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bsky.app
Never realized that Tesla is losing to BYD at manufacturing too, which IMO is Tesla's biggest accomplishment and area of innovation. Nice writeup about the state of play and how we got here though. I have no faith that we're moving any productive direction though sadly, most changes and efforts feel reactionary rather than rooted in making use of the time being bought by tariffs, with few exceptions.
So: how are the cars so cheap, and what is being cut to get there? The best public accounting comes from the Rhodium Group, which compared BYD, Geely, and Leapmotor against Tesla's Chinese operation, a fair comparison because it removes labor costs and shipping from the equation entirely. Their estimate is that BYD builds a car for about $4,700 less than Tesla builds a Model 3 in Shanghai, roughly 15 percent of the Model 3's price. The breakdown is the interesting part. Direct government grants account for about $292 per vehicle, which is 5 percent of the gap. The biggest single factor is vertical integration: BYD makes about 80 percent of its top-tier components in-house, against 37 percent for Tesla, and that eliminates roughly $2,369 per vehicle in supplier markups. Lower overhead, meaning cheaper engineering talent and administrative cost spread across enormous volume, accounts for another $1,719. And BYD pays its suppliers on 155-day terms, against Tesla's 60, which is worth about $214 per car in float. When people say the Chinese advantage is subsidies, the per-vehicle number says otherwise. When people say it is slave wages, the Tesla Shanghai comparison says otherwise too. The advantage is mostly that BYD decided, twenty years ago, to make its own batteries, its own motors, its own power electronics, and its own semiconductors, and Western automakers decided the opposite.
www.motortrend.com
www.canarymedia.com
