Musk teaches Apple to do things

But in how to cater to Chinese users, Tesla has to learn from Apple

Musk’s extraordinary remarks put Tesla and Apple in the spotlight once again in the earnings season .

In the investor question session after the release of the second quarter of fiscal 2021 earnings report, Musk mocked the large use of cobalt in Apple’s batteries and the establishment of a “walled garden” with the help of power.

One of the backgrounds that support Musk’s attack on the world’s highest market capitalization company is that Tesla has achieved profitability for eight consecutive quarters, and the total delivery of cars has exceeded 200,000 for the first time.

The financial report shows that Tesla’s revenue in the second quarter was US$12 billion, a year-on-year increase of 98%; net profit exceeded US$1 billion for the first time, reaching US$1.1 billion, a year-on-year increase of 998%.

Musk teaches Apple to do things

“Floating” Musk even said on the earnings call, “This will be the last time I will participate in the Tesla earnings call…unless there are very important things that need to be reported.”

With the help of Musk’s “walled garden” policy, Apple’s service revenue in the second quarter of fiscal 2021 reached a record US$17.5 billion, a year-on-year increase of 33%, higher than analysts’ expectations of US$16.33 billion.

As Cook’s second-largest business for Apple in recent years, service revenue has been seen as a new growth curve that offsets the risks of the iPhone’s main business. At the financial report, Cook announced that Apple had more than 700 million paid subscribers.

Like Tesla, Apple’s earnings report for the quarter set a new record. According to the report, Apple’s quarterly revenue was US$81.4 billion, a year-on-year increase of 36%, setting a record; net profit was US$21.7 billion, a year-on-year increase of 93%.

It is foreseeable that there will be more and more frictions and disputes between Apple, which is accelerating car building, and Tesla, the leader in this field.

A

When explaining the raw materials for Tesla’s batteries, Musk said, “People always mistakenly think that Tesla uses a lot of cobalt, but we actually don’t use cobalt in iron phosphate packaging and hardly use cobalt in nickel-based chemicals. .”

According to Musk, on a weighted average basis, Tesla’s use rate of cobalt is only 2%, and it is predicted that the goal of zero cobalt will be gradually achieved in the future.

After the conversation turned, Musk criticized Apple, saying that “Apple uses almost 100% cobalt in the batteries of mobile phones and laptops.”

Why is the excessive use of cobalt being criticized?

This starts with the abundance of current battery raw materials. The reason why the replacement of ternary lithium batteries by lithium iron phosphate batteries can bring about a substantial reduction in costs is due to the fact that iron ore or iron phosphate is not only abundant in reserves, but also widely distributed in the world, which is convenient for localized mining and transportation.

Compared with nickel and cobalt, the reserves are much smaller. From the perspective of industrial sustainable development, reducing the consumption of scarce resources is a general trend. Regarding the future composition of power batteries, Musk said at the financial report: “It may be two-thirds of iron, one-third of nickel, or something similar.”

Abundant resource advantages will inevitably lead to a significant cost reduction. According to data from Zhongke Hainer , the BOM cost of lithium iron phosphate batteries is about 50% lower than that of ternary lithium batteries.

Moreover, cobalt reserves are mostly concentrated in the backward and underdeveloped Africa and other places. The Guardian of the United Kingdom reported in 2019 that technology companies such as Apple and Tesla have been sued for using child labor to mine cobalt from the Democratic Republic of the Congo for allegedly violating human rights.

2%VS100% may reflect the possibility of Musk secretly mocking Apple for the above-mentioned behavior.

It’s not over yet. After a few questions, in talking about the super charging grid when the network, Tesla’s Musk first to boast super-charging facilities “Basically I think that applies to almost all vehicle manufacturers,” and then the topic of conversation again turned to Apple, said, “We are The goal is to support the emergence of sustainable energy, not to create a’walled garden’ and use it to defeat our competitors.”

Apple strictly controls the actions of third-party software developers through the App Store, which has incurred a lot of opposition in the past few years.

In March 2019, the streaming media music service platform Spotify brought Apple to court in a lawsuit, arguing that Apple’s App Store monopolisticly charged Spotify user membership fees.

According to Apple’s regulations, the App Store charges 30% of the membership subscription service for platform software (this charging mechanism was subsequently changed to 15% for the second year renewal), and does not support the transfer back to the official website subscription.

In early 2021, game manufacturer Epic Games also sued Apple for monopoly due to the excessively high commission fees of the App Store.

But opening up the overcharge network is also bringing obvious benefits to Tesla. According to the explanation of Drew Baglino, Tesla’s senior vice president of powertrain and energy engineering, increasing Tesla’s overcharge network utilization will actually reduce costs and enable Tesla to develop overcharge faster. Fill the network.

Musk teaches Apple to do things

However, another reality is that other car manufacturers are also building their own overcharge networks. Musk is also aware of this.

In order for the supercharged network to be useful to other automakers, “we need to develop the supercharged network at a faster rate than increasing car production.” Musk said.

B

The grudge between Tesla and Apple has a long history.

