Episode 177 - REVISED: EU Tariffs, XPeng and Zeekr Earnings, Autonomous or Intelligent?

Tu and Lei start the podcast out with an update on the EU tariffs on Chinese EV makers, this time including Tesla. Some initial tariff rates were reduced but not substantially. 

Tu moves the conversation over to the improvement in XPeng's earnings and the momentum they may have when launching the Mona M03.

The discussion moves over to who the global players are in the autonomous vehicle space and when thinking of China the lines are blurred with the autonomous vehicle companies competing directly against the OEMs who are either developing their own intelligent driving system or are partnering with tech companies to integrate a solution into their NEVs. 

They both touch on the Volkswagen ID.Buzz van launch and how the specs just don't match anything out in China that's comparable. They also briefly discuss the Chevy Tahoe pricing that was revealed this week in a picture posted to social media.

Tu and Lei close out the show by unpacking Zeekr's earnings call. 

Transcript

CEM #177 Transcript
 Recorded 8/22/24 

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 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 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.substack.com which I encourage you all to do. A northern Lei. Can you please introduce yourself?

Lei Xing:
Yes, good morning. This is Lei Xing, your co-host, former chief editor of China Auto Review, and this is episode #177. And I'm coming to you live from a place called Canmore, in Alberta, Canada. Geographically, I'm on mountain time, so I'm 2 hours behind you and an hour ahead of West Coast time. It's 8 am here. And the reason I'm here is doing some traveling and camping in the next couple of days in the Banff National Park vicinity, region.

Tu Le:
So hold on. 

Lei Xing:
That's why we're doing this today, because I won't have cell. And…

Tu Le:
Are you camping in a tent? Or are you camping…

Lei Xing:
Camping in a tent for three nights.

Tu Le:
So no showers.

Lei Xing:
No showers. 

Tu Le:
Oh man, that's, “hen li hai” (serious) man.

Lei Xing:
Yeah there’s a place called, it's not too far from Banff, it's called the Two Jack Lake. There's a bunch of lakes in this area. 

Tu Le:
It’s got to be pretty, it's got to be beautiful.

Lei Xing:
It is, it is, I'll post some pictures on Twitter, but anyways, so you know, chalk it up a win for Tesla and the European automakers as far as the EU tariffs on China BEVs are concerned. Wouldn’t you say?

Tu Le:
Let me stop you there, Lei. But they are, so they still have until November to negotiate it down. I guess I'm not sure what this. Is this the final number or percentage?

Lei Xing:
No I think as far as Tesla and the European automakers are concerned, I think they're happy. I think MINI is getting that 20% or 21% was it?

Tu Le:
Yeah 21.

Lei Xing:
I think it was reported by Reuters, but the lower, I guess, benefit from the lower tariff and Tesla getting the 9%. I wouldn't think that they want to get it any lower.

Tu Le:
A quick reminder that there's already a 10% tariff, so total would be 19.

Lei Xing:
So there still could be possible tweaks, but these tweaks are, right…

Tu Le:
On a fringe.

Lei Xing:
It's on a fringe. It’s a matter of 17.6% to 17%, right? 37.6% to 37%, right?

Tu Le:
Are you clear which other OEMs did not cooperate outside of SAIC?

Lei Xing:
So there was a list that was put out by the EU Commission in June when this was first announced. I remember from top of my head, NIO and Xpeng were included in that list, but Li Auto was not. So NIO and Xpeng will get that 21%, right? And then SAIC and a bunch of others that were not, I guess in the list, will get the highest tariffs.

Tu Le:
It's important to remember that Li Auto doesn't officially ship outside of China yet. They have vehicles in the gray market, because I've seen pictures of them in like Kazakhstan or some crazy places. So they get shipped out, but they're not official Li Auto exports.

Lei Xing:
Yeah, so o it's 21.3% for the cooperating companies and 36.3% for all the other ones. So I guess I mean you do see concessions being made, especially on Tesla, on the EU automakers after lobbying, weeks of lobbying, and no retroactive collection of the duties.

Tu Le:
And hybrids aren't touched.

Lei Xing:
No. And they, I think the EU Commission also put out a kind of a question and answer, which to be honest, the jargon that they've used, I couldn't understand, I mean, like, basically, for not retroactively collecting the duty, basically was because of legal, legally, it wasn't doable.

