In less than 10 years the entire US automotive industry is gonna go bust. I just… can’t understand how anyone can look at the progress being made by BYD/Huawei and not be compelled to completely reorient the American economy to build/run EVs. Bot only would it help the US compete but would likely create massive numbers of jobs too… instead the US will deindustrialize while China takes over the world.
nickff · 23h ago
The US automakers built an oligopoly when foreign competitors were technologically behind, and they developed a burdensome cost-structure based on expensive labor and multi-layered supply chains. To compete, they would need to vertically integrate (which would be very capital intensive, and is discouraged by the tax code), and cut their (unionized) Union labor costs.
postpawl · 22h ago
GM announced a $10 billion stock buyback in November 2023, literally weeks after claiming they couldn't afford worker raises during the UAW strike that cost them $1.1 billion. Since 2015, GM has authorized $37.7 billion in total buybacks while their new UAW contract costs $9.3 billion over four years. When you can find $10 billion for buybacks immediately after settling a strike, the problem isn't "expensive labor". It's management that chose financial engineering over building competitive manufacturing capabilities.
impossiblefork · 17h ago
Yes, but companies run for investors will always have to pay investors, so it would have either been a buyback or dividends. When interest rates go up, companies end up competing with government bonds, and they must give dividends that keep them competitive, and in 2023 that was something like 4.3%.
For investing in the future to be possible interest rates must essentially be low.
I've thought a little about this problem, because recently we had situations where we simultaneously had inflation and needed investments to produce products in new ways to counter that inflation, and this obviously leads to a situation where it's difficult to get out of the problem. If we increase the interest rates then we stop the inflation, but the interest rates will be too high for investments to counter them. Concretely: Northvolt was trying to do American-style doomscaling and then interest rates went up, so they went under.
I believe that there is a solution: giving the central banks the additional tool to set a mandatory savings fraction of wages-- that is, that the central banks are allowed to set a fraction of wages that must be saved, and which may be invested or used to start a company but which isn't allowed to be used for consumption.
If you then have inflation and consumers are bidding over each other for goods and driving up the prices the central bank can increase the savings fraction without changing the interest rate. So plausible, in case of inflation you'd look at the need for capital to get out of it: if there's no need for capital to build new things and get out of it, then you just increase the interest rate, if there is, you increase the mandatory savings rate.
I thought about voluntary solutions, but suppose that we consider a savings pacts-- i.e. ordinary people get together and agree to all save a certain fraction of their income, then this drives down prices, so whoever deviates from the pact gets so much goods that he's really happy with what he gets for his money. Consequently such savings pacts are unstable and the savings pact must be mandatory.
I also think this is especially right for Europe. I calculated that if the central banks set this at 5% then this is enough for Draghi's €800B of needed investment, but it's obviously also applicable to the US if the US wants to transition to EVs, and now you have even higher interest rates than we do, so this policy might actually be the right thing for you too.
BoiledCabbage · 11h ago
Not to pick on you, but you stared your pay with a series of trivia steak arguments - but all examples of things I see repeated with little consideration.
> Yes, but companies run for investors will always have to pay investors, so it would have either been a buyback or dividends.
Your argument here is that the pivot two things companies can spend money on is dividends or stock buybacks? An incredibly false choice. They can also clearly invest in staying competitive.
> When interest rates go up, companies end up competing with government bonds, and they must give dividends that keep them competitive,
Why do you think they must do this? These aren't bonds - people aren't looking to park money at a risk free rate. They are stocks - different investments with different expectations. Setting the expectation of one based on the other is false. They should be ensuring the can keep with with short term growth of more than 4% per year non adjusted, which should be easy in an inflationary environment.
And let's dig further into what you said about this "must". Must implies no other reasonable option - the consequences of anything else would be to negative. So when you say they must do buy backs or higher dividends, I ask "or else what?". Simply put, what hairband is they don't? The company doesn't fold. Consumers don't suddenly stop buying their products. What actually happens that they need to avoid?
Not much really much of note really. They say/signal "instead of giving you this money right now, we're going to invest it to remain competitive and more productive in the future".
If some investors don't believe them or doubt want to wait the stock price dips for some period of time and then rebounds as those investments become realized with increased efficiency and superior products.
> For investing in the future to be possible interest rates must essentially be low.
Finally this is wrong. It doesn't require low interest rates is you're flush with cash. If you've given away all of your cash then yes you need to borrow to invest. But if you have tons of cash you don't need to borrow to have cash.
ProfessorLayton · 9h ago
GM's stock price is below inflation since new-GM went public 15y ago, and that's with 37B in buybacks. What do you think would've happened to the stock without them?
Do you think investors, especially institutional ones that manage retirement funds etc. would just ignore the CEO/board and not receive any returns?
impossiblefork · 7h ago
Yes, they can also invest in staying competitive, but when interest rates are high this is often not practical. Especially if there are competitors.
My observation is that great care is taken to keep companies competitive with government bonds when taking risk into account.
owebmaster · 15h ago
> Yes, but companies run for investors will always have to pay investors
> I believe that there is a solution
If changing the first is not your solution, you have no solution.
OP was saying that US companies will keep losing market until they are completely outcompeted. Finding a way to win this competition while keeping "investors" pockets full is impossible.
impossiblefork · 15h ago
Yes, but in this case the investors will be ordinary people, and the payment will effectively be the products that ordinary people want.
Suppose that cheap electric car mass production is possible with new production technology, and that there's inflation because of high petrol costs. Suppose that interest rates are 5% to prevent inflation. Even if the automobile manufacturers understand that it has to be done and is feasible with some for them to survive they won't be able to do it.
However, with this interest rates can be lower because inflation is prevented by the mandatory savings. The resources to build the cheap thing will actually be available.
If done internationally this will also greatly reduce the profits of oil producing countries: suppose that the US, the EU, China and India, all big consumers of oil, agreed on a mandatory savings rate of at least 1%. Then the ordinary people have less money to bid up the price of oil against each other, but do have money to invest in businesses that substitute for oil production. The co-ordination allows ordinary people and non-resource extracting countries to get more of the pie.
owebmaster · 14h ago
You are describing socialism. The US won't ever be socialist. And it works, China is proving that.
impossiblefork · 14h ago
How is it socialism? There's no löntagarfonder, there's no requirement to sell parts of companies-- wage labour still exists and while this would create a force which would lead to ordinary people owning a lot of capital, since the fact that companies would be making less profit on some goods would thus end up with reduced value, thus a reduced price, and that these people who are now required to be capital owners would likely buy at this reduced price, but it is not a socialist idea.
It's a patch on the floating-exchange-rate-and-policy-by-interest-rate of monetarist and Keynsianism to make it function in situations where there's both inflation and a need for investment.
I think the transition to this sort of as the US decision to decouple the dollar from gold. A way to get things more sensible.
bigbadfeline · 9h ago
> How is it socialism? ... There's no löntagarfonder
And yet that's also you:
> Yes, but in this case the investors will be ordinary people, and the payment will effectively be the products that ordinary people want.
Well, this is essentially löntagarfonder but worse because it's funded by the people under the threat of violence (mandatory savings), not from corporate profits.
> that these people who are now required to be capital owners would likely buy at this reduced price, but it is not a socialist idea.
So, the people are forced to buy the ridiculously inflated marked at ridiculously inflated prices for the faint hope that "likely" they'll get lower prices on something far in the "glorious bright future" (tm). And that's not socialism?
Well, a careful analysis reveals that "likely" is quite unlikely, the people forced to "invest" are going to lose their shirts and inflation will actually accelerate, only the well connected will benefit because they will be in control of this devious scam.
You are obviously not familier with the many forms of socialism and you argue about irrelevant details. Mandatory savings equals socialism, monopolization equals socialism - it's not Stalin's socialism, it's Mussolini's socialism - lets not forget, he was the Duce of the Italian Social Republic. As Hitler was the head of the National Socialist German Workers Party.
impossiblefork · 7h ago
>Well, this is essentially löntagarfonder but worse because it's funded by the people under the threat of violence (mandatory savings), not from corporate profits.
Eveything is done under the threat of violence, including things like land ownership. We're not running some kind of country-sized anarcho-syndicalist commune, so presumably we must operate on some other basis of morality, where we don't really care about this threat of violence stuff.
>So, the people are forced to buy the ridiculously inflated marked at ridiculously inflated prices for the faint hope that "likely" they'll get lower prices on something far in the "glorious bright future" (tm). And that's not socialism?
