Puerto Vallarta, Mexico, November 10, 2026 --  

America's carmakers refuse to change their dysfunctional old ways despite mounting challenges from Chinese competitors.

The BYD automotive dealership is just outside the airport grounds in this Mexican resort city. Visitors from the United States can see the shiny new Chinese electric vehicles from the windows of their planes as they land for their beach vacation. What they most certainly cannot do is buy one of these cars for themselves to take one back home as a souvenir.

Sorry, Gringo. No affordable cars for you! (Photo by Kerry Dooley Young)

Despite surging sales in Mexico, Chinese electric vehicles from BYD and other manufacturers are effectively banned from the United States. Even if Americans are willing to pay the 100 percent import tariff that makes them expensive in the U.S., connected vehicle regulations outlaw Americans from driving them on public roads through January of next year, with automakers lobbying for a permanent extension.¹ This law exists purportedly to prevent Chinese car radios from infiltrating US systems, but everybody knows that the law is really about protectionism.

While America shows little sign of allowing Chinese imports soon, Detroit is still anxious about this happening. Earlier this year, Canada agreed to allow some imports, opening a second foothold for Chinese car imports in North America. How long can the U.S. hold out?

To understand why American auto manufacturers fear the Chinese auto industry, take a look at Mexico. Since entering its market just three years ago, sales have surged. In the first half of this year, 17 percent of all new vehicle sales in Mexico were Chinese imports², led by BYD, which makes the highly affordable Dolphin Mini electric hatchback selling for 400,000 Mexican pesos, or $22,000 at current exchange rates.

All BYD vehicles in Mexico are imported and Mexico this year imposed a new 50 percent tariff on importedChinese vehicles. So far this has not led to major price increases, as BYD dealers stockpiled Mexican inventory late last year and may be absorbing some of the new tariff's costs.

But the end result of Mexico's new tariff may be that BYD creates an assembly plant in Mexico to circumvent it. The company was considering doing this about two years ago -- exploring purchasing two Mexican auto plants from other manufacturers in early 2025. But BYD scuttled those plans amid the chaos caused by Donald Trump's tariff war, that made access to US markets look dubious even for vehicles made in Mexico.³

Faced with an economic challenge from Chinese vehicles just across its southern border, you might think that American auto industry would use the protectionist law to double down on its electric and affordable vehicle production and prepare for competition.

Nope.

America's big three automakers remain stuck in the 20th century, going all in on manufacturing enormous high-end gasoline powered trucks and sport utility vehicles. In 2024, General Motors announced it would stop making the Chevy Malibu -- the last sedan still made by Detroit.⁴ New cars in the United States are increasingly unaffordable with the average price now over $51,000.⁵ Any American not wanting an expensive behemoth vehicle has no choice but foreign automakers.

This wouldn't be so bad if America's electric upstarts were preparing to take on the mass market. But that is far from the case. Tesla Motors, once the world's largest electric carmaker, started down a path of self-destruction after sales peaked in 2023. Tesla's ketamine-addled CEO Elon Musk unleashed his ugliest predilections in 2024, becoming a full-bore Trumper and thereby destroying the company brand with its target market. Tesla vehicle sales went into absolute decline, ceding to BYD world leadership in electric car sales.

Musk still props up his cult-like following with dubious promises of Cybercab dominance backed by an insignificant pilot service (magnified only by smoke and mirrors.) Monday's announced end to production of the ill-received Cybertruck is the latest milestone of the company's manufacturing decline. Tesla's tragic downfall after such incredible promise represents the greatest disappointment of any modern American startup.

Meanwhile, Rivian and Lucid Motors, America's smaller electric vehicle upstarts, remain focused on luxury buyers with no signs of becoming mass-market manufacturers. Tragically, America has doomed its own vehicle manufacturing future by chasing premium buyers while ceding the affordable electric vehicle market to China led by BYD.

Disaster is far from certain -- America's automakers faced extinction from Japanese competition in the 1980s and managed to survive the experience. Perhaps that can happen again.

The primary hope for American vehicle manufacturing is that a large mass market for electric vehicles will fail to materialize, dooming BYD's strategy to fail. Maybe self-driving cars will eliminate the need for widespread vehicle ownership. Maybe the internal combustion engine will get a new lease on life by yet unknown affordable green technologies.

Maybe. Maybe it will all be okay. But maybes and hopes are not a wise plan for securing the future of America's once formidable century-old automobile industry. Congress should not give Detroit endless protection so it can continue its dysfunctional path on the backs of American consumers.

Notes:

1. CNBC, Automakers Urge Congress to Permanently Ban Chinese Connected Vehicles in U.S., September 3, 2026

2. Mexico Business News, Mexico's Chinese Auto Sales Jump 30% Despite Tariffs, July 20, 226

3. Latam Mobility, Chinese Automakers Pull Back on Mexico Investments Amid USMCA Uncertainty, October 2026

4. Fast Company, Detroit Killed the Sedan. Trump's a trade War Will Make Them Wish They Hadn't, March 13, 2025

5. NPR, The average Cost for a New Vehicle in the U.S. Hits a Record High: over $51,000, November 10, 2026