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Uber scales back in Pakistan • ZebethMedia

Uber is scaling back its operations in Pakistan, the latest in a series of efforts from the ride-hailing firm as it looks to improve its financial performance. The company says its marquee app is ceasing operations in five of the six cities where Uber had launched and expanded to over the years. The eponymous service will now only be available in Lahore in Pakistan, Uber said. Uber insists that it remains committed to Pakistan and its subsidiary brand, Careem, will offer services in Karachi, Multan, Faisalabad, Peshawar and Islamabad. The move will nonetheless impact several jobs. Uber says it will help some driver partners switch over to Careem. It did not specify the number of jobs that will get eliminated as part of the decision. “We know this is a difficult time for the teams who have worked incredibly hard to build this business over the past few years,” the company said in blog post. “We greatly appreciate everyone’s contributions and our priority is to minimize the impact to our employees, drivers, riders, and Hero partners who use the Uber app during this change in Karachi, Islamabad, Faisalabad, Multan and Peshawar.” Uber’s abrupt decision came as a surprise to local residents. Uber entered Pakistan in early 2016 as part of a $250 million push to expand into the Middle East and North Africa. The company has faced tough competition from InDrive and Prosus Ventures-backed Bykea in the nation in recent quarters. The company, which aggressively expanded to dozens of nations half a decade ago, has slowed its investments in many markets. In India, a key overseas market for the firm, Uber offloaded its Uber Eats delivery business to Zomato, a local rival, and sold its shares in the company recently at an assumed unrealized loss of $707 million. Media reports in recent months have speculated that Uber might sell its India ride-hailing business to rival Ola, a claim both the firms have denied.

Tiger Global, Blume back startup bringing safety — and intelligence — to EVs • ZebethMedia

Tiger Global’s latest investment in India is Vecmocon, a startup building solutions to bring safety and reliability alongside intelligence and health monitoring to light electric vehicles (EVs), addressing concerns that are curtailing the sales of electric scooters in the South Asian market. Unlike traditional internal combustion engine (ICE) vehicles that have existed for more than 100 years, EVs are pretty new to the market. The data recently shared by the Indian government shows that the country has over 1.3 million EVs, compared to more than 278 million non-EVs. The cost of service and turnaround time of an EV in the country are also quite high compared to those of traditional combustion engine-powered counterparts. A number of EVs, especially EV scooters, that are available in the Indian market are also not meeting quality standards. Some have even caught fire in the recent past. Vecmocon, an abbreviation for vector motor control, is trying to solve all this using its core EV components and software that it sells to OEMs. The New Delhi-based startup additionally offers platforms for cloud integration to enable remote diagnostics for fleet operations. “For electric vehicles to happen, its ecosystem has to happen, and that ecosystem has to be data-driven. It has to be digitally enabled for a quick evolution,” said Peeyush Asati, co-founder and CEO of Vecmocon, in an interview with ZebethMedia. IIT Delhi alumnus Asati co-founded the startup with Shivam Wankhede and Adarshkumar B — alumni of IIT Delhi and Indian School of Business (ISB), respectively, in August 2016. Before starting their venture, the trio provided pro bono consultancy to e-rickshaw manufacturers. That helped them notice the industry’s strong reliance on China. “The Chinese component manufacturers are not cooperating because the ecosystem in China around EVs is fundamentally different from how it is in India. The geography is diverse, the use cases of how people use electric vehicles are two-wheelers, kind of in terms of culture in terms of behavior, in terms of geography, all of it was different,” Asati said. All this brought them to the conclusion that while many companies have started building the mechanical side of things for EVs locally in the market, the core tech side continues to leave a lot to be desired. Vecmocon offers battery management systems, vehicle intelligence modules, instrument clusters and chargers, among other components. It targets light EV manufacturers making two-wheelers, three-wheelers, forklifts and electric tractors at the moment, as those are the lowest hanging fruits, said Asati. He believes electric cars would still take some time to enter the Indian market due to the lack of physical infrastructure, though the solutions that Vecmocon makes are also ready for four-wheelers. The co-founder said the startup’s battery management systems comply with the Automotive Industry Standards (AIS)-156 that the Indian government introduced last month to address EV battery fire issues. The safety standards are yet to become mandatory for manufacturers, though. “We have already executed those recommendations in our previous generation and improved on them further. So, we are ahead in terms of safety and reliability,” he said. Now they secured some much-needed fuel to expand. Tiger Global co-led the pre-Series A round of $5.2 million in Vecmocon along with Blume Ventures. “We are impressed with the deep commitment and progress that Peeyush, Adarshkumar and Shivam have made to solve long-term problems in India’s EV industry, and we are excited to partner with them as they build a high-quality global automotive tech company to support the adoption of EVs,” Connie Lee, partner, Tiger Global, said in a prepared statement. The funding from the all-equity round will be used to build a business around the offerings created by Vecmocon, Asati said. He noted that the startup is planning to hire sales, HR, operations and finance people in the team, which currently has 20 engineers developing different hardware and software solutions. Vecmocon, which is currently using labs at IIT Delhi, also plans to build its in-house labs to test and develop new offerings for the market. “An electric vehicle is a technologically advanced product. For the larger number of OEMs, it is hard to develop the expertise to design and perfect the software and hardware components like a BMS (battery management system) or VIM (vehicle intelligence module). Such customers stand to win greatly by adopting Vecmocon’s platform which allows them to launch high-performance vehicles faster to the market. Over the last 5 years, Vecmocon has built a unique capability to engineer such data intensive components and deliver a highly robust and safe system,” said Arpit Agarwal, director, Blume Ventures. In this financial year, Vecmocon claims to have already orders of around $5 million to execute — giving it touch points with 30,000-40,000 odd vehicles. Asati said that the plan is to power more than 100,000 vehicles by next year and the hit the milestone of 500,000 by 2025. The startup also does not want to limit itself to India, as it has started working in a pilot phase with clients in global markets and has its initial customers in the U.S., Sri Lanka and Malaysia. Prior to the pre-Series A funding, Vecmocon had raised $300,000 in a strategic seed round in 2019 from Tessellate Tech Ventures. It also received seed support in a debt and equity mix from India’s Department of Science and Technology (DST).

