The $10k BYD Seagull EV is scaring the U.S. auto industry(teslarati.com)
teslarati.com
The $10k BYD Seagull EV is scaring the U.S. auto industry
https://www.teslarati.com/10000-byd-seagull-us-auto/
118 comments
Historically cheap Chinese cars have done VERY poorly in crash tests. for 10K its probably a piece of plastic which folds killing the user in every crash over 35 mph.
It's hard to dig up exact figures. It looks like China has around 500M drivers averaging 10,000 vehicle miles each and annual traffic fatalities of 250,000.
This suggests the death rate per billion vehicle miles is about 13 in the US and about 50 in China.
https://english.www.gov.cn/archive/statistics/202212/08/cont...
https://en.wikipedia.org/wiki/List_of_countries_by_traffic-r... note death rate is herein per billion vehicle km which I have converted to miles
https://gitnux.org/average-annual-mileage/
It's hard to dig up exact figures. It looks like China has around 500M drivers averaging 10,000 vehicle miles each and annual traffic fatalities of 250,000.
This suggests the death rate per billion vehicle miles is about 13 in the US and about 50 in China.
https://english.www.gov.cn/archive/statistics/202212/08/cont...
https://en.wikipedia.org/wiki/List_of_countries_by_traffic-r... note death rate is herein per billion vehicle km which I have converted to miles
https://gitnux.org/average-annual-mileage/
In terms of saftey ratings, BYD do very well in the Euro NCAP ratings. 5/5 for all their cars in the European market, including the small Dolphin car[0]. This doesn't include the Seagull though as they don't sell it in Europe yet.
[0] https://www.euroncap.com/en/results/byd/dolphin/50011
[0] https://www.euroncap.com/en/results/byd/dolphin/50011
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> Just because Americans have never purchased small, affordable cars _en masse_ before doesn't mean they won't in the future.
I'm guessing you weren't around in the 80s?
I'm guessing you weren't around in the 80s?
> so long as they meet American safety standards, I think they should be
The question is to what degree those standards were written for safety versus protectionism, and to what degree any other market cares about them.
The question is to what degree those standards were written for safety versus protectionism, and to what degree any other market cares about them.
I agree that that question is important but I view it as separate.
I know nothing about car safety, so I have to take the recommendations on authority that they are necessary.
I know nothing about car safety, so I have to take the recommendations on authority that they are necessary.
Everyone being like - we don't care about cars that small. It's the equivalent at looking at LLMs two years ago and being - it can't perform anything. It's an entry point and they will get bigger and better and more attractive - to the benefit of consumers upping the competition.
Kia was written off when it first came to town. US domestics should be concerned - they wrote off Tesla as well.
Kia was written off when it first came to town. US domestics should be concerned - they wrote off Tesla as well.
Before Kia it was Honda and Toyota in the 80s/90s. Before that there was the 70s love affair with small Italian and British imports like Fiat and Mini. Before that was the 60s love affair with Volkswagen. It's a cycle that has happened so many times already in the US of imports filling small car niches (both niches that are small and large niches that include smaller cars) the domestic manufacturers ignore for too many years at a time. You would almost think that US manufacturers would have learned by now given how many times it has repeated.
I'm not even a car person, and I can name 2-3 domestics attempts during each of those eras.
Nobody's ignoring anything. It's just a hard market for them to sustain because demand is reletively low here and margins are thin as part of the market's intense price sensitivity.
It's a good place for new/foreign manufacturers to gain brand awareness because niche demand persists but it's not profitable enough for any car maker really benefits to focus on here, where luxury/design/size all invite much bigger profits
Nobody's ignoring anything. It's just a hard market for them to sustain because demand is reletively low here and margins are thin as part of the market's intense price sensitivity.
It's a good place for new/foreign manufacturers to gain brand awareness because niche demand persists but it's not profitable enough for any car maker really benefits to focus on here, where luxury/design/size all invite much bigger profits
>I can name 2-3 domestics attempts during each of those eras
can you name any that didnt suck? :) That crosses iconic Pinto and Pacer out straight off the bat. In the 80s maybe only Omni was ok, 90s hmm Neon? Rebadged Japanese cars sold under Geo brand dont count.
can you name any that didnt suck? :) That crosses iconic Pinto and Pacer out straight off the bat. In the 80s maybe only Omni was ok, 90s hmm Neon? Rebadged Japanese cars sold under Geo brand dont count.
Geo weren't rebadged, they were built in California. Geo and its NUMMI plant was a strange collaboration between Toyota and GM (even the Geo logo had both Toyota's lines and GM's Chevrolet "bow tie"). Which is more important to note that Geo entirely existed because GM realized it had entirely forgot how to make smaller cars and begged Toyota to teach it its ways, years after Honda and Toyota were winning hearts and minds.
https://en.wikipedia.org/wiki/NUMMI
https://en.wikipedia.org/wiki/NUMMI
I agree that it is a habit of high margin profit chasing. It also says a lot that almost every time the imports become "domesticated" they seem to move into the same problematic high margin areas. Honda US and Nissan US are huge truck companies today. Kia US is mostly a luxury SUV company.
However, I disagree that it is a sustainability problem because I think it is a "fashion trend" problem and companies aren't good at predicting trends (especially not ones on the scale of decades in current US corporate culture), and are just sticking to bad habits (that unfortunately are profit rewarded enough that they don't feel enough relentless "quarterly" pressure to challenge those bad habits).
