China EVs & More

Episode #75 - Thoughts on Baidu/Apollo RT6, battery cell suppliers looking to US, unpacking latest news on Didi

July 29, 2022 Tu Le & Lei Xing
China EVs & More
Episode #75 - Thoughts on Baidu/Apollo RT6, battery cell suppliers looking to US, unpacking latest news on Didi
Show Notes Transcript

Tu & Lei begin the pod with a discussion about the unveiling of the RT6 - an Baidu Apollo branded, Level 4 capable robotaxi that will be hitting the streets sometime next year at the cost of ¥250K (~$37K) and the greater implications of Baidu's mobility strategy. Tu speculates that we could see announcements from Baidu about pilots launching outside of China next year.

Tu moves the discussion over to battery cell manufacturers and how they're likely being approached by the legacy automakers with the opportunity to globally supply cells in the US + China + the EU(where applicable). Lei talks about Ford's bold announcement about a partnership with CATL.

The topic of discussion then moves to Didi, its massive fine and what's next for them. 

The podcast closes with Tu & Lei briefly discussing the current foreign / local JV situation, Li Auto's 'spring-gate' and Tu's quick takes of the week. 

CEM #75 Transcript
Recorded 7/21/22

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 important and interesting 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 management 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. You can sign up for it at sinoautoinsights.com, which I encourage you all to do. Lei, good evening, can you please introduce yourself?

Lei Xing:
Good evening from my side and good morning Tu. This is your co-host Lei Xing, former chief editor of China Auto Review. This is episode #75 so we are 3/4 of the way to 100. So getting there. Before we begin, just a reminder that we have published the two-part MAX episode with Frank Wu, head of a design at JIDU, so make sure to tune in for that.

Tu Le:
And I must add that part two is actually the more wonky, more technical and design oriented parts. You know that Part I was more about his story, and I think that's compelling. But if you're wondering more about JIDU Auto and kind of design considerations, UX, UI, that kind of stuff, then this is definitely the episode for you.

Lei Xing:
Yeah lots of juicy details. Anyways, some of the headlines this week I guess going back to Monday, we had Li Auto kind of in the spotlight with the L9 “suspension gate” sort of, and that Chevy Blazer EV reveal had some buzz over here in the U.S. This is not EV related, but I think still worth mentioning is the Stellantis saying chiao to GAC Group and Jeep says bye bye to local production in China.

Tu Le:
I think it's EV related because there's no EVs involved. That's the problem.

Lei Xing:
Right. Yeah. We said hello to Baidu's sixth-gen robotaxi yesterday, the RT6. This just a day or two following Baidu and Pony getting that permit to charge fares for driver side driverless robotaxi rides, meaning there's a test or guy sitting on the passenger seat. DiDi, I guess DiDi is, once that $1.2 billion fine, they've admitted to wrongdoings. I think that's the end of the beginning, beginning of the end or the end of the beginning, whichever way you want to look at it.

Tu Le:
We should note that Cheng Wei and Jean Liu also got fined RMB1 million or $150,000. 

Lei Xing:
Yeah, that's nothing, right?

Tu Le:
Not for those, what used to be millionaires now hundred millionaires, right?

Lei Xing:
And BYD entering Japan, MG with that massive shipment to Europe, Ford says I love you to CATL LFP batteries, I say globalization is alive and well! And also the Tesla Q2 earnings, I think, had a kind of a mixed bag, at least the stock was up big today on the earnings. So, where do we begin, you want to begin with Baidu?

Tu Le:
Let's start with Baidu.

Lei Xing:
Your take?

Tu Le:
So as you know I visited them 2 weeks ago. So I kind of got some hints into what they were going to be launching or unveiling. But I didn't get to see any pictures of it. So I was pleasantly surprised about the design. It looks great actually. It's clean. I'd written this in the newsletter or in a tweet. It doesn't have this gaudy grill that's unnecessary. The three seats was a little peculiar, but I think it's the combination of how clean the design is and having that RMB250,000 price point, that I think is pretty substantial, pretty amazing.

Lei Xing:
Yeah the car reminds me of the actually the Xpeng G9 and the Li Auto L9 the way it's kind of.

Tu Le:
The front end specifically, right?

