Ford Faces Tough China Competition
It could be argued that no successful EV companies exist in America beyond Tesla. Ford and GM have lost billions of dollars trying to enter the sector. Only a tiny portion of their total US sales are EVs. GM and Ford US profits are mostly from SUVs, crossovers, and pickups, most of which have poor gas mileage and are polluters. Ford, in particular, tried to unlock the market using its most famous brands–the F-150 and Mustang. The Lightning and Mach-E have minute monthly sales, and Ford’s $30 billion EV investment plan is in tatters. Several Chinese car companies are about to enter the American car market, worsening Ford’s EV problems.
EV Trouble —Rivian’s Failure
Ford Struggle —F-150 Lightning
First among the Chinese EV companies is BYD, the largest EV company in the world, as it surged ahead of Tesla this year. It is known for making quality cars with price points below $20,000. It recently launched a luxury car brand, which means it could eventually compete against BMW, Cadillac, Lincoln, Mercedes, and Lexus in the US market. Lincoln is Ford’s luxury nameplate.
Market Leader BYD
BYD is one of many car companies that could come to the US soon. But there are others. Among the most well-funded Chinese EV operators is Aito, which is owned by China’s huge consumer electronics company Huawei. Apple was not able to build an EV. Huawei appears to have had little trouble. According to Bloomberg, “Aito shipped 21,142 vehicles in February, according to data released by its manufacturer, topping all Chinese electric vehicle upstarts.”
The current administration has tried to block the sale of Chinese cars in America. Among the reasons given is that these Chinese cars are a security threat. There were already tariffs on Chinese vehicles and the EV credit system in the US has been set up to keep China out of the domestic car sector completely.
Tariffs will not work. BYD has considered putting a plant in Mexico to avoid high tariffs. However, the future of Chinese EVs in the US will go beyond that. Americans won’t let inexpensive, quality EVs to be permanently blocked from the market. The billions of dollars Ford has put into EVs for the American market are about to look even more foolish.
