Chinese EVs will take over the world?

[Midpack]

They've taken over many industries already, could cars be yet another? I am just watching development (not predicting anything yet), but we've seen this movie before with Japanese cars - once laughed at in the USA.
There are several articles, excerpts from just one.

A few years ago, the cars coming out of China were the object of derision. But times have changed, and as with most other areas of technology, China has caught up with the West’s automotive design abilities and even overtaken, with one area of particular note: electric vehicles. By 2019, there were already 2.58 million battery electric vehicles (BEVs) in China, compared to just 0.97 million in Europe, and 0.88 million in the USA, according to the International Energy Agency. China also has more home and work chargers than any other part of the world, more public slow chargers than the rest of the world put together, and 82% of the global fast charger installations.

Take the Xpeng P7, for example. This looks like an affordable Tesla TSLA +2.4% Model 3 alternative. The P7 boasts 0-62mph acceleration in just 4.3 seconds and a NEDC driving range of up to 440 miles. It even looks quite nice, and some versions have NVIDIA NVDA -0.1%’s Drive AGX Xavier autonomous driving platform built in. Yet it’s expected to cost a mere $36,000.

BYD Auto, which is 25% owned by Warren Buffett’s Berkshire Hathaway BRK.B -0.5%, produces lots of different electric vehicles but the one receiving the most interest currently is the Han, a luxury sedan. The long-range version has a Tesla Model S-rivalling 376-mile range while the high-performance option can hit 62mph in 3.9 seconds – not as fast as a Model S Performance but still highly commendable. Prices will range from $32,800-$40,000.

Chinese cars didn’t feel like competition for European and American brands when they couldn’t compete on quality, but many of these examples have a specification and design that’s close enough, at a much lower price – much like when Japanese cars took the world by storm in the 1970s and 80s. China has some major advantages that have put it ahead in the EV supply game. China is the world’s largest producer of lithium, reaching over 60% of the world’s supply in April 2019, and still controlled 51% of global chemical lithium at beginning of 2020. In contrast, the US contributes just 2% of the world lithium supply. China also controls 62% of global chemical cobalt and 100% of spherical graphite. These are all the main component elements in the lithium-ion battery technology that dominates EVs as their power source.

If it was a pure free market based on value for money, Chinese electric cars would be giving European and American manufacturers sleepless nights already. But it’s likely that politics and economic protectionism will keep them at bay for a while. How long it will be before the dam breaks and Chinese EVs flood in is uncertain, but it probably won’t be possible to hold them back forever.

https://www.forbes.com/sites/jamesm...er-the-world--if-we-let-them/?sh=3eeea7056a12

 

[Qs Laptop]

Tesla is the currently the world leader in EV's. However, the Chinese EV makers are right on their heels. A couple of other Chinese EV companies to watch are Li Auto and NIO. NIO makes luxury cars and Li Auto is squarely aimed at the growing Chinese middle class.

There are dozens and dozens (hundreds?) of Chinese EV makers but there is a market shakeout happening. The big four right now are NIO, Xpeng, BYD, and Li Auto. I know NIO has government backing and I think all three of the other companies do as well.

I read that BYD has plans to export their cars to Australia, Europe, and the USA. NIO is exporting to Norway and plans to export to Australia and New Zealand. Li Auto is exporting to Norway and looking to build a manufacturing facility in Europe. Yes, it's just a matter of time before Chinese EV's are a huge player in US sales.

[Disclaimer: I own stock in Tesla, NIO, and Li Auto.]

 

[Mr. Tightwad]

Tesla is the currently the world leader in EV's. However, the Chinese EV makers are right on their heels. A couple of other Chinese EV companies to watch are Li Auto and NIO. NIO makes luxury cars and Li Auto is squarely aimed at the growing Chinese middle class.

There are dozens and dozens (hundreds?) of Chinese EV makers but there is a market shakeout happening. The big four right now are NIO, Xpeng, BYD, and Li Auto. I know NIO has government backing and I think all three of the other companies do as well.

I read that BYD has plans to export their cars to Australia, Europe, and the USA. NIO is exporting to Norway and plans to export to Australia and New Zealand. Li Auto is exporting to Norway and looking to build a manufacturing facility in Europe. Yes, it's just a matter of time before Chinese EV's are a huge player in US sales.

[Disclaimer: I own stock in Tesla, NIO, and Li Auto.]

Over 400 Chinese EV makers. Some are destined for bankruptcy. Others will flourish. We will be seeing Chinese EV's here in the US before long.

 

[Bamaman]

Sounds as if some tariffs are in order.

My bet is on Toyota as they've already got a head start on EV with hybrids that are just incredible in quality and durability. And they know how to build a car.

Not all of the EV makers, including Tesla, can compete with Toyota in building a car.

 

[Car-Guy]

Not sure if it will be China or some other countries (maybe several) but they way things are going, it won't be the US.

