Comment by mdorazio
2 months ago
The 100% tariffs are already in place under the Biden administration. Trump only needs to prevent a Mexico manufacturing loophole.
However, BYD still has the entire rest of the world to sell to. They will be fine.
2 months ago
The 100% tariffs are already in place under the Biden administration. Trump only needs to prevent a Mexico manufacturing loophole.
However, BYD still has the entire rest of the world to sell to. They will be fine.
Yes, BYD will be fine.
And they know this is --- hence they are doubling the size of their already massive factory.
Guess who won't be fine? US auto manufacturers. They won't be able to compete anywhere other than the USA. And China loves it.
The US government bailed out GM under Obama. Do you know what GM did this month? They spent billions on stock buybacks and millions on bonuses while firing a ton of people. F'em. They aren't a car company, they are a stock company that happens to make cars, a route most large American companies seem to be taking (see also Boeing, whose management cares so much about/is detached from their product that they relocated their management away from the business and to Washington DC).
China is a 30 million a year car market and up until 2 years ago,GM used to sell more cars in China than in the US . It was an incredible cash cow .
2 replies →
US auto makers have been on the ropes since the 1980s. My hypothesis is that their heyday was 50s and 60s “greaser” culture and they kinda got their heads stuck in that era. “Golden ages” are incredibly dangerous.
When people started wanting just practical small reliable affordable cars as the price of gas increased and cars became just an appliance they didn’t respond to that market and the Japanese did. It’s been either sideways or downhill since. The only thing keeping them alive now is unnecessarily large status symbol trucks and that is a limited market that will be trashed if oil spikes again. There’s got to be a limit somewhere to how much people will pay to show off or own the libs or whatever motivates one to buy an F-5000 Super Chungus.
They are still mostly missing the EV boat. First Tesla caught them asleep and now China. Culturally they still are not crazy about EVs because they do not go vroom vroom.
Trump might string them along a bit longer with protectionism and a pull back on EVs to push more vroom vroom but meanwhile BYD will eat the entire world.
> US auto makers have been on the ropes since the 1980s.
Without a doubt.
In about 2000 the US automakers sued the EPA because their proposed clean air regulations for about 2009 were "impossible".
They were actually more lax than what Japanese automakers were already selling cars for in the year 2000.
So the automakers sued the US government to admit that in 2009 they couldn't build cars that were as clean as cars Japan was already making in 2000. That says a lot.
3 replies →
Their downfall was earlier than that. Post WW2 everyone was looking to buy a new car (people kept their old one during the war because production was going to the war effort). The car companies had such demand they moved to a 'car salesman' sales structure to milk every customer as much as possible because demand was so much higher than production. They got hooked on the easy money and entrenched a lot of bad business practices/policies as a result.
GM for all intents and purposes died (remember we funded a whole new GM, a completely new business entity, during the 2008 financial crisis timeframe) and yet new GM just 'invested' 6 billion dollars in stock buybacks, millions in management bonuses while conducting employee layoffs. But they will have no problem coming and asking the government for billions 'to remain competitive' soon. F'm.
2 replies →
I think there’s a little bit more to the golden age story.
The “malaise era” started in the early 70s as a perfect storm of fuel economy restrictions and more widespread US economic woes. This lead to decades of low quality cars being made.
US automakers not only lost out on consumers looking for simple appliances to drive, but ALSO the enthusiasts that liked driving and cars. The car guys that came of age in this era have two choices: chase after the same American muscle cars your dad liked, or switch over to imported hot hatches and the JDM tuner scene
3 replies →
The US consumer does not buy small new cars.
4 replies →
> Guess who won't be fine? US auto manufacturers.
The US is trying to do industrial policy (like now in China, and previously in Korea, Japan, and Taiwan, and in Germany before that), but without the key aspect -- export discipline -- that makes industrial policy work. I'm thinking about Joe Studwell's How Asia Works. Everything I'm seeing in the US reminds me more of the failures in Indonesia and India than of the successes in Japan and Korea. With the exceptions of -- "say what you will about Elon, but" -- Tesla and SpaceX. Bidenonics will take time to bear fruit, though, and could yet yield some successes.
Point is, using tariffs to protect "infant industry" is the opposite of export discipline.
(As a side note, most of those countries also had major land reform, whereas property rights -- sorry, "rule of law" -- are pretty sacred in the US )
Brazil, Turkey, Indonesia and many other countries turned sour on importing chinese EVs in favour of some kind of protectionism. Most developing countries dont have the infrastucture for EVs. Europe hit BYD with a 17 % tariff (10% being the standard)
BYD has factories in Brazil: https://valorinternational.globo.com/business/news/2024/09/0... https://en.byd.com/news/byd-company-announces-first-factory-...
why does that matter?! :)
1 reply →