You might see Chinese vehicles in US dealerships sooner than you expect, which is welcome news for American consumers.
Chinese automotive manufacturers build more cars than any other nation globally and are also the largest exporters. However, steep tariffs and strained trade relations between the US and China currently prevent them from accessing the US market.
According to industry specialists, this situation is likely to shift, with Chinese automobiles potentially appearing in American showrooms within the next five to ten years.
“There are ambitions,” stated Lei Xing, an independent auto analyst and former editor-in-chief of China Automotive Review, even if companies will need to establish manufacturing plants locally rather than shipping vehicles over from China.
He pointed out that several Chinese automakers have shown a “willingness to come to the US and build in the US.”
This development would benefit US car buyers. Increased competition means more options, particularly for electric vehicles, which should consequently lead to lower prices. Conversely, it will squeeze the profits and market share of the auto companies already selling in the US, potentially impacting the nearly one million employees associated with those firms.
Chinese cars shipped to America currently face a 100% tariff—the highest imposed on any import. Yet, President Donald Trump, a critic of many Chinese goods, has recently appeared welcoming toward Chinese brands on the condition they establish factories within the US.
“If they want to come, build a plant, hire you, your friends, and your neighbors—that’s great. I like that very much,” he said in a speech last month at the Detroit Economic Club. “Let China come in.”
When questioned about the administration’s stance on allowing Chinese automakers entry into the US market, a White House spokesperson told CNN last week that the “administration supports all investments in the United States, provided our national and economic security are not put at risk.”
Chinese Automakers Lead the Way
Any entry by China into the market could further solidify the country’s emerging dominance in the sector.
Last year, China was responsible for producing one-third of all vehicles worldwide, with more than 8 million units exported to international markets, according to data from the China Association of Automobile Manufacturers (CAAM). This represents a 30% rise compared to 2024. In 2023, China surpassed Japan to become the world’s top vehicle exporter.
China is particularly competitive in the electric vehicle segment. Chinese manufacturer BYD overtook Tesla last year as the world’s top-selling EV company, and this week surpassed Ford.
While constructing an automotive plant in the US can take several years, leading experts broadly agree that most Chinese automakers are already targeting the American market.
“It is no secret that every automaker in the world views the US market as the ultimate arena for triumph,” commented Michael Dunne, an automotive consultant who has been involved with Western automakers’ efforts in China since the 1990s.
This is because American consumers are wealthier and tend to purchase larger, more expensive vehicles—meaning higher profitability than nearly anywhere else, he added.
Dunne noted that the average price of a car exported from China last year was approximately $19,000, whereas the average price for a new vehicle sold in the US hovers around $50,000.
BYD and other leading Chinese auto firms did not respond to CNN requests regarding their specific US market entry strategies.
However, this doesn’t mean they haven’t made preliminary moves.
Volvo, owned by the Chinese automaker Geely, established a factory in South Carolina back in 2015.
This facility, currently undergoing a $1.3 billion expansion, could potentially serve as a staging ground for Geely to begin manufacturing vehicles under its Zeekr and Lynk & Co. brands in the US. Geely’s Head of Global Communications, Ash Sutcliffe, hinted at this possibility in an interview with Autoline last month.
Geely is already supplying a limited number of Zeekr vehicles to Waymo, the autonomous driving subsidiary of Google’s parent company, Alphabet.
Geely is the Chinese auto company best positioned to enter the US market, observed Lei Xing. “I anticipate we will hear an announcement regarding this within the next 24 to 36 months.”
Downward Pressure on Vehicle Prices
Given that US vehicle prices remain near record highs, Chinese companies entering the market present an opportunity for greater choice and potential savings. Experts suggest this creates a mandate for price reductions, mirroring the trend seen in Europe since Chinese automakers arrived there.
However, the appeal of Chinese brands, both in Europe and domestically, is not solely driven by price, but also by the quality and technology offered, remarked Bill Russo, head of the Shanghai-based investment consultancy Automobility.
“Foreign brands have lost more than half their market share (in China) in under five years, and the reason isn’t that Chinese consumers were told to buy domestic products,” Russo stated. “They simply produced superior vehicles and technology at compelling price points.”
The global expansion push by Chinese automakers is also fueled by intense price competition among more than 100 domestic brands operating within China.
Decades of state backing and substantial investment in China have resulted in significant excess manufacturing capacity within the automotive sector. Slower consumer spending this year has added urgency for these manufacturers to seek overseas expansion.
But the US market will not necessarily be an easier venue, Russo cautioned.
Chinese auto firms might struggle initially to gain traction with American buyers who might be wary of an unfamiliar brand. Nonetheless, he believes any concerns that a vehicle might be perceived as “cheap” rather than simply affordable can be overcome relatively quickly.
“Does it truly matter to Americans who built the car, as long as it’s good? I don’t think so,” he opined. “They shop at Walmart and constantly buy things made in China. Ultimately, I believe the market values value-for-money first. Xenophobia can only take you so far.”
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