However, I disagree that it is a sustainability problem because I think it is a "fashion trend" problem and companies aren't good at predicting trends (especially not ones on the scale of decades in current US corporate culture), and are just sticking to bad habits (that unfortunately are profit rewarded enough that they don't feel enough relentless "quarterly" pressure to challenge those bad habits).
I really want a car that small - as the family's second car
In Germany in work-related traffic (commuting I guess) there are 1.1 persons per car in average. I guess it's similar in many other countries. So a small car like this would be perfect for most commuters. I always dream of a one/two-seat vehicle for that purpose, something alike the Renault Twizy.
> Kia was written off when it first came to town.
Hyundai/Kia were smart in that they introduced their cars with really long warranties to dispel quality concerns. However, they lost a lot of credibility recently with their cars being famous for being easy to steal via YouTube tutorials and tiktok challenges.
Hyundai/Kia were smart in that they introduced their cars with really long warranties to dispel quality concerns. However, they lost a lot of credibility recently with their cars being famous for being easy to steal via YouTube tutorials and tiktok challenges.
My point is that they managed a way into the market and held market share with considerable doubt against them.
It is just that if you said that maybe 5 years ago, it would sound stronger than today when they are currently losing credibility at a rapid clip.
Saying Americans only want big cars is just as ignorant as saying Europeans only want small cars.
It's an import - the car companies will get the government to stack enough tariffs and fees to push the price up higher, because they know they can't compete without that.
To all those who dismiss the Seagull because it's small and cheap, remember one thing: making inexpensive cars is much, much, harder than making luxury cars. The lower your gross margins the fewer mistakes you can make. It's a miracle of manufacturing that cars can be made at this price point at all (yes, there are subsidies but European and American carmakers get subsidized too).
BYD, NIO and Xiaomi make luxury cars too, at very attractive prices.
Musk is right when he says Chinese carmakers will "pretty much demolish most other companies in the world".
BYD, NIO and Xiaomi make luxury cars too, at very attractive prices.
Musk is right when he says Chinese carmakers will "pretty much demolish most other companies in the world".
Based on the general track record of Chinese manufacturing QA and Chinese EV QA, they can make a lot of mistakes just fine.
The scary thing for US car manufacturers isn't necessarily Chinese imports in the US, which import tariffs should prevent, but the notion of BYD partnering with or acquiring existing US manufacturers and then starting to produce very cheap cars inside the US. This is what the Japanese did and later other manufacturers. Fiat bought Chrysler at some point and now Stellantis (which Fiat/Chrysler merged into) is producing lots of traditional US car brands in the US.
The notion that EVs are now feasible at low cost is what is making car manufacturers nervous. Because these Chinese cars are 1) very good 2) much cheaper than other manufacturers would be able to deliver.
There's a lot being said about subsidies. That's no excuse. The US has a 1 trillion $ IRA package. And a history of repeatedly bailing out bankrupt car manufacturers. They have and have had plenty of government support over the years. The lack of support is not the issue.
In the end government support is a means to an end: figuring out how to build lots of cheap electrical vehicles. The Chinese seem to be doing quite well on that front.
The notion that EVs are now feasible at low cost is what is making car manufacturers nervous. Because these Chinese cars are 1) very good 2) much cheaper than other manufacturers would be able to deliver.
There's a lot being said about subsidies. That's no excuse. The US has a 1 trillion $ IRA package. And a history of repeatedly bailing out bankrupt car manufacturers. They have and have had plenty of government support over the years. The lack of support is not the issue.
In the end government support is a means to an end: figuring out how to build lots of cheap electrical vehicles. The Chinese seem to be doing quite well on that front.
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Affordable small cars have never been a thing in the US, electric or not. There's zero reason to believe that this new batch will pose a threat.
Should be safe to allow imports then, right? Since nobody but me would buy one. :-)
I am attempting to import the Seagull currently (experience the pain, see if and how to scale, how to avoid tariff mechanisms, etc), intend to report back with findings.
https://www.cbp.gov/trade/basic-import-export/importing-car
https://www.cbp.gov/trade/basic-import-export/importing-car
Can you import from Mexico instead of directly from China? Would this help overcome the tariffs/other obstacles?
Although this article was previously linked on HN, regarding importing 4 wheel loaders directly from China:
https://electrek.co/2023/11/30/i-bought-container-full-of-el...
Although this article was previously linked on HN, regarding importing 4 wheel loaders directly from China:
https://electrek.co/2023/11/30/i-bought-container-full-of-el...
Can you buy one in Mexico and keep driving in US for X time?
This should be really difficult, especially since America and China have high tariffs in place for automobiles between each other as per China's WTO entrance agreement.
But if you want to have a lot of fun, try importing (as a private citizen) any kind of car into China. It is virtually impossible, even if the car is old. My boss tried to get his Hummer into China once just for kicks, and the negotiations just went on forever and eventually he just went back to the states. You might have an easier time if you are a diplomat and can get black plates for it.
But if you want to have a lot of fun, try importing (as a private citizen) any kind of car into China. It is virtually impossible, even if the car is old. My boss tried to get his Hummer into China once just for kicks, and the negotiations just went on forever and eventually he just went back to the states. You might have an easier time if you are a diplomat and can get black plates for it.
