China EVs & More

Episode 92 - LA Auto show edition: Cruise Automation ride, Bumping into People, Motor Trend's Coding the Car

November 26, 2022 Tu Le & Lei Xing
China EVs & More
Episode 92 - LA Auto show edition: Cruise Automation ride, Bumping into People, Motor Trend's Coding the Car
Show Notes Transcript

The pod begins with Lei having just returned from LA while Tu was still  there after they'd spent the last few days doing a NorCal & SoCal trip.

Tu and Lei begin with a detailed discussion about their (two) rides in the GM - Cruise Automation's driverless robotaxis in San Francisco.  They went from Japantown to Sunset at ~10pm in the evening.

Tu and Lei move onto congratulating Henrik Fisker and team for getting the Fisker Ocean to Job #1 in Austria (with a lot of help from Magna) and then Lei highlights some of the people that he & Tu caught up with at the LA Auto show events. 

They then have a broader discussion on the LA Auto show and some of the breakout rooms and events they attended during that week including the Motor Trend documentary 'Coding the Car' and Tu shares his 'review' of the documentary.

CEM #92 Transcript
Recorded 11/18/22


Tu Le:
Hi everyone and welcome to China EVs & More where my co-host Lei Xing and I will go over the week's most important and interesting news coming out of the China EV, AV and mobility sectors. This week's edition is a little special because Lei just got back from LA and I'm still in LA. 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 management consultancy that helps organizations bring innovative and tech-focused products and services to the transportation and mobility sectors. I write a free weekly newsletter that we pull many of our discussion topics from. You can sign up for it at sinoautoinsights.com, which I encourage you all to do. Lei, good evening, no, good morning, and saw you what, 12 hours ago. So it was a good week for us, I think. So, please introduce yourself. 

Lei Xing:
Good afternoon. It's just past 12 pm here on the east coast. I just got back from LA, literally stepped into the door 30 minutes ago. And yeah, this is your co-host Lei Xing, former chief editor of China Auto Review, and this is episode #92. Before we get into the LA-Bay Area-San Francisco-back to LA trip. This is a special day, it’s the 28th birthday of BYD and a few days ago, they just produced their 3 millionth NEV, passenger vehicle NEV, a major major milestone, so a big shout out to BYD.

Tu Le:
Yeah happy birthday and congratulations, gong xi!

Lei Xing:
For anyone that's doing math. It's 107,000 per year in the past 28 years to get to 3 million units, on average.

Tu Le:
Which of course is not the reality, but…

Lei Xing:
Right. The significant thing is they got to 2 million in probably close to 27 years. They got to the third million in what, a year or so, pretty much?

Tu Le:
Since we're talking about a Chinese company in China, we are calling this NEV so this includes their plug-in hybrids.

Lei Xing:
Plug-in hybrids. That's correct.

Tu Le:
PHEVs, ok? So don't give us crap for comparing any BEVs to BYD because we are including the NEVs since we're talking China.

Lei Xing:
So big congrats again. And back to our trip, I mean how do you top the Detroit week that we had back in September? I guess you do it by going out west. So let me ask you, what were your highlights?

Tu Le:
So let me qualify this, because it was funny. We have a mutual friend that we have on WeChat. He asked us how LA Auto Show was, and I said it was mamahuhu which means horse, horse, tiger, tiger. In Chinese, it’s kind of a slang term for just okay. And you got offended.

Lei Xing:
I did!

Tu Le:
And rightfully so. But what I meant was not very exciting from a product standpoint. Now, Detroit wasn't very exciting either with the exception of maybe that Mustang launch. But all of the other stuff going on really made up for it. And we can talk about that, and you've asked me now what my highlights were, I think, randomly watching Peter Rawlinson walk around the Car of the Year, the Genesis Car of the Year.

Lei Xing:
The G90.

Tu Le:
I thought that was, yes. I thought because it's great to see that they also appreciate other products that it could be potentially future competitors for them. I also think that bumping into Franz (von Holzhauzen) and Ralph Gilles and having them talk to us and be so nice to us when they didn't know who we were, I think that was pretty cool.

