6 ms·

Why China's electric car industry is leaving Detroit, Japan, Germany in the dust

41 points by wil_I_am_27 8y ago

digerata 8y ago
China's push for electrification of transportation is admirable and worth praising. But this article is vapid click bait with nothing backing up its headline. The manufacturing of cheap junk that doesn't meet safety or reliability standards and stealing IP to bypass research and development is hardly leaving established car companies in the dust.
- melling 8y ago
  What stolen battery/EV IP was stolen? I didn't see it mentioned. "Cheap junk" is what we said about Japanese cars in the 1970's. Chinese companies can develop the important EV technology then increase reliability, safety, etc when it comes time to export. In the meantime, I think they are racing towards EV's to address the pollution in large cities and reduce imported oil.
  - lsc 8y ago
    >"Cheap junk" is what we said about Japanese cars in the 1970's. Chinese companies can develop the important EV technology then increase reliability, safety, etc when it comes time to export. Going from your first sentence (which is correct) to the second is... not trivial. I mean, clearly you have proof it's not impossible, but there's a lot of really difficult work between the two. For that matter, I think that it was easier for Japan than it will be for China, just 'cause the American car companies of the '70s were focusing on 'big and loud' and not putting a lot of effort into what a fan of Japanese cars would call 'quality' or safety, reliability or price. I think established automotive companies are doing a much better job now, and that it's going to be really difficult to beat them on anything but the last criteria, and I think that even just winning the last criteria without sacrificing too much of the first three will be a challenge. (certainly not impossible; in fact I bet they will get it eventually. I'm just saying, this is a decidedly non-trivial undertaking) But... I've been hearing about efforts to bring a fully Chinese car to the US market since the '90s. I mean, sure, it'll happen eventually, but having heard it so many times makes it hard for me to take any new pronouncements seriously. Clearly, there is something difficult involved
    - jsight 8y ago
      I think that the success Tesla has had in building safe cars is evidence that this leap can be made fairly quickly. But the possibility doesn't imply the inevitability, and I still ultimately agree with your conclusion. I also have been hearing about Chinese cars for about 2 decades now, but I haven't yet seen a serious effort to build quality cars that are suitable for the US market.
      - ahi 8y ago
        Tesla sells luxury cars with margins big enough to accommodate safety engineering. I have read reports that they can't compete on price with the Bolts and Leafs which is why we haven't seen a base model 3.
- deleted 8y ago
  [deleted]
- woodandsteel 8y ago
  >The manufacturing of cheap junk that doesn't meet safety or reliability standards and stealing IP to bypass research and development is hardly leaving established car companies in the dust. You have to look at overall trends. 25 years ago China manufactured hardly anything exportable to the West. So like Japan before it it started at the bottom of manufacturing and since then has been steadily moving up the value chain. Now the government has a goal of first switching to EV's internally and then making them good enough to sell to the West. There is no reason to believe they will not be able to succeed. You know, you are making the same mistake that Detroit and US manufacturers of all sorts of goods made when the Japanese first showed up, namely that they would never be able to match American skill. But they did, and countless US companies either went out of business or moved their manufacturing to China.
olivermarks 8y ago
https://www.ft.com/content/61684fa6-d2f6-11e8-a9f2-7574db66bcd5 https://www.ft.com/content/61684fa6-d2f6-11e8-a9f2-7574db66b... 'Can Germany survive the 'iphone' moment for cars?' in FT, a good write up of why Europe and North America are ceding the vehicle industry to Chinese EV's. I can't see this ending well for the western automotive ecosphere.
- seanmcdirmid 8y ago
  How many Chinese EVs are being exported to the USA so far? Just some BYD buses? And Tesla is pretty popular in China among the rich (honestly the only American imported car I’ve ever saw multiple of in Beijing). I don’t think this is far from decided.
  - olivermarks 8y ago
    Upcoming western bureaucracy and regulation compel automotive manufacturers to go EV. This economic wave hasn't really started yet
  - devy 8y ago
    China doesn't need to export EVs to make their EV industry profitable. China is already the biggest auto market in the world, with strong government mandate, it's biggest EV market as well, with the help of Trump administration's rollback on EPA emission policy and trade wars.
- MrBuddyCasino 8y ago
  Anyone can build an EV, its much easier than an ICE. The thing is that the profit margins are much slimmer, because batteries are expensive, and I'm be curious how the western manufacturers will handle that.
distantsounds 8y ago
China can mine their own raw materials for EV batteries. All the major ingredients (lithium, cobalt, nickel) can be dug up on their own soil, dramatically reducing the cost. If anything, that right there is a major cost savings and a boost to their production.
