Though depending on the wording, they may be able to just build a plant in Mexico and take advantage of NAFTA. I can't tell from the whitehouse post on the tariff if it's tied to country of the manufacturer or just country of origin (usually it's origin).
Doing very well in New Zealand and Australia
The dealers doing even better with 200% markups....
In the past "made in Germany" used to have derogatory connotations due to German goods being worse than British ones too.
As for regulations, the BYD cars consistently rank very highly on the stringent Euro NCAP tests: https://www.euroncap.com/en/results/byd/seal-u/50187
You get what you pay for.
In the case of electric cars, China has their own domestic market that actually wants to drive a decent car, and so they are building for that.
BYD cars aren't particularly "cheap" in the way a "Made in China" spatula is.
They're dumping domestic overproduction on foreign markets. You do that long enough and you can weaken your foreign competitors in their domestic strongholds. This can destroy high-value domestic jobs, lead to atrophy of expertise, and is especially bad to "strategic" sectors of the domestic industrial base.
Tariffs are a tool to protect domestic markets against dumping. Every other nation's automotive companies are free to compete in Western markets because they're not actively engaging in dumping. Their competition strengthens domestic rivals because it is fair and on equal footing.
Australia doesn't care because it doesn't have a domestic automotive industry to protect, so Chinese overproduction is essentially just foreign subsidized stimulus to the Australian population.
Whenever competitors showed up, they laughed at them, before panicking when those upstarts starting challenging their market dominance. It happened with Japan, Korea, and now China.
So, if you feel China competes unfairly, close off your markets. Countries without a local auto industry will accept Chinese EVs readily. BYD & co. will snatch American & EU automakers' foreign markets before they come home to swallow you alive by building factories in low-cost countries like Bulgaria, Mexico, & Brazil.
Basically, the Toyota cycle will repeat itself because Western (esp. American) automakers spent hundreds of billions on share buybacks instead of R&D.
But at the end of the day, we're protecting our own interests.
Just like Jack Welch and General Electric: financialize companies to the max, optimize for quarterly share increases, and earn billion-dollar bonuses. When the company inevitably collapses/shrinks after you retire, it's no longer your business.
Whether it's China's foray into nuclear, wind power, carmaking, solar, etc., they simply copy existing Western designs and keep developing them diligently while the incumbents optimize for quarterly earnings.
A company that builds a robotic factory from scratch and that only makes electric cars will be able to make cheaper cars than one who already has a huge headcount of combustion car workers. Auto workers are unionised and often working in factories bound by political agreements. You can't just close the combustion engine plant or reeducate everyone to make electric engines, it's years of negotiations.
If you start from scratch you don't have that problem, and you don't need to include that cost into the price of your cars.
That said, it makes perfect sense for a civilised society to protect their workers while they are reeducated and reassigned to new work by blocking foreign competition. But only for a while, while going all-in on the required changes.
Reality can't be ignored forever.
https://www.reuters.com/business/autos-transportation/volksw...
The factory stays on the same place of an old Ford factory. Ford left...
Fun fact: The street is called Avenue Henry Ford.
If Trump is elected, expect then NAFTA to be changed to exclude competitors to Tesla in some fashion. There is already a lot of expectations that a Trump win will heavily benefit Elon: https://www.nytimes.com/2024/10/29/business/economy/elon-mus...
EDIT: Just to clarify, I would love to be wrong about these concerns, as there will be some who do purchase Chinese EVs. Also it is not about xenophobia, it is about geopolitics and cybersecurity. If someone can reply showing me how my concerns about the CCPs ability to weaponize these cars are unfounded, I would greatly appreciate it.
Care to elaborate how being spied upon or worse by the CCP could be a good thing?
Additionally, depending upon how any hypothetical CCP back doors get implemented, you might get the NSA and others spying on you as well.
Yeah, due to Chinese state subsidies and other assistance, China has a competitive advantage in automobile manufacturing as well as in many other areas. The US needs to show its commitment to free market principles and lets its auto industry die already.
Even say EU vs US is not so rosy in trade wars. Remember how German government played down VW's dieselgate? Every single state has something similar, even if not on same scale.
But I have been told zealous adherence to free market dogma will guarantee national security, without explicitly considering it!
[Also, I'm being sarcastic. I thought people would pick up on the double-standard in my original comment, but I guess free marketers can be that kooky sometimes. Everyone should realize by now China is playing a different game vis-a-vis trade than the free marketers want to play.]
I assumed they would say something like tariffs=bad, unless it's to overcome market manipulation by some state actor.
Oh, they totally do. See https://foreignpolicy.com/2020/11/26/mcdonalds-peace-nagorno... (paywall bypass: https://archive.is/lNwNQ) for an example:
> Friedman’s claim was simple: The benefits of economic integration reduce the policy choices open to governments, making war—which disrupts that integration—so unattractive as to be practically unthinkable. If that sounds like the theory of the capitalist peace as understood by Montesquieu, Adam Smith, and Richard Cobden, well, it pretty much was.
If you're going all-in on the free market and globalization, you need an answer to the national security objections, and that (unconvincing) answer is the risk to profit that conflict represents makes conflict unthinkable.
The thing that free market absolutists frequently forget that market values are not the only values, even among market participants. That's especially forgotten by forum participants who read a book proceed to swing around Econ 101 like it's a club.
The Volkswagen CEO has the German chancellor on speed dial. If your government's politicians have an emergency session on the future of a particular company there is no "free market".
