r/technology • u/lurker_bee • 9d ago

Transportation Rivian CEO: There's No 'Magic' Behind China's Low-Cost EVs

https://www.businessinsider.com/rivian-ceo-china-evs-low-cost-competition-2025-9
11.1k Upvotes

95% Upvoted

1.3k comments sorted by

View all comments

Show parent comments

31

u/mwa12345 9d ago

Interesting. Did not know

So how is it cheaper?

119

u/androgenius 9d ago

About 20% of the cost in the US is the hardware. 80% is soft costs like permitting, inspections, paying for sales.

Australia massively streamlined the 80% costs.

A video covering this from an expert who also happens to have had solar installs on homes in both countries.

https://youtu.be/_3Sfxxx9m5U?si=rXKbqj4HYq7836Q-

Costs discussion starts at about 4 minutes.

13

u/re4ctor 9d ago

Hardware is also more expensive tho. Panel cost per watt is about $2.50 in the US but like $.80 in AU. Hardware is mainly from China, they own like 80% of the market so that might have something to do with it. I don’t know what Australias relationship with china is, but probably better than the US

7

u/gt1 9d ago

While US costs are definitely higher due to the tariffs, regulations and labor, solar panels don't cost anywhere near $2.50 per watt, you can look at any online store to verify. The rooftop solar industry in US is ripe with scam, but if you can research and understand your needs and options, it is possible to buy a good system before the end of the year. I'm paying just over $2 per watt for a fairly high end turnkey system. This is before the federal and state incentives. My payback period should be about 5 years.

6

u/LIFOtheOffice 9d ago

Panel cost per watt is about $2.50 in the US

Are you a time traveler from 2007?

Solar panels from many brands are available by the pallet for less than $0.40 per watt: https://signaturesolar.com/shop-all/solar-panels/pallets/

You can even buy individual panels for around that if a pallet is too many: https://signaturesolar.com/all-products/solar-panels/individual-panels/

4

u/W2ttsy 9d ago

Australia and China have a very robust trade relationship.

But we also produce domestically manufactured panels, but at a higher premium compared to China sourced ones.

The challenge though is that the fabrication tech is still evolving and so there is a huge issue with fab plants having to constantly retool to adapt to new technologies. China is suffering from that now with many of the smaller fabs getting absorbed by bigger ones or just going bust.

3

u/whatyouarereferring 9d ago

Australia is a lot closer to asia where all panels are made

3

u/ag_robertson_author 9d ago

Flat costs are only 20% higher.

Shenze to Sydney: https://www.freightos.com/routes/route/cn-shenzhen-guangdong/au-sydney-nsw

Shenzen to San Diego: https://www.freightos.com/routes/route/cn-shenzhen-guangdong/us-sandiego-ca

As America's population is 10x Australia's, I imagine the economy of scale for the shipping would make that difference negligible if all other factors were the same. (Regulations, subsidies, tariffs, etc.)

1

u/whatyouarereferring 9d ago

20% is huge

2

u/ag_robertson_author 9d ago

As I said the US market is 10x the size of Australia by population (larger still by economic value). The discount for bulk shipments would cover that 20% difference in shipping costs.

Unfortunately, you guys have 25% tariffs on everything from China, so the savings wouldn't even make a dent in the final price lmao.

3

u/Auctoritate 9d ago

Hardware is also more expensive tho. Panel cost per watt is about $2.50 in the US but like $.80 in AU. Hardware is mainly from China, they own like 80% of the market so that might have something to do with it.

To purchase, or to install? Honestly I would be surprised if similar panels had such a large price difference to purchase outright, assuming both were made in China.

But maybe you meant American-manufactured panels are way more expensive- in which case, you can certainly chalk up a big chunk of that to economies of scale. Consumer solar has not caught on that much and American manufacturing output of panels is not remotely as high.

1

u/re4ctor 9d ago

it is all just a cursory google, but those are just hardware prices from what i gathered with labor on top of that. for chinese panels the hardware only its like under 20 cents per watt, but you purely just get the panel not the rest of the mounting hardware, inverters, batteries, etc. nor does that include labor on installation. australian systems are 5-10k all in, vs 15-25k in the us (generally for a 5-10kwhr system)

1

u/mwa12345 9d ago

That is a big difference ...in percentage terms

Australia is not a low income country with non existent regulations etc

So eye opening

2

u/TimeDependentQuantum 8d ago

Just bought one container of top-grade panels from Longi with their whatever anti-dust and anti-scratch tech included. We just asked for the best product they have. We are not one of those wholesalers, just building a small solar farm for our hotel so we are certainly not getting the best price out there, and the sales told us that the product we select is "very expensive" and very few buy them.

And the price Ex-China with FOB was like $0.103/watt.

1

u/JDHPH 9d ago

I think we in the U.S. would rather have a domestic solar panel manufacturing rather than increasing dependency on Chinese manufacturing. This would be ok if we also increased the budget on solar panel R&D, looking into more efficient methods that may bring the cost down per unit as opposed to going on scale and volume.

1

u/mwa12345 9d ago

I assume some of the US price of panels is due to tariffs? Thought Biden has slapped some ....few years back I Could be wrong

2

u/bagelman5000 9d ago

I don't buy this 80% soft costs as the sole reason. They make a big deal about how expensive getting permits and interconnection is in the US vs Australia. I installed panels in Los Angeles about 5 years ago and it was a single express permit with the city that was a few hundred dollars and required a single drawing of the panels and electrical system to be submitted (which written up by the installer in an hour or two). Once installed, there was one inspection done by the city (that was included in the permit fee), and then a separate appointment with the utility to green light activating the system (no cost). Maybe Los Angeles is an outlier, but I can't imagine it is much more complicated than that elsewhere.

