Lei kicks off the podcast with how he randomly bumped into Frank Wu at the Jidu, now JiYue Experience Center in Beijing.
Tu believes that after seeing the features on their first vehicle, that if executed properly - could push the entire sector into the smartification phase of the EV transition.
Tu moves the conversation over to Zeekr’s price cut while Lei then talks about their recent subscription service.
Tu stops the podcast to congratulate BYD on building their 5 millionth NEV. Both Tu and Lei marvel at the speed at which they got to the last from 1 million to 5 million units.
Lei broadens out the discussion to talk about China recently hitting 20 million NEVs built in China and what a massive accomplishment that was.
Tu addresses the BYD haters by pointing to the fact that Toyota, widely considered one of the best in the biz, is using BYD tech for the China market. They wouldn’t be doing that if they thought BYD product were inferior.
Lei updates about some recent news about Huawei and Tu talks about a recent announcement by the Chinese govt effectively doubling down on hydrogen technology as a viable powertrain option and how till now, very few OEMs besides one or two Japanese OEMs seem to be committed to it.
Tu and Lei close out the podcast with an announcement about their latest MAX episode with Philipp Sayler von Amende, Co-founder & CEO of carwow Germany which will drop the week of IAA Mobility Munich.
Lei kicks off the podcast with how he randomly bumped into Frank Wu at the Jidu, now JiYue Experience Center in Beijing.
Tu believes that after seeing the features on their first vehicle, that if executed properly - could push the entire sector into the smartification phase of the EV transition.
Tu moves the conversation over to Zeekr’s price cut while Lei then talks about their recent subscription service.
Tu stops the podcast to congratulate BYD on building their 5 millionth NEV. Both Tu and Lei marvel at the speed at which they got to the last from 1 million to 5 million units.
Lei broadens out the discussion to talk about China recently hitting 20 million NEVs built in China and what a massive accomplishment that was.
Tu addresses the BYD haters by pointing to the fact that Toyota, widely considered one of the best in the biz, is using BYD tech for the China market. They wouldn’t be doing that if they thought BYD product were inferior.
Lei updates about some recent news about Huawei and Tu talks about a recent announcement by the Chinese govt effectively doubling down on hydrogen technology as a viable powertrain option and how till now, very few OEMs besides one or two Japanese OEMs seem to be committed to it.
Tu and Lei close out the podcast with an announcement about their latest MAX episode with Philipp Sayler von Amende, Co-founder & CEO of carwow Germany which will drop the week of IAA Mobility Munich.
CEM #128 Transcript
Recorded 8/11/23
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. For those that are new to the show, welcome! And to our loyal listeners, welcome back! We ask that you please help us get the word out about this podcast 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. Lei, can you please, after you catch your breath, introduce yourself.
Lei Xing:
Good evening from Beijing, trying to beat the Beijing traffic catching my…
Tu Le:
You'll lose every time.
Lei Xing:
Catching my breath Lei. Your co-host Lei Xing speaking, former chief editor of China Auto Review and this is episode #128. Before we begin, I want to share a little anecdote of what happened today, just a couple of hours ago. So I went to one of your Burger Friday groups…
Tu Le:
Oh nice!
Lei Xing:
Nice meal in Xinyuanli, and it wasn't far from Sanlitun. So one of the bucket list was to visit the JIDU Experience Center. So I went, was checking out the car (ROBO-01). And I sent a message in our chat group to Frank, so Frank Wu is the head of design of JIDU. And he was also our earlier MAX episode guest. And it so happened that he was right next door.
Tu Le:
How funny is that man? It's so funny. I thought you pre planned it.
Lei Xing:
No. No. It’s just, as fate would have it, right? So he’s like, wait for me, I'll come by, and then he showed me the ROBO-01. He showed me the RBOTANK, which is a piece of artwork that he helped design upstairs. So I got a VIP treatment man. We did our episode on JIDU. We've been talking about JIDU, and I finally understand what it is, what they're trying to do, and…
Tu Le:
I told you, man, you got to believe me, you got to believe me.
