New Energy Vehicles (NEVs) in China

[tphuang]

btw, the entire 15k order thing came from this BYD Deputy head of Brand. & PR. It's 15k just for the cheap model.

https://twitter.com/i/web/status/1625179904097632269

And he also talked about the brilliance of Dolphin, which I agree with but also added my thought on the even more brilliant Seagull. Seagull is going to be a real game changer. A real EV that's large enough for a family of 4 and is safe, affordable, has enough range for day to day life. On top of that, it's cheaper than ICE cars.

https://twitter.com/i/web/status/1625192483696025600

Shanghai motor show is in 2 months. We really can't get there soon enough. I don't like BYD keeping us waiting on this great car.

 

[luminary]

I have a few friends working in senior Ford positions. There has not been any word of developing battery tech there. Ford business model is all about outsourcing to OEMs and letting them compete with each other, something they learned from Toyota in the 70s. Ford does not have much engineering talent and most of it is used to do quality control of the OEMs' parts. If CATL is worrying about a US competitor, it will be from other battery suppliers. Which is why CATL should snuff them out in the crib by eating up market share and giving less room to grow.

I hope this rests some fears. Interestingly, US auto companies do not have the same emphasis on vertical integration, which instead seems to me to be a primary feature of tech companies like Amazon, Apple, Tesla and Nvidia.

 

[KYli]

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This is all you need to know. it will not qualify for the sourcing rules for the batteries, which means it will still be using CATL's supply chain in Asia (mostly in China). They are license the tech. You may recall from China's auto JVs how well the local Chinese firms were able to move beyond Western tech. hint: not well at all. So, why are you concerned about losing tech to Ford of all companies? They are just licensing the tech while being entirely dependent on CATL's supply chain. This is great for China Inc. Knocks the door open to North America while Ford is willing to keep using the Chinese supply chain.

Even more than this, LFP and other battery technology is rapidly changing every year. CATL will keep staying in front of its competitors. If it's worried about certain core tech, just don't share that tech with Ford. but frankly, I don't see anything that important in LFP. What they use in 2023 will be obsolete by 2025.

Given how the US tried to rob TikTok and forced TSMC to setup high end chips plants in the US, I think you might have underestimated the US government's sponsored industry espionage.

Between India and the US, how many Chinese companies were forced out by these governments. How many Chinese companies were forced to either abandon their businesses or sold their businesses as a faction of true worth.

What I see here is Chinese companies don't have plans for worst case scenario when doing business in an extremely hostile environment. They let themselves to be at the mercy of Indian and American government.

 

[tphuang]

Given how the US tried to rob TikTok and forced TSMC to setup high end chips plants in the US, I think you might have underestimated the US government's sponsored industry espionage.

Between India and the US, how many Chinese companies were forced out by these governments. How many Chinese companies were forced to either abandon their businesses or sold their businesses as a faction of true worth.

What I see here is Chinese companies don't have plans for worst case scenario when doing business in an extremely hostile environment. They let themselves to be at the mercy of Indian and American government.

And did those companies get their tech copied? I don't think so. Let's say, us govt shuts down this factory, then what? Catl didn't build the factory, ford did. What does catl have to loose here?

Catl deserves a very painful death if it somehow allow ford to get ahead of it through tech transfer.

Again, this increase American reliance on Chinese supply chain.

 

[KYli]

And did those companies get their tech copied? I don't think so. Let's say, us govt shuts down this factory, then what? Catl didn't build the factory, ford did. What does catl have to loose here?

Catl deserves a very painful death if it somehow allow ford to get ahead of it through tech transfer.

Again, this increase American reliance on Chinese supply chain.

Xiaomi and Oppo and other Chinese smartphones companies setting up manufacture plants and bringing the whole supply chain to India are an example that these Chinese companies are not smart and shortsighted. Now, Apple and Foxconn have started to move more and more productions to India.

These Chinese companies now are facing fines and Indian government could just find an excuse to force them out. Basically, Chinese smartphone companies bring the supply chain to India and make little or no money and might be forced to packing their bags home. If these Chinese smartphone companies made billions and billions like Apple I could understand but by making peanut and risk of being fines and kicking out is plain stupid.

Exporting batteries to the US, setting up manufacture plants in Mexico with full control are all viable plans. Giving Ford the tech to make the batteries with very little control over day to day operation is risky. IRA is aimed at cutting out the Chinese supply chain. It is wishful thinking to believe by taking such risk would be beneficial to CATL in the long run.

 

[tphuang]

Xiaomi and Oppo and other Chinese smartphones companies setting up manufacture plants and bringing the whole supply chain to India are an example that these Chinese companies are not smart and shortsighted. Now, Apple and Foxconn have started to move more and more productions to India.

They made boatload of money in India. So what if they got a couple of plants confiscated. They made way more money than that.

These Chinese companies now are facing fines and Indian government could just find an excuse to force them out. Basically, Chinese smartphone companies bring the supply chain to India and make little or no money and might be forced to packing their bags home. If these Chinese smartphone companies made billions and billions like Apple I could understand but by making peanut and risk of being fines and kicking out is plain stupid.

