China EVs & More

Episode #79 - Tu's back in the US, Li Auto earnings, Li Keqiang's visit to BYD

August 28, 2022 Tu Le & Lei Xing
China EVs & More
Episode #79 - Tu's back in the US, Li Auto earnings, Li Keqiang's visit to BYD
Show Notes Transcript

Lei starts the pod out with the announcement that China EVs & More reached its 10,000th download so both Tu and Lei took a moment to reflect, thank their listeners but also look forward to what’s up next for the podcast.

Tu then moves over to discuss his adventures getting back to the US including detailing his multiple layover flight that included the screeching halt of the plane he was in headed to JFK. 

Lei then moves the conversation back to this week’s biggest news and summarizes a few of the battery related announcements with a specific focus on CATL. 

The discussion moves to Li Auto earnings, especially the Li management admitting that they’re seeing more cannibalization of the Li ONE from the L9 than they’d originally forecasted. 

Lei then unpacks XPeng’s event announcing their super fast charging that should be available in volume by the end of this year for all new XPeng vehicles.

Tu and Lei move the conversation over to the significance (highly) Li Keqiang’s visit to BYD and the broader implications of continuing the NEV purchase subsidies in China. Lei’s prediction was that it would continue through 2023 and Tu agreed. 

The pod closes out with a brief chat about what to expect from the Chengdu Motor Show. 

CEM #79
Recorded 8/18/22


Tu Le:
Hi everyone and welcome to China EVs & More where my co-host Lei Xing, in the same time zone 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 and 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 sector. 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:
I am your co-host Lei Xing, former chief editor of China Auto Review. This is episode #79 and good evening. I no longer have to say good morning to you! This is our first episode where Tu and I are in the same time zone, on the same continent and welcome, welcome back, welcome back home. A jet lagged Tu.

Tu Le:
Yes, and if you're wondering, Lei did not come to China. Let's just say that if you're wondering which home we're talking about.

Lei Xing:
So, two housekeep. Yesterday, we had our 10,000th download for the podcast, so we reach that milestone.

Tu Le:
Congratulations, Lei, congratulations.

Lei Xing:
Congratulations, that's correct. And you're back. So it's double happiness. Oh boy. Before, I think I want to spend a little bit of time to talk about this 10K before we get into the headlines. Our first episode was published on May 20, 2021. So we have published 75 episodes, we've done, obviously, this is number 79, missing a couple of episodes, but so 10,000 downloads, 15 months, 75 episodes, at least 4,500 minutes of content.

Tu Le:
And how I see it Lei, we're about 1,900 episodes shy of getting our $200 million deal from Spotify.

Lei Xing:
Just, let me go through some the numbers. Our podcast has been downloaded by listeners from 1,160 cities in 79 countries, and North America, Europe, Asia and Oceania accounting for 42, 26, 25, and 5% of the total downloads so far. So our biggest audience.

Tu Le:
Truly global.

Lei Xing:
Obviously are coming from, so two-thirds are coming from North America and Europe, okay? And mobile downloads 78%, iPhone devices two-thirds, and 41% are from the Apple Podcast. 

Tu Le:
You Android folks need to show up. We don't care what platform you listen to us on.

Lei Xing:
Yeah, and all our top 5 episodes are MAX episodes with the one with Omer Keilaf, the only one that has 300 downloads. And the other ones have at least 200. So just some of the numbers and we reached 1,000 downloads on September 8, 2021. That's 4 months after. And since then 9,000 more downloads. It's been, every Thursday evening, it's like a ritual now, you know?

Tu Le:
Yeah, it's a habit. It's become a habit, right? We've done it more than 23 times. So it's a habit now.

Lei Xing:
And it seems every week is revolved around Thursday evening.

Tu Le:
My Friday, what used to be my Friday morning, right? Let me add to this Lei, and you can continue. Thank you to everyone. I'm a little bit fuzzy headed right now, but that 10,000 number is just mind boggling, because Lei and I did this as an experiment. And I couldn't be happier with how I believe Lei and I complement each other with how we look at things: his historical view and updated strategy of what the China market has evolved into, and how that is affecting or going to affect Europe and the U.S. And for me, taking sort of my old school auto experience with my Silicon Valley experience and cramming that all into my China experience in the automotive EV startup space. And then having that perspective, I think it resonates because we have a ton of loyal customer, or loyal listeners, number one. And then number two, this broad audience that 79 number’s mind boggling to me Lei.

