How China Is Grabbing Our Electric-Car Market

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China has begun selling cheap electric cars in the U.S. These are deeply subsidized, when you count all the government subsidies to China’s auto industry, the oppressed labor, and China’s protectionism.

These cars include the Polestar, made by China’s Geely Auto Group, and the K27 made by China’s Kandi—with a sticker price of $17,499. That’s less than half the cost of the cheapest U.S.-made electric vehicle.

And thanks to the $7,500 federal tax credit, you could drive one of these babies for just under $10,000, or about a third of the net cost of the cheapest U.S.-made car. If you live in a state with EV subsidies, it would be even cheaper.

And it gets worse. The federal tax credit is capped at 200,000 units per carmaker. So you get no tax credit if you buy a Tesla or a Chevy Volt.

The EV tax credit is industrial policy and energy policy. The Biden administration hopes to convert the U.S. to all-electric cars, and to restructure the U.S. auto industry accordingly. But at this rate, the prime beneficiary will be China.

Despite the infrastructure bill, the larger $3.5 trillion public-investment bill, and the bipartisan China legislation that passed the Senate, there is nothing pending in Congress or the administration that addresses this problem.

We can’t duck this issue: Industrial policy is China policy. We need to bite this bullet and limit the credit to cars made in the USA—and address all the other ways that China’s mercantilism challenges the future of U.S. industry and technology, as well as our national security.

Is this a trade war? Gentle reader, we’ve been in one for decades, and we are losing it.

Thanks to Mike Stumo of the Coalition for a Prosperous America for flagging this.

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