Episode #235 - Robotaxis Scale, Tesla Pushes FSD, and the Premium Auto Model Starts to Crack

In Episode 235, Tu and Lei break down a pivotal week for autonomous driving, global EV competition, and the future of premium automakers—from Silicon Valley to China and Europe.  

The conversation opens with a surge of AV and robotaxi news: Tesla removing safety drivers in Austin, shifting FSD to a subscription model, and signaling potential approval in China and Europe; Waymo expanding into Miami; DiDi launching a new robotaxi platform in China; and large-scale robo-van ambitions from Mobileye–Volkswagen and Geely’s Caocao Mobility. Together, these moves signal that autonomy is no longer experimental—it’s scaling.

Tu frames autonomy through four lenses: technology readiness, silicon and cloud stacks, regulatory approval, and societal impact, including job displacement and cost reduction through scale. While Tesla remains the benchmark, Chinese players like XPeng, Huawei, and Baidu are rapidly closing the gap—supported by a more permissive regulatory environment in China.

The episode then pivots to a blunt assessment of the premium auto sector. Porsche’s collapse to ~42,000 units in China, deep price cuts from BMW and Mercedes, and the stark comparison between Porsche’s Macan EV and Xiaomi’s YU7 highlight how “premium” is being redefined by software, features, and price—not heritage.

Tu and Lei argue that the high-margin glory days for German luxury brands are over, not just in China but globally, as Chinese OEMs demonstrate faster iteration, lower costs, and mass-market appeal—especially to younger and female buyers. The discussion closes with battery swapping (BAAS), cold-weather EV realities, and whether Chinese automakers could realistically build trust and scale in North America.

Strategic, candid, and forward-looking, this episode explains why autonomy and affordability—not badges—will define the next era of the auto industry.

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🔑 SEO-Friendly Keywords (for description / Apple Podcasts)

China EVs & More, Tu Le, Lei Xing, Sino Auto Insights, autonomous vehicles 2026, robotaxi expansion, Tesla FSD subscription, Tesla autonomy China Europe, Waymo Miami, DiDi robotaxi, Mobileye Volkswagen robovan, Geely Caocao Mobility, XPeng autonomous driving, Baidu Apollo, AV regulation China, L3 L4 autonomy, Porsche China sales collapse, BMW China price cuts, Mercedes China sales, Xiaomi YU7, Porsche Macan EV China, premium EV market China, affordable EVs, battery swapping BAAS, NIO battery swap, future of mobility

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⏱️ Chapter Timestamps (for YouTube description)

00:00 – Welcome & episode overview

02:20 – January slowdown in China EV sales explained

02:45 – Tesla autonomy headlines & safety driver removal

04:10 – FSD approval talk in China & Europe

05:25 – Cannonball Run: Tesla zero-intervention drive

06:45 – Framing autonomy: tech, policy, jobs & scale

09:30 – Robotaxi expansion: Waymo, DiDi & China vs US

10:50 – Robo-vans at scale: Mobileye–VW & Geely plans

12:30 – Regulation: why China is moving faster on L3/L4

14:15 – Tesla vs Chinese AV players: closing the gap

16:10 – Porsche’s collapse in China

17:45 – Are the best days over for BMW, Mercedes & Audi?

18:30 – Macan EV vs Xiaomi YU7: a brutal comparison

20:30 – How China is redefining “premium”

22:15 – Renault’s China R&D model as a blueprint

24:00 – Pricing traps: halo cars & product cannibalization

26:00 – Volkswagen ID.ERA 9X and pricing pressure

28:00 – Margin compression & operating like a startup

30:15 – Cadillac, GM & Chinese tech partnerships

31:50 – Battery swapping & cold-weather EV realities

34:30 – BAAS in North America: why it’s hard

37:00 – Can Chinese brands win trust in the West?

39:30 – Audience Q&A

42:00 – Final thoughts & what’s n

Transcript

Tu Le (00:00)
 Hi everyone and welcome to the China EVs and More podcast 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. We'll open the room up at around the 40 minute mark to anyone who's keen to ask us any questions or make any comments. You can also add your comments or questions into the chat box. What Lei and I discuss today is based on our opinions and should not be taken as investment advice.
 
 For those that are new to the show, welcome. And to our loyal listeners and viewers, welcome back. We ask that you help us get the word out about this podcast. I've been told by several people that's one of the best or the best podcasts that's focusing on the Chinese EV and mobility sector. So let's help us get the word out about this to other enthusiasts. And of course, tune in again next week.
 
