Core Viewpoint - The recent passage of the "Big, Beautiful Budget Bill" by the U.S. House of Representatives introduces new annual taxes on electric vehicles, which could hinder the development of the electric vehicle industry in the U.S. [3][4][5] Group 1: Legislative Changes - The new bill imposes an annual tax of $250 for fully electric vehicle owners and $100 for hybrid vehicle owners, contrasting sharply with previous tax incentives aimed at promoting electric vehicle adoption [3][4]. - The bill eliminates federal tax credits for electric vehicles and introduces new annual fees, increasing the purchase and operating costs for electric vehicles, particularly affecting price-sensitive consumers [5][6]. Group 2: Impact on the Electric Vehicle Market - The increase in tax burden, alongside the loss of tax credits, is expected to lead to a decline in electric vehicle sales, creating uncertainty in demand and prompting manufacturers to reassess production plans [5][6]. - The electric vehicle penetration rate in the U.S. is already low, and the new tax measures could further slow the industry's growth, impacting both domestic and foreign electric vehicle manufacturers [5][6]. Group 3: Comparison with Global Trends - The U.S. tax increases on electric vehicles appear contradictory to global trends promoting zero-carbon transitions, where countries like Norway and Denmark offer significant tax exemptions for electric vehicle purchases [6][7]. - In China, the penetration rate of new energy vehicles is projected to exceed 50% by 2025, with calls for equal tax treatment between electric and fuel vehicles gaining momentum [7].

Core Viewpoint - The article discusses the ongoing competition between electric vehicles (EVs) and traditional fuel vehicles in the Chinese automotive market, highlighting the significant market share that fuel vehicles still hold despite the rapid growth of EVs [3][4][5]. Summary by Sections New Energy Vehicles vs. Fuel Vehicles - The Shanghai Auto Show showcases a strong focus on new energy vehicles, with brands like BYD, NIO, Li Auto, and Xpeng unveiling new models, while some manufacturers continue to support fuel vehicle development [3][5]. - According to SAIC GM's general manager, fuel vehicles are expected to maintain at least 25% market share in the future [3]. Market Data and Trends - In March, the penetration rate of new energy vehicles in China reached 54.1%, indicating a significant shift towards EVs [4]. - Despite the growth of EVs, fuel vehicles remain a substantial part of sales for traditional automakers, with companies like Geely, Great Wall, and Chery still relying heavily on fuel vehicle sales [6][9]. Financial Performance and Competitive Landscape - BYD's decision to stop producing fuel vehicles is backed by its strong control over the battery supply chain, leading to a projected gross margin of 21.02% in 2024, surpassing competitors like Li Auto (19.8%) and Tesla (17.9%) [7]. - Fuel vehicles still represent a significant portion of total sales for major automakers, with Geely's fuel vehicle sales projected to account for 59.19% of total sales in 2024 [9]. Global Market Strategy - Companies like Chery and Geely are focusing on international markets, with Chery's overseas sales in 2024 expected to reach 1.144 million units, of which over 80% will be fuel vehicles [14]. - The global automotive market still sees fuel vehicles as a dominant force, with 85% market share compared to 15% for new energy vehicles [17]. Policy and Industry Outlook - The Chinese government is expected to continue supporting the development of internal combustion engine technology alongside new energy vehicles, indicating a balanced approach to automotive development [13]. - The article suggests that fuel vehicles will remain relevant in the market, especially as electric vehicle technology continues to mature [17].