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US/German manufacturers just do assembly, they don't manufacture parts, so they only need assembly plants. BYD is a vertically integrated manufacturer. They mak
by ChumpGPT 2y ago
US/German manufacturers just do assembly, they don't manufacture parts, so they only need assembly plants. BYD is a vertically integrated manufacturer. They make everything in-house which helps drive down costs. This huge footprint results in having all those different manufacturing lines under one roof. They depend on no one for finished parts, the only supply chain is raw materials.
- oldpersonintx 2y ago[dead]
- baybal2 2y ago[dead]
- saturn8601 2y agoPeople are waking up, and to be fair, Tesla really led the way in the US for the last few years because they had no choice(no one would take them seriously). The question is can the West turn the ship around before its too late?
- hnthrowaway0328 2y agoWhen Trump ups everything from China by 100% I guess US would be able to make something with profit?
- greenthrow 2y agoThat is not remotely how tariffs work.
- hnthrowaway0328 2y agoDoesn't a tariff drive up prices? (or at least intended for that)
- Dalewyn 2y agoTariffs are a surcharge on imports added and demanded by the government, paid by the people or entities importing. As an example, if an American buys a Chinese coffee maker priced at $100 and there is a 50% tariff, there is a $50 tariff that is paid by the importing American to the American government. The total cost to the importing American is $150. Now, if this price is equal to or higher than an American coffee maker then the importing American is incentivized to purchase the American coffee maker instead. As another example, if Tesla sells Model 3s for $50,000 and BYD comes in with a similar spec car priced at $25,000, then putting a 100% tariff on it will drive BYD's effective price up to $50,000 allowing Tesla to compete without undercutting or outright selling at a loss. Essentially, tariffs are a way to ensure that the pricing floor of the domestic market is not driven down unreasonably by international markets at the cost of the importers. EDIT: Fixed some math. :V
- zie 2y agoRight, the coffee maker company in China has some options: * Figures out how to make it even cheaper (unlikely) * Figure out how to avoid the tariff legally: Maybe move the manufacture or assembly to Mexico for the US market. * Claim the product is something else, just enough to avoid the tariff(i.e. claim it's a tea maker, not a coffee maker) * Stop selling in the US since they won't get any sales * etc. The middle options are the most likely: avoiding the tariff somehow. Companies do the middle two all the time to varying degrees to get around/avoid tariffs, import fees, etc, even US companies.
- XorNot 2y agoAlso the other issue: the first thing the American company does is ensure it sells coffee-makers for $149 and not a penny less. In fact depending on your tarriff regime, this can incentivize a bunch industries to actually raise prices if the new import cost is higher then they would currently sell at.
- Dalewyn 2y ago
- 8note 2y agoI doubt it. It's much easier to either launder or manufacture the goods in a third country, that benefits from most of the same incentives that made Chinese manufacturing go through the roof. Americans will be buying Chinese goods with "made in Vietnam" or "made in Mexico" stamped on it. The American profit will be in setting up those laundering schemes
- seanmcdirmid 2y agoIf the Trump tariffs are based on country of final assembly, then yes, final assembly will just occur somewhere else, but it will take a couple of years to setup, and the inflation shock by that time will have done a lot of damage to the economy (recession likely, depression possible). It makes sense that it took Trump forever to find a treasury secretary willing to go along with this.
- mrguyorama 2y agoThe last time he did tariffs against China, he put a tariff on raw materials but not stuff made with that raw material. It was cheaper to build your excavator outside the country than pay the tariffs on importing the materials to build the excavator here. It was an objective failure. It also resulted in very smartly targeted payback that caused serious financial distress to a bunch of blue collar American food producers who sell a lot to China because the American market is literally not big enough (my state sells millions of pounds of lobster to China, those lobstermen still vote for Trump). This is because Trump is objectively a fucking moron, and if you tell him "No, your idea is wrong because you don't know what you are talking about", he gives you the same "You're fired" speech from his damn television show, replaces you with a sycophant, and then does the stupid thing. Any prediction that starts with "Trump will do the Tariffs in the way that requires second order thinking" is doomed to failure.
- omeid2 2y agoCouple of years for a western enterprise maybe, but in the east, things move fast. Really fast.
- 2y ago
- csomar 2y agoVietnam and Mexico will massively profit.
