The News
Chinese electric vehicles will likely continue to dominate the global market even after some countries — particularly the US — have imposed tariffs and other restrictions to boost their domestic competition.
European Union officials are poised to also increase the import tax on Chinese EVs, and the US has set a 100% tariff. Though very few EVs have been imported to the US from China, their low starting price means that even with the 100% tariff, some Chinese companies’ EVs may remain cheaper than even the lowest cost US equivalents, an industry researcher told Nikkei Asia.
At the same time, other international markets are opening up to China: Egypt has completely removed tax on China’s EVs, and Chinese EV company showrooms are popping up across Africa.
SIGNALS
China’s EV battery production remains unmatched
China’s dominance is owed to its ability to produce low-cost EV batteries, while the US and other countries have lagged in developing their own supply chains to compete. China controls the majority of the world’s cobalt and lithium mining industries, both essential minerals for batteries. Heavy investment in research has produced cheaper and better batteries and battery parts that global EV makers now rely on, The New York Times noted. Batteries reflect 30% of the total cost of manufacturing an EV, and US imports of Chinese-made batteries totaled $6.2 billion in the first half of this year, Nikkei Asia reported. By 2030, China will make more than twice as many batteries as all other countries combined, according to consulting group Benchmark Minerals.
Compared to Beijing, US and EU lag on aids to industry
While the US has looked to remain competitive in its local transition to EVs, by providing large amounts of government aid to electric carmakers in recent years, China retains a “wide lead” after a “decade-long national effort” to grow their EV industry, according to Nikkei Asia. Meanwhile, Beijing has also boosted China’s EV industry with more than $231 billion over the last 15 years, Bloomberg reported, a “conservative” estimate that doesn’t include the benefits of low-cost land and alleged forced labor. Still, the US has provided “lavish” subsidies to green manufacturers compared to the European Union — which is set to increase its own tariffs on Chinese EVs to 35% — where the annual climate investment deficit is estimated to be around €406 billion.
Chinese EV companies see a new market in Africa
Chinese EV giant BYD recently opened its first showroom in Zambia, a sign of its growing ambition in Africa as an emerging market for EVs outside the West. While the continent’s EV market remains small by global standards — barely 900 EVs were sold last year in South Africa, one of the continent’s biggest economies — BYD’s growing footprint points to the region’s potential. A Shanghai-based company, Hozon Auto, plans to expand to more than 100 stores across the continent, with annual sales expected to exceed 20,000, a Hozon manager told Chinese state news outlet, The Global Times. Meanwhile, Egypt has announced a zero-tariff policy to boost Chinese EV sales.