There's a lot of hype about Chinese EVs—is any of it true?
The Beijing Auto Show is currently taking place in China, offering a peek at what's being dubbed the world's most advanced car market. Chinese EVs are said to leave everyone else in the dust, with infotainment that makes your smartphone look like a StarTac, range numbers that would make a turbodiesel Audi weep, and charging that might be even faster than filling up with gas, depending on the size of your tank.
As an American, I mostly have to take someone else’s word for that. If there’s one thing Democratic politicians can agree on with Republicans, even now, it’s that they don’t want cars from Chinese automakers on US roads. The Biden administration levied a 100 percent tariff on Chinese EVs, and Congress passed a law restricting the sale of Chinese-linked connected car software. President Trump has added further tariffs, making their cars less competitive in the US. Just this week, more than 70 Democratic representatives called for maintaining barriers to Chinese cars for national security and economic reasons.
However, there's a strong appetite for those sweet, cheap Chinese electric vehicles. Headlines like Reuters' claim that for the average price of a car in the US, you could buy 5 new Chinese EVs only reinforce that sentiment.
The average price of a new vehicle in the US in 2025 rose to $50,326, up from $40,000 in 2020 and $35,000 in 2015. Despite the sharp increase in 2020 caused by the pandemic, average sales prices appear to have risen relatively linearly over time.
But for most of the 2010s, interest rates were zero or close to it; today, they are not. Financed purchases feel more expensive, and American car buyers are borrowing twice as much as they did in 2009, for longer periods.
Some concerns about Chinese EVs are legitimate. Much of the opposition from lawmakers has been framed in terms of protecting domestic jobs. While there are valid fears, the advantages of the Chinese car industry go beyond that. Chinese average wages are a quarter of those in the US, and being able to throw more workers at a factory while keeping overheads lower gives Chinese OEMs a cost advantage.
The European Central Bank blamed Chinese competition for causing 240,000 job losses, many in the auto industry. Ford CEO Jim Farley, who drove Chinese cars daily, said there's enough excess capacity in China's car industry to easily swallow the 12 million or so cars bought each year in the US. Toyota's outgoing president, Koji Sato, warned that Japanese automakers are doomed unless they can match the speed of innovation of their new Chinese competitors.
Another stated reason for blocking Chinese cars is the threat to privacy and national security. The Chinese government has restricted the use of Teslas near military bases and other sensitive locations, and Chinese automakers have had to hand over copious amounts of data on their customers’ driving habits to the government.
However, the breathless coverage of Chinese EVs rarely mentions that they aren't nearly as cheap when imported into Europe. Once specced to meet European expectations, they might cost more than double their Chinese retail price. The BYD Dolphin might start at under $14,000 in China, but in the UK, the cheapest one will cost twice that, before VAT.
The Chinese prices have been kept artificially low thanks to a price war among China’s hundreds of car companies, driven by government policies that incentivized overproduction. China has the capacity to build about 45 million cars a year, but last year, it built about 34 million cars, and fewer than half were sold domestically.
The inexpensive cars are also cheap because they make do with small batteries, and the range numbers are based on China’s CLTC test, which bears little resemblance to the EPA’s testing for EVs. Short-range EVs have been a sales disaster in the US, and car buyers prefer longer-range cars.
Chinese OEMs are offering car interfaces that rely almost entirely on touchscreens, which are less safe than buttons. While some may appreciate the smartphone experience, others may not, especially when they're behind the wheel.
Chinese automakers have become a new vanguard in the nation’s latest five-year plan, with a “revolution” spanning design and production, as well as in-car features like letting you give vague, natural-language directions instead of specifying a specific destination.
In conclusion, while there's hype about Chinese EVs, there are also valid concerns. The true story is more complex, and the market dynamics are influenced by various factors, including pricing, range, safety, and data privacy.
