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this post was submitted on 12 Jun 2024
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"Subsidized until their cars are at a better price"
What do you think subsidies are? Do you think China is paying $10k for each export sale? Do you think China is just hemorrhaging money so that they can bump sales numbers up?
China dumped billions of dollars into a domestic fast charging network that aggressively stimulated domestic demand and dumped billions of dollars into clean energy initiatives to make sure that electricity prices hover around 1RMB/kWh ($0.14/kWh). How much is electricity in Europe? How much is it in the US?
China offered $1750 in purchase-side tax incentives that have since been phased out. How much are the American purchase-side tax incentives passed by the IRA? Are they still ongoing?
Shanghai gave Tesla hundreds of millions in low-interest loans to set up a factory in Shanghai as opposed to, say, Jiangsu, in exchange for billions of dollars in investment. How much did Tesla's Nevada Gigafactory receive in subsidies?
Plus, let's take a look at who's actually exporting cars to Europe:
MG (SAIC), Volvo (Geely), Tesla, and European joint ventures (BMW, Renault, Volkswagen, etc.)
China has been subsidizing the infrastructure for EVs, absolutely, but subsidizing infrastructure is not illegal. If Europe wants to protect its domestic car manufacturers, the first thing it should look at is Tesla. There's also a reason BMW, Volkswagen, and Mercedes oppose tariffs: these risk retaliation against their currently rather unfettered access to the highly profitable, rapidly growing premium car market in China. They're seeing upwards of 10% YoY growth in their luxury car lineups.
The EU Commission is stabbing itself in the chest to save its face. von der Leyen is pursuing a personal vendetta against the best interests of German automakers, completely forgetting the fact that while 10% of Chinese car production is exported, about 70% of German car production is exported. Meanwhile, while Chinese cars predominantly target the lower end of the market, German cars for export are overwhelmingly premium and luxury vehicles. Just an insane policy that seems to be more political pandering than anything else.