China EVs & More

Episode #70 - Unpacking the NIO ES7 unveil, Geely's new brand Radar, BYD at CES 2023

June 20, 2022 Tu Le & Lei Xing
China EVs & More
Episode #70 - Unpacking the NIO ES7 unveil, Geely's new brand Radar, BYD at CES 2023
Show Notes Transcript

Tu and Lei start out the conversation with a brief summary of May’s sales and agree that things are looking better but that its still a fluid and delicate situation. 

Tu and Lei then move on to the discussion about the NIO ES7 and Lei poses two questions to Tu about his preferences if he had to choose between certain new vehicles. They spend a good deal of time discussing the ES7, how NIO is doing overall, and what they expect and hope to see from NIO moving forward. Let’s just say that they define success for NIO as having well over 20K units/month in sales by the time 2024 rolls around.

Tu moves over to some of the events that took place that he wanted to highlight. Lei highlights Geely introducing its new pickup brand Radar. They spend a few moments discussing Geely and move on to the announcement that Voyah will be launching their products in Norway and close out the pod with BYD confirmation that they will be attending next year’s CES. 

CEM #70 Transcript
Recorded 6/16/22


Tu Le:
Hi everyone, and welcome to China EVs & More where my co-host Lei Xing and I will go over the week's most interesting and important news coming out of the China EV, AV and mobility sectors. What Lei and I discuss today is based on our opinions and should not be taken as investment advice. If you enjoy this room, please help us get the word out to other enthusiasts and tune in again next week. 

My name is Tu Le, I am the managing director at SinoAuto Insights. A Beijing-based consultancy that helps organizations bring innovative and tech-focused products and services to the transportation and mobility sectors. I write a free weekly newsletter that we pull many of our discussion topics from, and you can sign up for it at sinoautoinsights.com, which I encourage you all to do.

Lei, can you please introduce yourself?

Lei Xing:
Good morning. I am your co-host Lei Xing, former chief editor of China Auto Review. This is episode #70. Before we get into NIO “half day,” we can call it a NIO “half day,” not a NIO “full day.” This is our primary topic today, but there's others. Let's quickly recap on the CAAM May NEV sales just very, very quickly when we got off last week, this was announced: basically 2 million units, NEVs in the first 5 months. So I’m just going to say the first half is going to be 2.5 and second half it’s going to be more than 2.5 and we get to 5.5. That's the prospect. Simple number crunching.

Tu Le:
Reminder for everyone, 2021 number came in at around 3.4 million units.

Lei Xing:
Yeah, so let's say 2 million more. That's basically what we're looking at,

Tu Le:
During a supply chain crunch and a COVID outbreak.

Lei Xing:
Yeah, it's so far, it’s looking good, June is progressing.

Tu Le:
Things are looking up for sure.

Lei Xing:
Yeah, nicely. We don't seem to be having at least, I can't say we're going back to April, but we said it's going to take the entire Q2 and as we've seen some of the chatter, Tesla is doing its thing right, it’s toward the end of the Q, and that means…

Tu Le:
So Tesla is back up to 100% production, utilization, so.

Lei Xing:
Pretty much, and going into that stretch, right? Today is the 16th so two more weeks left in June.

Tu Le:
That took public and private cooperation. Tesla did everything they could, the Shanghai local government did everything they could. I think they need to work together very closely moving forward in order to keep that machine going.

Lei Xing:
Yeah, so the latest rumor, I think it's been denied, I think that Tesla was going to reduce the rear wheel drive version of the Model 3 from like RMB270,000 to RMB220,000.

Tu Le:
Those are just trial balloons, right? They're just seeing what the reactions are going to be, right?

Lei Xing:
They can certainly do it, but it will be interesting because everybody is raising prices, as is Tesla, right? They just raised prices of everything in the U.S. today and all their models by as much as what $6,000.

Tu Le:
They're likely seeing what's out in the market here. They're likely seeing maybe some softness in their demand. I think that they're playing defense a little bit here in China. They don't have to do that in Europe and the U.S. yet. 

