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That's actually a lower rate than for other Chinese manufacturers (who face upwards of 48%), because Tesla is manufacturing within the EU and working to incorpo

That's actually a lower rate than for other Chinese manufacturers (who face upwards of 48%), because Tesla is manufacturing within the EU and working to incorporate European manufactured components. The message is clear - if you want to sell in Europe, make sure to build in Europe. Down the grapevine, plenty of European components manufacturers are expanding domestic capacity in intermediate parts like Analog Circuits, Power Electronics, Battery Manufacturing, etc over the next decade. Ik for a fact that Infineon is massively expanding their Austria fab at the expense of their Chinese operation.

toomuchtodo 2y ago
The issue is that EVs require less humans to manufacture, both for battery cells, packs, and the chassis assembly. The protectionism is understandable, but the job quantities are going to decline regardless (unless very intentional efforts are made to shuffle labor around from legacy industries to the energy transition) vs internal combustion supply chains. There is a lot of work left, but labor is not fungible and a race to the bottom is not something to optimize for.
- x0x0 2y ago
  Regardless of the employment counts, it's smart policy to require domestic manufacturing capability, both knowledge, personnel, and equipment; given world events in Russia and China pulling away from the west.
  - toomuchtodo 2y ago
    Strong agree. A resilient supply chain is a national security issue. The US is learning this the hard way, which is arguably the best way. Makes the lesson stick.
    - lancesells 2y ago
      I would think it's probably better for a cleaner planet as well. Possibly better regulation on keeping it clean, plus the ocean has less polluting ships running through it. This doesn't apply to 100% of industry but I would think in a lot of cases it would be better. It also doesn't cause a loss of convenience for consumers.
- alephnerd 2y ago
  > EVs require less humans to manufacture Absolutely, and I've pointed this out a bunch as well. Yet why should host country accept foreign imports that are subsidized? Either put CapEx in the host country (and this stimulate the broader economy) or don't participate. The jobs aspect is rhetoric, but the real issue is CapEx and taxation. South Korean, Japanese, and Western manufacturers have gladly built domestic manufacturing capabilities in host countries, and even become critical players in those countries (eg. Honda, Toyota, VW, Hyundai in America; Suzuki and Hyundai in India; Ford and Tesla across the EU). Why should Chinese companies get a pass? This is why Geely (via Volvo and Polestar) and now BYD have been investing in European capacity, and this is why most countries are now forcing Chinese companies to transfer IP to domestic players (just like China did 20 years ago).
- blackeyeblitzar 2y ago
  Exactly. This is the fundamental problem with Europe. I would understand the protectionism if it were part of a geopolitical strategy to weaken China, whose government is not aligned with European values. Or maybe as a way to bolster national security with local manufacturing. But if it is for economic or labor reasons, this is at best a short-term strategy to appease voters that doesn’t fix the underlying issue, which is that Europe lags in innovation. Fixing that is hard, and I don’t think governments that chase votes for election with populist strategies can also have the right policies to fix the underlying issues.
  - alephnerd 2y ago
    > Or maybe as a way to bolster national security with local manufacturing It is this. The push for EV and Battery Tech tariffs are part of the EU's Net Zero Act [0] which itself is a reaction to America's IRA [1]. The EU (especially Germany) still remembers how the German PV fabrication industry collapsed due to Chinese subsidizes [2][3]. [0] - https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/european-green-deal/green-deal-industrial-plan/net-zero-industry-act_en https://commission.europa.eu/strategy-and-policy/priorities-... [1] - https://home.cib.natixis.com/articles/european-net-zero-industry-act-an-effective-response-to-the-us-ira https://home.cib.natixis.com/articles/european-net-zero-indu... [2] - https://www.bruegel.org/blog-post/protectionist-dog-didnt-bark https://www.bruegel.org/blog-post/protectionist-dog-didnt-ba... [3] - https://www.reuters.com/business/energy/germany-mulls-options-protect-domestic-solar-manufactures-price-dumping-document-2023-09-28/ https://www.reuters.com/business/energy/germany-mulls-option...
Log_out_ 2y ago
xi is in every row in every risks column of every investment ledger from SF to mumbai.
- alephnerd 2y ago
  Not exactly. It's an issue of misaligned incentives - the Standing Committee sets some high level KPI, and every functionary tries to hit that KPI. This leads to a tragedy of the commons, which is further exacerbated by how devolved China has become since the 1970s, because now individual provinces are heavily invested in companies directly competing with each other, but cannot downscale or shut them down because laying off thousands of employees at SoEs is politically untenable. Everything from overproduction to over-compliance of COVID Zero policies to BRI can be attributed to misaligned incentives between top level policymakers, mid-level decisionmakers, and businesses.