Tu Le:
Right. So they wanted to, but their lawyers said that it would be a tough fight in the courts.

Lei Xing:
Yeah. And so really what has riled up the trade ministry and other ministries from China is because I think part of the reason is because of these varying tariffs, rather than, let's say, treating everybody equally, it's not a, the tariffs are not created equal. And then you wonder why someone like a BYD get the 17%, Tesla gets a 9%. What goes on behind. What the trade ministry has kind of complained is that it's not so transparent. But, right? Yeah.

Tu Le:
Let’s think about this Lei because Tesla, we have a factory in Berlin, BYD announced Hungary, Poland, and Turkey. SAIC, they only really export into Europe. So I'm not saying that there's a clear delineation between those that have invested in Europe already from a factory standpoint, but is that a coincidence, you know?

Lei Xing:
Right. Exactly, I mean they're leverage. And BYD has their own leverage. Tesla has their own leverage. Geely being owners of these European brands. All kinds of factors are going into this process, complicated process, which is not really transparent, it’s basically EU Commission’s.

Tu Le:
But Lei, you talk about transparency, and the irony of it is China's complaining about transparency. So it rings hollow. First of all. Second of all, we talked about this or I've said this, the pendulum is swinging back for all the unfairness over the number of years that EU companies felt that they were treated in the China market. The Chinese government wasn't very transparent about a lot of things. Despite that, these EU companies made billions of dollars. The Chinese EV companies have an opportunity to do that in Europe over the next several years. And so again, with the Chinese complaining about transparency, it's a bit rich.

Lei Xing:
I agree. I mean it’s, how do you look at this from various perspectives? From the EU automakers’ perspective, from the China EV Inc.’s perspective, from an investment perspective, from a localization perspective, from the details of you know for Tesla, I think the Q&A they mentioned about the type of subsidies, investigation, and they found out it was different. I mean yeah. But that's what it is. These are probably, first of all, I don't see that these member states will vote and this will be repealed, of the 65, was it the 65% majority, if this gets…

Tu Le:
Yeah this is baked in.

Lei Xing:
I don't think that, yeah, this is, and the Chinese companies or whoever are exporting into Europe from China, they’ll just face it and start preparing. And I think and when you go to Xpeng earnings, Brian talked about it, Brian Gu in the earnings about just take what it is.

Tu Le:
So it seems that Xpeng is now the second or one of the top exporters, at least from a number of markets, because I read or heard that they are now exporting to 30 markets at least. BYD is number one, obviously exporting into over 80 markets. And so, but BYD is not resting on their laurels. They have invested in Brazil. They've, as I mentioned earlier, they're looking at manufacturing in Turkey, Hungary, I think, was it Poland? And they're looking at Indonesia. They're looking at India, or they already ship kits to India. So their expansion is not slowing down. And despite these bumps in the road, I think they are very, very determined to be selling millions of vehicles outside of China within the next few years.

Lei Xing:
So Xpeng had the initial hiccup with the international/overseas operations, and now it looks like exporting as far as the volumes per month concerned, seems to be up there, quite an important factor, as Brian mentioned, and the other one being the MONA M03, which He Xiaopeng said is going to achieving new record. Actually, maybe Brian said it, new record of, I'm expecting that they're going to do 10,000 MONA M03s in September, because the launch is next week, next Tuesday, right? So September will be the first month and the last quarter (month) of the third quarter.

Tu Le:
Did they ever post how many orders they got?

Lei Xing:
No, I don't think I've heard those numbers, but based on the Q3 guidance, right? It's obvious that they're going to do 20,000 in September. And probably half of those will come from the MONA M03 if Brian says that it's going to be a new record.

Tu Le:
Since we're talking about Xpeng, let's just talk about their earnings. I was actually interviewed by CNBC, talked a little bit about it. There was 30,000 units shipped in Q2. Guidance for Q3 is around 40-45,000, MONA is going to take up some of that volume, as you mentioned, Lei, loss has narrowed, margins growing.

Lei Xing:
Margins improving.

