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<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><p class="source"><span>REUTERS/Beck Diefenbach</span></p></div><p></p></div></div>Tesla CEO Elon Musk said demand is so high for cars with the new 100-kilowatt-hour battery option that he is receiving production updates seven days a week for it, he told analysts during the company's third-quarter earnings call Wednesday.</p><p>Musk introduced the new <a href="http://www.businessinsider.com/elon-musk-announces-p100d-battery-for-tesla-model-x-and-model-s-2016-8" target="_blank">100 kWh battery option in August</a> for Model S and Model X cars with Ludicrous mode. The new battery option extends the range of the Model S to 315 miles, making it the first electric car on the market to exceed 300 miles of range. The Model X with the 100 kWh battery option has a range of 289 miles. </p><p>But the battery upgrade doesn't come cheap.</p><p>The Model S P100D with Ludicrous mode starts at $134,500, and the Model X P100D with Ludicrous mode starts at $135,500. Tesla drivers who own a Model S or Model X P90D Ludicrous can upgrade to the 100 kilowatt-hour packs for $20,000. </p><p>But price hasn't deterred people from ordering the P100D cars.</p><p>"I receive daily updates on 100 kWh production because the demand is high and we need to satisfy that demand," he said.</p><p>Musk said his three main priorities include ramping up 100 kWh production, overseeing Model 3 production, and advancing Tesla Autopilot and the newly introduced Fully Self-Driving Capability.</p><p>Musk did not disclose how many orders there have been for the Tesla Model S P100D or Model X P100D. </p><p>A Tesla spokesperson declined to provide figures, stating "We don't break sales down by variant or market. Unfortunately, we can't expand beyond Elon's comments and what's in our shareholder letter."</p>     <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/teslas-model-s-9100d-battery-announcement-elon-musk-2016-8">Tesla cars just got a whole lot better - here's what's changing</a></h3>        <div>            <div>        <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="8ydnhoNTE6HMyUGlXf7vty7ayWamL3zr" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>        </div>        </div>            </div>

Elon Musk: Demand is high for Tesla's newest car

<br /><ul><li><strong>Automakers in India reportedly witnessed the lowest festive season sales due to higher fuel prices and low consumer demand.<br /></strong></li><li><strong>India’s auto industry reportedly saw a 20% year-on-year decline in overall demand during October and November.<br /></strong></li><li><strong>Car and two-wheeler makers also had to raise prices because the falling rupee increased the price of the imported raw material. </strong></li></ul>All hopes of India’s auto industry to witness a surge in the festive season in November crashed when weak buyer sentiment and rising fuel prices led to the worst festive sales in last five years, <em>BloombergQuint </em><a href="https://www.bloombergquint.com/business/auto-makers-stare-at-worst-festive-sales-in-five-years#gs.CcPXsk0">reported</a>.<br /><br />The entire auto industry suffered weak sales on the back of 20% year-on-year decline in the overall demand between October and November, said the report, citing Saharsh Damani, Chief Executive Officer of Federation of Automobile Dealers Association. <br /><br />Even though the enquiries for two-wheelers and passenger cars by potential customers were high, they didn’t transform into sales, according to the report. Car and two-wheeler makers also had to raise prices because the falling rupee increased the customs duty imposed on auto raw materials.<br /><br />The Indian currency <a href="https://www.deccanherald.com/national/rbi-lets-oil-firms-raise-cheap-696083.html">shed</a> 15% this year by<a href="https://www.businesstoday.in/current/economy-politics/rupee-recovery-to-unwind-currency-seen-falling-year-end-ing-bank/story/286114.html"> sliding </a> to an all-time low of 74.48 against the US dollar in October.<br /><br />As a result, the industry saw a pile up in inventory, from a ‘healthy inventory level’ of 21 days to 45-50 days.<br /> <br />SEE ALSO : <br /><a href="https://www.businessinsider.in/after-weeks-of-tension-the-reserve-bank-of-india-gives-in-to-some-of-the-central-governments-demands-while-retaining-its-independence/articleshow/66705908.cms">After weeks of tension, the Reserve Bank of India gives in to some of the central government's demands while retaining its independence</a><br /><br /><a href="https://www.businessinsider.in/india-may-have-a-tough-time-meeting-its-solar-energy-capacity-targets-as-developers-steer-clear-of-government-auctions/articleshow/66690129.cms">India may have a tough time meeting its solar energy capacity targets as developers steer clear of government auctions</a><br /><br /><a href="https://www.businessinsider.in/india-secures-japans-help-in-saving-the-rupee-by-signing-its-largest-currency-swap-agreement-with-the-country-ever/articleshow/66427088.cms">India secures Japan’s help in saving the rupee by signing its largest currency swap agreement with the country ever</a><br />

