I've written this in many other subreddits but I think it's still fresh here, so check it out:
In 1979, the Toyota Celica GT coupe, a two-door, rear wheel drive, 2.2 liter straight four with a single overhead cam and a 5 speed transmission that could get about 25 miles to the gallon cost $3000 off the showroom floor. They sold like hotcakes. They were fun to drive and cheap to own, operate and maintain. Parts were cheap and the engines were bulletproof easily lasting 300,000 miles and more.
In today's money, that is US$13,000.
Chinese EVs are not cheap, they're the same price that Toyota was selling cars in California for in 1979 when adjusted for inflation. Those Chinese EVs are about the same price the early Toyotas were selling for.
No, those cars are not cheap at all. Instead, what you're seeing is that there has been a massive inflation of the price of automobiles in the United States along with a persistent sales pitch that says "Americans no longer want small cars and everybody loves SUVs now." which is complete and utter bullshit. I don't want an SUV or a 4-door boat and I don't know anybody who wants this bloated overpriced crap. People buy it because nothing else is available.
There's your problem. The US auto market is fundamentally corrupt and should be wiped out to reset us back to the actual prices that cars cost to manufacture and drop all this digital nonsense nobody asked for. I'll put in my own aftermarket stereo, thanks.
Your 100% on point, except for the size of cars. That is due to CAFE emissions standards that for small vehicles demanded ever high fuel efficiency but made a carveout for “trucks” which SUVs, crossovers and of course pickups are classified as. Something about the ratio of the area of the car’s footprint to the fuel efficiency which is why you cannot buy small pickups anymore. The best deal are small RAV4 but those are hybrids and can hit 40 mpg but still technically classified as a “truck”.
I’m all for emissions standards they’ve made this countries air breathable again but these carveouts have become a massive loophole which has lead to huge vehicles on our roads.
Also killed the station wagon (along with marketing crossovers that look like blobs as somehow "cooler" than a wagon). Id dig it if a shooting brake was sold in the US. If I was a dad id be in a wagon or a lowered minivan.
>Americans no longer want small cars and everybody loves SUVs now." which is complete and utter bullshit. I don't want an SUV or a 4-door boat and I don't know anybody who wants this bloated overpriced crap.
I mean people freaking LOVE ginormous vehicles. They love SUVs. They love crossovers.
Personally I think it's insane. But the general public doesn't. There's a reason giant trucks and SUVs blow sedans and small trucks away in sales
The margins are higher on trucks. Detroit doesn't want less margin and discourages cheaper cars. Dealers want more per sale. It's the same mechanic if sling more expensive items to less people that has made the economy K shaped
Relatively cheap gasoline in the U.S.A. plays a big part to Americans buying crossover SUVs and big trucks. Imagine paying double U.S. gas prices in some European countries or paying 4x U.S. prices in Hong Kong. Most drivers dealing with persistent high gas prices will buy smaller cars and wagons (in Europe) versus mid-size/large SUVs and trucks.
Also, the marketing is powerful. The commercials work. The manufacturers have better profit margins on bigger cars especially on crossovers, which are usually based on the same sedan platform. The incentive for manufacturers is to push crossover SUVs at the expense of other cars like sedans, compacts, and sports cars.
A few summers ago, I remember paying $5+/gallon for weeks, and I heard the complaining and grumbling of other drivers, who were not happy about high prices. Understandable, my car got ~20 MPG (V6 drinks a lot in city driving). At the same time, a lot of their cars were older SUVs or trucks that got 20 MPG or less, so unless it was for work, buying inefficient large vehicles was going to be painful to refuel. Most people do not think about the prospects of long-term consequences to operating an inefficient vehicle, where oil prices can spike from various factors like embargoes (1967 Oil Embargo), wars/conflict (1979 oil crisis from Iranian Revolution), and refinery shutdowns (2025-2026 California).
> mean people freaking LOVE ginormous vehicles. They love SUVs. They love crossovers.
For the record, it's also a fact that the people who buy SUVs are more aggressive than other drivers. Many buy large vehicles in the hope it makes them safer despite less actual safety features. US Auto Manufacturers quite literally stroke people's egos with their commercials. Also, on average, they are far more likely to swerve to intentionally hit animals on the road.
These brand new SUV's are generally only affordable to someone who's some shade of wealthy and those people are more often dickheads.
They can't buy anything else(sedans aren't being made) combined with keeping up with the joneses thinking. I drive an Impala, something not made anymore. If I wanted a 4 door sedan from Chevrolet the only option is a Malibu.
And I point out in another comment that Toyota makes 3 different sedans where chevy makes 1 now. Some people won't buy a toyota( their losss). Ford makes 0 for the us market, so loss of availability is a thing.
There were 248,088 Corollas sold in 2025, 316,185 Camrys. They are the 11th and 8th top sold vehicles in the US.
They outsold Wrangler, Maverick, Grand Cherokee, Explorer etc.
Hell the only reason the F-Series outsells everything else is because they roll up every single F-Series Model from the F-150 to the F-750 commercial vehicles.
Anyone going online to shop for cars in the US knows this just isn't true, there are still a massive number of options for all kinds. There are other convincing reasons why American's tend to buy bigger cars than the rest of the world, but this one isn't. The market supplies for demand.
Ford stopped making them. Chrysler stopped making them. Buick stopped making them. Chevy only makes 1 now. If you think that's not affecting things you're ignorant. Toyota seems to be the only brand making affordable ones.
Was listening to a podcast once where they talked about the US market pre Japanese cars. There was an expectation that cars would break down all the time, so servicing was as much a part of the sales relationship as the cars themselves.
It wasn’t until the Japanese cars came on board that the US consumers started to demand cars that didn’t break down.
Sometimes incumbents get lazy and spend more time spending money to protect their market through lobbying than spending their money innovating their product
You make some good points, but there are other factors at play.
Consumers do generally prefer larger vehicles these days, even when they're not SUVs. Small models, like a Corolla or Accord, are larger due to consumer demand. And increasing incomes since 1979 have meant higher overall demand for cars, driving prices up.
On top of that, the goverment has mandated quite a few safety features during that time, including crumple zones, airbags, anti-lock brakes and stability control, all of which increase cost.
They also add weight, thereby lowering fuel economy. Today's version of a Toyota Corolla weighs about 50% more than the one they made in 1980.
I just got back from Mexico where I rented 2 BYDs, a dolphin and a Tang. And all I can say is, American cars are done. The build and ride quality was great. The tech was great, and they're so affordable. We may ban there sales in the US, but they are going to destroy us everywhere else
Im pretty sure that your personal taste in vehicle size doesn’t prove anything. Whether or not marketing had an impact, Americans want large vehicles. Small vehicles are available and they don’t sell well.
Also, corruption doesn’t make much sense either. The profit margins for these companies is public information and they do not explain the big price difference.
It does, if you look at environmental standards in the USA which exempts commercial vehicles from emission standards (Vans, trucks, Hummers, SUVs regardless if they're use commercial or not), along with a 50% tariff on imported small cars due to the Chicken Tax, and America insisting on its own auto standards difference from the EU and a good deal of the world's industrialized countries and you have an effectively semi-isolated market. That and if you account for inflation and look at the number of Us cars that actually sells below 20,000, it's a pitable amount there really isn't much choice if you want to buy a small car. Plus American trucks tend to be so big that they literally can't fit in the streets of a lot of European and Asian countries.
Personally I believe the Chinese saw this as a strategic thing, like the military it was a major vulnerability that China had to import so much oil so they developed solar power, wind power, and EVs
Oh I agree with you Americans are wealthy and buy a lot more luxury features one of which is size, but I am also pointing out that big cars receive a lot of regulatory advantages and the result is probably a lot more skewed towards gas guzzlers than it should be.
I don't think it's controversial to say that this is pretty anti-poor, America's designed to be car centric and the lack of economic cars really disadvantages the poor. And there's all the side effects from the air pollution causing cancer and killing people, wear on roads, and general fuel economy.
I’m an American & I want a damn 2 door stick shift rear wheel drive car with a boxer engine that also has a shockingly low curb weight so it’s fast as hell and absolutely invigorating to drive. I freaking bought that exact car. They don’t make that car at any American manufacturer.
>I think most Americans would agree when I say that sounds awful.
The majority of Americans who buy trucks and suv's only use them for commuting to work and buying groceries. Not many people genuinely need a new SUV or Truck for practical purposes it's entirely a flex for upper middle class and above.
That's fair. My ideal vehicles would be a small pickup truck and a 4 door sedan. Trucks good for yard work and stuff but the sedan is better for basically everything else.
I dunno about that, I’m just over here like I don’t want to deal with paying for gas, transmissions, constant maintenance, gas stations, harmful emissions….
The only small vehicles available are all Imports.
Camry, Civic and Corolla still sell really well in the US.
Civic was the 12th most sold vehicle in the US, Corolla, 11th, Camry 8th. They beat out many large SUVs.
Hell the CRV and RAV4 are smaller SUVs and they sell better than the largest vehicles.
