hi I’m Jamie pusso so if I told you right now there is a person just like you in China who can buy a highquality electric car for about 10 grand us and on top of that that the company making those cars have Global Ambitions to sell good cheap cars to more people I’m guessing that you’re going to think that that sounds like a pretty good idea well you know who thinks that that is a terrible idea US President Joe Biden and the big American automakers last month Biden slapped a 100% tariff on Chinese electric vehicles Tuesday he tweeted the future of electric vehicles will be made in America by union workers Europe has cracked down in similar ways so how has China become so huge on EES why is the West looking to shut them out and will it work I’m joined by Steve LaVine the author of the PowerHouse America China and the great battery War an editor of the electric which you can find on the US tech publication the information Steve hey thanks so much for coming on to Front Burner thanks Jamie glad to be here it’s great to have you so so Chinese EVS are really having a moment and and tell me why that is they uh so there’s a couple of reasons you named one of them and that’s that they’ve got price points across the Spectrum from very very low to very expensive you didn’t say so but there is a a Chinese electric car that goes for $230,000 as well wow um yeah there selling that one that that’s byd they’re selling it in Switzerland I guess I guess that’s a good place for that the main thing is Chinese car makers have been at this for long a lot longer uh since 2009 2010 getting ready for this moment uh a lot of cars a lot of price points and uh in addition to that quality they they they started out uh you know you would get in and you you wouldn’t want to sit in it uh the car for very long because uh you would you would fear it was going to fall apart but the quality now is very very good uh these are the reasons you know you hear people talk about uh how the industry there is heavily subsidized by the Chinese government and that’s why they have been able to um get such momentum and and do you have a sense of the extent to which that’s true yes I do in fact um so um it is true that um um the industry um from Soup To Nuts you know from from mining minerals all the way through all of the components to the cars themselves and the batteries have uh been been supported by the state to different degrees throughout all this period in including uh for um consumers you know uh uh tax credits and also things like you don’t need to pay a uh license plate fee you know which can be very expensive in the cities you can drive in uh free Lanes so you’re not stuck in traffic um so those still ex exist but I the the way that I look at it is is that a lot of those subsidies have been lifted or reduced in recent years and uh the West is fonded in all of these cases where Chinese companies uh move in on an industry of blaming it on subsidies and product dumping but in in this case you got to sell the car people are buying these these cars because they’re good cars this 27-year-old is about to buy his first sedan he’s going for an EV but not necessarily for environmental reasons I don’t have a particular preference between electric or petrol cars it’s just that now for the same price even offer a much better user experience so the CH Chinese really have upped their game they are the best some of the best because you know uh we do have Tesla after all um but uh you know among the best EES in the world and and just tell me more about why why they’re among the best EES in the world what makes them so good and also like why are they cheaper than than the EVS that that we’re that we’re seeing here like how how is that possible the quality and the price come down to the same mostly the same reason and it’s it’s because of brutal competition so h a few a few years ago and I’m thinking about 2019 there were about 500 Chinese EV companies um I I don’t know how many we we we have in the US and and Europe let’s say 15 you know 10 10 or 15 companies def definitely not 500 but now they are 100 that means that that the that competition that Chinese competition winnowed out 80% of of the companies and and they you know they they they fight like crazy uh to sell to the public uh the public Chinese public does have a choice and uh and and so the vehicles got better the quality got got better and also Chinese buyers are Tech maniacs and so uh and so whereas we might look and do look right at The Styling and and you know we’re we’re you know absolutely uh fixated on uh fast charging which we should be but they are fixated on gizmos every kind of tech you you can think of and probably can’t think of um are in that car give me an example well well karaoke it’s it’s absolutely uh uh a standard feature in these EVS by it’s not your usual road trip it’s big business for companies like xun Neo and Le Auto who are at the Forefront of this trend besting Western Rivals by offering models with karaoke microphones uh uh right why why would you want to be in your EV and you can’t sing so um why not yeah one thing I I wanted to um that your listeners ought to ought to know it is true that the byd SEO when people are talking about the $99,000 car they’re talking about the byd single uh seagull that’s what it costs