China EVs & More
Electric Vehicle (EV) & mobility experts Tu Le and Lei Xing plug you in to all the latest going's on in the 🇨🇳EV & mobility space that are sure to have effects on the 🇺🇸 and 🇪🇺 regions. Specifically, Tu and Lei dissect the week’s most important news coming out of the China EV/Autonomous Driving (AV), chip, battery, ride-hailing, shared & micro-mobility verticals. Learn more about companies like: #NIO #XPeng # LiAuto #BYD #Arcfox #Seres #Voyah #Xiaomi #Huawei #Tesla #GM #Ford #VW #Audi #Merc #BMW #Didi #Meituan #WeRide #Pony.ai #AutoX #Baidu #Apollo #Hesai #Seyond #RoboSense
China EVs & More
Episode #234 - Canada Opens the Door, China EVs Advance, and Legacy Automakers Face a Reckoning
Episode 234 may go down as one of the most consequential conversations yet on China EVs & More. Tu and Lei unpack the Canada–China trade truce that effectively opens the door for Chinese EV imports into North America—and why this moment could trigger a chain reaction across the U.S., Mexico, and global auto markets.
Canada’s decision to allow up to 49,000 Chinese EVs at just 6.1% tariffs isn’t about volume—it’s about symbolism. Once the door opens, it rarely closes. The hosts explain why this move pressures the U.S. ahead of USMCA renegotiations, accelerates conversations around Chinese manufacturing in Canada, and raises the stakes for GM, Ford, and the German luxury brands already losing ground in China.
The episode also breaks down 2025 China auto and NEV sales, showing a maturing but brutally competitive market where growth now comes from stealing share, not market expansion. With BYD, Geely, Chery, Leapmotor, and Huawei-backed brands targeting aggressive 2026 volumes, the pressure on legacy OEMs—especially BMW, Mercedes, Audi, and Porsche—has never been higher.
Tu and Lei debate which Chinese OEMs are best positioned for Canada and eventually the U.S., why affordable EVs in the $30–40K range are the real battleground, and how price cuts of 10–25% by German brands reveal structural inefficiencies long masked by premium margins.
Strategic, provocative, and deeply grounded in real data, this episode explains why North America just entered a new phase of the China EV story—and why the next 12–18 months may redefine the global auto industry.
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🔑 SEO-Friendly Keywords (for description / Apple Podcasts)
China EVs & More, Tu Le, Lei Xing, Sino Auto Insights, Canada China EV trade deal, Chinese EVs Canada, Canada EV tariffs, USMCA renegotiation, Chinese automakers North America, BYD Canada, Geely North America, Chery EVs, Great Wall Motor EV, China auto sales 2025, China NEV sales, EV price war China, BMW China sales decline, Mercedes China sales, Porsche China collapse, affordable EVs North America, $30,000 EV, EV market maturity China, global auto competition, Chinese EV manufacturing Canada
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⏱️ Chapter Timestamps (for YouTube description)
00:00 – Welcome & episode overview
01:30 – Personal EV ownership pain: Hyundai IONIQ 5 breakdown story
05:55 – Breaking news: Canada–China EV trade truce explained
07:40 – Why 49,000 EVs matters more symbolically than numerically
09:30 – What this means for the U.S. & USMCA negotiations
11:30 – Could Chinese automakers build in Canada next?
13:45 – Which Chinese OEMs are best positioned for North America
16:10 – Canada vs U.S. consumer demand & EV affordability
18:50 – 2025 China auto & NEV sales breakdown
21:30 – A maturing market: growth vs market-share battles
24:10 – BYD, Geely, Chery & Leapmotor’s 2026 ambitions
27:10 – German automakers’ reckoning in China
30:20 – BMW & Mercedes price cuts expose margin pressure
33:15 – Porsche’s dramatic collapse in China
35:50 – Flagship EVs eating into German luxury sedans
38:20 – Why affordable EVs are the real global battleground
41:10 – Chinese speed vs legacy inefficiency
44:30 – Audience Q&A: unions, manufacturing & homologation
48:00 – Can Chinese EVs be driven into the U.S. from Canada?
51:30 – Final thoughts & what to watch next
Tu Le (00:00)
Hi everyone and welcome to China EVs and 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.
It 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 help us get word out about this podcast to other enthusiasts and tune in again next week. Slam those subscribe and like buttons please to get us into more ‚Åì homes and computers. My name is Tu Le I am the managing director at Sino Auto Insights.
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. A normal week Lei can you please introduce yourself?
Lei Xing (01:05)
a volleyball tournament coming up weekend dad Lei local local this is your co-host Lei Xing former chief editor of China Auto Review and this is episode 234 234 and big news big big news with implications
Tu Le (01:12)
Local or you have to travel?
Lei Xing (01:32)
I say this is probably one of the news of the year already with Canada and China reaching a trade truce and especially the part on EVs. We'll talk about that. Somebody needs a love. I think we have some awards to give. I definitely know who that somebody needs a love award goes to. The final numbers for 2025 are out. The China auto EV sales.
We can talk a little bit about that and what's been going on in terms of Chinese are coming, right? ‚Åì For looking to buy BYD batteries. Trump saying, let them come in. You predicting two episodes ago that we may have a Chinese automaker coming in this year. So lots of things to talk about, ‚Åì exciting times.
Tu Le (02:22)
You
Lei Xing (02:25)
‚Åì and you're about to say something before you come on.
Tu Le (02:30)
So.
