I still think that despite, well, everything, President Biden ought to send President Trump a nice card on his birthday every year. Why? Because the Trump Administration’s stiff 27.5% tariff on Chinese-built cars is effectively what’s keeping them out of the U.S. market right now. Now even Henry Ford’s great-grandson is ringing the alarm that we have some catching up to do on the EV front before they inevitably get to U.S. shores.
A fine Monday morning to all of you in Autopia. Our staff has been given the day off out of respect for the Juneteenth holiday here in the U.S., but we have plenty of news and features on tap for you as well. And the rest of today’s news roundup that you’re currently reading includes some interesting details on China’s rural electrification struggles; Mercedes’ challenges around deploying higher levels of automated driver-assistance systems; and more news around the unfortunate Hyundai EV power loss issues. Let’s get started.
Tariffs Buy America Some Time On The EV Front
Everywhere I turn, I find some auto exec who’s at least mildly freaked out about the progress China has made in developing its EV market. The big Auto Shanghai show this spring, the first one since the pandemic broke out, was apparently a wake-up call to the rest of the auto industry; since last we all looked at this still very secretive, closed-off market, China has grown by leaps and bounds not just in EV tech but in keeping costs down. Cost, in particular, is the next big frontier to conquer. Building EVs at scale and ensuring profitably is a ways off for Hyundai, General Motors, Toyota, you name it—while BYD and its ilk are getting better and better at it.
Naturally, the Chinese automakers’ ability to sell (apparently) impressive EVs at low costs with profitable margins flies in the face of the strategy we see here: car companies will finance EV and battery development costs by selling big gas trucks and SUVs, and EVs will stay in the luxury and mid-tier price ranges until costs go down—hopefully helped along by tax breaks. But if a decent BYD EV can be sold here for $25,000, that’s a real problem.
Ford’s Executive Chairman Bill Ford sounded the alarm somewhat on CNN’s Fareed Zakaria GPS recently, and here’s Fortune to summarize:
Ford Motor Co. Executive Chairman Bill Ford Jr. said the US is “not quite yet ready” to compete with China in the production of electric vehicles and said his company is taking an “all hands on deck” approach to prepare.
“They developed very quickly, and they’ve developed them in large scale, and now they are exporting,” Ford said in an interview on CNN’s Fareed Zakaria GPS. “They are not here, but they will come here we think at some point and we need to be ready, and we’re getting ready.”
China is poised to become the world’s No. 2 exporter of passenger vehicles, potentially reshaping the global auto industry and shaking up the dominance of its car trading partners and rivals. Overseas shipments of cars made in China have tripled since 2020 to reach more than 2.5 million last year, challenging traditional car exporters such as Germany.
This is why the Inflation Reduction Act had such aggressive rules around North American battery and minerals production—if the market goes fully electric, this way we don’t cede total control of that forever to China, which is how things more or less are now.
How long do Chinese cars stay out of our market, given their skyrocketing popularity in Europe and Australia—places where people are sick of sky-high new car prices just like Americans are? U.S. Secretary of State Antony Blinken is visiting Beijing this week and relations between China and the U.S. remain, I don’t know, not amazing. But to me, it feels hard to believe rolling back car tariffs would be on the table anytime soon and not without a significant lobbying fight by the auto industry here.
But Ford’s right here. It’s not a question of if, but when.
China’s Rural Electrification Problem
I also talk to a lot of people in the auto industry and in transportation policy who occasionally border on being delusional when it comes to EVs. By that, I mean they believe that we’ll all just be driving battery cars by 2035 or so, that’s it! We’re done! Planet saved!
Yeah, no fast, I’m afraid. Besides the question of the climate impact of all the gasoline cars that will still be on the road if EVs go mainstream, it’s like… driving EVs where? In what markets? You have to admit it’s easier to electrify in Norway or California or Western Europe than it is India or Africa or Latin America—and those people deserve clean air just as much as more developed areas do.
And as far ahead as China is in the EV race, it has this same problem too. Here’s a fascinating dispatch from Bloomberg:
It’s not just price and range holding back the hundreds of millions of people who live in the thousands of small cities and rural towns across China. A lack of charging infrastructure and dealerships (many EV makers prefer a Tesla Inc.-like direct online sales channel) also deter people from going electric. Then there’s the mismatch between the sleek, tech-laden EVs popular in the wealthy metropolises of Shanghai and Shenzhen with the need for more rugged and practical vans and light trucks needed to haul everything from work tools to farm goods in rural areas.
While China has the world’s largest clean car market, selling 5.67 million such vehicles in 2022, sales have been concentrated in big cities. Overall growth is slowing and the penetration of EVs in less-developed regions is still relatively low — at 21% of new car sales in the first four months of 2023, compared to around 40% in the largest cities, according to BloombergNEF. Closing that gap is key toward China’s goal of reaching net zero emissions by 2060 and supporting the nation’s auto industry.
China’s automakers still sell a ton of hybrids and PHEVs, too. But the challenges of costs and available vehicle types are limiting EVs for those rural buyers, and the government is trying to juice sales with tax breaks and public-awareness campaigns. They’re hyping the availability of home-charging in rural areas that city-dwellers lack, and the low maintanence costs over time. I just wonder if their electric grids are ready for this—especially since the country still relies heavily on coal for power.
Anyway, it’s interesting to hear China has the same problem as America and many other places in the world, despite the early EV lead.
