Mr China Goes to Europe

BYD, NIO, Celestiq, MG, Mobileye, Jeep Avenger

Oct 19, 2022

The Big 5 This Week

1. China's Charm Offensive. Chinese automakers are racing into Europe. To triumph, they must win trust on two fronts: Customers unfamiliar with their brands. And political leaders wary of China's master plans. NIO founder, William Li, has been posting fun and spontaneous-looking shots from his European tour. Link And BYD dominated the Paris Auto Show on opening day, calling itself a "high-end tech brand". Link

2. Foxconn Aims For Half. The powerhouse Taiwanese contract manufacturer sees a future in which it builds half of all EVs globally. "Foxconn is not in the business of selling its own EV brand." says Chairman Liu Young-way. When you think about the potential for low-cost, low-range EVs in developing markets, 50% of total EV production worldwide seems (a little bit) less outrageous. Link

3. Cadillac Celestiq vs. Rolls Royce Spectre. Saturday evening. Which one will you drive to the opera? The $413,000 Rolls Royce Spectre "massively badass" Super Coupe. Link. Or the gargantuan and vastly more affordable $300,000 Cadillac Celestiq? Link

4. Michigan Battery Magnet. Gretchen Whitmer might win re-election as governor of the State of Michigan this November on battery plant job creation alone. She already scored multi-billion dollar commitments from Gotion and Our Next Energy. Link Now, she is courting a future Stellantis battery investment (after losing an earlier bid to Indiana). Link

5. ProLogium. Keep an eye on this impressive Taiwanese solid state battery maker. The well-funded team is now looking at an $8 billion investment into European manufacturing facilities. This week the company partnered up with Europe's Automotive Cells Company (ACC). Link

The French political class calls his pay shocking. But Carlos Taveras makes some big calls, especially on China.

Quote of the Week: "If we push ahead with this strategy, then we don't need plants in China." Carlos Taveras, CEO, Stellantis. Link

Recommend to Read: Behold Emperor Xi. by Michael Shuman of The Atlantic. I spoke to Michael earlier this week from his perch in Beijing. He is one of a dwindling number of foreign journalists granted visas into China. "Xi's ambition might sound fantastical to Western ears - the equivalent of the new Italian. prime minister aspiring to rebuild the Roman Empire. But in China's context, it doesn't."

Future Cars & Markets

The all-electric Jeep Avenger debuted at the Paris Auto Show this week. Photo: Car and Driver

Electrics

Jeep Avenger. Smaller than the Renegade, the Avenger comes with a very good-looking cockpit. This 4X4 Jeep seems just right for European markets. Link

Xpeng's Tumble. Xpeng sales have nearly doubled so far in 2022, But sales are trending down in recent months, making investors anxious: Xpeng's share price has dropped 83% YTD. Link

BYD / India. China's leading EV maker is shipping electric vehicles to India. Manufacturing inside India will follow "in due course". Link

Batteries / Supply Chains

Big Battery Belt: More than $40 billion is being invested in new battery plants across America's midsection. Link

States include:

Arizona
California
Michigan
Ohio
Indiana
Kentucky
Tennessee
Georgia
Kansas
Texas
Nevada
North & South Carolina

Is There A Clean Energy Tipping Point? Bloomberg's Tom Randall makes a strong case for 'Yes', backed by convincing data. But I would feel more comfortable if he had woven in the mounting risks -- like fractured supply chains, higher mineral costs and war. Link

Autonomous Tech

Mobileye IPO. Intel purchased Mobileye in 2017 for $17 billion, The aim was to set an IPO valuation at $30 billion. That number has shrunk to under $16 billion. Timing is everything. Link

California AV Licenses. The number of companies licensed to test AVs on California roads has dropped from 90 (at its peak) to 46 today. Link

China's Pro AV Regulators. One of the advantages of China's one-party rule: a green light means a green light. China's top leadership wants its home-grown AV companies to be worldwide leaders. City administrators have the approval chops at the ready. Reposting this story after first reading it in Reilly Brennan's FoT weekly. Link

New Numbers / Milestones

1. Kweichow Moutai To No 1. Value dusts tech. China's leading fire water liquor, Kweichow Moutai, overtook Tencent and Alibaba to become China's most valuable company last month. Wait, what? Link

2. Tesla Over VW in Deutschland. Tesla is outselling VW electrics by 6,000 units through the first 9 months of 2022. Link

3. AV Trucks Sip 10% Less. A study by UC San Diego says that autonomous trucks are 10% more efficient than those driven by human beings. This report is probably accurate but I like to check who paid for the study. Link

4. Michigan football is 7-0. Padres slew the dragon up the freeway, taking down the Dodgers in a shocker series. Does anything else out there matter? Yes, a giant asteroid could hit earth at any time delivering an instant dirt nap for all. Video