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Charlie Munger says BYD is so far ahead of Tesla in China it’s almost ridiculous

6 points by SirLJ 4y ago

taeric 4y ago
Disappointing article without any details. Better batteries? Cheaper cars? How is the safety?
- ggm 4y ago
  Smaller batteries but adequate. 300km WLTP. Sure, you can't drive to the outback and tow a dead camel. Nobody in the city does. It will be fine for beach runs and shopping. Significantly cheaper. 1/2 the cost on-road. $40k vs $80k. (thats $AUD.) NCAP rated (in Australia). Less features, but enough of the core ones to matter. It does Android and Apple. Guess what: you can't legally use fully self-driving even if it exist beyond phantomware. So, there's no up-sell to FSD in my market. Guess what: if you turn on 'extreme mode' in your Tesla and do 0-100km/h in 3s you will be arrested, or caught by a camera, or fined, or all three. Again, its not that big a deal. The BYDs 0-100km/h is 8s which is respectable for that market segment. I've driven cars which took longer. I like enough torque to get ahead at a light, and overtake, and it's got that. Adequate dealer network. They formed relationships with established market players (Eagers) BYD had been selling ICE for a while before 2022 As do Great Wall (the Ora) and others. Its not a top name brand, but give it time, and it will be.
  - taeric 4y ago
    And safety? Most of these points make sense. But the article was bragging about them raising costs. Which made it sound like they were at parity, not that they undercut. Do they get extra subsidies from the government? Or are they cheaper to make? If cheaper to make, why?
    - ggm 4y ago
      > And safety? NCAP. google it. they're 5 star rated. > Do they get extra subsidies from the government? Or are they cheaper to make? Almost certainly yes. And, very possibly yes (to build cost) but also no: The rate of profit per car in Tesla is 9x normal. (or some other fantastic number). Tesla has extreme price:cost mismatch, and is coining it hand over fist. BYD are happy with more normal rate of profit, and are aggressively building market share. They're different games. The endpoint is unclear but in the meantime what BYD do, suits me as a future customer. It would be cheaper for two basic reasons: Its in an economy with different costs of labour (China) and different paths to it's supply chain for Batteries and inputs. Tesla is also in that economy now, making the 3 in volume. Its using modified battery tech from that marketplace. It still can't make a car for the same pricepoint, or if it can, it's decided not to. My bet is that a Tesla IS more expensive to make because of a higher chipcount for all the foo-fah around FSD and things which BYD is saying it's market doesn't want right now. But, that would be marginal to engine and battery and body cost. I suspect the fantastic (truly! awesome) single-press bodyparts in Tesla are cheaper in the long run, but for now, have a massive sunk cost to recover against traditional robot-welded bodies. btw, BYD operate in an economy where employer-employee pay and conditions negotiations are quite different. That said, they do recognize Unions. Tesla likes to believe they don't matter. They're wrong.
      - taeric 4y ago
        Apologies, missed this. I see they are 5 star rated, but I don't know how to compare two 5 star rated things. :D As an easy example, Volvo is one that has been consistently ahead of the pack in safety. Such that I would more than cede they win at safety compared to cheaper cars. Even at the same rating.
    - quantified 4y ago
      Are you asking about safety with respect to the Chinese market or the US market? Safe enough for China means selling into that big market.
      - ggm 4y ago
        https://www.euroncap.com/en/results/byd/atto+3/46635 https://www.euroncap.com/en/results/byd/atto+3/46635 Thats the EU NCAP rating. Australia, there's a kerfuffle about something, like front seat child restraint mounts, which is being resolved. TL;DR yes, standards might be laxer in China mainland, but this vehicle meets European safety norms: it has to, to be viable for worldwide import. This is a pretty rigorous crash test/resiliency/safety test.
      - taeric 4y ago
        I was only asking relative to Tesla, honestly. Though, I grant I'm curious why the cars aren't available in the US?
ggm 4y ago
Telsa have a very loyal market of owners. They will repeat buy in due course. Tesla have a very strong positioning in the market, outside of the US: its seen as a prestige buy. Odd, given issues around build quality, and what you get for equivalent $ buying from mainstream ICE engines. But none the less, the one thing nobody says a Tesla is about, is value for money bottom-price purchase. That badge is slipping as other EV come to market. Somehow, the lipgloss is sticking around. Prestige car doesn't mean luxe. It's not a Veyron. Its the affordable luxury buy which says "I have disposable income" BYD are selling commodity cars at volume. They are aggressive on price competition. I might want a Tesla, but on my disposable income, I'm going to buy a BYD or a Great Wall Ora, or an MG EV. They sell out their entire stock for Australia in 15 minutes, and the boats keep on coming. I'm driving an i30 Hyundai, it cost 2/3 of my previous 2 litre turbo Mazda 6, which I drove for 15 years: turning this Hyundai inside its 7 year warranty/maint window, to retain some value, and move to EV, I expect to pay about "double" my initial entry cost for an i30. A Tesla would be 3 or 4x that cost in local dollars. I just can't justify that spend. You can make good profit selling luxury goods, but some investors prefer shares in a baked-bean cans company: you get consistent product, which sells forever, in huge markets, and scales to meet the market. There are huge positives to Tesla. The package is good. The milage is good. The model is good. It's too expensive for most of the car buying market and a BYD is simply closer to the natural buy point.

