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China’s highflying EV industry is going global. Why that has Tesla and other carmakers worried

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China’s highflying EV industry is going global. Why that has Tesla and other carmakers worried

The U.S.-China rivalry has a new flashpoint in the battle for technology supremacy: electric cars.

So far, the U.S. is losing.

Last year, China became the world’s foremost auto exporter, according to the China Passenger Car Assn., surpassing Japan with more than 5 million sales overseas. New energy vehicles accounted for about 25% of those exports, and more than half of those were created by Chinese brands, a shift from the traditional assembly role China has played for foreign automakers.

“The big growth has happened in the last three years,” said Stephen Dyer, head of the Asia automotive and industrials unit at AlixPartners, a consulting firm. “With Chinese automakers making inroads for most of the market share, that’s a huge challenge for foreign automakers.”

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China’s rapid expansion domestically and abroad has added fuel to a series of clashes between the U.S. and China over trade and advanced technology, as competition intensifies between the two superpowers.

The U.S. has lofty goals for expanding its own EV industry. California, which accounted for 37% of the nation’s electric car sales as of 2022, aims to phase out purchases of new cars that run on fossil fuels by 2035.

Concerns about Chinese oversupply have come just as a broader slowdown in sales has hit EV makers. Tesla announced Monday that it would lay off more than 10% of its workforce in an effort to reduce costs and increase productivity.

In the company’s last earnings report in January, Chief Executive Elon Musk warned about the competitiveness of Chinese brands. BYD, China’s largest EV maker, surpassed Tesla in car sales last year.

“If there are not trade barriers established, they will pretty much demolish most other car companies in the world,” Musk said.

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This year, Manhattan Beach-based Fisker Inc., an electrical vehicle startup, cut 15% of its workforce, had its stock delisted and said it might file for bankruptcy protection. Apple also recently announced an end to its long-held ambitions of making a self-driving EV.

One area in which Chinese automakers handily beat Western competitors is on price, thanks to government subsidies that supported the industry’s initial rise as well as cheap access to critical minerals and components such as lithium-ion batteries, which account for about a third of the overall cost of production.

“It always had these ingredients waiting around,” said Cory Combs, an associate director for Chinese energy policy at the consulting firm Trivium China. “It was kind of a magic moment for these things to come together.”

That enabled the success of BYD, which started producing lithium-ion batteries in 1996 and making cars in 2005.

In March, BYD cut the price of its cheapest EV model in China to less than $10,000. According to Kelley Blue Book, the average EV retail price is $55,343 in the U.S., compared with $48,247 across all vehicles.

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While pricing wars have forced Chinese automakers to slash profit margins at home, they can charge more in overseas markets, further incentivizing exports as domestic growth has slowed. According to research firm Gavekal Dragonomics, demand in China has cooled due to the removal of tax breaks and an increase in the use of public transportation post-pandemic.

“There is a ton of pressure, especially if you are a smaller player, to find a market that is less competitive,” Combs said. “And every market is less competitive than China’s.”

Though 27.5% tariffs have in effect locked Chinese EVs out of the U.S. market, the fear that the cheaper models could eventually undermine American automakers has started to spread.

The Alliance of American Manufacturing warned in a February report that allowing Chinese EVs into the country would be an “extinction-level event” for the U.S. auto industry. The group also cited the risks of Chinese auto companies building facilities across the border in Mexico that could circumvent tariffs.

When the global market is flooded by artificially cheap Chinese products, the viability of American and other foreign firms is put into question

— Janet Yellen

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After a trip to China in April, Treasury Secretary Janet L. Yellen expressed concerns about government-funded overcapacity in Chinese manufacturing of electric vehicles, batteries and solar panels. She noted that other advanced and emerging markets shared those worries, and compared the oversupply to a flood of low-cost Chinese steel hitting the global economy more than a decade ago.

“When the global market is flooded by artificially cheap Chinese products, the viability of American and other foreign firms is put into question,” Yellen said.

