China EVs & More

Episode #192 - NIO Day, DeepDive on Battery Swapping, CES Preview

• Tu Le & Lei Xing

Share episode

Welcome to Episode 192 of the China EVs and More podcast! In this episode, Tu Le and Lei Xing dive into the latest developments shaping the global electric vehicle (EV), autonomous vehicle (AV), and mobility sectors. Key topics include:

1.NIO Day 2024 Highlights:

•The debut of NIO’s Firefly brand targeting affordable EV markets.

•The unveiling of the luxury ET9 model and its groundbreaking steer-by-wire technology.

2.Battery-Swapping Innovations:

•The rise of NIO and CATL as leaders in the battery-swapping ecosystem.

•Speculation on Firefly’s adoption of CATL’s standardized battery packs.

3.Industry Challenges and Collaborations:

•Honda’s potential acquisition of Nissan amid struggles in key markets.

•Insights into legacy automakers’ challenges in China, including GM’s decline and strategic shifts.

4.Technological and Market Trends:

•Advanced vehicle technologies, including autonomous driving and ADAS.

•CES 2025 previews featuring innovations from XPeng, ZEEKR, and Great Wall Motors.

With expert insights into market dynamics, government policies, and global trends, this episode is a must-listen for anyone tracking the future of mobility.

Companies Mentioned

•NIO

•CATL

•BYD

•Honda

•Nissan

•General Motors (GM)

•Tesla

•XPeng

•ZEEKR

•Huawei

•Foxconn

•Stellantis

Tu Le (00:

07.619) Welcome to the live China EVs and More podcast. We will open the room up at around the 40 minute mark to anyone who's keen to ask us any questions. So feel free to post them into X or YouTube. In the next hour or so, 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. Happy holidays, actually. We ask that you smash that subscribe and like button so you don't miss anything from us in the future. Also, I'm confident that and I are two of the best in the world at doing this, so help us get the word out about this show to others. 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 that at sinoautoinsights.substack.com, which of course I encourage you all to do. A in Beijing for the last couple of weeks, Lei, can you please introduce yourself?

Lei Xing (01:

26.242) Yes, sir. Good morning and good evening from Beijing. This is your co-host Lei Xing, former chief editor of China Auto Review, this is episode number 192. 192, I guess this is our last episode, live episode of this year, I guess. And happy holidays, exactly.

Tu Le (01:

46.725) could be of the year?

Lei Xing (01:

53.806) down to the very last few days of 2024 and very eventful ending to the year, not only in the China NEV space, but global auto industry as well. So the big news this week is the anticipation of NIO Day and the reveal of the firefly brand. And I'll be headed over tomorrow morning. Very, I, a few weeks ago, I wasn't planning to be even in China, but lucky that I'm here. So I get this chance to really, it's only my second in-person NIO day.

Tu Le (02:

44.474) You

Lei Xing (02:

53.512) The first one was seven years ago and that was quite memorable. So looking forward to that. I know you did you know.

Tu Le (03:

01.625) I've got a little FOMO, Lei I've been obviously invited to these NIO Days, but I'm gonna go to one of them. It's just so jammed up into Christmas, you know, so.

Lei Xing (03:

09.87) But yeah, sure enough. Yeah, sure enough that there will be hopefully NIO Days outside of China soon. Shall we talk about NIO Day first a little bit? firefly. And then I know that there's some data that I shared of this trade-in program that has been quite important in driving up

Tu Le (03:

21.829) I'm certain of it. I am certain of it.

Lei Xing (03:

44.068) sales the last few months.

Tu Le (03:

48.921) Let's do this, Lei. Because we picked up some new listeners, viewers over the last year. Can you please tell us what NIO Day is, what the history has been, and then we can get into what's likely going to be announced or unveiled in a week or a couple days after Christmas.

Lei Xing (04:

12.26) Yeah, so NIO Day actually to me, outside of the annual Beijing or Shanghai Auto Show is one of the most important and unique events of the calendar year. It's the annual celebration of the users. I'm hearing 20,000 owners are expected to be at this event.

Tu Le (04:

40.997) Really? Wow!

Lei Xing (04:

41.988) Yeah, that's what I heard. Including, as we've seen on social media, many owners outside of China have been invited to this event. And it's an annual celebration of the users. It's an event where there's new models. And this year, specifically, interestingly enough, the launch of the most expensive NIO, the ET9, as well as cheapest. Not cheap cheap, but pricing wise, cheapest. Not NIO, but yeah, the firefly brand. And then there's the NIO band, which is formed

Tu Le (05:

20.037) You 26.223) Highest value. Or no no no. Now I'm confused. How do I say it? Not value.