Many Americans treat driver assist systems like self-driving • ZebethMedia

Many Americans feel comfortable treating their advanced driver assistance systems (ADAS), which partially automate certain driving functions, as full self-driving systems, according to a study from the Insurance Institute for Highway Safety (IIHS). The survey explored habits, expectations and attitudes among regular users of General Motors Super Cruise, Nissan/Infiniti ProPILOT Assist and Tesla Autopilot. A total of 604 participants spread more or less evenly across the different brands took part in the survey from January to November 2021. All three groups were found to be more likely to engage in non-driving related activities — like texting or eating — while using their systems than when driving manually. That was especially true for Super Cruise and Autopilot users, who were more likely to report performing activities that would take their hands off the wheel and eyes off the road. Super Cruise and Autopilot users also said they could perform these types of tasks better and more often while using their systems, according to the study. A total of 53% of Super Cruise users, 42% of Autopilot users and 12% of ProPILOT Assist users said they were comfortable treating their systems as self-driving. The study’s publishing follows a series of incidents involving the safety of Tesla’s Autopilot system, and by extension, its “Full Self-Driving” (FSD) system, the company’s more advanced ADAS. Last month, some Tesla drivers filed suit against the company for falsely advertising the autonomous capabilities of Autopilot and FSD, something California’s Department of Motor Vehicles has also recently accused Tesla of. In August, the National Highway Traffic Safety Administration (NHTSA) asked Tesla to provide more information about its cabin camera — which is meant to monitor the alertness of drivers using Autopilot and FSD — as part of its ongoing probe into 830,000 Teslas that include Autopilot. NHTSA is currently investigating 16 crashes in which Tesla owners had potentially engaged such systems before crashing into stationary emergency vehicles. The agency has opened a total 39 special investigations into Autopilot-related crashes since 2016. GM’s Super Cruise, by comparison, has been probed by NHTSA only twice in the same timespan, according to NHTSA data. Since Super Cruise launched in 2017, the ADAS has appeared on over 40,000 vehicles, so it’s a smaller pool than Tesla’s Autopilot which comes standard on all new Teslas. Super Cruise’s safeguards have also been described as more robust than Tesla’s. Consumer Reports issued ratings for ADAS on certain vehicles earlier this year, and found that Super Cruise and Ford’s Blue Cruise were the only automakers to receive two extra points for having systems that encourage safe driving. During CR’s tests of different GM vehicles, the agency said that each delivered “multiple warnings to grab an inattentive driver’s attention.” “If the driver still does not react, the system will start to slow the car down on its own, eventually bringing it to a stop. The system won’t operate if the camera is covered,” according to a statement from CR.  With Tesla Model Y and S vehicles with software version 11.0, drivers could use Autopilot even with the vehicle’s cabin camera fully covered, according to CR. If the camera detected the driver’s eyes were off the road, it would shorten how long the driver could take their hands off the wheel. However, as long as the driver’s hands remained on the wheel, CR found no warnings if the eyes were off the road.  The IIHS survey found that some drivers in the survey said such user safeguards, like attention reminders and lockouts, were annoying and they would try to circumvent them. However, most people said they found those safeguards helpful and felt safer with them. The study suggests that driver monitoring systems and “multifaceted, proactive user-centric safeguards” are key to shaping proper behavior and understanding about drivers’ roles while using partial driving automation. “Some regular users have a poor understanding of their technology’s limits,” the study reads. “System design appears to contribute to user perceptions and behavior.” This article was updated with special investigation data from NHTSA and the number of vehicles with Super Cruise from GM.

