Western automakers, from the Big Three to EV pure plays, are delivering the same stark warning: Chinese automakers pose a threat to their survival if domestic production isn’t protected.
«China poses a clear and present threat to the auto industry in the U.S.,» wrote the Alliance for Automotive Innovation (AAI), a trade group that reps the Big Three, among other automakers, ahead of a House hearing on Chinese vehicles last December.The AAI said Congress needs to maintain the Commerce Department’s Biden-era prohibition on importing certain technology and software from China, which effectively bars the import of vehicles from Chinese manufacturers.
In recent comments, corporate executives have hammered home a version of this messaging
EV maker Rivian (RIVN) has a big year ahead with the launch of its entry-level R2. While short-term issues like cost control and EV demand are more top of mind for the company, the threat of China isn’t that far off.
Rivian CEO RJ Scaringe noted that in the long term, two important factors need to be recognized.
«It’s not like there’s magic happening on the Chinese cost structure. It’s really two things you can follow very clearly,» Scaringe told Yahoo Finance last week. «One is their capital cost structure is much lower than us. In most cases, it’s near zero. It’s a highly subsidized industry where plants and manufacturing compacts are paid for by the local equivalent of the federal government.»
The second factor is labor, with Chinese automakers’ costs a quarter to a fifth of those faced by US companies.
Scaringe said at the moment, tariffs in place «equalize» the cost of those vehicles, protecting US manufacturing. But only for now.
Rivian CEO RJ Scaringe speaks at the company's first Autonomy and AI Day, showcasing developments in self-driving technology, in Palo Alto, Calif., on Dec. 11, 2025. (Reuters/Carlos Barria)
Rivian CEO RJ Scaringe speaks at the company’s first Autonomy and AI Day, showcasing developments in self-driving technology, in Palo Alto, Calif., on Dec. 11, 2025. (Reuters/Carlos Barria) · REUTERS / Reuters
And despite this tariff buffer, Ford (F) CEO Jim Farley argued that China’s rising dominance remains a threat.
«We’re a year down the road with the Chinese competitors. They’re now even more prominent around the globe. Not a lot here in the US, but you go to Europe, you go to anywhere else, China is a big deal,» Farley told Yahoo Finance in January.
Chinese automakers captured approximately 6.1% of the European auto market last year, a 99% jump from 2024. And this despite tariffs of 35.3% on Chinese EVs entering the EU; however, plug-in hybrids and full hybrids were excluded.
Farley has in the past called Chinese-made cars an «existential threat» to US automarkets, not just because of the country’s tech advances, but also for its labor infrastructure that supports cheap manufacturing.