The Journal. - Can the U.S. Keep Chinese Cars Out?

Episode Date: June 3, 2026

China’s carmakers like BYD, Geely and Great Wall Motor have seen immense growth in recent years. But their cars are not for sale in the U.S. due to high tariffs and tight regulations. WSJ’s Ryan Felton reports on America’s rising interest in Chinese cars, particularly because they’re so affordable. Jessica Mendoza hosts. Further Listening: - Move Over, Humans. China's Robots Are Taking Over - How China's BYD Overtook Tesla - China and the U.S. Are in a Race for AI Supremacy Sign up for WSJ’s free What’s News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

In 2024 to BYD King Lounge. In 2024, BYD threw a big event in Mexico. The Chinese electric vehicle company was celebrating one year in the country. Executives took the stage to announce a new model, and the CEO of BYD Mexico talked about a hybrid SUV that sold out in the country in just a few weeks. He also set a big goal to sell 50,000 BYD cars in Mexico by the end of that year. These days, industry executives estimate that BYD is selling closer to 80,000 cars a year in Mexico, capturing a huge chunk of the country's EV market.

Chinese vehicles overall make up a quarter of total car sales. of total car sales there. But if you're in the U.S., you might have missed the hype. That's because here, all of these cars are effectively banned. Still, as more Chinese vehicles show up in America's backyard, more U.S. drivers are taking notice. These cars aren't sold here right now, but what's clear is there is more interest. Our colleague Ryan Felton covers the auto industry.

There's routinely sightings now of the... these cars in border towns. And so you just kind of have this small pocket of the U.S. that is not just being exposed to these cars online, but like they could actually see them around town on American streets, even though they can't buy them. Welcome to The Journal, our show about money, business, and power. I'm Jessica Mendoza.

It's Wednesday, June 3. Coming up on the show, will Chinese cars come to the US? And what will it mean for the car industry. The 2026 Chevrolet Tracks is the stylish SUV for those on the move. And with the standard Chevy safety assist package, you have the backup to handle every turn with confidence. The 26 tracks, start your build at Chevrolet.ca. Hey y'all, it's Kelly Clarkson with Wayfair. Ever order furniture online and wonder what if? Like, what if it doesn't hold up? That sofa was four days old. You should have ordered from Wayfair. With Wayfair, there's no what if. Just style you love

and quality you can trust. Visit Wayfair.ca. When China first entered the global car market back in the 80s, the U.S. auto industry didn't think much of it. They saw it as a place to sell cars, but Chinese automakers weren't considered serious competition. And for decades, that was the status quo. That carried over into the 2000s when companies that were launched on their own started trying to think about coming to America. I remember I had a conversation with one former executive at a domestic automaker who said that when they showed up at the Detroit Auto Shows for the first time in the 2000s, they were kind of just laughed at more or less. Why? What was that because of the designs of the designs of the cars?

Yeah, the designs, just the way that they drove. I mean, it was just everything from the top down. They just weren't viewed as serious contenders. I mean, BYD was trying to come over to the U.S. as early as, you know, 20. And there's a video of Elon Musk being asked at that time about B-YD, and he literally just burst out laughing. Why do you laugh? Where he is trying to compete? Why do you laugh?

Have you seen their car? I have seen their car. I think it's just fair to say they just weren't taken seriously at all. But China kept investing in its auto industry, and the designs and software have advanced quickly, turning a lot of skeptics. into converts. There's a common story that's shared by a lot of American auto execs who during the pandemic weren't traveling to China during the early years. And then when China reopened and held its first auto show in like 2023, a lot of automakers went there and were just kind of blown away by what they saw. Like it's just this period where everyone in China just kind of really accelerated and

ramped up. And I think a lot of it ties back to the country's overall investment prioritization of of building up that supply chain. These days, there are more than 100 car brands in China. So the bigger players, brands like B.Y.D., Gile, and Great Wall Motor, are taking their product overseas. These companies are exporting hundreds of thousands of cars, electric, hybrid, and gas, to places like Europe, Southeast Asia, all over the world. Canada is also opening itself up to Chinese car imports.

And the electric vehicles and hybrids have performed especially well. Elon Musk may have mocked them back in the day, but customers are raving about them now. This is China's best-selling small EV, and at $10,000 U.S., I can understand why. And on a full charge and a full tank of gas, it can do well over 650 miles. It's a total spaceship with a big rotating touchscreen, great driver interface. You get a head-up display, you get massage, seats that recline and have this lovely leg rest. Amazing. A good example, there was an SUV by the company GLE.

And it was just kind of, you know, gobsmacking when you see the kind of numbers that they're putting out, which is something like 800 miles of range in total, you know, something like well over 100 miles that's just all electric. That range goes beyond any plug-in hybrid on sale in the U.S. today. And when you think about just what that means on a day, day to day for most people. I mean, you could go several weeks without actually having to re-up your car in any way. And besides performance, are there other features these cars have that you maybe don't see in the U.S.? There certainly are the kind of more outside of the box kind of technologies that we don't see like rotating center dashboards, you know, screens or

like fridges in the back. Like the karaoke machines. Yeah, like the karaoke thing. It's, it's so common. I mean, like, so there's these things that I think are atypical and, you know, clearly not a part of our car market, but I think they have everything now. And, you know, we talk to some executives who are competing with them in other countries. And that was a big point that, you know, I think came away from it was it's not just about EVs. They're competing on everything now. What's maybe most attractive to buyers when it comes to China's cars is the price tag. simply put, it's like they're priced aggressively, and in many cases, very affordably. Wherever China's automakers have gone around the world as of late, they've really sort of immediately gobbled up market share and won over locals where they've gone, which is pretty much everywhere else but America at this point. And U.S. car companies and the government want to keep it that way.

