Tesla Inc TSLA CEO Elon Musk on Wednesday commended China and its manufacturing and infrastructure capabilities on the heels of the U.S. quadrupling tariffs on Chinese EVs.
What Happened: “China is awesome. Those who have not visited have no idea,” Musk wrote. “Compare high speed rail there and here.”
The billionaire CEO was responding to a Tesla enthusiast who mocked the irony of the U.S. relying on China for manufacturing but also increasing tariffs on China-made EVs, citing risks to domestic EV makers.
New Tariffs On EVs From China: President Joe Biden on Tuesday hiked tariffs on an array of Chinese imports including EV batteries, steel and aluminum, and solar products. The government also imposed a 100% tariff on electric vehicles made in China, quadrupling it from the previous 25%.
Biden administration further implemented a 25% tariff on electric vehicle batteries from China and a 25% tariff on critical minerals that go into making these EV batteries.
“Because we're not going to let China flood our market, making it impossible for American automakers — automobile — auto manufacturers to compete fairly,” President Joe Biden said about the decision. “Folks, look, I'm determined that the future of the electric vehicles will be made in America by union workers. Period.”
Why It Matters: Musk has previously commended China’s EV capabilities. During Tesla’s fourth-quarter earnings call in January, the CEO said, "Frankly, I think if there are not trade barriers established, they will pretty much demolish most other car companies in the world. So they're extremely good.”
In the last quarter of 2023, BYD took over Tesla in battery electric vehicle (BEV) sales by selling 526,000 BEVs, surpassing Tesla’s global delivery count of 485,000. Tesla, however, took back its crown as the global best-selling EV maker in the first quarter of 2024.
BYD does not deliver in the U.S. Several other Chinese EV players too have stayed out of the American market owing to the high tariffs and tensions between the two countries.
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