Episode 122 - Delicate Chinese economy, XPeng G6 Importance, So much news to cover

Lei kicks off this episode with his experience going to a Beijing Guoan game - Beijing’s professional soccer team. 

Tu then talks about the pollution blanketing MI with the smog coming from Canada and how it reminds him of his time living in China. 

Onto a detailed discussion about the XPeng G6 which just began delivery this week. Tu and Lei agree about how important this vehicle is for XPeng and the high expectations for the vehicle. 

Tu emphasizes that the Chinese economy has not fully recovered from Zero COVID and that it will be important to keep a close eye on what the Chinese govt is doing to try to jumpstart it and that vehicle purchase is one of the levers to try to do that. 

Tu and Lei compare and contrast XPeng’s strategy and results so far against Li Auto and their success over the last few quarters with new vehicle launches and debate whether Li Auto can achieve 1.6M sales by 2025 that Li Xiang outlined as a goal for the company. 

Tu moves on to give a brief history lesson about how automotive companies used to acquire and develop brand portfolios in order to follow a person’s journey through life with a brand / products for your first job and then having a luxury brand for when you are older and an executive. It looks like some of the EV companies that are launching multiple brands want to also try to use that strategy as well. 

Lei talks about how he’s still getting used to seeing brands and products that he’s not yet seen or heard of while Tu reassures him that he had trouble keeping up with all the news, brands and products that were consistently coming out each week. 

Tu closes out the pod with a summary of some of the news he highlighted in this week’s SAI Newsletter. 

Transcript

CEM #122 Transcript
 Recorded 6/30/23

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 to other enthusiasts and tune in again next week. 

My name is Tu Le. I'm 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, good morning. Can you please introduce yourself.

Lei Xing:
Good evening from Beijing. This is your co-host Lei Xing, former chief editor of China Auto Review. And this is episode #122. So, TGIF and we are right at the halfway point in 2023. And I’m at my 10th day in Beijing already.

Tu Le:
Already.

Lei Xing:
Yes. Finally, I think getting into the groove of things in China, things in Beijing specifically. And starting to cross…

Tu Le:
Hai re ma (still hot)? 

Lei Xing:
Oh, man, you're in Detroit now right? 

Tu Le:
In Detroit.

Lei Xing:
Where the air quality is pretty bad I assume?

Tu Le:
It's about 160, 170 today. Yeah, for those that aren't familiar with AQI, a normal day in the United States on a good day, probably less than 30, AQI, and so 170 is pretty bad. Once you get into the over 200, 250, you can actually taste it a little bit in your mouth.

Lei Xing:
Both of us got a taste of the Canadian fire. Yeah, so I’ve been here 10 days and there's only one day, the day that rained I think June 28 when NIO delivered the ES8, that was the only day when temperature was below 30 Celsius. Every other day has been, like today, like 38, 39 near 40.

Tu Le:
The pollution has been pretty good though?

Lei Xing:
Yeah the pollution hasn't been that bad and it's in the hundreds. So sometimes in the double digits. Nothing to complain. So I'm starting to cross off some items off the bucket list. So I was at a Guo’an game last night. They played real bad, but they were playing the top team. So at the new Gongti, so I talked about that a few episodes ago, so I got that crossed off the bucket list.

Tu Le:
So let me ask you, are they still like swearing, like “shabi” and all that stuff?

Lei Xing:
Big time. So equivalent of, so it's called the “Jing Ma” which means the Beijing swearing for those that don't live in Beijing or don't watch China football. They don't know what we're talking about, but yeah it's, when you're in the stadium, that makes, it's an interesting environment. So yeah.

Tu Le:
My kids I think they can handle it now, but just 2 years ago, they were young. So I didn't really want to take them to the games, because there, is just all swearing.

Lei Xing:
I took my daughter to the game, so she, besides swearing, I think she's old enough to understand. And but she wanted to stay more than me and my wife. So she loved the environment. And that's great. The other, I’ve checked out the new NIO House today. Just what I’ve been doing in Beijing is just to go and visit these stores and talk to the sales associates. Something I wasn't able to do all this time that we've been doing the show and really to get a feel from their mouth of what's going on. I went to the Tesla showroom in Hua Mao, one of the earliest stores.

Tu Le:
So near Wanda, Wanda Plaza.

Lei Xing:
So one of the ladies said, I was asking her, it's last day of the month, last day of the quarter, should I place an order? I guess you have some incentives going on. And she's like, no, I recommend you not to because, and then she kind of held off. I'm expecting an announcement in due course.

