Sky's Ed Conway explains how the rest of the world was caught napping in the electric vehicle race, which means our car prices and auto industry jobs are within China's grip.
A very comprehensibly written article that sums up the whole ordeal.
Besides everything else, labour costs are incredibly hard to compete with, especially because China makes use of forced labor. But even without considering Chinas advantage of labor costs, material and distribution costs are cheaper than they are at VW.
The unfortunate thing is that Chinas attempted to take over the whole distribution chain - from mining the resources to producing the final product - rather early, under the eyes of current traditional car manufacturers, who were, and still are, more interested into short term profits. Now, that China controls a huge part of the distribution of resources, everything falls apart for traditional car makers, as their cars are neither tailored to the needs of the customers nor are they affordable any more. Additional to that, less labor is needed to make an electric vehicle.
The automotive market has been overtaken by China, and that came with an announcement (VW for example was only allowed to operate in the Chinese market when they made a joint venture with the Chinese, meaning the transfer of know-how and expertise). Established car manufacturers didn’t want to listen or counteract against it, because short term profits are easier to maintain and have little risk compared to investing into new technologies.
WHO would have thought that buying all the components from China would turn out to be a bad idea? Once all the components are outsourced, they will just build the whole car cheaper than the original oem.
A very comprehensibly written article that sums up the whole ordeal.
Besides everything else, labour costs are incredibly hard to compete with, especially because China makes use of forced labor. But even without considering Chinas advantage of labor costs, material and distribution costs are cheaper than they are at VW.
The unfortunate thing is that Chinas attempted to take over the whole distribution chain - from mining the resources to producing the final product - rather early, under the eyes of current traditional car manufacturers, who were, and still are, more interested into short term profits. Now, that China controls a huge part of the distribution of resources, everything falls apart for traditional car makers, as their cars are neither tailored to the needs of the customers nor are they affordable any more. Additional to that, less labor is needed to make an electric vehicle.
The automotive market has been overtaken by China, and that came with an announcement (VW for example was only allowed to operate in the Chinese market when they made a joint venture with the Chinese, meaning the transfer of know-how and expertise). Established car manufacturers didn’t want to listen or counteract against it, because short term profits are easier to maintain and have little risk compared to investing into new technologies.
WHO would have thought that buying all the components from China would turn out to be a bad idea? Once all the components are outsourced, they will just build the whole car cheaper than the original oem.