The U.S. government is waving a "big stick" of repression at Chinese car companies.。

"First stick": launch an investigation into Chinese car imports

On Thursday (February 29, local time), the U.S. government said that the United States is investigating whether Chinese car imports pose a national security risk and may impose restrictions due to concerns about automotive "connected" technology.。

The U.S. government believes the Commerce Department's investigation is necessary because vehicles collect large amounts of sensitive data about drivers and passengers and regularly use cameras and sensors to record detailed information about U.S. infrastructure.。

"China's policies could flood our markets with its vehicles, posing a risk to our national security.。President Joe Biden said in a statement, "I will not let this happen during my term."。Biden called the move "an unprecedented action to ensure that cars from countries of concern like China do not compromise our national security."。"

White House officials said in interviews that it was too early to say what action might be taken and said no decision had been made on whether Chinese connected cars would be banned or restricted.。But it also added that the U.S. government has broad legal powers to take actions that could have a "huge impact."。

The Alliance for Automotive Innovation said the Commerce Department should work closely with the auto industry to determine the scope of any action.。Members of the alliance include almost all major automakers such as General Motors, Toyota, and Volkswagen。

The coalition also urged the Commerce Department to prioritize targeting deals that pose an undue risk to the U.S. economy and national security, but not to take action on "low-risk deals that could have short-term unintended impacts on advanced vehicle safety technologies."。

Commenting on the government's action, Commerce Minister Gina Raimondo said the action was taken to prevent them from spreading widely and "potentially threatening our privacy and national security."。

"The Second Stick": New Tariffs

Separately, the U.S. government is considering new tariffs on Chinese-made cars, and the government faces new pressure to restrict imports of Chinese electric cars from Mexico.。

Chinese electric car makers have long targeted Southeast Asia, the Middle East and Europe as their biggest export markets.。However, for various reasons, not many Chinese cars are exported to the United States。

BYD has repeatedly said it has no current plans to sell electric vehicles in the United States.。But just the day before yesterday (February 28), BYD Executive Vice President and President of BYD Americas Li Ke said in an interview that BYD will choose a site in Mexico to build a plant to increase its share of the local market.。Li Ke said it is expected to site a factory with an annual output of 150,000 vehicles by the end of 2024.。

BYD's move is thought to be a loan to Mexico in a bid to open the door to the U.S. market。

Mexico is the world's seventh largest producer of automobiles and the fifth largest producer of auto parts, with rich metal minerals and human resources.。And according to the U.S.-Canada-Mexico agreement, companies building factories in Mexico purchase a certain percentage of parts in three North American countries that can be exported to the U.S. with zero tariffs, so Mexico is getting more and more attention from automakers.。

BYD surpassed Tesla in the fourth quarter of last year to become the world's "sales crown" for electric vehicles, and its footprint has spread to more than 70 countries and regions on six continents, landing in more than 400 cities.。As one of the world's top auto markets, BYD naturally doesn't want to let go.。

And as a new generation of Chinese new energy vehicle brand "car king," BYD's competitive advantage is very obvious。BYD recently announced that it will start selling Dolphin Mini electric cars in Mexico at a price of 358,800 Mexican pesos (about 21,019.USD), less than half the price of the cheapest Tesla。

In response to the U.S. intentions, Foreign Ministry spokesman Mao Ning said at a regular press conference on March 1 that U.S. car companies have been fully enjoying the dividends of China's big market, but instead the U.S. is engaged in trade protectionism, setting up discriminatory subsidy policies and other obstacles, seriously hindering the entry of Chinese cars into the U.S. market.。This politicization of economic and trade issues will only hinder the development of the U.S. auto industry.。And urged the U.S. to respect the laws of the market economy and the principle of fair competition, and stop discrimination and suppression of Chinese enterprises.。

The scale of outbound investment by Chinese car companies is expanding.

Chinese electric car brands have been increasing their foreign investment in the past two years.。

On February 29, the Rhodium Group, an American economic research company, released a report on China's automobile foreign investment.。The report mentions that the scale of China's foreign direct investment in electric vehicle-related industries may set a new record in 2023.。At present, the amount of foreign direct investment in 2023 is 28.2 billion US dollars.。Although the figure is lower than the $29.7 billion in 2022, the 2023 investment does not include large projects such as BYD's Hungarian plant, for which no investment has yet been determined.。

The report also mentioned that compared with the previous year, foreign direct investment in China's electric vehicle industry in 2023 was more concentrated in the midstream battery manufacturing sector, with related investment reaching 22.4 billion US dollars.。At the same time, China's overseas electric vehicle investment is expected to remain strong this year, and the investment focus will shift from battery manufacturing to electric vehicle manufacturing in Europe, Latin America and Asia。