Washington, May 14 (EFE) - The 100% increase on Chinese electric vehicles tariffs announced by United States President Joe Biden on Tuesday is the latest measure to prevent a massive import of cheap electric cars that could negatively affect US auto industry in an election year.

The announcement helps Biden ahead of November's presidential election by allowing the presumptive Democratic nominee to further align himself with the powerful United Auto Workers union, which he sees as crucial in mobilizing the vote of US workers.

In 2023, Chinese electric vehicle exports to the United States amounted $368 million, compared to about $7.4 billion from European manufacturers, according to official data.

The reason for the low penetration of Chinese manufacturers in the US was the 27.5% tariff that Washington maintained on EVs from the Asian giant until Tuesday.

Despite the tariffs, Chinese electric vehicles pose a threat to those produced in US plants by domestic manufacturers (General Motors, Ford, Stellantis, or Tesla, among others) and foreign ones (mainly Hyundai, Volkswagen, and Mercedes-Benz).

BYD, the largest EV manufacturer

BYD exemplifies how Chinese brands are threatening American brands. In 2023, it sold a record 3 million EVs, making it the largest electric vehicle manufacturer in the world.

BYD has been producing electric vehicles since 2005 and has gradually improved its cars to become the main rival to Tesla and other traditional brands.

The Chinese manufacturer's Seagull model costs around $20,000 in Latin America, a fraction of Tesla's Model 3.

But perhaps a better example of the threat Chinese manufacturers pose to the US sector is Xiaomi, the cell phone manufacturer, which in 2021, announced that it would invest $10 billion in electric vehicles.

Two years later, the company unveiled its first vehicle, the SU7, which BYD began marketing in March.

In April, Xiaomi sold 7,058 units of the SU7, a four-door electric sedan, in China, surpassing the 5,065 Model 3s sold by Tesla.

Xiaomi has also announced that it will start selling a new model by 2025, an SUV that will compete with Tesla's Model Y.

Unrivaled electrics

Tesla's CEO, Elon Musk, who just a few years ago scorned Chinese EV makers, now sees them as his biggest threat.

Just a few months ago, he said before analysts and journalists, that Chinese automakers will "demolish" global rivals without trade barriers.

Musk is not alone in warning of the risks Chinese EVs pose to the United States.

In February, the Alliance for American Manufacturing (AMA), a coalition of US manufacturers and the United Steelworkers union, released a report that warned on its cover that China posed an "existential threat" to the US auto sector.

The study noted that "BYD unveiled an electric SUV in February for an astonishingly low $14,000," that "Americans would eat it up," and that it would "sell like hotcakes."

AMA concluded that Chinese manufacturers would also be able to overcome tariffs of 27.5% and that only a sharp increase would stop ultra-cheap EVs from entering the country. EFE

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