US Secretary of Energy Jennifer Granholm speaks to reporters during a news conference at the White House in Washington on June 22, 2022.
Kevin Lamarque | Reuters
Energy Secretary Jennifer Granholm warned Wednesday that China could flood the U.S. electric vehicle market with low-cost offers, weeks after President Joe Biden raised similar concerns.
“We are very concerned about China consolidating our manufacturing in the United States even as we now build this incredible manufacturing backbone,” Granholm said during a panel discussion at an Axios event.
China is seen as a threat to the US auto industry as US car exports decline and companies such as General Motors reduce their international operations.
“We've seen this happen in the solar industry… there's been a flood in the market,” Granholm said.
Data from the China Association of Automobile Manufacturers showed that China exported nearly 5 million cars in 2023, overtaking Japan to become the first country in the world for car exports in 2023.
Chinese electric car makers have also launched new models in record times, and the outlook for Chinese automakers remains stable despite intense competition, Fitch Ratings said in December.
“China is investing huge amounts of money for promotion, so we need to understand that it is important for people to buy electric vehicles in an affordable way, but we can do it and we can keep our country safe,” Granholm said.
The White House said last month that the United States was investigating whether Chinese auto imports pose national security risks, as they could collect sensitive data about American citizens and infrastructure and send it to China.
US President Joe Biden said in a statement, “China's policies could flood our market with its vehicles, posing risks to our national security.” “I will not allow that to happen on my watch.”
The United States is trying to boost domestic electric vehicle supply chains through the Inflation Reduction Act, which provides tax breaks for vehicles that undergo final assembly in North America and meet critical requirements for metal components and batteries, among other conditions.
Electric vehicles whose battery components are manufactured or assembled by a “foreign entity of concern” namely China, Iran, North Korea and Russia are not eligible for the tax incentives.
“We also know that if they're made in America, and with incentives through the FRA, we can bring those price points down, and we've seen electric vehicle uptake double in the last year and more of that is expected,” Granholm said.
The United States has intensified pressure on Chinese companies in recent years.
In October 2022, it introduced rules aimed at restricting China's ability to access, acquire or manufacture advanced semiconductor chips amid concerns that China may use them for military purposes.
Last year, the United States announced new regulations preventing American chip designer Nvidia from selling advanced AI chips to China.
The US Senate voted on Wednesday to approve a bill that could restrict dealings with Chinese biotech companies such as WuXi AppTec and BGI due to national security concerns.
