Episode 84 - Detroit Auto show recap, Gotion heading to the U.S., XPeng G9 & NGP update

In this episode, Tu and Lei start the pod out with a brief recap of their time at the Detroit Auto show with a quick pivot to reports that Chinese battery maker Gotion (Guoxuan) will be investing up to $3.6B in western Michigan. 

Lei moves the conversation over to GM's Durant Guild that is set to import higher end GM brand vehicles into China including the electric Hummer with the conversation moving quickly over to the XPeng G9.

Tu was able to join a call where President/Vice Chairman - Brian Gu and head of Autonomous Driving - Xinzhou Wu and updated the participants about the current G9 and its City NGP and how they will combine it with Highway NGP in 2023 to create XNGP.

The pod ends with a discussion about Li Auto and their product lineup and the quick response to customer requests and the recent additional responsibilities added to Ford Motor's Doug Field. 

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Transcript

CEM #84
Recorded 9/22/22

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 the China EV, AV and mobility sectors, we will open the room up at around the 40 minute mark to anyone who's keen to ask us any questions. 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 Sino Auto Insights, a Beijing-based, or  a management consultancy, a Beijing-based 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. Good evening, Lei,  can you please introduce yourself.

Lei Xing:
Good evening, Tu, Beijing/Detroit-based…

Tu Le:
Confused basically.

Lei Xing:
An asterisk there. Good evening from my side. I am your co-host Lei Xing, former Chief Editor of China Auto Review. This is episode #84. And I’m still thinking about the past week. Awesome newsletter you just pushed out today with that collage of photos. I was actually trying to do that, but thank you, you've done the work, so I can just repost those…

Tu Le:
Thousands of pictures that I took actually, I pulled a few off.

Lei Xing:
Yeah, I mean, my goodness. Where do we begin, right, about last week?

Tu Le:
It was actually pretty nonstop, I think, last week, right?

Lei Xing:
Up until the charity, well, after the charity preview, right? Even.

Tu Le:
Yeah, we had a nice dinner though, too, right?

Lei Xing:
We should talk a little bit about the charity preview because I think one, really, a person that we met was Sandy Munro.

Tu Le:
 Who's currently in Vietnam.

Lei Xing:
 Right, and I think he is probably one of the most vocal on the Chinese. If you've seen his videos and his comments on the Chinese players, basically, what he says is that they'll eat everybody's launch, right? So he's one of those, very vocal, and we showed him, you showed him all the sights and sounds in Beijing, all the cars that you got to see and right, and their jaws dropped.

Tu Le:
Yeah. Just over the last few months before I left right? So.

Lei Xing:
I remember him saying a lot of these companies are still sleeping.

Tu Le:
He was talking about the western companies, by the way.

Lei Xing:
Yeah, and I think this is the first time that we’ve attended the charity preview, you I, and it was right, good to meet some of the old acquaintances? Andreas Weller, he was the former president of ZF Asia Pacific. He, right there on the show floor, he pushed, he brought up his podcast, phone, and I just told him, look for China EVs & More, and he says, okay, I’m going to listen to it. And the other person was James Tobin, the former Magna Asia President.

Tu Le:
For you, it was definitely a reunion of sorts, right? So.

Lei Xing:
Yeah, and we nerded out with all the cars, with the tucks. We had a selfie with Bill Ford (Jr.).

Tu Le:
It was just the perfect ending to the week that was part automotive, part Detroit history, part Detroit rejuvenation, kind of my obligation to you and Justin coming into town showing you what I see. And what I feel is a huge opportunity that Detroit has, especially now that the IRA has passed and Biden came into town because as I wrote in my newsletter earlier, without Biden and us bumping into Ambassador Qin at the auto show, and the highlight was from a car standpoint, it was the Mustang. The launch of Gen 7. You and Ithink that it was kind of an evolutionary change rather than a revolutionary change. But the event with those hundreds of Mustangs was awesome, right? That was just kind of a car guy's dream.

