Any significant reduction or elimination of EV support under the Inflation Reduction Act would benefit China General Motors Board member Jon McNeil.
“I think we’re at risk of losing share of auto manufacturing to China. Globally, we do,” said McNeil, a former U.S. automaker. Tesla President, Co-Founder and CEO DVx Venturessaid on CNBC’s “Squawk on the Street” on Wednesday.
The 2022 IRA includes incentives for consumers to buy electric vehicles and strong support for automakers and suppliers to produce all-electric vehicles and their parts in North America instead of overseas.
McNeil said in an email to CNBC that the IRA is offering inducements to manufacturers and consumers to “level the playing field for Chinese auto companies.”
From Detroit to Germany, the expansion of Chinese automakers is attracting increasing attention from companies. Global automakers are worried BYD and other Chinese rivals could flood their markets, undermining domestic production and vehicle prices.
The IRA is also a potential issue in the upcoming November presidential election. have There have been recent media reports If former President Trump is re-elected, he will repeal many of the Biden administration’s clean energy and climate initiatives, such as the $430 billion IRA.
Republican presidential candidate and former US President Trump attended a campaign event in Freeland, Michigan, USA on May 1, 2024.
Brendan McDermid | Reuters
Trump has mentioned such moves. He told a rally in Wisconsin on May 1 that upon taking office, he would “immediately suspend all new spending subsidies and giveaways under Joe Biden’s massive socialist bill, such as the so-called Inflation Cut Act.” .
“We’re going to save all the money. It’s not going to help you at all. It’s not going to do anything for you. It’s just, it’s like a political game,” Trump said.
To truly achieve full abolition of the IRA, Trump would need Republican majorities in both houses of Congress, which, while possible, is unlikely. Furthermore, those hypothetical Republican majorities would need to put IRA rollback at the top of their list of legislative priorities, but that’s not guaranteed either.
In his second term, however, Trump is likely to further delay implementation of IRA policies, which are already rolling out more slowly than some would like due to legal complexities.
McNeil said he had been closely monitoring the political environment for the IRA. He said any changes should be a bipartisan discussion rather than any kind of Republican backtracking or cuts.
McNeil noted that the Chinese government has been supporting domestic automakers with billions of dollars in aid and subsidies, incentives such as zero percent financing and lower labor costs.
Production is set to begin at the former Detroit-Hamtramck Assembly Plant less than two years after General Motors announced a massive $2.2 billion investment to overhaul the plant to produce a variety of all-electric trucks and SUVs.
Photo by Jeffrey Sauger for General Motors
“It’s very difficult to compete with the U.S. at these price levels or cost levels, which is why a lot of people think it’s important to protect U.S. manufacturers from this,” he said.
To help U.S. automakers compete with Chinese companies, U.S. President Joe Biden last week announced plans to quadruple tariffs on Chinese-made electric vehicles, from 25% to 100%.
However, several auto and trade experts told CNBC that higher tariffs are a near-term protectionist move that could delay but not prevent Chinese automakers from bringing electric vehicles to the United States.
The electric vehicle tariffs, along with other increases on battery materials, are part of a larger plan to impose new tariffs on $18 billion worth of Chinese imports.
—CNBC Rebecca Picciotto contributed to this report.
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