Chinas BYD sues Trump over auto tariffs, demands billions of dollars in refunds

BYD has filed a lawsuit against the U.S. government, going after billions in tariff refunds and directly challenging Donald Trumps decision to use emergency powers to slap new taxes on imports.

The case, filed January 26 at the U.S. Court of International Trade in New York, argues that Trump had no legal ground to use the International Emergency Economic Powers Act (IEEPA) to justify these border taxes.

This is the first time a Chinese automaker has sued the U.S. over tariffs. Four BYD subsidiaries in the U.S. say the IEEPA doesn‘t actually allow for tariffs at all. Their legal filing says, “the text of IEEPA does not employ the word ’tariff or any term of equivalent meaning.”

The company says it had to file the suit to make sure it can recover the money it already paid. It wants all of it back. No rounding, no compromise.

The case is happening while the U.S. Supreme Court is also reviewing whether Trumps tariff program is even legal. Trade Representative Jamieson Greer said last week the court is moving slowly because the case could change everything.

“The stakes are enormous,” he said. And yeah, BYD is watching that closely. But they‘re not waiting. They’ve filed separately to make sure they dont miss out on any refund opportunities if the Supreme Court rules against Trump.

Even though BYD doesn‘t sell passenger cars in the U.S., it’s got plenty of business in the country. Its U.S. operations include commercial trucks, buses, solar panels, batteries, and energy storage tech. BYD North America runs a plant in Lancaster, California, where about 750 people work.

Trump, now the 47th president of the United States after winning the 2024 election, has said Chinese cars are a “threat” to the future of the U.S. auto industry. But he‘s also said that if a Chinese company wants to build in the U.S., he’d be fine with that. Well, BYD is doing exactly that, and still got hit with tariffs.

The court case is listed as No. 26-00847, and its becoming a major piece of the wider tariff backlash coming from global companies. Thousands of firms operating in the U.S. have already filed similar challenges.

While the lawsuit grabs headlines, BYD isn‘t slowing down on the tech side either. It’s made real progress on sulfide-based solid-state batteries.

The company says it‘s improved fast-charging and battery life, with limited production expected to start in 2027. Its investor relations team said that sulfide electrolytes are a big focus, and they’re testing different approaches.

At the 2025 Solid-State Battery Forum in China, BYDs lithium battery CTO said these new batteries might eventually cost the same as regular ones. That would be huge. The plan is to start using solid-state batteries in test vehicles by 2027 and go big after 2030.

Thats not all. BYD is also building a third-gen sodium-ion battery platform. Reports say it can handle up to 10,000 charge cycles. Commercial rollout will depend on demand and how customers want to use it. The company is clearly trying to cover all angles, working on both lithium and sodium battery tech at the same time.

Meanwhile, BYD keeps gaining ground on Tesla in Europe. Sales data from ACEA, the European car industry group, show BYD tripled its new car registrations in December to 27,678. For the whole year, it hit 187,657. Tesla dropped 20% in December and fell 27% for the year to 238,656 units. So while Tesla still sold more, the gap is closing fast.

BYD‘s rise in Europe is no accident. Its lineup of cheap electric and hybrid vehicles has started eating into the market share of brands like Volkswagen and Tesla. No one’s safe.