XPeng To Offer Cheaper Batteries. The EV Industry Continues to Mature.
Kanebridge News
    HOUSE MEDIAN ASKING PRICES AND WEEKLY CHANGE     Sydney $1,495,064 (-0.25%)       Melbourne $937,672 (-0.06%)       Brisbane $829,077 (+1.01%)       Adelaide $784,986 (+0.98%)       Perth $687,232 (+0.62%)       Hobart $742,247 (+0.62%)       Darwin $658,823 (-0.42%)       Canberra $913,571 (-1.30%)       National $951,937 (-0.08%)                UNIT MEDIAN ASKING PRICES AND WEEKLY CHANGE     Sydney $713,690 (+0.15%)       Melbourne $474,891 (-0.09%)       Brisbane $455,596 (-0.07%)       Adelaide $373,446 (-0.09%)       Perth $378,534 (-0.83%)       Hobart $528,024 (-1.62%)       Darwin $340,851 (-0.88%)       Canberra $481,048 (+0.72%)       National $494,274 (-0.23%)   National $494,274                HOUSES FOR SALE AND WEEKLY CHANGE     Sydney 7,982 (-85)       Melbourne 11,651 (-298)       Brisbane 8,504 (-39)       Adelaide 2,544 (-39)       Perth 7,486 (-186)       Hobart 1,075 (-37)       Darwin 266 (+11)       Canberra 840 (-4)       National 40,348 (-677)                UNITS FOR SALE AND WEEKLY CHANGE     Sydney 7,376 (-100)       Melbourne 6,556 (-154)       Brisbane 1,783 (+12)       Adelaide 447 (+11)       Perth 2,139 (+3)       Hobart 173 (-1)       Darwin 393 (+1)       Canberra 540 (-29)       National 19,407 (-257)                HOUSE MEDIAN ASKING RENTS AND WEEKLY CHANGE     Sydney $750 ($0)       Melbourne $550 ($0)       Brisbane $650 ($0)       Adelaide $550 ($0)       Perth $595 ($0)       Hobart $550 ($0)       Darwin $720 (+$40)       Canberra $675 ($0)       National $639 (+$6)                    UNIT MEDIAN ASKING RENTS AND WEEKLY CHANGE     Sydney $750 ($0)       Melbourne $550 ($0)       Brisbane $550 ($0)       Adelaide $430 ($0)       Perth $550 ($0)       Hobart $450 ($0)       Darwin $483 (-$38)       Canberra $550 ($0)       National $555 (-$4)                HOUSES FOR RENT AND WEEKLY CHANGE     Sydney 5,759 (+74)       Melbourne 5,228 (-159)       Brisbane 2,940 (-7)       Adelaide 1,162 (-13)       Perth 1,879 (-7)       Hobart 468 (-15)       Darwin 81 (+6)       Canberra 707 (+10)       National 18,224 (-111)                UNITS FOR RENT AND WEEKLY CHANGE     Sydney 8,359 (+95)       Melbourne 5,185 (+60)       Brisbane 1,588 (-3)       Adelaide 335 (-30)       Perth 752 (+11)       Hobart 161 (-1)       Darwin 107 (-16)       Canberra 627 (-36)       National 17,114 (+80)   National 17,114                HOUSE ANNUAL GROSS YIELDS AND TREND       Sydney 2.61% (↑)      Melbourne 3.05% (↑)      Brisbane 4.08% (↑)        Adelaide 3.64% (↓)       Perth 4.50% (↓)     Hobart 3.85% (↑)        Darwin 5.68% (↓)     Canberra 3.84% (↑)      National 3.49% (↑)             UNIT ANNUAL GROSS YIELDS AND TREND       Sydney 5.46% (↑)      Melbourne 6.02% (↑)      Brisbane 6.28% (↑)        Adelaide 5.99% (↓)     Perth 7.56% (↑)        Hobart 4.43% (↓)       Darwin 7.36% (↓)     Canberra 5.95% (↑)        National 5.84% (↓)            HOUSE RENTAL VACANCY RATES AND TREND       Sydney 1.6% (↑)      Melbourne 1.8% (↑)      Brisbane 0.5% (↑)      Adelaide 0.5% (↑)      Perth 1.0% (↑)      Hobart 0.9% (↑)      Darwin 1.1% (↑)      Canberra 0.5% (↑)      National 1.2% (↑)             UNIT RENTAL VACANCY RATES AND TREND       Sydney 2.3% (↑)      Melbourne 2.8% (↑)      Brisbane 1.2% (↑)      Adelaide 0.7% (↑)      Perth 1.3% (↑)      Hobart 1.4% (↑)      Darwin 1.3% (↑)      Canberra 1.3% (↑)      National 2.1% (↑)             AVERAGE DAYS TO SELL HOUSES AND TREND       Sydney 30.9 (↑)      Melbourne 32.6 (↑)      Brisbane 37.7 (↑)      Adelaide 28.7 (↑)      Perth 40.1 (↑)      Hobart 37.6 (↑)        Darwin 36.1 (↓)     Canberra 33.0 (↑)      National 34.6 (↑)             AVERAGE DAYS TO SELL UNITS AND TREND       Sydney 32.5 (↑)      Melbourne 31.7 (↑)      Brisbane 35.2 (↑)      Adelaide 30.2 (↑)        Perth 42.8 (↓)     Hobart 36.9 (↑)        Darwin 39.6 (↓)     Canberra 36.7 (↑)      National 35.7 (↑)            
Share Button