 

[Starsky]

Foreign direct investment in China is having a rough month. BlackRock fund has a fifth of its assets exposed to China’s real estate sector, much of it junk bonds. At the same time, China's energy sector is collapsing under central planning, with random, unannounced blackouts nationwide. China will let their offshore debt holders take a beating - there will be no bailouts for U.S. holders of Chinese Evergrande (or any other Chinese) debt.

It remains to be seen if the Chinese miracle can survive long enough to be competitive building EVs. They seem much more interested in inviting Taiwan. I foresee Western businesses leaving China for greener pastures as China becomes a more and more closed and economically dysfunctional society.

 

[GTFan]

We will be seeing Chinese EV's here in the US before long.

Folks have been saying this for years now, why aren't they here?

 

[Montecfo]

I own Li. Will see how it goes. There will be carnage for sure.

 

[brett]

Competition is good.

Just think of how some North American auto manufacturers started to improve when the the differences in quality between imports and NA brands hit home to many people.

 

[OldShooter]

Sounds as if some tariffs are in order. ...

You want us to pay more for our EVs?

 

[aja8888]

Folks have been saying this for years now, why aren't they here?

1. maybe not able to meet NHTSA safety standards?
2. no dealer network set up?
3. pricing not good due to import tariffs?
4. there may be other reasons..

 

[Chuckanut]

I have a hard time seeing any authoritarian government replacing the USA as the world leader in new advanced tech. They simply won't tolerate anybody in their country getting too powerful. Look at Russia and China these days. Any person who gets to powerful is cut down to size that the dictator/leader thinks is best. IOW, they will kill (or at least hobble) the goose that lays the golden eggs.

If China overtakes the USA it will be because the USA shot itself in the foot.

 

[robnplunder]

Sounds as if some tariffs are in order.

My bet is on Toyota as they've already got a head start on EV with hybrids that are just incredible in quality and durability. And they know how to build a car.

Not all of the EV makers, including Tesla, can compete with Toyota in building a car.

I've heard Japan has started late in the EV race. I'd bet on Hyundai over Toyota. IMO (I bought and owned 4 Hyundais after buying a Toyota), Hyundai cars' quality is better than Toyotas. I am amazed they are still being sold at a cheaper price than their Japanese counterpart (not like Samsung TV overtaking Sony). Maybe a decade later, we'd buying Hyundai cars at a premium.


"Made In China" stuff has been getting better in quality. I'd think their EV would be good enough for any market. ( I've bought some quality "MIC" home tools from Walmart. They were dirt cheap but work "good" enough and haven't broken down. )

 

[OldShooter]

… “Made In China” stuff has been getting better in quality. I’d think their EV would be good enough for any market. ( I’ve bought some quality “MIC” home tools from Walmart. They were dirt cheap but work “good” enough and haven’t broken down. )

Most of us are old enough to remember that postwar Japan had a reputation for producing low quality junk and copycat products. Not so much now!

IMO China is going through the same evolution that Japan went through with learning enhanced by hacking/theft of intellectual property and the country held back by its political system. But in the end, again IMO, they will be a worthy worldwide competitor just like Japan is.

 

[Chuckanut]

Most of us are old enough to remember that postwar Japan had a reputation for producing low quality junk and copycat products. Not so much now!

IMO China is going through the same evolution that Japan went through with learning enhanced by hacking/theft of intellectual property and the country held back by its political system. But in the end, again IMO, they will be a worthy worldwide competitor just like Japan is.

Perhaps, but Japan after WW2 was not led by authoritarian leaders who wanted to hold onto power at all costs (especially if other people pay the cost).

 

[explanade]

Sounds as if some tariffs are in order.

My bet is on Toyota as they've already got a head start on EV with hybrids that are just incredible in quality and durability. And they know how to build a car.

Not all of the EV makers, including Tesla, can compete with Toyota in building a car.

Toyota has been dragging their feet on EVs.

They invested a lot into low-emission gas engines to use with their hybrids.

They have NOT invested enough on battery capacity or acquiring battery supply chains.

They've been lobbying heavily against EV mandates, like states and countries requiring only EVs sold as new cars by 2035 or even 2030.

 

[OldShooter]

Perhaps, but Japan after WW2 was not led by authoritarian leaders who wanted to hold onto power at all costs (especially if other people pay the cost).

Yes, which is why I said: "country held back by its political system." Most of China's economic progress occurred after the CCP embraced capitalism, though lately Xi seems determined to take some steps backward. This too shall pass; if the CCP can't deliver a roaring economy that leaves an opening for political unrest. Xi's attacks on corruption are also intended to head off unrest.

But at the bottom, the PRC needs to export and to export they have to deliver products that are competitive in quality. So they will learn just as the Japanese did.

 

[explanade]

I think it would be a long slog for Chinese brands to establish themselves here.

First is making Americans aware of the brands. Even if they fare well in reviews in comparison to other brands, buyers may want to see network of dealerships and service centers.

