>Which they are doing, and clobbering Detroit on price.
Let's be real, their prices are lower because Chinese labor is cheaper. US companies have to pay US rates and import as much as they can rather than having it all made in the US.
Let's be real, their prices are lower because Chinese labor is cheaper. US companies have to pay US rates and import as much as they can rather than having it all made in the US.
But one thing that's hard to deny is that US and European car manufacturers are still building on top of previous iterations of their vehicles, swapping out a ICE with an electric system but keeping the existing systems, frankensteining the two together. The article itself makes note of it:
> More than five separate CAN buses, ten or more kilograms of low voltage wiring, probably over one hundred electronic modules (most with their own CPU and firmware), etc.
I don't know cars, granted, nor legislation, but surely a car engineered from scratch would be much simpler and thus cheaper to build? How does Tesla do this?
Worth noting that the car in the article isn't from a US or European car manufacturer, though Hyundai is certainly fairly well-established at this point.
But also, a lot of the stuff going on/wiring+subsystem count is not solely a factor of "making a motor assembly from scratch". For instance the steering wheel lock sensors in the article. Or all the safety-related sensors and subsystems, let alone all the infotainment stuff and related "features" in a modern car... Is BYD doing any better at reducing all that sprawl?
Compare that to US workers making about $30 per hour: https://www.bls.gov/iag/tgs/iagauto.htm
As for the engineering costs: I think reusing existing designs is a way of cutting costs for US companies. Chinese companies and Tesla designed very different stuff from scratch because they had no choice I think. Remember, existing designs are proven over potentially decades, comply with various laws, etc.
Whoever was dismissive of the legacy car makers was also assuming decades of innovations in maintainability planning and reuse logic in one of the most highly competitive industries. Turns out, Tesla - even though the shook up the legacy contenders early on - is losing a lot of the advantages quicker that they have imagined to stay. Hardly a surprise to anyone who understands that millions of highly skilled engineers in the car industries aren't exactly less competent than the average Tesla engineer.
I know someone will chime in and talk about subsidies and IP theft, and while that may be true, the Chinese manufacturers are also incredibly willing to take risks and innovate, and that seems to be a reality that we do not want to confront in the west.
Let me put it another way. It is literally cheaper to ship basic materials like wood to China and have them send us back popsicle sticks. Does that sound like a cutting-edge efficiency problem, or is it a wage problem?? The same can be said about all kinds of things from food to pig iron. We're not talking about tech in any sense. The US mastered every single industry it sent to China with great efficiency, but the exchange rate situation and low wages there make it very difficult for a US company to compete.
Also, China protects its markets much better than we do. In order to sell in China you have to set up a 51% Chinese-owned outfit just to do that. Meanwhile they dump all their products on the world market with very few reciprocal relationships. Imagine how different things would be if we required Chinese companies to do the 51% US-owned franchise thing here. We could even require them to build factories here. Of course, there is no point doing that. If they did it, the goods would be just as expensive as 100% American companies. That's why we don't bother. They on the other hand do it mainly to swipe whatever knowledge they can from foreign companies. I've seen many accounts of this from US companies. You can get the Chinese to make lots of things, but if you send your design there then you risk knockoffs putting you out of business in only a few years.
Labor is almost certainly not as cheap in Mexico as it is in China. China still enjoys benefits of "developing nation" status despite being very advanced when it comes to manufacturing. There are many variables when it comes to productivity such as the amount of investment, the size of the workforce, and government subsidies. If you believe in specialization, then having a much larger population to work (as also consume the product) is a big advantage. The Chinese government is heavily involved with its domestic businesses, from literally owning them to spying on their behalf, to putting up roadblocks for any competition. Mexico might be as advanced as China if we had outsourced everything to them instead of China, but I'm sure that did not make sense when we started doing it and it probably still does not.
There's nothing magic about China. It's just got lots of people and cheap labor, and a bunch of policies that are unfair to the rest of the world. They have a head start of about 30+ years on Mexico and other competition. The US and euro nations have let everything basically rot for 30+ years instead as everything got shipped to China. It's not that we can't do anything that they can do in principle, but it takes time and investment and the result is hard-pressed to make enough money due to the fact China can do it cheaper. In most cases Western manufacturing was better than Chinese for the longest time, but we basically taught them all our trade secrets without them sharing back any knowledge. We don't have a large pool of workers with manufacturing experience as they do, because of the outsourcing.
We have some subsidies, but they pale in comparison to what China does and come with random obligations like quotas per ethnicity or sexual orientation. TSMC complained about this stuff recently. They got billions of dollars in subsidies but still struggle to hire the right people locally in the US.
It takes decades for some of these industries to build up, even going back to the university training pipeline. The idea of pushing a "service economy" is a costly mistake that nearly all Western countries fell into. At some point, China and other manufacturing-based nations will refuse to take worthless Western currencies in exchange for their goods. That is, unless we have something real to offer in exchange.
American Battery Factory seems to be good at press releases but not at shipping product.[1]
Tesla had severe problems with in-house battery production. Mostly they packaged Panasonic and CATL cells. But the battery plant may be past that point, finally.[2]
The only European company that makes LFE batteries in quantity is in Serbia, and they're still in the sample stage.[3]
These new plants are starting to make a product Asian plants have been producing for years. All the big Asian makers are frantically trying to get the next generation, solid state battery production to work. Some of them have semi-solid state batteries working. Factorial in the US is trying to do that, too.
