World Economic Forum’s Post

I believe this trend will extend beyond the auto sector and isn't just about China — other countries are poised to excel in the coming years. The key for developed countries to remain competitive is enhanced innovation and productivity but reduced price. For example, Tesla has utilized robotics to cut manufacturing costs significantly; however, it maintains high product prices, just like many American companies such as Apple. The larger issue is that bans tend to be implemented instead of prioritizing efficient production. However, bans are temporary solutions that don't tackle the underlying challenges. Countries should directly address the root causes by enhancing productivity, fostering innovation, and reducing costs.

A really important aspect of exponential growth in the energy transition is that things can look really small and then get really big, quickly. Here’s a frightening example.

China is dominating Japan in the electric vehicle (EV) market, prompting two major Japanese automakers to collaborate in order to prevent being overshadowed Read More:- https://lnkd.in/g8Mfb7hf #thebusinessoutlook #electricvehicles #market #china #automakers #japanese #collaborate

We know Chinese EV makers' arrival in Europe poses a threat to legacy automakers - but how much of a threat, and how fast will it come? The share of Chinese brand cars among new EV sales in Europe is rising, but not as fast as some analysts anticipated. Stereotypes of Chinese manufacturing, import costs, and a less developed EV market than they benefit from in China are just some of the issues brands such as BYD, Nio, and SAIC's MG will have to overcome to thrive in Europe. Shipping cars from China saves money on production costs but means getting vehicles through saturated ports with long lead times. Brand recognition is low, with just 14% of 1,629 German consumers surveyed by YouGov in 2022 aware of BYD, 17% of Nio, 10% of Lynk & Co and 8% of XPeng. More in our story below: https://lnkd.in/eHN2F_hw

They Just Keep Getting Cheaper Control of the entire supply chain (except for windows and tyres) including factories round the globe and RORO delivery ship(s) allows BYD, the world’s largest EV maker, to startle the planet with impossibly cheap electric vehicles. Impossibly cheap. Amazingly cheap. Below the cost of Western manufacture cheap. Why? To dominate the market, to eliminate competitors, to reign supreme. Not just a price war, an economic war against Western manufacture and a challenge the First World will need to rise to. As we rose to the challenge of Japan and Korea building cars so will we rise to the ascendancy of China. Killing us with kindness, but killing us nonetheless. Honda and Nissan have fired the first retort announcing they’ll join forces. Western OEM’s will need to massively restructure to catch up. Too late for some but a worthy challenge which will require government subsidies to compete.

Real prices for motor vehicles in China have been falling this past 12 months. Aside from falling food prices, this is one of the other major components of observed deflation. The reason isn’t a lack of demand. That’s the mainstream throwaway trope that’s not backed by evidence. In the case of new energy vehicles it’s due to intense end-product price competition, backed in part by productivity via automation. Price competition is intense, as indicated in the article below. As prices fell, China’s domestic market absorbed even more NEVs.

The EV market is facing a tense moment with China right now with no clear solution in sight. The current administration has implemented sweeping vehicle emissions standards. But the current price point of EVs in the US makes them inaccessible to many buyers and opens up the possibility of importing more, lower-priced EVs from China, which is now the world’s largest EV market. China accounts for 60% of global electric car sales. But part of the administration’s goals is to reduce reliance on Chinese EVs and EV parts. But, here, the average EV is priced at $55,000. Chinese brands like BYD, Xpeng Motors and Li Auto offer many more budget-friendly options. Ilaria Mazzocco, a senior fellow at the Center for Strategic and International Studies, called it a “very tricky situation for policymakers.” How do you think the administration and EV industry will be able to navigate this? #EVs #EVmarket #EVschina #ChinaEVs https://lnkd.in/ehUzJMBr