Now, I'm skeptical that, after all the US safety regulations are met, that it could still be made for $4,000, but the utter manufacturing advantage of paying Chinese workers in Chinese factories local wages is not to be underestimated.
$1000 in tariffs can pay an American factory worker’s total compensation for something like 15-20 hours.
The Suzuki Samurai’s cult following is irrelevant to this discussion, which is about vehicles that will sell in high quantities in the United States. You might as well tell me that Disney should start making biopics about famous computer scientists instead of their next Marvel movie.
I am talking about the cars that are the bread and butter of the business of the global automakers.
Also, if your “disrupt the industry” plan is to sell cheap stuff, you’re basically dooming yourself to have the lowest margins. A $5,000 car can only make $5,000. So you sell 10 shit boxes and Ford sells one F-150 and makes the same amount of money but on a higher profit margin because they only had to make one vehicle.
And again, the US market has spoken on cheap shitty vehicles. City cars struggle to survive and most have exited the market.
Ask all your family and friends what they think about their next car being a Nissan Versa or Chevy Spark with no options. How many of them drive something nicer and larger?
I would be highly surprised if the raw ingredients for any car would be more then 4k, but that's also not a very useful metric.. i guess a cpu Would be a few cents
The US automotive market plays a completely different game than the rest of the world, with a bunch of protections and quirks that have a great potential to stifle a disruptive innovator.
First: the products themselves are regionally unique. The #1 selling vehicle in the US is the F-150, a truck that is a completely insane purchase for most of the rest of the world’s population. Japan may have disrupted the US market, but many of their vehicles they sell in big volumes are designed in America built in America sold primarily to Americans. BYD can’t sell the Qin Plus in America, they need to sell something more like the Rivian R1T. That means BYD needs a US factory to avoid the chicken tax…
Second: The US already shows high willingness to “chicken tax” EVs. All the vehicles that qualify for the EV tax credit are Ford, GM, and Tesla vehicles with high domestic part counts. The government can play this game until the cows come home giving the big 3 ample time to catch up.
So we’ve established that if you’re selling big volumes in America, you are producing cars in US factories. In that regard, China has a weak record of success. If they want to sell trucks in America they’ll probably have to have a UAW factory. The documentary “American Factory” comes to mind for me.
At best, this means that China won’t get the typical labor cost advantage that their entire export economy thrives on. What is their competitive advantage at that point?
Third: the dealer network. Operating in the US means dealing with independent dealerships often enshrined by law. Tesla had to fight an improbable battle to get to the scale it is now without independent dealerships.
Fourth: the incumbents have good tech and are high volume producers in their own right. BYD is big. You know who is bigger? Volkswagen. Toyota. GM. Ford. Even Tesla is bigger by global revenue. 17 other global automotive companies pull in more revenue than BYD, and 9 pull in more revenue than SAIC.
By the way, the “$5,000 used car killer” has been a legend for decades and will never happen in developed markets with strong safety regulations and demanding living standards. Americans literally do not buy city cars, new or used. Get back to me when the Cherry QQ more closely resembles the Ford Maverick.