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Chinese EV dominance hastens end of petrol engine era

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A Neta S electric car at the Shanghai Auto Show. Electric vehicles made up a quarter of car sales in China in 2022, a year-on-year increase of 94 percent
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This year’s Shanghai Auto Show signalled the end of the petrol engine era in China, as domestic electric vehicle brands drive change across the sector and leave foreign companies in the dust, analysts and industry insiders said.

Government support for EVs and growing interest from a vast consumer base has assured Chinese companies’ dominance of their home market, the world’s largest — and they are now beginning to set their sights overseas.

Shanghai has shown Chinese brands “can compete with all of the legacy automakers in every way — performance, quality, comfort, there’s nothing they can’t do”, said EV specialist Elliot Richards, joking he had seen “a lot of worried-looking German men wandering around”.

“I think this show marks the end of the internal combustion engine and the beginning of the EV era,” he added.

EV companies are well aware they are closing in on their fossil-fuelled predecessors.

“We regard high-end petrol vehicles such as BMW, Mercedes Benz and Audi as our main competitors,” William Li, CEO of the “Chinese Tesla” Nio, told AFP.

According to the China Association of Automobile Manufacturers, electric vehicles made up a quarter of car sales in the country in 2022, a year-on-year increase of 94 percent.

Despite a downturn across the global auto sector, Li said he thought EVs’ market share in China could increase to over 40 percent this year.

In Shanghai, dozens of new models were on display from new and legacy carmakers alike.

“The future is very much here now,” Mike Johnstone, a top executive at British luxury brand Lotus, told AFP.

“There’s a lot of proliferation of electrified products (in China), and it’s changing the entire market.”

– ‘Head start’ – 

China has dedicated huge resources to the industry.

“They skipped developing petrol engines because they can’t compete with the rest of the world,” said Richards.

“So they thought: ‘(With EVs) we can get a head start in front of everyone else’.”

The country began investing heavily in associated technology from the early 2000s.

“It’s ingrained in the nature of the country’s economic system: the Chinese government is very good at focusing resources on the industries it wants to grow,” Zeyi Yang wrote in MIT Technology Review.

Central and local authorities poured billions of dollars into subsidies and tax breaks, and allocated public transport contracts to EV companies.

The supporting infrastructure was built too — the government says there are now more than 5.8 million charging piles in China.

Guangdong province alone has around three times as many public chargers as the whole of the United States, according to Bloomberg data.

“In general, there are still a lot of preferential policies… for the production and sale of electric vehicles,” said Nio’s Li, using as an example the waiving of expensive licence plate fees in some cities. 

– Innovation ecosystem –

Those policies have applied to foreign brands too. 

That tactic helped lure industry leader Tesla to Chinese shores, bolstering the sector’s reputation and sparking further competition.

Nowadays, more than 94 brands offer over 300 models in the Chinese market, “the most vibrant globally”, according to Counterpoint Research.

Some are smashing the cash barrier that put EVs beyond the means of the average consumer. 

In Shanghai, China’s Geely exhibited its boxy Panda Mini — including a bright yellow one with the phrase “what the duck” emblazoned on its side. 

The cheaper versions cost around $5,800.

In the future, homegrown technology could drive prices down even further.

Battery giant CATL has developed a cell that uses sodium instead of lithium ions, the former both more abundant and cheaper than the latter.

Just before the show opened CATL announced those batteries would be incorporated into domestic brand Chery’s cars.  

– Ripples overseas –

All this is being watched closely by foreign competitors.

Brands within the Chinese market are “setting the benchmark now” for others, Lotus’ Johnstone said.

And Chinese EV companies have already begun to make inroads abroad. 

The biggest of them, BYD, set up shop in Norway then expanded onwards, and others are following.

Geely-owned Zeekr’s Europe CEO, Spiros Fotinos, told AFP the technological sophistication of Chinese-made EVs is combatting old stereotypes around quality that foreign consumers might harbour.

“Consumers are seeing a lot of innovative safety technologies, with driver assist systems that are really cutting edge,” he said.

Richards though said Chinese automakers’ success in the West wasn’t “a done deal”, as they would have to adapt to the market.

“Karaoke machines in cars, for example — very popular in China, not so popular in Europe,” he said.

Johnstone insisted carmakers with “heritage and history” that welcomed in the electric era would remain competitive. 

“Brands that have been around for a number of years… will continue to live in the future as well,” he said. 

