China EVs & More

Episode 85 - MOVE America Recap, NIO/Bin Li's European Tour, China NEV Market Keeps Rolling

October 04, 2022 Tu Le & Lei Xing
China EVs & More
Episode 85 - MOVE America Recap, NIO/Bin Li's European Tour, China NEV Market Keeps Rolling
Show Notes Transcript

Lei starts this pod out by talking about the MOVE America Conference in Austin, TX that he and Tu attended the previous week and move that onto their chat with Hesai at the conference. 

Tu then highlighted a discussion they had with a representative for Culver City who attended the conference in order to learn more about technology and startups that would be able to make his city safer. 

Lei moves the conversation over to BYD and NIO's moves into Europe. The unpack why they think William Li, NIO's CEO/ Founder is out in front for NIO's European launch. 

Tu and Lei close out the pod with a discussion on some of the lesser known Chinese EV companies that are taking share as a few of their more well-known counterparts continue with sales growth challenges.


CEM #85
Recorded 9/29/22

Tu Le:
Hi everyone and welcome to China EVs & More or 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 enthusiast and tune in again next week. 

My name is Tu Le. I am the managing director at Sino Auto Insights, a management consultancy that helps organizations bring innovative and tech-focus 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. Hey, Lei good seeing you again this week. Can you please introduce yourself?

Lei Xing:
Yeah, man, good evening from my side. I am your co-host Lei Xing, former chief editor of China Auto Review. This is episode #85, a special World EV Day/just returned from Austin edition.

Tu Le:
Happy World EV Day Lei, happy World EV Day.

Lei Xing:
Yeah. We were in Austin earlier this week for MOVE America.

Tu Le:
What do you mean earlier this week we're there today.

Lei Xing:
Yeah we were there today, we just returned to our respective homes.

Tu Le:
Great town, terrific event. It was smaller than some of these enormous events where you don't feel like you're able to check everything out and really get a feel for the companies, the startups, the themes. You know, you and I peeked in and out of some keynote, peeked in and out of some panels. I got a lot out of it, and I’m very glad we decided to become media partners for this event with MOVE America. And I’d be happy to do it again.

Lei Xing:
Yeah, it was, I guess they had three themes: technology, business models, and sustainability. This is first time for me to be in Texas, let alone Austin, enjoyed some of the cuisines their, barbecue, but I think for the, I’m going to ask you the question on the highlights, but I think for me was, I think there two probably, one was talking to the Hesai folks, the LiDAR folks at the very beginning on Tuesday. Then the other was just talking to these two guys from ModBike toward the end. And then everything in between, I think there were some moments were, I think some of the comments made were very interesting. So I’ll recap mine. So the morning of the first day Linda Zhang, we kind of met her again, she basically sit in that fireside chat that they approach this F-150 Lightning first as a truck, maybe not so much as an EV, but first, it's got to be a truck, because right, what, they've done their research. And then the EV comes afterward, right? The other one, there was the other.

Tu Le:
Let me add this real quickly, Lei. I think Ford should be applauded for taking that much risk for the golden goose, right? I think Linda truly believes that was the approach they took, but that's also the corporate communications team really, really leaning into that, right? Because 95% of F-150 sales goes to males between the age of 35 and 50 or something like that and so if they leaned into the EV side of an F-150, I think they would have really alienated a large portion of that market segment. And so I think they did a really good job, but they should be really applauded for threading that needle because of how important the F-150 is to their existence.

Lei Xing:
Yeah, so we said this before that I liken it to be the kind of the Wuling Hongguang, a popular model among really the masses, the regular folks out there. And similarly for the F-150, right? It's the Wuling Hongguang for America, kind of, so yeah.

Tu Le:
An $80,000 Wuling Hongguang. But a Wuling Hongguang nonetheless.

Lei Xing:
Yeah, and then the other one that I attended that you didn't get to attend was Eric Bach from Lucid. It was basically a live Tech Talk, you know the YouTube videos that they put out every once in a while. And all he talked about was efficiency. And I think one comment was interesting he made was, in the ICE age, we talk about MPG or miles per gallon, in the EV age, we only talk about range, rather than a similar mpg or what’s known as the MPGe for EVs. So he was talking about how they deal with efficiency. So that was kind of interesting. That’s Lucid’s approach. But I wanted to go back to Hesai because it relates to this news that they just announced yesterday, that they delivered 10,000 LiDARs in September. And I just realized they probably inadvertently revealed Li Auto’s delivery numbers for the L9, right? Think of it. Yeah. L9, remember, the other news is they just produce their 10,000th L9. So this is, I believe their first was produced on August 18, if I remember correctly. So it's 6-7 weeks. So I’m kind of doing the math here and really their AT128, I mean they have a lot of design wins, but really, it's the L9.

