SAI Weekly 07 - 25: Not Really FSD Launched in China, Peter Steps Down, Welfare for Elon
Was in Vegas this past weekend and gotta love that place. No other place like it on earth. Kids had never been, and my wife was running the Rock ‘n’ Roll half marathon. A few pics from the weekend – if you thought you’d never see the strip completely empty take a look at that last snap.
#1 - Racers waiting to start
#2 - Zoox robotaxis gathering data
#3 - Bananas for the finishing runners
#4 - An empty Las Vegas Strip
#5 - Dude in banana suit
Got a number of responses for my spicy take on Porsche last week so it’s good to know people are as opinionated as I am in their defense / criticism of the management there.
A follow-on update – Porsche named replacements this week for the CFO and Chief Sales Officer it forced out. Will Blume be forced to abandon the Porsche CEO role as he tries to pull the Group out of the ditch has still not been determined, but I am hearing it’s likely.
Here’s a perfect contrast to what seems to be the difference between Legacy Auto and EV startups. Peter Rawlinson is out at Lucid. I don’t want to speculate too much because the O-fficial word is that he decided to leave on his own. He’s been in that role since the start of Lucid which, back in the day was called Atieva and adds up to 12 years.
But there’s also been pressure on Lucid to get those sales numbers higher with no current clear path at doing that. They hope to deliver 20K vehicles this year. The US bought 15.5M cars last year.
The just launched Gravity, an amazing vehicle that I hope to drive very soon, is still priced at >$80K - a well-appointed Gravity closer to $100K. If that’s one among many more affordable products you have in your lineup, then OK there’s a chance to significantly grow share. But when both cars are priced at close to 6 figures it’s a rich person’s toy. Recall that it wasn’t until the Model 3 was launched before Tesla really became Tesla. And it became the Tesla of today when it got into self-driving and entering and building in the largest market in the world.
A baby Gravity is rumored for 2026, but that’s a pretty long way away. And Lucid wants to generate piles of cash by licensing IP which is a possibility since I believe their IP is significant, moreso than others anyway, but any significant growth on that side is easily 5 years out. IP revs are tied to how many of whatever products are using that IP are sold. NO ONE not named Tesla is doing that in the US.
Rivian got a white knight named VW Group. Is that what Lucid needs to do? They thought they did by aligning themselves with the Saudi PIF, but that can complicate things as well.
But lets’ get back to why I pointed this out. Blume decides he’s the one to right BOTH the Porsche AND VW Group ship. The board still believes him for now, I think he may eventually have to step down as Porsche head though soon.
Panic has set in at Porsche. We have to go back to 2017 in order to get to the last time Porsche sold less than 250K cars! As I’ve mentioned a number of times, sometimes meaningful change only happens when there is management change. Because of the tariffs, Porsche may now also have to manufacture in the US. Best guess from analysts is that Porsche may build cars alongside Audi vehicles here in the US. All that said, it seems like SOMEONE has a pretty high opinion of himself and his management capabilities and I am not referring to Peter Rawlinson.
I just booked my tickets for Austin – will be there for SXSW. Ed Kim and I are collab’ing on some programming and we’ll have one or two special guests. Details still to come, but for the readers that are in Texas and / or will be in Austin, feel free to DM me. And block out the afternoon of the 11th since that’s when our programming will be. At the Midwest House.
Tesla launches something NOT called FSD in China. More details below, but this looks like the year that intelligent driving hits that inflection point and we see tremendous growth for the next few years. Trust me folks, this is gonna happen fast. Even in the US. EU will likely lag behind on adoption when it comes to the three regions: US, EU, China.
We may even see some Southeast Asian and Middle East countries embrace L2++ before some European countries. Li Auto said they’ll be launching L3 this year. And the competition in China for superiority was dialed up in a big way by BYD a couple weeks back.