At the end of December last year, after the news of Apple building cars was exposed, Tesla’s stock price (as of the close of US stocks on December 21) immediately fell 6.49% on the same day, and the market value evaporated by 42.7 billion US dollars, or about 280 billion yuan.

The rumors of Apple building cars also evoked Musk’s old hatred, “In the darkest days of the Model 3 project, I tried to find Tim Cook to discuss the possibility of Apple acquiring Tesla (based on our current market value). One-tenth). He refused to attend the meeting.”

That was a period of “hell time” when the 2018 Model 3 production climbed. In an interview with the HBO program, Musk once stated that Tesla was “less than 10 weeks away from bankruptcy.”

Musk teaches Apple to do things

Apple, which refused to buy Tesla, turned around to increase the progress of self-developed cars.

In early August 2018, Apple announced that Doug Field, who had stepped down as Tesla’s senior vice president of engineering, would return to the company and join the Apple self-driving car team. report. The two had previously collaborated on the engineering design of the Mac product line.

With the retirement of Bob Mansfield, Doug Field became the new head of Apple’s car project.

Field left Apple in 2013 and joined Tesla in charge of the Model 3 project. Musk praised him as “one of the most capable engineering executives in the world.”

After Field returned to Apple, a new round of digging plans began. This year, Apple offered 1.5 times the salary to poach Tesla. According to CNBC reports, Apple directly recruited at least 46 employees from Tesla, including manufacturing, security and software engineers, and supply chain experts.

This move even caused Musk to ridicule, saying, “Apple can only recruit people we don’t want. We jokingly call Apple the’Tesla grave’. If you can’t work at Tesla, then go to Apple. I Not kidding.”

In fact, Tesla is also poaching people from Apple. According to media reports such as Forbes and Bloomberg, as of 2015, Tesla has hired more than 150 people from Apple.

C

With the inflow and outflow of personnel between the two companies, Tesla is also “stealing” Apple.

Beginning in 2018, under the leadership of Cook, Apple has vigorously expanded software service revenue, tried to build a new growth curve other than iPhone, and announced that it will no longer announce specific iPhone sales in the future.

The effect is showing. Apple’s revenue from iPhone in the quarter was controlled below 50%, service business revenue reached 17.486 billion US dollars, an increase of 33% year-on-year, and cumulative paid subscribers exceeded 700 million.

On the other side, Tesla officially tested the FSD beta 9 autopilot software in early July this year. In addition to a one-time subscription fee of $10,000, it launched a monthly subscription model of $199 per month.

The widespread popularization of autonomous driving software systems will completely mean the arrival of a new era of software-driven cars.

In the inherent business model, car sales have changed from the end of value realization to a new starting point. This is also what Musk has been telling about the future of Tesla, and it is one of the reasons why some institutions have raised Tesla’s stock price and predicted that its market value will exceed one trillion US dollars.

Musk teaches Apple to do things

Musk

Guotai Junan Securities wrote in a recent report that Tesla’s future profit model has been very certain. “Hardware prices are kept very low, basically it can be sold at cost prices, and more fees are collected through the back-end software market to achieve profitability. “

Musk said at the financial report that the current new energy vehicles are moving towards the future of fully automatic electric vehicles. As time goes by, “vehicles without fully automatic driving systems are rare.”

In China, which Musk deliberately ignored, Tesla also needs to learn from Apple.

Affected by events such as car owners’ rights protection and “brake failure” in April, Tesla’s sales in China are at a trough: April sales plummeted by 67%, and 11,671 vehicles were delivered.

After that, Tesla launched a series of efforts, including recalling imported Model 3 and domestically produced Model 3, Model Y, issuing an apology, and switching to lithium iron phosphate batteries to reduce the price of the new Model Y.

As of May, Tesla’s delivery volume rose to 21,936 vehicles, and in June, 28,138 vehicles were delivered. Although sales have begun to climb, Tesla still needs to continue to “make up lessons” in China compared to the 35,478 vehicles that set a historical record in March.

In contrast, Apple, in its latest quarterly financial report, net revenue from Greater China was US$14.762 billion, an increase of 58% year-on-year, making it the highest growth region in the world (the Americas grew by 32.7% year-on-year, and Europe was up 33.6% year-on-year).

Musk teaches Apple to do things

Cook said at the financial report that users in Greater China “have a very strong response to the iPhone 12 Pro and 12 Pro Max, so sales are very good. In terms of product portfolio, sales of wearable devices, home equipment and service businesses also hit a record. A new record for growth in the third quarter.”

One day before the financial report was released, foreign media reported that Tesla’s energy department had formed a professional team of more than 20 people to handle customer complaints on social media and review sites.

A former employee of the department revealed to the media that while solving problems raised by customers, the team will also try to get customers to delete posts.

Tesla has not yet responded to this news.

But for Tesla, which is pursuing sales, simple control and evaluation is by no means a long-term solution. On how to cater to Chinese consumers, Tesla should also learn from Apple.

 

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/musk-teaches-apple-to-do-things/
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