Musk "flashed" for 24 hours, and FSD's entry into China has stabilized?

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2024-04-29 20:44Posted on the official account of Beijing Daily People Club

The automotive industry, which has always been lively, has recently been in turmoil again.

On the afternoon of April 28, Tesla CEO Elon Musk arrived in Beijing without any notice. According to the previously announced itinerary, the place of his visit was supposed to be India.

Coincidentally, on the same day that Musk landed in Beijing, the China Association of Automobile Manufacturers and the National Computer Network Emergency Technology Processing and Coordination Center issued the "Notice on the Testing of Four Safety Requirements for Automotive Data Processing (First Batch)", and Tesla became the only foreign-funded enterprise that met the compliance requirements.

According to Reuters, the purpose of Musk's trip is to promote the implementation of FSD (Full Self-Driving) in China.

At the moment when intelligent driving in China is dying, Tesla, a senior in the autonomous driving industry, suddenly applied to join the group chat, making the future situation of the entire industry confusing again.

Text: Wang Xiaojuan

编辑 |Yang

Operation: Potatoes

In a hurry 24 hours, what did Musk do when he came to China

At the Beijing Auto Show, which returned four years later, the bigwigs of car companies showed their talents and competed for the throne of "King of Traffic", among which Lei Jun and Zhou Hongyi earned everyone's attention on the first day.

Two days later, Musk, who suddenly arrived in Beijing, became the new focus. The story of traffic is being rewritten, and the strength of both the attacker and the defender should not be underestimated.

While everyone was expecting Musk to appear at the Beijing Auto Show, his private jet had quietly flown away from Bohai Bay. As for not participating in the Beijing Auto Show, Musk's explanation is that "I will not go to the American Auto Show either".

▲ Musk's private jet landed in Beijing. Photo / Visual China

Multiple sources have confirmed that the purpose of Musk's trip is the landing of FSD.

Coincidentally, on the same day that Musk landed in Beijing, the China Association of Automobile Manufacturers and the National Computer Network Emergency Technology Processing and Coordination Center issued the "Notice on the Testing of Four Safety Requirements for Automotive Data Processing (First Batch)", and Tesla became the only foreign-funded enterprise that met the compliance requirements.

This security inspection includes anonymization of face information outside the car, no collection of cockpit data by default, in-vehicle processing of cockpit data, and significant notification of personal information. After these requirements are passed, it will be conducive to lifting Tesla's restrictions on driving and parking in some areas. In addition, this news is also interpreted as a precursor to the full landing of Tesla's FSD in China.

However, the implementation of FSD is a long road.

A car with FSD function is like a walking camera, and data security and privacy protection are the first hurdles in the landing process. In 2021, Tesla established a data center in Shanghai to achieve localized storage of data. At the same time, a third-party authoritative organization has also been introduced to audit the company's information security management system, and it has passed the security management system certification (ISO27001).

▲ Conceptual diagram of Tesla's FSD. Photo / Tesla's official Weibo

Just after Musk left Beijing, The Paper reported that Tesla's Chinese version of FSD will use Baidu Maps as an advanced driver assistance map (Gaofu map). As soon as the news came out, Baidu's stock price plummeted, once rising by more than 6%.

On social media, He Xiaopeng, chairman of Xpeng Motors, took the lead in expressing his optimism about Tesla's FSD entry into China, and expected it to bring more positive changes and development to the entire industry.

He Xiaopeng said: "If the last 10 years are the 10 years of new energy, the new 10 years will be the 10 years of smart cars, and the vigorous development of large models in the last two years has significantly accelerated the technology and experience of high-level autonomous driving and unmanned driving." Combined with our own progress, I believe that the implementation of large models in unmanned driving will be accelerated in at least three years, and fully autonomous driving is also one of the best business scenarios for large models to land. ”

Although Musk did not appear at the Beijing Auto Show to interact with the CEOs of other car companies this time, in the fourth quarter of 2023 earnings call, Musk once said: "Chinese car companies are the most competitive in the world and will achieve great success abroad." Frankly, if trade barriers weren't erected, they would have taken out almost all the other car companies in the world. ”

There are no more cards, and Tesla is in a hurry?

