Chinese EVs may hit U.S. within a few years, one way or another

Chinese electric vehicles face crippling tariffs, stringent regulations and fierce opposition from lawmakers and the American auto industry, but there’s a growing possibility that Chinese EVs will be sold in the U.S. within the next few years.

China has deliberately and aggressively expanded its EV footprint throughout Europe, the U.K., Asia and Australia, exporting millions of well designed, high-tech, and competitively priced vehicles, building factories and widening supply chains. Now, it’s set its sights on Western nations, especially the U.S. — the world’s second-largest automotive market after its own — which has significantly retreated from its own EV ambitions. 

Therein lies an existential conundrum facing the Big Three — General Motors, Ford and Stellantis. While they continue to offer a limited number of EVs, they’re primarily focused on producing and selling internal combustion engine vehicles, while many auto experts concur that EVs are the future of the global auto industry and that China is poised to control the market. 

“U.S. companies have stepped back from a lot of their electric vehicle campaigns, because they haven’t been able to develop, in an inexpensive way, a compelling value proposition for U.S. consumers,” said Stephen Dyer, a managing director in the automotive and industrial practice at AlixPartners. But if EVs are the future, he said, “You can’t be competitive if you’re not in the game.” 

Nor can the Big Three rest on their laurels. “Detroit automakers perfected the business of manufacturing traditional vehicles powered by gasoline engines,” said Michael Dunne, CEO of Dunne Insights, a consultancy that focuses on EVs and autonomous vehicles. But when they were confronted with the dramatic shift to electrification and autonomy, “they’ve struggled to make the transition.” 

In the meantime, Dunne said, “China has a master plan to dominate the global EV market, including cars, trucks and the batteries that power them.” At the turn of the century, China produced fewer than a million cars a year, he said, but by 2010 had surpassed the U.S. in terms of market size and production.  

While the opportunity to beat the Chinese juggernaut may be slipping away, in the long run the most viable way to remain relevant and competitive may be to join them. 

Because direct imports of Chinese-made EVs into the U.S. seems highly unlikely, allowing them to be manufactured here is becoming a realistic option. In January, President Donald Trump expressed support for letting China set up shop in the U.S. as long as they employed American workers. The remark led to wide speculation that the issue would be raised at the recent Beijing summit with Xi Jinping, yet there are no reports that it came up. Among the entourage of CEOs that accompanied Trump, the only auto executive was Tesla‘s Elon Musk, whose company has a presence in China, though it is far behind domestic leader BYD.

China remains the world’s largest hub for manufacturing and trade of electric cars, capturing nearly 75% and 40% of the respective global totals. Primarily led by domestic carmakers, China’s 2025 production of 16 million electric cars outstripped domestic demand by 20%, according to the International Energy Agency, pushing Chinese electric car exports to double to a record high of more than 2.5 million – the primary driver of its growth in car exports. In 2025, electric models represented more than 35% of all Chinese car exports, up from about 20% the year before.

“The only market in the world they have not yet penetrated is the United States,” Dunne said.

Regardless, existing regulatory restrictions on Chinese-developed software and hardware in American-built EVs’ connected or autonomous systems would have to be overcome. Plus, a Senate bill to permanently ban Chinese automakers from the U.S. has been introduced by Senators Bernie Moreno (R-Ohio) and Elissa Slotkin (D-Mich.).

A more likely avenue is through collaborations between U.S. and Chinese car companies. “I think the end game for a lot of the Chinese automakers is to have their independent, wholly owned assembly operations and businesses in the U.S. eventually, but they’d be willing to take that intermediate step,” Dyer said.

“Legacy automakers understand the threat and a lot of them now have partnerships,” said Adam Bernard, founder of the consulting firm AutoPerspectives and a former associate director of competitor intelligence at General Motors, citing deals that  Ford, GM and Stellantis have with Chinese automakers. 

Ford — whose CEO Jim Farley has admitted that he enjoys driving a Xiaomi SU7 sedan — is reportedly in talks with China’s Zhejiang Geely Holding Group to create a European partnership and, according to The Wall Street Journal, “also appears to be opening the door to allowing Chinese cars in the U.S. at some point.”

