Rivian CEO explains what legacy automakers should be most afraid of with Chinese cars instead of prices

Legacy automakers are sort of panicking when it comes to Chinese cars, but according to Rivian CEO RJ Scaringe, they’re panicking in the wrong direction.

So to speak.

In his view, everyone’s spending too much time and energy focusing on the price.

But there’s something else automakers should bear in mind.

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Rivian CEO believes some Chinese cars are just ‘better’

Speaking on the Plugged-in Podcast, Rivian CEO RJ Scaringe said that when it comes to Chinese cars, legacy automakers are putting way too much emphasis on the price, and not enough on the quality.

“If you’re looking at the whole industry, the technology [in China] is much better,” he said.

“If I was an existing manufacturer, I’d get less hung up on the cost and more focused on ‘the cars are actually better.'”

However, Scaringe conceded that American manufacturers won’t have to worry when it comes to their domestic market.

In his view, Chinese automakers will never be allowed to undercut American manufacturers on their turf.

“One of two things will happen. Either we’ll put tariffs in place that make the cost equal, or we’ll allow Chinese manufacturers to build in the United States,” he said.

After all, this is the same game everyone else is playing.

China imposes very hefty tariffs on foreign cars, which is why every single manufacturer that wants to do business in China must do so with a local joint venture.

Audi, for example, teamed up with SAIC, while Nissan teamed up with Dongfeng.

The only exception is Tesla.

Elon Musk’s company is allowed to operate without a joint venture, but still has to make sure that cars sold in China are built locally.

RJ Scaringe isn’t the first to sound the alarm bell

For years, Chinese cars were stereotypically considered very cheap but not as good as European, American, or Japanese vehicles.

Ironically, they’re no longer always that cheap – the Yangwang U9 costs $230,000 – but they’re very good, and getting better.

RJ Scaringe isn’t the first prominent CEO to sound the alarm bell.

A while back, Ford CEO Jim Farley went viral after admitting he ‘couldn’t stop driving’ the Xiaomi car.

All CEOs and all automakers regularly test vehicles from competitors, that’s standard practice, but Farley’s praise didn’t go unnoticed.

“Everyone’s talking about the Apple car, but the Xiaomi car [is fantastic]. And [unlike the Apple car] it exists. It’s sold out for six months,” Farley said in an episode of the Everything Electric Tech podcast.

“We flew one in one from Shanghai to Chicago, and I’ve been driving it. I don’t want to give it up.”