My apologies, everyone. As you all know, I have a Hyundai IONIQ 5 and I really like it. It is fun to drive, it doesn't have like a soul. It's just very, very efficient, very fun to drive. The range is lower, lower than I'd like and I'm about to turn it in. I extended it because as you...
Lei Xing (02:48)
‚Åì that's a statement right there.
Tu Le (02:58)
Most of you know I was going to get in my key. Still likely going to do that with Blue Cruz, ‚Åì but. I'm driving it. Home after picking up my son from a basketball practice and I get an battery light that comes on a battery light battery light and then one of the screens flashes. Something troubles with your 12 volt. Please pull it pull pull over. Please pull over.
Lei Xing (03:14)
Oops.
Tu Le (03:24)
And I'm about a mile and a half from my house. And so I just, pull over for a second cause I don't know what's going on. I'm worst thing, my son's in the car and I'm thinking, wow, battery fire. I better stop. And so I stopped for a second. I'm like, you know what? I'm a mile and a half home. So I drive it to my house and ‚Åì it's been sitting in my driveway for two days because, ‚Åì and it's not the
It's the car battery. Yeah, so which is a bit ironic and then. My dealership. I call the dealership to set up an appointment, cause it should be under warranty and then AI picks up repeats. I say things four times and it repeats and repeats and it repeats. We can't get you in until February.
Lei Xing (03:54)
Yeah, the auxiliary, the 12-0, right?
the
Tu Le (04:17)
Would you like to schedule an appointment? I'm like, what? And so I called the direct line. we don't have enough master techs So we can't see the car until next week. And I go, so you want me to drop it off next week? Because it's sitting in my driveway doing absolutely nothing. And effectively, we can't help you. And then I.
I'm just going to drop it off and put it in queue, because it's not doing anything in my house.
they send a tow truck. It's the wrong kind of tow truck because it's an electric vehicle. So twice now I've had to wait for tow trucks. Finally got a flatbed and on top of that, I'm trying to drive to Detroit for the auto show for events. So now there's coordination between my wife and I with the kids activities. And then on top of that, yesterday was a snow day, so both boys were home. And so...
It has been a crazy hectic week. had, unluckily, I have to do the show. So my wife is at the dealership now dropping that car off that just got towed out of our driveway.
Lei Xing (05:20)
Yeah.
Tu Le (05:29)
And the car has 11.5 thousand miles on it and the battery died. And not the battery battery, but the battery battery. So there you go, Lei, There's my story. And on top of that, ‚Åì by the way, I went to the auto show. anyways, let's do this. Let's do this, ‚Åì Let's talk about this big news.
Lei Xing (05:30)
Bye.
you
what a great start to the show.
One auto show.
Tu Le (05:57)
Please detail for the audience what happened effectively this morning, early this morning, late last night.
Lei Xing (06:01)
Yeah.
Yeah, so it was anticipated that this Carney's trip to China, the Canadian prime minister, first to visit China since 2017. And it was anticipated that there will be some trade truce involving canola oil or seeds. And as it so happened, the announcement was in exchange for dropping the canola seed tariffs
going into China from 84 % to 15%, Canada is allowing a capped number of 49,000 vehicles, Chinese imports, EVs specifically, to come into Canada at 6.1 % tariffs. So the 100 % tariffs is gone. Yeah, yeah, starting, I guess March 1st.
Tu Le (06:47)
So effectively zero.
So I'm gonna pat myself
on the back. I'm gonna stretch my arm a little bit, pat myself on the back. anyways.
Lei Xing (06:57)
And so here we go, right? ‚Åì The floodgates have been opened. And there certainly will rile Trump. I'm sure he's going to tweet out a true social. Yeah.
Tu Le (07:07)
You make a great point. I'm gonna stop you right there, Lei. You make a great
point. Once that door is open, it's never gonna close.
Lei Xing (07:14)
Yeah, because this has, I said, the implications on especially Trump saying, let them come in, let them come in after visiting the Ford factory earlier this week, right before the auto show. now, yeah, now Ford is looking to procure batteries from BYD. Ford, I take it it's for their plants outside of the US?
Tu Le (07:26)
and flipping off a factory worker.
Lei Xing (07:42)
Is that what? Yeah. So in a couple of days, I think the order seems to have changed. ‚Åì And it so happens that it's been 20 years, exactly 20 years since Geely exhibited in Detroit. And we know our good friend ‚Åì Ash, I actually asked him about
Tu Le (07:42)
I don't know, I don't know.
Lei Xing (08:07)
some of the media quotes about what Geely is saying. Well, he said, they're exploring opportunities and we'll try to make a decision. That's his official word. the prospects of us as US consumers buying a Chinese EV have not been greater since
Geely exhibited in 2006 in Detroit. That's what we're seeing right now. ‚Åì All of a sudden, right?
Tu Le (08:41)
We're surrounded. Mexico ‚Åì already imports, and they're mostly ICE vehicles from Mexico. So let's be clear with that. Mexico isn't this mass adopting clean energy vehicles. They are shipping PHEVs and some BEVs, but a lot of ICE vehicles from Chery from SAIC, from some of these other companies. ‚Åì now Canada, and to create some context, Lei.
Canada's sales 2024 were around 2 million, just under 2 million units. So not a huge market. So 49,000 is fairly insignificant, but it's very symbolic. So the actual quantity is not great, but the symbolism is really important because there's a few things going on. It opens the door, first of all, to North America for the Chinese EV makers. Number two, now...