Lei Xing:
By the time you listen to this, our audience who listen to this episode, the previous episode which we recorded together will have already been dropped. I think we're working on that, should be pushed out in the next day or two, I believe. And so there's two way for you to, our listeners to kind of see and read or hear what we did. So one is the pod that we recorded last week and two is the newsletter that Sino Auto Insights.com make sure to go on there, and read on your recap of the event, our get together trip.

Tu Le:
Yeah, and this is where cars were a part of it but weren't the key ingredient. There were so many other things going on with regards to mobility, number one, because we went to a pitch contest, saw 13 mobility startups pitch, about 12 judges or ten judges.

Lei Xing:
Yeah, and just so many things, really, I mean every one of them is, stood out. There wasn't, right, there's so many highlights, hard to pick one that was.

Tu Le:
We can't show any pictures, but we got to see the Book Depository in this Michigan Central Station and then on…

Lei Xing:
Very exclusive tour I would say.

Tu Le: 
Then on Friday, we came about half an hour late to Our Next Energy, because our good friend Steve LeVine had fat fingered the address for us.

Lei Xing:
Now we know where their locations are.

Tu Le:
Their global headquarters. We do know where the global headquarters are. And I actually think Steve just wanted some lone time with Mujeeb and team.

Lei Xing:
But anyways, coming back to this week, nonetheless, so much happened again since I come back from Detroit within the past week and I guess the most blockbuster of news is the Gotion’s reportedly $3.6billion investment in Western Michigan that was reported by Detroit News which you had shared initially.

Tu Le:
It hasn't been confirmed by Gotion. So I’ve spoken with a few journalists who reached out to Gotion.

Lei Xing:
Right and I’ve also reached out to a very senior level person within Gotion. He hasn't responded on the report. I sent him the report, but still, it's, as we say, it's beating CATL to the punch sort of, as also you said, it's in UAW territory, which is interesting. And also the backdrop is Michigan had lost to Kentucky, Tennessee, on some of the Korean battery manufacturing partnerships that Ford and GM had, right? So I think Governor Whitmer was a little bit criticized against. But for now, if this happens, this is huge.

Tu Le:
We have to remember that this is an election year. So there are likely going to be more of these pushed out or accelerated to perhaps make certain politicians look a little bit better, so.

Lei Xing:
It makes me think back to the Ambassadors Qin’s visit, he was at the Lincoln and probably later on at the Ford booth for quite a significant amount of time. And then later on that day or the day after Jim Farley tweeted a photo of him with Bill Ford and Ambassador Qin, right? Which says basically to the effect of the U.S. economy, right? This “China, this is largest auto market in the world, continued strong commercial relations between the U.S. and China are important for the economy,” and I quote, so I'm sure this is, I call it the automotive diplomacy or the EV diplomacy relating to what Gotion is possibly doing in Michigan. And with Ford, having the cover fire on CATL, I'm sure on the high up, there's been discussions, there's been lobbying of sorts, at least for, as you say, availability, right? I was just reading that article from Wall Street Journal on the rising lithium prices to over $70,000 per ton, because the EV sales are rising in China. So, so much is at play, especially the geopolitical juggling and CATL was due to make an announcement. But now we have this Gotion play. And I think the one wild card is Gotion is 26% owned by Volkswagen. So now that's different a bit different from some of the other Chinese companies, right?

Tu Le:
Yes.

Lei Xing:
And we have speculated who it might be based on that previous announcement, of a, major U.S. listed automaker that they had announced last year, Gotion had announced last year. It can only be one of the Big 3 or Rivian. There's nobody else, right? It couldn't be Faraday Future.

Tu Le:
Right. Faraday couldn't afford them right now.

Lei Xing:
Well Faraday Future, they announced the EPA rating of the 381 mile FF 91 and saying that means it's closer to market launch. But good luck.

Tu Le:
There's a lawsuit right now between Faraday employees and some of the board members trying to get them kicked off the board. So there's always drama with Faraday.

Lei Xing:
And also from that article, I think what I got was there's this strategic outreach attraction reserve fund that's about $1 billion, and three-quarters of it is given to GM, $100 million to Ford. And there's this like $200 million left. That in the article, it was speculated that could this be for Gotion, right? So there's this investment incentives.

