News recently broke that the Biden administration plans to jack import taxes up on Chinese EVs, raising them from the current 25% to 100%. This would double the price of Chinese EVs, which would also not be eligible for federal point-of-sale tax credits. This move is obviously meant to protect domestically-produced EVs from far cheaper competition, giving the U.S. EV industry a chance to get established instead of letting consumer demand all get slurped up by Chinese companies.
That can’t keep the pressures away forever, though. Even if Biden’s moves quell EV demand for years, Biden wins the election, and the tariffs manage to stay for another four years, the rest of the planet is going to be moving toward EVs regardless of how slowly a transition goes in the United States. Eventually, cheap EVs are going to be available from Europe, Japan, and Korea. Can we slap them with 100% tariffs too? No way! Sooner or later, EVs are going to come in and destroy the ICE market.
The biggest mistake non-Tesla manufacturers can make is to try to follow Tesla down the cost-cutting road. Things like eliminating stalks, going buttonless, and moving to cast frames might work for Tesla, but the portion of the market that wants an iPhone on wheels that can’t be easily repaired isn’t infinite. If nothing else, regulators and insurance companies will ruin that party as safety issues mount and soaring repair bills drive up premiums.
We can already see manufacturers doing this with trucks and SUVs. We’ve already seen Ford, GM, and Dodge stop selling utilitarian sedans altogether, instead favoring trucks and SUVs while keeping a few performance cars around. Import brands from Europe and Asia are already taking the budget car market, and domestics just aren’t interested in that anymore.
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Source: cleantechnica - 🏆 565. / 51 Read more »