They can campaign against EVs, and their propaganda isn't any worse than the pro-EV propaganda that's circled around, most of which ignore very inconvenient facts around the cost-value of EVs. Given that, I have no problem with Toyota being anti-EVs and handing out information on why they are.
Savannah and Brunswick are huge car export ports because many manufacturing facilities are spread out between South Carolina and Georgia: Volvo, Mercedes, BMW, Honda, KIA to name a few. These ports are also the largest on the Eastern seaboard of the US. So access to shipping is probably one of the main reasons. Also major demographic shifts to the Southeastern part of the US help supply the labor pool.
Georgia and South Carolina tend to be the poorest states. The Poverty rate is around 14.5% for both. Compare that to California where the poverty rate is 12.5%. Though the poverty rate is lower, California has more people in poverty than Georgia and South Carolina combined. Anyway, using the word "impoverished" is grossly misleading.
No, it's because Georgia is very aggressively courting large manufacturers with "phantom bonds" and "bond for title" deals.
Problem is, it's not paying off - the state isn't benefiting overall from it, and as soon as they stop providing these sweetheart tax breaks and freebies, comopanies will pull up and move to the next state willing to do so
Have you ever been to the south? The down votes are because your position is asinine.
It's more likely that southern states are willing to throw huge incentive packages to these manufacturers. Probably not so much on the coasts or the northern states.
Also, unions are less common in the south; those states tend to be right-to-work states.
Finally, you used the word "impoverished", which is ridiculous. But wages are lower in the south so that is probably another reason.
As someone who lives a few miles from Georgetown, KY, it's important to note that this factory already exists and sounds like they are (partially) re-tooling it to begin EV production. So that might explain the dollar figure.
Another Kentuckian in tech here. Thanks for the list. A friend recently attended https://13layers.com/event/lextalktechjan24/ and said it was a good mix of talks. I think they're quarterly and it's on my list to follow up.
I also lurk on these slacks: bluegrass-dev.slack (same folks as the meetup I assume), Louisville Tech louisville.slack, and startuplexington.slack
Hope we keep this ball rolling a bit longer on meetups and gatherings both in person and online.
>For context: Tesla is guiding for $10+B a year capex spending for the next 3 years.
I know people around these parts think that Tesla has uncovered some magical factory building ability, but can you even consider the fact that maybe Toyota knows what they are doing?
>Toyota is still under-investing in EV. $1.3B is nothing.
>What about Toyota's plans makes you think they will ever catch up to everyone else with EVs?
Their history of engineering and execution.
What makes you think think they can't? EV proponents like to argue that the simplicity is what makes EVs so great, but at the same time making arguments like "no one can catch up".
Believe it or not, it's not a certainty that EVs are going to be the solution, rather than just an improvement on our way to something else.
What makes me think they can't catch up is watching them spend dramatically less than their competition on the needed infrastructure when they are already very far behind.
To catch up from behind, you need to do more than your competition.
This is an article about a single factory - Toyota spends upwards of $30 billion a year in CapEx -- Tesla spends under $10 billion per year.
Toyota's battery complex in North Carolina is a greater spend than the entire annual budget from Tesla and will have about the same output as Tesla's "gigafactory". The $1.3 billion in Kentucky is in addition to that.. it's a mistake to think they're not investing heavily.
When someone else has already spent money on the hard part of being first, those that follow do not need to spend the same amount of money repeating the same mistakes.
yet they refuse to build hybrids in large numbers. RAV4 primes and Prius primes are insanely difficult to get at or near MSRP. Toyota is saying that Hybrids make the most sense, but still use hybrid as an upsell for a higher trim, and thus only makes a fraction of their cars as hybrids. If >50% of their vehicles were hybrids, i'd be ecstatic and would agree with them, but currently it's just whataboutism and misdirection
Yeah I wouldn’t bet against Toyota in a game of catch up. They’ve proven over and over that their real strength is in doing what other companies have proven out and doing it better and more efficiently.
I think Toyota feels comfortable being a follower in that case and eventually use a large number of suppliers for the basic things that Tesla as a first mover has or wants to develop themselves.
That'll be an interest test -- the reason Tesla is so vertically integrated is because it allows them a greater profit margin. They've already been using that margin to slap around other manufacturers and force them to sell in the red.
If you mean stop manufacturing Internal Combustion Engines, Toyota have said many times, they do not intend to "catch up to everyone else" with EVs. They have the luxury of sitting and watching their competition leave the market, thus leaving Toyota's road to great profits wide open.
Only works if the competition does indeed leave the market. The risk of staying out while everyone else embraces the next generation technology is a reduction in customer loyalty. Every current Toyota owner who buys a competitor's product is potentially someone who will switch loyalties going forward.
This might be true cumulatively but certainly isn't true on an annual basis anymore.
If Toyota were shipping the same battery capacity as Tesla they could make every car they sell globally a hybrid or plug-in hybrid and they are at about 30% of that.
They'll never be outlawed. There are too many use cases for 300+ mile trips in remote areas where recharging isn't possible or less remote areas where it isn't practical.
RAV4 Prime owner here. I completely agree with wanting more battery capacity. For my use case, it has been a minor complaint. Been very happy overall with it.
Hah, try doing it via lease ... the supposed 'seamless' experience completely falls down ... I've just spent 5 months handholding a model 3 order, only for it to fall down at the end when Tesla tried to stiff our company for £3k.
Ended up leasing a BMW i5 because of the complete waste of time and hassle.
I'm glad it wasn't my car but, based on the experience, I wouldn't go near that joke of a company ever again. Lost a repeat customer too.
Takeaway: their staff listen more to their robot portal software than they do to rational customer experience.