No, the people aren't forced to buy any stock. They keep the money uninvested or whatever they want, as long as they don't spend it. They'll invest it in order to achieve returns, to use at the point when they do get to spend it.
>Well, a careful analysis reveals that "likely" is quite unlikely, the people forced to "invest" are going to lose their shirts and inflation will actually accelerate, only the well connected will benefit because they will be in control of this devious scam.
Only if they're bad at investing, but many will joint together to form funds and try to hire professionals. Presumably banks would offer services to help people deal with their mandatory savings sensibly.
>You are obviously not familier with the many forms of socialism and you argue about irrelevant details. Mandatory savings equals socialism, monopolization equals socialism - it's not Stalin's socialism, it's Mussolini's socialism - lets not forget, he was the Duce of the Italian Social Republic. As Hitler was the head of the National Socialist German Workers Party.
That's the everything-is-socialism, including capitalism is socialism. I prefer the Marxist view: socialism is to each-according-to-his-contribution.
The only thing that is like that in our society is copyright, and this proposed policy isn't either.
bigbadfeline · 2h ago
> No, the people aren't forced to buy any stock. They keep the money uninvested or whatever they want, as long as they don't spend it.
There's no such thing as "uninvested", unless the money is in the form of currency under a mattress but this would create such a mess that if Keynes hears about it he won't stop spinning in the long term.
And what the fresh hell is to use money for "whatever they want, as long as they don't spend it"... excluding the mattress, what else can you do with money?
You're simply throwing ideas at the wall without understanding their implications, if you're human you've got to take some econ classes and find an example that is close to what you propose - everything has been tried at some point or another - then we'll have something real to discuss.
piva00 · 19h ago
Thank you for providing another example for me to use when arguing against stock buybacks[0], it's an absurdity of perverse incentives.
US automakers typically spend more per car on advertising than they spend on labor to build. Labor costs are often under 15% of total cost depending on the model. So even if they paid workers 50% more than today's wages, the cost of the car would "balloon" less than dealer markup.
Unions are not making American cars uncompetitive.
toomuchtodo · 12h ago
Automakers need labor to build cars, they don’t need expensive management and share buybacks. The problem is the corporate structure, not the people doing the actual work and their cost.
ralfd · 19h ago
> and is discouraged by the tax code
How is vertical integration disincentivized?
est · 22h ago
Ford tried to introduce Chinese suppliers into North America, the congress scrapped that.
Sure because having domestic industry is a strategic decision. Also the reason why US carmakers won't go bust. Chinese competition simply won't be allowed. Easy as that.
4ndrewl · 20h ago
Sure because having domestic industry is a strategic decision. Also the reason why Soviet carmakers won't go bust. American competition simply won't be allowed. Easy as that, comrade!
trhway · 21h ago
>Chinese competition simply won't be allowed. Easy as that.
Then the domestic industry will just rot from inside. It is usually a worse outcome than if the domestic industry were competing in the open market.
Tariffs and other protectionist measures result in the low quality high priced product of the protected industry being sellable only in the domestic market. Where is China is going to sell to the rest of the world. 340M vs. almost 8B of addressable market. It is a writing on the wall.
KeplerBoy · 20h ago
That's hardly a new situation. There are no American cars on European roads with the exception of occasional Fords.
Also the Chinese aren't selling to the rest of the World. The EU has also imposed harsh tariffs on BYD and others to protect its industry.
hshdhdhj4444 · 15h ago
There are basically no American cars being sold outside America.
This has nothing to do with EU rules and everything to do with the Big 3 deciding in the early to mid 2010s that SUVs sold in America were so profitable they really didn’t need to do business anywhere else.
Gigachad · 5h ago
Sadly RAM seems to have a small market selling to manchildren in Australia.
owebmaster · 15h ago
Can vouch for that. Ford and GM (Chevrolet) used to have a big presence in Brazil but now Ford is almost gone and Chevrolet is going the same way
ZeroGravitas · 20h ago
Tesla has a factory in Berlin.
BYD had had a bus factory for a while in Europe but is just about to roll the first cars off their plant in Hungary.
piva00 · 19h ago
There are lots of BYDs, MGs, and I'm even starting to see some Xpeng cars around in Scandinavia. They are selling.
LaSombra · 14h ago
Jaecoo and Omoda are starting to show up in the UK
jasonsb · 21h ago
We’re now trapped in a new capitalist-globalist paradigm: when one country produces goods faster and cheaper, the response isn’t to compete, but to isolate them. And the world’s oligarchs couldn’t be happier.
HDThoreaun · 13h ago
Protectionism does not work. Your plan was already tried with naval traffic, look at the effects of the jones act.
toomuchtodo · 23h ago
Management and shareholders care about today; in 10 years, it’ll be someone else’s problem. Just like the first wave of US deindustrialization.
6510 · 13h ago
Well then, just add a tax for selling within less than 10 years.
bryanlarsen · 15h ago
People point at the tariffs to say that those will protect US manufacturers. Wrong. They'll protect US manufacturing, not US manufacturers.
Toyota, VW, Honda and Hyundai et al sell globally. They have to compete against China. Some of them will learn how to do so, then dominate the American market with their American factories.
torginus · 19h ago
Why? Once you go beyond how cheap these cars are - (they are not cheap in Europe), what's the standout feature they have the US (or any other) cars lack?
WithinReason · 19h ago
> they are not cheap in Europe
only due to large tariffs
joules77 · 22h ago
> can't understand how
Check out what year Michael Crichton's Rising Sun was released. Ask ChatGPT for a summary of the predictions. And then checkout what actually happened to Japan.
StopDisinfo910 · 21h ago
That’s on Crichton. The Plaza Accord of 1985 had kneecapped Japan. The USA doesn’t have the same leverage on China.
marticode · 22h ago
I mean Toyota is now the #1 car manufacturer in the world and Japanese brands have about 1/3 of the US car market, so Japan didn't do too badly really.
ninetyninenine · 22h ago
This is like what you hope will happen. It happened to Japan. Doesn’t mean it will happen to the US.
When you look at some European country like Russia and see how fucked up it is. Then you say well Russia is full of white ppl like the US so the future of the US will be like Russia, doesn’t that sound massively stupid to you?
So why do you think what happened to Japan applies to China? Like is it because the people in Japan look like the people in China? You know the countries hate each other right?
joules77 · 22h ago
For that you have to read Chricton's other book Jurassic Park.
There the message is simple - chimps with 3 inch brains love to pretend they can control ever increasing complex systems and scale. And obviously they can't.
China's enemy is Complexity. Not the US which is too lost to talk about. Complexity goes on increasing and pressure to pretend they have control also increases. Mistakes will be made and multiply with time. So see Covid, Evergrande/Country Garden, techbro crackdown, young ppl checking out etc. Larger the system more the issues not less. More fragile. Not less.
ninetyninenine · 13h ago
I read that book and you’re just making up shit. There is no chimp with 3 brains.
You are correct that chinas enemy is not the US. But complexity isn’t the the issue either. The issues are complex but complexity isn’t inherently the causal source of there issues. It’s not like oh the complexity was so overwhelming that it confused people and covid formed and young people checked out.
Your comment is an aside. The point is Japan and China couldn’t be more different. The guy was obviously comparing the two because, hey a bunch of mongoloid Asians reaching prosperity! They must be the same. It’s stupid af.
I’m Asian myself but I will say I don’t care about him being racist. Not trying to raise some social justice garbage here. I don’t give a shit about stuff like that. I’m commenting about the raw stupidity of the comparison not the moralness of it.
jabiko · 22h ago
Even though there is some overlap of the European continent and Russia's territory, I don't think that Russia qualifies as an example for the average European country.
Also, why are you mentioning the look of people in a discussion about cars and manufacturing?
andsoitis · 21h ago
Russia is a European power. Geographically, linguistically, culturally, religions-wise, artistically, musically, etc.
bigbadfeline · 8h ago
Right but not politically! The Russian leadership went for self-isolation and nationalism. I used to hope for that mindset to remain limited to Russia, but I'm not so sure now.
wqaatwt · 21h ago
> doesn’t that sound massively stupid to you?
Also tangential? Economic development and demographic patterns might be more relevant than jumping straight to race like you did.
ninetyninenine · 13h ago
China and Japan couldn’t be more different culturally and economically, in a blind comparison the conclusion is that the distinction between these countries is night and day. Every single aspect is different.
