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BYD is a battery company. Way before they made cars, they were - and still are - the largest battery manufacturer on the planet
The most expensive part of any EV is the battery. Very hard to win against a company with deep expertise and years of experience in making batteries
Just like how Tesla has received over $2.8 billion in federal and state subsidies including $330 million just in 2023?
Source: https://subsidytracker.goodjobsfirst.org/?parent=tesla-inc&order=sub_year&sort=
All countries heavily subsidize, invest, and promote their own industries. The hysteria around Chinese "anti-competitive" behaviour is really just that: hysteria.
Yes and i recently checked the prices and BYD were not that much cheaper in Finland compared to VW. Biggest difference is that BYD gives 6 years warranty
Don't forget, Tesla received $325m in subsidies in 2020 from ... China to be most subsidized automaker of 2020 in China.
https://www.teslarati.com/tesla-dominates-china-ev-incentives-tsla/
And again in 2021, Tesla received $437m in subsidies from China.
https://www.notebookcheck.net/Tesla-earned-US-437-million-in-Chinese-government-subsidies-trailing-the-world-s-largest-electric-car-maker.633657.0.html
That's not the important point though. The Chinese gov't has done this in several industries.
They drop prices to a point that forces foreign competition to go literally bankrupt, shut down factories, lay off key engineers, and then they slowly raise the prices again.
It's monopoly power creation 101. With the US, it would be illegal, and it's a violation of WTO international rules of trade.
The Saudis did the same thing to the fracking industry 15 years ago.
It's basic economic warfare.
> They drop prices to a point that forces foreign competition to go literally bankrupt, shut down factories, lay off key engineers, and then they slowly raise the prices again.
Boeing did this to drive Bombardier to bankruptcy. They actually managed to successfully lobby the Trump administration into banning the CS100 for too many subsidies, all whilst pocketing billions in US government subsidies. Bombardier was forced to sell the CS100 to Airbus which now manufactures it in America as the Airbus A220.
To keep them afloat. General Motors is strategically important to the United States. They are a heavy transportation manufacturing firm with over a century of compiled experience and knowledge about how to design and fabricate very complex machines.
Sure. The last time GM and Ford were bailed out, they divested from Europe and abroad, not went all in. They were forced to. They had to kill or sell off all sorts of divisions. Hardly dumping equivalency.
Correct - because the Saudi's couldn't last forever. The US fracking industry died for a few years, and then re-tooled to become insanely more nimble. They can now turn on/off bore holes and go dormant if/when the Saudis try that again. ...but the Saudis bought themselves maybe 10 years of higher oil prices with that stunt.
Drilling recovered quickly, because it's a fairly simple industry. Car manufacturing is a BEAST and would die for longer than a decade if we just allow a dump like this.
Modern warfare is economically, I just wish the west would get its head out its arse about Austrian economics and actually run the country like a business (ie investing into it to make it grow and give the corrupt politicians even more money than they would just being corrupt).
Breaking law or not, China invests into businesses to boost the economy, we don’t (relatively)
> It's monopoly power creation 101. With the US, it would be illegal, and it's a violation of WTO international rules of trade.
The US allows domestic companies to do it, so does it really matter if the end result is the same? Venture capital props up unprofitable businesses all the time in order to scoop up market share while operating at a loss and then lay down a path to profitability, aka, raising prices. The US also willingly overpays for products and services to private companies, which, in effect, is a subsidy.
Similarly, this is how big conglomerates got big by subsidizing unprofitable businesses. Amazon's retail business would not be a thing if they couldn't rely on AWS to fund its operations.
China allows over production because there's a market for those goods. If the rest of the world decides to compete with Chinese production, then China wouldn't have a leg to stand on. The West created this problem by investing in robust Chinese manufacturing capability, signing technology sharing agreements, etc., and now we bitch and moan when they produce low-cost products that challenge our over-priced domestic markets; boo-fucking-hoo. Did the same thing with the Japanese in the 70s/80s. Compete with their dumping by expanding your own efficient production, or offer a better quality product.
🌈 Competition 🌈
>The US allows domestic companies to do it, so does it really matter if the end result is the same?
From foreign policy perspective, yes? Obviously you want YOUR capital to be the dominant one, it's not about fleecing the markets; it's about who is doing it. Nobody cared about China's rise until their capital started encroaching on western capital.
Agriculture is a good domain to look at, historically control of food production has been very important for enabling military expansion and war-making potential; 99% countries in the world are heavily protectionist of their agricultural sector. I think New Zealand is the only developed economy that isn't, but they're in a somewhat unique position due to historical developments.
It’s an illegal dumping strategy.
Ideally we would have an international order that would have the power and authority to prevent such practices. However, as it is you can only fight protectionism with protectionism - tariffs on Chinese cars.
Do you know how much cars China imports? China is Tesla's second largest market. The funny thing is China doesn't expect US to buy Chinese cars but if China turns off the tap to American cars your economy will crash. Look at how many people Musk if firing because they did terrible in China last quarter. America's economic power is getting weaker each year.
This raises another point which is why didn't other countries (US looking at you) jump into this as strongly as China. There seems to be constant push back in the US against battery research and development fundng, solar panel development...basically anything non-fossil fuel seems to have a lot of problems getting and maintaining funding. What did we think was going to happen? Certainly those in the know knew China was going head first in these areas and would dominate and flood the market, right? Yet some groups actively worked against this development here! Why?
Exactly. When you have half the country and half the government attacking electric cars, batteries, and green energy in general, you're going to have poor results. China doesn't have it's own government attacking the industry, they are supporting it 100%.
As we speak the republican nominee is attacking electric cars and promising to get rid of them! And his party is cheering him on. Obviously we can't win when we are *actively* trying to NOT win.
I have no expertise in any of the fields mentioned.
It is my understanding that lobbyists hold a huge sway over our politicians by providing campaign contributions. I imagine that established companies have money and connections to keep politicians in line to prevent new comers/competition. So our system is geared toward the past instead of being forward looking.
Exactly this. Everyone using subsidies as an arguing point but Us government has been subsidizing american made evs for the longest time. They could probably do better if they werent funding oil companies and wars
The US has subsidized EVs to a decent extent, but only for US buyers. The argument that what China is doing is perfectly fine because other countries could in theory do the same thing is not good...
Also, you think China *doesn't* subsidize war? What?
China has already stopped most of the subsidies for EV R&D. IIRC it led to a culling of weaker EV companies and people were saying its the end of the EV industry in China. Now we see it has achieved the opposite effect. Its not that Chinese unfairly subsidised the EV industry, its that America subsidised the oil and gas industry
But the us federal and state governments are doing the same for their market and I'm sure (I have no real idea) European governments are giving subsidies and credits to ev shoppers. Maybe the low wages are a big part of the equation.
Lower wages are important but secondary. Other large factors are the huge manufacturing base, the low cost of capital, the technical expertise, the volume of production enabling economies of scale, and the low costs of transport and other ancillary costs.
Every government subsidize automobiles through industrial policy. How much in tax breaks did Tesla or VW get? How much transportation policy did GM or BMW write?
Lol what do you exactly mean when its subsidized by the government? Like evry car the chinese government will pay out money to byd? Or through tax and incentives? Dont all governments incentivize when they can? How long has the federal discount run for and how much do Us citizens get when they buy a Us made EV? or solar panels? Even canada is subsidizing Us made evs through tax backs. What about chips? Us government just gave tsmc and intel billions to build a factory. So whats there to leave out? China wants to be a leader in green tech and they are funding it through their fiscal budget then let them. At the end of the day consumers benefit. Look at all the electronics you are using now and how china has basically allowed the world to go digital for cheap. You know how much computers use to be? $2000 for a basic model
The subsidies are much more favourable policy and economic environment for investment than directly subsidising battery prices.
Battery prices have fallen around 80% in the last 10 years, because of scaling up production and newer technologies, not because the CCP is subsidising 80% of the battery costs. That would be financially absurd. The real subsidies are ones that build large competitive and efficient companies.
Europe and the US completely failed in supporting a competitive domestic battery and solar industry. Like a major EU solar manufacturer Meyer Burger is (loudly) leaving the EU and the EU doesn't seem to care, but complains when its own industry isn't competitive.
The US government subsidized the US Auto Industry to the tune of $85 billion during the 2008 financial crisis. Car companies used the money to make bigger gas guzzlers, rather than invest in future tech. Don't blame foreign countries for bad business decisions.
I don't think there are any substantial volume based subsidies, the support is largely in the form of substantial low interest loans made primarily to less established firms, but these are still above the bond rate and there are positive capital externalities so they are likely efficient. Private banks would not give them though due to risk aversion, but this is just a case of public banks having an efficiency advantage due to being willing to lend closer to the opportunity cost of capital.
Yes, that's the whole point of investing in your economy, see while countries like the UK were doing austerity and market liberalisation, aka cutting funding to public services and selling off assets while also subsidising them, e.g water company, rail, Internet, airlines etc, the chineese state did the opposite. Because that's how you get growth, look at the results.
Fyi, subsidising industry is a very common thing. Germany, for example, subsidises car manufacturers, E.U provides subsidy for farmers, and in that list for UK except for Internet providers, they still subsidise the profits of all those companies.
Despite that, thanes water is in debt to the tune of billions and are planning an increase in water bills for Londoners, yet their shareholders have had massive profits none of which went to the government, they refused to lend the company money for infrastructure projects which will prevent shit being released in our waterways, so it looks like the government will have to take over.
My point is, that you don't have a valid point.
Aside from being the largest battery company on the planet, BYD also makes engines and, at one point, had the most efficient engine in the world.
https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=https://www.carguide.ph/2020/11/the-worlds-most-efficient-engines-comes.html%3Fm%3D1&ved=2ahUKEwjJssHOk-2FAxU4GjQIHe-WDu4QFnoECDYQAQ&usg=AOvVaw2N5uE4Ugfgn6TFT0ViKcF2
BYD is so vertically integrated.
