Episode #210 - The BYD Bullseye, Price War Fallout, and China’s EV Shakeout

Tu Le and Lei Xing return with a high-voltage episode unpacking the latest chaos in China’s EV market. From BYD’s aggressive price cuts and zero-mileage car controversy to the Xiaomi SU7 saga and Geely’s counterattacks, the battle for dominance is heating up. They also dive into Li Auto’s latest earnings, NIO’s intelligent driving rollout, and XPeng’s momentum in tech and exports.

Plus: reflections from Tu’s panel at the Mackinac Policy Conference, GM’s retreat in China, and why Michigan must lead the U.S. into the next era of mobility.

🔋 Topics include:

• BYD’s price war escalation and “Evergrande of autos” accusation
• China’s zero-mileage car controversy and export gamesmanship
• Xiaomi’s rebound with the YU7
• NIO’s shift from Nvidia to Shenji chips
• Li Auto’s strategy with the i-Series and massive charging ambitions
• Tesla’s tech leadership slide in China
• Geopolitical headwinds, trade policy, and Michigan’s EV future

📌 Companies mentioned:

BYD, Geely, Chery, Cadillac, XPeng, Xiaomi, Great Wall Motor, Li Auto, NIO, Tesla, GM, Stellantis, Buick, Chevrolet, Aito, Denza, Yangwang, Fang Cheng Bao, HiPhi, EV Electra, Faraday Future, LG Energy Solution, Car Design Research, Peugeot, Citroën

Transcript

Tu Le 
Welcome to the 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 in the X, LinkedIn 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. And boy, boy, the last couple of weeks have had some doozies. 

Lei and I discussed 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 and viewers, welcome back. We ask that you smash those subscribe and like buttons so you don't miss anything from us in the future. and I are two of most knowledgeable people in the world doing this. So help us get the word out about this show to others. My name is Tu Li
 
 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.substack.com, which of course I encourage you all to do. Lei about to graduate having a daughter from eighth grade.
 
 Lei, can you please introduce yourself?
 
 Lei Xing 
 Yeah, a well rested after a five week China trip, but already looking forward to the next China trip. Good morning. This is your cohost, Lei Xing former chief editor of China Auto Review. And this is episode number 210, correct? I lost track because we had a pause last week, but.
 
 Tu Le 
 210 and yes.
 
 Lei Xing 
 I was just watching the Maextro S800 launch, ‚Åì the penthouse on wheels, and the Hefei Phantom.
 
 akin to the Hangzhou Bay Cullinan So the latest and the greatest. ‚Åì The ET9 was pretty ‚Åì luxury. Somebody called it luxury at its peak, but the Maextro S800 is on another level. ‚Åì And just one of the things happening as you alluded to over the last couple of weeks that we were not doing this live.
 
 Tu Le 
 You
 
 Lei Xing 
 lot of scrutiny in the China EV space recently.
 
 Tu Le 
 Well, we're starting to see the effects of a three-year price war.
 
 Lei Xing 
 Oh yeah, about the price for it, right? We were in the midst of another... One of the titles of the report said it was a ruthless, price cut put on by BYD. And then Geely followed, Chery followed, Cadillac kind of followed. And then we had the S90 launch yesterday. Basically a hundred, I tweeted it was 150,000 and maybe off.
 
 for a limited time.
 
 Tu Le 
 That would be about $24,000 for those trying to get around the FX.
 
 Lei Xing 
 The significance of this latest price cut is now you can get a pretty good EV with smart assistant driving capabilities under $10,000 in the US and with the launch of in China, I mean, in China. Not in the US, not yet, maybe not ever.
 
 Tu Le 
 Not in the US, in USD.
 
 Booker you
 
 Booker you
 
 Lei Xing 
 And for under $20,000, you could get an EV with all scenario, including city urban NOA put on by the XPeng Mono MO3 Max. That's where we are right now in China.
 
 Tu Le 
 Take that, Mary.
 
 Take that Mary, because there's no advantage in technology. anyways. ‚Åì
 
 Lei Xing 
 And because of this latest price cut, ‚Åì think BYD has gotten into, I think their share price dropped. And then there's been some scrutiny about zero, they still call it zero mileage cars.
 
 Tu Le 
 Well, there's a couple things going on, Lei, because the great wall motor CEO called BYD in so many words, the Evergrande of autos. He didn't directly call them out, but he alluded to BYD being the Evergrande of autos. That's a that's pretty slanderous to me. But I do want to dig deeper into these
 
 Lei Xing 
 He didn't directly copy YDL, but...
 
 Tu Le 
 zero mileage used cars. Because one thing about BYD is that they do have a lot of capacity that needs to go somewhere. And if they reduce their torrid pace of growth, that means they will have some excess capacity. And we're seeing that
 
 they're shipping a lot of cars to Brazil because they're anticipating some tariffs. lots going on. BYD business model is getting more complicated by the day as I kind of alluded to in the past. Once you go international, it gets really, really, really complicated.
 
 Lei Xing 
 We talked about it at our roundtable, right? Just right before we, you know, we talk a lot about BYD and kind of the challenges, but the thing is, let me ask you, in the US market, is zero mileage cars a common occurrence or is that a no-no?
 
 Tu Le 
 So the only thing that I can equate to that Lei is like these demo cars where they might sponsor a golf tournament or they might sponsor some type of event and they can't sell them as new. But I've never really seen anything like what's being described in. We all know that these graveyards that people had talked about
 
 years ago in China, those were real, the volumes were much smaller than people made them out to be. So I do know from lessons about my friends that had licenses to sell vehicles in China, small niche brands, that dealers get a little antsy if they have to hold on to inventory for a long time and they'll sell at a discount.
 
