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Hello, this is Kenji in Hong Kong. As with many other tech products, electric vehicles are falling prey to price wars — with a particular twist in China (The Big Story). Sticking with China, social media discourse is getting even more tangled, the FT’s Yuan Yang explains. Another story I recommend looks at activists fighting against civil rights infringements by wearing “anti-face†paint to foil facial recognition software (Mercedes’ top 10). Finally, thanks very much to all of you who joined the #techAsia webinar yesterday and to our excellent panellists.
The Big Story
Big upheavals are roiling Asia’s electric vehicle market. A global price war is intensifying as Japanese, Chinese and European manufacturers square off and industry leader Tesla stumbles in the all-important Chinese marketplace.
Mitsubishi Motors is planning to offer an electric mini-vehicle for about $18,100 in Japan and south-east Asia, producing some of the vehicles in Thailand. Renault, a Mitsubishi partner, aims to sell an electric sport utility vehicle in Europe that will cost about $20,300 while Volkswagen intends to debut a model in 2025 for about $23,800.
Key developments: Those price points are high compared with some in China, which is by far the biggest market for electric vehicles. A Chinese automaker rolled out a $4,500 electric car last year by sticking to absolute basics. Warren Buffett-backed BYD is selling its e1 minicar for about $8,950.
But China is a turbulent market for foreign automakers, as Tesla’s experience shows. Beijing has ordered software repairs to almost 300,000 Tesla vehicles because of reports of accidentally engaging the autopilot, triggering acceleration.
Bad news for Tesla could be a fillip for local challengers. One of them, Xpeng, is seeking to capitalise with a $2bn IPO in Hong Kong.
Upshot: The bruising dynamics of the global electric vehicle market are driven mainly by battery prices, which have fallen 80 per cent between 2012 and 2020 thanks to mass production in China and Europe. This trend looks likely to continue — meaning the global price war is set to accelerate.
Mercedes’ top 10
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Exclusive: Pepper, SoftBank’s humanoid robot that was said to “understand†emotions, is no longer in production in Japan. (Nikkei Asia)
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A study by the IISS, a UK think-tank, found that China was at least a decade behind the US in terms of its strengths as a cyber power. Japan was ranked lower than China. (FT, Nikkei Asia)
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Technology dealmaking in south-east Asia is on track to hit a record this year — even without counting the GoTo merger and Grab’s Spac. (FT)
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Samsung’s carbon emissions are still rising despite the South-Korean conglomerate’s full-throated sustainability claims. (FT)
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A decision by Panasonic of Japan to sell its entire stake in Tesla marked a dramatic shift in the relationship between longstanding partners. (FT)
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Toyota Motor president Akio Toyoda has invested $45.3m of his own money into building a smart city dominated by self-driving vehicles. (Nikkei Asia)
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Japan has set up a police unit to tackle cybercrimes, reflecting alarm over incidents such as the ransomware attack on a US pipeline this year. (Nikkei Asia)
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The EU will form a Joint Cyber Unit to fortify defences against attacks from Russia, China and elsewhere. (Nikkei Asia)
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The FT’s Yuan Yang delves into the spectacularly toxic world of social media pile-ons in China. (FT)
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“We’re living in a Terminator sci-fi world,†said one US activist perfecting the craft of anti-surveillance, in a terrific piece in the FT Magazine by Hannah Murphy. (FT)
Our take
A series of flotation flops by Chinese companies is putting the spotlight on Didi Chuxing’s US share debut this week. But the ride-hailing app’s blockbuster IPO in New York has avoided a parlous fate. Didi priced its shares at the top end of its marketed range, putting its market value slightly higher than the $65bn valuation of its 2018 fundraising.
That was in stark contrast to Chinese grocery app DingDong, which slashed its IPO target roughly 70 per cent this week ahead of its listing on the New York Stock Exchange. Missfresh, DingDong’s Tencent-backed rival, is down almost 33 per cent since listing on Nasdaq last week. RLX, a Chinese vaping company, is trading about 27 per cent below its issue price while others, such as dating app Soulgate, have scrapped planned US listings.
Regulatory risk is one of the obvious reasons. Not only are Chinese Big Tech companies being hit by regulators at home, but uncertainty over US regulations and scrutiny of Chinese companies that are listed or seeking to list are also having an impact.
Plus, experts argue that with so many good US tech options to invest in, why bother with small Chinese companies? Unless of course, they are a big name such as Didi. That will make its first day of trading closely watched. Stay tuned.
— Mercedes
Smart data
The value of stock market listings by Chinese technology companies dropped more than 60 per cent in the second quarter, as regulators in Beijing broadened their crackdown on the sector. Since the start of April, initial public offerings by China’s tech groups on exchanges worldwide have raised just $6bn, down almost two-thirds from the first quarter, according to data from Dealogic.
The decline came as Chinese tech groups faced pressure from Beijing, which in recent months has stepped up regulatory scrutiny of some of the biggest names in the sector.
Regulators blocked the $37bn IPO of Ant Group, the fintech group controlled by billionaire Jack Ma, in November, and have ordered the business to restructure. Authorities have also punished tech groups for what they deem to be monopolistic practices, including fining Ant’s sister ecommerce group Alibaba a record $2.8bn.
Spotlight
The Hong Kong-based richest person in the world under the age of 30 lives pretty much like many millennials.
Sam Bankman-Fried, 29, swears by a vegan diet, shares an apartment with roommates, wears T-shirts and shorts to work and makes sure every room in his office in Hong Kong’s central business district has beanbag chairs to sleep on.
The US national is worth $8.7bn, according to Forbes. But that number could get “a lot bigger†depending on the outcome of a fundraising round that he said would sharply increase the valuation of FTX, the Hong-Kong based crypto derivative exchange he founded in 2019.
Bankman-Fried almost never drinks or goes on a vacation, he said, because “just like an idle software, your brain is less efficient after a long breakâ€.
Art of the deal
Some marriages are made in heaven. Others have a more earthly provenance. But the megamerger of two of China’s biggest state-owned technology enterprises appears to have been motivated by the US-China tech war.
Approval to create what one Chinese media report described as an “IT aircraft carrier†paves the way for China Electronics Technology and China Putian Information Industry, better known as Potevio, to merge.
Both are among China’s so-called central companies, a set of fewer than 100 core state-owned enterprises overseen directly by the Assets Supervision and Administration Commission of China’s State Council, the country’s cabinet.
The merger is part of China’s efforts to establish supply chains for crucial industries that do not rely on other countries, particularly the US. By combining CETG and Potevio into a larger single entity, Beijing aims to concentrate more capital to invest in research and development.
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