Japan automakers play catch-up in EV race | Hacker News Reader

Japan automakers play catch-up in EV race

www3.nhk.or.jp

42 pointsthunderbong74 comments

They've still got time given their reputation.

In 2024 it's borderline OK not to have an EV business. EV's are 10% of the American market, 25% of the European market and >50% of the Chinese market. The Chinese market is probably lost anyway due to the insane local competition, so concentrating in 2024 on the larger share of the market outside of China is reasonable.

Let's say that the flipover point is 2027.

And let's say it's 2027 and you're looking to buy an EV. You narrow down your choice to a 3rd generation Tesla, a second generation Ford or VW and a first generation Toyota or Honda. Reliability is the deciding factor. What do you choose? Lots of people are going to choose a Japanese brand despite any drawbacks getting a "bleeding edge" model entail.

By not ramping up EV production gradually they're setting themselves hard production and logistics problems. All new production processes have teething problems, and they're a lot easier to solve when production is in the 5 figures rather than when it is in the 7 figures, but if anybody can solve hard production and logistics problems it's probably Toyota.

I had the same thoughts a few years ago.

The winner will not be the first one to the market, but the one at the right time with the best car on the market.

Actually neither. The best car is the one that you can actually buy. That requires manufacturing, logistics and supplies. The likes of Toyota have barely begun the process of getting organized there. Even if they had an amazing EV product (which so far they don't), they'd struggle to sell a lot of them because they simply don't have factories, battery supplies, etc. in place that they would need for that. And at the scale they operate anything that doesn't sell in the millions of units is not worth doing. Getting from zero to there will take them quite a bit of time and money.

Which is why the winners in this market so far are Chinese and Korean manufacturers. And Tesla. Unlike other manufacturers they have manufacturing dialed in and a robust supply line with batteries and other things they need. Their main challenges are keeping up with demand and keeping cost low while growing manufacturing capacity.

The pace at which this market is growing means that it is getting harder for the likes of Toyota to break into this market. The few EVs they have on the market are actually not made by them and also a bit underwhelming. For example the bZ4X is actually a BYD car with a Toyota logo. That might be their future: leave the manufacturing to specialized companies and simply milk the brand. They seem to still insist they'll have their own drive trains and supposedly amazing batteries. But so far there's little sign of them building factories for those. Maybe that will work for them.

Isn't it very likely that Chinese brands will also feature in the decision? From my sporadic reading here and there it seems they will be able to compete on price globally sooner rather than later.

It seems that people are not able to process the shock for the Chinese entrance to the automobile market. I have seen the Zeekr. It's simply insane. The price is competitive. The quality is competitive (I find it superior to VW and rather competing with BMW/Audi). China also can build stuff at large scale. Now, is it reliable for 5-7 years? That's still not known but we are about to find out.

How long will other countries allow Chinese companies to sell there when non-Chinese companies face much stricter rules when selling in China? Not to mention the perks like state banks providing financing, forgiving missed payments and doing loan rollovers repeatedly, etc. Everyone provides support in some form or another but China provides the most (on a relative basis).

For my part I'd like to see China increase imports to balance trade so it becomes sustainable. That will result in the best outcomes for everyone.

I mean, they build Teslas don't they? The IP goes around. Cheap/forced labour and half command economy definitely help.

But it's long not the "buy the cheapest and of good quality anymore" world, considerations like "whom am I working with / contributing to" are a factor

> EV's are 10% of the American market

Ah, no. EV sales in the US are slowing with dealerships having large amounts of unsold inventory, as documented below:

https://www.usatoday.com/story/money/personalfinance/2023/11...

https://www.cnbc.com/2023/11/01/why-dealers-say-ev-sales-hav...

The total percentage of new cars being sold as EV is about 7.9% in the US for Q3 2023.

https://electrek.co/2023/10/12/ev-sales-7-9-us-market-volvo-...

https://www.coxautoinc.com/market-insights/q3-2023-ev-sales/

That sounds great, until you realize that new car sales have slowed significantly due to the economy and high interest rates; meaning that wealthy people have outsized buying influence at the moment.

https://www.marketplace.org/2023/03/06/new-car-sales-have-sl...