We wait and see what the reaction is from the Trump administration. Number three, the next step would be manufacturing Canada, wouldn't it?
Lei Xing (09:40)
Yeah, it also
included the so-called joint venture type of investment. So we're going back to the mid 90s to what happened in China. I know, right?
Tu Le (09:52)
Well, hundreds of
thousands of units of capacity have been pulled out of Canada by the US legacies over the last six, nine, 12 months. So the Canadians, that's a lot of jobs up and down the supply chain, not just at the assembly factories, but the tier ones and stuff too. And let me assure you.
At the auto show, ‚Åì yesterday and the day before that, there's not that many tier ones and OEMs that I've spoken with that are like, yeah, yeah, we need to get out of Canada and Mexico. There's not anyone that's telling me that, ‚Åì in any way. So the, the, the Midwestern U S automotive sector believes that Mexico and Canada are key partners.
And as I alluded to months ago or a couple months ago, they're going to be our biggest competitors now when it comes to the United States is still the second largest passenger vehicle market in the world. And that's nothing to sneeze at. We can throw that weight around a little bit, but we were stronger in my opinion with Mexico and Canada. If the USMCA gets renegotiated, you know, this is the USMCA again, that Trump put in place.
Lei Xing (11:10)
That's.
Tu Le (11:13)
four years ago or five years ago. So he blew up his own agreement.
Lei Xing (11:16)
Yeah, that's an interesting thing because this happens as the USMCA ‚Åì discussions are ongoing, I believe, right? ‚Åì And at the same time, yeah.
Tu Le (11:28)
Well, now they're catalyzed. Now they're catalyzed
because, you know, Canada currently is like, I'm not waiting. I'm a sitting duck.
Lei Xing (11:36)
So yeah, so there's, know there's a question that just popped up. The potential of these EVs coming into the Canada and coming into the US, I don't know, because there's still the 100 % EV tariffs and the ICV ban. And if Trump says, let them come in, what does that mean? You produce in the US, you sell in the US, you hire US jobs, that those restrictions are gone.
Right? So many implications.
Tu Le (12:02)
So here's the
weirdest thing. So there was conversations yesterday. There was a panel discussion. I won't name the people who were talking, but let's just say that they weren't very open to China coming to the United States because they were talking about national security issues. We have the leverage right now. We have the leverage. The Biden administration put in, let's be clear about this. The Biden administration put in restrictions already.
Lei Xing (12:09)
Okay.
the
Tu Le (12:30)
on connected software for model year 27 and connected hardware for model year 30. If we want to be more restrictive as the United States before allowing the Chinese to enter, let's do that. Let's just set the table. I'm sure the Chinese will meet it. You know what I mean? Like we can, we can.
We can communicate our concern about national security. They're not here yet. Okay, so we can do whatever we want, be as restrictive as we want, but we should be allowed to have them enter in my opinion. And this is coming from a kid who grew up in Detroit in the heart of the automotive industry. And part of it is because I was at the Detroit Auto Show. All I saw is trucks, man, like huge trucks, drinking gas, gas, gas, gas.
And so at least in this moment, if I take a snapshot, it doesn't seem like the US legacies are learning any lesson. Now Ford is talking out of both sides of its mouth because at CES, Doug Fields talking about a UEV, a clean energy vehicle that's using AI and bringing everything into house, hardware, software design. But I don't know if they can balance that. Something's going to win over the other. And to me,
F-150 makes 70, 70, 80 % of their profits, I think.
that points to gas guzzlers still winning over the next several years. And I don't want to say I told you so, but I'm going to say I told you so. That countdown clock is ticking. And it just got louder with Canada's announcement.
Lei Xing (14:07)
Yeah, look at the North American car truck and utility of the year. It's the Dodge Charger, it's the Ford Maverick. And also I like actually Hyundai has been keeping winning these awards with the Palisade, right? Because Americans love those kind of vehicles. ‚Åì Yeah, I mean, and then the other ones, okay, so who comes in? Is it the BYDs? Is it the NIOs?
Is it the XPengs? Is it Li Autos?
Tu Le (14:38)
Well, me ask you this, Lei. Let me ask you
this. Who historically has had the longest relationship from a Chinese OEM, a state-owned, it doesn't matter, state-owned, whatever, who has had the longest relationship with Canada that you can think of? Who has any type of business operations or any type of relationship?
Lei Xing (14:53)
Well...
Well, automakers, none, right? But Magna is a Canadian supplier. Now, I think they actually probably were visiting this company, this delegation, because Magna produces with the joint venture ArcFox. And then they also produce the XPeng and the GAC ions in Austria. I don't know what that plays in terms of the OEMs, but...
No, but there's no...
Tu Le (15:23)
Well,
let's look at this a different way. The companies that have international operations that could stand up something in Canada pretty quickly are Chery, BYD, because they already shipped to many countries. if we talk about NIO we talk about XPeng and we talk about Li Auto those types of companies, it would be a bit more heavy lifting for them. Now, they probably have individual staff in Canada already, but
Lei Xing (15:44)
Yeah.
Tu Le (15:49)
to create a distribution network, to create a sales network, to create a service network. Let's just say BYD and Chery probably have a playbook that they can refer back to. ‚Åì And then we can't leave out Geely. So my guess would be Geely, Chery, BYD would be the first set. And again, it's only 50,000 cards. So there's gonna be sharp elbows.
Lei Xing (16:01)
Yeah.
