Despite a 100% tariff set to take effect in late September under US President Joe Biden’s administration, many Chinese electric vehicles (EVs) will still be priced lower than their American counterparts.
For example, even with the tariff, a Chinese-made BYD electric car priced at $12,000 would remain significantly more affordable than a Tesla, which typically starts much higher, according to industry research reported by Nikkei Asia.
This price gap is largely due to China’s ability to produce low-cost EV batteries more efficiently than the US, where domestic supply chains for such technologies are still underdeveloped. Over the last 15 years, Beijing has heavily subsidized its EV industry, with over $231 billion in support, not counting additional advantages like low-cost land and alleged forced labor, according to a Bloomberg report.
China’s Ministry of Commerce has criticized the new US tariffs, expressing strong dissatisfaction and opposition to the measures. The ministry called on Washington to reverse its decision, warning that the tariffs would disrupt global supply chains and raise prices for US consumers and businesses without improving American competitiveness. Beijing has signaled that it will take steps to defend its industries in response.
The tariffs are part of a broader US strategy to reduce reliance on Chinese imports in high-tech sectors, including electric vehicles, semiconductors, and photovoltaic cells. However, some analysts argue that the tariff increase may not achieve the desired outcome of strengthening US industry, as Chinese EVs remain competitive in price even with the additional costs.
With input from Semafor, and South China Morning Post.