 My name is Tu Le, I am the managing director at Sino Auto Insights, a global management consultancy that helps organizations bring innovative and tech focused products and services to the transportation and mobility sectors. I write a free weekly newsletter that we pull many of our discussion topics from. You can sign up for it at sinoautoinsights.substack.com, which of course I encourage you all to do.
 
 Lei, at least in Michigan, it's freezing too. I don't know about mass, but can you please introduce yourself?
 
 Lei Xing (01:23)
 ‚Åì
 
 a freeze and snowstorm confronting imminent. This is your co-host Lei Xing, former chief editor of China Auto Review, and this is episode 235. Yeah, so there's a huge storm brewing, supposed to get 15 inches of snow. Before that, a deep freeze, like minus, almost minus 20 Celsius. It's pretty cold.
 
 Tu Le (01:30)
 my god, it is nasty out there.
 
 It
 
 feels like minus 12 right now in Michigan.
 
 Lei Xing (01:52)
 Which
 
 is kind of interesting because January for the Chinese EV market is kind of a freeze. I think there's been some numbers. think CPCA said they projected January passenger NEV retail sales is not going to get out of a million units. So I think we expected that.
 
 I don't draw anything from that. That was expected from last year from the consensus. So we'll see how it goes as we go past the Chinese New Year, which is late this year. I have to look at the Q1, but a lot of robotaxi news, I'd say from the last day, both China and the US.
 
 So we can start there. There's more news about this Canadian China EV play, who's going to come in first.
 
 Tu Le (02:46)
 Let's start with AV News.
 
 Lei Xing (02:47)
 So who else but Tesla is again in the news. And there's so many, like the both sides of the debate is interesting to see, you wow, it's a, I tweeted, is it a half GPT moment chat, GPT moment, or is it a GPT moment at all? When a couple of their vehicles in Austin took away the safety drivers. And then there's talk about there's,
 
 Tu Le (02:51)
 Hmm.
 
 Lei Xing (03:14)
 monitors behind them in different Model Ys And at the same time, they took away autopilot in the configurator, I think which has riled up some of the proponents And with FSD into the subscription mode starting in February 14. So lots of things going on. And China
 
 just Didi just launched their R2 robot taxi with Aion It's a joint venture collaborated. And then Waymo expanded to Miami officially, right? It's live. So all of this going on and Elon was talking over at the World Economic Forum. ‚Åì Yeah.
 
 Tu Le (03:44)
 Mm-hmm.
 
 Well, he also said that FSD
 
 could be approved next month in China and Europe.
 
 Lei Xing (04:04)
 in
 
 Europe and China. Yeah, hopefully, hopefully, he said hopefully.
 
 Tu Le (04:08)
 I think that's his way of trying to put pressure on the regions, on the countries. But, you know, I should also congratulate my friend Alex Roy, who did a cannonball run. He did a cannonball run, I think with a Vietnamese guy and from California when, so what was the guy's name? Matt Goss?
 
 Lei Xing (04:11)
 Yeah.
 
 yeah, right. I forgot to mention that.
 
 I forget, but it was like three people, all right?
 
 Tu Le (04:35)
 Yeah, anyway, so he did
 
 he did California to Florida. The Cannonball Run is technically New York to L.A. or L.A. to New York, one of the other. so and another famous Cannonball Run alum is Rich Rawlings, who did that show Fast and Loud. So the Cannonball Run is famous, infamous. And Alex did it.
 
 I think earlier this week or last week in a Tesla with the latest software, zero intervention. So congratulations to Alex and those guys. That's for Tesla to be able to have that feather in their cap is pretty significant. Now, I don't think you and I have ever poo-pooed FSD's capabilities. I'm more concerned about the regulations around it.
 
 Lei Xing (05:03)
 few days ago, yeah.
 
 Tu Le (05:25)
 and the people that are using it irresponsibly. That's my concern. And the automakers seem to be much more careful about it in incrementally increasing their own versions capabilities. In GM's case, it's Super Cruise and Ford, it's Blue Cruise. But we get to that point in 2028 where it seems like
 
 more than one, including we're talking about the Chinese, maybe this year, later this year, launching level three in certain geo-fenced areas and use cases. not only intelligent driving is pushing forward, but you'd mentioned earlier the robotaxi stuff. that's called progress folks. And it's not just in China, but also in the United States.
 
 Lei Xing (06:16)
 Yeah, and I think it's fair that I think to this point, Tesla FSD remains the gold standard. I'd say for every Tesla FSD wannabes in China, Xpengs, NIOs, Huawei's, think they see that as XPeng, He Xiaopeng himself, he made a bet.
 
 where the chat GPD moment happens probably not them taking away theoretically taking away the safety drivers but really if
 
 water flowing from the faucet you have a vehicle with FSD you put it on that network and it drives itself when are we going to see that hopefully in the coming years but I think so I think I think this is yeah I mean after CES I mean this year is is we are seeing a lot of scaling whether
 
 whether it be the Waymos whether it be the Tesla's, whether it's the true robot taxis or the fake robot taxis or will. I think we're seeing that happening more and more. That's the, you my kind of, yeah.
 