The F-Series being number one is basically because the roll up the entire F-Series line up from the 150 - 750s as they include all their commercial vehicles sales.
There are something like 300 different models sold in the US.
I'm in Europe where we don't have such large cars and Chinese EVs are still cheaper than most other EVs. Compare the BYD Dolphin Surf to any other EV, and it's the cheapest with a few exceptions. None of these are large cars: Fiat 500, Renault R5, Opel Frontera, Hyundai Inster, Citroen e C3, Fiat Grande Panda, Dacia Spring, Leapmotor T03 (the latter is the cheapest of the list, with the BYD being second cheapest).
The reason is Chinese labour is cheaper than French, German or Italian labour. The rare earths needed for their batteries is mined locally in China and does not need to be imported, when everyone else has to buy them from China. The BYD would be even cheaper if there weren't import taxes on them, which is in place to give the European brands a chance at being competitive.
Smog in major cities isn't really a good indicator of regulatory protections. I'd be more concerned with use of coal, processing of heavy metals, and industrial waste disposal.
Also, processing rare earths is capital/energy intensive and extremely dirty, so other countries are not motivated to do that work until recently. China was willing and chose to dominate the processing market for rare earths as well as graphite and other key materials for critical components like batteries of all sizes ranging from smartphone batteries to batteries for EV cars. China's dominance in rare earths processing allows them to crash prices, which cripples and/or bankrupts upstart foreign rare earth processing companies trying to scale up and to reach profitability.
>In 1979, the Toyota Celica GT coupe, a two-door, rear wheel drive, 2.2 liter straight four with a single overhead cam and a 5 speed transmission that could get about 25 miles to the gallon cost $3000 off the showroom floor.
The MSRP for a '79 Celica GT was around $6,000 ($5,259-$6,559 depending on options)... which is $28,572 adjusted for inflation.
How can you possibly compare a car from the 70s to one from today nearly half a century later?
Your Toyota has more in common with a modern riding mower than a modern car. No fuel injection, no abs, no airbags, no rear view camera, and hardly any crash safety.
The original commenter is lying about the MSRP -- it was ~$6,300, which is about $30,000 even today. That's almost exactly the same as a modern Camry that's miles better at everything.
🫠 you said new Toyotas are 'so complicated', and I asked you if that means new Toyotas being triple the the inflation-adjusted price of the old ones is justified.
Even 20 years ago we had Geo Metros that were significantly cheaper and highly comparable to the old Toyotas.
They make bigger cars because rules and regulations have forced their hand to make the bigger cars that can more easily absorb the cost of the required specs that didn't exist in 1979. Also, I think if people actually wanted those smaller cars, they would have sold better and they'd keep them around. The USA is a car centric country, so it makes sense that people would be more willing to spend on bigger/more comfortable cars.
The fact that you can spout off the stuff about that 1979 car means you're in a small fraction of a fraction of a percent of people and think about cars in a very different way then the majority of people.
What rules and regulations would prevent everybody buying a hatchback or station wagon?
It’s not like the alternatives don’t exist, they just make less money for the auto manufacturer. The average SUV has less cargo space than a station wagon but is heavier and outputs more emissions.
You said it your self "they make less money". If you made 2 things, and one sold for more and made you more money, would you really spend time making the other one? I bet not.
The rules/regulations change the cost needed to create the thing in the first place, which eats into profits. Small trucks are an example, when we made stricter MPG rules, it raised the price to make the small truck, which made it more expensive. Big trucks were exempt from these rules, so it was more profitable to make them. Better breaking systems, better crash performance, more technologies...all of these raise the baseline cost to make the thing, which as a percentage of the whole is bigger on smaller/cheaper cars. It doesn't prevent anything, but it raises the cost of a cheaper car by a bigger percentage than a more expensive car.
A lot of this is just like how people all say they want smaller smart phones, but then companies release smaller phones and no one buys them, so they quit making them.
Well exactly, it benefits the company not the consumer.
Why should we be simping for auto manufacturers, when its consumers rights that matter? We are paying more with our health for all these trucks on the road, which also cost society in terms of road maintenance, pedestrian deaths (oops I’m too high up to see you), etc. They barely even fit into a standard parking space.
If Ford, Dodge and all the yank tank manufacturers make less money, I’m not going to shed a single tear. In reality, these vehicles should be taxed higher so that only actual tradespeople that need trucks buy them, rather than the cowboy cosplayers and suburban mums. We need more regulation of these vehicles, not less.
Everything you just said is an example of auto manufacturers shirking the bill for justified ecological and safety regulations onto consumers, and now anyone who isn't upper class has been priced out of buying a car with 0 miles.
Im curious why you choose to fixate on American consumer preference over, say, how China owns supplychain of car production and how heavily Chinese government subsidizes EV production in China.
I dont know if you noticed average American seem much bigger than an average Chinese. Im barely 6ft1, average build and im seriously cramped up in my driver’s seat whenever i rent a sedan to travel. Americans buy bigger cars to wrap around their bigger asses.
Lower regulatory overhead and more competition. Amazing how the communists have developed a closer approximation of capitalism than we have in the U.S. nowadays…
Lower regulatory overhead is true, but this isn't really China specific. Rather, it reflects that Chinese companies largely sell to the Chinese market. This simplifies their regulatory overhead, sales, and management costs by quite a bit. They are subject to less regulatory overhead as a result, but this is a deliberate business choice rather than a characteristic of their operations in China.
And they are actually benefiting from less competition, not more. Vertical integration is what makes cars cheap, offering the biggest price differential observed by these authors. To make their balance sheets appear leaner and appease shareholders, Western firms have spun off their supply chains. The Chinese companies are not subject to that pressure. They don't need to demonstrate high labour productivity or efficiency, they need to build cars.
>the communists have developed a closer approximation of capitalism than we have in the U.S. nowadays…
There is no Ur-Capitalism, with Beijing or Washington being truer than the other to it. What we are seeing is a difference in vision of capitalist development. China is much more similar to the Fordist capitalism of the early 20th century. The West has chosen a different route, abandoning the Ford-Keynes model for a post-modern, highly financialised capitalism. These are both capitalisms, both have their trade offs, benefits, and reasons for existing in their current form as capitalism evolves to address its own contradictions.
I’ve always been a big fan of the Ford-Keynes model of capitalism as soon as I learned about the Ford model of paying workers enough to buy their own products to create a positive feedback loop of consumer consumption, profit, and growth. The US was handed on a silver platter an exclusive juggernaut of economic success in the 50’s because of WWII that spanned the socioeconomic spectrum, but threw it away for a different model that made executives even more rich.
Everybody in society wins with the Ford-Keynes model. The consumers, the workers, and the highest paid executives. It creates both a strong economy, and an economy that’s strong through to the core. I guess cheap goods “now” was just too enticing to ignore for the greater good of the future. Instead of planting trees whose shade we wouldn’t sit under, we cut existing ones down and didn’t save the seeds
More competition? I think you mean they are state sponsored and get regulatory assistance to be cheaper than their competitors that have to operate with actual competition and front their own up front costs and are responsible to investors that demand ROI. It’s amazing how much easier make a cheap product when the state is your major shareholder and only cares about under cutting and eliminating capitalist competition. But what do I know? I just teach economics
Then why can't you read the article and respond to the plant costs, licensing, and cheaper R&D factors? If you'd bothered to read this, you'd know that this about comparing manufacturing plants/product in China, for all the manufacturers, and they do account for state subsidy.
I replied this below and I’m pasting it here because you seem offended by my answer and felt the need to insult me.
The amount of subsidies granted in China is exponentially higher than anywhere else, including China for non-Chinese companies. Free land, fund grants for industries they want like EV’s, low to 0 taxes, little to no regulatory oversight, government assistance with material sourcing and permit approval, income tax and housing benefits to key personnel, and on and on. Teaching isn’t my first rodeo. I’ve done tech transfer start ups in several provinces and managed projects for state owned companies. The scale of assistance granted to new companies the state wants is exponentially higher than non-Chinese companies are given in China or the US, and it’s not even close. It’s not just EV’s. It’s been the same for solar panels, tires, and pretty much any product the state wants to corner. This isn’t an attack against China, it’s actually very smart on their part to protect and incentivize tech development for their native companies. It keeps start ups costs low and profits high while giving them a competitive advantage in the international market. It’s just an answer to why Chinese EV’s are cheaper than Tesla and the major manufacturers that are moving toward producing EV’s.
I did and it makes sense. Lower start up costs, less R&D, local parts and labor, vertical integration, and streamlined Licensing. All things foreign producers have pay for every step along the way, to grease the wheels of bureaucracy in China. The local manufacturers have a competitive advantage producing and operating in China. It’s smart business. And thank god they’re not giving their money to a greedy technocrat like Musk. I’m not criticizing the model at all. It’s just more expensive for foreign entities to operate and sell in China than it is for local producers, which is why their products are cheaper. I’m not a Musk or Tesla fanboy. With the way Tesla and Musk operate, I hope they do have to compete against the Chinese EV’s everywhere. The more competition there is the cheaper the EV’s will be for everyone.
