There seems to be some disconnect here with price reality, at least in the UK.
They say the BYD dolphin is $13,500, but the on the road price of the Dolphin in the UK appears to be £25,000/~$32,000
I guess they are pricing for the market, but if they sold these cars for the ~£11,000 (Dolphin) or ~£7,500 (Seagull) they say they are selling for, it would sell like hot cakes. Sure there are some taxes and stuff, but that can't account for a 250-300% increase.
As it is at that higher price, no one is going to take a chance on an unknown (for the UK) brand when they can get an equivalent model from a brand they are familiar with (e.g. Dacia, MG (even if MG is Chinese, people recognise the brand)). Amazon has ruined it for these Chinese competitors (i.e. weird unheard of usually random ALLCAPS brands e.g. BYD, ALOOPTI, DFFUTRI etc etc from Amazon being absolute trash).
I drove a MG ZS EV for a month or two and it was actually pretty good so it is a shame that the reputation for cheap low-quality trash is so pervasive.
There's no point spooking western markets with low price that will be construed as dumping. Short term strategy is sell 1 car for the profit margin of 20 cars and see how geopolitical enviroment play out and general public exposed to the quality of PRC cars.
BYD is already relatively large in Australia, mainly because other manufacturers were aiming for the high end and complaining that people don't buy enough of their cars... Meanwhile BYD will sell as much as they can ship. (They got 14% of the market in ~1.5 years)
BYD will reach their market space limit in Australia, they just seem to be eating Tesla’s momentum at the moment.
Australia has a long history of brand snobbery when it comes to car manufacturers. Most new entrants into the Australian market don’t make it long term.
US won’t ever lead in EVs because it’s the largest producer of oil in the world. The government has incentives to keep ICE as long as possible, thus, hard to be competitive in EVs over the long run.
China meanwhile, is trying its hardest to remove its dependency on foreign oil.
Europe’s incentives are more aligned with China’s.
> China meanwhile, is trying its hardest to remove its dependency on foreign oil.
Dependency on foreign oil is obviously one reason, but let's don't miss the big picture here
China is trying its hardest in all sectors, everything. With over 1 billion people that are just dead poor, there is no choice but to compete the hardest with everyone on everything. Semiconductor, ev, 5G, bio tech, AI, ship building, high speed rail, internet, solar panel etc, the list goes on and on.
Is there anything China is not trying its best to compete?
> I think being energy dependent is a main goal of China's.
There is no way for China to be energy independent. The choice is really just choosing importing what kind of energy from which countries.
Imported energy is not a bad thing. It is actually a great way to balance trade. You can't expect the Chinese economy to run a trade surplus like hundreds of billions $ each year with the US and EU. Buying US natural gas is pretty good as long as you have a solid reliable alternative plan, e.g. Russian energy.
China is physically the same size as the U.S. They absolutely want energy independence, and will probably achieve it for the majority of use within 10 years.
ICE car sales requirements are going up drastically this year, meaning most new sales could be EV within 5 years, and they could sell EVs at such scale after that that a ban on gas cars in cities would convert the rest of the fleet in another 5-10 years.
Once you have cheap, abundant energy all the industrial segments are highly motivated to switch.
> They absolutely want energy independence, and will probably achieve it for the majority of use within 10 years.
No, China will not want that.
Being the largest oil importer from the highly unstable middle east provides an unique opportunity to get involved in the regional affairs. Stop buying middle east oil is like giving up the support from a huge chunk of developing countries. Let's call it suicidal.
Being best customer doesn't always come with proportional perks.
US oil/lng imports from MENA down to ~1/3 of peak. IIRC below PRC current imports which exceed record US highs. Meanwhile US is now net fossil exporter and direct competitor. Same with PRC EV/green exports will be antagonistic to medium/long MENA fossil/lng exporters interests. Being current/historic best customer, how much energy does PRC have to import to get MENA to swap US military bases with PRC ones? And for how long? My guess is too much and for too long. PRC enduring interests in MENA is for energy security anyway, once that's gone, their essential interests will dissapate, much like it has with US trying to move from CENTCOM to Indopac post shale/lng independance.
