Whoever the United States resolutely opposes suppression, the more it proves that it is doing the right thing, and seeing that the competition cannot compete with China, the sleeping king has played hooligan tactics again.
The U.S. government will announce as soon as the 14th local time that it will increase tariffs on Chinese electric vehicles from the current 25% to 100%.
Can this game of tariffs really bring new energy vehicles back to life and flourish in the United States? Will the sleeping king's punch hit the cotton?
Back two years ago, on August 16, 2022, U.S. President Joe Biden officially signed the Inflation Reduction Act.
The bill includes about $430 billion over the next decade for areas such as climate and clean energy, as well as health care.
At a signing ceremony in the State Dining Hall at the time, Biden touted that the Inflation Reduction Act "is one of the most important bills in American history, and with this bill, it means that the American people have won." ”
Why is the sleeping king so confident, and what benefits will the bill bring to the American people? Based on the following points.
For one, the Inflation Reduction Act has tax incentives, grants, and loans, which means that it is subsidized by the state.
The second is to invest in clean energy, which will stimulate the development of domestic manufacturing and create jobs for the people.
For example, the most fashionable and popular new energy vehicles now.
To promote electric vehicles, the bill provides for a tax credit of up to $7,500 for consumers who purchase clean new energy vehicles assembled in North America.
Looking at it this way, the sleeping king is still a leader with clear thinking and the courage to innovate, and he still grasps the work on the idea.
On the one hand, new energy vehicles are a key industry for the United States to achieve energy transition and serve the competition of major powers.
On the other hand, the demand for electric vehicles in the United States is increasing, and according to a 2022 survey by the American Automobile Association, a quarter of Americans expect their next car to be an electric vehicle.
But how are Sleeping King's grand plans for electric vehicles going? To answer this question, let's first take a look at the latest data provided by the US media.
Bloomberg reported on the 11th that with the sharp drop in electric vehicle prices and the slowdown in demand, Ford's loss of electric vehicles in the first quarter exceeded $100,000, more than double the loss in the same period last year.
Fewer than 76,000 electric vehicles were shipped last year, equivalent to 1/200th of the 14 million vehicles sold worldwide.
Tesla, the American electric car maker, is laying off 10 percent of its workforce and disbanding a charging business team, while the industry is relying on Tesla's Superchargers for mobile charging.
Tesla shares have fallen 32% so far this year.
U.S. EV sales grew just 2.6% year-over-year in the first quarter, a far cry from the 81% and 46% growth rates in the same periods in 2022 and 2023.
Is there any mistake? No matter how much the US media reports it, it's all negative news! Why does the U.S. media collectively sing the praises of the United States instead of China? This is strange, how to write the year-end summary report of the sleeping king? Why is this the case?
This can only be said, "the ideal is very plump, and the reality is very skinny".
On the surface, it seems that American dealers are not well prepared and are concerned about the high cost of replacing batteries, coupled with the high cost of car insurance and the price of new energy vehicles, which has discouraged many consumers.
Fundamentally, it is the rapid rise of China's new energy vehicles and the emergence of "leaders", which makes the sleeping king unexpected.
China's electric vehicles have formed a leading edge in the world, whether it is supply chain costs, technology research and development, or market operations.
China's production and sales of new energy vehicles have accounted for more than half of the world's total sales, becoming a real leader.
Compared with the United States, China is the world's largest exporter of automobiles, with 4.91 million vehicles exported in 2023, including 1.203 million new energy vehicles, a year-on-year increase of 77.6%.
According to Japanese media reports, with new energy vehicles as the engine, China's automobile exports surpassed Japan for the first time and jumped to the first place in the world.
According to CleanTechnica data, global NEV sales in March were 1,314,687 units, up 19.8% year-on-year and 58.2% month-on-month.
In the first quarter of this year, global NEV sales reached 3,216,366 units, up 25% year-on-year, and the market share increased by 2% to 16%.
