Why are Chinese EVs cheaper than Tesla | Hacker News Reader

Why are Chinese EVs cheaper than Tesla

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10 pointscolinprince7 comments

A significant component of the price gap is indeed subsidy. It would be foolish to say otherwise. It's $4700 of a $9000 price gap and thats not nothing.

Delaying payment to suppliers is a dog act. Thats no way to build business. I don't like it but I also don't see how that contributes anything like as much to the bottom line price, over time the cashflow still has to happen.

Forgive me if I allege sharp practices in Telstra, but I am forced to ask if there is some game going on with the IPR, and cost of things like the software stack. It's entirely possible that payments to that component are being used as a financial trick in a carmaker version of "hollywood accounting" to keep the business from having to e.g. pay out Panasonic on the cost of battery building, or some other partner. These things can happen in any industry.

But putting that to one side, It's just possible the gap here is Chinese labour cost and not much else: China can do this at scale, for a lot longer, and doesn't have to deal with the UAW or the German unions (I am by the way, pro union and this isn't meant to imply the unions are wrong to stand their ground) -Except that the cost of construction of a Tesla inside China is higher than the cost of a BYD constructed inside China. So.. I don't entirely understand this gap.

I'm forced to conclude Tesla doesn't want to compete on price and would prefer a higher per-car profit, than to achieve the volume of sales.

> A significant component of the price gap is indeed subsidy. It would be foolish to say otherwise. It's $4700 of a $9000 price gap and thats not nothing.

The article says the subsidies are 5% of $4700 [1].

[1] "The February 19 report found Chinese state subsidies account for just 5% of BYD’s $4,700 per-vehicle cost gap with Tesla, with scale, cheaper talent, and in-house manufacturing making up the rest"

You're right. I misread the article and thought the $4700 was the subsidy. My reason was that back in 2010 era Australia the per car subsidy from the Australian government was around $2000 to $5000 and I assumed this was at scale.

(We don't have a car manufacturing sector any more. After the subsidy ended Ford and GM (holden) stopped manufacturing in the country)

I have read that Musk has given up the car industry, except for cybertaxis, because he think Tesla could never compete on price with the Chinese manufacturers.

The struggle to "compete with China" on price is not new. Tesla's failings have everything to do with it's failures in execution, quality and brand image. Apple does quite well in China.

Fairly obvious isn't it? Middlemen, then almost-slavery.

On this 'ere orange website, we don't read the article.

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