The European Union has opened an investigation into government subsidies utilized by China’s EV industry and whether such support violates international trade laws.

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China’s state news agency pushed back on claims of overcapacity in an April article, which said exports accounted for 12% of China’s EV sales last year. It attributed the industry’s success to competitive pricing and technology, rather than government subsidies.

After meeting with German Chancellor Olaf Scholz in April, Chinese President Xi Jinping decried protectionism in other countries and said Chinese EV exports have helped ease global inflation and combat climate change.

How the U.S. is addressing the emergence of China’s EV dominance has already become a hot-button issue for the presidential election in November.

President Biden has encouraged the domestic expansion with the passage of the Inflation Reduction Act, which includes electric vehicle tax credits for U.S. manufacturers, but not if they are sourcing minerals and materials from “foreign entities of concern,” such as China. Meanwhile, presumptive Republican nominee Donald Trump has claimed electric car manufacturing will reduce auto industry jobs, and called for a rollback of the EV-friendly policies enacted during Biden’s term.

Politicians from both parties have proposed even harsher tariffs on Chinese-made EVs should they try to enter the U.S. market, prioritizing the protection of U.S. jobs over goals to reduce carbon emissions.

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“That will make it even more important for Chinese companies to set up local assembly operations to minimize those costs,” said Gregor Sebastian, senior analyst at the New York-based research firm Rhodium Group. “A lot of companies are adopting a wait-and-see approach.”

Even without Chinese auto imports, the technology within the vehicles has unnerved U.S. officials. In March, Biden announced an investigation into Chinese-made “smart cars” and the data the internet-connected vehicles could collect on American users. Collaborations between U.S. companies and CATL, the Chinese battery-making behemoth, have also been subject to greater scrutiny as tensions between the two countries have worsened.

But China has spent decades cementing its status as a global leader in procuring minerals and developing critical technologies such as EV batteries while the U.S. has fallen behind. That will make it harder now for Western automakers to wholly shut out Chinese suppliers, said Tu Le, founder and managing director of Sino Auto Insights, a consulting firm.

“If automakers are going to build affordable, clean-energy vehicles this decade, the only way that happens is by using Chinese batteries,” Le said.

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How a worker who suffered a microfracture of his foot ended up with a $58-million payout

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How a worker who suffered a microfracture of his foot ended up with a $58-million payout

For eight years, Lancaster resident Pablo Scipione and his attorneys pushed for compensation the 46-year-old independent contractor said he was owed due to a workplace accident in early 2016.

In that accident, he slipped, fell and suffered a microfracture to his foot, according to his lawsuit, but that was only the start of his troubles.

Scipione sued the company he was providing services for — Osaka, Japan-based transportation and manufacturing company Kinkisharyo — for negligence shortly after the workplace fall, his lawyers said. But he eventually developed a debilitating medical condition due to the injury, according to court documents, leading the skilled tradesman to quit his job. He asked his legal representation to seek a settlement of $3 million in July 2022 to pay mounting medical bills.

The offer was rejected by Kinkisharyo’s defense team, according to Scipione’s attorneys.

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That decision backfired for Kinkisharyo on Tuesday when a Los Angeles County Superior Court jury awarded Scipione $58.35 million in compensatory and punitive damages.

Calls to Kinkisharyo’s legal team, Los Angeles-based Husch Blackwell, were not returned.

Khail Parris is a partner at Lancaster-based Parris Law Firm, and was lead attorney along with Alexander Wheeler for the plaintiff.

Parris said $54.15 million was awarded in compensatory damages for past lost earnings, future lost earnings, future medical expenses and past and future pain and suffering. The jury also awarded $4.2 million in punitive damages.

Parris said he was a little surprised by the payout since juries can be “unpredictable.”

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“I’m happy the jury heard my client,” he said in a phone interview Wednesday. “The defendant took a very aggressive stance on this case and dragged it out for eight years. The jury felt like enough was enough.”

