top of page
Search

Tesla 1st to 70K club, VW Chip Shortage Smokescreen, Ferrari Digital Reorg - SAI Newsletter 02



 

I wanted to clarify one point in my predictions for 2022. BYD getting to 1.4M units in sales of NEVs in 2022 is going to be a stretch. For some reason, I’d thought that BYD’s full-year sales number was >900K but it was in fact 730,093 TOTAL (ICE+ NEV) with 593,745 being the split on NEVs sold for 2021. Lei informed me what the numbers were during last week’s pod. Uhh – REWIND!

I’m taking a mulligan on that number. I don’t think BYD will match Tesla’s global number or my prediction of >1.4M unit sales but I could see total sales of NEVs for BYD hitting over 1.2M vehicles.

Some folks were wondering why I posted a chart w/o Tesla or Wuling numbers and that’s because at the time Lei made the chart, those sales numbers hadn’t come out yet. From now on, I’ll wait until ALL sales numbers have been posted before I attach any charts to the newsletter. Sorry if I caused any confusion about that.

THAT updated chart is below. Tesla absolutely smashed December here in China with 70,847 units produced, of which (a rounding error) 245 units exported. If I do the math right, they delivered 70,602 units to customers here in China. Welcome to the 70K club boys! The ONLY member of the BEV ONLY 70K club.

BYD is a member of a different yet equally exclusive club – the 90K Club, but this club lets hybrids as well as BEVs past the velvet rope. Masterful management from a sales and operations standpoint from those two companies when you consider these record sales numbers were achieved during a pandemic that has affected the supply of chips and batteries for most other automakers.

As I’ve said for some time now, battery AND chip supply issues will plague most manufacturers at least through June 2022. Despite those potential challenges, forecasts for NEV passenger sales for 2022 have all exceeded 5M units, another mindboggling number. If that number is achieved by the end of 2022, that means that similar to 2021 – most EVERYONE gets to eat!

When the pie is growing and most folks are enjoying the spoils of said growing market, it’s sometimes challenging to determine which companies are being managed well and efficiently and which aren’t since they can hide behind that growth (that lifts all boats).


