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Comment by elzbardico | Hacker News Reader

The US don't have cheap cars because dealers and automakers prefer the high margins of more expensive cars.

In basically any other market in the world, the Nissan Versa is definitelly beyond the entry level and not the cheapest and smallest car.

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> The US don't have cheap cars because dealers and automakers prefer the high margins of more expensive cars.

While BYD is quietly taking over in every country that doesn't have a domestic auto industry.

When BYD starts selling their $10,000 car Seagull car [1] in the US, even with a 100% tariff, it will be cheaper than anything Detroit makes.

[1] https://electrek.co/2024/05/22/byds-10000-seagull-ev-worryin...

> even with a 100% tariff

You're making it sounds like 100% is the highest possible ceiling for a tariff, when it's a number arbitrarily set to fulfill a specific agenda and can be infinitely adjusted.

Of course if you protect your domestic car industry too much it will slowly become uncompetitive and irelevant on the international free market.

> You're making it sounds like 100% is the highest possible ceiling for a tariff, when it's a number arbitrarily set to fulfill a specific agenda and can be infinitely adjusted.

Yep, the tariffs Boeing got on Bombardier's C-Series that were the final nail in the coffin of that program and Bombardier as a serious player, and gifted a great new jet to Airbus, were 300%.

I hate how true this is. The US might as well peg the tarrif to infinity on any cars coming from China because at this rate that's essentially what we're doing.

As your article points out, it sells for about $20k in Mexico and Brazil. They're dumping at $10k in China to destroy other Chinese car manufacturers and profitability is not required until subsidies run out. But in other countries those other Chinese manufacturers are mostly not even competing, allowing BYD to price higher and turn a decent profit. If a 100% tariff means they only make Chinese-level profit from US sales, it might not be worth it.

How much subsidy are they receiving?

O(10^9)

That's a cute way to write O(1) :)

The variable in O(10^9) is the numerical base.

USD or CNY? Tbh neither of those numbers is very large for a car company.

USD, per year. Which is about the R&D budget of major manufacturers.

> to destroy other Chinese car manufacturers and profitability is not required until subsidies run out

So the Chinese government is subsidizing BYD in order for them to destroy every other Chinese car manufacturer? I think the Chinese government has far less convoluted and costly schemes to control which businesses live and which die.

If I understand it correctly, your theory is like saying the US set such high tariffs and sanctions so Chinese companies adapt and get so strong they can eventually outcompete any US company and break free of any dependency.

You misunderstand. It doesn't matter much for BYD's pricing whether they're subsidized or not, but it matters very much that their competitors are. They'll charge as much as they can get away with, and competing against other Chinese manufacturers, they need to go a lot lower.

But many of those competitors would be completely unable to operate without subsidies. Take Zhidou, which went bankrupt in 2019 after sales of EVs with range under 250 km were no longer subsidized. https://web.archive.org/web/20240926235216/https://carnewsch... They relaunched in 2024 with some help from the Lanzhou city government, offering the Zhidou Rainbow at a subsidized sales price of $3,800 to $5,500. https://web.archive.org/web/20240512094644/https://k.sina.cn...

Note that there's two different kinds of Chinese government involved here: the central government primarily wants to build up the EV industry and is mostly agnostic between manufacturers, hence the sales subsidy. Regional governments want to build up their own economy, so they give preferential treatment to companies that manufacture in their region.

So it's not, as you thought, that the central government is specifically subsidizing BYD in order for them to destroy every other Chinese car manufacturer, but that regional governments are subsidizing local competitors in order to protect them from being destroyed by BYD.

But those subsidies won't last forever, and once they run out, many manufacturers will go bankrupt (see original 2019 Zhidou bankruptcy). Once that happens, BYD will most likely be able to cement their market dominance and raise prices to finally be able to make a decent profit even on domestic sales.

BYD is extremelly efficient, but BYD is also beneficiary of an extensive state directed industrial policy. And let's not forget that China keeps their currency intentionally devalued against the west, while the US now have the problem of an over-valued currency.

Just to add some perspective. It is still cheaper than anything Detroit makes, but 10.000 USD is a bit misleading if you ignore currency policies, subsides, incentives and regulatory differentials.

