
China Has Whole Towns Focused on Making Electric Cars - pseudolus
https://www.bloomberg.com/news/articles/2019-06-02/china-s-spending-30-billion-to-assemble-its-electric-detroits
======
dhruvrrp
I remember reading a few months (?) ago that China was looking to consolidate
the electric vehicle industry because the government incentives led to 500+
manufacturers who like to "move-fast and break things" and caused problems
like vehicle fires.

imo that would mean a lot of these towns wouldn't be in business for very
long.

Edit: found the discussion
[https://news.ycombinator.com/item?id=19617681](https://news.ycombinator.com/item?id=19617681)

~~~
seanmcdirmid
There was also lots of subsidy fraud, where low value manufacturers would
crank out what we’re basically golf carts and then indirectly collect part of
the subsidy via a process similar to money laundering.

~~~
baybal2
I do remember years of "the solar boom," when just having word solar in
company name enough to secure an effectively unconditional $3m grant.

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melling
More global R&D is a great thing!

Hopefully, India soon joins in. Their economy is starting to grow like
China’s. Between the two, that’s 1/3 of the world’s population.

~~~
panpanna
Tata is already fairly big, you just don't see their cars here.

~~~
chrisjc
Where is here? I assume you mean either China or USA?

Anyways, Land Rover and Jaguar are Tata brands and present in both the above.

~~~
panpanna
Tata has homemade cars too, really cheap ones even. You never see them here in
West.

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olivermarks
The more important Bloomberg link is about the EV bubble
[https://www.bloomberg.com/news/articles/2019-04-14/the-18-bi...](https://www.bloomberg.com/news/articles/2019-04-14/the-18-billion-
electric-car-bubble-at-risk-of-bursting-in-china)

~~~
Shivetya
I would be more concerned with a softness in the market outside of China.
While we are still a few years away from a better selection EVs it does not
mean they will spur higher sales. Tesla sells by reputation alone but other
than them only Chinese brands have any good volume.

The market may constrain them to 200+ EPA ratings which will keep the price
high. What we have not seen in the US is a mid 100 mile range car (130-160 or
such) at a much lower price. I would be curious if such a car in the low 20k
starting range would work?

~~~
AstralStorm
Tesla does not have a good volume, even compared to something like Nissan
Leaf, much less hybrids.

------
emoticoji
Hopefully we won't see any tariffs on them in US/Europe. Or am I too late with
this hope?

~~~
GeekyBear
It might interest you to know the sort of restrictions China has been placing
on Tesla.

>[Musk] said China puts a 25 percent import duty on American cars, while the
U.S. only does 2.5 percent for Chinese cars. He added that no American car
company is "allowed to own even 50% of their own factory" in the Asian
country, but China's auto firms can own their companies in the U.S.

[https://www.cnbc.com/2018/03/08/elon-musk-sides-with-
trump-o...](https://www.cnbc.com/2018/03/08/elon-musk-sides-with-trump-on-
trade-with-china-citing-25-percent-import-duty-on-american-cars.html)

~~~
hangonhn
It's not just car companies but foreigners cannot own the majority of ANY
company. I can understand why China did this because they don't want to end up
like many of the developing countries where most of the economic engines of
their country are owned by foreigners. You see this happening in the "banana
republics" of the world. It also has the benefit of implicitly forcing
technological transfer when it is coupled with high tariffs on imports.
Foreign companies end up "partnering" with locals to avoid the tariffs but the
joint company is ultimately Chinese majority owned. It's hard to argue that
these policies have not benefited the Chinese or at least prevent some of the
downsides of economic liberalization and "free" trade.

With all that in mind, however, other countries would be fools to allow this
sort of economic asymmetry to continue. Especially at this point, when China
is the second largest economy (and largest when adjusted by PPP), China
doesn't need this kind of protection and is simply not playing fair. I don't
know if tariffs are the best way of leveling the playing field but some sort
of rebalancing and leveling of the playing field must happen because otherwise
it is simply a rigged game.

There is even a very good argument that can be made that direct, unfettered
foreign investment now would benefit China given its large consumer base with
money to spend. Otherwise, the Chinese consumer is simply indirectly
subsidizing Chinese corporations who made not have to compete as hard because
of these protections.

