Biden’s Approach to Chinese EV Tariffs: A Strategic Gamble with Potential

Overview of the New Tariff Strategy

President Biden’s new tariffs on Chinese electric vehicles (EVs) mark a significant shift from previous U.S. policies. While former President Trump’s tariffs aimed broadly at various Chinese products failed to deliver the expected economic benefits, Biden’s targeted tariffs on EVs are part of a larger strategy to bolster the U.S. automotive industry against cheap imports. This move is seen as an attempt to protect American jobs and ensure the competitiveness of U.S. industries in the global market.

Economic and Strategic Implications

The rationale behind these tariffs is to prevent the U.S. market from being overwhelmed by less expensive, subsidized Chinese EVs, which could potentially undercut American manufacturers. These tariffs are complemented by substantial domestic incentives for EV production under the 2022 Inflation Reduction Act, which aims to foster innovation and investment within the U.S. This dual approach of tariffs and incentives is designed to create a more level playing field for American companies and stimulate job creation in the automotive sector.

Potential Outcomes and Challenges

While these measures could temporarily shield U.S. manufacturers from international competition, allowing them to strengthen and expand, there are risks involved. Tariffs might lead to retaliatory measures, as seen during the Trump administration, which could harm other sectors of the economy. Additionally, if U.S. manufacturers fail to innovate and reduce costs, the strategy might only offer short-term relief, leading to higher prices for consumers without a corresponding increase in quality or innovation. The success of Biden’s tariffs will largely depend on the ability of American manufacturers to capitalize on this opportunity to enhance their competitiveness on the global stage.

Are EV Startups in Trouble? 1 Company Is Unlikely to Survive the Year

Last year, EV automakers couldn’t get anything wrong, but that success hasn’t transitioned to 2024. Automakers focused solely on electric vehicles had a rough first quarter, meaning four top names, Tesla, Lucid, Fisker, and Rivian, have to address challenges to turn things around. How are these EV startups addressing serious challenges? Let’s find out.

Let’s start with Tesla

It seems that Tesla sets the tone for the electric vehicle world, which makes this brand a good place to start. Tesla is the oldest of these EV startups and chose to lay off workers to address the first quarter losses. Unfortunately, firing the entire charging team wasn’t the smartest move, and Tesla has since begun rehiring them. The layoffs impacted other areas of Tesla, including engineering, service, and software groups. Cutting staff can be a double-edged sword, but it’s the direction Tesla CEO Elon Musk chose.

Blue Lucid Air Sapphire parked
Lucid Air Sapphire | Lucid

How is Lucid addressing its losses?

Lucid is a boutique-style EV startup, producing vehicles in small numbers. Lucid’s goal to build 9,000 cars this year might be in jeopardy after losing $685 million during the first quarter. This figure is better than the Q1 2023 losses of $780 million, and revenue is up to $173 million. Lucid intends to throw money at the problem and has $2.2 billion in cash to offset losses and continue forward.

Fisker Ocean parked in front of a home
Fisker Ocean | Fisker

Is Fisker done?

Fisker needs the EV market to be strong to survive. Currently, they only build the Ocean SUV, which might mean Fisker’s end. As one of the newest EV startups, this company was only just getting started when things slammed shut. The company could suffer $75 million in losses, which might be enough to cancel the contract with Magna International of Australia, which currently produces the Fisker Ocean. No more Ocean SUVs will be built, and Fisker doesn’t have another location to build them. Without a fiscal shot in the arm, Fisker may need to declare bankruptcy.

The 2024 Rivian R1T climbing over rocks
2024 Rivian R1T | Rivian

Rivian throws money at the problem

Rivian faced challenges last year and could be in a good position this year. Revenue is up $661 million, and deliveries are up 71% during the first quarter to 13,588 vehicles. With the new Rivian R2 on the horizon and potential partnerships with commercial companies, Rivian might be in a good position if its cash reserves remain. This company lost $5.4 billion in 2023 and another $1.45 billion during Q1 2024. The cash burn continues but might turn around for Rivian soon.

