Intense Chinese Competition Drives American Automakers to Offer Budget-Friendly EVs

Dec 15, 2023 12:30 AM EST

MANY CARS OF MODERN MANUFACTURER IN DAYTIME — (Photo : PEXELS/Tom Fisk)

As electric vehicles continue to evolved, so as the market competition. Chinese electric cars manufacturers' presence in the global market pushes traditional car makers to prioritize cost-efficient EVs. The rise in popularity of China made EVs posted a great challenge for giants and car manufacturers - offer budget friendly EVs.

American Automakers Adapt: Take On the Challenge

Due to tough competition from Chinese automakers, American automakers have had to look for new ways to make profit. The result is to come up with affordable electric vehicles (EVs). Moreover, car companies are starting to understand that they need to make electric cars affordable for people to buy if they want to stay competitive in a market that China is getting more into.

To stay strong in the fast-paced world of cars, this change is needed. One hard thing about making electric cars more affordable is getting batteries for a lesser price. The most expensive part of making electric cars is the batteries.

Various efforts are always looking for ways to make batteries more efficient while also lowering the costs of making them. According to the Wealth of Geeks website, these coordinated efforts show that American automakers are determined to provide affordable electric vehicles (EVs).

They also aim to produce EVs that compete with their gas-powered peers in terms of price. Established and well-known companies like Renault and Stellantis are working to make their electric vehicles budget-friendly.

Chinese automakers have flooded the market with affordable electric vehicles. Such presence is making the US automakers experience more challenges. Thus, making things even harder for the big players.

American automakers have had to act because of the fierce competition, according to Interesting Engineering. They have had to find new ways to stay successful in a dynamic industry. Since the competition is so tight, these big automakers are also using their networks of suppliers more and more.

They aim to cut costs and speed up the development of electric vehicles. Thus, producing more affordable EVs.

Companies that make chips and components for batteries are part of these networks. Reuters says that the fact that these people are working together shows that they really want to speed up the process of making EVs simple to get and something that won't break the bank.

But it's possible that they won't be able to hit their targets.

Entering: Chinese Car Manufacturers in the U.S.

Chinese car manufacturers are gearing up to enter the American market. Companies like BYD and Nio have made commitments to start delivering vehicles to customers in the United States in the coming years. As shared on Newsweek 90, the arrival of these automakers in North America has faced delays due to the COVID-19 pandemic and market conditions, with some companies postponing their plans until the latter part of this decade.

It's evident that the market is challenging, even for well-established brands with decades of presence in the country. Volkswagen, Alfa Romeo, Fiat, Mitsubishi, and Mazda are still having a hard time getting an extensive portion of the market.

As a result of the influx of new brands and increased competition, American automakers, including foreign ones that produce vehicles locally, will be compelled to make adjustments. Furthermore, all parties will need to adhere to the regulations and incentives outlined in the Inflation Reduction Act.