this post was submitted on 03 Sep 2024
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China has positioned itself as the main car supplier in Mexico, with exports reaching $4.6 billion in 2023, according to data from Mexico's Secretariat of Economy.

The Chinese automaker BYD surpassed Honda and Nissan to position itself as the seventh largest automaker in the world by number of units sold during the April to June quarter. This growth was driven by increased demand for its affordable electric vehicles, according to data from automakers and research firm MarkLines.

The company's new vehicle sales rose 40 percent year over year to 980,000 units in the quarter—the same quarter wherein most major automakers, including Toyota and Volkswagen, experienced a decline in sales. Much of BYD's growth is attributed to its overseas sales, which nearly tripled in the past year to 105,000 units. Now BYD is considering locating its new auto plant in three Mexican states: Durango, Jalisco, and Nuevo Leon.

Foreign investment would be an economic boost for Mexico. The company has claimed that a plant there would create about 10,000 jobs. A Tesla competitor, BYD markets its Dolphin Mini model in Mexico for about 398,800 pesos—about $21,300 dollars—a little more than half the price of the cheapest Tesla model.

...

That tariff-free access is part of the US-Mexico-Canada Agreement (T-MEC), an updated version of the North American Free Trade Agreement that, as of 2018, eliminated tariffs on many products traded between the North American countries. Under the treaty, if a foreign automotive company that manufactures vehicles in Canada or Mexico can demonstrate that the materials used are locally sourced, its products can be exported to the United States virtually duty-free.

MAGA strikes again

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[–] [email protected] 27 points 2 months ago (14 children)

The main problem with BYD cars is that they are heavily subsidizing by the Chinese government.

If you remove those subsidies then those cars aren’t going to be very competitive. But the problem would be that by the time the Chinese government stopped subsidies, there wouldn’t be any competition left.

Our best ways to counteract this would either be through heavy tariffs or by subsidizing our own companies in the west.

MAGA wants to do the tariffs route which is basically a bandaid solution that would prevent the Chinese companies from owning the US market but it wouldn’t do anything outside of that. Plus it doesn’t solve is being competitive, it’s just covering its ears and “lalala”’ing the issue for later generations to deal with it. Which honestly, that tracks for basically their whole platform.

If you do the subsidies route though, we’d have to make sure we’re not just constantly lining Musk’s pockets but Tesla is the company has the biggest head start. And Musk is a PoS but the devil’s credit is that our EV market wouldn’t exist without Tesla.

IMO, we need to diversify our EV makers and help provide the capital to bootstrap it. And while that’s happening we need to not let cheap Chinese cars flood the market to undercut any chance we have. So basically we need a combination of both solutions.

[–] [email protected] 22 points 2 months ago (2 children)

Yeah anytime the US "subsidizes" something in the local auto market, GM alone eats it up in 5 seconds and pretends they did something with it. Sometimes Ford and Chrysler also get a share.

I'm pretty sure they already recently gave funding to GM for EVs which will go absolutely nowhere because all their major sales are from regular gasoline cars.

I was even hopeful of Ford's hybrid Fusion, but they killed that one too because money.

If they really want to make some serious competition, they should break up the oligopoly of car OEMs. But they never did and never will.

This exact scenario already played out with Japanese OEMs decades ago. They brought a superior product to the market, and instead of competing, they just lobbied congress to make a crap ton of stupid import laws to prevent Japanese cars from taking the market.

Then they had a weird era of those hybrid car brands where the big 3 made partnerships with Nissan, Toyota, etc for tech sharing because they couldn't even properly R&D for crap.

Then Nissan, Toyota, Honda, and Subaru opened plants inside the USA to bypass the import stuff, and here we are today.

The only difference this time is instead of what was generally perceived as an economic ally, the new kid on the block is the next enemy after Russia. And tbh not even a major threat type of enemy.

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

the new kid on the block is the next enemy after Russia

Wait, why is our largest trading partner our enemy, again?

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

Washington can't fathom not running their monopoly on every global market lol.

China is supposed to be a dirty 3rd world outsource nation, not a competitor. They should do as told instead of actually investing in their country's infrastructure /s.

[–] [email protected] 2 points 2 months ago

They should do as told instead of actually investing in their country’s infrastructure /s.

Oh fuck, its the trains, isn't it? We are their enemy because they built trains. Its the same reason we tanked Japan's economy in the 90s.

[–] [email protected] 2 points 2 months ago

not even a major threat type of enemy

Brother the American industry apocalypse after China invades Taiwan and TSMC is torched will make the economic impacts of the rona look like a tea party.

[–] [email protected] 15 points 2 months ago (1 children)

It’s not even the heavy subsidising, China makes the US look like it has strong employee rights and environmental regulations.

[–] [email protected] 4 points 2 months ago (1 children)

Ugh, that is true but no way should we compromise on that IMO

[–] Rekorse 0 points 2 months ago* (last edited 2 months ago) (1 children)

Unless china has some secret set of labor laws they follow, their labor laws are far more fair to the average worker.

