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Comment by nyokodo | Hacker News Reader

> As a consumer, isn’t that a good thing?

A foreign nation dumping massive volumes of their heavily subsidized production onto your local market and putting your domestic producers out of business is not a good thing for any nation. If China could produce EVs far cheaper than the United States without using vast amounts of coal, and without those heavy subsidies on the whole supply chain let alone on manufacturers directly, then there's a free market argument for going tariff free, but as it stands going tariff free would be just letting dirty, unfair competition to go unchecked. It'd be political suicide let alone national industrial suicide.

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Your comment makes me wonder if you read the article at all. Several of your concerns were addressed therein.

One a more general note, even accepting your arguments about subsidies and production conditions doesn't overcome the fact that a lot of the vehicles depicted here are just better designed and more interesting-looking than western (and Japanese) offerings.

Yeah people conveniently ignores US directly waterhoses their auto manufactures with subsidies and bail out money ontop of consumer tax credits to drive consumption. More in aggregate than the few years PRC have been focusing on EV. Different is PRC subsidies focused on trying to find actual winners who increases efficieny and brings costs down, instead of senators trying to keep their voter base happy. Or lame excuse that PRC products made with dirty coal vs that sweet clean US LNG (unproven with evidence to contrary). TLDR US decades of unfair US subsidies with USD money printer still can't compete against a few years of PRC subsidies. I wonder if these folks would accept a PRC plant built in US on JV model like they did in PRC, chances are no, because deep down they know PRC is simply just better at volume manufacturing than US.

The auto-industry are full of them self longing for the high margin rich person market. BYD etc. seems like a good way to bring them back to earth.

Agreed. I am a huge fan of defending domestic supply chains and manufacturing capacity, but not creating artificial barriers because domestic producers are lazy and have no will.

If legacy US auto and Tesla choose to not make cheap EVs, allow China to sell into the market (with strong right to repair and consumer protections around anything where these products could be used in an adversarial way, telemetry, data security, cloud dependency optional, etc). If these builders start delivering cost parity vehicles, implement tariffs accordingly to defend the domestic market from dumping (very common).

Worst case, we send all the battery packs off for shucking to use in stationary storage, or recycling by Redwood Materials. That’s US refined battery feedstock ore now. Regardless, we’ve got lots of combustion miles to replace with EV miles. We must move faster.

> but not creating artificial barriers

If a product is artificially cheap then making it more expensive is removing an artificiality, not adding one.

"Artificial" is perspective, politics, and economics in this scenario. "The US allows VC backed firms to dump into markets below cost in an attempt at winner take all, but when another nation state does it, that is worse?" for example.

TLDR What are you optimizing for, what are the incentives, and what is the intent of various actors. The math is the easy part, imho.

VC expects a fair return, and they invest all over the world. When governments subsidize an industry their behaviours will be quite different.

What’s it called when a government maintains a near-zero interest rate for years allowing that same VC money to prop up otherwise unprofitable tech companies? That’s a subsidy right?

Unlike communists they don't pretend to benefit us when they print money for the top of the pyramid.

> when another nation state does it, that is worse?

When the industry in question is crucial to retaining domestic industrial capacity to counter that foreign nation’s hostile geopolitical agenda, yes it is worse!

Then the industry should take a fair shot at serving the low end market instead of hiding behind tariffs, no? Or are we going to wait around while legacy auto only sells $40k-$80k combustion pickup trucks and SUVs and Tesla doesn’t build a Model 2?

Protect markets for legitimate reasons, not out of domestic nepotism and laziness. BYD gets government support, US auto should get the same, but you actually have to show progress towards desired outcomes to justify cross border protectionism.

https://pca.st/episode/830546d3-e3d5-42c7-9fb9-9710fc1604ac?... (citation wrt China EV not dumping)

> should take a fair shot at serving the low end market instead of hiding behind tariffs, no?

That begs the question. They're only "hiding behind" tariffs if the price of Chinese manufacturing were fair in the first place but it's not. In this environment the Chinese manufacturers are economic aggressors and the Federal government is shielding local manufacturers from unfree competition.

A little google searching says BYD, for example, makes somewhere around $1250 in profit per vehicle. What do you mean by “artificially cheap”?

Aren’t electric cars in America subsidized by at least a 7500 dollar tax credit and probably not from the local or state gov? Wouldn’t it be better if we let them compete and then also subsidized cheaper EVs In the USA rather than the high end Tesla’s and stuff?

That's a subsidy to purchase the car, not manufacture it. The current US system just increases EV car total demand, it doesn't lower the production costs of the cars themselves.

I don’t get the practical difference, sorry. I’m happy to learn but it seems like six vs half dozen to me. Either way you’re subsidizing the car pipeline.

I feel like China is up and coming and the west is scared and performing knee jerk reactions rather than effective governing around this change in dynamic.

You still have to borrow money to: start the car company, pay yourself, pay workers, build a factory, get raw materials, design a car, then manufacturer and sell it before that $7,500 subsidy kicks in. Compious amounts of subsidy earlier in the pipeline makes it substantially easier to do all the of above steps. How much easier would it be to start a company if your salary and the salary of the employees was paid for by the government before you ever made and sold a product?

so it's six of one now, vs a half-dozen later, except that you have to get to later to get the half dozen, and there's no guarantee you'll get there.

Difference is - if manufacturing would be subsidized, then such company could export cars subsidized by US taxpayer, without tax payer seeing any benefit for US

This argument makes the most sense to me, thanks. Hopefully American auto manufacturers will get a clue and build smaller cars. You could have several in-town ranged compact cars from the batteries and resources used for one EV Hummer, for instance.

>That's a subsidy to purchase the car, not manufacture it.

It's a subsidy for the manufacturer, as the manufacturer sees you got a credit from the government, and simply raises prices accordingly. Done as a way to meet demand and ensure the manufacturer works for the money.

This is also fundamentally why college and house prices keep going up, as the government subsidizes student loans and mortgages, and so colleges and such simply raise prices.

> Aren’t electric cars in America subsidized by at least a 7500 dollar tax credit

Yes, which is bad in my opinion, however subsidies in the form of US tax breaks stimulate US consumption it doesn't distort foreign consumption significantly, but also major foreign consumer markets put tariffs on US vehicles imports anyway for the same reason we are doing so.

That makes sense, thanks. I would still prefer American companies get onboard with tiny electric cars rather than the massive electric trucks happening. This is like the 70s all over again with the gas crisis and American auto manufacturers being caught out.

Hey if China wants to spend their money giving me a cheaper car, I’ll take it.

> vast amounts of coal

Legitimate concern. Let’s make regulation around that instead, not just a blanket tariff.

Okay. Are you going to let the car makers self report energy cleanliness? Are you going to go do the survey?

Force them to pay the US to send inspectors. We’re right back at tariffs but this time with a fair rule that can be applied equally to foreign countries rather than China in particular.

> Hey if China wants to spend their money giving me a cheaper car

I care more about ensuring America has sufficient industrial capacity than I do short term cheaper EVs.

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