I recently got a deal (under $100 for 5 days) on a car rental. After turning down all the offers to upgrade, they gave me a Versa. I loved it. It actually felt like a car again, not a computer on wheels, and I could actually see out the windows on all four sides.

I had a similar experience in a rental. The one feature I missed was a wireless key fob, which is not included in the base trim. I understand the relentless cost pressure in automotive mfg, but that seems like it would have been $2 worth spending.

So it had a normal key, for unlocking the doors and turning the ignition?

Probably a remote with buttons to unlock the car (no keyless entry) and a key to insert into an ignition lock to turn it - that's what I've seen in today's entry-level cars.

I prefer that (and its what my fairly old car has).

Smaller attack surface. There have been lots of issues with keyless.

Car thieves have been using antennas to remotely trigger the keyless entry to great success here in Canada. Many people leave their keys on their doors so you just need to put a range extender against the door and scan cars in front until one of them opens.

Mine had just a key. Had to stick it in the lock and turn it.

Yes, a boring mechanical key for both.

> The one feature I missed was a wireless key fob

Are you talking about "keyless ignition" or even for opening the doors?

If it's the former, why did you miss that? My dad's car and most recent rentals I've had were of the keyless go variety, and I don't really see how it's more practical. The one use where I can see it being better is with motorbikes, if you live in a location both with cold enough winters that you gain a lot by putting your thick gloves on while still inside and safe enough that you don't need to bother with a physical anti-theft device.

I've actually had a terrible scare with one such car rental, where the attendant brought up the car, left it running, and forgot to give me the key. My personal vehicles all have keyed ignitions, so to my mind, engine running = key in the ignition. 10 minutes later, the agency called me up, telling me not to turn off the engine because I didn't have the key. Bonus points for being in a foreign, dense city I didn't know during rush hour. Fortunately, it was pretty hot outside, so I didn't turn off the engine to keep the AC running.

I've only ever owned cars with keyless entry and push-start ignition; it's useful because you never actually have to get your keys out and risk losing them, also if your hands are full, you don't need to worry about finding them to open the boot, or worry whether the locks will freeze up in the winter and have to de-ice them.

My car will also not let you lock it, and beep at you like crazy if you leave your keys anywhere inside, so you can't lock yourself out. You also can't lock it from the outside while the engine is running, but I believe that's a safety feature.

I can throw my keys in my backpack, dump it in the boot and drive off, grab my backpack when I reach my destination and walk away.

> or worry whether the locks will freeze up in the winter and have to de-ice them.

A keyless entry is no better than a regular 'push to send unlock signal' fob in this regard. You have to go much further back for cars that require the key to be inserted into the door.

You say you've only ever owned cars that don't have key-turn ignition, but doesn't that mean the advantages you listed are just assumptions? Having used both, I can personally say I have never considered key-turn ignition a problem or disadvantage. I've never lost a car key the same way I've never lost a phone which I also take out of my pocket to use.

I know people who (for insurance compliance) must store their key inside a faraday box. So to use their keyless entry car they still have to "get the key out" anyway. Push button unlock and key-turn ignition are not vulnerable to those kind of attacks/thefts.

> A keyless entry is no better than a regular 'push to send unlock signal' fob in this regard. You have to go much further back for cars that require the key to be inserted into the door.

Apologies, this is what I meant by "keyless", perhaps I have my terminology mixed up. I can either walk up to my car and open the door by pulling on the handle (keyless?), or get the fob out of my bag/pocket/whatever and press the button, but there's really hardly ever a need to do the latter, unless I want to allow someone else to enter the car while I'm at a distance. I can then start it just by being in the car with the fob somewhere also in the car, but without having to have or touch or insert the key (fob), thus keyless(?).

> You say you've only ever owned cars that don't have key-turn ignition, but doesn't that mean the advantages you listed are just assumptions?

Not an assumption, I've driven plenty of key-lock and ignition cars, just not owned them. Again, my earlier terminology mix-up may have been the issue. The advantage I'm trying to address is the ability to unlock the car and start/stop and then lock it again, without having to have anything in my hands (but having something on my person).

