It’s no surprise that Chinese electric vehicles undercut the price points of North American alternatives. To stave off the prospect of cheap EVs upsetting the car market here in the United States, the Biden Administration introduced substantial tariffs. However, critics say the tariffs could be anywhere from “poor leadership” to simply “not enough” to prevent cheap Chinese electric cars from challenging American alternatives.
Even with record-breaking restrictions, critics think the latest Chinese electric car tariffs are ineffective
Earlier this week, U.S. President Joe Biden and his administration levied 100% tariffs on Chinese electric cars among other imported goods. While the president asserts that the move is “intended to protect US jobs” from “unfair policies.” However, not everyone believes the move will be as beneficial as intended.
According to The Economist, the global trade system has benefited from a commendable decrease in worldwide tariffs. As such, the global GDP has increased threefold and then some. Tragically, critics state that President Biden’s latest tariffs have the potential to damage that growth.
Still, tariffs aren’t the only recent development with protecting North American-built EVs in mind. The U.S. Department of Energy restricts clean vehicle tax credit eligibility to vehicles with final manufacturing in North America. Not only does that restrict Chinese electric cars, but it also leaves European EVs out of the mix.
BYD Seagull | BYD
Shocking as it may seem, a 100% tariff may not be enough to block the importation of low-cost Chinese electric car models like the BYD Seagull, per CNBC. After all, the Seagull sells for the U.S. dollar equivalent of around $12,000 in the Chinese domestic market. Conversely, the most affordable EVs in the United States are around the $30,000 mark. For instance, the 2023 Chevrolet Bolt EV, one of the most affordable new EV options for American buyers, starts at $27,495.
Moreover, the tariffs don’t name Chinese imports in neighboring countries like Mexico. Consequently, we may see cheap EVs from Southeast Asia make their way into the United States via unconventional means.
Early adopters of EV technology had a common gripe beyond range anxiety and charging times: price. That is, in the United States. Chinese electric cars are cheaper and many American motorists would like the opportunity to buy a budget-friendly BYD EV. However, the latest tariffs make importing Chinese EVs all but impossible. While it might be a win for American brands, it harms the American consumer.
100% tariffs on Chinese electric cars means it’s unlikely we’ll see BYD, SAIC, NIO, or Geely electric vehicles any time soon
Just shy of 28%. That’s the sort of tariff Chinese-built EVs had to contend with prior to the latest developments. It was more than enough to disincentivize Chinese electric car efforts for the U.S. market. However, the latest tariffs are more than steep, they’re prohibitive. U.S. President Joe Biden and his administration levied 100% tariffs on new Chinese EVs and solar cells. According to the BBC, the administration asserts that the measures are “a response to unfair policies and intended to protect US jobs.”
Like the previous round of tariffs, the maneuver makes it nearly impossible to import Chinese-built EVs. While it’s understandable that the U.S. Government would want to protect the country’s North American clean vehicle initiatives from cheap Chinese EVs, it does impact the American consumer negatively. Currently, affordable Chinese electric cars ship worldwide, giving consumers access to affordable electric vehicle technology, especially those urban commuters.
Of course, a solution would be cheaper US-made EVs from domestic marques like Tesla, Ford, and GM. Tragically, the Chevrolet Bolt EV, one of the cheapest new EVs on the American market, started at around $27,495 for 2023. Conversely, the BYD Seagull, a compact Chinese electric car, sells for around USD 12,000 in the domestic Chinese market.
A BYD EV charges | brunocoelhopt via iStock
It’s not just Chinese EVs, either. The U.S. Government recently overhauled the Department of Energy’s (DOE’s) standards for which EVs qualify for the federal clean vehicle tax credit. According to the DOE, all qualifying electric vehicles must “undergo final assembly in North America.” As such, several European models will no longer qualify for the $7,500 incentive.
However, there is one loophole shoppers can exploit when it comes to foreign EVs. The IRS exempts foreign-built EVs from the restrictions as long as drivers lease rather than buy. Still, buyers who want up to $7,500 in federal credits on a new EV will have to opt for a North American-finished EV like the Ford Mustang Mach-E.
