Chinese EVs are 'driving into Mexico' — and it's starting to worry the US

Yahoo Finance06-14

Four years after the United States-Mexico-Canada trade agreement (USMCA) was adopted, Mexico and the US face a common concern: the prospect of cheap Chinese electric vehicles dominating a fast-growing...

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overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nChinese EVs are 'driving into Mexico' — and it's starting to worry the US\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-06-14 05:01 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://finance.yahoo.com/news/chinese-evs-are-driving-into-mexico--and-its-starting-to-worry-the-us-210133299.html><strong>Yahoo Finance</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Four years after the United States-Mexico-Canada trade agreement (USMCA) was adopted, Mexico and the US face a common concern: the prospect of cheap Chinese electric vehicles dominating a fast-growing...</p>\n\n<a href=\"https://finance.yahoo.com/news/chinese-evs-are-driving-into-mexico--and-its-starting-to-worry-the-us-210133299.html\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":null,"symbol_name":null,"start_time":0,"source_url":"https://finance.yahoo.com/news/chinese-evs-are-driving-into-mexico--and-its-starting-to-worry-the-us-210133299.html","article_id":"2443865644","we_media_id":null,"thumbnails":["https://s.yimg.com/uu/api/res/1.2/WDg6O9jj28oAso5hx8g4Lw--~B/aD01NzYwO3c9ODY0MDthcHBpZD15dGFjaHlvbg--/https://s.yimg.com/os/creatr-uploaded-images/2024-06/845f75a0-2991-11ef-90eb-63187da10cde"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2443865644","pubTimestamp":1718312493,"sourceInfo":{"source_id":"yahoofinance","name":"雅虎金融"},"weMediaInfo":null,"summary":"Four years after the United States-Mexico-Canada trade agreement  was adopted, Mexico and the US face a common concern: the prospect of cheap Chinese electric vehicles dominating a fast-growing market and undermining regional carmakers like GM , Ford , and Tesla  in the process.Chinese imports have already begun south of the US border. EV and plug-in hybrid imports jumped 443.9%, by value, in the first quarter compared to the same period the previous year, according to data from S&P Global Market Intelligence.Overall, 1 in 10 cars sold in Mexico today comes from a Chinese automaker, according to Reuters, with seven new brands entering the market last year alone.“Almost overnight, we started seeing Chinese cars driving in Mexico,” said Juan Carlos Baker, Mexico's former vice minister for foreign trade. “In terms of how often you see them and how aggressive their marketing and sales campaigns have been on the part of Chinese cars, that is really pretty evident.”Electric taxis are being c","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{},"translate_title":"中国电动汽车正在“驶入墨西哥”——这开始让美国感到担忧","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"GWLLF":1,"GM":1,"F":1,"BYDDY":1,"TSLA":0.9,"EVS.SI":0.6},"content_text":"Four years after the United States-Mexico-Canada trade agreement (USMCA) was adopted, Mexico and the US face a common concern: the prospect of cheap Chinese electric vehicles dominating a fast-growing market and undermining regional carmakers like GM (GM), Ford (F), and Tesla (TSLA) in the process.\nChinese imports have already begun south of the US border. EV and plug-in hybrid imports jumped 443.9%, by value, in the first quarter compared to the same period the previous year, according to data from S&P Global Market Intelligence. \nOverall, 1 in 10 cars sold in Mexico today comes from a Chinese automaker, according to Reuters, with seven new brands entering the market last year alone.\n“Almost overnight, we started seeing Chinese cars driving in Mexico,” said Juan Carlos Baker, Mexico's former vice minister for foreign trade. “In terms of how often you see them and how aggressive their marketing and sales campaigns have been on the part of Chinese cars, that is really pretty evident.”\n\n\n\n  Electric taxis are being charged at a charging station in downtown Mexico City, Mexico, at night. (Getty Images)\n \n\n  benedek via Getty Images\n \n\nHowever, calls to curb Chinese EV makers in the US and Mexico have intensified recently in response to increased imports and investment. According to Baker, who played a critical role in crafting the USMCA, the threat of cheap Chinese EVs flooding the market never emerged as a concern in the two years the trade pact was being negotiated.\n\"I was present in every single meeting, and I don't remember once Ambassador Lighthizer or anyone at [the US Trade Representative office] saying, 'We need to make these rules of origin or other elements very strict because the Chinese are coming,'\" he said.