With Xiaomi's official entry, the Chinese car circle witnessed a "Spring Festival Gala" at the end of March. Although Tesla did not directly "perform on stage", it still has a strong sense of presence - as a frame of reference, it appeared in Lei Jun's speech, and the PPT of the Xiaomi SU7 press conference.

However, Tesla is also not available to participate in this "war" for the time being. Tesla, which is too busy to take care of itself, will start 2024 and experience an eventful "spring": layoffs, sales "flash crash", price cuts, and new low profit margins...... It seems that everything is going in a bad direction.

On the afternoon of April 15, Musk issued an internal letter saying that he would lay off 10% of his workforce worldwide. Such large layoffs were not common in the past, and it also affected many fresh graduates who had just joined the company.

Tesla, which has always had strong sales, experienced a "flash crash" in the first quarter of this year.

According to Tesla's official data, in the first quarter, Tesla delivered a total of 386,800 vehicles worldwide, down 8.5% year-on-year and 20.2% from the fourth quarter of last year, the lowest in the past five quarters, and the first time since the third quarter of 2022 that it fell below the 400,000 mark.

▲ Tesla Model 3. Photo / Tesla's official Weibo

The situation in the Chinese market is also not optimistic. According to the wholesale volume announced by the Passenger Association, Tesla's retail sales from January to March were 39,900, 30,100, and 62,400 respectively, and the cumulative sales in the first quarter were 132,400, a year-on-year decrease of 3.6%. In March, in particular, the year-on-year decline reached 18.6%.

As a former industry leader, this figure is clearly not satisfactory. Especially in the case of latecomers chasing after each other - Xiaomi SU7 has locked orders of more than 70,000 units in less than a month after its launch.

However, Tesla soon announced countermeasures - price cuts and production cuts.

Some of Tesla's suppliers told Auto that they had received a notice of a reduction in Tesla's parts orders, and that all of their supplied parts had been reduced by about 10%.

On April 21, Tesla lowered prices for all models, including China. According to Tesla's official website in China, the starting price of its Model S/3/X/Y models has been reduced by 14,000 yuan. Among them, the starting prices of the Model 3 and Model Y have come to 231,900 yuan and 249,900 yuan, respectively.

▲ The starting price of the Tesla Model 3. Photo / Tesla's official website

After the price reduction, the smell of gunpowder in the market is stronger. The starting price of the Model 3 is only 16,000 yuan different from the price of the standard version of the Xiaomi SU7. Interestingly, a month ago, Tesla also raised the price of the new facelifted car, and now the reverse operation can be said to be a compromise on the market.

For a long time, price reduction has been Tesla's "magic weapon" to promote sales. In the past, Tesla's price cuts could bring hundreds of thousands of orders, and the effect was remarkable. Nowadays, the price war in the Chinese market is raging, and Tesla's price reduction is more like a passive compromise than an active lead, and the effect is naturally unsatisfactory.

According to Wells Fargo, in the first half of 2023, the global price of Tesla's cars fell by an average of 12%, driving sales to increase by 19% from the previous six months. In the second half of 2023, Tesla will cut prices again, but the growth rate of car deliveries has slowed to 3%. The "magic weapon" of price reduction is gradually becoming ineffective.

Looking at the financial data, the situation is no better.

According to the financial report data, in the first quarter of 2024, Tesla's revenue will be 21.301 billion US dollars, a year-on-year decrease of 9%, and its net profit will be 1.129 billion US dollars, a year-on-year decrease of 55%.

▲ Tesla factory. Photo / Tesla's official Weibo

It cannot be ignored that Tesla reacted very quickly to a series of "cold".

Especially in terms of price adjustment, Lei Jun said that he admired it very much, "The response to the market is too sensitive, and it is a bit unlike a multinational company, which generally takes 3-6 months to make a decision." ”

Including Musk's sudden visit, everyone's attention was briefly focused on Tesla.

