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<ul class="summary-list"><li>Germany's automotive industry is facing an increasingly difficult outlook.</li><li>Volkswagen may close factories in Germany for the first time, and BMW and Mercedes-Benz are struggling.</li></ul>Germany's car giants were once the envy of the world, but now find themselves facing a myriad of threats.BMW and Mercedes-Benz have issued profit warnings in recent weeks amid <a target="_blank" class="" href="https://www.businessinsider.com/ev-sales-europe-slumping-warning-sign-us-2024-9">slumping EV sales in Europe</a> and <a target="_blank" class="" href="https://www.businessinsider.com/chinas-electric-vehicle-market-could-face-a-brutal-reckoning-2024-5">brutal competition in China</a>, while Volkswagen is <a target="_blank" class="" href="https://www.businessinsider.com/volkswagen-considers-closing-factories-germany-job-salary-cuts-autos-2024-10">also facing a reckoning</a>.On Wednesday VW said net profit for the three months to September 30 plunged by almost 64% to 1.57 billion euros, with a 30% decline to 12.8 billion euros for the first nine months of the year. A 4% rise in vehicle sales in North America and 16% growth in South America for the nine months was offset by a 1% decline in western Europe and a 12% slide in China — VW's biggest market outside Europe. It now expects to deliver about nine million vehicles this year, or about 240,000 fewer than 2023.Volkswagen is seeking to cut billions in costs after issuing two profit warnings in three months. On Monday, its top union official said the company was planning factory closures in Germany for the first time, along with pay cuts and layoffs. The Golf and Polo maker is one of Germany's biggest employers with about 300,000 workers.Mercedes-Benz is also <a target="_blank" class="" href="https://www.businessinsider.com/mercedes-benz-sliding-ev-sales-and-weak-demand-in-china-2024-10">pursuing "cost improvements"</a> after last week's lackluster earnings, while BMW stock has been hit by the recall of some <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/bmw-recalls-1-5-mln-vehicles-over-braking-system-issue-1033765005">1.5 million cars over a braking issue</a>.<div type="image" title="New Volkswagen cars at a factory" height="2574" width="4625" msid="114777386" hostid="261" sizebytes="794156"></div><h2 id="58206ab8-4040-4a0f-ac1e-b07e60c53b6a">Fight for survival in China</h2>All three giants face a similar problem: they're no longer selling enough cars in China, the world's largest car market and a one-time cash cow for European automakers. About 21.7 million new vehicles were sold in China last year, per the China Passenger Car Association figures, compared with about 15.6 million in the US and 10.5 million in Europe.Like VW, BMW and <a target="_blank" class="" href="https://www.businessinsider.com/mercedes-benz-sliding-ev-sales-and-weak-demand-in-china-2024-10">Mercedes</a> also reported a slide in sales in China in the third quarter, amid waning demand for luxury vehicles and the growing dominance of Chinese EV makers.<div type="image" title="BYD Yangwang U8" height="4093" width="6140" msid="114777389" hostid="261" sizebytes="1395046"></div>Helena Wisbert, professor of automotive economics at Ostfalia University in Germany, told Business Insider: "BMW and Mercedes are selling fewer cars, because the new players in the market for EVs have become really competitive, especially in China."Wisbert said that German manufacturers have failed to anticipate the changing behavior of Chinese consumers and diversify their product lines. She added that Mercedes, BMW, and Volkswagen offer comparatively few hybrid and <a target="_blank" class="" href="https://www.businessinsider.com/extended-range-electric-vehicles-erev-gas-generator-range-anxiety-2024-8">extended-range vehicles</a> — categories that have proven extremely popular in China.European carmakers are under intense pressure from Chinese rivals such as <a target="_blank" class="" href="https://www.businessinsider.com/ev-electric-vehicle-china-brands-byd-nio-wuling-zeekr-geely-2023-5">BYD, Nio, and Xiaomi</a>, which offer luxurious EVs vehicles with better <a target="_blank" class="" href="https://www.businessinsider.com/chinese-ev-makers-battle-for-market-dominance-with-smart-features-2024-5">software experiences</a> — and all at far lower prices.<div type="image" title="Chinese customers assess the Xiaomi SU7 at a flagship store in Shanghai, China." height="2800" width="4200" msid="114777392" hostid="261" sizebytes="344146"></div>To make matters worse, some Chinese automakers are now eyeing expansion in Europe, even with <a target="_blank" class="" href="https://www.businessinsider.com/chinese-electric-vehicles-european-tariffs-retaliation-vw-bmw-mercedes-tesla-2024-10">the European Union planning tariffs on BYD and its rivals</a>.Wisbert said the brand strength of BMW and Mercedes in Europe gave them a crucial advantage over Chinese interlopers — but added that VW would likely face competition from Chinese brands that can build and sell EVs far more cheaply. "In the long run, it's a big threat, especially for Volkswagen."<h2 id="4b4f7370-2052-4695-8ad7-e34b879663db">Slow sales in Europe</h2>At the same time, Germany's automakers are also dealing with a slowdown in EV sales in Europe.Mercedes said last week that <a target="_blank" class="" href="https://www.businessinsider.com/mercedes-benz-sliding-ev-sales-and-weak-demand-in-china-2024-10">sales of battery-powered cars</a> fell 31% in the third quarter compared with the same period last year, while deliveries of Volkswagen Group EVs in Europe were <a target="_blank" class="" href="https://uploads.vw-mms.de/system/production/files/cws/040/668/file/151d368085a7d93bdc93358b5dc3bc7714ea72d0/20241011_Deliveries_Tables_icl_BEV.pdf?1728635690">down 12% in Q3</a>.Demand for electric vehicles has slowed in Europe amid a lack of affordable options and the end of subsidy schemes in some countries, including Germany, where new EV deliveries <a target="_blank" class="" href="https://www.businessinsider.com/ev-sales-europe-slumping-warning-sign-us-2024-9">plunged by 69% in August</a>."The European market has failed to return to health as quickly as hoped post-Covid," Matthias Schmidt, an independent auto analyst based in Germany, told BI in an email."That is causing an over-capacity and under-utilisation problem leading to the need for restructuring across European operations, alongside new market entrants such as Chinese carmakers and Tesla increasingly eating up market share."<div type="image" title="Union workers rally outside a Volkswagen plant" height="5464" width="8192" msid="114777385" hostid="261" sizebytes="1564854"></div>Wisbert said that despite Volkswagen and BMW starting to sell battery-electric vehicles more than a decade ago, German companies failed to make EVs their "focus" and are now losing out to rivals such as Tesla and BYD that can build and sell electric cars more cheaply."They missed the chance to get the cost for the battery under control. That's the problem because their competitors can sell cars at a really low price level because they have the battery cost under control," Wisbert said.She warned that attempting to save money by scaling back EV plans would render German carmakers even less competitive in the future. Volkswagen and Mercedes have both adjusted their EV strategies and pushed back targets in recent months as sales stagnate."Right now they're cutting their plans for future investment — and that's not the best way to stay competitive in the future," said Wisbert.Investors are also sounding the alarm, sending Mercedes-Benz shares down more than 11% this year, with BMW sliding 28%. VW, meanwhile, is down about a fifth this year, and close to half the stock price of October 2019. Analysts at UBS have a "sell" recommendation on the stock, and the potential cost and disruption that could be sparked by a "major restructuring."VW, Mercedes, and BMW did not respond to requests for comment from BI.

