence in the streets if he loses this fall.

While the media was busy misconstruing Trump’s words, they completely ignored his warning for the U.S. auto industry. But just a few weeks later, Trump is already being proven correct.

According to reporting from Reuters on April 24, despite President Joe Biden’s promises to revive the American auto industry and keep Chinese vehicles off of U.S. streets, a made-in-China electric vehicle (EV) will hit dealership lots for the first time this summer. Volvo, a Swedish company owned by Chinese firm Geely, will begin selling Chinese-made EX30 EV SUVs this year – for about $8,000 less than Tesla’s Model Y, currently the world’s best-selling SUV.

Although Chinese vehicles are supposed to face a 27.5 percent tariff in the U.S. market, Volvo is likely eligible for tariff refunds because it has some manufacturing operations in South Carolina. Moreover, thanks to Biden’s 2022 Inflation Reduction Act, the EX30 could be eligible for a $7,500 tax credit – further undercutting U.S. brands like Ford and GM, which are already struggling to sell their electric vehicles.

Geely and other Chinese EV manufacturers have notably received lucrative subsidies from the Chinese government, allowing them to undercut U.S. and European countries. According to a recent report from the Alliance for American Manufacturing, the introduction of Chinese-made EVs like the EX30 “could end up being an extinction-level event for the U.S. auto sector.”

While Chinese companies are ready to flood the American market with cheap EVs, American brands have struggled to sell their electric vehicles at home and abroad. According to the most recent sales data from the China Passenger Car Association, Tesla and GM both saw declining sales in the first quarter of 2024. Ford and GM are also scaling back their production of EVs for the U.S. market.

Dr. Rolf Braunschweiger, a former advisor to the Federation of German Industries, told me that Trump’s warning about Chinese EVs was “absolutely correct.”

“Yes, undoubtedly, it would be a bloodbath for all of American industry, not just carmakers,” he said. “Manipulative currency depreciation, product price manipulation, subsidies from non-transparent financial institutions, and a cheap Yuan allows China to protect its domestic car market while increasing the profitability of exports at the expense of Western firms.”

The current situation in Europe presents a stark warning for the United States about the dangers of a flood of Chinese EVs.

Prior to the emergence of Chinese EV companies, any European company looking to enter the Chinese market was forced to form a joint venture with a Chinese company. As Swedish Professor Bjorn Skjeggestad explained, this resulted in “the costless transfer of the know-how and capital critical for production” from European to Chinese companies.

Volvo, Skjeggestad said, perfectly illustrates this strategy. “Along with opening its first production plant in Chengdu in 2013, Volvo has already shared nearly all expertise with Chinese partners as the law required,” he said, explaining that, in about seven years, Chinese business leaders had formed a new car-producing firm “that almost entirely drew upon Sweden’s hard-won mastery and proficiency.”

Now, Chinese firms are flooding the European market with cheap EVs subsidized by the Chinese government. “Unsurprisingly, their sales skyrocketed in Europe, with competitors being knocked out, and Europe has limited tools left to deal with it.”

A new analysis from the policy group Transport & Environment suggests that China will produce 25 percent of all-electric cars for sale in the European Union in 2025. Chinese brands such as M.G. and BYD already control twenty percent of the European market share.

European leaders are now scrambling to stop the bloodbath in their own auto industry, but it may be too late. The E.U. is even considering a 25 percent “retroactive” tariff that would attempt to force Chinese firms to pay for prior sales as a solution as European car companies cut hundreds of jobs.

Industry experts have warned that China has already launched plans to circumvent U.S. tariffs by building assembly plants in Mexico. Without a more aggressive approach to trade policy, Chinese automakers could soon enjoy the same hold on the American market that they have in Europe.

Despite the urgency of the threat, however, the Biden administration has been slow to respond. Dr. Braunschweiger told me that Chinese leaders have used Biden’s obsession with creating a so-called “green revolution” against him, arguing that China’s production capacity will “support the global energy transition.” This, he said, is “Biden’s Achilles heel.”

