A good analysis of the evolution of the EV industry in China. Elon has to be gritting his teeth in frustration. And this was accomplished without the leadership of the Party as well. The world is full of surprises. It is all to easy for the US to dismiss the PRC as an authoritarian regime that controls everything but here that does not seem to be the case.
I would say that Chinese people remain grateful to Musk for building the Shanghai Gigafactory. His decision to locate the plant there helped rapidly knit together China’s previously fragmented electric-vehicle supply chain.
When it comes to Tesla, the Chinese government and Musk may be able to maintain a delicate tacit understanding. After all, the two sides have a history of mutually beneficial cooperation—and the Shanghai factory pays roughly $239 million in taxes each year.
The Wall Street Journal recently reported that Musk might sell the Gigafactory to protect his company from geopolitical tensions and "might also come in handy if he proceeds with a SpaceX merger." Beware of Musk bearing gifts. His only loyalty is to himself.
Yes. Western media continues describing China as this monolithic entity with a central control tower, but history and living in China teaches that isn't the case.
The consumer-side lesson hiding in this history is refresh speed. Chinese makers iterate model-years the way software ships versions, and even Western EVs now change more year to year than petrol cars ever did. The overlooked consequence lands in the used market: when cars improve that fast, the gap between two adjacent model-years of the same nameplate can be enormous - in range, in charging behavior, and in documented failure rates. Buying a used EV on the badge alone is like buying a laptop by brand and ignoring the generation. I write for evriskindex.com, an independent site scoring 300+ EV model-years on documented failures and recalls, and our Used EV Risk Report exists for exactly that check: https://evriskindex.com/used-ev-risk-report/
Really loved this, didn’t know the history on first Chinese IPO in the US.
Growing up I remember Shanghai taxi used to be all Volkswagen ( the German bet in China, had more faith than the French namely Renaults) now it’s all Chinese EV brands.
While China is indeed a developed country on paper, I argue it will never truly reach that status unless it can absorb its capacity issue internally without going outside.
The nature of sick competition has to change, we can’t have car makers 300 km from each other and every city has one. There is a difference of innovative competition and political gain
Looking around, there is just so so many Chinese carmakers now days. Walking around in Shanghai, there is brand that even local Chinese would know about.
While competition is great and is what any competitive country should encourage within. There is also a level and degree it can’t go too far. In China with an automaker that can be located only 300km from each other… that’s too far. It’s a sick competition that drags the industry into a pricing war rather than innovative solutions. I
China’s EV rise is a great example of what happens when industrial policy, manufacturing scale and intense domestic competition collide. The interesting question now isn’t whether Chinese automakers can compete globally. It’s how much market share everyone else can defend.
The EV comparison with humanoid robots is useful, but I think there is one big difference. Being in China from the first attempts at EV, I saw how EVs had a domestic buyer that policy helped create before exports really took off. Remmenber the incentives: no expensive plates , big discounts, and a population who really wanted a car.
Humanoids do not have that buyer yet. A lot of the volume seems to be pilots, universities and demo budgets. Those can disappear quickly.
When you look back at EVs, what was the first sign that demand was real rather than subsidy-driven?
Really enjoyed this, thanks!. I found it especially useful for understanding what sits behind the EV ecosystem I’m now experiencing in China. I only moved here about a year ago, and after roughly three decades of driving petrol cars in different countries, I recently made the switch to an EV after thinking about it for quite a while. From the driver’s seat, it’s easy to see today’s charging networks, technology and huge variety of EVs simply as “how things are” in China. This article gave me a much better appreciation of the rather messy combination of local governments, entrepreneurs, capital and experimentation that actually produced it. Thanks for such a fascinating piece.
Wonderful post. Seems to me that it comes closer to understanding the Chinese way of enterprise than anything I have read. I found myself much amused, had a good laugh here and there at the ingenuity and determination of people to fight their way through the maze. And the Chinese maze is unique. A great story. I do love the fact that Mao could stimulate grass roots effort and that opened up horizons that didn't exist and bore fruit in the long run. The Chinese are born to be engineers. It's a story about determination, about finding a workaround that is the human sprit personified. This doesn't seem possible in more 'settled', more regimented societies weighed down by the persistence of hereditary elites or the existence of monopolies where rent accrues to the same families across the generations. As a farmer myself I appreciate that there are lots of uses for a piece of wire.
