If the US government never lets Chinese vehicles into this market (or only with a 100% tariff), Americans will be stuck paying $45K for the base model of anything and the nicer, larger vehicles like trucks will start at about $85K. This, of course is because of corporate and Wall Street greed, as every "consumer" will be able to "purchase" a wide array of cars or trucks depending on their credit rating/interest rate and debt tolerance. This also means a lot of Americans will be saddled with 8 or 10 year notes with 5-15% API 'financing' (or loan) and the resale (used/pre-owned) is and also will continue to be infected by the same Wall Street actors allowing the carmakers to spike prices just like higher education and healthcare.
BTW the impression I get when I'm in Europe is that this is already the case there. Cars are pretty unaffordable, but for different reasons. And they have fast, reliable public transport that reaches out great distances from the cities.
Future updates will be a lot shorter as they will reference this one. I wanted to make sure I covered all the bases in this one, but it did make for a longer than usual piece.
A dazzling discussion — like a basic draft of a McKinsey report which will have a penciled value of $500k within a $3 million consultant’s report. Been there, seen that.
The unspoken problem is how the electric grid will handle the massive load of charging EVs. We know the US grid is already straining to keep up with the load from "AI" data centers. It would be interesting to know how the Chinese are managing their grid. I suppose if everyone goes PHEV/EREV, then fossil fuels cushion the massive load that pure BEVs put on the grid. Still, the grid is the big problem.
The Chinese have always had the advantage of putting things in new, rather than having to deal with our rotten infrastructure. They are also adding colossal amounts of wind, solar and even some nuclear to their grid; this year their GHG emissions will fall even as electricity consumption grows. I covered this in a previous piece: https://rogerboyd.substack.com/p/china-rapidly-becoming-both-a-green
If the US spent a fraction of what they spend on "defence" on a national electricity grid, using a model like the Tennessee Valley Authority, they could easily provide for EVs. The grid is a solvable problem. But that would get in the way of profiteering and value extraction. I still view this AI bubble very much like the other tech bubbles, we will have a lot of dark AI data centres the same way we had a lot of dark optical fibre after the .com crash.
Astute observation. The glory days of American planning and ingenuity — and even internecine cooperation — exemplified by the TVA and other great civil projects of the past century — are long gone. Reading David Billington’s “From Insight to Innovation” on this history evokes the memory of national greatness — like watching “It’s a Wonderful Life”.
On one of my first trips to China some 15 years, I met some mid-level executives of the State Grid Company (supplying some 80% of China). What they explained and predicted in meetings, in a very low key way, especially compared to the braggadocio of the Japanese) evoked suppressed smiles by our team. Yet they have largely followed their strategic plans (including absorbing “green” inputs) with a startling level of success.
While your question seems relevant, it really is besides the point because the US could never accomplish what China did even if it had the template to do so (which of course it does).
I find it stultifying that at least some top brass at the big three remember the painful lessons of lean production and the disastrous 80s-90s Japanese competition, and yet still find themselves in almost the same place again. Being spanked by foreign car companies is like a humiliation ritual for carmakers now.
That's because the US government left out "light trucks" from the fuel efficiency standards in the 1990s while at the same time forcing the Japanese to limit their sales in the US. Then the big 3 crushed the California EV initiative. Then of course that same federal govt bailed them out in 2008. Corporate executives will tend to take the easy way to padding their wallets when their feet are not held to the fire, all those buy backs boost the value of their stock options.
When corporations and their owners "own" the politicians and regulators the result is the lazy profiteering monopolies and oligopolies that dominate the US economy. The Chinese Party-state is independent and makes sure that the competition is brutal while supporting the overall industry (no picking winners). The state owned car manufacturers (SAIC, GAC etc.) will not be given special treatment as BYD etc. eat their lunch.
Stop saying the Federal Government bailed them out, they did not the American citizens bailed them out with wages that don't keep pace with inflation. The printing of dollars is just the government adding more debt to the system. Dollars are promisory notes that never get paid. And when the government prints more the greedy corporations know it's time to increase prices and blame the government for causing the price increases.
I don’t share the vision demonstrated by this article.