Tu Le:
Four consecutive quarters it's improved. And larger portion of their revenues came from the partnership with Volkswagen Group. So that's likely going to dial up even further in the next couple of quarters. They said that the P7+ will have Level 2 technology from an intelligent driving standpoint, but have Level 3 capabilities, that was a little confusing to me.

Lei Xing:
But I mean the tone was positive. I think that the two key factors I think Brian mentioned, as we talked about, is the MONA M03 and the export volumes, right? And then speaking of the MONA M03, Xpeng feels like, all these, every time they launch a new model, they expect it to be a blockbuster. It's been a year since the G6 launched, and the type of expectations, the type of fervor that is put into the MONA M03 is making the G6 really old.

Tu Le:
Let's not forget the ONVO either. ONVO and MONA are sharing spotlight.

Lei Xing:
While I mean Xiaomi is boasting out there, right? Their Q2 deliveries of 27,000 units, which, if you remember, when they launched on March 28, they had that posters keep coming out of how many orders they got. And then like I think the 27,000 units is the number of orders they received in less than 24 hours. So think about it. They've only delivered that early number of orders in 3 months. And Lei Jun was pretty confident that they're going to get to 100,000 by November and 120,000. And he said it right? He posted on X “the best quarter ever for Xiaomi” as a group, financially speaking, it was also the first time they published the automotive, the EV unit business, and 15.4% vehicle margin. I think it's already higher than Xpeng, higher than NIO, higher than even Tesla, I think for vehicle margin, lower than Li Auto and BYD but BYD’s includes the battery business. So there's kind of a comparison. I was just, before coming on, Lei Jun was posting that he's been visiting BYD, he's visiting Xpeng as a matter of fact, the reason being He Xiaopeng was the founder of UCWeb 20 years ago, which Lei Jun invested. I think he invested about RMB4 million for 20% share. And UCWeb was purchased by Alibaba for $4.3 billion dollars, I believe. So Lei Jun’s investment into He Xiaoping’s previous business, he got 1,000X return. So this is kind of the dynamic that's been happening and Lei Jun’s like I've been visiting all these, my competitors. And they convinced me and wanted me to go into the EV business. Nowhere does that happen than in China? I mean do you see while we did see a picture of Peter Rawlinson and RJ Scaringe with the Ferrari CEO, but you don't see Elon Musk out there posting videos and saying oh I'm visiting Rivian, I'm visiting Lucid. It doesn't happen that way in the western world.

Tu Le:
It doesn't happen with Elon or the legacy automakers.

Lei Xing:
But this kind of frenemy coopetition dynamic is quite interesting in the Chinese market. Even though it's a bloodbath.

Tu Le:
I thought about heading out to Monterey, but family stuff prevailed. But I might go next year. I've gone a couple of times, but…

Lei Xing:
Yeah, and then I mean YT Jia was pretty active on social.

Tu Le:
It is funny that Faraday is still a player when HiPhi is not, when Evergrande is not. I don't know if that has anything to do with being in the United States versus China. But they refuse to go away. So kudos to YT Jia for continuing to pursue his, and Fisker obviously, pursue his dream of becoming a huge player in the intelligent, smart EV space. But wow…

Lei Xing:
Yeah. And they will be announcing that China U.S. bridge strategy and a second brand, see how that goes next month. Money grab?

Tu Le:
And we should, so a lot of things happened this week Lei, and since we were a day early than in earlier than normal, I'll summarize some of the things that I was looking at. Ford announced a reconciliation, a write down of their EV strategy. The ID. BUZZ was launched in the United States. Numbers were announced pricing, range. ZEEKR had their earnings call, and then Waymo had an announcement. So these are some of the things that we can talk about. Let's start with the Waymo. And I know that Josh, you had raised your hand, but what we normally do is, please, first of all, welcome, because I think you're a new listener. And then second, we normally wait till around the 40, 45-minute mark. We started at around 10 o'clock, so we'll take questions and comments at that time after we're done giving a summary of what we thought was important this week. But Lei, you probably saw this, but let's summarize this for the audience. They provide 100,000 rides a week out of SF, Austin, Phoenix and LA, that's doubled since May, which was 50,000. They're going to invest another $5 billion into Waymo and we're talking Google or Alphabet will be, and they have around 700 vehicles in their fleet, which to me sounds like almost the same number as a Baidu in China. Finally, their Gen 6 system is going to be integrated in the ZEEKR, contract manufactured robotaxi that we saw late last year. Was it late last year, Lei?