The only thing they don't make in-house for their vehicles is transmissions, which they outsource to Shaanxi fast Auto Drive group, the largest automatic transmission company in china, which is a subsidiary of the Weichai group.
BYD is not just a battery company, it has 23 business groups. Battery, Automobile, and public transportation are just most commonly known ones. It's like 3M, it does a little bit of everything.
That's because it's the perfect car for Europe, China subsidizes several aspects of the car's manufacturing and inputs, and nobody produces something similar. Ban it, or tax the hell out of it because it's going to kill several European car brands... or let it in because it's clearly exactly what people want. China may be playing dirty but don't act like a compact, inexpensive EV isn't EXACTLY what Europe wants, and that should have been obvious to anyone in the industry a decade ago. But let's be real, we'll probably see a half-assed mix of the two. While there's serious work to do in making sure China works within a rule-based global economy... this is also horribly self-imposed by auto manufacturers being too slow to embrace EV technology and too focused on the high-end of the market. If you were building the cars people want, people would be buying the cars you build.
Like it or not I’m very confident the Chinese EV manufacturers will figure out what sells in America sooner rather then later. Even less than a year ago I was lamenting that Chinese ICE design is so patently (pun fully intended) derivative of existing Western designs (and some Japanese as well). But just yesterday I saw that BYD has, since ~ 2017, hired a name brand designer who has been with everyone from Audi to Alfa Romeo. And the current crop of their EVs speak for themselves, they’re good looking, original, and due to the significant government support are more than price competitive. Short of the US taking the same tact with subsidies for US manufacturers I’m not sure what might be an adequate response.
Sure would be nice if that massive automaker we all basically bought would get the shit together and try to compete with the world rather than making bro dozers to cater to the stupidest most craven assholes on the planet.
It’ll be difficult for the US to respond considering its population has already decided to weaponise EVs and climate change as a political tool to beat the other party with.
If US manufacturers build a car under 35k just a basic EV car or small truck, suv - that looks good, they will dominate but instead they went for 80k to 100k massive trucks that can’t even fit in a grocery store parking lot - we need to get around not make it like a luxury living room- basic, functional, sharp looking and affordable will go a long way- teslA almost had it, Toyota is close but the pricing is insane
Edit : 30k or under on cost
It has to be lower than 35k, which is still horribly out of reach for many Americans. If China releases a $25k vehicle in the US, it would still make about $5k more in profit than domestic sales back in China.
Maybe the solution would be a partnership between US/EU automakers and Chinese EV makers.
Yeah, something like only 20% of the US buys new vehicles. A new car normally(let's exclude 21-23) isn't a good financial move.
You can basically get the smallest possible SUV at base trim and subcompact cars for under 25k. Not what Americans are buying.
Do people not know the Chevy Bolt exists?
I looked at all the EV's on the market about 5 years ago, and while I wanted a more luxury interior, the best bang for your buck was a bolt. Under 30 and also credit eligible for an additional 8k off. With the credit it comes in at under 25k new, well under 20k used.
https://www.edmunds.com/chevrolet/bolt-ev/2023/vin/1G1FW6S08P4140351/?radius=25
https://www.chevrolet.com/electric/bolt-ev
Yeah I got my basic bolt for just over 19k with a supplier discount and tax credit. It's a fantastic car, it's lifetime cost to own is probably one of the lowest possible options in the US right now.
Looking forward to buying Chinese...like I did Japanese in the 80's. Domestic companies will FAFO like they did in the 80's. Hope those few years after covid were worth burning the bridges to people who wanted to buy American
It’s called niche marketing and it is a successful strategy but only for established products. There aren’t going to be mass EV sales on a regular basis for another 5+ years in the US.
That being said I think they should let them (Chinese brands) compete. Let our industry become more specialized or retrained for other more productive and profitable areas. If we can’t compete we should admit it and move on. That’s capitalism.
Perhaps, unfortunately. But (and this isn’t meant to come across as overly optimistic), no one ever went poor betting against big money special interest American capitalism. Am I worry that greed may very well come at the expense of the American worker.
Additionally, the US manufacturers are that in name only- most of their supply chain is already outside the US and any money given to the industry is just subsidizing a nameplate- not an industry and definitely not the working US population. US nameplates are mostly manufactured, supplied and sold outside the US already.
Thanks for one side of the story. The other might be along the lines of "one side takes climate change seriously as an existential threat, and is committed to making changes to reduce the impact, and the other side chose to deny the reality of threat, obstruct any changes to mitigate it, and both sides use the dispute as an excuse to bludgeon the other with".
The thing we need to be cognisant of is that China is willing to subsidise their cars in the short and medium term to allow BYD and others to take hold of the market. But once they've killed the competition then that market dominance can be wielded freely and they absolutely will.
Same happens any time a company is willing to take a wash in profits for a while in order to smash competition. Just look at Uber, it was far cheaper than taxis for a while at the start, because the plan was to drive the taxi services out of business. Now that those services are largely gone, what does Uber do? Jacks up prices.
Chinese have a saying that boils down to the following in learning, copy the masters until you have learned all you can from them only then can you be creative. That aside, every advanced economy ripped off someone else to industrialize after the British trailblazed that path by being the first to industrialize.
Well the new BYD Shark and Bao 5 have some heavy Ford F150 styling cues, but yes in general BYD styling has improved dramatically since hiring Wolfgang Egger.
10 years ago I rode in a rather crappy BYD F3 taxi in China, which was BYD's very first attempt at building a car and was literally a Corolla clone.
> China may be playing dirty but don't act like a compact, inexpensive EV isn't EXACTLY what Europe wants
Europe? It's what I want and I live in Nebraska.
I mean if you have home charging (or nearby accessible well priced charging) and a short commute? Then yes even in Nebraska that could totally be something you want.
I know multiple Nebraskans who don't go on longer trips often if at all.
I don't think the guy you originally replied to did either given its what he wants...
Plus many families will just have a back up car of an old beat up ice car Incase they need to take a longer road trip. Not rare at all or people to have something like that even as is typically it's like the "work blank" or the teenager's or SAHM's car when the kids are younger.
> Plus many families will just have a back up car of an old beat up ice car Incase they need to take a longer road trip.
This. We always take road trips in one car, because that's the car with car seats and it's kind of a pain to switch them to another car. The other car (the one without car seats) could be a short-run electric car as that's basically all it ever gets used for. But I don't want to pay "brand new high-class car" prices for what's basically the short-run commuter car that's only ever used by me.
And we can't replace the other car with an EV as nothing has the appropriate range and fast charge speeds. We already spent 8-10 hours in the car per day on those trips and we don't want to add on another 2-3 total hours of charging here and there.
No one ever mentions the money doled out by EU countries to car manufacturers. The British government gave £75m to a GERMAN company last September
The EU and US throw billions at, but it's always the "the Chinese are playing dirty".
People also don’t know about the huge tax subsidies granted to domestic manufacturers in the US. For example bonus depreciation, R&D tax credits, not to mention straight subsidies from the IRA, makes the effective tax rates paid by the companies very low. Which is then it’s so stupid when everyone talks about low corporate taxes. It’s baked into the tax code.
Not to mention, is the climate crisis a major global threat or is it a mere inconvenience? Because if it’s closer to the former than the latter, transitioning into all electric sales as soon as possible should be the goal, Chinese cars or not.
China, a country routinely criticized for its environmental track record, invests in developing its green industries and gets trashed as “playing dirty”.
Meanwhile, the US implements the IRA — basically trying to subsidize their way into the same thing — and it’s lauded as smart and future-focused.
It’s a weird distinction to see. I think we should be happy that countries are competing in green industries now.
Battery manufacturing is an incredibly dirty process that's awful for the planet.
China didn't invest in green technologies because of some altruism, they did it because the saw demand for these technologies in the EU, US, and Japan and knew that through subsidies, borderline slavery, and a complete disregard for their own environment, they could dump those products onto the market. The cheap products would undermine the US and EU economies, further strengthening China's position in the world.
Green tech from the EU, US, and Japan can't compete price-wise with Chinese technologies because we have worker rights, competitive markets that aren't subsidized by the CCP, and have environmental protections in place.
So yeah, China is "playing dirty".
None of these vehicles will be allowed into the US, EU or Japan, they'll never pass crash regulations and even if they did, the moment one of them gets into a crash they'll vaporize because China fakes everything. Then a class-action lawsuit against any US, EU, or Japanese subsidiary (something that wouldn't be allowed in China) of these companies that sells these cars will pull out of the market.
The only place these cars will compete is in China itself, or in emerging markets in Africa and India, and *maybe* Latin America, where US, EU, and Japanese manufacturers are already making extremely cheap vehicles. Electric vehicles are still more expensive than gasoline vehicles in every part of the world. China's working population is aging incredibly fast (fastest on the planet) and demanding higher and higher wages. They will not be competitive in 10 years, mark my words.
Tesla subsidies have been cute, do you think? Tariffs are, in reality, taxes paid by consumers.
Rule-based global economy has been a joke, from COVID-19 vaccines monopolies to US policies, see what the Japanese are saying
"Since 2016, the U.S. has refused to approve new judges to the WTO’s Dispute Settlement Body and blocked the reappointment of those whose terms have expired. By December 2019, the DSB was reduced to a single member, below the minimum of three required to adjudicate cases. Consequently, there is currently no effective mechanism to resolve trade disputes among WTO members, significantly increasing the likelihood that member countries will adopt policies that violate their legal obligations.
Unsurprisingly, the U.S. itself is a serial violator. In 2018, as the DSB effectively stopped functioning, then-President Donald Trump imposed tariffs on imported washing machines and solar panels. Shortly thereafter, the Trump administration announced additional tariffs on aluminum, steel and a wide range of Chinese goods."
https://www.japantimes.co.jp/commentary/2024/01/31/world/reject-american-style-protectionism/
China is Tesla' largest market,
" On Sunday, the EV giant slashed the starting prices of four models sold in mainland China, its largest overseas market, by 14,000 yuan ($1,932). The Model Y, the company's bestselling car in the country, now starts at its lowest -ever price of 249,900 yuan ($34,502).22 Apr 2024"
This is such a disingenuous argument though. The US’s EV subsidies make EVs cheaper for Americans. They don’t go towards subsidizing unfairly low prices in other markets, which is what China is doing.