Volkswagen stumbles in China as Germany's auto giants struggle to compete in the EV race

<ul class="summary-list"><li>Chinese EV startup Xpeng is relishing the prospect of testing its tech against Tesla.</li><li>Like other Chinese EV companies, Xpeng is blocked from entering the US market by tariffs.</li></ul>One of <a target="_blank" class="" href="https://www.businessinsider.com/tesla">Tesla's</a> biggest Chinese rivals is welcoming the prospect of a tech battle with the automaker after being blocked from the US by <a target="_blank" class="" href="https://www.businessinsider.com/china-evs-tariffs-joe-biden-transport-2024-5">punishing tariffs</a>.Speaking at a roundtable at the Paris Motor Show on Monday, Xpeng co-president Brian Gu said the Guangzhou-based EV startup, <a target="_blank" class="" href="https://www.businessinsider.com/wildest-evs-unveiled-at-chinas-biggest-auto-show-2024-4">one of many competing with Tesla in China</a>, was keen to see how its autonomous driving technology shapes up to <a target="_blank" class="" href="https://www.businessinsider.com/elon-musk">Elon Musk's</a>."It is good news for us. You need competition to expand the field ... We obviously cannot go to the US at the moment to compete or compare there," the Xpeng executive said."But if they are in China, we can compete side by side and learn from them, and they can learn from us and help the market. It's a bigger pie for all of us to enjoy," he added.Tesla is reportedly close to <a target="_blank" class="" href="https://www.businessinsider.com/elon-musk-tesla-china-visit-self-driving-autonomous-electric-cars-2024-4">getting the green light to sell its </a><a target="_blank" href="https://www.businessinsider.com/elon-musk-tesla-china-visit-self-driving-autonomous-electric-cars-2024-4">Full-Self-Driving technologies in China.</a> The company says it plans to launch the feature in the region in Q1 2025 pending regulatory approval.It will <a target="_blank" class="" href="https://www.businessinsider.com/elon-musk-tesla-full-self-driving-technology-china-local-competition-2024-4">face brutal competition in China</a>, with many EV makers marketing their own autonomous driving systems.Xpeng's City Navigation Guided Pilot (NGP) system is available <a target="_blank" rel=" nofollow" href="https://electrek.co/2024/02/29/xpeng-tesla-fsd-xngp-self-driving-adas-now-available-throughout-china/">throughout China</a>, for example. Like Tesla's full self-driving, <a target="_blank" class="" href="https://www.xpeng.com/intelligent/xpilot">NGP can overtake</a>, recognize traffic signals, and conduct lane changes.<h2 id="efbf73c5-f874-4c8b-aa91-5e8d18ea3e8b">Tariff troubles</h2>Along with China's EV giants, Xpeng has been effectively blocked from selling its electric vehicles in the US by tariffs.President Joe Biden announced a <a target="_blank" class="" href="https://www.businessinsider.com/white-house-joe-biden-hikes-tariffs-on-chinese-made-evs-2024-5">100% levy on China-made EVs in May</a>, in an attempt to protect the US auto industry from a wave of cheap Chinese electric cars.Xpeng and its rivals are facing tariffs in the EU, which voted to impose <a target="_blank" class="" href="https://www.businessinsider.com/chinese-electric-vehicles-european-tariffs-retaliation-vw-bmw-mercedes-tesla-2024-10">additional levies of up to 35.3% on Chinese automakers</a> earlier this month."I think that the tariff will put a lot of pressure on our business model. It's a direct hit on our margin, which is already not very high," said Gu.He added that the levies may impact Xpeng's product strategy and pricing in the region, and said the company was considering whether to to set up manufacturing operations in Europe."As a global company, we need to learn how to deal with it. The bottom line is that we view Europe as a long-term opportunity and commitment," Gu added.Xpeng has enjoyed booming sales in China's red-hot EV market in recent months, posting <a target="_blank" class="" href="https://www.businessinsider.com/tesla-chinese-ev-rivals-record-deliveries-pressure-on-elon-musk-2024-10">record monthly deliveries in September</a>.The automaker, known for its side ventures into <a target="_blank" href="https://www.businessinsider.com/xpeng-tesla-rival-flying-car-prototype-drone-evtol-2022-11">flying cars</a> and humanoid robots, has also unveiled a series of aggressively priced smart cars in recent months that directly target Tesla's lineup.That includes <a target="_blank" class="" href="https://www.businessinsider.com/tesla-rival-china-xpeng-launches-cheap-ev-self-driving-tech-2024-8">the Mona M03</a>, an EV priced at around half the cost of Tesla's Model 3 in China, and the P7+, an electric sedan with AI and autonomous driving features.Speaking at the Paris Motor Show, Xpeng CEO He Xiaopeng announced that the P7+, which goes on sale in China in November, will start at 209,800 ($29,600).That also undercuts the price of the Model 3, with Tesla's cheapest vehicle in China <a target="_blank" class="" href="https://www.tesla.cn/model3/design?redirect=no&amp;cfg=#overview">starting at 231,900 yuan ($32,700)</a>.