Tu Le:
Now you're talking Hesai again, the AT128.

Lei Xing:
Really, the L9 is the model that really has that AT128 in any significant volume. So hopefully, because Li Auto has been preaching this, has been bragging about it actually, that they would do 10,000 L9s in September. So we'll see whether that's, Hesai’s number is an indication.

Tu Le:
It’ll be “chabuduo” (about right), right, I think. And it also reveals that Hesai currently has effectively one commercial customer and that's Li Auto.

Lei Xing:
Well they have other ones. They have the HiPhi, Lotus ELETRE, but those are not produced yet, right?

Tu Le:
Well, and that goes back to what was it Billy, said, there's these announcements by these other LiDAR manufacturers that hasn't actually gone into manufacturing yet. And so Hesai has made several announcements with new customers, like you just mentioned Lotus, HiPhi, several others, but only Li Auto is going on vehicles and being produced right in scale, right?

Lei Xing:
And also to extrapolate a little bit. So they did 10,000 production yesterday. So there's obviously going to be a few days of lead time to be delivered, which means they probably will not get to the 10K deliveries.

Tu Le:
Right, so that's a timing thing.

Lei Xing:
So somewhere between, let's say, 9,000 to 10K, that's what we would expect.

Tu Le:
And the one thing I will say is that because you and I are so familiar with these Chinese companies, whether they're EV companies or tier-one level, tier-two level suppliers. But then when we talk to the western folks, it kind of reminded me of the Sandy Munro at the Charity Preview when we first start talking to them, they're like, who are you guys, right? And then we just like we don't name drop, but we basically know what we're talking about. And then all of a sudden they just open up like they literally want to hear everything we have to say, right? So I think that's pretty funny, but that's part of our job is to really educate the west that what, there are people paying attention, they're starting more and more, right? Because our audience is growing. So and one of the things I’m sure that we're going to talk about is that battery company that's potentially going to open a factory in Michigan, we're going to be even more relevant in the coming months, right?

Lei Xing:
Yeah. I don't know what about you, but the other observation I made for MOVE America was these all of a sudden, I guess these mushrooming of these charging or charger operators or innovators or whatever you want to call them headed by this bp pulse, which had that, I found out later that they had that event that we saw with the Polestar 2 right with their logos on the car that they just announce this new branding, which is basically the bp's electrification and charging brand based on an acquisition of this Amply, which was responsible to build up the charging for Hertz initially. So they will continue to do this for Hertz. I think it's like 100,000 chargers over the next how many years? It's an interesting play that they're not working with anyone else, but that Hertz is, you know.

Tu Le:
Since you brought Hertz up, if we take two steps back, let me take two steps back. We're seeing green shoots. We're seeing kind of random green shoots. We're not seeing a consistent across the board growth, but anecdotally, in Austin, two of the cars that I got into were Teslas that were being rented by the week.

Lei Xing:
Right. I was in one of them, right, we're in one of them, right? Was brand new, right?

Tu Le:
Effectively the numbers that they were saying they rent it between $500 and $700 a week and they make between $1,200 and $1,800 a week. So they make pretty good money being an Uber driver when they're renting the Tesla. So Hertz has something it seems you know?

Lei Xing:
Yeah, that's the Hertz and Uber’s agreement with putting on these Model 3s, right? Yeah, but the thing is these, like we saw the bp pulse, there was this flo, right? You saw that, right? There was this SWTCH, I think a company from Canada, you kind of feel the buzz or you can feel that they're stoked. I think partially because of the infrastructure bill, because of the IRA, I think.

Tu Le:
There's a mad dash for money. It's like San Francisco and the gold rush, right?

Lei Xing:
I think that's how we felt that you can see this push right in front of your eyes. It was not, right? It was a mobility, it was a business model, but the thing is it was hard to differentiate, really what they offered that are unique, right? That they're just, is it software? Is it something else? I couldn't tell, I mean there's quite a few of these charging.

Tu Le:
And that's the thing, right? Because are they just manufacturing the infrastructure and then having a third party manage the stations and manage the service, manage the user experience? That's what's really disparaged, because payments is a separate thing, the UX is a separate thing. And a lot of these companies that you've just mentioned, they're just manufacturers, right? They're just manufacturing and selling chargers. And on the back end, they get access to the data, but they're not responsible for the user experience. If you add a layer on top of that as a provider, a charging infrastructure provider and you're using multiple manufacturers, the UX can get really sloppy, especially if you don't have a seamless payment system. And so that is still really the big challenge, I feel, because anecdotally, we talk to people or you still read about frustrations, about going to chargers and either them being broken, parked.