And I know I'm p'ing in the wind ... but Tesla (in my experience) get way too much credit. I've had better experiences with conventional dealerships (and that's saying something considering how bad they are).
> I've had better experiences with conventional dealerships
I don't know how.
I've got dealing with conventional car dealers down to an art form, and it still isn't even remotely comparable.
To get a Tesla you order it online and then go in for an appointment to pick it up. Hand them the payment, they already have all the paperwork ready for signatures, they give you the key cards and offer to help you install the app. You accept delivery and drive home. If you want, you can easily be in and out in 15 minutes or less. And the delivery guy doesn't try to sell me anything. No extended warranty, nothing.
I tried for a while to score a RAV4 Prime. Dealers were assholes about it, they don't have waiting lists or anything like that. "Come by every morning to see if any show up. We sell them all within 15 minutes of arriving so we don't need you."
So I bought another Tesla. At this time the Toyota experience has left such a sour taste that I will probably not ever consider one of their products in the future. Other manufacturers have really stepped up their game anyway, so it's not like Toyota makes the only reliable car you can buy.
Easy to catch up when EV market is shrinking. Toyota is right, gas hybrids are the future. Awesome range, you don't have to own a home to charge one, no problems in cold weather.
The thing about hybrids is that while you get the benefits of a gas engine (not needing to charge), you also get most of the combined drawbacks of ICE cars and EVs. You still need to go to the gas station, change the oil, maintain the belts and filters, etc. If you're mostly driving in EV mode, stale gas could even be an issue (though that's probably not a huge concern for most). But you've also still got electric motors and battery that could fail, although admittedly the battery is a lot cheaper.
IMO hybrids could have a lot of life as a stopgap, but full EVs are pretty clearly where things are going. We've got chargers being installed (Tesla 4th Gen) that can charge at 600kW. Cars can't handle that yet, but the current 800V platforms are getting closer. Once you can get the better part of a full charge in less than 10 minutes, it's not really less convenient than stopping for gas on a trip. And as more people get EVs (and even PHEVs), more buildings will be equipped with charging. Even a regular 120V outlet is fine for most people for day to day overnight charging - especially if they can get a quick top-up to near full at a supercharger when needed.
Summary: hybrids are great for a lot of people right now and in the near future. In the medium to far future, EVs are going to be superior in, I think, all relevant metrics^. (Even cost, as batteries will get cheaper, while the cost of added hybrid components will stay roughly flat.)
^Well, except weight and sound, specifically thinking of sports cars. I'd be a lot more excited about the new electrified Porsche 718 (Cayman/Boxster) platform if it were hybrid instead of full electric, for those reasons. Not super relevant for commuter cars though.
In present day reality though, most people live in cities in cheap apartments that won't have chargers for at least a decade. I watch woodpeckers destroy the wood trim at my building, you think mgmt is going to add EV chargers any time soon? Hybrids have superior reliability and lower cost of ownership than pure gas which is why uber drivers and nyc tax have adopted then en masse. All of the disadvantages of hybrids are theoretical or from some lofty "elegance" perspective when in the real world, hybrids work brilliantly. Toyota has been ruthlessly pragmatic with their cars and that's why they've worked. It's admirable how much they've avoided the EV fad and stuck to practical vehicles. It'll be at least a decade until they're on par with hybrids.
The fact that they already sell the most popular electric vehicle in the US and Japan, and have done so since they launched the very beginning of electric vehicles, over 25 years ago? (Pruis)
> I know people around these parts think that Tesla has uncovered some magical factory building ability, but can you even consider the fact that maybe Toyota knows what they are doing?
Not a Tesla fanboy (I'm turning mine in for a Rivian), but the OP wasn't saying this, not sure how you got that conclusion. They are saying for a car company they are (1) way behind and (2) any investments they are making won't reach fruition for years, nor likely make a dent in the industry.
Outside of MB and the Chinese EVs, the design of Tesla motors is far superior. Their build quality and finishing is awful however - something the traditional players do really well.
The OP drew a direct comparison from what Tesla spent on a plant, to what Toyota is spending on a factory. How can you draw a different conclusion? What makes Tesla "right" and Toyota "wrong"?
>They are saying for a car company they are (1) way behind and (2) any investments they are making won't reach fruition for years, nor likely make a dent in the industry.
Way behind what? The RAV4 sold more units than the Model Y last year, and that's just one model. Again, people have this weird way of extrapolating what Tesla is doing in the EV market (dominating) to the overall car market (rounding error).
I do believe that Tesla's success in the last decade was in large part due to the fact it was the only technology company that could use all the money people were throwing at technology companies.
Softbank's belief was that throwing capital would just make things work. But from wework to many other of their startups shows its not the case.
Telsa had to deploy their capital very efficiently in a capital intensive industry. Say their bet on the Shanghai factory, despite obvious IP leak risks and spawning deadly competitors like BYD, was their only choice to reach scale at a low cost.
We have known for decades that normally doesn't work. However we also have a few exceptions that tease people into thinking it works enough - or that they can identify the few winners (I'm not sure what). Amazon.com at one time was the place people were throwing more good capital after bad - I was convinced this was the case in the late 1990s.
BYD didn’t really differentiate itself until starting 2019, which is about a year after Tesla would have had to complete its forced technology transfer program to establish Tesla Shanghai. BYDs first new generation EV concept car in 2019, and production of the Seal and other major EV products (which looks like clones of Model 3s, etc) didn’t start in earnest until 2022. They changed their logo to be a stylistic copy of the Tesla logo in 2022.
