Investors are casting their votes on the future of automotive production – and it’s not looking good for legacy manufacturers, including those in the United States.
Shares of U.S. automakers tumbled on Thursday, after U.S. President Donald Trump announced his plans to put 25-per-cent tariffs on imports of vehicles and certain car parts. U.S. producers have finely honed supply chains across North America that were built over decades, so the added costs and disruption could seriously hamper their production and competitiveness.
Shares of General Motors Co. fell 7.4 per cent on Thursday, with Ford Motor Co. down 3.9 per cent. Canadian auto parts makers were also slammed on the day, with Magna International Inc. dropping 6.9 per cent.
But as the North American industry gets hammered by tariffs, the view is rosier in another location: China.
BYD Co. Ltd., the pre-eminent Chinese manufacturer of electric vehicles, has seen its shares soar by more than 50 per cent this year. The company recently unveiled a new system that can charge its latest models in five minutes – not much longer than it takes to fill a tank with gasoline.
While Canada and the U.S. put steep charges on imports of Chinese EVs, BYD has proven quite popular in more open countries, such as Australia, because of its competitively priced vehicles. The Shenzhen-based company notched roughly US$107-billion in sales last year, surpassing revenue at Tesla Inc. It’s aiming to sell 5.5 million vehicles this year, according to Reuters, with more than 800,000 coming from outside the Chinese market.
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