Chinese Electric Car Giants are Building in Mexico, It’s Alarming The US

Chinese electric car giants are building in Mexico, it’s alarming the USA! Holy crap, if China starts building cars in Mexico, and is able to import them to the US with the tax credit because of the way, the infrastructure bill is written it will destroy the US auto market.Show more

Three major Chinese EV companies are planning new factories in Mexico, per the Financial Times. This includes Tesla rival #byd, fellow giants MG (SAIC) and Chery are in talks over new sites in Mexico and this is alarming US officials. The move will likely fuel fears that Chinese firms may use Mexico as a backdoor into the US #ev market. And the price will be lower than what’s on the market today. This may sound good for consumers, but there is a lot of negative impact you may be missing.

This investment is causing angst in Washington as it seeks to keep China out of the US electric car market. Remember that China controls the bulk of the battery materials used in electric vehicles. US officials have reportedly raised concerns with their Mexican counterparts over Chinese investment, with the new sites potentially including a new $1.5 to $2 billion MG electric car factory and a factory investment worth hundreds of millions of dollars from Warren Buffett-backed Tesla rival BYD.

China's electric vehicle market is booming, and local manufacturers are increasingly looking to expand overseas amid cutthroat competition for customers back home. China also dominates the global electric vehicle battery supply chain, allowing it to produce far cheaper EVs than many of its US rivals.

The US has attempted to protect the US market by unveiling new rules earlier this month to make it more difficult for EVs made with Chinese parts to qualify for tax breaks. But the possible expansion of Chinese automakers into Mexico, which recently replaced China as the US' biggest trading partner, will fuel fears that it could serve as a backdoor.

Lawmakers on a select committee on China recently warned that stronger trade rules may be needed to prevent Chinese automakers from "gaining a backdoor to the US market" through its trading partners.

Mexico has proven a tempting target for carmakers in recent years, thanks to its low labor costs and a free-trade agreement with the US and UAW. #tesla is planning to build a gigafactory near Monterrey, Mexico, where it is expected to produce its long-awaited $25,000 electric car.

Chinese EVs are pouring into Europe for one really big reason. They can charge twice as much for their vehicles. For example, the BYD Dolphin costs $15,500 in China but it’s $39,000 in Europe. Tesla’s China-made Model 3 sells for 13,000 euros more in Europe than it does in China. Even though Chinese automakers double the price, they’re still selling EVs cheaper than what European automakers charge. Aside from shipping costs and a 10% import tariff, those higher prices are pure profit. And that’s why Chinese EVs are flooding into Europe.

For more than a decade, China's car manufacturers had a presence at the main Auto Shows in the United States with promises that they would start selling their models in this market back in 2022. Obviously, those plans didn't pay off, but his new strategy could change everything very soon.

By building electric vehicles in #mexico Chinese car companies could enter the #usa market under more favorable conditions. According to the Agreement between the United States, Mexico and Canada, 75% a vehicle must be manufactured in the North American region for its manufacturer to avoid paying import duties and although there are currently no Chinese car brands available for purchase at United States, vehicles made in #china are already sold in the United States, mainly from the Swedish brand Volvo – and its new high performance division Polestar.

So with one foot already within the North American zone, #chinese cars are much closer than you might have imagined, and don't be surprised if at some point in a Chinese car wins the prize for #car #truck or #suv of the Year.

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