Introduction

It's already 2024... Please abandon all fantasies.

No previous US presidential election has been as tumultuous and full of suspense as this one. Even major shifts that could be described as "reversals" have occurred repeatedly.

As the US launches a comprehensive national competition against China and gradually implements its core industry "small yard, high wall" policy, although the economic and trade relations between the two countries have cooled due to the overall deterioration of the political environment, they have gradually stabilized after six years of continuous turbulence since 2018.

Some things are obvious. No matter how much trouble there is in public, people still need to eat behind closed doors. Especially since 2018, after six years of US tariffs, everyone knows that it's meaningless to waste time on things that can't be changed.

Image|The so-called "small yard, high wall" refers to the US allying with its partners and vassal states to build unified barriers in some high-tech and high value-added industries, exclusively defending their economic and political interests by consolidating technological advantages.

Based on the above understanding, for China's automotive industry, a question inevitably lingers in everyone's mind: After this US presidential election, will Chinese automakers find new opportunities in North America?

As we all know, based on global sales of small passenger vehicles in 2023, the top three automotive markets are China, the US, and Europe, with sales of 25.546 million, 15.457 million, and 12.85 million units, respectively.

Currently, the European Union is imposing so-called anti-subsidy tariffs on new energy vehicles on our enterprises. Considering that this is a relatively loose market that may need to interact with various governments, the US, ranked second, is actually more attractive.

On March 16th of this year, Trump, the Republican candidate for the US election, expressed his "openness" to Chinese automakers manufacturing cars in the US as long as they "hire American workers" during a campaign event in Ohio.

Image|The Butler shooting incident on July 13 led to the first trend reversal in this US election.

Especially on July 18th, when the US Republican National Convention was held in Milwaukee, Wisconsin, Trump, who appeared in public for the first time since the Butler shooting, reiterated his stance from four months ago of being "open" to the idea.

Although everyone knows that throughout US election history, the proportion of candidates fulfilling their campaign promises is indeed limited, and the US is currently deeply entrenched in severe political divisions, the presence of such a significant market is hard to ignore for domestic automakers that are already highly competitive in the domestic market and facing tariff increases in the European market.

So the key question this time is: If the "podium" position in the US changes hands and Trump returns to power, will Chinese automakers find opportunities in the US market?

Costless Political "Scapegoat

To clearly understand the impact of this US presidential election on China's trade with the US, especially on the economic and trade activities of Chinese automakers with the US, it is first necessary to have a framework understanding of the basic trade strategies advocated by the candidates of the Republican and Democratic parties. Let's first look at Trump's.

He publicly argues that all problems in the US can be blamed on "CHINA", especially for "stealing American jobs." The solution is to continue to raise the banner of trade protectionism and impose high tariffs on foreign goods, especially those from China.

Image|Trump understands the root and essence of the current problems in the US, but he prefers to find an external scapegoat, such as "retired Marine snipers suffering from mental illness."

Currently, the benchmark tax rate for Chinese goods exported to the US is 25%, and recently, the Biden administration has even increased the tax rate on some products such as electric vehicles and photovoltaic panels to 100% and 50%, respectively. If Trump is re-elected, he will likely continue to implement similar policies and may even further increase the current benchmark tax rate.

This aims to put more pressure on Chinese export enterprises, reduce China's exports to the US, and achieve the so-called "decoupling." In addition, technologically, Trump may also adopt extensive blocking measures similar to those in his previous term, giving more Chinese enterprises the same treatment as Huawei.

The foundation of economic and trade policy is domestic industrial policy. Trump still emphasizes bringing manufacturing back to the US, as he did in his previous term, and may introduce more policies to encourage enterprises to invest and set up factories in the US. At the same time, he will inevitably promote the development of domestic enterprises in the US through various regulatory relaxations and tax reductions.

If we say that Trump, nicknamed the "King of Understanding," has almost single-handedly reshaped the basic strategies and positions of the US Republican Party since 2016, making him synonymous with the party, then the Democratic candidate Harris is more like a "frontman" promoted by a behind-the-scenes power broker, specializing in articulating and implementing policies.

Image|Harris has the collective endorsement of Biden, the entire Democratic Party, and their behind-the-scenes promoters, making her seem "ordained by heaven."

Harris continues the current strategies of the Biden administration, whether in trade, industry, or energy policy.

