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So let’s play this out. Say China floods the US market and the US players go out of business as you suggest. What then happens to the US’s industrial base? What

So let’s play this out. Say China floods the US market and the US players go out of business as you suggest. What then happens to the US’s industrial base? What happens if there’s a major war (maybe even against china!) and no car factories to retool? You think a new crop of auto companies come up and then are able to compete against lower wage workers combined with gov financing?

torginus 2y ago
Why would China flood the US market? Their advantage is that they can make stuff cheaper. The USA is the wealthiest country in the world, and has one of the highest median selling prices for new cars. I don't think an $10-$15k basic small car would be a bestseller there. If you are implying that the Chinese can make cars that can satisfy the upmarket needs of US consumers, and do it significantly cheaper, then that implies the US automakers are gouging their customers or are simply incompetent. In both cases, protecting them amounts to putting shareholder interest before the interest of the common people.
- Dalewyn 2y ago
  >Why would China flood the US market? To kill off American industries. A lot of what China does makes sense when you consider that their goal is not to make a financial profit, at least not in the near-term. No, their real goal is to go in and replace the local industries with their own; choking them out with Chinese goods so cheap yet still good enough that competition is impossible. The end result is the locals end up relying on China for industrial production, research and development, at which point China just won a war without firing a single shot. Look at what happened with solar panels, lithium batteries, and indeed EVs. Most if not all industrial bases outside China were destroyed and replaced thanks to a flooding of Chinese goods. The red ink is no doubt immense, but the payout in sheer geopolitical power far exceeds it. The Rust Belt and the collapse of American steel manufacturing is another example. Cheap steel from China and elsewhere led to the collapse of American steel, and we're now looking at it getting bought out by foreign interests (fortunately Japan rather than China, but the damage to American ego is beyond critical mass) as the final nail in the coffin.
  - torginus 2y ago
    You misunderstand me. The battle is not between US and China, it's between US companies, who want large profit margins and US consumers who want cheap, well made stuff. Just look at BYD's palette - their $10k EV, is a tiny car, and would probably not sell well in the US despite the price because US consumers don't buy cars this small, except maybe as a novelty. (Besides, tiny, cheap cars always face a stiff competition from barely used models available at the same price) Moving up, you have the Dolphin, a mid 20k compact car, it's affordable and good. There was a mid 20k compact car made by an US company - the Bolt. It was also affordable and good. Guess what - GM discontinued it, citing low profit margins. And they won't make another one. It's next-gen EV platform is decidedly aimed at a higher segment with a bigger profit margin. Higher still, you have the Seal, BYD's Model 3 competitor. First, it's no longer cheap, and that segment of EVs is the most crowded. Second, it's nice, but I don't think it comes together quite as well as a Tesla. What it does have on Tesla is build quality (which is Tesla's weak point), with most people expressing interest in it being the ones who are fed up with Tesla's shitty manufacturing and service. Based on all this, I don't think China could take the US market to itself, even if free competition would be allowed. This whole thing is about political posturing and enabling continued shitty behavior from US manufacturers. And if you'd accuse me of being some China shill, personally, I wouldn't buy a Chinese EV, not until they have a proven track record, and service network.
aagha 2y ago
> and no car factories to retool Retool what? Just because GM was able to switch from cars to tanks for WW2 doesn't mean they could do it now if they had to.
simonbarker87 2y ago
This is the bit everyone misses. It’s not about protecting a backwards US or EU etc automotive OEM. It’s about stopping a government backed business models from Chinese companies wiping out the rest of the world’s auto makers in a way those companies simply can’t compete with … and then jacking up pricing in a couple of decades.
- MattGaiser 2y ago
  Their business model is still doomed if they cannot technologically compete. American automakers have repeatedly demonstrated their inability to keep up with anyone on technology and innovation.
  - i80and 2y ago
    I think this is half true. The innovation is there: GM's old Voltec hybrid drivetrain and the new Ultium EV platform are really quite good. The issue is in getting the technology into the marketplace: between advertising, product positioning, dealerships, and consumer demand, that's where things fall apart.
  - simonbarker87 2y ago
    The issue with US auto isn’t the design and manufacturing part - it’s the date route to market and sales process.
- avidphantasm 2y ago
  If gov’t backed companies out compete “free market” companies, why are we saddling ourselves with an inefficient economic model? Capitalism is nice for capitalists and all, but it’s not without its problems. Setting aside its tendency to generate dangerous levels of inequality (which is a real problem we are basically ignoring), capitalism is kind of dumb or a least limited in its ability to integrate and act on information in a timely manner (see boom-bust cycles). It seems to me that given the massive advances in information sensing, storage, and processing capabilities of the last six decades, we would be better off with more central planning. This of course still requires political work to ensure just and equitable distribution of goods and services as well as protection of livelihoods, but we should be doing more of these anyway.
lxm 2y ago