Lei Xing:
I was speaking to one of the guys at the bp pulse booth. I kind of told him when I rented the Model 3 on Hertz, it was seamless, it was smooth. He nodded, and I said, yeah, they are the gold standard. And can they offer the same thing? And I doubt it, but it looks like it's going to be initially responsible for Hertz, build out the charging network for Hertz customers. So it's kind of like B2B almost. Anything else you found interesting or highlights?

Tu Le:
So I’m still on my tour of people I've spoken with a number of times. And now you've also had the pleasure of meeting Maggie and Roberto. So really enjoyed their enthusiasm and appreciate their enthusiasm and their brilliance. Because I think, so we're referring to a startup called Dreyev. They do driver monitoring. And so one moment that stuck out to me was talking to the city of Culver City representative and how he really needs to have a compelling argument to implement or integrate new technology into the city planning infrastructure, so that he in order to save lives. And I really appreciated that he was leaning into technology as an enabler to create a better atmosphere for his city. But his plight was that Culver City is one of the smaller cities in LA County. And he just told us that he wasn't, the Culver City just wasn't that influential when it came to the city of LA County and the changes. So he was inviting startups to explain how their technology can help the city. And I thought that was, I was super interested, engaged in that conversation because it was so random and organic, because it was literally the last panel discussion or the presentation of the second day. And after the presentation was over, we started hearing forklifts because the conference was closing, but then we were sitting in that breakout room where the presentation was still talking about for 15, 20 minutes, right? And the other thing was how this conference wasn't focused on cars. No, I think that kind of stuck out to me.

Lei Xing:
It was innovative business models and startups. There were a lot of startups with these right, Dreyev being one of them with its own very small, what do you call it, a table with the backboard? Only one person stand next to it to man the kind of the table, one or two persons, right? You kind of feel the startup mentality and atmosphere. 

Tu Le:
To my surprise, you knew one or two of them. I had not heard of most of them.

Lei Xing:
Yeah, the PreAct guy was interesting as well. They're trying to probably compete with the bigger tier-ones, or could be a tier-two supplier to the tier-ones.

Tu Le:
And upon reflection, you and I we notice there is a lot of these events all over the country over the next several months.

Lei Xing:
Yes. And actually another surprising thing, was, one of the guys we talked to at ModBikes, a local e-bike startup. He was like all long on Chinese brands, BYD, you know, he's like they're going to be number two behind Tesla. Like sometimes the people the knowledge that they know what they know about, he came up to me and he's like, who's number one in China, who’s number two, who’s number three? And I told him, good thing that I knew. It's like, see, you're Chinese EVs & More, you should know. They right, and it wasn't, the sometimes like I spoke to a journalist from Caixin in China and there's a lot of feel that there's a lot of hostility toward the Chinese brands. I'm sure there are. But right when you talk to these people, they're right, they're very open, which makes you.

Tu Le:
Lei, I just think that's a ginned up thing for politicians to really rally their bases a little bit, right? I think there are valid concerns and there should be certain commodities or certain services we should proceed with caution on, but by and large, if the legacy automakers aren't bringing the right products at the right price that give us the features that we want, then why wouldn't we open it up to other countries and other brands and other automakers? It just doesn't make sense because as Americans we deserve it, right? We deserve the best product we can afford. If that happens to be Chinese, that happens to be Japanese, so be it. But that's what the United States is built on: competition, right? And so I'm of two minds on that, because, and you and I have several private conversations every week about certain things, right? I think we have similar sensibilities. We might be looking at it from a different viewpoint, but I think our sensibilities are very similar. And because the irony of it, a lot of times is that, in my opinion, the Chinese government points fingers at countries when they do the exact same thing, right?

Lei Xing:
What I was slightly surprised was when you speak of these Chinese brands, that the people that I talk to, they actually know them. It's not like, who are they, they know them. So right, so it's the awareness is there.

Tu Le:
And to be quite frank, the two Hesai guys were white American guys, so they weren't Chinese guys, right?

Lei Xing:
There probably influenced by David, right, the founder & CEO, they know.

Tu Le:
Yeah, but what I’m saying is that they didn't send a team of people from China to sell to Americans, right? They hired Americans. So I think that's what you want.

