I don't understand why everyone is looking at the headline "U.S. to Announce New Tariffs on Chinese Electric Vehicles" and the takeaway is that you should be buying TSLA? No. Who has actually seen a Chinese EV in the United States? Exactly. They do not exist. So the headline of 100% tariffs on EVs from China is absolutely meaningless. The real substance to these tariffs are the things the United States actually imports. So if domestic EV makers really aren't being hurt by Chinese imports then who are?
So let's look and see who actually stands to benefit from this? Looking back, Biden in 2022 introduced the Inflation Reduction Act (IRA) and one key part of that was tax credits for domestically manufactured solar panels. These credits which are called 45X tax credits [1] provide credits for clean energy components domestically produced. So this on paper seems like a boom for domestic solar manufactures.
Now, let's talk tariffs. As we all know Trump loved his Chinese tariffs which included solar panels in 2018, and Biden after taking office decided to extend them in 2022. However, as part of that extension Biden also provided an exemption for Bifacial Solar Panels, which at that time only accounted for a small percentage of the imported solar panels to the United States. Fast forward two years and bifacial solar panels account for 97% of imported solar panels. So today we have 14.25% tariffs on solar panels and 0% on bifacial solar panels due to the exemption. Well again 97% of the imports are bifacial (see Reuters link dated Apr 25 below). So if solar companies can get additional tariffs and new tariffs for bifacial panels they stand to print money hand over fist, they become a monopoly effectively. In 2024 First Solar will receive over a billion dollars in cash from the US government for simply running their business [4].
So what was the catalyst for this change? Well the First Solar (FSLR) CEO Mark Widmar. Mark has been lobbying congress and the Biden administration for nearly two years for these tariffs. And I can assure you Tuesday is going to be a celebratory day for Mr. Widmar. As recently as Mar 12th 2024, Mark Widmar CEO of First Solar gave testimony before congress [2]. As a result of this there was a bipartisan push for additional solar tarrifs, on January 30th senators Ossof, Brown, Rubio, and Warnock urged the Biden administration to increase solar tarrifs [3]. Again this was drafted by both democrat and republican senators, so the likelihood of losing these tariffs if Trump came back is slim to none, especially when Trump has talked of even more aggressive tariffs.
Not to beat a dead horse but a simple google search will reveal how long First Solar (FSLR) has been pushing for this. So I think it's pretty obvious that they are the ones who stand to benefit from this and not EV makers. So for every idiot you see mention TSLA or RIVN, ask them: How many Chinese EVs have you actually seen?
Apr 25 2025
US solar panel makers seek import tariffs to protect new domestic factories
https://www.reuters.com/business/energy/us-solar-panel-makers-seek-new-tariffs-protect-domestic-factories-2024-04-24/
Apr 24 2024
Solar manufacturers petition U.S. to impose tariffs on imports from four Southeast Asian nations
https://www.cnbc.com/2024/04/24/solar-manufacturers-petition-us-to-impose-tariffs-on-some-imports.html
Mar 5 2024
First Solar CEO says tariff exemptions threaten U.S. efforts to ramp up domestic solar manufacturing
https://www.cnbc.com/2024/03/05/first-solar-ceo-says-tariff-exemptions-threaten-us-efforts-to-ramp-up-manufacturing.html
Feb 6 2024
US Solar Manufacturing Climbed During Tariffs, Trade Panel Finds
https://www.bloomberg.com/news/articles/2024-02-06/us-solar-manufacturing-climbed-amid-tariffs-trade-panel-finds
Sep 20 2023
First Solar Urges US to Get Tough on Trade as Module Prices Sin
https://www.bloomberg.com/news/articles/2023-09-21/first-solar-urges-us-to-get-tough-on-trade-as-module-prices-sink
- IRA 45X Tax Credits: https://www.energy.gov/eere/solar/federal-tax-credits-solar-manufacturers
- Mark Widmar First Solar CEO Testimony: https://www.finance.senate.gov/download/03122024-widmar-testimony
- Senate Solar Tariff Memo: https://www.ossoff.senate.gov/press-releases/sens-ossoff-brown-rubio-rev-warnock-urge-increased-tariffs-on-imported-chinese-solar-products/
- https://finance.yahoo.com/news/first-solar-inc-announces-first-200200221.html
Positions: 05/17/24 205C , 06/14/24 220C
View Reddit by _gaff – View Source