Substitute "china" for "japan" and roll back the clock a few decades. Even though Toyota, Nissan and Honda are top-selling brands, Detroit spiffed up its quality controls, and a bunch of those manufacturers set up factories in the US anyways.
- rangestransform 2y ago
  for better or for worse, japan is a geopolitical puppet of the US, where as china is big and powerful enough to be uncontrollable now
  - Krasnol 2y ago
    Japan is working together with BYD and they profit from that in the EV sector. They won't go down with the US on that. https://www.bydeurope.com/article/303 https://www.bydeurope.com/article/303 https://insideevs.com/news/696789/toyota-byd-ev-partnership-manufacturing-interview/ https://insideevs.com/news/696789/toyota-byd-ev-partnership-...
  - skipants 2y ago
    As a Canadian, I agree with the premise that I'd rather see Japan gain power over China due to how they wield that power; but man, you have quite a pessimistic view when it comes to describing US allies. Also, if Japan truly was a US puppet, would they be "allowed" to have a auto industry at all?
    - s1artibartfast 2y ago
      Sure. whats the point of a puppet if you dont use it or interact with it?
    - rangestransform 2y ago
      > man, you have quite a pessimistic view when it comes to describing US allies. I certainly think it's better than having an morals-based view of geopolitics, and either - believing in the moralistic post-hoc justifications for geopolitical actions like invading Iraq - wanting to unilaterally cede resources or control to geopolitical adversaries or the global south
brianSP 2y ago
I haven't seen a US made car in ages in my country, US cars are too big and unsafe. They all are European or Japanese.
AnotherGoodName 2y ago
Not great but let's play the other side out. Third party countries such as Australia already have over 80% of the EV market dominated by Chinese made vehicles. If the US closes it's borders to imports it'll retain a market only fit for domestic consumption. It's cars will not be competitive internationally. The only real way out is for the US to find a way to remain competitive full stop. Isolationism or just allowing foreign imports to dominate should not be options either way.
- chaostheory 2y ago
  China’s domestic market has bordered on isolation for decades now. It’s what protected their companies from competition. They can’t expect to freely export without reciprocating. I’m surprised that the trade wars didn’t happen sooner.
  - DiogenesKynikos 2y ago
    > China’s domestic market has bordered on isolation for decades now. Imports of goods and services into China [0]: * in 1990: 38.46 billion USD * in 2022: 3.14 trillion USD That comes to nearly 15% annual growth in imports every year for 32 years. That is not what an "isolated" market looks like. 0. https://data.worldbank.org/indicator/NE.IMP.GNFS.CD?locations=CN https://data.worldbank.org/indicator/NE.IMP.GNFS.CD?location...
  - asadotzler 2y ago
    Bullshit. Tesla, a US company, has been the leader in Chinese EVs until very recently.
    - torginus 2y ago
      Honestly, I think EVs are oversize RC cars. Their drivetrains are commodity tech. The Model 3's battery and overall drivetrain efficiency has improved by like 7-8% since its inception in 2017. Tesla really nailed EVs the first time around, but they never had much of a technological moat besides fantastic promises.
    - 2y ago
resters 2y ago
> Say China floods the US market You mean if China produces vehicles that offer tremendous value and consumers love them? Lots of happy consumers who can spend money on other things they want. > and the US players go out of business US automakers have been bailed out several times now and have been insulated from competitive pressures. It is inevitable that several of them will go out of business. This is not a bad thing. The valuable bits will be snapped up by other firms. (pension obligations will be another story). [^1][^2] > What happens if there’s a major war... Healthy trade between the US and China dramatically reduces the chances of a major war. China is not run by an irrational child, its policy is influenced by wealthy business owners and its large capitalist class. Those people do not want to go to war with their best customers. [^3][^4] (Warmongering over China is coming strictly from US hawks who are attracted to the narrative to distract attention from tough times at home.) > You think a new crop of auto companies come up and then are able to compete against lower wage workers combined with gov financing? The US auto industry has been significantly bailed out several times. US auto industry workers are heavily subsidized by US government policies. [^5][^6][^7] --- [^1]: https://www.history.com/topics/21st-century/auto-bailout https://www.history.com/topics/21st-century/auto-bailout [^2]: https://www.thebalance.com/auto-industry-bailout-gm-ford-chrysler-3305670 https://www.thebalance.com/auto-industry-bailout-gm-ford-chr... [^3]: https://www.piie.com/blogs/realtime-economic-issues-watch/trade-wars-not-easy-win https://www.piie.com/blogs/realtime-economic-issues-watch/tr... [^4]: https://www.cfr.org/blog/how-trade-can-reduce-conflict https://www.cfr.org/blog/how-trade-can-reduce-conflict [^5]: https://hbr.org/2019/06/how-china-wins https://hbr.org/2019/06/how-china-wins [^6]: https://thediplomat.com/2020/12/chinas-capitalist-classes-the-uneasy-relationship-between-business-and-state/ https://thediplomat.com/2020/12/chinas-capitalist-classes-th... [^7]: https://www.investopedia.com/terms/b/bailout.asp https://www.investopedia.com/terms/b/bailout.asp
- chaostheory 2y ago
  Ah yes, “US hawks” were the ones who came up with the nine dash line that threatens global trade and global peace. /s
  - resters 2y ago
Dalewyn 2y ago
Easy answer: The US loses and loses bigly. The brutal fact of the matter is if the US needs to blockade Chinese cars lest the US automotive industry completely collapses on itself, the US has already lost. There is nothing worth protecting at that point; an industry that can't make first rate products can't create instruments of war that can win. If we wanted Pax Americana to last, shit needed to change at least a few decades ago. Anyone who was paying attention to EV development would have foreseen China dominating the field.