Lei Xing:
Which is a good segway to go into BYD and NIO. Both of them are doing some things in Europe. BYD announcing the three models at a very high, I would say, surprisingly high pricing points for the three models. And William Li doing this, he's tripping man, he's doing this trip, 10-day, 10-city European trip and he's having fun with Lihong and meeting all these locally hired, right? That the user advisory board people, the managers, the people doing the operations.

Tu Le:
We're going to look back on this as their coming out party. NIO’s coming out party.

Lei Xing:
Everyday he's posting these things on the NIO app and he has to post twice one in Chinese and one in English on different apps. And you see him saying I’m becoming a wemedia.

Tu Le:
Well not him, it might not actually be him.

Lei Xing:
Yeah, right, but he does these trips and meetings. And you got to, somebody's got to sum up what he does. And you kind of see this European layout being presented right in front of you, right? Where he is, who he met, where there's a NIO House, the first swap station in Germany, right? All these things.

Tu Le:
I think an important distinction Lei, is that it is him. It is not the head of international for NIO leading that charge, it is him out in front. Yeah it is them out front. And this goes to show how important this foreign market, this European market is to NIO in order for Li Bin to achieve the goals that he set for NIO in his mind and his heart. He needs this market to succeed, right? It's a validation, but it's also a risk that he's willing to take because of the confidence he has and his team's ability to create and design and engineer product that not only Chinese customers will resonate with, resonates with Chinese customers, but will resonate with German or European customers. And I agree with you BYD at 75,000 euros, wow, that's a lot of money.

Lei Xing:
Because we have a chance to kind of compare, how the brands are being presented. What are the CEOs doing? And certainly, BYD is not at the level, well anyhow, it's not at the level of NIO as in terms of brand positioning. So the 72,000 euros, which is pretty much same as dollars, right?

Tu Le:
Yeah, right now, and pounds.

Lei Xing:
Yeah. I think I did some calculations, was roughly 50% above the pricing of Tang, for example, Tang EV, 50% higher. I think the pricing are for Germany. And they could be different in other countries, European countries, but you wonder, can BYD withhold that kind of positioning? And also whether that's deliberate? And I think it is and you said it is, right?

Tu Le:
But this is, there's premium, which would have been probably like a 60,000-euro price point. And then there's like, anytime you're hitting close to $75,000, that's hitting for the fences, swinging for the fences, right? And I know it's a stretch for me to think that someone would pay 75,000 euros or 72,000 euro for a Tang, right? So.

Lei Xing:
Anyways, I will have a chance to go to the Paris Motor Show. I will certainly talk to BYD and kind of hear what the local, the Europeans think when they actually officially, I guess, launch next month.

Tu Le:
I do know this Lei. Let's jump back to NIO for a second. There is no shortage of western and European media outlets that want to talk with Bin Li and Qin Lihong, right? I know they've been interviewed by the FT, Peter Campbell. I know the Economist has reached out to them, so they're getting exactly what they want. The media coverage and most of it has been positive. Now, a lot of it revolves around can swap stations work in Europe, blah blah blah. To me, that misses the point. But I’ll answer that question, I believe, because of the nature of the number of transactions that need to happen at a swap station, in order for that to become cash flow positive, I think Europe, in general, makes it much more challenging for swapping stations to be, and I’m saying swapping stations broadly as a general term.

Lei Xing:
  One highlight, I think William showed was him holding up a NFC card next to one of the chargers, and it looks like it's supposed to work, on like, was it 380,000 or 38,000, probably 38,000 chargers in Europe? Supposedly, so I mean he's on top of the game as far as thinking the user experience right, before the cars are even on sale.

Tu Le:
But think about this Lei. So if you were a charging infrastructure guy, and all you've had to work with up until now is the legacy automaker who doesn't want to bend and doesn't want to compromise and doesn't want to work together through partnerships. For NIO to come to Europe. It has to be refreshing to talk to them and say, yes, we want to work with you. We want to you allow our ET5s and ET7s to plug into your network, right? Because the legacies they, I guarantee you, they're just very frigid and rigid with what they want and only what they want, right? I just think that's the other part of where the legacies are falling down, right? They need to be more reasonable and take more risk with some of these startups or some of these lesser known commodities, whether it's a technology, whether it's a service. And what Mujeeb said, maybe it's too little too late, but Mujeeb said to us last week resonates with me still to this day. He said, before IRA, all the OEMs were just coming around, kicking the tires, seen seeing what our tech was all about. But now they're coming back saying, let's work together, right? Let's figure this out. So maybe that is the catalyst. Maybe the IRA is definitely the catalyst. What outcomes, and whether it's too late, we'll see.

Lei Xing:
Really, the number that stood out for me was William revealed, they have 720 + people working in Europe already, and most of them joined the company within the last half year, 6 months. So think about that.