Lei Xing:
No, I believed you, but…
Tu Le:
I told you that stuff is next level, right? It's next level. What they are trying to do is going to raise the game, right?
Lei Xing:
That is understatement of what they're trying to do. And I'll share some videos.
Tu Le:
We're not talking just the evolution of some features. We're talking, it is going to be really, really tough to execute perfectly and it's going to take, now, Frank is a professional industrial designer, user experience designer. He has a large team at JIDU. And so I'm not that concerned about the design and user experience. I'm wondering if the software can execute on their design intent. And so that's what I'm anxious about, but their partner is Baidu, which is an OG technology company in China, one of the OG technology companies in China. It's not a startup, it's definitely not a legacy company. Because if Geely was leading the way on the software side, I would be pretty skeptical, but they're not.
Lei Xing:
Yeah.
Tu Le:
It is the coolest thing to have Frank show you…
Lei Xing:
I mean, you can't even plan that, but it's just like, oh my god, I was like what the heck. We just bumped into each other, and I was like I’m not going to make a trip down to Shanghai this time, I was like, but you're up here. So we met, like, what the heck!
Tu Le:
And for those that are wondering Frank Wu is the Chinese American who studied in Detroit at the College of Creative Studies, super smart guy and worked at General Motors for 7 years in Warren and Detroit and moved back, designed for BAIC for a while, and then got this offer to be the head of design at this stealth startup. If you want to listen to more of his story, it’s a super, super interesting, compelling story that I'm very proud that he decided to allow us into his life. So we can have a discussion with him. Now we're all good friends, we are his biggest cheerleaders. He's a good dude, great designer. And please listen to his MAX episode. I think there's two parts…
Lei Xing:
There is two parts to it, because I mean he talks, he can talk. And he shared a lot of his personal and experiences as well as professional, personal journey and professional journey. So please do listen to that.
Tu Le:
You know why we're also his cheerleader? Because his story resonated with us, because we have similar stories, right Lei?
Lei Xing:
Yes. So I mean today was just one of those moments where it was cool, it was unexpected, it was next level. It was epic. I mean he described it as epic, and I totally agree. And this thing will launch September, October time frame.
Tu Le:
Well it's not up to them, right? It's not up to them.
Lei Xing:
I mean him showing you, showing me the exterior, showing me the voice recognition stuff, oh my goodness. Exterior voice recognition, holy moly….
Tu Le:
It’s like, and for the old school automotive folks, it's like having Henrik Fisker walk you around an Aston Martin that he designed and tell you the reasoning behind all of the decisions that he made. And is Frank Wu a Henrik Fisker? No, not yet, but if he can create this trajectory based off the ROBO-01, and they can execute well, again for the hardware and software integration, right? Because you saw it like, there's no buttons, there's no knobs. The reason I joke around about it's not up to them is because they're waiting on a manufacturing license. One of the things that Frank talked about is when you live in China, there's China speed, but Lei, when was this company formed? Because Frank in our podcast with him interview…
Lei Xing:
March 2021 I believe.
Tu Le:
Yeah, so he talked about JIDU speed, right? So he said that's even next level relative to China speed. And I've been long JIDU for a while just because the features are just going to be, again, if they can execute, they're going to be difference makers globally. So.
Lei Xing:
Yeah, it's nothing like what's out there right now, whatever the features, exterior, interior, the cockpit, and the screen. Let's back on topic. So one thing I was telling Frank was price reduction of the ZEEKR 001 this morning. And I was like, man, you got internal competition. I think ZEEKR is thinking that you're launching this JIDU ROBO-01, and we got to cut prices because we know you're going to launch a pretty damn nice model. I was joking with him.
Tu Le:
So JIDU is actually ready to go with production. I don't think it's them delaying or being delayed because of any internal issues. When I spoke with Frank in April, so a little bit more background. I got to visit JIDU headquarters.
Lei Xing:
Robobase.
