Biden Imposes New Tariffs on Chinese EVs & Batteries

The White House has imposed steep new tariffs on certain Chinese imports to the US that could affect the electric vehicle industry.

100% Border Tax on Chinese-Made Electric Vehicles

BYD international vehicle transporter - byd.com
BYD international vehicle transporter - byd.com

Back in May, the Biden administration imposed a sweeping array of heightened tariffs on Chinese imports. The most glaring of the tariffs was a bump from 27.5% to a staggering 100% border tax on Chinese-made electric cars in an effort to protect domestic auto manufacturing jobs and businesses. Chinese EV brands have exploded in popularity internationally due to their exceptional range, admirable quality, and their affordable price points. These vehicles are just too competitive for domestic automakers who, for the majority, only recently jumped into the fully electric vehicle market.

Domestic brands all sell their EVs for well over $30,000 in 2024 after the Chevrolet Bolt EV and Bolt EUV were put on hiatus. Not only that, but most domestically produced EVs feature ranges below 300 miles on a single charge. In comparison, Chinese automaker BYD’s most expensive fully electric car, the BYD Han, starts at a price of 169,800 yuan, the equivalent of $23,600 USD, and can achieve a range of 314 miles on a single charge.

BYD Han - byd.com
BYD Han - byd.com

The BYD Han isn’t some value bin EV at that price either. It’s a sleek looking sedan with an advanced driver assistance system, premium cabin experience, and tech features like a rotating 15.6-inch touchscreen infotainment system and a 12.3-inch digital instrument cluster display.

Tesla, America’s largest electric vehicle manufacturer, is still globally renowned for their vehicles like the Model 3 and Model Y, but they’ve been dethroned the past couple years by BYD for the title best-selling electric vehicle brand. This latest imposed tariff on Chinese EVs hopes to stave off the Chinese electric vehicle manufacturer from gaining popularity in the United States and keep domestic brands, like Tesla, competitive.

How Does this Affect the American EV Market?

The BYD Han was currently planned as the debut vehicle for BYD coming to the United States with a starting price around $24,000. With this added tariff being imposed on it, that starting price would balloon to $48,000. While that does make domestically produced EVs more competitively priced after the fact, it’s pricing out potential consumers and continuing the slow pace of EV adoption.

Polestar 2 - polestar.com
Polestar 2 - polestar.com

This tariff isn’t just on incoming Chinese brands either, there are a couple of auto brands known domestically that will be affected. Geely is the parent company that resides over Volvo and Polestar. Both of those well-known brands have production based out of China for models like the Polestar 2 and the upcoming Volvo EX30. Those electric vehicles being imported from China would either see a significant price bump, Geely would have to eat the loss to stay relevant, or they’d simply drop the models from the lineup in the States for the time being until the production could be moved to a more agreeable location.

There’s also the matter of the Chinese battery tariff that was imposed alongside the electric vehicle one. The tariff on Chinese-produced batteries was increased from 7.5% up to 25% under the Biden administration. While the idea behind this tariff was to push domestic manufacturers to produce their own batteries and become self-reliant rather than rely on outside imports, it’ll have repercussions for the current EV production of Tesla, Ford, and General Motors.

Tesla Model 3 - tesla.com
Tesla Model 3 - tesla.com

Contemporary Amperex Technology Co. (CATL) is one of the largest producers of electric vehicle batteries in the entire world and they’re based out of China. Their lithium iron phosphate batteries are imported to North America where they’re used by Tesla for the Model 3 and Ford for the Mustang Mach-E and F-150 Lightning. Heightened tariffs on these batteries could mean price hikes from Tesla and Ford or production slows until a new producer can be sourced. For General Motors, the next-generation Chevrolet Bolt was due to return utilizing these same batteries from CATL, but they’ll need to look towards another supplier to evade the 25% tariff.

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Jesse McGraw

Jesse McGraw brings his life-long car obsession into his writing. A fun childhood that involved growing up around race tracks, working on a rusty ‘99 Dodge Dakota held together by zip ties, and collecting Hot Wheels developed into a strong appreciation for automotive history. If there is an old, obscure, or rare car, he wants to know about it. With a bachelor's degree in Web Development & Design from Dakota State University, Jesse can talk shop about car or computer specs, focusing on classic cars, imports, and car culture.

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