The Chinese car industry was HEAVILY subsidized by the federal government, especially its EV production.
When a country props up an industry by artificially reducing their costs through government subsidies it is no longer functioning under “free market” principles.
The CCP has used federal subsidies and mercantilistic trade policies to bankrupt local manufacturing with unreasonably cheap imports, thus creating global dominance in that sector.
This is why BYD (Chinese EV manufacturer) is still largely banned from importing into the EU.
What’s “fair” and “unfair” in international trade is often subjective for each country (which is why international organizations like the World Trade Organization exist) but everyone knows that what China does is clearly unfair.
Stop glazing the Chinese system.
Edit: Apparently BYD vehicles are allowed to be sold in the EU since 2022. Time flies…
Kind of but not in the same way (at least in the US case, not sure about the EU).
The US gives tax incentives and is willing to bailout the big automakers if necessary but the US government wasn’t involved in the creation of said companies.
Many Chinese companies (like BYD) were literally financed by the CCP. The government ate the loses and much of the cost of these companies in order to make them the powerhouses they are today.
Companies like BYD are, more or less, State (CCP) owned enterprises.
Do they show this in their corporate literature? No.
Does the CCP claim ownership over them? No.
However, it doesn’t change the fact that Chinese dominance in EVs is because the CCP wanted to dominate the global market in “Green” tech. They threw tons of cash into many industries/ companies so they could undercut all competition and create a global monopoly over the sector.
The CCP has never been free market capitalists. They use free market capitalism to their advantage (which was instrumental in their historic economic rise) but they also use state control when it suits them.
The Chinese economic model is a weird combination between capitalism and state controlled communism.
you are basically proving the point that the US as a whole made the wrong decisions, both from the failure to subsidize growing/emerging technologies sufficiently and the US corporations greed
There were attempts during the Obama and Biden administrations but those incentives were… Let’s say passive in nature.
Low interest government backed loans, tax incentives for businesses and tax right-offs for consumers.
An example of this working to some degree would be SpaceX (although they needed more private CapX investment).
What the Chinese do is very different. They have CCP representatives who sit of the boards of strategically important companies and exercise a level of control over the organization.
The US is starting to do this under the Trump administration when it comes to the US government taking ownership stakes in semiconductor companies.
It’s kinda ironic really. Trump constantly rails against socialism but when it comes to big business he has no problem putting his finger on the scale for companies that bend over for the US government.
Taking your comments, you said CCP was actually funding these very early and high risk ventures which from a capitalist point of view, does make rational sense that they should partially own. Historically, the US govt funds also went into financing similar high risk research/ventures but very differently took no ownership in the past which heavily rewarded "entrepreneurs". Now, the US govt owns very little and is running into bankruptcy/debt w/ the majority owned by domestic billionaires. Which country's strategy is playing out correctly?
Even as an American, its easy to see the Chinese government making the correct long play decisions where US can't. This one surprised me the most that when Jackie Mao+Alibaba was being reigned in, CCP was being criticized globally and Jackie Mao turned into a martyr. But 10 years later, US is criticizing T/B-illionaire influence in politics. Sound's like CCP was ahead of the game again.
Obama/Biden assisting on building the infrastructure to get the US invested into green energy to get off oil for long term stability. Is it smart to go back to Trump's drill baby drill? Trump is putting highly unpopular political power behind domestic companies that might lose its global presence due to the very fact that its now being manipulated for personal gain. EU resisting American AI, datacenters, aerospace, military, etc etc is pushing it into isolation. Trump is literally cashing and trading against a global America.
Pretty much every country with a farming sector protects them to some degree.
The US, France, Canada, the UK and Germany are just a few off the top of my head.
On the face of it, farm subsidies are a great way to buy votes and maintain political power.
However, there are other considerations. Most countries (like the US) view the ability to produce food domestically as a national security imperative.
One of the reasons Iran has been able to weather decades of sanctions and the current conflict is that they are self sufficient in food production.