 Tu Le (07:31)
 You know, what's really important is kind of thinking this through several different lenses. You know, I'll just look at it and explain it through three buckets. You know, there's the technology bucket, there's the stack, the current silicon, the current, you know, compute in the vehicle, the edge computing, and then the communication between the cloud and the vehicle. Is that fast enough to make all these decisions so that
 
 We can have a true level four. That seems to be the case. The technology is available. Tesla is poking everybody in the eye and saying, you know what, we only need cameras to do it. And then the next part is the actual regulatory environment or the policy environment. And China seems to be leading the way on that as Chinese EV companies are talking about level three this year.
 
 And that couldn't happen without regulators approving that. Now, the third bucket is going to be the actual effects it has on the industry, on the sector. We know in China, there are a lot of taxi cab drivers. Okay. And so how does this affect their number of rides that they're giving every day? Cause
 
 Let's assume that there's a pretty strong lobby there is in the United States anyways, for taxi drivers in California and New York and things like that. So there's also that if we displace jobs and employment, what happens? Because the government needs to take into consideration that as well.
 
 we should be looking at it through these, at least these three lenses. And then the fourth is then how cheap can things get? Because you had mentioned scale just now, We scale by making things much cheaper. So one of the factors anyways, but that's kind of how I would frame it.
 
 Lei Xing (09:32)
 Boy, in terms of scaling, so we've seen two recent announcements. So the Mobileye versus Volkswagen Moia they want to put 100,000 robovans by 2033. And Geely, they just announced their 20, kind of 2030 strategy where the Caocao Mobility, they want to put 100,000 robo taxis already. We're not even talking about the Ponys, the Baidus, the WeRide.
 
 And we heard about Didi this morning. ‚Åì The numbers are ballooning. So then goes back to your point about replacing the human drivers. What's going to happen, right? That's a huge issue outside of the tech itself. I think the tech is the simple part, right? So it's the policy, whether it's supportive.
 
 Tu Le (10:06)
 Way more heads there on Robovan.
 
 Lei Xing (10:27)
 And then really the societal ramifications. I think that's still being played out. at least I think in China, the encouragement, the support for the AVs has been there all along.
 
 Tu Le (10:41)
 Well, and that's the other part because when we talk about robotaxis, I think many people assume that they're electric or clean energy, but that doesn't need to be the case. Waymo is still using the I-PACE, but most of their vehicles are going to be clean energy, but that doesn't necessarily need to be the case. Again, I should be going to London sometime this year in...
 
 Lei Xing (10:42)
 it.
 
 Tu Le (11:04)
 If possible, I'd love to try the Baidu, the Wayve and the Waymo all out in the City of London.
 
 Lei Xing (11:06)
 dish. Yeah, I do. Yeah,
 
 Baidu is working with both Lyft and Uber in London, I believe. I'm mistaken. So that's interesting. ‚Åì
 
 Tu Le (11:17)
 Mm-hmm. Yep.
 
 There's a subsidiary
 
 of Lyft called Flex Drive and I'd spoken with the CEO of Flex Drive, John Parks, and they are looking to partner with any and every RoboTaxi ‚Åì provider.
 
 Lei Xing (11:26)
 Yeah.
 
 and
 
 Yeah, and at the, don't know if you watched, there was a section on whether EVs will dominate at the World Economic Forum where Stella Li was conversing with Michigan Governor Whitmer. And the number one thing they talked about was policy support where China has been stable and the Western world, US, Europe has been fluctuating. It was one of the primary issues.
 
 that were talked about in that conversation.
 
 Tu Le (12:06)
 Well, this
 
 is where I need to watch that. have not watched it. There is a policy conference next Tuesday that'll probably bring that up a little bit. know, Governor Whitmer, she's almost lame duck status because she only has a year left, but she's going to these things because I think she has aspirations for higher office. And so it's...
 
 Lei Xing (12:21)
 Yeah. Yeah.
 
 Tu Le (12:31)
 To get that picture of, we call her Gretch in Michigan, of Gretch and Stella would be, I would make that already a candidate for picture of the year, photo of the year. Because, I spent time this week talking to the Toronto Bureau Chief for Automotive News about the whole Canada thing.
 
 Lei Xing (12:42)
 Yeah. Yeah.
 
