Lei throws a curveball to begin the show and talks about some of China’s societal challenges, namely the aging population and shrinking number of babies born. Tu chimes in with his experience coming to the US at a very early age.
They broaden the discussion out a bit to bring in a few more noteworthy challenges to round out the discussion.
Tu & Lei get into some of the discounts that were announced last week and get into the forecasted export numbers and some of the surprise automakers that could be exporting out of China in 2024.
Tu points out that each year that the China market breaks sales records makes the following year even tougher to top. And the combination of a tough Chinese economy, high interest rates and the slowdown in the US & EU all point to a more challenging 2024.
Tu shifts the conversation to the Lotus Emeya and what brands and products it may be going after and whether or not they should be nervous.
The podcast closes on the news that TuSimple is exiting the US market and how EV related IPOs aren’t likely going to find many takers in 2024.
Lei throws a curveball to begin the show and talks about some of China’s societal challenges, namely the aging population and shrinking number of babies born. Tu chimes in with his experience coming to the US at a very early age.
They broaden the discussion out a bit to bring in a few more noteworthy challenges to round out the discussion.
Tu & Lei get into some of the discounts that were announced last week and get into the forecasted export numbers and some of the surprise automakers that could be exporting out of China in 2024.
Tu points out that each year that the China market breaks sales records makes the following year even tougher to top. And the combination of a tough Chinese economy, high interest rates and the slowdown in the US & EU all point to a more challenging 2024.
Tu shifts the conversation to the Lotus Emeya and what brands and products it may be going after and whether or not they should be nervous.
The podcast closes on the news that TuSimple is exiting the US market and how EV related IPOs aren’t likely going to find many takers in 2024.
CEM #150 Transcript
Recorded 1/19/24
Tu Le:
Hi everyone and welcome to China EVs & More where my co-host Lei Xing, a well-rested Lei Xing, and I will go over the week's most important and interesting news coming out of the 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 this podcast to other enthusiasts and course 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, a chilled out Lei. Can you please introduce yourself?
Lei Xing:
Hey, good morning, back in the east coast good morning. This is your co-host Lei Xing, former chief editor of China Auto Review, and this is episode #150. First of all, go Lions! I'm rooting for Detroit simply because there’s not much gone right, maybe except the Lions. And I'm talking about the auto industry, EVs. I'm rooting for the Lions.
Tu Le:
Coach Dan Campbell, Motor City. Dan Campbell makes it really hard, not to root for them. He seems like a really good guy.
Lei Xing:
Yeah, especially after I mean my first NFL game was watching the Lions with you. So…
Tu Le:
That's right!
Lei Xing:
Yeah so that makes it, you know… Price cuts, but I think we should begin with something else: population cut. I think that's a more pressing problem or issue for China, not only because of the society, the economy, but the future implications for the auto market. This is, I mean we've seen the numbers. It's pretty dire, I want to use that word, because it's, I think, for the second consecutive year, the yearend population dropped, and last year dropped by about 2 million. And this is going to continue for the years to come. I mean we should talk a little bit about the implications on the auto market.
Tu Le:
Two million people does not sound like a lot, but let's point to South Korea, let's point to Japan who also have very, very low birth rates in their countries. And they also do not have a very large immigrant population, and one of the best features, and you are actually talking to two people who are a product of that, is the immigrant history and culture of the United States. And one of the major differences between the U.S. a lot of other countries, mature markets, is that immigration has really, really helped build the United States into a superpower. I don't care what side of the aisle you're on, right or left. I'm an immigrant. You are or your parents are.
Lei Xing:
My father, my parents, exactly.
Tu Le:
So you're technically first generation, but you straddle both a bit and you're proud of your culture. I'm proud of my culture, but that's part of the American culture: everyone brings a unique set of values. And as long as we're tolerant, things are great, because I love the diversity of my son's school. I'm sure you enjoy that stuff too Lei. But I think that's the biggest difference, because without, with a low birth rate and no immigration, you're going to see a shrinking population. Let me add this one last thing, Lei and then you can take over. My wife is, and I think your wife too, is a product of the one child rule in China.
Lei Xing:
Well, I was just going to talk a little bit about it, but go finish first.
Tu Le:
Yes so that's all I was going to say. So she doesn't have any siblings, her cousins, she kind of thinks of as siblings, but not in the sense that you and I do.