Tu Le:
Yeah the Robobase. That's right. And so if you want to talk about Lei’s experience of walking through, with the vehicle, Frank took out a couple hours of his day to walk me through the car and the headquarters. And so it was quite a treat, but the Chinese government is limiting additional manufacturing licenses. And that's one of the hiccups. That's the major hiccup anyways for JIDU not being able to get their vehicles on the road. I think it might not start delivering, Lei, until Q1 of ‘24.
Lei Xing:
So also, he was telling me that he actually drove the JIDU ROBO-01 yesterday to the Shanghai Airport for his trip current trip in Beijing. And that has a more updated kind of the capabilities than the one that was being shown in the showroom in the Experience Center. So he was telling me all that, you know this is much better the one I drove yesterday. And anyways, awesome afternoon. So the ZEEKR 001, really, the price reduction is another, I think, reflection of, you know we saw the July numbers. There was a dip month on month. So that was interesting. But the share of NEVs is going up. It was 33% CAAM’s numbers. Remember I think the caveat we need to talk about is last year when the purchase tax half off for ICEs kicked in, that propped up ICE vehicle sales. So this year, July year on year growth is impacted indirectly by a higher base. So that's something we need to point out.
Tu Le:
ZEEKR is pulling tricks out of the Tesla bag, because the 001 has been in the market for almost 2 years or over 2 years now, right?
Lei Xing:
The price reduction is valid until the end of the year. That's another thing I think that was interesting, because usually these price reduction are limited, one month, 30 days. I've been getting calls the last few days from various brands. I don't know how they got my number, but I signed up for that HyperGT thing, RMB99 for 3 days. So I'm sure they have my number and I'm probably going to get a call.
Tu Le:
Yao mai che ma? Yao mai che ma (are you going to buy a car?)
Lei Xing:
No. No. I mean, and also ZEEKR came out with that subscription model, right? So they're pulling all of these things out of the bag, which you would never expect from them. This subscription model.
Tu Le:
So the ZEEKR 001 for those that aren't familiar is like a sports coupe, and it's a hatchback. And it is violently fast and quick. It's not small and it's not nimble. It's been in the market for a while. I had one for a few hours in Beijing, picked up Nori. We drove around for a little bit. That was fun, but it's a big coupe, but it's older. And it initially had some challenges because they had used an older Qualcomm chip that was creating latency issues with the infotainment system. So they upgraded everyone's ship for free, right? Remember that, Lei? So that we had talked about it in the past podcast, but the ZEEKR 001 has been in the market, largely unchanged for the better part of two years. And so that is good indication that sales will dip on any product longer in the market longer than 12 to 14 months, right?
Lei Xing:
I that's I was pointing to, I was sensing this pessimism a little bit, pressure, I think pressure on the market for ZEEKR, which has a target to sell 140,000 vehicles this year.
Tu Le:
If you think about it, Lei, with the renewed momentum that NIO has, there had to be brands that were losing momentum. So maybe part of that loss of momentum from ZEEKR is due to the attention and increase sales, incremental sales that NIO’s getting the last month or so.
Lei Xing:
Yeah I mean, RMB300,000 range. And then it's sort of like you play offense to defend or you play defense to play offense. How do you look at it, right? And that's what ZEEKR is doing, which kind of leads into our topic, major topic today is BYD and Li Auto, and BYD and Li Auto I don't know about you, but these are the two brands that there's no stopping…
Tu Le:
Hold on Lei. Let's just do this. Gong xi (congratulate) BYD on 5 million. Congratulations BYD on 5 million. Huge, huge milestone. Please continue.
Lei Xing:
Huge, not in terms of the number itself. But how quickly they got there. 27 months ago, it was 1 million. So in 27 months, they added another 4 million. That's how significant it was. And another perspective, the 20 millionth NEV produced in China just rolled off a month ago, which means out of those 20 million close to quarter is from BYD.
Tu Le:
Let's just say 25%. Cha bu duo (almost), right?
Lei Xing:
Yeah. So that's what we're looking at and seeing Chuanfu choke three times, three times. A lot of people were shedding some tears when they were watching this, including yours, yours truly.
