In 2025, it’s expected that 1 in 4 new vehicle sales globally will be electric vehicles (EVs), a significant increase from 1 in 20 just five years ago. The International Energy Agency reports that two-thirds of fully electric cars in China are now cheaper to buy than their gasoline equivalents, with operating and maintenance costs already lower than gasoline models. China is leading the way in EV adoption, with over half of new vehicle sales being electric, and most EVs purchased in China are made there by companies like NIO, Xpeng, and BYD.
Chinese automakers are producing a wide range of EVs, from subcompact cars to luxury vehicles, with top safety ratings and competitive pricing. The success of Chinese EV makers can be attributed to factors like low labor costs, generous government subsidies, and significant use of industrial robotics. Companies like BYD are also driving innovation, with a new battery that can recharge in just five minutes and a product development process that’s half as long as global automakers.
Chinese EV manufacturers are eager to export their vehicles, with export markets developing in Western Europe, Southeast Asia, and Latin America. However, the US and Canadian governments have imposed tariffs of 100% on Chinese EVs, doubling their cost to consumers. This “tariff fortress” is protecting domestic automakers, but it’s also limiting the availability of affordable EVs in North America. Chinese companies produce several sub-$25,000 EVs, but the tariffs would remove the price advantage.
The article suggests that the US opposition to importing Chinese vehicles may eventually be overcome, just like it was with Japanese vehicles in the 1970s and 1980s. As Chinese automakers continue to innovate and improve their products, they may become more widely accepted in North America. With the average price of a new EV in the US being around $55,000, there is a need for more affordable options. Companies like Tesla, Ford, and General Motors claim to be working on inexpensive EVs, but the protection of the “tariff fortress” may reduce their incentive to develop cheaper models.