> 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.
How much money are they losing? How can they afford to do that? How long can they keep that up?
https://www.atlanticcouncil.org/blogs/new-atlanticist/china-...