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How the Chinese tycoon driving Volvo plans to tackle Tesla

HANGZHOU, China — "Do you know how big Volvo is?" asked Don Leclair, finance chief at Ford. It was 2008, and Leclair was responding to an offer from a little-known Chinese businessman to purchase the Swedish carmaker, which Ford owned. The businessman, Li Shufu, had a company with less than half Volvo's sales and a flagship model, King Kong, almost unknown outside China. He was politely shown the door of the "Glass House," Ford's iconic headquarters near Detroit, according to two people who were at the meeting. Ford's Leclair did not respond to requests for comment about the episode. Fast-forward to 2021 and Li Shufu's company, Zhejiang Geely Holding Group, is one of the biggest-selling automakers in the world's biggest auto market. It controls not only Volvo Cars but also a clutch of global auto brands, and a significant stake in German giant Daimler AG, the maker of Mercedes-Benz. These names are now part of its plans for a revolution in autos. Geely is preparing Volvo for a listing on the Nasdaq Stockholm exchange as a route towards the future of transportation: One where cars are part of an electrified network of mobility services, driving themselves, connecting to each other and — like cellphones — generating an array of data and new business opportunities. It's a vision more Silicon Valley than Detroit, where traditional automakers globally are chasing another giant — Tesla Inc. Li Shufu and his advisers eventually convinced Ford to part with Volvo in 2010 for $1.8 billion. It was the first in a string of deals, tapping brands such as Lotus, Smart and the London Electric Vehicle Company to form a network that he calls a "bigger circle of friends" across industry segments. Li Shufu sees them as building blocks to help Geely compete in a future where autos are not vehicles, but "service providers," he told Reuters in his management suite at Geely's headquarters in Hangzhou, eastern China. In that business model, cars will be available on subscription and offer services such as making payments and in-car apps. They will update their own software, and spawn opportunities in the same way as the mobile operating systems developed by Apple Inc and Google. "We are trying to create an automotive ecosystem similar to Android," he said. Li Shufu, 58, recently adopted a foreign first name - Eric - because he liked the sound of it.

This is why Tesla doesn't release monthly sales numbers

While most automakers that sell vehicles in the US release a flurry of numbers at the beginning of every month to tell us how many cars and trucks they've sold, Tesla Motors has resisted following the herd. This can be frustrating for those of us who like to look at some cold, hard numbers, but CEO Elon Musk has a good explanation for why he won't play the sales figures game. During a call with investors about Tesla's third-quarter activities – Tesla does reveal its deliveries every three months – Musk was asked by John Lovallo of Bank of America if Musk would ever consider releasing monthly sales numbers? Musk's initial reply was a short: "Um, no. Sorry," but he then explained why: Part of the reason why we don't release the monthly deliveries number is just because it varies quite a lot by region and the media tends to read all sorts of nonsense into the deliveries. So, we'll have 1,000 cars reach a country one month and none the next month or 100 the next month trickle in because those are the numbers that were registered one month versus the next. People will say, 'oh, wow, Tesla sales drop by a factor of 10. Well, no, the boat arrived in January and not all the cars got registered in January and some got registered in February and in March it's back up again. People assume deliveries are a proxy for demand, and that's not the case. It is the case for other car companies but in our case, it really needs to be parsed into orders and deliveries. And bear in mind, there are a lot of things we could do to amplify orders. Orders is not a true measure of demand, it's just a measure of what we need to do to meet our production and deliver number. In other words, let's not worry about the little ups and downs because we've got plenty of demand and we're selling plenty of cars. See you in February! You can read the full transcript of the call here and listen here.

Tesla in talks with BMW about batteries, charging collaborations

With Toyota and Daimler no longer holding Tesla shares, the electric vehicle company might be looking for a new partner – possibly a Bavarian one. In a new interview with Germany's Der Spiegel, CEO Elon Musk confirmed that he has had talks with BMW execs about future collaboration. "We are talking about whether we can collaborate in battery technology or charging stations," Musk said in the interview, according to Reuters. However, a Tesla spokesperson has tempered things by saying no formal agreements are in place at the moment. In the same interview, Musk reportedly praised BMW's use of carbon-fiber-reinforced plastic in its i sub-brand offerings, and said he would like to have a battery factory in Germany in the next five or six years. The possibility of technological cooperation between Tesla and BMW has been a hot topic this year. In June, Musk reportedly met with BMW execs, and the two companies were also rumored to have met with Nissan to discuss charging technology. When Daimler sold off its shares, there was talk of it opening the way for possible collaboration between the two automakers, as well.