Four years after the United States-Mexico-Canada trade agreement (USMCA), Mexico and the U.S. face the prospect of cheap Chinese electric vehicles dominating a fast-growing market and undermining GM, Ford, and Tesla.
Outcompeting by having a nation subsidize the cost. Until local manufacturers go out of business because they can’t compete. Then China owns the entire industry she jacks to the price.
It’s weird that this has to be explained to Americans - this is how much of Big Tech got to where they are, except they call it “disruption”.
BTW this shows perfectly that free markets are not a be-all-end-all thing. It’s a tool, and if it produces outcomes that you don’t like, you can adjust it for better outcomes. The hypocrisy here is not that they pretend to worship the market then cry foul when China enters it on their terms, but that they do adjust it for their benefit all the time, and only pretend to worship it when people ask for their fair share.
While we’ve seen this cycle play out quite a few times in Big Tech, I think a lot of people just aren’t aware of what it is. I’ve had friends decry how, “Uber is now basically as expensive as a taxi.” I point out how Uber is only recently profitable and see people’s minds get blown.
Uber’s costs are because of oversized compensation packages for executives and lots of R&D put into autonomous driving. The bulk of the actual cost of operation is on the shoulders of drivers who wear down their vehicles for the sake of Uber. All Uber does is provide an app, which is laughably cheap by comparison.
GM, who just announced a $6 billion stock buy back once they knew tariffs would keep them safe from having to compete with Chinese EVs, that GM?
This sort of stuff is realistically why I have no sympathy for the major US automotive manufacturers. The only reason I don’t just say “Screw them, let Chinese EVs drive them out of business,” is because it would put so many people out of work in their plants who have no role in these decisions. Barring some fantasy where the Chinese companies establish US plants and offer equivalent or better union contracts for current employees at GM, Ford and Chrysler, these companies should simply be bound hand and foot in terms and conditions whenever something is done by the government to help them. Like, make those protectionist tariffs conditional on them hitting investment targets in relevant technologies, raising worker pay and benefits, reducing cost to the customer and a ban on stock buybacks for the duration of the tariffs being valid.
Perhaps “barely a blip” wasn’t the most accurate phrasing but they’re not exactly crushing the competition. GM is at 16.5% while Toyota is #2 (14.4%), Ford #3 and Hyundai is #4. Stellantis isn’t even a US company so I don’t know why people still think of Dodge/Chrysler/Jeep as American brands. The whole market is pretty mixed and these tariffs on Chinese vehicles are protecting the market not US companies.
I mean the US is also doing that. It’s not a subsidies issue; it’s the fact that Chinese companies are using subsidies to actually make things while US companies are just pocketing them.
I mean nobody is blocking US goods, but the subsidies are definitely a thing. Also why would China even block US EVs when they’re uncontestedly winning that market?
Lmao there’s a guy who usually posts a long response to these “subsidies” claims bullshit, but I think they got into a pissing match with a mod in the comments and got banned lmao.
Jist of it is: China’s subsidies are negligible compared to the US, and what they’ve actually done is created a competitive domestic market with a large number of players. Unless you think Chinese people are all puppets, even if China (as a country) owns the industry it would not prevent internal competition that drives down prices. Moreover, China does not offer per-unit subsidies on export. In fact, Chinese EVs exported to Europe are something like 40% more expensive than domestically for the same model.
You’re introducing an argument as a way to undermine the viewpoint that’s opposite to yours.
No one said it’s fine “when we do it”. That’s not the point being discussed.
The other bigger issue here is that these new cars are coming from a region that has a horrendous track record for safety and quality. EVs when done right are still a considerable risk with battery fires, but the ones manufactured in China are much worse for quality and safety. In the next few years, as these cars flood markets around the world, it will be a massive issue.
They seem safe enough to pass the EU’s safety standards, which are much higher than the US. Also this blanket “quality issues” argument without specific evidence is terrible. If we’re going off of quality in recent history, American manufacturing is down the toilet in terms of quality - just look at Boeing.
This phenomenon is primarily due to fears of high repair costs, lack of technical information, and long lead times for replacement parts.
Vehicles that use batteries as structural elements are more prone to being totaled by insurance companies.
I think you’re missing what I’m saying here. I’m pointing out that Chinese auto makers don’t have the same processes as more experienced companies. They’re just slinging out cars into foreign markets with almost no extra work.
Besides, the article didn’t say the cars are “fine”, it quoted someone saying that they’ve seen some cars that would have been fixed quickly if it was a domestic brand because of part availability.
Outcompeting by having a nation subsidize the cost. Until local manufacturers go out of business because they can’t compete. Then China owns the entire industry she jacks to the price.
It’s like no one has been paying attention.
It’s weird that this has to be explained to Americans - this is how much of Big Tech got to where they are, except they call it “disruption”.
BTW this shows perfectly that free markets are not a be-all-end-all thing. It’s a tool, and if it produces outcomes that you don’t like, you can adjust it for better outcomes. The hypocrisy here is not that they pretend to worship the market then cry foul when China enters it on their terms, but that they do adjust it for their benefit all the time, and only pretend to worship it when people ask for their fair share.
While we’ve seen this cycle play out quite a few times in Big Tech, I think a lot of people just aren’t aware of what it is. I’ve had friends decry how, “Uber is now basically as expensive as a taxi.” I point out how Uber is only recently profitable and see people’s minds get blown.
