Latest news with #affordableEVs
Zawya
a day ago
- Automotive
- Zawya
Why China's auto, tech giants threaten Tesla's self-driving future
AUSTIN, Texas - Chinese electric-vehicle makers led by BYD beat Tesla in the competition to produce affordable electric vehicles. Now, many of those same fierce competitors are pulling into the passing lane in the global race to produce self-driving cars. BYD shook up China's smart-EV industry earlier this year by offering its 'God's Eye' driver-assistance package for free, undercutting the technology Tesla sells for nearly $9,000 in China. 'With God's Eye, Tesla's strategy starts to fall apart,' said Shenzhen-based BYD investor Taylor Ogan, an American who has owned several Teslas and driven BYD cars with God's Eye, which he called more capable than Tesla's 'Full Self-Driving' (FSD). It's not just BYD. Other Chinese auto and tech companies are offering affordable EVs with FSD-like technology for a relative pittance. China's Leapmotor and Xpeng, for instance, offer systems capable of highway and urban driving in $20,000 vehicles. A slew of Chinese firms are chasing the same technology, an industry push backed by China's government. BYD's assisted-driving hardware costs are far lower than Tesla's, according to analyses performed for Reuters by companies that dismantle and analyze vehicles for automakers. The comparisons, which have not been previously reported, show that BYD's costs to procure components and build a system with radar and lidar are about the same as Tesla's FSD, which doesn't have such sensors. That undercuts Tesla's unusual technological approach, which aims to save costs by nixing such sensors and relying solely on cameras and artificial intelligence. The rising competition from Chinese smart-EV players is among the chief problems confronting Tesla CEO Elon Musk after his rocky tenure as a Trump administration advisor as he refocuses on his business empire - as Tesla vehicle sales are tanking globally. The stakes are made higher by a moment-of-truth challenge this month in Tesla's home base of Austin, Texas, where it plans to launch a robotaxi trial with 10 or 20 vehicles after a decade of Musk's unfulfilled promises to deliver self-driving Teslas. Tesla did not respond when reached for comment about its Chinese competitors. Previously, Musk has described Chinese car companies as the most competitive in the world. Chinese competition was one factor driving Tesla's strategic pivot away from mass-market EVs last year, when Reuters reported it had killed plans to build an all-new EV expected to cost $25,000. Musk has since staked Tesla's future instead on self-driving robotaxis, the hopes for which now underpin the vast majority of the automaker's stock-market value of roughly $1 trillion. Now Tesla faces the same stiff competition on vehicle autonomy from many of the same Chinese automakers who undercut its affordable-EV plans. Adding to the challenge are tech firms including Chinese smartphone giant Huawei, which supplies autonomous-driving technology to major Chinese automakers. Short of full autonomy, today's driver-assistance systems offer a critical competitive edge in China, the world's largest car market, where Tesla sales are falling amid a protracted price war among scores of homegrown EV brands. Tesla is further handicapped by China's regulations preventing it from using data collected by Tesla cars in China to train the artificial intelligence underpinning FSD. Tesla has been negotiating with Chinese officials, so far without success, to get permission to transfer such data back to the United States for analysis. Tesla's competitors in China do benefit from subsidies and other forms of policy support from Beijing for advanced assisted driving technology. Their advantages also stem from another consequential factor: cut-throat smart-EV competition that has characterized their industry over the past decade. The resulting EV boom created economies of scale and the industry's tendency to forgo some profit margins to expand new technologies' market penetration quickly, leading to lower manufacturing costs. STREETS OF SHENZHEN BYD investor Ogan, of Shenzhen-based Snow Bull Capital, has a front-row seat to China's autonomous-tech battleground. He recently drove several BYD models equipped with God's Eye, he said, and didn't have to take over driving in any of them while traveling the congested streets of Shenzhen, a bustling southern China megalopolis of 18 million people. Another notable smart-EV player in China is Huawei, experts say. Huawei lends its technology and branding to a half dozen automakers including heavyweights Chery, SAIC and Changan, and has lower-profile partnerships with more than a dozen other carmakers, Huawei representatives said. Reuters journalists rode in an Aito M9 — a luxury electric SUV from Seres with Huawei driver-assistance technology — as it navigated Shenzhen roadways in April. With a driver's hands off the wheel, the vehicle exited a highway seamlessly into a congested urban zone, where the M9 proceeded cautiously and slowed to a crawl as a construction worker appeared like he might walk into the roadway. At one point the vehicle turned right and slowly drifted left to avoid two men unloading boxes from a parked truck. The vehicle then parallel parked itself at Huawei's Shenzhen headquarters. Huawei was among several Chinese companies, including automakers Zeekr, Changan and Xpeng, that touted progress towards fully-autonomous cars at April's Shanghai auto show, even as Beijing announced a new marketing crackdown on terms such as 'smart' and 'intelligent' driving in the wake of a deadly crash in a Xiaomi vehicle involving driver-assistance technology. Huawei said it's ready to undergo a new validation regime being developed by Chinese regulators to certify so-called Level 3 driving systems, meaning they are capable enough to allow drivers to look away unless notified by the system to take over. Zeekr, a luxury brand of China auto giant Geely, also plans to soon sell cars with Level 3 systems. Tesla has yet to release such an "unsupervised" version of FSD because its technology needs more training to operate without a driver's hands on the wheel and eyes on the road. Tesla plans to launch self-driving robotaxis in Austin this month. Little is known about its plans. The company has said it aims to initially deploy between 10 and 20 fare-collecting driverless robotaxis in restricted geographic areas of the city, which Tesla has not publicly identified. 'GOD'S EYE' ON THE CHEAP Chinese EV makers are moving quickly to develop driver-assistance systems in a market where car-buyers are demanding them at a faster pace than in other regions, analysts say. Their ability to do so at lower costs poses the biggest threat to Tesla's new autonomy-based business model. BYD buyers can get an FSD-comparable version of God's Eye as a standard feature in cars priced at about $30,000. The cheapest FSD-equipped Tesla in China is a Model 3 selling for about $41,500. According to an analysis by A2MAC1, a Paris-based tear-down firm that benchmarks components, the mid-level God's Eye version most comparable to Tesla's FSD runs on an Nvidia computing chip with data collected through 12 cameras, five radars, 12 ultrasonic sensors, and one lidar sensor, at a cost of $2,105. That compares to $2,360 for Tesla's FSD, which uses cameras without sensors and two AI chips, the firm estimates. Cameras, radar and ultrasonic sensors are 40% cheaper in China than comparable devices in Europe and the United States, A2MAC1 estimates. Lidar sensors cost about 20% less, the firm says. Sensor costs have fallen because China's EV boom created economies of scale, said A2MAC1 engineer Elena Zhelondz. The fierce competition also pushed carmakers and suppliers to accept lower profits on driver-assistance equipment, she said. BYD's 22% gross margin will likely fall as it gives away God's Eye but it will benefit from a vehicle-sales boost, said Chris McNally, head of global automotive and mobility research for advisory firm Evercore. MORE CARS, MORE MILES, BETTER AI Falling behind the Chinese brands on driver-assistance technology would compound Tesla's challenges in China, where it's already losing market share to rivals including BYD, which sells an entry-level EV for less than $10,000. The growing scale of BYD and others could also provide a technological advantage: Racking up more miles on China roads helps train the AI technology needed to perfect automated-driving systems. BYD has a 'clear and ongoing market-share driving advantage' over Tesla in gathering such on-road data to refine God's Eye, Evercore's McNally said, adding that advantage might only increase as offering God's Eye for free helps sell more BYD vehicles. BYD's scale also helps lower costs by providing uncommon leverage over suppliers. In November, a BYD executive in charge of passenger-vehicle operations wrote to suppliers telling them that the automaker sold 4.2 million vehicles last year (more than double the number of Teslas sold) because of 'technical innovation, economies of scale, and a low-cost supply chain.' The executive noted the new year would likely bring more growth, but also fiercer competition. Without specifically mentioning God's Eye, he ended the letter by asking the suppliers for an across-the-board 10% price cut on all parts and systems starting on January 1, calling the new year a final 'knockout round.' (Reporting by Norihiko Shirouzu in Austin. Additional reporting by Chris Kirkham in Los Angeles and Zoey Zhang in Shanghai. Editing by Mike Colias, Brian Thevenot and Anna Driver.)
BBC News
2 days ago
- Automotive
- BBC News
China's electric cars are becoming slicker and cheaper - but is there a deeper cost?
