Chinese manufacturers are being heavily subsidised and even making a loss on their cars.
They're trying to kill off our domestic car industries.
Comment on Fear of cheap Chinese EVs spurs automaker dash for affordable cars
DrunkenPirate@feddit.de 6 months ago
There‘s a word for that „Greedflation.“ This is western car makers do. Luckily, the Cinese car makers grasp their chance and disrupt the market
Hyperreality@kbin.social 6 months ago
Molecular0079@lemmy.world 6 months ago
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.
Hyperreality@kbin.social 6 months ago
Real answer: 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.
Molecular0079@lemmy.world 6 months ago
Not a controversial take at all IMHO. You’re not wrong. Housing is absolutely ridiculous right now.
MonkderZweite@feddit.ch 6 months ago
and you’re getting far more and far better cars for your money when adjusted for inflation.
Better at getting me from A to B?
eltrain123@lemmy.world 6 months ago
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.
SCB@lemmy.world 6 months ago
Or just let those who can’t compete die, which is totally fine.
I don’t have any loyalty to some specific car brand.
CosmoNova@lemmy.world 6 months ago
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.
eltrain123@lemmy.world 6 months ago
They can simply say they don’t subsidize their manufacturing and operate profitably at those prices.
Just saying something doesn’t make it work unless there are legal things that back up the position. And in foreign trade, that means tariffs… which economists have been screaming about (for decades) having negative ramifications that ripple through the economy.
silentknyght@lemmy.world 6 months ago
I agree it’s a bad first step. I’d keep trying idea on the table, but I’d start by working with the European car manufacturers to create huge tariffs on those cars. Make it impossible for them to be sold at those prices in Western markets
Maggoty@lemmy.world 6 months ago
Selling at a loss to enter a market or gain market share is a time honored tradition at this point.
Hyperreality@kbin.social 6 months ago
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, you have to ask yourself questions.
Maggoty@lemmy.world 6 months ago
Yes you just described the business model. Everyone from Walmart to Amazon to Uber uses it. They take a loss in the short term, relying on new investor money or other products.
AA5B@lemmy.world 6 months ago
Sounds exactly like the rest of us
doublejay1999@lemmy.world 6 months ago
Everyone heavily subsidises their car industry
CosmoNova@lemmy.world 6 months ago
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.
Hyperreality@kbin.social 6 months ago
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.
Reality_Suit@lemmy.one 6 months ago
Good
SCB@lemmy.world 6 months ago
Greedflation is when you checks notes compete in a market by offering cheaper products?
alvvayson@lemmy.world 6 months ago
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.
hark@lemmy.world 6 months ago
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.
Holyhandgrenade@lemmy.world 6 months ago
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?
alvvayson@lemmy.world 6 months ago
The sad fact of the matter is… math
A corporation might have 10 C-level guys dividing $50 million amongst themselves and 10.000 workers earning $70K, which costs about $100K due to overheads (health insurance, retirement, etc). Together, that’s a billion, which is 20x more than the C level guys.
The C level guys aren’t the big expense, not by a long shot.
Labour, government and shareholders divide most of the earnings amongst themselves.
For the record, I do think we need to tax the wealthy more and the workers less.
alvvayson@lemmy.world 6 months ago
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.
KairuByte@lemmy.dbzer0.com 6 months ago
Yeah I’m confused by the charity argument. When have American corporations ever done anything out of the kindness of their hearts?
hark@lemmy.world 6 months ago
Manufacturing and union membership took such massive hits in the US over that period of time. It was win-win for the corporations who greatly expanded profit margins, and the Chinese government, who were happy to use their citizens as sweatshop labor to get ahead. You lived through the propaganda at the time and decided to accept it as the truth.
DrunkenPirate@feddit.de 6 months ago
Don’t think labor costs is a big factor. Car production is the sector that mostly 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…
IWantToFuckSpez@kbin.social 6 months ago
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.
EvergreenGuru@lemmy.world 6 months ago
The cyber truck is a nightmare that won’t see mass market production.Since it doesn’t have a crumple zone, I doubt it even meets US safety standards.