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SAI Weekly #09 - 24: Geneva Auto No Go, Apple Car No Go, BYD & the US Market No Go



 

Thought long and hard about going to the Geneva Auto show but I’ll be crossing borders soon enough for work so I pulled the ripcord. Glad I did. Not a lot to see that I haven’t already with the exception of something I highlight below from Yangwang.

 

Besides, I am getting play-by-play by a couple moles that are on the ground. One of them - Roger Atkins - posted this on LI, his chat with Luca de Meo (Renault CEO), Peter Rawlinson (Lucid CEO) and Silvio Pietro Angori (Pinanfarina CEO) about titled “Navigating the Future of Electric Vehicles.’ 

 

Aside from the few real gems like that panel discussion, I really just wanted to go to meet up with a few old friends that have nothing to do with the mobility sector. I just confirmed a trip to Europe for later this year though so that’ll have to wait. More on that in future newsletters.

 

I’ve been quite popular this week too. I think it’s partly because I got a bit saucy for a Business Insider article when I was speaking with friend of Sino Auto Insights Linette Lopez re: China EV Inc and how they’ve really got folks a bit paranoid.

 

This and other recent articles point to an awakening in the west, that ‘Shit, what just happened??’ moment. But rather than take stock of how we got here and how we are gonna get out of the current situation, we point to a boogeyman that used the same tried and true tactics that we’ve (collectively the West) used in the past to build up our domestic sectors, specifically the automotive sector. If you’re wondering what those levers are, it’s subsidies, preferred treatment and oh bailouts.

 

There are also some real, nuanced and valid concerns by these governments that should be addressed but by blanketly yelling that the sky is falling makes this much more confrontational at a time we should be trying to lower the temperature in the room.

 

Perhaps that’s why I think this newsletter is fairly important (my soapbox moment). I see myself as an objective third party who points out what’s happening, how it’s happened and more importantly, what needs to be done moving forward if we’re at all going to be competitive, that includes all parties.

 

This whole idea of catching up / overtaking China just gets folks moving in the wrong direction. How are we going to match volumes with a country that has 4x the number of people that the US does? That surpassed our vehicle sales …in 2009! That has the well-earned nickname of ‘manufacturer to the world.’

 

Can we do things better, ABSOLUTELY. More efficiently, perhaps. And that’s where we should focus our efforts.

 

The biggest news this week was that the Apple Car O-fficially got got. An internal email communicated that the flailing project is finally going to be put to bed. In previous newsletters I’ve mentioned that I’d never seen Apple so indecisive about anything. First it was HW + SW, then SW ONLY, that decision I heard is why Doug Field left.

 

I know a few people on the Special Projects team and I know they were passionate about continuing to work on it although I got the impression that the fits and starts was wearing thin.

 

I read this as Apple not only couldn’t find the margin to keep it going, but that they couldn’t reconcile the UX to Apple standards. Am I disappointed, yes, I am. I would’ve loved to have seen what they would come up, perhaps that’s also another reason to stick a fork in it.

 

They couldn’t differentiate it enough – something I may blame China EV Inc for. They’re innovating like crazy over there and in 6-month increments. That’s an insane speed of pushing out new features and products.

 

I told some ex-colleagues jokingly a while back that I’d consider coming back to Apple if I could help them work on Project Titan (not that they would have me), but now it seems I’ll never work for Apple again and can finally rest employee number 57522 for good.

 

All the major news outlets have written something on it but since Bloomberg scooped it, I’ll like you all to that article. BTW, I am not convinced that Apple will never come back to it. I think there’s too much opportunity and it’s something that Tim will be able to hang his hat on to cement his legacy at Apple.

 

He’s been a tremendous manager for Apple, but no one would point to his ability to push Apple to that next level of innovation – post Steve anyway. An Apple Car would’ve done that.

 

Finally, we know that they are going to focus on generative AI but if I were a dev at a legacy OEM working on an in-house OS, I’d be sleeping less well tonight. The closing of this one important door means that they’ll definitely look to dial up the pressure by putting much more effort into CarPlay and integration with the iPhone.

 

 

CHINA EVs & MORE (CEM)

Join us 9am ET on Friday as we talk 电比油低 (see the cover art) among many other topics. For those that can join, bring any questions or topics you want us to chat about.

 

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.

 

 

INTERVIEWED / QUOTED

-   Business Insider. For those wondering, here’s the article I was referring to about my overzealousness when speaking with Linette. Bet you don’t know too many people that have dropped the F bomb in an article for the Business Insider. Well, you’re looking at one of them! ;-)

 

As a matter of fact, Autopian gave me the Stringer Bell treatment for my quote. I became a ‘The Wire’ afficionado a bit later than some but it’s hands down one of the best series on TV - FULL STOP.

 

For those Americans wondering who Stringer Bell is, imagine Idris Elba growing up in Charm City, where the series is set. I was never fully convinced of his American accent but he’s definitely made something out of his time on the show. Michael B. Jordan too!

 

-   Automotive World’s deep dive on swapping for commercial vehicles. Stewart Burnett captured my thoughts for his piece on commercial trucks + swapping in China and its viability. He goes into details about scale, specifically when compared to its western counterparts and how that increases the chance of adopting new technologies.

 

To put it simply, any technology the Chinese government deems viable they follow with investment and a nudge to the private sector that urges them to ‘work out the details’ and I see battery swapping for commercial vehicles the same way.

 

“If China decides a technology is going to be viable domestically, it usually is, and that creates an opportunity for other countries too.”

