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Gwynne Shotwell, long Elon Musk's second-in-command at SpaceX, spoke exclusively with CNBC ahead of her company's highly anticipated IPO. View More

In this articleSPCXFollow your favorite stocksCREATE FREE ACCOUNT watch nowVIDEO21:2821:28Watch CNBC’s exclusive interview with SpaceX President and COO Gwynne ShotwellDigital Original SpaceX didn't just rewrite the playbook for aerospace and defense, it helped birth a new space economy.Now Elon Musk's company is tackling a different type of moonshot: going public. "I wasn't sure we would go public," SpaceX Chief Operating Officer Gwynne Shotwell told CNBC in an exclusive interview, just before the company started its investor roadshow. "It actually feels like the right time now."Follow CNBC's live updates on the SpaceX (SPCX) IPOSpeaking from a walkway overlooking the Starship factory at SpaceX's rapidly expanding headquarters in the company town of Starbase, Texas, Shotwell said the rocket maker needed to be private in order to focus on long-term goals rather than quarterly financials. "Today, across SpaceX's various businesses, the building blocks of a publicly traded company are now in place," she said. Eight years ago, Shotwell said an initial public offering probably wouldn't happen until SpaceX was doing regular missions to Mars.Shotwell is SpaceX's top executive underneath Musk, the founder, CEO, technology chief and board chair, and the person whose stated goal is to make life multiplanetary. Musk focuses on high-level strategy and deep dives into the technical development of the future.Making the business work on Earth is the job of those around him, namely Shotwell. An early employee recruited in 2002, SpaceX's first year, Shotwell oversees the day-to-day operations of a 22,000-person full-time workforce. She's managed everything from rocket development to the creation of Starlink and, more recently, the integration of xAI. She also talks to customers, regulators and, starting now, public investors.  "Elon jokes that we make the impossible, we just make it late," said Shotwell, who is also one of the company's eight board members. "Look at our track record, look at our history. We do really difficult things. We do bring them to product level. In fact, xAI is definitely starting to be product-focused." watch nowVIDEO0:4800:48SpaceX President Gwynne Shotwell on Starship orbital flights: 'It largely depends on the FAA'News Videos Engineering advanced technology to tackle tough business cases others have deemed unviable, and then commercializing them, is the SpaceX playbook. With rocketry, the company underbid competitors for launch contracts, implemented reusable boosters and drastically drove down the cost to fly to space. Making Starlink work involved sending satellites to low Earth orbit and doing so economically. Now, with artificial intelligence infrastructure, SpaceX has its sights set on building a vertically integrated tech stack stretching into space and encompassing everything from chips to AI applications. With a record $75 billion IPO, SpaceX carries a stratospheric valuation of nearly $1.77 trillion. At that market cap, SpaceX would debut as the seventh-most valuable company in the U.S., surpassing Meta and Musk's other public company, Tesla. It would also be worth more than the entire S&P 500 aerospace and defense group.Skeptics on Wall Street are questioning the math. The valuation suggests an estimated 2026 revenue multiple of 40 and an adjusted earnings multiple of 175. SpaceX wants to become the ultimate product-driven infrastructure company, a modern-day railroad for the new industrial revolution. But unlike Union Pacific in the 19th century, SpaceX is also looking to own the supply chain and at least some of the factories along the route.Musk has sold investors on hard things in the past. In Tesla's 16 years as a public company, he's driven the market cap up on a promise of humanoid robots and self-driving cars. "We've been feeling over the last few years a lot of pressure from everyday Americans and our friends that wanted to buy stock, and there was just no way for these folks to get in," said Shotwell. Convergence of space and AI  Shotwell stressed that SpaceX's horizons are very long term. "I do not want to focus on quarterly earnings," she said. "I'm not saying we're not going to do right by our investors, but what folks who invest in SpaceX need to know is that what we're doing is very futuristic."SpaceX's clearest moat is in rocket launching. Its Falcon fleet currently dominates that market, accounting for roughly 80% of global mass launched to orbit since 2023. Last year SpaceX launched 165 orbital missions, with 157 of those utilizing reused rocket boosters. The cost to send cargo to low Earth orbit has fallen by more than 90% from the Space Shuttle to the Falcon 9.Most of those launches, have been by SpaceX for SpaceX, as the company rapidly deploys its Starlink broadband constellation. With more than 10 million subscribers accessing the internet via a constellation of roughly 9,600 satellites and growing, Starlink is the company's profit engine. The connectivity segment also includes the nascent Starlink Mobile direct-to-cell business and Starshield, which military experts say is reshaping warfighting.Connectivity touts high margins and generates cash for heavy investments