Why Indian automakers saw the worst festive season sales in November

<ul class="summary-list"><li>Want to ditch your gas guzzler for an electric vehicle? Get in line. </li><li>Car companies like Ford, Volkswagen, and Mercedes are sold out of EVs for months to come. </li></ul><p>For years, the world's car companies were hesitant to go all-in on <keyword id="6358835" type="UNKNOWN" weightage="60" keywordseo="electric-cars" source="Orion">electric cars</keyword>. Now they can't make them fast enough. </p><p>Anyone looking to make the switch from dirty fossil fuels to clean battery power may be in for a long wait. </p><p>The supply of all new vehicles has been constrained throughout the pandemic <a href="https://www.businessinsider.com/why-is-there-chip-shortage-car-companies-electronics-supply-chain-2021-2">due to a range of supply-chain issues</a>, but the shortages are more acute in the electric-vehicle market, which doesn't have nearly as many options to begin with. Carmakers also say demand for their electric models has proved stronger than anticipated. </p><p>This month, Volkswagen Group CEO Herbert Diess said the company is <a href="https://www.ft.com/content/96b7acaf-7984-4eab-83d7-940aa4ca20d4">"basically sold out"</a> of EVs in the US and Europe for the rest of 2022 because of higher-than-expected demand. That suggests that anyone looking for an electric model from the conglomerate — whether it's a Porsche Taycan, a <a href="https://www.businessinsider.com/volkswagen-vw-id4-awd-affordable-electric-crossover-suv-review-2021-12">Volkswagen ID.4</a>, or an Audi E-Tron — will have to sit tight for at least several months. </p><div type="image" title="The Volkswagen ID.4 Pro S AWD." height="1505" width="2671" msid="91624048" hostid="261"></div><p>"That's largely true for us as well," Mercedes-Benz CEO Ola Kallenius said at the same event. Mercedes-Benz <a href="https://www.businessinsider.com/mercedes-eqs-electric-car-beats-tesla-range-test-2021-11">recently launched the $103,000 EQS, a high-end electric sedan. </a></p><p>Ford CEO Jim Farley said in March that the Detroit automaker is similarly <a href="https://ceraweek.com/program/dinner-dialogue-autos-electric-power-making-the-connecti-6419-803306/">sold out</a> of its Mustang Mach-E SUV and <a href="https://www.businessinsider.com/ford-f150-lightning-electric-price-pickup-review-first-drive-2022-5">F-150 Lightning pickup truck</a> "for a couple of years now." The ongoing computer-chip shortage plays a part in that, Farley said, but the company is "completely oversubscribed."</p><p>Ford stopped taking reservations for its electric truck after amassing 200,000 preorders. Orders are closed for the 2022 Mach-E as well, so buyers who want to custom order their SUV will need to wait until the 2023 model year. </p><div type="image" title="Mercedes-Benz EQS 450+ electric car." height="1592" width="2123" msid="91624049" hostid="261"></div><p>The public should take these declarations with a grain of salt, since it's in an automaker's interest to give the impression that its vehicles are flying off the proverbial shelves, Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions, told Insider. </p><p>"The announcements are a combination of parts shortages and PR hype," Fiorani said. </p><p>Still, the comments reflect the broader state of the electric-car market. Right now, it's tough to get one's hands on a new battery-powered model in a pinch. Moreover, interest in EVs has <a href="https://www.businessinsider.com/gas-prices-buy-electric-car-ev-ukraine-russia-2022-3">surged</a> as of late <a href="https://www.businessinsider.com/reviews/out?u=https%3A%2F%2Fwww.edmunds.com%2Findustry%2Fpress%2Fmore-american-car-shoppers-consider-going-green-as-gas-prices-climb-to-record-highs-according-to-edmunds-data.html">amid skyrocketing gas prices</a>.  </p><p>Tesla, the world's dominant electric-car company, has grown its production capacity at a furious pace in recent years but still hasn't caught up to demand. Order a base Tesla Model 3 sedan today, and it'll arrive <a href="https://www.tesla.com/model3/design#overview">as late as December</a>, according to the company's website. Some <a href="https://www.tesla.com/modelx/design#overview">Model X SUVs</a> and <a href="https://www.tesla.com/models/design#overview">Model S</a> sedans won't be available until early 2023. </p><div type="image" title="[EMBARGO 9/28 DNP] Rivian R1T" height="1875" width="2500" msid="91624051" hostid="261"></div><p>New EV startups like <a href="https://www.businessinsider.com/how-lucid-peter-rawlinson-plans-beat-tesla-elon-musk-2021-10">Lucid Motors</a> and <a href="https://www.businessinsider.com/rivian-lead-electric-vehicle-ev-revolution-startups-investor-lawsuits-executive-turnover">Rivian</a> recently began delivering their first vehicles, but they do little to help satisfy the growing appetite for electric cars. Customers receiving their Lucid Air sedans and Rivian R1T pickups today placed their orders months or years ago, and anyone who orders one today will have to wait their turn behind thousands of earlier reservation holders.</p><p>Although car companies are trying rapidly grow their EV production to take advantage of economies of scale, they're also taking care not to overbuild, Fiorani said. In these early stages of the EV transition, companies still don't know how deep the demand for electric cars goes. </p><p> "We've been building internal combustion engine vehicles for the masses for well over a century, and building high-volume, relatively low-priced <keyword id="11897958" type="UNKNOWN" weightage="60" keywordseo="electric-vehicles" source="Orion">electric vehicles</keyword> is a new thing," he said. "We just don't know how many people are out there waiting for them."</p>

Car companies can't build enough electric cars to keep up with booming demand

The Covid-19 pandemic's third wave has had a minimal impact on production as well as demand, said automobile major <keyword id="44883" type="General" weightage="20" keywordseo="maruti-suzuki" source="Orion">Maruti Suzuki</keyword>.<br /><br />Notably, the third wave's disruption has been less severe than previous phases of the pandemic.<br /><br />In a conversation with IANS, Maruti Suzuki India's Senior Executive Director, Sales and Marketing, Shashank Srivastava said the company as well as the industry has coped well with the third wave.<br /><br />He pointed out that it took the company 90 days to reach from 0-to-6,000 units production per day during the first wave.<br /><br />"In the second wave, it took us only 18 days to reach this mark. We were able to recover in a short time as we had a good learning experience from the first wave which was implemented in the second wave," Srivastava said.<br /><br />"In the third wave, there has hardly been any disruption with respect to bookings, demand or even the supply chain."<br /><br />Last month, the auto major sold a total of 154,379 units which was lower than the off-take of 160,752 units reported in January 2021, on account of lower production.<br /><br />Furthermore, he cited that an easing in semiconductor supply issue.<br /><br />"You can see next (fiscal) year, the situation becomes much better than what we saw in the second half of this year. However, in terms of production, we will probably not be at 100 per cent production level even in this quarter."<br /><br />In January 2022, the company's total production of passenger as well as commercial vehicles rose to 161,383 units from 160,975 units manufactured during the corresponding month of last year.<br /><br />The global semiconductor shortage has been triggered by the Covid-19 pandemic-induced supply hurdles as well as healthy demand.<br /><br />Accordingly, the phenomenon has been blamed on the exponential rise in demand for personal electronics such as cellphones and laptops during the ongoing pandemic.<br /><br />On a technical basis, semiconductors play a critical part in the production of internal combustion engines. They are an integral part of all kinds of sensors and controls in any vehicle.<br /><br />The shortage has extended waiting periods along with escalated prices.<br /><br />On the cost pressure, he noted that even the higher vehicle prices have not been able to cover the rise in commodity prices.<br /><br />"Despite all these price increases, we still find that the commodity prices have been much larger."<br /><br />"The commodity prices increase in the last 1.5 years have been extremely high. The price hikes which have been undertaken by manufacturers including Maruti Suzuki are not sufficient to cover that and hence the stress on profitability for the auto industry continues."<br /><br /><strong>SEE ALSO: </strong><a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/startups/news/razorpay-goes-global-acquires-malaysian-fintech-startup-curlec/articleshow/89425343.cms">Razorpay goes global, acquires Malaysian fintech startup Curlec</a><br /><a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/startups/news/interview-indias-latest-software-unicorn-is-wetting-its-feet-in-america-after-holding-its-horses-for-seven-years/articleshow/89409491.cms">INTERVIEW: India’s latest software unicorn is wetting its feet in America after holding its horses for seven years</a><br />

Third wave of COVID-19 has had very little impact on production as well as demand, says Maruti Suzuki

