I obviously don’t understand the economics of it and I realize that China will always have the upper hand on price but is there a reason every western EV has to be $40,000+? Like surely it’s possible to build a barebones model for less than 30k right - especially if I don’t need or even want touch screens or fancy interior materials or heated seats or anything.
Europeans get the bulk of cheaper and smaller EVs. Meanwhile in North America, Ford stopped selling sedans. It’s a niche that car makers could fill if they wanted to.
Me too! What is the cost/benefit FOR ME? I understand what it is for the manufacturers but it’s a UX nightmare, especially when you’re trying to drive too.
It’s a combination of issues. In no particular order;
precursor availability: All the stuff that EVs are made of, is made in China. If you want to build EVs it’s easier and cheaper to get all the parts in China than it is in the US
logistics: China has more modern roads, railroads, ports etc. That makes it much easier to get parts in and finished products out
government aid: China has prioritized EVs for a long time and has all kinds of policies to encourage EV production
EV infrastructure: China has more EV charging stations than the US and EU combined
limited ICE competition: China doesn’t have any big ICE vehicle companies. There are no significant groups in China advocating against EVs
Labor costs don’t seem to be a factor at all. EVs are made in modern factories that are almost completely automated. The biggest part of “precursor availability” is likely batteries. The main innovation in EVs was the batteries. The electric motors, chassis, computers, etc are all secondary to batteries that can safely hold a lot of charge and discharge reliably. China dominates that market too.
How about the rare earth materials as well as much more expensive metals in the motor and electronics construction? An ICE engine is well understood and you can pick up a higher performing aluminum block and head crate motor for ~$13k or so. The higher trim Tesla motors are ~$20k, and they can have up to four motors. That’s a huge difference.
China has more rare earth deposits than the US but that’s a bit misleading. Rare earths show up in trace amounts all over the world. China has them in higher concentrations.
The bigger issue is that China has been the main refiner of rare earths for decades. That means they have all the infrastructure for actually making it available and they’ve developed a bunch of technologies and processes to do it way cheaper and more efficiently than anyone else can.
I don’t know the pricing specifics of EV motors but I have some familiarity with electric motors, in general. The technology hasn’t really changed much in a long time. We’ve have 3 phase motors and hall effect sensors for ages. They’re better than older electric motors but the huge technology leap, that made EVs practical, was the batteries.
That’s why I snatched up a Bolt before Chevy (temporarily, they say) discontinued the line. I even did upgrade it a little to get heated/cooling front seats and a heated steering wheel plus the extra safety features. $32.5k with a $7.5k rebate from the federal Clean Vehicle Credit. So $25k for a car with a 175-280 mile range. (175ish in winter when the battery is less efficient, 280 in summer).
Of course the IRS fucked up the point of sale rebate when I was purchasing, but it’s finally incoming with my taxes this year.
Definitely related. EVs are relatively new technology and internal knowledge for engineering R&D, materials, and manufacturing infrastructure all have to be spun up. All this, and you need marketing/planning folks to decide on what sort of vehicle will sell the best against their engineering capabilities.
Touch screens are actually cheaper than physical buttons as it’s the reason why so many electric cars have them. Most of the cost comes from the batteries so they try to save in other areas.
We should see more physical buttons back in newer electric cars as the batteries get cheaper to mass produce.
No kidding, I didn’t know that. I did some checking and it says replacement batteries are $5-15k! Well silver lining is the price is dropping precipitously:
Jan 26, 2024 - According to the DOE, the cost of a lithium-ion EV battery was 89 percent lower in 2022 than it was in 2008
Replacement batteries are really not a concern with EVs. They last longer than most folks expect and they come with pretty lengthy warranties.
It’s still ridiculous how expensive they are to repair or replace, and for sure that will hit some folks hard, but it really should be quite rare to replace an EV’s battery
touch screens are a lot cheaper than buttons because you only need the one. and if one trim level of a car has heated seats, they all do because it’s a lot cheaper to only produce one kind of seat.
Yeah that makes sense, I bet you’re right or at least that’s a large part of it.
Reminds me of this video I saw about economies of scale specifically regarding a special part that went into a guitar. The maker could get the material and produce that part pretty cheaply until the automotive industry stopped using that same material. Suddenly they could barely source the material anymore and just had to cancel the part.
I obviously don’t understand the economics of it and I realize that China will always have the upper hand on price but is there a reason every western EV has to be $40,000+? Like surely it’s possible to build a barebones model for less than 30k right - especially if I don’t need or even want touch screens or fancy interior materials or heated seats or anything.
Higher profit margins.