in other parts of the company. That's especially important for the AI segment, which is primarily xAI after SpaceX acquired that part of Musk's empire earlier this year. SpaceX said capital expenditures for AI totaled $12.7 billion in 2025 and $7.7 billion in the first quarter of 2026. With xAI comes the Grok large language model and X, formerly known as Twitter. And to entice developers, the company struck a deal with AI coding upstart Cursor, with an option to buy the business for $60 billion in stock.Then there's the Terafab semiconductor fab and computing mega project that it's jointly developing with Tesla. Intel recently signed on as a partner and supplier. The cost of Terafab is expected to ultimately run into the hundreds of billions of dollars.And in and around Memphis, Tennessee, SpaceX has the Colossus data centers. SpaceX has recently been striking multibillion-dollar deals, first with Anthropic and then with Google, to provide them with spare compute capacity. The monthly payments, as long as they exist, will help SpaceX offset its hefty capital spending."I see us not only building the tech stack required for AI and operating the X platform, but we are builders of data centers, both here on Earth and in space," said Shotwell. "I believe we will continue to provide that capability to others actually. We will never sell compute capacity that we actually need, which is why we wanted the ability to have these contracts be short term if necessary." Cloud infrastructure is a highly competitive business. SpaceX is betting it moves into orbit, solving for a number of big earthy issues like scarcity of power, land and water preservation, and community pushback.  watch nowVIDEO0:4600:46SpaceX President Gwynne Shotwell details Starbase's growth: 'It's expanding'News Videos Musk has said it will happen in the next two to three years. Other space entrepreneurs like Jeff Bezos, Planet Labs' Will Marshall and Voyager Technologies' Dylan Taylor, have recently argued it will take longer. There are technological challenges and manufacturing hurdles, and launch prices still need to fall dramatically.Yet, SpaceX's prospectus says that as soon as 2028, it will begin deploying AI compute satellites. Reports surfaced this week that the first demonstrations could head to orbit before the end of 2027. "The AI satellites are, to some extent, simpler than the next-gen V3 Starlink satellites," said Shotwell. "I'm not saying it's a slam dunk by any stretch but I'm not worried about the development of the AI satellites."The supply chain, she acknowledges, is a challenge, whether it's investing in solar arrays or in building enough chips. "I don't think the chip manufacturers are thinking about scaling in the same ways that we're thinking about scaling," Shotwell said. "Or they don't believe us." Starship is the launchpad for growth Much of SpaceX's future hinges on Starship. It's one of the two vehicles contracted by NASA to provide the Artemis program's human lunar landing systems. It's also the system that could one day carry cargo and people to Mars.Starship is SpaceX's next-generation spaceship, taller then the Statue of Liberty and more powerful than any other rocket built. Unlike the workhorse Falcon 9, Starship is being designed to be fully reusable, the holy grail of space launch. SpaceX recently completed its 12th test flight, debuting its newest version of Starship, known as V3, in what was a largely successful mission. SpaceX carries out each test aggressively, pushing its vehicles to the limits since leadership believes much more data can be gleaned from failures than success, a strategy sometimes referred to as "productive failure."When Starship comes online, it will exponentially increase mass to orbit while slashing launch costs, a necessary equation to make possible data centers in space. The expectation is Starship will enable a 95% drop in launch costs compared with Falcon 9. Walking through the factory, Shotwell pointed out Starships and Super Heavy boosters in various stages of production. Currently SpaceX is turning out one fully assembled Starship per month. Shotwell wants to get to two ships produced per week.She expects Flight 13 to happen in about a month, with regular flights monthly to follow. A lot needs to go right, though, and much of that timeline depends on the regulatory blessing of the Federal Aviation Administration. Orbital flights are expected by the end of this year."We have done an in-space Raptor lighting, so we feel pretty comfortable," Shotwell said. "But we want another sub-orbital shot on the next flight, and then I hope we at least attempt an orbital injection on Flight 14." watch nowVIDEO0:5500:55SpaceX President Gwynne Shotwell on the company's speed of innovationNews Videos Starship has cost $15 billion so far, money spent on technical development, ramping up the production line, construction costs at Starbase and the launch pad as well as natural gas pipelines and wells. SpaceX develops propellant in-house. Shotwell said SpaceX's history of heavy investment in new technology enables it to undergo this "next-level" cycle with confidence. "If I were to go back to the penurious days of Falcon 9 and Dragon, and we were to talk about the capital investments for that program compared to what we're doing in AI, it would be a total mind blow situation," she said. The expanding Musk