In the global electric vehicle sales market, Tesla has always been firmly in the hegemonic position, but the past 2023 has become a historic turning point, BYD and other Chinese car companies have risen, and stood out in the fierce competition in the global electric vehicle market, not only let the annual export volume of Chinese cars surpass Japan, becoming the world's first for the first time, Tesla's hegemony is no longer stable under the impact of BYD. According to a report by Huanqiu.com, in the fourth quarter of last year, BYD's pure electric vehicle sales reached 526,409 units, while Tesla's sales were 484,507 units.
The American "Business Insider" website commented that Tesla has lost the crown of electric vehicles, and the field of new energy vehicles is undergoing earth-shaking changes, Tesla sold about 1.81 million units last year, while BYD sold more than 3 million units, this milestone growth, marking China's growing influence in the highly competitive electric vehicle market. But this is not the worst news for Tesla, and its future revenue may be hit by US policy.
U.S. President Joe Biden signed the Inflation Reduction Act into law in August 2022, providing a $7,500 tax credit for electric vehicles assembled and produced in the United States and eligible regions, but there are strict standards for sources such as critical minerals and components in car batteries. In order to curb China's advantage in the new energy vehicle battery industry chain, the U.S. Treasury Department issued stricter new battery procurement rules on the basis of the Inflation Reduction Act, and American companies cannot use battery components manufactured or assembled by "foreign entities of concern" if they want to receive a $7,500 tax credit.
The so-called "foreign entities of concern" of the United States include countries such as China, Russia, and Iran, which are considered "adversaries or enemies" by the United States. In view of China's advantages in new energy vehicle batteries, the United States' actions are undoubtedly suppressing China, but after the new regulations officially take effect on January 1, 2024, the first knife will be cut on Tesla's head, Tesla's all-wheel drive Cybertruck, and some Tesla Model 3, lost the qualification for a tax credit of up to $7,500.
In addition to Tesla, General Motors of the United States has also been affected, and its two electric vehicles, the Cadillac Lyriq and Chevrolet Blazer EV, have temporarily lost their eligibility for tax credits. Companies such as Audi and BMW, which also have different models of electric vehicles, are affected by the new regulations on battery procurement by the U.S. Department of the Treasury, and it is expected that future revenue and car sales will be affected to varying degrees.
For the Biden administration, the impact of the new regulations on American electric vehicle companies should be expected, which may be regarded as "labor pain" by them, as long as they can reconstruct the battery supply chain without China and establish a more reliable supply chain system, it does not matter if the new energy vehicle industry in the United States is impacted. However, this practice of the United States has weakened the competitive advantage of American companies, and even if the United States builds a "small courtyard and high wall" and uses policies to prohibit Chinese electric vehicles from entering the American market, it is difficult to restrict third countries such as Mexico from allowing Chinese cars to enter the American market through entrepot trade.
In the final analysis, it is China that has been deeply involved in the field of new energy batteries for many years, and is in a leading position in technology, coupled with China's large and complete industrial system, which can support the vigorous development of the new energy vehicle industry. On the other hand, in the United States, except for the government to intervene in the market and use policies to suppress the development of Chinese enterprises, it seems that there is no other way for the United States to occupy a leading position in the competition in the new energy vehicle industry.
The U.S. approach runs counter to the "free market" it advocates, but it is not surprising that the "New Washington Consensus" proposed by U.S. National Security Advisor Jake Sullivan in April last year advocated the implementation of an industrial policy with state involvement as the main purpose to revive U.S. manufacturing. To some extent, this is no different from the planned economy of the former Soviet Union, and to use a misapt metaphor, the United States is "Sovietizing".