But realistically, PRC will be dependant on imported fossil for industrial inputs for a while, the important goal is to wean off strategic sectors like transportation 7/14millionbarrels and use domestic oil of 4mb for mainly industry, with 3-4mb gap filled by imports - i.e. energy security/independance goals is changing energy mix to 7mb per day, 4mb domestic, 3-4mb imports vs current 10mb imports out of 14mb consumption. That gap of 4m is still large enough to influence select exporters strategically if targetted instead of current 10m distributed imports. But medium/long term that's a bribe for RU cooperation.
Like if PRC really wanted to gain influence with MENA, they'd start a TW war and escalate to hitting US oil and lng plants and disrupt US exports to put MENA fossil export back on top. Many would also call that suicidal. Long term PRC best to learn from US and avoid MENA drama and sell EVs / electric / renewable infra to rest of world.
I think people forget that Tesla is an US company sometimes... that being said, adoption in the US is probably going to be slowed by cheap gas compared to Europe or Asia
If you think that the USA producing oil gives it incentive to lead in ICE cars, I think you’ll be disappointed. The real outlier are the Japanese, they made bets on hydrogen that aren’t panning out, and so are really behind.
Europa more aligned with China? I don't think so. They are very much opposed to evs from China. Thinking about added import taxes to reduce the massive import of Chinese cars. Europe is also on old school oil continent in decline.
Mercedes sells more cars in China than all of Europe. China is Audi’s biggest market. China is BMW’s biggest market outside of Germany.
So if Europe decides to prevent Chinese EVs from coming into the market, China would do the same for European cars. This is why Chinese EVs are prioritizing Europe over US as a market. Plus the aforementioned fact that Europe wants to move off oil faster than US wants to.
Those are all JVs, Tesla is the only foreign auto company in China that isn’t part of a 51-49 JV. Europe would probably require china to reciprocate if they wanted to start exporting cars made in China into Europe (since China didn’t import many cars made in Europe in the first place).
Not sure why you were downvoted, but that's great. The JV structure no longer benefits china, However, China should still expect blowback from having their economy protected for so long.
Yes for Germany its a bit of a difficult situation, but Europe is itself is actually looking into adding more tax to Chinese evs. https://www.reuters.com/business/autos-transportation/eu-set...
The whole Europese car industry is in a bad shape today. And it successfully lobbied an extension of allowable ice cars. They might be more inclined to promote evs, but certainly not on the level of China. Us and Europe are much more alike.
Europe is not going to commit seppuku and willingly allow Chinese EVs to destroy their internal car industry. Especially since China is now more and more visibly aiding Russia in its war against Europe. Tariff from EU will stop Chinese EVs dead in the water. In fact, today, there was news that EU is set to allow possible retroactive tariffs on Chinese EVs [1]. And there's an ongoing EU anti-subsidy probe that will conclude this year, most likely resulting in more tariffs.
Not only that, there are also big concerns when it comes to spying.
Huawei's net gear is alread being replaced with brands like Nokia and Ericsson. And car tech is becoming much more advanced so that it can also be used to spy on people.
Evil depends on what perspective you're looking at.
Every American has been fed so much propaganda that they see this as good vs evil fight.
Meanwhile, when I visited China, people there only saw this as a political fight. A theater for economical gains. That's it.
But in order to sell the American public on their actions, politicians have to demonize their foreign opponents in every way possible - often portraying them as "evil".
I'm sorry but you have no grounds to claim you know Chinese people's political outlook based on a visit.
Mainland China is still cut off from knowing a big chunk of human thought. Realism - the school of thought you're describing - is the Marxist mode in a place you can't vocally disagree without serious consequences. No wonder it's what you heard.
You will probably see european companies integrating with chinese suppliers (like Volkswagen / XPeng etc.); a bit like Tesla. European car markers still have much better brands and sales channels.
On the contrary, Europe is committing seppuku (and I say this as an European) by desperately clinging to an industry that is, and wants to keep being, obsolete.