Lei Xing:
Yeah and we make a good couple. 

We are the CEM couple. Yeah, I think what's been happening every day and week, let's say, for example, that Bloomberg article on BYD and tons of the others on now mainstream you know finance media covering the China EV, AV and mobility space. We can see that happening. We can see people waking up, right? Hopefully we've done our share of this kind of movement. We're not perfect, but

Tu Le:
Let me correct you really quick because I know you didn't mean it this way, but I almost feel not waking up but getting woken up. Because of the strength of a BYD, because of a strength in the quality and the beauty of the design of some of these cars from these China EV companies, right? I think they have to be heard now because they're resonating so loudly in so many different places now, right?

Lei Xing:
Yeah, it's just amazing to see, let's just say the last year and a half that we've done this pod, how much change, right, has happened? Whether it's geopolitically, whether it's on the technical side, whether it's on these companies’ global ambitions, whether it's on the Western audience paying more attention to what's going on in China, it’s mesmerizing.

Tu Le:
And then on top of that, it is a traditional sector that's being disrupted that has a pandemic that is dealing with, that has challenging issues with data, privacy, data security, chips, and all these other factors coming into play, and innovation and expense and how cheap things have gotten just in the last 18 months with regards to the hardware software stacks, too, right?

Lei Xing:
And the latest factors, electricity rationing. Who would have thought that, right? I mean, but anyways, back to you, let me ask you, how does it feel not having to do PCR test every day? You have to get used to it, right?

Tu Le:
Yeah, I was thinking about my wife a little bit because so let me press rewind. For everyone that's listening. I had this plan for several months, headed back, going to the auto show, spending a few months. But some things have changed. And we can talk about that a little bit later. But I took a 34-hour trip that I arrived in the U.S. for, yesterday afternoon around 12 o'clock. My flight schedule was originally flying out of PEK at noon, arriving Hong Kong around 4:30, and then getting on a plane at about 7pm to JFK having a 12-hour layover and then flying to Detroit. PEK to Hong Kong, a breeze. And then we got on the plane from Hong Kong to JFK, we were on the runway. The plane accelerated. And then this never happened to me ever, and it freaked me out a little bit. The plane just screeches to a halt right on the runway. As it's accelerating and it pulls off the runway. And for about 10 minutes, the pilot says nothing, and then he was like we were stopped by mission control or whatever the flight control, because there was some debris on the runway.

And now our breaks are too hot, so we cannot take off again for another hour. Then so we're sitting there for 45 minutes. We're thinking we're still going to take off. I have an 11-hour layover, so no big deal, right? I'm going to be missing 2 hours of the 11-hour layover, no problem. And so they're like some faulty control messages came up. Now we have to go back to the gate. Now that we've gone back to the gate, our crew has surpassed their hours for the week, and we can't find another crew. So we are back at Hong Kong airport at the gate, everybody's freaking out and they're like, okay, the next flight out is 11am the next morning. And it's like 9 o'clock right now, 9pm in Hong Kong local time. So there are 90% Chinese students going back to school, for university on this flight.

So I go to the gate as everybody's kind of complaining and kind of wondering what's going on. I go to this woman. Her name Yeung Chung at Cathay Pacific. She's a sweetheart and such a great help. I just communicated my frustration to her. And I said, look, my final destination is not JFK, it's DTW and she's like, she looks at me like, oh!

Lei Xing:
You had that Detroit shirt on, right? That was obvious.

Tu Le:
So she rolled her eyes just like I'm so busy because there's like eight other people talking to her, talking at her, not to her. And so I sit down, half an hour later, she comes over and she's like, she whispers to me. She's like, there's a 2 am flight, but I can't get everybody else on. So I’m going to get you on it. And everybody else gets to go on the 11, so don't say anything. So I got on 2am flight. And I had luggage with me. And I was like, is this luggage going to come with me? Or is it going to get lost? She's like, don't worry. We'll take care of it. Cathay, before COVID, was one of the best airlines you could fly, full stop. They've been struggling because of what's going on in Hong Kong because of COVID. And it's gotten really, it’s been challenging for them. So to see that level of customer service from Yeung Chung was amazing. I got on the plane at 2 am, had a 3 hour layover, which was perfect, because I was able to clear customs, get my luggage, recheck it. And then head over to, I was in Terminal 1 I think in JFK and had to get to Terminal 5. And did that, got here, rented my car. So if you're wondering, I rented a full size car and I got an SUV, so I’m driving a RAV4 right now I’m renting for. And my brother-in-law just basically just like holy shit, that's a lot. I'm renting it for $1,911 a month.

