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Transportation China

Should Automakers Feel Threatened by China's Exports of Electric Cars? (yahoo.com) 305

The Los Angeles Times reports that the U.S.-China rivalry "has a new flashpoint in the battle for technology supremacy: electric cars."

"So far, the U.S. is losing." Last year, China became the world's foremost auto exporter, according to the China Passenger Car Assn., surpassing Japan with more than 5 million sales overseas. New energy vehicles accounted for about 25% of those exports, and more than half of those were created by Chinese brands, a shift from the traditional assembly role China has played for foreign automakers. "The big growth has happened in the last three years," said Stephen Dyer, head of the Asia automotive and industrials unit at AlixPartners, a consulting firm. "With Chinese automakers making inroads for most of the market share, that's a huge challenge for foreign automakers." China's rapid expansion domestically and abroad has added fuel to a series of clashes between the U.S. and China over trade and advanced technology, as competition intensifies between the two superpowers...

One area in which Chinese automakers handily beat Western competitors is on price, thanks to government subsidies that supported the industry's initial rise as well as cheap access to critical minerals and components such as lithium-ion batteries, which account for about a third of the overall cost of production... In March, BYD cut the price of its cheapest EV model in China to less than $10,000. According to Kelley Blue Book, the average EV retail price is $55,343 in the U.S., compared with $48,247 across all vehicles... Though 27.5% tariffs have in effect locked Chinese EVs out of the U.S. market, the fear that the cheaper models could eventually undermine American automakers has started to spread. The Alliance of American Manufacturing warned in a February report that allowing Chinese EVs into the country would be an "extinction-level event" for the U.S. auto industry. The group also cited the risks of Chinese auto companies building facilities across the border in Mexico that could circumvent tariffs....

"When the global market is flooded by artificially cheap Chinese products, the viability of American and other foreign firms is put into question," [said America's Treasury Secretary in April]. The European Union has opened an investigation into government subsidies utilized by China's EV industry and whether such support violates international trade laws.

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Should Automakers Feel Threatened by China's Exports of Electric Cars?

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  • You think the Chinese cars are subsidized to make them artificially less expensive? The US auto industry has a LONG history of spending money to fight change rather than adapt to it, then getting its ass kicked.

    If the US domestic industry can't compete, I'm inclined to say it deserves to die. It certainly does not have the consumer's interests at heart, at all.

    • by VeryFluffyBunny ( 5037285 ) on Sunday April 21, 2024 @01:18PM (#64412352)
      Remember when Japan & Korea started exporting cars to the USA? They just made better cars. This doesn't seem much different.
    • by gweihir ( 88907 )

      Yep, pretty much. Although it is somewhat hard to see China as a force of progress, in this area they are.

    • by ArchieBunker ( 132337 ) on Sunday April 21, 2024 @01:35PM (#64412400)

      Exactly. In some states it’s illegal to even sell a new car direct to the public. Legislation designed to prop up the dealership industry. Why compete when you can legislate?

    • by PsychoSlashDot ( 207849 ) on Sunday April 21, 2024 @01:48PM (#64412440)

      If the US domestic industry can't compete, I'm inclined to say it deserves to die.

      And yet... there's plenty of complaining when the good-paying jobs move overseas.

      We should have learned a couple things in the recent past. Supply-chain woes post-COVID should have taught us that we should always have multiple sources for things, and ideally some of them should be domestic. Economic woes in the last decade or two should have taught us that going with the cheapest manufacturing method (offshoring) isn't in our long-term best interests.

      The North American auto manufacturers are being subsidized, but we can't be 100% consumption. We have to produce something to exchange for what we want to consume.

      • by ThosLives ( 686517 ) on Sunday April 21, 2024 @01:56PM (#64412484) Journal

        Another lesson that is related to the above: cheapest in terms of currency (e.g., sticker price) is not necessarily (and is almost never in reality) the cheapest overall.

        There are so many "hidden" costs that aren't reflected in the low currency price of many goods.

        I mean consider all the "free" internet services... which cost us privacy and advertising bombardment...

    • US automakers are looking at electric as the next generation of your privacy invasion. It's a prospect that is putting rabbits in all their pockets. Virtually all US electric vehicles have built-in cellular data (over and above the system you pay for for yourself) that allows the auto makers to remotely log to your vehicle any any time, no matter where you are, and do almost anything. They can update your firmware, turn on or off aspects of your vehicle, see where you've gone, and control anything else.

      • by Firethorn ( 177587 ) on Sunday April 21, 2024 @02:39PM (#64412596) Homepage Journal

        Virtually all US electric vehicles have built-in cellular data (over and above the system you pay for for yourself) that allows the auto makers to remotely log to your vehicle any any time, no matter where you are, and do almost anything.

        I have to point out that it's more "all US vehicles", it is very much not limited to electrics. Hell, I'd argue that there are far more ICE vehicles with this level of monitoring and interference level built in the USA than electrics.

        Your "how much to disable" comment? You might as well apply that to any newish car these days.

        Remember, it wasn't an electric vehicle where the manufacturer tried to make heated seats a subscription.

        And China will happily give your data to the TLAs.

