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Sounds like US automaker higher prices are the actual threat.
For what it's worth, a government can absolutely subsidized an industry in an attempt to capture a foreign market.
There's a reason Japan and Korea have their own auto industries despite being next door to the largest manufacturing nation on earth, and it isn't because they're somehow making and distributing them for even less than China.
That being said, several automakers have blindfolded themselves about the type of cars people want. I do hope this threat is significant enough that automakers actually shift to mini-electric transportation options.
If not, I'd be happy enough buying a small Chinese electric even if the taxes made it equivalent to a larger "western" vehicle. Because it's what I want to have available to me and it's nice to fuck capitalists with capitalism.
It'd be nice if instead of putting massive tariffs, we would just subsidise production of comparable, small cars.
its less about the subsidies and more that budget buyers in the U.S in particular are very picky buyers.
while the federal/state EV tax credits, you can get vehicles like the Chevy Bolt for 20-22k. regardless the car still isnt that popular (meaning theres something specific about the car that buyers dont want).
for those buying used cars, theres not mamy reasons why someone would buy a say new 18k-20k EV that had many cuts in design vs an older premium EV. Used 2016 Model S for example can be found near 16k. its a new cheap car vs used premium car debate
this places a burden any any auto maker trying to make a budget car, because in order for it to sell well, they need to have razor thin margins, and sell a lot. failure to do so would spell the end of your compamy due to how many you produced.
I feel you strongly misunderstand the financial position of a lot of americans. They buy what they can afford, and would love a cheap new option in the market.
those who are in the budget state of mind is more likely buying a used vehicle over a brand new one. again, its the situation of a cheap new vehicle with a lot of cuts vs old vehicle that was considered premium. companies dont want to make a new cheap car because they have to compete with old premium ones.
when both the nissan leaf and chevy bolt guaged the market for a cheaper ev, they werent popular to the point where both models were canned, the leaf with no future date of return, and the bolt which chose not to have a new yearly model and will consider a newer one later. Fisker bankrupted itself out of the market, other external conpanies like kia arent importing their 20k evs like thr EV5 nor Ray EV for telling reasons, because the US market is extremely picky about what kind of car theyll buy.
the prices on cars in china are post government subsidies, and its already proven time again that when a BYD car gets moved elsewhere its real price is higher (sits closer to 20k rather than 12k) which would not put it that far from existing budget cars post federal subsidy.
keep in mind the american buyerbase is very politically charged. Conservative opinions have outright said they hate the push towards EVs, of those left, many have the common U.S mindset, that is they will only buy SUVs or Crossovers. then you have the section that will refuse to buy a car without a certain amount of capacity, which is why you can buy cars with 140-150 mi capacity outside of the U.S but its basically non existant within it. Its basically only the U.S market thats extremely picky with these kind of stuff, where drivers heavily value leg room and size over cost/efficiency