Lei Xing:
No. So that's the chatter. And that happened the night of the ES7 reveal.

Tu Le:
Stealing thunder, 

Lei Xing:
Stealing thunder, but anyways, back to our main topic today, NIO ES7, the updated 2022 “866” (ES8, ES6 & EC6). Now we're all calling this, they completed the “866” and the “757.” So six models now in place, 4 years, pretty much, 4 years after the ES8 started deliveries, and that was June 28, 2018. I remember it very clearly. So kudos. Before we get into to the comments, I wanted to ask you two questions.

Tu Le:
Bring them on.

Lei Xing:
No. 1: if the world had only the “866” and “757,” which would you choose?

Tu Le:
I would say, so this is me still being still believing that I’m young and no family kind of thing which I’m not. I'd love to have the ET5 right? Little sedan to throw around, around town, quick, good looking. I like the ES7, because it's the newest vehicle out there, and it has the new design language on the front end with the shark nose and everything. But I think the ET7 is too big. And so I think I would go ET5.

Lei Xing:
Well ET5 is their cheapest model of the six starting RMB328,000. My answer would be the ES7, simply because it’s the latest and the greatest and I like it in terms of a size, ES8 would be the last on my list and ET5 also would be my second.

Tu Le:
But you're much more mature than I am. I'm like pretty immature.

Lei Xing:
Ok, thank you! You know in terms of size. I think if I were to choose the sedans, I would choose the ET5, also because of the same reason.

Tu Le:
You know I got to say, Lei, the ET5 has to be eating into the MIC Model 3, right? It's got to be eaten into sales or orders, at least, right? 

Lei Xing:
Also a big reason is, if I was on the market, the ES7 would start deliveries, what, already end of August? is that correct? 

Tu Le:
Yep. 

Lei Xing:
So from launching, from revealing to actually starting deliveries only 2 months? I’d be really happy. So that's number one. The second question, if the world had only the ES7, the JIDU ROBO-01 and the Li Auto L9, which is revealing next week, we’ll talk about it next week, which one would you choose?

Tu Le:
So I'm leaning towards the ES7 or L9.

Lei Xing:
I think the L9 would be perfect for your family.

Tu Le:
Yeah it seems big. That's the only really apprehension I have. But hopefully, my friends at Li Auto will allow me to have a look at it in July sometime. I'll go visit them and just in Shunyi up in Beijing and hopefully get the touch and feel maybe drive it around a little bit. I'm looking forward to that, but we had talked about this last week where now we're looking at actual design, we're looking at features. We're not even talking about range, we're not talking about anything else. So these guys have really matured over the last just 3 or 4 years, right? There was so much attention that the JIDU ROBO-01 unveil got. Congratulations to that team for making it a global launch. The ES7, a ton of attention globally. These guys are, people are waking up, finally, right?

Lei Xing:
And we are also seeing that, remember, NIO is now pushing into those four additional European markets, and ES7 will really be a nice sizedpositioned vehicle for those markets.

Tu Le:
So let me throw out some specifications here. So the ES7 length wise is 4,912 mm. The ES6 is 4,850 mm, they're both five seaters. Footprint wise, they're virtually the same and the ES7 slots in between the Model Y and the Model X, so in the market, the ES7 fits perfectly. But in NIO's portfolio, they're really trying to thread a needle. And I really do see, although the ES7 is about a RMB100,000 pricier than ES6, I do see a ton, I won't say a ton, that's probably exaggeration, a decent amount of cannibalization going on. So I don't know, what do you think.

Lei Xing:
I've seen some calling the ES7, the “ES6 Pro,” so basically, a much upgraded version of the ES6. But I’m not sure I agree with that, but I think prior when we talked about ES7 many times, I said it was a nose job of the ES8. When this thing came out, I think I was wrong. It turned out really nice. I think it's now the flagship of NIO because it is the latest and the greatest, right? It's got this Banyan digital, what the smart system. Whereas the other ones they talked about is the Alder, right? And all the perks, whatever is included. But when you talk about cannibalization, I think William Li and Qin Lihong, I think they've kind of responded to this. Maybe, I know William did in the previous earnings call that he doesn't believe or put it this way, that these six models are positioned differently that they'll address different customers.

