Just three years ago, the Chinese company Xiaomi decided to build cars. It succeeded where Apple failed.
The Wall Street Journal reports A Chinese Phone Maker Did Something Apple Couldn’t: Make an EV
Xiaomi is a Chinese company known for its rice cookers, robot vacuums, air purifiers and smartphones. Now, it has pulled off what Apple, its longtime rival, couldn’t: Make an electric car and bring it to market. And it did it in three years.
In its home market, Xiaomi —pronounced SHAU-mee—is cranking out its SU7 sedan to a waiting list of buyers after its launch in late March. Since early April, the Beijing-based company said it had delivered more than 10,000 of the electric vehicles and received nearly 90,000 binding orders.
Priced between $30,000 and $42,000, the company says the SU7 can go up to 500 miles on one charge, undercutting comparable versions of the Tesla Model 3 in China by around $4,000 and outrunning it by around 200 miles per charge.
Xiaomi’s feat illuminates a new reality in the century-old automotive business: The barriers to entry for making a car have shrunk in recent years with the emergence of electric vehicles. And in this new reality, China is speeding way ahead.
To simplify development and reduce costs, Xiaomi adopted Tesla’s process of “gigacasting,” which employs large-scale, high-pressure aluminum die-casting to create the car’s frame. The process combines hundreds of manufacturing steps into one, saving on components, weight, cost and time.
Xiaomi also had to innovate. The liquid aluminum that gets injected into the die-casting machine has to be a certain variety that can withstand an extraordinary amount of pressure. Xiaomi had to come up with its own material, building an artificial-intelligence program that used a method known as deep learning to simulate how different materials would behave when placed inside the die-cast machine.
The company only seriously started looking into entering the car sector after the U.S. government blacklisted it in January 2021 for what it said were ties to China’s military, prohibiting Americans from investing in Xiaomi.
Xiaomi Profitable When?
Xiaomi loses money on cars. To turn a profit, Xiaomi would have to produce 300,000 to 400,000 of the SU7 each year, Xiaomi CEO Lei Jun told CCTV.
It’s unclear if this company succeeds at building cars. But I suspect it will.
Regardless, Xiaomi has proven a company that makes phones can make cars three years later.
What exactly does Tesla have that some Chinese company can’t do better or cheaper? Perhaps self-driving technology, but there Tesla seriously lags Waymo.
Preparation for Growth
On April 15, I noted Elon Musk Fires 10 Percent of Tesla Workforce, Prepares for “Next Phase of Growth”
Preparing for Growth
Preparing for growth by firing working is like trying to lose weight by stocking the pantry with more potato chips.
On May 6, I noted Another Round of Mass Firings at Tesla, Sales Must Be Imploding
Tesla announced yet another round of layoffs today. News came in the typical way, an email starting “Dear Employee”. It seems “Dear Ex-Employee” would be more fitting.
Tiresome Lies
Musk statements are no longer best viewed as excessive hype, but rather tiresome lies.
For four years running, Musk promised to make 50,000 electric semis. Tesla delivered a grand total of 100.
Carbon Credits
Carbon Credits notes Tesla Hits Record High Sales from Carbon Credits at $1.79B
Elon Musk’s Tesla generated a substantial $1.79 billion from carbon credit sales last year, as revealed in their Q4 2023 and annual financial report, bringing its total earnings from such credits since 2009 to nearly $9 billion.
The revenue generated from the sale of carbon credits has become a substantial source of income for the company. In fact, the credits account for a staggering 11% of Tesla’s overall gross margin for the quarter, $4,065 million, down from 25.9% seen in Q4 2022.
Despite its continued dominance in the U.S. EV market, Tesla faces growing competition, particularly from China’s BYD. The Chinese automaker recently surpassed Tesla as the world’s largest seller of EVs.
Tesla’s Lead Has Vanished
Whatever technology lead Tesla once had is now gone.
Tesla’s Full Self Driving FSD technology is essentially vaporware.
On May 14, I noted BYD Unveils the “Shark” a Plug-in Hybrid Pickup Truck Built in Mexico
The Chinese automaker BYD (Build Your Dreams) announces a 700-mile range PHEV that will be built in Mexico, this year.
Also see Biden Wants EVs so Badly That He Will Quadruple Tariffs on Them
Astute readers will immediately notice the title of this post makes no sense. It’s not supposed to. But it is exactly what President Biden is doing.
The EU is too shellshocked and disorganized to do anything. The US is fighting with tariffs and sanctions.