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Google looks to take generative AI lead with Gemini

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Google is giving its Bard chatbot a major artificial intelligence boost as ChatGPT-maker OpenAI deals with the aftermath of a boardroom coup that saw chief executive Sam Altman fired then rehired within a span of days
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Google on Wednesday infused its Bard chatbot with a new-generation artificial intelligence model called Gemini, which it touts as being able to reason better than ChatGPT and other rivals.

The search engine juggernaut is aiming to take the generative AI lead from ChatGPT-maker OpenAI as that company deals with the aftermath of a boardroom coup that saw chief executive Sam Altman fired and then rehired within a matter of days.

Google has for years discreetly developed AI powers but was caught off guard when OpenAI late last year released ChatGPT and teamed up with Microsoft to make its capabilities available to users worldwide.

“This is incredible momentum, and yet, we’re only beginning to scratch the surface of what’s possible,” Google chief executive Sundar Pichai said in a release.

“This new era of models represents one of the biggest science and engineering efforts we’ve undertaken as a company.”

It is the first AI model to outperform human experts in certain benchmarks involving problem solving, math, physics, history, law, medicine and ethics, Google DeepMind vice president of product Eli Collins said during a briefing.

A demonstration showed Gemini recognizing what it was shown, from a person acting out a “Matrix” movie scene to someone drawing a duck and then holding up a rubber duck.

Gemini commented on what it was shown, making comparisons, drawing conclusions, and offering suggestions.

Performance of an “Ultra” version of Gemini “far exceeds” that of other state-of-the-art models in 30 benchmark tests measuring capabilities such as image understanding or mathematical reasoning, according to Collins.

A “Pro” version of Gemini built into Bard is designed to handle a wide range of tasks. A “Nano” version is tailored for smartphones, coming first to Google’s top-of-the-line Pixel 8 handset.

Google raced out its own Bard chatbot earlier this year, continually updating the chatbot based on people’s feedback, according to Bard vice president Sissie Hsiao.

“All of that rapid innovation is bringing us to what we see as a truly transformative moment,” Hsiao said during the briefing.

“With Gemini, Bard is getting its biggest upgrade yet.”

– AI collaborator –

Bard will use Gemini for more advanced reasoning, planning, and understanding capabilities, a demonstration showed.

It will be available in English in more than 170 countries and territories, with more languages added soon, according to Hsiao.

Gemini-infused Bard will be expanded to be “multi-modal,” meaning it will be able to work with auditory and visual input as well as text prompts, executives said.

“With Gemini we are one step closer to our vision of bringing you the best AI collaborator in the world,” Hsiao said.

Gemini ramps up the quality of Bard’s performance, whether in writing poetry or computer code to shopping queries or research projects, according to Hsiao.

The “Ultra” version of Gemini designed to handle highly complex tasks will be released early next year, Google said.

“I’m in awe of what it’s capable of,” Collins said of Gemini.

“This is the start of a new era for us at Google as we continue to rapidly innovate and advance the model’s capabilities.”

Google in September integrated Gmail, YouTube and other tools into its Bard chatbot as tech giants seek to persuade users that generative AI is useful and not dangerous or just a fad.

Those capabilities closely match offerings from Microsoft that infuse its Office 365 apps with AI powers, though those come at an extra cost to customers and are not available through the chatbot on its search engine Bing.

The staying power of generative AI chatbots, once the initial excitement has faded, is yet to be confirmed.

Moreover, integration of the OpenAI-based chatbot into Microsoft’s search engine earlier this year failed to make an impact on Google’s overwhelming dominance of search.

Governments and tech companies however insist that generative AI is technology’s next big chapter and have ramped up spending on new products, research, and infrastructure.

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EU proposes three-year delay on UK electric car tariffs

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The U-turn by the European Commission delays a 10% tariff on electric car sales between the EU and UK for three years
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Brussels proposed Wednesday a three-year delay on tariffs on the sale of electric vehicles between Britain and the EU that was meant to kick in from January, in a major reversal of its previous position.

The European Commission said it now wants a one-off extension, until December 31, 2026, after the EU automotive industry raised concerns about the massive costs that would arise from a post-Brexit 10-percent tariff.

The commission’s extension proposal must formally be approved by the EU member states. EU leaders are to hold a regular summit in Brussels next week.

The commission had initially strongly opposed such an extension, despite industry’s pleas, requests from the British government and calls for pragmatism by EU lawmakers.

Its extension proposal, which also covers batteries, includes wording designed to make it legally impossible to put off tariffs beyond the December 2026 date.

“Today’s decision means that we skip an intermediate phase of somewhat strict rules of origin that would have applied from 2024 until the end of 2026,” Commission Vice President Maros Sefcovic said.

