Sunday, May 5, 2024

Chinese EVs are piling up and blocking European Ports

The mania over replacing fossil fuel powered cars with electric vehicles is beginning to wane. Several news agencies have reported that masses of unsold Chinese EVs are piling up and blocking European Ports. Interestingly the timing of this coincides with an announcement by Tesla that sparked another rally in its stock. Following a weekend visit to China Elon Musk reports that the company will partner with Baidu (BIDU) on mapping

The news China has approved Tesla's program intersects with China's push into the EV market as its housing market explodes. In short, China needs a new spark or something to kick-start its economy. With enthusiasm for EVs on the wane, approving Tesla's program may be another propaganda campaign to tie EVs with the image, and idea, it will lead to an idyllic future. The Chinese EV sector wants and needs the "Tesla development" to generate the sign that the U.S. and China can work together in the EV space.

Automobile manufacturing is a huge market and the Chinese have made a huge investment in the EV sector by subsidizing its growth. In doing so they have set in motion the machinery to destroy auto manufacturers in other countries and thus dominate global auto production. Diminishing demand in China for their products is a huge contributor to Europe's top two car manufacturers' downturn which the Financial Times reported recently.

Not only has China heavily subsidized its EV sector, but it has even gone to outlawing the sale of fossil fuel automobiles. It now appears China has gone down this path with the intention of taking over the world auto market. It could be argued Tesla is no more than a pawn in this strategy. Embrace China early on, then when it becomes convenient, throw it under the bus, but not yet.

China Is Targeting Europe
In a video, The Electric Viking, delves into the issue of Chinese EVs piling up in European Ports. It seems from the number of new auto transport ships under construction or being planned in China this is only the start of a full-court press. This is where it should be noted that, abusing free trade is not fair trade. China's form of capitalism is predatory. Many of the comments below the Electric Viking video indicate viewers agree something is wrong and offer several solutions to the problem. 

As for Tesla's stock, while it has moved much higher, Ihor Dusaniwsky, managing director of predictive analytics at S3 Partners, said. “This has not been a short squeeze,” Dusaniwsky said as S3 has “actually seen short selling into this rally with over 2 million new shares shorted over the last week.” Tesla is the third largest U.S. short behind Nvidia and Microsoft, he said.

It seems that Wells Fargo analyst Colin Langan was also surprised by the big share price move. Langan warned that there could be restrictions on sharing data, which could limit Tesla's (TSLA) ability to leverage the tech progress it has seen in the U.S. There is also the glaring point that Chinese electric vehicle makers are undercutting Tesla when it comes to pricing.

Yes, the cars China produces must go somewhere, but that does not mean into my country! Remember price is not everything and there is a hidden price embedded in these cars. That is the destruction of local jobs. Again, I'm forced to ask whether EVs are the answer to global climate issues that governments and EV proponents claim. The fact that I'm not a fan of these vehicles aside, one thing is certain and that is China is all in and plans to crush automakers across the world.


(Republishing of this article welcomed with reference to Bruce Wilds/AdvancingTime Blog)

No comments:

Post a Comment