MAX Episode #17 - James Hind, Founder & CEO carwow

Tu & Lei have a chat with James Hind, Founder and CEO of carwow.

carwow is an online marketplace for buying and selling new and used cars and started in the UK but have since launched in Germany in 2016 and Spain in 2018. 

For those of you outside of Europe that aren’t yet familiar with carwow - in 2022, there were over 109 million visits to carwow sites with over £5B worth of cars bought and sold on the carwow platform. 

But not only does carwow make it easier for buyers and sellers to transact, it has the largest automotive YouTube channel in the world providing some of the most compelling and entertaining automotive content on the interwebs. 

The carwow YouTube channel which was launched in 2014 has over 2.6 billion views from it’s more than 8.2 million subscribers and growing. 

James talked us through his background and how he founded the carwow platform. I learned a lot about how his platform works and how they’ve developed their stickiness. 

James also talks to us about the trends he’s seeing the UK and German markets and how aspiring companies that are new to the automotive space can build their awareness and make a big splash. 

James has built carwow into a key resource for new brands and a key tool for directly engaging potential car buyers. Don't miss this terrific conversation!

Transcript

CEM MAX #17
James Hind, Co-Founder & CEO, carwow
Recorded on March 23, 2023

Tu Le:
Hi, everyone, Tu Le here, one half of the China EVs & More duo. Outside of hosting our weekly live Twitter Spaces room and China EVs & More podcast, Lei and I are always kicking around ideas for new ways to inform you, our audience on all that's happening around the world in the EV, AV and mobility sectors. When I approached Lei about launching this podcast a couple of years ago, I had anticipated that what happens in China in these sectors would have huge implications globally. That's precisely the case, especially in Europe and the United States, the two other largest auto markets, despite all of the drama of 2022, China was still able to lead the world in NEV sales at around 6.5 million units and it wasn't even close. That's almost 100% year over year growth, by the way. What's more, of the 1.8 million EVs sold in Europe between Q1 and Q3 of 2022, 11% came from Chinese automakers, a significant increase from just 2% in 2020.
 
That number is only going to grow. That's why it's so important to learn and know more about these companies, executives, brands, products, features and services that are already hitting your shores, whether you're a consumer, analyst, consultant, banker, but especially if you're a legacy OEM or tier-1. I'm pretty confident that there isn't anyone else out there that can provide you with the type of detailed up to date and accurate coverage, insights and opinions that Lei and I do. Our audience has grown significantly as the podcast have piled up.

So thank you for listening, being curious and keeping us honest. I'm very pleased to introduce our latest MAX episode where we bring you conversations we've had with special guests from the EV, AV, chip, battery and mobility space. In this MAX episode, Lei and I have the great pleasure of speaking with founder & CEO of carwow James Hind. Carwow is an online marketplace for buying and selling new and used cars. Carwow started in the UK but have since launched in Germany in 2016 and Spain in 2018. For those of you outside of Europe that aren't familiar with carwow, in 2022, there were over 109 million visits to carwow sites with over £5 billion worth of cars bought and sold on the carwow platform. But not only does carwow make it easier for buyers and sellers to transact, it has the largest automotive YouTube channel in the world, providing some of the most compelling and entertaining automotive content on the interwebs. Per carwow: We entertain, inform and advise cars through video, written content and social. A few mind-numbing statistics: the carwow YouTube channel, which was launched in 2014, has had over 2.6 billion, with the b, views from its more than 8.2 million subscribers. Carwow, unlike most other automotive sites that transact directly with customers, works with brands, dealers and leasing companies to help them reach potential customers and helps facilitate transactions between the two parties.

Carwow was launched in 2010, and in just over a decade, has become a trusted powerhouse for buyers, sellers, and enthusiasts in the automotive space. Lei and I had a great chat with James. He talked us through his background and how he founded the carwow platform. I learned a lot about how his platform works and how they've developed their stickiness. James also talks to us about the trends he's seeing in the UK and German markets, and how aspiring EV companies that are new to the automotive space can build their overseas awareness and make a big splash. And with the increase of exports from Chinese brands into the UK and EU markets, carwow will be a key touch point for many China EV Inc. as they begin to engage with potential customers. They'll need carwow to help build awareness of their brands and learn more about each of the products being launched into those markets. Let's just say carwow will be a key player in helping China EV Inc. build their businesses in Europe.

Tu Le:
So, James, thank you for being a guest on the latest China EVs & More MAX series. I've heard about carwow and I think Lei has as well, but it's great to have you on because one of the things that we don't really cover is the sales aspect of the Chinese EV experience and because of 2030 coming around the corner for the UK, 2035 in Europe. And I know you're in Germany and you're building a presence there. Can you tell us a little bit about carwow? First of all, you were the founder. So what did you see in 2009, that was like, you know what, I'm going to build this amazing sales platform, information platform, content platform. Can you tell us a little about yourself, your journey and how you came to found carwow?

James Hind:
Yeah, for sure, just first of all, thank you for having me on. I think I cold emailed you because I've been listening to you guys for about 6 months now. I reckon a good 90% of my knowledge of Chinese car manufacturers comes from you guys.

Tu Le:
Awesome! Hopefully we're pretty accurate. 

James Hind:
It's fantastic, very easy listening and very informative. So thank you. As you said, I founded carwow quite a while ago now. And I was quite young at the time. I just graduated from university, didn't quite know what I wanted to do. I got an internship at a fund management, finance company put me off, worked as a ski guide for a bit, which is good fun and left that thinking, what do I do? I'd always been into cars, and the initial idea for carwow was pretty similar to part of what we do now, is helping people choose which car to buy. Massive believer that a car is a really important thing for consumers, the majority of consumers, particularly in Europe, it's a huge financial purchase and many people are worried about buying the wrong thing or don't know where to start.

So we created a content website that help consumers compare different cars, aggregated what people are saying about every car, just help them work out which car should I buy. We're a big believer that there's very few very bad cars, there’s some, but there's very few very bad cars. It’s just some cars are good for some people, and some cars are better than other people, and it's different preferences. So we set up that as a content site, run that for a few years and then added on the ability to help you buy cars as well. Traditionally focused on brand new cars as opposed to used cars. And then we launched, as you said, in Germany, we’re number one in selling new cars in Germany, Spain as well. And then we've also added used cars, leasing. We help consumers sell their cars through a process as well. So kind of morphed, but always focused on helping the consumer and we're a marketplace. We don't sell cars, we don't buy cars ourselves, we work with the car manufacturers, the car dealers and represent them. 

Tu Le:
Are you a tech guy? 

James Hind:
No. I would say I'm a generalist, master of nothing, but I co-founded the business with my wife initially. So she led the kind of brand, all the design, and then a guy called David, who's still with us, he's the tech guy, and so he's our CTO, he’s the one who brings the technology.

Lei Xing:
So I guess you develop this really trusted site now, among I guess, the British, the three biggest markets: Germany, UK and Spain, right? I mean you built up a following. Tell us about some of the stickiness that you have in terms of keeping your customers, different type of content, information you have on your platform, explain that a little bit more.