But on the other hand, I think what you're saying this cannibalization is that we would expect the NT2.0 models to take much more volumes going forward compared to the “866.” My personal conclusion of this, NIO “half day” yesterday, was two things: one, and this might be overlooked a little bit because everybody was talking about the ES7, is the upgraded “866” that you, that they are upgraded to the Alder system, that you pay, I think RMB9,600. This is mostly for the cockpit, right? And plus 5G, you pay a little more. And this is something that I think it's often overlooked because what you do with existing customers, people who are owning older models, and how do they benefit? I think NIO has solved this dilemma by not only OTA on the software side, but right, on some of the hardware.

Tu Le:
And this is where they get you on the recurring revenue. Because if you have an older ES6, they're like, hey, upgrade and you pay $100 a month and guess what. Now, physically the car is a little bit older, but guess what, you have the latest software update.

Lei Xing:
And the other thing to me was this flagpole on the ground that the ES7 would be the glass ceiling for models priced in the RMB400,000 to RMB500,000 range, ICE or EV, this is what William said. So it's almost like poking at the L9, which is going to be right in that price range.

Tu Le:
It is for sure.

Lei Xing:
When it reveals next week. So.

Tu Le:
If you watch those bread crumb videos between the ES7 and the L9, they're both targeting. It could be the exact same family that's in both cars, in both videos, right? There's a little kid, there's a young a couple going camping or whatever, right? It's like.

Lei Xing:
Yeah speaking of camping, I think we're going to talk about that a little bit, but right, we're jumping ahead of ourselves. Let's compare, if we compare the L9 and the ES7, the way these models addressing consumer or customer need in terms of entertainment, infotainment, what's happening in the car? I think it’s, are a bit different, right? L9's got this whole family. You can connect your what, Nintendo Switch,  this type of thing. Whereas NIO is more tech-focus, let's say, AR glasses, right? Where you can watch movies.

Tu Le: 
Yeah the Panocinema.

Lei Xing:
So it's slightly different and also it's a five-seater, it's a mid-to large-size SUV whereas L9 is almost like a full size SUV so I thought that was, putting that flagpole on the ground was kind of…

Tu Le:
That wrinkle with the tow hitch, right?

Lei Xing:
Yeah, I tweeted that and some someone tweeted back and said don't dismiss that. And I later realized that maybe it's not a pandemic play. I don't know, what's your take on this whether this will catch on. Maybe it already is.

Tu Le:
Yeah, I think it's something that, first of all, it's not a huge thing, right? It's more. The physical tow hitch is not a big deal, but how does it affect range? How does it affect everything else about the car? The power of the car? Because it didn't really get into that. And if we look over at the U.S., the F-150, one of their biggest challenges was making sure that a 5,000 lb F-150 that was towing a boat or whatever, still had enough range that was acceptable to consumers, right? And I think the concept of towing things in China is still very new. I don't think it's a fad, because you don't see a lot of campers, but people don't sell a lot of campers. So it's a chicken and the egg thing, right?

Lei Xing:
Yeah, but people are doing a lot of camping these days, because they can't go to the normal sightseeing because of COVID.

Tu Le:
I'll give you a quick anecdote, Lei. Up in Shunyi near the Wall there is a camp area where there's actually glamping, where there's these campsites that have these like four-star tents and stuff like that. And so we are starting to see that more, at least I am, and it could be triggered, it is, I will say, or has been triggered by the pandemic, but that doesn't mean that it won't grow because people do want to be outdoors. And let's not forget Lei, that when you lived here in 2014, 2015, the pollution was bad. You didn't want to be camping outside. Now in Beijing, it is actually a feature, right? So this is new, full stop.

