China’s plan to dominate EV sales around the world
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If China can leapfrog the developing world straight to BEVs rather than going through gasoline cars, that would be amazing. Unfortunately it wouldn’t reduce emissions much compared to now, because they have relatively few cars, but it would prevent a large increase in oil consumption that would choke their lungs, spike our climate, and fund a bunch of autocrats (and the Conservative Party of Canada).
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The whole question/issue of tariffs is so complicated. I'm not smart enough to figure it out.
Apparently in the 1960s tariffs were placed on imported trucks... that had something to do with the price of chicken ... chicken!
But this very decision has had long-lasting ramifications for the foreign and domestic car and truck market in the USA...and it still matters today.
Apparently in the 1960s tariffs were placed on imported trucks... that had something to do with the price of chicken ... chicken!
But this very decision has had long-lasting ramifications for the foreign and domestic car and truck market in the USA...and it still matters today.
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As much as western cars have, ie a lot. For countries that trust the great powers as far as they can throw them, it’s six of one, half dozen of the other.
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Yeah, let’s keep buying cheap crap from a communist dictatorship, send them billions of dollars, move production of critical goods there, while reducing employment in our home countries. Who cares about work exploitation and zero environmental regulations.
What could go wrong?
What could go wrong?
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It's the main reason why we can't have cool compact trucks in the US, like the rest of the world has.
And now we won't be able to have nice electric compact cars. History repeats itself.
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Did something go wrong with the graph export to Ars? Both are missing data. For the first you can still sort of see the 'Asia' bar between the others, but for the second graph the 'US' and 'Rest of world' data is missing entirely.
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I'm sure the data exists, though it is surely fiercely protected, but it feels like it's really important to get a better understanding of the real cost breakdowns that go into these Chinese EVs - as well as their Western and Japanese competitors - to try and understand the true nature of this problem.
Is it labour costs? Material input costs? Manufacturing processes? Supply chain logistics? All of the above, and more?
How much do government subsidies and direct cash transfers actually represent in the bottom-line price tag of every vehicle? In 2022 BYD received ~$2.3B in direct government transfers, but they also sold 1.8M vehicles, so that only amounts to a little bit over $1000 per vehicle. And (to our understanding) the subsidy has declined in recent years, while sales have increased dramatically. That represents some degree of unfair subsidization, but not nearly enough to be significant in this market, so it seems like a bit of a policy red herring, actually.
So it seems like surely there is another, much more significant, aspect of Chinese industrial policy that needs to be targeted to become competitive against EVs like the BYD Dolphin that start at $14K in China. That said, for whatever reason, that same vehicle sells for $31K in Mexico - is it just tariffs, transport costs, and pure profit making up that difference, or are the basic configurations sold in China unsustainably priced loss-leaders that wouldn't be viable in other markets?
In any case, the direct competitor for such a vehicle would probably be something like the Citroen e-C3 which starts at $25K and would compete against a Dolphin that costs something like $16-17K. That's still not a tiny gap, but it also doesn't seem obvious to me that Western EVs are fundamentally uncompetitive.
I do hope the engineers, product strategists, and supply chain managers at Western EV companies are as interested in these questions as I am...
Is it labour costs? Material input costs? Manufacturing processes? Supply chain logistics? All of the above, and more?
How much do government subsidies and direct cash transfers actually represent in the bottom-line price tag of every vehicle? In 2022 BYD received ~$2.3B in direct government transfers, but they also sold 1.8M vehicles, so that only amounts to a little bit over $1000 per vehicle. And (to our understanding) the subsidy has declined in recent years, while sales have increased dramatically. That represents some degree of unfair subsidization, but not nearly enough to be significant in this market, so it seems like a bit of a policy red herring, actually.
So it seems like surely there is another, much more significant, aspect of Chinese industrial policy that needs to be targeted to become competitive against EVs like the BYD Dolphin that start at $14K in China. That said, for whatever reason, that same vehicle sells for $31K in Mexico - is it just tariffs, transport costs, and pure profit making up that difference, or are the basic configurations sold in China unsustainably priced loss-leaders that wouldn't be viable in other markets?
In any case, the direct competitor for such a vehicle would probably be something like the Citroen e-C3 which starts at $25K and would compete against a Dolphin that costs something like $16-17K. That's still not a tiny gap, but it also doesn't seem obvious to me that Western EVs are fundamentally uncompetitive.
I do hope the engineers, product strategists, and supply chain managers at Western EV companies are as interested in these questions as I am...
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China has an export driven economy. Their choices are export or die. They do no have the demographics structure for an internal consumer-based economy.