 Tu Le (12:52)
 We can circle back and talk about that a little bit, but you'd also wanted to talk about... and when should we bring up the whole awards thing?
 
 Lei Xing (13:04)
 I think we'll have it finalized probably for next episode. I mean, we already have most of the awards done. Yeah, so we'll probably talk about that next episode. yeah, Canada is a thing. Also, speaking of policy support, Germany came back with EV subsidies. the way, yeah, it's very interesting.
 
 Tu Le (13:08)
 Next episode? Okay. ‚Åì We've had most of the... yeah.
 
 3 billion euro, so 3.5 billion dollars.
 
 Lei Xing (13:28)
 If you don't have kids in the house, don't get as right. I think the setup was very interesting. It was tiered, capped at how much you make. I think it was like 80,000 euros, but with two children. Yes. So at the same time, the minimum pricing decision is still to be made on the Chinese EV imports.
 
 Tu Le (13:42)
 and includes Chinese cars.
 
 Lei Xing (13:57)
 So these are very conflicting. at the same, you talk about London, UK. Stella mentioned it, of UK having that pay per mile fee for EVs. And she kind of alluded in saying that's kind of stupid, right?
 
 Tu Le (14:16)
 Well, the fact of the matter is though, some places, some cities, some states, they charge a tax fee for gas. And the cities and states that adopt EVs pretty quickly, there's going to be a big hole in their budget because of the lack of revenue that they're going to generate.
 
 due to less people using and purchasing gasoline. These are kind of fringe issues, not fringe issues, but they will become more more highlighted as, at least in the United States for Western folks, as we see more EV adoption. pointing back to the benchmark minerals numbers, year-end numbers, about 20 % of all vehicles sold last year were clean energy vehicles.
 
 China driving a lot of that, Europe also playing a decent role in that 20%. So Europe is clearly leading the United States on this issue. And they seem to be much more serious about the net zero, the carbon neutral goal for 2035. Now they're gonna push it out. They're not gonna hit the 2035 goal, but you know, we gotta get there.
 
 And I don't know how we're going to get there. So one thing I did want to ask, and we've talked about this a lot over the last several episodes, probably the last year. But I had a huge rant in the newsletter this week, long, long post about Porsche and all its troubles. But they're at 42,000 units.
 
 under 300,000 units total for the year. The United States was up single digits percentage wise. Europe was down like 15%. Are the best days for Porsche overlay? And let's broaden this out. We talked about this a little bit as well, but let's just be very direct on this conversation. Is Merc
 
 BMW, Audi, are their best days kind of over? Because you and I believe premium is redefined in China and it doesn't currently include those companies. So what are your thoughts? How do they get back to being the kind of example of premium in the automotive space?
 
 Lei Xing (16:28)
 So.
 
 Well the answer is definitely yes of Porsche. Relatively for the ABBs from what I'm hearing their internal projections are all under half a million for 2026. So Porsche they're actually reducing further the network from previously planned 100 down to 80.
 
 Okay, so I how do you support a volume 40,000 units, right? And in order to maximize profitability, if you still have that. But definitely what all of them are doing is having China as the local R &D center, where I mean,
 
 Bimmer they put a press release on the locally produced IX3. Look at the number of Chinese companies they mentioned that press release. That's a mandatory that you have to have the Chinese inside in order to even have a chance.
 
 I mean, mean, to answer your question, yes, the best days are over.
 
 Tu Le (17:54)
 globally, not just in China.
 
 Lei Xing (17:56)
 Yeah, you know, it's no longer because of the Chinese redefining premium or luxury. think we nowadays when you look at an Audi, when look at a BMW, when you look at a Mercedes, it doesn't have the luxury connotation as before because we look at it with a different lens. Yeah.
 
 Tu Le (18:18)
 So
 
 this week's newsletter, part of my deep dive was looking at the Macan versus the YU7 launch. The Macan launched in Q4 of 24, YU7 launched, the Xiaomi YU7 launched middle of 2025. Yeah, and if we're using 7RMB as a FX rate, the Macan EV launched at over...
 
 Lei Xing (18:34)
 last year.
 
 Tu Le (18:47)
 $100,000 effectively. The range was around 220 miles, so very, very, very low. The YU7 had many more features and it launched that 250,000 RMB
 
 Lei Xing (19:05)
 I think the cheapest Macan in the Chinese market was right around $600,000 RMB Yeah, so $80,000 roughly. A little bit more than $80,000. But yeah, it's at least twice as much as the YU7.
 
 Tu Le (19:12)
 Yeah, 600,000 RMB, yep.
 
 Yeah.
 