Mercedes’ Drive Pilot Has Big Promises, Lots Of Questions
The automakers are still chasing a dream of full autonomy for cars, but that’s a decades-off, long-term dream; I still think a car won’t be “fully self-driving” until you can take a nap in the backseat anywhere in the world and still get where you’re going without issues. That’s a very high bar to clear.
Mercedes is pushing the envelope soon with Drive Pilot, a Level 3 automated assistance system that in theory would allow this, accodring to Automotive News:
Which doesn’t sound great to me, honestly? This sounds a bit like Tesla’s Full Self-Driving Beta system (it’s nothing of the sort, to be clear) where I end up expending more mental and emotional energy minding the car than I would actually driving it myself. So one researcher describes L3 systems the way I’d describe one of our staffers’ project car ideas:
As that article explains, in an L3 system, the “human” is not considered the “driver” anymore. Drive Pilot is slated to launch on 2024 Mercedes S-Class and EQS sedans this year and on certain roads in Nevada and California, it’ll be capable of driving up to 40 mph. But the legalities around what a human passenger will be allowed to do in such a car, and who’s responsible if something goes wrong, will remain unclear for a while.
One MIT study cited here said it took an average of 6.1 seconds for a person’s attention to fully return to driving when prompted by the car. A lot can go wrong in six seconds.
NHTSA Gets Involved In Hyundai Power Loss Issues
Everybody loves the Hyundai Ioniq EVs, but they haven’t been without their problems. One annoying issue has led to a severe battery drain that’s left motorists stranded at times, as we reported a few months ago.
Now America’s federal safety regulator is stepping in. Here’s the Associated Press:
Multiple U.S. owners of Hyundai’s popular Ioniq 5 electric SUV have complained of completely or partially losing propulsive power, many after hearing a loud popping noise, the National Highway Traffic Safety Administration said Saturday.
The Office of Defects Investigation at the NHTSA has opened a preliminary investigation and says Hyundai indicated in an initial review that a power surge was damaging transistors, preventing vehicles’ 12-volt battery from recharging.
Hyundai spokesperson Ira Gabriel said the company was fully cooperating with the investigation and was launching a service campaign in July to update affected vehicles’ software and, if necessary, replace the component involved. It’s called an Integrated Control Charging Unit.
Building cars is hard—especially these new ones.
Your Turn
Chinese cars in America? Rural electrification? What’s your take on all of it?
Well, Ford are the ones who thought those dry clutch transmissions were a super cool idea, can’t figure out how to paint aluminum without it peeling off, and can’t build conventional hybrids at sufficient scale to meet demand, so it wouldn’t surprise me they’re not ready to meet Chinese EV competition. They’re a 120 year old car company that still struggles with some of the most basic parts of building cars.
Wet timing belts
Ford made about 80,000 mustangs last year. They are barely in the game. Tesla sold about 1,400,000 model Y a 3s last year. At least a third of those were in China. The Model Y is currently the best selling car in the world. Tesla is an American company.
Ford management has made decisions that leave them vulnerable, as have GMs. But Tesla shows that an American company can compete and lead internationally. Anyone, at this late date, not aware of the capabilities of the Chinese EV makers, has been asleep at the wheel for the past few years.
Biden’s Infrastructure and IRA bills have given US automakers a huge opportunity – US tax code has given them the keys to the kingdom. I’d suggest they take advantage of these windfalls and start making good decisions. If not, they have not earned a seat at the table.
Model Y was the best selling car in the world for Q1 2023, EM predicts it will finish the year that way, provided they keep the recent price cuts in place. Toyota likes being the #1 manufacturer and have the #1 model, wouldn’t be surprised if there a push to get the Corolla back to #1.
Tesla sold about 1.2m model Y’s and 3’s last year, not 1.4m of them. Corolla and RAV4 combined outsold them at 2 million or so.
“transformation is a function of three things:
1- dissatisfaction with the current state of affairs;
2- an agreeable vision of the future; &
3- a process to achieve that vision” – bert spector.
the first requirement is emerging – extinction or auto-industry collapse are not impossible outcomes.
the second requirement is perhaps in process…but perhaps not judging by the informed opinions here.
the third is a wet dream imho.
so while a transformation of the auto industry from ice to ev has begun, it’s gonna be messy.
at best.
Just joined the EV world. I’ve been building my own batteries for a couple years now for E-Bikes and Golf Carts (using cells I recover from recycling bins and test, or cells from battery hookup), and have a small power wall I built. Solar doesn’t work well at my house due to trees, and HOA, but I have a small system working at my school I run. I’ve had an E90 that I love, but since my wife wanted a new car at some point we jumped on a super base Model 3 RWD. After the tax credit it will be $32,000. Now, I’ve spent $1,500 on chargers and accessories (floor mats, roof rack), my confidence in this LFP battery is for it to last 14 years, with performance more than adequate for my whole family to drive over that period. My kids are 11 & 8 currently. I’ve never had a car payment before, never had my vehicle cost more than $5,000 before. This is an amazing deal for 80% of people who buy new sedans.
I think we do need to focus on V2G, and grid improvements more than anything. Other nations should skip traditional infrastructure and do more rail hubs, EV delivery vehicle, and e-Bike paths. Just like skipping landlines for cell phones.
I don’t follow the logic, you have never paid more than 5k for any car, you scrounge and make your own E-Bikes from scrap, yet somehow in this spendthrift mentality, you feel like $32K Car payment out of the blue is a great deal for 80% of the population. You are also basing your 14 year battery life span on what Exactly?
