Yes but the level of investment the Chinese have poured into battery production and EVs in general is also completely unparalleled. Industrial policy is nothing new for US and EU but just not at that level.
To be able to compete with China the West would need to:
- Match generous subsidies to companies, not just through banks but at the government level by building entire towns just for battery production.
- Making large parts of land uninhabitable for the cost-effective extraction of rare earths.
- Suppress wages at factories and engineering bureaus to be able to cost compete in manufacturing.
- Dramatically lower cost of energy production (only doable without renewables in the short term).
I just don't see any Western government having a strong enough mandate for any of the policy changes required to compete with China. The simpler reaction is just imposing tariffs.
To be able to compete with China the West would need to:
- Match generous subsidies to companies, not just through banks but at the government level by building entire towns just for battery production.
- Making large parts of land uninhabitable for the cost-effective extraction of rare earths.
- Suppress wages at factories and engineering bureaus to be able to cost compete in manufacturing.
- Dramatically lower cost of energy production (only doable without renewables in the short term).
I just don't see any Western government having a strong enough mandate for any of the policy changes required to compete with China. The simpler reaction is just imposing tariffs.