Yes, their bus and ICE lines long predated, and they had hybrids built out of forced technology transfers from Toyota. But their EV lines that are so popular didn’t start until after Tesla acquired their corporate license and rights to build their gigafactory. If you’ve done business in China you know forced technology transfers and training of competitive local workforces is contingent on those stages. The factory itself and its parts supply chain would also have required transfer of technical knowledge, skill, and local supplier ability without exclusivity.
It’s not a knock on Chinese people to say the Chinese government is intertwined in Chinese industry (it is communist after all and ultimately the means of production is a public trust), or that there is no “fairness” by western standards in Chinese industry and governmental influence. But it’s also disingenuous to believe BYD pivoted to a full on global Tesla competitor in 4 years from being a low end hybrid and bus manufacturer based purely on their tenacity and innovation, neither of which is BYD known for in its history (having been propped up as a money loser for decades by the government and facing a lot of intellectual property lawsuits from Toyota, Mercedes, Renault, and others throughout its history). It’s too implausible to take seriously and there’s no reason to be credulous.
Toyota initiated the hybrid as a modern platform, and they continue make the best selling hybrid in the world (Prius). But since they don't want to be in the business of making undesirable vehicles with short lifespans that require expensive maintenance, they have stuck to hybrids rather than full electric and all the extremely costly low lifespan batteries that go into them.
Speaking as a 2004 Prius daily driver, the Toyota approach works. And I guarantee I'm a hell of a lot more "environmentally friendly" than anyone who commissioned literal tons of metal to be dug out of the earth to make their "green" new Tesla.
And that's not even mentioning that in 20 years we won't be mining materials out of the ground anymore, will just be recycling existing battery materials
The break-even depends on the source of electricity, which in turn depends on Geography.
If the electricity is from coal, the break-even is after 5 years; even then, the lifetime emission of the EV is not even 10% less than that of the conventional gas car.
If the electricity is from hydro and other 100% non-fossil fuel renewables, than the break-even is even shorter, under a year, and over the lifetime the emissions are about 70%~80% less overall (and the longer the car is driven compared to a conventional gas car, more than 13 years, the greater the reduction in lifetime emissions)
OP continuing to drive a 20-year-old car (of any kind, not just a hybrid) is likely more environmentally friendly than buying a new car every few years. They're doing the reduce part of "reduce, reuse, recycle." A long-lasting, low-maintenance hybrid has a good argument for being very environmentally friendly.
1. Conflict of interest. Is there any alternative report?
2. 2 years is vague, do we have it in kms?
3. Which car is it against? How does it compare with Prius 2024?
Also, how much investment in renewables is because of EVs? If we had 0 EVs and same renewables, coal/oil/gas generated electricity would have gone down by what is now consumed by EVs.
Parent stated they drive a Prius, which is not the "standard EV" that article mentions. They slate 24mpg, which is laughable: that's around what my old gas guzzling V8 got, and they call it the norm? The Prius gets high 40's easily. But it's a EV fluff piece published by "the EV company", one can't expect scientific integrity.
In fact, reading through the lines of Tesla's own fluff piece, in places like China the Prius is net-environmentally positive even year by year as compared to the Model 3. China has the most emissions of any country, so that's a pretty big caveat to simply ignore. But again, fluff piece by the fluff company.
> But since they don't want to be in the business of making undesirable vehicles with short lifespans that require expensive maintenance
The average BEV is lasting just as long as any other car on the road and the used market is not filled with "broken EVs requiring expensive maintenance". The opposite seems to statistically be the case: the used market for EVs is "barren" because the cars don't need expensive maintenance and often stay with their first owners for longer and when they do move to new owners don't often go through the traditional used market because they don't need as much maintenance.
You've been lead to believe some interesting misinformation. Toyota themselves have been a source of some of that misinformation, which is further unhelpful.
Do you have citations? I can think of alternative & plausible explanations:
- the used car industry is just barren post-pandemic. Prices are up and inventory is super low [1]
- EVs are generally not that old! Why put a BEV up as a used car when it's just a few years old? The average age of a used car is 6.1 years (according to CBC in Sep-2023) [2]. Further, that 'used car' age is up from 4 years, which further indicates the first point that the used car market is very short on supply. Most of Tesla's sales have been in just the last 4 years [3], Tesla represents a lot of BEV car sales in the US (going from memory, it was about 75% and is down to around 55%). In such a short amount of time, most BEVs are essentially still brand new. Thus, BEVs not being in the 'used' market is somewhat expected since they are half the age of the average used car, most of them are under 4 years old.
Thus, their lack of presence in the used car market could easily be more a function of their age (relatively brand new) compared to: "don't often go through the traditional used market because they don't need as much maintenance."
"All in" is a very strange way to describe a multinational corporation producing in the single digit thousands of an item. They tried something, it hasn't panned out yet, they're sticking to what they know works in the mean time.
Because the Japanese government bet big on hydrogen and heavily subsidized the industry. Also, is there any evidence that hydrogen vehicles have short lifespan or require expensive maintenance? I don't disagree about how undesirable they are based on fuel cost but its hard to suss out how much of that is just based on extremely low production.
>> Environmental groups have long criticized Toyota for being slow to move toward fully electric vehicles, instead clinging to gas-electric hybrid technology.
When you run a company as large and old as Toyota, you always hedge your bets. There are some other options to battery-powered electric vehicles (hydrogen IC). They are currently not as mature but anyone running something as big as Toyota needs to hedge against that sort of outlier tech. If Toyota abandoned IC, got rid of its IC production lines, they would suffer hugely if hydrogen IC one out as the green tech. All the major car companies do such things. That's why they have survived as long as they have.
Would Tesla survive if a new hydrogen storage killed the market for battery-powered cars? Toyota has seen and survived a few such revolutions.
