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Tesla FSD Beta Testers, EVs Go Mainstream, VW Slow to Cut Costs - SAI Newsletter 42



I’ve been a pretty busy beaver the last few weeks and I’d like to share a couple of links, one for a short interview, the other an EV panel discussion that I was a part of.

First, I was interviewed by the National Committee on US China Relations about ways the US & China are currently cooperating on the EV sector and how they might in the future. It’s a short 7 min video that you can watch here. I was interviewed a few weeks back but it was just recently posted if you’re wondering about some of my answers being dated.

Second, I had the pleasure of being a part of the AmCham Shanghai Beijing Auto show debrief with Bill Russo and Lei Xing two people that know their stuff when it comes to the China Auto/EV/AV/mobility sectors. Unfortunately, Michael Dunne another close China EV watcher was unable to join at the last minute. Over the course of the just under two hours, went over not only the auto show but what we thought was the immediate future of the EV sector in China and how the rest of the world post–COVID may play out. You can view that panel here. For my western subscribers if this link doesn’t work I’ll send out one that will work for you all next week.

Finally, I had a great trip to Shanghai last week and a thoughtful discussion on EVs as part of the Technode Emerge tech conference. The recording has not been posted yet but this link will give you a flavor of what was discussed. Once the recording has been posted, I’ll get you the link. Like I said, a busy beaver. To those who do take the time to watch, I’d love to hear your feedback. As always, would like to know anything you disagree with and/or anything you can educate me on.

Here’s likely a pretty obvious observation but I don’t know any CEO in the world other than Elon that could get customers to purchase a service (for a lot of money!) that hasn’t been fully debugged, and the customer not only gladly pays for it but as they try it out they livestream/record it in order to post it to social media!

These ‘lucky’ initial customers are essentially Tesla’s beta testers for a service (Full Self Driving – a misleading name for the service) that if it doesn’t work properly, and there’s no indication that it would, could literally be dangerous (read: deadly) to the customers and others on the road!

Finally, I along with MANY of my fellow Americans are extremely nervous. For the folks in the US, please go vote! Whatever your political leanings are, if you are American you should do your part and participate in our democracy by voting. I, along with my American & non-American friends, will be watching the returns as they come in tomorrow AM at a bar in CBD-Beijing. There is a lot at stake to say the least.

TESLA IN THE NEWS

- Tesla raises the price of its FSD (Full Self Driving) feature. Just released and limited to a group of early customers, it’ll be opened up to all Tesla owners by the end of the year. Tesla has since raised the price of the software by $2K increasing the overall price to $10K. If you’re wondering how Tesla plans to increase revenue/vehicle this is their major first step.

- Tesla is well on their way to global domination. One region at a time. With a total global share currently of ~18%, they’ll likely hit their 500K global sales target for 2020 to close out quite an impressive year especially when COVID-19 factored in.

The share (%) will shrink in the coming years but that’s not an issue as the pie gets bigger and more NEVs come online particularly in China, the EU then the US to follow shortly thereafter. There could be some breakout products from other EV brands, but as Polestar will tell you, making EVs can be quite challenging. I don’t really see Tesla momentum subsiding anytime soon with the Model Y coming online early next year here in China. It will likely be their highest runner.

- FSD Fail in SF. The famous Lombard crooked street was too much for FSD to handle. Hilarity ensues. BTW, for those readers that aren’t from the Bay area and those that are but aren’t in the know, the REAL most crookedest street in the world is actually in Potrero Hill on Vermont street at McKinley Square. Lombard Street does have the best scenery though.

IN THE NEWS

- Mainstream media has finally acknowledged where the automotive market is headed, even if China had moved there more than 5 years ago. America’s Big Two (and a transplant) along with their German, Korean and Japanese counterparts are openly discussing their EV ambitions and collectively rolling out new EV products to the tune of 90-100 hitting US showrooms by 2030. That doesn’t include what’s planned for China. With the EU market being a pleasant surprise recently, we have the three major regions finally moving in synch, albeit on different timelines, pivoting towards EVs. This article does a terrific job of summarizing the specific dollar amounts and numbers floating around the global embrace of EVs.

