> The only way to grab the market was to lure in the best and drive more internal competition
Post-Xi China isn't really about internal competition. More likely they're hoping to replicate Tesla's IP. (Tesla, in turn, bets it can gain more from selling in China than the IP it will lose in domestically-fabricated components.)
Thanks for being a realist. All the significant "competitors" domestically are arms of the Chinese state. Tesla's calculations have to be aware of that.
Elon has said that the key Tesla technology is the factories. The battery factory and the car factory that they are constantly evolving. That's much harder to replicate in China, mainly because those companies can operate very inefficiently thanks to State sponsorship.
Tesla doesn't seem to keep engineering of new factory processes out of china [0]. The batteries for GF3 seem to be bought from LG Chem [1]. So yeah, I don't see Tesla being that worried about their IP or something like that.
This. Tesla Model S’s are going to those who would be driving black Audi A6s anyways. There isn’t Chinese brand loyalty in the high end car market, no one thinks any BYD can substitute for a BMW, Mercedes, or Audi. Note all these are already made in China anyways.
I would almost think that the higher end of Chinese consumers, educated in other countries and working for international firms, might even prefer non-Chinese brands.
Which is also why iPhones are popular there. American plus expensive is cool. It also doesn’t hurt that they are the best phones around and Tesla 3 seems to be doing pretty well in their market position with their unique cars which stand out.
1) Is demand outpacing supply? Yes? Great, therefore...
2) The more cars we can build, the more money we make
3) The more EVs on the road, the more demand there is for Teslas.
That’s about it. That leaves them with two opportunities: A) scaling manufacturing, and B) encouraging EV adoption. That’s part of why they spend so much effort making the cars appealing, super fast, etc.
They can self sustain a virtuous cycle with just A) but if they scale manufacturing enough B) will eventually matter.
They want China to steal their IP. They also want China to help them build factories. It’s really a win-win for them.
Some of them are state-owned, but the two largest electric vehicle manufacturers in China are not. In descending order of revenue from electric vehicles (source: [1]):
* BYD (a publicly traded company, listed on the Hong Kong Stock Exchange)
* Geely (also traded on the HK Stock Exchange)
* BAIC (state-owned, sells a lot of plug-in hybrids)
* SAIC (state-owned)
* JAC motors (state-owned)
BYD and Geely's combined electric-vehicle revenue is significantly larger than that of BAIC, SAIC and JAC (combined). The electric vehicle market in China does not appear to be dominated by state-owned companies.
Instead of vague statements about everything in China being state controlled, how about some actual facts? What, concretely, does this control entail? How does it function?
State control of the massive private sector companies - de facto or de jure, either way works for the CPC - is increasingly a requirement.
Sept 23: "China Boosts Government Presence at Alibaba, Private Giants"
"The government of one of China’s top technology hubs is dispatching officials to 100 local corporations including e-commerce giant Alibaba Group Holding Ltd., the latest effort to exert greater influence over the country’s massive private sector."
“They might be checking whether the Communist party units are working effectively within the companies,” said Paul Gillis, a professor at Peking University’s Guanghua School of Management. “While China legitimized capitalism, the level of government influence was never intended to disappear. Occasionally private entrepreneurs forget about this and are reminded of it.”
You're asserting that the Chinese government uses these mechanisms to set the business plans of BYD and Geely? In other words, that BYD and Geely do not make decisions based on business considerations and the profit motive, but rather because the Chinese government orders them to make those decisions?
I'm trying to understand just how you imagine things work in China.
Quite hard, actually. There's a lot more that goes into it than people think. It's not just "slap a battery pack into the powertrain and away you go", there's a huge amount of engineering (both hardware and software) that goes into power cell load balancing, thermal management, fault detection, efficient wiring, charging safely, regenerative braking, integrating the pack itself into your frame, choosing the right components for alternators, converters, electric motors, etc.
Anyone can make an electric go-kart. Making a performance electric car that will be on the road for 150,000 miles is hard.