As an infosec/cybersecurity practitioner, it is my jam to probe attack surface looking for weakness to exploit. This is simply another threat modeling exercise, policy instead of tech. I am not against the tariffs, but any means, there is value in protecting US domestic manufacturing for national security interests. But, there is a huge cheap EV TAM that is going unsatisfied by legacy auto and Tesla.
I also have a lot of disadvantaged folks in my sphere who could use cheap, clean EV wheels, and I cannot afford Teslas for all of them.
I also have a lot of disadvantaged folks in my sphere who could use cheap, clean EV wheels, and I cannot afford Teslas for all of them.
Tesla had to move production to China originally because of import tariffs. The USA did not establish the bilateral tariffs to protect its car markets, these were in place to protect China's. It seems a bit unfair that the USA is getting flack for this two decades later.
I admit I could totally fail, the learning is the exercise.
I honestly don't even mind the tariffs that seem to be present, and could probably tolerate +50% or even +80%. But the other question is whether the car ticks all the safety boxes that could flat out block the car from legally driving on US roads.
Who says imports aren't allowed?
They are allowed, but the US has a 27.5% tarrif on Chinese EVs.
$13k instead of $10k is still great for a tiny car!
Imports have to satisfy all the US regulations.
To quote from a link someone else posted:
> Most Chinese cars haven’t been engineered with US safety regulations in mind; just going through those protocols is an expensive and elaborate process.
To quote from a link someone else posted:
> Most Chinese cars haven’t been engineered with US safety regulations in mind; just going through those protocols is an expensive and elaborate process.
US protectionism would like a word with you.
Chinese protectionism would also like a word. Remember these tariffs were originally setup between the US and China in 2006 to protect China's car market, not the USA's. See https://faculty.econ.ucdavis.edu/faculty/dswenson/ChinaCarPa...
> Here, the bilateral agreement noted the expectation that by 2006 China’s import tariff on assembled cars was to be reduced from its pre WTO level of 80% or 100% to 25%, while the diverse rates of tariff on auto parts were to be reduced such that the average tariff on auto parts declined to 10%.
That was a reduction from the 80-100% it was previously, so 25% was a huge win back then, but it was (and is) still a mostly protected car market.
> Here, the bilateral agreement noted the expectation that by 2006 China’s import tariff on assembled cars was to be reduced from its pre WTO level of 80% or 100% to 25%, while the diverse rates of tariff on auto parts were to be reduced such that the average tariff on auto parts declined to 10%.
That was a reduction from the 80-100% it was previously, so 25% was a huge win back then, but it was (and is) still a mostly protected car market.
I'm not saying anything about the Chinese protections merely the US protections.
The US and Chinese protections were negotiated at the same time in 2006: China wanted a 25% tariff for automobiles imported into China from the USA (down from 80-100%), the USA said, OK, but we will apply the same to your cars. That's why it was negotiated, if China offered no tariff, the USA would have jumped at that.
Almost all tariffs are reciprocated, that's just how this game works. It is only an accident in history that these tariffs now protect the USA rather than China.
Almost all tariffs are reciprocated, that's just how this game works. It is only an accident in history that these tariffs now protect the USA rather than China.
There are plenty of small cars made outside of China. Why do you think not a single auto manufacturer worldwide bothers to export their best selling models to the US? The market here wants SUVs and trucks, not $15K subcompacts.
We don't know what the market wants, because the government has made it very difficult to supply such a subcompact.
Outside of Chinese-made vehicles the US has probably the most open auto import market in the world. Most manufacturers enjoy a 2.5% tariff, which is a joke, and not reciprocated anywhere in the world. All these foreign manufacturers are selling $25-50K+ cars just fine (over 4 million of them every year in fact). It's the US market that is rejecting lower priced cars.
Safety and other regulations still apply.
European safety and environmental standards are much higher than here.
higher sounds like a quality argument, which may be true. they are not stricter though, which is what they'd need to be to refute the parents point. take headlights, for example, where the us's requirements are significantly stricter than european ones.
The article cites the Alliance for American Manufacturing, for one, as warning that if these Chinese-state-subsidized vehicles are permitted for import without trade adjustments correcting for the distortionary effect of the subsidies, then unsubsidized non-Chinese manufacturers will be unable to compete and have to fold.
As the article quotes Elon Musk in his capacity as Tesla guy:
> “The Chinese car companies are the most competitive car companies in the world,” Musk said during the call. “So, I think they will have significant success outside of China depending on what kind of tariffs or trade barriers are established.”
> “Frankly, I think, if there are not trade barriers established, they will pretty much demolish most other companies in the world.”
As the article quotes Elon Musk in his capacity as Tesla guy:
> “The Chinese car companies are the most competitive car companies in the world,” Musk said during the call. “So, I think they will have significant success outside of China depending on what kind of tariffs or trade barriers are established.”
> “Frankly, I think, if there are not trade barriers established, they will pretty much demolish most other companies in the world.”
> Affordable small cars have never been a thing in the US
Why not? Just a cultural thing? Times are tough in America and people are interested in EVs because of gas prices. I see a $10k EV selling like wildfire - small, entry-level and not as big a commitment as a F-150 Lightning.
Why not? Just a cultural thing? Times are tough in America and people are interested in EVs because of gas prices. I see a $10k EV selling like wildfire - small, entry-level and not as big a commitment as a F-150 Lightning.