Lei Xing:
Yeah it's kind of a cross between an MPV and a full size SUV. It's a large robotaxi. I was a bit surprised that it would be that big. I thought a smaller, simpler robotaxi would be much better, but it looks like it's big because of kind of the seating positions for the passengers and kind of the interior, what's being offered, these little things in the front, right? But I think what people might overlook is this is not only the 6th-gen robotaxi for Baidu without a stealing wheel or with the detachable stealing wheel, but this is also the first Baidu car.

Tu Le:
That was the underlying narrative that they didn't overtly state, right? This is our first car. They never said that.

Lei Xing:
We traded messages with JIDU’s Frank. And he said he wasn’t involved. So just from a design point of view, who designed this? It was not bad. And also because that this is the first vehicle that I think Baidu led in terms of whether it's the design, whether it's the Xinghe E/E architecture, right? It's totally different from the past generations where they were used from existing EVs, right? So from Apollo Moon using ARCFOX Alpha T models, I think that stood out to me as kind of really Baidu is taken, I mean this is like a Baidu is making cars basically.

Tu Le:
I think what's important to note when we take a step back is if we look at the entire picture, Robin Li has this completely mapped out in his mind, right? Because there's a brand, that he’s partnering with JIDU. And then they're going to have a Apollo branded vehicle. So from a mobility and from a robotaxi standpoint, he's just starting to communicate outwardly what Baidu’s vision is for this, the Apollo team or the Apollo business line. And you and I have pretty good relationships with the comms teams there and super great people, by the way. But they also want a little bit more international focus, which tells me that Robin is probably going to be launching pilots outside of China. It's some time in 2023. I think that's probably one of the worst kept secrets in my mind anyways, because I just think that they're really, really going to get aggressive with that stuff next year.

Lei Xing:
I think besides the RT6, the other one that I can think of as being an original kind of dedicated robotaxi would be what ZEEKR is trying to work with Waymo, right? Kind of the Canoo style robovan or micro bus, whatever you want to call it. But other than the RT6, there's no such, at least from a tech company, let's say, Waymo, that they're all using existing vehicles. But this is the first time I think ever that a tech company has led the design architecture of a dedicated robotaxi. So I think that was the significance.

Tu Le:
I will do my best and Lei, I'm sure you will as well to find out more details because there are a lot of questions that I have with regards to, you know what I mean.

Lei Xing:
One of them being the production partner. I think what I'm hearing is this will be announced in due course, there has to be a production partner for this.

Tu Le:
And I'm hoping to get a look at this, hope in the next couple of weeks, maybe. So unfortunately, they didn't show it to me.

Lei Xing:
I'm sure when you checked out the ROBO-01, the RT6 is hiding somewhere in the building.

Tu Le:
It's probably a building over or  two buildings over.

Lei Xing:
And the other message I think they're trying to get across is this half the cost of a ride. And what I'm hearing is the latest permit to charge this driverless robotaxi. I think it's RMB3/km. I don't know if that…

Tu Le:
Which is about 15 cents.

Lei Xing:
Yeah, so basically again, they're goal of trying to keep this a robotaxi or not looking at it as a robotaxi, but looking at it as ride-hailing or a taxi ride as cheap as possible.

Tu Le:
And I have to say Lei that I wonder if the Chinese government, the record scratched when they like where they're like the cost is going to go down by this much because that means ultimately, people are going to be out of jobs in China, which is the most important thing to keep stability in China.

Lei Xing:
This does have a steering wheel. So it's right, it's detachable. It's like those one of those concept cars where it teleports, right? In and out. So.

Tu Le:
This has bigger implications for western countries, because the hourly rates for workers here is less than the hourly rates for workers in the west. And so it has much grander implications for other countries, especially when there's unions involved in Europe and lobbies involved in the U.S. And so, yeah, that was a key message from the presentation, which I think maybe getting lost, because we're so enamored with the actual technical aspects of it.

Lei Xing:
And we should also remind everyone that the recent permits to charge fair for the driverless robotaxis are only within that 60-km pilot zone, right? So when this RT6 do launch, I think it's second half of next year, it'll be still within a certain jurisdiction, and it'll still be quite some time before we see this thing, roaming the streets everywhere in large quantity, right? So we should remind people there's still some time, but at least that Baidu showed that they've been iterating every year, newest generations in terms of cost, in terms of design.