      • Roger that. I pulled a telemetry module out of my car the day I bought it. I'm not looking forward to the day they start integrating it into everything so you can't do that and still have a functioning vehicle.

    • by Pieroxy ( 222434 ) on Sunday April 21, 2024 @02:01PM (#64412504) Homepage

      I do not understand, to this day, how we let Chinese products flood our western markets. If you are a western company, you *cannot* sell your products in china. You need at least a joint venture with a Chinese company to be able to do so.

      Letting them sell their crap on our soil feels to me like a rape. If they don't want our stuff, fine, it's their own right. But then they should not be able to sell theirs on our countries.

      We're getting fucked like never before. And we all watch it as if it's normal.

    • China is building far more battery factories than its own market needs, with the help of grants and loans from the government.
      And the Chinese government offers large tax breaks to both consumers and manufacturers of EV.
      58% of all new electric cars sold today are Chinese.
      • You mean just like chip and other factories in the US get billions of dollars in grants and loans, just like they do in China. China still produces most for its own market. And to as a european it doesn't matter if I buy a US or Chinese car, both probably want to spy on me, as a matter of fact, with US cars it has been proven, with chinese it still hasn't except for US who alleges it but never showed any proof. If the chinese can build cars that can pass our european safetytests and they are even cheaper as
    • by dbialac ( 320955 )
      You've not understood the extent that China "subsidizes" their industry. No company in China pays anything close to their manufacturing costs. The US can't compete because it's simply not possible without the government writing all of the checks. However, China's practices are catching up with them rapidly. Their real estate economy is teetering on the verge of collapse because their real estate developers overbuilt, by a lot. When I say a lot, they built so much housing that it's estimated they have enough [reuters.com]
    • Considering that the US seems to be obsessed with only providing us electric SUV's and trucks that cost over $60,000, I think that they should be VERY afraid of Chinese competition. If BYD can build a $25,000 EV with a 250 mile range, they should be able to do so as well. They just won't WANT to.

    • > It certainly does not have the consumer's interests at heart, at all.

      I wouldn't be too sure that Chinese manufacturers have the US consumers interest at heart either. They want your money, that's for sure. Politically they want you to be dependent on THEM, that's for sure, but I'm not sure they give two hoots if you're happy or not.

      I'm also not too sure we can trust Chinese QA. They're in the same era as Japan was in like the 80s (when we used to say "Jap Crap"). Let's be honest, how many chinese devis

  • Yes. (Score:5, Insightful)

    by Mspangler ( 770054 ) on Sunday April 21, 2024 @12:48PM (#64412300)

    Given what Chinese industrial policy did to American rare earth mining capacity, and having experienced firsthand what they did to both American and European polysilicon and solar panel manufacturing, yes, everyone else should be worried.

    The Chinese do long term planning very well, and the law is whatever the emperor says it is which cuts down on red tape. They can move quite quickly when he wants to.

  • by way2trivial ( 601132 ) on Sunday April 21, 2024 @12:49PM (#64412304) Homepage Journal

    What?

    I know there is a lot more to it, (nhtsa for example) but how is 12,750 "locking out" from it's nearest $55,000 competitor?

    • it won't meet our safety requirements (e.g. it can't survive even a fender bender with an SUV, at least not w/o pushing the whole assembly up into your guts).

      So by the time BYD builds a vehicle that a) meets our safety requirements, b) has the acceleration and performance to compete with Gas cars and c) covers the cost of shipping *and* the tariff it's not worth it.

      The reason they're targeting Europe is that it's not a wasteland of SUV hell. I think shipping might be easier too, but do not quote me
  • by BrendaEM ( 871664 ) on Sunday April 21, 2024 @12:51PM (#64412308) Homepage
    The "automakers" are the first ones to use offshore labor--how do you think they know all of your designs?
  • by AlanObject ( 3603453 ) on Sunday April 21, 2024 @01:16PM (#64412344)

    Had Musk not performed his swan dive with Tesla over a decade back and committed his entire fortune to an enterprise that nearly every financial sector player predicted (and shorted) was guaranteed to fail, things would have looked a lot different.

    Right up to 2024 and beyond, Auto makers world wide (not just U.S.) would still be sending out position statements to the effect: "Fully electric vehicles remain a interesting subject for more study, which shows they are simply not economically viable at the present level of technology." Then: "We are looking new Eco-friendly fuel sources that might cut carbon emissions by as much as 15%. "

    That is where they would be. You know it. In 2024.

    In the mean time, the command economy of China would be cranking out endless swarms of little crappy battery vehicles by the millions. Scooters, bikes, and little shit-boxes the U.S. market would sneer at. But they would fulfill their function and their consumers would know exactly what range they could get for how much money and nobody would be whining about panel gaps or microscopic paint bubbles or touch screens or whatever. Chinese workers would get to work reliably.

    Somehow Musk seems to have little trouble selling Model 3/Y into China, and that while slamming it out toe-to-to with BYD. Anyone care to say how that happens? It seems pretty clear how it does but the real question is does the Dept of Commerce and their auto-maker clients know it?

    • While the analogy isn't entirely correct, it's my impression that Tesla's cars are the equivalent of BMWs in country, at least for electric vehicles.