Lei Xing:
So for a month.

Tu Le:
For a month, so that's the monthly cost. So like 50 something dollars a day.

Lei Xing:
Not too bad.

Tu Le:
Not bad, but when you have brothers and sisters that work at GM amd Stellantis, and they can get you a deal for $500 a month on a $50,000 car, they're like, what are you doing? And so, anyways, long story short, my sister who works at GM at the Tech Center. And this is when I was sending you those pictures of the Tech Center, you and Frank, because we drove by, and my first stop for lunch was Potbelly. And so went to Potbelly, and that's when we took those pictures. 

Lei Xing:
So all the memories came back.

Tu Le:
The 2.5 years felt like nothing passed to be frank and the things that I noticed right away that you forget about, obviously, right, the trucks, the no masks, the enormity of the trucks, how big they are and how fast people go. And I got to tell you Lei, you know how they cut in in China if there's 2 meters of space they’ll cut in. I'm anticipating that. And I’m kind of like, and it doesn't happen and I’m like, it's the weirdest thing.

Lei Xing:
There's several things that you have to get used to. The testing, right, not wearing masks, how people drive, how wide the roads are, how wasteful they are. There's no bicycles. There’s no mopeds, there is no people walking or riding bicycles on the highways. 

Tu Le:
And then I saw, I drove from my sister's house to my other sister's house and she lives in Lake Orion, Rochester Hills area from, if folks are in Michigan and listening, you guys know what I'm talking about and I had to drive through dirt roads. I'm like, whoa, what am I doing here? So went from pave to dirt, but it was kind of like out in the sticks a little bit where the yards are bigger. But, we went saw Top Gun today.

Lei Xing:
It was awesome, right? 

Tu Le:
And surprisingly I did not fall asleep while watching it because it was, it was a little bit cheesy, a little cheesy, but it was so entertaining. And I could totally see why the Chinese government did not want to show that in China.

Lei Xing:
Too American, too macho, you know, American wins at the end of the day that type of.

Tu Le:
Every Chinese young man would have been like, I need to join the U.S. Navy. But it was, it was a good show. And so now, after this podcast I'm probably just going to pass out or I’m going to stay up for about five more hours one way or the other, but yeah. Then I sent you those pictures, so we went to that Potbelly across the street from the Tech Center, the GM Tech Center in Warren, Michigan. And in the parking lot, just across the street from the Tech Center was five 2023 Corvettes. Four of them were Z06s. And they all had in M plates or what we call manufacturer plates.

Lei Xing:
You're in heaven.

Tu Le:
I guess you grow up here, you take that for granted and then you leave and then seeing these camouflage cars in Beijing, a Li Auto or whatever. It's a big deal. But when I was a little kid, I saw that stuff all the time and I just took it for granted, I guess, So.

Lei Xing:
Anyways, I'm excited for you. Coming back, and. 

Tu Le:
Yeah, we have a lot of plan, we have a lot of plans.

Lei Xing:
coming back and get used to things a little bit in the first few days and weeks.

Tu Le:
And we should also mention that part of our recognition from the podcast was being invited and being recognized more by conferences and things like that. So I think we're going to be participating in more of those in the future, right?

Lei Xing:
Yeah and I think getting these guests on, whether through yours or my previous contacts, that's all through right these years in the industry, so.

Tu Le:
I think a lot of it has to do with, and I’m going to be quite frank with this. We know what we're talking about, number one. Number two, I think there's a level of trust there that we're not going to try to exploit or give them any gotchas, right?

Lei Xing:
So let me, we've spent 20 minutes talking about the milestone and your trip.

Tu Le:
My personal life.

