Connect with us

Business

China’s highflying EV industry is going global. Why that has Tesla and other carmakers worried

Published

on

China’s highflying EV industry is going global. Why that has Tesla and other carmakers worried

The U.S.-China rivalry has a new flashpoint in the battle for technology supremacy: electric cars.

So far, the U.S. is losing.

Last year, China became the world’s foremost auto exporter, according to the China Passenger Car Assn., surpassing Japan with more than 5 million sales overseas. New energy vehicles accounted for about 25% of those exports, and more than half of those were created by Chinese brands, a shift from the traditional assembly role China has played for foreign automakers.

“The big growth has happened in the last three years,” said Stephen Dyer, head of the Asia automotive and industrials unit at AlixPartners, a consulting firm. “With Chinese automakers making inroads for most of the market share, that’s a huge challenge for foreign automakers.”

Advertisement

China’s rapid expansion domestically and abroad has added fuel to a series of clashes between the U.S. and China over trade and advanced technology, as competition intensifies between the two superpowers.

The U.S. has lofty goals for expanding its own EV industry. California, which accounted for 37% of the nation’s electric car sales as of 2022, aims to phase out purchases of new cars that run on fossil fuels by 2035.

Concerns about Chinese oversupply have come just as a broader slowdown in sales has hit EV makers. Tesla announced Monday that it would lay off more than 10% of its workforce in an effort to reduce costs and increase productivity.

In the company’s last earnings report in January, Chief Executive Elon Musk warned about the competitiveness of Chinese brands. BYD, China’s largest EV maker, surpassed Tesla in car sales last year.

“If there are not trade barriers established, they will pretty much demolish most other car companies in the world,” Musk said.

Advertisement

This year, Manhattan Beach-based Fisker Inc., an electrical vehicle startup, cut 15% of its workforce, had its stock delisted and said it might file for bankruptcy protection. Apple also recently announced an end to its long-held ambitions of making a self-driving EV.

One area in which Chinese automakers handily beat Western competitors is on price, thanks to government subsidies that supported the industry’s initial rise as well as cheap access to critical minerals and components such as lithium-ion batteries, which account for about a third of the overall cost of production.

“It always had these ingredients waiting around,” said Cory Combs, an associate director for Chinese energy policy at the consulting firm Trivium China. “It was kind of a magic moment for these things to come together.”

That enabled the success of BYD, which started producing lithium-ion batteries in 1996 and making cars in 2005.

In March, BYD cut the price of its cheapest EV model in China to less than $10,000. According to Kelley Blue Book, the average EV retail price is $55,343 in the U.S., compared with $48,247 across all vehicles.

Advertisement

While pricing wars have forced Chinese automakers to slash profit margins at home, they can charge more in overseas markets, further incentivizing exports as domestic growth has slowed. According to research firm Gavekal Dragonomics, demand in China has cooled due to the removal of tax breaks and an increase in the use of public transportation post-pandemic.

“There is a ton of pressure, especially if you are a smaller player, to find a market that is less competitive,” Combs said. “And every market is less competitive than China’s.”

Though 27.5% tariffs have in effect locked Chinese EVs out of the U.S. market, the fear that the cheaper models could eventually undermine American automakers has started to spread.

The Alliance of American Manufacturing warned in a February report that allowing Chinese EVs into the country would be an “extinction-level event” for the U.S. auto industry. The group also cited the risks of Chinese auto companies building facilities across the border in Mexico that could circumvent tariffs.

When the global market is flooded by artificially cheap Chinese products, the viability of American and other foreign firms is put into question

— Janet Yellen

Advertisement

After a trip to China in April, Treasury Secretary Janet L. Yellen expressed concerns about government-funded overcapacity in Chinese manufacturing of electric vehicles, batteries and solar panels. She noted that other advanced and emerging markets shared those worries, and compared the oversupply to a flood of low-cost Chinese steel hitting the global economy more than a decade ago.

“When the global market is flooded by artificially cheap Chinese products, the viability of American and other foreign firms is put into question,” Yellen said.

The European Union has opened an investigation into government subsidies utilized by China’s EV industry and whether such support violates international trade laws.