Its about where the “badge” is made and reducing the number of “badges”
First… its not about the badge on the car its where its made. With Global trade being replaced with localized trade blocs its clear that supply chains will be taxed if they don’t reside inside that trade bloc, and it should move more production inside that trade bloc….. and that’s fine.
Second …We have far too many “badges” and its increasing the total ownership cost of each unit due to duplication of R&D and capitalization. A consolidation not proliferation would be a good thing.
Another thing… EVs are going to be the biggest mistake, and will be pushed back for at least a decade.. and those that don’t keep the options open will suffer…. This is happening now.
Great build the EV's before we have enough "clean energy" to power them or the infrastructure to support them. We can dump billions of batteries and cars before we even get to "clean energy". A masterful plan.
China's emissions will fall this year due to its massive increases in renewables (and even some nuclear). There is also a rapidly developing battery recycling business. You are not being "clever" you are simply displaying your ignorance.
Sorry I don't agree with you but the western world is in collapse and while they're stealing farm land all over not only over the USA and Europe and shuttuing down family farms to rebuild the grid it's all haphazard and like all of their plans will be half-asssed.
I've been watching what my local city is up to and it's not repairing roads or bridges but adding bike lanes to streets that don't have the safety to add bike lanes so they just don't seperate them at all from the vehiclular traffic like other places I've seen where they have planters or something seperating the different users. On one street that put 2-way bike paths on a one-way stteet and had to go back and sign every access point that there may be bikes coming from an unsuspected direction. They didn't even repair the roads or check for drainage problems...nothing. Just painted some lines on the road and where they didn't have enough room for bikes they just printed signs stating that bikes can use the full lane regardless of what direction they may be coming. They initially had some plastic poles seperating the lanes 2-years ago but those are have already been removed and lines have already faded and need repainting. Red lights had to be re-established going the wrong way on a one-way street. Where does the stupidity end?
Now they're talking about spending $15 million on a bike path through the city alongside a creek that runs through the city across from an existing bike path that few use that runs the length of the other side of the creek claiming that becuase the west side didn't have a bike path they've lived in poverty while the bridge just 2-blocks away is dropping concrete and rebar from the underside. One of the worst rated bridges in the state. It was supposed to be repaired like 3-years ago. Now they've put up cargo netting underneath the part that hangs over the bike path only because I forced their hand.
If we have to burn natural gas for electric generation than what has all this accomplished? Nothing.
Classic performative liberal bullshit, I have the same where I live in Ontario, Canada. There is a great youtube channel "Not Just Bikes" that covers how some cities, such as many in Holland and even Finland in the winter do this well. North America is just an incompetent extractive profiteering hell, with performative BS to cover over the reality.
But NA is not the world, and far too many people cannot look past NA. Real change is happening in other places such as China, it will have to be forced upon the NA oligarchy.
Yanasa on Youtube is a guy that's following the farmland grab in NA. His latest rant has been on the PFAS problem but I don't think he understands that there's no clean-up for PFAS. I'm not sure he understands that it is a product of the chemicals that were created for waterproofing and making non-stick frying pans, et. el. that were discharged into our waterways. I think he thinks it's a problem of used up items being tossed out which they may be adding insult to the injury I'm not sure.
I've talked to my water company regarding PFAS and what they tell me is they don't even include it on their yearly water quality report because the EPA has no standard. The EPA doesn't have them because the human body cannot remove them so 0 is the only answer. The water companies essentially look the other way because there's no way to solve the problem although when we were an entrerprising country some person working chemistry at the water company would have found a process and had it patented. Those chemists jobs have been outsourced to some computer sensor company that tells them how much chlorine or product X to add but you see it's no longer a water company employee seeing the need and responding because they don't have the education that once was highly in demand. Companies are no longer responsive to problems because the people working at them barely want to do their assigned tasks let alone "invest" in the company. The state's are going into panic mode because they think the remediation will be so expensive that water will become prohibitive which may be the next mass extinction. But what does one expect from a country that drops depleated uranium in Libya's water supply once called the "Eighth Wonder of the World"?
China has their own way of doing things although I'm not sure it's all that different from capitalism which explains the pollution problem they're facing. They probably don't hold their "corporations" any more accountible for pollution than any other capitalist country. They have state supported industry which means they can control aspects of production and demand but when it becomes another entrenched industry they'll be at the same place we are now. The capitalists demanding profits and wating to move jobs elsewhere for lower costs or they won't fund re-elections. The capitalists are now experienced at this game it will come much quicker for China I think.