Federal gig worker proposal tanks Uber, Lyft and DoorDash stocks • ZebethMedia

The stock prices of Uber, Lyft and DoorDash slid on Tuesday after the Department of Labor announced proposed changes to how workers should be classified. The prospective guidance is intended to “combat employee misclassification,” the federal agency said. Investors swiftly drove Uber’s share price down by more than 10% to $24.61, while Lyft’s tanked more than 12% to $11.22 and DoorDash’s slid more than 5% to $44.98 at the time of writing. The change could make it easier for contractors to gain full employment status if they are “economically dependent” on the company, although the scope of the rule would be limited to areas such as minimum wage enforcement. The proposal is subject to a public comment period, which runs from from October 13 to November 28. Uber, Lyft and DoorDash depend extensively upon so-called gig workers, who haul people and meals around on their behalf but do not receive many hard-won benefits of employment — such as employer contributions towards their Social Security and Medicare taxes. Despite pressure from labor organizers and some lawmakers, tech firms have fought to continue classifying their workers as independent contractors, arguing the status benefits their businesses, other local businesses and workers themselves. Efforts to alter gig worker classification in the U.S. include a recently rejected ballot measure in Massachusetts, which could have explicitly defined such workers as independent contractors. In California, an effort to secure benefits for gig workers — AB-5 — passed in 2019. A year later, app-based gig workers in California were excluded from the law via Proposition 22, which itself was deemed unconstitutional in the state in 2021. However, app-based gig companies have appealed that ruling and continue to operate in California under the guidance of Prop 22. (Every day is a winding road.) In a statement, Lyft claimed the proposal had “no immediate or direct impact on the Lyft business at this time.” The firm then reiterated its argument that classifying gig workers as employees would deny them independence and flexibility. DoorDash published a similar statement on its blog earlier today. Uber also cited flexibility in an email to ZebethMedia, saying the “proposed rule takes a measured approach, essentially returning us to the Obama era, during which our industry grew exponentially.” In stark contrast, groups such as Gig Workers Rising have long argued that independent classification denies gig workers “basic worker protections and rights,” such as unionization, living wages and benefits such as paid time off. While ride-hail and meal-delivery companies argue that changes to how workers are classified would threaten their business models, these firms aren’t profitable. Uber, Lyft and DoorDash have posted hefty net losses under the status quo.

