BYD's EV Dream May Be Legacy Automakers' Nightmare
spectrum.ieee.org
spectrum.ieee.org
Not to mention: BYD car sales are substantially subsidized as part of China's own push for energy independence. The prices you see in these articles are often Chinese market prices, translated to USD - they're mis-representative.
Don't get me wrong, they are going to give legacy carmakers stiff competition, but these headlines often gloss over critical details.
Are they really? The established narrative does not add up.
I keep hearing ‘China subsidised Steel, energy, batteries, solar’. At this point it’s easier to list things they don’t subsidise?
How is it possible that they subsidise everything and have a budget surplus, and we subsidise nothing and are in deficit?
I am not sure if this is a misunderstanding of economics or just anti-china PR campaign, but all of the above cannot be true.
I have also yet to see anything of substance that compares subsidies between the US, Europe and China.
All I know is that the VW ID.3 which starts at €40,000 here in Europe can be had as cheap as $16,000 in China.
The prices of new cars whether they are EV or ICE at least in Europe was been inflating well past inflation over the past 10 years or so.
Base trims are getting harder and harder to the point of near impossible to find at dealerships and the cost of basic addons has inflated to the point in which the most economical buy tends to be the top of 2nd to top trim level which is usually now 25-30% more expensive than the base price.
In the west, we also subsidize, but we generally subsidize new developments that hit our goals. Our goals in the west are not "EVs at any costs", unlike china, who is dependent on other nations for oil and gas.
And, part of how they "subsidize everything" is that they own everything, they have the ability to extract more value from companies and give it to other companies to achieve their goals. This can backfire, and has downsides, as seen with their real estate crisis.
Also, talking about budget surplus really understates the important role that debt plays in most governments.
So I'd say it's a few things
- China has a massive incentive to switch to EV, one that we in the west can't even imagine. They are willing to forgo profit in their car industry if it means they can reduce reliance on Russia and US-involved oil sources. This is EXTREMELY well documented.
- Solar and batteries are part of their desperate struggle to not rely on Russia. They are building massive storage tanks to store cheap Russian oil - the war in Ukraine has been a blessing for China and has put them in the uncomfortable seat of wanting to prolong the war for as long as possible. I'm not saying that they are doing anything to, just that there are incentives. To be honest, China is very reticent to get involved in matters like this, and I don't blame them.
- China's subsidized steel came from their massive need to build housing for their population, which ties into the next point.
- You misunderstand the economics involved (as judging by the way you talk about budget surpluses). The simple reality is that China operates unlike anything in the west. I don't think this is a bad thing, necessarily, and it's certainly helped raise (at least) half a billion people out of poverty.
So, everything you said "can't be true" or is "propaganda" is actually pretty reasonably explained by their explicit domestic policy and actions. I don't think they're particularly acting maliciously or trying to "start shit", they're just playing hard on the field. And they have every right to, tbh.
FWIW BYD has hybrid models too: https://en.wikipedia.org/wiki/BYD_Qin
Meanwhile China ignored the patents. They could not sell to the West but grew their volumes due to internal sales. So now they have large economies of scale and the West is 20 years behind. Or to borrow the term used in the article, "on the back foot".
The patent system has been a mess for most of my working life. 20 years might have been appropriate for the rate of technological development 100 years ago and perhaps it's appropriate for pharma now, but it's far too long for most types of engineering.
The funny thing is, AI might be the cure as apparently we aren't going to let AI inventions be patented.
So it's not just the patent system that is holding back the West. China was also able to get ahead in the battery race by blatantly ignoring the international trade rules under China's WTO obligation against illegal gov't "export subsidies," "local content rules," "forced IP transfer" via "forced joint venture," or outright ban on foreign competitors to protect local, weak players like CATL/BYD. China hasn't necessarily been too shy about their mercantilist ambition past 10 years, aka Made-In-China 2025.