I personally could do without dealers, which is what Teslas is attempting. But for new brands, you want confidence that they can service your vehicle or warrantee it.

Chinese brands would probably try to underprice compared to other brands. Will that entice enough people?

Right now, the antipathy vs. China is high, so they have a high bar to clear, even if they show a clear price advantage.

They may have better luck providing supplies -- batteries, motors, etc. -- to Western brands rather than selling finished EVs to Americans.

They may get some traction in Europe, where people may be more price-sensitive.

They also are more accepting of these tiny cars and some Chinese brands are pushing some of these which are under $20k or even $15k before tax incentives.

 

[OldShooter]

I think it would be a long slog for Chinese brands to establish themselves here.

First is making Americans aware of the brands. Even if they fare well in reviews in comparison to other brands, buyers may want to see network of dealerships and service centers. ...

Hyundai and Kia seem to have done it. Hyundai entered the US market in 1986. Kia in 1992. So, "long slog" may be 20 years?

Time will tell.

 

[explanade]

Hyundai and Kia seem to have done it. Hyundai entered the US market in 1986. Kia in 1992. So, "long slog" may be 20 years?

Time will tell.

Yeah it's taken them a long time. They've mostly been known as bargain brands.

Hyundai created an upscale brand, Genesis, to separate from their mainstream, high-volume cars.

But with the onset of EVs, Hyundai and Kia both have some promising BEVs coming soon.

 

[CaptTom]

I have a hard time seeing any authoritarian government replacing the USA as the world leader in new advanced tech.

Without blaming either party, I sometimes wonder whether our (US) current two-party system is functioning that much better than some one-party systems. It's starting to feel less like a democracy and more like a kleptocracy. That can't be good for our long-term economy.

 

[Midpack]

I think it would be a long slog for Chinese brands to establish themselves here.

First is making Americans aware of the brands. Even if they fare well in reviews in comparison to other brands, buyers may want to see network of dealerships and service centers.

I personally could do without dealers, which is what Teslas is attempting. But for new brands, you want confidence that they can service your vehicle or warrantee it.

Chinese brands would probably try to underprice compared to other brands. Will that entice enough people?

Right now, the antipathy vs. China is high, so they have a high bar to clear, even if they show a clear price advantage.

They may have better luck providing supplies -- batteries, motors, etc. -- to Western brands rather than selling finished EVs to Americans.

They may get some traction in Europe, where people may be more price-sensitive.

They also are more accepting of these tiny cars and some Chinese brands are pushing some of these which are under $20k or even $15k before tax incentives.

It will be a long slog, but China has already demonstrated their patience in other markets, from the bottom up.

All barriers that Honda, Toyota, Nissan et al had to overcome back in the 70s and 80s. And Americans, especially the big three, scoffed at the Japanese cars - until the damage to their market share was already well established...

Part of the reason I posted, as the Chinese EV makers are now introducing larger cars with more advanced tech and creature comforts. It's not just tiny cars anymore.

 

[Christine]

After owning a Tesla for a while there is no doubt in my mind that EVs will take over the world.


From what I have learned the limiting factor in EV growth is battery availability. Almost all car manufacturers design the cars themselves but buy batteries from 3rd party suppliers. The exception is Tesla who have started to make their own. And have long term contracts with battery makers such as Panasonic and others.



So Tesla alone have almost half of the capacity in the world. On long term contracts. And they don't have enough. So when all the other brands want to ramp up where will they get their batteries from? Whatever is left. And from new battery factories being planned.



The challenge with new battery factories is that even if raw materials such as lithium is plentiful on earth there is not that much mining capacity. And building new mines is a very slow process.


So I wonder if all the car factories have planned ahead and reserved battery capacity and raw material supplies? I somehow doubt it. And expect shortages and rapidly growing prices after bidding wars.


In my opinion Tesla is furthest along here - the chinese somewhere behind and all the well known brands in the rear.

 

[OldShooter]

... Almost all car manufacturers design the cars themselves but buy batteries from 3rd party suppliers. The exception is Tesla who have started to make their own. ...

IIRC it's a JV with Panasonic, so whatever is learned will quickly be available in the marketplace.

The current battery issues are primarily manufacturing capacity and raw materials availability. The main risk for these huge capital investments is a technology breakthrough that significantly improves energy density or, maybe less impact, makes the batteries fireproof or much cheaper to manufacture. So Tesla's investments are a two edge sword, getting captive manufacturing but risking that the investment will be obsoleted. There are certainly thousands of industrial and academic researchers working to make this happen. Only time will tell whether Tesla's in-house capability was a good move.

 

[REWahoo]

After owning a Tesla for a while there is no doubt in my mind that EVs will take over the world.

From what I have learned the limiting factor in EV growth is battery availability.

Add to that limiting factor the current lack of generating capacity to meet future EV demands, the already highly stressed grid systems, along with solving how apartment dwellers will charge their vehicles.

Of course all these obstacles/limits can be overcome, but they will all be a drag on growth to one degree or another.