Please join Lei and me in our EVs & More Twitter Spaces room – 01/13/22 Thursday, 9pm EST/01/14 Friday, 10am China local time. To join the room, you can follow me at @sinoautoinsight and/or Lei at: @leixing77 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 - We already know that Tesla delivered just over 936K globally for all of 2021. We now know that ~473K of those cars were built at ShanghaiGiga. For those that don’t have their calculators handy, that’s over 51% of ALL the EVs built by Tesla globally. Now, all 473K vehicles were NOT delivered to customers in China since Tesla did export a good portion of them (likely >160K, the bulk of which occurred at the beginning 2 periods of Q2, 3, & 4 last year. We also know that December was by far their best month in China with 70,847 cars sold total. Only 245 of those were exported. I shared my thoughts on Tesla's December with Brenda Goh from Reuters, you can read that here. To summarize, Tesla was hitting on ALL ahem, cylinders in December to hit that 70K number. No one else in the world came close. This, despite the challenging supply chain issues that are affecting most other automakers. What will be their 2022 encore? We can’t wait to find out. We do know it WON’T involve any new products, none are scheduled to be launched in 2022. New tech though – perhaps? We could see some really interesting tricks from Tesla in order to keep folks tuned in. IN THE NEWS - VW uses smokescreen to disguise the troubles in China. Perhaps the folks in Wolfsburg do NOT realize that the China market is slowly but surely slipping out of the grasp of the VW brand. I think they do know though. Originally forecasting sales of 80-100K, the ID Series settled on ~70K unit sales for all of 2021. That’s between 5 products. Here’s what I know. At the beginning of this year when they announced their sales target, they were sandbagging – VW believed that they could SMASH that 80-100K unit target. Panic set in later in the year when after getting ramped, VW was still seeing weakness in demand. Now, according to this FT article, they seem to be pointing to the chip shortage for the ID Series’ slow 2021 sales. Let me assure you that that isn’t the case. Sure, they likely lost some sales to the chip shortage but the real issue at hand is that VW struggled with having the new ID Series vehicles resonate with Chinese consumers, likely because the technology that they stuffed in them is completely underwhelming after you spend a few minutes in a BYD, XPeng, Tesla, even some of the SOE EV products. The features, design, and pricing from the competition here is NEXT LEVEL. And there’s A LOT of it too. The article reminds us that sales/revenue has been shrinking the last few years and that can’t be blamed on a chip shortage. If it was just a chip shortage, why would they send another ‘EXPERT’ from the Mothership to manage the China team? Bottom line: In order for VW to stem the tide of shrinking revenue/sales, they need to upgrade across the board the HW/SW that’s being stuffed into the ID Series vehicles. Will they still sell over 100K units next year, no doubt. But there was a time when VW made really cool cars that the Chinese consumers wanted to be seen in. That’s just not the case anymore. If they don’t move quickly to upgrade their cars, the customers they lose won’t likely come back to them. If they REALLY want help righting the ship, they should give us a call. GET SMARTER - Stickiness through tech shaming – Apple’s way of helping people ‘Think Different.’ Don’t believe that teens can get bullied or called out for using an Android phone vs. an iPhone. Click this link. It happens. I am guilty of it as well. I don’t give kids a hard time about it but I’ve been known to give a swirly look to a friend that pulls out a Samsung or Xiaomi phone… Using iMessage to send someone a DM is an easy way to determine whether that person is an Android user. If you’re wondering what that green text bubble means when someone you text via your iPhone responds, wonder no more. It means that they’re not using an Apple product. It’s THIS level of detail that tech companies use in order to make sure their products, services, and platforms are your primary tool for …well, everything! Shopping, chatting, getting entertained or transported, scheduling ANYTHING, entertaining others, and a lot of other stuff. I won’t get too deep into describing this article since I think it’s worth a click but this is absolutely insane that people are looked down on due to the technology they (don’t) use. You all know that I am a BIG Apple fan but this stuff bothers me. As more is revealed about how tech companies operate to create that ‘stickiness,’ I think about my kids and how to handle screen time when they have their own phones! It’s even worse if you’re part of the WeChat ecosystem here in China since rather than a set of apps that are part of the same ecosystem & platform, WeChat is just one mega app that does everything and consequently knows EVERYTHING about you. I’ve said this before, WeChat is truly the first SuperApp in the world. And if you live in China, it’s about impossible to get away from. THE MOST INTERESTING THINGS FROM LAST WEEK - Ferrari is really leaning into its, new digital side. New-ish CEO Benedetto Vigna, just announced a reorg to the Ferrari management team and it looks a lot different than what you see at other ICE focused OEMs. First, it should be noted that Vigna is a tech guy. He gets the 1s and 0s – a couple of good examples that really illustrate the mindset change that Vigna brings to Ferrari: The newly appointed head of R&D joins him from STMicroelectronics (a technology solutions company) where Vigna was also poached from. Next, Silvia Gabrielli, whose background is Microsoft and SAP, has been appointed the Chief Digital & Data officer. Those readers who’ve followed me for a while know that I’ve said that we’ll know that auto companies are serious about tech, and to a larger extent change and transformation, when they hire tech folks and put them in leadership roles. Well, Vigna is really leaning into it, because not only did he promote these folks, he’s having them report directly to him. Which companies will follow along this path? The bold ones who truly feel the heat from the competition. It won’t be an easy step for them but it MUST be done. To be clear, there is NO guarantee this will work since there are many factors that determine a team’s success, but how can any technology company be taken seriously unless their leadership has the technology chops? And isn’t that what ALL companies are becoming – software-driven technology companies? Thanks to my buddy Justin for flagging this press release. - This literal teardown of an XPeng vehicle is AWESOME. Do you want to know who supplies what to XPeng, well this is a good first step into finding out. The article does NOT clearly state which XPeng vehicle(s) use this list of suppliers or does it identify the actual part/part number so it could be the MASTER supplier list for all of their vehicles. This is almost as good as seeing the Bill of Materials aka (BOM). A BOM is an internal list of parts for a product that is used to track cost, part numbers and versions of that part, production needs & instructions, and costs. It’s what companies try to back into when they buy a competitor vehicle and ‘tear it down,' it's costed BOM. They want to know at the ‘nut’ and ‘bolt’ level, which parts are being used, how they’re bolted, soldered, welded, and glued together. They will then try to guess how everything works together and determine the cost of each part in order to competitively analyze what they’re up against. It’s not unusual in the tech world since those products are much smaller and less expensive but you can learn A LOT about how a competitor’s engineers think, what their priorities are, and whether or not, they have a physically better product. Sandy Munro is fairly well-known in the auto sector for being paid by OEMs to do this on their behalf. He famously did a teardown on a Tesla Model 3, ripped it but now all of a sudden sings Tesla’s praises. Hmmm… I lucked into this list but will keep my eye out for others. I am certain that Tesla has one or two floating around the interwebs. NEW PLACE, NEW FACE - Based on his LI post, Emmanuel Bret has taken the role of Deputy CEO of Vinfast. He is the now ex-CEO of BMW Group Sweden and it looks like he’ll head over to Hanoi to take on the role. No remote work for him. TRENDING ON SOCIAL MEDIA - What seemed like an innocuous post over the weekend from Rui Ma, who in the past has been a China tech investor, analyst and who subsequently created techbuzzchina.com, turned into a pretty long albeit, limited to 280 characters or less, exchange between her, my, and Lei’s followers. The topic of discussion was an opinion piece from a UK professor that posited that because of China’s political system, they could not dominate the EV space. FULL STOP. She @’d Lei and me in her tweet to get our opinion (if you read this newsletter Rui – thank you!) and before I saw the post, there were already several comments that dismissed the notion that regime determines business success or in this case, the inability for business success. After reading the piece, I sent out a tweet before quite a few more chimed in. Lei and I BOTH pointed back to – What does ‘dominate’ even mean? I added that great success aka domination could be an unintended consequence of the policies, investment, protection, and nurturing that took place over the last 12 years that China EV Inc leads the world (for now) but that was likely never the Chinese govts’ main goal, that being independence from foreign automakers (read: countries) was the main driver for the investment in the China EV/battery sector. There was a lot to unpack so I really didn’t even try. But the argument, if made seriously, had a number of areas that weren’t thoroughly thought through (say that fast 10x’s!) and factors not addressed that would, when combined, would also have a say in determining if China could ‘dominate’ the global EV sector. JUST THE NUMBERS - 5,586. That’s the 2021 global sales number for Rolls Royce with China (~30%) & the Americas (30%) leading the way. Sales are up by 49% from 2020 in what the CEO says is driven by people who, because of Covid, feel that ‘life can be short,’ Bentley & Lambo also posted massive sales numbers. ALL of them were led by China. There is NO letup in the appetite for luxury / premium vehicles here in China. Let me assure you as someone who sees kids from my son’s schools get picked up in Maybach’s, Cullinan’s, Urus’s, and yes even the occasional Ferrari. —— 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.

68 views0 comments

コメント


bottom of page