this post was submitted on 17 Sep 2024
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[Dormant] Electric Vehicles

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Even with the new 100% tariff on electric vehicles imported from China, BYD would still have the cheapest EV in the US. According to a new report, BYD’s lowest-priced EV would still undercut all US automakers at under $25,000.

After discontinuing the production of vehicles powered entirely by internal combustion engines in March 2022, BYD has been at the forefront of the industry’s shift to EVs.

Honestly in my opinion it is time to remove all tariffs on EVs under 25k and let anyone who wants to fill that slot in. American car manufacturers refuse to fill the market need.

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[–] Habahnow 24 points 3 months ago (3 children)

??? China has literally been subsidizing BYD to help it to beat out foreign manufactures and to make it competitive in foreign markets. So yeah, there may be some protectionism involved, but there is definitely an argument that China is unfairly subsidizing BYD, making it impossible for rival companies to compete.

https://electrek.co/2024/04/12/china-gave-byd-an-incredible-3-7-billion-to-win-the-ev-race/

[–] [email protected] 14 points 3 months ago (1 children)

And we've been subsidizing ours too. We just do it differently than straight up handing them money. (Although we've done that before too)

[–] Habahnow 4 points 3 months ago (1 children)

The main issue is that China seems to subsidize BYD quite a bit more than other countries do. In addition, this seems to match China's general policy of finding ways to give its own companies advantages in foreign markets, while limiting the equivalent from other countries

[–] [email protected] 8 points 3 months ago (3 children)

Yes, yes, yes.

But why does the West, which has been technologically ahead the entire time, can't produce a cheap simple EV?

Like sure, China is propping up their shit maybe more than the West is, but why can't we get one small inexpensive simple car?

[–] Habahnow -4 points 3 months ago (1 children)

I mean the tech is still new as well as the point that SSJMarx mentioned. To add to the list of reasons to make expensive version of cars first:

  • New tech is more expensive usually
  • Not everyone has the budget to openly spend 20K plus on a new vehicle, which means lower demand
  • Since not everyone will just buy a new car, companies need to make as much money per unit sold which means luxury cars make more sense
  • additionally lowering demand is the fact that not everyone wants an EV or feels comfortable driving them (due to its different fueling method)

I do expect that over time manufactures will begin to release cheaper EVs over time that are aimed for average consumers.

[–] [email protected] 5 points 3 months ago (2 children)

I'm sorry, but that makes 0 sense.

Not everyone can spend 20k, so let's make 100k cars?

And when China is selling such cheap cars, let's stop them too, because there is no demand?

There is nothing logical about your arguments.

[–] Habahnow 0 points 3 months ago
  • Not everyone has the budget to openly spend 20K plus on a new vehicle, which means lower demand
  • Since not everyone will just buy a new car, companies need to make as much money per unit sold which means luxury cars make more sense These points together should make sense. They are marketing to people that have a lot of disposable income. If they have a lot of disposable income, they probably want a luxurious car. People with 200k+ annual salaries want to keep up with the Johnses so a 20k EV car they can easily afford doesn't look as cool compared to their neighbor's 80k+ car. So they want a 80k+ car with all the bells and whistles.

The reason we stop China is not related to supply and demand so much as stopping companies that China has given unfair advantages to. If BYD was making cars without signifcant Chinese subsidies, then yes I would be bothered by these tariffs as well.

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

The person who buys $100k cars isn't going to be shopping in the $20k car market. This $20k EV already exists as the Nissan Leaf and it sells like shit because people don't really want a stripped-down, barebones car. Teslas' cheapest cars are twice the price and outsell it by several orders of magnitude.

We're stopping China from selling cars here because they're selling $50k cars for $20k which is a big problem for everyone but China.

There is logic to their argument. I think you just don't understand the situation very well.

[–] [email protected] 10 points 3 months ago (2 children)

Pretty sure other incentives have been implemented for other car companies like tax rebates. Let's not forget the fossil fuel industry being subsidized still...

[–] Habahnow 7 points 3 months ago (1 children)

You're correct, but what I was, not clearly, talking about is increasing the incentives so its easier for people to purchase electric vehicles. You do bring up a good point that fossil fuel subsidies should also be reduced to better reflect its true costs.

[–] [email protected] 5 points 3 months ago (1 children)

During global boiling crisis we should completely reverse and start taxing fossil fuel

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

The complicated thing about that is it will harm your average worker until cheap alternatives are available.

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

I agree with you there!

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

Those incentives don't just apply to US companies only which is what China is doing with their state-owned companies.

[–] [email protected] 7 points 3 months ago (1 children)

Yes, that is a reason for having tariffs to offset the government subsidy. But "100% tariffs" instead of one set based on the actual impact of the government subsidies is an emotional overreaction.

[–] Habahnow 11 points 3 months ago (2 children)

What would be the alternative? China is no releasing numbers to how much they subsidize BYD, I doubt BYD would want to be that transparent either.

From my point of view the US could either wait, try to study and figure out the puzzle for how much China subsidizes BYD in order to come up with a good tariff amount, all while China still accomplishes its goals, or they can put tariffs now and make adjustments later. For all we know, 100% tariff may be too low, we don't know for certain.

Let me know if there's a better plan that's being talked about.

[–] [email protected] 8 points 3 months ago* (last edited 3 months ago)

The 100% tariff was Trump spouting the first thing that came to his lips during the debate. It was stupid and as you pointed out, it might not be high enough depending on subsidies received by BVD. Or it could be way too high, because of the reduced costs to manufacture like most things we buy from China.

A better plan is for knowledgeable experts to evaluate the situation and set tariffs, which is the normal process.

[–] [email protected] 4 points 3 months ago (1 children)

Or the other option, subsidize American EVs. They've been trying to do that, but pretty half assed, to the point where only Tesla and a few Chevys qualify.

[–] Habahnow 9 points 3 months ago (1 children)

My understanding is that the subsidize are to also encourage american manufacturing which those companies you listed satisfy. These subsidies are incentives for manufacturers rather than buyers, as it encourages these companies to change their manufacturing process which would lead to reduced costs.

[–] [email protected] 6 points 3 months ago* (last edited 3 months ago)

Yeah, tax incentives and consumer rebates won't encourage investment in American EV manufacturing capacity because they could disappear overnight and the extra capacity would then be wasted.

Free money to build new factories will do it though, and that's what Uncle Sam has been spending on - its less risky to tool up a factory for mass production of a low margin family sedan when somebody else is paying for the tools and you won't lose money if your new model sedan doesn't sell enough units to cover the one time factory startup costs.