 And the YU7, Xiaomi sold well over 400,000 units. YU7 is probably 1.3, 1.4 to 1 ratio on YU7 to SU7 sales for Xiaomi. And so, the Macan EV, they had years to develop it, three, four, five years.
 
 Lei Xing (19:31)
 lot of them.
 
 Tu Le (19:44)
 Xiaomi's automotive division has been in existence for four years, and they've launched two vehicles in that time frame, and Porsche has not.
 
 Lei Xing (19:49)
 Yeah, yeah, close to five years
 
 since 2021 announcement. Yeah, so yeah.
 
 Tu Le (19:55)
 So that's what they're up against. I bring all that up to say that a Chinese company can stand up a brand new division. Now, maybe they were working on things behind the scenes before they formally announced that they have an automotive division. So let's say a little more than four or five years. But they have two vehicles that sell well over 400,000 units each, likely more than 500,000 this year.
 
 Porsche can't even sell 42,000. Okay. So it's really, really, you look at that and you think about how were they going to compete when a car fully featured vehicle that I would argue at least I, and I haven't driven the U seven for very, you know, but I would argue when I sat in it, the fit and finish was almost as good as the
 
 Lei Xing (20:52)
 One likely outcome is...
 
 Can Porsche utilize China's local R &D capabilities for their global markets? Maybe they have to, because Renault is doing that already. They have the Twingo EV developed in China in under 21 months. They have another model coming with China right at the center of R &D. They want to do it in 16 months. Renault, the CEO Renault was in China recently.
 
 I think just this past week visiting where you don't really produce that much in China, but you still utilize China as an R &D pillar.
 
 It's one way that has played out for the foreign automakers that don't produce in China. I think which is working for Renault and that still signifies the importance of China in their global
 
 a strategy, right? Porsche may be going that way as well. I mean, to the day, were the only import limited number of ultra niche products, manufacturer. Yeah, they're probably going to end up like that, but still utilizing the China R &D for features for the rest of the world.
 
 Tu Le (22:01)
 9-Elevens, Panameras.
 
 So we agree that it's very realistic that Porsche could build in the United States and in China.
 
 Lei Xing (22:17)
 Yeah. ‚Åì
 
 Tu Le (22:19)
 The other thing
 
 that I will actually look at this a little bit differently because Renault is a mass market brand. Part of Porsche's appeal is the racing heritage, the brand. That's where you get the premium from. Chinese customers aren't willing to pay exorbitant amounts of money anymore for that type of premium. And a simple e-motor developed by NIO
 
 Lei Xing (22:31)
 Yeah.
 
 Tu Le (22:45)
 can now match anything from a performance standpoint that Porsche rolls out. And the fact of the matter is that in China, 50 % of their sales goes to women. this is what is super, super interesting and how they react and respond with their marketing moving forward. Because if,
 
 Lei Xing (22:52)
 it.
 
 What?
 
 Tu Le (23:11)
 The leadership at Porsche in China aren't recognizing that women, so let's just say this, Macan and Cayenne are 50 % of their sales, more than 50 % of their sales. And more than half of those sales go to women. So if you're not marketing to women, in the United States, it's still very male masculine advertising. Nothing's really changed.
 
 You can't do that in China and expect to gain any of those sales back. But if they go too heavy into the women advertising, they might alienate the other markets. So it's a fine, fine line.
 
 Lei Xing (23:51)
 And the wider Volkswagen group, right, if you think about the Volkswagen brand, if you think about the four-letter Audi and the four-ring Audi, plus Porsche, they're actually competing. And I'm saying this because if you look at the ID.era 9X, when that thing comes out, the value for money for that thing compared to an Audi E5 Sportback,
 
 That's an issue that I have to contend. Because the ID.ERA.9X looks pretty sweet. The only thing left to do is price it right. Otherwise, it's going to be, can it go to the root of an ES8 or is it going to be bust? I think that's going to largely contention upon the pricing. And they don't have too much work to room to work with on the pricing because
 
 Tu Le (24:33)
 And we should point back.
 
 Lei Xing (24:41)
 Normally in a less competitive world, they could deal with that. imagine that...
 
 Tu Le (24:46)
 Oh, well,
 
 since you brought up the ES8, look how long it took them to kind of figure out pricing strategy for that thing. In NIO they couldn't look at ES8 pricing in a vacuum because it would affect, it would cascade down to its other products because if they price the ES8 aggressively, the ES6 and ES7 can't be within 10,000, 20,000 RMB because it would be cannibalized.
 
 Lei Xing (24:54)
 Yeah.
 
 Tu Le (25:13)
 those products will be candle by. So when you aggressively price your halo product or your biggest product, then you have to kind of reconcile the rest of your product strategy. And Volkswagen will have to do that, especially if the ID era is priced to where we think it's going to be priced.
 
 which is sub 250, 300,000 RMB.
 