Lei Xing:
I know these camping sites or campgrounds have always been there. There's one, I think there's one if I remember at quite a few of the Great Walls outside of Beijing, but they're always empty, they're always for parking. So now it may be different and because staying in the hotels right now is not something that's convenient nowadays. So people, a lot of DIYing.

Tu Le:
And I’m going to go back Lei, to like the old school U.S. marketing. These companies, these NIO, Xpeng, right, where, let's watch a movie in the car, let's have a sleepover in the car. They're creating features and they're creating and pushing these things, right? It's not. So maybe they're creating supply in order to create that demand. So this is, to me, traditional auto making, right? Because it's very surprising nowadays, but William Li saying, effectively saying we're launching this today and tomorrow you can buy it because between now and August is nothing, right. Normally. The ET7 took a year, over a year to get to market, right? So I don't know how much timing or the pandemic had to do with the timing. But yeah, the tow thing is a curiosity right now, because there's just not a lot about known about the capabilities, the ES7 and how much it can tow for how long. But it's an interesting idea.

Lei Xing:
The tow thing, retractable, I thought that was neat, because I’ve never seen that before, that hides under the and comes out.

Tu Le:
Yeah, that just seems like a night, that just seems like a nightmare from an engineering and quality standpoint, though, right?

Lei Xing:
Oh really,because I don't see that I see all the tow hitches here in the U.S. right, they just stick out. They're never hidden. So this thing is kind of interesting.

Tu Le:
But the bolt, the bolts that hold those tow hitches in on these cars in the U.S. are like the size of your fist, right? And so think of a boat being towed on that ES7, and then the mechanical thing doesn't work or something like. It could feel like.

Lei Xing:
I think this is also NIO being sensitive and addressing the current, whether you want to call it a fad or of what people are doing right now. So a few days ago, they launched this bi-directional charger, which you can bring and make your car a power source, right? You can charge coffee makers, things, electronics, and charge other cars.

Tu Le:
Ford is leaning into that in the U.S.

Lei Xing:
Yeah so I think this is NIO being sensitive and addressing it. And that means they're on top of the market, on consumer habits. 

Tu Le:
Which isn't surprising because of their App.

Lei Xing:
Yeah. The only thing that was probably also on the chatter was this 150 kWh hybrid battery keeps coming up yet it’s been 1.5 years since this was announced at the NIO Day 2020 which was held in January 2021. They've put these up on the slides on the PPTs, but it's never been talked about. I know this is going to be available in Q4. So I think a lot of people are still looking forward to more on what's going to happen there. So this basically now is 75 kWh and 100 kWh battery packs. That's the primary.

Tu Le:
Just so because we're emphasizing and talk about NIO, because they just launched the ES7, but the reality is the ES7 starts at $70,000. So it's not going to sell 20,000 units a month. The price point is pretty high for the Chinese consumer, the price point is pretty high for the U.S. consumer. So we have to really just create some relative understanding of how much demand will be for. It's going to sell really well, I think, but it's not going to sell in the hundreds of thousands of units.

Lei Xing:
Here is where the scrutiny comes in, is okay, NIO, now you have six models already, either on the market or available to oder.But we would like to see, right, first half is pretty much over, but there's a lot of people, I think that are throwing expectations of what can NIO do on a monthly basis once these models get into a good production rhythm? And can we expect the contributions so that we talk about the 20,000 threshold? Even the 30,000 threshold?

Tu Le:
I was just going to say, if they're not in 25 by the end of the year, beginning of next year, then you worry.

Lei Xing:
My personal expectation is NIO does 20K at the end of this year, if they can do that, I think that's pretty good, but right, they have to get consistently above 10K first, if we're talking about the volumes and that they are capable, I think they are capable because right, they got the products.

Tu Le:
We touched on this last week, Lei, and I don't want to beat a dead horse. But to me, I am in complete agreement unless there's some quality issue that we’ll find out in months later, the product portfolio is strong. Right now, it's very strong, but I think operationally, they really do need to tighten up, because they're having production issues, right? Because what's his name, Steven Feng? He said that they had the largest order book in May, right? So can they produce, I think, and can they manufacture those?

