[cbg0]

China, being a superpower, has a vested interest in bringing other superpowers down a peg as well as increasing other countries' dependence on China.

Their state has a serious incentive to ship out cheap cars to destroy the automotive industry in the US and the EU for example. When that happens they can double the price on all their vehicles and you can't restart your car factories to compete with them again until years down the line.

With Huawei its about telecom equipment which is essential in today's age, with TikTok it's about controlling the narrative, also essential.

Yes, US and EU manufacturers need to innovate and be less greedy but the cost to make things will always be higher than in China so even though protectionism sounds bad, you'll always have some of that around to even the playing field.

[pjc50]

Something I've been trying to articulate for a while is that the EV revolution is a smaller version of the phone and internet revolutions: it requires a bunch of infrastructure buildout, but it's also the result of individual consumer choices. And it's highly synergistic. But along with that, it will create "losers", existing companies whose business can't adapt to the new ways. Sears had a hundred-year start on Amazon as a mail-order business and couldn't adapt, for example.

In the middle of this was Jack Welch's "destroy your business dot com", which is still highly controversial. But he did at least recognize that running a big ossified business in a time of change was going to need a massive kick to get everyone out of their complacency (and if not, out of their jobs!). Cannibalize your own legacy business, or some competitor will.

I think this is a serious problem in existing car companies. They attach too much prestige and career to being "petrolheads", or simply working in the engine division; after all, that's the most expensive to develop and least easy to substitute part of the car. The EV transition threatens to sweep that all away. Probably most of the EU manufacturers won't really get on board until those people retire.

There's probably a whole other essay that could be written about labour relations and the decline of mass car manufacture in the UK while we retain a lot of high-end boutique expertise (Formula 1 etc).

Anyway, I have an EV on order from FCA Poland, so we'll see how that turns out.

[formerly_proven]

> I think this is a serious problem in existing car companies. They attach too much prestige and career to being "petrolheads", or simply working in the engine division; after all, that's the most expensive to develop and least easy to substitute part of the car. The EV transition threatens to sweep that all away. Probably most of the EU manufacturers won't really get on board until those people retire.

You speak as-if they didn't create EVs. It's just that most of the European EV platforms were resounding failures, be it CLAR, CLAR II (BMW), MEA1 & MEA2, (Mercedes), J1 (Porsche), e-tron (Audi), MEB (VW), of these MEB is pretty much the only one that turned around to generate some kind of volume, but that took many years. Sales numbers for all of these are way below predictions, we're not talking about a 50% miss here. I don't know how much a car architecture costs to develop, but I'd wager it is not a cheap endeavor. Between that and the comparatively large number of battery-related EV recalls these projects probably represent double-digit billions of losses for the European car industry. This seems realistic given the widely publicized $20bn Ford EV write-down. So given these enormous sunk costs and yet they're still somewhat investing in EVs doesn't read to me like they're not trying to compete on EVs. If that were the case, they'd just cut their losses, or done so years ago.

That's where all those European battery factories that were announced a couple years ago went: Consumers do not buy EVs anywhere near the expected volume and therefore there is no demand to finance such factories. The handful of batteries needed for the low volumes of EV production are easily sourced from existing factories and the rest is imported from China.

Stellantis/PSA doesn't appear in this story because they never went beyond compliance car EVs (i.e. their "let's stuff a 50 kWh gross battery and the cheapest electric drive we can buy from a supplier into an ICE chassis" approach).

[pjc50]

> Consumers do not buy EVs anywhere near the expected volume

OK so the billion Euro question is: why not? Tesla seem to be making adequate sales in Europe. China has passed 50% EVs as new sales. Norway (in Europe, but not the EU) is approaching 100%.

Is it simply price? Of the car, and/or electricity?

The EU was originally proposing to phase out ICE in 2035, which is now less than 10 years away!

> compliance car EVs (i.e. their "let's stuff a 50 kWh gross battery

I had noticed that all the Stellantis EVs have desperately bad range. I guess that's why they're showing up for cheap leasing offers to meet compliance.

But that's what I mean. It's an intentionally half-assed product. Only the recent Renault 5 and VW ID series cars feel like serious market entrants rather than "will this do?"

BYD and Tesla are popular in the UK, but not EU manufacturers. Why? Product? Price?

[orwin]

I think e-tron have some success. As do Renault (and Nissan) despite Gohsn insistence on not building on it (goshn was a very successful manager and finance engineer, but people should understand he destroyed R&D at Nissan, Renault and Alpine, killing any chance at success they had despite their leg up on electric car)

[adithyassekhar]

> They attach too much prestige and career to being "petrolheads", or simply working in the engine division; after all, that's the most expensive to develop and least easy to substitute part of the car. The EV transition threatens to sweep that all away. Probably most of the EU manufacturers won't really get on board until those people retire.