Lei Xing:
That was interesting, by the way. But you're here looking forward to the fall. There's lots of events going on here in the Stateside, right? There's that the car week, the Pebble Beach, and then this weekend you get to see the Woodward, right? Which is your neighborhood now.

Tu Le:
So my brother-in-law has three AMC rebel machines, the show cars. So he's going to wake up at 4:30 to find a place to park his rebel machine on Woodward Avenue on Saturday, 4:30 in the morning. By the way, for anyone that's listening that's in Michigan or in the U.S., midwest,  Chicago, whatever that wants to get in touch, shoot me, an email or whatever.

Lei Xing:
Awesome, awesome. So we can go back to the headlines. Let me read off from what I prepared. So August 12, when we, right after we logged off, the big announcement from CATL, 100 GWh, nearly 7.5 billion euros investment in that factory and Hungary, with Mercedes being their first and largest customer, huge investment. Shanghai, Tesla Giga Shanghai.

Tu Le:
Let me interrupt you for a second. These are not only huge investments, but their endorsements by German OEM and a U.S. OEM now for CATL’s technology and supply chain, supply capabilities, right? Ford and Mercedes are veterans in the business. And so this is like a stamp of approval, right?

Lei Xing:
And we can talk about it a little bit. This is a on a bigger picture. This is the jostle. The geopolitical jostle. CATL had just announced a delay of their plans in the U.S. or in North America for that matter. And now they have this other announcement in Europe, right? Hungary is starting to become a hub for Chinese EV Inc. CATL is there, EVE Energy, which reportedly is supplying those cylindrical batteries for BMW, is planning to build in Hungary. NIO’s building their power swap station plant in Hungary. BYD already has a plant in Hungary, so interesting location playing out for Chinese EV Inc.

Tu Le:
And we should acknowledge that Hungary is part of Eastern Europe. So the wages are a little bit cheaper. I think the labor rates are a little bit cheaper and I think, friendlier for automotive than a Germany, which is very union, so.

Lei Xing:
CATL now is going to have two plants in Europe, right? Germany and this new one. So on Saturday, Giga Shanghai reached the 1 million production milestone. So two-thirds of Tesla’s 3 million vehicles have come out of Shanghai in 2.5 years roughly.

Tu Le:
In 2.5 years, let me repeat that.

Lei Xing:
It’s a monster. The a couple of BYD’s announcements into Cambodia and Denmark. So their global trek continues.

Tu Le:
You saw my tweet, right? Cambodia has 24,000 annual sales for cars, so it is like mice, nuts in the grand scheme of things, but BYD is leaving no stone unturned.

Lei Xing:
What's his same Luke Todd? I see him posting stuff on what's going on in Australia, right? I think they're being delivered soon, the ATTO 3. And then Li Auto earnings we're going to get into. There's bit of kind of debate going on. Especially on the same day, that Xpeng announces that super-fast charging, 5 minutes, 200 km. There's a debate going on right there. And over here this week, while you were traveling, was the big IRA signed into law. A lot of confusion on what the tax credits for EVs, right? Polestar names the O2 the Polestar 6. NIO puts their second battery fast charging station in Norway into service, more information already on the L8 and the L7 from CEO Li Xiang. And that big visit by Li Keqiang to BYD I think we can talk about that a little bit and rumors that CATL is going to provide, CATL and BYD are going to provide the batteries for the Xiaomi EV. And on the 18th, so just today China time the L9 started production, and Tesla shortens wait times for all models in China. That was interesting, could be good or bad. I think it's good because they had the production upgrade, right? Again, finally, when we talk at the beginning the show the high temperatures in Sichuan and Chongqing forcing plant shutdowns involving CATL and others, interesting things happening with Dodge coming out with the Hornet and the Charger. That was interesting.

Tu Le:
The Charger looks great, I think. 

Lei Xing:
So to kind of maybe talk about Li earnings, I think what was shocking was this revelation, this confirmation, that the ONE is falling out of favor already. And the management admitted and this cannibalization effect that we've been talking about, even with L9 being significantly higher priced than the ONE, but much updated features and with the CEO himself, saying on Weibo, forget about ONE, if you're, right, the L8 is coming out soon. This is just..

