China EVs & More

Episode #142 - NIO & Changan Swap, Tu and Lei Go to LA for the Show (and more), China Loves EREVs

November 28, 2023 Tu Le & Lei Xing
Episode #142 - NIO & Changan Swap, Tu and Lei Go to LA for the Show (and more), China Loves EREVs
China EVs & More
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China EVs & More
Episode #142 - NIO & Changan Swap, Tu and Lei Go to LA for the Show (and more), China Loves EREVs
Nov 28, 2023
Tu Le & Lei Xing

This episode starts with Tu and Lei unpacking the significance of NIO partnering with SOE Changan to expand it's swapping services. 

After a significant deep-dive into the NIO swapping news, Tu then asks Lei about the announcement that Stellantis will use CATL to supply them batteries for the EU market. This in addition to the recent investment that Stellantis had made in Chinese EV company LeapMotor. 

The conversation transitions over to the US and Tu and Lei's thoughts on how the final IRA language is going to shake out and how it may affect the automakers that manufacture inside the US which is just about all of the non-Chinese legacy automakers.

Tu and Lei then get into their experience in LA, both going to Faraday Future's Investor Day and then to the LA Auto show and watching the Lucid Gravity unveil. 

The podcast closes out with Tu and Lei discussing the popularity of extended range electric vehicles (EREVs) 

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Show Notes Transcript Chapter Markers

This episode starts with Tu and Lei unpacking the significance of NIO partnering with SOE Changan to expand it's swapping services. 

After a significant deep-dive into the NIO swapping news, Tu then asks Lei about the announcement that Stellantis will use CATL to supply them batteries for the EU market. This in addition to the recent investment that Stellantis had made in Chinese EV company LeapMotor. 

The conversation transitions over to the US and Tu and Lei's thoughts on how the final IRA language is going to shake out and how it may affect the automakers that manufacture inside the US which is just about all of the non-Chinese legacy automakers.

Tu and Lei then get into their experience in LA, both going to Faraday Future's Investor Day and then to the LA Auto show and watching the Lucid Gravity unveil. 

The podcast closes out with Tu and Lei discussing the popularity of extended range electric vehicles (EREVs) 

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

Listen on: Apple Podcasts   Spotify

CEM #142 Transcript
Recorded 11/22/23

Tu Le:
Hi everyone and welcome to China EVs & More where my co-host Lei Xing and I will go over the week’s or the last couple of weeks worth of news coming out of the China EV, AV and mobility sectors. Well, let's change that to global, global 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 the 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. Happy Thanksgiving, Lei. It was good seeing you last week and I know we didn't do a podcast, so that's why we're doing this special Thanksgiving edition China EVs & More and I know that we've been a bit behind for our listeners about posting our last few podcast, so we will get that remedied in the next week, but can you please introduce yourself?

Lei Xing:
Yes! I guess a week and a half kind of, not the two full weeks, but welcome. This is your co-host Lei Xing, former chief editor of China Auto Review, and this is episode #142. Welcome to a special pre-Thanksgiving, pre-turkey, pre-American football, post-openAI sama drama.

Tu Le:
Lions baby. Lions baby.

Lei Xing:
Episode of China EVs & More. I was playing with the voice GPT that was quite interesting. We apologize for the brief hiatus last week due to the traveling to the LA Auto Show which we’ll touch upon a bit later as well as the Guangzhou Auto Show. But first off, the big news, is it the NIO’an or Chang’NIO partnership?

Tu Le:
NIO’an partnership.

Lei Xing:
NIO’an, Chang’NIO partnership. It was a matter of when, who and what, not if, so that happened.

Tu Le:
Also, we knew that it was more than likely going to be SOE, for the first domino I mean.

Lei Xing:
And possibly more, I mean, SOEs, coming. I mean, it's, I'll start off, I guess, it's kind of validation, right? It's validation, in some sense, vindication for NIO’s battery swapping business model. And especially after, I mean, the, China has been calling on this, I mean for years, right? Kind of a collaborative environment and effort. This is the first fruition coming to NIO’s. I said it's their massive asset and liability. And I think this is great for the industry, for China. For, first of all, this is working. Obviously NIO is, you know, because of that asset and liability. You have to, I tweeted that the key word would be utilization not only by yourself, but if it becomes a kind of a Tesla NACS type of, where people are jumping on board. So I think that's good, but there's a big but, and I want to stress this, that this does nothing to help kind of the funk that NIO is going through right now. It's validation. It's, but no, it's everything is future tense. If you read the fine print in that news release, right? Nothing was concrete. Nothing. There's no. We didn't announce a Chang’an model that will start swapping batteries soon. Nothing, I mean, right? So that's my few cents to begin with.