\nAlthough Baker noted that no Chinese carmaker has started manufacturing vehicles in Mexico yet, the country's proximity to the US has raised particular alarm in Washington. Lawmakers fear auto companies will use the country as a backdoor to skirt US tariffs on Chinese car imports, which President Joe Biden raised to 100% last month.\nBYD has publicly expressed its intention to set up a factory in Mexico; however, its top executive has insisted the company has no plans to enter the US market.\nMexico is 'the perfect match'\nForeign markets have taken on increased importance for Chinese firms as the domestic market matures and sales in China slow.\nThe early success of Chinese auto brands in Latin America offers a glimpse into their expansion strategy to build a presence in countries with a large number of free trade agreements, easy access to resources, and a labor force that offers high-quality production at a lower cost.\n“You have the perfect match,” said Felipe Munoz, an analyst at automotive intelligence firm Jato. “'We’re talking about [a market with sales projected at] 1.2 million units per year. … This still has growth potential. And so [Mexico] is attractive for any carmaker.”\n\nMexico is following in the path of Latin America’s largest car market, Brazil, where Chinese firms like BYD (BYDDY) and Great Wall Motor (GWLLF) have already set up manufacturing operations.\nBrazil — already the fourth-largest importer of Chinese vehicles — saw new electric vehicle sales jump 91%, according to data from the Brazilian Association of Electric Vehicles. Chinese automakers BYD, Chery, and Great Wall were three of the top five car brands.\nIn Latin America broadly, Chinese EV makers already have 86% market share, according to Jato, in large part due to aggressive price competition.\n“They are applying more or less the same formula in these developing economies in the way that they are becoming the only choice to drive electric because the other ones are very expensive,” said Munoz. “The regulation and safety standards are not as difficult or complex in those economies.”\n\n\n\n  Chinese EV manufacturer BYD, shown here at the Paris Car Show on Oct. 17, 2022, has made its plans to expand in Mexico and Latin America clear. (AP Photo/Michel Euler, File)\n \n\n  ASSOCIATED PRESS\n \n\nRevisiting trade rules\nStill, Chinese car manufacturers' push to export and expand abroad has faced resistance, particularly in developed markets where lawmakers are revisiting existing trade rules in order to prevent a flood of cheap vehicle imports.\nConcerns in Europe, where Chinese EVs now have roughly 7% market share, according to Jato, prompted an anti-subsidy investigation earlier this year. And on Wednesday, the EU imposed tariffs of up to 38% on Chinese EV imports.\nThat came weeks after Biden raised the tariff rate on imports of Chinese EVs from 25% to 100%. The tariff rate on lithium-ion batteries and battery parts also increased from 7.5% to 25%.\nDuo Fu, vice president of battery markets for Rystad Energy, said that the tariff announcements have already started to shift carmakers' investment decisions away from the most developed markets.\n“We just don’t think the US is a critical market for the Chinese at the moment,” Fu said.\n\n\n\n  A man walks past a mural depicting Tesla CEO Elon Musk in Santa Catarina, Nuevo Leon state, Mexico on April 29, 2024. (ALFREDO ESTRELLA/AFP via Getty Images)\n \n\n  ALFREDO ESTRELLA via Getty Images\n \n\nThe changing dynamics are also prompting a rethink of the USMCA two years ahead of its scheduled review. Though, new leadership in Mexico and a potential return of the Trump administration could complicate the approach to tackling Chinese EVs.\nIn the meantime, Baker said Chinese firms are unlikely to find a workaround to be in compliance with stringent automotive rules of origin in the existing trade agreement. The USMCA specifies that automakers have to meet three rules of origin to qualify for preferential treatment under the act: a regional value content requirement for the overall vehicle, a labor value content rule, and thresholds for automobile parts.\n“The Rule of Origin on cars on the USMCA is one of the most difficult things to do industry-wise,” Baker said. “There is no way that you can import a car from China, even if it's just knocked down and they just put it together and add a couple of things here and there and then send it to us and ... try to pass it as a Mexican car. That's just not possible.”\nClick here for the latest economic news and indicators to help inform your investing decisions.\nRead the latest financial and business news from Yahoo Finance","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.1","shortVersion":"4.29.1","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2443865644"}