James Hind:
Yeah, sure. So we always, a lot of people come to carwow without knowing what car to buy. They haven't worked out should I buy a VW ID.3, or should I buy a Tesla Model Y, and they're using our content. So we produce video content, actually the world's biggest producer of video content. A billion views last year of our content on YouTube, 8 million subscribers, it’s the world's biggest. We also have another channel in German, another channel in Spanish as well. And then we produce a lot of written content and we have lots of product tools to help you work out what car to buy. So big part of that is that stickiness is consumers are finding us when they're researching their car, they then go on and compare where to buy it. Should they buy a new car? Here's the offers, here's what's in stock. Should they lease it? Should they buy a used car? Should they buy a completely different model altogether? The vast majority of consumers are still working out when it comes to carwow what should I buy, that's where I think it's really interesting with the Chinese OEMs coming in, because they haven't got a brand broadly at the moment at all, but they want to find consumers who are in market who are about to buy a car, and carwow gives them an amazing platform to do that. You can target people who are looking at buying a Model Y and saying, well what about this instead? So it’s a great way for these new brands that have no brand legacy, no brand awareness at the moment to capture consumers. So we're in talks with all the Chinese OEMs, who are all, as you know, launching in Europe. But I think the way we see the Chinese OEMs so far is I've kind of referred to it as we've seen phase one of Chinese OEMs and it’s very limited. It's basically MG, SAIC, they've done very well, but they're using a brand that has recognition in the UK, limited recognition arguably in Germany. It's an old British brand, not very positive brand either. They went bust, they weren’t known for very good cars whatsoever, but they had some brand legacy. They are the majority of, almost of few Chinese sales in Europe at the moment.

Tu Le:
Do people know that it's Chinese built?

James Hind:
We haven't done exact research, I would say largely not, but they think they're fantastic cars, they are very well priced, great technology, great build quality for the price point, really good car. It won our car of the year award last year.

Tu Le:
Do you think that if they marketed it as Chinese made British brand, it would make a difference negatively?

James Hind:
I think it would. I think it would. We did a bit of surveys not about MG specifically, but we ask consumers in the UK and in Germany, why wouldn't you buy a Chinese car? The biggest reason was political reasons. So I know you guys talked about a lot about the U.S.-China political risk, but the same thing with Europe. Europe will mirror the U.S. I think that was the number one thing that put people off at the moment at least.

Tu Le:
You know it’s funny. I have a friend who founded a pedal bike company and bought steel in the U.S., mostly everything he could. He bent the aluminum or steel with American labor, welders, and everything. And he's like, you know Americans love American-made stuff. It's the second most important thing in buying criteria. And he asked me, you know what the first is? Price. And so I think politics aside, that might go out the window if you have a compelling product that happens to be built in China. Obviously Geely, or SAIC is doing the right thing by not emphasizing that its Chinese built, but I don't know if that's going to be avoidable because we're likely going to see a lot more Chinese brands. And it will move to the forefront of politics. So.

James Hind:
I agree and I don't think it's a big reason why, I don't think it's a reason, in general, why it won't be successful. Everyone's got a phone in their pocket, they know where it comes from. 

Lei Xing:
James, let me ask you this question. I want to put on a hat of an investor, maybe Tu, he puts on a hat of a dealer or an end consumer, let's say, new to the UK. I still want to understand if you can give us the 30-second elevator pitch for why I should be investing into you or why Tu should use your platform for, let's say, I want to get this correct that there's no transaction involved, but more research?

James Hind:
So if I do and if I do three very quick elevator pitches, consumer, dealer/car manufacturer kind of linking into each other anyway. And then third, investor. The consumer pitch is fairly simple, we’ll help you work out which car you should buy through all our videos of cars, content of cars to help you work out for your individual needs, which one might be best. Let's say through that, we work out the Kia EV6 is great for you. We’ll help you work out where you can buy it new and what the availability is. And we'll show you that. And then we'll give you, you can contact these Kia dealers or Kia direct, will show you the leasing options for it, so the monthly prices for a new one. We will show you similar used Kia EV6 as well. She should work out, should I buy a new EV6, or used one. And then we'll say, because you're considering EV6, what else should you be considering as well? It should be a BYD thing that you've never heard of, or it should be a NIO thing that you actually have never heard of or it should be a Mercedes, these are your choices. And then we’ll also help you sell your current car before you buy your next one through a process where dealers bid to buy your car from you, come to your house and pick it up.

Tu Le:
James, let me interrupt you there. On these recommendation, these secondary and tertiary recommendations, are you using your data to push what consumers have also looked at? Is that kind of what criteria is?

James Hind:
Yes. And exactly that. So people who looked at this ended up buying this. So helpful advice. And then we have a business unit within carwow that sells that as a promotional spot to car manufacturers. So the majority of car manufacturers pay for this through carwow and they'll promote a car that they are trying to push, whether it's a new brand, a new model they've just launched or the one that they just want to push, marketing in general. So very, very similar to when you go on Amazon and you search for say, Sony headphones, you might get a big thing that says Bose headphones. And you interact with it. You're still on the Amazon website, but you're exploring both and they're paying for it. We build the same thing for car manufacturers to promote them all.

Lei Xing:
The dealers would pay you a lead generation fee. Is that correct? Is that the business model basically?

James Hind:
Exactly. The pitch for dealers and car manufacturers as well. Because, Tesla, for example, obviously they're their own dealers. Traditional manufacturers often have franchise dealers. Either way people are paying us for those leads. The pitch to them is, the dealer in particular in Europe is quite reliant on the show room. It's their physical asset, and they used to enjoy people walking in 20 years ago and they’d walk into a few showrooms. So the dealer would have a chance to sell them. Nowadays, in Europe, people make up their choice of which car to buy largely online. So the role of the showroom is much more redundant. So they're using carwow ultimately for marketing to reach consumers who are in market.

Tu Le:
So, would you say that in most cases, I don't want to put words in your mouth, but in most cases, you substitute the dealer, or you supplement the dealer?

James Hind: 
Supplement the dealer. So we're helping the dealer and reach consumers ultimately. Or the manufacturers we are helping them reach consumers as well.

Tu Le:
So it ultimately still funnels back into the dealer.

James Hind:
Yeah, exactly. Again, or the manufacturer for the ones paying for it.

Lei Xing:
Yeah, and so I'm thinking of…

Tu Le:
Lei’s very interested, obviously.

Lei Xing:
I am. I'm thinking of some of the other sites out there, let's say in the U.S., so TrueCar, cars.com, carvana, these I would say probably are different than what you are doing.

James Hind:
Agreed, I think the most similar is probably Autohome in China.

Lei Xing:
Autohome, ok. 

James Hind:
That's the most similar because they have created content, the new car, manufacturers, used car, that's the most similar to us.

Lei Xing:
So you're the Autohome of the UK, let's say, basically.

James Hind:
Yeah, exactly. 

Lei Xing:
Ok, that’s more clear.

Tu Le:
Likely Europe, soon to be, right?

James Hind:
I think, and then when it comes onto the kind of what's the investor pitch. It's ultimately, it's a very high transactional purchase. A car has lots of money involved. Manufacturers spend a fortune on advertising, fortune particularly recently on discounts. We capture a lot of that value while being a very asset light business with high consumer reach. And our investors are well known European venture capital funds, private equity. We also have Mercedes as an investor. We have Volvo as an investor, and we have a company owned by Geely as an investor.

Tu Le:
So you are still private?

James Hind:
Yes.

Tu Le:
You had sent me a correspondence, and I wanted you to talk a little bit about some of these macro trends you identified. I think you identified five macro trends: the online shift, electric vehicles, DTC or D2C agency model, new manufacturers and alternative ownership. Can you talk about each one of those? And how back in 2009, it was X, now it's evolved into Y and why do you think that? One of the things and this is a multiple layered question. So is there a clear delineation between younger than 40 they are always on carwow looking at cars, older than 40, not so much. Is there a clear delineation of that stuff?

James Hind:
So on that one, no, the vast majority of our consumers who buy a brand new car is over 50. So new car owners in Europe are generally older, wealthier people, so it's not…

Lei Xing:
That’s very old.

James Hind:
But the majority are over 50, you have a lot of 70 years old, 80 years old buying because they got cash. But no, so we don't have that, but you're right that the macro trends behind the new car industry in Europe and same across the world are huge. I think if I start with online, so no one bought cars online 15 years ago. There's a challenge with what you define as pure online. So everyone, Tesla is famous for you can buy it online. Doesn't mean they don’t have showrooms, doesn't mean they don’t have a telephone number that you can ring up and speak to people. And we know the majority people don't just buy it online. They do have some form of human interaction or physical interaction with the car as well. But that's a shift that again is obviously one trend. Our belief is the majority of people still want to see the car in some form or another, be that at a showroom, in a shopping mall at some point before buying it. That's fine. You have electric, so as you said 2035 to buy a new car, it has to be electric. It can't be a pure ICE vehicle. 2030 in the UK which is not that far away.