It’s very very clear why he chose to compare Japan and China and expect that comparison to be like dropping the mic. Like he didn’t even say why Japan is an accurate model for China.
pj_mukh · 21h ago
Question: What is stopping from a new or old entrant from creating a $10-15K electric car? American mfg may be slightly better at automation than China.
hshdhdhj4444 · 15h ago
> American mfg may be slightly better at automation than China.
This is a common misconception. Chinese manufacturing is far more automated, and getting more automated, than American manufacturing.
Automation in American manufacturing basically stalled in the 2000s.
StopDisinfo910 · 21h ago
> American mfg may be slightly better at automation than China
Doubtful. It’s hard for a country which has been consistently outsourcing the production of anything remotely complex to do better than one which has been the top producer of manufactured goods for decades. Tesla tried and mostly failed.
Plus automation is expensive and require large volume to be profitable. American cars historically have limited appeal abroad and the market is extremely competitive which doesn’t help.
apelapan · 20h ago
Tesla seems to be doing pretty OK on the manufacturing side. These days quality of the physical product is decent enough and the price of their different models are highly competitive in their respective segments.
The flaws in Teslas cars are mostly design choices (plastic seats instead of cloth/leather, bad ergonomics due to focus on minimalist aesthetic, uncomfortable suspension setup etc, etc). Some of it is following trends, some of it is Elons stupid ideas.
Financially it seems like Teslas big problem is the AI-investments. Burning unfathomable amounts of cash on useless software, instead of putting that money towards developing their model lineup and improving quality on things that matter.
StopDisinfo910 · 15h ago
> These days quality of the physical product is decent enough and the price of their different models are highly competitive in their respective segments. [...] The flaws in Teslas cars are mostly design choices
These two parts don't really go together from my point of view. Tesla is often pricing a car with mid-range quality as a premium model.
Personally, I think they are not very competitive anymore in the segments they operate in. They used to have first mover advantage but now historic manufacturers have similar cars on offer. At the entry level, in as much as they have a vehicle there, they are not competitive at all compared to the Asian manufacturers.
I am more worried about the plummeting sales than the AI investments.
apelapan · 13h ago
When I picked my Model Y the main competition was Kia EV6 and VW ID7. The monthly lease+insurance was $600 for Tesla, $850 for Kia and $1000 for VW.
To get down to Model Y-level costs, I would have had to settle for a barebones ID4 or an MG. In that comparison the Model Y is a wonder of pace, space and grace.
I don't like my Model Y, I sort of hate it, but if I had to make the choice again and the relative prices (and my car-needs) were the same, it would be a tight race. I'm pretty sure there will be better options next time, though.
bigbadfeline · 9h ago
> if I had to make the choice again
The choices are different now, Tesla is no longer a winner. That despite the tariffs, without which nobody would buy Teslas.
bryanlarsen · 15h ago
Tesla learned how to do manufacturing from the Chinese. The first plant they built themselves was designed, built and run by the Chinese, and then basically copied to Germany. The Texas plant is an evolution of that.
That manufacturing edge is the reason Tesla is still profitable despite its massive drop in sales.
zitsarethecure · 16h ago
I am following the development of a new company called Slate who are specifically trying to build low cost EV's by shunning gimmicky BS like "self driving" and selling them with only an extremely limited number of options from the factory.
There'd be no demand for it - the median American takes home about $40k a year, while a Civic (which is a very decent car all things considered), costs $25k, not to mention tons of cheaper options if you buy used.
There's just no one willing to buy these entry level cars, except as maybe second commuter cars.
tpm · 20h ago
Indirect and direct government support (exactly like in China). So this is unlikely when the government is going in the other direction.
trhway · 21h ago
Bolt EV was 20K after tax rebate (and that is an US car, ie. it has more safety and other required features than say a 12K car legal in many other countries). Not many people bought. Instead they buy more expensive EVs. While GM probably didn't make much money on each Bolt. Now Equinox EV, something like 28K after tax rebate. Not many people buying. Again they are buying more expensive EVs. And GM probably doesn't make much on the Equinox EVs. Talked with an owner of one - great car, very inexpensive lease, so while being price conscious he went for a pretty loaded config.
So, i think 10-15K car in US has no buyers, and no margin to make it worth for the manufacturer.
bryanlarsen · 15h ago
Equinox is selling very well.
Afforess · 23h ago
Yeah, I came to the same exact conclusion last year. Heck, even Ford’s CEO drives a BYD and thinks their a major threat.
This administration seems set on demolishing American industries though. Such a shame, but maybe we can finally get decent rail once all the car lobby’s are dead. (But probably not)
jampa · 22h ago
He drives a Xiaomi SU7, which seems like the best car out there for the price.
Honestly, it amazes me that Xiaomi built the car that you would expect Apple to come up with after all these years they spent researching and coming up with nothing.
According to Wikipedia, the Xiaomi SU7 Max has 1,784 hp and is priced at 73,000 USD. In some YouTube videos, they raced against Ferraris and Bugattis, and it fared better than much more expensive cars. I have no idea how they did it.
sherr · 21h ago
This is the point that The Economist made this week about Xiaomi. It looks like Lei Jun, the CEO, has a bit of a cult following in China.
"With the successful release of the YU7—its second electric vehicle (EV) after the SU7, a sporty sedan launched in March last year—Xiaomi has pulled off a feat that eluded Apple, which ditched plans to make its own EV after burning billions of dollars on the effort over a decade."
There's also a brutal price war going on over there. Those cars will be exported worldwide. Western countries are in a bind: protect the local manufacturer or allow the (much) cheaper and environmentally sound EV in from China?
"China’s smartphone champion has triumphed where Apple failed" [1]
> According to Wikipedia, the Xiaomi SU7 Max has 1,784 hp and is priced at 73,000 USD. In some YouTube videos, they raced against Ferraris and Bugattis, and it fared better than much more expensive cars. I have no idea how they did it.
A Cybertruck may look clumsy, but it can been a Lamborghini. Instant torque.
The highest horsepower in a Ferrari road car is 1,200 in the F80. Though, I’m pretty confident you got the HP wrong for the Xiaomi.
slaw · 19h ago
Xiaomo SU7 Ultra - 1,138 kW (1,547 PS; 1,526 hp). OP quoted max battery power.
Xiaomi on tracks is faster than Ferraris and Bugattis.
Nürburgring times.
7:04.957 Xiaomi SU7 Ultra
6:22.091 Xiaomi SU7 Ultra Prototype
tim333 · 16h ago
It's very impressive really, more so give the SU7 Ultra is a normal four seater car you you can drive to the supermarket in and then go beat Ferraris on the Nürburgring or maybe set a record on your local track.
BobaFloutist · 4h ago
I mean that's just electric cars, right, they're ludicrously overpowered for their price point (even if they're spendy in other ways).
Even my parents' Leaf leaps like a salmon outside of eco-mode despite that being the last reason anyone would buy a Leaf.
andsoitis · 14h ago
> Xiaomo SU7 Ultra - 1,138 kW (1,547 PS; 1,526 hp). OP quoted max battery power.
OP talked about the Xiaomi SU7 Max, not Ultra.
Looked it up now, the Max has just shy of 700 horsepower.
slaw · 11h ago
OP mixed data from Ultra and Max, also used battery max power not engine power.
Max is 495 kW (673 PS; 664 hp) for 299,900 yuan (US$42,239)
ninetyninenine · 22h ago
No this administration is set on protecting industry. Tesla is still around largely because byd is kept out.
I mean the policies you see you like to think are bad are literally helping Americans out, it’s just hard to look at those policies.
Because the policies represents American inferiority. America needs a leg up because their industry is inferior to China. These policies are not fair at all.
tim333 · 16h ago
Tesla is still competing reasonably well with BYD in China.
ninetyninenine · 13h ago
BYD is dominating. Tesla is doing reasonably well. That’s correct.
But Tesla is not dominating China.
Tesla dominates the US. The only reason for that is because the administration is helping Tesla. The administration helps Tesla but they do so also by harming consumers. They restrict consumer choice to an inferior choice and thus preserve industry in the US.
pstuart · 21h ago
> No this administration is set on protecting industry
No, this administration ostensibly wants to Make America Great Again, but that requires policy that is focused on the greater good -- with a long term vision on the investment.
The reality is that they are actually interested in is actually a kakistocracy and has the following concerns: self-enrichment, staying in power, and oppressing its enemies.
ninetyninenine · 13h ago
All of what you said is true. But you implied making America great is not part of that.
Trust me. The kakistocracy requires America to be great. The tariffs are part of that.