Yes it's a cultural thing. The highest selling vehicles in the US every year are SUVs and pickup trucks, even in the middle of dense cities. The small 2-4 door cars you see all over Europe and Asia aren't sold here at all. Mazda 3, Toyota Corolla, Honda Civic etc. are considered "compact" cars, and that size is the smallest people will even consider.
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Driving a small car on US highways is like being a deer in the middle of a herd of elephants.
The last age of the small car, which was pretty much the late 1970s in the US:
- oil embargo
- cars went downhill very quickly (planned obsolesence)
- inflation meant new car buyers could buy less.
Small cars died steadily under four decades of cheap gas, globalized production and financing keeping larger cars affordable (or at least, financable). Cars got a lot better, so used cars would work perfectly fine so you chose between a crappy small new car and a much better used one.
Now?
- used cars since COVID are still really expensive
- inflation again, and even before inflation, the 7-10 year car loan was becoming really common
- gas prices are a lot more volatile in the consumer perspective, and from a political long term standpoint carbon taxes may come into play soon in addition to reduced financing for new petroleum projects
- cash for clunkers will likely appear again in the next decade / recession as a way to usher off old ICE cars off the market
- increasing urbanization of the US combined with decreased tolerance for car traffic may result in SUVs being banned from cities, or an exhorbitant tax
- the war on the younger generations means along with increased global warming awareness means that an affordable small EV is likely much more "socially" acceptable, maybe even desirable.
- All US car companies are global, and the Chinese car companies are doing quite well in international markets. If China wins this market segment (especially in the Indian/Chinese market where there are 2.5 billion people) then that provides enormous scale to assault all other market segments. They are already climbing the model ladder in Europe.
The SUV/Pickup is still king of the US, but let's face it that was always a product of marketing. Marketing can falter quickly. The most popular vehicles aren't even SUVs, they are station wagons dressed up in marketese as "crossovers". That shift has already begun.
- oil embargo
- cars went downhill very quickly (planned obsolesence)
- inflation meant new car buyers could buy less.
Small cars died steadily under four decades of cheap gas, globalized production and financing keeping larger cars affordable (or at least, financable). Cars got a lot better, so used cars would work perfectly fine so you chose between a crappy small new car and a much better used one.
Now?
- used cars since COVID are still really expensive
- inflation again, and even before inflation, the 7-10 year car loan was becoming really common
- gas prices are a lot more volatile in the consumer perspective, and from a political long term standpoint carbon taxes may come into play soon in addition to reduced financing for new petroleum projects
- cash for clunkers will likely appear again in the next decade / recession as a way to usher off old ICE cars off the market
- increasing urbanization of the US combined with decreased tolerance for car traffic may result in SUVs being banned from cities, or an exhorbitant tax
- the war on the younger generations means along with increased global warming awareness means that an affordable small EV is likely much more "socially" acceptable, maybe even desirable.
- All US car companies are global, and the Chinese car companies are doing quite well in international markets. If China wins this market segment (especially in the Indian/Chinese market where there are 2.5 billion people) then that provides enormous scale to assault all other market segments. They are already climbing the model ladder in Europe.
The SUV/Pickup is still king of the US, but let's face it that was always a product of marketing. Marketing can falter quickly. The most popular vehicles aren't even SUVs, they are station wagons dressed up in marketese as "crossovers". That shift has already begun.
Neat! Then we should allow them into the market, right?
This is exactly the size I want for my second car. Bring it on.
As it stands, I’ll end up spending $10k more on a used, 2023 Bolt EUV.
As it stands, I’ll end up spending $10k more on a used, 2023 Bolt EUV.
During the pandemic car shortage, a lot of car makers started over-producing their higher-end models. With the entry-level market being underserved and facing high interest rates, this might find a market. Not that people wouldn't rather upgrade, but it's a lot cheaper than a Mazda 2.
Indeed this article uses a weird framing, if anything this seems more like a threat to EU manufacturers that sell small cars in a market where people want smaller cars, not US manufacturers that mostly sell SUVs and Pickups in a market where people are picking ever-larger monstruosities.
On a forum that's funded entirely on the premise of small startups eating the lunch of big incumbents, this is a weird take.
These are not small startups. They are China government funded enterprises.
I'm not saying they're a startup. I'm saying that a company can take another's market share. No company is ever safe from another company coming along and disrupting the industry it's in. HN is about startups doing it, but it can with big companies as well.
The general cost of living is going to change that.
I mean, not from the domestic makers who want as much margin as possible, but when I was a kid, the Japanese imports had already gone from being seen as junk to praised as the most reliable cars you could buy, and Korean cars were just starting to come in.
Literally in that article a man who has more stake in the game than you, Elon musk, says it’s an existential threat. This must mean Elon is completely delusional. There is no threat and no market for sub 10k cars because they’re too small for Americans.
Elon musk needs a reality check.
Elon musk needs a reality check.
Pretty sure if the article was titled "The $10k BYD Seagull EV is scaring Tesla" the person you are responding to wouldn't have commented, but the US auto industry is definitely not scared by small affordable cars seeing as that market is already dominated by South Korean and Japanese manufacturers in the US.
The difference is obvious. Current small Japanese and Korean cars compete directly with small American vehicles. They compete in the same classes and - by in large - follow the same product trends. A $10k or even $15k automobile would be in a class of its own in the American market.