Lei Xing:
And speaking of BYD, bumping into a BYD exterior designer.

Tu Le:
That was so random. About, let's say, 3/4 of a mile away from the LA Convention Center, BYD has their offices and it says BYD Motors. I believe it's a retail location, but also their offices. And he was really surprised that we knew as much as we did. I think most people when they initially meet us, are very, very surprised about how knowledgeable we are and how wonky and nerdy we are, I think. And you saw a few people and introduced me to them. I think that was pretty cool. The Volkswagen Group head of design (Klaus Zyciora). So it's just a lot of, I think the Rams game was really fun, if we're just talking about the week. I do also think that the San Francisco portion of our trip, was… I don't think we can separate this week into just auto show, okay? So. 

Lei Xing:
Right. So my answer and probably my top three: number one is definitely the Cruise experience in downtown (San Francisco.)

Tu Le:
See I forgot about that because it was only 3 days ago, but it felt like a week ago.

Lei Xing:
Yeah, so that'll be my number one, probably your number one as well, because that's, I don't know, it's not once in a lifetime, but it was the “ride of your lifetime” as you tweeted, right? And then number two is meeting Ganesh Iyer, CEO of NIO USA.

Tu Le:
So I wasn't even thinking of that because I was just thinking LA, but.

Lei Xing:
LA, right. And then number three, I would poll all of these chance meetings or not of these big shots together as a my number three, is really meeting these people at the show, which I was telling that the driver that took me to the airport that some, a lot of these things that you took for granted, and that's part of the auto show, which I think is more valuable than just seeing the new products, just because you are face to face. 

Tu Le:
Again, the product stuff was mamahuhu, because the Prius was really good to see. I think that was really striking. The VinFast press conference, I think that was significant because they had launched two vehicles and announced that Gotion is investing in Vietnam and battery capacity in Vietnam. So China battery Inc. is now not only in China, Europe, and the U.S., but they will be in Vietnam as well.

Lei Xing:
Vietnam, yeah. That was a $275 million, 5 GWh, 30 million-cell capacity, LFP, start of production in about 2 years. So that’s the gist of it.

Tu Le:
And it really shoots Vietnam to the forefront of Southeast Asian electric vehicle manufacturing, which is important because Thailand is the big dog when it comes to ICE, Toyota, all the Japanese are in Thailand.

Lei Xing:
And maybe number two, no, number one. Maybe I should, you didn't get a chance, but I should add, the ZEEKR Geely Waymo M-Vision event that, thank you Ash for getting that details that I got to see at the very end. It was over, the event was over, but I got to see and talk to some of the people there. And then also the Motional robotaxi. So these are the, Cruise, Waymo, Motional, I guess, are probably the three prominent ones in the robotaxi space that we got to see and experience, right? If you pool that together in number one. Do you want to talk maybe Cruise in a little bit more detail? What did you think?

Tu Le:
So I hesitated to write about it in the newsletter because I wanted to take a few moments to think through. And so the Chinese autonomous vehicles that I’ve ridden in all had a safety driver. So let me just say that I didn't get the chance, I've been invited to do these non-safety driver autonomous vehicle rides in China, but for whatever reason, because of covet primarily, I've not been able to actually go and do it. So be able to do it in the United States, and you and I were joking about this. I am probably one or a handful of other people in this world that have now been able to do both in the last few months. I have to say my last ride was in Baidu's. I had gotten an opportunity right in Baidu’s Apollo robotaxi twice over a 6-month period, I think, and the improvement between ride number one and ride number two for Apollo was significant. And the herky jerkiness that I felt in the first ride was taken away and normalized. And you kept on saying when we were in the Cruise robotaxi, this feels like a person driving. And I feel that Baidu had incorporated that into the newest iteration of the a software and hardware stack. And I felt comfortable, I felt safe in both vehicles. Now, Cruise at night is a little bit easier. But we saw naked lefts, we saw a lot of instances where it was pretty careful. Even on red it wouldn't turn right. So seeing no driver in the front seat, took it to that next level for me, okay? And the next morning we saw Kyle Vogt say that they're starting to do daytime. So now that's a game changer for me, because when I was doing it with Baidu and WeRide, it ws during the day. And it's geo-fenced, right? 

