Chinese EVs may reach the U.S. through partnerships and North American production

Chinese electric vehicles face heavy tariffs, strict regulations and opposition from U.S. lawmakers and the American auto industry. Still, analysts say there is a growing possibility that Chinese EVs could be sold in the U.S. within the next few years.

China has expanded its EV presence across Europe, the U.K., Asia and Australia by exporting millions of competitively priced, high-tech vehicles, building factories and broadening supply chains. Analysts say the country is now focused on Western markets, especially the U.S., the world's second-largest automotive market after China.

That creates a major challenge for Detroit's Big Three — General Motors, Ford and Stellantis. While they continue to offer a limited number of EVs, they remain focused mainly on internal combustion engine vehicles, even as many industry experts say EVs are the future of the global auto market and China is positioned to dominate it.

"U.S. companies have stepped back from a lot of their electric vehicle campaigns, because they haven't been able to develop, in an inexpensive way, a compelling value proposition for U.S. consumers," said Stephen Dyer, a managing director in the automotive and industrial practice at AlixPartners. But if EVs are the future, he said, "You can't be competitive if you're not in the game."

"Detroit automakers perfected the business of manufacturing traditional vehicles powered by gasoline engines," said Michael Dunne, CEO of Dunne Insights, a consultancy focused on EVs and autonomous vehicles. But when they faced the shift to electrification and autonomy, "they've struggled to make the transition."

Dunne said China "has a master plan to dominate the global EV market, including cars, trucks and the batteries that power them." He said China produced fewer than a million cars a year around the turn of the century, but by 2010 had surpassed the U.S. in market size and production.

While the chance to outpace Chinese manufacturers may be narrowing, analysts say one way for U.S. automakers to remain competitive may be to partner with them.

Because direct imports of Chinese-made EVs into the U.S. appear highly unlikely, manufacturing them in the U.S. is increasingly seen as a realistic option. In January, President Donald Trump said he would support China setting up operations in the U.S. if American workers were employed. The comment led to speculation that the issue might be raised at a recent Beijing summit with Xi Jinping, although there were no reports that it was. Among the CEOs traveling with Trump, the only auto executive was Tesla's Elon Musk, whose company operates in China but trails domestic leader BYD there.

China remains the world's largest electric-car manufacturing and trading hub, accounting for nearly 75% of global EV production and 40% of global EV trade. According to the International Energy Agency, China's 2025 production of 16 million electric cars exceeded domestic demand by 20%, pushing exports to a record of more than 2.5 million vehicles. In 2025, electric models made up more than 35% of all Chinese car exports, up from about 20% a year earlier.

"The only market in the world they have not yet penetrated is the United States," Dunne said.

Even so, regulatory barriers remain. Existing U.S. restrictions on Chinese-developed software and hardware in connected or autonomous vehicle systems would have to be addressed. In addition, Senators Bernie Moreno of Ohio and Elissa Slotkin of Michigan have introduced a bill to permanently ban Chinese automakers from the U.S.

A more likely route may be collaboration between U.S. and Chinese carmakers. "I think the end game for a lot of the Chinese automakers is to have their independent, wholly owned assembly operations and businesses in the U.S. eventually, but they'd be willing to take that intermediate step," Dyer said.

"Legacy automakers understand the threat and a lot of them now have partnerships," said Adam Bernard, founder of AutoPerspectives and a former associate director of competitor intelligence at General Motors. He pointed to deals involving Ford, GM and Stellantis.

Ford, whose CEO Jim Farley has said he enjoys driving a Xiaomi SU7 sedan, is reportedly in talks with Zhejiang Geely Holding Group on a European partnership and, according to The Wall Street Journal, "also appears to be opening the door to allowing Chinese cars in the U.S. at some point."

Ford is also continuing development of its Universal Electric Vehicle platform, which is expected to debut next year with a $30,000 midsize electric pickup. The automaker's all-electric F-150 Lightning, introduced in 2021, failed to meet expectations and is being redesigned as a hybrid.

GM imports EV battery cells made by China's CATL for use in its Chevy Bolt EV, which is built at the company's Fairfax assembly plant in Kansas City, Kansas. GM also operates a facility in Coahuila, Mexico, where it builds several EVs, including the Equinox, Blazer and Cadillac Optiq. Those vehicles are not subject to tariffs under the United States-Mexico-Canada Agreement, which allows duty-free trade for vehicles assembled in North America. GM and its long-standing Chinese joint venture, SAIC-GM-Wuling, are also in advanced negotiations to begin manufacturing internal combustion vehicles in Mexico.

GM and Ford did not respond to requests for comment.

Bernard also noted that Zhejiang Geely Holding Group acquired Volvo from Ford in 2010 and later launched the EV brand Polestar. Both are produced at Volvo's factory near Charleston, South Carolina, which Geely is considering expanding to produce more EVs. "I don't think it would be a big problem for them to adapt that plant to some other Geely platforms," Bernard said.

One possible candidate would be Zeekr, another Geely-controlled brand used by Alphabet-owned Waymo for its robotaxi fleet in San Francisco.

Volvo recently received approval from the U.S. government to continue selling vehicles using Chinese-developed and maintained software after a Biden administration rule that took effect in March 2026 and covered companies with significant Chinese ownership.

Chinese EV brands are already being imported into Mexico and Canada.

In Mexico, Chinese vehicles account for about a quarter of total sales, although that figure may decline after Mexico imposed a 50% tariff earlier this year. In Canada, Prime Minister Mark Carney signed a deal in January allowing up to 49,000 Chinese-built EVs into the country each year at a 6.1% tariff rate.

