Elon Musk says new tariffs on Chinese EVs are ‘not good’
The Biden Administration’s recent decision to impose new tariffs on Chinese goods impacted many sectors, particularly the electric vehicle sector. Tesla (TSLA) CEO Elon Musk expressed his disapproval of the new legislation — which raised tariffs on Chinese electric vehicles from 25% to 100% — despite his previous support for Chinese tariffs.
In a statement, Musk said, “Things that inhibit freedom of exchange or distort the market are not good.”
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This post was written by Angel Smith
Video Transcript
Tesla, Ceo Elon Musk says he opposes us tariffs on Chinese electric vehicles.
Yahoo Finance spoke exclusively with President Biden after the announcement to raise the tariff from 25% to 100%.
And this is what Potus had to say if we, we allow them to continue what they’re doing to flood the market with evs that are incredibly cheap.
They’re not making any money on them deliberately doing it to put other people out of business for more on this.
Yahoo Finance’s very own.
Akiko Fujita is here.
Hey, Akiko, hey there, Brad.
Well, those comments from Elon Musk came at a tech conference over in Paris and specifically, he said he was surprised when the US made this announcement saying that things that inhibit freedom of exchange or distort the market are not good.
Now, it marked a bit of a shift in tone from Mus Commons back in January.
Remember back then, he argued that tariffs were necessary saying that without them, Chinese car maker would demolish in his words, most other car companies in the world.
Now all of this stems from concerns about cheap Chinese vehicles flooding global markets, squeezing out competitors while China does remain the largest market, Chinese carmakers have increasingly been making pushes into new countries as their home market slows down, slows down and they have been making inroads, particularly in Europe.
They increased their market share over in the eu to 20% of the European market last year.
That was from 16% the previous year.
And they did that largely by price with Chinese car maker commanding a 30% cost advantage over European rivals.
Now you’ve got the European Commission considering tariffs on Chinese car imports that by some estimates can range from 15 to 20%.
The Rhodium Group put out a study estimating that tariffs would be to be as high as 55% to curb import imports and the concern is something similar could happen here in the US as well.
Now, Elon Musk saying he doesn’t necessarily want tariffs.
That’s something we’ve heard from other car ceo S as well.
Clan is Ceo Carlos Tavares saying that tariffs aren’t necessarily the answer because car makers compete in a global market just a few days ago.
He was interviewed by Reuters saying that he believes these tariffs are, in his words, a major trap for the countries that go on that path and that ultimately Western car makers will need to find a way to restructure to be able to meet the challenge from lower cost.
Chinese manufacturers specifically, Tavares said when you fight against the competition to absorb 30% of cost competitiveness edge in favor of the Chinese.
There are social consequences.
And the bottom line is this guys, when you think about what Chinese cars or Chinese EVs are selling for, you’ve got a price tag of roughly $10,000.
If you look at something like Byd Seagull, even with the tariffs, they can still be cost competitive.
So that’s exactly what those like Elon Musk potentially but especially Cilento Cillo has been hitting on saying you’ve got to have a restructuring really rethink about how these car companies are structured because the Chinese carmakers are going to continue to make a push into new markets.
They will have to go head to head with them at these very low price points regardless of where those tariffs land.