Lei Xing:
Albeit with a safety driver. 

Tu Le:
It's geo-fenced, but it's still taking us point to point where we're asking, within ODD right? So very impressive on both sides. If I had to lean one way or the other, I'd say probably Cruise is a little more polished, but I'll try to write a bit more detail in next week's newsletter. And then you and I can maybe follow up and talking a little bit more detail. But what were your initial thoughts? Because for you, it was a unique experience for you, right, so?

Lei Xing:
It was. It was unique and not unique at the same time in the sense that for us, having been following the industry, the EVs and the AVs, and seeing people post on social of their experiences with Cruise. So coming into it, we had certain expectations which really improved how you begin to trust the vehicle. And that quick, that trust quickly kicked in. After that, it was just, you had an initial shot of adrenaline, but it subsided. And then we were just like, as I was saying, this is just feels like a normal person driving. And but yes, it wasn't perfect. And there were caveats. It runs from 10 pm to 5:30 am in the morning. It has limited, geo-fenced.

Tu Le:
I will say that, so for anyone who's familiar with San Francisco, we went from Japan Town right off of Geary to Sunset on around 10th and Irving near San Tang Chinese restaurant. And I chose those two points, because I knew there was going to be a lot of turns and driving through the neighborhoods. Because if we're driving on Geary, it's pretty straight. And so I purposely chose those two points and again, not as heavily traffic, but still pretty impressive. Sorry, go ahead.

Lei Xing:
Yeah, and then the hilly streets of San Francisco, a lot of traffic lights or stop signs, which meant, I, on our flight back to LA, I watched the videos that I took, but you took the same videos. And I noticed the speed never went above 25 miles per hour. So you do the same thing. Those are the kind of the ODDs that limit what the vehicles, like daytime, nighttime. But I mean a lot of the left turns it was smooth. Some of the stop signs, you saw nudging forward a little bit, almost feel like you couldn’t see, but normal human driver would do that, and it did that. There were corner cases, there were double parked cars, there were people running out. There were pedestrians crossing the street.

Tu Le:
There's a person that was very close to a commercial vehicle. I don't think they could tell what it was. And so it slowed down right around there.

Lei Xing:
Yeah. So nudging to give way, these sort of things, it showed that it was pretty advanced. And one other important thing to point out is just the HMI, the voice prompt, the screens on your phone and on the back seat, the seat backs. Those things are important as well. So that you know what to do.

Tu Le:
That's not to say that 25 top speed is not to say that it wasn't aggressively accelerating, because it was accelerating pretty normal for me. So like a person would like, it was not easing into accelerating after a full stop. It was going, and 25 seems really low, but we didn't feel like, I didn't feel that we were driving very slow. Again, we were in neighborhoods, right?

Lei Xing:
So because of those traffic lights and stop signs, you couldn't have gone too much faster, because once you pick up speed, you have to stop because there's a next traffic light or stop sign.

Tu Le:
And situationally, Yizhuang, where Baidu is, is a little bit different with roundabouts. And the scenarios are a little bit different because Yizhuang also has like 4 or 5 lane roads. Beijing right now, compared to 10 years ago, traffic wise and drivers following the rules is night and day. What I mean by that is when I first moved to China 13 years ago, no one obeyed anything. And people would obey the red lights, but the sanlunches (three-wheeled vehicles), the bikes, they would go, they would cross, and the motorcycles, they would cross without any hesitation. So that has stopped happening as much in Beijing. And so we're moving towards a mature transportation system in Beijing. I think if you go to the lower tier cities, it's still kind of random and still pretty crazy. Guangzhou for WeRide, that was still a little bit crazy, but again, it was also kind of a predetermined route. And I'd love, hopefully we'll be able to do that next time we're in China, go test WeRide out again, go test Baidu out again, because it's not, the difference is not significant enough to where one is clearly the leader, in my opinion. So.

Lei Xing:
The other thing to point out is we had two trips, we made two trips, and the.

