I think you are right. BYD and other companies won't stay in China either. They'll be opening up factories in Turkey, Mexico, etc. This will start creating issues for incumbents in most markets. The US and EU might protect their domestic markets with tariffs for a while. But their exports are going to suffer. And short of imposing tariffs on lots of other countries and suspending related trade agreements, cars will still come into domestic markets via those new factories. And inevitably, some companies will start falling over and might fall in the hands of foreign investors or disappear completely.
It's a repeat of the emergence of Japanese car manufacturers in the eighties. The same dynamics are at play here: the Chinese products are simply better and cheaper. And contrary to the popular believe that's not just subsidies. Those foreign factories in Turkey, Mexico, and elsewhere will be producing low cost vehicles. The cost difference is the competitive advantage Chinese companies now have. They might have gotten there via subsidies but now that they have this cost advantage, it's there to stay. To compete, other companies will have to address their cost issues and their R&D deficit. There's no way around it. Producing more costly vehicles is just going to continue to price them out of the market.
Delay tactics don't work. Tariffs don't work. Delaying investments, doesn't work either. That about sums up the current attitude of a lot of the legacy companies. Dragging their feet, reducing investments, and lobbying for tariffs to protect their businesses. To survive, they would need to reverse their strategy and shift all effort towards producing low cost EVs. There's plenty of demand. But not for overpriced products.
Something interesting I heard from a chip company that's huge in the space and work intimately with many automotive companies - why Chinese companies grow so fast is because their development cycle for a car is ~2-3 years, compared to traditional manufacturers who take 5-7 years. This is a massive edge in pushing out new features and exploiting the very rapid new tech - batteries, self driving, etc.
Stellantis is the perfect illustration: they kept putting all efforts into pushing their flawed ICE engine (PureTech) because they wanted to make profits from it for at least 10 years. And now the efforts are still not on making a good affordable car but on lobbying to revoke the EU ban on the sale of petrol and diesel cars.
It's a repeat of the emergence of Japanese car manufacturers in the eighties. The same dynamics are at play here: the Chinese products are simply better and cheaper. And contrary to the popular believe that's not just subsidies. Those foreign factories in Turkey, Mexico, and elsewhere will be producing low cost vehicles. The cost difference is the competitive advantage Chinese companies now have. They might have gotten there via subsidies but now that they have this cost advantage, it's there to stay. To compete, other companies will have to address their cost issues and their R&D deficit. There's no way around it. Producing more costly vehicles is just going to continue to price them out of the market.
Delay tactics don't work. Tariffs don't work. Delaying investments, doesn't work either. That about sums up the current attitude of a lot of the legacy companies. Dragging their feet, reducing investments, and lobbying for tariffs to protect their businesses. To survive, they would need to reverse their strategy and shift all effort towards producing low cost EVs. There's plenty of demand. But not for overpriced products.