“Those damn pesky artists still painting by hand. We need to wait for them to die out to let the stable diffusion guys take over and then we will be number one!”

I know what I said. Engines are an art.

[pjc50]

> “Those damn pesky artists still painting by hand.

Long ago hand painters used cadmium yellow. It may be art, but it's also poisonous. Same for Napoleon and his arsenic wallpaper. In the end, same for CO2-emitting engines.

[yourusername]

>I know what I said. Engines are an art.

Some engines maybe. Your average 1.5 TFSI is the equivalent of drawing corporate memphis clipart for a paycheck, no one is pouring their passion into that. Maybe not so bad if it gets replaced by an EV/AI.

[JumpCrisscross]

> Jack Welch's "destroy your business dot com"

What is this?

[pjc50]

Difficult to find references other than my own memory and this paywalled Economist article: https://www.economist.com/special/1999/09/16/dybcom

[JumpCrisscross]

Huh. It sounds a bit incoherent and manic, but I think that’s actually what it was, not just the description?

Interesting takeaway is everything on there (smart homes, integrated financial media and trading, etc.) eventually happened, not by GE, except the GE Capital stuff, which wound up a disaster. So the signal to look for in AI is folks deploying levered balance sheets directly to consumers. Which I don’t think we’re directly seeing, outside OpenAI.

[mcdonje]

US companies outsourcing all of their manufacturing to countries with cheaper labor and laxer environmental & labor laws led to this. What did those titans of industry think would happen down the road? "I'll be retired." Corporations have way too much power in the US, and that has considerably weakened it.

[interactivecode]

Clearly the USA has the same vested interest. The difference is they are aggressively initiating war outside their borders to bully and get what they want.

[kalleboo]

This is somewhere where sensible tariffs actually do make sense. Set the tariffs to offset any government subsidies or environmental regulatory costs. If the cars are actually better, let people buy them, make domestic manufacturers compete. Just don't allow dumping.

Complete protectionism doesn't work because it makes your own manufacturers non-competitive on the global stage.

[pjc50]

> Set the tariffs to offset any government subsidies or environmental regulatory costs.

The problem is this is really hard to objectively measure.

> Complete protectionism doesn't work because it makes your own manufacturers non-competitive on the global stage.

Yes - and this is a problem Detroit has been struggling with since Japan got decent at cars. The recent wave of protectionism is backing them into the dead end.

[seydor]

How come this price hike hasn't happened with solar panels, inverters, telecom equipment, batteries etc. It's been a while that such industries in europe have become obsolete

[mschuster91]

> How come this hasn't happened with solar panels, inverters, telecom equipment, batteries etc.

It actually began a few months ago regarding solar panels and batteries [1].

[1] https://www.reuters.com/sustainability/climate-energy/china-...

[cbg0]

Solar panels, inverters and batteries are not critical infrastructure and I'd wager the jobs impacted are considerably lower than the automotive industry.

[lazide]

According to everyone building out renewables, they absolutely are critical infrastructure?

Frankly, what are they if not power delivery/generation - which is always defined as such.

[cjrp]

I guess it's a bit like the nuclear deterrent. The threat of them raising prices or refusing to sell to other countries might be enough.

[TreeInBuxton]

For telecom, at least, governments have legislated against Huawei equipment, Nokia is going strong from a European side

[pjc50]

Really this is conspiracy level thinking. It's not like there's no car industry in the EU, it's just that it's grown in the low-COL areas like Slovakia and not in high-COL areas like Germany.

Chinese imports and local manufacture should be able to compete in the "free market". It's just that that term has been heavily debased by idiots misusing it, like everything else.

[abc123abc123]

It has. There's an enormous amounts of solar panel manufacturers in china that had to close down, due to the governments ordered over capacity, to try and take over the world. This has led to enormous waste of resources in china.

Now the government has ordered massive development of electric cars, to push down prices to loss making levels. In a few years, a lot of chinese elctric car manufacturers will close down, just like what happened with solar.

The trick here for the west, is to copy china, and once the internal bubble bursts, launch its own companies in solar and e-cars based on copied chinese technology.

The hunter has truly become the hunted!

[Cthulhu_]

How is that different from what the US and (to a lesser degree) the EU tried to do? Both are examples of capitalism.

Actually I know why it's different, I was just doing an online knee jerk response the difference is that western capitalism has a hands-off (but regulated) approach, letting the companies do their own thing. China and their companies are much more involved. I'm sure the US was a lot more directly involved in setting the directions of its industry in decades past, but since then the industry and stock market took over the reins.

Another factor may be that in the west, workers have more rights, unionized, and set their own boundaries. But they were also constrained - what would've happened if someone at Ford 10, 15 years ago said "I want to develop an EV?". In the US, it took a new company (Tesla with a heap of investor money) to make strides in that area. But because Tesla didn't have any actual experience in making cars, they reinvented the wheel and are (from what I gathered) still building sub-standard cars.