The Blacklisting of Xiaomi led to this result, It’s another “victory” for sanctions.
One should also try to give some attention at the quality of the cars that a phone manufacturer can offer. No wonder they can get away with it in China, though I suspect it will be significantly harder in the west:
https://youtu.be/8HpkDUWAKFM?feature=shared
While the US will increase tariffs on Chinese EVs to 100%, Canadian tariffs remain at 6%. So Canada is importing more Teslas made in China than from the US. I wonder if they will start to get BYD and Xiaomi EVs as well, like Mexico?
Meanwhile, I see that at the same time that the US is refilling the SPR (21 mb this year) and 3 mb this week, that Biden plans on releasing 1mb to lower gas prices for the holiday weekend. This is sooner than I expected. I expect much more before the election.
Tesla still trounces US and European EVs.
The only close competition is from Chinese EVs in disguise, such as the Volvo offerings which are 100% owned by Geely – a giant Chinese automaker.
Chinese companies beat Tesla, but maybe that is in part because they are willing to lose a little money upfront to capture market share.
At some point, Chinese leadership will decide it has too many automakers. The small ones will be culled. Owning market share is an existential need for Chinese automakers.
Tesla was considered a leader but is fading into legacy technology. Tesla was innovative 10 years ago but has not progressed much since. Everything seems to be focusing around stock price instead of innovation.
Apple products are made in China and if China doesn’t want Apple to make electric cars then Apple doesn’t make electric cars period. Doesn’t take a genius to understand this.
So, genius, AAPL is a listed Chinese company with its HQ in China and has to abide by Chinese law?
I said it doesn’t take a genius so I do not see myself as a genius so sarcasm is not warranted. If 95% of your product is manufactured in China then you are very vulnerable because the CCP can shut you down if they want because they are the law. It is just common sense and it has happened to other companies both Western and domestic Chinese ones. Remember what happened to Jack Ma?
You’re a specialist at reading headlines and nothing more — like many of your brethren. I suppose there was absolutely no reason for treating Jack that way. Perhaps at some point instead merely repeating what you’ve read, and relying on “common sense”, you can research a bit to uncover more facts, become an expert and have greater credibility.
Xiaomi saw how Musk made Teslas and copied them and their manufacture with some improvements. It is the classic Chinese maneuver and I don’t blame them for doing it. Technology spreads by copying what others do. They copy the methods but they do not copy other things like environmental and labor controls so they will always have the cost advantage. If short-term cost is the most important thing then we also should dismantle our environmental and labor safeguards so we can compete and I am sure the Libertarians here would agree.
Musk firing people is just clearing out the dead wood from what is still, a start up company.
Tech in the US gave workers a flawed sense of worth and this attracted a subtype of person who is pugnacious, disruptive, annoying and difficult to work with. They don’t have the start up mentality and are better suited to work at giant established corporations like Disney, GM, BofA or the Federal Government.
These types of people, not only deliver less, but they cause everyone around them to deliver less.
X/Twitter worked much better with far less employees for this reason.
You’ll note Musk said, anyone who won’t work extra hours can go find another job.
Firings at Twitter/X reflected this. Look at those engaged faces at the Space X launches. Nihilism has no place in a start up.
Go home, Elon, you’re drunk.
As former SpaceX employees have said of their time there, “It’s better to be burned out than bored”.
I understand that. In my career as a securities analyst, I would get close to burnout but thrived on the stress of it too. When I read about these Gen Xers who seem to demand an easy worklife, I can also understand that idea, but it would have been no sale with me.
long story short…
economic sanctions = establishment of non-$USD monetary/settlement system
IOW, globalization is not only over – it is evaporating.
swampUniparty policy has a perfect track record of backfiring.
anyone still operating upon 20th-century assumptions/paradigm is doomed.
the world is not “changing”… the world has ALREADY CHANGED. we are never going back to “the way things were”. one can accept this reality & adapt… or otherwise suffer & starve w/ stubborn nostalgia.
Of course it’s changed. It has always been changing and mutating. Tell me how “were” the things that you talk about? Describe the things you regret. Describe your nostalgia because each person has their own one.
This is 100% correct!
There will never be another unified youth movement like the nihilists of Grunge or rejection of the banking complex in occupy.
What you see is all it will ever be.
There is only one party now!
It’s a two headed hydra from the same body – that feeds on human chi (productivity) and burns it on zero return endeavor.
“Human energy burnt in Satans incinerator.”
A crematorium where the worst among us thrives and those footing the bill have less and less and less.