Let me spell it out. The ceo of tsmc has clearly stated many times. The economics of building a fab in the US don’t make sense. Everything will be massively more expensive. The reason why it’s being done is simply to give a leg up to the US so the US can perform better at something that they are inferior at to Taiwan.
All of these policies are done to produce better outcomes in the long term but be massively painful in the short term.
I hate trump but the reality is that politics and taking sides is a cartoonish attitude. People are complex and the administration is made up multitudes of people. The reason for why they do what they do aren’t simply black and white and always in favor of just funneling more power to the upper class.
Maybe you’re right that they don’t give a shit about anyone other than self enrichment. But improving America in general doesn’t go against self enrichment, in fact improving America in general has massive long term upsides for trump. Don’t fall into the trope of taking a political side and thinking in terms of caricatures that trump is just pure evil.
pstuart · 4h ago
I do think that they want America to be great, but only in the sense of "we're number one!" (chanted incessantly). Day after day I see nothing that shows that they know what they're doing (other than following the Project 2025 playbook).
I abhor partisan politics and would have no issue pointing out the plentitude of failures that happened under Dem leadership. But the Right has this One Weird Trick where they make everything political (in a partisan sense) and the act of criticizing a policy or whatnot on its merits then becomes a "biased political opinion".
Tariffs are being used in an attempt to replace income tax (Trump has been clear about that), with a benefit of being a weapon to punish perceived enemies and with a bonus of being yet another thing he can be bribed on.
I do think that Trump is pure evil -- there's zero redeeming qualities about him. Please correct my assumption if you have anything.
idiotsecant · 23h ago
I mean, say what you will about third world mafia states, they do generally have trains. Mostly because the citizens couldn't imagine owning a personal vehicle. Post-soviet Russia, here we come!!
nodejs_in_2025 · 14h ago
Good ridance.
dyauspitr · 22h ago
Trump is a regressive. Short term profits for his buddies over 5-10 years then it’s night night to the US.
kortilla · 23h ago
Tesla?
cenamus · 22h ago
BYD is almost half the price and doesn't come with Musk attached
pxtail · 20h ago
Half the price sounds good but I'm not sure about other part: Xi attached instead of Musk
conradev · 21h ago
Almost 50% the price with 100% tariffs means more expensive, and they can keep raising tariffs.
chrini3930 · 22h ago
> Tesla?
Next time you’re in Asia (hell, anywhere outside USA) sit inside a BYD vehicle.
Tesla-like acceleration with Porsche handling with Italian interior with Toyota reliability for HALF the god damn price of Tesla.
US government does not want Americans to know China already won at EVs. It will hurt national pride.
Just like how the space station is going down in 2030 with no plans to replace. Meanwhile China already has their own manned space station live today. Would not be surprised if NASA is abolished in the next few years.
echelon · 23h ago
American consumers want expensive and big cars, not cheap and tiny cars.
BYD margins in America would be razor thin.
BYD is going to kill in developing and emerging markets, but it doesn't stand a chance in the American SUV / truck / sports car market. It'll also push America out of international markets, but it won't be able to edge into American consumer markets.
It's not big auto that's the problem. It's the American consumer.
US automotive regulations have pushed for lighter, smaller, more fuel efficient coupes. Yet people keep buying the big and heavy trucks and SUVs.
It's cultural.
kachapopopow · 21h ago
It is not cultural, the automotive manufacturers PUSH(1) for people to buy expensive and big cars because it makes them a lot more money.
Americans DO want cheap small and fuel efficient cars, but they are actually MORE expensive due to the government regulations and guess what? The "big expensive" cars have much looser regulations due to being classified as trucks. There are several articles and youtube videos about this topic, it is very well explored and nothing is being done about it.
if a new base model nissan versa was $40k and an F150 was $18k, then maybe I could agree with that. of course I don't even need to point out the reverse is true.
auto manufacturer lobbyists may have been successful at convincing the government to incentivize the production of more expensive, more profitable vehicles, but it's not like there aren't still cheap small cars that everyone knows about and would fulfill 90% of people's needs for half the money, yet they spend on average $50k for a 4,000lb SUV, to never carry more than 4 people and some groceries.
maybe lobbying got the price of SUVs down 10% relative to smaller cars, and sure some people considering a smaller car might upsize because of that. but I don't think it's possible to discount the cultural component when you look at what people in the US buy. and if people fall for that because of advertising, that's essentially cultural.
kachapopopow · 10h ago
Sure, go ahead try to buy a 18k nissan and see how well that goes. I asked a friend that lives in the US and he said: "in your dreams lmao".
bryanlarsen · 15h ago
The Chinese people love big cars. A small car there is a poor person car. They sell well because China is still poorer than the US, but sales are shifting to larger cars rapidly.
marticode · 21h ago
BYD makes a pickup truck (the BYD Shark) and SUVs (though none as large as a Tahoe or Suburban - yet)
Animats · 21h ago
The BYD Yangwang U8, a giant luxury SUV, is up there in size. They could easily build a gonzo pickup truck, but there's little market for those outside the US.
Shin-- · 22h ago
Sealion, Atto 3, M6, Tang, even Seal, are not small, let alone tiny, cars.
Afforess · 22h ago
Wrong. American car choice has everything to do with government subsidies, car safety standards and fuel standards. Consumer choice doesn’t matter in the US Auto market.
echelon · 22h ago
Look at what consumers buy. You can't dispute the actual sales data.
It doesn't matter if regulations favor small and fuel efficient. That's not what consumers buy. In fact, they flock to the exact opposite.
Occam's razor here is that American auto isn't stupid. It's just building what the consumers want.
American preferences don't match that of the broader world.
Afforess · 22h ago
You are missing the point. I don’t dispute the sales data, I agree with it, it supports my point. It’s not out of preference, it’s enforced by regulations and encouraged by
the tax code.
But large cars are not cheap - they're significantly more expensive than the small cars available on the market.
Consumers aren't buying trucks because they're incentivized with money - because the truck is double the cost. Theyre buying trucks because they want them.
Does that make American consumers stupid? Yeah probably.
Id sooner blame marketing and advertising than regulations and tax codes. The reality is that when these gas guzzlers are priced outrageously, Americans still want them.
echelon · 14h ago
There are plenty of cheaper cars people can buy, but they're not buying them.
atlanticfire · 22h ago
There is one path though, the US automotive industry can start disregarding human rights like BYD (which ranks last now):
> There is one path though, the US automotive industry can start disregarding human rights like BYD (which ranks last now)
US consumers already disregard human rights. They keep buying Nike and iPhones.
EU cares more about human rights than the US.
vitorgrs · 22h ago
In Brazil, they called it Dolphin Mini. It's been a huge success.
BYD now it's ahead of Toyota in sales.
If you told someone like, 3 years ago that this would happen, people would call you crazy,
TOP 9 from May was:
1. FIAT
2. VW
3. GM
4. BYD
5. Toyota
6. Hyundai
7. Honda
8. Caoa-Chery
9. Jeep
t1234s · 1d ago
Instead of small cheap hatchbacks we get the electric hummer.
_carbyau_ · 23h ago
Cost of living
Stage 1: you want a smaller cheaper car.
Stage 2: buying/renting a house is too much so get a bigger car to sleep in...
Seriously though, I want a 4WD electric version of a Mazda MX5 with Hyundai's Ioniq N series drift mode. Fun every day, more fun on track days.
alephnerd · 1d ago
People in the US haven't been buying small cheap hatchbacks for years. Look at how the Toyota Yaris, Honda Fit, Hyundai Accent Hatchback, and the Kia Rio faired in the US market.
Toyota, Honda, Hyundai, and Kia would have continued to manufacture and sell these in the US if there was demand, which there wasn't.
What I'm surprised by is the non-existence of an Indonesian owned and designed brand, but that's probably a result of the Asian Financial Crisis back in the day, but it's embarrassing given that historically poorer Vietnam has been able to incubate it's own domestic ecosystem for EVs and ICE cars. Indonesia has stagnated over the past decade based on developmental indicators and seems to be falling into the commodities trap instead of upskilling into processing.
radpanda · 23h ago
As I understand it there was actually healthy demand for the Honda Fit and it sold profitably, but US-bound Fits were made in the same Mexico factory that made the more profitable Honda HR-V. The HR-V was successful enough that it displaced some Fit production and there were waiting lists at Honda dealers to get a Fit. Eventually the HR-V became popular enough that the Celaya factory switched to 100% HR-V production.
It wasn’t that Honda couldn’t sell Fits to Americans at a small profit, it’s that they found they could use their manufacturing capacity to sell more expensive, more profitable models to Americans instead.
