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BYD profit in EU is 10x higher than in China and even with new 30% tariffs, still makes 5,000 USD per vehicle, report says (carnewschina.com)

submitted 5 months ago by [email protected] to c/[email protected]

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cross-posted from: https://lemmy.ml/post/16821518

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[–] [email protected] 11 points 5 months ago (11 children)

The price difference between foreign and Chinese producers is because Chinese producers get more subsidies than foreign ones, even though both get support from the Chinese government. Also, Chinese companies are more vertically integrated, meaning they handle more parts of the production process themselves, which lets them buy things at lower prices than foreign companies.

For example, BYD not only makes cars but also owns lithium mines, builds its own batteries, develops its own e-motors, owns large ocean carriers for export, and even owns a vehicle insurance company.

This sounds like a model we should be emulating and adopting, but instead we are fighting to keep our existing model, that is less efficient and less effective at making affordable EVe available to the public, all because the Chinese model doesn't align with our ideology. I say, fuck ideology. We should do what works, even if it doesn't necessarily pass some ideological purity test.

[–] [email protected] 18 points 5 months ago (4 children)

Vertical integration has the potential to be more optimized for manufacturing, but you run into a few issues:

vendor lock in. Imagine if only Tesla owned the available mines, no other company could get materials for batteries and they’d have a lock on the market
having so many lines of business to manage, you can’t specialize in certain things unless you are a megacorp like Mitsubishi
high barrier to entry. Rather than starting with wanting to make a good car and sourcing the best parts you have to make everything from scratch

Most of those reasons come down to the fact that it stifles competition. Look at what happened with movie companies owning the distribution and playback and how it’s happening again with Streaming services.

[–] [email protected] 2 points 5 months ago (1 children)

I'm sure a more vertically integrated supply chain comes with its own problems. I don't think there's a perfect solution. Even if the current US model better promotes competition, that doesn't seem to be making EVs more affordable.

[–] Sethayy 1 points 5 months ago

Though entirely removed from the situation, one large thing tends to be more efficient than many small ones.

So back to our situation here, China's better figured out how to integrate this, allowing them to do more with less. Over a large enough timeline, this is all but a death sentence to america unless we can all stop acting like children for 5 minutes and work together.

This is why a superrich class is not only dangerous to an individual (ie food security), but to the country as a whole.

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