Calling it now: Safe for any potential major conflicts or crises creating full isolation and destroying all trade with China (e.g. a Taiwan escalation), traditional western vehicle makers are gonna get completely wrecked. Their shift to electric is far too slow and too far behind already. And it's also too late for another industry disrupting startup like Tesla.
> Their shift to electric is far too slow and too far behind already. And it's also too late for another industry disrupting startup like Tesla.
Is it? At this point I’ve driven electric Audis and BMWs, VWs, Kia’s and also BYDs.
While the BYDs are certainly cars and are also relatively affordable compared to other options (of course it’s impossible to compare a BYD car to a BMW), it is not a very nice car in my experience.
Wether or not that is enough of a difference to sway consumer sentiment remains to be seen, but I don’t think it is as over as you make it out to be.
"Wether or not that is enough of a difference to sway consumer sentiment remains to be seen."
I think the biggest advantage from cars not from china are, that they are not from china.
No Huawei risk. No dead car in a major escalation.
Cars have gotten too smart and too connected for me to feel safe with a direct control line to Peking. (I also don't feel safe with a control line to Musk's HQ)
Car companies did make some compliance cars (I own one - Ford Focus 2017) and honestly it's a great city car. My wife prefers it to our more expensive SUV EV.
In addition to the spark EV, Fiat 500 EV, etc these are all no longer sold here. You might be able to pick one up used.
I know the VW ID3 got a lot of critique early on. But after seeing a lot of reviews I got the chance to test drive a newer model myself and it is a pretty cool car all things considered. Granted, we're still looking at a 35k MSRP, but in the EV space that is a relatively entry level vehicle.
The Renault Megane E Tech is a also a pretty cool vehicle hitting the same pricepoint (haven't driven that one yet tho). Citroen is also hitting very accessible pricepoints with their E3 starting at 23k MSRP
If the price of a new base clio starts at 20k€ and a Fiat panda at 15k€, than 40k€ is around the correct ballpark price for an eGolf I would argue, relatively speaking.
We could considered the Chinese cars as cheap, but we are than comparing the cost of a price-dumped car from China, to a slightly overpriced car from Germany.
The outlier here is considering a 10k€ car something normal. 10 years ago I would have argued yes, but after the inflation wave of the last few years, that is no longer a reality.
The problem for many consumers, and France is a good example of this, is that the salaries haven't followed. The second problem for France is that a large part of the population is stuck in minimum-wage or close to minimum-wage salaries, putting those goods out of reach as their prices increase with inflation. (Leaving the debate about whether the price increase is the cause or the consequence of inflation aside)
> than 40k€ is around the correct ballpark price for an eGolf I would argue, relatively speaking.
Only if these cars are only intended for the affluent. Then sure. It's totally the right place for them. But I thought the point of EVs was saving our environment. What's the point if only a small fraction of any given population can afford one?
what constitute "nice"? from all of the reviews i've seen, they're well built. The common misconception that chinese electronics products are made cheap and poorly is no longer true today (hasn't been true for the past decade).
"I just need to get from point a to point b without getting hurt"
I also enjoy being comfortable while doing so. Meaning sitting nice, good climate control, no bad smells, good sound isolation, ... being able to use the trunk.
Also a "nice" car also drives nice. If I like driving a car, it means I can handle it better - which is critical in critical situations - to not get hurt.
I think you are right. BYD and other companies won't stay in China either. They'll be opening up factories in Turkey, Mexico, etc. This will start creating issues for incumbents in most markets. The US and EU might protect their domestic markets with tariffs for a while. But their exports are going to suffer. And short of imposing tariffs on lots of other countries and suspending related trade agreements, cars will still come into domestic markets via those new factories. And inevitably, some companies will start falling over and might fall in the hands of foreign investors or disappear completely.
It's a repeat of the emergence of Japanese car manufacturers in the eighties. The same dynamics are at play here: the Chinese products are simply better and cheaper. And contrary to the popular believe that's not just subsidies. Those foreign factories in Turkey, Mexico, and elsewhere will be producing low cost vehicles. The cost difference is the competitive advantage Chinese companies now have. They might have gotten there via subsidies but now that they have this cost advantage, it's there to stay. To compete, other companies will have to address their cost issues and their R&D deficit. There's no way around it. Producing more costly vehicles is just going to continue to price them out of the market.
Delay tactics don't work. Tariffs don't work. Delaying investments, doesn't work either. That about sums up the current attitude of a lot of the legacy companies. Dragging their feet, reducing investments, and lobbying for tariffs to protect their businesses. To survive, they would need to reverse their strategy and shift all effort towards producing low cost EVs. There's plenty of demand. But not for overpriced products.
Something interesting I heard from a chip company that's huge in the space and work intimately with many automotive companies - why Chinese companies grow so fast is because their development cycle for a car is ~2-3 years, compared to traditional manufacturers who take 5-7 years. This is a massive edge in pushing out new features and exploiting the very rapid new tech - batteries, self driving, etc.
Stellantis is the perfect illustration: they kept putting all efforts into pushing their flawed ICE engine (PureTech) because they wanted to make profits from it for at least 10 years. And now the efforts are still not on making a good affordable car but on lobbying to revoke the EU ban on the sale of petrol and diesel cars.
Europe is already talking heavy tariffs to protect it's automakers, with Trump winning and his stance on the issue - doubtful they will let this happen.
That ignores the rest of the world though. Trump can’t prevent China from selling to Africa, South America, India, Southeast Asia, Australia, … many of those countries (Aus) don’t even have domestic auto producers to worry about. Yes, the USA, South Korea, Japan, and Western Europe can protect their own markets, but the world is huge and China can easily dominate EVs everywhere else.