Will all four of these EV startups survive into the future? It doesn’t look like it, but three of them should remain for at least another year.

The Electric Revolution: Mercedes-Benz G-Class Transforms with EQ Technology

Introduction

The iconic Mercedes-Benz G-Class, affectionately known as the G-Wagen, has taken a significant leap into the future with its latest electrification. Long revered for its rugged utility and luxury, the G-Class has evolved over 45 years, maintaining its essence while adapting to changing times. Now, with the introduction of the new G 580 model featuring EQ Technology, it sets a new benchmark for electric luxury SUVs.

Is This the Year You Go Electric?

Electrification Meets Iconic Design

The transition of the G-Wagen from a diesel-powered workhorse to a symbol of opulence among the elite has seen various iterations, including extravagant versions that flaunted its audacity. However, the latest model, the Mercedes-Benz G 580 with EQ Technology, presents a sustainable twist while preserving the vehicle’s legendary design and capabilities. The integration of a 116-kWh lithium-ion battery ensures that the G-Wagen retains its robust architecture, enhanced by advanced electric propulsion for a cleaner, more efficient drive.

Mercedes-Benz G 580 with EQ Technology, the first electric G-Class SUV, also known as the G-Wagen
Our writer’s trail covered steep, jagged, uneven terrain with no shortage of sharp rocks and slick surfaces.

Mercedes-Benz

Advanced Capabilities and Performance

Despite its new electric heart, the G 580 maintains the classic G-Wagen performance, now with an eco-friendly edge. The SUV is equipped with four electric motors, delivering a combined 579 horsepower and enabling sophisticated torque vectoring that defies its substantial mass. Notably, the vehicle’s off-road prowess remains uncompromised, with impressive water fording capabilities and nearly identical suspension travel to its combustion counterparts. The G-Wagen’s new electric setup does not just preserve but enhances the driving experience, providing a whisper-quiet ride while navigating challenging terrains.

Mercedes-Benz G 580 with EQ Technology, the first electric G-Class SUV, also known as the G-Wagen
Mercedes-Benz expects an EPA rating of 240 miles of range.

Mercedes-Benz

Mercedes-Benz G 580 with EQ Technology, the first electric G-Class SUV, also known as the G-Wagen
The new electrified G-Wagen succeeds because it stirs desire like virtually no other battery-powered vehicle available today

Mercedes-Benz

Conclusion

The Mercedes-Benz G 580 with EQ Technology not only meets the standards set by its fossil-fuel predecessors but also introduces new metrics of luxury and performance in the electric vehicle space. As it maintains its iconic aesthetics and top-tier capabilities, this electrified G-Wagen marks a pivotal moment in the evolution of luxury SUVs, offering a sustainable option that does not compromise on power or prestige. With its launch, Mercedes-Benz redefines what it means to drive a luxury electric SUV, making the G 580 a compelling choice for both traditional enthusiasts and eco-conscious drivers.

Nio Unveils the Onvo L60 SUV, Setting Sights on Tesla’s Model Y in the EV Market

Nio’s Strategic Launch of the Onvo L60 SUV

Nio, a leading Chinese electric vehicle manufacturer, has introduced the Onvo L60, the inaugural model of its new, more affordable brand. Priced at 219,900 yuan (approximately USD 30,476), the Onvo L60 is strategically positioned 12% below the Tesla Model Y, which is currently priced at 249,900 yuan in China. Set to begin deliveries in September, the Onvo L60 is designed to compete directly with the world’s top-selling EV, the Tesla Model Y, indicating Nio’s aggressive approach to capturing a larger share of the global EV market.

Competitive Edge and Market Expansion

During the vehicle’s launch in Shanghai, Nio CEO William Li highlighted the Onvo L60’s aim to balance superior customer experience with affordable ownership costs, directly challenging established models like the Toyota RAV4 and Tesla Model Y. The Onvo L60 boasts a proprietary 900-volt fast-charging system and an energy consumption rate of 12.1 kilowatt-hours per 100 kilometers, slightly outperforming the Model Y. Additionally, the vehicle offers more interior space than its Tesla counterpart, appealing to families looking for comfort and efficiency.