 In order to move that inventory out and there's probably a ton of pressure from BYD to take more inventory. Now again. I want I've I've only heard about it, you know this week and so like you, I think we need to do a bit more digging with our with our friends and kind of people we trust so.
 
 Lei Xing 
 So from my own personal knowledge, the zero mileage cars is not something that has happened recently. I've seen this picked up here and there even before the pandemic. But for Jack Wei, the chairman of Great Wall Motor, to talk about 3,000, 4,000 kind of used car dealers to...
 
 to operate this way, I think shows something ‚Åì that this became ‚Åì rampant maybe over the recent years than it was before. And for this to be called out by him shows that there's lax in the kind of the regulatory, a supervision or environment.
 
 Was there a blind eye for this to have happened? And the rampant and the widespread the way Jack Wei described it I think was the issue and he didn't call out BYD directly So the question is who If BYD I think there were some also Xiaomi SU7 zero mileage cars on platforms that I've seen ‚Åì
 
 I mean, how many brands are involved?
 
 Tu Le 
 But
 
 the BYD is significant because the scale of the SU7 they've only sold 200,000 cars. So it can't be like 50,000 cars are zero mileage used cars. is it concerning that Xiaomi is associated with this? Yes, but it's not four and a half million units on the base concerning.
 
 Lei Xing 
 No. Right.
 
 Okay.
 
 And remember the reason that Great Wall Motor had this beef with BYD to begin with was this fuel tank issue that happened about two years ago. And that's still under investigation. That was something that was brought up by Great Wall Motor. So when this zero mileage car happens, what does China do to kind of investigate and, ‚Åì you know, find out who's responsible?
 
 and who are going to be penalized if at all. think that's what we're going to want to see going forward. But it could be many brands are doing this, including BYD. We're all speculating. Part of it is the market pressure. Part of it is the price war. Part of it is the bloodbath. Part of it is also there's this export kickback.
 
 Tu Le 
 I would anticipate there are. I would anticipate there are.
 
 Lei Xing 
 I think when you export these cars that are kind of registered and then export them to developing countries, there's a huge volume of that that's kind of like the zero mileage cars from my understanding. So that's the kind of scrutiny that we're seeing. And again, you're number one, I tweeted that you're a public enemy number one, and everybody's gonna come here after.
 
 You.
 
 Tu Le 
 But there was a response. ‚Åì
 
 Li Yunfei did respond.
 
 Lei Xing 
 Yeah,
 
 yeah, he posted quite a few data, quite a lot of Yeah, that ratio, all that stuff, but.
 
 Tu Le 
 financial data. he, and
 
 he compared BYD's numbers to foreign legacy numbers. And we know in the United States that many, many, many people and companies borrow from tomorrow to pay for today. And if you think and look at the ratios that he's communicated versus a GM debt ratio versus a Ford debt ratio, it's not.
 
 It's not as alarming. So I think, number one, I have to trust them until I hear differently. it is, what I will say is that you and I saw plenty of BYDs in the time I was there when we were on the road for 900 miles or 600 miles or whatever.
 
 Lei Xing 
 That's...
 
 Tu Le 
 This is, this is the echoes, the real estate market where there are empty buildings that got built because the Chinese government incentivize real estate development companies to build. And are we going to have a shakeout like, ‚Åì the real estate development industry? I guess the, the great wall motor CEO is implying that that could happen because he's calling.
 
 a company's Evergrande, Evergrande had what $400 billion of debt or $40 billion of debt or some crazy number. And so I, I just don't know. I don't see BYD being that. but you know, we just have to dig deeper.
 
 Lei Xing 
 Yeah, I mean, with all of these, take, you know, I think Li Yuanfei in his post, he was also trolling Great Wall Motor for under delivering in their NEV ‚Åì performance. And Jack Wei, he's kind of a straight shooter. I think he likes to talk, you know, pretty straight on ‚Åì things that he sees as issues.
 
 And then plus the fact that they are kind of behind, if we look at the rankings of the Geelys the BYDs, the Cherys the Changans Great Wall Motor has kind of fallen behind a little bit. Not only on overall vehicle sales, but on any of these, right? So there's a bit of, I don't know, anxiety, ‚Åì angryness all rolled into it. ‚Åì
 
 And then you take these words with a grain of salt, even for Li Yunfei. I he posts all these data and they're all coming subjectively from their own mouth. And we'll have to see what actually, if there's any investigation at all that will look into this. But the fact of the matter is, yes, the price wars, the word wars, let's race to the bottom.
 
 casualties will come out of this.
 
 Tu Le 
 Here's the other thing that's really important, Lei, is that there's going to be a lot of I told you so's ‚Åì from foreign talking heads.
 
 Lei Xing 
 And the fact that, you know, Chevy is leaving China. mean, we, I think we talked about this last year already that Chevy is done. So not surprising at all that now GM is kind of focused on the Buick and the Cadillac because we said that the Buick is now their premium play in the NEV space. Cadillac is kind of like the new Buick. Right. They had this new XT4 launched with this no bargain pricing.
 
 $20,000 in the US is $45,000.
 
 Tu Le 
 And
 
 I did feel some momentum going to the Buick booth and the Cadillac booth, so it wasn't like years past. Let me just say that.
 
