China's EV Boom Threatens to Push Gasoline Demand Off a Cliff
bloomberg.com
bloomberg.com
All because of political choices in banning imports and not sufficiently pushing local auto makers to push for an EV transition.
Really wild stuff to see NA that has always been at the technological bleeding edge, weirdly politicize vehicle engines and cede so much ground because it is so politically beholden to oil interests.
The EU is rendering countless people jobless and handing the auto market to the chinese so they can sell their spying devices on wheels (probably also complete with kill-switches that can be activated from China if needed: say in case of a full on war).
It's just insanity. I think the EU is going to be a case study as to how quickly you can kill an entire industry by voting laws favoring a competing nation state instead of your own nation/countries.
Be very careful what you wish for.
What about option 3? Stand and fight. Make an effort. Design something electric that people actually want to buy. Build out the necessary charging infra on a war footing. Shape consumer behavior with tax policy.
I could accept EV tariffs if they were meant to give domestic manufacturers breathing room to catch up. I don't see that anyone has gotten the memo though.
Another take has always been china doesn’t have environmental regulations so they can go faster. Is this true? on the face of it I don’t believe it because the insane cost differential would be like 10% cheaper Chinese evs not 50%.
Automation was supposed to save the west from cheap labor but the Chinese manufacturers have that too
This also requires revising U.S. regulations to be less onerous. Look at China’s export-variant EVs, see why they couldn’t be admitted into America, and question if that requirement is actually important. Because while it’s keeping Chinese EVs out, it’s also making American production uncompetitive.
It seems the government has had lots of mistakes doing that. For example, supporting the early internet buildout (carriers took money), or getting solar off the ground (early startups took money, disappeared), or whatever happened with GM.
Why? If electric cars are the future, certainly building infrastructure will make sense for private companies. If it is not profitable for companies to build such infrastructure, then maybe electric cars are not the future but a fashion trend.
> I could accept EV tariffs if they were meant to give domestic manufacturers breathing room to catch up. I don't see that anyone has gotten the memo though.
China is overplaying their hand. They are having massive overcapacity in the car manufacturing, but most of the world can't afford such cars either due to price and/or due to non-existent infrastructure. You can forget on selling 30k EUR cars in Africa, India or Central Asia. You can also forget on selling such cars in most of China. So tariffs will decimate Chinese car industry.
I didn't say the government would build out charging infra, did I? But they can make it easier.
> most of the world can't afford such cars either due to price
The sun is free. Oil costs dollars. Most of the world is dollar-constrained. Until now capturing the sun's energy was costly, but China's manufacturing scale has changed that.
Their manufacturing scale has also produced EVs that are way cheaper than your average Tesla.
> and/or due to non-existent infrastructure
Most countries have cheaper labor and fewer environmental constraints than the developed world. If they have a reason to build infrastructure, they'll build it.
The reason China is ahead right now is that in addition to the carrot of heaps of funding, there was the stick that China brought in regulations that prevented hundreds of ICE vehicle models from being sold. They were serious about EVs.
This is something USA/Canada could do as well. But no people seem satisfied to do nothing and keep selling giant trucks that burn gas.
Cars just aren't so important here anymore. I haven't owned or even rented or driven one for 6 years. Not even once.
There's big differences between countries here (the Netherlands is still very hung up on cars and Germany too) but in general we don't really look at a car as a must-have anymore. Personally I consider it much more of an obstacle and a huge money drain. I have nowhere to park it, I don't want the responsibility of driving (and possibly penalties), the maintenance, the insurance, the need to constantly worry about charging it or moving it to not hog charging stations (with EVs). Or not being able to use my time productively while driving.
Instead I just jump on the train whenever I need to, and I can read or watch something, all while spending much less.
https://www.cbsnews.com/news/hacked-from-china-is-your-kettl... https://www.telegraph.co.uk/news/2023/01/23/china-could-spy-...
but I guess all cars collect driving data for ai training, so each car is involved in ai.
Even in North America you’re seeing this bifurcating. I split time between New York City and a deep red and rural state. EVs are one of the weird commonalities between them. Not because of politics. But because I’m in a rich area in each.