In foreign economic and trade affairs, she will inevitably continue the policies of the Biden era, basically no longer directly confronting its European and East Asian allies but instead continuing to target China. However, her tariff policy will be more targeted rather than comprehensive.

The same is true for export controls in high-tech fields, as exemplified by the current "small yard, high wall" model. In key industries and technological nodes such as semiconductors and new energy vehicles, which the Democratic Party considers crucial, Harris will further strengthen domestic investment if elected.

In addition, in terms of basic energy policy, if Harris is elected, the Democratic Party will inevitably continue to promote the development of emerging industries such as domestic renewable energy and seek to support the upstream supply chain (photovoltaic panels, power batteries, etc.) of this industry in the US through enhanced government subsidies.

As can be clearly seen from the above summary, regardless of whether Trump or Harris takes the White House, either will have a direct impact on Chinese enterprises, especially the "going out" strategy of current Chinese automakers.

Image|TSMC Arizona Campus, photo taken in May this year

Trump's second term would likely reignite the gradually stabilizing Sino-US trade frictions. Targeted at domestic low- and mid-end enterprises trying to shift to Southeast Asia, Trump, known for his unpredictable "side-stepping" tactics, will surely keep these enterprises hopping from one low-tariff zone to another.

Perhaps in the end, the cruel reality will still force "the King of Understanding" to backtrack on his reckless promises, but it is the enterprises that suffer from all the turmoil, isn't it?

From this, we can clearly see that Trump's stated attitude of welcoming Chinese automakers as long as they set up factories in the US is consistent with his consistent industrial and economic policy of promoting the return of manufacturing to the US. His previous threat to target Chinese automakers trying to circumvent the issue by setting up factories in Mexico was also based on the hope of directly encouraging factories to be built in the US, fulfilling his political promise of providing more job opportunities for his "old white men" and "rednecks" voter base.

Image|Musk is currently the most important "MAGA" for "the King of Understanding" in the industry.

However, such empty promises made during campaigns should be taken with a grain of salt—even if "the King of Understanding" himself is serious, in the eyes of the Chinese, it's just a case of "killing two birds with one stone." After all, the US political ecosystem is a rotating monarchy, with a four-year term, and Trump has already served one term, so even if he is elected, he will have to step down in 2029.

Moreover, based on the current state of US infrastructure, it would take at least three to four years for an automaker to complete the entire process of planning, establishing, and commencing operations for a new factory, even without any obstacles. Once "the King of Understanding" leaves office, the Democratic Party will inevitably launch a major counterattack. In the current US political ecosystem, showing off muscle against China has become a "political punching bag" with no political consequences, allowing anyone to take a swing and gain some reputation.

Even low-level Trump imitators within the Republican Party, such as Senator Rubio, will inevitably participate in this political spectacle. Recall the recent project of Ford building its own power battery factory in the US; even though Contemporary Amperex Technology Co. Limited (CATL) only provided services without owning any shares, it still attracted a cluster of US senators to show off their presence.

Image|Ford's electric pickup truck production line

As for Harris, she has already made it clear that she intends to completely crush any possibility of Chinese automakers shipping vehicles to the US...

A Completely Divided Pie

Above, we discussed national political issues. However, for Chinese automakers entering the US market, they face not only pressure from the "front row" of the presidency and the two chambers but also resistance from vested interest groups such as US enterprises and financial groups, as well as the huge network they have woven.

Contrary to appearances, the US auto market may seem huge, but it is actually already completely divided. Any new entrant will have to compete for a share from the established players.

Image|If you think of the most common car brands on American roads and immediately think of Chrysler Town & Country, Cadillac DeVille, Buick Park Avenue, or Lincoln Continental, congratulations, you are an 80s kid with a stereotype left over from 90s American dramas; nowadays, the streets are full of Japanese cars!

Some might say that Chinese automakers can compete. That's true; at this stage, Chinese brand new energy vehicles outperform their competitors in terms of performance, configuration, and price. In many dimensions, we can even drop the prefix "new energy."

However, the reason they can't enter this market is precisely because of these things that Chinese people consider core competencies or what normal Chinese car owners prioritize when buying a car.

When the 2023 model of the Toyota Asia Dragon was launched, it was promoted with so-called "five killer features." Under this seemingly impressive description, the so-called "killer features" were actually a leather steering wheel, leather gear shift knob, leather seats, electrically adjustable front seats, and a 40/60 split-folding rear seat.