Honda to create $700M EV hub in Ohio • ZebethMedia

Honda said on Tuesday it is spending $700 million to retool three of its Ohio plants to build electric vehicles as it aims to phase out gas engines by 2040. Batteries for the electric vehicles from Honda and its Acura division will be supplied by a joint venture with LG Energy Solutions. The automaker confirmed that the $4.4 billion battery plant will be located near Honda’s operations in Fayette County, Ohio, pending regulatory approval. The “new EV hub” will leverage Honda’s manufacturing and purchasing network in Central Ohio, emblematic of an industrywide scramble to bring battery production onshore to control supply and access to new battery technologies. So far, automakers and suppliers have announced more than $38 billion in investment through 2026 to boost battery production in the U.S., according to AlixPartners. That figure is likely to rise as the industry takes advantage of the $40 billion in tax credits included in the Inflation Reduction Act aimed at accelerating EV production. Last month, Ford broke at its $5.6 billion BlueOval City complex in Tennessee, where it plans to begin building advanced batteries for future Ford and Lincoln EVs, including the F-150 Lightning and a second battery-electric pickup, in 2025. Toyota plans to spend $3.8 billion to build a battery plant near Greensboro, North Carolina, for hybrid and battery-electric vehicles mid-decade. Panasonic, which supplies Tesla and other automakers, has committed to creating a $4 billion battery plant in Kansas – the state’s largest-ever economic development project – and is in talks for another $4 billion factory in Oklahoma. Honda and LG Energy aim to begin construction early next year and the mass production of advanced lithium-ion battery cells by the end of 2025. The joint venture has committed to investing an initial $3.5 billion, with total investment projected to reach $4.4 billion. Honda plans to ramp up production to sell millions of EVs in North America, a far cry from the 100,000 EVs and hybrids it sold in the U.S. last year, mostly the Accord Hybrid and CR-V Hybrid. The company, which plans to launch its first battery-electric SUV, the Prologue, in 2024, is currently co-developing models using General Motors’ Ultium platform but plans to begin producing vehicles based on its new Honda e:Architecture in 2026. The $700 million Honda has earmarked for re-tooling its existing Ohio factory footprint will help transition its Anna Engine Plant to build vehicle battery cases, Marysville Auto Plant to marry the battery modules and East Liberty Auto Plant to install the battery unit.  

Joby, Delta Air Lines to pilot home-to-airport eVTOL transportation • ZebethMedia

Electric vertical takeoff and landing (eVTOL) aircraft startup Joby Aviation is partnering with Delta Airlines to deliver “home-to-airport” transportation services to Delta customers starting in New York and Los Angeles — although it might be more accurate to call it a   “neighborhood-to-airport” service, one that will rely on a network of local vertiports to fly customers quickly and greenly to the airport. During a press briefing Monday, the companies were scant about certain details, like when exactly they hope to launch this service, how much it might cost and how many Joby eVTOL vehicles would be involved. However, they did share that the deal involved an upfront equity investment from Delta of $60 million, or about 2% stake in Joby, with an additional $200 million to come if certain unspecified milestones are met. While Joby will still run its own standard airport service in priority markets, the partnership with Delta will be mutually exclusive in the U.S. and the U.K. for five years following commercial launch, with the possibility of extending that period. The move not only allows Delta to offer customers a premium service, but also gives Joby a smoother route to commercialization. As part of the deal, Joby will operate the eVTOL service, but Delta will provide the airport infrastructure, one of the four hurdles Joby needs to jump in order to launch a commercial service. “That last piece is one of the reasons we’re so incredibly excited about the opportunity with Delta,” Joby founder and CEO JoeBen Bevirt told ZebethMedia. “Delta has invested billions of dollars in airport infrastructure and has really deep and important relationships with the airports in both New York and LA.” That said, Delta has yet to begin discussions on vertiport production with John F. Kennedy International and LaGuardia in New York or Los Angeles International, according to Delta CEO Ed Bastian. The other three hurdles, as outlined by Bevirt on Monday, largely revolve around certifications. Joby achieved one of them in May when the company secured its Part 135 Air Carrier certificate from the Federal Aviation Administration (FAA), which allows it to begin on-demand commercial air taxi operations. Before Joby can actually launch, the company must first also secure Type Certification on its aircraft and Production Certification on its production facilities. What can Delta customers expect? Getting stuck in traffic to and from airports can easily add several hours to what is often already a long day of traveling. Bevirt said a typical New York eVTOL flight to the airport could cut that travel time down to just 10 minutes. But first, they’ll have to get to their local vertiport. Although Joby has a partnership with Reef Technologies to convert parking garages in several cities into vertirports, for the partnership with Delta, Joby said it would initially start by tapping existing helipad infrastructure throughout NY and LA. There are three heliports in NYC — one on East 34th Street, another down by Wall Street and a third on West 30th Street. Los Angeles has a handful more that are mainly scattered around the northern suburbs of the city. When Delta customers go to book a flight, either through the app or online, they’ll have an option to also book a seat in one of Joby’s shared, five-seater aircraft to the airport. Joby also has a partnership with Uber that will allow customers to book Joby rides through the Uber app, so Bevirt said it was possible Uber rides to and from local vertiports might be included in the Delta service one day. Once at the airport, customers will continue with a streamlined Delta experience. The airline has been investing in digital identity technology, which will allow customers to move through the airport using facial matching rather than having to show a boarding pass or government ID. “We will be working together with the airport authorities to try to have as fast of a flow through security, ultimately, hopefully, on the other side of security and you can potentially even land on the on the tarmac itself but that’s kind of a future state,” said Bastian at Monday’s briefing. The vertiports won’t be Delta branded, but they will be located close enough to Delta lounges and terminals to give users “easy access into the Delta premium airport experience,” said Bastian. “A premium experience doesn’t necessarily have to translate to a premium price,” said Bevirt. “We want this to be a really compelling price point.” What that price point will be, however, is anyone’s guess. Since the partnership is still in its early days, Joby and Delta were unable to provide a ballpark cost for such a service. Bevirt said he hopes Joby can keep prices down by relying on cost savings provided by the company’s electric propulsion system, which has lower maintenance and operating costs.