Tu Le:
One thing that I wanted to emphasize is we shouldn't miss the forest from the trees, because what I’d written in the newsletter was this effectively closes the door on, if, China battery Inc. is coming because we kind of heard about CATL, kind of know about BYD, and now this is a third battery cell manufacturer from China that's talking about entering the U.S. market. So those if questions should be closed for good, and they are going to come to the U.S. at a certain point in time, regardless of whether the relationship between the U.S. government and the Chinese government is good, bad or different. The market is too large, the opportunity too lucrative. Now, it's just finding the right partner that will give them that cover fire, the political umbrella that they need, but also on the local. So if we're looking at the U.S. government federally versus the local state governments, $3.6 billion, it gets you a lot of jobs. You approach a city or a State with that type of investment…

Lei Xing:
Two thousand jobs, potentially.

Tu Le:
Then they're going to be receptive. So it's all politics is local, right? So again, I speculated whether this was the Detroit News with a scoop, whether it was Gotion sending out a trial balloon to see how it would play out in public, or if they're actually negotiating in the media with the Big Rapids or the regional Michigan government to try to get a better deal, right? And so it could be all three, it could be none. But…

Lei Xing:
Here's a question, maybe for you, or we can discuss, let's hypothetically say, this is confirmed. Let's say that lead time, it's a long lead time, right? From confirmation to actually start producing and supplying. That'll take, I don't know how many years.

Tu Le:
Let's say, 30 months.

Lei Xing:
Right. Even then this play would probably, you know the IRA there's two requirements, one on the battery components, and one on the sourcing of the materials or minerals, right? This would still, this might work for the battery components side of it. But what will end up happening is whatever cars are equipped with Gotion batteries is, still misses that mineral requirement. So what we're looking at no matter, no matter if BYD produces in the U.S. or CATL, that the other half of the equation, it really can't be addressed. And what's going to end up happening is if I'm a consumer, I won't get that half, or the $3,750 part of the subsidy, right? The credit, correct?

Tu Le:
Yeah, because battery manufacturers on the battery cell side also get a rebate, because we talked to Mujeeb about that, right?

Lei Xing:
Right. It's $35, possibly $35 + $10, right, per kWh. And he had to confirm with one of his, I guess, government relations,

Tu Le:
Yeah, the head of government relations. He got her on the phone while we were sitting there in the conference room, so.

Lei Xing:
That was interesting, but…

Tu Le:
Because it was Steve that actually brought it up, it was either or that he thought it was either or, but it's an additive thing where it could be a total of $45.

Lei Xing:
Considering the midterm elections, concerning the Party Congress next month. There could be, depending on the timing that, I wouldn't be surprised if I think there will be more announcements before the end of the year from another company.

Tu Le:
I think so, too. The other thing Lei, that, I think is important to know is that there is likely going to be reaction from the Chinese government, too. Now, these battery cell manufacturers have likely vetted investments into the United States with the Chinese government prior to any of these announcements. But if they leak on the U.S. side before they're completely approved, then there could be problems. Or depending on backlash locally in China, the Chinese government could also then change their mind about whether they like this or not, right? But if we get into the 30-month timeframe that we think job one would roll out of a Gotion factory in Big Rapids. That's right when a GM is launching the Blazer and getting up to mass production, the Equinox, the Hummer. So at least just on the Chevy side for General Motors, they have a lot riding on basically one supplier, one cell manufacturer. And so I don't think they would feel comfortable single sourcing cells from one battery supplier, so.

Lei Xing:
Speaking of Hummer, so Hummer EV will be imported through that Durant Guild, which launched, I think earlier this week with the interesting that they had a streaming, of the Chinese actor, that was strange.

Tu Le:
That'll be one of the biggest cars I’ve ever seen in China. 

Lei Xing:
We saw that, we saw that at the Charity Preview and at the show, right?

Tu Le:
So it is a humongous vehicle.

