The Price of Affordability
The More Things Change, The More They Stay The Same
Globalization made goods affordable. That was the deal. Open markets, comparative advantage, competition driving prices down. It worked.
Now we’ve chosen protectionism instead, and people wonder why they can’t afford anything.
If American consumers could freely buy BYD electric vehicles, EVs would be dramatically cheaper tomorrow. Blocking them doesn’t protect consumers. It doesn’t protect the climate. It protects a de facto domestic monopoly.
The Competition That Isn’t
BYD builds EVs profitably at price points Tesla won’t touch. They vertically integrate batteries, electronics, and manufacturing with a ruthlessness that would make Henry Ford jealous. In every open market they enter, competitors scramble to cut margins just to survive.
And it’s working. In 2025, BYD sold over 2.26 million battery EVs globally, officially overtaking Tesla as the world’s largest EV manufacturer. Tesla’s deliveries fell roughly 9% that same year. The company we’re “protecting” is already losing.
Meanwhile, Tesla has deprioritized its long-promised $25,000 “Model 2” to focus on AI and robotaxis. The affordable mass-market car that might have competed with BYD? Musk walked away from it. We’re protecting a company that chose not to compete on affordability—while banning the companies that did.
Tesla faces no real competition in the American mass-market EV segment. Why would they lower prices? Consumers have nowhere else to go. When your competitors are banned at the border, innovation becomes optional and high margins become permanent.
This is what economists call “rent-seeking.” It’s what everyone else calls a racket.
Industrial Policy for Shareholders
The official justifications for blocking Chinese EVs sound reasonable enough: national security, fair competition, protecting American jobs. The actual effects tell a different story.
Every dollar of “protection” transfers wealth from car buyers to Tesla shareholders. High EV prices persist because we’ve made them persist. Adoption slows—especially for the middle- and lower-income buyers who could benefit most from cheaper transportation and lower fuel costs.
The Affordability Lever We Refuse to Pull
EV adoption isn’t blocked by ideology. It’s blocked by sticker prices.
The United States has built a 100% tariff wall against Chinese EVs. The $7,500 federal tax credit expired in late 2025. American consumers now face a dual crisis: no cheap imports allowed in, no government discount on domestic cars. EVs remain a luxury item here while the rest of the world—Europe, Southeast Asia, Latin America—transitions to cheap, mass-market electric transport.
BYD’s Seagull sells for $7,800 in some markets—and that’s the sticker price, not a subsidized discount. American buyers can’t touch it. The biggest obstacle between Americans and electric vehicles is cost. BYD’s lower-priced models would expand the market overnight. More EVs on the road faster matters infinitely more than where they happen to be assembled. A $20,000 EV made abroad beats a $40,000 EV made domestically—for consumers and for the atmosphere.
But we’ve decided that protecting one company’s margins matters more than putting affordable cars in American driveways.
Other countries found alternatives. The EU negotiated minimum price agreements with Chinese EV makers instead of outright bans—a middle path that addresses subsidy concerns while keeping EVs under €25,000 (~$27,000) for European buyers. Norway, which welcomes EV imports and exempts them from taxes, now sees over 95% of new car sales go electric. The U.S. sits under 10%. This isn’t a coincidence—it’s policy.
We refuse to even consider it.
Here’s what happens if we did: Prices fall across the board. Tesla either cuts margins or re-enters the affordable market it abandoned. EV adoption accelerates. Domestic suppliers still benefit from volume growth. Consumers win. The climate wins. The only losers are shareholders who’ve grown comfortable with protected margins.
The Real Cost of the Tariff Wall
Let’s do the math Americans aren’t supposed to see.
The BYD Seagull is a four-seat hatchback that sells for $7,800—and that’s the sticker price, not a subsidized discount. It gets roughly 250 miles of range, charges in 30 minutes, and has been called “scary good” by industry analysts who expected it to be cheap junk. It isn’t.
The cheapest new car assembled in America is the Toyota Corolla, starting at $23,920.
Here’s what five years of ownership actually costs, assuming 15,000 miles per year:
BYD Seagull:
Purchase price: $7,800
Fuel (electricity): $3,375
Maintenance: $500
Five-year total: ~$12,000
Toyota Corolla (cheapest U.S.-assembled car):
Purchase price: $23,920
Fuel (gasoline): $11,000
Maintenance: $4,000
Five-year total: ~$39,000
The Seagull costs $27,000 less than the cheapest American-assembled car over five years. And even the Corolla isn’t fully tariff-free—about 25% of its parts come from Japan.
The 100% tariff doubles the price of every Chinese EV. A BYD Seal sells for $24,500 in China. A Tesla Model 3 sells for $39,000 in America. After tariffs, the Seal costs $49,000. The tariff doesn’t level the playing field. It inverts it.
That’s the tariff wall. That’s what “protection” costs. Every American who needs affordable transportation is paying tens of thousands of dollars more than they would in a free market—so that Tesla shareholders don’t have to face competition.
(And in states like California, where many employers offer free workplace charging, the Seagull’s fuel cost drops toward zero—making the gap even wider.)
The Jobs Argument Falls Apart
“We’re protecting American jobs” sounds noble until you look at the actual numbers.
A Tesla Model 3 costs $39,000. A comparable BYD Seal costs $24,500 without tariffs. That’s $14,500 more per car. Americans bought roughly 1.3 million EVs in 2025. At $14,500 extra per vehicle, that’s $19 billion in extra consumer costs annually—to protect 70,000 jobs.
That works out to over $270,000 per job per year in what amounts to a consumer tax, paid on top of whatever those workers actually earn in wages.
Protecting Tesla’s prices doesn’t protect American workers. It taxes American consumers to protect American shareholders.
“But China Subsidizes BYD!”
This is the objection you’ll hear first: China unfairly subsidizes its EV makers, so blocking them is just leveling the playing field.
Let’s look at the numbers.
BYD received approximately $3.7 billion in direct Chinese government subsidies from 2018 to 2022. That’s real. That happened.
Now let’s look at Tesla. The company has earned nearly $11 billion from the sale of regulatory credits alone—money that flows directly to the bottom line thanks to federal and state zero-emission mandates. State and local governments have provided billions more in tax breaks, grants, and incentives, including the famous $1.3 billion Nevada package for the Gigafactory. Tesla buyers received an estimated $3.4 billion in federal tax credits before that perk expired.
If we were serious about opposing subsidies, we’d start at home.
“But What About National Security?”
The second objection: Chinese EVs might spy on us, harvest data, or pose cybersecurity risks.
The whole country has iPhones and other smartphones made in China. There are many ways to address these concerns without 100% tariffs. This is just misdirection.
What Protectionism Actually Does
Strip away the rhetoric and protectionism does exactly four things:
It makes the protected richer.
It props up companies that cannot compete on the merits of their work.
It makes products more expensive for consumers.
It reduces the choices available to everyone.
Everything else is marketing.
Does this sound like a government interested in affordability?
Disclosure: The author owns stock in Toyota and BYD.