Elon Musk-controlled firm Tesla has gone on the offensive to lobby the White House to support U.S. automakers during an official visit by Chinese president Xi Jinping to Washington DC in September.
Auto industry analysts point out that China forbids foreign car brands from assembling vehicles in the country without a Chinese partner. Foreign vehicles of all sorts also face heavy import duties. Moreover, Chinese automakers do not face any similar restrictions selling their vehicles in the U.S.
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Statement from Tesla spokesperson
“The China-owned companies are not expected to sell controlling stakes to American companies and are free from other trade hurdles that we face,” noted Tesla spokesperson Ricardo Reyes said last week.
“The requirement that Tesla establish a joint venture for local manufacturing and other obstacles to our activities, such as much higher import duties in China compared to the United States, put American car companies at a significant disadvantage,” he continued.
China making push for electric vehicles
For the last few years, the Chinese government has been encouraging greater electric-vehicle use. Most major cities offer exemptions from high fees and force buyers of gasoline-fueled vehicles into a lottery for the right to buy a vehicle. That said, EV-maker Tesla had notable difficulties with its launch of sales in China last year, and the ongoing central bank devaluation of the yuan makes it even harder to sell vehicles manufactured at a plant in California.
Several new U.S.-based EV makers (a few with Chinese backers) are developing electric vehicles for sale in the U.S. and China. Faraday Future Inc., Atieva Inc. and Fisker Automotive Inc., as well as Chinese tech firm Leshi Internet & Technology Co. are all reportedly developing EVs. Most are relatively well funded and are snapping up scores of engineers from established auto makers including Tesla.
By the same token, Tesla also faces prospective competition from well-known automakers such as Audi AG, which is developing an electric SUV, and Apple, which also reportedly has an electric car in the works
The electric-vehicle market as a whole is still relatively small, with only a few players selling battery-powered cars in significant volumes despite big improvements in capability and hefty government incentives aimed at juicing EV sales.
Moreover, the success of Tesla in the EV market has been unique, as a number of firms have failed or are only boutique manufacturers, including LA-based Coda Automotive Inc., Norway’s Think Global A/S, Canada’s Feel Good Cars and Aptera Motors.