 Lei Xing (25:40)
 Yeah, yeah, that's uh, it cannot be over 300,000 and B it cannot be if it's priced over 300,000 it's done. Yeah. So.
 
 Tu Le (25:46)
 You You cannot.
 
 And so,
 
 and then Volkswagen group, heard there was rumors that Rivian and Volkswagen group were having problems with their relationship. and if Rivian can't reconcile that and figure things out between the two of them. And they end up blowing up that partnership Rivian is going to be in a lot of trouble. seems.
 
 Lei Xing (26:00)
 you
 
 Ugh.
 
 Tu Le (26:11)
 So what else?
 
 Lei Xing (26:13)
 And
 
 then the BMW ix3, the locally produced, interestingly they want to export that to the Southeast Asian markets, including India, right, the long wheelbase, which is how do you price that one? Remember the first one that came out, they dropped by $10,000 up on launch. That was like four years ago, five years ago, yeah. ‚Åì
 
 Tu Le (26:33)
 Within 30 days, I think three weeks, wasn't it?
 
 So.
 
 But this points back to my contention that the glory days, at least the high margin, profit margin glory days for the ABB and Porsche are over. And they'll always be in the China market because it's a 30 million unit market. And they can't get that bang for their buck anywhere else in the world. But the one thing that I also pointed out is that
 
 Let's say, Lei, you have 35 % margins on your products. So you operate that way. Okay. Now your margins get squeezed to 10%, 7%. So you have to squeeze out efficiencies in places to push that to that level. And, you know, all these things that...
 
 Porsche employees get these benefits, all these things that the marketing spend, you can't look at it the same way because you don't have those 35 % margins to fall back on. So can a company like Porsche, BMW, Mercedes, who are used to just booking bales of cash every quarter, generally speaking, can they work on a shoestring budget?
 
 and still be effective as a premium automaker. I think that'll be very telling. How do they do that? Because again, I don't see a lot of new management from these companies. So current management are going to have to be able to reinvent these companies in order to be more efficient, less focused on the Western markets like the US.
 
 and Europe, and then to your point, moving into Southeast Asia, moving into South Asia, which tastes are different, use cases are different, average sales price for vehicles is different. So a lot of things that they need to take a look at as they pivot more towards Asia, Southeast Asia and South Asia.
 
 Lei Xing (28:52)
 The bind is not only losing that pricing premium capability, but also when they talk about China's speed, it's not really the true China speed that's been operated on. But I think that's the bind that you have, right? The ID.ERA.9X How fast do you iterate that into the 2027 version, 2028 version?
 
 It's yeah, so I
 
 Tu Le (29:23)
 And
 
 I'm going to be honest with you, European and US market will probably get whiplash if they iterate as fast as they should in China, in the West. I don't think it's necessary and I think it would confuse consumers.
 
 Lei Xing (29:39)
 Yeah.
 
 Tu Le (29:40)
 So they have to operate like they're running a middle distance race in Europe and the United States while they're sprinting in China. And we know that up until this point, they haven't been able to sprint. They needed steroids in the name of XPeng and Leap Motor. Mercedes, they have smaller partnerships, but they have not made
 
 a huge, huge commitment to any Chinese EV maker yet. And I haven't heard anything. Have you heard anything about dancing with anyone? Yeah, me neither. I have not.
 
 Lei Xing (30:13)
 No. Higher. No. Higher.
 
 No.
 
 Tu Le (30:18)
 So, hey, what are your thoughts on a random thing? I was talking to one of my friends who happens to work at GM. What do you think of the Chinese F1 driver that they hired? Do you know anything about him? I don't know. Yeah.
 
 Lei Xing (30:29)
 Zhou Guanyu I mean, he's
 
 a popular among the fans, right? The only Chinese driver in F1. So I think it'll be a nice plus in terms of brand. But mean, Cadillac is...
 
 Tu Le (30:42)
 You know,
 
 I got to say I'm pleasantly surprised about Cadillac's aggressiveness and how they're not like shrinking. They're trying to make way in the China market because they can do that because they feel like they bottomed out. And I think that's really, really important. I was told that a Cadillac
 
 Lei Xing (30:52)
 Yeah.
 
 Tu Le (31:04)
 with Momenta technology is going to be launching very soon as well in the China market. that, to your point about Chinese partners, every foreign automaker in China is highlighting their partnerships with the Chinese partners. So I think that's a really important distinction that we haven't seen before.
 