BBC Go to the comments section at the bottom of this page to share what you think about the rise of these more affordable EVs In China, they call it the Seagull, and it has looks to match. It is sleek and angular, with bright, downward-slanting headlights that have more than a hint of mischievous eyes about them. It is, of course, a car. A very small one, designed as a cheap city runabout – but it could have huge significance. Available in China since 2023, where it has proved extremely popular, it has just been launched in Europe with the name Dolphin Surf (because Europeans apparently aren't as keen on seagulls as Chinese people). When it goes on sale in the UK this week, it's expected to have a price tag of around £18,000. That will still make it, for an electric car on western markets, very cheap indeed. It won't be the outright lowest-priced model on offer: the Dacia Spring, manufactured in Wuhan jointly by Renault and Dongfeng, and the Leapmotor T03, which is being produced by a joint venture between Chinese startup Leapmotor and Stellantis, both cost less. But the Dolphin Surf is the new arrival that has long-established brands most worried. That is because the company behind it has been making ever bigger waves on international markets. BYD is already the biggest player in China. It overtook Tesla in 2024 to become the world's best-selling maker of electric vehicles (EVs), and since entering the European markets two years ago, it has expanded aggressively. "We want to be number one in the British market within 10 years," says Steve Beattie, sales and marketing director for BYD UK. BYD is part of a wider expansion of Chinese companies and brands that some believe could change the face of the global motor industry – and which has already prompted radical action from the US government and the EU. It means once-unknown marques like Nio, Xpeng, Zeekr or Omoda could become every bit as much household names as Ford or Volkswagen. They will join classic brands such as MG, Volvo and Lotus, which have been under Chinese ownership for years. The products on offer already encompass a huge range, from runabouts like the tiny Dolphin Surf to exotic supercars, like the pothole-jumping U9, from BYD's high-end sub-brand Yangwang. "Chinese brands are making massive inroads into the European market," says David Bailey, professor of business and economics at Birmingham Business School. In 2024, 17 million battery and plug-in hybrid cars were sold worldwide, 11 million of those in China. Chinese brands, meanwhile, had 10% of global EV and plug-in hybrid sales outside their home country, according to the consultancy Rho Motion. That figure is only expected to grow. For consumers, it should be good news – leading to more high-quality and affordable electric cars becoming available. But with rivalry between Beijing and western powers showing no sign of subsiding, some experts are concerned Chinese vehicles could represent a security risk from hackers and third parties. And for established players in Europe, it represents a formidable challenge to their historic dominance. "[China has] a huge cost advantage through economies of scale and battery technology. European manufacturers have fallen well behind," warns Mr Bailey. "Unless they wake up very quickly and catch up, they could be wiped out." Cut-throat competition in China China's car industry has been developing rapidly since the country joined the World Trade Organisation in 2001. But that process accelerated rapidly in 2015, when the Communist Party introduced its "Made in China 2025" initiative. The 10-year plan to make the country a leader in several high-tech industries, including EVs, attracted intense criticism from abroad, and particularly the US, amid claims of forced technology transfers and theft of intellectual property – all of which the Chinese government denies. Fuelled by lavish state funding, the plan helped lay the groundwork for the breakneck growth of companies like BYD – originally a maker of batteries for mobile phones – and allowed the Chinese parent companies of MG and Volvo, SAIC and Geely, to become major players in the EV market. "The general standard of Chinese cars is very, very high indeed," says Dan Caesar, chief executive of Electric Vehicles UK. "China has learned extremely quickly how to manufacture cars." Yet competition in China has become ever more cut-throat, with brands jostling for space in an increasingly saturated market. This has led them to hunt for sales elsewhere. While Chinese firms have expanded into East Asia and South America, for years the European market proved a tough nut to crack – that is, until governments here decided to phase out the sale of new petrol and diesel models. The transition to electric cars opened the door to new players. "[Chinese brands] have seen an opportunity to get a bit of a foothold," says Oliver Lowe, UK product manager of Omoda and Jaecoo, two sub brands of the Chinese giant Chery. Low labour costs in China, coupled with government subsidies and a very well-established supply chain, have given Chinese firms advantages, their rivals have claimed. A report from the Swiss bank UBS, published in late 2023, suggested that BYD alone was able to build cars 25% more cheaply than western competitors. Chinese firms deny the playing field is uneven. Xpeng's vice chairman Brian Gu told the BBC at the Paris Motor Show in 2024 that his company is competitive "because we have fought tooth and nail through the most competitive market in the world". 