<p><div class="image-container float_right" style="width:400px"><div class="image"></div><p class="source">Alex Davies / Business Insider</p><p class="caption">Solaire's ChargePoint station.</p></div>To develop <keyword id="72226" type="COMPANY" weightage="60" keywordseo="New-York-City">New York City</keyword>'s electric vehicle charging infrastructure, Mayor Michael Bloomberg last month <a href="http://www.businessinsider.com/bloomberg-wants-10000-ev-charging-spots-by-2020-2013-2">called for the installation of 10,000 charging spots</a> for electric vehicles over the next seven years.</p>
<p>In June, New York Governor Andrew Cuomo <a href="http://www.governor.ny.gov/press/06062012Charging-Stations">announced a $4.4 million plan</a> to create 353 electric vehicle charging stations across the state.</p>
<p>On Monday, the results of that investment came to Manhattan. ChargePoint, a private provider of EV charging stations, installed a new station in the Solaire, an environmentally-progressive residential building in Battery Park City.</p>
<p>It is the first of more than 80 stations paid for by a $1 million incentive from the New York State Energy Research and Development Authority. ChargePoint will install them throughout the state.</p>
<p>The new station is in the Solaire's garage. The electricity is free; EV owners just need to pay the price of parking in the garage — a good deal for those who would have to park there anyway, and then tack on the cost and hassle of filling the tank with gas.</p>

NYC Is Getting The Electric Car Charging Stations Bloomberg Demanded

Carmakers are shifting their focus to women as the fairer sex is driving the demand of automobiles.<br />
<br />
The manufacturers are making cars that are women-friendly as <a href="http://www.businessinsider.in/searchresult.cms?query=women+drivers&amp;sortorder=effectivedate">women car buyers</a> doubled from 6 per cent to 12 per cent in last five years.<br /> The trend is more visible in the urban market where financially <keyword id="496088" type="UNKNOWN" weightage="20" keywordseo="Independent-women">independent women</keyword> are buying cars.<br />
<br />
<a href="http://www.businessinsider.in/searchresult.cms?query=auto+sector&amp;sortorder=effectivedate">Automobile manufacturers</a> are making cars with clutch-less transmission, rear parking cameras, electronically foldable mirrors and navigation options, for their women customers.<br />
<br />
Reportedly, 15 per cent of the demand for <a href="http://www.businessinsider.in/searchresult.cms?query=renault&amp;sortorder=effectivedate">Renault's</a> Kwid is from women.<br />
<br />
As per <a href="http://www.businessinsider.in/searchresult.cms?query=maruti&amp;sortorder=effectivedate">Maruti</a>, 41 per cent of its female customers are aged less than 35 years.<br />
<br /> At <keyword id="596" type="CITY" weightage="20" keywordseo="Hyundai">Hyundai</keyword> India, 15-17 per cent of sales is to women though an estimated 25-30 per cent of the vehicles sold by it is used by women, Rakesh Srivastava, senior vice-president for sales and marketing, told ET.<br />
<br />
Not only compact and small cars; demand has also gone up with <a href="http://www.businessinsider.in/searchresult.cms?query=mercedes+benz&amp;sortorder=effectivedate">Mercedes-Benz India</a>, which is selling 12 per cent of its vehicles to women.<br />
<br />
Mohit Arora, vice-president, JD Powers Asia Pacific, told ET, “I think a lot needs to be done for vehicle safety, traffic conditions. Some of these things need to be changed before you see a massive adoption in terms of women driving cars personally in India.”<br />
<br />
(Image: Indiatimes)<br />

Automakers are making women-friendly cars as empowered, independent women are driving sales

<br />
	It seems that second hand dealers would soon be raking in the moolah! Following the <a href="http://www.businessinsider.in/Supreme-Court-slaps-temporary-ban-on-luxury-diesel-car-sales-in-Delhi/articleshow/50199800.cms">Supreme Court’s ban </a>on diesel cars in Delhi, used cars have witnessed a sudden surge in demand in the Delhi-NCR region.<br />
	<br />
	According to the data compiled by Car Dekho, an online auto marketplace, enquiries for <a href="http://www.businessinsider.in/NGTs-ban-on-registration-of-diesel-vehicles-in-Delhi-spells-more-woes-for-auto-industry/articleshow/50184296.cms">diesel cars</a> from major brands such as Mahindra, Ford and <a href="http://www.businessinsider.in/General-Motors-India-to-recall-101597-Beat-diesel-cars/articleshow/50187422.cms">General Motors</a> rose tremendously in the secondhand car market. But this trend is not restricted to mass brands only. Interestingly, the numbers reveal that the luxury segment too saw a whopping increase of nearly 200% in the used cars category.<br />
	<br /> While German luxury auto majors such as <keyword id="6363321" type="CITY" weightage="20" keywordseo="Audi">Audi</keyword> and <keyword id="6355119" type="CITY" weightage="20" keywordseo="BMW">BMW</keyword> are probably some of the worst hit in the new car category due to the ban, in the used car segment, these brands are majorly in demand.<br />
	<br /> The survey revealed that Audi’s Q7, BMW’s 7 series have recorded a whopping 167% and 150% increase in their demand respectively in the second-hand segment. On the other hand, old-man’s car, <keyword id="6357420" type="CITY" weightage="20" keywordseo="mercedes">Mercedes</keyword>’A, E and GL Class, only saw a 75%, 68% and 67% increase in their demand respectively. <br />
	<br /> In the mass market, while brands such as Hyundai, <keyword id="42747" type="CITY" weightage="20" keywordseo="Tata-Motors">Tata Motors</keyword>, <keyword id="6374528" type="CITY" weightage="20" keywordseo="Toyota">Toyota</keyword>, Mahindra were adversely affected by the ban, there has been surge in the demand for their popular SUV models in the second hand market. Mahindra’s Ssangyong Rexton saw a 13% increase in its demand while Scorpio and XUV 500 recorded a 32% and 17% increase in their demand in the used car market. Toyota’s Fortuner while saw 66% decline in demand in the new car, it registered a 55% rise in its demand in the second hand car market.<br />
	<br />
	Overall, there was a 27% decline in new car leads for diesel SUV segment while used car leads for these models increased by 17% simultaneously. The SC’s order to ban big diesel cars in the city in order to curb <a href="http://www.businessinsider.in/Heres-what-is-killing-India/articleshow/49918471.cms">air pollution</a> has dented these top auto majors.<br />
	<br />
	“We foresee that the demand for used cars in this segment could see a further increase if the ban continues for a longer duration,” said the report. <br />
	<br />
	<em>Image Credit: Indiatimes.com</em>