Tu Le:
That's an aggressive date, by the way.

James Hind:
It’s very aggressive. And I think you have some of the legacy car manufacturers, particularly in Germany pushing against that. You also have again, your favorite topic, Chinese car manufacturers. I think we've just seen the start of it, but again, MG success has been great. Polestar you can debate is that Chinese manufacture or not? Ultimately, it's a Swedish brand, but no one's really heard of it before, doing very, very well as well. Then you have very, very recently, BYD launching, NIO, Xpeng, etc. The sales numbers for all of the pure Chinese car manufacturers launching under their own brands are very small. I mean you're talking probably dozens of cars a month in most countries that they've launched, right? I think public information obviously, but it's, generally launching some of the Scandinavian countries like Norway, because they have very high electric car penetration. About 65% of cars bought in Norway are electric. But the sales figures so far for those pure Chinese car manufacturers are very, very low.

Tu Le:
Yeah, those are more or less feel good stories. They're not moving the volume number.

James Hind:
Not yet, but they are investing, like NIO is launching and has put live, I think, about a dozen battery swap stations as well. So they are planning for it, they've all got big ambitions as well.

Tu Le:
And I just saw that they opened their first NIO House in the Netherlands yesterday or today. 

Lei Xing:
Today right now. Just a few hours ago.

Tu Le:
Are you seeing more traffic for the BYD vehicles, the NIO vehicles and the Xpeng vehicles or?

James Hind:
Very limited so far. The challenge they have is, almost no one's heard of BYD or NIO yet. They will do in a few years, no doubt, but not yet heard of it. I think it's quite interesting looking at the different routes that the manufacturers are taking. So for example, you see the only kind of LYNK & Cos you see it, they are car rental fleets at the moment. BYD did a big deal with a big German car rental company called Sixt. Exactly. That's a really good way for them to try to get cars, volume into Europe, cars on the road as well.

Tu Le:
What does that do for the branding, though?

James Hind:
Yeah, I think it's a good question because again, if they use it as a rental car, how much does that lead to sales? I don't know. And it's going to take a long time to see that through. I think the other challenge that Chinese car manufacturers have is very similar to what Tesla initially had in Europe. If you only have a couple of stores in a country, consumers are very worried, well, when I have to service it, how am I going to get the car there and back? It's a day's trip, almost. So we have seen some of the Chinese car manufacturers publicly announce what they're going to do with their network. I think BYD is going for 100 stores in the UK, MG I think has got 140. So they're making sure they're building that servicing location footprint, because everyone can note that when Tesla launched in the UK or Germany, everyone's heard of Tesla. Thanks to Elon Musk, brand awareness not a problem. Everyone knows Tesla is an electric car brand, not a problem. Everyone knows that. But what put a lot of people off was, where am I going to get the car serviced? And what's the residual value going to be? What's the depreciation going to be?

Tu Le:
The current Teslas going into the UK, most of them are Chinese made, correct?

James Hind:
I don't know, Model Ys doing very, very well at the moment. And I think it's the bestselling electric car.

Tu Le:
They built out their superchargers in the UK pretty substantially?

James Hind:
They have.

Tu Le:
You kind of mentioned this, but can you talk a little bit more about how you see these Chinese brands being successful ultimately in the UK and in Germany, it does take time and it does take investment,we know that, but like because you're the largest platform in the UK. Give them some advice, like give them some knowledge, kick them some knowledge.

James Hind:
So I think one thing that you said already, if the price is very competitive, that's a huge help for them. I think I mean you guys know 100 times better than I do, but they can manufacture cars for a lot cheaper. I mean you see it already with some of the cars they are launching in Europe, they're undercutting the Volkswagen products, the equivalent of these products, etc. I think the second thing is making sure they build up that physical footprint so people can get access to the cars before they buy it physically, and so that they can have the car serviced locally to them as well. So most of them are opening up lots of dealer relationships for that. Whereas the traditional OEMs in Europe, again, the opposite way, they are shutting dealers and they're trying to reduce the number of dealers significantly, and they're trying to move everyone to buy online. So they are literally taking opposite approaches to that. But for the Chinese brands and no one's heard of them and they haven't got the trust. I think that's very very important. 

Tu Le:
And most of them are relying on partners too, correct? They're really employee light on the strategy. I don't know how that's going to work out to be quite frank, because Europe is such a diverse set of countries and to either have to manage a brand and positioning in each of those countries and then manage 27 agencies to help you do that. That seems like an impossible task. So one of the things that I think is really important to also remember is that the quality and reliability is pretty close, I think. And so unless we mentioned earlier, unless they make it political, I think, if pricing is competitive, they're going to sell. Do you think that it and we saw last week that BYD said point blank, UK is not somewhere we're going to manufacture because of Brexit. So in long term, do you think they need to manufacture in the UK and in Europe to really be a top brand or competitor in those markets?

James Hind:
I don't think so, not from a European sales point of view. I don't think, I don't think the vast majority of people couldn't tell you where their cars are manufactured. Now, they may assume if I buy an Audi it comes from Germany, they're going to be wrong largely, but they may assume that, but I don't think they actually really care as long as it, like you said, as long as the build quality is fine, they're not. But I think the challenge is, I think the other positives they have is they are largely launching as electric only brands in Europe. Whereas the legacy car manufacturers often create sub brands, BMW i, Mercedes  EQ, etc. And I think having that power of it's an electric only brand, it’s a nice fresh start to them. Again, the legacies can't compete with.

Lei Xing:
In terms of content on carwow, are you already having China EV Inc., some of the content on there? Are people more, do you see more interest in searching for China EV brands? What is it like?

James Hind:
So we've seen, so we do produce some content. We're starting to review some of the cars, so we had ORA in recently. They've launched in the UK. To be honest, at the moment, the engagement with that is relatively low. The main reason being, again, they haven't heard of the brand. So, if they haven't heard of it, it's hard to get the kind of interest in it. Now again, big believers that will build over time, but at the moment it is a challenge.

Tu Le:
Are you saying that they probably just need to invest a bit more in marketing dollars to create that awareness to like ignite the awareness?

James Hind:
They will need to. Yes, no doubt.

Tu Le:
So how is carwow accelerating the EV transition? How are you helping the UK government achieve this goal of all electric by 2030?

James Hind:
It is a tough goal. I mean so we over index a lot on electric cars and we're big believers that if you can afford a brand new car, you should be buying electric for the vast majority of people. The challenge that people have around electric car, the range anxiety, the kind of battery conditions, etc. We try and educate consumers as much as possible. You don't need to worry about that. Unless you're driving hundreds and hundreds of miles every single week, you're going to be okay with it. Because most people in Europe, their journeys are pretty short. Lots and lots of people in the UK have access to charging be it at home on their driveway or the charging network publicly is pretty good as well. The vast majority of consumers in Europe, they don't own their car outright. They're financing it with a return or a lease. So they don't need to worry about future depreciation or the battery condition after 3 years. It’s not their concern. So we do strongly encourage people to buy electric and we believe it is the best choice.

Tu Le:
Are you seeing on your website a trend towards more interest in electric vehicles or like questions about it?

James Hind:
Yeah, so very heavy trend overall, the challenge has been actually in the last 9, 12 months with electricity prices in Europe have gone extremely high because of the Ukraine Russia war. That has you see it very clearly that when electricity prices go up, that interest goes down in electric cars, it's very clear trend.

Tu Le:
That's going to be a lingering problem too, as long as the war, right?

