Chinese EVs are being sold at a loss of up to 35k per car:
https://www.nytimes.com/2023/10/05/business/nio-china-electric-vehicles.html
The Chinese government is subsidising their car industry, so they can engage in dumping, and decimate our car industries. When our domestic car industries are dead, they’ll raise prices. It’s like Amazon or any other scummy megacorp that kills local businesses.
This being said, it’s hard to feel sorry for companies who also receive plenty of government subsidies and tax breaks, broke the law on emissions testing and likely killed a lot of people because of it, and refused to innovate or lower prices out of sheer greed.
China is using subsidies to accelerate the green transition, exactly like the US is doing with the “Inflation Reduction Act” and other initiatives.
China is using subsidies to accelerate the green transition
https://www.youtube.com/watch?v=TDfLWFv3ixk
https://www.youtube.com/watch?v=oEMtTtUZXEk
https://www.bloomberg.com/features/2023-china-ev-graveyards/
https://www.nytimes.com/interactive/2022/09/26/world/asia/china-fishing-south-america.html
https://www.youtube.com/watch?v=4LFCBTnrMow
https://www.youtube.com/watch?v=1SEfwoqKRU8
https://www.youtube.com/watch?v=bLFYChw5c0Y
Yup. Totally green.
Here is an alternative Piped link(s):
https://www.piped.video/watch?v=TDfLWFv3ixk
https://www.piped.video/watch?v=oEMtTtUZXEk
https://www.piped.video/watch?v=4LFCBTnrMow
https://www.piped.video/watch?v=1SEfwoqKRU8
https://www.piped.video/watch?v=bLFYChw5c0Y
Piped is a privacy-respecting open-source alternative frontend to YouTube.
I’m open-source; check me out at GitHub.
Selling at a loss is how you build volume and reach the economies of scale that drive down costs.
If you fiddle around half-heartedly putting out small numbers of EVs, you’ll never come close to competing with a company that puts out over a million a year. A lot of automakers still aren’t willing to commit, and they’re whining about the position they chose to put themselves in.
a comment in the article you linked says this better than I ever could:
This whole narrative about alleged “subsidies” to Chinese EV makers and them “losing $35,000 per vehicle” is pure propaganda. Firstly, that company - Nio - is a relatively new one and it is still ramping up its production. A year ago when they were not selling EVs yet but invested a lot in R&D it could be said that they were losing infinite amount of money per vehicle - because infinity is what you get from dividing by zero. Both this logic and this math are erroneous. Tesla was losing money for years even after it started making and selling its cars.It kept going by taking money from investors in exchange for shares. That is exactly what the Chinese EV companies do. So secondly, those are not “subsidies” but investments, even if the money comes from Chinese government entities. This article states itself that local governments take stock in companies in exchange for investment - exactly the same thing Tesla investors did.
The article also talks about BYD, a more established manufacturer than Nio, that is making profits selling electric cars.
just google chinese ev car graveyard https://i.imgur.com/vjtkj6J.png
not only are they selling at a loss, most of the sales aren’t even real
There‘s a word for that „Greedflation.“ This is what western car makers do. Luckily, the Cinese car makers grasp their chance and disrupt the market
Chinese manufacturers are being heavily subsidised and even making a loss on their cars.
They’re trying to kill off our domestic car industries.
No reason why western countries also can’t subsidize EV car companies to remain competitive.
Like…what are we supposed to do? Be content with ridiculously priced EVs and be willing to pay a small fortune for them? Fuck off with that noise.
Western corporations have had no problems fucking over the average consumer for decades or laying off thousands of employees at the first sign of trouble. Let them adapt or die I say. Competition is always good. Western corporations have the smarts and the resources to compete, they just need to be forced to.
That‘s a terrible idea. Just because China throws irresponsible amounts of cash at cars doesn‘t mean we have to do the same mistake. We can simply say it‘s not OK to sell products under manufacturing costs to gain market share and that‘s that. Let‘s not inflate the already oversized car market even more.
Controversial take: the problem isn’t car prices. They haven’t increased that much when compared to inflation, and you’re getting far more and far better cars for your money when adjusted for inflation.
The problem is wages haven’t risen and housing prices have risen too much, meaning people have less to spend on a car.
E: I googled. In the US the cost of a median house was 18k in 1953. An average car cost 3.5k.
Now, the median house costs 400k.
400k/18k x 3.5k = If car prices had risen as much as house prices, the median car would cost 77k.