'Naked protectionism' from the US? Concerns that Chinese EV imports could flood international markets at the expense of established manufacturers reached fever pitch in 2024. In the US, the Alliance for American Manufacturing warned they could prove to be an "extinction-level event" for the US industry, while the European Commission president Ursula von der Leyen suggested that "huge state subsidies" for Chinese firms were distorting the European market. The Biden administration took dramatic action, raising import tariffs on Chinese-made EVs from 25% to 100%, effectively making it pointless to sell them in the US. It was condemned by Beijing as "naked protectionism". Meanwhile, in October 2024, the EU imposed extra tariffs of up to 35.3% on Chinese-made EVs. The UK, however, took no action. Matthias Schmidt, founder of Schmidt Automotive Research, says the EU's tariffs have now made it harder for Chinese firms to gain market share. "The door was wide open in 2024... but the Chinese failed to take their chance. With the tariffs in place, Chinese manufacturers are now unable to push their cost advantage onto European consumers." Renault's ultra-modern EV hub European manufacturers have been racing to develop their own affordable electric cars. French car-maker Renault is among them. At its factory in Douai, in northeastern France, an army of spark-spitting robots weld sections of steel to form car bodies, while on the main assembly line, automated systems mate together bodyshells, doors, batteries, motors and other parts, before human workers apply the finishing touches. The factory has been making cars for Renault since 1974, but four years ago, the ageing production lines were replaced with new highly automated, digitally-controlled systems. Part of the site was also taken over by the Chinese-owned battery firm AESC, which built its own "gigafactory" next door. Renault It's part of Renault's wider plan to set up an ultra-modern EV "hub" in northern France. Mirroring the lean production techniques of Chinese manufacturers, the hub cuts costs by maximising efficiency and ensuring that suppliers are located as close as possible. "Our target was to be able to produce affordable electric cars here to sell in Europe," explains Pierre Andrieux, director of the Douai plant, arguing that automated processes "will enable us to do that profitably". But the company is also exploiting something the Chinese brands do not have: heritage. Its latest model, the Renault 5 E-tech, built in Douai, borrows its name from one of the company's most famous products. The original Renault 5, launched in 1972, was a quirky little everyman car with boxy looks and low running costs that became a cult classic. The new design, despite being a state-of-the art EV, pays homage to its predecessor in name and appearance, in an effort to emulate its popular appeal. Security, spyware and hacking concerns But irrespective of how desirable Chinese cars are in comparison with European rivals, some experts believe we should be wary of them – for security reasons. Most modern vehicles are internet-enabled in some way – to allow satellite navigation, for example – and drivers' phones are often connected to car systems. Pioneered by Tesla, so-called "over-the-air updates" can upgrade a car's software remotely. This has all led to concerns, in some quarters, that cars could be hacked and used to harbour spyware, monitor individuals or even be immobilised at the touch of a keyboard. Earlier this year, a British newspaper reported that military and intelligence chiefs had been ordered not to discuss official business while riding in EVs; it was also alleged that cars with Chinese components had been banned from sensitive military sites. Then in May, a former head of the intelligence service MI6 claimed that Chinese-made technology in a range of products, including cars, could be controlled and programmed remotely. Sir Richard Dearlove warned MPs that there was the potential to "immobilise London". Beijing has always denied all accusations of espionage. A spokesperson for the Chinese embassy in London says that the recent allegations are "entirely unfounded and absurd". "China has consistently advocated the secure, open, and rules-based development of global supply chains," the spokesperson told the BBC. "Chinese enterprises operating around the world are required to comply with local laws and regulations. "To date, there is no credible evidence to support the claim that Chinese EVs pose a security threat to the UK or any other country." Chinese government is 'not hell-bent on surveillance' Joseph Jarnecki, research fellow at defence and security think-tank The Royal United Services Institute, argues that potential risks can be mitigated. "Chinese carmakers exist in this highly competitive market. While they're beholden to Chinese law and that may require compliance with national security agencies, none of them want to damage their ability to grow and to have international exports by being perceived as a security risk," he says. "The Chinese government equally is conscious of the need for economic growth. They're not hell-bent on solely conducting surveillance." But the car industry is just one area in which Chinese technology is becoming increasingly enmeshed in the UK economy. To achieve the government's climate objectives, for instance, "It will be necessary to use Chinese-supplied technology", adds Mr Jarnecki. He believes that regulators of key industries should be given sufficient resources to monitor cyber security and advise companies using Chinese products of any potential issues. As for electric cars powered by Chinese technology, there's no question that they're here to stay. "Even if you have a car that's made in Germany or elsewhere, it probably contains quite a few Chinese components," says Dan Caesar. "The reality is most of us have smartphones and things from China, from the US, from Korea, without really giving it a second thought. So I do think there's some fearmongering going on about what the Chinese are capable of. "I think we have to face the reality that China is going to be a big part of the future." Top image credit: Reuters
Free Malaysia Today
2 days ago
- Automotive
- Free Malaysia Today
Why China's auto, tech giants threaten Tesla's self-driving future