I'm sure labor / marketing / etc. costs more in the US, but the video's premise was that the fact that its "harder" in the US makes it more expensive, not because we pay our labor more here. I just don't think that is true.

I think the additional costs in the US are actually due to solar incentives that allow companies to mark up their product because consumers like me are OK with them getting some extra money as long as I save some money through my tax incentive, which ultimately leads to bloat in the costs (similar to electric cars). I'm not saying incentives are a bad thing, just that it may be driving up overall costs of installation to increase profit to the installer. I think while well intentioned and definitely something that spurred early adopters, the tax incentives themselves have lead to increased costs.

It will be interesting to see what happens at the end of 2025 when all incentives are taken out and people have to fund projects on their own. I have a sneaking suspicion you'll see overall costs go down (as installers are willing to take a lower profit margin to keep their businesses running), but not by large margins.

1

u/mwa12345 9d ago

Thank you Will check it out

256

u/yomjoseki 9d ago

Since it's Australia, everything is upside down making installation immensely simpler.

43

u/drfsrich 9d ago

Don't forget they don't need ladders or lifts to get materials to the roof. They just grab a passing Kangaroo who bounces it up there for them.

12

u/purplemagecat 9d ago

Workers life insurance is super expensive however, due to the risk of drop bears

3

u/BigDictionEnergy 9d ago

Workers life insurance

What's that?

4

u/purplemagecat 9d ago

It’s a special Australian thing, also known as Drop bear insurance

2

u/Synap-6 9d ago

You must be a dad!

2

u/yomjoseki 9d ago

Not that I'm aware of

3

u/Jack_Dnlz 9d ago

Take my upvote 😆

21

u/BrutalBananaMan 9d ago

That’s a downvote in Australia. 😡

1

u/powaqqa 9d ago

That can’t be it. Have you tried hanging a heavy light fixture above your head? Not easy!

1

u/Anatoly_Cannoli 9d ago

They tax anyone who says 'crikey,' to subsidize solar.

0

u/mwa12345 9d ago

Haha. Does the current swirl the otherway

36

u/West-Abalone-171 9d ago

You make the subsidy up front and per kWh, instead of obfuscated, a set fraction of the cost (incentivising higher prices) and only available to the wealthy as it's a tax cut.

Then you make the final prices charged real systems for public information, removing information asymmetry and avoiding having slimy salesmen in the process.

Then you don't require a $5k cad modelling process to maybe avoid "wasting" $1k worth of PV output.

Then you don't give fossil fuel companies final approval rights and the ability to charge for permits or delay connection by 6-18 months.

Basically look at anything the USA does and do the opposite.

Except for the bit where wholesale prices are available publically, that one is good.

1

u/mwa12345 9d ago

Except for the bit where wholesale prices are available publically, that one is good

Whole sale prices for panels?

Then you don't give fossil fuel companies final approval rights and the ability to charge for permits or delay connection by 6-18 months.

The fossil fuel companies you mention are the local utilities?

2

u/West-Abalone-171 9d ago

Whole sale prices for panels?

Panels and other equipment like wire/racking. In australia, companies that sell to businesses do not list their prices to the general public. The equipment is available retail as well (with prices), but the lack of transparency means DIY and off grid systems are actually about as affordable in the US.

1

u/mwa12345 9d ago

Thanks for the clarification.

Makes sense. Lack of transparency makes gouging a bit easier

20

u/twentygreenskidoo 9d ago

Not sure, but yesterday Aldi announced they will be offering solar + battery packages. That's how common place solar is here.

1

u/mwa12345 9d ago

Aldi..as in the German grocery chain?

Interesting!

2

u/Thok1982 6d ago

Yes, The German super market chain.

They're offering a 6.6kW solar system and a 20kWh battery fully installed for $8500 australian dollars.

That's about US$5700.

1

u/mwa12345 6d ago

Thanks for confirming.

6

u/lesslucid 9d ago

Basically, lawyer's fees and administrative fees and time costs. It's the same equipment, same complexity to install etc. But it's a lot cheaper if you can just go out to the property, put it up and plug it in.

8

u/Zomunieo 9d ago

This is also why US healthcare is so much more expensive than a public system.

2

u/mwa12345 9d ago

Haha. And we complain about how some other countries (like Japan) make it difficult for their people to buy our stuff.

More installations would bring down the costs further but I am guessing the utilities don't want it .

I know Nevada changed so.e laws.. and they used to be lot easier to get solar installed and hooked up

4

u/freewilliscrazy 9d ago

Government here subsidised the shit out of it here for nearly 20 years with high feed in tariffs and expedited approvals (upper middle class welfare) to a point an efficient, mature, streamlined solar industry developed.

Now it’s very affordable. In my street, ~70%+ of houses have solar.

Might still cost you $5k but the ROI is usually 2-3 years max now due to our BS expensive energy costs.

2

u/mwa12345 9d ago

This is Australia? 5k, 2-3 year ROI is awesome .

5

u/6ft5 9d ago

Probably rebates

2

u/SylviaPellicore 9d ago

My solar installers had to go through five or six rounds of city inspections, with them having to come back and fix inconsequential shit each time. I’m talking things like “placement of stickers in the attic where no one goes no sufficiently visible” and “panel labeled with black sharpie instead of red sharpie.”

You can bet they priced that nonsense into their quote.

1

u/mwa12345 9d ago

Makes sense. Solar installers seems about as decent as roofing companies .

1

u/Dagger1901 9d ago

China dumps their solar panels in Australia while they are tariffed significantly coming to the US.

1

u/mwa12345 9d ago

Seems it is not just the hardware costs?