If I had a dollar for every time I heard about an impending onslaught of Chinese-built cars, I’d probably have enough money to buy a brand new Chinese-built car. Sure, various Chinese brands have held U.S. aspirations for roughly 15 years now, but Chinese EV dominance is now powerful enough that American legislators feel threatened. One potential solution? Higher tariffs.
At the same time, a federal judge has ruled it perfectly legal for automakers to read drivers’ text messages, auto parts giant Continental is reportedly shedding jobs, and the Volkswagen ID.7 comes up a little short on range. All this in today’s issue of The Morning Dump.
Representatives Want Steeper Tariffs On Chinese Cars
It seems every week there’s some alarmist rhetoric about how Chinese cars are coming, but the fact of the matter is they’re already here. In fact, they’ve been coming for years, sold to Americans through foreign brands such as Polestar and, um, Buick. Huh. Is there nothing corporate America won’t offshore? Anyway, the trickle has been noticed, and officials are allegedly rushing to weld the floodgates shut. A Reuters report claims that a group of lawmakers wants to make it harder to sell Chinese cars in America by raising tariffs. Whatever your feelings are on Chinese-made vehicles, this reported proposal is certainly bipartisan, with an even split of supporters across party lines.
Representative Mike Gallagher, a Republican who chairs a select committee on China, and the panel’s top Democrat, Raja Krishnamoorthi and Michigan Representatives Haley Stevens and John Moolenaar urged U.S. Trade Representative Katherine Tai in a letter to boost the current 25% tariff on Chinese vehicles.
“It is critical that tariffs on (Chinese) automobiles not only be maintained but also increased to stem the expected surge in (Chinese) imports,” they wrote in the previously unreported letter seen by Reuters.
If tariffs against Chinese cars come to pass, some manufacturers will be in better positions than others. Volvo should be able to simply export the EX30 from Ghent rather than China, but the situations around the incoming Lincoln Nautilus and current Buick Envision would be stickier. At the moment, there are no factories outside of China that produce either of those vehicles, and the entry level of the luxury car marketplace is certainly price-sensitive. Oh, and it seems that these representatives are reportedly looking for a one-two hit.
The letter also said the United States “must also be prepared to address the coming wave of (Chinese) vehicles that will be exported from our other trading partners, such as Mexico, as (Chinese) automakers look to strategically establish operations outside of (China) to take advantage of preferential access to the U.S. market through our free trade agreements.”
Yeah, I’m fairly sure that’s how free trade works. Just take a look at Toyota, Ford, BMW, or any other automaker with an established North American presence and at least one factory in Mexico. Needless to say, this will be a difficult one to stamp out without seriously pissing off the neighbors, so we’ll see how carefully people tread here.
Apparently It’s Perfectly Fine For Automakers To Save Your Texts
Is your car spying on you? If it’s new enough, the answer to that is a resounding “maybe.” From location information to call logs, newer cars save a ton of information, and automakers are cashing in; it’s all apparently legal, to the point where The Record reports that a lawsuit over automakers harvesting driver’s text messages has been tossed out.
The Seattle-based appellate judge ruled that the practice does not meet the threshold for an illegal privacy violation under state law, handing a big win to automakers Honda, Toyota, Volkswagen and General Motors, which are defendants in five related class action suits focused on the issue. One of those cases, against Ford, had been dismissed on appeal previously.
The plaintiffs in the four live cases had appealed a prior judge’s dismissal. But the appellate judge ruled Tuesday that the interception and recording of mobile phone activity did not meet the Washington Privacy Act’s standard that a plaintiff must prove that “his or her business, his or her person, or his or her reputation” has been threatened.
In an example of the issues at stake, plaintiffs in one of the five cases filed suit against Honda in 2021, arguing that beginning in at least 2014 infotainment systems in the company’s vehicles began downloading and storing a copy of all text messages on smartphones when they were connected to the system.
Unsurprisingly, just like every other electronic device, cars with infotainment systems come with end user license agreements, and if you delve into these arduous documents far enough, you might find that automakers are harvesting your data. It’s not particularly surprising, considering how insights drawn from user data can be useful to advertisers, but it is disappointing.
Tough times continue for the world’s auto parts suppliers. BNN Bloomberg reports that auto parts giant Continental is shedding potentially thousands of jobs in an attempt to navigate choppy waters.
The reductions are part of a plan to trim annual costs by €400 million ($428 million), the maker of auto-parts and tires said Monday. While the exact number of job cuts isn’t yet decided, it’s expected to be in the “mid four-digit range,” according to the statement.
ManagerMagazin reported earlier that the company plans to eliminate 5,500 jobs — 1,000 of them in Germany. Continental said it will dissolve its smart-mobility unit and plans to give a more comprehensive update at its capital markets day next month.
Hold on, dissolving a smart mobility division? That’s a bold move, although not entirely without precedent. Remember when Ford-backed Argo AI shut down? Anyway, vehicle-to-vehicle and vehicle-to-x communication hasn’t quite taken off, many consumers seem content with Level 2 advanced driver assistance systems, and building autonomy is, well, difficult.
The Volkswagen ID.7 Falls A Bit Short Of Promises But Still Offers Good Range
Could the electric era mark the rebirth of the sedan? Volkswagen certainly seems to think so, and now we’re seeing some new, more detailed specifications of its ID.7 electric sedan. Unfortunately, not all of them are quite what Volkswagen claimed when the car was unveiled.
Slung beneath the floor sits an 82 kWh battery pack good for 386 miles on the optimistic WLTP cycle. That’s noticeably short of the 435 miles of range Volkswagen claimed at launch, and despite being great and extremely usable, it’s a bit of a letdown, especially when you consider the car’s relative performance. Sure, this thing may put out 402 lb.-ft. of torque, but with a claimed zero-to-62 mph time of 6.5 seconds, it certainly isn’t the quickest EV in the shed. Hell, it might get waxed off the line by a 20-year-old V6 Altima.
[Ed Note: The Tesla Model S offers 394 miles on the WLTP cycle, and it probably has an additional 10kWh of battery capacity at least, so I actually think the ID.7’s range is fantastic, even if it doesn’t meet the goal. -DT].
However, speed isn’t the point, as the ID.7 seems to be about spacious, comfortable travel. With 18.8 cu.-ft. of trunk space, 40.4 inches of front headroom with a panoramic roof, an optional 16-channel amplified sound system, and up to 10 air cushions in the seats, think of this thing as a plush family cruiser, not an autobahn-grade sports sedan. Expect an EPA range figure and U.S. pricing to be released closer to this thing’s on-sale date in late 2024.
The Big Question
Alright, let’s assume that Chinese automakers do finally make it to America, even with raised tariffs. Would you buy a Chinese car? On the one hand, pricing may be extremely attractive, especially as American automakers have focused on high-priced models. On the other, building out a new distribution network is tough, especially when it comes to parts support. As ever, I’m curious to hear your thoughts.
(Photo credits: Lincoln, Thomas Hundal, Continental AG, Volkswagen)