China EVs & More

Episode #109 - XPeng Earnings, Geely Explained, Updates on the Price War

March 27, 2023 Tu Le & Lei Xing
Episode #109 - XPeng Earnings, Geely Explained, Updates on the Price War
China EVs & More
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China EVs & More
Episode #109 - XPeng Earnings, Geely Explained, Updates on the Price War
Mar 27, 2023
Tu Le & Lei Xing

The podcast begins with a brief discussion on Ford's accounting of EVs for China and China operations in general. 

They move their discussion to XPeng's earnings report and take some time to unpack what their troubles were in 2022 and what they're doing to address them now. 

Lei then summarizes Geely Holdings and their numerous brands and how they all fit together some of the history of a few of the brands that westerners might not have heard of and they both take a few minutes to update on Zeekr. 

Tu and Lei then give updates on the continuing price war and how it's affected some of the weaker players and foreign brands in particular. 

Lei pushes the discussion over to Nvidia and how they are likely the largest beneficiary in the push towards more AI use in apps, software and business. 

The pod closes out with a talk about the struggles of Kia/Hyundai in China and how they still are trying to make headway into the market with the recent announcement of new products. 

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Show Notes Transcript Chapter Markers

The podcast begins with a brief discussion on Ford's accounting of EVs for China and China operations in general. 

They move their discussion to XPeng's earnings report and take some time to unpack what their troubles were in 2022 and what they're doing to address them now. 

Lei then summarizes Geely Holdings and their numerous brands and how they all fit together some of the history of a few of the brands that westerners might not have heard of and they both take a few minutes to update on Zeekr. 

Tu and Lei then give updates on the continuing price war and how it's affected some of the weaker players and foreign brands in particular. 

Lei pushes the discussion over to Nvidia and how they are likely the largest beneficiary in the push towards more AI use in apps, software and business. 

The pod closes out with a talk about the struggles of Kia/Hyundai in China and how they still are trying to make headway into the market with the recent announcement of new products. 

Climate Confident
With a new episode every Wed morning, the Climate Confident podcast is weekly podcast...

Listen on: Apple Podcasts   Spotify

CEM #109 Transcript
Recorded 3/23/23


Notable quotes:

Tu Le:
Let's hope that none of these EV makers have gotten locked into pricing and aren't able to take advantage of some of these cost decreases on the rare metals, especially in the lithium carbonate.

Lei Xing:
What DeepRoute has done and quite a few other L4 robotaxi, “self-driving” startups, is move back down to the L2++ opportunity. Because that's where the business, the money is.

Lei Xing:
The fact of the matter is, the ICEs comparatively competing with EVs in terms of a price parity competitiveness, are really at a disadvantage, losing.

Tu Le:
The main victims of this are the foreign legacies. If you don't have a really aggressive feature set on the smart technology side of things and for the China market, I think you can kind of forget about it.

Lei Xing:
For the foreign legacies, this is kind of like their last hurrah of investing in the China NEV market. And what Kia announced is one example of that.

Tu Le:
Hi everyone and welcome to China EVs & More where my co-host Lei Xing and I will go over the week’s most important and interesting news coming out of the China EV, AV and mobility sectors. What Lei and I discuss today is based on our opinions and should not be taken as investment advice. If you enjoy this room, please help us get the word out to other enthusiasts and tune in again next week. 

My name is Tu Le. I am the managing director at Sino Auto Insights, a global 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 afternoon, Lei. Can you please introduce yourself?

Lei Xing:
Good afternoon. This is your co-host Lei Xing, former chief editor of China Auto Review, and this is episode #109. So we just got off our latest MAX recording with the founder and CEO of this marketplace CARWOW, so stay tuned for that interesting conversation. 

Tu Le:
Very interesting. 

Lei Xing:
Yeah, his name is James Hind. So stay tuned. Where do we begin? I was following up on some of the Ford’s new financial reporting structure.

Tu Le:
I just saw your tweet.

Lei Xing:
Yeah I was going through the teach-in doc, and they had this tidbit of recognizing the China-built and sold EVs in Ford Blue, not Model e. I thought that was interesting, but I guess it's understandable because first of all, the volumes are small, and second, they don't make any money probably anyways. So.

