Elon Musk: Always A Douche

[HVC]

Ironically quality control will probably go up.

*edit* also, knowing musk, probably his petulant screw you to unions.

[crazy canuck]

China deserves 50 Musks

[The Minsky Moment]

Contracting manufacturing to China sounds like he's trying to treat Tesla like Apple?

Wasn't Musk the guy who said he knows more about manufacturing than anyone alive? Seems a waste to not leverage that competitive edge...

Pure speculation.
But combine the high level meetings in the PRC + the Baidu deal + gutting the product teams, and it seems to follow.

Tesla is facing brutal competition in China and losing sales to far more price competitive alternatives. And those Chinese manufacturers are rapidly pushing out.  Even in the US where China EV are not yet a factor, Tesla has had to cut prices in the face of competition.  We've discussed this in the thread, but there is no conceivable way to maintain the high valuation when the core company business is capital intensive manufacturing of a product with thin margins.

The choice is between sticking it through on the manufacturing side and accepting a big re-rating of the stock price downward, or pivoting to the "AI" capability --> ???? --> Profit plan and hoping he can fill in the blanks.

[Jacob]

Yeah it sort of makes sense. It also potentially gives Chinese EV manufacturers a way to start cracking the US market, using the Tesla brand.

[Zanza]

On AI, so far, Tesla has been more risk prone, but not significantly more successful on its advanced driving assistance systems than their competitors. Whether that risk is actually smart will eventually be settled in courts over suits on the crashes their system caused.

Maybe they can actually achieve a breakthrough in their FSD, which would be quite impressive as they have less sensor hardware than e.g. Waymo or other car manufacturers. A pure software driven feature with neglible hardware would be worth something. Not sure if it is worth Tesla's market cap though if they move out of their current business.

[Zanza]

Yeah it sort of makes sense. It also potentially gives Chinese EV manufacturers a way to start cracking the US market, using the Tesla brand.

They will just build plants in Mexico and start importing from there. Are brands really important in the low price volume segment?
I feel Tesla's brand appeal is being avantgarde, early adopter, tech geek etc. Selling a random Chinese car with that brand might not work well.

[Zanza]

The Baidu deal seems irrelevant. They are selling navigation and PoI data to all of Tesla's competitors too. It's just the Google Maps of China. I could not find anything deeper than that in press announcements. Baidu has deeper cooperation with e.g. Geely, a Chinese car manufacturer. And Baidu supposedly wants to build robo taxis itself.

[Sheilbh]

The Baidu deal seems irrelevant. They are selling navigation and PoI data to all of Tesla's competitors too. It's just the Google Maps of China. I could not find anything deeper than that in press announcements. Baidu has deeper cooperation with e.g. Geeky, a Chinese car manufacturer.

I believe it's legally required to sell EVs in China to use a Chinese navication company. I think that's all - it was interpreted as a step to sell locally made Teslas in China.

Yeah it sort of makes sense. It also potentially gives Chinese EV manufacturers a way to start cracking the US market, using the Tesla brand.

I suspect the US won't really allow that those cars will be in the US or, as Zanza says, Mexico - there's a lot of signs of Chinese (and American) manufacturers moving some work to Mexico in order to get around increasing trade barriers.

Of course the question I'd hope the US is asking is possibly how Chinese companies or sites might be involved on the AI side of things. I think you have to assume it's real first to consider the risk rather than hand-waveyness.

[Zanza]

I believe it's legally required to sell EVs in China to use a Chinese navication company. I think that's all - it was interpreted as a step to sell locally made Teslas in China.

Yes. Same as all other foreign car manufacturers: you have to share knowledge with Chinese partners if you want market access. But why is that supposedly a big success? 

[Sheilbh]

They didn't have it previously - I think they also got approved under China's data protection and cybersecurity laws (and allowing data transfers from China). All necessary steps to be allowed to sell FSDs (specifically) in China. It's not regulatory approval but from what I read the market reaction was because those were seen as the major hurdles.

[Josquius]

The firing the whole charger team thing is weird. Heard today it's big sign along with some others that they're in trouble.

[HVC]

It's one of their big competitive advantages, at least in North America, not sure how widespread non tesla charging is in Europe. Speaking for canada the infrastructure sucks in general, but even saying that tesla's is still better.