Mercedes thought themselves to be untouchable due to it being a premium brand with high margins by putting a star on commodity parts, like they're a Swiss watch.
Same impact as in fashion. Louis Vuitton can try and persuade us that they remain the choice of the world's wealthiest explorers, but when every two bit junior associate realtor is sporting an LV purse, I am not so sure.
Both brands fell for the growth at all costs mantra.
China never managed to catch up to other countries in terms of making combustion engines (it is incredibly hard, and from what I grok they were a generation or two behind), but EVs are mechanically much simpler.
What's more, BYD is following Tesla's playbook of vertical integration and making components inhouse to save money vs outsourcing everything.
But honestly whoever gets 2x the density at the same cost will win, and it may be that incumbent advantages don't end up meaning much. AFAIK China's advantage isn't in much cheaper batteries, it is in cost savings everywhere else in making EVs.
For example, VW released a $60k USD EV minivan with mediocre range, and they thought that was a good idea. That sort of acceptance of mediocrity is why traditional automakers are going to get hammered into the ground, except instead of Japanese automakers teaching the lesson, this time it will be Chinese automakers. (Irony: At one point it was VW who helped teach American automakers the same lesson....)
Revolutions like that don't happen on a given Tuesday. They ramp up over a decade or more. Would you notice that?
Would you notice if a faraway country passed a tipping point? https://www.reuters.com/business/autos-transportation/chinas...
Would you notice if a US state's electricity grid was transforming? https://www.nytimes.com/interactive/2024/05/07/climate/batte...
I don't see how it's possible to stop China, even if rich western countries band together.
Flooding foreign markets with your heavily-subsidized cars in order to kill your competition is great for you, but not so great for competitors in the market of sale.
The subsidies are more interesting. When does legitimate assistance become a subsidy? Eg if Biden/successor invests in domestic lithium mines, is that a subsidy? If they offer buyers $x rebates, is that?
Looking at the last example, if BYD said to a US buyer, "this car is $x but we'll give you a rebate", that would seem to be just as fair as Uncle Sam offering one. The objection would seem to be that it was the Chinese government acting as the source of cash.
I suggest that the answer is that noone should offer direct purchase subsidies, but government can offer whatever investment they like to support their industries. I cant escape a feeling that the US and European car industry are crying foul because (despite Musk's attempts to drag them into the future) they havent figured out how to make electric vehicles profitably.
How does a rich, car-exporting country convince a less rich and car-importing country to not buy that inexpensive car from China and instead buy a more expensive one? Tariffs can't address this issue.
Imagine how much better off Ukraine would be if it had had car factories it could have turned into tank factories.
or this in 1979: https://www.investopedia.com/articles/economics/chrysler-bai...
Then we should provide more government subsidies to US automakers for making EVs. The good in having more people driving cars that are more energy efficient and use cleaner energy would outweigh the costs of the subsidies.
Food scales even more than cars, and as a result has about the lowest margin of anything people buy.
If people bought jumbo jets like they bought food we could take several zeros off the price (but this would still be more $$$ than anyone can afford even if they wanted one so it would be stupid to try to scale up jet manufacturing that much)