The Automotive Cold War Is Officially Underway

Tim Levin reports via InsideEVs: Two things of note in the electric vehicle world happened today around the same time. First, the Geely Group-owned Chinese EV brand Zeekr debuted on the New York Stock Exchange today at a valuation of around $5.2 billion. Then, around 250 miles south in Washington, D.C., news emerged that the Biden Administration is set to quadruple tariffs on Chinese-made electric cars if they hit American roads. The timing may be purely coincidental. But after this week, one thing feels clearer than ever: the automotive Cold War between China and the West is fully underway, and EVs specifically are at the center of it all. The Wall Street Journal got the scoop that the White House plans to announce higher tariffs on Chinese clean-energy imports in the coming days. Under the reported new policies, tariffs on Chinese EVs are set to quadruple, rising from the current 25% to a whopping 100%, anonymous sources told the outlet. In theory, that would substantially increase the cost of any Chinese-made EVs on our market, including, potentially, ones sold by known Western and other Asian brands. It's no secret why the U.S. is attempting to push back on Chinese EVs, to say nothing of other clean energy imports from that country like solar panels. China has spent years aggressively building up its capacity to manufacture electric cars. It's developed a stranglehold on the supply chains for lithium-ion batteries and the critical minerals they contain. It has lavished state incentives on both EV production and purchasing. In recent years, the country has emerged as a global EV powerhouse -- and, for the first time ever, an exporter on par with leaders like Japan and Germany. Many still believe that China's cars are cheap and technologically subpar. But the truth is China has learned to build cars very, very well, as InsideEVs' own Kevin Williams discovered during a recent trip to the Beijing auto show. China's homegrown electrified vehicles range from the inexpensive -- some, like the BYD Seagull, cost less than $10,000 in their home market -- to higher-end, luxury-focused offerings like the Yangwang U8, a kind of plug-in hybrid competitor to the Mercedes G-Class that can "float" on water. From batteries to software, most are incredibly advanced. Car companies and policymakers in the U.S. (and Europe) say these cars pose a real threat to our nascent EV market, where many options still remain unaffordable and things like batteries and software are works in progress. In response, European Union officials have also launched investigations into Chinese imports that could lead to stronger tariffs. "In effect, the tariffs may end up buying the U.S. some time, rather than being a permanent solution here," concludes Levin. "After all, as Kevin Williams pointed out after going to Beijing: all of these crackdowns aren't guaranteed to yield better cars from Ford, General Motors and the rest." According to the WSJ, the new tariffs on Chinese goods will also apply to solar panels, batteries and critical battery minerals. They're expected to be announced as soon as next week.

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