Lei Xing (05:

41.058) by NIO owners that will perform their annual NIO song, which this year, the theme is Together & Further in Chinese, Tong Xing, which means hand in hand going forward. And obviously the star of the show will be Li Bin again. He'll recap the year.

Tu Le (05:

57.283) Okay.

Lei Xing (06:

11.042) and then talk about the two products, the product and the brand. Obviously, the halo car that Herbert Diess said today in that video: "impossible. It's impossible." NIO, I mean, they just know how to warm up for this event, right? And then the firefly is really this fingers crossed for this.

Tu Le (06:

36.24) So the logo was unveiled this week.

Lei Xing (06:

52.856) Yeah, it's in the shape of a firefly wings with the light in the bottom. It looks like a Y. Yeah, I mean, it's youthful. It's the three things they just shared. Brand attribute is vivid, thoughtful.

Tu Le (07:

05.572) I like it.

Lei Xing (07:

22.292) and solid which respectively means handling interior space and safety of this brand and this model. So lots to look forward to. I think it's the most important and the crucial one yet for NIO because now there are a three-brand group. Lots on the plate. Yeah, well, yeah. But ambitious, awfully ambitious targets next year in 2025 and 2026. So we'll hear more about what the positioning of the firefly and the first model.

Tu Le (07:

54.019) Like BYD. 58.041) Well, technically BYD is 4 because of Denza.

Lei Xing (08:

21.162) what the new CEO is also very interesting. He came out of, Daniel Jin his name is, he came out of Shanghai GM and a veteran, industry veteran. And he said the most, this new car from firefly would mostly resemble the Megane, not the Megane, the Renault 5 e-tech yeah which was unveiled at the Paris Motor Show in terms of how it looks, in terms of the size so we'll have an idea yeah you have one yeah yeah yeah so, and the catchy phrase is that it's smarter than a MINI and more mini than a smart something like that.

Tu Le (09:

01.571) I got one. It's right there, Lei.

Lei Xing (09:

20.868) Tu Le (09:21.509) 26.756) You mean the brand name? 32.58) be well it's almost like a "bi Model Y bang" right so it's bi, means yeah, yeah, I won't get into it. And there just just a lot of these things building up to this event also early in the week, right, the milestone of 60 million swaps, 2,800

Tu Le (09:

38.777) Yeah, yeah, It's more catchy.

Tu Le (10:

00.997) That's amazing, 60 million swaps.

Lei Xing (10:

02.116) swapping stations and 20 million of those in the last nine months out of the 60 million, right? which means battery swapping works. It is a viable business model. It's happening and we just heard CATL make that big announcement two days ago yeah, yeah, and we should talk about this together for a moment because

Tu Le (10:

25.165) I was just going to mention that. 32.623) CATL threw their company AULTON, A-U-L-T-O-N.

Lei Xing (10:

38.436) Well, Aulton is separate, Aulton is another company. man, ambitious, crazy numbers, 30,000 to 40,000 long-term battery swap stations from CATL alone.

Lei Xing (11:

04.196) So...

Tu Le (11:

04.515) That is running on assumptions that swapping is gonna go mainstream, foreign OEMs are going to be signing up. There's no way that those numbers make sense with just the China market without other regions being involved. So, long-term, long-term.

Lei Xing (11:

28.248) Yeah, a caveat on calling it mainstream. I think we have seen NIO is kind of the pioneer that made it work. And now mainstream meaning from the perspective of CATL is following NIO's path to try to make it more mainstream. But I still believe, and I've told this to AP as well as Jill from TechNode, she wrote something about the CATL that, you know how in, people that have lived in Beijing knows this, all the ring roads, they have the main road, they also have the side road. So I describe this as the battery swapping still as a side road compared to the charging main road. But in Beijing, if you lived here long enough, you know that sometimes you want to go on a side road because it's faster. I think, yeah, those who know. that's the analogy. think, yeah, that's the analogy that

Tu Le (12:

47.877) Those in the know. Lao Beijing.

Lei Xing (12:

55.172) I want to compare that it's still not yet mainstream. I'm not sure if it ever becomes mainstream, but it's becoming an important part of the infrastructure.

