New Energy Vehicles (NEVs) in China

tphuang · Oct 25, 2022

BYD continues to steam roll everyone in NEV registration for the 3rd week of October.

https://twitter.com/i/web/status/1584846619614158848

Notice how BYD's NEV registration is almost catching up to combined ICE sales of FAW/SAIC-VW. We know FAW is going to work with BYD to survive. I'm not sure what SAIC's strategy is.

If you look at this, the obvious conclusion is that Li Auto/XPeng/LeapMotor are in trouble. When you are only selling 1000 cars a week, you are not going to last that long.

The reality is that the market size is finite. When BYD increases the production this much, some of the other NEV producers will be left in the dust. Not all the losses will come from VW and Toyota.

BYD skyrail for the world. So far, just building them in China and Brazil. BYD would love to build them in other countries also.

https://twitter.com/i/web/status/1584487093451239432

Frigate 07 production has started

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BYD battery box continues to sell well in Australia

https://twitter.com/i/web/status/1584499797297221634

Seems like Germany and Australia are two of the largest market for this product. Makes sense with the solar expansion.

Ford is definitely still prioritizing the Chinese market

https://twitter.com/i/web/status/1584620777437278208

I wish them the best. Electric Pickup will have a lot of competition.

tphuang · Oct 25, 2022

So I listen to these 2 Electric Viking videos today and they are okay, but made me think about this protectionism issue that Chinese automaker will face in Europe. It is one thing to export to countries with no domestic branded automakers. It is quite a different thing to export to places with large domestic ICE industry. As Sam said in there, there is already a 10% tariff on Chinese cars going into Europe (it’s 25% to America) and a slightly higher tariff from Europe to China. I don’t think it will stop Chinese automakers if the tariff goes up to 20%. I mean, BYD will still make healthy profit selling Atto 3/Han/Tang at the prices they are advertising even if tariff is 20%.

But the bigger issue is the fear that Western gov’t might put in bigger restriction on Chinese automakers in fear of losing domestic industries. BYD’s first attempt to counter this is by building factories in Thailand and Uzebekistan. The latter can get subsystem really easily from China and then freight whole cars through China-Europe railway to European market without the tariffs. Long term, they have to build CKD assembly and battery factories in Europe. There is no alternatives if they want to sell in Europe. And no, you can’t just build everything in Hungary. There isn’t enough skilled labor for that. You also risk losing EU if Hungary really pisses off the EU.

The other thing I realized is that Tesla is a really important part of the equation here. Since Tesla is an American company, the Europeans can’t stop Tesla from selling there. They also can’t compete with Tesla in cost and assembly. As such, they have to either continue to lose money on EV production or just go with the Chinese supply chain. I think that’s why you are seeing VW relying so much on China for advancing its AV/EV goals. I think that’s also why there is so much rumbling about VW utilizing BYD’s battery and dual motor technology. As a whole, German auto industry is getting deeper and deeper in bed with China. They are doing this because they have no other way to compete.

So eventually, Stellantis and Renault are going to have to rely on Chinese supply chain if they want to compete. That’s a huge win for China Inc. Similarly, BYD would want Toyota to keep producing cars with BYD technology. While they all start off as cars for the Chinese market, I don’t see how it will stay that way. Eventually, Tesla will sell more in Japan. BYD itself will sell more in Japan. How does Toyota compete without bringing its BYD tech back to Japan?

And back to the first video, I think it’s quite obvious NIO/XPeng/Li Auto will have to cut prices. They will not all survive. Maybe none of them will survive. Ultimately, BYD getting to 40% market share in China will kill a lot of domestic players. Maybe they get to 50% with their own production + JVs with FAW/SAIC. Maybe they get to even higher than that with foreign brand using their tech. That’s how I see the direction of Chinese auto market.