Nobody in the USA wants that market. There isn’t even an interest in under 25k cars. I don’t see any issues allowing these if local manufacturers aren’t even willing to make products at 2x the price
> Nobody in the USA wants that market. There isn’t even an interest in under 25k cars
That doesn’t mean the market doesn’t exist. I could see these being sold in Mexico and Europe. At that point, the American car industry becomes an inefficient protected industry. American voters have limited sympathy for those in the long run when it comes to consumer goods.
That said, it’s unclear if BYD can make a $10k car that meets American safety (and useless regulatory) standards.
That doesn’t mean the market doesn’t exist. I could see these being sold in Mexico and Europe. At that point, the American car industry becomes an inefficient protected industry. American voters have limited sympathy for those in the long run when it comes to consumer goods.
That said, it’s unclear if BYD can make a $10k car that meets American safety (and useless regulatory) standards.
>At that point, the American car industry becomes an inefficient protected industry. American voters have limited sympathy for those in the long run when it comes to consumer goods.
Do they have little sympathy? The list of protected American industries is enormous, and has been for nearly a century. Tobacco, corn, vehicles, aerospace, the energy industry, oil & gas industry. I could write out a list as long as my arm.
Do they have little sympathy? The list of protected American industries is enormous, and has been for nearly a century. Tobacco, corn, vehicles, aerospace, the energy industry, oil & gas industry. I could write out a list as long as my arm.
> Tobacco, corn, vehicles, aerospace, the energy industry, oil & gas industry
Tobacco, corn and vehicles are the only consumer products on this list. Neither of the former is hosing American consumers. (Just taxpayers.)
The last we allowed to go bankrupt (hosing shareholders) before bailing them out last time, and is the coddled industry we’re discussing.
Tobacco, corn and vehicles are the only consumer products on this list. Neither of the former is hosing American consumers. (Just taxpayers.)
The last we allowed to go bankrupt (hosing shareholders) before bailing them out last time, and is the coddled industry we’re discussing.
I mean from the manufacturer point of view, under 50k cars aren’t sufficiently profitable to be worth making. So very little R&D happens at the low end
> under 50k cars aren’t sufficiently profitable to be worth making. So very little R&D happens at the low end
The fact that both new entrants and legacy manufacturers are struggling with that production cost implies there is a structural cause for those high prices. I’m sceptical BYD can sell a car in America for $10k. I’m less sceptical that anyone else cares about the mandates that make American cars expensive.
The fact that both new entrants and legacy manufacturers are struggling with that production cost implies there is a structural cause for those high prices. I’m sceptical BYD can sell a car in America for $10k. I’m less sceptical that anyone else cares about the mandates that make American cars expensive.
There's a massive difference in under $25k vehicles. Hence the $200 billion dollar used car market. A lot of these used car purchases might have been new vehicles if the product existed, but it doesn't.
> I don’t see any issues allowing these if local manufacturers aren’t even willing to make products at 2x the price
Because how are GM and Ford supposed to pay UAW wages, return a profit, and make a car for <$20k?
If people have the option, they'll buy the $10k Seagull and not pay UAW wages...
It's not like GM has a 60% margin on $25k cars...
Because how are GM and Ford supposed to pay UAW wages, return a profit, and make a car for <$20k?
If people have the option, they'll buy the $10k Seagull and not pay UAW wages...
It's not like GM has a 60% margin on $25k cars...
> Because how are GM and Ford supposed to pay UAW wages, return a profit, and make a car for <$20k?
Worth noting that the the largest US EV maker is non-union and its entry-level price is ~$38k. UAW Ford sells the EV Mustang starting at $40k.
Worth noting that the the largest US EV maker is non-union and its entry-level price is ~$38k. UAW Ford sells the EV Mustang starting at $40k.
What profitable vehicles is GM selling for less than $20k?
I hope so. The price of EVs in the US market is ludicrously overinflated.
It's understandable for new startups like Rivian, Lucid and co, but in the case of existing auto manufacturers, early adopters are subsidizing the cost of redeveloping tooling that should have been easily covered by nearly a century of profit leeched away by shareholders.
GM, Ford and Stellantis should have been able to produce a sub-$20k EV by now, and none of their offerings should have ever been more expensive than a comparable trim ICE vehicle.
It's understandable for new startups like Rivian, Lucid and co, but in the case of existing auto manufacturers, early adopters are subsidizing the cost of redeveloping tooling that should have been easily covered by nearly a century of profit leeched away by shareholders.
GM, Ford and Stellantis should have been able to produce a sub-$20k EV by now, and none of their offerings should have ever been more expensive than a comparable trim ICE vehicle.
Sub $20k is not realistic in 2024.
Even barebones ICE cars without AC and with everything cheap plastic start higher and return no margin. The last car that was widely available below $20,000 was the manual, no-ac Honda civic from the widely panned post-housing bubble model generation. Mitsubishi also sold a widely panned barebones model, their Mirage, that sold poorly.
Cheap cars with no margin is a suckers bet. The auto industry carries way too much debt and can’t deliver such a product and remain in business for long.
Even barebones ICE cars without AC and with everything cheap plastic start higher and return no margin. The last car that was widely available below $20,000 was the manual, no-ac Honda civic from the widely panned post-housing bubble model generation. Mitsubishi also sold a widely panned barebones model, their Mirage, that sold poorly.
