A Huge Rule Change Could Make Some EVs More Expensive

Electric vehicles already trend towards the expensive side, and a new ruling by the Biden Administration could tip the scale a little more, at least for some EVs in the U.S. According to the Wall Street Journal, the President will potentially announce increased tariffs on Chinese goods next week, increasing the cost of manufacturing. Chinese electric vehicles specifically will have the tariff increase from 25%, where it is now, to 100%. 

This could have wide-ranging effects on the electric vehicle market in the United States, as a few EV makers like Polestar and Volvo make vehicles in China, and others rely on Chinese components and batteries for production. As far as specific MSRP increases and how EV makers react? That information will have to wait until after the announcement. EV makers could shift manufacturing elsewhere to avoid the tariff, or eat the tariff and possibly push the cost onto the customer. It's unclear what automakers will decide to do in the wake of the change.

Automakers as it is already have an issue sourcing batteries for EVs that don't run afoul of restrictions, tariffs, and regulations. A different 60% tariff on everything imported from China is also being considered by the President, per the Wall Street Journal. That's another potential can of worms that could have wide-reaching ramifications on EV buying in the future. Of course, all of this is a double-edged sword. While it's good to retain manufacturing jobs in the United States — ensuring people have places to work, making vehicles that drivers like — raising costs on the customer's end is a tough pill to swallow.

China isn't happy, according to the report, but as of now there is no specific information as to how automakers will respond. After the announcement, keep an eye on brands like Volvo, Polestar, and others price increase could be in the future, and the reason is definitely more geopolitical than EV price changes in the past.