GM is in the energy business now • ZebethMedia

General Motors is launching a new line of energy products to homeowners, businesses and utilities — the next step in an EV offensive designed to generate revenue beyond making and selling electric vehicles and aimed directly at Tesla. The product line will be housed under a new business unit called GM Energy and covers the gamut of EV ownership, including stationary energy storage, solar through a partnership with Sun Run and bi-directional charging technology to deliver power from the vehicle to their home or to the grid. GM Energy has also developed a cloud product that houses data and management software and helps tie all of these hardware products together and ultimately, balance out the power grid while providing an incentive to EV owners. The new business unit has also developed large-scale batteries for utilities as well as hydrogen fuel cells, Travis Hester, vice president of GM’s EV growth operations, told ZebethMedia in a recent interview. GM Energy is divided into three sectors covering residential, commercial and charging. Each sector carries the Ultium name, the same branding that GM gave to the next-generation electric vehicle platform and batteries of its new and upcoming EVs. The home energy system, which includes stationary storage similar to Tesla’s Powerwall product, will debut with the launch of the 2024 Chevrolet Silverado EV. GM did not release pricing information on its new products. The pitch to homeowners The Ultium Home line includes stationary battery called Powervault, an EV charger, solar through its partner Sun Run and a controller box that will link everything together. But GM’s big pitch to consumers isn’t just about how stationary storage can keep the lights on at home during a blackout or even how solar energy can charge their EV. Instead, GM is also touting a system that will allow consumers to sell energy from their EV and stationary storage batteries back to utilities during peak, high energy consumption periods. The business unit already has a pilot project with Pacific Gas and Electric Company that lets residential customers use their compatible EVs along with a bi-directional charger, as backup power for essential home needs during short-term power outages. The companies expect to expand the vehicle-to-home service in 2023 to a subset of residential customers within PG&E’s service area. Hester said GM also has a partnership with an unnamed real estate developer in California for a 3,000-home development that will have a pre-installed charger, Powervault, solar and controller box to links them all together in every residence. The pitch to commercial businesses Image Credits: GM The Ultium commercial line includes much larger megawatt-sized batteries for energy storage as well as a cloud services product that houses data and energy management software. The megawatt storage battery, similar in some ways to Tesla’s Megapack, already has garnered interest from commercial business and utilities, according to Hester. About 10 companies have signed on for either pilot programs or to buy the batteries and accompanying software. The commercial line is close, but not identical, to what Tesla has been selling. GM Energy is also marketing fuel cells, specifically selling the electrolyzer used to make hydrogen that then goes into the fuel cell. This fuel cell product can be sent into the stationary storage battery or directly into the grid, Hester said. The final piece, called Energy Services Cloud, is what Hester describes as the brains of the operation. This hub of GM Energy’s products can be used by residential, fleet and commercial customers to manage their energy consumption through software applications. The cloud product, which can fold into a utility’s software, is a conduit of information between customers and the grid. “It will help us understand and be able to manage energy rates on a per state basis and just understand what blackouts or low energy supply issues we are going to have,” Hester said, adding it also helps manage customer behavior. For instance, the cloud product can calculate spare capacity and then communicate to consumers through an app or web browser to plug in their EVs. The GM Energy cloud service and software can then take little pieces of consumers’ battery capacity (for those who sign onto this) and aggregate that together and offer it up to utilities. The EV owner would then receive payment from the arrangement, which could be applied to a car payment or just taken as revenue, Hester said. “So this is a very, very powerful tool that we’ve been building,” Hester said. “This energy cloud is going to help us with knowing how and when to talk to a large amount of customers. If we want to go access a million customers in a few minutes, we have to have ways to go do that and then to be able to talk to the utilities about what energy they need, and be able to manage behavior en masse.” Some residential customers are already enrolled in an EV charging management program through their utility that uses the Energy Services Cloud. GM Energy is also working with Con Edison, Graniterock and New Hampshire Electric Cooperative (NHEC), according to the automaker. Power balance Image Credits: GM The global automotive industry is in the midst of a shift away from internal combustion engines towards electrified vehicles. Against that backdrop, the problem of an aging, overloaded power grid looms. This isn’t just a problem in developing countries. Power outages in the United States have become increasingly common. On average, U.S. electricity customers experienced just over eight hours of electric power interruptions in 2020, according to the U.S. Energy Information Administration. It’s the highest figure since the EIA began collecting electricity reliability data in 2013. And while researchers note that the full economic cost of big power outages can be nearly impossible to calculate, the Department of Energy has calculated U.S. commerce loses $150 billion annually from power failures. A lot of people mistakenly think EVs are the problem that will create issues for the power grid, Hester said, noting that California provides a good example.