- jdhn 8y ago
  I'm surprised the article didn't mention this. Mining material for EV batteries is a very dirty process, and while I'm sure that progress is being made to make it cleaner, China doesn't seem to care about the pollution from mining. If I remember correctly, access to raw materials was floated as a reason for Elon choosing to put the Gigafactory in Reno due to the fact that mining is quite prevalent in Nevada.
  - deleted 8y ago
    [deleted]
  - olivermarks 8y ago
    https://www.ft.com/content/00b2e3c8-e2b0-11e8-a6e5-792428919cee https://www.ft.com/content/00b2e3c8-e2b0-11e8-a6e5-792428919... 'The race to mine the deep sea’s riches '
- seanmcdirmid 8y ago
  Those elements exist elsewhere (in the USA, Australia, etc...). The problem is that digging them up and refining them is either very dirty or very costly, and China hasn’t minded the former, underpricing everyone else in the market.
- eeZah7Ux 8y ago
  > dramatically reducing the cost Citation needed. Any datapoint to back up the claim that transport cost is very relevant?
- hackeraccount 8y ago
  Just because those materials are mined in China doesn't lower the cost other then the price of shipping. And my understanding is that shipping costs are generally a tiny faction of the cost of most items. I think there's a popular conception that it should be cheaper. Just like if I use oil in Saudi Arabia it should be cheaper. But if I live in Saudi Arabia and I've got a bunch of oil to sell how much should I charge for it? Should I charge non-Saudi's the same? There's an assumption that the answer to the second question is "no". I don't think that's how it works.
reacharavindh 8y ago
I don't think China is leaving anything in the dust. Germany, Japan, and US manufacturers will always have the western market to cater to. I can't find any Chinese manufactured car(technologically Chinese, not the ownership like Volvo- Geely) that is challenging Tesla, Nissan or even VW group(which is already underwhelming for now with only promises for future to show). There is a fundamental skepticism towards Chinese goods when it comes to quality and safety. I'd be very hesitant to buy something that can literally kill me from a "proudly Chinese" brand. May be others feel differently. I'm just stating my opinion.
- coredog64 8y ago
  I owned a Chinese car for about 2 years (Great Wall Haval H5). Even with tariffs, it was cheaper than European cars and came with more features. Allegedly they licensed the prior 4Runner platform for suspension. They used a Japanese engine, and then kinda copied Mitsubishi SUV styling. Overall, my initial impression was favorable. Over the two years I noticed that it didn't hold up as well as I would have expected: The power windows quit in the down position. It ate batteries. The engine accessories weren't engineered by anyone who had ever owned a car before (belt tension was a single bolt rather than an adjustable idler arm). I'd probably buy one again, but not as my only car, and with the understanding that I'd be putting a lot of effort into maintaining it.
  - wil421 8y ago
    Basically the car is more expensive because of the terrible quality. Your car literally broke after 2 years, most cars I’ve considered buying new have at least 3 year bumper to bumper warranty and 5 years or more for engine and transmission. Your experience sounds absolutely terrible and I’m not sure why you’d buy another. The most basic Honda or a little French/Italian car would surely do. The Germans cars command a premium.
deleted 8y ago
[deleted]
gamblor956 8y ago
If by "in the dust" you mean the Chinese EVs are stuck in the dust where their batteries or engines failed, I would agree. Nearly every non-Chinese transit agency that has purchased a Chinese-built mass transit EV has either severely downgraded their orders or cancelled them outright due to the abysmal quality of the vehicles. In states like CA, the vehicles are so unreliable they would be classified as lemons if purchased by consumers...
- Bjorkbat 8y ago
  Albuquerque resident, can confirm, we returned all the electric buses we ordered. Pretty sure one of them even broke down shortly after leaving the city.
- polskibus 8y ago
  Do you have a link for stats or a wider study? I would love to share them , as my local gov also considers those buses
- akfanta 8y ago
  Any sources on these? If they are that unreliable, how are they working so well in China? Of a few cities I have been to in the past few years, their taxi and buses have gone all electric. The whole city relies on them, I seriously doubt they have major reliability issues.
  - newnewpdro 8y ago
    They might just keep a lot of spare capacity to deal with the poor quality.
  - clairity 8y ago
    here's an LA times article about metro's issues with byd buses: https://www.latimes.com/local/lanow/la-me-electric-buses-20180520-story.html https://www.latimes.com/local/lanow/la-me-electric-buses-201...
  - gamblor956 8y ago
    In China they have the power to disappear you if you rip off or otherwise embarrass the government. That tends to keep people in line when dealing with state agencies. In the West we have niceties like due process, especially for white collar crimes, and our punishments for such crimes are rarer and much less severe. (And for those who don't believe me, read up on the 2 Canadians who were disappeared last week for non-crimes as a result of Canada-Chinese tensions.)