Lei Xing:
This is why I asked you those two questions earlier, because those are the questions that NIO will have to face, right? This is what the consumers are going to be deciding on, right? Because of you have more diverse products, but then again, right, you're going to face this, whether you want to call it cannibalization or something else that the customers are now starting to, let's say, for a Li Auto, I know it's difficult to compare apples to apples, but it's just one car with all the features, there's nothing else to think about. Is that easier on the customer side than what NIO is doing? I don't know.

Tu Le:
Let me bring the scenario up, Lei, because on the sale side and on the distribution side, what Li is doing is much easier because think of if you had 1,000 retail stores in China, you're a NIO and you had 1,000 retail stores, in order to really try not to cannibalize your products, you need to, you as a NIO needs to really train each and every salesperson or any person that touches a customer. And what the subtle differences between the ES6 and remember, the audiences, a young mother, a woman, or a man who might not be that savvy when it comes to automobiles. So training for sales and customer service that becomes really complicated for NIO. And for Li Auto, it's very simple because you have two cars. One is newer, one is older. This is the scenarios and the features, and the use cases that the L9 is ideal for. This is what the Li ONE is ideal for, right, and, so to think of it that way, it's not just that, is it easier, is it harder? You need to be all around, just more on top of things, right?

Lei Xing:
Yeah, I think probably a good way to describe the current kind of the predicament for NIO is cloudy, cloudy with sun peering in, but that cloud still shrouds NIO, and they're done with their product introductions. We don't know what's coming next. We know the mass brand is coming next. But any other products, if we look forward to NIO Day 2022, what are they going to announce? What do you think?

Tu Le:
That's the thing. I because if you were Li Bin, would you want to announce the mass brand on NIO Day? Or is that going to be treated completely separately, right?

Lei Xing:
The tradition of the NIO Day is a new model is announced. We can expect that to happen again this year, and based on the cadence that the mass brand starts in the second half of 2024, I think there might be a chance that we hear about the mass brand at the NIO Day in December.

Tu Le:
I was thinking October, November, they might have a separate event for the mass brand or something, but.

Lei Xing:
the only other possibility is this MPV that was once rumored, that the ES7 was, or they have another codename or model name.

Tu Le:
Let's hope that they don't get super lazy, right? Because the part sharing bin between the ES6, ES7, and EC6, ES8, that has to be pretty substantial, right? Maybe not all the interior parts, but you got to leverage that stuff. And so the investment needed to build a new platform, new brand, new vehicle is very high. So the MPV, the only platform that would make sense is probably the ES8 platform, right?

Lei Xing:
But anyways, if you want to drive the volumes into much higher ground into, let's say, the 500,000 units capacity that was reported announced for the mass brand? NIO is not going to get those volumes done with this existing six products. They have to look down market, which is the RMB200,000 range that William talked about.

Tu Le:
Which is the most brutal market, brutal segment in the market.

Lei Xing:
Which is what the JIDU ROBO-01 is supposed to be in.

Tu Le:
Not only JIDU, but Xpeng, BYD, William they are targeting Tesla Model 3, right, so.

Lei Xing:
So I personally don't expect with the six current models that they can get to a step, they have this step change in volumes. They will have to get the mass brand, and they have to get it right. So I guess the conclusion is, there's bit of both good and bad for NIO, right, if you look at it.

Tu Le:
If I take a step back and look at NIO's portfolio, just on paper, I’m pretty worried. If I’m the Germans. I'm pretty worried about that.

Lei Xing:
Speaking of the Germans that Audi rumored to sue NIO for the ES8 and ES6. I just think that's ludicrous, it's a bit ludicrous. I mean the ES8 has been on the market for 4 years. What have you been doing? But seriously, I think in China, the model names they're all registered, I think the issue might be outside of China, especially in the German market. I don't know what the exact lawsuit will be, but.

