1st Gear: China Takes The High Road In EV Tariff Fight
Earlier this week, the U.S. imposed massive new sanctions against Chinese-made products, especially electric vehicles. The Biden Administration levied a 100 percent tariff on EVs made in China and hiked tariffs on other products as well to the tune of $18 billion in Chinese goods. Now, China is responding, but in a far more measured way than initially thought.
Of course, the country denounced the White House’s action and vowed “resolute measures.” However, it’s a very different reaction to when it responded to 2018 Trump-era tariffs on $300 billion in Chinese goods that started a bit of a trade war. From Reuters:
Among the differences between then and now: the Biden White House flagged potential measures to Chinese officials in advance and the tariffs target industries, including EVs and batteries, where the economic impact is limited and Chinese companies’ dominance appears unassailable.
In response to the tariffs, Chinese state media have shot back, accusing the United States of subverting its own free trade principles and taking action that threatens climate goals and will push up costs for American consumers.
In essence, the argument goes, you are hurting yourself.
That marks a break from the tone in 2018, when a Chinese negotiator said Washington was putting “a knife to China’s neck” and state media had suggested extreme counter-measures like a boycott of U.S. food imports or a sell-off of U.S. bonds.
“China can take the moral high ground,” said Wang Huiyao, founder and president of the Beijing-based Center for China and Globalization, a think tank. “It doesn’t play around with those who break international standards and norms.”
In the starkest language of its response, the Chinese commerce ministry said the White House had broken the spirit of an agreement to steady bilateral relations reached by Chinese President Xi Jinping and U.S. President Joe Biden late last year in San Francisco.
The Chinese electric vehicle industry is in a much different place than it was back in 2018, with EV sales growing to about 7,200,000 per year as compared to 800,000 back then. The country actually surpassed Japan as the world’s leading automotive exporter, sending cars to Southeast Asia and Europe. I suppose you could say they don’t really need the U.S. At the very least, they can take a blow like these tariffs far more easily.
Huawei, which had been crippled by U.S. sanctions in 2019, has bounced back, spearheading demand for China-made chips and challenging Apple in the China smartphone business and Tesla for EVs.
“What does not kill you makes you stronger,” Xinhua said in a commentary on the U.S. tariffs. “It seems the famous quote applies to China’s technology companies.”
Beijing knew this round of tariffs was coming. In recent visits to China, U.S. Treasury Secretary Janet Yellen and others had drove home a message that China’s industrial capacity to make more EVs, solar panels and batteries than its economy can absorb was a risk to American jobs and business.
Chinese officials and state media have rejected that argument, saying the country’s EV makers dominate because of innovation and supply chain advantages, not subsidies.
The United States imported $427 billion in goods from China last year and exported $148 billion to the world’s No. 2 economy, a trade gap that has persisted for decades and become an ever more sensitive subject in Washington.
Right now, there’s no telling exactly where these tariffs will end up for either the U.S. or China. A lot of that will depend on how the November Presidential Election shakes out. Yippie.
2nd Gear: Rivian Cutting More Jobs In California
Electric vehicle maker Rivian has informed officials in California that it is planning to carry out more layoffs in the state. In an April letter to the state’s Employment Development Department, Scott Griffin, Rivian’s vice president of people (read: head of HR) said the automaker planned to lay off over 120 employees, including 89 in Irvine and 28 in Palo Alto. From the Detroit News:
The job losses will begin in June, Griffin wrote, and are expected to be permanent.
In February, the company announced it was cutting 10% of its workforce, which sent the stock plummeting from the dizzying heights it had achieved after its 2021 initial public offering.
At that time, the company was valued at nearly $88 billion. On Monday, it was valued at about $11 billion. Reuters reported recently that, as of Dec. 31, the company had about 16,790 employees across North America and Europe.
“We continue to work to right-size the business and ensure alignment to our priorities,” a Rivian spokesman said in a statement. “As a follow-up to some of the changes we made to teams in February, in April we shared some additional changes to groups supporting the business. Around 1 percent of our workforce was affected by this change. This was a difficult decision, but a necessary one to support our goal to be gross margin positive by the end of the year.”
This is just the latest in a number of layoffs that have hit EV automakers like Tesla, Lucid and especially Fisker. It seems wealthy folks who want an EV already have them, and these companies are struggling to entice that next round of buyers.
3rd Gear: Volvo Is Going Through It Right Now
Buyers in both China and the U.S. really do not seem to be into the zero-emission offerings Volvo has put forward, but that hasn’t dissuaded the semi-Swedish automaker from its plans to be all-electric by 2030. U.S. sales of the all-electric XC40 Recharge and C40 Recharge fell 65 goddamn percent in the first quarter of 2024, to a measly 970 vehicles. It’s apparently the largest year-over-year percentage decline in the luxury segment. Ouch. From Automotive News:
Volvo’s first-quarter drop followed a 27 percent slide in battery-electric vehicle sales in the fourth quarter of 2023.
Meawhile in China, Volvo’s electric vehicle sales tumbled 28 percent in the January-March period.
The EV adoption curve in the U.S. has shifted from a hockey stick to a gentler curve as the industry moves from the early adopter market to the more skeptical mainstream consumer with little tolerance for paying a premium for new technology and the patience to put up with slow charging.
According to Cox, EV sales in the first quarter rose 2.6 percent year over year. That’s significantly slower than the 46 percent year-over-year EV sales increase in the same period in 2023.
There is some good news though. It seems like buyers are very interested in plug-in hybrids from Volvo. Sales were up 44 percent in Q1 to 7,118 vehicles. Not too shabby, but it still doesn’t take the sting away from flopping EVs. Still, Volvo is sticking to its EV plans for the future.
4th Gear: Nearly 190,000 Honda Ridgelines Recalled
Honda is recalling 187,290 2020-2024 Ridgeline pickup trucks in the U.S. because their rearview cameras are all sorts of fucked up. Luckily, there haven’t been any injuries or deaths related to the issue, but in modern cars, rearview cameras are paramount for being able to see when reversing. From Automotive News:
Because of repeated opening of the tailgate in the presence of freezing temperatures and salt, the rearview camera tailgate harness may break, the NHTSA said. The break may result in a failure to produce a rearview camera image, increasing the risk of backup collision or injury.
The harness was supplied by Aptiv Services US, which did not immediately respond to a request for comment on Tuesday.
Honda is issuing an improved part to replace the rearview camera tailgate harness causing the issue. Owners can have the part installed at authorized Honda dealers.
Owner notification letters are expected to be sent before July 1.
Apparently, Ridgeline sales in the U.S. have slipped 14.5 percent to just 15,245 deliveries through April of this year. It’s a bit of a reversal from the 22 percent sales increase (to 52,001 vehicles) the Ridgeline saw in 2023. Regardless, every last one of them needs to get fixed now.
Source: Jalopnik
