Tesla, which knows more about autonomous driving than Mercedes-Benz, has announced the end of the era of internal combustion engines

In April this year, Tesla's stock price was around $250. At that time, we were relatively pessimistic about Tesla - insufficient cash flow and slow product release. The longer it takes for electric vehicles to become popular, the more likely the old manufacturers will win. After all, the profits of the entire industry are not good. If Tesla gets caught in a fight with the four major auto groups in the low-cost range, it will die in a long war of attrition. For details, see "The Minsky Moment of LeTV in the United States".

After more than half a year of observation and interviews with Tesla employees in China and the US as well as people from the four major auto groups, we believe that the industry environment has changed significantly during this evolution of the auto industry. Tesla will enjoy most of the dividends of the industry evolution, while today's four major auto groups will be buried in the era of internal combustion engines.

Tesla is a controversial target in terms of both stock price and market value.

Why do we say that the four major automobile groups will go bankrupt? Talent, resources, products, brands, channels, capital, everything is better than Tesla, at first glance, they will not die.

However, the failure of Nokia and Moto, with a market value of 200 billion US dollars, was not due to Apple, and the extinction of dinosaurs was not due to the strength of their competitors, but rather to the drastic changes in the environment. Today's automotive industry environment is changing at an accelerated pace, and the goals and paths of product iteration have all changed.

The goal has changed. What’s the next step for intelligent driving?

On October 20, 2016, Musk announced in a telephone conference that all new Tesla cars will be equipped with a hardware system with "full self-driving capabilities" - Autopilot 2.0. This system includes 8 cameras, 12 ultrasonic sensors and a forward detection radar. The camera will provide a 360-degree view with a maximum recognition distance of 250 meters!

The "eyes" and "brains" of cars are evolving rapidly. They can see in all directions and hear in all directions. Their computing power has reached 1 Terraflop (equivalent to 80 processor cores), far exceeding that of ordinary computers.

• 3 front cameras (different viewing angles, wide angle, telephoto, medium)

• 2 side cameras (one left and one right)

• 3 rear cameras

• 12 ultrasonic sensors (sensing distance doubled)

• 1 front radar (enhanced version)

• 1 rear reversing camera

• Processing chip: NVIDIA PX2 (40 times faster than Autopilot 1.0)

OK, now the question is: with continuous enhancement of configuration, where will all the progress lead to?

It must evolve from assisted driving to fully intelligent driving and even unmanned driving.

The classic BMW 3 Series has been delivering driving pleasure for 40 years

BMW's slogan was once "Sheer Driving Pleasure", which is the soul of the BMW i3, the pinnacle of the internal combustion engine era, and the core selling point of products in the era of human driving.

Where's the fun in that if our drivers are all going to be replaced?

According to UN statistics, in 2013, 1.25 million people died in traffic accidents around the world, which is equivalent to the crash of 10 Boeing 777 passenger planes every day. Most of these accidents are caused by human factors, and the number of road killers is increasing. Human driving itself has become a very dangerous factor.

In addition, if megacities are the direction of civilization, then what fun is there in driving that is congested, boring, and tiring? The fun of driving will eventually end up in the arena and in hobbies. People's driving skills will gradually leave the public and become some professional skills and personal hobbies, just like men farming and women weaving, operating sewing machines, and doing carpentry crafts.

The most important goal of the development of the entire automotive industry has changed.

When the automated textile industry lagged behind, operating a sewing machine was an important and necessary household skill

2 The path has changed. There is no end to the stock game in the automotive industry.

The goal has changed, and the path has also changed. The original evolutionary path will inevitably lead to the company's decline.

The entire automotive industry lacks the motivation to break through the existing pattern. It has been continuously optimizing performance, decoration, and cost on the original basis, and innovation is becoming exhausted.

Today, Volkswagen, the largest automobile industry group, is most keen on using a universal model, constantly lengthening or shortening it, slightly adjusting the price, changing the name, or even changing the trademark, and then selling it to customers. Yes, this is the pride of German industry.

In order to control costs, the entire automotive industry has been fighting a desperate battle in a tight inventory game.

Apart from price, configuration and interior, are there really that many differences?

The auto industry has gone through many changes, from hundreds of brands to four major groups and nine companies. Many of these companies, including General Motors, Chrysler, Ford, and Volkswagen, have been mired in trouble and even went bankrupt and reorganized. Dozens of auto brands in the United States and Japan have disappeared forever.

The Rolls-Royce we are familiar with has been sold to BMW by the British; the Land Rover and Jaguar used by the British royal family have been sold to the Indian agricultural vehicle manufacturer Tata Group (NYSE: TTM); Aston Martin, a subsidiary of Ford, has also been sold to an investment institution.

Carlos Ghosn, who served as CEO of Nissan, Renault and Mitsubishi Motors

The brands that are about to disappear continue to disappear. In order to improve operations, the major car manufacturers invited Carlos Ghosn, president and CEO of Nissan-Renault, to serve as chairman of the board of directors of Mitsubishi Motors at the same time, which is a rare sight in the industry.