MobiusHorizons · 23h ago
The fit is an awesome car! My friend owns one and the way the rear seats fold into the floor is a sight to behold. Immensely practical vehicle.
alephnerd · 23h ago
> US-bound Fits were made in the same Mexico factory that made the more profitable Honda HR-V
> The HR-V was successful enough that it displaced some Fit production
> it’s that they found they could use their manufacturing capacity to sell more expensive, more profitable models to Americans instead.
That by definition implies that the Fit did not have ideal PMF. You do NOT want to be managing multiple SKUs, especially if they are cannibalizing each others market.
It's also an additional point showing that if given the option or the ability, consumers would spend a couple thousand more just to get a CUV instead if a hatchback.
Edit: I forgot, no one on HN understands how basic business works. Keep the downvotes coming
MobiusHorizons · 23h ago
My personal theory is the people who want them don’t buy new vehicles. That is true of all the people I know who own hatchbacks (myself included).
dpkirchner · 22h ago
That jibes with my personal experience. Honda made the Fit too good to replace (best car I've ever owned) and then they ditched the model before we needed a new one.
idiotsecant · 23h ago
True. Nobody buys a new hatchback - the kind of practical person who wants a hatchback wouldn't dream of taking the new vehicle depreciation hit. You get one with a Facebook marketplace discount.
tim333 · 13h ago
Indonesia doesn't have much of an engineering tradition. I think they'd struggle beyond maybe getting a foreign plant set up there like Thailand has done with Toyota.
Vietnam has one domestic car maker VinFast and it's more a project of the billionaire owner of Vin group - supermarkets and the like - rather than a government plan.
rr808 · 23h ago
Does anyone know what Chinese car quality is like? I guess there aren't any 15 year old Chinese EVs. Whenever someone says a Chinese product is exactly the same but half the price, it usually isn't the same quality.
typewithrhythm · 23h ago
We get a significant range of new Chinese cars in Australia, and generally they are fine; in the low end of the market they are about the best quality for the money, in the middle they show issues where they can't deliver a overall polished product, so you get things like crappy driving dynamics or poor ADAS or janky UI. Think like you took a top trim Merc, and made one part very shit, and then priced it like a Toyota.
There doesn't seem to be any significant longevity concerns, but they have also not been around that long.
jillesvangurp · 22h ago
They are running circles around competitors in build quality, technology, range, performance, etc. What happened is that car companies went to China to outsource production, taught the Chinese everything there is to know about car manufacturing, and the Chinese paid attention.
epolanski · 22h ago
The only valuable and hard to replicate know-how was in ICEs, all the rest you could buy or figure out.
epistasis · 22h ago
If that were the case, then US manufacturers would be doing far better with EVs than they are. Yet they are not able to keep up with BYD and are failing at hitting their own milestones.
jillesvangurp · 21h ago
That's because the Chinese are far ahead in battery technology and related supply chains. US manufacturers are only now starting to use LFP in larger volumes. Reason: limited amount of local producers capable of producing LFP batteries. This is starting to change as some local producers are now licensing technology from the likes of CATL. For example Ford is doing this.
They are years behind with sodium ion which is being mass produced in China already and being used in ultra cheap EVs that simply don't exist in the US market.
And then solid state batteries are also something that China looks to be on track with to start producing in larger volumes in the next year (low volume production is already happening). And that's despite companies like Amprius, Quantumscape, etc. being based in the US. In short, the US car manufacturing industry has long lost its leadership position. And that's including Tesla that until a few years ago was producing better EVs than others. No longer true and they are struggling to keep up currently.
epistasis · 12h ago
Agreed, and that's my point: US companies only valued ICE skills, which has left them weak and vulnerable now that the truly valuable skills are in batteries and looking for efficiencies with a far simplified rest of product.
By treating batteries as a component roughly on par with an air filter, US manufacturers have lost out on multiple R&D cycles and put themselves in such a poor strategic position that it's unlikely they will be able to survive without major restructuring.
wordofx · 20h ago
This is not true at all. Quality of cars in China is abysmal compared to what they ship to EU/AU/NZ. If you try driving a BYD in China vs say Australia. It’s like 2 completely different cars. What they ship internationally meets standards. But in China they don’t live up to those and standards.
jillesvangurp · 16h ago
So you are saying that they adapt to the local market but are perfectly capable of selling perfectly good vehicles abroad when they want to? This doesn't match what I know of the market. It also doesn't make much sense. Basically most of the BYD market is China but it's a hyper competitive market where there's a price war going on. I'd say there's very little room for chronic under performers in that market. As there are literally dozens of companies eager to step up and do better. From what I've seen if you want to get a glimpse of the future of road transport, you need to go to China.
lossolo · 12h ago
That's not my experience, I was in China, drove the cars and also tried them in the EU.
bruce511 · 8h ago
When it comes to new car producers there's always yhe "quality" question.
We saw that with Japenese cars in the 70s (turns out quality was high) and some of the most valued brands now are Japenese (Honda, Nissan, Toyota etc.)
Then it was the Korean turn. Cheap right, so low quality? Turns out Kia, Hyundai, Daihatsu etc are nice cars.
Sure, there are a few early iterations that needed improvement, but in each case those quickly got ironed out. And Chinese cars are far past the "early" stage. They're genuinely good cars for very competitive prices.
When it comes to EVs They're ahead in quality. BYD particularly seems to come with a very good reputation.
Sure, the US is obsessed with large SUVs. But the rest of the world isn't. US car makers are not making cars that the rest of the world wants, and the export market is closing. (I'd count Ford as something of an exception here, they still produce small cars for foreign markets, but they're cutting corners on quality and reputation is falling...)
duskwuff · 23h ago
Ars Technica reviewed a BYD Dolphin (small electric hatchback, £26k ≈ $35k) a few months ago:
My dad dailies a previous gen Chinese ICE (Geely) as an experiment, 100k km and nothing major broke yet. It is not the most fuel efficient but maintenance is cheap.
broof · 21h ago
I drove a BYD while in Thailand and it was pretty janky in some ways (buggy UI, kinda cheap feel, and a few other things I can’t remember) however for its extremely low price it was fantastic
aianus · 21h ago
Plasticky and creaky, at least for the BYDs that UberX drivers use in Mexico.
They do have a lot of space / leg room.
I don’t see any reason to buy one over a Tesla except for saving money.
vlabakje90 · 20h ago
And who would want to save money, right?
rdsubhas · 13h ago
An equally relevant question is, how is the support and maintenance story.
csomar · 23h ago
I ride on the atto frequently (grab has an ev option). For a cheap car, the quality is surprisingly good. I don’t know longer term how reliable they are but EVs are simple and don’t have an engine which is where most of your car problems come from.
dpkirchner · 22h ago
BYDs are good enough that domestic manufacturers bought a 100% tariff (pre-Trump). That wouldn't have been necessary if they were junk.
alephnerd · 23h ago
At the Atto's price point, comparable to the equivalent entry level Tata, Suzuki, or VinFast EV.
The discount from an American perspective kicks in at the $20K and above range.
Mind you, it's a discount if you earn in dollars or a salary comparable to the West, which most Chinese, ASEAN, and other Asians do not (aside from the Asian Tigers or those working in top tech or finance roles in CN/ASEAN/IN).
If you're household post-tax income is around $6k, a $12K let alone a $20K car is expensive given that housing is fairly pricy as well, and saving for rainy days is much more critical.
dmix · 23h ago
These prices might be temporary, CCP is trying to crack down on deflationary pricing which is cannibalizing it's own internal markets. A product of competing provincial governments subsidizing their local companies with cheap debt and the overuse of promissory notes between vendors. It's resulted in a record number of bankruptcies and created a financial risk similar to China's real estate bubble.
Think: how Uber used VC money to offer cheap prices and undercut competition, but times hundreds of companies using government money driving the whole market down into fantasy land. Eventually prices have to come back to reality or the factories won't have capital.
toomuchtodo · 23h ago
China needs no more housing (which, previously, was the driver of their economy), but still needs work for hundreds of millions of people. Xi specifically shaped policy to grow clean energy and EV industries. These prices will only continue to decline in the future.
For the Atto 1, around $12K makes sense. Equivalent EVs from Indian companies like Tata and Mahindra and Vietnamese companies like Vinfast sell for around $8-10K.
The price war in China is when a new Atto 1 could be bought for $6-8k from a dealership on discount.
That's why BYD (and SAIC, Geely, GWM, etc) have been expanding abroad so quickly - in order to build their own niche to survive the Chinese price war.
