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Chinese Economics Thread
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No. Whilst you can say Tesla single handily started the EV revolution in the West, that doesn't apply to China.
China was already leading the way to producing competitive EVs, as we've seen with CATL, BYD, Xpeng, NIO etc. See article below
EV sales in China skyrocketed because Chinese companies were the only ones to make low-cost LFP batteries, which makes EVs affordable and is an "easy" battery technology to scale. Tesla opened a factory in Shanghai to benefit from the existing low production costs in China and tap into the LFP battery supply chain. Remember that Tesla doesn't make LFP batteries, but are now on record saying LFP batteries are the future. China already had 80% of the entire EV supply chain. Today, China accounts for 57% of all EV sales, so more EVs are sold in China than in the rest of the world combined.
And if anything, the entry of Tesla has hurt NIO, Li Auto, BYD, XPeng. If Tesla wasn't around, these Chinese companies would see even higher sales and wouldn't have to compete with Tesla for battery materials. But at the same time, Tesla Shanghai is essentially a Chinese company which sources everything from China and exports much of its production to the West, so it's a net win for Tesla and China overall.
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The World’s Leading Electric-Car Visionary Isn’t Elon Musk
Wan Gang pushed China to leapfrog the West in electric vehicles.
bloomberg.com/news/features/2018-09-26/world-s-electric-car-visionary-isn-t-musk-it-s-china-s-wan-gang#xj4y7vzkg
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I disagree. Tesla forced these nascent Chinese EVs to up their game. Which they did. Now Tesla is (gradually) being left in the dust. And yes, Tesla is almost a Chinese EV company with majority US shareholders. They source a lot of their parts from Chinese companies and assemble them in China.
Your exact words are "to up their game"
The Chinese car market is the world's largest and most cut throat market in the world.
Those nascent Chinese carmakers were already having to up their game as fast as possible anyway.
They didn't really need Tesla for additional motivation.
Hard disagree. When Tesla first debuted it was ahead of the pack, outselling domestic brands even in China. Now it is being left in the dust. Chinese EVs needed that kick up the butt.
Not just motivation. A recognized golden reference standard/hard metrics to match or exceed. Tesla is essential/critical to China's EV success just like SpaceX forced China to consider rocket reusability a decade or more sooner.
Exactly. I laugh when people try to discount Tesla's contribution to the EV industry. In the beginning, almost every established player thought it was impossible. Toyota, GM, VW, all thought it was a joke, while Tesla was already looking ahead with a nationwide charging network in the US. They couldn't imagine how a small time, loss making up-start could compete with established players with 150 years of experience.
China saw the potential with EVs (especially when it comes to gov't goals of reducing air pollution and carbon reduction), and Tesla helped a slew of Chinese companies become more competitive. Kicked started local suppliers to make increasingly sophisticated components. It the CatFish effect, and Tesla at the time was the biggest fish in China.
********The Shanghai government literally had an aneurysm trying to help set up the Tesla GigaFactory. Power and water was turned on in 12 days. Every single Tesla workers got masks when there was a nationwide shortage at the time. Tesla wanted cheap loans, subsidies, tax benefits, 100% ownership, it got it all.
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@Petrolicious88
Agreed. Tesla did give Chinese EVs a kick up the butt.
But the Chinese automakers and suppliers would have gotten to current development levels anyway, but perhaps 2 years later than in real life.
Hence my statement that "whilst Tesla single handily started the EV revolution in the West, that doesn't apply to China."
The Chinese EV revolution would have continued on regardless of whether Tesla existed or not.
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In comparison, if Tesla hadn't been able to obtain Chinese funding to build a Chinese factory in 2019, there's a high chance that Tesla would have actually gone bankrupt in 2019. Remember Tesla only had 1 month of cash in 2019.
Again, if Tesla had gone bankrupt, the Chinese EV revolution would have continued on regardless.
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