Tu Le:
Yeah, I think that you make some great points. Everything points to the future, the fine print still is not negotiated out. And I agree with you that it doesn't help them, but it does relieve pressure from a financial standpoint, because moving forward, as long as Chang’an has some robust sales with Shenlan and AVATR, we could see much higher utilization rates for those swapping stations. And I also want to indicate that because it's a state-owned enterprise, until we see a foreign automaker, aligned with NIO on the battery swapping side, this is a China only thing, it should be looked at as a China only thing for now, in my opinion.

Lei Xing:
Yeah in China within China. But I think you mentioned that Chang’an as a matter of fact, is a state-owned company is very important, not only state-owned, but one of three centrally administered state owned companies, which is leverage, I believe, in some ways, on how they came together. And was there a push behind the scenes? I don't know, but also Chang’an NIO, right? This is not the first time they set up something. AVATR, the previous I guess the former entity of AVATR in fact was the Chang’an NIO joint venture that was set up in 2017. So they know each other, and this perhaps has been talking for some time now, if not for years.

Tu Le:
They do know each other for those that aren't that familiar with Chang’an, their foreign JV partner is Ford. So in my brief history with Ford in Shanghai, Chang’an was a difficult partner to deal with. So as NIO gets into the details with the Chang’an, lets see who really drives that relationship because I want to point back to your statement Lei about not really helping them get out of that funk. The dire situation could be NIO doesn't reach the volumes in sales that it's forecasting or anticipating in the next 3, 4, 5 years. And Chang’an becomes a major user of the swapping stations. So that could create awkward situations and awkward moments. Now, remember that NIO has Alps and it has another brand that it's going to be launching. The other interesting thing about the NIO situation is with three brands, a mass market brand, a mid-market brand and then the NIO premium brand, how is the swapping station going to work? Because it's a premium experience. So I think that still needs to be workout. AVATR is a premium brand, but I think Shenlan is not as premium, so.

Lei Xing:
Yeah William, he kind of hinted in a response on the NIO app. I mean he posted the story himself. It's his byline right, on the NIO app. And he said that this would be kind of the next generation battery, swappable battery for the mass market, whereas the NIO brand users have a much more superior experience. So it looks like they are trying to kind of differentiate a bit.

Tu Le:
Saying and doing is really, really different, right? 

Lei Xing:
Yeah and obviously financially, I think Chang’an probably will be asked to help invest on this network.

Tu Le:
To me, the battery swapping stations aren't really the expense. It's the burden of how many batteries that need to be in the system and who's going to be. They said that they were going to create a joint venture to manage the battery inventory. So asset, so in technical accounting standards, the assets, but that is why this is a China for China only because if they, if NIO decides they want to swap outside of China, the cleanest would be if AVATR was also exported to Europe. But if they wanted a foreign automaker for the European market, they would still need a partner, a bank, or some financial services type of entity to manage those assets. So it's not as clean as we put battery swapping stations up all over Europe and we're good. Somebody, those batteries are those “assets” need to sit on somebody's balance sheet. So.

Lei Xing:
Yeah from a regulatory standpoint, there have been, mentioned in that press release bunch of standards that have been released, but there is still lacking a sort of a national standard for this to work. So for example, if a Deepal vehicle is going to be using a battery swap or a battery swapping station from NIO, then the kind of the specifications, the size, the chassis, the design must follow some standard, or it will be only an understanding between the two companies. So that needs to work, right?

Tu Le:
And, two things, I'd mentioned Shenlan ,so the English name is Deepal. So if we're thinking about this from a design and manufacturing standpoint, this really limits the Chang’an capabilities to a certain extent from a battery pack standpoint, okay? Because NIO has been doing this since virtually day one, the swapping infrastructure and the actual system, physical system, and software system is a part of their DNA whereas Chang’an needs to incorporate those tolerances into their current manufacturing process or engineering design process. So it's actually kind of limiting for them. But one thing that I did also want to mention is Shenlan or Deepal, when we were at the Shanghai Auto Show in April, they had a number of new vehicles that they showed off. Their booth was actually pretty big. So if people are wondering, how many vehicles does Shenlan have? So you tell me if I'm wrong, so there's Deepal or Shenlan, and then there's AVATR which Chang’an is really leaning into with Huawei and CATL. So I believe those are the only two EV brands that Chang’an has. But like you said, Chang’an is a major player. I think they are the 4th in sales. They had about 2.4, 2.3 million-unit sales last year, mostly ICE. The are a pretty significant player in China. So that's why I think you and I are optimistic about the utilization of the swapping stations in 3, 4, 5 years. But those details need to be hammered out in the next 10, 14 months in order for that success and utilization to happen in the 2, 3, 4, 5 years.

