The Ongoing Collapse of the Western Car Industry, by Roger Boyd, Jan 2025

[dixonge]

A few thoughts:

1. EV's will grow (or not) based on consumer preference (and, to some extent, government regulations).
2. Eventually EV growth will level out, but probably continue to grow, albeit more slowly.
3. The U.S. is currently in major protectionist mode. I predict this will continue.
4. China EV sales *outside* of China will hit limits. Almost any country outside of Europe and the U.S. has very limited EV infrastructure.
5. The author is not in the automotive industry. He is an Academic researcher at Balsillie School of International Affairs in Canada. He is also very partisan and generally seems to hate Elon Musk, so take his treatment of Tesla with that grain of salt.
6. Many of his observations are probably generally accurate regarding market shares by country and China. However it is difficult to compare your typical Chinese EV w/ Tesla. The main differences are in Tesla's AI-assisted FSD (soon to be fully autonomous) and insanely efficient manufacturing.
7. Musk has long held that Tesla's primary competition was not any other established manufacturer, but China. And BYD is quickly catching up to Tesla on hardware, pricing, autonomy, etc.
8. BYD is also heavily *directly* subsidized by China. This should be triggering protectionist legislation and tariffs worldwide. The EU added a whopping 17% tariff on top of their existing 10% tariff while investigating this subsidy. It seems to be a classic case of 'dumping.'

 

[Midpack]

It's possible, for sure, but a big surprise may be that many people will not want robotaxies and will want their own cars to be able to go where they want when they want. Not saying there won't be robotaxies (Wamo right now, GM Cruise dead in the water) but I doubt there will be wide use of them (my personal opinion). I wouldn't want to be reliant on one, but I am just an old slug with an electric car. My 44 year old daughter, who is very tech savvy, likes her Mustang GT and I couldn't talk her into a Tesla last year.

Who knows?

The article probably left "potential" robotaxies out intentionally as they are not a realistic vehicle for 2025 - 2026 as that's the time frame of the article is all about.

+1. Admittedly when truly independent robotaxis become a reality remains to be seen. But you’re definitely right robotaxis won’t become a factor in 2025-2026.

I don’t disagree that some (older) folks will cling to owning a vehicle. If you disagree with “older,” the technology most 20/30 something’s readily use today is starkly different from most 60/70 something’s. And I’d counter that cars are getting less and less affordable for more people every year, not only new but used. People resist technology until they don’t, see S-curve - e.g. planes, cars, computers, internet, smartphones, etc.

 

[Out of Steam]

Doesn’t China burn mostly coal to make the electricity to fuel the new EVs?

Researchers suggest that that is still better than burning gasoline and diesel at ground level in highly populated urban areas. In any case, China is deploying massive numbers of solar panels and stationary batteries.

 

[Out of Steam]

Actually, sulfur particles are best not scrubbed because they have a cooling effect. Warming began in earnest when sulfur started to be scrubbed due to various clean air laws. Sulfur has other negative effects but those are now of relatively less concern than warming.

It would be very hard to keep heavy sulfur compounds in the upper atmosphere. As someone who has a genetic vulnerability to lung disease, bringing them back at ground level could be a death sentence. Though stopping such scrubbing isn't going to happen within my life expectancy.

 

[Chuckanut]

Autocracies tend to choke off the long term benefits at some point. Note China’s one child policy.

 

[Out of Steam]

My question is what China looks like in 10-20 years. They are experiencing an extreme demographic bust as well as a debt bubble.

If their population falls by 60%, they still have nearly 600 million people. Unless population decline is being driven mainly by loss of fertility (which is possible), rather than social and economic trends, it isn't going to continue indefinitely.

As far as a debt bubble, the US had repeated economic crashes between the end of the Civil War and WW I.

 

[aja8888]

Autocracies tend to choke off the long term benefits at some point. Note China’s one child policy.

I thought China got rid of that one child policy years ago? Am I wrong here?

 

[Midpack]

My question is what China looks like in 10-20 years. They are experiencing an extreme demographic bust as well as a debt bubble.

I keep reading that, but US debt is more than twice that of China’s, and our debt/GDP is FAR higher than China. What am I missing?

