I will stay away from making any major investment in that failed unstable extremists Aghanistan. lol African countries are even better.
New Energy Vehicles (NEVs) in China
- Thread starter supercat
- Start date
If it was a simple be careful the government don't need to send Xi to tell them that.
well then if you are so concerned about this deal, why don't you actually explain how this is so terrible?
supercat
Major
It depends on the technology. LFP is fine, but not the technologies of M3P, condensed matter battery, or sodium ion battery.
India is so corrupt, the Electric Viking is not sure it's such a great idea for Tesla to invest there.
A major German automaker will use sodium ion batteries produced by a Chinese company.
We told you countless times India would harass and eventually rob the BYD of the investments. There are too many similar cases in the recent times. US ironically is less likely so we will see how that one goes.
Now I am not sure if Xi think the same as us, but he is clearly concerned about something regarding the rapid expansion. We cannot read his mind but he certainly feel concerned enough to voice it personally.
The point in question is CATL. Why don't you talk about it?
As for India & BYD, BYD seems to know how to protect themselves pretty well. A few weeks ago, everyone was concerned that BYD would sell buses to India for free & then it got its deal, sold in India, no problem. It seems to have had no issue building buses & other cars in India for 15 years. Right now, it is actively building cars in India in its existing plant from SKD. Have you seen any evidence that BYD cannot get its money? In fact, India is so concerned about BYD's approach that it rejected its proposal.
No large markets are without risks. Don't expect any market around the world to treat you fairly when they have a domestic industry to protect. BYD will face plenty of protectionism in Europe also. Just look at all the talks of higher tariffs and other protectionist measures that Europeans are talking about. Electric Viking documented many cases of unfairness facing Tesla. India is a more risky market than EU, but you have to do your risk & reward calculation. Without a CKD plant in India, BYD will have to pay higher tariffs and be less competitive. Maybe that's still better than building a plant there and risk losing some money & dealing with higher costs. But BYD must have run through these calculations. For certain conditions, risk is tolerable. For other conditions, risk may be more than reward.
BYD has a competent management. It is under no illusion of the treatment it will get in India. Let them do the calculations and figure out what conditions they are willing to accept
I did. I said we will see how it goes for CATL because US is ironically safer than India. I pointed out BYD India as an example, because many members pestered you about it yet you were still confident about it. Turns out BYD agree with the concern and doing their way avoiding the scam.
It was smart of BYD to avoid that bus deal. As for the existing assembly plant, sure it can return value until it gets taken xiaomi style.
Let us avoid comparison that makes no sense. It makes your otherwise reasonable arguments look bad. EU risk and reward is not the same as India. Nobody as far as I can see had concern over EU entry. EU has a huge car market of 420 billion USD. India is 22.4 billions. The political risk in EU so far is either they do not approve the project, or terminate the partnerships lawfully. Only exception is when seized Russian money but that one involves a war and there was no prior track record, so the calculation is different. India on other hand has much less market (about 20x less), and has shown willing to steal for far less.
CATL deals in US we will have to see. US government is very willing to steal for political points, even when economically it makes no sense. The good thing is US has a independent judicial system preventing some of the risk (see Tiktok ban). Overall US is less risky, and reward is much bigger.
Companies are not infallible. That is our point. As we know there are plenty of reputable company that got out losing. I am sure they calculated the economic sides of risk, but the new geopolitical risk these companies so far have bad track record. From this I disagree with the argument "these companies know what they are doing and are always competent in their calculation". Could BYD and CATL be an exception? Maybe. But it is fair for members on the forum question the risk because we have good reasons to. Xi jinping certainly also has his concerns on CATL too. We should take his words seriously.
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it was India gov't that rejected the deal
They didn't avoid the bus deal. Indian govt caved at the end. BYD knows how to play ball
Who is nobody? On this forum? Because I can assure you there are plenty of people concerned about hurdles facing BYD in Europe if you listen to various Chinese EV podcast.
With India, you are just dealing with different types of risks. You have to figure out how to get money out faster and how to charge more for those subsystems that you will be supplying to your assembly plant
India is a 4million+ market. Europe is around 3 to 4x that
If you agree that CATL shouldn't be worried that Ford might become a competitor, then there is basically no risk other than spending some resources in helping Ford setup the plant, which presumably will be paying money to Chinese toolmakers for usage in factory.
I need to based my judgement on what Xi thinks? It's pretty obvious by now that Chinese govt has severely underestimated the rapid adoption of EVs and the fast evolution of Chinese battery & EV industry.
Now, let's think about it this way.
NIO spends a lot of money build its NIO houses & battery swap stations in Europe, but because European automakers are at home, NIO gets sued on ES6 and loses it and can't use that logo anymore. It's struggling to gain any traction, probably losing money heavily in its EU operation. Same with XPeng. If NIO and/or XPeng gives up in Europe, nobody on this forum will bat an eye on this attempt because Europeans didn't steal anything from them.
Now let's say BYD eventually does spend $1Billion to setup a CKD plant in India. It sells 100k/year and makes $5000 per car. In 2 year, it makes back it's investment either through direct profit or profits of the supply chain it controls that are exported to Indian factory. But if gets factory shutdown and force to sell in 3rd year, people will be outraged on this forum. But in the end, it still made money.
BYD avoided the unfavorable deal proposed, and that is good.
I meant nobody on the forum at least. The point being about some people here question risk of foriegn market, chiefly US and India, and showed concern on this forum. That was the reason I mentioned that.
I think it is more fair to compare the revenue of the car market, due to EU buy higher end cars, in which EU should be around 18x the size.
You don't have to agree with him, and he is not infallible, but he as the president of China have some credibility to say the least. He has access lots of information regard geopolitical risks and Chinese government policies. He must have seen the growth of industry by now even if the government underestimated previously. Nevertheless, he still urges caution. It would be foolish to disregard his assessment even if he is not infallible.
Assuming they made money unlike Foxccon of course. And assuming they did make money, would that money be better spent elsewhere?