in China when they sell it abroad it’s $21,000 so what they’re do what the the Chinese are doing is they do have this brutal competition at home Cut Rate prices when they go abroad they’re doubling and in some cases uh tripling the prices that that that they’re selling and that and that’s why they’re not making any money at home but they do make money when they go abroad so let’s talk about their attempts to expand uh you know you mentioned how they’re selling the car uh one of the cars for $21,000 abroad like you know where are they selling how is it going you know you know are people able to easily access these vehicles and if if not why not this is part of the China Playbook industry by industry they build up through this kind of uh uh uh feverish uh expansion of new Industries uh and they end up with enormous overc capacity twice three times in the case of eeve six times as much production capacity as they need for the local market so then they they push out into the export Market that’s what we’re seeing now is that stage it started last year so so you’re seeing Chinese made e Eves in Israel in in uh southeast Asia some in South America for example the $21,000 car I told you about that’s Brazil and Mexico and and some right we’re hearing a lot about the Europeans being paranoid about a Chinese flood yeah one out of two Chinese car exports is already already sold in Europe and with this sudden rise the EU is worried about unfair commercial practices Global markets are now flooded with cheaper Chinese electric cars and their price is kept artificially Low by huge State subsidies this is distorting our Market the commission it hasn’t really started yet really they’ve only sold uh you know all the Chinese companies maybe there are five or six that are attempting to sell in in Europe it’s a few thousand models per per year at the at this stage but they want to sell a lot more so they’ve they’ve put uh Europe on um alert setting up showrooms everywhere it’s a it’s a bit of a uh a cart and horse or uh you know chicken and egg Pi pick your metaphor situation the price that uh xong Neo byd the companies that are selling in Europe they’re not cheap yet right so do you want to pay 40,000 euros or 50,000 60,000 Euros for your EV it’s not these Cut Rate prices that we hear about in China at this stage and then and then you might ask and I’ve asked well why not right yeah why is that okay the short answer is we don’t know why but we’re but there there there’s conjecture out there one is they want to earn uh as much as they can they’re doing price Discovery but the other one is uh that that you hear is they don’t want to uh stir up resistance to their uh Brands prematurely by undercutting the you know the local Brands too much of uh you know what what’s Volkswagen BMW Mercedes Renault what are they all going to say if the Chinese companies come in at at half the price of a of an e equivalent EV model like that that seems to make sense and and not to ask too obvious a question but you know what could happen if there was like a lot of resistance I I guess there could be what banss on these cars or very high tariffs on the cars like what what could happen yeah so China uh over the last 10 days or so so um have imposed pretty high tariffs on on the Chinese cars depending who you are so the so the EU investigated Chinese subsidies and then they imposed uh a strata of tariffs on the companies depending whether you cooperated with the investigation what is happening in the United States how how is the US which of course also has a a car industry and you know companies like Tesla uh H how how are they responding to this these Chinese vehicles are effectively banned in the United States they’re not really banned but the politics in the United States is hostile the Chinese companies feel that and so they’re not selling them in in in the unit States so you can buy two kinds of chinese-owned models in the United States but no one knows they’re Chinese Volvo and postar so those are both owned by jie uh the the Chinese car company and uh you know they they sell pretty well the way things stand no one expects anytime soon there to be like a European situation for Chinese owned vehicles in uh vehicle companies in the United States they will however you know some somehow they’ll come in through Mexico they’ll come over from from Europe byd will Rebrand itself but don’t look for electric cars from byd on American roads anytime soon US Government need to be more friendly Stella Lee is the CEO steering byd’s expansion in the Americas she said the US is not part of the plan yet they not waiting but then for byd we are ready they will get into the United States to but to the degree that they do not I think it bodess really really badly and ominously for the US companies Ford GM GM and Ford have a history of ignoring foreign competition and their quality has t because of that they’re not they’re not as competitive as as they could be and I guess when you talk about a history of this like maybe that’s um like were we talking about like the 70s and 80s right like when the Japanese car industry really started booming and and uh you know you saw this kind of s these the similar push back from the North American manufacturer yeah it’s a hangover there there there’s a hangover we have