Tesla and BYD diverge, GlobalFoundries appears to merge

Howdy from California, that is Yifan, your #techAsia host this week. Yesterday was “Liberation Day” within the US, the day President Donald Trump introduced a barrage of reciprocal tariffs on China, Japan, the EU and different commerce companions, allies and foes alike. In the meantime, his 25 per cent extra levies on auto imports will partially kick in on Thursday.

Trump mentioned the tariffs will rebalance US commerce relations and scale back the deficit, however his “First Buddy” Elon Musk is perhaps the primary in line to get harm by rising commerce obstacles.

Musk’s Tesla has turn out to be a political image because the tech billionaire spearheads the so-called Division of Authorities Effectivity (Doge), a Trump White Home process power concerned in firing tens of 1000’s of federal staff in a push to drastically shrink the federal government and enhance its spending effectivity. Protests in opposition to Tesla have been held throughout the globe and Tesla’s inventory has been in free fall this 12 months.

Within the San Francisco Bay Space — the previous dwelling of Tesla headquarters and the primary place within the US to embrace EVs — I’ve seen a number of Teslas driving down Freeway 101 with their T-shaped brand eliminated.

Trump’s new tariffs are anticipated so as to add additional headwinds for the corporate, notably in its dwelling market. Whereas the California gigafactory is perhaps the place most of its US automobiles are completed and shipped, its auto components provide chain will nonetheless be topic to the extra levies. Tesla shares dropped greater than 8 per cent throughout prolonged buying and selling Wednesday following the tariff announcement.

In the meantime, Trump has put surprisingly excessive reciprocal tariffs on south-east Asian nations, together with Cambodia and Vietnam, which had been slapped with charges of 49 per cent and 46 per cent, respectively, greater than the 34 per cent China faces.

Vietnam has emerged as a winner of the tech provide chain diversification in recent times as corporations transfer away from their Chinese language factories to the south-east Asian nation, in response to the rising commerce obstacles the US put in direction of China.

Different well-liked various provide chain locations similar to India and Indonesia have additionally been slapped with steep tariffs. Will south-east Asia stay a well-liked selection amongst tech corporations to construct out their provide chains, or will constructing within the US be the one possibility going ahead? Both manner, American customers are in for a tough journey within the months to come back.

Tesla’s turbulence and BYD’s increase

2025 has began fairly otherwise for BYD and Tesla. The 2 carmakers have been in a neck-and-neck race for the worldwide EV crown since 2023. Whereas each are going through headwinds, together with intensifying competitors, weakening economies, slowing demand and tariffs, Elon Musk is throwing a wrench within the works for Tesla.

China’s BYD has outsold Tesla in electrical automobiles for a second straight quarter because the US automaker faces a backlash over CEO Elon Musk’s political actions, Nikkei Asia’s Yifan Yu experiences.

For the January-March interval, Tesla delivered 336,681 automobiles worldwide, down round 13 per cent in comparison with the identical interval final 12 months. BYD, in the meantime, delivered 416,388 battery electrical automobiles (BEVs) within the first three months of 2025, up 38.74 per cent year-on-year.

Tesla is about to report its first-quarter earnings later this month, and buyers shall be keen to listen to how Musk intends to show across the model’s picture because the CEO of the EV pioneer more and more stands in contradiction to the values of a lot of its clients.

The street to profitability

Chinese language autonomous driving firm WeRide has mentioned it hopes to turn out to be worthwhile inside 5 years however warned that uncertainty over worldwide authorities regulation and industrial partnerships make the timing “difficult to predict”, write the Monetary Instances’ William Langley and Gloria Li.

Tony Han, founder and chief govt of the Nasdaq-listed firm, mentioned autonomous driving required enormous funding and producing returns could be a “long process”. The Nvidia-backed firm has reported greater losses in every of the previous three years.

“What I want in the next five years is that first of all . . . this company can become profitable,” Han informed the Monetary Instances. “I think from a technology perspective it will definitely support this within five years, but there are more commercial and policy considerations.”

Robotaxi companies operated by the sector’s main corporations — together with Chinese language web search group Baidu and native rival Pony.ai, in addition to Google’s Waymo within the US — had but to report income, mentioned analysts.

Lu Daokuan, an analyst at S&P International Mobility, mentioned excessive prices for software program, upkeep and analysis had been more likely to forestall Chinese language robotaxi teams attaining profitability till no less than 2028.

“Full-scale commercialisation is only possible . . . when robotaxis can perform as well as human drivers on the road,” mentioned Lu.

Massive to larger?

US contract chipmaker GlobalFoundries and United Microelectronics Corp, Taiwan’s No 2 chipmaker, are exploring the potential of a merger amid American efforts to mitigate dangers surrounding the Taiwan Strait and fend off rising competitors from China in mature chips, Nikkei Asia’s Cheng Ting-Fang writes.

The tie-up would create a much bigger, US-based firm with a manufacturing footprint throughout Asia, the US and Europe. The intention of the merger could be to create an organization with the financial scale to make sure America has entry to mature chips as tensions simmer between China and Taiwan and as China produces extra chips by itself.

Whatever the consequence, the GlobalFoundries-UMC talks underscore America’s need to decrease its dependence on Taiwan, which is dwelling to the world’s second-largest chip economic system by income. Maybe that is additionally why Intel’s new CEO mentioned this week that the American chip big remains to be dedicated to its foundry enterprise, regardless of latest setbacks, because it has an “essential role” in securing the US chip provide chain.

Humanoids with Chinese language traits

Did you see the viral video by which a bunch of humanoid robots dance alongside human performers on Chinese language state broadcaster CCTV’s Lunar New Yr Gala in January? The robots may need regarded a bit humorous, awkwardly waving handkerchiefs up and down, however they’ve turn out to be a treasured precedence for Beijing, Nikkei Asia’s Cissy Zhou and Ryohtaroh Satoh write.

Just like EVs and smartphones, China’s authorities insurance policies have prioritised humanoid robots as “disruptive products”, with the market anticipated to succeed in $43bn by 2035.

After Elon Musk launched an Optimus prototype in 2022, China’s Ministry of Trade and Info Expertise issued industrial improvement steering the next 12 months, saying the nation would attempt to mass-produce humanoid robots by 2025 and search to construct a globally aggressive industrial ecosystem.

Between the world’s prime two economies, the US has the sting in AI chips, software program and algorithms, whereas China has the benefit in AI algorithm improvement in addition to a robust provide chain that may provide high quality elements at low prices.

Prompt reads

#techAsia is co-ordinated by Nikkei Asia’s Katherine Creel in Tokyo, with help from the FT tech desk in London.

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