I built an e-kayak and was working on an e-bike before I got distracted by other things to build. I don’t do it because I’m cheap (though, I can be) or poor, but because I like making my own stuff. That he spent so little on cars for himself just means he doesn’t value throwing money at something probably boring AF that costs more (99% of vehicles, even the fast ones) and maybe he doesn’t need to drive much, so no real concerns about reliability. I’ve met millionaires with 20 yo Toyotas and broke morons with new BMWs. He also said his wife wanted a new car, so it sounds like that’s why he got it and $32k is much closer to the average price of a used car than a new one.
I have driven an EV exclusively for almost 4 years, but I don’t understand the use case for V2G. If V2G made sense, we would all have home generators that could easily tap into our car’s fuel system.
It does no one any good to lose power in their home and shortly afterwards drain all the power out of their vehicle.
V2G works when the home is largely solar (or other renewables) powered and the vehicle has a range sufficient to cover the weekly commute OR lives at home and only goes shopping occasionally. Mainly because the vehicle battery is going to be vastly larger than any house battery you can afford AND the system is designed to cope with far far higher current draws than your house would ever demand. As long as the V2G system works both ways through the charger (which is high amerage) rather than as a bolted in accessory…what you have is a rolling house battery. I’m not buying an EV without proper V2G
Patrick, great post. As always, nice to see you.
The real issue with letting the Chinese define the resource crunch to “make the energy miracle happen” is that simply mineral constraints. (NOT lithium– we have plenty of that). There’s going to be a huge crisis in mining– and only the lord knows what kind of smoke-and-mirrors tricks the Chinese will play to conceal that fact.
A simple “taster menu” on this is already in play by letting the Chinese refine ores and lithium paste ON A GRID THAT ADDS ONE COAL PLANT A WEEK.
Now apply that to the 40X volumes of copper and nickel required to make any of this feasible.
This guy lays out the ugly math in sobering terms. It simply CANNOT happen like the “true believers” think it will. It’s just mathematically impossible. The planetary risk is in all the game-playing coming into focus– which will do all it can to conceal the transformation of Indonesia into an open pit nickel mine, to name only one example.
https://youtu.be/sgOEGKDVvsg
Sorry for sounding like a broken record. I’ve told this many times before. In the US about 75% of people looking to buy a car are looking at USED cars instead of brand new cars.
Therefore when we talk about the average consumer there will be a lag from when lower priced EVs sell new and when actual masses of people really buy them. Lower and moderate income people are NOT buying ANY new cars.
So…what will the used EV market look like in 10 years? That’s the key for me. Which EVs hold up best then Tesla, European/Asian current car makers or now China.
The whole reason Japanese cars took over in the 80’s, 90’s and beyond was that they were dependable USED cars for people to buy.
Do you trust a 10 year old Tesla, Volvo EV, or Chinese EV or other?
David makes my case when he bought a used BMW i3!!!
I mostly agree, but keep in mind there are plenty of people who buy new shitboxes over quality used cars every day-your cheaper Nissans, compact chevys, and lower end jeeps are just not very good on any level yet people still choose them over a 5 year old mid grade Camry every day. I think it’ll be tough for some people to pass up a new Chinese car if it can match initial quality and keep the msrp down 20%.
Regardless it’ll take years for it to trickle through the market, and there will be plenty who keep their gas burners going longer than they would have otherwise. I’m only averaging 6-7k miles a year on my truck right now. It’d take me 32 years to hit 300k miles, which it very likely can if I stay on top of maintenance and issues. Given that todays electric vehicles will be obsolete quickly, and gas is very likely to become unreasonably expensive in the coming future, it seems like a foolish gamble to replace anything not broken in the next decade.
I think the real EV switch would happen the minute we stop subsidizing the oil industry. As soon as gas is $10/gal everyone who bought a V8 truck as their grocery getter, school run & commuter vehicle will immediately reconsider their choice.
I’ve always said that instead of subsidizing BOTH oil & EV adoption, we should do neither, and put all that money into upgrading the electric grid & charging infrastructure.
I don’t think we can flip the switch that quickly-so much of our supply and food chain is dependent on gas that it’ll take years to wind down. But I expect gas taxes will eventually go up to drive the switch and fund decarbonization efforts, while OPEC raises prices to offset loses from reduced demand. Maybe it starts in the next 5 years, maybe it takes 20.
Ideally, when the writing is on the wall for gas prices, I’ll sell the v8 truck for decent money to someone who thinks they ‘just don’t build them like they used to.’ The current reality is that the space is extremely convenient for our current lifestyle and suitable alternatives require too much money or don’t get that much better mileage (an equivalent model year sienna only gets 1-2 mpg better). It’s paid for though and we could get by without driving it much. I’ll certainly laugh at those taking out 8 year loans on platinum f250s right before the bottom falls (although it’ll certainly trigger recession).
We had bouts of $6+ gas a few years back and people were panic-trading in trucks and house-sized SUVs for small cars, so even if it won’t get all the way up to $10 there might just be some crisis to drive the oil markets back to $120/barrel, and since noone makes any small cars anymore the only option would be EVs. All that could happen even without any oil subsidies reduction or gas tax shenanigans.
Possibly. Im really hoping it happens soon so more options like the maverick (hopefully PHEV) will open up. Some people may panic buy but I don’t think (without checking to verify…) there was a year when trucks didn’t take the top 2 spots in vehicle sales.
Id wager that now, after the past two years reminded everyone how dependent food and heat prices are on oil, no politician would let gas prices spike too rapidly.
