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Hello everyone, this is Akito reporting from Singapore.
Tesla has always had a clear mission of accelerating the world’s transition to sustainable energy. As the US electric vehicle manufacturer celebrates its 20th anniversary, it has made significant progress towards this goal. However, even a company as successful as Tesla cannot accomplish this global shift on its own. Meeting the increasing demand for electric vehicles worldwide requires the involvement of multiple companies.
Elon Musk, Tesla’s ambitious CEO, recognizes this fact. In a 2014 interview with Nikkei, Musk acknowledged that Tesla could only do so much to promote the adoption of electric vehicles globally. The company’s role is to demonstrate the potential of electric cars to traditional automakers. Over time, many major automakers have shifted their focus towards electric vehicles, despite their initial skepticism.
As the market for electric vehicles grew, so did Tesla’s sales and global influence. However, a formidable competitor emerged in China, which is also Tesla’s primary market.
Enter BYD, a Chinese automaker that has now joined the ranks of the world’s top 10 car companies by sales, surpassing Tesla, which currently holds the 15th spot. In the first half of 2023, BYD experienced a remarkable 96% increase in global new vehicle sales, reaching 1.25 million units. This growth positioned BYD at the 10th position, surpassing renowned German brands like Mercedes-Benz and BMW.
While Tesla focuses on producing premium electric vehicles, BYD has expanded its product line to cater to both the low and high ends of the market. They offer a range of pure electric and plug-in hybrid vehicles. Moreover, BYD benefits from a large domestic market in China, although fierce competition has led to a price war in the region. BYD is also eyeing opportunities beyond China, particularly in Southeast Asia and Russia, where other automakers have withdrawn following geopolitical conflicts.
In terms of exports, BYD far outpaces Tesla, having shipped over 80,000 Chinese-made automobiles in the first half of 2023, compared to Tesla’s 180,000 units.
Regardless of which company emerges as the long-term leader, it is clear that their competition is contributing to the global transition towards sustainable transportation, a vision that Musk has always championed.
However, it’s not just the automotive industry that is experiencing competition and change. South Korea, for instance, is grappling with the rise of cheap Chinese robot waiters, which are causing concerns due to the country’s declining population and increasing competition from Chinese technology companies. South Korean restaurants are turning to server robots to address labor shortages and rising wages. However, executives are worried that government policies promoting robot adoption, regardless of their origin, are undermining the domestic robotics industry. South Korean companies are developing advanced server robots for hotels and delivery robots for buildings and apartments, but the lack of substantial subsidies from the government is hampering their progress.
In Southeast Asia, technology companies are shifting their focus from growth to profitability, as investors are demanding a clear path to financial sustainability. Grab, for example, has seen its shares rise by around 15% this year after implementing cost-cutting measures and getting closer to breaking even. On the other hand, Singapore’s Sea experienced a significant drop in share price after announcing plans to increase investments in ecommerce, which could impact its profitability. Online companies in the region face the challenge of balancing cost-cutting measures with the need to retain customers in a highly competitive market.
In China, the tech manufacturing industry is bucking its usual trend of hiring hundreds of thousands of temporary workers during the summer to handle the surge in orders from US tech companies and prepare for the year-end holiday shopping season. Hiring has been unusually weak, which can be seen as both a positive and negative for suppliers. On the one hand, they are spared the costs and complexities of mass recruitment. However, it also reflects the ongoing slump in electronics demand and the consequence of shifting supply chains out of the country. This weak hiring trend is concerning for Beijing, as the government aims to stimulate economic recovery, which has been sluggish since the post-Covid period.
In conclusion, the global technology landscape is experiencing various developments and challenges. Whether it’s the competition between Tesla and BYD in the electric vehicle market, South Korea’s concerns about Chinese robot waiters, Southeast Asia’s push for profitability, or China’s changing tech manufacturing industry, these factors are shaping the future of the tech industry on a global scale.
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*Note: #techAsia is a weekly newsletter produced by Nikkei Asia and co-ordinated by Katherine Creel in Tokyo, with input from the FT tech desk in London. To stay updated, sign up at Nikkei Asia. You can reach the editorial team at [email protected].
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