Tu Le:
They were definitely and to you and I it was obvious, but I don't know why the internal folks thought it would have an additive effect instead of a substitution effect to the Li ONE, the pricing, yeah, but the rest is too similar, I guess, like…

Lei Xing:
Yeah, so I think that was one thing. And the other thing, this whole debate again on Li Xiang saying this is an EV with a range extender, not an ICE with the battery and the guy over in Great Wall Motor, WEY,  there was this war of words, this debate about plug-ins and EREVs.

Tu Le:
If you got to explain your technology multiple times, it ain’t working.

Lei Xing:
But what's going on at Li Auto seems to be biting what Li Xiang said himself because he said their products are different iPhones, so iPhone Pro, MAX, ONE is almost like your iPhone 12, iPhone 11, now iPhone 14 is going to come out and you're going to upgrade a new one. So ONE is falling out of favor. And considering there's the new platform the L9 is based on and they will have this L8 and L7. Maybe it was planned anyways, but it just seems that ONE was on a good run, but now it's going to end. And that's.

Tu Le:
But this is where the technology analogy just doesn't hold weight because of the CAPEX cost, because of. So number one, Apple plans for that capitalization. I don't believe Li Auto planned for that.

Lei Xing:
I mean based on the earnings call, even the management said they were surprised. So.

Tu Le:
And to top that off, didn't Edison send a bad report, Deutsche Bank sent out a report

Lei Xing:
Lowered the PT? is that?

Tu Le:
Target price.

Lei Xing:
The other thing is just that the guidance, right, still under 10K a month. And considering that, most of the September deliveries are now being planned for the L9, because they've been putting this 10K out saying we're going to do that.

Tu Le:
They need to add more separation on pricing to the Li ONE, number one. Number two, by the end of this year are, are they going to zero out sales of the Li ONE. That's a bit extreme, but it's got to be in the hundreds going to move into the hundreds.

Lei Xing:
Because L8 right? They said it's going to be much pulled ahead. So L8 and the timing between the announcement and delivery is going to be shortened. So I'd imagine it's going to be 8 and 9 by the end of this year. And then next year will be the 7 plus the BEV models that are coming, which, yeah, which by the way,

Tu Le:
Talk about manufacturing hell, man.

Lei Xing:
Which by the way, they're still being mum on that new design form factor. They said it's going to be very different on the BEVs. So something to look forward to and then the Xpeng, they just had to have a separate event just for the super-fast charging, right, 5 minutes, 200 km. And what He Xiaopeng said that by doing this, the hybrids, you can say bye bye to hybrids. And also kind of a shot, a silent shot. There was that CNEVPost article about competition between super-fast charging and battery swapping, right? And which I said my point is, I don't think one is better than the other? I think it's at the end of the day, it's your users, your customers, what you're doing to serve them well. And charging is part of it. So whether it's super-fast charging, whether its battery swapping, right? One's going to work for one company, and the other one is going to work for the other companies for the foreseeable future, I think, if you were to ask William Li, I bet he's going to say we're not trying to, we are not all about battery swapping. We have our super charging, right? That the Norway station is a fast-charging/swap station. So just trying to offer different convenience to customers. That's what counts.

Tu Le:
And then we also have to remember that although the G9, Xpeng is trying to pull up the G9 into more of a premium status, NIO is premium luxury for the EV especially the China EV segment at plus RMB400,000 or RMB450,000 so their vehicles aren't cheap. So customers you would think that NIO customers expect a bit more. And if I was a NIO customer, I would want both. I would want super charging, and I would want battery swapping. I don't want either or.

Lei Xing:
Yeah so offering the options rather than you're forced to being served on one certain technology or platform. And I guess the other ones are. So we talked about Li Auto, Xpeng.

Tu Le:
Why don't you tell me your thoughts on the significance of Li Keqiang visiting Wang Chuanfu? 

Lei Xing:
This is not, I think the significance of this is not just any visit. This is a visit, perhaps one of his last as Premier, let's say at an auto company. I think the bigger picture here is the upcoming party congress, right? And after the Beidaihe meetings, you're seeing Li Keqiang…

Tu Le:
Where no Tesla vehicle is welcome.

