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Tingshu Wang

It was long thought that wealthy countries would lead the electric vehicle revolution. Oil-rich Norway was often, ironically,<a href="https://www.washingtonpost.com/climate-environment/2021/02/06/auto-industry-peers-into-an-electric-future-sees-bumps-ahead/" target=_blank> </a><a href="https://www.washingtonpost.com/climate-environment/2021/02/06/auto-industry-peers-into-an-electric-future-sees-bumps-ahead/" target=_blank>held up as a beacon</a> of what the transition to EVs could look like. In the United States, Teslas and pricey electric BMWs have become a status symbol.

But in parts of the Global South, EV uptake is surging and, in some countries, keeping pace with that of the United States. The silver bullet: cheap, high-quality Chinese EVs.

“Up until a couple of years ago, there was this common narrative that electric vehicles were the kind of technology that was going to first do well in the Global North and then trickle down to the Global South,” said Ilaria Mazzocco, a senior fellow at the Center for Strategic and International Studies. “And the automakers believed this. Experts believed this. I certainly believed this as well.”

Chinese automakers, she said, “have completely upended this belief.”

The affordable vehicles — many of them made by Chinese auto giant BYD — can be seen on roads from Brazil to Colombia to Vietnam. In Thailand, 1 in 10 cars registered there last year was electric, on par with the share of EVs in the U.S. car market, according to a <a href="https://www.iea.org/reports/global-ev-outlook-2024/trends-in-electric-cars" target=_blank>report</a> last month by the International Energy Agency. “Chinese companies account for over half the sales to date, and they could become even more prominent” in Thailand, the report said, as BYD is set to begin operating production facilities in the country this year.

China’s EV prowess is on display this week at the Beijing Auto Show, where Chinese automakers like BYD, Nio and Xiaomi, more known for its smartphones, brought home the point that while the rest of the world may be planning for an electrified future, China is already there.

“If you come here, you should have no doubt about EVs anymore,” William Li, Nio’s founder and chief executive, <a href="https://www.reuters.com/business/autos-transportation/chinas-largest-auto-show-showcases-all-electric-future-local-brands-dominate-2024-04-25/" target=_blank>told</a> Reuters. “It is actually not the future but is what’s happening right now.”

The transition from combustion-engine vehicles to electric ones is a boon for middle-income countries, where air quality is often a concern. In turn, it’s a tool for battling climate change globally.

But the cheap climate-friendly cars have presented a paradox for <a href="https://www.washingtonpost.com/elections/candidates/joe-biden-2024/" target="_blank" class="contextual_link">President Biden</a>. The Biden administration has made combating climate change a key policy priority. As my colleague Maxine Joselow reported in March, the Biden administration’s Environmental Protection Agency is <a href="https://www.washingtonpost.com/climate-environment/2024/03/20/biden-car-emissions-rules/" target=_blank>nudging the U.S. auto industry toward electrification</a>: “The Environmental Protection Agency rule — President Biden’s most far-reaching climate regulation yet — will require automakers to ramp up sales of electric vehicles while slashing carbon emissions from gasoline-powered models, which account for about one-fifth of America’s contribution to global warming.”

And a new <a href="https://www.washingtonpost.com/climate-environment/2024/04/27/ev-tax-credit-discount/" target=_blank>change in U.S. tax policy</a> allows a hefty credit on certain electric vehicles to be taken off the car’s price upfront rather than during tax season. But the cars must undergo final assembly in North America — ruling out Chinese vehicles, which are subject to an additional 25 percent tariff on top of the 2.5 percent tariff on imported cars, a Trump-era imposition that the Biden administration maintained.

“These cheap electric vehicles would absolutely increase the uptake in electrification in the United States and elsewhere. That’s really where the dilemma lies,” Mazzocco said.

The average cost of an EV in China is about $30,000 — half the average cost in the United States, according to an <a href="https://www.bloomberg.com/news/articles/2024-03-18/chinese-ev-affordability-frightens-ford-gm-us-automakers" target=_blank>analysis </a>by Bloomberg News, which notes that BYD’s Seagull hatchback sells for less than $10,000.

“There are few things that would decarbonize the U.S. faster than $20,000 EVs,” David Autor, an economist at the Massachusetts Institute of Technology, <a href="https://www.theatlantic.com/ideas/archive/2024/04/biden-trump-chinese-cars/678093/" target=_blank>told</a> the Atlantic’s Rogé Karma. “But there is probably nothing that would kill the U.S. auto industry faster, either.”

