The electric shock behind Europe's stuttering EV future

https://news.sky.com/story/the-electric-shock-behind-europes-stuttering-ev-future-and-how-china-has-leapfrogged-major-car-exporting-nations-13267440

by xbmcuser • 2 years ago

58 65 2 years ago

news.sky.com

klooney2• 2 years ago

The skills built up by European carmakers over decades are simply not directly transferrable.

Germany does have a giant, excellent chemistry industry.

China's interest in batteries is not a recent trend. It has been investing in their production for many, many years. It has been attempting to dominate not just the production of cells but also of the cathodes and anodes that go inside them - not to mention the chemicals used to make those electrodes. It has been firming up the entire supply chain - all the way down to the mines. And while you can find only so much lithium and cobalt in China, Chinese firms have been buying up mines in Africa and elsewhere for years.

The fun thing is that the west saw it coming and didn't try particularly hard to forestall it. Consistent, long term industrial policy is very effective.

RandomThoughts3• 2 years ago

But focusing only on manufacturing is missing half of the picture. China is using for batteries the same playbook they used for PVs. They are spending a lot of money to hire all the top researchers they can in the field.

Truth is they are years ahead of most battery manufacturers in R&D.

MoreMoore• 2 years ago

Germany is IBM. Existing industries are too valuable and influential, and shifting something as entrenched as German auto industries is an expensive, difficult endeavour that isn't immediately as profitable as the existing business.

At least maybe we'll get to stick around as business consultants and selling mainframes to a handful of companies convinced by "nobody was ever fired for buying German".

formerly_proven• 2 years ago

People like to say the US is a car-dependent country (because you can't go anywhere without a car).

However, germany is the most car-dependent country (because it can't go anywhere without making cars).

amelius• 2 years ago

The world knows how to make good cars now. The EU has to move on to the next problem if it wants to stay ahead.

Animats3• 2 years ago

The world knows how to make good cars now.

Companies can forget how.

Stellantis (which owns Chrysler, Jeep, Dodge, Fiat, and some other forgettable car brands) forgot how. The CEO was fired on December 1st, 2024. His strategy had been to crank prices way up, add on post-sale service charges, and get the biggest bonus in automotive executive pay history (not counting Musk's current litigated bonus.)

Sales went down. Way down. Chrysler now makes only minivans. Overpriced Jeeps are piling up in dealer lots. The "mild hybrid" power train, with 21 miles of electric mileage, is a dud. The brand image is in the tank. Nobody wears a Stellantis T-shirt.

The US has 3 million unsold cars sitting on dealer lots. Some have been there for over a year. How many will still start?

ghaff5• 2 years ago

Consistent, long term industrial policy is very effective.

Which worked so well for Japan that you had Nobel economic laureates promoting it. </s>

I'm being a bit sarcastic of course but MITA was seen as such the future in Japan--until it wasn't.

marcosdumay2• 2 years ago

Industrial policy will bring you up to a point, and apparently, no further.

Anyway, it was wildly successful in Japan, Germany, and the US. Up until the time it stopped working. It has been arguably less successful in China, but still good enough to create massive change.

fspeech3• 2 years ago

Japan does not have a big enough domestic market, which means their industrial policy requires a lot of foreign cooperation to be effective. Once others started seeing them as a threat their game was over.

Animats3• 2 years ago

Consistent, long term industrial policy is very effective.

Yes. This is what kills the US in rare earths, cobalt, gallium, etc. US mines shut down when the price goes down. Sometimes they restart when the price goes up. Sometimes they don't. All this churn makes the business unprofitable in the US.[1]

[1] https://mpmaterials.com/articles/mp-materials-reports-third-...

llm_trw2• 2 years ago

You're ignoring the fact that we also don't want oceans of toxic sludge left after the mining. This is not the case in China.

seanmcdirmid2• 2 years ago

China was refining rare earths without much concern for their own environment: they were basically ****ing in their backyard to provide the west with cheaper rare earths to work with.

This of course is unsustainable, and should have been stopped earlier by either Chinese or western governments with some concern for the environment as well rewarding bad self-destructive behavior.

Incipient• 2 years ago

To condense a few points. China generally out competes on a few points: - strategic government investment - lower cost of labour - lower environmental regulation - proximity to downstream consumers

nradov• 2 years ago

Germany had a giant, excellent chemicals industry. It has been shrinking due to higher natural gas prices. Natural gas is a crucial input for many bulk chemicals.

dyauspitr• 2 years ago

I get the engine and transmission tech doesn’t translate over but the vast majority of the chassis, transmission and pretty much everything else stays the same in a car.