This Chinese EV maker is up for a battle with Elon Musk in China

<ul class="summary-list"><li>China's EV giants left their European rivals in the dust at the continent's biggest auto show.</li><li>BYD, Xpeng, and Leapmotor unveiled new models at the Paris Motor Show despite looming tariffs.</li></ul>Automakers flocked to Paris for Europe's largest motor show this week — and China's EV giants were the star attraction.BYD, Xpeng, and Leapmotor showcased new vehicles at the Paris Motor Show, even as <a target="_blank" class="" href="https://www.businessinsider.com/chinese-electric-vehicles-european-tariffs-retaliation-vw-bmw-mercedes-tesla-2024-10">the European Union prepares to impose punishing tariffs</a> on Chinese electric vehicles.BYD unveiled the Sealion 7, a stylish electric SUV that the company says can charge from 10% to 80% in just 24 minutes. The company plans to launch the EV in Europe later this year.The automaker, which aims to become Europe's largest electric carmaker by 2030, showed off seven vehicles at its booth in Paris.Crowds quickly formed around the high-tech Yangwang U8, an imposing hybrid SUV that BYD says is capable of floating on water for up to 30 minutes and turning on the spot like a tank.The U8, which was making its European debut but is currently only sold in China, also comes with a drone that allows passengers to scout the road ahead.The Chinese focus on technologically advanced features and smart cars was also apparent elsewhere at the motor show. The booth of Chinese EV firm Xpeng was dominated by <a target="_blank" class="" href="https://www.businessinsider.com/xpeng-tesla-rival-flying-car-prototype-drone-evtol-2022-11">the company's flying car prototype</a>, which hung from the ceiling.<div type="image" title="Xpeng flying car at the Paris auto show" height="1875" width="2500" msid="114288549" hostid="261" sizebytes="398130"></div>CEO He Xiaopeng and co-president Brian Gu revealed the P7+ with camera-powered partially autonomous driving.Executives also discussed the company's investments in humanoid robots, flying cars, and AI hardware.Speaking to reporters, Gu said that although the tariffs, which could see <a target="_blank" class="" href="https://www.businessinsider.com/bmw-stellantis-renault-auto-giants-on-chinese-ev-competition-2024-10">manufacturers face extra levies as high as 35%</a>, would put pressure on Xpeng's business model, the company was not backing down from its European expansion plans."We have a long-term and strong commitment to Europe, which is a region that we think is a core to our business. We will do whatever is necessary to be competitive," he said.<h2 id="995c4927-3f48-4827-9f84-774f4931eb8f">European automakers despair</h2>Among the local automakers at the event, the atmosphere was less positive.<a target="_blank" class="" href="https://www.businessinsider.com/ev-sales-europe-slumping-warning-sign-us-2024-9">Stuttering EV sales across the continent</a> have meant some European manufacturers have scaled back their EV plans and are <a target="_blank" class="" href="https://www.businessinsider.com/bmw-ceo-2035-gasoline-vehicle-ban-eu-more-reliant-china-2024-10">lobbying the EU to rethink emissions targets</a> they say will cost them billions in fines.Speaking at a summit on the sidelines of the motor show, BMW CEO Oliver Zipse said the mood in Europe's auto industry was "trending toward pessimism."He warned that a planned 2035 ban on gasoline vehicles in Europe could "threaten the European automotive industry in its heart," while the CEO of French automaker Renault said that it was clear that Chinese automakers had accelerated beyond their Western rivals."Europe is not the leader anymore. No one can put heads in the sand anymore — the center of gravity is now in China," said Renault boss Luca de Meo, speaking at the same event.Nowhere was that more apparent than at the booth occupied by Chinese EV maker Leapmotor.<div type="image" title="Zhu Jiangming founder of Leapmotor and Carlos Tavares CEO of Stellantis at Paris Motor Show" height="4016" width="6016" msid="114288547" hostid="261" sizebytes="2561190"></div>After launching <a target="_blank" class="" href="https://www.stellantis.com/en/news/press-releases/2024/september/leapmotor-international-opens-orders-in-europe-for-affordable-high-tech-t03-city-car-and-c10-suv-electric-vehicles">two new models in Europe</a> last month, the EV startup <a target="_blank" class="" href="https://www.media.stellantis.com/em-en/leapmotor/press/leapmotor-b10-makes-global-debut-at-the-paris-motor-show">unveiled the B10</a>, an electric vehicle it is planning to sell globally from next year and which could cost 100,000 RMB ($14,000) in China.While unveiling the new model, Leapmotor CEO Zhu Jiangming was joined by Carlos Tavares, the CEO of Jeep, Ram, and Fiat maker Stellantis.The European automaker <a target="_blank" class="" href="https://www.stellantis.com/en/news/press-releases/2024/may/leapmotor-international-begins-operations-to-expand-global-electric-vehicle-sales-starting-september-2024-in-nine-european-countries-followed-by-other-key-growth-regions">struck a deal with Leapmotor</a> earlier this year to invest in the company and gained exclusive rights to sell its affordable EVs outside China.Speaking at the automotive summit on Tuesday, Tavares said European automakers needed to accept the "harsh reality" that Chinese companies were now capable of making EVs for far cheaper than their European rivals.He added that the Leapmotor partnership had been necessary for Stellantis to compete with the country's electric vehicle giants."For us, the best way to compete immediately with the Chinese was to hop on their train, rather than letting it run us over," Tavares said.

China's EV giants shine at Europe's largest auto show while local rivals despair

<ul class="summary-list"><li>Tesla faces a new investigation by the National Highway Traffic Safety Administration.</li><li>The probe follows reports of crashes in low visibility areas with Full Self-Driving engaged.</li></ul><a target="_blank" class="" href="https://www.businessinsider.com/tesla">Tesla</a> is facing a fresh investigation from the national auto safety watchdog after reports of four crashes in which its Full Self-Driving technology was engaged. The <a target="_blank" class="" href="https://www.nhtsa.gov/search-safety-issues#investigation">National Highway Traffic Safety Administration said Thursday</a> that it will probe the ability of the electric vehicle maker's software engineering controls to "detect and respond appropriately to reduced roadway visibility conditions." The new probe will cover 2.4 million Tesla vehicles. It follows reports of four Tesla crashes in which the EVs were driven with FSD engaged in areas where roadway visibility was reduced by "sun glare, fog, or airborne dust," the announcement said.According to the regulator's Office of Defects Investigation, in one of the crashes, a pedestrian was "fatally struck" by a Tesla vehicle, and another person was injured in a separate crash.Although preliminary, the evaluation could be seen as an impediment to Tesla chief Elon Musk's autonomous driving dreams, like its robotaxi, a driverless vehicle that was unveiled last week. The company <a target="_blank" class="" href="https://www.businessinsider.com/elon-musk-tesla-robotaxi-safety-regulation-2024-10">already faces a series of regulatory challenges</a>. For example, in California, Tesla must be permitted to test and operate driverless vehicles, an authorization it has yet to secure. Phil Koopman, a Carnegie Mellon University professor and an autonomous vehicle safety expert, previously told Business Insider that <a target="_blank" class="" href="https://www.businessinsider.com/elon-musk-tesla-robotaxi-safety-regulation-2024-10">Tesla will also need to gain permission from the federal government</a> to sell its Cybercab, which was designed to come without a steering wheel or pedals. According to Koopman, it will likely be a lengthy and complex process for Tesla to get that green light. In April, the NHTSA started a <a target="_blank" class="" href="https://www.businessinsider.com/feds-investigating-tesla-autopilot-recall-after-crashes-kept-happening-2024-4">separate probe into Tesla</a> over crashes involving its Autopilot program. The regulator said at the time that it investigated 956 Tesla crashes in which Autopilot was involved between January 2018 and August 2023. 29 of the crashes assessed had resulted in fatalities.Tesla <a target="_blank" class="" href="https://www.businessinsider.com/tesla-recalls-2-million-cars-as-regulators-say-autopilot-insufficent-2023-12">recalled over 2 million vehicles</a> in the US in December 2023 to install a software update to Autopilot after regulators said the tech fell short of stopping driver misuse. The NHTSA said in April that it would look into why Tesla's over-the-air software made owners opt-in, which it said made it something that could have been "readily reversed."Tesla didn't immediately respond to a request for comment from Business Insider, made outside normal working hours.