We have an almost negligible amount of oil, very far from covering our own consumption. We are very reliant on imports. It should have been our utmost interest, not now but already a decade or so ago, to tell our car industry to wake up once and for all and electrify. Instead, they doubled down on ICEs. Every day we have news in major newspapers, I suppose subsidized by Stellantis and Volkswagen, dwelling on how much EVs suck (full of fallacies like they will always be expensive, they actually emit more CO2 than ICEs if you consider manufacturing, sales are going down in X country - when actually it's invariably the first or even second derivative which goes down -, etc.) - it's pathetic.
We have rampant inflation (to a large extent, precisely due to reliance in fossil fuel imports and the stop of inflows from Russia). People complain that even the lowest-end ICE cars have gone to €20K while anything more or less considered midrange is €30K, when only a decade ago sub-€10K cars and midrange €15K cars were a thing. European ICE cars are ridiculously uncompetitive so most people who want an EV and have the money buy a Tesla.
And the response when someone wants to bring cars at the prices people want is to slap large tariffs... hell, I'm far from a free-market believer and I generally support tariffs as a way to support local industry and avoid external dependence, but this must be the paradigmatic example where they are a bad idea, with our industry only wanting to cling to ICE and being patted in the back for it. What do they want the EU to become, a country stuck in the past where you can see a fleet of cars from decades ago, like Cuba? Do they think it can even work? It's not only China, when Tesla releases the Model 2 it will be game over for the EU car industry anyway.
They are already very late, any measure that doesn't focus on "Electrify. Yesterday" will only deepen an already dire situation.
Vertical? I doubt that, besides the literal meaning of the word.
The first two months saw a YOY increase of new registrations in Germany but the share of EV did drop. People are stubborn and love the ease of filling up a petrol tank. There were more Ferraris registered than BYD, though that might change.
In November the Austrian state of Oberösterreich did announce BYD being the winning bid for buying a fleet of electric vehicles, but in January it was instead decided to lease BMW and VW cars instead. Sadly still cars instead of a stronger investment into public transport.
I think it's not mentioned often enough how difficult it currently is to find enough bus/tram drivers having the demographics that Europe in general does.
Cars will remain a mode of transportation simply because there is a huge professional driver shortage.
As long as the focus is wrong: Yes. In Germany the Pendlerpauschale (a tax rebate when you live a long distance for your workplace) costs the state 2.2 billion Euros a year, Diesel is still taxed less than petrol, another 8.5 billion and there's a tax privilege for company cars in a mix-private use which costs 1.8 billion. There's plenty of money to pay bus/tram driver more and build more lines.
One thing most forget: Travel and transportation that is car-focused ignores those who can't yet/anymore operate a car. Better public transport allows you granny to travel easier as well as your children.
You can't persuade people using money, at least not the kind of money cities can afford, as there are plenty of equally paid, less stressful and more interesting things to do with your life.
In my city of 600k inhabitants there's a shortage of around 100 drivers - and that's just to service the lines that are currently operating. That's approximately 80k people not having their transportation needs met.
The city is also cripplingly congested, but that's expected when you can't rely on public transportation.
We need a solution that doesn't rely on demographics like they were in the 60s or even 80s.
The best argument I liked so far to what's happening is that this flooding of Chinese EVs is due to the internal slowdown of EV sales. Essentially, China is producing roughly the same amount of EVs but as they can't sell them at the same pace locally, they are now pushing them to the outside world.
There is no conspiracy here (in my opinion) or attempt to flood the global market; but rather a giant internal economy (that most people ignored because China is kinda enclosed in its own bubble) is now getting exposed and it's showing how far China has come.
Another one is rails: China makes a lot of rails. A shit-ton but since these can't be sold to consumers, China created the "belt and road" thingy so that they can export their production.
China has a lot of excess capacity. They can out build the West, the developing world and India. They were just busy building inside but now that they need new export markets and have mostly finished building inside, they are looking outward.
BYD is a commercial company with US financing. They are leading in vertical integration and battery tech which allows them to sell at these price points. They are expanding in export markets because they think they can make money not because of "overcapacity".