Can’t buy that new SUV? So what! Make do with
a used one

<p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span><a href="https://www.flickr.com/photos/jasonparis/4066110187/">Jason Paris / Flickr, CC</a></span></p><p class="caption">But the worst may be over!</p></div><p></p></div></div></p><ul class="summary-list"><li><strong>New car demand in the US is falling, according to HSBC.</strong></li><li><strong>Honda, Nissan, Ford and General Motors have announced thousands of job cuts in Europe.</strong></li><li><strong>Trade wars are hurting <keyword id="6356001" type="UNKNOWN" weightage="60" keywordseo="international">international</keyword> auto exports and reducing demand.</strong></li><li><strong>But there is hope - "industrial recessions" don't last very long and there may be an immediate bounce back.</strong>  </li></ul><p>The world is cooling off its love affair with cars, and that is a factor pushing the global economy toward recession, according to two economists at HSBC.</p><p>They produced this chart (below) comparing new car registrations to retail sales in the US to make their point. The US economy has been doing well, and shoppers have kept up their retail demand. But not for automobiles: </p><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>HSBC</span></p><p class="caption">Consumers are buying, just not cars.</p></div><p></p></div></div></p><p>"Car demand is in decline due to a greater focus on environmental policies, increased urbanization and investment in alternatives - be it on- demand cars or public transport," according to HSBC economists Janet Henry and James Pomeroy. (On a side note: This is another piece of anecdotal evidence that ride-sharing apps like <a href="https://www.businessinsider.com/studies-uber-drivenow-demand-private-car-vehicle-sales-2017-8">Uber are reducing the demand for cars</a>.)</p><p>It's not just the US. The car industry in Europe is also shrinking:</p><ul><li><strong>Honda announced it would <a href="https://www.ft.com/content/d1c842f0-3391-11e9-bb0c-42459962a812">close its plant in Swindon</a>, England, with the loss of 3,500 jobs.</strong></li><li><strong>Honda is also <a href="https://www.ft.com/content/ec3a094a-33a3-11e9-bb0c-42459962a812">closing a factory in Turkey</a>.</strong></li><li><strong>Nissan said it would <a href="https://www.ft.com/content/ac715938-3085-11e9-8744-e7016697f225">not build its X-Trail SUV in Sunderland</a>, England.</strong></li><li><strong>General Motors announced it was <a href="https://www.ft.com/content/1563442e-f18e-11e8-9623-d7f9881e729f">shutting seven plants globally</a> in November 2018, with 14,000 jobs lost, reduced or moved.</strong></li><li><strong>Ford is <a href="https://www.ft.com/content/1f85c9ee-14a8-11e9-a581-4ff78404524e">cutting operations in Europe</a> with the loss of "thousands" of jobs.</strong></li><li><strong>Jaguar Land Rover said in January it would <a href="https://www.ft.com/content/c4f06f8e-ff99-11e8-aebf-99e208d3e521">cut 5,000 jobs</a> in the UK.</strong></li></ul><p>"Parts of the world are already in industrial recession," Henry and Pomeroy said in a note to clients seen by Business Insider.</p><p>The HSBC pair are most concerned about the overall reduction in global trade and the effect that has had on global exports. Trade wars - US v China and Britain v the EU - have hit manufacturers the hardest as companies and consumers try to reduce their exposure to uncertain international markets. In so doing they have reduced their total aggregate economic output, hurting jobs.</p><h2>"Much of the weakness in the global economy has been concentrated in the manufacturing sector"</h2><p>The damage has been uneven. The US and China are both still doing relatively well thanks to their respective governments' fiscal stimuli. But industrial production in Europe and Japan are suffering.</p><p>"The surprise indices for the Eurozone and LatAm have collapsed since mid-2018 and consensus growth forecasts for the major economies have been lowered aggressively over the past six months or so," the HSBC note says.</p><p>"The consensus estimates for the US and China in 2018 are still completely unchanged from their June forecasts, while the full-year outturn for German GDP growth of 1.5% was 0.9% percentage points below its April consensus forecast. Japan's was 0.7ppts below and the latest consensus for Latin America is 1.2ppts below the mid-year consensus high."</p><p><div class="KonaFilter image-container display-table click-to-enlarge"><div><div class="image on-image"><a title_source="HSBC" title_caption="A " surprise="" index="" shows="" an="" average="" of="" whether="" economic="" data="" beat="" or="" miss="" forecasts="" and="" by="" how="" much.="" class="zoomin" href="https://static-ssl.businessinsider.com/image/5c6bde0d1631a33aa524b863-960/screenshot 2019-02-19 at 101155.png"><span class="sprites click-to-enlarge-icon" title="Click to enlarge"></span></a><p class="source"><span>HSBC</span></p><p class="caption">A "surprise index" shows an average of whether economic data beat or miss forecasts, and by how much.</p></div><p></p></div></div></p><p>"Much of the weakness in the global economy has been concentrated in the manufacturing sector: the global manufacturing PMI has dropped by 3.6 points since the beginning of 2018 while the services PMI has edged down by 1.6 points," the note says.</p><p>There may already be light at the end of the tunnel. "Industrial recessions" tend to be short, just a couple of quarters. And a majority of the major economies are based in services not manufacturing. In Germany, analysts expect the industrial sector to bounce back from a contraction in the second half of 2018.</p><p>"There are tentative signs that the worst of the industrial downturn may now be behind us in Europe and Japan, particularly as some of the one-off country-specific factors start to wane," Henry and Pomeroy say.</p><h1>Read more about the troubles of the auto industry:</h1><p><a href="https://www.businessinsider.com/car-auto-sales-recession-2019-2">Cars are driving us toward recession</a></p><p><a href="https://www.businessinsider.com/studies-uber-drivenow-demand-private-car-vehicle-sales-2017-8" data-read-more-link="" data-e2e-name="read-more-link">Apps like Uber and DriveNow may be hurting the demand for new cars, studies suggest</a></p><p><a href="https://www.businessinsider.com/uk-car-finance-pcp-mortgage-market-morgan-stanley-2017-7?r=UK" data-read-more-link="" data-e2e-name="read-more-link">The UK car business has 'exactly the same problems' as the mortgage market 10 years ago, according to Morgan Stanley</a></p><p><a href="https://www.businessinsider.com/british-people-stopped-buying-cars-2017-9" data-read-more-link="" data-e2e-name="read-more-link">British people have suddenly stopped buying cars</a></p> <p class="tagline">Get the latest Ford stock price<a href="http://markets.businessinsider.com/stock/f-Quote"> <strong>here.</strong></a></p>    <div class="margin-top">        <h3>NOW WATCH: <a href="https://www.businessinsider.com/earth-north-south-poles-flip-magnetic-field-2018-4">Earth's north magnetic pole is on the move - here's what will happen when our poles flip</a></h3>        <div>                    </div>    </div>

