The Shanghai Communique – Part II

BMW, Tesla, Lordstown, GM, Samsung SDI, Fusion Fund, BYD, CATL, Connectivty Patents

May 02, 2023

The Big 5 This Week

1. Shanghai Communique II. On February 27, 1972, the US and China issued the Shanghai Communique, a joint declaration for how the two nations would get along in the future. That worked well for a while. But historians will look back on the Shanghai Auto Show in April 2023 as the moment in time when China issued the Shanghai Communique Part II.

China has a blunt message for global automakers: You are no longer needed here. Chinese brands are on the ascendancy. Global brands are in a painful slide. Nationalism is gathering momentum. As one German executive with 12 years of experience in the People’s Republic told me: “We are in the middle of a revolution. The Chinese consumer now likes Chinese brands. Western brands are dying here.” When Western brands insist that they are not done yet, it’s wishful thinking. Link

2. BMW’s Ice Cream Bust. Staffers at the BMW Mini stand at the Shanghai Auto Show told one Chinese visitor that the free mini ice cream tubs were all gone. Moments later the same visitor shot video of the staffers handing ice cream to a foreigner. Uh-oh. The offended party posted his video to Weibo, China’s Twitter. Views quickly ran up to more than 100 million. Thousands of angry comments piled in. “BMW - you really do not know how to apologize!” drew 31,000 likes. Link

3. GM’s Minor Battery Wife. What to do in the event of marital strife? One option is to find a second spouse. That is apparently what is happening as GM enters into a new $3 billion JV with Samsung, after a much-troubled early partnership with LG – Ultium Cells LLC. Link

4. Prayers for Lordstown. Shares of the Ohio-based maker of full-size electric pickup trucks fell 29% on Monday as the company appeared at risk of imminent bankruptcy. Investors doubt that Foxconn will come to Lordstown’s rescue again. Link

5. BYD Flock of Seagulls. The Seagull was the biggest story at the Shanghai show. No doubt this sub-$12,000 electric car will attract a lot of buyers in China and in developing markets. How many companies outside of China can build an EV at this price point? Correct. That would be zero. The Chinese word for Seagull – “Hi Oh” – sounds much more inviting than the English. Link

Seagulls start at $11,400 and deliver 250 miles of range.

Listen Up

Global Best-Selling Cars. Tesla has jumped into the ranks of the world’s best-selling models. But let’s not forget that most of the best-sellers in 2022 were still gasoline-powered vehicles from companies like Toyota. (Source: World of Statistics)

Corolla: 1.1M
RAV-4: 870K
Ford F-Series Trucks: 790K
Tesla Model Y: 760K
Camry: 680K

Future EVs, Batteries, Charging

Electrics

Dead Bolt. GM is putting the Bolt, its ill-fated electric car, out of its misery. Too many fires, too little allure, the final Bolt will roll off the line this year.

When your Bolt catches fire in the driveway, neighbors talk.

Batteries

CATL Condensed Battery. Can anyone on the planet build a battery that delivers twice the energy as the ones now powering Tesla Model Ys? China’s CATL says its new, condensed battery will do the job. Here’s the twist: the first application will likely be in aviation. Link

Charging

Tesla Supercharger Super Power. Tesla now operates more than 45,000 Superchargers globally. Second place? There is no second place. Other automakers continue to underestimate Tesla’s most powerful weapon. Link

Tesla is hanging a hundred on opponents.

New Developments / Milestones

Connectivity Patent Wars. SEP stands for standard essential patents. Chinese companies like Huawei are filing a lot of them related to in-car connectivity. That has Western automakers worried. Link

BYD As No. 1. BYD raced past Volkswagen to become the best-selling car brand in China in the first quarter of 2023. This is the first time VW has not been No. 1 since 1983, 4 decades ago. Link

And…Your Weekly Modicum of Wisdom

"All that was great in the past was ridiculed, condemned, suppressed, only to emerge all the more powerfully, all the more triumphantly, from the struggle.” – Nikola Tesla