Tu Le:
We talked about this. We knew that there was going to be more than one price cut, right?

Lei Xing:
It's either a price cut or a new version announcement. I think it's coming real soon, if not tomorrow, within the next few days, I think. Really the next move by Tesla. I checked out the battery swapping. It was actually on my way, I was taking my daughter to a place. So I just saw it and checked it out. It's the Aulton for taxi fleets, actually pretty popular.

Tu Le:
They're not as fancy as the NIO swapping stations. They're not…

Lei Xing:
Not as fancy, but it works. And I was there for 10 minutes, and there were three taxis, one after the other pulling in and getting battery swapped and getting out, so.

Tu Le:
And they are all BAIC?

Lei Xing:
Yeah they're all BAIC, so that was interesting to see. And then….

Tu Le:
So for those folks, BAIC is Beijing Automotive. So.

Lei Xing:
Yeah, so they have, they dominate the, I guess, the official taxi fleets with their EVs. And then the other day I got my license renewed. And I had to go to this place, the main DMV in the southeast corner of the 4th ring road.

Tu Le:
Been there a couple times.

Lei Xing:
Yeah, which is not too far from Yizhuang or Beijing e-Town. So I drove down and just kind of see, that's where the testing of the robotaxis are, yeah, Pony, bunch of Baidus, I think there's like  600 running or something and there's, most of them have the safety driver, some of them have the safety driver on the passenger seat and I think there's 10 vehicles that are fully driverless. And Baidu and Pony are the first to get those licenses. So I saw some of those in action.

Tu Le:
So when I was there for the auto show, I got to ride in one with my friend Duncan, so.

Lei Xing:
I have a chance next Friday, they're arranging me and I think another editor from Nikkei from Japan. So will be looking forward to that. So that's, and just one thing I find fascinating is not only the number of different EVs, whatever any kind of brand that you can think of, but the homogenous, what's the word?

Tu Le:
Homogeneity?

Lei Xing:
Homogeneity. Yes. Sometimes I can't really tell because a lot of these EVs design wise they look the same.

Tu Le:
Silhouette wise.

Lei Xing:
Yeah silhouette wise. But and then you go closer and ok, you know, this is this brand and this model, just getting used to life here, feels like I'm in the, back in the working in China mode, not vacationing, but yeah, so it's a great on the ground learning seeing everything which I missed, right?

Tu Le:
So in summertime, normally all the foreigners leave for the summer, a lot of local Chinese that are middle class, upper middle class, they'll also leave and go to the countryside or actually leave and go vacation. So summers are fairly quiet in China. And so here, I wrote in my newsletter that the last couple of days have reminded me of the days in Beijing where everything just kind of had this filter. It didn't seem crystal clear, right? And so, yeah, people are pretty concerned. Some are wearing masks. I think some are staying indoors, but I think you and I know that it's almost worse to be indoors because you want that wind, you want that breeze. And it kind of sits in the house. And so this is those moments where I feel like we should have brought back one or two purifiers. I'm hoping that it will go away sooner rather than later, which doesn't seem like the case. But let's talk G6.

Lei Xing:
Yes. G6. Oh my god, it's one of those models, right?

Tu Le:
It is such an important model for Xpeng, such an important model.

Lei Xing:
Pricing wise, right? Feature wise.

Tu Le:
Super aggressive.

Lei Xing:
Super aggressive. And just I want to point out, this is the G6. This is the only smart EV model in the RMB200,000 to 300,000 range with a driving range above 750 km, CLTC I believe. And this is the only model in that price range with the 800V silicon carbide, and the only model with the XNGP akin to Tesla’s FSD, so…

Tu Le:
Which they do not offer in China.

Lei Xing:
Right. And also I think what was important was very different from the G9 launch when they messed up with the SKUs. This time they have five different versions. It was very clearly, so they use the Pro/MAX to differentiate. And it's basically Pro has the single Orin-X and XPILOT, where the MAX has the dual Orin-X chips.

Tu Le:
And you're talking NVIDIA.

Lei Xing:
Yeah. And the XNGP and the two RoboSense LiDARs. That's basically the difference. And then the other one is basically the battery difference. By the way, CALB is the sole battery supplier for the G6 because of the 800V architecture.