Tu Le:
Because we're nerds and we need to get back to the car. 

Lei Xing:
Well, we had to get, go back right, to where we began. So the first trip was in a car called Strawberry. And the second, the return trip was in a car called Ant. And I thought Ant did a slightly better job because there were more left turns on the way back, I think.

Tu Le:
Ant was a newer model, too. Because I think Strawberry was a little bit older.

Lei Xing: 
And then cost wise. I'll send you some screen shots of the cost. I think it was $25 round trip, so $13 to and $12 back or the other way around, but 25, $26.

Tu Le:
And this is for one way was about 18 to 20 minutes each way and about 3 miles I think or something like that.

Lei Xing:
To stress, this was a paid driverless ride-hailing, not a free test.

Tu Le:
We were lucky enough to get access to the app.

Lei Xing:
We should mention that a good friend of ours helped with this experience. So we appreciate it.

Tu Le:
So if you're going to go to California and you want to try out the Cruise, I would download the app right now, get on the wait list, and once you're approved, it looks like they're expanding the service, so maybe they'll pull more people off the wait list, so.

Lei Xing:
So we lived in the future for, I don't know, an hour or so, 25 minutes.

Tu Le:
We drove specifically from South Bay to San Francisco to do this ride. And it was not disappointing. Because we got it right away. We called it, and it was there right away. So we didn't have to wait. And then we drove, we took one back and then we just drove right back down to South Bay, so.

Lei Xing:
Good thing we rented a Model 3. So Tesla helped, too.

Tu Le:
So, I know there are people that are wondering if we can disclose anything about our meeting with Ganesh, but that was more or less a social meeting and completely off the record.

Lei Xing:
Yeah. What we can say is he's almost a lifer at NIO, he's been with NIO for 7 years. So formerly with Tesla, on his resume.

Tu Le:
And he's fully committed to Li Bin’s vision of NIO. He spent 4.5 years at Tesla. So we also spoke about a little bit of his time there and what's happening with Elon? So he gave us his opinion about that, too.

Lei Xing:
Yeah, for me, it was actually my second time visiting. The first time was in January 2018. So it was good to be back and totally different NIO now than, right, January 2018.

Tu Le:
I'm thinking in the next and within 5 years, that small little office is, they'll be moved out of that office and then to somewhere else I think. 

Lei Xing:
And then there was an ES8 parked in the back and an ES6. This we can say I mean, it’s not…

Tu Le:
Both of them had M plates or manufacturer plates. They weren't really road legal. They're legal as engineering vehicles, but not as private passenger vehicles. So no one's driving an ES8 as their daily driver to and from work as a customer yet, so.

Lei Xing:
This, we said this before on the show and we're going to say it again. So there's already NIO Berlin happened. Next, sometimes in the future, I would expect a NIO San Francisco or something similar.

Tu Le:
And then maybe a NIO Palo Alto I would say.

Lei Xing:
It’s just a matter of time.

Tu Le:
So that's where the money is concentrated, right? So.

Lei Xing:
I guess just the number of people that we met, planned and unplanned…

Tu Le:
You get to meet a few of my old man-tie friends and I think that was a good dinner.

Lei Xing:
“BAYjing” friends.

Tu Le:
One of those people is Ye Xin, or Xin, he's an OG from the China tech industry, right?

Lei Xing:
Yeah, he probably knew everybody. 

Tu Le:
He knew Dr. Jun Pei, from Cepton, so.

Lei Xing:
So next door neighbors, apparently, so small world. 

Tu Le:
Xin is a good dude. Yeah, man, just kind of recapping, and I'm still in LA, so the trip is not yet over for me. I may do Peterson this afternoon.

Lei Xing:
Definitely you have to go, because they have that Tesla exhibit on, so you have to go.

Tu Le:
And then tonight is the Fisker event. So I have the red eye flight, so.

Lei Xing:
Speaking of, yeah, this is a good point to mention, speaking of Fisker. So yesterday was the SOP of the Fisker Ocean. And also the one-year anniversary of my conversation with Henry Fisker last year at the LA Auto Show

Tu Le:
Which kicked off our MAX series.