The median wage for a Chinese worker is higher than the median for a us worker but the mean is the opposite, which implies the US has a huge wealth imbalance in comparison.

Edit to add a quote from the Wikipedia page on chinas environmental policy:

"Since the 2010s, the government has given greater attention to environmental protection through policy actions such as the signing of the Paris climate accord, the 13th Five-Year Plan and the 2015 Environmental Protection Law reform [7] From 2006 to 2017, sulphur dioxide levels in China were reduced by 70 percent,[8] and air pollution has decreased from 2013 to 2018[8] In 2017, investments in renewable energy amounted to US$279.8 billion worldwide, with China accounting for US$126.6 billion or 45% of the global investments.[9] China has since become the world's largest investor, producer and consumer of renewable energy worldwide, manufacturing state-of-the-art solar panels, wind turbines and hydroelectric energy facilities as well as becoming the world’s largest producer of electric cars and buses.[10] Its commitment to reducing its greenhouse gas emissions has been a major force in decreasing the global cost of wind and solar power, in turn helping the use of renewable energy to rise globally.[11]: 8 "

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

China bad right? Why though huh? An economic competitor doesnt make a country immoral or bad.

[–] [email protected] 8 points 2 months ago

One could argue that China's governmental subsidizing of the industry just shows the commitment they have to be a leader and dominant player in the future of transportation worldwide.

Does the American government have such aspirations? Does the American Auto industry have the vision and goal to adapt to a disrupted market?

In my opinion the arguments surrounding this topic come down to which country is going to work harder to play a leading role in the future.

China is making their bet, and the quality of Chinese EVs is increasing extremely rapidly. If they can so easily dominate the American Auto Market that tells us that the Americans have been sleeping at the wheel and need to make some tough choices about spending. We can curtail the onslaught through duties and various taxes and regulations but not indefinitely.

[–] Rekorse 8 points 2 months ago (29 children)

I would say that all tracks but american car companies are refusing to even attempt to make an affordable electric vehicle, so how can you say its just a gap in research that subsidies would fix.

Subsidies would be drained the same way the profits were, why wouldnt they. American car companies refuse to listen to demand, and this is what they get for it.

[–] [email protected] 3 points 2 months ago

If China wants to pay for my next car for me, I'm fine with that.

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[–] [email protected] 6 points 2 months ago

So you're saying that buying one means that the American working class is extracting value from the Chinese government? Sounds great to me.

[–] Teepo 4 points 2 months ago

The vast majority of those subsidies (rebates, sales tax exemption, government procurement of EVs) you linked don't seem like they would apply to exported vehicles. This suggests exports would indeed be very price competitive, wouldn't it?

[–] [email protected] 3 points 2 months ago* (last edited 2 months ago) (1 children)

by the time the Chinese government stopped subsidies, there wouldn’t be any competition left.

What? BMW EV surpassed Tesla sales in Europe for July. BMW, VW, AUDI, Skoda all have very attractive alternatives to Tesla, and Mercedes too, if you want higher quality and don't mind it's a bit more expensive.
So how do you figure there is no competition without China?
From Korea we Have Hyundai and KIA, and from USA there is Rivian and Ford.
Arguably the American competition is the weakest, but still it seems to me there is lots of competition, even without including Chinese cars.

[–] [email protected] 3 points 2 months ago (1 children)

BMW EV surpassed Tesla sales in Europe for July.

You sure about that?

So how do you figure there is no competition without China?

That’s not what I was saying. What I am saying is that if left unanswered, those cars would kill all of the current competitors over time and then after that we’d be at the mercy of whatever the Chinese car manufacturers would want to charge and we’d be unable to stop it.

[–] [email protected] 6 points 2 months ago* (last edited 2 months ago)

You sure about that?

Your numbers are June not July, there were dozens of articles about it like this one:
https://www.reuters.com/business/autos-transportation/bmw-overtakes-tesla-european-ev-sales-first-time-report-says-2024-08-22/
And this one:
https://electrek.co/2024/08/22/bmw-tops-tesla-ev-sales-first-time-gap-narrows-eu/
Although it seems to include PHEV it still makes the same claim. So I'm just going with what seems to be the standard.

That’s not what I was saying.

Sorry, I read it again, and I misunderstood, the beginning of your text implies the opposite. So it's a bit confusing the way you write it IMO.

[–] [email protected] 3 points 2 months ago (1 children)
[–] [email protected] 2 points 2 months ago

Ask Mitt Romney today and then ask him tomorrow to get both sides of the issue

[–] [email protected] 1 points 2 months ago

The main problem with BYD cars is that they are heavily subsidizing by the Chinese government.

Great, then every BYD car sold in the US helps bankrupt the Chinese state.

[–] [email protected] 0 points 2 months ago

She have done heavy subsidies for American cars back when those Jap cars where coming in. Our government has stopped working together for those kind of things. Also those GM and Toyota years were magical to a point https://www.amazon.com/Toyota-Way-Management-Principles-Manufacturer/dp/0071392319?dplnkId=90b285f7-23e8-4c51-83d1-6f3ddcd17984&nodl=1

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