More Updates from Tech Maven Fritz Maffry
Here’s another installment on the tech sector from my colleague Fritz Maffry. – ed Amazon expounds upon their intentions with electric and autonomous transportation
Amazon is making a widespread investment portfolio move with intentions of being a force in every segment. Usually tight-lipped, they are starting to clarify some of their plans. Most obviously, they seem to be to not be boxed out by Tesla who is driving innovation faster than their competitors understand. It’s interesting that Microsoft is investing alongside Tesla on AI. It looks like some fault lines are clarifying.
Tesla is a breakout force now
The Model 3 is the car of the year in Europe. It outsold all of the other electrics in the US combined, and won (again) safest car by Consumer Reports. It’s now cheaper to own (in total costs of ownership) than the Toyota Camry.
Tesla’s electric pickup truck now being projected to have greater visibility in the fourth quarter. We expect a changed sequence on some aspects of the launch plan; they seem to want to break in with the pickup and preempt others; we think they will.
China negotiation, apparent directions
Trade agreement doesn’t look like it is coming to any near resolution, and it’s beginning to affect long term capital spend on both sides of the Pacific. Both parties are establishing supply chain options. With time passing and no resolution in sight, things are gaining inertia, and no settlement should be expected.
All this has political, military, power, and economic consequences. U.S. is hitting stimulus button,the as they see early warning signals. Things like a substantial drop off in the U.S. RV market is a usual harbinger of economic winds showing a big drop.
Same for China in the auto industry on sales. China has little interest in codifying inferiority, and appears surprised that neighbors in the region don’t want to play along with its fait accompli approach. We see Japan’s cruising of warships, calls by the Philippines for the U.S. fleet to address the South China Sea situation, the protests in Hong Kong, and the challenges on so many fronts, but as usual, China steamrolls everything; resistance is futile.
The agriculture market does not expect quick repair, economic damage is starting to really show up on both sides. It would seem with time, the trade deal becomes less and less likely now. The forces of uncertainty begin to get a momentum of their own.
Super Techs remaking phone business
We have talked about the incursion of Google and Amazon into telephony. They are cutting prices and bundling; look how bundle with Amazon Prime works.
Finally the government is apparently ready to approve the T-mobile and Sprint tie up. The tech industry is going to remake competition on price and the old rationale of anti trust simply was antiquated in considering the merger.
This is just the beginning. Expect cheaper, better, faster. Tech does not want to pay by the minute for bandwidth. In fact, they won’t; so for the advanced services coming, expect them to build and control their own conduits. Space networks from Space X and Amazon are a good preview to more of what will be to come.
Profit Desert for Automotive as we described
To use the Nissan example, the business in automotive has been pretty good, but some are looking at losses. Many automakers used to robust profits are seeing the same. We do expect the alignment of risk factors to threaten both profitability and growth in the auto segment. The trade threat of autos from China has so far not been realized, because of the conflict. That would further add friction to the industry growth. We expect worse-than-expected dynamics over the next six months. Autonomous is coming, China will affect global markets, Tesla will take share in electric pickup trucks, perhaps more than people realize.
Now units are seeming to come in closer to the numbers Morgan Stanley and I projected, much less than the Detroit insular community was saying just a few months ago. This bears watching.
We think our suggestion of alignment of risks for a perfect storm for automotive is not as far-fetched as some may wish.
Electric Pickup Truck to have opening salvos soon
We have contended that the electric pickup truck is a watershed moment in the changeover of the vehicle market. Too important, big, key to profits, and now faced with innovation to not be at the top of the agenda for the market. Tesla is confirming what we said would happen with their release of its product in this segment. We don’t expect massive availability, but we think they will get it out to press advantage. Tesla does have a speed and mature systems advantage here. They will have a price/performance as well as a charging advantage too.
As the plot thickens, so do the consequences and impact. Tesla is the biggest factor in environmental improvement today and that will start to be recognized. Don’t think the oil companies and Koch Brothers are not becoming concerned, along with the utilities and the incumbent auto industry. A tiger is lose. Again, Elon is playing chess while the others play checkers.
Microsoft, Bezos, and Apple want to play too. They understand that losing in this segment puts them at a disadvantage for a slew of great developing opportunities that rely on mastery of the same ingredients. Tesla has that mastery now.
