BYD, the Chinese electric giant backed by Warren Buffett’s Berkshire Hathaway, has global ambitions and is expanding its presence in countries like… Japan, Thailand and Mexico to sell its highly inexpensive electric vehicles worldwide. But one market is noticeably missing: the USA
The U.S. electric vehicle market is in a “very confusing period” because of slower consumer adoption, said Stella Li, CEO of BYD Americas said Monday. “Electric vehicle penetration in the U.S. has actually declined,” she explained.
Presentation on the Milken Institute Global Conference in a gathering moderated by Fortune’s Diane Brady, Li reiterated that the Chinese EV giant has “no plans to sell in the US” after similar comments were made in February.
Washington is attempting to get China out of the electrical vehicle supply chain. Recent laws denies tax credits for vehicles that use Chinese components reminiscent of batteries. On Monday, Li said geopolitics had a “big impact” on BYD. “The U.S. is becoming a very protective market,” she said.
In March, President Joe Biden warned that Chinese cars could pose a national security risk because software within the automotive could collect data concerning the environment and transmit it back to Beijing.
Meanwhile, former President Donald Trump has threatened to impose a tariff of as much as 100% on Chinese vehicle imports if elected in November. The Trump administration previously increased the tariff on Chinese automotive imports to 27.5%.
On Monday, Li expressed hope that after the US elections in November “everything will be back to normal” when people “become more solid and think about what the future solution is here”.
“Not fair”
It’s not only Chinese automotive manufacturers which might be attracting attention.
Last 12 months members of Congress criticized a proposed three way partnership between Ford and Chinese battery giant CATL in Michigan, claiming it could lead to US government money flowing to a Chinese company.
Congress can also be considering laws that may prevent Chinese biotech firms from working with government-funded medical providers.
Officials are also reportedly concerned concerning the use of Chinese cranes at U.S. ports, fearing that such machines could send data back to China. In February, the Biden administration pledged $20 billion in spending on port infrastructure, including domestic crane production.
On Monday, Li complained that it was “not fair” that Chinese firms were routinely seen as working hand in hand with the Chinese government.
The BYD manager referred to the present debate about TikTok, which is owned by the Chinese technology company ByteDance. In April, the Biden administration signed a law requiring ByteDance to sell TikTok inside nine months under threat of a ban. TikTok sued the US this week to dam a ban, sparking a fight against the First Amendment.
Li asked why TikTok required such scrutiny. “Even President Biden uses TikTok, so why do they have to ban it? [it]?”
BYD’s global expansion
BYD, which sells each battery-electric vehicles and plug-in hybrids, is by far the biggest seller of “new energy vehicles” in China. The company is now targeting foreign markets as a part of an aggressive expansion campaign. BYD is constructing production facilities in Hungary, Thailand, IndonesiaAnd Brazil.
Cheap Chinese electric vehicles from firms like BYD are actually causing a backlash. Last October, the European Union launched an anti-subsidy investigation into Chinese-made electric vehicles, including those made by BYD. The investigation could lead on to tariffs on Chinese automotive imports.
BYD, in turn, argues that the low prices are because of “management efficiency” and investments in technology.
On Monday, Li really useful that the US should take over China’s “leading” electric vehicle supply chain. “They will bring the best technology to the country,” she continued.
U.S. officials are learning they cannot completely cut China out of the electrical vehicle supply chain. Last week, the US agreed to permit automakers to make use of Chinese graphite, a critical battery material still qualify for tax credits.