Politicians (at least ones in the US) have very little to no power over controlling gas prices, despite what they want you to believe.
The grid is actually cleaner by about 2040.
Until then? Mostly smoke and mirrors
I think it would require Kia levels of warranty mileage and years to make people feel comfy buying even a cheap Chinese EV.
I don’t know if I’d say there are plenty of people who’d rather buy a crappy new car than a used one. There are basically no cars under $20k in the market anymore, and increasingly few under $30k. Ford doesn’t make anything that costs less than an Escape. Honda doesn’t make a compact car. A $25k Maverick that’s literally longer than my fullsize pickup is considered tiny and extremely cheap.
Will this change if Chinese $15k cars come out? Maybe.
We all ready have examples of the Chinese brands such as MG and BYD entering and gaining traction quickly in the Australian and English market. US and EU have significantly more protection measures for their respective hometown manufacturers. Which is currently preventing the deluge of MG crossovers. Realistic, this all feels very temporary. Americans/ EU manufacturers seem more interested in extending loan terms then cutting price. Theoretically demand is going to drop, as there is only some many 72 month loans you can give. With every manufacturer seemingly wanting to take a chunk out of Teslas limited market. It’s now a market that’s more saturated then Insta post by an up and coming photographer. For some reason everyone is still jumping into the already crowded hot tub. Eventually lots will fill with these 50k plus electric crossovers shaped or named after old cool stuff. That’s when demand for the low end will drive a review of that previous trade policy. Boom, BYD dealers pop up like weeds. And everyone you know just bought a new 25k MG. Ford will scream it’s not far, as they hid behind protectionism, instead of actually producing a competitive product. And we all get to bail out GM again!
Bill Ford Warns America’s Not Willing To Compete With China On EVs.
Ftfy
Sure, by keeping out the competition with tariffs, Ford, et al. Can keep printing money selling huge, expensive inefficient vehicles. Assuming the cheap Chinese EVs could pass safety requirements and had ranges that made them attractive to the US market, they’d force US automakers to find a way to make competitive vehicles, just like Japanese imports did in the 1970s. Tarrifs are rarely ever the right answer.
Chinese cars in America? Buick Envision has entered the chat, with the tariff hitting it.
Rural evs are the perfect use case for plug in hybrids, I’m assuming rural means they could plug in to charge at home, and then tool around the farm or even into town on all electric, and use gas when going into ‘the big city’. Where’s our PHEV Maverick dang it???
Your PHEV Maverick is in the same queue as your hybrid Maverick – behind about 200,000 very profitable F-150s.
Except the Maverick is not built anywhere near the F-150.
But everything is still constrained. Especially chips and labor. Production floor space is always constrained. If Ford has to allocate scarce resources, it allocates them to the higher margin vehicles.
Thus, your Maverick will be arriving in 2027.
China has figured car manufacturing the same way they manufacture everything else so cheap: labor. It’s easy to keep costs down when you pay your workers barely anything for absurd hours in terrible conditions, or even have outright slavery.
“China has figured car manufacturing the same way they manufacture everything else so cheap: labor. It’s easy to keep costs down when you pay your workers barely anything for absurd hours in terrible conditions, or even have outright slavery.”
And that’s so different from LA sweatshops and US prison labor how?
The LA sweatshops and prisons are t making cars.
“Chinese cars in America?”
In my view, it a question of ‘when’ not ‘if’. And technically we already do have some Chinese vehicles on sale in the form of Volvo and Polestar… both of which are controlled by China-based Geely.
“ Rural electrification?”
You know what China is also big into? Producing solar panels and solar panel systems.
If you live in a rural area and don’t have reliable power or are not connected to the grid, you can get a battery-solar/wind system either as an off-grid setup or as a grid-tied standby system.
Doing this is way cheaper these days than it ever has been.
Of course the OTHER alternative is to revert back to horses, bicycles and walking… which is what people in rural areas had to do in the past.
Chinese cars are already here and have been for a while. The Buick Envision being one.
Much of China’s lead is not just due to Communism, it’s largely due to the fact that a significant portion of their population drives/rides scooters as a primary vehicle. Back around 2009, China decided to mandate that all scooters were electric.
As such, they have been committed to this game MUCH longer than we have been committed, at least infrastructurally and psychologically (which is probably MOST of the reason they are so ahead).
FTR, China has over 300 million electric scooters on the road…
https://www.wired.co.uk/article/why-electric-motor-scooters-are-leading-electric-vehicle-revolution-in-asia
that and well…..communist wages and civil rights abuse.
Sadly, libertarian capitalism is just as prone to wage and civil rights abuse. Victorian England was a capitalist paradise but a nightmare for the workers.
As soon as China is able to make cars that meet minimum American safety requirements, heavy tariffs will be the only thing keeping them from taking over the market completely.
Just look at other products, and it becomes clear that Americans shop primarily based on price. People will bitch about the pitch of their economy class airplane seat but not even consider purchasing an upgrade to a more comfortable eco+ row. Bringing it back to Chinese products, people will risk burning their houses down in order to save a couple bucks on an iPhone charger by buying some no-name Chinese brand (I was just in the market for a phone charger myself lately, and seeing some of the photos included in the reviews was eye-opening and enough to scare me into sticking with the pricier OEM option).
Based on the size of the tariffs, I’d expect that, if they were brought stateside, Chinese cars would be about 25% less expensive than their competition. That’s huge. I’m not in sales, but I don’t know how it’s possible to go up against a competitor whose costs are a quarter less than yours.
