Chinese Autos v Biden in Three Charts
[Opinion] There's data to back up President Biden's move to halt Chinese car imports
Good morning from Taipei,
China’s automobile sector is hugely important to the global tech industry. Not only do EVs require a lot of electronics, even petroleum-powered cars have more chips in them than all the gadgets the average consumer owns in aggregate.
The US and Europe have been complaining about overcapacity, while automobile executives decry the gains made by China in this fast-growing sector. They’d better buckle up.
Data shows that China’s automobile inventories are growing, even as sales dip. EVs are the singular reason: Chinese output of new-energy vehicles — which are almost exclusively EVs — is up 31% so far this year. Production in August alone was the second-highest in two years.
It’s unlikely China can soak up all this production. That’s why if Beijing is willing to subsidize automakers to keep them afloat amid aggressive price cuts, then import tariffs at the US border won’t be enough to stop China’s automotive rise.
As much as I believe in free trade, I can’t deny that there’s logic in the US administration’s move to ban Chinese cars — even if it’s under the flimsy cover of curbing specific technologies.
China's move to manufacturing EVs has nothing to do with environmental awakening of Chinese and their consciousness of impact of gas cars on the climate. All cars manufactured by Chinese have either Nissan engine and transmission with diff and suspension from Mitsubishi, or the other way around. The rest of the vehicles are designed and built by Chinese themselves.
A huge portion of cost of every cars goes to Japanese pocket. Chinese don't have the knowledge or means of building a reliable and quality components that can last at least ten years. These components need high quality steel in order to make them last longer. What makes steel a good quality is the carbon that is used and the method during the production. Chinese don't have those. The natural path for them is to move away from internal combustion engines and move to electric that all components can be built by them, the fact that all Japanese manufacturing is moving out of China is showing this.
At this time China is struggling with the quality of their EVs but they will overcome the problems and fix the issues with reliability and batteries catching fire. In about ten years time they will be as good as European, Japanese or Americans. In long-term they will dominate the industry and destroy the traditional manufacturing that has existed for the past century. Unless, something happens that would stop them from moving forward. Something like a war, and that is the only forward for the West and that is the path we are moving towards. The war with Chinese is inevitable and is only a matter of time, the genie needs to go back into the bottle. The war most likely is going back to the cold war era deviding the world onto two poles with tariffs and sanctions at the center of the action.