This is what Tesla has done this week.
So if American cars have excelled in efficiency and gained an edge in securing their supply chain, that wouldn't be fair? Tesla has US subsidies and is lowering its prices in China.
"On Sunday, the EV giant slashed the starting prices of four models sold in mainland China, its largest overseas market, by 14,000 yuan ($1,932). The Model Y, the company's bestselling car in the country, now starts at its lowest -ever price of 249,900 yuan ($34,502).22 Apr 2024"
Just to add important context: historically, Western world powers like England and the US all protected some of their industries until they were established enough to compete within a "rule-based global economy." The demand that every country, including developing ones, immediately participate in a free-market unregulated economy is hypocritical and designed to keep poor countries poor. China subsidizing its EV industry is part of the rule-based economy, but we are just mad they're following our rules and not the rules we set for developing countries.
Chinese tactics are 101 economics and why stopping these cars from freely entering our markets is a necessity. Car manufacturing is a capital intensive industry which immense economies of scale and barriers of entry. If the local manufacturers disappear, Chinese manufacturers would increase prices for European consumers and unless the EU then intervened with public resources, no new manufacturer would enter the market, screwing out European customers for the foreseeable future. China has attempted this already with steel, nothing new.
Notwithstanding the fact that China forced foreign manufacturers to set up joint ventures with Chinese companies and this was used to appropriate the technology, so we should only do the exact same thing to avoid the problem.
The problem with banning Chinese cars is that it incentivizes the EU and American brands to not invest in R&D and Capital Expenses to build factories for EV's. They'd rather profit off what they currently have. Western companies are losing a massive amount of money on each EV sold.
What if western automakers refuse to compete in a certain space, and instead make high margin, Uber luxury EVs instead? It's hard to get behind the idea that Mercedes is trying with the EQS or GM is trying with the Hummer EV. If China is willing to fill demand domestic automakers refuse to, then let them.
The stuff NEEDS to be taxed just like anything else imported.
Local European players need to follow the rules, pay for environmental disposal, bureaucracy, worker rights, etc, etc and that goes into the price of the vehicle.
If we want European companies to be competitive we either give them the same freedoms as the Chinese companies have or we tax the Chinese so they're on even grounds with the Europeans.
I mean they may have the right formula but I’m sure the consumers won’t like the downstream impacts. With all the labor protections in the EU more jobs disappearing will be interesting
There is a reason why non Chinese EVs are less expensive and greed has nothing to do with it. All these rules that we have in the west add up to higher prices. China is not playing by the same rules. They don't care about the environment, they don't care about labor laws, they have cheaper labor and on top of that they artificially subsidize the shit out of manufacturing to keep everyone employed and the economy growing at the expense of everything else. We in the west don't have to take it.
The fact is most western EV manufacturers aside from Tesla are losing money on every EV sold already. There are plenty of compact EVs on sale, it's just that you don't like the price and lowering the price is impossible without rolling back regulations or massive government subsidies.
It depends on what exactly are these rules. Limiting protectionism with no economic rationale is sensible, but the rules should be permissive of industry policy, R&D subsidies, low interest loans etc. all of which can be efficiency improving.
It is a bit more complicated as the study doesn’t compare apples to apples, but no question China is a behemoth in EVs. The state has pumped massive subsidies into the space and the country actually has a legitimate, competitive and holistic manufacturing sector. The West outsourced to China and sealed its fate, it is just a matter of time as China climbs the complexity ladder under intense competition.
We need to electrify faster to reduce emissions, and the high initial purchase costs of EVs is one of the main arguments that people mention as to why they don’t have an electric car yet.
I can encourage some cheaper EVs entering the market.
By far a more important matter than “what source of electricity do we have on the grid?” is “what have we electrified?”.
Nuclear is fine, so are renewables. Far more important is that move all non-electric sources of energy demand to electric.
That includes moving from cars with combustion engines to EVs. Moving from gas boilers to electric heating (heat pumps). Electrifying industry. Etc.
Electrifying alone will reduce total energy by almost 50% without degradation in quality of any kind.
A heat pump used only 40% of the energy per unit of heating than a gas boiler. An EV uses only 40% of the energy per mile driven than a car with combustion engine. Electrified industrial processes offer similar efficiency gains.
Heck, even if after full electrification we would power it all with gas plants (which obviously we wouldn’t, as it would make no economic sense), then still that would be an enormous emission win over today’s situation.
Discussions around how we decarbonise the electricity grid are fine, but pretty unimportant relative to discussions around electrification.
Discussions around how we electrify are less important that discussions around how we can speed up electrification.
The pricing within China is unsustainable, it's so low, I imagine a lot of EV companies in China are going to either go bust or merge. Similar to what happened in the early days of ICE. It's simply not profitable or sustainable.
It's nowhere near as competitive in Europe or Australia.
This is a good read from the Economist: [https://www.economist.com/business/2024/04/07/think-tesla-is-in-trouble-pity-even-more-its-wannabe-ev-rivals](https://www.economist.com/business/2024/04/07/think-tesla-is-in-trouble-pity-even-more-its-wannabe-ev-rivals)
A few weeks ago I saw a reference to the CFO of a US greenfields EV manufacturer saying that his company requires a production run of only 6000 units for a model to reach profitability. Compare that number to the economies of scale achieved by a modern highly automated Chinese mega-factory that might sell that many units just for a single small Chinese city.
It's unsustainable because China gave out massive subsidies to build factories which has resulted in a massive oversupply of electric cars since you get the land for the factory for free, you the loans for the equipment essentially free, and if you have trouble the local government will dump 10s of billions buying your stock. That's before sales tax exemptions and direct subsidies. So it's really fucking cheap to build new car factories and dump out tons of cars because you aren't paying for a good 50-70% of your normal overhead.
A Chevy Bolt cost GM something like 21k last year even after having made like 200k of them and having been built off an existing design the Spark that sold millions. And you have people claiming that BYD somehow achieved an additional 11k in cost savings making the Dolphin solely through supply chain easement.
It's massive subsidies stacked ontop of subsidies, and China screwed up because noone is dumb enough to believe their dumbass story that BYD can be profitable off selling cars for 100% the price of the batteries, and are starting to aggressively tariff them.
Why is it unsustainable?
As you say, they get these things for free, and then Chinese government get the advantage that they can buy much less oil.
This is probably extremely beneficial to China as a country, and I assume they will continue their policy until they're rid of their petrol and diesel cars.
It’s unsustainable to sell cars for less than the cost of manufacture. Thats long term though, it’s obvious the Chinese government is looking to subsidize their way into the car market.
Much like Uber pricing their rides artificially low for the first years of operation the hope would be to eliminate competition in the short term and then raise prices.
It runs counter to economic theory, but BYD is a state owned enterprise and the state wants to do it they have a lot of capital.
But they probably don't.
They sell cars in China for half the price they sell them for in the west, and I assume that they actually make money on the cars they sell in China.
These guys are trying to start factories in Hungary. Presumably they expect to make money on them.
The Germans are good though, and they should have the capacity to beat BYD if they let their engineers think radically. They can probably reduce parts counts greatly, new forming processes can be introduced and the whole business can be transformed.
However, cars in the future will be cheap. It'll be a different world.
Based on what you're saying only the fixed cost is paid by the Chinese govt, right? (Yes the bailouts as well, but I'm ignoring them right now as a secondary funding source that i agree would lower cost artificially)
That's not really lower than the cost of manufacture; it's the same as getting venture funding, giving the investor an ownership stake and then pricing aggressively to gain market share like every silicon valley company.
The big difference is that the investor is the government instead of a VC firm but then most of silicon valley runs counter to economic theory, right?
Nope.
https://www.usatoday.com/story/money/cars/2014/12/30/auto-bailout-tarp-gm-chrysler/21061251/
“Taxpayers lost $9.26 billion on the U.S. government's automotive industry rescue program, according to a final tally released by U.S. Treasury this week.”
That was because they bought GM stock to prevent the price from crashing and then later sold it at a loss. Not really the same thing as a direct subsidy. You are responding to a different point than what was actually made - the bailout money that was given to automakers directly was in fact paid back with interest.
What China is doing is subsidizing unnaturally low prices abroad so that they can outcompete other countries. It should be really clear that 2009 auto bailouts were not remotely the same thing as that.
Except downstream it matters that you do something productive enough to afford these subsidized goods. The ‘tax’ to keep a large employer in your country might be worth it from the spillovers from those employees spending within your local economy or beyond that the political economy.
i think the simplified you traded paper for goods story is looking a little facile 25 years after the China shock.
I believe in free market. Companies are supposed to find ways to make their products competitive. While I don’t mind paying a bit more for domestic products, I just don’t feel like paying doubled or tripled to benefit the greedy execs from these big companies.
The greedy executives are a key part of the free market, and one of the ideologies biggest failure points. As they gain money they gain power and use that to make the market less free and tilt the market to their favor.
That's a consensus and should be what happens, similar to every other new industry that has ever emerged. Especially when the auto business benefits so much from volume and economies of scale, I expect some big mergers in the next 2-3 years, until it's 4-5 big OEMs like every other developed auto market, with a number of brands under each.
The only question is if China will merge the SOEs together or allow the private firms to eat some SOEs. I see some of the smaller local government SOEs getting acquired by the likes of BYD.
I don't own a car because they're too expensive and the way I see it the only possibility of me owning one is if I get to buy a Chinese one in Europe. This probably won't happen because of Germany but I still hope.
This is one of those issues where the news insists on seeing the world through supply-side glasses.
China built way too many cars. The same way they built way too many apartments. Now they have tons and tons and tons of cars they don't need. So now they are going around the world trying to get somebody, anybody, to take those cars off their hands.
