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BYD is a commercial company with US financing. They are leading in vertical integration and battery tech which allows them to sell at these price points. They are expanding in export markets because they think they can make money not because of "overcapacity".

Chinese companies always want to export. Same as American companies, if they could.

The world is a bigger market.

They now have a competitive advantage in EVs. Of course they want to export.

I think their strategy was always to dominate EV exports, it’s just that until now their supply was mostly eaten up by internal demand. They do need to pay attention to their margins though, if they aren’t high enough this won’t be sustainable (and ya, tariffs).

China is hitting that demographic cliff much quickly than Japan did, so I wonder what that will mean in a decade or two. Maybe they will turn more attention to robots next.

I disagree with the notion that Chinese EV makers, including BYD, have always aimed to dominate EV exports. Their focus has primarily been on satisfying domestic demand rather than targeting overseas markets like Tesla or VW.

Given that they've only 1 year something ago emerged from COVID-related restrictions, a shift to an export-focused strategy would require substantial time and effort in research, planning, and marketing to become competitive internationally. While BYD, as one of the earliest players in the EV market and with existing facilities in Mexico and the U.S., may be a step ahead, I believe they're just at the initial stages of exploring overseas opportunities. The EV market competition is likely to intensify in the coming years, but it's still early days for Chinese EV makers in the global arena.

Excess capacity argument is more and more dog whistle for PRC exports that eats away at historically western/incumbant market share. It's just exports. Right now PRC exports ~15% of domestic production. Germany, Japan, South Korea exports >50%, I think US ~20% due to RoW not caring much for SUVs. But light vehicles like Tesla has >50% of Tesla export markets. PRC has a lot of absolute excess capacity, but not really relative to total production vs other exporters. The aggregate export of non PRC players is probably equivalent to another 15-20% of PRC production, a big chunk of which is the PRC market itself. It's still early days, no reason PRC not to aim for 50% exports (15m cars), and if there's tariffs in west, ban domestic western cars and chip away at RoW share. EV also ties into energy charging/infra exports, indigenous semi, RoRo ships etc. There's a lot of strategic synergies.

10% of China’s capacity being exported is more than N% of any of those countries listed, absolute numbers do matter in this case. At much smaller Germany’s 50% there will be really huge push back from other countries, I don’t see it unless Chinese companies build factories abroad, which is what China essentially forced the western players to do in China anyways.

The USA exports $50b of cars but imports $150b of cars, you can’t call it a net exporter.

It matters to other auto producers countries to protect their industries, which is just a handful of countries. Hence the rhetoric from these countries that PRC auto having excess capacity is a problem, when it's just competition. As if PRC producers not entitled to grabbing as much share as they can. IMO PRC fine with building plants abroad, and is doing so. Also fine with PRC level of import tariffs, since they have no issue competing on price. But that's also what makes it none starter in said countries, since PRC producers are positioned to out compete domestic brands if allowed in comparable PRC JV or tariff arrangements. So I think ultimately foreign brands are out in PRC, and PRC brands out in foreign car producing countries, and the fight is over shares from RoW non producers. Which is just as well, because the big picture is exporting PRC charging standards, loading cars with PRC chips and all the knock on affects, stuff that makes unfettered PRC cars in nonfriendly PRC markets even less feasible.

I didn't say US net exporters, I said some US auto companies in segments RoW demands makes significant % of revenue from export market. Which will likely be same for PRC - most producers / models will stay domestic. The few that ventures abroad for export share has no reason not to aim high. In that context 10% is not excess capacity, it's just the beginning.

> China is hitting that demographic cliff much quickly than Japan did, so I wonder what that will mean in a decade or two. Maybe they will turn more attention to robots next.

I don't think it'll matter as much as people think. They still have high unemployment and a relatively high rural population. They still have lots of excess human capital to draw from.

If they can put 50-70 year olds to work sure.

One road one belt was a political decision to have more influence.

In terms of what rails transport can process versus container ships, it's barely useful.

They downsized one road one belt loans to a minimum last years. Most likely because countries can't afford those predatory % ( the details are also not open).

The years that China had "interesting" growth are over. Perhaps EV's, who knows.

There is an article in China daily somewhere a decade back discussing the niche between container ships and air freight. It seemed to be stretching at the time, I think the rail connection to Europe was more about face than practical use, but a lot of points in between in Central Asia aren’t served well by sea.

Yeah. The main differences are:

Plane: very small load, fast ( 1 day)

Train : small load, slow ( 2 weeks), obstructing regular traffic for long trains

Containers: huge load, slow ( 1 month)

It might make sense for some food goods that would spoil on a ship and aren’t high enough margin for a plane trip. But that isn’t really much.

> The best argument I liked so far to what's happening is that this flooding of Chinese EVs is due to the internal slowdown of EV sales.

They're dumping on external markets. Tariffs will put a stop to this.

We'll likely want tariffs if we want to give our domestic auto manufacturers time to adapt. And domestic automotive industry is important to maintaining a manufacturing base for defensive purposes during wartime.

> They were just busy building inside but now that they need new export markets and have mostly finished building inside, they are looking outward.

Their domestic market is saturated and experiencing economic headwinds.

They're looking for external buyers because their internal economy has slowed. There wasn't enough real domestic consumption to prop it all up.

> They can out build the West, the developing world and India.

For a while. India, Mexico, Vietnam, et al. are ramping up.

>We'll likely want tariffs if we want to give our domestic auto manufacturers time to adapt.

Also known as "<Country> First" policy, wasn't too long ago (and presumably still is) that such policies were/are heresy.

Note, I agree with protecting domestic economies; I am all for America First, Japan First, UK First, France First, et al.. I'm just amused the same people who screamed "Orange Man Bad" turn on their heels to advocate the same policy just under different words.

The reason the world largely went away from high tariffs are many. In the first place they're redistribution scheme from consumers to industries that have the political influence to lobby for tariffs. Secondly they make the domestic industry lazy and increasingly noncompetitive (not just in pricing, also in R&D and market fit). After some years of this, the foreign competition will be so far ahead that they're able to out-compete the domestic industry while producing in-country (see Japanese/German car makers in the US).

Regarding cars specifically, which group do you think is bigger: car buyers that would get a $20,000 gift from the Chinese taxpayer (and likely spend those savings in the domestic economy) or people employed in car manufacturing?

Tariffs only apply to countries that make cars really, so don’t expect Australia to care much if BYD is selling below cost. America and China already have mutual tariffs in each others cars, China has those with most car producing countries (put in place originally and ironically to protect the Chinese car market)

> put in place originally and ironically to protect the Chinese car market

Patrick Boyle has a fantastic essay on this:

https://www.youtube.com/watch?v=rZgaj0jScOI

There is a 10% tariff in cars from China into the EU (I’m sure that’s reciprocal).

> Europe levies a duty of 10% on cars imported from China. That compares with duty of 27.5% in the United States, and China's manufacturers have taken advantage to carve out a significant and rapidly growing foothold in the European

https://www.cnn.com/2023/09/13/cars/europe-china-electric-ca....

Of course, Europe is more than just the EU. And I don’t think the EU will shy away from protectionism, since China does the same. But in that case I’m sure BYD will just open up a factory in one of the cheaper EU countries (if they haven’t started that already).

> Of course, Europe is more than just the EU. And I don’t think the EU will shy away from protectionism, since China does the same. But in that case I’m sure BYD will just open up a factory in one of the cheaper EU countries (if they haven’t started that already).

Yes, already happening in Hungary.

https://www.byd.com/eu/news-list/BYD_to_Build_A_New_Energy_P...

They’re doing to EVs what they did to PVs.