The subsidies given to Tesla alone over the last ten years are more than across all of Chinese automakers combined. Is it their fault that Tesla takes that money and pays Elon musk, while China is smart enough to force that money to be used for the company and the public’s benefit?
Oh and US and EU brands don't get subsidies, tax breaks, bailouts, huge deals for effectively free land for factories, just off the top of my head? Did you skip those lessons?
Just read the article. Bottom line: Chinese car makers get cheaper parts because they don't have to import them from China, they do things on a massive scale, and have in fact huge competition locally.
Sorry which Chinese brands are majority government owned? The ones owned by Stellantis? Or the ones listed on the Hong Kong stock exchange? Or the ones owned in joint partnerships with Western and Japanese car companies?
The amount of subsidies granted in China is exponentially higher than anywhere else, including China for non-Chinese companies. Free land, fund grants for industries they want like EV’s, low to 0 taxes, little to no regulatory oversight, government assistance with material sourcing and permit approval, income tax and housing benefits to key personnel, and on and on. Teaching isn’t my first rodeo. I’ve done tech transfer start ups in several provinces and managed projects for state owned companies. The scale of assistance granted to new companies the state wants is exponentially higher than non-Chinese companies are given in China or the US, and it’s not even close. It’s not just EV’s. It’s been the same for solar panels, tires, and pretty much any product the state wants to corner. This isn’t an attack against China, it’s actually very smart on their part to protect and incentivize tech development for their native companies. It keeps start ups costs low and profits high while giving them a competitive advantage in the international market. It’s just an answer to why Chinese EV’s are cheaper than Tesla and the major manufacturers that are moving toward producing EV’s.
Manufacturing processes, battery technology, microchip technology, etc. This is all known and documented. You're acting like this is some conspiracy theory, but it's all documented and known.
Okay, but this only explains how they caught up. It doesn't explain how their cars are cheaper.
And if you'd read the article, their R&D is actually a larger share of a car's sell value than their Western counterparts. In addition to not being explanatory, it's simply wrong.
>R&D is actually a larger share of a car's sell value
Sigh...
From the article...
>Instead, beyond government support, Chinese OEMs’ ability to price consistently below Western peers is driven by structural advantages: deeper vertical integration, greater scale, and lower overhead costs, including significantly cheaper R&D.
So...how do you think they get away with "significantly cheaper R&D"? I'll give you a minute.
They didn't catch up in a decade, they've been catching up since 1950, and acutely since 1990. It's also irrelevant. Even if IP theft was instrumental to China's meteoric rise in the last three decades, it would not explain the continued low cost of their new EVs that are more advanced than what is on offer in the West.
The answer to your question though is because China utterly dominates scientific research. 20 of the top 25 research institutes in the world are in China. Harvard has slipped from first to third for the first time since these rankings were made.
Walmart and Amazon method of capitalism. Give out cheaply made products until you have a foot hold and jack up the prices, while stunting innovation. Hell the other auto companies did the same in some respects.
Not China specifically, but there is recent historical precedent with Japanese and TVs. Starting in the 60s, Japanese companies sold TVs for super low prices. So low that American companies accused them of selling them at a loss. American companies couldn't price match and ended going out of business. I think the last American made TV was Zenith in like the late 80s.
That's not exactly true, they tried to raise the prices then Samsung (Korean's) got involved and figured out how to cut under them. They where so under water at that point they collapsed. Samsung has the entire Korean government backing them so they are unlikely to go under like them.
I imagine China is the only threat and they know if they raise the prices China is waiting.
As for the solar panels this is only half right. The Chinese government subsidizes wages and purchasing of materials for "Key Technologies" like solar panels. Often they have requirements for tech to be added to foreign purchasers to track or allow remote destruction.
That's because they're upgrading on existing technology and not going through the original R&D. But, the price dumping did what it was originally designed to do. Force American manufacturers out of business. And it worked as there wasn't an American TV manufacturer for 30-40 years. Even now, American manufacturers own a miniscule share of the market.
Americans lost the business of manufacturing televisions because they did not want to make the cheapest products for the most people but wanted to get large paydays. The same thing is happening in US automotive market, Detroit can't build cheap cars anymore because they can't accept low margins, so they build big trucks. And the reason Detroit can't build cheap cars is they have an oligopoly and don't compete. No Detroit brand will anymore bring out a cheap affordable model because that will cannibalize their expensive, upscale models aimed at the upper K of the K shaped economy.
This is seen all over the country, from drug prices to Las Vegas Casinos. They are all chasing the money, which is concentrated, and not chasing the consumer.
There's a lot of factors with why the US loss manufacturing of tvs. Product dumping by Japan, large margins for American companies like you said, higher cost of domestic manufacturing. As you say, the auto manufacturers have the same problem. Ironically enough going back to the 70s when Japanese cars were smaller, more fuel efficient (especially important during the oil crisis at the time), and more reliable.
There have been attempts at getting smaller, cheaper cars, but they failed (Saturn, Geo). It's why companies want to get monopolies, but they're illegal.
There is two parts to the comment from u/Tomicoatl that has to be addressed.
"Because they can afford to price things lower to crush competition"
"and once the market is gone they will increase the price."
Your comment only addresses the first part (for Japan initially, and not even China specifically). The more insidious accusation is actually the second part. TVs have not only gotten better but bigger, thinner, and cheaper.
So I'm asking for examples in which China (1) corners a market, puts the established players out of business, and then (2) increases the prices of the good in question to consumers.
Yeah, they are avoiding to answer. Xiaomi smartphones are comparable to iPhones and they are way cheaper (I keep using Apple because my whole digital system is Apple, but I had a Xiaomi a few years ago)
The Chinese have dumped commodities for export hundreds of times- specifically metals.
Their goal isn't exactly to "destroy the domestic manufacturers, then jack up prices."
Their goal is to recover some losses they will incur due to overproduction. So they get some state subsidies, export, and sell at a loss. The damage to domestic manufacturers is just a bonus for them.
Usually competition intensifies and this current round of market leaders will go bankrupt. China is the world’s fastest evolving market. Decisions are made in days instead of years like in the West.
They have had an EPA equivalent since the 1980s. They also have a carbon trading organization MEEE which manages carbon pollution. I do not know if it is strict their ten year plans get more ambitious each time.
They actually have very strict regulations that came earlier and more aggressive than American or European equivalents.(Depending on province, city etc, but importantly especially the giant metropolises enacted such regulations)
Because they're less beholden to the lobbying interests of oil and legacy car manufacturers they could implement these laws.
This created an internal market for cheap EVs that's twice as big as the US and Europe combined.
This doesn’t happen and you don’t have any legitimate evidence of this occurring. You are simply applying what you know that American businesses would do, onto China. If they gave us high quality and lower cost vehicles in order to crush the competition, only to then raise prices 50 years from now, to where the current domestic manufacturers pricing is today, I’d say that we would have still won out in the long run. Protecting US companies that are closing factories and replacing workers with robots, in order to sell us overpriced garbage vehicles that suck up so much of our income that we cannot afford other consumables…is not a win or anything to flex about.
Think about it this way. If Americans could purchase $15-20k vehicles today instead of the $35k lowest cost vehicles that we are currently being subjected to, we could be putting significantly more money into our local communities/economies. My suburban town would be ecstatic if there was an additional $20 million of money floating around to be spent instead of going to $800 monthly car payments.
That's in the short term though, cheaper China vehicles come at the cost of domestic auto industries. So there will be less jobs and the money spent on China cars goes back to China instead of the local economy. In the long term less people will be employed hence lower income and weakening of the local economy.
No because there is so much competition, their markets oddly enough are freer than say the US and Europe where ologopolies and regulatory capture rule.
In the US a trillionaire is a genius and scares politicians , in China he's possibly soon to be arrested for having too much power, that's the difference. While some companies like BYD are quite huge, their suppliers are in competition trying to out-innovate each other.
I mean, pretty much how every large store chain conquered the U.S. market.
Sears was notorious for buying all the appliances from Mom and pop shops and then reselling them at a loss so they'd go out of business. And once they were gone, Sears would jack up the price.
Cause the whole freakin country has been building manufacturing plants for the last two decades, whereas people in the west can't deal with a slightly higher demand for energy because they want to run some new AI computers.
If you had read the article, they quantify the subsidies and they are irrelevant. China excluding EV subsidies from the next 5 Year Plan is less a 'pulling the plug' and more a 'pushing the fledgling out of the nest.' Subsidies are unnecessary, the industry is booming, profitable, and well established. They're moving on to the next jump start project.
Because the battery shop is right down the street from the framing shop which is right around the corner from the engineers which are walking distance from the glass shop and they all get their steel from govt steel shops and lithium from govt lithium mines
They also built brand new factories, rather than trying to retrofit into an existing ICE factory. Even new plants that go in with the standard manufacturers are likely designed to cut back over to fabricating ICE vehicles with a little retooling.