NiuBiDaRen · Oct 25, 2022

tphuang said:
So I listen to these 2 Electric Viking videos today and they are okay, but made me think about this protectionism issue that Chinese automaker will face in Europe. It is one thing to export to countries with no domestic branded automakers. It is quite a different thing to export to places with large domestic ICE industry. As Sam said in there, there is already a 10% tariff on Chinese cars going into Europe (it’s 25% to America) and a slightly higher tariff from Europe to China. I don’t think it will stop Chinese automakers if the tariff goes up to 20%. I mean, BYD will still make healthy profit selling Atto 3/Han/Tang at the prices they are advertising even if tariff is 20%.

But the bigger issue is the fear that Western gov’t might put in bigger restriction on Chinese automakers in fear of losing domestic industries. BYD’s first attempt to counter this is by building factories in Thailand and Uzebekistan. The latter can get subsystem really easily from China and then freight whole cars through China-Europe railway to European market without the tariffs. Long term, they have to build CKD assembly and battery factories in Europe. There is no alternatives if they want to sell in Europe. And no, you can’t just build everything in Hungary. There isn’t enough skilled labor for that. You also risk losing EU if Hungary really pisses off the EU.

The other thing I realized is that Tesla is a really important part of the equation here. Since Tesla is an American company, the Europeans can’t stop Tesla from selling there. They also can’t compete with Tesla in cost and assembly. As such, they have to either continue to lose money on EV production or just go with the Chinese supply chain. I think that’s why you are seeing VW relying so much on China for advancing its AV/EV goals. I think that’s also why there is so much rumbling about VW utilizing BYD’s battery and dual motor technology. As a whole, German auto industry is getting deeper and deeper in bed with China. They are doing this because they have no other way to compete.

So eventually, Stellantis and Renault are going to have to rely on Chinese supply chain if they want to compete. That’s a huge win for China Inc. Similarly, BYD would want Toyota to keep producing cars with BYD technology. While they all start off as cars for the Chinese market, I don’t see how it will stay that way. Eventually, Tesla will sell more in Japan. BYD itself will sell more in Japan. How does Toyota compete without bringing its BYD tech back to Japan?

And back to the first video, I think it’s quite obvious NIO/XPeng/Li Auto will have to cut prices. They will not all survive. Maybe none of them will survive. Ultimately, BYD getting to 40% market share in China will kill a lot of domestic players. Maybe they get to 50% with their own production + JVs with FAW/SAIC. Maybe they get to even higher than that with foreign brand using their tech. That’s how I see the direction of Chinese auto market.

How do you see Hyundai/Kia faring in the long term? They seem to be a bit better off than the Japanese.

AndrewS · Oct 25, 2022

tphuang said:
So I listen to these 2 Electric Viking videos today and they are okay, but made me think about this protectionism issue that Chinese automaker will face in Europe. It is one thing to export to countries with no domestic branded automakers. It is quite a different thing to export to places with large domestic ICE industry. As Sam said in there, there is already a 10% tariff on Chinese cars going into Europe (it’s 25% to America) and a slightly higher tariff from Europe to China. I don’t think it will stop Chinese automakers if the tariff goes up to 20%. I mean, BYD will still make healthy profit selling Atto 3/Han/Tang at the prices they are advertising even if tariff is 20%.

But the bigger issue is the fear that Western gov’t might put in bigger restriction on Chinese automakers in fear of losing domestic industries. BYD’s first attempt to counter this is by building factories in Thailand and Uzebekistan. The latter can get subsystem really easily from China and then freight whole cars through China-Europe railway to European market without the tariffs. Long term, they have to build CKD assembly and battery factories in Europe. There is no alternatives if they want to sell in Europe. And no, you can’t just build everything in Hungary. There isn’t enough skilled labor for that. You also risk losing EU if Hungary really pisses off the EU.

