Tesla: US should pressure China to lower barriers to US automakers

Tesla Model S

Chinese president Xi Jinping will be visiting the US next month, and Tesla, for one, thinks the Obama administration should talk to him about about making it easier for US automakers to do business in China.

All the big global OEMs produce vehicles in China, mostly through joint ventures, as foreign carmakers are prohibited from doing business there without a local partner. Foreign vehicles also must pay hefty import duties.

Meanwhile, Chinese automakers wishing to operate in the US are not subject to the same restrictions. That hasn’t been an issue, as no Chinese carmakers are currently manufacturing passenger cars in the US (BYD is building electric city buses in California). However, that could change, as several new or reborn EV makers (Faraday Future, Atieva, Fisker, Leshi) are planning to try their luck. Some of these are owned or backed by Chinese firms (and some have hired engineers away from Tesla).

“The China-owned companies are not expected to sell controlling stakes to American companies and are free from other trade hurdles that we face,” said Tesla Communications Chief Ricardo Reyes. “The requirement that Tesla establish a joint venture for local manufacturing and other obstacles to our activities, such as much higher import duties in China compared to the United States, put American car companies at a significant disadvantage.”

 

Source: Wall Street Journal
Image: David van der Mark (CC BY-SA 2.0)