 Lei Xing (31:24)
 Yeah, GM in China are still pretty, I mean, more than half are Wulings Baojuns and then Buick is actually getting better because the recent launches of the Electra sub-brand GL8 has been strong. of the right, you know, why the reason why I talk about one of the wars is GL8 is actually remaining to be the OG. I think there's still the number one MPV if you combine all
 
 Tu Le (31:38)
 You know the...
 
 Lei Xing (31:53)
 powertrain. So.
 
 Tu Le (31:55)
 One thing that GM did announce is that they're moving Buick Envision manufacturing from China, away from China. it's, well, it's so hard to freaking tell.
 
 Lei Xing (32:03)
 Finally.
 
 Kissing up.
 
 Tu Le (32:17)
 where the administration is going, know, the Detroit Auto Show last week or two weeks ago or last week, you know, I think they didn't articulate it directly, but like the uncertainty is crippling to the tier ones and the OEMs, but they need to continue to do business. And so, you know, one of the things that I asked,
 
 David Kennedy, the Automotive News guy, the Toronto bureau chief was, know, does he, does he see Canada becoming a hotbed for battery manufacturing in, in whether or not Carney thinks or his administration thinks that, Mark Carney is the prime minister of Canada. Kits are enough, you know, because 49,000 is not a lot of vehicles, but you know, we do know.
 
 that Tesla already has factory, not factories, but retail locations in Canada. They seem to be potentially an early benefactor for that door opening. But he also said that Tesla sales year over year are down 60%. And so not providing autopilot is probably not gonna help.
 
 Lei Xing (33:23)
 What?
 
 Well, it's not that clear to me.
 
 When Carney talks about Chinese EVs, do they mean Chinese EVs produced in China or Chinese branded EVs? I don't know whether that was made clear. So the...
 
 Tu Le (33:44)
 I think it's meant to be.
 
 The details need to be negotiated. But what David said was that if a Chinese brand is building in Europe and ships to Canada, that's not part of the 49th. That's what David said. He was looking at that as it should be categorized differently.
 
 Lei Xing (33:53)
 end
 
 So you can see this.
 
 So it should be imported from China, is that correct? Not from other parts of the world. So a Chery let's say produced in Mexico, imported into Canada wouldn't count. Something like that.
 
 Tu Le (34:10)
 Yes. Yes. Right.
 
 Right. Well, and also like, you know, if Tesla is a benefactor, they're an American brand building in China. Right. So.
 
 Lei Xing (34:27)
 Yeah,
 
 so that's why I was like, you I know there's a lot of talk about trying the Tesla benefiting first, but it has to be the details. ‚Åì It has to be, you know, we have to look at the details, but yeah.
 
 Tu Le (34:33)
 Well, that's because freaking we have so many Tesla stands on our socials and it just freaking pops up.
 
 And if you think about it, there's that Stellantis Windsor factory, okay? Could Leapmotor
 
 Lei Xing (34:51)
 I mean, potentially,
 
 e-motor, yeah, it could be even one. Utilizing a dealership footprint even.
 
 Tu Le (34:56)
 Right away, right? You know? So...
 
 Yeah, renegotiating USMCA becomes really, important for the United States. And I wonder if Stella had any comments to Gretch about, let's kick the tires on Michigan.
 
 Lei Xing (35:08)
 And the other part about
 
 Well, behind the scenes, who knows? She didn't make it public, but now I saying that remember Chery so there's news about the officials from Canada last week visited Chery, About them possibly setting up shop or importing the Omoda and Jaecoo vehicles. But remember, Chery has gone through all of that. They're active in Mexico, one of the top leading Chinese brands. They went through this
 
 Tu Le (35:24)
 You know?
 
 Right?
 
 UK.
 
 Lei Xing (35:50)
 In the early part of the pandemic, they tried to enter the US via the Vantus brand. Do you remember that? Through HaAuto, HAAH, a dealership group. That kind of went anywhere. It was based on the Exceed models. So they already have this experience, right? Working through that process. Then, yeah, sure.
 
 Tu Le (35:57)
 Mm-hmm.
 
 Yeah, they're battle tested. And,
 
 you know, the companies in China that are shipping in the millions should be looked at differently than the companies that are shipping in the tens and hundreds of thousands. So the tier one is going to be Tesla just because they already have a network in Canada, but then BYD, Geely, Chery, Great Wall, because they ship in the millions.
 
 Lei Xing (36:25)
 Yeah.
 
 Tu Le (36:38)
 and their apparatus is a bit more robust than the next tier. My guess would be Leap Motor, XPeng because they have products I think would do well in the Western market, the G6 and things like that. Even the MPV I think would do pretty well. And then...
 
 Lei Xing (36:52)
 Yeah.
 