Rivian voluntarily recalls 13,000 EVs for a potential loose fastener • ZebethMedia

Rivian informed customers Friday that it is conducting a voluntary recall of all 13,000 vehicles it has delivered so far due to a loose fastener. The fastener, which may not have been sufficiently torqued on a small percentage of vehicles, connects the front upper control arm and steering knuckle. This can cause loose and vibrating tires, wheel tilt and loss of steering control. The company’s voluntary recall is expected to be posted on the National Transportation and Safety Administration on Saturday. Rivian sent an email to customers Friday evening. Rivian said that as of September 28, 2022, it had become aware of seven reports potentially related to this issue that had accumulated over the production of Rivian vehicles. The company said in a statement: The safety of our customers will always be our top priority, and we are committed to fixing this issue on any affected vehicles as quickly as possible. We will begin immediately contacting affected customers to schedule appointments for inspections and repairs if needed. We will make any necessary adjustments free of charge at one of our service centers. The repair takes a few minutes to complete, and with customer collaboration, we have built out the capacity to complete the needed action in as little as 30 days. To date, we are not aware of any injuries that have resulted from this issue. Rivian founder and CEO RJ Scaringe also emailed customers saying that while the company has only seen seven reports potentially related to this issue across our fleet to date, “even one is too many.” “It’s important not to minimize the potential risks involved and why we are volunteering to conduct this recall,” Scaringe wrote in the letter. “In rare circumstances, the nut could loosen fully. I want to reiterate that this is extremely rare, but it does reinforce why we are acting with such urgency and caution.” If owners experience excessive noise, vibration or harshness from the front suspension, or a change in steering performance or feel, they should call Rivian immediately, Scaringe said, adding that if customers don’t feel safe driving the vehicle a Rivian employee will either service it as a house call or come pick it up. If a replacement part is needed, Rivian said it will offer loaner vehicles free of charge. Customers can call 855-RIVIAN5 (855-748-4265), you schedule a service appointment and a Rivian employee will come to the customer. They can also bring your vehicle to a Rivian service center, no appointment necessary. The company said it will also have pop-up locations in high-density areas for additional coverage as well.

