China tells automakers to pause investment in tariff-supporting countries
China has reportedly already told its major automakers to hold off investments in EU countries that supported Europe’s new EV tariffs, according to Reuters.
While China started a little slow in the EV game, its investments into EV manufacturing have now started to bear fruit, and the country’s manufacturers have rapidly caught up and now passed western automakers, particularly on price.
As a result, both Europe and the US have recently imposed large tariffs on Chinese EVs, fearing that Chinese cars will undercut domestic industry with lower manufacturing costs. Chinese EVs are already quite popular in Europe, though very few sell in the US.
While the EU tariff vote passed handily, the voting patterns among countries mostly reflected fear of retaliatory tariffs. As is often the case with tariffs, a country can’t simply impose a restriction without expecting any pushback.
This is why, for example, Germany voted against the final tariff despite abstaining for the initial vote. German automakers do a lot of high-margin business in China, and worried that China would no longer purchase their autos either because of retaliatory tariffs or consumer animosity towards foreign brands (which is already happening, well before these tariff talks).
And China specifically has been quite effective in the past at responding to tariffs with targeted retaliatory tariffs of its own. Indeed, they’re already investigating EU dairy and wine products as potential tariff targets.
So it’s no surprise that today, on the same day as EU’s new tariffs went into effect, a report from Reuters says that the Chinese government has told automakers to think carefully before investing in Europe, particularly in countries that voted in favor of or abstained from the EU’s tariff imposition.
Several Chinese automakers are already considering building factories in Europe in order to localize production and bypass tariffs, including BYD, Geely and XPeng. This is kind of the intended effect of tariffs – ensuring that foreign automakers will invest in local production and local jobs.
But China wants to ensure that that investment money goes to countries that didn’t vote in favor of tariffs. BYD for example is currently building a plant in Hungary, a country that voted against the tariffs.
Meanwhile, other countries that did vote for the tariffs have attempted to get Chinese firms to invest in building factories there, like France and Italy. But this new directive would make their path towards investment tougher, if Chinese firms follow the government’s guidance.
This is likely not the only action that China will take in response to EU’s tariffs, merely a preliminary one. But it does show China’s willingness to swiftly respond to countries imposition of trade restrictions.
Concurrently, discussions are ongoing between EU and China about a potential minimum pricing deal to avoid tariffs. The hope was for those to conclude before tariffs were imposed, but it seems that they will have to continue.
Electrek’s Take
As I’ve said many times before, tariffs on China are not the answer to winning the EV arms race. I think countries would be much better off incentivizing local production than disincentivizing overseas production, and all the messy secondary effects that come along with the latter.
Further, tariffs can often lead to a sense of complacency for domestic manufacturers, who encourage them so they can have time to ramp up, and then take that time to slow-roll their ramp so that they end up back where they started. We saw this in the 70s with Japan in steel and autos – and the emergency tariffs did not forestall 50 years of Japanese export dominance (they were only kicked dethroned as #1 auto exporter last year – by China).
So despite the entrance of China onto the international automaker stage, most of the last year has been characterized by automakers doing their damnedest to slow down EV adoption. They’re scaling back production plans despite increasing EV demand , they’re begging governments to allow them to pollute more, and they’re generally not indicating that they’ll use the “time” these tariff impositions have given them wisely.
If this continues, then all Europe will get for its tariffs are a delay of the inevitable. They might still get some factories, but those factories will be owned by foreign entities instead of local ones. And this will come along with a lot of pain for whichever industries China decides to target with retaliatory tariffs, and with less competition and more inflation for local consumers as auto prices are buoyed by these tariffs.
I know I keep repeating myself (for more than a decade now…), but the true answer to this would have been to take EVs seriously from the get-go, instead of all the waffling that Western automakers have done that has left them now behind. That should have started long ago, but as the famous (possibly Chinese) proverb says: “the best time to plant a tree is 20 years ago, the second best time is today.”
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Leading yard operation 3PL YMX Logistics has announced plans to deploy fully twenty (20) of Orange EV’s fully electric Class 8 terminal trucks at a number of distribution and manufacturing sites across North America.
As the shipping and logistics industries increasingly move to embrace electrification, yard operations have proven to be an almost ideal use case for EVs, enabling companies like Orange EV, which specialize in yard hostlers or terminal tractors, to drive real, impactful change. To that end, companies like YMX are partnering with Orange EV.