- Autonomous vehicles will drive changes to traffic laws worldwide. Using Game Theory to create the new ‘rules of the road’ for autonomous vehicles. Whenever I hear someone talk about Game Theory I always think of the bar scene in A Beautiful Mind BTW.

- VW slow to put the brakes on cost. Surprise, surprise as GM and Ford recently announced CQ3’20 results that blew away analyst estimates VW’s profits fell 30%. This is reflected in VW’s share price which is down 24% this year compared with Daimler’s which is ‘only’ down 5%. The concern for profits dropping so significantly can’t be understated since their EV future needs those profits to fund it.

- XPeng wants no part of robotaxis. I guess they’re banking on those flying drones? Robotaxis will seriously have a hard time becoming a profitable business for any of the EV automakers but for those companies, especially in China where taxi fares are much cheaper than in other regions of the world. That’s not to say they wouldn’t sell a version of their own (de-contented fleet) vehicles to a robotaxi service since it would definitely give them a decent sales bump.

- Harley Davidson decides it needs to be a part of the e-bike revolution. There WILL be a market for this as long as it balances the halo effect that the Harley Davidson brand should give it’s Serial 1 brand while the marketing folks create enough separation that the Serial 1 can also carve its own niche out. I may be going out on a limb on this but there’s probably NOT a lot of overlap in customers of Harley hogs and environmentally friendly e-bikes. I think it looks pretty good, but let’s wait to see what parts of the design make it into production. It doesn’t look like it’s going to be cheap, that’s for sure.

- AutoX expanding further launching into more Chinese cities. If I am counting correctly there are quite a few pilot cities that AutoX along with its competitors have launched its robotaxis including Shanghai, Beijing, Guangzhou, Changsha, Wuhan just to name a few. As China has bested the US & EU so far in EVs, it looks like they’re jumping ahead in AVs as well. In the following weeks and months, I’ll be trying many of these services out and be reporting back so stay tuned.

- An Alibaba & Canoo mashup? There have been stranger bedfellows. Alas, they could not come to agreement on working together. Jack wanted Canoo to make Alibaba delivery vehicles but the timeline was too aggressive for Canoo.

TRENDING ON SOCIAL MEDIA

- The inaugural Roborace (Season Beta) is underway and no surprise here, one of the cars ran into a wall immediately out of the gate. Will be following this race closely, especially the Carnegie Mellon team that’s taking part. Think of this as e-sports on steroids. Without physical drivers, new form factors can be developed and gravity and g-forces can be stretched to new limits. We should expect to see improvements to these drones rather quickly. Could this be a replacement eventually for Formula 1??

- Polestar discovers that it’s really difficult to make quality EVs. Two recalls in a month means that A. They wanted to nip these issues in the bud and do it quickly B. One recall involved software, the other hardware (or components) so both design and engineering shortfalls made it into production. Could it be three strikes and you’re out? Any other challenges like this and I think consumers will begin to lose faith in the burgeoning brand.

- Consumer Reports rates GM Supercruise better than Tesla's Autopilot. But is it better than FSD? We won't know until the next head-to-head unfortunately.

- An amazing barn find of over 130 cars in Kansas, mostly Americans with the exception of one notable Italian, sold collectively for $2.5M. My favorites are the 69 Chevy Camaro convertible Indy Pacecar, the 79 Ferrari 308 GTS, and the 67 Corvette Stingray.

- Two iconic timepieces associated with racing are up on the auction block. Yep, those two.

- The controversy over Bimmer’s grill design direction reminds me of when Chris Bangle was head of design at BMW in the early 2000’s. Those grills are NOT very pretty I do have to admit. And that X8 is going to be enormous.

PRODUCT & SERVICE INTRODUCTIONS

- Harley Davidson, I mean Serial 1 introduces a concept prior to launching their first official e-bike.

- The Priority Current – Could be a good Class 3 all-arounder that gets up to 28mph and is comfortable enough to make you want to leave the car at home. There are a lot of seemingly high quality e-bikes at the sub-$2,500 price point so your best bet is to try them ALL out.

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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