Chinese EVs Plan to Wreck Ford and GM

"Chinese electric vehicle companies have the United States surrounded. The moat between their current status and a successful move into the U.S. is tariff levels that make doing business in America less than economical. What are the chances that Chinese EVs will break into other large markets? Klaus Zyciora, a former Volkswagen designer who is head of design at state-owned automaker Changan, told the Wall Street Journal, "You need to go global. Toyota did it. Ford did it. GM did it.""

"It is worth remembering that Toyota Motor Corp. ( NYSE: TM) first sold cars in the U.S. in 1958. Today, it is the second-largest manufacturer in America, based on unit sales. It faced high tariffs early on. The world moves much faster now. A Chinese EV expansion into the U.S. could come very quickly, if tariffs are dropped."

"The current Chinese EV battle in the U.S. is between letting American consumers have access to inexpensive, well-built EVs, or, on the other hand, the protection of Ford Motor Co. ( NYSE: F) and General Motors Co. ( NYSE: GM). Ford CEO Jim Farley has already expressed a staggering fear about the quality and price of China's EVs."

Chinese electric-vehicle manufacturers are expanding into Mexico and Europe and already hold over 7% of Europe's market. Tariff levels currently make direct entry into the United States uneconomical. A successful U.S. expansion could occur quickly if tariffs are lifted, mirroring historical examples like Toyota's post-1958 growth despite early tariffs. Chinese companies face a strategic choice between offering inexpensive, well-built EVs to American consumers and confronting protectionist measures advocated by legacy automakers. Established U.S. manufacturers may struggle to match Chinese prices and quality. Trade policy shifts could rapidly change market access and competitive dynamics.

Read at 24/7 Wall St.