Lei Xing:
MAX series. Yeah, so we congratulated BYD, we congratulate Fisker and Henrik also. Not easy these days to keep your promise that you made a year ago.

Tu Le:
And this is a complete 180 for Henrik from his first startup where he wanted to do everything himself. So, congratulations to Henrik. I think we're going to have a hit on our hands with the Fisker ocean unless there are any manufacturing and quality reliability issues. Because I do think that Europe is ready for a completely ground up electric vehicle outside of Tesla as well. So.

Lei Xing:
Yeah, I think volume wise it’s going to be a small, I think it's going to be in the hundreds for this year. And then slowly ramping up Q1, Q2, Q3 next year into the mid thousands, I guess.

Tu Le:
Because we have to remember that Magna is also learning how to build EVs, right? So they're experts at building cars, mostly petrol cars, but this is a learning experience for Magna as well.

Lei Xing:
I think next year their planned production is only over 40,000 units, so it's a very slow, ramp up, right? But nonetheless, SOP, so job one done.

Tu Le:
I'm looking forward to the event tonight, but maybe you can talk a little bit about the event we went to last night and, I guess we mentioned it a little bit, but.

Lei Xing:
Well before that, speaking of Henrik being our first MAX episode, our latest, we should talk about it as well, MAX episode that will be dropping in due course.

Tu Le:
Let's say 2 weeks. 

Lei Xing:
Yeah, it’s Zach Anderson, the CTO of ClearMotion, which recently received a $39 million investment from NIO Capital. There's going to be some big news coming out, so just wait for the pod. 

Tu Le:
Big enough to where he has to travel, so. Did we mention last week that we dropped the Henry Sanderson MAX episode?

Lei Xing:
Yes!

Tu Le:
Okay. I think that's really important because of all of the chess playing from the battery startups, or not startups, but the battery companies globally and dovetails into the S&P report last week that said due to geopolitics, due to supply of the rare earth metals, there should be some volatility and pricing and availability of batteries. And effectively, the U.S. legacies have completely and fully embraced the LFP chemistry now. And if you were a listener of the Steve Levine episodes for MAX, you'd have known that already, because we talked about that months ago. It's a little bit of validation that we had kind of talk through that. And S&P is also now pointing that out as a future risk for these EV companies.

Lei Xing:
So back to the LA Auto Show a little bit, so I met some people. You met some people and both of us met some people at the same time. So starting off with actually on the 16th, I was at the Porsche 911 Dakar event. And I met Oliver Blume for the first time since 2019.

Tu Le:
His first trip outside of Germany since China.

Lei Xing:
I have a scoop: he will be back in China for a week in the not too distant future. And he, I’d say he looked a little bit thin and tired. It must have, being the CEO of the Group and Porsche. I think it's not easy. Then there was a VW event, I got to talk to Thomas Schaefer, the CEO of VW brand global. He used to be the CEO of Skoda. And I was waiting to get a beer at the event. He was just standing next to me and we started talking. And then he opened, and his eyes lit up I think when I talked like a lot of stuff on China and then we kept talking.

Tu Le:
He's got a huge burden to bear for Volkswagen Group.

Lei Xing:
Yeah.

Tu Le:
If he can turn them around, he's going to be likely the hero and likely someone who could succeed Oliver Blume, so.

Lei Xing:
Yeah. And then the event last night, we met with Franz, his full name is von Holzhausen, is that correct, the Chief Designer for Tesla. I joked that that's the closest we get to Elon Musk.

Tu Le:
He couldn't have been nicer, by the way, he couldn't have been nicer.

Lei Xing:
He was very nice when we talked about some China Tesla stuff.

Tu Le:
And Alysha asked us who he was, and I was like he's known for breaking windows. He laughed about that.

Lei Xing;
That was so funny. Yeah. And then Ralf Gilles, a legend, I think in the design circles and.