Lei Xing:
Well, so my wife and I are both the post 70s so-called. So I am actually the last of people born before the one child policy. So I have a sister, and my wife has a brother, younger brother. So it's a bit different, but as, looking at the Wall Street Article, that chart, and really the peak population happened in the 80s. So the post 80s, I think 86 or 87 was like 25.5 million births. Last year was 9 million, just a little bit over 9 million. So it's almost a third less.
Tu Le:
Nine million on a base of 1.4 billion people. So it's a rounding error.
Lei Xing:
Yeah, and then I think on, China is becoming an aging society, one out of five is over 60 years old. That's only going to get worse or more. So going back to the price cuts, this is almost like a double whammy, right? Because the price cut is an indication of, I guess, partially demand, partially the economy, and then in the future, you have less people. We can also talk about that lower, supposedly lower unemployment rate that is being questioned.
Tu Le:
Well, the youth unemployment rate versus the overall unemployment rate are two different stories to tell, right?
Lei Xing:
But when you combine all of these factors, all of a sudden, I think I'm less…
Tu Le:
And real estate.
Lei Xing:
Yeah, all the price cuts going on. I'm slightly less optimistic. I think China volume wise, we can expect, you know we're entering the 10-million-NEV-a-year era, but it's, this cloud over market prospects, I’m not too optimistic about crazy growth anymore. Kind of, that's what I was trying to say.
Tu Le:
And Lei, I think it's important to highlight that you and I both in our predictions, believe that the price war will continue into 2024. So no surprises for this, for me. And I don't think any surprise to you either. We shouldn't really be that surprised that Tesla again initiated it because they don't have any new products. Now we hear that they're going to bring over the Cybertruck to China, but it'll get sales, but it's not going to be the savior for them that they want it to be.
Lei Xing:
No. But I think Li Auto and NIO were interesting because how quickly they just seemingly announced that their 2024 models are being launched in March, and they're kind of cleaning out the inventories. So effectively they're falling below RMB300,000 for some of the inventory models, which NIO had said that they wanted to make sure that NIO brand stays at a certain price level. And that's being thrown out of the way for a little bit.
Tu Le:
There's so much downward pressure on pricing for everyone, not just the Chinese, not just China EV Inc., there's so much downward pressure because we've talked about this, but give me 30 seconds to kind of talk about. In manufacturing when you're Apple and you have a contract manufacturer, you can cut orders, because your master goods agreement might be 30 days or 60 days. So anything outside of the orders that you had placed for the next 30 days you can cancel and not pay any penalty. But when you own the factory, these are your employees. If you don't have product to start, if you don't have any demand, you're going to still pay most of these employees for doing nothing. And so it's important to keep these factories running because you're paying for that factory. There's overhead, there's fixed costs, and then there's the direct cost from workers, but then not only that you've ordered all these parts, or you've built all these vehicles, and so you need to bleed inventory. In the competitive environment, everyone has extra inventory. So guess what happens at Walmart when you, when they have a big sale, they have sales normally because they have extra inventory. And in order for Walmart to sell that inventory, they'll discount it. And so this is the same concept except for the automotive sector, an extra good on your balance sheet is $25, $30, $40, $50,000
Lei Xing:
Yeah, and more stories. So couple of them, Beijing Hyundai, their Chongqing plant is being sold for half the price rriginally. I think was RMB1.6 billion versus RMB3.6 billion, and the story of this dealer that just closed down and all their cars were taken away. But these dealers primarily sold, I guess, some of these brands that are not doing well, like these things are happening. And then I'll give you another example of this population cut how it is reflected actually close to me. So my daughter's a kindergarten which has been around for in Beijing for roughly 20 years. They are for the first time they're facing an issue of not enough, so people who may be born, kids who may be were born in the 2020, 2021, three year olds, which are now at the age of going to kindergarten, they are facing a shortage. And every, all these 20 years before, it has been people fighting to get in. That's something to…
Tu Le:
I read this article, Lei, that trips into China from foreign countries is down more than 60% from pre-COVID levels. So tourism was also kind of an important industry for China, because it was about kind of the soft power, culture, learning more, having foreigners come visit China so that they can get their own idea and see all the positive.
Lei Xing:
Yeah, wasn't there a statistic that the roughly around 80% of pre-pandemic levels?
