Number of registered cars in China

[chenda]

That's why Elon will spend the next two years in Washington.

That's a curiously specific number.

[Henry]

As you may or may not know, we have four year presidencies with mid-terms. The most important time period of a presidency is the first 90 days when they have a halo. That's what we are seeing now. A one term president basically has two years to get things done before the next presidential election cycle begins and the house can change.

[chenda]

I see, I didn't know that.

[Ego]

Is this not the same sentiment which Japanese and later Korean cars were first met with in the West?

Absolutely, yes, that is true. The Chinese have had great success encouraging Thailand to switch from Japanese car makers to Chinese. Here is a very good short doc by NHK about it.

https://www.youtube.com/watch?v=w7ldtHt6Mn4

The question is, will the electric car companies be able to make the leap from inexpensive, low quality cars, to Japanese quality, in a time when they are experiencing a major economic downturn? The government help that allowed them to get this far may be less generous and the internal competition will continue to be ruthless.

[Henry]

I think there are two issues/questions to address. One is scale. It's not who's the best. It's who can scale the best, and at this moment TSLA is light years ahead. This is not just manufacturing a car. It's integrating AI into the manufacturing process. The other issue is whether the automobile industry is transforming into a service business. I personally think it is. And I also think TSLA is light years ahead. TSLA penetrating the Chinese market is way more likely than China penetrating the US market. All industries end up consolidating in the end, creating a winner takes most situation. So small bets are a waste of time and money. There will never be 100 Chinese EV manufacturers scaling to broad distribution. That is not only impossible but fiscally insane. It's a matter of who do you think will prevail in the end. I think China will always be in play, the stakes are too high. It's a Cold War type of situation, that has moved from military/space to AI/manufacturing and underlying that is energy consumption. Auto travel is being transformed in how consumers consume it. Uber is just the Airbnb model applied to cars ownership. The goal for all these auto makers is FSD and Robotaxis which will actually decrease individual car ownership and therefore, energy consumption. People forget that Elon was previously a darling of the left because Hybrid/Electric was green. But in order to scale manufacturing, a highly regulatory government environment is a negative. That is why Elon is in Washington because Chinese manufacturers and the the Chinese government have a working relationship. I think this whole situation is in the beginning stages and real traction has not begun.