Yeah, yeah. ‚Åì
Yeah, I agree those three companies you mentioned in terms of readiness, in terms of preparation, in terms of the intent, right? The last 20 years, Chery actually for a while was working with Malcolm Brooklyn, if you remember, to try to bring their vehicles. This was in the mid to late 2000s, right? Early 2010s.
Tu Le (16:28)
Yeah.
And
we can't forget about Great Wall either.
Lei Xing (16:40)
Yeah, I mean, great wall, motor, sure. ‚Åì
Tu Le (16:42)
because
they have the vehicles that I think Canadians who have similar tastes to Americans, the SUV, boxy SUVs and stuff like that.
Lei Xing (16:50)
Yeah, definitely those that have surrounded US or America's BYD being one, CHery being one, Geely right Geely, I think that they're more than prepared than anybody with their presence. Aside from the robotaxi business with Waymo.
Tu Le (17:11)
And honestly, if I were, ‚Åì let's make a couple assumptions. Toronto and Vancouver would Hoover a good portion of those 49,000 units up. Two of the largest cities in Canada. A lot of the other large cities are in like Montreal and things like that. They're going to be a lot colder where BEVs probably aren't going to be as effective. So maybe we see a set of PHEVs coming in first and then.
mostly going to Vancouver and Toronto.
Lei Xing (17:42)
You know, you know, when China joined the WTO in 2001, there was a saying at the time that the foreign automakers would come in and the saying was the wolf is coming. I feel like this is at this point in time. The same thing, but it's happening the other way, but at the same time, I think the ‚Åì the worry
that the Chinese are just gonna come in and disrupt and take over. I think that's overblown because you need probably years if not decades to build what let's say a Hyundai and Kia has built in terms of being a really an American feel like brand rather than a Korean brand, right? So.
I think it's only starting. There's always somewhere to begin, but the volumes are still small. But I think it'll take some time to really say, oh, the Chinese are here. We're done. I don't think it's that easy. Also, I think it won't be wishful thinking on the Chinese side that they're just going come in and we're going to take over the rest of the world. Right. It takes time.
Tu Le (18:57)
I don't know, we should ask Stella
Li that. I think she'd probably, behind closed, she'd be diplomatic, but behind closed doors, I think she would think, you know, we're gonna kill in the United States. I'm gonna actually, you know, counter your just statement now because a couple of things are a lot different. You know, the world is much more digital, much more software-based.
Lei Xing (19:01)
Yeah, I think she'll be, you know, be modest.
Sure, sure. Yeah.
huh.
Tu Le (19:24)
Young people can't afford cars. So if a BYD, a Chery with Jaecoo ‚Åì a Geely were to come in and own that $30,000, $40,000 price point EV, PHEV, that's a real opportunity because the price of vehicles has gotten to the point where it...
It takes a good portion of your check every month to pay it. And so in a digital world, the Chinese know how to play in the speed game. And you and I know that the product at least needs some massaging, but not like the Daewoo Lemans that turned into a Pontiac Lemans.
35 years ago where it was just not ready for the US market. These Chinese are selling these vehicles and they're popular in other markets so they could plop them over here. Now, the biggest thing is if those restrictions were enforced by the Trump administration, how long would it take to qualify replacement components, replacement software? If there even is
a Western equivalent to the Chinese supplier that currently supplies that to them in China. And so I think a lot of that gap analysis to where, okay, Lei supplies me with a modem, right? Is there a Western supplier that has the same spec at the same price? So it's this intersection between is it close to the same price and does it perform the same?
That's the impossible intersection, I think, for the Western suppliers to meet. And so that's where MSRP would be adjusted and things like that. But again, if they go to the 50, 60, $70,000 price point, they would compete. But this would be more along the lines of what you're saying, a little bit slower, a little bit longer to build that trust. But in the lower point, I think US consumers, the TikTok people are ready to consume these vehicles en masse.
Lei Xing (21:15)
Yeah.
I'm ready.
I'm not on Tik Tok in that statement put out by the prime minister official website, it specifically said, I think 50 % of those are going to be under $35,000 Canadian dollars. And really to bring these cost effective, affordable EVs. That was, I think that was one of the key points. And then to your point, yes, I think
We talk about in China for China, the Chinese are going to face the same in Canada for Canada, in US for US issue. And I think it'll be a lot more difficult than what the foreign automakers are doing in China for China. Because can, do we have a supply base that are ready? Do we have the capabilities, the kind of the tech? That's why the tweak, right? You're not going to buy the exact same
what's available in the Chinese market as you can buy in the Canadian or the US market. It's something maybe a toned down version. So that's something that takes time. And that's what you're saying.
Tu Le (22:46)
Yeah, the other thing too that I think is really important, and this is more about market share than actual sales volume, GM and Ford, that's an easy market for them to sell into. know, Canadian income is much closer to US incomes than Mexico income is to the US, and GM and Ford take that market for granted. And so this is...
potentially disastrous if because the Canadians don't have a horse in the race. They don't have a Canadian automaker that they want to support. That used to be the U.S. automakers because they provided jobs in Canada, in Oshawa, in these places. Now, why wouldn't they support Chinese more in the U.S. market by sheer
market demand, if and when the Chinese do want to start building in Canada, that limits the appeal of US brands in Canada even more. So I think that's another thing to kind of keep in the back of your mind. So I just Googled General Motors sold 300,000 cars in Canada of the 2 million in 2024. So they have 15 % market share, if my calculations are right.
Lei Xing (24:08)
Mm-hmm.
