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Battery Swapping is Contagious, Telsa Ups & Downs, Mary's Firedside - SAI Weekly #45



 

Quick hits today. Holiday season so lot’s going on and will try to have a Year in Review newsletter before the end of the year and an outlook newsletter starting next year.

 

Swapping is becoming a thing. Mary has her fireside chat in Detroit and I was there. Tesla sales down 17% in China in November.

 

 

CHINA EVs & MORE (CEM)

9am ET on Friday, tomorrow. Join us if you’re free.

 

If you’d like to join the live show, follow me on X: @sinoautoinsight and at 9am at the top where the Spaces rooms show up, you should see our show. It’s an opportunity to ask any questions and have discussions with Lei and I so if are itching to know more about something, join us tomorrow morning!

 

If you can can’t join the live show, I invite you to listen to our recorded China EVs & More episodes at this site. And as always, we appreciate any feedback that will make the show better.

 

 

QUOTED / GUEST

-   MobilityTV. I was a guest panelist on this Parisian show / media outlet where we discussed connected vehicles, autonomous vehicles and how technology is impacting the space. We also talked about China’s impact on the EV sector in Europe and a whole lot more.

 

It’s great to hear different perspectives and it kinda sucked that my connection wasn’t the best since I was sitting in my Hyatt hotel room in LA recording the segment right before the first day of the LA Auto show.

 

For those that watch it, let me know your thoughts, agree or disagree.

 

 

TESLA

-   Up 14% but down 18%? That’s Tesla sales in China. It was up from October but down almost 18% YoY. For those keeping score, they are up by 30% YoY with a total 853,063 MIC Tesla's sold.

 

-   ShanghaiGiga 2x as efficient as AustinGiga. It looks like they are trying to relaunch phase 3 of ShanghaiGiga in order to tool up for the MIC M2 perhaps? I thought they’d been discouraged from adding capacity but maybe they got the go ahead after all.

 

The addition of phase 3 would get annual capacity well over 1M units, where it’s currently sitting at. And ShanghaiGiga isn’t only the biggest but its Tesla’s baddest factory. As in a Tesla rolls off the line every 37 seconds vs. 76 seconds at AustinGiga. Another example of China Speed.

 

 

BIGGEST NEWS OF THE WEEK

-   The fortunes of one US legacy turns (+) while another turns (-) because of what else, batteries. Just after the revised Inflation Reduction Act language dropped on Sunday, GM announced that many of its EVs would be eligible for tax credits in 2024.

 

Ford on the other hand, announced yesterday that its Mach E likely would NOT qualify for any of the tax credits starting in 2024.  

 

Now, where GM’s LFP batteries will come from or more appropriately, where the rare earth metals in those batteries and the batteries themselves will come from is anyone’s guess, but Mary and company seem like a confident bunch so they’re not telling us something and inquiring minds want to know what that is.

 

-   GM is still on board for 2035. That’s when Mary and company have pledged to be ALL-Electric. I’d attended her fireside chat earlier this week and was expecting at least one or two nuggets that I could share with you all but man, she is a total pro. She talked for almost an hour, but didn’t really say anything. I know for a fact if Jim Farley sat there for an hour, he'd have given us at least 3-4 significant sounds bites to talk about.

 

I even asked her what specific Ultium module challenges caused the delays, her response was a 'steep ramp that was affected by part availability (meaning some parts weren’t available in the volumes they needed to be).' She’d mentioned how steep the ramp was more than once so I guess her aggressive production ramp was too ambitious.

 

I then asked her if she could articulate a more detailed LFP battery strategy now that the IRA language was finally out and she totally threw me the Heisman there. Like I said – PRO. It was great listening to her as she reiterated her commitment to Cruise (no surprises there) and emphasized that GM would be led by the customer as far as EV production was concerned.



 

GET SMARTER

-   Another swapping partnership announced. Nope, not NIO this time but Ample, the SF based battery swapping startup that believes the economics now work (vs. when A Better Place ran out of money) and that the timing is right.

 

Ample & Stellantis announced a partnership that will have Ample provide its swapping service to 100 fleet vehicles that are part of Stellantis’ car sharing service in Spain called Free2Move. The service provides vehicles that can be rented for an hour up to months and will allow for the vehicles’ uptime to increase significantly because they won’t need to be charged.

 

NIO and now Ample were waiting for that one large OEM to help them with credibility …and of course scale. That first domino has now fallen for both. I’d argue that for NIO it definitely helps their unit economics in the China market but they'll will still need to convince a foreign legacy automaker in order to have their service brought overseas.

 

You know how VCs (or investors in general) always want to know what the TAM (total addressable market) of a business is, well NIO, with it’s two announced partnerships, have a total addressable market of about 4M vehicles. Ample is in a great position since Stellantis vehicles sell in 130 markets and last year they had sales totalling 6M vehicles. I am NOT saying that swapping will reach that many vehicles but that’s the potential.

 

And as I think more and more about the battery challenges for the US market – the unique use cases that require >150-200 miles more range if you’re towing or hauling anything – swapping could really become a ‘thing.’ In the best of times, fast charging is still a 15 minute at best exercise.

 

And that needs to happen every 5-6 hours if you’re roadtripping. Battery swapping, I’ve done it myself in a NIO a couple times, takes 5-6 minutes tops. If you owned an F-150 or Suburban and were hauling your boat up north (special reference for Michiganders), wouldn’t this make so much more sense?

 

People will point out the cost of the batteries and where they sit on a balance sheet as another showstopper. True, but if LFP batteries become commoditized, which is certainly the direction it’s going now that there will likely be global excess capacity within the next 5-7 years, that cost goes away too, or it’s at least reduced substantially.

 

Yeah, good for you Ample. I’ve always been a believer in swapping. But now I am a believer in swapping in the US.

 

 

BY THE NUMBERS

-   30K. That’s how many chargers Ford + Xcel Energy plan to install for business fleets in the US by 2030.

 

-   2040. That’s when the state of Michigan is required to convert its entire fleet of vehicles to zero emissions. That’s more than 8.8K vehicles. From 3 currently today.

 

 

INTRODUCING

-   Anduril Military Drone. Do to Russia’s invasion of Ukraine, suicide drones have become a thing. Undetectable by radar and with explosives strapped to it, these cheap drones are used as remote control missiles used to take out tanks, ships, etc.

 

In many instances, it takes much more expensive weapons to take these suicide drones out before they reach their target. In comes the Anduril suicide drone killer. It undetectable until it’s needed, then it’s lights out for the suicide drone.  

 

 

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This weekly newsletter is a collection of articles we feel best reflect the happenings of the week or important trends that have effects on the global automotive and mobility sectors. We also provide a point of view that we hope educates and sparks debate.

 

 

The Sino Auto Insights team



 


Sino Auto Insights is a Beijing, China-based market research and advisory firm that specializes in assisting companies analyze, strategize, and develop products and services that will shape the future of mobility and transportation.


Members of our team have experience working in Detroit, Silicon Valley as well as here in China across multiple sectors and functions as entrepreneurs as well as working at larger companies like Apple, Google, Amazon, GM and FCA, and many others.

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