Lei Xing:
Li Keqiang going to the south, Shenzhen, where these innovation, tech areas and Xi Jinping going to Shenyang, the Dongbei, the Northeast were economy isn’t that great. So these are signals, but I think any time you have the Premier either endorsing your company or endorsing the products that your company is involved, it's always huge. But I think when the Li Keqiang says that the purchase tax exemption, that this taxation preferential policies are going to continue, I think we already knew that, right? But in the longer term, eventually, there's a point where the taxation is going to be an issue. China's taxation right, overall, because it's been in place for 8 years. So since 2014 and the purchase tax half off on the ICEs that are in place, right, it's also reducing the taxation revenues. So I think the longer term there has to become to a point were EVs, these kind of policies will end to ensure taxation because people will buy it not for the savings anymore. It will be for something else.

Tu Le:
Right, and the revenue, on the revenue side, it's necessary for the Chinese government to collect that to remain whole, right?

Lei Xing:
So I would guess that they will extend for one more year, 2023. 

Tu Le:
Know that part of that is they saw what the U.S. did. A little bit has to do with that so.

Lei Xing:
I mean here, it's similar you could say for Tesla, are people buying Tesla because of the tax credit? I don't think so, probably not the major reason, right? 

Tu Le:
Not at a million units, in two and a half years, right?

Lei Xing:
Because it's that brand or it's the products, right?

Tu Le:
Got to give it to Tesla man. They've just remained resilient throughout with effectively products that aren't very new and technologically advanced anymore compared to what is either recently been launched or will be launching in the next 6 or 8 months.

Lei Xing:
That'll be interesting to see with this shortened delivery times and combined with, the next few months numbers to see this production export, right? See how that develops.

Tu Le:
I could see Tesla reducing price for Australia because BYD just entered because before BYD entered, they were the number one EV manufacturer in Australia, imported EV manufacturer. So I could see them reducing price to keep some of that sales volume with them instead of going straight to BYD and then I could see them also adjusting pricing in Japan and Korea and Singapore, in order to take some of that, what last year's volume would have been shipped to Europe into Southeast Asia?

Lei Xing:
Time is money, right? So reducing the delivery times, it's right, it’s, in essence, so.

Tu Le:
Yeah, and because that means cash too, right? Because if the faster you deliver your vehicles, the faster your cash cycle is.

Lei Xing:
The other, this cloudy with a chance of rain out into the future is this European utility prices? I think people should really take this seriously because I was talking to my source at NIO. And he said, Q4 and Q1 2023 2023, this is going to seriously affect supply. So watch out there. I think it's a warning and what's going on and Sichuan and Chongqing, right? This temperature is in the 40s Celsius, it's a bigger picture, bigger problem here. It's just this wave of issues that the industry is confronting one after the other. Chips seems to be, in the rearview mirror now. But there's these other things that continue to come at you. And we say many times, these companies delivering 10K or 20K on a consistent basis, it's not happening. It's because of these disruptions.

Tu Le:
And that means the domestics on the mass market level are going to have to make up for some of that volume in order to get to that 6 million unit sales target for 2022.

Lei Xing:
And going back to Li Keqiang, I think also what his comments is kind of reflecting the economic situation on the ground. So in a sense, he's saying we're going to continue this taxation preferential policy to spur consumption, correct? I think that's my kind of read that what the economy needs.

Tu Le:
And if I’m reading into that even further Lei, I’m thinking that zero COVID is going to stay around for a while, because the taxes are staying around for a while or the subsidies.

Lei Xing:
Right, subsidies, there's no final say, yet, it's going to end at the end of this year, whether we don't know there's been no discussions on that front.

Tu Le:
But actually, let me ask you this that's kind of out there, because unfortunately, I have not been able to keep up as much as I could have this week. Are you expecting any major announcements coming out of the Chengdu Auto Show?

Lei Xing:
I mean, not as significant, as let's say, an L9 or G9, like those, right? All these brands, let's say, one of the Great Wall Motor’s brand, Salon, right? It's going to announce their kind of the macho model. And then there's these legacy premiums will announce their, let's say, the EQE, right? Things like that. There will be new, definitely new models, but I think nowadays, you see the bigger or the more significant models being announced at individual events. Chengdu Auto Show is really more of a, even though it's an A-level, it's a once-a-year sales event. That's what I would see it as, right? Because on the first day, on the media day, you'll see salespeople at the stands, right?