That said, as I predicted a year ago, the Chinese leadership has started cracking down on the price war in China for burning capital - especially at provincial SOEs who have been facing the brunt of the war because privately owned BYD has been outcompeting the SOEs.
dmix · 23h ago
Regardless of the potentially unsound money involved that is pretty great they can produce these cars for $12k. Hopefully the export gamble pays off enough to cover the internal issues, history is full of companies have a habit of stretching out the good times on easy money before they hit a wall.
BYD would probably just consume the smaller competition in such an event, just mostly bad news for provincial government debt.
alephnerd · 23h ago
> that is pretty great they can produce these cars for $12k
All new hatchback EVs comparable to the Atto in Asia can be purchased at around $8-12K as I mentioned before, like the Tata Tiago EV, Tata Punch EV, and VinFast VF3.
> Regardless of the potentially unsound money involved
It becomes unsound when you are selling it at $7-8K, which is what has been happening in China.
Hypothetically great for consumers, but in action it was a net negative because the SOEs competing against BYD are all owned by provinces, so it was citizens money getting burned.
This itself is why Chinese leadership has reprimanded the entire EV industry a couple days ago for reckless price wars [0]
A bit early to see if there are any fine prints but this seems like them trying to re-route the global economy. African countries are insignificant when taken separately but on the aggregate they make a sizable chunk with potential for some growth.
For investing in the future to be possible interest rates must essentially be low.
I've thought a little about this problem, because recently we had situations where we simultaneously had inflation and needed investments to produce products in new ways to counter that inflation, and this obviously leads to a situation where it's difficult to get out of the problem. If we increase the interest rates then we stop the inflation, but the interest rates will be too high for investments to counter them. Concretely: Northvolt was trying to do American-style doomscaling and then interest rates went up, so they went under.
I believe that there is a solution: giving the central banks the additional tool to set a mandatory savings fraction of wages-- that is, that the central banks are allowed to set a fraction of wages that must be saved, and which may be invested or used to start a company but which isn't allowed to be used for consumption.
If you then have inflation and consumers are bidding over each other for goods and driving up the prices the central bank can increase the savings fraction without changing the interest rate. So plausible, in case of inflation you'd look at the need for capital to get out of it: if there's no need for capital to build new things and get out of it, then you just increase the interest rate, if there is, you increase the mandatory savings rate.
I thought about voluntary solutions, but suppose that we consider a savings pacts-- i.e. ordinary people get together and agree to all save a certain fraction of their income, then this drives down prices, so whoever deviates from the pact gets so much goods that he's really happy with what he gets for his money. Consequently such savings pacts are unstable and the savings pact must be mandatory.
I also think this is especially right for Europe. I calculated that if the central banks set this at 5% then this is enough for Draghi's €800B of needed investment, but it's obviously also applicable to the US if the US wants to transition to EVs, and now you have even higher interest rates than we do, so this policy might actually be the right thing for you too.
> Yes, but companies run for investors will always have to pay investors, so it would have either been a buyback or dividends.
Your argument here is that the pivot two things companies can spend money on is dividends or stock buybacks? An incredibly false choice. They can also clearly invest in staying competitive.
> When interest rates go up, companies end up competing with government bonds, and they must give dividends that keep them competitive,
Why do you think they must do this? These aren't bonds - people aren't looking to park money at a risk free rate. They are stocks - different investments with different expectations. Setting the expectation of one based on the other is false. They should be ensuring the can keep with with short term growth of more than 4% per year non adjusted, which should be easy in an inflationary environment.
And let's dig further into what you said about this "must". Must implies no other reasonable option - the consequences of anything else would be to negative. So when you say they must do buy backs or higher dividends, I ask "or else what?". Simply put, what hairband is they don't? The company doesn't fold. Consumers don't suddenly stop buying their products. What actually happens that they need to avoid?
Not much really much of note really. They say/signal "instead of giving you this money right now, we're going to invest it to remain competitive and more productive in the future".
If some investors don't believe them or doubt want to wait the stock price dips for some period of time and then rebounds as those investments become realized with increased efficiency and superior products.
> For investing in the future to be possible interest rates must essentially be low.
Finally this is wrong. It doesn't require low interest rates is you're flush with cash. If you've given away all of your cash then yes you need to borrow to invest. But if you have tons of cash you don't need to borrow to have cash.
Do you think investors, especially institutional ones that manage retirement funds etc. would just ignore the CEO/board and not receive any returns?
My observation is that great care is taken to keep companies competitive with government bonds when taking risk into account.
> I believe that there is a solution
If changing the first is not your solution, you have no solution.
OP was saying that US companies will keep losing market until they are completely outcompeted. Finding a way to win this competition while keeping "investors" pockets full is impossible.
Suppose that cheap electric car mass production is possible with new production technology, and that there's inflation because of high petrol costs. Suppose that interest rates are 5% to prevent inflation. Even if the automobile manufacturers understand that it has to be done and is feasible with some for them to survive they won't be able to do it.
However, with this interest rates can be lower because inflation is prevented by the mandatory savings. The resources to build the cheap thing will actually be available.
If done internationally this will also greatly reduce the profits of oil producing countries: suppose that the US, the EU, China and India, all big consumers of oil, agreed on a mandatory savings rate of at least 1%. Then the ordinary people have less money to bid up the price of oil against each other, but do have money to invest in businesses that substitute for oil production. The co-ordination allows ordinary people and non-resource extracting countries to get more of the pie.
It's a patch on the floating-exchange-rate-and-policy-by-interest-rate of monetarist and Keynsianism to make it function in situations where there's both inflation and a need for investment.
I think the transition to this sort of as the US decision to decouple the dollar from gold. A way to get things more sensible.
And yet that's also you:
> Yes, but in this case the investors will be ordinary people, and the payment will effectively be the products that ordinary people want.
Well, this is essentially löntagarfonder but worse because it's funded by the people under the threat of violence (mandatory savings), not from corporate profits.
> that these people who are now required to be capital owners would likely buy at this reduced price, but it is not a socialist idea.
So, the people are forced to buy the ridiculously inflated marked at ridiculously inflated prices for the faint hope that "likely" they'll get lower prices on something far in the "glorious bright future" (tm). And that's not socialism?
Well, a careful analysis reveals that "likely" is quite unlikely, the people forced to "invest" are going to lose their shirts and inflation will actually accelerate, only the well connected will benefit because they will be in control of this devious scam.
You are obviously not familier with the many forms of socialism and you argue about irrelevant details. Mandatory savings equals socialism, monopolization equals socialism - it's not Stalin's socialism, it's Mussolini's socialism - lets not forget, he was the Duce of the Italian Social Republic. As Hitler was the head of the National Socialist German Workers Party.
Eveything is done under the threat of violence, including things like land ownership. We're not running some kind of country-sized anarcho-syndicalist commune, so presumably we must operate on some other basis of morality, where we don't really care about this threat of violence stuff.
>So, the people are forced to buy the ridiculously inflated marked at ridiculously inflated prices for the faint hope that "likely" they'll get lower prices on something far in the "glorious bright future" (tm). And that's not socialism?
No, the people aren't forced to buy any stock. They keep the money uninvested or whatever they want, as long as they don't spend it. They'll invest it in order to achieve returns, to use at the point when they do get to spend it.
>Well, a careful analysis reveals that "likely" is quite unlikely, the people forced to "invest" are going to lose their shirts and inflation will actually accelerate, only the well connected will benefit because they will be in control of this devious scam.
Only if they're bad at investing, but many will joint together to form funds and try to hire professionals. Presumably banks would offer services to help people deal with their mandatory savings sensibly.
>You are obviously not familier with the many forms of socialism and you argue about irrelevant details. Mandatory savings equals socialism, monopolization equals socialism - it's not Stalin's socialism, it's Mussolini's socialism - lets not forget, he was the Duce of the Italian Social Republic. As Hitler was the head of the National Socialist German Workers Party.
That's the everything-is-socialism, including capitalism is socialism. I prefer the Marxist view: socialism is to each-according-to-his-contribution.
The only thing that is like that in our society is copyright, and this proposed policy isn't either.
There's no such thing as "uninvested", unless the money is in the form of currency under a mattress but this would create such a mess that if Keynes hears about it he won't stop spinning in the long term.
And what the fresh hell is to use money for "whatever they want, as long as they don't spend it"... excluding the mattress, what else can you do with money?
You're simply throwing ideas at the wall without understanding their implications, if you're human you've got to take some econ classes and find an example that is close to what you propose - everything has been tried at some point or another - then we'll have something real to discuss.