Tesla faces a fresh probe from auto regulators over its Full Self-Driving software

<ul class="summary-list"><li>European car CEOs criticize EU tariffs on Chinese EVs, urging learning from rivals.</li><li>EU plans tariffs up to 35% on Chinese EVs, fearing market disruption by cheap imports.</li></ul>European car bosses have a solution to <a target="_blank" class="" href="https://www.businessinsider.com/chinese-car-companies-europe-expansion-threatens-mercedes-volkswagen-2023-9">the Chinese EV invasion</a> — if you can't beat them, at least learn from them. Speaking at the Paris Motor Show on Tuesday, the bosses of European auto giants such as BMW and Stellantis attacked the EU's proposed tariffs on Chinese EVs, and urged struggling European automakers to learn from the success of their Chinese rivals to kick-start the continent's sluggish EV sales.The European Union <a target="_blank" href="https://www.businessinsider.com/chinese-electric-vehicles-european-tariffs-retaliation-vw-bmw-mercedes-tesla-2024-10">voted to impose tariffs of up to 35% on Chinese EV makers this month</a> amid fears that a wave of cheap, subsidized Chinese electric vehicles could upend the European auto market.The CEOs of BMW and Stellantis attacked the <a target="_blank" class="" href="https://www.businessinsider.com/chinese-electric-vehicles-european-tariffs-retaliation-vw-bmw-mercedes-tesla-2024-10">proposed tariffs</a>, saying they would be ineffective and might backfire on consumers."We should not be so afraid of everything. It is not so easy to sell non-European cars in Europe," BMW CEO Oliver Zipse said at the motor show.He said that the tariffs would "inflict" damage on BMW, which imports cars from China, and harm its European consumers as a result."We shouldn't give up before the race has even started. We don't need protection, we need fair trade rules," he added.The decision to impose tariffs was not unanimous. Several nations are believed to have voted against the move, including Germany, which had been lobbied by automakers such as BMW and Mercedes, fearful that China might retaliate and target their businesses there.It comes as <a target="_blank" class="" href="https://www.businessinsider.com/ev-sales-europe-slumping-warning-sign-us-2024-9">EV sales in Europe plunge</a>, with registrations falling by 44% in August compared to last year. Stagnating demand has led some automakers to pump the brakes on their EV plans, and others to push for the EU to reconsider looming emissions targets that could leave them facing billions in fines.Meanwhile, their Chinese rivals continue to make inroads into the continent despite trade barriers.<h2 id="e971d3c0-847b-41b4-a2d0-29d9cd3054c7">Europe's EV dilemma</h2>Tesla rivals BYD and <a target="_blank" class="" href="https://www.businessinsider.com/chinese-tesla-rival-xpeng-welcomes-competition-from-elon-musk-2024-10">Xpeng</a> both unveiled new models this week at the Paris Motor Show, one of Europe's biggest auto events.Luca de Meo, the CEO of French automaker Renault, said European automakers had a golden opportunity to learn from their Chinese counterparts, who he said were now developing new cars in as little as two years."There is an opportunity that we have no right to miss, and that is to learn from our competitors," de Meo said, speaking at the summit in Paris."This is what Europeans like Fiat, Citroen, and Renault did a century ago in the United States when Henry Ford revolutionized manufacturing, and it's what the Chinese automakers did with us," he added.In an <a target="_blank" href="https://www.bloomberg.com/news/audio/2024-10-14/bloomberg-talks-renault-ceo-luca-de-meo-podcast">interview with Bloomberg</a> on Monday, de Meo declined to comment on the EU's prospective tariffs on Chinese automakers. However, he said that ramping up "electrification" in Europe would be difficult "without good cooperation" with China, given its dominant role in the EV battery and materials market. Stellantis CEO Carlos Tavares said it was "a dream" to believe that tariffs would effectively protect Western auto industries."These short-term actions will have negative mid and long-term implications. The only way to protect ourselves is to compete with the newcomers and raise ourselves to their game," said the boss of the Jeep and Ram maker.Stellantis has partnered with Chinese EV firm Leapmotor, which has given it exclusive rights to sell Leapmotor's EVs outside of China.Tavares said the company had decided that the best way to compete with China was to partner with one of their automakers, and "hop on their train instead of letting it run us over.""We need to understand where the Chinese automakers are strong, and through our investment in Leapmotor we have a perfect transparent understanding of what makes the difference. That is very helpful," said Tavares.BMW, Stellantis, and Renault did not respond to a request for comment from Business Insider, sent outside normal working hours.

We should be learning from Chinese EV players, not shutting them out of Europe — auto bosses say

<ul class="summary-list"><li>Investors Marc Andreessen and Ben Horowitz said Chinese EVs are beating out American and European automakers.</li><li>Chinese automakers, like Xiaomi, are gaining global traction with affordable, quality EVs.</li></ul>It's not just Ford's CEO singing the praises of low-cost Chinese electric cars from buzzy companies like Xiaomi.Andreessen Horowitz founders Marc Andreessen and Ben Horowitz said on their <a target="_blank" class="" href="https://www.youtube.com/watch?v=1_ZB7O_9hlQ">podcast</a> that Chinese automakers have developed high-quality and affordable vehicles supported by a robust supply chain ecosystem.With the American auto industry struggling with slowing growth in its EV market, American automakers need to be able to offer a compelling $20,000 EV that also competes on quality if the US doesn't want to "lose the auto industry," Andreessen said."What China has now is not just really good car companies, but they've got this entire constellation of supply chain componentry," Andreessen said.China's government has spent at least $230 billion to support electric vehicle makers such as BYD since 2009, according to a study published in 2024 by the <a target="_blank" rel=" nofollow" href="https://www.csis.org/blogs/trustee-china-hand/chinese-ev-dilemma-subsidized-yet-striking">Centre for Strategic &amp; International Studies</a> think tank.Andreessen and Horowitz specifically highlighted Chinese tech giant Xiaomi, which is known for making smartphones but has turned heads in the auto sector after <a target="_blank" class="" href="https://www.businessinsider.com/china-xiaomi-launch-electric-car-apple-failed-tesla-2024-3">launching its first line of EVs </a>with the Speed Ultra 7, also known as the SU7, in March. Along with <a target="_blank" class="" href="https://www.mi.com/global/discover/article?id=3263&amp;ref=renatomitra.com">impressive performance</a>, the SU7 is also integrated with Xiaomi smart home devices, which allows for remote voice control of household appliances from inside the car."You watch the reviews, and it's just crystal clear how good the thing is," Andreessen said.The SU7 <a target="_blank" class="" href="https://www.businessinsider.com/xiaomi-loses-speed-ultra-7-electric-vehicles-9200-per-car-2024-8">sold out</a> after attracting 90,000 pre-orders within a day of its unveiling, and Horowitz said its popularity has spread globally in favor of other American and European brands.The electric sedan is the designated ride of <a target="_blank" class="" href="https://www.businessinsider.com/xiaomi-su7-chinese-ev-features-specs-photos-ford-ceo-2024-10">Ford CEO Jim Farley</a>, who called Xiaomi an "industry juggernaut." "It's just been all around the world," Horowitz said. "In Mexico and the Middle East, and so forth — they love these Chinese cars. They like them better than their Porsche Cayenne."The VC founders said they had recently met with "one of the most successful guys in Dubai" whose "entire personal fleet of cars has been replaced by Chinese cars, not because they're cheaper but because they're better."The Xiaomi SU7 range is cheaper than much of the competition — starting at 215,900 yuan ($30,000) compared to the lowest Porsche Cayenne model price of $87,400. The SU7 also beats out Tesla's most affordable model, the Model 3 Long Range Rear-Wheel Drive, which retails for $42,490.Other Chinese carmakers have even lower-priced offerings. Chinese automaker BYD, Tesla's rival as one of the world's top-selling EV companies, <a target="_blank" class="" href="https://www.businessinsider.com/byd-china-ev-price-war-yuan-plus-tesla-elon-musk-2024-3">released a newer version</a> of its best-selling Yuan Plus for $16,000, which is 12% cheaper than the original model.Andreessen said that Chinese car brands are outperforming American EV automakers in affordability and quality, calling them "super technologically sophisticated.""For example, they've got this feature where you just come in, and you just drop your phone down on the center divider, and basically, the car lights up," he said. "The whole system inside the car comes off your phone — like all your music and your maps and your calendar and all that stuff is just automatically there."The venture capitalist also highlighted other features, such as customized dancing animations in the LED headlights that greet the driver and self-driving capabilities, which are already integrated into several <a target="_blank" class="" href="https://www.businessinsider.com/tesla-rival-china-xpeng-launches-cheap-ev-self-driving-tech-2024-8">lower-cost</a> Chinese EVs.To keep up, American automakers need to be able to offer a similarly affordable and full-featured car at the $20,000 price point, Andreessen said.The investor said that the American carmaker with the "highest odds" of competing on price was Elon Musk and Tesla.Tesla has said lower-priced vehicles are on the way, including the fully autonomous Cybercab robotaxi, a two-seater without a steering wheel or pedals. Musk has said it will cost around $25,000 to $30,000 and is expected to launch in 2026. Musk has also said <a target="_blank" class="" href="https://www.businessinsider.com/elon-musk-building-regular-tesla-pointless-self-driving-earnings-stock-2024-10">there are no plans to offer a traditional version of the Cybercab</a> with a steering wheel and pedals, as the company is all-in on autonomous vehicles being the future. In the US, the cheapest electric vehicle is currently the Nissan Leaf S. The 2025 model carries an MSRP of $28,140.Meanwhile, Xiaomi is also experimenting with targeting the luxury market. On Wednesday, the company <a target="_blank" href="https://www.businessinsider.com/chinese-ev-xiaomi-su7-driven-by-fords-ceo-faster-model-2024-10">revealed the SU7 Ultra</a>, a high-performance version of the original SU7, priced at 814,900 yuan ($114,000). With a range of 630 km (391 miles), the SU7 Ultra is set to release in China in March 2025.

