The rise of inexpensive Chinese electric vehicles has upped the pressure on legacy automakers who have turned to suppliers, from battery materials makers to chipmakers, to squeeze out costs and develop affordable EVs quicker than previously planned.
If you see that European car makers sell the same car in China for less than half than they charge at home, you know they are basically milking us just for extra profit.
Not true. Most products aren’t the cost of the materials. There are a lot of included expenses in the price of a product like the cost of labor. They’re also not the same cars.
I am well aware that there are costs beside materials and labor. In my company, I’m part of those other costs - I’m R&D. The point is still: Why shall we bear all those costs and others don’t? Don’t expect people being happy about being handled gross unfair.
They’re also not the same cars.
Yes, there are differences. But they are small, and could be incorporated in a low-cost version of European cars, too - if they actually want a low cost version here.
Why shall we bear all those costs and others don’t
That sounds like standard supply demand. If you can bear it, and there is no alternative, you will. But moreover as was mentioned there are reasons that may require a product being different prices in different markets as operating expenses are not the same. The simple cost of launching a product in different markets incurs different costs, and thus different prices. That’s a trivial example, and with vehicles it gets really complex at the regulatory level.
If you can bear it, and there is no alternative, you will.
And that is the point that will break the European car makers necks. The Chinese just start being alternatives, just like Japanese cars were in the 80s and 90s.
To give it credit, Japanese cars are now among the best in class, and can be enjoyed on a global market at a “reasonable” price. Took them a few decades to get there though. When/if Chinese manufacturers get to that level - that would be a win for the common consumer anywhere. And European companies with their trend to sell less, but more expensive, cars, will likely be outcompeted.
Except it’s rarely the “same car”. For example a Tesla Model 3 manufactured in China has an LFP lithium-ion battery, while the US manufactured ones use an NCA lithium-ion battery. It’s by far the most expensive component of the car and LFP batteries are much cheaper.
There are often other differences too - such as optional extras being standard in one market. And warranties vary (those are not free - it costs money to fix faulty cars and they factor it into the sale price).
actually they’ve been selling the LFP version in North America for a while now. Even with the extra import costs and reduced government grant due to a Chinese battery, it still ends up cheaper.
If you see that European car makers sell the same car in China for less than half than they charge at home, you know they are basically milking us just for extra profit.
Not true. Most products aren’t the cost of the materials. There are a lot of included expenses in the price of a product like the cost of labor. They’re also not the same cars.
I am well aware that there are costs beside materials and labor. In my company, I’m part of those other costs - I’m R&D. The point is still: Why shall we bear all those costs and others don’t? Don’t expect people being happy about being handled gross unfair.
Yes, there are differences. But they are small, and could be incorporated in a low-cost version of European cars, too - if they actually want a low cost version here.
That sounds like standard supply demand. If you can bear it, and there is no alternative, you will. But moreover as was mentioned there are reasons that may require a product being different prices in different markets as operating expenses are not the same. The simple cost of launching a product in different markets incurs different costs, and thus different prices. That’s a trivial example, and with vehicles it gets really complex at the regulatory level.
And that is the point that will break the European car makers necks. The Chinese just start being alternatives, just like Japanese cars were in the 80s and 90s.
To give it credit, Japanese cars are now among the best in class, and can be enjoyed on a global market at a “reasonable” price. Took them a few decades to get there though. When/if Chinese manufacturers get to that level - that would be a win for the common consumer anywhere. And European companies with their trend to sell less, but more expensive, cars, will likely be outcompeted.
Except it’s rarely the “same car”. For example a Tesla Model 3 manufactured in China has an LFP lithium-ion battery, while the US manufactured ones use an NCA lithium-ion battery. It’s by far the most expensive component of the car and LFP batteries are much cheaper.
There are often other differences too - such as optional extras being standard in one market. And warranties vary (those are not free - it costs money to fix faulty cars and they factor it into the sale price).
actually they’ve been selling the LFP version in North America for a while now. Even with the extra import costs and reduced government grant due to a Chinese battery, it still ends up cheaper.
Sounds like what I’d like is whatever options or differences that make the car half as cheap.
But with the American version you can have a janky mounted door and someone that forgets to install the brake disks
I think their implication is that whenever they’re selling in China is kind of trash, and you wouldn’t think it’s a good deal if you looked closely.
Furthermore regulations would prohibit said trash from being available in certain areas.
Not true… The lower trims so in fact use LFP