universe In its first 23 years, SpaceX did very little deal-making. That began to change last year when SpaceX agreed to acquire Echostar's 65 megahertz of spectrum for $17 billion to help propel Starlink Mobile. Then came the deal for xAI at a $250 billion valuation and the Cursor agreement, which carries a potential price tag of $60 billion."It's a new exciting world for us," said Shotwell. "I do think M&A is in the future, especially when you look at the AI world."In an amended IPO filing SpaceX said it may issue "significant equity" to fund future transactions. That sparked more speculation that a merger between SpaceX and Tesla might ultimately be in the cards. Shotwell quipped that such a deal "might make Elon's life a little easier.""There's no question that there are synergies between Tesla and SpaceX in our futures," she said. "There's a convergence of what we're all trying to accomplish in the future, but right now I'm focused on keeping the lights on here, keeping rockets in production, flying rockets, flying people, getting to the International Space Station, and critically providing broadband to folks that don't have access."Tesla holds an ownership stake in SpaceX. Starlink mini is a critical component for Tesla's emerging Cybercab fleet. Tesla over the years has shared manufacturing innovations with SpaceX. And now the two are collaborating on Terafab. SpaceX even spent $131 million on Cybertrucks in 2025.The merger chatter has been fueled in part by SpaceX's unconventional, and some experts say, unprecedented, governance structure. Musk has supermajority voting rights, with more than 80% control. And with power over the board, he even has final approval regarding his own removal. Shotwell argued it's the best way to govern because nobody else can run the company."The company would not collapse, obviously, without Elon, but it would by no means be the same," she said. "It's incredibly important that he is the CEO, and that we have the governance structure that we've set forth." The ultimate goal, for Musk, remains Mars. Musk's compensation package involves 1 billion performance-based shares when certain milestones are met, including the establishment of a permanent human colony of at least 1 million humans on Mars. "I'm sure there's at least that many folks that want to go there," said Shotwell. In the meantime, SpaceX and its new public investors will focus on the IPO moonshot that will make its own kind of human history.WATCH: SpaceX IPO is emblematic of space economy watch nowVIDEO4:2104:21SpaceX IPO is emblematic of space economy future: Alumni Ventures' RippyFast Money Correction: This article has been updated to reflect that SpaceX is reportedly looking to launch demonstrations of AI compute satellites by the end of 2027. An earlier version of this story misstated the year. Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

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Exports to the U.S. surged the most since March 2021, extending a rebound following a long streak of double-digit declines for the most of last year. View More

SHENZHEN, CHINA - MAY 1: The Chinese national flag is seen in front of stacked shipping containers bearing MSC (Mediterranean Shipping Company), Maersk, and Hamburg Süd branding at Yantian Port on May 1, 2026, in Shenzhen, Guangdong Province, China. Cheng Xin | Getty Images News | Getty Images China's trade growth held up better than expected in May, as surging AI-related exports helped buffer the economy against disruption from the Iran war, with U.S.-bound shipment logging the strongest jump in five years. Overall exports rose 19.4% from a year earlier in U.S. dollar value terms, customs data showed Tuesday, accelerating from the 14.1% gain in April. Economists polled by Reuters had pegged growth at 15%. "The war is boosting demand for green exports, such as electric vehicles, batteries, solar products, and AI-related technology goods," said Sheana Yue, senior economist at Oxford Economics, expecting the outperformance in high-tech product export growth to persist.Overall exports of integrated circuits soared 110% in terms of value from a year earlier, in part driven by unit price surges. Outbound shipment of high-tech goods surged 50% in May from a year ago, while imports jumped 47% by value.Shipments to the U.S. soared nearly 35.4% in May from a year earlier, the highest growth since March 2021, according to Wind Information, extending a rebound following a long streak of double-digit declines for the most of last year, pressured by President Donald Trump's tariffs. China's tariff disadvantage vis-à-vis Southeast Asia nations has also narrowed, providing a tailwind for exports, said Tianchen Xu, senior economist at the Economist Intelligence Unit. Any additional tariffs imposed on Chinese goods under Trump's Section 301 review will likely be smaller than those facing rival exporters, giving Chinese manufacturers a further competitive edge, Xu added. Import growth momentum continued to build, expanding 27.4% in May, picking up from the 25.3% rise in April, beating economists' forecast for a 25% growth. That boosted the trade surplus to $105.4 billion in May. In the first five months this year, China's import growth has accelerated sharply, rising 24.5% from a year earlier, outpacing 15.5% export gains over the same period, narrowing the trade surplus