Tu Le (13:

11.407) Well, I would put it this way, Lei. It becomes an option, a valid option for NIO owners, for ONVO owners, and whoever CATL is able to get on board long-term. And when you think about it, as a new EV owner myself, I... The fact that charging still takes a very long time and swapping, the thought of it actually is very, very, very attractive, specifically on highways. So even if it wasn't available in a lot of the city and urban areas, having swapping stations along the I-75 or whatever highways, major highways are in Massachusetts, that could be really, really attractive and... We always have to look at the history of the automotive space and how brands and OEMs kind of combine and partner because it's too capital intensive to go it alone on certain aspects and certain features. so I still think that Chinese EV companies will eventually work with American or the D3, D2, Stellantis is already partnering with LeapMotor. So I still see that as a long-term possibility for Ford and General Motors working with much closer with these Chinese EV companies. Not sure who yet.

Lei Xing (14:

51.364) I think what's happening at the same time in China and the U.S. in particular is NIO has signed up the swap partners. Well, Tesla has signed up their NACS partners. So I think both countries that is being, that is playing out of these third party OEMs trying to utilize and enjoy the existing, the NIO swap network and the Tesla supercharger network, that'll still take some time. So I think the issue is when do we see more other brands start swapping at the NIO battery swap stations, the utilization. It's not going smoothly. It seems that the current pace same on the NACS front, the issues that have had been happening.

Tu Le (15:

55.365) I think they're...

Tu Le (16:

12.151) The dongles don't work sometimes and Tesla is not opening up all their supercharging stations to their partners. so, well, it's always meant to be lumpy anyways, Lei, we know that. And to answer your earlier kind of point, or at least comment on your earlier point, as these Chinese EV companies get more more desperate to sell or be relevant in 2025, we should see them begin to embrace CATL or NIO on swapping. Now, does the Chinese government want multiple standards on swapping? Probably not. But if NIO and CATL, the two biggest players on the battery side and on the swapping side are gonna lead the way, I think that's probably the cleanest way to move forward in the China market for swapping.

Lei Xing (17:

15.652) Yeah, it's shaping up to be the big two at, you know, CATL and NIO on the swapping side as things look now. But interestingly is that the first 10 companies that CATL announced do not include NIO. So the wild card is since they announced the standardized #20 and #25, very small battery packs, right? 40, 50 kWh.

Tu Le (17:

42.244) Mm-hmm.

Lei Xing (17:

45.764) The wild card is do firefly come on board somehow or firefly continues with NIO's own kind of standard, that remains to be seen but CATL is obviously starting at a one to many, whereas NIO is one to one and I think this is the first time that really CATL has said and publicly said about the standardizing this battery packs number style in analogy to the gas station numbers, right? In China it's number 92 and 95, which is similar to 87 and 89 in the U.S., right? and

Tu Le (18:

44.069) And we always have to remember, that we're at around 50% take rate on BEVs and PHEVs in China. In order to get to that 80, 90% that Li Bin has talked about, that He Xiaopeng has talked about, we need to get into the lower-tier cities. And we then question, in the lower-tier cities, are the grids sufficient enough or modern enough to plugging in a bunch of vehicles, millions, hundreds of thousands of electric vehicles, so charging should really take some of the pressure off of that. And I see it as CATL looking to really quickly infiltrate some of the smaller tier cities in order to push that adoption rate even higher in a shorter span of time, as opposed to... Now, the lower-tier cities are also gonna invest in charging infrastructure, but I think this is kind of a way for them to really build into the lower-tier cities more quickly.

Lei Xing (19:

54.456) Yeah, and I think this overall, this is great for battery swapping. I don't see it as either or. I don't see it as competing. It's always going to be that coopetition or frenemy style of dynamic in the Chinese market. Because CATL is an investor in the NIO battery asset company. So somehow they're all intertwined at the same time. They're competing against each other. you know, chickens and eggs, right?

Tu Le (20:

33.081) And man, we could look at back on this in 10, 12 years and Li Bin could be crazy like a fox because he's building a foundation. We're at millions and millions of swaps, 60 million. And so it's a cumulative effect. Now he just needs to sell more cars, number one, to recruit more OEM partners, number two. Then, so I'll make a quick comment. Okay. Cause you said swapping works. Swapping works in Asia for sure. And not on the, not only on the passenger vehicles, cause we know about GoGoRo in Taiwan. Okay. Now there's an economics and there's a number of transactions that need to happen in order for the economics to kind of work out. In the Europe and the United States, cities just aren't as big. So swapping might not work in every single city in North America or Europe, but there's definitely, an appetite, think number one, number two, a financial model that works in Europe and North America. And so as battery pricing goes down. As more off-grid clean energy storage works even more, think we'll start to see swapping as an option. But to your point, the standardizing in order to get more transactions within each swapping station, that's going to be the important part. there's no, you know, outside of Ample, and we know Levi Tillman works for Ample, who

Lei Xing (22:

04.611) Mm-hmm.