That being said, having driven my EV for a year or so I somewhat find ICE vehicles gross now. All that sputtering, poisons, jerkiness, continuous maintenance, loudness etc. just feels so primitive. The only place it still makes sense is for situations that require a lot of power like long distance hauling, heavy equipment etc.

dzhiurgis2• 2 years ago

It’s like going back to plastic bags, cups and water bottles. It just feels gross to touch and you can feel getting poisoned.

Gibbon1• 2 years ago

My opinion as well. There is really nothing basically super special about electric vehicles. 90% is just standard commodity automotive tech.

jcfrei• 2 years ago

Yes but the level of investment the Chinese have poured into battery production and EVs in general is also completely unparalleled. Industrial policy is nothing new for US and EU but just not at that level.

To be able to compete with China the West would need to:

- Match generous subsidies to companies, not just through banks but at the government level by building entire towns just for battery production.

- Making large parts of land uninhabitable for the cost-effective extraction of rare earths.

- Suppress wages at factories and engineering bureaus to be able to cost compete in manufacturing.

- Dramatically lower cost of energy production (only doable without renewables in the short term).

I just don't see any Western government having a strong enough mandate for any of the policy changes required to compete with China. The simpler reaction is just imposing tariffs.

matthewdgreen• 2 years ago

Western nations have absolutely done this in the past. It’s the reason we are generally the richest and most secure nations in the world. The decision not to do this potentially means we forfeit those advantages for the rest of this century.

And China is hugely deploying renewables, which they happen to be able to produce very cheaply due to their industrial policy. The difference is that China is using their fossil fuel resources to make this investment, while the west is using its fossil fuel resources to shove crayons up its nose.

fspeech3• 2 years ago

China has far less farm land per capita compared to the US. Until the majority of excess farm labor are shifted off the land they do not need suppression to keep wages low. They just need to raise mobility, which they have done by building roads and railways.

rasz• 2 years ago

China didnt pour money into battery R&D. We did. Me, you, our parents, everyone with a phone since mid nineties. BYD stared out as a phone battery manufacturer, it took them decades to turn from cheap labor sweatshop into knowledge based company with own ideas and strategy.

MPSFounder• 2 years ago

China is of no concern to Europe or the US. Most of their tech is stolen or trickles down from innovation elsewhere. It is unlikely China will find success in the US given the sentiment (antiChinese sentiment is rampant in most of the US). Also, there are many legislations in place that would prevent it. I will mention though that the US and Europe need to get their act together. Too slow on EVs (it took an outsider like Tesla to get it going), and there is still too much reluctance to get the ball rolling. I view the best solution as "forcing" the oil giants to innovate in this sector, but given their lobbying prowess, it is highly unlikely. In a highly democratic society, Shell in Europe and Exxon here would be paying their dues in electric infrastructure and battery tech

Filligree• 2 years ago

Most of their tech is stolen or trickles down from innovation elsewhere.

This is how it always works, until it doesn't. Why is everyone so quick to forget that Japan was the exact same way in the 70s and 80s?

jinpan• 2 years ago

Most of their tech is stolen or trickles down from innovation elsewhere

Overheard at a battery conference: western battery suppliers are actually copying (or in your words, stealing) the Chinese electrolyte formulas and other designs.

Great artists steal, the US and Europe play the same game.

lazyeye2• 2 years ago

Angela Merkel's legacy has not been good..

https://archive.md/N3RWo

myspy• 2 years ago

What right wing news source is that? They paint a pretty one sided picture here. Some truths but not all. Germany was on its way to be energy independent with wind but that was blocked by Merkel and right leaning governments since 2010. Without that intervention we could be big in wind and having a lot of people work in that sector. Instead they turned back to gas and coal.

The dependence on cars and the incompetence to get excellent on software are a huge problem here in Germany. But the educated part of the people here saw that coming.

The will to change is what is dragging us down in Germany.

singularity2001• 2 years ago

What I find puzzling is that around 10 years ago Audi and VW committed fully to electric vehicles, investing $100 billion(?). So why do people now claim they missed the boat on EV development?

M95D• 2 years ago

- Because 10y ago was already too late.

- Because they can invest and still fail.

- Because a press release and actual money spent on reasearch are two very different things.

oldpersonintx• 2 years ago

this seems mostly about VW, a company that is both a huge presence in the EU economy and probably irrevocably f---ed

VW is slowly vanishing from US markets (EV or ICE) and tried to enter the Chinese market only to get the crap kicked out of it

I'd mention Stellantis which is also mostly an EU company now, but they are so screwed at this point it isn't even sporting

alephnerd3• 2 years ago

tried to enter the Chinese market only to get the crap kicked out of it

That's a massive rewriting of history.

VW was one of the earliest foreign automotive manufacturers to enter the Chinese market.

In the 1990s and 2000s, the Volkswagen Jetta was China's Model T. And until 2023, VW was the top selling car brand in China.