Lei Xing:
And it's interesting besides that, then as the other gas guzzlers that they're importing, the Taho, Yukon, Corvette, Silverado? It's an interesting play. I don't know how it will play out, but from the show that they put on, I didn't feel like there was a mesh from the actors or the actresses that they chose. It just didn't, like when you live in the U.S. and see these big trucks. I mean.

Tu Le:
I know some of the agencies that worked on those marketing campaigns. So it's trying to build history into a China market that doesn't know who, I think we joked about it last week, right? That they probably don't even know who Durant is, so, you know, building excitement, but it's like a combination of a heritage and excitement and new technology, not new technology, but new vehicles that are hard to get. So it's not going to move the sales needle for sure, but it is what it is.

Lei Xing:
But anyways, Gotion. So one of the big stories and the other one obviously is Xpeng G9. That one word I would use is it's kind of underwhelming or a thumper.

Tu Le:
No but I think that $45,000 price point is pretty, makes it pretty compelling.

Lei Xing:
Yeah, we had a discussion on WeChat with Will who just test drove the G9 I believe, and his and myself included, conclusion was, the pricing based on the feature. So this is one of the things that I think was turning off people. And Will and I weren’t the only ones. I looked at the Chinese media chatter, a lot of people think the pricing will be an issue because the way how they optioned it in terms of price points. So they had these three things that you had to purchase as an option, the XNGP, the 5D music cockpit and one of the other things was… 

Tu Le:
Hold on a second, Lei. So the 5D music and gaming cockpit is basically like a movie where there's the 4D where the with a seat shake and the water mist your face and so they put that in a vehicle. They put that in the G9.

Lei Xing:
Right. And then the other one is the 4C super charging battery pack which you have to pay RMB10,000 more. So there are three of these options that you could play with, but.

Tu Le:
So they did kind of the opposite of Li Auto. They kind of nickel and dime you with options, right?

Lei Xing:
So what happened is a lot of the features that they showed at the launch event will not be available in some of the lower trims. If you upgrade, so that RMB309,900 model, really, has nothing.

Tu Le:
It's pretty bare bones, no options.

Lei Xing:
Nobody is going to choose that probably. And the only model that offers the 4C charging is the 650X which is RMB450,000, that's the only one that even offers that. So initially, the other models that will be on the market will be 3C so it's not going to get that, let's say that the 10 minutes, I don't know, 5 minutes 200 km. So and we also, you were on that call with Brian. Maybe you want to share some of the comments he said on…

Tu Le:
Right on, so I see that a friend of China EVs & More, Elliot Richards is on. I would invite him on. Because I did watch his 11-minute video of his drive through the G9. So Elliot, if you are listening actively, we'll pull you up in about 15 minutes so you can tell us what you think, number one. And then number two, we were both invited to the media call with Brian and Xinzhou, who's the head of their autonomous driving unit. He was actually in the U.S. so he missed about 20 minutes of the call and then jumped on a little bit later, but this was a media call to discuss all of the announcements, the G9 launch, the fast charging. Are they calling it fast charging Lei?

Lei Xing:
Super fast charging.

Tu Le:
Super fast charging, and then.

Lei Xing:
Super charging. Let's just put it as super charging.

Tu Le:
So basically, Brian kind of gave us an overview of the announcements, and then it was Q&A and Marie was coordinating who asked or who could ask questions. And so when my turn came, I basically asked, my first question was, why did city-NGP take so long? And he didn't say there were any technical issues, but he did say that there's always a regulatory review because city-NGP or NGP involves HD maps. And so he said Guangzhou took a bit of time to approve the HD map. And that was a big part of the delay, he said, and he also said, next year, highway NGP and city-NGP will be combined. It'll be called XNGP and they'll move from the NVIDIA Xavier chip that has about 30TOPS to the Orin chip, which will move to about 500TOPS. So we're talking light years and lightspeed versus the Xavier chip. And so he mentioned next year the G9 would have that option. So I’m assuming that it'll cost more than the RMB28,000 that you had mentioned in a tweet. I think, so.

Lei Xing:
Well, RMB28,000 is the XNGP, which in their presser, the fine print. I tweeted that “in most cities by 2023 and full point to point by 2024,” whatever that means.