Tu Le:
This has to be a nod to DeepRoute who late last year announced that $10,000 hardware/software stack, this falls in line with the cost structure that DeepRoute has been able to kind of manage.

Lei Xing:
So reportedly the eight LiDARs they used are from Hesai, which is offering one of the industry’s most economical LiDARs on the market. I haven't confirmed this, but I take it to be Hesai because I think it's 128 lines, the reported. So I think they're the only one that's offering this on the market. So that's, right, eight LiDARs, that's huge cost that you know compared even I don't know whether Apollo Moon at the RMB480,000. I forget how many LiDARs they use, but everything from the architecture, from the hardware, the sensors, integration, Baidu going deep on their own.

Tu Le:
Eight LiDARs also tells me there's a decent amount of redundancy, too.

Lei Xing:
That's the other big thing that they stressed. This all kind of redundancy at various levels, right? That is stressed in the presser.

Tu Le:
And this is the cleanest form factor to put LiDar and sensors on, right? Because it's just the big box. There's not any curves or creases, or corners or spots that make it more difficult for the sensors to be optimized, right? And Frank had talked about that.

Lei Xing:
That's also important because that's how long, this long way that these integration has come compared to the DARPA days, right, the DARPA Challenge days with all the buckets.

Tu Le:
They trick you a little bit because the top, like the horns on the vehicle, are black and so they kind of blend in and you don't see them and they don't stand out, they won't be body colored, because they want to look integrated into the vehicle and the design.

Lei Xing:
And really this is I what's happening in the AV space if we compare it to one of the big topics from the Tesla earnings or chatter was this FSD and robotaxi that Elon has been trying to convey to the public, that they are still behind.

Tu Le:
There seems to be a bit more push back on that narrative from Tesla now. So at least a little bit on Twitter and some of the media outlets, I think so.

Lei Xing:
I guess with the departure of Andrej, right?

Tu Le:
The other thing, too, is that I’ve written this in the newsletter that there are 38 serious or special investigations being conducted by NHTSA on Tesla accidents. And the article said that 18 of the 38 involved fatalities that are being investigated in the U.S., so that ratio seems extremely high.

Lei Xing:
If we go over to the Tesla earnings, a mixed bag, I think one thing that stood out for me was the good part of it, is that they are still to be reckoned with as far as capacity is concerned, Shanghai Giga and the other ones, right? They reiterated the goal to deliver 50% more this year than last year. So 1.4 million should be no problem, but the big news is obviously lower margins. I think that's the first time in four or five quarters, but obviously with the Shanghai shutdown and raw material prices.

Tu Le:
Tesla’s challenge is product. It's going to lose momentum in its most important market if it doesn't come out with a really refreshed product, Model 3, Model Y or a brand new product for the entire market, Cybertruck is going to bring some excitement if it's sold in in China, which I think it is going to be, but I don't know. That doesn't seem to me like a volume or high runner for them, right?

Lei Xing:
You wonder how much longer can the 3and the Y continue to be this majority of their production and delivery with only those two models. This year, I guess they're fine, but come 2023, if you want to grow 50% on 1.4 million, that's another 700,000 units. So over 2 million.

Tu Le:
Let me add to that last statement, Lei. How long the 3 and the Y can hold the fort while in the U.S. the Chevy Blazer is coming out, in China BYD seemingly launches a new vehicle every 6 or 8 weeks. NIO is coming out with the ET6, there's an onslaught in the U.S. and in China of new product. Say, for instance, they could pull that tail out. As long as a lot longer, the 3 and Y sales. But with new products coming out, it's just impossible to maintain excitement about your products without being able to update them regularly yourself, right? 

Lei Xing:
Yeah, still impressive considering the two models.

Tu Le:
Yeah, without question for sure.

Lei Xing:
And then there was that sale of the bitcoin which Elon tweeted saying I looked fat that's why I sold the bitcoin. 

Tu Le:
And then for those that are like not following too many Tesla stans, I'm sure you saw those pictures of basically ghostly white Elon on a yacht in Greece, right? So they're kind of shaming him. I thought that was kind of not nice, not very nice.

Lei Xing:
Then the other thing that was not really surprising was kind of a confirmation that the 4680 is still not there yet, right?

Tu Le:
Not even close. Doesn't sound close.

Lei Xing:
So that'll take some time.

Tu Le:
It seems like the Qilin is going to come out before the 4680, like mass produced.