Massive subsidization from the Chinese Communist Party in the hopes to become the dominant player in the EV market. Then, when other companies collapse, they can spike the price. It’s exactly how Rockefeller, Carnegie, JP Morgan and the other robber barons got so rich.
I was just in brasil and a byd there is R200k. That’s about $40k usd. Does anyone have any brochure or data on the actual price? How do we know that isn’t just the base model or some ice vehicle?
Did they normalize price for battery size? I feel like Americans want a larger battery pack with more range while other countries are okay with a cheaper car and less range.
Has anyone ever golfed? It's not like electric isn't better and been around forever. It's just been pushed aside for political reasons everywhere in the U.S. except for electric golf carts. Chinese electric vehicles are cheaper because they don't have an oil lobby in control of their government.
Feel like the article neglects to talk about how local governments in China have incentives for firms to over produce, china actually has pretty weak domestic demand and rely on a strategy of dumping as well as the other things mentioned in the article.
Chinese salaries are low, and they have extreme economies of scale with large domestic demand aswell as the benefit of integrating the entire supply chain in the same area, where parts, batteries etc might be manufactured just down the road from the assembly site leading to low lead times and cheap transport costs.
Honestly the biggest thing is that China has actually invested in manufacturing. Our companies invested in stock buybacks or paying executives more money. China invested in better factories, better infrastructure, and better logistics.
Chinese EVs are better priced than other EVs because of economies of scale, lower labor costs, and lower margins than other companies.
Chinese EVs are not cheap as most are higher build quality than U.S. EVs per comments from Ford CEO and Tesla's.
U.S. EV makers are focused on high profit margin mindset. The chinese EVs are volume focused and have had much more government support than other countries.
They're made to excel in the high congestion low average vehicle weight environment of Chinese megacities. Put them on high speed American roads with comparatively massive F-150s/SUVs and you're getting into a coffin with a battery.
By the time BYD adds the reinforced steel, structural mass, heavy battery shielding and other features to pass strict US FMVSS regulations, the cost of the vehicle skyrockets. Suddenly you'll find that the vehicle costs 30k instead of 10. And that's before any of the (bipartisan) 100% tarrifs on Chinese EVs.
Why isn’t anyone asking why are American EVs so inexpensive and inferior to boot. Or why do Americans expect 20 percent tips for ringing up your order in a take-away.
ahfoo | a day ago
I've written this in many other subreddits but I think it's still fresh here, so check it out:
In 1979, the Toyota Celica GT coupe, a two-door, rear wheel drive, 2.2 liter straight four with a single overhead cam and a 5 speed transmission that could get about 25 miles to the gallon cost $3000 off the showroom floor. They sold like hotcakes. They were fun to drive and cheap to own, operate and maintain. Parts were cheap and the engines were bulletproof easily lasting 300,000 miles and more.
In today's money, that is US$13,000.
Chinese EVs are not cheap, they're the same price that Toyota was selling cars in California for in 1979 when adjusted for inflation. Those Chinese EVs are about the same price the early Toyotas were selling for.
No, those cars are not cheap at all. Instead, what you're seeing is that there has been a massive inflation of the price of automobiles in the United States along with a persistent sales pitch that says "Americans no longer want small cars and everybody loves SUVs now." which is complete and utter bullshit. I don't want an SUV or a 4-door boat and I don't know anybody who wants this bloated overpriced crap. People buy it because nothing else is available.
There's your problem. The US auto market is fundamentally corrupt and should be wiped out to reset us back to the actual prices that cars cost to manufacture and drop all this digital nonsense nobody asked for. I'll put in my own aftermarket stereo, thanks.
PestilentMexican | 21 hours ago
Your 100% on point, except for the size of cars. That is due to CAFE emissions standards that for small vehicles demanded ever high fuel efficiency but made a carveout for “trucks” which SUVs, crossovers and of course pickups are classified as. Something about the ratio of the area of the car’s footprint to the fuel efficiency which is why you cannot buy small pickups anymore. The best deal are small RAV4 but those are hybrids and can hit 40 mpg but still technically classified as a “truck”.
I’m all for emissions standards they’ve made this countries air breathable again but these carveouts have become a massive loophole which has lead to huge vehicles on our roads.
KillahHills10304 | 5 hours ago
Also killed the station wagon (along with marketing crossovers that look like blobs as somehow "cooler" than a wagon). Id dig it if a shooting brake was sold in the US. If I was a dad id be in a wagon or a lowered minivan.
goblueM | a day ago
>Americans no longer want small cars and everybody loves SUVs now." which is complete and utter bullshit. I don't want an SUV or a 4-door boat and I don't know anybody who wants this bloated overpriced crap.
I mean people freaking LOVE ginormous vehicles. They love SUVs. They love crossovers.
Personally I think it's insane. But the general public doesn't. There's a reason giant trucks and SUVs blow sedans and small trucks away in sales
gc3 | 17 hours ago
The margins are higher on trucks. Detroit doesn't want less margin and discourages cheaper cars. Dealers want more per sale. It's the same mechanic if sling more expensive items to less people that has made the economy K shaped
markthelast | 15 hours ago
Relatively cheap gasoline in the U.S.A. plays a big part to Americans buying crossover SUVs and big trucks. Imagine paying double U.S. gas prices in some European countries or paying 4x U.S. prices in Hong Kong. Most drivers dealing with persistent high gas prices will buy smaller cars and wagons (in Europe) versus mid-size/large SUVs and trucks.
Also, the marketing is powerful. The commercials work. The manufacturers have better profit margins on bigger cars especially on crossovers, which are usually based on the same sedan platform. The incentive for manufacturers is to push crossover SUVs at the expense of other cars like sedans, compacts, and sports cars.
A few summers ago, I remember paying $5+/gallon for weeks, and I heard the complaining and grumbling of other drivers, who were not happy about high prices. Understandable, my car got ~20 MPG (V6 drinks a lot in city driving). At the same time, a lot of their cars were older SUVs or trucks that got 20 MPG or less, so unless it was for work, buying inefficient large vehicles was going to be painful to refuel. Most people do not think about the prospects of long-term consequences to operating an inefficient vehicle, where oil prices can spike from various factors like embargoes (1967 Oil Embargo), wars/conflict (1979 oil crisis from Iranian Revolution), and refinery shutdowns (2025-2026 California).
Interesting-Bet-1702 | 19 hours ago
> mean people freaking LOVE ginormous vehicles. They love SUVs. They love crossovers.
For the record, it's also a fact that the people who buy SUVs are more aggressive than other drivers. Many buy large vehicles in the hope it makes them safer despite less actual safety features. US Auto Manufacturers quite literally stroke people's egos with their commercials. Also, on average, they are far more likely to swerve to intentionally hit animals on the road.
These brand new SUV's are generally only affordable to someone who's some shade of wealthy and those people are more often dickheads.
dantevonlocke | 21 hours ago
They can't buy anything else(sedans aren't being made) combined with keeping up with the joneses thinking. I drive an Impala, something not made anymore. If I wanted a 4 door sedan from Chevrolet the only option is a Malibu.
biggronklus | 21 hours ago
A person can easily buy a Camry or Corolla now and spend less money than they would on a truck, crossover, or suv but they don’t lol
dantevonlocke | 20 hours ago
And I point out in another comment that Toyota makes 3 different sedans where chevy makes 1 now. Some people won't buy a toyota( their losss). Ford makes 0 for the us market, so loss of availability is a thing.
Envy_MK_II | 41 minutes ago
There were 248,088 Corollas sold in 2025, 316,185 Camrys. They are the 11th and 8th top sold vehicles in the US.
They outsold Wrangler, Maverick, Grand Cherokee, Explorer etc.
Hell the only reason the F-Series outsells everything else is because they roll up every single F-Series Model from the F-150 to the F-750 commercial vehicles.
ComradeKlink | 4 hours ago
Anyone going online to shop for cars in the US knows this just isn't true, there are still a massive number of options for all kinds. There are other convincing reasons why American's tend to buy bigger cars than the rest of the world, but this one isn't. The market supplies for demand.
dantevonlocke | 2 hours ago
Ford stopped making them. Chrysler stopped making them. Buick stopped making them. Chevy only makes 1 now. If you think that's not affecting things you're ignorant. Toyota seems to be the only brand making affordable ones.
Envy_MK_II | 41 minutes ago
Honda technically as well.
noid83 | 17 hours ago
Was listening to a podcast once where they talked about the US market pre Japanese cars. There was an expectation that cars would break down all the time, so servicing was as much a part of the sales relationship as the cars themselves.
It wasn’t until the Japanese cars came on board that the US consumers started to demand cars that didn’t break down.
Sometimes incumbents get lazy and spend more time spending money to protect their market through lobbying than spending their money innovating their product
nosecohn | 17 hours ago
You make some good points, but there are other factors at play.
Consumers do generally prefer larger vehicles these days, even when they're not SUVs. Small models, like a Corolla or Accord, are larger due to consumer demand. And increasing incomes since 1979 have meant higher overall demand for cars, driving prices up.