Lei Xing:
Yeah. So the question is, how long that'll take, right? How long until we see concrete confirmation that this specific vehicle model will be able to start doing battery swapping on NIO’s battery swap stations. Kind of like the 2024, 2025 in NACS announcements, right? That they will be starting to have those adapters or connectors integrated into the vehicles. We haven't seen that. And then I think NIO, on NIO’s part, I think they are confronted with the current backdrop. One, these companies coming out with 800V platforms and building out their own supercharging stations. The MEGA is 12 minutes, 500 km. I think ZEEKR 007 is 5 minutes 240 km. That's going to be a lot of pressure on consumers deciding the battery swapping versus super charging network, right?

Tu Le:
Not to mention Lei, in recent months this year specifically, EREVs and PHEVs have grown significantly in popularity in China.

Lei Xing:
Yeah, so that's number one. And then the second, if I was a consumer, if I can get a battery swappable Deepal, let's say, then that's cutting into, I don't know how to compare this, but why would I, these are the questions that NIO needs to confront: why, I can get a battery swappable Deepal at a cheaper price, and then NIO is coming out with their own Alps. So that needs to be, there is a bit of cannibalization.

Tu Le:
Potentially, there's cannibalization, but there's no, at least at the vehicle level, there's no partnership. So right now, we are seeing this as Chang’an licensing NIO’s swapping technology. So to your point, this is not like GM that owns Chevrolet, that owns Pontiac, that owns Cadillac, that has three vehicles on the same platform, that kind of cannibalized. And they trie to differentiate themselves in the market. But to your point Lei, this is going to be a Volkswagen FAW versus Volkswagen SAIC thing, right? And I know that Volkswagen, SAIC Volkswagen, and FAW-Volkswagen, they tried to differentiate, they are the same vehicles. And it was a distinction that didn't make a difference. And in the years, when the vehicle market was growing substantially, SAIC and FAW just reap the spoils of growth. But now that there's, the market has matured and sales are much more challenging, then we're getting into a bit of a debate between, okay, what do I do to make this vehicle different than the FAW version I'm SAIC and vice versa. So these are, again, the detailed conversations that need to be had. And that'll be super, super interesting. The last thing that I’ll say about this is that if I’m Chang’an and I already have existing engineering expertise and creating or engineering the battery pack. I'm going to want to inject some of my expertise or my opinion into that next gen battery swapping system. So let's see, there will be a power struggle, there always is when there's two big companies that come together. So the Chinese government, the guys that may be initiated this deal or partnership, they might have to intervene as well to be referees a little bit, I would think.

Lei Xing:
Yeah, so that's why I said this is for now it's more for show than for dough, we haven't seen dough yet.

Tu Le:
But it's a massive step. And if I am Ample in San Francisco, I'm pretty stoked, I'm pretty optimistic that I have a bright future because it's contagious like you said, Lei, earlier. 

Lei Xing:
Validation, vindication.

Tu Le:
That first domino falls, that second domino is much easier to fall now, that third domino is much easier to fall. And so I think, especially, and this is my side, I'd love your opinion. I was in all the years that I kind of worked with work, worked in China, I always heard Chang’an was one of the more difficult SOEs to deal with. So I don't know is that what you also heard like worse than FAW, worse than SAIC, so that's what I heard.

Lei Xing:
I'm not sure about that, but I mean the state-owned companies are all difficult to deal with. But Chang’an among I guess all the state-owned companies, I mean their independent, indigenous brands have done relatively well. I mean at least among the three centrally administered state owned companies, they are doing better.

Tu Le:
So I'm going to throw something controversial out there Lei. Does this put Ford in play for swapping in China?

Lei Xing:
I think Ford is open to anything, but given their focus on, I don't know, commercial vehicle side of it, I don't know, why not, put a battery swappable Ranger or something. I don't know. I'm just.