Tu Le:
Was it 80 or 60?
Lei Xing:
I think it was like around 80%.
Tu Le:
Maybe you're right. It was a huge number. It was a huge number.
Lei Xing:
Yeah, foreigners in China, so still not at 100% or back to the pre-pandemic levels. All of these things are, you feel like it's down, but I think, but that is not to, I think the fact is still, I think people are, when they're in the market for a car, I think NEVs are at the top of their shopping list. I would, we shouldn't change that fact.
Tu Le:
Which is ironic because BMW is refreshing their 5 Series. But I think it's going to be, I just, when we were living there, Lei, there was 20, over 20 years of double digit growth, 10%+ for 20 consecutive years. And I think Li Qiang, he said it was 5.2% last year. And the fact of the matter is not, we have to take the Chinese government at their word when it comes to stuff like that because there's not a ton of visibility in the data. But that's a long way away from the 12, 14% that was happening in the 2010s.
Lei Xing:
We shouldn't expect that high of a growth anymore, I mean, when it, but that's all relative, right?
Tu Le:
Yeah. But it's going to be really challenging to keep the type of momentum that has that we've experienced in the EV space or NEV space over 2021, 2022, 2023, in 2024, at least for the China market. And that's why I think that the media is correct, at least to highlight, I think trying to create this negative narrative is not helpful, but the awareness that there's a potential for a lot of exports into certain countries is, it's important to note.
Lei Xing:
I think 2023 is also representing a turning point where China seems to be, at least on the autos, and NEVs, are really switching from a domestic-led to maybe they want to be a little bit more global, right? You're seeing these actions, you're seeing these, BYD you mentioned, right? Indonesia, their 6th, 5th or 6th plant planned overseas, I think?
Tu Le:
6th.
Lei Xing:
Yeah and more companies announcing that they may be considering exporting out of China is because part of it is because of domestic demand is weakening. So when you look at the total numbers, they're huge. But when you dig in deep, right? The domestic sales. I was looking at the Ministry of Public Security registration numbers. Last year was 7.43 million (NEVs) registered in China. So it's a lot less than the 9.5 million, that CAAM published. So part of that went to export, part of that was in transition, I guess. Like these are all the different ways you look at things and kind of paint a different picture depends on what data you are looking at.
Tu Le:
And also remember Lei that rule, was it to double whatever sales is? And that's what we are guessing the capacity is. Yeah, so excess capacity is also going to increase the pressure and more in the immediate term on the ICE side than the EV side, I think, on the EVs, there's a little bit of overcapacity, but it's lumpy. So.
Lei Xing:
And also the NEV export numbers, they are huge, 1.2 million, whatever is reported, but these are exported. These are not actually registered vehicles in the overseas markets. And we haven't seen significant inroads in terms of these vehicles being registered. They're in a lot of different countries, but the volumes are still relatively small.
Tu Le:
So China EV Inc. is going to run into perhaps some protectionism, but there are practical reasons why Chinese brands, EV brands might not get the take rates or demand that they're looking from these foreign markets. Because charging infrastructure, if charging infrastructure isn't there, people aren't going to want to buy electric vehicles. We're seeing that in the United States, Europe to a lesser extent, that's going to take time, two or three years to kind of build out this charging infrastructure, to kind of make it more customer friendly. And so and then for the U.S., I'm in the middle of winter, we some people in my other neighborhood next neighborhood lost their power. So.
Lei Xing:
Same here. I lost power a few times. Still, this is America.
Tu Le:
We talked about this before we jumped on. People, there are articles about Chicagoans that are Tesla owners that can't charge their vehicles and or range is decreased by half. Now, we're talking extreme weather -10, -20°, but that's a real challenge for a lot of people that live in the Midwest and in the East where you are Lei. So and these are new experiences for folks that are in countries that are really just beginning to ramp EV adoption. So there's practical challenges for China EV Inc. to be selling into some of these markets as well.
Lei Xing:
That's why for the U.S., I mean California is the entry place most likely for, because of the weather, because of the policies and regulations and right, we heard about this, it looks like Trump is in the lead. And when he, if he does gets…
Tu Le:
Elected?
Lei Xing:
Is that a second term? No, it wouldn't be called a second term.
Tu Le:
I think it would.
Lei Xing:
Okay, second, I mean all these policies in place probably going to get tweaked.