Hydrogen as a sole technology is going to keep eating that 2-3x energy penalty versus batteries regardless of storage tech. Hydrogen IC has even worse efficiency than FC. The only exception would be if hydrogen mining yields world-changing amounts of the stuff.
As a hybrid technology, it has a case. If you run 80% of the time on battery and 20% of the time on hydrogen at 50% RTE, you burn 120% of the fuel. But if you weigh 30% less, you could end up saving energy. The up to 60% efficiency of the fuel cell is losing energy as heat, and people like to run the heater, so some of that energy isn't lost in appropriate climates. And of course, refueling is faster for road trips. The best system weight is probably for the experimental direct-ammonia alkaline membrane fuel cells, assuming it's possible to stabilize them, because ammonia fuel systems (about 100 psi) are much simpler than hydrogen systems (about 10000 psi!). So there's a little room left for the hydrogen fans. But it's fundamentally a battery-powered car most of the time.
Bet hedging would’ve meant introducing the BZ4X years ago. Instead, there were 8 years between when Toyota announced their first hydrogen car and their first electric vehicle. This if an example of simply betting wrong.
Exactly. Toyota's CEO also explained a few weeks ago that they need to build cars for the whole world. Many countries are not ready yet with infrastructure for electric cars.
I would also add since insurance companies don't want to insure the transportation of batteries in container ships, it makes it difficult for Toyota to produce electric cars in all regions, it would mean they would always need to have a battery factory nearby.
https://toyotatimes.jp/en/toyota_news/1055_1.html#anchorTitl...
> are not ready yet with infrastructure for electric cars
The same infrastructure they need for everything else in their life. I bet they have way better access to electricity than they do hydrogen. Or even gasoline, frankly. Solar panels are cheap.
Globalization is rolling back. It's about to be boom times in America as long as the politicians from all parties can actually move from one troth to another and actually pass bills.
Cars, and EVs in particular have strong protectionist laws in the US that make it more expensive to import vehicles than to build them locally. There are a few other sectors like semiconductor fabs where we have started to introduce protectionist policies but I haven't seen any movement to expand those types of policies to most other manufacturing sectors.
That's that magic of concentrated benefits and diffuse harms. The inverse is manufacturing workers who suffer concentrated harms from cheaper foreign competition and everyone else enjoys the slight benefit of cheaper TVs.
Seems to be almost daily news stories about huge capital investment in manufacturing in the US, a couple billion here, a couple billion there. Was I just blind to these 5-10 years ago?
Geopolitics: China's sudden shift to authoritarianism under the new emperor has everyone fleeing for the exits as the US and Europe abandon the project to bring China into the club.
Economics, Neoliberalism is dead. The pandemic killed it. Policy makers well understand the economy can tolerate a lot of disruption.
Politics: Dispossessed voters turning to fascism has sharpened politicians and sane business leaders minds.
Global Warning and new Tech: Solar, wind, batteries, and the need to faze out fossil fuels creates risks and opportunities. Risks will be born by those that try business as usual.
Increased automation: Low skilled dirt cheap labor is less important than it was 20-30 years ago. That changes the balance point between low cost offshored labor and the pain in the ass that offshoring is.
> Policy makers well understand the economy can tolerate a lot of disruption
If I understand you correctly, this is my reading of the pandemic as well. We suddenly all realized there is a _ton_ of slack in the system. On the individual level, but as well as societal.
Yeah exactly. Instead of the economy being a delicately balanced machine that you don't dare touch. It turned out you can push it really hard and it'll hold together. At that point the idea that if you change industrial policies the whole thing will collapse and it'll be your fault went out the window. Policy makers have vastly more confidence in 2024 than they did in 2019.
Geopolitics: China's sudden shift to authoritarianism under the new emperor has everyone fleeing for the exits as the US and Europe abandon the project to bring China into the club.
No. This is simply because the US and other developed economics do not want competition from Chinese companies. Chinese companies are moving up in the value chain which is a threat economically to the US and allies. It's nothing new. It's the same playbook used on Japan.
“When governments permit counterfeiting or copying of American products, it is stealing our future, and it is no longer free trade.” So said US President Ronald Reagan, commenting on Japan.
Not convinced: Not enough workers with the appropriate expertise to outmatch China and there is no appetite to import more people from either side of the aisle (despite what you might hear in the news).
>But people might be more happy walking, biking, etc.
No scenario where division does not increase especially after this upcoming election.
These local factories exist due to automotive manufacturing "domestic content" laws, as opposed to whatever JIT manufacturing philosophy Toyota might have. Pushed by the UAW and signed by Reagan in the 1980's, the US has many foreign car factories in the US as a direct result.
This is of course mostly due to the giant US subsidies the federal
government is offering citizens now, but the EV must be "built"
in the US (Which has some loopholes and strange definitions in it)
I dont quite understand why the sales of EVs in the US is considered
to have flattened out according to some statistics.
> I dont quite understand why the sales of EVs in the US is considered to have flattened out according to some statistics.
Politics. Some people want it to be true, so they conflate an easing of the growth rate as an actual rate reduction. It could also be innocent ignorance of statistics.
The real hang up with EVs right now is primarily price. They're just reaching the point where TCO is a wash. Historically, most people are extremely responsive to fuel cost advantages, so as the capital cost comes down most people will switch. At least the ones who can charge at home, which is most.
I do feel bad for people who live in places with high electricity prices, like California and Massachusetts. Makes it harder to win on TCO, but at least the convenience factor is still there. But for those who can access sub-10 cent per kWh pricing, it's nice to spend a few hundred dollars per year for fuel.