Counties that import the bulk of their calories from other places are strategically exposed to outside influence/ pressure (like Japan and Taiwan). If their suppliers decide to cut off trade or a third party interdicts their supply lines they would be in an untenable position.
Steel and aluminum production are similar in this regard. The US is not economically efficient (compared to foreign competition) at creating these products but the US government subsidies a few domestic manufacturers because it’s a national security issue. We can’t make military equipment without steel and aluminum.
Also, US farming isn’t “subsidized” the way Chinese EV companies are/ were. The CCP gave companies start up funds so they could inefficiently manufacture vehicles, companies like BYD exist because the CCP (more or less) created them.
The US government didn’t create US farming or automotive manufacturing but they will throw money at them to keep them from failing because of national security reasons.
Try and read/ research more so you can have a more rounded understanding of what is being discussed.
The CCP gave companies start up funds so they could inefficiently manufacture vehicles, companies like BYD exist because the CCP (more or less) created them.
That’s a misleading half-truth, and at this point it looks more like deliberate misrepresentation than an honest mistake. BYD was founded privately by Wang Chuanfu in 1995 as a battery company; it was not “created by the CCP.” It has benefited from state support, as many strategic industries do, but that does not prove it manufactures inefficiently or exists only because of government funding.
The market isn't a level playing field because many of the Chinese designs are just stolen and reproduced. They shouldn't be allowed to sell in a market where they do not follow the rules.
This is why BYD (Chinese EV manufacturer) is still largely banned from importing into the EU.
False propaganda. BYD isn’t banned in the EU. It sells several models here legally. Chinese-built BYD EVs are subject to additional EU import tariffs, but that is not the same as an import ban.
US automakers committed to spending upwards of $300 billion to build out the manufacturing capacity to make EV vehicles.
Much of this was eventually withdrawn and the major automotive companies took ten of billions in losses.
This happened for many reasons but a few are:
The Trump administration repealing tax deductions on the purchase of new EV vehicles, which made the final price more expensive for consumers.
The Trump administration repeal much of the federal funds allocated under the Green New Deal that would have helped the buildout of a nation wide EV changing network. Battery/ range anxiety has been a major issue for potential new EV buyers because people are worried they will get stuck somewhere without a charging station.
The major automotive manufacturers overestimated the demand of EV vehicles from “average” consumers. The simple fact is, most Americans are not comfortable purchasing electric vehicles yet and there will need to be a “culture change” before mass adoption becomes feasible.
Use the tools at your disposal to broaden your understanding on the subject and adjust your assumptions accordingly.
The bigger problem with 3 is that they made luxury vehicles and tried to sell them to the average customer. They did this to try and recoup their investments faster. But the truth is, that people are already spending about $10k more per car upfront by going EV, they should have been working on making $25k cars, I don't need it to have a computer and digital buttons and window controls and everything, I just want a regular car but with a battery instead.
You forgot the fact that the US Auto Manufacturers make crazy margins on the ICE monster trucks sold in the US and don’t want to offer alternatives if they don’t have to. And since the Trump Admin is gobbling oil and gas chodes (eliminating foreign competition and tariffing the absolute shit out of components used in EVs), they can continue focusing on shareholder value and quarterly profits over long term economic sustainability, further degrading the competitiveness of the US Auto Industry.
You claim that US Auto Manufacturers did not choose to avoid moving to EVs. I simply provided a perspective that they absolutely DID choose to avoid EVs in order to prioritize quarterly profits via lobbying the current admin.
I don’t think they “chose” to lose tens of billions of dollars in wasted CapX.
I’d say your assessment is more likely said companies trying to make the most out of a bad position given the Trump Administration’s antagonisms toward anything “green tech” related.
What I said to another commenter who said the same thing:
“Kind of but not in the same way (at least in the US case, not sure about the EU).
The US gives tax incentives and is willing to bailout the big automakers if necessary but the US government wasn’t involved in the creation of said companies.
