I am off tomorrow to Shanghai for my first business trip in what feels like years. I’ve set up some meetings and will be participating in Technode’s Emerge Conference 2020 on Thursday which happens to be the first in-person conference I’ll be attending in forever as well. I’ll be sitting in on the EV panel ‘What’s Next as the Industry Recovers.’ Should be an interesting discussion, I will do my best to make it so.
For those in Shanghai that are interested in attending, tickets are still available here: https://www.huodongxing.com/event/4567179400100
For those unable to attend the conference but would like to still connect, please WeChat or email me. I am sure there will be some time in the evenings to grab one of those tasty adult beverages somewhere in Jingan.
With the US election next Tuesday, there doesn’t seem to be much else being covered on Western news. Either candidate will need to address the US’s slow embrace of EVs, that’s if they want the US to maintain its competitiveness in the automotive sector globally.
Actually, there is one other major event being covered and that’s Ant Financial’s IPO which is a HUGE feather in Jack Ma’s cap which in turn makes it a HUGE feather in China’s cap. Their targeting to raise $34B at a $310B valuation which should make it the largest IPO ever! The numbers for Ant are staggering and I am not talking about valuations. I’ve outlined a few of them below.
We’ve recently seen GM (+~16%) & Ford (+~18%) share prices appreciate over the last month as some of their EV announcements and cred have rubbed off on their valuation. Especially when it comes to GM’s Hummer reveal. That thing is a BEAST. The Hummer Edition 1, at >$112K is really targeted at the .1%ers but I bet with a warm reception and brisk sales, there will be smaller, less expensive Hummer derivatives planned. This as Tesla’s valuation, after some volatility, has settled back down to $420 where it was about a month ago.
I have seen over the last week or so more articles about how EVs have arrived. Folks - I am here to tell you that they arrived > 5 years ago via China but that the foreign automakers didn’t want to acknowledge it, especially before pre-Covid. They thought they had more time, I am talking to you US automakers, but that timeline has been pulled in by a good 18-24 months.
TESLA IN THE NEWS:
- About 7K Standard Range Tesla Model 3s that were manufactured at Shanghai Giga were put on a boat this week for their ~month long journey to Belgium where they will be then sorted and sent on their way to Germany, France, Italy, Netherlands, Spain, Switzerland, and Sweden for sale.
- Tesla reported their 5th straight quarter of profits last week. It’s also still on track to meet their target of 500K delivered in 2020.
- Tesla’s FSD (Full Self Driving) beta was rolled out to a limited # of customers last week and there have already been a blitz of FSD controlled Tesla vehicle videos posted on the interwebs. It’ll launch as a $10K package once it’s available at the end of this year to the general Tesla customers.
- Elon surpassed the market value target for Tesla and was able to collect his third tranche of options. The three tranches are collectively currently valued at $8.8B. That HAS to chap the Tesla bears.
All this really does is prove how much Tesla is more like traditional OEMs than Elon wants to let on. If quality doesn’t become a more of a priority for Tesla, these recalls will go from 5 figures to 6 figures (with addition of Model Y) which would make them a big headache and cash drain on Tesla. And software can’t be flashed or an OTA update can’t solve these types of quality spills.
IN THE NEWS:
- For those in Detroit & Warren that had any doubt that all of GM’s decisions are in the best interests of the US market, you’ve not been paying attention. GM will be doubling their Shanghai-based GM China Advanced Design Center to be completed by CQ2’21. This was long overdue BTW and further illustrates how China has become equally important to GM remaining a ‘global’ automaker. …thanks to Gen for the forward.
- An impasse between the various parties responsible for transportation in Hong Kong pushes out the decision on how to redesign the transportation system to try and accommodate multiple interested parties, including ridehailing firms, with mainly diverging goals.
For those that have worked at or with govt. entities, you probably know how this feels. This could mean opportunities for any entities that could bring the parties together and come up with a resolution that would make all parties the same amount of unhappy.
- You’ve probably heard of Shazam, the Apple-owned app that can determine a song’s title just by listening to the song. Well, how about an app that determines what’s wrong with your car by listening to it run?