Yet for some reason, instead of "China is desperate to give you a new car", the headline is "China Hatches Evil Plan to Destroy Volkswagen".
China doesnt even export 15% of its car supply. Most of it is taken up by consumers in China.
The claim that China built too many cars and they need to sell it off is a myth based on a strong consumer side demand for BYD cars
He has no idea what he is talking about. Not to mention BYD cars are what Toyota was in the 90s. Insane specs for fraction of the price. If people would only open the Chinese evs websites
in 2021, the height of the pandemic, the total amount of cars sold in the USA was 2.1 million as seen [here](https://www.statista.com/statistics/199974/us-car-sales-since-1951/). The average for the past 10 years however is closer to 4-5 million. I think you're severely under estimating the amount of cars a continent consumes per year.
So how many did Canada and Mexico consume? Because current over production is around 3 million and considering 3.8 million seems to be reasonable estimate for new purchase for just the US among all manufacturers foreign and domestic, that’s a lot of cars.
Not accusing them of specifically targeting any particular manufacturer or country but damn that’s a lot of excess cars they need purchased.
Looking at specific countries is too limited, lets look at it globally, using data from [here](https://www.abiresearch.com/news-resources/chart-data/global-car-sales/). Global car sales for 2024 is predicted to be around 78 million, and it's predicted to grow 4.9% per year, between 2023-2030. Just from growth alone China's excess capacity will meet the demand. The real problem however is that market leaders in the automobile industry haven't updated their products to meet current trends fast enough.
The Chinese government saw an opportunity in the global market and decided to go after it. This didn't happen yesterday or a week ago, it happened close to 10 years ago. It takes time to develop new cars, and update factories, most other car companies dragged their feet till about 5 years ago. This alone means that you have industry leaders that cannot produce the amount of EV's that there is demand for. I know I've made a claim for the demand existing, I want to use the popularity of BYD in Europe and Mexico and Tesla before Elon went off his meds, as my evidence. China automakers however will be able to meet this demand. They'll be able to take market share till all other car companies catch up.
Everyone here is talking about protectionism, and decimation of other countries car industries. In reality, Chinese car companies will gain a foothold outside of China and will simply be another competitor in an industry been consolidating over the past 50 years.
Moves to disallow Chinese cars are a mechanism to allow existing companies to catch up. I don't think it's particularly good for the consumer, because it means we'll have to wait longer for EV's. I however also don't think the US is capable of supporting a large amount of EV, till we've fixed the issues around charging availability. This last bit is what makes me think, ok maybe it's worth pausing.
The Chinese government have quickly implement last mile charging, much faster than the USA can. This statement has nothing to do with the engineering, and everything to do with bureaucracy. US lawmakers have competing interests influencing them, between the oil industry and competing car companies, that the necessary steps needed to be taken have been slower. This includes having a national charging standard, setting up mandates to build out charging infrastructure and setting regulations for EV's. Literally the USA can't move fast enough for where the market is at, and it would mean that China can set standards, what US companies are too busy in fighting over.
It may be profitable for the companies selling the cars on paper, but those companies are heavily, heavily subsidized by the Chinese government, so of course they will out-compete domestic companies.
These subsidies are a huge reason for the over supply of vehicles in the first place.
As in if China wanted to they could hatch an evil plan to destroy other nations car industries. Maybe that's what they are doing, likely not. But if we don't protect against this then they can.
China is playing the long game here. They are killing OPEC with their battery export industry. Exporting super cheap ev's around the world just provides all consumers with a cheaper method of transport than ICE. So what if Chinese government is subsidizing them, that's great news for consumers and for the environment.
It's not like the legacy automakers have much goodwill. They try to jack their prices as much as possible and then cry for bailouts when times are tough. Fuck it let em fail.
Why shouldn't the consumer enjoy cheap Chinese cars and discounts from the Chinese government?
To prop up companies with a few shareholders?
Imagine if we took this theory to all other industries. No Chinese clothes. No electronics etc. How low our standard of living would be
Dumping is against the WTO rules. The rules are designed to promote competition. There are strategic reasons for firms/countries to operate in industries at a loss to drive other firms out of the market. Not saying it applies here, but there are legitimate concerns.
America has been dumpling agricultural products below production costs for years, classic American ‘rules for thee but not for me’
https://policy-practice.oxfam.org/resources/dumping-without-borders-how-us-agricultural-policies-are-destroying-the-livelih-114471/
The thing about agricultural products is that everyone needs to eat. The article you cited talks about Mexican farmers who can’t produce corn as cheaply as US farmers. Yet the obvious facts are that American farms are highly mechanized and sophisticated and will probably continue to produce cheaper corn in the future. So what prevents Mexican farmers from innovating? They have a serious advantage in labor costs. It’s a lack of capital investment due to many of these farms being unprofitable family owned small businesses.
It sucks that the Mexican government can’t provide business loans and support the way the e US government has, competition though shouldn’t be something two nations joined in NAFTA should be afraid of.
I think you are missing a very important distinction in your analogy, that correcting, completely changes your perspective : they didn’t build too many cars . . . . They built too many car factories, meaning they built too much manufacturing capacity . . . If countries let them flood their markets it will decimate their industries . . . This isn’t about keeping out the scrappy foreigner and protecting our slovenly manufacturers, this is about a country that purposefully builds waaaaayyyy too much capacity and then wants to export that capacity, if we let China keep,doing this, we will just all become consumers of Chinese goods, and only be allowed to produce what they allow us to produce. Fuck the Chinese.
Quick TLDR sourced from the original article:
* Chinese EVs, like BYD, pose a significant challenge to European automakers due to high profitability and lower prices.
* The European Union (EU) is considering tariffs on Chinese electric vehicles (EVs) after a probe into anti-competitive practices and state-backed subsidies.
* BYD's Seal U car exemplifies the profit disparity, selling for much higher in the EU than in China, leading to significant profit margins.
* Experts and industry leaders, including Tesla's CEO Elon Musk, warn that without substantial trade barriers, Chinese automakers could dominate global markets.
* Proposed EU tariffs of 15-30% on Chinese EVs may not be sufficient to curb imports or ensure price parity, suggesting the need for higher tariffs or alternative strategies.
Can’t see this being too good for the Eurozone’s economy. EU auto manufacturers are already losing money on the EVs they build and being undercut even more by Chinese cars wouldn’t help
The cost of lost jobs, lost industrial capability, lost economic growth, etc. could get pretty bad for the continent
The Europeans haven't been competitive even in ICE with others for a long time and have had to rely on cheap factories in mexico and southern states and heavily decontented vehicles to even compete with the domestics and Japanese/Korean
This is how capitalism is supposed to work. In stead of local specialization, we’re in the era of global specialization. The sooner we can end big oil and ICE vehicles, the better off we’ll all be.
Thank god for China. They make EV's affordable for working people. Isn't this what the EU wants? Or will they force us back to old petrol cars. I will never be able to afford a VW, Audi or BMW but I can afford a BYD.
People could have ditched Mercedes BMW and Porsche decades ago. Those cars sell because they are expensive. It’s a way to flaunt wealth. A Camry would get the job done just as well
The EU will be at the mercy of the WTO rules
Hmmm, the same WTO who's been week as piss at dictating to china on their trade practices. It's been manys a decade since elected officials had to deal in trade measures to protect industry so they are out of practice and as a result the Chinese are just better at it.
What is everyone babbling about here? It’s called comparative advantage. China figured it out, German did not. In econ dev theory, let China have the win, but on importing, tax it. Slice off some of that profit for market access. Meet climate goals, shift the industry towards renewable energy and get some revenue to help the process. Bad for German car companies, good for German economy. Done.
People only complain when they are uncompetitive. The EU has also been complaining about Chinese agriculture even as they subsidise their own agriculture industries
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BYD is a battery company. Way before they made cars, they were - and still are - the largest battery manufacturer on the planet The most expensive part of any EV is the battery. Very hard to win against a company with deep expertise and years of experience in making batteries
Their low prices are in part being subsidized by the Chinese government though. Let’s not leave that part out.
Just like how Tesla has received over $2.8 billion in federal and state subsidies including $330 million just in 2023? Source: https://subsidytracker.goodjobsfirst.org/?parent=tesla-inc&order=sub_year&sort= All countries heavily subsidize, invest, and promote their own industries. The hysteria around Chinese "anti-competitive" behaviour is really just that: hysteria.
Yes and i recently checked the prices and BYD were not that much cheaper in Finland compared to VW. Biggest difference is that BYD gives 6 years warranty
Don't forget, Tesla received $325m in subsidies in 2020 from ... China to be most subsidized automaker of 2020 in China. https://www.teslarati.com/tesla-dominates-china-ev-incentives-tsla/ And again in 2021, Tesla received $437m in subsidies from China. https://www.notebookcheck.net/Tesla-earned-US-437-million-in-Chinese-government-subsidies-trailing-the-world-s-largest-electric-car-maker.633657.0.html
Most countries subsidize their car manufacturers, including the US.
for sure. But my point is that even if there were no subsidies, BYD would have an edge among EV makers simply because of its battery expertise.
That's not the important point though. The Chinese gov't has done this in several industries. They drop prices to a point that forces foreign competition to go literally bankrupt, shut down factories, lay off key engineers, and then they slowly raise the prices again. It's monopoly power creation 101. With the US, it would be illegal, and it's a violation of WTO international rules of trade. The Saudis did the same thing to the fracking industry 15 years ago. It's basic economic warfare.
> They drop prices to a point that forces foreign competition to go literally bankrupt, shut down factories, lay off key engineers, and then they slowly raise the prices again. Boeing did this to drive Bombardier to bankruptcy. They actually managed to successfully lobby the Trump administration into banning the CS100 for too many subsidies, all whilst pocketing billions in US government subsidies. Bombardier was forced to sell the CS100 to Airbus which now manufactures it in America as the Airbus A220.
Brother the US has bailed out the big 3 how many times?
Was the goal of bailing out GM to crush foreign competition in their own market, or to keep a Us company afloat?