On top of that, the goverment has mandated quite a few safety features during that time, including crumple zones, airbags, anti-lock brakes and stability control, all of which increase cost.
They also add weight, thereby lowering fuel economy. Today's version of a Toyota Corolla weighs about 50% more than the one they made in 1980.
FLUFFERNUTTER35 | 15 hours ago
I just got back from Mexico where I rented 2 BYDs, a dolphin and a Tang. And all I can say is, American cars are done. The build and ride quality was great. The tech was great, and they're so affordable. We may ban there sales in the US, but they are going to destroy us everywhere else
Potential4752 | a day ago
Im pretty sure that your personal taste in vehicle size doesn’t prove anything. Whether or not marketing had an impact, Americans want large vehicles. Small vehicles are available and they don’t sell well.
Also, corruption doesn’t make much sense either. The profit margins for these companies is public information and they do not explain the big price difference.
Same_Kale_3532 | a day ago
It does, if you look at environmental standards in the USA which exempts commercial vehicles from emission standards (Vans, trucks, Hummers, SUVs regardless if they're use commercial or not), along with a 50% tariff on imported small cars due to the Chicken Tax, and America insisting on its own auto standards difference from the EU and a good deal of the world's industrialized countries and you have an effectively semi-isolated market. That and if you account for inflation and look at the number of Us cars that actually sells below 20,000, it's a pitable amount there really isn't much choice if you want to buy a small car. Plus American trucks tend to be so big that they literally can't fit in the streets of a lot of European and Asian countries.
Personally I believe the Chinese saw this as a strategic thing, like the military it was a major vulnerability that China had to import so much oil so they developed solar power, wind power, and EVs
Potential4752 | a day ago
Except small cars are still cheaper than trucks and SUVs. You can’t say Americans don’t like big cars when they are paying more for them.
Sure, we would buy more small cars if they were * a lot * cheaper, but that is not a he same thing.
Same_Kale_3532 | a day ago
Oh I agree with you Americans are wealthy and buy a lot more luxury features one of which is size, but I am also pointing out that big cars receive a lot of regulatory advantages and the result is probably a lot more skewed towards gas guzzlers than it should be.
I don't think it's controversial to say that this is pretty anti-poor, America's designed to be car centric and the lack of economic cars really disadvantages the poor. And there's all the side effects from the air pollution causing cancer and killing people, wear on roads, and general fuel economy.
02meepmeep | a day ago
I’m an American & I want a damn 2 door stick shift rear wheel drive car with a boxer engine that also has a shockingly low curb weight so it’s fast as hell and absolutely invigorating to drive. I freaking bought that exact car. They don’t make that car at any American manufacturer.
Werewolf1810 | 22 hours ago
I’m happy you found that, but honestly, I think most Americans would agree when I say that sounds awful. Almost every part
Interesting-Bet-1702 | 19 hours ago
>I think most Americans would agree when I say that sounds awful.
The majority of Americans who buy trucks and suv's only use them for commuting to work and buying groceries. Not many people genuinely need a new SUV or Truck for practical purposes it's entirely a flex for upper middle class and above.
Werewolf1810 | 16 hours ago
I agree; I have no interest in a supermassive vehicle either. But I sure as hell don’t want a tiny manual either
Interesting-Bet-1702 | 16 hours ago
That's fair. My ideal vehicles would be a small pickup truck and a 4 door sedan. Trucks good for yard work and stuff but the sedan is better for basically everything else.
AltruisticGrowth5381 | 17 hours ago
"Your truck doesn't even weigh 4 tons, what are you, some kinda homosexual?"
Werewolf1810 | 16 hours ago
I dunno about that, I’m just over here like I don’t want to deal with paying for gas, transmissions, constant maintenance, gas stations, harmful emissions….
02meepmeep | 22 hours ago
It gets 28 MPG.
Werewolf1810 | 22 hours ago
Sure, but I don’t even use gasoline. Just my perspective
Inevitable_Train1511 | 20 hours ago
This is why I’ve held onto my 1993 Geo Metro which still runs perfectly and is a blast to drive
Potential4752 | 23 hours ago
I have something very similar. It’s clearly not as popular as larger vehicles, which is a shame.
MidnightSensitive996 | 21 hours ago
you'd be better off putting a subaru EJ into a miata
dantevonlocke | 21 hours ago
Wish we could get a new version of the '95 S10.
Envy_MK_II | 38 minutes ago
The only small vehicles available are all Imports.
Camry, Civic and Corolla still sell really well in the US.
Civic was the 12th most sold vehicle in the US, Corolla, 11th, Camry 8th. They beat out many large SUVs.
Hell the CRV and RAV4 are smaller SUVs and they sell better than the largest vehicles.
The F-Series being number one is basically because the roll up the entire F-Series line up from the 150 - 750s as they include all their commercial vehicles sales.
There are something like 300 different models sold in the US.
higgs8 | a day ago
I'm in Europe where we don't have such large cars and Chinese EVs are still cheaper than most other EVs. Compare the BYD Dolphin Surf to any other EV, and it's the cheapest with a few exceptions. None of these are large cars: Fiat 500, Renault R5, Opel Frontera, Hyundai Inster, Citroen e C3, Fiat Grande Panda, Dacia Spring, Leapmotor T03 (the latter is the cheapest of the list, with the BYD being second cheapest).
The reason is Chinese labour is cheaper than French, German or Italian labour. The rare earths needed for their batteries is mined locally in China and does not need to be imported, when everyone else has to buy them from China. The BYD would be even cheaper if there weren't import taxes on them, which is in place to give the European brands a chance at being competitive.
eyeap | 22 hours ago
>when everyone else has to buy them from China.
And also no environmental controls. People I work with who grew up in China have brown teeth due to no pollution controls.
AltruisticGrowth5381 | 17 hours ago
Let's be honest it's not like the US has much better environmental laws. I've been in LA and Beijing, the smog was worse in LA.
rationalomega | 15 hours ago
Time of year? I spent three weeks in Beijing in spring time and the PPM went into the purple zone on many of those days.
AltruisticGrowth5381 | 14 hours ago
Middle of summer for both.
Misschienn | 11 hours ago
Smog mostly occurs in Winter in Beijing
ComradeKlink | 4 hours ago
Smog in major cities isn't really a good indicator of regulatory protections. I'd be more concerned with use of coal, processing of heavy metals, and industrial waste disposal.
markthelast | 12 hours ago
Also, processing rare earths is capital/energy intensive and extremely dirty, so other countries are not motivated to do that work until recently. China was willing and chose to dominate the processing market for rare earths as well as graphite and other key materials for critical components like batteries of all sizes ranging from smartphone batteries to batteries for EV cars. China's dominance in rare earths processing allows them to crash prices, which cripples and/or bankrupts upstart foreign rare earth processing companies trying to scale up and to reach profitability.
MidnightSensitive996 | 21 hours ago
the issue are fuel efficiency standards, fix those and car sizes and costs shrink
HeadPaleontologist40 | 19 hours ago
US auto needs to die.
Kitchen-Nectarine179 | 3 hours ago
>In 1979, the Toyota Celica GT coupe, a two-door, rear wheel drive, 2.2 liter straight four with a single overhead cam and a 5 speed transmission that could get about 25 miles to the gallon cost $3000 off the showroom floor.
The MSRP for a '79 Celica GT was around $6,000 ($5,259-$6,559 depending on options)... which is $28,572 adjusted for inflation.
A 2026 Corolla has an MSRP around $23,000.
But sure, just keep spreading nonsense.
desire_reds | a day ago
How can you possibly compare a car from the 70s to one from today nearly half a century later?
Your Toyota has more in common with a modern riding mower than a modern car. No fuel injection, no abs, no airbags, no rear view camera, and hardly any crash safety.
retrojoe | a day ago
So that justifies the tripling in price? You can't buy anything like a Geo Metro anymore either.
ImDonaldDunn | a day ago
There are still relatively cheap new cars adjusted for inflation, but yes nothing quite cheap as the Geo Metro.
darkmoon72664 | 39 minutes ago
The original commenter is lying about the MSRP -- it was ~$6,300, which is about $30,000 even today. That's almost exactly the same as a modern Camry that's miles better at everything.
desire_reds | 23 hours ago
How's the same price triple they just said the Chinese car was 13k
retrojoe | 22 hours ago
🫠 you said new Toyotas are 'so complicated', and I asked you if that means new Toyotas being triple the the inflation-adjusted price of the old ones is justified.
Even 20 years ago we had Geo Metros that were significantly cheaper and highly comparable to the old Toyotas.
desire_reds | 17 hours ago
I did not say that. I said a car from the 70s and a car from today. Follow the comment chain.
mojo276 | a day ago
They make bigger cars because rules and regulations have forced their hand to make the bigger cars that can more easily absorb the cost of the required specs that didn't exist in 1979. Also, I think if people actually wanted those smaller cars, they would have sold better and they'd keep them around. The USA is a car centric country, so it makes sense that people would be more willing to spend on bigger/more comfortable cars.
