The political climate surrounding electric vehicles is a tough one. From manufacturing, to country-of-origin requirements, and even the ban of gas-powered cars—there's no one answer to fully satisfy every single concern out there. That's why the transitional period towards the electrification of passenger cars over the next decade will be so politically charged.

Welcome to Critical Materials, your daily roundup of all things EV and automotive tech. Today, we're picking apart former U.S. President Donald Trump's talking points on EVs, casting doubt on BYD's alleged "no plans" to sell EVs in the U.S., and learning that automakers in Europe are accepting the inevitable fate of gas cars being banned in 2035. Let's dig in.

 

30%: What Trump Got Wrong About EVs in Michigan

Donald Trump Presents The Lordstown Endurance At The White House

Donald Trump, seeking reelection as the current GOP frontrunner, held a political rally in Waterford Township, Michigan, this past weekend. With nearly 2,000 people in attendance, Trump touched on many topics for his nearly hour-and-a-half long speech, including electric cars.

However, some of his claims were a bit far-fetched, to put it gently. The Detroit Free Press did an impressive job trying to debunk them all:

"They ordered a hit job on Michigan manufacturing with this insane electric vehicle mandate." Mostly false. In fact, the global auto market is moving to electric vehicles and will be a majority of vehicles sold in the next 20 years or so. The problem with backing away from pressuring the auto industry today to develop EV technology is that America will lose the overall manufacturing lead. China will win. China is prepared to take over the world with electric vehicles. If North American and European companies don't focus on pushing forward, other countries will come in and eat their lunch. There will be no coming back from that. The Detroit Three could be out of business. In addition, automakers have invested billions in Michigan and other parts of the U.S. to lay the groundwork for local electric vehicle production.

During his speech, Trump claimed that "nobody wants to buy" EVs. This simply isn't true, as more than 1.1 million people registered an EV in the U.S. during 2023, making the electric segment around 7.7% of the total car market. Sure, there have been some re-balancing by automakers like Ford who overshot the expected demand of vehicles like the F-150 Lightning, but to claim that "nobody wants" EVs is an overreach.

Trump also claimed that the EV options on sale today "are very expensive." This isn't completely accurate, as vehicles like the in-inventory Tesla Model 3 can be had for as low as $35,090—For comparison, the average U.S. new vehicle transaction price was $48,247 in November 2023 according to Cox Automotive. It's worth calling out that the average EV costs around 10% more than the gas-powered counterpart, though this cost is expected to be offset by federal tax incentives and a lower cost of total ownership.

In reality, the Biden Administration's current emissions rules are helping to keep pressure on the industry to remain innovative. The global market has already been moving toward EVs. If domestic manufacturers were to back down, they would fall behind the international competition that is already being forced towards electrification in Europe, which has a looming mandate to electrify the majority of new passenger car sales by 2035.

While Trump did make some rather farfetched claims about EVs, he also made some arguments that resonated with the workers of America's auto manufacturing.

Regardless of the position, the Detroit Free Press' story is worth a read, if only as a preview of how EVs will become a hot-button issue this election cycle. 

60%: BYD Says it Has "No Plans" to Sell EVs in the U.S.

BYD YangWang U7 side profile

One thing that the former president did touch on that has been a revolving door for concern was Chinese EVs slinking towards the country's doorstep. Foreign automakers have been looking to Mexico as an entry point for the U.S. market thanks to the United States-Mexico-Canada Agreement, a trade agreement negotiated under the Trump-administration that went into effect in 2020.

Chinese auto giant BYD reportedly looked into this very avenue recently. After all, why not expand into the world's second-largest if you have the capacity?

In a recent interview with Yahoo Finance, BYD Executive Vice President and CEO of BYD Americas Stella Li said that the automaker has no current plans to sell new vehicles in the U.S.—or, at least not yet.

It's an interesting market but it's very complicated if you're talking about EV, and then I think the US market is a little bit slowdown on electrification and there are a lot of confusing, also very complicated, so we're saying, 'No... we don't have plans to come to the US.'

[...]

Everything is complicated. Politics are complicated... and it's confusing for the consumer, and then they don't know which to choose.

Given the current political climate on Chinese EVs potentially entering the U.S. market through Mexico, it's no surprise to see BYD downplaying the possibility of expanding in order to fly under the radar. After all, if you have no plans to enter a market, the potential of utilizing a loophole appears nonexistent.

The Alliance for American Manufacturing recently published a report that outlined the potential of an "extinction-level event for the U.S. auto sector. Specifically, the report described foreign automakers utilizing Mexico as a manufacturing channel and import hub, and BYD was listed as a direct concern. Here's a snippet:

In February 2024, Chinese auto giant [BYD] unveiled a fully electric crossover sport utility vehicle priced at an astonishingly low $14,000. News of this ultra-cheap electric vehicle (EV) had the auto industry media abuzz, with one outlet declaring that “Americans would eat this up,” and that the vehicle would “sell like hotcakes.” But there is always a cost. In this case, it may very well be the U.S. auto industry

While BYD may have no plans to launch vehicles in the U.S. right now, that's not to say that it never will. Likely, the global EV player will need to wait for the political storm to settle before making any moves—or until that Mexican factory is up to speed.

90%: European Automakers Will Not Challenge 2035 Gas Car Ban

Gas pump

A report by Reuters confirms that major automakers currently doing business in the European Union do not plan to fight regulations that will effectively ban vehicles that run on combustible fossil fuel.

The directive comes from Luca de Meo, the president of the European Automobile Manufacturers Association trade group and CEO of Renault. Speaking at an automotive show in Geneva recently, de Meo outlined the industry's responsibility to comply with the regulation.

"[The auto industry's responsibility] as business leaders is not to argue against the regulation, said de Meo. "We are not contesting 2035. Now we must get down to it."

Current regulations call for the ban of new internal combustion vehicles by 2035 across the European Union. Some countries, like England, have more ambitious timelines such as requiring the ban as early as 2030, while others like Germany are pushing to relax the ban by allowing combustion engines if they can be supported by synthetic "e-fuel."

While the deadline of 2035 seems quite near, de Meo noted that it is "potentially feasible," though the "right conditions must be put in place" by regulators and the industry in order for the transition to be successful. More specifically, de Meo's words echo the auto industry's calls for additional government subsidies and a more robust charging infrastructure will be needed to foster adoption.

100%: Revisiting: Would You Buy a Chinese EV?

2023 BYD Seagull

We've asked this one before, but given the current focus on this particular topic in the U.S. government, it feels pertinent to ask it again—especially after seeing some of the comments readers made in yesterday's news of the Ford Maverick and Bronco getting delayed.

BYD may state that it has no plans to sell EVs in the U.S., but real-world signs are pointing to the opposite. That being said, the U.S. could see an influx of Chinese-made EVs on its roads, whether it be directly or through parts proxy hell.

If that were to happen today, what would be your pick? BYD, in particular, has some attractive options like Seal, or very affordable options like the sub-$12,000 Seagull. Or if you prefer sporty, perhaps the YangWang U9 supercar is up your alley to rival Tesla's next-gen Roadster for that spot in your driveway.

Either way, I want to know how your thoughts may have changed in the last several months. Let me know in the comments.

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