You can imagine how these "killer features" were mocked by netizens at the time. In the eyes of domestic consumers, this was a blatant manifestation of the arrogance of joint venture automakers in the past and present. However, amidst the laughter, as someone with some background knowledge of the US auto market, I must defend FAW Toyota after all this time.

Image|Yes, the prototype of the Asia Dragon is a regionally exclusive model that Toyota created by modifying the interior of the Crown and launching it in the North American market to meet local demand for cost-effective B-segment sedans. However, when it was introduced to China, the interior and configuration were upgraded, which is quite ironic.

As we all know, "Asia Dragon" is actually a distorted Chinese transliteration of the English name used in the Chinese market. This car is essentially a regionally exclusive variant of the Toyota Crown sedan for the North American market, and the correct translation based on historical context should be "Avalon." The positioning as a "North American exclusive" and its reintroduction to China suggest that the marketing team may have simply copied the North American marketing copy without thinking.

Don't be surprised that a B-segment sedan sold in the US market, which is considered decent in various aspects, dares to call features like leather upholstery and a 40/60 split-folding rear seat "killer features" just because it has them. Because cars there have been like this for the past thirty years—not only expensive but also poorly equipped.

Can you believe it if I told you that a mid- to high-spec Toyota Corolla Hybrid dares to sell for $32,000 in the US?

A mid-range Accord priced at $35,000 does not have rear air vents, while a high-end Accord priced at $38,000 cannot adjust the height of its rear headrests. Can you believe it in China?

Pic|Mid-range Accords sold in North America do not have rear air vents, and similar domestic cars, except for models ordered in bulk by taxi companies, only A-class budget models priced below $100,000 may lack them.

Pic|Uh... Is this acceptable?

Toyota's latest ninth-generation Camry, priced $5,000 higher than the eighth generation, still uses halogen bulbs for its reverse lights and front and rear turn signals in its base and second-tier trims. Can you believe it in China?

As for the 2.0L hybrid Corolla Cross, the "bare bones" trim is priced at $32,661. If friends who only care about domestic car prices saw this, they would likely shatter their glasses on the spot.

So, how could China's new energy vehicles possibly enter the US market? Even traditional fuel vehicles have no chance! And no one needs to point out here that "all the examples you gave are Japanese brands," because from sales data in the first half of this year in the US automotive market, apart from pickup trucks, Japanese cars dominate all other models in North America, and some niche markets are dominated by Japanese brands.

For Chinese people, buying a car at this stage is a type of upgrading consumption. Even if you don't have a car, the public transportation system can basically meet your travel needs. Except for a handful of remote rural areas, as long as you are in any town in China, buses, subways, taxis, and ride-sharing are always options. At the very least, you can ride a bicycle to the nearest stop and make do with the last mile or five miles.

Pic|In the US, another role of cars is to quickly pass through such neighborhoods during travel. It is difficult for modern Chinese people to understand the danger of physically passing through backstreets on foot.

However, under the US system of connecting dispersed communities with roads, cars are almost a rigid demand for everyone after entering adulthood and living independently. Even if one cannot afford a new car, at least a used one can be considered. Otherwise, even going to the supermarket for shopping can be difficult.

Such an environment naturally becomes the home field for automakers. As long as each giant circles their own territory and agrees on models and prices, they can work together to earn money from ordinary people peacefully without engaging in fierce price wars. In fact, in the current US automotive market, there are very few brands and related models to choose from in each niche market.

In fact, the reason Japanese cars are so popular in the entire US market today is a result of Toyota, Honda, Nissan, and other Japanese brands rising half a century ago and sweeping across the ocean with a cost-effective approach.

Pic|In the early 1980s, during the US-Japan trade war, American "U-lock enthusiasts" publicly destroyed Japanese cars on the streets.

Since then, traditional American automakers have declined, and the market has gradually been dominated by Japanese companies. The US government forced Japanese automakers to set up factories in the US and used the Plaza Accord to block Japan's rising channel. After severely clipping Japanese automakers' wings at the beginning of this century, the US government basically left them alone. The Japanese brands that once dominated the US market have gradually "integrated" and ultimately formed today's situation.

Looking at the past two decades, among the new generation of automakers rising in the US, only Elon Musk's Tesla, which soared through the new energy window, stands out. But it also relied on China to give it a strong boost at a critical juncture.

