Factor 1: vertical integration and different supply trains
- US automakers are really just car assemblers that build the engine and frame, and assemble everything else
- EVs are uniquely good for vertical integration, and Tesla recognized this when the Roadster had lots of issues. They gradually integrated, but still relied on external partners for earlier models' interiors and key parts
- Now, China's EV makers have taken this to the end
Factor 2: US trusts the private sector too much, and they make short-sighted decisions
- In the US, mines and refineries for raw materials have largely closed due to low margins
- Apple considered going into EVs, but they decided not to due to lower margins and now have a movie studio
- In contract, China ordered state-owned enterprises to do the mining/refining and build the charging infrastructure that's not lucrative
Decision that needs to be made: what level of protectionism the US should have:
- Japan and Germany both protected their local carmakers so they can catch up and (ultimately) exceed the success of foreign ones
- The US carmakers only exist due to the tariff on foreign trucks
- Welcoming German/Japanese carmakers to create plants in the US allowed us to get good products
- China's EVs kinda sucked despite government subsidies, so they invited Tesla around 2020, which set the gold standard and also forced their local suppliers and workforce to match Tesla's standards. Those suppliers then supplied the other new EV carmarkers
- I think what the video is trying to say: we should also encourage the Chinese carmakers to create plants in the US to give our EV industry a shot in the arm
Summary (self-written)
Factor 1: vertical integration and different supply trains
- US automakers are really just car assemblers that build the engine and frame, and assemble everything else
- EVs are uniquely good for vertical integration, and Tesla recognized this when the Roadster had lots of issues. They gradually integrated, but still relied on external partners for earlier models' interiors and key parts
- Now, China's EV makers have taken this to the end
Factor 2: US trusts the private sector too much, and they make short-sighted decisions
- In the US, mines and refineries for raw materials have largely closed due to low margins
- Apple considered going into EVs, but they decided not to due to lower margins and now have a movie studio
- In contract, China ordered state-owned enterprises to do the mining/refining and build the charging infrastructure that's not lucrative
Decision that needs to be made: what level of protectionism the US should have:
- Japan and Germany both protected their local carmakers so they can catch up and (ultimately) exceed the success of foreign ones
- The US carmakers only exist due to the tariff on foreign trucks
- Welcoming German/Japanese carmakers to create plants in the US allowed us to get good products
- China's EVs kinda sucked despite government subsidies, so they invited Tesla around 2020, which set the gold standard and also forced their local suppliers and workforce to match Tesla's standards. Those suppliers then supplied the other new EV carmarkers
- I think what the video is trying to say: we should also encourage the Chinese carmakers to create plants in the US to give our EV industry a shot in the arm
Really really really simple. They had a plan.