we have a Prejudice you do and I do probably some of our friends uh our parents right about American cars about their quality they may be a lot better but we don’t think so and we want to be sure so we’re buying German and Japanese cars so um this could happen with the Chinese cars too you’ve got to have the competition you got to meet the competition uh Ford and GM have already transformed themselves from International companies to mostly Regional companies both of those companies sell most of their vehicles in North America SUVs and pickup trucks I just feel like people might be very frustrated hearing this conversation people who just like are interested in getting an electric car is better for the environment they would like uh it to to be able to buy one that’s relatively reasonably priced um uh and and like you’re telling us that there all these great Chinese EVS uh for you know very good prices and and we can’t get anything like that yeah you’re right it’s true and really when you think about the you know the cars that at this we’re at the very front end of this and so there aren’t a lot of available models in the coming like two years next year year 2025 and 2026 you’re going to see a lot more of them but as it stands we’re not seeing a lot of them the ones that are the best Hyundai gets very good marks right South South Korean company and and those are uh available um Volvo and Tesla I actually had a question to try and wrap up this conversation at some point about Tesla because there is this there is this sense right that um the the company’s kind of been in a slump for a while but you know how how does it fit into this uh this whole equation all right so the the number one selling car of any kind any kind in the world last year uh and possibly this year too is the Tesla Model y so it’s you know an out of this world wildly selling vehicle it also is four years old it came out in 2020 the first model uh lineup the Tesla lineup is stale you know fantastic cars a few years ago and starting to run behind the Chinese models and and so and and recently as you know uh Elon Musk the the CEO announc I’m not going to make the um $25,000 car Tesla appears to have asked plans for a cheaper model that was set to cost around $25,000 that tallies with earlier reuter reports that boss Elon Musk had cancelled the allnew model 2 at the time he posted on X that Reuters is lying but failed to point out any I’m worried about Tesla also right and so you know they they started out Gang Busters but musk has kind of made a pivot I want to make humanoid robots and uh right and I you know I want to be a big AI company and I I want to uh you know equalize free speech uh depending how you want to you know view that you know be totally outspoken um and he’s become less interested in EVs and so they could slide out of Tesla could easily slide out of re uh relevance well I think this question might be a good one to end on I know that it’s something you’ve hit on a few times um during this conversation but you know take me down the line a little bit five years even 10 years um just for for somebody living in North America in Canada or in the United States like what is the landscape going to look like like you know is it going to be very easy for me to buy an EV what kind of EV you know how much money am I looking at like what what what what is this going to be like okay okay I’m glad to do this or am I just G to buy another gas power yeah no no that’s exactly how you should be thinking so uh the the caveat here this is total conjecture do not come back to me in 2034 and say Steve you were completely wrong all right so so um I think that the uh the tail the for combustion pure combustion is much longer than we think it doesn’t end in 2030 or 2035 it goes on longer than that and it goes on in the form of these of the pure models but also in the form of hybrids and plugin hybrids so if so you know thinking five years and 10 years from now people do people are buying and in fact most people want to buy those kinds of cars because they want to they want to save gasoline but also kind of a stigma a social stigma arises about burning fuel only Fuel and not and not having any energy saving device in your car and I do think we have Chinese EVS everywhere uh that that we that it becomes normalized and I also think that um one or more maybe more of the major car companies no longer exists so you know do you think it’s fair for me to say um you know with the caveat that of course you don’t have a crystal ball um that in this kind of global fight uh for the future of this you know really important technology China wins China has won the 2020s for sure the fight we’re fighting now is for the 2030s and Beyond and you might be right I’m I’m not I’m not prepared to uh to wave the White Flag yet but they may they they may have won for sure the first half of the 2030s the second half of the 2030s they’re contested all right Steve this is great and super interesting I learned a lot thank you so much thanks Jamie all right that’s all for today I’m Jamie Pome thanks so much for listening talk to you tomorrow
China’s electric cars are cheap, plentiful and high quality. But Western governments and automakers are determined to keep them out.
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