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Tesla & BYD battery collab, Apple CarPlay Drops Like a Brick, Beijing is BACK - SAi Newsletter 22



 

We are BACK in business. We seemed to have averted a major disaster with a successful containment of Covid here in Beijing. Restaurants have opened back up, people are in their offices and unless something serious happens in the next few days, kids will be back to in-person classes starting next Monday. International schools have only a few weeks until summer break whereas Chinese local schools, where my boys go, are still in school for a good month. There’s a sense of optimism when you speak with folks here and in Shanghai where most people are also free to again roam around the city. There are still a few areas both here and in SH that are locked down but for most, freedom has returned …with an asterisk of course as long as Covid lingers and a certain demo of China isn’t vaxxed. For those wanting to know what May sales looked like, let’s just say the numbers looked better than April. BYD hit its 3rd consecutive month of sales of >100K units. The only other number that stood out was NIO’s 7K sales since by now, they should be able to hit 10K consistently. Chart courtesy of Lei Xing BTW.


China EVs is moving back to our normally scheduled time which this week will be Thursday, 06.10 – 9pm EST, Saturday, 06.11 – 9am China local time so meet us in our Twitter Spaces room then to get a download on all that’s happening in the space.


Those that can’t join, the 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. Here’s a quick rant. For those few that thought that Apple wasn’t entering the mobility space, watch the WWDC keynote starting at the 37m 52s point. Version 2.0 of CarPlay is already better than what many automakers have on offer. Full stop. It's likely going to be better than many of them can do for quite some time. And many automakers have signed up for this, which IMHO is a waving of the white flag. My analogy, one I’ve used for the last 4 years BTW about the tech companies coming to eat legacy auto lunch starts with me asking people to think about when they get into their car. Which logo do they see on their steering wheel? The auto brand’s logo of course. Now, fire up your phone - it doesn’t matter if it’s an iPhone or an Android. Which logo do you see – you see the Apple logo or in an Android phone’s case maybe the handset logo and then an Android logo. Now, imagine we are 3 years out and that steering wheel has a small screen on it. When you start the EV and the screen comes to life, which logo will it show? THAT’s the company that controls the monetizing opportunities. With CarPlay. the companies that concede this now, there's no way to get it back. If the legacies thought they had more time, they don’t. It’s time to shit or get off the pot on the SW dev side for the legacies. Final thing we need to remember, in a SW world that’s being led by China EV Inc & Tesla, things are only going to speed up. Not slow down. This brings me to tonight. JIDU is unveiling their autorobot EV tonight and this is really the first, tech-led EV that’s launching. How will they approach mobility differently than their legacy OEM competitors, we will find out tonight and I can’t wait! TESLA - The BYD & Tesla relationship is real. According to Lian Yubo, a BYD exec, BYD will be supply Tesla with batteries, but will it be a global relationship or just for China? I see this a few different ways. They want to qualify more than one supplier to mitigate risk – this is a business decision that increases flexibility. They want to gain back some negotiating power from CATL – this is a leverage decision, as in CATL had ALL of the leverage. Think BATNA. I’d said before that OEMs NEVER want to be beholden to any of their suppliers, so this set up keeps both BYD & CATL on their toes to keep Tesla happy as long as they want the biz. A couple of things to look out for, will it be close to a 50/50 split to supply Tesla vehicles, or will one supplier get the bulk of the business? Also, to get that leverage completely back on Tesla’s side, they’d need to make this a global partnership, eventually. THE MOST INTERESTING THINGS THAT HAPPENED THIS WEEK - An L3 engaged Merc got into an accident with a semi in California. But it wasn’t the Merc’s fault. Let’s start keeping score: Autonomous vehicle – 0 Human driver - 1 Closest to zero when we get to 2030 wins. IN THE NEWS - Cruise gets the 1st non-safety driver, commercial license (in the world) for its car from the state of California. I know there are a few companies here in China that are pushing for this same license so perhaps with precedent having been set in the US, it will loosen up the restrictions here. I foresee a pilot potentially be granted here in Beijing’s Yizhuang, where all the AV pilots are happening. Let’s see if my prediction is correct, stay tuned. - Waymo and Uber hug it out. Collab on autonomous long-haul trucking. As I understand this, Uber Freight manages the load side for customers and matches their loads with trucks in their network. Waymo will be providing autonomous trucks to that network to help match loads to available trucks. The reason I said they hugged it out is because Waymo had sued Uber back in the Travis Kalanick days when ex-Google employee Anthony Levandowski left to start his own trucking startup called Otto. Otto gets acquired by Uber. Levandowski is accused by Google of stealing IP and the go to court but Waymo & Uber ultimately settle the case with Uber paying Google in Uber shares. So this thing has come full-circle. - Refraction AI & Chick-Fil-a work towards food delivery in under 12mins. We’ve seen Refraction type autonomous delivery vehicles so that’s not that new. What is, they booted the middleman, be it DoorDash, Uber Eats, etc. and went straight to the large food chain to see if they couldn’t better serve this customer by providing a consistent, affordable alternative that will still get the food to the customer in time and in a state that’s as close to ideal as possible. The first pilot will run in Austin and these delivery robots use sidewalks and bike lanes and are governed at 15MPH so no need for expensive sensors and LiDAR to point it to where to go. Interesting concept. TRENDING ON SOCIAL MEDIA - He Xiaopeng poking at the legacies with his take on Apple CarPlay. He alluded to the fact that smart EV manufacturers would have a better solution than what most legacies have on offer now or in the future. He’d be right. I already know that V2.0 of Apple CarPlay is already better than what many automakers have out there, and I haven’t even read the fine print on the system. Let’s face it, some OEMs have already proven that they’re really going to suck at SW dev. That’s not going to change in the short-term. It’s only going to create more pressure since the market is moving faster, not slower. So if you’re a legacy, what to do? From the looks of that list of OEMs Apple has signed up so far, a lot of them decided to ‘join’ Apple. Knowing that they couldn’t beat them. - The Jeep/GAC JV made 2 cars in the last three months. Their output for January: 785, February: 35 Total for 2022: 822. WOW! Tavares needs some attention on this STAT! INTRODUCING - Lynk & Co E-Motive hybrid. A futuristic look at the direction the brand that’s a JV between Geely and Volvo is taking. First, it’s a hybrid so perhaps Geely is moving the Zeekr brand to premium EV, Geometry to mass market EV and Lynk & Co as the hybrid brand so it doesn’t directly compete with Zeekr? It’s a bit generic. They seemed to have frankenstein’d together features already seen on other vehicles and concepts cars with the topper being the not very practical butterfly doors. Again, this seems more design direction than an actual product but let’s see what shakes out in the next 24 months with them. - Qiantu, the company that brought us the $100K K50 two-door coupe that no one bought launches the K20, a 2 door hatchback with a price tag of $13K. This little two door, two seat could be a ton of fun to drive. If/when it gets to production, we’ll have to take it for a spin. A reminder that parent of Qiantu, CH-Auto will be going public in the US later this year via SPAC so look out for more details on that over the next few months. BY THE NUMBERS - 79%. That stat was thrown up on Apple’s WWDC keynote yesterday and it represents the percentage of people that will not consider a car unless it has Apple CarPlay. Seems optimistic but…



- 9. That’s how many satellites that Geely sent into (lower orbit) space to support its autonomous vehicle ambitions. They plan to have 63 by 2025 & 240 total in the mid-future. If every automaker and tech company plans to do this, low orbit is going to be a pretty crowded place. —— 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 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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