Tu Le (22:

29.743) who I should mention, they're and cooperating with some entities in Japan. So Japan is even looking at swapping.

Lei Xing (22:

36.579) Yeah. 39.96) Yeah. And a few things I think worth mentioning. think the standardization is really Robin was really driving this message. Right. So for the battery swapping work standardization and then this ecosystem. Cloud. Operational side of things. Cloud is very important. Scale economies of scale. And then, you know, the probably biggest of them all is sharing, that if I'm a ZEEKR, I can swap. Yeah, I can swap at a NIO or if I'm a, you know, some other brand, can swap at a NIO swap (station).

Tu Le (23:

10.607) That burden, that financial burden. 21.71) One thing we should always remember too Lei is that these swap stations can act as energy storage systems too that back up the grid.

Lei Xing (23:

32.418) Yeah, that's also the balancing of the grid. Yeah, that's also very important. Yeah, and then I think the other huge, the ET9 is the halo car, right? It's got all the latest and the greatest. There's bunch of global debuts on this car that that's never been found in any car before, right? The steer-by-wire. Supposedly, NIO claims it's the first China approved or globally known passenger car with steer-by-wire. You had to actually apply for a permit from the MIIT to get approved. And then the obviously ClearMotion.

Tu Le (24:

27.301) So let me explain what steer-by-wire is. So basically there's no steering column there. It's just digitally connected and Cybertruck has steer-by-wire. So Tesla has famously adopted, because whether you like the Cybertruck or not physically,

Lei Xing (24:

38.18) Yeah. Yeah. Yeah. Yeah.

Tu Le (24:

51.533) design wise, it's one of the most advanced electric vehicles in the world. It's probably the most advanced electric vehicle in the world. And one of the reasons is 48V, they moved to 48V, but they also have like things like steer by wire. And some of the manufacturing on the body side has really changed the game and opened up a lot of ways to alternately build exterior panels. Anyways, Back to what we were talking about. So steer-by-wire needs to be approved by the MIIT.

Lei Xing (25:

23.694) Yeah, and then 28.63) And it has. And then the active suspension from ClearMotion obviously is going on. Yeah. Yeah. yeah. So, well, hopefully, you know, it's, they can continue supplying.

Tu Le (25:

35.813) Zack left ClearMotion. I don't know if you saw that. 46.853) So let me take a step back here. Let me take a step back here, Lei, because I'm in Detroit and I talk to suppliers, tier ones, tier twos, OEMs quite often. And think of it from the standpoint of how many steering column suppliers there have to be. And now that we don't need steering columns, but they might have supplied hundreds of thousands of steering columns. So they made enough money or generated enough revenue to be profitable. And so that's their main business. They might also do other things, a tier one, tier two, tier three supplier. And it's not just Lei Xing steering column company. It's who you bought components from to build the steering column, the raw materials to build it, the electronic components, the chemical components, and in the automotive space. Chemical means plastic because plastic is a chemical. so whenever you see, and it's a B2B thing, so we don't talk about it that much, but when you take out an entire steering column, that affects upstream suppliers like big time. And if you're not prepared to lean into a new technology in order to keep generating revenue, because...

Lei Xing (27:

04.516) Yeah.

Tu Le (27:

11.021) We also know that automotive is a very FOMO and a very copycat sector. if Tesla sees success in steer by wire, if NIO sees success in steer by wire, everyone's going to adopt it eventually.

Lei Xing (27:

28.554) same for the other way around. This end-to-end game, large language model, everybody is following Tesla's steps. I think I've heard that it looks like the FSD, the latest one with the one button push, parking to parking. Some of the Chinese media are saying actually that's the most advanced vision-only on the planet right now, even though we know things are pretty advanced on the ADAS side here in China.

Tu Le (28:

04.357) But they're speculating, Chinese media speculating because they don't have FSD in China yet. So I think they're relying heavily on what Tesla is saying behind the scenes. And I think part of that is Tesla just trying to build up excitement about their technology in order to try to carve out a place in the market that's already pretty crowded when it comes to intelligent driving systems in China. Let's move on, Lei, to that tweet just before we got on about year-end numbers from the ministry.