Meanwhile, Ford is pushing ahead with the development of its Universal Electric Vehicle, or UEV, platform, which will debut with a $30,000 midsize electric pickup truck, set to launch next year. The automaker’s all-electric F-150 Lightning, introduced in 2021, failed to meet expectations and is being redesigned as a hybrid.  

GM imports EV battery cells made by China’s CATL for use in its Chevy Bolt EV, which is manufactured at GM’s Fairfax assembly plant in Kansas City, Kansas. The company also operates a facility in Coahuila, Mexico, where it builds several of its branded EVs, including the Equinox, Blazer and Cadillac Optiq. Those vehicles, however, are not subject to tariffs, due to the the United States-Mexico-Canada Agreement, which allows for duty-free trade of vehicles assembled in North America. GM and its long-standing joint venture in China, SAIC-GM-Wuling, are in advanced negotiations to begin manufacturing ICE vehicles in Mexico.

GM and Ford did not respond to requests for comment.  

Bernard also pointed out that China’s Zhejiang Geely Holding Group acquired Volvo from Ford in 2010 and later launched the EV brand Polestar. Both are produced at the Volvo factory near Charleston, South Carolina, which Geely is eying to expand to produce more EVs. “I don’t think it would be a big problem for them to adapt that plant to some other Geely platforms,” Bernard said.

A prime candidate would be Zeekr, another Chinese brand Geely controls and that Alphabet-owned Waymo uses for its robotaxi fleet in San Francisco.  

Volvo recently received approval from the U.S. ​government to continue selling vehicles that use Chinese-developed and maintained software, after the rule put in place by the Biden administration took effect in March ​2026 and covered companies with significant Chinese ownership.

The importing of Chinese EV brands to North American is already happening in Mexico and Canada.

In Mexico, Chinese vehicles account for a quarter of total sales, yet that number may drop after Mexico imposed a 50% tariff earlier this year. Conversely, Canadian Prime Minister Mark Carney signed a deal in January permitting up to 49,000 Chinese-built EVs into the country annually at a 6.1% tariff rate. 

Stellantis — which owns Dodge, Chrysler, Jeep and Ram, plus numerous European brands — is the largest shareholder of Zhejiang Leapmotor Technology Co., with a 21% stake, and a 51% majority owner of a joint venture with the Chinese automaker. During a recent news conference, Stellantis CEO Antonio Filosa said the company “for sure” sees opportunity in expanding its production and sale of vehicles with Leapmotor in Mexico and potentially Canada. “I believe that there is space in Mexico. … There is maybe space in Canada. We’ll see,” he said.  

Stellantis declined to elaborate on its partnership with Leapmotor. 

Beyond the Stellantis-Leapmotor collaboration, other automakers are pursuing plans to build facilities in North American countries. Under U.S. pressure, Mexico backed away from a plan to let BYD build a factory on its soil, but BYD and Geely are reportedly among finalists vying to purchase a Nissan–Mercedes-Benz plant in Mexico. In April, Guangzhou Automobile Group Co. announced plans to begin assembling vehicles there in the second half of this year. 

BYD’s executive vice president Stella Li said in March that the company is considering building a wholly owned factory in Canada and possibly acquiring a struggling legacy automaker. “We’re open to every opportunity we have,” Li said, without offering any specifics. 

Trump’s trade war and new deal with Canada, Mexico loom large

Whether those developments end up opening a backdoor opportunity for importing Chinese EVs into the U.S. remains to be seen, considering several existing obstacles more concrete than the dozens of lawmakers from both sides of the aisle and auto-industry groups who have petitioned Trump to prevent imports of Chinese vehicles assembled in Mexico or Canada. For example, the tariff on vehicles made in both countries is 25%, substantially lower than the cumulative 125% rate for Chinese EVs, but still a cost contributor. 

Under the existing North American trade agreement, USMCA, a vehicle assembled in Mexico or Canada can enter the U.S. with preferential tariff treatment only if 75% of its contents — such as batteries, motors, electronics and software — are sourced in North America.

