China Has Whole Towns Focused on Making Electric Cars

https://www.bloomberg.com/news/articles/2019-06-02/china-s-spending-30-billion-to-assemble-its-electric-detroits

by pseudolus • 7 years ago

127 144 7 years ago

NTDF9• 7 years ago

Meanwhile in the US, coal is supposed to be making a comeback, Tesla is close to bankruptcy, solar industry is decimated and we're force-sending smart people out of the country when we need them the most to build stuff like this.

DennisP2• 7 years ago

Actually Tesla is not close to bankruptcy.

https://cleantechnica.com/2019/05/31/the-media-is-telling-on...

kissickas• 7 years ago

As a Tesla shareholder, the problem is, I trust some of "the media." I don't trust cleantechnica. I have read far too many Seeking Alpha articles to even pretend like I am able to parse out these numbers on my own. What am I to do?

douglaswlance• 7 years ago

If you only read click-bait articles, then that worldview would hold.

But if you read industry journals and look at the data, you'd see that the complete opposite is true.

loudmax• 7 years ago

The executive branch of the federal government is absolutely committed to "clean" coal, the solar industry has plateaued, and immigration is down. Tesla is struggling, but I agree that "close to bankruptcy" is hyperbole.

The GP makes a legitimate point that China's progressive policies are helping to propel the country forward. In the US, progress toward the industries of the future is happening despite government policies, not because of them.

mncolinlee• 7 years ago

No amount of Trump insisting on saving coal will save it at this point. We've hit an inflection point where wind and solar are getting to be cheaper and it's less risk to place a turbine or panel. Barring new coal subsidies or taxes on renewables, coal won't grow in the US.

Tesla isn't having a great look on Wall Street, but that's because investors priced them as a tech company instead of a car manufacturer. They're having demand issues, but they'll adjust and markets will adjust the way they price Tesla shares. They still had no trouble raising funds despite serious new direct competition.

Solar is making huge international wins from cheaper, non-domestic manufacturers, including a few of the first massive installations to come in cheaper than coal.

Immigration is a real issue, of course, but a lot of companies have adjusted by opening R&D offices in Vancouver to be close to the border and the time zone of US tech offices.

StreamBright5• 7 years ago

If you are comparing solar and wind to coal you are missing the point by 10.000 miles. Coal is base load energy, wind and solar is for peak. You cannot control when the wind blows and over night there is no solar energy. You cannot store a large amount of energy (at least without massive destruction of land). Combining these, you need base load power plants, options: coal, nuclear. In some countries water could be a small fraction of the base load (I think Austria does that). If you have enough wind and solar you can use them to help out with peak but the same amount of fossil peak load has to be in your system as much as wind you got because something has to counter balance the fluctuation wind means. Options for peak load: wind, solar, oil or gas turbines.

https://en.wikipedia.org/wiki/Base_load

https://en.wikipedia.org/wiki/Peak_demand

onepointsixC• 7 years ago

You're right that coal can't be saved, but not because of wind. Natural gas is dirt cheap and can be a reliable base load while being even more flexible with fast startup and shutdown times.

floatrock• 7 years ago

Last year more than 50% of new US generation capacity that came online was renewable. In Q1 of this year it went up to 60% -- https://www.solarpowerworldonline.com/2019/05/renewables-acc.... The current administration is beholden to large coal donors, yes, but all that campaign money is just the final desperate hail-mary of the coal barons.

The beancounters who make the decisions see that renewables are now the cheaper option.

We've even seen cases where plans for cheap gas peaker plants have been scrapped because doing it with batteries is cheaper.

magduf3• 7 years ago

we're force-sending smart people out of the country when we need them the most to build stuff like this.

What are you referring to here?

melling• 7 years ago

More global R&D is a great thing!

Hopefully, India soon joins in. Their economy is starting to grow like China’s. Between the two, that’s 1/3 of the world’s population.

panpanna5• 7 years ago

Tata is already fairly big, you just don't see their cars here.

chrisjc• 7 years ago

Where is here? I assume you mean either China or USA?

Anyways, Land Rover and Jaguar are Tata brands and present in both the above.

matthewdgreen3• 7 years ago

It's amazing watching the Chinese Communist Party systematically target, succeed in, and gain dominance in these industries -- industries that any idiot can see are going to be critical to the global economy within a couple of decades max. Meanwhile trillions of investment dollars available in the US are busy chasing Juiceros.

bluGill3• 7 years ago

That is also the problem with Command economies: they do really well with some things the central planners see as useful, but miss tons of little things that are important but the central planners don't have time to think about. Juiceros is in fact an upside of not having a central plan: we are willing to try things of questionable benefit to see if they are really good even though they look stupid.

rb808• 7 years ago

Agreed - also the central planners products aren't that great, I'd dispute that China dominates anything except manufacturing. Juiceros are made in China and there are very few Chinese cars exported.

chvid2• 7 years ago

If you go back in the history of major car companies you will see plenty of government intervention. For China this is a part of a broader strategy to become less dependent on (imported) fossil fuels.

sfifs• 7 years ago

What makes you think China is a "Command" economy? USSR was a command economy. In China the Government funnels money into areas that are its priority but much of the economy runs on private innovation & fairly intense competition, especially the tech and software economy.

ptah• 7 years ago

five year plan works better than a quarterly plan for some cases

dmix3• 7 years ago

The US does all the innovation and R&D then China's manufacturing juggernauts do the building.

