Youbou has a model. Will Tesla learn from it?

Recently, Drip was successfully listed in the United States to raise money, the Chinese Communist Party urgently took down the Drip app, Drip’s stock fell in response, the loss-making American investors wanted to sue Drip, and Drip was in internal and external difficulties.

The dilemma of Drip is reminiscent of two companies, one is Uber, Drip’s biggest competitor back then. The other is Tesla, which has the same road maps, artificial intelligence and big data as Drip.

Uber, the pioneer of online taxi, officially entered China in 2014, and was personally supervised by CEO Kalanick, who spent 75 days in China in 2015. If you count the flight time between China and the U.S., it accounts for almost half of his working time. This shows its determination to conquer the Chinese market.

However, what Youbou did not expect was the toughness of DDT. Drip took advantage of the timing, the location and the people, plus a team like Liu Qing who worked 140 hours a week and had a very good education and work background.

Soon both sides fought a hard price war and started to burn money in a big competition. Kalanick admitted that Youbou burned $1 billion a year in subsidies alone, while Drip burned even more than that, and both companies were losing huge amounts of money.

In the end, the two sides reached a deal in which Youbou held 5.89% of Drip, equivalent to 17.7% of economic interests, making it the largest shareholder of Drip at that time. Drip invested $1 billion in Youbou, holding 1.47% of Youbou’s equity and owning all of Youbou China’s brand, business, data and other assets. Since then, Youbou has withdrawn from the Chinese market.

The exit of Uber is a great escape of victory. After the merger, Uber’s economic interest in DDT was valued at $7 billion. Uber burned $2 billion in China in two years and sold $7 billion, which is a pretty good deal.

Imagine the tragedy if Uber and Drip continue to battle it out in China.

Because Drip is not a company in the usual sense. Among its shareholders, you can see the presence of top Communist Party families. These rich and powerful senior officials take up the entire national resources, especially the market resources of 1.4 billion people, which is not a fair competition for any foreign company.

In fact, it’s not just DDT, but all the big companies in China, such as Alibaba, Tencent, Baidu, etc., are doing the same. And which of these large companies did not start by stealing and copying technology from the United States?

However, the profits of these companies have nothing to do with the Chinese people. The people do not have the opportunity to buy a single stock. As if China’s reform and opening up for more than 40 years, the real beneficiaries are companies like DDT and the families of high officials behind them. The people are just like the passengers and drivers of DDT, who pay for their own cabs or pay for their own time to pull jobs, working more than ten hours a day to earn money.

In fact, the CCP introduces excellent foreign companies, but only to steal their technology, so that they can fall into the CCP’s raising, trapping and killing trap and cannot extricate themselves. Tesla will be another new case.

Indeed, Tesla was brought in by the CCP on favorable terms, the only wholly foreign-owned auto enterprise approved by the Chinese government, and was given preferential treatment in terms of plant land, loans, etc.

However, when Tesla finished building the plant and started production and sales, the Chinese Communist Party’s difficulties came. A series of incidents, such as the “woman on the roof of the car”, were staged to force Tesla to hand over vehicle data and formats, encryption methods and related technologies.

The data requested by the Chinese Communist Party includes the customer’s cell phone, face, license plate, audio, video and images inside the vehicle, the route and location of the vehicle, roads, buildings, terrain, traffic participants, i.e. pedestrians, people using non-motorized vehicles, people driving and riding in motor vehicles, people using other means of transportation, etc.

In addition to the Chinese Communist government’s difficulties, Tesla is also facing siege from domestic electric car companies such as BYD, Azera, Xiaopeng Automobile, and Ideal. It is foreseeable that the future road of Tesla in China is full of hardships.

In fact, of all the risks facing foreign investors, the biggest risk is that the Chinese Communist regime is shaky and could collapse at any time. By forcing a US listing this time, Tesla is grabbing time to get in the bag before the fall of the Chinese Communist Party. Drip’s behavior is a wake-up call for foreign companies still attached to the Chinese market.

Youbou has already exited China first. Should Tesla and other foreign companies follow suit and prepare an early exit plan for themselves?