> because it is so politically beholden to oil interests
Other than Exxon, Big Oil bet on renewables.
The answer is simpler: there was a messaging fuck-up and groundswell backlash from poor Americans being told they had to replace their cars at huge expense.
I also remember when cellphones first became available in other countries.
Because landlines were so screwed up in other countries, and adding cellphone infrastructure was simple and competitive, uptake of cellphones was much more abrupt. The US got terrible cellphones at a slower rate.
The big problem NA has right now is giant rent seeking corporations have become too powerful and are uninterested in change.
In today's world, perhaps we should stop giving subsidies to auto manufacturers and start giving them to drone manufacturers.
I'm not sure that move will help much. EVs PM2.5 footprint, is 0.5x of ICEv [0]. Good but not game-changing.
This is probably a predictor for the rest of the world too. Potential for Africa to leapfrog over fossil fuels, developing nations will embrace solar and cheap Chinese electric vehicles. This will cause a shift in global energy markets. I’m not positioned to capitalize on that prediction, but it seems pretty sound.
If you're only buying dollars for petroleum, and you don't need petroleum, why are you buying dollars? You're going to need a currency China wants to buy solar PV, wind turbines, batteries, EVs, etc from them.
This is nonsense macroeconomics. Even within its framework it’s wrong: China is a net energy importer. The petrodollar hypothesis has been a myth since the 70s.
China would have to open up its capital account to offer a competitive reserve currency. That isn’t happening amidst a demographic decline and authoritarian government. Washington may be doing its best to kill dollar hegemony with its tariff and sanctions fevers. But the yuan isn’t a candidate outside propaganda.
> If you're only buying dollars for petroleum
Then you’re an idiot.
You buy dollars to buy American products, probably financial products, or have them because you sold your crap to Americans who handed you dollars.
Admittedly, you’re the capital market expert, and my thesis could be deficient.
https://www.weforum.org/stories/2024/06/how-china-s-shifting...
https://www.aspi.org.au/report/critical-technology-tracker
https://www.reuters.com/technology/china-overtakes-germany-i...
The pain will be bad as Alberta etc doubles and triples down on pumping oil as the rest of the world in fact does not need oil.
"[In China] they've accounted for more than half of retail passenger vehicle sales in the four months from July, according to the China Passenger Car Association"
Cue the excuses: Something something reducing our carbon emissions is pointless because China and India emit blah blah. And also China is in terminal decline because of a baby crisis.
It seems our planet will be saved by China and not by the USA.
EVs will be an option but they’re going to have to force the chargers through the grid to only charge during the day to take advantage of solar, and properly account for upstream and downstream emissions on the battery pack manufacturing and disposal. A full life cycle has to be considered.
A gasoline engine, runs for a very long lifetime now, and then immediately becomes high value scrap that can be used and sold immediately. No dangerous batteries to deal with.
That's one more on the climate change/EV bingo card.
No they burn coal to generate the electricity they were already using for everything they did before they started buying all these EVs.
Most of their new electricity generation in the past 3 years - when EV adoption has taken off - is from wind, solar, and hydro. [1]
> A gasoline engine, runs for a very long lifetime now, and then immediately becomes high value scrap that can be used and sold immediately. No dangerous batteries to deal with.
Right because all the dangerous byproducts in a gasoline car - the gasoline, various oils and lubricants - have already been used up and discarded into the environment. Gasoline cars have lead-acid batteries, and those are plenty dangerous and nasty. An EV battery goes into a recycling plant, just like an ICE car battery. The rest is equally high value scrap that can be used and sold immediately.
You probably think lithium extraction is bad for the environment too, right? While ignoring oil spills, methane leaks, and damage and water pollution from fracking?
1. So China burns coal, to generate power, at huge heat and transmission loses, to power “clean” EV cars
Are they truly burning coal or are they making syngas for use with a CCGT and shipping the coke off for their steel? (Probably a bit of both, my wager.) Cause a CCGT is gonna be -at least- as efficient as an atkinson cycle gas engine.
