Tesla's FSD vs AutoX China's First Driverless Robotaxi, Kuaishou sets record IPO in Hong Kong

As of 2020, Tesla is the leading electric vehicle brand in China and, as a result, could improve its autonomous capabilities at a faster rate than its competitors.

1. ) Tesla's Earning Call and will China adopt Tesla's FSD?

Chinese companies have been investing significantly in autonomous driving capabilities during the last few years.

Recently, Xpeng rolled out autonomous highway driving features that included entering and exiting highways, a feature that Tesla introduced in 2018 with hundreds of thousands of customer cars generating data to train the neural networks behind new Autopilot features.

In comparison, Xpeng is relying on data from only tens of thousands of vehicles. That said, some online videos claim that Tesla’s autonomous features are inferior to those of Chinese companies. If accurate, the reason could be that Tesla’s installed base and data collection have been centered in North America. Nonetheless, as of 2020, Tesla is the leading electric vehicle brand in China and, as a result, could improve its autonomous capabilities at a faster rate than its competitors.

On its earnings call, Tesla highlighted battery cells as the biggest constraint to scaling electric vehicle production. In 2022, Tesla itself plans to produce 100 gigawatt-hours of batteries, enough to supply an incremental 1.3 million vehicles relative to the 500,000 it produced last year. Panasonic, CATL, LG Chem, and other cell manufacturers also plan to scale battery output during the next two years.

Here's the thing, given pricing dynamics for autonomous ride-hailing in developed compared to developing countries, perfecting FSD for Tesla in the US first makes strategic sense.

If Tesla were to launch autonomous ride-hailing in China, its take-rate could be significantly lower than that in the US, especially if it were forced to share the economics with Chinese partners. In our recent Big Ideas Report, we illustrated that the developed world could respond to autonomous ride-hailing more dramatically than developing countries because human driven ride-hailing services like Uber and Lyft are much more expensive in countries like the US than are those in China. Research has shown, at maturity and scale, an autonomous taxi could price at 25 cents per mile, roughly half the cost of ride-hailing today in China but one eighth that in the US.

Singular estimates that the enterprise value of autonomous ride-hail platform operators could increase to $3.8 trillion globally by 2025. Given the size of the opportunity, the competition could prove fierce. Longer term, however, we believe companies with the most comprehensive and high-quality driving data and the best execution should enjoy natural geographic monopolies.

2.) AutoX Launches the First Driverless Robotaxi in China 

This week AutoX launched China’s first fully driverless robotaxi to the public in Shenzhen, China. This also makes AutoX the second in the world to introduce fully driverless robotaxi, only a few months after Waymo’s launch in Arizona last fall. 

AutoX is a private autonomous driving technology company founded in 2016 by Xiao Jian Xiong, an MIT-trained AI scientist also known as “Professor X,” and is backed by Alibaba and DongFeng Motor.

While the initial launch was in a remote district and could run into roadblocks before broader commercialization, AutoX’s milestone highlights China's technological progress as the global robotaxi race gets underway. In our view, many investors are underestimating the impact of China’s ability and agility in adapting to new technologies, its government’s focus on leapfrogging other countries in the technology race, and the potential of infrastructure projects likes V2X - vehicle-to-everything - to accelerate its robotaxi progress.

3.) Will Intel and TSMC adopt this Advanced Packaging Technologies in the Near Future?

Now that semiconductor manufacturers are having difficulty cramming more transistors into computer chips, innovation seems to be evolving from bigger chips to advanced packaging technologies that glue chips together. 

Typically, computer chips sit on a plastic module called a package that connects to a printed circuit board. While traditionally packages provided an interface to mount chips onto boards, today advanced packaging connects multiple chips together.

This week Chief Architect Raja Koduri tweeted a picture of Intel’s upcoming data center Xe GPU. Instead of a large monolithic chip, the Xe GPU binds two GPUs and ten supporting chips together on a single package. Tightly integrated at the package level, chips can communicate with each other with lower latency, higher bandwidth, and lower power consumption. Thanks to package level integration, chips snap together both horizontally and vertically. While not as effective as chip level integration, package level integration is much better than circuit board connections. 

We expect that Intel and TSMC will adopt advanced packaging technologies in the coming years. As a result, computer architectures will look less like standalone houses in suburbs and more like the densely populated streets of Manhattan.

Tencent backed Kuaishou plans its $5.4 billion IPO in Hong Kong next week

4.) Kuaishou, TikTok’s biggest rival in China, sets records in $5.4 billion Hong Kong IPO

Chinese short-video platform Kuaishou Technology has set records for retail interest in a Hong Kong initial public offering, receiving more than 1.4 million applications from individual investors to take part.

Kuaishou plans to price its IPO of up to $5.4 billion next week at the top end of the marketed range next week, in what is shaping up to be the biggest such market debut in Hong Kong in two years.

5.) Silver inches upwards as Reddit turns its short squeeze crosshairs towards commodities

Silver futures were up 8% shortly after the futures market opened, marking the biggest move in the futures since at least 2013. The contracts last traded up 6.8%.

The spike in demand for silver appears to be related to retail traders in the Reddit forum WallStreetBets, which has helped drive trading activity in heavily shorted stocks like GameStop and AMC Entertainment in recent weeks.

The forum had multiple active threads dedicated to silver on Sunday night. The phrase ”#silversqueeze” was also trending on Twitter.”