Toyota, Honda, Hyundai, and Kia would have continued to manufacture and sell these in the US if there was demand, which there wasn't.
What I'm surprised by is the non-existence of an Indonesian owned and designed brand, but that's probably a result of the Asian Financial Crisis back in the day, but it's embarrassing given that historically poorer Vietnam has been able to incubate it's own domestic ecosystem for EVs and ICE cars. Indonesia has stagnated over the past decade based on developmental indicators and seems to be falling into the commodities trap instead of upskilling into processing.
It wasn’t that Honda couldn’t sell Fits to Americans at a small profit, it’s that they found they could use their manufacturing capacity to sell more expensive, more profitable models to Americans instead.
> The HR-V was successful enough that it displaced some Fit production
> it’s that they found they could use their manufacturing capacity to sell more expensive, more profitable models to Americans instead.
That by definition implies that the Fit did not have ideal PMF. You do NOT want to be managing multiple SKUs, especially if they are cannibalizing each others market.
It's also an additional point showing that if given the option or the ability, consumers would spend a couple thousand more just to get a CUV instead if a hatchback.
Edit: I forgot, no one on HN understands how basic business works. Keep the downvotes coming
Vietnam has one domestic car maker VinFast and it's more a project of the billionaire owner of Vin group - supermarkets and the like - rather than a government plan.
Stage 1: you want a smaller cheaper car.
Stage 2: buying/renting a house is too much so get a bigger car to sleep in...
Seriously though, I want a 4WD electric version of a Mazda MX5 with Hyundai's Ioniq N series drift mode. Fun every day, more fun on track days.
https://www.youtube.com/watch?v=mbFE60Z-_VQ
Think: how Uber used VC money to offer cheap prices and undercut competition, but times hundreds of companies using government money driving the whole market down into fantasy land. Eventually prices have to come back to reality or the factories won't have capital.
The price war in China is when a new Atto 1 could be bought for $6-8k from a dealership on discount.
That's why BYD (and SAIC, Geely, GWM, etc) have been expanding abroad so quickly - in order to build their own niche to survive the Chinese price war.
That said, as I predicted a year ago, the Chinese leadership has started cracking down on the price war in China for burning capital - especially at provincial SOEs who have been facing the brunt of the war because privately owned BYD has been outcompeting the SOEs.
BYD would probably just consume the smaller competition in such an event, just mostly bad news for provincial government debt.
All new hatchback EVs comparable to the Atto in Asia can be purchased at around $8-12K as I mentioned before, like the Tata Tiago EV, Tata Punch EV, and VinFast VF3.
> Regardless of the potentially unsound money involved
It becomes unsound when you are selling it at $7-8K, which is what has been happening in China.
Hypothetically great for consumers, but in action it was a net negative because the SOEs competing against BYD are all owned by provinces, so it was citizens money getting burned.
This itself is why Chinese leadership has reprimanded the entire EV industry a couple days ago for reckless price wars [0]
https://www.weforum.org/stories/2025/06/how-china-is-reinven...
They seem to be moving forward with this: https://www.reuters.com/world/africa/china-says-it-will-remo...
A bit early to see if there are any fine prints but this seems like them trying to re-route the global economy. African countries are insignificant when taken separately but on the aggregate they make a sizable chunk with potential for some growth.
Next time you’re in Asia (hell, anywhere outside USA) sit inside a BYD vehicle.
Tesla-like acceleration with Porsche handling with Italian interior with Toyota reliability for HALF the god damn price of Tesla.
US government does not want Americans to know China already won at EVs. It will hurt national pride.
Just like how the space station is going down in 2030 with no plans to replace. Meanwhile China already has their own manned space station live today. Would not be surprised if NASA is abolished in the next few years.
Claiming Toyota reliability is pretty bold for cars that have been on the market for a year.
This administration seems set on demolishing American industries though. Such a shame, but maybe we can finally get decent rail once all the car lobby’s are dead. (But probably not)
I mean the policies you see you like to think are bad are literally helping Americans out, it’s just hard to look at those policies.
Because the policies represents American inferiority. America needs a leg up because their industry is inferior to China. These policies are not fair at all.