If an experienced company like Ford or VAG set aside money and resources to reinvent the car every once in a while they would've been able to keep up. As it stands, all the existing car companies bolted a battery and engine to their existing models, turning their cars into some weird frankenstein of 20+ year old car electronics, electric drives, and entertainment systems because they didn't have what it takes to design a car from scratch.

They also tried to min/max and moved a lot of production to China; short-term that was a benefit, especially VAG was the biggest car manufacturer / seller over there, until they caught up and overtook them in very short order.

[throwaway2037]

    > Tesla ... are (from what I gathered) still building sub-standard cars.

I'm not here to defend Musk, but Tesla makes some excellent quality cars: Model S, Model X, and Model 3 are all very good EVs. I also expect the Semi (heavy haul truck) to be of excellent quality.

[haritha-j]

Oh yes, the hands off capitalism that involves the CIA forcing multiple regime changes in other countries to beenfit American corporations.

[AngryData]

I don't believe at all that China will always be cheaper. And in many cases I wonder if that is even true right now. Labor costs aren't what is keeping US manufacturing cost high, it is capitalist's demands for high and ever increasing profit margins and managerial bloat. Labor is only a small part of the cost of a vehicle. Workers wouldn't care if company profit margins were smaller or if the vehicles they help manufacturer are sold for less than the maximum possible, but the c-suites and investors do.

[cbg0]

According to ChatGPT the labor cost per vehicle is more than twice as high in the US versus China. $1,341/vehicle vs $585/vehicle

https://chatgpt.com/s/t_6a292f0205ec819182b54e48ce9702a3

[pjc50]

For vehicles in the $20-$100k price range? That feels too trivial to make a difference, is it correct or just a number chatgpt invented?

[cbg0]

I think it's based on a few sources + page 6 from here https://www.oliverwyman.com/content/dam/oliver-wyman/v2/publ...

[pjc50]

Still: if the number is that small a fraction of the overall cost, it barely matters which country it's made in? That's basically the cost of selecting a non-standard paint colour option, by the time you look at final price?

[glaslong]

Meanwhile I'm looking at 20 year old Suzuki light trucks with a 25% import tariff because American autos STILL absolutely refuse to make non- Monster Trucks

[DaedalusII]

the ironic factor is - this is how vw itself started, as did mitsubishi etc

this is called: sensible state industrial policy

[throwaway2037]

Mitsubishi? I disagree. There were founded two years after the Meiji Restoration (~1870) to build cargo ships and (later) mine coal. However, during World War II, they were a huge part of the Japanese war machine.

[Theodores]

Such a weird take, it sounds as if you have never read or listened to anything that the Chinese leadership have had to tell the world. Or for that matter, Confucius. Yet there is certainty of a paranoid mindset, with some 'yellow peril' going on. Hearst did well with that one!

Just read their five year plans. Not the 'yellow peril' fearmongering, just go to source and make your own mind up. The Chinaman is not out to get you. In fact, until recently, he looked up to you and had the open hand of friendship. He made you many beautiful things and you didn't say thank you, you wittered on about 'stolen IP' (from your stolen land, and it wasn't even your IP, not personally).

China is in no urgency to supply their fine electric cars to the 5% that consider themselves to be American. Why would you? The most litigious place going, with the cheap gas, sinophobia, tariffs and special dealership rules. There is no 'rug pull' either, you are on the 'rug pull' now, with US/EU vehicles costing a fortune. Chinese cars offer savvy consumers a way off, to the sensible land of great value cars.

What you are failing to understand is that, internally, China is hyper competitive, with no rent-seeking class and no settled in mono-duo-trio-polies to stifle all innovation, as per the West. What emerges from the brutal competition of the free market in China (free from rent seeking monopolists) is super-good when it makes it to the wider world.

Huawei kit was just too good, plus the backdoors for five eyes weren't in it, so it had to go. Do you honestly think they had 'communist' backdoors to key infrastructure they were selling into the West, to be scrutinised by armies of security engineers? They are not stupid.

As for the costs being higher in the West, that is just rent seeking, not workers getting paid more, just having more rent/mortgage to pay due to the class of rent seekers the West upholds as 'smart' when they are just parasites, in a financialised economy that is broken.

[pjc50]

> Do you honestly think they had 'communist' backdoors to key infrastructure they were selling into the West, to be scrutinised by armies of security engineers? They are not stupid.

The UK used to have a special BT+Huawei+MI6 joint office where the kit was subject to inspection. I never heard of anything confirmed coming out of there, and the thing seems to have vanished from the internet. So I suspect the order to phase out Huawei was similarly politically motivated.

[JumpCrisscross]

> internally, China is hyper competitive, with no rent-seeking class

The party elites and their families are all billionaires!