Tu Le:
They've also, and I forget that gentleman's name, but he wrote EV newsletter. They hired him as an evangelist.

Lei Xing:
Yeah, Afonso, right?

Tu Le:
Yea Afonso, that's right. So good for him because he seems very passionate about the space. So.

Lei Xing:
The other thing is just how William revealed in his kind of journals, the selection of these NIO House locations. It's also a very deliberate process and who the partners are, how large it is, whether it's a House or a Space. And there's this, I think 110-year-old, seven-story building, the whole building in Amsterdam, 2,700 square meters that’s going to be used as a NIO House. I’m wondering this whole 10-day, 10-city, all these NIO Houses unveiled, the investment involved, just on…

Tu Le:
We talked about that, right? We talked about that. They're breaking the bank for sure.

Lei Xing:
Which I wanted to bring up, because we wanted to talk about the two IPOs, Porsche and LeapMotor. And one of the reasons why, Porsche was flat, but LeapMotor was one-third off the the IPO pricing was because for LeapMotor, at least that these companies are still losing significant amount of money, right? Part of the reason. And maybe the other reason was today the kind of the U.S. stock market was.

Tu Le:
But this is the retail consumer not really getting the automotive space, right? I think they're expecting technology kind of returns, right? But at the end of the day LeapMotor makes its money, generates its revenue by selling cars, right?

Lei Xing:
I think they raised $800 million and they were expecting twice that. I think, right?

Tu Le:
And unfortunately I have not finished my newsletter. I'll be sending that out later this evening.

Lei Xing:
Double duty.

Tu Le:
But I’ll give you guys a sneak peek. I think that LeapMotor should be applauded. Because when the C01 launched over 3 or 4 years ago.

Lei Xing:
The S01.

Tu Le:
S01, sorry, which was a undersized, underpowered, crappy little coupe.

Lei Xing:
January 3, 2019, in Beijing at the, I was there, at the Water Cube.

Tu Le:
I knew you knew that day.

Lei Xing:
Bause I remember that day very clearly how it was underwhelming because of the coupe, it was like, what?

Tu Le:
And they struggled for the better part of 18 months, right? And I saw one of them, and I was like, wow, first of all, it's almost as small as a Wuling Hongguang MINIEV.

Lei Xing:
You mean the T03?

Tu Le:
No, the S01, it’s small. It's tiny in images. You want it to be bigger and then you see it. And wow, not only is it a coupe, but it's underpowered and it's small. And coupes don't sell in China. Generally speaking, unless you're the brand name ends with "orsche," right? So coupes don't sell, two doors don't sell that well. So why they started up with a two door, but then they got a cash injection, I think several cash injections. And then they started hitting some singles and some doubles with two or three of their new products. And so I applaud them because I left them for dead and to get to IPO to me is quite an accomplishment regardless of how it played out during the first day of trading, so kudos to them.

Lei Xing:
So, by the way, so Hong Kong listed two other companies, I think CALB, the battery company, and even I think WM Motor is still trying to IPO like, WM Motor is way earlier than, I mean they are…

Tu Le:
There the one of the OGs.

Lei Xing:
Their potential was right, was well, much better than LeapMotor. But now.

Tu Le:
I think both you and I three years ago thought that they were going to be one of the leaders. So 4 years ago, not 3 years ago, 4 years ago.

Lei Xing:
It was interesting that launch event watch a little bit of it and they had this long interview with Zhu Jiangming, the guy who started the company who is also the chairman of Dahua, one of the leading surveillance camera providers in the world. They're based in Hangzhou. So they accumulated these kind of a ADAS, perception technology. And now they're using a lot of inhouse tech and hardware.

Tu Le:
But that's the thing, to me that is going to really follow them around in a negative way. So.

Lei Xing:
Also the pricing was quite aggressive as well. I think it was gunning for the P7, let's say Xpeng P7, a 5 meter around RMB200,000 with all those, the CTC, cell to chassis, the first model claiming to be to use that technology, facial AI ID recognition and all these are from their Dahua foundation. So.

Tu Le:
I just don't know how successful they're going to be in the western countries. I could see them possibly gaining traction in certain Southeast Asian countries eventually. But yeah.

Lei Xing:
Well we said last time that NETA, I think opened a showroom in a Bangkok.

Tu Le:
So because what Chinese EV companies are trying to do is disrupt the domination that the Japanese car companies have in Thailand and Indonesia, in the Philippines, right? Like, if you've ever been, and I’m talking to the audience here, if you've ever been to the Philippines or Thailand, all you see is Toyota, and Hondas, right? Like, but Toyotas, Hondas, they're coming late to the party when it comes to moving their powertrains over.