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I understand and agree with counties adding tariffs to imports of Chinese manufactured vehicles that are likely heavily subsidized directly and indirectly, but I'm having trouble with this aspect. If BYD is setting up auto plants in various countries, isn't that exactly what should be happening? BYD building a plant in South Carolina or Tennessee would be a good thing, wouldn't it? I know this is complicated so I'm probably missing something obvious from a geopolitical aspect.
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Have you considered responding to the article, rather than just jerking your knee?
We're talking about Chinese companies opening up factories to produce critical goods in various countries, increasing employment in those countries.
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Nothing like saving the planet on the back of slave labor from a mass polluting fascist regime.
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If you visit a country without a domestic car industry to protect, the overwhelming superiority, and availability, and price of Chinese EVs slaps you right in the face.
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The "evil" is that China heavily subsidies their export car market so other countries can't compete. Their environmental record is terrible, both on the raw inputs and manufacturing sides. I believe their electricity is about 70% coal generated, assuming the numbers aren't fudged. Their labor and human rights records are poor. Plus, we've just experienced what happens with brittle global supply chains.
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The protectionism is going to keep car companies safe….. iiiin only their home country…
Meaning their engineers will get complacent, not see the cars that are beating them around the world… because they’re not sold in the US
Add in some anti china bias of “everything made there is crap”
And now you have. A perfect recipe for destroying the car industry here.
Basically this is the same playboik as japanese cars. And nearly killed US automaking before.
If you want to keep them alive. Subsidy them if you must, and tarriff the import just enough to pay for the subsidy,
But subsidies create fat lazy companies that don’t trim their fat or innovate because the subsidies keep them afloat anyways.
These chinese cars are well built, affordable
Have actually fast ARM chips in their system, good adas features, did i mention cheap, and actually tolerable UI’s?
Its time the legacy carmakers stop trying to save 30$ on the compute chip…
Meaning their engineers will get complacent, not see the cars that are beating them around the world… because they’re not sold in the US
Add in some anti china bias of “everything made there is crap”
And now you have. A perfect recipe for destroying the car industry here.
Basically this is the same playboik as japanese cars. And nearly killed US automaking before.
If you want to keep them alive. Subsidy them if you must, and tarriff the import just enough to pay for the subsidy,
But subsidies create fat lazy companies that don’t trim their fat or innovate because the subsidies keep them afloat anyways.
These chinese cars are well built, affordable
Have actually fast ARM chips in their system, good adas features, did i mention cheap, and actually tolerable UI’s?
Its time the legacy carmakers stop trying to save 30$ on the compute chip…
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jm_leviathan
Ars Scholae Palatinae
Japan and Korea export more than 50% of their annual vehicle production volumes, China around 15%. China imports far more cars from Europe than are exported to Europe from China. "Industrial overcapacity" is racist, xenophobic nonsense.
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It appears to have been prepared for a black background, but now is presented on a white background.
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The "overcapacity" is the most absurd accusation I have ever heard to block free trade.
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Why are the Chinese able to sell EVs for under $10k, but for Americans the lowest possible price is $35k? Is the Chinese government subsidizing their cars to the tune of $25k PER CAR, or is there a chance Americans just aren't very good at building cars in a cost-effective fashion? Or is it option C, profit margins on American EVs are just very high?
Also I'd be ok with buying Chinese EVs here even with the 100% tariff. That's still under $20k.
Also I'd be ok with buying Chinese EVs here even with the 100% tariff. That's still under $20k.
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I still struggle to understand what an "overcapacity" means. On its face, the word appears to suggest that production is higher than consumption. However, this is true of every export industry. One does not say that the US farm sector has an "overcapacity" issue simply because the US produces more grain than it can consume and exports the excess.
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Then you should probably find a decent security report of those EVs provided by professional security research agencies. Guessing won't help.
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When Chinese companies build to Western standards, the costs are only slightly lower than comparable cars. There's no magic, they're just building smaller, cheaper cars.
If you ditch the requirement that the car be road-safe and capable of long ranges, you can get a $10k electric vehicle in the US today: a golf cart.
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This was obviously coming over a decade ago. The US electorate kept voting for it, Tat least until 2020.
And now polling suggests ongoing strong support for preventing US development and future quality jobs.
Lots of US voters asked for this and they want more.
And now polling suggests ongoing strong support for preventing US development and future quality jobs.
Lots of US voters asked for this and they want more.
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It's very hard to calculate because so many layers of the BOM costs of a Chinese BEV have subsidies.
There are several companies in the US that specialize in taking apart cars and figuring out the cost of every nut and bolt. They sell those reports to car makers and parts suppliers. Using those reports they can get a sense of how much the car should really cost vs how much they are selling it for. These same companies have been warning US automakers for the last three years that Chinese BEVs are coming.
I think the biggest issue Chinese car makers will face is charging. One of the benefits of being in China is the gov't controls charger tech. The chargers are all the same so the interoperability issues really isn't a thing. DC Fast charging has proven to be an issue for US and European auto makers.