Tu Le:
I didn't pull any punches, you know me, I don't really pull any punches. I told Ralph, I was like, hey, man, what are we going to do about those fake noises? He's like, we're working on it. He's like, give me some time and don't bumrush me yet or whatever. So he knows, with that response. And he was very, very. Yeah, we're joking. I said it jokingly, but he took it the way I wanted him to. So that's good.

Lei Xing:
Tu is referring to the Dodge Charger Daytona SRT Concept, that the new EV with that fake sound. That's what Tu was referring to. So.

Tu Le:
It's part of the UX team. That's, the sound thing, the sound for that vehicle is part of the UX team's responsibilities. That's what he said, so.

Lei Xing:
And then the BYD guy we mentioned, Greek American working in the U.S. for a Chinese company. That's as global as you can get.

Tu Le:
And he's an Art Center of Pasadena graduate.

Lei Xing:
And then at the show, we met Klaus, Klaus Zyciora, the head of design for Volkswagen Group right next to the new Prius. So we had some fun discussions on the industry.

Tu Le:
The two big groups that I think were significant for the press releases where the Genesis with Ed Loh.

Lei Xing:
You should mention that.

Tu Le:
Handing the Motor Trend Car of the Year vehicle to the Genesis team. I think there was a huge crowd for that. I think the Prius had a huge crowd and the VinFast. I thought that was pretty significant crowd.

Lei Xing:
VinFast, yeah. As we mentioned earlier, toward the end of the day, we were walking out. There's Peter Rawlinson checking out the Genesis G90. And he was all smiles like the way, we took a picture with him. And his smile is just so affectionate, right? If you look at the photo.

Tu Le:
Yeah just like seems like a very, very happy person, so.

Lei Xing:
Yeah, he’s got the British humor type of feel.

Tu Le:
I should mention that there are four companies that Foxconn is going to be building for at Lordstown, one of them, Lordstown Motors. The other, Fisker with the PEAR, CEER is the newest. The fourth is INDIEV and INDIEV is an LA-based electric vehicle startup that is really leaning into the gaming, the augmented reality and the virtual reality. So I got a chance to speak with the head of engineering and discuss this with him about how he's going to enter the market. And so I think Foxconn is going to have a really, really complicated factory at Lordstown.

Lei Xing:
And you haven't mentioned the Foxtron, right? That's not a U.S. thing but. 

Tu Le:
So Lu Yang motors, is it Luxgen or Luyang Motors? Luxgen is a Taiwanese. 

Lei Xing:
Yulon Motors.

Tu Le:
So they are a Taiwanese car manufacturer. Foxconn has partnered with them and created a brand called Foxtron. And there are a number of vehicles that they've unveiled under the Foxtron brand. There's a pickup. One of them is a pickup. You know, you see Magna, you see Foxconn. Ii believe Magna and Foxconn both want to move up the food chain. I truly believe that. And so they're learning as they go. And the chances of all four of those vehicle brands that Foxconn has at Lordstown succeeding is very, very small. And it's just a capital thing. If they're not selling right off the bat, then the working capital is not going to be enough to maintain buying parts for production, okay? And always, these companies, if they're not selling right away, they'll always need to raise capital and you can't IPO right now, it's not a great market for IPOs, for electric vehicles, for any company. From that standpoint, I think most investors have figured out that making electric vehicles is hard, it's expensive. And the return is not going to come back in a 5-6 year time frame. And a lot of them have probably gotten burned by Tesla because of Tesla share price, tanking, not taking, but.

Lei Xing:
Down big over the last how many months.

Tu Le:
Unfortunately, you cannot just say it's Tesla business operations that have reduced the market cap because of what's going on with Elon and Twitter. So man, rolling into 2023, it's going to be interesting times, I think money is going to be a little bit tighter. I think more announcements about Chinese companies entering Europe, potentially, the United States, I would say before the end of summer, a Chinese company will have announced that, one or two Chinese companies will have announced that they're entering the U.S., so.

Lei Xing:
Latest by 2024, I think, if not next year and then quickly on the product reveals just, a few North American debuts. So Hyundai IONIQ 6, the Kia EV6 GT, and Fiat came out with this new 500e is launching in 2024 in then VinFast wth the VF6 and VF7 Smaller SUVs. Other than that, the Prius obviously.

