Western firms are quaking as China's electric-car industry speeds up | Hacker News Reader

Western firms are quaking as China's electric-car industry speeds up

economist.com

32 pointsj-a-a-p89 comments

China fact of the day: https://marginalrevolution.com/marginalrevolution/2023/09/ch...

Notice how this hockey stick growth started shortly after February 2022, i.e. is a direct result of Western sanctions on Russia: https://x.com/brad_setser/status/1670842577862508556?s=46

edit: Chinese customs data shows during the first 11 months of 2023, China's vehicle shipments to Russia soared 545% from a year ago, to 840,000 units, making it China's fastest-growing market. New energy vehicles (NEVs), such as hybrids and electric vehicles (EVs), were also fueling the record production and exports”.

https://www.voanews.com/a/russian-market-evs-give-china-fuel...

Second China fact of the day: nobody wants to sit in a Chinese car, not even the Chinese themselves.

For plenty of Europeans it is just fine

https://www.goodcarbadcar.net/dacia-europe-sales-figures/

EDIT: Wrong address above. See https://www.acea.auto/fact/fact-sheet-eu-china-vehicle-trade...

How's that relevant? Or are you thinking Dacia is Chinese?

Dacia produces the EVs in China:

https://europe.autonews.com/automakers/renaults-made-china-d...

The brand itself as you say is not Chinese.

Correct. Here is a list of Chinese made cars in the EU market this year

    BMW 5-Series
    BMW XM
    BYD Atto 3
    BYD Dolphin
    BYD Han
    BYD Seal
    Fiat 600e
    Ford Bronco
    Honda CR-V
    Honda e:NY1
    Honda ZR-V
    Hyundai Ioniq 6
    Hyundai Kona
    Jeep Grand Cherokee
    Kia EV9
    Lexus RZ
    Lucid Air
    Mercedes-Benz E-Class
    Mercedes-EQ EQE SUV
    Nio ET7
    Peugeot E-3008/3008
    Renault Espace
    Renault Scenic
    Smart #1
    Toyota C-HR
    Toyota Prius 
    Volkswagen ID.7
    Volvo EX30

Avoiding Made in China is no longer popular idea, as we can see iPhone/Mac is a top brand. Avoiding Chinese brand is still a thing.

Sometimes avoidance is enforced, like what happened with Huawei. Also 'Made by China in <country>' is becoming a thing: https://en.wikipedia.org/wiki/China_Road_and_Bridge_Corporat...

Oops I pasted the address from the wrong window

https://www.acea.auto/fact/fact-sheet-eu-china-vehicle-trade...

That is an expired fact. Chinese are buying their own brands now, hence the tremendous growth.

You have your facts wrong. BYD was the top seller in China in 2023: https://carnewschina.com/2024/01/10/top-selling-car-brands-i...

Sorry but how would an increase in their car exports be related by the West sanctioning Russia? That makes zero sense.

It's simple - after sanctions, the Chinese got a much bigger pie of the Russian car market.

Not EV-specific, but:

> Chinese customs data shows during the first 11 months of 2023, China's vehicle shipments to Russia soared 545% from a year ago, to 840,000 units, making it China's fastest-growing market.

https://www.voanews.com/a/russian-market-evs-give-china-fuel...

I guess the idea is that If Russians cannot buy western cars, they’ll buy the new Ladas

I think the reason is not western sanctions, but rather decreased local demand in China. Patrick Boyle does a very good job at explaining it: https://youtu.be/rZgaj0jScOI

RU is ~5% of PRC car exports. IIRC West pulling out of RU removed 500k imports from market over multiple years. PRC exported 2M more cars in 23 than 22.

PRC Ro-Ro construction rampup preceded RU/UKR war by 5 years, and set to increase in next 5 years. RU too small of a market for this much auto sealift.

https://imgur.com/a/Ndhju6A

500k? “ Chinese customs data shows during the first 11 months of 2023, China's vehicle shipments to Russia soared 545% from a year ago, to 840,000 units, making it China's fastest-growing market. New energy vehicles (NEVs), such as hybrids and electric vehicles (EVs), were also fueling the record production and exports”.

https://www.voanews.com/a/russian-market-evs-give-china-fuel...