The fact that you can spout off the stuff about that 1979 car means you're in a small fraction of a fraction of a percent of people and think about cars in a very different way then the majority of people.
oreography | a day ago
What rules and regulations would prevent everybody buying a hatchback or station wagon?
It’s not like the alternatives don’t exist, they just make less money for the auto manufacturer. The average SUV has less cargo space than a station wagon but is heavier and outputs more emissions.
mojo276 | a day ago
You said it your self "they make less money". If you made 2 things, and one sold for more and made you more money, would you really spend time making the other one? I bet not.
The rules/regulations change the cost needed to create the thing in the first place, which eats into profits. Small trucks are an example, when we made stricter MPG rules, it raised the price to make the small truck, which made it more expensive. Big trucks were exempt from these rules, so it was more profitable to make them. Better breaking systems, better crash performance, more technologies...all of these raise the baseline cost to make the thing, which as a percentage of the whole is bigger on smaller/cheaper cars. It doesn't prevent anything, but it raises the cost of a cheaper car by a bigger percentage than a more expensive car.
A lot of this is just like how people all say they want smaller smart phones, but then companies release smaller phones and no one buys them, so they quit making them.
oreography | 22 hours ago
Well exactly, it benefits the company not the consumer.
Why should we be simping for auto manufacturers, when its consumers rights that matter? We are paying more with our health for all these trucks on the road, which also cost society in terms of road maintenance, pedestrian deaths (oops I’m too high up to see you), etc. They barely even fit into a standard parking space.
If Ford, Dodge and all the yank tank manufacturers make less money, I’m not going to shed a single tear. In reality, these vehicles should be taxed higher so that only actual tradespeople that need trucks buy them, rather than the cowboy cosplayers and suburban mums. We need more regulation of these vehicles, not less.
Interesting-Bet-1702 | 19 hours ago
Everything you just said is an example of auto manufacturers shirking the bill for justified ecological and safety regulations onto consumers, and now anyone who isn't upper class has been priced out of buying a car with 0 miles.
dantevonlocke | 21 hours ago
Toyota makes 3 different 4 door sedans. Chevy makes 1.
xiaopewpew | 12 hours ago
The cheap Chinese EVs aint all small though.
Im curious why you choose to fixate on American consumer preference over, say, how China owns supplychain of car production and how heavily Chinese government subsidizes EV production in China.
I dont know if you noticed average American seem much bigger than an average Chinese. Im barely 6ft1, average build and im seriously cramped up in my driver’s seat whenever i rent a sedan to travel. Americans buy bigger cars to wrap around their bigger asses.
SomebodiesGotttaDoIt | a day ago
Lower regulatory overhead and more competition. Amazing how the communists have developed a closer approximation of capitalism than we have in the U.S. nowadays…
AnthraxCat | 23 hours ago
Not really.
Lower regulatory overhead is true, but this isn't really China specific. Rather, it reflects that Chinese companies largely sell to the Chinese market. This simplifies their regulatory overhead, sales, and management costs by quite a bit. They are subject to less regulatory overhead as a result, but this is a deliberate business choice rather than a characteristic of their operations in China.
And they are actually benefiting from less competition, not more. Vertical integration is what makes cars cheap, offering the biggest price differential observed by these authors. To make their balance sheets appear leaner and appease shareholders, Western firms have spun off their supply chains. The Chinese companies are not subject to that pressure. They don't need to demonstrate high labour productivity or efficiency, they need to build cars.
>the communists have developed a closer approximation of capitalism than we have in the U.S. nowadays…
There is no Ur-Capitalism, with Beijing or Washington being truer than the other to it. What we are seeing is a difference in vision of capitalist development. China is much more similar to the Fordist capitalism of the early 20th century. The West has chosen a different route, abandoning the Ford-Keynes model for a post-modern, highly financialised capitalism. These are both capitalisms, both have their trade offs, benefits, and reasons for existing in their current form as capitalism evolves to address its own contradictions.
CattywampusCanoodle | 17 hours ago
I’ve always been a big fan of the Ford-Keynes model of capitalism as soon as I learned about the Ford model of paying workers enough to buy their own products to create a positive feedback loop of consumer consumption, profit, and growth. The US was handed on a silver platter an exclusive juggernaut of economic success in the 50’s because of WWII that spanned the socioeconomic spectrum, but threw it away for a different model that made executives even more rich.
Everybody in society wins with the Ford-Keynes model. The consumers, the workers, and the highest paid executives. It creates both a strong economy, and an economy that’s strong through to the core. I guess cheap goods “now” was just too enticing to ignore for the greater good of the future. Instead of planting trees whose shade we wouldn’t sit under, we cut existing ones down and didn’t save the seeds
goaliedaddy | a day ago
More competition? I think you mean they are state sponsored and get regulatory assistance to be cheaper than their competitors that have to operate with actual competition and front their own up front costs and are responsible to investors that demand ROI. It’s amazing how much easier make a cheap product when the state is your major shareholder and only cares about under cutting and eliminating capitalist competition. But what do I know? I just teach economics
retrojoe | a day ago
Then why can't you read the article and respond to the plant costs, licensing, and cheaper R&D factors? If you'd bothered to read this, you'd know that this about comparing manufacturing plants/product in China, for all the manufacturers, and they do account for state subsidy.
SomebodiesGotttaDoIt | a day ago
No one is impressed by an economics teacher… You don’t know shit about China.
goaliedaddy | 23 hours ago
I replied this below and I’m pasting it here because you seem offended by my answer and felt the need to insult me.
The amount of subsidies granted in China is exponentially higher than anywhere else, including China for non-Chinese companies. Free land, fund grants for industries they want like EV’s, low to 0 taxes, little to no regulatory oversight, government assistance with material sourcing and permit approval, income tax and housing benefits to key personnel, and on and on. Teaching isn’t my first rodeo. I’ve done tech transfer start ups in several provinces and managed projects for state owned companies. The scale of assistance granted to new companies the state wants is exponentially higher than non-Chinese companies are given in China or the US, and it’s not even close. It’s not just EV’s. It’s been the same for solar panels, tires, and pretty much any product the state wants to corner. This isn’t an attack against China, it’s actually very smart on their part to protect and incentivize tech development for their native companies. It keeps start ups costs low and profits high while giving them a competitive advantage in the international market. It’s just an answer to why Chinese EV’s are cheaper than Tesla and the major manufacturers that are moving toward producing EV’s.
Zoolok | 22 hours ago
You really need to read the article you're commenting on.
goaliedaddy | 21 hours ago
I did and it makes sense. Lower start up costs, less R&D, local parts and labor, vertical integration, and streamlined Licensing. All things foreign producers have pay for every step along the way, to grease the wheels of bureaucracy in China. The local manufacturers have a competitive advantage producing and operating in China. It’s smart business. And thank god they’re not giving their money to a greedy technocrat like Musk. I’m not criticizing the model at all. It’s just more expensive for foreign entities to operate and sell in China than it is for local producers, which is why their products are cheaper. I’m not a Musk or Tesla fanboy. With the way Tesla and Musk operate, I hope they do have to compete against the Chinese EV’s everywhere. The more competition there is the cheaper the EV’s will be for everyone.
trapezoidalfractal | 22 hours ago
The subsidies given to Tesla alone over the last ten years are more than across all of Chinese automakers combined. Is it their fault that Tesla takes that money and pays Elon musk, while China is smart enough to force that money to be used for the company and the public’s benefit?
SomebodiesGotttaDoIt | 23 hours ago
I’m offended by your self aggrandizing and ignorance…
Zoolok | a day ago
Oh and US and EU brands don't get subsidies, tax breaks, bailouts, huge deals for effectively free land for factories, just off the top of my head? Did you skip those lessons?
JohnnyDemocraseed | a day ago
Shhh! If you ignore facts like that the daddy's boot leather tastes much sweeter.
Zoolok | a day ago
The teacher didn't even read the (really well written) article.
dready | a day ago
Those don't even come close to what is done for state owned organizations in China.
Corporate welfare still pisses me off. But it isn't comparable in scale.
Zoolok | a day ago
Just read the article. Bottom line: Chinese car makers get cheaper parts because they don't have to import them from China, they do things on a massive scale, and have in fact huge competition locally.
trapezoidalfractal | 22 hours ago
Most Chinese automakers are not state owned…
BlueCity8 | a day ago
So Tesla didn’t get any of those things from the Obama admin?
Zoolok | a day ago
What do you mean?
Famous_Bit_5119 | a day ago
Why is oil so expensive when they get government subsidies?
Traum77 | a day ago
Sorry which Chinese brands are majority government owned? The ones owned by Stellantis? Or the ones listed on the Hong Kong stock exchange? Or the ones owned in joint partnerships with Western and Japanese car companies?
