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Perhaps cars actually cost closer to what American and European manufacturers sell them for, and the communist state-backed BYD is the rent-seeking scam that’s

Perhaps cars actually cost closer to what American and European manufacturers sell them for, and the communist state-backed BYD is the rent-seeking scam that’s dumping vehicles below cost in order to achieve not-quite-commercial objectives.

throwaway63467 3y ago
It’s a bit funny though that after the subsidies were reduced all car manufacturers reduced prices of electric vehicles accordingly, hints at the fact that they’re still turning a nice profit with them. Volkswagen quadrupled their earnings in one year, many other car brands had similar increases. It’s not a cost issue.
jpgvm 3y ago
I don't think so. Most government purchase subsidies are or were phased out in China in 2022. BYD received massive grants during it's scale-up period, mostly in the form of capital expenditures being fully subsidized or land grants. Very rarely were subsidies/grants awarded for operational expenses though it did happen. Given the fiscal situation in China it's unlikely BYD will receive as much support in the future but you never know. Green transition is still a massively important political goal in China. Worth mentioning the scale of support it received is not dissimilar to Tesla which also benefited from very healthy subsidies and tax arrangements with the US jurisdictions it setup in. In fact if you include their $1.3B deal with Nevada (over 20 years though) I think you will find Tesla is in the lead in government money. Disclaimer: I'm both a BYD and TSLA shareholder
- ethanbond 3y ago
  BYD is for sure a legitimately remarkable company and to some degree I’m thankful for the competition. But I am highly, highly skeptical (and you should be too) of pretty much any number coming out of China. You should be especially skeptical of a company that can make such valuable contributions to the CCP’s hybrid warfare doctrine. BYD can degrade the US manufacturing base; degrade consumer sentiment (as seen above); put millions of mobile sensors on US/EU roads; etc. It is absolute naivety to think that’s a company that will ever need to truly stand on its own two feet.
philipkglass 3y ago
Or perhaps it's less expensive to make cars in China than in America, just like it's less expensive to make T-shirts and microwave ovens there. As Chinese manufacturing has moved up the value chain I've been hearing for 20 years that "Chinese $PRODUCT is just cheaper because of subsidies/dumping, and they'll hike prices once they dominate the market." But I've never seen the Chinese manufacturers actually raise prices above the old European/American prices even after they come to dominate different market segments. They can make a sustained profit even at low prices.

throwaway63467 3y ago

It’s a bit funny though that after the subsidies were reduced all car manufacturers reduced prices of electric vehicles accordingly, hints at the fact that they’re still turning a nice profit with them. Volkswagen quadrupled their earnings in one year, many other car brands had similar increases. It’s not a cost issue.

jpgvm 3y ago

I don't think so. Most government purchase subsidies are or were phased out in China in 2022. BYD received massive grants during it's scale-up period, mostly in the form of capital expenditures being fully subsidized or land grants. Very rarely were subsidies/grants awarded for operational expenses though it did happen. Given the fiscal situation in China it's unlikely BYD will receive as much support in the future but you never know. Green transition is still a massively important political goal in China. Worth mentioning the scale of support it received is not dissimilar to Tesla which also benefited from very healthy subsidies and tax arrangements with the US jurisdictions it setup in. In fact if you include their $1.3B deal with Nevada (over 20 years though) I think you will find Tesla is in the lead in government money. Disclaimer: I'm both a BYD and TSLA shareholder

ethanbond 3y ago
BYD is for sure a legitimately remarkable company and to some degree I’m thankful for the competition. But I am highly, highly skeptical (and you should be too) of pretty much any number coming out of China. You should be especially skeptical of a company that can make such valuable contributions to the CCP’s hybrid warfare doctrine. BYD can degrade the US manufacturing base; degrade consumer sentiment (as seen above); put millions of mobile sensors on US/EU roads; etc. It is absolute naivety to think that’s a company that will ever need to truly stand on its own two feet.

philipkglass 3y ago

Or perhaps it's less expensive to make cars in China than in America, just like it's less expensive to make T-shirts and microwave ovens there. As Chinese manufacturing has moved up the value chain I've been hearing for 20 years that "Chinese $PRODUCT is just cheaper because of subsidies/dumping, and they'll hike prices once they dominate the market." But I've never seen the Chinese manufacturers actually raise prices above the old European/American prices even after they come to dominate different market segments. They can make a sustained profit even at low prices.