We're talking about NEVs/EVs, where hockey stick growth in that segment last few years isn't explained by just RU market. 840k includes traditional gas power autos, though no one has tracked down said "customs data" since the original claim (Bloomberg allegedly pulling quote from secretary general of China Passenger Car Association). Yes, PRC car exports surged in RU, but it's only part of growth, and part of planned growth. PRC auto ordering ~150-200 Ro-Ros because they expect more global exports, more than RU can absorb. 500k from from report of RU bank a week ago. Although that might have been sales. I'll try to dig it up.

> Notice how this hockey stick growth started shortly after February 2022, i.e. is a direct result of Western sanctions on Russia: https://x.com/brad_setser/status/1670842577862508556?s=46

What? It starts after Q2 2020 in the chart you linked.

I'm still skeptical. Let's wait for a few years and see how the quality, after market and customer support really is. In my experience, that's not a strong-suit of chinese brands.

Chinese companies iterate, learn, and adapt very quickly.

If their goal is to be world-class automakers then they will quickly learn from local markets and adapt accordingly.

For instance, I used to have a Huawei phone and the quality was on par with Apple and better than Samsung (taking Apple on was their goal and they executed accordingly).

Tesla has been quite successful despite a few hickups along the way, including regarding quality. My guess is that Chinese brands can follow at least the same trajectory, if not better.

Consider also that BYD supplies batteries to Tesla, at least in Europe. So at least on that front they seem to be world-class if not leaders.

Why aren't there more Chinese automakers of gasoline cars?

There are, but they were working mostly for internal market. Their brand recognition is not good with the western audience. But now with the electric cars - it is a brand new thing, so the chinese brands can try to push in the western markets.

There are, mostly within China. But obviously the strategy has been to leapfrog the competition and to go all in on battery tech and EVs rather than trying to play catch-up on soon-to-be obsolete tech.

The article has a nice graph where you can see Chinese had a 20 - 25% market share and the Western/Japanese has the remainder in the ICE era. Suddenly in the last years the Western/Japanse traditional manufacturers are squeezed to 40% and the trend looks, well, devastating.

So yeah, the made ICEs but also in the home market that was not a convincing product.

Isn't red tape to sell cars in Europe and the USA infamously difficult?

I was always under the impression it was less about red tape and more about safety standards. Most foreign cars do not meet the safety standards required in the US/EU. My favorite example is in Mexico, Toyota had a model that was more or less the same style of an early 90s Toyota. You could still buy them new in ~2016, they had no upgrades to safety etc, you would never be able to sell them in the US.

I remember vaguely on one Chinese car in Eastern Europe cca 1 year ago, which was cheapish, but made from cheap plastics, squeaking, infotainment was booting 30 seconds and ICE engine, despite its relatively small volume was taking 10 liters per 100km. I don't think that they have sold many of them.

I did not think the other replies were very adequate so adding my thoughts.

There are a lot of chinese ICE manufacturers. Even before that, there were a number of Euro/American brands that were manufacturering in China for the domestic market. In the beginning these brands were not seen as high quality or reliable. You would pay a premium for a vehicle that was not manufactured domestically, regardless if it was a domestic or foreign brand. Things have changes significantly over the last 10 years. Quality has greatly improved and there is a significant sense of national pride for these brands, which I think only helps if further the desire for these brands to build better products.

The timing of quality improvements and the new global market demand for EV makes it a great time to expand. If they were to expand into the US market with an ICE platform, they would have had to fight the long uphill battle like Hyundai did to make a name for themselves.

They have no competitive advantage on engine, while they have huge competitive advantage on battery

Still, it's their turn to prove themselves - buying a car with no service network, no spare parts infrastructure, and no proven track record, and no knowledge on resale value is errand I'd let others go through before me, Chinese car or not.

Especially since EVs are not cheap and I'm planning to keep them for a while.

Sure, but as I mentioned it was exactly the same with buying a Tesla... that didn't stop them despite the high price.

