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A new survey by automotive insights firm Autopacific finds that Chinese offerings are largely attractive to young US buyers despite significant concerns about data privacy with software defined-vehicles from Chinese OEMs.
The findings offer an answer to a fundamental question beneath the recently introduced 100pc US tariffs on Chinese EVs, i.e. how attractive Chinese products would be to US consumers in a level playing field competition environment, considering their price advantages and in many cases, heightened software capabilities.
This in turn suggests that Biden's tariff measures may have been a necessary measure to prevent Chinese EVs taking the lion's share of the US EV market.
"A main reason many Americans are hesitant towards EVs is purchase price, and Chinese-brand EVs could potentially offer appealing EV products that could generate excitement for EVs at much more affordable price points," Autopacific says.
Autopacific's survey finds that 44pc of all respondents said they would be very concerned about their privacy if Chinese vehicles were sold in the US, and another 34pc would be "somewhat concerned". Among respondents under the age of 40, 73pc saying they would be concerned about their privacy, suggesting there is little generation gap in these worries.
However, Autopacific also finds that these privacy worries do not deter consumers from considering purchasing Chinese vehicles.
“Privacy concerns about Chinese-brand vehicles are likely to eventually subside given that most of the connected smartphones, smart watches, laptops, connected home devices we are comfortable using every day are in fact manufactured in China,” says Autopacific president and chief analyst Ed Kim.
With the introduction of 100pc tariffs on Chinese-built EVs, as well as smaller levies on batteries and components, the logical workaround for Chinese OEMs wishing to sell in the US is to pursue onshore US assembly and manufacturing, presumably through partnering with a North American automaker.
Chinese EV giant BYD has launched several BEVs and HEVs in Mexico, and is also scoping out locations for a factory in the country. It has explicitly said it would not try to use any such facility as a springboard for US entry but, if it changed its mind, this could circumvent certain rules of origin under the Inflation Reduction Act.
It is possible, of course, that Chinese efforts to adopt an 'in North America' would still fall foul of US legislation in the future, such as rules on foreign entities of concern.
And Autopacific finds that a US-based approach could have some success in attracting consumers' attention. The survey finds that 16pc of all respondents, and 39pc of those under 40, said that knowing a Chinese-brand vehicle was built in the US would increase their purchase consideration.
Much is still unclear about the consequences of the recent tariffs, and many Chinese OEMs had little interest in US expansions even prior to their introduction. But despite the punishing tariffs on Chinese EVs, Autopacific says it is likely "only a matter of time" before they arrive on US shores, citing the case of Japanese automakers circumventing similar tariffs introduced in the 1980s.
“Younger generations of shoppers are clearly aware of the enticing products Chinese automakers are cooking up overseas,” says Robby DeGraff, Autopacific manager of product and consumer insights.
“It is only a matter of 'when' they will be able to get their hands on them,” he adds.
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