Tu Le:
Maybe all that money in his pocket was making him comfortable.
Lei Xing:
The viral thing was not the 5 million. The viral thing was the video that they put out of all the Chinese brands and that that slogan of “being together” is Chinese brand. That is like, oh man, that I mean you saw like Li Bin, He Xiaopeng, Li Xiang retweeted the video, right? And he put up that slide of all the brands and or automakers that are potentially global, including the State-Owned automaker groups, which was interesting, who do you include and who do you not include? So.
Tu Le:
Cause the ones that you don't include will feel slighted.
Lei Xing:
I mean Li Auto, Xpeng and NIO, that’s it, that's the three EV startups.
Tu Le:
I have to take credit for that Lei, I'm sorry, I got to pat myself on the back. I came up with the China EV Inc., at least I didn't hear anyone else say that. That's exactly what that is. It's a group. It's not just BYD, it's a group of consortium of EV companies that are launching onto the world, because NETA’s in Indonesia right now. So there is a lot going on, not just in Europe, but in Southeast Asia. And there was an article that said that China EV Inc. or China Auto Inc. with a lot of help from China EV Inc. is going to hit 5 million units of export vehicles this year globally. So that's a massive number. Please continue, sorry.
Lei Xing:
And it's also difficult to fathom they're going to get to the 10 millionth probably in less than 2 years at the current rate, because they wanted to do 3 million this year, right? So.
Tu Le:
So let’s take a step back and kind of reflect on the significance of this, because it's not just that they had enough demand in 27 months to sell 4 million units. It's the fact that during a pandemic, a lockdown, they were able to build 4 million units during this challenging time. So not only do they have attractive products, they have efficient operations. When we talk about BYD, efficient operations includes chip fabs and battery manufacturing ok, so that's why I want to really signify or call out how significant this is. Because 5 million at the end of the day is, is less than what a Volkswagen, a GM sells in one year. But with everything else in the background, especially really quickly Lei, when I landed in 2009, got into a BYD, I was like this is trash. And so to see the improvement and then see it reflected in sales is a huge thing that I don't know if western media is catching. So.
Lei Xing:
Yeah, the other part I pointed out, you mentioned 2009, in fact 2009 and 2010, China's top selling model, Chinese model was, in fact, a BYD, it was the F3 sedan. But the thing is one of the charts that Wang Chuanfu showed in the ceremony was how stagnant they were in terms of sales for one full decade. 2009, 2010, all the way until right before the pandemic in 2019. Their annual sales were stuck at around 400,000 to 500,000 units.
Tu Le:
I would argue that most, or, I won't say most, the lion’s portion of that sale was to fleet.
Lei Xing:
Yeah so one of the reasons that he choked up was 2019, there's a lot of voices or internally, he was like, I almost gave up, meaning that the PHEV right? So that's their kind of the cream of the crop technology. And considering at the beginning of the pandemic, they moved rapidly into a mask production, in hindsight, it was a crazy thing that happened and kind of, the momentum took off for some reason.
Tu Le:
And wasn't it within 30 or 60 days, they became the number one mass manufacturer in the world?
Lei Xing:
Yeah they had a production line of masks going. And the other chart that he showed was every year the amount of R&D they put into, no matter the profitability, no matter the revenues…
Tu Le:
For those haters out there on BYD, number one, if you think BYD still has marginal technology, technology is not world class, think about Toyota. Do you think Toyota is a well run company? Do you think Toyota is an efficient company? It's the global leader in the automotive space full stop.
Lei Xing:
Check, check, check.
Tu Le:
Who is Toyota relying on in the China market right now? BYD. So to BYD haters, you can't have it both ways, you cannot have it both ways. Last year, Tesla stans called out BYD because we said NEVs sold more than Tesla. You could stand behind that in 2022. You can't do that in 2023, because they'll outsell Tesla this year on EVs alone. Okay?