The cheapest Full Self-Driving-equipped Tesla in China is a Model 3 selling for about US$41,500. (Tesla pic) AUSTIN : Chinese electric vehicle (EV) makers led by BYD beat Tesla in the competition to produce affordable EVs. Now, many of those same fierce competitors are pulling into the passing lane in the global race to produce self-driving cars. BYD shook up China's smart-EV industry earlier this year by offering its 'God's Eye' driver-assistance package for free, undercutting the technology Tesla sells for nearly US$9,000 in China. 'With God's Eye, Tesla's strategy starts to fall apart,' said Shenzhen-based BYD investor Taylor Ogan, an American who has owned several Teslas and driven BYD cars with God's Eye, which he called more capable than Tesla's 'Full Self-Driving' (FSD). It's not just BYD. Other Chinese auto and tech companies are offering affordable EVs with FSD-like technology for a relative pittance. China's Leapmotor and Xpeng, for instance, offer systems capable of highway and urban driving in US$20,000 vehicles. A slew of Chinese firms are chasing the same technology, an industry push backed by China's government. BYD's assisted-driving hardware costs are far lower than Tesla's, according to analyses performed for Reuters by companies that dismantle and analyze vehicles for automakers. The comparisons, which have not been previously reported, show that BYD's costs to procure components and build a system with radar and lidar are about the same as Tesla's FSD, which doesn't have such sensors. That undercuts Tesla's unusual technological approach, which aims to save costs by nixing such sensors and relying solely on cameras and artificial intelligence (AI). The rising competition from Chinese smart-EV players is among the chief problems confronting Tesla CEO Elon Musk after his rocky tenure as a Trump administration advisor as he refocuses on his business empire – as Tesla vehicle sales are tanking globally. The stakes are made higher by a moment-of-truth challenge this month in Tesla's home base of Austin, Texas, where it plans to launch a robotaxi trial with 10 or 20 vehicles after a decade of Musk's unfulfilled promises to deliver self-driving Teslas. Tesla did not respond when reached for comment about its Chinese competitors. Previously, Musk has described Chinese car companies as the most competitive in the world. Chinese competition was one factor driving Tesla's strategic pivot away from mass-market EVs last year, when Reuters reported it had killed plans to build an all-new EV expected to cost US$25,000. Musk has since staked Tesla's future instead on self-driving robotaxis, the hopes for which now underpin the vast majority of the automaker's stock-market value of roughly US$1 trillion. Now Tesla faces the same stiff competition on vehicle autonomy from many of the same Chinese automakers who undercut its affordable-EV plans. Adding to the challenge are tech firms including Chinese smartphone giant Huawei, which supplies autonomous-driving technology to major Chinese automakers. Short of full autonomy, today's driver-assistance systems offer a critical competitive edge in China, the world's largest car market, where Tesla sales are falling amid a protracted price war among scores of homegrown EV brands. Tesla is further handicapped by China's regulations preventing it from using data collected by Tesla cars in China to train the AI underpinning FSD. Tesla has been negotiating with Chinese officials, so far without success, to get permission to transfer such data back to the US for analysis. Tesla's competitors in China do benefit from subsidies and other forms of policy support from Beijing for advanced assisted driving technology. Their advantages also stem from another consequential factor: cut-throat smart-EV competition that has characterised their industry over the past decade. The resulting EV boom created economies of scale and the industry's tendency to forgo some profit margins to expand new technologies' market penetration quickly, leading to lower manufacturing costs. Streets of Shenzhen BYD investor Ogan, of Shenzhen-based Snow Bull Capital, has a front-row seat to China's autonomous-tech battleground. He recently drove several BYD models equipped with God's Eye, he said, and didn't have to take over driving in any of them while traveling the congested streets of Shenzhen, a bustling southern China megalopolis of 18 million people. Another notable smart-EV player in China is Huawei, experts say. 'Huawei lends its technology and branding to a half dozen automakers including heavyweights Chery, SAIC and Changan, and has lower-profile partnerships with more than a dozen other carmakers,' Huawei representatives said. Reuters journalists rode in an Aito M9 – a luxury electric SUV from Seres with Huawei driver-assistance technology – as it navigated Shenzhen roadways in April. With a driver's hands off the wheel, the vehicle exited a highway seamlessly into a congested urban zone, where the M9 proceeded cautiously and slowed to a crawl as a construction worker appeared like he might walk into the roadway. At one point the vehicle turned right and slowly drifted left to avoid two men unloading boxes from a parked truck. The vehicle then parallel parked itself at Huawei's Shenzhen headquarters. Huawei was among several Chinese companies, including automakers Zeekr, Changan and Xpeng, that touted progress towards fully-autonomous cars at April's Shanghai auto show, even as Beijing announced a new marketing crackdown on terms such as 'smart' and 'intelligent' driving in the wake of a deadly crash in a Xiaomi vehicle involving driver-assistance technology. Huawei said it's ready to undergo a new validation regime being developed by Chinese regulators to certify so-called Level 3 driving systems, meaning they are capable enough to allow drivers to look away unless notified by the system to take over. Zeekr, a luxury brand of China auto giant Geely, also plans to soon sell cars with Level 3 systems. Tesla has yet to release such an 'unsupervised' version of FSD because its technology needs more training to operate without a driver's hands on the wheel and eyes on the road. Tesla plans to launch self-driving robotaxis in Austin this month. Little is known about its plans. The company has said it aims to initially deploy between 10 and 20 fare-collecting driverless robotaxis in restricted geographic areas of the city, which Tesla has not publicly identified. 