Marc Andreessen says US carmakers need to make a $20,000 EV if they don't want to 'lose the auto industry' to China

<ul class="summary-list"><li><a target="_blank" class="" href="https://www.businessinsider.com/tesla-history-founders">Tesla</a> is struggling to maintain its lead in the EV industry.</li><li>A report from ITIF found that China is rivaling or beating Tesla when it comes to innovation.</li></ul>Tesla is fighting to <a target="_blank" class="" href="https://www.businessinsider.com/tesla-q4-sales-less-than-china-byd-2024-1">keep its EV crown,</a> and Chinese automakers are already challenging Elon Musk's company in one crucial area: Innovation.Electric car companies in China have been developing new products and technology at a higher rate than US automakers, according to a recent <a target="_blank" class="" href="https://itif.org/publications/2024/07/29/how-innovative-is-china-in-the-electric-vehicle-and-battery-industries/?utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=newsletter_axiosgenerate&amp;stream=top">report</a> from the Information Technology &amp; Innovation Foundation. The Washington DC-based think tank found that Chinese EV companies are 30% faster when it comes to developing and releasing new car models than automakers in other regions, including Tesla.ITIF said Chinese companies, on average, only take about 1.3 years before they update or refresh their EV models, while brands from other countries, including the US, take an average of 4.2 years.Tesla has faced criticism for its aging lineup of vehicles, and two experts previously told Business Insider the carmaker's unwillingness to regularly refresh its vehicles was <a target="_blank" href="https://www.businessinsider.com/tesla-cars-starting-to-look-basic-sales-problem-2024-7">turning off buyers</a>.Additionally, Chinese electric-car companies like BYD are pumping out more new EVs than US automakers, including Tesla, ITIF said. Between 2017 and 2023, China's BYD introduced 19 new vehicles, as compared to Tesla's five models."In short, the quality and innovativeness of EVs from leading Chinese manufacturers such as BYD, Li Auto, Xiaomi, and others increasingly rival or exceed offerings from Tesla or BMW," the report said.The think tank also traced breakthroughs in battery technology, vehicle design, and software offerings, using case studies of Chinese EV companies, focus group interviews with experts, and by assessing scientific articles and patents to determine that Chinese electric-car makers either equaled or outpaced its US and European rivals. The Think Tank warned US carmakers would need to "double down on genuine technological innovation" if they wanted to continue to compete with Chinese companies.The report points to larger concerns at Tesla. Musk's company has been facing mounting pressure from EV companies in China, including BYD, which has been vying with Tesla for the <a target="_blank" rel="" href="https://www.businessinsider.com/elon-musk-tesla-regain-title-top-electric-car-maker-2024-4">title of top EV seller</a>.Tesla's delivery numbers have slumped over the past two quarters, and <a target="_blank" class="" href="https://www.reuters.com/business/autos-transportation/teslas-china-made-ev-sales-fall-18-yy-april-2024-05-07/">Reuters reported</a> in May that the carmaker's sales in China had dropped 18% from the previous year.Some experts attribute Tesla's lackluster sales to its aging lineup of vehicles. Tesla released its first new vehicle in nearly four years when it began <a target="_blank" class="" href="https://www.businessinsider.com/tesla-cybertruck-price-release-event-delivery-truck-live-updates-2023-11">deliveries of the Cybertruck</a> in 2023, but the company hasn't updated some of its models in years. Musk has <a target="_blank" rel=" nofollow" class="" href="https://www.reuters.com/business/autos-transportation/tesla-will-not-launch-refreshed-model-y-this-year-musk-says-2024-06-09/">said</a> there aren't any plans to refresh the Model Y, which came out in 2020, and the design of the Model S and Model X haven't been meaningfully updated since 2021. The Model 3 was refreshed earlier this year, but the tweaks were so minor that only an eagle-eyed owner would be able to spot the difference.As recently as May, Musk <a target="_blank" class="" href="https://www.businessinsider.com/elon-musk-tesla-comments-biden-tariff-chinese-electric-vehicles-2024-5">spoke out against tariffs on China,</a> but he acknowledged earlier this year that "Chinese car companies are by far the most competitive."A spokesperson for Tesla did not respond to a request for comment.Do you work for Tesla or have a tip? Reach out to the reporter via a non-work email and device at gkay@businessinsider.com or 248-894-6012

