The news that Chinese electric-car company BYD had overtaken Tesla as the world’s top Electric Vehicles maker came, appropriately enough, just as the Year of the Dragon got underway.
Yet as BYD gobbles up global market share, America should beware the three heads of this dragon—spying on Americans, potentially disabling U.S. vehicles on the road, and undercutting the domestic Electric Vehicles industry.
The Chinese Communist Party controls all major Chinese companies, and America should not join the global rush to give the CCP power over a vital economic sector. Indeed, America should ban the sale of Chinese Electric Vehicles—both those made in China and those made in other countries such as Mexico.
Spying. Americans were concerned in February 2023 about a Chinese spy balloon moving from Alaska to Montana to the East Coast. It was shot down in South Carolina. The balloon, 200 feet tall and weighing over 2,000 pounds, contained solar panels and equipment to collect sensitive information.
Chinese Electric Vehicles could be equipped with even more powerful spying equipment. They could go anywhere, including military bases, power plants and cellphone towers.
Electric Vehicles would be far more effective than spy balloons at collecting important data, and at far lower cost—because Americans would be purchasing these vehicles. For similar security reasons the Federal Communications Commission banned Huawei and ZTE technology in 2022.
Chinese Electric Vehicles would also allow the CCP to have an unprecedented trove of Americans’ personal data. When people buy cars, they provide information on addresses, driver’s licenses, credit cards and insurance. If they get loans, the company can access credit history, including mortgages, other loans and additional credit cards. America should not give this to the CCP.
Disabling Vehicles. Just as General Motors’ Onstar program advertises that it can stop or disable stolen vehicles, America should not give the CCP power to stop or disable Electric Vehicles driven in America. Onstar can remotely activate emergency flashers. It can use GM-trademarked Remote Ignition Block™* to stop engines from starting and Stolen Vehicle Slowdown® to slow the car. If Onstar can do this, Chinese car companies undoubtedly have the technology—as well as potentially disabling braking and navigation systems.
Undercutting U.S. Electric Vehicle Incentives. The 2022 Inflation Reduction Act contained over $1 trillion in clean energy initiatives to fund EV and battery manufacturing plants and consumer tax credits to develop a domestic Electric Vehicles industry. But CCP subsidies for Chinese Electric Vehicles can undercut these programs and American Electric Vehicles production, contrary to congressional intent.
China has lower costs for labor, both due to its low-wage workforce and from the use of child labor and slave labor in Xinjiang; lower costs of energy, because China has fewer regulations on pollution and relies on domestic coal; and lower costs of capital, because the CCP gives low-rate financing to favored companies. China controls 60% of the world’s critical battery minerals, and produces 80% of the world’s batteries.
Due to these advantages, Chinese Electric Vehicles have been expanding globally. Chinese companies include BYD, Nio, Chery, Geely, SAIC and Great Wall. China exported 5 million vehicles around the world in 2023, and is now top in global vehicle exports. At the same time as China is expanding, Jeep has left China, and sales of GM and Ford vehicles in China are half of what they were in 2017.
BYD, which sold 3 million cars last year, is hoping to undercut German automobile manufacturers with its $11,500 Seagull. Its $33,000 Dolphin is one of the cheapest new cars in the U.K. It’s expanding to Scandinavia, Asia and Australia. It’s even marketing $40,000 EVs in South Africa, which suffers from perennial blackouts.
Geely now owns Volvo, and SAIC has taken over the U.K.’s MG. Chery expects to open 50 showrooms in the U.K. in 2024 and sell 15,000 cars, overtaking Jeep, Jaguar and Suzuki.
Michael Dunne wrote last month in Automotive News, “China’s Electric Vehicle and battery production is 10 times greater than that in the U.S…. BYD produced 76,800 EVs in the last week of December while GM built 75,883 in all of 2023.”
While China has an advantage in small EVs, U.S. companies dominate in larger vehicles such as pickup trucks and SUVs. But American companies are being pressured by their regulators, the U.S. Department of Transportation and the Environmental Protection Agency, to focus on electric vehicles rather than the cars their customers want to buy.
Regulations to require 60% of new vehicle sales to be battery-powered electric in 2030 and 66% in 2032 are now at the White House under review before expected release in March.
America can’t have it both ways. Mandating EVs without banning imports from Chinese companies, both those located in China and elsewhere, will give the U.S. auto market to the Chinese, in the same way as Chinese companies are taking over auto markets globally. And allowing Chinese Electric Vehicle imports poses major national security threats, as well as giving the CCP control over the U.S. economy.
Watch out, America, because the Dragon is coming for our cars.
Diana Furchtgott-Roth is Director of the Center for Energy, Climate and Environment and the Herbert and Joyce Morgan Fellow.
Reprinted with Permission from Heritage.org – By Diana Furchtgott-Roth
The opinions expressed by columnists are their own and do not necessarily represent the views of AMAC or AMAC Action.