Why EV Tariffs Won’t Stop Chinese Cars – CNBC

By Joel Wong

A recent CNBC report highlights China’s rise as the world’s leading auto exporter, boasting a production capacity that dwarfs competitors like the US. In 2023 alone, China shipped a staggering 5 million vehicles to over 100 countries.

This surge reflects China’s growing influence in the global auto market. Interestingly, a survey reveals a surprising trend – 76% of young American consumers (under 40) express interest in Chinese cars, despite concerns about privacy and tariffs. While established Chinese-owned brands like Volvo and Polestar have entered the US market, truly homegrown Chinese automakers are yet to arrive. Experts believe it’s only a matter of time.

While President Biden imposed tariffs on Chinese-made cars, industry insiders warned this might be a short-sighted strategy. Chinese automakers, fueled by global expansion ambitions, are determined to crack the US market with competitive offerings. Tariffs alone might not be enough to curb their progress.

The report proposes alternative strategies for the US auto industry to stay competitive:

Embrace Openness: Leverage the benefits of globalization by adopting policies that encourage knowledge and technology transfer from China.
Strategic Partnerships: Allow Chinese companies to enter the US market, potentially through joint ventures and mandatory US manufacturing, to capitalize on their innovations.
Innovation Focus: Prioritize development of high-quality, technologically advanced, and affordable vehicles that resonate with consumers.
Tech Collaboration: Partner with tech companies, invest in cutting-edge technologies, and forge strategic alliances to stay ahead of the curve.
Understanding Consumers: Cater to evolving consumer preferences, especially among younger generations receptive to Chinese cars, by offering attractive products and services.

By implementing these strategies, the US auto industry can effectively compete with China’s growing presence in the global market.