Lei Xing (28:

46.062) So the so-called consumer trading, the Chinese term is called yijiu huanxin, which literally means you're bringing in the old and change to the new, right? Yijiu huanxing. The Ministry of Commerce had a press conference this afternoon, gave out some latest numbers. And it looks like over half of, over 5 million combined this kind of the scrap and trade-in numbers. Now these numbers I have to double check because they could mean different things. don't think they actually mean sales. I think they mean applications submitted this year. And most of that is driven by this updated policy where you scrap old vehicle toward a purchase of an NEV, you get RMB20,000, toward an ICEV you get RMB15,000. This was increased at about mid-year in July, I think. And the over one million vehicles were kind of scrapped, recycled in November. And actually, they showed some good numbers for the joint ventures, for the foreign brands. They have really benefited.

Tu Le (30:

15.353) Yeah, I saw that.

Lei Xing (30:

16.74) Interesting, right? 35% of these added new vehicle sales came out of these foreign brands. So thank goodness. And then the retail sales, right? The automotive retail sales became kind of a net positive to the overall consumer goods sales, whereas earlier in the year, they dragged down consumption of the consumer's goods sales. So that just shows again really how important this policy has been to the overall economy. We know that, right, we were discussing about the kind of the housing market. It's not well, but, and I think also the Commerce Ministry hinted they're discussing about what to do for 2025. And I think these type of trade-in incentive policy will continue into 2025 just because of the economy and that they have worked.

Tu Le (31:

34.501) So that should always be in the back of people's minds, the Chinese economy. You're on the ground right now. I still talk to people quite often, obviously every day that are living in China. And yeah, the economy is still struggling. And so, yeah.

Lei Xing (31:

34.66) You 58.478) Challenging, you know, just be blunt.

Tu Le (32:

03.973) You and I just talked about the square meter pricing for real estate has gone down quite significantly in a lot of the cities and we are going to have an early Chinese New Year next year in 2025. I think it's January 29th is Chinese New Year and normally the Chinese government will roll out some economic incentives after Chinese New Year. We also know that He Xiaopeng, a few others have talked about the price war lasting through 2025. Don't see that changing, which means to your point, these incentives will likely continue in some way, or form. They might differ in the amounts. They might differ in the types of incentives. But and I would think we would start seeing some weak players, a la a NETA, a JIYUE, start to wobble in the middle or late 2025, if not sooner.

Lei Xing (33:

15.832) Well, I mean, we can talk about JIYUE a little bit. JIYUE, our good friend Frank Wu is there. And I do know a few other employees there that have basically posted on WeChat moments saying, it's sad, but I'm done at JIYUE. And the latest happening is their PR director got canned, because he posted something that was not helping the situation, apparently. And then what was good about this incident, and I would say maybe one of my top 10 news of the year, just because of the way that this kind of a sudden death is that Geely and Baidu, have agreed to cover the, yeah, they agreed to cover the kind of the payments.

Tu Le (34:

07.255) They stepped up.

Lei Xing (34:

12.322) the N+1 payments and continuing to support whether it's service or whether it's the system, the vehicle system for these owners. And interestingly enough, what has surprised me is the unity among the owners and saying that we support JIYUE, we are not going to kind of, you know, we like our cars, that these are really good cars. Yeah, and somehow this thing has turned both negative and positive in a way, because of the way that the sudden death and in the last few days Joe Xia has been silent. So.

Tu Le (34:

48.173) Yeah, and the brand, you know.

Tu Le (35:

07.727) Joe Xia, the CEO of JIYUE.

Lei Xing (35:

09.304) Yeah. Yeah. Yeah. It's.

Tu Le (35:

12.933) And I'm getting more and more of the impression that JIYUE is closing up shop. They're not really, I'm sure they're looking for a white knight to come in, but I get the impression that they're going to cease to be an automotive company. And we know that Geely and Baidu were trying to not get dragged into the mess, but they did step up and said, we're gonna pay for the social, I don't know, the financial support for the employees that are affected.

Lei Xing (35:

49.336) Yeah, the payments, social security payments, compensation.

Tu Le (35:

56.889) Yeah, I don't know how to say it in English, I guess, but... And so this is just a reminder, Lei, we talk about all these ridiculous numbers, 60 million swaps, 27 million vehicles, but when an individual company fails, there's real people that are affected by it. And, you know, I've spoken to a couple of people at JIYUE, or former employees and they're really depressed. They were drinking the Kool-Aid, to your point, know, these were not, the reason they went under isn't because the products are crap. Their products, to your point about the owners, are really good. well, yeah. But the.

Lei Xing (36:

45.828) Too good maybe. That's the irony. That's the irony.

Tu Le (36:

55.397) And the other really important part that should be emphasized is that they had two of the largest backers in China and they weren't able to make a business out of it, and so that tells you that Baidu doesn't want to get into car manufacturing. That's all. That's what that says.