No, this administration ostensibly wants to Make America Great Again, but that requires policy that is focused on the greater good -- with a long term vision on the investment.
The reality is that they are actually interested in is actually a kakistocracy and has the following concerns: self-enrichment, staying in power, and oppressing its enemies.
Trust me. The kakistocracy requires America to be great. The tariffs are part of that.
Let me spell it out. The ceo of tsmc has clearly stated many times. The economics of building a fab in the US don’t make sense. Everything will be massively more expensive. The reason why it’s being done is simply to give a leg up to the US so the US can perform better at something that they are inferior at to Taiwan.
All of these policies are done to produce better outcomes in the long term but be massively painful in the short term.
I hate trump but the reality is that politics and taking sides is a cartoonish attitude. People are complex and the administration is made up multitudes of people. The reason for why they do what they do aren’t simply black and white and always in favor of just funneling more power to the upper class.
Maybe you’re right that they don’t give a shit about anyone other than self enrichment. But improving America in general doesn’t go against self enrichment, in fact improving America in general has massive long term upsides for trump. Don’t fall into the trope of taking a political side and thinking in terms of caricatures that trump is just pure evil.
I abhor partisan politics and would have no issue pointing out the plentitude of failures that happened under Dem leadership. But the Right has this One Weird Trick where they make everything political (in a partisan sense) and the act of criticizing a policy or whatnot on its merits then becomes a "biased political opinion".
Tariffs are being used in an attempt to replace income tax (Trump has been clear about that), with a benefit of being a weapon to punish perceived enemies and with a bonus of being yet another thing he can be bribed on.
I do think that Trump is pure evil -- there's zero redeeming qualities about him. Please correct my assumption if you have anything.
But Tesla is not dominating China.
Tesla dominates the US. The only reason for that is because the administration is helping Tesla. The administration helps Tesla but they do so also by harming consumers. They restrict consumer choice to an inferior choice and thus preserve industry in the US.
Honestly, it amazes me that Xiaomi built the car that you would expect Apple to come up with after all these years they spent researching and coming up with nothing.
According to Wikipedia, the Xiaomi SU7 Max has 1,784 hp and is priced at 73,000 USD. In some YouTube videos, they raced against Ferraris and Bugattis, and it fared better than much more expensive cars. I have no idea how they did it.
A Cybertruck may look clumsy, but it can been a Lamborghini. Instant torque.
The highest horsepower in a Ferrari road car is 1,200 in the F80. Though, I’m pretty confident you got the HP wrong for the Xiaomi.
Nürburgring times.
7:04.957 Xiaomi SU7 Ultra
6:22.091 Xiaomi SU7 Ultra Prototype
Even my parents' Leaf leaps like a salmon outside of eco-mode despite that being the last reason anyone would buy a Leaf.
OP talked about the Xiaomi SU7 Max, not Ultra. Looked it up now, the Max has just shy of 700 horsepower.
Max is 495 kW (673 PS; 664 hp) for 299,900 yuan (US$42,239)
"With the successful release of the YU7—its second electric vehicle (EV) after the SU7, a sporty sedan launched in March last year—Xiaomi has pulled off a feat that eluded Apple, which ditched plans to make its own EV after burning billions of dollars on the effort over a decade."
There's also a brutal price war going on over there. Those cars will be exported worldwide. Western countries are in a bind: protect the local manufacturer or allow the (much) cheaper and environmentally sound EV in from China?
"China’s smartphone champion has triumphed where Apple failed" [1]
For investing in the future to be possible interest rates must essentially be low.
I've thought a little about this problem, because recently we had situations where we simultaneously had inflation and needed investments to produce products in new ways to counter that inflation, and this obviously leads to a situation where it's difficult to get out of the problem. If we increase the interest rates then we stop the inflation, but the interest rates will be too high for investments to counter them. Concretely: Northvolt was trying to do American-style doomscaling and then interest rates went up, so they went under.
I believe that there is a solution: giving the central banks the additional tool to set a mandatory savings fraction of wages-- that is, that the central banks are allowed to set a fraction of wages that must be saved, and which may be invested or used to start a company but which isn't allowed to be used for consumption.