 But also with regards to GM, they closed the Durant Guild due to the tariffs, the reciprocal tariffs. Because the Durant Guild for those that don't know was a small service that imported the GM's highest end vehicles. So like the Escalade, the Corvette, the Tahoe. But now those
 
 Lei Xing 
 Bye.
 
 Tu Le 
 vehicle pricing, which were already really, really substantially high, ‚Åì make it impossible to sell with a tariff. And they decided to ‚Åì close up the Durant Guild, which, so here's a couple of things. The Durant Guild, nobody knows, and nobody in China knows who Durant is. And the Guild, what does the Guild, they should have simplified it and or it was just the weirdest, weirdest.
 
 ‚Åì Business, I don't know what to call it, man. It was just weird.
 
 Lei Xing 
 I mean, there was that showroom right next to the NIO house in Shanghai, the first NIO house in Shanghai that we did the recording in. And that could be history. And then next time we go back, it might not be there. Yeah.
 
 Tu Le 
 It won't, it will not be there, I guarantee you that dude. Not
 
 with China Speed.
 
 Lei Xing 
 Yeah.
 
 Tu Le 
 ‚Åì
 
 You saw that Neta is going through some things.
 
 Lei Xing 
 I yeah, there's all kinds of things going on. ‚Åì
 
 Tu Le 
 And
 
 the theme here, everybody, is that
 
 People were wondering when foundations were starting to get a little bit less firm. you know, great wall motor, there's probably some jealousy, some animosity because of the engine thing that you're talking about, or the fuel tank thing that you're talking about. But there's a little bit of, ‚Åì to your point, man.
 
 Lei Xing 
 FieldTek.
 
 Tu Le 
 BYD has this bullseye on its back. But if there's a modicum of truth, that is really going to take some shine off BYD for sure.
 
 Lei Xing 
 bullseye target on their back.
 
 Yeah, and it's not ending. Right? This is related in a series of actions that BYD will take as soon as they see, let's say, for example, the Geely Xingyuan is really cutting into the Dolphin and the Seagull market share. And hence you saw what happened when immediately after BYD announced the new 50,000, 60,000 MMB Seagull, Geely came out with their own
 
 counter, putting it in the same range.
 
 And it's going to happen again.
 
 Tu Le 
 So BYD is getting a taste of its own medicine. They're basically getting undercut. And for the last four five years, they were doing the undercutting every single time. this represents the ultra competitiveness of the China market. And with Geely and BYD really, really leading the way,
 
 Lei Xing 
 Yeah. Yeah.
 
 Tu Le 
 Geely with multiple brands leading the way, whereas BYD, it's still predominantly the BYD brand with Fang Cheng Bao, Yang Wan kind of struggling. Denza's doing okay-ish. I think they could do a lot better because I like their cars. The Yang Wang and the Fang Cheng Bao, you know, they're nice, but you know, they don't stand out the way they should at a million RMB.
 
 and prices like that. Fangcheng Bao is already discounting its vehicles. So BYD needs to go back to the drawing board on that brand and create some better positioning for it in China.
 
 Lei Xing 
 As we said before, nobody's immune. Whether you're at the top or bottom.
 
 Tu Le 
 But this makes, and one of the biggest things, so I spoke with Nori and he posted an article about the price cuts from BYD. Are you surprised, Lei? Because this is early in the year for them to be so aggressive. And I'd mentioned that to Nori. And this points to what you and I, or you have been really, really calling out as a bloodbath for the last few years.
 
 Lei Xing 
 Well,
 
 terms of seasonality, when you pass March, April, kind of the peak in the first quarter, as you enter the summer, early summer months, you do have another law kind of. ‚Åì So not surprised to see these people launching this limited time offerings until June 30, which is the end of second quarter. ‚Åì And then really the direct.
 
 Tu Le 
 And basically
 
 they exhale for the summer and then come back hard in September.
 
 Lei Xing 
 Yeah.
 
 Yeah, exactly. So keep pushing.
 
 Tu Le 
 And one of the things that I also wanted to bring up, Lei, is that UBS reported that in a research report that Tesla is no longer a technology leader in China. Surprise, surprise. We said that for several months, probably a year.
 
 Lei Xing 
 and
 
 They're a technology leader, right, probably not in China, given these newer, the Maextro S800 is the latest example of what could be in terms of features. so, got that caught too, okay.
 
 Tu Le 
 So one thing that were you there still when they they put the YU7 in the Beijing showroom the show me Okay Okay, right, right so Lei Jun and Xiaomi thought that They needed to get the SU7 tragedy behind them and they finally unveiled
 
 Lei Xing 
 No, no, just happened a couple of days ago.
 
 Tu Le 
 The YU7, they have one sitting in a showroom in Beijing. A few of our friends have gone and posted about it. So maybe they feel comfortable now that they're far enough away from that event or that tragedy that they can try to turn the page. Will social media let them? I don't know, because I'm still seeing accidents and accidents. You saw that.
 
 wedding where there's four SU7s that got into an accident.
 
 Lei Xing 
 Yeah, yeah, yeah. But sometimes,
 
 don't know, mean, given these viral videos of accidents, does it hurt or help the brand? I don't know, to be honest. What I do know, yeah.
 
 Tu Le 
 It does seem suspiciously
 
 like companies are piling on or something.
 
 Lei Xing 
 What I do feel like is yes, I think the SU7 is largely behind for now and the focus has been turned toward the YU7 As you know, this weekend actually is the Shenzhen, Macau, Hong Kong Auto Show that they're actually showing the YU7 but you can only see the exterior I think. Or you cannot kind of open the door and go in.
 