'God's Eye' on the cheap Chinese EV makers are moving quickly to develop driver-assistance systems in a market where car-buyers are demanding them at a faster pace than in other regions, analysts say. Their ability to do so at lower costs poses the biggest threat to Tesla's new autonomy-based business model. BYD buyers can get an FSD-comparable version of God's Eye as a standard feature in cars priced at about US$30,000. The cheapest FSD-equipped Tesla in China is a Model 3 selling for about US$41,500. According to an analysis by A2MAC1, a Paris-based tear-down firm that benchmarks components, the mid-level God's Eye version most comparable to Tesla's FSD runs on an Nvidia computing chip with data collected through 12 cameras, five radars, 12 ultrasonic sensors, and one lidar sensor, at a cost of US$2,105. That compares to US$2,360 for Tesla's FSD, which uses cameras without sensors and two AI chips, the firm estimates. Cameras, radar and ultrasonic sensors are 40% cheaper in China than comparable devices in Europe and the US, A2MAC1 estimates. 'Lidar sensors cost about 20% less, the firm said. 'Sensor costs have fallen because China's EV boom created economies of scale,' said A2MAC1 engineer Elena Zhelondz. 'The fierce competition also pushed carmakers and suppliers to accept lower profits on driver-assistance equipment,' she said. 'BYD's 22% gross margin will likely fall as it gives away God's Eye but it will benefit from a vehicle-sales boost,' said Chris McNally, head of global automotive and mobility research for advisory firm Evercore. More cars, more miles, better AI Falling behind the Chinese brands on driver-assistance technology would compound Tesla's challenges in China, where it's already losing market share to rivals including BYD, which sells an entry-level EV for less than US$10,000. The growing scale of BYD and others could also provide a technological advantage, racking up more miles on China roads helps train the AI technology needed to perfect automated-driving systems. 'BYD has a 'clear and ongoing market-share driving advantage' over Tesla in gathering such on-road data to refine God's Eye,' Evercore's McNally said, adding that advantage might only increase as offering God's Eye for free helps sell more BYD vehicles. BYD's scale also helps lower costs by providing uncommon leverage over suppliers. In November, a BYD executive in charge of passenger-vehicle operations wrote to suppliers telling them that the automaker sold 4.2 million vehicles last year (more than double the number of Teslas sold) because of 'technical innovation, economies of scale, and a low-cost supply chain'. The executive noted the new year would likely bring more growth, but also fiercer competition. Without specifically mentioning God's Eye, he ended the letter by asking the suppliers for an across-the-board 10% price cut on all parts and systems starting on Jan 1, calling the new year a final 'knockout round'.
BBC News
3 days ago
- Automotive
- BBC News
China's electric cars are cheaper, but is there a deeper cost?
Theo will be responding to reader comments about this article between 12pm and 1pm today. Go to the comments section at the bottom of this page to share what you think about the rise of these more affordable EVs. In China, they call it the Seagull, and it has looks to match. It is sleek and angular, with bright, downward-slanting headlights that have more than a hint of mischievous eyes about is, of course, a car. A very small one, designed as a cheap city runabout – but it could have huge significance. Available in China since 2023, where it has proved extremely popular, it has just been launched in Europe with the name Dolphin Surf (because Europeans apparently aren't as keen on seagulls as Chinese people). When it goes on sale in the UK this week, it's expected to have a price tag of around £18,000. That will still make it, for an electric car on western markets, very cheap indeed. It won't be the outright lowest-priced model on offer: the Dacia Spring, manufactured in Wuhan jointly by Renault and Dongfeng, and the Leapmotor T03, which is being produced by a joint venture between Chinese startup Leapmotor and Stellantis, both cost the Dolphin Surf is the invasive species that has long-established brands most worried. That is because the company behind it has been making ever bigger waves on international markets. BYD is already the biggest player in China. It overtook Tesla in 2024 to become the world's best-selling maker of electric vehicles (EVs), and since entering the European markets two years ago, it has expanded aggressively."We want to be number one in the British market within 10 years," says Steve Beattie, sales and marketing director for BYD is part of a wider expansion of Chinese companies and brands that some believe could change the face of the global motor industry – and which has already prompted radical action from the US government and the means once-unknown marques like Nio, Xpeng, Zeekr or Omoda could become every bit as much household names as Ford or Volkswagen. They will join classic brands such as MG, Volvo and Lotus, which have been under Chinese ownership for products on offer already encompass a huge range, from runabouts like the tiny Dolphin Surf to exotic supercars, like the pothole-jumping U9, from BYD's high-end sub-brand Yangwang."Chinese brands are making massive inroads into the European market," says David Bailey, professor of business and economics at Birmingham Business 2024, 17 million battery and plug-in hybrid cars were sold worldwide, 11 million of those in China. Chinese brands, meanwhile, had 10% of global EV and plug-in hybrid sales outside their home country, according to the consultancy Rho Motion. That figure is only expected to grow. For consumers, it should be good news – leading to more high-quality and affordable electric cars becoming available. But with rivalry between Beijing and western powers showing no sign of subsiding, some experts are concerned Chinese vehicles could represent a security risk from hackers and third parties. And for established players in Europe, it represents a formidable challenge to their historic dominance. "[China has] a huge cost advantage through economies of scale and battery technology. European manufacturers have fallen well behind," warns Mr Bailey. "Unless they wake up very quickly and catch up, they could be wiped out." Cut-throat competition in China China's