The other headwinds China faces in the US is the cost of having a dealer network. When the Japanese came here they were economic competitors, but politically and strategically they were our ally in the pacific. That's not the case with China.
On the other side of the coin, Tesla pushed for a lot of dealer law changes that a company like BYD could leverage.
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Only the drug kingpins in Latin America can afford Hummer EVs. Many lower middle class and factory workers will be able to afford a $10-15K Byd, especially if it is built locally, and its manufacture is pumping money into the local economy. One can bemoan the many, and real, vices of China until one is blue in the face, but that particular arithmetic will not change. I see not a whit of evidence that US companies have even the faintest of desires to compete in this market, so unsurprisingly, it will go elsewhere.
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Uh... China has more motor vehicles on the road than the US....
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Assuming that was even possible, and not a mere sci-fi trope, would BYD & co be so stupid as to... weaponize EVs for whatever reason and potentially kill their sales - not just in Australia but globally?
“I saw it in a movie, so it could happen” does not sound like a... sound argument to me.
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It depends on how the Chinese are doing it. They have a long history of using their Silk Road initiative to build infrastructure in various countries, but saddling those countries with mountainous amounts of debt to China. And staffing the construction projects heavily with Chinese nationals. The end result was the infrastructure was great for China, not so much for the host country.
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Are you referring to the base-level BYD Seagull?
That car has a 30 kWh battery pack, just like the larger pack on the 1st generation Nissan Leaf. So based on that this vehicle probably delivers about ~110 miles of EPA range.
There have been other cheap short-range EVs available in the US, but no one bought them, so...
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A few years ago, I tried to get a test drive for a nissan leaf at the local nissan auto dealer here in Mexico, there was only one unit on exhibition in the whole city, was told that I couldn't drive it, and the the car was on sale at about 35,000 dollars at that time exchange rate, the only other EVs at the time that was available in local dealers was the BMW i3 and i8. A few years forward and today's nissan leaf is at about 55,000 dollars, there's a bunch of new EV and hybrids from other brands from Ford mustang Mach e to tesla and most brands that offer an EV, Toyota has been stubborn and hasn't released any plug-in hybrids here.
And suddenly a bunch of Chinese motor brands appeared opening show rooms one after another, GWM, JMC, BYD, Jinpeng, etc. I've taken to look around and ask for test drives of the cars, most of them feel good quality and with equipment that surpass any of the established American, European and Japanese brands for the same price. I've driven the dolphin mini from BYD and their new hybrid pick up truck. Jinpeng launched a few weeks ago in the city, and the cheapest option is a 13,000 dollars EV, cheapest than the cheapest gasoline car available in the country. It's small and with a lot of compromises, but for a city only car that fulfill the role of the second or third car doesn't look bad. I can see many unfamiliar brands every day onthe streets.
Traditional brands need to start taking this competition seriously and offer better options if they want to stay relevant in Latin American market. Some have already started by reducing prices of their cars.
And for the spying the Chinese can do, well, it's no like the American brands aren't doing it anyway. I'll simply won't insert the sim card in the card and firewall the wifi connection if I need to connect the car to my home wifi.
If anyone wants my opinion from my perspective as a Mexican consumer or any data from here, you can ask.
Edit: for those afraid of the $10,000 dollars chinese car, here's a link so you can check it out: https://jinpengmexico.com/producto/uni/
Look for youtube videos on the car. I'm sure the American market it's not their target.
And suddenly a bunch of Chinese motor brands appeared opening show rooms one after another, GWM, JMC, BYD, Jinpeng, etc. I've taken to look around and ask for test drives of the cars, most of them feel good quality and with equipment that surpass any of the established American, European and Japanese brands for the same price. I've driven the dolphin mini from BYD and their new hybrid pick up truck. Jinpeng launched a few weeks ago in the city, and the cheapest option is a 13,000 dollars EV, cheapest than the cheapest gasoline car available in the country. It's small and with a lot of compromises, but for a city only car that fulfill the role of the second or third car doesn't look bad. I can see many unfamiliar brands every day onthe streets.
Traditional brands need to start taking this competition seriously and offer better options if they want to stay relevant in Latin American market. Some have already started by reducing prices of their cars.
And for the spying the Chinese can do, well, it's no like the American brands aren't doing it anyway. I'll simply won't insert the sim card in the card and firewall the wifi connection if I need to connect the car to my home wifi.
If anyone wants my opinion from my perspective as a Mexican consumer or any data from here, you can ask.
Edit: for those afraid of the $10,000 dollars chinese car, here's a link so you can check it out: https://jinpengmexico.com/producto/uni/
Look for youtube videos on the car. I'm sure the American market it's not their target.
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