Uber’s costs are because of oversized compensation packages for executives and lots of R&D put into autonomous driving. The bulk of the actual cost of operation is on the shoulders of drivers who wear down their vehicles for the sake of Uber. All Uber does is provide an app, which is laughably cheap by comparison.
You mean Ford, GM, and Chrysler who make useless pieces of garbage and also outsource production to Mexico?
Who also got bailed out by the federal government for going bankrupt back in 2009?
GM, who just announced a $6 billion stock buy back once they knew tariffs would keep them safe from having to compete with Chinese EVs, that GM?
This sort of stuff is realistically why I have no sympathy for the major US automotive manufacturers. The only reason I don’t just say “Screw them, let Chinese EVs drive them out of business,” is because it would put so many people out of work in their plants who have no role in these decisions. Barring some fantasy where the Chinese companies establish US plants and offer equivalent or better union contracts for current employees at GM, Ford and Chrysler, these companies should simply be bound hand and foot in terms and conditions whenever something is done by the government to help them. Like, make those protectionist tariffs conditional on them hitting investment targets in relevant technologies, raising worker pay and benefits, reducing cost to the customer and a ban on stock buybacks for the duration of the tariffs being valid.
It isn’t 1970 anymore. Those three manufacturers are barely a blip on the radar in the US.
If they were barely a blip, they wouldn’t have been bailed out for
17.450 billion dollars.Perhaps “barely a blip” wasn’t the most accurate phrasing but they’re not exactly crushing the competition. GM is at 16.5% while Toyota is #2 (14.4%), Ford #3 and Hyundai is #4. Stellantis isn’t even a US company so I don’t know why people still think of Dodge/Chrysler/Jeep as American brands. The whole market is pretty mixed and these tariffs on Chinese vehicles are protecting the market not US companies.
https://finance.yahoo.com/news/teslas-us-market-share-now-tops-volkswagen-subaru-and-bmw-161055575.html
The bailouts were given to save US manufacturing jobs and all these companies besides Ford have fully paid back those loans.
I mean the US is also doing that. It’s not a subsidies issue; it’s the fact that Chinese companies are using subsidies to actually make things while US companies are just pocketing them.
I get a craving for corn whenever someone says subsidies.
Is the US? What us car company is doing it to such a degree name countries are blocking their goods?
Exactly, if subsidies were actually invested properly countries might actually care about USA vehicles
I mean nobody is blocking US goods, but the subsidies are definitely a thing. Also why would China even block US EVs when they’re uncontestedly winning that market?
Lmao there’s a guy who usually posts a long response to these “subsidies” claims bullshit, but I think they got into a pissing match with a mod in the comments and got banned lmao.
Jist of it is: China’s subsidies are negligible compared to the US, and what they’ve actually done is created a competitive domestic market with a large number of players. Unless you think Chinese people are all puppets, even if China (as a country) owns the industry it would not prevent internal competition that drives down prices. Moreover, China does not offer per-unit subsidies on export. In fact, Chinese EVs exported to Europe are something like 40% more expensive than domestically for the same model.
Ah, I see. So it’s cool when we do it (fossil fuel and ag subsidies, the auto industry bailout in 2008, etc.) but not when they do it.
Got it.
But but but, rampant capitalism good
You’re introducing an argument as a way to undermine the viewpoint that’s opposite to yours.
No one said it’s fine “when we do it”. That’s not the point being discussed.
The other bigger issue here is that these new cars are coming from a region that has a horrendous track record for safety and quality. EVs when done right are still a considerable risk with battery fires, but the ones manufactured in China are much worse for quality and safety. In the next few years, as these cars flood markets around the world, it will be a massive issue.
They seem safe enough to pass the EU’s safety standards, which are much higher than the US. Also this blanket “quality issues” argument without specific evidence is terrible. If we’re going off of quality in recent history, American manufacturing is down the toilet in terms of quality - just look at Boeing.
https://www.euroncap.com/en/results/byd/dolphin/50011 Seems relevant
I’m sorry but 1 star out of 5 on the European NCAP is terrible ! This car is a death trap !
I would never set a foot in a Chinese …
Oh wait ! I was looking at the Jeep wrangler, never mind.
The BYD has a 5 star rating as well as an the other chinese cars I checked.
Euro NCAP - Jeep Wrangler
People wrongly assume all Chinese manufacturing is aliexpress fodder.
Lmao this is coming from the same safety organization that approved the Tesla Cybertruck?
I’ll take my chances with a car that’s seen EU approval.
https://www.carscoops.com/2024/03/chinese-evs-become-virtually-uninsurable-in-the-uk-says-report/
The reality is that I don’t think any EV is “safe” as far as the batteries go
It’s funny because your article states the vehicles are fine. Good job on dropping a link you did not bother clicking yourself.
I think you’re missing what I’m saying here. I’m pointing out that Chinese auto makers don’t have the same processes as more experienced companies. They’re just slinging out cars into foreign markets with almost no extra work.
Besides, the article didn’t say the cars are “fine”, it quoted someone saying that they’ve seen some cars that would have been fixed quickly if it was a domestic brand because of part availability.
Tesla has been subsidized by years. The difference is china delivers and in America an asshole get rich.
So the CCP party members aren’t getting rich?
Of course, they and the Wang Chaunfus.
I mean they are but they’re also delivering.