Lei Xing:
Maybe going back to Tesla a little bit. What are the lessons to be learned from the Tesla experience for the China EV Inc.? The good and the bad.

James Hind:
So I think we can remember as well that when Tesla launched in Europe, everyone knew the brand of Tesla already, you didn't have to educate people about what Tesla is. Thanks to Elon Musk, they knew about it already. At the time as well, they were almost the only, unless you're going to buy a Nissan Leaf, they were the only electric car out there. If you wanted a decent electric car, you bought a Tesla, and then when the Model 3 came along at the time, it was pretty much the only high volume kind of mid-level car. And they had the huge advantage of being associated with electric. So anyone looking to buy electric would automatically consider Tesla straight away. The challenge now is you can buy an electric car from every traditional car manufacturer, multiple models. And therefore, your electric is not a usp anymore. Now. It's good to be associated with electric as a brand, sure, but it's not a guaranteed selling point at all. But I think what Tesla did is built out their physical store locations. There is a Tesla showroom in broadly every big city, people can get access to the car, sit in it before they buy it. If they have servicing, they can go not very far to get it serviced and repaired, that built trust as well. And they've done very, very well from that. Supercharger network helps as well. And it's kind of known as a positive. I think there is rumblings about they are opening up or testing opening up to non-Teslas, which I’m not quite sure, I don't quite understand why they did it.

Tu Le:
They've already done that in the Netherlands or testing it out in the Netherlands.

James Hind:
I'm still not quite sure why. I just thought that would be a very competitive advantage, but they are.

Tu Le:
I agree because I think the legacies in order to create that engagement, they need to own that experience of charging, because right now, in the United States in particular, I don't know about the UK yet, but the charging experience in the United States is awful. Broken chargers, chargers that don't work, the apps are inaccurate. To your point, for Tesla chargers, they just work. And they're just for my customers. And so if I was a legacy, I’d jump on that, but…

James Hind:
I agree. I think the challenge that we're seeing with Tesla as well is people who bought a, say Model Y or Model 3. For example, they bought a Model 3, say, 3 years ago, the majority of people buy a car in a 3-year finance term. So when it comes to the end of 3 years, generally they change that lease, they change it into another finance contract. The challenge that comes is, do I want another Model Y at a Model 3? Because they look the same, it is the same car, so I don't want a different color that's not a big change. Whereas there's this new Volvo. Maybe i'll try that for 3 years or there's this new Audi maybe I'll try that for 3 years. So that again, it goes back to the kind of competition with an EV is 100 times bigger than it was say 4 years ago. I think it's an interesting thing. I think you guys have discussed on the podcast as well about you, the traditional OEMs they do facelifts. They changed the car, they update it every whatever 3.5, 4 years. And Tesla haven't gone down that route yet and I think it is something that could help them in terms of repeat business, repeat customers, change it back into assessor again at the end of that lease.

Tu Le:
Now, because of that, have you also seen price cuts in the UK from Tesla?

James Hind:
We have. And another interesting thing is, when Tesla cuts the price, it makes the headlines. You read about it in the newspaper, you hear about it in the news.

Tu Le:
You probably see a bump in sales too, so.

James Hind:
Yeah, but when a traditional car manufacturer cuts the price, no one writes about it. It's not news. It really isn't. Today, again, Tesla have that huge brand appeal and awareness that helps them with that kind of thing. When Tesla cut prices, you see a lot more interest in Tesla. When BMW whatever or someone cuts prices, it's not in the news, so people don't know about it.

Tu Le:
And you know that's kind of the head scratcher because I don't know, the Cybertruck is not going to sell in Europe, obviously, very well, even if it did. And UK I don't think they're really a pickup market. So it's a primary U.S. market only product. So we know globally that the 3 and the Y are pretty long in the tooth, the S and the X are just halo products anyways. But you would think, so I get that they've increased capacity in Berlin and Austin and Shanghai, but it's a head scratcher that they would pick a Cybertruck to be the next vehicle, and then a two door, ultra-fast coupe that looks awesome, by the way, to be the other vehicle, because the 3 and the Y share a ton of parts. So you would think that I can make a model 2. I'll use 50% of the same parts as the 3 and Y and then just make it a hatchback or do this or do that. And this is where Lei and I kind of think that they probably underestimated the speed of the China market and the how competitive it is. So I think if carwow was in China, you'd be working overtime because there's so many different announcements, there's so many new products, there's so many new brands because in 2024 and 2025, there's probably going to be at least 10, 12 brands launching then. And so man, it is coming at you. And so Lei and I are pretty excited about going to the Shanghai Auto Show. I know that, I think Philip is going. And so he'll report back to you and he's going to be like…

James Hind:
I would be going, but I’ve got a baby due end of April, otherwise I'd be right over there.

Tu Le:
You guys stay out of the doghouse, you guys stay out of the doghouse.

James Hind:
You're right in terms of the brands launching. But again, they're all launching or announcing launching in Europe as well. I think the interesting thing will be, I think again, you guys know it 10 times better than I do, but success in China leads to success or not in Europe for them, if China is not working, it seems Europe is second wrung, doesn't matter so much.

Lei Xing:
Yeah, I just want to go back to the Tesla question and I've been thinking that the only company that has really followed that type of route, the showrooms, the supercharger is the differentiator. So NIO is really the one that's following that route, because there are a battery swapping, branding that's instilled in their brand, right? So they've opened up these showrooms. They've opened up these battery swap stations strategically in different locations. So I think they're the closest. Now, the broader distribution tactics. Now we can think about AIWAYS, right? AIWAYS, when they entered was through, I guess, also a rental or leasing in Corsica during the pandemic in 2020. That kind of built the momentum. And then you see Xpeng. Xpeng is working with multiple partners in different countries of Europe, so in the Netherlands it could be one partner, in let's say Sweden, it could be another partner. There's these pretty famous distributor or dealership groups, I can’t name out of top of my head, but that are working with, let's say, the BYDs and I would figure that what works in UK may not work in, let's say, a different market, Sweden, Netherlands. What are your thoughts on that?

James Hind:
So you're right. They are generally picking up the very big dealer groups. Now. There's no dealer group that covers the whole of Europe. They are generally within their own country, there's a little bit of crossover, but you have some big ones I'm afraid.

Tu Le:
And let me stop you there, James. Why is that? Is it a law?

James Hind:
No, I don’t think it’s a law. It's just that, I think, like you said, the markets are quite different. They have their nuances, they have their completely different ways of working at times that we've experienced ourselves. And I don't think people have seen any kind of huge economies of scale to grow across. Now some of them are big, so Emil Frey, Hedin Group, Pendragon in the UK.

Lei Xing:
Louwman.

James Hind:
They are the ones that a lot of the Chinese car manufacturers are going with. Not just those, though, they're also working with some smaller ones.

Tu Le:
Are they full service? Do they import? Do they? Do they buy wholesale and then they help market and everything? They're full service?

James Hind:
Different people doing different things, but yes some are more on the import, some are more on traditional, agents, dealer model, etc. But the markets are different between each other. So you have to build it up. The other weird thing about the UK is we have the steering wheel on the other side to everyone else. When you think of manufacturing that is a challenge to overcome. It is uniqueness, not completely unique to UK obviously, but not many people in the world have that, particularly with it when it comes to Chinese OEMs.

Tu Le:
Yeah, and Lei was talking about all these different countries. And I know that, can you tell us a little bit about how you entered Germany? Because I know Phillip’s the GM over there, and we'll have another conversation with him. I was actually thinking about either having you both on to kind of compare and contrast, because I think we can have a follow-on discussion about that, because I'd love to learn more about in particular, the German market, but maybe you can kind of start us off, how you started in Germany, or when you launched and what you're seeing, the differences between what's going on in the UK and what's going on in Germany. Because I believe in the UK, MG, Ford, the stronger brands are not like in Germany, right? Where Volkswagen is dominant. And so can you talk a little bit about, and compare and contrast those two markets and how you're doing what you're doing in there?