> The cheapest in the country is $0.1122/kWh in Utah
That is demonstrably not true. That tool is reporting "average rates" for each state and excluding time-of-use. E.g. I pay 4.7 cents/kWh inclusive of all grid fees, but only after 9pm. It's trivial to schedule charging for an EV so it happens when you sleep.
The real point is that Tesla has been driving prices lower than other manufacturers are willing to stomach, and that resistance to price matching shows up as cars sitting on lots.
I was looking at Hyundai’s Ioniq 6, but at $38k you get less HP and meaningful/comfort features than my 2015 v6 accord that I bought in 2018 for $19k (now worth $18k).
I only drive like 3-6k miles/yr anyways.
tbf the car market seems to have out stripped baseline inflation in general though.
My understanding is this is model and region dependent. Example: the Ford lightning has tepid demand in a lot of US markets and a multi-year waiting list in Canada. (I realize you're focused on US, but so much of the auto supply chain is coordinated between the 2 countries)
I like the Lightning but as a practical matter it's a little bit of a tough sell. Pickups are so terribly inefficient to begin with that it needs a boatload of battery just to have acceptable range. That's expensive, and also increases the time it takes to charge. I commend Ford for the ambition to make an electric version of their best selling vehicle, but I think that segment will be stronger when 200+ kWh batteries are affordable and flattish 350kW charge rates are the norm.
More generally, the IRA and the Infrastructure Investment and Jobs Act, and the CHIPS act has encouraged investment in US manufacturing, which is surging.
US domestic manufacturing became a major theme in the last two prior US elections.
If you look at growth charts in US factory capital it started spiking just before the signing of CHIPS act which was pitched to congress in 2019, which was a bipartisan effort seeded from the Trump admin.
But it's success will be defined on how successful the factories are, not just how many billions/trillions of free $$ the US gov gives to megacorps to prop up these projects. We've seen many, many gov-incentivized factory announcements that went no where. Or worse wasted a ton of time & money of local govs + small town employees. The Obama admin had a few really bad examples of this.
> Or worse wasted a ton of time & money of local govs + small town employees. The Obama admin had a few really bad examples of this.
Indeed. China had even more examples, but overall they found the winners and boosted them. The US instead defunded and now China produces 80% of all solar panels in the world. It's similar for VC firm, for example, they'll invest in 10 companies and expect only a couple to be profitable.
> If you look at growth charts in US factory capital it started spiking just before the signing of CHIPS act which was pitched to congress in 2019, which was a bipartisan effort seeded from the Trump admin.
Do you have those charts available? I was initially going to give a commendation for pointing out the Trump's administration's role in the Chips act, but... the Chips act was passed in late 2022! "The bill was signed into law by President Joe Biden on August 9, 2022." [1]
What's more, while the CHIPS act was initially bi-partisan, it passed in a relatively partisan vote: "Every senator in the Senate Democratic Caucus except for Bernie Sanders voted in favor of passing the CHIPS Act, and they were joined by seventeen Republican senators" [1]
Bottom line, seems like this bill was presented to Senators* in 2019 and then took time to work its way through Congress. It does not seem the Trump admin had much to do with this (I would more says the CHIPS act was seeded from an initial bipartisan effort that originated in the Senate; there's no mention I see that the executive branch had anything to do with it in 2019; if anything, it seems that congress of 2019 and whatever role the executive had at the time both _failed_ to get the CHIPS act through; it was the next congress that got it done in 2022)
* I'm not entirely sure if 'presented' to senators means there was an executive branch role. My reading of the wiki article is that it sounds like the original 2019 bill originated in the Senate. I just don't see anything that mentions the executive's role in 2019 or 2020.
but these charts/analysis come from the White House so they are going to be a bit biased (how much is proposed vs real, etc).
I don't really see the value in debating the details of the policies as it's pretty clear Trump made rebuilding industry his #1 message, which was later co-opted by Biden in the 2nd election. Trump was just an utter failure at working with (a very hostile) congress and COVID destroying factory construction didn't help private industry either, or public spending priorities.
I also take issue with the idea China's success in manufacturing was a result of the gov choosing winners = a good thing. Gov as a giant VC sounds like a horrible idea, here in Canada they tried that in tech and it was an embarrassment. China's mass urbanization, huge cheap labour base, a culture of hard work, and the West happily destroying their own industry...it's easy to 'pick' winners in a flush market.
Those charts seem to indicate a spike after the CHIPS act was passed, rather than when it was proposed by the two bipartisan US senators in 2019.
> I don't really see the value in debating the details of the policies
> Trump made rebuilding industry his #1 message
Not debating policy. I don't see the evidence that Trump is linked to the CHIPS act. While that might be his message (as you claim), the evidence of him doing anything for that relative to the CHIPS act is lacking. The attribution beyond two bipartisan senators proposing the CHIPS act in 2019 is so far without evidence. Further, when the CHIPS act did pass, it was despite Republican opposition. In essence, there doesn't seem to be any evidence Trump had anything to do with the CHIPS act other than holding office while it failed to go anywhere in congress.
> I also take issue with the idea China's success in manufacturing was a result of the gov choosing winners = a good thing.
My claim is that without Chinese government support, China would not be producing 80% of today's solar panels. According to 'ucigcc', the Chinese government played a big role in creating a domestic market (demand) for solar panels. [1] Further: "Credit lines to expand manufacturing capacity were brokered and backed by local governments and state-owned firms, even in the years after the global financial crisis when the collapse particularly of European markets led to overcapacity in global solar markets. " [1]
Taking stock from [1], the Chinese government induced demand for solar panels (subsidized them), and supported the industries producing the solar panels.