Lei Xing:
That's right. And speaking of hater, I'm going to play a hater a little bit. So there is always a but with any good news with any milestone that but is BYD is not without problems. If you look at, the customer complaints that are, there are still quality issues. This is the thing that they have to carry with them. And that's why I say you know, whenever you are at the top, whenever you're, it's four brands, there's multiple models launching. You're going to become a, probably going into the world's top 10 automaker pretty soon. Issues are going to come up, always have that sense of urgency of doing things the right way. So there was actually some negative take on that “being together” for the Chinese brands. A lot of different voices in the industry. Was it cheesy? Was it inclusive? There were some different voices.
Tu Le:
I'll point out one of, and you can dispute this or not, Lei, is trying to re-brand BYD in the United States to Ride Co. I think it's Ride Co. So for those that are wondering what I’m talking about, if you Google Ride Co. or you go to Rideco.com or something like that, BYD is, I don't know if it's a creative agency, a communications agency, crappy one anyways, that BYD hired an American one that said they needed to re brand in the U.S. I don't know if they're really, really leaning into that, or if they're just kind of throwing out trial balloons, but just be BYD in the U.S. So BYD is already an American company. I posted this in my newsletter that BYD has manufactured, I want to say, over 500 electric buses in Lancaster, CA, mostly sold in North America and the U.S., California the lion’s share of that, but this was on the occasion of Proterra going bankrupt. So we still have an American electric bus company. It's just called BYD.
Lei Xing:
I was joking with the Burger buddies today that BYD is all over America except America. Although they are in America, and they are an American company already for many years.
Tu Le:
And it's unfortunate that these Chinese EV Inc., the China EV Inc. is coming to the United States and they're going to manufacture in North America. It's unfortunate that they're likely going to manufacture either in Canada or Mexico.
Lei Xing:
Mexico most likely.
Tu Le:
Because the reason we say that is because BYD in particular, has mass market vehicles. And so in order to keep margins in Mexico, Latin America, South America, as markets that are perfect for BYD. BYD is already exporting to Brazil, I want to say, have the number one EV product in Brazil. So they're already successful in many parts of Latin America. It would just make a ton of sense for them to manufacture, but that could be a missed opportunity for the United States. Okay? We've talked about BYD can you talk a little bit more about Li Auto? Because you had mentioned Li Auto as well.
Lei Xing:
So Li Auto they had their earnings call, crushed it, record revenues, record profit, I think third consecutive quarter of profit, record free cash flow, record deliveries, first half more than all of last year. They're actually, Li Xiang mentioned that their original sales target was 360,000, and then they moved it down to 300,000. Now they're saying in the earnings call that they expect roughly 10%-20% higher than that 300,000. So you can do the math, right? And then the biggest gauntlet, they threw it down in the earnings call, was they're going to try to beat BBA next year.
Tu Le:
Bold statement.
Lei Xing:
So BBA does about 700,000 units, because they did like 350,000 in the first half of this year.
Tu Le:
For everyone that's wondering. That means the X5, the X3, BMW is large sellers in China. This is their bread and butter.
Lei Xing:
GLC, GLE.
Tu Le:
And we should remind everyone that the Germans all produce locally. So there's no disadvantage on price or anything like that. These are Chinese built cars or vehicles. And so if they're not only competing against the ICE BBA, BBA being Benz, Beamer and Audi, or ABB, you can say it either way. But the Chinese consumer has really turned the page on ICE vehicles. I think the X5, X3, the GLC, GLE, they're just not selling well in the China market, because Chinese consumers just buying as many Li L7s, L8s, and L9s that it can’t. So.
Lei Xing:
And the other thing I thought was interesting. One of the questions was on, there was some parallel export going on with the Li Autos. And the statement from the senior management was pretty blunt, which was basically we are going to stick to the Chinese market, we have no plans to export, at least not officially, but because they got to address these demand, right? And if they expect 700,000 units, they're actually, the reason that they're saying that they're only going to get 100,000 quarter is because of still some supply constraint, which they think will get better in Q4, where they'll get to 40,000 a month. And then next year, I mean it's relentless. One BEV model, no, three BEV models, no.