~~~
zhte415
> foreigners cannot own the majority of ANY company.

This is incorrect, and has not been the case for a very long time, please
don't spread FUD.

Wholly Owned Foreign Enterprise [https://en.wikipedia.org/wiki/Wholly_Foreign-
Owned_Enterpris...](https://en.wikipedia.org/wiki/Wholly_Foreign-
Owned_Enterprise)

~~~
hangonhn
Except you left out the really important restriction that they cannot directly
sell to domestic Chinese market. So they're still subject to import tariffs.
In fact there's a whole industry of consultants who specializes in helping
these companies "export and import" their goods back to China. I guess they
may save on the shipping costs and employ cheaper Chinese labor. But the whole
point of companies opening factories in China is to be able to sell to the
huge Chinese consumer market without being hit by tariffs.

~~~
zhte415
WFOEs can sell to Chinese businesses, consumers, government (and they can sell
overseas, and overseas companies can sell to WFOEs or domestically).

There's a lot of circularity in your comment.

A company can be wholly foreign owned.

A foreign owned company can sell in China, it can declare tax and issue
receipts, employ people, rent office or factory space, build a building, the
whole hog.

I'm not sure where what niche you are in regarding import/export taxes,
opening factories, and employing cheap labour all in one gulp of air.

Wholly foreign owned companies in China are legal entities and have been for a
long time, your comment "foreigners cannot own the majority of ANY company" is
factually wrong and is FUD.

Do you have an agenda with these comments? Please don't make HN political.

~~~
hangonhn
My comment wasn't as precise/nuanced as it should have been but was meant as
an add-on of the parent's comment. What I meant is that the ownership
restriction doesn't just apply to car companies but other industries as well
-- although I do see now how that could have been read differently.

WFOE cannot sell directly to Chinese consumers. The way WFOE sell to the
Chinese domestic is essentially by "exporting" and "importing" its own
products again, thus subject to taxes on such activities ( [https://www.set-
up-company.com/joint-venture-vs.-wfoe:-which...](https://www.set-up-
company.com/joint-venture-vs.-wfoe:-which-is-a-better-option-for-establishing-
a-business-in-china.html) \-- "Scope of Business" Wish I could find a better
source on this). A friend of mine interned at one of these firms that
basically specializes in these creative "re-import" businesses but I don't
know what these firms are called.

Not sure why my comments generates such a reaction from you that you accuse me
of FUD or being political. It's certainly not intended as such. I study
Chinese history as a hobby, especially modern history. I have friends and
family who do business in China (and own businesses in China). My comments
were intended to add more information and background to the original comment
by combining what I've read and what I've heard. But sometimes intentions and
outcomes don't match up. Apologies if my comments injected too much of my own
perspective on the subject.

~~~
zhte415
> WFOE cannot sell directly to Chinese consumers.

Well, I can open up a sandwich shop. A foreign owned entity will indeed
probably get scrutiny. A couple of friends have shops selling sandwiches (one
toasted, one pizza type). They are WFOEs!

I don't sell sandwiches. I mainly work in tech, finance and HR (generalist, I
suppose). Some industries are controlled, even in another reply someone
mentioned Tesla's plant is 100% owned. If waving fans, I have been in China
(mainland) for two decades.

What you type about ownership rules is utterly incorrect. You don't seem able
to drop the ball.

Edit: I'm going to drop the ball here and discontinue this. I wish you a good
day.

------
molteanu
This, together with this comment _[..] especially in the German speaking part
of Europe, are still run like factories, barely have flexible working hours
and don 't even want to hear about remote work as managers prefer having a
close eye on employees at all time._ from a previous HN discussion [1], has
made me wonder if there is any Chinese market for remote SW developers from
the other parts of the world.

It seems like the Chinese run at the speed of light these days while I'm still
left to do Jira's and time sheets and bug hunting and colleagues that are
really not that interested in anything software related at the same old 9-5
job.

Is China a viable alternative? Do you have any experience working with Chinese
companies, startups, sw shops, etc?

[1]
[https://news.ycombinator.com/item?id=20082232](https://news.ycombinator.com/item?id=20082232)

~~~
stickfigure
_It seems like the Chinese run at the speed of light these days_

What native Chinese-built software products have done well outside of China?