James Hind:
Yeah, so Philip launched carwow Germany for us about like 7 years ago, so we built up dealer network, consumers, got trading pretty well, so it was a number one to new cars by country there as well. There are quite a lot of differences between the markets, Germans like to buy German cars. The majority of sales are German manufacturers, Volkswagen Group, obviously, Audi, Mercedes, etc.

Tu Le:
Do they just think it's a superior product? Or is there some like underlying nationalism going on?

James Hind:
I think it's that. I think and they are great quality products generally as well. There are some other kind of funny differences.

Tu Le:
Unless you're talking about diesels, right? I got to put a dick in there, man. So I was joking around with a German friend, and I was like, you know, you guys talk about how you engineered this, your engineering quality, you guys can't even build a diesel engine. And so I'm taking that title away from you, and he got mad, nein, nein, nein! So anyways, but please go ahead James.

James Hind:
There's some other like small but important differences. So I think Germany is the only place in the world you can drive whatever speed you want. A section of the motorway, the highway, the autobahn. And that is important for a lot of Germans. They love it. I've been there myself and it’s good fun, and electric doesn't work so well for that. So you have that differences. Another big difference on electric is the German government. By far Europe's richest economy. They put a lot of money into subsidizing electric cars. So they had really generous subsidies for buying electric cars and a huge impact on the market it had. We saw huge data shifts as soon as the German government announced this kind of incentives. You had EVs went from, I don't know, single digit percentages to 30, 40, 50% of all sales. So the German government has played a huge role in the adoption of electric cars as well. The other big difference is you have a lot of very small family-owned dealerships, a bit like America, I believe you have a couple of big groups nationwide, but a lot of the very small, and versus the UK we have a lot of big dealer groups.

Tu Le:
Are there franchise laws in Germany that protect and not allow the D2C model in Germany or?

James Hind:
Nothing remotely close to what the U.S. has. It's an interesting trend as well, the kind of agency model. Ultimately the manufacturers are trying to get close to the consumer, reduce the margin they give away to dealers, fix the price everywhere as well. It's been a huge trend, so we have seen some of the brands launch it, Mercedes in the UK has launched this year for it. I think it has a lot of challenges. I think it is also being broadly rolled out during a time when we've had record low supply of new cars, until recently we’ve had pretty high consumer demand for new cars as well. So it's kind of perfect conditions for this kind of model. Now that's unwinding, consumer demand has come down quite a lot. Supply is obviously increased back to kind of normal levels. I think the traditional manufacturers are thinking is this agency model such a kind of clear, obvious idea, particularly again, when you have the Chinese car manufacturers often coming in with the opposite, again, they are coming in with a more traditional model, more margin for dealers. So a lot of dealers in Europe are getting turned, their head is getting turned towards Chinese car manufacturer thinking, I don't really know how much money I'm going to make on this BMW dealer or Audi dealer, whatever. And I’ve got this Chinese car manufacturer saying there's a lot of margin for me to make for a new car on that. It's attractive.

Tu Le:
And then I'm going jump on my soap box because the whole dealer thing in the United States is beyond me for the longest period of time in Michigan where I grew up and I'm currently at, of the Big 3 in Detroit, if I wanted to buy a Tesla, I would have to have it delivered outside of the state of Michigan. In Texas, An Austin Giga-factory built Tesla can't be delivered in Texas until recently and because Elon basically invested billions of dollars into the state. It is ripe for disruption and the dealer experience, and I think you also put this in your correspondence or to your deck, is one of the worst experiences for consumers, because they just want to avoid it like the plague. And so do you think in the UK, more and more brands will try to either use utilize platforms like carwow or bypass, because I see it in 5 years, and on an individual basis, James, you're looking at my brand. You reach out to me directly via my app. I can send you over a car. You can test drive it. I don't need to see the dealer at all. So do you think that's a natural evolution? Or you still think the dealer can evolve into a more customer friendly process for the brand?

James Hind:
I think the last of it, so dealers can evolve into a much more customer friendly, remove the kind of haggling bit that really particularly in Europe, people don't like haggling. They don't haggle for anything, but they do for a new car or a used car. And removing that is good for the consumer. I think the dealer can then become focused on the customer experience, focused on demonstrating the product as best as possible. Again, it's a scale game. Like you said, there's lots of countries in Europe. You need that geographical footprint of showrooms and to do the test a model of owning your own one and doing all yourself. It's much quicker to do some form of franchise agreement or agency agreement with dealers. You can get to the ground much quicker. And I think that that U.S. dealer rules is probably, and I hear your thoughts and why Chinese China EV is talking about Europe. It's not really talking about America nearly as much. The plans are…

Lei Xing:
At least not publicly.

James Hind:
No no, sure but they're active in Europe, they are launching in Europe. It's much slower in the U.S.

Tu Le:
There are at least 20 brands that have either announced or in Europe already, so. They're actively. And to Lei’s point, we've heard things and the biggest roadblock is the 27.5% tariff that the Trump Administration put on. That despite that tariff, GM is shipping Chinese made cars to the United States. Polestar is currently, but they're goanna be building the Polestar 3 in South Carolina and in China. And so it's just like being in Europe or more precisely being in Germany, because the United States is the second largest market in the world, sold 14 million cars last year. So they got to be there. Now they don't have to manufacture in United States. They can be in North America. So I'm excited because what we'll likely see in the United States is a head start given to the legacies. And when I say legacies, the Koreans are doing really well. And actually I  want to ask you about that in the UK, but there's a perception lag. There is a because Lei finally got to drive BYD late last year, earlier this year. And so it's not perfect, but if they price it competitively, it should do pretty well because European, cheap European cars are kind of trash too. So it's not a China thing only. I don't think the Europeans and the Americans are ready for the level of connectivity that the Chinese consumers want and desire. But let me ask you, do you see more searches or more interest in not just range, but can you connect to CarPlay? Are their digital or connected features that more and more consumers in the UK are looking for?

James Hind:
We have done some research on that. I mean almost a quick summary is they want Apple CarPlay or Android Auto. And I'm the same. As long as you plug your phone in you got a big screen broadly that they were the same.

Lei Xing:
I love the Apple CarPlay on my Hyundai right now.

James Hind:
Yeah exactly. 

Tu Le:
And this is the old version because Apple CarPlay, the new version is supposed to be even better.

James Hind:
And I've got a Model X and one of the things that I'm not so keen on is there's no Apple CarPlay.

Lei Xing:
I and I hated it when I had the BYD and I didn't have the Apple CarPlay.

Tu Le:
But see, and this is probably a separate conversation James, because this is where they're going to need your help and you should probably start looking at some content because even the legacy is, not just China EV Inc., but the foreign legacies are forecasting 30% of the revenue by 2030 is going to be in services, right?

James Hind:
I still, I have asked people, what services! Because there are some car manufacturers in…

Tu Le:
I 100% agree.

James Hind:
In Europe they have tried that, often that press release saying we are charging for heated seats. It goes down very badly.

Tu Le:
No, but the BYD just, BYD just screwed it up. You don't turn something that you gave for free into something you charge for the next day that, you got to create something new, right?

James Hind:
BMW did that I think briefly, it didn't last I think. I think I mean you guys have talked about it. Tesla have charged for full self driving, but this I can't think of other examples where you've had that.

Tu Le:
I think the more experiments and the more features will correspond to L2 and L3 ADAS being more ubiquitous in vehicles. And the challenges though that if you are using Apple CarPlay, Apple is already better at gathering the data, accessing the data, creating services based on that data. And so you as the brand have to share revenue with them and then share the data, it's a chicken and egg thing because they don't have the software teams to be able to do it themselves without, if they try to do it themselves, they get the ID.4. And so you've probably at least, last year's, you probably have a lot of content about some of the wonkiness of the entertainment system on the ID.4.

