Electric Cars

US Treasury Secretary Janet Yellen was on a 4-day trip to China’s southern city of Guangzhou and capital Beijing. In the recent trip of US Treasury Secretary Janet Yellen to China, the US was concerned about China about to flood the market. China, as we all know, is the manufacturing capital of the world. Its over-production capabilities have resulted in flooding the international markets. Fearing the dominance of EVs, the US is staying vigilant to not let Chinese carmakers into its territory. The EV war between America’s Tesla and China’s BYD has been going on for quite some time now. In the last quarter of last year, BYD overtook Tesla for the highest EV sales worldwide between the September to December period. That was the first time Tesla lost its top spot. However, in Q1 of 2024, Tesla regained the pole position. Still, the concerns regarding Chinese EVs flooding international markets, including the USA, at cost-effective prices are a threat to many countries. You might also like: Tesla Eyeing Indian Factory With Capacity Of 500,000 EVs US Tells China Not To Flood Its Auto Market Yellen mentioned that the massive Chinese government support more than a decade ago had led to below-cost steel flooding the global market, which “decimated industries across the world and in the United States”. She told a news conference at the US ambassador’s residence that, “I’ve made clear that President Biden and I will not accept that reality again.” She held the meeting with her Chinese counterparts Vice Premier He Lifeng and Premier Li Qian for a total of 11 hours. Yellen said she was especially worried about China’s weak household consumption and business overinvestment, “imbalances” she said were “aggravated by large-scale government support in specific industrial sectors.” Needless to say, the Chinese officials countered this allegation. China’s Commerce Minister Wang Wentao called the fears of overcapacity “groundless”. Premier Li told Yellen earlier that Washington should view the matter of production capacity “objectively” and from a “market-oriented” perspective. Beijing had expressed its “serious concerns” to Yellen about the US sanctions, tariffs and restrictions. The two countries have also agreed to open channels for further talks on excess capacity. You might also like: Toyota Hilux Electric Pickup To Enter Into Production By 2025 Learn Electric Cars Says This is a geopolitical situation where the overproduced and underpriced Chinese EVs and other products are threatening to take over various international markets. We have seen how Chinese electric cars are slowly expanding their global footprint. Moreover, they are offering great products with the latest technology, cheaper batteries, and exhilarating performance at incredibly attractive prices. That has been China’s approach since the inception of its globalization. The USA’s concerns are understandable since there would be too much dependency on one country. That has, unfortunately, been the case for the longest time. For instance, the EV battery raw materials and manufacturing largely take place in China. This is similar to the world’s most semiconductor chips being produced in Taiwan. During lockdown, the entire world reeled under the effect of this. Hence, too much dependence on one country for anything is not ideal in today’s world. Every major country is, therefore, focusing on local manufacturing. Utilizing its own resources, technology and labour is the best way to approach the future to become self-reliable. But then again, we live in a world of global connectivity, both physically and digitally. Hence, isolating a single nation won’t be easy. In any case, let us keep an eye out for further developments in this case.

An interesting study from Gartner reveals some insightful findings pertaining to the production of EVs and gas cars. A latest Gartner study reveals that it will be cheaper to produce EVs than gas cars by 2027. Now, EV sales are at an all-time high across the globe. It has been the case for a couple of years now. Even though some reports are suggesting that in some corners of the world, the demand has been lower than anticipated. Still, overall the sales are up. In fact, apart from the biggest markets like the USA and China, the demand is surging exponentially. This includes nations like Brazil, India, Thailand, Turkey, etc. You might also like: Next-Gen EV Batteries From Korean Giants To Be Unveiled At InterBattery 2024 EVs Will Be Cheaper To Produce Than Gas Cars The cost of EVs comprises primarily of batteries. These can be upto around 40% of the total cost of an electric car. While with time, the EV battery prices are going down, the manufacturing costs of the overall EVs are also slated to come down in the immediate future. This report says that its analysis was driven by “innovations that simplify production costs such as centralized vehicle architecture or the introduction of gigacastings that help reduce manufacturing cost and assembly time.” You must’ve heard about gigacastings and gigapresses in relation to Tesla. In fact, the latest Cybertruck is a direct outcome of that manufacturing technique. Many other legacy carmakers like Ford are also experimenting with it. Therefore, it is certain that the future of EV production will incorporate this technique. Gigapresses are able to churn out large single pieces of vehicle underbodies. This enables streamlining production and reduces the work of robots, in turn, boosting the efficiency of production. Pedro Pacheco, Vice President of Research at Gartner said, “This (the new technology) means BEVs will reach ICE cost parity much faster than initially expected, but at the same time, it will make some repairs of BEVs considerably costlier.” You might also like: 1,300 hp BYD YANGWANG U9 Is Ready To Redefine Electric Supercar Segment Downside Of Gigacastings While it is a modern method to improve production capacity and efficiency of manufacturing, it brings a pertinent issue along. In fact, even Gartner expects that the average cost of repairing an EV body and battery after a serious accident could rise 30% by 2027. Gartner stated that this could render vehicles involved in collisions more susceptible to being declared a total loss, as the repair expenses might exceed the residual value. The elevated costs associated with repairing electric vehicles are already a source of worry for prospective purchasers. Gartner warned that there might be a negative reaction from consumers if decreases in production expenses lead to elevated repair costs. Moreover, Gartner anticipates that approximately 15% of electric vehicle companies established since the previous decade will either be acquired or go bankrupt by 2027. These are some concerning findings by the market research firm. Pacheco mentioned, “This does not mean the EV sector is crumbling. It is simply entering a new phase where companies with the best products and services will win over the remaining.” You might also like: Study Shows EVs Can Be More Cost-Effective Than ICE Cars In Some Locations Learn Electric Cars Says Now these are some intriguing facets to the entire EV scenario. On the one hand, companies want to adopt modern techniques to boost production and efficiency of their manufacturing plants. On the other, the increase in repair costs could prove to be detrimental to the overall EV ownership experience for the customers. At this point in time, that could put off a lot of potential EV buyers. Therefore, while the cost of EV manufacturing could go down in the coming years, carmakers need to come up with innovative measures to ensure that customers don’t suffer from high ownership costs. Otherwise, what would be the point of low initial costs of EVs if the owners will then have to suffer due to high repair costs in the long run? Let us keep an eye out for further developments in this space. Image Source