Lei Xing:
Probably. 

Tu Le:
And then, I don't mean to be jumping around, but I do see the competition heating up with the large legacy supplier or legacy OEMs and BYD and CATL, because these legacies are probably going to be offering, including Tesla, going to be offering global contracts for supply in the U.S. and China, at least, right? So that should maybe put a cap on pricing increases, at least on the LFP side maybe. So because I think people are worried about raw material prices, increasing and creeping into the overall battery costs. Now battery cost will increase over the next 18 to 24 months. But with the two largest or two of the largest suppliers competing for customers, that can help put a ceiling on how high the prices go.

Lei Xing:
And kind of Ford’s announcement today with CATL in the picture was a little bit surprising, but also, I think on Ford’s part, was a bold move, considering the kind of the geopolitical environment that we're in, that this is going to raise some issues or concerns or and also open up this competition who's going to build in the U.S. or in North America, doesn't have to be in the U.S.

Tu Le:
They both seem to be negotiating with countries, states.

Lei Xing:
Mexico, right? It was rumored. Was it BYD or?

Tu Le:
CATL is definitely, that was CATL. But they're definitely negotiating in the media because they're probably talking to different states in the south as well, right? So when the state of Alabama sees, they're talking to Mexico, maybe they sweeten the deal a little bit.

Lei Xing:
This is also, I think, the first time that any OEM has said that we have the 100% of the battery supply secured for, let's say, the next year, right? The 600,000 units that they plan and then 70% for 2026, I guess.

Tu Le:
Yeah. And I can't, Lei, I can't help but to think that Ford made that announcement not entirely, because they're not vindictive like that, but maybe a little bit because BYD wasn't very good partner for them when they launched the Mustang Mach-E in China.

Lei Xing:
You think so? I mean also the surprising part that I tweeted was tht BYD was supplying the NCM and now, whereas CATL is doing the LFP. I thought, BYD is definitely the king of LFP but the win got to CATL.

Tu Le:
So while the western automakers or least the U.S. automakers are kind of in bed with the Koreans and the Japanese and that stuff, right? At least the Koreans, GM and Ford are working with LG and SK on the NCM side. I think those contracts are pretty solid unless there are supply issues and pricing issues. If I was Ford, if I was any major automaker, I’m qualifying every single battery cell chemistry from all of the major battery cell manufacturers, just to make sure that if I have a hot product that I will have linear supply and not have any issues with the batteries.

Lei Xing:
Yeah, and the other thing is also looking from the CATL side which issued its own press release is, that this binding MOU would cover China, Europe and North America, one, and two, they are doinng research on possibly other chemistry as well to support Ford. So it felt like these companies sooner or later, it's going to make this move involving these big name companies. So let's say, a Ford going with CATL or GM going with CATL, no longer surprising that, right? They have to do this.

Tu Le:
The other thing, too, is I guarantee you, because remember, I used to be a sourcing guy. CATL is sweetening the pot, because if GM or Ford signs some sort of agreement with them in the U.S., that totally increases the skids for them to enter the market, right? They're probably offering some something favorable, whether it's pricing, whether it's supply, whether it's long term contracts, they have to be offering something a bit more in the U.S. to the U.S. automakers, in order to try to close those deals. 

Let's move it to the Blazer. I'd love to know what your thoughts are because I know you tweeted about it a little bit.

Lei Xing:
No. I just thought the Blazer had some design features that were a little perplexing. We were talking about the charge port which was massive, the way how it's opened and how it’s designed. But definitely it's a Model Y or Mach-E competitor based on the pricing and size. But it's still a kind of what Frank talked about, a “yougaidian”, which means this is based on an ICE architecture or model, but obviously using the Ultium platform. So I don't know.

Tu Le:
I think after the market research that they're doing, they're probably seeing that customers maybe aren't ready to get rid of that transmission tunnel like center stuff.

Lei Xing:
Yeah and also that the cockpit was a little bit traditional. I guess the way to put it.

Tu Le:
Yeah. But I do see GM's strategy coming more into focus, especially with their $27,000 or $28,000 Bolt. And now their $45,000 Blazer. So.

Lei Xing:
and then the $30,000 Equinox.

Tu Le:
Yes.

