【Focus】Don’t let Musk “run away”!

Translator:Xiao Hong Mao

Proofreader: Janyvo

Image credits: China Observer(Youtube)

Friends, I’m back! How was your vacation? Did you get to climb the mountain of people or watch the sea of people, truly immersed in the “People Mountain, People Sea”?

There has been a lot of interesting news lately.   The Weibo spat between Hu Xijin and Shen Yi certainly raised a few eyebrows.  Hu Xijin has been so politically correct all his life, but still got gang-bashed by his peers.  This validates a social phenomenon: in politics, with the exception of far-right, all will move gradually to the left-wing.  And even within the left-wing camp, no peace is guaranteed because the ones who are more left than you will come after you.  I will cover this topic in a separate article later on.

Friends, one thing is for sure, you need not be concerned about Hu Xijin’s feelings.  Who can be sure that these two are not in for a double act?  People like Hu and Shen are so popular in China for a reason, their superior skill set, and their inner strength is far beyond ordinary people like you and me.  Hu and Shen are masters when it comes to provoking topics to ignite emotions, spoiling the intelligence of their followers!  They knew this better than anyone, for them, patriotism is a business!

Today’s topic starts with the RMB 4 billion loans that Musk just repaid.  According to Tesla’s filing with the SEC, Musk’s company has already repaid the $614 million loan related to the cost of Shanghai Gigafactory in full, and thereby ended the relevant loan contract.  Following the termination of that contract, the unused $758 million included in the company’s debt and finance lease schedule, under the fixed asset credit facility, will no longer be available.

Generally speaking, a company repaying a loan is not a newsworthy event.  However, this loan from Tesla is a little different because the loan was due to mature in June of this year.  In other words, Tesla repaid the loan early.  Anyone who has worked in the manufacturing industry will know that if there is a surplus of capital in any enterprise, it means that the enterprise lacks favorable investment opportunities, and the scale of operation is reduced, forming a waste of capital, which leads to the rise of capital costs.  This is clearly not the case for Tesla.  According to public data, in the first quarter of this year, Tesla’s revenue in the Chinese market reached $3.043 billion, compared to $900 million in the same period last year, a significant increase of 238.1%, which accounted for 29.29% of Tesla’s revenue in the first quarter.

So, combined with the impact of Tesla’s “brake failure” incident not long ago, as well as various overt and metaphorical attacks against Tesla, the local speculation was that “Musk may leave China”.  And the communist patriotists are instantly thrilled and overjoyed with such a rumor.  They couldn’t help but running around to announce that: “Huawei stepped in, Tesla stunned out”, “with domestic electric cars’ collective launch, Tesla cannot carry on”.  What’s more?  Some even began to incite “don’t let Musk run away”, “Musk may leave, but his money, technology, and data sourced from China shall stay” …  This is just an international version of the “closing the door to beat the dog” plot.  In the end, how badly this dog, Tesla, can be beaten is yet to be seen, but one thing is certain, no more dogs would dare to come ever again.

Is it really true that “Tesla falls, domestic electric cars will take it all”?

We noticed that following the big-three new automobile forces, namely Weilai, Ideal, and Xiaopeng, more fist-pumping heroes are ready to take part in this battlefield.

  • Xiaomi announced to manufacture cars: expected to invest 10 billion yuan in the first phase and $10 billion in ten years.
  • Huawei announced that it is open to cooperate with other automobile companies to manufacture cars and sell cars.
  • It was reported on April 28, OPPO Group has also started preparing for car manufacturing projects.

In addition to technology companies such as Huawei, Xiaomi, even the real estate, TV manufacturers, and air-conditioning manufacturers coming from afar have hopped on this big wagon.  Presumably, it wouldn’t be long before the furniture companies, stove companies, and even tobacco and wine companies all usher in the car-producing era.  The afterglow of the latest “big refining chip” campaign has not yet subsided, the waves in producing electric cars have already taken a great leap forward.  To be able to witness these two unbelievable “events” taking place within such a short interval is truly astonishing.  I have not lived in vain.

