No Country For Old Automakers. Companies < 30 years now crushing it in China’s auto market. 2024 China Sales (f) BYD: 3.9 million Tesla: 680,000 Li Auto: 600,000 Huawei: 500,000 Zeekr: 230,000 Xpeng: 180,000 Xiaomi: 130,000 (in first year) > All double digit growth in a flat overall market. > All Chinese + Tesla. > Many of their most important suppliers come from the electronics industry. It’s a new game. #chinaevs #tesla #byd #xiaomi
A lot of attention understandably on the brands, and meanwhile how do you see the situation for the Tier 1 and Tier 2 suppliers in PRC? There has been a tremendous build up in the ecosystem and supply chain particularly since 2001 in automotive, and what is happening today? Cash Flows, profitability, employees, R&D, CAPEX, long term perspectives ??
Which western car makers will go?
It’s a new industry
It is similar to the US market with one player way ahead of the rest. But BYD is killing it.
My goodness, your predictions and analysis have been proven right on China’s car industry Michael.
When we look at EV manufacturers in China, comparing Tesla with Chinese manufacturers is never a good comparison. Tesla is priced at the Mid and high end of EVs whereas the majority of the EV sales by Chinese manufacturers are driven by entry level and that includes BYD. More importantly, Tesla count sales like the rest of the world at customer level but all Chinese manufacturers counts sales at dealers level which is distorted by pricing and inventory financing incentives provided to dealers. More importantly, Tesla accounts for 39% of all EV exports from China and that’s without subsidies directly or indirectly as enjoyed by all Chinese EV manufacturers.
Tesla is one thing but openly state sponsored, mercantilist car makers are quite another. If Western nations poured billions (with zero expectation of profit) to dominate an industry, I'm sure you'd see similar numbers. Comparing car makers that get infinite cheap loans and are commanded to take over an industry with normal businesses is difficult. You could even argue that Tesla has more or less been a government-sponsored effort (carbon credits) so far with attendant strong results.
Young people want new tech, they don’t care for brands. Similar to Japan in past. Most of these New manufacturers are making high debts, buying market share. This won’t continue, established will rebound. Matter of time and money …..
Agreed and the legacy Auto companies still don’t understand how the hell this happened so fast ? There is not a single manufacturing industry they will not dominate, wind, solar, nuclear, microchip, WiFi, operating systems etc etc. At first they copied and now the others are forced to copy them but pride gets in the way.
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1wGreat insight into the market. To clarify, Tesla also grew sales in China? I had the impression that Tesla was also seeing a decline of their China market share, but perhaps I am mistaken.