A good analysis of the evolution of the EV industry in China. Elon has to be gritting his teeth in frustration. And this was accomplished without the leadership of the Party as well. The world is full of surprises. It is all to easy for the US to dismiss the PRC as an authoritarian regime that controls everything but here that does not seem to be the case.
I would say that Chinese people remain grateful to Musk for building the Shanghai Gigafactory. His decision to locate the plant there helped rapidly knit together China’s previously fragmented electric-vehicle supply chain.
When it comes to Tesla, the Chinese government and Musk may be able to maintain a delicate tacit understanding. After all, the two sides have a history of mutually beneficial cooperation—and the Shanghai factory pays roughly $239 million in taxes each year.
The Wall Street Journal recently reported that Musk might sell the Gigafactory to protect his company from geopolitical tensions and "might also come in handy if he proceeds with a SpaceX merger." Beware of Musk bearing gifts. His only loyalty is to himself.
Yes. Western media continues describing China as this monolithic entity with a central control tower, but history and living in China teaches that isn't the case.
Great piece, thanks much. This tells more about China than what is just on the surface.
The consumer-side lesson hiding in this history is refresh speed. Chinese makers iterate model-years the way software ships versions, and even Western EVs now change more year to year than petrol cars ever did. The overlooked consequence lands in the used market: when cars improve that fast, the gap between two adjacent model-years of the same nameplate can be enormous - in range, in charging behavior, and in documented failure rates. Buying a used EV on the badge alone is like buying a laptop by brand and ignoring the generation. I write for evriskindex.com, an independent site scoring 300+ EV model-years on documented failures and recalls, and our Used EV Risk Report exists for exactly that check: https://evriskindex.com/used-ev-risk-report/
Really loved this, didn’t know the history on first Chinese IPO in the US.
Growing up I remember Shanghai taxi used to be all Volkswagen ( the German bet in China, had more faith than the French namely Renaults) now it’s all Chinese EV brands.
While China is indeed a developed country on paper, I argue it will never truly reach that status unless it can absorb its capacity issue internally without going outside.
The nature of sick competition has to change, we can’t have car makers 300 km from each other and every city has one. There is a difference of innovative competition and political gain
Looking around, there is just so so many Chinese carmakers now days. Walking around in Shanghai, there is brand that even local Chinese would know about.
While competition is great and is what any competitive country should encourage within. There is also a level and degree it can’t go too far. In China with an automaker that can be located only 300km from each other… that’s too far. It’s a sick competition that drags the industry into a pricing war rather than innovative solutions. I
This was a really compelling discussion. Great content
China’s EV rise is a great example of what happens when industrial policy, manufacturing scale and intense domestic competition collide. The interesting question now isn’t whether Chinese automakers can compete globally. It’s how much market share everyone else can defend.
Informative read. Thanks!
The EV comparison with humanoid robots is useful, but I think there is one big difference. Being in China from the first attempts at EV, I saw how EVs had a domestic buyer that policy helped create before exports really took off. Remmenber the incentives: no expensive plates , big discounts, and a population who really wanted a car.
Humanoids do not have that buyer yet. A lot of the volume seems to be pilots, universities and demo budgets. Those can disappear quickly.
When you look back at EVs, what was the first sign that demand was real rather than subsidy-driven?
Really enjoyed this, thanks!. I found it especially useful for understanding what sits behind the EV ecosystem I’m now experiencing in China. I only moved here about a year ago, and after roughly three decades of driving petrol cars in different countries, I recently made the switch to an EV after thinking about it for quite a while. From the driver’s seat, it’s easy to see today’s charging networks, technology and huge variety of EVs simply as “how things are” in China. This article gave me a much better appreciation of the rather messy combination of local governments, entrepreneurs, capital and experimentation that actually produced it. Thanks for such a fascinating piece.
Wonderful post. Seems to me that it comes closer to understanding the Chinese way of enterprise than anything I have read. I found myself much amused, had a good laugh here and there at the ingenuity and determination of people to fight their way through the maze. And the Chinese maze is unique. A great story. I do love the fact that Mao could stimulate grass roots effort and that opened up horizons that didn't exist and bore fruit in the long run. The Chinese are born to be engineers. It's a story about determination, about finding a workaround that is the human sprit personified. This doesn't seem possible in more 'settled', more regimented societies weighed down by the persistence of hereditary elites or the existence of monopolies where rent accrues to the same families across the generations. As a farmer myself I appreciate that there are lots of uses for a piece of wire.
They steered toward electrics because at the time competing on ICE was a nonstarter.
Those Chinese characteristics become more fascinating daily. They just might be on to something....