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I’m not in the car biz and I’ve seen this coming with clarity for over a decade. If I can see it then how is it that every car company hasn’t been preparing lo

by api 3y ago

I’m not in the car biz and I’ve seen this coming with clarity for over a decade. If I can see it then how is it that every car company hasn’t been preparing low cost EV offerings of their own? A few are but most seem in denial. Ford is the only US one I’ve heard rumors about having something in the works. Tesla meanwhile spent tons of capital and time on ridiculous microniche products like the cybertruck.

LunaSea 3y ago
> If I can see it then how is it that every car company hasn’t been preparing low cost EV offerings of their own? Because the low cost Chinese EVs is a dumping operation organised by China thanks to low cost manufacturing and large public subsidies. You can't necessarily compete against this as a company if your government doesn't protect you.
- __alexs 3y ago
  Dumping is a specific thing. Are Chinese EVs priced lower in international markets than domestically?
  - echoangle 3y ago
    Is that a requirement for dumping? Isn’t Dumping just selling at a loss?
    - dagw 3y ago
      Is that a requirement for dumping? From a legal/WTO case standpoint, yes. Selling at a loss in general is perfectly legal, and lots of companies do that for all kinds of perfectly legitimate reasons. Using price discrimination to sell at a loss only in certain markets with the intention of damaging the domestic market in that region is when you get into trouble.
  - LunaSea 3y ago
    > Dumping is a specific thing. Are Chinese EVs priced lower in international markets than domestically? I'm not sure but I don't believe that the price difference between China and the rest of the world would be the issue. The biggest problem is killing of the international competition by having artificially low prices.
    - blitzar 3y ago
      > by having artificially low prices Chinese car manufacturers probably make more $'s on each car sold than US manufactures.
      - mythhabit 3y ago
        That not hard if your production and/or materials is subsidised by the state, in an attempt to outcompete western companies.
        blitzar 2y ago
        > subsidised by the state Like the $7b in subsidies each for ford and gm or the 100bn in free loans? Perhaps the 3bn in subsidies for tesla.
        mythhabit 2y ago
        Not saying USA is not doing it, and both Germany and France is doing it as well in the wake of Corona. But the amount is visible and until we get more transparency, we can only assume that China is doing it even more, because they are known to do that for strategically important sectors.
    - __alexs 2y ago
      Under the WTO definition of dumping it absolutely is. https://www.wto.org/english/tratop_e/adp_e/adp_e.htm https://www.wto.org/english/tratop_e/adp_e/adp_e.htm
  - mauvehaus 3y ago
    Dumping is more specific than that. What you're describing is simple price discrimination. Dumping additionally requires that the good be sold internationally for less than the cost of production.
  - deleted 3y ago
    [deleted]
- bryanlarsen 3y ago
  AFAICT China isn't dumping. They're subsidizing internal consumption. A Chinese EV is ~$10,000 cheaper in China than it is outside of China. This is a massive advantage to Chinese vehicle manufacturers. They can scale up production using the internal market, and then use that scale to push down the external unsubsidised price. Pretty much exactly the same as the US. An American EV is about $10,000 cheaper in the US than elsewhere. $7500 because of the rebate, and the rest in shipping and other costs.
Rinzler89 3y ago
>I’m not in the car biz and I’ve seen this coming with clarity for over a decade. Me too. I was working in the German automotive industry back then, and left when I saw Tesla and China going full steam ahead on all things EV while German car makers were still pushing on diesel, and still do. >If I can see it then how is it that every car company hasn’t been preparing low cost EV offerings of their own? For the same reason Kodak invented the first digital camera and then shelved it to not compete with their film manufacturing business long enough for the Japanese to beat them at digital and kill them. Big corporations are fiefdoms with vested interest to maintain their status quo, not to push to company to self-disrupt itself, meaning they'll just wait and watch someone else eats their lunch.
- mcntsh 3y ago
  German cars are notorious for having unreliable electrical components. Now imagine the whole car is electric.
  - The_Colonel 3y ago
    German cars usually have (together with Japanese, I'd say) the best reputation in reliability. And ICE cars are full of electrical components, perhaps more so than the electric cars (since ICE cars are generally more complex than electric ones). So I struggle to reconcile your comment with what I hear ...
    - gorbypark 3y ago
      Reputation for reliability doesn't mean reliable! In most top 10 list of reliable car brands (as a whole) there might be one or two German brand in there (with Mini usually being the highest of the German brands).
    - dosethree 3y ago
      I've never heard of german cars being known for most reliable. And when they break they are the most expensive to fix. For example audis always had issues with oil leaking and in the US audi mechanics charge the most per hour and they are hard to work on. according to consumer reports, bmw is the most reliable at 9th most reliable automaker, audi and merc are way down
rsynnott 3y ago