Scipione was employed by railroad contractor Altech Services at the time of the accident, according to court documents. His duties included supervising teams of electrical technicians also employed by Altech, documents say, and his specialty was electrical troubleshooting.

Scipione was dispatched to Kinkisharyo’s Palmdale train yard around 2 a.m. on Feb. 2, 2016, for repair work, according to the lawsuit. He was instructed that it needed to be done within three hours.

Unbeknownst to Scipione, the train he was going to work on was wet after undergoing a recent water tightness test, according to testimony from a Kinkisharyo senior safety manager. That person said the train did not dry for the minimum of two days before Scipione went to work on it.

The Kinkisharyo employee also conceded that there were other safety issues in Scipione’s workspace, including poor lighting.

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Scipione climbed to the top of the rail car and slipped and fell atop the vehicle, causing the microfracture to his left foot, according to court documents. Though Scipione went home after the accident, he came back to work the next day.

Nearly three months after the injury, Scipione was diagnosed with complex regional pain syndrome, court documents say. The Mayo Clinic describes the syndrome as “a form of chronic pain” that usually affects an arm or a leg and typically develops after an injury. The Mayo Clinic added that “the pain is out of proportion to the severity of the initial injury.”

“The defendants fought us at every corner for eight years to help my client receive proper compensation and medical care,” Parris said. “Things didn’t turn until their safety manager conceded that the factory had been unsafe.”

Part of Scipione’s struggle was finding care through workers compensation insurance. Letters were presented in court that showed denials of care as the process of determining if Scipione was an actual employee of Kinkisharyo or Altech dragged out.

“The jurors were 12 little guys and saw a fellow little guy going up against a big corporation,” Parris said. “They stood up for one of their own.”

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Anita Hill-led Hollywood Commission wants to change how workers report sexual harassment

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Anita Hill-led Hollywood Commission wants to change how workers report sexual harassment

In the wake of movie mogul Harvey Weinstein’s 2020 rape trial, a survey of nearly 10,000 workers by the Anita Hill-led Hollywood Commission revealed a sobering result: Few people believed perpetrators would ever be held accountable.

The vast majority, however, were interested in new tools to document incidents and access resources and helplines.

Four years later, the Hollywood Commission is trying to make that request a reality.

On Thursday, the nonprofit organization launched MyConnext, an online resource and reporting tool that will allow workers at five major entertainment business organizations to get help with reporting incidents of harassment, discrimination and abuse.

Homepage of MyConnext.

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(MyConnext)

The website allows those entertainment industry employees to speak with a live ombudsperson, create time-stamped records and submit those reports to their employer or union. (Any entertainment worker can access the site’s resources section to learn more about what it means to report an incident and understand complicating factors such as mandatory arbitration.)

So far, the commission has partnered with the Directors Guild of America, the Writers Guild of America, certain U.S.-based Amazon productions, all U.S.-based Netflix productions and film/TV producer the Kennedy/Marshall Co., founded by filmmakers Kathleen Kennedy and Frank Marshall. The International Alliance of Theatrical Stage Employees is expected to join later this year, according to the commission.

MyConnext is not intended to replace any of these organizations’ individual reporting platforms. Rather, it’s designed to provide an additional option and serve as a one-stop shop for workers seeking help or resources. The commission did not say what the initiative cost.

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One key feature of the MyConnext reporting platform is called “hold for match,” which allows a worker to fill out a record of an incident and instructs the system not to send the report to one of the partner organizations until another report about the same person is detected. At that time, both reports will be sent.

“It is very difficult for an individual to come forward,” said Hill, president of the Hollywood Commission, which was founded in October 2017 to help eradicate abuse in the entertainment industry. “Let’s say, for example, Harvey Weinstein: It was very difficult to prove a case when there was only one person because there was a tendency to turn it into a so-called ‘he-said, she-said’ situation.”