This is an old pattern that's just getting more efficient and China's able to sell to it's own markets. Freeing up more human and financial capital for China to do their own R&D/entrepreneurship.

StreamBright5• 7 years ago

China does R&D nowadays too.

https://www.theguardian.com/business/economics-blog/2014/nov...

jbay8083• 7 years ago

How do people expect to maintain an advantage in design and engineering when they have outsourced production? Where are the younger generations going to learn the things they don't teach you in university? Isn't it a huge advantage for a designer when you are the one getting your prototypes from the factory down the street?

sametmax4• 7 years ago

It helps to be a dictatorship that can force anybody to do what they want, and send to camp people that don't. It also helps to have millions of cheap workers, and a gigantic, rich, soil. And it's easier if you not care about destroying everything in your way.

Still.

It's impressive for exactly the same reasons. It's hard to foster an intellectual elite in a dictatorship, to maintain motivation and cooperation across a gigantic country and 1.7B of people.

Beside, we did the same: polluting, forcing population to work, etc, only 100 years before, but we attacked other countries while doing so. Which China haven't. And about this pollution thing, they seem to correct trajectory faster than we did, given their timeframe and inertia.

It's amazing to watch.

Cthulhu_2• 7 years ago

It helps to be a dictatorship that can force anybody to do what they want, and send to camp people that don't. It also helps to have millions of cheap workers, and a gigantic, rich, soil. And it's easier if you not care about destroying everything in your way.

Is this about China or the US? I mean it's got prison / slave labor, cheap workers (minimum wage, what's that?), huge lands, etc. Don't think the US moved away from those practices a hundred years ago, they're still doing it, they're just calling it differently and it's coming from financial interests now instead of political ones (e.g. private prisons that make sure to keep their cells (over) full and their cheap labor supply up)

_iyig2• 7 years ago

It's hard to foster an intellectual elite in a dictatorship

Have we forgotten about Nazi technical excellence, Werner von Braun, and the Soviet space program?

It’s easy to pour money into STEM fields. If you only crack down on ethnic minorities and outspoken dissenters, and if you censor uncomfortable news about these crackdowns, the majority of your engineers and scientists won’t care enough to DO anything. This approach worked for the Nazis and, to a lesser degree, the Soviets. It is working very well in China.

Bakary3• 7 years ago

It's impressive for exactly the same reasons. It's hard to foster an intellectual elite in a dictatorship, to maintain motivation and cooperation across a gigantic country and 1.7B of people.

On the contrary you could argue that the brutal competition in the country encourages people to be razor sharp in some fields.

A more controversial and touchy point is that they have a strong sense of national and ethnic unity, which many democracies lack. This has many disadvantages of course,[0] but can be extremely helpful for maintaining cooperation and motivation at a large scale whereas the West arguably has trouble dealing with ennui and lack of purpose. To some extent the form of functional ethno-nationalism China has is hard to reproduce elsewhere, and is the result of very specific historical and geographical factors. Japan and Turkey for instance have similar traits but nowhere near the same results. So China is tautologically highly suited to doing what it is currently doing.

[0] https://www.economist.com/briefing/2016/11/19/the-upper-han

matthewdgreen3• 7 years ago

I'm not convinced you have to be a brutal dictatorship in order to support significant government investment in key industries. You just need a lot of money and a political willingness to spend it.

StreamBright5• 7 years ago

Europe is not much better. Key industries (for example Volvo) are sold to Chinese and lots of fake Chinese products are flooding the European markets (for example jams, honey). It would be trivial to fix these if the EU cared. They are busy chasing brexit and other very important things.

raxxorrax4• 7 years ago

internet surveillance is one of their favorite things. After the critical success of article 13, they now plan to give foreign government agencies access to domestic corporate data.

At this rate, we will arrive at a point were Brexiteers were correct on most important developments.

raxxorrax4• 7 years ago

Just bad for the whole city if the strategy fails. And there is a single point of failure.

What if someone acknowledges that battery powered cars cannot reach the utility of fossil cars or trucks even? What if somebody invents a safe hydrogen cell?

jbay8083• 7 years ago

Is there something wrong with betting based on a calculated risk?

