So that's their solution to a problem that will do " clearly foreseeable and imminent injury to EU industry”? A "not prohibitively high" tarrif? It's a combo of the allure of cheap EVs and fear of...
So that's their solution to a problem that will do " clearly foreseeable and imminent injury to EU industry”? A "not prohibitively high" tarrif?
It's a combo of the allure of cheap EVs and fear of retaliation. This is going to blow up in their collective faces for decades to come.
On one hand, absolutely it will. On the other, it's top of mind for businesses all over the world that China's vertically integrated EV market will dominate all others with cheap, reliable...
On one hand, absolutely it will. On the other, it's top of mind for businesses all over the world that China's vertically integrated EV market will dominate all others with cheap, reliable vehicles, and that competing would be incredibly difficult.
It's a slimy move, both on the part of the US and Europe, but I don't think it's a terrible one.
Hahahahahahaha!! Well :D I'm not that worried about Chinese EVs for the long game. The dumping is worrying. What it will do for x-China manufacturing world wide, what it will do for investments...
cheap, reliable vehicles
Hahahahahahaha!! Well :D I'm not that worried about Chinese EVs for the long game.
The dumping is worrying. What it will do for x-China manufacturing world wide, what it will do for investments and infrastructure and trade will have far reaching consequences for sure. This is a serious threat world wide if a manufacturing power house can just borrow out of thin air and turn around to dump goods to materialize into cash.
But I'm not worried about each wave of actual physical wheels on the ground being a problem for other manufacturers. These were made as cheaply and as quickly as possible, by factories that know the goal is to dump them in other countries to trade for a cash strapped China. They're post debt balloon popping already. They've gone past collapse of their building craze. The only reason we don't see blood on the streets and bank runs is because the people can't. (Reuters:Chinese who lost money in bank fraud detained for months after protest - remember that having been in prison makes it very difficult to get and keep gainful employment within "the system", and basically guarantees you're financially destroyed for life.)
These cars are going to be belly up before they hardly roll off the lot. The first waves of buyers will be very enthusiastic and then the reviews will come in, and I very much doubt there will be much demand for a second wave.
I don't think this is actually true. Chinese EVs are cheap because Chinese car manufacturers have been working on EVs for 20 years+ and have built vertically integrated supply chains (super...
These were made as cheaply and as quickly as possible, by factories that know the goal is to dump them in other countries to trade for a cash strapped China.
I don't think this is actually true. Chinese EVs are cheap because Chinese car manufacturers have been working on EVs for 20 years+ and have built vertically integrated supply chains (super important because instead of buying components from someone who sells with a 10% profit margin you can buy at cost) during which time European producers have stuck their heads in the sand and refused to invest. Of course low wages and cheap capital plays into it too, but none of those would imply low quality.
Were I a cynical person I would say this is kind of a last ditch defence from embattled Europeans who are upset that they are far behind the US and China when it comes to technology and manufacturing.
As the article points out, Chinese EV's are also cheap in large part because they are heavily subsidized by the Chinese government. That's why they're applying tariffs. It's not because they can't...
As the article points out, Chinese EV's are also cheap in large part because they are heavily subsidized by the Chinese government. That's why they're applying tariffs. It's not because they can't compete in a free market, it's because China doesn't represent free market competition.
The government subsidies mean that the Chinese companies aren't taking on risk like their European and American competitors, nor are they as dependent on profit from sales. A Chinese EV could be sold at a loss and the company still be getting net profit thanks to the subsidies from China. Tariffs in cases like this are intended to restore the balance and protect free market competition.
The problem is what qualifies as a subsidy is not clear. For example having lower labour costs, or cheaper land or lower cost of capital could be seen as a subsidy but most people wouldn't...
The problem is what qualifies as a subsidy is not clear. For example having lower labour costs, or cheaper land or lower cost of capital could be seen as a subsidy but most people wouldn't intuitively think these qualify as "subsidy". Of course the Chinese government supports its producers, but so does the EU in several areas (e.g. farming, Airbus) and the US does as well.
The EU has terrible industrial strategy but this is best fixed by adopting a better one, rather than trying to punish those who've got their act together.
Will agree with you that EU and basically the entire world had been happy to have their heads in the sand for the last 20 years. During the pandemic Canada suddenly discovered it couldn't even...
Will agree with you that EU and basically the entire world had been happy to have their heads in the sand for the last 20 years. During the pandemic Canada suddenly discovered it couldn't even make masks, nor any of the medical stuff we need. Cars is just one of the myriad of things China can make better than the rest of the world because they've been the only ones making darn near anything.
China HAS the capabilities to make the world's best medium and low tech everything because they've been doing it for the world's best companies for years.
But do they always put in that level of effort?
We will see. Out of curiosity I looked up a Top Gear review of the BYD Dolphin: many good things, should be fine for most city undemanding drivers like me. But also,
The Dolphin seems to want to trade handling for ride, but the execution is poor. The dampers are supple, which helps comfort at low speed. But that lets it heave and float on an undulating surface, exaggerating your steering woes. Passengers might not care for it either, because it's a nauseous motion. But it'll at least deal with urban potholes and lumps without punishing you. [...]