Tu Le (24:08)
Again,
300,000, not a ton from a volume standpoint, but it's 15 % of the market. If the Chinese come in at three, four, five years from now and those 49,000 get to 100,000, 300,000, 400,000, especially as they're building domestically, you know, that's another market that GM got bullied out of. So we need to figure this out from a border.
country standpoint, how we're going to work together. I don't care who the administration, who the president is, who the administration is. We can't be isolated from our two neighbors this way.
Lei Xing (24:43)
But I think the next five years is going to be starting with this announcement. ‚Åì On this side of the world, it's going to be very interesting, to say the least. The prospect of Chinese building in the US. ‚Åì
Tu Le (24:53)
it's just start and and and you and I are
here for it. You and I are here for it. So.
Lei Xing (24:59)
Yeah.
Tu Le (25:00)
So let's do this. I know we started late, but I did want to bring up a couple of things. so actually let's take a step back. We talked about Canada or China coming to Canada. You wanted to talk about it. ‚Åì year end numbers. Let's go to year end numbers for 24 or 25.
Lei Xing (25:19)
Well,
the official CAI numbers, almost 34 and a half million auto sales, 7.09 million exported. Commercial, yeah. And then 16 and a half million NEVs, including exports. That's more than the light vehicles sold in the US last year. And then about 2.6 million NEVs exported.
Tu Le (25:27)
That includes commercial too though, right? 34.
Lei Xing (25:42)
And now we have this Canadian announcement. This year, some of those imports are coming into Canada. The interesting thing is the forecast given for 2026 is very toned down, almost flat. So I think we're going into this period where if we have a market of 35 million vehicles every single year,
it's phenomenal, right? We can't expect growth going up every year, but the structural ‚Åì components is what's going to change significantly, right? We have the prospects of these new millionaires that we talked about joining the BYDs, joining the GLEs, and possibly only a... Yeah.
Tu Le (26:32)
Cherries.
Lei Xing (26:34)
Only a few foreign automakers could remain by the end of this decade in China. So only the strong will compete. And at the same time, export is going to continue to drive. we're seeing that actually, CAAM gave a toned down export growth to only 7.4 million. Interestingly enough. So things are slowing down a bit. ‚Åì
You know, as we talk about this, the price war is alive and well in China. We're in the fourth year, right? 23, 25, fourth year of the price.
Tu Le (27:08)
Well, the model
Y, the decontent model Y is going to launch in China. Tesla is still up to their old tricks.
Lei Xing (27:15)
Yeah, the Xiaomi, I just saw this,
the Toyota BZ3 EV is now under 100,000 RMB for a limited time.
And following the BMW's huge price cuts. ‚Åì Yeah, I think there's going to be a lot of shakeups this year, especially the rankings that are kind of posted of who's going to, you know, ‚Åì how does Tesla maintain their kind of resiliency of it all through the cheaper model Y ‚Åì financing incentives.
and others are pushing the pedal, right?
Tu Le (28:01)
Let me, let me, uh, uh, drill down a little bit further. Yes. Growth is kind of flattening out. Okay. We should still see a little bit of growth 2030. I think it might be, you know, get to 30 million units, 29, 20, 30 million units on the light passenger vehicle side. The one thing that's important is that as the market matures, growth flows, customer acquisition costs increase significantly.
Because now I'm not growing my pie with the market. If I want to grow my pie, grow my market share, if I'm BYD or if I'm Chery or if I'm Geely, I need to take it from Lei Motor Company. And so we should take a picture at the end of last year at Lei. And maybe what we do is we just look at a simple statistic. What's the market share percentage of BYD at the end of 25?
What's the market share percentage of Geely at the end of 25? Cause that's going to be an indicator of probably how much people are or how much OEMs are paying for customer acquisition, whether or not any players have left the market that have significant volume. Because if Geely gains 400,000 units, did they pay more for those customers? Number one, or did one or two companies leave the market and Geely took advantage of that?
and took them away from a BYD or they're fighting for those extra customers. And so the balance sheet should look a little bit different because one of the things that the OEMs can hide during a growing market, bless you, is whether or not they're growing more or faster than the market. In a mature market, you either gain, you're protecting market share as opposed to trying to grow that market share.
Lei Xing (29:34)
Excuse me. Yeah, excuse me.
The interesting thing is we've seen some officially announced targets for '26 So Geely is looking at three and a half million, including everything. BYD, they're kind of saying five to five and a half million. And then you have the kind of the XPengs wanting to grow to 600,000. LeapMotor a million. Huawei HIMA Alliance, a million. Even some of these state-owned automakers, they want to grow on top of 2025.
Tu Le (30:12)
So this lumps them into the traditional kind of ‚Åì mindset, right? Where it's like, well, I take that back because Mercedes and BMW, I think it was an article from our good friend, Jiri on CarNews China. He said that BMW and Mercedes are looking at around half a million units, okay? And. ‚Åì
Lei Xing (30:12)
don't think everybody grows.
Tu Le (30:38)
I actually posted it in my newsletter. And you can talk a little bit about this in more detail. In 2021, BMW had their best year ever at close to 850,000 units, I believe. And Mercedes in 2022 had 770 or something like that. So we're talking over the course of five years, a loss of 20 and 30 % of sales.
Lei Xing (30:45)
Yeah.
Mm-hmm.
Tu Le (31:04)
And they only sell, they sell less than 3 million units each globally. And so China is a disproportionate amount of their sales volume, but also a disproportionate amount of their global profit margin. Okay. So maybe you want to add anything to that.