Does it matter? That, I don’t know. In general I’m in favor of increasing competition because that’s good for consumers, but there are plenty of geopolitical factors at play here that further complicate things.
The good thing is that all you need to get rid of the cheap & garbage option(s) is an educated consumer; the bad thing is the american consumer is anything but.
The fixation on price wouldn’t be so bad if it wasn’t at the expense of everything else. When I go to Europe, if I ask the random elderly lady at a grocery store what is the displacement of her car’s engine, in most cases she would tell me right away; here OTOH have run into a car salesman who couldn’t tell me how many cylinders the car he’s trying to sell me has. It boggled my mind.
I don’t mean to say that everybody should be a gearhead, but the US is the only place in the world where you could see a grown man with a flat tire on the side of the road waiting for hours for AAA to come change his tire because he has no idea how to do it himself.
Well, the elderly lady in Europe is also being taxed on the size of their engine, so there’s an incentive to double-check that they’re not going to be paying too much before they purchase.
So it doesn’t bother you that any random person over there would know an order of magnitude more about their car than the guy who’s job is to know that here?
Or that the old lady would have no problem changing a tire (as long as she’s physically capable), while here most people wouldn’t have a clue?
It makes me feel ashamed, and I wasn’t even born here..
Increasingly cars don’t even come with a space saver spare & instead come with a can of fix-a-flat and maybe an air pump, so even if you know How to change a tire you’re shitt out of luck anyway if that magical can can’t get you patched up enough to get back on the road this forcing said hypothetically marginally mechanically literate guy still stuck on the side of the road waiting for AAA to help
“and seeing some of the photos included in the reviews was eye-opening and enough to scare me into sticking with the pricier OEM option).”
Also made in China
I mean… yeah. But it’s less about the location where things are manufactured and more about the specifications used. iPhones themselves are made in China, but Apple is a stickler for tight tolerances and adherence to specifications — and, of course, you pay for that level of quality.
China can meet American safety requirements now, if they choose (Buick). They are very good at building to a price point. If you want cheap crap, they’ll give you a good deal on cheap crap. If you want better quality, they can do that for a price too, though you may have to watch closely so they don’t expand profit margins by sliding back into cheap crap. China is the wild west of capitalism, anything goes if you can get away with it. Except melamine added to milk/formula, which could get your corporate executives shot.
Low wages? Sure, but not really lower than other developing countries, and there are a bunch of mandatory benefits (health care, retirement, housing fund, maternity, etc.) that some jobs have in the US but some don’t.
Is it actually a problem? I could be wrong but I thought most of China’s EVs were developed for urban areas and have really small batteries with short range. America is a huge place. Short range EVs don’t really sell here. Also crash standards, I doubt any of them would pass and be legal on our roads. So who cares?
This is because, in reality, most people only travel a short range. This is really only an American thing you you need to go 300+ miles at at time, EVERY time you travel.
Yes I know, but range anxiety is still a thing.
No, you don’t need to go 300 miles every time. But when you do need to go 300-1000 miles and your car runs out of batteries after 90, what do you do?
“America is a huge place.”
So is China. China has 98% the land area of the 50 United States.
https://www.mylifeelsewhere.com/country-size-comparison/china/united-states
Why do I get they feeling they don’t have suburbs and commute 30-45 minutes each way tho?
I’m currently watching a YouTube series called “Itchy Boots”, featuring a Dutch gal riding a Honda twin all throughout Africa. From this series I’ve learned there are entire countries on that continent that have *no electricity production facilities AT ALL* and rely on cross-border electricity transmission and/or massive generator ships anchored offshore. I’m pretty sure that folks in such nations will not be driving EV anytime in the foreseeable future.
How about that Turkish generator ship that makes electricity (sporadically) for an entire African country! When you learn something like that you realize how far we are away from global decarbonization.
“I still think that despite, well, everything, President Biden ought to send President Trump a nice card on his birthday every year. Why? Because the Trump Administration’s stiff 27.5% tariff on Chinese-built cars is effectively what’s keeping them out of the U.S. market right now. Now even Henry Ford’s great-grandson is ringing the alarm that we have some catching up to do on the EV front before they inevitably get to U.S. shores.”
Why bother? Americans only want to throw massive amounts of borrowed money at giant V8 powered SUVs and trucks anyway, right Mr Ford? Isn’t that why your company keeps printing money with F-x50s and not with affordable EVs? Kill the tariff and let the market keep them out for you.
Besides it’s not like those cheap Chinese cars can pass US safety requirements.
We’re going about it all wrong and it’s mostly due to politics. The way we think about the push for this is to give out tax money for the purchase of the vehicle. Likely a better use of that would be tax incentives to develop the infrastructure necessary to support the end goal.
We all give Tesla a hard time (and rightly so in many cases) but they have done what the rest of the manufacturers have so far been unwilling to do: build out their own charging network. Hopefully with Ford and GM jumping on their bandwagon that will help but I can’t see any of them going very far outside higher population areas.
Give the local utility companies a tax incentive to upgrade the infrastructure and give apartment complexes incentives to install chargers. Then go to all the big oil gas companies and give them a break on installing chargers at all the stations and maybe we get an infrastructure that supports these goals of electrification. Not as sexy as giving out huge discounts for car sales but maybe if the government isn’t subsidizing car sales it will give the manufacturers a reason to get off their ass and make a more affordable car.
