The first wave of BYD cars in Europe are not competitive yet. The price difference is small, they are less efficient and they have other issues (space optimization, driving comfort, etc)
But in only one year they already started to fix all this. They are getting cheaper, correcting mistakes and opening factories in the EU.
Old makers announce a car and need 2-3 years or more to have it in the market. The Chinese brands seem to need less than a year. There will be blood.
IDK in the rest of Europe, but in Spain there's a growing resentment against euro auto makers as there's a perceived unfair price increase with lots of quality issues and bad customer-facing practices.
Also, everyone is aware they are lobbying the EU for keeping competitors out.
IMO they are building reputational damage and it will last. People is going through hardship and what they see is companies trying to squeeze them and taking advantage.
Every new YT reviewing a car has at least ~5 most upvoted comments complaining about this issues, over and over again, and this has been going for a while.
As I commented somewhere else, Chinese EV makers are state enterprises that dump their production at a loss on the European market.
Cars have become expensive, but their baseline in safety requirements (and luxury) has increased a lot too. This is true for all cars, European or not. Cheap Asian brands have also become more expensive or went away as they cannot meet safety regulations.
We dump a lot of subsidies on our factories too. But in the end it doesn't matter, because most people remember that a few years ago you were able to buy chap cars <10k. That mean that modal incomes could afford to have a car.
Now 10k is the price of a second-hand car with lots of potential issues. It got to a point that there are companies that offer pericial services with a guy who goes to review the car with an ODB reader and everything. That wasn't happening here.
But it isn't only the cheap market. Premium brands are pushing a lot of BS and people is taking notice.
You can't squeeze people indefinitely without no repercussion. It's just impossible.
The last car I bought for 10k€ (not less than, in fact it was probably closer to 11) was a Chevrolet Spark in 2011. I remember that for 9k€ you could buy a Hyundai that didn't even have electric windows, but everything else was above 10k€.
Last year, with subsidies I replaced it with an electric Dacia Spring for 16k€. It is much better than the old one (slightly larger, obviously more silent, less TCO since I charge it at home) and yes, it was subsidized by the state, but a similar ICE car could be bought new for the same price and it would also be better than the 2011 car. It sums up to +25% in 12 years for a better product, which is not a lot.
> dump their production at a loss on the European market.
How much money are they losing? How can they afford to do that? How long can they keep that up?
China’s overall BEV exports rose 70 percent in 2023, reaching $34.1 billion.
The European Union (EU) is the largest recipient of Chinese BEV exports, accounting for nearly 40 percent of them. Other European countries (Albania, European Free Trade Association members, North Macedonia, Ukraine, and the United Kingdom) held a 15 percent share of Chinese shipments in the same year.
How much depends on bookkeeping, but for the NIO it was $35000 __per car__ last year. So that gives you an idea of the investment involved.
How long can they afford that: China has a big trade surplus, high youth unemployment, low domestic demand and no accountable leadership. So: very long.
This is a bit of a non sequitur, but ok, VW in China is built by the Chinese SAIC. The 16K price was a temporary sale price.
In Europe this model of VW is imho over priced indeed, and price sensitive people should buy Korean/Japanese cars anyways.
Aside, what most people seem to miss is that the model mentioned in the article is not for sale in Europe and likely will not be (rumours because it does not meet safety criteria). Its bigger brother is, but that one is also a lot more expensive.
The Chinese model cannot be sold in the EU because VW blocked parallel import.
It very much meets safety criteria it indeed does not have the middle airbag but it’s not a requirement for the EU or the US.
The normal pricing is still less than half of the EU price and it’s not that VW just gave it to SIAC and called it a day.
It’s a JV which VW has a 50% share in so again are they loosing $35K per car or not?
SIAC is a massive automaker so they are a far better example of what kind of profit margins you can expect.
The same goes for Volvo which produces the EX30 in China and the current EX30’s available to buy in the EU and the rest of the world are made in China since Volvo won’t start production in Europe until late 2025.
The reality is that there aren’t many EVs currently in Europe that are both functional and affordable in fact there are non.
The ID.3 is probably the minimal family car you can have and I would argue that if you have kids the ID.4 or 5 are probably the minimum you would comfortably get by with.
Korean and Japanese EVs aren’t much better either as the Kia EV6 or the Hyundai Ioniq 5/6 are quite expensive as well.
> The reality is that there aren’t many EVs currently in Europe that are both functional and affordable in fact there are non.
True. I don't understand what we argue about.
- Cars in Europe have become more expensive, regardless if it is a Kia or a VW.
- The Chinese state distort the markets.
I guess we both love cheap transportation. The fact that in this competitive market all brands got more expensive tempers the suspicion that there are wild margins. But I also suspect that we do pay those higher prices regardless because we can.
In China there is a price war, precisely because the state funds a massive scale of EV production. Some Chinese EV manufacturers went bankrupt, but the state brought them back to live. Also, the Joint Venture of VW-Siac receives those subsidies, which helps VW to keep prices low in China. The example you gave was a temporary sale, initially scoped to just 7000 cars, but later increased to 17000. But yes, price difference between EU-China is still big nonetheless for this model.
China is a big market, and all players are working hard to get a foot in the door to establish their brand.
I fear that once a brand is established prices will rise. If you look at the phone market, the OnePlus was once a cheap flag ship killer. Now it is just as expensive.
"at a loss" can be very different depending on :
- is it pure marginal cost ?
- do you include a part of R&D cost ?
- do you factor large capex (factory, stamping press, and silicon fab in related industries )
- how do you compute depreciation ?
When you see the gap between accounting in the West and "accounting" in China, "at a loss" has no meaning at all.
Given that the China is an adversary, accepting their car in the market en masse doesn't sound good from the EU security perspective. If the cars have remote kills switch or something similar, in the event of Chinese-Russian invasion, they could easily disable all transport and prevent people from leaving to safety or cause other troubles.
I view Chinese expansion in that sector as a Trojan horse.
Mind you that maybe the "company" (Chinese "companies" are not the same thing as we know in the West - these are more like government departments) has good intentions, but when the time comes, the party can order them to do whatever they need to be done.
The concern is a bit silly. You realize that while most of us are dying from starvation and radiation piosoning, the car working or not is like not even a concern.
Meanwhile, I rather drive whatever car I like, including Chinese ones. Especially cars witch the government think should not spy on me since they don't feel they control it.
I remember people saying that the concept of full scale Russian invasion of Ukraine was silly.
I think you are underestimating dictators in their 70s with nothing to lose, power of propaganda and the fact that when there is war, there is opportunity to make fortunes.
I'm looking to get a car these days in EU. The government gives out subsidy for electric cars and even without it, there is simply nothing almost as good in Teslas range. EU makers are either too expensive or try to sell you shit for gold
But in only one year they already started to fix all this. They are getting cheaper, correcting mistakes and opening factories in the EU.
Old makers announce a car and need 2-3 years or more to have it in the market. The Chinese brands seem to need less than a year. There will be blood.