Saturday, 27 February 2021

This $4,500 electric car is reportedly outselling Tesla's Model 3 in China

 

State-owned Chinese automaker SAIC Motor is reportedly massively outselling Tesla in the country with its electric vehicles that sell for just 28,800 yuan ($4,465).

SAIC Motor sold 25,778 Hong Guang Minis in China in January, compared to 13,843 sales of Tesla's Model 3, the BBC reported, citing data from the China Passenger Car Association (CPCA).

China, which is the world's largest car market and accounts for more than a fifth of Tesla's revenue, is ramping up its efforts to boost electric vehicle sales as it tackles the country's pollution problem.

The four-seat Hong Guang Mini, which has top speeds of 62 mph and an estimated cruising range of 120 miles, is being made as a joint venture between SAIC Motor, Liuzhou Wuling Motors, and General Motors.

a car parked in a parking lot: The Hong Guang Mini comes in four colors. Costfoto/Barcroft Media via Getty Images© Costfoto/Barcroft Media via Getty Images The Hong Guang Mini comes in four colors. Costfoto/Barcroft Media via Getty Images

Its sales could make it the second-best-selling electric car in the world after Tesla's Model 3, the BBC reported.

The cheapest version of Tesla's Model 3 in China costs more than eight times than the Hong Guang Mini's entry-level model.

Tesla began selling its 249,900 yuan (just under $39,000) Shanghai-made Model 3 vehicles in December 2019.

The company is trying to make a more affordable electric car.

In September, CEO Elon Musk said the company would make a $25,000 "fully autonomous" electric car in three years.

The head of Tesla China said the company's Shanghai research and development center, where it will develop the vehicle, would be running by the end of 2021.

Tesla started deliveries of its Shanghai-made Model Ys in January after reducing the pre-order price by 30%.

The Hong Guang Mini isn't Tesla's only rival in China.

As demand for electric vehicles has grown in the country, thanks in part to generous government subsidies, Chinese start-ups Nio, Li Auto, and Xpeng all announced surging sales in 2020.

Nio and Xpeng have both said their sales doubled in 2020 compared with 2019, and Li Auto sold 32,624 cars in 2020, its first full year of trading.

Chinese electric car start-up Li Auto

 

  • Li Auto said late Thursday it expected to deliver between 10,500 and 11,500 cars in the first quarter of the year, or fewer than 4,000 vehicles a month.
  • Nio, which competes directly with Li Auto in the high-end SUV market, has delivered more than 7,000 units in both December and January.
  • Li Auto's only vehicle, the Li One, is a hybrid electric vehicle that comes with a fuel tank for charging the battery.

a blue car parked in front of a building: A Li Xiang One hybrid SUV is on display during the 18th Guangzhou International Automobile Exhibition on November 23, 2020 in Guangzhou, China.© Provided by CNBC A Li Xiang One hybrid SUV is on display during the 18th Guangzhou International Automobile Exhibition on November 23, 2020 in Guangzhou, China.

BEIJING — Nasdaq-listed Chinese automaker Li Auto forecast deliveries below that of its competitors for the first quarter.

Li Auto said late Thursday it expected to deliver between 10,500 and 11,500 cars in the first quarter of the year, or fewer than 4,000 vehicles a month. Shares fell 9.8% in the New York trading session amid a broader market sell-off. The stock shed another 3.75% in after-hours trade.

Nio, which competes directly with Li Auto in the high-end SUV market, has delivered more than 7,000 units in both December and January. The company is set to share its latest financial report on Monday.

Xpeng delivered 5,700 cars in December and more than 6,000 in January.

Why this company is called China's Tesla

Although the start-ups' figures point to rapid growth, they still pale in comparison with Tesla. Elon Musk's electric car company delivered nearly half a million vehicles worldwide last year, or an average of more than 41,000 cars a month.

Even with the Lunar New Year holiday that fell in mid-February this year, Li Auto's weak guidance is concerning, said Tu Le, founder of Beijing-based advisory firm Sino Auto Insights.

He pointed out that versus the other start-ups, the company only has one product, and said to keep up it should deliver at least 5,000 to 7,000 vehicles a month.

Li Auto's only vehicle, the Li One, is a hybrid electric vehicle that comes with a fuel tank for charging the battery.

Analysts have said the feature makes the Li One attractive for Chinese consumers worried about running out of power without access to a charging station.