Tu Le:
I think it's trademark infringement.

Lei Xing:
Yeah, I don't know. It's sounds stupid.

Tu Le:
Using the number, using the eight versus the six versus so.

Lei Xing:
Yeah, it sounds stupid like it, it's almost like you're becoming a hater, then you've made it.

Tu Le:
It's very petty, right? But like I said, the ET5, if I was BMW 3 Series team, I'd be like, wow.

Lei Xing:
But I mean NIO’s basically, they've entered a brand new face that they now just have to execute, because there's right, it's all here, it's all been announced, and now let's get to work.

Tu Le:
And you know me, I always scrutinize the operation side of things because it's close and near and dear to my heart. And I just think they're falling down a little bit. If you can't produce 10,000 units a month, to sell, get them out the door, you need to fire people, or you need to really, really emphasize, just getting enough parts, doing whatever you need to do, beg borrow and steel. Because, like you said, 10,000, that's the minimum bet to get into this main room. And they're not doing it.

Lei Xing:
So hopefully it'll be better, June and later on.

Tu Le:
The other thing I wrote a quick note here is the difference between the JIDU ROBO-01 unveil and the ES7 seven was very stark, right?

Lei Xing:
Speaking of that you can basically, I mean how NIO and William Li presents these product launches or in introductions. It's all the same, right? You would expect how, it's like an Apple launch event. You would expect Steve Jobs with the turtleneck and the jeans and the whole setup, that's in itself has become a branding for NIO. Nobody else has coming to even close.

Tu Le:
As a westerner, I find the music and some of that stuff, a little cheesy, but you're absolutely right. That's what, it's a signature thing now, right?

Lei Xing:
Yeah it's a signature, William, he just walks onto the stage and start talking. No fuss, right? He says this event is going to be 45 minutes, who does that, whereas JIDU is obviously coming from tech, Baidu, AI, avatar, metaverse. They have to try something new, right?

Tu Le:
It's not wrong. It's just a different approach. And again, remember, NIO had those really amazing pictures of the interior and really beautiful pictures of the ES7. Whereas JIDU was really okay, this is digital first guys, and it was in your face, right?

Lei Xing:
Yeah, because the other thing was just before we started our good friend Ash from Geely was teasing us on the Rardar brand, which we’ll see more of later today. They're launching this, pickup, EV pickup brand. So just more brands coming.

Tu Le:
Geely has a lot on their plate.

Lei Xing:
Yeah, it's every other day there's some news and Geely buying into Meizu, right, the smartphone. Geely, one of the Geely subsidiaries taking the majority stake in that smartphone company. Every other day, there's some Geely news going on.

Tu Le:
I think management teams are really, really spread thin on some of these companies, because they're barely to me, they are barely able to stay above water on the current projects and launches and unveils and initiatives. So pickups, if you're talking about new ideas, new opportunities, the pickup market is in its infancy. Here in China, are they planning to compete against a Great Wall, or it's I think of Rivian, I think of F-150.

Lei Xing:
Supposedly the Rivian camp rather than the Great Wall camp.

Tu Le:
Yeah, which, again, Geely, the only real high-end brand, they have a ZEEKR, right? I don't, really consider, do you consider LYNK & CO premium or luxury?

Lei Xing:
Yeah, a bit, a bit. But I think Geely just wants to be in every segment that you can think of, right? Trucks, buses, they're doing that. Motorcycles, smartphones, satellites, supersonic trains.

Tu Le:
What they need to do is they need to take a look at the lessons from the U.S. automakers, because GM had a dozen brands in a past life. Pontiac, Oldsmobile, Hummer, they're all gone. Ford had Mercury, Ford had a Mercur, they had a bunch of brands too, and they're all gone. Remember, when once we go digital, it's not these physical cars that are going to represent the brand. It's going to be the features and it's going to be the services and it's going to be the connectivity and the user experience. So how does that work? And how do you create a distinctiveness between each of these brands? It's an amazing project to have if you're an automaker. But it's just going to be super challenging if you have 20 brands that you need to promote because there's a lot of infighting if you have $1 to spend on marketing how you divide that up 20 ways, right? So that's the challenge the U.S. automakers ran into.

