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Labor is like 8% of the price of a car. That's not the difference between 25k and 65k. While China does have an advantage over northern states in labor prices

Labor is like 8% of the price of a car. That's not the difference between 25k and 65k. While China does have an advantage over northern states in labor prices it's not why it's so cheap.

missedthecue 1y ago
That 8% is only if you include the labor costs of final assembly at the GM plant. But their inputs also were built by labor. GM buys turbochargers not out of thin air, but from Garrett Motion inc., in Plymouth Michigan, who also has sizeable labor costs. Repeat not just for turbochargers, but for the rest of GM's input supply line. If you include only their direct suppliers, the cost of a new car that goes to human wages is about 30-40%. Chinese turbocharger suppliers have lower labor costs and therefore BYD, Changan, Great Wall and others have more pricing power vs GM and Ford products.
- fragmede 1y ago
  Is BYD using turbochargers in their electric cars?
  - ponector 1y ago
    Your comment would be funny if not only half of BYD vehicles are fully electric.
  - missedthecue 1y ago
    Yes, their song, tang, han, and shark models are all turbocharged. But my broader point is that their entire supply chain is comprised of lower labor cost inputs. Whether it be the EV batteries, the windshield, or the air valve in each of the four tires.
    - seanmcdirmid 1y ago
      > Yes, their song, tang, han, and shark models are all turbocharged. Pretty sure that only applies to the ICE versions of those cars and not the purely electric ones.
      - missedthecue 1y ago
        ...naturally
Yeul 1y ago
Maybe Americans could build cars that people living in Asia actually want? Hint someone in Jakarta doesn't want a 40k pick-up truck. Tangentially related China is located in the region with largest economic growth. Power is shifting from Europe and North America.
- wkat4242 1y ago
  > Maybe Americans could build cars that people living in Asia actually want? Hint someone in Jakarta doesn't want a 40k pick-up truck. You'd be surprised. One of the things that really raised my eyebrows in Thailand was slum shacks with a gleaming new muscle pickup parked beside it. For some reason these are really popular and people spend an inordinate amount of income on them.

Labor is like 8% of the price of a car. That's not the difference between 25k and 65k. While China does have an advantage over northern states in labor prices it's not why it's so cheap.

missedthecue 1y ago

That 8% is only if you include the labor costs of final assembly at the GM plant. But their inputs also were built by labor. GM buys turbochargers not out of thin air, but from Garrett Motion inc., in Plymouth Michigan, who also has sizeable labor costs. Repeat not just for turbochargers, but for the rest of GM's input supply line. If you include only their direct suppliers, the cost of a new car that goes to human wages is about 30-40%. Chinese turbocharger suppliers have lower labor costs and therefore BYD, Changan, Great Wall and others have more pricing power vs GM and Ford products.

fragmede 1y ago
Is BYD using turbochargers in their electric cars?
- ponector 1y ago
  Your comment would be funny if not only half of BYD vehicles are fully electric.
- missedthecue 1y ago
  Yes, their song, tang, han, and shark models are all turbocharged. But my broader point is that their entire supply chain is comprised of lower labor cost inputs. Whether it be the EV batteries, the windshield, or the air valve in each of the four tires.
  - seanmcdirmid 1y ago
    > Yes, their song, tang, han, and shark models are all turbocharged. Pretty sure that only applies to the ICE versions of those cars and not the purely electric ones.
    - missedthecue 1y ago
      ...naturally

Yeul 1y ago

Maybe Americans could build cars that people living in Asia actually want? Hint someone in Jakarta doesn't want a 40k pick-up truck. Tangentially related China is located in the region with largest economic growth. Power is shifting from Europe and North America.

wkat4242 1y ago
> Maybe Americans could build cars that people living in Asia actually want? Hint someone in Jakarta doesn't want a 40k pick-up truck. You'd be surprised. One of the things that really raised my eyebrows in Thailand was slum shacks with a gleaming new muscle pickup parked beside it. For some reason these are really popular and people spend an inordinate amount of income on them.