from a year earlier. The import surge has largely been driven by higher input costs and narrowly concentrated in select categories, particularly semiconductor chips and gold, but "hardly a sign of rebalancing," according to economists at Bank of America Global Research. "With weak overall demand and ongoing domestic substitution, genuine trade rebalancing remains distant," BofA economists said, adding that the export boom has reduced Beijing's urgency for meaningful policy stimulus. China's economy has shown signs of faltering following a strong first-quarter. Growth slowed across the board in April, with industrial production and retail sales posting their weakest gains in years. In May, the official gauge on manufacturing activity also slowed to 50, the threshold separating expansion from contraction. Stockpiling and AI boost Chinese exporters have so far weathered the fallout from the Middle East conflict, with overseas buyers rushing to lock in supplies before energy costs climb further. But economists have warned the tailwind may be short-lived — once overseas stockpiling momentum fades, sluggish domestic consumption will be unable to fill the gap. "We expect the AI boom to support production and trade," said Xiangrong Yu, chief China economist at Citi Bank, as higher prices for tech and semiconductor goods boost headline growth. But "domestic demand could show continued weakness," Yu added. Yu anticipates retail sales growth, a gauge on consumption, may fall to zero in May on fading impact from trade-in subsidies, further slowing from the three-year low of 0.2% growth in April. watch nowVIDEO2:2702:27Why China’s 'involution' could outweigh K-shaped growth concernsThe China Connection A persistently weak jobs market has also compounded the pressure on consumer spending. "Despite soaring exports, the number of manufacturing jobs continues to contract," said Frederic Neumann, chief Asia economist at HSBC Bank, as productivity gains from automation reduce demand for workers.Chinese yuan's sustained strength this year has led to some pressure on the country's exporters — who have amassed large dollar holdings over the years — as mounting foreign-exchange losses have started to weigh on profits. The offshore yuan has strengthened 2.8% this year to 6.7802 against the U.S. dollar while the onshore yuan appreciated 3% to 6.7787, according to LSEG data. Both were little moved after the release of Tuesday trade data. The CSI 300 index rose 0.6%. Uneven growth China's economy has developed into what economists called "K-speed" growth paradigm, with booming manufacturing and export sectors contrasting persistent weakness in property markets and consumer spending. Exports have remained the bright spot for the world's second-largest economy, driven by robust global demand for AI technology and renewable-energy products. While demand remains weak, rising commodity costs from disruption to energy flows through the Strait of Hormuz have helped to alleviate deflationary pressures that have plagued Chinese economy for years.Economists expect the country's producer inflation, due Wednesday, to accelerate to 3.8% in May, the strongest level in nearly four years, as manufacturers absorb the higher input costs, according to a Reuters poll. Consumer inflation is expected to rise by a modest 1.3%. China, holding roughly 15% of global oil stocks before the war broke out, could run through its oil reserves by late October if forced to draw down inventories to cover any supply shortfall, according to Fitch Ratings."Though China's stable power supply could provide a buffer, the supply shock as a result of the energy crisis will still inflict pain on China's economy via shortages and higher prices," said Jing Wang, China Economist at Nomura. Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

The idea of putting such power generation infrastructure in urban spaces is an appealing alternative to using farmland. But it distracts us from the challenge of decarbonizing an economy and the hard trade-offs that come with it. View More

The ALMM mandate now requires government-backed and large-scale solar projects to use locally made cells. Here's what it means for manufacturing, project costs, power tariffs and India's clean-energy ambitions. View More

Chinese electric vehicles are likely to be sold in the U.S. within years, despite tariffs, strict laws and opposition from the auto industry and politicians. View More

In this articleSTLAGMFollow your favorite stocksCREATE FREE ACCOUNT EVs are prepared for export overseas through frame transportation in Taicang Port Area, Suzhou Port, Jiangsu Province, China, on May 11, 2026.Costfoto | Nurphoto | Getty Images Chinese electric vehicles face crippling tariffs, stringent regulations and fierce opposition from lawmakers and the American auto industry, but there's a growing possibility that Chinese EVs will be sold in the U.S. within the next few years. China has deliberately and aggressively expanded its EV footprint throughout Europe, the U.K., Asia and Australia, exporting millions of well designed, high-tech, and competitively priced vehicles, building factories and widening supply chains. Now, it's set its sights on Western nations, especially the U.S. — the world's second-largest automotive market after its own — which has significantly retreated from its own EV ambitions. Therein lies