The coming Chinese EV storm will cause Tesla to struggle. All car manufacturers will struggle.
I wonder if the Chinese will pull a Toyota (high quality, and cheap) or if they’ll end up being a different flavor
I wonder if the Chinese will pull a Toyota (high quality, and cheap) or if they’ll end up being a different flavor
I think Tesla is still the luxury brand even in China, and that can sustain a company for a long time, but I predict it'll lose more market share for a while.
Source: https://podcasts.apple.com/no/podcast/in-good-company-with-n... (Episode from 9 Apr 2024 - interview with Elon Musk)
If I can see it then how is it that every car company hasn’t been preparing low cost EV offerings of their own?
A few are but most seem in denial. Ford is the only US one I’ve heard rumors about having something in the works.
Tesla meanwhile spent tons of capital and time on ridiculous microniche products like the cybertruck.
Because the low cost Chinese EVs is a dumping operation organised by China thanks to low cost manufacturing and large public subsidies.
You can't necessarily compete against this as a company if your government doesn't protect you.
I'm not sure but I don't believe that the price difference between China and the rest of the world would be the issue.
The biggest problem is killing of the international competition by having artificially low prices.
Chinese car manufacturers probably make more $'s on each car sold than US manufactures.
Like the $7b in subsidies each for ford and gm or the 100bn in free loans? Perhaps the 3bn in subsidies for tesla.
From a legal/WTO case standpoint, yes. Selling at a loss in general is perfectly legal, and lots of companies do that for all kinds of perfectly legitimate reasons. Using price discrimination to sell at a loss only in certain markets with the intention of damaging the domestic market in that region is when you get into trouble.
A Chinese EV is ~$10,000 cheaper in China than it is outside of China. This is a massive advantage to Chinese vehicle manufacturers. They can scale up production using the internal market, and then use that scale to push down the external unsubsidised price.
Pretty much exactly the same as the US. An American EV is about $10,000 cheaper in the US than elsewhere. $7500 because of the rebate, and the rest in shipping and other costs.
Me too. I was working in the German automotive industry back then, and left when I saw Tesla and China going full steam ahead on all things EV while German car makers were still pushing on diesel, and still do.
>If I can see it then how is it that every car company hasn’t been preparing low cost EV offerings of their own?
For the same reason Kodak invented the first digital camera and then shelved it to not compete with their film manufacturing business long enough for the Japanese to beat them at digital and kill them.
Big corporations are fiefdoms with vested interest to maintain their status quo, not to push to company to self-disrupt itself, meaning they'll just wait and watch someone else eats their lunch.
https://www.fleeteurope.com/en/financial-models/europe/featu...
according to consumer reports, bmw is the most reliable at 9th most reliable automaker, audi and merc are way down
They... have, though? As far as I know, most of the European ones have at least one more or less ready to go. Generally not on the _extreme_ low end (ie not competing with the 10k BYD), but Renault, VW and Stellantis all have models in the 20-25k range pre-subsidy due to launch in the next year. The Dacia Spring (20k) has already been out for a bit, of course.
Because they didn't believe that EVs or small cars were something that could be profitable, at least not compared to the high margin, cash cow SUVs. Instead, they did what they did the last few decades - invest into lobbying to keep emission standards relaxed. Only when Volkswagen and a fair few others got caught cheating, that business model went down the drain and suddenly they had to change.
> A few are but most seem in denial. Ford is the only US one I’ve heard rumors about having something in the works.
BMW is investing almost two billion dollars into its Spartanburg plant to produce electric versions of the X series SUVs [1].
> Tesla meanwhile spent tons of capital and time on ridiculous microniche products like the cybertruck.
Indeed. The thing is a joke on wheels... it shows that unlike SpaceX with Gwynne Shotwell, Tesla (and Twitter) don't have an "Elon handler" responsible for pushing back.
[1] https://www.press.bmwgroup.com/global/article/detail/T042217...
Space launch is not like cars or really most other products. Your customer is highly technical and highly informed and they absolutely will not launch on a rocket that doesn't meet certain design criteria and in many cases they will require the ability to review the rocket's actual design blueprints and software (with NDA in place). NASA and the DOD will demand this, full stop.
If SpaceX didn't have someone like Shotwell pretty much running the show there's no chance they'd ever get a customer beyond the low end of the satellite launch market. They'd also have trouble getting the FAA to allow them to fly, and with good reason. A rocket is basically a bomb that explodes in one direction, and many of its failure modes involve it exploding in all directions.
Elon's been great (at least in the past) at assembling teams, getting funding, and motivating people to do really hard shit. (Not sure how he'd fare today with his baggage... his brand has taken a hit.) He also knows enough about engineering to hire competent engineers. Beyond that I see little sign that he's actually good at managing or day to day operation and certainly seems no good at product design. This differs from Jobs who at least had killer intuition there. Jobs would have laughed the cybertruck out of the room.
You should read Isaacson’s biography of Musk - there are sections about SpaceX where Musk questions assumptions and goes against the status quo in assembly, operations, and pricing so deeply embedded in the NASA/Boeing/Northrup dynamics.
All these companies have massive debt, low margin, need to continue to make money on ICE.l, transition to EV. To also make a profital low cost EV is insanly hard. They are struggling to develop a profitable high cost EV.
A lot of the supply chain is in China, so investing in that is pretty hard.
Its simply impossible for them to scale up the Bolt as is.
Their plan was to rebase the Bolt onto the Ultium platform, but with all the issues they had on that platform, they weren't able to do it.
If it was on Ultium then maybe they could not lose money on it.