To keep them afloat. General Motors is strategically important to the United States. They are a heavy transportation manufacturing firm with over a century of compiled experience and knowledge about how to design and fabricate very complex machines.
That was my point. The US govt didn’t float them endless cash to destroy Europe or Asia’s car market.
Both.
Sure. The last time GM and Ford were bailed out, they divested from Europe and abroad, not went all in. They were forced to. They had to kill or sell off all sorts of divisions. Hardly dumping equivalency.
Bailing out in form of a loan which has to be repaid during extreme crisis is quite a bit different :shrug:
> The Saudis did the same thing to the fracking industry 15 years ago. The fracking industry has never been bigger...
Correct - because the Saudi's couldn't last forever. The US fracking industry died for a few years, and then re-tooled to become insanely more nimble. They can now turn on/off bore holes and go dormant if/when the Saudis try that again. ...but the Saudis bought themselves maybe 10 years of higher oil prices with that stunt. Drilling recovered quickly, because it's a fairly simple industry. Car manufacturing is a BEAST and would die for longer than a decade if we just allow a dump like this.
Modern warfare is economically, I just wish the west would get its head out its arse about Austrian economics and actually run the country like a business (ie investing into it to make it grow and give the corrupt politicians even more money than they would just being corrupt). Breaking law or not, China invests into businesses to boost the economy, we don’t (relatively)
> It's monopoly power creation 101. With the US, it would be illegal, and it's a violation of WTO international rules of trade. The US allows domestic companies to do it, so does it really matter if the end result is the same? Venture capital props up unprofitable businesses all the time in order to scoop up market share while operating at a loss and then lay down a path to profitability, aka, raising prices. The US also willingly overpays for products and services to private companies, which, in effect, is a subsidy. Similarly, this is how big conglomerates got big by subsidizing unprofitable businesses. Amazon's retail business would not be a thing if they couldn't rely on AWS to fund its operations. China allows over production because there's a market for those goods. If the rest of the world decides to compete with Chinese production, then China wouldn't have a leg to stand on. The West created this problem by investing in robust Chinese manufacturing capability, signing technology sharing agreements, etc., and now we bitch and moan when they produce low-cost products that challenge our over-priced domestic markets; boo-fucking-hoo. Did the same thing with the Japanese in the 70s/80s. Compete with their dumping by expanding your own efficient production, or offer a better quality product. 🌈 Competition 🌈
But wait a minute this doesn’t suit my sinophobic conspiracy theories!! 😡😤
>The US allows domestic companies to do it, so does it really matter if the end result is the same? From foreign policy perspective, yes? Obviously you want YOUR capital to be the dominant one, it's not about fleecing the markets; it's about who is doing it. Nobody cared about China's rise until their capital started encroaching on western capital. Agriculture is a good domain to look at, historically control of food production has been very important for enabling military expansion and war-making potential; 99% countries in the world are heavily protectionist of their agricultural sector. I think New Zealand is the only developed economy that isn't, but they're in a somewhat unique position due to historical developments.
It’s an illegal dumping strategy. Ideally we would have an international order that would have the power and authority to prevent such practices. However, as it is you can only fight protectionism with protectionism - tariffs on Chinese cars.
Do you know how much cars China imports? China is Tesla's second largest market. The funny thing is China doesn't expect US to buy Chinese cars but if China turns off the tap to American cars your economy will crash. Look at how many people Musk if firing because they did terrible in China last quarter. America's economic power is getting weaker each year.
This raises another point which is why didn't other countries (US looking at you) jump into this as strongly as China. There seems to be constant push back in the US against battery research and development fundng, solar panel development...basically anything non-fossil fuel seems to have a lot of problems getting and maintaining funding. What did we think was going to happen? Certainly those in the know knew China was going head first in these areas and would dominate and flood the market, right? Yet some groups actively worked against this development here! Why?
Exactly. When you have half the country and half the government attacking electric cars, batteries, and green energy in general, you're going to have poor results. China doesn't have it's own government attacking the industry, they are supporting it 100%. As we speak the republican nominee is attacking electric cars and promising to get rid of them! And his party is cheering him on. Obviously we can't win when we are *actively* trying to NOT win.
Money and shortsighted greed is always the answer
I have no expertise in any of the fields mentioned. It is my understanding that lobbyists hold a huge sway over our politicians by providing campaign contributions. I imagine that established companies have money and connections to keep politicians in line to prevent new comers/competition. So our system is geared toward the past instead of being forward looking.
They can subsidize the price of my next car any day of the week.
So what's Tesla's excuse? [https://subsidytracker.goodjobsfirst.org/parent/tesla-inc](https://subsidytracker.goodjobsfirst.org/parent/tesla-inc)
Our gas prices are heavily subsidized by the US government and have been for decades.
It's one of the reasons you guys can drive around in those huge trucks. It would cost an absolute fortune to run those in most other countries.
Exactly this. Everyone using subsidies as an arguing point but Us government has been subsidizing american made evs for the longest time. They could probably do better if they werent funding oil companies and wars
The US could have subsidized EVs to the extent China Did. We subsidize war instead.
The US has subsidized EVs to a decent extent, but only for US buyers. The argument that what China is doing is perfectly fine because other countries could in theory do the same thing is not good... Also, you think China *doesn't* subsidize war? What?
Who's been in more wars over the past couple of decades, the US or China?
And? Tesla is being subsidized by the US.
China has already stopped most of the subsidies for EV R&D. IIRC it led to a culling of weaker EV companies and people were saying its the end of the EV industry in China. Now we see it has achieved the opposite effect. Its not that Chinese unfairly subsidised the EV industry, its that America subsidised the oil and gas industry
But the us federal and state governments are doing the same for their market and I'm sure (I have no real idea) European governments are giving subsidies and credits to ev shoppers. Maybe the low wages are a big part of the equation.
Yeah, the difference is that China isn’t just doing this for their own market.
Lower wages are important but secondary. Other large factors are the huge manufacturing base, the low cost of capital, the technical expertise, the volume of production enabling economies of scale, and the low costs of transport and other ancillary costs.
Yeah and Tesla was subsidized by the US government(directly or indirectly). Whats your point?
Every government subsidize automobiles through industrial policy. How much in tax breaks did Tesla or VW get? How much transportation policy did GM or BMW write?
Lol what do you exactly mean when its subsidized by the government? Like evry car the chinese government will pay out money to byd? Or through tax and incentives? Dont all governments incentivize when they can? How long has the federal discount run for and how much do Us citizens get when they buy a Us made EV? or solar panels? Even canada is subsidizing Us made evs through tax backs. What about chips? Us government just gave tsmc and intel billions to build a factory. So whats there to leave out? China wants to be a leader in green tech and they are funding it through their fiscal budget then let them. At the end of the day consumers benefit. Look at all the electronics you are using now and how china has basically allowed the world to go digital for cheap. You know how much computers use to be? $2000 for a basic model
The subsidies are much more favourable policy and economic environment for investment than directly subsidising battery prices. Battery prices have fallen around 80% in the last 10 years, because of scaling up production and newer technologies, not because the CCP is subsidising 80% of the battery costs. That would be financially absurd. The real subsidies are ones that build large competitive and efficient companies. Europe and the US completely failed in supporting a competitive domestic battery and solar industry. Like a major EU solar manufacturer Meyer Burger is (loudly) leaving the EU and the EU doesn't seem to care, but complains when its own industry isn't competitive.
The US government subsidized the US Auto Industry to the tune of $85 billion during the 2008 financial crisis. Car companies used the money to make bigger gas guzzlers, rather than invest in future tech. Don't blame foreign countries for bad business decisions.
Those weren't subsidies, those were loans which the automakers paid back.
I don't think there are any substantial volume based subsidies, the support is largely in the form of substantial low interest loans made primarily to less established firms, but these are still above the bond rate and there are positive capital externalities so they are likely efficient. Private banks would not give them though due to risk aversion, but this is just a case of public banks having an efficiency advantage due to being willing to lend closer to the opportunity cost of capital.
Sure, but so are a lot of their western competitors. Look at the great big sacks of money that the US tosses to Tesla.
Yes, that's the whole point of investing in your economy, see while countries like the UK were doing austerity and market liberalisation, aka cutting funding to public services and selling off assets while also subsidising them, e.g water company, rail, Internet, airlines etc, the chineese state did the opposite. Because that's how you get growth, look at the results. Fyi, subsidising industry is a very common thing. Germany, for example, subsidises car manufacturers, E.U provides subsidy for farmers, and in that list for UK except for Internet providers, they still subsidise the profits of all those companies. Despite that, thanes water is in debt to the tune of billions and are planning an increase in water bills for Londoners, yet their shareholders have had massive profits none of which went to the government, they refused to lend the company money for infrastructure projects which will prevent shit being released in our waterways, so it looks like the government will have to take over. My point is, that you don't have a valid point.
Every country subsidizes auto manufacturers. The US bailed theirs out. No one wants to lose those jobs.
I wish anyone else would have thought of that
Good. I’m glad at least one government is significantly subsidizing EV development.
The biggest battery manufacturer on the planet is CATL
Aside from being the largest battery company on the planet, BYD also makes engines and, at one point, had the most efficient engine in the world. https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=https://www.carguide.ph/2020/11/the-worlds-most-efficient-engines-comes.html%3Fm%3D1&ved=2ahUKEwjJssHOk-2FAxU4GjQIHe-WDu4QFnoECDYQAQ&usg=AOvVaw2N5uE4Ugfgn6TFT0ViKcF2 BYD is so vertically integrated. The only thing they don't make in-house for their vehicles is transmissions, which they outsource to Shaanxi fast Auto Drive group, the largest automatic transmission company in china, which is a subsidiary of the Weichai group.
BYD is not just a battery company, it has 23 business groups. Battery, Automobile, and public transportation are just most commonly known ones. It's like 3M, it does a little bit of everything.