[1] https://americanbatteryfactory.com/press
[2] https://insideevs.com/news/733985/tesla-4680-manufacturing-m...
Labor prices matter, but 14 years of dithering matters more.
Right. Try to register an ICE car in Beijing.[1]
[1] https://www.electrive.com/2024/07/25/beijing-increases-nev-q...
In summary, I won't be hopping on the EV bandwagon. The Toyota CEO is right. They have nothing against EVs and would make them if it made sense. Trying to ram EVs down people's throats will waste a lot of money and cause lots of problems. A hybrid is something that actually does work for many people. Hydrogen would also be superior, if they can get the kinks out. Toyota is a pioneer in hydrogen power too.
People in apartments usually have an assigned parking space, often covered. All you need to provide is a 240v outlet like a clothes dryer uses. Car owners can bring their own chargers.
It's more accurate to write that a lot of apartment complexes have simply not tried to install charging because most of their tenants don't have electric cars.
That sounds like rich apartments. Most apartments I've seen don't have assigned parking, or adequate parking for guests. Covered parking is extra, even in the hottest parts of the US. Tenants don't have anywhere to plug in. Don't take my word for it. Go take a tour of basic apartments in your area with a realtor and see how many of them can support more than like 5 EV cars. I think you will find that all of them cannot support mass adoption of EVs.
You're talking about installing megawatts worth of cabling for EVs that nobody wants as if it's already done or trivial to do. Even if you did it, the additional fire hazard is nothing to scoff at. State Farm (the insurance company) decided that EV charging was too dangerous for its parking garages. Who are we to tell them that they are wrong about the risks?
You might be somewhat right about this being a chicken/egg problem. It goes all the way back to the power plants that cannot produce enough power for EVs. This conversion to EVs, if it ever happens, will need decades to unfold. It could easily be disrupted by developments in synthetic chemical power such as hydrogen. In any case, whining about manufacturers and consumers not going in directions that don't work for them is a non-starter. EVs are at present luxury items that only work for people who can shape their lives around charging requirements.
I've lived in apartments most of my life, my guy. Literally every apartment I've lived in has had assigned parking or covered parking. That includes some crappy 70s-era housing with paper thin walls, lead paint, and no washer-dryer in the unit. Apartment buildings are generally required to have adequate parking for all residents. That's one of the building codes dense housing advocates want relaxed.
> You're talking about installing megawatts worth of cabling for EVs that nobody wants
They'd want it if it existed. I think we both agree it's a chicken and egg problem.
> Who are we to tell them that they are wrong about the risks?
Maybe they just gave a plausible-sounding excuse for ending an employee benefit?
> synthetic chemical power such as hydrogen
Hydrogen is a lower fire risk than Li batteries? Interesting...
> EVs are at present luxury items that only work for people who can shape their lives around charging requirements.
For people in single family homes who already own 2 cars, trading one out for an EV is a no brainer. I'm not describing particularly rich households.
I've lived in several apartments too and toured many more. The only covered parking any of these apartments had was an upcharge. In most cases the parking was not assigned. You are given a tag and you park anywhere you can.
>Apartment buildings are generally required to have adequate parking for all residents. That's one of the building codes dense housing advocates want relaxed.
Adequate parking yes, assigned parking no. In one apartment I lived at, there were about 5 guest spaces per 100 units. Your guests could have to walk half a mile to get to your apartment.
>Maybe they just gave a plausible-sounding excuse for ending an employee benefit?
This service costs very little, so I'm going to say no. They could have charged money for the service if they really wanted. My employer used to have free charging, but now it is a paid service. EV fires are super bad and toxic, and insurance companies can see through the propaganda because they deal with the true costs of the fires.
>Hydrogen is a lower fire risk than Li batteries? Interesting...
It actually is, because the fire can be extinguished. There are risks associated with hydrogen, as with anything, but hydrogen is just an example. I think we could actually work out how to capture carbon from the atmosphere and convert it into hydrocarbons as well.
>For people in single family homes who already own 2 cars, trading one out for an EV is a no brainer. I'm not describing particularly rich households.
If you own a house and have 2 cars that aren't old or in poor condition, and can afford to do electrical upgrades (which could involve rewiring half the house), you're not particularly poor either. If you want to trade out one of them for an EV because you know you need flexibility, a hybrid (plug-in or otherwise) is the real no-brainer. I'm not buying a hybrid or an EV because I don't consider the technology suitable for my purposes. But you buy what works for you, and don't complain to me when I'm proven right.
It generally includes the labor for sub-assemblies, but not for components. Components are sourced globally, so manufacturers in different countries should not be paying substantially different prices for components. Certainly sometimes they do, but that's generally a tariff issue, not a labor issue.
Not an expert, this is just based on most of an hour of random Googling.
A high school teacher once told me that the most expensive part of a car is healthcare and pension costs. Road and Track reported on this a little while ago, no idea what the situation is today.
https://www.roadandtrack.com/car-culture/a9590/pension-costs...
https://www.bls.gov/iag/tgs/iagauto.htm
https://www.reuters.com/business/autos-transportation/chinas...
Actually they are paying even less than some Chinese companies there.
And your link does say byd offered a base salary 300$, with much more as a total compensation.
A while back I heard Boeing had aerospace engineers working abroad (I think in India) for $9/hr. That is probably a good salary for that part of the world. But in the US the same job might pay $100 per hour. Then we also have a different work culture than elsewhere. If you pay foreigners "good money" they might be working at all hours, but US workers demand a reasonable balance.