What Americans should know about Chinese cars
The Paris Motor Show is Europe’s largest automotive display. But, walking the floor this month, it didn’t feel European. Chinese cars dominated.
Sixty-three manufacturers displayed cars at this year’s show — 27 from Europe, 23 from China and just 13 from the rest of the world.
Chinese brands had the largest displays, the most new cars to show off, and frankly, the most energy.
Chinese automakers are largely blocked from selling cars in the United States. But that may not be true forever, and in parts of the country, we already see Chinese cars on American roads from time to time.
Outside the U.S., China’s automakers are a juggernaut
China now builds, buys and exports more cars than any other country.
Chinese automakers build gas-powered cars and hybrids, but dominate electric vehicle production and exports. Low labor costs and a largely domestic supply chain help keep costs low.
That often lets them price cars lower than competitors from the U.S., Europe and the rest of Asia. Once they enter a market, they can grow quickly.
Last month, the bestselling car in the U.K. was the Jaecoo J7, which looks like a Range Rover but sells for less.
Chinese automakers have rocked the global auto industry with their speed. While America’s car companies often need five years or more to bring a new car from idea to showroom floor, their Chinese rivals can do it in two years or less.
The cars are impressive
A colleague and I got firsthand experience with several Chinese cars at the Paris show this year, testing models from mainstream brand Geely and its luxury brand Zeekr on the streets of Paris and a racetrack outside the city.
From the driver’s seat, a Geely feels much like an electric car from Toyota or Chevrolet. Take the badges off, and a driver could easily mistake a Zeekr for something from a high-end European brand.
They’re stylish and modern, with familiar levels of fit-and-finish and impressive performance even at high speeds.
They’ll be on all sides of us soon
Chinese-made cars are already common in Mexico. China’s JAC Motors builds cars there, and several Chinese brands plan to open factories across our southern border.
They’ll be in Canada soon, too. Following tariff disputes with the U.S., the Canadian government this year agreed to let in 49,000 Chinese EVs per year at a low tariff rate. That number could increase to 70,000 after five years.
Cars registered in Canada and Mexico can legally cross into the U.S. for limited periods, though they can’t generally be sold here.
Chinese brands like BYD could become more common sights on American roads.
They aren’t allowed to sell here … for the most part
A few cars sold by familiar brands have Chinese ties. Ford builds its Lincoln Nautilus in Hangzhou. Buick builds the Envision SUV in Shanghai. China’s Geely owns both Volvo and Polestar, though both sell vehicles manufactured outside China.
Otherwise, Chinese automakers are broadly restricted from the U.S. market today.
Two policies keep most Chinese cars out of the American market. A 100% tariff on Chinese EVs imposed during the Biden administration makes selling in the U.S. financially unfeasible for many.
Federal restrictions on Chinese-derived software also keep most from the U.S. market.
A bill before Congress would further restrict Chinese automakers’ access to the U.S. market, but its prospects are unclear.
They’re clearly planning on finding ways around that
Chinese automakers, however, may be laying the groundwork to sell in the U.S.
Why was Kelley Blue Book testing Geely and Zeekr cars in France? Because the company asked us to.
Many Chinese automakers invited American media to the Paris show. Their executives spent the week networking with American reporters — an odd thing to do if they never plan to sell cars here.
I asked executives from half a dozen Chinese companies whether they planned to enter the U.S. market. None would answer directly. But they clearly want relationships with the American automotive press.
Several plan to bring cars to CES, the big consumer electronics convention in Las Vegas next January.
On the record, leaders of Chinese automakers play coy about plans to sell in the U.S. But they are behaving as if, after their charm offensive with European buyers, they’ll make similar moves here.
That could be good and bad
Chinese cars could help solve one of the auto industry’s biggest problems — affordability. The average new car buyer paid over $50,000 last month. More competition could bring prices down.
But America’s automakers are worried about the competition, and they should be. Through their lobbying arm, the Alliance for Automotive Innovation, they have endorsed legislation to ban Chinese automakers from the U.S., warning that Chinese cars might be “capable of collecting, processing and transmitting sensitive vehicle and consumer data to the Chinese Communist Party.”
There’s a precedent in the Reagan years
Some readers may remember similar concerns over whether Japanese cars could come to dominate the U.S market in the early 1980s. The Reagan administration responded by pressuring Japan to voluntarily limit its car exports to the U.S. The agreement gave American automakers time to become more competitive and helped Japan avoid stricter trade restrictions.
We’ve seen no similar proposals for Chinese cars. But the growing global role of China’s automakers echoes that time.
Sean Tucker is a managing editor for Kelley Blue Book. He’s based in Washington, D.C., where he has covered the auto and energy industries for a quarter-century.
The Steering Column is a weekly consumer auto column from Cox Automotive. Cox Automotive and The Atlanta Journal-Constitution are owned by parent company, Atlanta-based Cox Enterprises.