A lot of western countries are subsidizing EV sales. Most western auto companies just waited a decade longer than they should have to start making EVs and are in the thick of developing technology when the early movers are hitting maturity.
On top of subsidies at the national level, most legacy automakers are selling their EVs at a significant loss, but that is because they haven’t reached economies of scale yet… not because they are trying to undercut competition. It’s hard to develop new products and even harder to get them to scale production. Ford has been making cars for 120 years, but that isn’t the same thing as making an EV. They effectively have to start over in a new field… a decade behind companies that invested early.
A lot of the press you hear about EV manufacturers cutting back because demand is low has to do with them cutting back because they are losing $50-70k per vehicle they are selling and can’t stomach the losses. The demand is there, they just can’t make an EV at a price that generates profit. They trim commissions at dealerships to try to help defray cost, but that minimizes incentive for sales teams to try to move them and exacerbates the problem. On top of that, their ICE sales are diminished due to high interest rates and an overall market slowdown in large purchases so every vehicle they sell at a loss hurts the bottom line that much more.
They’re trying to wait to push the cost involved in getting to scale until interest rates go down and it’s more affordable to invest in new technology. They are fucked. Tesla is currently the only American company that is profitable at scale and Elon can’t shut the fuck up on eX-Twitter long enough to stop pissing off the marketplace. The table is set for Chinese EVs to flood the US market, but I don’t think people will be as open to Chinese vehicles with the current data privacy issues and the tense geo-political position between the US and China.
I’m thinking that, if it gets bad enough, the federal government will disincentivize Chinese EVs with tariffs to offset the Chinese gov’t subsidies… if the current US EV tax incentives don’t do enough to spur legacy automakers to kick it into high gear… which it doesn’t seem to be doing. It’s going to be a rough decade for legacy automakers.
Yep. They‘re doing exactly what we usually call hostile underbidding to heavily inflate prices later when they‘re a top dog. A practice that is not quite legal in most parts of the west. And whoever wants to know when things still don‘t work out for the car maker because subsidies dry up: Search for Chinese manufacturer ‚Weltmeister‘. That will make you think thrice about ever coming near a Chinese EV.
It’s also called dumping:
https://en.wikipedia.org/wiki/Dumping_(pricing_policy)
The kind of thing usually results in a trade war, sanctions and tariffs.
The problem in Europe, is that our manufacturers are so reliant on Chinese parts and manufacturing, that they’ve asked our government NOT to intervene. China has them by the nuts, because they’ve outsourced too much. IRC they can’t even make batteries without using Chinese parts.
Selling at a loss to enter a market or gain market share is a time honored tradition at this point.
It is, but as the article mentions some manufacturers are making a loss of 35k per car.
If those cars are then sold for 5k less than the US/EU/Japanese equivalent, despite lower wages and environmental standards, you have to ask yourself questions.
While that is part of it, the other, bigger part is that Western countries actually do have higher labour costs: better salaries and conditions for our workers.
When China was outcompeting us on undesirable, low productivity, jobs, we accepted that. It was better to raise a billion Chinese out of poverty than to protect our lowest productivity factory workers. And those workers mostly transitioned to other jobs with higher productivity.
But now China is richer and their labour force is shrinking, so they will compete with highly productive factory jobs.
Politically, it is unlikely that car workers will accept unemployment. Nor will other highly paid workers.
So a trade war is brewing, you better brace yourself for it.
Don’t think labor costs is a big factor. Car production is the sector that is most automated. Just think of this endless bands of hanging cars with robot arms working on it. Tesla even topped this.
It’s mainly the unwillingness to design and sell cheap cars due to less profits. In Germany we had electric cars for 20k€ or even combustion cars under 15k€. But they stopped building it. Although it was sold out in weeks.
In my region there was a Startup by the Aachen University RWTH (which is an elite university in Germany) bulding small EVs for around 20k€. They simply bought all parts from suppliers and just assembled it. And engineered and designed it first. Unionized and still competitive. Unfortunately, they didn’t fly.
EV building is rather simple. The software is key. And this is the missing part at car makers capabilities.
I second your thoughts on trade war. However, I guess it will be much simpler with high taxes, high quality regulations, and may be less support by car workshops. We will see…
There is still a shit ton of people working in a car factory. Tesla had to scale back their amount of robot workers since humans could work much faster. Tesla expects to have 60,000 people working in their Gigafactory in Texas when the production of the Cybertruck ramps up.