Yes, and also, PHEV’s are not at sexy as EV’s, but I’d say for most people they would be a better choice. If you drive a consistent amount daily of under 40 miles or so, you’d probably be able to do most of your driving on electric with a PHEV and the battery pack is smaller and lighter. It’s no compromises for long trips, just fill it up with gas.
Exactly why we are very serious about a PHEV when the lease is up on our hybrid. 90% of our driving is local with the occasional long drive needing the gas.
While PHEVs are a great idea and reducing the consumption of gasoline sounds nice, the premium you likely pay for a PHEV buys a lot of gas.
The RAV4 Prime SE for example is about $9k more than a RAV4 Hybrid SE ($34k-$43k). Even if gas is $7/gal, you’d need to do a lot of driving in that hybrid to burn an additional $9k in fuel. On the higher end, the Volvo XC90 PHEV is about $10k more than the regular XC90.
In your example, you’d need to drive about 1200 miles to make up the difference…
Actually, it’d be 1285-ish gallons, not miles. So unless you’re getting 1 mpg…
Even that’s not entirely correct. You’d have to save the cost of 1285 gallons of fuel by using lower cost electricity.
So if the gas hybrid gets you 35 MPG, you’re paying about a dime a mile in gasoline. A typical electric use rate (including charging losses) are about 6.5 to 9 cents per mile in most areas. (Probably higher for an upright boxy vehicle like the RAV4, but we’ll go with it..)
To make up for the additional cost of a RAV4 Hybrid Prime versus the RAV4, you need to save at least $9,000 (plus tax!) by using electricity, at a savings of 3.5 cents per mile or less… or 257,142 miles in the best case. If the operational cost of electric is only a penny per mile less, you need to go nearly a million miles on electric only to save $9,000.
The RAV4 Prime was initially priced high because it would still sell at that inflated price. At first it was green cred, HOV lane access and cash subsidies. It still has a little lower maintenance and a bit nicer driving experience. But now it sells on reputation as much as anything else.
If you’re able to charge it yourself with solar or wind power, it might still make financial sense. But most won’t drive at least a quarter million miles on electricity to make it worth the extra money.
I disagree. I’d rather the incentives (my tax dollars) come back to me as a consumer, than go to businesses that can then charge me extra for the thing that I am contributing toward.
Example: Tax dollars are put toward incentivizing the owner of an apartment complex to put in chargers. He does so, and then charges more because the chargers are an additional feature. So the owner gets to charge more for something he didn’t pay for, and the renter pays more for something he did. And since the cars are still expensive, the renter is paying for a feature he can’t use.
If you make enough money to actually contribute meaningfully to the tax break incentives for purchasing an EV, you are very likely to be ineligible to receive said incentive.
I agree. So what renters are going to be able to afford electric cars for all the chargers that the apartment owners are given money to install? Not many, but they’ll still pay for them, first with tax dollars and later with higher rents.
Since GM is already selling Chinese manufactured vehicles in the US, I don’t think it’s that far of a leap for people to buy Chinese manufactured vehicles from a Chinese-based company. Obviously it’s a more attractive proposition if the savings are there, but as we’ve seen with the Chicken Tax, the US is more than content with market competition…as long as it’s one-sided competition, so I’m sure that Trump era tariff is safe and sound. If history has shown anything, though, it’s that the Chinese are resourceful and tenacious, so if there’s a way to compete, they’ll find it.
If climate change is an existential threat and EVs can help to mitigate it, is it morally right to deny our market to Chinese EVs?
If it would push thousands of Americans out of jobs and poses a massive national security threat, is it morally right to let Chinese EVs into our market?
That “massive national security threat” argument is laughable in the face of our entire communications system being made in China, as well as most of the components that make up our cars.
As to the morality of US job losses that certainly didn’t stop US companies off shoring every job they could when it suited them. It also does not stop them from using US prisoners as an ultra cheap, quasi enslaved captive labor force.
Haven’t commented on this subject until now, but “our entire communications system being made in China,” well I’m going to stop you right there, because you’re wrong.
While the cheapest element in most individual’s communication system may be MIC (mobile phone, tablet, laptop), I assure you the billions if not trillions of dollars invested in US communications equipment that get that wireline or wireless signal to you is decidedly not Chinese.
Some small ISPs and small market cable companies went cheap and bought from Chinese companies, the vast vast majority of what is the REAL communication system in this country, is made pretty much from anywhere else. Ciena, Alcatel, Cisco, Ericsson, Fujitsu, etc, make what brings that signal around the world. How do I know, I work in that business.
Turns out, if you spend a couple decades investing in a specific area of technology, you’ll get really good at it. Also turns out, if your major competition decides to not invest in that technology, because legacy, minor oligarchs want their feed trough to continue getting filled, you’ll be ahead of your competition.
Question: Does the typical Chinese EV – even the low end models – feature Over the Air software updates?
If yes, and this is just me postulating, would it not be possible for the Chinese to brick those cars at will?
Bill Ford and all the other execs can suck it. China “developed very quickly?” Seriously? No they did not. US industrial CEOs spent 40 years directing their workers to develop China. Then those same CEOs shut down factories and tech centers across the country since they had outsourced the jobs. Now those same CEOs are shocked that China knows how manufacture?
I genuinely fucking hate these people (the CEOs, not Chinese people (or any other particular nationality)).
