Michigan Drops HUGE News, New York Bans Petrol Cars, BYD >200K Milestone - SAI Newsletter 37
What a whirlwind last couple of days. The state of Michigan, where I am currently located, has decided it wants to be a player in the battery tech/manufacturing sector with two big announcements that dropped earlier this week. The first announcement by Governor Whitmer is that Gotion, a Chinese battery cell manufacturer would be investing $2.36B to build a battery component manufacturing facility in western Michigan. You can see the press release here. It was HUGE news that we kinda knew about since it leaked in the Detroit News a week or so ago. Steve Levine did a great job unpacking all the implications and considerations involved with making this transaction go through (see post below). ’Local politics trumps geopolitics’ is what he’d written, and I’d agree with that statement. The state of Michigan (read: Governor Whitmer, a Democrat in an election year) had missed out on the investments by GM’s battery partner, LG Energy Solutions ($2.3B) to Tennessee and Ford’s partner SK Innovation (total investment: $5.8B) to Kentucky. In addition, SK also plans to invest a total of $2.6B in the state of Georgia while Panasonic is investing $4B in a factory in Kansas. Another high profile FDI/domestic investment loss could’ve made it much more difficult for the state of Michigan to still boast that it is ground zero for the global EV revolution. She needed to get a win up on the board and her team was able to get that done in a BIG way. The other big battery news to come out of the state of Michigan came from friend of Sino Auto Insights Mujeeb Ijaz and his startup ONE (Our Next Energy) which announced a $1.6B investment to build its own battery cells that could eventually power 200K EVs (or about 20 GWhs). This is a great story since Mujeeb has strong ties to Michigan and spent time in Silicon Valley before returning to start ONE in 2020. It’s great to see that ONE has decided to really plant roots in Michigan. I think we will be hearing a lot from Mujeeb and company in the very near future. Both investments really turn Michigan into a hub for EV manufacturing (if we include GM’s Factory Zero where Hummers are currently being built, Orion Assembly where Bolts are built and Ford’s Rouge plant where the F150 Lightning is being manufactured). I am hoping that we can build on this momentum in other ways. Notice I said ‘We’ – I am also working on some stuff that I hope to announce later this year so stay tuned for that. This is what else got our attention this week.
- CALB – One of the China Battery Inc has gone public in HK. Current global ranking #7 (w/ 4.2% share). Current China ranking #3 behind CATL and BYD. The current goal is to become #3 worldwide w/in the next 5 years. Ambitious – and it means they’ll need a lot of help from foreign automakers (mostly none of which currently are their customers) to get there. - Gogoro takes a $345M rainy day loan out to fund growth and expansion into more international markets. Recent entries include China, India and Israel. Does slow and steady win the race here? We shall see. I still think GGRs product is superior in the market but how long will that keep them out front is the question, especially as India awakens to more startups each day that want a piece of cleaning up its skies. Speaking of which… - Magna enters the electric moped space via an $77M investment into Indian startup Yulu. Magna will also partner with Yulu to launch a battery swapping service to go along with the Yulu mopeds. Recall that Gogoro has partnered with Hero, India’s 800lb gorilla in the ‘scooter’ space of which Yulu would likely compete. This sounds like one heavyweight battle! - Porsche is now Europe’s most valuable automobile manufacturer as it overtook Volkswagen Group yesterday. Volkswagen needs a hug – this is the 2nd time this year that they’ve been overtaken as their share price continues to lag. BYD overtook them on June 7th to become the 3rd most valuable automobile manufacturer in the world. - Cobalt mining is back in the U.S. Starting today, Jervois Global will begin mining cobalt in Idaho after almost 30 years since the last time cobalt was mined here. It’s forecasted that the cobalt mine will produce 2K tons of mined cobalt/year. For reference, according to BloombergNEF, global cobalt demand will go from 127.5K tons in 2022 to 156K tons in 2030. Expect (many) more of these announcements about mining and refineries, specifically for cobalt, nickel and lithium and mostly in North America. - NIO changes the ES7 name in Europe to the EL7 to avoid a long court battle with Audi for infringement. Someone seems to be getting under someone else’s skin - I love it! ---------- We are hosting a special China EVs & More Twitter Space today to unpack the NIO Berlin launch event so those wondering what happened last night, absolutely nothing! We will be on today at 3pm EST – If you’d like to join and participate, find us in our Twitter Spaces room at 3pm SHARP! For those that can’t join live (shame on you!), the China EVs & More podcast is available wherever you grab your podcasts from. Most of our back pods are posted and the descriptions will be able to tell you what we discussed that particular episode. ---------- BIG NEWS OF THE WEEK - The state of New York to ban the sale of petrol powered vehicles by 2035. It will be a phased approach that will also include school buses. The plan could reduce carbon dioxide and other gases released into New York’s atmosphere by 85% by 2050. The current target would be to have 35% of all vehicles sold in New York be electric by 2026, 68% by 2030 until they get to 0% by 2035. QUOTED - I spoke with friend of Sino Auto Insights Steve Levine, author of the weekly ‘The Electric’ (it is paywalled unfortunately) for his post last week about the Michigan battery news that, at the time we spoke, was still