This is the best summary I could come up with:
LONDON/DETROIT, Dec 8 (Reuters) - The rise of inexpensive Chinese electric vehicles has upped the pressure on legacy automakers who have turned to suppliers, from battery materials makers to chipmakers, to squeeze out costs and develop affordable EVs quicker than previously planned.
“Automakers are really now only turning to affordable vehicles, knowing they’ve got to or they will lose out to Chinese manufacturers,” said Andy Palmer, chairman of UK startup Brill Power, which has developed hardware and software to boost EV battery management system performance.
Palmer, formerly Aston Martin’s CEO, said Brill Power’s products could boost EV range by 60% and enable smaller batteries.
Stellantis (STLAM.MI) is building a European plant with China’s CATL (300750.SZ) to make cheaper LFP batteries and recently unveiled the Citroen electric e-C3 SUV, which starts at 23,300 euros ($24,540).
Vincent Pluvinage, CEO of Palo Alto, California-based OneD Battery Sciences, said that on his recent visits with European automaker customers, every meeting started with the same refrain: “‘Reducing costs is now more important than anything else.’”
Veekim CEO Peter Siegle said using cheaper ferrite and low-cost processes - including 3D-printed copper wiring - can cut an EV motor’s price by 20%.
The original article contains 809 words, the summary contains 195 words. Saved 76%. I’m a bot and I’m open source!
“We can’t lower the prices, it’s impossible so soon”
There‘s a word for that „Greedflation.“ This is what western car makers do. Luckily, the Cinese car makers grasp their chance and disrupt the market
While that is part of it, the other, bigger part is that Western countries actually do have higher labour costs: better salaries and conditions for our workers.
When China was outcompeting us on undesirable, low productivity, jobs, we accepted that. It was better to raise a billion Chinese out of poverty than to protect our lowest productivity factory workers. And those workers mostly transitioned to other jobs with higher productivity.
But now China is richer and their labour force is shrinking, so they will compete with highly productive factory jobs.
Politically, it is unlikely that car workers will accept unemployment. Nor will other highly paid workers.
So a trade war is brewing, you better brace yourself for it.
China wasn’t “outcompeting us on undesirable, low productivity, jobs”. Corporations were shipping jobs to China to undercut highly productive factory jobs back then, too, so they could save on labor costs. It’s only now that China is undercutting corporate profits that these same corporations come crying and shitting their pants. That’s also why you see a ramping up of negative media pieces on China. It was never about charitably raising people out of poverty. It was always about corporations undercutting labor to gain greater profits. Fuck 'em, bring on the cheap cars.
Dude, I’m old enough to have lived through it.
Making toys and other plastic shit was never a high paying job in the West.
And no, it wasn’t charity, it was a win-win that increased living standards on both sides.
But it did have an impact on low paying manufacturing jobs in the West and that impact was accepted by Labour unions for the two reasons I gave: we (rightfully) concluded there were enough other, better jobs available and didn’t want to keep Chinese workers poor.
I hate it when corpos use the “oh we can’t lower prices because our staff is getting paid too much”-narrative. What about the CEO who takes half the profits for himself?
It’s the workers who create value for a company, they don’t take it away by getting paid for their work.
Don’t think labor costs is a big factor. Car production is the sector that is most automated. Just think of this endless bands of hanging cars with robot arms working on it. Tesla even topped this.
It’s mainly the unwillingness to design and sell cheap cars due to less profits. In Germany we had electric cars for 20k€ or even combustion cars under 15k€. But they stopped building it. Although it was sold out in weeks.
In my region there was a Startup by the Aachen University RWTH (which is an elite university in Germany) bulding small EVs for around 20k€. They simply bought all parts from suppliers and just assembled it. And engineered and designed it first. Unionized and still competitive. Unfortunately, they didn’t fly.
EV building is rather simple. The software is key. And this is the missing part at car makers capabilities.
I second your thoughts on trade war. However, I guess it will be much simpler with high taxes, high quality regulations, and may be less support by car workshops. We will see…
There is still a shit ton of people working in a car factory. Tesla had to scale back their amount of robot workers since humans could work much faster. Tesla expects to have 60,000 people working in their Gigafactory in Texas when the production of the Cybertruck ramps up.
Chinese manufacturers are being heavily subsidised and even making a loss on their cars.
They’re trying to kill off our domestic car industries.
Selling at a loss to enter a market or gain market share is a time honored tradition at this point.
It is, but as the article mentions some manufacturers are making a loss of 35k per car.
If those cars are then sold for 5k less than the US/EU/Japanese equivalent, despite lower wages and environmental standards, you have to ask yourself questions.
No reason why western countries also can’t subsidize EV car companies to remain competitive.
Like…what are we supposed to do? Be content with ridiculously priced EVs and be willing to pay a small fortune for them? Fuck off with that noise.
Western corporations have had no problems fucking over the average consumer for decades or laying off thousands of employees at the first sign of trouble. Let them adapt or die I say. Competition is always good. Western corporations have the smarts and the resources to compete, they just need to be forced to.
Controversial take: the problem isn’t car prices. They haven’t increased that much when compared to inflation, and you’re getting far more and far better cars for your money when adjusted for inflation.
The problem is wages haven’t risen and housing prices have risen too much, meaning people have less to spend on a car.
E: I googled. In the US the cost of a median house was 18k in 1953. An average car cost 3.5k.
Now, the median house costs 400k.
400k/18k x 3.5k = If car prices had risen as much as house prices, the median car would cost 77k.
That‘s a terrible idea. Just because China throws irresponsible amounts of cash at cars doesn‘t mean we have to do the same mistake. We can simply say it‘s not OK to sell products under manufacturing costs to gain market share and that‘s that. Let‘s not inflate the already oversized car market even more.