Tu Le:
If not abandoned altogether at the extreme, but I mean that to me that, that ship has set sail, but I think that a lot of companies are holding off on investment and determining their final strategy on market entry for the United States until after the election, so that they can create a relationship with the new administration or reinforce the current relationship or the relationship with the current administration, because that's the biggest unknown, at least for the United States. Man, the one thing that I wanted to let everyone know is you and I kind of just jumped into this price war. So Tesla cut prices 6 and 11% on the 3 and on the Y. And Li Auto followed suit and then NIO followed suit. So just want to give you all a background on the three well known players that have cut price just the last two weeks in China.
Lei Xing:
Yeah, I mean Li Auto, they're looking at 800,000 units. I already predicted, made a prediction that they're going to pass ABB and I'm having second thoughts. I think they will try every which way they can, they have the L6 coming out and then a few BEVs.
Tu Le:
So that L6 is going to drive, should drive sales number one. Number two, unfortunately, they had to push out the MAX, which I think they were looking at to try to…
Lei Xing:
The MEGA?
Tu Le:
Yeah, the MEGA. Sorry. They were trying to generate some volume from that as well, which if you're losing three more, actually, I take that back, because let's say that February is not much of a sales month because of Chinese New Year. So maybe it doesn't hurt them as much as they think, as I think.
Lei Xing:
Yeah the way with which they're refreshing, I guess we talked about this, is it's crazy because we just feel like for NIO, they just completed their what, 2.0 platform, like just a few months ago and now they're launching 2024 versions.
Tu Le:
I don't know.
Lei Xing:
And then so looking further ahead, Beijing Auto Show time, we're probably going to see, right? Xpeng’s MONA, NIO I don't know whether they’ll announce Alps, there's still more brands and Xiaomi is still contemplating how much they're going to price their SU7.
Tu Le:
Lei Jun is probably pulling his hair out thinking that yeah, going into the announcement, he was thinking probably premium pricing, but now he will not sell that at the price he wants to, or he wanted to, prior to unveiling in a couple of weeks ago. So, BYD, who does this Lei, launches three vehicles in Indonesia at one time? Normally, when the company enters a foreign market, they might launch one car, right? But we should note that for those that aren't familiar with Southeast Asia, what, 5, 600, 700 million people in Southeast Asia, and Indonesia, being the largest country with around 275 million people. So almost as big as in the United States. Vietnam is about 100 million, like 95, Philippines about 95, Thailand, a little bit less than that. These countries are massive. And so for BYD to enter them, number one is a huge opportunity because these countries are also dominated by the Japanese automakers. A few of them have manufacturing in Thailand, Vietnam. So being in Indonesia is very important. Being early is also very important. And BYD is doing both. And they plan on using Indonesia as a manufacturing hub. So.
Lei Xing:
That's what, their second in Southeast Asia? They have one in Thailand, I believe, planned, or…
Tu Le:
Yeah that launched already, correct.
Lei Xing:
Yeah, right. So think about that.
Tu Le:
And then they ship kits out of India, or ships kits into India, sorry.
Lei Xing:
Yeah so speaking of shipping. So we saw the boats right, by BYD and also SAIC also had their boat, 7,000 capacity, I haven't read followed on the Red Sea situation because that's disrupting, I guess, logistics, component supply, shipping. That's another factor in this kind of export environment.
Tu Le:
I wrote in my newsletter Lei that that seems to be a bit of a smokescreen a little bit, because Volvo and Tesla said that they're going to be shutting down manufacturing in their European operations, Berlin Giga, but for Volvo, I think it's in Sweden. But they're saying that the supply chain disruptions caused by the pirates is forcing them to shut down. But this is the week after Tesla cut prices in Europe. Which one is it, we see a little bit of both probably.
Lei Xing:
Yeah, and then seeing, I just saw some tweets from Benchmark that how low the lithium now is falling to. And that's then while you have other issues. So the chip shortage is probably behind us in the real mirror. Now you have these logistics while demand is a problem, economy's problem in China. Lithium prices falling, right? These are all so many factors at play on the…
Tu Le:
The Chinese economy is a real challenge. I think it's something to watch for. It's going to really, let's say, force the Chinese government to kind of reconcile certain strategies that they have, diplomatic strategies, manufacturing strategies, exporting strategies. I don't see the Chinese economy like recovering, like instantly, it's going to take time, just like the United States. China has structural issues that it takes a lot of effort, a lot of consensus to make changes to.