Lei Xing:
Yeah it was November, Halloween time.

Tu Le:
And for those wondering, because of the connected, intelligent driving restrictions that the Biden Administration might be putting on Chinese EV companies entering the United States. What we were told or what I was told was that ZEEKR makes the robotaxi, ships it to Waymo and then Waymo adds their tech bits. There's no. So Waymo still does final assembly on the autonomous driving or intelligent driving stack once they receive the vehicle from ZEEKR. So if you were wondering or curious about how would that work, that's what we were told. So what are your thoughts on? So and it's important because you and I we've been in Ponys, we've been in WeRides, we've been in DeepRoutes. We've been in Apollos, even Cruises in San Francisco. What are your thoughts on these numbers and Waymo’s ambition in the United States?

Lei Xing:
Well they are clearly the leader and again, going back to China, if we talk about the NOA race, we talk about the ADAS, right? It's a tossup. But here in the U.S., it's clearly Waymo is winning on that front, the robotaxi front, whatever the numbers that they've achieved, the milestone they achieved. But really the China factor is this new 6th generation Waymo robotaxi with a ZEEKR body out there, being tested and going into service starting next year, I believe, which really is one way of the Chinese are coming to the U.S. Not something you can buy, but something you can experience. And then right, just on a robotaxi side of it in the Chinese market, right? We go back to Xpeng, in the earnings they talked about. There is actually a huge difference between a private vehicle achieving this door to door, point to point still Level 2, than when you try to move to the L4 space is an entirely different business model. I mean He Xiaopeng mentioned about it. And so it'll be interesting that what they think of it, the opportunities there, because they are developing a robotaxi, a model, not something that they'll run themselves, but provided to a platform like Waymo. That's my kind of the two cents.

Tu Le:
Agreed, they don't have a competitor, really viable, none that can write another $5 billion check. That's for sure. And so do they go it alone and compete against Uber ultimately? Or do they partner with Lyft or what do they do here? So.

Lei Xing:
Well, that depends on what the BYD partnership, the autonomous driving part of it that was kind of eluded. That wasn't clear because BYD when you think of BYD you don't think of BYD as robotaxi. They're still catching up on the ADAS NOA game, so that’ll be interesting, a different race.

Tu Le:
What do you think of the ID. BUZZ? “ni xi huan ma” (do you like it?)

Lei Xing:
I think it's almost like, we chatted about.

Tu Le:
Dude you don't have to be nice. You don't have to be nice.

Lei Xing:
No, I'm not trying to be nice. I'm just trying to compare and contrast. We privately chatted about the Chevy Tahoe that was launched in the Chinese market around the RMB700,000 price point. And we were wondering who the heck is going to buy that when you can, right, when there's so many, I think for the ID. BUZZ, there would definitely be clientele. Because historically heritage of this freedom, right? This cultural of the bus, right, hippy, west coast kind of the culture. I'm sure there will be customers, but it's probably going to be more niche rather than a kind of ID. 4 or other BEV models are on offer by the Volkswagen brand, more lifestyle. So I don't imagine significant volumes, but really I mean that the range is really paltry, right, 230 miles right? 

Tu Le:
I think it can get, filled kind of cold weather, it gets under 200 miles of range. That's what I think.

Lei Xing:
But remember about the California weather and this is probably going to be more using those type of states and regions, right? Where weather shouldn't be that much of a problem.

Tu Le:
Man, I wanted to really like it, but tech specs is just not great. I think the simple interior is fine. The exterior looks great to me. But again, when most players are giving 300 miles of range and you come out with 234 for a vehicle that's meant to do road trips. That's the key here. It's not some hatchback that you drive in the city. It's meant to do road trips because that's the whole heritage that you're talking about. And so there's a bit of irony there. It's a 91-kWh battery. I don't know if it's LFP, I don't know whose source, who the supplier is, yet. We'll find that out. But and again, it'll be niche, but you would have thought that the GMs, we, and you had mentioned the GM thing. So there was a picture that was sent to us from a friend in China. It was announcing the Tahoe and the Suburban being imported on the pricing. And they're basically $80,000 and $90,000 vehicles. And so Ash from Geely, he actually commented on a tweet that I put out there and said that the lower-tier guys will love it. It'll be niche, but the lower-tier guys and I completely agree because the roominess and how it's getting imposing presence on the road, the bosses in tier-2, tier-3 cities will love it.

