Tesla's real challenger

Tesla's real challenger

Would have posted this on the general forum, but a spambot has apparently taken it over :-(

Saw this article on Chinese auto manufacturers, and realized these guys will be Tesla's biggest threat, not the traditional ICE car makers. I agree with the author that they are leapfrogging the established makes by jumping into EV's with both feet. Tesla probably has 2 years in Europe, maybe 3 in the US before things heat up enough to eat into market share. They probably won't have the luxury of ramp up miscues on the MY that they had on the M3/S/X. Plus with the Chinese buying up all the raw materials for lithium batteries, they might need to start partnering too. Which may not be a bad strategy, as it might help them sell cars in China. Or give them access to cash, so mos can sleep at night :-)

ebmcs03 | 24. april 2018

Tesla has a new battery technology. Maybe it doesn’t use the same raw materials.

SamO | 24. april 2018

Should have left it with the spam.

crazy canaler | 24. april 2018

I sure hope his electric vehicles are a whole lot better than his crappy Volvos! But I'm all for electric vehicle competition.

weluvm3 | 24. april 2018

I bet that one of the reasons why Tesla's Gigafactory is in Nevada is because of this:

jon | 24. april 2018

The MY should not have the problems that the M3 has, as Musk has said it will carry over much of the M3. I would be surprised if there is much difference aside from suspension and cabin. That said, I think a hatchback M3 would be exactly what I prefer.

carlk | 24. april 2018

Chinese are at best good imitators. Imitators may be able to do certain things but they could never compete with innovators in things Tesla is doing. That said I do think Tesla's future competitors will come from new companies, if that is possible to happen, then from established auto companies that carry too huge ICE bags.

mos6507 | 24. april 2018

"Imitators may be able to do certain things but they could never compete with innovators"

Never say never. Japan started out imitating, as did Korea.

LostInTx | 24. april 2018

Awh, the Chinese. Having been there 7-9 times, I adhere to "the 15-foot rule". Everything looks great until you get right up on it. At that point, the elevators have an uncomfortable sway, the bricks and drywall have discreet cracks and the steak has fat that is disturbingly yellow.

carlk also has a point. Innovation is a mindset matriculated over time; over generations. So many of my immigrant friends love America because our culture (tax issues aside) embraces creativity and innovation. The Chinese are still encumbered by their culture encouraging work to be done by rote. They let others do the heavy thinking; they'd rather keep their heads down and focus on mere survival. Rant complete..

billlake2000 | 24. april 2018

I dunno TX. Chinese youth may surprise us. mos might've got it right. Always seems a bit gard to predict the future, so might be wise to hedge your bets.

billlake2000 | 24. april 2018

Gard is hard, Bernard

carlk | 24. april 2018

LostInTx 100% agree. In an environment where it pays to copy proven technology and product you'd be a fool to take risk and innovate. It's not that Chinese are not smart. It's just the system and the culture. And to mos6507's comment when was that Japanese or Korean has reached our level of innovatoin ever?

vp09 | 24. april 2018

Hard or Gard not to agree that the future is in China. But the Chinese are not competing for EVs in the U.S. car market, are they? I mean they make what a BYD that costs $400 U.S. and has the safety rating of a bicycle? They have a domestic market that will keep them occupied for some years. And Elon is smiling-- they are helping him toward his Mission-- no?

rxlawdude | 24. april 2018

Just like I wouldn't even consider a Korean car (Hyundai and then later, Kia) the first 30 years they were in the US (not that I'd consider a Hyundai or brand that means Killed In Action), it will take at least 10 years for Chinese automakers to prove they are competent to be in the US market.

mos6507 | 24. april 2018

"when was that Japanese or Korean has reached our level of innovatoin ever?"

The Japanese took over both the auto industry and consumer electronics in the 80s. Nintendo, Sony, Toyota, Honda, all powerhouse companies.

Now Korea is taking over where Japan left off. Samsung, Kia, Hyundai, LG. Even Korean music is popular these days (K-Pop bands).

To merely shrug off other countries is American exceptionalism at its worst.

leo33 | 24. april 2018

Hate to agree with mos, but on this one point he is correct. If we become so arrogant that we believe other countries can't learn to do what we do (including innovation) and if we believe we have nothing to learn from other countries, it will guarantee our decline.