There is a Tom Hank movie called a Hologram for the King. In the movie, Tom Hanks plays a former executive for Schwinn bicycles. They moved manufacturing to China, setup the factories and taught the Chinese their manufacturing techniques. Eventually the Chinese were selling cheaper bikes that undercut Schwinn.
Since this was a movie and the Schwinn angle just backstory for Hank’s character, I have no idea how much reality is there. I suppose of businesses looked ahead further than their next earning report, they might make more informed decisions.
Like a CEO that cuts R&D, fires the expensive people who know how everything works for cheaper labor, and then takes a golden parachute before everything blows up. They get hailed for their great leadership and record profits. Then the next CEO comes in and finds nothing in the pipeline for new products and a hollowed out talent pool.
My 1980s vintage Schwinns were built by Giant in Tiawan.
The good stuff came from Taiwan. The cheapest bikes (the ones that could still be made profitably by low skill labour in US etc generally went to China.
I haven’t seen that film, but the story basically checks out. Most of the historic American and European ‘household’ bicycle companies like Schwinn, Huffy, Holdsworth, Raleigh etc actually kept their manufacturing local for longer than you’d expect… but when they finally offshored it to China, their decline was incredibly rapid. Those brands are now just names to be licensed.
The higher end manufacturers (Specialized, Trek, etc ) actually outsourced to Japan in the 80s and then Taiwan, but remained in control of their R&D and continued to innovate and grow. China actually makes almost all of the carbon bikes for those mainstream premium brands, but carbon is just not necessary for a good bike, and remains a niche. As it stands, aluminum bikes manufactured in Taiwan continue to dominate the world. China is a juggernaut, but they really only make bikes at the low and high end of the market.
Malaysia and Vietnam are also starting to make some of the good stuff these days.
Remember that time that Mark Fields lobbied for softer EPA rules because he didn’t see a market for EVs, hybrids, and plug-ins? Pepperidge Farms remembers.
Until last year, China required foreign automakers to partner with domestic companies to have a presence there. For example, GM had to work with SAIC.
So for almost 2 decades, GM has been working with state-owned Chinese company to build Buicks and whatever else in China. Cars that are now being exported to the US market.
And the CEOs are surprised when the Chinese domestics are getting better and able to produce a car they could export to the US? You literally taught them how to do it.
YES. The point about JVs etc. with the local state-controlled entities is a very good one. We gave the Chinese government the technology. Trained their people. Then whined when they used the knowledge to their advantage.
Well, Blinken just said today that the US doesn’t support Taiwan’s Independence, so that is a win for the M.I.C. I suppose. What a joke.
As far as stabilizing electricity throughout the world to support cars of all things? That’s kinda putting the cart before the horse. There are so many countries/territories in the world that aren’t even able to produce reliable power on a daily basis as of now. Shoot, go to Puerto Rico for a week and see how that works out if you aren’t on a generator. Hell, if the golden goose of profit makes electricity more reliable in places that need it, then that’s awesome. It won’t happen though, in my opinion, because there isn’t enough monetary incentive to do so, in the places that need it most
All the electrification of cars as a mandatory objective does is create a greater gap between the countries that have the money to dictate policies on a global level, and all those other countries that are trying to mind their own business and live their lives, being forced to comply to regulations that don’t make sense for their situation. St. Kitts would be a great example of this.
I was too late to edit (and this probably won’t help my point all that much, lol), but the last line was meant to read: St. Kitts would be a great example of this with regard to their tight relationship with Taiwan.
Not only has Taiwan been independent for over half a century by now, the US is pretty much the only reason they still are, so while it does rub me the wrong way that most of the world is willing to put up with the “one China” language crap, I’d rather it be the lip service that’s ‘pro-chinese’ while actually supporting Taiwan, rather than the other way around.
I understand your sentiment, but I disagree. Taiwan has not been independent. They have the freedom allotted to them in the same way a high school senior doesn’t have a curfew anymore but still has to check in every once in a while to get a plate at the dinner table.
As far as the lip service comment, that’s less than ideal. The only thing that this duality of “serving both masters” language accomplishes is to make money from both sides of the game. The US hasn’t done crap other than play the manager at the casino and taking the vig. There are plenty of countries that support Taiwanese independence that don’t have the “weight” to force action. The US does have this power and they refuse to use it because there is less profit in doing so.
I think you might be confusing Taiwan with Hong Kong or Macau. Taiwan is very much independent from China.
If it wasn’t, then China wouldn’t have to posture and threaten to invade it, or have the whole “one China” policy.
If Detroit fails to build long-range EVs that average working people can kind-of afford(if they go into debt for the next 6-8 years of their lives for a sub-$20k vehicle), China will do it in their place.
A streamliner sedan, wagon, or hatchback with minimal extra features with a small 25 kWh battery pack, designed to outperform cars 3x its cost or more while getting 200 miles range if you keep your foot out of it, and be reliable/repairable/inexpensive to operate, is one way to do it. The customer gets great value for their money in some facet in exchange for what they give up, and it’s something they can actually afford and will actually save them money over any competition. And with a small battery, charging time is reduced, and even a lowly 110V outlet could charge it in 12 hours without any special need to upgrade the home charging infrastructure. Use a Tesla Supercharger, and it would be comparable time expended to filling up a gas tank.
This will require a complete car weighing under 3,000 lbs with a frontal area comparable in size to a Mercedes W123 or maybe even a Saturn SL2, with a drag coefficient around 0.1X. Very doable without any exotic materials. Select the appropriate battery and drive system to have it lay down 300+ horsepower to the rear wheels, and the customer will get a LOT of value for the money without adding a lot of extra cost to the vehicle.
