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It's worth noting that China is coming for Germany too. Germany's trade balance with China gets more negative every year as China's manufacturing sector eats the world.
Coming next is automobiles. Without tariffs, Germany will lose most of its worldwide market share to China within the next 10 years. There's nothing special about German manufacturing that can't be replicated at much lower cost in China (and with much stronger network effects to boot).
You might be right, but I wonder how sure of this we can be? Is there any reason why this might not be true?
I guess one thing I can think of is that China apparently can't copy TSMC or that Dutch Lithography company. Not yet anyway. Although I realize that's a somewhat different story.
Yes it’s true that China doesn’t dominate every industry right now. But follow the trend line.
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QC. A lot of German-designed stuff is pretty convoluted and is banking on higher-than-normal precision in manufacturing to work properly; you tend to find that out pretty quickly when you buy their cars.
That's not to say that China can't do that, but just like salaries for [competent] software developers in India, it's going to cost you just as much for China to make high-performance parts as it is for you to source them locally (and the way to make those parts isn't going to suddenly walk off, and counterfeits aren't as easily going to make it into your parts stream)- turns out globalization works both ways. So getting them to do it instead is neutral at best.
And there are indications that the Chinese in fact cannot reproduce the most specialized parts because its manpower surplus meant people who could focus on that were out-competed (this is why polities that [can] depend on slave labor generally don't industrialize, and a manpower surplus is not meaningfully distinguishable from slave labor simply because the individual wages are so low). Which is why, despite Chinese expertise in industrial espionage, their attempts to actually build from the plans they steal generally don't end well, which makes them cost even more than it does Westerners. And when you realize how much Westerners spend developing these things...
Now, that isn't to say that advanced manufacturing will always redeem an overcomplicated shitty design that barely works in the first place (something the Germans have been historically, and are still to this day, guilty of), but it's arguably better than the alternative.
Though really, all the Western nations have to do to save their automotive sectors is to ditch the "we're banning the good cars by 203x" mandates. Which is part of why Tesla is mostly focused on, surprise surprise, using their engineering and advanced manufacturing expertise to widen their already-high profit margins even more by doing things like die-casting the entire car (something that will pay off, and another technology that can be licensed for other things, even if governments ditch the mandates).
Is Tesla’s corporate strategy now, in part, to get ahead of the West canceling the “ban all the good cars by 203x” initiatives? Does it look like that will happen?
California, Washington state, Massachusetts, the EU, Canada, etc are banning the sale of ICE cars in 203x. Hypothetically it is happening. Maybe they'll push back the deadlines as we approach them.
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Given how foolishly and self-destructively governments acted in the face of 2020? I'm not holding my breath, though the governments that are about to replace the most foolish of them might punt (at least on a federal level; the Biden administration delaying the nastier EPA mandate until '28 makes sense for a couple of reasons and I suspect the other car-manufacturing countries are going to follow suit with punting- I question whether or not Japan ever will since the only thing less useful than a BEV compact car is a BEV kei car).
This is all just armchair speculation; but I think it lines up considering just how awful battery technology is at the moment. Either the mandates aren't reversed, in which case they never bother with a cheaper car and still manage to undercut every other automaker (who are still doing the "build a normal car, except with a battery" thing); or they are, and they need to drop the price dramatically in order to have half a chance competing with cars that are still objectively better (and having very few parts will help them significantly with that) and sandbag until better batteries come out.
Which... I'm not holding my breath about that either; electrochemistry is a harsh mistress.
Oh, just wait for AI! It'll recursively self-improve until it's mega-ultra-super-god tier genius level, then it will crack all the mysteries of all the laws of physics and pull inexhaustible limitless clean energy out of the cornucopia! Just because your puny human brain can't see an easy solution doesn't mean there isn't one, the AI will solve it all along with overcoming aging, death, and the end of the universe. Simples!
(You see why I'm a teeny bit sceptical about the fairy godmother future AI?)
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I just want to confirm this. Every company I worked for so far was in the business of making overfitted and overengineered clockwork software that went over time and over budget and tended to fall apart at the seams when any changes were attempted.
Germans cannot do things like agile, modular, minimum viable product or cost-efficient, it seems.
I don't think that's a particularly German problem. Bad software knows no borders.
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