But I don't think Tesla is on the verge of bankruptcy. :-)

Silver2K | 25. april 2018

mos6507 | April 24, 2018
"when was that Japanese or Korean has reached our level of innovatoin ever?"

The Japanese took over both the auto industry and consumer electronics in the 80s. Nintendo, Sony, Toyota, Honda, all powerhouse companies.

Now Korea is taking over where Japan left off. Samsung, Kia, Hyundai, LG. Even Korean music is popular these days (K-Pop bands).

To merely shrug off other countries is American exceptionalism at its worst.


I think you're taking that statement out of context. But I don't think anyone has taken over Microsoft, Apple, Bose, infinity audio.. etc..etc.. in Japan or Korea. Auto industry is a little different, but Tesla has taken over as the car to buy.

dyefrog | 25. april 2018

Innovation has never been a strong suit in the Far East. There are rumors that in the 70's, the US Patent offices were inundated with the Japanese auto engineers. Not to say that they aren't smart enough to innovate, but I think as someone mentioned earlier, their culture is more focused on letting someone else do the heavy lifting and they will focus their resources on improvement or mass production.
The chip fab companies such as AMD and Intel do not locate their top tier labs in Japan, Korea or China just for this reason.
There was a joke a heard a few years ago that sums up the cultural thinking at the time. An American lab had developed what they felt was the smallest diameter wire ever produced. Proud of their achievement, they sent it to some of the world famous labs to gloat about their accomplishments. The Germans sent back the sample with a hole drilled through the middle, there was another country that did something else but I forget but the Japanese sent back 1,000 duplicates.

carlk | 25. april 2018

Japan's economy rose after WWII with industries like automobiles and electronics, all invented and proven by others decades earlier. I have lot of respect of Japanese people who are disciplined, hard working and detail oriented but creativity and risk taking is not their strong suit. Koreans pretty much imitated Japan a few decades later. Part of the reason they got to where they are in those areas is Americans kind of abundant those industries and moved focus to newer and better things. Great minds would not think those are challenging enough for them. Every significant new technology came out during the last half century from integrated circuits to personal computers to internet to mobile devices came from here and mostly from the Silicon Valley where creative (as crazy probably in anywhere else) people meet technology savvy money managers who are willing to take great risks.

Everywhere you go people want to copy the Silicon Valley. You may be able to copy the form but it's hard to copy the spirit. That's what LostInTx said the culture that made the difference. Elon wanted to change the world and Jobs wanted to change the way we do things. You might be able to find a bunch of young men in China want to be a Elon or Jobs but it's be hard to find one that wants to change the world or the way we do things. That cookies cutter culture just don't promote, even if it allows, that kind of "crazy technologist" spirit.

jithesh | 25. april 2018

Chinese automakers have a need due to mandates put by Chinese govt so they need to be taken seriously but I dont think its like a big threat to Tesla. There is just too much demand for cars that a company can be threatened by other companies especially when that company has a big fan following.

I think the biggest selling point for Tesla is their supercharger at least here in US. Anyone who wants to bring electric vehicles to market should not ignore the fast charging infrastructure. Making a car is not enough we need to have fast charging infrastructure also since not everyone has a home for charging and fast charging is needed for long drives. The charging infrastructure is something that either the govts should build or the companies themselves.

Finally, Tesla has Elon Musk. Period.

carlk | 25. april 2018

Using what Elon said to describe this "innovation" stuff he's doing engineering by the first principle while others are doing it by analogy. Doing it by the first principle is hard. You need to have a clear understanding of every basic aspect related or even unrelated to the product but only that could make you to rise above others who are doing things by analogy.

johnyi | 25. april 2018

Agree with mos on this one. Samsung has been out-innovating Apple on phones for years now. LG owns the high end TV market with their OLED (taking over from Japanese TV brands - when's the last time you even saw american innovation in TV's?) Heck go to any appliance store, and look who is innovating in refrigerators and washers - it's Samsung and LG, not GE or Whirlpool. America still has the lead on SW and silicon though.

carlk | 25. april 2018

Read my post above. It's because brightest minds and best VC's in the US, in particular in the Silicon Valley, likely all think TV or appliances are too boring for them to spend money and effort on. BTW I don't think post-Jobs Apple can qualify as an innovative company either.