Tu Le:
I think this is a great opportunity for folks that are just learning more about the Chinese EV economy to learn about some of these lesser known brands because that floor map that you posted on Twitter, it is peppered with domestic brands that we've talked about in previous episodes but might not be familiar to many other folks who don't listen to us. Like a NETA, like an AITO, 

Lei Xing:
Livan!

Tu Le:
Yes! If even I’m not that familiar with Livan. But a Denza, right? Like there's, and Denza is Mercedes and BYD, so it's not some tier-3 city SOE that's trying to build an electric vehicle. It is two major companies that joined together to build a new brand. And I bring up Denza, because two days before I left, there was a Denza parked in my parking structure. And one of the decals, it wasn't a decal, it was one of those logos. It was actually, one of those stickers, it wasn't like a, it was premium, and it was “designed by Mercedes.”

Lei Xing:
That was the Denza X I think that was unveiled at the 2018 Hong Kong, Macao, Guangdong auto show in June. I remember that very clearly because I attended.

Tu Le:
and I’d never seen a Denza in person up until that point.

Lei Xing:
It’s basically kind of a tweaked Tang.

Tu Le:
I noticed that, but because I totally forgot that Denza was the BYD Merc kind of co-lab. When I read that, I was like oh yeah that's right. Now, anyways, but unfortunately I’ve never been to the Chengdu Motor Show. I'm not going this year by the way, as you can tell. But it would have been great to see just immerse myself in more of the local brands because we get to see many of them in Beijing, but there still are some at least on the model level that I haven't seen in person, kick the tires, whatever, so.

Lei Xing:
Whatever happened to the Beijing Auto Show, it just nobody talks about it anymore because it was…

Tu Le:
Faded into the ether.

Lei Xing:
It was delayed, and then it's just gone, right?

Tu Le:
Honestly Lei, we both plan to be at the Shanghai Auto Show next year, but who knows what's going to happen with that, right? You hope that April next year, Shanghai will just be on solid footing, right?

Lei Xing:
Yeah. Well at least quite several events that we probably can get to go on this side of the world, at least. Just to be in that atmosphere, I always like it.

Tu Le:
There's probably two or three events that you and I would like to attend this year or next year in China, probably the Xiaomi event, the JIDU, you know the products unveil for Xiaomi, but like can you think of any other in the next 18 months new brands that are unveiling in China that we know about?

Lei Xing:
I think pretty much there's no.

Tu Le:
There's that one that ex-VW guy might be doing, right?

Lei Xing:
That one has been awfully quiet last few months.

Tu Le:
I've gotten my WeChats ignored, so which is quite unusual because those people normally like to talk.

Lei Xing:
Very quiet. So there's still going to be new brands that's for sure. But, right, Xpeng just I think they're putting these messages out that they’ll be 8 years old. So these smart EV startups, they're becoming old come to think of it.

Tu Le:
From, they're moving from hunter, moving to hunted from the hunter.

Lei Xing:
And we often talk about the legacy years versus the smart EV startup years. They're counted differently.

Tu Le:
We think about, so this year's NIO’s make or break year because of so many launches, next year will be Li Auto’s because of, or towards the end of this year, beginning of next with all the launches, right?

Lei Xing:
NIO still has a lot going on, right? The ES7, ET5, going to Germany and another markets. Their NIO Day probably going to announce the ALPS, their mass brand? CEO William Li, he's in the U.S., maybe he left, but he was in the U.S., right in their Silicon Valley San Jose office. And you can bet that this U.S. entry is now on the, it’s been on the radar.

Tu Le:
It’s on his mind, man. It is on his mind.

Lei Xing:
So it's going to get a lot more interesting.

Tu Le:
What he's trying to figure out is what BYD strategy is, either piggyback on it or ape it or beat it. One of the two.

Lei Xing:
Like John Voelcker said, if you're going to come in 2025, you now have 3 years to find out about what the U.S. consumers want.

Tu Le:
Yes. Other than that.

Lei Xing:
There was that weird Geneva Motor Show announcement.

Tu Le:
I didn't see that which one is that?

Lei Xing:
It’s being moved to Doha in November of all places.

Tu Le:
So it's not actually Geneva anymore.

Lei Xing:
The Geneva Motor Show being held in Doha.

Tu Le:
So it's like a zoom auto show.

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.