This has caused dealerships to warn Congress that they believe EV purchase orders will decline in percentage when interest rates decline and the middle class starts buying cars in greater quantities again; making the Congressional recommended deadline unfeasible.

https://www.teslarati.com/car-dealers-biden-ev-demand/

Despite the above, EVs and Plug-in Hybrids combined register as only 1.2% of all vehicle registrations in the United States.

https://www.visualcapitalist.com/visualized-ev-market-share-...

EV adoption is still increasing. The rate of increase has decreased.

Oh, no doubt, but the parent's comment about a potential flipover in 2027; that is, in my opinion, with the sources cited, wildly optimistic.

I am personally in the camp that believes, because of the geographic area of the United States and people's families (very different if all your friends live in Spain, and you live in Spain, versus California to Chicago); EV adoption in the US will be much more strained than Europe or China (as in China, 60% of the population lives in 12 coastal provinces and most of the family stays together). I could see the US easily being a decade or more behind, not because we're stupid or backwards or lazy, but because our requirements are different.

For the US; I think Plug-in Hybrids are a fantastic option that should be encouraged. They completely kill the arguments or concerns about range anxiety; and, what, 80%-90% of all miles travelled will be electric? Don't let perfect be the enemy of very good; especially when far more people would be willing to sign up. I think it's fine and reasonable to get 80% of the way there with broad adoption, wait a decade or so for EV technology to be even better and go further to where nobody has concerns, and then transition to 100%. Forcing people into premature technology ruins first impressions and sets stereotypes that will never die.

Hard to pinpoint a year. It's nearly impossible to figure the economic conditions in 2027 and determine if demand for new cars will be high or if there will be heavy (and high profile) investment in charging infrastructure.

Flipover in 2027 is highly unlikely in the US. Flipover worldwide in 2027 is highly likely because China is a much larger market than the US and has already flipped, because Europe is way ahead of the US and because the rest of the world is going to switch to $10,000 Chinese EV's quite rapidly.

> $10,000 Chinese EVs

That sounds like a safety nightmare.

They're a heck of a lot safer in crowded pedestrian conditions than the typical US oversized SUV.

And the $8,000 BYD Seagull has passed European safety testing for highway speeds.

I meant in terms of fire; I'd be concerned that if Tesla can't stop occasional spontaneous combustion, how about a cheap Chinese EV...

> typical US oversized SUV

I actually don't know if people will go back from SUVs even if there are better cars. They just feel psychologically safer to the passengers and the large cargo hold is convenient. If you took them away from people, I think there'd be widespread anger at EV's expense which is not needed right now.

A cheap Chinese EV uses LFP batteries, which have a much lower fire risk than Tesla's nickel batteries. And Gasoline cars have a 10X higher risk of fire than a Tesla.

Tesla is using LFP batteries in many of their cheaper, lower range vehicles. Just not in the US market since the batteries are sourced from China, and that reduces their EV tax credit.

Hybrids are much more complicated, and thus will be more expensive all things being equal. Once EVs break out of their current weird artificial premium only market segment, and are available at their natural price points like the cheap Chinese EVs, then they should be much cheaper than hybrids. I suspect all these range anxiety and geographic arguments will be proven irrelevant for most people, once the cars are cheaper.

> For the US; I think Plug-in Hybrids are a fantastic option that should be encouraged.

They are for the consumer. The Volt is a fantastic car.

Hybrids are a disaster for manufacturers. GM killed the Volt.

The manufacturing cost difference between the Volt and the Bolt was simply far too large.

The manufacturers are way better off putting the price difference into a larger battery and dumping the combustion side.

I found it interesting that even in Norway, the total share of EV is just below 25%. https://www.vox.com/future-perfect/23939076/norway-electric-...

Total fleet will obviously take a while to turnover, 93% new of passenger car registrations in September were PEV, 87% BEV, Norway has long led the world though in this area with very strong incentives for many years.

Nothing is what it seems in this industry. If we had a free market system here in the US GM would of went out of business in 08 and the streets would be filled with cheap BYD imports from China. We have major domestic protectionism in place b/c in times of war the auto industry can and has been used to produce the machines of war. EVs produced in the US by domestic automakers are heavily subsidized

Free Trade is something that powerful nations impose on less powerful nations. Anything else is just ideological bullshit.

EDIT: I understand that free trade theoretically could be a win-win game. But the real world is a lot more complicated, and is a historical fact that developed nations always have and continue to push for less powerful nations to open their markets while abusing of protectionist practices themselves.