I think their strategy was always to dominate EV exports, it’s just that until now their supply was mostly eaten up by internal demand. They do need to pay attention to their margins though, if they aren’t high enough this won’t be sustainable (and ya, tariffs).
China is hitting that demographic cliff much quickly than Japan did, so I wonder what that will mean in a decade or two. Maybe they will turn more attention to robots next.
I disagree with the notion that Chinese EV makers, including BYD, have always aimed to dominate EV exports. Their focus has primarily been on satisfying domestic demand rather than targeting overseas markets like Tesla or VW.
Given that they've only 1 year something ago emerged from COVID-related restrictions, a shift to an export-focused strategy would require substantial time and effort in research, planning, and marketing to become competitive internationally. While BYD, as one of the earliest players in the EV market and with existing facilities in Mexico and the U.S., may be a step ahead, I believe they're just at the initial stages of exploring overseas opportunities. The EV market competition is likely to intensify in the coming years, but it's still early days for Chinese EV makers in the global arena.
Excess capacity argument is more and more dog whistle for PRC exports that eats away at historically western/incumbant market share. It's just exports. Right now PRC exports ~15% of domestic production. Germany, Japan, South Korea exports >50%, I think US ~20% due to RoW not caring much for SUVs. But light vehicles like Tesla has >50% of Tesla export markets. PRC has a lot of absolute excess capacity, but not really relative to total production vs other exporters. The aggregate export of non PRC players is probably equivalent to another 15-20% of PRC production, a big chunk of which is the PRC market itself. It's still early days, no reason PRC not to aim for 50% exports (15m cars), and if there's tariffs in west, ban domestic western cars and chip away at RoW share. EV also ties into energy charging/infra exports, indigenous semi, RoRo ships etc. There's a lot of strategic synergies.
10% of China’s capacity being exported is more than N% of any of those countries listed, absolute numbers do matter in this case. At much smaller Germany’s 50% there will be really huge push back from other countries, I don’t see it unless Chinese companies build factories abroad, which is what China essentially forced the western players to do in China anyways.
The USA exports $50b of cars but imports $150b of cars, you can’t call it a net exporter.
It matters to other auto producers countries to protect their industries, which is just a handful of countries. Hence the rhetoric from these countries that PRC auto having excess capacity is a problem, when it's just competition. As if PRC producers not entitled to grabbing as much share as they can. IMO PRC fine with building plants abroad, and is doing so. Also fine with PRC level of import tariffs, since they have no issue competing on price. But that's also what makes it none starter in said countries, since PRC producers are positioned to out compete domestic brands if allowed in comparable PRC JV or tariff arrangements. So I think ultimately foreign brands are out in PRC, and PRC brands out in foreign car producing countries, and the fight is over shares from RoW non producers. Which is just as well, because the big picture is exporting PRC charging standards, loading cars with PRC chips and all the knock on affects, stuff that makes unfettered PRC cars in nonfriendly PRC markets even less feasible.
I didn't say US net exporters, I said some US auto companies in segments RoW demands makes significant % of revenue from export market. Which will likely be same for PRC - most producers / models will stay domestic. The few that ventures abroad for export share has no reason not to aim high. In that context 10% is not excess capacity, it's just the beginning.
> China is hitting that demographic cliff much quickly than Japan did, so I wonder what that will mean in a decade or two. Maybe they will turn more attention to robots next.
I don't think it'll matter as much as people think. They still have high unemployment and a relatively high rural population. They still have lots of excess human capital to draw from.
One road one belt was a political decision to have more influence.
In terms of what rails transport can process versus container ships, it's barely useful.
They downsized one road one belt loans to a minimum last years. Most likely because countries can't afford those predatory % ( the details are also not open).
The years that China had "interesting" growth are over. Perhaps EV's, who knows.
There is an article in China daily somewhere a decade back discussing the niche between container ships and air freight. It seemed to be stretching at the time, I think the rail connection to Europe was more about face than practical use, but a lot of points in between in Central Asia aren’t served well by sea.
> The best argument I liked so far to what's happening is that this flooding of Chinese EVs is due to the internal slowdown of EV sales.
They're dumping on external markets. Tariffs will put a stop to this.