an existential conundrum facing the Big Three — General Motors, Ford and Stellantis. While they continue to offer a limited number of EVs, they're primarily focused on producing and selling internal combustion engine vehicles, while many auto experts concur that EVs are the future of the global auto industry and that China is poised to control the market. "U.S. companies have stepped back from a lot of their electric vehicle campaigns, because they haven't been able to develop, in an inexpensive way, a compelling value proposition for U.S. consumers," said Stephen Dyer, a managing director in the automotive and industrial practice at AlixPartners. But if EVs are the future, he said, "You can't be competitive if you're not in the game." Nor can the Big Three rest on their laurels. "Detroit automakers perfected the business of manufacturing traditional vehicles powered by gasoline engines," said Michael Dunne, CEO of Dunne Insights, a consultancy that focuses on EVs and autonomous vehicles. But when they were confronted with the dramatic shift to electrification and autonomy, "they've struggled to make the transition." In the meantime, Dunne said, "China has a master plan to dominate the global EV market, including cars, trucks and the batteries that power them." At the turn of the century, China produced fewer than a million cars a year, he said, but by 2010 had surpassed the U.S. in terms of market size and production.  While the opportunity to beat the Chinese juggernaut may be slipping away, in the long run the most viable way to remain relevant and competitive may be to join them. Because direct imports of Chinese-made EVs into the U.S. seems highly unlikely, allowing them to be manufactured here is becoming a realistic option. In January, President Donald Trump expressed support for letting China set up shop in the U.S. as long as they employed American workers. The remark led to wide speculation that the issue would be raised at the recent Beijing summit with Xi Jinping, yet there are no reports that it came up. Among the entourage of CEOs that accompanied Trump, the only auto executive was Tesla's Elon Musk, whose company has a presence in China, though it is far behind domestic leader BYD.China remains the world's largest hub for manufacturing and trade of electric cars, capturing nearly 75% and 40% of the respective global totals. Primarily led by domestic carmakers, China's 2025 production of 16 million electric cars outstripped domestic demand by 20%, according to the International Energy Agency, pushing Chinese electric car exports to double to a record high of more than 2.5 million – the primary driver of its growth in car exports. In 2025, electric models represented more than 35% of all Chinese car exports, up from about 20% the year before."The only market in the world they have not yet penetrated is the United States," Dunne said. (function(){function e(){window.addEventListener(`message`,function(e){if(e.data[`datawrapper-height`]!==void 0){var t=document.querySelectorAll(`iframe`);for(var n in e.data[`datawrapper-height`])for(var r=0,i;i=t[r];r++)if(i.contentWindow===e.source){var a=e.data[`datawrapper-height`][n]+`px`;i.style.height=a}}})}e()})(); Regardless, existing regulatory restrictions on Chinese-developed software and hardware in American-built EVs' connected or autonomous systems would have to be overcome. Plus, a Senate bill to permanently ban Chinese automakers from the U.S. has been introduced by Senators Bernie Moreno (R-Ohio) and Elissa Slotkin (D-Mich.).A more likely avenue is through collaborations between U.S. and Chinese car companies. "I think the end game for a lot of the Chinese automakers is to have their independent, wholly owned assembly operations and businesses in the U.S. eventually, but they'd be willing to take that intermediate step," Dyer said."Legacy automakers understand the threat and a lot of them now have partnerships," said Adam Bernard, founder of the consulting firm AutoPerspectives and a former associate director of competitor intelligence at General Motors, citing deals that  Ford, GM and Stellantis have with Chinese automakers. Ford — whose CEO Jim Farley has admitted that he enjoys driving a Xiaomi SU7 sedan — is reportedly in talks with China's Zhejiang Geely Holding Group to create a European partnership and, according to The Wall Street Journal, "also appears to be opening the door to allowing Chinese cars in the U.S. at some point."Meanwhile, Ford is pushing ahead with the development of its Universal Electric Vehicle, or UEV, platform, which will debut with a $30,000 midsize electric pickup truck, set to launch next year. The automaker's all-electric F-150 Lightning, introduced in 2021, failed to meet expectations and is being redesigned as a hybrid.  GM imports EV battery cells made by China's CATL for use in its Chevy Bolt EV, which is manufactured at GM's Fairfax assembly plant in Kansas City, Kansas. The company also operates a facility in Coahuila, Mexico, where it builds several of its branded EVs, including the Equinox, Blazer and Cadillac Optiq. Those vehicles, however, are not subject to tariffs, due to the the United States-Mexico-Canada Agreement, which allows for duty-free trade of vehicles assembled in North America. GM and its long-standing joint venture in China, SAIC-GM-Wuling, are in advanced negotiations to begin manufacturing ICE vehicles in Mexico. GM and Ford did not respond to requests for comment.  