Tu Le:
One MPV. One MPV.
Lei Xing:
Yeah the MPV, the MEGA, right? Then plus one, and I think the L6, then two or three other BEV models. They are all coming in the next year or so, 12 months, 18 months. I think that the math is simple. If they can get to 60,000 units a year, they're there. And 60,000 units, basically 6,000 units a month, and six models each doing 10,000. It sounds pretty easy.
Tu Le:
They don't need to go abroad yet, because the share price has not never been higher. So I think originally, most of the China EV Inc. that were looking to go abroad, wanted to build that share price, wanted to build that market cap, but it's a little bit backfiring for most of them, because they created too much complication, too short of a time during a pandemic, during a price war. And so where Li Auto has to think about where which province should I deliver to in China? A BYD has to think about how many am I going to allocate the Brazil? How many am I going to allocate to Thailand? How many am I going to allocate to Israel? This increases the complexity X fold. Okay. So a NIO has a similar problem or a challenge, not as complicated, because they're not in 55 countries, but now that demand is a little bit higher in China, how many they're going to allocate to Europe in order to keep people interested in their vehicles there? These are really, really tough decisions that Li Bin and his ops team need to make, right?
Lei Xing:
And Li Xiang, I mean he is becoming a KOL now not only in the auto industry, but in the broader business community, because he now is on Dedao.
Tu Le:
He’s our competitor?
Lei Xing:
Yeah!. He's on that dedao, dedao, which was founded by the guy who would became the owner of the 5 millionth, BYD’s 5 millionth, the N7, Luo Zhenyu, which is he has this every new year's eve, he has this very viral. What do you call it, the speech? And Li Xiang is on that app and he's starting this lesson about product, about management. And I thought one of the things he mentioned that was very interesting was when he said at Li Auto, we produce two different types of products. We produce a product for consumers to buy, and we produce a processes for our employees. I mean among all these CEOs and founders, he is exceptionally, and he talks often about this matrix organization setup, and how they can move faster and be more efficient. And that shows in the earnings, right, in the finance reports. He's almost like becoming a management guru.
Tu Le:
Now. I think upon reflection in 10, 15, 20 years, there's going to be a handful of them that they'll be HBR, Harvard Business case studies written about. So I think Wang Chuanfu is going to be one of them for sure.
Lei Xing:
One's already written on NIO, right?
Tu Le:
What else going on? Man? What else you want to talk about?
Lei Xing:
No, just recently, just this evening. So the Ford Mach-E got absorbed into Chang’an Ford, right? And they launched a refreshed Mach-E just today.
Tu Le:
Take a step back to remind folks what happened, they separated. So you remind folks what Ford did when they thought that their electric vehicle division was going to be very promising.
Lei Xing:
Yeah the “dianma” the Mach-E based in, I guess it's a company based in Nanjing, but that division is now, kind of the sales and marketing, operations is being absorbed into the JV, the Chang’an Ford JV, and they are going to put that model into the Chang’an Ford JV channel, which has hundreds of dealers. Whereas before, part of the reason that Mach-E wasn't selling, one, not competitive enough, and second, they had these 30 total showrooms in 26 cities. That's not going to cut it. Just the exposure wasn't there? Product competitiveness wasn't there. That's a little bit of history.
Tu Le:
It's important to know, and even veteran companies that have been in China doing business for years and years and years. This should be a reminder, everyone and every company that either does business in China or wants to do business in China. If you're not all in from an investment, from a hiring, from an expertise standpoint, even language, you're not going to win, you're not going to get any share. And I'm talking across sectors. 25 city, 26 retail centers and 25, that's nothing, it’s nothing for a company that wants to sell thousands of these vehicles. Jumping off my soapbox, Lei.
Lei Xing:
Yeah, the Mach-E, I think the first half sales, take a guess, how many they sold? The first half?
Tu Le:
I saw that number, but I don't know. So it just wasn't worth remembering.
