Fully-electric cars in the U.S. are facing a price problem, as they are simply too expensive. This high price is hindering the adoption of electric vehicles, but Axios suggests that cheap Chinese EVs could be the solution. These affordable EVs could help accelerate the transition to electric vehicles in the U.S., but first, they need to be imported and legally sold in the country.
However, there are a couple of obstacles to overcome. U.S.-China trade tensions have led to a 27.5 percent tariff on cars built in China. Additionally, the U.S. government has been encouraging the domestic production of EVs through federal tax credits to reduce dependency on Chinese supply chains.
Despite these challenges, the average price of EVs in the U.S. remains high, close to $55,000. The Chevy Bolt, which was temporarily the cheapest EV in the country, was discontinued due to recall issues that cost GM billions. It will be reintroduced, but the price is unknown.
In comparison, popular budget EVs in China, such as the Wuling Mini EV, sell for around $4,100. While cultural and commercial factors contribute to the price difference between budget cars in the U.S. and China, Chinese EV makers are aiming for global-scale success. Companies like BYD, Great Wall Motors, and Geely have already dominated the Chinese market, which accounts for 60 percent of global EV sales. They are now expanding into Europe, where Chinese EVs are projected to make up 20 percent of EV sales by 2025.
Chinese carmakers recognize the potential of the U.S. market and believe it is too big to ignore. Chinese-built vehicles, such as the Buick Envision, are already sold in the U.S., so it is plausible to expect that Chinese EVs that conform to the budget vehicle category could enter the market.
Chinese car manufacturers are also establishing a presence in North and South America, including investments in EV production in Mexico and Brazil. Axios suggests that it won’t be long before Chinese EVs start entering the U.S. market to fill the gap left by American carmakers who are reluctant to produce cheap EVs.