If you then have inflation and consumers are bidding over each other for goods and driving up the prices the central bank can increase the savings fraction without changing the interest rate. So plausible, in case of inflation you'd look at the need for capital to get out of it: if there's no need for capital to build new things and get out of it, then you just increase the interest rate, if there is, you increase the mandatory savings rate.
I thought about voluntary solutions, but suppose that we consider a savings pacts-- i.e. ordinary people get together and agree to all save a certain fraction of their income, then this drives down prices, so whoever deviates from the pact gets so much goods that he's really happy with what he gets for his money. Consequently such savings pacts are unstable and the savings pact must be mandatory.
I also think this is especially right for Europe. I calculated that if the central banks set this at 5% then this is enough for Draghi's €800B of needed investment, but it's obviously also applicable to the US if the US wants to transition to EVs, and now you have even higher interest rates than we do, so this policy might actually be the right thing for you too.
> I believe that there is a solution
If changing the first is not your solution, you have no solution.
OP was saying that US companies will keep losing market until they are completely outcompeted. Finding a way to win this competition while keeping "investors" pockets full is impossible.
Suppose that cheap electric car mass production is possible with new production technology, and that there's inflation because of high petrol costs. Suppose that interest rates are 5% to prevent inflation. Even if the automobile manufacturers understand that it has to be done and is feasible with some for them to survive they won't be able to do it.
However, with this interest rates can be lower because inflation is prevented by the mandatory savings. The resources to build the cheap thing will actually be available.
If done internationally this will also greatly reduce the profits of oil producing countries: suppose that the US, the EU, China and India, all big consumers of oil, agreed on a mandatory savings rate of at least 1%. Then the ordinary people have less money to bid up the price of oil against each other, but do have money to invest in businesses that substitute for oil production. The co-ordination allows ordinary people and non-resource extracting countries to get more of the pie.
It's a patch on the floating-exchange-rate-and-policy-by-interest-rate of monetarist and Keynsianism to make it function in situations where there's both inflation and a need for investment.
I think the transition to this sort of as the US decision to decouple the dollar from gold. A way to get things more sensible.
And yet that's also you:
> Yes, but in this case the investors will be ordinary people, and the payment will effectively be the products that ordinary people want.
Well, this is essentially löntagarfonder but worse because it's funded by the people under the threat of violence (mandatory savings), not from corporate profits.
> that these people who are now required to be capital owners would likely buy at this reduced price, but it is not a socialist idea.
So, the people are forced to buy the ridiculously inflated marked at ridiculously inflated prices for the faint hope that "likely" they'll get lower prices on something far in the "glorious bright future" (tm). And that's not socialism?
Well, a careful analysis reveals that "likely" is quite unlikely, the people forced to "invest" are going to lose their shirts and inflation will actually accelerate, only the well connected will benefit because they will be in control of this devious scam.
You are obviously not familier with the many forms of socialism and you argue about irrelevant details. Mandatory savings equals socialism, monopolization equals socialism - it's not Stalin's socialism, it's Mussolini's socialism - lets not forget, he was the Duce of the Italian Social Republic. As Hitler was the head of the National Socialist German Workers Party.
Eveything is done under the threat of violence, including things like land ownership. We're not running some kind of country-sized anarcho-syndicalist commune, so presumably we must operate on some other basis of morality, where we don't really care about this threat of violence stuff.
>So, the people are forced to buy the ridiculously inflated marked at ridiculously inflated prices for the faint hope that "likely" they'll get lower prices on something far in the "glorious bright future" (tm). And that's not socialism?
No, the people aren't forced to buy any stock. They keep the money uninvested or whatever they want, as long as they don't spend it. They'll invest it in order to achieve returns, to use at the point when they do get to spend it.
>Well, a careful analysis reveals that "likely" is quite unlikely, the people forced to "invest" are going to lose their shirts and inflation will actually accelerate, only the well connected will benefit because they will be in control of this devious scam.