“This removes the threat of tariffs on export of EU electric vehicles to the UK and vice versa on 1st January 2024.”

The change of stance was needed because of “circumstances not foreseen” when an EU-UK agreement regulating post-Brexit trade and ties was signed in 2020, Sefcovic said.

He cited higher energy prices spurred by Russia’s full-scale invasion of Ukraine last year, high inflation, and big subsidies China and the United States deploy to boost their electric-vehicle industries.

The European Automobile Manufacturers’ Associations (ACEA) and the UK’s Society of Motor Manufacturers and Traders (SMMT) welcomed the commission’s move and urged EU countries to endorse it.

The tariffs, ACEA said, would have cost the EU vehicle makers it represents 4.3 billion euros ($4.6 billion) over the next three years and caused them to lose market share to non-European competitors.

The extension would “allow UK and EU manufacturers to compete with the rest of the world and, crucially, give the European battery industry time to catch up,” Mike Hawes, SMMT chief executive, said.

– ‘Cannot be repeated’ –

The European Union is particularly concerned about potentially unfair competition from cheaper Chinese electric vehicles. In October it formally launched an investigation into Beijing’s subsidies for car manufacturers.

Commission chief Ursula von der Leyen accused China in September of keeping the cost of Chinese electric cars “artificially low by huge state subsidies”.

Sefcovic said the commission’s proposal “supports the competitiveness of our industry and protect jobs in the European Union” and “it’s absolutely clear that this one-off extension cannot be repeated nor prolonged”.

Britain formally left the European Union in January 2020 then, during a transition period, sealed the post-Brexit free-trade agreement with the bloc which came into effect in 2021.

Under that deal, tariffs were to start on January 1, 2024, on vehicles that do not have at least 45 percent UK- or EU-made content, and with batteries that are at least 50-60 percent sourced from each of those territories.

Along with the extension proposal, the commission announced additional funding of up to three billion euros to boost the EU’s battery-manufacturing industry.

The EU’s trade commissioner, Valdis Dombrovskis, said the proposal “provides much-needed predictability and stability to EU car- and battery-makers at a time of fierce global competitive pressure”.

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Twitch to shut down in SKorea over ‘seriously’ high fees

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The platform said it had tried to lower its costs by reducing the maximum video quality but it was still losing money
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US-based streaming platform Twitch said Wednesday it would stop its service in South Korea in February because of “seriously high” network costs, dealing a blow to millions of users in one of the heartlands of e-sports.

The Amazon-owned company said in a statement signed by CEO Dan Clancy that costs were 10 times higher than most other countries, making it impossible to continue operating.

South Korea allows internet service providers to charge data-heavy companies like Twitch extra fees, which has already led to a long dispute with Netflix.

Big telecom firms in Europe have pushed for a similar deal, which they call “fair share”, but an EU consultation concluded in October that the idea was not popular.

Twitch said it had tried to lower its costs by reducing the maximum video quality but it was still losing money and would pull out of the country on February 27.

“The cost of running Twitch in South Korea is currently seriously high,” said the statement.

– ‘Stellar player’ –

Twitch, acquired by Amazon in 2014 for close to $1 billion, gained significant traction among gamers in South Korea.

The firm does not publish user numbers but it was widely reported in 2021 to have six million users in South Korea, more than four percent of its global total.

The country is known for its passionate, competitive, and dedicated gaming community, as well as its megastar Faker — a gamer hailed as the Michael Jordan of e-sports.

“We would like to reiterate that this was a very difficult decision, and one that all of us at Twitch are deeply saddened by,” the company’s Wednesday statement said.

“South Korea has always been a stellar player in the global e-sports community and will continue to do so.”

Shares in South Korean video streaming service Afreeca TV, Twitch’s competitor, soared almost 30 percent in afternoon trading in Seoul.

Some of the country’s Twitch users were devastated by the news.

One streamer, yummy_2 said: “It feels like losing my job right now.”

– Biden vs Trump –

Netflix was the first major international firm to cry foul over South Korea’s rules on network fees, getting entangled in lawsuits with SK Broadband, one of South Korea’s biggest internet service providers.

However, the two firms announced in September they would drop the legal cases and would now instead “collaborate as partners for the future”.

While the usage fees are a boon to telecom companies, they are bitterly opposed by tech platforms around the world.

European lawmakers and digital rights activists also argue such an arrangement could break rules on net neutrality, whereby telecoms firms are barred from selling faster internet speeds to particular companies.

The issue has been at the heart of a years-long dispute in the United States with former President Donald Trump rolling back net neutrality rules and his successor Joe Biden struggling to restore them.

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