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MOBILIT/E Kicks Off with a Bang, NIO ES7 Announced, Porsche is Crushing in China - SAI Newsletter 6



 

The MOBILIT/E Conference has kicked off this week and I’d say the first few days have been pretty successful. I had a marathon Tuesday AM / Wednesday AM when I moderated 3 panels.

That’s only because next Monday is President’s day in the US – a national holiday – so we decided to double up Tuesday and take that day off for the conference.

Tonight I will moderate the connected panel which is right after the Amazon Alexa keynote that starts at 3pm GMT. The other panels scheduled for today are semiconductors and software. The panelists for each of the panels are all rockstars too that know what they’re talking about so please do join us if you have the chance.

Otherwise, recordings will be available should the times of the discussions aren’t convenient.

Click here to register: https://mobilit-e2022.climatetransformed.com/

It feels like the calm before the storm. We are just over two months away from the Beijing Auto show but the news cycle is a bit slow in the auto space right now as most of China’s attention is being paid to the Olympics anyway so this newsletter will be short and sweet.

But first, January sales numbers in a graph from Lei.

We also know now that Tesla produced 59,845 units in January with 40,499 of them being exported or 19,346 units sold to domestic customers. No real surprises with the exception of BYD's continued sales strength. As NIO readies delivery of its first ET7s to customers and prepares to reveal its just announced ES7 in April, we see the company’s strategy inside and outside of China coming into more focus. I was interviewed by Mark Andrews for his article on NIO’s move into Europe. Mark breaks down NIO’s entry into the importance of the ET5 and the new partnerships NIO needs to establish, nurture and grow if it’s to succeed. Ultimately, their vehicles need to stand toe to toe with ABB (Audi, BMW, Benz) if it’s to be successful in Europe. A tall task in their own backyard of Germany. That’s why NIO is taking a more cautious approach. The adage that you have one chance to make a first impression holds true in this case. To read that article, you can click here: Please join Lei and me for this week’s EVs & More Twitter Spaces room – Thursday, 02/17 – 9pm EST, Friday, 02/18 - 10am China local time. For those that aren’t able to join, the 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. TESLA NEWS - Is South Korea putting a smackdown on Tesla’s potentially exaggerated range claims? The South Korean govt sure does seem like they’re considering it. Tesla has become pretty popular in Japan and South Korea, two countries that are normally fiercely loyal to its domestic car brands. So could this be a bit of protectionism disguised as consumer advocacy? I don’t think so but it can’t be ruled out. I think most South Koreans you talk to would tell you that Hyundai has a TON of influence where it matters most – with the Korean govt. - ShanghaiGiga to get to 1M units of capacity in the near future. This should happen within the next few years. I do not believe currently there is 1M units of demand in China …yet. But I could see it happening within a few years if Tesla increases the number of products on offer here. I could also see a scenario where a good % of that 1M units of capacity is dedicated to export. I could also see India getting some love in the form of a dedicated manufacturing facility as well since the Indian govt would likely not look kindly on Tesla exports built in China being sold in India. The good thing is that the Indian passenger vehicle market is the 4th largest in the world, so a small-ish Indian factory would likely have domestic customers for most of its capacity. Whether the India grid can take it, well that’s a whole other discussion. - Racial bias at the Tesla Fremont factory? The state of California thinks so. In my experience working at assembly plants and visiting and working at dozens (if not hundreds) of smaller parts manufacturers and powertrain plants, is that the factory floor is NOT a place for the politically correct. There were times that I could tell folks were trying to intimidate me and/or my co-workers with the things they said or did so I think most people that have worked in factories will tell you that ‘it’ happening isn’t unusual. The rub is that Tesla is being accused of letting it go on – which isn’t cool. I see a settlement here forthcoming because if any part of the allegations are true, they don’t want any more stories of it leaking out to the public domain – if in fact they did know about it and did nothing. IN THE NEWS - The NIO ES7 is on its way. As the name implies, this SUV will slot between the ES6 & ES8. President Qin Lihong is aiming straight away at BMW buyers and said as much during press conference/fireside chat he had last week. It’ll be revealed in April at the Beijing Auto show. This means there are two major launches this year for NIO. With the chip/battery shortage in the background, pulling both off without any major delays or quality issues, well that’ll take some serious management skills. Does the NIO management team have what it takes – We will find out soon! - Baidu Apollo invades Shenzhen. Robin Li is getting aggressive with his expansion plans for China. They are now in every tier 1 city in China. Baidu also has capital to spare, unlike many of their main startup competitors which gives them another advantage but can they move as quickly as their peers, specifically the 2nd wave AV startups like QCraft and DeepRoute. With US SPACs and IPOs effectively off the table, the startups need to raise more capital to keep up with each other so look for more announcements of investments or capital infusions from the Baidu Apollo’s startup competitors later this year. Competition is heating up - I will make sure to get out and try these pilots out once the weather lets up. I promise to report back after I do too! TRENDING ON SOCIAL MEDIA - China’s love affair with Porsche doesn’t seem to be fading. A good piece that gives a lot of background about Porsche’s history in China. We’d expect this article to be thorough as it's written by my China EVs & More co-host - Lei Xing. Porsche sold ~95K cars in China in 2021, its largest market AND that was about a 1/3 of global sales. One number that stands out – Taycan took 18% of total sales for China! Nothing seems to be able to slow Porsche down, not even a pandemic. - Didi getting much, much smaller. It seems that the Chinese govt throwing Didi in a box has really started to affect their operations as they’re rumored to be laying off up to 20% of their employees. This further reinforces the warning to Chinese tech companies – Do not stray from what we wish you to do. There’s a chance that Didi is irreparably damaged goods and likely just going to be a regional ridehailing firm for the foreseeable future. I know quite a few smart investors that didn’t think the smackdown was going to be this severe and it’s those same people that have taken a bath on their investments in Didi. Could Didi’s fortunes change once they delist and relist in HK or SH? I’d say it could. The silver lining for those Didi employees being laid off. There are plenty of other jobs waiting for their skills here in China. BY THE NUMBERS - 10B RMB. – The amount of capital that has been raised by BeyonCa and EV startup founded by ex-Volkswagen executive Weiming Soh. That is a massive number and a HUGE commitment by both parties. What’s the valuation on that investment? This should give them A LOT of flexibility moving forward.


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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 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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