 And then they're putting these vehicles into showrooms all over China. And then the official launch is July. ‚Åì It's going to sell out quickly, just like the SU7. I don't have any doubt. I have no doubt. mean, yeah.
 
 Tu Le 
 I have no doubt and I'm in complete agreement that it's going to sell out this year.
 
 No doubt.
 
 Lei Xing 
 me.
 
 and they still have a lot of orders for the SU7
 
 ‚Åì And on earnings call, the president, William Lu, I think he was kind of like trolling also. He's like, we don't have one single competitor for the SU7. ‚Åì
 
 Tu Le 
 Wow.
 
 ‚Åì goodness.
 
 One thing I did want to ask you because I didn't get to sit and watch it or even look at any of the numbers or big, big bullet point takeaways. Can you tell us a little bit about the Li Auto earnings?
 
 Lei Xing 
 ‚Åì Li Auto learning is, yeah, I the, I think really one of the focus was on the i8, upcoming i8 and why, what the selling point was, the styling, the spaciousness, the ‚Åì latest VL8 vision language action driver model that will launch with the i8 and then pushed out OTA into other AD max models.
 
 ‚Åì That's going to be another.
 
 Tu Le 
 So let's backtrack, the i8
 
 is going to be the first fully electric seven seat SUV.
 
 Lei Xing 
 SUV
 
 SUV like the L8 basically
 
 Tu Le 
 We aren't
 
 talking about the BMW I8. We are talking about the Li Auto SUV I8.
 
 Lei Xing 
 No.
 
 Yeah. And then, I think one of the things they talked about was their positioning of the EREV is for the ICE owners to change over to. And the positioning of the I series is for the current NEV owners to upgrade to. And then they talked about the renminbi 200,000 and above NEV market.
 
 There's a market scale of 3.8 million units, and about 2.1 million is BEVs So that's a huge pie that can tap into. And they hope that when the i8 launches, they have 2,500 supercharging stations, 5C supercharging stations, where this car can be charged 500 kilometers in 10 minutes. Some of the selling points.
 
 Tu Le 
 If look
 
 at the pictures that they have released, it's like a Li Auto L8 and the Mega had a baby. It doesn't look much like an SUV. It looks more like an MPV to be honest with you. This is aimed squarely at Fangcheng Bao. It's aimed squarely at the NIO ES8, the L8.
 
 Lei Xing 
 Yeah, basically. Basically, yeah.
 
 Tu Le 
 M8 from Aito and ‚Åì But but you know the M8 is an actual EREV so I hope That because I believe the MEGA is a great car it flopped from a sales standpoint Because it was 800,000 rmb, but I think it's a good car now
 
 Lei Xing 
 Mm-hmm.
 
 If the yeah.
 
 So the mega
 
 they mentioned, mega previously was about a thousand units a month. Now it's at about 2,500 to 3,000 units a month after launch of the home. That's what they expect. So think about it. They're also talking about the L series returning to 50,000 a month. So I think within Q2, we may be seeing 50,000 to 60,000.
 
 monthly sales for Li Auto and they still have 640,000 I think it's still the sales target this year they did about I think based on the guidance they're going to do about 220,000 in the first half which means they got to do over 400,000 in the second half you can kind of do the math and with the launch of the i series the i8 is coming in July and i6
 
 is in September. ‚Åì
 
 Yeah, that's.
 
 Tu Le 
 The
 
 i-Series vehicles will be built in Beijing, ‚Åì alongside with the Mega, because the BEVs will all be built, I think, in Beijing. ‚Åì the EREVs are all built in Changzhou, I think.
 
 Lei Xing 
 That's correct.
 
 And then now we have kind of in terms of competition, We can look forward to quite a few. I'm not sure, know, blockbuster, but you know, the XPeng G7, P7, the LiAuto new iSeries, the updated NIO 5566, the ramping. ‚Åì I think that the three, right? The WeiXiaoLi are added again. think that's where we can.
 
 Tu Le 
 So I
 
 Lei Xing 
 for it too.
 
 Tu Le 
 think what we should make clear is that Li Auto is not a big player internationally. So that's why I think you and I talk so much about NIO and XPeng generally more than we do Li Auto. But you've driven them, I've driven them. The Li Auto vehicles are great. The interiors are amazing. The fit and finish.
 
 Lei Xing 
 Yeah, I drove the Mega.
 
 Tu Le 
 ‚Åì I don't really like that, that brown orange color of the interior, but, quality stuff, man. And, and, ‚Åì I would definitely consider an L 6 or an L 7 if it was for sale in the United States. You know, they all look the same. If you squint, you can't tell which one is which. All if you stood them side by side by side, it'd be hard to tell.
 
 Lei Xing 
 Yeah. ‚Åì
 
 Tu Le 
 You know which one is bigger how much bigger it is. You could tell the difference between the L6 and L9 for sure but all these other ones they all look the same unfortunately. ‚Åì But the I8 is going to look different but I don't think in a good way.
 
 Lei Xing 
 Yeah.
 
 And that's.
 
 That's kind of been the successful ‚Åì ingredient, I guess, the way Li Auto has put on the L series. Even though it looks the same, but the price differently. Everything is standard except urban levels of, you know, it's pro versus max. The chips are different. The capabilities are different, but everything else is the same. So that's kind of their play.
 
 Tu Le 
 And we should also call
 
 out the fact that they're premium-ish. So they're more expensive than XPeng, almost as expensive as NIO. I think NIO's pushed down pricing a little bit to be where LiAuto is, but the L9's pretty expensive. I think it's like 65 US or something like that. Yeah, so.
 