How do you account for Singapore?

Singapore has significant central planning as part of its economy and also does some protectionism. It's also an important US proxy in the region. Not unlike South Korea in both respects.

Singapore economy is a result of foreign investment aided by very generous tax benefits and a repressive regime that ensured for a long time a low paid and compliant work-force. Being also basically a city-state without natural resources, Singapore was always trade-oriented and as a commercial hub of course it is in an extraordinary position to engage in free-trade.

But believing that the same recipe could be applied for Argentina, South-Africa or Brasil takes a lot more faith

But what is funny about the Singapore example always abused on those conversations is that it begs the question of why people always cite a more or less tiny Asian city-state as the most prominent case of the success of free-trade instead of bigger economies like the US, China, Japan, South Korea or the UE.

And the reason for that is that all those nations have always engaged and still engage on protectionist practices while expecting less developed markets to open their borders. Subsides, Non-Tax Barriers, Direct government investments, taxes and fees, you name it, they did and they do it.

Singapore is a tiny city-state and its model can't scale for large nations.

Singapore overlooks the strait of Malacca, the key gateway by sea between India and China. It has been a strategic trading port for centuries. The cost of shipping goods there is correspondingly low — ships go there anyway. Consequently, it has always had a culture and economy that was prepared to take advantage of our high-trade global economy. Being the Switzerland of Asia doesn't hurt either.

Panama is the logical point of comparison — its governance has been consistently atrocious (cf. Noriega), but it nonetheless remains among the front of the pack in Latin America economically.

Then why does the Jones act exist and why is the US curtailing chip exports to China, and why does Mercosur want a trade deal with Europe?

No, free trade is mutually beneficial and the natural state of things, protection exists for two reasons. Pursuit of military interests (blockades) or satisfying domestic rent seekers. (e.g. the shipping industry, farmers etc.)

That's a very narrow minded view. China is number one counterpoint. Without free trade, and very favorable terms that Western countries offered, China wouldn't become the superpower it is today. The tension between US and China today has more to do with geopolitics than protectionism.

Read the following (from 1984) to understand how Deng Xiao Peng saw the roles of Special Economic Zone in the revival of China's economy:

https://www.marxists.org/reference/archive/deng-xiaoping/198...

I’m not sure if you’re trying to say this is good or bad. Seems good to me.

It's too complex of a system to label the whole "good" or "bad".

There are a many involved parties and they're affected by it in multiple ways.

I think you're trying to say the consumer harm of increased prices of EVs is outweighed by the benefits to industry etc?

The entire revolt against globalism shows that just lowering price isn’t enough when you no longer have a job, or the job you have pays you very little.

It’s not smart for a country to let all of their industrial engine be replaced just because it’s cheaper. It’s more expensive in the long run.

The problem is that an industry can be used as leverage by China to hurt the economy. See Putin and Gazprom, Tawianese Chips and so on. Globalization is good, because it makes production of consumer goods more cost effective. But cost alone is not worth much if the supply is not reliable and can be leveraged by a potential opponent.

It's good if the local market catches up in the next 3-4 years. It's catastrophic if they do not, however.

GM was bailed out to save the jobs. And it’s got nothing to do with the “free market”. The “free market” is between GM and their customers.

It is kind of sad to see Japanese EVs barely take off. After seeing all the weird and busted stuff about Teslas (on top of the "luxury price for fake luxury interior" stuff)... all I really want for an EV is a Yaris but with a battery.

I just want normal door handles and a satnav with buttons, and Japanese makers seem to be among the last holdouts.

Chevy Bolt?

https://cleantechnica.com/2023/05/06/my-first-ev-part-iv-202...

Speaking as someone that's owned Chevy's and Tesla's recently, if you're concerned about Tesla's quality, I would steer clear of Chevy.

Renault Zoe or Dacia Spring sounds right up your alley.

I've got a Zoe. It's fantastic - simple, efficient, that thing just works.

It's sad, but it's not a surprise. I'm a huge Mazda fan and their first attempt at a BEV was pretty shitty. And consumers figured it out really quickly.

https://electrek.co/2023/07/29/mazda-kills-off-mx-30-ev-in-u...

And the CEO is just clueless.

https://insideevs.com/news/698183/mazda-ceo-says-evs-not-tak...

