The Chinese automotive industry has set out to conquer the West, and Europe is too small for them. The great objective is to take a bite of the cake that is the United States, a risky bet if we take into account the tariff wall to the chinese electric car. And there is already a firm proposal: Geely is preparing its assault on the United States with two aces up its sleeve.
Volvo… and Canada.
The plan. Does a few daysthe Autoline Network media public an interview with Ash Sutcliffe. He is the head of global communications at Geely Holding Group, a Chinese giant that has its own brands such as Zeekr either Lynk&Cobut which also controls the Western Lotus, PolestarSmart and… Volvo. The interview was published within the framework of CES, the technology fair in Las Vegasand it was strange because, if there are 100% tariffs on Chinese electric cars, what was Geely doing there?
The answer is simple: they are going to assault the US market. Sutcliffe commented that they are studying all the global markets in which they can expand and there is an internal question: when and where they will land in the United States. He did not share the roadmap, but did comment that they will have “an announcement on this in the next 24 to 36 months.”
Trojan horse. There are many questions here and none of them were clearly answered in the interview. For example, what will happen to US tariffs or regulations on the Chinese software in cars? Sutcliffe simply said that Geely is an international group used to following the data protection and trade regulations of various countries, so they will do “whatever is necessary to follow those regulations when the time comes.”
He gave the example of the European GDPRand although the interview does not connect the dots, the fact that they have taken advantage of such a framework to firmly assure that they will be in a market as complicated and hostile as the American one in the short term is a sign that they have given the matter more than one turn. Geely has an advantage here with Volvo, Polestar and Lotus.
They are brands under their umbrella and already operate in the United States, but specifically, what Sutcliffe stated was that they want to land with Lynk & Co and Zeekr.
North American Gate. There are two important questions. One is the tariff wall: 100% on electric vehicles from China. In practice, it would make it unfeasible for Geely to start selling cars because users would have to pay a premium that would make the brand simply unable to compete on price. But there are two safe passages. On the one hand, Geely build factories on American soil, a door opened by the Trump Administration if, with this, local employment is created. The Volvo factory South Carolina It would be an interesting and organic option for that local production.
On the other hand, use brokers that export to US soil. There Canada can be the ace up your sleeve for the Chinese company. If they decide not to assemble the Zeekr/Lyn & Co in South Carolina, they can always import the vehicles from Canada and take them to the United States through that northern gate. Canada has recently moved from a 100% tariff Chinese electric vehicles at 6.1%.
It is a very limited movement, since the initial quota will be 49,000 units per year. It’s a ridiculous number, but a start, and it could be a test bed for Geely to bring its 100% electric brands to the US from Canada. But hey, the United States is very aware of this and in fact, they have already saying that Canada “is going to regret it.”
Feet of lead. With this management of brands like Volvo, Geely has an easier time than other Chinese competitors to get its foot in the US market, but there is an important nuance in all this. Geely has not said “in three years we will be selling thousands of cars,” but rather “in three years we will detail our plan to enter the United States.”
However, although as we said, there is no specific public plan, it is evident that a statement like this implies that they are oiling the machinery to try do the same as in Europe. Now, taking into account the political climate and government maneuvers on issues such as trade or tariffs, things could change a lot in 36 months.
Images | Zeekr, BYD
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