torginus 2y ago

Why would China flood the US market? Their advantage is that they can make stuff cheaper. The USA is the wealthiest country in the world, and has one of the highest median selling prices for new cars. I don't think an $10-$15k basic small car would be a bestseller there. If you are implying that the Chinese can make cars that can satisfy the upmarket needs of US consumers, and do it significantly cheaper, then that implies the US automakers are gouging their customers or are simply incompetent. In both cases, protecting them amounts to putting shareholder interest before the interest of the common people.

Dalewyn 2y ago
>Why would China flood the US market? To kill off American industries. A lot of what China does makes sense when you consider that their goal is not to make a financial profit, at least not in the near-term. No, their real goal is to go in and replace the local industries with their own; choking them out with Chinese goods so cheap yet still good enough that competition is impossible. The end result is the locals end up relying on China for industrial production, research and development, at which point China just won a war without firing a single shot. Look at what happened with solar panels, lithium batteries, and indeed EVs. Most if not all industrial bases outside China were destroyed and replaced thanks to a flooding of Chinese goods. The red ink is no doubt immense, but the payout in sheer geopolitical power far exceeds it. The Rust Belt and the collapse of American steel manufacturing is another example. Cheap steel from China and elsewhere led to the collapse of American steel, and we're now looking at it getting bought out by foreign interests (fortunately Japan rather than China, but the damage to American ego is beyond critical mass) as the final nail in the coffin.
- torginus 2y ago
  You misunderstand me. The battle is not between US and China, it's between US companies, who want large profit margins and US consumers who want cheap, well made stuff. Just look at BYD's palette - their $10k EV, is a tiny car, and would probably not sell well in the US despite the price because US consumers don't buy cars this small, except maybe as a novelty. (Besides, tiny, cheap cars always face a stiff competition from barely used models available at the same price) Moving up, you have the Dolphin, a mid 20k compact car, it's affordable and good. There was a mid 20k compact car made by an US company - the Bolt. It was also affordable and good. Guess what - GM discontinued it, citing low profit margins. And they won't make another one. It's next-gen EV platform is decidedly aimed at a higher segment with a bigger profit margin. Higher still, you have the Seal, BYD's Model 3 competitor. First, it's no longer cheap, and that segment of EVs is the most crowded. Second, it's nice, but I don't think it comes together quite as well as a Tesla. What it does have on Tesla is build quality (which is Tesla's weak point), with most people expressing interest in it being the ones who are fed up with Tesla's shitty manufacturing and service. Based on all this, I don't think China could take the US market to itself, even if free competition would be allowed. This whole thing is about political posturing and enabling continued shitty behavior from US manufacturers. And if you'd accuse me of being some China shill, personally, I wouldn't buy a Chinese EV, not until they have a proven track record, and service network.