I just want normal door handles and a satnav with buttons

My mantra through this whole thing is "I don't want an electric car, I just want a car that's electric". I found what I was looking for in the XC40 Recharge, but I realize that's still a really expensive car for this market. I'm with you on a Yaris BEV.

Adding yet another dimension to the challenge is the transformational nature of the EV business, which may ultimately be driven less by hardware than software.

I'd argue the opposite. I wouldn't buy a software filled "smart EV". I'd love a dumb as hell, electric "kei van" that's 4WD.

No Japanese automaker produces them however, it's absolutely ridiculous considering how popular the form factor and "dumb" kei car is.

You are not the target market. Get a second hand Leaf or Bolt or similar golf cart EV.

https://electrek.co/2023/05/25/tesla-model-y-is-now-the-worl... ("Tesla Model Y is now the world’s best-selling car, first EV to do so")

https://insideevs.com/news/698351/used-ev-prices-drop-sales-... ("Polestar 2, Ford F-150 Lightning, and Kia EV6 are among the slowest-selling used EVs.")

How are those non-tesla models selling used? I don’t think any of them are even three years old. It seems like a skewed comparison.

Study/methodology: https://www.iseecars.com/hybrid-and-electric-car-prices-stud...

(disclaimer: I am trying to pick up used undervalued Teslas for folks in my circle who are in need of a vehicle, hence my ear to the ground on this topic)

I don't dispute the numbers in the study, but without added context, I think some of the comparisons lead to nonsensical conclusions because of the shifting landscape of new model availability with added manufacturers. Also I think a lot of the mfrs, shot their used pricing in the foot due to announcing future upcoming charging plug changes.

Similarly with "slow selling new EVs" there is an unrevealed item there on how much inventory some of those models are supplied with. e.g dealers might be keeping a high markup on models they know aren't going to be delivered in high volume - so they keep cars in the lot w/ high margin while pulling in curious car buyers with it.

I would not get a Leaf. Those things are quite poorly designed, with no proper heating or cooling for the batteries, leading to a very low lifespan on them. It's not just a first-generation problem either, it's persisted all these years.

I love the idea of electrics, but a Leaf is not the way to go.

That is a fair concern (and why I only buy Teslas, they are the gold standard for battery pack management), but they seem to hold up well enough to be shucked for a second life as utility scale storage [1]. If resource constrained and you still want an EV that is mostly dumb, it is a reasonable option if your transportation needs are local.

[1] https://cleantechnica.com/2023/11/26/ev-batteries-are-perfec...

I need a van or truck for work.

Software is eating all cars. It just happens that there weren't many good BEVs 20 years ago, so the touchscreen-takeover looks correlated with EVs.

Old Leaf and Renault Zoe have barely any tech in them (by modern standards). There was a niche Coda EV that was as "dumb" as any car from its era. EVs only need software for battery management.

Conversely, overuse of software, touchscreens and faux buttons made its way to contemporary ICE cars too. The crappy UI that VW has created for ID.3 has been "backported" to their ICE hatchbacks. Every car you buy with a 2024 model-year is going to be an iPad on wheels.

My 10 year old Leaf has satnav, mobile connection, can download rss feeds and speak them out loud, has cruise control.

All the config is via touchscreen: charging timers, climate timers, satnav, bluetooth, phone.

Has voice control, a mobile app

My 9 year old leaf is an S model and has none of that - it’s blissfully simple. Prefer it over the SL model also in the family.

having a screen with a satnav is a must, to compare GOM miles remaining to miles remaining of route

Yeah, but my phone on a vent mount works fine for that.

Usually on any trip that brushes up against usable range, I do the math kind of backwards. I know the distance for the trip, and know how much buffer I have. Then I just look at the trip distance elapsed, compared to the GOM, and if they are roughly 1:1 I know I’m trending well.

10-year-old ICE cars in its price range have the same features.

Base model of Dacia Spring EV and Citroen Ami have no touchscreens whatsoever, but these are low-low-end vehicles.

I'm so fucking glad I ride a push bike about 95% of the time. Not even an e-Bike, just a simple bike I can fix myself. It's good for me as well. I love the freedom of it so much.

Yeah, as much as I hate it, modern cars turn more and more into computers on wheels. Or rather smartphone.

Applies to all modern cars, not just EVs.

