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God forbid anyone get a cheap EV before US car companies sort out which $50,000+ car brand can position itself as the “luxury” one before accepting that they need to build cheaper models.
The Chinese ones are cheap because they’re being subsidised by the Chinese govt to be sold that cheaply overseas as a deliberate economic attack tho
The Chinese state isn’t selling cars under the cost of construction. The subsidies come in the form of cheap (increasingly nuclear) energy, publicly funded STEM/trade schools, and public health care. These socialized benefits reduce the real cost of living in China and grow the domestic consumer car market, along with lowering the per-unit production costs.
American car companies have long been hobbled by the obscene cost of employment benefits - high salaries to cover housing costs and student debts, high private insurance premiums, high administration overhead, the constant need to fund stock buybacks in order to keep the value of their stock-incentives up. The deal with the devil they cut with Truman - to make medical insurance a private tax write-off rather than a public good - combined with the enormous Reagan Era tax cuts and rapidly metasticizing private health industry administrative overhead, drives up the cost of each vehicle by thousands of dollars.
This sucks for the car companies, but is fucking awesome for the FIRE sector. And since 30% of the US GDP is tied up in financing, insurance, and real estate growth, our private automotive industry is effectively forced to subsidize their profits. That’s what makes American cars so expensive relative to their East Asian peers.
I’m usually against tariffs but in this case it seems like a pretty fair tit for tat to China basically removing the budgetary concerns for their manufacturers that said manufacturer’s international counterparts won’t have.
Subsidizing local production for local markets is fine enough, but exporting products made with an infinite money glitch active is more or less an intentional play at market capture.
And before some sinoboo tries to gatcha me I do also object to examples where the west subsidizes domestic production for international markets.
I prefer the circular solution. Make a tariff equal to the delta, and use the tariff to subsidize local production and reduce the delta.
Although the BYDs and GWMs and MGs are getting popular in Australia, I have literally never seen a Chinese EV in the States outside of locally built BYD busses, and BYD cars have distinct designs that are fairly easy to spot. So this feels like posturing to me.
I have literally never seen a Chinese EV in the States outside of locally built BYD busses, and BYD cars have distinct designs that are fairly easy to spot. So this feels like posturing to me.
The Chinese business strategy has been to target East Asian, Indian, Russian, and West African car markets. They’re not trying to compete with US cars in the United States. They’re displacing US export markets in the Third World. You might be able to find them south of the border, however. In the first five months of 2023, Chinese exports to Latin America reached over 330,000 vehicles with a special focus on Mexico and Chile.
Meanwhile, the US has had a long and storied tradition of open hostility to foreign car manufacturers. Consequently ten different car manufacturers have plants in the United States.
These taxation and regulatory provisions are shockingly similar to the Chinese rules that guys like Biden and Trump deride as anti-competitive. And given the quality of US vehicles has long been sketchy at best, with a continued reliance on ICE engines in a market that increasingly favors the cheaper and more reliable electric vehicles, its questionable how long the Big Three domestic brands can even survive.
The government will make sure they survive. They’re to big to be allowed to fail.
Maybe. But they won’t grow like their Chinese counterparts.
They aren’t a small business. They’re multi-national corporations.
Hard to function at the multi-national scale if you constantly need bailouts.
And there are plenty of Republicans who would love to see Detroit Go Bankrupt.
I’m frankly getting pretty goddamn annoyed at all the people who relentlessly fail to understand that the PRC is heavily subsidizing production of basically all of their EVs in the interest of undercutting literally all other countries that are (or are trying to) produce EVs.
By all means, research what I’m saying here to confirm its veracity - in fact I encourage you to. This is economic warfare, plain and simple.
Its not just the EV, its every layer of the supply chain. From the lithium they mine, the batteries they make out of it, the circuits and metal fabricating. Their government subsidies the electricity, tools, facilities, labor, etc. I work in the engineering field and I see bits and pieces of this everyday and have seen it for decades because I’m forced to source parts from China.
I know. I’m trying to dumb it down a bit because the dipshits who argue about this stuff don’t seem to understand the incredible level of complexity of modern-day high tech consumer product manufacturing logistics.
You say this like it’s somehow bad?
…it is bad. It’s particularly bad because the PRC is running the show, and they very certainly do not have the best interest of any group but themselves (as in, the Party, and particularly, the Party Committee) in mind.
Having a cheap supply chain that incentives and heavily costs cut for EVs is bad? I can’t follow this
The PRC is trying to crush any and all competition. This isn’t them being ecologically friendly or magnanimous in any way. The entire point of this is so they can do the best they can to corner the market, which is easier when the government you operate under just hands you money so you can immediately recoup substantial fraction of your balance sheet liabilities. They are doing this because they want to control the EV market, which will give the PRC a substantial amount of geopolitical power (case in point: look at Taiwan with their chip foundries). And, of course, Party officials and the corporate leadership of their car companies stand to make a fair bit of dosh too.
More broadly, I don’t like when any country does this, including the US. The primary reason I’m singling the PRC out here is because that’s the topic of the post.
EVE Online taught me this lesson. Those with the resources to do so will take a loss to price you out of the market, because they know you can’t take the losses nearly as long as they can.
And that’s precisely what’s happening here. A car manufacturer with a whole-ass government subsidizing it is going to be able to operate just fine at a loss pretty much indefinitely, whereas a normal car manufacturer would sooner or later simply go bankrupt (pointedly ignoring the whole “too big to fail” idiocy, which to be honest, while similar, isn’t quite the same thing).
And what do you think the EV rebates in the US are?
Fuck the rich. I need a cheap, safe, and reliable vehicle to get to work.
Do you understand the difference between subsidizing domestic purchases and subsidizing export production?
Yes, I pay for the domestic subsidy, not the chinese subsidy.
That is a hilariously myopic and egocentric way of looking at the situation, to the extent that it makes me suspicious that you’re on the conservative spectrum.
Do you understand that free money on domestic purchases can be used however the corporation pleases? There’s not some magical divide.
Bro. The rebates go to the buyer. They don’t go to the corps. It’s specifically targeted to make it cheaper for US residents to buy EVs in America.
Edit: actually, more foundational question: do you understand the difference between production subsidy and purchase rebate? And do you understand that the rebate is not applicable outside of the US?
So the company doesn’t get the sale price? Why does the customer need the rebate if they haven’t given the company that money in the first place?
Do you not understand how a purchase works?
Take your bad faith bullshit somewhere else.
I think I’m gonna block you because you seem like kind of a jerk