From the same reference: "In 2015 the central government launched a so-called Top Runner program. Top Runner projects injected incentives to deploy advanced solar PV technologies and retire the production of dated technologies. Module cost continued to fall because of these incentives, while module efficiency continued to increase. Particularly installations of high-efficiency panels in Western China were able to achieve grid parity because of those incentive changes, yet broader issues, including the perpetual underfunding of the renewable energy fund, the low profitability of domestic manufacturers, overcapacity, and broader trade tensions remained unresolved."
The reference does not 100% back my claim, but I would say strongly supports it. It's hard to see the Chinese solar industry being the same without all of the government support.
> Gov as a giant VC sounds like a horrible idea
On its face, sure. Though, when there is a war or during the pandemic this cames into play. That is an extreme example, there are less extreme examples. In these extreme examples, the government shifts market forces by implementing price caps and forcing production. Governments do similar in less heavy handed ways all the time.
Reference [2] supports this notion, there is a history of governments selecting strategic industries, supporting them, creating demand for that industry - and then once seeded the industry has legs to run on its own. To do this, Governments can create entire markets, which in turn creates enough demand for suppliers to come online.
From [2]: "The emerging U.S. advanced battery industry represents a bold experiment by the federal government in direct financial support of private companies to establish a domestic manufacturing industry."
"The photovoltaic industry is an example of a U.S. high-tech sector that has lost global share but has a solid opportunity to re-emerge as a leader with the right mix of federal and state policy support. In the case of solar power, a deciding factor will be whether the United States will become a big enough market to support a large-scale, globally competitive manufacturing industry. Federal and state incentives will be essential for the next few years, until the cost of solar energy can compete against electricity generated from fossil fuels without subsidies. Another question is whether U.S. companies that focus on products incorporating promising new technologies will be able to survive surging imports of low-cost photovoltaic cells and modules based on mature technologies long enough to attain economies of scale. "
"This turn of fortunes is primarily due to strategic moves and investments in new technologies by U.S. semiconductor manufacturers. Yet, their success also rests on the important contributions of U.S. policy that was driven by an engaged industry. There were two additional interrelated elements to the U.S. success:10 The research consortium SEMATECH, a $200 million-a-year research effort co-funded by the federal government and most large American chip companies, accelerated productivity and innovation in semiconductor manufacturing based on a common technology roadmap and enabled a rapid decline in prices.11 Persistent trade negotiations and enforcement of previous agreements won commitments from Japan to open its market to U.S. semiconductors and curtail dumping in any world market.12 This was deemed essential to prevent the United States from becoming a high-priced island in a sea of underpriced semiconductors. Had that occurred, it would have severely disadvantaged downstream American electronics equipment producers compared with competitors producing abroad utilizing lower-priced dumped chips."
"The decline and resurgence of the U.S. semiconductor industry offers many useful lessons for policymakers and industrialists grappling with how to bolster other American high-technology sectors facing intense international competitive pressure. It shows that erosion of U.S. leadership in manufacturing is not irreversible as long as both industry and government are committed to cooperative action, both on trade policy and in well-designed research programs that will lead to innovation"
What are some examples of this? Tax-credits is a big one. Think of Tesla, sales were boosted because there was an EV tax-credit. Further, there is actually no Tesla without the US department of Energy. "In January 2010, the Department of Energy issued a $465 million loan to Tesla Motors to produce specially designed, all-electric plug-in vehicles" [3] Without that loan, Tesla would have been toast.
> China's mass urbanization, huge cheap labour base, a culture of hard work, and the West happily destroying their own industry...it's easy to 'pick' winners in a flush market.
While that might all be true - when China was building its solar panel industry - the market was not flush. To your point, the Solyndra example and the subsequent divestment are good examples of the US destroying its solar industry. The lack of subsidies for solar panel meant demand and production remained anemic, meanwhile there were strong subsidies given directly to oil companies. The USG effectively cut-off the tap before demand picked up, why would then any US company produce very expensive solar panels with nobody really to buy them? Now that the price has come down, China just dominates, it was their innovation and supports that created the conditions for that to happen.
> I also take issue with the idea China's success in manufacturing
I am being specific to the solar industry. A broader generalization to all of manufacturing would need its own evidence. Yet, there are broad over time and across many governments, examples of industries that got their roots from government support. The solar example is very salient because it was so notable with Solyndra and then the US not strongly supporting renewables, and then lost out big on that industry.
Yes, but the CHIPS act was also signed by Biden. I think we can fairly credit him for seeing it through. Trump talked a lot about bringing manufacturing back, but he did not have the self-discipline to actually see any of it through; legislatively, Trump is a master of self-sabotage.
But it is true that the CHIP had bipartisan support, but the ones who supported it were not MAGA types, but people like McConnell.
Trump was the first president with no political, military, or even lawyer experience. And it showed, badly, when it came to congressional policy making.
But he no doubt was a major reason domestic manufacturing shot to the top of Biden's election priorities, after it was a major sticking point that Trump fared far better with the working class vs Hillary.
Even Michael Moore conceded back then that his messaging around rebuilding gutted industry was far better, so it's not surprising it was co-opted.
Which is a good thing, what matters is listening to people and getting results at the end of the day.
This is just not true. Trumps tariffs have been one of the biggest motivators of reshoring, which started under him. Yes the chips act is also great, there is no need to pretend one guy was useless and the other did all of the work its bipartisan and the two presidents work in this arena has complimented each other.
I'm left of Bernie and voted for Biden but I tend to not like takes like this. Is there a specific policy that he championed that is responsible for this? To me, it's like when people cheer a 'record stock market' as an example of a president's abilities, but fail to mention every single modern president has had a record stock market at some point in their term.
> Is there a specific policy that he championed that is responsible for this?
