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SAI WEEKLY 01 - 24: 2024's Big, Bold Predictions



 

I was also supposed to be on a plane to Vegas soon but alas, I may not make it. Pretty bummed about this but I am planning my trips for 2024 so look forward to visiting Europe at least twice, China three (or four) times and a ton of travel in and around the US over the next 12 months.

 

We are also experimenting with new formats for content so stay tuned as we dial in how we want to present it and when the time comes, I would appreciate your support as we roll it out. I am really looking forward to trying some new things.

 

It goes in waves, getting called out, being offered constructive criticism or at least getting some pushback from you all so if there’s anything that I type in this newsletter or in an article I am quoted in – please feel free to call it out to me. You know my email. And I always enjoy being educated because although I am fairly opinionated, I’d like to also think I am fairly open minded. Different perspectives sharpen my knives so bring it on!

 

Finally, I hope you all have had the opportunity to enjoy some time away from your computers, spend some quality time with friends and family and are well rested. I know there have been some recent tragedies / challenges as well, so to my friends that went over to Japan to ski, please be safe.

 

2024 is gonna be ⚡️ ⚡️ ⚡️ ⚡️ , so I appreciate you taking this ride with me - Giddyup!

 

For those wondering, the Pistons snapped their record-breaking losing streak at 28 games, but have started a new one being 0-2 since their win vs. Toronto on Dec 30th.

 

Oh, and the Lions got robbed on a 2pt conversion vs, Dallas that would’ve likely won them the game.

 

Putting this header up top since it’s what’s been dominating the interwebs the last couple days.

 

 

BY THE NUMBERS

The big news this week. BYD beats Tesla in sales of BEVs in Q4’23, 526,409 vs. 484,507. I’ve bolded the most important detail because Tesla is still the global champion on an annual basis, 1.81M to 1.574M, but symbolically an important line has been crossed and with the lack of products from Tesla (or if you’re a half glass full type) a plethora of products offered by BYD, we should start to see BYD distance itself from Tesla in 2024 and beyond.  


 

For all the concern about China EV Inc flooding Europe with cheap Chinese EVs, here’s the reality.



This is a picture in time and the growth rates are high, but still on a mighty small base. There’s time for the European automakers to launch their reinforcements, but not much time.

 

 

TESLA

Despite being dethroned in Q4, Tesla should be given a TON of credit since they’ve ridden two products – the Model 3 & Model Y to great heights. Of the 1.81M cars sold globally, just 69K were Model S / X (and likely a handful of Cybertrucks). Further and this is the KICKER – 52% of Tesla’s vehicles were produced in China. For those wondering how important China is to Tesla, it’s 52% important.

 

I will say this again to anyone that cares to listen. Any analyst that talks about Tesla without knowing the specific details about what they are doing in China and / or what is happening in China for them to do what they do - and I mean not just regurgitating all the great Tesla coverage by CNEVPost.com, CarNewsChina.com or me – don’t give them any credibility.

 

All you need to know is that if they haven’t visited China since it’s opened up post-COVID, they are just repeating talking points from those of us that are actually grinding it out.

 

I don’t just write about Tesla though so for those that are wondering about the rest of the US traded EV companies, here’s a snapshot for those keeping score:



For some of you that read the Forbes piece where I laid out some of my predictions, I won’t get into too many details since you can find it here, but in summary:

  • The price wars will last.

  • China Auto / EV Inc enters the Americas via MX.

  • BYD still the one to beat.

  • Global protectionism will add to overcapacity.

  • Foreign brands will selectively succeed in China.

  • US capital markets will attract Chinese EV makers.

 

I feel fairly confident in the above predictions (with the exception of one or two, guess which ones), so this is where I’ll go out on a limb.

 

In 2024, the light bulb will finally turn on for those in Europe and the US that still haven't 'gotten it' till now with the realization that the traditional automotive sector and brands that they’ve come to know and even trust in some cases are in for the fight of their lives.