James Hind:
ID.4 sold pretty well, but I think we had the BYD ATTO 3, the content team recently and it was the first launch version. So there's a little bit of rough edges, but it's a very good car, it's well priced, good quality.

Lei Xing:
I drove the ATTO 3  last October on the streets of Paris. I thought it would be a perfect car for the city. I guess probably you have the similar conclusion.

James Hind:
Yeah exactly, Europeans like that kind of midsize 4x4. And it's got electric on it. It's got all the toys that you'd expect on it, and it'll do well.

Tu Le:
Did they price it competitively in the UK?

James Hind:
I think they have yet to announce the UK pricing. Actually no, that's not true. I think I have seen it. It is competitively priced. You're undercutting the Volkswagen equivalent ID.3, ID.4 types, or ID.4 in this case quite a bit. 

Lei Xing:
So James, let me, Tu mentioned the disruption. Let me throw you a curve ball and a pertinent question, because the last few weeks and months, all we've been hearing about is generative AI namely ChatGPT, Ernie Bot, Bard, all of these things happening. I don't know whether you've had internal conversations of how that may affect what you're doing at carwow and the overall general dealer, distribution, landscape. What are your thoughts? 

James Hind:
It is something we've given thought to. If you've got something that can help generate suggestions for what car to buy, etc., and where to buy it, there's something there. I think the advantage we have is, video is a big part of what we do. You can't bring a car to life through text or even photos. Video helps with that. We got a lot of very deep integration with car manufacturers. What they've got in stock and what the financing prices are at the moment, what the current pricing discounts is. And I think the other bit is a huge part of carwow is still ultimately putting you in touch with a human who works at a car manufacturer to speak to, or who works at a car dealership to speak to. Again that the vast number of people still have some form of human interaction before buying a car. So we're not too worried. We are looking at how we can leverage that for our own use without doubt, the content, particularly written content for sure.

Lei Xing:
So quite a few brands, Chinese, mostly Chinese EV brands they're integrating Baidu’s Earnie Bot, but that's a little bit different than what we're talking about. That's more of the Apple CarPlay, those kind of features into the cars to have kind of a selling point. Let’s go back to carwow and looking forward into the future. What is next for you? What are you looking to grow? What's the future for you guys?

James Hind:
So we see a big future in continuing the growth of our new car business, which is the traditional part of carwow. Again, with electric, it's a huge shift. If you want to buy an electric car, you largely have to buy a new one at the moment, there are very few used electric. We're excited about playing a role in speeding up, very excited about Chinese, China EV and helping them launch in Europe and given a platform to launch with. 

Tu Le:
They need you.

James Hind:
We reach the market, we ultimately are a marketing channel and we've got the consumer. We're very excited. We have a big part of our business that helps consumers sell that car. Because obviously, when you buy a car, largely you have a car to sell first before you can afford the money to buy a next one, very big part of our business in the UK. We want to do that in Germany as well. We are starting to think about what the next country is. I think we're growing very nicely. We had challenges with lack of new car supply for the new car business has been very hard since 2020, 2021, but that's easing off very quickly. Now, production is right back up there. And the challenge that the manufacturers have now is the consumer demand is not what it is, particularly on electric where they do struggle to get attention. I think some of the traditional car manufacturers think if they launch an electric car, that's news in itself or USP, it's not anymore. Had they done it 6 years ago, it would have been a big USP, but the market is very crowded already for electric.

Lei Xing:
Tu, are you aware of anything similar in Australia? 

Tu Le:
What's that? 

Lei Xing:
Something similar to a carwow? Because Australia is a huge potential for China EVs.

James Hind:
Yeah, exactly, Australia is where a lot of manufacturers are launching early, Chinese car manufacturers and you had Chery there for quite a while for example.

Tu Le:
SAIC commercial vehicles, commercial side they've been there a long time and I think that's leading the way. Tesla was the only game in town, pretty much for quite a while. And then SAIC with LDV right, Lei? And BYD just launched the ATTO 3. They had a problem with the license because they didn't have that hook for the safety seat in the back for the child seat. They finally got that fixed. They partnered with a company called EV Direct. They were kind of a startup that didn't have the capital necessary to really launch BYD the way it should have been in the Australian market. Because at least the U still build some of its own vehicles, right? So in Australia that's completely gone and they're completely reliant on imports. And so we're going to see because the other thing about Australia, they didn't really incentivize the consumers to buy. So it will be interesting to see because it's also a right hand market, obviously. So I think there could be like a lot of synergies between what's going on in UK, Singapore and Australia.

James Hind:
And you mentioned earlier the Korean manufacturers and how they're doing in Europe.

Tu Le:
Yeah sorry, let's talk about that because they suck in China. For a lot of reasons. Some of them have nothing to do with the actual products themselves, because they're doing really well in the United States. So how's the EV6? How's the…

Lei Xing:
IONIQ 5.

James Hind:
It's interesting. So broadly, they're doing very well. I think a couple of things helping. One is you could get hold of a Korean car during 2020, 2021, even 2022, whereas you'd have been wasting 9 months for a Volkswagen ID.3, 12 months sometimes for an Audi or Mercedes electric. So they had a unique kind of supply advantage during that period. They have, I think the other thing they've done is they've been bold with that design. The Hyundai IONIQ, the EV6, the bold designs, they don't look like anything else. And that appeals to a big segment of consumers as well. The price is broadly competitive as well, the quality is good, and they got the features that people want. So I think they are doing well. And they are very well known brands they've been around for 15, 20 years at least in the UK, trusted name. The other one is Genesis which has launched recently in the UK I think, they tried to launch as an online only brand didn't go down particularly well. So I think they're now moving towards, again, opening up dealers to help.

Tu Le:
Do you see Genesis ultimately taking and this is in the UK, sales from the BMWs and the Mercedes and how does Lexus do in the UK? Not so well or?

James Hind:
Very poorly. So I think Lexus across Europe has not done well and it's huge in America but Lexus in general is very similar, a premium version of an existing brand. I think that's a very tough market to crack. I think that the people who got the best chance at the moment I see for that more premium segment is NIO.

Tu Le:
Really!

James Hind:
Again, versus some of the Audi, BMW, Mercedes range, it's competitive, it looks good, the brand’s cool.

Tu Le:
What we're seeing in China is that Audi and BMW are shooting themselves in the foot because they're using existing ICE platforms to build an electric vehicle, number one. And number two, they're over pricing it. I think they've overestimated the brand equity that they had. And now they're kind of scrambling a bit. And Audi is kind of sort of the odd man out of the ABB or Audi, BMW and Mercedes, because Lei knows this for the longest time, in 2010, when you went to China, I don't know if you've been to China James or when's the last time you went, but the Audis were government official cars like every A6, there is like this Chinese, older Chinese guy smoking a cigarette, getting in and out of the backseat

Lei Xing:
Well, as close as 2019, if you went to the Auto Shanghai just look at the billboards more often than not, they were probably these foreign brands. Now, it’s totally different.

Tu Le:
James, you got to go to China man, you'd be like…

James Hind:
I’d be at Shanghai Auto show had it not been a baby coming.

Tu Le:
And this is the thing because I don't know where you fall on this, love to hear your thoughts, James. Because I feel the legacies and more or less at the staff level, right? Not the leadership, I think they think they have a lot more time than they do from EV transition, number one and from China EV Inc. to really, at least in Europe, because the tariff is too low, it's 10%. You can send trains, and I’m not talking to UK, I’m talking in Europe, but even then you can send them through Belgium, right, on a boat. And so I think the especially because I know you had mentioned that there are a lot of products already in the EV space in the UK but to fill all those market segments at the lower price points, I don't know if the European legacies can do that in the next couple of years, and so that those voids are going to be filled by the Chinese brands, I think. So what do you agree or any counter point on that?