“Tesla has been planning to reveal a prototype of the pickup by the end of the year and now Musk says that they are ‘close’ to unveiling it – “maybe 2 to 3 months” away.” Based on this comment, it would place the unveiling of the Tesla pickup truck toward the end of September to the end of October.
The Middle East
Tankers being hijacked, drones shot down, threats and warnings exchanged, mines apparently going off. Defense jockeying to survey weaknesses and modes of challenge. Still not sure about how China and Russia posture for this. Israel routinely hitting Iranian targets. Iran getting better and better missiles, obviously the same for China and Russia.
No, nothing to see here now folks. It is just fine if the Koch Brothers undermine the development of intelligent options.
Where is the narrative of how we are building operating models where conflict is likely to be less? Conflict costs more than clean energy. Where is the narrative on electric vehicles for that matter in our region? We have a multitude of advantages they provide, such as environmental, self sufficiency, economic surety, healthcare, and futures track on developing mega industries that use the same building blocks from robotics to AI, to smart assistants.
Read Haaretz, South China Post, Russia Today, London Times and gauge the winds of change and dynamic pressures
Trade wars are not so easy to win after all, when you are talking about China. Bluff and badger from neocon hawks is no longer an effective approach against China, Russia, or Iran.
Way more imagination is required on mutual win-wins in all cases for there to be a reliable and believable go forward. There has to be a pivot to a new opportunity, something towards the future. Of course that usually comes back to tech as that is the engine of economic advancement, and things will be quite different when genius robots are working with us. The current teams negotiating have little grasp of that paradigm.
We live in interesting times; meanwhile the media cares more about celebrities and “outrage” of so many parties fed by their partisan media bubbles. True of Fox and true of the Dems. The echo chamber sometimes purposefully manipulated by outside parties is making us incapable of doing what FDR did. Our business leaders just want the casino to be open to play a little longer. Short term and partisan thinking together have us not at our best. China is calculating how long Trump may have in office and are leaning towards delays in negotiating to get pain built on the U.S. side. What are countries like Taiwan and South Korea to do?
Note how little these matters come up for the candidates.
Craig,
As always Fritz Maffry’s diatribes are interesting and worth reading.
His article’s certainly wide-ranging, containing a veritable cornucopia of idea’s, speculation, assertions and assumptions, all combined with some old fashioned evangelizing for his heroes.
Not a lot of reality, but even if just opinion, his contributions are still very interesting and thought provoking. Well worth reading.
One of the problems for EV pick-up trucks is the sort of people who buy pick ups’ don’t want an EV. The market for real pick-up trucks, (as opposed to those vehicles which never carry a load) is these vehicles are often required to tow or carry heavy loads.
The is not the forte for EV’s. Variations in load or adding a tow which changes wind resistance, is very hard on a BEV vehicle. the ESD is not designed for this sort of usage and rapid battery depletion can be expected. At some point the vehicle become impractical.
My LEVRR can tow a two-horse float over rough terrain, but despite my recent expensive investment in a better BMS and up-graded battery pack, when towing, battery usage almost doubles reducing the range to less than 130 klms on a cold day. This is okay in the UK where distances are relatively short, but in countries the US or Australia it would prove impractical.
My LEVRR is 8 years old and an oddity since the company who produced the vehicle has ceased to exist. Fortunately the original build quality was so good, I’ve been able to make improvements, modifications and upgrades over the years from my own resources. Along the way, I’ve gained a lot of practical insight into the requirements for this type of vehicle. this has allowed be to build a number of EV specialist trucks and buses back in Australia.
The other problem is cost. Tesla couldn’t produce a realistic pick-up in volume at anywhere near the cost of ICE vehicles. The market would be restricted to a few affluent owners wanting to make a fashion statement.
Fritz, there’s a huge difference between writing about vehicle technology and understanding the problems of producing and marketing a consumer product.
Dreaming of future wonders is great, (the world needs dreamers) but reality is a bitch! So many wonderful dreams fail and fade in the harsh sunlight of reality.
But, I admire your optimism and enthusiasm! We do indeed live in amazing and interesting times.