Win Win Win
On Apr. 28 2024, Tesla CEO Elon Musk made a surprise visit to Beijing landing 2 big deals: 1) Tesla’s Model Y and 3 are compliant with China’s data security requirements. 2) Tesla signed a mapping deal with Baidu to access the Chinese internet giant’s mapping and data services. Soon, Tesla can start to offer Full Self-Driving (FSD) to its customers in China too. As a result, $90B was added to Tesla’s market cap. As a reference, Mercedes’ market cap is around $82B. Will this be Tesla FSD’s Trojan war or Russian Campaign? Or, may it be a kind of both?
FSD’s Trojan War
With Tesla’s low to no growth and the cut-throat price competition of EVs, monetizing FSD is the only hope for Tesla this year. Step 1) Tesla scales FSD by one month free trial and lowering the price to $99 monthly in the U.S. in Apr. Step 2) Tesla wants to scale further to its 2nd-largest revenue generator: China. After years of “Trojan horses deployment” in China, it’s about the time to open the door for Tesla’s ecosystem.
Tesla’s “Russian Campaign”
“善動敵者，
形之，敵必從之；
予之，敵必取之。
以利動之，以卒待之。” — 孫子兵法,“Thus one who knows how to drive enemy.
Revealing the appearance to lead the enemy to follow.
Giving the bait to lure the enemy snatches it.
Driving the enemy by the interest
to wait them with a troop.”— The Art of War
Even French captured Moscow in 1812, it could not hold the land grabbed. Defeated by the coming winter, less than 3% of soldiers retreated to where they started. Gigafactory Shanghai started production in 2019. From 2020 to 2022, the global EV sales grew 43%, 109% & 55%. Tesla and China were the winners in the EV spring, summer & fall. Till 2024 when “the EV winter” comes, Tesla needs to figure something else out. Only the time can tell how may the history rhyme for Tesla FSD this time.
- From 2021 to comply with Chinese regulatory mandate, Tesla has been keeping all data collected by its Chinese fleet in Shanghai.
- In 2024 after the deals, Tesla FSD may be opening for business in China. Tesla has no choice to join this Self-Driving fight in China. Hoping, there is still time to lead and enough value to be captured .
- The next question is when Self-Driving will become a commodity. Give or take: 2030?
Making 100K Arrows In 3 Days
In The Romance of the Three Kingdoms, Kongming, a great military strategist took a challenge to make 100K arrows in 3 days. Instead of actually making them, he borrowed arrows by thatched boats from the enemy. So, how may China put more woods behind the Self-Driving arrow? How local brands may accelerate their Self-Driving development to a mass deployment to fuel a new AI superpower?
Self-Driving Arms Racing — Xaiomi Edition
Xaiomi not only aims to ship 100K cars this year, but also is actively developing their own full stack of Self-Driving. Xaiomi may catch up to join the first echelon of Self-Driving in 2024 or 5. A few more impressed data points:
- Xaiomi AI lab is 8 years old with 3,000 AI engineers.
- A team of 1,000 is working on Self-Driving, and will grow to 1,500 in 2024. Thank you, Tesla for training the local talents.
- Currently, Xaiomi has to do two solutions: Pro (Vision only) and Max (LiDAR + Vision) because China is lagging behind sustainably. But soon, Xaiomi may adapt a pure vision solution because no OEM can maintain two solutions sustainably.
- Xaiomi’s Self-Driving test fleet has 300 cars accumulating 6.2M miles so far. From Apr., it’ll be available in 10 cities. In Aug., it’ll be available China nationwide.