Lei Xing:
Heck, like any vehicles that you do not see normally, that are not commonly found, there will be a way to get them. There will be a way that you see them. Case in example is the Cybertruck, getting that green license plate in Tianjin, right? So nothing is impossible.

Tu Le:
But I think it's a lot easier to do that in Tianjin than it is in Shanghai or Beijing. Let’s just say that, let’s just say that, but you can't hide it anymore. Anything strange or unique in this world? When it comes to automotive, it's automatically posted on social within hours of days, if not hours. So.

Lei Xing:
And also, the Tahoe is a lot bigger longer than Li Auto L9, I think, that's might be one model to compare to if we talk about competition. But it’s huge right?

Tu Le:
Yeah that's the only thing I can think of.

Lei Xing:
It’s a school bus. The Tahoe is a school bus.

Tu Le:
So there is nothing else in the market. And if it wasn't for the Biden or U.S. Presidents using Tahoe and Suburbans, I could totally see this being a Chinese government vehicle, but it would never happen just because of that. The last thing that we can talk about Lei is we heard of the challenges for Volkswagen. We kind of heard the challenges for General Motors last week. Now, Ford is talking about pushing out their three-row SUV til 2027, delaying production of a few different things. And now the skunk works team is working not only on a sedan, but they're working on a small truck in California to pull in that launch date to 2025. Both of those EVs look to be built in Tennessee where they'll also be building cells. So what are your thoughts, man?

Lei Xing:
It’s night and day, right? If we look at the Chinese market, if we look at the U.S., Western markets, China is pushing, pushing and pushing, the F1 jargon will be push, push, push, and in the west, it’s box, box, box. right? For those that watch F1 will know what I mean. Rolling back, keep rolling back. I mean Volkswagen, right? The future projects delayed and delayed again. Whereas China, I mean look at ZEEKR. We go back to ZEEKR. It's right. We talk about for the best, China speed at its best and its worst launching a product. New product refreshed versions of a product. How long that takes, it’s at the completely different spectrums. And that's the basically the market competition dictates. And it's 149, 139, 140 brands, EV brands in China versus how many in the U.S., handful.

Tu Le:
I just tweeted this because just doing a little homework before the show, ZEEKR had their earnings. Anything that stood out to you? Let me summarize real quick.

Lei Xing:
First of all, their margins was also pretty good. I believe vehicle margin, let me, so ZEEKR was 14.2, vehicle margin, slightly below Xiaomi.

Tu Le:
It’s still healthy but still healthy.

Lei Xing:
Yeah. I think what was also important was An Conghui, Andy. He had to respond to that uproar of customer is not happy, right? That the 2025 model edition was launched less than 6 months after the 2024 edition. So he said that all of the new versions that we've launched this year, we're not going to have an update or a refresh for at least another year. So maybe that was a one-time thing that happened this year and who knows, but don't take his word for it.

Tu Le:
When he says that, what they can do is call it a different trim package. There's different ways to launch a new product without calling it in a new product.

Lei Xing:
And then third, which is another topic that's very relevant to the Chinese market, is ZEEKR launching that full size SUV in Q4 of next year, coming in BEV and a what they are calling the super hybrid version, which includes the EREV. So ZEEKR is moving over to EREVs, and then we heard AVATR announcing their Kunlun EREV technology. People still following Li Auto’s footsteps. And then the general plug-in hybrid, right? If we include the EREVs into the plug-in hybrid.

Tu Le:
So I posted something on threads because I think Domenick from Batteries Included that kind of posted his response or his thoughts on ZEEKR’s earnings. And I said that they are launching two new vehicles by the end of this year, ZEEKR is, and then to your point, mid-2025, they're going to have a flagship SUV that's a hybrid. I wrote the legacy automakers would have troubles keeping up with this production schedule or this launch schedule from ZEEKR. Now multiply that by at least 25. That's the Chinese EV market.