VCs do it all the time, why can't a government do it?

nathan_long• 7 years ago

A dictatorship is just more extreme than a democracy because the whole society moves in sync by necessity - they do or die. Whether it's a smart industrial move or a dumb one, a benevolent program or a genocidal one, if the leaders call for it, it gets done.

No single decision should be taken as proof that dictatorship is good.

Cthulhu_2• 7 years ago

Oh but the US has been doing the same, just in the military branch instead of technology. They also bailed out the car industry after the 2008 crisis.

adventured• 7 years ago

Meanwhile trillions of investment dollars available in the US are busy chasing Juiceros.

Amusing attempt. For one example, Silicon Valley is embarrassing most of the rest of the world when it comes to artificial intelligence and autonomous tech. China is at least five years behind on autonomous, by their own admission - which is why all of their tech giants had to set up shop in SV to work on autonomous.

"The talent needed to give Chinese startups an edge in autonomous vehicles can’t be found in Beijing or Shanghai."

https://www.bloomberg.com/news/articles/2018-09-24/to-find-c...

https://www.reuters.com/article/us-tencent-holdings-autonomo...

natechols• 7 years ago

Juicero went out of business quickly. The same tends not to happen to "strategic" state-owned enterprises that don't pull their weight.

ssnistfajen• 7 years ago

Planned economy works until they don't. For one it can only react to trends after they emerge by playing catch-up, instead of birthing run-away successes out of nowhere. I am against a completely unregulated free market in principle but that doesn't mean having to follow state-directed planning to the exact step.

matthewdgreen3• 7 years ago

It's hard to look at the US's current minimal investment in renewable technologies as a rational response to current trends. It's obvious to anyone who pays attention to the science that electric transportation and renewables is going to be a huge business in the future. If our markets don't plan on a large enough time horizon, that's a huge disadvantage for our system.

rasz• 7 years ago

"National IC Investment Fund (called the "Big Fund") will mainly focus on three key sectors in the coming years, including memory, SiC/GaN compound semiconductor, and IC design with its application in IoT, 5G, AI, smart vehicles, etc."

~$75 billion by 2017

https://press.trendforce.com/node/view/3025.html

mrbanks• 7 years ago

Good

emoticoji• 7 years ago

Hopefully we won't see any tariffs on them in US/Europe. Or am I too late with this hope?

molteanu5• 7 years ago

Depends if they're successful. Or are you making any hopes that Dr. Z [1] will stand by and watch his empire crumble?

I'm betting that if the China auto industry will be successful, just like Huawei is, we're gonna see some tariffs and "human rights" accusations and all sorts of dirty politics.

[1] https://en.wikipedia.org/wiki/Dieter_Zetsche

majia• 7 years ago

The US exports Freedom Gas while China makes Oppression Cars and Phones.

GeekyBear• 7 years ago

It might interest you to know the sort of restrictions China has been placing on Tesla.

[Musk] said China puts a 25 percent import duty on American cars, while the U.S. only does 2.5 percent for Chinese cars. He added that no American car company is "allowed to own even 50% of their own factory" in the Asian country, but China's auto firms can own their companies in the U.S.

https://www.cnbc.com/2018/03/08/elon-musk-sides-with-trump-o...

panpanna5• 7 years ago

Well, how much does US tax european cars?

Agree about the 49% thing, and it's not limited to car factories.

hangonhn5• 7 years ago

It's not just car companies but foreigners cannot own the majority of ANY company. I can understand why China did this because they don't want to end up like many of the developing countries where most of the economic engines of their country are owned by foreigners. You see this happening in the "banana republics" of the world. It also has the benefit of implicitly forcing technological transfer when it is coupled with high tariffs on imports. Foreign companies end up "partnering" with locals to avoid the tariffs but the joint company is ultimately Chinese majority owned. It's hard to argue that these policies have not benefited the Chinese or at least prevent some of the downsides of economic liberalization and "free" trade.

With all that in mind, however, other countries would be fools to allow this sort of economic asymmetry to continue. Especially at this point, when China is the second largest economy (and largest when adjusted by PPP), China doesn't need this kind of protection and is simply not playing fair. I don't know if tariffs are the best way of leveling the playing field but some sort of rebalancing and leveling of the playing field must happen because otherwise it is simply a rigged game.

There is even a very good argument that can be made that direct, unfettered foreign investment now would benefit China given its large consumer base with money to spend. Otherwise, the Chinese consumer is simply indirectly subsidizing Chinese corporations who made not have to compete as hard because of these protections.

seanmcdirmid7• 7 years ago

You mean going into China or coming from China? Tesla’s are heavily tariffed in China already, so too late for the former.

molteanu5• 7 years ago

This, together with this comment [..] especially in the German speaking part of Europe, are still run like factories, barely have flexible working hours and don't even want to hear about remote work as managers prefer having a close eye on employees at all time. from a previous HN discussion [1], has made me wonder if there is any Chinese market for remote SW developers from the other parts of the world.