Same_Kale_3532 | a day ago
Well then you're very bad teacher with some pretty bad info.
goaliedaddy | 23 hours ago
The amount of subsidies granted in China is exponentially higher than anywhere else, including China for non-Chinese companies. Free land, fund grants for industries they want like EV’s, low to 0 taxes, little to no regulatory oversight, government assistance with material sourcing and permit approval, income tax and housing benefits to key personnel, and on and on. Teaching isn’t my first rodeo. I’ve done tech transfer start ups in several provinces and managed projects for state owned companies. The scale of assistance granted to new companies the state wants is exponentially higher than non-Chinese companies are given in China or the US, and it’s not even close. It’s not just EV’s. It’s been the same for solar panels, tires, and pretty much any product the state wants to corner. This isn’t an attack against China, it’s actually very smart on their part to protect and incentivize tech development for their native companies. It keeps start ups costs low and profits high while giving them a competitive advantage in the international market. It’s just an answer to why Chinese EV’s are cheaper than Tesla and the major manufacturers that are moving toward producing EV’s.
ProbablyJustArguing | a day ago
Plus less r and d costs because they steal the tech and don't care about intellectual property
AnthraxCat | a day ago
Except Chinese cars are more advanced than their Western counterparts at this point. What is there to steal?
Same_Kale_3532 | a day ago
That and Chinese EV makers were the only ones who took up Elon's marketing stunt when he offered his Tech stack for free to gain environmental cred.
ProbablyJustArguing | 22 hours ago
Manufacturing processes, battery technology, microchip technology, etc. This is all known and documented. You're acting like this is some conspiracy theory, but it's all documented and known.
AnthraxCat | 17 hours ago
Okay, but this only explains how they caught up. It doesn't explain how their cars are cheaper.
And if you'd read the article, their R&D is actually a larger share of a car's sell value than their Western counterparts. In addition to not being explanatory, it's simply wrong.
ProbablyJustArguing | 5 hours ago
>Okay, but
Sigh.
>R&D is actually a larger share of a car's sell value
Sigh...
From the article...
>Instead, beyond government support, Chinese OEMs’ ability to price consistently below Western peers is driven by structural advantages: deeper vertical integration, greater scale, and lower overhead costs, including significantly cheaper R&D.
So...how do you think they get away with "significantly cheaper R&D"? I'll give you a minute.
ProbablyJustArguing | 23 hours ago
I'm sorry but how do you think they caught up with the rest of the world in a decade?
AnthraxCat | 23 hours ago
They didn't catch up in a decade, they've been catching up since 1950, and acutely since 1990. It's also irrelevant. Even if IP theft was instrumental to China's meteoric rise in the last three decades, it would not explain the continued low cost of their new EVs that are more advanced than what is on offer in the West.
The answer to your question though is because China utterly dominates scientific research. 20 of the top 25 research institutes in the world are in China. Harvard has slipped from first to third for the first time since these rankings were made.
cleverbeavercleaver | a day ago
Walmart and Amazon method of capitalism. Give out cheaply made products until you have a foot hold and jack up the prices, while stunting innovation. Hell the other auto companies did the same in some respects.
Tomicoatl | a day ago
Because they can afford to price things lower to crush competition and once the market is gone they will increase the price.
ratbearpig | 23 hours ago
What are real world examples of the Chinese doing this?
They have dominated Solar for decades and pricing continues to decrease annually.
Thin_Bother8217 | 19 hours ago
Not China specifically, but there is recent historical precedent with Japanese and TVs. Starting in the 60s, Japanese companies sold TVs for super low prices. So low that American companies accused them of selling them at a loss. American companies couldn't price match and ended going out of business. I think the last American made TV was Zenith in like the late 80s.
gc3 | 18 hours ago
And TVs have continued to drop in price. So this is a non-example
SEND-MARS-ROVER-PICS | 11 hours ago
Japan also isn't China, which I feel isn't something that can be handwaved away like that.
MrNoSouls | an hour ago
That's not exactly true, they tried to raise the prices then Samsung (Korean's) got involved and figured out how to cut under them. They where so under water at that point they collapsed. Samsung has the entire Korean government backing them so they are unlikely to go under like them.
I imagine China is the only threat and they know if they raise the prices China is waiting.
As for the solar panels this is only half right. The Chinese government subsidizes wages and purchasing of materials for "Key Technologies" like solar panels. Often they have requirements for tech to be added to foreign purchasers to track or allow remote destruction.
Thin_Bother8217 | 17 hours ago
That's because they're upgrading on existing technology and not going through the original R&D. But, the price dumping did what it was originally designed to do. Force American manufacturers out of business. And it worked as there wasn't an American TV manufacturer for 30-40 years. Even now, American manufacturers own a miniscule share of the market.
gc3 | 4 hours ago
Americans lost the business of manufacturing televisions because they did not want to make the cheapest products for the most people but wanted to get large paydays. The same thing is happening in US automotive market, Detroit can't build cheap cars anymore because they can't accept low margins, so they build big trucks. And the reason Detroit can't build cheap cars is they have an oligopoly and don't compete. No Detroit brand will anymore bring out a cheap affordable model because that will cannibalize their expensive, upscale models aimed at the upper K of the K shaped economy.
This is seen all over the country, from drug prices to Las Vegas Casinos. They are all chasing the money, which is concentrated, and not chasing the consumer.
Thin_Bother8217 | 4 hours ago
There's a lot of factors with why the US loss manufacturing of tvs. Product dumping by Japan, large margins for American companies like you said, higher cost of domestic manufacturing. As you say, the auto manufacturers have the same problem. Ironically enough going back to the 70s when Japanese cars were smaller, more fuel efficient (especially important during the oil crisis at the time), and more reliable.
There have been attempts at getting smaller, cheaper cars, but they failed (Saturn, Geo). It's why companies want to get monopolies, but they're illegal.
chrispark70 | 3 hours ago
"And the reason Detroit can't build cheap cars is they have an oligopoly and don't compete. "
You can't be this stupid?
gc3 | 2 hours ago
I don't know can you?
ratbearpig | 17 hours ago
There is two parts to the comment from u/Tomicoatl that has to be addressed.
Your comment only addresses the first part (for Japan initially, and not even China specifically). The more insidious accusation is actually the second part. TVs have not only gotten better but bigger, thinner, and cheaper.
So I'm asking for examples in which China (1) corners a market, puts the established players out of business, and then (2) increases the prices of the good in question to consumers.
Total_Literature_809 | 9 hours ago
Yeah, they are avoiding to answer. Xiaomi smartphones are comparable to iPhones and they are way cheaper (I keep using Apple because my whole digital system is Apple, but I had a Xiaomi a few years ago)
Main_Chance_4846 | 16 hours ago
I can give you an organisation that did it in Australia, different industry.
Bunnings.
Priced out all independant and chained hardware stores.
Now, you want something. Only place to go is bunnings, shit quality at high prices.
ratbearpig | 10 hours ago
Is Bunnings a Chinese company operating in Australia?
Ok-Collection5629 | 2 hours ago
Bunnings tried that in the UK. No one shopped there cheap or not and they had to sell up and leave loosing millions.
Bunnings is not Cheneaess
homecet346 | 10 hours ago
How old are you?
ratbearpig | 10 hours ago
OK. I’ll bite. Why does this matter to you?
homecet346 | 10 hours ago
Things have changed a lot. I'm 40s. So I wanted a bearing.
homecet346 | 10 hours ago
I personally witnessed industrial espionage a decade ago in Tokyo and Atlanta by Chinese actors
ratbearpig | 10 hours ago
"Things have changed a lot. I'm 40s. So I wanted a bearing."
I can agree that things have changed a lot. Not only that, but the pace of change, and the scale of change in the last 40 years has been astonishing.
homecet346 | 10 hours ago
Velocity and acceleration are different... true. Didn't answer my question
ratbearpig | 10 hours ago
Ahh, OK. For clarity, I don't plan to answer your question on age as I'm not sure how its connected.
homecet346 | 10 hours ago
The reason is to get a bearing on your perception. I would prefer a conversation with some mutual understanding
ratbearpig | 10 hours ago
I get the intent. And if this conversation were taking place in person, I would be more obliging. I'm not a teenager. I'll leave it at that.
NeverPlayF6 | an hour ago
The Chinese have dumped commodities for export hundreds of times- specifically metals.
Their goal isn't exactly to "destroy the domestic manufacturers, then jack up prices."
Their goal is to recover some losses they will incur due to overproduction. So they get some state subsidies, export, and sell at a loss. The damage to domestic manufacturers is just a bonus for them.
NeedleGunMonkey | 13 minutes ago
Microwaves.
fluffysnowflake67 | 23 hours ago
Usually competition intensifies and this current round of market leaders will go bankrupt. China is the world’s fastest evolving market. Decisions are made in days instead of years like in the West.
eyeap | 22 hours ago
And no EPA
fluffysnowflake67 | 21 hours ago
Emissions add so much cost to American EVs….
R-ten-K | 21 hours ago
LOL
eyeap | 20 hours ago
Manufacturing involving heavy metals causes water pollution if there's no EPA.