Tu Le:
They are putting a lot of faith in CALB. And they are almost the forgotten battery manufacturer, because CATL, BYD, Gotion, at least in the west, have gotten so much publicity. CATL because of the partnerships with Ford and Tesla in the United States, BYD for their lack of making an announcement about entering North America, and then Gotion obviously with their partnership with Volkswagen and their factory that's in western Michigan. So CALB is not a bit player, but they're much smaller. So a lot of faith.

Lei Xing:
CALB also had some lawsuits with CATL I believe. So kind of a beef between the competitors. And so really making, for people trying to select different variants of G6, making it a little bit simple. So there's really only five versions, but really the bulk of the sales is going to come from the middle three versions. So there's the top version. And then there's the 580 Pro, which is the RMB209,900, much lower starting price.

Tu Le:
For those that are wondering, the G6 is around the same footprint size as the Model Y.

Lei Xing:
Yeah roughly.

Tu Le:
It’s, if you're wondering the size, it’s B-class, I want to say. And it's more of a crossover than an SUV so.

Lei Xing:
Right. It’s clear different than the G9, which is an SUV, more SUV type SUV, and I think He Xiaopeng he made some comments. One is that it's going to be the best smart EV for the RMB250,000 price range. Second, He aid G6 is like the Apple iPhone 4 moment because that was a step change as using this new architecture. And then he said it's targeting at least 10,000 a month. And then they want to be the top selling model soon in that RMB250,000 range.

Tu Le:
Let me ask you this, pose you this question like you've been in Beijing for 10 days, you said, you see all of the B-class SUVs, crossovers on the streets. That is the probably the most competitive market segment in China at around RMB250,000 and below, right? So 10,000, I think G6 can do that for sure. But if it doesn't do at least 10,000, I don't think you can say anything except it's a failure or disappointment.

Lei Xing:
I think we had a similar discussion on the P5 when it was launched two years ago. Let's hope the same does not happen to the G6, because this is a lot of expectations going into this model launching and starting deliveries soon, early next month. And then really, the biggest selling point, I think, is this City-NGP rollout, which is now available in four cities, and they're increasing to 50 cities by the end of this year and 200 in 2024. So right, when we talked to Brian Gu, all he talked about was the smartification. So that's riding a lot, I think on. And then charging, right, the 800V architecture, 10 minutes, charging 300 km, 19 minutes from 10% to 80% SoC, they've got 35,000 orders.

Tu Le:
And I must say that Xpeng has reached out to folks like us and some of the international community car reviewers and things like that, that are China anyways. So they've made a concerted effort to put on a marketing blitz that I think is much more coordinated than the P5 was. I think they're starting to understand that a lot better. You have to look at the success that Li Auto is having, and point back to Xpeng and NIO and say they have to be second guessing themselves from a focus on China market versus expand international. So I'm not saying that NIO and Xpeng expanding internationally was a mistake, but the outcomes kind of bear that out a little bit, right?

Lei Xing:
Yeah and I just thought Xpeng learned their lesson from the G9 launch. And it was much more clear in terms of how the different variants, what happens, what kind of options or benefits that existing owners have when they want to purchase this, it was much clearer. They probably learned a thing or two from Li Auto, because Li Auto uses Pro and MAX and Air. So that's the homogeneity I was talking about too, not only in terms of how the car looks, but naming conventions.

Tu Le:
They're basically relating it to what Apple does. And so there's already with the target consumer in China, there is already a familiarity with those, what's that, trim levels, right?

Lei Xing:
Yeah and BYD does that, BYD has the Pro, has the Plus.

Tu Le:
BYD is too much. The Song has like four different versions and it's confusing, so.

Lei Xing:
And going back to your mentioning of, I’ve been here seeing on the road, the type of vehicles, what I see on the road exactly reflects the BATL, because I see mostly Teslas, I see mostly BYDs, I see mostly AIONs and bunch of Li Autos, some Xpengs, a lot of NIOs. Yeah, but BYD is definitely, at least it seems every other car is a BYD.

Tu Le:
Funny thing about NIO is that you go to Beijing, you go to Shanghai, Shenzhen to a lesser extent, I think, but you're going to tier-1s, you see enough NIOs. It's just that they haven't really penetrated or resonated into the lower-tier cities. And the sales have reflected that. So.

Lei Xing:
Yeah, and also that the incentives and the campaign, marketing campaign, national of focusing on the rural areas. It's also pointing to the fact that things, maybe you said this last episode that we're seeing some saturation in the bigger cities, and that's why they want to drive this NEV push down to the rural, lower tier cities.