> I've never lost a car key the same way I've never lost a phone which I also take out of my pocket to use.

I can't argue with that; I too have never lost a car key, but I'd argue that by never having to take it out of my pocket is perhaps somewhat contributing to that.

> ... must store their key inside a faraday box. So to use their keyless entry car they still have to "get the key out" anyway. Push button unlock and key-turn ignition are not vulnerable to those kind of attacks/thefts

I have to agree with you here, this is certainly one disadvantage, and is absolutely a concern of mine.

At home you throw the fob in a faraday box rather than a drawer or on the side, so it's not a great amount of effort; while you're out and about it's a risk unless you're going to carry a faraday bag on your person (which I do not), so there is a chance someone could steal your car this way while you're sat/otherwise distracted but still fairly near your car.

I'm not sure what the correct term is for this type of entry, but that's what I'm suggesting I prefer over a key I'd have to insert into the door and then into the ignition and turn, it's just more convenient.

Conversely, if you lose one, it'll cost a few hundred £££s to replace rather than a cheap key, and there's the risks of high-tech theft, so it's not without its downsides.

Keyless entry and ignition is extra thing you don't need. But then you get a new car, get used to it and go for a cheap rental and OMG how inconvenient is a legacy key and open with keyfob! Same story with other car upgrades: automatic gearbox, powerwindows, backup camera. You drive a lot without it and it feels okay. But once you got an upgrade...

When you get used to 360 camera, even backup camera starts to feel lacking...

Keyless ignition and backup cameras are the two recent tech features I think are worth having. Though the latter would be less necessary if cars had better visibility, but even then it’s still useful for things you couldn’t see in any car.

I will also keep power windows, steering, and seat adjustment.

As of 2018 all US cars have backup cameras as a required safety feature. I'm not sure if there are any exceptions.

I am not aware of any exceptions. I was speaking generally though about what I believe are car tech innovations that truly are improvements (unlike, say, touch screens).

The latter. I had to use a physical key inserted into the door to unlock it. I agree, keyless start isn't a 'critical' feature.

> and I could actually see out the windows on all four sides.

I can't believe the modern style is to have the walls of the car so far away from the seats. I assume it fulfills some kind of crash safety mandate? It clearly isn't worth it.

We've gone from "pull up to the machine and take a ticket" to "pull up to the machine, park, get out of the car, take a ticket, get back in the car..."

It's also because American consumers, on average, absolutely without question prefer larger vehicles.

I know, but the american market is gigantic, there is probably a sizable niche for economical vehicles. And if nobody is selling cheap cars, how can we be so sure they won't sell?

They would sell, but there is less profit in them so the manufacturers have optimized for a market where they preferably service the wealthy and those willing to overextend themselves on an expensive loan or lease. The bottom end of the market is left to used vehicles.

You frame it like manufacturers have never sold cheap cars. They have and they don't sell anywhere as much as you think they would. Right now the entry point across most manufacturers is ~$20-23k for a brand new vehicle. 9% of vehicle transactions are accounted for by these cars. The market for them is not large, people want crossover suvs and trucks.

And fuel economy regulations encourage larger vehicles with relatively more lenient emissions standards (moreso than the additional size would require) than is applied to smaller cars.

It’s safe to assume that these regulations have largely been shaped by car manufacturers.

I doubt there are tighter regulation than in the EU. Americans just don't want to buy small vehicles with small motors. They want V8 with 300+hp to sit in the traffic jams.

For example there is a good inexpensive Reanult Clio with 1l 3-cylinder 90hp engine. I doubt any meaningful number of US customers want to buy such car, even if it is less than 20k USD.

You can’t drive a larger car on Medieval streets. US doesn’t have that problem. We also don’t like towing things like caravans and trailers behind sedans with bottomed out suspensions. BMW won’t even sell the EU stealth hitches in the US.

On the contrary, new england has plenty of tiny city streets, and assholes like my dad will still insist on driving their F350 (really) through the heart of downtown. Hell, we had the local cybertruck do it earlier this year.

They will spend all day griping about how hard it is to park in the city, and how much they hate the city.

You used to be able to buy the Ford Fiesta with a similar engine in the US.

