Trump Opposes EVs but Invites Chinese Automakers to U.S. Soil

Former President Trump Advocates for Chinese Auto Plants in the U.S.: A Surprising Turn in the EV Debate

Former President Donald Trump’s vocal opposition to electric vehicles (EVs) has been well-documented. Now the official Republican nominee, Trump, alongside his running mate Senator J.D. Vance, continues to criticize EVs. He recently commented to Bloomberg, “The cars don’t go far enough. They’re very, very expensive. They’re also heavy.” Additionally, Trump warned of a “bloodbath” in the auto industry from Chinese competition if he were not reelected. However, during this week’s Republican National Convention in Milwaukee, Trump unexpectedly expressed openness to the idea of Chinese automakers building factories in the U.S.

"Right now as we speak, large factories are being built across the border in Mexico," Trump stated at the convention. He added, "Those plants are going to be built in the United States and our people are going to man those plants."

EVs: A Political Hot Potato

Electric vehicles have emerged as a contentious issue in the upcoming presidential elections. The Biden administration has invested hundreds of billions of dollars to boost EV adoption, while Trump aims to "end the EV mandate," despite no such mandate existing. The administration’s stance focuses more on promoting emissions standards than enforcing EV adoption.

Mixed Reactions

Trump’s comments have sparked surprise among various groups. American auto industry officials worry about the advanced competition from Chinese EVs. Even within the Republican Party, many lawmakers have taken a hard stance against China and its ruling Communist Party. Trump hinted at amending the U.S.-Mexico-Canada Agreement (USMCA) free trade deal, possibly taxing Mexican-made cars up to 200% to bar them from the U.S.

This would represent a fundamental shift for the auto industry, considering that many vehicles for the U.S. market—electric and otherwise—are built in Mexico by companies like General Motors, Ford, Mazda, Nissan, and BMW. For instance, General Motors manufactures the new Chevy Blazer EV and Equinox EV at its Ramoz Arizpe plant in Mexico. With BYD and Tesla planning to build plants there as well, Trump’s stance presents substantial challenges.

The Tariff Tangle

The Biden administration has already imposed a significant 100% tariff on Chinese car imports, making it nearly impossible for Chinese automakers to sell their vehicles at potentially predatory prices in the U.S. However, many vehicles sold in America are currently being assembled in Mexico, intensifying the complexity of trade and manufacturing dynamics.

Historical Context and Potential Implications

Trump’s recent openness to Chinese automakers harks back to the 1980s when Japanese carmakers began to dominate the U.S. market by building local plants. The introduction of efficient production processes revolutionized the industry. Today, Japanese brands like Toyota and Honda have established themselves strongly in the U.S. market, thanks to their local manufacturing efforts.

Chinese automakers, with their vast expertise in EV technology and battery production, could potentially replicate this success. China dominates battery processing and refining, and companies like CATL lead the global market. Trump’s comments could be particularly inviting for these entities, echoing the historical entry of Japanese automakers.

The Nonexistent EV Mandate

Ironically, in the same speech, Trump vowed to end the "electric vehicle mandate" on his first day back in office. The reality is that no such mandate exists. Instead, the EPA’s multi-pollutant emissions criteria, finalized earlier this year, encourage automakers to sell more plug-in cars to meet emissions targets aimed at reducing billions of tonnes of harmful gases.

The automotive industry is currently amidst a transitional phase, with manufacturers providing diverse offerings, from traditional gas-powered vehicles to fully electric models. The regulatory environment, coupled with shifting consumer preferences, will heavily influence future trends.

The Battle Ahead

American automakers, well-armed with powerful lobbying groups, are likely to push back against any move to allow Chinese automakers to establish factories on U.S. soil. This corporate tug-of-war adds another layer of complexity to an already multifaceted issue.

Conclusion

As the race to the White House heats up, the future of the American auto industry hangs in the balance. Former President Trump’s latest comments add a surprising twist to the ongoing EV debate. The potential entry of Chinese automakers into the U.S. market could shake up the industry, reminiscent of the Japanese automotive revolution of the past. The final outcomes will depend on political, economic, and industrial dynamics that are still evolving.

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Authored by William Kouch, Editor of Automotive.fyi