Excremento Humanos are the military, fed government, dept education, EPA, BLM, dozen + intelligence agencies, FBI, CIA, IARPA, DARPA, MIC, Intel contractors, mercenaries Etc.
Wastrels are sucking AMERICA DRY like 100,000 ticks on a Massachusetts moose.
It’s a club and I hope your not in it.
“For four years running, Musk promised to make 50,000 electric semis. Tesla delivered a grand total of 100.”
There just doesn’t seem too be much of a market for an electric semi, except Newsomland in California. They are too expensive and have limited range. A few months back, the Antelope Valley, north of L.A. parked their electric busses. L.A. bought an electric fire truck, which was promptly involved in an accident, taking it out of service. No idea what its current status is and have heard nothing of any further EV fire trucks having been purchased.
Electric semis are a non-starter until solid state and/or liquid flow fuel cells come on line. Lots of solid state hype, and fuel cells are presently below the radar.
The current liquid electrolyte lithium batteries lack the energy density needed for long ranges even in sedans outside of urban areas, let alone in heavy vehicles.
I am optimistic but cautiously so. There is nothing wrong with EVs. The show stopper is really energy density so far, and if that is solved then ICEV will disappear. Not right away, but over time
This is ENTIRELY an engineering issue, and NOTHING else.
“Xiaomi had to come up with its own material, building an artificial-intelligence program that used a method known as deep learning to simulate how different materials would behave when placed inside the die-cast machine.”
So material simulation software is labelled AI? Got it, simulation just doesn’t sell on Wall Street.
Haha. Yep. These jokers just go in circles and cycles. You want buckets of PE/SPAC money the last 5+ years, say you are doing or moving to Blockchain……
Blockchain is simply 1980s systems engineering hopped up on computers
I forgot what program I was watching a few months ago, but some warehouse manager at a Walmart distribution operation was being interviewed talking about basic inventory management technology and software that has been used and getting better for 30 years. BUT, he just kept saying it was “AI”. So of course the interviewer kept referring to the breakthrough things Walmart was doing with “AI”. Funny shit
Blockchain: a combination of peer-to-peer networking, private encryption and software containers. Now, try to sell that as a synthetic rehypothecated deal.
If you can borrow it then you can package it in myriad ways.
“Xiaomi had to come up with its own material, building an artificial-intelligence program that used a method known as deep learning to simulate how different materials would behave when placed inside the die-cast machine.”
Sure they did.
High pressure aluminum injection can only be configured by AI.
PR much?
“Our 5th generation Ai is designing its replacement Ai that is already out of date in fact Ai wrote the press release.”
Imagine global disputes are settled in war game simulations run on competitive Ai platforms whereby the losing Ai system has to self destruct?
1) apple outside IPhone is a joke. There is nothing there. Vaporware. Zero innovation in years. All they have is the leverage to borrow money and buyback their own massively inflated shares. This will end badly
2) whatever the US sanctions or says, you can bet its ALL bullshit and bet the other way. Pick any subject and test it. It’s way beyond just economic sanctions
3) whatever the US Govt accuses another of doing, it is already doing itself. Projection is key tenant of leftists and communists which the US Govt most certainly is.
4) The US govt is deep in the falling empire cycle and massively “looting the treasury”. It won’t be long now
5) when the Summer of Love 2.0 picks up soon, you will want a bug-out plan including proper defenses/armaments and sustainment plans.
Now that the tech is established, they’re easier to design and build than ICE cars. I wouldn’t be surprised to see a bunch of different companies in different countries star making them.
Was Raisi eliminated by a cyber attack from across the border ?
Automotive News Video: Will all cars be made in China?
https://www.autonews.com/video/autonews-now/automotive-news-video-will-all-cars-be-made-china
Those byd cars are exploder cars, I don’t know about these. When I was there a taxi instantly burst into flames, like a giant flash, no one escaped.
Mexico is 15% richer than China in GDP/per capita.
China is slightly richer than Argentina.
Comparing China with the USA is ridiculous. They are competitive because a chinese engineer earns less money than a fast food worker in Greece.
The communist paradise is poorer than the worst capitalist country.
Guess you don’t now the difference between nominal GDP and real GDP. Instead of a rant, why not spend a little time learning?