Also, even if Europeans would like the look of larger cars, our roads are not built for it lol. Definitely not in cities.

Almost every European road can fit cars up to 2.5 meters wide and about 6 meters long. Parking spaces not so much.

The garage we have, as part of a coop, was built for a 60s European car. Think good old VW Beetle.

While there are a fair number of cars we could park, like the VW ID.4, we couldn't get out of them while parked.

Same here, our house was built in the early 80s and has a tiny garage. Theoretically you could fit our Skoda Octavia (2 kids) in it, but getting out would prove challenging, even if everybody exited on the same side. Also you wouldn’t be able to use the garage for anything else, like storing gardening tools, bicycles, skateboards, etc.

https://www.youtube.com/watch?v=QksqWRqEfy0

Not quite that bad, but close. I have to park slightly at an angle and offset, so I can can get out. Any passenger wouldn't be able to get out due to this.

And I don't have a big car, it's basically the same size as a Kia Niro EV or Hyundai Kona.

2.2m wide, In almost all road construction spots, the left lane is mostly only 2.2m wide. This is also the width measured in many small streets with cars parked on both sides.

Part is due to people being fearful of buying something smaller since there are so many colossal vehicles on the road that would be considered military-tier equipment in other countries.

Safety ratings are nice and all, but when faced with the very real possibility that a vehicle 3 times the mass of yours will someday hit you at 80+ miles per hour, you just have to accept the fact that Newton's second law is something that is hard to win against.

american pickup trucks are literally as large or larger than ww2 tanks:

https://www.dailymail.co.uk/news/article-9823577/Road-warrio...

It's also because American consumers, on average, are large

On average they're only average - unless you're comparing them with another consumer dataset.

They're larger than people from Asian countries.

43% obesity rate in 2024 according to the WHO.

Or the same data set over time.

"The average American is large" doesn't require another dataset however clearly the implication is comparison with the rest of the world.

Partially true.

Consumers don’t want tiny cheap cars. In the past few years, people have financed progressively more expensive cars over much longer periods, suggesting they don’t want the cheapest options.

Americans view cars as status symbols, not just transport. Hence, car companies sell cars as status symbols, not just utilitarian commodities.

I'm sure the advertisement done by those companies have nothing to do with them being seen as status symbols (and preferring bigger cars in general)

It's also because the used car market in the US is strong.

Scion and Saturn were both recent entry level brands for major car manufacturers. Both of them were subsumed into their parent companies and most of their models were discontinued. If the models were good for business, those would have continued.

Not being "good for business" doesn't mean customers don't want them.

I believe the idea of compact cars being popular in America is more of a Hacker News trope. Over the years, we've repeatedly seen subcompact cars, both EV and ICE, enter the market only to fade away. The reality is that they aren't particularly popular—most Americans simply don't want them.

Exactly this. It's the marketing

The marketing that works on people who then buy cars?

I'd buy one of those tomorrow if they were sold here (i.e. in the USA).

I love this narrative that marketing teams don't push things on customers

Obviously, it’s a bit of organic demand, manufactured demand, and what is produced. I don’t want to write a tomb on social media every time I desire to explain one concept.

"Consumers don’t want tiny cheap laptops. In the past few years, people have financed progressively more expensive laptops over much longer periods, suggesting they don’t want the cheapest options.

SWEs view laptops as status symbols, not just tools. Hence, tech companies, like Apple, sell laptops as status symbols, not just utilitarian commodities."

This seems just as correct. What point are you trying to make?

Though I've been in sw dev for nearly a decade I've not seen other software developers brag about their laptops and if anything, scoff at modern consumerist non-repairable equipment.

And yet I'm constantly issued high dollar laptops that are way overspecced to run a web browser (no computer yet built can run Outlook desktop without crying) and emacs. When I point this out I'm told some combination of "this is the standard for your job title" and "developers need zippy machines". My coworkers seem relieved to finally be done with the "junk" they were issued three years ago that is still massively overspecced.

Anecdotally, my observation is that SWEs are the group of people who are the least likely to think of laptops as status symbols. People buy $1500 laptops because (they think) they work efficiently on those machines. Otherwise, people are very happy to use $300 Chromebooks or framework laptops as long as they get the job done. Many people put very little thoughts into which laptop they buy.