Chinese EV makers are outpacing Tesla in one key area

<ul class="summary-list"><li>Mercedes-Benz CEO Ola Källenius says automakers need to hunker down if they want to beat the Chinese.</li><li>Källenius described the competition between automakers as a "Darwinistic-like price war."</li></ul>The Western auto industry is now locked in a pivotal <a target="_blank" class="" href="https://www.businessinsider.com/china-xi-jinping-crush-tesla-elon-musk-american-ev-industry-2024-2">existential battle</a> with Chinese competitors, if recent remarks by the CEOs of <a target="_blank" class="" href="https://www.businessinsider.com/mercedes-benz-ev-2030-electric-car-market-trends-2024-2">Mercedes-Benz</a> and <a target="_blank" class="" href="https://www.businessinsider.com/ford-focuses-on-smaller-cheaper-evs-pivots-from-giant-trucks-2024-7">Ford</a> are anything to go by.Mercedes-Benz CEO <a target="_blank" class="" href="https://www.businessinsider.com/china-electric-cars-mercedes-benz-ola-kallenius-european-union-tariffs-2024-3">Ola Källenius</a> was speaking at a panel at the Berlin Global Dialogue conference on October 2 when he was asked about the threat posed by Chinese EV makers.EVs, Källenius said, are cheaper for Chinese consumers to buy than combustion vehicles even though they cost more to produce."It's strange. It's a Darwinistic-like price war, market purification. And many of those players that are around now. Many of those are not going to be around five years from now," he said."In that market consolidating phase, you have cash burn and value destruction that even affects companies that sit at the upper end of the pyramid because you cannot release yourself from the market," he added.But automakers, Källenius added, should not remain "paralyzed" in the face of all this market turmoil."You must control your nerves, keep on investing, keep on innovating and make sure that at the end of that Darwinian battle, that you are one of the combatants that are left and that's what we are focusing on," Källenius said.Representatives for Källenius at Mercedes-Benz did not immediately respond to a request for comment from Business Insider sent outside regular business hours.The Mercedes-Benz CEO isn't the only major auto chief sounding the alarm about their Chinese competitors.After a visit to China in May, Ford CEO <a target="_blank" class="" href="https://www.businessinsider.com/ford-ceo-jim-farley-musk-tesla-cybertruck-dirt-hill-video-2023-11">Jim Farley</a> told a board member that he viewed the Chinese auto industry as an "<a target="_blank" class="" href="https://www.businessinsider.com/ford-ceo-cfo-left-shocked-after-chinese-ev-test-drive-2024-9">existential threat</a>," per a September 14 report from The Wall Street Journal.Farley wasn't the only top executive at Ford who had an eye on the aggressive progress of the Chinese market.In early 2023, Farley and his CFO John Lawler were in China where they tested out an electric SUV made by Changan Automobile, a state-owned automaker.The quick test drive, which saw Farley driving and Lawler riding shotgun, left them both shocked and impressed with the quality of the Chinese-made EVs, the Journal reported."Jim, this is nothing like before," Lawler reportedly told Farley after the test drive. "These guys are ahead of us."When it comes to competing in the EV market, Western automakers have been left playing a game of catch-up with the Chinese.Chinese automakers like BYD have been expanding into Southeast Asian countries like Thailand, as well as developing markets like Brazil and Mexico.According to <a target="_blank" class="" href="https://www.businessinsider.com/byd-saic-chinese-ev-makers-plot-world-takeover-2024-6">data compiled by the technology firm ABI Research</a> for BI, Chinese automakers accounted for 70% of the EV market in Thailand and 88% in Brazil in the first quarter of this year.The seemingly unstoppable rise of Chinese automakers has prompted Western governments to intervene in the form of tariffs.In May, the US government <a target="_blank" class="" href="https://www.businessinsider.com/china-evs-tariffs-joe-biden-transport-2024-5">imposed tariffs</a> on Chinese automakers. The crippling trade restrictions effectively shut them out of the US auto market. The European Union <a target="_blank" class="" href="https://www.businessinsider.com/china-electric-vehicles-share-price-europe-tariff-hike-overcapacity-investors-2024-6">introduced tariffs</a> as well just a month later.Notably, Mercedes-Benz's Källenius <a target="_blank" class="" href="https://www.businessinsider.com/china-electric-cars-mercedes-benz-ola-kallenius-european-union-tariffs-2024-3">isn't a fan of using trade restrictions</a> to quell the competition."Don't raise tariffs. I'm a contrarian, I think go the other way around: take the tariffs that we have and reduce them," he told the Financial Times in an interview published in March."That is the market economy. Let competition play out," he added.

The Western auto industry is now locked in a 'Darwinian' make-or-break battle with China, the chiefs of 2 major automakers warn

New Delhi, <keyword id="32870" type="General" weightage="20" keywordseo="auto" source="Orion">Auto</keyword> component maker Samvardhana <keyword id="135627" type="General" weightage="20" keywordseo="motherson" source="Orion">Motherson</keyword> International on Friday said it has inked a pact to fully acquire Bengaluru-based Rollon Hydraulics for an undisclosed amount. Rollon is engaged in manufacturing, assembly and supply of high-precision turned parts, spools, and other machined components with critical engineering applications for the agriculture and off- Highway segment from its two facilities based out of Bengaluru. "Our focus on being a solutions provider to our customers has been a driving force for this acquisition. We are getting access to a new industry segment of construction and material handling for our precision metal business," Motherson Chairman Vivek Chaand Sehgal said in a statement. The company believes this business is highly synergistic with Motherson's existing business and offers ample opportunities to grow this business in India, Mexico &amp; other geographies, he added. "This is our fifth acquisition in India in the past 12 months, reaffirming India's importance in our future plans," Sehgal noted.