Stellantis, which owns Dodge, Chrysler, Jeep and Ram as well as several European brands, is the largest shareholder in Zhejiang Leapmotor Technology Co. with a 21% stake. It also owns 51% of a joint venture with the Chinese automaker. During a recent news conference, Stellantis CEO Antonio Filosa said the company "for sure" sees opportunities to expand production and sales with Leapmotor in Mexico and possibly Canada. "I believe that there is space in Mexico. … There is maybe space in Canada. We'll see," he said.

Stellantis declined to provide more detail about its partnership with Leapmotor.

Other automakers are also pursuing facilities in North America. Under U.S. pressure, Mexico stepped back from a plan to allow BYD to build a factory there, but BYD and Geely are reportedly among the finalists seeking to buy a Nissan-Mercedes-Benz plant in Mexico. In April, Guangzhou Automobile Group Co. announced plans to begin assembling vehicles there in the second half of this year.

BYD executive vice president Stella Li said in March that the company is considering building a wholly owned factory in Canada and possibly acquiring a struggling legacy automaker. "We're open to every opportunity we have," Li said, without giving details.

Whether these moves could create a backdoor path for Chinese EVs into the U.S. remains uncertain. Political opposition is not the only obstacle. Vehicles made in Mexico or Canada face a 25% tariff, which is lower than the cumulative 125% rate imposed on Chinese EVs but still adds cost.

Under USMCA, a vehicle assembled in Mexico or Canada can enter the U.S. with preferential tariff treatment only if 75% of its content, including batteries, motors, electronics and software, is sourced in North America.

That calculation may become more complicated. This week, the Trump administration proposed a new 10% tariff on Mexico, Canada and other countries over alleged failures to address forced labor concerns. The move followed a Supreme Court ruling in February that Trump's "Liberation Day" tariffs were illegal. U.S. Trade Representative Jamieson Greer said this week that any USMCA renewal would not be a "rubber stamp" on July 1 and that U.S. auto content requirements are a major sticking point.

Greer said the administration will not accept a new deal that lacks a requirement for a specific share of car content to be made in the U.S. While he said Wall Street Journal reporting that the administration is seeking a U.S. content requirement as high as 50% was inaccurate, he confirmed that the administration is focused on the issue and will press it in negotiations. If the U.S. does not get what it wants in the talks, he told CNBC's Megan Casella at the CNBC CEO Council Summit in Washington, D.C., "It will put us on a path to exit it eventually, if we aren't able to get into a better position."

Despite these barriers, Chinese EVs from BYD, Geely, Great Wall and Xpeng are already appearing near the U.S.-Mexico border. They have been bought at dealerships in Mexico, in some cases for less than $20,000, by Mexican citizens who can legally travel to El Paso, San Diego and other border cities. U.S. regulations, however, make it nearly impossible to register such vehicles in the United States.

Although American drivers still have little access to Chinese EVs, analysts say interest could rise as fuel prices remain high because of the war in Iran. A recent Kelley Blue Book study found that 38% of Americans would consider buying a Chinese vehicle if given the option. "The only thing stopping [them] are the restrictions of selling into the U.S.," said Dan Ives, an analyst at Wedbush Securities.

China spent decades trying to build its domestic auto industry, and the article says its long-term strategy to dominate global markets, as it has in solar, wind, batteries and other clean-energy sectors, is now taking hold. China is now the world's leading auto manufacturer, with around 100 companies producing a broad range of fully electric, hybrid and internal combustion vehicles. BYD has surpassed Tesla, which began exporting to China in 2014 and later built a major factory in Shanghai, as the top international EV brand.

According to the IEA, nearly 55% of all car sales in China in 2025 were EVs, and Chinese automakers accounted for 60% of global EV sales. This year, China is expected to produce more than 34 million vehicles, including nearly 12 million EVs, and export almost 30% of total output.

In April, China exported more EVs and plug-in hybrids than internal combustion vehicles for the first time, according to the China Passenger Car Association. That underscores the need for Chinese automakers to look beyond their domestic market. Manufacturing overcapacity, intensifying competition and reduced government subsidies contributed to a 6.8% year-over-year decline in EV and hybrid sales in China in April, while total vehicle sales fell 21.5% from a year earlier.

So, will U.S. drivers be able to buy a Chinese EV in the near future? Tu Le, founder of Sino Auto Insights, said yes. "Once Canadians start to buy them in the next 18 months, [while] our Mexican neighbors already are able to buy them, the pressure is going to increase significantly," he said.

Le said U.S. politicians are creating legal barriers to keep Chinese EVs out while failing to present a plan to make domestic automakers more competitive. "It can't just be no, never," he said. "That will ultimately cripple the U.S. auto industry. It'll inflate pricing for consumers, because our technology is going to be two or three generations older than anything anyone can buy in Europe and in China."

Dunne said he is confident that "by 2030, we will see some form of Chinese cars on American roads. One way or another, they'll find their way in."

Most experts cited in the article agree that EVs are the future of the global auto industry and that China is likely to remain the market leader. That could push U.S. automakers to work with Chinese companies as a practical way to remain relevant and competitive.

"I think that there will be a combination of companies that want to go it alone [or form] partnerships and joint ventures," said Le. "If I'm BYD, there's a spotlight on me because I'm a Chinese brand. So, if I come to the United States with Ford or GM, it should ease that pressure a little bit or at least deflect some of that pressure."