jordanlaugeni-blog

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The Tesla of China or something different

Elon Musk and his company Tesla changed the car industry by trailblazing the production of Electric Vehicles. “The global electric vehicle market size was valued at $118,864.5 million in 2017, and is projected to reach $567,299.8 million by 2025, growing at a CAGR of 22.3% from 2018 to 2025.”

China, the world’s largest auto market, saw a huge influx of electric vehicle (EV) startups over the past 10 years. “According to Forbes, Chinese automakers churned out 680,000 all-electric cars, buses, and trucks in 2017, more than the rest of the world combined.”

In short, the future is EV and so far, China is taking advantage of it. So, what is this article all about? One specific Chinese EV company called NIO. The company has been labeled the Tesla of China. I’d like to compare the similarities and differences between the two companies and products. Lets organize this in the 4 P’s + Jordan’s other two P’s.

Product

Let’s start with exterior design. To get an idea of what the two products look like and their websites please look at the two websites here https://www.tesla.com/ and here https://www.nio.com/. What you’ll find is that the exterior design is very similar. Let’s call out the obvious when it comes to exterior design and car models Nio copied Tesla, hard! When it comes to their website look and feel the copied them too.

For the interior design it is very similar too. However, Nio added personality to its vehicle with an AI bot named Nomi. This bot can be seen in action here: https://www.youtube.com/watch?v=fhxi0BMAL0I. This addition I would say gives them a leg up on Tesla from a product standpoint just as Alexa gives a competitive advantage to Amazon.

For technical design, there is one key difference. Tesla uses charging stations while Nio uses swappable battery technology and an app to order on-demand new batteries. My thoughts, Nio learned from Tesla’s mistake which is that infrastructure can’t be changed overnight. I think in the short-run this is smart because they then can switch to charging technology after Tesla pays for the infrastructure change.

Placement

Nio is only sold in the high-end Chinese market, while Tesla is sold in the U.S., China, and around the world. This is an area where Tesla is winning and Nio is losing due to Tesla’s first mover advantage. The brand awareness of Tesla vs. Nio is far superior in the U.S. Moreover, Tesla takes a strong market share in china. Also, there is a large amount of competition in the EV industry in China vs. the U.S. The good news, Nio has some of the most prime real estate in Shangai to market their cars. Lastly, history has shown that what has been successful for combustion engines in China, usually is successful in the U.S. markets.

Price

Nio is priced at what would be equivalent to $65,000 in US while Tesla is priced at the equivalent $110,000 USD when you consider their car market pricing and proportion of budget spending on cars. This puts tesla at a more luxurious price point while Nio can squeeze some sales in the lower upper class of China.

Promotion

They have very similar promotional strategies, free energy. Nio offers free battery swaps for a year while Tesla offers free charging at any of its stations. They are both footing the bill or subsidizing the demand for Electric Vehicles to compete with combustible engines when they do this. In a sense, they are both pioneering the EV industry.

Production

I am adding production as a 5th P even though I don’t have the poetic license to do so. Anyways, how these cars are produced is a similar story to the swappable battery technology. What I mean is, Nio saw that Tesla is having a lot of trouble producing their own cars. As a result, they decided to partner with JAC a large auto manufacturing company in China to produce their vehicles. I think this was a brilliant move.

Politics

Mr. Elon musk has done a great job securing funds and grants from the government. Just recently Nevada offered $1.3 B in tax incentives to Tesla to build their battery plant there. “NIO is establishing a joint venture with a state-owned fund, Beijing E-Town International Investment and Development company (E-Town Capital), the company said during its first-quarter earnings conference call today (May 28). E-Town Capital will put 10 billion yuan ($1.45 billion) into NIO China, as the Beijing-based JV will be called, in exchange for a minority stake.” Moreover, China is starting to put a cap on the number of EV Start up permits that are issued which will give Nio protection in the Chinese market.

All said and done, Nio and Tesla are very similar. If Nio can break out of the financial distress they are in currently, they could become the Toyota to Tesla’s GM. We shall wait and see!

  https://technode.com/2019/10/09/nio-q3-delivery-promotion/

https://www.alliedmarketresearch.com/electric-vehicle-market

https://www.latimes.com/business/la-fi-hy-musk-subsidies-20150531-story.html

[jordanlaugeni-blog]

Assembly Bill 5 Please Don’t Take Away My Favorite Apps; Just a Consumer’s Perspective

What’s Assembly Bill 5? It is a bill that California Gov. Gavin Newsom signed into legislation Wednesday, September 18th, 2019 and is effective Jan 1, 2020. In short, the bill redefined the rights of independent contractors so that they can have the same state rights as employees. These rights include, state minimum wages and benefits. This would change Lyft, Uber, Door Dash, and potentially Air BnB’s business models. Uber, Lyft, and Door Dash have banned together to fight Assembly Bill 5 with $90 Million and a ballot-measure. All and all who knows how it is going to work out. All I can picture is the debate room on this one…

Just kidding, I use all these apps and have a lot to say about what will happen if we roll back time.

Round 1: Door Dash vs. Regular Delivery Guy

The thought of losing door dash makes me think....

Sure, seeing the status of your delivery is great and having all the food in a centralized location is great. But is it really that convenient? Googling sushi restaurants in Boston and logging on their website is pretty simple. Almost always, they allow you to save your card on file, place and order online, and call you when they show up. If you don’t like that option, you can just call your order for delivery which is simple too. Besides I still can’t get over that one time I looked up how many chicken wings I was supposed to receive and realized the Door Dash driver at my food! It would be a lot less likely with an employee that represents the restaurant. All you need to see below is 1 in 4 folks!

https://nypost.com/2019/07/29/more-than-1-in-4-delivery-drivers-eat-your-food-order-study/

1 point goes to assembly bill here!

Round 2: Ride Share Apps vs. Taxi’s

Ride share apps vs. Taxi Companies

I will feel more like Daenerys without her dragons if Ride sharing goes away…

Look, this just doesn’t make sense. Every Uber and Lyft driver I talk too is doing it because they love the flexibility and being their own boss, A.K.A. a subcontractor! Secondly, do you know how many people go out of their way to Uber places when they are drinking so that they don’t have to drive drunk? 34% decrease in drunk driving convictions from 2015-2017 in Georgia. 

https://www.rstreet.org/2018/11/08/the-uber-effect-on-drunk-driving/

Pretty much everyone Mr. Governor, since Uber and Lyft came out you would have to be a psycho to get behind a wheel while drinking. Lastly, shared rides must be better for the environment. If we go back to Taxi’s we will have the same highly controlled, concentrated, smelly, inefficient, and expensive Taxi transportation service. Please don’t. Here is a potential solution, change the tax laws to give the drivers breaks for their work saving lives and the earth.

1 huge point goes to Share Rides here!

Hotels vs. Air BnB

No No no no no no no no.

Okay first off, what many people don’t understand is that Hotel’s like Marriott or Hyatt typically don’t own the property they just manage it. They do a very nice job at all their hotels and I appreciate them in the market. However, for us young broke consumer’s their prices are not realistic. So, what is option 2 in the hotel industry. Low budget hotels like red roof inn, holiday inn, or Double Tree. In Boston, these will typically run you between $99-$200 a night for a 1 bed room. Meanwhile, $109 a night gets me this on Air BnB.

This one isn’t really about employees getting paid either. Yes, a lot of budget hotel chains will close if they have not already because of Air BnB. However, the employees have the transferrable skills to work at the upper end Hotel Brands too.

1 more point goes to gig economy.

 Giving the gig economy the win with 2 points and the Assembly bill 1 point.