The failing automobile industry is pushing us toward a global recession

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><p class="source"><span><a href="http://www.flickr.com/photos/flyingsaab/7173497139/">Phil Denton / Creative Commons</a></span></p><p class="caption">A Tesla store.</p></div><p></p></div></div>Consumer Reports just handed down a not-very-good review of the Tesla Model X, calling the all-electric SUV that launched last year "<a href="http://www.businessinsider.com/consumer-reports-reviews-tesla-model-x-suv-2016-11">more showy than practical</a>."</p><p>On balance, Consumer Reports appreciated the Model X for its speed and handling, but found things to dislike about some of the vehicle's more complicated aspects.</p><p>Tesla responded to the review by saying the company has spent almost a year dealing with early Model X production issues - and noting that Model X owners are overwhelmingly delighted by their vehicles. For the record, Business Insider's Ben Zhang and I were <a href="http://www.businessinsider.com/we-took-the-tesla-model-x-suv-for-a-spin-in-manhattan-and-were-blown-away-2016-2">quite impressed by the Model X</a> when we experienced it (briefly) in March.</p><p>The Consumer Reports review set off a flurry of fretting about Tesla - nothing out of the ordinary, as every time negative news about the company's cars hits, concerns arise about whether Tesla can really grow as big and as rapidly as CEO Elon Musk wants it to, achieving 500,000 in annual deliveries by 2018.</p><p>The key question is always the same: Is <em>demand</em> for Teslas really out there?</p><h2>Demand is actually mind-blowing</h2><p>This is an easy question to answer. There's probably more demand for Tesla vehicles than would be satisfied even if Musk's goal of half a million cars was met.</p><p>The bottom line is that Tesla will never have trouble selling its cars, at least not until it cranks up production to the same levels of other major global automakers. For the time being, Tesla's biggest challenge remains <em>managing</em> the demand it can almost effortlessly create.</p><p>Musk has addressed this challenge often. When the Model 3 mass-market vehicle - scheduled to arrive in late 2017, priced at around $30,000 after tax credits - was unveiled earlier this year, Tesla swiftly racked up almost 400,0oo advance reservations at $1,000 a pop.</p><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>Tesla</span></p><p class="caption">The Model 3 unveiling.</p></div><p></p></div></div></p><p>Musk later reminded analysts that all the company did was post a few tweets and live-stream the unveiling event in Los Angeles.</p><p>Let's be perfectly clear: This is one of the largest and most important happenings in the history of the automobile industry. In over a century, no carmaker has even come close to witnessing so much demand for an unavailable vehicle. A General Motors or Toyota would kill to have such a stunning amount of enthusiasm, backed up by cash money, for a new car or truck. But it can't kill, so it spends billions on marketing and advertising.</p><p>Tesla, for all practical purposes, spends zero on marketing and advertising - although Musk, in a spirit of charity, says that someday it will, because the media requires advertising spending to stay alive. The company sends emails, holds customer events, has a small but intrepid communications team, and lets Musk do his thing on Twitter. That's it.</p><h2>Tesla versus the rest</h2><p>And that's been it for pretty much Tesla's entire history. The carmaker has gone from delivering no vehicles to delivering close to 100,000 in 2016 without committing a red cent to stoking demand. During that same period, Ford and General Motors spent something like a combined <em>$6 billion</em> on advertising - in the US alone.</p><p>They sold a lot more cars than Tesla during that period, and kept the lights on and the martinis flowing at numerous ad agencies. But their cost per sale in terms of marketing was basically 100% higher.</p><p>Musk is already the <a href="http://www.businessinsider.com/elon-musk-is-the-greatest-car-salesman-who-has-ever-lived-2016-10">greatest car salesman who has ever lived</a>, and Tesla sales operations have to be considered the most efficient that the auto industry has ever seen. Other car companies have enviable sales and profits based on limited obvious advertising spending. Ferrari leaps to mind, as demand for its cars, by design, always outpaces supply - and the cars all sell for well over $100,000.</p><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>Getty Images/ Scott Olson</span></p><p class="caption">C'mon, you know you want one!</p></div><p></p></div></div></p><p>But Ferrari also spends something like half a billion dollars annually on its Formula One racing team - the Italian automaker's primary form of advertising.</p><p>Against the backdrop of this sort of business-as-usual yearly cash burn to generate profitable demand, raising concerns about whether Tesla is about to see an exodus of interest in its vehicles simply because Consumer Reports has some complaints about the Model X is kind of <em>insane</em>.</p><p>I'm not even sure it would be sensible to calculate the return Tesla might theoretically get on every $1 in incremental ad spending. Such an effort might cause a rupture in reality because it would be astonishingly higher - considering Tesla's scale of production - than any carmaker's, ever, in human history.</p><h2>Reality check</h2><p>None of this means Tesla's stratospheric market cap of about $30 billion is justified, nor should it reassure any Tesla investors, analysts, or observers that the company will be able to deftly surmount the many, many hurdles it faces in the future as it transitions from being a niche Silicon Valley luxury electric-car maker to a truly major force in the global auto industry.</p><p>We should also look skeptically at the overall electric-car market, which represents 1% of vehicle sales worldwide. Assuming that Tesla demand is the same as electric-car demand is a gigantic mistake that many otherwise sensible major automakers are making. (Not that Musk is discouraged - far from worrying about all the so-called Tesla killers aiming to take him out, he's delighted that more automakers are taking up the "electric" banner.)</p><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>Matthew DeBord</span></p><p class="caption">And the Model 3 preorders roll in.</p></div><p></p></div></div></p><p>But no one can scoff at Tesla's 375,000 preorders for the Model 3. And it's far from clear that those preorders are the limit for an affordable long-range EV. My feeling is that Tesla could sell a million vehicles if it committed to that scale of manufacturing - no easy task, and one that the company might not be able to manage on its own - and have them on the world's roads over the next decade.</p><p>That figure has, of course, been criticized. Will all those people make good on their commitment to buy a Model 3?</p><p>It doesn't matter. If Tesla converts only one of every two preorders into a sale, it would still be an astounding business accomplishment. The Tesla naysayers who reliably fixate on the noisy negative news around the company would be wise to more closely monitor the salient signals.</p><p>It boils down to this: There is currently more demand for Tesla vehicles than could be satisfied with <em>more than triple</em> its late-2016 production levels. For one car. That no one has even test-driven yet.</p><p>It could be decades before Tesla has anything that even remotely resembles a sales problem. Get used to it.</p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/tesla-how-self-driving-car-sees-road-2016-11">Tesla reveals how your self-driving car sees the road</a></h3>        <div>            <div>        <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="U0Ym5yNzE6JVehzfvAL7o4lu7-8AEnZv" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>        </div>        </div>            </div>

