China's EV sector is hemorrhaging cash — but government subsidies keep the lights on

[CRSKTN]

https://www.nytimes.com/2023/10/05/business/nio-china-electric-vehicles.html

China's EV sector is hemorrhaging cash — but government subsidies keep the lights on - Autoblog

This New York Times piece examines the lengths to which China will go to capture electric vehicle market share.

www.autoblog.com

 

[Levi]

I hope there will be good BEV from Toyota before the BEV bubble crashes.

 

[carguy420]

As usual, anything China does that's trying to wow people on the surface is usually hiding a shitstorm underneath.

 

[ssun30]

It's Bubble Era JDM on steroids. Cars with crazy specs, luxury features given out for free, toxic price wars and dumping on the international market. But without the QDR of JDM and low cost from suppressed wages and long work hours instead of innovation and efficiency. Tesla Shanghai is considered a worker's paradise in China since they offer living wage, 44-hour work weeks, paid overtime and retirement plans. Tesla!

All the so-called "New Waves (新势力)" are very questionable business with no financial sustainability and products of all show no substance. There are other prices to pay if you buy a 1000PS sports car with only USD 100k. The only

On the other hand, I do hope those Chinese cars stir up competition on the international market so Toyota can stop being so stingy and try to actually compete.

 

[carguy420]

It's Bubble Era JDM on steroids. Cars with crazy specs, luxury features given out for free, toxic price wars and dumping on the international market. But without the QDR of JDM and low cost from suppressed wages and long work hours instead of innovation and efficiency. Tesla Shanghai is considered a worker's paradise in China since they offer living wage, 44-hour work weeks, paid overtime and retirement plans. Tesla!

All the so-called "New Waves (新势力)" are very questionable business with no financial sustainability and products of all show no substance. There are other prices to pay if you buy a 1000PS sports car with only USD 100k. The only

On the other hand, I do hope those Chinese cars stir up competition on the international market so Toyota can stop being so stingy and try to actually compete.

IMO Toyota being stingy is the main reason the other brands with really questionable quality can still sell well, especially in 3rd world countries where Toyota and Daihatsu's compact cars and MPVs are seriously lacking in performance relative to their competitors. Btw, Daihatsu is so stingy that they use the same D-CVT gearbox, with the same gearing, across many different vehicles with wildly different tire outer diameters, so the larger and heavier vehicles riding on larger tires a.k.a. the ones that need strong torque multiplication the most, end up suffering the most.

 

[ssun30]

IMO Toyota being stingy is the main reason the other brands with really questionable quality can still sell well, especially in 3rd world countries where Toyota and Daihatsu's compact cars and MPVs are seriously lacking in performance relative to their competitors. Btw, Daihatsu is so stingy that they use the same D-CVT gearbox, with the same gearing, across many different vehicles with wildly different tire outer diameters, so the larger and heavier vehicles riding on larger tires a.k.a. the ones that need strong torque multiplication the most, end up suffering the most.

Toyota/Daihatsu using outdated parts in developing economies is mainly for logistics. Parts are much easier to come by and these markets are much more sensitive to servicing costs. Toyota thrive in these markets because any road side shop can repair any Toyota for cheap.

 

[mikeavelli]

EU threatening tariffs. It certainly isn’t an even playing field.

https://www.nytimes.com/2023/10/05/business/nio-china-electric-vehicles.html

It also feels like since a battery is way simpler then producing a reliable engine, companies and governments just push into BEV cause it’s easier.

 

[spwolf]

EU threatening tariffs. It certainly isn’t an even playing field.

https://www.nytimes.com/2023/10/05/business/nio-china-electric-vehicles.html

It also feels like since a battery is way simpler then producing a reliable engine, companies and governments just push into BEV cause it’s easier.

here is the problem - big players in China are profitable and are not even importing significant numbers of cars to EU.
IE BYD - now at 4m sales per year, sells only few hundred per month in EU, and is profitable company growing at stupendus pace.

And is hurting all western companies in china by doing that.

Nio in question - is small company barely doing any signficant sales and not selling anything to note outside China. Nobody will care if stock plays like Nio or Xpeng fail, simply because they never were big to begin with.

BYD and Li Auto are growing like crazy, inside China, by taking away sales from German, American and Japanese companies, in China. No tariffs will stop them because they dont export to US or EU.

 

[ssun30]

I don't know why you categorize BYD and Li Xiang together. The latter is yet another New Wave business with questionable future outlook.

When it comes to Chinese EV it's BYD and non-BYD. The former is a truly competitive business that can bring really serious pressure internationally. The rest will fail in a several years.

BYD can be competitive globally even if they pay their workers Tesla level wages. They are full vertical integration and chose the best chemistry. A few years ago people were laughing at them for staying with the "unsophisticated" LFP battery and now LFP is the only practical way for affordable mass market EVs.

They have one big weakness: they actually invested very little into ADAS and "intelligent connectivity" (whatever that means). They are much similar to a traditional car company in that sense compared to New Wave companies. That has allowed them to improve the engineering beneath the sheet metal instead of the all show no substance you see on New Wave cars. Maybe they are just playing it slowly so they can absorb all the IP when they buy those failing New Wave companies.

 

[spwolf]

I don't know why you categorize BYD and Li Xiang together. The latter is yet another New Wave business with questionable future outlook.

When it comes to Chinese EV it's BYD and non-BYD. The former is a truly competitive business that can bring really serious pressure internationally. The rest will fail in a several years.

BYD can be competitive globally even if they pay their workers Tesla level wages. They are full vertical integration and chose the best chemistry. A few years ago people were laughing at them for staying with the "unsophisticated" LFP battery and now LFP is the only practical way for affordable mass market EVs.

They have one big weakness: they actually invested very little into ADAS and "intelligent connectivity" (whatever that means). They are much similar to a traditional car company in that sense compared to New Wave companies. That has allowed them to improve the engineering beneath the sheet metal instead of the all show no substance you see on New Wave cars. Maybe they are just playing it slowly so they can absorb all the IP when they buy those failing New Wave companies.

Sure, BYD is becoming huge player. And again, it is mostly China and few developing countries. Nothing really in Europe. So nothing can stop them.

But Li Auto is actually now selling 40k a month in China with huge growth. Thats more than Xpeng and NIO combined.
Lynk & Co after 5 years is still 50% of that.

If they get to over 1m next year, I believe they are safe.