Lei Xing:
I would imagine that this price war eventually will push out, if not already, the ones that can play this price war, if they don't have the ammo, I guess, profitability, then you lose at the end of the day.
Tu Le:
Or a sugar daddy. Because in the west, what we're seeing is the VinFast, some of these companies, not so much Lucid, not so much Rivian, but some of these other company, Fisker, not able to really realize their product strategy, their manufacturing strategy, because they're low on cash.
Lei Xing:
There’s product issues, especially Fisker, right?
Tu Le:
Yeah, but to me, the product issues is kind of part and parcel with being an EV startup. So I don't look at, and I'm over simplifying this. I'm trying not to, but you put VinFast and with Fisker having quality issues, reliability issues. And then there's, so there's one person, in particular, who's super long VinFast, and when everybody else is like this is trash, but we won't go there. But anyways, so let me ask you Lei. I'm going to switch gears here because I'm actually a fan. Lotus EMIRA.
Lei Xing:
I was going to go there as well.
Tu Le:
Your thoughts?
Lei Xing:
EMEYA?
Tu Le:
EMEYA? Is it EMEYA? There is no “R”?
Lei Xing:
Not the EMIRA. EMEYA. I think that's how it’s pronounced.
Tu Le:
I thought there was an “r”.
Lei Xing:
No, E, M, E, Y, A I think.
Tu Le:
Oh ok, because my eyes suck. Then I tweeted that because it's starting at $92 grand. So I tweeted that the 5 Series, the A6 and the E-Class needs to freaking worry.
Lei Xing:
It's not cheap, still, I think…
Tu Le:
It is not cheap.
Lei Xing:
I don't know, in that EV price range is what, HiPhi is in that range, I believe. And then the Yang Wangs.
Tu Le:
Come on, we can talk like HiPhi is actually going to compete, but I don't even know if they're going to be shipping many cars, the first half of this year.
Lei Xing:
But, I mean, EMEYA, I mean Lotus that's their positioning. I don't think they can. I mean, just below the RMB1 million or the $150,000.
Tu Le:
So there's one friend of the show that is on. I won't put him on the spot, but I wonder if the Panamera folks are getting nervous, because let me say this statistic real quickly and I'll get your reaction. Porsche posted global sales 330,000, +3% globally, driven by Europe and the United States. But the number that people should be focused on is the -15% in China. Because for the longest time, I think last several years, the Chinese market has been the largest for Porsche. So think of it like what happened with GM, how China was the largest market until last year and then the United States took back over. So these are, really should be very concerning. Not only because of the competition that is coming into the market, but because of the overall health of the Chinese economy.
Lei Xing:
Yeah, that in fact is what they pointed out in their press release that due to what, challenging economic conditions. But what exactly does that mean? Does that mean demand, there were demand problems? Does it like, or was it allocation problems? Or something else, right? We don't know until we see, maybe when they announce the annual numbers financially, and see whether, I think last year they were at 18% return on sales. I mean if China doesn't do well, but they're, financially they're even more healthy, I don't know what do you do? Maybe we see this year, whether last year was an anomaly or it was start of a downturn, we don't know.
Tu Le:
Do you see the EMEYA being a direct competitor to the Panamera?
Lei Xing:
I don't know the exact…
Tu Le:
Or the Taycan?
Lei Xing:
Could be, I think I’d rather say it's probably to a Taycan more so than the Panamera, because it's an EV, similarly priced, positioned EV.
Tu Le:
But you could see Panamera buyers also looking at the EMEYA, correct? It's a smaller sedan.
Lei Xing:
From a brand point of view, reputation, or, I think Lotus still has some ways to catch up to Porsche in China. I'll just say that.
Tu Le:
Well, Lotus is just not that well known in China. Geely is doing their darndest to change that, but they also have to give breathing room to Volvo and Polestar. So.
Lei Xing:
TuSimple? You mentioned TuSimple delisting.
Tu Le:
So TuSimple is an autonomous trucking company, very promising, IPOed in the U.S. in 2021, was it Lei?
Lei Xing:
One. Yeah. I think March or something.
