New Energy Vehicles (NEVs) in China

AndrewS said:

You said you were done with the discussion and we agreed to disagree
But here's more reporting from elsewhere with the same numbers
I get you don't like it, but it doesn't change that this is happening
And as I mentioned before, it's generally a good thing for the world that the US is finally pushing electric vehicles

Plus the $10K in subsidies for the average electric car in the USA is actually unlimited, not limited to $50 Billion as you suggested
It's in the form of tax breaks which can be traded, so the US government is foregoing future revenue (and there is no limit to this)

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It's a really bad practice and rude to bring back comments 2 weeks after they've already closed. If you want to talk more about it, post on your own. Don't quote or mention me after it has already finished. In fact, I don't particularly care what you think about it. I don't know why you keep wanting to proof me otherwise.

signing deal with Yongjia county outside of Wenzhou for battery factory. 20 GWh in the initial phase and to be up and running by 2024 producing battery with possibly new promising chemistry. BYD is great at building factories in low cost 2nd/3rd/4th tier Chinese cities. It continues to amaze me that they are able to build these factories in outer boroughs of lower tier cities and still get enough productivity from them. They must have quite the training program.

The other big news is that BYD is increasing their prices next year. I didn't realize subsidies are going away, but the automakers are going to have to deal with consequences of that

BYD is entering Paraguay market with Yuan+

“We will launch the 100% electric Yuan Pro and also the Yuan Plus, the most emblematic model presented at the Paris Motor Show with 5 safety stars in Europe. For next year we will probably add another plug-in hybrid model”.

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Looks like they will do Yuan+ and Song+ DM-i

It looks like Yuan+/Atto3 and Song+ DM-i are the main models for Latin America where charging infrastructure is not up there yet.

Looks like frigate 07 is finally going into production in December.


Looks like production will start soon as the Jinan car plant. Initial phase to reach 300k car a year and roll out its first car on Nov 30th.
Interesting enough, it also has a large battery factory coming online next year with 30 GWh production from 16 production lines. We also know that Jinan is going to be the location of their largest chip fabs. They have quite a few major project going in Jinan.

Yicai has finally caught onto the news that BYD will be selling Yuan+ and Song+ DM-i in Brazil. Don't know what took them this long

They are unveiling Yuan+ in Malaysia next month. This is the great coming out party for BYD. Q4 is just the appetizer, 2023 will be the first main course.

tphuang said:

Looks like frigate 07 is finally going into production in December.

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I hope they name their next car the Battlecruiser

General Motors on Tue announced a plan to roll out over 15 Ultium-based EVs in China by 2025. Media reports said that GM's Ultium-based plant in Wuhan will open later in 2022, and will assemble battery modules and electric drive systems for domestic Ultium-based models.

AndrewS said:

"Goldman Sachs expects the “average eligible EV in the US” will receive more than $10,000 in benefits from the IRA.

The bank’s analysts believe demand for finished batteries could be met without China within the next three to five years, largely thanks to big investments in the US by South Korean conglomerates LG and SK, who have been attracted by massive subsidies from US taxpayers."

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The Koreans are behind the Chinese in battery technology now. Moreover, how willing would US taxpayers be to endlessly subsidise what is in effect foreign firms?

Ultimately the market will go to the cheapest producers who can manufacture at massive scale with speed. It is hard to know the exact cost advantage that the biggest Chinese battery producers enjoy, but I've seen numbers as high as 20%. It's the cumulative advantage of a massive, concentrated supply-chain and what is (still) about 1/3rd the wage of a South Korean, let alone a Western European or an American. Those advantages are unlikely to change even over the next decade. In other words, Chinese batteries can be replaced but only if consumers are willing to shoulder significantly higher costs. I think that is unlikely.

tphuang said:

It's a really bad practice and rude to bring back comments 2 weeks after they've already closed. If you want to talk more about it, post on your own. Don't quote or mention me after it has already finished. In fact, I don't particularly care what you think about it. I don't know why you keep wanting to proof me otherwise.

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As opposed to letting factual or analytical errors stand?
God knows we see enough of this in the Western MSM

Anyway, it's definitely closed now

AndrewS said:

As opposed to letting factual or analytical errors stand?
God knows we see enough of this in the Western MSM

Anyway, it's definitely closed now

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I really don't appreciate getting dragged in when a matter is already been tossed aside. But now you've really annoyed me. Let's debate this then.

according to this, there is $36 billion earmarked for Clean Fuel and Vehicle Tax Credits. Out of that, a portion is for used cars sales. Let's say you have $30 billion for tax credits on new EVs.

If we use $7500 tax credit per car as guideline, then 4 million cars can get tax credit.
If we use $10k per car as guideline, then 3 million cars can get tax credit.

The amount of subsidies is fixed. Don't try to pretend otherwise.

Once that gets used up, the American EV/battery industry becomes not competitive again. And this is all assuming that the Republicans don't torpedo this huge spending package at some point.

You think you can get a long term sustainable battery supply chain on the back of subsidies for 3 to 4 million cars? I don't frankly care about what some Goldman analyst have to say. These people don't know much of anything.

The scale of the battery factories expansion right now in China is beyond anything we see here in America. 3 to 4 million cars over 10 years is peanuts. That's 200 GWh in total.

mossen said:

The Koreans are behind the Chinese in battery technology now. Moreover, how willing would US taxpayers be to endlessly subsidise what is in effect foreign firms?

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The battery manufacturing will mostly be located on American soil.
And the tax credit subsidies are guaranteed to 2030
We'll have to see what happens afterwards, but I expect some level of subsidy to continue

mossen said:

Ultimately the market will go to the cheapest producers who can manufacture at massive scale with speed. It is hard to know the exact cost advantage that the biggest Chinese battery producers enjoy, but I've seen numbers as high as 20%. It's the cumulative advantage of a massive, concentrated supply-chain and what is (still) about 1/3rd the wage of a South Korean, let alone a Western European or an American. Those advantages are unlikely to change even over the next decade. In other words, Chinese batteries can be replaced but only if consumers are willing to shoulder significantly higher costs. I think that is unlikely.

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Yes, the Chinese battery supply-chain is the lowest cost

But the IRA means that consumers won't have to see higher costs, because it is coming from the pocket of the US government

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These are the latest Tesla pack level battery costs

Existing Panasonic 2170
$130-140 /KWh

Newer Tesla 4680
$104 /KWh

CATL
$77 /KWh

We know that the IRA battery manufacturing credit is $45 /KWh
And the current price gap between CATL packs and the Tesla 4680 packs is only $27

So future American battery plants could undercut Chinese plants on price.
If nothing changes, then the US would hands-down be the best location to locate a battery plant.

But once American battery plants come online, I do expect the Chinese (and also European/Korean/Japanese) governments to start subsidises to keep their battery plants competitive globally

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And looking to the future, it's possible that battery production costs will fall to $60 /KWh in the USA. If the US government is also giving you $45 on top of that, then the batteries are only $15 /KWh

In this scenario, I see Europe, Korea and Japan all slapping anti-dumping tariffs on US batteries as well

Sources below
dlapiper.com/en/us/insights/publications/2022/08/inflation-reduction-act-seeks-to-jumpstart-electric-vehicle-market/
medium.com/predict/teslas-revolutionary-4680-has-a-massive-problem-8e89c18a59c8