Nio’s Support Infrastructure and Collaborative Efforts

Nio supports Onvo L60 customers with an extensive network of over 1,000 battery swapping stations and 25,000 public chargers, enhancing the convenience of owning an electric vehicle. The company also promotes an EV battery rental program to provide flexibility in ownership. Looking to cut costs and remain competitive, Nio has partnered with domestic rival BYD for battery supplies, abandoning its initial plan to produce batteries in-house. This strategic move is crucial as Nio eyes expansion beyond China, despite potential challenges from the European Union’s anti-subsidy investigations into EV imports.

Nio Unveils Onvo L60 SUV, Challenging Tesla’s Model Y in the Competitive EV Market

Nio’s Strategic Launch of the Onvo L60

In a bold move to capture China’s cost-conscious electric vehicle (EV) market, Shanghai-based Nio has introduced the Onvo L60 SUV, the first model under its new Onvo sub-brand. Slated for a September release, the L60 is equipped with an autonomous driving system and is priced competitively at RMB 219,900 (USD 30,480), a strategic 12% lower than Tesla’s Model Y. This pricing strategy positions the L60 as a direct competitor to Tesla, aiming to attract consumers looking for value without compromising on technology.

Targeting Mainstream Consumers with Affordable Luxury

The Onvo brand, known locally as Ledao, represents Nio’s pivot towards serving a broader market segment, balancing premium features with affordability. At the Auto China 2024 expo, Nio’s CEO, William Li, highlighted Onvo’s mission to meet the evolving needs of Chinese consumers who increasingly prioritize both quality and economic efficiency. This shift is part of Nio’s broader strategy to distinguish itself from high-end competitors like BMW and Audi, as well as domestic rivals such as BYD and Xpeng Motors, which are also aggressively targeting the mass market with new models and competitive pricing.

Onvo L60’s Market Potential and Future Outlook

With the automotive industry in China experiencing a surge, Nio anticipates that the Onvo L60 will significantly contribute to its growth, especially given the vehicle’s appealing price point and advanced features. Early delivery figures from April suggest a positive reception, with sales figures dramatically exceeding those of the previous year. As Nio continues to focus on maintaining high quality without resorting to discounts, the company is optimistic that the Onvo L60 will not only compete effectively with Xiaomi’s SU7 but also establish a new standard in the EV market for value-driven consumers. The true impact of the Onvo L60 will become clearer as it reaches consumers later this year, potentially reshaping market dynamics in Nio’s favor.

As It Launches An Affordable EV, General Motors Wants ‘A Level Playing Field’ With China

GM President Mark Reuss weighs in on Biden’s tariffs on China, the Equinox EV, hybrids and more.

Even the executives at General Motors will admit that when it comes to the electric vehicle arms race, Chevrolet hasn’t really been in the game.

Its top-selling EV last year, the Chevrolet Bolt, carried the bulk of the entire company’s all-electric sales despite being largely unprofitable and discontinued in December. Meanwhile, more modern EVs on GM’s new Ultium platform faced quality issues, delays getting to market and repeated customer disappointments.

GM gets real with EVs in 2024

GM officials have said the bulk of the software and battery issues that plagued its EV lineup in 2023 are behind them. But now, it’s bringing new EVs to market at a time when sales aren’t as red-hot as they once were. Will new tariffs at least eliminate the immediate threat of Chinese EVs?

That’s all supposed to change soon as GM launches its first affordable modern EV, the Chevrolet Equinox EV, which offers up to 319 miles of range and should cost around $35,000 after tax credits. Then an even more affordable LT variant will debut later this year that should push the price tag into the high-$20,000 range after tax credits.