With this feature, however, employers could potentially recognize a pattern of abuse. And that, Hill said, could be a game changer.

“We ultimately hope that [the tool] will elevate the level of accountability, and accountability is ultimately what I think everybody wants,” said Hill. The commission led the 2020 survey, along with a follow-up survey this year that found a similar desire for harassment reporting resources.

“Information, really, is power,” said Hill.

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Advocates say such resources have become even more crucial amid what they describe as a pullback in Hollywood’s promised efforts to create a more inclusive industry for women. Fears of backsliding escalated after Weinstein’s New York sex assault conviction was overturned last month by a state appeals court, which ordered a new trial. Weinstein’s conviction in California remains.

“What’s so important even now, in light of the reversal of a conviction, is making sure that individuals who have suffered harm get to choose what makes the most sense for them,” said Malia Arrington, executive director of the Hollywood Commission. “You need to be informed about what all of your different choices may mean to make sure that you’re entering into whatever path with eyes wide open.”

With that in mind, the platform has a multipronged approach. The resources section helps workers understand their options, including the general process for filing a complaint, as well as where to access counseling and emotional or employment support.

Members of the participating organizations also have access to a secure platform through MyConnext that lets them record an incident — regardless of whether they submit it as an official report — send anonymous messages, speak with an independent ombudsperson and submit reports of abuse.

Speaking with an advocate allows workers to get their questions answered confidentially and by a live human, said Lillian Rivera, the ombudsperson who is employed by MyConnext.

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“It’s a human that’s going to listen to folks, who’s going to be nonjudgmental, who is going to be supportive and is going to be able to point people toward all of their options, and really put the power in the hands of the worker so they can make the decision that’s best for them,” Rivera said.

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Boeing's Starliner capsule stuck on ground after helium leak

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Boeing's Starliner capsule stuck on ground after helium leak

After years of delays, Boeing’s Starliner capsule was set to take off early this month with two astronauts aboard — and now the flight to the International Space Station has been put on hold indefinitely following a series of setbacks.

The original May 6 launch was scuttled hours before takeoff due to a balky rocket valve. It was rescheduled first for May 10 and then a second time for Friday, when it was decided to replace the valve on the Atlas V rocket.

All systems seemed go until yet another problem cropped up, this time with the capsule. A helium leak was detected coming from the spacecraft’s propulsion system.

After two more delays, officials with NASA, Boeing and United Launch Alliance, the rocket maker, said late Tuesday that the flight would be postponed indefinitely — a sequence of events that Boeing didn’t need.

“It’s embarrassing that Boeing was on the verge of launching this mission, and now we do not even have a time for when they are planning to launch,” said Laura Forczyk, executive director of space industry consultancy Astralytical. “On the other hand, we have waited years for this launch, so what’s another couple of weeks. They are relying on this mission to go very smoothly.”

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NASA said Tuesday that it is still reviewing flight safety issues and would “share more details once we have a clearer path forward.”

The delays are particularly nettlesome for the Arlington, Va., aerospace giant because it’s years behind SpaceX in launching a crewed capsule to service the space station.

Both companies were given multibillion-dollar contracts in 2014 to develop the craft, and since 2020 Elon Musk’s Hawthorne company has ferried eight operations crews to the base — while Boeing has managed only two unmanned flights.

The companies were chosen by NASA after the agency had to rely on the Russian program to send U.S. astronauts to the station when the space shuttle program was ended in 2011.

Boeing has reportedly had to eat $1.5 billion in Starliner cost overruns, and it can ill afford a failure with astronauts aboard, especially after the two crashes of its 737 Max 8 jets and a door plug that blew out of a 737 Max 9 flight this year on its way to Ontario International Airport in San Bernardino County.

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“Boeing has so much to prove. They’re just about four years behind SpaceX,” Forczyk said. “They need to make sure they have all their ducks lined up in a row.”

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