The United States will raise taxes on China's electric vehicles to block BYD? BYD: Thinking too much!

Car memorabilia

2024-05-18 20:33Posted in Hubei Automobile Creators

In the early morning of May 15, Beijing time, BYD released its first plug-in hybrid pickup truck SHARK (Shark) for the first time in the Mexican market, which is also the first time that BYD has debuted a new model in a market outside China. It is worth noting that on the eve of the Shark's listing, the United States officially announced that the tariffs imposed on Chinese-made electric vehicles would be increased from 25% to 100%.

Intriguingly, BYD recently inspected the location of the Mexican factory, and it was speculated that BYD wanted to use Mexico to build a factory to enter the U.S. market (according to the U.S.-Mexico Free Trade Agreement, cars produced in Mexico can be traded in the U.S. with zero tariffs), but soon, the U.S. said it would raise tariffs on Chinese electric vehicles including those produced in Mexico (previously zero tariffs). This time, the BYD shark made its debut in Mexico, and the United States raised tariffs on Chinese electric vehicles, and it is difficult not to suspect that the United States is targeting BYD. How will BYD respond to this? Will its overseas strategy be adjusted as a result?

On the eve of the launch of BYD's pickup truck, the United States announced a tax increase

In recent years, China's electric vehicle industry has achieved leapfrog development, not only has the world's largest sales market, China's electric vehicles are also sold all over the world, and the export volume has shown geometric growth. According to data provided by the World Trade Organization (WTO), one out of every four new energy vehicles exported in 2023 came from China.

The global electric vehicles look at China, and the Chinese electric vehicles look at BYD. As the leader of China's new energy vehicles, Yadi not only dominates the domestic market, but also has made remarkable achievements in overseas markets in recent years, with its products sold to the Americas, Europe, Southeast Asia, Japan and other places, and the export of new energy passenger vehicles in 2023 alone will reach 240,000 units, and has gained a very good reputation.

At present, BYD has not only set up a number of R&D centers and sales networks in Europe, Southeast Asia and other places, but also actively seeks to establish production bases overseas to reduce production costs and improve market response. As an important member of the North American Free Trade Area, Mexico has a unique geographical location and cost advantages, which makes Mexico a target for some Chinese electric vehicle companies to establish overseas production bases, and BYD is no exception.

(Mexico's vehicle sales by country imported in 2023)

Some time ago, BYD conducted an inspection of the site selection of the factory in Mexico, aiming to find a suitable location to build a production base. Stella Li, CEO of BYD Americas, told the media in February this year that BYD is expected to build a Mexican factory by the end of the year, with an annual production capacity of 150,000 vehicles.

Soon after the news broke, the United States made it clear that it would raise tariffs on Chinese electric vehicles, even those produced in Mexico, and regarded BYD as a flood beast. Previously, Mexican-made Chinese electric vehicles enjoyed zero-tariff status in the United States, but this preferential policy has now been removed.

At the same time as BYD was selecting a factory site in Mexico, BYD's pickup truck "Shark" officially landed in the Mexican market on May 14. However, on the eve of the listing, the United States officially announced that tariffs on electric vehicles produced in China will be raised from 25% to 100% from 2024.

The U.S. government has repeatedly introduced measures such as imposing tariffs on automobiles, with a clear purpose, that is, to protect the local industry and try to prevent Chinese cars from entering the U.S. market, which means that it actually has a sense of fear about the development of Chinese electric vehicles. Tesla CEO Elon Musk has said: "China's electric vehicles are very good, and if other countries do not set up trade barriers, Chinese electric vehicles will almost destroy most car companies in the world." "This time the U.S. government raised tariffs on China's electric vehicles, BYD is obviously the primary target that the United States intends to block, is BYD afraid?

BYD: "We don't think about the U.S. market"

What is surprising is that in the face of the aggressive tax hike policy of the United States, BYD does not actually take the United States into account at present, at least not at present, it does not target the export market in the United States.

BYD Executive Vice President Stella Li made it clear in an interview a few days ago that BYD's passenger car business does not plan to enter the U.S. market, "We only consider the Mexican market and the market of other countries, and do not really consider the U.S. market." She added that BYD is looking for factory locations in the central and southern regions of Mexico, rather than the northern part near the U.S. border, and the company's plan is to build the facility for the Mexican market rather than the export market.

BYD's attitude shows its cautiousness and rationality in the layout of overseas markets. Although the U.S. market has huge consumption potential and market influence, high tariffs and a complex market environment have made BYD choose a more stable global development strategy, focusing on Europe, South America, Southeast Asia and other overseas markets with huge potential.

In the long run, BYD's layout in overseas markets will face more or less challenges from the U.S. tariff policy, however, with its strong R&D strength, high-quality product quality, stable market strategy and good market reputation, BYD is expected to achieve wider brand influence and more market share in the future.

In fact, at the Beijing International Auto Show held in April, a number of overseas media praised BYD's electric vehicles, believing that BYD not only produces parts, but also has a cost advantage in its power batteries, and even Tesla is looking for BYD to supply batteries, which shows that BYD's electric vehicle products are more competitive than Tesla. Although the United States has used extreme tariff policies to build protectionist barriers, which has had a certain impact on the development of Chinese automobiles, it cannot prevent the rise of Chinese electric vehicles led by BYD in the global market.

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