Why Is Everyone Panicking About Chinese Cars?

Issue #197

Today, we discuss Chinese cars.

Again? Yes, again, but this it’s because US automakers are urging Trump not to bring them into the country. We explain why there’s so much concern.

Or, you can continue to read by scrolling down.

Market News

• GM owes another $12.75 million after more info on its sneaky practices comes up, explaining how it sold driver data. Here’s more. 

• Here’s how Ineos wants to build smaller SUVs, and it’s looking for partners. 

• This is the last manual, V8, rear-wheel drive sedan left in the US. It now produces 685 hp, and it’s a killer. 

• Ford’s F-150 supply crashed by 40%, and these two rivals are smelling blood. 

• Consumer Reports puts America’s full-size truck reliability on the spotlight. As you can read here, the results are not good.

Safety and Recalls

• iSeeCars analyzed the market to see which cars will have the most recalls. Here are the top 25. 

• GM recalls ACDelco brake fluid because of sediment presence. Here’s more. 

• Tesla recalls nearly 220,000 vehicles because of this issue. 

• Ram recalls several Ram 2500 because they are too fast for their tires. Here’s more. 

Car Culture

• After a crash, a bike ended up here. It’s not AI, but the driver will survive with non-threatening serious injuries. 

• Here’s what Kia imagines will be a vehicle for the “gamer generation.” Do you like it? 

• What happens to a Tesla battery after 380,000 miles? This particular model makes a case for and against EVs. 

• Here’s how BMW copied Honda’s technology to pass emissions. The catch? It’s technology from the 70s. 

• Here are the best-selling cars, trucks and SUVs in every state. Can you guess what sells the most in yours?

Video Of The Week

As a foreshadow of today’s OP-ED, here’s how China is winning in the luxury vehicle game. 

In The Know

Chinese Car Panic: What’s Going On?

​I know, I know, Chinese cars aren’t necessarily the hottest topic in this newsletter, but they’re taking over the headlines, and we must explain why.

If you think about Chinese cars in the US, two images come to mind. Either you imagine the Lincoln Nautilus or these funky $2,000 trucks, which aren’t trucks, and aren’t $2,000, but still, great fun.

However, the reality of Chinese cars is much more complex.

Joke videos aside, Chinese vehicles are already in the United States, and we’re talking about SUVs, trucks, and sedans, but how did they get here? Well, there’s a catch.

As this article states, the Mexican border has numerous dealerships selling Chinese car brands, such as BYD and MG. These vehicles can then cross the border and temporarily drive within the US.

But why is this a problem?

The main reason why the US Government has banned Chinese cars is that they are a national security risk. However, now there are Chinese vehicles driving on California streets, albeit temporarily.

The risk (mainly centered around data collection) combines with a competitive concern. These vehicles are simply too cheap for US automakers to compete.

That’s why the entire world is buying them. Last Monday, reports surfaced that Chinese car exports have grown by 85% Year-To-Year, as this article explains.

Their dominance is no joke, but Chinese cars are also somewhat of a dilemma for China. Exports rule the market, but domestic sales are falling because local Chinese buyers are saturated, as you can read here.

You might be wondering, " Why does this matter?”

Well, because it’s the perfect storm. China is desperate to sell more cars, especially those that would’ve otherwise gone to the domestic market.

At the same time, the US knows that, with current gas prices, EVs are becoming more attractive, and their entry into the US could derail local production. Although even this reality is up for debate. To meet US safety standards, Chinese automakers would have to invest more, which would raise their costs, as you can read here.

Still, US automakers are desperately warning Trump not to reach any agreement on importing them into the US, as this article highlights. Even with added costs, they would still be more affordable. 

The Congress has made a bipartisan effort to keep these vehicles away. They are also pushing to approve a crucial move that would block not only Chinese vehicles but also parts.

That’s right, the US Congress wants to ban anything “Made In China,” and it’s as challenging as it sounds. You can learn more about it here.

If they accomplish it, it could help boost American production. Now, it all depends on how the Chinese summit goes, where they hope the US President follows suit.