Tu Le:
Yeah, but I think the other important thing too, is, always remember, at least over the next few months and keep track of what's going on with the overall economy in China, because there are still a lot of concerns that the overall economy is weak. And so this puts a lot of pressure on pricing, on features. So the price war is going to continue as long as the economy is still struggling a bit or still not as robust as in the past. And that's really going to increase the pressure to export if you're struggling. And one of my posts in the newsletter this week was one of the market research firms had forecasts that NEV take rate for exports in Europe is going to be 9% from the Chinese brands, that's growing from 6% in 2022. So it could be even more than 9% if the Chinese economy isn't able to really get ratcheted back up into growth mode. So.

Lei Xing:
Speaking of the Chinese economy, what I feel is happening is I see, I mean out on the streets, I just see a lot of people working really hard. I mean these, a lot more kuaidi (express delivery) people just people making life, different jobs, different functions that people are working hard. And maybe when we talk about this buying, consumption downgrade, what's reflected in the EV market may be is, some of these people when they had the purchasing power to buy, let's say, the Porsches or the higher priced premiums, they are now buying Li Autos. That's part of the consumption downgrade, I think, which is a blessing in disguise for the Li Autos, for these mart EV premium startups.

Tu Le:
The fact of the matter is that the NIOs and the Li Autos, the Xpengs, the BYDs, they're offering products that people want to buy at the end of the day. That didn't happen 5, 6, 7 years ago, not with the ICEs anyways, so. 

Lei Xing:
So also really, I visited the Denza, a couple of NIO stores, Tesla, everywhere I went, every one of those stores I went the salespeople, the guys or the ladies, they're very patient. They love to talk to you. They love to add your WeChat and say, when you want to do a test drive.

Tu Le:
Ni sao wo (please scan for my WeChat).

Lei Xing:
Yeah I mean it's like, love talking to them, and I just explain I've been away for 3.5 years. And it's amazing to see this dynamic and just trying to learn and they are very patient. So really, it's…

Tu Le:
So now and I don't want to beat a dead horse, but now you see why I started the newsletter. Now you see why I wanted to create this podcast with you, right? Because it is such a dynamic and fierce and innovative and competitive market in China and it's leading the world. And it's not because of nationalism. It's not because of protectionism. It's because there are a lot of choices at a very affordable price. I'll give you, for instance, the ZEEKR X, which is going to be less than $30,000 in China, is going to be sold for 50,000 Euro in Europe. So that's not cheap. So.

Lei Xing:
But it could still be competitive because of the lack of offering.

Tu Le:
Real products. But I will say this Lei, at RMB210,000 versus RMB189,000 I might upgrade to the G6 from the ZEEKR X. I think the ZEEKR X is nice. It's a little smaller than the G6, but..

Lei Xing:
As I’m thinking, the 755Max, which is, I think, slightly over RMB250,000 is a great deal, because it's got the XNGP, it's got the range, I think even the 580 Max, because I don't know, I mean 580 km that's more than enough. And you still get the XNGP.

Tu Le:
Let me set the table a little bit because Brian Gu has been interviewed and he said this during our sit down with him, he said that he foresees long term about 10, 11 global brands that are each selling at a floor of 3 million units. So when you're thinking Xpeng, think about that, the target is 3 million before 2030 probably, in order for Xpeng to be a global player, okay, he said global, he didn't say Chinese, so that means that Xpeng is probably selling 2030, 40% of, maybe 30% of their sales internationally by 2030.

Lei Xing:
Which is the difficult part of really, if you want to be global, let's say Chinese brands becoming the next Hyundai or Kia, let's say, in the U.S., that's going to take a while. But now let's forget about this, China-U.S. relations. Let's say that's not a factor, but still right.

Tu Le:
So this is the thing like, if we say that each region, each country has a national champion, the U.S. whether it's GM or Ford, let's say one of the 10 is a U.S. company, one of the 10 is a German, one of the 10 is a French, one of the 10 is, then there's only room for three or four more, right? And how many will come from China? I believe maybe a handful will resonate globally outside of China. And so part of that is going to be being able to outlast this price war, because the price war is going to weaken everyone.

Lei Xing:
Which Li Xiang talked about extensively in a long letter he posted on the 8-year anniversary, right? About really…

Tu Le:
Happy birthday Li Auto.

