Tag Archives: BYD

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China is the world’s largest car exporter

Japan has been the world’s largest car exporter for decades, but it was only a matter of time before another Asian giant (China) took over that position. This happened in 2023 when, according to official data, China exported one million cars more than Japan.

The development of the automobile industry in China is expanding, primarily fully electric vehicles, which are killing competition worldwide with low production costs and subsidies provided by the Chinese government. This has led large manufacturers to find partners in China or open their own plants, and increase competitiveness in the world market. “If you can’t beat them, join them.”

China has become a big “problem” for most developed countries that are trying to protect their own car manufacturers. Some of them, like the French one, canceled subsidies on new electric cars produced in China, in order to protect domestic manufacturers. This is also expected from other EU members. According to Bloomberg Intelligence, if the other members adopt the same decision, it could threaten the import of electric cars and small commercial vehicles in the amount of almost 7 billion dollars. The fact that in 2023 it exported 5.26 million vehicles, excluding exports to the USA, shows how serious the success of the Chinese industry is. Chinese manufacturers exported the most cars to Russia and Mexico, but also to Europe.

When it comes to the domestic market, sales of fully electric cars increased by 21% while sales of plug-in hybrid cars increased by 83%. The leader is BYD with 3,024,417 vehicles, making this company one of the top 10 largest car manufacturers in the world. The second largest manufacturer was Chery with 1.88 million cars, while the third was Geely with 1.62 million vehicles. Also, in Q4 of last year, BYD surpassed Tesla in terms of sales of battery vehicles.

Source: Reuters

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Volkswagen ID.7 Vizzion is 57.4% cheaper in China than in EU

The new electric sedan Volkswagen ID.7 Vizzion is coming to the Chinese market, and the most attention is attracted by the price of the car, which is 57.4 percent cheaper than in Germany. Why is this so, whether and in what way the Chinese authorities help manufacturers to be more competitive on the market?

The Chinese authorities subsidize domestic car manufacturers in various ways, through loans from state-owned banks, capital reserves from state investment funds or lower electricity fees. A few years ago, the Chinese government gave about one billion euros to Nio to save it from bankruptcy. However, it was not just financial support, because with that money the government bought a 24 percent stake in the company. After that, there was another financial injection from an unnamed state banking house in the amount of 1.5 billion euros. Now the government is helping Nio with 32,000 euros per car.

In order to be more competitive in China, VW reduced car prices last month, which turned out to be good, when it comes to sales. However, growth was achieved primarily through the sale of low-cost cars such as the Lavida sedan (13,345 euros), putting VW in second place with 1.56 million vehicles sold. BYD was first with 1.79 million vehicles sold, and Toyota was third with 1.24 million cars.

What may worry VW and its Chinese partners is the problem of low demand for their battery vehicles, as the company is sold 92,332 units. Compared to the biggest competitor, BYD (893,754 vehicles), the problem seems even bigger. Also, Tesla managed to sell five times more electric vehicles (433,729).

Another reason why cars made in China are cheaper compared to the rest of the world is cheap labor. A manufacturing worker there earns about a third of what an American or European auto worker earns annually. Also, Reuters recently wrote about an unnamed employee of the Changan Automobile Factory in Che-fei, who experienced a reduction in income and left his job in July, because his salary in May and June was only four thousand yuan a month (about 512 euros ), instead of 900 euros as he expected.

How the rest of the world, primarily Europe and the USA, will react to the increasing pressure that Chinese manufacturers are putting on the global market remains to be seen.

Source: VW, Reuters, NYT

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Volkswagen ID.7 Vizzion is 57.4% cheaper in China than in EU
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How China Subsidizes Electric Car Manufacturers?

Last month, the EU launched an investigation into the privileged position of electric cars made in China due to subsidies. This does not only apply to Chinese manufacturers, but to all electric cars produced in China that are exported to the European market. Following this case, the New York Times revealed that China subsidizes the Nio with 32,000 euros per car.

In 2020, Nio was facing bankruptcy. The Chinese government gave about one billion euros to save the company, but it was not just financial support, because with that money the government bought a 24 percent stake in the company. After that, there was another financial injection from an unnamed state banking house in the amount of 1.5 billion euros.

In addition to government support, Chinese car manufacturers have another big advantage in terms of low prices compared to manufacturers from Europe and the US, and that is the lower cost of labor. A manufacturing worker there earns about a third of what an American or European auto worker earns annually. Also, Reuters recently wrote about an unnamed employee of the Changan Automobile Factory in Che-fei, who experienced a reduction in income and left his job in July, because his salary in May and June was only four thousand yuan a month (about 512 euros), instead of 900 euros as he expected.

When it comes to other electric car manufacturers, BYD is the largest Chinese electric car manufacturer, and in the first six months of this year, it made a profit of 1.35 billion euros. Some data show that the BYD Seal could be produced 35% cheaper than the Volkswagen ID.3, which, thanks to the technology, is another advantage of the Chinese manufacturer.

Source: New York Times