The problem with Chinese EVs is that they show it’s possible to innovate, keep prices down, and mass produce.
It’s not only possible, it’s easy: you just need terrible labor and environmental standards, poor welfare, cheap access to raw materials, and tons of state subsidies :)
It’s interesting to note that “we” knew all along it would end like this but just couldn’t resist moving/outsourcing production to China nor investing in China’s fast-growing economy.
“We” were chasing short-term profits and China was playing the long game. Apparently, both parties won, each at their own game.
Stop making $70K SUVs and start making $20K Taurus and Escort EVs. You did it once. You can do it again.
The cost of batteries is (relatively) higher for cheap vehicles, so that’s the segment where it makes the most difference.
Western companies outsource much of their production to countries with cheaper labor, so the really important things here are cheap raw materials and state subsidies. Since the Chinese state owns many of the large companies there, they can reduce profits throughout the supply chain or move them to other companies in the form of these subsidies. As well as use that money to build transport and green energy infrastructure, further lowering manufacturing costs.
Investors always seek short-term profit, so playing the long game is something you need aggressive policies for.
It’s not only possible, it’s easy: you just need terrible labor and environmental standards, poor welfare, cheap access to raw materials, and tons of state subsidies :)
It’s interesting to note that “we” knew all along it would end like this but just couldn’t resist moving/outsourcing production to China nor investing in China’s fast-growing economy.
“We” were chasing short-term profits and China was playing the long game. Apparently, both parties won, each at their own game.
The cost of batteries is (relatively) higher for cheap vehicles, so that’s the segment where it makes the most difference.
Western companies outsource much of their production to countries with cheaper labor, so the really important things here are cheap raw materials and state subsidies. Since the Chinese state owns many of the large companies there, they can reduce profits throughout the supply chain or move them to other companies in the form of these subsidies. As well as use that money to build transport and green energy infrastructure, further lowering manufacturing costs.
Investors always seek short-term profit, so playing the long game is something you need aggressive policies for.