Bernard also pointed out that China's Zhejiang Geely Holding Group acquired Volvo from Ford in 2010 and later launched the EV brand Polestar. Both are produced at the Volvo factory near Charleston, South Carolina, which Geely is eying to expand to produce more EVs. "I don't think it would be a big problem for them to adapt that plant to some other Geely platforms," Bernard said. A prime candidate would be Zeekr, another Chinese brand Geely controls and that Alphabet-owned Waymo uses for its robotaxi fleet in San Francisco.  Volvo recently received approval from the U.S. ​government to continue selling vehicles that use Chinese-developed and maintained software, after the rule put in place by the Biden administration took effect in March ​2026 and covered companies with significant Chinese ownership. Workers check vehicle frames on the production line for electric vehicle maker Zeekr at its factory on May 29, 2025, in Ningbo, China.Kevin Frayer | Getty Images News | Getty Images The importing of Chinese EV brands to North American is already happening in Mexico and Canada. In Mexico, Chinese vehicles account for a quarter of total sales, yet that number may drop after Mexico imposed a 50% tariff earlier this year. Conversely, Canadian Prime Minister Mark Carney signed a deal in January permitting up to 49,000 Chinese-built EVs into the country annually at a 6.1% tariff rate. Stellantis — which owns Dodge, Chrysler, Jeep and Ram, plus numerous European brands — is the largest shareholder of Zhejiang Leapmotor Technology Co., with a 21% stake, and a 51% majority owner of a joint venture with the Chinese automaker. During a recent news conference, Stellantis CEO Antonio Filosa said the company "for sure" sees opportunity in expanding its production and sale of vehicles with Leapmotor in Mexico and potentially Canada. "I believe that there is space in Mexico. … There is maybe space in Canada. We'll see," he said.  Stellantis declined to elaborate on its partnership with Leapmotor. Beyond the Stellantis-Leapmotor collaboration, other automakers are pursuing plans to build facilities in North American countries. Under U.S. pressure, Mexico backed away from a plan to let BYD build a factory on its soil, but BYD and Geely are reportedly among finalists vying to purchase a Nissan–Mercedes-Benz plant in Mexico. In April, Guangzhou Automobile Group Co. announced plans to begin assembling vehicles there in the second half of this year. BYD's executive vice president Stella Li said in March that the company is considering building a wholly owned factory in Canada and possibly acquiring a struggling legacy automaker. "We're open to every opportunity we have," Li said, without offering any specifics. Trump's trade war and new deal with Canada, Mexico loom largeWhether those developments end up opening a backdoor opportunity for importing Chinese EVs into the U.S. remains to be seen, considering several existing obstacles more concrete than the dozens of lawmakers from both sides of the aisle and auto-industry groups who have petitioned Trump to prevent imports of Chinese vehicles assembled in Mexico or Canada. For example, the tariff on vehicles made in both countries is 25%, substantially lower than the cumulative 125% rate for Chinese EVs, but still a cost contributor. Under the existing North American trade agreement, USMCA, a vehicle assembled in Mexico or Canada can enter the U.S. with preferential tariff treatment only if 75% of its contents — such as batteries, motors, electronics and software — are sourced in North America. That math, however, may have just become more complicated. This week, the Trump administration proposed a new 10% tariff on Mexico, Canada and other countries over their alleged failure to address forced labor concerns. This comes on the heels of the Supreme Court decision in February, ruling that Trump's "Liberation Day" tariffs were illegal. Furthermore, U.S. Trade Representative Jamieson Greer told CNBC this week that for any renewal of USMCA to take place — and he guaranteed there will be no "rubber stamp" renewal on July 1 — U.S. auto content requirements are a major sticking point. The Trump administration will agree to no new deal that does not include a new requirement for a specific percentage of content in cars that must be made in the U.S. While Greer said recent reporting by the Wall Street Journal that the administration is looking for a U.S. content requirement as high as 50% was inaccurate, he said it is true that the administration is focused on this issue and will be pressing it in talks. And if the U.S. doesn't get what it is looking for in the USMCA talks, "It will put us on a path to exit it eventually, if we aren't able to get into a better position," he told CNBC's Megan Casella at the CNBC CEO Council Summit in Washington, D.C. on Tuesday. Nonetheless, Chinese EVs from BYD, Geely, Great Wall and Xpeng are showing up along the U.S.