That math, however, may have just become more complicated. This week, the Trump administration proposed a new 10% tariff on Mexico, Canada and other countries over their alleged failure to address forced labor concerns. This comes on the heels of the Supreme Court decision in February, ruling that Trump’s “Liberation Day” tariffs were illegal. Furthermore, U.S. Trade Representative Jamieson Greer told CNBC this week that for any renewal of USMCA to take place — and he guaranteed there will be no “rubber stamp” renewal on July 1 — U.S. auto content requirements are a major sticking point.

The Trump administration will agree to no new deal that does not include a new requirement for a specific percentage of content in cars that must be made in the U.S. While Greer said recent reporting by the Wall Street Journal that the administration is looking for a U.S. content requirement as high as 50% was inaccurate, he said it is true that the administration is focused on this issue and will be pressing it in talks. And if the U.S. doesn’t get what it is looking for in the USMCA talks, “It will put us on a path to exit it eventually, if we aren’t able to get into a better position,” he told CNBC’s Megan Casella at the CNBC CEO Council Summit in Washington, D.C. on Tuesday. 

Nonetheless, Chinese EVs from BYD, Geely, Great Wall and Xpeng are showing up along the U.S.-Mexico border. They’ve been purchased at dealerships in Mexico — some models for under $20,000 — by Mexican citizens who, in compliance with U.S. rules, can commute back and forth to El Paso, San Diego and other border cities. U.S. regulations, however, make it nearly impossible for such vehicles to be registered in the U.S. 

Even though it’s tough for American drivers to buy a Chinese EV, no matter where it’s built, many claim to be EV-curious, more so with today’s sky-high gas prices caused by the war in Iran. According to a recent Kelley Blue Book study, 38% of Americans say they would consider buying a Chinese vehicle if they had the choice. “The only thing stopping [them] are the restrictions of selling into the U.S.,” said Dan Ives, an analyst at Wedbush Securities. 

China struggled for decades to get its domestic auto industry off the ground, but its long-term strategy to dominate the global marketplace — as it has in solar, wind, battery and other clean-energy sectors — is coming to fruition. Today, China is the world’s leading auto manufacturer, with 100 or so companies producing an extensive range of fully electric, hybrid and internal-combustion engine vehicles. BYD has eclipsed EV pioneer Tesla — which began exporting into China in 2014 and has since built a mega-factory in Shanghai — as the No. 1 international brand.  

In 2025, nearly 55% of all car sales in China were EVs, according to the IEA, and Chinese automakers were responsible for 60% of global EV sales. This year, China is expected to produce more than 34 million vehicles, including nearly 12 million EV models. Almost 30% of the total output will be exported.  

In April alone, China shipped out more EVs and plug-in hybrids than ICE vehicles for the first time ever, according to the China Passenger Car Association. That points to the growing need for Chinese automakers to look beyond the domestic market. Manufacturing overcapacity, intensifying domestic competition and the scaling back of government subsidies resulted in a 6.8% decline in EV and hybrid year-over-year sales in China in April, while overall vehicle sales fell 21.5% from a year earlier. 

So, will U.S. drivers be able to buy a Chinese EV sometime in the near future? Yes, said Tu Le, founder of Sino Auto Insights, an automotive consultancy firm. “Once Canadians start to buy them in the next 18 months, [while] our Mexican neighbors already are able to buy them, the pressure is going to increase significantly,” he said.  

Le added that although U.S. politicians are setting up legal roadblocks to keep Chinese EVs out, they haven’t articulated any plans to make our domestic automakers competitive. “It can’t just be no, never,” he said. “That will ultimately cripple the U.S. auto industry. It’ll inflate pricing for consumers, because our technology is going to be two or three generations older than anything anyone can buy in Europe and in China.” 

Dunne is confident that “by 2030, we will see some form of Chinese cars on American roads. One way or another, they’ll find their way in,” he said. 

Most experts concur that EVs are the future of the global auto industry and that China is poised to continue as the market leader. That may lead U.S. automakers to join forces with Chinese companies as the most viable way to stay relevant and competitive.  

“I think that there will be a combination of companies that want to go it alone [or form] partnerships and joint ventures,” said Le. “If I’m BYD, there’s a spotlight on me because I’m a Chinese brand. So, if I come to the United States with Ford or GM, it should ease that pressure a little bit or at least deflect some of that pressure.”