~~~
londons_explore
Tiktok

~~~
CharlesColeman
Though that seems to have been built on the back of a massively expensive
advertising blitz:

[https://www.bloomberg.com/news/features/2019-04-18/tiktok-
br...](https://www.bloomberg.com/news/features/2019-04-18/tiktok-brings-
chinese-style-censorship-to-america-s-tweens):

> ...[Bytedance] is spending hundreds of millions of dollars to advertise on
> Facebook in the hope of luring away more users. Over the past three months,
> for instance, 13 percent of all the ads seen by users of Facebook’s Android
> app were for TikTok, says app-analytics firm Apptopia.

That's been their MO in China as well. IIRC, the mainland Chinese version,
Douyin, was being heavily and repeatedly promoted with the Chinese equivalent
of ads during the Superbowl.

~~~
chillacy
Remember when Venmo

------
matthewdgreen
It's amazing watching the Chinese Communist Party systematically target,
succeed in, and gain dominance in these industries -- industries that any
idiot can see are going to be critical to the global economy within a couple
of decades max. Meanwhile trillions of investment dollars available in the US
are busy chasing Juiceros.

~~~
sametmax
It helps to be a dictatorship that can force anybody to do what they want, and
send to camp people that don't. It also helps to have millions of cheap
workers, and a gigantic, rich, soil. And it's easier if you not care about
destroying everything in your way.

Still.

It's impressive for exactly the same reasons. It's hard to foster an
intellectual elite in a dictatorship, to maintain motivation and cooperation
across a gigantic country and 1.7B of people.

Beside, we did the same: polluting, forcing population to work, etc, only 100
years before, but we attacked other countries while doing so. Which China
haven't. And about this pollution thing, they seem to correct trajectory
faster than we did, given their timeframe and inertia.

It's amazing to watch.

~~~
Bakary
>It's impressive for exactly the same reasons. It's hard to foster an
intellectual elite in a dictatorship, to maintain motivation and cooperation
across a gigantic country and 1.7B of people.

On the contrary you could argue that the brutal competition in the country
encourages people to be razor sharp in some fields.

A more controversial and touchy point is that they have a strong sense of
national and ethnic unity, which many democracies lack. This has many
disadvantages of course,[0] but can be extremely helpful for maintaining
cooperation and motivation at a large scale whereas the West arguably has
trouble dealing with ennui and lack of purpose. To some extent the form of
functional ethno-nationalism China has is hard to reproduce elsewhere, and is
the result of very specific historical and geographical factors. Japan and
Turkey for instance have similar traits but nowhere near the same results. So
China is tautologically highly suited to doing what it is currently doing.

[0] [https://www.economist.com/briefing/2016/11/19/the-upper-
han](https://www.economist.com/briefing/2016/11/19/the-upper-han)

~~~
sametmax
I wonder what built this, becauqe clearly it's not new. China use to do it
2000 years ago too.

~~~
Bakary
You could spend your entire career on this topic and still never find the
answer, but this article gives a nice summary of some of the factors.

[https://worldview.stratfor.com/article/evolution-chinese-
nat...](https://worldview.stratfor.com/article/evolution-chinese-nationalism)

------
mrbanks
Good

------
NTDF9
Meanwhile in the US, coal is supposed to be making a comeback, Tesla is close
to bankruptcy, solar industry is decimated and we're force-sending smart
people out of the country when we need them the most to build stuff like this.

~~~
mncolinlee
No amount of Trump insisting on saving coal will save it at this point. We've
hit an inflection point where wind and solar are getting to be cheaper and
it's less risk to place a turbine or panel. Barring new coal subsidies or
taxes on renewables, coal won't grow in the US.

Tesla isn't having a great look on Wall Street, but that's because investors
priced them as a tech company instead of a car manufacturer. They're having
demand issues, but they'll adjust and markets will adjust the way they price
Tesla shares. They still had no trouble raising funds despite serious new
direct competition.

Solar is making huge international wins from cheaper, non-domestic
manufacturers, including a few of the first massive installations to come in
cheaper than coal.

Immigration is a real issue, of course, but a lot of companies have adjusted
by opening R&D offices in Vancouver to be close to the border and the time
zone of US tech offices.