Tu Le:
Friend of, I'll just say someone that I knew became the CEO and very successful IPO. Peeling the layers of the onion bag, there were issues between the U.S. operations and China operations. And as part of the IPO they had agreed with the U.S. government to separate businesses. And then we come to find out that there was potentially some IP sharing that shouldn't have happened. Cross border IP sharing that shouldn't have happened. And so huge scandals, share price went down to like a buck. They were as high as a $30, $40 billion dollars. No? was it $12, $14 billion?
Lei Xing:
Their highest valuation was like $12 billion.
Tu Le:
Yeah, $12 billion, sorry.
Lei Xing:
Now they are what, $60, $70 million? 30 cents a share.
Tu Le:
Which is weird Lei, because they have $90 million in the bank. It's a fire sale right now, too. So you could go buy a TuSimple truck. I think they're auctioning those capital equipment off and they're going to close up shop in the United States. I think I don't know have you heard is Chen Mo still the head of TuSimple in China?
Lei Xing:
I am not sure, which is, there's a lot of, like this, who is this company, I think that question is, is that a Chinese company, is that a U.S. company, all of these questions which made this an interesting case study. Because for a while, I think TuSimple was one of the top most promising autonomous trucking companies anywhere, in the U.S. in China in terms of commercializing. And now that basically we have, the only one we have now is Aurora. And they're not going to come out until 2027.
Tu Le:
And Kodiak.
Lei Xing:
Well, Kodiak, but I think the way, the saga, I think involves so many things, right? Strategy, disputes, internal strife, China U.S. politics.
Tu Le:
There's going to be a story, a book or a movie about this.
Lei Xing:
How Xiaodi was pushed out, and from his point of view.
Tu Le:
You're just talking about the corporate stuff. There's FBI involved, there's SEC involved.
Lei Xing:
Yeah SEC and then what, the other one, FBI right?
Tu Le:
I think that's ongoing. I don't think that's closed.
Lei Xing:
I think overall, if we look at the U.S. autonomous vehicle space, maybe except Waymo, there hasn't been much positive development.
Tu Le:
TuSimple marketed itself really well when they went IPO, just before they went IPO they hired like 10 white guys, and they were dominating all the marketing, their pictures, their titles, their experience was all dominating the marketing material for TuSimple’s IPO and they actually downplayed Xiaodi Hou. I think Cheng Lu was being interviewed, but I think mostly focused on these old white guys that were supposed to be managing the operations for the U.S., so.
Lei Xing:
So the way TuSimple started was Xiaodi was the tech prodigy and Chen Mo was a serial entrepreneur. So I think that was like the perfect combination at the beginning. I think it was 2015, and 2015 is right around the time when a lot of these startups, right, the NIOs, the Xpengs, and the AV startups started happening. And less than 10 years later, kaput, right? Gone kind of.
Tu Le:
But there's billions of dollars involved. So there's the money grab.
Lei Xing:
The fact that TuSimple got investment, I think, like, right before the pandemic, I think 2019, 2020 was the time when actually the AV industry was kind of in a gloom, right, there wasn't that much investment at that time following 2016, 2017.
Tu Le:
I actually wrote in the newsletter that they just made the IPO window before it closed, because the Chinese government closed it for DiDi, they closed it for all these companies.
Lei Xing:
And then there was like Sina was involved.
Tu Le:
And Hydron, the trucking company now that Chen Mo is also the founder of.
Lei Xing:
So this should be a lesson for all of these.
Tu Le:
It should be forewarning. I completely agree.
Lei Xing:
Chinafornia companies, that some of them are looking to IPO, in the current process of IPOing.
Tu Le:
Our friends at WeRide, they seem to be keeping their nose clean. And they're likely going to be IPOing later this year in the U.S., so will there be an appetite? I don't know. But I'm sure there will be sorry, but the other companies that we should be looking at is the Geely companies as well, Lotus.
Lei Xing:
Smart, ZEEKR.
Tu Le:
So is there going to be an appetite for those companies? We shall see, but we also know that I believe ZEEKR was supposed to be IPOing next month. They've decided to hold off a little bit longer. Now, they've made a point to show their brand in the United States.
Lei Xing:
Big time.
Tu Le:
That's one of the reasons.
Lei Xing:
In New York, and at CES. So.