Tu Le:
So this is what Brian said. He would like to see the roll out of city-NGP one city per month in China.

Lei Xing:
So Guangzhou they recently announced the pilot right, still on a pilot basis, not actual.

Tu Le:
Right. And so they're working with obviously on getting that regulatory approval for the HD maps for every other city, it looks like. And then the second question I asked when he came back around to me was the challenges they've had growing, building the reputation internationally. And I said, I’d heard that there was disappointing sales in in Europe. And he was like, we don't have a sales target per se. And so I pushed back a little bit on that but, it sounds like they're pressing reset a little bit on Europe. I think they're going to rely heavily in the next 12, 14, 18 months on the G9 to be a catalyst for the European market since the G9 was designed as their global car, so.

Lei Xing:
Right, the first global car. And then one of the other features, I think, was that at least the Chinese consumers they care quite a lot about is the air suspension. I think it was. If you wanted one with that feature, I think the lowest price point was the RMB399,000, so.

Tu Le:
I just don't know why they do that, why they make things, because NIO did that too, like had like 3, 4 or 5 different option packages that just seemed confusing.

Lei Xing:
Yeah, I think this was one of the things that was talked a lot about and especially a day after Li Auto pushed out this L8 launch with the teasers on the L7 and L6.

Tu Le:
Yes.

Lei Xing:
And how they do it, right? In terms of positioning, price point, the RMB500,000, RMB400,000, RMB300,000, and what they included. So one thing that the L8 I think was interesting was they had this Pro or Max versions, right?

Tu Le:
Ala Apple.

Lei Xing:
And one of the difference, if you read it, was, I think the Pro had the Horizon Robotics chip, Journey, I forgot if it was Journey 3 or 5, but if you wanted a higher, better one, the Max, the Max had the Orin chips. So that was interesting. But Li Auto was one of the first to have the Horizon Journey chips anyways.

Tu Le:
Well, it's a match because they're both Beijing-based companies.

Lei Xing:
And so He Xiaopeng is saying this is, right, in the launch event, he likened it to the Cayenne, anyways, RMB500,000 and below the best car you can buy. But at the end, he said we're going to beat the Q5 in sales next year, 10,000 a month. And then so Li Auto comes right back. So this is, I tweeted that this is just the cutthroat nature. And you said in the chat that there's no breathing room. You launch something that you think is the best out there. Next day, some somebody else comes right back with a challenger.

Tu Le:
In Li Auto’s case, three challengers.

Lei Xing:
A couple of days before, Li Auto also pushed out some OTA upgrades that they're going to do in the not too distant future is on the L9. So they've delivered the L9 for some time now, they've already received feedback from their owners or customers. And they already announced several feature upgrades that they're going to push out. Imagine a Volkswagen doing this, imagine the legacies is doing this. That's why I said…

Tu Le:
I can't imagine that because they can't.

Lei Xing:
The way that the competition is, how these companies react to their owners requests is just, right, we talk about the smart EV startup times, light years ahead of the legacies.

Tu Le:
And it sets an expectation too, that if you want to attract a Chinese consumer, you have to be able to also read and react very quickly. And if the vehicle isn’t attractive on the feature side, you can't keep up with the velocity of changes or updates being made on the software side. You're basically out of the game completely if you're a legacy automaker in China, right?

Lei Xing:
Right. I mean you showed some of the videos to Sandy Munro, and he was like, whoa, of the HMI for the Li Auto L9, correct?

Tu Le:
It was, it was just funny because he and this was admittedly, he was like, who are you guys, right? And so then we talked for about 2 minutes and then he just kind of just embraced us. And he's like this is fantastic. I just showed him a handful of pictures, and then he knew we were legit. Then he just started like talking to us and then gave us his QR code for his contact information and all this other stuff, right? I thought. I thought that was the funniest thing because he was completely by himself, except for his handler. So no one else was talking to him or paying attention to him. So I thought that was a little bit weird, but maybe he's persona non grata for the legacies there, right?