Lei Xing (37:

24.516) not as determined as Xiaomi, of course.

Tu Le (37:

31.265) And so I think Baidu really sees more opportunity in autonomous vehicles and generative AI and things like that.

Lei Xing (37:

40.868) And Huawei is really the other mirror that reflects. They did an event where Richard Yu was talking with the four chairmen of their four brands on CCTV, on CGTN. And that was quite interesting. It's a very unique model that became successful starting with the AITO, the Huawei's way.

Tu Le (38:

17.029) But you and I know there's a ton of pressure on Richard Yu, a ton of pressure to grow very, very, very quickly. So.

Lei Xing (38:

23.204) Sure. Sure. Sure. Sure. 31.566) Yeah, that's.

Tu Le (38:

36.143) So anything else you want to talk about,

Lei Xing (38:

40.42) Yeah, we talked about NIO, JIYUE, the market.

Tu Le (38:

44.663) Actually, let's stop here for a second. Let's talk Nissan Honda. What are your thoughts on that?

Lei Xing (38:

49.73) Yeah, this is where probably you will, you know, take, take, I'll have you take more, opinions. You know, it's, it's, it's the, I think it's the, the, the shake, shake out is, the reset that I talked at the very beginning, right? It's not only in China, but globally we're seeing this reset early innings.

Tu Le (39:

17.519) So a bit of history, I'm not an expert on Japanese automakers for sure, but we know that Carlos Ghosn was the co-CEO of Nissan and Renault. They had a huge alliance and Nissan, products, they're nice products, they're great products, I think, but Carlos Ghosn just left a mess. And for those that don't know, he was the CEO. He was indicted in Japanese court and escaped basically a trial and potentially imprisonment in Japanese jail in an instrument case. So now he's back in, yeah, he's back in Lebanon, is it?

Lei Xing (40:

11.342) Five years ago. 15.268) 2019, end of 2019.

Tu Le (40:

15.621) And so Nissan sent over their CFO to start managing things, I think in China. Japanese government doesn't want to get involved and bail them out. And so I think they had a discussion with Honda who already has announced a partnership with Nissan in March of this year. And Honda's kicking the tires on acquiring Nissan, it sounds like. Now, anecdotally, there's a motor mall near my home where I picked up my IONIQ 5. Next to a Hyundai dealership there's an Infiniti dealership. Nissan's luxury brand is Infiniti. Honda's is Acura. Toyota's is Lexus. So they all have a luxury brand. That closed up shop. So the Infiniti dealership is no longer open and they don't really sell that many products in the United States. They don't sell that many products. And I'm talking Nissan, that many products in China and obviously they're a tier below Toyota and Honda in Japan. And so this is like the GM and Ford stuff in 2009, 2008, where there's bankruptcies, right? GM went bankrupt, FCA went bankrupt. And so a large part of this is due to not only leaving a mess, but their inability to really break through in the U.S. and China markets. So the wild card, and this is the more interesting part for me, is I'm going to take a moment, to pat myself on the back, because I had mentioned, what, a year ago, maybe months ago, that tech companies were going to look at struggling automakers.

Tu Le (42:

23.085) And there is an article buff, Foxconn also kicking the tires. And so this is going to happen. This is the most interesting thing. It's, can Foxconn turn around a car company? don't know, but you better believe that Amazon's corp dev team, Google's corp dev team. I'm not saying they seriously.

Lei Xing (42:

25.55) Last comment.

Tu Le (42:

52.413) looked at acquiring Nissan, but they had to have been, well, what do you guys think? And I'm sure conversations have been had between investment banks that help the tech companies and investment banks that help Nissan and stuff like that.

Lei Xing (43:

14.564) If history is a lesson, this, do weak plus weak equals strong? If history is a lesson, look at what is happening with Stellantis. They're in the number four, I believe, right? Number four. And with Honda and Nissan added together, I think they become the number three, Behind Volkswagen and Toyota.

Tu Le (43:

39.173) Three. 45.675) And in my prediction layers that Volkswagen still is trying to find a bottom so they could Nissan, alliance between Honda and Nissan could become number two quickly, pretty easily.

Lei Xing (43:

58.872) Yeah, so I'll just, you know, the predicament of the fallout of the foreign brands, if we talk about Honda, one example is guess how much the Accord sells now, the transactional pricing with all the discounts.

Tu Le (44:

19.951) Hmm. 24.453) I

Lei Xing (44:

26.072) Take a guess.