China has a history of fine manufacturing and they make the iPhone there. Sure there are the factories that turn out junk appliances that are sold under famous brands but some Chinese brands want very much to win customers over with quality and innovation. In photography many of the most interesting products today come from companies like QoCam (stereo, pano, and “bullet time” cameras) or 7Artisans (affordable manual focus lenses with unusual focal length/aperture combinations…. A $200 lens from 7Artisan might compete with a $7000 lens from a Japanese brand, the $7000 lens is better but I can take pictures with the $200 lens that look like nothing you’ve seen.)

> Tesla has been quite successful despite a few hickups along the way, including regarding quality.

Are you implying that Tesla is good quality? They are successful yes, but the hardware quality is just awful. Leaking roofs and stuff like that is not hard to get right.

I rode in a BYD and it was considerably more uncomfortable than my Land Rover Defender Td5, imagine that! My truck was more comfortable as a taller person than the BYD.

I don't know, I think that's still a very one-sided view. China can manufacture good stuff, but in my view only with good external QA. It's just a different culture around quality in my limited experience. Japan and Germany still lead imho.

No, I am saying that they are successful despite being expensice and not so good quality.

> China can manufacture good stuff, but in my view only with good external QA

That's borderline offensive, IMO, and proved wrong by many examples.

Range anxiety and charging infrastructure are also major hurdles.

Around 50% of people in the EU live in apartments. Most apartments were built decades ago and lack EV chargers - and, in many cases, enough dedicated parking spots for each unit, but that's a different story.

If people in the states think that charging a Model 3 or Model Y is too time consuming, when close to 90% of Americans live in single family houses, why would the majority of European car buyers be willing to switch to EVs, when they don't even have the option to install an EV charger?

> If people in the states think that charging a Model 3 or Model Y is too time consuming

A lot of them are being told this, and they just believe it without running the numbers for their use case. For some it would be longer until infrastructure improves, but for others it would actually be less time “waiting” on their EV than their ICE car. I’m in the UK and I’ve spent 0 mins waiting on my EV charging in the last 4 months. Plug in at night and unplug in the morning. I’ve also spent 0 minutes visiting gas stations.

America has bigger distances and there are other factors of course.

> Plug in at night and unplug in the morning.

That's the issue.

This simply isn't possible if you live in an older apartment complex or rely on street parking.

ICE wins - at the moment - simply because it takes less than five minutes to refuel.

> That's the issue.

> This simply isn't possible if you live in an older apartment complex or rely on street parking.

This falls under the “running the numbers for their use-case” section. If you can’t charge at home it probably will be more hassle (but might not be).

> ICE wins - at the moment - simply because it takes less than five minutes to refuel.

So does this, because for my use-case EV wins because I don’t need to spend any minutes refuelling.

I agree, but the issue is that, globally, ICE is still the best option for the majority of use cases.

EVs have a place. I'm a fan of them. However, until recharging an EV becomes as quick and convenient as filling up a fuel tank at a station, ICE will continue to be the preferred option.

That said, government incentives (China, northern EU states) and potential ICE bans (EU) may allow EVs to win out in some markets.

However, at least in the west, this depends on the EU going against the best interests of central European automakers and everyone else in the automotive supply chain. It's - very - hard to see this happening over the next decade or two.

Long term EV will likely win. We're still a ways away from this happening.

And for almost everyone who doesn't live in an older apartment complex or or rely on street parking, they're fine.

This is like arguing that nobody anywhere can buy anything but a large 4WD SUV because some day somebody somewhere might want to take a dog to a beach.

I just want a normal car with buttons and knobs. New at <= $10,000. I dont need power windows. I dont need backup cameras. I dont need infotainment.

Tons of people I know buy beaters from 20+ years ago because thats all they can afford, but would rather buy a new cheapo thing if it existed.

There is a massive untapped market for cheap vehicles. nobody serving that market.

£7,861.40 in old money

That's a shockingly small amount of money for a car.

I can do you a Citroen Ami for £8,095 + your dignity.

https://www.topgear.com/sites/default/files/2023/08/1-Citroe...

Ha looks cool! But im in the USA.

It's illegal to serve that market, which is why no car manufacturer is doing it.

We should fix that.

I want one of those Japanese mini-trucks, but electric and US street legal. Make those for ~$10,000 and they'll sell like hot cakes.

There are a lot of cars here in japan for well under $10k new. They are also fully featured, and have electric sliding doors on both sides.

I do not know how much these are subsidized.