Cheap cars with no margin is a suckers bet. The auto industry carries way too much debt and can’t deliver such a product and remain in business for long.
A Nissan Versa starts at $16,390 [1] and has AC and power windows in the base model.
$19,680 with a CVT upgrade.
[1] https://www.nissanusa.com/vehicles/cars/versa-sedan.html
$19,680 with a CVT upgrade.
[1] https://www.nissanusa.com/vehicles/cars/versa-sedan.html
There are multiple sub $20k ICE cars with AC and general accoutrements available in 2024. EV cars should be even less expensive, or the same price with more margin for the manufacturer.
Please do not call things that currently exist unrealistic as hyperbole. It makes no sense.
Please do not call things that currently exist unrealistic as hyperbole. It makes no sense.
The Dacia Spring costs about 20k EUR before EV grants. Now, granted, it's a basic car, but it seems to be doable.
> The price of EVs in the US market is ludicrously overinflated
Maybe so, but the labor unions and general cost of doing business is higher in the US. But I think the major cost here is the batteries and charging tech. BYD is ahead on both these things - they were a battery company first, car manufacturer second. Their CEO is also very astute.
Maybe so, but the labor unions and general cost of doing business is higher in the US. But I think the major cost here is the batteries and charging tech. BYD is ahead on both these things - they were a battery company first, car manufacturer second. Their CEO is also very astute.
>Maybe so, but the labor unions and general cost of doing business is higher in the US.
Sure, and that's understandable - but I'm making a comparison to ICE vehicles. That doesn't provide an appreciable difference there.
Sure, and that's understandable - but I'm making a comparison to ICE vehicles. That doesn't provide an appreciable difference there.
You mean in the same way that these imported cars are currently piling up in ports in Europe without anyone buying them? Chinese producers rushed to buy up cargo ships since they couldn't get the shipping volume they wanted, but now that they have their ships it looks like the demand isn't really there.
[0] https://www.ft.com/content/496f3bfa-9f0c-4145-9024-188572a28...
[0] https://www.ft.com/content/496f3bfa-9f0c-4145-9024-188572a28...
Price point is a major factor in EV adoption. If the United States is truly looking for increased market share of EV’s then we need a lower end market.
The US market is geared too much towards “luxury” and “rent” based features and subscriptions. All which maximize profit for manufactures. If the US is serious about EV adoption then we need to compete and offer better range of prices. My two cents .
The US market is geared too much towards “luxury” and “rent” based features and subscriptions. All which maximize profit for manufactures. If the US is serious about EV adoption then we need to compete and offer better range of prices. My two cents .
>The introduction of cheap Chinese autos — which are so inexpensive because they are backed with the power and funding of the Chinese government — to the American market could end up being an extinction-level event for the U.S. auto sector,” the organization writes.
This would never happen. The industry is too big to fail. It would get bailed out just like it did during the 2008 crisis.
This would never happen. The industry is too big to fail. It would get bailed out just like it did during the 2008 crisis.
I don't know. It seems to me that every American brand other than Tesla is pretty much a non-concern outside of pickups. We could always wind up with America car production being dominated by the Germans and Japanese along with Tesla, with Ford, GM, and Chrysler being a thing of the past. Heck, we could wind up with Chinese autos produced in the USA, because how different is Mississippi from Henan anyways?
As it should, just like the dirt cheap solar panels from China scared US suppliers and drove all of them out of business. When the government subsidizes product to the point of it being significantly below market cost in order to capture market share, the folks who can't do the same lose. See: Amazon and small bookstores.
That car is small, light, has few moving parts, no luxury parts, and the most expensive part is dropping quickly in price.
It clearly is below market cost, since it sets a new price record. But subsidized?
What makes you think it's subsidized?
It clearly is below market cost, since it sets a new price record. But subsidized?
What makes you think it's subsidized?
The article says it’s subsidized. The reality is if it is at all subsidized it’s incredibly minor. Subsidizing things to such an extent is a huge drain on any government and has dire consequences.
He’s not wrong there’s a lot to fear he’s just too afraid to say exactly what it is.
China in many areas is surpassing the US in technological superiority, capability and cost. The country is viciously fighting for intellectual and economic dominance based not on cheap tricks like subsidization or tariffs but through actual superior capability. Such a future is one realistic possibility out of many and it’s not just for cars.
War between the two countries instigated by the US to maintain technological superiority is a possibility but very unlikely. If it happens there will likely be an excuse like human rights or defending Taiwan. There is little fear for this because likely the instigator for war will be the west. The west in a certain way wants war a bit more than the east.
Everything you see in this thread and outside of this fear is an excuse. This is the true thing that Americans fear. They fear it so much that they can’t even fully admit it. Instead most people lie to them selves. It’s a form of patriotism that colors most people’s biases.
He’s not wrong there’s a lot to fear he’s just too afraid to say exactly what it is.
China in many areas is surpassing the US in technological superiority, capability and cost. The country is viciously fighting for intellectual and economic dominance based not on cheap tricks like subsidization or tariffs but through actual superior capability. Such a future is one realistic possibility out of many and it’s not just for cars.
War between the two countries instigated by the US to maintain technological superiority is a possibility but very unlikely. If it happens there will likely be an excuse like human rights or defending Taiwan. There is little fear for this because likely the instigator for war will be the west. The west in a certain way wants war a bit more than the east.