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With demand for affordable EVs at its highest-ever level, GM expects the Equinox EV to be a hit. And at least for now, it won’t have to compete against the threat of a flood of cheaper competitors from China, thanks to the Biden Administration’s recently announced 100% tariffs on EVs from that country.

“We just want a level playing field,” GM President Mark Reuss told InsideEVs at the Equinox EV’s launch event near Detroit this week. He said the fear is that competitors from China could come into the U.S. market not to seek profits necessarily, but to kneecap the local market.

“There are strategies where folks will get into a price war and not make money, but try to price things out of markets,” Reuss said. “It’s not even [China’s] supply chain, it’s their pricing strategy. We just want a level playing field to be able to price and make a profit and deliver value to our customers.”

The Biden Administration’s new tariffs quadruple those already in effect on Chinese vehicles and are designed to assuage fears that the country’s rising automakers could arrive in the U.S. with vastly lower prices than car companies here are prepared to deal with. A similar situation is happening right now in Europe, where local stalwarts like Volkswagen are quickly losing ground to new competition from China. In response, the European Union is examining similar penalties against Chinese EVs.

At the same time, critics have said that without the threat of competition from China’s auto industry—which accelerated rapidly amid copious government subsidies and a laser focus on battery technology and software—automakers that operate in America could be given license to slow-walk the electric transition. Or worse, abandon it entirely.

GM Mark Reuss

GM too has been accused of walking back some of its promises on that front. The leadership of its luxury division Cadillac recently said the brand will make internal combustion cars past the previously stated end date of 2030. And at the launch of the Equinox EV this week, GM officials have stressed the need to “let customers make the choice” while it has “feet in both camps.” Indeed, recent social media posts have led at least some followers to question GM’s overall commitment to EVs.

Still, GM is moving ahead on several all-electric models this year, including the Equinox EV, Silverado EV and Cadillac Optiq. The automaker is also rolling out more home energy solutions, including battery storage and equipment that allows cars like the Silverado EV to power entire homes.

“We’re playing in the heart of the market,” Reuss said of the Equinox EV. “For me, it’s really, really important to get a vehicle at that price point into the hands of everybody, and it just hasn’t quite been done yet.”

Reuss declined to elaborate on whether he saw GM competing with an automaker like BYD in the immediate term. “We already do in China,” he said. “Here in Michigan, I don’t know. But we aren’t going to price our way out of business to win. What we are going to do is offer great vehicles, a brand experience and a customer experience that’s hard to match.”

With the ink on Biden’s tariff announcement barely dry, Reuss said he was unsure of the potential impact on who GM might partner with for less expensive lithium iron phosphate (LFP) batteries or on potential retaliatory tariffs from China itself. There, GM has a fine line to walk; though its market share in China has declined in recent years, the country remains an incredibly important source of sales and revenue.

Meanwhile, GM recently reversed course on a decision not to develop and sell hybrid cars, particularly after their surprise success in 2023 with buyers not ready to go fully electric. GM sells a number of plug-in hybrid models in China right now.

Reuss said similar technology could be deployed on U.S. market cars, but those cars won’t be imported from China.

“That’s our tech,” he said. “We know how to do it, and we’re going to do a few. I can’t tell you what yet, but [they] wouldn’t be imported.”

Vauxhall unveils chunky new SUV – as it ditches plans to go fully EV in 2028

VAUXHALL has ditched plans to go fully electric in 2028 – promising to do “what is right for the British public”.

Every model from Corsa supermini to jumbo Movano van will have a battery-powered version by the end of this year.

Vauxhall design chief Mark Adams talks about the new Frontera and the decision to ditch the plan to go fully electric by 2028
It has the footprint of an Astra hatchback but the interior space of an Astra wagon
It has the footprint of an Astra hatchback but the interior space of an Astra wagon
Mark Adams says: 'The Frontera, back in the Nineties, was a pioneer for the compact SUV that we know today. So it was the natural fit for this car which is in the heart of the SUV market
Mark Adams says: ‘The Frontera, back in the Nineties, was a pioneer for the compact SUV that we know today. So it was the natural fit for this car which is in the heart of the SUV market

So everyone has the choice.

