The Patriot Post® · RNC: A Bloodbath Is Coming for the U.S. Auto Industry

By the Republican National Committee

BIDEN’S ELECTRIC VEHICLE MANDATE WILL SIDELINE AMERICA’S AUTO INDUSTRY

• Last week, the Biden administration finalized its “strictest-ever rules” for tailpipe emissions, essentially forcing a “de facto electric vehicle mandate” onto America.
  • The rule sets emission standards so strict that electric vehicles (EVs) must account for 56-67 percent of new car sales by 2032.
    • For perspective, less than 8 percent of car sales were EVs in 2023.  
  • Car manufacturers will be forced to sell a greater share of EVs and hybrid cars beginning in model year 2027, and by 2030, 31-44 percent of new light-vehicle sales would need to be electric.
  • This means that no more than 30 percent of new auto sales could be gas-powered vehicles by 2032. 
  • Based on a draft version of this rule, Biden’s emissions regulations will eliminate 117,000 auto manufacturing jobs across the United States.
• This mandate will be a disaster for the American auto industry.
  • Mike Sommers, President and CEO of the American Petroleum Institute: “These are cars that Americans don’t want and can’t afford. The rule that the EPA put out [last week] is bad for American consumers. It’s bad for American jobs, and it’s only good for China.”
  • Jason Isaac, President and CEO of the American Energy Institute: “All it’s going to continue to do is push the costs of electric vehicles on to purchasers of internal combustion engine vehicles.”
  • Nearly 5,000 auto dealerships sent Biden a letter urging him to “hit the brakes” on his EV push, citing concerns including high costs, limited practicality, inadequate public charging networks, and the threat China poses.
• Democrats in California are pushing Biden’s Environmental Protection Agency (EPA) to go even further.
  • In January, Biden’s EPA held a hearing with the California Air Resources Board (CARB) on whether to approve a far-left plan to end the sale of gasoline-only vehicles in California by 2035.
    • The CARB waiver request claims, California’s zero emission rules will cost $210.35 billion through 2040.
  • In February, the Alliance for Automotive Innovation “raised concerns” with the U.S. Environmental Protection Agency on California’s proposal, calling the plans “unworkable.”
  • Currently 17 states have laws in place that tether their vehicle emissions standards to those set in California, meaning that, if approved, California’s electric vehicle mandate would impact tens of millions of Americans nationwide.
• Americans don’t want the government telling them what type of car or truck is best for them.
  • A poll conducted by Pew Research last year found that six-in-ten Americans oppose government mandates to phase out the sale of gas-powered cars.
  • A poll conducted by Ipsos last month found that 75 percent of Americans oppose government regulations that would ban new gasoline, diesel, and hybrid vehicles.

PRESIDENT TRUMP HAS VOWED TO PROTECT AMERICAN AUTOWORKERS

• To counter Chinese economic aggression and protect U.S. autoworkers, President Trump has pledged to slap a 100 percent tariff on Chinese vehicle imports.
• Even Democrats support implementing aggressive tariffs on Chinese EVs.
  • Rep. Haley Stevens (D-MI): “The more aggressive we can be, in my opinion, the better.”
  • Rep. Debbie Dingell (D-MI): “I really, really, really, really, really am going to be intense about ensuring that automobiles made by China aren’t going to get any benefit from trade agreements that we’ve got … So, you know, producing in Mexico and coming in here.”
  • Sen. Gary Peters (D-MI): “Michigan workers can outcompete anyone on a level playing field, but the artificially low price of Chinese EVs could rig the game & jeopardize our national security. We’re urging the Admin to raise tariffs — and protect American manufacturers & consumers.”
  • Sens. Gary Peters (D-MI), Debbie Stabenow (D-MI), and Sherrod Brown (D-OH): “Artificially low-priced Chinese EVs flooding the U.S. would cost thousands of American jobs and endanger the survival of the U.S. automotive industry as a whole. To bolster American manufacturing and protect the domestic EV transition, USTR must move immediately to maintain or increase Section 301 tariffs on Chinese EVs.”
  • Sens. Sherrod Brown (D-OH) and Bob Casey (D-PA): “These tariffs are essential to level the playing field for American workers to compete and counter unfair trade practices by China.”
  • Reps. Mike Gallagher (R-WI), Raja Krishnamoorthi (D-IL), Harley Stevens (D-MI), and John Moolenaar (R-MI): “It is critical that tariffs on PRC automobiles not only be maintained but also increased to stem the expected surge in PRC imports… The trend of shifting production from the United States to the PRC underscores that the current tariff level on imported vehicles from the PRC is insufficient.”
  • Sen. Joe Manchin (D-WV): “If we’re ever going to get this industry up and running and be self-sufficient in North America, then we have to make sure they can’t dump on us. Right now, we’re about ready to put our whole eggs in one basket, thinking EVs are the way to go, and we’re going to be absolutely so taken advantage of, to the point to where we’re going to be held hostage by the foreign supply chain that China has a grip on.”
    • Manchin told Katherine Tai, whose office can impose tariffs: “We depend on you all to crack hard and crack them down as tight as you can.
• While Biden wants the future of the auto industry to be made in China, President Trump will ensure that the future of the auto industry will be made in America.