Lei Xing:
But he did mention, our good friend Elliot is here. And the previous weekend they were at the Fully Charged live show in San Diego and everybody was coming up and talking to him. So that shows you the contrast of I guess Detroit and other more EV places I guess.

Tu Le:
Right. And if you didn't hear earlier in the show, he is headed or he is currently in Hai Phong visiting VinFast.

Lei Xing:
Yeah I see a lot of people over there, I guess, maybe for the same event that VinFast is doing.

Tu Le:
If you want to take a trip to Vietnam, let me make a call man. All you got to do is say yes, and we're heading to Vietnam.

Lei Xing:
Man and it's right next to China and you can't go back, which makes me sad.

Tu Le:
And then maybe we wait until Taylor's in Shenzhen and then, he can meet us over there.

Lei Xing:
The other thing is the G9 starting deliveries in, at the end of October. And Li Auto comes out with this L8 launch on September 30. And remember they had said the reveal is the launch. So launch on September 30 and then delivery start at the beginning of or at least in November. Now it will be interesting to see what Li Auto claims as the first choice for consumers of a RMB400,000 and below 6-seater SUVs versus the G9.

Tu Le: 
This is craziness, absolutely crazy. This how much pressure has Li Bin and Li Auto and Li Xiang. They're out there taking pictures in Munich, right, in freaking Oktoberfest.

Lei Xing:
Li Bin, he just shared a post or thread on the NIO app, Chinese app. So he's in Germany with Lihong, the co-founder and president, and he's doing a 10-day road trip on a ET7, starting yesterday. So they went from Munich to Frankfurt, and then today from Frankfurt to Dusseldorf. I guess next they'll be going to Amsterdam, the Netherlands…

Tu Le:
Culminating in the big event in Berlin on October 7.

Lei Xing:
Oh, okay, yeah, I'm not sure if they're going to stay there for that long, they might, but…

Tu Le:
Yeah, so there's a big NIO event on October 7 in Berlin.

Lei Xing:
It's like a NIO Day for Germany, right? Good thing we can watch it at noon our time on the 7th.

Tu Le:
There's a good chance that they may be part of, they may be interviewed for an Economist article coming out in early October, because I connected a NIO person to Simon Wright and Ludwig Siegele, who are doing an article on EV and software that for the Economist October issue, let's see if they're able to pin down Li Bin or Qihong, or Lihong, sorry, Qin Lihong, that's right. Oh man, it's like NIO’s out there, just chilling in Europe while freaking Xpeng and Li Auto are like brass knuckle brawling in China, so.

Lei Xing:
Well, William has said in a previous earnings call that they expect record Q4 every month. So is he home free, we don't know, but looks like he's having fun. 

Tu Le:
But both, so let me give a little bit of background on this whole, announce on Sunday, sell on Monday. So automotive companies in the United States traditionally, then this had to do a lot to do with NASCAR. If NASCAR races were on Sunday, and you won, so like win on Sunday sell on Monday, okay? This is kind of what Li Auto has getting back to. We're announcing the day before, and then we're going to sell the day of. When Steve was still alive at apple, that's what he always wanted to do. So at Mac World and WWDC when he made these announcements, he wanted to be able to say and we're starting to ship tomorrow, right? And so Apple's gone away from that, but it looks like Li Auto really wants to go back to you know what, right when we announce it, we're going to drop and start production and sales the next day.

Lei Xing:
So I think the conclusion is for the G9, they have their work cut out for them. Because of the price, you believe the price is actually okay, but really the comparison is at those price ranges, what are other competitors offering? Maybe they're offering more than you, so that might be troublesome. And for Li Auto, they're kind of due because they had a disaster August because of the ONE was done, so to say.

Tu Le:
But they might actually have a pricing issue, too, then, right? Because depending on what the L8, L7, and the L6 is priced that, because now we're talking smaller and smaller versions of effectively the same car. How are they really going to separate all these different, because they're all going to be EREVs right? Because I think all the L versions of these vehicles are EREV.

