Rivian CEO RJ Scaringe believes the automotive industry underestimates the competitive advantages of Chinese electric vehicles. In an interview with the InsideEVs Plugged-In podcast, Scaringe refuted the notion that Chinese automakers will win on price and emphasized their advantage lies in advanced technology. He warned American manufacturers to prepare for competition based on innovation rather than price competitiveness.
Scaringe explained that if we simply let "cars produced locally in China, relying on China's cost structure" compete directly with "cars produced locally in the U.S., based on the U.S. cost structure," without a mechanism to balance costs, this model would hardly be feasible. Because the U.S. cost structure is significantly higher than China's, without tariffs, all car production would shift to low-cost countries like China; currently, the existence of tariffs is pushing car production back to the U.S. mainland.
Scaringe further analyzed that the future path to balance costs would be limited to two options: either through tariffs to make the costs of U.S. and Chinese cars comparable, or allowing Chinese automakers to produce in the U.S. — regardless of which way, the final car costs would be roughly equal. The cost advantage of Chinese cars does not come from "special technology," but from multiple factors such as low labor costs, low capital costs, and local government subsidies for factories, forming an overall lower cost base.
In terms of competition core and industry focus, Scaringe emphasized that what is more worrying is not the cost advantage of Chinese cars, but their more advanced technological capabilities. For existing automakers, they should not over-focus on cost competition, but rather concentrate on improving product technology levels.
Scaringe used Xiaomi SU7 as an example in his conversation, pointing out that most car companies, including both parties in the conversation, will purchase excellent vehicles worldwide for research — Xiaomi SU7 is a typical example. From a practical experience perspective, Xiaomi SU7 is a well-made vehicle: from the consumer's perspective, if you choose a car in China, Xiaomi SU7 has extremely high value for money, excellent driving experience, detailed craftsmanship, and overall quality are very good. Even setting aside other factors such as brand, just looking at the product itself, it is of superior quality. However, Scaringe believes that it is unlikely for Chinese cars (such as Xiaomi SU7) to be exported in large quantities to the U.S. in the short term.
"If I were an existing manufacturer, I wouldn't be too focused on cost, but rather on whether the car is really better," Scaringe said, emphasizing that American car manufacturers should shift their strategy to address quality and performance issues, rather than concerns about prices.
Although Scaringe acknowledges regulatory barriers and political tensions will slow down the speed of Chinese cars entering the U.S. market, he believes that Chinese technology reshaping expectations is just a matter of time. "Looking at the entire industry, what is concerning is that Chinese technology has already far surpassed the U.S. market," he said.
Original article: https://www.toutiao.com/article/7546135653973770795/
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