QUOTED / INTERVIEWED
Was a guest on Automotive News Pete Bigelow’s Shift, A Mobility Podcast last week. He and I unpack BYD’s God’s Eye and I try to set the record straight on what is surprisingly still a good number of bad takes out there re: China market and China EV Inc.
I take that back, the fearmongers continue to feed the beast to chase clicks. As long as they do that, I’ll continue to bring my (mostly) objective takes on what’s happened and what will happen.
Find the podcast here.
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A detailed discussion on the challenges of compliance re: Chinese connected software in vehicles driving on US roads. There seems to be still a bit of confusion about the policies the Biden administration put in place as they were walking out the White House doors when it comes to Chinese connected HW / SW.
That leaves the OEMs to figure out where they have exposure and find alternate sources before they launch MY27 products – that’s just around the corner. It’s not an impossible task but it’s something that can be fairly onerous if you rely heavily on your suppliers and don’t have a ton of visibility into your supply chains a few layers deeper.
I was interviewed by the Detroit News about this and gave my take on what needs to happen for companies to make sure they are on the right side of these policies when the time comes. Shout out to Brandon Barry, founder / CEO of Block Harbor who was also interviewed for this piece.
BIGGEST NEWS THIS WEEK
FSD-ish intelligent driving O-fficially launches in China. Let’s not call it FSD because Tesla isn’t – let’s call it FSD-superlite beta. Or just call it their ‘something is better than nothing’ intelligent driving system for China. Tesla even knows it’s not currently a match for what’s out in China from Huawei, XPeng, Li Auto, NIO and others, but their hand was forced.
This is NOT a win by Tesla. This is an acknowledgement that ‘we are getting left behind and have to launch something into the market.’ Now they can sell their Juniper by convincing buyers that this AMAZING intelligent driving system that the US already has is an OTA update away. Maybe.
Plenty of Chinese KOLs are posting their experiences on social. Below are three examples. Lots of mixed results. Still a lot of bugs and that’s to be expected. There is really no Chinese road data that the algo has been trained on so even if it’s driving ‘safely,’ it doesn’t know many of the local laws. See first video.
XPeng XNGP vs. Tesla FSD
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As a former longtime Beijing resident, hutongs are part and parcel for getting in and around city center. And going this slowly there would most assuredly be taxi drivers and others laying on that horn.
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This is a pretty popular vlogger in China in the mobility space. I saw him at CES getting many Chinese visitors wanting to take pictures with him.
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Also, for those Tesla STANs that believe this to be the first step in their domination of the Chinese intelligent driving sector, you gotta stop getting your news from that Tesla vacuum. And stop listening to those silly analysts that keep telling you to ‘Buy.’
Have these guys ever ridden in a Tesla with FSD? How can you be a dominant global AI / autonomous vehicle player if you can’t even launch your full product in the largest market in the world? What’s worse – have those analysts tried any of these other systems, you know the ones outside China before they point to Tesla FSD’s superiority?
To hammer this home. In China, they are charging folks the equivalent of $8K! On an MY that’s ~$36K.
BYD will charge customers free, yep the price is free. You better believe others will lower their price to FREE. This is how that works. Chinese folks, at least the bulk of them will not stand for being gouged to purchase a clearly inferior product. Jumping off my soapbox now.
Yeah – I am going to try to see what it’s all about when I am back in China in April / May so stay tuned for that.
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Lots of questions about Peter’s departure from Lucid. As a matter of fact, they’ve had quite a number of executives leave recently. They’ve doubled their lineup this year with the launch of the Gravity and are looking to double their deliveries to at least 20K this year, but things still seem a bit dicey, and there seems to be no more room for mistakes.
At the end of the day, offering two $75K+ vehicles may not have been the right strategy even if your sugar daddy has oil money lining their pockets. I really do like the Air and am excited to get behind the wheel of the Gravity, but wonder if Peter was pushed out or if something in his personal life (health) may have prompted this move.
