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Shanghai Lock's Down, Polestar & Hertz - Together, Uber's Superapp - SAI Newsletter 13



 

Short week so short newsletter. First off, congratulations to Gogoro which went public yesterday via a merger with Poema Global Holdings. An 11-year old Taiwanese company that has revolutionized battery swapping for the electric moped sector is now, based on its closing share price of ~$14, a $2.35B, publicly-traded company. Bruce Aitken, the CFO of Gogoro was interviewed by Bloomberg yesterday, you can watch the interview here and for the sake of full disclosure, Bruce and I are pretty good friends so I couldn’t be happier for Bruce and the GGR team! That first 京A or watered down Taiwan beer is gonna be on you bruh. Next, Shanghai is a complete mess. Tesla has extended their production shutdown and although 4 days of lockdown is being communicated, it’s likely going to be longer than that, perhaps much longer. Reinforcements have been sent in from Beijing to help manage the lockdown and the outbreak but as of right now, it’s a struggle. It concerns me TBH sitting here in Beijing. Right now, Beijing seems fine but that could quickly change and for certain Shanghai 人 weren’t thinking the local govt. would lock down the 2nd most important city in China for XX days and counting. Q2 sales numbers could be significantly affected if this lockdown lasts more than a month. Finally, I want to make a correction about how I described the Li One last week. The Li One is an EREV and has two electric motors: a 100kW (130HP) motor in the front and a 140kW (190HP) motor in the rear. It is also equipped with a front-mounted 1.2-liter turbocharged 3-cylinder petrol engine with a 55 liter (14.5 US gal; 12.1 imp gal) petrol tank capacity. The petrol engine is a range extender for the electric motors; it does not directly power the wheels, it only generates electricity and send it to the front and rear motors. Please join Lei and I for this week’s EVs & More Twitter Spaces room on Thursday, 04/07 – 9pm EST / Friday, 04/08 – 9am China local time. This week we will tend to the March and Q1 sales numbers and a lot more. 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. QUOTED - Bloomberg: I had a nice catchup with Danny Lee re: BYD’s announcement about having halted production of ICE (internal combustion engine) vehicles in March. I mentioned to him that the announcement was more ceremonial than anything and as you can see from Lei’s chart below, they’ve been dialing down sales for some time. They saw around that corner much earlier than many of their competitors. You can read that article here. - WSJ: Tesla matches their global Q4’21 output by posting 310K units shipped in Q1’22. This despite supply chain and COVID challenges at ShanghaiGiga. I spoke with Meghan Bobrowsky for her Tesla Q1’22 update. I pointed out that Shanghai deliveries wouldn’t likely materially change since the lockdowns came later in the quarter and that Tesla probably got a heads up from local Shanghai govt that it was coming and likely built ahead of the lockdowns. You can read Meghan’s article here. THE MOST INTERESTING THINGS THAT HAPPENED THIS WEEK - Polestar gets a bulk purchase from Hertz. To the tune of 65K units within the next 5 years. Not insignificant, especially considering the sales struggles Polestar is having in the US & China, where the Polestar 2 is consequently built. I’ve driven it and like it but it doesn’t stir my soul TBH. And I said this before, but I remember when selling to fleet meant a huge drop in the residual value of the passenger vehicle version of that same car. - Uber taking major steps to become that mobility superapp that ALL of the legacies are looking to also become. COVID pushed these ambitions out but it seems that they feel the pandemic is behind them, at least in the UK where they will pilot distance travel including train and flight booking. Will their install base bite? There will be many eyeballs on this pilot in the UK. Could this mean that travel sites like Travelocity, Kayak, Trip, and others could just partner with a ride-hailing company or companies depending on the destination city and compete with Uber directly? Better believe it. These traditional travel sites will NOT take kindly to Uber crossing into their turf. The terabytes of data that has already been collected by the travel sites about their customers could come in very handy in customizing experiences for each of their account members – Advantage: Travel sites. TRENDING ON SOCIAL MEDIA - The ship that destroyed about $500M worth of new cars. Some of you may have heard about the ship, the Felicity Ace which caught fire and sank to the bottom of the Atlantic Ocean with a TON of cool cars on board. For those that would like to know which and how many of them we will never see, Motor1 has posted the manifest, and let’s just say that it’s an EPIC (FAIL) fantastic list of brands including Lamborghini, which alone has 85 cars on board including 15 Aventadors. - Because if you can’t beat them, you join them. Renault is mulling whether to follow in the footsteps of Ford and split their future selves from their past/current selves in order to unlock value and allow the future self to offload some dead weight. The reality is that ALL legacies are looking at this same situation, just not as openly. How each will handle the transition is guaranteed to be different (and very entertaining BTW) due to their structure, culture, capabilities, and capital situation. GET SMARTER - The pendulum swings back, again. With the changes to a vehicle shifting to electric brings, OEMs are now looking at ‘making’ commodities whereas in the past, more relied on ‘buying’ commodities from suppliers and focused on the assembly and marketing. When the main differentiators of an EV are software, batteries, and the electric motor(s), it’s now become pretty risky to rely too heavily on a supplier to develop those strategic components lest you want to have an EV that looks and feels eerily similar to your competitor who happens to share the same supplier. Back in the early days of mass production with Henry Ford, he never wanted to rely on suppliers to make ‘his’ parts so he vertically integrated and built most of his vehicle’s most important parts himself (via the Rouge plant) including tires! For me this seems like an overreaction. There’s a lot of pressure on these legacy CEOs as they’re likely monitoring Tesla’s market cap and have to be wondering – how do WE get there? My preference would be to pull that band-aid off as fast as you can. You can’t go full-steam ahead if you’re straddling both worlds. There can NOT be any safety nets. INTRODUCING - The Lotus Eletre. This is one of the vehicles that Lotus hopes can revive the brand and broaden its appeal. This EV SUV will likely compete directly with the ABB & the Porsche Cayenne. British Twitter was having a moment just after the unveiling effectively accusing Lotus of selling out and that an SUV shouldn’t be a part of their product portfolio EVER. It’s a looker and it’s not cheap. MSRP is announced to be ~$130K. Lotus announced that they forecast 100K sales by 2028 and have some less expensive derivatives of this Electre in order to help achieve that goal, which seems modest. BY THE NUMBERS - 8GWh. CATL’s first battery factory in Germany and Germany’s first battery factory EVER just opened this week in Thuringia with an initial capacity of 8GWh, a modest capacity considering they’re building a factory in Ningde that’ll end up having ~120GWh of capacity! 2M. That’s how many NEVs Beijing plans to have by 2025. The city had ~400K NEVs by the end of 2020. To goose the system and achieve that goal, Beijing plans to have 700K charging piles with a charging stations being no farther than 3km away. Why bother having goals unless they’re ambitious, right —— 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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