Lei Xing (31:21)
Mercedes down 19%, BMW group down 12.5%. Audi doing slightly better. I think they were only down 5%, but the volumes are certainly dropping down into the 500s, which means a host of these other even startups are gonna lap them this year. And the early indications of let's say, I think you posted this.
The, let's say something like Audi, the AUDI four letter Audi E5 Sportback, I think only sold like what, 6,500 units, 7,000 units since they launched in September. The CLA has been on the market. We don't know the numbers yet, but yeah, BMW is launching the locally produced long wheelbase version of the iX3 this year.
Tu Le (32:00)
They're not good. I was told that they're not good.
‚Åì they have ‚Åì mule versions of the Neue Klasse out of the Shenyang factory.
Lei Xing (32:13)
Yeah, yeah, yeah, yeah. So
huge year Volkswagen, The the ID era 9X, I think is going to be one of the models that will define the Volkswagen brand in this year, how well that one does, because I can't imagine that model pricing. It's a huge vehicle.
But I can't imagine it priced above 300,000 MMB. Yeah, it has to be in the 200,000 range to even have a chance. Even though it's a.
Tu Le (32:43)
Not with the galaxy, Geely Galaxy, you know.
For
those folks that are wondering what the FX is, that's about $30,000 US dollar.
Lei Xing (32:57)
Yeah, it's the first EREV. It's a kind of L9 sized, I would say, SUV. ‚Åì
And at the same time, the Volkswagen brand in 2025 in China, they just got above 2 million units. It's been going down the last few years and in danger of falling below 2 million units.
So I mean, yeah.
Tu Le (33:23)
So, but let's peel
the layer of the onion back on those Germans, the BB, okay? Because there was a spreadsheet that was posted in one of my WeChat groups. think you might be in the same WeChat group that basically said that, and I'm connecting dots. BMW is forecasting around half a million unit sales. That's what they're communicating to suppliers, okay?
In order for them to get to that 500,000, they have reduced price on two dozen vehicles. On average, so I did an average by 14%. So not 2%, not 3%. One of the vehicles is reduced by 24%. So this hammers home your point about the Volkswagen ID.9 having to be less than
Lei Xing (33:55)
No.
300 other than me, I think.
Tu Le (34:18)
300,000 RMB, probably closer to 250. And so this
If this becomes the normal for the German automakers and especially the premium automakers, they're going to have to learn how to do business and operate differently because the margins disguise their inefficiency. But if they're getting squeezed and again, we're talking MSRP, not, we're not talking in incentive that gives you 20 % off. saying this is the new price.
Okay. So it's a correction because the Chinese competitors are that much lower and add and offer that many more features. Okay. So this gets them to the starting line because they don't have better products, not as a whole. And I think that's really, really significant. mean, 14 % Lei, mean, goodness, my goodness.
The other thing too, and you can talk to this more than me, three series, five series, C-class, E-class, mostly built locally in China. It's the seven series, it's the S-class, GLS, those are all exported from Germany. And that's where a lot of the margin is. ‚Åì That's where they pad their profits. And I posted the Maestro, the ET9.
Lei Xing (35:17)
F
Tu Le (35:41)
All these companies, the HIMA, they're all eating into that seven series kind of flagship halo vehicle for the Germans.
Lei Xing (35:49)
Yeah, the need to balance or sacrifice profit for volume or the other way around, as in Porsche's case, it's never been as ‚Åì critical as this year, I believe, because it's psychologically falling into the, you know, even possibly below half a million units. It's quite jarring. And Porsche, right?
less than, you know, there's almost just over 40,000 units sold in China, less than half of what they did just a years ago. Reckoning, it's a reckoning, really.
Tu Le (36:26)
That's the amazing thing.
If
you graph that the last five or six years, just the Germans individually, the sales, the steepness of that decline is, is unreal, unbelievable. I don't think I wouldn't have even anticipated they'd lose that much. ‚Åì you know, if you asked me in 21 or 22, I'd have been like, yeah, they're going to get killed, but I would have not believed that.
Lei Xing (36:56)
Thank
Tu Le (36:57)
They go below 50,000 units or 45,000 units for Porsche and BMW and Mercedes. I know they are trying, so let me qualify this, but it feels like they're not even trying because sales have retreated so, so dramatically.
Lei Xing (37:15)
Yeah.
Yeah.
Tu Le (37:20)
Let's do this, We have a couple surprises. Lei and I, as you know, will be in Beijing for the Auto Show. And ‚Åì I'm inspired by a few things, these few events that I've gone to recently. So Lei and I are looking at hosting a China EVs and more party. And we may even be building some hardware because we're going to be announcing some award winners. We've made a set of
of categories and I'm going to paste it into the chat. ‚Åì And I'd love your in you. ‚Åì
Lei Xing (37:56)
Like I said, the
company that needs a hug, know which one I'm holding for.
Tu Le (38:05)
So
Lei Xing (38:06)
Well, there's a lot
of them.
Tu Le (38:08)
So this is where.
You viewers and listeners, we would love for your input. and I will put our heads together. We have 10 awards. First of all, we'd love your thoughts on any other awards we should create, number one. Number two, what is your winner for each of these awards? There's 10 categories. And for the people that are listening on the podcast, so the Umbrella EV of the Year, let's...
Lei Xing (38:18)
Thank
Tu Le (38:37)
Break that down into SUV, MPV, and luxury car of the year. Person or executive of the year. Who's the comeback kid? What was the dark? Yeah, well, the comeback kid and dark horse is kind of similar, but maybe it's the dark horse that didn't do that well in 25 that you anticipate does well in 26. ‚Åì
Lei Xing (38:45)
Is there a comeback?
