Although no Chinese vehicles are currently up for sale in the United States, the Biden administration is reportedly going to impose a 100 % tariff on imports of Chinese electric vehicles ( EV ).
If they were, they may love the American contest, even with the present 25 % price. Chevy’s Bolt, a basic EV with a US$ 29, 000 sticker price, has the same length and less range than the Dongfeng Nammi 01 vehicle priced at merely$ 11, 000.
If China wanted to fight against the novel American tariffs, it has a objective- rich culture. In China, General Motors sold 2.1 million vehicles next month. In most ages, GM sells more cars in China than in the United States.
China has a good chance of avoiding the British levies. The country’s auto exports are expected to increase by 22 % in 2024, up from more than 60 % in 2023, with East Asia and the Middle East experiencing the strongest growth.
Henry Ford’s Model T sold for$ 850 in 1908, around the US per capita GDP at the time. By 1925, the price had fallen to$ 260 thanks to economies of scale. This time size is being compressed by China’s electric car manufacturers, which means it will cost as little as Ford decades to lower the cost.
At a$ 10, 000 or lower cost place, desire for Chinese Vehicles in the World South is essentially endless.
American, Asian and South Asian automakers depend on Foreign automotive technology. However, GM is negotiating with China’s largest battery manufacturer CATL to develop a cooperative mega-plant in the United States and license Foreign technology for its own EVs.
Ford made plans to build a Michigan plant in a$ 3.5 billion joint venture with CATL last year, but the project was put off because of political pressure.
In addition, Nissan Motor has partnered with China’s Google to work with Tesla, Hyundai, and Kia on AI modelling and location.
With 3.4 million 5G basic facilities installed versus America’s 100, 000, China is also well positioned for autonomous driving.
Low overhead ( almost instant reaction ) and large data capacity on 5G networks —ubiquitous in all Chinese cities—support unnatural Intelligence applications for AVs as well as injury prevention. Chinese cities, also, feature new sidewalks conducive to autonomous driving.
Chinese automakers can buy cars for much less than their British competitors thanks to scale-up production and standardization of parts.
The difference between American and Chinese workers costs explains a small portion of the price difference because labor costs only account for 7 % of the total price of an American car.
In China, more than 100 manufacturers are competing for market share, but the majority of them use defined elements to lower costs.
Automotive expert Alan Smith stated in a LinkedIn post that “every car manufactured or sold in the United States today ( with the exception of Tesla and a select few imported from China by GM ) is produced using a pieces churning manufacturing method, which requires them to be replaced with new, non-interchangeable sections that offer no advantage over the past part.”
” Western automobile makers churn parts – use proprietary, non- standard, non- interchangeable parts which are churn producing vehicles that are more expensive, more prone to defects and become manufacturer specific mini- monopolies”, Smith explains.
That used to be called planned obsolescence. In 1922, Henry Ford alleged that his rivals would” change the designs so that old models will become obsolete and new ones will have to be purchased either because the old model offers a new sales argument that can be used to persuade a consumer to scrap what he has and buy something new.”
In contrast, Ford, who had already sold Model Ts for only 30 % of the starting price in 1922, asserted that” the parts of a particular model are not only interchangeable with all other cars that we have produced, but they are also interchangeable with similar parts on all of our turned out.”
According to Smith, Tesla and other Chinese automakers adhere to the Ford design philosophy that made the Model T a universal vehicle.
Biden’s tariffs, at the expense of American consumers, preserve the auto industry’s monopoly practices. On March 18, former president Donald Trump added that Chinese automakers would be welcome to plant factories in the United States and that he also proposed a 100 % tariff on imported Chinese-made electric vehicles ( EVs ), as well as imports from Chinese manufacturers in Mexico.
The global supply chains have been redirected to third countries as a result of US tariffs on Chinese goods. As the chart shows, China’s exports to the Global South are in line with American imports. America’s trade deficit in goods is at a record of around$ 1 trillion a year.
Chinese manufacturers invest in Vietnam, Mexico, Indonesia, Brazil and other venues, and assemble Chinese parts with Chinese capital goods into finished products for the US market.
Follow David P Goldman on X at @davidpgoldman