aagha 2y ago

> and no car factories to retool Retool what? Just because GM was able to switch from cars to tanks for WW2 doesn't mean they could do it now if they had to.

simonbarker87 2y ago

This is the bit everyone misses. It’s not about protecting a backwards US or EU etc automotive OEM. It’s about stopping a government backed business models from Chinese companies wiping out the rest of the world’s auto makers in a way those companies simply can’t compete with … and then jacking up pricing in a couple of decades.

MattGaiser 2y ago
Their business model is still doomed if they cannot technologically compete. American automakers have repeatedly demonstrated their inability to keep up with anyone on technology and innovation.
- i80and 2y ago
  I think this is half true. The innovation is there: GM's old Voltec hybrid drivetrain and the new Ultium EV platform are really quite good. The issue is in getting the technology into the marketplace: between advertising, product positioning, dealerships, and consumer demand, that's where things fall apart.
- simonbarker87 2y ago
  The issue with US auto isn’t the design and manufacturing part - it’s the date route to market and sales process.
avidphantasm 2y ago
If gov’t backed companies out compete “free market” companies, why are we saddling ourselves with an inefficient economic model? Capitalism is nice for capitalists and all, but it’s not without its problems. Setting aside its tendency to generate dangerous levels of inequality (which is a real problem we are basically ignoring), capitalism is kind of dumb or a least limited in its ability to integrate and act on information in a timely manner (see boom-bust cycles). It seems to me that given the massive advances in information sensing, storage, and processing capabilities of the last six decades, we would be better off with more central planning. This of course still requires political work to ensure just and equitable distribution of goods and services as well as protection of livelihoods, but we should be doing more of these anyway.

lxm 2y ago

Substitute "china" for "japan" and roll back the clock a few decades. Even though Toyota, Nissan and Honda are top-selling brands, Detroit spiffed up its quality controls, and a bunch of those manufacturers set up factories in the US anyways.

rangestransform 2y ago
for better or for worse, japan is a geopolitical puppet of the US, where as china is big and powerful enough to be uncontrollable now
- Krasnol 2y ago
  Japan is working together with BYD and they profit from that in the EV sector. They won't go down with the US on that. https://www.bydeurope.com/article/303 https://www.bydeurope.com/article/303 https://insideevs.com/news/696789/toyota-byd-ev-partnership-manufacturing-interview/ https://insideevs.com/news/696789/toyota-byd-ev-partnership-...
- skipants 2y ago
  As a Canadian, I agree with the premise that I'd rather see Japan gain power over China due to how they wield that power; but man, you have quite a pessimistic view when it comes to describing US allies. Also, if Japan truly was a US puppet, would they be "allowed" to have a auto industry at all?
  - s1artibartfast 2y ago
    Sure. whats the point of a puppet if you dont use it or interact with it?
  - rangestransform 2y ago
    > man, you have quite a pessimistic view when it comes to describing US allies. I certainly think it's better than having an morals-based view of geopolitics, and either - believing in the moralistic post-hoc justifications for geopolitical actions like invading Iraq - wanting to unilaterally cede resources or control to geopolitical adversaries or the global south

brianSP 2y ago

I haven't seen a US made car in ages in my country, US cars are too big and unsafe. They all are European or Japanese.