The STEM grads in the US are mostly working in cyber, defense and AI, not in the car industry. Those sectors employ PhDs along with community college grads. Working for TSLA was a fad. The EV innovation co cannibalized each other. China had 500, only a few left. They produce volume, but not the profit. They don’t want to die, bc the last man standing will take the world, but they die. The US consumers have to adjust to what they can afford, not what they want. If u can’t afford a $50K/$60K car go for a $30K/$40K car. If $30K is too much, curb your ego and get into a $20K.
Producing EV’s is no feather in the cap of Xiaomi, Detroit, nor Tesla. Electric cars belong in the same basket with whirled peas.
The current generation of EVs have a significant niche, and it will get better as batteries continue the cost crash with manufacturing economies of scale. I have osted a bunch of times here about the gotchas, but for people in single family houses with a 240v 30A circuit, an EV is a viable second urban commuter car to be charged overnight at home when electricity demand drops by 20%-25%.
They will get steadily more viable as battery costs decline and prices become equal to ICEVs of the same type. I equally disdain the EVangelists and the political nutcases who condemn them. This is ENTIRELY an engineering and cost issue, and NOTHING else. I own an EV, a diesel pickup, and a midsized gas SUV. They all have their pluses and minuses, and I laugh at the FUD surrounding EVs and crap against ICEVs. It’s know-nothing meaningless political bullshit.
My mantra has forever been this: They are cars, not causes.
EV the car to buy when you live on the Coast goes the mantra.
Having lived in a coastal region for my entire life, one thing to bet heavily upon is Salt.
That’s correct, there is Salt in the air carried in from that nearby Ocean.
Salt and electronics is not a good combination for longevity.
Cars in coastal communities rot out faster then inland.
There is good reason there are higher specifications for Ships in marine environments when it comes to machinery controlled by wiring.
Just another little sin of Omission by establishment academics who have little experience with Life outside that classroom. All those contact points which make EV possible are bound to corrode.
Diagnosing electrical problems whether it be a weak ground or a primary feed that fails is not such an easy task.
Difficult enough with an ICE vehicle, but at least if engine is running a person can get to a safe location.
However rewiring a Harness on an EV is going to cost a Bunch.
Apple is essentially just the iPhone (and accompanying app store) these days. The amount of revenue from tablets, iMacs etc is minuscule and the music devices (iPods) + iTunes is all but extinct. They failed at Apple TV and now have failed at making an EV.
Where exactly are they going to grow in the near future? If (when) the iPhone ever goes away they are finished.
The STEM graduate numbers alone in China will doom the US to tech inferiority, Worse, the US may be counting foreign students in its numbers. Russia and Iran are gradulating lesser numbers than the US but given their smaller populations, its very disproportionate.
Yeah, but can bioligical male students in those countries use the ladies restroom? That’s the important thing.
American corporations pay more to DEI officers than to engineers. Why bust a gut for a STEM degree when you can skate away with pretend degrees in perverts and African Studies,
Unfortunately, American kids are generally overindulged and acculturated to value popularity, fame and entertainment over things that have any real meaning. This is propagated by the entertainment industry who realized long ago that young people are fools who are parted from their money easily. I’m convinced that this is why modern media since the sixties focuses so much attention on teens and their (non) ‘problems’ in a self-reinforcing cycle. Kids would rather be a gofer to a celebrity than run a business or be an engineer- how can you correct this on a national level? Unless something really drastic (and most likely extremely unpleasant) happens I don’t think it be corrected. What a mess.
Been hearing this for 30 years. The good ones come and work in the US.
Look at the difference in economic growth between the two countries over the last 30 years. It shows
What is also interesting. Huawei is also banned from selling telecommunication gear in the US and now they make EVs too. Cisco failed to make an EV just like Apple.
It seems like all kinds of big companies in China are jumping on the EV bandwagon?
I thought you said EVs are a dead market..Tesla has made too many..no one is buying…in several posts.
He’s speaking mostly of the US and to a lesser extend Europe.
But in China its full speed ahead. Some of that’s because of the level of governmental control. Some of it’s because driving habits aren’t the same (you don’t take long family vacation drives outside cities). But a lot of it is China doesn’t have 100+ years of legacy infrastructure (gas stations, auto dealers, repair and part shops, decades of legacy vehicles etc) to wind down.
Sanctions worked to take down a helicopter. They just work too slow for Mish to really notice.
Guess they will be buying Chinese or Russian helicopters from here on out.
And another person will happily step into the void that was left by the president dying in a crash.
Still waiting for those 60+ year sanctions on Cuba to amount to anything…
Now China producing aeroplanes while on US sanction.
“Sanctions worked to take down a helicopter.”
And hence all future orders from that particular helicopter builder.