Hacker News Reader

Comment by methodical | Hacker News Reader

Help is an interesting word choice for what is essentially undercutting our entire domestic automotive manufacturers and ensuring, on a pure cost front, that the majority of Americans purchase and rely on maintenance for a product produced in China. Doing so would have major negative consequences for our own strategic interests, hence why there has been such a massive tariff on it for several years now. China isn't being altruistic when they're attempting to sell us their much more affordable EVs. It's not a uniquely US perspective on the threat of Chinese EVs either, as the EU also has lesser but still non-trivial tariffs on Chinese EV brands.

View on HN

If the US and the EU had invested in EVs 15 years ago like China did instead of scrambling to do so in the last 5, then China would not have the advantage it has now on the other carmakers.

Also if the governments want people to move away from ICE cars, then maybe they should stop putting tariffs on cars coming from China.

At some point, you need to make a decision and stick with it.

The way I see it as a consumer in the EU is that the EU is simultaneously saying we need to transition to a lower carbon economy as quickly as possible but then increases the price of goods that could be used in this transition. Make it make sense.

Is it my fault that the carmakers in the EU failed to invest EV tech?

So why am I being asked as a consumer to subsidize the legacy carmakers who were very happy to rake in billions of euros in the last 10 years while selling Diesel engines all the while knowing the the Chinese EVs were just around the corner?

Well, isn't it a good thing that they can help fight climate change without being altruistic? The entire western capitalist model is based on the premise that capitalism is good because people can help improve society through selfish means. Altruism doesn't scale. It's best when incentives are aligned.

The problem isn't with keeping Chinese cars out through tariffs. It's keeping them out, and at the same time not stimulating domestic green energy development enough. Why should the energy transition be bottlenecked by incumbent interests' profit margins?

> Well, isn't it a good thing that they can help fight climate change without being altruistic? The entire western capitalist model is based on the premise that capitalism is good because people can help improve society through selfish means. Altruism doesn't scale. It's best when incentives are aligned.

Yes, that's why you should let people buy cheap Chinese goods.

> The problem isn't with keeping Chinese cars out through tariffs. It's keeping them out, and at the same time not stimulating domestic green energy development enough.

Didn't you just say capitalism was good, and now you argue the opposite?

> Didn't you just say capitalism was good

No. I was criticizing the notion that not being "altruistic" is always bad. That is not the same as saying selfishness/capitalism is always good.

Well, the Chinese tax payers altruistically subsidise western consumers.

Really no idea what you're getting at. It's really simple and not some nefarious scheme. The Chinese government wants to be energy-independent so they don't have to import foreign oil and gas. Developing domestic green energy happens to align with fighting climate change, as well as transitioning the economy to a high-tech based one in order to escape the middle income trap. The incentives with the private sector are also aligned because this development is profitable. So they do it, by whatever means possible.

They sell some cars to Europe and North America, but the amount is negligible compared to what they sell domestically, and still much smaller than what they sell to ASEAN and the Middle East.

It's that simple. This isn't some grand plan to destroy foreign car manufacturers. If foreign car manufacturers get destroyed then that's by accident, as a result of them not staying competitive enough, not because that was the end goal from the start.

Of course it's in western governments' and manufacturers' rights to not accept this fate. But the most productive way to avoid that fate is by increasing their own competitiveness and by moving faster themselves, not closing themselves off while at the same time staying lazy about the energy transition. That's just rent collection.

The Chinese subsidise their own manufacturers of some goods. [0]

They do that partially as you say to develop their own energy independence. But there would be more efficient ways to do that, and specifically they wouldn't need to give gifts to foreign consumers.

I'm not sure why you think that I think it's nefarious? Western consumers (and other foreigners, like in ASEAN and the Middle East etc) get stuff for cheaper, that's nice for them.

The Chinese government subsidises these companies with tax payer money that they take from other parts of the economy; it's a net loss for the Chinese economy overall; but perhaps a net plus, if you focus on just the politically connected companies.

If you want to find anything nefarious: it's that rest of the Chinese economy that's being shafted.

> I'm not sure why you think that I think it's nefarious?

Most conversations on the Internet I've seen about this topic paint Chinese subsidies and Chinese car exports as a grand, deliberate, evil plan to cripple western companies and industries.

> But there would be more efficient ways to do that

I really doubt it. We have not seen any other examples of green energy rollout that is better. The improvement in Chinese air quality in just 15 years is staggering: Shanghai now often has better air quality than Berlin. Health outcomes do not easily show up in GDP figures.

You say it like 'undercutting' is a bad thing.

If consumers have to pay less, that's a Good Thing.

Not when the domestic companies which manufacture the same product wither as a result. Don't get me wrong, I don't believe in defensive national economic policy as a blanket protection we should do to protect all industries, but in special circumstances such as this one where losing all of our electric vehicle production capability and specialization is at play, I think it certainly is in our strategic interest to avoid that from happening.

> Not when the domestic companies which manufacture the same product wither as a result.

That's not how economics works.

A company being unable to compete with another one on price will result in a drop in revenue, as consumers purchase the product with the cheaper price. Revenue going down is bad for a business. How exactly is any of what I've just stated wrong? How exactly is another company selling a similar product at a much lower price point good for the company? Perplexing position that somehow introducing a much cheaper product into the market from company B is good for company A.

> How exactly is another company selling a similar product at a much lower price point good for the company?

It's good for the economy. And it's good for other companies, that you haven't mentioned. There's more than two companies in the market.

Reply on news.ycombinator.com