It seems like the Chinese run at the speed of light these days while I'm still left to do Jira's and time sheets and bug hunting and colleagues that are really not that interested in anything software related at the same old 9-5 job.

Is China a viable alternative? Do you have any experience working with Chinese companies, startups, sw shops, etc?

[1] https://news.ycombinator.com/item?id=20082232

marsRoverDev• 7 years ago

https://github.com/996icu/996.ICU

9am-9pm, 6 days a week for $41k a year.

molteanu5• 7 years ago

The infamous 996 that has even the Chinese authorities worried [1]. Yeah, forgot about that. Thanks for the reminder.

[1] https://www.scmp.com/tech/start-ups/article/3005947/quantity...

lvturner• 7 years ago

Haven't worked for Chinese owned ones per say, but have worked in China, I would say it's very viable. Singapore, Hong Kong and Taiwan are also worth looking at - though the cost of living in HK is astronomical.

molteanu5• 7 years ago

I'm not considering a move to China or those parts of the world. But since they're moving at such high speeds, I'm betting their workforce needs are quite high, so "every help we can get" should be a good motto.

seanmcdirmid7• 7 years ago

HK and Taiwan don’t pay their devs very well (they value other things, not software). If you are American, Singapore might be difficult also unless you have a good tax accountant. China on balance provides the best deal in Asia for programmers.

Bakary3• 7 years ago

After having lived in various places in China I would say that the most important criteria to consider is whether you'd actually enjoy living there.

stickfigure• 7 years ago

It seems like the Chinese run at the speed of light these days

What native Chinese-built software products have done well outside of China?

londons_explore• 7 years ago

Tiktok

NikolaeVarius• 7 years ago

https://www.nytimes.com/2019/04/24/technology/ecuador-survei...

seanmcdirmid7• 7 years ago

You might be disappointed with Chinese companies who still make their devs clock in and out the old fashioned way.

Sounds like your job just sucks, you could find a better one in the states, China is always an option also but try foreign companies there first for a better work life balance.

gpetukhov• 7 years ago

I am a software dev in Bytedance (company that created Tiktok) in Shenzhen. In general I like it here. The company is listening to feedback, coworkers are very friendly, and the work is challenging with good pay, I am definitely learning a lot here. Having said that, the workload is quite heavy - we have to work every other Sunday (Saturdays always off). If you are interested in a referral drop me an email at georgy [at] bytedance(dot)com. We have devs in the US as well.

chillacy2• 7 years ago

What’s compensation like? Competitive with US companies? Equity awards?

olivermarks• 7 years ago

The more important Bloomberg link is about the EV bubble https://www.bloomberg.com/news/articles/2019-04-14/the-18-bi...

hi5eyes• 7 years ago

what's not a bubble these days?

0xffff2• 7 years ago

As the saying goes, economists have predicted 7 of the last 3 recessions. Same applies to bubbles I think.

Shivetya• 7 years ago

I would be more concerned with a softness in the market outside of China. While we are still a few years away from a better selection EVs it does not mean they will spur higher sales. Tesla sells by reputation alone but other than them only Chinese brands have any good volume.

The market may constrain them to 200+ EPA ratings which will keep the price high. What we have not seen in the US is a mid 100 mile range car (130-160 or such) at a much lower price. I would be curious if such a car in the low 20k starting range would work?

AstralStorm7• 7 years ago

Tesla does not have a good volume, even compared to something like Nissan Leaf, much less hybrids.

dhruvrrp• 7 years ago

I remember reading a few months (?) ago that China was looking to consolidate the electric vehicle industry because the government incentives led to 500+ manufacturers who like to "move-fast and break things" and caused problems like vehicle fires.

imo that would mean a lot of these towns wouldn't be in business for very long.

Edit: found the discussion https://news.ycombinator.com/item?id=19617681

panpanna5• 7 years ago

Yeah, but if only 1% of those 500 survive and if 10% of those 500 companies ever came up with a good idea or design, China is set for world domination.

(Tesla was on front page the other day for burning cars, so move fast and break things is a thing here too)

moduspol• 7 years ago

Fortunately our legacy automakers have solved that problem. I haven't seen a story on HN about any of them catching on fire.

https://www.nfpa.org/News-and-Research/Data-research-and-too...

seanmcdirmid7• 7 years ago

There was also lots of subsidy fraud, where low value manufacturers would crank out what we’re basically golf carts and then indirectly collect part of the subsidy via a process similar to money laundering.

baybal2• 7 years ago

I do remember years of "the solar boom," when just having word solar in company name enough to secure an effectively unconditional $3m grant.

China Has Whole Towns Focused on Making Electric Cars

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