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Comment by klooney | Hacker News Reader

> The skills built up by European carmakers over decades are simply not directly transferrable.

Germany does have a giant, excellent chemistry industry.

> China's interest in batteries is not a recent trend. It has been investing in their production for many, many years. It has been attempting to dominate not just the production of cells but also of the cathodes and anodes that go inside them - not to mention the chemicals used to make those electrodes. It has been firming up the entire supply chain - all the way down to the mines. And while you can find only so much lithium and cobalt in China, Chinese firms have been buying up mines in Africa and elsewhere for years.

The fun thing is that the west saw it coming and didn't try particularly hard to forestall it. Consistent, long term industrial policy is very effective.

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> Consistent, long term industrial policy is very effective.

Yes. This is what kills the US in rare earths, cobalt, gallium, etc. US mines shut down when the price goes down. Sometimes they restart when the price goes up. Sometimes they don't. All this churn makes the business unprofitable in the US.[1]

[1] https://mpmaterials.com/articles/mp-materials-reports-third-...

You're ignoring the fact that we also don't want oceans of toxic sludge left after the mining. This is not the case in China.

The Mountain Pass mine solved that problem years ago. What they couldn't solve was making money during periods when China cut rare earth prices.

And china cut the prices by ignoring the environmental impacts of their mines.

If only there was a giant money fountain with a vested interest in keeping mountain pass functional for the long haul.

The by products come after processing the concentrates from mining.

The largest non-Chinese supply chain globally is Lynas, concentrates from toxic waste free mining in W.Australia are shipped to Malaysia for processing where pools of low level radioactive waste and associated acids are created as by product.

Texas, USA, very much wants in on having "oceans of toxic sludge left after the" processing:

    The United States Department of Defence will contribute $US288 million ($442m) to develop Seadrift, with a view the construction will be finished by mid-2026. Lynas bought the southern Texas site in July last year from Dow and planned to turn first sod before the end of this year.

https://en.wikipedia.org/wiki/Lynas

https://lynasrareearths.com/wp-content/uploads/2023/12/Lynas...

The US expansion is funded by a US DoD initiative to secure critical resources for the US.

China was refining rare earths without much concern for their own environment: they were basically ****ing in their backyard to provide the west with cheaper rare earths to work with.

This of course is unsustainable, and should have been stopped earlier by either Chinese or western governments with some concern for the environment as well rewarding bad self-destructive behavior.

To condense a few points. China generally out competes on a few points: - strategic government investment - lower cost of labour - lower environmental regulation - proximity to downstream consumers

Germany is IBM. Existing industries are too valuable and influential, and shifting something as entrenched as German auto industries is an expensive, difficult endeavour that isn't immediately as profitable as the existing business.

At least maybe we'll get to stick around as business consultants and selling mainframes to a handful of companies convinced by "nobody was ever fired for buying German".

People like to say the US is a car-dependent country (because you can't go anywhere without a car).

However, germany is the most car-dependent country (because it can't go anywhere without making cars).

Yes but the level of investment the Chinese have poured into battery production and EVs in general is also completely unparalleled. Industrial policy is nothing new for US and EU but just not at that level.

To be able to compete with China the West would need to:

- Match generous subsidies to companies, not just through banks but at the government level by building entire towns just for battery production.

- Making large parts of land uninhabitable for the cost-effective extraction of rare earths.

- Suppress wages at factories and engineering bureaus to be able to cost compete in manufacturing.

- Dramatically lower cost of energy production (only doable without renewables in the short term).

I just don't see any Western government having a strong enough mandate for any of the policy changes required to compete with China. The simpler reaction is just imposing tariffs.

Western nations have absolutely done this in the past. It’s the reason we are generally the richest and most secure nations in the world. The decision not to do this potentially means we forfeit those advantages for the rest of this century.

And China is hugely deploying renewables, which they happen to be able to produce very cheaply due to their industrial policy. The difference is that China is using their fossil fuel resources to make this investment, while the west is using its fossil fuel resources to shove crayons up its nose.

> while the west is using its fossil fuel resources to shove crayons up its nose

what a bunch of empty invective

China has far less farm land per capita compared to the US. Until the majority of excess farm labor are shifted off the land they do not need suppression to keep wages low. They just need to raise mobility, which they have done by building roads and railways.

China didnt pour money into battery R&D. We did. Me, you, our parents, everyone with a phone since mid nineties. BYD stared out as a phone battery manufacturer, it took them decades to turn from cheap labor sweatshop into knowledge based company with own ideas and strategy.

I get the engine and transmission tech doesn’t translate over but the vast majority of the chassis, transmission and pretty much everything else stays the same in a car.

That being said, having driven my EV for a year or so I somewhat find ICE vehicles gross now. All that sputtering, poisons, jerkiness, continuous maintenance, loudness etc. just feels so primitive. The only place it still makes sense is for situations that require a lot of power like long distance hauling, heavy equipment etc.

It’s like going back to plastic bags, cups and water bottles. It just feels gross to touch and you can feel getting poisoned.

My opinion as well. There is really nothing basically super special about electric vehicles. 90% is just standard commodity automotive tech.

The world knows how to make good cars now. The EU has to move on to the next problem if it wants to stay ahead.

> The world knows how to make good cars now.

Companies can forget how.