Lei Xing:
So ZEEKR has the 7X SUV that's launching in September. The MIX that was unveiled at the Beijing Auto Show is launching later this year. They have another shooting brake, which another fad becoming a fad in China shooting brake based on the 007. And we know the ET5T, we know that NETA recently launched a shooting brake. It's about these products, they are continuing to. It's like a tsunami, right?

Tu Le:
Remember, we're looking at Q3, Q4 mad dash to end 2024 on a high note from a sales standpoint. So it's going to start getting really exciting right around the time our boys, or our kids go back to school. The one thing that I wanted to talk about Lei really quickly before we open it up, actually, let's open it up. Anybody has questions, comments? Please feel free to raise your hands.

Lei Xing:
And then we should talk about NIO a little bit, but go ahead.

Tu Le:
No, go ahead, let's start with NIO. 

Lei Xing:
No, that's my last topic that I think I wanted to talk about because of this Power Up Counties, “xian xian tong” which basically in Chinese means county to county everywhere in China. And so kind of we should talk about the debate. Their goal is basically to have a power swap station available in, by the end of next year, in 2,300 county level, counties in China, 2,300 counties. So for those that may not be familiar, so the county is a level below city in China. There are roughly, let's say around 2,900 counties in China and these counties are in turn they have different terms, it’s very difficult to translate them into English, but these counties are broken up into various levels of counties, but they're all known as counties. I mean that's, right, and then having, I think it was also having this charging available, NIO’s  own charging available in all counties by June 2025, pretty aggressive, pretty ambitious. And then the other two things were the 1,000 power swap station production capacity plant that they're putting in Wuhan and the ability to kind of join in kind of like, is that a franchise that you can invest in it and then share revenues like a partner, while at the same time, I think NIO is really, I think, in the investment community on the street, their share price has been stuck around $4. When do they achieve profitability, that has been pushed back? I don't think it’s happening this year. So this keep investing into this infrastructure, is right now, it is…

Tu Le:
You know, let me compare and contrast that because Xpeng, it seems like Brian and He Xiaopeng have a burden or weight lifted off their shoulders because they seem very optimistic about the future. Li Bin, also always very optimistic, always very positive, but there seems to be more burden on NIO. I'd like to think that because Xpeng has Volkswagen as a backstop. LeapMotor has Stellantis as a backstop. And that Lucid has the Saudis, Rivian has Volkswagen. Maybe the pressure is on for NIO either to find a partner or try to push towards profitability earlier, because they're still independent from a partnership standpoint with a western OEM.

Lei Xing:
And going back to Xiaomi, comparatively, the part of the reason why they're getting that high margin so short into their EV business is, first of all, they don't have the same cost structure, cause they're going to get, I mean you've been in the business, the suppliers, the cost that they're going to get from their suppliers is not the same as the other ones, right? Xiaomi gets that leverage. So that's kind of the difference part of it. But NIO, I mean there's so much still so much expenditures, R&D, investment into this infrastructure.

Tu Le:
Yeah, it's as simple as Lei, the sourcing team at Xiaomi already buys transistors, resistors, PCBs, silicon. So they have the relationships. They have the purchasing power for a lot of the existing supply base, that helps them move quicker, number one. And number two, avoid making simple mistakes.

Lei Xing:
The savior for NIO would really be, again, Volkswagen Xpeng, Stellantis LeapMotor, the savior for NIO is really, when do these battery swap partnerships that they’ve announced over the past how many months and years?

Tu Le:
The six partners you're talking about, right?

Lei Xing:
At least if not more, when do these help them on a let's say, a revenue basis.

Tu Le:
Yeah when you start seeing that on their balance sheet.

Lei Xing:
Because Xpeng has already seen Volkswagen partnership revenues on the earnings, right? And that's likely going to increase as that new SUV launches in 2 years. All of the Volkswagen branded BEVs using that new architecture. But NIO doesn't have this, for now.