That’s what people have been saying about the iPhone for 12 years now. I suspect it will be several decades before we get close to tapping out the technological improvements and engineering optimisation potential in EVs. We’ve really only just got started with them seriously in the last few years. There’s also plenty of scope for further advances in the manufacturing processes. Building EVs is incredibly complex. It’s not just another electric commodity like a washing machine.
> That’s what people have been saying about the iPhone for 12 years now.
And they've been correct for the past ~six of those years? The only reason people buy iPhones today is walled garden capture and brand identity. None of the technology is superior to what Huawei or Samsung or even Motorola is selling.
The tech in iPhones is so ludicrously ahead of anything else, it's not even funny anymore.
Their CPUs are 3 years ahead at least.
They have proprietary low power, high reliability Flash memory tech.
They have unique 3D scanning face identification tech and secure ID data storage.
They have far superior battery life for the battery weight.
The camera systems are best in class, I would agree several other phones have camera tech and software that is close enough for most people, but not for everyone.
They have Samsung made screens that even Samsung can't use, some of the tech and QA process is proprietary to Apple.
Also the sensor precision and calibration is considerably better on iPhones than Android phones and highly consistent across models. There's a photo of a bunch of phones showing their magnetometers, with all the iPhones pointing in the same direction, and the Android phones pointing all over the place.
The brand new Apple A13 CPU beats e.g. the 2018 Snapdragon 855, fair enough. But benchmarks have already leaked for next years Snapdragon 865 (e.g. for the Samsung S11) that beat the A13 again. So far from "3 years ahead", they appear to be very much equal, just being launched in alternating years.
And why should they not be equal, when they are produced by the exact same manufacturer (TSMC) using the exact same 7nm process and have basically identical physical constraints on cooling, footprint and power budgets? Ain't no arguing with physics.
Their camera systems have lagged behind other maker's flagships for several years. You don't have to take my word for it; here is a quote from Austin Mann's recent review of the iPhone 11 Pro:
> Many of us iPhone photographers have watched as other phones like the Pixel and the Huawei P30 have passed us in low light performance.
I gather from his review that the iPhone 11 Pro is now on-par with the Huawei camera flagship.
When was the last time you heard of the flash memory on anyone's phone failing? I have a LG P500 from 2011 that the kids literally throw around in their toy box, that still boots and works just fine.
Modern day screens are far beyond what the human eye is capable of resolving. Pick up a $200 Motorola, and you need a strong magnifying glass to even make out the pixels.
As an end user: are the things you can do with it the same as with anothet phone? Can you take equally good photos with another brand of phone? Yes. Can you run the same AAA games? Yes. Can you run the same apps (apart from ones Apple deliberately limits to iOS)? Yes. Do you get the same network speed? Yes.
I'm not saying there aren't small differences. The secure enclave is very nice, and I understand that for audio creation it's significantly better than Android phones.
But these advantages in some niches (and disadvantages in others, like cost, storage, display size etc) are not sufficient to say that "the technology is clearly superior". It's not, it's just different.
The iphone’s hardware is commodity or worse—they give you basically no choice for form factor or functionality beyond the disk size. You buy it for the software.
The iphone has the best mobile processing chips and it's not even close. The intel modems they use are inferior to qualcomm's modems, but "commodity or worse" is a bizarre take.
Better in a very limited sense. It’s a smartphone. Nobody cares about the chips. Everyone makes the same phone: screen, battery, antenna, camera. When it dies you buy another that is mostly the same. You’re browsing the web and taking photos; why would you care about who manufactured the cpu?
Software, brand, and culture play much larger roles than a milquetoast smartphone offering. What’s this chip that customers are raving about? The only points of continually tweaking the hardware are to shorten the lifespan and remove the ability to customize and repair it with any real scale.
Post-Xi China isn't really about internal competition. More likely they're hoping to replicate Tesla's IP. (Tesla, in turn, bets it can gain more from selling in China than the IP it will lose in domestically-fabricated components.)