points by nneonneo 10 hours ago | 0 comments
From TFA:
Government subsidies in China — while 5 to 10 percent of Chinese automakers’ capital spending, estimated O’Donovan, compared to about 1.5 percent in Europe — are no longer the Chinese auto sector’s primary advantage. Chinese carmakers now enjoy deeper structural advantages from their enormous scale, dense supply chains, high factory utilization and automated production.
Several companies in China now tout their “dark factories” where they make or assemble many parts of their cars with no human labour at all. It’s likely that the larger Chinese companies are capable of undercutting European makers even without government subsidies or wage parity.[–] ericmay 9 hours ago
[–] Dylan16807 7 hours ago
Using subsidies to spring up an industry is a good thing. Over in the US we had plenty of big car makers that didn't need it, and their being lazy because they know they'll be protected is the worst of all worlds.
Domestic production is good but sometimes big companies need to taste failure. We should lower the level of protection they're getting, at least for a while.
There are a few other things to note here. First is time - so even if the subsidies which still exist and are rather significant (Imagine at like Google's scale if they're making $100bn/year and the government was paying them or subsidizing $10bn of that - that's a lot of $$$) matter less so now, they still were used to spring up the industry and many of these automakers which has downstream effects on viability of the company and in what has been widely reported as over-building of industrial capacity. Coupled with a declining Chinese market, no access to the American market, and soon to be little to no access to the European market China could build cars for $5 but if there are no buyers and they're not making a profit it doesn't matter. Plus China of course artificially devalues its currency to boost exports.
My point here isn't that China is bad or that Chinese automakers aren't or can't be great, but that there's a good reason we have protected our domestic markets and even if Chinese companies were eventually just the best, fastest, cheapest, most advanced in the world we would just protect our markets until we catch up because having a domestic industry and those jobs and the capability to produce wheeled vehicles is more important than having the cheapest possible EVs. Ergo that's why we have tariffs. Disagreeing with that direction is a failure of understanding. The policy is a must-have.
Other countries may not care or their people may not understand why we do what we do, but those countries aren't relevant players on the global stage and their industrial capacity if it ever existed doesn't matter. American industrial capacity, Chinese industrial capacity, and probably German, Japanese, Korea, and maybe a few other select countries are the only ones that matter in this regard.
The Atlantic ran a story a week or so ago which over-indexes a bit but I think is directionally accurate and is relevant here[1].
There are other interesting tidbits from the article, but you get the picture....[1] https://www.theatlantic.com/international/2026/10/chinese-co...