Electric cars have become immensely popular due to technological advancements and growing environmental concerns. However, some drivers are still hesitant to switch to EVs, citing a few legitimate fears. In this context, let’s explore why some people say no to electric vehicles.
High Initial Cost
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In addition to the increased cost of the vehicles, EVs often require specialized home charging equipment, which can add to the upfront investment. Moreover, while EVs generally have lower operating costs over time due to cheaper electricity than gasoline, budget-conscious consumers may hesitate to switch due to this upfront investment.
Limited Model Options
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As the electric car market grows, the number of available versions also expands. However, compared to gasoline-powered rides, some drivers still perceive the available options for electric cars as somewhat restricted. Also, certain features or specifications that drivers are familiar with in ordinary automobiles may not yet be widely obtainable in electric models.
Long Charging Times
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Charging an EV, even at fast-charging stations, can be inconvenient because it requires significantly longer charging times than a gasoline car’s quick refueling time. This discrepancy can be particularly burdensome for drivers managing busy schedules, as the need for extended charging sessions can disrupt daily routines and plans, potentially leading to delays.
Limited Charging Infrastructure
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In numerous regions worldwide, charging stations are scarce, and drivers find this inconvenient, especially during long-distance travel. Furthermore, insufficient charging sites impede the transition towards cleaner transportation and hampers efforts to reduce greenhouse gas emissions. Addressing this issue requires substantial investment in expanding charging networks, collaborating with governments and private stakeholders, and implementing innovative solutions.
Home Charging Constraints
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Not all drivers can access the ideal home charging setup, such as a garage with a dedicated charging station. Parking may also be limited in urban areas or apartment complexes, and installing charging infrastructure can be challenging due to regulations or space constraints. Additionally, renters may face obstacles in getting permission from landlords to install chargers.
Insufficient Battery Capacity
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Another reason people avoid EVs is the insufficient and sometimes unreliable battery capacities. As a result, users fear running out of battery charge before getting to the nearest charging station. This apprehension is particularly true for individuals who frequently embark on long-distance journeys, where access to charging setups may be uncertain.
Concerns About Battery Life
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Concerns about battery life in electric cars extend beyond their lifespan and replacement costs. Factors such as degradation over time, influenced by temperature, charging habits, and driving patterns, play vital roles. Additionally, the environmental implications of battery production, recycling, and disposal further contribute to the discourse surrounding electric vehicle sustainability.
Environmental Impact of Battery Production
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The environmental effects of producing batteries for EVs extend beyond manufacturing. It encompasses extracting raw materials like lithium, cobalt, and nickel, which often involves environmentally damaging mining practices. Additionally, the refinement and processing of these minerals require significant energy inputs, contributing to greenhouse gas emissions and exacerbating climate change.
Cold Weather Performance
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Electric car batteries are less efficient at low temperatures due to slower chemical reactions. This inefficiency can reduce the automobile’s range as the battery struggles to maintain optimal output. Moreover, heating systems to keep the cabin warm further drain the battery, exacerbating the issue.
High-Temperature Performance
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In extreme heat, battery performance may degrade faster due to increased energy consumption for cooling systems. This increased power usage also leads to lesser travel distance and a frequent need for charging. These limitations restrict the usability of EVs in tropical areas, necessitating further advancements in battery technology.
Perceived Lack of Power
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Despite their remarkable acceleration capabilities, some drivers still consider electric cars to lack the visceral power and delivery commonly associated with traditional combustion engines. This perception stems from limitations on travel distance, charging infrastructure, and the overall driving experience, which may not match that of a gasoline-powered vehicle.
Lack of Familiarity with EV
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Many drivers are used to the convenience and familiarity of traditional gasoline-powered cars. They understand how gas stations work, the range they can expect from a gas tank, and the ease of refueling on long trips. Switching to EVs may seem daunting because it involves learning new applications and adapting to different driving experiences.