speculative. Governor Whitmer, this week made it O-fficial. Chinese battery manufacturer Gotion aka Guoxuan, would be investing $2.36B to build a battery component factory in western Michigan. Steve and I had a great chat about how till now, Michigan had missed out on ALL the major investments into additional US battery cell manufacturing to other states, mostly southern non-union BTW. Governer Whitmer needed a win and so it seemed that two parties that wanted something positive to happen, regardless of how this might contradict their govts’ views and current diplomatic relationship. TESLA - Tesla electric Semi on its way to Pepsi. Elon tweeted today that initial deliveries for the long-awaited Tesla Semi would begin in December. Originally promised in 2019, there are few real details except that it has a range of 500 miles. At what size payload Tesla hasn’t offered so that range is totally meaningless. I guess we’ll have to actually wait and see one in action before we pass judgement on whether that 2 year delay led to real innovation. The truck is priced at $180K but should be eligible in the US for a $40K govt. subsidy. More handouts for Tesla. GET SMARTER - The difference between a motorcycle, scooter, moped, motorized bicycles and trikes. I won’t go through too many details other than motorcycles are all about step over vs. step through (for scooters) to get seated. The Vespa style scooters also normally have a foot deck or a place for your feet. There are also those electric kick ‘scooters’ made popular by Lime/Bird that have no resemblance to the Vespa style but are also called scooters. Why? That’s for another time to figure out. I just differentiate by saying kick scooter vs. scooter. This article also defines a moped as gas/electric powered with pedals not unlike today’s electric bicycles. The big difference between scooters vs. mopeds – scooters have no pedals. Electric bicycles have become a thing now (and that’s good) with increased range, speed, and comfortability. How the US defines them is by speed and its totally confusing, so we won’t get into that here. Got it? Good, I buy these definitions and will try to use this system in the future so as not to confuse you. Why this is important is because unlike the US, the rest of the world tends to use motorcycles, scooters and mopeds as delivery vehicles, daily transportation and family vehicle all in one. IN THE NEWS - GM thinks the Chevy Bolt could help them compete with Tesla in the US. They could be right. I was told that global sales for the 1st half of 2022 for GM are as follows for these cars. An important (*) is that you may see a MUCH larger sales number from GM in other reports and that's because the Wuling Hongguang Mini EV is included in that amount but for this post, I want to focus solely on their conventional vehicles:
Chevy Bolt – 14,709
Hummer EV - 411
Cadillac Lyriq – 76
These numbers have not been confirmed but do come from someone I trust. Those are pretty anemic global numbers but to be fair, the Hummer EV & Lyriq were both ramping earlier this year. But what I’ve been told by dealers here is that the Bolt is looking at 12-18 week lead times for delivery so the Bolt could potentially be a major driver of EV sales. That’s if they can tightly manage supply chains and get those lead times down. TRENDING ON SOCIAL MEDIA - Geely takes a 7.6% stake in Aston Martin Lagonda. If we’re keeping score, Geely now has stakes in Merc, Volvo and owns Lotus, London Cab and Proton. Geely has collected quite a trophy case full of prestigious European auto brands, specifically ones from the UK. Whether they’ll be able to make them profitable is another story. They have a number of their own homegrown brands including recently launched Radar. The foreign brands were acquisition targets for a reason, they weren’t managed very well and/or just didn’t sell enough cars. How Geely will be able to balance each brand’s storied histories with new, edgier product that’ll redefine the brand will be the key to whether Geely ultimately can become a global automaker and whether these historic brands will live well into the future. - More restrictions on China for chips and chipmaking equipment in the works by the US govt? Remember a few weeks back, the US govt began restricting chips fab’d by Nvidia and AMD that are specifically used in servers? Well, it looks like they may go even further with restrictions on other types of ASICs and equipment/SW used in their fabrication. More deets could come as early as next week but as you can see, interesting times we’re living in right now, specifically on the EV side. INTRODUCING - The Honda Prologue. This is Honda’s first SUV EV that was co-developed by GM that’ll be available starting in 2024. Yes, 2024. To say that the Japanese legacy automakers have come late to the EV party could be the understatement of the decade. Their product better be tight, bug free and have all the knowledge built in from their foreign competitors and all of the missteps they dealt with for being on the advance team that launched EVs like VW, GM, Ford and others. BY THE NUMBERS - 201,259. That’s how many vehicles sold in September of which 200,973 were NEVs (BEV + PHEV), surpassing 200K in one month for the first time. This is the 6th month in a row that BYD sales have broken a record. - -15%. That’s how much an electronically traded fund for electric and autonomous vehicle companies called the Global X Autonomous and Electric Vehicle ETF (clever name) has lost in September. The market is bracing for a recession and even higher interest rates which would make financing a car more expensive. These factors have led to EV company share prices are taking a beating because of it. And it’s not just limited to the US stocks, NIO (-20%) & XPeng (-34%) were down in September as 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 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.