[0] https://news.ycombinator.com/item?id=44590826
Unions are not making American cars uncompetitive.
How is vertical integration disincentivized?
https://www.reuters.com/business/autos-transportation/us-law...
Then the domestic industry will just rot from inside. It is usually a worse outcome than if the domestic industry were competing in the open market.
Tariffs and other protectionist measures result in the low quality high priced product of the protected industry being sellable only in the domestic market. Where is China is going to sell to the rest of the world. 340M vs. almost 8B of addressable market. It is a writing on the wall.
Also the Chinese aren't selling to the rest of the World. The EU has also imposed harsh tariffs on BYD and others to protect its industry.
This has nothing to do with EU rules and everything to do with the Big 3 deciding in the early to mid 2010s that SUVs sold in America were so profitable they really didn’t need to do business anywhere else.
BYD had had a bus factory for a while in Europe but is just about to roll the first cars off their plant in Hungary.
Toyota, VW, Honda and Hyundai et al sell globally. They have to compete against China. Some of them will learn how to do so, then dominate the American market with their American factories.
only due to large tariffs
Check out what year Michael Crichton's Rising Sun was released. Ask ChatGPT for a summary of the predictions. And then checkout what actually happened to Japan.
When you look at some European country like Russia and see how fucked up it is. Then you say well Russia is full of white ppl like the US so the future of the US will be like Russia, doesn’t that sound massively stupid to you?
So why do you think what happened to Japan applies to China? Like is it because the people in Japan look like the people in China? You know the countries hate each other right?
There the message is simple - chimps with 3 inch brains love to pretend they can control ever increasing complex systems and scale. And obviously they can't.
China's enemy is Complexity. Not the US which is too lost to talk about. Complexity goes on increasing and pressure to pretend they have control also increases. Mistakes will be made and multiply with time. So see Covid, Evergrande/Country Garden, techbro crackdown, young ppl checking out etc. Larger the system more the issues not less. More fragile. Not less.
You are correct that chinas enemy is not the US. But complexity isn’t the the issue either. The issues are complex but complexity isn’t inherently the causal source of there issues. It’s not like oh the complexity was so overwhelming that it confused people and covid formed and young people checked out.
Your comment is an aside. The point is Japan and China couldn’t be more different. The guy was obviously comparing the two because, hey a bunch of mongoloid Asians reaching prosperity! They must be the same. It’s stupid af.
I’m Asian myself but I will say I don’t care about him being racist. Not trying to raise some social justice garbage here. I don’t give a shit about stuff like that. I’m commenting about the raw stupidity of the comparison not the moralness of it.
Also, why are you mentioning the look of people in a discussion about cars and manufacturing?
Also tangential? Economic development and demographic patterns might be more relevant than jumping straight to race like you did.
It’s very very clear why he chose to compare Japan and China and expect that comparison to be like dropping the mic. Like he didn’t even say why Japan is an accurate model for China.
This is a common misconception. Chinese manufacturing is far more automated, and getting more automated, than American manufacturing.
Automation in American manufacturing basically stalled in the 2000s.
Doubtful. It’s hard for a country which has been consistently outsourcing the production of anything remotely complex to do better than one which has been the top producer of manufactured goods for decades. Tesla tried and mostly failed.
Plus automation is expensive and require large volume to be profitable. American cars historically have limited appeal abroad and the market is extremely competitive which doesn’t help.
The flaws in Teslas cars are mostly design choices (plastic seats instead of cloth/leather, bad ergonomics due to focus on minimalist aesthetic, uncomfortable suspension setup etc, etc). Some of it is following trends, some of it is Elons stupid ideas.
Financially it seems like Teslas big problem is the AI-investments. Burning unfathomable amounts of cash on useless software, instead of putting that money towards developing their model lineup and improving quality on things that matter.
These two parts don't really go together from my point of view. Tesla is often pricing a car with mid-range quality as a premium model.
Personally, I think they are not very competitive anymore in the segments they operate in. They used to have first mover advantage but now historic manufacturers have similar cars on offer. At the entry level, in as much as they have a vehicle there, they are not competitive at all compared to the Asian manufacturers.
I am more worried about the plummeting sales than the AI investments.
To get down to Model Y-level costs, I would have had to settle for a barebones ID4 or an MG. In that comparison the Model Y is a wonder of pace, space and grace.
I don't like my Model Y, I sort of hate it, but if I had to make the choice again and the relative prices (and my car-needs) were the same, it would be a tight race. I'm pretty sure there will be better options next time, though.
The choices are different now, Tesla is no longer a winner. That despite the tariffs, without which nobody would buy Teslas.
That manufacturing edge is the reason Tesla is still profitable despite its massive drop in sales.
https://www.slate.auto/
There's just no one willing to buy these entry level cars, except as maybe second commuter cars.
So, i think 10-15K car in US has no buyers, and no margin to make it worth for the manufacturer.
This administration seems set on demolishing American industries though. Such a shame, but maybe we can finally get decent rail once all the car lobby’s are dead. (But probably not)
Honestly, it amazes me that Xiaomi built the car that you would expect Apple to come up with after all these years they spent researching and coming up with nothing.
According to Wikipedia, the Xiaomi SU7 Max has 1,784 hp and is priced at 73,000 USD. In some YouTube videos, they raced against Ferraris and Bugattis, and it fared better than much more expensive cars. I have no idea how they did it.
"With the successful release of the YU7—its second electric vehicle (EV) after the SU7, a sporty sedan launched in March last year—Xiaomi has pulled off a feat that eluded Apple, which ditched plans to make its own EV after burning billions of dollars on the effort over a decade."
There's also a brutal price war going on over there. Those cars will be exported worldwide. Western countries are in a bind: protect the local manufacturer or allow the (much) cheaper and environmentally sound EV in from China?
"China’s smartphone champion has triumphed where Apple failed" [1]
https://archive.is/4o8hM
A Cybertruck may look clumsy, but it can been a Lamborghini. Instant torque.
The highest horsepower in a Ferrari road car is 1,200 in the F80. Though, I’m pretty confident you got the HP wrong for the Xiaomi.
Nürburgring times.
7:04.957 Xiaomi SU7 Ultra
6:22.091 Xiaomi SU7 Ultra Prototype
Even my parents' Leaf leaps like a salmon outside of eco-mode despite that being the last reason anyone would buy a Leaf.
OP talked about the Xiaomi SU7 Max, not Ultra. Looked it up now, the Max has just shy of 700 horsepower.
Max is 495 kW (673 PS; 664 hp) for 299,900 yuan (US$42,239)
I mean the policies you see you like to think are bad are literally helping Americans out, it’s just hard to look at those policies.
Because the policies represents American inferiority. America needs a leg up because their industry is inferior to China. These policies are not fair at all.
But Tesla is not dominating China.
Tesla dominates the US. The only reason for that is because the administration is helping Tesla. The administration helps Tesla but they do so also by harming consumers. They restrict consumer choice to an inferior choice and thus preserve industry in the US.
No, this administration ostensibly wants to Make America Great Again, but that requires policy that is focused on the greater good -- with a long term vision on the investment.
The reality is that they are actually interested in is actually a kakistocracy and has the following concerns: self-enrichment, staying in power, and oppressing its enemies.
Trust me. The kakistocracy requires America to be great. The tariffs are part of that.
Let me spell it out. The ceo of tsmc has clearly stated many times. The economics of building a fab in the US don’t make sense. Everything will be massively more expensive. The reason why it’s being done is simply to give a leg up to the US so the US can perform better at something that they are inferior at to Taiwan.
All of these policies are done to produce better outcomes in the long term but be massively painful in the short term.
I hate trump but the reality is that politics and taking sides is a cartoonish attitude. People are complex and the administration is made up multitudes of people. The reason for why they do what they do aren’t simply black and white and always in favor of just funneling more power to the upper class.
Maybe you’re right that they don’t give a shit about anyone other than self enrichment. But improving America in general doesn’t go against self enrichment, in fact improving America in general has massive long term upsides for trump. Don’t fall into the trope of taking a political side and thinking in terms of caricatures that trump is just pure evil.
I abhor partisan politics and would have no issue pointing out the plentitude of failures that happened under Dem leadership. But the Right has this One Weird Trick where they make everything political (in a partisan sense) and the act of criticizing a policy or whatnot on its merits then becomes a "biased political opinion".
Tariffs are being used in an attempt to replace income tax (Trump has been clear about that), with a benefit of being a weapon to punish perceived enemies and with a bonus of being yet another thing he can be bribed on.
