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On Tuesday, President Joe Biden announced new, 100 percent tariffs on electric vehicles imported from China, a huge bump from the previous 27.5 percent tariff rate. The move is aimed at forestalling the influx into the U.S. market of Chinese EVs, which are rapidly gaining steam across Europe.

China is home to many EV makers. But the biggest threat to the U.S. auto industry arguably comes from BYD — short for Build Your Dreams.

BYD’s Global Dreams

Founded in 2003, BYD Auto surpassed Volkswagen in 2023 to become China’s top automobile brand, selling over 2.5 million vehicles and more than a quarter of the country’s electric and plug-in hybrids last year.

BYD has global ambitions. It wants to eclipse Tesla in Europe by 2030. And it has its eyes on a market just across the U.S. border, Mexico, where it’s just launched a fierce-looking hybrid pickup truck, appropriately named the Shark.

The company is offering a compelling range of models, including the 190-mile-range hatchback Seagull EV Honor that starts at just under $10,000 in China and the Sea Lion 07 — a competitor to the Tesla Y.

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BYD passenger vehicles may not be coming stateside anytime soon. But it’s worth noting the company has been manufacturing electric buses in California since 2013.

BYD’s Secret Sauce

So what’s behind BYD’s success? Subsidies to the industry — over $29 billion from 2009 to 2022 — have a lot to do with it. The electric vehicle industry is among the priorities of Chinese paramount leader Xi Jinping’s signature industrial policy, Made in China 2025.

But BYD’s own design feats are also part of the picture.

Terry Woychowski, a former chief engineer at General Motors and now president of the Detroit-based Caresoft Global, disassembled a BYD Seagull and found the car’s design to be “an exercise in efficiency.” He attributes that efficiency in part to vertical integration at BYD.

The company makes its own motors and other parts — and isn’t afraid to eliminate superfluous parts. The cumulative efficiencies allow for a lighter vehicle that needs a comparatively smaller (and thus cheaper) battery to travel the same range as an American EV. BYD’s vehicles use its proprietary Blade lithium iron phosphate or LFP batteries, which are cheaper than more common lithium-ion batteries.

What to Watch Out For

BYD will be making, not just selling vehicles in Mexico. The company says the plant there will produce vehicles for the Mexican market, but some see it as a Trojan Horse to skirt the most onerous U.S. tariffs and enter the market here.

The tariffs, auto industry analysts argue, may not be enough to stave off the advance of Chinese autos. Chinese electric vehicles, says automotive consultant Dan Hearsch, are “going to be here.” “It’s inevitable. It’s just a matter of time.”

Indeed, Chinese electric vehicles are already here. Chinese-made Volvo and Polestar EVs have been sold in the U.S. for years. (The Chinese company Geely purchased Volvo in 2010.) The real question is whether Americans are willing to take a bet on China’s homegrown brands like BYD.

In the months ahead, the choice could be made for them if Washington chooses to ban Chinese electric vehicle models based on human rights considerations (exposure to Uyghur forced labor) or the perceived national security posed by connected vehicles.

Arif Rafiq is the editor of Globely News. Rafiq has contributed commentary and analysis on global issues for publications such as Foreign Affairs, Foreign Policy, the New Republic, the New York Times, and POLITICO Magazine.

He has appeared on numerous broadcast outlets, including Al Jazeera English, the BBC World Service, CNN International, and National Public Radio.

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