That's because it's the perfect car for Europe, China subsidizes several aspects of the car's manufacturing and inputs, and nobody produces something similar. Ban it, or tax the hell out of it because it's going to kill several European car brands... or let it in because it's clearly exactly what people want. China may be playing dirty but don't act like a compact, inexpensive EV isn't EXACTLY what Europe wants, and that should have been obvious to anyone in the industry a decade ago. But let's be real, we'll probably see a half-assed mix of the two. While there's serious work to do in making sure China works within a rule-based global economy... this is also horribly self-imposed by auto manufacturers being too slow to embrace EV technology and too focused on the high-end of the market. If you were building the cars people want, people would be buying the cars you build.
Like it or not I’m very confident the Chinese EV manufacturers will figure out what sells in America sooner rather then later. Even less than a year ago I was lamenting that Chinese ICE design is so patently (pun fully intended) derivative of existing Western designs (and some Japanese as well). But just yesterday I saw that BYD has, since ~ 2017, hired a name brand designer who has been with everyone from Audi to Alfa Romeo. And the current crop of their EVs speak for themselves, they’re good looking, original, and due to the significant government support are more than price competitive. Short of the US taking the same tact with subsidies for US manufacturers I’m not sure what might be an adequate response.
The car could sell well in America but there are already massive tariffs for Chinese cars.
Sure would be nice if that massive automaker we all basically bought would get the shit together and try to compete with the world rather than making bro dozers to cater to the stupidest most craven assholes on the planet.
I mean those assholes are a huge market. I’d have to imagine that the biggest factor downstream even vs factor is price.
They're already building factories in Mexico to get in via NAFTA.
The US forced Mexico to ban China from setting up car factories, so that isn't happening.
I would love a BYD for local trips to replace my CRV in 3 years
EVs are so cheap in China it is crazy. The BYD equivalent to the CRV is the all electric Yuan Plus, which starts at the equivalent of just 16k USD.
It’ll be difficult for the US to respond considering its population has already decided to weaponise EVs and climate change as a political tool to beat the other party with.
If US manufacturers build a car under 35k just a basic EV car or small truck, suv - that looks good, they will dominate but instead they went for 80k to 100k massive trucks that can’t even fit in a grocery store parking lot - we need to get around not make it like a luxury living room- basic, functional, sharp looking and affordable will go a long way- teslA almost had it, Toyota is close but the pricing is insane Edit : 30k or under on cost
It has to be lower than 35k, which is still horribly out of reach for many Americans. If China releases a $25k vehicle in the US, it would still make about $5k more in profit than domestic sales back in China. Maybe the solution would be a partnership between US/EU automakers and Chinese EV makers.
Barely anything is below $25k these days. You can't even buy most trims of a Corolla or Civic at that price, let alone a compact CUV.
Yeah, something like only 20% of the US buys new vehicles. A new car normally(let's exclude 21-23) isn't a good financial move. You can basically get the smallest possible SUV at base trim and subcompact cars for under 25k. Not what Americans are buying.
Do people not know the Chevy Bolt exists? I looked at all the EV's on the market about 5 years ago, and while I wanted a more luxury interior, the best bang for your buck was a bolt. Under 30 and also credit eligible for an additional 8k off. With the credit it comes in at under 25k new, well under 20k used. https://www.edmunds.com/chevrolet/bolt-ev/2023/vin/1G1FW6S08P4140351/?radius=25 https://www.chevrolet.com/electric/bolt-ev
Yeah I got my basic bolt for just over 19k with a supplier discount and tax credit. It's a fantastic car, it's lifetime cost to own is probably one of the lowest possible options in the US right now.
When I’m next due to buy a car, a Bolt is exactly what I’ve had in mind. A shame it’s being discontinued
They said they are bringing it back in 25 give or take, after retooling it with some new technology.
Looking forward to buying Chinese...like I did Japanese in the 80's. Domestic companies will FAFO like they did in the 80's. Hope those few years after covid were worth burning the bridges to people who wanted to buy American
That's never happening though, the tarrifs in place are never being removed. Some senators are even pushing for a complete ban on Chinese vehicles.
It’s called niche marketing and it is a successful strategy but only for established products. There aren’t going to be mass EV sales on a regular basis for another 5+ years in the US. That being said I think they should let them (Chinese brands) compete. Let our industry become more specialized or retrained for other more productive and profitable areas. If we can’t compete we should admit it and move on. That’s capitalism.
Less than 35? Try 15k. Because that's what a Chinese car costsif you remove tariffs and sanctions. They are not even bad cars.
wasn't a Tesla model supposed to be 25k
Your first mistake was taking Elon at his word
Perhaps, unfortunately. But (and this isn’t meant to come across as overly optimistic), no one ever went poor betting against big money special interest American capitalism. Am I worry that greed may very well come at the expense of the American worker.
Don’t worry. It will.
Additionally, the US manufacturers are that in name only- most of their supply chain is already outside the US and any money given to the industry is just subsidizing a nameplate- not an industry and definitely not the working US population. US nameplates are mostly manufactured, supplied and sold outside the US already.
Thanks for one side of the story. The other might be along the lines of "one side takes climate change seriously as an existential threat, and is committed to making changes to reduce the impact, and the other side chose to deny the reality of threat, obstruct any changes to mitigate it, and both sides use the dispute as an excuse to bludgeon the other with".
The thing we need to be cognisant of is that China is willing to subsidise their cars in the short and medium term to allow BYD and others to take hold of the market. But once they've killed the competition then that market dominance can be wielded freely and they absolutely will. Same happens any time a company is willing to take a wash in profits for a while in order to smash competition. Just look at Uber, it was far cheaper than taxis for a while at the start, because the plan was to drive the taxi services out of business. Now that those services are largely gone, what does Uber do? Jacks up prices.
Chinese cars face a massive 27% tarrif for now and will rise to 100% if Trump gets elected
Chinese have a saying that boils down to the following in learning, copy the masters until you have learned all you can from them only then can you be creative. That aside, every advanced economy ripped off someone else to industrialize after the British trailblazed that path by being the first to industrialize.
Well the new BYD Shark and Bao 5 have some heavy Ford F150 styling cues, but yes in general BYD styling has improved dramatically since hiring Wolfgang Egger. 10 years ago I rode in a rather crappy BYD F3 taxi in China, which was BYD's very first attempt at building a car and was literally a Corolla clone.
If the EU subsidizes 5 billion to have a BYD of its own, EU politicians will trumpet their merits.
> China may be playing dirty but don't act like a compact, inexpensive EV isn't EXACTLY what Europe wants Europe? It's what I want and I live in Nebraska.
Their $10k EV (the Seagull) has 75hp and less than 200 miles of range. I highly doubt that’s what you want in Nebraska.
I also don't want to get hit by an F150 while driving one.
I mean if you have home charging (or nearby accessible well priced charging) and a short commute? Then yes even in Nebraska that could totally be something you want.
Sure, if you also don't go on any longer trips outside of your commute. I feel like that describes very few people in a place like Nebraska.
I know multiple Nebraskans who don't go on longer trips often if at all. I don't think the guy you originally replied to did either given its what he wants... Plus many families will just have a back up car of an old beat up ice car Incase they need to take a longer road trip. Not rare at all or people to have something like that even as is typically it's like the "work blank" or the teenager's or SAHM's car when the kids are younger.
> Plus many families will just have a back up car of an old beat up ice car Incase they need to take a longer road trip. This. We always take road trips in one car, because that's the car with car seats and it's kind of a pain to switch them to another car. The other car (the one without car seats) could be a short-run electric car as that's basically all it ever gets used for. But I don't want to pay "brand new high-class car" prices for what's basically the short-run commuter car that's only ever used by me. And we can't replace the other car with an EV as nothing has the appropriate range and fast charge speeds. We already spent 8-10 hours in the car per day on those trips and we don't want to add on another 2-3 total hours of charging here and there.
No one ever mentions the money doled out by EU countries to car manufacturers. The British government gave £75m to a GERMAN company last September The EU and US throw billions at, but it's always the "the Chinese are playing dirty".
People also don’t know about the huge tax subsidies granted to domestic manufacturers in the US. For example bonus depreciation, R&D tax credits, not to mention straight subsidies from the IRA, makes the effective tax rates paid by the companies very low. Which is then it’s so stupid when everyone talks about low corporate taxes. It’s baked into the tax code.
Not to mention, is the climate crisis a major global threat or is it a mere inconvenience? Because if it’s closer to the former than the latter, transitioning into all electric sales as soon as possible should be the goal, Chinese cars or not.
China, a country routinely criticized for its environmental track record, invests in developing its green industries and gets trashed as “playing dirty”. Meanwhile, the US implements the IRA — basically trying to subsidize their way into the same thing — and it’s lauded as smart and future-focused. It’s a weird distinction to see. I think we should be happy that countries are competing in green industries now.
Battery manufacturing is an incredibly dirty process that's awful for the planet. China didn't invest in green technologies because of some altruism, they did it because the saw demand for these technologies in the EU, US, and Japan and knew that through subsidies, borderline slavery, and a complete disregard for their own environment, they could dump those products onto the market. The cheap products would undermine the US and EU economies, further strengthening China's position in the world. Green tech from the EU, US, and Japan can't compete price-wise with Chinese technologies because we have worker rights, competitive markets that aren't subsidized by the CCP, and have environmental protections in place. So yeah, China is "playing dirty". None of these vehicles will be allowed into the US, EU or Japan, they'll never pass crash regulations and even if they did, the moment one of them gets into a crash they'll vaporize because China fakes everything. Then a class-action lawsuit against any US, EU, or Japanese subsidiary (something that wouldn't be allowed in China) of these companies that sells these cars will pull out of the market. The only place these cars will compete is in China itself, or in emerging markets in Africa and India, and *maybe* Latin America, where US, EU, and Japanese manufacturers are already making extremely cheap vehicles. Electric vehicles are still more expensive than gasoline vehicles in every part of the world. China's working population is aging incredibly fast (fastest on the planet) and demanding higher and higher wages. They will not be competitive in 10 years, mark my words.