-Mexico border. They've been purchased at dealerships in Mexico — some models for under $20,000 — by Mexican citizens who, in compliance with U.S. rules, can commute back and forth to El Paso, San Diego and other border cities. U.S. regulations, however, make it nearly impossible for such vehicles to be registered in the U.S. Even though it's tough for American drivers to buy a Chinese EV, no matter where it's built, many claim to be EV-curious, more so with today's sky-high gas prices caused by the war in Iran. According to a recent Kelley Blue Book study, 38% of Americans say they would consider buying a Chinese vehicle if they had the choice. "The only thing stopping [them] are the restrictions of selling into the U.S.," said Dan Ives, an analyst at Wedbush Securities.  watch nowVIDEO10:3210:32Polestar CEO sees strong EV demand since Hormuz crisisSquawk Box Europe China struggled for decades to get its domestic auto industry off the ground, but its long-term strategy to dominate the global marketplace — as it has in solar, wind, battery and other clean-energy sectors — is coming to fruition. Today, China is the world's leading auto manufacturer, with 100 or so companies producing an extensive range of fully electric, hybrid and internal-combustion engine vehicles. BYD has eclipsed EV pioneer Tesla — which began exporting into China in 2014 and has since built a mega-factory in Shanghai — as the No. 1 international brand.  In 2025, nearly 55% of all car sales in China were EVs, according to the IEA, and Chinese automakers were responsible for 60% of global EV sales. This year, China is expected to produce more than 34 million vehicles, including nearly 12 million EV models. Almost 30% of the total output will be exported.  In April alone, China shipped out more EVs and plug-in hybrids than ICE vehicles for the first time ever, according to the China Passenger Car Association. That points to the growing need for Chinese automakers to look beyond the domestic market. Manufacturing overcapacity, intensifying domestic competition and the scaling back of government subsidies resulted in a 6.8% decline in EV and hybrid year-over-year sales in China in April, while overall vehicle sales fell 21.5% from a year earlier. So, will U.S. drivers be able to buy a Chinese EV sometime in the near future? Yes, said Tu Le, founder of Sino Auto Insights, an automotive consultancy firm. "Once Canadians start to buy them in the next 18 months, [while] our Mexican neighbors already are able to buy them, the pressure is going to increase significantly," he said.  Le added that although U.S. politicians are setting up legal roadblocks to keep Chinese EVs out, they haven't articulated any plans to make our domestic automakers competitive. "It can't just be no, never," he said. "That will ultimately cripple the U.S. auto industry. It'll inflate pricing for consumers, because our technology is going to be two or three generations older than anything anyone can buy in Europe and in China." Dunne is confident that "by 2030, we will see some form of Chinese cars on American roads. One way or another, they'll find their way in," he said. Most experts concur that EVs are the future of the global auto industry and that China is poised to continue as the market leader. That may lead U.S. automakers to join forces with Chinese companies as the most viable way to stay relevant and competitive.  "I think that there will be a combination of companies that want to go it alone [or form] partnerships and joint ventures," said Le. "If I'm BYD, there's a spotlight on me because I'm a Chinese brand. So, if I come to the United States with Ford or GM, it should ease that pressure a little bit or at least deflect some of that pressure."  Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

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Iran's influence over the strategically vital Strait of Hormuz has inadvertently transformed the energy security debate. View More

In this articleFOT-FFFOT-FFFollow your favorite stocksCREATE FREE ACCOUNT In this picture obtained from Iran's ISNA news agency on June 1, 2026, Iranians sit on Suru Beach in Bandar Abbas along the Strait of Hormuz. Amirhossein Khorgooei | Afp | Getty Images HELSINKI, Finland — Iran's influence over the strategically vital Strait of Hormuz has inadvertently transformed the energy security debate, effectively casting fossil fuels rather than renewables as the primary source of vulnerability.For decades, the conventional narrative has been one in which renewables were criticized for their intermittency issues and dependence on weather conditions, whereas technologies such as coal, oil, and gas were seen as providing security. The Middle East conflict and protracted closure of the Strait of Hormuz, a waterway that typically handles around 20% of the world's global oil and liquefied natural gas supplies, have reframed this debate, however, laying bare the risks associated with fragile fossil fuel supply chains. Energy experts and the CEOs of Nordic energy giants Fortum and Statkraft made this point clear on the sidelines of the Eurelectric Power Summit in the Finnish capital this week."I mean, the big mantras, and I'm surprised we haven't heard people talking about this yet, is that fossil fuels are now intermittent and uncertain, which, of course, was the argument levelled against renewables," Kingsmill Bond, energy strategist at U.K.