On the eve of May Day, Tesla, an American electric vehicle brand, ushered in a major and special piece of good news. Tesla's electric vehicles sold in China comply with the relevant regulations such as the "Security Requirements for Automotive Data Processing of Information Security Technology" issued by the mainland, and have passed all four automotive data security compliance reviews, becoming the only foreign company among the first batch of compliant companies. As a result, Tesla's stock price, which has been sluggish for some time, soared sharply, and its market value skyrocketed by tens of billions of dollars overnight, which not only excited Tesla's investors, but also gave the world a deeper understanding of China's emerging electric vehicle market.
Less than a week after China gave the green light to Tesla's car data security review, the Biden administration unveiled the final version of the Inflation Reduction Act on electric vehicle subsidies, aiming all the fingers directly at China. According to the announcement published on the website of the U.S. Treasury Department on the 4th of this month, the latest regulations of the "Inflation Reduction Act" on electric vehicle purchase subsidies set very strict and targeted restrictions on the application conditions. This highly targeted regulation has previously been considered futile by other EV parts supply chain countries, including South Korea.
The rule limits that consumers who purchase electric vehicles that contain battery components manufactured or assembled by Chinese companies will be disqualified from claiming federal tax credits of up to $7,500. Although the announcement strenuously argues that the move will help U.S. electric vehicle consumers reduce the cost of ownership, while also stimulating the development of U.S. manufacturing. However, the complete exclusion of batteries manufactured or even assembled by Chinese companies from the preferential tax credit policy has raised the cost of car purchase for American consumers, and even American car companies have been forced to abandon high-quality and low-cost Chinese batteries due to policy restrictions.
Judging from the results, this is undoubtedly a "lose-lose" new rule. When the outcome can be so clearly predicted, it means that there must be factors other than the economy in between. At present, the Biden administration is beginning to use the ridiculous excuse of "China's overcapacity" to justify its failed new energy policy in the past three years. This time, however, the "China threat theory" not only failed to convince the world, but even US public opinion found it difficult to accept.
Because when the Biden administration unjustifiably accuses China of engaging in "unfair competition" in solar photovoltaics, electric vehicles, and lithium batteries through the so-called "excessive subsidies", the United States' own new energy infrastructure has been a mess in the past three years, and the reconstruction of the critical minerals and rare earth industry chain is not a word. What is really difficult for American public opinion to accept is that after the Biden administration has offered so many restrictions specifically aimed at China, the sales of electric vehicles in the United States are still not expected.
According to the data, electric vehicle sales in the United States increased by only 3.3% in the first quarter of this year, accounting for only 7.15% of total car sales. The reason for this situation is not only the stubborn inflation that plagues the American public, but also the disqualification of some local electric vehicles that are highly sought after by consumers from receiving federal tax credit subsidies by the U.S. Treasury Department, which further suppresses consumers' desire to buy and replace cars. From a practical point of view, it is undoubtedly futile for the Biden administration to play the trick of "throwing the pot" in the field of electric vehicles. Because Chinese electric vehicles have been excluded from the U.S. market.
U.S. automakers are in a highly protected domestic market, and in such a relaxed environment, they still can't increase the penetration rate of new energy vehicles in the United States into traditional fuel vehicles, which just proves that the problem lies with the United States itself. If the Biden administration continues to hold on to the idea of "letting others take medicine when they are sick", it is only a matter of time before the United States is fully surpassed by China on the track of new energy vehicles.