Car market China
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Would you have thought that there are 140 companies in China (according to CNBC) that produce electric cars? Yes, not only is China the largest carmaker in the world with a share of one third of total production, but it
also
produces more than its own market can absorb.
No, apart from the MG4, we don't really notice much of it, and the USA, which was blocked off by tariffs before the cars could even arrive, probably doesn't either. But take a look at Australia, South Africa, Israel, Mexico and
Brazil. Cars from China are booming there.
If we take Tesla's Model Y for this chapter, then the Tesla is significantly cheaper here, especially with the current premiums, but in China the car is clearly ahead in terms of price per range at $25,000, which is $11,000
cheaper.
There is talk of state subsidies averaging 1.5 billion US dollars per year over the last 15 years, with a downward trend. This is also how BYD was able to work its way up to become Tesla's biggest rival. It is unclear,
however, whether the foreign partner's share is not taken into account in the many joint ventures.
There is Geely with Volvo, Polestar, Lynk & Co and Lotus, which is also building the new Smart together with Mercedes and owns a 10% share in Mercedes. Or take the company XPeng, in which VW currently owns 5%
and
with which they are currently developing two medium-sized vehicles. Also worth mentioning is BMW's 75% share in Brilliance Automotive Ltd.
Not to forget the Mini-E, which is built at Great Wall Motors. Then there are the company's own models that are built in China, the iX3, from Mercedes the Smart #1/3 and four EQ models, VW has the Cupra Tavascan built
there, Stellantis Citroën C5X, DS the DS9.
The joint venture between SAIC Motor and VW has not yet been mentioned, which seems to be shifting more towards Audi recently. SAIC Volkswagen has 5 factories in addition to its headquarters. But Mercedes seems to
be taking things to the extreme with what is now the largest of its factories in Beijing.
In terms of sales, VW has now been overtaken by BYD, BMW and Audi has sold now a third of VW. This probably does not take into account the cars produced in cooperation with Chinese companies, nor which of the
German companies' commitments were involved in the subsidies.
What is known is that BYD has profited the most, with almost a billion US dollars in each of the last four years. But these are not the only trump cards of Chinese companies. Added to this are cheap labor and materials.
BYD, for example, is also one of the world's leading battery manufacturers.
Not only are pure electric cars sold, but half of them are also plug-in hybrids, a total of around 3 million units in 2023, of course with a strong upward trend. Tesla, on the other hand, has sold even more pure electric cars
than BYD with 1.8 million units, but has nevertheless continuously lost market share.
BYD's cost advantage does not even relate primarily to the battery, but rather to the rapidly increasing in-house production of other automotive components that Tesla has to buy at a higher price. Chinese car
manufacturers
are also said to benefit from local support, which in turn reminds us of Toyota's production successes.
Next, CNBC compares the XPeng G6 with the Model Y, again with a strikingly similar range at a significantly lower price. And although the Tesla is highly respected in China, its trend toward maximum simplicity seems to
be at odds with that preferred by the Chinese.
If we leave aside the normal comfort extras such as ventilated massage seats and automatic parking scenario, then the TV programs that can also be seen from the driver's side and the really authentic sound of a
combustion engine seem rather exaggerated, or due to the many traffic jams in big cities.
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