Here in the U.S., we're slogging through the most contentious election cycle in modern history. And the role of electric vehicles in our future automotive landscape—where they're built, how many of them will replace new gas-powered cars and how they're incentivized—will be just one of the hot-button issues for voters to decide. In the meantime, politicians on both sides of the aisle hope that slapping tariffs on EVs from China will protect our market from competitors that are both vastly more advanced and far cheaper. But that's not going to work for long, and a quick jaunt over to Europe shows us why.
That leads off this Wednesday edition of Critical Materials, our morning roundup of news about the industry, tech and transportation. Also on deck: Tesla goes on a hiring spree (yes, after the layoffs) and Honda has a big year planned.
30%: What Tariffs? BYD Is Building A Factory In Turkey To Get Around Them
Both the U.S. and the European Union are hitting Chinese EV juggernauts like BYD—which outpaced Tesla in electric production last year and is a true force to be reckoned with in this industry—with steep new tariffs to limit their ability to compete in Western markets. The fear is that Chinese EVs could come in at vastly lower prices and trash the local competitors.
Critics can blame government subsidies, or cheaper (and in some cases forced) labor in its supply chain, or IP theft all they wan. But the fact is that China is ahead on EVs. And tariffs seem to be a band-aid at most.
Want a preview of the future? BYD is building a new $1 billion car factory in Turkey, the automaker and that country's government announced this month. (We're a bit late on this news, but I wanted to cover it anyway.) The factory would supply cars to the European market, and unless the rules change drastically, it should be exempted from the European Union's tariffs. Here's CNN:
BYD’s CEO Wang Chuanfu and Turkey’s Industry and Technology Minister Mehmet Fatih Kaci signed the agreement in Istanbul, according to a statement from the Turkish ministry Monday. Turkish President Recep Tayyip Erdogan attended the signing ceremony, it said.
“We aim to meet the growing demand for new-energy vehicles in the region and reach consumers in Europe,” the statement cited BYD representatives as saying.
The announcement came just days after provisional additional duties on imports of Chinese-made EVs into the European Union came into effect. The tariffs, ranging from 17.4% to 37.6%, are aimed at stopping a flood of cheap Chinese cars built with what the EU deems unfair support from the government.
[...] According to the agreement with Turkey, BYD will invest about $1 billion in the factory, which will be able to produce 150,000 electric and hybrid vehicles annually, and set up a research and development center for sustainable mobility technologies at the plant.
The factory is expected to start production at the end of 2026 and provide as many as 5,000 jobs in the country.
We've certainly seen this playbook before. Faced with export restrictions to the U.S. in the 1980s, the Japanese automakers responded by building car factories here instead (and creating luxury brands like Lexus that could win on profit margins with more expensive goods.) Tariffs often lead to local production instead and this is playing out in various forms in Europe now.
Could BYD do in America what Honda and Toyota did in Ohio, Kentucky, Texas and other places? I think it'd face intense political scrutiny, just like that aborted Ford-CATL battery plant deal. But it's certainly plausible. It's been done before.
The tough thing about capitalism is that it doesn't always go the way you want it to, which is kind of the entire point, when you think about it. We can try and tariff out the Chinese automakers but capitalism finds a way. Even China's version of it.
60%: After Layoffs, Tesla Is Back On A Hiring Spree
Want a job at Tesla? Never mind the thousands of roles that were eliminated earlier this year, including most, if not all, of its charging team. The electric automaker—I mean, AI and robotics company—is on a hiring spree again, Bloomberg reports. And it's "only" about 800 roles so far but those positions could say a lot about where the company is going:
Now, many of the openings the company is looking to fill focus on AI and robotics for products including Optimus, Tesla’s humanoid robot. There are at least 25 jobs related to self-driving development or Autopilot, and at least 30 focused on Optimus. Tesla is reinforcing its years-long pursuit of autonomy as it prepares to unveil the robotaxi prototypes in October.
The hiring spree likely will add personnel back to areas where Tesla cut too deeply, in addition to reflecting Musk’s vision for the company. He’s said he now views Tesla as more of an AI, robotics and sustainable energy company than an EV company.
[...] Tesla’s careers page lists several dozen energy-related positions in cities including Palo Alto and in Lathrop, California, where the company builds out Megapacks, its large-scale batteries. The roles range from engineering positions to jobs related to installing Megapacks and solar products.
The company’s customer-facing departments also are looking to replenish their staff. On July 15, Tesla had 268 service-related roles listed, including 77 service technicians, far exceeding any other position or department.
Many of these service positions will likely operate out of Tesla showrooms. The company has also posted more than 60 sales and customer support positions.
Those new positions are being added all over, from California to Texas to Buffalo and beyond. Tesla faces an uphill battle to commercialize new tech like robots and AI as it loses ground in the EV race, but Musk assures investors that these bets on non-car moves will make it the most valuable company on earth someday. Meanwhile, an event said to unveil its new "robotaxi" has been moved from August to some unspecified future date, possibly October.
90%: Honda Plans For Big Growth In 2024
It's still far too early to know if the General Motors-based Honda Prologue and Acura ZDX electric models will really move the sales needle for either brand. Here at InsideEVs, we only recently started counting them in our sales reports.
But according to Automotive News, as auto sales slow across the board—blame interest rates and other factors—Honda is betting those two EVs will at least help it grow faster than other competitors this year.
It's banking hard on brand loyalty for that, and its reputation for reliability and efficiency. How many buyers will even know the Prologue and ZDX are GM cars under the skin? Or even care?
Both brands are poised to benefit from incremental sales from their first new-era EVs, the Honda Prologue and Acura ZDX. Prologue deliveries started in March, with ZDX sales following in May.
The pair of midsize electric crossover are a result of a collaboration with General Motors and are being built at the Detroit automaker's assembly plants in Spring Hill, Tenn., and Ramos Arizpe, Mexico, respectively. [Lance Woelfer, vice president of auto sales for American Honda] said the GM partnership has thus far been successful.
Honda initially projected Prologue would reach 40,000 sales in its first year of sales, but Woelfer said because deliveries started later than planned, sales are still ramping up. He did not provide volume projections for the ZDX.
Woelfer said most dealers, spanning every market in the U.S., have now received delivery of the Honda Prologue. Honda took a tiered approach to its rollout, allocating them first to dealers in ZEV states. They are now in "group three," which includes states that might not have a high demand.
"We're seeing there is a level of BEV demand in pretty much every market, but it does vary," he said. "The approach our dealers should be taking is making sure every customer knows that we've got an electrified vehicle available and has the opportunity to consider it," Woefler said.
I am eager to see how this duo does.
100%: Would The U.S. Allow A BYD Factory Here In America?
Look at that! It's the BYD Seal U. I'd prefer the Seal sedan myself, but you can't tell me that crossover doesn't look like prime, Grade-A American buyer bait. So if BYD wanted to come in and make a factory in South Carolina, or Ohio, or Alabama, what would that take? Would the U.S. even allow it, or find a way with some tough requirements to bring such a partner into our manufacturing ecosystem?
Personally, I think having different rules for one country seems a bit like the same unfair practices the West accuses China of; plus, nobody batted an eye when VinFast planned its factory in North Carolina, and that country certainly has its issues with single-party authoritarianism. Then again, China is a very different kind of adversary.
Could a solution be reached there, and what does that look like?
Correction: An earlier version of this story said that Turkey is a European Union member state; it is not. We regret the error.
Contact the author: patrick.george@insideevs.com
