New Energy Vehicles (NEVs) in China

Quite conflicted if this is a good or a bad thing. (Renault developing cars in China for Europe)



While China does get R&D funds, good publicity, and overall greater presence in supply chains; the downside is technology and skill leakage. It seems from the article that Shanghai R&D center is pretty small and will work with European R&D teams. Maybe they are using this Shanghai R&D center to transfer tech, skills, and culture?

Now that China is a big player in various industries, it has to think carefully about issues like these. The whole Korean memory hegemony was built by hiring Japanese workers. Korean firms strategically hired Japanese workers who worked with Korean colleagues, who learnt and trained under their Japanese counterparts.

coolgod said:

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EU tried to cut a side deal with some Chinese EV manufacturers and backstab the Chinese government negotiators
Rumors suggest the companies are Volvo owned by Geely and Spotlight owned by Changan.

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EU released the names of the traitors
Not surprised by SAIC btw, they already tried some funny business in India and are getting investigated.

jli88 said:

Quite conflicted if this is a good or a bad thing. (Renault developing cars in China for Europe)

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While China does get R&D funds, good publicity, and overall greater presence in supply chains; the downside is technology and skill leakage. It seems from the article that Shanghai R&D center is pretty small and will work with European R&D teams. Maybe they are using this Shanghai R&D center to transfer tech, skills, and culture?

Now that China is a big player in various industries, it has to think carefully about issues like these. The whole Korean memory hegemony was built by hiring Japanese workers. Korean firms strategically hired Japanese workers who worked with Korean colleagues, who learnt and trained under their Japanese counterparts.

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Pretty bullish of you to think Renault could execute.

The development cycle in Western automakers takes years, if not a decade at times. Don't be afraid of competition.

tphuang said:

Here is that thing, VW still getting 1/3 of its sales from China so far this year. So, the Europeans have spent months going berserk and using up air time with their China EV Tariff nonsense. Yet, BYD sells more cars in Singapore than Germany. The Euros refuse to acknowledge that they have far more to lose if they get pushed out of the China market than China has to lose if it loses access to Europe market. Many of the EVs exported to Europe are from European brands. So without access to this, VW is getting hammered. hence the job cuts and factory closures in Germany.

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Sure, but here's another way to look at it. European manufacturers have JVs in China. Retaliatory tariffs can hurt EU manufacturers and withdraw from China but ultimately those are factories working in China employing Chinese workers. From EU's perspective it's better in the long-term to have EU automakers withdraw from China, even better, to have Chinese automakers build factories in Europe, building and training the next generation of Europe's auto industry.

If VW or BMW or Benz is in danger of collapse, they can always be bailed out.

"China tells carmakers to pause investment in EU countries backing EV tariffs, sources say"

HighGround said:

Sure, but here's another way to look at it. European manufacturers have JVs in China. Retaliatory tariffs can hurt EU manufacturers and withdraw from China but ultimately those are factories working in China employing Chinese workers. From EU's perspective it's better in the long-term to have EU automakers withdraw from China, even better, to have Chinese automakers build factories in Europe, building and training the next generation of Europe's auto industry.

If VW or BMW or Benz is in danger of collapse, they can always be bailed out.

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those factories hire low paying Chinese workers. The profit and sales fund the R&D and high paying jobs in Germany. The profit from their operations help their stock market, which then help the European investor and banking class and retirees.

Let's say SAIC and FAW downscale significantly and BYD grows significantly. In this case, BYD does even more R&D. You have a national champion who is well run and capable to developing newer tech. And it helps train domestic engineers for auto and other sectors. It helps the stock market and more.

I don't know why people like yourself are so content with JVs hiring low paid working class when that doesn't move things up the value chain.

tphuang said:

those factories hire low paying Chinese workers. The profit and sales fund the R&D and high paying jobs in Germany. The profit from their operations help their stock market, which then help the European investor and banking class and retirees.

Let's say SAIC and FAW downscale significantly and BYD grows significantly. In this case, BYD does even more R&D. You have a national champion who is well run and capable to developing newer tech. And it helps train domestic engineers for auto and other sectors. It helps the stock market and more.

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Yes, it's a value add for European funds and corporate bottom lines, not necessarily European workers.

tphuang said:

I don't know why people like yourself are so content with JVs hiring low paid working class when that doesn't move things up the value chain.

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Jobs are jobs. If there are better jobs available elsewhere those JVs wouldn't have been able to hire people in the first place.

Also, I wasn't "content" with this or that, I was explaining why from EU's perspective, it may in fact be advantageous to let China kick European automakers out of China.

HighGround said:

Pretty bullish of you to think Renault could execute.

The development cycle in Western automakers takes years, if not a decade at times. Don't be afraid of competition.



Sure, but here's another way to look at it. European manufacturers have JVs in China. Retaliatory tariffs can hurt EU manufacturers and withdraw from China but ultimately those are factories working in China employing Chinese workers. From EU's perspective it's better in the long-term to have EU automakers withdraw from China, even better, to have Chinese automakers build factories in Europe, building and training the next generation of Europe's auto industry.

If VW or BMW or Benz is in danger of collapse, they can always be bailed out.

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Definitely don't be afraid of competition.

The problem with your scenario. The European factories are underutilized from the get go. If you shift the Chinese production to Europe, the cars are no longer price competitive. Trying to sell an Audi Q4 at 400K RMB? That is simply a joke. It is at best a 200K RMB car. You aren't going to get the sales to keep the factories running.

The car sales in Europe have been declining decades now. If people are concerned about the gloomy articles written about China's car industry and overcapacity, then things are far worse in Europe.

This is a ten year old article:

Things are not better now. This is why VW wants to close some German plants completely.

coolgod said:

EU released the names of the traitors
Not surprised by SAIC btw, they already tried some funny business in India and are getting investigated.

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The Chinese government should probably level out the duties on these cars to teach these companies a lesson. If the EU assigns 10% tariffs on SAIC cars because they complied with their "investigation" and say Great Wall gets 20% tariffs for not complying, then the Chinese government should just assign export duties of 10% to SAIC and screw them over.

HighGround said:

Yes, it's a value add for European funds and corporate bottom lines, not necessarily European workers.



Jobs are jobs. If there are better jobs available elsewhere those JVs wouldn't have been able to hire people in the first place.

Also, I wasn't "content" with this or that, I was explaining why from EU's perspective, it may in fact be advantageous to let China kick European automakers out of China.

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No, it’s not just a value added for European funds. Half of the profit from these JVs go to Europe and the other half get wasted in useless uncompetitive firms like SAIC.

Jobs are jobs don't work in the present day Chinese economy. China no longer has massive number of non-college educated workers that it needs to find employment. It has a whole bunch of college educated STEM grads that need to find research jobs and higher end technical jobs.

Our goal here is to not care about EU's perspective. Of course, EU doesn't want its national champions to lose. Who would want that. But the idea that having BYD beating SAIC & FAW JVs is not good a thing is ludicrous.

You can't escape the trappings of middle income economy without taking over higher value added design jobs.

BYD numbers from first 3 quarters in greater details.

btw, on SAIC. Screw them. I can't wait until they lose some of their export sales and have to cut back. They've had 3 decades of profitability from these JVs and did nothing with that money.