Tu Le:
Yeah, so it's effectively trying to hide something it looks like.

Lei Xing:
But China region is included in that Model e as they showed on their documents.

Tu Le:
I'll have to dig into that because the costs are amortized across the, yeah, I’ll, I just saw your tweet, so I have no contacts, but I will start digging and try to find out more myself. And I’ll let you know, Lei.

Lei Xing:
Basically the last year, Model e business lost $2.1 billion, which I think was their net loss, Ford’s net loss as a whole, I think, if I remember correctly. This year they're expecting $3 billion. So John Lawler, he said, we treat ourselves as a startup and you lose money and right?

Tu Le:
Those are a lot of zeros. Startups don't usually lose in the billions. So.

Lei Xing:
Yeah and go going back to our topics we heard since we last chatted. Friday was the Xpeng earnings. And then we heard a little bit about Geely Auto Holding, the Hong Kong-listed. We can go into some of the highlights there. I think one overall riding theme in both these companies was cost, cost, cost and cost. If you listened to He Xiaopeng speak, I mean he spent probably the first 40 minutes talking about cost control and reorg. And there was that tweet that you talked about on someone saying Xpeng scaling up. I was thinking that is what they're supposed to be doing right now as of this moment. But they are talking more about reorg, about controlling cost. So I thought that was kind of the irony and their Q1 guidance of 18,000 to 19,000. I was like, they should be doing that a month, not a quarter. 

Tu Le:
Yeah. Let me add to that Lei. Q4 year over year revenues were RMB5.1 billion, so $800 million, that's a 40% drop year over year. They delivered 22,204 vehicles, that's down year over year by 47%. It looked like the G9 sold ok, 6,000 units in Q4. That sounds low, but it was almost 1/4 of the vehicles sold, or more than a quarter of the vehicles sold. So that's pretty good. And they, to your point, about the quarterly sales versus monthly sales, they gained 23% year over year, full year on deliveries to 127,570. But we have to remember that they are a mass market brand. So their vehicles are much less expensive than, say, a NIO. And if we want to compare how much NIO grew, year over year for the 2022 fiscal year, they grew by 34% and they are a premium brand. Now they don't have the same number of products, but it should give you an indication as to the types of struggles at Xpeng were in in 2022. And how they are dramatically trying to right the ship with reorgs, with the new president. And one of the things that stuck out to me from Brian Gu, and what he said is he talked about significant improvement in marketing capabilities. And so that tells me that their messaging, because it's so competitive, there's so many products, there's so many brands in China that their messaging for their brand is probably getting a bit muddled. So I think they still have $5.5 billion in the bank as of 12/31. That sounds like a lot of money, but that'll go real fast, as you can see, Ford forecasting a loss of $3 billion in one year for 2023. So the good news is that they have the P7i that just launched, they'll be unveiling the G6 at Shanghai Auto. And I think if it's successful, that should be one of their high runners. It looks nice. I think the exterior looks pretty nice.

Lei Xing:
How much expectation did we have on the P5 when it launched and when it unveiled? We're saying the same thing of the G6.

Tu Le:
You and I were pretty strong about that, right? You and I were pretty bullish on the P5.

Lei Xing:
You mentioned about sales and marketing, I think in the earnings call, one question was, what kind of criticism Wang Fengying gave when she came on board. And that was one of the criticisms. And the other one was planning, product planning was maybe somewhere off or execution of, let's say, the G9 launch with the pricing fiasco. And then He Xiaopeng was something, mentioned something about now Wang Fengying is working 7 days a week. And the entire company is like, we're all working 7 days a week. That's, I don't know if that's good or bad.

Tu Le:
Well, but this is the thing because they're rolling their sleeves up. And it sounds like internally that panic button was pressed a little bit, right, Lei? So, again, they did increase the number of sales year over year, but they lost a ton. They missed huge opportunities to gain in 2022 because we had another record year of sales. So and yes, easily can point to planning and a lack of execution. So He Xiaopeng also talked about how China market is moving into the next phase of EV sales, right? With accelerated disruption of smart technologies. So he's leaning into that city-NGP it looks like

Lei Xing:
XNGP.