      So BYD can be like, say, Toyota. Once you're high enough economically, getting a Tesla for appearance's sake starts becoming a thing. Or maybe you actually need the extra capabilities.

      • I think you're overstating Tesla's quality of product. In that regard they're more like Hyundai from 20 years ago.

        • by Lehk228 ( 705449 )
          BMW is not reliable, it's very unreliable it is just expensive and a status symbol, just like a tesla
        • by MobyDisk ( 75490 )

          He did not make a statement about quality, he made a statement about perception. It may be changing now, but as recent as 2022, owning a Tesla was a status symbol in China.

  • Making your future dependent on old, obsolete and dangerous tech is not that smart a move. Who would have thought? If these traitors to the species had not mainly stayed on fossil fuels, there would not be any "threat from China".

  • Threatened? (Score:5, Interesting)

    by molarmass192 ( 608071 ) on Sunday April 21, 2024 @01:27PM (#64412376) Homepage Journal

    Ford and GM have been crowing that consumers don't want EVs. So what harm can possibly come from letting China flood the market with EVs nobody wants? If Ford and GM are right, the Chinese makers will be shooting their own foot. However, I have a feeling Ford and GM are being a little disengenous and the issue might be that people don't want Ford and GM base EVs at $65K a pop.

  • by xlsior ( 524145 ) on Sunday April 21, 2024 @01:27PM (#64412378) Homepage
    Just remember: Japanese cars used to be a joke too, until they weren't.
    • Re: (Score:3, Interesting)

      by drinkypoo ( 153816 )

      It should have been obvious in when the 240Z gave the same performance as the Corvette for half the price that the Japanese were going to dominate.

      Now here we are with only China offering affordable EVs...

  • by MpVpRb ( 1423381 ) on Sunday April 21, 2024 @01:46PM (#64412432)

    ..outsource manufacturing of almost everything to China as long as it has American branding, but a Chinese brand is bad?
    American manufacturers did this to themselves

  • China flooded world markets of just about everything else, from electronics to housewares & furniture, tools, toys, clothes, bicycles, you name it, thanks to all those wall street tycoons that don't give a damn about anyone or anything other than their own profits
  • The Fossil Fuel Industry and their Enablers (hence Fossilistas) fought against solar panels and China dominates the market. Wind Turbines, ditto. Consider all the Republican attacks on electric cars.

    It's not Evil China, it's the Fossilistas keeping the US from competing.

  • by sphealey ( 2855 ) on Sunday April 21, 2024 @01:58PM (#64412490)

    Incumbent US-focused auto makers/sellers, whether HQ'd in the US or elsewhere, should be worried about their own collective abandonment of the market for entry-level cars and small cars in general. The idea that young person can jump directly from a bicycle or driving the family junker to buying a $60,000 SUV with no entry point in between is clearly not sustainable, but that's where the current crop of automakers is headed. So yes, if they continue down that path they should be concerned about new competitors who have figured out how to make affordable and regulatory-compliant small cars.

    • by havana9 ( 101033 )
      There are some weel'estabilished Japanese brands that had figured out how to make affordable small cars, because in their internal market they are making them, due the Japanese regulations. Most four seaters have a funny look, but I think that the Suzuki Jimny it's cool and has impressive off road capabilities, but the two-seaters, like the Toyota Coper are cool cars.
  • Easy access to lithium due to some agressive business tactics. Now using it to vertically integrate it in car production...
    They sure know how to do macro-economic business there in China. Not bad for a communist country.
    • It hasn't paid more than the occasional token statement towards being communist for decades now. It's still statist and authoritarian, of course, but it isn't communist.

  • Oh sure, your job is gone, along with your house, marriage, retirement, family and dignity, but it's a global market now.

    You're competing with teenage workers hiding behind a manipulated currency who live eight to a room while you have to stack four figures a month for a crackerbox apartment 70 minutes from work and go pedal to the floor seven days a week to keep your credit score above 600.

    If you listen real careful-like, you'll hear your neighbors. They're living eight to a room too. They're all paid in c

  • For the last 40 years, china has been at work destroying manufacturing foreign nations (which is a big part of why they are the world's worst polluter of all times).
    They are somewhat copying Japan's and S. Korea's approach to their build-ups. Basically, high tariffs, heavy subsidies, then once up to par or better then others, heavy exports after dropping subsidies. The difference is that when China gets to the last part, they continue to subsidize, and the government makes heavy use of controlling the comp
  • The average age of cars on the road in the US is 12.5 years. In part it is because they are more durable than they used to be, and in part it is because fixing them is cheaper than buying a new one.

    If very cheap Chinese EV's are available the economics of repairing and buying used will change. Most people will prefer to buy a new one rather than repair an old one. Cars will just be another cheap disposable consumer appliance. I doubt this will be a net positive for the environment

  • by Anonymous Coward
    Americans previously:
    China bad because communism! Capitalism is the answer!

    Americans after China does capitalism better than the US:
    Waaaaah!!!! We can't compete! Sanctions!

"Yes, and I feel bad about rendering their useless carci into dogfood..." -- Badger comics

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