So I will take over for a minute to talk about a couple things that I thought were interesting this week. First of all, congratulations to Mujeeb Ijaz, the Our Next Energy (ONE) team. 

Lei Xing;
BMW right?

Tu Le:
Yeah. So Mujeeb Ijhaz is the founder of Our Next Energy, or ONE. They are a battery tech startup that is trying to mass produce a dual chemistry battery pack. They announced this week that BMW has signed up to be their customer, huge win for them. And maybe on this next one Lei, maybe you can throw some color on their, VOYAH, has announced that they're going to Norway, right?

Lei Xing:
They opened up the first overseas VOYAH Space in Oslo.

Tu Le:
Do you see VOYAH…

Lei Xing:
VOYAH I think has been one of the surprises.

Tu Le:
Can you tell our folks who VOYAH is or where they come from.

Lei Xing:
Yeah especially from the point of view that this is a state-owned startup. They're from Dongfeng Motor Corp. and this is aka Project H when it was still in stealth. This was only announced in 2020, the brand was announced in 2020. And they're going with the EREV route so same as Li Auto, but they also have EV versions of the VOYAH Free, the SUV, and they also recently announced the MPV, right, the dreamer.

This is one of the state-owned startups which we actually had an episode that specifically talked about these brands that are started by state-owned companies. So VOYAH, ARCFOX, let's say AVATR, you know these type of brands, right. So actually they're also very premium, the RMB300,000 and above priced vehicles. And it looked like they were doing pretty well. So they also the way they're going to Norway is working with this, import & export company, I think within Dongfeng if I remember correctly. So again, right, this is you have to have that aura, this type of brand position, the way it is, that we're new, but we're also global. So we're going to be in Oslo, we're going to be in other markets.

Tu Le:
The fact that the matter is Lei, and the other company. Did we mention this last week HiPhi announced that they're be going to Europe as well? But a lot of these companies, these Chinese EV companies they're getting bullied because there's this mad rush to enter Europe. Most of them aren't prepared to do it. They have to because everybody else is doing it and the main catalyst is probably Tesla opening Berlin Giga, right? And they don't want to be shut out of the entire market of Europe. So like you said, and we think there's only going to be really a handful, 6, 7, 8 companies, maybe that are going to be fairly successful from a volume and longevity standpoint in Europe, although almost two dozen have either entered or announced that they're entering, the Chinese EV Inc. companies anyways entering Europe. Not all of them are going to be successful. So I think each are trying to carve out a niche and they're being forced to go earlier than they want because of all these other companies have already made announcements, right?

Lei Xing:
So in those camp, MG will be the OG because they're already selling, like, I think if I remember correctly, 50,000 units, including UK last year, all EVs, either plug-ins or BEVs. But MG is a special case, because MG is, was or is still a kind of a Chinese British brand.

Tu Le:
It definitely has British roots. We can't forget if we go lower end, which many of these brands are, Xpeng and we talk about it here about China. Where does that leave the ID. series? So I think that's really important to kind of keep an eye on as well because up until now, the Renault ZOE, the ID. series have really had unfettered access to the markets because they build locally. And now that Berlin Giga’s online, a dozen, two dozen Chinese EV companies have announced and will be selling first in Norway, but eventually in 2023 and beyond other European markets, it's going to get brutal over there, right? And remember the main catalyst of this, we always have to remind people is that by 2035, the EU wants to eliminate the sale of petrol and diesel fueled engines. So the acceleration is only going to get higher or more. So and representing Vietnam EV Inc, VinFast.

Lei Xing:
That it's the only company. There's no other.

