China files lawsuit with World Trade Organization against US, citing ‘discriminatory policies’ for EVs in the IRA
China has filed a formal complaint with the World Trade Organization (WTO) against the US Inflation Reduction Act (IRA), claiming its subsidy policies discriminate against foreign automakers and disrupt the global goal of expediting EV adoption while distorting fair competition. A spokesperson for China’s Ministry of Commerce spoke to reporters and shared the details behind the filing.
Suppose you’ve read any of our stories covering the EV sector in China; it’s hard to argue that the country is hands down the global leader in technology and adoption. Having dove head first into developing and implementing New Energy Vehicles (NEVs) well before more legacy automakers in the US and Europe, China has been able to deliver EVs across all segments that are now highly affordable.
Much of that success came from subsidies from the Chinese government for automakers developing the technology and local consumers adopting it, which has worked quite well. Having a lead on the rest of the global market, we’ve seen Chinese automakers expand the reach of their portfolios to new markets across Asia, Europe, and South America.
The response has been a mixed bag so far. Brand recognition and trust remain a massive hurdle for Chinese brands, especially in Europe, where companies like Volkswagen AG and Mercedes still have a significant foothold. However, it’s hard not to be enticed by the range, performance, and, in many cases, luxury of EVs making their way overseas from automakers like NIO, XPeng, and BYD. Still, some governments in the EU are weary of Chinese EVs entering local markets and are trying to slow things down with tariffs.
One market these Chinese brands have yet to touch is the US, whose own local automakers (aside from trailblazers like Tesla, Rivian, and Lucid), are backtracking on EV commitments, leaving a huge gap for EVs made in China to fill. However, the Inflation Reduction Act signed by the Biden Administration promotes local manufacturing – great for the US economy long-term as automakers set up production facilities in North America , but frustrating to some right now if you already have quality products on sale.
Whether US customers opt for EVs made in China is tough to say, but the country believes its products can help expedite adoption and tackle climate change more quickly… as long as the US government shares some of those subsidies that currently only apply to a mere handful of vehicles.
China calls US EV subsidies unfair to fight climate change
China has officially filed a complaint to the World Trade Organization targeting the US’ Inflation Reduction Act, and a spokesperson for the country’s Ministry of Commerce spoke to reporters about the lawsuit and why it feels it was necessary at this point.
China filed a dispute settlement mechanism with the WTO on March 26, 2024, specifically targeting EV vehicle subsidies and other measures enacted into law in the US under the Inflation Reduction Act. Here’s the official statement:
In the name of ‘coping with climate change’ and ‘low-carbon environmental protection,’ the United States introduced the ‘Inflation Reduction Act’ and its implementation details, using products from specific regions such as the United States as a prerequisite for subsidies, and formulated discriminatory subsidy policies for new energy vehicles, etc., and included China. The exclusion of products from other WTO members has distorted fair competition, seriously disrupted the global new energy vehicle industry chain and supply chain, and violated WTO rules such as national treatment and most-favored-nation treatment. China firmly opposes this.
Furthermore, the spokesperson explained that as part of the filing with the WTO, China is imploring the US to play fair and follow the organization’s trade rules, citing the need for more EVs more quickly to battle the ever-looming issue of climate change. Per the report:
China firmly defends the rules-based multilateral trading system and respects the legitimate rights of WTO members to implement industrial subsidies within the framework of rules and promote their own economic and social development. We urge the United States to abide by WTO rules, respect the development trend of the global new energy vehicle industry, promptly correct discriminatory industrial policies, and maintain the stability of the global new energy vehicle industry chain and supply chain.
What do we think? Should EVs made in China be allowed in the US without hefty tariffs? What if those brands build them in North America?
Electrek’s take
Chinese EVs are a very polarizing topic in the global industry. I cover the beat closely, from new models launching seemingly every day overseas, to the expansions to new markets by some of the more prominent brands looking to become global household names, alongside the likes of Tesla and BMW.
I can understand why people, especially governments, might oppose the competition, but it’s hard to justify depriving consumers of Chinese EVs when other automakers aren’t delivering. Even worse, many are backtracking on their plans to deliver “x” amount of EVs by the end of the decade.
I genuinely support the IRA and want to see more local EV builds from all automakers, limit supply chains, create more jobs, and relinquish dependency on other countries for materials and other components. The IRA should do that, but it will take time as all these foreign automakers scramble to move EV and battery production to the continent to become compliant.
At the same time, the main goal is not to sell more cool cars to people but to reduce the number of combustion vehicles on roads around the globe as quickly as possible. To do that, EVs made in China are an incredible option that deserves consideration, whether in the US, Europe, or elsewhere.
China is currently selling compact EVs that cost the equivalent of $14,000. I implore you to find a brand new BEV in the US for under $30,000, even $40,000. Why not at least try to work together to bring affordable EVs to the masses? Even if it merely fills the market gap for the next 5-6 years while the rest of the industry catches up, consumers, and more importantly, mother nature, could benefit.
Don’t get it twisted; I’m not pro-China. I want to see US consumers buying EVs from all automakers that give back to the US economy. Still, it’s hard to argue that the US needs to block out quality EVs made in China that are available to drive today when its local automakers are giving us far too few products to consider, especially those not in the price range for many consumers.
From the perspective of mere technology and scaled production enabling affordability, China is hands down the global leader, and it would be nice if US consumers could be able to take advantage of at least some of those products because many of them are simply better than what legacy automakers are putting out today. After all, China had a head start.