James Hind:
I agree. I think a lot of them are underestimating the impacts that China EV will have on the European sales market. And you speak with some who are from the more say, premium German car manufacturers, and you spoke to them 4 years ago about Tesla and they were saying the build quality is not good, it’s no good, it’s not going to go anywhere, it's niche and obviously it’s changed, they've been proven wrong on that.

Tu Le:
They're right, the build quality is terrible, but customers don't care for some reason about that. So. 

Lei Xing:
Exactly. And then I think now you speak to some of them about China EV and they say, but they are cheaper cars, they are volume cars. But I think they miss underestimate a bit about. We see it very clear. The consumer is not very loyal to the car manufacturer, it’s the brutal reality. People buy different brands. They don't stick with the same brand very much. And I think with electric, I think that increases even more. I think electric becomes a little bit more of a kind of homogeneous product. If you have an electric engine with an Apple CarPlay, Android Auto system, that’s kind of, you got the brand on the outside and the look and feel of it inside and out. But it’s less of a selling point than it used to be when you had, I really like the Mercedes system, for example, or I really like the BMW engines or whatever. I think it become, it’s easier for consumers to switch brand, and I think that China EV is largely focused in Europe, but the kind of more volume end competing against the likes of the French brands from Stellantis, etc. But I do think they'll move up quite nicely. You see that with Kia. The Kia EV6 is not a volume model. It's a more premium model and it is stealing market share from the German car manufacturers. So it’s only a matter of time in my opinion.

Tu Le:
And also there haven't been that many Chinese premium EV brands aside from NIO, but BYD is launching one. And Li Auto will eventually make it to Europe. And if you haven't heard of it yet, James, there's a brand called BeyonCa. So this is one of the ones they're going to launch in China only first in 2024. He's an ex-Volkswagen Group executive, he's hired Merc designers, he's hired Porsche designers.

James Hind:
I did see that they are quite different as well, isn’t it?

Tu Le:
Yes. So their first product is going against the Taycan. So I love the Taycan, it's a terrible EV because the range is terrible, blah, blah, blah. But I love the look of the car, but it's just not a great EV and so it'll be interesting to see because we are starting to see ABB get weakened in China substantially, pretty substantially, and Volkswagen Group has a stable of brands. So it's much more complicated for them than a Mercedes who effectively has smart. BMW has MINI. So managing two brands versus managing eight is going to be a lot cleaner. And Lei’s heard me talk about this ad nauseam. If they're not doing well in China, it's going to weaken their ability to really dominate in the other markets. So let me ask you this, James, and couple more questions, we'll wrap it up and get you out of here. Have you driven any of the Chinese vehicles yet?

James Hind:
Very few, because they are barely on the ground. So I think Philip in Germany who runs Germany for carwow, he's been in the BYD I think the ATTO 3, I think not Chinese, Lucid as well, because they're on a NIO as well. He's had as well because they were on the ground in Germany. There's probably, I'm talking literally five BYDs in the whole of the UK at the moment and its press cars. NIO, I think there’s almost none. So again, they are coming.

Tu Le:
Just tell them who you are, James. Hey BYD, I’m James Hind, CEO of…

James Hind:
But I think, again, we've got some of them in for videos as well, ORA they launched the Funky Cat here, odd name, which puts people off in itself a little bit, I think. But it's a good car. It's an interesting thing, not as competitively priced to some of the other ones launching. Again, don't forget. The one that's been the huge success already is MG, Europe's fastest growing brand, I think they got the majority, the biggest, by long way of Chinese OEM in Europe, very popular, very well priced. Build quality is brilliant. And we actually made our car of the year last year. It won the overall category, very impressive model.

Tu Le:
Yeah, this is my last question because I've never been to the UK, I want to go maybe soon and you James, as a British. The question I wanted to ask is about the British auto industry.

James Hind:
There's not much left.

Lei Xing:
Right. What has transpired. As a British national, what are your thoughts on what could have been different or why things happened the way they did? And I'm just wondering, interested to get your perspective and opinion.

Tu Le:
He just got super deep on you, James. I don't know what happened there. 

Lei Xing:
No no no, I just thought like, you know…

James Hind:
It’s very sad if you think of traditional British brands, Land Rover, Jaguar is not British anymore. And MINI.

Tu Le:
I’m glad MG is still, right? It's, although it's owned by Chinese, but it's still a British band and it's selling well, right? So. 

James Hind:
The new MG, SAIC MG, it doesn't, it never talks about the history as it never talks about the history of the brand whatsoever. From what I've heard, it doesn't want to, doesn't want any association with it. It wants a fresh start as a new brand and it's doing very well. But I think British brands barely exist within cars. The manufacturing in Britain is very low, almost nothing.

Tu Le:
Mostly the ultra-premium cars, right?

James Hind:
You have the Rolls Royces, etc., the Aston Martins, but in incredibly neat, Bentley and you have some obviously Jaguar Land Rover as well. But Jaguar Land Rover is so far behind on electric.

Tu Le:
Which is ironic because they did come out with the what was that one?

James Hind:
The I-PACE. The I-PACE came out 6 or 7 years ago and it's quite unique at the time. I think it may be even pre- Model X, it was the only premium electric 4x4. And unfortunately there's not even horizon to the next electric brand, amazing brand, amazing image, but unfortunately, quite slow on electric. And then production of electric batteries is virtually nonexistent as well in the UK.

Tu Le:
The only thing that I think the UK has, London being able to be an innovation center, right? Because London's innovation is much better than Berlin’s or anywhere else in Europe. So I think that needs to be emphasized from a technology and digital standpoint.

James Hind:
You just reminded me of, I think another sign of China EV and why it's going to be so big. So when you picture London, what would you picture on the roads?

Lei Xing:
The black taxis.

James Hind:
The black taxis and the red buses. Who makes, if you been to London recently, the black taxis, they are everywhere.

Tu Le:
Geely?

Jameds Hind:
Yeah exactly. 

Lei Xing:
Geelys and BYDs.

James Hind:
A lot of the red buses, BYD.

Tu Le:
Yeah, so but so we're talking about British brands and British heritage, as a Brit, James, what's your initial instinct on the Lotus Eletre? 

James Hind:
Going on order. I should get it in the summer. 

Tu Le:
Oh really! Oh wow! And this is where it's going to be interesting, because the reason it triggered my memory of the Lotus is because you said MG doesn't want to talk about its heritage. Lotus is known as a small engine, high displacement, mostly two-seater, sports car for the masses kind of thing. Now it's Chinese, now it's got a big SUV. It looks nice, too. I've sat in and I haven't driven it, but I've sat in it. And John Edwards, by the way, I will cut this out. So he got a sneak peek, because he's a Brit, I guess, whatever I don't know. My theory is this Lotus Eletre is, in no offense to you, but it's going to be like a mom car, like a hot Chinese mom car because Macans and Cayennes and G500s in China are all driven by, I’m pulling my broad brush out and we're cutting this up too, by the way. They're all driven by like mummies. If you go to like the international schools in China, in Beijing and Shanghai, there's going to be a line of them, and they're either Cayenne or Macans or G500s or whatever. And so it'll be interesting to see. And what do you think I want to hear your prediction? Do you think they'll lean into the racing heritage? Or how do you think they’ll position Lotus SUV in the UK specifically?

