U.S. News: Tax Law to Boost Chinese EVs, Official Says

“The new U.S. tax-and-spending law favors obsolete gas-powered cars and hands Chinese EV makers a win globally, said the head of a Chinese auto industry group.

 

"Chinese homegrown brands' exports will see significant growth in the next few years, and the U.S. bill should give China greater room to develop in overseas markets," said Cui Dongshu, secretary-general of the China Passenger Car Association.

 

He said the country's companies would offer "intelligent EV models against the obsolete technology of internal-combustion-engine vehicles."

 

The U.S. law will end subsidies for electric vehicles purchased after September.

 

Trump said on social media that thanks to the law, "people are now allowed to buy whatever they want -- Gasoline Powered, Hybrids (which are doing very well), or New Technologies as they come about." He has also said that his policies are rescuing the U.S. auto industry from destruction.

 

According to the Chinese car association, exports from China of new-energy vehicles -- a category that includes pure EVs and plug-in hybrids -- jumped 48% in the first half of this year compared with the same period last year, reaching just shy of one million units.

 

In June alone, exports of these vehicles more than doubled, to 198,000.” [1]

 

These numbers show that Biden’s subsidies to American auto industry did not stop global expansion of China’s auto industry and are just waste of America’s money. The horse left the barn.

 

    China's NEV Export Growth and rapid expansion is reportedly driven by fierce domestic competition among Chinese EV makers like BYD, prompting them to focus on overseas markets.

    Biden's Subsidies and Tariffs: The Biden administration has implemented measures like the Inflation Reduction Act to boost the US EV industry and discourage reliance on Chinese supply chains. While the act's tax credits aim to incentivize domestic EV production, they may not entirely deter Chinese dominance in certain aspects of the EV market, including mineral supply chains and battery manufacturing, at least in the short term. Additionally, the US has imposed 100% tariffs on Chinese EV imports, a significant increase from previous rates.

    Mixed Impact on China: Despite the tariffs and subsidies in other countries, China's NEV exports have continued to grow rapidly. Some analysts suggest that tariffs may act as a temporary setback, potentially prompting Chinese manufacturers to establish production facilities in other countries or seek out new export markets, according to Carbon Brief.

 

However, the growth also reflects the increasing global demand for EVs, with China accounting for the largest share of global EV exports in 2024.

 

    "Horse Left the Barn" Argument: The statement's phrase "the horse left the barn" implies that it might be too late to stop China's EV industry expansion through protectionist measures. Some experts agree, suggesting that while tariffs can create short-term protection, they may not entirely prevent Chinese EVs from entering markets eventually, according to CNBC.

 

In Conclusion

While Biden's subsidies and tariffs aimed to strengthen the US EV industry and address concerns about China's dominance, China's NEV exports continue to grow significantly, driven by strong internal competition and global demand. Trump killed the subsidies, and kept the tariffs.

 

1. U.S. News: Tax Law to Boost Chinese EVs, Official Says. Leong, Clarence.  Wall Street Journal, Eastern edition; New York, N.Y.. 09 July 2025: A2.