Lei Xing:
And the Silverado. So this is interesting what's going on here. So Volkswagen is trying to beat Tesla, right? There's a race going on between BYD and Tesla. Now Mary Barra is saying that we're going to beat Tesla in the U.S. by 2025. So something has to give, right? I can't wait till 2025.

Tu Le:
You and I have talked about this that to me that the sales volume is the wrong KPI because these guys are selling 6 million cars a year, right? So even if they did poorly, they could sell as many cars as Tesla, right? But who's better at software, who's better at integrating the stickiness of an app or is going to be moving toward services that can generate large sums of revenue. I don't see GM, Ford or Volkswagens there yet, right? I think they're still crawling when it comes to the hardware software integration. If and when they find a compelling product or service to sell, they can sell it in millions of cars. I get that. But it's still a ways away to me for them. And so they need to have some small wins and maybe saying that Tesla or they've outsold Tesla. That's kind of a way to do that. But.

Lei Xing:
Yeah and also that news coming out of Porsche announcing that they were, all the existing Taycans, was it the Taycans, right, that will be able to kind of upgrade. And then the Capital Markets Day also kind of, I think I felt they were a little bit hesitant on the kind of the Volkswagen Group wide software that is not there yet. What I heard was that they're still using this Porsche, right, system or before you can feel confident to move on with this group wide software.

Tu Le: 
And we should remember Lei that maybe this Porsche software isn't scalable because the number of cars that Porsche sells in relation to the Volkswagen Group is very, I won't say, insignificant, but much smaller, right? So if Porsche software is very simple and maybe a little buggy on 300,000 cars, could you imagine if there's 6 million cars using the software? How did they scale this? Did they kind of do studies and figure out how many bugs that they would likely see based on these projections? If they're going to load the software onto other vehicles within the Volkswagen Group team or brands, what else?

Lei Xing:
DiDi, or?

Tu Le:
Yeah. 

Lei Xing:
It’s a RMB8 billion lesson learned I guess, not for DiDi, not only for DiDi but for the other competitors. That’s my take.

Tu Le:
Yes I think that's key. It was a punishment for DiDi, but a warning for everyone else.

Lei Xing:
And I have this article in front of me that kind of summarizes what kind of illegal things that DiDi did to earn this fine. There's things like illegally collecting, let's say, user smartphones, pictures like screen shots. There's millions of millions of that. There's like users notes somehow that they get, there's illegal collecting of facial recognition, information, age, occupation, home and office addresses. So things like these that caused the fine, basically, I think they listed like 16 different illegal activities.

Tu Le:
Yeah, but I’m going to tell you, man, if they did an audit on any technology company saying they're going to find that stuff, right? So I look at it this way. They defied the Chinese government, don't IPO. Boom, the IPOed. So they dropped the hammer and they kept on doing this for a year because they didn't want the stock price to jump, because think of it this way, it's at $4 or whatever. And so if the stock price increases, then Jean Liu and Cheng Wei become richer, right? So they put a cap on, well they didn't put a cap, but they kept this uncertainty there to scare investors and reduce the market cap of DiDi, and to your point, I totally agree it was a punishment for DiDi, but also a warning to everyone else: don't do this.

And that year, so much has changed in the ride hailing and autonomous vehicle sector. Just look at the announcement that we talked about this just at the beginning of the show the Baidu, right? So the crazy thing is that DiDi is going to have to show growth again if they're going to get any investors attracted to their Hong Kong IPO, so they have a lot in front of them that they still need to reprove themselves. And there's going to be investors that are really still hesitant about making that bet on Didi, right? So very challenging.

Lei Xing: 
So they IPOed on June 30 of last year and 2 days later, this whole investigation started and it's taken a year. And a month ago, they, right, they exited the U.S. stock market. And now the fine.

Tu Le:
I have a few friends, again, we're not offering advice, but I have a few friends that were like, man, it's at $7 I’m going to get in. I think it's going to rebound. And I was like, I don't know, man, I don't know. And so lesson learned, dude, like, and so I was talking to somebody yesterday because I think what people want to conflate the technology clampdown and how they've eased up, the Chinese government has eased up. But this is not the same. This is completely different. So what we're seeing is loosening of gaming policies for Tencent, because a disproportionate share of their revenue comes from gaming licenses, but the DiDi situation has nothing to do with the rest of what's going on in the tech sector at large. I want to be clear and Clinton, I know you raised your hand, but give us another 5 or 10 minutes to kind of go through everything and then we'll bring you up.