CHINA IS A GROWING THREAT TO THE U.S. AUTO INDUSTRY

• China has recently surpassed Japan as the leading exporter of automobiles at the same time global exports for American cars are falling.  
• According to recent reports, Chinese electric car manufacturer BYD is planning to open a plant in Mexico, in what many believe to be a long-term play for the U.S. market.
  • BYD has launched a feasibility study and is currently in discussion with local officials over a location for the plant.
  • BYD, and other Chinese automakers, are seeking to manufacture in Mexico to deliberately evade U.S. tariffs by taking advantage of the United States-Mexico-Canada Agreement (USMCA).
    • Under the USMCA, Chinese companies will face a 2.5 percent import tariff even without complying with the USMCA’s requirements on manufacturing part sourcing requirements.
    • If the Chinese companies do comply with battery material and component sourcing requirements, the vehicles will face no tariffs and be eligible for a $7,500 federal tax credit on EVs.
  • With easy access to the rare earth minerals needed for EV batteries, BYD cars are priced significantly lower than the average American EV, making them extremely competitive unless a significant tariff is established.
    • BYD recently started selling its Dolphin Mini EV in Mexico for the equivalent of $21,019, less than half the price of the cheapest Tesla.
    • Sales of Chinese cars in Mexico across all companies have already increased 63 percent in 2023.
• Industry leaders are concerned that the introduction of Chinese EVs into the U.S. marketplace would be a disaster for the U.S. auto industry.
  • During a Tesla earnings call, Elon Musk said, "If there are not trade barriers established, they [BYD] will pretty much demolish most other car companies in the world.”
  • The Alliance for American Manufacturing: “The introduction of cheap Chinese autos – which are so inexpensive because they are backed with the power and funding of the Chinese government – to the American market could end up being an extinction-level event for the U.S. auto sector.”
  • Former U.S. Trade Representative Robert Lighthizer is warning that if China’s efforts to manipulate the auto market succeed, “tens of thousands of American workers will lose their jobs and fall out of the middle class. In addition, America will send untold billions of dollars to an adversary that will use them to strengthen its armed forces and further threaten America.”
• A forced uptick in EV production will make American car manufacturers beholden to China to acquire the necessary rare earth minerals needed for EV batteries.
  • China already controls 85 percent of the processing of critical minerals needed for the manufacturing of electric vehicles worldwide.
  • Currently, China produces 75 percent of all lithium-ion batteries.
  • Andrew Horn, former senior official in the Office of International Affairs at the Department of Energy, warned that China has a “chokehold” on the EV supply chain.
    • Even as America attempts to create its own supply chain, Horn argued China is “going to be watching this closely as they are now, trying to flood the market and do anything else they can with price manipulation, etc., to try and prevent competitors from coming online because it’s obviously against their interests.”
  • The EV battery supply chain in China has been linked to Uyghur forced labor.
• Meanwhile, China has undermined American cars within their own borders with anti-competitive practices.
  • China placed restrictions on where Teslas can be driven within their own country.
  • China has a 25 percent import duty on American cars, while Chinese cars imported from Mexico would face at most a 2.5 percent tariff if no action is taken. 
  • No American car company is allowed to own 50 percent of their own factory in China, while Chinese car companies can own factories in the U.S.
  • China provides its EV car manufacturers with significant subsidies and tax breaks, making the cost of vehicles artificially low compared to EVs produced in America.
    • Chinese manufacturers are also able to price their products lower due to a lack of worker protections.
• Beyond the economic threat, Chinese-manufactured EVs pose a national security threat.
  • Last month, the Commerce Department opened an investigation into the national security risks posed by Chinese-made software in cars.
  • Chinese technology in cars, particularly EVs, can track Americans and send sensitive data to the CCP. 