We don't.
Yeah, well...
Tu Le (39:03)
We could break the flop of the year down by product and company. Well, actually, I'm going to add that. ‚Åì then the last two are the Tech That Matters award and the Who Dis. I already know who the Who Dis is, meaning like,
Lei Xing (39:10)
I'm surprised we don't have a zombie award of the year.
Tu Le (39:28)
Where did this company come from and who is this company? I'm going to actually do this.
We want to make this fun. Feel free to post them in the comments. I'll try to get this turned around and then repost it on YouTube. ‚Åì we want to amp up the engagement this year. guys, there's probably 30, 40 people that are very, well, more than 30 or 40 people. But I know it's very difficult to get 9 a.m. Eastern time for the live show. ‚Åì
for those that are engaged, it would be fun just to get your opinions. And the idea would be potentially awarding them physical hardware at our China Eves and More party in Beijing. We haven't figured it out yet. We're either thinking CBD 798 or Shunyi near the convention center. And we're going to...
have a small one, we're hoping that we can get some sponsors. Hopefully one or two of the OEMs can be sponsors. And we want to turn this into the event you go to at the Beijing or Shanghai Auto Show. so between Lei and I, think our networks are vast, global, and pretty significant, but there's going to be a no asshole rule because I'm the asshole. So.
Lei Xing (40:28)
it yeah
Tu Le (40:53)
There can't be more than one asshole at the party and that'll be me. But I'm just joking. We want it to be fun and a celebration. ‚Åì So look out for more details on that. For those that are actually coming to Beijing, look out for the dates. So.
Lei Xing (41:03)
From AI to physical.
There's only three months left basically. So very scary.
Tu Le (41:13)
Yeah, man, it's crazy,
It's freaking crazy. It's like, it's mid January, man. Holy cow. You know, I, yeah, I...
The world has changed with that announcement. The combination of Geely 24 to 36 months, Canada, yes, we're reducing tariffs to 6%. And you know, the head scratcher, like why six? You know, is that like sales tax know, why six? I don't know. I'm gonna ‚Åì ask my Canadian friends real quick, why six? But.
Lei Xing (41:41)
Kind of like sales stats, yeah, basically.
Tu Le (41:48)
And here's the thing, the other thing, and we can get to questions and comments, because I'm pretty much done. You have anything else, Lei?
Lei Xing (41:53)
Yeah,
we're good. ‚Åì
Tu Le (41:57)
Hold on, let me really quickly look at what I wrote about.
Oh, Tesla moved to subscription from one-time cost. Does that make you less want to buy a Tesla or more? Or it doesn't matter?
Lei Xing (42:08)
Yeah, yeah, I mean that's a...
No, doesn't. ‚Åì
I think for me, if I look at myself trading in and still having to pay significantly higher than what I'm paying now with FSD, it's kind of turning off a bit. That's why I see this, right, the affordability. When do we get there?
Tu Le (42:28)
Yeah, yeah.
Well, at least in the United States, mean, right? So, you know, one thing that I did also want to mention really quickly are the benchmark mineral numbers. And I think they say EV. So let's assume that those are BEVs. The total for 2025, 20.7 million vehicles. China was at, like you said, around 13 million, right? So.
Lei Xing (42:36)
Yeah, but...
Well,
yeah, we feel domestic. Yeah. Yeah.
Tu Le (42:58)
Almost. And then
the EU was at 4.3. So together those two were three quarters of total sales. And the EU increased by 33%. US was actually up 1%. So it was flat. North America was down. So that means Canada bought less EVs. That should not be the case next year or this year as the Chinese automakers are coming in. And then...
Lei Xing (43:22)
I think you're on your own.
Tu Le (43:25)
Global share, I read that total sales for vehicles in the world in 2025 is around 90 million. And I'm assuming that's including commercial, but global shares around 23 % ‚Åì with the EU and obviously China leading the way. But China is going to be, I think, less significant this year just because, like you said, ‚Åì the market's maturing.
And it's going to flatten out a little bit from a growth standpoint. ‚Åì So, so what, what we can glean from this Lei is that, that price war in China might dial down, but the brutality of the competitiveness will not because the pie is not growing. Okay. And the international intrigue has been dialed up significantly by our neighbors to the North Canada.
I think that'll be very interesting and everything's gonna happen. Responses, know, chess moves in the first quarter and a half of this year. ‚Åì So keep an eye on this because maybe you and I will continue to make some predictions. So.
Lei Xing (44:33)
Yeah, so this year, so
this Canadian announcement is huge. A couple of other huge developments that we may witness in 26 is the EU's discussion on minimum pricing. There's been some positive ‚Åì development. Official US stance of allowing, really let them come in, right? ‚Åì
Is there an announcement on that front? At that end of day, I think China becoming...
Like the Japan, like Germany, like Korea, where exports or them, these Chinese automakers building elsewhere in the world. Why should that be a problem or why should that be? I mean, everybody else has done it. Should it be natural? Right. We kind of ponder this because there's
domestic market, how large is the domestic market when you have a per thousand vehicle ownership per thousand people that are still significantly lower than the developed markets. But I could be wrong, but I don't think China gets to where the US is, 800, 900 vehicles per thousand. So we think about that and then
Tu Le (45:51)
No, no, no, no, I don't think so either.