I do think that Trump is pure evil -- there's zero redeeming qualities about him. Please correct my assumption if you have anything.
Next time you’re in Asia (hell, anywhere outside USA) sit inside a BYD vehicle.
Tesla-like acceleration with Porsche handling with Italian interior with Toyota reliability for HALF the god damn price of Tesla.
US government does not want Americans to know China already won at EVs. It will hurt national pride.
Just like how the space station is going down in 2030 with no plans to replace. Meanwhile China already has their own manned space station live today. Would not be surprised if NASA is abolished in the next few years.
BYD margins in America would be razor thin.
BYD is going to kill in developing and emerging markets, but it doesn't stand a chance in the American SUV / truck / sports car market. It'll also push America out of international markets, but it won't be able to edge into American consumer markets.
It's not big auto that's the problem. It's the American consumer.
US automotive regulations have pushed for lighter, smaller, more fuel efficient coupes. Yet people keep buying the big and heavy trucks and SUVs.
It's cultural.
Americans DO want cheap small and fuel efficient cars, but they are actually MORE expensive due to the government regulations and guess what? The "big expensive" cars have much looser regulations due to being classified as trucks. There are several articles and youtube videos about this topic, it is very well explored and nothing is being done about it.
1: Advertising, 'discounts', bonuses, 'free' accessories, loans.
auto manufacturer lobbyists may have been successful at convincing the government to incentivize the production of more expensive, more profitable vehicles, but it's not like there aren't still cheap small cars that everyone knows about and would fulfill 90% of people's needs for half the money, yet they spend on average $50k for a 4,000lb SUV, to never carry more than 4 people and some groceries.
maybe lobbying got the price of SUVs down 10% relative to smaller cars, and sure some people considering a smaller car might upsize because of that. but I don't think it's possible to discount the cultural component when you look at what people in the US buy. and if people fall for that because of advertising, that's essentially cultural.
https://www.caranddriver.com/news/g64457986/bestselling-cars...
It's trucks and SUVs.
It doesn't matter if regulations favor small and fuel efficient. That's not what consumers buy. In fact, they flock to the exact opposite.
Occam's razor here is that American auto isn't stupid. It's just building what the consumers want.
American preferences don't match that of the broader world.
https://www.vox.com/future-perfect/24139147/suvs-trucks-popu...
Consumers aren't buying trucks because they're incentivized with money - because the truck is double the cost. Theyre buying trucks because they want them.
Does that make American consumers stupid? Yeah probably.
Id sooner blame marketing and advertising than regulations and tax codes. The reality is that when these gas guzzlers are priced outrageously, Americans still want them.
https://www.amnesty.org/en/latest/news/2024/10/human-rights-...
US consumers already disregard human rights. They keep buying Nike and iPhones.
EU cares more about human rights than the US.
If you told someone like, 3 years ago that this would happen, people would call you crazy,
TOP 9 from May was:
1. FIAT
2. VW
3. GM
4. BYD
5. Toyota
6. Hyundai
7. Honda
8. Caoa-Chery
9. Jeep
Stage 1: you want a smaller cheaper car.
Stage 2: buying/renting a house is too much so get a bigger car to sleep in...
Seriously though, I want a 4WD electric version of a Mazda MX5 with Hyundai's Ioniq N series drift mode. Fun every day, more fun on track days.
Toyota, Honda, Hyundai, and Kia would have continued to manufacture and sell these in the US if there was demand, which there wasn't.
What I'm surprised by is the non-existence of an Indonesian owned and designed brand, but that's probably a result of the Asian Financial Crisis back in the day, but it's embarrassing given that historically poorer Vietnam has been able to incubate it's own domestic ecosystem for EVs and ICE cars. Indonesia has stagnated over the past decade based on developmental indicators and seems to be falling into the commodities trap instead of upskilling into processing.
It wasn’t that Honda couldn’t sell Fits to Americans at a small profit, it’s that they found they could use their manufacturing capacity to sell more expensive, more profitable models to Americans instead.
> The HR-V was successful enough that it displaced some Fit production
> it’s that they found they could use their manufacturing capacity to sell more expensive, more profitable models to Americans instead.
That by definition implies that the Fit did not have ideal PMF. You do NOT want to be managing multiple SKUs, especially if they are cannibalizing each others market.
It's also an additional point showing that if given the option or the ability, consumers would spend a couple thousand more just to get a CUV instead if a hatchback.
Edit: I forgot, no one on HN understands how basic business works. Keep the downvotes coming
Vietnam has one domestic car maker VinFast and it's more a project of the billionaire owner of Vin group - supermarkets and the like - rather than a government plan.
There doesn't seem to be any significant longevity concerns, but they have also not been around that long.
They are years behind with sodium ion which is being mass produced in China already and being used in ultra cheap EVs that simply don't exist in the US market.
And then solid state batteries are also something that China looks to be on track with to start producing in larger volumes in the next year (low volume production is already happening). And that's despite companies like Amprius, Quantumscape, etc. being based in the US. In short, the US car manufacturing industry has long lost its leadership position. And that's including Tesla that until a few years ago was producing better EVs than others. No longer true and they are struggling to keep up currently.
By treating batteries as a component roughly on par with an air filter, US manufacturers have lost out on multiple R&D cycles and put themselves in such a poor strategic position that it's unlikely they will be able to survive without major restructuring.
We saw that with Japenese cars in the 70s (turns out quality was high) and some of the most valued brands now are Japenese (Honda, Nissan, Toyota etc.)
Then it was the Korean turn. Cheap right, so low quality? Turns out Kia, Hyundai, Daihatsu etc are nice cars.
Sure, there are a few early iterations that needed improvement, but in each case those quickly got ironed out. And Chinese cars are far past the "early" stage. They're genuinely good cars for very competitive prices.
When it comes to EVs They're ahead in quality. BYD particularly seems to come with a very good reputation.
Sure, the US is obsessed with large SUVs. But the rest of the world isn't. US car makers are not making cars that the rest of the world wants, and the export market is closing. (I'd count Ford as something of an exception here, they still produce small cars for foreign markets, but they're cutting corners on quality and reputation is falling...)
https://arstechnica.com/cars/2025/04/a-small-cheap-ev-you-ca...
They do have a lot of space / leg room.
I don’t see any reason to buy one over a Tesla except for saving money.
The discount from an American perspective kicks in at the $20K and above range.
Mind you, it's a discount if you earn in dollars or a salary comparable to the West, which most Chinese, ASEAN, and other Asians do not (aside from the Asian Tigers or those working in top tech or finance roles in CN/ASEAN/IN).
If you're household post-tax income is around $6k, a $12K let alone a $20K car is expensive given that housing is fairly pricy as well, and saving for rainy days is much more critical.
https://www.youtube.com/watch?v=mbFE60Z-_VQ
Think: how Uber used VC money to offer cheap prices and undercut competition, but times hundreds of companies using government money driving the whole market down into fantasy land. Eventually prices have to come back to reality or the factories won't have capital.
https://www.weforum.org/stories/2025/06/how-china-is-reinven...
The price war in China is when a new Atto 1 could be bought for $6-8k from a dealership on discount.
That's why BYD (and SAIC, Geely, GWM, etc) have been expanding abroad so quickly - in order to build their own niche to survive the Chinese price war.
That said, as I predicted a year ago, the Chinese leadership has started cracking down on the price war in China for burning capital - especially at provincial SOEs who have been facing the brunt of the war because privately owned BYD has been outcompeting the SOEs.
BYD would probably just consume the smaller competition in such an event, just mostly bad news for provincial government debt.
All new hatchback EVs comparable to the Atto in Asia can be purchased at around $8-12K as I mentioned before, like the Tata Tiago EV, Tata Punch EV, and VinFast VF3.
> Regardless of the potentially unsound money involved
It becomes unsound when you are selling it at $7-8K, which is what has been happening in China.
Hypothetically great for consumers, but in action it was a net negative because the SOEs competing against BYD are all owned by provinces, so it was citizens money getting burned.
This itself is why Chinese leadership has reprimanded the entire EV industry a couple days ago for reckless price wars [0]
[0] - https://www.gov.cn/zhengce/202507/content_7032374.htm
They seem to be moving forward with this: https://www.reuters.com/world/africa/china-says-it-will-remo...
A bit early to see if there are any fine prints but this seems like them trying to re-route the global economy. African countries are insignificant when taken separately but on the aggregate they make a sizable chunk with potential for some growth.
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