And that was the crux of the issue - VW grew complacent by leveraging "Made in Germany" branding to sell in China, while not investing in innovation.

This meant that when Chinese challenger brands like BYD could outcompete VW in China, VW as a whole suffered.

Already VW has lost significant market share in the US after the emissions scandal and is functionally non-existent in Japan, Korea, Brazil, and India.

China was their last growth market within which they held dominance, and they lost it.

This is a common story for "Made in Germany" - German manufacturers strategically chose China in the 2000s for greenfield FDI, and unlike most other European countries, Germany's economy is extremely coupled with China (France and the UK were more diversified with France leveraging LatAm and India and the UK leveraging NA and India).

SoftTalker• 2 years ago

Did people in the US really stop buying VWs because of the diesel emissisions stuff? Almost nobody in the US buys diesel passenger cars anyway. I could not care less about a cheat on roughly zero percent of cars sold. Diesel emissions could be totally unregulated and it would not make any difference -- nobody buys them anyway.

seanmcdirmid2• 2 years ago

VW grew complacent by leveraging "Made in Germany" branding to sell in China

Designed in Germany, almost all VWs sold in China (including black Audis government officials loved) were made in China under three 49/51 JVs (with VW as the minority owner). The majority owners in tern graduated with VW technology/know-how and combined with EV tech to sell under their own brands, although not as successful as BYD. Even BYD had its own 49/51 JV with Mercedes for a decade.

The only foreign auto manufacturer allowed to operate in China outside of a minority JV is Tesla.

dzhiurgis2• 2 years ago

Their EVs are fine (except for software), but why they are so expensive?

mrtksn2• 2 years ago

Europe doesn't make the best cars, USA doesn't make the best planes, Japan doesn't make the best electronics. What a time to live in.

Anyway, that's all fine. Those are all huge and diverse economies, will re-group and stabilize.

tirant• 2 years ago

I still think Europe makes the best cars. But being the best is never enough to also sell high volumes.

Europe is stagnating due to an ever-increasing set of regulations, higher taxes (partially required to enforce those regulations and a shrinking labor force) and specially the effect that those have on the motivation of the most skilled workers: killing it.

Me and my wife have tried starting a couple of businesses, but it’s incredibly complicated to navigate and deal with German bureaucracy, and all the effort gets awarded with an incredibly high tax rate of around 50%.

So lots of smart people in my environment are actually walking the path backwards and they have either stopped side projects or simply started to reduce working hours. Either that or just moving to other countries like Switzerland, Singapur or the US.

The situation is even worse in Netherlands, France or Spain.

The taxation system in those countries creates negative incentives as it makes you feel punished if you become economically successful with a new product or idea. I really think it should be the complete opposite. And it’s not a matter of lack of budget for public services: public education, healthcare and justice are usually covered with around 30% of the public expenditure.

mrtksn2• 2 years ago

Well, maybe the previous gen cars but Europe doesn't have an outlier in EVs.

Anyway, I don't think that it has anything with regulations or taxes. It's the attitude of Europeans. You can see how European GDPs have fallen short after 2008 but that's not because regulations kicked in in 2008 but because, IMHO, the way they handled the economical crisis.

Also, Europeans have a different understanding of what startup is supposed to do, they appear to think that its computer based high margin small business and Americans appear to believe that its supposed to be a business that should grow extremely fast and doesn't have to have any profit until it captures the market and establishes monopoly.

The American way creates huge wealth but creates a lot of suffering and stagnation once the startup reaches the profit making phase. This is a no-go for the Europeans, its something that the public demands be tackled and its something that EU tries to do with giant tech corporations and that's what makes the American businesses hate EU.

I don't know if European public will accept having american-like wealth concentration at the top. The vibe in Europe is that we should all have a dignified life quality and un USA they are O.K. with having people in extreme poverty at the same street with 40 Billion dollar company HQ. When they are too annoyed by all that poor, their solution ideas are something like "let's move somewhere else", "let's buy a land and create a new city where we don't have these people around" or "let's kick out these people and make them someone else's problem".

Yes, the American way creates huge wealth but I'm not convinced that its an improvement over over European way. Also, don't look just for EU vs USA, take at look at China, Japan and Singapore who also managed to built great wealth or innovation without forcing part of the population in poverty.

ArtTimeInvestor• 2 years ago

How long until the next shock hits, building cars without a steering wheel, but with a sensor suite and self-driving software?