Lei Xing:
So speaking of the Japanese, I had tweeted that list of models that were either launched or went on presale the week since we last talked, last Thursday. And there's roughly, it wasn't exhaustive, but I think there's roughly like 20 models. And roughly half of those were EVs, which are really what we're talking about here on this show. One of them was the Dongfang Nissan Ariya. And what I see is their pricing was very aggressive. So the high RMB200,000 to the low RMB300,000. That's what I see on the Chinese chatter. And they're saying that I think this is really how you decide, the decision on pricing, the chatter was that this is probably done by the Japanese, that they had this authority on the pricing, because they were comparing this to, let's say, an ID.4, so that type of sized SUV.

Tu Le:
So this is what's going to happen Lei, the sub-RMB400,000 crossover, sedan, small SUV, even midsize SUV, they're going to do battle in China and only the best of the best. And it's going to be brutal and only the best of the best, in those few segments, sedan, small SUV, crossover, midsize SUV under RMB400,000 are going to make it out to Europe. They're going to make it out to the U.S., and they're going to do well because they have earned their stripes in the China market. 

Lei Xing:
Yeah. The locally produced Ariya is just the next model in line among the foreign brands that are likely going to hit, I don't want to say a wall, but you wonder, right, how well can I do?

Tu Le:
There are some headwinds for all the foreign automakers. 

Lei Xing:
I think so Volkswagen, adding all their ID. models together, is okay, but other than that, other who among the ones that have launched in in China that have gotten any significant volumes, nobody except Tesla, of course, but.

Tu Le:
And remember this is, the theme here is there are so many disparate things going on. COVID is still an issue because our friend, friend Yilei, he tweeted and he's always accurate. He's pretty much always accurate in my experience. And so he said that there are some breakouts or outbreaks in Shenzhen. But and then friend of the show Anders Hove, i'll reply to Anders after I get off this podcast, but he was surprised that I said 6.5 million in my LinkedIn post, but I think we can just print that. I think that's pretty solid number to get to 6.5 million units in China. And so if we think about it, if you'd told me that we're at 6.5 million units and Tesla is not running at full capacity plus overtime. And NIO is still struggling to get to 10,000 units. Li Auto is struggling to get to 10,000 units. I might not believe you, right? Because these guys should lead, should be growing like crazy. And so somebody's making up for that. And it's these other domestics that you and I talk about that aren't in the headlines in most western media outlets, right?

Lei Xing:
And the other ones on the list, really, if you look at the list, we talk about EVs, and really, each of those EVs has their own unique, whether is positioning, whether the kind of talk the talk that they announced. Let's say, right, the Rising Auto R7 is the next kind of this premium positioned, EV to be battery swappable, right? They have this new joint venture set up with SAIC and the two big oil giants that we talked about last episode on this joint venture swapping entity. The GAC AION AION Y Plus is kind of the OG for the GAC AION brand. And I guess one of those sales guys were saying this is going to be a 20,000 a month model. The Hongguang MINIEV Cabrio, RMB 99,900, but they're only selling this on a limited edition, like 100 or 200 a month. These are the unique and then LeapMotor, the C01 is, we already talked about it. The Haval H6, it's hard to believe, the Haval H6 PHEV is the first ever NEV for the Haval brand.

Tu Le:
I had to double take on that. I was like I couldn't think of any, but I was like, man, there has to be one, right? I saw that I was like, yeah, that's right, it is the first.

Lei Xing:
And our good friend Ash from Geely poses some RD6, the first production job one, right? And then a RMB 180,000 starting price point for 350 km.

Tu Le:
I'm a bit perplexed with the RADAR because it was announced only recently, so it didn't really get a chance to build that much excitement before it started delivering. So is that a missed opportunity? Because it's such a unique vehicle? I don't know. But Geely is just is trying to be as they're just churning out product left and right across a number of brands, right? The Polestar 3 is going to be unveiled.

Lei Xing:
In a couple weeks.

Tu Le:
And a reminder to everyone, the Polestar 3 will be built in both China and the U.S., in the U.S. it's announced pricing of around $80,000 and directly competing against the Cayenne.

Lei Xing:
Which goes back to the BYD model, the two models selling for 72,000 euros. Which would you choose if they are, right?

Tu Le:
And this is the crazy thing because Polestar isn't doing that well, in China, let's be frank, right? But I don't think most Chinese consumers would think BYD when they're shopping Polestar, BYD is counting on the European consumer to be able to do that, reconcile that, okay?

