China's electric vehicle market is growing rapidly. China's new electric vehicle sales are expected to increase by 82% in 2022, accounting for about 60% of global EV purchases. There is an uproar across the world due to the continuous growth of China's electric vehicle market. From America to the European Union are scared of this.
In recent times, China has made rapid progress regarding electric cars. Due to which there is an uproar in the EV market across the world. A few days ago, former US President Donald Trump also gave a controversial statement regarding this. Due to which now the entry of Chinese electric vehicles in the American market may be difficult. He had said in one of his campaign speeches that he would impose 100% tariff on vehicles made by Chinese companies in the American market. Not only this, he also said that if there is no victory in the elections, there will be bloodshed in the American auto market.
Trump's comments reflect widespread concern that China's growing electric vehicle (EV) market is at risk. China's EV vehicles dominate the markets due to their pricing. With large-scale manufacturing and better access to raw materials and batteries, Chinese EV manufacturers have been able to produce cheap EVs that can outperform Western EV manufacturers.
This is why there is an uproar
Chinese EVs have scared off Western manufacturers more because of their cheap prices than safety concerns. Bloomberg recently reported that Chinese EV vehicles have created an atmosphere of fear among American automakers like Ford and GM. BYD's sub-$10,000 Seagull electric car sets a new benchmark for global automakers, forcing America's auto hub Detroit to turn to affordable rides.
BYD doesn't sell in the US, but affordable Chinese EVs like BYD's Seagull hatchback are signaling a future threat to American automakers. According to Bloomberg report, the best feature of the car is its $9,698 price. BYD, the Shenzhen-based company backed by Warren Buffett's Berkshire Hathaway, is set to overtake Tesla to become the world's largest electric vehicle maker by the end of 2023.
Right now the tariff in America is this much
Chinese cars imported into the US face a 25% tariff, but cars imported from Mexico, which are made with Chinese parts, pay a 2.5% tariff due to the US-Mexico-Canada trade agreement. Although BYD has no immediate plans to sell in the US, it is considering setting up a manufacturing plant in Mexico.
In February, Tesla CEO Elon Musk warned investors in an earnings call that Chinese EV companies would “demolish” their Western rivals if BYD overtook Tesla.
China dominates the EV battery market
According to data from market tracker SNE Research, six of the top 10 companies in global battery use last year were Chinese, accounting for about two-thirds of the global lithium battery market. Of these, CATL and BYD have more than half of the market share. China also has the largest global stake in manufacturing some of the key materials used in EV batteries. This includes 65 percent of the world's lithium, 74 percent cobalt and 42 percent copper processing units. It is the only country that processes graphite, another key component of EV cells.
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