Lei Xing:
Yeah, being efficient, being able to offer this cost, but at the same time, bringing the maximum value at the lowest cost, lowest cost OEM, but also to the consumer and maximum value. So.

Tu Le:
Let me add here Lei, that this is where putting your car hat or automotive hat back on makes a ton of sense, because the number skews, the complexity of the manufacturing and being able to market your products very simply and having the messaging resonate, that's an automotive thing now. So now they're learning how to be car guys, more and more like car guys. On the operational efficiency, they were trying to be more like Toyota, they're trying to be more like Tesla. Because on the front end, the feature side, they are much more technologically savvy. They're much more pushing into connected, and Brian Gu said it, the smartification, right? Because the first phase was the electrification, now it's the smartification, at least in the China market. We still have 3, 4, 5 years before the smartification will hit Europe in any significant way. And then the United States as well. But by 2030, we should see the large OEMs offer some sort of mobility platform, is what I foresee. So.

Lei Xing:
Yeah. So I think the G6 in itself is this architecture, cost efficiency play that probably Li Auto talks about and what can be expanded or branched out from this architecture. So I think the G6 is a great launch, pricing wise, product wise, but Xpeng is going to need a lot more G6s to continue, to kind of like what Li Auto has achieved, 9, 8, 7, getting past the 30,000 delivery milestone, right?

Tu Le:
Rumor is they got 32,000 in June.

Lei Xing:
Yeah well Li Xiang, he said it in the letter that they did over 32,000. So.

Tu Le:
Congratulations, that's a huge milestone I think. It's taken four products, right?

Lei Xing:
Three products, well plus the ONE. So ONE alone did 200,000 units. And then he's sticking with that 1.6 million by 2025.

Tu Le:
That's a massive number, right?

Lei Xing:
Which basically means doubling of sales every year in the next 2 years.

Tu Le:
For those that don't follow the automotive sector that closely that means not only increasing demand for current products, launching new products that have significant demand, but also building out a service sector, a customer service, not a sector, but a customer service competency to support that 1.6 million. So the level of complexity to get to 1.6 million is not just a buy sell thing from a customer standpoint, it's also being able to build out your charging infrastructure, it's also dependent on all these other factors, because they're going to be at almost three, they say 300,000 this year, right?

Lei Xing:
Yeah. 

Tu Le:
Secretly they're targeting 400,000.

Lei Xing:
Well, Li Xiang, he denied it, but it could be smoke.

Tu Le:
But in 2 years, well that was a trial balloon, right? They're like 400,000. In 2 years, they want to quadruple that to 1.6, right? So. That's like Tesla early days of the Model 3, Model Y growth, two consecutive years of like more than 100% growth. So very interesting times.

Lei Xing:
So we're good with G6. Yeah, and I think just as like I said.

Tu Le:
You're going to go down to GZ and check it out?

Lei Xing:
No, I hopefully I get something in Beijing that I don't have to.

Tu Le:
Man get out, stretch your legs, go down.

Lei Xing:
Actually in Beijing, the OTA hasn't happened yet for the city-NGP, they said it's available, but you still need to update it, right? But like we need another G6, another G6, in order to keep this momentum, because you can't have one model flop or two, P5 kind of flopped and G9, right? So.

Tu Le:
And remember that G9 was never going to be one of their high runners because of the price.

Lei Xing:
Now, with the G6, you wonder how much of the cannibalization of G9 is going to be? Because G9 is in a price in the higher RMB200,000 to low RMB300,000. So.

Tu Le:
I think the pricing is okay from a separation, but the competition in between the RMB209,000 to the RMB350,000 outside of Xpeng products is also pretty fierce, so.

Lei Xing:
And remember Li Auto is coming out with their BEVs and lower priced EREVs as well, maybe the 6 or the 5 that are going to have the exact same, Li Auto is doing NOA media test drives the last few days, which is similar to the XNGP, and remember Li Auto, they're 1.6 million and…

Tu Le:
And it’s “mianfeide” (fee) right?

Lei Xing:
Yeah and 1.6 million is models above RMB200,000. So they're going to get into the Xpeng territory pretty soon. No time to rest. I'm telling you.

Tu Le:
So the breath of products from NIO, Li Auto and BYD, they're going to overlap significantly. Once NIO launches the Alps brand and BYD starts delivering on the Yang Wang and starts delivering on the F brand. We're looking at what traditional automakers have kind of done like a GM that had the Pontiac, Chevrolet, Buick and then Cadillac with Volkswagen with Skoda.