Everything you see in this thread and outside of this fear is an excuse. This is the true thing that Americans fear. They fear it so much that they can’t even fully admit it. Instead most people lie to them selves. It’s a form of patriotism that colors most people’s biases.
https://www.ifw-kiel.de/fileadmin/Dateiverwaltung/IfW-Public...
Is an EU commissioned study. According to Bloomberg, it says BVD got billions of euros: https://www.bloomberg.com/news/articles/2024-04-10/byd-got-3...
Is an EU commissioned study. According to Bloomberg, it says BVD got billions of euros: https://www.bloomberg.com/news/articles/2024-04-10/byd-got-3...
I’m guessing the Chinese government bears some of this cost, particularly R&D. Even the article mentioned the government subsidizing cost. Unless you don’t believe that.
The word subsidy is used to cover quite different things, At one end, people use the word "subsidy" about tax rules that apply to everyone, and at the other, things that I too consider to be subsidies.
I wrote a similar comment about this on a different post.
They're unlikely to still be subsidized (or if it is it is small) but their subsidies did happen. China's industrial policy play book goes like this:
1. Erect barriers to foreign competitors. Subsidize domestic makers. This creates a chaotic fields of many domestic players that aren't particularly good nor efficient.
2. Remove or reduce subsidies and force the domestic players to fight for survival and thus innovate. The weaker ones will die off or get absorbed until there are only a few major domestic makers.
3. Lower barriers to foreign competitors (ie. invite Tesla to build a factory in Shanghai) to really ratchet up the competition and force innovation even more
4. Start exporting
It's not traditional subsidies but that early governmental incubation phase was a huge help in companies building up their infrastructure (subsidized by government) and know how.
Also, I want to point out this isn't an exclusively Chinese playbook but one that has been used by Japan and South Korea as well. The origin actually goes all the way back to Germany during their industrialization. The US doesn't do this because of our strong adherence to free market capitalism but people, even GOP Senator Rubio, is starting to reconsider this position.
They're unlikely to still be subsidized (or if it is it is small) but their subsidies did happen. China's industrial policy play book goes like this:
1. Erect barriers to foreign competitors. Subsidize domestic makers. This creates a chaotic fields of many domestic players that aren't particularly good nor efficient.
2. Remove or reduce subsidies and force the domestic players to fight for survival and thus innovate. The weaker ones will die off or get absorbed until there are only a few major domestic makers.
3. Lower barriers to foreign competitors (ie. invite Tesla to build a factory in Shanghai) to really ratchet up the competition and force innovation even more
4. Start exporting
It's not traditional subsidies but that early governmental incubation phase was a huge help in companies building up their infrastructure (subsidized by government) and know how.
Also, I want to point out this isn't an exclusively Chinese playbook but one that has been used by Japan and South Korea as well. The origin actually goes all the way back to Germany during their industrialization. The US doesn't do this because of our strong adherence to free market capitalism but people, even GOP Senator Rubio, is starting to reconsider this position.
TBH, if china wants to subsidize the production of green tech, more power too them. Maybe it'll start a green trade war with every country putting more and more money behind green tech. When it becomes ubiquitous, then we can start worrying about fairness.
US automakers had ample opportunity to be leaders in this space and completely neglected it. Now they face the consequences of that decision.
US automakers had ample opportunity to be leaders in this space and completely neglected it. Now they face the consequences of that decision.
Would BYD even be able to sell it here for $10k? Pretty sure Trump slapped a bunch of tariffs on Chinese vehicles, and Biden may have hiked those tariffs. To me, the logical step is for Chinese vehicles to build factories in Mexico and then ship vehicles into the country so they qualify as NAFTA vehicles. No way will it be $10k, but it certainly won't be $40k like other electric vehicles.
> To me, the logical step is for Chinese vehicles to build factories in Mexico and then ship vehicles into the country so they qualify as NAFTA vehicles. No way will it be $10k, but it certainly won't be $40k like other electric vehicles.
I wouldn't be so sure it won't be $10k. The cost of labor in China has been going up for a while now. China's strength in the EV market comes from their near monopoly on the supply chain. What a lot of Chinese companies have been doing is to do most of the manufacturing in China and ship the major components off for final assembly in other countries like Vietnam and Philippines. I don't see why the same thing can't happen in Mexico. In fact, a lot of manufacturing in Mexico is precisely of the final assembly sort to take advantage of NAFTA.
I wouldn't be so sure it won't be $10k. The cost of labor in China has been going up for a while now. China's strength in the EV market comes from their near monopoly on the supply chain. What a lot of Chinese companies have been doing is to do most of the manufacturing in China and ship the major components off for final assembly in other countries like Vietnam and Philippines. I don't see why the same thing can't happen in Mexico. In fact, a lot of manufacturing in Mexico is precisely of the final assembly sort to take advantage of NAFTA.
They also have abnormal access to financing as well, although that remains to be seen long term.
I believe that Chinese car companies are real, because the underlying battery manufacturers (BYD again, CATL, etc) are all leading in the mass market chemistries of LFP and Sodium Ion.
WHich by the way are the key enablers of the cheap car.
What should be REALLY concerning to car manufacturers isn't that this car is 10,000$. Sodium Ion is poised to be 25-40% the cost of lithium ion (cobalt/nickel), and LFP may be dropping from the 70% to 50% or less, for an equivalent pack. Both of those chemistries are improving on the roadmaps to being currently at 150 wh/kg (sodium ion) and 200+ wh/kg (lfp) to 200 wh/kg sodium and 250 lfp.