-based think tank Ember, told CNBC in Helsinki."Renewables, thanks to batteries, have become actually pretty constant given the sun rises every morning. So, look I think we have moved to a new environment and … we are still far too exposed to the old system – and we need to change, particularly in Europe, we need to change really quickly." Read more‘Asia’s Ukraine moment’: How the Iran war could accelerate a shift into renewablesIt’s not just Big Oil. Wind giants welcome profit beats as Iran war spurs energy pivotFossil fuel leaders herald the energy addition era: 'Music to my ears' Bond said the current energy shock marks the first time in history where policymakers have a superior alternative technology to turn to for security, comparing the situation today to the 1973 and 1979 oil crises. "If you go back to the 1970s, what did we do? We built nuclear, but that took 10 years and it was expensive. This time round, we've got solar and wind, batteries and electrification and lots of flexible technologies, which are huge and cheap and we can scale them. And that's what's happening," Bond said. What about energy addition? The U.S. and Israeli-led war against Iran has rattled global energy markets and triggered widespread inflation fears, with Asia's reliance on imported energy sitting at the forefront of the global fossil fuel crisis.Supply disruptions have also hit hard in Europe and Africa, where countries are responding to rising fuel costs and a considerable threat to food security. With no imminent reopening of the Strait of Hormuz in sight, the situation has prompted many to reflect on the extent to which the world remains deeply reliant on fossil fuel trade routes.Asked about intermittency concerns regarding imported fossil fuels, Fortum CEO Markus Rauramo said, "It's a different kind of intermittency but absolutely. So, exactly, this is our message that the solution to being dependent on imported CO2-content fuels is to actually have homegrown clean electricity."He added, "That's the way forward, but then we are very realistic. We are not naïve about the fact that yes, there's intermittency and if you have a business or your home is dependent on gas then it is a big shift." watch nowVIDEO13:2513:25Watch CNBC’s full interview with OPEC's secretary general at ADIPECAccess Middle East The evolving energy security debate comes just a few months after fossil fuel leaders had welcomed a paradigm shift in the narrative regarding the energy transition. Speaking to CNBC at the UAE's annual oil summit late last year, several fossil fuel industry players championed the concept of "energy addition" to secure supply and accommodate new demands from sectors like AI.Energy addition refers to a push to develop new technologies, such as renewables like solar and wind, in parallel with existing fossil fuels. Energy transition, by contrast, typically refers to the transfer from one energy source to another. Batteries and hydropower Birgitte Ringstad Vartdal, the chief executive of Statkraft, Europe's largest producer of renewable energy, agreed that the energy security narrative regarding clean technologies has been transformed by the conflicts in Ukraine and Iran. "And I think also another thing that has been developing over this period is the batteries, right? So, they are much cheaper and they have longer duration for how long they can store," Vartdal said. Workers install rooftop solar panels on a house on May 13, 2026 in Ho Chi Minh City, Vietnam. Vietnam is expanding rooftop solar adoption as part of a broader push toward renewable energy and long-term energy security.Thanh Hue | Getty Images News | Getty Images Batteries are seen as a way to mitigate the intermittency of renewable energy projects by soaking up surplus electricity when generation is high and discharging it when production dips. "For some countries, you can see that while in the past you had these shoulder hours in the morning and the evening, they can now much more be taken over by batteries. So, batteries plus solar or batteries plus solar and wind can provide a much more total generation as well."Shoulder hours refer to the blocks in the day that sit between peak energy demand and off-peak times.The challenge of intermittency in Norway, which holds a reputation as the gold standard for renewable hydropower, has not been an issue in the same way it has for others in Europe, Vartdal said, before adding that "variability is key" in the security debate."In the end, we believe that you need some gas in the system to take the long periods of low production," Vartdal said. Europe's pivot to U.S. LNG While the Iran war may have moved the needle in the conventional energy security narrative, pivots to alternative energy sources during times of conflict can pose challenges. Some have raised the alarm about Europe's rush to U.S. LNG following Russia's full-scale invasion of Ukraine in early 2022. The LNG tanker HL SEA EAGLE unloads liquefied natural gas from the Sabine Pass LNG terminal in the United States at the Revithoussa terminal near Athens, Greece, on March 28, 2026.Nurphoto | Nurphoto | Getty Images "Moving forward, we're going to have a lot more LNG in Europe, and a lot of that LNG will now come from the U.S., given the Strait of Hormuz situation," Jan Rosenow, professor of energy and climate policy at the U.K.'s University of Oxford, told CNBC."And that means we are then exposed to one country that is currently seen as rather unstable politically when it comes to international relations, so a very problematic situation indeed. And domestically generated electricity from renewables doesn't face that problem." Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.