Comparing costs between Western and Chinese automakers in China shows that subsidies matter, but they’re only part of the story. Chinese carmakers benefit from fundamentally lower cost structures, driven by tighter control over their supply chains and a stronger focus on the China market—both of which significantly reduce operating costs. They also make more aggressive use of supplier-backed financing
Chinese manufacturers look like they’ve figured out vertical integration and manufacturing automation. BYD makes a TON of items themselves, from battery to drive-trains, tires, telematics, sensors, etc. And they can iterate FAST. It also means their battery division sells to the car division at cost, whereas a different manufacturer would have to pay cost + profit. Also, robots.
There’s no way a Ford, Toyota, or VW will ever go back to making their own components.