car industry has been developing rapidly since the country joined the World Trade Organisation in 2001. But that process accelerated rapidly in 2015, when the Communist Party introduced its "Made in China 2025" initiative. The 10-year plan to make the country a leader in several high-tech industries, including EVs, attracted intense criticism from abroad, and particularly the US, amid claims of forced technology transfers and theft of intellectual property – all of which the Chinese government by lavish state funding, the plan helped lay the groundwork for the breakneck growth of companies like BYD – originally a maker of batteries for mobile phones – and allowed the Chinese parent companies of MG and Volvo, SAIC and Geely, to become major players in the EV market."The general standard of Chinese cars is very, very high indeed," says Dan Caesar, chief executive of Electric Vehicles UK. "China has learned extremely quickly how to manufacture cars." Yet competition in China has become ever more cut-throat, with brands jostling for space in an increasingly saturated market. This has led them to hunt for sales Chinese firms have expanded into East Asia and South America, for years the European market proved a tough nut to crack – that is, until governments here decided to phase out the sale of new petrol and diesel transition to electric cars opened the door to new players."[Chinese brands] have seen an opportunity to get a bit of a foothold," says Oliver Lowe, UK product manager of Omoda and Jaecoo, two sub brands of the Chinese giant Chery. Low labour costs in China, coupled with government subsidies and a very well-established supply chain, have given Chinese firms advantages, their rivals have claimed. A report from the Swiss bank UBS, published in late 2023, suggested that BYD alone was able to build cars 25% more cheaply than western firms deny the playing field is uneven. Xpeng's vice chairman Brian Gu told the BBC at the Paris Motor Show in 2024 that his company is competitive "because we have fought tooth and nail through the most competitive market in the world". 'Naked protectionism' from the US? Concerns that Chinese EV imports could flood international markets at the expense of established manufacturers reached fever pitch in the US, the Alliance for American Manufacturing warned they could prove to be an "extinction-level event" for the US industry, while the European Commission president Ursula von der Leyen suggested that "huge state subsidies" for Chinese firms were distorting the European Biden administration took dramatic action, raising import tariffs on Chinese-made EVs from 25% to 100%, effectively making it pointless to sell them in the was condemned by Beijing as "naked protectionism". Meanwhile, in October 2024, the EU imposed extra tariffs of up to 35.3% on Chinese-made EVs. The UK, however, took no Schmidt, founder of Schmidt Automotive Research, says the EU's tariffs have now made it harder for Chinese firms to gain market share."The door was wide open in 2024... but the Chinese failed to take their chance. With the tariffs in place, Chinese manufacturers are now unable to push their cost advantage onto European consumers." Renault's ultra-modern EV hub European manufacturers have been racing to develop their own affordable electric cars. French car-maker Renault is among its factory in Douai, in northeastern France, an army of spark-spitting robots weld sections of steel to form car bodies, while on the main assembly line, automated systems mate together bodyshells, doors, batteries, motors and other parts, before human workers apply the finishing factory has been making cars for Renault since 1974, but four years ago, the ageing production lines were replaced with new highly automated, digitally-controlled of the site was also taken over by the Chinese-owned battery firm AESC, which built its own "gigafactory" next door. It's part of Renault's wider plan to set up an ultra-modern EV "hub" in northern France. Mirroring the lean production techniques of Chinese manufacturers, the hub cuts costs by maximising efficiency and ensuring that suppliers are located as close as possible."Our target was to be able to produce affordable electric cars here to sell in Europe," explains Pierre Andrieux, director of the Douai plant, arguing that automated processes "will enable us to do that profitably".But the company is also exploiting something the Chinese brands do not have: heritage. Its latest model, the Renault 5 E-tech, built in Douai, borrows its name from one of the company's most famous products. The original Renault 5, launched in 1972, was a quirky little everyman car with boxy looks and low running costs that became a cult new design, despite being a state-of-the art EV, pays homage to its predecessor in name and appearance, in an effort to emulate its popular appeal. Security, spyware and hacking concerns But irrespective of how desirable Chinese cars are in comparison with European rivals, some experts believe we should be wary of them – for security modern vehicles are internet-enabled in some way – to allow satellite navigation, for example – and drivers' phones are often connected to car systems. Pioneered by Tesla, so-called "over-the-air updates" can upgrade a car's software has all led to concerns, in some quarters, that cars could be hacked and used to harbour spyware, monitor individuals or even be immobilised at the touch of a keyboard. Earlier this year, a British newspaper reported that military and intelligence chiefs had been ordered not to discuss official business while riding in EVs; it was also alleged that cars with Chinese components had been banned from sensitive military in May, a former head of the intelligence service MI6 claimed that Chinese-made technology in a range of products, including cars, could be controlled and programmed remotely. Sir Richard Dearlove warned MPs that there was the potential to "immobilise London".Beijing has always denied all accusations of espionage.A spokesperson for the Chinese embassy in London says that the recent allegations are "entirely unfounded and absurd"."China has consistently advocated the secure, open, and rules-based