Auto component maker Motherson to acquire Bengaluru-based Rollon Hydraulics

<ul class="summary-list"><li>Local and Western carmakers have flocked to the Beijing Auto Show.</li><li>Highlights include Zeekr's transforming minivan and a flying car built by Xpeng. </li></ul>If you need more evidence that <a target="_blank" href="https://www.businessinsider.com/china-xi-jinping-crush-tesla-elon-musk-american-ev-industry-2024-2">China's EV market is booming</a>, just look at the country's biggest car show.<a target="_blank" href="https://www.bloomberg.com/news/articles/2024-04-23/vw-bmw-out-to-prove-they-re-not-a-spent-force-at-china-car-show">Around 117 new cars</a> debuted at the Beijing auto show, which began April 25 and runs until May 4, as dozens of local manufacturers jostled for space with foreign imports like Volkswagen and Mercedes in <a target="_blank" href="https://www.businessinsider.com/china-tesla-electric-vehicle-market-dominance-competition-byd-aion-wuling-2024-4">China's brutally competitive automobile sector</a>.The likes of <a target="_blank" href="https://www.businessinsider.com/china-byd-electric-car-ev-why-not-coming-to-us-2024-3">BYD</a>, Zeekr, and Xiaomi all showed off new models — here are some of the most interesting vehicles on offer.<h2>The Zeekr Mix</h2><div type="image" title="Zeekr Mix" height="1666" width="2500" msid="109839618" hostid="261" sizebytes="214718"></div>Zeekr might be only three years old, but the company has made a name for itself with its<a target="_blank" href="https://www.businessinsider.com/ev-electric-vehicle-china-brands-byd-nio-wuling-zeekr-geely-2023-5#4-geelys-zeekr-is-just-2-years-old-but-it-already-has-international-ambitions-5"> quirky EVs</a>.At the auto show, the EV firm unveiled the Zeekr Mix, an electric multi-purpose vehicle with swiveling chairs that allow it to <a target="_blank" href="https://www.forbes.com/sites/jamesmorris/2024/04/28/auto-china-2024-zeekr-mix-is-much-more-than-just-a-novel-mpv/?sh=129c8e2a2ac8">transform into a small room</a> when parked.The company, owned by Chinese auto giant Geely, <a target="_blank" href="https://electrek.co/2024/02/27/zeekr-launches-001-refresh-improved-specs-lower-prices/">recently released</a> its all-new Zeekr 001 model, equipped with battery technology that can go from <a target="_blank" href="https://insideevs.com/news/715042/2024-zeekr-001-charging-speed/">10% to 80% charged in just 11 minutes</a>.<h2>BYD targets high-end customers</h2><div type="image" title="BYD Yangwang U8" height="1663" width="2500" msid="109839622" hostid="261" sizebytes="447414"></div>By far the biggest name in China's EV market is BYD, the Warren Buffett-backed firm that is probably giving Elon Musk sleepless nights.The EV upstart has become known for its cheap vehicles, such as the <a target="_blank" href="https://www.businessinsider.com/byd-seagull-cheap-ev-electric-car-tesla-china-2023-4">$11,000 Seagull</a>, but the company was showing off its more high-end models in Beijing.That includes the Yangwang U8, the latest version of which, the <a target="_blank" href="https://cnevpost.com/2024/04/25/byds-yangwang-launches-new-variant-u8-gives-u7-debut/">Off-road Master Edition</a>, was unveiled in Beijing.This 1.1 million yuan ($150,000) SUV is capable of <a target="_blank" href="https://www.autoevolution.com/news/meet-the-car-that-floats-byd-s-yangwang-u8-suv-comes-with-an-emergency-floating-mode-221628.html">floating for up to 30 minutes</a> and turning 360 degrees on the spot <a target="_blank" href="https://www.youtube.com/watch?v=dkROmU9Bxbw">like a tank</a> — and customers can even add a <a target="_blank" href="https://www.wired.com/story/evs-with-built-in-camera-drones-have-already-landed-in-china/">built-in drone</a> for an <a target="_blank" href="https://apnews.com/article/china-beijing-auto-show-ev-8ee415e956b818be6d363367c8180b4f">extra 100,000 yuan</a> ($14,000). BYD also announced a new cheap electric hatchback as it looks to squeeze Tesla even further. The <a target="_blank" href="https://electrek.co/2024/04/26/byd-unveils-sleek-new-electric-hatch-1000-hp-z9-gt-ev/">Ocean-M</a> hatchback will be released later this year and will cost between 150,000 yuan to 200,000 yuan ($20,00 to $27,000).<h2>Xiaomi brings its Tesla rival</h2><div type="image" title="Xiaomi SU7" height="1663" width="2500" msid="109839625" hostid="261" sizebytes="189460"></div>One of the biggest draws of the auto show was the SU7, an electric SUV built by <a target="_blank" href="https://www.businessinsider.com/china-xiaomi-launch-electric-car-apple-failed-tesla-2024-3">smartphone maker Xiaomi</a>.The EV promises to offer <a target="_blank" href="https://www.businessinsider.com/xiaomi-su7-ev-photos-specs-features-tesla-rival-2023-12">a range of 500 miles</a> and a battery that can be fully charged within 15 minutes, according to Xiaomi, and drivers will have access to the company's <a target="_blank" href="https://www.businessinsider.com/elon-musk-tesla-full-self-driving-technology-china-local-competition-2024-4">next-gen autonomous driving features</a> — all for a price point that starts at<a target="_blank" href="https://www.bloomberg.com/news/articles/2024-03-28/xiaomi-unveils-ambitious-pricing-for-entry-in-cutthroat-ev-race"> 215,900 yuan ($30,00)</a>.It's not surprising that the EV <a target="_blank" href="https://www.reddit.com/r/electricvehicles/comments/1cf9vuo/people_queue_hours_to_see_xiaomi_su7_closer_at/">appeared to attract huge queues</a> when it went on display at the Beijing conference. Xiaomi has said that the company has already <a target="_blank" href="https://www.bloomberg.com/news/articles/2024-04-25/xiaomi-says-su7-ev-orders-reach-75-723-since-march-launch">received more than 75,000 orders</a> for the SUV, with deliveries beginning in March.<h2>European automakers join the party</h2><div type="image" title="VW ID-Code" height="1663" width="2500" msid="109839628" hostid="261" sizebytes="266854"></div>Not to be outdone by their Chinese counterparts, Western automakers also had a large presence at the Beijing auto show.Volkswagen, once China's largest car brand before being <a target="_blank" href="https://fortune.com/europe/2024/01/23/volkswagen-top-car-seller-china-byd-warren-buffett-berkshire-hathaway/">overtaken by local rivals</a>, showed off its <a target="_blank" href="https://www.volkswagen-newsroom.com/en/the-new-id-code-world-premiere-18343">ID.Code 01 concept EV</a>, which features a <a target="_blank" href="https://www.volkswagen-newsroom.com/en/the-new-id-code-world-premiere-18343/the-design-and-technologies-of-the-interior-in-detail-18348">built-in robot that vacuums the car</a> when it's not being used.German firm Mercedes, meanwhile, unveiled an electric version of its <a target="_blank" href="https://www.bloomberg.com/news/articles/2024-04-24/electric-g-wagon-pricing-performance-for-new-mercedes-benz-suv">iconic G-Wagon off-roader</a>, which the company said would launch in China <a target="_blank" href="https://www.reuters.com/business/autos-transportation/mercedes-benz-shows-off-electric-line-up-beijing-autoshow-not-giving-up-2024-04-25/">later this year</a>.<h2>Xpeng shows off its flying car</h2><div type="image" title="Xpeng flying car" height="1667" width="2500" msid="109839631" hostid="261" sizebytes="292698"></div>The number of companies trying to make it in China's EV market — <a target="_blank" href="https://www.businessinsider.com/china-tesla-electric-vehicle-market-dominance-competition-byd-aion-wuling-2024-4">at least 123</a>, according to one auto consultant — has seen some firms branch out in unexpected directions.One is Chinese EV maker Xpeng with its AeroHT flying car prototype that went on <a target="_blank" href="https://electrek.co/2024/04/25/xpeng-2k-pure-visual-adas-neural-network-fast-charging-ai-ev-sub-brand-beijing/">display in Beijing</a>.The AeorHT has been in development for a decade, and the affiliate company behind it is reportedly <a target="_blank" href="https://www.scmp.com/business/china-business/article/3260577/xpengs-flying-car-affiliate-aeroht-closes-airworthiness-certification-chinese-ev-maker-targets">close to receiving regulatory approval to fly</a> — but no price or release date has been announced yet, so may be a while before the AeroHT dominates China's skies.