 

We aren’t in an analog world anymore so things start to move much faster, uncomfortably so for those lobbying to try to make it stop. Those that think the Inflation Reduction Act shields the US Three from China EV Inc eating its lunch in North America, it will for a couple of years ...maybe – it doesn’t help them vs. Tesla and Silicon Valley. This plays right into their hands. Silicon Valley has no interest in building or selling cars, they just want access to the data. They know that Legacy Auto have a mountain to climb re: software (SW) so they’ll keep the pressure on.

 

If we believe that the move to EVs is a foregone conclusion (it is), the playing field is now software. For those that think Legacy Auto can develop that skillset easily, may I present to you what GM let out into the wild just last month. Kevin Williams does a fantastic job of describing how SO NOT READY Legacy Auto is to compete against Apple, Amazon or Google. Here’s also a visual of the Chevy Blazer's front console and what Apple plans to roll out this year. Remember, with Apple's you can customize it. Not so much with the Blazer.  

 



 

  

Blazer top / Porsche w/ CarPlay on the bottom.

 

The Blazer front console isn't bad, but it's not great either. Even if you like the Blazer's better. Now do it without bugs!

 

Also in 2024, things get pretty dark for a number of automotive brands, both traditional and EV startup, specifically those that aren’t willing to make the tough decisions they need to to go faster and right the ship.


This environment lends itself to some absolutely desperate moves being made so without further ado, here’s my list of BOLD predictions for 2024:

 

  • NIO finds a foreign partner. Being left out isn’t a good feeling so NIO finally finds a foreign entity to dance with. Unfortunately, this likely means that they and their dance partner haven’t turned the corner on sales caused by the continuing fierce competitive China market. As to who – maybe it’s not European, but a neighbor to the East. One whose national food is fermented cabbage?

 

  • Ample finds a partner in North America. Stellantis is kicking the tires on Ample’s tech and business model in Europe. While its now very clear to the US Three that trucks don’t lend themselves to a very long range if you’re towing / hauling with current battery tech (at any price) so one of the US Three will bite and try out swapping for North America.

 

  • The EV price war moves West. Slow demand + hybrids taking share + $7.5K for some not all + excess EV capacity doing nothing = price cuts to move the metal.

 

  • The US will raise the tariffs on Chinese imported vehicles to 40%. I know there is real concern in Washington about China EV Inc and the potential damage it could do to the US automotive sector and the US Three. I also know it’s an election year so this could score points. But remember my other prediction.

 

If the US govt does this, this all but guarantees FDI from Chinese automotive brands into MX will reach all-time highs creating friction between the US govt & its neighbor to the south. But the US can’t have it both ways. Jobs are jobs, so if the US doesn’t want them, CA and MX will be more than happy to oblige.

 

  • The CEO of a global automaker steps down. Changing the culture of a 110 year-old company (and trying to get them to move faster) is too much and one says ‘NO MAS.’ I have an opinion on who but I’ll keep that to myself for now.

 

  • Massive layoffs at the Legacies. But we knew this, right? You can disguise them as anything you want, call them attrition or whatever but unless these car companies get much smaller in a very short period of time, they will not be able to compete with Tesla or BYD. Even if they can get much, much, much better at software.

 

  • Even as price war continues, NEV sales in China falls back down to earth. Let’s not get foolish here, it’ll do well over 10M units in 2024 but it won’t have massive % growth like in years past.

 

 

CHINA EVs & MORE (CEM)

9am ET on Friday, tomorrow. Join us. Our 2024 Predictions episode – Can’t MISS this one. Lei and I throw out our bold predictions for the 2-4 including whether or not my Lions will win the Super Bowl!

 

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. You can any questions you have.

 

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

-   Financial Times. I had a nice long exchange with Ed White from FT re: BYD and Tesla. He captures some of my thoughts in two articles, one that I’ve posted here.


 

_________________

 

 

 

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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