The Dolphin, like its natural namesake, is always whistling, tooting and making some sort of noise. The driver assistance systems are incredibly intrusive, maddeningly hard to switch off and not entirely gone when you do. We kept finding ourselves interrogating the screens trying to divine the source of one of several electronic warning hoots. It felt more perilous than a lack of interruption. Then there's the motorway wind noise. Not awful, but just another thing for the 'could do with improvement' laundry list.
I have no doubt they will be popular. But we will see if they continue to be popular. I think there's a reason why Toyota's have such a robust used market and continue to have fans come back and buy new, whereas some other brands don't have that kind of longer standing reputation. They probably all contain a ton of Chinese parts, but there'll be a difference. Highly prejudicial for sure on my part, but we will see.
I wish that I had the same confidence. BYD is integrated in such a way that it's impossible for many other companies to compete cost-wise, and despite potential longterm growth problems that many...
I wish that I had the same confidence. BYD is integrated in such a way that it's impossible for many other companies to compete cost-wise, and despite potential longterm growth problems that many would say are inherent in a communist society. China isn't the Soviet Union, and there are plenty of success stories where innovative Chinese businesses have made a serious dent internationally.
That, and don't forget the minerals ownership game they're playing.
Mirror, for those hit by the paywall:
https://archive.is/jJlUN
So that's their solution to a problem that will do " clearly foreseeable and imminent injury to EU industry”? A "not prohibitively high" tarrif?
It's a combo of the allure of cheap EVs and fear of retaliation. This is going to blow up in their collective faces for decades to come.
On one hand, absolutely it will. On the other, it's top of mind for businesses all over the world that China's vertically integrated EV market will dominate all others with cheap, reliable vehicles, and that competing would be incredibly difficult.
It's a slimy move, both on the part of the US and Europe, but I don't think it's a terrible one.
Hahahahahahaha!! Well :D I'm not that worried about Chinese EVs for the long game.
The dumping is worrying. What it will do for x-China manufacturing world wide, what it will do for investments and infrastructure and trade will have far reaching consequences for sure. This is a serious threat world wide if a manufacturing power house can just borrow out of thin air and turn around to dump goods to materialize into cash.
But I'm not worried about each wave of actual physical wheels on the ground being a problem for other manufacturers. These were made as cheaply and as quickly as possible, by factories that know the goal is to dump them in other countries to trade for a cash strapped China. They're post debt balloon popping already. They've gone past collapse of their building craze. The only reason we don't see blood on the streets and bank runs is because the people can't. (Reuters:Chinese who lost money in bank fraud detained for months after protest - remember that having been in prison makes it very difficult to get and keep gainful employment within "the system", and basically guarantees you're financially destroyed for life.)
These cars are going to be belly up before they hardly roll off the lot. The first waves of buyers will be very enthusiastic and then the reviews will come in, and I very much doubt there will be much demand for a second wave.
I don't think this is actually true. Chinese EVs are cheap because Chinese car manufacturers have been working on EVs for 20 years+ and have built vertically integrated supply chains (super important because instead of buying components from someone who sells with a 10% profit margin you can buy at cost) during which time European producers have stuck their heads in the sand and refused to invest. Of course low wages and cheap capital plays into it too, but none of those would imply low quality.
Were I a cynical person I would say this is kind of a last ditch defence from embattled Europeans who are upset that they are far behind the US and China when it comes to technology and manufacturing.
As the article points out, Chinese EV's are also cheap in large part because they are heavily subsidized by the Chinese government. That's why they're applying tariffs. It's not because they can't compete in a free market, it's because China doesn't represent free market competition.
The government subsidies mean that the Chinese companies aren't taking on risk like their European and American competitors, nor are they as dependent on profit from sales. A Chinese EV could be sold at a loss and the company still be getting net profit thanks to the subsidies from China. Tariffs in cases like this are intended to restore the balance and protect free market competition.
The problem is what qualifies as a subsidy is not clear. For example having lower labour costs, or cheaper land or lower cost of capital could be seen as a subsidy but most people wouldn't intuitively think these qualify as "subsidy". Of course the Chinese government supports its producers, but so does the EU in several areas (e.g. farming, Airbus) and the US does as well.
The EU has terrible industrial strategy but this is best fixed by adopting a better one, rather than trying to punish those who've got their act together.
Will agree with you that EU and basically the entire world had been happy to have their heads in the sand for the last 20 years. During the pandemic Canada suddenly discovered it couldn't even make masks, nor any of the medical stuff we need. Cars is just one of the myriad of things China can make better than the rest of the world because they've been the only ones making darn near anything.
China HAS the capabilities to make the world's best medium and low tech everything because they've been doing it for the world's best companies for years.
But do they always put in that level of effort?
We will see. Out of curiosity I looked up a Top Gear review of the BYD Dolphin: many good things, should be fine for most city undemanding drivers like me. But also,
I have no doubt they will be popular. But we will see if they continue to be popular. I think there's a reason why Toyota's have such a robust used market and continue to have fans come back and buy new, whereas some other brands don't have that kind of longer standing reputation. They probably all contain a ton of Chinese parts, but there'll be a difference. Highly prejudicial for sure on my part, but we will see.
I wish that I had the same confidence. BYD is integrated in such a way that it's impossible for many other companies to compete cost-wise, and despite potential longterm growth problems that many would say are inherent in a communist society. China isn't the Soviet Union, and there are plenty of success stories where innovative Chinese businesses have made a serious dent internationally.
That, and don't forget the minerals ownership game they're playing.