Tu Le:
the reason I brought up Ford specifically is because it's Chang’an’s joint venture partner. And you and I had the pleasure of speaking with Anthony Lo, and he seems pretty optimistic. So Anthony Lo is the global head of design for Ford Motor Company. And he seemed pretty optimistic about their future prospects in China.

Lei Xing:
Yeah, so quite friendly to talk to person.

Tu Le:
Yeah super nice guy. But the other thing I wanted to talk about now or anything else about the NIO swapping?

Lei Xing:
No, I mean it's a first domino, right? It's for show, it's happening, which I think NIO expected. But now its execution, bringing more people on board and making it work for balancing NIO's own interests versus the national interests, versus the third party interests. Right? That's…

Tu Le:
But let's be clear, NIO has every motivation and incentive to make this work, because now the burden of swapping station profitability is shared. What do you think of the Stellantis CATL deal outside of China?

Lei Xing:
Well, I tweeted, right? You saw my tweet, right?

Tu Le:
So let's, can you tell the audience what you tweeted?

Lei Xing:
I think we can come up with, someone responded, we can come up with a new word called affordapility, which you can’t spell without L, F, P right?

Tu Le:
I saw that, I laughed. 

Lei Xing:
No, I have one, only one thing to say. In order to beat the Chinese offensive, you have to be the Chinese offensive. That's again Tavares’ play following the LeapMotor investment. And I mean he's given up. He's like, ok let's do this.

Tu Le:
I teeted that this completes the 180° turn that's, in less than a year. Because now not only will Stellantis import Chinese made, Chinese brand vehicles into Europe, they will also put the cold shoulder to the European champion for batteries, Northvolt. One last thing Lei, this also really cracks the door open for CATL sourcing or supplying Stellantis brands, RAM, Dodge in the U.S. because it doesn't make sense for this to be a Europe only deal. Now, initially, it might be an only, Europe only deal, but you know Tavares, his reputation as a cost cutter. So you know he's looking at leveraging economies of scale and volume pricing for a global standpoint, not just a European standpoint.

Lei Xing:
Yeah, I think that the presser said this was specifically for the local supply of the European market, right? So that's understanding for now. And if I remember, were they trying to set up possibly a joint venture, joint investment, joint venture?

Tu Le:
I think they were doing something like Ford CATL in the U.S.

Lei Xing:
So remember this is, why a joint venture, if we go back to that ZEEKR day, remember, their batteries are supplied by a Geely CATL joint venture. Why? Because they got better pricing. So these minute details are all in play, right? And then it's LFP.

Tu Le:
We know that CATL dominates inside of China, but this was the first quarter, last quarter, or last month, was the first time that CATL is tied with the largest non-chinese, ex-China supplier of batteries LG. They both had about 14.5% share of the non-China market. So we can just assume that CATL is going to be the global leader inside and outside of China within the next 18 to 20 months. Is my guess. The U.S. needs to look at this because I'll segway over to Ford announcing yesterday that it's going to move forward with its partnership with CATL in Marshall, Michigan, I believe, for their battery cell factory. But they are going to reduce the size of the factory.

Lei Xing:
Investment, is that correct? And size?

Tu Le:
Yeah, so I forget what the investment number is, but the size of the battery factory initially was going to be 35 GWh, they are reducing that to 20. So if we're looking at a 65 kWh battery for a vehicle, which is pretty small, actually, then the annual volume would be around 300,000 units. So this is a pretty small factory. Now, in Europe, CATL is an even smaller factor. I think they have a 7 or 8 GWh factory. But I think there was no way Ford was going to walk away from this deal. And perhaps, this was the only palatable solution for the politicians that were against it and the local government that were against it. The one thing that I wanted to also bring up was you and I were at the LA Auto Show on, last Thursday and we spent the afternoon, you spent part of the afternoon in the Motor Trend theater or the theater where Motor Trend had done two panels. The first one was about the software defined vehicle, which I cringe at, because I don't want to call it the software defined vehicle. The second one was the Chinese EV companies or the Chinese companies coming to Mexico. There was a 18-minute documentary that was shown that's on Youtube, so go to the Motor Trend channel. It's really interesting and eye opening. I hadn’t realized that there were nine brands in, currently in Mexico, but I did know that BYD was considering building a factory there. And they had interviewed some Mexican politicians and economic development folks. And those guys were all saying that we've spoken with a number of Chinese brands about manufacturing in Mexico. So again, you may have known all this along, but were you surprised or what did you get out of that?

