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2020 In Review, Tesla Shanghai Giga Expośe, Who Will Build The Apple Car - SAI Newsletter 49
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WOW. We are closing out 2020, I hope everyone was able to balance spending time with their loved ones while staying socially distant and keeping their pods small – What a weird and for many, a really challenging year. My family started out what we thought would be a three-week visit to the US in January only to stay there for almost three months finally boarding a flight that was NOT canceled (three were) on us and getting back to Beijing 1 day before China closed its borders in late March.
Covid is still wreaking a lot of havoc globally in these winter months but there is a small but growing glimmer of light peeking through the end of the tunnel with the vaccines beginning to be administered. No one is out of the woods yet by any stretch though as infection rates continue to increase in many countries. The effects of the pandemic will be felt for years to come by economies around the world as each tries to dig itself out of the massive hole that COVID-19 threw them into..
It has been absolutely freezing here in Beijing and recently there have been small outbreaks throughout China so there’s a lot more caution from the central and local govts with testing and travel. Speaking of which, I don’t see any real progress in travel – leisure or business – until at least late in ’21. That’s not to say that some countries won’t be able to negotiate bilateral agreements to allow their citizens to travel back and forth. Further, I DO see China and perhaps other countries loosen their visa and travel restrictions towards the middle of the year but still requiring a 14-day quarantine period once travelers return which should discourage many. There is just still too much risk of spread.
For this newsletter, I’ve browsed through what I’ve written this year and am highlighting what I think were the most significant events that will drive a lot of the change/progress/evolution of the EV/mobility/AV/transportation sector in 2021 & beyond. It was tough to keep the list small so I’ve done the best I can through order of elimination (in chronological order):
Newsletter #6: With Chinese citizens mostly confined to their homes during the coronavirus outbreak, gaming, fitness, health, and enterprise collaboration apps have increased significantly in popularity.
Newsletter #7: Hillhouse Capital, at one time NIO’s third-largest shareholder, offloaded ALL its NIO shares as of the end of 2019. A pretty substantial loss of confidence in the EVStartup. (
Could this be the mother of all ‘take-backs?’)
Oh, and here were my predictions for 2020 (and self-assessed grades for each) that I wrote for the first newsletter of the year:
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This will be the year of the electric bicycle. (Grade A-)
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Its use and protection will be clearly defined but still misused. (Inconclusive)
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One World, Two internets will be clearly defined. (Inconclusive)
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Huawei will find it VERY difficult switching out American-made chips and software but will be thrown a lifeline by the US govt. (Grade C+)
Yeah, I agree I was pretty lenient on myself but in my defense, COVID-19 threw all the inconclusive into '21, well at least that's my story, and I am sticking with it! Next week, I’ll post my predictions for 2021. One HUGE omission on that list of ’20 predictions was that a pandemic was going to tear through the world and change the business, travel, cultural, and health landscape forever.
There was a pretty damning article on Tesla about the poor production and manufacturing build quality coming out of their Shanghai Gigafactory that posted this week. IF ANY part of the article is true, it will catch up to them in 2021. I’ve stated in the past that even at China speed, it was hard to believe that there weren’t some important steps missed in building the Shanghai Giga and setting up the production line for the MIC Model 3 and I stand by my statement. Could this be Tesla’s ‘chickens coming home to roost?’
I fall on the side of the people that have legitimate concerns about Tesla - Any real potential safety issues with their vehicles and/or manufacturing processes should be fully investigated and reported. Elon does himself NO favors pushing back on journos that ask tough questions – that’s their job. Finally, as a publicly-traded company that is currently the 7th most valuable in the world should, Tesla should be required to be more transparent. For those hating on Tesla for everything from their market capitalization to Elon’s tweets, you’re are missing the point.
Up till now, their customers haven’t cared about all that other stuff. With the important part of that statement being “Up till now…” I don’t see that continuing to be the case as Tesla penetrates further into the US, China & EU markets. At a certain sales volume, say >800K units globally a volume they could hit in 2022, Tesla moves more towards the ‘mainstream’ customers and farther away from early adopters who are more impressed with the tech, gadgets, and features and can overlook poor build quality. As more viable EVs enter the market going after Tesla’s customers, then quality, reliability, and affordability will force all force its way into the ‘buy or not’ equation. Poor build quality is NOT the exclusive domain of Tesla BTW, but they ARE the most valuable car company in the world so this type of scrutiny was and is still inevitable.
Oh, and I’ve been watching the Apple TV + docuseries ‘Long Way Up’ where Ewan MacGregor and his buddy Charley Boorman ride electric Harley Davidson’s from the bottom of Argentina to LA, a 13K mile bike ride! It’s been pretty entertaining and watching with my boys it’s a good way to learn more about South America, a place we’ve unfortunately we’ve not been able to visit since we live in Asia. I’ve been inspired by their trip to visit of course when borders open. It’s marketing GOLD for Harley and Rivian, who supplies two support trucks that follow Charley and Ewan throughout their journey. It really does also highlight the need for robust charging infrastructure as well if we’re to live the way we currently do now in our petrol world.
I may wait a week to send my first edition of 2021 so to all – Happy New Year. 2021 is going to be great, let’s ALL get it started on the right foot!
TESLA IN THE NEWS
- US opens the door to flying drone delivery? You bet, flying drones have been approved to fly over people and at night. Not sure when this will be commercially viable, I’d say late ’21 but symbolically this is a HUGE step.
Same with VW, Apple would never give up control (of ANY major decisions) and I know for a fact that Apple thinks they can do it better than any current automaker out there – that’s because ANY market they enter that’s what they think. The difference between them and everyone else, they can execute.
The investment costs to do it on their own just don’t make sense for them at least not YET. That’s where Magna Steyr comes in. Magna would bring expertise and experience similar to Foxconn and Magna would gladly take a back seat to Apple as long as that Apple Car was built in their facility. There’s a lot in it for Magna Steyr here from a learning standpoint. Only companies that are willing to cede control need apply to being Apple’s CM on the likely game-changing Apple Car. There was a rumor years ago about how close BMW and Apple were to shaking hands on an Apple Car but Bimmer wanted control of the project. Tim just said ‘….uh NO.’
One thing I do want to stress is that Apple DOES get how difficult creating the ‘Apple experience’ is going to be for a car, even for them. Cars are NOT phones, computers, tablets, nor headphones. First off, none of those products is likely to kill its user should it not work as planned. The orders of magnitude in complexity, risk, and cost, by entering the market have not been anything they’ve taken lightly.
Also, Apple isn’t and has never been in any hurry to be the ‘first’ at anything. Their bogey has always been to do it ‘best.’ That doesn’t change with the Apple Car. Those two analysts who said Tesla & VW are REALLY off IMHO.
TRENDING ON SOCIAL MEDIA
- Best sneakers of 2020. I need to cop some of these for myself, especially those New Balance 992s and ‘Ben and Jerry’ Nike Dunk Lows!
JUST THE NUMBERS
- Bolt, Uber’s EU rival raises $182M to continue to pivot & grow their EU business. Notable backers: Didi Chuxing, Daimler.
- AV startup WeRide raises $200M in Series B from Chinese bus maker Yutong. I visited WeRide and was pretty impressed with their tech way back in January so I am thinking among the serious competitors here in China WeRide is going to be just fine.
- 100 XPeng G3’s delivered to customers in Norway. Step #1 in their bid to be an international player in the EV space.
PRODUCT & SERVICE INTRODUCTIONS
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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
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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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