What EV markets outside the US/EU? Australia and maybe Thailand? Otherwise, it's difficult to find infrastructure that supports EVs elsewhere.
BYD is already in Japan, but it's quite limited. China has shadow-banned Korean automaker Hyundai/Kia since 2017 (THAAD) and battery makers LG, Samsung, SK since 2016 -- not sure if China would be warmly received there.
south americans, the african continent, just to name a few.
> it's difficult to find infrastructure to support EVs.
sure, but it doesn't mean it won't get built. What if china goes all in, and do the belt-and-road initiative v2, and build out those countries' infrastructure (and conveniently eliminate the soft power that the US would have there, such as financial power)?
China has no real "defense" against financial power of the US (vis a vi sanctions), but they're surely doing something about it. And given the CCP's long term planning (for which they can, since they're authoritarian and don't need to cater for an election every few years), they can press for policies that play out long term.
There is a huge market outside of the US/EU. Indonesia, India, Pakistan, Nigeria, Brazil, Russia, etc…all they need is to provide a better value and they’ll own the market, nothing the US can do about it.
EV infra and is a lot easier to realize than importing/refining oil. Electricity can be generated in a variety of ways and, oh, hey, China is exporting that also.
I don’t know. There are plenty of places where you don’t have gasoline to fill up a plastic bottle (which is how they do it in most of the developing world), but a water wheel generating electricity from glacier run off.
they go thru the soft underbelly of mexico. And with that method, entrench mexico's economic interests with chinese manufacturers, and by indirection, give the CCP soft power over them.
You might be thinking of "POTUS" rather than "politician".
eg:
Mitch McConnell, senior United States senator from Kentucky since 1985, the longest serving senator in his state's history. McConnell has been the leader of the Senate Republican Conference since 2007, including as majority leader from 2015 to 2021, making him the longest serving Senate party leader in U.S. history.
> after 2 consecutive terms.
Even for POTUS it's a two term, under ten year total limit, doesn't have to be consectutive terms.
Assuming the incumbent doesn't push through legislation to change that. Not sure how enshrined in constitution that is so can't comment on the feasibility of it.
The writing has been on the wall for a while now. Traditional automakers have tens of billions of R&D sunk in ICE vehicles they were planning to payback in decades. Now they have to spend that again on EVs and they just have no desire.
They’re also extremely slow to react, and can’t fathom that people don’t really want what they’ve been selling the last couple of decades, they just didn’t have an alternative. Now they do.
That’s only true in western markets because legacy auto are treating EVs as luxury goods and don’t offer any model <30k. The Chinese car market is already over 50% BEV, NEV. It’s clearly the future.
Musk is very keen on criticizing the US and other governments. But can you find for me a single criticism of the Chinese government from Musk? I'd like to see one.
I think it's just the cost of doing business in China. A lot of American CEOs including Elon Musk, Tim Apple have to sing and dance to the CCP's piping. And China is still the biggest EV market with 2/3 of the global EV market share.
> American CEOs including Elon Musk, Tim Apple have to sing and dance to the CCP's piping
They don't have to, they choose to. Oligarchs usually submit to authoritarians because profit comes before principle. They get their short term gain and others will have to pay the long term cost.
The biggest hindrance to EV cars in the US is the lack of public charging.
Until every WalMart, Target, 7-11, and government agency have charging stations on 1/3 of their parking lot, public EV vehicles are a pipe dream.
Detroit is, sadly, calling this 100% correctly. There is no point in doing heavy public EV rollouts until there is a demonstrated political will to roll out the charging infrastructure.
Over 60% of US families live in single family detached houses and would be able to charge an EV at home to cover all their normal day to day driving. They'd only need to use public charges on the occasional long trip.
For large parts of suburban areas with single or dual family homes this is just wrong. Even a wall socket charger (no wall box) will keep most commuters charged.
Yes, charging infrastructure needs to develop but for many this is a no issue to adopt.
That is only partially correct. The charging infrastructure can become self rolling out.
As in a robot driven cabledrum comes feom a central place to your car. The whole "it has to mimick a petrol station" idea is evaporating fast.
> Their shift to electric is far too slow and too far behind already.
when a push comes to a shove, the goal of electrification of cars can be merely postponed. climate change is a far-off future problem, where as geopolitical rivalry and such are close-by problems.
Beware that the author is comparing an additional capacity (of BYD, estimated as 2.4M/yr) against a production (of Tesla, estimated as 1.8M/yr, while the capacity is nearly 3M/yr). Nitpicking, I know, but numbers are meaningless without the proper "unit of measure".
> Last fall in Malta, BYD began selling the Atto 3, an all-electric compact crossover. Strip away the company’s futuristic logo, and it looks almost indistinguishable from other small, sporty SUVs. But inside it’s full of treats, including heated seats in vegan leather and a 360-degree rotating touchscreen. The 60-kilowatt-hour battery gives it a range of 260 miles, enough to circle Malta’s main island twice. And by European standards, it’s inexpensive, at about $28,000. It’s a novelty in Malta. But the real reason BYD is entering the European Union’s tiniest member state? The company’s happy place is emerging markets and countries with no domestic auto industry to defend: “You can basically describe them as a ‘chicken rib market,’ ” says Yu Zhang, the managing director of consulting firm AutoForesight in Shanghai. “All the chicken ribs added up together, it’s more than 10 million cars.”
> After increasing its annual sales in China 15 times over, to 3 million cars in only three years, BYD is now exporting to roughly 95 markets, including 20 new ones this year. The company is building, has recently opened or has announced plans for assembly plants outside China in 10 countries on three continents. The speed and scope of this expansion have caught the global auto industry off guard and triggered protectionist tariffs in the US and EU, where policymakers fear Chinese players such as BYD will, in the words of Elon Musk, “demolish” their domestic automakers.