 Lei Xing 
 Well, yeah.
 
 400,000 RMB. So
 
 the Auto, I mean, they talk about taking the market share and the NEVs above maybe 200,000, which they have about close to 15 % of that market. So.
 
 Tu Le 
 And it's reflected in their share prices that they're doing pretty well on the higher end vehicles. So one other thing that we should talk about is NIO's rollout of NWA. Yeah.
 
 Lei Xing 
 Yeah. Yeah.
 
 day just wrote off the day on 400,000
 
 banyan vehicles that was interesting that they wrote it out in their new world model
 
 Tu Le 
 NWA stands for NIO New
 
 World New World What? Model
 
 Lei Xing 
 model.
 
 model, new
 
 world model.
 
 And I was saying that they push it out into the existing vehicles first. And then at the end of June, they push it out into the new ET9 and the 5566 because they have the new ‚Åì Cedar Cedar OS. So that's kind of interesting.
 
 Tu Le 
 and
 
 no more Nvidia Orin. The ET9 had four Nvidia Orin chips, now it has one Shenqing chip running intelligent driving. So that's a huge, huge, huge ‚Åì divergence from the... And this should concern Jensen Huang in a big way.
 
 Lei Xing 
 Mm-hmm.
 
 Well, speaking of, they had to take an 8 billion charge on the H20 restrictions. It's still growing, but ‚Åì I think for NIO, their number one priority this year, guess what? It's to break even. how they do press conferences, what kind of cost actions they're going to take. Shen Ji is part of it.
 
 So unlike Li Auto, Li Auto, I mean, they're confident the vehicle margin are staying around 19%, 20%. That's making NIO a drool, I think, right, when you are already profitable.
 
 At the same time, think Firefly, if you look at the price war of what you can buy at the price of the Firefly, that adds a lot of pressure to increase volumes on that car. So I think they're a lineup currently. I actually look at the new NIOs Maybe they'll be doing quite well, hopefully, or I feel like based on the traffic that we're seeing.
 
 ‚Åì But.
 
 Tu Le 
 They create
 
 momentum, but they can't sustain it. I think that's the best way to describe NIO. They create positive momentum with their launches and Li Bin is a very endearing CEO. think people, Chinese consumers really like him, but they just can't sustain the momentum.
 
 Lei Xing 
 Yeah.
 
 Yeah, and the other extreme is XPeng which I think they have all the momentum they can have right now. The new Mona, the G7 is unveiling next month. ‚Åì Globally, export, hitting on ALL cylinders.
 
 Yeah, I mean, that's how I think because we're pretty close to all three of these companies and sometimes we kind of try to pull for them.
 
 Tu Le 
 No, I'm gonna
 
 be honest with you. We talk about them and I like them a lot because their cards are great. You know, they're not.
 
 I would drive as a daily driver, a NIO, an XPeng or a Li Auto full stop. And I drive an IONIQ 5. It's great, range is terrible. That's the problem I have with the IONIQ 5. It's very clean, very simple. The infotainment is a little clunky from a design standpoint, the one thing, so I have that IONIQ 5 until the end of the year.
 
 it's a one-year lease or 13-month lease and I need to get another car and I'm thinking hybrid because of everything that's happening in the United States unfortunately and so ‚Åì you know ‚Åì it's disheartening it's really so for those that have any interest ‚Åì I wrote an op-ed I was at the Mackinac policy conference so
 
 Lei Xing 
 is going backward.
 
 That's
 
 all there.
 
 Tu Le 
 So if this is Michigan, this is the lower peninsula and this is the upper peninsula and there's a bridge, the Mackinac Bridge. And it takes you to an island or it takes you from the upper peninsula to the lower peninsula. And then there's an island called Mackinac Island. And every year at the Grand Hotel, they have a policy conference and any one that wants to run for the mayor of Detroit, because this is a election year for the mayor of Detroit.
 
 Lei Xing 
 You guys have every drop, is that correct?
 
 Tu Le 
 And Gretchen, no. So Gretchen Whitmer, who has been the two term governor, she's going to term out. And there have there was almost every, I think, every candidate that is going to run for governor. So there's a lot of business entities and then a lot of political ‚Åì folks, current state reps. I had the pleasure of.
 
 Lei Xing 
 You weren't running, were you?
 
 Tu Le 
 Driving in a bus from the ferry that took us to the island and took us back to the mainland To the airport about 20-25 minute drive with Debbie Dingell who's the house representative for Ann Arbor and You know she she saw our panel so she was like, you know saw your panel so if I can backtrack ‚Åì
 
 Lei Xing 
 Hmm.
 
 Right, well, outspoken.
 
 Tu Le 
 I was invited up there to be a speaker with John McElroy, who needs no introduction, a Guy Gordon, who is a anchor, retired anchor for one of the local news channels. So very well, ‚Åì recognized in Michigan, Pat D'Arema who is the CEO of Martinrea, a tier one supplier and
 
 Lei Xing 
 No introduction, that's right.
 
 Tu Le 
 Robert Lee or Bob Lee is the CEO of LG ES, ‚Åì LG Energy Systems for North America. the title of the panel was ‚Åì basically steering Michigan's signature industry through complex times.
 
 Lei Xing 
 Hmm.
 