Actually simple Kei van is a one of the earliest commercial BEV: MINICAB-MiEV. Nissan Sakura isn't a true van but it's great. Honda and Toyota/Daihatsu/Suzuki are going to release. https://www.daihatsu.com/news/2023/20230517-2.html https://electrek.co/2023/09/29/honda-unveils-10k-electric-n-...

Range anxiety and battery cost are the one of the biggest issue for an EV especially for smaller cars, so small battery Kei car for limited use case is easier to sell than subcompact car.

Completely counterintuitive VW is so high on that list.

VW, the brand, has some very serious issues, not all of those are related to EVs as they started much earlier.

VW, as in VAG the enterprise, is doing quite well with brands like Skoda, Porsche and Audi.

ID series, especially ID4, are a success. They are definitely good cars, except for the entertainment system, which you can replace with CarPlay.

John Cadogan on VW...

https://youtu.be/u1UfDOLk8ic?t=2103

https://www.youtube.com/watch?v=hn0U55n7Vwg

https://www.youtube.com/watch?v=qjToFe1oAAI

He's anti-EV, but the main point is pretty good: cars from different companies are all pretty much the same, so the next thing you should look at is the company itself- will they help you after the sale? Are they a good corporate citizen?

Oh, one more:

https://www.theguardian.com/business/2018/jan/29/vw-condemne...

Dieselgate basically. They got a rude awakening around that time and accelerated plans to take EVs to market because they realized that their diesel strategy was dead in the water. So, they now have EV production capacity on multiple continents and battery supply secured. Their first generation platform has been a bit rough but they are selling cars built on it in volume now directly and through companies like Seat. The probably do so at a loss or with low margins. Which is something they have in common with other struggling manufacturers.

Hybrid sales are way up, that’s where the growth is going to be the next couple of years. The strategy that everyone was calling Toyota insane or even evil for is starting to make a lot more sense looking at market trends.

I don't know why Nissan isn't aggressively exporting the Sakura and Note e-power, the Note especially has a gas engine fallback that powers the battery (not the drivetrain) which should remove range anxiety

the problem with EV in Japan is that electricity is quite expensive (30~40 Yen/kwh) to the typical salaryman who earns around 300,000 Yen a month pretax/pension. It could be an easy 5 - 10% of their allocatable income.

To make it worse, the capacity of Japanese power grid isn’t very well. Although people are adapting EV cars and e-bikes in Japan, the price parity per charge isn’t that much comparing to gas.

I think what made it popular today is that gas price is skyrocketing (140->180/L within a year), so people started seeking alternatives.

I think they are doing the right thing by waiting out.

They will reap a series of huge benefits:

- powertrain and battery technologies will get cheaper and more reliable

- they will do much more money for the foreseeable future by focusing on a very cost efficient market they already do well in

- they minimize the investments by having to experiment less

I think that many companies like Mercedes and Ford and Volkswagen FOMOed into a premature EV transition blinded by the growth and margins and Tesla. They are now finding out that EV demand isn't as high as they thought and that even Tesla's growth and margins is collapsing (and obviously will never recover with more competition coming).

In the other hand it’s not that simple to catch up. Tesla has a huge advantage in costs at the moment and the non-chinese don’t seem to be able to compete. Supply chain contracts of batteries and new raw materials, software, efficient electric engines, aerodynamics, battery management, software, charging stations, vehicle platform design, cheaper manufacturing, trained workers, experienced engineers…

There are a lot of elements and some will fall because they waited too much. VW for example is having huge delays due to software and also prices (even though in China they have no problem selling the IDs for half price than in Europe…)

> In the other hand it’s not that simple to catch up.

Chinese market clearly shows that it is possible.

Japanese companies already have EVs btw they are simply not making them at scale nor as their primary focus.

Weird since Yamaha pioneered the electric bicycle more than 30 years back.

Will the entire car market transition to electric vehicles?

There's a possibility that this shift might result in a scenario where only premium cars are electric, while a proportion remain petrol-powered.

That shouldn’t be stable long term though, evs will be fundamentally cheaper to manufacture

Catch-up to what? EVs are still a bad idea for the majority of the world.

They are not cleaner (until at least about 100K miles), cheaper, faster to refuel, or have the same range. That’s not counting the lack of meaningful global infrastructure to support them.

Maybe things will change by 2050 or so. For now, EVs are the biggest grift of our time.

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