Rocky_H | 26. april 2018

Not just phones. In the semiconductor industry of computer memory chips, all of the companies worldwide are trying to catch up to Samsung and it's almost on the verge of making "What Would Samsung Do?" bracelets.

Silver2K | 26. april 2018

Actually whirlpool is doing well. In TVs we had Vizio until it was bought out.

I use samsun notes religiously but they tend to drop junk in their phones. Their touchwz OS is also a huge memory hog. Did you guys forget the note 7 issues? Samsung TVs have more issues than any other

Silver2K | 26. april 2018

Samsung also failed with OLED and pushing QLED now

Silver2K | 26. april 2018

Also Windows phones 950xl for example was the most advanced device on the market

Silver2K | 26. april 2018

I used my Sony XBA-40 headset with a galaxy 5 if I remember correctly and it sounded horrible after level 5. I called support thinking the new phone is broken and was told to use what came with the phone, because the phone can't drive a 4ohm set. What came with the phone is a crappy 32ohm headset that worked and sounded like crap.

My iPod 4 (old touch version) drive them well.

carlk | 26. april 2018

Koreans did not invent integrated circuits. The US did. This is just another case that someone filled the void that US companies, at least innovative companies, felt too not glamorous or profitable enough to do. No one would return your call if you go to Silicon Valley money mangers asking money for a memory company now. That's so 1970. The same is true even for established companies. For example IBM pretty much invented the hard disk drive technology and (co)invented the personal computer we know today. A decade or so ago, even when it was still a significant force in those areas, it just felt those products have been commoditized and not fit it's growth model and got rid of them and sold them to Chinese and second tier US companies.

Going back to the thread subject even automobiles have been gradually commoditized in recent years. That's why Koreans and soon Chinese are able to get in and top auto companies have to sell their cars with things like "fit and finish" and few extra bells and whistles. If it's not for Tesla's new electrically propulsed computer on wheels sooner or later US companies will be totally out of this game. It's now game on with the new disruptive product. I'm pretty sure the US technology company will still have the upper hand versus those followers. No matter how good followers are they will always behind until they become innovative themselves. I don't see that happening at this point.

carlk | 26. april 2018

I just saw in the news Sharp is the first company that is announcing an 8K TV. Koreans took Japanese display market away but nothing there says that Japanese will not come to take is back. Innovation is the only barrier of entry in the tech arena. Tesla knows this too well.

teslu3 | 26. april 2018

"The chip fab companies such as AMD and Intel..."
Intel and Samsung are "Integrated Device Manufactures", major chip fabs but also do design.
Leading chip fabs are TSMC, UMC, SMIC, Global Foundries. Many more are in East Asia.
Qualcomm, Broadcom, and AMD are leading "fabless" companies that send their designs to chip fabs.

"creativity and risk taking is not their strong suit."
Lots of innovation in East Asia. Think hybrid cars: Honda and Toyota were the innovators.
Search for the book: The Prius That Shook The World
There is serious encouragement of technology in the far east while
the USA is turning back to older (polluting) technologies. | 26. april 2018

The next new "whatever" can appear from anywhere in the world. I would never count Asia or any other area out. That said, the barriers to entry into the US car market are huge.

1) Stringent US safety requirements that rarely appear in Chinese vehicles.
2) Styling requirements to satisfy the US market (most Chinese vehicles are me-too or weirdsville)
3) Chinese have extreme competition to make the lowest cost car - such that quality often suffers
4) US Dealer network makes it very costly to enter US market
5) Zero success selling any ICE cars, let alone EVs in the USA
6) A huge domestic market that sucks up all the production

Still with enough money, time and resources, someday they may overcome all these obstacles - I just don't expect it for a long time.