A lot of western countries are subsidizing EV sales. Most western auto companies just waited a decade longer than they should have to start making EVs and are in the thick of developing technology when the early movers are hitting maturity.
On top of subsidies at the national level, most legacy automakers are selling their EVs at a significant loss, but that is because they haven’t reached economies of scale yet… not because they are trying to undercut competition. It’s hard to develop new products and even harder to get them to scale production. Ford has been making cars for 120 years, but that isn’t the same thing as making an EV. They effectively have to start over in a new field… a decade behind companies that invested early.
A lot of the press you hear about EV manufacturers cutting back because demand is low has to do with them cutting back because they are losing $50-70k per vehicle they are selling and can’t stomach the losses. The demand is there, they just can’t make an EV at a price that generates profit. They trim commissions at dealerships to try to help defray cost, but that minimizes incentive for sales teams to try to move them and exacerbates the problem. On top of that, their ICE sales are diminished due to high interest rates and an overall market slowdown in large purchases so every vehicle they sell at a loss hurts the bottom line that much more.
They’re trying to wait to push the cost involved in getting to scale until interest rates go down and it’s more affordable to invest in new technology. They are fucked. Tesla is currently the only American company that is profitable at scale and Elon can’t shut the fuck up on eX-Twitter long enough to stop pissing off the marketplace. The table is set for Chinese EVs to flood the US market, but I don’t think people will be as open to Chinese vehicles with the current data privacy issues and the tense geo-political position between the US and China.
I’m thinking that, if it gets bad enough, the federal government will disincentivize Chinese EVs with tariffs to offset the Chinese gov’t subsidies… if the current US EV tax incentives don’t do enough to spur legacy automakers to kick it into high gear… which it doesn’t seem to be doing. It’s going to be a rough decade for legacy automakers.
Yep. They‘re doing exactly what we usually call hostile underbidding to heavily inflate prices later when they‘re a top dog. A practice that is not quite legal in most parts of the west. And whoever wants to know when things still don‘t work out for the car maker because subsidies dry up: Search for Chinese manufacturer ‚Weltmeister‘. That will make you think thrice about ever coming near a Chinese EV.
It’s also called dumping:
https://en.wikipedia.org/wiki/Dumping_(pricing_policy)
The kind of thing usually results in a trade war, sanctions and tariffs.
The problem in Europe, is that our manufacturers are so reliant on Chinese parts and manufacturing, that they’ve asked our government NOT to intervene. China has them by the nuts, because they’ve outsourced too much. IRC they can’t even make batteries without using Chinese parts.
gee the market has been clamoring for a decade while the auto industry said “BIG TRUCKS AND SUV’S!”
I mean there’s still a good amount of people in my position where you can’t fit 3 car seats in any ev in the market. Haven’t checked in the past year, maybe it’s changed but I also can’t afford to waste 60k+
Or in a five-seater car or crossover. It’s ridiculous. Carseats and boosters are massive, even the ones with the smallest bases. Then after that you need space for sports equipment, musical instruments, other friends, etc. I’m not sure what the solution is here, other than acknowledging that for a few years in a family’s life they’re going to need a bigger vehicle, and it would be great if manufacturers offered a hybrid or EV solution for them, too.
Mazda is finally coming out with a PHEV three row next year, starting around $55k. Not sure who else, besides Rivian with their new fully EV three row at $75k+, which is completely unaffordable for most families.
Kia EV9 has three rows and starts at $55k still expensive but definitely in range for a middle class family
Safety and reliability are two of the biggest factors in family cars. You would think they would want to make larger family vehicles with those selling points.
I just looked it up and the only minivan EV is 114k…
Yeah and that is part of my point on being pro-Chinese EV… Not only affordability, but the fact that there is simply no choices for certain segments. Our automakers are so conglomerated that there is very minuscule choice in EV since each puts out maybe 2 or 3 models.
There is also proof that competition is causing local builders to step up… With Citroen offering the ec3 with LFP, and 200 miles of range for $20k… Meanwhile Stelantis is releasing absolute trash in the US because they can get away with it.
You can get a Pacifica PHEV with a whole 40 miles of electric range… that is like your one choice… Though the Canoo could meet that need if it ever comes to market.
There is a similar issue for cargo vans the US has like 3 choices for electric… Meanwhile even European buyers have far more choice.
if only you did your basic research
https://babydrive.com.au/reviews/electric-cars/2022-hyundai-ioniq-5-ev/
I did, I tried to fit my seats in one actually. Before making a snarky comment, you should do your research and know that not all car seats conform to a size. Some are bigger than others and the front seats cannot touch the car seat in a rear facing configuration. I’m tall enough there was no way I could drive the car.
Honestly it feels like most companies producing child seats and strollers and whatnot (as well as the stores that stock and sell them) have stopped putting any focus on solutions for 2 or more children and instead only produce solutions for only children. I’ve got 2 young kids 2 years apart and we had a heck of a time finding a double stroller among other things
Hear me out: a bare minimum electronics car extremely reliable, no screens no bells and whistles and with the smallest possible engine battery that costs less than $5.000 💥
You can get an electric motorcycle for that price. Even electric microcars cost more than $5000. Unless you want to buy a Chinese tin can death machine on four wheels that aren’t street legal.
Citroën Ami is available. Closer to $8000 and technically a quadricycle. All bare minimum to make it street legal.
It’s great Citroën is making a small, cheap EV … but why did they make it look like a cross between a Fiat Multipla and a pug?
That thing is ugly.
“Why is this $8,000 car so terrible,” he lamented, without a trace of irony.
