Xiaomi car business profitable after only two years 😮

[Zorg]

I doubt that much forced labor is involved in building cars, especially with dark factories. On the topic of IP, the issue is now being flipped on its head. China has taken the lead on many EV related technologies. For example, Ford LFP battery factory is licensing IP from CATL (IIRC).

I think it's a combination of many things, lower labor costs, large subsidies on Capex, a huge local market and long working hours. Taken together, Chinese car makers are taking market share everywhere, except here (thankfully). That being said, it is a matter of time before they build a plant in the US, at which point US legacy car makers will be woefully unprepared for the competition.

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[runwithscissors]

Belt and Road initiative that they are using to steal from poor countries around the world. We stupidly exported technology to them and they've stolen from us ever since. They play the long slow game like an anaconda squeezing but it's pretty obvious where they want to be long-term with dominating the world. I'm not a tariff guy but happily support them against China all day long.

 

[UnsungZero_OldTimeAdMan]

I doubt that much forced labor is involved in building cars, especially with dark factories. On the topic of IP, the issue is now being flipped on its head. China has taken the lead on many EV related technologies. For example, Ford LFP battery factory is licensing IP from CATL (IIRC).

I think it's a combination of many things, lower labor costs, large subsidies on Capex, a huge local market and long working hours. Taken together, Chinese car makers are taking market share everywhere, except here (thankfully). That being said, it is a matter of time before they build a plant in the US, at which point US legacy car makers will be woefully unprepared for the competition.

Doesn't need to happen in the US. It will happen in Canada, because of current US administration's near-sighted actions tantrums. And revision/renegotiation of USMCA has bipartisan support—because it means jobs for constituents of both parties.

As for IP theft... Puhleease. Reality: everyone steals takes inspiration from everyone else. Guilt and innocence is decided in courts. And justice is subjective (which courts? which judges/jury? whose laws?). Take a look at history of US space program and how it got its start immediately after WW2.

Every single automaker sample, study, and reverse engineer "benchmark" the competition's goods. Ford has done it with Xiaomi SU7. Ford is in talks with BYD to license their EV tech and batteries for hybrids (yawn).

 

[DuoRivian]

Doesn't need to happen in the US. It will happen in Canada, because of current US administration's near-sighted actions tantrums. And revision/renegotiation of USMCA has bipartisan support—because it means jobs for constituents of both parties.

As for IP theft... Puhleease. Reality: everyone steals takes inspiration from everyone else. Guilt and innocence is decided in courts. And justice is subjective (which courts? which judges/jury? whose laws?). Take a look at history of US space program and how it got its start immediately after WW2.

Every single automaker sample, study, and reverse engineer "benchmark" the competition's goods. Ford has done it with Xiaomi SU7. Ford is in talks with BYD to license their EV tech and batteries for hybrids (yawn).

Oh you cannot whitewash the IP theft that Chinese JVs have done to European and US companies since the 1990s so easily. It is pointless to go to courts when the Communist state runs everything g and you want to continue operating in the country.
It is completely false to equate how US and European governments and companies have operated and assessed their competitions vehicles to how China and Chinese companies have operated.

 

[Rade]

I have had my RADAR on, listening to matters about Chinese EV build quality. Funny, how we hardly hear anything about it... Last night, we caught the "Autoline Daily" about the Chinese EV companies coming into Mexico, and how the distributors there are not pleased with the overall experience with the companies. Also that JD Powers rates the vehicles poor at best.

We keep hearing how the Chinese are going to be the leaders in this segment. Granted they are making advances in areas of battery technology, but... if they can't make and support a comprehensively quality product, they are nothing more than a 21st Century Yugo. The "$4000 car in a $12,000 market!" which is about the only thing I ever hear regarding the Chinese autos.

 

[Great Gatsby]

I have had my RADAR on, listening to matters about Chinese EV build quality. Funny, how we hardly hear anything about it... Last night, we caught the "Autoline Daily" about the Chinese EV companies coming into Mexico, and how the distributors there are not pleased with the overall experience with the companies. Also that JD Powers rates the vehicles poor at best.