MrVitaliy• 2 years ago

Not soon, this would requires sophistication in software and software development. US has the crown on this for now and near future at least.

phoronixrly2• 2 years ago

Pushing 40 and still have not owned a car. Hopefully this will be the future of Europe instead of replacing ICE cars with EVs.

poisonborz• 2 years ago

You have probably lived in a big city all this time, which most Europeans have not.

phoronixrly2• 2 years ago

You are wrong. I've lived in both a small and a large city, both tiny compared to the average european metropolis...

layer8• 2 years ago

You don’t need a big city. A train station, a taxi service or local public transport, and maybe a car rental for the infrequent occasions where using a car makes sense is generally sufficient. Especially with e-bikes nowadays.

ciconia• 2 years ago

A few months ago I was looking for an EV. Went to the local Citroen/Peugeot dealership (I live in France), asked what they had. They told me I could have the new e-C3, the basic model, with 300KM range, for ~35000€. I asked how long it would take to have the car once I ordered it. They told me six months.

A few weeks later I went to the local MG dealership. They told me I could have an MG4, the high-end model (heated seats, automatic AC, fast charging), with 420KM range, for ~35000€. I asked how long it would take to have the car once ordered. They told me I could have it the next day, I would just need to choose a color that's in stock.

I bought the MG.

Basically, the European manufacturers sell cars made to order. You tell them the exact model you want, the color you want, and they put it on their roster, to come out of the factory months later.

The Chinese bring over thousands of cars to Europe, and they just sell whatever is in stock. When they have too much stock, they reduce the price. They don't even really care about those pesky European import tariffs.

Those Chinese cars are better equipped, have longer range, and cost less than the European ones. Meanwhile, the Europeans are busy selling their old petrol-burning models to south America in exchange for cheap south-American meat [1]. No wonder they're losing the EV war.

[1] https://apnews.com/article/uruguay-mercosur-european-union-t...

tzs• 2 years ago

The US car makers are also doing their best to screw it up.

Chevy had an EV, the Bolt, that gets pretty good reviews. They had some kinks the first few years but seem to have gotten them worked out. And with the tax EV tax incentives a Bolt was around $20k (around $28k without incentives). Range of around 250 miles (400 km).

Then they announced in early 23 that it was being discontinued to make room for their "new generation" of EVs. That newer generation was going to be bigger cars and more expensive cars with nothing comparable to the Bolt.

They did later add a next generation Bolt to the plans, with manufacturing to start in 2025 for the 2026 model year, and supposedly it is still going to be around $28k. The next generation uses their "Ultium" architecture which is probably a good thing--they are using that in all kinds of products, including military products, so it will probably have good long term support. But they are also dropping CarPlay and Android Auto, instead going with some in-house system, and those generally don't have a great track record compares to CarPlay or Android Auto.

Still, even if the 2026 Bolt turns out well they did introduce a 2 years gap where no Bolt was available. The only Chevy EV choices are the $42k Equinox, the $49k Blazer, and the $96k Silverado.

If instead of discontinuing Bolt and then scheduling a reintroduction for 2026 they had continued making the current generation and just rolled out the 2026 as the next generation (like basically every other auto maker does when they change generation) I'd seriously be looking at getting one now. I had planned on an EV sometime in the next 4 years, but with the incentives likely to go away under Trump moving that up to now could make sense. But Bolt, at $28k before incentives, was the cheapest EV on the US market.

Second cheapest is Nissan Leaf at just a little more than a Bolt, but it only has 150 miles of range and they still use an air cooled battery. After that was Mini Cooper SE Hardtop at $32k. That thing is cute, but only 114 miles of range, and I'm rather large so even if I fit in the thing it would probably feel claustrophobic.

So, in summary, Chevy had the lowest cost reasonable EV on the US market, and nobody was really even challenging them for that...and they just gave that up.

floxy• 2 years ago

The only Chevy EV choices are the $42k Equinox,

The LT trim of the 2025 Equinox EV is under $35,000 MSRP. Which puts it at under $27,500 with the $7,500 Federal Tax Credit.

https://www.chevrolet.com/electric/equinox-ev

xbmcuser• 2 years ago

For how long though as China is building large shipping container ports as well as EV car factories in South America and Central America. Now a lot of US media and politicians are saying China is doing it so that they can access US markets. But I don't think so they are building these so that they get access to the huge market. As ev plus solar keep getting cheaper and a lot of countries dependence on oil for energy for economic growth will be removed they are building a market for their electronics as well as a suppliers for their food requirements.

johnea• 2 years ago

The whole article seems like typical apologism to me.

If you look at that graph showing thee difference in price for various components, the difference in "distribution" and "body and chassis" (in absolute dollars) is greater than the battery.

Add to this China's ability to sell a car for $20K Australian, shows that it's not just the battery. And as noted in other comments, the US and Europe both also make a lot of batteries.

The biggest problem is that incumbent equity holders just want to keep making more money, while making the same product. The rest (including the tariffs) is just apologism, and a distraction from the core facts.

Of course everyone wants a car that's at least $80K! If GM shareholders aren't going to increase their returns, why would anyone even drive a car at all?!

The electric shock behind Europe's stuttering EV future

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