Workers on an electric vehicle assembly line inside a BYD factory. This automaker is one of several major Chinese car companies planning to enter the US market. The arrival of Chinese cars in American dealership showrooms could happen sooner than many anticipate, which would be positive news for US consumers. Although Chinese automakers lead the world in both production volume and exports, high tariffs and tense US-China trade relations have historically barred them from the US market. Experts suggest this dynamic may shift, with Chinese vehicles likely to appear in US showrooms within the next 5 to 10 years. "The ambition to enter the US market is undeniable," said Xing Lei, an independent auto analyst and former editor-in-chief of China Auto Review. He noted this holds true even if manufacturers need to establish plants within the US instead of exporting finished vehicles from China. He stated that several Chinese automakers have already demonstrated a "willingness to enter the US market and build factories there." This development would benefit American car buyers. Increased competition promises more choices, particularly in the electric vehicle sector, which could subsequently help lower car prices. However, it would also pressure the profits and market share of automakers already selling in the US, potentially impacting nearly a million related jobs. Cars exported from China to the US face a 100% tariff, the highest rate currently applied to any imported goods. Despite generally critical views on many Chinese products, former President Donald Trump recently expressed openness to Chinese brands establishing factories in America. "If they want to come build a plant, and hire you, and your friends, and your neighbors, that’s great. I’m all for it," he said during a speech last month at the Detroit Economic Club. "Let the Chinese companies come in." When asked if the administration would permit Chinese automakers to enter the US market, a White House official told CNN last week: "The administration welcomes all investment in the United States that does not pose a risk to our national security or economic security."

Chinese Automakers Lead Globally Entering the US market could further solidify the dominant position of Chinese automakers. Data from the China Association of Automobile Manufacturers shows that last year, China accounted for one-third of global car production, with over 8 million vehicles exported worldwide—a 30% increase from the previous year. In 2023, China surpassed Japan to become the world's largest automobile exporter. China is particularly competitive in the electric vehicle sector. Last year, BYD overtook Tesla to become the world's largest EV manufacturer; this week, its global sales also surpassed those of Ford. Establishing US factories may take years, but mainstream experts agree that most major Chinese automakers are already closely monitoring the American market. Workers assemble a frame for the electric vehicle maker ZEEKR. The brand's plans to enter the US market have been hindered by tariff barriers. ZEEKR is owned by Geely Holding Group, which holds stakes in overseas brands like Volvo. "It's no secret that every global automaker views the US market as the ultimate battleground," said Michael Dunne, an automotive industry consultant who has been involved with Western automakers' expansion in China since the 1990s. He added that this is because American consumers are wealthier and tend to buy larger, more expensive models, meaning profit margins here are higher than in any other market. Dunne noted that the average price of cars exported from China last year was approximately $19,000, while the average price of a new car in the US market is about $50,000. BYD and other major Chinese automakers did not respond to CNN's inquiries regarding their plans for the US market. However, this does not mean they haven't begun testing the waters. Volvo, owned by China's Geely Holding, established a factory in South Carolina, USA, back in 2015. That plant is currently undergoing a $1.3 billion expansion and could serve as a bridgehead for Geely to produce ZEEKR and Lynk & Co brand vehicles in the US. Ash Sutcliffe, Geely's global head of communications, hinted at this possibility last month in an interview with Autoline. Geely has already sold a small number of ZEEKR vehicles to Waymo, the autonomous driving unit of Google's parent company, Alphabet. Xing Lei believes Geely is the Chinese automaker best positioned to enter the US market. "I believe we will see relevant official announcements within the next 24 to 36 months."

Downward Pressure on Car Prices With US car prices at historic highs, the entry of Chinese automakers would introduce more choices and production capacity. Experts say this will inevitably exert downward pressure on prices, similar to the effect seen in the European market after Chinese automakers entered. An aerial view of new cars awaiting shipment to overseas markets at the port of Lianyungang in eastern China. But Bill Russo, founder and CEO of Shanghai-based investment advisory firm Automobility, stated that the popularity of Chinese brands in Europe and their home market stems not just from price but from vehicle quality and value for money. "The market share of foreign brands in China shrank by more than half in less than five years, not because Chinese consumers were told to buy domestic products," Russo said. "It's because Chinese automakers are building better cars, offering more advanced technology at affordable prices." A fierce price war among over 100 brands within China is also driving the global expansion of these automakers. Decades of government support and massive investment in China have led to significant overcapacity in the auto industry. Weak consumer spending this year has further increased the urgency for automakers to expand overseas. However, Russo cautioned that the US market may not be easier to penetrate. Chinese automakers might struggle to overcome American consumers' trust barriers regarding unfamiliar brands. But he believes concerns about Chinese cars being "cheap" in quality rather than just "low-priced" will likely be quickly dispelled. "If the car is good, do Americans really care who makes it? I don't think they do," he said. "They shop at Walmart and buy Chinese goods all the time. Ultimately, the market prioritizes value for money. The impact of protectionist sentiment is ultimately limited."