Without an EPA, you can save tons on decontamination.
gc3 | 17 hours ago
They have had an EPA equivalent since the 1980s. They also have a carbon trading organization MEEE which manages carbon pollution. I do not know if it is strict their ten year plans get more ambitious each time.
fluffysnowflake67 | 19 hours ago
You do realize many of the components for American EVs come from Chinese and other Asian suppliers?
gc3 | 18 hours ago
They do have air regulations, some quite strict, depending on the province
Scared-Gazelle659 | 13 hours ago
They actually have very strict regulations that came earlier and more aggressive than American or European equivalents.(Depending on province, city etc, but importantly especially the giant metropolises enacted such regulations)
Because they're less beholden to the lobbying interests of oil and legacy car manufacturers they could implement these laws.
This created an internal market for cheap EVs that's twice as big as the US and Europe combined.
TechGentleman | 20 hours ago
Just like the U.S. as of this week.
Fullertonjr | 21 hours ago
This doesn’t happen and you don’t have any legitimate evidence of this occurring. You are simply applying what you know that American businesses would do, onto China. If they gave us high quality and lower cost vehicles in order to crush the competition, only to then raise prices 50 years from now, to where the current domestic manufacturers pricing is today, I’d say that we would have still won out in the long run. Protecting US companies that are closing factories and replacing workers with robots, in order to sell us overpriced garbage vehicles that suck up so much of our income that we cannot afford other consumables…is not a win or anything to flex about.
Think about it this way. If Americans could purchase $15-20k vehicles today instead of the $35k lowest cost vehicles that we are currently being subjected to, we could be putting significantly more money into our local communities/economies. My suburban town would be ecstatic if there was an additional $20 million of money floating around to be spent instead of going to $800 monthly car payments.
ff56k | 7 hours ago
That's in the short term though, cheaper China vehicles come at the cost of domestic auto industries. So there will be less jobs and the money spent on China cars goes back to China instead of the local economy. In the long term less people will be employed hence lower income and weakening of the local economy.
Alone_Step_6304 | an hour ago
> So there will be less jobs
That's already happening.
> In the long term less people will be employed
That's already happening.
> hence lower income
That's already happening.
> weakening of the local economy.
That's already happening.
SonuOfBostonia | 21 hours ago
Is there any instance of them increasing the prices in the past with other tech?
Boyhowdy107 | 20 hours ago
So... Uber and taxis
HeadPaleontologist40 | 19 hours ago
Hasn’t happened to smartphones. Doubt it happens to EVs.
gc3 | 18 hours ago
No because there is so much competition, their markets oddly enough are freer than say the US and Europe where ologopolies and regulatory capture rule.
In the US a trillionaire is a genius and scares politicians , in China he's possibly soon to be arrested for having too much power, that's the difference. While some companies like BYD are quite huge, their suppliers are in competition trying to out-innovate each other.
DingGratz | 8 hours ago
I mean, pretty much how every large store chain conquered the U.S. market.
Sears was notorious for buying all the appliances from Mom and pop shops and then reselling them at a loss so they'd go out of business. And once they were gone, Sears would jack up the price.
nicolas42 | 21 hours ago
Cause the whole freakin country has been building manufacturing plants for the last two decades, whereas people in the west can't deal with a slightly higher demand for energy because they want to run some new AI computers.
Ok-Collection5629 | 2 hours ago
No one wants ai
linjun_halida | 22 hours ago
Big market and big industry, It reduce design cost to minimum, So parts are mostly resource cost.
tikolman | 22 hours ago
Because its subsidized silly! CCP will pull the plug soon and let the market forces decide.
https://www.reuters.com/business/autos-transportation/china-signals-it-will-pull-plug-subsidies-evs-with-five-year-plan-exclusion-2025-10-29/
AnthraxCat | 17 hours ago
If you had read the article, they quantify the subsidies and they are irrelevant. China excluding EV subsidies from the next 5 Year Plan is less a 'pulling the plug' and more a 'pushing the fledgling out of the nest.' Subsidies are unnecessary, the industry is booming, profitable, and well established. They're moving on to the next jump start project.
oasiscat | 16 hours ago
Technically, that's how subsidies are supposed to be done .
TeacherOfFew | 19 hours ago
The highest bribes come from the winners.
Bob4Not | 21 hours ago
Because the battery shop is right down the street from the framing shop which is right around the corner from the engineers which are walking distance from the glass shop and they all get their steel from govt steel shops and lithium from govt lithium mines
m8remotion | 21 hours ago
Reduced or lack of physical QAT
anex_stormrider | 21 hours ago
Because cost of living is not insane in China. The price of labor allows them to keep costs and prices low. Not just for EVs btw.
G-0wen | 21 hours ago
They also built brand new factories, rather than trying to retrofit into an existing ICE factory. Even new plants that go in with the standard manufacturers are likely designed to cut back over to fabricating ICE vehicles with a little retooling.
Stuck_in_my_TV | 21 hours ago
Massive subsidization from the Chinese Communist Party in the hopes to become the dominant player in the EV market. Then, when other companies collapse, they can spike the price. It’s exactly how Rockefeller, Carnegie, JP Morgan and the other robber barons got so rich.
Mysterious_Ring285 | 20 hours ago
The question should be: why are others so overpriced?
Inner-Juggernaut-597 | 20 hours ago
What isn’t cheap from the Chinese lmao
edminthemorning | 20 hours ago
I was just in brasil and a byd there is R200k. That’s about $40k usd. Does anyone have any brochure or data on the actual price? How do we know that isn’t just the base model or some ice vehicle?
edminthemorning | 20 hours ago
Did they normalize price for battery size? I feel like Americans want a larger battery pack with more range while other countries are okay with a cheaper car and less range.
RedFlutterMao | 18 hours ago
The power of China
JuliusErrrrrring | 18 hours ago
Has anyone ever golfed? It's not like electric isn't better and been around forever. It's just been pushed aside for political reasons everywhere in the U.S. except for electric golf carts. Chinese electric vehicles are cheaper because they don't have an oil lobby in control of their government.
dandathon | 18 hours ago
Feel like the article neglects to talk about how local governments in China have incentives for firms to over produce, china actually has pretty weak domestic demand and rely on a strategy of dumping as well as the other things mentioned in the article.
AltruisticGrowth5381 | 17 hours ago
Chinese salaries are low, and they have extreme economies of scale with large domestic demand aswell as the benefit of integrating the entire supply chain in the same area, where parts, batteries etc might be manufactured just down the road from the assembly site leading to low lead times and cheap transport costs.
ApartmentSalt7859 | 16 hours ago
Because EVs are cheaper to build... They are supposed to be more affordable
earth-calling-karma | 14 hours ago
Government subsidies.
kontinos1 | 13 hours ago
Because they had a massive breakthrough in battery technology and a huge production scale.
SmellsLikeAPig | 12 hours ago
Free market competition mostly. Look how many brands of EVs are there in China. It's mind boggling.
Immudzen | 10 hours ago
Honestly the biggest thing is that China has actually invested in manufacturing. Our companies invested in stock buybacks or paying executives more money. China invested in better factories, better infrastructure, and better logistics.
homecet346 | 10 hours ago
And high quality. Fuck ford
PassingShot11 | 9 hours ago
They aren't 'so cheap'. That's the price EV's are supposed to be before every single layer adds on their percentages
Due_Seaweed_7895 | 8 hours ago
Subsidies from the State
Trebeaux | 6 hours ago
Direct and immediate access to the supply lines, dirt cheap labor, and gov’t subsidies.
MyPr0j3ct | 6 hours ago
Chinese EVs are not cheap.
Cheap implies low quality.
Chinese EVs are better priced than other EVs because of economies of scale, lower labor costs, and lower margins than other companies.
Chinese EVs are not cheap as most are higher build quality than U.S. EVs per comments from Ford CEO and Tesla's.
U.S. EV makers are focused on high profit margin mindset. The chinese EVs are volume focused and have had much more government support than other countries.
beastwood6 | 5 hours ago
They're made to excel in the high congestion low average vehicle weight environment of Chinese megacities. Put them on high speed American roads with comparatively massive F-150s/SUVs and you're getting into a coffin with a battery.
By the time BYD adds the reinforced steel, structural mass, heavy battery shielding and other features to pass strict US FMVSS regulations, the cost of the vehicle skyrockets. Suddenly you'll find that the vehicle costs 30k instead of 10. And that's before any of the (bipartisan) 100% tarrifs on Chinese EVs.
asnbud01 | 4 hours ago
Why isn’t anyone asking why are American EVs so inexpensive and inferior to boot. Or why do Americans expect 20 percent tips for ringing up your order in a take-away.
chrispark70 | 3 hours ago
This is before taking into consideration the low wages and the lack of enforced regulations and the currency manipulation in China.
CommanderGO | 2 hours ago
Government subsidies.
yourmothersgun | 2 hours ago
They care to make an affordable EV. All the manufacturers could (and should imho) but instead they’ve sequestered most EVs in the Luxury space.
CarlJH | 23 hours ago
Weaker environmental regulations labor regulations. Safe and clean industry costs money.
acakaacaka | 7 hours ago
Dont know why you got downvoted
daslyvillian | an hour ago
It will be also interesting to know if the workers are getting paid similar wage/economy as US auto workers.