You probably are thinking about a different group of people.

SWEs are not a random demographic. They are FAR more likely than the broader public to care about function than form. And their laptop isn’t seen by everyone in all of their social circles, as a car more likely is.

I guess it's a bit of an arms race as well - if a heavier car hits a lighter car, the G forces in the lighter car will be higher, all else being equal.

The tragedy of commons is that if everyone bought a lighter car, everyone would be safer, not just the drivers but pedestrians and cyclists as well. Especially if "crash compatibility" was regulated and enforced.

That's, at least, how it seems to me while not actually living in the US - feel free to let me know if I'm completely off.

I have at least one friend with an SUV for that exact reason.

The great irony of that arms race is that the bus or tram will almost always win.

I'm living in EU and was fed up with SUV which have high positioned front lights which beam through my tiny car. Bought a small SUV instead to have a higher position and comfortable ride. What a tragedy, I've became the same person who pissed me off previously.

It's also really annoying at a roundabout that you can no longer see through the car next to you.

People in this thread seem to somehow think marketing is pushing people to want xyz.

That _cannot_ be the singular or even primary driver of a movement. Car manufacturers don't just make a car in a vacuum. They make what the market is asking for, and _then_ marketing steps in. Very few companies, like apple and Tesla, can foist weird stuff on consumers and have them like it. And even in those cases, they are really just building something they believe to be the faster horse.

There's a reason Tesla wanted to build and SUV and a model 3. There's a key target price point in the US for a car. No amount of marketing can make people buy a car they simply cannot afford.

> No amount of marketing can make people buy a car they simply cannot afford.

And yet here we are and marketing has convinced people in the US to borrow $1.6 trillion to buy cars they cant afford.

Afford doesn't mean the same thing as able to pay for in cash right now. Otherwise you'd say people can't afford houses, when you really mean people can't afford / are unable to get a mortgage that will cover their house.

Nobody forced these people to take our loans. The auto industry bends to trends, it doesn't create them.

The fact is, with or without marketing, people want nice things. And people have historically been willing to buy them on credit/loans. At least for our current capitalist society, that seems to be ab inherent feature.

> Afford doesn't mean the same thing as able to pay for in cash right now.

I believe there is an ad guy from the 1960's (an old pro copywriter, a Greek, named Teddy) who managed to convince the world of just that.

I bought a perfectly fine VW Polo in 2011 for £9,500

But after owning it for 2 years I realised totally organically that what I really wanted was almost the same car but for £12,500, with some extra unnecessary features.

I'm so glad VW stepped in and delivered what I had been secretly desiring. A heavier, more complex car at a higher price. Thank you, VW!

> suggesting they don’t want the cheapest options.

Suggesting that they have no financial education... The average loan duration is something like 70 months right now, with a mind boggling 7%-10% interest rate.

People make dumb decisions if they don't have the knowledge/education, by the time they're done paying their 40k car loan they paid 60k and the car is worth 20k.

For the last 40 years, cars sold in the US have really been a way to profit from high-margin auto loans.

> The US don't have cheap cars

They absolutely do. The cheapest Nissan in the UK is a Juke at $29,775 ( per xe.com conversion rate ). A US-market Nissan Versa starts at $17,995.

Even removing taxes the Juke costs around $24,800.

But it's a Juke.

https://youtu.be/PWHYZrnxJmQ

He’s so right though. They’re almost as poorly thought out as the RR Evoque. The visibility is bad, the clearance for entering and exiting in the rear seats is unnecessarily cramped, and it offers no more storage space than a Clio.

It’s a caricature of a toy 4x4 with all of the compromises that implies. Ecck.

That Versa is the cheapest new car in the US, from any manufacturer. The comparison would be the Citroën C3 Origin at £14,150, so a smidge cheaper than that Versa.

(I don't know why Nissan isn't selling small cars in the UK any more - the Micra was very popular up until about a decade ago)

The Nissan versa is like the last cheap car.

The Chevy Spark is dead.

The Mitsubishi Mirage is dead.

etc.

The UK has become a completely disfunctional toy economy and it is not a useful parameter.

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