 Tu Le 
 I thought it was amazing. thought having Bob on the panel was good because he represents what I want and what I believe to be the future of U.S. transportation. And that's clean energy suppliers specifically on the battery side. And so we had some good conversations offline that that were kind of private that that I'll leave. But, you know, panel discussion was all about tariffs, was all about labor, automation.
 
 what's the UAW's role in the future? And I challenged, because Guy Gordon was like, give me what you're hopeful for. And I said, and I actually flipped it around and I said, what are going to be the blue collar jobs? Because in the Midwest, the UAW blue collar manufacturing job is such a historically important position. But in my opinion,
 
 Lei Xing 
 you
 
 Tu Le 
 And John McElroy had brought this up because he went to this automate conference where they showed all these manufacturing robots and things like that. He was like, you I said, if we're going to compete with China, there needs to be more automation because and John had brought this up. If if a robot costs $250,000, it doesn't sleep so it can run 24 seven.
 
 It doesn't have smoke breaks. doesn't have health insurance. So it pays for itself in a year because a UAW worker might make 120,000, but with health benefits, with vacation and other fringe, could be close to $200,000 for, which is a great living, which is a great living. so, you know, this is, I'm glad they had me because I brought, Hey man, I know what we're competing against. And so.
 
 Lei Xing 
 Yeah.
 
 Tu Le 
 They all agreed the tone is a lot different too now because you know when we came back, there's a lot of denialism and
 
 let's say disbelief that the Chinese could be so good or become so good in such a short period of time. That's not happening anymore. Although Mary Barra did have an interview with the Wall Street Journal and it's unfortunate that she said that they don't have a technology advantage and the industry or the sector was largely
 
 Lei Xing 
 Yeah, I saw that.
 
 Tu Le 
 built on subsidies and stuff. We've gone through this. Just acknowledge the fact that everybody gets subsidies, Europeans and Americans call them something different.
 
 Lei Xing 
 Mm-hmm.
 
 Tu Le 
 Now we could argue the size of the subsidies, but the fact that you're saying that they don't have an advantage, but you're using momenta as your intelligent driving partner in China, that should say something, I think. You know, so, ‚Åì anyways, I'm jumping off my soapbox. It was a great, great couple of days. I learned a ton, man. And I learned firsthand how important politics is shaping policy and shaping.
 
 Lei Xing 
 sure it is.
 
 Tu Le 
 you know, economic development specifically for the state of Michigan. But I think we can extrapolate that out. The coolest thing like ‚Åì first night because I was a speaker, I got invited to this private dinner. ‚Åì Grant Hill was there. And the keynote like programming was Mike Tirico, who is the announcer for NBC Sports interviewed Jared Goff.
 
 Lei Xing 
 okay.
 
 NBC.
 
 Okay, that's cool.
 
 Tu Le 
 And so that
 
 was so cool, man. And listening to Jared, I think he's made Michigan his home for a big part of the year. yeah, so that was really cool. ‚Åì Great experience. And Mackinac, man, so pretty, so pretty. We'll have to go vacation with our families up there. You fly over or whatever. yeah? ‚Åì nice, nice, nice.
 
 Lei Xing 
 I've been there. I've been to the outer city. I've been to Traverse City one year.
 
 Tu Le 
 It's freaking God's country up there, right? It's beautiful.
 
 Lei Xing 
 You have to fly, right? Even from Detroit.
 
 You can drive. ‚Åì
 
 Tu Le 
 This goes back to the IONIQ 5 range limit. I didn't want to stop. It's a four hour drive. And you actually have to park your car and then get on the ferry because there's no cars on the island. It's only walking and horses.
 
 Lei Xing 
 Only
 
 only if we had battery swapping.
 
 Tu Le 
 my god, so I was gonna drive but there's a ‚Åì flight I think it's twice a day out of DTW to an airport called Pellston and here's a funny story for you real quickly. They gave us a swag bag with fudge in it and so everybody that checked in to and was going to the gate for our flight
 
 had this box of fudge and TSA and you know, God bless them. ‚Åì They.
 
 I was told that it looks through the X-ray like C4. And so every bag that had the fudge in it, they had to open and check the fudge. you know, these are these things that you don't know about until you travel, right, Lei? You got, that's why, and I know this now, and so I'll be more knowledgeable in the future and like.
 
 Lei Xing 
 Cheers.
 
 Ugh.
 
 Yeah, yeah, yeah.
 
 Tu Le 
 Anyways, man, it was a good experience, but I did absolutely no email checking the last two days, which means that we need to make sure we get off at 10 so I can actually do some work and you could go celebrate your daughter's graduation. So.
 
 Lei Xing 
 Yeah.
 
 Now, I mean, what you said about the event and the conference, I think shows a sharp stark contrast between, you know, let's just talk about the political system. You have a two party here, you have a president, and then we're walking backwards on the California EV mandate, right? Which affects several other states. I think that was voted to be abolished. Is that correct? Right? And that's I am. ‚Åì
 
 Tu Le 
 It affects New York, Massachusetts, and basically democratic or
 
 left-leaning states.
 
 Lei Xing 
 You have that and then you have the kind of little labor system, the union. have... I mean so many things go into let's say if you want to accomplish something it's not as easy when you are kind of in China when you have a one party system that kind of goes top down and everybody just do it. It doesn't happen here like that in the US. So... ‚Åì
 
 That's the difficult part of it. That's why it's so every time we go back and come back and go back and come back, it's seeing things just progress forward so much faster. And then coming back here, you see things going backwards a little bit.
 
 Tu Le 
 Well...
 
 We don't get political here, US politics, Chinese politics, but I will say as two immigrants that have made the United States our home and our family's home, some of the things that are happening are truly heartbreaking in my opinion. ‚Åì Because I believe immigrants are such an important part of the US story and they will continue to be.
 
