Biden issued a statement yesterday focusing on the most important issues in the U.S. auto industry. While the statement ostensibly claims to investigate China's electric vehicle software technology, it is more of a campaign speech with a clear purpose.
The statement began with a full list of praise for the U.S. auto industry: U.S. cars are the number one in the world, and U.S. auto workers are among the best. In his statement, Biden highlighted the excellence of U.S. automakers and auto workers. He noted that the U.S. automotive industry leads the world in quality and innovation, and that this dynamic industry is critical to the U.S. economy. In addition, the statement also mentioned China's ambitions for the auto market, pointing out that China may pose a threat to the United States by using unfair means to flood a large number of cars into the U.S. market. Biden said he would never tolerate this during his tenure.
The statement also highlights the fact that most cars are now connected to the internet. These cars are like smartphones on wheels, they connect to our phones, navigation systems, critical infrastructure, and the companies that make them. However, connected vehicles from China may collect sensitive data about U.S. citizens and infrastructure and send that data back to China. These vehicles may even be remotely accessed or disabled.
The United States** has imposed a series of restrictions on cars in China and other countries of concern, in particular tariffs on Chinese-made cars. Within this policy framework, I propose a series of unprecedented actions aimed at ensuring that connected cars from these countries do not pose a threat to *** when driving on U.S. roads. To achieve this, I have asked the Secretary of Commerce to take action to conduct an in-depth investigation of connected vehicles with relevant national technologies and to take the necessary steps to address potential security risks. This decision is based on my sense of responsibility to my country's auto workers and middle-class families, and as a leader, I vow to make informed and responsible decisions for those who depend on the automotive industry for employment.
Although Chinese-made electric vehicles have not yet made large-scale efforts in the U.S. market, according to 2023 statistics, the amount of pure electric vehicles exported directly by China to the U.S. is only 3$6.8 billion. In comparison, the EU exported nearly $7.4 billion of electric vehicles to the United States in the same year, indicating that China's market share in this area still has room to improve. While the U.S. levies a whopping $27 on Chinese-made cars5% tariffs and other restrictions, but there has not yet been a large-scale import of Chinese BEVs. However, we also recognize that these restrictions may ultimately not be able to completely prevent Chinese cars from entering the U.S. market. Therefore, I will continue to pay close attention to this issue to ensure that the future development of the United States is created at home by its own workers.
Chinese electric vehicles have significant advantages over Western electric vehicles in terms of **. In the case of BYD's Seagull, for example, the car sells for only $20,000 in the Latin American market. Chinese EV manufacturers are aggressively fighting to make them more competitive in the international market. Unlike in the past, China's EV manufacturers have excelled in innovation and are no longer just producers of cheap replicas.
This change is closely related to the improvement of China's industrial capacity, especially in the shipbuilding industry, which is supported by synergies and economies of scale. At the same time, the subsidies provided by China** have also become an important factor in supporting the rapid development of China's electric vehicle industry. In addition, China's automobile export capacity is rapidly increasing, and it is no longer subject to the bottleneck of transoceanic carriers. BYD has partnered with Yantai CIMC Raffles City to launch China's first carrier specifically for exporting Chinese-made cars. Recently, thousands of BYD cars have arrived in Germany, marking the successful launch of the first of eight planned. This further demonstrates the solid foothold of the Chinese automotive industry in the international market.
Earlier this year, People** reported that COSCO had ordered 24 large vehicle carriers, highlighting the strength of China's shipping industry. China's shipbuilding and industrial prowess are increasingly under scrutiny. As of the end of August 2023, China's civil shipbuilding production accounted for 49% of the global market, fully demonstrating its dominance in the global manufacturing sector. At the same time, China's EV manufacturers and shipbuilders are working together to boost each other's exports, especially to a key market like the United States. In addition to direct exports, the Chinese auto industry can further penetrate the U.S. market through strategic investments in third countries, especially Mexico. Mexico not only shares a border with the United States, but is also deeply integrated into the USMCA** chain, which will open a more convenient path to the U.S. market for Chinese-invested Mexican-made trams.
According to the World Economic Forum, China is not only the world's largest market for electric vehicles, but also accounted for 59% of global sales last year, underscoring its strong position in the electric vehicle space. Jim Farley, CEO of Ford Motor Company, expressed optimism about the prospects for electric vehicles, seeing China as a major competitor rather than the traditional GM or Toyota. He believes that China will rise to become a global electric vehicle powerhouse. America's traditional auto giants have to be careful, Chinese car companies are not joking around now, especially BYD, which specializes in hybrid and electric vehicles. This is not only to compete for market share, but also a big challenge to the technology and innovation of traditional car companies. It seems that China may become the leader of the global electric vehicle industry in the future, which can be seen by traditional car companies.
Last year, BYD sold 3 million electric vehicles, which is much higher than its competitors. Now, they have enough capacity in China to produce 4 million vehicles a year, but it's still not enough. So they're expanding aggressively, and they're building factories in Brazil, Thailand, Hungary, Uzbekistan, and it looks like they're going to be added to Indonesia and Mexico. The demand for electric vehicles is growing rapidly.