Anyway, what that means is that EVs aren't just going to reach ICE parity soon (probably already is in China and Tesla with their high car margin), they are going to shoot past in quickly.
So that $10,000 car might be $9,000 in two years, then $8,000 in four years, etc.
"Big ICE" is in trouble if it doesn't get its platform development and battery supply ducks in a row, Tesla won't eat their lunch, the Chinese will.
You know, assuming financial armageddon + autocratic dysfunction + demographics + Taiwan invasion sanctions don't crater the Chinese. As you stated, I can see Chinese companies diversifying their production internationally to hedge against their own government.
These are interesting times.
I believe that Chinese car companies are real, because the underlying battery manufacturers (BYD again, CATL, etc) are all leading in the mass market chemistries of LFP and Sodium Ion.
WHich by the way are the key enablers of the cheap car.
What should be REALLY concerning to car manufacturers isn't that this car is 10,000$. Sodium Ion is poised to be 25-40% the cost of lithium ion (cobalt/nickel), and LFP may be dropping from the 70% to 50% or less, for an equivalent pack. Both of those chemistries are improving on the roadmaps to being currently at 150 wh/kg (sodium ion) and 200+ wh/kg (lfp) to 200 wh/kg sodium and 250 lfp.
Anyway, what that means is that EVs aren't just going to reach ICE parity soon (probably already is in China and Tesla with their high car margin), they are going to shoot past in quickly.
So that $10,000 car might be $9,000 in two years, then $8,000 in four years, etc.
"Big ICE" is in trouble if it doesn't get its platform development and battery supply ducks in a row, Tesla won't eat their lunch, the Chinese will.
You know, assuming financial armageddon + autocratic dysfunction + demographics + Taiwan invasion sanctions don't crater the Chinese. As you stated, I can see Chinese companies diversifying their production internationally to hedge against their own government.
These are interesting times.
They're already looking to enter the Mexican market. Publicly they say this is to supply the Mexican market, and not export to the USA. It will be interesting to see if/when that changes.
https://www.reuters.com/business/autos-transportation/chines...
https://www.reuters.com/business/autos-transportation/chines...
They'd probably need to do some design work to US/European standards. The current price is highly competitive even after tariffs and taxes though. The highest import tariffs I'm aware of anywhere in the world hover around 100% in places like Singapore. $20k plus an additional $5k in pure margin is still over $1k below the MSRP of the cheapest American EV (Chevy bolt). If we assume much more reasonable 25-50% tariffs, nobody else even comes close.
Yes totally, but it's still scary knowing that the only thing standing between you and destruction is a political policy.
Also: if you consider climate change to be an end-of-the-world catastrophe, then it's pretty easy to make an argument to consider changing the tariffs at some point.
Also: if you consider climate change to be an end-of-the-world catastrophe, then it's pretty easy to make an argument to consider changing the tariffs at some point.
I find this type of car way more attractive than the bigger ones.
This struck a chord too, it looks so similar to the Suzuki Swift (that the guy quotes in a video), which was my first car (and I loved it)
'BYD said just last month that it has no plans to enter the U.S. auto market anytime soon'
No US automaker is thinking of anything like this or even losing a minute of sleep. Crank out some more 3 ton truck!
No US automaker is thinking of anything like this or even losing a minute of sleep. Crank out some more 3 ton truck!
Scaring them for good, how’s that a bad thing?! It derives innovation, competition, etc. and still at an affordable prices to the consumers.
Why can't low cost car have bigger body? If the whole car cost 10k, maybe they can enlarge the body with extra 2k.
Bigger body = higher shipping cost because bigger and heavier, also they need a bigger battery or put up with less range for the extra weight, the heavier battery itself has weight so they need even more weight still to counteract that. So maybe they'd be able to add an inch or two for 2K, then what's the point of that?
It's the Soviet Lada all over again. It turned out, however, that Americans didn't want to just buy the cheapest car. Other things factored into what car Americans preferred such as style, status symbol, etc.
In Brazil, BYD sells this car not as Seagull, but as Dolphin Mini. But, directly converting currencies, it's more like U$23.000, not U$10.000 as is being announced everywhere.
moms don't like driving tiny cars
What a completely bullshit headline for a bullshit article.
'BYD said just last month that it has no plans to enter the U.S. auto market anytime soon'
Done. There is your whole article. The US Auto industry isn't crapping it's pants worried about something that AIN'T HAPPENING and continue to keep regulations in place that make the only affordable vehicle a 3 ton megamonster super extended cab truck.
'BYD said just last month that it has no plans to enter the U.S. auto market anytime soon'
Done. There is your whole article. The US Auto industry isn't crapping it's pants worried about something that AIN'T HAPPENING and continue to keep regulations in place that make the only affordable vehicle a 3 ton megamonster super extended cab truck.
It's exactly what I would say if I were a PR person trying to figure out how to protect my company's interests.
Cars are imported from all over the world, and so long as they meet American safety standards, I think they should be.
Also if I could buy a safe, new EV for $10,000, no matter how small, I would do it tomorrow. Just because Americans have never purchased small, affordable cars _en masse_ before doesn't mean they won't in the future.