> It is important that the US have strong auto companies. Same is true for Germany, France, Japan, S. Korea, etc.
It is. But the reality is that those companies are complacent fossils who have lost all their vigor, and only threat of extinction would force them to innovate. Which they’re not under because legislators agree with you (in no small part thanks to their lobbyists).
Like many things, we’ll realize the extent of how badly we messed up when it’s way too late.
Part of this is our own regulatory structure. You can no longer buy a basic, simple, cheap, reliable car in the united states. (at least not a new model) You used to be able to all the time. Just 11 years ago I bought a brand new car for $14k and it was pretty great! It had no features outside of air conditioning and a stereo. Roll-up windows, manual mirrors, etc. It was wonderful. The current regulatory safety and MPG standards combined with costs and customer desires have twisted modern cars into something awful; bloated, heavy, incredibly expensive, over-complicated, less reliable, terrible visibility, the blight of touch screens and screens in general.
Less of that seems to me to be a problem with over-regulation than a problem with current financing games and not competing with each other as much on price, because the average car buyer is expected to buy a car a third of the cost of their house mortgage for a third of the term because that it is what banks want and what banks give a generous cut back to dealerships and sometimes to manufacturers to help entrench it as the way to sell cars.
GM alone has spent most of its history waffling between whether it wants to be a large bank itself or not. (The "GMAC" division has threads back to 1911, was spun out in the '00s as "Ally Bank", has been mostly repurchased with others to reform a larger "GM Financial" starting in the 2010s.)
The other part of it is that marginal costs are weird in the modern software-defined world. Motorized windows are cheaper today than the plastics and mechanical parts of roll up windows. Similar for the mechanics of manual mirrors. An electric motor tuned precisely for that mirror is fewer parts than a manual mirror. A camera system is sometimes even cheaper than mirrors today, which is wild.
I'm not sure it's regulation; in the UK you can buy a brand new Dacia Sandero for just under £15k (~$20k), and we have pretty strict safety and emissions regulations. I think it's more about consumer demand, and auto manufacturers realising there's more profit in selling higher-end models.
Fair enough. I'm really fixated on the ballooning vehicle sizes in the US, which is a CAFE / chicken tax concern, but that is definitely not the only factor.
Ah yeh, that's true; and isn't there something like a very heavy vehicle can be recorded as a business expense, so people are more like to buy trucks even when they don't need them?
I've got a 2024 Nissan Frontier, and there's anywhere between 6-12 inches of empty space in front of the radiator. It could be a smaller truck, easily. But that won't be built -- gets dinged by CAFE. Breaks my heart every time I look at that truck's huge, unnecessary nose.
The right way to do that is to lower the tax rate on these foreign models a little bit; enough to spur competition, not enough to crash local manufacturing capacity.
For EV, the situation is even more dire.
Western countries simply don’t have the supply chain required to compete with China. China is often by far the best supplier for a lot of components and the sole supplier able to provide some raw materials in large quantities.
Honestly, we are not far from reaching a point where using the old Chinese strategy might be our best bet: mandatory JVs with local companies if the Chinese companies want to access our markets.
That’s the right way to make any economic change. Gently, by gradations, so as to give the market time to adjust.