Lei Xing:
L designate the EREVs. That's correct. But also just surprising or I wonder we've only heard really the L7, L6 within the last, I know L7 was talked about some time ago, but it looks like the Chinese saying for this type of thing is “xia jiaozi” which means dumplings, you throw dumplings into the water to boil. This is what Li Auto has done. And I wonder if that was planned or not. Like sometimes these companies they tease these models, but all of a sudden Li Auto is like, oh, we have these, now we're going to launch them.

Tu Le:
The L8 looks almost exactly like the L9

Lei Xing:
It's a little L9 and L7 is the little L8, and L6 is the little L7.

Tu Le:
And people thought the Audis really look similar, but the L9 and L8 are spitting images, there is not really if I’m looking at both, I don't own an L9, so I can't tell detailed wise what the differences are. But if I just look at both pictures, I don't know what the difference between them are. I think some of some differences in the front fascia, but it yeah, there's definitely, we know that they're not great at positioning and differentiation because if they were, then the ONE wouldn't stop production effectively because of the L9 production. So these are startup growing pains, right?

Lei Xing:
But so as I said, conclusion is both are work cut out, work cut out.

Tu Le:
Hey Lei, so we are at 9:47. I will, let's open the room up for anyone, because I know last week we weren't around. So if anybody has any questions, they can just raise their hand, Elliot, if you're listening, feel free to raise your hand. We'd love to hear from you about the G9, your experience. I watched your 10-minute video. So I recommend those folks who are curious about the G9, the Xpeng G9 to watch Elliot’s video as well, but will open the room up for any questions. But the one thing that we can also talk about is, I don't know if you saw that Lei, but Doug Field from Ford, he got another promotion, so.

Lei Xing:
Added duties. 

Tu Le:
He, yes, he looks like he's basically trying, Jim Farley is trying to make Doug Field Ford’s savior effectively, so.

Lei Xing:
I think that press release, it seems that they were banking on getting the software with the some of the other hires, I think.

Tu Le:
Yeah Ross Ho and Jay Park, yep. So I think these are remember a long time ago probably right when we started this podcast, I had said that we need to see legacies hiring software, I mean tech people to be in leadership roles. And that's what we're seeing now, right? I think it's great. The one thing, the John Lawler taking over global supply chain that seems a little a little bit weird because.

Lei Xing:
But then the other story was the $1 billion charge that on Q3 on a supply chain, they have what, thousands of vehicles sitting in the lots, which drove share prices, right, one of the few times that Ford had lost how much, percentage of, right? Tanked the whole stock market or something is one of the FedEx moments of last week, right?

Tu Le:
Yeah, and it's Hau Tai-Tang is leaving October 1st. And so I think Doug is quickly going to become the hero or the goat in the next 14, 18 months, but I don't know if it's even worth mentioning, but you saw that post that you had tweeted about Ford potentially producing Broncos and Rangers in China?

Lei Xing:
I did ask my mole and his reply was that'll be nice, but I don't know. Because he drives a Bronco Sport, which is nice. I got to sit in it for few minutes.

Tu Le:
Dude, what are you talking about? We did that thing in the auto show.

Lei Xing:
No, no, no, that's a different thing I’m talking about just everyday driving. So…

Tu Le:
But Ford looks to be getting much more aggressive, generally speaking, right? Yeah. They have two important products. I think the Mach-E. I don't see that being a volume seller like they need it to be. The F-150, yes. But the Mach-E, it'll sell, but I don't know. They don't make profits off of any other vehicle. I don't know how that's going to change or transform because with their current products. The one thing that we saw while you're in Detroit was the Chevy Blazer was everywhere. Yeah, and so that bodes well for the electric version, right?

Lei Xing:
Hopefully. So some of the other headlines, I think EV, AV related was the CATL had a lot of news pushed out. They were at IAA Transportation in Hannover. They launched some commercial applications, commercial vehicle applications. They have this two new acronyms, MTB and MTV, for trucks and buses, I think. And also, they reached that agreement with this storage, energy storage, the 10 GWh. That's a lot, I think, for energy storage, FlexGen, I think. And also the LeapMotor right, their Hong Kong listing and their C01 launches next week and they already have 100,000 preorders reportedly for that car. Just….

Tu Le:
They are also building excitement for their IPO later this year, right?