China is still the main market leading the global new energy vehicle forward.
In the first quarter of this year, Chinese models accounted for 16 seats in the TOP20 model list, and Chinese brands accounted for 9 seats in the TOP20 brand list.
BYD became the world's most popular NEV brand with sales of 585,000 units.
Tesla's global sales were 387,000 units, a year-on-year decrease of 8.5%, and BYD's sales were nearly 200,000 units, and the gap between the two was getting wider and wider.
In the TOP20 brand list, Chinese brands occupy 9 seats, and the sales volume of these 9 brands increased by 21.7% compared with the same period last year, and the market concentration has been further improved.
What do China's new energy vehicles shine on the world stage and stand out?
Mainly because China's pure electric vehicles are too close to the people in terms of price!
Batteries are a key factor in determining the cost of an electric vehicle, accounting for 40%-50% of the manufacturing cost of an electric vehicle.
According to Bloomberg New Energy Finance, the average price of battery packs in China is US$127/kWh, while those in Europe and the United States are 33% higher.
Since China could not compete with China, the US government had no choice but to turn back the clock of history, follow the example of the Manchu Qing government, implement the policy of "closing the country to the outside world," and wield the big stick of tariffs.
So, will this really make the U.S. auto industry a leader or will it end up hurting the U.S. auto industry?
First, it is perceived as an abuse of market position, undermining the international order, violating WTO rules, and the spirit of free trade. If China appeals to the WTO, the United States will definitely lose.
At the same time, the United States, which prides itself as a free-trade country, will have its own national credibility damaged and will be severely condemned by the international community.
Is the United States, one of the largest trading countries, the most powerful hegemon, and the most important defender of order, trying to quench its thirst and destroy its own future?
Second, not only will the United States fail to meet its expected 40 percent reduction in greenhouse gas emissions by 2030 from 2005 levels, but it will also harm global interests.
Third, whether high tariffs and trade barriers will not protect the U.S. auto industry is clear if you look at the U.S. steel industry.
Why did the U.S. steel industry agree to accept takeovers from Japanese companies at the end of last year? Is it a lack of adequate protection?
On the contrary, it has relied on its monopoly position for many years, lost its technological progress and innovation, and finally eliminated and went bankrupt.
This fully shows that children without umbrellas will run faster!
So, are there no sober people in the United States?
On May 11, CNBC did a video titled "Why U.S. Automakers Are Losing in China."
"If you don't play in China, what do you do when China comes up in your backyard?" ”
Bill Russo, a former executive at the American car brand Chrysler and head of Automobility, a Shanghai-based consulting firm, said in a CNBC video that this is exactly why American automakers should not abandon China.
Despite the setbacks in sales for U.S. companies, he said, the shifts over the past few years are sustained.
"How do you know how to compete with them?" You haven't tried it at all. ”
"Tariffs and cowardice are putting U.S. automakers in a desperate situation," David Ficklin, a climate and energy columnist at Bloomberg, wrote an op-ed on May 11, criticizing U.S. automakers for being content with the status quo.
Ficklin argues that the danger to the United States is that the door to protectionism and corporate cowardice is harder to open than to close.
Ficklin described American car companies as "birds on an island", in such an environment, they can become bigger and stronger without starving competitors, but gradually lose the ability to fly.
The article points out that in this case, those American consumers who want to buy cheap, clean and innovative cars will be the losers, which is exactly the opposite of Biden's "declaration".
In fact, considering that the number of new energy vehicles exported by China to the United States is "almost zero", even if the new tariffs are implemented, it will not immediately have a lethal effect on China's electric vehicles.
It has to be said that with the US election approaching in November and China's electric vehicles selling well all over the world, in order to show a tough stance on China to gain votes and attract attention, the Biden administration has to play the idea of raising tariffs.
However, if the sleeping king still wants to paste and copy the road of "protection", will the American steel industry today be the American auto industry tomorrow?