United States​

The United States boasts both the world's biggest national debt in terms of dollar amount and its largest economy, which resolves to a debt-to GDP ratio of approximately 121.31%. The United States' government's spending exceeds its income most years, and the US has not had a budget surplus since 2001. Perhaps surprisingly, the countries to which the US is most in debt are Japan, which itself has significant debt, and China, which is often viewed as the United States' greatest economic competitor.

China​

China’s national debt is currently over 13.7 trillion USD; however, because of China's massive economy, the country's debt is only 76.98% of its GDP. China's current debt level is a significant increase from 2014, when the national debt was 41.54% of the country's GDP. An International Monetary Fund report from 2015 stated that China’s debt was relatively low, and many economists have dismissed worries over the size of the debt both in its overall size and relative to China’s GDP. China currently has the world’s second-largest economy and the largest population, with approximately 1.412 billion people.

How does US debt rank compared with the rest of the world?

The United States has the world’s largest national debt at $31.4 trillion.

www.aljazeera.com

Countries with the Highest National Debt 2025

worldpopulationreview.com

 

[aja8888]

The US debt is more than twice that of China’s, and our debt/GDP is FAR higher than China. What am I missing?

How does US debt rank compared with the rest of the world?

The United States has the world’s largest national debt at $31.4 trillion.

www.aljazeera.com

Beat me to it!

 

[JBTX]

I keep reading that, but US debt is more than twice that of China’s, and our debt/GDP is FAR higher than China. What am I missing?

How does US debt rank compared with the rest of the world?

The United States has the world’s largest national debt at $31.4 trillion.

www.aljazeera.com

Countries with the Highest National Debt 2025

worldpopulationreview.com

I can’t find an immediate link but Peter Zeihan on a podcast was explaining the breakdown of Chinese debt. There is a big chunk of it that is essentially off books - I think it may be government loans to the local provinces.

The combination of rapidly rising debt and shrinking population will likely eventually lead to problems.

 

[JBTX]

If their population falls by 60%, they still have nearly 600 million people. Unless population decline is being driven mainly by loss of fertility (which is possible), rather than social and economic trends, it isn't going to continue indefinitely.

As far as a debt bubble, the US had repeated economic crashes between the end of the Civil War and WW I.

It’s not just a decreasing population - you get to the point where you have few workers supporting a lot of older non working people. You have rapidly rising debt and a rapidly decreasing workforce and growing non working elderly.

 

[Out of Steam]

It’s not just a decreasing population - you get to the point where you have few workers supporting a lot of older non working people. You have rapidly rising debt and a rapidly decreasing workforce and growing non working elderly.

Labor shortages are certainly a concern with low birth rates, but in countries where most people save money through their lives, they are generally self supporting unless they have substantial need for physical caregiving.

The US has issues that make the situation far more difficult, the main one being extensive high-tech medical care where hospice would be more appropriate. here, it is routine that people die within 24 hours of entering hospice. Even bigger than the economic issue is that it is outright cruel.

Second is housing economics where elderly people remain highly isolated in large single-family homes because it is cheaper than moving to more suitable quarters.

 

[JBTX]

I keep reading that, but US debt is more than twice that of China’s, and our debt/GDP is FAR higher than China. What am I missing?

How does US debt rank compared with the rest of the world?

The United States has the world’s largest national debt at $31.4 trillion.

www.aljazeera.com

Countries with the Highest National Debt 2025

worldpopulationreview.com

Admittedly the cap he is wearing distracts from his credibility

 

[JBTX]

Labor shortages are certainly a concern with low birth rates, but in countries where most people save money through their lives, they are generally self supporting unless they have substantial need for physical caregiving.

The US has issues that make the situation far more difficult, the main one being extensive high-tech medical care where hospice would be more appropriate. here, it is routine that people die within 24 hours of entering hospice. Even bigger than the economic issue is that it is outright cruel.

Second is housing economics where elderly people remain highly isolated in large single-family homes because it is cheaper than moving to more suitable quarters.

Much of what Chinese have saved is in real estate, including vast empty communities that have been built and will never be finished out. If that happened here it would be washed out here fairly quickly where is there they prop up the illusion that all of these Chinese citizens have savings in something that is worth something.
Here is their corporate debt statistics

China: total debt to GDP ratio 2000-2023 | Statista

In 2023, total debt of nonfinancial sectors in China have grown to around 285 percent of the domestic gross domestic product (GDP).

www.statista.com

The question is between the debt load and the awful demographics how are they going to support their debt, their elderly (to the minimal extent they do) and also maintain their manufacturing base due to sheer lack of workers? They will need incredible amounts of automation to pull it off.