"If Trump loses, I might go to jail, or even die without a proper burial," do not forget that not long ago, when Elon Musk decided to fully support Trump and do his utmost to campaign for him, he declared this on his social media homepage to his fans.

Pic|"Going to jail" is not an exaggeration...

If you once thought this guy was just being mysterious, do you still think so after reading the above?

In the past 30 years, the development and progress of China's automotive industry have seemingly followed the experiences of the US and Europe. However, standing at the end of 2024, we see that the fully formed Chinese market is actually highly "Chinese-characteristic."

Here is a set of old data for reference only. In 2017, when Chinese cars were still considered harmless, the US imported a total of 55,000 cars from China, accounting for about 0.32% of annual sales in the US market. Conversely, the US exported 280,000 cars to China that year, accounting for about 1% of total car sales in the Chinese market that year.

It is important to add that commercial vehicles accounted for a significant proportion of the 55,000 Chinese cars exported to the US. The US market truly does not favor Chinese-made cars, even those from joint ventures between American automakers and Chinese partners?

Pic|GIF made from news video clips of the Envision being exported to the US in 2015. Many problems in Chinese society stem from the rapid pace of development, making it difficult for many people to keep up. Additionally, because development has been so fast, even news from less than a decade ago can be dug up and ridiculed as a "bound volume" of jokes.

The answer is yes. Below is a nine-year-old news story. Since I was considering buying a car at the time, I was fortunate to read it carefully and have remembered it to this day...

On December 27, 2015, the Buick Envision manufactured at SAIC-GM Dongyue North Plant officially set sail from the Yantai Port bound for the US, making the Envision the first model exported from China to the US by GM. At the end of the report, the significance of this reverse export was specifically mentioned: "The Envision's entry into the US market, which has the strictest global automotive standards, demonstrates that products manufactured under SAIC-GM's advanced management and manufacturing systems can withstand any rigorous standards."

To be honest, looking back at the media's comments at the time and comparing them to the stereotypes that domestic car owners in China have formed about American cars today, it is truly comical. Returning to our original question... After discussing so much from both macro and micro perspectives, everyone should have their own answer in mind.

Pic|Currently, the top-of-the-line 2.5L hybrid version is priced at less than 240,000 yuan at domestic dealerships...

China is not a puppet state like Japan that the US can manipulate in fact. Even if we ignore major issues like national politics and even the underhand tactics of local market vested interest groups (a common practice is to lobby their political patrons), the current lack of links in the US automotive industry, especially in the new energy sector, is a factual issue of helping others with construction—and it involves both industry and infrastructure.

So, why bother with all that effort? In fact, even with Biden's latest measure to double tariffs on Chinese new energy vehicles, as long as Chinese independent new energy brands enter the US market, they can still pose a serious threat to a group of self-contained Japanese American cars that have been "milking" the US market.

Don't believe it? Look at the price of the top-of-the-line ninth-generation Camry and calculate it based on today's exchange rate. Then, take a look at the price of the Lynk & Co 07.

Pic|This smart hybrid B-class sedan currently has a starting price of 161,000 yuan after discounts, and it would still have an advantage even if the price were doubled.

Therefore, measures like increasing tariffs to 100% are merely political muscle-flexing to boost approval ratings or campaign assistance. Regardless of the tariff rate, no cars will be allowed to enter the US market.

But don't point to the occasional Chinese electric vehicle with local license plates seen in the US as an example. Those old New Yorkers who followed Washington into the country waving the Stars and Stripes flag are not comparable to ordinary "cattle and horses" who live in regular communities and need to drive tens of kilometers to work every day.

After saying so much, the conclusion is simple. Standing at the node of 2024, although China's automotive industry may still be seen by many (including myself) as a semi-grown child—however, no matter from the perspective of scale, its powerful and well-established supply chain, or the autonomous technology it possesses in the new energy and intelligent sector, this "semi-grown child" has grown to be several stories tall from any outsider's perspective...

Pic|During the submission of this article, the counting of votes for the current US presidential election had not yet been completed. However, regardless of who is elected, it will be difficult to change the problems currently facing the country. As for the election, in the words of an American who refused to vote, "What's the point of choosing between chocolate-flavored shit and shit-flavored chocolate?

In the end, it's the same old saying: Today's Chinese automotive industry, like all Chinese industries, has reached a point where it must fight for every step forward—abandon fantasies and prepare for the struggle!