development of global supply chains," the spokesperson told the BBC. "Chinese enterprises operating around the world are required to comply with local laws and regulations. "To date, there is no credible evidence to support the claim that Chinese EVs pose a security threat to the UK or any other country." Chinese government is 'not hell-bent on surveillance' Joseph Jarnecki, research fellow at defence and security think-tank The Royal United Services Institute, argues that potential risks can be mitigated."Chinese carmakers exist in this highly competitive market. While they're beholden to Chinese law and that may require compliance with national security agencies, none of them want to damage their ability to grow and to have international exports by being perceived as a security risk," he says."The Chinese government equally is conscious of the need for economic growth. They're not hell-bent on solely conducting surveillance." But the car industry is just one area in which Chinese technology is becoming increasingly enmeshed in the UK economy. To achieve the government's climate objectives, for instance, "It will be necessary to use Chinese-supplied technology", adds Mr believes that regulators of key industries should be given sufficient resources to monitor cyber security and advise companies using Chinese products of any potential for electric cars powered by Chinese technology, there's no question that they're here to stay."Even if you have a car that's made in Germany or elsewhere, it probably contains quite a few Chinese components," says Dan Caesar."The reality is most of us have smartphones and things from China, from the US, from Korea, without really giving it a second thought. So I do think there's some fearmongering going on about what the Chinese are capable of."I think we have to face the reality that China is going to be a big part of the future."Top image credit: Reuters BBC InDepth is the new home on the website and app for the best analysis and expertise from our top journalists. Under a distinctive new brand, we'll bring you fresh perspectives that challenge assumptions, and deep reporting on the biggest issues to help you make sense of a complex world. And we'll be showcasing thought-provoking content from across BBC Sounds and iPlayer too. We're starting small but thinking big, and we want to know what you think - you can send us your feedback by clicking on the button below.
Auto Blog
3 days ago
- Automotive
- Auto Blog
Here's What Lucid's Future Models Will Be Called
Trademarks Hint At Affordable EVs to Rival Tesla Several new trademarks have revealed the possible names for Lucid's next models, as the company looks to expand its lineup beyond the full-size Air sedan and Gravity three-row SUV. Considering Lucid already occupies these segments, these future models should hopefully be more affordable, giving the brand higher-volume alternatives to the Tesla Model 3 and Tesla Model Y. The brand has, after all, already teased a midsize SUV and confirmed a Model Y competitor. Here's a look at all the latest Lucid trademarks. Source: Lucid Lucid Earth Dream Edition The Lucid Earth trademark already popped up a few weeks ago, and it has since been confirmed that this will be a new smaller EV. It's set to go into production in 2026, when it should compete head-on with the Tesla Model Y. The newest trademark is for an Earth Dream Edition, filed with the European Union Intellectual Property Office, adding further confirmation that this is a new Lucid production model. The brand's Dream Edition EVs are typically sold for a limited time after a new car is launched. They offer the best outputs and features, and also carry the highest prices. A price of under $50,000 and a class-leading range are expected for this model, but the Dream Edition could cost more than this. Lucid Ocean Another trademark, this time filed with the Government of Canada, is for the Lucid Ocean. If that name sounds familiar, you may be thinking of the Fisker Ocean SUV. However, Fisker's recent bankruptcy presumably means that the 'Ocean' name is back up for grabs, and since it fits in thematically with other Lucid model names, it's a logical choice. It's not known what vehicle the Ocean name could apply to, but a smaller sedan to slot in below the Air sounds like a logical move. It would give the brand a true BMW i5 and Mercedes-Benz EQE rival, leaving the Air to do battle with the i7 and EQS. Lucid Air Pure — Source: Lucid Autoblog Newsletter Autoblog brings you car news; expert reviews and exciting pictures and video. Research and compare vehicles, too. Sign up or sign in with Google Facebook Microsoft Apple By signing up I agree to the Terms of Use and acknowledge that I have read the Privacy Policy . You may unsubscribe from email communication at anytime. Lucid Space The last time 'Lucid Space' was mentioned, it was by former Lucid CEO, Peter Rawlinson. However, he was specifically referring to the Lucid Space Concept, which doesn't refer to a particular model, but references one of the brand's philosophies. Rawlinson was explaining how Lucid cars free up an amount of interior space beyond the physical footprint of a given vehicle. Once again, though, 'Space' fits in well with other Lucid names like Gravity and Air, referencing the elements and/or the natural environment. Last year, Lucid ruled out a station wagon, but was open to the idea of a more rugged vehicle. Given the brand's luxury focus, a classy coupe doesn't seem out of the question, but electric coupes are exceedingly rare. The word 'Space' sounds applicable to something larger, but the Air and Gravity are already full-size models, so it's anyone's guess what this model could be. Source: Lucid Final Thoughts While Lucid has not yet come close to toppling Tesla, it's doing what a lot of other EV startups couldn't: surviving. And, with only two high-end models on sale presently, the potential for growth is enormous if the brand launches two or more models that are more accessible. The Earth is the only one that looks like a guarantee, but we can't wait to see the possibilities of the Ocean and Space nameplates. About the Author Karl Furlong View Profile