Tesla will never have to worry about selling cars

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><p class="source"><span>Chrysler</span></p><p class="caption">FCA will introduce an all-electric Tesla at CES.</p></div><p></p></div></div>One of the biggest critics of electric cars also runs one of the worlds largest automakers.</p><p>Fiat Chrysler Automobiles CEO Sergio Marchionne has as much as begged customers to avoid buying his electric vehicles (EVs) because he loses so much money on them.</p><p>Demand for EVs isn't just weak - it's practically non-existent. Globally, electric cars have captured only 1% of the market.</p><p>Meanwhile, in the US alone, new sales records have been set as pickups trucks and SUVs powered by gas motors have experienced a massive resurgence in popularity.</p><p>It's not like the world's carmakers are <em>against </em>EVs. They've all seen Tesla make a business out of them, really from nothing, in just a decade. </p><p>The issue is that they shouldn't want to commit to building and marketing cars that consumers don't want. And make no mistake about it, consumers are not showing runaway EV interest.</p><p>There have now been perfectly viable, affordable, and technologically sophisticated electric cars in the market for the better part of ten years. And sales haven't improved to the extent that a carmaker would <em>normally</em> think about spending the billions necessary to develop new fleets of EVs.</p><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>REUTERS/Rebecca Cook</span></p><p class="caption">Sergio Marchionne, FCA's CEO.</p></div><p></p></div></div></p><p>And yet, the EVs just keep on coming. Now, even Marchionne is changing his tune, <a href="https://www.bloomberg.com/news/articles/2016-12-09/fiat-chrysler-said-to-reveal-full-electric-vehicle-at-ces">as Bloomberg reported</a>. The carmaker will reveal an all-electric version of its Pacifica minivan at the Consumer Electronics Show in Las Vegas in January, wrote <span>Tommaso Ebhardt and Jamie Butters.</span></p><p>"'A key theme for 2017 will be the increased availability of <span>battery electric and plug-in hybrid vehicles," Bloomberg </span><span>Intelligence analyst Michael Dean told reporters. </span><span>'This provides a dilemma </span><span>for automakers as they sacrifice traditional cash-cow internal </span><span>combustion engine sales for expensive and lower-margin electric </span><span>cars, necessary to meet onerous new emissions legislation.'"</span></p><p><span>All these new EVs look cool and point toward a future in which the old-school gas motor will be a museum piece. Unfortunately, for the vast majority of consumers, the new wave of EVs are largely science fiction. </span></p><p><span>Increasingly stringent new fuel-economy regulations are indeed driving the development of EVs, rather than natural market demand. The automakers derisively refer to these cars as "compliance vehicles" and undertake them only to be able to continue selling their profit drivers. Okay, that's not entirely why they explore EVs - they want to patent new propulsion technologies so that they don't get left in the dust if there is a big breakthrough that dramatically shifts that market.</span></p><p><span>The big car companies are hoping that a Donald Trump administration will give them a break on fuel-economy and emissions regulations. It remains to be seen if that will happen. But until then, the EVs will keep on coming, even if nobody wants to buy them.</span></p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/tesla-how-self-driving-car-sees-road-2016-11">Tesla reveals how your self-driving car sees the road</a></h3>        <div>            <div>        <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="U0Ym5yNzE6JVehzfvAL7o4lu7-8AEnZv" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>        </div>        </div>            </div>

Demand for electric cars is low - but automakers continue to roll them out

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image"><p class="source"><span><a href="http://www.flickr.com/photos/yourdon/2847281670/sizes/o/in/photostream/">Flickr/Ed Yourdon</a></span></p></div><p></p></div></div>If a <a href="http://nypost.com/2014/06/10/the-high-price-of-hiring-a-new-york-babysitter/" target="_blank">new report in The New York Post</a> is to be believed, the latest accessory for Manhattan's wealthy is a babysitter.</p>
<p>These days, New York City babysitters are "demanding" $20+ per hour wages, Nobu takeout, and VIP car services to take them home, according to the Post. Some even require car access get shoes from Barney's for "being paid essentially to just sit," as one sitter put it.</p>
<p>It's true that NYC babysitters are the highest-paid in the nation, <a href="http://www.businessinsider.com/nyc-babysitters-earn-15-an-hour-2014-5" target="_blank">according to UrbanSitter</a>. It's also true that some high-end babysitting services are even asking $30+ per hour for their staff.</p>
<p><a href="http://www.sittersstudio.com/" target="_blank">Sitters Studio</a>, an art-centric babysitting firm, charges $30 per hour with a $20 booking fee and a minimum of four hours, according to The Post. Another babysitting referral service called <a href="http://www.hamptonsbabysitters.com/" target="_blank">Hamptons Babysitters</a> charges $33 per hour with a $25 booking fee and three-hour minimum.</p>
<p>The Post also mentioned <a href="http://www.luckylildarlings.com/" target="_blank">Lucky Lil' Darlings</a>, a "family care solutions company" that charges $300 per year for membership, $23 per hour, and requires mandatory cab fare home after 9 PM. The website claims it's worth it, given that "Every LLD sitter is hand-selected, college-educated, experienced and undergoes a rigorous interview and background check process."</p>
<p>Not all New York babysitters are raking it in, of course.</p>
<p>When we browsed <a href="https://www.urbansitter.com/" target="_blank">UrbanSitter</a> - one of the largest babysitting booking websites in the country - we saw that many <a href="https://www.urbansitter.com/find-babysitters/ny/new-york" target="_blank">New York sitters</a> were asking for $15 per hour, with some going as low as $11 per hour. This also fits with a <a href="http://www.businessinsider.com/nyc-babysitters-earn-15-an-hour-2014-5" target="_blank">recent UrbanSitter report</a> that says the hourly rate of its NYC sitters has <a href="http://www.urbansitter.com/blog/2nd-annual-national-childcare-rate-survey-babysitting-rates-nanny-rates/" target="_blank">jumped from $13.50</a> to $15.34 in the last year - far below the $30+ per-hour rates claimed by The Post.</p>
<p>And while that's still more expensive than babysitters in the rest of the U.S., as one NYC mother told The Post, "that's the high price of living here."</p>