Europeans get the bulk of cheaper and smaller EVs. Meanwhile in North America, Ford stopped selling sedans. It’s a niche that car makers could fill if they wanted to.
If I specifically don’t want touch screens, what then?
Legally, cars sold in the US have to have a backup cam, so there has to be a screen, so it might as well be a touch screen.
I agree this is dumb and that’s why I drive an old car with nothing but bluetooth
Me too! What is the cost/benefit FOR ME? I understand what it is for the manufacturers but it’s a UX nightmare, especially when you’re trying to drive too.
Western culture is built on delivering value to shareholders first and foremost.
It’s a combination of issues. In no particular order;
Labor costs don’t seem to be a factor at all. EVs are made in modern factories that are almost completely automated. The biggest part of “precursor availability” is likely batteries. The main innovation in EVs was the batteries. The electric motors, chassis, computers, etc are all secondary to batteries that can safely hold a lot of charge and discharge reliably. China dominates that market too.
How about the rare earth materials as well as much more expensive metals in the motor and electronics construction? An ICE engine is well understood and you can pick up a higher performing aluminum block and head crate motor for ~$13k or so. The higher trim Tesla motors are ~$20k, and they can have up to four motors. That’s a huge difference.
No way does an electric motor cost that much.
Have you seen the amount of precision engineering that goes into building a combustion engine? That is ridiculously expensive.
China has more rare earth deposits than the US but that’s a bit misleading. Rare earths show up in trace amounts all over the world. China has them in higher concentrations.
The bigger issue is that China has been the main refiner of rare earths for decades. That means they have all the infrastructure for actually making it available and they’ve developed a bunch of technologies and processes to do it way cheaper and more efficiently than anyone else can.
I don’t know the pricing specifics of EV motors but I have some familiarity with electric motors, in general. The technology hasn’t really changed much in a long time. We’ve have 3 phase motors and hall effect sensors for ages. They’re better than older electric motors but the huge technology leap, that made EVs practical, was the batteries.
That’s why I snatched up a Bolt before Chevy (temporarily, they say) discontinued the line. I even did upgrade it a little to get heated/cooling front seats and a heated steering wheel plus the extra safety features. $32.5k with a $7.5k rebate from the federal Clean Vehicle Credit. So $25k for a car with a 175-280 mile range. (175ish in winter when the battery is less efficient, 280 in summer).
Of course the IRS fucked up the point of sale rebate when I was purchasing, but it’s finally incoming with my taxes this year.
I imagine China is subsidizing the R&D of their EVs while American car companies are trying to recoup those costs
Every major country subsidizes R&D. That’s what federal research grants are all about. The NSF, NIH, etc do exactly that.
Other US subsidies on EVs aren’t specifically restricted to R&D but US companies could apply it to that, if they want.
edit: typo
China has been subsidizing EVs since 2010.
Longer than that. China has been promoting battery technology as a strategic initiative since the 90’s.
Definitely related. EVs are relatively new technology and internal knowledge for engineering R&D, materials, and manufacturing infrastructure all have to be spun up. All this, and you need marketing/planning folks to decide on what sort of vehicle will sell the best against their engineering capabilities.
Touch screens are actually cheaper than physical buttons as it’s the reason why so many electric cars have them. Most of the cost comes from the batteries so they try to save in other areas.
We should see more physical buttons back in newer electric cars as the batteries get cheaper to mass produce.
No kidding, I didn’t know that. I did some checking and it says replacement batteries are $5-15k! Well silver lining is the price is dropping precipitously:
Jan 26, 2024 - According to the DOE, the cost of a lithium-ion EV battery was 89 percent lower in 2022 than it was in 2008
Replacement batteries are really not a concern with EVs. They last longer than most folks expect and they come with pretty lengthy warranties.
It’s still ridiculous how expensive they are to repair or replace, and for sure that will hit some folks hard, but it really should be quite rare to replace an EV’s battery
touch screens are a lot cheaper than buttons because you only need the one. and if one trim level of a car has heated seats, they all do because it’s a lot cheaper to only produce one kind of seat.
car economics are weird.
My guess is that none of them are at scale to the point where the margins are great. To make the margins acceptable price had to go up.
Nothing is really profitable in auto until the whole production line is operating at full scale.
Yeah that makes sense, I bet you’re right or at least that’s a large part of it.
Reminds me of this video I saw about economies of scale specifically regarding a special part that went into a guitar. The maker could get the material and produce that part pretty cheaply until the automotive industry stopped using that same material. Suddenly they could barely source the material anymore and just had to cancel the part.
That’s crazy but makes sense. Basically benefiting from autos overflow.
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Yes it costs more to live in those societies because people are paid more.