Chinese EVs Can Undercut American EVs Even With Tariffs

The bitter trade war between China and the West means we’re missing out on cheap, well-built Chinese EVs in the U.S. But when you're at the top of your game, tariffs can only sting so much.

Despite the hefty 100% tariff on Chinese-made electric cars, some of them can still undercut American-made EVs on price if there were to ever land on our shores.

Welcome back to Critical Materials, your daily dose of news shaping up the world of electric cars, software defined vehicles and autonomous tech. Also on today's agenda: wireless charging for electric cars is inching closer to commercial reality and Stellantis is facing some heat from United Auto Workers (UAW), which plans to hold a strike authorization vote soon.

30%: The Problem With War Is That Someone Has To Lose

The U.S. Trade Representative said last week that Biden's punitive tariffs on electric cars will finally go into effect on September 27. That's after several delays and looming uncertainty over the continuation of the current EV policies—tax breaks for buyers, incentives for local factories and so on—as the November election approaches.

The tariffs intend to shield domestic automakers from a potential flood of affordable, high-quality Chinese EVs. But a new report from Japanese outlet Nikkei Asia reminds us that the tariffs, no matter how punitive, still have some limitations.

Here's what the report says: 

In the U.S, not even front-runner Tesla has broken into the sub-$30,000 price range. There are no American EVs as cheap as gasoline-powered vehicles yet.

Joe McCabe, CEO of U.S. research company AutoForecast Solutions, said BYD's lowest price in the U.S. is $12,000. Even with a 100% tariff, BYD will have the cheapest EV in the market at under $25,000.

They may not be American, but there are some EVs that start at under $30,000 in the U.S., like the Nissan Leaf which costs a shade above $28,000 before taxes and fees. But it's true that EVs in the U.S. still aren't cheap, not without tax credits, lease and financing offers or the used market anyway.

That reminds of me of the $12,000 BYD Seagull, a fashionable little hatchback rocking Blade batteries and features from cars a segment above. If it hit U.S. shores, it would cost twice as that—but still undercut the Tesla Model 3s and Chevy Bolt EVs.

Sure, it's no range monster with its 39 kWh battery pack covering only 251 miles on the overly optimistic China Light-Duty Test Cycle (CLTC). But at that price, it would still offer value to users that don't munch miles all that often. 

In China, the Seagull is so popular it’s edging out gas cars and speeding up the country’s already impressive EV revolution. It's gaining respect even internationally, as it was Japan's 2023 EV Of The Year. 

The whole point of the tariffs is to allow America's homegrown industries some breathing room to build a BYD Seagull of our own, made in American factories, using American batteries and components. 

But according to the report above, China argues that the tariffs only disrupts the global supply chains and won't really help the U.S. become competitive where it needs to be. Not without teaming up with Chinese car and battery makers anyway.

60%: Wireless Charging Is Gaining Momentum

Wireless charging can be a small ergonomic improvement for your home. Just like your smartphone, you can come home after work, align your EV on a wireless charging pad and declutter the garage with fewer cables.

To be clear, the plugs and cables are not going anywhere. In fact, Level 2 and Level 3 charging infrastructure is only poised to grow in the U.S. But automakers see a business case for wireless charging.

In August, the Society of Automotive Engineers established the standard J2954 for wireless pads. Now a new report says that the technology is nearing commercial viability, with huge improvements in power density, efficiency and weight reduction. Plus, the standard would ensure that it works uniformly across brands.

So how does this exactly work? Instead of plugging in, you park over a special charging pad embedded in the ground. This pad transfers electricity to a receiver on the car using magnetic fields—a process called inductive charging.

When the car is aligned with the pad, the magnetic field is picked up by the car’s battery without cables. It's convenient because you don’t have to manually connect anything, but it’s generally slower than plugging in. 

Here's more from Automotive News:

The J2954 standard, covering software and hardware, is based on technology developed by German supplier Mahle.

The company's Differential Inductive Positioning System uses a low-intensity magnetic field generated from coils in the ground charging pad that is picked up by coils in the charging equipment on the vehicle.

The system carries out a test to ensure the vehicle is aligned. SAE's Wireless Power Transfer team said the standard has demonstrated wireless charging up to 11 kW with 93 percent efficiency.

There's a lot of quiet development happening in this space. Volkswagen has already tested wireless charging on a Porsche Taycan. Tesla has already equipped the Cybertruck with a connector and a harness for an "inductive charger." And Hyundai and wireless charging company Witricity have been running tests in Korea. 

There would be some obvious challenges, like making them durable and affordable. But it's pretty clear that this is not some classroom science project. The way things are moving, we could see this become a reality at some point in the future.

90%: Stellantis Faces Heat From UAW

The UAW is threatening a potentially disruptive strike against Stellantis. The union plans to hold a strike authorization vote in the coming days, against what it call the automaker's failure to keep up with the industry and its own commitments made last year after a historic walkout.

As Reuters reported today, local Stellantis chapters have submitted grievances against Stellantis' alleged plan to move production of the Dodge Durango abroad—something the automaker has not confirmed yet.

The union also highlighted the Belvidere, Illinois assembly plant. The automaker closed that factory last year, leading to 1,200 workers losing their jobs. Stellantis committed to spending $1.5 billion to re-open the plant following negotiations with the UAW.

"It's not every day that we the auto workers are on the same side as the dealers, the same side as the suppliers and the same side as the shareholders," UAW President Shawn Fain said in a statement. "But today is that day, and we are prepared to take strike action to make Stellantis keep the promise."

100%: Are You Open To Wireless Charging?

There's only one way to refuel a gas car: pull up, pump, and go. But the EV charging industry is still relatively young. It's still evolving, with no one-size-fits-all solution. That’s why the industry keeps innovating to make charging faster and hassle-free.

If wireless charging takes off, would you make the switch? Why do you think it might be better (or worse?) than your trusty Level 2 home charger? Leave your thoughts in the comments.