Tu Le:
Yes, but 99 million people versus 1.4 billion man, you got to give them some credit, right? They've announced their opening 50 locations in Europe. They didn't put a book end on it as to when, but they're coming. So the founder of VinFast is the founder of company or conglomerate called VinGroup. They do real estate, they do, nearly do everything. In Vietnam, he's worth $6.2 billion, he's the richest person in Vietnam. That's not enough money, because he's not liquid number one and number two, that's just not enough money to enter a dozen markets, including the U.S., get a manufacturing facility opened in North Carolina. So this IPO later this year is going to be lynch pin, even if he raises, even if VinFast can raise up to $2 billion on this IPO, which seems a bit like a stretch.

Lei Xing:
Yeah, I have coined the term “VinFast and the Furious,”

Tu Le:
Because they're both right, fast and furious. 

Lei Xing:
We can even bet who's going to be start selling in the U.S. or actually delivering in the U.S. first, VinFast or one of these Chinese smart EVs or somebody else that starts with a “B.”

Tu Le:
And the other thing that's probably another opportunity in the next 12-18 months and Lei, you probably have an opinion about this is going to be the U.S. Because Europe is already there, the U.S. is starting to make that pivot, make that turn like fully full momentum towards EVs because of lynch pin products like the F-150, and I tweeted yesterday. I've seen one in real life in the wild, the Mustang Mach-E in Beijing, but they're starting to show up amass on the Beijing streets so good for Ford China being able to get those out and delivered to folks. And then you'll appreciate this. I was at Raffles. I had to go pick up something from Raffles near Xingfucun, right? And I saw this Cadillac CTS and it was parked right next to the Mustang. I was like two American legacy brands parked next to each other. That's weird to see.

Lei Xing:
So the only other thing we can mention and maybe we can end after is what I tweeted earlier that BYD will be exhibiting at CES 2023. This has major implications and a huge sign of things to come, because CES is the stage to make announcements. That's the first time the BYD is exhibiting. So run your imaginations wild on what they're going to announce. It's going to be a huge announcement.

Tu Le:
Let's not under emphasize that they decided to do that at a technology conference, not an automotive show, right? Not an auto show. The last thing that I wanted to just mention was that Electric Last Mile Solutions has decided that it's no longer going to be an ongoing concern. This was a startup that was building electric commercial trucks out in Troy, Michigan. One of the co-founders was the Ford China CEO for about 5 months.

Lei Xing:
Yeah, his reputation’s just going down the drains.

Tu Le:
Jim Taylor, who was a long time GM executive.

Lei Xing: 
Hummer? 

Tu Le:
He was the CEO of Hummer. So they were going to contract manufacture trucks in China, but the SPAC didn't make as much money as they wanted to. And so now they're going to liquidate. So it is happening. This is probably the highest profile company that's going out of business. But you don't hear much from Faraday right now. They're probably still under SEC investigation, but so they have to be having cash crunch issues as well. Have you heard anything about Faraday? I have not.

Lei Xing:
Well so far, they're on track on their promises at least production wise. 

Tu Le:
I wonder if we will see them in Detroit?

Lei Xing:
I don't know, if not Detroit, LA right? So November would be, I think their plan was Q3 that the start of production so that's coming up very soon. I just wish Carsten the best of luck because he went through that with Byton. And all the promises of SOPing and then they never got anywhere. And next week we talk more in detail about the Li Auto L9. 

Tu Le:
That's right. 

Lei Xing: 
Three weeks of huge launches. And I believe the G9, the Xpeng G9, that's coming up as well. That got delayed, right? So all these new models continuing, just waves of onslaught.

Tu Le:
Xpeng has been eerily quiet the last month and a half. So maybe we need to ping somebody see how they're doing. 

That brings us to the end of this week show. Lei and I thank you for tuning in. My name is Tu Le, and you can find me on twitter @sinoautoinsight. You can find Lei on twitter @leixing77. If you wouldn't mind rating and reviewing us on Apple Podcast, Spotify or wherever you grab your podcast from, we'd appreciate that as well. Even better if you enjoy this show, please tell your friends about it.

Please join us again next week as we track down all the latest news on China EVs & More