What amazes me is how much China is doing using manual labor. We sold them our industrial equipment yet I often see single threaded manual production of one item then onto the next item instead of the production lines that make mass production so much more efficient. Packing of goods produced
also done by hand. I see a lot of cheap plastic junk including plastic clothing coming out of China being sold on Temu, Wish and others which implies large amounts of natural gas being used and large amounts of plastics going into landfills. I think they're actually selling defective merchandise to us because the few times I've tried to "get a deal" it's never turned out to be worth the couple dollars I paid for it.
I've also seen Chinese people doing heavy industrial jobs like pulling motor windings trying to extract the copper I'd imagine but often doing one motor or conversely rewinding a motor an operation that takes some serious time and work. I don't always get the context of where they're doing it...is it a recovery operation or just someone scrapping, is it their motor and they're trying to repair it? Always in the most squallor of conditions however. Often not wearing shoes or using any sort of protection lessons I think they should have learned from us.
Then there is all the traffic on the streets and I'm often wondering is it like that all day 24 x 7 or is it just the glimpse of rush hour we're getting? Where are they all so busy going? Seems like retail still exists in China were in the US it's pretty much collapsed to 50% of what was once available. Malls sitting empty or 1/2 empty. The owner's once having lucrative leases now are looking at bankruptcies the same happening in office buildings.
In the US law is doled out for the people speaking out against the government, dealing drugs in direct compitition with the government, etc. People doing the really bad nefarious things are often not punished while someone trying to claim their rightful recovery under their insurance or any small amount often has no path to justice because legal services are so ridiculously overpriced.
I don't know or have much information regarding law in China other than the occassional embezzelment resulting in a death sentence for those found involved. Was it a just trial? I don't know. Do the people in general have access to bring their claims against the government or other government run operations? I don't know.
If the US government never lets Chinese vehicles into this market (or only with a 100% tariff), Americans will be stuck paying $45K for the base model of anything and the nicer, larger vehicles like trucks will start at about $85K. This, of course is because of corporate and Wall Street greed, as every "consumer" will be able to "purchase" a wide array of cars or trucks depending on their credit rating/interest rate and debt tolerance. This also means a lot of Americans will be saddled with 8 or 10 year notes with 5-15% API 'financing' (or loan) and the resale (used/pre-owned) is and also will continue to be infected by the same Wall Street actors allowing the carmakers to spike prices just like higher education and healthcare.
BTW the impression I get when I'm in Europe is that this is already the case there. Cars are pretty unaffordable, but for different reasons. And they have fast, reliable public transport that reaches out great distances from the cities.
Long read! On the bright side, they'll become collectibles? 🗑️
Future updates will be a lot shorter as they will reference this one. I wanted to make sure I covered all the bases in this one, but it did make for a longer than usual piece.
A dazzling discussion — like a basic draft of a McKinsey report which will have a penciled value of $500k within a $3 million consultant’s report. Been there, seen that.
Hopefully it is more useful than what I used to see from McKinsey!
The unspoken problem is how the electric grid will handle the massive load of charging EVs. We know the US grid is already straining to keep up with the load from "AI" data centers. It would be interesting to know how the Chinese are managing their grid. I suppose if everyone goes PHEV/EREV, then fossil fuels cushion the massive load that pure BEVs put on the grid. Still, the grid is the big problem.
The Chinese have always had the advantage of putting things in new, rather than having to deal with our rotten infrastructure. They are also adding colossal amounts of wind, solar and even some nuclear to their grid; this year their GHG emissions will fall even as electricity consumption grows. I covered this in a previous piece: https://rogerboyd.substack.com/p/china-rapidly-becoming-both-a-green
If the US spent a fraction of what they spend on "defence" on a national electricity grid, using a model like the Tennessee Valley Authority, they could easily provide for EVs. The grid is a solvable problem. But that would get in the way of profiteering and value extraction. I still view this AI bubble very much like the other tech bubbles, we will have a lot of dark AI data centres the same way we had a lot of dark optical fibre after the .com crash.