Lei Xing:
And then one model I missed on that list, interestingly, Toyota is in the news again, because I just tweeted, that Akio Toyota is in Las Vegas talking to reporters and he was in that stretch Toyota, what do you call that?

Tu Le:
TRD, racing something…

Lei Xing:
It's a stretch pickup limo, what the heck.

Tu Le:
Yeah, it was strange.

Lei Xing:
Yeah, so Toyota Mirai, they just announced in China, they're going to be selling a 50 units as kind of a trial through the GAC Toyota channel by the end of the year.

Tu Le:
And the Mirai is the hydrogen.

Lei Xing:
And they are selling for RMB750,000 a model. This is one side of it. The other is that they're going to put 111 of these Mirais that were operating in the Winter Olympics into ride hailing fleets in a few cities in China, just kind of to pilot, on a pilot basis.

Tu Le:
That's music to the Chinese government’s ears.

Lei Xing:
So you think the Toyota Mirai is expensive? But get this, the Chang’an Shenlan, the SL03, they have a hydrogen edition and guess how much that one cost: RMB699,900.

Tu Le:
Oh man.

Lei Xing:
So which would you choose, right? So the Mirai is only RMB50,000 more expensive. Which do you trust, right? So.

Tu Le:
RMB50,000 is around $8,000.

Lei Xing:
So we're seeing, right? This wave of products, I think one oblivious reason is we are in this golden September Silver October time of the year where I think these companies are trying to, before the, right, tomorrow or the day after, starts the October National Day holidays. So these companies are…

Tu Le:
So not only that Lei, the October holiday and then on the 16 is that very important day, right? October is going to be such an important month for the country. We're not even talking EVs. We're talking the country.

Lei Xing:
Unprecedented, right?

Tu Le:
Because we talked about this offline. There are a lot of rumors going on right now that are pretty much unfounded that when you speak to your folks on the ground in Beijing, Shanghai, other cities in China, I speak to my friends. Nothing seems to be changing at least on the ground there. So these rumors are pretty much just rumors. But ultimately, October 16 date is, if people are wondering, it's when Xi Jinping is supposed to get his third term as president of China. And after October holiday, we're going to see a mad dash again for sales.

Lei Xing:
And so I think these companies are just simply trying to push for exposure. And that's why you saw so many models launched the last few days, is right before this holiday break that everybody wants to push.

Tu Le:
And I’m glad you said that because.

Lei Xing:
Seasonality of it.

Tu Le:
Because Wang Chuanfu, Li Shufu, they couldn't buy the type of publicity that Li Bin is getting with his tour of Europe.

Lei Xing:
The way he does it.

Tu Le:E
Every picture you see him and he's smiling. He doesn't have a care in the world. And it is like it would be so uncomfortable to see…

Lei Xing:
That happening in China.

Tu Le:
Yeah, that but I can't think of any other Chinese CEO besides maybe Lei Jun.

Lei Xing:
Lei Jun, or Xiaopeng, or Li Xiang

Tu Le:
Maybe, but Li Bin fits it to a tee, right? He seems very comfortable on social.

Lei Xing:
And he's got a good sidekick in Lihong, where the other ones don't have this kind of brotherly, what you call it, right?

Tu Le:
I really do think they complement each other, I really do.

Lei Xing:
I think Lihong he speaks very good English, whereas William might be slightly worse, but they have a team obviously, but yeah.

Tu Le:
This is where you and I are kind of kicking ourselves because we should be if we are in China currently, we would be getting test drives of the G9. We'd be getting test drives of the L8. We would be getting test drives of a few of different cars, maybe that RADAR RD6. I'm sure we would get. But unfortunately, we are not there, but we do have some friends that I consider partners, I think, Mark’s very good at doing those reviews and things like that. So there are people, Elliot of course from Fully Charged, so.

Lei Xing:
So we're saving the best for last. So the L8 launches today, and then the ET5 starts deliveries, right, to people who have been waiting. So right, the last day of the third quarter, right? And then by Saturday, we'll see those wave of those bar charts, right?

Tu Le:
And then 10 days of calm before an enormous storm towards the end of 2022.

Lei Xing:
In the China EV space. There's no break, every day there's stories, there's news.

Tu Le:
So we blew past 40 minutes. I want to open it up to anyone. Please raise your hand if you have any questions or comments, apologies for Lei and I just.

Lei Xing:
We just ranted. 