 

-  I spoke with Jake Lingeman for his piece in Newsweek that’s posted here. It goes into some depth about the clear advantage that BYD has, even over Tesla. Here’s part of my contribution:

 

"It's BYD's world and everyone else just lives in it. Tesla is just going to try to hold on and continue to play defense to protect share until they can get the Model 2 rolled out. By then, will it be too late? To answer succinctly, with as much control over its own (important components) supply chain, its aggressive expansion into more than 70 countries, BYD has many levers to help them weather the storm in China while also continuing to grow, albeit at likely a much smaller pace in 2024. Expect an even stronger BYD post price war," said Le.

 


NO WORDS

Graphic courtesy of the WSJ

 


BYD

-   Mexico - Probably. The US - NO …at least not yet. Fortune (I think) interviewed Stella Li this week for the linked article. She’s been notoriously difficult to get a quote from over the last couple years so kudos to Fortune for being able to speak with her.  

 

She said that BYD is evaluating where to build a factory in Mexico and a final Yes / No decision will likely be announced just after 2025, when the new US president has been officially sworn in.

 

BYD is doing two things, staying out of the spotlight during a US election year but also staying out of the glare of the Chinese govt who likely don’t want any major waves as they try to sort out their own economy. Mexico can serve as a jumping off point for supplying Latin & South America with their own affordable cars.

 

It won't move the needle too much from total sales volumes for BYD, but it helps them sharpen their knives for when they do decide to enter. It'll take BYD some time to get their manufacturing up to the quality and speed levels they currently see in Shenzhen, Huizhou, Xi'an, Shanghai, Shanxi and Dalian.

 


TESLA

-   The Roadster by the end of next year says Elon. 0-60MPH in 1 second. That’s going to take a massive amount of engineering to make that real. I have no idea if it’s even possible. BUT Elon has confirmed in some tweets that an updated Roadster will be unveiled by the end of this year and that deliveries should start about a year later. 

 

If you believe him, that means that the Tesla team is VERY busy back in the lab since they’ll now have two new vehicles that they need to engineer, test and then launch manufacturing for before the end of 2025. One that promises to be the Halo EV of all Halo cars and one EV that could put a few EV companies and some legacy brands out of business.

 

Notice I said brands and not OEMs. There are some brands a lá Oldsmobile and Pontiac, that have no business still selling cars. And I mean that from a global perspective, so Europe and China too.

 

With new entries and potentially new entries in the hyper-car segment, the incumbents: Ferrari, Lambo and Porsche have to be feeling a bit vulnerable. Elon has famously said EV adoption happens when EVs are better than their petrol alternatives so expect the spec sheet on the Roadster - once it’s finally revealed - to push the limits of what’s currently out there and best some of its traditional supercar competition.

 

If they weren’t already thinking about it, the set of tweets yesterday should’ve set off the alarm bells at the Italian Three. For those wondering why, see what the Plaid has been able to do. And the Roadster will be clean sheet which means less constraints and likely an over-the-top MSRP.

 

Let me be clear about something else as well, since I’ve argued this in a number of WeChat groups I am in.

 

If you like speed you must love the Koenigsegg Regera, the Model S Plaid, the Porsche Taycan and the thought of the Tesla Roadster. If you don’t, that means you just love gas. Because the Regera smokes just about anything else out there including the Bugatti Chiron.

 

Now I get why people prefer the sound of a V8 or V12, and the grumble of the vehicle while you’re carving up some twistys but be honest with yourself. EVs offer better speed and handling and EVs will eventually overtake the limitations of petrol fueled supercars.

 


BIGGEST NEWS OF THE WEEK

-   More details on the VW Group & XPeng collab. Surprise, surprise – it’s going to be a midsized SUV to start, a highly popular vehicle type for the China market. It’s going to carry the VW badge and should ease the cost structure for XPeng quite significantly.

 

What I am wondering. Who has final say on engineering / design considerations? Will this be a frankenstein’d mess or will they try to make this a gamechanger? Hoping for the latter of course.

 

Here are a couple of snaps of my visit to XPeng in 2019, just before they began delivery of the P7.



 

-   Ford owners thanking Tesla today. It more than doubles the number of chargers available to Ford EV owners (looking at you F150 Lightning & Mach E owners), but the problem? Not enough dongles (or adapters).

 

These adapters are free until June 30th so get your reservations in. You may not get it by that time, but it beats paying the $230 it’ll cost after that date.

 

-   A HiPhi bailout coming? According to CNEVPost, perhaps. HiPhi has been talking to Changan with Changan kicking the tires on a 51% stake. I think part of HiPhi’s due diligence should be to talk with Ford about the challenges they continue to have working with Changan as a JV partner. Not to say it's all Changan's fault though.

 

-   Yangwang U9 specs revealed. And they are pretty significant, including a price of ¥1.68M or about $235K! 0-60mph in 2.4 seconds with a range (not that impressive) of 465km or 279 miles. This might seem expensive, but it undercuts the incumbents, the Italian Three by a lot in China. The Italian Three might not be completely freaked out, but the footsteps they hear are getting louder for sure.

 

In a surprising turn of events, BYD decided to use LFP batteries, the chemistry it specializes in. It’s outlined neatly in Steve Levine’s The Electric this week, it’s paywalled but the link to it is here.

 

 

BY THE NUMBERS

-   $950M. That’s how much debt Polestar has raised to keep its doors open and continue to expand with their third and fourth vehicles. One of the conditions of accessing this needed capital is to get smaller, of which they’ve gotten 10% smaller starting from last year but will need to cut an additional 15% in 2024.

 

This could be a challenging next few years for Polestar unless there’s a clear runaway success with one of their new products which doesn’t seem likely at the pricepoints they’re likely to enter the market with.

 

 

_________________

 

 

 

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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