I know global trade is a lot more complicated than what I’m suggesting, and it can’t all be singing “kumbaya” around the fire. Still, I can daydream about a future in which trade talks focus on the environment and EV adoption, where there’s a way brands in China can sell their EVs in the US while stimulating both economies. That’s more realistically more of a pipe dream, though.
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Tesla has reportedly yet to start testing its robotaxi service in Austin without a safety driver behind the wheel – just weeks before the planned launch.
For months now, Tesla and CEO Elon Musk have been hyping the launch of “Tesla Robotaxi”, a Uber-like ride-hailing service powered by autonomous Tesla vehicles, starting with a launch in Austin, Texas in June.
We have extensively reported that this launch is disappointing compared to what Tesla promised for years: that all its consumer vehicles built since 2016 are capable of self-driving.
Instead, Tesla plans to build an internal fleet of “10-20” Model Ys and have them offer ride-hailing services in a geo-fenced area around Austin, Texas, helped by human teleoperations. This is very similar to what Waymo has been offering in other cities for years, specifically in Austin, for months now.
Even with the significant downgrade in self-driving capabilities promised with this project, there are many doubts about Tesla’s ability to achieve the lesser goal.
That’s because the robotaxi service will be based on Tesla’s ‘Supervised Full Self-Driving’ program, which is currently achieving about 500 miles between critical disengagements fleet-wide, according to the latest crowdsourced data.
Tesla will be able to improve on that by optimizing a version for the geo-fenced area in Austin and it has been training its neural nets for that for months with vehicles going around Austin.
However, a new report now claims that Tesla has yet to start testing its service without safety drivers at the wheel – similar to Tesla’s public ‘Supervised FSD’. The Information wrote in a new report:
Elon Musk’s deadline for launching Tesla’s first robotaxi service, in Austin, Texas, is weeks away, but the company hadn’t started testing its cars without a human safety driver as of last month, according to an engineer close to the testing and a former employee. That’s a crucial step required before Tesla can launch the pilot service for customers.
For comparison, before launching its paid ride service in Austin, Waymo tested its vehicles with safety drivers in the area for 6 months and then without safety drivers for another 6 months.
Waymo has now taken over a significant market share of ride-hailing rides in the Texas capital, but it still has limitations; for example, it doesn’t drive on the interstate.
The report also mentions that Tesla has been working with local emergency services in Austin to develop intervention plans in order to avoid causing issues if its autonomous vehicles fail.
Electrek’s Take
This is the biggest softball goal. It’s a fraction of what was promised, it’s something that others have achieved before. It’s a punt created for Tesla to finally get a “win” in self-driving.
If they can’t even make it, it would be disastrous, but at least, I hope that it will finally open the eyes of many Tesla shareholders to the reality that Tesla is actually behind in autonomous driving and that Musk’s latest claims that Tesla will have “millions of robotaxi on the road” in 2026 are just the same as when he claimed it would happen in 2025, 2024, 2023, 2022, 2021, 2020, and 2019: corporate puffery.
My main concern now is for public safety. I have little hope of US regulators being able to stop Tesla considering Trump is firing anyone who got in Musk’s way after he gave him over $250 million.
If Tesla brings its cowboy approach to this, it could get bad quickly.
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The development of Rivian’s R2 validation builds continues to progress. We know so because the American automaker’s founder and CEO, RJ Scaringe, continues to pepper us with welcome updates with plenty of fantastic images. The latest post features the inner workings of Rivian’s Maximus drive unit, which will propel the upcoming R2 EVs when they hit the market next year.
Another day, another exciting social media update from RJ Scaringe. Nine days ago, the Rivian CEO shared a peek at the company’s new Maximus drive unit, designed to be more compact and efficiently built to help reduce cost-per-unit production.
Our only look was from outside the drive unit’s casing at the time, but it was exciting news nonetheless. As an encore, Scaringe posted photos of the R2 validation builds on a pilot line at the automaker’s facility in Normal, Illinois.
This evening, Scaringe took to Instagram and X once again to share a better look at the inner workings of the Rivian Maximus drive unit. Check it out:
RJ shares more images of Rivian’s Maximus development
Rivian’s CEO posted the three images above, which showcase some interesting perspectives of the developing drive unit. As previously shared by Rivian, Maximus uses a new continuous winding technique that reduces the total welds per stator and thus the total overall cost of building each one.
For comparison, Rivian’s current Enduro drive unit requires 264 stator welds, while Maximus only needs 24. You can see the stator windings in the image above to the left. Scaringe shared excitement in the progress of the Rivian team’s Maximus drive unit as well as some insight in his post:
I love the packaging on Maximus — the drive unit for R2. It has a side mounted inverter that utilizes flat area at the end of the motor to minimize the length of bus bars, keeping them light and efficient. The large planar shape also allows all processing and power electronics to exist on a single printed circuit board.
The inverter chassis closes out the oil cooled motor cavity and seamlessly routes coolant from the power modules to the drive unit’s heat exchanger with no extra parts.
Overall, the inverter part count is reduced by 41% relative to Enduro and structural inverter lid saves more parts and fasteners by also serving as the drive unit mount. I love this design efficiency. (heart emoji)
Looks fantastic, RJ. We can’t wait to see the visual progress of the R2 you share next!
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On today’s thrilling episode of Quick Charge, we’ve a huge spike in global EV sales and a huge dip in Tesla deliveries. Plus a whole bunch of news from Toyota, including an updated bZ that’s just a bit better than before … but is a bit better going to make a big difference?
We’re also on track for more than 1 in 4 new cars sold this year to be electric, with a whole lot more hybrids coming in to make up the difference and drive fuel demand down to a new yearly low. All this, plus the top 5 cheapest EVs to insure when you hit the play button.
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