![](https://i.imgur.com/CLvY2jA.png")
30-09-2023, 10:54 AM
Analysis by Hanna Ziady, CNN
Updated 6:37 AM EDT, Fri September 29, 2023
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Electric vehicles represent a fundamental shift in the technologies and manufacturing processes that have turned Ford and rivals such as Toyota ™ and Volkswagen into the biggest car companies on the planet.
Established automakers have been racing to adapt at an enormous financial cost, but are still miles behind Tesla (TSLA) and a crop of new Chinese competitors, including BYD and Xpeng (XPEV).
The world needs affordable EVs more than ever as electric cars will play a big role in hcelping countries cut planet-heating pollution. But can automakers in Europe and the United States — where governments are already planning to ban or limit the sale of new gas and diesel cars — deliver them?
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New entrants have the jump on technology and the rising Chinese brands boast lower production costs, allowing them to charge lower prices — a huge advantage given that affordability is a major barrier to widespread EV adoption
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In the EV race reshaping the global auto industry, China is speeding ahead. Japan, South Korea, Europe and the United States — the dominant players for decades — are lagging behind.
......
Established automakers are now spending hundreds of billions of dollars and setting ambitious targets for EV sales to narrow the commanding lead held by Tesla and Chinese rivals.
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It’s unclear whether those investments will pay off. “When legacy [carmakers] talk about catching up to Tesla or catching up to the leading Chinese automakers, it’s difficult. They simply don’t have the skillset in-house,” UBS analyst Patrick Hummel told journalists on a recent call.
Multi-billion-dollar spending plans also come at a challenging time for the industry, which has had to contend with semiconductor shortages and supply chain snafus for several years. Car sales overall remain well below pre-pandemic levels and profit margins on EVs among established players are slim to non-existent.
......
Established automakers may become even less competitive if striking workers at Ford, General Motors and Stellantis win improved pay deals in the United States.
......
That’s because the concessions would push up the cost of an average EV by US$3,000-US$5,000. Passing these cost increases on to consumers would “torpedo” the Big Three’s future business models
......
While they need less labor, EVs cost more to build than combustion engine vehicles because the raw materials for batteries are expensive and hard to come by. Refining manufacturing processes and scaling production also take time.
Here, too, China has the upper hand. It is by far the world’s biggest EV battery manufacturer and dominant in the supply and processing of many critical components needed to make the batteries.
......
Global automakers have had little choice but to enter into joint ventures with Chinese EV and battery manufacturers. But cooperation has become a more complex undertaking as trade tensions between China and the West rise, and as Western governments push to reduce their countries’ dependence on China.
On Monday, Ford said it would pause work on a US$3.5 billion factory in Michigan where it had planned to make EV batteries using technology from China’s CATL, which also supplies batteries to Tesla.
......
If the EU imposes tariffs above its standard 10% rate on imported cars, that could provoke retaliation from China, which would likely harm European carmakers, many of which make a large chunk of their profits in China.
“Adding protectionist measures towards China is kind of like shooting yourself in the foot,” said Röska.
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And if Europe wants to lower its carbon emissions, it will need cheap EVs. According to a 2022 report by research firm Jato Dynamics, electric cars sold in China are roughly 40% cheaper than those sold in Europe, and 50% cheaper than in the US.
https://edition.cnn.com/2023/09/29/cars/...index.html
Updated 6:37 AM EDT, Fri September 29, 2023
......
Electric vehicles represent a fundamental shift in the technologies and manufacturing processes that have turned Ford and rivals such as Toyota ™ and Volkswagen into the biggest car companies on the planet.
Established automakers have been racing to adapt at an enormous financial cost, but are still miles behind Tesla (TSLA) and a crop of new Chinese competitors, including BYD and Xpeng (XPEV).
The world needs affordable EVs more than ever as electric cars will play a big role in hcelping countries cut planet-heating pollution. But can automakers in Europe and the United States — where governments are already planning to ban or limit the sale of new gas and diesel cars — deliver them?
......
New entrants have the jump on technology and the rising Chinese brands boast lower production costs, allowing them to charge lower prices — a huge advantage given that affordability is a major barrier to widespread EV adoption
......
In the EV race reshaping the global auto industry, China is speeding ahead. Japan, South Korea, Europe and the United States — the dominant players for decades — are lagging behind.
......
Established automakers are now spending hundreds of billions of dollars and setting ambitious targets for EV sales to narrow the commanding lead held by Tesla and Chinese rivals.
......
It’s unclear whether those investments will pay off. “When legacy [carmakers] talk about catching up to Tesla or catching up to the leading Chinese automakers, it’s difficult. They simply don’t have the skillset in-house,” UBS analyst Patrick Hummel told journalists on a recent call.
Multi-billion-dollar spending plans also come at a challenging time for the industry, which has had to contend with semiconductor shortages and supply chain snafus for several years. Car sales overall remain well below pre-pandemic levels and profit margins on EVs among established players are slim to non-existent.
......
Established automakers may become even less competitive if striking workers at Ford, General Motors and Stellantis win improved pay deals in the United States.
......
That’s because the concessions would push up the cost of an average EV by US$3,000-US$5,000. Passing these cost increases on to consumers would “torpedo” the Big Three’s future business models
......
While they need less labor, EVs cost more to build than combustion engine vehicles because the raw materials for batteries are expensive and hard to come by. Refining manufacturing processes and scaling production also take time.
Here, too, China has the upper hand. It is by far the world’s biggest EV battery manufacturer and dominant in the supply and processing of many critical components needed to make the batteries.
......
Global automakers have had little choice but to enter into joint ventures with Chinese EV and battery manufacturers. But cooperation has become a more complex undertaking as trade tensions between China and the West rise, and as Western governments push to reduce their countries’ dependence on China.
On Monday, Ford said it would pause work on a US$3.5 billion factory in Michigan where it had planned to make EV batteries using technology from China’s CATL, which also supplies batteries to Tesla.
......
If the EU imposes tariffs above its standard 10% rate on imported cars, that could provoke retaliation from China, which would likely harm European carmakers, many of which make a large chunk of their profits in China.
“Adding protectionist measures towards China is kind of like shooting yourself in the foot,” said Röska.
......
And if Europe wants to lower its carbon emissions, it will need cheap EVs. According to a 2022 report by research firm Jato Dynamics, electric cars sold in China are roughly 40% cheaper than those sold in Europe, and 50% cheaper than in the US.
https://edition.cnn.com/2023/09/29/cars/...index.html