A family member got a BYD Dolphin recently and it seems really nice. Not quite as chic and Apple-esque as a Tesla but heaps of cool features, surprisingly quick for a non-sports model, gets better range than advertised. Given the price relative to other similar vehicles I'm not surprised they're selling like hot cakes.

Without a dealer network how will they sell in the US?

Will the UAW and their friendly politicians allow China to destroy the US domestic brands?

Chinese manufacturers like BYD are opening plants in Mexico to get around the US protectionism against Chinese made cars. Blocking this would require serious changes to the USMCA.

Tesla has proven you don’t need a dealer network to sell cars in the United States.

And how are people going to service those cars? I mean it is not a phone, that you can make a million units, send it into the world and after EoP pretend that it never existed.

This is what they get for investing in anti-EV FUD instead of investing in EVs.

It’s also what they get for enshittifying cars. China might sell me the car I want: simple, ultra reliable, long range, no infotainment system, no tracking, no subscriptions, no attempts to foist software on me, and made of standard parts making it cheap to repair. Just a motor, battery, wheels, and basic car comforts.

I don’t want to see China win this one but I’ve felt it coming for a while.

> no tracking

LOL, you do realize that you're talking about a totalitarian country with "social credit" system, and probably most advanced surveillance tech in the world?

Not sure if you realise that the social credit system is commonly misinterpreted ? It's just a similar financial credit score system in the west. Theres nothing in place that remotely looks like that episode of black mirror.

Can you spell out the similarities and differences?

Idk. Looking at the credit system in the west I would say it's suitably dystopian so not really any points there

In a digitalized world, we all live in a totalitarian system. For example, Meta Corp has a relationship graph that would certainly make even the East German Stasi jealous and on a global scale. Fun fact: China has more liberal laws on cryptography than, for example, Australia (which mandates backdoors for companies operating in land of oz)

> China might sell me the car I want: simple, ultra reliable, long range, no infotainment system, no tracking, no subscriptions, no attempts to foist software on me, and made of standard parts making it cheap to repair. Just a motor, battery, wheels, and basic car comforts.

But it won't be like that, will it. There will be an infotainment system with broken features and no updates, there will be tracking and of course some software is inevitable in modern cars, not least because the regulations demand that. There will be no standard parts. The reliability remains to be seen.

Does it have Android Auto...

Because if it does that is all I need. Something GM is taking away

All Chinese cars I've seen for sale here so far had infotainment systems and pointless use of touch screens.

Indeed, and this also explains the popularity of Dacia.

I would go a step further and say that I don't even want some safety features if the cost/benefit ratio is not unequivocally positive. The safety push in the car industry is great for incumbent manufacturers but bad for consumers on a budget. I fully realize we still lose too many people in car accidents, but I'd rather use public transport or bikes for 90% of my travels and own a slightly unsafer but very cheap car that I use sporadically. (This is in a region that is very bike-friendly with superb public transport).

That's the problem, it's not about your safety, it's about that of your environment. And Dacia's, especially their cheap SUVs, are horrible at keeping pedestrians safe.

I wouldn't dismiss the safety feature a modern car has, you never know when you might need them.

Features like auto braking system are incredible. I know someone where this saved a kids life (kid ran on the road from between cars right in front of a car).

The crash safety feature on high end cars are also incredible, I know someone else with a completely mangled up car after a high speed crash just walk and be fine.

I am also old enough to know people that have died or with lasting damage like paralysis or back issues from crashes quite some time ago.

I have a car with auto braking. It's never prevented an accident but has nearly caused a few. When exiting onto a cambered road, it senses the slope of the road in front of the car as being an object that it thinks I'm about to hit, and stops randomly. It then refuses to move again until I completely take my foot off the accelerator and depress the brake fully. The fact that it takes a good couple of seconds to coordinate all of this is super dangerous, especially when trying to pull out in a gap in a high traffic area. I'd rather take my chances without it to be honest.

I've also had the lane-assist try and yank me towards oncoming traffic. Also not fun.

that's just a poor implementation, can you name what type of car?

As for lane assist, that's not a safety feature and I'm also quite weary of it

Volkswagen Golf mk 7.5 - 2020 year model. The issue is well documented online. Problems with safety features are definitely not unique to it though. I travel reasonably often and have driven a variety of hire cars recently with similar issues. Overall I'm just not convinced that 'safety' features are taking us in the right direction.