Would you say this is the biggest threat they've seen what in a generation? Yeah, I mean, I don't think it's any question. What efforts to keep Chinese cars out of the U.S. look like is after the break. Chinese cars are not explicitly banned in the U.S., but there are a couple of reasons why you don't see them here. First of all, there are sky-high tariffs in place. Those can get to be above 100%, making them just too expensive to sell here. And then there are national security concerns. The U.S. government has prohibited the software inside the cars, basically comparing it to a Trojan horse.

It's been an overriding theme for the last few years since the Chinese car industry really kind of took off and resulted in rules that are pretty stringent and stipulate that you can't have any Chinese, what they call, connected vehicle software. And that's essentially anything in your car that's talking to the cloud. that can't be made by a Chinese-connected entity. And then also in a few years, you can't have certain types of hardware in your car that come from China. And that's all been tied to national security. So you can't buy these cars here, but that hasn't stopped them from appearing on some American roads. As part of his reporting, Ryan went down to Texas and met up with a B-YD owner named Dario Araiza. He's a dual U.S.-Mexico citizen who lives in Mexico near the border

and regularly drives his B.Y.D. into Texas. Ryan says that Dario, like many others he talked to, purchased his Chinese car for one big reason. Price. When he said he was going to look for a car, he had a particular price point of mind, which is in the low to mid-30s, $30,000. And he said it was just no contest

when he actually saw the vehicle compared to, others at that price point. It's a plug-in hybrid, which means it gets all electric range for driving, plus has a gas motor as well. And there really isn't too many at the price they bought it, which was close to $30,000. So he said it was just it was a no-brainer, particularly because of the price. And in your reporting, what did you learn about the appetite from American customers for Chinese cars? Are there a lot of like U.S.-based Darioes out there? You know, one of the biggest surveys of car owners that's done every year, they will ask something like 250,000 people, would you buy your next car that's made in X country? And with China, that number has steadily gone up. Something like 30% of car buyers would consider buying a car from China now, which I think it's kind of extraordinary in this environment where you have pretty much everyone from industry to lawmakers loudly saying these.

cars shouldn't be let into the U.S. And that makes U.S. car companies quite worried. What is at stake here, particularly for the American car industry? Yeah, I mean, it's, if you take the car maker's point of view, it's everything. They repeatedly described it as an existential threat to the domestic car industry. These concerns have bubbled up from a lot of brands, from American stalwarts like Ford to importers like Hyundai, they feel like they would have a hard time competing on price if Chinese cars entered the U.S. market.

If I wanted to buy a new car here in the U.S. today, how much should I expect to spend at minimum? So there's some that get listed for $21,000, $22,000. Mm-hmm. And those are the very compact SUV-type cars. If you're looking for something like you're a family, that you're you. You need something bigger. I mean, you're immediately going up to closer to, you know, 30,000 on up.

But the average transaction today is, you know, $50,000. And that's been pretty much consistent for the last few years now. Domestic car executives say there are several reasons why they'd struggle to compete with China's aggressively low car prices. Things like the country's cheaper labor, powerful government subsidies, and efficient supply chain. Even as Americans show more interest in buying Chinese cars, U.S. lawmakers are pushing for more restrictions. A new bill called the Connected Vehicle Security Act was recently introduced in the U.S. Senate.

Here's Senator Bernie Moreno, a Republican from Ohio, one of the bill's co-sponsors. This is about hermetically sealing the U.S. market from predatory Chinese companies that are funded by the CCP with one simple goal, which is to destroy our auto sector, which is about 10% of our GDP. The bill would make it illegal to manufacture Chinese cars in the U.S.

It would also mean American car companies couldn't pursue joint ventures with Chinese automakers, and Chinese car companies that own U.S. brands would have to divest themselves of those brands. A lot of the automakers immediately came out and said that they were supportive of the policy move, and that's not a surprise, really, at this point,

because you have so many companies now have just been loudly saying for the past year that China coming here in some capacity would be unfair given some of the points I mentioned about subsidies, for example. But I think part of that fear, though, is driven by the fact that these companies know how to make a really good car now. They feel like it would be an unfair competition, but these companies are all very impressed with the cars as well. So, Ryan, the U.S. government is trying to safeguard American carmakers with these policies. But how realistic is it to expect that they can keep Chinese cars out of the U.S.

indefinitely? I mean, is it inevitable that these cars will be sold here? I can't see it happening soon, especially if this legislation picks up steam. Because the fact that it would also ban the manufacturing of cars, that really would sort of be a hindrance. That said, plenty of executives. believe it's inevitable. The fact I think that you have these companies still expressing a desire to come here, even with all this sort of opposition that's been building,

I think that there's sort of this resignation that's developed that they're going to find a way somehow. I think it's just sort of waiting to see that the dust settles politically. That's all for today, Wednesday, June 3rd. The Journal is a co-production of Spotify and the Wall Street Journal. If you like our show, follow us on Spotify. or wherever you get your podcasts. We're out every weekday afternoon.

Thanks for listening. See you tomorrow.