 

[triangle]

Could be, but I seem to recall that trucks were excused from the more stringent mpg regulations or at least had more leeway. Ford and others started to push pickups instead of sedans as a workaround.

Yes. An automaker might have a particular engine and platform underneath a SUV that is held to one MPG standard, while the same platform underneath a car is subject to higher standards. Makes little sense as the car would tend to be more aerodynamic and lighter and thus get a slighter higher MPG than its SUV sibling. This is also why there are more and more full sized trucks on the road. The Ford Maverick Hybrid is an outlier as most small pickups like those common in the 1980's and 1990's have been put out of existence by CAFE standards. AFAIK it is much easier to engineer and sale F150, F250, etc under the current mileage standards set by the EPA, as they have a larger footprint and therefore a lower mileage standard.

Ford and GM have lost a lot money on their recent electric vehicle offerings, which they heavily invested in part to get mileage credits for their profitable ICE vehicles. Rather than do nothing or push hybrids which can benefit both city and rural dwellers, the EPA has nudged buyers into larger trucks and SUVs and helped damage the auto industry, while making vehicle ownership more costly for everyone.

 

[Koolau]

China already dominates world industry as a whole. The fact that the items we buy are still labeled familiar Western and Japanese brand names is just for show.

My point exactly. And they want more...

 

[Koolau]

Ford and GM have lost a lot money on their recent electric vehicle offerings, which they heavily invested in part to get mileage credits for their profitable ICE vehicles. Rather than do nothing or push hybrids which can benefit both city and rural dwellers, the EPA has nudged buyers into larger trucks and SUVs and helped damage the auto industry, while making vehicle ownership more costly for everyone.

IOW you can't fool Mother Nature and you can't (for long) defy the laws of economics (a big one being that people will find a way to buy what they want).

 

[Koolau]

I thought China got rid of that one child policy years ago? Am I wrong here?

Nope. You're not wrong.

I think they finally figured out that "selecting" the sex of their one child (in effect so the family could have one boy) was a recipe for disaster. Imagine having half a billion young Chinese men with no women to marry. Not a pretty sight.

 

[Chuckanut]

I thought China got rid of that one child policy years ago? Am I wrong here?

You are correct. But as they say “The damage is done”.

 

[bloom2708]

Concept: Don't buy cheap Chinese junk. Repeat.

 

[Qs Laptop]

Concept: Don't buy cheap Chinese junk. Repeat.

The thing is, many of these Chinese EV cars are not cheap junk. They're pretty good automobiles. Nio, Xpeng, Li Auto all make nice cars. As long as the tariffs are on here, we won't see any of them.

 

[aja8888]

The thing is, many of these Chinese EV cars are not cheap junk. They're pretty good automobiles. Nio, Xpeng, Li Auto all make nice cars. As long as the tariffs are on here, we won't see any of them.

Don't forget BYD!

 

[Qs Laptop]

Don't forget BYD!

I didn't forget them. They are cheap, Chinese cars. I wouldn't categorize them as "pretty good automobiles." Basic transportation is the phrase I would use, although their more expensive offerings look OK.

 

[Sunset]

IMO, nothing like competition to drive some innovation, better product and lower prices. Remember around the 70s when US cars weren't up to par with the Japanese? What did we get? Better, more reliable cars out of GM, Ford et al....eventually. Until then we were convinced that Japan would herald the end of US car makers.

....

While N.A. manufacturers did improve their quality, it still never hardly ever got to the level of Japanese cars, and still today Toyota and Honda lead year after year.

There are a few exceptions, like ford after 20 years of making police cars (crown Victoria) finally got the quality up to the top 10 list, then they went and eliminated that model

 

[marko]

While N.A. manufacturers did improve their quality, it still never hardly ever got to the level of Japanese cars, and still today Toyota and Honda lead year after year.

There are a few exceptions, like ford after 20 years of making police cars (crown Victoria) finally got the quality up to the top 10 list, then they went and eliminated that model

Well, I don't think the goal was to equal or surpass Japanese quality. I think the goal was just to not suck enough in order to make people go to Toyota. 70s US cars were pretty bad IIRC. My brother had a mustang at the time and it was his last US made car he ever bought. Nothing but trouble from day one.