Elon Musk’s X app for ‘everything’ might be a non-starter in the US • ZebethMedia

As Elon Musk again nears a deal to buy Twitter, speculation is resurfacing around how the billionaire plans to transform the social network. Musk’s tweet this week offered a clue: “Buying Twitter is an accelerant to creating X, the everything app.” While Musk didn’t elaborate on what X would look like, many reckon he’s aspiring to replicate the success of WeChat, which over the past decade has virtually become the everything app in China. People use it to read the news, hail rides, book doctor’s appointments, pay taxes and carry out a myriad of other daily activities. That perhaps is indeed Musk’s idea given he’s full of praise for the Tencent-owned messager. In his first town hall with Twitter staff in June, the Tesla founder talked up WeChat as a possible vision for the American social network. And, you know, if I think of, like, WeChat in China, which is actually a great, great app, but there’s no WeChat movement outside of China. And I think that there’s a real opportunity to create that. You basically live on WeChat in China because it’s so useful and so helpful to your daily life. And I think if we could achieve that, or even close to that with Twitter, it would be an immense success. WeChat has long been celebrated in the West as one of the greatest inventions that came out of the Chinese internet. And Tencent’s investment in Tesla has probably given Musk an insight into the Chinese internet giant. But is the WeChat model really a desirable product for the U.S.? The exact WeChat features that impress Musk are also the source of criticisms of the app. The all-in-one messenger has in effect erected a walled garden, critics say, where e-commerce transactions only take place over its payments app and information consumed by users is either published within WeChat’s infrastructure or third-party services backed by Tencent. Links from Tencent’s nemeses, like Alibaba and Douyin (TikTok’s sister in China), were inaccessible on WeChat until Beijing’s recent anti-monopoly movement began to tear down the thick walls. A super app might bring convenience to users as they hardly need to leave the platform — which in turn helps drive revenues for the company — but the model can stifle competition and rule out user choices. Putting these concerns aside, could Musk replicate WeChat’s success in the U.S. after all? Unlikely, at least not WeChat in its current state. The messaging app thrived under conditions unique to China, for better or worse. Before diving into what WeChat has done right, let’s not forget that its core as a social messaging app makes it fundamentally different from Twitter, which is a social media platform. The fact that it is a chat app means it’s highly sticky. With over 1.3 billion users, WeChat is the ubiquitous messenger in China, while people go on Twitter mostly to consume information rather than talk to people they know in real life. WeChat’s unfair advantages WeChat didn’t start from scratch. Tencent was already the social networking king of China with QQ, a messenger akin to ICQ that took off in the PC age. Not long after WeChat launched in 2011, Tencent opened up QQ’s enormous social graph to WeChat, giving people the option to add QQ friends on WeChat. If Musk built X from scratch, he could play around funneling users from Twitter to the new platform. But, sticking with the WeChat analogy, it would be competing in a market crowded with WhatsApp, Messenger, Telegram and others. WeChat is many apps folded into one, and messaging is a gateway through which people come to discover the plethora of features it’s been adding over the years. One of its early killer features is a content publishing feature called Public Accounts. When Public Accounts launched in 2012, Weibo and blogging platforms were the two places for China’s netizens to share their voices. The former had a 140-character limit like Twitter, while blogs were popular mostly among Chinese elites. Built off an everyday chat app, Public Accounts soon attracted everyone from economists to small business owners who wanted to propagate ideas. By the beginning of 2021, 360 million users were reading articles through Public Accounts. Any organization that needs to produce content is on WeChat, from state media to fashion brands. The online media landscape in the U.S. is a lot more diverse. People read news on news apps, seek thought leadership on LinkedIn and encounter brands’ stories through blogs. The majority of businesses in China might not have a website, but they probably maintain a WeChat Public Account. Over time, Public Accounts has morphed into a digital infrastructure for businesses that’s not unlike Shopify. That was made possible with the launch of WeChat Pay in 2013. While America spent the past decade improving magnetic card-enabled transactions, China never had widespread credit card adoption and went straight from paying with cash to mobile payments using QR codes. WeChat Pay quickly attracted users in droves by becoming the default payment option for a few popular apps, including ride-hailing upstart Didi and food delivery platform Meituan — which are both backed by Tencent, one of the most prolific corporate investors in the world. Were Musk to start a new payments solution that follows WeChat Pay’s playbook, he’d have to form alliances with other internet giants to drive adoption. WeChat’s role as the backbone for e-commerce has only become more omnipotent over time. In 2017, it began letting developers build lite apps that run inside WeChat. Businesses that used to hawk products through static Public Account pages could now run WeChat-based stores that have all the basic functions of an e-commerce app. Pinduoduo, the social commerce startup that grew to rival Alibaba in half a century, took off as a mini app thanks to its seamless integration with WeChat’s social features. Imagine you could browse Amazon on WhatsApp, share product pages with your contacts and make a purchase without ever leaving the messenger. After

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