This was something the President activity campaigned on (Build Back Better), pushed through Congress, and signed into law as The Inflation Reduction Act.
While it did little to reduce inflation (outside of medicine), it was a massive win for people who wanted more investment in clean power generation, more funds for the ACA, lower drug prices, and higher taxes on certain corporate entities.
Several battery factories that were planned in Norway have scaled down their plans or have been cancelled due to the much better incentives in the IRA.
An interesting contrast showed up in my RSS feed regarding this subject:
First this HN post: Toyota to invest $1.3B in Kentucky factory to build battery packs and new EV
A few lines below that: Toyota Refused To Hop On The Electric Vehicle Bandwagon, And It Paid Off Big Time [1]
We'll see where the chips fall but thus far it seems Tesla is one of the few western companies which manages to profitably produce and sell consumer EVs. I suspect Chinese companies like BYD run at a profit as well but it is hard to get access to reliable data. Volkswagen seems to be aiming for 'profit parity for EVs' in 2025 but they seem to have a long way to go [2].
These empty promises are how we ended up electing Trump the first time and it's virtually guaranteeing that we'll elect him a second time.
Rural Kentucky is in horrible shape and a lot of people here were placing hope in this, much like they have so many other empty promises from their leaders, so at least stop acting surprised when the consequences show themselves.
He means that companies exist to make a profit, supply customers and their needs and to pay employees.
If they make a promise to spend money and economic conditions change to the extent that they would lose money, it makes sense to not continue with that commitment.
Comparing a company making a profit with a politician trying to get elected is not fair.
That's not how promises or commitments work. It's true that that describes the behavior of profit maximization engines, but the language of your justification implies wrongdoing.
> Rural Kentucky is in horrible shape and a lot of people here were placing hope in this,
"Rural KY" is not all that big, a couple million people, if that, and solely exists to the rest of the US for low-key victim-blaming election cycle human interest dreck.
These news stories about manufacturing expansion are all about development just outside large towns and cities, like bowling green, louisville, cincinnati, ... and will draw similar demographic than if they were in Texas, Georgia, or North Carolina.
And fwiw, just nitpicking, "rural ky" can also include the bluegrass, and that's just plain comfortably rich.
I was wondering how the manufacturers address the potential culture conflicts. Obama's documentary American Factory revealed two notable contentions. One is that American workers think that the management is too tough on them while the management think that the workers are too unreasonable. The other is that Chinese workers are 30% (or 2X?) more efficient than American workers. I have no judgement on the first contention, but the second worries me. American labors were known to be the best in the world many years ago, and a strong argument against offshoring manufacturing was that Chinese workers were much worse than Americans. Yet the tide has turned.
I don't really follow what you're trying to say with your last sentence and I'd be skeptical of a claim that Chinese workers are 30% more efficient, but Toyota, Honda, Nissan, and others have maintained US manufacturing facilities for decades and seem to be doing just fine with any potential culture conflicts.
The 30% number you cite could be true but perhaps in order for Chinese (or any other country) manufacturing to be economical perhaps it needs to be 60%. Mexico is actually important here.
Toyota has manufacturing facilities in at least 16 countries, so they probably have this figured out. US import duties make it especially lucrative for manufacturers to have US facilities, which lines up with Toyota having 10 other facilities in the US, plus some in Canada and Mexico.
Still, in my eyes that only makes it more intriguing how they bridge the cultural differences, since whatever they are doing seems to be working.
> claim that Chinese workers are 30% more efficient
I was just quoting what the documentary said. There was so much contention between the management and the workers in the American glass factory featured in the documentary. In the end, the management hosted a competition between the American workers and the Chinese workers. Chinese workers won with a big margin.
Yep. It's a great documentary that I enjoyed watching, but I think we need stronger evidence here. Documentaries are not necessarily factual, and they often times have an angle despite the idea that they're just producing factual content/stories.
Showing that the Chinese workers won by a big margin doesn't prove anything. It definitely doesn't prove anything outside of that specific scenario.
I doubt that will be a problem here. Their Kentucky plant is huge, it's been around for decades and it makes lots of high quality cars including the Camry. Toyota goes to a lot of effort to teach the workers their production system and culture.
I am curious about what vehicles these will be for. When Toyota says “EVs” they often mean hybrids. The article makes this distinction, but Toyota didn’t in any statements.
The e-TNGA platform that underpins the BZ4x was supposed to have several more products built on it, including a larger SUV. This vehicle could be that SUV, or it could be one of the first products built on the platform that will replace the e-TNGA.
The Georgetown plant currently produces Camry and Rav4.
In the US, some PHEVs with relatively small batteries can qualify for the full $7,500 tax credit.
You might be on to something there. It would certainly explain the size of the investment. A $1.3B plant might not build a lot of EVs, but it could build quite a few PHEVs.
Specifically it's 7kWh minimum in addition to all of the other sourcing and assembly requirements. In practice there haven't been any PHEVs with less, the smallest PHEV battery so far in the US is 8kWh in a Ferrari. It'll be interesting to see if more small battery PHEVs come out trying to target HEV price points with the tax credit. It would still be a huge jump up from standard hybrids which as far as I'm aware are rarely more than 1.5kWh.
kWh makes sense if your goal is to stimulate US battery production but I really wish there were an all-electric range requirement, A hypothetical 6.8kWh Prius Prime would get more range that the 21kWh Wrangler 4xe.
Yeah, and the 7kwh should cost ~$1k. So if the manufacturer wants to maximize the number of $7,500 rebates, PHEV is the way to go. 11 PHEVs == one 300 mile compact crossover.
They don't even have to be good PHEVs. I agree that there should have been a range requirement.