Lei Xing:
It's embarrassingly low, but enough with the dunking, Chang’an Ford is forming a sort of another joint venture entity with Chang’an to kind of sell Chang’an branded NEVs and Ford branded NEVs. I just read this in one of the chat groups.
Tu Le:
“yiqi?” Like, together?
Lei Xing:
Yeah it's a weird setup where the Chang’an Ford JV has 60% of this new entity and the Chang’an partner has 40%. This just came out like this, I don't know.
Tu Le:
They will seel the Mach-E alongside the AVATR?
Lei Xing:
I don't know. It's something that just came up so we have to look into it, but latest news on China, but…
Tu Le:
I did not hear that. But currently, Ford is going to be launching the Ranger. They're going to be launching, is it the Maverick or the Ranger?
Lei Xing:
Ranger and the Bronco, locally produced.
Tu Le:
So they're still on the ICE train when it comes to their new products. But outside of those two new products, there's not much going on at Ford. They're struggling with the Mach-E as Lei had mentioned. And it doesn't help that Chang’an decided to partner with Huawei and Alibaba, was it? To form AVATR, which is…
Lei Xing:
CATL.
Tu Le:
CATL, sorry, with CATL and Huawei to form an EV brand, which we've spoke about in the past called AVATR, which one of their products basically directly competes with a Mach-E. And so.
Lei Xing:
So speaking of Huawei, a couple of news from Huawei. One is they just denied rumors that they were going to set up a kind of a BU in Chongqing. And second is that new LUXEED with Chery, supposedly using the first HarmonyOS 4.0 they announced a couple of days ago, like these things just continue just to emerge and like every other day is like, oh there's some new brand. And Huawei is also, it's becoming more murky and cloudy whether they are in OEM or not. They say they are not, but they're playing these different cards that make them a formidable player. Although AITO is not doing well.
Tu Le:
The other thing too, is if we're talking about outside of China, we have to look at Foxconn. We have to look at Magna Steyr. Both companies because I've gotten pushed back, a lot of push back saying they don't want to actually be a car manufacturer themselves or build a brand themselves. Of course they do. And this is where Huawei, they might not be the owner quote unquote of these brands, but you better believe they are making all the strategic decisions. Foxconn and Magna Steyr want to compete with the traditional OEMs. Let me assure you that whether they do or not is another question. But anyways, I digress. Yeah, let's do this Lei, because it's 10:19, we will open the room up for any questions. So if you have any questions, please raise your hand. And I'm going to thank Abe for joining us, because he looked like he had a couple of other choices that he was thinking about. But what else did we want to talk about while we wait for anyone that has any questions, Lei, let me see, let me check my newsletter.
Lei Xing:
Whatever you want to share from your newsletter. But things just continue to be fast evolving. I think in China me being here, like you think me being here, I can be on top of things. I can’t.
Tu Le:
Now you know how I feel, right? Because I would just get bombarded with stuff, and I just try to prioritize what I thought was real news versus fun news to chase down to see if it was real or not, cause you just hear a million things? And the one thing that I did want to also mention was China, the Chinese government is doubling down on hydrogen. I think that's worth noting because there are still a lot of analysts out there that are doubtful that hydrogen can become an alternate alternative to electric vehicles. And my feeling has always been if the Chinese government wants a technology, a certain technology to become a thing, they will put the RMB behind it to make it a thing. And they have wholeheartedly this week announced that they will make the market more attractive for hydrogen adoption. Current challenges are incomplete standard formulation. I read this limited application scenarios and hydrogen is currently treated in China as a hazmat material. And so they're going to massage all these things with the goal of, so by 2024, they're going to revise policies, and then by 2025, they have a goal of, I want to say, half a million units being sold that are hydrogen. So if you're wondering hydrogen is going to be a thing, it's going to be in thing in China, which means that there's a decent chance that there will be a thing in the rest of the world. So.
Lei Xing:
And the only company, let's say, or maybe the only foreign, major foreign company that's making a bet in China is in fact Toyota.