> once they implement particulate filters on them,
You can hypothetically do this with a coal plant too, and what's even better is, it's easier to 'check up on' one power plant vs thousands or millions of individuals to make sure the filter is present and being maintained. (e.x. Cat deletes on gas engines.)
> A gasoline engine, runs for a very long lifetime now,
Short of something with a Toyota HSD style setup, you've still got a lot of -other- components that break down in increasing frequency to support that. Your Steel Belt CVTs, your 8-10 speed transmissions with too much complexity slammed in resulting in various reliability issues... And lately almost every manufacturer, even Toyota, has had to do a recall on some engines due to very bad failure modes. And all of it in the name of trying to keep gas engines to the need for efficiency while also trying to add far more power than most people need in a daily.
As for toyota their new engines and transmissions arent really any better for fuel economy but seem to have reliability issues anyway. I think its more of a problem of too much power as the HP war rages on for more powerful engines.
I mentioned HSD specifically, which refers to a Hybrid Setup where the transmission is typically a setup where in simple form there's a single speed gearbox, two motor/generators (one of which more or less replaces a torque converter to minimize losses) and an electronically controlled clutch for the motor to act in direct drive to, again, minimize losses.
Rav4 Hybrids, Maverick Hybrids, Escape hybrids all have pretty good overall reliability track records as far as the engine/transmission goes (interestingly, some of the Ford models have a 'potential recall' on some VIN ranges but it seems like a supplier issue on the crankshafts... which TBH sounds like it hit other manufacturers e.x. Toyota.)
The 'simple' Hybrid model like this typically involves:
- A boring engine with atkinson-style capable VVT. Ford normally uses a variant of a Mazda design that is well proven, You don't need direct injection or turbos, AFAIK even Toyota follows the same pattern (unless they're doing D4S now... but doubt it based on observations of hybrids in the winter)
- Transmission like noted above
- A battery between 1.3 and 3.0 Killowatt hours (probably closer to 2.0 median tho). For comparison a tesla model 3 starts at ~50Kwh battery, costs for maintenance are overblown on hybrids frequently.
- A mileage above 35MPG for something like a Rav4/Maverick/Escape hybrid. Far more for a Prius sized/profiled vehicle.
- Maybe 1-2 seconds of torque decently above 200 lb-ft of torque in a burst, again on something like a 2.5 liter.
> I think its more of a problem of too much power as the HP war rages on for more powerful engines.
Yeah people miss the point there. Most people really want torque to help get them to a highway driving speed safely enough to deal with the rest of the folks out there and have enough HP to get to necessary evasion speed. (And, a transmission that can keep up with that.) For >90% of my driving, the Hybrid gives me enough 'oomph' compared to my older M/T WRX that, well, the WRX now has a maintenance backlog (FML).
If you can hit >200 pound feet in a compact to midsize (C/D class), frankly, that's enough. The average person on the highway being able to hit 0-60 in <10 seconds is often a liability, because it makes them overconfident.
If you have a nation of gasoline cars, you can only use gasoline to move them.
If you have a nation of EVs, you can use coal ... or solar ... or wind ... or geothermal ... or natural gas ... or nuclear to move them.
ICEs are really, what, 20-30% efficient? While coal in a powerplant is likely 37% efficient. Transmission losses is 5%, then the EV is 90% efficient in power to wheels.
And again, if your entire nation's transportation is EVs, you can change the source of electricity by replacing the plants. If your nation's transportation is gasoline ... you can only use gasoline. There is no path to transition.
Sodium Ion batteries in the 150 wh/kg should enable a dirt dirt cheap 200 mile range city car, and should be able to do almost 300 mile range cars as well. 200+ wh/kg LFP should be able to do 300-400 mile cars.
Don't think you're magically picking up some gotcha here that they have not thought of. They're not dumb, and they're absolutely smashing the pants off the energy transition, which is hard for a manufacturing economy.
Both are villains having 80% fossil energy, but China has the curve sloping downwards a bit faster (much too slowly still).
They're close enough that making a treaty to jointly ramp this down (like EU is showing by example) would be painless for both countries from the competition perspectively.