The $25k car is going extinct?

But it’s well below the minimum sustainable level due to Chinese government subsidies.

Wait until you hear about US federal and state automaker subsidies!

And that's a bad thing?

A country's government sees an opportunity to invest into a promising new technology that could reap tremendous economic benefits. Such benefits include new jobs, new income, the ability to increase social/political capital worldwide, and help usher in a world that is that much less reliant on oil.

That's what countries in the first world are supposed to do.

Can you provide some information on this, please?

State level tax subsidies.

Federal, things like a the chicken tax which imposes import taxes in categories like small trucks.

Easy top of mind ones.

China historically does it in a way where they orchestrate cartel like behavior and will dump inventory on the market at low prices to kill off international competition. Some of it is altruistic but not all of it.

When we say Chinese government subsides, we are not talking about tax reductions or interest free business loans, we are talking about the Chinese government itself operating the business and selling the products at a steep loss in order to undercut and wipe out incumbent global competition in the world market so that China becomes the primary worldwide supplier of those particular goods.

This has already happened to consumer electronics, power tools, manufacturing equipment, solar panels, and batteries.

The strategy is especially effective on products with a high startup cost in markets that have to deal with high amounts of regulation and labor unions because being government-owned means you get to skip all that. There's no reason to expect that cars won't be next.

Well, it’s a bad thing for countries whose economies include manufacturing and aren’t China, sure. The obvious threat is that they will do what they did with manufacturing capacity and just kill the industry in other places.

Do we want to get to a point where every industry is completely run by whichever country is willing to throw the most money at it?

The former doesn’t exist in any meaningful sense and the latter is not a subsidy, it’s a tariff. It doesn’t make American cars cheaper elsewhere, it makes foreign cars more expensive here.

Other nations aren’t at risk of losing their auto industries domestically because of either.

That's the geopolitical advantage of being the world's manufacturing hub.

Foresight is required when dealing with such entities, not hindsight.

If my electric car comes in at 1/4th the price of an American built one, so be it. The tradeoff here is that in countries that aren't engulfed by rent-seeking capitalists who only answer to themselves, countries like China have a policy goal and will make sure the state utilizes the private sector to meet the goal.

For example, Mr. Musk could easily take some of that $450 billion net worth of his and make his cars considerably cheaper. He has taken enormous subsidies and kept his cars expensive. In China, the state would not let someone with that amount of capital take subsidies, and most certainly wouldn't allow them to bribe the government with the government's money.

> When we say Chinese government subsides, we are not talking about tax reductions or interest free business loans, we are talking about the Chinese government itself operating the business and selling the products at a steep loss in order to undercut and wipe out incumbent global competition in the world market so that China becomes the primary worldwide supplier of those particular goods.

Where did you get that information? There were previous investigations by the EU Commission about Chinese government subsides, and "tax reductions or interest-free business loans" were the main allegations.

We've done similar things when it comes to military and military-adjacent technology.

If a government believes in the potential and promise of a given technology and wants to dominate in that sector, it should be allowed to. That's the premise of worldwide capitalism and markets. Capital is allocated to where the owners of said capital wish to allocate it to, and that's the free market at work.

Is it an unfair advantage? Define "fair".

>Do we want to get to a point where every industry is completely run by whichever country is willing to throw the most money at it?

The whole point of specialization of industry is that yes, we absolutely should be OK with that. If that's where China wants to specialize and deploy resources, let them.

Yeah, that’s the sort of thinking that gutted in the middle class in the western world over the last 40 years. And it also presupposes that once they succeed, they won’t then stop it, let prices increase, and move onto the next one until they own it all.

How is that different from funding US companies with VC money fueled by a propped-up market, driven by printing $2 trillion in debt a year and benefiting from being the world's reserve currency (USD recycling on the stock market etc)? The end game seems to be the same.

I'm not saying it's a good or a bad thing, and I completely understand the long-term ramifications. I've quite literally done biz with the CCP.

However, we've chased cost-cutting measure after cost-cutting measure in order to please the shareholder class at the expense of the working class, and this is the result. We shouldn't be surprised.