I am scared that these EVs will become too affordable. Cheap EVs will be an even bigger problem for urban environments. EVs are much simpler to make than gas cars, so will likely be cheaper and people will own more cars in total. This causes more parking problems. Plus they are much cheaper to drive as well, so people are more likely to drive somewhere, causing more traffic congestion.
Maybe the geopolitical situation will make the car lobby industry less powerful.
Just limit parking place inside cities. That worked well in the city i live in, they divided the available street parking spot by 3 and added external parkings in the outskirts. Honestly it worked great, the number of restaurants and small convenience store downtown exploded. Only downside, it made commercial leases more expensive and that pushed my music store outside of the city center.
Are people willing to gamble on long-term economic growth and prosperity (locally) by buying a chinese car for the individual, personal savings/value?
I can't help but feel this is a very shortsighted strategy for buyers. The world is pretty unstable at the moment, and throwing a huge industry in the hands of China for the sake of getting a cheaper/bigger ("I want MORE for LESS") car, seems awfully risky.
It also seems to be in direct contradiction with the whole nationalist agenda that is sweeping across the west these days...
So e.g. Danes would buy BMW:s over BYD out of patriotic duty or what? Almost no one cares. There is some 'irrational' support for local brands but many countries have none.
The European and Amrican car manufacturers are full of them self and want to sell premium vehicles to rich people. That is the fundamental problem. Covid gave them hubris.
As European but not German or Czech I couldn't care less about where my car was made. The idea of a 'local' car doesn't really exist, when there is no car industry in your own country.
You're wrong. Factually wrong. Plenty of smaller companies deliver parts and services to the European car industry. Here in Denmark, Danfoss had to fire 200 people because of Volkswagens decline.
Buying a chinese car means that you directly support the chinese regime, and that you directly undermine a "local" European competitor.
But if you're fine with that, and you just want the "biggest car for the least amount of money", you do you.
I'm from Michigan and this whole debate looks a lot like ones that I've seen talking place about "buying American" my whole life. At one time in my hometown, you would worry about getting keyed in parking lots if you drove a "foreign" car. I'm told that even earlier, Fords and Chryslers were at risk (it being a GM town).
Ultimately though, even the "Detroit" automakers decamped, first from the cities themselves to the suburbs, then to nonunion states in the South, and finally to Mexico and overseas. Meanwhile, foreign automakers invest heavily in their North American facilities.
There's nobody keying Hondas in the high school parking lot during home games anymore.
The point is that, no matter how much we want locally made cars, and to take pride in the work and industry of our neighbors and countrymen, we can't impact this as consumers. Moralize all you like about your car purchase, but your behavior one way or another won't stand in the way of transnational capital flows.
I simply have fear, that Chinese cars will have horrible problems with the availability of spare parts. I don’t want to wait 2 years for replacement door or hood after small accident. First teslas had horrible drivetrain parts. I don’t want volunteer as a test driver for Chinese brands.
... added production capacity of nearly 200,000 vehicles per month from August to October of this year. The capacity addition of nearly 2.4 million vehicles over the course of a year is greater than Tesla’s total annualized global production (469,796 units in the 3rd quarter multiplied by four equals 1,879,184 units).
I'm a bit confused.. from Aug to Oct, or 3 month x 200,000 = 600,000, not 2.4M in additional capacity. What am I missing here? Perhaps Larry meant "total capacity?"
They already have factory in Mexico and no the US government already shut this path off. The only option is to build a plant in the US (they build buses in California but spun it off). The current political climate is rather hostile and highly unlikely.
Trump is not the most predictable guy on policy and they seems to be waiting to see what will happen in real legislation, not just in campaign speeches.
While the hardware production capacity is interesting, the main race in mobility is nowadays the AI race.
I find it surprisingly hard to get some insight on how Chinese companies are doing on that front. The only thing I find is a few videos of western journalists who do a single ride somewhere in China.
Does anyone know about sources to get a better insight on how Chinese companies are doing in terms of self-driving software development?
That won't be the user experience. There is a limited amount of space on the road and functionally unlimited demand. Demand will level off at a point where either "Immediately a car arrives" turns to "After a barely tolerable wait your car arrives" and "It drives you directly to your destination" turns to "It sits in traffic for a barely tolerable amount of time". Either that limits demand or price limits demand in which case the vast majority of people will be priced out in order to keep roads empty enough for your best user experience.
If both are available to you, then no matter how crowded the roads will be, a car that drives you directly from A to B will be the better UX than a bus that drives you from somewhere near A to somewhere near B via C, D, E and F.
So the car could only be the worse experience if it is hard to get one (Because all the cars near you are occupied by other people) while a bus is easy to get into (Because there is one near you and you still fit in).
The vast majority of worldwide rides will continue to be done in individual cars. The extremely crowded situation that would make a bus the better experience is extremely rare. Most rides worldwide are definitely not done in that kind of environment. And the removal of parking spaces and the better routing self-driving cars allow will move even those environments more towards the individual car.
Or, as is the case in most cities around the world busses, trains and cycle routes are faster modes of transport because they have dedicated routes that aren't subject to congestion in the same way roads are. Walking 5 minutes to the bus stop beats getting stuck in 45 minutes of congestion in the car.
If you do not make a lot of money somewhere (Google ads, Tesla high valuation), it is very hard to have enough money to do the self-driving stuff. So production is important, because if you sell a lot of cars, you have cash flow for R&D.
The hardware production is the race. I don't like BYD, but they've taken full advantage of Tesla's unwillingness to deliver on a truly economic vehicle. Until Tesla takes that crown, the entire AI discussion isn't really even on the table.
That might be your personal perspective, but the market's attention is on the AI aspect. Tesla's market cap is higher than that of any other western car company. And not because of their ability to mold metal.