Lei Xing:
No, I think that was a great China factor, probably the only China factor at the LA Auto Show. And I think I learned something as well of what's happening in Mexico with respect to not only what China Auto Inc., including the EV Inc., are doing, but also trying to use Mexico as a stepping board into the U.S. market. And I think it's only one way, one path to the U.S. market, it’s not going to be the only path, as far as I know.

Tu Le:
Right now it’s the most logical. I'm going to say this right here, my moles are telling me that the commerce department is actually looking at increasing the tariff for Chinese imports.

Lei Xing:
From non NAFTA.

Tu Le:
Yeah. So currently for China, it's 25+2.5, so 27.5%. They're looking at pushing it higher. My guess would be, this would be the Trump specific Chinese tariff, right?

Lei Xing:
But you know the Polestar 4 is being imported from Korea in 2025, right?

Tu Le:
That is supposed to get sorted out by the end of December, before the end of December. So we have to separate some of this stuff, let's say, Chinese EVs from China to the United States. There's currently a 27, or not even EVs, Chinese vehicles, Chinese made vehicles because GM eats most of that. That's an ICE so it's not just EVs, it's Chinese vehicles or Chinese made vehicles. I'm confusing people. So that specific tariff is currently 27.5%. They're looking at pushing it higher, probably less than 50, but not much lower than 50. Let's just say that I don't know when that decision will happen, but let's assume that it will happen right around the same time as the language. The final language for the IRA is also introduced regarding those loopholes and carve out. Because there's two situations like there's the Polestar built in Korea and the batteries that LG and BYD will be building in Korea as well. So I think there are mixed feelings for the U.S. 3 about how to massage the language, because the U.S. 3 to me is Stellantis, Ford and GM but we have to remember Merc, BMW, Honda, Kia. They all built here, too. 

Lei Xing:
Japanese.

Tu Le:
Toyota. You're right, Toyota, Honda, every automaker that we talk about on a regular basis, every legacy automaker is going to be affected in a way by the final language of the Inflation Reduction Act, including Tesla. So.

Lei Xing:
So that was a good documentary that Motor Trend put out and met some other people. And I guess the only other I mean worth mentioning was the Lucid Gravity. But I'll just say the Lucid Gravity is nice. I think it would be good for the U.S. market, but I saw a bit of the interior, the frunking, whatever that concept it is. I mean having been spoiled by the China EV models, I think it's still probably a tenth of what you will see as far as material quality of what the China EV is offering right now. Space, built quality, it's nice and then you look at the Guangzhou Auto Show, right? It's mesmerizing.

Tu Le:
So you and I will have to do a yearend. And I'd say we do that in the next couple of weeks. And then let's say, our first episode in January or last episode of December, we do it. What to look forward to. So I won't talk too much about that right now, but you forgot to mention that we went to Investor Day at Faraday (Future).

Lei Xing:
Faraday Future. That was a great what, more than half a day, most of the day spent?

Tu Le:
Well, you know, you and I have personal ties with some of the folks at a Faraday. So.

Lei Xing:
Yeah and people that have been there for 7, 8 years. 

Tu Le:
They're alive, they're kicking. They're still very ambitious.

Lei Xing:
I think it was good to kind of witness the going ons of, it’s still, I mean it's coming up on 10 years, but it's still a startup. I mean how the Investor Day was done, how their PR communications team work, it's a pure startup, get down and dirty environment. That's my feeling.

Tu Le:
So for, let me summarize the FF 91. They've delivered eight of them to influencers, KOLs, which was their plan and for 2024, they're forecasting 1,000 unit sales, which means that it's 10% utilization at their factory in Hanford, which is kind of a hard pill to swallow. These vehicles start at $275,000 and they are real. I drove one, you drove one, we drove the same one, but massive amounts of power. It's a big car like large minivan, kind of big. And to your point, we met the head of design, we met the CFO, we met the CEO, Mathias, something.

Lei Xing:
Aydt. Mathias Aydt. 

Tu Le:
So, very ambitious. Unfortunately, their current market cap is like $15 or $20 million or something like that. So they need to raise a lot more capital.

Lei Xing:
Hence, the Eiddle East strategy day tomorrow. They're doing something on the sidelines of the Abu Dhabi, Formula 1 grand prix, I don't know, and then that 1,000 units there's a big qualifier. It's contingent on the financing, of course. There's always when you read these news, there's always that contingent of fine print, whatever target that they announced. But if I thought these are all passionate people, right? That the former Tesla design people, Mathias. 