Hungary aren't going to get kicked out of the EU

So restrictions on Hungarian factories contravene fundamental principles enshrined in European Law on a Single market with freedom of movement/investment.

tphuang · Oct 25, 2022

I have not heard of these guys before, but Weichai has put 500 NEV light truck into service now

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speaking of which, it seems like BYD also has a electric light truck coming up

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BYD/ADL all be displaying new electric bus in Euro bus expo

https://twitter.com/i/web/status/1584786933976338432

Finally, a belated article from Pan daily discussing the Chinese battery maker expansion into Europe. I mean I think it will get bigger than this over the next few years. It's the next big market for Chinese battery producers. I'm sure European gov't will appreciate the local factory and manufacturing jobs

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4Runner · Oct 25, 2022

GodRektsNoobs said:
Seems that while everyone is distracted by BYD, a dark horse is set on making gains abroad. MG4 have been receiving rave reviews in Europe. It has more range, better interior and better driving performance than VW ID.3, while being almost £10,000 cheaper at only £25,000. I can see this car being perfect for a improverished Europe..

MG cars are actually 100% MIC. Originally MG assets were split between SAIC and Nanjing Automobile Industrial Company (owning MG brand name). When consolidation was enforced by NDRC and MII, all MG assets under Nanjing Automobile Industrial Company were transferred to SAIC. After that, SAIC builds Rowe brand for domestic market and MG for international markets. But they are all designed and built by SAIC in China. It is interesting to watch if SAIC can survive the EV tsunami. BTW, that pink MG really shows how low SAIC has become in the grand scheme of Chinese automobile industry.

tphuang · Oct 25, 2022

If you ever wondered what it's like to work for BYD. Here is a job ad for BYD Nanning 3rd battery factory. The 2nd factory with 10 GWh just went into production on Oct 20th.

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The starting salary is 5000 RMB/month. Like all these other factories, they seem to have their own campus with dorms, canteens and entertainment areas.

supercat · Oct 25, 2022

tphuang said:
I have not heard of these guys before, but Weichai has put 500 NEV light truck into service now

Actually, there are many electric cargo vans and light trucks, such as the one below, serving for "last-mile delivery" in China.

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How battery swapping works:

https://twitter.com/i/web/status/1584834491255660544

B.I.B. · Oct 25, 2022

tphuang said:
BYD continues to steam roll everyone in NEV registration for the 3rd week of October.

https://twitter.com/i/web/status/1584846619614158848
Notice how BYD's NEV registration is almost catching up to combined ICE sales of FAW/SAIC-VW. We know FAW is going to work with BYD to survive. I'm not sure what SAIC's strategy is.

If you look at this, the obvious conclusion is that Li Auto/XPeng/LeapMotor are in trouble. When you are only selling 1000 cars a week, you are not going to last that long.

The reality is that the market size is finite. When BYD increases the production this much, some of the other NEV producers will be left in the dust. Not all the losses will come from VW and Toyota.

BYD skyrail for the world. So far, just building them in China and Brazil. BYD would love to build them in other countries also.

https://twitter.com/i/web/status/1584487093451239432

Frigate 07 production has started

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BYD battery box continues to sell well in Australia

https://twitter.com/i/web/status/1584499797297221634
Seems like Germany and Australia are two of the largest market for this product. Makes sense with the solar expansion.

Ford is definitely still prioritizing the Chinese market

https://twitter.com/i/web/status/1584620777437278208
I wish them the best. Electric Pickup will have a lot of competition.

IMO pickups being capable of towing 2 to 4 thousand kilos efficiently would be the biggest decider.

tphuang · Oct 26, 2022

The talk about sodium ion batteries isn't complete without discussing the supply chain. China is just so far ahead of everyone else on mass producing things and building supply chains. Well Biden admin is now stuck discussing how to decouple itself from China's lithium battery supply chain, China has already started building SIB supply chain.

The reality is that politicians are stupid and incapable of determining what industries need. You need to set policies to promote EVs and battery development and let the companies themselves figure out the best chemistry.

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New Energy Vehicles (NEVs) in China

tphuang

Lieutenant General

tphuang

Lieutenant General

NiuBiDaRen

Brigadier

AndrewS

Brigadier

tphuang

Lieutenant General

4Runner

Junior Member

tphuang

Lieutenant General

supercat

Major

B.I.B.

Captain

tphuang

Lieutenant General