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**AUGUST 18, 2021**

Kuttner on TAP

How China Is Grabbing Our Electric-Car Market

****

China has begun selling cheap electric cars in the U.S. These are deeply
subsidized, when you count all the government subsidies to China's
auto industry, the oppressed labor, and China's protectionism.

These cars include the Polestar, made by China's Geely Auto Group, and
the K27 made by China's Kandi-with a sticker price of $17,499.
That's less than half the cost of the cheapest U.S.-made electric
vehicle.

And thanks to the $7,500 federal tax credit, you could drive one of
these babies for just under $10,000, or about a third of the net cost of
the cheapest U.S.-made car. If you live in a state with EV subsidies, it
would be even cheaper.

And it gets worse. The federal tax credit is capped at 200,000 units per
carmaker. So you get no tax credit if you buy a Tesla or a Chevy Volt.

The EV tax credit is industrial policy and energy policy. The Biden
administration hopes to convert the U.S. to all-electric cars, and to
restructure the U.S. auto industry accordingly. But at this rate, the
prime beneficiary will be China.

Despite the infrastructure bill, the larger $3.5 trillion
public-investment bill, and the bipartisan China legislation that passed
the Senate, there is nothing pending in Congress or the administration

that addresses this problem.

We can't duck this issue: Industrial policy is China policy. We need
to bite this bullet and limit the credit to cars made in the USA-and
address all the other ways that China's mercantilism challenges the
future of U.S. industry and technology, as well as our national
security.

Is this a trade war? Gentle reader, we've been in one for decades, and
we are losing it.

Thanks to Mike Stumo
of the Coalition
for a Prosperous America for flagging this.

~ ROBERT KUTTNER

Follow Robert Kuttner on Twitter

Robert Kuttner's latest book is
The Stakes: 2020 and the Survival of American Democracy
.

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