China is likely to hit back against US tariffs on electric vehicles, Wedbush's Dan Ives says
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- The Biden administration is set to raise tariffs on China EVs from 25% to roughly 100%.
- Wedbush's Dan Ives told Bloomberg on Friday that China is very likely to retaliate against the move.
- Ives said rising competition from cheap Chinese EVs would pose risks to the US domestic EV market.
China is likely to retaliate against the move by President Joe Biden's administration to impose new tariffs on electric vehicles from China, says Wedbush's analyst Dan Ives.
The Wall Street Journal reported on Friday that the White House is set to increase tariffs on China EVs from about 25% to roughly 100%, alongside an extra 2.5% duty on all imported cars into the US. The tariffs will also hit other sectors, including solar goods and minerals, according to the Journal.
"Retaliatory definitely could happen. This Game of Thrones continues to play out," Ives said in an interview with Bloomberg on Friday, noting that the added competition from cheap EVs hitting the US market would be tough for Tesla to deal with.
China's major EV producer, BYD, has avoided the US market due to the trade barriers, but its ambition of selling its cars in the US are growing.
"When you look at BYD, when you look at Nio and others that come to the US, it's a major competitive issue," he said. Ives emphasized, too that it wouldn't just be Tesla in the crosshairs of new competition. Legacy automakers would also take a hit given their large bets on EVs, so the tariffs would protect the Detroit car companies as well as Tesla.