Only if they're bad at investing, but many will joint together to form funds and try to hire professionals. Presumably banks would offer services to help people deal with their mandatory savings sensibly.
>You are obviously not familier with the many forms of socialism and you argue about irrelevant details. Mandatory savings equals socialism, monopolization equals socialism - it's not Stalin's socialism, it's Mussolini's socialism - lets not forget, he was the Duce of the Italian Social Republic. As Hitler was the head of the National Socialist German Workers Party.
That's the everything-is-socialism, including capitalism is socialism. I prefer the Marxist view: socialism is to each-according-to-his-contribution.
The only thing that is like that in our society is copyright, and this proposed policy isn't either.
There's no such thing as "uninvested", unless the money is in the form of currency under a mattress but this would create such a mess that if Keynes hears about it he won't stop spinning in the long term.
And what the fresh hell is to use money for "whatever they want, as long as they don't spend it"... excluding the mattress, what else can you do with money?
You're simply throwing ideas at the wall without understanding their implications, if you're human you've got to take some econ classes and find an example that is close to what you propose - everything has been tried at some point or another - then we'll have something real to discuss.
> Yes, but companies run for investors will always have to pay investors, so it would have either been a buyback or dividends.
Your argument here is that the pivot two things companies can spend money on is dividends or stock buybacks? An incredibly false choice. They can also clearly invest in staying competitive.
> When interest rates go up, companies end up competing with government bonds, and they must give dividends that keep them competitive,
Why do you think they must do this? These aren't bonds - people aren't looking to park money at a risk free rate. They are stocks - different investments with different expectations. Setting the expectation of one based on the other is false. They should be ensuring the can keep with with short term growth of more than 4% per year non adjusted, which should be easy in an inflationary environment.
And let's dig further into what you said about this "must". Must implies no other reasonable option - the consequences of anything else would be to negative. So when you say they must do buy backs or higher dividends, I ask "or else what?". Simply put, what hairband is they don't? The company doesn't fold. Consumers don't suddenly stop buying their products. What actually happens that they need to avoid?
Not much really much of note really. They say/signal "instead of giving you this money right now, we're going to invest it to remain competitive and more productive in the future".
If some investors don't believe them or doubt want to wait the stock price dips for some period of time and then rebounds as those investments become realized with increased efficiency and superior products.
> For investing in the future to be possible interest rates must essentially be low.
Finally this is wrong. It doesn't require low interest rates is you're flush with cash. If you've given away all of your cash then yes you need to borrow to invest. But if you have tons of cash you don't need to borrow to have cash.
Do you think investors, especially institutional ones that manage retirement funds etc. would just ignore the CEO/board and not receive any returns?
My observation is that great care is taken to keep companies competitive with government bonds when taking risk into account.
How is vertical integration disincentivized?
Unions are not making American cars uncompetitive.
BYD margins in America would be razor thin.
BYD is going to kill in developing and emerging markets, but it doesn't stand a chance in the American SUV / truck / sports car market. It'll also push America out of international markets, but it won't be able to edge into American consumer markets.
It's not big auto that's the problem. It's the American consumer.
US automotive regulations have pushed for lighter, smaller, more fuel efficient coupes. Yet people keep buying the big and heavy trucks and SUVs.
It's cultural.
https://www.caranddriver.com/news/g64457986/bestselling-cars...
It's trucks and SUVs.
It doesn't matter if regulations favor small and fuel efficient. That's not what consumers buy. In fact, they flock to the exact opposite.
Occam's razor here is that American auto isn't stupid. It's just building what the consumers want.
American preferences don't match that of the broader world.
https://www.vox.com/future-perfect/24139147/suvs-trucks-popu...
Consumers aren't buying trucks because they're incentivized with money - because the truck is double the cost. Theyre buying trucks because they want them.
Does that make American consumers stupid? Yeah probably.
Id sooner blame marketing and advertising than regulations and tax codes. The reality is that when these gas guzzlers are priced outrageously, Americans still want them.
Americans DO want cheap small and fuel efficient cars, but they are actually MORE expensive due to the government regulations and guess what? The "big expensive" cars have much looser regulations due to being classified as trucks. There are several articles and youtube videos about this topic, it is very well explored and nothing is being done about it.
