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Politics : Rat's Nest - Chronicles of Collapse

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To: Wharf Rat who wrote (23846)2/27/2024 2:04:33 PM
From: Wharf Rat   of 23912
Chinese EVs Have Detroit in the Crosshairs, and by the Shorthairs – This is Not Cool (

Surprisingly entertaining and informative conversation above.
Another sad reminder that US Auto makers had a 30 year lead on the world in producing sustainable cars – and deliberately walked away from it.
Out of greed, they betrayed their country, their workers, the taxpayers who bailed them out, and their own children’s future.

Robinson Meyer in the New York Times:

It happened very quickly — so fast that you might not have noticed it. Over the past few months, America’s Big Three automakers — Ford, General Motors and Stellantis, the oddly named company that owns Dodge, Chrysler and Jeep — landed in big trouble.

I realize this may sound silly. Ford, General Motors and Stellantis made billions in profit last year, even after a lengthy strike by autoworkers, and all three companies are forecasting a big 2024. But recently, the Big Three found themselves outmaneuvered and missing their goals for electric vehicle sales at the same time that a crop of new affordable, electrified foreign cars appeared, ready to flood the global market.

About a decade ago, America bailed out the Big Three and swore it wouldn’t do it again. But the federal government is going to have to help the Big Three — and the rest of the U.S. car market — again very soon. And it has to do it in the right way — now — to avoid the next auto bailout.

The biggest threat to the Big Three comes from a new crop of Chinese automakers, especially BYD, which specialize in producing plug-in hybrid and fully electric vehicles. BYD’s growth is astounding: It sold three million electrified vehicles last year, more than any other company, and it now has enough production capacity in China to manufacture four million cars a year. But that isn’t enough: It’s building new factories in Brazil, Thailand, Hungary and Uzbekistan, which will produce even more cars, and it may soon add Indonesia and Mexico to that list. A deluge of electric vehicles is coming.

BYD’s cars deliver great value at prices that beat anything coming out of the West. Earlier this month, BYD unveiled a plug-in hybrid that gets decent all-electric range and will retail for just over $11,000. How can it do that? Like other Chinese manufacturers, BYD benefits from its home country’s lower labor costs, but this explains only some of its success. The fact is that BYD — and Chinese automakers like Geely, which owns Volvo Cars and Polestar brands — are very good at making cars. They have leveraged China’s dominance of the battery industry and automated production lines to create a juggernaut.

The Chinese automakers, especially BYD, represent something new in the world. They signal that China’s decades-long accretion of economic complexity is almost complete: Whereas the country once made toys and clothes, and then made electronics and batteries, now it makes cars and airplanes. What’s more, BYD and other Chinese automakers are becoming virtually global car companies, capable of manufacturing electric cars that can compete directly with gas-burning cars on cost.

That is, on the surface, a good thing. Electric cars need to get cheaper and more abundant if we are to have any hope of meeting our global climate goals. But it poses some immediate and thorny problems for American policymakers. After BYD announced its $11,000 plug-in hybrid, it posted on the Chinese social media platform Weibo that “the price will make [gasoline] car assemblers tremble.” The problem is many of those gasoline carmakers are American.

Ford and GM plotted an ambitious E.V. transition three years ago. But it didn’t take long for them to stumble. Last year, Ford lost more than $64,000 on every E.V. that it sold. Since October, it has delayed the opening of one of its new E.V. battery plants, while GM has fumbled the start of its new Ultium battery platform, which is meant to be the foundation for all of its future electric vehicles. Ford and GM have notched some wins here — the Mustang Mach-E and Chevrolet Bolt are modest hits — but they aren’t competing at the level of Tesla or Hyundai — companies that operate factories in less union-friendly states in the Sun Belt.

Jim Farley, Ford’s chief executive, recently disclosed that the company had a secret development team building a cheap, affordable electric car to compete with Tesla and BYD. But producing electric vehicles profitably is an organizational skill, and like any skill, it takes time, effort and money to develop. Even if Ford and GM now bust out innovative new designs, they will lag behind their competition at executing them well.


Ford CEO Jim Farley is worried about competition from China’s electric vehicle makers. Chief among the threats is BYD—backed by Warren Buffett’s Berkshire Hathaway—which can produce vehicles at significantly lower costs than industry norms, partly because it owns the entire supply chain for its batteries, which account for roughly 40% of a new EV’s price.

That kind of advantage is hard to beat, and it has Ford evaluating its battery strategy. On Thursday, Farley shared thoughts on how to address the challenge from China, suggesting some cooperation among rivals may be merited on battery production.

“We can start having a competitive battery situation,” Farley told attendees at an auto conference hosted by Wolfe Research on Thursday in New York, as reportedby Reuters. “We can go to common cylindrical cells that could add a lot of leverage to our purchasing capability. Maybe we should do [this] with another OEM [automaker].”

He might well find receptive partners among his rivals—he’s not the only carmaker boss worried about BYD’s price prowess, after all.

“No one can match BYD on price. Period,” Michael Dunne, CEO of Asia-focused car consultancy Dunne Insights, told the Financial Times last month. “Boardrooms in America, Europe, Korea, and Japan are in a state of shock.”

Earlier this month, Farley told investors that Ford had “made a bet in silence two years ago” on a secret “skunkworks” team dedicated to creating a low-cost EV platform.

“It was a small group, small team, some of the best EV engineers in the world,” he said, “and it was separate from the Ford mothership. It was a startup.”

Leading that team—based in Irvine, California— is Alan Clarke, an EV engineer who spent a dozen years at Tesla before Ford hired him in 2022 as its executive director of advanced EV development. Members include engineers ??from Los Angeles–based Auto Motive Power (AMP), an energy management venture Ford acquired last year.

There’s never been any question about who Farley sees as the main competitive threat in the EV space. Speaking at a Morgan Stanley event last May, he said, “I think we see the Chinese as the main competitor, not GM or Toyota. The Chinese are going to be the powerhouse.”

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