BYD is a state-backed enterprise with unknown levels of profitability when full subsidies are accounted for.
Tariffs will be needed by countries that refuse to create state backed companies but which also want an automotive industry and a manufacturing base that can make weapons of war.
Which still doesn't solve the problem: the real issue is that Western companies are financialized to the max. That's why Elon repeatedly lies to get a stock bump. Also, why companies like Google, Boeing, and Intel allow product quality to degrade, as long as they can prop up stock price for the next quarter.
So, tariffs won't solve anything. Which is why despite the Jones Act, China builds 200x more ships that the US.
Or, hasn't Tesla received billions in government assistance? what about the major automakers that'd have crumbled around 2008 if not for the US gov. pouring rivers of cash into them?
So, protectionism is only a band-aid: it doesn't change the fact that American businesses have developed a short-termist culture that only cares for the next quarter.
If you want long-term thinking then people have to be able to buy into stories about what's going to happen long-term. When Musk does that, you call it a lie. The benefit of financialization is that it provides cheaper access to capital, which should make long-term investment easier, not harder. America still has lots of capital intensive industries that are capable of thinking long-term. I don't think financialization has much to do with the strategic problems that many American companies face.
At the same time that Intel was allowing product quality to degrade, Nvidia, a 30 year old company, was continuing to innovate.
No, I don't have a personal axe to grind against Musk. I'm just pointing out his persistent, repeated lies. Being an engineer, he should be able to gauge their capabilities accordingly, or at least make those optimistic predictions closer to the finish line.
"Lies" is pretty charged phrasing for what are explicitly declared as best-case timeline estimates, which the media then loves to (disingenuously) revise into "promises."
The not-so-big management secret is that even if Musk took your advice and sandbagged his timelines, then the timelines still wouldn't be met. However it would move the actual time of completion further to the right! By using best-case predictions, things are actually getting done sooner. Call it the Applied Parkinson's Law.
They've been selling something which doesn't exist for years, as a fixed fee, or subscription. Most large companies end up walking a tightrope of getting away with as much as possible. But FSD can only be described as a lie, a euphemism if you're feeling generous [1].
It's a company worth unthinkable amounts of money. Most people would have less patience with a guy running a Patreon in his spare time who had claimed for years his supporters would have a product soon, let alone an organisation swimming in funding (Twitter debacle aside).
1 The feds told American car makers that they would release the tarrifs if they didn't release an electric car under $xx,xxx (15k? 20k?) in the next x years, or if
2. they made the tarrifs naturally diminish over time (from 10k to 9k to 8k) to give American companies a runway but slowly pressure them to improve their offerings.
I'm far from a policy expert here. I just wish we could put some price pressure on them without entirely ceding the industry.
I can see both policies you suggested working out fantastically, if followed through. Legacy American automakers would panic at first before they get to work. But, if these automakers can lobby for tariffs in the first place, why would they hobble themselves by giving these tariffs a deadline?
They can simply maintain these tariffs till forever, effectively doubling the price of any car out of China. The US population is essentially a captive audience.
Also, judging by America's antagonistic politics, any Party that opens the market to Chinese cars would be branded traitors & enemies of the working man and they'd likely do poorly in state and national elections.
> All western car manufacturers are backed by the state
As far as I can tell, this is entirely incorrect when it comes to European car companies. In the US, beside bailing out GM in the 2008 crash, they do give government loans to some car companies. But I don't agree that giving loans that equates to being "backed by the state".
GM, Ford, and Chrysler (now Stellantis or whatever they call themselves) could easily be described as the same with all the subsidies and trade protection they get.
For example, aero headlights were not legal in the US for ages until Ford wanted to use them in the upcoming Taurus. European and Japanese companies had to use US-specific headlights, usually sealed beam units.
This nonsense still goes on today. Why do you think CCS has a unique-to-US charge connector? To make things more expensive for foreign car companies.
Then we have the insane "must be built here" restrictions...
Looking only at raw subsidies for the main company is bad for both western and eastern manufacturers as it skews to what is published and forgets tax breaks, local subsidies, subsidiary subsidies, subsidies down the supply chain etc.
Tesla got $300million for battery swapping and $1 billion for a Buffalo solar plant. Many other billions total with federal and Nevada, Texas. And various state incentive programs.
Their partner Panasonic is a keiretsu and I think has gotten billions in EV battery related subsidies overall.
BYD I think is similar order of magnitude to the two partners combined.
Next thing you know, having affordable and quality state unis pumping out a huge number of engineers annually will constitute a state-backed subsidy :)
At this point we aren't going under 2C, so if they want to make those cars cheaply, I'm all for bringing them here to sell, we bailed out our auto MFG and we are literally in the same spot/ mfg preference, with SUVs as we were when they failed last time. US MFG have not done the work, let the chinese ones who did in. Most US MFG heavily outsourced anyway, it isn't like letting the chinese cars in, is that much different.
If we were just optimizing for climate yes, but because that policy would decimate the manufacturing base for war machines, it gets more complicated. Either way, the climate gets better because China is the largest influence.
The purpose of an economy is neither to produce things that are so expensive that people cannot afford them. Since Western auto companies have failed, they should admit defeat, the leadership (and shareholders) should admit they are failures, and maybe open the doors to those who can make products which customers can afford.
Car factories have used robots to make cars for decades now. The cars should have become cheaper with time, not several times more expensive. And if the factors making cars unaffordable for the average citizen is beyond the carmakers control, then those factors should be adressed. But tariffs sure won't make cars cheaper.
The purpose of a system is what it does and the economy definitely does what you described. Not saying that ought to be the case but unfortunately it is.
While this is a valid argument, it is disappointing the US domestic industry gets a pass after pivoting their assortment heavily toward luxury vehicles.
Tesla has basically been the only domestic automaker taking risks and aggressively pursuing manufacturing efficiencies.
There are all sorts of unacceptable national security tradeoffs that come with allowing domestic industrial capacity to diminish and China to own more of the automotive supply chain, but the industry is also going to be less competitive long term, and consumers are going to have fewer discretionary dollars.
"Tesla has basically been the only domestic automaker taking risks and aggressively pursuing manufacturing efficiencies."
Sometimes too aggressive which may come back and hunt them.
For example, multiple companies are doing full body casting but Tesla moved very fast and ended up selling cars that now have cracks in them. There is a reason it took others longer time to introduce this in their factories...
> God forbid we touch one hair of the "free" market
Except for the subsidies, no bid government contracts, tax breaks, loan gaurantees and eventually piles of cash for when they blow through all of the above and run out of money.
Unlike those backwards communists we are proud free market capitalists.
Tariffs will be needed by countries that refuse to create state backed companies but which also want an automotive industry and a manufacturing base that can make weapons of war.