Strip, Not Show & Other Discoveries @ CES 2023
Foxconn, VinFast, Fisker, Mach-E, Mercedes, Denza, BYD, Qualcomm, Mobileye
The Big 5 Discoveries @ CES 2023
1. Strip, Not Show. A highly accomplished industry executive with more than 10 years of CES experience gave me a surprising tip: “I never go to the show. I see people I want to see at dinners and parties on the Strip — at the Aria, the Wynn, Palazzo, Bellagio.” Good advice. I blended both venues in 2023. For 2024, I’m going Strip only.
2. Foxconn’s Not-Secret Master Plan. Foxconn MIH president Jack Cheng and Lordstown Motors CEO Edward Hightower were in high spirits at the show. For good reason. Foxconn’s Chairman Liu Young-Way recently told his 1.2 million employees that supremacy in EV manufacturing is the top company goal. Foxconn already dominates the global ICT industry with a 45% market share. The ambition is to get to 5% of EV manufacturing by 2025 then jump from there. “I hope one day we can do Tesla cars for Tesla,” Liu said earlier. Anyone want to bet against him? Link
3. Hello Dynamic Pricing. Prices at hotels on the Strip don’t blush. A room at the Aria last week traveled from $319 on Tuesday to $643 on Wednesday to more than $1,200 on Thursday, peak day for CES. “Any workarounds?” I asked. “You can bring your average cost down if you arrive a day earlier. Our Monday rate is only $216.” said the cheerful Aria staffer.
4. $42,000 Mach-E Pack. Shuttling me from the Aria to the CES Show, one Uber driver recounted the sad story of how his Mustang Mach-E came to be totaled: “I ran over some random piece of metal on the highway. It kicked up and punctured the battery underside. Then the car told me to come to a stop right away. I had it towed to a nearby Ford dealer. One week later my insurance company informed my that replacing the battery would cost $42,000. Boy, I loved that Mach-E. But it was history.”
5. Fisker Ocean Lands. Driving the Fisker Ocean in a large parking lot across from the show, I was entranced by the car’s good looks. I also enjoyed the fun little features like a solar-panel roof, a smuggler’s drawer tucked under the seat, a rotating screen and a taco tray. CFO Geeta Gupta-Fisker told me that final EPA approvals are expected next month, meaning deliveries to American customers should begin by March. This too: Henrik promised an encore episode on Driving With Dunne in the coming weeks. Link
And A Couple Bonus CES Observations…
ADAS Showdown: Mobileye vs. Qualcomm. Two towering edifices stared at each other inside the West Hall at CES, like gunslingers at high noon. Qualcomm and Mobileye have become intense rivals in the ADAS space. Savvy Wall Street investors told me they were genuinely confused over whom to believe: Was SuperVision better than Snapdragon - or is it the other way around? And what about Nvidia? Link
TOGG from Turkey. Based on completely unscientific observations, Turkish EV startup Togg appeared to have the largest stand at the show. Sergio Rocha, who led GM’s Korea operations in its Halcyon days, is in charge. TOGG’s first two models will debut in 2024. TOGG in Turkish stands for the Turkish Automotive Joint Venture Group, an initiative that enjoys significant government backing. Link
Future EVs, Batteries, Charging
EVs
USA EV Best-Sellers. Can you name the 5 best-selling EVs and PHEVs in America in 2022? Tesla Model Y finished first with 252,000 units, the the Tesla Model 3, then (surprise) the PHEV Jeep Wrangler 4xe, the Mustang Mach-E and the Chevy Bolt EUV. (H/T to Loren McDonald, EVAdoption, who consistently delivers the most accurate picture of the US EV sales).
Denza D9 Take-Off. Denza - the 10-year old JV between Mercedes and BYD - went nowhere for years. But the D9 full-size luxury van is enjoying real momentum. What changed? BYD upped its share from 50% to 90%. And the upscale D9 breaks the Toyota Alphard monopoly. BYD is on a roll. Link
Tesla’s 10x in China. In just three years, Tesla grew its China sales 10-fold from 42,000 in 2019 to 437,000 in 2022. That wicked-fast pace is bound to cool in 2023, and I’m getting calls from investors from all time zones this week trying to figure out by how much. Deep price cuts are the worrying new normal. Link
Tesla Plant For Indonesia. Bloomberg broke a story today that Tesla will go ahead and build a plant or several plants in Indonesia. Why Indonesia? First, for access to the nickel deposits. And second, as a safety valve in case Tesla runs afoul of the PIC in the PRC. Link
Batteries
Lithium Price Direction. I will connect with Joe Lowry, Mr Lithium, this week to talk about where lithium prices are headed in the next five years. The conversation will be published on the Driving With Dunne podcast later this month. Lithium prices have come off their all time highs. But my guess is that Joe will tell me to expect lofty prices to stick around. Some even see a cartel taking shape. Link
Scale-up Hell? “US next-gen bets to leapfrog China’s battery giants are stuck in scale-up hell and survivors probably won’t reach full production until the 2030s” says Steve Levine, publisher of The Electric newsletter.
Charging
Mercedes-Benz. Mercedes will build a high quality network of fast-chargers. This make sense. You can’t expect a customer to buy a luxury vehicle and be happy refueling at Electrify America or EVGo, notoriously mediocre experiences. Link
New Ideas / Noteworthy Milestones
The Most Desirable. I met Magnus Oestberg, Chief Software Engineer at Mercedes-Benz at the Automotive News CES dinner hosted by KC Crain and Jamie Butters. Oestberg, a Swede, chuckled when I asked him whether being from Gothenberg helped him get the job.
Then I asked him a serious question: How much of a threat were Chinese premium EV brands like NIO and Xpeng to Mercedes in China, where Mercedes sells an astonishing 650,000 vehicles a year. Magnus made a compelling argument that people will always want the most desirable things, especially when it comes to cars.
Makes sense. Chinese consumers do adore the Mercedes brand. On the other hand, mounting Chinese nationalism - what they call Guo Chao - could overwhelm loyalty to the three-pointed star. Boycott campaigns against foreign brands in China are rising fast. Link
VinFast California Deliveries. Vietnam’s EV champion joined the CES show to for the second straight year. The first several hundred VF 8 models have already been delivered to American customers in California. Link
A G-Note. Can you imagine paying more than $1,000 every month to lease your next car? A whopping 15% of Americans who lease seem to be okay parting ways with a G-Note every month. Link
VinFast Comes to America
Do not miss this special episode with Madame Thuy Le debuting this Thursday on the Driving With Dunne podcast.
Guest: Madame Thuy Le, CEO, VinFast
The Driving With Dunne Podcast
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