Donald Trump spent three days in Beijing last week. Among the things they discussed was the American and Chinese automotive industry. The United States has kept the Chinese autobuilders out of this country through tariffs and rules, but the huge and wily Chinese builders of electric vehicles are starting to twist their way into America.
Waymo is quickly expanding its self-driving car business across the United States. The Jaguar-built cars have served them well, but they were built for big baggy software packages. Waymo’s newly designed self-driving cars are specially built by a division of Geely, a large Chinese autobuilder. With Google’s clout they have been able to bring them to Arizona, where they are fitted with the new Waymo software.
Waymo has made the shrewd decision not to build its own vehicle. Let the Chinese or Koreans or even the Americans do it. They will make the special “value added” part.
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According to a recent Wall Street Journal piece, Chinese cars made by BYD, Geely, Chery and others are being sold at dealerships in Juarez, Mexico, and being legally driven into El Paso and Laredo, Texas, by “tourists.” This avoids the 100% tariffs and US inspection rules.
It’s a way to get visibility in the Southwest and establish credibility as they await the go-ahead to build cars in Mexico and eventually in the United States. I imagine this was a topic at the Trump/Xi meetings.
I can easily see Ford, GM, and Stellantis establishing joint projects to build electric trucks and SUVs in the US within the next year or two. Stellantis and Tata, the Indian builder, announced an agreement yesterday to develop vehicles together for the North American market.
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Another long piece a few days ago in the Wall Street Journal discussed Ford setting up a group of Silicon Valley stalwarts, engineers, and auto non-conformists as a “skunkworks” team to figure out how the company can build a $30,000 electric truck in the United States.
The experiment with the outsiders’ group may be Ford’s last chance before a direct confrontation with Chinese auto builders on their home turf. Ford management knows it would be nearly impossible to do it internally after the Ford F-150 Lightning fiasco. The company has taken an enormous loss, though it is still building a few vehicles. Even Tesla has failed in its efforts to build a profitable electric truck in America.
The problem for electric trucks being built for the US market is the 300-mile range limit before needing to recharge (in the best of weather with a small load).
Evidently, all of the builders, including the Chinese firms, believe better batteries will soon be available to increase mileage range.
Should American auto manufacturers collaborate with Chinese companies or try to beat them by themselves?
Question: How have the 100% tariffs on Chinese products helped your business? How have they hurt it?