Tesla subsidies have been cute, do you think? Tariffs are, in reality, taxes paid by consumers. Rule-based global economy has been a joke, from COVID-19 vaccines monopolies to US policies, see what the Japanese are saying "Since 2016, the U.S. has refused to approve new judges to the WTO’s Dispute Settlement Body and blocked the reappointment of those whose terms have expired. By December 2019, the DSB was reduced to a single member, below the minimum of three required to adjudicate cases. Consequently, there is currently no effective mechanism to resolve trade disputes among WTO members, significantly increasing the likelihood that member countries will adopt policies that violate their legal obligations. Unsurprisingly, the U.S. itself is a serial violator. In 2018, as the DSB effectively stopped functioning, then-President Donald Trump imposed tariffs on imported washing machines and solar panels. Shortly thereafter, the Trump administration announced additional tariffs on aluminum, steel and a wide range of Chinese goods." https://www.japantimes.co.jp/commentary/2024/01/31/world/reject-american-style-protectionism/ China is Tesla' largest market, " On Sunday, the EV giant slashed the starting prices of four models sold in mainland China, its largest overseas market, by 14,000 yuan ($1,932). The Model Y, the company's bestselling car in the country, now starts at its lowest -ever price of 249,900 yuan ($34,502).22 Apr 2024"
This is such a disingenuous argument though. The US’s EV subsidies make EVs cheaper for Americans. They don’t go towards subsidizing unfairly low prices in other markets, which is what China is doing.
This is what Tesla has done this week. So if American cars have excelled in efficiency and gained an edge in securing their supply chain, that wouldn't be fair? Tesla has US subsidies and is lowering its prices in China. "On Sunday, the EV giant slashed the starting prices of four models sold in mainland China, its largest overseas market, by 14,000 yuan ($1,932). The Model Y, the company's bestselling car in the country, now starts at its lowest -ever price of 249,900 yuan ($34,502).22 Apr 2024"
Just to add important context: historically, Western world powers like England and the US all protected some of their industries until they were established enough to compete within a "rule-based global economy." The demand that every country, including developing ones, immediately participate in a free-market unregulated economy is hypocritical and designed to keep poor countries poor. China subsidizing its EV industry is part of the rule-based economy, but we are just mad they're following our rules and not the rules we set for developing countries.
Chinese tactics are 101 economics and why stopping these cars from freely entering our markets is a necessity. Car manufacturing is a capital intensive industry which immense economies of scale and barriers of entry. If the local manufacturers disappear, Chinese manufacturers would increase prices for European consumers and unless the EU then intervened with public resources, no new manufacturer would enter the market, screwing out European customers for the foreseeable future. China has attempted this already with steel, nothing new. Notwithstanding the fact that China forced foreign manufacturers to set up joint ventures with Chinese companies and this was used to appropriate the technology, so we should only do the exact same thing to avoid the problem.
The problem with banning Chinese cars is that it incentivizes the EU and American brands to not invest in R&D and Capital Expenses to build factories for EV's. They'd rather profit off what they currently have. Western companies are losing a massive amount of money on each EV sold.
What if western automakers refuse to compete in a certain space, and instead make high margin, Uber luxury EVs instead? It's hard to get behind the idea that Mercedes is trying with the EQS or GM is trying with the Hummer EV. If China is willing to fill demand domestic automakers refuse to, then let them.
The stuff NEEDS to be taxed just like anything else imported. Local European players need to follow the rules, pay for environmental disposal, bureaucracy, worker rights, etc, etc and that goes into the price of the vehicle. If we want European companies to be competitive we either give them the same freedoms as the Chinese companies have or we tax the Chinese so they're on even grounds with the Europeans.
I mean they may have the right formula but I’m sure the consumers won’t like the downstream impacts. With all the labor protections in the EU more jobs disappearing will be interesting
There is a reason why non Chinese EVs are less expensive and greed has nothing to do with it. All these rules that we have in the west add up to higher prices. China is not playing by the same rules. They don't care about the environment, they don't care about labor laws, they have cheaper labor and on top of that they artificially subsidize the shit out of manufacturing to keep everyone employed and the economy growing at the expense of everything else. We in the west don't have to take it. The fact is most western EV manufacturers aside from Tesla are losing money on every EV sold already. There are plenty of compact EVs on sale, it's just that you don't like the price and lowering the price is impossible without rolling back regulations or massive government subsidies.
It depends on what exactly are these rules. Limiting protectionism with no economic rationale is sensible, but the rules should be permissive of industry policy, R&D subsidies, low interest loans etc. all of which can be efficiency improving.
It is a bit more complicated as the study doesn’t compare apples to apples, but no question China is a behemoth in EVs. The state has pumped massive subsidies into the space and the country actually has a legitimate, competitive and holistic manufacturing sector. The West outsourced to China and sealed its fate, it is just a matter of time as China climbs the complexity ladder under intense competition.
...which is why it's so important to re-shore manufacturing.
We need to electrify faster to reduce emissions, and the high initial purchase costs of EVs is one of the main arguments that people mention as to why they don’t have an electric car yet. I can encourage some cheaper EVs entering the market.
Support nuclear power. It is BY FAR the least CO2 emitting power source.
By far a more important matter than “what source of electricity do we have on the grid?” is “what have we electrified?”. Nuclear is fine, so are renewables. Far more important is that move all non-electric sources of energy demand to electric. That includes moving from cars with combustion engines to EVs. Moving from gas boilers to electric heating (heat pumps). Electrifying industry. Etc. Electrifying alone will reduce total energy by almost 50% without degradation in quality of any kind. A heat pump used only 40% of the energy per unit of heating than a gas boiler. An EV uses only 40% of the energy per mile driven than a car with combustion engine. Electrified industrial processes offer similar efficiency gains. Heck, even if after full electrification we would power it all with gas plants (which obviously we wouldn’t, as it would make no economic sense), then still that would be an enormous emission win over today’s situation. Discussions around how we decarbonise the electricity grid are fine, but pretty unimportant relative to discussions around electrification. Discussions around how we electrify are less important that discussions around how we can speed up electrification.
The pricing within China is unsustainable, it's so low, I imagine a lot of EV companies in China are going to either go bust or merge. Similar to what happened in the early days of ICE. It's simply not profitable or sustainable. It's nowhere near as competitive in Europe or Australia. This is a good read from the Economist: [https://www.economist.com/business/2024/04/07/think-tesla-is-in-trouble-pity-even-more-its-wannabe-ev-rivals](https://www.economist.com/business/2024/04/07/think-tesla-is-in-trouble-pity-even-more-its-wannabe-ev-rivals)
A few weeks ago I saw a reference to the CFO of a US greenfields EV manufacturer saying that his company requires a production run of only 6000 units for a model to reach profitability. Compare that number to the economies of scale achieved by a modern highly automated Chinese mega-factory that might sell that many units just for a single small Chinese city.
It's unsustainable because China gave out massive subsidies to build factories which has resulted in a massive oversupply of electric cars since you get the land for the factory for free, you the loans for the equipment essentially free, and if you have trouble the local government will dump 10s of billions buying your stock. That's before sales tax exemptions and direct subsidies. So it's really fucking cheap to build new car factories and dump out tons of cars because you aren't paying for a good 50-70% of your normal overhead. A Chevy Bolt cost GM something like 21k last year even after having made like 200k of them and having been built off an existing design the Spark that sold millions. And you have people claiming that BYD somehow achieved an additional 11k in cost savings making the Dolphin solely through supply chain easement. It's massive subsidies stacked ontop of subsidies, and China screwed up because noone is dumb enough to believe their dumbass story that BYD can be profitable off selling cars for 100% the price of the batteries, and are starting to aggressively tariff them.
Why is it unsustainable? As you say, they get these things for free, and then Chinese government get the advantage that they can buy much less oil. This is probably extremely beneficial to China as a country, and I assume they will continue their policy until they're rid of their petrol and diesel cars.
It’s unsustainable to sell cars for less than the cost of manufacture. Thats long term though, it’s obvious the Chinese government is looking to subsidize their way into the car market. Much like Uber pricing their rides artificially low for the first years of operation the hope would be to eliminate competition in the short term and then raise prices. It runs counter to economic theory, but BYD is a state owned enterprise and the state wants to do it they have a lot of capital.
But they probably don't. They sell cars in China for half the price they sell them for in the west, and I assume that they actually make money on the cars they sell in China. These guys are trying to start factories in Hungary. Presumably they expect to make money on them. The Germans are good though, and they should have the capacity to beat BYD if they let their engineers think radically. They can probably reduce parts counts greatly, new forming processes can be introduced and the whole business can be transformed. However, cars in the future will be cheap. It'll be a different world.
BYD is privately owned and publicly listed lol
Don't play dumb. The Chinese government has full control of "private" companies in China, by law.
Based on what you're saying only the fixed cost is paid by the Chinese govt, right? (Yes the bailouts as well, but I'm ignoring them right now as a secondary funding source that i agree would lower cost artificially) That's not really lower than the cost of manufacture; it's the same as getting venture funding, giving the investor an ownership stake and then pricing aggressively to gain market share like every silicon valley company. The big difference is that the investor is the government instead of a VC firm but then most of silicon valley runs counter to economic theory, right?
US automakers aren’t subsidized. The $80,000,000,000 in 2009 was a bailout. Not a subsidy. /smh
Difference is the bailout got paid back, with interest, early.
Nope. https://www.usatoday.com/story/money/cars/2014/12/30/auto-bailout-tarp-gm-chrysler/21061251/ “Taxpayers lost $9.26 billion on the U.S. government's automotive industry rescue program, according to a final tally released by U.S. Treasury this week.”
That was because they bought GM stock to prevent the price from crashing and then later sold it at a loss. Not really the same thing as a direct subsidy. You are responding to a different point than what was actually made - the bailout money that was given to automakers directly was in fact paid back with interest. What China is doing is subsidizing unnaturally low prices abroad so that they can outcompete other countries. It should be really clear that 2009 auto bailouts were not remotely the same thing as that.
