I think comparing Chinese EVs to shitware like Temu is wrong and potentially harmful.
The PRC can pump out EVs more efficiently in the same way TSMC can pump out chips efficiently. Yes there are government subsidies, but that’s not the main reason why they’re so cheap
China has lithium: China has lithium within its borders, and has the 3rd largest reserves in the world. Unlike Tesla or European manufacturers which needs to import lithium, China can source it locally, drastically reducing the cost. In recent years, due to demand, technology involving the mining of lithium has increased significantly, further increasing output (and lowering price). Unlike Chile and Australia (other lithium rich countries), China has the capacity to mine it domestically at scale, making it extremely cheap.
China has domestic battery production: CATL is actually a world leading battery manufacturer and innovator. CATL, Samsung, LG, Panasonic and BYD account for 75% of all battery production on the planet. Even if a Chinese manufacturer is buying batteries from South Korea or Japan, the shipping costs is vastly reduced compared to shipping to Europe or the Americas.
China has pre-existing industry and economy of scale: I’m sure you may have noticed, but China has laid more railways than the rest of the world combined in the last decade and a half. Building trains, planes, space stations and cities requires steel, factories that pump out steel are located in China. You’re not starting from scratch, there are many, many, many factories that pump out quality steel for extremely low prices because the demand has been there for decades.
China has cheap labour: I’m not sure I have to explain this one
China has a domestic market: There are 1.4 billion people in China, even if 10% want to buy a car, that market is larger than entire nations.
China makes the machines that build the cars: A BMW or Volkswagen factory will have robotics that assemble the arms. Those robots are either made in China fully or partially. That exact same machine, therefore, would be cheaper to acquire within China, and would be cheaper and quicker to repair if it breaks down because the factory that makes the machines is also in China. And as demand grows, guess what? The machines that make the machines that build the cares are also in China. The machine that builds robot arms that attach car doors to the frame is already in China.
Each of these factors (and I’m sure more that I’ve forgotten) has a ripple effect is the main reason why Chinese EVs are so cheap, government subsidies are only partial.
I think comparing Chinese EVs to shitware like Temu is wrong and potentially harmful.
The PRC can pump out EVs more efficiently in the same way TSMC can pump out chips efficiently. Yes there are government subsidies, but that’s not the main reason why they’re so cheap
China has lithium: China has lithium within its borders, and has the 3rd largest reserves in the world. Unlike Tesla or European manufacturers which needs to import lithium, China can source it locally, drastically reducing the cost. In recent years, due to demand, technology involving the mining of lithium has increased significantly, further increasing output (and lowering price). Unlike Chile and Australia (other lithium rich countries), China has the capacity to mine it domestically at scale, making it extremely cheap.
China has domestic battery production: CATL is actually a world leading battery manufacturer and innovator. CATL, Samsung, LG, Panasonic and BYD account for 75% of all battery production on the planet. Even if a Chinese manufacturer is buying batteries from South Korea or Japan, the shipping costs is vastly reduced compared to shipping to Europe or the Americas.
China has pre-existing industry and economy of scale: I’m sure you may have noticed, but China has laid more railways than the rest of the world combined in the last decade and a half. Building trains, planes, space stations and cities requires steel, factories that pump out steel are located in China. You’re not starting from scratch, there are many, many, many factories that pump out quality steel for extremely low prices because the demand has been there for decades.
China has cheap labour: I’m not sure I have to explain this one
China has a domestic market: There are 1.4 billion people in China, even if 10% want to buy a car, that market is larger than entire nations.
China makes the machines that build the cars: A BMW or Volkswagen factory will have robotics that assemble the arms. Those robots are either made in China fully or partially. That exact same machine, therefore, would be cheaper to acquire within China, and would be cheaper and quicker to repair if it breaks down because the factory that makes the machines is also in China. And as demand grows, guess what? The machines that make the machines that build the cares are also in China. The machine that builds robot arms that attach car doors to the frame is already in China.
Each of these factors (and I’m sure more that I’ve forgotten) has a ripple effect is the main reason why Chinese EVs are so cheap, government subsidies are only partial.