Astute observation. The glory days of American planning and ingenuity — and even internecine cooperation — exemplified by the TVA and other great civil projects of the past century — are long gone. Reading David Billington’s “From Insight to Innovation” on this history evokes the memory of national greatness — like watching “It’s a Wonderful Life”.
On one of my first trips to China some 15 years, I met some mid-level executives of the State Grid Company (supplying some 80% of China). What they explained and predicted in meetings, in a very low key way, especially compared to the braggadocio of the Japanese) evoked suppressed smiles by our team. Yet they have largely followed their strategic plans (including absorbing “green” inputs) with a startling level of success.
While your question seems relevant, it really is besides the point because the US could never accomplish what China did even if it had the template to do so (which of course it does).
I find it stultifying that at least some top brass at the big three remember the painful lessons of lean production and the disastrous 80s-90s Japanese competition, and yet still find themselves in almost the same place again. Being spanked by foreign car companies is like a humiliation ritual for carmakers now.
That's because the US government left out "light trucks" from the fuel efficiency standards in the 1990s while at the same time forcing the Japanese to limit their sales in the US. Then the big 3 crushed the California EV initiative. Then of course that same federal govt bailed them out in 2008. Corporate executives will tend to take the easy way to padding their wallets when their feet are not held to the fire, all those buy backs boost the value of their stock options.
When corporations and their owners "own" the politicians and regulators the result is the lazy profiteering monopolies and oligopolies that dominate the US economy. The Chinese Party-state is independent and makes sure that the competition is brutal while supporting the overall industry (no picking winners). The state owned car manufacturers (SAIC, GAC etc.) will not be given special treatment as BYD etc. eat their lunch.
Stop saying the Federal Government bailed them out, they did not the American citizens bailed them out with wages that don't keep pace with inflation. The printing of dollars is just the government adding more debt to the system. Dollars are promisory notes that never get paid. And when the government prints more the greedy corporations know it's time to increase prices and blame the government for causing the price increases.
The US oligarchy had their bought and paid for Federal Government bail them out at the expense of the average US citizen.
I don’t share the vision demonstrated by this article.
Its about where the “badge” is made and reducing the number of “badges”
First… its not about the badge on the car its where its made. With Global trade being replaced with localized trade blocs its clear that supply chains will be taxed if they don’t reside inside that trade bloc, and it should move more production inside that trade bloc….. and that’s fine.
Second …We have far too many “badges” and its increasing the total ownership cost of each unit due to duplication of R&D and capitalization. A consolidation not proliferation would be a good thing.
Another thing… EVs are going to be the biggest mistake, and will be pushed back for at least a decade.. and those that don’t keep the options open will suffer…. This is happening now.
Great build the EV's before we have enough "clean energy" to power them or the infrastructure to support them. We can dump billions of batteries and cars before we even get to "clean energy". A masterful plan.
China's emissions will fall this year due to its massive increases in renewables (and even some nuclear). There is also a rapidly developing battery recycling business. You are not being "clever" you are simply displaying your ignorance.
Sorry I don't agree with you but the western world is in collapse and while they're stealing farm land all over not only over the USA and Europe and shuttuing down family farms to rebuild the grid it's all haphazard and like all of their plans will be half-asssed.
I've been watching what my local city is up to and it's not repairing roads or bridges but adding bike lanes to streets that don't have the safety to add bike lanes so they just don't seperate them at all from the vehiclular traffic like other places I've seen where they have planters or something seperating the different users. On one street that put 2-way bike paths on a one-way stteet and had to go back and sign every access point that there may be bikes coming from an unsuspected direction. They didn't even repair the roads or check for drainage problems...nothing. Just painted some lines on the road and where they didn't have enough room for bikes they just printed signs stating that bikes can use the full lane regardless of what direction they may be coming. They initially had some plastic poles seperating the lanes 2-years ago but those are have already been removed and lines have already faded and need repainting. Red lights had to be re-established going the wrong way on a one-way street. Where does the stupidity end?