41 points by wil_I_am_27 8y ago

China's push for electrification of transportation is admirable and worth praising. But this article is vapid click bait with nothing backing up its headline. The manufacturing of cheap junk that doesn't meet safety or reliability standards and stealing IP to bypass research and development is hardly leaving established car companies in the dust.

melling 8y ago
What stolen battery/EV IP was stolen? I didn't see it mentioned. "Cheap junk" is what we said about Japanese cars in the 1970's. Chinese companies can develop the important EV technology then increase reliability, safety, etc when it comes time to export. In the meantime, I think they are racing towards EV's to address the pollution in large cities and reduce imported oil.
- lsc 8y ago
  >"Cheap junk" is what we said about Japanese cars in the 1970's. Chinese companies can develop the important EV technology then increase reliability, safety, etc when it comes time to export. Going from your first sentence (which is correct) to the second is... not trivial. I mean, clearly you have proof it's not impossible, but there's a lot of really difficult work between the two. For that matter, I think that it was easier for Japan than it will be for China, just 'cause the American car companies of the '70s were focusing on 'big and loud' and not putting a lot of effort into what a fan of Japanese cars would call 'quality' or safety, reliability or price. I think established automotive companies are doing a much better job now, and that it's going to be really difficult to beat them on anything but the last criteria, and I think that even just winning the last criteria without sacrificing too much of the first three will be a challenge. (certainly not impossible; in fact I bet they will get it eventually. I'm just saying, this is a decidedly non-trivial undertaking) But... I've been hearing about efforts to bring a fully Chinese car to the US market since the '90s. I mean, sure, it'll happen eventually, but having heard it so many times makes it hard for me to take any new pronouncements seriously. Clearly, there is something difficult involved
  - jsight 8y ago
    I think that the success Tesla has had in building safe cars is evidence that this leap can be made fairly quickly. But the possibility doesn't imply the inevitability, and I still ultimately agree with your conclusion. I also have been hearing about Chinese cars for about 2 decades now, but I haven't yet seen a serious effort to build quality cars that are suitable for the US market.
    - ahi 8y ago
      Tesla sells luxury cars with margins big enough to accommodate safety engineering. I have read reports that they can't compete on price with the Bolts and Leafs which is why we haven't seen a base model 3.
deleted 8y ago
[deleted]
woodandsteel 8y ago
>The manufacturing of cheap junk that doesn't meet safety or reliability standards and stealing IP to bypass research and development is hardly leaving established car companies in the dust. You have to look at overall trends. 25 years ago China manufactured hardly anything exportable to the West. So like Japan before it it started at the bottom of manufacturing and since then has been steadily moving up the value chain. Now the government has a goal of first switching to EV's internally and then making them good enough to sell to the West. There is no reason to believe they will not be able to succeed. You know, you are making the same mistake that Detroit and US manufacturers of all sorts of goods made when the Japanese first showed up, namely that they would never be able to match American skill. But they did, and countless US companies either went out of business or moved their manufacturing to China.

olivermarks 8y ago

https://www.ft.com/content/61684fa6-d2f6-11e8-a9f2-7574db66bcd5 https://www.ft.com/content/61684fa6-d2f6-11e8-a9f2-7574db66b... 'Can Germany survive the 'iphone' moment for cars?' in FT, a good write up of why Europe and North America are ceding the vehicle industry to Chinese EV's. I can't see this ending well for the western automotive ecosphere.

seanmcdirmid 8y ago
How many Chinese EVs are being exported to the USA so far? Just some BYD buses? And Tesla is pretty popular in China among the rich (honestly the only American imported car I’ve ever saw multiple of in Beijing). I don’t think this is far from decided.
- olivermarks 8y ago
  Upcoming western bureaucracy and regulation compel automotive manufacturers to go EV. This economic wave hasn't really started yet
- devy 8y ago
  China doesn't need to export EVs to make their EV industry profitable. China is already the biggest auto market in the world, with strong government mandate, it's biggest EV market as well, with the help of Trump administration's rollback on EPA emission policy and trade wars.
MrBuddyCasino 8y ago
Anyone can build an EV, its much easier than an ICE. The thing is that the profit margins are much slimmer, because batteries are expensive, and I'm be curious how the western manufacturers will handle that.

distantsounds 8y ago

China can mine their own raw materials for EV batteries. All the major ingredients (lithium, cobalt, nickel) can be dug up on their own soil, dramatically reducing the cost. If anything, that right there is a major cost savings and a boost to their production.