As long as Biden is in office, his climate agenda will provide ample incentive and opportunity for China to infiltrate and undercut the American market. When it comes to auto manufacturing, the United States is indeed facing a potential “bloodbath” if Trump does not emerge victorious this November.

Ben Solis is the pen name of an international affairs journalist, historian, and researcher.

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Max
Max
20 days ago

Oh well. Nations around the world are now realizing their errors of working together with the Chinese — loss of money and prestige as cheap Chinese products flood the world markets. Industrial espionage has its moments but shame on those who did not see the light when dealing with the Chinese. I am sure that the Chinese have their axiom saying for this situation and are laughing all the way to the bank.

Lover of God and America!
Lover of God and America!
20 days ago

BIDEN IS DOING HIS BEST TO SCREW THE UNITED STATES!

Joe
Joe
20 days ago

If you’re watching the conservative news, you’ll see reports that manufacturers and consumers are rejecting EVs. But, like the jab, Bozo Biden continues to push his false narrative. EVs are a farce that will do NOTHING to improve air quality. The US has cow towed to the tree huggers to improve our air quality. These creampuff climate-change snowflakes need to turn their attention to CHINA, which is smogged in. Better yet, they need to crawl under a rock. Remember the summer Olympics in China and how athletes were wearing masks during beach volleyball competition?

Joe
Joe
20 days ago

Hmmm TRUMP right AGAIN!

anna hubert
anna hubert
20 days ago

Detroit and auto industry died together when production went to Japan but brotherhood always supported dems Go figure

C Douthitt
C Douthitt
20 days ago

Um. Ford lost $1.3 BILLION on EV’s. That’s just FORD. America isn’t buying electric cars.

Bob L.
Bob L.
20 days ago

The Chicom EVs may knock a dent in Tesla’s sales, but the entire EV market is living on borrowed time and will die a natural death when the government’s unconstitutional interference in the free market gets spiked.
HURRY UP NOVEMBER!!!!

MamaBear007
MamaBear007
20 days ago

Gee, it’s almost as though Biden is still joined at the hip with the Chinese government. Who woulda thunk it? Oh yeah, Trump and everybody else with more than half a brain thunk it!

Stephen Russell
Stephen Russell
20 days ago

EV Issues:
Maintenace
Insurance
Range
Battery fires
Charging time
Lack commercial chargers
Poor Service
No service centers

Fredrick
Fredrick
20 days ago

The Chinese are getting their monies worth, out of their payoffs to Biden.

Kyle Buy you some guns,and learn how to shoot
Kyle Buy you some guns,and learn how to shoot
19 days ago

If the auto industry back’s biden, they are fools. Kyle L.

Kyle Buy you some guns,and learn how to shoot
Kyle Buy you some guns,and learn how to shoot
19 days ago

bUY ELECTRIC. gIVE IT MABY 2 YEARS and put it up on some concrete blocks.

Robert Zuccaro
Robert Zuccaro
19 days ago

I’m on a fixed income so if Joe wants me in an EV he better tell them to make one with a camper on it so I can live in it! Guess I could always occupy a university building and claim I’m “protesting Israeli divestment”… home sweet home!

Ted
Ted
13 days ago

Let the idiots worldwide buy the cheap junk, that way when the electrical grids can’t sustain all the junk cars they can ride a bike if they still have a job.

Lauramerrone
Lauramerrone
18 days ago

What an absolute mess…as usual. Our country is headed in the wrong direction… Glad we’re retired and don’t have to deal with it all any more…

orion
orion
19 days ago

I apologize for repeating a long used narrative in proper context describing this issue … but … I am not a fan of EV’s and my government trying to force EV’s on it’s citizens in the first place. I too am not a fan of most products manufactured in China …. except for an old television that surprisingly is 13 years old and still works … I avoid Chinese made products because they are generally made with cheap substandard parts, and an average lifespan of any product is usually 90 days, and 94 days is the average life cycle. So why would I buy a chinese built EV, that I despise my country for forcing down the throats of it’s citizens … and will likely extend the phrase ‘chinese junk’?

FedUp
FedUp
19 days ago

I’m sure ole Joe will get a commission / kickback on each unit sold.

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