How The Chinese Have Been Dominating Electric Vehicles

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I was reading an article about the Chinese Electric Vehicle (EV) industry with the government subsidizing each vehicle by roughly $8.4K. This was between 2010 and 2020 and one can see why competitors in Europe and other countries could not compete on price. The Chinese had an unfair advantage being backed by their government. They have stolen business from the West by being smart using government money making sure their is work for their people whilst making the country the global hub in manufacturing. Any country could do this, but our politicians worry more about what they can steal instead of what they can do for their country. In China if you did this you would be executed and that is the difference.

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This was not only a fixed subsidy per vehicle which is still ongoing but the entire manufacturing process include research and development including sourcing of raw materials. Even the mines are being subsidized so you are not only fighting the likes of BYD or Chery, but you are actually taking on the entire Chinese Government.

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Just look at how much China is giving out to anyone involved in the Chinese EV sector. In 2023 this figure was $809 million and last year if we can find the figures they will be well over $1 billion. The more EV's they sell the more they are paying out with the sole aim of taking out their competitors. Other countries do not do this and you would like to see them doing this bringing back manufacturing which was stolen away 30 years ago using the same tactics.

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Have you ever wondered why and how China has an army of automobile manufacturers and now you know.

Two weeks ago the EU announced new tariffs of between 17.4% to 38.1% for Chines imported EV's. This will help counteract the Chinese tactics and level the playing field ensuring the local manufacturers can compete fairly.

China will tell you that they have improved their quality and that the public support is down to their quality builds and not because they are cheaper. The Chinese have improved their build quality and offer extra features, but if the price was the same or higher the Chinese sales would drop off. Why has the EU taken so long to get their act together and protect their local manufacturers?

Now one could only imagine if the Chinese started manufacturing their EV's in Europe and still being subsidized by their government as this would be absolute carnage. This can never happen and needs to be blocked on all levels. I wish South Africa would take notice yet we all know that will not happen as they are in bed with the Chinese and the local manufacturers are on their own with no protection.

What the Chinese are doing here is exactly the same modus operandi they used to grow their export markets back in the 1990s and 2000's. Back then the Chinese manufacturing industry was offered subsidies on alle export orders and how they were able to undercut all their competition around the world and forced those competitors to shut down or be taken over by Chinese companies.

The problem these Chinese manufacturers had was they were not geared for supplying spares and there was an "iffy" period of about 24 months. The Chinese had to apply for a different export license and these items were placed under different import categories. They were geared for mass production when it came to exports, but supplying components they were not prepared.

I have said this before and I stand by this still that local manufacturing will be cheaper than the Chinese today as those subsidies are no longer happening. China for manufacturing is not cheap and everyone has been brain washed to think they are as there is no competition around and why the Chinese are not being tested. If the US or Europe wanted to they could compete for the same mass produced products and be cheaper. I have done costings on a handful of products and we are talking a price comparison of around 30% in the favor of locally produced items.

You would think countries around the world would be awake to the Chinese tactics and know what toe expect having learned the lesson from the first time around. Tariffs should have been in place long ago and not only being discussed now as the Chinese EV manufacturers have had a 10 boom period with the sole aim of removing their competitors. Another 10 years and they would have succeeded so there is still hope if they are not allowed to manufacture locally.

Posted Using INLEO