Kind of a strange take. I think your thoughts derailed after the first sentence. Advantage? I guess but it’s also cartel like behavior that the rest of the world mostly avoids hence when selective tariffs are often put on China in those areas.

Tariff is lot a subsidy! lol

Tariffs on trucks ensured that there is a substantial number of manufacturers here in the US.

So, can you provide any info on the subsidies?

You’re right, tariffs aren’t subsidies. They just function like one by kneecapping foreign competition so domestic automakers can overcharge with a straight face.

Actual subsidies? -Federal: ATVM loans (e.g., Tesla, Ford), $7.5K EV tax credits.

-State: Georgia gave Rivian $1.5B. Tennessee handed VW ~$500M. Michigan’s tossed cash at GM like it’s confetti.

So yeah, no subsidies at all, just billions in “non-subsidy” market distortion to keep the hometown heroes afloat.

So, can you provide any substance to the conversation?

The former does exist in a meaningful sense unless you want to provide evidence to the contrary? Lots of opinion zero facts.

Hardly a strange take IMO.

We've (the west) effectively encouraged this sort of behavior. OUTSOURCE IT ALL TO CHINA! Our corporations and shareholders have most certainly reaped the benefits from this. Our politicians have made a lot of money this way, too. Lots of people have deliberately turned a blind eye to this sort of behavior and didn't think about the long term ramifications of pushing everything to be built in China.

Call it cartel like behavior, fine.

China is merely playing the hand it has been dealt and looking out for itself and the survival of its economy and political apparatus. Trade is one way to do so, another is technological progress.

We've subsidized capitalists taking the risk to develop this tech. China has bypassed the ownership class and gone straight to the manufacturers. Some of those capitalists have enriched themselves when they should have passed those costs off to make their products cheaper to stay competitive - that's the whole point of subsidies. Instead, one of those capitalists chose to instead take the subsidies, keep his cars expensive, and make himself the wealthiest person on earth.

Don't hate the player, hate the game.

You’re not wrong about Western complicity, but let’s not pretend that “playing the hand you’re dealt” means “forming state-guided monopolies and dumping at a loss to wipe out global competitors.” That’s not just survival, that’s industrial warfare with Chinese characteristics.

And yeah, we subsidized Musk, dumb move but the answer isn’t to copy a system where the state decides who wins, loses, and what the price tag is. That’s not market efficiency, it’s command capitalism with a smile.

Don’t hate the game? Buddy, the game is rigged. China just rigged it better.

No, you asked if it was a bad thing and I explained why yes, it is very much a bad thing for some people. Allowing it to continue will cost a lot of people good jobs here.

No evidence was provided for the assertion to begin with, why must the contrary provide evidence but not the base assertion? You provided an opinion with no facts and then criticized me for doing the same.

But the evidence is other countries aren’t complaining that Ohio offering tax credits to get a a Ford plant to go there instead of Pennsylvania is gutting their automotive industry. Which is exactly the issue we’re discussing.

Any such tax credits are simply American states competing against other American states, and have little to no ramification on the overall cost of an automobile, even domestically, let alone globally.

Meanwhile, China is doing loads of very well documented things that would make the automotive industry impossible for anyone outside of China if not for protectionist policies. Many other countries (basically any that make automobiles) are instituting tariffs as a result.

An example is the section 179 tax break for cars over 6000 pounds - the one your roofing contractor used for her F250 or your real estate agent used for his Suburban.

I am the original person already claiming that China plays games. Amazing how threads twist.

Fair enough—China’s not losing sleep over whether Ford picks Ohio or Pennsylvania. But that doesn’t change the fact that state-level tax breaks are still subsidies. Public money influencing private decisions is the definition, whether it’s across borders or state lines.

And just to be clear, I never said they were globally material—you did. I asked for evidence on your claim that they don’t exist in any meaningful sense and leave an equally unbacked claim as you did. Funny how that upsets you so much.

And we've been completely okay with that, as long as it's not the Chinese government doing it. Jeffrey can do it, Elon can do it, Warren can do it, George/Barack/Donald/Joseph/Donald can do it, but woe betide us if Xi does it!

America has been doing the same thing, but in the Internet tech sector rather than physical manufacturing. Is that bad too?