Tu Le (44:

27.845) Tu Le (44:31.653)

Lei Xing (44:

36.772) slightly over 100,000. You can get an Accord. So just one example. Accord.

Tu Le (44:

44.303) So we're talking, so for those who don't have an FX or foreign currency exchange in their mind, that's about $16,000.

Lei Xing (44:

53.902) Yeah. So a quarter when in the back in the early days, about like 20 years ago, I remember people were willing to pay more for something that was RMB300,000, close to RMB300,000. That was back in the days, right? And now, right, there's one example of how bad things are and how pricing have deteriorated. The kind of the pricing premium, right? And that's hence right the MINI they had to cut prices for their new EVs down to the RMB150,000 range and now they seem to sell and that's where firefly is gonna be right that kind of price range

Tu Le (45:

43.717) So for those wondering, especially in the United States, currently an Aaccord goes for over $30,000, the starting MSRP. So the other thing I wanted to talk about before we look at the comments. so thanks for everyone that has thrown in comments. We'll get to them in one second. I know that Jeffrey has put a few things. He's going to be going to Guangzhou, so you'll probably see him Lei. And there's a terrific article by Keith Bradsher for the New York Times talking about General Motors and their struggles and how they were one, two, three in sales in China not too long ago, and they are currently 16th.

Lei Xing (46:

17.304) Yeah, we'll see you there.

Tu Le (46:

41.445) And so this goes back to the write down, the $5 billion write down, the new strategies for product and leadership, and also pointing to renegotiating the JV contract with SAIC in the background of Rising Auto, IM Motors being launched by SAIC over the last few years as well. So very, very interesting. Keith is an OG. He's been in Taiwan. He's been in Shanghai. He's been in Beijing. He's a bureau chief for New York Times. It's a longer piece, but it's great. It gives you a lot of history. Things that we already knew about Lei because our close ties to the industry, and being American. So worth the read for sure. Not anything too surprising out of there if you've been following China EVs and more or Sino-Auto Insights over the last several years, but worth a click. I let me see. So Conrad Layson who we both know he says FYI Stellantis International the JV with LeapMotor is assembling CKDs in Poland for European consumption. We knew that. U.S. rules around FEOC prevents Stellantis International from doing this in the U.S. CATL and WeLion are NIO's two battery cell suppliers.

Lei Xing (48:

07.246) Mm-hmm.

Tu Le (48:

08.321) And how do we see battery swapping get rationalized in the China market? So far, swapping is proprietary, NIO or CATL standards. So we kind of mentioned that and talked about that, right? Just there could be two standards and then NIO kind of on the premium side and then CATL, to your point about firefly, maybe adopting the CATL standard on the budget or mass market side.

Lei Xing (48:

38.2) Mm-hmm.

Tu Le (48:

40.399) Those are the comments from LinkedIn. And this is what's super confusing, man. I'm looking at multiple platforms for questions. So firefly may be the first CATL swap partner. That's from Wasim. Yes, that's what you had mentioned, Lei.

Lei Xing (48:

58.796) Well, yeah, well, we said it's a wild card, right? And I guess by this time tomorrow night, maybe we'll know. But it looks like, based on what CATL has revealed, their first 10 OEM partners, they do not include NIO. So it could be entirely NIO's own, because NIO has said that

Tu Le (49:

22.415) So.

Lei Xing (49:

27.99) it's completely different battery swap network because the pack sizes are different.

Tu Le (49:

34.863) So Jeffrey writes back, possibly, but I understand the firefly brand battery is a higher technology level and liquid cooled, which might exclude it. And then Wasim responds, NIO CEO said that first model from a partner to adopt swapping is already on testing. So.

Lei Xing (49:

53.09) Yes, he said that. He said that recently in that face-to-face media event a week ago.

Tu Le (50:

01.455) So let's do some housekeeping. I don't see any other comments. We will probably not do next week. And then last week of the year, we'll get back on to our live show. We'll do the end review. So you and I have some homework,

Lei Xing (50:

24.172) Yeah, and hopefully I'll be stateside by then. I think I should be, because,

Tu Le (50:

30.913) And then, for those of you that have enjoyed this, we will take a rest. So happy holidays to everyone. then we will, let me look at the calendar.

Lei Xing (50:

53.092) Well, next up is CES and CES really lots of surprises coming. just, just, guess who's exhibiting at CES?

Tu Le (50:

59.022) Okay, yeah, so...

Tu Le (51:

06.117) So as far as I know it's ZEEKR, Xpeng, DeepRoute will be there. Anyone else?

