If you, like me, looked at the New York Auto Show two weeks ago and wondered “Where are all the new cars?”, the answer is that they went to China. Auto Shanghai 2023 is where we find all the news today, and it’s where a bunch of Western and other Asian brands are attempting to mount a comeback as China’s homegrown brands continue to drink their collective milkshake.
That’s the headliner for today’s morning news roundup. Also on today’s docket: the latest with BYD and more bad news for Tesla’s Autopilot system. Let’s dive right in.
China’s Car Companies Surge As The Foreign Brands Plan To Strike Back
It’s often hard for us Americans to fathom the depth and importance of the Chinese auto industry these days. Most of us haven’t heard of the vast majority of their homegrown car brands, and we’re pretty unlikely to ever see them, either. But this is still the world’s largest auto market, and these days it’s more competitive than ever on every single front.
As I wrote yesterday in my article titled “China’s Homegrown EV Brands Are Dominating Their Foreign Competition,” China’s own brands have really gotten their shit together in recent years and many of them have been EV-forward [Editor’s Note: They haven’t really had a choice. -DT] while Western and other Asian brands are trying to make that pivot. So at Auto Shanghai this year, the latter companies are trying to prove they’ve still got it to Chinese buyers. Here’s Reuters with the lay of the land:
Global automakers, including Toyota and Volkswagen, took the stage at the Shanghai auto show on Tuesday with built-for-China and electric-drive products to compete for a high-stakes comeback in the world’s largest market.
But after a year when trends have shifted sharply against the established foreign brands that once dominated in China, executives from Chinese automakers offered a reality check: the game is moving faster and the pressure to cut prices is getting more intense.
Tesla (TSLA.O), which has faced some pushback from Chinese consumers and some of its earliest fans for not introducing new models and features faster, opted to skip the Shanghai auto show this year. The company reports first-quarter results on Wednesday where the key focus will be how much its discounts in China and other markets cut into its margin.
“The real situation is that the Model 3 was competitive in 2018, but not so competitive today, and it is normal for them to cut prices,” Nio founder William Li told reporters. “You can get better cars for the same price in China.”
Say it with me now: oooooh!
So what’s happening in Shanghai this year? BMW unveiled the new i7 M70 and pledged to release 11 (!!!) new EV models in China by end of year; Toyota will debut two new EVs and a Lexus minivan, pictured below (we’ll have a blog on that shortly); Volkswagen showed off some new concepts; Ford gave us the Chinese-made all-new Lincoln Nautilus; and Honda, another Japanese automaker that’s been slow to the electric game, dropped three new EV SUVs for the Chinese market too.
Expect more news from this show throughout the week.
But China Isn’t Messing Around Either
But right now, China’s brands have the sales momentum. And they’re actually doing some interesting stuff. Remember the BYD Seagull EV? (No? Tell me you didn’t forget about the Seagull! How could you?) It’s also making its official auto show debut in China, and it’s a budget Corolla-killer on electric power. Also from that Reuters story:
The Seagull will start at the equivalent of just over $11,000. By comparison, Toyota’s most popular EV on offer in China, the bZ4X, starts at more than $29,000.
“Amazingly affordable,” Bill Russo, founder of Automobility, a Shanghai-based consultancy. “This will be the best-selling car in China within six months of launch.”
Its annual sales more than doubled in 2022 from a year earlier to approach 1.86 million electrified passenger vehicles, making BYD the second largest car brand in China, next only to Volkswagen.
It made the company the world’s largest electrified-vehicle maker and the No. 1 EV maker in China, though it still trails Tesla Inc. in global EV sales.
This year, BYD began a market launch into Germany. That a young Chinese brand would have the chutzpah to tangle with Europe’s biggest market is raising eyebrows there. A few months earlier, BYD also began selling in Finland, the U.K. and Sweden, with Australia, France and the Netherlands next on its list. To feed its envisioned European EV sales, the company was negotiating earlier in the year to acquire Ford Motor Co.’s soon-to-close assembly plant in Saarlouis, Germany. But in February, a company executive told Bloomberg that BYD is more likely to construct its own European plant, along with its own local batteries.
Product is coming fast. BYD started in Europe with three models: a compact crossover called the Atto 3, a large SUV called the Tang and a large sedan called the Han. The company is now indicating that two more models could arrive this year: a mid-size electric sedan, the Seal, and an affordable small car called the Dolphin.
[…] In addition to taking on Europe, the company is stepping up efforts to export electric sedans and crossovers to Southeast Asia, Latin America and the Middle East. Last month, it started construction in Thailand of what will be its first overseas plant. The new factory will have an annual capacity of 150,000 vehicles when completed next year.
