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FSD not actually great, Transportation for ALL, Stringent Data Privacy is Coming - SAI Newsletter 33


Not much up top today. The kids are in the last week of summer before they head back to school so spending some QT with them. Summer wasn't as hot as I'd remembered previous ones to be so I wonder what that means for fall and winter.

Lei and I will host our Twitter Spaces, as usual, this week on Thursday – 8:30pm EST. Please do join us.

For those who can’t join in real-time but are interested in listening to this week’s or past episodes of China EVs & More, you can find them by scanning the below QR code:

TESLA NEWS - What to make of Tesla’s AI day. For those that sat through Tesla’s AI day last week, I’d love to know what you thought about the event. For me, I came away pretty impressed. I won’t get too wonky here but it’s obvious that Tesla is working on some really cutting edge technology, a lot of it having nothing to do with car manufacturing. With my background in silicon, I understood a pretty good amount when they were talking about Dojo but I won’t pretend that I could follow a whole lot else. Surprise! AI day was similar to Baidu’s AI World Conference held last week as well in that both companies are trying to convince you that they are AI companies and that their tech (HW + SW) can be utilized for many different applications and not just the one that each of them is known for – Search in Baidu’s case, and for Tesla – an electric car that has really advanced ADAS features. Tesla’s announcement and details about its supercomputer Dojo was pretty interesting and Dojo could be a ‘gamechanger’ for training its vision-driven ADAS system (I won’t call it an autonomous system) and I think that if these AI Days are being used as recruiting events, I’d bet the event brought on board a few more fanboys. I don’t think there’s much of a chance that the Tesla bot prototype makes it to market by 2022. That said, it really doesn’t matter what Elon says, since both he and Tesla have a distortion field that deflects any bad news until it eventually gets drowned out by all of the Tesla ‘Stans.’ With regard to those Stans, there used to be a few analysts that I had a good amount of respect for, that is when they were covering the traditional automotive sector. Somewhere along the way though, quite a few of them, like the automotive OEMs that they covered, lost their way and got left behind. For some reason though, they are still relied upon by many for their opinions, even going as far as making recommendations on ‘buys, holds, and sells’ when it’s pretty obvious that they’re out of their depth. Let’s just say that many of them are bullish on Tesla but couldn’t really detail why, just parroting the narrative that Tesla’s volume will continue to grow in perpetuity, make boatloads of cash on their services and that their vertical integration and AI/FSD is ‘head and shoulders’ above each and every competitor out there. It’s not. It’s one of the better systems for sure but Tesla is also playing a different game because their entire system is HW/SW stack is different, simply put, because they don’t use LiDAR or HD maps. This is where I WILL admit, I can’t tell you why one is better than the other and right now, especially since I have a lot of respect for some of the brainpower on quite a few of the ‘other’ teams working on this problem that do use LiDAR & HD maps. This brings me back to my issue with some of the analysts trying to make that pivot to covering smart EVs. Most of them don’t even own an EV (but they’ve owned an ICE) nor have they tried any of the ADAS features on many of the cars in the US, let alone outside of it, so how would they know that one system is SO much better than another? Therein lies the rub, they wouldn’t. I am jumping off of my soapbox now. - In a brief moment of candor, Elon admits that the current version of Tesla’s Full Self Driving (FSD for short) ‘is not actually great’ but that his team is working their butts off to make it better. Even when he admits mediocrity, it comes off as ‘virtuous’ and ‘genuine’ to all of his acolytes. IN THE NEWS - We’ve heard of Universal basic income but what about Universal basic transportation? The city of Pittsburgh is experimenting with a mobility program that they’re calling Move PGH. It brings together different forms of mobility including shared e-scooters from Spin, e-mopeds from Scoobi, carpooling from Waze, and short-term car rentals from Zipcar. The best part about this is that they’re consolidating all the different modes via a ‘Transit’ app that the city manages. The incentive for the mobility providers is that the city provides each participant exclusivity so that they aren’t competing with other providers on the same app. This is the best part of all, the city of Pittsburgh is piloting a program that’ll bundle all of those services into a low monthly subscription fee to a small group of low-income workers since they are the most constrained in their ability to get around town and to and from their work. Unfortunately in many countries, transportation is a privilege and not a right. And it’s normally a pretty expensive privilege so I love to see these types of programs launch to help those that need it the most. The goal obviously should be to break even but I’d say if there was even a bit of a shortfall, the folks that are able to pay a bit more should help subsidize those that can’t or the city should consider paying the difference. Detroit should really look into experimenting with a model like this. Heck, with many people in Beijing living over an hour away from their jobs it could even be adopted here. Many Beijingers I know that aren’t able to live in city center also have to utilize multiple modes of transport to get from their homes to their office so it would make it really convenient for them to use. Finally, I am also glad to see that Carnegie Mellon will be leading the research on the project on behalf of the city. If this is successful, it’ll truly be an example of how academia, the public, and private sectors can work together