1: Advertising, 'discounts', bonuses, 'free' accessories, loans.
auto manufacturer lobbyists may have been successful at convincing the government to incentivize the production of more expensive, more profitable vehicles, but it's not like there aren't still cheap small cars that everyone knows about and would fulfill 90% of people's needs for half the money, yet they spend on average $50k for a 4,000lb SUV, to never carry more than 4 people and some groceries.
maybe lobbying got the price of SUVs down 10% relative to smaller cars, and sure some people considering a smaller car might upsize because of that. but I don't think it's possible to discount the cultural component when you look at what people in the US buy. and if people fall for that because of advertising, that's essentially cultural.
https://www.amnesty.org/en/latest/news/2024/10/human-rights-...
US consumers already disregard human rights. They keep buying Nike and iPhones.
EU cares more about human rights than the US.
https://www.reuters.com/business/autos-transportation/us-law...
Then the domestic industry will just rot from inside. It is usually a worse outcome than if the domestic industry were competing in the open market.
Tariffs and other protectionist measures result in the low quality high priced product of the protected industry being sellable only in the domestic market. Where is China is going to sell to the rest of the world. 340M vs. almost 8B of addressable market. It is a writing on the wall.
Also the Chinese aren't selling to the rest of the World. The EU has also imposed harsh tariffs on BYD and others to protect its industry.
BYD had had a bus factory for a while in Europe but is just about to roll the first cars off their plant in Hungary.
This has nothing to do with EU rules and everything to do with the Big 3 deciding in the early to mid 2010s that SUVs sold in America were so profitable they really didn’t need to do business anywhere else.
Check out what year Michael Crichton's Rising Sun was released. Ask ChatGPT for a summary of the predictions. And then checkout what actually happened to Japan.
When you look at some European country like Russia and see how fucked up it is. Then you say well Russia is full of white ppl like the US so the future of the US will be like Russia, doesn’t that sound massively stupid to you?
So why do you think what happened to Japan applies to China? Like is it because the people in Japan look like the people in China? You know the countries hate each other right?
Also, why are you mentioning the look of people in a discussion about cars and manufacturing?
There the message is simple - chimps with 3 inch brains love to pretend they can control ever increasing complex systems and scale. And obviously they can't.
China's enemy is Complexity. Not the US which is too lost to talk about. Complexity goes on increasing and pressure to pretend they have control also increases. Mistakes will be made and multiply with time. So see Covid, Evergrande/Country Garden, techbro crackdown, young ppl checking out etc. Larger the system more the issues not less. More fragile. Not less.
You are correct that chinas enemy is not the US. But complexity isn’t the the issue either. The issues are complex but complexity isn’t inherently the causal source of there issues. It’s not like oh the complexity was so overwhelming that it confused people and covid formed and young people checked out.
Your comment is an aside. The point is Japan and China couldn’t be more different. The guy was obviously comparing the two because, hey a bunch of mongoloid Asians reaching prosperity! They must be the same. It’s stupid af.
I’m Asian myself but I will say I don’t care about him being racist. Not trying to raise some social justice garbage here. I don’t give a shit about stuff like that. I’m commenting about the raw stupidity of the comparison not the moralness of it.
“Chimp with 3 inch brain” refers to humans.
Nobody said “3 brains”
Also tangential? Economic development and demographic patterns might be more relevant than jumping straight to race like you did.
It’s very very clear why he chose to compare Japan and China and expect that comparison to be like dropping the mic. Like he didn’t even say why Japan is an accurate model for China.
Doubtful. It’s hard for a country which has been consistently outsourcing the production of anything remotely complex to do better than one which has been the top producer of manufactured goods for decades. Tesla tried and mostly failed.
Plus automation is expensive and require large volume to be profitable. American cars historically have limited appeal abroad and the market is extremely competitive which doesn’t help.
The flaws in Teslas cars are mostly design choices (plastic seats instead of cloth/leather, bad ergonomics due to focus on minimalist aesthetic, uncomfortable suspension setup etc, etc). Some of it is following trends, some of it is Elons stupid ideas.
