Will We Ever Get Chinese EVs in the U.S.?
- China’s booming demand for EVs is supporting the development of numerous new brands.
- Chinese buyers bought 6 million EVs last year, 60 percent of the total global market.
- Many Chinese makers are now launching in Europe—but will any come to the States?
Walking around the vast Shanghai auto show last month was like passing into a parallel dimension for anybody used to the automotive landscape of the United States. Most of the global premium and luxury automakers were indeed present, trying to interest wealthy Chinese consumers in their products. But many of the exhibitors were completely fresh, stands packed with unfamiliar cars from unfamiliar brands. You might have heard of China’s better-known automakers like Geely, Great Wall, Nio, and BYD—the last short for “Build Your Dreams.” But what Aito, HiPhi, Lixiang, Ora, or Zeekr? All are becoming major players in their home market.
Many of the new Chinese brands are EV only, established to try and satisfy the seemingly insatiable appetite of the People’s Republic for electric models. Last year the Chinese bought nearly six million EVs, 60 percent of the total global production. This year’s numbers are already rising, with BYD now the world’s second-largest manufacturer, behind only Tesla. In the first quarter of this year BYD sold 260,000 electric cars, more than double the figure for the same period in 2022. Tesla built 440,000 vehicles globally in the same quarter, including many in China, but the gap is shrinking. While many of these EVs are low-cost models, many are also packed with technology and have range and performance comparable—or superior to—American or European alternatives.
Leading to the obvious question from the point of view of putative EV buyers in the U.S.—how long will we have to wait for some of these Chinese models to get over here.
The answer to that depends on your definition of what makes an automaker Chinese. The seemingly ever-expanding Geely Group already owns Volvo and Polestar, but although the fully electric C30 and XC40 Recharge that come to the States are manufactured in Europe, the closely related Polestar 2 that sits on the same CMA platform is built in Luqiao, China. So on that basis the race has already been won.
Further out, the Lotus Eletre, which we drove in prototype form last week—and which is also a Geely Group product—will be reaching the U.S. in 2024 from a factory in Wuhan. Another of Geely’s portfolio of brands, Lynk & Co, has been talking about entering the United States since 2018. Its original plan to start sales in San Francisco in 2020 didn’t happen, but Lynk hasn’t given up on plans to come here, and would likely launch with a range consisting entirely of Chinese-made EV models.
These imports will be made against a significant financial headwind. Cars directly imported from China to the States are subject to steep tariffs, currently 27.5 percent, with that figure having been dramatically increased under the Trump administration. That’s why both Volvo and Polester are planning U.S. production of certain models, but it is also why some Chinese companies are manoeuvring for easier entry. Geely acquired a 34 percent stake in Renault’s South Korean subsidiary last year, one that may ultimately allow tariff-free import of cars direct from Asia.
In Europe, where tariffs are far lower, automakers are already bringing cars direct from China. Many of these are the result of joint ventures, like the one between Geely and Daimler to build the new electric-only Smart models, the #1 that we drove last year already being on sale in Europe—although there are no plans to bring it back to the U.S.
Mini is also set to produce its forthcoming J01 EV hatchback in China, where it will be built by partner Great Wall. The new Mini E will be sold in Europe and some other markets, but we don’t know if any China-built versions will reach the ‘States.
The bigger and tougher ask is whether any of China’s own automakers will launch in the U.S. under their own names. Many want to. Nio has been open about its ambition to launch in the States since it produced its first car in 2018, and is currently jointly listed on the New York Stock Exchange, although it is reportedly at risk of being thrown out for not following U.S. financial data standards. Other Chinese domestic automakers including Beijing Auto, BYD, Great Wall, and SAIC have previously opened U.S. offices with a view to expanding here, although none have done more than that yet.
Yet in Europe several of the Chinese makers are already doing brisk business. The first to enter was MG, the one-time British sportscar brand that was absorbed into the vast SAIC conglomerate when MG Rover collapsed nearly 20 years ago. New era MG has been selling both combustion and electric cars in Europe, and was the second biggest selling EV brand in the UK during the first quarter of the year.
In Italy a company called DR Automobiles sells rebranded vehicles made by Chery in China, shifting nearly 25,000 last year. Other manufacturers including Aiways, BYD, Honggqi, Nio and Ora—producer of the strangely named Funky Cat—have also made cautious entries to the European market.
Continuing political tensions between the U.S. and China probably turn the question of what American buyers would make of Chinese brands a moot one—although with lower import taxes many would offer a compelling combination of price and performance. That’s already obvious on the other side of the Atlantic where several European automakers are lobbying for steeper tariffs on Chinese imports, where they are currently set at 10 percent. Last year Stellantis boss Carlos Tavares explicitly lobbied for these to be dramatically increased to protect Europe’s manufacturers, an implicit acknowledgement that the continent’s home-grown EVs often look expensive and short on range compared to Chinese imports.
Because the reality is, whether we like it or not, China is now leading the way on electrification, both in terms of market demand and technology.
Have thoughts on the Chinese electric vehicle industry, the vehicles you wish to see, and the brands that may have the best shot at making it on these shores? Share them in the comments below.