Wait a few years, PRC investing big in indigenous auto components, cost of electronics/sensors is easy to value engineer and scale. I think if you're prodominantly operating in urban enviros, especially one that's bike friendly (pedestrian centred), some extra safety is worthwhile investment. Auto parking seems like a nice feature for city driving, having lots of sensors provide overlapping features and there's more to gain than lose. Chinese cars sector are going to make those standard in cheap cars and hopefully convince everyone else to as well.

https://www.squadmobility.com/

I love the concept, but where I live there are too many trees....

> no infotainment system, no tracking, no subscriptions, no attempts to foist software on me

It would be hillarous if we start to prefer Chinese cars due to privacy reasons ...

It wouldn't surprise me really if spyware are only to be made legal in cars the gov. feels it controls the manufacturer of.

> This is what they get for investing in anti-EV FUD instead of investing in EVs.

A lot of the "FUD" are actually very valid concerns - the energy needed, the grid, where to actually charge them when living in an apartment, many times without a dedicated garage space. On top of that the cost - cost of a new one and cost of repair. Sorry but seems a lot of the "FUD" argument comes from very well of IT/Tech people who live in a kind of ivory castle where $50k for a new car where one small fender-bender costs thousands is not much.

They won't, at least in the UE cause of regulations.

The article has a click bait title and then opens up with how fast the Chinese electric cars are compared to high end gas cars. Like, that's a core property of electric cars, nothing to do with incredible innovations in China...

It mentions: speed of development (much faster), a MVP concept of new model testing, a new breed of companies a la Tesla founded by tech billionaires, the old battery supply control story, BYD surpassing Tesla, ...

I find it quit insightful if you want an update of the affairs in the car market.

And I happen to have a friend in Germany in the industry, he acknowledges the utter fear the German brands have with the storm that is ahead (he is actually considering to leave Germany). The largest EV producer in the World only two weeks ago sent their first shipment to Europe. This 'clickbait' is just starting to unfold.

To be honest I stopped reading after that intellectually dishonest opener. I didn't mean to suggest there wasn't truth to the claim or that the market wasn't ripe for a shakeup. Interesting anecdote, too, thanks for sharing.

That’s just a rhetorical flourish, hardly clickbait.

I don't know what the economist is saying because paywall, but the proud western * auto industry with hundreds of years of tradition combined should work on reducing prices instead of on super premium electric cars.

* and Japanese. What are you thinking with those PHEV Rav prices, Toyota?

For geopolitical purposes, Japan is part of the west along with South Korea.

Mostly yes but I doubt anyone thinks Toyota when hearing "Western [car] firms".

Many Toyota vehicles are more "Made in America" than then many Ford and GM vehicles which are mostly made is Mexico these days save Ford Trucks.

If you looking for a Made in US Car, Toyota is the brand you seek

Not my Toyotas, as I'm in Europe.

https://archive.is/UtTZP

It depends on the company. VW has a serious problem because they are selling a mass market product where they need to compete with the Chinese products. And while they make fine cars their infotainment system that now controls everything is still terrible (laggy touchscreens, complicated UI and so on) and the cars are expensive and their EVs are slow. Unlike many here I think touchscreens in a car are fine if done well (like Tesla), but getting it right is extremely important.

On the other hand, BMW/Mercedes for example sell much based on brand recognition and to a market segment willing to pay a lot. This is unlikely to change soon, so their strategy is reasonable.

> Unlike many here I think touchscreens in a car are fine if done well (like Tesla)

Ouch. Yes you're a minority. I will never buy a Tesla because of the touch screen only interface. I don't want to die adjusting the a/c on the touch screen.

In the RAV’s defence, their resale value is second to none. I can currently sell my Rav 2018 for about as much as I paid for it 5 years ago.

We should ban Chinese cars from European and American roads.

I have sincere doubts of "quaking"s happening, the west seemingly wants Pax Sino to arrive in full force and replace Pax Americana.

"quaking" I had to google that up to figure out whether I want to read the article or not.

It's a fairly common term in English. Think earthquake.

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