Written by Cláudio Afonso | LinkedIn | X
Bernstein analysts see little risk for Chinese automakers from U.S. President Donald Trump’s latest pledge to impose a 25% tariff on all foreign-made vehicles and most components starting from April 3.
China-made electric vehicles already face steep U.S. tariffs, including a 100% rate raised from 25% by former President Joe Biden last year.
In a new research note, Bernstein analyst Daniel Roeska wrote that the tariffs “have practically no impact on Chinese auto OEMs or EV players,” adding that “none of the OEMs in our coverage have any immediate or medium plans” to enter the U.S. market.
Roeska cited “long-standing geopolitical tensions” between the two countries as the primary reason for Chinese carmakers staying out of the U.S.
“Chinese OEMs’ lack of interest has largely been the status quo since the Trump 1.0 administration, which imposed a 25% tariff on Chinese vehicle imports in 2018,” he wrote.
“The strategic decision to avoid the U.S. market has been reinforced during the Biden administration, particularly with the introduction of the Inflation Reduction Act (IRA), which designates China as a foreign entity of concern,” Roeska added. “This effectively restricts Chinese EV players and their supply chains from accessing the U.S. market. And later on, tariffs have escalated to 100%.”
While some companies have floated alternative entry routes, Bernstein sees little evidence of near-term U.S. ambitions. “Although some OEMs, such as BYD, have expressed interest in building a manufacturing plant in Mexico, our understanding is that the foreseeable plan is aimed at serving the broader LATAM market, rather than acting as a gateway to the U.S.,” the analyst said.
Earlier this month, the Financial Times reported that China delayed approval for BYD to build a plant in Mexico over concerns that its smart car technology could flow across the border into the U.S.
BYD first announced plans for the plant in 2023 saying the Mexican factory would create 10,000 jobs and produce 150,000 vehicles per year.
U.S. automakers including General Motors, Ford Motor Co. and Stellantis are more exposed to the new tariffs. Tesla, which manufactures all of its U.S.-sold vehicles domestically, faces less direct impact. Still, CEO Elon Musk warned the company “would not be spared,” given its reliance on imported parts.
The analyst sees “smaller EV players” like Rivian and Polestar facing “added strain due to import-heavy supply chains and limited pricing power” adding that localization “will become essential.”
For the Geely Holding Group-backed carmaker Volvo, Bernstein says the impact will be close to 30% of the company’s EBIT questioning the viability of the U.S. market for the brand.
Global auto stocks slid Wednesday ahead of Trump’s announcement, which came after U.S. markets closed. On Thursday morning, shares continued to fall: Nio declined 5.5%, XPeng dropped 3.2%, Zeekr fell 4.3%, and Li Auto was down 1.2%.