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Alex Terrell's avatar

That is a really good analysis.

If Chinese firms are undercutting European firms with the help of government subsidies, then two approaches are possible:

1. Shout that this is unfair, and impose some tariffs on the stuff to slow it down.

2. Say "thanks for the subsidies" and double the order.

Option 2 is what Europe has correctly chosen for solar panels. Yes, sorry the industry has gone in Europe, but the bigger prize is cheap, home grown electricity.

Option 1 is probably better for the car industry, which employs millions of people. Of course, it needs to be accompanied by the auto industry producing its own good EV models and at a low price. Renault 5 anyone? But why did it take so long?

Batteries are somewhat in between Option 1 and Option 2. Europe desperately needs more batteries, as shown by the power cuts in Spain and the massive intraday price swings in Germany and others (caused by all the cheap solar without batteries). And of course the car makers need cheap, good batteries from the likes of BYD if they want to compete with the likes of BYD.

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Michael Ethan Gold's avatar

The truth is invariably somewhere between “China manufactures the world’s clean energy technologies because of good reasons” and “China manufactures the world’s clean energy technologies because of bad reasons”. I lived in greater China for over a decade and incredible talent and know-how thrived alongside immense corruption and disregard for environmental and human rights standards. Both things can be true at the same time.

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