6 points by SirLJ 4y ago

taeric 4y ago

Disappointing article without any details. Better batteries? Cheaper cars? How is the safety?

ggm 4y ago
Smaller batteries but adequate. 300km WLTP. Sure, you can't drive to the outback and tow a dead camel. Nobody in the city does. It will be fine for beach runs and shopping. Significantly cheaper. 1/2 the cost on-road. $40k vs $80k. (thats $AUD.) NCAP rated (in Australia). Less features, but enough of the core ones to matter. It does Android and Apple. Guess what: you can't legally use fully self-driving even if it exist beyond phantomware. So, there's no up-sell to FSD in my market. Guess what: if you turn on 'extreme mode' in your Tesla and do 0-100km/h in 3s you will be arrested, or caught by a camera, or fined, or all three. Again, its not that big a deal. The BYDs 0-100km/h is 8s which is respectable for that market segment. I've driven cars which took longer. I like enough torque to get ahead at a light, and overtake, and it's got that. Adequate dealer network. They formed relationships with established market players (Eagers) BYD had been selling ICE for a while before 2022 As do Great Wall (the Ora) and others. Its not a top name brand, but give it time, and it will be.
- taeric 4y ago
  And safety? Most of these points make sense. But the article was bragging about them raising costs. Which made it sound like they were at parity, not that they undercut. Do they get extra subsidies from the government? Or are they cheaper to make? If cheaper to make, why?
  - ggm 4y ago
    > And safety? NCAP. google it. they're 5 star rated. > Do they get extra subsidies from the government? Or are they cheaper to make? Almost certainly yes. And, very possibly yes (to build cost) but also no: The rate of profit per car in Tesla is 9x normal. (or some other fantastic number). Tesla has extreme price:cost mismatch, and is coining it hand over fist. BYD are happy with more normal rate of profit, and are aggressively building market share. They're different games. The endpoint is unclear but in the meantime what BYD do, suits me as a future customer. It would be cheaper for two basic reasons: Its in an economy with different costs of labour (China) and different paths to it's supply chain for Batteries and inputs. Tesla is also in that economy now, making the 3 in volume. Its using modified battery tech from that marketplace. It still can't make a car for the same pricepoint, or if it can, it's decided not to. My bet is that a Tesla IS more expensive to make because of a higher chipcount for all the foo-fah around FSD and things which BYD is saying it's market doesn't want right now. But, that would be marginal to engine and battery and body cost. I suspect the fantastic (truly! awesome) single-press bodyparts in Tesla are cheaper in the long run, but for now, have a massive sunk cost to recover against traditional robot-welded bodies. btw, BYD operate in an economy where employer-employee pay and conditions negotiations are quite different. That said, they do recognize Unions. Tesla likes to believe they don't matter. They're wrong.
    - taeric 4y ago
      Apologies, missed this. I see they are 5 star rated, but I don't know how to compare two 5 star rated things. :D As an easy example, Volvo is one that has been consistently ahead of the pack in safety. Such that I would more than cede they win at safety compared to cheaper cars. Even at the same rating.
  - quantified 4y ago
    Are you asking about safety with respect to the Chinese market or the US market? Safe enough for China means selling into that big market.
    - ggm 4y ago
      https://www.euroncap.com/en/results/byd/atto+3/46635 https://www.euroncap.com/en/results/byd/atto+3/46635 Thats the EU NCAP rating. Australia, there's a kerfuffle about something, like front seat child restraint mounts, which is being resolved. TL;DR yes, standards might be laxer in China mainland, but this vehicle meets European safety norms: it has to, to be viable for worldwide import. This is a pretty rigorous crash test/resiliency/safety test.
    - taeric 4y ago
      I was only asking relative to Tesla, honestly. Though, I grant I'm curious why the cars aren't available in the US?

ggm 4y ago

Telsa have a very loyal market of owners. They will repeat buy in due course. Tesla have a very strong positioning in the market, outside of the US: its seen as a prestige buy. Odd, given issues around build quality, and what you get for equivalent $ buying from mainstream ICE engines. But none the less, the one thing nobody says a Tesla is about, is value for money bottom-price purchase. That badge is slipping as other EV come to market. Somehow, the lipgloss is sticking around. Prestige car doesn't mean luxe. It's not a Veyron. Its the affordable luxury buy which says "I have disposable income" BYD are selling commodity cars at volume. They are aggressive on price competition. I might want a Tesla, but on my disposable income, I'm going to buy a BYD or a Great Wall Ora, or an MG EV. They sell out their entire stock for Australia in 15 minutes, and the boats keep on coming. I'm driving an i30 Hyundai, it cost 2/3 of my previous 2 litre turbo Mazda 6, which I drove for 15 years: turning this Hyundai inside its 7 year warranty/maint window, to retain some value, and move to EV, I expect to pay about "double" my initial entry cost for an i30. A Tesla would be 3 or 4x that cost in local dollars. I just can't justify that spend. You can make good profit selling luxury goods, but some investors prefer shares in a baked-bean cans company: you get consistent product, which sells forever, in huge markets, and scales to meet the market. There are huge positives to Tesla. The package is good. The milage is good. The model is good. It's too expensive for most of the car buying market and a BYD is simply closer to the natural buy point.