AnotherGoodName 2y ago

Not great but let's play the other side out. Third party countries such as Australia already have over 80% of the EV market dominated by Chinese made vehicles. If the US closes it's borders to imports it'll retain a market only fit for domestic consumption. It's cars will not be competitive internationally. The only real way out is for the US to find a way to remain competitive full stop. Isolationism or just allowing foreign imports to dominate should not be options either way.

chaostheory 2y ago
China’s domestic market has bordered on isolation for decades now. It’s what protected their companies from competition. They can’t expect to freely export without reciprocating. I’m surprised that the trade wars didn’t happen sooner.
- DiogenesKynikos 2y ago
  > China’s domestic market has bordered on isolation for decades now. Imports of goods and services into China [0]: * in 1990: 38.46 billion USD * in 2022: 3.14 trillion USD That comes to nearly 15% annual growth in imports every year for 32 years. That is not what an "isolated" market looks like. 0. https://data.worldbank.org/indicator/NE.IMP.GNFS.CD?locations=CN https://data.worldbank.org/indicator/NE.IMP.GNFS.CD?location...
- asadotzler 2y ago
  Bullshit. Tesla, a US company, has been the leader in Chinese EVs until very recently.
  - torginus 2y ago
    Honestly, I think EVs are oversize RC cars. Their drivetrains are commodity tech. The Model 3's battery and overall drivetrain efficiency has improved by like 7-8% since its inception in 2017. Tesla really nailed EVs the first time around, but they never had much of a technological moat besides fantastic promises.
  - 2y ago

resters 2y ago

> Say China floods the US market You mean if China produces vehicles that offer tremendous value and consumers love them? Lots of happy consumers who can spend money on other things they want. > and the US players go out of business US automakers have been bailed out several times now and have been insulated from competitive pressures. It is inevitable that several of them will go out of business. This is not a bad thing. The valuable bits will be snapped up by other firms. (pension obligations will be another story). [^1][^2] > What happens if there’s a major war... Healthy trade between the US and China dramatically reduces the chances of a major war. China is not run by an irrational child, its policy is influenced by wealthy business owners and its large capitalist class. Those people do not want to go to war with their best customers. [^3][^4] (Warmongering over China is coming strictly from US hawks who are attracted to the narrative to distract attention from tough times at home.) > You think a new crop of auto companies come up and then are able to compete against lower wage workers combined with gov financing? The US auto industry has been significantly bailed out several times. US auto industry workers are heavily subsidized by US government policies. [^5][^6][^7] --- [^1]: https://www.history.com/topics/21st-century/auto-bailout https://www.history.com/topics/21st-century/auto-bailout [^2]: https://www.thebalance.com/auto-industry-bailout-gm-ford-chrysler-3305670 https://www.thebalance.com/auto-industry-bailout-gm-ford-chr... [^3]: https://www.piie.com/blogs/realtime-economic-issues-watch/trade-wars-not-easy-win https://www.piie.com/blogs/realtime-economic-issues-watch/tr... [^4]: https://www.cfr.org/blog/how-trade-can-reduce-conflict https://www.cfr.org/blog/how-trade-can-reduce-conflict [^5]: https://hbr.org/2019/06/how-china-wins https://hbr.org/2019/06/how-china-wins [^6]: https://thediplomat.com/2020/12/chinas-capitalist-classes-the-uneasy-relationship-between-business-and-state/ https://thediplomat.com/2020/12/chinas-capitalist-classes-th... [^7]: https://www.investopedia.com/terms/b/bailout.asp https://www.investopedia.com/terms/b/bailout.asp

chaostheory 2y ago
Ah yes, “US hawks” were the ones who came up with the nine dash line that threatens global trade and global peace. /s
- resters 2y ago

Dalewyn 2y ago

Easy answer: The US loses and loses bigly. The brutal fact of the matter is if the US needs to blockade Chinese cars lest the US automotive industry completely collapses on itself, the US has already lost. There is nothing worth protecting at that point; an industry that can't make first rate products can't create instruments of war that can win. If we wanted Pax Americana to last, shit needed to change at least a few decades ago. Anyone who was paying attention to EV development would have foreseen China dominating the field.