Lei Xing:
Lesson learned and lesson learned for kind of Stellantis. I think their move, I applaud their move actually, to be honest, I thought it was due that just make the decision that and finally they did. I thought it was like, it's a great move.

Tu Le:
Let me ask you Lei, is it over for Jeep in China then?

Lei Xing:
No, not at all.

Tu Le:
You don't think that it's going to be very limited because they're only importing?

Lei Xing:
Yeah but if you're talking about volumes in hundreds of thousands of units, then yes it's over. But I think it's good that they just focus on the imports, and the imports of actually some of the electrified models. They have to do it anyways. There's still a cult following, Jeep brand is actually pretty good. It is a bit tarnished but there. There's a huge brand following in China.

Tu Le:
Yeah, the loyalty is like almost second to none.

Lei Xing:
Some of the Wranglers, the 4xes, they could do well some of the import niche models.

Tu Le:
You know what’s crazy Lei, is that for the traditional strengths of the U.S. automakers, trucks, SUVs and Jeeps, in China, RADAR just launched, Great Wall Motor has been around. So these companies are going to try to out American the American automakers. And then on the U.S. side, Volkswagen Group is going to relaunch Scout. So there's that, too. And then U.S. side there's RIVIAN as well. So I’m anxious to see and excited to see if they can take that mantle away, because Bronco has such heritage value for Ford. And Jeep is such an iconic brand globally. And in China like you said, there's a ton of loyal followers. People will buy a Jeep just because it's a Jeep, right, and only a jeep.

So that's why I asked you that question is it kind of over for Jeep because I’ve said this many times before, you can't export or import your way to a leadership position in any of the major markets. And that's China, Europe or the U.S., you got to build locally. And this is completely opposite. And I agree with you that they were struggling for a long time. And if they're not going to concede some decision making to GAC, invest in the region, then they should pull out completely, right?

Lei Xing:
Part of it is due to the kind of the product flow, update, they were slow, part of it was due to Chrysler over the years being merged, unmerged, merged again, FCA PSA, right that China was basically put in a back burner. Even the PSA side was going through some tough times, but it looks like Citroen and Peugeot seems to be on their way back a little bit. So I think overall they probably have to focus a bit. So remove that JV on the Jeep side, on the FCA side and just focus on the PSA brands, which are doing relative better, but I think this Stellantis and GAC Group ending or terminating this joint venture, I think, is a sign of things to come, which is this JV era I think now, I would say now there's three camps in the JV group in China: there's the BMW camp. the Volkswagen Anhui camp were the foreign partner has kind of the stronger say; there's the status quo camp, which is the Shanghai-Volkswagen, FAW-Volkswagen, they seem to be happy. They're okay; and then there's the third camp which is the Stellantis camp that these are on the fringe. And you are going to see more of these happening, these joint ventures being terminated because of competition.

Tu Le:
It goes back to that saying that you have: the sleeping in the same bed, two people sleeping in the same bed, dreaming different dreams.

Lei Xing:
So kind of what, yeah.

Tu Le:
Could you see, and I’m just spit balling this. Could you see Jeep coming back as a wholly owned entity of Stellantis without having GAC? 

Lei Xing:
Not that I can see of, not anytime soon and not in the future. I don't see it.

Tu Le:
Because there would be contract that would prohibit that, you think, or would there be a formal reason for that? Like a contract would prohibit that?

Lei Xing:
No, there's nothing to prohibit it. The only things that's going to prohibit is the products. What do you have to warrant a local production, to warrant a large volume? Even if it's wholly owned? That's the thing that Jeep is facing.

Tu Le:
Is there, what else do we want to talk about?

Lei Xing:
Pretty much all, just that Li Auto, I think L9, it's just one of those things.

Tu Le:
The government got involved in that too, which to me was a little weird because these are media cars, they weren't like a private passenger vehicle, so that was a little bit weird.

Lei Xing:
The L9 will sell well. It's one of those things that because Li Xiang said this is the best under RMB5 million, that kind of backfired.

Tu Le:
And his and, the explanation was kind of unclear to me there. It's not a production part or something, or that's what I understand.