Lei Xing:
Yeah yeah, the multi brand play.

Tu Le:
And so they might, the Chinese consumer as they gain stature, as they gain salary, they might move into from a BYD to an F brand to finally a Yang Wang. But they stay with the BYD brand. That's the whole vertical integration of branding, traditionally known in the automotive space. And Volkswagen has 8 or 9 brands that you can kind of move into. I think there's probably a sweet spot, three or four brands may be at the most, especially as China as the Chinese EV companies, they might have export only brands as well. So.

Lei Xing:
So I think this is an evolution which in the long run, like I said, you're going to see brands shrink, not expand, right? In the long run.

Tu Le:
I think so too, I think it's way too difficult nowadays to have 8 or 10 brands that you're trying to manage. Because what we're seeing with Volkswagen Group to a lesser extent is too many mouths to feed from an investment, and branding and technology and innovation standpoint. So speaking of Volkswagen Group Lei, what are your thoughts on Duesmann getting got?

Lei Xing:
It’s the last of Diess’s deciples or something? House cleaning, whatever, and now it’s Blume’s disciples, I guess, or lieutenants, because he had Peter Bosch from Bentley now running CARIAD and Bentley, remember is part of the Volkswagen Premium Group, right, which Blume headed. Now you have the new Audi CEO which was at Porsche, right? Yeah, so somebody had to go.

Tu Le:
I'm pretty certain that a lot of that had to do with the struggles that Audi has in China.

Lei Xing:
Oh yeah, big time, big time. Not only in China but globally.

Tu Le:
But unfortunately, and you and I have a friend in the Group company, we were hoping for an external leadership change, but he brought in another car guy. I think that's a mistake.

Lei Xing:
He's a product planning guy. So I heard somewhere that within Volkswagen Group, there's these different tiers of, let's say, respect. And I hear that the product planning guys are on the top, let's say. So they, so hopefully, this will work out.

Tu Le:
But you know, man, Satya Nadella said people only respect innovation. So I’m going to say this. I wrote in my newsletter right before the announcement dropped publicly. I wrote, the panic button should have been pressed a couple of years ago. Now it's time for management changes. I'll take a little credit for that, but cause Duesmann was talking, we're going to shrink our product production or product planning cycle from 48 months to 30 months, 30 months is still too long unfortunately for the China market anyways. But let's move on to Qiyuan. Is it Qiyuan or Qiyuan?

Lei Xing:
So by the way Chang’an right at this moment, I think they just did a delivery event of the new S7, which I had tweeted. I saw one on the street, the Deepal S7. 

Tu Le:
Shen Lan, for everyone else.

Lei Xing:
No, it’s a BEV, it’s a BEV because it's got that plate that says “chun dian” which means BEV. I think they did a delivery event tonight, I don't know, a 1,000 vehicles or something, it couldn’t have been 10,000, it’s like 1,000 vehicle delivery or something and then this Qiyuan is like a, I don't know if it's a brand, but it's supposed to be a series of new EVs that Chang’an had announced or mentioned in one of their like strategy updates few months ago. It's got a new logo, right? But clearly, it's the sedan, which is the Model 3, Xpeng P7, that segment trying to compete.

Tu Le:
So you know that Chang’an is trying to be a player. Theuy are coming strong, they got three brands now, Shen Lan, they have Qiyuan and the third one, what's the third one? 

Lei Xing:
AVATR and many others.

Tu Le:
The AVATR is building excitement for sure, right? Yeah. I had written in this week's newsletter that Ford must be feeling a bit of a cold shoulder because Changn’an is Ford’s JV partner. And the only thing they have to show for that is a not selling very well Mustang Mach-E.

Lei Xing:
I would put Chang’an kind of like if we talk about the centrally administered, so FAW, Dongfeng, Chang’an they are the three, but SAIC is the largest automaker. I would say there's a bit of rivalry between Chang’an and GAC because GAC earlier this week, they announced a flying car or eVTOL, right? Yeah. And then fuel cell MPV.

Tu Le:
It is amazing to see because what most western folks probably just below the radar or the SOEs and some of the products and some of the brands that they have you. You and I obviously live this stuff every day. So it doesn't surprise us, but there are the stodgy SOEs are really pushing the envelope on some of the products, some of the brands. With Chang’an it's with the help of Huawei, by the way, I think all three of their EV or new energy vehicle brands are using Huawei software/hardware stacks I believe right?