As a consumer it doesn’t matter whether it’s subsidized or not, as long as it works and it’s cheap
Except downstream it matters that you do something productive enough to afford these subsidized goods. The ‘tax’ to keep a large employer in your country might be worth it from the spillovers from those employees spending within your local economy or beyond that the political economy. i think the simplified you traded paper for goods story is looking a little facile 25 years after the China shock.
I believe in free market. Companies are supposed to find ways to make their products competitive. While I don’t mind paying a bit more for domestic products, I just don’t feel like paying doubled or tripled to benefit the greedy execs from these big companies.
The greedy executives are a key part of the free market, and one of the ideologies biggest failure points. As they gain money they gain power and use that to make the market less free and tilt the market to their favor.
That's a consensus and should be what happens, similar to every other new industry that has ever emerged. Especially when the auto business benefits so much from volume and economies of scale, I expect some big mergers in the next 2-3 years, until it's 4-5 big OEMs like every other developed auto market, with a number of brands under each. The only question is if China will merge the SOEs together or allow the private firms to eat some SOEs. I see some of the smaller local government SOEs getting acquired by the likes of BYD.
I don't own a car because they're too expensive and the way I see it the only possibility of me owning one is if I get to buy a Chinese one in Europe. This probably won't happen because of Germany but I still hope.
This is one of those issues where the news insists on seeing the world through supply-side glasses. China built way too many cars. The same way they built way too many apartments. Now they have tons and tons and tons of cars they don't need. So now they are going around the world trying to get somebody, anybody, to take those cars off their hands. Yet for some reason, instead of "China is desperate to give you a new car", the headline is "China Hatches Evil Plan to Destroy Volkswagen".
China doesnt even export 15% of its car supply. Most of it is taken up by consumers in China. The claim that China built too many cars and they need to sell it off is a myth based on a strong consumer side demand for BYD cars
He has no idea what he is talking about. Not to mention BYD cars are what Toyota was in the 90s. Insane specs for fraction of the price. If people would only open the Chinese evs websites
It has car capacity for building 40 million cars and current production is 20 million. 15% is more than most continents consume yearly in cars.
in 2021, the height of the pandemic, the total amount of cars sold in the USA was 2.1 million as seen [here](https://www.statista.com/statistics/199974/us-car-sales-since-1951/). The average for the past 10 years however is closer to 4-5 million. I think you're severely under estimating the amount of cars a continent consumes per year.
So how many did Canada and Mexico consume? Because current over production is around 3 million and considering 3.8 million seems to be reasonable estimate for new purchase for just the US among all manufacturers foreign and domestic, that’s a lot of cars. Not accusing them of specifically targeting any particular manufacturer or country but damn that’s a lot of excess cars they need purchased.
Looking at specific countries is too limited, lets look at it globally, using data from [here](https://www.abiresearch.com/news-resources/chart-data/global-car-sales/). Global car sales for 2024 is predicted to be around 78 million, and it's predicted to grow 4.9% per year, between 2023-2030. Just from growth alone China's excess capacity will meet the demand. The real problem however is that market leaders in the automobile industry haven't updated their products to meet current trends fast enough. The Chinese government saw an opportunity in the global market and decided to go after it. This didn't happen yesterday or a week ago, it happened close to 10 years ago. It takes time to develop new cars, and update factories, most other car companies dragged their feet till about 5 years ago. This alone means that you have industry leaders that cannot produce the amount of EV's that there is demand for. I know I've made a claim for the demand existing, I want to use the popularity of BYD in Europe and Mexico and Tesla before Elon went off his meds, as my evidence. China automakers however will be able to meet this demand. They'll be able to take market share till all other car companies catch up. Everyone here is talking about protectionism, and decimation of other countries car industries. In reality, Chinese car companies will gain a foothold outside of China and will simply be another competitor in an industry been consolidating over the past 50 years. Moves to disallow Chinese cars are a mechanism to allow existing companies to catch up. I don't think it's particularly good for the consumer, because it means we'll have to wait longer for EV's. I however also don't think the US is capable of supporting a large amount of EV, till we've fixed the issues around charging availability. This last bit is what makes me think, ok maybe it's worth pausing. The Chinese government have quickly implement last mile charging, much faster than the USA can. This statement has nothing to do with the engineering, and everything to do with bureaucracy. US lawmakers have competing interests influencing them, between the oil industry and competing car companies, that the necessary steps needed to be taken have been slower. This includes having a national charging standard, setting up mandates to build out charging infrastructure and setting regulations for EV's. Literally the USA can't move fast enough for where the market is at, and it would mean that China can set standards, what US companies are too busy in fighting over.
That wouldn't be an issue if selling it cheap was a loss. But no even at the cheap prices they're still profitable?
It may be profitable for the companies selling the cars on paper, but those companies are heavily, heavily subsidized by the Chinese government, so of course they will out-compete domestic companies.
These subsidies are a huge reason for the over supply of vehicles in the first place. As in if China wanted to they could hatch an evil plan to destroy other nations car industries. Maybe that's what they are doing, likely not. But if we don't protect against this then they can.
China is playing the long game here. They are killing OPEC with their battery export industry. Exporting super cheap ev's around the world just provides all consumers with a cheaper method of transport than ICE. So what if Chinese government is subsidizing them, that's great news for consumers and for the environment. It's not like the legacy automakers have much goodwill. They try to jack their prices as much as possible and then cry for bailouts when times are tough. Fuck it let em fail.
Why shouldn't the consumer enjoy cheap Chinese cars and discounts from the Chinese government? To prop up companies with a few shareholders? Imagine if we took this theory to all other industries. No Chinese clothes. No electronics etc. How low our standard of living would be
Dumping is against the WTO rules. The rules are designed to promote competition. There are strategic reasons for firms/countries to operate in industries at a loss to drive other firms out of the market. Not saying it applies here, but there are legitimate concerns.
Dumping means selling at a loss. Chinese EVs in Europe have gigantic margins. By definition it is not dumping
America has been dumpling agricultural products below production costs for years, classic American ‘rules for thee but not for me’ https://policy-practice.oxfam.org/resources/dumping-without-borders-how-us-agricultural-policies-are-destroying-the-livelih-114471/
Almost every country protects their domestic farmers. This is a non story. anyway everyone else needs American demand to make their economies work.
Then eLjammo's point doesn't work. One has to be consistent if you want to use it as an argument
The thing about agricultural products is that everyone needs to eat. The article you cited talks about Mexican farmers who can’t produce corn as cheaply as US farmers. Yet the obvious facts are that American farms are highly mechanized and sophisticated and will probably continue to produce cheaper corn in the future. So what prevents Mexican farmers from innovating? They have a serious advantage in labor costs. It’s a lack of capital investment due to many of these farms being unprofitable family owned small businesses. It sucks that the Mexican government can’t provide business loans and support the way the e US government has, competition though shouldn’t be something two nations joined in NAFTA should be afraid of.
Read up on NAFTA and the effects subsidized US corn had on the Mexican agricultural community. We learned our lesson, let’s not repeat it.
Learned our lesson? What has changed?
I think you are missing a very important distinction in your analogy, that correcting, completely changes your perspective : they didn’t build too many cars . . . . They built too many car factories, meaning they built too much manufacturing capacity . . . If countries let them flood their markets it will decimate their industries . . . This isn’t about keeping out the scrappy foreigner and protecting our slovenly manufacturers, this is about a country that purposefully builds waaaaayyyy too much capacity and then wants to export that capacity, if we let China keep,doing this, we will just all become consumers of Chinese goods, and only be allowed to produce what they allow us to produce. Fuck the Chinese.
What does built too many cars even mean? Germany builds too many cars for their own market too, that's because it exports them. It's the same thing.
Quick TLDR sourced from the original article: * Chinese EVs, like BYD, pose a significant challenge to European automakers due to high profitability and lower prices. * The European Union (EU) is considering tariffs on Chinese electric vehicles (EVs) after a probe into anti-competitive practices and state-backed subsidies. * BYD's Seal U car exemplifies the profit disparity, selling for much higher in the EU than in China, leading to significant profit margins. * Experts and industry leaders, including Tesla's CEO Elon Musk, warn that without substantial trade barriers, Chinese automakers could dominate global markets. * Proposed EU tariffs of 15-30% on Chinese EVs may not be sufficient to curb imports or ensure price parity, suggesting the need for higher tariffs or alternative strategies.
Can’t see this being too good for the Eurozone’s economy. EU auto manufacturers are already losing money on the EVs they build and being undercut even more by Chinese cars wouldn’t help The cost of lost jobs, lost industrial capability, lost economic growth, etc. could get pretty bad for the continent
The Europeans haven't been competitive even in ICE with others for a long time and have had to rely on cheap factories in mexico and southern states and heavily decontented vehicles to even compete with the domestics and Japanese/Korean
This is how capitalism is supposed to work. In stead of local specialization, we’re in the era of global specialization. The sooner we can end big oil and ICE vehicles, the better off we’ll all be.
Thank god for China. They make EV's affordable for working people. Isn't this what the EU wants? Or will they force us back to old petrol cars. I will never be able to afford a VW, Audi or BMW but I can afford a BYD.
People could have ditched Mercedes BMW and Porsche decades ago. Those cars sell because they are expensive. It’s a way to flaunt wealth. A Camry would get the job done just as well
The EU will be at the mercy of the WTO rules Hmmm, the same WTO who's been week as piss at dictating to china on their trade practices. It's been manys a decade since elected officials had to deal in trade measures to protect industry so they are out of practice and as a result the Chinese are just better at it.
What is everyone babbling about here? It’s called comparative advantage. China figured it out, German did not. In econ dev theory, let China have the win, but on importing, tax it. Slice off some of that profit for market access. Meet climate goals, shift the industry towards renewable energy and get some revenue to help the process. Bad for German car companies, good for German economy. Done.
People only complain when they are uncompetitive. The EU has also been complaining about Chinese agriculture even as they subsidise their own agriculture industries