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Opinion | China’s Electric Vehicles Are Going to Hit Detroit Like a Wrecking Ball


BYD’s cars deliver great value at prices that beat anything coming out of the West. This month BYD unveiled a plug-in hybrid that gets decent all-electric range and will retail for just over $11,000. How can it do that? Like other Chinese manufacturers, BYD benefits from its home country’s lower labor costs, but this explains only some of its success. The fact is that BYD and other Chinese automakers like Geely, which owns Volvo Cars and Polestar brands, are very good at making cars. They have leveraged China’s dominance of the battery industry and automated production lines to create a juggernaut.

The Chinese automakers, especially BYD, represent something new in the world. They signal that China’s decades-long accretion of economic complexity is almost complete: Whereas the country once made toys and clothes and then made electronics and batteries, now it makes cars and airplanes. What’s more, BYD and other Chinese automakers are becoming virtually global car companies, capable of manufacturing electric cars that can compete directly with gas-burning cars on cost.

That is, on the surface, a good thing. Electric cars need to get cheaper and more abundant if we are to have any hope of meeting our global climate goals. But it poses some immediate and thorny problems for American policymakers. After BYD announced its $11,000 plug-in hybrid, it posted on the Chinese social media platform Weibo that “the price will make petrol car assemblers tremble.” The problem is many of those gasoline-car makers are American.

Ford and GM plotted an ambitious E.V. transition three years ago, but it didn’t take long for them to stumble. Last year Ford lost more than $64,000 on every E.V. that it sold. Since October, it has delayed the opening of one of its new E.V. battery plants, and GM has fumbled the start of its new Ultium battery platform, which is meant to be the foundation for all of its future electric vehicles. Ford and GM have notched some wins here (the Mustang Mach-E and Chevrolet Bolt are modest hits), but they aren’t competing at the level of Tesla and Hyundai — companies that operate factories in less union-friendly states in the Sun Belt.

Jim Farley, Ford’s chief executive, recently disclosed that the company had a secret development team building a cheap, affordable electric car to compete with Tesla and BYD. But producing electric vehicles profitably is an organizational skill, and like any skill, it takes time, effort and money to develop. Even if Ford and GM now bust out innovative new designs, they will lag their competition in executing them well.



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