 And what's happening is some of the things is not right. that's kind of, well, anything else that you had?
 
 Lei Xing 
 Yeah, mean,
 
 we had kind of a two week break. ‚Åì There was a lot of things going on. There's quite a few other earnings from the We Ride Ponys Baidu. ‚Åì XPeng NIO is reporting next Tuesday, I think. I mean, in a robotaxi space, it's also Hesai at their earnings. mean, the volumes are getting significant.
 
 in terms of light on it, right?
 
 Tu Le 
 Which gives them scale,
 
 which gives them more cost control, which allows them to dictate and squeeze other smaller players. Is that what happened with Luminar? Maybe, but all we know is Austin is out.
 
 Lei Xing 
 And that was interesting, yeah, it was out because of improper behavior and then bless you And then we have a new guy at the top sorry No, how'd you do that? ‚Åì Cool And then we have a new CEO with Stellantis group somebody from within unfortunately or fortunately ‚Åì that was kind of
 
 Tu Le 
 You didn't hear me though, right? You didn't hear me though, right? Okay. I just muted the mic.
 
 yeah, that's right!
 
 So here's the thing about Filosa. He's Italian, but he never worked in Europe. His background is more Brazil. Yeah, Latin America. And so...
 
 Lei Xing 
 Underwhelming.
 
 Americas, yeah.
 
 Tu Le 
 When we heard him speak in LA, I liked him. He was apologetic about the dealer stuff. And he seems much more social media friendly. Because he's always posting, or his team is always posting him on LinkedIn.
 
 Lei Xing 
 Mm-hmm. Mm-hmm.
 
 Tu Le 
 And so maybe he was politicking a little bit to become the CEO, but he knew, I was told he knew about a month ago. so ‚Åì yeah, congratulations to Antonio. Hopefully maybe we'll have him on their show. ‚Åì But ‚Åì let me ask you this now that you bring that up because we talked about Chevy leaving China. What about Peugeot Citro√´n?
 
 They've effectively left, right?
 
 Lei Xing 
 They're
 
 kind of... Well, they're kind of... How should I put it? Maybe on their second to last breath? Oh god, you got me. I forget all of a sudden. Maybe I'll remember. Maybe I'll remember after we talk for a few minutes. Jiangshi. Jiangshi. Jiangshi, yeah.
 
 Tu Le 
 Zombies?
 
 How do you say zombie in Chinese?
 
 Come on man. Okay, I'm gonna have to ask my wife now.
 
 Okay. Jiangzhi, Jiangzhi, okay. What does that
 
 literally mean? What are those two words literally?
 
 Lei Xing 
 literally means
 
 a dried up corpse.
 
 Yeah.
 
 Tu Le 
 Okay, I knew you'd do it. anyways, ‚Åì but let's do this. Let's go through some of the comments real quick because love that Jeffrey and SPX are dedicated viewers. Love that. I'm sure we don't say everything SPX and Jeff like, but that's what life is all about. I appreciate that they are loyal listeners and viewers, the live ones too.
 
 SPX says alongside price cuts BYD looking at you being the main weapon used. Well, I think Tesla SPX is also using price cuts as a way to kind of maintain volume. AI, advanced FSD and ultra fast charging. 5C plus or BAAS, so battery as a service.
 
 are being implemented by many brands and cascading down to cheaper models. What are other ways car makers can have a meaningful edge to out-compete the peers in China and globally?
 
 Lei Xing 
 that's a great question. think what Li Auto cert.
 
 Tu Le 
 We should have tackled
 
 this and talked about it for 20 minutes instead of the last two minutes.
 
 Lei Xing 
 Yeah, I know, but ‚Åì look
 
 at what Li Auto said, Li Xiang said in the earnings call, he said, if you talk about HMI, you think of Apple. If you talk about interior, the spatial kind of innovations, he says, hopefully you think of Li Auto. ‚Åì And I think from the Shanghai Auto Show is really what, and even what the Maextro S800 showed is what capabilities of the interior cockpit.
 
 the seating arrangements, simple things as those. ‚Åì Could be a selling point.
 
 I mean, ADAS right? Everybody's doing ADAS ‚Åì
 
 and how you tweak kind of the pricing. Tesla is announcing free transfer of assistance, right? Driver assistance if you purchase new three, the sexy models in China, also for a limited time, right?
 
 It's.
 
 Tu Le 
 It should be noted that
 
 Tesla is going to be launching their robo taxi service, I think June 12th in Austin. So we're seeing a little bit of, Hey, look over here. Don't look over here because the model Y is starting to flatten out from a sales standpoint and we're hitting summer. So with no real new products, the last half of 2025 for
 
 for Tesla in China is gonna be tough.
 
 Lei Xing 
 Interesting that Elon, said, right, he said, bye bye to Doge. And then kind of like, you I'm going to be focusing on Tesla, SpaceX full time now and, and kind of reassurance for the investors. Yeah. Yeah.
 
 Tu Le 
 way too much pressure from investors. Way
 
 too much pressure from investors, I think. And let me answer this. SPX, that's a great question. So this goes back to our friends, Sam Livingstone and Robert Dooley, who work at Car Design Research. They have to build the brand because to your point, ‚Åì
 
 Li Xiang said, when you think of user experience, you think of Apple. That's all a part of the brand. And Li Auto wants you to think of great interiors and user experience that way as Li Auto. That's what they need to do because you can't, you make a great point. You can't continue to just keep on cutting price. You cut price to eliminate players. And in China, this is a unique
 
 country in that way. Because in the United States and Europe, think by now most companies would have called, know, wave the white flag. But in China, they just double down, triple down. We see Hi-Phi looking to license their model to a Dubai company, right?
 