Tu Le:
Yeah XNGP. So, we'll see if that works out, because you and I know we're also going to talk a little bit about DeepRoute. So they are also pushing the sector forward with their new announcement this week. But I mean what do you think, do you think, what's her name, the new president, can help turn things around?

Lei Xing:
Wang Fengying. I mean she's definitely done her share of recommendations, what to do, what not to do, the whole reorg, management wise, cost control. And it looks like they're still expecting this G6 to be 2-3X P7i. That's, you can sort of guess the numbers, but right. And going back to NIO, I mean they both did roughly 120,000 units, but they're not equal, right? Because of the price positioning. And a good thing, though, and this is a topic that also has been playing out last few weeks and months is the lithium carbonate prices dropping significantly.

Tu Le:
Fallen through the floor.

Lei Xing:
And interesting going to the Geely earnings, An Conghui, he mentioned something very specific for ZEEKR: every 10,000 per ton drop, RMB drop in lithium carbonate prices translates to RMB575 savings added to the margins, which is about 0.2%. So good thing is, with this cost control, you have a little bit of tail wind with the lithium prices.

Tu Le:
Let me throw something out there, because you also know that CATL was asking for long-term agreements, to sign long-term agreements with the domestic Chinese EV makers. So there needs to be language in these contracts to say that we get to share some of that downside if pricing for raw, rare earth metals and raw materials decreases. So let's hope that none of these EV makers have gotten locked into pricing and aren't able to take advantage of some of these cost decreases on the rare metals, especially in the lithium carbonate. So because that would, a lot of these purchasing orders are, the prices are set. If you're a good negotiator, you're going to limit the downside because you need to plan, if you're CATL you need to plan your finances as well. And so if you're giving back money, every single time raw material price goes down, then you're not going to be doing very well either. Normally, there are limits or there are triggers, meaning that anything over and I'm making this up: a price reduction or a cost reduction of any raw material by 2%, we get to share, you get 1%, I get 1%. And so that's how it normally works. If you're a good negotiator on the purchasing side. And then if you're on the supplier side, you want to limit that downside risk as well so that your revenue is more predictable, okay?

Lei Xing:
For Xpeng it just seems everything has been delayed by at least two to three quarters, what they should be doing now. He Xiaopeng is saying by Q3 will be much better. There's always this expectation versus reality. It's a bit disappointing, but…

Tu Le:
And that's part of the reorg and anyone, and you know this: anyone who's followed the automotive industry for any period of time, knows that legacy automakers reorg about every 12 to 18 months.

Lei Xing:
And what Ford has done, right? So.

Tu Le:
Yeah, now do you believe that what He Xiaopeng said about the move from, what was his exact words, move from rapid EV penetration to accelerated disruption by smart technologies. Is that going to be the defining differentiating factor for a lot of these EV products and companies now?

Lei Xing:
Well you mentioned DeepRoute, right? What DeepRoute has done and quite a few other L4 robotaxi, “self-driving” startups, is move back down to the L2++ whatever opportunity. Because that's where the business, the money is.

Tu Le:
Well everybody and their mother are working on L2 capabilities, right?

Lei Xing:
Yeah.

Tu Le:
Let me stop you there, Lei. Can you tell the audience what DeepRoute announced with Driver 3.0?

Lei Xing:
The basic announcement is they came out with these two stacks sort of, a Pro and Air. Pro is the one that's costing RMB14,000 and the Air cost half of that. And these are going into vehicles, private vehicles as features equivalent to point to point. The pro is basically the point to point similar to XNGP whereas the Air, Pro has a LiDAR, air does not have LiDAR. Air will offer more advanced levels of driver assistance. So this is what they basically announced. This is kind of an extension of their 2.0 which was that $10,000 stack that was announced end of 2021, I think, right? So this is the kind of a pivot to address this opportunity of the ADAS business.

Tu Le:
I think it should be also mentioned that. So 3.0, Driver 3.0 you don't need to use HD maps anymore, it can use standard maps. It'll use perception via the sensors, along with standard definition maps, in order to navigate. The Pro, the point to point navigation is, there are no restrictions. There are no ODD restrictions. So like you said, the Air is an ADAS system, whereas the Pro is more of a true autonomous system, so.