Tu Le:
We're talking overtime. But if anyone has any questions, please do raise your hand. There were a lot of people posting about BYD’s pricing in Europe. And it sounds like you and I think that it's a touch heavy. The silver lining, I thought, was so my read was BYD seems very confident in their product. Probably also a reflection of the lack of competition that they really see. They don't have the baggage of those crappy cars from 20 years ago that were sold here in China under the BYD nameplate, in Europe. And so, but the one thing they cannot do specifically at that price point is have those types of mistakes that they made specifically in launching the ATTO in Australia with the warranty that will just be, the European won't forgive that. They cannot make those. So let's hope that the partners that they are working with, and I say that with an “s”, because the partner Germany is probably only good for Germany. The partner in France is probably only good for France, because remember, these are separate countries, separate languages, separate cultures. And so there's not going to be one service partner, there's not going to be one retail partner, there's going to be several. And that's where therein lies the rub for challenges, right? And so NIO is going to have that same issue, but I don't believe BYD has 700 employees in Europe right now. To help with that.

Lei Xing:
They do have the bus side of it, which is huge operations, right? So there's advantages and disadvantages.

Tu Le:
The last thing I wanted to talk about Lei, was a quick update on that Goion. They still have not confirmed, but the Mecosta County, which is Western Michigan. They have offered substantial tax breaks for Gotion over 10 years to incentivize them to build a factory there. I had a brief conversation with our good friend Steve LeVine. He wanted to talk to me about kind of the Michigan aspect of it and so he might be writing a little bit about that in his newsletter this week. The Electric, I think he reached out to some folks. There's a bunch of no comments. And so I think that's a reflection of how sensitive it still is and how, because it's not signed and a done deal that they're not willing to jeopardize the potential transaction at such a critical juncture. So.

Lei Xing:
So Tu, before I get off, I'm just reading this now: Tesla is going to reduce prices of the Model 3 and Y by as much as RMB40,000. Remember, this is the October 1 holiday, the National Day holiday. Tesla has done this before.

Tu Le:
They just undercut every single EV brand in China pretty much. 

Lei Xing:
Unconfirmed. But I'm seeing this Huxiu reporting and the Model Y rear wheel drive starting prices is going to fall down to RMB270,000 to RMB290,000.

Tu Le:
Lei, what did we say? Last summer? We said the exact thing, did we? We said there's going to be softness in demand and Tesla is. Oh my god, this is so predictable.

Lei Xing:
As much, as high as RMB40,000, this is being reported. So I think you can see Twitter blow up on this.

Tu Le:
Taylor is going to have a field day.

Lei Xing:
No I mean it’s how you look at it, right? But this is also going to affect how let's say Xpeng G9 pricing, these happenings, how these other competitors price their vehicles. That's the other effect, right?

Tu Le:
It's going to affect Tesla customers who bought 3 months ago, their residual values, right?

Lei Xing:
So both good and the bad, certainly.

Tu Le:
Like clockwork right? You knew this was going to happen because it and is this going to get them to the 93% capacity? Because I still hold my theory out that Berlin Giga is slow ramp, because Shanghai Giga is not running at capacity. So it was so predictable, but we told you so right?

Lei Xing:
This Huxiu article posted at around 8:30 pm now it’s already close to a 100,000 reads, views.

Tu Le:
And if this is true, foot traffic in Tesla stores is going to be massive during October holiday, massive. And I wonder if that means that weak lead time for all models is going to get pushed out now. And just so one thing that, one piece of feedback that I got Lei, that we should be both better about is translating RMB into dollars. Because sometimes we just talk in RMB

Lei Xing:
so 40,000 reduction would be like a $6,000 reduction.

Tu Le:
It would be more than that, right? Like it’s almost $7,000. So this isn't like a $1,200 reduction. This is like game changer reduction, where they're probably getting close to cost on some of the models, right? They're breaking all the pricing teams that all these Chinese EV companies are looking at this and saying, because the G9, the ES7, all these the L8, the ET5, I'm not that concerned about the ET5 and the pricing and the ET5, but the rest of these guys, they're like, we just launched this car, we can't reduce the price on this.

Lei Xing:
The L8 is launching, announcing the pricing in a few hours.

Tu Le:
They're changing it right now.

Lei Xing:
They must be thinking about it, at least.

Tu Le:
They're sharpening their pencil right now, or there's going to be some backend incentive, right? You order today, you order the next 30 days, you're going to get free this or that, right? It's going to be a non pricing-based incentive so that they don't mess with the pricing too much.  So anyways, Lei, always enlightening, always educational. Everyone, thank you for joining us. Good morning, good afternoon and good evening. 

Lei Xing:
Thank you all, same here. And we'll talk to you next week.

Tu Le:
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.