I think the bottom line for many people is EVs are still not as cheap as ICE options and definitely not as convenient, yet. When that situation changes I don't know why most consumers would stick to ICE.
The only one you can is the EX30, but even that's more pricy than a Tesla Model 3.
The truly cheap EVs you see in Asia (eg. The lower end BYD, Zeekr, MGs) are aimed at developing markets, not developed.
And yes, plenty of Eastern European members of the EU (the ones where the cheaper end EV makers are targeting) are still developing/emerging markets - Romania, Hungary, Poland, and Bulgaria still are developing (though might not be in 10-15 years).
Higher end Chinese EVs like Polestar and Volvo (Volvo has been Geely for almost 2 decades now) are aimed at developed countries, in order to manage the brand perception.
Many western brands are manufacturing in China and exporting globally (Tesla, Geely/Volvo/Polestar, BMW Mini, Mercedes smart, Renault etc. Hell even the Dacia EV is actually a Chinese car). Some of those are entering the US (Volvo, Polestar, Mini)
Not all of them. Most Chinese EVs in Europe are SAIC (MG Group) or Geely (Volvo, Polestar).
BYD hasn't entered the market yet, let alone the upcoming brands like Xiaomi, but is largely targeting Eastern Europe as their initial phase.
Also, Smart was only recently resurrected as a German-Chinese JV.
> even the Dacia EV is actually a Chinese car
It uses the CMF-A, which is a French-Japanese joint platform.
German automotive players tend to have JVs with China and targeted the Chinese and (before the war) Russian market. French automotive players tend to have JVs with Japanese players and targeted Europe, South America, Korea, and India.
> US is an exception
They are available in the US as well under the "Volvo" and "Polestar" logo, as both are subsidiaries of Geely.
> Many western brands are manufacturing in China and exporting globally
Absolutely! But for now they don't have significant marketshare YET. It's still Tesla, BMW Group, VW Group, and Daimler-Benz Group (which is going to start using a Chinese platform as they fell significantly behind).
In the US EV platforms need to be domestic in order to be cost competitive, but in the German automotive industry, they're going to start importing Chinese EV platforms (as German automotive brands were almost entirely dependent on China - the VW Jetta was China's Honda Civic).
In the next year, that kind of importation will most likely be banned and retroactive tariffs will be in place by June-July [0]
[0] - https://www.reuters.com/business/autos-transportation/eu-set...
"BYD hasn't entered the market yet" https://electrek.co/2024/01/12/byd-slashes-ev-prices-germany... https://bydeurope.com/article/409
Plenty of Chinese brands are sold in Europe. Nio, BYD, Xpeng, Zeekr, GWM (Ora) etc etc they're all there. Xiaomi isn't outside of China yet as they have launched literally a week ago only.
https://electrek.co/2024/03/28/xpeng-xpev-launches-two-evs-g....
https://www.arenaev.com/first_units_of_zeekr_001_delivered_t....
https://www.carwow.co.uk/ora/funky-cat
https://www.npr.org/2024/01/07/1223355479/chinese-carmakers-....
You can go to Alibaba and buy a $5,000 EV and then spend a similar amount to import it. It's a lot of hassle, but makes for an entertaining Youtube video.
For the mainstream, likely about 18-24 months after BYD breaks ground on their Mexican factory, which could happen any day now.
And it depends on your definition of "cheap". BYD is obviously going to start with American sized vehicles. The Internet might want the subcompact $10,000 Seagull, but we're much more likely to get something like the $35,000 Atto 3 as the cheapest model to start.
I’d rather drive a reliable EV from China (a country that manufactures every “American” tech staple such as iPhones) than drive a Cybertruck for example.
Is anyone actually saying that?
But then, I don't expect the people thinking about (and rejecting) buying a Tesla to be the same ones that buy a Chinese car because of the price.
But it's not some attempt to punish him. It's because I don't trust him to be a stable long term owner of the company that is building and servicing my car.
I could see myself buying a Chinese EV.
How does that make me a hypocrite?
/s (?) :-) (?)
Hence, no hypocrisy (in the main).
The next 5 years will be painful for Tesla.
For example:
https://europe.autonews.com/automakers/china-brand-hyper-use... (archive: https://archive.ph/LlQV2)
https://uk.motor1.com/news/715871/im-l6-ev-solid-state-batte...
And in traditional liquid batteries there are also a number of changes happening that change the behavior of the battery under these conditions.
Making judgment on that stuff based on small scale lab test just doesn't really hold up.
These batteries all have to go threw automotive testing. And by the time they are actually commercial, then you can compare them to the newest generation of liquid batteries. And then maybe the perform slightly better or maybe not.
No. It's a battery with a solid electrolyte:
https://en.wikipedia.org/wiki/Solid-state_battery
https://en.wikipedia.org/wiki/Solid-state_electrolyte
They've been around for a long time.
https://newatlas.com/automotive/im-ls-lightyear-solid-state/
That's a great solution for electric cars: Install "battery swap" walls on each gas station, and make cars allowing said battery swap (if the car "floor" is full of batteries, make it so that it is split in "packs" that can be pulled from the side to be swapped)
You won't be able to get a car which isn't connected, just like its increasingly hard to get a TV that isn't connected. The cultural acceptance of this has been driven from the trillions spent by advertising companies in double-dipping -- companies not content with making a product and selling it for a markup, they have to squeeze an extra $10 out of that $500 TV -- and that has massively weakened the security of society, both directly (Internet of Shit) and through expectations (IoT supply chains controlled by hostile agents)