The big question remains whether it can launch a successful entry into the American market, which will be incredibly difficult given U.S. tensions with China. Just look at how the Inflation Reduction Act is designed to hit that country specifically, or the Congressional hearings around dance video app TikTok. But if you ask me, it’s a question of when, not if. BYD’s probably the most well-positioned Chinese brand to make its presence known in America. It’s certainly doing so elsewhere.
Pay Attention To Zeekr, Too
Another one with world domination plans is Geely. It owns Volvo, Polestar, Lotus and some other brands you may or may not have heard of. And we’ve covered before why one of them, Zeekr, is worthy of your attention too. Zeekr officials at the auto show announced a big push into Western Europe within the next three years. Here’s Car News China:
At the 2023 Shanghai Auto Show, Zeekr officially unveiled its global strategy. Spiros Fotinos, Zeekr’s Vice President responsible for European operations, announced that the company will establish a presence in most of Western Europe by 2026 and aims to become a leading brand in the electric vehicles market in 2030.
Fotinos also presented three pillars of their European strategy: Excellent products, one-stop service, and direct sales models. The last means that Zeekr will own all its sales and delivery centers, avoiding third-party dealers. It’s the same strategy they use in China. A similar approach is used, for example, by Nio, while BYD uses the traditional dealers model in Europe.
The first EU Zeekr stores will be launched in Stockholm (Sweden) and Amsterdam (Netherlands) in 2023, and the first deliveries will begin at the end of this year. The first Zeekr EV in Europe will be a 001 fastback SUV, which Zeekr calls shooting brake and the mid-size SUV Zeekr X. Debut in Q4 2023. Zeekr’s HQ will be in Amsterdam.
Zeekr also filed for a U.S. IPO in December, and this cat Spiros Fortinos is a 24-year veteran of Toyota and Lexus. I do wonder where these cars end and Polestar and such begin, but maybe brand differentiation isn’t such a big deal when you’re trying to take over the world?
Another Autopilot Fatal Crash Reported
Finally, more bad news for Tesla’s Autopilot system, which is facing regulatory crackdowns and lawsuits over crashes and its misleading “Full Self-Driving” name. Bloomberg reports Tesla has reported yet another fatal crash from earlier this year, bringing the death total to 17:
Tesla Inc. disclosed to U.S. regulators another fatal crash involving automated driver-assist systems, bringing its total to 17 since June 2021 when the government required carmakers to begin submitting data on these accidents.
The crash involved a Tesla Model S that collided with an emergency vehicle in February in the San Francisco Bay Area. At the time of the accident, the National Highway Traffic Safety Administration asked the company for more information.
The crash was one of 66 reported accidents that were included in the latest public release of data collected by the NHTSA about crashes involving so-called Level 2 automated driving systems, gathered under a June 2021 order demanding carmakers and technology companies report the incidents.
This is the first time Tesla confirmed Autopilot was in use during the crash, which killed the Model S’ driver and injured four firefighters.
Your Turn
TMD was a bit abbreviated today as we work on all the news out of China, but what do you think of it all so far? Both the cars from the show and the trends we describe here. And would you buy a Zeekr or a BYD if it was available to you?
It’s weird to read that “BYD is looking to launch in the US”, since their first dealership opened in Los Angeles about 12 years ago. They sold a compact EV sedan for a few years (can’t remember the model name). Now it’s true that they are not currently selling passenger vehicles in the US (only buses & trucks), but even so, they are an existing and established company that has a dealership and HQ here in L.A.
Would I buy a BYD or Zeekr? Only after it was available for at least a few years, there is a decent amount of parts/service available and Consumer Reports gives them at least an ‘average’ reliability rating for the important stuff.
BYD cars have been on sale in Australia for at least a couple of years already. Along with several other Chinese brands. MG now feature in top ten sales figures, their MG3 last year captured 46% of light car sales. Personally I wouldn’t buy a Chinese made vehicle mainly due to their quality of materials, handling etc. https://www.carsguide.com.au/car-news/mg-goes-from-strength-to-strength-in-australia-outselling-hyundai-and-mitsubishi-is-this-a#:~:text=Overall%20for%202022%2C%20MG%20placed,by%20a%20solid%20margin%2C%20too.
Probably not on the Zeekr or BYD. Are either of those companies making the Porsche Cayenne? No? Well, then. I want a Porsche Cayenne. I have a singular focus on this toilet earth, and that’s “buy a Porsche to tow my Porsche.”
That new Cayenne looks hot as hell. I could do all manner of Hot Girl Stuff ™ in the hot girl parsh, like tow a parsh with my parsh. That’s it. That’s what I want.