toomuchtodo 2y ago

The issue is that EVs require less humans to manufacture, both for battery cells, packs, and the chassis assembly. The protectionism is understandable, but the job quantities are going to decline regardless (unless very intentional efforts are made to shuffle labor around from legacy industries to the energy transition) vs internal combustion supply chains. There is a lot of work left, but labor is not fungible and a race to the bottom is not something to optimize for.

x0x0 2y ago
Regardless of the employment counts, it's smart policy to require domestic manufacturing capability, both knowledge, personnel, and equipment; given world events in Russia and China pulling away from the west.
- toomuchtodo 2y ago
  Strong agree. A resilient supply chain is a national security issue. The US is learning this the hard way, which is arguably the best way. Makes the lesson stick.
  - lancesells 2y ago
    I would think it's probably better for a cleaner planet as well. Possibly better regulation on keeping it clean, plus the ocean has less polluting ships running through it. This doesn't apply to 100% of industry but I would think in a lot of cases it would be better. It also doesn't cause a loss of convenience for consumers.
alephnerd 2y ago
> EVs require less humans to manufacture Absolutely, and I've pointed this out a bunch as well. Yet why should host country accept foreign imports that are subsidized? Either put CapEx in the host country (and this stimulate the broader economy) or don't participate. The jobs aspect is rhetoric, but the real issue is CapEx and taxation. South Korean, Japanese, and Western manufacturers have gladly built domestic manufacturing capabilities in host countries, and even become critical players in those countries (eg. Honda, Toyota, VW, Hyundai in America; Suzuki and Hyundai in India; Ford and Tesla across the EU). Why should Chinese companies get a pass? This is why Geely (via Volvo and Polestar) and now BYD have been investing in European capacity, and this is why most countries are now forcing Chinese companies to transfer IP to domestic players (just like China did 20 years ago).
blackeyeblitzar 2y ago
Exactly. This is the fundamental problem with Europe. I would understand the protectionism if it were part of a geopolitical strategy to weaken China, whose government is not aligned with European values. Or maybe as a way to bolster national security with local manufacturing. But if it is for economic or labor reasons, this is at best a short-term strategy to appease voters that doesn’t fix the underlying issue, which is that Europe lags in innovation. Fixing that is hard, and I don’t think governments that chase votes for election with populist strategies can also have the right policies to fix the underlying issues.
- alephnerd 2y ago
  > Or maybe as a way to bolster national security with local manufacturing It is this. The push for EV and Battery Tech tariffs are part of the EU's Net Zero Act [0] which itself is a reaction to America's IRA [1]. The EU (especially Germany) still remembers how the German PV fabrication industry collapsed due to Chinese subsidizes [2][3]. [0] - https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/european-green-deal/green-deal-industrial-plan/net-zero-industry-act_en https://commission.europa.eu/strategy-and-policy/priorities-... [1] - https://home.cib.natixis.com/articles/european-net-zero-industry-act-an-effective-response-to-the-us-ira https://home.cib.natixis.com/articles/european-net-zero-indu... [2] - https://www.bruegel.org/blog-post/protectionist-dog-didnt-bark https://www.bruegel.org/blog-post/protectionist-dog-didnt-ba... [3] - https://www.reuters.com/business/energy/germany-mulls-options-protect-domestic-solar-manufactures-price-dumping-document-2023-09-28/ https://www.reuters.com/business/energy/germany-mulls-option...

Log_out_ 2y ago

xi is in every row in every risks column of every investment ledger from SF to mumbai.

alephnerd 2y ago
Not exactly. It's an issue of misaligned incentives - the Standing Committee sets some high level KPI, and every functionary tries to hit that KPI. This leads to a tragedy of the commons, which is further exacerbated by how devolved China has become since the 1970s, because now individual provinces are heavily invested in companies directly competing with each other, but cannot downscale or shut them down because laying off thousands of employees at SoEs is politically untenable. Everything from overproduction to over-compliance of COVID Zero policies to BRI can be attributed to misaligned incentives between top level policymakers, mid-level decisionmakers, and businesses.