A lot of news in the EV market this week especially for Tesla, between the new refresh and price cut on Model S. Battery issues for Hyundai, and coverage on how Tesla’s Full Self Driving computers work. Check out the “Eye On The Market” below to get insight on what I’m watching in EV markets.
Leaked... Model 3 Refresh
Over last weekend I woke up to several Tweets from Omar (@WholeMarsBlog) and the Twitter community regarding Tesla's leaked refresh. A sneak peak of the new console design, a Tweet storm of debate took place on the topic. Omar points out he saw a car carrier on the opposing side of the interstate and followed it to look closer. He was able to see the refreshed model now has black trim and also a new center console design. Another component spotted was a what appears to be a redesign of the Aero hubcap. Not 100% sure on it yet, but these images definitely show us something is different. Could these all lead to a price decrease in the Model 3? See what David Lee and Omar have to say about it in this interview from last week.
Update. Early last weekend Tesla's website showed pictures of the Model 3 refresh and is available for order. We now know range has increased to 353 miles and leaked refresh is confirmed.
Key Takeaway from this? 🔑
Tesla has the ability to make several minor changes through out the build process that only diehard Tesla fans may notice.
In the grand scheme of things, Tesla's most impressive changes won't come from trim-line refreshes, but rather their manufacturing process efficiency. As time goes on the way save costs and increase quality will really be what stands out, with the greater changes/refreshes coming in the form of over air software updates.
Hyundai's EV Recall
Monday Hyundai made a statement regarding a voluntary recall that they are filing on the Hyundai Kona EV. The cause seems to be a fire hazard due to short circuit issue caused by poor manufacturing process. The supplier LG Chem Ltd, says that the faulty cells are not the cause of the fire. However LG Chem has not commented further on the matter. According to KB Investment & Securities it looks like Hyundai will be spending $522.10 million if they replace the estimated 77,000 vehicles affected.
I was looking at these last week, considering the costs concerning Hyundai's extended warranty and EV tax incentives. This looked like a great option for someone not interested in spending a lot of cash on a new EV. Hopefully Hyundai can find a solution to this issue and resolve it quickly, without that issue, this seems to be a great entry level EV.
The Brain Behind Tesla's Auto Pilot
Yes, I know, I am talking a lot about Tesla in this issue of EV Shakeout. However I think it's crucial to understand Tesla's FSD (Full Self Driving) computer. Prior to 2019 Tesla was using Nvida Pegasus with a total of 4 chips for their level 5 computer, that was until they took to building their own in house. The new computer only has 2 chips and is more efficient for AI processes, running at 2GHz, performs 36 trillion operations per second, making it 4 times advanced compared other auto manufacturer's computers. Samsung is now building these (post 2019 Tesla models) but the beauty of it is that older models can be upgraded with this new computer as well.
Understanding the brain behind FSD is important, not only because of what it can do, but because of the potential profitability strategy that can be built on the concept. Current Tesla models can be ordered with FSD as an add on, but isn't in full swing yet. As of last week Tesla announced a launch of the beta 'Full Self Driving' which will be available based on specific stipulations and not without certain restrictions. There is a lot of talk on the web about how this possibly will be a subscription service they roll out, boosting Tesla's overall profit.
👁 Eye on the Market
In the last issue I launched a spreadsheet on a few markets that I personally am keeping my eye on. Let's see the breakdown:
Why Tesla? Tesla is more than a car company. They have a streamlined and cost effective approach to constructing their own manufacturing equipment, build their own cell tech, and own the AI space in the auto industry. Based on these 3 things we are just seeing the beginning of what analysts predict to be a multi-trillion dollar company by 2030.
Why Nio? Nio is a an EV manufacture building electric cars that are affordable but yet look great. In September the company began delivering their it's five seater premium electric SUV. Analysts speculate that loss per share will decrease from $2.38 to $0.18 and a revenue increase of over 145%. I see it has a good opportunity while share prices are low.
Why VW? Although VW is also a manufacture for ICE vehicles, they recently have stepped up their game in the EV market. According to Stats VW ID.3 sales have surpassed Tesla Model 3 sales in Norway (Tesla M3 was previously, the majority of EV's in Norway). VW is building this car to be affordable and provides decent amount of range. Another thing I'm looking at is the ID.4 SUV to be built in the US in 2021, I believe we will continue to see a climb in revenue as this goes into production.
Li Auto? I am currently watching Li because it is an EV manufacturer in China. The company is younger and production of their ONE started in 2019 and by looking at previous quarters they have been consistent in producing despite COVID-19's effects on manufacturing. I unsure of where Li will go but there's a visible climb I'm keeping my eye on.
What about the suppliers? We'll save the supplier detailed breakdown for a later issue but in brief, I am studying lithium suppliers to some of the manufacturers above. My speculation is that as demand increase, so will the demand for these companies and their output. Studying these relationships can give us clues on better ways on how to and understanding of where to invest.
What I'm Reading
EV-HQ's article on Tesla's Australian price cut.
Clean Technica's article on How to convert a country from ICE to EV.
Andrew Hawkins’ article for The Verge on Lucid Motors' price drop.
A lot of coverage on Tesla today, I spent a lot of time doing more research on them last week and couldn't help but include a lot of it in today's issue. Hopefully today's issue gives you a better understanding of markets today. Thanks for reading! Stay in touch or hit me up with feedback via email or on Twitter at @tech_jdc. Have a great week!