Tu Le:
They did also show the VF9, the VF9, which is a $91,000 car. And I thought they had pulled the leasing, the battery leasing, but they have not because the sales folks did say that's an option. So I think you and I might have to go back to LA in the next couple of months and test drive these cars Lei.

Lei Xing:
Well, we, right next to the show we test rode the Kia EV6, the Chevrolet Bolt EUV, the Genesis GV60, that was nice. And the VF8, right? Correct? The VinFast VF8.

Tu Le:
Hyundai and Kia are just running on all cylinders, quote, unquote. And I was able to meet a communications manager at Hyundai Group who was there specifically to promote Genesis. So we had some interesting conversations, or we had an interesting conversations that as we were walking back and forth to the halls, and I plan to keep in touch with him. So hopefully, I'll have updates on what's going on with Genesis, Hyundai and Kia in the United States and in China, so.

Lei Xing:
Yeah, and the last thing maybe you should mention a little bit about the Coding the Car, the documentary that Motor Trend showed and they also came out with the book version of it. And the book version featured guess who: Brian Gu of Xpeng. I don’t know, I wasn’t at the, I came in late for the documentary showing, it's on Youtube, so. They didn't show anything on Xpeng, right, in the documentary?

Tu Le:
No, it was effectively all car people.

Lei Xing:
In the book, there was Brian Gu was featured, surprisingly, him being a finance guy or, but still, although that's a great book and documentary.

Tu Le:
If I'm being completely frank and objective, that documentary didn't teach me anything, but.

Lei Xing:
Because we've been talking about it all this time.

Tu Le:
And it was really weird. So there was an NIVIDIA person that they had interviewed. There was a Lucid person. There was…

Lei Xing:
Qualcomm, Blackberry…

Tu Le:
Yes Blackberry person. But the rest of them were primarily legacy auto. I don't really want to hear from those guys, right, because they…

Lei Xing:
Well there was Lucid and Rivian guys.

Tu Le:
Yeah, but there are still car guys, right? Because to me, the real threat is with Amazon, with Google, and you're probably not going to get them on record to talk about that stuff. But why couldn't they also talk to an Uber person, right? Because they talked about software, they talked about data, they talked about privacy, they talked about transportation. And so I watched the documentary, raced to VinFast, saw you, raced back to the documentary hoping that I could speak with Ed Loh. Because I wanted to tell him about our podcast. And nice enough guy, talked to him. There's like five other people in this little small auditorium left over from the end of the documentary and a little chat. We started talking and he kind of, everyone does, not just him, but everyone kind of looks at me little cynically like I understand Chinese cars or Chinese EV sector. And then obviously we started talking and he started asking me questions. So I, that's the kind of sign of like, okay, he’s…

Lei Xing:
It was like meeting Sandy Munro, right?

Tu Le:
Yeah, so and he asked the right questions, but I feel that documentary is 3 to 5 years too late. You heard people in the theater or like it seemed like eye opening to them and that was concerning to me. We're at an auto show. It's all car people, but the alarm bells should be off already at these companies that they work at, okay. I think you and I have a lot of work to do in the west to really still talk through a lot of this stuff with them, right?

Lei Xing:
This is our aim at this pod, right? Just keep on educating and informing, and…

Tu Le:
Yeah, because I like the documentary, I think it was a hopeful documentary, as opposed to an objective documentary that kind of looked at all sides. And so, I do recommend watching it because hearing the Honda guy, the GM guy kind of talk through their logic on a lot of this stuff. If you follow tech, it's nothing new. The one thing that was a bit concerning about these guys are these, and there was mostly guys and a couple of women, is that most of them were lifers with the exception of the Lucid guy and the Rivian guy who are obviously working at startups, they are lifers at these companies 10 years, 15 years, 20 years. So I don't know how much disruption they're going to be actually doing. The legacy companies that they work at, which is concerning, because at this point in time, this is Volkswagen, too, right? This is the case in point. You need more tech people in leadership roles, not in technical roles, in leadership roles. Think Doug Field. He spent years out in Silicon Valley. He gets it.