Tu Le:
There's always that rumor about Merc, but Merc seems to not want to move over to swap. So is it ultimately going to be up to them long-term? Maybe not in the China market, but there's been stranger things that have happened, right? Like to me I was a bit surprised when the LeapMotor Stellantis announcement was made. So it wouldn't shock me if NIO found a partner, but there's not many left. There's the Japanese, there's the Koreans, and then there's Merc effectively. Now, the last thing I wanted to talk about Lei before we end, and I don't see anyone who raised their hands, is with the announcements from Ford Volkswagen GM kind of struggling in the China market and slowing down, at least Ford and GM slowing down their production plans or launch plans for EVs. I think there's this opinion from certain folks that that’s okay. They don't need to go so fast, they need to be profitable, they need this. They have time. I guess the argument is being made that yes they have time. I don't believe they do and I'm not looking at just the Chinese EV companies, but I’m also, or not, let's just say Chinese or, let's just say EV startups, the Lucids, the Rivians. And neither one of them alone are going to put GM out of business, but remember also that there are technology companies. It's not just automotive versus automotive, automotive versus EV companies. There's Amazon, there's Waymo, there's Apple who will come back into the space at a certain point in time in the future for sure. These companies are also entering in different ways. So the competition is not only just with the traditional automakers and the EV startups, but it's with the technology companies. So this idea that if they slow down their EV launches, then they still have time, I'm fearful that they're going to limit their ability to compete in other markets that are moving faster.

Lei Xing:
Yeah I mean how do you strike the right balance?

Tu Le:
Honestly, man, if I'm a Ford employee in Dearborn, I'm like, why can't we do that? Why did you? This is the head scratcher to me, they have thousands of engineers. If you can't do it in Dearborn, you got to then as from a leadership standpoint, you got to change the culture in order to do it in Dearborn. Or else what are you going to do with all these thousands of people? Anyways, I'm on my soapbox.

Lei Xing:
I mean as we talked about the EU automakers and the U.S. automakers, they're different. We have to look at them differently, right?

Tu Le:
For sure.

Lei Xing:
The dependencies on the Chinese market are also different. And their own situations, North America dominated SUV trucks. It's difficult to push that China speed button when you have that in the back of your head. So sometimes you get complacent. And I mean like Jim Farley, he's pretty outspoken. And he's praised by even Elon Musk, right? 

Tu Le:
But it's just going to be really fun time if you're not working at a legacy OEM, to be in the space, especially if you're setting the pace, as opposed to trying to keep up. And I think the sooner these legacy OEMs and I believe that they feel that they're doing that right now is making the tough decisions, pulling in those tough decisions. Like Ford said, they got to write down $400 million. They made these commitments. I don't know when or who or what made them make those commitments 3 or 4 years ago, because I didn't see EV adoption moving at the speed of China in the U.S. or European markets. So it's a bit of a head scratcher, but that's all I have. Man. I don't see. There's one comment. And Josh is not in the room anymore. Any opinions on class-8 EV global market? Do we know which countries or markets will adopt quicker? Obviously, China is going to adopt that because they have the battery cell capacity. They are already swapping some class-8. I don't know how that works globally, because class-8 in the United States is like 53102 t, like the large trucks. And they don't have those in China. They're not the same size. I don't know how that works. Actually that's something that I should learn about. I think electric, I mean we talked about Windrose a few episodes ago. Tesla truck, Lion Electric, Torc is it Robotics or something like that? I think they're building class-8 trucks. Volvo is working on clean energy trucks. I see China and Europe kind of leading the way, United States being a laggard. But that's all I have man. So unless anyone has any last second questions, we can end the show.

Lei Xing:
It was pretty funny that Li Bin and NIO kind of got viral over that new video game. Did you see that? I mean way to get yourself into the headlines of Li Bin looking like one of the characters. Black Myth Wukong.

Tu Le:
It's funny because Li Bin and He Xiaopeng have been in social media a lot recently, but the OG and the expert is Lei Jun. He's, a lot of his videos get tons of views. So. Anyways, hey, everyone, thanks for joining us a day early. I actually don't mind this time, but let's think about it Lei, you enjoy your camping and being off the grid, and we will talk with everyone. 

Lei Xing:
So next week should be normal, next week should be normal.

Tu Le:
We'll talk with everyone next week. Good morning, good afternoon, good evening.

Lei Xing:
All right, man, bye bye. 

Tu Le:
Send picture, send pictures.

Lei Xing:
Yeah yeah.

Tu Le:
Bye everyone. 

Lei Xing:
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.