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US/German manufacturers just do assembly, they don't manufacture parts, so they only need assembly plants. BYD is a vertically integrated manufacturer. They make everything in-house which helps drive down costs. This huge footprint results in having all those different manufacturing lines under one roof. They depend on no one for finished parts, the only supply chain is raw materials.

▲ harrall 19 hours ago | parent | next [-]

I believe outsourcing can be a symptom of not innovating anymore.

Imagine having to contract out every prototype to a metal working shop — it slows down your ability to iterate because you can’t just go downstairs and try it.

But once you have a design set in stone, outsourcing is cheaper than doing it in-house. These companies specialize in producing parts with economies of scale.

But if you do it for too long, you kind of lose the ability to quickly iterate. Striking a balance is hard.

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Sponge5 6 hours ago | parent | next [-]

> But once you have a design set in stone, outsourcing is cheaper than doing it in-house. These companies specialize in producing parts with economies of scale.

Except you need to ship the parts to your factory and still employ QA people who must check whether you got what you paid for.. If the supplier has a bad defect ratio, you must order more parts. It's not as cut-and-dry as you think.

Every time your assembly-line halts, you're paying people for twiddling their thumbs. The more external suppliers you have, the higher the risk.

	▲	Lanolderen 2 hours ago \| parent [-]
		Don't the fines for halting a line cover the cost of the halt for the manufacturer? I'm currently working at a supplier for some companies in mostly the automotive sector and the line halt fines per second seem to all be in the couple grand range so I always assumed it should be enough to cover the halt. Though the QA part is real. There's so much theatre in tricking clients into believing their QA measurements are wrong when something happens it's kinda funny.

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10 hours ago | parent | prev [-]

[deleted]

▲ saturn8601 20 hours ago | parent | prev | next [-]

People are waking up, and to be fair, Tesla really led the way in the US for the last few years because they had no choice(no one would take them seriously). The question is can the West turn the ship around before its too late?

▲ matthewdgreen 18 hours ago | parent | next [-]

Depends if we keep the CHIPS act and the IRA. https://www.atlanticcouncil.org/blogs/econographics/the-ira-...

▲ ysofunny 15 hours ago | parent | prev | next [-]

too late for what??

too late relative to what?

	▲	chii 14 hours ago \| parent [-]
		too late to dominate in the industry of electric vehicles and thus, control/own large % of the wealth generated.

▲ hnthrowaway0328 18 hours ago | parent | prev [-]

When Trump ups everything from China by 100% I guess US would be able to make something with profit?

▲ 8note 16 hours ago | parent | next [-]

I doubt it. It's much easier to either launder or manufacture the goods in a third country, that benefits from most of the same incentives that made Chinese manufacturing go through the roof.

Americans will be buying Chinese goods with "made in Vietnam" or "made in Mexico" stamped on it. The American profit will be in setting up those laundering schemes

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seanmcdirmid 15 hours ago | parent [-]

If the Trump tariffs are based on country of final assembly, then yes, final assembly will just occur somewhere else, but it will take a couple of years to setup, and the inflation shock by that time will have done a lot of damage to the economy (recession likely, depression possible). It makes sense that it took Trump forever to find a treasury secretary willing to go along with this.

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csomar 14 hours ago | parent | next [-]

You can bribe officials in Vietnam/Mexico. So they'll be your country of "final assembly".

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seanmcdirmid 12 hours ago | parent [-]

I doubt the Americans will let them do that so easily.

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tzs 17 minutes ago | parent | next [-]

So they will have to bribe officials in Vietnam or Mexico and bribe officials in the US.

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phil21 9 hours ago | parent | prev | next [-]

They already are. Just one tiny well-explained example, although it's utterly rampant:

https://www.npr.org/2024/08/23/1197961495/the-trade-fraud-de...

No bribery required though, at least in most cases.

	▲	seanmcdirmid 9 hours ago \| parent [-]
		They tried stockpiling aluminum in Mexico during the Trump ban and that was shutdown quickly. I guess they just have to be more convoluted about it. I wonder if Trump will do something like “tariff China and any country that doesn’t tariff China itself (transitive)”, but it feels like it might be futile to do that.

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torginus 3 hours ago | parent | prev [-]

The alternative is having empty shelves in stores.

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Yeul 7 hours ago | parent | prev | next [-]

The Trump tariffs will turn the entire world to China. America may no longer be interested in free trade and go full isolationism but many smaller countries can not. A painful truth is that for Europe the millions of containers with goods from Asia are a lifeline.

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omeid2 14 hours ago | parent | prev [-]

Couple of years for a western enterprise maybe, but in the east, things move fast. Really fast.

	▲	seanmcdirmid 12 hours ago \| parent [-]
		It depends if Trump tariffs just China or everyone. He promised high tariffs for China, but tariffs on all imports besides.