In the future, a car without self-driving software will be as useless as a computer without an operating system. Hardware companies will be at the mercy of software companies. All the margins will be made in software. Hardware already has super thin margins nowadays.
Nokia didn't fail because of the way they made phone hardware.
Can you be more specific on the use cases that comprise that? E.g. is it driverless company fleets, enabling elderly to drive, making it possible to e.g. sleep while driving, being fancy etc?
The entire US auto industry is unwilling to deliver on a truly economic vehicle.
The "more crap per car" mindset is resulting in huge parking lots full of overpriced unsold cars. The "electric car is a premium product" mindset is obsolete, but continues to show up in US auto pricing.
Amusingly, the Ford Transit commercial van is cheaper in electric than in gas-powered.
But on the consumer product side, there's still a big price premium for electric, and you usually have to get an excessive 'trim level'.
Stellantis screwed up so badly that sales dropped about 40% and the CEO was fired, after collecting the biggest bonus in automotive history for "cutting costs". Betting on "mild hybrids" and extra post-sale fees was a disaster.
Nobody in US automotive is investing in solid state batteries the way BYD and CATL are.
There's technical risk, but if those things work, IC cars are over. 9 minute charge and a few hundred miles of range.
> Nobody in US automotive is investing in solid state batteries the way BYD and CATL are. There's technical risk, but if those things work, IC cars are over. 9 minute charge and a few hundred miles of range.
This, even if you embargo the new tech, if the new tech is a lot better, it will create a more broad economic disadvantage in not adopting it.
There's a tipping point coming. Once 9 minute charging works, charging stations work like gas stations, not parking lots. Nobody stays long. It makes sense for legacy gas stations to rip out the fuel pumps and tanks, and put in fast chargers.
Gas stations have a lot of infrastructure for catching oil run off, they could put in superchargers, but it would be a horrible use of land. The superchargers can literally go anywhere with power access since EVs don't leak anything other than possibly some coolant. If gas stations become obsolete, they will be subject to rehabilitation before they used for charging.
What I find baffling is that Volkswagen has absolutely nothing to offer in the low price segment. We were lucky to get an eUp! when the price was reasonable, but after they stopped production there is a glaring hole in their portfolio, and of course the Chinese will try to fill that
I suspect the engineers at traditional automakers HATE electric vehicles and this is likely causing massive delays. The vast vast majority of those engineers and other technical folks have careers which are are utterly dependent on ICE development and support.
This sort of transformative shift rarely happens from within. At least not easily.
Probably not the engineers, but the suits. Switching over from ICE is an enormous business problem because it's not just about manufacturing, but the whole after market ecosystem. EVs require less maintenance, but dealerships make most of their money on replacement parts. Getting rid of some uppity ICE engineers (in so far as they're not retiring) is the least of your problems as an ICE automaker.
As an engineer who used to work in the car industry I do not think the engineers hate electric cars. Also, they are not the ones making the decisions.
Volkswagen basically bet the farm on electric vehicles. They were late to the party, but went all in, so you cannot blame them for trying to block EVs. I rather suspect that making cheap EVs is just extremely difficult if you intend to make a profit. I bet they lost a good sum of money on every eUp! they produced (here in Germany you could get them for 15,000€ at the right time, which is a steal), so they decided to quit producing it, which IMO is a real shame, because it is such a cool car for inner city commuting.
Thank goodness all of our hype, investment and subsidies went to one man that doesn't even intend to create human jobs or sell cars to anyone the rich and supremely insecure. Sure was worth the entire free market going gaga for this tasty nothingburger, yesiree.
I'm not sure self-driving is that important in most of the markets BYD will expand into: Mexico, Central and South America, Asia, and where allowed in Europe.
I don't think Tesla or any other manufacturers have anything to worry about in the US, Canada, and some EU countries since it will be impossible for BYD to sell cars into those markets profitably.
Calling it now: Safe for any potential major conflicts or crises creating full isolation and destroying all trade with China (e.g. a Taiwan escalation), traditional western vehicle makers are gonna get completely wrecked. Their shift to electric is far too slow and too far behind already. And it's also too late for another industry disrupting startup like Tesla.
> Their shift to electric is far too slow and too far behind already. And it's also too late for another industry disrupting startup like Tesla.
Is it? At this point I’ve driven electric Audis and BMWs, VWs, Kia’s and also BYDs.
While the BYDs are certainly cars and are also relatively affordable compared to other options (of course it’s impossible to compare a BYD car to a BMW), it is not a very nice car in my experience.
Wether or not that is enough of a difference to sway consumer sentiment remains to be seen, but I don’t think it is as over as you make it out to be.
"Wether or not that is enough of a difference to sway consumer sentiment remains to be seen."
I think the biggest advantage from cars not from china are, that they are not from china.
No Huawei risk. No dead car in a major escalation.
Cars have gotten too smart and too connected for me to feel safe with a direct control line to Peking. (I also don't feel safe with a control line to Musk's HQ)
> Is it? At this point I’ve driven electric Audis and BMWs, VWs, Kia’s and also BYDs.
The real problem is that legacy car makers’ EVs are all high-mid/luxury cars.
People just want a Honda Civic that takes them from point A to point B.
Car companies did make some compliance cars (I own one - Ford Focus 2017) and honestly it's a great city car. My wife prefers it to our more expensive SUV EV.
In addition to the spark EV, Fiat 500 EV, etc these are all no longer sold here. You might be able to pick one up used.
I know the VW ID3 got a lot of critique early on. But after seeing a lot of reviews I got the chance to test drive a newer model myself and it is a pretty cool car all things considered. Granted, we're still looking at a 35k MSRP, but in the EV space that is a relatively entry level vehicle.