“This relationship between YMX and Orange EV is a significant step forward in transforming yard operations across North America,” said Matt Yearling, CEO of YMX Logistics. “Besides the initial benefits of reduction in emissions and carbon footprint, our customers are also seeing improvements in the overall operational efficiency and seeking to expand. Our team members have also been sharing positive feedback about their new equipment and highlighting the positive impact on their health and day-to-day activities.”
This Orange looks good in blue
One of the most interesting aspects of this story – beyond the Orange EV HUSK-e XP’s almost unbelievable 180,000 lb. GCWR spec. – is that this isn’t a story about California’s ports, which mandate EVs. Instead, YMX is truly deploying these trucks throughout the country, with at least four currently in Chicago (and more on the way).
“Our collaboration with YMX Logistics represents a powerful stride in delivering sustainable yard solutions at scale for enterprise customers,” explains Wayne Mathisen, CEO of Orange EV. “With rising demand for electric yard trucks, our joint efforts ensure that more companies can access the environmental, financial, and operational benefits of electrification … this is a win for the planet, the workforce, and the bottom line of these organizations.”
We interviewed Orange EV founder Kurt Neutgens on The Heavy Equipment Podcast a few months back, but if you’re not familiar with these purpose-built trucks, it’s worth a listen.
HEP-isode 26
SOURCE | IMAGES: YMX Logistics.
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On today’s thrilling episode of Quick Charge, we’ve got the all-new Hyundai IONIQ 9 and its “a “rolling living room” pivoting captain’s chairs, Kia gets a go-fast 7 passenger SUV and an updated EV6, while Honda announces plans to start producing solid-state batteries at its new facility in just a few weeks.
We’ve also got big news for American workers – a Minnesota power company is ditching coal for solar while ExxonMobil and LG Chem get to work extracting thousands of tons of lithium out of Tennessee’s soil.
Today’s episode is sponsored by BLUETTI, a leading provider of portable power stations, solar generators, and energy storage systems. For a limited time, save up to 52% during BLUETTI’s exclusive Black Friday sale, now through November 28, and be sure to use promo code BLUETTI5OFF for 5% off all power stations sitewide. Learn more by clicking here.
You can watch the episode, below.
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Read more: Farm-fegnugen? Volkswagen rolls out an electric tractor.
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Arevon Energy has kicked off operations at Vikings Solar-plus-Storage – one of the US’s first utility-scale solar peaker plants.
The $529 million project in Imperial County, California, near Holtville, features 157 megawatts of solar power paired with 150 megawatts/600 megawatt hours of battery storage.
Vikings Solar-plus-Storage is designed to take cheap daytime solar power and store it for use during more expensive peak demand times, like late afternoons and evenings. The battery storage system can quickly respond to changes in demand, helping tackle critical grid needs.
Vikings leverages provisions in the Inflation Reduction Act that support affordable clean energy, strengthen grid resilience, boost US manufacturing, and create good jobs.
The Vikings project has already brought significant benefits to the local area. It employed over 170 people during construction, many local workers, and boosted nearby businesses like restaurants, hotels, and stores. On top of that, Vikings will pay out more than $17 million to local governments over its lifespan.
“Vikings’ advanced design sets the standard for safe and reliable solar-plus-storage configurations,” said Arevon CEO Kevin Smith. “The project incorporates solar panels, trackers, and batteries that showcase the growing strength of US renewable energy manufacturing.”
The project includes Tesla Megapack battery systems made in California, First Solar’s thin-film solar panels, and smart solar trackers from Nextracker. San Diego-based SOLV Energy handled the engineering, procurement, and construction work.
San Diego Community Power (SDCP) will buy the energy from the Vikings project under a long-term deal, helping power nearly 1 million customer accounts. SDCP and Arevon have also signed an agreement for the 200 MW Avocet Energy Storage Project in Carson, California, which will start construction in early 2025.
Vikings is named after the Holtville High School mascot, and Arevon is giving back to the local community by funding scholarships for deserving Holtville High students.
Arevon is a major renewable energy developer across the US and a key player in California, with nearly 2,500 MW in operation and more than 1,250 MW under construction.
Read more: Minnesota’s largest coal plant goes solar: Sherco Solar comes online
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