Arthur Kroeber

They had not figured out how to make these cars.

And Tesla did have appealing products that people wanted to buy.

They were big status symbols.

So BYD and its competitors said, okay, this is the part we have to figure out.

How do we –

How do we achieve this?

And basically, they recognized that they had to up their design game.

They, among other things, went to Germany and –

loaded up on a lot of German car designers that were able to transform their kind of technology base into much more appealing packages.

And then by 2022 or so, they were able to compete with Tesla both on price and on quality.

So I think what that shows you is that, number one, the Chinese government made a pretty good bet

on this kind of leapfrogging idea that there are technologies of the future, we need to get in early, subsidize the heck out of them.

Some of the estimates that have been made about the level of subsidies given to the EV industry and related supply chains, it's two or $300 billion, huge, huge amounts of money that did not generate that much of a return, financial return for a really long time, but they stuck at it.

And then,

The thing that finally flipped the switch was this catalytic foreign investment that showed the Chinese companies what they needed to do to actually compete in the consumer market.

And then they got very good at that very quickly.

You know, I think the thing is, it's like the old slogan about advertising, half of it works, but you don't know which half.

Yeah, did China need to spend that much in subsidies?

Probably not, right?

But had they spent less, would they have had the same effect?