The Renault Megane E Tech is a also a pretty cool vehicle hitting the same pricepoint (haven't driven that one yet tho). Citroen is also hitting very accessible pricepoints with their E3 starting at 23k MSRP
Like a VW eGolf or a Vauxhall / Opel eCorsa?
They both cost in the same ball park as a Tesla Model Y. They are not affordable cars by any stretch of the imagination.
The eGolf costs 40k€ in France. 4 times more expensive than my car. It’s a luxury car, not for poor people.
If the price of a new base clio starts at 20k€ and a Fiat panda at 15k€, than 40k€ is around the correct ballpark price for an eGolf I would argue, relatively speaking.
We could considered the Chinese cars as cheap, but we are than comparing the cost of a price-dumped car from China, to a slightly overpriced car from Germany.
The outlier here is considering a 10k€ car something normal. 10 years ago I would have argued yes, but after the inflation wave of the last few years, that is no longer a reality.
The problem for many consumers, and France is a good example of this, is that the salaries haven't followed. The second problem for France is that a large part of the population is stuck in minimum-wage or close to minimum-wage salaries, putting those goods out of reach as their prices increase with inflation. (Leaving the debate about whether the price increase is the cause or the consequence of inflation aside)
> than 40k€ is around the correct ballpark price for an eGolf I would argue, relatively speaking.
Only if these cars are only intended for the affluent. Then sure. It's totally the right place for them. But I thought the point of EVs was saving our environment. What's the point if only a small fraction of any given population can afford one?
[dead]
> it is not a very nice car in my experience.
what constitute "nice"? from all of the reviews i've seen, they're well built. The common misconception that chinese electronics products are made cheap and poorly is no longer true today (hasn't been true for the past decade).
What are the price ranges of the different cars you're comparing?
Who gives a shit about "nice"? I want good value. I just need to get from point a to point b without getting hurt
"I just need to get from point a to point b without getting hurt"
I also enjoy being comfortable while doing so. Meaning sitting nice, good climate control, no bad smells, good sound isolation, ... being able to use the trunk.
Also a "nice" car also drives nice. If I like driving a car, it means I can handle it better - which is critical in critical situations - to not get hurt.
These are luxury needs. Most consumers want a Toyota Corolla for under $5,000.
In my country one buys a 5 year old second hand car and put all the money in your house.
You drive less than 30 kilometers every day so who gives a shit really?
I take thousands cheaper over nice... I think there is lot of value in value.
I think you are right. BYD and other companies won't stay in China either. They'll be opening up factories in Turkey, Mexico, etc. This will start creating issues for incumbents in most markets. The US and EU might protect their domestic markets with tariffs for a while. But their exports are going to suffer. And short of imposing tariffs on lots of other countries and suspending related trade agreements, cars will still come into domestic markets via those new factories. And inevitably, some companies will start falling over and might fall in the hands of foreign investors or disappear completely.
It's a repeat of the emergence of Japanese car manufacturers in the eighties. The same dynamics are at play here: the Chinese products are simply better and cheaper. And contrary to the popular believe that's not just subsidies. Those foreign factories in Turkey, Mexico, and elsewhere will be producing low cost vehicles. The cost difference is the competitive advantage Chinese companies now have. They might have gotten there via subsidies but now that they have this cost advantage, it's there to stay. To compete, other companies will have to address their cost issues and their R&D deficit. There's no way around it. Producing more costly vehicles is just going to continue to price them out of the market.
Delay tactics don't work. Tariffs don't work. Delaying investments, doesn't work either. That about sums up the current attitude of a lot of the legacy companies. Dragging their feet, reducing investments, and lobbying for tariffs to protect their businesses. To survive, they would need to reverse their strategy and shift all effort towards producing low cost EVs. There's plenty of demand. But not for overpriced products.
Something interesting I heard from a chip company that's huge in the space and work intimately with many automotive companies - why Chinese companies grow so fast is because their development cycle for a car is ~2-3 years, compared to traditional manufacturers who take 5-7 years. This is a massive edge in pushing out new features and exploiting the very rapid new tech - batteries, self driving, etc.
Stellantis is the perfect illustration: they kept putting all efforts into pushing their flawed ICE engine (PureTech) because they wanted to make profits from it for at least 10 years. And now the efforts are still not on making a good affordable car but on lobbying to revoke the EU ban on the sale of petrol and diesel cars.
> major conflicts or crises creating full isolation and destroying all trade with China (e.g. a Taiwan escalation)
The loss of the USA as a market would would be harmful, but is it assumed that all western countries would follow?
Europe is already talking heavy tariffs to protect it's automakers, with Trump winning and his stance on the issue - doubtful they will let this happen.
That ignores the rest of the world though. Trump can’t prevent China from selling to Africa, South America, India, Southeast Asia, Australia, … many of those countries (Aus) don’t even have domestic auto producers to worry about. Yes, the USA, South Korea, Japan, and Western Europe can protect their own markets, but the world is huge and China can easily dominate EVs everywhere else.
What EV markets outside the US/EU? Australia and maybe Thailand? Otherwise, it's difficult to find infrastructure that supports EVs elsewhere.
BYD is already in Japan, but it's quite limited. China has shadow-banned Korean automaker Hyundai/Kia since 2017 (THAAD) and battery makers LG, Samsung, SK since 2016 -- not sure if China would be warmly received there.
> What EV markets outside the US/EU?
south americans, the african continent, just to name a few.
> it's difficult to find infrastructure to support EVs.
sure, but it doesn't mean it won't get built. What if china goes all in, and do the belt-and-road initiative v2, and build out those countries' infrastructure (and conveniently eliminate the soft power that the US would have there, such as financial power)?