XPeng To Offer Cheaper Batteries. The EV Industry Continues to Mature.

Chinese EV maker XPeng is making a battery decision it hopes will give it a leg up on the competition.

By Al Root
Thu, Mar 4, 2021 12:13amGrey Clock 2 min

Batteries and battery- management systems are to an electric vehicle what a high-quality internal combustion engine is to a gasoline-powered car, so battery decisions can make or break an EV maker. Chinese EV maker XPeng is making a battery decision it hopes will give it a leg up on the competition.

XPeng (ticker: XPEV) is going to start selling LFP-battery-powered electric vehicles soon. China’s Ministry of Industrial Information & Technology recently announced that XPeng was using LFP batteries in vehicles.

LFP is short for lithium-iron-phosphate. Iron is the “F” in that acronym because its elemental symbol is “Fe.” Lithium-iron-phosphate batteries are a little cheaper than top-of-the line lithium-ion batteries, which contain elements such as cobalt and nickel.

LFP batteries are more cost-effective, but with a trade-off. They don’t pack quite as much punch as their more expensive cousins, so the range of the cars that use them is affected.

XPeng, in this case, probably doesn’t mind because most drivers don’t need 482 kilometres, or even 320 kilometres, of daily range. The benefit of a lower purchase cost, for many car buyers, far exceeds the downside of a lower per-charge range. The company will continue to offer vehicles with top-of-the line lithium-ion batteries as well.

It’s an interesting decision for investors to ponder. Offering different batteries in an EV is a little like offering different engines in traditional automobiles. In traditional cars, however, engine options are usually tied to horsepower and speed. In the case of EVs, battery options are more about range.

Billions of dollars are being invested in the EV industry to come up with more powerful, longer-lasting batteries. QuantumScape (QS), for instance, is working on revolutionary solid-state battery technology. QuantumScape doesn’t have sales yet, but it is one of the most valuable automotive suppliers in the world. That’s how important batteries are to the EV industry.

QuantumScape’s batteries will, holders of the stock hope, be less expensive for the same range as existing technology. Commercial offerings are years down the road, though. XPeng’s move is another way to offer less expensive EVs today.

A lower- end XPeng model P7 costs about 230,000 yuan, or about $35,000. With LFP batteries, that price might drop 20,000 to 30,000 yuan, or perhaps $3,000 to $5,000. XPeng declined to comment on new pricing for EVs with the less expensive batteries, but noted that the information will come out soon.

It feels like a sound strategic move and one that investors can expect other EV makers to copy. Car buyers are still learning how to buy EVs. Range and cost, compared with traditional cars, can be a mystery. As options such as LFP batteries proliferate, buyers will begin to feel more comfortable comparing EV models, just like they do when selecting what engine they want in their automobile.

XPeng stock was up 3.3% in premarket trading. S&P 500 and Dow Jones Industrial Average futures were up about 0.5%.

The rise might not be due to the batteries, though. XPeng stock has been on a wild ride lately. Shares dropped 11% Tuesday after investors digested news that deliveries in February were lower than in January. February, however, was affected by the Lunar New Year holiday. Monthly deliveries at Li Auto (LI) and NIO (NIO) dipped as well.

Year to date, XPeng share are down about 26% after finishing 2020 up almost 200% from the stock’s $15 initial public offering price.



MOST POPULAR

Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’

Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual

Related Stories
Money
China’s EV Juggernaut Is a Warning for the West
By GREG IP 08/06/2023
Money
How Hackers Can Up Their Game by Using ChatGPT
By Cheryl Winokur Munk 08/06/2023
Property
RBA Governor explains the rate rises we had to have
By KANEBRIDGE NEWS 07/06/2023
China’s EV Juggernaut Is a Warning for the West

Competitive pressure and creativity have made Chinese-designed and -built electric cars formidable competitors

By GREG IP
Thu, Jun 8, 2023 4 min

China rocked the auto world twice this year. First, its electric vehicles stunned Western rivals at the Shanghai auto show with their quality, features and price. Then came reports that in the first quarter of 2023 it dethroned Japan as the world’s largest auto exporter.