Advertisement

China’s state news agency pushed back on claims of overcapacity in an April article, which said exports accounted for 12% of China’s EV sales last year. It attributed the industry’s success to competitive pricing and technology, rather than government subsidies.

After meeting with German Chancellor Olaf Scholz in April, Chinese President Xi Jinping decried protectionism in other countries and said Chinese EV exports have helped ease global inflation and combat climate change.

How the U.S. is addressing the emergence of China’s EV dominance has already become a hot-button issue for the presidential election in November.

President Biden has encouraged the domestic expansion with the passage of the Inflation Reduction Act, which includes electric vehicle tax credits for U.S. manufacturers, but not if they are sourcing minerals and materials from “foreign entities of concern,” such as China. Meanwhile, presumptive Republican nominee Donald Trump has claimed electric car manufacturing will reduce auto industry jobs, and called for a rollback of the EV-friendly policies enacted during Biden’s term.

Politicians from both parties have proposed even harsher tariffs on Chinese-made EVs should they try to enter the U.S. market, prioritizing the protection of U.S. jobs over goals to reduce carbon emissions.

Advertisement

“That will make it even more important for Chinese companies to set up local assembly operations to minimize those costs,” said Gregor Sebastian, senior analyst at the New York-based research firm Rhodium Group. “A lot of companies are adopting a wait-and-see approach.”

Even without Chinese auto imports, the technology within the vehicles has unnerved U.S. officials. In March, Biden announced an investigation into Chinese-made “smart cars” and the data the internet-connected vehicles could collect on American users. Collaborations between U.S. companies and CATL, the Chinese battery-making behemoth, have also been subject to greater scrutiny as tensions between the two countries have worsened.

But China has spent decades cementing its status as a global leader in procuring minerals and developing critical technologies such as EV batteries while the U.S. has fallen behind. That will make it harder now for Western automakers to wholly shut out Chinese suppliers, said Tu Le, founder and managing director of Sino Auto Insights, a consulting firm.

“If automakers are going to build affordable, clean-energy vehicles this decade, the only way that happens is by using Chinese batteries,” Le said.

Advertisement
Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Business

Video: Why Your Paycheck Feels Smaller

Published

on

Video: Why Your Paycheck Feels Smaller

new video loaded: Why Your Paycheck Feels Smaller

Ben Casselman, our chief economics correspondent, explains why wages are not keeping up with inflation and what that means for American workers and the economy.

By Ben Casselman, Nour Idriss, Sutton Raphael and Stephanie Swart

April 18, 2026

Continue Reading

Business

Civil case against Alec Baldwin, ‘Rust’ movie producers advances toward a trial

Published

on

Civil case against Alec Baldwin, ‘Rust’ movie producers advances toward a trial

Nearly two years after actor Alec Baldwin was cleared of criminal charges in the “Rust” movie shooting death, a long simmering civil negligence case is inching toward a trial this fall.

On Friday, a Los Angeles Superior Court judge denied a summary judgment motion requested by the film producers Rust Movie Productions LLC, as well as actor-producer Baldwin and his firm El Dorado Pictures to dismiss the case.

During a hearing, Superior Court Judge Maurice Leiter set an Oct. 12 trial date.

The negligence suit was brought more than four years ago by Serge Svetnoy, who served as the chief lighting technician on the problem-plagued western film. Svetnoy was close friends with cinematographer Halyna Hutchins and held her in his arms as she lay dying on the floor of the New Mexico movie set. Baldwin’s firearm had discharged, launching a .45 caliber bullet, which struck and killed her.

The Bonanza Creek Ranch in Santa Fe, N.M. in 2021.

Advertisement

(Jae C. Hong / Associated Press)

Svetnoy was the first crew member of the ill-fated western to bring a lawsuit against the producers, alleging they were negligent in Hutchins’ October 2021 death. He maintains he has suffered trauma in the years since. In addition to negligence, his lawsuit also accuses the producers of intentional infliction of emotional distress.

Prosecutors dropped criminal charges against Baldwin, who has long maintained he was not responsible for Hutchins’ death.