But the decision to continue making 27810688 and diesel vans beyond 2028 will please millions of loyal owners who can’t make an EV work for them.

Right up to 2035, then? We think so.

Here’s Vauxhall design chief Mark Adams on the rethink.

He said: “We’re not going to turn our back on the British customer.

“We want to give them what they need and what they want, as long as they need. We are part of a big group that enables us to do that.

“Who can predict what’s going to happen tomorrow? Governments change. Pledges change.

We can do what’s right for our customers. We are well positioned and we have a great portfolio.

“But we’ve got everything we need to meet all of the milestones ahead of us. We’ve got the toolbox we need now. We’ve got the future toolbox of where we need to land. And we are weaving in the right things that help us bridge that transition period.

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“We have hybrid, plug-in hybrid and fully electric. To now be fixed and say, ‘We’re going to do this’, I don’t think we need to, quite frankly, because we’ve got everything.

“We can do what’s right for our customers. We are well positioned and we have a great portfolio.”

Vauxhall launch UK’s cheapest EV & it comes with a year’s free charging at major supermarket

Which brings us nicely to the Frontera, pictured, Mark’s new baby.

It’ll come in two power types, £21k petrol hybrid and £25k pure electric. The petrol will have a seven-seat option. The electric won’t.

Now read our quickfire Q&A on the chunky family SUV.

Q&A Vauxhall design chief Mark Adams

FRONTERA is a famous old Vauxhall name. How did you settle on that for this new car?

The Frontera, back in the Nineties, was a pioneer for the compact SUV that we know today. So it was the natural fit for this car which is in the heart of the SUV market.

Size-wise, it sits between Mokka and the new, larger Grandland. Is that deliberate?

Yes. Exactly. Right in the heart of the market. It has the footprint of an Astra hatchback but the interior space of an Astra wagon. So really great packaging in this vehicle.

You look Peter Crouch-size to me?

6ft 4in and a half.

Can you fit in the back?

Yeah, of course. When the driver’s seat is set up for a normal person, I’ve still got seven to eight centimetres of leg room and the same above my head. So lots of interior space, ideal for a young family or just going out with friends.

It has all the tech you’d expect in a modern car but tell us about some of the smart everyday stuff as well?

We’ve got two 10in screens but a great balance of hard switches you can get to straight away. There’s a groove in the front seats, a bit like a high-quality bicycle seat with separate cushions, to give comfort on long journeys.

To stop your bum going numb?

Exactly. There’s lots of really nice materials that uplift the interior – and lots of little details like the flexible cup holder strap and rear seat pockets for iPhones. Just simple features people will really value.

I know you won’t say it replaces Crossland but it does the job of Crossland in terms of practicality, right? And it looks great.

We think it does much more because it offers not just physical space but more presence. The front is much more upright with a proud, confident look and a great stance.

Frontera will be with us early 2025. It should do well.

The interior has two 10in screens but also plenty of hard switches drivers can get to straight away
The interior has two 10in screens but also plenty of hard switches drivers can get to straight away

April Sees Average EV Price Drop to $55,252, Marking an 8.5% Yearly Decline

EV Price Trends and Comparisons

In April, the average price of electric vehicles (EVs) in the United States was $55,252, reflecting an 8.5% decrease from the previous year, according to Kelley Blue Book’s latest average transaction price (ATP) report. This figure remained relatively stable compared to March 2024, showing only a slight increase of $75 or approximately 0.1%. In contrast, the overall price of new vehicles, including combustion models and plug-in hybrids, rose by 2.2% year over year after three months of consistent decline.

Continued Price Disparity and Potential Changes

Despite significant reductions in recent years, EV prices are still around $7,000 higher than the industry average for new vehicles. This price gap may narrow as manufacturers like Ford plan to introduce more affordable EV models to attract American consumers. Notably, some prominent EV models saw substantial price drops in April: the Ford F-150 Lightning decreased by 23%, the Ford Mustang Mach-E by 15%, the Tesla Model Y by 12%, and the Hyundai Ioniq 6 by 10%. However, the majority of EVs experienced more modest price reductions of about 4% to 5% compared to the previous year.