Tu Le:
Lei, so what did you think about my, I don't know if you saw my newsletter, but I said, I highlighted.
Lei Xing:
Yeah I skimmed through it.
Tu Le:
Say byedar to LiDAR.
Lei Xing:
It's yes and no. I think we talked about it in the last episode. You can clear see that there's two, what, paths happening. There's the JIYUE where they're trying really to push this, not LiDAR, but still advanced ADAS. At the same time, I think LiDARs are still getting onto vehicles where the RoboSense, there are two of them on the EMEYA. What I'm really looking. So I mentioned MONA right? MONA and also the C10 are some of the vehicles priced below RMB200,000 that will have LiDARs. That's the commoditizing part of it which should increase in volume. So that I think there's both things going on. And then we don't, at the end of the day, I don't want to say that LiDAR is done, or everybody's going to put LiDARs on. It's, both are happening.
Tu Le:
I don't think it's done, but I think I see a path to it being commoditized in a very short period of time, by 2030 for sure.
Lei Xing:
And depending on how L3, so quite a few brands got L3 testing permits, the belief or I guess the consensus for L3 is to have LiDARs.
Tu Le:
This is where we have to take a step back, because at the end of the day, Lei, when we get to L3, at least commercialization of it, how will, and I'm not naming one OEM because all the OEMs are going to have similar challenges. How will they market the L3 ADAS in order to be, in order for you and I to pay $20 a month or whatever the $15,000 like FSD, how will they do that? One way is to create more awareness and emphasize the benefits of having it. But if it's only for one or two use cases, then it really doesn't, me paying for it doesn't really have a ton of benefit, right? So as they get more licenses, as more use cases are opened up for these pilots, we'll see if the consumer will feel that there's value in being charged a monthly fee in order to have that capability with their vehicle. So.
Lei Xing:
But I mean to me personally it would be perfect on the ring roads because in the summer when I was there, I drove lot in traffic on the ring roads and just sitting there and going stop and go and that's the perfect.
Tu Le:
I gotta laugh Lei, because you say that now and I agree with you, but 10 years ago on those ring roads, you'd have gotten an accident within 2 minutes. For sure you would have gotten into an accident, because 3rd Ring is completely fine. But like, especially if you're getting out into the like 5th Ring, 6th Ring in the middle of nowhere, I still saw people going reverse on entrance ramps because they went on the wrong exit ramp. I'm like, what are you doing. dude? And so actually, the one thing I also wanted to comment, get your comments on is SAIC had forecasted exports of 1.35 million versus 1.2 in 2022. Do you think they're sandbagging? Or do you think that they don't feel they should be that aggressive with exports in 2024, because…
Lei Xing:
Yeah that sounds pretty conservative. I think that points to some of the sentiment, maybe of the prospects of what they are expecting.
Tu Le:
Yeah. And remember that there are approximately 4 million vehicles exported last year, of those about a third of them, as you had mentioned earlier in the show, were NEVs. If we say, 4 million, 1.2 of those came from SAIC and most of SAICs are ICEs, not EVs.
Lei Xing:
It's not a significant growth over last year. Maybe they are sandbagging a little bit.
Tu Le:
Ok, hey, the last thing is man, I wish I was rich because the average price of the Detroit Lions ticket vs. Tampa Bay is $1,200.
Lei Xing:
Still growing, and it's still growing, right? Still increasing.
Tu Le:
Rocking baby. Hopefully we show up, we did really well. It was the best game of the weekend last week. But, everyone, thanks for listening again, enjoy your weekends and watch the Detroit Lions vs. the Tampa Bay Buccaneers.
Lei Xing:
Go Lions. I’m following.
Tu Le:
Restore the roar. Restore the roar.
Lei Xing:
Don't jinx it, man.
Tu Le:
Good morning, good afternoon and good evening, everyone. Thanks for joining. And we will talk with you next week.
Lei Xing:
Likewise, bye bye.
Tu Le:
That brings us to the end of this week show. Lei and I thank you for tuning in. My name is Tu Le and you can find me on twitter @sinoautoinsight. You can find Lei on twitter @leixing77. If you wouldn't mind rating and or reviewing us on Apple Podcast, Spotify or wherever you grab your podcast from, we'd appreciate that as well. Even better if you enjoy this show, please tell your friends about it. Please join this again next week as we track down all the latest news on China EVs & More.