China has no real "defense" against financial power of the US (vis a vi sanctions), but they're surely doing something about it. And given the CCP's long term planning (for which they can, since they're authoritarian and don't need to cater for an election every few years), they can press for policies that play out long term.
There is a huge market outside of the US/EU. Indonesia, India, Pakistan, Nigeria, Brazil, Russia, etc…all they need is to provide a better value and they’ll own the market, nothing the US can do about it.
EV infra and is a lot easier to realize than importing/refining oil. Electricity can be generated in a variety of ways and, oh, hey, China is exporting that also.
EV infra is also lot more fragile as we can see first hand in developed countries, while for ICE you essentially need a jerry can to fill it up.
I don’t know. There are plenty of places where you don’t have gasoline to fill up a plastic bottle (which is how they do it in most of the developing world), but a water wheel generating electricity from glacier run off.
Don’t think it’s going to work. Even with 100% tariff on EV imports they will still be financially competitive with locally produced vehicles.
Or they build local.
they go thru the soft underbelly of mexico. And with that method, entrench mexico's economic interests with chinese manufacturers, and by indirection, give the CCP soft power over them.
Yeah. Well it's CCP or USA and as an outside observer I'm not sure which one is worse at the moment.
I have to give it to the CCP at least they're not Christians.
take comfort in the fact that with the USA, even the worst politicians gets removed from office after 2 consecutive terms.
You might be thinking of "POTUS" rather than "politician".
eg:
> after 2 consecutive terms.Even for POTUS it's a two term, under ten year total limit, doesn't have to be consectutive terms.
I stand corrected - it is indeed only the POTUS that has a term limit.
Assuming the incumbent doesn't push through legislation to change that. Not sure how enshrined in constitution that is so can't comment on the feasibility of it.
The writing has been on the wall for a while now. Traditional automakers have tens of billions of R&D sunk in ICE vehicles they were planning to payback in decades. Now they have to spend that again on EVs and they just have no desire.
They’re also extremely slow to react, and can’t fathom that people don’t really want what they’ve been selling the last couple of decades, they just didn’t have an alternative. Now they do.
Only problem with this statement is that unless BEVs are subsidized they don't sell that well.
That’s only true in western markets because legacy auto are treating EVs as luxury goods and don’t offer any model <30k. The Chinese car market is already over 50% BEV, NEV. It’s clearly the future.
There have been cheap EVs in the US. Nissan Leaf and chevy bolt were comparably priced to other econ sedans. No one bought them.
Seems plausible that Trump/Elon could make many imports from China effectively illegal.
Biden already imposed 100% tariff on EVs and 25% on EV batteries.
Tesla was importing CATL's LFP prior to the tariff, but recently dropped it altogether after the tariff became effective.
Seems pretty suicidal to me
That fits well with their general line of politics then.
Biden already put a 100% tariff on Chinese EVs
Elon is in the CCP pocket tho.
Please explain. I highly doubt musk is devoted to any other entity other than the companies he owns. Even his own many children.
Well, there's what he does.
For example, Musk pledged his commitment to China's core socialist values: https://www.mediaite.com/news/elon-musk-signs-letter-pledgin...
Musk advocates for Taiwan's submission to China: https://www.theguardian.com/technology/2022/oct/08/elon-musk...
Musk decried California's covid measures as "fascist": https://www.theverge.com/2020/4/29/21242102/elon-musk-corona...
But praised China because "Shanghai's COVID-19 measures helped lay the foundation for the city's future development" even though they were stricter than California's: https://www.reuters.com/business/autos-transportation/tesla-...
And there's also what he doesn't do.
Musk is very keen on criticizing the US and other governments. But can you find for me a single criticism of the Chinese government from Musk? I'd like to see one.
Musk wants business in china. I don’t think he cares about any of that.
I think it's just the cost of doing business in China. A lot of American CEOs including Elon Musk, Tim Apple have to sing and dance to the CCP's piping. And China is still the biggest EV market with 2/3 of the global EV market share.
> American CEOs including Elon Musk, Tim Apple have to sing and dance to the CCP's piping
They don't have to, they choose to. Oligarchs usually submit to authoritarians because profit comes before principle. They get their short term gain and others will have to pay the long term cost.
[dead]
The biggest hindrance to EV cars in the US is the lack of public charging.
Until every WalMart, Target, 7-11, and government agency have charging stations on 1/3 of their parking lot, public EV vehicles are a pipe dream.
Detroit is, sadly, calling this 100% correctly. There is no point in doing heavy public EV rollouts until there is a demonstrated political will to roll out the charging infrastructure.
Price point matters many orders of magnitude more than public charging imo
Over 60% of US families live in single family detached houses and would be able to charge an EV at home to cover all their normal day to day driving. They'd only need to use public charges on the occasional long trip.
For large parts of suburban areas with single or dual family homes this is just wrong. Even a wall socket charger (no wall box) will keep most commuters charged. Yes, charging infrastructure needs to develop but for many this is a no issue to adopt.
That is only partially correct. The charging infrastructure can become self rolling out. As in a robot driven cabledrum comes feom a central place to your car. The whole "it has to mimick a petrol station" idea is evaporating fast.
> Their shift to electric is far too slow and too far behind already.
when a push comes to a shove, the goal of electrification of cars can be merely postponed. climate change is a far-off future problem, where as geopolitical rivalry and such are close-by problems.
Beware that the author is comparing an additional capacity (of BYD, estimated as 2.4M/yr) against a production (of Tesla, estimated as 1.8M/yr, while the capacity is nearly 3M/yr). Nitpicking, I know, but numbers are meaningless without the proper "unit of measure".
That's impressive.
