New Energy Vehicles (NEVs) in China

Some updates on the European front:

Spanish prime minister flipped after travelling to China.

Spanish Prime Minister Pedro Sanchez said on Wednesday the European Union should reconsider proposed import tariffs on Chinese-made electric vehicles, and urged Brussels and Beijing to find a compromise that avoids a trade war. Sanchez's comments during a visit to China suggest a change of tack from Spain, which until now has supported the tariffs, while signalling concern about the impact any potential fallout from the EU-China trade spat could have on Spanish industry.

"I have to be frank, we have to reconsider our position, all of us. Not only the member states but also the (European) Commission," Sanchez said at an event in an industrial park in the Chinese city of Kunshan.

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Italian minister of industry expects a negotiated solution, and that talks are ongoing in Geneva.

Asked if the Italian position on the EV tariffs had changed, Urso told Reuters on the sidelines of a parliamentary question time session that he expected a negotiated solution.

"They are discussing it in Geneva at the moment," he said in reference to the World Trade Organization, whose headquarters are in the Swiss city.

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A Chinese delegation is in Brussels to prepare the ground for the ministerial talks with the EU trade commission.

The group met with senior

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counterparts on Monday, according to several sources, and was led by vice-commerce minister Li Fei, one source said. On the EU side, Sabine Weyand, the bloc’s director general for trade, led the talks before briefing members of the European Parliament’s trade committee on the

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.

The meetings are designed to pave the way for ministerial-level discussions next week when Chinese Commerce Minister

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will be in Brussels to meet with the EU’s trade commissioner, Valdis Dombrovskis.

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The only way to get Europeans to negotiate is going after individual states with targeted retaliation. Everyone knows that. So far, EU has only spat in China's face by cutting Tesla tariffs and keeping everyone else really high.

The entire thing feels like a waste of time.

BMW is getting crushed. Very under covered, btw.


BYD opening a NEV museum in Zhengzhou to display all it has to offer

tphuang said:

The only way to get Europeans to negotiate is going after individual states with targeted retaliation. Everyone knows that. So far, EU has only spat in China's face by cutting Tesla tariffs and keeping everyone else really high.

The entire thing feels like a waste of time.

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I would not call it a waste of time at all. It's a careful political/economic dance on two levels between three parties. The modern EU is like the old HRE, with a nominal central authority over a bunch of of sovereign electors. China is engaging at both levels with both carrots and sticks to try and get the best deal. To individual countries, it offers FDI and threatens retaliation because each of them wants to maximize their individual success. To the EU, it offers concessions and threatens the October vote because the commission wants restrictions without risking an embarrassing public failure. Meanwhile the countries side with the EU to gain as much leverage as possible to get the most from China without antagonizing it, while the EU tries to keep them in line so that it has the strongest possible position for negotiating.

So Beijing has to buy off the individual countries as cheaply as possible and threaten them without going too far, to raise the risk of the vote failing high enough that the EU commission is willing to accept a deal with as few concessions as possible. Lots of moving pieces here.

China should stop pussyfooting about it and slap a 100% tax on high powered fuel guzzling ICE cars.

gelgoog said:

China should stop pussyfooting about it and slap a 100% tax on high powered fuel guzzling ICE cars.

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Why would they do that when Germany, who would be most hurt, is already advocating against EU tariffs?

The Germans talk a lot, sure, but the EU Commission is led by the Germans (Ursula) and the EU import tariffs still happened.
They just want to have their cake and eat it too. The Germans could have easily blocked the tariffs if they really wanted to. China should not be fooled by such petty little tricks.

China Asks Its Carmakers to Keep Key EV Technology at Home​

• Firms encouraged to export knock-down kits, assemble locally
• India, Turkey mentioned specifically with regard to investment

China has strongly advised its carmakers to make sure advanced electric vehicle technology stays in the country, people familiar with the matter said, even as they build factories around the world to escape punitive tariffs on Chinese exports.

Beijing is encouraging Chinese automakers to export so-called knock-down kits to their foreign plants, the people said, meaning key parts of a vehicle would be produced domestically and then sent for final assembly in their destination market.

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The instructions come as companies from

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to

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. firm up plans to build factories in Spain to Thailand and Hungary as their innovative and affordable EVs make inroads in foreign markets.

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China’s Ministry of Commerce held a meeting in July with more than a dozen automakers, who were also told they shouldn’t make any auto-related investments in India, the people said asking not to be identified discussing matters that are private, in another attempt to safeguard the know-how of China’s EV industry and mitigate regulatory risks.

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In addition, carmakers wanting to invest in Turkey should first notify the

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, which oversees China’s EV industry, and the local Chinese embassy in Turkey.

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During the meeting, MOFCOM noted that the countries inviting Chinese automakers to build factories are usually those enacting or considering trade barriers against Chinese vehicles. Officials told attendees that manufacturers shouldn’t blindly follow trends or believe such calls for investment from foreign governments, according to the people.

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Chinese state-owned manufacturer

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, which controlled MG Motor India, was investigated over financial irregularities in 2022, Bloomberg

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. Last year, SAIC

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its stake in the Indian MG operation, with its ownership forecast to be trimmed to 38-40% over time, according to one local media report.

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God bless the CPC!

So Spain, Italy and Germany are now against EU tariffs

Will US puppet Ursula budge? Or will she show the world once again that it's the US who calls the shots and not European states.

gelgoog said:

The Germans talk a lot, sure, but the EU Commission is led by the Germans (Ursula) and the EU import tariffs still happened.
They just want to have their cake and eat it too. The Germans could have easily blocked the tariffs if they really wanted to. China should not be fooled by such petty little tricks.

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I see Ursula more as a trans Atlantic puppet that by just has an German passport, the EU has many such officials.

Also i wouldn't be surprised that Germany thinks it can hold out longer than the rest of Europe and hopefully be the man standing as car manufacturing country in Europe. Because they are already setting up their R&D facilities up in China either fully owned of joint venture.
With R&D facilities in China they might be able to compete with Tesla in Europe and maybe the rest of Natostan.

Any speculation on how Chinese EV companies will consolidate (if ever)?

I'm really stumbled by this question because there doesn't seem to be many obvious M&A opportunities for the Big 4 nowadays (BYD, Chery, Geely, Changan).

I guess one that makes sense is Changan absorbing FAW and Dongfeng's passenger car divisions. But that seems to be pretty much it.

In terms of weak old companies we still have:
SAIC (+Wuling)
GAC
GWM
JAC
BAIC
> Many of them are too strong to be absorbed by the Big 4 or have too many local political connections (like SAIC)

And we also have countless startups with high valuations like Nio, Xpeng, Li Auto, Leapmotor, Xiaomi, Jidu, Neta
> For these startups, it's really hard to decide which one will go bust or get absorbed first because there's no clear winner or loser. Neta has the weakest China sales but pretty strong overseas sales.

And we also have the Huawei-related companies: Seres (AITO), BAIC (Stelato), JAC (Zunjie), Chery (Luxeed)
> It's also hard to decide what happens to these companies. Seem to be in a sort of limbo where nobody knows what is the best structure for them.