New Energy Vehicles (NEVs) in China

tphuang

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What people are worried about is whether the Indian partner will have the ability to transfer tech to Indian companies, eg pressure SAIC or its Chinese suppliers to give up technology to a local Indian supplier.

For such concerns it doesn't really matter whether SAIC holds 49% or 50% or 75%. Who holds the power on such matters in the JV depends on the terms they agree on. You could have just 10% stake and hold veto power over every decision. It's pretty rare for a 49% stakeholder to actually have zero say.

The problem is I don't trust SAIC to carve a good deal. The Indian government holds all the power in this deal, and SAIC despite being an SOE is not really known for advancing strategic industrial interests of the state. Who knows if they'll try to cut losses by giving up Chinese tech for pennies at the detriment of other companies.
The problem with your argument is that I can't think of any core EV tech that SAIC has developed. It relies on the Chinese supply chain.
You have to provide some tech for market access. That's a given. You just don't want to give away your prized tech. And frankly, MG EVs are pretty behind.
 

gelgoog

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Almost definitely the Japanese and German industry has been slow to adapt. Japan once had a totally captive phone market dominated by NTT's semi-proprietary FOMA system. Apple swept it away almost overnight. The same story with CDs/MiniDiscs vs. MP3s, Blu-Ray vs. Streaming, etc. All formerly dominated by Japanese electronics.

German software is total a$$. This is why their lunch is being eaten in China. It is all their own fault. The Q4 is a competent EV with regards to build quality and dynamics. However it is hamstrung by it's high price and crappy software (doesn't even have remote unlocking, why? no 360-degree camera, again, why?). If it had just a few more premium touches, then it should be able to better hang onto their existing customers, but it doesn't.
You touched on the main issue. The reason the iPhone and iPod were successful was due to software. Apple invented neither that kind of phone form factor (see LG Prada) nor the MP3 player segment (see the Diamond RIO). Made by South Korean and Taiwanese companies respectively. It is just that their software was much better. In the case of the iPod it wouldn't have had the success it did without the iTunes store, and in the case of the iPhone it was iOS itself. Unfortunately for both South Korea and Taiwan, or Japan for that matter, they are much weaker with regards to software development.
 

supersnoop

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You touched on the main issue. The reason the iPhone and iPod were successful was due to software. Apple invented neither that kind of phone form factor (see LG Prada) nor the MP3 player segment (see the Diamond RIO). Made by South Korean and Taiwanese companies respectively. It is just that their software was much better. In the case of the iPod it wouldn't have had the success it did without the iTunes store, and in the case of the iPhone it was iOS itself. Unfortunately for both South Korea and Taiwan, or Japan for that matter, they are much weaker with regards to software development.

Yeah, the Japanese consumer electronics industry collapsed in like 5 years and the iPhone was just the nail in the coffin. Their issues were beyond software, Japanese companies cling onto things way too long (ie. Nintendo and Cartridges)

I remember going to HK and my classmate is telling me to get him a MiniDisc player. I'm like "That's a waste of money man, why do you want something mechanical and can break a lot easier than solid memory? You're in EE, I shouldn't even need to tell you this..."
But he insisted so I got it for him, and to be fair it looked a lot nicer than those Diamond Rio's. Of course a year later he's like "Oh you were totally right"

You had Pioneer and Panasonic continue to produce Plasma screens when LCDs were clearly taking over the market (clearly customers were preferring slimmer and lighter profiles over black levels), now Pioneer displays are dead and Panasonic are rare.

Even Toyota is like this. They are saying now "Oh we were right, the EVs aren't catching on, Hybrids are the way!". But if you look closer, they are still missing the boat! They only have 2 PHEVs in NA (and most of the world in fact), RAV4 and Prius. The current Prius Prime PHEV is actually a huge step back for the NA market because it lacks AWD while the regular Hybrid has it. It's gimped for no good reason. Just stick a plug in most of your lineup and you'd probably be a winner, but where are they?

I know you roast Germans all the time. SAP, enough said, right? But their auto is beyond just software (which is bad)

The Q4 is sold in the 300K RMB price range (40K US)
In North America, this is a decent price, but in China it has to compete with everything. Cars with self driving features, while the Q4 has just the basic things like adaptive cruise and lane keeping only. Other competition has ER/PHEV options, NIO has battery swap. As I mentioned, Q4 doesn't even have remote unlocking or 360 cameras which aren't even super duper features, just dropped for cost or whatever Herr Ingenieur was thinking. Basically relying on brand recognition and service reliability only.
 

Bellum_Romanum

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How they came up with something simultaneously uglier and dumber than the cyber truck is beyond me.
It's potentially good if you're an Uber driver and Uber eats driver. You can have the drone deliver food while you drive customers to their destination, provided that the distance is within its radius.
 

tphuang

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BYD's 2023 full year report is out. I will have more stuff on this, but the R&D section is pretty impressive. BYD spent about 388k RMB per researcher. Of course, there are non-personnel R&D cost too, but it's definitely paying people a lot more now


Yuan Up has now been launched. The price is good, not fantastic. But the tech on it is pretty good at this price point.


Weekly registration numbers. Looks like BYD is not building cars fast enough right now


MSM has now come up with another complaint about Chinese auto industry

 

N00B

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On the SAIC-India situation - the recently established JV is SAIC divesting from India, not investing.

SAIC entered India in 2009 when it acquied a 50% stake in partnership with GM India. Guess they didn't find the market profitable and almost fully exited the market just 3 years later, selling 43% of its share back to GM.

GM itself left the Indian market in 2017, selling its Gujarat plant to SAIC (which still held 7% of the venture) for cheap.

This is how SAIC ended up owning a factory in India. They rebranded the venture as 'MG Motors India', set up operations over the next 2 years and started selling cars in 2019. By then a decade had passed since SAIC's first foray into India in 2009 and the Indian market was now much bigger. This time SAIC felt it could work out and they were thinking about investing more. But then Doklam happened and the Delhi halted any further large investment from Chinese companies.

So now SAIC is essentially holding a stranded asset. The Indian market is off limits for major Chinese companies. Those who entered before 2020 (like Xiaomi) will likely continue. But no other big investment is allowed in.

This deal with JSW could very well be the first step towards SAIC completely leaving India. I don't think India-China relations will improve in short to medium term. And India doesn't like foreign ownership (not just Chinese) unless you build it there and export elsewhere. Which is the economically correct decision anyway. If a foreign company is mostly going to sell locally, it's still import. That is tolerable for phones because phones are an essential goods these days. Cars are far from reaching that status in India.
 

supersnoop

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MSM has now come up with another complaint about Chinese auto industry


I would say it's mostly a clickbait-y title, but actually reflective of what you mentioned yourself regarding SAIC.

There is real overcapacity now, especially for ICE cars. It is possible that some of these plants can be replaced with EV manufacturing, but if the production of EVs is more automated, then even retooling these plants will have permanent job losses.

Tooting my own horn for a second, an economist in the article said this
In response, Jin said, government officials have started expanding the quantity and the quality of vocational schools to help match labour skills to jobs. “If anything, the Chinese government will do better than many other governments, including the US, which utterly failed in terms of helping their workers transition away from low-end manufacturing,” she said.

This is what I was saying about India before, a JV factory isn't going to do this.

(Note: I'm not a PhD from Harvard, nor am I a professor at LSE like she is, so my analysis is available for much cheaper)
 
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