this post was submitted on 10 Dec 2023
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While that is part of it, the other, bigger part is that Western countries actually do have higher labour costs: better salaries and conditions for our workers.
When China was outcompeting us on undesirable, low productivity, jobs, we accepted that. It was better to raise a billion Chinese out of poverty than to protect our lowest productivity factory workers. And those workers mostly transitioned to other jobs with higher productivity.
But now China is richer and their labour force is shrinking, so they will compete with highly productive factory jobs.
Politically, it is unlikely that car workers will accept unemployment. Nor will other highly paid workers.
So a trade war is brewing, you better brace yourself for it.
Don’t think labor costs is a big factor. Car production is the sector that is most automated. Just think of this endless bands of hanging cars with robot arms working on it. Tesla even topped this.
It’s mainly the unwillingness to design and sell cheap cars due to less profits. In Germany we had electric cars for 20k€ or even combustion cars under 15k€. But they stopped building it. Although it was sold out in weeks.
In my region there was a Startup by the Aachen University RWTH (which is an elite university in Germany) bulding small EVs for around 20k€. They simply bought all parts from suppliers and just assembled it. And engineered and designed it first. Unionized and still competitive. Unfortunately, they didn’t fly.
EV building is rather simple. The software is key. And this is the missing part at car makers capabilities.
I second your thoughts on trade war. However, I guess it will be much simpler with high taxes, high quality regulations, and may be less support by car workshops. We will see…
There is still a shit ton of people working in a car factory. Tesla had to scale back their amount of robot workers since humans could work much faster. Tesla expects to have 60,000 people working in their Gigafactory in Texas when the production of the Cybertruck ramps up.
The cyber truck is a nightmare that won’t see mass market production.Since it doesn’t have a crumple zone, I doubt it even meets US safety standards.