Lei Xing:
And I think the other big news that dropped this week was NVIDIA Drive Thor with the 2,000 TOPS. And ZEEKR, again, is the first customer of that SoC but that'll be in 2025. And QCraft is the first AV platform to use NVIDIA Orin chips on their robotaxi fleets.

Tu Le:
They partnered with an SOE right, QCraft did?

Lei Xing:
Yeah, one of the SOEs.

Tu Le:
I forget which one, but we're going to see more of that.

Lei Xing:
Pony.ai teaming up with the Geely CaoCao Mobility in launching services in Suzhou.

Tu Le:
We haven't heard much from Pony lately. That's for sure.

Lei Xing:
Yeah, I guess the battery swap from Rising Auto that SAIC formed a company with two of the biggest oil giants in China to do this.

Tu Le:
There is the big pivot, there goes the big pivot right.

Lei Xing:
It's NIO led the way and people are following.

Tu Le:
So whether or not it's a thing in the rest of the world. It is a thing in China.

Lei Xing:
And also on September 28, the LeapMotor C01 launch and the BYD Europe product premiere and Hertz, the other big story: Hertz, buying up to 175,000 vehicles from GM.

Tu Le:
That's right. So you had, didn't you do the calculation? Tesla was a 100,000.

Lei Xing:
340,000 together with Tesla and Polestar, and Volvo EX90. They had that event with talking about safety.

Tu Le:
And then you also saw, and these are just quick reviews, guys. We're flying through, apologies, but SK, was that SK that invested a bit of money into Polestar. I don't know if you saw that.

Lei Xing:
I didn't see that.

Tu Le:
So they have a fund that they joined with Geely on. And the invest is a small bet into Polestar. And that's all I have today. I'm looking at my newsletter. Nothing. One of the last things is the Made in China Model Y is number one for resale value after year one in China. And it holds about 89% of its value after year one.

Lei Xing:
Speaking of percentage, one number, I probably will post this later on Twitter that speaking of the CATL, you know they are the monopolistic when it comes to battery swappable heavy duty trucks in China. So they supply over 9 % of the LFP batteries on those battery swappable trucks.

Tu Le:
So they're basically the only game in town.

Lei Xing:
And the other ones are really, I think there was EVE and maybe CALB. Also the Mercedes-Benz trucks with the long haul, eActros long haul and right, Nikola with some of the hydrogen trucks. So just so busy and everywhere and beause we don't look at China anymore. We look at the globe. And there's just too much going on every week.

Tu Le:
Why don’t we do some housekeeping, you can talk about us being in Austin next week.

Lei Xing:
Yes, so we will be in Austin next week for MOVE America. So it's like a mobility convention conference. There's all sorts of topics. We're a media partner, so we'll be there next week, early next week. And I guess we'll network and we'll see what's going on and how it's different than Detroit. First time in Austin, I think Austin, one of the concept cars of NIO, the EVE, I think was had its global debut at one of the South by Southwest. I think it was March 2017 if I remember correctly, in Austin.

Tu Le:
We'll try to find our next MAX, one or two MAX guests out of this Austin visit. And I'm looking forward to it. I think there's going to be a lot of interesting people down there.

Lei Xing:
And also I got in touch, back in touch with Shakeel Avadhany, the founder of ClearMotion, the Boston-based and I had met him in Beijing a few years ago. And they just got an investment from NIO Capital after, 10 years after he found in the company, so I told him would love to have have you on the part. 

Tu Le:
Yeah, so that's all for me, man. No other questions. Maybe we can close out the room.

Lei Xing:
Yeah, it's, feels weird that, to be doing this, virtually again. We had fun doing it in TechTown, but I guess there's still lots going on and next week, but I guess next week we'll be back to our respective places on Thursday and will recap Austin and some of the other news coming out of the China EV, AV mobility space.

Tu Le:
It is a little weird because I can't believe it's already Thursday of this week. So anyways, alright, guys, good morning, good afternoon, good evening. And thanks for joining. We will talk with you all next week. 

Lei Xing:
Likewise, thank you. 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.