“We are pleased with the Court’s decision denying the motions for summary judgment filed by Rust Movie Productions and Mr. Baldwin,” lawyers Gary Dordick and John Upton, who represent Svetnoy, said in a statement following the hearing. “He looks forward to finally having his day in court on this long-pending matter.”

Advertisement

The judge denied the defendants’ request to dismiss the negligence, emotional distress and punitive damages claims. One count directed at Baldwin, alleging assault, was dropped.

Svetnoy has said the bullet whizzed past his head and “narrowly missed him,” according to the gaffer’s suit.

Attorneys representing Baldwin and the producers were not immediately available for comment.

Svetnoy and Hutchins had been friends for more than five years and worked together on nine film productions. Both were immigrants from Ukraine, and they spent holidays together with their families.

On Oct. 21, 2021, he was helping prepare for an afternoon of filming in a wooden church on Bonanza Creek Ranch. Hutchins was conversing with Baldwin to set up a camera angle that Hutchins wanted to depict: a close-up image of the barrel of Baldwin’s revolver.

Advertisement

The day had been chaotic because Hutchins’ union camera crew had walked off the set to protest the lack of nearby housing and previous alleged safety violations with the firearms on the set.

Instead of postponing filming to resolve the labor dispute, producers pushed forward, crew members alleged.

New Mexico prosecutors prevailed in a criminal case against the armorer, Hannah Gutierrez, in March 2024. She served more than a year in a state women’s prison for her involuntary manslaughter conviction before being released last year.

Baldwin faced a similar charge, but the case against him unraveled spectacularly.

On the second day of his July 2024 trial, his criminal defense attorneys — Luke Nikas and Alex Spiro — presented evidence that prosecutors and sheriff’s deputies withheld evidence that may have helped his defense . The judge was furious, setting Baldwin free.

Advertisement

Variety first reported on Friday’s court action.

Continue Reading

Business

California’s gas prices push Uber and Lyft drivers off the road

Published

on

California’s gas prices push Uber and Lyft drivers off the road

The highest gas prices in the country are making it tougher for some gig drivers to make a living.

Gas prices have shot up amid the war in the Middle East. On average, California gas prices are the most expensive in the United States, according to data from the American Automobile Assn. The average price of regular gas in California is almost $6. The national average is a little above $4.

While Uber and Lyft drivers have concocted clever ways to cut gas consumption, they say that without some relief they will be forced to leave the ride-hailing business.

John Mejia was already struggling to make money as a part-time Lyft driver when soaring gas prices made his side hustle even harder.

“Unfortunately, it’s the economics of paying less to drivers and gas prices,” he said. “It actually is pulling people out of the business.”

Advertisement

Guests at The Westin St. Francis hotel get into an Uber.

(Jess Lynn Goss / For The Times)

Gig work offers drivers the freedom to work for themselves and more flexibility, but being independent contractors also means they must shoulder unexpected costs.

Ride-sharing companies say they’re trying to help, but drivers say the gas relief comes with caveats. For now, drivers say they’re being pickier about what rides they accept, cutting hours and are looking at other ways to make money.

Advertisement

Mejia, who started driving for Lyft more than a decade ago, said in his early days, he would sometimes make $400 in three hours. Now it takes 12 hours to rake in $200.

The San Francisco Bay Area consultant is an active member of the California Gig Workers Union, so he knows he isn’t alone. California has more than 800,000 gig rideshare drivers, according to the group, which is affiliated with the Service Employees International Union.

On social media sites such as Reddit and Facebook, gig workers have posted about how the higher gas prices are eating into their earnings. Among the tricks they are suggesting: reducing the number of times the ignition is turned on or off, avoiding traffic, working in specific neighborhoods and at times with high demand and switching to electric vehicles.

Gig drivers usually have only seconds to decide whether to accept a ride on the app, but they have become more strategic about which rides and deliveries they accept.

That means they are more likely to sit back in their cars and wait for higher fares for quick pick-up and drop-off.

Advertisement

“I highly recommend the ‘decline and recline’ strategy, rejecting unprofitable rides until a better one appears,” wrote Sergio Avedian, a driver, in the popular blog the Rideshare Guy.