 Lei Xing 
 Speaking of Hi-Phi,
 
 yeah, the Lebanon EV, EV Electra. It's doomed. It's futile. It's going nowhere. So that's that.
 
 Tu Le 
 Lebanon, yeah.
 
 And then...
 
 Well, but
 
 they're still around. They still a pulse, whether it's Faint or not, another company, Faraday Future, still a pulse. They still post things. So they make enough money to keep the lights on. whether they're full-time players, we're seeing Neta now. So again, it's starting to happen. Companies are starting to get weaker. But I also know that there's Pitch Decks.
 
 being flown around all these other investment firms to try to save them. But I think if you continue to be consistent, I think NIO has been pretty consistent with their brand and their promise. ‚Åì Because they are kind of the customer engagement brand. ‚Åì
 
 I think that's where you're going to start seeing more of a differentiation. Now, this is likely more important in the 200 and 250,000 R &B and above. BYD is the 800 pound gorilla and the 200,000 and below, but they can't own that market share and live in that space without some sharp elbows getting in there trying to grab some share.
 
 You know, it's just like Tesla. were 80 % market share of the EV market in the United States. That was never going to be permanent. But if the pie is growing, then everybody can win until it starts to mature and customer acquisition costs increase significantly. And I have to, in order for me to grow in a mature market, I have to take share from Lei EV company. We can't just both grow.
 
 Lei Xing 
 Mm-hmm. Yeah.
 
 Tu Le 
 we're seeing volume starting to flatten out, although it's still growing in China, like I'm talking overall market. And as NEVs become a larger share of the total market, there's still some breathing room for some of these brands, but as customer acquisition costs grow higher and higher, I think it's gonna be differentiating the brand and yeah.
 
 ‚Åì maybe all of the above, like the whole BAF, the charging thing that you had mentioned, Lei, you know, having more convenience, faster charging, ‚Åì because I agree, I don't know if you can just cut your way to global leadership like that in perpetuity.
 
 Lei Xing 
 And
 
 the other important thing to note is this year, this year we still have the trade-in and the scrappage incentive in place. Now come toward the end of the year, China is really going to have to think about what to do next year in terms of economic supportive policies. Do these continue or do they end? And how much of the market
 
 is propped up or helped with these kind of incentives. ‚Åì It's no longer a new first buyer car market. It's a retentional market, right? Meaning now it's about people upgrading their existing vehicles. So I think next year, lack of these continuous supportive policies, what's going to drive sales?
 
 That's something to watch out for. And that could be a stimulant of driving some of the weaker players out. That's what we can do.
 
 Tu Le 
 And I think SPX raises a rather good point. Does BYD have any other tricks? You know, obviously with the mega charging and the God's Eye, that...
 
 surprise the market a little bit, ‚Åì it's still primarily a price cut tool that they use and ‚Åì flood the market with product tool. anyways, ‚Åì Jeffrey says, good morning, good evening. Good morning, Jeffrey, or good evening, Jeffrey. Yeah. He does say that the BYD rumor about the ‚Åì used cars is
 
 Lei Xing 
 Good evening.
 
 Tu Le 
 There's some legs in China.
 
 Lei Xing 
 it definitely has. ‚Åì
 
 Tu Le 
 Been
 
 to the NIO house, the first NIO house, pretty cool to see where it all started.
 
 They started, William always comes by. ‚Åì
 
 He says that the SU 7 crashes are still showing up in his WeChat groups. The Mega is so cool. Yes, I agree the Mega is cool. But I don't know when the Mega is gonna have a facelifted version, Jeff. And he also, he saw the ET5T updated version at NIO House. It was top.
 
 Lei Xing 
 I'll be in on this here next year.
 
 ‚Åì
 
 but yeah, by the way, since there's big fans of new, I did have a chance to drive the ET9 and a few days earlier I drove the ES6. So let me tell you how to compare these two different models. After driving the ET9, it felt like driving on cotton and it puts the ES6 into shame of how luxurious, mean, I'm putting it in a good way.
 
 Tu Le 
 Is that bad? Is that bad?
 
 Lei Xing 
 not to say the ES6 isn't good but yeah the ET9 is definitely it's premium.
 
 Tu Le 
 But is that bad? Like
 
 it like do you want that?
 
 Lei Xing 
 I don't know, but now you have this Maextro S800 is also I think right? Yeah.
 
 Tu Le 
 has a version of clear motion.
 
 And then Jeffrey says, let's not forget McLaren owes NIO a billion euro.
 
 Great insight guys as usual. That's from SPX. So that's all I have man. ‚Åì Glad to be back talking with you after a two week hiatus. I think you and I have been a little bit busier than we have in years past. ‚Åì valid excuses. Roger Atkins says hello. He's been watching for a little bit here.
 
 Lei Xing 
 Same here.
 
 Yeah. Yeah.
 
 Tu Le 
 on the LinkedIn channel. So hello, Roger. Hope you're well. Hopefully we'll see you in Munich in September. yeah, man, looking forward to that too. Everyone, thanks for joining us. Good morning, good afternoon, good evening. We should be back at our same bat channel and bat time next week, 9 a.m. Eastern. I don't have any issues that day. So
 
 Lei Xing 
 was see Roger in Munich. It's September, just about three months away.
 
 Tu Le 
 We will talk with you all then.
 
 Lei Xing 
 All right. Bye bye.