Forget tariffs, this government official has a unique idea to beat the Chinese at the EV gamec

With cheap Chinese EVs set to dominate, this government official seeks a different plan than tariffs.

Jun 4, 2024 - 02:30

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Forget tariffs, this government official has a unique idea to beat the Chinese at the EV gamec

Despite all the talk about the economic and national security threat of Chinese-made electric vehicles, not many creative or radical solutions have been proposed besides President Biden's controversial 100% tariffs imposed on EV imports, and other Chinese-made goods that would supercharge sustainable energy.

However, there is one person within the government with other ideas on how to beat the Chinese at their own game, and is thinking of implementing a very creative way to do so.

A BYD Co. Dolphin compact electric vehicle displayed during a media event in Shenzhen, China, on Thursday, Jan. 18, 2024.
Bloomberg/Getty Images

Halle Cheeseman, the program manager in charge of next generation battery programs at the Advanced Research Projects Agency-Energy (ARPA-E) — the U.S. Department of Energy's technology incubator — proposed a very creative way for the U.S domestic auto industry to not only keep up, but get an edge over their competitors, The Information reported.

During an appearance at a ARPA-E conference in Dallas, Cheeseman proposed that a possible solution is to spark innovation by a government-backed competition to develop a high quality, American-made electric vehicle that can be produced for about $12,000, and be sold for $16,000 at the dealerships.

Cheeseman's proposal is in response to the overwhelming success of BYD's (BYDDY) Seagull, a compact electric hatchback that is sold for the equivalent of less than $10,000 in China, an achievement that has left some industry voices worried.

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“We are being beaten, and we're being beaten badly,” Cheeseman told The Information. “We need to do something differently.”

To help get make the ultra-cheap EV project become reality, Cheeseman said that American companies could accelerate the use of robotics, as well as 3D parts building inside of U.S. factories.

In theory, by increasing the role of robots in production settings, factories could produce components and finished cars with more precision and consistency while reducing the cost of labor. Additionally, 3D printing technology can be used to create complex parts even faster. With this combination of technology, factories can run more efficiently, and produce cars with less cost passed onto the customer.

However, this will take time. Cheeseman anticipates that such a program will take a year for ARPA-E senior management to choose a 'winning' program for the DoE-backed incubator's backing. Such program will take up to three years and $30 million, for which one firm will be given an opportunity to scale up.

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Cheaper, more 'affordable' EVs are in the pipeline for many of the world's automakers, including some big names like Ford, Volvo and South Korean value-brand Kia.

Additionally, Stellantis CEO Carlos Tavares revealed very recently that a new, $25,000 Jeep-branded EV will be hitting stateside shores "very soon," aiming to mirror the success of a Citroën-branded EV in Europe.

“In the same way we brought the €20,000 Citroen e-C3, you will have a $25,000 Jeep very soon,” Tavares said during a May 29 fireside chat at the Bernstein 40th Annual Strategic Decisions Conference. “We are using the same expertise because we are a global company and this is totally fluid across the engineering world of Stellantis.”

BYD Co. electric vehicles at the Port of Suape in Ipojuca, Pernambuco state, Brazil, on May 31, 2024.
Bloomberg/Getty Images

Cheeseman's out-of-the-box ideas echo some recent statements made by Ferrari CEO Benedetto Vigna on an interview with Bloomberg TV, where he called the 'war' with Chinese automakers as more of a 'competition,' where European automakers should be inspired to make much better cars than their Chinese competitors and not lean on the government for retaliatory tariff support.

"For me, this is a call to action for Europe. This is a call to action to become more [...] pushy, less complacent."

"In my life, I was told if someone is faster than you, better that you are faster than them," Vigna said. "This is what we are doing in Formula 1. In racing, that's what you have to do; if someone is faster, be faster than them, don't try to stop them."