Will update as I learn more. And yeah, I am on it.
CHINA EVs & MORE
Below is last week’s China EVs & More (Episode #199) video podcast:
We are back this week with our live show on Friday, 9am ET for those that want more interaction and yes – We will hit 200 episodes tomorrow so that’s a big deal.
Please join us and message me directly with any questions you may have. Otherwise, find the recorded episode as an audio podcast or as video on the China EVs & More YouTube channel.
Live on these platforms: YouTube, Linkedin and X. See you tomorrow!
BY THE NUMBERS
-$600B. That’s how much Tesla’s market cap has been reduced by since last December. It lost about 20% in just the last week. Does Elon care? When it’s that much and with his net worth tied closely to Tesla, he must. But maybe not as much as people think.
I’ve always said that Tesla is Elon but Elon isn’t just Tesla. He has SpaceX, xAI, X and other privately held companies that in total make up his wealth and power. Maybe he sees a limit to Tesla’s upside and is willing to sacrifice its value in order to build up the value of his other companies / assets?
He has to see tremendous upside in SpaceX, which has effectively privatized space exploration. On the other hand, if I knew about all the Chinese competitors I am up against on not just the intelligent driving side, but just vehicle sales, I may not want to put much effort into a smaller upside than say, 10 years ago.
This is why Telsa investors should be worried. What he’s saying (see Tesla YoY sales in EU / UK) and what he’s doing (which is NOT investing too heavily on Tesla’s new products) could put a cap on Tesla’s value.
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-15%. That’s how much staff Mercedes could gut in China due to poor sales and increasingly stiff competition in the premium segment. Oh, and not very good EVs, that’s important.
Sales in China were down 7% YoY in China. One thing is pretty safe to say broadly. The German marques are really flailing in the China market and their products aren’t resonating the way they used to. You may point to BMW doing ok, but if we peel the layers of the onion away, it took significant price cuts on some vehicles and or re-pricing products before they even launched.
They will continue to struggle, especially as the price war continues to wage on.
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+10% again. Trump said the 10% tariffs on Canadian and Mexican made goods coming into the US will beginning on March 4th along with an additional 10% on goods from China which will be increased now overall to 20%. With all these taxes on goods coming into the US, someone’s going to be paying and I don’t think it’s the shippers. This next 4 years could get tremendously expensive. See below.
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~$1.5M. That’s how much the Trump administration is considering charging Chinese built or Chinese owned ships carrying goods manufactured from China that want to call at US ports. Another tax from the Trump administration potentially, dialing up trade war even more.
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All for me, none for thee. I’d mentioned this in many past newsletters and countless interviews, but it looks like WaPo has actually done some back of the envelope calculations on the welfare that Elon and his companies have received from the US govt. Let’s try $38B on for size? And I actually mean WaPo did some pretty detailed analysis on where the actual CA / US govt money has gone to in order to prop up Tesla and his other companies at critical moments in their history.
There aren’t many Tesla’s on the road that haven’t been subsidized that’s for sure. Subsidized by the US govt but also the Chinese govt.
So think about that as he leads DOGE and decides which programs, departments and funding is waste. Foundations of his wealth were built on this so-called waste. He’s just shutting the door behind him so that no one else gets it. Well except he will continue to (likely) along with his buddies.
SOMETHING THAT MAY ONLY INTEREST ME
Getting pinched for smuggling silicon. There were a few people arrested in Singapore for trying to illegally ship Nvidia chips to China to be used by Deepseek. H/T to Bill Bishop for flagging this via his Substack (which for China watchers is a must read). This begs the question that Bill posted - If DeepSeek doesn’t need Nvidia chips why they are getting them smuggled through Singapore?
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GM rewards investors as they continue to tap folks on the shoulder to lay them off. We are moving towards $25B in share buybacks that started a few years back. Could they have used that capital for other purposes? I think so.
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The Sino Auto Insights team