US tariffs keep BYD cars out for now. BYD doesn't really try to sell in the US. Just the rest of the world.
https://www.bloomberg.com/news/features/2024-10-16/electric-... | https://archive.today/uJLa4 ("Bloomberg: BYD Is Winning the Global Race to Make Cheaper EVs")
> Last fall in Malta, BYD began selling the Atto 3, an all-electric compact crossover. Strip away the company’s futuristic logo, and it looks almost indistinguishable from other small, sporty SUVs. But inside it’s full of treats, including heated seats in vegan leather and a 360-degree rotating touchscreen. The 60-kilowatt-hour battery gives it a range of 260 miles, enough to circle Malta’s main island twice. And by European standards, it’s inexpensive, at about $28,000. It’s a novelty in Malta. But the real reason BYD is entering the European Union’s tiniest member state? The company’s happy place is emerging markets and countries with no domestic auto industry to defend: “You can basically describe them as a ‘chicken rib market,’ ” says Yu Zhang, the managing director of consulting firm AutoForesight in Shanghai. “All the chicken ribs added up together, it’s more than 10 million cars.”
> After increasing its annual sales in China 15 times over, to 3 million cars in only three years, BYD is now exporting to roughly 95 markets, including 20 new ones this year. The company is building, has recently opened or has announced plans for assembly plants outside China in 10 countries on three continents. The speed and scope of this expansion have caught the global auto industry off guard and triggered protectionist tariffs in the US and EU, where policymakers fear Chinese players such as BYD will, in the words of Elon Musk, “demolish” their domestic automakers.
I am scared that these EVs will become too affordable. Cheap EVs will be an even bigger problem for urban environments. EVs are much simpler to make than gas cars, so will likely be cheaper and people will own more cars in total. This causes more parking problems. Plus they are much cheaper to drive as well, so people are more likely to drive somewhere, causing more traffic congestion.
Maybe the geopolitical situation will make the car lobby industry less powerful.
Just limit parking place inside cities. That worked well in the city i live in, they divided the available street parking spot by 3 and added external parkings in the outskirts. Honestly it worked great, the number of restaurants and small convenience store downtown exploded. Only downside, it made commercial leases more expensive and that pushed my music store outside of the city center.
Are people willing to gamble on long-term economic growth and prosperity (locally) by buying a chinese car for the individual, personal savings/value?
I can't help but feel this is a very shortsighted strategy for buyers. The world is pretty unstable at the moment, and throwing a huge industry in the hands of China for the sake of getting a cheaper/bigger ("I want MORE for LESS") car, seems awfully risky.
It also seems to be in direct contradiction with the whole nationalist agenda that is sweeping across the west these days...
So e.g. Danes would buy BMW:s over BYD out of patriotic duty or what? Almost no one cares. There is some 'irrational' support for local brands but many countries have none.
The European and Amrican car manufacturers are full of them self and want to sell premium vehicles to rich people. That is the fundamental problem. Covid gave them hubris.
As European but not German or Czech I couldn't care less about where my car was made. The idea of a 'local' car doesn't really exist, when there is no car industry in your own country.
You're wrong. Factually wrong. Plenty of smaller companies deliver parts and services to the European car industry. Here in Denmark, Danfoss had to fire 200 people because of Volkswagens decline.
Buying a chinese car means that you directly support the chinese regime, and that you directly undermine a "local" European competitor.
But if you're fine with that, and you just want the "biggest car for the least amount of money", you do you.
I'm from Michigan and this whole debate looks a lot like ones that I've seen talking place about "buying American" my whole life. At one time in my hometown, you would worry about getting keyed in parking lots if you drove a "foreign" car. I'm told that even earlier, Fords and Chryslers were at risk (it being a GM town).
Ultimately though, even the "Detroit" automakers decamped, first from the cities themselves to the suburbs, then to nonunion states in the South, and finally to Mexico and overseas. Meanwhile, foreign automakers invest heavily in their North American facilities.
There's nobody keying Hondas in the high school parking lot during home games anymore.
The point is that, no matter how much we want locally made cars, and to take pride in the work and industry of our neighbors and countrymen, we can't impact this as consumers. Moralize all you like about your car purchase, but your behavior one way or another won't stand in the way of transnational capital flows.
I simply have fear, that Chinese cars will have horrible problems with the availability of spare parts. I don’t want to wait 2 years for replacement door or hood after small accident. First teslas had horrible drivetrain parts. I don’t want volunteer as a test driver for Chinese brands.
It took them 3 months to bring their new capacity online.
Does anyone know if BYD could just build a factory in Mexico to take advantage of nafta and dodge the tariffs?
Even at a 50% markup over what they sell at in China, it'd be unstoppable.
They already have factory in Mexico and no the US government already shut this path off. The only option is to build a plant in the US (they build buses in California but spun it off). The current political climate is rather hostile and highly unlikely.
They started, but then halted to see the election results.
https://www.businesskorea.co.kr/news/articleView.html?idxno=...
Trump is not the most predictable guy on policy and they seems to be waiting to see what will happen in real legislation, not just in campaign speeches.
nafta is effectively dead
But they have noone to sell it too in the autoritarian fortress world they are building ?
While the hardware production capacity is interesting, the main race in mobility is nowadays the AI race.
I find it surprisingly hard to get some insight on how Chinese companies are doing on that front. The only thing I find is a few videos of western journalists who do a single ride somewhere in China.
Does anyone know about sources to get a better insight on how Chinese companies are doing in terms of self-driving software development?
We don't need self driving cars for the transport revolution but self driving busses, trains and maybe trucks.
User experience always wins.
The best user experience is:
That won't be the user experience. There is a limited amount of space on the road and functionally unlimited demand. Demand will level off at a point where either "Immediately a car arrives" turns to "After a barely tolerable wait your car arrives" and "It drives you directly to your destination" turns to "It sits in traffic for a barely tolerable amount of time". Either that limits demand or price limits demand in which case the vast majority of people will be priced out in order to keep roads empty enough for your best user experience.