How is China in contention to lead the world’s most lucrative and prestigious consumer goods market, one long dominated by American, European, Japanese and South Korean nameplates? The answer is a unique combination of industrial policy, protectionism and homegrown competitive dynamism. Western policy makers and business leaders are better prepared for the first two than the third.

Start with industrial policy—the use of government resources to help favoured sectors. China has practiced industrial policy for decades. While it’s finding increased favour even in the U.S., the concept remains controversial. Governments have a poor record of identifying winning technologies and often end up subsidising inferior and wasteful capacity, including in China.

But in the case of EVs, Chinese industrial policy had a couple of things going for it. First, governments around the world saw climate change as an enduring threat that would require decade-long interventions to transition away from fossil fuels. China bet correctly that in transportation, the transition would favour electric vehicles.

In 2009, China started handing out generous subsidies to buyers of EVs. Public procurement of taxis and buses was targeted to electric vehicles, rechargers were subsidised, and provincial governments stumped up capital for lithium mining and refining for EV batteries. In 2020 NIO, at the time an aspiring challenger to Tesla, avoided bankruptcy thanks to a government-led bailout.

While industrial policy guaranteed a demand for EVs, protectionism ensured those EVs would be made in China, by Chinese companies. To qualify for subsidies, cars had to be domestically made, although foreign brands did qualify. They also had to have batteries made by Chinese companies, giving Chinese national champions like Contemporary Amperex Technology and BYD an advantage over then-market leaders from Japan and South Korea.

To sell in China, foreign automakers had to abide by conditions intended to upgrade the local industry’s skills. State-owned Guangzhou Automobile Group developed the manufacturing know-how necessary to become a player in EVs thanks to joint ventures with Toyota and Honda, said Gregor Sebastian, an analyst at Germany’s Mercator Institute for China Studies.

Despite all that government support, sales of EVs remained weak until 2019, when China let Tesla open a wholly owned factory in Shanghai. “It took this catalyst…to boost interest and increase the level of competitiveness of the local Chinese makers,” said Tu Le, managing director of Sino Auto Insights, a research service specialising in the Chinese auto industry.

Back in 2011 Pony Ma, the founder of Tencent, explained what set Chinese capitalism apart from its American counterpart. “In America, when you bring an idea to market you usually have several months before competition pops up, allowing you to capture significant market share,” he said, according to Fast Company, a technology magazine. “In China, you can have hundreds of competitors within the first hours of going live. Ideas are not important in China—execution is.”

Thanks to that competition and focus on execution, the EV industry went from a niche industrial-policy project to a sprawling ecosystem of predominantly private companies. Much of this happened below the Western radar while China was cut off from the world because of Covid-19 restrictions.

When Western auto executives flew in for April’s Shanghai auto show, “they saw a sea of green plates, a sea of Chinese brands,” said Le, referring to the green license plates assigned to clean-energy vehicles in China. “They hear the sounds of the door closing, sit inside and look at the quality of the materials, the fabric or the plastic on the console, that’s the other holy s— moment—they’ve caught up to us.”

Manufacturers of gasoline cars are product-oriented, whereas EV manufacturers, like tech companies, are user-oriented, Le said. Chinese EVs feature at least two, often three, display screens, one suitable for watching movies from the back seat, multiple lidars (laser-based sensors) for driver assistance, and even a microphone for karaoke (quickly copied by Tesla). Meanwhile, Chinese suppliers such as CATL have gone from laggard to leader.

Chinese dominance of EVs isn’t preordained. The low barriers to entry exploited by Chinese brands also open the door to future non-Chinese competitors. Nor does China’s success in EVs necessarily translate to other sectors where industrial policy matters less and creativity, privacy and deeply woven technological capability—such as software, cloud computing and semiconductors—matter more.

Still, the threat to Western auto market share posed by Chinese EVs is one for which Western policy makers have no obvious answer. “You can shut off your own market and to a certain extent that will shield production for your domestic needs,” said Sebastian. “The question really is, what are you going to do for the global south, countries that are still very happily trading with China?”

Western companies themselves are likely to respond by deepening their presence in China—not to sell cars, but for proximity to the most sophisticated customers and suppliers. Jörg Wuttke, the past president of the European Union Chamber of Commerce in China, calls China a “fitness centre.” Even as conditions there become steadily more difficult, Western multinationals “have to be there. It keeps you fit.”

MOST POPULAR

Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’

Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual

0
    Your Cart
    Your cart is emptyReturn to Shop