In the 1990s, Carlos led Nissan out of trouble and promoted the merger with Renault. Today, Nissan Renault is also merging with Mitsubishi Motors. In April 2016, Mitsubishi Motors admitted that some employees tampered with the fuel efficiency of small cars, and was involved in the "fuel efficiency scandal", which resulted in a loss of 145 billion yen in the fiscal year. In order to survive, Mitsubishi Motors chose to merge to cope with the "stock game" in the automotive industry.

Germany's Volkswagen is also having a hard time. The chairman of the Volkswagen Group said that it will lay off 25,000 employees within ten years to save costs. At the same time, it will also build a large-scale lithium battery factory to rebuild its core competitiveness and catch up with Tesla.

Why is the traditional automotive industry so "unlucky"?

The automobile industry is very complex, with many parts and components, and requires the training of a large number of industrial workers to achieve continuous iterative upgrades. Chassis technology and engine technology both require decades of continuous research and development. Moreover, before the 1970s when automation technology was relatively primitive, most operations were done manually. The old technology system has accumulated a large number of workers, which has brought huge advantages, but also huge problems.

Take the United States as an example. The automobile city of Detroit reached its peak during World War II. Led by General Motors, a modern corporate pension system was established, and a large number of companies also began to provide benefits such as medical insurance. In 1950, the automobile industry and the union reached a consensus, the "Treaty of Detroit". This agreement was equivalent to giving employees a stable job and a long-term guarantee of salary increases.

However, the American auto industry did not expect the rapid rise of Japanese autos. In order to strengthen its competitiveness, GM had to postpone its promised salary increase and put part of the salary increase into future pension payments, which ended up digging a huge hole for itself. This is equivalent to long-term usury! If the industry cannot grow at a high speed, it will not be able to pay it back.

Finally, the financial crisis broke out in 2008. As the largest pension institution in the United States, the auto industry collapsed as a whole. It is said that Detroit had a pension black hole of nearly $3.5 billion at that time. The workers who could not accept the salary cut emotionally could only threaten the government in trouble. In the end, General Motors had no choice but to go bankrupt and reorganize.

In contrast, Tesla bought Toyota's factory in 2008 and used a large number of robots to avoid digging holes for itself in terms of manpower issues to the greatest extent possible. Without historical baggage, the company is lightly equipped.

Assets have changed. What is the most important asset of a car?

Take Toyota as an example. Its core assets are brand, R&D, chassis technology, engine technology, production partner network, dealer network, etc. Then according to Tesla's IT enterprise play, the most valuable are:

• Data: User personal data, driving data, geographic information data, user behavior data, and all data that can help iterate autonomous driving...

• Network: Charging energy network. The huge charging network is the sales moat of electric vehicles.

• Service: Service is sales. Do you believe that autonomous driving services can help car owners make money?

Automatically find charging stations, automatically drive taxis to pick up passengers and make money

In the autopilot package released by Tesla, fully autonomous driving will be activated via OTA around 2017. At that time, all 8 cameras will be activated, and fully autonomous driving will be possible without human intervention throughout the process. And it will automatically charge when passing through a super charging station (with automatic plug-in charging piles). You only need to tell the car where to go on the map, or tell the car to "go home", and it will automatically navigate to the destination, regardless of road conditions, traffic lights or emergencies. When you arrive at your destination, you only need to close the door, your car will automatically find a parking space, and then send the coordinates to your phone. You can share your self-driving car with friends and family, or rent it out through Tesla's network to help you make money.

In addition, if Tesla and its sister company SloarCity merge successfully, it will be an imaginative thing to "assemble" a huge energy network covering the entire United States. For traditional car manufacturers, it will cost a lot to surpass Tesla.

SolarCity workers install solar panels on American homes

Another core asset of Tesla's project is its leading edge and time. If the speed of autonomous driving begins to increase and people's acceptance of it increases, the price that traditional car manufacturers need to pay will be extremely huge:

• It is necessary to give up almost all advantages in a short period of time and go all in on electric vehicles and autonomous driving;

• It needs to be based on autonomous driving, subverting most of the previous design concepts and processes;

• Need to build a very high level software development team, surpassing Tesla;

• It is necessary to build a supply chain and production line, battery factory, and even foundry similar to that of electronics;

• Layoffs need to be completed quickly, especially among the core technical personnel and management teams who have grown up based on internal combustion engine technology.

Can the above conditions be achieved? If so, the company may collapse. It is possible to do it slowly over ten years; but artificial intelligence is evolving rapidly and time waits for no one.

Just as Kodak invented the digital camera and then watched itself being killed by the digital camera, Nokia made Internet-enabled mobile phones very early, but the existing interest network hindered its adaptation to the rapidly changing environment. We cannot only see the huge bodies of dinosaurs, but also see that they were huge, hairless, and could not live in caves to avoid the cold. They could dominate in warm periods, but could only struggle in cold winters.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.