Incompatibility with Lifestyle
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Drivers who frequently tow heavy loads, engage in off-road activities, or require large cargo capacities may find the current offerings of EVs unsuitable. Electric cars often struggle with towing heavy loads due to limitations in battery life and power delivery, lack traditional automobiles’ ruggedness and off-road capabilities, and may not offer sufficient cargo space.
Depreciation
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The depreciation rate for electric cars revolves around factors like battery degradation. Potential buyers may hesitate to invest in EVs because they fear the car’s resale value could plummet as the battery ages and loses capacity. This concern intensifies due to the rapid improvements in battery life, which could render current models obsolete sooner than anticipated.
Uncertainty About Future Technology
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The rate of advancements in EV technology causes fears that newly purchased versions could swiftly become outdated, rendering them less efficient or desirable compared to newer models. This uncertainty may prompt consumers to weigh their options carefully, considering factors such as the longevity of current systems and the potential for future upgrades or obsolescence.
All-electric cars already represent roughly 90% of total new passenger car sales in the country.
Years of exceptionally high sales of electric cars gradually changed Norwegian roads, where soon it will be easier to spot an all-electric car than a gasoline car.
According to Statistics of Norway and the Norwegian Public Roads Administration (via Reuters), by as soon as the end of this year, the number of all-electric cars will surpass the number of gasoline cars in Norway. That’s because the internal combustion engine vehicle fleet is consistently decreasing every year, while the all-electric car fleet is increasing.
More EVs than gasoline cars in Norway in 2024?
There are close to 700,000 all-electric cars registered in Norway. The country might reach 800,000 units in 2024/2025. The number of gasoline cars is estimated at 775,000 and is decreasing.
The data shows that there were some 775,000 gasoline cars in the country, compared to about 700,000 all-electric ones. Assuming 80,000-100,000 sales in 2024, and a decreasing number of ICE vehicles, EVs soon will outnumber gasoline cars.
However, it might take a few more years until EVs overtake diesel cars, which are still at over one million units.
Norway’s car fleet by fuel type (March 2024):
Diesel: 1,068,929
Gasoline: 776,003
All-electric: 700,358 (24.3% share)
Hybrid: 339,724 (including almost 200,000 PHEVs)
Total: 2,885,014
Norwegian EV share is significantly higher than in other countries because electric car sales were high over a long period of more than a decade. This year, the share of all-electric cars is stable at 90% (over 92% when including plug-in hybrids).
However, the recent registration data indicates that the number of car registrations (total and all-electric) is decreasing in Norway. In March, there was almost a 50% drop in total new passenger cars and plug-ins in particular.
Plug-in passenger car registrations last month (YOY change):
BEVs: 8,709 (down 48%) and 89.3% market share
PHEVs: 210 (down 75%) and 2.2% market share
Total: 8,919 (down 49%) and 91.5% market share
In Q1, more than 20,500 new passenger plug-in electric cars were registered in Norway, which represents about 92% of the total car sales.
Plug-in car registrations year-to-date (YOY change):
BEVs: 20,073 (down 17%) and 90.2% market share
PHEVs: 451 (down 71%) and 2% market share
Total: 20,524 (down 20%) and 92.2% market share
For reference, in 12 months of 2023, 114,759 new plug-in electric cars were registered in Norway (90% of the total volume), 25% less than in 2022.
Here is a quick look at the share of passenger car registrations by fuel. In recent months, the only thing that matters is all-electric cars. The best of the rest are non-rechargeable hybrids.
Without incentives for PHEVs, the PHEV segment will be marginalized in 2024.
In terms of the best-selling cars, in Q1 the Tesla Model Y continues to be the number one overall with 4,704 new registrations (20.4% of all car sales). The next two most popular models in the country were the Toyota bZ4X (1,324) and Volkswagen ID.4 (924).
Top 20 new passenger car registrations in Norway – 2024 YTD source: the Norwegian Road Federation (OFV)