Tu Le:
Sue, I forget her last name. But Sue,

Lei Xing:
Sue Neuhauser.

Tu Le:
So she was the interior designer for tTesla, and she developed the white vegan interior for Tesla. So they still have some pretty hard hitting employees. Arash was the head of design. I forget his last name, too. It's always cool to go into the design studio and kind of get to see, touch, feel, explanation of the hows, the whys. Now, the technology part, because one of the words that they're leaning into is lux tech. And I had told them to kind of drill down a little bit into what that means. So, let's see. Yeah.

Lei Xing:
I mean for Faraday Future, I mean they're on the public. I mean, they are probably 10X of what happened at openAI the last 4.5 days, 5 days, the drama that they've been going through, the number of COEs leaving and changing, finance problems, all those sort of things. And they're still here. They're delivering cars, that doesn't make us, criticize.

Tu Le:
There's Cruise too, right?

Lei Xing:
Yeah, I mean Cruise, that’s, oh my god. Disaster.

Tu Le:
That is a hot mess.

Lei Xing:
I couldn’t have…

Tu Le:
I've heard some things that I won't bring up in today's show, but if I hear or confirm the information, I'll bring it up in a future one. But there's a great Wall Street Journal article that kind of summarizes a little bit.

Lei Xing:
With that little video of the Origin hitting, well, that's all public now, hitting the wall, right?

Tu Le:
Yeah. Kyle Vogt stepping down, and then the other co-founder stepping down within 24, 36 hours of each other. And Mary getting online to reassure investors that they are still very, very committed to Cruise, although Cruise will have eaten up $2 billion in expenses this year, which is, I think, 16% of their profits.

Lei Xing:
So it's a bit shocking the turn of events given what we experienced a year ago. At that time, I think things were going on up, right? But…

Tu Le:
I actually think it's a stunning turn of events, because you and I were in China in the road in three or four robotaxis there. And there's no doubting that the Chinese streets, city streets are much more complicated than anything that the city of San Francisco could throw at a robotaxi.

Lei Xing:
Yeah, and WeRide recently got that paid driverless robotaxi permit in Beijing.

Tu Le:
And we should also note that there is the congressional letter to the U.S. government that wants to know they've subpoenaed. So it's a formal request for DeepRoute, for Baidu, for Pony, for AutoX, and their offices in Silicon Valley, to find out what's happening with the data that they're gathering with their U.S.-based robotaxis and pilot vehicles. So again, we're looking at the bifurcation of certain technologies, certain commodities, autonomous vehicle is really the biggest umbrella of all of that. There is data, there's chips, and there's control of the vehicles and understanding. So the U.S. government wants to know if the U.S. data is staying in the U.S., who's looking at it, who has access to it. And so we’ll likely see by the middle of 2024. So this should have happened years ago. I knew this was coming, but it should have been kind of regulated 3 or 4 years ago, because this is also why those companies’ U.S. arms are really, really, eerily quiet.

Lei Xing:
And then speaking of right, AVs, RoboSense and Hesai both announced pretty big numbers on LiDAR deliveries. And I think Hesai hinted that they were talking with U.S. automakers on possibly putting LiDARs. And that's, right, that's very sensitive as well.

Tu Le:
So that's all I had, in a nutshell, actually. Let me, I didn't get a chance to give you my thoughts on the Gravity. It's more of an MPV than an SUV.

Lei Xing:
Yeah exactly.

Tu Le:
$80,000, pits it right against Rivian.

Lei Xing:
I think they're different segments. 

Tu Le:
They are. But it's almost like in that video that they showed at the very beginning of the media event. They wanted to portray this outdoorsy…

Lei Xing:
More off-roady?

Tu Le:
 Yeah, but almost a luxury offroader kind of, like a G500 versus a Jeep, okay? So how that'll play out, their marketing is for premium and for like rich people basically, pretty rich people and stuff. But I like the interior much better than I like the exterior. I think the driver’s front console or the front console in general, looks great. I think the UX is good. I think that frunk, where you saw Rawlinson and what's his name, the head of design, sit down. I thought that was a little weird, but they could play on that. They could riff on that. And it's supposedly going to be the most efficient electric vehicle when it launches in 2024. So good luck to them. I think they have more robust lifeline than Rivian does. But they both, just need to learn how to manufacture in mass quantities, which they're still both struggling to do. Outside of that Lei, I don't have anything else. So why don't we open the room up? Let me also look through my newsletter to see if there's any. So actually, I wanted to ask you, because there's an article about how hybrids and EREVs are really taking off in China outside of, can you, we know BYD leans heavily into the PHEVs.