None of this has anything to do with the Ford deal.
Every Chinese company knows the risk of going into India, but they clearly still do it. Clearly there are money to be made. Don't pretend you know better than them.

Exporting batteries to the US, setting up manufacture plants in Mexico with full control are all viable plans. Giving Ford the tech to make the batteries with very little control over day to day operation is risky. IRA is aimed at cutting out the Chinese supply chain. It is wishful thinking to believe by taking such risk would be beneficial to CATL in the long run.

Again, what's the risk in allowing Ford to produce CATL designs? You haven't made a logical argument against it except that you don't like giving away tech. Why don't you actually explain what's the risk to CATL in the long run? Can you make a real argument?

Believe me when I say the US government doesn't like the fact that Ford/CATL got around IRA, but Ford believes the implementation qualifies for IRA based on the law. They got a whole legal team for it and they've been in contact with the Biden administration.

 

[KYli]

They made boatload of money in India. So what if they got a couple of plants confiscated. They made way more money than that.

Xiaomi profit in India was 350 million yuan. Indian government frozen 4.8 billion yuan of Xiaomi's asset which means Xiaomi needs 14 years of profit in order to recoup the loss if the fund got confiscated and we don't even talk about the billion of investment Xiaomi has made over the years in India.

None of this has anything to do with the Ford deal.
Every Chinese company knows the risk of going into India, but they clearly still do it. Clearly there are money to be made. Don't pretend you know better than them.

Both Huawei and ZTE got screwed over hundreds of millions by India. That's why both companies are not active in India. Shanghai Electric provided coal mine's generators and ended up with hundreds millions of unpaid bills etc. Most Chinese vendors got screwed by Indian merchants so badly that they no longer shipped any products to India unless got paid first.

I think your argument is weak. Many companies are too greedy to know better. They think they can outsmart a totally corrupted and hostile system. They are too concern of the potential of Indian market. It is the potential of Indian market that made them to do an irrational decision without taking account to the risks. The profits from India is minuscule compare with the risks.

Again, what's the risk in allowing Ford to produce CATL designs? You haven't made a logical argument against it except that you don't like giving away tech. Why don't you actually explain what's the risk to CATL in the long run? Can you make a real argument?

Believe me when I say the US government doesn't like the fact that Ford/CATL got around IRA, but Ford believes the implementation qualifies for IRA based on the law. They got a whole legal team for it and they've been in contact with the Biden administration.

If that is the case, why don't the US allowed China to produce advance chips and why Taiwan only allowed two to three generations old chips tech to be produced in China.

Biden, Congress and the American public have become obsessed with anything China and Chinese. It doesn't matter if such arrangement is beneficial to Ford or the US or not. As long as they hear it involved China, they would go crazy. We have seemed it with the Virginia Governor first hand.

 

[Tam]

Speaking of Sodium Ion batteries, someday, that capture of Soledar salt mines are going to pay off.

 

[Tam]

that actually would be quite a bit. Bolivia has the largest lithium reserve in the world and they have 21 million tons.

According to this one, China had 4.5 million ton (number 6) as of 2020

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On the other hand, a major lithium deposit was found in the Himalayas last year

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Anytime you are dealing with high up in the mountains like the Himalayas or Kashmir, extraction is actually very problematic. So, I would say that this is good for India, but it might take years before this is commercialized. At this point, we really don't know how things will look in the battery industry by 2030. Other resources like copper, iron, phosophate and graphite are also quite important

We are likely to discover more and more Lithium ores as we go on. Of course, all investment for the extraction and processing must look for the long term, which in turn, favors countries with long term economic plans and pursues them to the hilt.

 

[mossen]

Xiaomi profit in India was 350 million yuan. Indian government frozen 4.8 billion yuan of Xiaomi's asset which means Xiaomi needs 14 years of profit in order to recoup the loss if the fund got confiscated and we don't even talk about the billion of investment Xiaomi has made over the years in India.

With all due respect, Xiaomi isn't a very innovative company in smartphones. They are just leverging China's best-in-class supply chain to offer a good product at an attractive price-point. But that's thanks to the nameless manufacturers in the background. If Xiaomi collapsed tomorrow, its market share would be replaced by Oppo, Vivo etc.

CATL is different. They actually do indigenous innovation. While the US would love to "steal" CATL tech, you underestimate how much the US lacks in terms of skilled technicians and an entire ecosystem to make it happen. It isn't enough to just have a few brilliant professors in chemistry. You need a much larger stack than that and China has invested in the whole ecosystem in a way that the US just hasn't and arguably can't.

I think this is fundamentally based on a misconception on how innovation actually works. Just getting blueprints isn't sufficient. You need what economists like to call "tacit knowledge". It's the same reason why building a jet engine is difficult. There's a good overview of the concept here:

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In short, even if the US wanted to "steal" CATL's secret sauce, they can't. Innovation doesn't work that way. It's also why I don't take accusations of Chinese "IP theft" seriously since it implies it's just a matter of taking something because you want to. If it was that easy, why isn't India or Nigeria doing it? Because it is in fact a lot harder to even just catch up, let alone copy something, from scratch. Ford is on their own here.