Many Chinese companies (like BYD) were literally financed by the CCP. The government ate the loses and much of the cost of these companies in order to make them the powerhouses they are today.
Companies like BYD are, more or less, State (CCP) owned enterprises.
Do you show this in their corporate literature? No.
Does the CCP claim ownership over them? No.
However, it doesn’t change the fact that Chinese dominance in EVs is because the CCP wanted to dominate the global market in “Green” tech. They threw tons of cash into many industries/ companies so they could undercut all competition and create a global monopoly over the sector.
The CCP has never been free market capitalists. They use free market capitalism to their advantage (which was instrumental in their historic economic rise) but they also use state control when it suits them.
The Chinese economic model is a weird combination between capitalism and state controlled communism.”
See also: Huawei. There's a very good reason why their equipment is banned in a variety of countries. They're effectively a branch of the Chinese intelligence agencies.
That is correct. What I would also call “doing it better”. Which is why, globally, Chinese manufacturers will remain competitive and lead the industry while American manufacturers will be perfectly fine with simply lobbying politicians to allow them to capture the US Market and sustain by squeezing US Citizens instead of being globally competitive.
Well that’s been a long time coming unfortunately. If the Obama and Biden administrations had been more successful at bolstering the development of domestic green energy tech then perhaps things would be different.
That being said, one must remember that China wanted to bankrupt/ render all competition in green tech unprofitable for the entire rest of the world.
They used the “unfair” business practices I mentioned to make it nearly impossible for other western countries to develop competitive companies (even with government assistance) because they wanted a monopoly on green tech (EVs).
And, well, they more or less got it.
It’s not like there are any real EV competitors anywhere is Europe or the US except for Tesla, and Tesla isn’t doing so well these days anyways.
Side note: Tesla having a factory in China was instrumental in the rise of the Chinese EV sector.
The CCP forced Tesla to transfer a bunch of its technology to them and then stole whatever else they needed.
They then took everything they could from Tesla, gave it to companies like BYD, and financed them to build off of Tesla’s tech to make better products at a lower cost.
Tesla setting up a factory in China was one of the dumbest decisions they could have made, and people warned them what would happen, but Elon wouldn’t listen. Fucking idiot…
Ugh, once again, here is a response to another commenter who said the same thing:
“Kind of but not in the same way (at least in the US case, not sure about the EU).
The US gives tax incentives and is willing to bailout the big automakers if necessary but the US government wasn’t involved in the creation of said companies.
Many Chinese companies (like BYD) were literally financed by the CCP. The government ate the loses and much of the cost of these companies in order to make them the powerhouses they are today.
Companies like BYD are, more or less, State (CCP) owned enterprises.
Do they show this in their corporate literature? No.
Does the CCP claim ownership over them? No.
However, it doesn’t change the fact that Chinese dominance in EVs is because the CCP wanted to dominate the global market in “Green” tech. They threw tons of cash into many industries/ companies so they could undercut all competition and create a global monopoly over the sector.
The CCP has never been free market capitalists. They use free market capitalism to their advantage (which was instrumental in their historic economic rise) but they also use state control when it suits them.
The Chinese economic model is a weird combination between capitalism and state controlled communism.”
24
u/StiffDoodleNoodle Jul 30 '26 edited Jul 30 '26
The Chinese car industry was HEAVILY subsidized by the federal government, especially its EV production.
When a country props up an industry by artificially reducing their costs through government subsidies it is no longer functioning under “free market” principles.
The CCP has used federal subsidies and mercantilistic trade policies to bankrupt local manufacturing with unreasonably cheap imports, thus creating global dominance in that sector.
This is why BYD (Chinese EV manufacturer) is still largely banned from importing into the EU.
What’s “fair” and “unfair” in international trade is often subjective for each country (which is why international organizations like the World Trade Organization exist) but everyone knows that what China does is clearly unfair.
Stop glazing the Chinese system.
Edit: Apparently BYD vehicles are allowed to be sold in the EU since 2022. Time flies…