Babysitters For New York's Wealthy Demand Car Service, Sushi, And Cash

<ul class="summary-list"><li>10-20% of car shoppers are sidelined by affordability issues, one expert estimates.</li><li>More affordable car segments were most popular among buyers in July.</li></ul><p>The automotive industry is in danger of running out of rich people, according to one economist.</p><p>Cox Automotive's chief economist, Jonathan Smoke, spoke at a recent industry conference about the effect a "bifurcated economy" is having on the car business. Wealthy consumers are still willing to pay up for expensive cars, while another 10-20% of the market is sidelined by <a target="_blank" class="" href="https://www.businessinsider.com/car-buying-shopping-tips-dealers-inventory-pricing-interest-rates-pandemic-2023-3">affordability issues</a>, he said.</p><p>The average price paid for a new car in July was $48,401, according to Kelley Blue Book estimates. While <a target="_blank" class="" href="https://www.businessinsider.com/the-new-car-market-is-a-little-less-brutal-2024-3">affordability has been improving</a> since the pandemic when vehicle shortages and a lack of deals sent prices skyrocketing, Smoke said consumers with subprime credit are facing more pronounced affordability challenges.</p><p>That could pose a problem for car companies, which still rely on big, expensive cars to <a target="_blank" href="https://www.businessinsider.com/tesla-challenges-amid-hybrid-craze-ford-gm-gas-profits-2024-4">support their bottom lines</a>.</p><p>US car sales last month reflected a demand shift toward more affordable segments despite the industry's high average transaction price.</p><p>Small and midsize SUVs are some of the most popular vehicles in the US market—1 in 4 vehicle sales in July were in these segments. According to Cox data, these cars are getting the most <a target="_blank" href="https://www.businessinsider.com/car-buying-tips-discounts-incentives-rebates-increase-high-interest-rates-2023-3">discounts</a> in the industry right now, leading to transaction prices between $30,000 and $36,000.</p><p>Smoke said this "tale of two cities" version of the automotive industry is leading to underperformance, with the new and used car markets combined operating between 5 and 10% below the industry's true potential, according to analyst recaps from the event. </p><h2 id="90815556-a2b0-4d84-8491-28bcf85f445b">What happens when the auto industry runs out of rich people?</h2><p>Other studies paint an even gloomier picture of the industry right now, with some industry experts warning car companies to course-correct on affordability.</p><p>A recent report from <a target="_blank" class="" href="https://www.cars.com/articles/new-car-market-sees-sharp-decline-in-sub-30000-vehicles-according-to-cars-commerce-industry-insights-report-487951/">Cars.com</a> found that new car demand was down 26% in July, compared to the same month a year ago, while new car supply has risen 45% in the same period.</p><p>The same report, released monthly by the car-shopping website and based on pricing and consumer behavior data from across the company's platform, found that the US car market has lost more than 750,000 sub-$30,000 vehicles since 2019.</p><p>Smoke has already warned about the impact a lack of affordable options can have on the automotive industry. Earlier this year, he said the US car market is on the verge of what economists call a <a target="_blank" class="" href="https://www.businessinsider.com/auto-industry-facing-deflationary-spiral-as-people-delay-buying-2024-6">"deflationary spiral,"</a> which occurs when delayed purchases cause supply to pile up and pressure prices.</p><p>We're already seeing a microcosm of this issue playing out <a target="_blank" class="" href="https://www.businessinsider.com/electric-vehicle-misconceptions-about-the-ev-transition-market-sales-2024-5">in the EV market</a>, where demand has shifted sharply away from large and expensive electric cars to more practical vehicles in the segment.</p><p>That has left car companies scrambling to amend their EV strategies and pushed out predictions for when car companies — other than <a target="_blank" class="" href="https://www.businessinsider.com/tesla-can-make-cars-cheaper-than-competitors-2024-6">Tesla</a> — will be able to profit from battery-powered cars.</p>

A 'bifurcated economy' is keeping some car buyers out of the market

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image"><p class="source"><span>Screenshot via Prazo</span></p><p class="caption">A look at the Prazo app.</p></div><p></p></div></div>All the talk about millennials shunning car ownership in favor of the Ubers and Lyfts of the world may be misplaced.<br /><br />At least that's the bet being made by Jon Alain Guzik, the founder of Prazo, a new car-leasing app that's launching next year.</p><p>It's based on the notion that twenty-somethings still want to drive, and they still want to have their own cars, Guzik said in a conversation with Business Insider.<br /><br />Prazo aims to be the go-to place for all things <keyword id="34991" type="ORGANIZATION" weightage="100" keywordseo="transportation">transportation</keyword> - with ambitious plans to lease cars through smartphones and also offer a host of other services all for the cost of a typical car lease. <br /><br />"For example, if your car needs a service, we'll pick it up, take it to the dealer, and return it to you when it's done," Guzik said. "We're trying to be the Amazon Prime of cars."<br /><br /><em>Guzik also started RideApart, which is part of BI's contributor network.</em></p><p>Prazo targets the car-leasing market exclusively, a segment where millennials accounted for some 30% of the $17 billion market this year.</p><p>And for that 20-to-30-something demographic, Prazo's 2-year commitment to a new-car lease mirrors the model of upgrading to a new smartphone.</p><p>From the start, every contact between the user and the company will be through the app. Guzik cites millennials' heavy reliance on mobile devices - more than 45% of whom use them exclusively - to explain that model.</p><p><div class="KonaFilter image-container display-table float_left float_right"><div><div class="image"><p class="source"><span>Screenshot via Prazo</span></p><p class="caption">A mock-up of a customized 2016 Ford C-Max from Prazo.</p></div><p></p></div></div>Prazo's planning to open for business early next year with one vehicle: the 2016 Ford C-Max - a 5-door hybrid that will be customized by Prazo's dealer-partner, the Los Angeles-based Galpin Motors.</p><p>More vehicle choices will roll out later.</p><p>The C-Max will be painted ruby red and come with roof racks and tinted windows as standard equipment.</p><p>"We want it to look like it was created just for you," Guzik said.</p><p>The concierge service will go beyond helping service the car. For example, a user might be able to borrow a bike from Prazo - delivered to the car of course.</p><h2>High price tag</h2><p>All of that starts to sound like it might be expensive, but Guzik insists that shoppers will be able to get into the cars "with very little money down," and a monthly payment somewhere around $300.</p><p>That's ambitious, says Jack Nerad, an executive market analyst at Kelley Blue Book. <br /><br />"I'm not sure people will see the value in something like that," Nerad said, "especially when you can lease any new car you want from among some 300 new models, most of which are incentivized."</p><p>Pointing to unemployment and underemployment among some millennials, Nerad suggests a $300 monthly payment for Prazo might be out of the question. <br /><br />"A lot of millennials are just driving used cars because that's what they can afford."</p><p>But, Prazo's role as a transportation concierge adds the kind of extras people won't otherwise get from buying a car the old-fashioned way, Guzik says.</p><p><div class="KonaFilter image-container display-table"><div><div class="image on-image"><p class="source"><span>REUTERS/Carlos Barria</span></p><p class="caption">The old-fashioned way to buy a car.</p></div><p></p></div></div>Still, the on-demand space is crowded and competitive. And while the success of companies like Uber prove people are willing to spend money for convenience, Prazo is no $20 ride across town.</p><p>"It will be a tough sell only because we're a new company," Guzik admitted, but he emphasized that it's important for Prazo to get that "Amazon Prime of cars" idea just right. He says that's also why it's important to reel in those millennials.</p><p>"We want to create an amazingly good value for the user and give them as much free stuff as we can ... if we can make your pennies count a lot more, that's really our main goal."</p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/find-out-uber-passenger-rating-instantaneously-driver-2015-11">Here's how to find out your Uber rating</a></h3>        <div>            <div>        <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="l0a2s4eTo4Zk6e0tey7l9C2gDBEbblAN" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>        </div>        </div>            </div>