Tu Le:
Isn’t Nissan, though, too?
Lei Xing:
No, no. Mostly Toyota, I think they're pretty active. They are already supplying stack and systems, I think, to a local partner. So things like that.
Tu Le:
I believe Nissan and Toyota are both selling passenger vehicles in the United States. FCEVs anyway.
Lei Xing:
Honda.
Tu Le:
Maybe it's Honda. But I thought Nissan, too. I could be wrong.
Lei Xing:
So Clarity and Mirai. Quickly on the CPUC's approval for Waymo and Cruise. I think that was the big news out of the U.S. at least, but a similar approval is coming for Baidu and Pony to offer paid fully driverless rides in Yizhuang in Beijing. I've been talking to some Baidu people and they're just waiting on formality, basically. So that's a major development on the AV side.
Tu Le:
Obviously, U.S. news or global Tesla news is that CFO Zach Kirkhorn has left or will be leaving. And normally, I've written this in the newsletter, normally for controversial companies when a CFO leaves, that normally means that they know something we don't. But in this case, Zach has been at Tesla for 13 years, which is probably like being at a normal company for like 40 years. And he's been the CFO for 4 years. And Business Insider had written that he's accumulated $569 million of compensation. Maybe he's just done with working. You know, if…
Lei Xing:
I mean I like this guy, I mean he's, every time I've heard on some earnings calls, he just seems I mean from his statue, sounds like a nice guy, whereas Elon is, right, the more crazy or outspokenish. But people come and go, it's not going to kill the company. So.
Tu Le:
And we might as well say this. You and I will be in Munich for IAA.
Lei Xing:
I was going to talk about that. The chatter leading up.
Tu Le:
For those that are going to be there. Please get in touch with us. Maybe we can go find a pint, maybe you and I can sponsor a happy hour in Munich for our listeners. If anyone is in Europe, we did it in Detroit. Let's do it in Europe, man.
Lei Xing:
We already know one happy hour that we're going right, which is related to the podcast.
Tu Le:
Yeah, so that was the other thing…
Lei Xing:
Two, actually. Two.
Tu Le:
We had a great conversation with the carwow Germany general manager. And we will be posting that just prior to IAA so it's going to be an interesting discussion, we talked about the German market. We've talked about how it's evolved. Germans’ buying habits and how Tesla and the Chinese EV, China EV Inc. has affected that. And so it's a can't miss for the Europeans that are wondering about the the German legacy automakers and the German automotive market. So we'll hopefully have that out in the next 2 weeks. So stay tuned for that. You can talk about your other MAX episode guest.
Lei Xing:
Sure, so his name is Philipp Sayloer von Amende, I hope I pronounced his name, right?
Tu Le:
Yeah that's the carwow GM.
Lei Xing:
Yeah the carwow, I think it was, this episode was quite different from all of our previous MAX episode, because we cracked things up a little bit. It wasn't kind of a Q&A, it was just back and forth and really us talking like normal dudes, like talking, challenging each other, challenging him. I thought that's great, except my technical difficulties. I apologize for that. But the other upcoming MAX episode is with Wu Gansha, the founder and CEO of UISEE. Now, this is a company that is, I don't want to say under the radar, but his story is one of the most unique. He's a good friend of mine. He started the company in 2016. I said in the episode recording that he's one of the unsung heroes in the AV space, because he's already put these AVs into service in China. And he is one of the most knowledgeable person about the China AV and the global AV landscape. We'll have that come after Philipp, so we’ll have two MAX episodes coming up with great guests. So stay tuned. And you have to go, right?
Tu Le:
Yeah let's close it out. Hey, everyone apologies for the change in time this morning. There was a dance recital that someone had to be at, an important, a very important dance recital that someone had to be at, and…
Lei Xing:
Family duties.
Tu Le:
We will be back next week at 9 am so thanks for joining and listening. Good morning, good afternoon and good evening. We will talk with you all next week.
Lei Xing:
We'll talk to you next week. Thank you for joining. 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.