Financially it seems like Teslas big problem is the AI-investments. Burning unfathomable amounts of cash on useless software, instead of putting that money towards developing their model lineup and improving quality on things that matter.
That manufacturing edge is the reason Tesla is still profitable despite its massive drop in sales.
These two parts don't really go together from my point of view. Tesla is often pricing a car with mid-range quality as a premium model.
Personally, I think they are not very competitive anymore in the segments they operate in. They used to have first mover advantage but now historic manufacturers have similar cars on offer. At the entry level, in as much as they have a vehicle there, they are not competitive at all compared to the Asian manufacturers.
I am more worried about the plummeting sales than the AI investments.
To get down to Model Y-level costs, I would have had to settle for a barebones ID4 or an MG. In that comparison the Model Y is a wonder of pace, space and grace.
I don't like my Model Y, I sort of hate it, but if I had to make the choice again and the relative prices (and my car-needs) were the same, it would be a tight race. I'm pretty sure there will be better options next time, though.
The choices are different now, Tesla is no longer a winner. That despite the tariffs, without which nobody would buy Teslas.
So, i think 10-15K car in US has no buyers, and no margin to make it worth for the manufacturer.
There's just no one willing to buy these entry level cars, except as maybe second commuter cars.
This is a common misconception. Chinese manufacturing is far more automated, and getting more automated, than American manufacturing.
Automation in American manufacturing basically stalled in the 2000s.
only due to large tariffs
Toyota, VW, Honda and Hyundai et al sell globally. They have to compete against China. Some of them will learn how to do so, then dominate the American market with their American factories.
The discount from an American perspective kicks in at the $20K and above range.
Mind you, it's a discount if you earn in dollars or a salary comparable to the West, which most Chinese, ASEAN, and other Asians do not (aside from the Asian Tigers or those working in top tech or finance roles in CN/ASEAN/IN).
If you're household post-tax income is around $6k, a $12K let alone a $20K car is expensive given that housing is fairly pricy as well, and saving for rainy days is much more critical.
https://arstechnica.com/cars/2025/04/a-small-cheap-ev-you-ca...
There doesn't seem to be any significant longevity concerns, but they have also not been around that long.
They are years behind with sodium ion which is being mass produced in China already and being used in ultra cheap EVs that simply don't exist in the US market.
And then solid state batteries are also something that China looks to be on track with to start producing in larger volumes in the next year (low volume production is already happening). And that's despite companies like Amprius, Quantumscape, etc. being based in the US. In short, the US car manufacturing industry has long lost its leadership position. And that's including Tesla that until a few years ago was producing better EVs than others. No longer true and they are struggling to keep up currently.
By treating batteries as a component roughly on par with an air filter, US manufacturers have lost out on multiple R&D cycles and put themselves in such a poor strategic position that it's unlikely they will be able to survive without major restructuring.
They do have a lot of space / leg room.
I don’t see any reason to buy one over a Tesla except for saving money.
We saw that with Japenese cars in the 70s (turns out quality was high) and some of the most valued brands now are Japenese (Honda, Nissan, Toyota etc.)
Then it was the Korean turn. Cheap right, so low quality? Turns out Kia, Hyundai, Daihatsu etc are nice cars.
Sure, there are a few early iterations that needed improvement, but in each case those quickly got ironed out. And Chinese cars are far past the "early" stage. They're genuinely good cars for very competitive prices.
When it comes to EVs They're ahead in quality. BYD particularly seems to come with a very good reputation.
Sure, the US is obsessed with large SUVs. But the rest of the world isn't. US car makers are not making cars that the rest of the world wants, and the export market is closing. (I'd count Ford as something of an exception here, they still produce small cars for foreign markets, but they're cutting corners on quality and reputation is falling...)
If you told someone like, 3 years ago that this would happen, people would call you crazy,
TOP 9 from May was:
1. FIAT
2. VW
3. GM
4. BYD
5. Toyota
6. Hyundai
7. Honda
8. Caoa-Chery
9. Jeep
Mistletoe•1d ago
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ryandrake•1d ago