Auto File: Chinese EVs - To Russia With Love
02/07/2024 16:00
July 2 - By Nick Carey
European Autos Correspondent
Greetings from London!
Thursday will see a fiesta of more costly grilling and fireworks
across the pond as Americans celebrate July 4, by when car
industry technology provider CDK has promised to have U.S. car
dealers back on management system, two weeks after a
cyberattack. But that has not come soon enough to prevent
lawsuits against CDK.
In Europe, some in the auto industry will cast a wary eye on
Britain’s general election on the same day, where a likely
Labour Party government faces some of the biggest challenges
since the end of World War Two.
Many will also watch the horse trading between French political
parties attempting to prevent Marine Le Pen's far-right
National Rally (RN) forming a government after historic gains in
the first round of the country’s parliamentary election.
But automotive-focused minds will be far more interested in a
report expected from the European Commission by July 4 detailing
the findings of its investigation Chinese government subsidies.
The Commission has already announced provisional duties for
Chinese EVs, initially sparking threatening language from
Beijing that this would cause a trade war. But China now says it
hopes talks will lead to a "mutually acceptable solution" with
the EU.
What could possibly go wrong?
Which brings us to today’s Auto File…
* Chinese EVs dominate in Russia
* VW’s bet on Rivian
* BeyonCa to make EVs in Hong Kong
Russians say “Da” to Chinese EVs
Chinese EV makers have benefited from the exodus of foreign
automakers since Russia’s 2022 invasion of Ukraine, taking a big
chunk of what is still a small but rapidly growing market – and
none more so than Geely-owned premium brand Zeekr, which is
leading the charge.
Chinese automakers now make up more than half of Russia’s car
market and while the U.S. government and European Commission
have announced tariffs on Chinese-made EVs, Russia has embraced
them to help prop up its car industry.
EVs face a lack of charging infrastructure across the vastness
of Russia, but more electric cars sold there in the last 12
months than in the entire last decade. More than 20,500 EVs sold
in Russia from May 2023 to April 2024, a jump of about 350% on
the previous year.
The Russians have or are developing their own EVs, including the
Evolute i-Space from private firm Motorinvest, the Moskvich 3e,
an attempt to resurrect a Soviet-era classic, and the Lada
e-Largus from Russia's leading carmaker Avtovaz.
But the Moskvich highlights the supply chain challenges Russia
faces in trying to build its own cars. Although listed as
Russian in the statistics, it is being assembled in Moscow with
kits from a Chinese partner.
Case in point, the Russian-made Aurus limousine Russian
President Vladimir Putin and North Korean leader Kim Jong-un
rode in around Pyongyang last month to showcase their
strengthened anti-Western alliance was made using imported parts
from what Kim has described as his country's "primary foe",
South Korea.
Recommended reading:
* VW’s Blume steers an EV strategy shift
* Rivian’s tough road to profit
* AI-focused companies on a tear
VW, or Rivian, to the rescue
Volkswagen’s planned investment of up to $5 billion in U.S.
electric-vehicle maker Rivian as part of a new, equally
controlled joint venture to share EV architecture and software,
highlights the challenges for the legacy automaker and the
relative newbie alike.
VW’s own software unit Cariad has so far not been up to the task
of developing EV tech inhouse, so after secretly testing
camouflaged Audis at Rivian’s Palo Alto, California, facility,
the company decided the U.S. startup was worth a shot after
doing the same in China with Xpeng.
Like other relative EV newbies Rivian has been burning cash as
it tries to build profitable cars at scale, which the automaker
says will come with a lower-cost second generation of EVs.
Other startups like Fisker, Proterra, Lordstown and Electric
Last Mile Solutions have all filed for bankruptcy and
Geely-controlled Polestar’s latest loss illustrates that getting
to profitable mass-production takes years and vast piles of
cash.
Lest we forget, to hit Model 3 production targets in 2018, Tesla
had to build a new assembly line in a huge tent outside its
Fremont, California factory.
Rivian has more cash and backing to get there, but it still
won’t be easy.
Yet another new EV brand…
Stop me if you’ve heard this story before, but an EV startup,
BeyonCa, plans to set up a final assembly plant and its
international headquarters in Hong Kong.
The premium EV maker, backed by Renault and China’s Dongfeng
Motor, with some potential interest from Riyadh-based Al
Faisaliah Group Holding Company.
BeyonCa's founder and chairman Weiming Soh said the company
aimed to sell 100,000 EVs annually with three to five models
available within a timeline of "a few years after 2025."
China has a surfeit of EV brands, with some zombie automakers
already now producing nothing. Global EV demand has weakened and
competition for sales is going to be fierce.
BeyonCa does have backers. But as noted above, making EVs at
scale involves burning cash for years, so it will be interesting
to see how much more we hear of BeyonCa.
Tesla sales drop again
Tesla’s sales fell 5% in the second quarter, though not as much
as analysts had expected.
This is the first time the world’s top EV maker has experienced
two consecutive quarters of decline as it deals with stiff
competition and a fierce price war in China, coupled with slow
demand due to a lack of affordable new models.
To illustrate the scale of the EV maker’s ongoing challenge, BYD
on Tuesday posted a 21% jump in second-quarter sales, though
Tesla outsold its Chinese rival for the second consecutive
quarter.
Meanwhile, Tesla continues its court battle for Elon Musk’s $56
billion pay package, after shareholders voted for it a second
time last month.
Fast Laps
A U.S. Supreme Court decision limiting federal regulatory powers
to interpret ambiguous laws could undermine President Joe
Biden's effort to cut tailpipe emissions from the nation’s
vehicle fleet, two environmental law attorneys told Reuters.
Toyota plans to launch its first electric car model equipped
with an advanced autonomous driving system similar to Tesla’s
Full Self-Driving for the Chinese market next year, according to
Chinese joint venture partner Guangzhou Automobile Group (GAC).
Renault's electric vehicle unit Ampere will include lithium iron
phosphate (LFP) technology in its plans to mass produce EVs,
teaming up with LG Energy Solution (LGES) and CATL to build
out a supply chain in Europe.
Four of Japan's top property and casualty insurers and other
financial firms plan to sell around 500 billion yen ($3.1
billion) of shares in Honda Motor, three people said, as the
unwinding of cross-shareholding practices accelerates.
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(Editing by Alexander Smith)