A company that builds a robotic factory from scratch and that only makes electric cars will be able to make cheaper cars than one who already has a huge headcount of combustion car workers. Auto workers are unionised and often working in factories bound by political agreements. You can't just close the combustion engine plant or reeducate everyone to make electric engines, it's years of negotiations.

If you start from scratch you don't have that problem, and you don't need to include that cost into the price of your cars.

That said, it makes perfect sense for a civilised society to protect their workers while they are reeducated and reassigned to new work by blocking foreign competition. But only for a while, while going all-in on the required changes.

Reality can't be ignored forever.

Whenever competitors showed up, they laughed at them, before panicking when those upstarts starting challenging their market dominance. It happened with Japan, Korea, and now China.

So, if you feel China competes unfairly, close off your markets. Countries without a local auto industry will accept Chinese EVs readily. BYD & co. will snatch American & EU automakers' foreign markets before they come home to swallow you alive by building factories in low-cost countries like Bulgaria, Mexico, & Brazil.

Basically, the Toyota cycle will repeat itself because Western (esp. American) automakers spent hundreds of billions on share buybacks instead of R&D.