The Kentucky plant will produce the upcoming 3-row BEV called bZ5X. Additional BEVs have been announced for 2026 and will likely share battery components from Kentucky and the new battery factory being built in North Carolina.
I don't think there is such thing as manufacturing investment without subsidization any more.
And it most often results in the Winner's Curse: the entity providing the greatest subsidies win's the "investment", but they give up so much in the process that the economic benefits are wiped out.
See: Tesla in Buffalo, VW in Ontario, FoxConn in Wisconsin.
I'm not sure if I agree, tbh. You've certainly brought up some good cases of failures, but what about:
Tesla in Sparks NV, BMW in Greer SC, or Mercedes in Alabama and SC? It seems like those have more than paid for themselves by now. In at least one of those cases, they've had huge regional impacts.
"KEDFA approved the $43.5 million tax incentives shortly after the Toyota expansion announcement was made Monday. The dollar figure combines the incentives from the Lexus expansion in 2015 with the latest investment for a total of $190 million in incentives, said Jack Mazurak, communications director at KEDFA.
Let’s be honest. Southern state probably lured them in with a nice package.
Toyota has been moving ops to states with lower cost of living for awhile now. Toyota corp in USA shifted ops from CA to TX a decade back. Many workers hate or regret the move. C-level executives are excited because they pay less in state taxes. Probably even got a nice deal on the land.
Toyota broke ground in San Antonio more than two decades ago, in 2003, not one. Georgetown KY has been around since 1986 and Princeton IN since 1996. Toyota has been investing in “low cost of living” states for a very long time.
lol
#41. Kentucky [0]
Percentage of registered vehicles that are electric: 0.06%
Total registered electric vehicles: 2,650 (#33 overall)
Number of statewide charging stations: 222 (#37 overall)
Number of charging ports per 100 EVs: 19.9 (#21 overall)
TMMK (Toyota Motor Manufacturing Kentucky) has an $8B plant in Kentucky, the largest Toyota manufacturing facility in the world. This plant is where all Camry models are manufactured, which is the best-selling car in the United States. Additionally, all Rav4 Hybrid models are manufactured there, including all the motors (not just assembly).
Seems like a smart place to build your own batteries to me.
On the bright side, some manufacturing jobs brought state side. On the other hand, it’s in KY. These multibillion dollar deals tend to land in states with the lowest cost of living, non-educated workforce, minimal enforcement/respect of environment (dump waste into rivers), and tend to be subsidized at the state and local levels.
Apple opened up shop outside of Austin (ie, not Travis County) because of lower taxes and more incentives provided by other county. Multi Trillion dollar company by the way. Amazon has been opening up warehouses in the sticks, soaking up all of those incentives from those desperate small towns looking to giveaway the land for a couple of decades in exchange for short term gains (mayor/city council able to say, we brought X jobs to Y town!1). Yet another multibillion company taking advantage of the desperate.
What do the people get in return? Getting the opportunity to work shit hours in a non-union job. Possibly back breaking work. No investment in their future. Just cogs in the wheel which are completely fungible (broke your back? File a claim with insurance. Fuck off. Deal with it. Not our problem. Then hire the next sucker to replace you. Rinse and repeat)
State environmental laws can be more restrictive than the Federal but not less, so if anyone is dumping into waterways the EPA can go after them.
Don't know of many waterways that are solely in one state so the EPA automatically has jurisdiction as well.
What is it that you are purposing? That companies don't go to states with low cost of living?
The idea that "it's KY" is bigoted. They are people, just like anyone else. We don't tolerate it when others are dismissive of people based on their race and we should not be tolerant of the attitude based on where they live either.
They should unionize. In fact UAW wants to unionize all automakers including Tesla and the ones in the south. They failed in the past but with the downward trajectory of population size, there is a great opportunity here.
Now you might say they will just leave the US and manufacture elsewhere. Well thats where tariffs come in and the UAW is a core voting block so they will have to alter any plans to move to Mexico. Higher inflation will be the result but its probably worth it long term.
No one at these Toyota facilities has an appetite for that. The benefits package and overall lifestyle for a TMMK worker is quite nice compared to the average person in the Lexington metro and the jobs are competitive.
Perhaps ironically, when I was in school, the biggest issue was finding engineers that would accept the pay which was generally lower than guys on the floor.
Well just 20 mins ago we heard that the majority of people at the VW plant in Tennessee signed UAW cards. Now this wont guarantee a successful vote but it makes the leadership give an honest attempt so maybe times might be changing for the Toyota plants as well.
Sorry, but to be frank, you just don't know what you're talking about.
I did a co-op at TMMK in Georgetown, KY many moons ago and it was a short drive from Lexington where I was studying for my mech engineering degree at UK. It is a massive university with a solid engineering school, for the uninitiated. The metro also has an excellent network of technical colleges and during my various other stints over those years, I was always impressed with the quality of the workforce on the factory floors.
As someone born in the coalfields of Appalachia, I'll admit that the ignorant hillbilly stereotype has some merit, but that's two hours of interstate driving east of where this is happening and the cultures have almost nothing in common. Hill people don't really leave the hills and Lexington is quite the "big city" for where I come from, full of hifalutin Whole Foods shoppers. I think the series "Justified" does a good job of describing this phenomenon.
There is a lot more I could address about your thoughts on labor and poverty, but it's hard to move past your premise and I don't have time to write a treatise... but JD Vance did and it's pretty good.
Agree that often politicians sell out their people and natural resources (the rights and endowment of future citizens) for short term gain. This is a natural consequence of politicians being inherently terrible people by and large.
https://apnews.com/article/hyundai-georgia-electric-vehicle-...