We keep hearing how the Chinese are going to be the leaders in this segment. Granted they are making advances in areas of battery technology, but... if they can't make and support a comprehensively quality product, they are nothing more than a 21st Century Yugo. The "$4000 car in a $12,000 market!" which is about the only thing I ever hear regarding the Chinese autos.

Build quality? To beat American vehicles? Rather low bar. The Asian and European markets have quality much more buttoned down, the U.S. automakers however...I wouldn't raise this as an area of concern for Chinese EVs. The bar is very low given how questionable the interiors of GM and Ford products have been in the past. Not just talking fit and finish and material quality, but also the onslaught of recalls associated with those brands.

 

[Rade]

Build quality? To beat American vehicles? Rather low bar.

Agreed to that! I see the Oldsmobile commercials with the SUV's that were made in China and I just wonder about overall reliability... and then we see the reports.

I am just tired of car manufacturers treating vehicles as "disposable"; that we HAVE to upgrade / buy new every 3 years. Ford and Honda both did that; I'd come out of the service center with the "Your car is worth $nnnnn dollars on a trade!", and I only had the vehicle for less than a year.

 

[Zorg]

I wouldn't be surprised if Chinese cars quality is so so. They come with new models every 2 years and prices there are super low to the massive excess capacity. So, it stands to reason that some shortcuts are taken.

 

[kurtlikevonnegut]

You would be very, very, embarrassed then because if they were allowed to sell one of their $15K EV's here in the states it would become an instant top seller in the country. It's the same with the Chinese garbage they sell on Amazon, Temu, Ali, etc... people buy it because it's available and at a low price.

There seems to be a common misconception that vehicles that China manufactures and sells within China for the equivalent of $15k could also be manufactured and sold outside of China for similar prices.

A multitude of people from across the auto manufacturing industry, RJ included, have discussed how this is not true and low manufacturing costs are not a threat to the US industry because the conditions that allow those prices do not exist outside of the PRC.

 

[NY_Rob]

There seems to be a common misconception that vehicles that China manufactures and sells within China for the equivalent of $15k could also be manufactured and sold outside of China for similar prices.

A multitude of people from across the auto manufacturing industry, RJ included, have discussed how this is not true and low manufacturing costs are not a threat to the US industry because the conditions that allow those prices do not exist outside of the PRC.

Can't disagree with anything you mentioned, but there's nothing preventing China from taking a (short term) loss on every vehicle sold just to gain a foothold here. I'm sure they have some sort of plan that takes all of this in to account already. Even if it means they sell that $15K vehicle for $20K here (still at a loss), there'd still be plenty of interest in it at that price.

 

[UnsungZero_OldTimeAdMan]

Can't disagree with anything you mentioned, but there's nothing preventing China from taking a (short term) loss on every vehicle sold just to gain a foothold here. I'm sure they have some sort of plan that takes all of this in to account already. Even if it means they sell that $15K vehicle for $20K here (still at a loss), there'd still be plenty of interest in it at that price.

And just about every foreign brand has done this in the past. Each time the big 3 cried and moaned to receive protection. And here we are... for better and for worse.

 

[NY_Rob]

And just about every foreign brand has done this in the past. Each time the big 3 cried and moaned to receive protection. And here we are... for better and for worse.

Back in the day (we're talking maybe 1988/9 or so IIRC) a work associate purchased two KIA vehicles for what it was going to cost him for just one American vehicle. He got a lot of criticism from co-workers for supporting a non-American car manufacturer, but he got two new vehicles instead of just one for the same price and that's all that mattered to him and his wife.

 

[UnsungZero_OldTimeAdMan]

Back in the day (we're talking maybe 1988/9 or so IIRC) a work associate purchased two KIA vehicles for what it was going to cost him for just one American vehicle. He got a lot of criticism from co-workers for supporting a non-American car manufacturer, but he got two new vehicles instead of just one for the same price and that's all that mattered to him and his wife.