Lei Xing (51:

11.684) Well, Xpeng via the AeroHT. They'll show that carrier. Yeah, that anyone else is a company called Great Wall Motors.

Tu Le (51:

25.541) You

Lei Xing (51:

26.884) They'll be at West Hall. Interesting, right? At this point of time. I think CES is still the stage to be at. Whatever the geopolitical environment, the Chinese will be there. Yeah.

Tu Le (51:

29.285) Tu Le (51:35.311) 45.487) I should mention, yesterday I was on Auto Line with the CEO of CES, Gary Shapiro. So it's weird. Gary's actually from Michigan and he lives near me. He basically gets on a plane to DC because CES is actually a trade show that's run by the CTA Consumer Trade Association. And he said that, you know,

Lei Xing (51:

48.92) Yes, you talked to Gary, right? 57.134) Yeah.

Lei Xing (52:

09.442) Yeah. Yep.

Tu Le (52:

14.285) You know, for those of you that want to listen to his update on CES this year and listen to me and my comments. Now we didn't really completely talk about automotive. So we talked really broadly and quite frankly, they talked about nuclear energy and I was like, all right, that's not my swim lane. So I'm not going to be talking about that. But man, Gary, man, I learned a lot. He wrote a new book, Pivot or Die.

Lei Xing (52:

41.912) Yeah.

Tu Le (52:

42.743) And so I'm looking forward to picking that up, but it was cool talking to him because obviously somebody who's new to CES, he did want to circle back and talk to me after my experience at CES. So I'll probably see him, you know, mid January to have a discussion. the other thing too, wrote in a May Mobility Robotaxi, an unmanned May Mobility Robotaxi. So I did that yesterday.

Lei Xing (53:

06.774) cool. within the area,

Tu Le (53:

13.345) Yeah, so out in Ann Arbor, Ann Arbor is about 30 minutes from downtown Detroit out in the burbs. It's the city where the University of Michigan is, where May Mobility is headquartered. The suburbs at two o'clock were pretty quiet, nothing too aggressive going on. I was impressed. Again, I don't recall there was a naked left. We didn't get much faster than 35 miles an hour in suburban streets. were there any iffy or weird parts of the ride? It was only about 20 minutes. so I'm going to try to, they have pilots in Detroit as well. So I'll try to get in Detroit where it's a little more hectic. And then.

Lei Xing (54:

09.635) Yeah.

Tu Le (54:

10.659) I should give back a full report, but yeah.

Lei Xing (54:

14.264) Yes, like shuttle, it's definitely not Waymo. Probably going very slow, controlled environment.

Tu Le (54:

22.115) It was a Toyota, the minivan, what's the minivan called? Yeah, it wasn't the shuttles. Yeah, again, so it was weird. First of all, it was a petrol engine vehicle. They took the front passenger seat out and that's where they put the computer. So the fan was really loud. You can hear it. There was a screen. So there were Captain's chairs in the second row.

Lei Xing (54:

25.214) a minivan! The Sienna. It was a Sienna.

Tu Le (54:

50.809) And there was a screen in the middle and similar to Waymo, you press a button to let them know you're ready. You put your seatbelt on, you press the button, let them know you're ready. And actually there was a May Mobility employee that checked us in and kind of answered questions as we're going on our ride. So that was really helpful. And maybe for somebody with less experience in Robotaxis, that's probably reassuring to have a May Mobility employee.

Lei Xing (55:

05.284) Hmm.

Tu Le (55:

20.163) there to answer questions and explain why the Robotaxi is doing what it's doing. But for me, I would have preferred just to sit in there and really focus on what it was doing. It was cool being able to ask him questions. So that was important as well. yeah, so now I just need to try out the Wayve, the British company who's doing things in London and San Francisco. yeah. But everyone. Thanks for joining us as always. Happy holidays. We hope that you're able to spend some quality time with your friends and family, be recharged for a 2025 that's going to be interesting to say the least. Good morning, good afternoon, and good evening.

Lei Xing (56:

09.86) Likewise, and very much looking forward to NIO Day tomorrow and just actually meeting a lot of people that are old friends, both at NIO and outside of NIO. It's gonna be a huge, huge event in terms of number of people attending and there's specific instructions on what you need to do. So yeah.

Tu Le (56:

26.201) It's gonna be a KOL reunion, isn't it?

Lei Xing (56:

39.084) I mean, they built this huge venue in this island in the middle of Guangzhou. It's called the Haixinsha. Yep. All right. Yeah. Bye bye.

Tu Le (56:

56.835) Looking forward to your update, I'll catch you on DMs Okay. Bye.