Last year, the Li One ranked among the top 10 high-end SUVs sold in China regardless of fuel type, according to the passenger car association. However, the company said deliveries fell to 5,379 units in January, down from 6,126 a month earlier.

The company reported total revenue of 4.15 billion yuan ($635.5 million) for the fourth quarter, up from 2.51 billion yuan in the prior quarter.

Li Auto projects total revenue in the first three months of this year to fall within the performance of the last two quarters, with an expected range of 2.94 billion yuan to 3.22 billion yuan.


Thursday, 25 February 2021

Hyundai's recall of 82,000 electric cars is one of the most expensive in history

 

New York (CNN Business)Hyundai will recall 82,000 electric cars globally to replace their batteries after 15 reports of fires involving the vehicles. Despite the relatively small number of cars involved, Hyundai's recall is one of the most expensive in history, signaling how electric car defects could create hefty costs for automakers — at least in the near future.

The recall will cost Hyundai 1 trillion Korean won, or $900 million. On a per-vehicle basis, the average cost is $11,000 — an astronomically high number for a recall.
Replacing an entire battery is an extreme measure, requiring a similar amount of work and expense as replacing an entire engine of a traditional internal combustion-powered car. Very few recalls of gasoline powered cars require an entire engine to be replaced. One of the few exceptions was a 2014 recall of 785 of the Porsche 911 GT3 sports cars. Porsche did not release the cost of that recall, but it was certainly more expensive on a per-vehicle basis than this Hyundai recall.
    Still, a recall costing more than $11,000 per vehicle is extremely rare. Precise figures are not available because most automakers do not disclose the cost of their recalls.
    Because there are so many more gasoline-powered cars on the road than EVs, the total cost of those recalls can easily exceed the $900 million this recall is costing Hyundai. For example General Motors recently took a $1.2 billion charge for the cost of replacing Takata airbags, but that covered 7 million vehicles, meaning the recall cost less than $200 per vehicle. The average cost of an auto recall over the last 10 years was about $500 per vehicle, according to Mike Held, a director in the automotive and industrial practice at AlixPartners, a global consulting firm.
    "Overall, battery safety and durability will be increasingly important if auto companies want to avoid some of the large battery-recall costs that have befallen the consumer-electronics industry," he said.
    The fewer parts on the EVs could also mean that recalls should be less common than for internal combustion-powered cars. But in the near term, there could be significant costs if battery fire problems require battery replacements.

    Battery fires

    No one was injured in any of the Hyundai fires, many of which took place after the cars were shut off and sitting empty. None of the fires took place in the United States. The US National Highway Traffic Safety Administration estimated last October that there are 6,700 electric Hyundai Konas, the US version of the affected vehicles, on American roads.
    Hyundai said an investigation into the fires showed the cars' defective LG-made battery cells could short circuit.
    The recall also covers the Ioniq EV, and Elec City vehicles in South Korea. The recall includes 27,000 Korean vehicles and 55,000 elsewhere in the world.
    Fires involving EV batteries are not unique to these vehicles. GM (GM) is also recalling an earlier version its electric Chevrolet Bolt because of fire problems caused by its own LG battery, although a different model than the one triggering the Hyundai recall.
    GM is not replacing the batteries in the 68,000 Bolts being recalled globally. Of that total, nearly 51,000 are in the United States. While the automaker isn't saying how its problem will be addressed, it is likely to be handled with a software update.
    Tesla (TSLA) also had a problem with battery fires early in its history, but that was tied to road debris kicking up and damaging the batteries. Most EV batteries are installed across the bottom of the car. Tesla dealt with the problem by adding more undercarriage shielding to protect the batteries.
    Gasoline or diesel cars also present fire risks, typically after accidents when drivers and passengers are still in the vehicle, posing a greater safety threat.
    Hyundai said it is still in talks with battery supplier LG Energy Solutions to determine which company will be responsible for the cost. The Korean Transport ministry seemed to blame LG for the fire problems in its statement on the recall, attributing them to a misaligned battery cell.
    But LG's statement, which said it will cooperate with the Korean Transport Ministry's ongoing investigation, denied that was the reason for the fires.
      "The fire was not recreated in the lab test, and the issue was an early mass production problem in Hyundai Motors dedicated line," said LG's statement. The company said it "will further strengthen safety in all processes from product plan to manufacture and inspection."