Lei Xing (45:54)
where export comes into play to fill that void. So the share of the NEVs are going to grow, the share of export are going to grow. think that structurally should be what's happening.
Tu Le (46:07)
And then the one thing that I think is
Lei Xing (46:09)
And export, one more
point, export not only from the Chinese automakers. I think 2025, if you saw some of the press releases Volkswagen, they actually mentioned that there are Shanghai Volkswagen exporting vehicles. Yet a Kia, Kia export more than half of their sales from China. Yeah.
Tu Le (46:22)
4GM.
Lei, I wouldn't be surprised if Lexus
exports from the Shanghai factory into Japan.
Lei Xing (46:32)
Yeah, right.
Lexus, they're building the Wolfie in Shanghai. ‚Åì
Tu Le (46:40)
So, cause here's the thing, you know, to kind of put a bow on it, the global market for passenger vehicles isn't really global until China starts building a lot of brands from China, start building outside of China. And, you know, complicates things in the short term, but there's this inevitability to it. You and I have known about this inevitability for years.
You know, the other thing that I think, because I'm always also looking out longer term is it could be a 15 year thing because EVs will be commoditized like the manufacture of EVs. There's going to be so many robots, going to be tools, AI tools that make it super simple. There's already less parts to complicate things. And so, you know, we think about this maybe
the, the, cause maybe the smart part is still installed and, and, and, and assembled locally. Like how currently Ojai is kind of a dumb robo van gets shipped to the United States. Waymo adds its bits and pieces, software and hardware, and it becomes their, their, their robo van, their Waymo robo van. Cause I, I really do feel that.
Lei Xing (47:53)
Yeah.
Tu Le (47:55)
The manufacturing part is very, important, but it becomes less so over the next 12, 15 years. And for the automakers at least, their balance sheets start to reflect that. If not, they're going to be in a lot of trouble. So anyways, let's go to questions real quickly or comments. ‚Åì SPX, always, always, always a loyal viewer. Thank you, or ma'am.
Lei Xing (48:15)
Yep.
Thank you.
Tu Le (48:22)
Happy Friday, guys. I think it's a guy. ‚Åì As China EV Inc. ‚Åì looking to build factory and union workers in the US, what advantages do they have over the existing players?
Lei Xing (48:34)
That's your expertise.
Tu Le (48:36)
Well, so I mean, first of
all, they're speed, OK? And they bring a different level of focus and speed. if we're talking union workers, we can talk about the efficiency that they'll create. I think the same thing was said by our good friend, Joe White He wrote a book about it, basically saying people were
skeptical about Toyota being able to make a profit in the building or the Japanese, but they have they're they're much more efficient, you know, they're they're a well run company. And I think the Chinese will find a way to eke out profits. Because if we think about it, the competitiveness is is is not as intense as in in China. Number one. Number two. Everybody comes here to make money.
Okay, you know, and that's across sectors. The United States is normally the profit maker for a lot of companies. And so all else being equal, ‚Åì SPX, if the Chinese automakers have better products, they win.
yeah. Hey, thanks, Felix. So I sat down with Kyle Chan, who does the high capacity. ‚Åì And of course, Felix empathizes because he has a friend that owns a Hyundai, too. Thanks, Felix. Scott Wilson, if Chinese EVs are homologated for Canada, will they automatically be homologated for the US? Can Americans buy them, drive them?
Lei Xing (50:02)
Hahaha
Tu Le (50:12)
So no, they have different requirements, number one. Number two, technically, if you buy it in Canada and own it in the United States, I actually think you might be prohibited from ‚Åì the over-the-air updates. So. ‚Åì
Lei Xing (50:32)
You can
certainly drive these Chinese EVs with Canadian plates into the US. I wouldn't imagine there's...
Tu Le (50:40)
Unless
Michigan or whoever, whatever states that have borders with Canada decide that they can't do that.
Lei Xing (50:51)
Okay, fair enough.
Tu Le (50:52)
You know, because
I could see a scenario where some of the hardliners in Michigan say, no, you can't drive them over here. Like a very, very extreme subset of, ‚Åì because they do that in California right now. You know, they drive people in San Diego tell me they see BYDs all day long.
Lei Xing (51:11)
Yeah.
Tu Le (51:12)
Yeah, so ‚Åì yes, so Mike the car geek says, can a market view cannot be imported if has not been certified approved for sale in the US. They don't. They can't be registered for US plates. Yeah, that I mean, yeah, there's they can't do that. ‚Åì Once the vehicle is 25 years old, then you can then you can. So there are some 90s K cars. So basically it's like.
‚Åì If the car is old enough, it's, ‚Åì what's the right word? Then it doesn't need to ‚Åì fill those requirements.
Lei Xing (51:54)
when they
Tu Le (51:56)
Yes, that's basically what
they're joking about. Hey, ha, vintage EVs. So that's what we should do, Lei. We should figure out what are the collectible EVs and then maybe buy a few of them and have them stored in China for a few years. So here you go, man. Always appreciate your insights. And Lei is right. I identify with him.
Lei Xing (52:14)
Yeah.
Tu Le (52:24)
Yeah, I knew you were a man. Sorry. I just don't want to be ‚Åì presumptuous. Anyways, everyone,
Thanks for joining us as always. ‚Åì This was a really interesting one. I think I'm going to try to get some some little short marketing shorts out there.
Lei Xing (52:37)
It's always interesting
when breaking news come out right before our show.
Tu Le (52:43)
We will. we'll see y'all next week at the same time. Good morning, good afternoon, good evening.