Given that the car industry here in Germany opposed the (even much more moderate) tariffs the state subsidies certainly don't seem to scare them more than a trade war. It's just a repeat of the automotive industry dark ages of the 70s/80s when tariffs vis-à-vis Japan were enacted based on the same reasoning. You're just gonna have 20 years of no competition.
China is going to win the markets in the rest of the world, which is where the bulk of cars go now. It's gonna be funny when everyone in Asia is driving a 15k modern electric car and we sit here driving old second hand gas cars behind a tariff wall. It's like a reverse Soviet Union situation
Isn't the German car industry pretty much all-in on China, and thus dangerously exposed to any retaliation? IIRC, they have lots of factories there and depend on their output for a lot of their revenue. It would be pretty easy for China to shut them down or make life difficult them with some kind of pretext.
Boy, do I wish governments shared business's wise preoccupation with next year's numbers.
They seem quite engineering focused which seems to be serving them well.
https://www.ft.com/content/8179bd8a-4d96-43a9-a8f9-074f9a275...
On https://apnews.com/article/microchip-electric-vehicles-batte... Tesla is only mentioned by one state loosing a project.
"Many of the companies drawing the biggest subsidy offers — such as Intel, Hyundai, Panasonic, Micron, Toyota, Ford and General Motors — are profitable and operate around the globe. Some lesser-known names in the nascent EV field are getting big offers too, such as Rivian, Volkswagen-backed Scout Motors and Vietnamese automaker VinFast."
At any rate, $2B is a drop in Tesla's bucket; their quarterly revenue is around $25B now. That $2B may have been given at a critical time in Tesla's development and growth, but today it would be 2% of their yearly revenue.
"BYD received a total of 37.1 billion yuan in tax rebates over the five-year period, nearly four times the 9.3 billion yuan it received in subsidies. Additionally, BYD has secured long-term bank loans at interest rates between 2.05% and 2.98%, lower than the one-year prime lending rate of 3.35%, according to the company filings. "
So it sounds like it received 9.3 billion yuan or 1.3 billion USD but it also receives 4x as much in tax rebates.
US government has handed out tons of low/no interest loans, tax incentives, and tax credits to spur development and deployment of EVs and related technologies like charger infrastructure.
Just this year, there was a $4500 tax credit towards leasing a number of vehicles. I leased a Prius Prime (one of the vehicles eligible) and basically got $4500 off the sticker. Bought out the lease and purchased the car for $4500 off.
We have no domestic car manufacturing and no tariffs.
"BYD received a total of 37.1 billion yuan in tax rebates over the five-year period, nearly four times the 9.3 billion yuan it received in subsidies. Additionally, BYD has secured long-term bank loans at interest rates between 2.05% and 2.98%, lower than the one-year prime lending rate of 3.35%, according to the company filings. "
The overt subsidies mostly existed in the early part of the development process. It's a playbook that's quite commonly used in East Asian economies. Basically it goes like this:
1. Erected barriers to foreign competition and hand out subsidies to simulate local competition
2. Withdraw subsidies to push industries towards mergers and leave only a few big companies in the industry
3. Remove barriers to foreign competitions (i.e. invite Tesla) to foster innovations
4. Export
This makes it devilishly hard to quantify the amount of subsidies received and it's intentional.
China isn't the first to do this but rather borrowed the playbook from Taiwan, Korea, and Japan, who borrowed it from Germany, who, ironically, was inspired by the idea of industrial policy from Alexander Hamilton (https://www.bloomberg.com/news/audio/2024-03-14/odd-lots-ind...)
https://threadreaderapp.com/thread/1804530313957106091.html
TLDR about $2000 per vehicle in 2024, trending to $0 per vehicle in next 5 years. Meanwhile PRC selling cars abroad for 2x+ domestic (i.e. 10-20k over), aka manifestly not dumping prices. BYD (and a few other PRC NEV makers) are successful because they used subsidies the way it should be used - to commoditize manufacturing to ModelT levels (500usd per unit vs when competition was 2000usd).
> Last fall in Malta, BYD began selling the Atto 3, an all-electric compact crossover. Strip away the company’s futuristic logo, and it looks almost indistinguishable from other small, sporty SUVs. But inside it’s full of treats, including heated seats in vegan leather and a 360-degree rotating touchscreen. The 60-kilowatt-hour battery gives it a range of 260 miles, enough to circle Malta’s main island twice. And by European standards, it’s inexpensive, at about $28,000. It’s a novelty in Malta. But the real reason BYD is entering the European Union’s tiniest member state? The company’s happy place is emerging markets and countries with no domestic auto industry to defend: “You can basically describe them as a ‘chicken rib market,’ ” says Yu Zhang, the managing director of consulting firm AutoForesight in Shanghai. “All the chicken ribs added up together, it’s more than 10 million cars.”
> After increasing its annual sales in China 15 times over, to 3 million cars in only three years, BYD is now exporting to roughly 95 markets, including 20 new ones this year. The company is building, has recently opened or has announced plans for assembly plants outside China in 10 countries on three continents. The speed and scope of this expansion have caught the global auto industry off guard and triggered protectionist tariffs in the US and EU, where policymakers fear Chinese players such as BYD will, in the words of Elon Musk, “demolish” their domestic automakers.
What's interesting is how they compete with other brands, and I think the trend is for BYD to increase their market share in all countries.
However, I would have liked to have more figures.