Lei Xing:
Speaking of, visiting Apple and that Plug & Play event, talking to the NVIDIA guy, the dynamic and the feel is just totally different, right?

Tu Le:
It was important that we talked to the NVIDIA guy being a technical guy, not a business guy. And he was, I value these conversations, because it really adds to our knowledge base, right? And I don't want to say too much about what specifically we talked about, but effectively he told us that the whole team had to work overtime to get that China only server into fabrication. And he questioned whether the automotive sector could do something like that, or had a willingness to do something like that where it's like what? Because in NVIDIA was potentially going to lose millions and hundreds of tens of millions, hundreds of millions of revenue if they hadn't done that, but they just go and get it done. So NVIDIA is, seems, NVIDIA and Qualcomm seem to be way out in front when it comes to the AI chips, too. So great conversations this week. Great new friends we've met for you for me

Lei Xing:
And just reconnecting, seeing some of the people that I’ve seen before again, and some of them that we've been seeing online, but now literally seeing the person. Peter Rawlinson, for example, right? That was cool. I think that's we can't be exhaustive. Could there were a lot more that we can share, but because of time, yeah, I don't know do you think it topped the Detroit trip? Close.

Tu Le:
I just think it's different for me. It was like my kind of welcome back to the U.S. kind of.

Lei Xing:
Yeah, I saw that. Yeah.

Tu Le:
And kind of comparing and contrast, oh who else do we bump into at lunch yesterday? What's his name? Dan? Tell us about Dan.

Lei Xing:
The head of the design at Qiantu Motor, formerly now. Forgot to mention.

Tu Le:
Unless you have anything else, I'll just bring up a couple of things, and then we'll open the room up.

Lei Xing:
No I don't have any anything else.

Tu Le:
I think it's important to note that Mercedes with EQS in China and the EQC? 

Lei Xing:
The EQE and the EQS.

Tu Le:
Yes. The EQS is the, the electric S-Class. The top edition, I think it was RMB1.1 million.

Lei Xing:
There was an AMG version of it.

Tu Le:
They reduced it by $33,000 a few days ago.

Lei Xing:
A Tesla.

Tu Le:
Yeah there are basically no demand for it, and we're talking the one with the coast to coast screen. This is the challenge that the ABB, the traditional legacies are going to be under in China. And if their flagships are not resonating with the market, oh my goodness, it is going to trickle down to their other products because that's why it's a flagship, because it represents the best of the brand. Okay? If they're not buying the best of the brand, the richest people or the most influential and affluent, then it's going to spell trouble for the rest of the brand, of the products.

Lei Xing:
S-Class. China is the biggest market for the S-Class, the ICE version. Can the same thing happen in the EQ version? That's a question mark, right?

Tu Le:
The EQ was also reduced, I think, by $7,000 or $6,000, so not insignificant. But I don't know how much that has to do with Tesla price reduction. I think that was more of an overdue thing.

Lei Xing:
But Mercedes also offering compensation for existing customers

Tu Le:
To make them whole.

Lei Xing:
Through some kind of rebates or something, you know. So.

Tu Le:
In order to keep their customers that spent the extra $33,000 happy, or at least not too upset, they were offering alternate compensation or not reimbursement, but some alternate compensation for that, I think that's important to note. TSMC is rumored to be building a second factory in Arizona, this one to fabricate sub-3nm transistor ASICs. So TSMC is really trying to mitigate some risk here. And I tweeted onshoring from Taiwan. That was a huge win for Arizona, because in total, they're going to be investing $24 billion over the next few years. So kudos to them.

Lei Xing:
This week there were a lot of things going on in China, but we kind of stepped away a little bit from that action.

Tu Le:
Mary said that they will be profitable by 2025 that GM would be profitable. I don't know how that's going to work if battery pricing is volatile.

Lei Xing:
It can always change. You can always say, oh because of this and that we're not going to achieve it, so.

Tu Le:
So thanks for joining everyone. Good morning, good afternoon and good evening. We will talk with you all next week.

Lei Xing:
Likewise, have a good weekend. Byebye.

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.