Sidenote: omg the new commenting system auto-translates tm in parentheses to ™? HOT PARSH GIRL APPROVED.
If I were a Chinese national of some means and in a position to buy a new car I’d think long and hard before buying anything not Chinese just based on the hostile climate being fomented by the Chinese government toward the west.
Better to keep one’s head down in a situation like that
I won’t buy a car made in Mexico due to their horrid human rights and conduit of fentanyl from China that kills thousands of Americans annually. China has zero chance of ever selling me a car.
Do you only buy gas not sourced from Mexico, Venezula, Middle East oil? Are all diamonds on jewelry in the house conflict free? Is all your clothing & electronics made in ethical countries without using child labor? If not then where you car is made is a fraction of horrid human rights you are supporting.
“The real situation is that the Model 3 was competitive in 2018, but not so competitive today, and it is normal for them to cut prices,” Nio founder William Li told reporters. “You can get better cars for the same price in China.”
No lie detected.
Disappointed that Toyota didn’t own their bad naming of the Bees Forks and call the new models bZ-5pn and bZ-Knf
BYD was looking for partners in the US to sell the cars a couple years ago. Sounds to me like they did not have much luck.
I rode in the Toyota version of that minivan and it was excellent.
Initially, no, I would not buy any Chinese vehicle. I’d have to wait to see how they handle long term before I did. Maybe used in 10 years? Doubt it though.
“It made the company the world’s largest electrified-vehicle maker and the No. 1 EV maker in China, though it still trails Tesla Inc. in global EV sales.”
Huh?
Tesla is the bigger EV producer, but when you consider overall electrified sales (this includes hybrids), Tesla is smaller.
The Lexus LM needs to come over here! 😀
To take the crown from BMW for giant huge grill? That thing looks like its a rail line snow plow.
There are a TON of videos out there showing Chinese EVs bursting into flames. And not just the smaller brands but the big ones too like BYD. I’ve also read some reviews from places where they are sold like in Australia and the UK. Sure they are cheap and even look nice but the overall impression seems to be that they’re pretty rattly and crappy. Personally I am not really interested in buying anything from China these days if I can help it. Last week the CCP put 2 men in prison for 18 years just for daring to meet to have generalized discussions about human rights. I know this goes against capitalism but I hope the US government keeps these cars out of our market
But Millennials/Gen Z are not very nationalistic about their products and where they are made. They will be the target demographic of imported cheap flashy EVs, not the older generation that cares where it is made and quality. Millennials are mostly not car people like those here, they wouldn’t care if its a cheap imported EV which you throw away in 3 years.
Millennials don’t care about quality???
You are aware 99.9999% of Millennials (who are almost all closer to 40 than 20 by now) are not influencers or walking stereotypes, right?
Well they helped Tesla succeed and are keeping them on top….
Teslas, like all new luxury cars, are primarily purchased by older, wealthier people.
Of course some people in their 30s buy them new, but again, please don’t confuse what you see on Youtube with reality.
While I often find generational generalizations frustrating*, I’ll agree that you don’t hear as much of the “Gotta be made in ‘Murica” nationalism from the under-45 set than you would from their parents and grandparents.
However, those generations do have a reputation for appreciating value (which is different from just finding the least expensive option), safety, and social issues.
Due to economic conditions they’re facing, finding a good value is important. It’s the old “It’s expensive to be poor” situation where it’s a better value to buy something that’s a little more expensive but lasts much longer than something cheap that will need to be replaced more quickly.
Due to their age range, many in the generations quoted are parents with children under 18. While people may roll the dice with their own personal safety, when they become parents they become much more safety-conscious because they’re looking out for their little ones. Just a few YouTube videos of failed crash tests could quickly put off parents from considering a given car — or even an entire brand.
And seeing how the members of the generations quoted have expressed support for human rights issues in recent years, some (though certainly not all) may think twice before financially supporting a regime with a track record that’s spotty to say the least.
*Is it really reasonable to assume that everyone — or even a majority — born within 20 years thinks the same way? Think about your high school graduating class. How many of your classmates did you have anything in common with? Maybe 5% 10% if you’re a real sociable person? And that’s a sample that’s focused on one birth year and a specific geographic area. Imagine expanding the sample +/-10 years and extending it across the country from city-dwellers in New York to cowboys in Wyoming and everyone in between.
Oh yeah generations are total bullshit and shorthand used by people too lazy to explain that people who are a similar age generally have similar cultural experiences….
If we’re talking about quality, we’re likely not talking about Chevrolet or Dodge’s non-truck products. People I work with mainly target reliability within their budget. There are very few American models that fit that bill, outside of the people going for big toy haulers/off-roaders.