A pilot app has recently been launched by Skoda 14 countries to diagnose vehicle issues. The app uses AI to compare the engine running to its database of engine sounds in order to make a diagnosis. Pretty cool stuff that we’ll see more of as the majors begin embed technology into their vehicles and systems.
- “At current rates and pack sizes, the average battery cost for a typical electric vehicle works out to about $7,350.” Would you like to know how & why battery cells affect everything from the safety, reliability, range, and affordability of an EV? Here's a brief & simple tutorial on EV batteries.
- Uh-oh - Uber and Lyft’s ridehailing, ‘won’t likely be profitable at any time’ business model, just got another dose of bad news. The state of CA has confirmed that drivers need to be treated as ‘employees’ which would push the possibility of these gig economy companies’ profitability further out. And it was already years out. This upheld law will also affect other gig-economy startups like food delivery. Back to the drawing board guys.
- VW Group re-org’ing, getting smaller in order to shed costs? There are rumors of Bentley getting moved under Audi and Lamborghini getting spun off. As I’ve stated in previous newsletters, this needed to happen long ago. This is one part of the equation, the other important part being to bring up their software development capabilities – that one’s definitely easier said than done.
One thing is for sure, VW Group and likely other large OEMs (see GM, Bimmer, Daimler & Ford) will not look the same in 2 years.
- Finally – A universal cheat sheet that outlines all the categories of autonomous delivery vehicles from the World Economic Forum. Maybe. This is likely only going to be relevant for another 2 years TOPS as innovations, technology, reduced cost in the sector will lead to new form factors and new use cases.
TRENDING ON SOCIAL MEDIA
- Micro EVs delivered to your driveway anywhere in the US? DONE. Working with DHL in order to deliver these two seat bigger than a motorcycle but smaller than a Yugo anywhere in the US will kill two birds with one stone, extending its reach nationally while also bypassing the dealership laws in states like Michigan and Texas.
- Steven Yuen, mostly known for his role as Glenn Rhee in the Walking Dead, has a real chance to become the first Asian American actor nominated for an Academy Award. That’s right – nominated, we’re not even talking about winning …yet.
- Twitter blew up when the 6’4”, 229lb Seattle Seahawk wide receiver - DK Metcalf - came from behind to tackle a defensive back (DB) that had, he thought anyways, 95 yards of open field to return his interception for a TD. DK turned on the afterburners and got up to 22.64mph to catch the DB from behind. You better believe I showed my boys the video and told them “That’s why you NEVER GIVE UP!”
- For my US audience: Did you want to know what the particular e-bike laws for your state are? Well Super73, the e-bike maker has consolidated all this information into one website. You’re welcome.
STATS OF NOTE
- 1,000HP, 11,500 lb-ft of torque, 0-60mph in ~3 secs., >350 mile range, $112,595 MSRP. No we
aren’t talking about the next supercar from Ferrari, those are vital stats from the 2022 Hummer Edition 1 that’s scheduled to ship in the Fall of ’21. It’s definitely the biggest and the baddest of the bunch …so far. Ford, Rivian, Ram, Great Wall – Challenge accepted?
- 1 of 4 (25%) new vehicle buyers in China choose local brands instead of their international rivals because of their product quality or driving performance – based on JD Power China Initial Quality study released this week. That number was 16% in 2015.
- Ant Financial: 730M monthly users (Paypal has 346M), from June 2019 – June 2020 it handled $17T in digital payments in mainland China. That’s with a T.
PRODUCT & SERVICE INTRODUCTIONS
- The electric bike/mini-cycle for the ranch. Check out the Volcon Grunt from Texas.
- Russian ridehailing app InDriver debuts in Vietnam’s already brutal market. There’s a nifty feature in InDriver that could make it attractive to Vietnamese consumers though, you can barter on the app throwing out bids for drivers to accept or reject. Now THAT’S putting power back into the consumer!
- Two new Dutch designed & built, belt driven e-bikes launch in North America. The Dutch take e-bikes as serious as a heart attack so the Gazelle Ultimate C8 & C380 could be formidable products in an increasingly crowded market. At $3,499 & $4,499 these aren’t entry level bikes.
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