Will China upend the US car market? Waymo?

I'm a ready to be an early adopter. I want a BYD!

The Race to Remake the U.S. Auto Market

Will Chinese cars, autonomous cars or click-to-buy cars win in the next decade?

By Andy Kessler, WSJ

Nov. 8, 2026 1:35 pm ET

You know the 80/20 rule, but I prefer 20/80. I’ve noticed that in the consumer-technology world, if something gets to 20% market share, it will likely get to 80%—think of VHS players, CDs, PCs, smartphones. A lively lunchtime discussion with Quin Garcia from Autotech Ventures turned into a friendly bet over which would happen first: Chinese automakers capture 20% of U.S. car sales, or fully autonomous vehicles account for 20% of cars shipped each year.

Mr. Garcia makes the case for Chinese cars: “Almost 20% of cars sold in Mexico last year were built in China. In Israel and Hong Kong, Chinese brands are well past that.” In Europe, as of September, Chinese cars had a nearly 15% market share. He thought Americans traveling abroad, and those who lived near the border, would see Chinese-made BYD (Build Your Dream) and Chery cars and want one.

I’m skeptical. I’m all for free trade, including autos, but the politics are ugly. Both political parties love tariffs. Donald Trump 1.0 imposed 27.5% tariffs on Chinese electric vehicles. Joe Biden raised the Section 301 tariff to 100%, citing the need “to protect American workers and businesses.” More like to protect Detroit and the United Auto Workers, at the expense of every other American not being allowed to buy inexpensive cars. In China, an electric BYD Seagull with five-minute flash-charging costs $9,500. I’d buy one.

I suspect Donald Trump, who kept the 100% blocking auto tariffs for Trump 2.0, would encourage China to build factories in America. “If Chinese brands reach 20% here,” Mr. Garcia says, “most of those cars will be built in American plants.” But other rules would need to change. Data-security concerns stop China from selling connected “smart cars” or parts in the U.S. All new cars are connected. Mr. Trump also added dumb tariffs on raw materials like steel, aluminum and batteries.

If Chinese cars arrive only a little bit cheaper than those already on the market, not much would change. But if they were 30% to 50% cheaper, I could see China getting to 20% market share. It would take serious political change to drop restrictions. Still, a decade is a long time. Mr. Garcia could be right.

I took the side of 20% autonomous cars. I get a glimpse of this, as Waymo self-driving cars are all over the Bay Area. But the real reason is auto insurance premiums, which are getting out of hand. As part of the inflation data, car insurance is up more than 50% since the start of 2022. Oddly, one of the reasons is driver convenience and safety equipment.

Advanced Driver Assistance Systems enable automatic braking, adaptive cruise control and blind spot monitoring. They aren’t cheap. “ADAS is making small crashes expensive,” Mr. Garcia says. “The radar and cameras sit behind the bumper, so a fender-bender that used to cost a few hundred dollars can now run several thousand once the sensors are replaced and recalibrated.” Even five grand, or more.

Here’s where it gets interesting. Waymo ran a 25-million-mile study and found that claims for property damage dropped 88% and for bodily injury, 92%. The driver (pardon the pun) for autonomous car adoption may be economic rather than convenience.

Sure, autonomous cars aren’t ready for prime time. But this is a 10-year wager. I told Mr. Garcia in a few years I could imagine Geico and Progressive going to General Motors and Ford and saying they plan to double or triple car-insurance rates for human-driving cars and cut them in half for self-driving versions. The conversion would happen quickly. Mr. Garcia told me that’s somewhat already happening: “In some states, Lemonade now cuts its insurance rate in half for the miles a Tesla drives on Full Self-Driving.” Tesla tracks these statistics. Mr. Garcia was making my case!

Then he said: “There is another trend that could hit 20% market share: online car sales.” I wasn’t sure how that would happen. “Carvana, the used-car vendor, bought seven Stellantis dealerships and sells new cars from them online. One small store in Arizona became the top Stellantis dealer in the country.” Sure enough, the Casa Grande, Ariz., Stellantis dealer went from selling 50 cars a month to almost 1,000 by selling online, nationwide. It is a big buyer of Google vehicle ads.

Can 20% of cars sold happen via clicks? The buying process is headed that way. Mr. Garcia notes that there are problems as well as opportunities. “You can sell a car online,” he says. “But you can’t fix one online, and service and parts are where dealers make roughly half their gross profit.”

So which bet would you take for 20% (on its way to 80%) share: Chinese cars, autonomous cars or click-to-buy cars? Actually, all three could happen.

Write to kessler@wsj.com.