The US auto industry dilemma
Investments in EVs haven't panned out. US consumers are pushing back against EV mandates and a shift towards electrification.
Domestic producers are going to be protected by tariffs on imports, which can go as high as 200% under a 2nd Trump administration.
But domestic car sales have been stuck at 16m (annualized) for several quarters and 15% below all-time highs reached back in 2001!
Consumers want cars. But the cost of a new vehicle (and even a used one) continue to go up each year. They now cost $48k on average!
Meanwhile, in China, the average new car costs consumers $18k and it's going down because of lower-price EVs.
The US and Japan - the two global automotive giants - along with South Korea may be able to insulate their home markets. But other countries are more than happy to have cheaper cars - especially ones that don't use fossil fuel.
Yes, I know. Generating the electricity needed to power all those EVs might just offset any "green" gains. If you spent any decent amount of time in emerging market cities, which are choking from the ICE pollution, you'll understand why.
The West is losing its hold on the global auto market - particularly in the fastest-growing markets. If its great companies don't embrace electrification and leverage whatever brand recognition they still have globally to appeal to a market many times larger than the U.S., they may be guaranteeing their own demise.
$Ford(F)$ $General Motors(GM)$ $Tesla Motors(TSLA)$ $BYD Co., Ltd.(BYDDF)$ $NIO Inc.(NIO)$ $XPeng Inc.(XPEV)$ $Li Auto(LI)$ $ZEEKR(ZK)$
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