China is dominant in the electric vehicle chain, which has a great advantage. For example, BYD, part of the reason why it can sell electric cars so cheaply is that they have their own battery chain. From the material to the finished battery pack, the entire process is controlled by yourself. In addition, BYD has also designed its own semiconductors, which has further improved their competitiveness.
Elon Musk said in an interview with the New York Times that China's electric vehicle industry is super strong, and he feels that it is made in China, and his work attitude is even more speechless. He even thinks that in the future, most of the top 10 automakers will likely be Chinese. Although he has been desperate to keep Tesla in the lead, he feels that this situation cannot be changed: "Some people think that Tesla will be the first of the top 10 car companies, and then there will be nine Chinese car companies. I think there is no doubt about that. ”
Speaking of Berkshire Hathaway, the world's most well-known investment firm, although Buffett has never touched a car dealership, he is reluctant to invest in Tesla. However, the company's vice chairman, Charlie Munger (who died in December), was impressed by BYD's manufacturing prowess and took the lead in investing in BYD, which has paid dividends. Munger praised BYD's founder and CEO Wang Chuanfu as a "homegrown engineer" and felt that BYD's employees were better at making things than Musk's employees.
Recently, Biden announced that he would investigate Chinese-made electric vehicles. MSNBC put a ** and interviewed U.S. Secretary of Commerce Raimondo. She specifically mentioned the "China threat", especially in the automotive sector. She said that today's cars are like "iPhones on wheels" that collect a lot of information. "Imagine that there are a million cars in the United States, millions of which are made in China, and every minute of every day they collect data from Americans and send them back to Beijing ......," she said”
In addition, she warned that if the software in the car is disabled, the car will not be able to drive. "Imagine 3 million Chinese cars running on the roads of the United States, and they all turn off at the sound of an order from Beijing," she said. As soon as Raimondo finished speaking, the host immediately asked, asking if China's networked cars were canvassing for Biden in swing states. Raimondo denied the claim, saying that the move was entirely for *** consideration. Then the host asked: "Isn't this just ** sanctions and protectionism under the guise of ***?" Raimondo shook his head without hesitation and denied it, saying that it was about *** and protecting the interests of Americans.
However, in response to Raimondo's so-called "Chinese cars pose a threat to the United States", many netizens expressed skepticism under the ** released by msnbc, believing that Raimondo's statement was just a manifestation of "paranoia". In addition, Raimondo also said that "an electric car is an Apple phone with wheels", which caused sarcasm among netizens. Some people even bluntly said that Raimondo's remarks mean that Apple's mobile phones are also collecting users' personal data?
In response, a Chinese spokesman said that China stressed that the United States should respect the laws of the market economy and the principle of fair competition, stop exaggerating the concept of market economy, and stop discriminatory practices. They urged the United States to stop suppressing Chinese companies and maintain an open, fair, and non-discriminatory business environment. During Biden's first term, one of the goals is to vigorously develop clean energy and reduce carbon emissions to promote the development of the new energy economy in the United States. Through energy reform, he sought to revitalize communities that had been dying by relying on traditional petroleum energy and heavy industry, especially those in the Rust Belt.
Biden is rallying the support of the United Auto Workers, a union that recently struck a generous new contract with three auto giants. In the field of new energy vehicles, especially electric vehicles, Biden is bound to fully support these three giants. After all, Michigan has more traditional auto workers than any other state, and winning re-election in November, Biden almost had to win in Michigan. Looking back at 2016, Trump ended up with just under 1The margin of 10,000 votes won Michigan. Although Biden turned the tide in 2020, the current tense polling situation has forced him to be cautious about every vote here.
To boost EV production in the U.S., Biden has passed the Inflation Reduction Act, which offers generous subsidies. In addition, he has enacted new** measures to protect the U.S. auto market from the onslaught of competition from Chinese electric vehicles. While this is a necessary move from a political point of view, it will also have a complex set of consequences. In the short term, U.S. automakers, including Tesla, need to be protected from the onslaught of cheap cars from China. However, in the long run, Biden must tread carefully lest the US auto market become isolated from the rest of the world and become a latecomer full of expensive, high-fuel-guzzling large models.
Chinese automakers, especially BYD, have risen to become the face of emerging global power. They symbolize the long and complex evolution of China's economy, from its early days as simple toy and clothing manufacturing, to electronics and batteries, and finally to automobiles and aircraft. More strikingly, BYD and other Chinese auto companies are emerging as global leaders in the automotive industry, with the cost competitiveness of EV manufacturing in direct competition with traditional combustion vehicles.
Some American scholars have rightly pointed out that China was acutely aware of the potential opportunity for e-mobility 20 years ago and actively seized it. On the contrary, in this process, the rest of the world seems to have been asleep to some extent. China is known for its long-term planning and ability to develop long-term strategies, so it's no accident that China is leading the way in the field of electric vehicles. Perhaps, the United States** should focus more on protecting all Internet devices, including power grids, from hackers, rather than blindly focusing on the demonization of China. A good foundation for building a healthy economic system lies not in hatred and suspicion, but in rational cooperation and win-win results.