Lei Xing:
Now, first of all, I think the title of that article is a bit misleading. I haven't read it yet, but when you have something, I read hybrids, I think, in the western world, to me, when you say hybrids, I think of Priuses, I think of the non-plug-in. It's slightly misleading. It's better to put, I don't know, plug in hybrids or PHEVs so that we know we're talking specifically on these type of so called EVs, still with engines, either driving the wheels or not driving the wheels, which is the difference between the PHEVs and the EREVs, right? I mean it's from a cost perspective, from a user demand perspective, I mean if that's where the market is, I think that's what's happening.

Tu Le:
For consumers, I don’t, I think, again, it's one of those distinctions that don't make a difference, whether they're powering the wheels or recharging the battery, I think it's kind of not super relevant because it still drinks gas a little bit. So, but this throws a lifeline to Toyota, obviously, in China. And this is primarily the reason why Li Auto has been so successful. I think it's two things. I think the EREVs kind of give, they are really the only company that you think of in China when it comes to EREVss, number one. Number two, there completely focused on the China market. So those are super helpful, but I think you would also tweeted that or you'd mentioned this earlier that Stellantis is going to be one of the companies that is looking at exporting those EREVs via LeapMotor into Europe. So it could become a real thing in Europe as well, or at least utilizing that technology for European market vehicles. So. No questions, no hands raised. So I think we could close up shop, Lei.

Lei Xing:
Yeah. The other thing I’ll mention was the, so Xpeng earnings versus now there's that beef going on with the MEGA and the X9.

Tu Le:
Did you see that video with the chicken driving the MEGA?

Lei Xing:
Yeah, I mean that's just a typical how people compete and dunk on each other in China. I mean it's almost like a friendly, I don't know, just trying to put yourself out there.

Tu Le:
It reminds me of those billboards in LA where BMW had that M3, then Audi had the A7 or RS7 or something, then they put the F1 cars or whatever. So.

Lei Xing:
You know that Li Xiang is known for sightly dunking other people, dunking on Huaweis. And so I mean that's normal.

Tu Le:
So he's taking a bit of his own medicine. That's okay. And it's all in fun, right? It's all in fun. It kind of belies the still very intense conditions of the market. Because last episode you and I talked about that mad dash, so that mad dash is happening right now.

Lei Xing:
Yeah, and then Tesla raising prices twice within like I don't know the last week or so, couple of weeks. It's almost like I said, it's kind of the reverse psych, right? We're going to raise prices, you better buy it now.

Tu Le:
Yeah, because nobody knows what will bring January 1, 2024. So.

Lei Xing:
 Yeah, that's it. I think it's obviously there is all that happened, but…

Tu Le:
Right on. So everyone. Thanks for joining us. For the Americans that are listening, happy Thanksgiving. You better be watching the Lions, my Lions tomorrow, beat Green Bay. And Lei, the best to you and your family man. I'm very thankful.

Lei Xing:
Same to you.

Tu Le:
Having you as a good friend and co-host of this show.

Lei Xing:
Same here and we should thank all of our listeners and audience for making this happen. So.

Tu Le:
I'm very thankful, you raise a good point. I'm very thankful for a global audience. Consistently downloaded in 30 countries, but we've been downloaded in 90 countries overall. At one point in time. 

Lei Xing:
Thankful just to have this platform to get to debate, discuss, inform, educate, whatever. Yeah.

Tu Le:
All right, we will catch you all next week. Thanks.

Lei Xing:
Talk to you guys next week.

Tu Le:
 That brings us to the end of this week show. Lei and I thank you for tuning in. My name is Tu Le and you can find me on twitter @sinoautoinsight. You can find Lei on twitter @leixing77. If you wouldn't mind rating and or reviewing us on Apple Podcast, Spotify or wherever you grab your podcast from, we'd appreciate that as well. Even better if you enjoy this show, please tell your friends about it. Please join this again next week as we track down all the latest news on China EVs & More.

(Cont.) Episode #142 - NIO & Changan Swap, Tu and Lei Go to LA for the Show (and more), China Loves EREVs