Most legacy auto are extensions of national economic policy and will NEVER be allowed to go bankrupt. Toyota, Stellantis, VW, MB, Hyundai, and dare I say it GM and Ford plus a few more.
I can see for Japan in particular the government will try to put up trade barriers for their home market, but that doesn't help exports.
All governments can do is provide cheap loans which can be used to support the company and keep some jobs, perhaps even fund some modest expansions.
But cheap government loans can't sensibly be used to sell more cars at negative margins. If that is the model, it can get expensive.
If loans are used to ramp up EV production, that might bid up the cost of battery cells and battery raw materials and more EVs can close the ICE production lines faster.
One big competitor Tesla does have is BYD, that is why it is important that Tesla EVs have better margins, and also that Tesla can match BYD production costs. BYD has a natural edge in the Chinese market, Tesla has a natural advantage elsewhere.
Trade protection is definitely going to target cheaper Chinese EVs as the highest priority.
Trade protection is one reason why Tesla needs more factories in more countries,
I think it is true that governments will prop up some car makers with a combination of cheap loans and trade protection. But that partially depends on which political party is in power, how much it costs, and how much money the government has.
I don't think a recession is certain, but should it happen, the strong typically get stronger, and the weak weaker.