Nationalism and quality are two values that do not intersect at all. People might not care where something is made from a nationalistic viewpoint, but they definitely do if it affects quality.
Also, your ‘knowledge’ of how Millennials/Gen Z think is absolute BS.
Trust me, if Chinese cars become known for being cheap, throw away garbage that doesn’t last, even the young people will begin to avoid it. Only the truly poor, desperate, and gullible will buy them.
Are the Chinese brands going to compete on anything other than price? What other killer features could they have?
If it’s only price, my opinion is that with most things, cars very much included, it’s better to pay a bit more up front for something with a better reputation for quality. You won’t know where the cost-cutting was when you first buy it, but you definitely will by the end….
I’ve wondered about that myself. Thankfully there are safety regulations that must be met for a car to even be sold in a given market, so if Chinese brands were ever to be sold in the US, they’d need to meet those at a minimum. There are no requirements for reliability, quality, or dependability, though, so like most new car brands, I’d expect to see these ones struggle in those areas at first but possibly make up for it with a killer low price. Is it worth it to buy a car that lasts half as long as its competition if the price is low enough? I’m sure many car buyers will go for it.
And, of course, while China has a reputation for poor quality, their companies are certainly capable of producing to tight specifications (see pretty much all of our phones and other electronic components being produced there). When the Chinese brands are able to produce a solid car that meets safety requirements, they’re going to blow away the competition because they won’t be able to compete on price — I just have no idea how long that might take: maybe a few decades; maybe just a few years.
Phones are assembled to specifications of Western or Korean companies (with reputations to uphold) using primarily components from outside China.
The same could even be said to an extent of someone like Volvo.
I have much less confidence that a homegrown Chinese company using 100% Chinese parts would take the same care. Simply because I haven’t seen it yet.
I agree with you, and I certainly won’t be the first in line to buy a BVD or whatever Chinese car company becomes the first to market here in the states. But I won’t say that they’ll never get there simply because of history. In the ’80s, the Korean brands were punchlines, but now they’re churning out dependable vehicles at reasonable prices (And so easy to drive you don’t even need a key! Just a USB cable! :). Same deal for the Japanese cars before that. With the right motivation, China will get there too.
Of course, with a domestic market of >1B and growing to sell to, exporting to the US may be a low priority for these companies considering the smaller potential customer base and complicated regulations.
This made me lol.
https://www.theautopian.com/why-everyones-favorite-electric-car-keeps-stranding-its-owners/
Yeah, I think of the Chinese brands as catching up with the Korean brands: they’ll make a spash with style, features and ‘value,’ but they’ll probably not be reliable the way we expect them to be.
Zeekr and BYD, nope, not while the powers that be threaten the sovereignty of a democratic nation, so basically not while Xi is in power.
BYD is looking as if it wants to launch into the US later in this decade. They’ve got offices in the US and they’re doing their research on not just market demands, but regulatory requirements, building necessary logistics/service/sales, etc.
DeMuro actually got a BYD Han to drive. His general take was it’s not on par with established luxury brands from a comfort and quality standpoint, but it’s also not far off. If their next generation product is a big enough improvement for a low enough price, that might sway the big soft part of the market that just wants comfy and quiet at a reasonable price.
Think of all the people who buy Acura RDX/MDXs, Lexus NXs/RXs/ESs, some of the A3/A4/3/4/CLA/C/X/GL/Q buyers, some Model 3/X buyers, etc. That’s the market segment they’re going after. Not performance or handling. Not farm-life gals who need their Yukon Denali to protect their children from kidnappers. Not badge snobs. People who want comfort at a good price. That’s a big chunk of the entry luxury market.
I’m expecting China to succeed in areas that the Western automakers have largely abandoned. Our infrastructure practically demands car ownership, but increasingly even good used cars are out of reach for many people. If someone can fill that gap with better than 3rd owner used car quality, I think they’ll have a winner.
The Lexus LM is designed for the European and Asian markets and, along with most of the USDM lineup, Lexus designs look like they’re straight out of China. Funny enough, the Chinese auto manufacturers’ designs look classier and more restrained.
Those brands would need to have service centers nearby with common service parts in stock for me to consider. After doing the AliExpress wait 6 weeks for stuff to arrive, that would be a deal breaker to wait on parts from China every time the car went in for service. Another thing would be not doing a Hyundai and denying warranty repair on something that’s clearly a factory issue.
On the plus side, there’d be a ton of mods on AliExpress to drool over. Some may even be worth the wait.
A car model has to be really popular for it to have a large presence on AliExpress eg Tesla 3/Y.