These are the wildest EVs unveiled at China's biggest auto show

<ul class="summary-list"><li>Tech firm and new EV maker Xiaomi revealed just how much cash it's burning to make its cars.</li><li>The tech firm's EV branch lost about $252 million from April to June, or $9,200 per car.</li></ul>Chinese tech giant Xiaomi, known for making smartphones, turned heads in March when its <a target="_blank" class="" href="https://www.businessinsider.com/china-xiaomi-launch-electric-car-apple-failed-tesla-2024-3">maiden electric vehicle</a> sold out with almost 90,000 preorders within a day of launch.Its new auto branch posted an adjusted loss of $252 million for the second quarter ending June 30 — its first-ever full delivery quarter, the company said in its <a target="_blank" class="" href="https://ir.mi.com/system/files-encrypted/nasdaq_kms/assets/2024/08/21/5-44-48/Announcement.pdf">unaudited results filed on Wednesday.</a>That's despite Xiaomi saying it's on track to smash its target of 100,000 deliveries of its first car, the <a target="_blank" class="" href="https://www.businessinsider.com/phonemaker-xiaomi-unveils-first-ev-taking-on-tesla-2023-12">Speed Ultra 7</a>, by November.The new electric vehicle maker said it delivered 27,307 SU7s in the second quarter, meaning that, on average, it lost $9,200 for each car. The base price of the SU7 is 215,900 yuan, or about $30,000.That's not to say that Xiaomi loses more money when it delivers more cars: The firm reported a higher-than-anticipated gross profit margin of 15.4%.Yet it's signaled for a while that its auto segment would take time to break even, with <a target="_blank" class="" href="https://www.scmp.com/business/china-business/article/3258134/xiaomis-maiden-ev-selling-loss-turbocharges-price-war-forcing-chinas-small-players-out-business">CEO Lei Jun mentioning in April</a> that the car was selling at at a loss, though he didn't say by how much.Citibank analysts <a target="_blank" class="" href="https://www.cnbc.com/2024/04/24/chinas-xiaomi-is-selling-so-many-electric-cars-its-closer-to-breaking-even.html#:~:text=%E2%80%9CBreakeven%20would%20be%20realized%20if,a%2010%25%20loss%20previously%20expected.">wrote in a report at the time</a> that they expected Xiaomi to turn a profit only after hitting annual sales of 300,000 to 400,000 vehicles. They forecast sales of 260,000 cars in 2026.Xiaomi operates one EV factory, which it built itself. Since June, it's been running double-shift operations to <a target="_blank" class="" href="https://www.businessinsider.com/ev-china-electric-vechile-xiaomi-sees-apparent-demand-2024-4">push monthly deliveries past 10,000 cars.</a>A company spokesperson told Business Insider that the firm is focusing on increasing the scale of its EV arm to narrow per-car costs."The scale of Xiaomi EV business is relatively small at the moment, while the auto industry is a typical industry with economies of scale," the spokesperson said.For comparison, competing Chinese EV maker BYD <a target="_blank" class="" href="https://www.reuters.com/business/autos-transportation/chinas-byd-posts-21-jump-quarterly-ev-sales-closes-gap-with-tesla-2024-07-02/">sold 426,039 cars</a> in the April-June quarter.Xiaomi's spokesperson added: "In addition, Xiaomi's first EV is a pure electric sedan, and its investment cost is relatively high, so it will take some time to digest this part of the cost."Lei Jun, the billionaire cofounder of Xiaomi, <a target="_blank" class="" href="https://www.bloomberg.com/news/articles/2021-03-30/xiaomi-is-said-to-plan-15-billion-foray-into-electric-cars">said in March</a> that he intended to pour "tens of billions of investment" over the next few years into building Xiaomi's EV division and car technologies.The tech firm has long said its vision for the SU7 is to create a smart car that rivals Elon Musk's Tesla but is priced more in line with the average Chinese income.Xiaomi said customers are still coming in, with 13,000 more vehicles sold in the second quarter and July combined.Its ambitions for its EV range far, including self-driving and self-parking capabilities and an audio-based artificial intelligence assistant to be fully shipped this month.Overall, Xiaomi posted strong results for its second quarter, with sales across all its sectors rising 32% to 88.7 billion yuan compared to the same period in 2023.Net income also hit 5 billion yuan, up 38% from 3.6 billion yuan in the second quarter last year.The company said it plans to build a variety of EV models beyond the SU7 sedan but has not said what they will be.

One of China's hottest new EV makers says it lost $9,200 for each $30,000 smart car it delivered

<ul class="summary-list"><li>Ford CEO Jim Farley and CFO John Lawler took a test drive in a Chinese electric SUV in early 2023.</li><li>Both men were left shocked and impressed by the quality of the Chinese-made EV.</li></ul><a target="_blank" class="" href="https://www.businessinsider.com/meet-the-henry-ford-family-inside-automobile-dynasty-2024-8">Ford's</a> C-suite executives were left humbled by <a target="_blank" class="" href="https://www.businessinsider.com/china-electric-vehicles-government-subsidies-win-ev-race-byd-tesla-2024-6">China's electric vehicle makers</a> after taking a test drive in a Chinese-made EV last year, <a target="_blank" class="" href="https://www.wsj.com/business/autos/ford-china-ev-competition-farley-ceo-50ded461">The Wall Street Journal</a> reported on Saturday.Ford CEO <a target="_blank" class="" href="https://www.businessinsider.com/ford-ceo-jim-farley-musk-tesla-cybertruck-dirt-hill-video-2023-11">Jim Farley</a> and CFO John Lawler had visited China in early 2023 when the pair decided to take Changan Automobile's electric SUV for a spin, per The Journal.The Chinese state-owned automaker is a longtime joint-venture partner of Ford's.The quick test drive, in which Farley drove and Lawler rode shotgun, gave the executives a taste of what it was like to ride in a Chinese-made EV.Farley and Lawler were left both shocked and impressed by how smooth and quiet their drive was, The Journal reported."Jim, this is nothing like before," Lawler told Farley, per The Journal."These guys are ahead of us," Lawler added.Farley's fears were piqued again in May when he made another trip to China, The Journal reported."John, this is an existential threat," Farley told Ford board member and former Goldman Sachs executive John Thornton after his trip.Representatives for Ford did not immediately respond to a request for comment sent outside regular business hours.Chinese automakers like BYD have been dominating the EV race. For one, Chinese carmakers have been <a target="_blank" href="https://www.businessinsider.com/byd-saic-chinese-ev-makers-plot-world-takeover-2024-6">making inroads into developing markets</a> like Brazil and Mexico, as well as Southeast Asian countries like Thailand.According to data compiled by technology firm ABI Research for Business Insider, Chinese automakers accounted for 88% of the eV market in Brazil and 70% in Thailand in the first quarter of this year.The rapid ascendance of Chinese-made EVs has since prompted Western governments to introduce trade restrictions on them.In May, the US government <a target="_blank" class="" href="https://www.businessinsider.com/china-evs-tariffs-joe-biden-transport-2024-5">imposed crippling tariffs on Chinese automakers</a>, effectively shutting them out of the US auto market. The European Union followed suit soon after when it <a target="_blank" class="" href="https://www.businessinsider.com/china-electric-vehicles-share-price-europe-tariff-hike-overcapacity-investors-2024-6">introduced tariffs a month later</a>.To be sure, Ford isn't the only American automaker scrambling to compete against the Chinese.Even Tesla, widely considered to be a pioneer in EVs, has faced pressure from the Chinese. In late 2023, BYD <a target="_blank" href="https://www.businessinsider.com/how-chinese-automaker-byd-rose-to-challenge-tesla-2024-4#byd-took-the-ev-crown-from-tesla-briefly-7">briefly dethroned Tesla as the world's largest EV producer</a>.When Tesla held its quarterly earnings call in January, CEO <a target="_blank" class="" href="https://www.businessinsider.com/elon-musk">Elon Musk</a> acknowledged the <a target="_blank" class="" href="https://www.businessinsider.com/elon-musk-tesla-warns-chinese-ev-firms-could-demolish-rivals-2024-1">threat posed by Chinese automakers</a>, calling them "the most competitive car companies in the world.""If there are no trade barriers established, they will pretty much demolish most other car companies in the world," Musk told investors at the time.

You Searched For "auto makers" and got 12 results

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One of China's hottest new EV makers says it lost $9,200 for each $30,000 smart car it delivered

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Ford's CEO and CFO took a drive in a Chinese EV. What they said next reveals a lot about the state of the US auto industry.

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