Lei Xing:
Also they issued a kind of a statement saying extending the warranty, right? There's a fine print. So whether it’s the suspension or whether it’s the spring? So there's a little bit of fine print that's being debated. But I think Li Auto will be fined at the end of the day.

Tu Le:
Some of my quick takes for the week, the U.S. has passed its threshold of 5% of EVs are being sold in the market. And there's a Bloomberg article that said that creates the tipping point.

Lei Xing:
I didn't agree with that, to be honest.

Tu Le:
There is a lot, I wrote that that's awesome. But I still would like to see more cohesive effort on the charging, on the battery manufacturing domestically before I’m convinced that we've hit that tipping point, to get to the hockey stick. But if that theory holds true, we should expect to see more than 25% of all vehicles sold in the U.S. to be electric by 2025. So if we're looking at an 18 million vehicle market, we're talking more than 4 million vehicles. So that's pretty significant, bodes well for GM obviously, and Ford with their lower priced cars launching very soon. The next thing I wanted to talk about was Xpeng partnering with the car rental agency eHi here in China. So looks like they're trying to gain some volume on the cheap. And the comparison I made was Tesla and Polestar.

Lei Xing:
On Hertz?

Tu Le:
Yes. The only difference is Xpeng is a bit more mass market, so it could be, it's risky for them to do that here in China, because unless it's a dumb down P7 or a dumbed down G3, or they stop selling it to private passengers because G3 is pretty old anyways. So want to see more of how that strategy is going to unfold. Then two more things. The first engineering build of the Lotus ELETRE rolled off the line in Wuhan. I think there's a ton of excitement about that, and I wrote, you tell me if I’m wrong. I wrote that there's two immediate markets for this car. The first is the Chinese consumer that thinks there's way too many Cayennes and Macans on the road in China already, mostly in tier one cities. You see that too, right? It's like man, I don't want a Cayenne and I want something different and then the second market would be, it's going to be really more geared towards women. So the traditional marketing of Lotus is probably going to be evolved to be a bit more softer and more family friendly perhaps. Because I don't know what the statistic is, but I see many more women driving Macans and Cayennes than I do men here in China.

Lei Xing:
That's actually I think Porsche has shared those numbers that the female owners or the proportion is arising, especially for the Macans.

Tu Le:
And then the last thing Lei, and this is, I'd love to get your take on this, well second to the last thing because I’ll tell you some of the things we did yesterday that I think are pretty cool. The ET7 is going to get its first German passport stamped later this year in Q4 of 22, Hui Zhang has said that they're going to start, and this is where I’m not sure, are they going to start delivering?

Lei Xing:
They already have that site located for the first NIO store, right, NIO House, in Berlin or Munich, or Berlin?

Tu Le:
I think it's in Berlin. And so pretty excited. I think that if I was BMW and Mercedes, I’d be watching very, very closely.

Lei Xing:
I’m sure they are.

Tu Le:
What is going to go? The last thing I wanted to mention to you and this is why I was kind of so busy this morning Lei, because I was catching up because I spent all afternoon yesterday in a Polestar 2 documenting the charging process in China. And we recorded it with the help of Mark Rainford, who's the Inside China Auto Twitter guy and Andhers Hove, who's also listening right now. So what's going on, Anders? So we went into that charging infrastructure company that you and I had a conference call with awhile back. We won't mention the name. They pointed us to two locations that their charging stations are at. And one was in a parking structure under U Town.

Lei Xing:
It's under underground or?

Tu Le:
Yeah, underground park structure under U Town near Ritan Park. So we go there. And there are police, not police lines, but those caution lines do not cross. Six or eight chargers completely abandoned, not abandoned, but off limits, we couldn't use them. That was surprising that they sent us to those because they didn't know that they were not functional, which to me is probably just an easy to understand if you're looking at the system, right? And then the second one was, in Yizhuang, it was working, it was a solar panel outdoor, in the same plaza as the Sam’s Club in YIzhuang.

Lei Xing:
Was that run by State Grid?

Tu Le:
State Grid, yes. And then there's a NIO swapping station and an Xpeng charging station. And then the company we talked about. And surprisingly, the process to charge them was really painless. But we will have a video of our adventures in probably the next two weeks, Mark and I are headed to Daxing later this afternoon to visit Evoke Motorcycles, and probably do a little piece on that.

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 or 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 this again next week as we track down all the latest news on China EVs & More.