The picture is already a bit bleak for EVs in America’s auto industry. Automakers including Ford and GM are scaling back on EVs, hoping that plug-in hybrids — a solution for Americans worried about electric-only range between charging stations — will help bridge the gap between a gas-powered present and an electrified future. Tesla, which sells only electric vehicles, has cut prices as it faces falling sales. Rivian, a California-based maker of electric SUVs, said in a <a href="https://assets.rivian.com/2md5qhoeajym/2Q0NcEACrvGFosLhpyR15H/bfe2aa72cb657c4cebb9f4a85e913f07/EX_-_99.2_4Q23_Shareholder_Letter_Final_Compressed.pdf" target=_blank>letter </a>to shareholders that it lost $43,000 on each vehicle it delivered last year.

Such is the predicament Biden finds himself in: electrify America’s roads faster with cheap Chinese EVs or safeguard the nation’s auto industry. For now, he has chosen the latter. Biden said in a February <a href="https://www.whitehouse.gov/briefing-room/statements-releases/2024/02/29/statement-from-president-biden-on-addressing-national-security-risks-to-the-u-s-auto-industry/" target="_blank">statement</a> that “unfair” Chinese policies — Beijing is thought to stand up China’s auto industry with subsidies and injections of capital — “could flood our market with its vehicles, posing risks to our national security. I’m not going to let that happen on our watch.”

The risks extend beyond the potential impacts on the U.S. auto industry, and in turn the U.S. economy, according to Biden. “Connected vehicles from China could collect sensitive data about our citizens and our infrastructure and send this data back to the People’s Republic of China. These vehicles could be remotely accessed or disabled,” he said in the statement.

In keeping Chinese EVs out of the United States, Biden finds himself on rare common ground with his opponent in this year’s presidential election, <a href="https://www.washingtonpost.com/donald-trump/" target="_blank" class="contextual_link">Donald Trump</a>. The former president has warned of a “bloodbath” should Chinese EVs enter the U.S. market and has proposed a 100 percent tariff on the vehicles. As such, it appears that regardless of who wins in November, you probably won’t see swarms of Chinese EVs on American roads anytime soon. (One exception is Volvo, which has found a workaround to the steep tariffs on its Chinese-made EX30 model — one of the most affordable EVs on sale in the United States, starting at less than $35,000 — because it has manufacturing operations in the United States, Reuters has<a href="https://www.reuters.com/business/autos-transportation/how-volvo-landed-cheap-chinese-ev-us-shores-trade-war-2024-04-24/?utm_source=Sailthru&utm_medium=Newsletter&utm_campaign=Daily-Briefing&utm_term=042424&user_email=b1f33c724f72e6ae81530a646d129e79a9988a48c9ad389eee85b1a662118766" target=_blank> </a><a href="https://www.reuters.com/business/autos-transportation/how-volvo-landed-cheap-chinese-ev-us-shores-trade-war-2024-04-24/?utm_source=Sailthru&utm_medium=Newsletter&utm_campaign=Daily-Briefing&utm_term=042424&user_email=b1f33c724f72e6ae81530a646d129e79a9988a48c9ad389eee85b1a662118766" target=_blank>reported</a>. Volvo, originally a Swedish brand, is now owned by Chinese company Geely.)

Even if the United States succeeds in keeping the Chinese vehicles out in a bid to protect its own industry, innovation among American automakers could suffer. In a market where affordable, forward-looking products are excluded, the U.S. auto industry risks becoming complacent. That could hurt consumers and cause U.S. automakers to fall behind competitors in markets abroad.

The United States could end up having “missed the chance to push their companies to be more innovative in that process,” Mazzocco said, pointing to a “really bad track record” in the United States of protecting industries while trying to keep them competitive.

“We’re in a race against time on climate,” said Jennifer Turner, director of the China Environment Forum at the Wilson Center. “If you want to go whole-in on the climate, we should open the doors for cheap electric vehicles. But that doesn’t help us in the long run economically.”

The key will be supporting innovation on next-generation electrification technologies — products and solutions beyond just electric vehicles — “the kinds of things you and I can’t even imagine,” Turner said. “We are an incredibly innovative and talented country, and there’s finally some money out there to make it happen.”

Arizona State University, BA in Journalism and BA in Business

Bryan Pietsch is a reporter on the International desk covering foreign affairs. He was previously based in Seoul, where he was the inaugural reporter in The Post's news hub there.

Bryan Pietsch

Chinese electric vehicles are climate-friendly. Biden says they’re bad for America. 

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FILE PHOTO: 2024 Beijing International Automotive Exhibition

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