> If I can see it then how is it that every car company hasn’t been preparing low cost EV offerings of their own? They... have, though? As far as I know, most of the European ones have at least one more or less ready to go. Generally not on the _extreme_ low end (ie not competing with the 10k BYD), but Renault, VW and Stellantis all have models in the 20-25k range pre-subsidy due to launch in the next year. The Dacia Spring (20k) has already been out for a bit, of course.
- Rinzler89 3y ago
  Dacia Spring is a Chinese designed and built car with a Dacia badge on it. It's really not great by EU standards[1]. The steel panels on it are incredibly thin and flimsy. It's more of an four wheel electric tuk-tuk with a shell, designed to reach a cheap EV price point. For some users that's good enough but for some it's a no-go. [1] https://www.youtube.com/watch?v=hrXgJD4tooI https://www.youtube.com/watch?v=hrXgJD4tooI
mschuster91 3y ago
> If I can see it then how is it that every car company hasn’t been preparing low cost EV offerings of their own? Because they didn't believe that EVs or small cars were something that could be profitable, at least not compared to the high margin, cash cow SUVs. Instead, they did what they did the last few decades - invest into lobbying to keep emission standards relaxed. Only when Volkswagen and a fair few others got caught cheating, that business model went down the drain and suddenly they had to change. > A few are but most seem in denial. Ford is the only US one I’ve heard rumors about having something in the works. BMW is investing almost two billion dollars into its Spartanburg plant to produce electric versions of the X series SUVs [1]. > Tesla meanwhile spent tons of capital and time on ridiculous microniche products like the cybertruck. Indeed. The thing is a joke on wheels... it shows that unlike SpaceX with Gwynne Shotwell, Tesla (and Twitter) don't have an "Elon handler" responsible for pushing back. [1] https://www.press.bmwgroup.com/global/article/detail/T0422170EN/ready-for-the-electric-future:-groundbreaking-on-new-bmw-group-high-voltage-battery-assembly-factory-in-south-carolina-usa?language=en https://www.press.bmwgroup.com/global/article/detail/T042217...
- api 3y ago
  Tangent but: the ultimate "Elon handler" at SpaceX is not just Shotwell but NASA, the DOD, and their satellite customers. Space launch is not like cars or really most other products. Your customer is highly technical and highly informed and they absolutely will not launch on a rocket that doesn't meet certain design criteria and in many cases they will require the ability to review the rocket's actual design blueprints and software (with NDA in place). NASA and the DOD will demand this, full stop. If SpaceX didn't have someone like Shotwell pretty much running the show there's no chance they'd ever get a customer beyond the low end of the satellite launch market. They'd also have trouble getting the FAA to allow them to fly, and with good reason. A rocket is basically a bomb that explodes in one direction, and many of its failure modes involve it exploding in all directions. Elon's been great (at least in the past) at assembling teams, getting funding, and motivating people to do really hard shit. (Not sure how he'd fare today with his baggage... his brand has taken a hit.) He also knows enough about engineering to hire competent engineers. Beyond that I see little sign that he's actually good at managing or day to day operation and certainly seems no good at product design. This differs from Jobs who at least had killer intuition there. Jobs would have laughed the cybertruck out of the room.
panick21_ 3y ago
Because its not as easy as just saying "lets make low cost EV". That has to do with battery and supplychain. EV already need gigantic capital investment on it own. All these companies have massive debt, low margin, need to continue to make money on ICE.l, transition to EV. To also make a profital low cost EV is insanly hard. They are struggling to develop a profitable high cost EV. A lot of the supply chain is in China, so investing in that is pretty hard.
- acdha 3y ago
  It’s true that they need to invest more but that’s a self-inflicted problem: they have enormous resources and lavish government support available but they really want the high-margin light-truck era to continue and have been treating EVs as a fad they’ll support only if ICE buyers are willing to overpay as much as ICE SUV buyers have. We’re reading about Ford cancelling battery plants, not being unable to find funding. When Chevy cancelled the Bolt, it was their best selling EV - but not nearly as profitable as the luxury models they wanted people to buy.
  - panick21_ 3y ago
    Every Bolt they sold was losing them money. Like literally making significant negative money. Its simply impossible for them to scale up the Bolt as is. Their plan was to rebase the Bolt onto the Ultium platform, but with all the issues they had on that platform, they weren't able to do it. If it was on Ultium then maybe they could not lose money on it.
    - acdha 3y ago
      That’s a separate issue: the point was that there’s demand at normal price points, less so in the higher-end ranges they targeted. Most of the commonly cited reasons for the low 1-2% margins were things like battery plants where startup costs are high but will not be a problem when they resolve yield issues.
      - panick21_ 2y ago

by api 3y ago

LunaSea 3y ago

> If I can see it then how is it that every car company hasn’t been preparing low cost EV offerings of their own? Because the low cost Chinese EVs is a dumping operation organised by China thanks to low cost manufacturing and large public subsidies. You can't necessarily compete against this as a company if your government doesn't protect you.