Let's think it through.
If both are available to you, then no matter how crowded the roads will be, a car that drives you directly from A to B will be the better UX than a bus that drives you from somewhere near A to somewhere near B via C, D, E and F.
So the car could only be the worse experience if it is hard to get one (Because all the cars near you are occupied by other people) while a bus is easy to get into (Because there is one near you and you still fit in).
The vast majority of worldwide rides will continue to be done in individual cars. The extremely crowded situation that would make a bus the better experience is extremely rare. Most rides worldwide are definitely not done in that kind of environment. And the removal of parking spaces and the better routing self-driving cars allow will move even those environments more towards the individual car.
Or, as is the case in most cities around the world busses, trains and cycle routes are faster modes of transport because they have dedicated routes that aren't subject to congestion in the same way roads are. Walking 5 minutes to the bus stop beats getting stuck in 45 minutes of congestion in the car.
Unless car arrives in 3 hours because it is morning peak and everyone wants to get to job.
If you do not make a lot of money somewhere (Google ads, Tesla high valuation), it is very hard to have enough money to do the self-driving stuff. So production is important, because if you sell a lot of cars, you have cash flow for R&D.
You expect Tesla to run out of money before they start making money from self driving software?
yes.
The hardware production is the race. I don't like BYD, but they've taken full advantage of Tesla's unwillingness to deliver on a truly economic vehicle. Until Tesla takes that crown, the entire AI discussion isn't really even on the table.
That might be your personal perspective, but the market's attention is on the AI aspect. Tesla's market cap is higher than that of any other western car company. And not because of their ability to mold metal.
In the future, a car without self-driving software will be as useless as a computer without an operating system. Hardware companies will be at the mercy of software companies. All the margins will be made in software. Hardware already has super thin margins nowadays.
Nokia didn't fail because of the way they made phone hardware.
Can you be more specific on the use cases that comprise that? E.g. is it driverless company fleets, enabling elderly to drive, making it possible to e.g. sleep while driving, being fancy etc?
It's possible that self driving can be 'added on' using something like Comma:
https://x.com/comma_ai/status/1795596189544722695
The entire US auto industry is unwilling to deliver on a truly economic vehicle. The "more crap per car" mindset is resulting in huge parking lots full of overpriced unsold cars. The "electric car is a premium product" mindset is obsolete, but continues to show up in US auto pricing.
Amusingly, the Ford Transit commercial van is cheaper in electric than in gas-powered. But on the consumer product side, there's still a big price premium for electric, and you usually have to get an excessive 'trim level'.
Stellantis screwed up so badly that sales dropped about 40% and the CEO was fired, after collecting the biggest bonus in automotive history for "cutting costs". Betting on "mild hybrids" and extra post-sale fees was a disaster.
Nobody in US automotive is investing in solid state batteries the way BYD and CATL are. There's technical risk, but if those things work, IC cars are over. 9 minute charge and a few hundred miles of range.
> Nobody in US automotive is investing in solid state batteries the way BYD and CATL are. There's technical risk, but if those things work, IC cars are over. 9 minute charge and a few hundred miles of range.
This, even if you embargo the new tech, if the new tech is a lot better, it will create a more broad economic disadvantage in not adopting it.
There's a tipping point coming. Once 9 minute charging works, charging stations work like gas stations, not parking lots. Nobody stays long. It makes sense for legacy gas stations to rip out the fuel pumps and tanks, and put in fast chargers.
Gas stations have a lot of infrastructure for catching oil run off, they could put in superchargers, but it would be a horrible use of land. The superchargers can literally go anywhere with power access since EVs don't leak anything other than possibly some coolant. If gas stations become obsolete, they will be subject to rehabilitation before they used for charging.
What I find baffling is that Volkswagen has absolutely nothing to offer in the low price segment. We were lucky to get an eUp! when the price was reasonable, but after they stopped production there is a glaring hole in their portfolio, and of course the Chinese will try to fill that
I suspect the engineers at traditional automakers HATE electric vehicles and this is likely causing massive delays. The vast vast majority of those engineers and other technical folks have careers which are are utterly dependent on ICE development and support.
This sort of transformative shift rarely happens from within. At least not easily.
Probably not the engineers, but the suits. Switching over from ICE is an enormous business problem because it's not just about manufacturing, but the whole after market ecosystem. EVs require less maintenance, but dealerships make most of their money on replacement parts. Getting rid of some uppity ICE engineers (in so far as they're not retiring) is the least of your problems as an ICE automaker.
As an engineer who used to work in the car industry I do not think the engineers hate electric cars. Also, they are not the ones making the decisions.
Volkswagen basically bet the farm on electric vehicles. They were late to the party, but went all in, so you cannot blame them for trying to block EVs. I rather suspect that making cheap EVs is just extremely difficult if you intend to make a profit. I bet they lost a good sum of money on every eUp! they produced (here in Germany you could get them for 15,000€ at the right time, which is a steal), so they decided to quit producing it, which IMO is a real shame, because it is such a cool car for inner city commuting.
Thank goodness all of our hype, investment and subsidies went to one man that doesn't even intend to create human jobs or sell cars to anyone the rich and supremely insecure. Sure was worth the entire free market going gaga for this tasty nothingburger, yesiree.
I mean, that doesn't really excuse VW's failure.
I'm not sure self-driving is that important in most of the markets BYD will expand into: Mexico, Central and South America, Asia, and where allowed in Europe.
I don't think Tesla or any other manufacturers have anything to worry about in the US, Canada, and some EU countries since it will be impossible for BYD to sell cars into those markets profitably.