Now they're talking about spending $15 million on a bike path through the city alongside a creek that runs through the city across from an existing bike path that few use that runs the length of the other side of the creek claiming that becuase the west side didn't have a bike path they've lived in poverty while the bridge just 2-blocks away is dropping concrete and rebar from the underside. One of the worst rated bridges in the state. It was supposed to be repaired like 3-years ago. Now they've put up cargo netting underneath the part that hangs over the bike path only because I forced their hand.
If we have to burn natural gas for electric generation than what has all this accomplished? Nothing.
Classic performative liberal bullshit, I have the same where I live in Ontario, Canada. There is a great youtube channel "Not Just Bikes" that covers how some cities, such as many in Holland and even Finland in the winter do this well. North America is just an incompetent extractive profiteering hell, with performative BS to cover over the reality.
But NA is not the world, and far too many people cannot look past NA. Real change is happening in other places such as China, it will have to be forced upon the NA oligarchy.
Yanasa on Youtube is a guy that's following the farmland grab in NA. His latest rant has been on the PFAS problem but I don't think he understands that there's no clean-up for PFAS. I'm not sure he understands that it is a product of the chemicals that were created for waterproofing and making non-stick frying pans, et. el. that were discharged into our waterways. I think he thinks it's a problem of used up items being tossed out which they may be adding insult to the injury I'm not sure.
I've talked to my water company regarding PFAS and what they tell me is they don't even include it on their yearly water quality report because the EPA has no standard. The EPA doesn't have them because the human body cannot remove them so 0 is the only answer. The water companies essentially look the other way because there's no way to solve the problem although when we were an entrerprising country some person working chemistry at the water company would have found a process and had it patented. Those chemists jobs have been outsourced to some computer sensor company that tells them how much chlorine or product X to add but you see it's no longer a water company employee seeing the need and responding because they don't have the education that once was highly in demand. Companies are no longer responsive to problems because the people working at them barely want to do their assigned tasks let alone "invest" in the company. The state's are going into panic mode because they think the remediation will be so expensive that water will become prohibitive which may be the next mass extinction. But what does one expect from a country that drops depleated uranium in Libya's water supply once called the "Eighth Wonder of the World"?
China has their own way of doing things although I'm not sure it's all that different from capitalism which explains the pollution problem they're facing. They probably don't hold their "corporations" any more accountible for pollution than any other capitalist country. They have state supported industry which means they can control aspects of production and demand but when it becomes another entrenched industry they'll be at the same place we are now. The capitalists demanding profits and wating to move jobs elsewhere for lower costs or they won't fund re-elections. The capitalists are now experienced at this game it will come much quicker for China I think.
What amazes me is how much China is doing using manual labor. We sold them our industrial equipment yet I often see single threaded manual production of one item then onto the next item instead of the production lines that make mass production so much more efficient. Packing of goods produced
also done by hand. I see a lot of cheap plastic junk including plastic clothing coming out of China being sold on Temu, Wish and others which implies large amounts of natural gas being used and large amounts of plastics going into landfills. I think they're actually selling defective merchandise to us because the few times I've tried to "get a deal" it's never turned out to be worth the couple dollars I paid for it.
I've also seen Chinese people doing heavy industrial jobs like pulling motor windings trying to extract the copper I'd imagine but often doing one motor or conversely rewinding a motor an operation that takes some serious time and work. I don't always get the context of where they're doing it...is it a recovery operation or just someone scrapping, is it their motor and they're trying to repair it? Always in the most squallor of conditions however. Often not wearing shoes or using any sort of protection lessons I think they should have learned from us.
Then there is all the traffic on the streets and I'm often wondering is it like that all day 24 x 7 or is it just the glimpse of rush hour we're getting? Where are they all so busy going? Seems like retail still exists in China were in the US it's pretty much collapsed to 50% of what was once available. Malls sitting empty or 1/2 empty. The owner's once having lucrative leases now are looking at bankruptcies the same happening in office buildings.
In the US law is doled out for the people speaking out against the government, dealing drugs in direct compitition with the government, etc. People doing the really bad nefarious things are often not punished while someone trying to claim their rightful recovery under their insurance or any small amount often has no path to justice because legal services are so ridiculously overpriced.
I don't know or have much information regarding law in China other than the occassional embezzelment resulting in a death sentence for those found involved. Was it a just trial? I don't know. Do the people in general have access to bring their claims against the government or other government run operations? I don't know.