~~~
StreamBright
If you are comparing solar and wind to coal you are missing the point by
10.000 miles. Coal is base load energy, wind and solar is for peak. You cannot
control when the wind blows and over night there is no solar energy. You
cannot store a large amount of energy (at least without massive destruction of
land). Combining these, you need base load power plants, options: coal,
nuclear. In some countries water could be a small fraction of the base load (I
think Austria does that). If you have enough wind and solar you can use them
to help out with peak but the same amount of fossil peak load has to be in
your system as much as wind you got because something has to counter balance
the fluctuation wind means. Options for peak load: wind, solar, oil or gas
turbines.

[https://en.wikipedia.org/wiki/Base_load](https://en.wikipedia.org/wiki/Base_load)

[https://en.wikipedia.org/wiki/Peak_demand](https://en.wikipedia.org/wiki/Peak_demand)

~~~
icebraining
I'm no expert, but I bet base load is mostly an artifact of having fossil
fuels, not a reason to keep them around.

When you have cheap storage in the form of coal or oil barrels, it makes sense
to just use energy whenever. But that will change - people will change their
behaviors and business processes to adapt to the new conditions. Energy-
expensive activities will become asynchronous - programmed to run whenever
energy is cheap. Guaranteed energy - knowing you'll have a certain amount of
kWh to spend at a specific time - will be expensive, and will be mostly used
for prioritizing when the production is low.

Once your real base load drops enough, you won't need much storage to keep up
even when production is abnormally low. Keeping a coal plant for the rare
situations in which storage isn't enough, simply won't be economical. A natgas
plant is more likely.

~~~
StreamBright
I only have a degree in this but you know nowadays on Hn anything goes.
Regardless if I literally quote wikipedia about the subject, there are people
who know better. Based on this, base load is dead, long live solar + wind!

~~~
icebraining
No offense intended. I did preface by saying I'm no expert. I'm basing my
opinion on what I've read by some people, such as:

"What we need for this fluctuating renewable energy in the electricity mix is
not baseload. Baseload is poison for our electricity transition in Germany,"
\-- Thorsten Herdan, a director general for energy policy at the German
Federal Ministry for Economic Affairs and Energy

"The idea of there being an average or 'base' electricity load, doesn't make
sense. Let alone having this sort of big, slow-changing power station to meet
that load," \-- CSIRO Energy Director Dr Glenn Platt.

"Technology has moved on from base load, and now you want flexible power. And
that's what demand management, batteries and pumped hydro is," \-- Professor
Andrew Blakers, director of the ANU Centre for Sustainable Energy Systems.

And reports like Brattle Group's "Advancing Past “Baseload” to a Flexible
Grid", and a few more which I have forgotten the name of.

And of course, knowing about the tech (IoT and such) that enables real-time
communication of energy prices. And finally, my own guess that people will
change their behaviour if it hits their wallet.

Sorry if I misread or got the arguments wrong.

~~~
StreamBright
None taken. You are quoting politicians and their wishful thinking here. Of
course, they say what you want to hear.

I could answer you by writing a very lengthy essay, but I do not have the time
or motivation to do that. Instead, if what they are saying is true why does
Germany has 7 outs of 10 of the worst CO2 producing sources in the EU all of
them are coal power plants?

[https://infographic.statista.com/normal/chartoftheday_17582_...](https://infographic.statista.com/normal/chartoftheday_17582_megatonnes_of_co2_equivalent_in_the_eu_n.jpg)

The answer is: German mass hysteria made the country to turn off its nuclear
power plants (you know, the other type of base load power plant that does not
produce CO2) while not having any other option because renewables are not
going to give you enough power. As a result they run on coal.

Lets add to the mix of the price of doing that:

[https://ibb.co/rvJ1Wb2](https://ibb.co/rvJ1Wb2)

So to sum it up, Germany produces the most CO2 in the EU and having the most
expensive energy price by a large margin. This happens when you try to bend
reality to your ideology instead of facing the challenges of our world and try
to solve it.

It should be clear at this stage that without serious advencement in storing
energy you cannot have a green solution to our energy needs. My prediction to
the future, we are going to use solar + nuclear in the future because the
combination of these two gives the best option of humanity and also because
these work in a setup when you need the energy in space.

