Could it be a Chinese automobile takeover? According to Tesla CEO, Elon Musk, the potential for China to demolish much of the competition in the electric vehicle industry is growing, especially with the Biden administration’s new tariff legislation.
Chinese-made vehicles have already faced a firm 27.5 percent tax on cars sold in the U.S., hurting many car companies worldwide. This includes American carmakers like Ford and General Motors. With Chinese automobile makers gaining global ground, the Biden administration announced last week that it was placing a 100% tariff on Chinese-made electric vehicle imports to the U.S. This new legislative hike is poised to have a major impact on the automotive landscape, with Americans facing more expensive electric vehicles, but the tariff is designed to bolster the clean energy industry in the nation by combating cheaper Chinese exports.
This bid to stop cheap Chinese electric vehicle imports to the U.S. is in response to Beijing’s subsidies, which are aiding companies to overproduce cheap clean energy products like solar panels and electric panels.
Not in favor of President Biden’s recent announcement of the tariff on Chinese-made electric vehicles is Tesla CEO, Elon Musk, stating “Neither Tesla nor I asked for these tariffs.” In response to a question from CNBC’s Karen Tso during a question and answer session at the VivaTech conference, Musk further stated, “In fact, I was surprised when they were announced.”
Historically, Musk is not in favor of tariffs on any imported goods. “In general, I’m in favor of no tariffs. I’m also actually in favor of no tax incentives for EVs, but provided that… the tax incentives for oil and gas must also be eliminated,” Musk stated in a remote appearance at the VivaTech conference. “So I’m in favor of no tariffs and no incentives for electric vehicles or for oil and gas. And if they’re all taken away, I think that would be for the best.”
While Tesla does quite well for itself in the Chinese market with no tariffs and no deferential support, the company has been struggling this year due to an aging fleet of electric vehicles, weaker consumer demand for its vehicles, and increased global competition, especially in China.
Musk’s thoughts on the new tariffs come after his statement earlier this year that the Chinese electric vehicle companies are likely to crush the competition around the globe with its absence of trade restrictions. The Tesla CEO stated, “Frankly, I think, if there are not trade barriers established, they will pretty much demolish most other companies in the world.”
Musk revealed his surprise about this new legislation, explaining that “generally, things that inhibit freedom of exchange, or distort the market, are not good – they’re bad.” Yet, when asked whether or not Biden’s implementation of the 100 perfect tariff would give Musk the green light to lower the price of his vehicles, Musk’s live feed line cut out, leaving the audience waiting for several minutes for the CEO to come back online and eventually leaving the dome where the session was being live streamed.