Iwantmy3 | 26. april 2018

Ha Ha,
Number 4) "US Dealer network makes it very costly to enter US market"
It would be ironic if this is what protects Tesla in the end!

andy.connor.e | 26. april 2018

@mos is pretty spot on.

bj | 26. april 2018

@carlk - “Chinese are at best good imitators. Imitators may be able to do certain things but they could never compete with innovators in things”

And keep believing that at your peril, the USA’s decline will be complete if the population keeps believing this hype. Mos is right for once.

Consider Huawei - now the world’s biggest and most telecommunications technology manufacturer. They have gone from virtually nothing to being bigger than Ericsson in a little over 12 years. I remember when people used to argue Huawei were just thieves, stealing the IP of everyone else and just making it cheaper with low-cost Chinese labour.

I once challenged one of these suppliers - I said “If Huawei are just copying the technology of others, how is it that their roadmap is 6 months ahead of yours?” They were struck dumb - and had no answer.

There are now just three major global telecoms companies - Huawei, Ericsson and Nokia. Lucent / Bells Labs was the last American one before it got bought out by Nokia.

I can see exactly the same thing happening with BEVs. China has seen an opportunity to dominate another industry sector with Western companies (apart from Tesla) asleep at the wheel and suffering hubris/arrogance. Make no mistake - in 10 years China could dominate transportation.

Buy you just keep on believing that innovation only occurs in the US of A if it makes you feel good.

peter.watson51 | 27. april 2018

I really agree that other countries will indeed take advantage of this burgeoning BEV market as we move forward. In my opinion, Tesla is without doubt the most innovative auto maker in the USA, just wish they had more support here. Godspeed Tesla!!!

Madatgascar | 27. april 2018

Don’t count on innovation alone. EV innovation has already got to the tipping point where it can replace ICE if someone just does it cheaper. China can and will take the blueprints for a Tesla and produce bald faced knock-offs for lower cost, eventually at quality levels that meet global standards. The Chinese government will support the early investments and they can theoretically undercut Tesla and dominate globally (though the SC network is a chicken and egg problem for any entrant). US innovators like Elon will say “mission accomplished” and move on to other pursuits. True auto innovation can essentially stop at that point for another 100 years. The market does not “demand” continuous innovation per se.

dyefrog | 27. april 2018

"China can and will take the blueprints for a Tesla and produce bald faced knock-offs for lower cost,"

Like this?

carlk | 27. april 2018

@bj I'm sure you have heard the ZTE story. It is in trouble because US placed sanction on US companies selling parts to it. The company was said to have violated the US sanction and sold parts to Iran, got caught and signed agreement to not do it again, and got caught doing it again. Without US core technology ZTE will have no product and likely will die. DOJ and FBI are now probing Huawei for violation. We'll see how it goes.

As for EV I happen to know a little about Chinese battery industry. The Japanese company (not Panasonic) that owns our company now has a battery plant in China and I've talked to people from there. Local companies can imitate to a point but are still far behind in real technology. Not saying they can not catch up but just not yet. Otherwise Chinese government would not be that interested in having Tesla to go set up a plant there so they can learn, or steal.

carlk | 27. april 2018

dyefrog That pretty much reflects what I was trying to say. When people are more interested in taking short cuts and making a fast buck than taking risk and doing the real work you should never expect the outcome to be good. At least when there is the real competition there.

dyefrog | 27. april 2018

To experience just how well the Chinese are at knock-offs, visit Canal Street in NYC sometime. As the street cops come strolling down the sidewalk, there's a mass frenzy of closing overhead doors and fold up tables. Hilarious.

Madatgascar | 27. april 2018

@dyefrog, yes, exactly like that. Faraday Future even went to the extent of setting up a California design center and Nevada factory, and naming itself after a famous historical electrical engineer. Shameless. I bet their cars will have a “Crazy Mode” too.

carlk | 27. april 2018

Madatgascar Yes even Chinese are trying to make their companies look not Chinese because they know full well what their own countrymen think. I pretty much wrote off Faraday Future from the beginning and gosh was I right about it. There were two reasons I said that. One is the name which reflects how uncreative they are for rest of things. The other is they have not even had one cent of VC money even that they bill themselves as a California company. Those VC's are very keen business people and also are willing to take great risks if they see the possible reward. If even VC's don't see that it's worth investing that says a lot of the company's business plan. Chinese money means nothing to predict success of the business.