Lei Xing:
It's, similarly, He Xiaopeng mentioned their XNET, XNGP powered by XNET, which also don't rely upon HD maps.

Tu Le:
Because remember that bit them in the butt last year, because they had to wait months for the GZ HD map to be released or approved.

Lei Xing:
So their XNGP right now is only, I think starting in Guangzhou, Shenzhen, Shanghai, three cities and then expand to more in the coming years. So I think that's a huge part of the competitive environment on the smart features, WeRide is doing that through Bosch. I think Pony is doing that.

Tu Le:
It's funny Lei, because we hear from DeepRoute, we hear from Baidu quite often, but there are smaller announcements, but they don't get as much attention. I haven't heard any real new news coming out of Pony or AutoX lately, so makes you kind of wonder. Pony I think they had an announcement last…

Lei Xing:
Couple of announcements.

Tu Le:
Two or three months ago.

Lei Xing:
The robottaxi right? Baidu getting that additional driverless operation in Beijing, right? And the other one was Pony.

Tu Le:
But I guess because of Robin getting in front with the Baidu version of ChatGPT, EARNIEBot, but maybe that's why I'm thinking of Baidu so much. But I'm excited to see how this DeepRoute system works. Standard definition maps. That's kind of a game changer. So, yeah, that's pretty significant. And I know you wanted to talk about the Geely stuff.

Lei Xing:
Yeah the Geely stuff I think more so on their branding, I think I tweeted some of the stuff on being clear of all these different brands and products and models. And so they use this opportunity to basically, there's the parent company, Geely Holding Group. And then below that is the 0175 Hong Kong listed Geely Auto Holding. And within the Geely Auto Holding, there's the three major brands of Geely Auto, LYNK & CO and ZEEKR, basically separated by price points or ranges.

Tu Le:
And those are the homegrown Geely brands, by the way.

Lei Xing:
Yeah. Now under the Geely Auto, we have three different products series, the Star, the Geome formerly known as Geometry, and then the Galaxy.

Tu Le:
So Geometry was supposed to be their entry level EV brand.

Lei Xing:
I was telling Ash that they needed to update the website because it still shows Geometry as a brand. 

Tu Le:
Because if you went to the tier-2, tier-3 cities, mostly the tier-3 in and around Hangzhou, you would see Geometry as ride hailing cars.

Lei Xing:
Then yeah, a lot of talk on ZEEKR, especially An Conghui talked about they're committed to doubling sales this year still, 140,000 units and 650,000 in 2025 with eight models on the market by then.

Tu Le:
They need to bump that, they need to pump that up because of the IPO, right?

Lei Xing:
IPO, right. He did mention about the IPO that's ongoing.

Tu Le:
In the U.S. as well. I think that's worth noting.

Lei Xing:
Yeah and then the other number, I thought was interesting. He gave a number of employees of ZEEKR in R&D was like 6,387, like very exact number. And he said 77% were on software. And then he said, he gave out an easter egg. They're working with Mobileye and they're working with Waymo, and they're also launching their own solution ADAS, advanced levels of driver assistance solution tater this year.

Tu Le:
Is that through this was what I was confused about is that through Geely or ECARX?

Lei Xing:
Well, it's probably related, but again, this goes back to the conversation on the XNGP and the DeepRoute. At the same time remember, Geely and Mobileye, they announced something that they plan to launch a consumer AV in 2024. So I don't know where that is in all of this, right? A lot going on.

Tu Le:
But let me specify and you correct me if I'm wrong, the Waymo partnership is more or less them being a contract manufacturer similar to JIDU Auto. They're not really bringing IP, i don't believe, to the Waymo product. That's all Waymo IP from an autonomous vehicle standpoint.

Lei Xing:
It's almost like a BYD and NURO, maybe? 

Tu Le:
So thank you for clearing that up because I was totally confused. So where does Galaxy fit?

Lei Xing:
Galaxy is the, their high-end PHEV/BEV model series under the Geely Auto brand.

Tu Le:
But it's not a brand, it's a series.

Lei Xing:
It’s a series. So the L7, right?