China wasn’t “outcompeting us on undesirable, low productivity, jobs”. Corporations were shipping jobs to China to undercut highly productive factory jobs back then, too, so they could save on labor costs. It’s only now that China is undercutting corporate profits that these same corporations come crying and shitting their pants. That’s also why you see a ramping up of negative media pieces on China. It was never about charitably raising people out of poverty. It was always about corporations undercutting labor to gain greater profits. Fuck 'em, bring on the cheap cars.
Dude, I’m old enough to have lived through it.
Making toys and other plastic shit was never a high paying job in the West.
And no, it wasn’t charity, it was a win-win that increased living standards on both sides.
But it did have an impact on low paying manufacturing jobs in the West and that impact was accepted by Labour unions for the two reasons I gave: we (rightfully) concluded there were enough other, better jobs available and didn’t want to keep Chinese workers poor.
I hate it when corpos use the “oh we can’t lower prices because our staff is getting paid too much”-narrative. What about the CEO who takes half the profits for himself?
It’s the workers who create value for a company, they don’t take it away by getting paid for their work.
My God the Chinese are at it again beating the United States at capitalism
It’s not on, it really isn’t, the Chinese shouldn’t be allowed to engage in the free market. They’re supposed to be the enemy.
They should be sanctioned so that Western car makers can continue to put out vehicles for ludicrous prices, the way God intends.
I get your sarcasm, but Chinese products are life savers in 3rd world countries like mine. My brother bought a Chinese pickup truck for $3500 brand new. American trucks are at least 10 times that. People there work a whole month for $500 - $900. No one can and will never afford that shit. Same goes for other products like cellphones, computers… Etc. an iPhone there costs $1200 - $1400 and a Chinese one costs $300 max and it does the job no problem. People in those countries love China.
I don’t know, I feel like it works on both levels really. There are actual people that think like that and it’s insane. The US trade war doesn’t really help, It paints China as the bad guy even though they’re only doing the same thing as every other country in the world.
By all means demand China improves in areas which makes sense such as blatant copyright violation and human rights abuses but not this. Making cheap cars is hardly nefarious.
Somewhat unrelated: IINM most Europeans don’t drive even a quarter of the max range of EVs on most of their trips. The current range of EVs should be just fine it you plug it in every day like your phone. Getting an EV that can get you to work and back or to a friend and back without charging should already allow to buy an EV that’s quite affordable.
Most Europeans have one, max 2 cars per household. A fuckton of Europeans also go on holiday with their cars once or twice a year.
One car needs to work for most use cases. It’s fine if you have more cars than people in the house that one of them is a 100 mile range commuter, but a different kettle of fish if the same car needs to do an 800+ mile trip to the Mediterranean in summer and a 500 mile ski trip in winter.
IINM
That’s a new one to me. I’m surprised because I thought abbreviations in that style are starting to die out.
Nooooo anything but more environmentally friendly vehicles that people can actually afford. Won’t somebody think of the profits?
more environmentally friendly vehicles
I wouldn’t call what’s coming out of China environmentally friendly
not sure about environmentally friendly,friendlier sure, but a well developed public transit system and biking infrastructure beats any kind of car based infrastructure
Trains and trans are a more cost effective and environmentally friendly way to transport the masses. It can work to a surprisingly small populations as evidenced by all of the small disparate towns in Switzerland, Norway and Denmark that depend on them.
Of course no solution works everywhere but cars should never be our first option.
Complements. The reason we’re stuck in this auto-dystopia (are we auto-asphyxiating? ;-) is people wanting one size fits all infrastructure. Let’s apply this more intelligently this time - recognize that some areas are more built up than others and different solutions scale differently . In general that can be a good thing, but we need interconnected services for everyone. That does include cars in many areas, although I agree a worthwhile goal for cities/town centers is that people not need a car
Holy based someone on Lemmy not blindly advocating for public transport literally everywhere.
The reason we’re stuck in this auto-dystopia (are we auto-asphyxiating? ;-) is people wanting one size fits all infrastructure.
The reason the US is a car dependent dystopia is because they let the auto industry dismantle a shitton of public infrastructure.
Just because you build public transport infrastructure doesn’t mean you can’t have your car, look at switzerland, netherlands, they have good public transport/bike infrastructure and still have cars.
Having great public transportation actually makes it better for people who only want to use cars, because it takes off a lot of people from the road who now have alternative options.
We need the incrementally more eco-friendly options as well. Most pickup truck driving office workers won’t suddenly get a bike and change their ways, so a more eco friendly personal vehicle is probably a lot more likely to reduce emissions for that demography.
I am not sure that buying a brand new car offsets more than just using your existing car, so there is time to make those people change their ways