AMERICANS OVERWHELMINGLY DON’T WANT TO DRIVE ELECTRIC VEHICLES

• Biden’s radical environmental agenda is subsidizing electric vehicle ownership for the wealthy at the expense of middle class and poor Americans.
• The average cost of a new electric vehicle (EV) is more than $52,000, according to Kelly Blue Book.
• Most individuals who claim Biden’s electric vehicle tax credit earn far more income than the national average.
  • 57 percent of EV owners make over $100,000 annually and those making more than $100,000 are more likely to seriously consider buying an EV.
  • Those with a college degree are also more likely to own or seriously consider buying an EV compared to those without a college degree.
• EVs are likely to put a “major strain” on our nation’s aging electric grid that has already suffered from blackouts.
  • In 2022, during a hot spell, California asked EV owners to limit charging during certain hours due to “supply deficiencies.”
  • Accommodating for mandated increases in EVs will cost the U.S. tens of billions of dollars in modifications to the electrical grid. 
    • California alone will have to spend $50 billion in grid updates to meet its EV targets.
• EVs have proven to struggle in freezing temperatures.
• Americans overwhelmingly don’t want to drive EVs.
  • According to Deloitte’s 2024 Global Automotive Consumer Study, two-thirds of Americans prefer their next car purchase to be a gas-powered vehicle.
  • Roughly half of non-Tesla EV households say they won’t buy another EV. 
  • Car manufacturers are cutting or delaying EV production among a drag in demand.
• Ford, GM, Chrysler, Volkswagen, and other car manufacturers have laid off thousands of workers due in large part to falling demand for EVs.
  • In December, GM laid off 1,300 workers in Detroit, most of them at GM’s Orion Assembly Plant, which focuses on EVs.
  • Earlier this year, Rivian announced it was laying off 10 percent of its workforce due to a lack of future demand in its EVs.

TAXPAYERS ARE FORCED TO SUBSIDIZE BIDEN’S RADICAL AGENDA

• Under Biden, Democrats have given billions of dollars in subsidies to auto manufacturers to incentivize investments in EVs.
  • In June 2023, Ford received a $9.2 billion government loan to build electric vehicle battery plants, more than the loan it received during the 2008-09 financial meltdown.
  • In August, ahead of a strike by the United Auto Workers, the Biden administration announced $15.5 billion in subsidies and loans to help car manufacturers redesign their factories to produce EVs.
  • In 2022, Michigan Democrat Governor Gretchen Whitmer announced a $120 million investment in GM’s EV assembly plant.
• Taxpayers are footing the bill for Biden’s $7.5 billion investment in charging station infrastructure, even though less than 1 percent of registered vehicles are EVs. 
  • The Biden administration classified Martha’s Vineyard as “low-income” to make the area eligible for its EV charger tax credit program.

THE TRANSITION TO ELECTRIC IS DRIVING UP THE COST OF GAS-POWERED VEHICLES

• Many car manufacturers are selling their EVs at a loss.
  • According to Boston Consulting Group, U.S. automakers lose roughly $6,000 for every $50,000 EV they sell.
  • In 2023, Ford’s EV division operated at a loss of $4.7 billion, or $64,731 per vehicle sold.
  • In 2023, GM lost $1.7 billion in its EV division, more than it lost from the six-week United Auto Workers’ strike. 
  • Last year, Rivian lost $33,000 for every EV truck it sold.
• As a result, companies must heavily subsidize EVs with profits from gas-powered vehicle sales, increasing the cost of a normal car.          
  • As of January 2024, the average cost of a new car is $47,401.
  • Ironically, the need for profits from sales of gas-powered vehicles to pay for the transition to EVs minimizes the environmental benefit of EVs.
• Some experts argue the price of gas-powered cars will also increase as manufacturers must develop more advanced technology to keep up with the EPA’s strict standards.

Originally posted here.