Chinese Electric Cars Are Built Like Smartphones
It’s hard to explain how fast things are moving in China these days and especially in Shenzhen for the last 2 years but when I landed here 13 years ago, one of my battery suppliers for Philips phones was BYD, it was already a big name in the lithium-ion battery industry. When I visited their factory in 2008 they were just starting launching a car business unit. I thought it was cool but did not lend much attention, a few years later they got invested by Berkshire Hathaway.
Today, 100% of the public buses and taxis in SZ are electric cars made by BYD and most of my daily Didi rides (Chinese Uber) are also powered by BYD.
Charlie Munger, Warren Buffett’s business partner at Berkshire Hathaway told about Wang Chuanfu, the founder of BYD: “he’s a combination of Edison and Bill Gates”.
Here above is another example from a shop nearby my place, Xpeng is a company that was founded in 2014 and today it’s worth $38B.
This is their latest car, the P7 Wing with butterfly wings (limited edition), they are now exporting some of them to Norway and I see more and more of these cars in the streets along with Nio and many other Chinese brands. Honestly, I’d be worried if I was working in the automotive industry in the West.
Chinese OEMs are designing cars like smartphones and they are all speaking about Apple as their upcoming competitors rather than Tesla and other traditional brands.
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While I really like Musk as an innovator and visionary character, I doubt Tesla will be able to justify its massive valuation for too long ($805B!)
Top 1 & 2 car makers, VW and Toyota have both sold about 9M cars each last year while Tesla sold about half a million units.
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Musk’s goal is to sell 20M units by 2030 which would explained Tesla current valuation, Musk then explained that he also plans to license Tesla’s autopilot to other car makers and think autonomous taxis will represent a great chunk of revenue in the future.
But first of all, no Chinese OEMs will ever accept buying Tesla software as they have learned big time from the mobile OS duopoly from Android and iOS and second the regulators will be very bullish in the West to accept autonomous cars while BYD will have amazing support from local Chinese government to set it up in the Greater Bay Area and be the first in the World to launch such services.
Maybe Norway will lead the way in the West. Anyway, it’s exciting to see what’s happening in China in the early 20's.
Laurent Le Pen