James Hind:
So I think as I said I’ve got one on order. I think it's a great car because it's not everyone’s taste, but I think it's an interesting looking SUV, looks a bit like the Lamborghini Urus. It's got, I remember I think I want to say 350 miles range so pretty good. Price point is about £85,000, that’s probably 100,000ish Euros. So you're really undercutting a Range Rover Sport or Range Rover, Mercedes equivalent, Audi equivalent, and it's fully electric as well. So I think it's going to do very well. I think the Lotus brand is seen as positive, it’s not associated with a electric 4x4 at all. And I think Lotus doesn't have the best history for build quality. But they'll get over that, the reviews, assuming the build quality is good, the reviews will prove it's a good car, etc. I think it'll do extremely well. I think it's an example of China EV not just being focused on volume, and they are focused at some of the more premium end of the market as well. And another example is Polestar 2, they only had, that's done very well. They’ve got Polestar 3 coming out now as well, good looking car, pure electric obviously as well and that's competing against the German manufacturers. It’s competing against Jaguar Land Rover as well. It's going to steal a lot of people from them and then the same with Volvo, Volvo is a fantastic example of where they got some great Geely technology and great support from Geely, but the brand has evolved in itself, still associated completely with Sweden. And they're doing very well on electric as well. I've got a XC40 electric Recharge. I’ve got an EX90 on order as well looking forward to that with the LiDAR technology is the first as well. They're doing very very well and they will take market share from the bigger guys.

Tu Le:
In the UK, do you think the consumer in the market for premium midsized SUV will look at Lotus, Polestar 3 and EX90 in the similar bucket? Because the reason I bring that up is because they're all Geely brands, right? And so it's a little weird from a company standpoint that they would, all three at the same time effectively launch premium SUVs in the 80,000-90,000 Euro price point.

James Hind:
You're right. The stats and the lines are pretty similar. The range is pretty similar. The technology is broadly similar, but I think it's a smart move because they've got slightly different brand appeal. Lotus is seen as obviously the slightly more sportier kind of racing heritage, that’ll appeal to some people, Volvo is known for safety, known for family. And that'll appeal to some people. And Polestar is seen as a bit different, a bit, you haven't heard of that, a bit unique, and that will appeal to some people as well. I think they are spreading their bets nicely with them.

Tu Le:
Let me open the room up. Did you have any questions or any comments for us? Because want to give you an opportunity to ask us any questions not that you're interviewing us. 

James Hind:
So the way I learned huge amounts about China EVs from you guys and looking at the stats as well, it seems China EVs largely sells in China full stop. There's a little bit of export, but in the grand scheme of things not a lot. How important do you think Europe, the rest of Asia, America, South America, etc., is to China OEMs?

Tu Le:
Go ahead, Lei, I’ll let you start.

Lei Xing:
Very important full stop. That will be the Tu answer, full stop.

James Hind:
But do they have to win in China before or is success worldwide predicated on China's success?

Tu Le:
I think entering Europe is kind of a pressure release valve because it's so competitive in China that a company like AIWAYS decided to come to Europe for several countries. They also launched in China, but they sell more vehicles combined in Europe than they do in China, we talk about China EV Inc., but I think it's very important for a handful of brands, like a NIO, like a BYD, Xpeng I thought they had ambitions to be more global, but a lot of the China EV Inc. that you've probably heard of, James, are having challenges blocking and tackling just building enough cars and being able to compete. And it's cutting their knees out because they're losing a lot of money in China. So they're not able to invest properly or significantly in the foreign markets. And so what we’ll likely see because to your point, right? The mass market with Southeast Asia, Latin America, they're going to probably dominate eventually, right? In Southeast Asia, they'll probably dethrone Japan, Japanese, because if you go to Thailand, you go to the Philippines, every truck you see, or every car you see is a Toyota or Honda, I think that's going to change. The premium is a fickle segment. And it takes a long time to build that brand and build that trust, because now it's not a 30,000-Euro car, it's a reflection of who I am. But they have nothing but time, to be quite frank. And as long as Europe is accessible, they'll win there. And still, it'll also push out their ambitions towards the United States, I think.

Lei Xing:
I think last year, if you look at the numbers, right? So 10% of the 7 million NEVs were exported roughly 700,000, 600,000 and majority of that were Tesla. So if we talk about exports, really two camps: one camp the strategically making China an export base. Let's say a Tesla, Polestar, Lotus Eletre is made in Wuhan. The Dacia Spring from Renault is made in China, sells huge in France. This is one camp. And the other camp are the China EV Inc., which is what Tu refers to as the pressure release, because they have the capacity and they want to be global and they have global ambitions. So it's natural that they have to have that capacity shift somewhere else. And with the current price war going on, right? So everything added. This year should see another huge year of exports, maybe a million units.

Tu Le:
A lot of the CEOs still want to be able to say I’ve been very successful outside of China. I think they are still searching for, some of them, right, are searching for that validation. I think NIO, NIO's challenge and Lei and I agree with this, is more operational. The cars look really good. I think you're going to shit your pants, James, when you sit in one, the fit and finish is really, really good. When you talk to the Germans, they always talk panel gaps and stuff like that. It's pretty good. And it's only going to get better. Where they need help is getting them out the door, cause the ET5 is should dominate the Model 3 in China and parts of the other rest of the world. But they're only building 5, 6,000 of them a month. For some reason. I'm interested to see like phase two, like these premium brands that are going to start to come out and what German legacy Inc. is going to do in Europe to fight back. Because do they speak out of both sides of their mouth? We want some protectionism because Tavares has already talked about it. But Volkswagen is also going to be shipping Chinese made cars into Germany. So they can't cut their nose off despite their face can they? And that will be the interesting thing to see because with China, there's always going to be some form of geopolitics that's underlying even if people don't get it right. So.

Lei Xing:
And then there's the CRMA right? That's been discussed.

Tu Le:
Are you hearing any rumors, James, of any Inflation Reduction Act for the UK?

James Hind:
I don’t think UK would do it. 

Tu Le:
Realy, okay.

James Hind:
Car manufacturers are very powerful in Germany obviously. It has a very big impact on the economy. They have a huge sway.

Tu Le:
Yeah, and your great battery hope BritishVolt blew up after, because I always wondered like 3 or 4 years ago when I heard BritishVolt was like whose IP are they using? Because do they have IP so it did not surprise me at all that they blew up. But, hey, James, awesome having you on, I learned a ton about the UK and German markets, just Europe in general and about carwow, huge fan now and advocate for carwow. So thanks again for joining us, I learned a ton.

James Hind:
Thank you very much, keep up the great work. I'm a huge fan of you guys. I learned a huge amount from you and I think again, we're just seeing the start of this China EV Inc. in Europe.

Tu Le: 
We will have to get you on again after you see more than a handful of months getting sold. And because the data will probably change accordingly as well.

James Hind:
It'll change very quickly. 

Tu Le:
So, all right. Cool.

Lei Xing:
Hi. This is your co-host Lei Xing. What strikes me the most in this conversation with James is the number of times he said, they haven't heard of the brand before. And he's obviously referring to many of the China EV Inc. that are flocking to Europe as we speak. It's pretty easy for us to talk about China EV Inc. on a weekly, if not daily basis. But there is much to be done in terms of brand awareness and understanding on the ground. That's where perhaps his carwow platform will play an important role. James also echoes our view that many of the European legacy brands are underestimating the impact the China EVs will have in their home continent. On the flip side, James’ candid perspectives on the psyche of the car buying process in Europe means these China EV Inc. lacking trust initially must have a well thought up plan to really make a dent on the market. As James pointed out, make sure they build the physical footprint where people can get access to the cars and service.

Tu Le:
Lei and I will be sharing more of our conversations with the men and women around the world, moving the EV, AV and mobility sectors forward as part of this China EVs & More MAX series. Some folks will be instantly recognizable, but some will just be people that are doing amazing things in the space that we think deserve to be highlighted. Don't worry though. Lei and I will continue to host our live weekly China EVs & More Twitter Spaces room. That summarizes that week's most important news coming out of the China EV, AV and mobility space for those that can't catch the live show. You can find the China EVs & More pod on all major platforms or wherever you normally get your podcasts. As EV adoption reaches its global tipping point, it'll be even more important to stay updated on everything that's happening here. Lei and I are confident that China EVs & More is the best resource to do that. Until next time, as always, thanks for listening!