Yup. And remember the ugly anti-Japanese xenophobia of the 80s? And look now at who drives Toyotas and what their political alliances are? Ironic.

 

[kurtlikevonnegut]

Can't disagree with anything you mentioned, but there's nothing preventing China from taking a (short term) loss on every vehicle sold just to gain a foothold here. I'm sure they have some sort of plan that takes all of this in to account already. Even if it means they sell that $15K vehicle for $20K here (still at a loss), there'd still be plenty of interest in it at that price.

Except for the 100% tariff currently set against Chinese made EVs. They'd have to take a much bigger loss and would be paying a hefty sum to Uncle Sam in the process.

Yup. And remember the ugly anti-Japanese xenophobia of the 80s? And look now at who drives Toyotas and what their political alliances are? Ironic.

Japanese xenophobia from the 1980s is very different from the current wariness towards China, and it's frankly somewhat prejudicial to equate the attitudes simply because they are both Asian countries.

Japan was (and is) a free market democracy that was effectively trying to out-America the US manufacturing sector. China is a totalitarian adversary that actively undermines the US and US interests on a daily basis.

It would be much more appropriate to compare Chinese EVs being sold in the US to the USSR selling the Yugo in Europe, if the Yugo had been a decent car.

 

[VegasWeezy]

Massive revenue milestone, nothing about profit the way I would understand it in GAP or Non-Gap terms. Hoping one day we get to see some of the vehicles the rest of the world gets from them and other manufacturers.

On the subject of subsidies, the US and local governments have and do subsidize many industries to keep them afloat and or profitable. Just the ones getting over $2.0B below (7 are auto companies, #21 is Rivian). A number of the 100 or so getting $600MM or more wouldn't be around without these subsidies.

RANK	PARENT	SUBSIDY VALUE	NUMBER OF AWARDS
1	Boeing	$15,959,241,139	1,135
2	Amazon.com	$14,526,460,010	531
3	Intel	$8,387,434,616	140
4	Ford Motor	$8,007,289,405	717
5	General Motors	$7,768,777,198	825
6	Micron Technology	$6,792,931,915	23
7	Alcoa	$5,727,691,764	134
8	Cheniere Energy	$5,617,152,523	45
9	Foxconn Technology Group (Hon Hai Precision Industry Company)	$4,820,890,447	77
10	Venture Global LNG	$4,338,702,441	8
11	Texas Instruments	$4,287,839,492	81
12	Volkswagen	$4,191,804,970	231
13	NextEra Energy	$3,992,027,445	134
14	Sempra Energy	$3,828,022,782	51
15	Tesla Inc.	$3,160,105,860	117
16	Stellantis	$2,989,570,042	220
17	Sasol	$2,836,049,845	72
18	Walt Disney	$2,817,301,577	294
19	Nucor	$2,595,649,272	223
20	OGE Energy	$2,577,684,579	23
21	Rivian Automotive Inc.	$2,568,659,251	12
22	Hyundai Motor	$2,518,602,158	21
23	Iberdrola	$2,380,579,908	112
24	Oracle	$2,334,272,188	103
25	Alphabet Inc.	$2,318,718,627	141
26	Toyota	$2,316,165,278	208
27	Shell PLC	$2,303,226,371	136
28	Meta Platforms Inc.	$2,296,083,629	108
29	NRG Energy	$2,287,519,152	217
30	Comcast	$2,255,102,404	444
31	Energy Transfer	$2,234,567,247	199
32	Paramount Skydance Corporation	$2,207,106,236	368
33	Mubadala Investment Company	$2,132,479,057	64
34	Nike	$2,121,167,829	166
35	Berkshire Hathaway	$2,018,905,138	1,294

Amazon has received $14.5 billion in subsidies.... Incredible. They have over $250 billion in retained earnings and their net income for 2025 was nearly $77.7 billion.

They should be disqualified from ever receiving another subsidy.

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