The damage that tariffs will do to the USA is not
totally understood in the longer term. But it does not matter to the two
Presidential candidates as they know they only have four years to
wallow, turn a deaf ear, print more toilet papers before throwing the
problem to the next one.
First of all, Chinese EVs are not
selling in the USA, but will overwhelm the USA market in time to come if
not nipped in the bud. USA legacy vehicle manufacturers know that and
are terrified of Chinese EVs destroying their legacy, and the Government
had to succumb to their lobbying to stop Chinese EVs from cornering the
USA market. It also is a financial windfall for the Government,
laughing all the way to the bank at USA consumer's expense.
Next,
without competition, innovation goes out the window and the USA will
lag further behind the Chinese in clean energy vehicles and technology.
The only way to move forward is taking competition head on under a level
playing field for innovative technology to improve. Right now, EV
technology is still far from mature and is innovating.
EV
manufacturers like NIO are reported to be selling EVs without batteries,
going big into battery swapping, instead of selling EVs with batteries
that will make the vehicle cost much more. Tesla is also dabbling in EVs
using battery swapping, but how far ahead is not clear. The USA already
lost the edge, and this may not be possible even today for the USA to
compete. It is too little too late even to try.
Apart from that,
tariffs are an added cost for consumers who will be unable to buy
cheaper cars and have to buy expensive cars made in the USA. Expanded to
other consumer goods from China, tariffs are going to make cost of
living a big issue in years to come.
There is now a port strike
in the USA, with port workers demanding a 77% rise in wages. I could not
believe that the port workers are demanding such an astronomical 77%
wage increase. Putting that into perspective, it will add to the cost of
goods imported into the USA. These port workers must be desperately
trying to cope with the cost of living to make such atrocious demands.
Anonymous
7 comments:
Rivian, a USA EV maker, specializing in sport utility vehicles or SUVs, founded in 2009, is in deep financial trouble. It is suffering massive losses for years, losing about US$30,000 per vehicle as reported. The cost of production for each vehicle they churn out is about US$110,000, while their selling price is around US$85,000. The company will no doubt bite the dust sooner or later if no solution is found to cut costs. Tariffs on Chinese vehicles will not save the company, and cost cutting theoretically is not going to do that much in reality. The gap is too wide.
Manpower cost cutting measures will be the most difficult to achieve and the company is looking at increasing production to benefit from economies of scale. Well and good, if they still have the Chinese market to consider. We now realize that markets are just as important as productive capacity. China is now out of reach and neither can their SUVs compete in the Chinese market. Rivian's production can probably only sell in the USA market and the EU. How much of an expansion in production can the company really hope to achieve to even break even? It is reported that at present there is even a problem with their inventory piling up and further increase in production will just make the problem even worse, if sales fail to pick up or stagnate.
In order to sell, they have to reduce prices further, which puts more pressure on cost cutting measures and render that exercise futile.
We have always thought that only legacy Internal Combustion Vehicle manufacturers in the USA are facing fierce competition. It looks like even the USA EV makers are facing strong headwinds to survive.
And the orange LOSER says his sickest country on earth will go to Mars by 2028!! These sickos cannot even get to the moon. Only in the sickest country on earth.
They went to the moon, many time in fact, inside a Hollywood studio. Michael Jackson even did his 'Moonwalk' video on the moon.
With China landing on the moon before 2030, the Americans are desperate without even a working rocket to the ISS. To reclaim some pride, everyday they are sending news about outer space, Mars, another galaxy, far far away places, with photoshop photos that no one can prove true or false.
Without going to the moon, they claim they went there many times. Without actual 5G, they are touting 6G now. Without the supply chains they are bringing manufacturing back to the USA. Without the Chinese market they are expanding the semiconductor sector. No wonder China just sitting tight and watching the misfiring.
Rest assured the USA always are ahead of everybody in everything.
What the USA lacks, China has overcapacity. Raw materials, skilled and hardworking people with competitive spirits, big market and most of all BRICS.
EU will suffer the same fate as they did with Russia over the EV tariffs against China. China will retaliate, but the EU have no choice and have to follow the dictates of the USA. The EU will sacrifice themselves for the USA and have no sympathy for their stupidity.
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