Tu Le:
It's like the Dynasty series from BYD.

Lei Xing: 
Right. They have the L7, and then the L6, and then the E8 coming in the next how many months?

Tu Le:
Whereas Yang Wang is a different brand.

Lei Xing:
That's a totally different brand. Yang Wang, BYD, the Fashion brand, right? Denza. Those are the four brands for BYD.

Tu Le:
Which is 90% owned by BYD now, not a true JV between Merc and BYD.

Lei Xing:
And then BYD obviously has the two, Ocean and Dynasty series. They're not brands. They're…

Tu Le:
And some of that is really to separate the PHEVs from the BEVs, I believe. I think the Frigate are PHEVs?

Lei Xing:
Well BYD’s play is DM-i plus the BEVs.

Tu Le:
Yes.

Lei Xing:
I think almost every model have a DM-i version, most of their models.

Tu Le:
What's your read on the price war affecting BYD with the reduction in shifts? Have you heard anything else from your moles?

Lei Xing:
So the Reuters report you are referring to I'm guessing, BYD did say that kind of denied it, but there's no question in my mind that they're facing headwinds.

Tu Le:
In a true kind of way, they denied it in a true kind of way. It doesn't surprise me. This price war, like you said, it's the most brutal thing I've ever seen in the China market since I've been covering it and you've been covering a longer than me. So. 

Lei Xing:
Right exactly. And I was, you know in our other chat this morning where I was talking about the ICEs really being affected. I think Tesla that Bloomberg article, Tesla definitely played a role, but it's really the culmination of right, all the different factors pushing up the demand at the end of last year and trying to get rid of inventory. And I think the fact of the matter is, the ICEs comparatively competing with EVs in terms of a price parity competitiveness, are really at a disadvantage, losing.

Tu Le:
Losing most fights. 

Lei Xing:
So that's why you see these, a lot of these deep deep price cuts are on ICEs.

Tu Le:
And let's be clear, Lei: the main victims of this are the foreign legacies. 

Lei Xing:
So one rumored brand backing out of China is Mitsubishi, because they haven’t been selling well. 

Tu Le:
They still sell in China?

Lei Xing:
Yeah the GAC Mitsubishi which was rumor to kind of, Mitsubishi backing out and that asset will be given to GAC AION or something.

Tu Le:
The GAC guys need a hug. Their foreign partners aren't super nice.

Lei Xing:
So Skoda we talked about last episode, I think they're out. Mitsubishi probably will be out. These are the third or fourth-tier foreign brands that are, there are pretty much done.

Tu Le:
I think a lot of the Stellantis brands need to look at themselves in the mirror and say, is it worth getting completely beat up until sufficient reinforcements in the form of new products that are, in He Xiaopeg's words, smart technology driven? If you don't have a really aggressive feature set on the smart technology side of things and for the China market, I think you can kind of forget about it.

Lei Xing:
And then also we should mention about LeapMotor since they are also a Hong Kong-listed company now, they announced their earnings. I think they lost about RMB5 billion last year, almost twice what they lost the year before. I think there are margins improved, but it was still negative 15%. Because their remember their sales are, majority are the T03, the cheaper, smaller EV and their sales haven't been well.

Tu Le:
For our audience, LeapMotor sells $10, $12, $15,000 cars or EVs. So they are in likely the most brutal sub-category of mass market vehicles.

Lei Xing:
And their first two months deliveries, I think combined were like just over 4,000 units. I think that's very unsustainable going forward.

Tu Le:
Well, like Lawler said, Lei, like Lawler said, a startup loses money. But LeapMotor was resurrected because I thought they were dead years ago. So.

Lei Xing:
It's all relative, right? I mean a -40% margin is a lot worse than a -15%, so they improved. But the other one I was, it just brought up to my mind was Evergrande also announced their numbers. It looked like they only delivered roughly 900 units of the…

Tu Le:
Dead man walking.

Lei Xing:
The Hengchi 5 since September, 900 units. And I think they needed a number was like RMB29 billion they need to finance to keep it going. So these companies, man, Skoda, Mitsubishi, LeapMotor, Hengchi, WM Motor, we don't even have to talk about WM Motor, all of a sudden are confronting nightmarish conditions.