The market also expects more from Tesla. During the earnings call, Musk further denied rumors about the suspension of research and development of cheaper models, saying that "we have updated the product line of future vehicles, and we will accelerate the launch of new models, including cheaper models, before the previously stated production date in the second half of 2025." As soon as these words came out, with a market value of $460.8 billion at the closing price of the next day, Tesla soared nearly $60 billion in one day.

It's just that according to Tesla's habitual "conviction" of skipping tickets, the official arrival of this model is still far away. At present, the only "good card" that Tesla can play in its hand seems to be FSD.

FSD enters China, ChatGPT moment in the intelligent driving industry?

Half a year ago, if someone compared Tesla's intelligent driving with Xiaopeng, they would find that the gap between the two was so large that there was no comparison. Xpeng has already opened urban NOA in first-tier cities, while Tesla only has an automatic driver assistance (AP) function.

By this year, it was clearly felt that Tesla had accelerated the pace of catching up.

At the beginning of the year, Tesla's end-to-end FSD V12 Beta was released in the United States. In March, the system dropped the beta name and began rolling out to North American users on a large scale. Many car owners who have tested the system say on the Internet that the new system is "more human-like" in decision-making.

▲ Tesla App. Photo / Tesla's official Weibo

In addition to the large-scale push, Tesla has also adjusted the price of FSD.

On April 20, Tesla's official website showed that the price of FSD in the United States dropped from $12,000 to $8,000, and the price in Canada dropped from $16,000 to $11,000. In addition, the enhanced Autopilot feature has also been removed. At the same time, Tesla also announced on social media that it would reduce the price of its FSD subscription in the United States from $199 to $99 per month.

Tesla's sales in China account for about one-third of the total sales, and the Chinese car companies that have already swept a round in the field of intelligent driving have also helped Tesla "educate" consumers in advance and pave the way for acceptance. Tesla's entry into the game at this time is obviously very cost-effective.

Regarding when FSD will land in China, Musk once responded on social media that "it may be realized soon", and even set a price of 64,000 yuan.

As for whether Tesla's FSD can really set off a "stormy wave" in the field of intelligent driving after it lands in China, it still needs time to verify.

▲ Conceptual diagram of Tesla's FSD. Photo / Tesla's official Weibo

An intelligent driving engineer working in a leading supplier told Auto that the implementation of FSD will definitely bring some challenges to domestic manufacturers, but it is difficult to be a huge revolution. Domestic manufacturers have been rolling for many years, and there may be some gaps in capabilities, but it is not epoch-making. And from the current technology, there is no such thing as Magic Box, the information is more open and transparent, it is nothing more than which one to invest more in, and the effect is better.

Tesla's FSD V12 is based on end-to-end technology, which is also the next step for domestic intelligent driving runners. According to a research report by CITIC Securities, in addition to Xpeng, Chinese companies such as Huawei and Li are actively following up on end-to-end models and are committed to promoting data collection and training computing power construction.

In addition to compliance and data storage issues, the implementation of Tesla's FSD is also facing many challenges.

China's road environment as a whole is much more complex than that of North America. In the test of Tesla's FSD in North America, it is rare to see complex road conditions such as traffic jams and on-ramps in China, and the processing capacity of the system is naturally impossible to judge.

Different consumption habits also make the landing of FSD full of fog.

According to Musk, he can sell cars for zero profit and earn a profit by relying on FSD subscriptions. In the current Chinese market, the intelligent driving system is mostly directly included in the price of the car, and the difference between models with intelligent driving functions is about 20,000 to 50,000 yuan compared with those without intelligent driving functions. In terms of subscription fees, relatively low or even none. The intelligent driving system of many models is included in the initial benefits, such as free use of a fixed number of years.

To sum up, most users in China have not yet developed the habit of paying for smart driving.

At present, Tesla's FSD in the North American market is either purchased for a one-time purchase of $8,000 or a monthly subscription of $99, and if the price in the Chinese market is 64,000 yuan, it is uncertain how many users are willing to pay for it.

What's more, in the Chinese market, car companies have rolled up intelligent driving to models of 100,000 to 150,000 yuan. Although different prices correspond to different experiences, Tesla's expected price is still too expensive for many consumers.

The article is original by each Auto, and infringement must be investigated.

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