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I'm not a fan of musk, but I think the fundamentals have turned on Tesla. Cheaper chinese EVs are coming out in two of the biggest 3 markets and traditional aut

I'm not a fan of musk, but I think the fundamentals have turned on Tesla. Cheaper chinese EVs are coming out in two of the biggest 3 markets and traditional auto makers are catching up in the US. A replacement level CEO would probably be making similar decisions.

nyokodo 2y ago
> Cheaper chinese EVs are coming out in two of the biggest 3 markets I expect this to be ephemeral due to geopolitics and the local politics. Chinese domestic consumption is lackluster compared to their production and they are “product dumping” on the rest of the world that have domestic manufacturing and varying levels of preexisting market protectionism. That and China’s belligerent geopolitical alliance increasingly clashing with the West and in their regions means that stiff(er) tariffs are imminent.
- nateglims 2y ago
  Outside of maybe the UK, I don't think Europe is nearly as dead set on the adversarial relationship with China and you can't buy retail Chinese EVs right now in the US. The demand reduction is also a problem for Tesla. But one thing Chinese EV companies have is existing products in the lowest market segments. Tesla is giving up on a car cheaper than the 3 and I don't think that's a particularly unique Musk decision. American public companies are allergic to low margin products.
  - ein0p 2y ago
    >> I don't think Europe is nearly as dead set on the adversarial relationship with China They will be “persuaded” with sanctions. Europe is not really a sovereign entity.
    - nateglims 2y ago
      The US is only really deploying broad sanctions on technology that might have applications in military and security competition. And sanctions are proving hard to really enforce if the entities involved never use dollars. EU defense and government contractors might not have a lot of agency, but plenty of other businesses do depending on the country.
  - nyokodo 2y ago
    > I don't think Europe is nearly as dead set on the adversarial relationship with China Market protectionism is sufficient to provide pushback on Chinese product dumping in Europe in the medium term. However, as the global order deteriorates and countries have to pick sides most of the EU is unlikely to choose to align with a Russian ally.
    - nateglims 2y ago
      They've been extremely selective in their targeting of Chinese firms accused of selling weapons to Russia. And last year Macron directly said europe has no interest in backing the US's position on Taiwan. I think as the global situation deteriorates, they are likely to want to focus on situations closer to the continent. I haven't heard if they are planning on stopping BYD from opening a factory in Hungary.
      - nyokodo 2y ago
        > stopping BYD from opening a factory in Hungary Opening a factory is a different matter. If the factory contains significant capital (ie isn’t just glorified assembly) then much of the manufacturing capacity is domestic as is the labor which is a method of avoiding tariffs that host countries tend to favor. The calculus is different at that point and could only affect the imported parts or raw materials if applicable. In a pinch such manufacturing can be nationalized and repurposed.
  - emptyfile 2y ago
    [dead]
- seanmcdirmid 2y ago
  Most countries don’t have enough domestic auto production to care enough not to buy cheap Chinese EVs. Most people don’t think about politics when they can buy a nice car for $20k.
  - nyokodo 2y ago
    > Most countries don’t have enough domestic auto production to care Countries without domestic production are also not major consumer markets, and when aggregated into major trading blocks like the EU their most influential member states do have domestic production and a strong protectionist bent so I expect they’ll also be strong armed into a protectionist umbrella. It also makes sense for Europe as a whole to not have its domestic production product dumped into oblivion as globalization crumbles.
    - seanmcdirmid 2y ago
      That really isn’t true. Australia is a major consumer market, SEA has money to buy things even if they don’t make many cars outside of maybe Thailand. Ceding the car markets of just the non major countries is enough to create huge waves in the industry. The EU and the USA can lockdown its market with Japan, but that’s about it.
      - nyokodo 2y ago
        > Australia is a major consumer market Australia is more than nothing, but a country with 26 million people and about 1.2 million new car sales annually isn’t tipping the scales of the global market too much. They’re also geopolitically aligned with the USA so the medium to long term outlook is negative for China trade relations. > SEA has money to buy things even if they don’t make many cars outside of maybe Thailand Every region has money to buy things and their business isn’t worthless, but SEA isn’t a big consumer market yet and isn’t going to be making up for the loss of/reductions in the big consumer markets. There’s only so many sales that the region can absorb even if we don’t factor in the fact that the region is adjacent to and frequently the target of Chinese military belligerence recently and for centuries. There is increasing regional geopolitical alignment with the USA albeit at arms length.