Tu Le:
I said in that Bloomberg article that I don't see anything really changing throughout 2023 with how the price war is going to continue for a while. Because of the new products that are going to be launched and the new brands that are still to be launched. So I think throughout 2023 and there's going to be buzz and anxiousness in the air for the Shanghai Auto Show I think.

Lei Xing:
Yeah we agreed on there is going to be a lot of losers, right? Which I think in retrospect this should be good for the market. Because going back to Geely a little bit, Geely, what's his name? Gui Shengyue, right? He said the price war is good in the long run. Because all Geely talked about was also cost control, also system, systematic capabilities, scale. So hopefully that will translate.

Tu Le:
We can't look at, Geely needs to be looked at more like a legacy than a startup, obviously. And so they have a lot more capital than any startup would. And so they're going to be fine. I think a lot of their brands are doing well relatively. But to your point, those four or five that you had mentioned are on a watch right now. Because at a certain point in time, you give up right? 900 units in September, that's not even trying.

Lei Xing:
900 units since September, not in September.

Tu Le:
Yeah since September. So, wow, wow, wow.

Lei Xing:
And they had said that they received like 37,000 orders for the Hengchi.

Tu Le:
By the way, we are speeding towards March 30, and I have not heard a peep out of FF, so.

Lei Xing:
Well, March 29, they're doing a countdown already. March 29 U.S. time will be SOP so I'm looking forward to it.

Tu Le:
Did they get that $100 million?

Lei Xing:
They must have, otherwise there's no SOP.

Tu Le:
So you wrote in your Twitter feed NVIDIA. What do we want to talk about NVIDIA? I was head scratching there.

Lei Xing:
Yeah NVIDIA. I didn't see the Jensen Huang speech at the GTC but I saw a lot of videos being shared, and he talked about the iPhone moment. But what I thought was NVIDIA is the biggest beneficiary of this, AGI or generative AI revolution, because they need the computing to do these things that are spitted out, right? NVIDIA is just sitting there counting Benjamins basically

Tu Le:
And we had a conversation with our friend in Silicon Valley a while back. He basically said that A100 chip, they created a new one basically bent down. And so they worked overtime to find a replacement chip for the one that was banned. And so to your point Lei, they and this is where we're going to get into the CHIPS Act, because it's been, more detail has been given about the CHIPS Act. So this week, let me tell the audience what happened. This week, the CHIPS Act is the U.S. government's encouragement or bringing back or reassuring fabrication of silicon in the United States. TSMC has already famously announced, I think, a total of $4 billion worth of investment in Arizona. I think Intel is investing in Ohhio. And so the CHIPS Act said if you're going to get money for and subsidies from the U.S. government to help you build out your capacity here, you cannot increase capacity for any facilities outside of non-friendly countries re: China. For any chips that utilize 28 nanometer or less technology. So guess who also fabricates chips in China: Intel, TSMC and a few others. So they are tightening the screws a little bit on the chip availability for Chinese companies. So it's not going to affect the autonomous vehicle or the EV companies in any way immediately. But as the necessary computing power increases because of NGP, because of Driver 3.0, because of Driver 4.0, whatever, we could see the AV, what's the right way, the AV arc for China kind of flatten out a little bit.

Lei Xing:
I mean it's just amazing to see how NVIDIA just dominates. BYD right doing that Orin chip later this year. But if you don't have an Orin, you don't sell in China, I mean if you look at all these smart EV startups, right? You have to have an Orin chip. It's a selling point. And then NVIDIA also working with the three, ASML, TSMC and the other one I forget, these equipment, right?

Tu Le:
KLA?

Lei Xing:
Yeah. And the what, the Omniverse, how much they're involved in automotive manufacturing operations? BMW right? Using this feature. And then working with Lenovo, Lenovo is developing its own domain controller with NVIDIA’s Thor platform, and they're the first one to use that platform. There's another China factor.

Tu Le:
Oh and by the way, BYD just announced they're using Orin chips in their next generation of vehicles, too.

Lei Xing:
Yeah, that's what I was saying that you have to have this selling point that we have this NVIDIA inside.