This new on-demand transportation app wants to be 'the Amazon Prime of cars'

<ul class="summary-list"><li>China's EV makers are packing their vehicles with high-tech extras in an attempt to woo customers.</li><li>Auto execs and experts say Chinese customers want their cars to be more "intelligent."</li></ul><p>China's legion of EV companies are facing <a target="_blank" href="https://www.businessinsider.com/china-xi-jinping-crush-tesla-elon-musk-american-ev-industry-2024-2">an increasingly brutal fight for customers</a> — and many are packing their vehicles with high-tech features to woo drivers who increasingly want "intelligent" vehicles.</p><p>"The Chinese customer's expectation for an EV is very different compared to the rest of the world," said Nissan CEO Makoto Uchida, speaking at the Financial Times' Future of the Car summit this month.</p><p>He said Chinese customers expect EVs to be "intelligent," fitted with features like autonomous driving, smartphone integration, and plenty of screens, and that Nissan had been forced to adjust its approach and build vehicles "in China, for China" to compete against local carmakers.</p><h2 id="c53a88be-86bb-47db-a189-407e3b2b54a2"><strong>Standing out in a crowded field</strong></h2><p>After languishing in the shadows of Western, Japanese, and Korean automakers for years, those local carmakers are now booming, thanks in part to the massive growth in demand for electric vehicles.</p><p>EVs are expected to account for about 45% of all car sales in China this year, <a target="_blank" href="https://www.iea.org/news/the-worlds-electric-car-fleet-continues-to-grow-strongly-with-2024-sales-set-to-reach-17-million">according to the IEA</a>, and local automakers now make up more than half of total car sales in the country, <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">per Bloomberg data</a>.</p><p>That boom has sparked a wave of competition and a <a target="_blank" href="https://www.businessinsider.com/byd-china-ev-price-war-yuan-plus-tesla-elon-musk-2024-3">brutal price war</a>, with <a target="_blank" href="https://www.businessinsider.com/china-tesla-electric-vehicle-market-dominance-competition-byd-aion-wuling-2024-4">around 123 car companies</a> battling for EV dominance last year.</p><p>To stand out in a crowded field, many Chinese automakers are adding increasingly high-tech and unusual features, from cars that can <a target="_blank" href="https://www.businessinsider.com/nio-et9-ev-china-skyride-intelligent-chassis-snow-video-2024-2">shake themselves free of snow</a> to vehicles that <a target="_blank" href="https://www.businessinsider.com/wildest-evs-unveiled-at-chinas-biggest-auto-show-2024-4">transform into living rooms</a>.</p><div type="image" title="Camouflaged Nio ET9 shaking off snow" height="360" width="640" msid="110232301" hostid="261" sizebytes="16530"></div><p>Paul Li, CEO of China-headquartered EV tech firm U Power, told Business Insider this was all part of a strategy to attract tech-savvy Chinese consumers, who have radically different expectations to US buyers.</p><p>"In China, the EV customer right now is totally different than any customers in the whole world," he said.</p><p>Li said that Chinese consumers expect "a high level of intelligence" from EVs and are willing to pay extra for features such as autonomous driving, smartphone integration, and <a target="_blank" href="https://www.inverse.com/tech/byd-yangwang-u8-electric-suv-dji-drone-price">even onboard drones</a>.</p><p>"The innovation in the Chinese EV market is not only coming from competition, it is coming from innovation-driven customers. A sophisticated market makes sophisticated products," said Li.</p><p>"I very much doubt whether the same level of intelligence is needed for the global market," he added.</p><h2 id="c1162816-02a4-4781-8a27-68b4b15455f4">High-tech EVs prove popular</h2><p>This demand for high-tech features has seen the gap between China's EV makers and its tech firms narrow as both try to capture a segment of China's booming electric car market.</p><p>Nio, a Chinese EV startup and Tesla competitor known for its <a target="_blank" href="https://www.businessinsider.com/ev-battery-swapping-china-rescue-us-revolution-2024-2">network of battery-swapping stations</a>, unveiled its own smartphone last September that allows owners to <a target="_blank" href="https://www.reuters.com/technology/chinese-ev-maker-nio-launches-first-mobile-phone-2023-09-21/">park their cars remotely</a>.</p><p>Smartphone makers Huawei and Xiaomi, meanwhile, are both getting into the EV business, with the latter's SU7 model coming with <a target="_blank" href="https://futurride.com/2024/04/11/xiaomi-su7-highlights-chinese-ev-experience-revolution/#:~:text=HyperEngine%20performance,%2Fh%20(165%20mph).">five screens, smartphone and smart home integration</a>, and Xiaomi's own autonomous driving system.</p><div type="image" title="Zeekr Mix" height="1666" width="2500" msid="110232303" hostid="261" sizebytes="214718"></div><p>Unlike in the US, where the technology is still limited and <a target="_blank" href="https://www.businessinsider.com/tesla-fsd">mired in controversy</a>, autonomous driving systems are fairly <a target="_blank" href="https://www.businessinsider.com/elon-musk-tesla-full-self-driving-technology-china-local-competition-2024-4">common in China</a>, with the likes of Xpeng, Huawei, and Nio all offering the feature.</p><p>They may <a target="_blank" href="https://www.businessinsider.com/elon-musk-tesla-china-visit-self-driving-autonomous-electric-cars-2024-4">soon be joined by Tesla</a>, which is edging closer to releasing its Full Self-Driving technology in China after striking a deal with Chinese tech giant Baidu.</p><p>Even BYD, which has experienced enormous success in <a target="_blank" href="https://www.businessinsider.com/china-byd-electric-car-ev-why-not-coming-to-us-2024-3">selling its cheap EVs to Chinese consumers</a>, is feeling the pressure to make its cars smarter.</p><p>The Warren Buffett-backed automaker announced in January it would <a target="_blank" href="https://www.businessinsider.com/chinese-byd-ev-automaker-launches-smart-car-system-rivals-tesla-2024-1">invest 100 billion yuan ($13.8 billion)</a> in AI-powered features for its vehicles, including improved voice recognition and automated parking.</p><p>"The first half [of the game] is about electrification, the second half is about intelligence," said BYD CEO Wang Chuanfu at the time.</p><p>Experts agree that for EV makers looking to sell their cars in China, smart car features are now essential.</p><p>"Young people in China no longer treat EVs as just vehicles, they want them to [function like] smartphones," Cao Hua, a partner at the Shanghai private equity firm Unity Asset Management, told the <a target="_blank" href="https://www.scmp.com/business/china-business/article/3218745/what-does-chinas-perfect-ev-look-it-must-be-smart-handy-and-have-stamina-go-distance">South China Morning Post</a> last year.</p><p>"Making the cars autonomous and intelligent can draw more Chinese buyers," Hua added.</p>

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