nyokodo 2y ago

> Cheaper chinese EVs are coming out in two of the biggest 3 markets I expect this to be ephemeral due to geopolitics and the local politics. Chinese domestic consumption is lackluster compared to their production and they are “product dumping” on the rest of the world that have domestic manufacturing and varying levels of preexisting market protectionism. That and China’s belligerent geopolitical alliance increasingly clashing with the West and in their regions means that stiff(er) tariffs are imminent.

nateglims 2y ago
Outside of maybe the UK, I don't think Europe is nearly as dead set on the adversarial relationship with China and you can't buy retail Chinese EVs right now in the US. The demand reduction is also a problem for Tesla. But one thing Chinese EV companies have is existing products in the lowest market segments. Tesla is giving up on a car cheaper than the 3 and I don't think that's a particularly unique Musk decision. American public companies are allergic to low margin products.
- ein0p 2y ago
  >> I don't think Europe is nearly as dead set on the adversarial relationship with China They will be “persuaded” with sanctions. Europe is not really a sovereign entity.
  - nateglims 2y ago
    The US is only really deploying broad sanctions on technology that might have applications in military and security competition. And sanctions are proving hard to really enforce if the entities involved never use dollars. EU defense and government contractors might not have a lot of agency, but plenty of other businesses do depending on the country.
- nyokodo 2y ago
  > I don't think Europe is nearly as dead set on the adversarial relationship with China Market protectionism is sufficient to provide pushback on Chinese product dumping in Europe in the medium term. However, as the global order deteriorates and countries have to pick sides most of the EU is unlikely to choose to align with a Russian ally.
  - nateglims 2y ago
    They've been extremely selective in their targeting of Chinese firms accused of selling weapons to Russia. And last year Macron directly said europe has no interest in backing the US's position on Taiwan. I think as the global situation deteriorates, they are likely to want to focus on situations closer to the continent. I haven't heard if they are planning on stopping BYD from opening a factory in Hungary.
    - nyokodo 2y ago
      > stopping BYD from opening a factory in Hungary Opening a factory is a different matter. If the factory contains significant capital (ie isn’t just glorified assembly) then much of the manufacturing capacity is domestic as is the labor which is a method of avoiding tariffs that host countries tend to favor. The calculus is different at that point and could only affect the imported parts or raw materials if applicable. In a pinch such manufacturing can be nationalized and repurposed.
- emptyfile 2y ago
  [dead]
seanmcdirmid 2y ago
Most countries don’t have enough domestic auto production to care enough not to buy cheap Chinese EVs. Most people don’t think about politics when they can buy a nice car for $20k.
- nyokodo 2y ago
  > Most countries don’t have enough domestic auto production to care Countries without domestic production are also not major consumer markets, and when aggregated into major trading blocks like the EU their most influential member states do have domestic production and a strong protectionist bent so I expect they’ll also be strong armed into a protectionist umbrella. It also makes sense for Europe as a whole to not have its domestic production product dumped into oblivion as globalization crumbles.
  - seanmcdirmid 2y ago
    That really isn’t true. Australia is a major consumer market, SEA has money to buy things even if they don’t make many cars outside of maybe Thailand. Ceding the car markets of just the non major countries is enough to create huge waves in the industry. The EU and the USA can lockdown its market with Japan, but that’s about it.
    - nyokodo 2y ago
      > Australia is a major consumer market Australia is more than nothing, but a country with 26 million people and about 1.2 million new car sales annually isn’t tipping the scales of the global market too much. They’re also geopolitically aligned with the USA so the medium to long term outlook is negative for China trade relations. > SEA has money to buy things even if they don’t make many cars outside of maybe Thailand Every region has money to buy things and their business isn’t worthless, but SEA isn’t a big consumer market yet and isn’t going to be making up for the loss of/reductions in the big consumer markets. There’s only so many sales that the region can absorb even if we don’t factor in the fact that the region is adjacent to and frequently the target of Chinese military belligerence recently and for centuries. There is increasing regional geopolitical alignment with the USA albeit at arms length.