Feedback from CATL CEO Robin Zeng may point out how Chinese language gamers will navigate a second Trump administration. By Stewart Burnett
After years of mounting tensions between the US and China round electrical autos (EVs), battery big CATL is in search of an inroad. On 13 November 2024, the corporate’s Chief Govt, Robin Zeng, advised Reuters he would think about constructing a US manufacturing unit if president-elect Donald Trump opens the door to native Chinese language funding. “Initially, after we needed to put money into the US, the US authorities mentioned no. For me, I’m actually open-minded.”
Protectionist insurance policies have made it tough for Chinese language EV gamers to ascertain a presence within the US. Trump was the primary mover within the broader commerce conflict, which he initiated throughout his first presidential time period. Nonetheless, the succeeding Biden Administration homed in China’s EV and battery companies—each of which profit closely from state subsidies—to shore up the competitiveness of US home manufacturers and shield American staff.
Chinese language EV makers now face blanket duties of 100% when exporting to the US, a transfer just lately mirrored by Canada. The US’ tariff charges on lithium-ion batteries, for which China boasts provide chain dominance, are comparably far decrease however nonetheless noticed a rise from 7.5% to 25% in 2024. That is an space the place there stays hope for China to construct commerce inroads: many Western automakers, together with Tesla, nonetheless depend upon it for his or her batteries.
Whereas there was motion to onshore EV battery provide chains, partially by way of the grants and subsidies specified by the 2022 Inflation Discount Act (IRA), progress stays at a comparatively early stage. Deliberate battery vegetation, akin to Ford’s in Michigan, have been scaled downwards to replicate lower-than-expected EV demand. As soon as set to price US$3.5bn and boast a manufacturing capability of 35 GWh, it’s going to now price US$2bn with a 20 GWh capability.
Ford additionally plans to licence CATL’s know-how for battery manufacturing. In February 2024, Florida Republican Senator Marco Rubio known as for Congress to research Ford’s plans, writing: “I’m alarmed at Ford’s plan to ascertain a big, Michigan-based manufacturing unit, structured as a wholly-owned subsidiary that licences its know-how from CATL. As such, I write to […] demand that no overseas funds—particularly monies or tax credit granted through the IRA […] go to counterpoint PRC nationwide champion CATL.” On 11 November, The New York Instances reported that the Trump transition group will identify Rubio to function Secretary of State within the incoming administration.
CATL is presently a serious provider to Tesla’s Shanghai manufacturing unit—its largest and most worthwhile—which the automaker additionally makes use of to export EVs to Europe. Tesla additionally has a deal to license CATL know-how for battery manufacturing in Nevada. Zeng advised Reuters that the licencing deal would enable Chief Govt Elon Musk to focus capital on realising autonomous autos and different synthetic intelligence (AI) applied sciences. Musk has been making an attempt to remodel the Tesla model into an “AI firm”. The corporate held its long-awaited robotaxi occasion in October 2024 to combined reactions.
Trump has promised to accentuate the commerce conflict with China. Nonetheless, he has additionally indicated a willingness to permit Chinese language EV gamers to do enterprise inside the US beneath sure situations. The president-elect advised Reuters in August 2024: “We’re going to present incentives, and if China and different international locations wish to come right here and promote the vehicles, they’re going to construct vegetation right here, and so they’re going to rent our staff.” Musk, who was named alongside Vivek Ramaswamy on 12 November to guide the all-new ‘Division of Authorities Effectivity’ (DOGE), might show influential over Trump’s willingness to make concessions to China.
Permitting CATL to ascertain native manufacturing would allow US gamers to do enterprise with the battery big with out sacrificing their clients’ eligibility for subsidies. Through the Biden Administration, tax credit of as much as US$7,500 for the acquisition of a brand new EV have been carried out. The way forward for these tax credit and the incentives specified by the IRA extra broadly at the moment are unsure. Lee Zeldin, just lately named to guide the Environmental Safety Company, has beforehand joined Rubio in voting towards the IRA. The framework of Trump’s personal commerce insurance policies, and CATL’s potential to function inside it, might properly depend upon who can bend his ear most successfully.