Incentives and Market Dynamics

EVs continue to benefit from generous incentive packages, often ranging from 15% to 20%, including federal tax credits, dealer discounts, and regional incentives. While the average price of new vehicles increased compared to March, they still saw a 0.5% decrease year over year, with the industry average at $48,510. Luxury vehicle prices averaged $64,076 in April, whereas non-luxury vehicle prices rose to $44,989, a 2.1% month-over-month increase. Despite the higher costs, these incentives and ongoing price reductions suggest a positive trend towards making EVs more accessible to a broader range of consumers.

Hyundai’s Global EV Sales Decline for the Sixth Consecutive Month in April 2024

Decline in Global Sales

Hyundai Motor Company, encompassing both Hyundai and Genesis brands, reported a year-over-year decrease in global vehicle sales for April 2024, totaling 345,840 units, which marks a 3.3% drop. For the first four months of the year, the company saw a slight decrease of 0.3%, with 1,352,607 vehicles sold. This decline reflects a broader trend, as the company’s electric vehicle (EV) sales have also been falling for the sixth consecutive month.

Impact on EV Segment

In 2023, Hyundai’s global plug-in car sales surpassed 300,000 units, showcasing a 29% increase compared to the previous year. However, the trend reversed in 2024, with a notable decline of nearly one-third in plug-in sales volume. In April alone, Hyundai and Genesis sold 21,605 plug-in cars, a 24% decrease year-over-year, with all-electric car sales down by 27% to 17,398 units.

Market Analysis and Future Outlook

Despite the overall downturn, Hyundai’s EV sales in the U.S. have shown resilience, with models like the Ioniq 5 and Kona Electric continuing to perform well. Globally, the company’s plug-in hybrid car sales also experienced a 7% decline. Looking ahead, Hyundai remains committed to expanding its EV lineup and addressing the challenges in the market, aiming to recover and grow its share in the competitive EV sector. The start of the year has been challenging, but the company is focusing on strategic initiatives to bolster its position.

Tesla EV Maker Sued For…Polluting?

I know, EVs are supposed to be emissions free and good for the environment. But the truth is that building any vehicle–whether internal combustion or electric–is an energy-intensive process and can emit harmful chemicals. And as car companies go, Tesla may be one of the worst polluters around.

Bay Area Air Quality Management District regulators said, “Tesla violations are frequent, recurring, and can negatively affect public health and the environment.” Tesla landed on the 2023 Toxic 100 Air Polluters list, landing at number 89. In 2022, the government fined it $275,000 for two pollution issues. The first was not measuring, tracking, or recording its factories emissions. The second was not minimizing air pollutants caused by painting its cars.

Tesla has been sued by 25 of California’s counties for mishandling hazardous substances. Regulators actually checked factories’ dumpsters and found hazardous substances that shouldn’t be tossed in a landfill. In Germany, protestors are camped out in a forest Tesla wants to clearcut to expand its factory, complaining about water quality and other environment issues. And it looks like the startup is under fire for pollution again.

A nonprofit called the Environmental Democracy Project is targeting Tesla’s Fremont, California project. It is even suing the automaker. It’s claim? The company is “exposing nearby resident and workers to excessive nitrogen oxides, arsenic, cadmium and other harmful chemicals.”

So what if Tesla loses this lawsuit? Under the Clean Air Act, the company could face a civil fine as high as $121,275. But with the Model S MSRP at $74,630, that’s basically couch cushion change for Tesla.

So does making EVs pollute? The truth is that manufacturing and painting any car pollutes. And just because a car claims “zero emissions” while driving doesn’t mean zero lifetime emissions. So for car buyers concerned about the environment, it’s never a bad idea to investigate an automaker a bit.