
The $18B Electric-Car Bubble at Risk of Bursting in China - kristianp
https://www.bloomberg.com/news/articles/2019-04-14/the-18-billion-electric-car-bubble-at-risk-of-bursting-in-china
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gniv
A newer and better article on EVs in China:
[https://fortune.com/longform/electric-car-auto-industry-
chin...](https://fortune.com/longform/electric-car-auto-industry-china/)

An interesting tidbit from this article: "One direct result of the meltdown
was the Obama administration’s 2009 economic-stimulus plan, which included
billions of dollars in support for U.S. clean-energy industries. That spending
plan caught the attention of Beijing. And it led, in 2009, to what Ouyang
describes as a “strategic discussion at high levels” in the Chinese government
about how the country should proceed with its own clean-technology push.
China’s State Council, the country’s top policymaking body, ultimately
announced nine “strategic” industries, one of which was electric cars."

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dragonsh
In China this is common when everyone wants to do or appear to do Govt
promoted ideas and schemes to get govt subsidy. [1]

If they do not act in time someone else will get it.

It works somewhat similar to startup world where one raise money with
compelling story, just in this case instead of VC it's govt money. Some
survive and become big, but most fail. Obviously some are outright fraud.

[1]
[https://www.scmp.com/news/china/economy/article/1976825/chin...](https://www.scmp.com/news/china/economy/article/1976825/chinas-
robot-industry-plagued-low-quality-overinvestment-and-too)

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majia
Gov is more likely to be schemed than VC because those who make investment
decision don’t get as much reward/punishment. However, for the same reason,
gov can also invest in projects with long term benefits. So gov is not
intrinsically good or bad; it’s really about good governance.

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Retric
I don’t know if that’s true. Overselling becomes less enticing to these
administrators. It’s really a question if less motivated but more rational
people are better at these decisions.

That said, there is plenty of incompetence, fraud, and corruption to make the
worst on both sides really bad.

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hairytrog
There's tons of performance bike manufacturers with minimal variation. Reason
is its easy - not that many parts, parts easily configured and modular, easy
to build, low maintenance.

Maybe EVs are similar. lower complexity than fossil engines (fewer parts and
complexity moves down the supply chain). Perhaps such a large number of
vehicle producers is sustainable. The real ev companies are the companies
making batteries, motors, and ev base tech.

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incompatible
That would be similar to the dozens of Android phone brands. But new
industries sometimes start that way, but eventually shake out into an
oligopoly.

~~~
ggm
_But new industries sometimes start that way, but eventually shake out into an
oligopoly._ The Herfindahl–Hirschman Index might say that's enough functional
competition to sustain a good outcome. It depends. It's why we have in ICE
engines anyway these days.

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AFascistWorld
Note many of these are just forced by policies to "make" EV if they want to
continue making traditional vehicles, others are just making money off of
policies and subsidies, buyers are mostly forced to buy it due to license
plate quotas.

EVs' reputation in China is going downhill ever faster, it's been called
"electric daddy".

Urban area is extremely dense so it's lucky to find a place to charge where it
hasn't been ocupied, many place refuse to turn on their chargers.

Hope western media can stop praising China's EV industry mindlessly, it's
there coz of artificial markets. Just like farmers are banned to use coal, but
they are never gonna be able to afford the natural gas heaters required to
install.

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rumanator
> Urban area is extremely dense so it's lucky to find a place to charge where
> it hasn't been ocupied, many place refuse to turn on chargers.

Plugging a car to the power grid is just one of many solutions to the problem
of powering a car. There are other ways to solve the same problem, which in
totalitarian regimes with a centrally planned economy are easier to implement,
such as swapping pre-charged batteries.

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693471
Not only are you overlooking the massive size and weight of these batteries
which would make it infeasible to build a battery swapping station in a
smaller footprint than the space required for charging stalls but you have not
addressed what to do about the cooling of the batteries. The Model 3 has
coolant lines going through the battery itself so each battery swap would also
require dumping and refilling fluid.

Nonsense.

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notaki
"Electric-Car Bubble"...

"EV sales make up just 4 percent of overall passenger vehicle sales of 23.7
million units, according to the China Association of Automobile
Manufacturers."

Yup, definitely sounds like a bubble.

Smog is their main problem, and EVs are the solution. Exponential growth will
continue. And I'm tired of these anti-EV/anti-Tesla articles from Bloomberg.

~~~
rumanator
> Smog is their main problem, and EVs are the solution.

They are not _the solution_. They represent a specific way to mitigate the
problem by reducing the output of a very specific type of emissions.

I'd argue that setting up a functioning mass transit network in urban areas
does more to lower emissions than switching powertrains in personal vehicles.

~~~
adinobro
They are already doing this. And building cities out so people down have to
travel as far or come downtown. The busses are the main cities are mainly
electric and more and more cities are betting metro lines.

Most people use bikes or electric bikes to get to the metro or for short
journies (probably at a ratio of 2 to 1) but people still want cars.

In Shanghai and Beijing, you can get an EV instantly but there is a quota for
how many new ICE cars are added each month which means you go on a waiting
list.

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r00fus
This article seems light on numbers and high on assumptions.

Plus what if the consolidation is expected? I mean during the formative days
of ICE cars there were way more manufacturers than today...

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xster
HN is turning into r/china these days

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duxup
> 486 EV manufacturers registered in China

That's an incredible amount. I can't imagine the complexity of managing
engineering a car, manufacturing, sourcing everything needed.

That's a lot of very ambitious people.

~~~
tempsy
I think you’d have to be fairly naive to believe the tech was all developed
in-house, especially in China.

~~~
chiefalchemist
Let's say you're half right. Or even 75% right. Or even 90%. That's still a
lot of EV companies.

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aniijbod
Here's my few cents worth. I think this article has got things back to front.
Sure, there may be a bubble, but it's nowhere near bursting. Yes, there are
fast growth rates predicted for EVs, but they still account for reaching a
very small proportion of the overall vehicle market for quite some time.
There's every reason to believe that things may change much more dramatically,
much more quickly. If this proves to be the case, there is an equally good
chance that the number of EV makers could increase equally spectacularly
before there is any kind of consolidation in terms of numbers of players.
History shows that when we started the journey from horses to automobiles,
there was at least one small independent car maker in countless towns and
cities at a time when the lack of experience, standard parts or skills meant
that the vehicles you built were nowhere near as likely to be reliable or
durable as just about any electric car you could build yourself today. In
those days it was a challenge to start designing and building a new car
(ironically it was almost as likely in the early days that the car engine
design would be based upon on electric, steam, gasoline, natural gas or
diesel) but today it's actually relatively easy to design and build a car
factory. Ok, differentiation might be a challenge if you are going for a low
cost market, but guess what, history tells us that localism counts for a lot
in nascent automobile markets and 'staying profitable' for a small
manufacturer where production costs are as low as they are for making electric
vehicles using mostly standard parts may mean that the bubble is going to get
a lot bigger, a lot faster and the burst, when it arrives, will probably be
much more like a slow leak in a worn-out tire.

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wetpaws
Seriously, is there anything in China nowadays that is not a bubble?

~~~
ggm
Selling goods to the USA, and wine. Chinese red wine is pretty good. Bad wine
has this habit of not succeeding.

