From 'slippery slope' to 'existential threat,' auto CEOs sound alarm on Chinese competition

Western automakers, from the Big Three to EV axenic plays, are delivering the aforesaid stark warning: Chinese automakers airs a menace to their endurance if home accumulation isn't protected.

"China poses a wide and contiguous menace to the car manufacture successful the U.S.," wrote the Alliance for Automotive Innovation (AAI), a commercialized radical that reps the Big Three, among different automakers, up of a House proceeding connected Chinese vehicles past December.

The AAI said Congress needs to support the Commerce Department's Biden-era prohibition connected importing definite exertion and bundle from China, which efficaciously bars the import of vehicles from Chinese manufacturers.

In caller comments, firm executives person hammered location a mentation of this messaging

EV shaper Rivian (RIVN) has a large twelvemonth up with the motorboat of its entry-level R2. While short-term issues similar outgo power and EV request are much apical of caput for the company, the menace of China isn't that acold off.

Rivian CEO RJ Scaringe noted that successful the agelong term, 2 important factors request to beryllium recognized.

"It's not similar there's magic happening connected the Chinese outgo structure. It's truly 2 things you tin travel precise clearly," Scaringe told Yahoo Finance past week. "One is their superior outgo operation is overmuch little than us. In astir cases, it's adjacent zero. It's a highly subsidized manufacture wherever plants and manufacturing compacts are paid for by the section equivalent of the national government."

The 2nd origin is labor, with Chinese automakers' costs a 4th to a 5th of those faced by US companies.

Scaringe said astatine the moment, tariffs successful spot "equalize" the outgo of those vehicles, protecting US manufacturing. But lone for now.

And contempt this tariff buffer, Ford (F) CEO Jim Farley argued that China's rising dominance remains a threat.

"We're a twelvemonth down the roadworthy with the Chinese competitors. They're present adjacent much salient astir the globe. Not a batch present successful the US, but you spell to Europe, you spell to anyplace else, China is simply a large deal," Farley told Yahoo Finance successful January.

Chinese automakers captured astir 6.1% of the European car marketplace past year, a 99% leap from 2024. And this contempt tariffs of 35.3% connected Chinese EVs entering the EU; however, plug-in hybrids and afloat hybrids were excluded.

Farley has successful the past called Chinese-made cars an "existential threat" to US automarkets, not conscionable due to the fact that of the country's tech advances, but besides for its labour infrastructure that supports inexpensive manufacturing.