this post was submitted on 07 Jan 2024
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When China’s BYD recently overtook Elon Musk’s Tesla as the global leader in sales of electric vehicles, casual observers of the auto industry might have been surprised.

But what’s caught other carmakers around the world off-guard is something else about BYD, which is backed by Warren Buffett’s Berkshire Hathaway: its low prices.

“No one can match BYD on price. Period,” Michael Dunne, CEO of Asia-focused car consultancy Dunne Insights, told the Financial Times. “Boardrooms in America, Europe, Korea and Japan are in a state of shock.”

BYD can keeps its costs low in part because it owns the entire supply chain of its EV batteries, from the raw materials to the finished battery packs. That matters because a battery accounts for about 40% of a new electric vehicle’s price.

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[–] IWantToFuckSpez@kbin.social 74 points 2 years ago* (last edited 2 years ago) (7 children)

Of course nobody can match BYD, they don’t just own the supply chain the Chinese government subsidizes every part in their supply chain. The Chinese government wants to crush foreign competitors. And before you say that Tesla gets subsidies, it’s no where near as extensive as the subsidies Chinese EV manufacturers get.

[–] nekandro@lemmy.ml 22 points 2 years ago* (last edited 2 years ago) (2 children)

China doesn't need to subsidize the entire supply chain because the reason Chinese EVs are so cheap is literally hyper-capitalism. China has had an immensely competitive EV market for years, and they're been getting into price wars without government intervention. That's forced innovation at a pace that Tesla cannot match alone because they have no need to compete at such a pace. Here's a list of national EV subsidies and their status:

  1. In 2022, the 12600RMB consumer incentive to buy a BEV vehicle was ended. This is rather similar to Biden's EV tax credit.

  2. China has waived the consumption tax for the EV market, which is a tax designed to target environmentally-unfriendly products. The consumption tax is commonly applied to automobiles, but they're being explicitly waived for the EV market for what is hopefully an obvious reason.

  3. Currently, the tax-free allowance for an EV (the portion of an EV purchase that is not charged VAT) is 30000RMB (@13% VAT, = 3900RMB). This subsidy is being reduced in 2025 and phased out entirely in 2027. This is also rather similar to Biden's EV tax credit.

  4. Costs of EV charging/battery switching on the grid are borne by the government because the government manages electricity on the supply-side, including finding producers and managing distribution. This is not unusual of crown corporations in other countries.

While there are provincial incentives for companies to set up shop in one province over another, they're smaller scale, not received support at the national level, and not unique to China (see: subsidies to Tesla for their production and to Amazon for their HQ2). The most unique element of China's subsidy regime is the elimination of excess consumption tax in the EV market, which has created a huge marginal advantage for developing EVs over developing ICE automobiles. Importantly, that subsidy is simply reducing the excess tax charged on automobile manufacturing over that charged on typical consumption.

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[–] GenEcon@lemm.ee 6 points 2 years ago (1 children)

And don't underestimate, that Human Right Violations are a competitive advantage, too. You don't even need to argue with slave labor from Uygurs, but not allowing unions and having really low labour standards brings the costs down.

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[–] Windex007@lemmy.world 5 points 2 years ago

What does the government subsidy per vehicle work out to?

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[–] HappycamperNZ@lemmy.world 48 points 2 years ago (17 children)

Uh... yeah? China beats nearly everyone on price but you don't go there for quality and durability.

[–] Jode@midwest.social 83 points 2 years ago (4 children)

The American car companies haven't exactly been stellar with regards to quality, reliability, and safety lately either.

[–] vivavideri@lemmy.world 23 points 2 years ago
[–] Vash63@lemmy.world 9 points 2 years ago

My VW-built EV seems pretty high quality. China and USA aren't the only game in EVs.

[–] Sheeple@lemmy.world 7 points 2 years ago (1 children)

Get Yourself an European car???? That's where you go for quality

[–] pineapplelover@lemm.ee 21 points 2 years ago (5 children)

Then get yourself a Japanese car. That's where you go for reliability.

[–] Hyperreality@kbin.social 5 points 2 years ago

Depends on the make and model.

[–] UltraMagnus0001@lemmy.world 3 points 2 years ago (1 children)

Mazda non turbos are very reliable. My 2014 Mazda 2.5l only ever needed oil changes, tranny fluid changes and now at 130k miles I have to do the front control arms. My VW 2010 Passat wagon 2.0tsi needs constant maintenance, like carbon cleaning, water pump dsg fluids, pcv and so on, but I have 200k+ miles on it with no oil burning and original suspension parts.

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[–] Moira_Mayhem@lemmy.world 56 points 2 years ago (2 children)

Maybe you haven't looked into just how badly Teslas are made, it's become a meme.

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[–] NateNate60@lemmy.world 41 points 2 years ago (23 children)

That view is unfortunately out of date. Many Chinese products are of equal or superior quality to their global counterparts. Think Lenovo laptops and OnePlus smartphones. Chinese stuff can be cheap and high quality.