__alexs 3y ago
Dumping is a specific thing. Are Chinese EVs priced lower in international markets than domestically?
- echoangle 3y ago
  Is that a requirement for dumping? Isn’t Dumping just selling at a loss?
  - dagw 3y ago
    Is that a requirement for dumping? From a legal/WTO case standpoint, yes. Selling at a loss in general is perfectly legal, and lots of companies do that for all kinds of perfectly legitimate reasons. Using price discrimination to sell at a loss only in certain markets with the intention of damaging the domestic market in that region is when you get into trouble.
- LunaSea 3y ago
  > Dumping is a specific thing. Are Chinese EVs priced lower in international markets than domestically? I'm not sure but I don't believe that the price difference between China and the rest of the world would be the issue. The biggest problem is killing of the international competition by having artificially low prices.
  - blitzar 3y ago
    > by having artificially low prices Chinese car manufacturers probably make more $'s on each car sold than US manufactures.
    - mythhabit 3y ago
      That not hard if your production and/or materials is subsidised by the state, in an attempt to outcompete western companies.
      - blitzar 2y ago
        > subsidised by the state Like the $7b in subsidies each for ford and gm or the 100bn in free loans? Perhaps the 3bn in subsidies for tesla.
        mythhabit 2y ago
        Not saying USA is not doing it, and both Germany and France is doing it as well in the wake of Corona. But the amount is visible and until we get more transparency, we can only assume that China is doing it even more, because they are known to do that for strategically important sectors.
  - __alexs 2y ago
    Under the WTO definition of dumping it absolutely is. https://www.wto.org/english/tratop_e/adp_e/adp_e.htm https://www.wto.org/english/tratop_e/adp_e/adp_e.htm
- mauvehaus 3y ago
  Dumping is more specific than that. What you're describing is simple price discrimination. Dumping additionally requires that the good be sold internationally for less than the cost of production.
- deleted 3y ago
  [deleted]
bryanlarsen 3y ago
AFAICT China isn't dumping. They're subsidizing internal consumption. A Chinese EV is ~$10,000 cheaper in China than it is outside of China. This is a massive advantage to Chinese vehicle manufacturers. They can scale up production using the internal market, and then use that scale to push down the external unsubsidised price. Pretty much exactly the same as the US. An American EV is about $10,000 cheaper in the US than elsewhere. $7500 because of the rebate, and the rest in shipping and other costs.

Rinzler89 3y ago

>I’m not in the car biz and I’ve seen this coming with clarity for over a decade. Me too. I was working in the German automotive industry back then, and left when I saw Tesla and China going full steam ahead on all things EV while German car makers were still pushing on diesel, and still do. >If I can see it then how is it that every car company hasn’t been preparing low cost EV offerings of their own? For the same reason Kodak invented the first digital camera and then shelved it to not compete with their film manufacturing business long enough for the Japanese to beat them at digital and kill them. Big corporations are fiefdoms with vested interest to maintain their status quo, not to push to company to self-disrupt itself, meaning they'll just wait and watch someone else eats their lunch.

mcntsh 3y ago
German cars are notorious for having unreliable electrical components. Now imagine the whole car is electric.
- The_Colonel 3y ago
  German cars usually have (together with Japanese, I'd say) the best reputation in reliability. And ICE cars are full of electrical components, perhaps more so than the electric cars (since ICE cars are generally more complex than electric ones). So I struggle to reconcile your comment with what I hear ...
  - gorbypark 3y ago
    Reputation for reliability doesn't mean reliable! In most top 10 list of reliable car brands (as a whole) there might be one or two German brand in there (with Mini usually being the highest of the German brands).
  - dosethree 3y ago
    I've never heard of german cars being known for most reliable. And when they break they are the most expensive to fix. For example audis always had issues with oil leaking and in the US audi mechanics charge the most per hour and they are hard to work on. according to consumer reports, bmw is the most reliable at 9th most reliable automaker, audi and merc are way down

rsynnott 3y ago

> If I can see it then how is it that every car company hasn’t been preparing low cost EV offerings of their own? They... have, though? As far as I know, most of the European ones have at least one more or less ready to go. Generally not on the _extreme_ low end (ie not competing with the 10k BYD), but Renault, VW and Stellantis all have models in the 20-25k range pre-subsidy due to launch in the next year. The Dacia Spring (20k) has already been out for a bit, of course.