Stellantis (which owns Chrysler, Jeep, Dodge, Fiat, and some other forgettable car brands) forgot how. The CEO was fired on December 1st, 2024. His strategy had been to crank prices way up, add on post-sale service charges, and get the biggest bonus in automotive executive pay history (not counting Musk's current litigated bonus.)

Sales went down. Way down. Chrysler now makes only minivans. Overpriced Jeeps are piling up in dealer lots. The "mild hybrid" power train, with 21 miles of electric mileage, is a dud. The brand image is in the tank. Nobody wears a Stellantis T-shirt.

The US has 3 million unsold cars sitting on dealer lots. Some have been there for over a year. How many will still start?

Forgettable as Citroen and Peugeot, for example?

I think GP means forgettable in the US. Here is the brands from the Wikipedia article:

  - Abarth
  - Alfa Romeo
  - Chrysler
  - Citroën
  - Dodge
  - DS Automobiles
  - Fiat
  - Jeep
  - Lancia
  - Maserati
  - Opel
  - Peugeot
  - Ram Trucks
  - Vauxhall

None of them I would call "forgettable". Most of these brands have been there for more than a century. The only ones more recent than that are Abarth, DS and Ram. DS and Ram refer to iconic vehicles by Citroën and Dodge respectively and lately turned into their own brands.

Germany had a giant, excellent chemicals industry. It has been shrinking due to higher natural gas prices. Natural gas is a crucial input for many bulk chemicals.

What I find puzzling is that around 10 years ago Audi and VW committed fully to electric vehicles, investing $100 billion(?). So why do people now claim they missed the boat on EV development?

- Because 10y ago was already too late.

- Because they can invest and still fail.

- Because a press release and actual money spent on reasearch are two very different things.

But focusing only on manufacturing is missing half of the picture. China is using for batteries the same playbook they used for PVs. They are spending a lot of money to hire all the top researchers they can in the field.

Truth is they are years ahead of most battery manufacturers in R&D.

Angela Merkel's legacy has not been good..

https://archive.md/N3RWo

What right wing news source is that? They paint a pretty one sided picture here. Some truths but not all. Germany was on its way to be energy independent with wind but that was blocked by Merkel and right leaning governments since 2010. Without that intervention we could be big in wind and having a lot of people work in that sector. Instead they turned back to gas and coal.

The dependence on cars and the incompetence to get excellent on software are a huge problem here in Germany. But the educated part of the people here saw that coming.

The will to change is what is dragging us down in Germany.

What left-wing ideology is that? If wind was so promising (providing cheap energy at scale 24/7) nobody would turn away from it. Maybe it was "blocked" because it wasn't working?

>Consistent, long term industrial policy is very effective.

Which worked so well for Japan that you had Nobel economic laureates promoting it. </s>

I'm being a bit sarcastic of course but MITA was seen as such the future in Japan--until it wasn't.

Industrial policy will bring you up to a point, and apparently, no further.

Anyway, it was wildly successful in Japan, Germany, and the US. Up until the time it stopped working. It has been arguably less successful in China, but still good enough to create massive change.

I don't really disagree. You need, sorry, effective capitalism and a legal structure underneath the policy but that doesn't replace entrepreneurship and broader cultural norms.

The problem is that industrial policy seems to be incompatible with effective capitalism and universal rule of law to some extent.

It's not very clear (at least to me) how and why. But it never seems to be a positive thing after some point, instead, it seems to have very negative impacts on more developed countries.

> It's not very clear (at least to me) how and why

It's good at the initial stages and unproductive later on. The problem is that when you need to remove it is also when its recipients are most powerful.

There's probably reasonable disagreement on the extent of anti-trust enforcement etc. in developed economies. We may see a case study in the coming years.

Of course, China has also been a very different animal politically. There's also the whole demographic equation which factors into Japan, China, and (at least eventually) the US.

Japan does not have a big enough domestic market, which means their industrial policy requires a lot of foreign cooperation to be effective. Once others started seeing them as a threat their game was over.

As an IT industry analyst, Japan also seemed always determined to do things their own way--see Itanium. Which made things more difficult for selling to a wider marker. Could make some of the same comments for Europe for which I also attended a variety of industry events.

China tried to promote TDSCDMA for 3G, which also didn't work. At least they didn't make it their exclusive choice. In their more successful cases they didn't pick winners.

China is of no concern to Europe or the US. Most of their tech is stolen or trickles down from innovation elsewhere. It is unlikely China will find success in the US given the sentiment (antiChinese sentiment is rampant in most of the US). Also, there are many legislations in place that would prevent it. I will mention though that the US and Europe need to get their act together. Too slow on EVs (it took an outsider like Tesla to get it going), and there is still too much reluctance to get the ball rolling. I view the best solution as "forcing" the oil giants to innovate in this sector, but given their lobbying prowess, it is highly unlikely. In a highly democratic society, Shell in Europe and Exxon here would be paying their dues in electric infrastructure and battery tech

> Most of their tech is stolen or trickles down from innovation elsewhere.

This is how it always works, until it doesn't. Why is everyone so quick to forget that Japan was the exact same way in the 70s and 80s?

Or that's how USA had acted on many areas as recently as Manhattan Project?

> Most of their tech is stolen or trickles down from innovation elsewhere

Overheard at a battery conference: western battery suppliers are actually copying (or in your words, stealing) the Chinese electrolyte formulas and other designs.

Great artists steal, the US and Europe play the same game.

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