Lei Xing:
Definitely AVATR because AVATR is a Huawei CATL kind of joint play.

Tu Le:
But this is where you and I talk about new brands, new products almost on a weekly basis and this is where we point to how crowded and overcrowded things are.

Lei Xing:
Yeah.

Tu Le:
It's just hard to get any sustained sales and growth, because there's always something new coming out.

Lei Xing:
Yeah, even for you and me, the fanatics, even for me being here 10 days. Actually sometimes, I'm quite busy doing family matter and I don't follow every news every hour every day and I see on the streets, some new car or new brand. And I'm like, oh this is what this is. I'm still learning, right? That's how crazy it is.

Tu Le:
Let's be honest Lei, we cheat because we help each other, right? We, you and I, because it is overwhelming. When I was there, it was just really hard to keep up. And this is my cheat sheet talking to you on a weekly basis and kind of you helping me on the Chinese side for some of the stuff that I’ll miss, but it is not easy to keep up with it. And most people can't, if I’m being honest. And this is where I'm going to kind of rant here. I'm going to vent a little bit. And this is where some of the media are a little bit lazy because they are going to people that might have had an understanding of the China market 10, 12, 15 years ago, but have no idea what's going on. Outside of what BYD and not even Tesla, these people don't understand what they're doing, what Tesla is doing in China. Yet they get a lot of air time, which is kind of disappointing to me.

Lei Xing:
But that's why I say, for me, I’m really appreciative of the opportunity I have and of being here. And rather than talking to some of the PR people, I could just go to these stores and get a feel from people working there, right? Sometimes you find out different things.

Tu Le:
The PR people are great, but they're not able to answer the questions that you and I would ask them right? So.

Lei Xing:
Or whatever is published publicly, right?

Tu Le:
And that's not their job. So it's fine, but. 

Lei Xing:
Yeah so I think for you and I, you've been here before for quite, during the pandemic. And now I'm here for a few months, just really lucky to and a lot of people can't do that. And even for the western media that are not being able to be on the ground.

Tu Le:
So Lei we are at 9:50, so let's open the room right now.

Lei Xing:
Oh, shoot. Time flies, man.

Tu Le:
Anyone who has any questions, comments? I see the person that had raised his hand earlier is not in the room anymore. So count Volvo, Polestar as two companies that have also now confirmed that they will be moving over to the NACS plug, that…

Lei Xing:
Volkswagen.

Tu Le:
That Tesla popularized, right? Has Volkswagen confirmed, or they said they're kicking the tires, right?

Lei Xing:
I think it's pretty much a no brainer. If Electrify America…

Tu Le:
Is looking to standardize it right?

Lei Xing:
And I think many more because the more comes on board, then the rest of the pack will kind of feel left out, right? It's kind of that network effect, right?

Tu Le:
The other things that I wanted to talk about, so New York City is rolling out a congestion tax, I think that's worthy of note. So it's going to get more expensive for private passenger vehicles to drive into city center. We're talking Manhattan.

Lei Xing:
So speaking of that, I have a good example. So I’m staying at this apartment from my wife's friend and she helped us get a parking pass for RMB80 a month. This is one of the older residential areas which…

Tu Le:
That’s like $12. Or $13. 

Lei Xing:
Which do not have an underground parking. So the other day I came home late, like really late, like almost near midnight and I couldn't find a parking space. So I had to get out and park at a public parking and it cost me RMB82 that night more than what I pay the whole month. That's how crazy it is.

Tu Le:
You must be in an old complex that doesn’t have…

Lei Xing:
Older complex.

Tu Le:
When we say older, it can't be more than 30 years old, basically. So Lei that's all I had today on my side, anything else you want to talk about?

Lei Xing:
No, I’m good. I think that…

Tu Le:
You need to keep an eye out for the Song Ls. I want to see what they look like? In production form, they won't be out for another couple of months, but.

Lei Xing:
Yeah the Song Ls.

Tu Le:
You know the almost production concept at Shanghai Auto I liked a lot.

Lei Xing:
It was one of the better models that we said was one of the highlight models. 

Tu Le:
And it's RMB300,000 so it's going to be one of the most expensive for BYD too. So. Oh geez. Cool guys, everyone. Thank you. Good morning, good afternoon, good evening. We will talk with everyone next week.

Lei Xing:
Yeah, 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.