Tu Le:
Did I talk about this last week? Because the Wire China had that article about NVIDIA and the moat that they created using software? So why one of the reasons, the acceleration and development and the progress on AI is because NVIDIA has some of the most cutting edge technology and ASICs in the world, but they also have created a software language called CUDA, compute unified device architecture. And it's a bunch of, you can use it if you buy NVIDIA chips and it creates, or it accelerates, and it helps build the systems for AI and for these calculations to happen super-fast. So Chinese companies are going to be shut out of this. And they can't use CUDA. So if you have a Wire China subscription, then I invite you to, I think it was last week’s major story, headline story, but super interesting. And we kind of knew about it earlier, right? Because we talked to NVIDIA earlier this year or was it late last year? They are kind of sort of head and shoulders above everyone else, even Qualcomms and Mobileye for sure. So. But is there anything else you wanted to talk about, Sir?

Lei Xing:
The other thing to mention was just Kia because they announced their China NEV strategy in 2023, the way I put is better late than never, but it looks like it's, for the foreign legacies, this is kind of like their last hurrah of investing in the China NEV market. And what Kia announced is one example of that. It's very conservative, right? 450,000 units sales by 2030 in China, including 180,000 EVs in 2030.

Tu Le:
That's going to be, by 2030, we're probably talking about a 15 million-unit market likely, 12 to 14 million-unit market.

Lei Xing:
And globally they have this ambition to sell 4.3 million vehicles by 2030. So China only accounts 10% of that by then.

Tu Le:
Which is ironic because it's going to be the largest EV market in the world. It will continue to be the largest EV market in the world.

Lei Xing:
I just feel, I mean the disparity, the difference of Hyundai Kia as a brand in China and outside China, it's just so stark. I mean, but kudos to Kia to still, not giving up. The EV5 Concept, right? It will be the perfect vehicle for the Chinese market, they are launching it in China first. Like I said RMB200,000-300,000.

Tu Le:
Maybe they'll turn a corner.

Lei Xing:
I hope so. 

Tu Le:
I think it will be a bit tough, because you and I know that there's likely other things in play here, but I don't have anything else, sir. Let me take a quick look at my newsletter.

Lei Xing:
Yeah that the Koreans it's just unfortunate. And sometimes I think they don't deserve the situation that they're in, but it's tough.

Tu Le:
They seem to be doing the product stuff, right but just can't catch a break on the sales side in China.

Lei Xing:
Yeah, I think it was a good thing they did this outside of Shanghai Auto Show. The global president came, the design chief came. So that's very important.

Tu Le:
So I don't have anything else Lei, let's open the room up and see if anybody has any questions, if not, I think we can close up shop. We should let everyone know our latest MAX episode dropped, episode #15. Maybe you can talk about a little bit, Lei.

Lei Xing:
Yeah with Marco Kollmeier, the managing director of HOLON, which is the autonomous mover that they unveiled in CES, and it’s basically, I said, it was 6 years in the making because they had announced their first generation of the rolling chassis platform at Auto Shanghai 2017, and which iterated into a platform 2.0 at Auto Shanghai 2019. And I said it's the epitome of the changing OEM supplier fight to grab a piece of this mobility market, because this is a Benteler, 150-year-old company coming out with a startup doing autonomous movers. So, yeah, right. And by the way, Benteler did provide help with Evergrande with that rolling chassis supposedly.

Tu Le:
Good for them. They are trying. They're not like…

Lei Xing:
Yeah, it's interesting to see that this journey of the transformation.

Tu Le:
Yeah, man, I think that the HOLON story is pretty interesting and the fact that they want to compete, go head to head with the Waymos and the Cruises is pretty amazing to me. So good luck to them for sure. I think Germany or if we're being specific, Austria could use a boost, I guess. Or European technology driven companies like that could use a boost. So that's it, man. I don't have anything else.

Lei Xing:
Same here.

Tu Le:
Let's close it out here. Thanks, everyone for listening. Good morning, good afternoon, good evening and we will talk with you all next week. 

Lei Xing:
Likewise. Bye bye!

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.

(Cont.) Episode #109 - XPeng Earnings, Geely Explained, Updates on the Price War