- lm28469 2y agoIt doesn't matter much if your shitbox is made in US or made in China when it cost 50k and nobody has the money for it
- onlyrealcuzzo 2y agoWith what workers? Basically everyone is already employed.
- matthewdgreen 2y agoDepends if we keep the CHIPS act and the IRA. https://www.atlanticcouncil.org/blogs/econographics/the-ira-and-chips-act-are-supercharging-us-manufacturing-construction/ https://www.atlanticcouncil.org/blogs/econographics/the-ira-...
- energy123 2y agoAnd immigration. China will have severe demographic issues in 10-20 years, but the West doesn't have to because everyone wants to come here, and we still have a culture accepting of immigrants. This century we could have China's working age population halve while America's population grows to 500 million or more. America will win in this scenario, and China will fall off like Japan fell off.
- ysofunny 2y agotoo late for what?? too late relative to what?
- chii 2y agotoo late to dominate in the industry of electric vehicles and thus, control/own large % of the wealth generated.
- hnthrowaway0315 2y agoIMO the US really needs to do some house cleaning before anything real gets done. You can't expect the hand to cut itself out. I'm not sure if Trump could do that, TBH. He didn't have a lot of support in Military-Intelligence.
- rangestransform 2y agotoo many people on the entire political spectrum think that the government exists to create/artificially protect jobs instead of doing government things
- sbierwagen 2y agoNot entirely correct. Boeing, despite all the bad press, actually reversed course on this recently. 787's wing was made by a supplier, but 777X's wing is actually built in-house, right next to the main factory, starting from carbon fiber fabric.
- _DeadFred_ 2y agoHow much can Boeing do this though? My understanding is in the past they used moving some of their production to a country as leverage to win contracts. They are a company that moved their headquarters to DC because management treats the product as secondary as if they make widgets. Until they reverse that they aren't moving in the right direction.
- harrall 2y agoI believe outsourcing can be a symptom of not innovating anymore. Imagine having to contract out every prototype to a metal working shop — it slows down your ability to iterate because you can’t just go downstairs and try it. But once you have a design set in stone, outsourcing is cheaper than doing it in-house. These companies specialize in producing parts with economies of scale. But if you do it for too long, you kind of lose the ability to quickly iterate. Striking a balance is hard.
- mbesto 2y agoExcept when you've been working with suppliers who have already been iterating on <insert widget> for years in a competitive environment. The amount of innovation in the automobile industry is staggering when you think of its history more holistically.
- deleted 2y ago[deleted]
- Sponge5 2y ago> But once you have a design set in stone, outsourcing is cheaper than doing it in-house. These companies specialize in producing parts with economies of scale. Except you need to ship the parts to your factory and still employ QA people who must check whether you got what you paid for.. If the supplier has a bad defect ratio, you must order more parts. It's not as cut-and-dry as you think. Every time your assembly-line halts, you're paying people for twiddling their thumbs. The more external suppliers you have, the higher the risk.
- Lanolderen 2y agoDon't the fines for halting a line cover the cost of the halt for the manufacturer? I'm currently working at a supplier for some companies in mostly the automotive sector and the line halt fines per second seem to all be in the couple grand range so I always assumed it should be enough to cover the halt. Though the QA part is real. There's so much theatre in tricking clients into believing their QA measurements are wrong when something happens it's kinda funny.
- ssl-3 2y agoSo the factory accepts iron ore, crude oil, coal, lithium ore, bauxite, monazite, copper ores, rubber, and soy beans at one end and spits out finished cars at the other? They don't even outsource their nylon zip ties?
- billfor 2y agoJust like Ford used to do.
- _DeadFred_ 2y agoDon't forget USA auto companies also outsource their design work, CAD, etc. My understanding is that TATA used to have a whole floor at Chrysler.
- rkagerer 2y agothe only supply chain is raw materials Citation needed, this seems exaggerated. Eg. I'm sure they use IC's and I'd be very surprised if the facility includes a fab.
- TrackerFF 2y agoThey, BYD, have their own semiconductor R&D and manufacturing subsidiary called BYD semiconductor. EDIT: Seems like it is a division, so not a spin-off.
- SoftTalker 2y agoWasn’t always that way. Ford’s River Rouge plant took iron ore in one end, and rolled automobiles out the other end.