▲ csomar 14 hours ago | parent | prev | next [-]

Vietnam and Mexico will massively profit.

▲ greenthrow 17 hours ago | parent | prev [-]

That is not remotely how tariffs work.

▲ hnthrowaway0328 16 hours ago | parent [-]

Doesn't a tariff drive up prices? (or at least intended for that)

▲ Dalewyn 14 hours ago | parent [-]

Tariffs are a surcharge on imports added and demanded by the government, paid by the people or entities importing.

As an example, if an American buys a Chinese coffee maker priced at $100 and there is a 50% tariff, there is a $50 tariff that is paid by the importing American to the American government.

The total cost to the importing American is $150. Now, if this price is equal to or higher than an American coffee maker then the importing American is incentivized to purchase the American coffee maker instead.

As another example, if Tesla sells Model 3s for $50,000 and BYD comes in with a similar spec car priced at $25,000, then putting a 100% tariff on it will drive BYD's effective price up to $50,000 allowing Tesla to compete without undercutting or outright selling at a loss.

Essentially, tariffs are a way to ensure that the pricing floor of the domestic market is not driven down unreasonably by international markets at the cost of the importers.

EDIT: Fixed some math. :V

▲ codedokode 2 hours ago | parent | next [-]

> As another example, if Tesla sells Model 3s for $50,000 and BYD comes in with a similar spec car priced at $25,000, then putting a 100% tariff on it will drive BYD's effective price up to $50,000 allowing Tesla to compete without undercutting or outright selling at a loss.

Doesn't that mean that American will have to pay $50 000 for a car that is worth $25 000? While people in other countries will be able to buy cars cheaper, buy more of them and maybe it somehow improves their life quality.

▲ zie 11 hours ago | parent | prev [-]

Right, the coffee maker company in China has some options:

  * Figures out how to make it even cheaper (unlikely)
  * Figure out how to avoid the tariff legally: Maybe move the manufacture or assembly to Mexico for the US market. 
  * Claim the product is something else, just enough to avoid the tariff(i.e. claim it's a tea maker, not a coffee maker)
  * Stop selling in the US since they won't get any sales
  * etc.

The middle options are the most likely: avoiding the tariff somehow. Companies do the middle two all the time to varying degrees to get around/avoid tariffs, import fees, etc, even US companies.

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XorNot 10 hours ago | parent [-]

Also the other issue: the first thing the American company does is ensure it sells coffee-makers for $149 and not a penny less.

In fact depending on your tarriff regime, this can incentivize a bunch industries to actually raise prices if the new import cost is higher then they would currently sell at.

	▲	Dalewyn 10 hours ago \| parent [-]
		The incentive to raise prices is pressured down by customers' desire to not spend more money than they have to. If businesses can get away with raising prices that means the price was too low to begin with, tariffs or no tariffs.

▲ sbierwagen 20 hours ago | parent | prev | next [-]

Not entirely correct. Boeing, despite all the bad press, actually reversed course on this recently. 787's wing was made by a supplier, but 777X's wing is actually built in-house, right next to the main factory, starting from carbon fiber fabric.

	▲	_DeadFred_ 18 hours ago \| parent [-]
		How much can Boeing do this though? My understanding is in the past they used moving some of their production to a country as leverage to win contracts. They are a company that moved their headquarters to DC because management treats the product as secondary as if they make widgets. Until they reverse that they aren't moving in the right direction.

▲ SoftTalker 16 hours ago | parent | prev | next [-]

Wasn’t always that way. Ford’s River Rouge plant took iron ore in one end, and rolled automobiles out the other end.

▲ _DeadFred_ 18 hours ago | parent | prev | next [-]

Don't forget USA auto companies also outsource their design work, CAD, etc. My understanding is that TATA used to have a whole floor at Chrysler.

▲ ssl-3 18 hours ago | parent | prev | next [-]

So the factory accepts iron ore, crude oil, coal, lithium ore, bauxite, monazite, copper ores, rubber, and soy beans at one end and spits out finished cars at the other?

They don't even outsource their nylon zip ties?

▲ rkagerer 17 hours ago | parent | prev | next [-]

the only supply chain is raw materials

Citation needed, this seems exaggerated. Eg. I'm sure they use IC's and I'd be very surprised if the facility includes a fab.

	▲	TrackerFF 17 hours ago \| parent [-]
		They, BYD, have their own semiconductor R&D and manufacturing subsidiary called BYD semiconductor. EDIT: Seems like it is a division, so not a spin-off.

▲ billfor 18 hours ago | parent | prev | next [-]

Just like Ford used to do.

▲ oldpersonintx 21 hours ago | parent | prev | next [-]

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▲ baybal2 21 hours ago | parent | prev [-]

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