Summary:
- The US Federal Government has just announced that there will be new tariffs on imports from mainland China for EVs and EV parts
- Full EVs will go from 25% to 100%, assembled batteries from 7.5% to 25%, and battery components from 7.5% to 25%
- The rationale is to deny China cornering the supply chain for EV and hybrid parts, as well as promote local and friendly nation economies
- Economically, this is intended to boost local jobs and investment, as well as encourage better trade between friendly nations and the US. It will, in the short term, likely see the rise of EV and hybrid vehicle costs by a significant amount.
- We think that if all the “What if’s” line up correctly, this could actually drive down the price of EVs and hybrids once the supply chain reaches local and friendly saturation… if it does.
Despite the seeming disinterest in EVs by consumers as a whole in 2024, automakers are still engineering, designing, and releasing their battery powered vehicles. Importantly, these batteries are also often used in plug-in hybrids, allowing for a more streamlined supply stream.
Behind the scenes, however, there has been discontent, rivalry, and sometimes outright hostility between Western automakers and mainland China. The latest conflict, that of tariffs and imports, has just launched into a full scale economic “war.”
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