Comment by ChumpGPT
2 months ago
US/German manufacturers just do assembly, they don't manufacture parts, so they only need assembly plants. BYD is a vertically integrated manufacturer. They make everything in-house which helps drive down costs. This huge footprint results in having all those different manufacturing lines under one roof. They depend on no one for finished parts, the only supply chain is raw materials.
I believe outsourcing can be a symptom of not innovating anymore.
Imagine having to contract out every prototype to a metal working shop — it slows down your ability to iterate because you can’t just go downstairs and try it.
But once you have a design set in stone, outsourcing is cheaper than doing it in-house. These companies specialize in producing parts with economies of scale.
But if you do it for too long, you kind of lose the ability to quickly iterate. Striking a balance is hard.
> But once you have a design set in stone, outsourcing is cheaper than doing it in-house. These companies specialize in producing parts with economies of scale.
Except you need to ship the parts to your factory and still employ QA people who must check whether you got what you paid for.. If the supplier has a bad defect ratio, you must order more parts. It's not as cut-and-dry as you think.
Every time your assembly-line halts, you're paying people for twiddling their thumbs. The more external suppliers you have, the higher the risk.
Don't the fines for halting a line cover the cost of the halt for the manufacturer?
I'm currently working at a supplier for some companies in mostly the automotive sector and the line halt fines per second seem to all be in the couple grand range so I always assumed it should be enough to cover the halt.
Though the QA part is real. There's so much theatre in tricking clients into believing their QA measurements are wrong when something happens it's kinda funny.
I think its a symptom of economies of scale being able to go too far. Cost per unit seems to keep going down basically infinitely and it is a problem.
Making less than 10,000 of anything just doesn't seem to make economic sense unless you assume there is a chance no one will want any of them.
Except when you've been working with suppliers who have already been iterating on <insert widget> for years in a competitive environment.
The amount of innovation in the automobile industry is staggering when you think of its history more holistically.
People are waking up, and to be fair, Tesla really led the way in the US for the last few years because they had no choice(no one would take them seriously). The question is can the West turn the ship around before its too late?
Depends if we keep the CHIPS act and the IRA. https://www.atlanticcouncil.org/blogs/econographics/the-ira-...
And immigration. China will have severe demographic issues in 10-20 years, but the West doesn't have to because everyone wants to come here, and we still have a culture accepting of immigrants. This century we could have China's working age population halve while America's population grows to 500 million or more. America will win in this scenario, and China will fall off like Japan fell off.
IMO the US really needs to do some house cleaning before anything real gets done. You can't expect the hand to cut itself out. I'm not sure if Trump could do that, TBH. He didn't have a lot of support in Military-Intelligence.
too many people on the entire political spectrum think that the government exists to create/artificially protect jobs instead of doing government things
too late for what??
too late relative to what?
too late to dominate in the industry of electric vehicles and thus, control/own large % of the wealth generated.
When Trump ups everything from China by 100% I guess US would be able to make something with profit?
I doubt it. It's much easier to either launder or manufacture the goods in a third country, that benefits from most of the same incentives that made Chinese manufacturing go through the roof.
Americans will be buying Chinese goods with "made in Vietnam" or "made in Mexico" stamped on it. The American profit will be in setting up those laundering schemes
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It doesn't matter much if your shitbox is made in US or made in China when it cost 50k and nobody has the money for it
Vietnam and Mexico will massively profit.
With what workers?
Basically everyone is already employed.
That is not remotely how tariffs work.
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Not entirely correct. Boeing, despite all the bad press, actually reversed course on this recently. 787's wing was made by a supplier, but 777X's wing is actually built in-house, right next to the main factory, starting from carbon fiber fabric.
How much can Boeing do this though? My understanding is in the past they used moving some of their production to a country as leverage to win contracts. They are a company that moved their headquarters to DC because management treats the product as secondary as if they make widgets. Until they reverse that they aren't moving in the right direction.
Wasn’t always that way. Ford’s River Rouge plant took iron ore in one end, and rolled automobiles out the other end.
Don't forget USA auto companies also outsource their design work, CAD, etc. My understanding is that TATA used to have a whole floor at Chrysler.
So the factory accepts iron ore, crude oil, coal, lithium ore, bauxite, monazite, copper ores, rubber, and soy beans at one end and spits out finished cars at the other?
They don't even outsource their nylon zip ties?
the only supply chain is raw materials
Citation needed, this seems exaggerated. Eg. I'm sure they use IC's and I'd be very surprised if the facility includes a fab.
They, BYD, have their own semiconductor R&D and manufacturing subsidiary called BYD semiconductor.
EDIT: Seems like it is a division, so not a spin-off.
Just like Ford used to do.
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