My six-hour high-speed train ride from Beijing to Shanghai one afternoon last week felt like a WeWork on wheels. In a packed, second-class train car of about 90 people, many were working on laptops and chatting on business phone calls. When I arrived in Shanghai around 8 p.m., there was a line with a 15-minute wait for taxis. And when I finally got to the hotel on the city outskirts an hour later, many people were just checking in. The counter by the receptionist was filled with food delivery bags, waiting for the hotel robot to bring them upstairs. I was in town for an event by Chinese electric car company Nio , which was vying with Huawei’s big Connect conference for literal space and attention in a week of tech news. Electric car manufacturers are abuzz In the world of electric cars alone, Baidu -backed startup Jidu launched its car on Tuesday afternoon; Xpeng also unveiled its new G9 electric SUV. BYD on Wednesday announced its luxury SUV Yangwang U8 would start sales at one million-plus yuan ($150,000), while Arcfox on the same day released a mass-market car targeted at young parents. Leapmotor also launched two mass-market cars on the same day. Nio, which had just wrapped its fifth car release in four months the prior week, launched a smartphone on Thursday. The company also showed off what it was doing in autonomous driving software, artificial intelligence and factory automation. Customization is important for the premium customer, Nio CEO William Li said on stage in Mandarin, translated by CNBC. He noted the company offers a whopping 3.6 million combinations of colors and features for its cars. Li claimed that by increasing manufacturing efficiency with technology, it only takes Nio 21 days to deliver on a customer’s order — a capability with which he said the company can build its mass-market brand. Fast-fashion giant Shein has used tech-integrated supply chains and big data analytics to respond quickly to — if not anticipate — what clothes consumers want to buy. Companies are spending even as economic worries linger Demand is China’s problem today. Nio’s car deliveries fell in the second quarter, while the company’s spending on research and development has soared in the last two years. Huawei, another struggling company that’s emphasized its commitment to R & D , announced during its Shanghai event it had a slew of artificial intelligence models for industry application. CFO Meng Wanzhou gave a speech about how AI services are the future for the company, according to a release . The company is also forging ahead in its EV brand Aito, which announced another car earlier this month. Huawei caused a stir several weeks ago when it quietly revealed its flagship phone, the Huawei Mate 60 Pro. In the vein of shocking if true, the device reportedly has a 5G-capable chip that has broken through the 7 nanometer barrier. But it’s unclear how many Mate 60 Pro phones Huawei can make and at what cost. The company has been battered by U.S. sanctions and revenue has plunged so much it fell from first place among China’s non-state-owned companies. JD.com has now held that spot for two years running. JD built its way to profitability by spending heavily on a logistics network — which let it roll out same-day or next-day delivery. When I passed through last week, the company was still building out its corporate campus on the outskirts of Beijing — a rare show of capex amid this year’s dour sentiment. “The ability for the average individual Chinese to persevere and find a way is amazing. I mean people scramble. People figure it out. They know how to be industrious. They don’t just sit back and Netflix and chill, whatever they do in the U.S.,” said Peter Alexander, Shanghai-based founder of fund consultancy Z-Ben Advisors, who has been in China since 1996. “And I think that is an important cultural difference that just is completely missed by those that are analyzing,” he added. Alexander expects the economy will rebound slightly toward the end of the year. Indeed, China’s retail sales grew 4.6% in August compared to the previous year. That result beat July’s 2.5% year-over year rate. However, the real estate sector continues to weigh down the economy. A competitive spirit, particularly in tech China’s cutthroat competition hasn’t been lost with the slowdown. Huawei reportedly released its Mate 60 Pro video during an Oppo phone launch, stealing the limelight. The news also hit just days before Apple’s iPhone 15 release . Huawei has a domestic product launch scheduled for Monday. Giant American corporations are doing what they can to hold onto their market share. Rather than tea, the stewardess on the high-speed train brought around Starbucks-branded Americanos and lattes, which were also available through a mobile phone ordering service. Ahead of its new iPhone release, Apple made sure to spend on flashy urban billboard ads in China. Hundreds of people trekked out to a flagship Apple store in Beijing to pick up the new iPhone 15 on Friday. However, stock analysts were generally unimpressed with Nio’s phone and tech announcements. “Though we acknowledge the company’s progress in [its operating system] SkyOS and NOP [assisted driving software], we have a negative read on its mobile business,” Nomura China autos analyst Frank Fan and a team said in a report Thursday. “We think that putting resources into mobile business, coupled with no new model rollout plan for the next 12 months and USD1bn of convertible bond issuance, will raise concerns over its development strategy and profitability given the soft monthly deliveries,” the analysts said. They have a neutral rating with a target price of $7.50 a share. Bank of America on Thursday retained a buy rating with an expected $15 a share, noting Nio management’s expectations that high R & D spending will boost competitiveness and lower costs in the long term. Despite its financial difficulties, Nio has pulled off miracles before, getting a $1 billion lifeline during the pandemic in early 2020 and going on to see its stock soar by more than 1,100% that year. “What drives Nio is experiences, regardless of our car, our phone or our services, including our battery-swapping services and post-sales services,” Li told me in an interview Wednesday. “Our company is a very diverse and dynamic company. The user doesn’t just buy a car, but actually lots of emotional experiences.” The company’s claim to market stickiness is the community it builds with its app and Nio House clubhouses. Nio ET5 sedan owner Angela Cai said she wasn’t even considering Nio until this spring, when two friends told her about the community engagement and services. After buying her car in May, Cai said she got it in a week. While she hasn’t had time to give the Nio phone a good look yet, she said she’s a regular at the local Nio House, and invites family and friends there. “Now it’s becoming a base camp of our life,” Cai said. — CNBC’s Michael Bloom contributed to this report.
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