Rinzler89 3y ago
Dacia Spring is a Chinese designed and built car with a Dacia badge on it. It's really not great by EU standards[1]. The steel panels on it are incredibly thin and flimsy. It's more of an four wheel electric tuk-tuk with a shell, designed to reach a cheap EV price point. For some users that's good enough but for some it's a no-go. [1] https://www.youtube.com/watch?v=hrXgJD4tooI https://www.youtube.com/watch?v=hrXgJD4tooI

mschuster91 3y ago

> If I can see it then how is it that every car company hasn’t been preparing low cost EV offerings of their own? Because they didn't believe that EVs or small cars were something that could be profitable, at least not compared to the high margin, cash cow SUVs. Instead, they did what they did the last few decades - invest into lobbying to keep emission standards relaxed. Only when Volkswagen and a fair few others got caught cheating, that business model went down the drain and suddenly they had to change. > A few are but most seem in denial. Ford is the only US one I’ve heard rumors about having something in the works. BMW is investing almost two billion dollars into its Spartanburg plant to produce electric versions of the X series SUVs [1]. > Tesla meanwhile spent tons of capital and time on ridiculous microniche products like the cybertruck. Indeed. The thing is a joke on wheels... it shows that unlike SpaceX with Gwynne Shotwell, Tesla (and Twitter) don't have an "Elon handler" responsible for pushing back. [1] https://www.press.bmwgroup.com/global/article/detail/T0422170EN/ready-for-the-electric-future:-groundbreaking-on-new-bmw-group-high-voltage-battery-assembly-factory-in-south-carolina-usa?language=en https://www.press.bmwgroup.com/global/article/detail/T042217...

api 3y ago
Tangent but: the ultimate "Elon handler" at SpaceX is not just Shotwell but NASA, the DOD, and their satellite customers. Space launch is not like cars or really most other products. Your customer is highly technical and highly informed and they absolutely will not launch on a rocket that doesn't meet certain design criteria and in many cases they will require the ability to review the rocket's actual design blueprints and software (with NDA in place). NASA and the DOD will demand this, full stop. If SpaceX didn't have someone like Shotwell pretty much running the show there's no chance they'd ever get a customer beyond the low end of the satellite launch market. They'd also have trouble getting the FAA to allow them to fly, and with good reason. A rocket is basically a bomb that explodes in one direction, and many of its failure modes involve it exploding in all directions. Elon's been great (at least in the past) at assembling teams, getting funding, and motivating people to do really hard shit. (Not sure how he'd fare today with his baggage... his brand has taken a hit.) He also knows enough about engineering to hire competent engineers. Beyond that I see little sign that he's actually good at managing or day to day operation and certainly seems no good at product design. This differs from Jobs who at least had killer intuition there. Jobs would have laughed the cybertruck out of the room.

panick21_ 3y ago

Because its not as easy as just saying "lets make low cost EV". That has to do with battery and supplychain. EV already need gigantic capital investment on it own. All these companies have massive debt, low margin, need to continue to make money on ICE.l, transition to EV. To also make a profital low cost EV is insanly hard. They are struggling to develop a profitable high cost EV. A lot of the supply chain is in China, so investing in that is pretty hard.

acdha 3y ago
It’s true that they need to invest more but that’s a self-inflicted problem: they have enormous resources and lavish government support available but they really want the high-margin light-truck era to continue and have been treating EVs as a fad they’ll support only if ICE buyers are willing to overpay as much as ICE SUV buyers have. We’re reading about Ford cancelling battery plants, not being unable to find funding. When Chevy cancelled the Bolt, it was their best selling EV - but not nearly as profitable as the luxury models they wanted people to buy.
- panick21_ 3y ago
  Every Bolt they sold was losing them money. Like literally making significant negative money. Its simply impossible for them to scale up the Bolt as is. Their plan was to rebase the Bolt onto the Ultium platform, but with all the issues they had on that platform, they weren't able to do it. If it was on Ultium then maybe they could not lose money on it.
  - acdha 3y ago
    That’s a separate issue: the point was that there’s demand at normal price points, less so in the higher-end ranges they targeted. Most of the commonly cited reasons for the low 1-2% margins were things like battery plants where startup costs are high but will not be a problem when they resolve yield issues.
    - panick21_ 2y ago