to make lives better. We are a ways a way from success though so I’ll keep monitoring for now. - Didi pumps the brakes on entering the UK. Didi has a team in London but it looks as though they aren’t doing much at the moment as the company is still radioactive from their post-IPO & ongoing investigation. London is one of the largest ride-hailing cities in the world and one of Uber’s top 5 markets so conquering the UK would’ve likely meant competing for riders in London. Success there would’ve been a boon for the share price for certain. They’re currently trading at just under $8 from a high of almost $17 so if am an early investor, I am anxious about their pullback from the UK among other things. There’s still no indication as to when the investigation will end but at least in China it doesn’t seem like any of their competitors have been able to gain any significant traction at Didi’s expense. - SmartMore, an AI startup (launched only in 2019) that is developing vision technology to classify objects and images. In particular, their intelligent manufacturing tech helps identify defects during the manufacturing process is working across sectors, and boasts companies like Cannon, Airbus, and Continental as customers. SmartMore recently raised $200M and looks to expand further into the automotive space. This technology could save OEMs millions of $$$/yr. and help them increase the quality & reliability of their products. I’ve not heard much about them but according to one of their founders is already worth >$1B. See there are other uses for AI & Machine learning outside of autonomous vehicles. - The most stringent personal information protection law has been passed in China and will go into effect on November 1. It’s similar to the EU’s General Data Protection Regulation and will allow tech users to ‘opt-out’ of data collection by technology providers. It should have an effect on the EV/AV transition but it is still early days so it should give these companies plenty of time to find workarounds to these new regulations. TRENDING ON SOCIAL MEDIA - Not to be outdone by AutoX, WeRide releases a video of one of its AVs riding around Wuhan ho-hum in the pouring rain. This is a two-hour video that encompasses a 40km, no-intervention ride, it’s quite impressive. With that said, there will likely be many haters and doubters that don’t believe the video or may say that it’s been manipulated. There always is. For the folks that care to remember, I visited WeRide back in January 2020 and although my trip was in fair weather and with a safety driver, within minutes of the vehicle taking off, I felt pretty safe. Safe enough that I casually spoke with my colleague while in the AV for the next 40 mins or so and forgot about the whole ‘a computer is driving us’ thing. So I can attest that the system worked without any interventions while I was test rode it. Now, to get a ride in a few of these other AVs. Stay tuned for that. - Introducing Avatar Technology, a premium brand brought to you by Changan, Huawei, and CATL. Avatar was introduced by Changan earlier this year as Changan NIO but Changan officially changed the name of the JV to Avatar this week while also unveiling one of two cars it’ll be building in the coming next couple of years. No details were released except for Avatar being a premium brand. What that means or how that translates into features is still not yet known, but ABB now has another competitor to think about as it begins to transition more of its lineup to BEVs. JUST THE NUMBERS - $343M. That’s the cumulative total sales of all of the auction houses over the three-day auction period during Monterey Car week that includes the Pebble Beach Concours d’Elegance. I went to the Pebble Beach Concours prior to moving to China and I have to say for any petrolhead, specifically those into Italians and Germans (cars that is), this is a MUST attend event. Beautiful Monterey with many of the finest collector’s cars you’ll ever see all in one place! This year’s prize jewel - a 1995 McLaren F1 Coupe in perfect conditions with low miles, hammering at $20,465,000! - $160M. That’s how much Ample, the San Francisco-based battery swapping startup raised in a Series C round last week. Most of us remember ‘Better Place’ the original battery swapping startup out of Israel and how they flamed out after raising ~$1B but we can blame its failure on a bit of ambition and costs. Is it the right time for Ample? A trillion-dollar infrastructure bill may seem to suggest so. And battery swapping works, especially for certain use cases like fleet vehicles but I will go back to my prediction that battery swapping and DC fast charging will be bundled in the future into a service that will allow drivers to do either. - $77M. That’s how much Xiaomi looks to have paid to acqui-hire DeepMotion, a self-driving tech startup. Xiaomi continues to ramp up the Jidu Auto team. INTRODUCING - For its 50th birthday, Lamborghini decided to build another Countach. A hybrid at that. Prices start at>$2.5M. They’re only making 112 of them. And it’s already sold out. It’s been a bit controversial but I am a fan. - Taking the top off of the Aston Martin Valkyrie and making it a Spider. Specs are similar, looks still amazing and yes, it’s blindingly fast (Top speed, top off: 205MPH top on: 217MPH) AND blindingly expensive (~$4M). But it’s a hybrid so we show it off in the newsletter. - We need balance in the universe so we bring you the Baojun KiWi EV. It’s pretty expensive …when compared to a Wuling Hongguang – at 69,800RMB or ~ $10,766. I see this one being exported. It’s ugly enough that it kinda sorta looks good. If you squint really hard. AND it's endorsed by William Li. That’s hard to beat. It has a ~32KWh LFP battery with an estimated range of 305 km (189 miles) and should sell, really, really well. —— 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 automotive and mobility sectors here and in the US, we also provide a point of view that we hope educates and sparks debate. The Sino Auto Insights


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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