We'll likely want tariffs if we want to give our domestic auto manufacturers time to adapt. And domestic automotive industry is important to maintaining a manufacturing base for defensive purposes during wartime.
> They were just busy building inside but now that they need new export markets and have mostly finished building inside, they are looking outward.
Their domestic market is saturated and experiencing economic headwinds.
They're looking for external buyers because their internal economy has slowed. There wasn't enough real domestic consumption to prop it all up.
> They can out build the West, the developing world and India.
For a while. India, Mexico, Vietnam, et al. are ramping up.
>We'll likely want tariffs if we want to give our domestic auto manufacturers time to adapt.
Also known as "<Country> First" policy, wasn't too long ago (and presumably still is) that such policies were/are heresy.
Note, I agree with protecting domestic economies; I am all for America First, Japan First, UK First, France First, et al.. I'm just amused the same people who screamed "Orange Man Bad" turn on their heels to advocate the same policy just under different words.
The reason the world largely went away from high tariffs are many. In the first place they're redistribution scheme from consumers to industries that have the political influence to lobby for tariffs. Secondly they make the domestic industry lazy and increasingly noncompetitive (not just in pricing, also in R&D and market fit). After some years of this, the foreign competition will be so far ahead that they're able to out-compete the domestic industry while producing in-country (see Japanese/German car makers in the US).
Regarding cars specifically, which group do you think is bigger: car buyers that would get a $20,000 gift from the Chinese taxpayer (and likely spend those savings in the domestic economy) or people employed in car manufacturing?
Tariffs only apply to countries that make cars really, so don’t expect Australia to care much if BYD is selling below cost. America and China already have mutual tariffs in each others cars, China has those with most car producing countries (put in place originally and ironically to protect the Chinese car market)
There is a 10% tariff in cars from China into the EU (I’m sure that’s reciprocal).
> Europe levies a duty of 10% on cars imported from China. That compares with duty of 27.5% in the United States, and China's manufacturers have taken advantage to carve out a significant and rapidly growing foothold in the European
Of course, Europe is more than just the EU. And I don’t think the EU will shy away from protectionism, since China does the same. But in that case I’m sure BYD will just open up a factory in one of the cheaper EU countries (if they haven’t started that already).
> Of course, Europe is more than just the EU. And I don’t think the EU will shy away from protectionism, since China does the same. But in that case I’m sure BYD will just open up a factory in one of the cheaper EU countries (if they haven’t started that already).
Seagull - actually lolled. Possibly the worst name for a car I’ve ever heard. “I’ve drive a Bring Your Dreams Seagull” sounds like I’ve lapsed into word-salad.
Nobody says "Bring Your Dreams" out loud. Also, "the gull" was a nickname for a few cool cars in the past - nothing bad about them: https://en.wikipedia.org/wiki/Gull-wing_door
If the names or conventions aren't familiar to you they'll sound silly. Having a look at the names of top selling cars if you're not familiar will make them look just as silly. There appears to be one named after a type of sheep, and a very popular one named after an insect.
Thank you. Yeah I’m still on borrowed time, but I’m doing alright and trying to come up with new ideas for shifting things. Probably going to change continents soon for a break / new start.
They say the BYD dolphin is $13,500, but the on the road price of the Dolphin in the UK appears to be £25,000/~$32,000
I guess they are pricing for the market, but if they sold these cars for the ~£11,000 (Dolphin) or ~£7,500 (Seagull) they say they are selling for, it would sell like hot cakes. Sure there are some taxes and stuff, but that can't account for a 250-300% increase.
As it is at that higher price, no one is going to take a chance on an unknown (for the UK) brand when they can get an equivalent model from a brand they are familiar with (e.g. Dacia, MG (even if MG is Chinese, people recognise the brand)). Amazon has ruined it for these Chinese competitors (i.e. weird unheard of usually random ALLCAPS brands e.g. BYD, ALOOPTI, DFFUTRI etc etc from Amazon being absolute trash).
I drove a MG ZS EV for a month or two and it was actually pretty good so it is a shame that the reputation for cheap low-quality trash is so pervasive.