As if the era of the leading domestic brand of electric cars cannot begin unless wicked capitalism is fully driven away.  Yet those who are super excited every day claiming that our country’s high-tech development is so advanced that it should lead the world, and often bring on the subject of high-speed rail, quantum computers, 5G as proof, the truth of the matter is that the vast majority of them are not in the relevant scientific research field, they are not even equipped with basic scientific literacy.  I can totally envisage that very soon, they will again proudly announce that: China’s electric cars again ranked the world’s first; Musk should regret his decision not to stay; now like Google, Samsung, he must be hiding in the corner shredding tears.

It is most interesting that they chose to ignore the fact that Musk had made all of Tesla’s patents public on June 21, 2014, that is, releasing Tesla’s 271 patents worldwide including 263 patents for inventions and 8 design patents.  And one month after that, LeEco Motors was founded.  In the following year, Weilai, Xiaopeng, and Ideal Auto were also established one after another.  You can say that today’s domestic automotive new forces have all used Tesla’s public technology as their starting point.  But prior to Tesla came to China building its gigafactory in 2018, what have these “famous” domestic companies really been working on?  Were they busy comparing whose PPT is more impressive or whose market slogan is more mind-blowing?  Cars can overtake at the bend, but they can also be easily spotted.

One may ask what is the essential difference between Musk’s Tesla and other electric cars in China?  Geely Automobile President Li Shufu shared his thoughts in his interview.

As Li Shufu said, it is not difficult to produce an engineering prototype car with the current mature technology.  The difficulty is the car’s consistency, reliability, durability, large scale, economy, sustainability, etc., which includes a complete set of architecture including chips, operating systems, network systems. The new domestic carmakers, whether in terms of technical strength or strategic vision, cannot be compared with Musk.  But when it comes to “closing the door to beat the dog”, and the means of reaping the wealth created by others, Musk is no match.

The profit margin of the automobile industry across the globe is not high, i.e.,  10% in Japan, 8% in Europe, and 5% to 8% in the United States.  Then why will electric vehicles become a new capital windfall?  That’s mainly because the automotive industry, especially the car, high investment, high taxes, high output value; and has an industry chain drive effect.  Moreover, the concept of “new energy vehicles” is most alluring to all local authorities.  It has been listed as a priority development of the pillar industry so naturally, it draws the attention of the local government and conveniently qualifies for many preferential policies.  After all, to secure a few pieces of cheap land in the process is the real catch. 

At present, “build a car that surpasses Tesla” has become an essential mission statement in many PPTs.  However, in reality, domestic electric cars are still going down the old road of cell phone assembly.  Fancy car features have increased a lot, but in terms of key electric power kinetic energy conversion system, sensors, chips …… and even seats, no one has been able to catch up with Tesla.  If merely hosting a launch event or providing a test drive demo can win the market, then today Jia Yueting will not be afraid to return to China.  In a few years, when we look back at the “great leap forward in car making” of this new century, we will discover that it is just another typical charade: crushing the foreign enterprises, enriching the domestic peers, wasting a lot of social resources, and the most is a farce in the end.

There is a saying that the golden wind has not moved, cicadas first (meaning one may not easily detect the deathtrap).  This time, Musk’s early repayment of loans, gained him “freedom to come and go” if he will.  But “will” does not necessarily mean that he will immediately execute it.  After all, China is already Musk’s second-largest market after the United States.  But once Musk has to leave China in pain, the negative impact caused will be far more outreaching than Li Ka-Shing’s exit.  Looking back at China’s development over the past forty years since the reopening of its market, it has relied heavily on foreign capital and foreign technology.  This is an indisputable fact.  And the increasing globalization also made the flow of capital and technology possible. While China is sending the “low-end manufacturing” away, its “closing the door to beat the dog” practice is clearly jeopardizing the development in its “high-end manufacturing”.   The final outcome could only be a vacant cage, with no bird left either.  China is left with a bunch of Boxer Gang members who can only brag, other than being hysterical and self-hypnotizing, they are utterly useless.  As for those remarkable statements, they shall be no more than noises to your ears.  Companies that do not intent to benefit others can never be the “winner behind the scenes”!

In conclusion, to win, we must win in a dignified manner.  Likewise, if you want to let Musk go, you should let people go with conviction and admiration.  People who are used to bandit’s logic and only use despicable means to win can never be accepted by the world and will only become the public enemy.

Don’t let the whole society pay for the absurdity of a few people again!

Original Article Link:千万 别让马斯克“跑”了! (qq.com)

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