[–] Shyfer@ttrpg.network 8 points 2 years ago (2 children)

Then it's got to be what the person below said: beating the hell out of their workers, poor conditions and benefits, stuff like that.

[–] NateNate60@lemmy.world 20 points 2 years ago

You are one hundred per cent correct. There're a million things you can criticise Chinese manufacturing for but universally poor quality isn't one of them

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[–] pycorax@lemmy.world 6 points 2 years ago

Lenovo has lost all sense of reputation for me after the whole superfish fiasco.

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[–] MonsterMonster@lemmy.world 38 points 2 years ago (1 children)

That's what the British car industry said in the 60s and 70s about Japanese cars. Everyone bad mouthed anything made in Japan as being poor quality.

The Japanese succeeded through good products and their domestic rivals (in Britain) being arrogant, xenophobic and letting standards slide thinking they were great and couldn't be beaten.

I've a Japanese Honda CRV (ironically built in UK) and a Chinese built MG5 EV. The EV is best built car I've owned in 35 years.

Many established car brands are going to disappear Tesla, I believe, being one.

[–] mwalimu@baraza.africa 12 points 2 years ago* (last edited 2 years ago) (1 children)

I once read that the failure of British industrial policy to engage labour as a long term competitive edge instead of a dispensable short term concern saw Germany overtake British car makers. Germany dealt with labour strikes more comprehensively by engaging labour in policy structures. Like including Labour representatives in boardrooms.

I wonder how this may reflect on Chinese / Western competitiveness.

Found the piece: https://www.bbc.com/news/magazine-23406467

[–] chitak166@lemmy.world 8 points 2 years ago

I wonder how this may reflect on Chinese / Western competitiveness.

Sounds like it's almost a 1:1 copy of what happened with the Brits.

For whatever reason, English speakers are easily-duped into thinking non-English speakers can't compete.

[–] ABCDE@lemmy.world 19 points 2 years ago (2 children)

They produce a lot of quality and durable products in China. Apple and Tesla are both producing there, as do many thousands of other companies.

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[–] IWantToFuckSpez@kbin.social 16 points 2 years ago (2 children)

The BYD cars they sell in the West are pretty decently build. I’d be more worried about the aftersales services. Chinese electronics companies always have shitty customer service. Like Lenovo and Huawei. And since a car always needs some repairs during its lifetime I will never buy an EV from a Chinese brand unless they have proven to have good aftersales service.

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[–] chitak166@lemmy.world 14 points 2 years ago (3 children)

You gotta be a special kind of innocent to think Americans make quality automobiles.

[–] at_an_angle@lemmy.one 4 points 2 years ago

All the side said was that it is cheap Chinese shit and nothing about MERICAN vehicles.

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[–] set_secret@lemmy.world 10 points 2 years ago* (last edited 2 years ago) (1 children)

furiously typed into their Chinese Assembled IPhone....

[–] HappycamperNZ@lemmy.world 5 points 2 years ago (1 children)
[–] IMALlama@lemmy.world 6 points 2 years ago

Samsung phones are largely assembled in Vietnam. It looks like they're one of the few phone companies not relying on China though.

[–] jose1324@lemmy.world 9 points 2 years ago

BYD is better quality than the shit Stellantis puts out

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[–] Fedop@slrpnk.net 14 points 2 years ago (3 children)

Is this another case of subsidizing the product to sell the data? Information over each individuals driving habits, audio from the car, connection to the phone. Could be valuable to the CCP.

https://foundation.mozilla.org/en/blog/privacy-nightmare-on-wheels-every-car-brand-reviewed-by-mozilla-including-ford-volkswagen-and-toyota-flunks-privacy-test/

[–] Squizzy@lemmy.world 4 points 2 years ago

That it is happening is the issue, foolish to think that it is only the CCP that would be interested in doing this and not say the largest military industrial complex in the world known for over extending and threading on the rights of people across the globe.

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[–] chakan2@lemmy.world 12 points 2 years ago (22 children)

Are these even street legal in the US? Our safety standards are obscene. Air bags alone cost 5k.

It's why Tata never released a vehicle here.

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[–] chitak166@lemmy.world 10 points 2 years ago (1 children)

This is why Americans hate China. It's legitimate competition for them.

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[–] autotldr@lemmings.world 9 points 2 years ago

This is the best summary I could come up with:


When China’s BYD recently overtook Elon Musk’s Tesla as the global leader in sales of electric vehicles, casual observers of the auto industry might have been surprised.

But what’s caught other carmakers around the world off-guard is something else about BYD, which is backed by Warren Buffett’s Berkshire Hathaway: its low prices.

While BYD cars are not yet a common sight on American roads, many experts believe it’s only a matter of time, despite the high tariffs that help keep them at bay for now.

But BYD is planning to export much cheaper models to markets around the world, including Europe, South America, and Southeast Asia.

In November, House lawmakers warned about Chinese giants like BYD “gaining a back door to the U.S. market” through the southern neighbor.

BYD also has the advantage of its founder and CEO Wang Chuanfu, a relentless cost-cutter whom the late Charlie Munger—Buffett’s long-time partner at Berkshire—described in one of this final interviews last year.


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