Pedestrians cross the street in front of a Lyft and Uber driver.

Pedestrians cross the street in front of a Lyft and Uber driver on Wednesday. High gas prices have made it hard for gig drivers to make a living, cutting into their profits.

(Jess Lynn Goss / For The Times)

Uber, Lyft and other companies have unveiled several ways to help drivers save on gas.

Uber said drivers can get up to 15% cash back through May 26 with the Uber Pro card, a business debit Mastercard for drivers and couriers. Based on a worker’s tier, they can get up to $1 off per gallon of gas through Upside — an app that offers cash rewards — and up to 21 cents off per gallon of gas with Shell Fuel Rewards. The company also offers incentives for drivers who want to switch to electric vehicles.

Advertisement

“We know the price of gas is top of mind for many rideshare and delivery drivers across the country right now,” Uber said in a blog post about its gas savings efforts.

Lyft also said it’s expanding gas relief through May 26 because the company knows that the extra cost “hits hardest for drivers who depend on driving for their income.”

The company is offering more cash back, depending on the driver’s tier, for drivers who use a Lyft Direct business debit card to pay for gas at eligible gas stations. They can get an additional 14 cents per gallon off through Upside.

Drivers say the fine print on the offers dictates which card they use and where they fill up gas, making it difficult for them to save money.

“If I do the math, it’s ridiculous,” Mejia said. “They’re offering us nothing.”

Advertisement

Uber declined to comment, but pointed to its blog post about the gas relief efforts. Lyft also referenced the blog post and said “the gas savings were structured through rewards to maximize stackable opportunities.”

Guests at The Westin St. Francis hotel get into an Uber.

Guests at The Westin St. Francis hotel get into an Uber.

(Jess Lynn Goss / For The Times)

Gig workers have struggled with rising gas prices in the past.

In 2022, Lyft and Uber temporarily added a surcharge to their fares amid record-high gas prices following Russia’s invasion of Ukraine. This year, Uber is adding a fuel charge to its fares in Australia for roughly two months to offset the high cost of gas for drivers. Lyft said it hasn’t added a fuel charge in the U.S. or elsewhere.

Advertisement

Margarita Penalosa, who drives full time for Uber and Lyft in Los Angeles, started as a rideshare driver in 2017. Back then, gas was cheaper. She would easily hit her goal of making $300 in eight hours. Now she’s making just $250 after working as much as 14 hours.

Gas prices, she said, used to be less than $3 per gallon. Now some gas stations are charging more than $8 per gallon.

“Take out the gas. Take out the mileage from my car and maintenance. How much [do] I really make? Probably I get $11 for an hour,” she said.

Jonathan Tipton Meyers wants to spend fewer hours as a rideshare driver.

He already juggles multiple gigs even while driving for Uber and Lyft in Los Angeles. He’s a mobile notary and loan signing agent, a writer and performer.

Advertisement

Driving is “a very challenging, full-time job,” he said. “It’s very taxing and, of course, wages were just continually decreasing.”

A man stands for a portrait in a white button up shirt

John Mejia, a longtime Lyft and Uber driver, poses for a portrait before attending a meeting about unionizing gig drivers.

(Jess Lynn Goss / For The Times)

Even if oil continues to flow through the Strait of Hormuz, which Iran reopened Friday, it could take a while for gas prices to come down to earth, said Mark Zandi, the chief economist at Moody’s Analytics.

“There’s an old adage that prices rise like a rocket and fall like a feather,” he said. “I think that’ll apply.”

Advertisement

In the meantime, it will be survival of the fittest drivers. If enough of them decide to leave the apps, the ride-hailing companies could be forced to raise fares further to attract some back.

“Those who approach rideshare driving strategically, tracking expenses, choosing trips carefully, and optimizing efficiency are far more likely to weather periods of high gas prices,” wrote Avedian in the Rideshare Guy blog. “For everyone else, a spike at the pump can quickly turn rideshare driving from a side hustle into a money-losing venture.”

Continue Reading
Advertisement

Trending