The SUV/CUV fad is either going to come to and end as resource constraints make themselves known, or alternatively, there will be a LOT less people in the U.S. operating cars in the coming decades. Something is going to give.
There is definitely a “Price, range, size: Pick two” phenomenon regarding electric vehicles that is going to shake up the car industry in ways we have yet to appreciate.
Manufacturers push giant gas pickups and SUVs so hard because they can sell them for 50-75% more than a comparable sedan, yet they probably only cost a few thousand extra in steel and labour to manufacture.
From what we’ve seen so far, I think it’s safe to say the cost to manufacture lithium-based vehicles will increase in a much more linear rate with size. It gives me hope that we will see an eventual downwards trend in car and truck sizes.
Imagine if people had to pay for all the gas+oil needed to run a giant truck for its lifespan upfront? I guarantee we’d see a lot less of them on the road…
True mid and full-size SUVs not withstanding, there is a fairly obvious trend of bread and butter compact CUVs basically morphing back into slightly taller versions of the hatchbacks and wagons they replaced. The Ford Escape for instance has become dramatically more aerodynamic and car-like in this last generation, aping its Mach E brethren. The CRV and RAV4 aren’t quite there yet, but are definitely trending lower and sleeker.
It’s almost like CUVs primed the public to buy cars styled to accommodate batteries under the floor…
That “Price, range, size: Pick two” phenomenon regarding electric vehicles generally applies to conventional cars that do nothing special to improve efficiency, and conventional cars have aerodynamics that have just barely caught up with the 1921 Rumpler Tropfenwagen, and they have oversized wheels and come fully loaded with all the mass-adding bells and whistles right from the factory all in the name of padding profit margin.
A more efficient vehicle platform that focuses on aerodynamic efficiency is a way to massively reduce cost by reducing the size of the battery pack needed, which by reducing that mass, has a cascading effect on the necessary mass of the components on the rest of the entire car.
We could have massive SUVs with Cd in the low 0.2X range or even upper 0.1X range if you didn’t care much how it looked. See the Mercedes Bionic hatchback for the type of shape that would entail, except scale it up in size and give it more ground clearance and appropriately sized wheels.
For a given peak horsepower rating, it is actually possible today for an EV to weigh less than a gasoline-powered car. The tradeoff is range. The way to minimize that tradeoff and retain decent range, at least in normal operation(range will take a massive hit when racing with a smaller battery pack, closely proportional to the packs being compared), is through aerodynamic streamlining. City range won’t be effected much, but it is on long distance trips, primarily done on the highway, where long range is actually needed.
We have the technology and know-how to do it. Take a penalty box like a Nissan Leaf, and if you cut the drag in half, with the same battery pack, you could increase highway range by almost double, which would add less than $1,XXX to the cost of the car to design it to be that slippery if the car is mass produced. Cut the battery pack enough to offset that price increase, and now you have a massive range increase for little or no additional manufacturing cost.
The issue is that you will have to use the same body style, over and over and over again, for the next 2-3+ decades, to pull this off, and there will be little incentive to change it because you already have something that is hard to improve upon. That means the industry has to kick planned obsolescence to the curb.
Tesla kind of has this right, as it hasn’t changed its Model 3 or Model S much over the production run. But both of those could also be a lot more slippery than they are, even if they are the most slippery cars available in the present.
Feels an awful lot like Beetles in the 60s and Corollas etc in the 80s. I gather US automakers are just incapable of learning this lesson. Probably a result of US corporate profit incentives but it’s still hard to not be kind of baffled.
From a motive power perspective EVs have about as much in common with ICE as ICE had in common previously with steam powered cars.
Legacy auto manufacturers handle design (exterior/interior), body & unibody stamping, maybe engine dev. & production, marketing and financing. All other vehicle parts come from a massive community of 2nd & 3rd tier suppliers.
If your business model is highly mature (say has been unchanged for +100 years) and your products are therefore cash cows your incentive is Highly favored towards designing, developing, manufacturing and marketing said mature product to your customers.
Especially when you try to apply your mature (maximize outsourcing to 3rd party tier 2&3 partners) business model to a brand new* tech. Stack that you can’t seem to sell at a profit bc you are applying the wrong business model.
Brand new (immature) or exponentially improving product develop stresses a need to be as vertically integrated as possible to increase speed to market & speed to improve efficiency. Which is exactlu what Tesla and BYD are doing (also the only 2 auto companies that are actually making a profit on their EVs. This is exactly what Henry Ford did as well. And this is exactly the opposite of how these lagacy ICE auto companies have operated for over 100 years now.
So how can the legacy auto companies change? This was precisely the focus of 2 books by economist Clayton Christensen. Where he argued the only way the new products could have a chance of competing for people, attention & money w/in a legacy company would be to set up the new tech. based products w/in an entirely separate legal entity.
Ford seems to agree, as this is precisely what they did w/in the past few years creating “team Ford?” (ie lagacy ice legal entity) Vs. ‘Team Blue?'(ev only). Will it work? Don’t know, though it will be interesting to watch!
Europe, Japan, and Korea figured out how to sell cars over here so what’s taking China so long? Is it just because they have a large enough of a domestic market that they’re not trying yet?
Primarily because a 25% tariff makes it not economically possible.
What’s taking them so long? China didn’t make many cars at all until like the last 15 years. They’re about on the same track Japan was when it comes to exporting cars.