jdhn 8y ago
I'm surprised the article didn't mention this. Mining material for EV batteries is a very dirty process, and while I'm sure that progress is being made to make it cleaner, China doesn't seem to care about the pollution from mining. If I remember correctly, access to raw materials was floated as a reason for Elon choosing to put the Gigafactory in Reno due to the fact that mining is quite prevalent in Nevada.
- deleted 8y ago
  [deleted]
- olivermarks 8y ago
  https://www.ft.com/content/00b2e3c8-e2b0-11e8-a6e5-792428919cee https://www.ft.com/content/00b2e3c8-e2b0-11e8-a6e5-792428919... 'The race to mine the deep sea’s riches '
seanmcdirmid 8y ago
Those elements exist elsewhere (in the USA, Australia, etc...). The problem is that digging them up and refining them is either very dirty or very costly, and China hasn’t minded the former, underpricing everyone else in the market.
eeZah7Ux 8y ago
> dramatically reducing the cost Citation needed. Any datapoint to back up the claim that transport cost is very relevant?
hackeraccount 8y ago
Just because those materials are mined in China doesn't lower the cost other then the price of shipping. And my understanding is that shipping costs are generally a tiny faction of the cost of most items. I think there's a popular conception that it should be cheaper. Just like if I use oil in Saudi Arabia it should be cheaper. But if I live in Saudi Arabia and I've got a bunch of oil to sell how much should I charge for it? Should I charge non-Saudi's the same? There's an assumption that the answer to the second question is "no". I don't think that's how it works.

reacharavindh 8y ago

I don't think China is leaving anything in the dust. Germany, Japan, and US manufacturers will always have the western market to cater to. I can't find any Chinese manufactured car(technologically Chinese, not the ownership like Volvo- Geely) that is challenging Tesla, Nissan or even VW group(which is already underwhelming for now with only promises for future to show). There is a fundamental skepticism towards Chinese goods when it comes to quality and safety. I'd be very hesitant to buy something that can literally kill me from a "proudly Chinese" brand. May be others feel differently. I'm just stating my opinion.

coredog64 8y ago
I owned a Chinese car for about 2 years (Great Wall Haval H5). Even with tariffs, it was cheaper than European cars and came with more features. Allegedly they licensed the prior 4Runner platform for suspension. They used a Japanese engine, and then kinda copied Mitsubishi SUV styling. Overall, my initial impression was favorable. Over the two years I noticed that it didn't hold up as well as I would have expected: The power windows quit in the down position. It ate batteries. The engine accessories weren't engineered by anyone who had ever owned a car before (belt tension was a single bolt rather than an adjustable idler arm). I'd probably buy one again, but not as my only car, and with the understanding that I'd be putting a lot of effort into maintaining it.
- wil421 8y ago
  Basically the car is more expensive because of the terrible quality. Your car literally broke after 2 years, most cars I’ve considered buying new have at least 3 year bumper to bumper warranty and 5 years or more for engine and transmission. Your experience sounds absolutely terrible and I’m not sure why you’d buy another. The most basic Honda or a little French/Italian car would surely do. The Germans cars command a premium.

deleted 8y ago

[deleted]

gamblor956 8y ago

If by "in the dust" you mean the Chinese EVs are stuck in the dust where their batteries or engines failed, I would agree. Nearly every non-Chinese transit agency that has purchased a Chinese-built mass transit EV has either severely downgraded their orders or cancelled them outright due to the abysmal quality of the vehicles. In states like CA, the vehicles are so unreliable they would be classified as lemons if purchased by consumers...

Bjorkbat 8y ago
Albuquerque resident, can confirm, we returned all the electric buses we ordered. Pretty sure one of them even broke down shortly after leaving the city.
polskibus 8y ago
Do you have a link for stats or a wider study? I would love to share them , as my local gov also considers those buses
akfanta 8y ago
Any sources on these? If they are that unreliable, how are they working so well in China? Of a few cities I have been to in the past few years, their taxi and buses have gone all electric. The whole city relies on them, I seriously doubt they have major reliability issues.
- newnewpdro 8y ago
  They might just keep a lot of spare capacity to deal with the poor quality.
- clairity 8y ago
  here's an LA times article about metro's issues with byd buses: https://www.latimes.com/local/lanow/la-me-electric-buses-20180520-story.html https://www.latimes.com/local/lanow/la-me-electric-buses-201...
- gamblor956 8y ago
  In China they have the power to disappear you if you rip off or otherwise embarrass the government. That tends to keep people in line when dealing with state agencies. In the West we have niceties like due process, especially for white collar crimes, and our punishments for such crimes are rarer and much less severe. (And for those who don't believe me, read up on the 2 Canadians who were disappeared last week for non-crimes as a result of Canada-Chinese tensions.)