 Tu Le (36:57)
 The tier below that. then there's this article on CarNewsChina I don't know if you saw it, but there's a company that exports, a Chinese company that exports Chinese EVs. And the number one export for Europe was Xiaomi. So they do all the paperwork and I don't know. So is the, I need to find out more because it is,
 
 Lei Xing (37:11)
 Yeah.
 
 Tu Le (37:21)
 the Xiaomi YU7 and SU7 homologated for Europe? Or how does that work to get it plated?
 
 Lei Xing (37:27)
 That must be
 
 in process because we do know they want to launch next year into Europe, 2027. So that must be going on right now if they're preparing, if things are rolling.
 
 Tu Le (37:41)
 And think about that, Lei,
 
 if it's the number one exported brand in Europe, we just talked about the premium brands kind of losing their lust. The Europeans, if Europeans start to buy Xiaomi as a replacement for their three series, their X5, X3, man, dude, that is going to be trouble, trouble, trouble for ABB and Porsche. So not good.
 
 Lei Xing (37:52)
 Yeah.
 
 Hmm.
 
 no.
 
 I just did a CES recap. 2026. I've done that. I mean, you've done your share of recaps for auto shows. I've done mine at our good friend Bill Russo's event, the automotive committee. So I think it was like my third or fourth year. I just kind of went through what I saw and I left at the very end. said China versus
 
 and I crossed versus out. And I said China crossed versus out and the West, the race to advance redefined and affordable mobility was something I kind of left at the very end for people to ponder, right? Because affordability is what Carney talked about. Not only the Chinese can provide affordability. ‚Åì
 
 Tu Le (38:59)
 So
 
 Canada has a similar challenge to the United States where the MSRP is going the wrong way and it creates a tidal wave of potential demand for the Chinese brands as long as they stay under a certain price point. ‚Åì
 
 Lei Xing (39:00)
 Yeah.
 
 Thanks
 
 And
 
 also the way we can look at it is what happened to China 40 years ago, when China invited foreign automakers to set up joint ventures. I feel like it's the same, but the other way around, right? For Canada to invite Chinese investment to help build the EV industry.
 
 Tu Le (39:35)
 So I
 
 get the impression that Canada is probably kicking the tires on JV partners. So the shoe is on the other foot where there needs to be a local JV partner for the Chinese automaker to build in Canada. So maybe that's the path for the US as well. Maybe Canada, because if you think about
 
 A company like BYD or Geely, could. The size, the product portfolio that they have, the large product portfolio, they could build a factory in the US and in Canada and be fine. As long as the USMCA gets renegotiated ‚Åì in a way that benefits both parties.
 
 Lei Xing (40:09)
 Nope.
 
 I think we'll wait.
 
 What we can inform at least...
 
 I was going to say that what we can infer at least from Trump's comments that the BYDs and the Geelys they'd have to build in the US.
 
 Tu Le (40:34)
 Right.
 
 Lei Xing (40:35)
 for it to work, they can't import from Mexico or Canada to be in the US. Then it's a matter of time and where, right?
 
 Tu Le (40:44)
 Well, and that's
 
 the constraint that building in Canada creates for the Chinese automakers. The domestic market is probably, for the foreseeable future, is probably not large enough to support 150,000 unit, 250,000 unit factory unless a good portion of that capacity is exported.
 
 Lei Xing (41:10)
 And then.
 
 Tu Le (41:10)
 So
 
 if BYD built a 250,000 unit plant in Canada, they couldn't sell 250,000 units in year one, two or three probably.
 
 Lei Xing (41:20)
 Now all into the longer term, think landing in the US is the easy part. Building the brand into an Americanized feeling brand like Hyundai and Kia, that's going to take a long, time, if ever.
 
 Tu Le (41:38)
 That's a good debate.
 
 Lei Xing (41:38)
 especially with the
 
 politicizing of China. ‚Åì
 
 Tu Le (41:42)
 That's a good discussion to
 
 have. have an idea. So I will circle back with you, but we do have one question from SPX Nomad. Good to see you again, SPX Nomad. And I'll let you start this off, Lei. How likely or well-received would a BAAS model being viewed in Canada and US compared to the gas station level convenience?
 
 Lei Xing (41:52)
 Okay.
 
 I think if power swap works in Europe, especially some of the northern countries, northern European Scandinavia, then I don't see why it wouldn't work anywhere in North America. right, mean, we've, NIO was ready to build a NIO house in San Francisco.
 
 I mean, they were actually scouting for a location, right? Remember many years ago? What comes first? It's chickens and the eggs. If they come in, I mean, obviously they have to think about making that available. But is NIO going to be the first? I don't think so. We tend to...
 
 I tend to see the other ones coming in first, Geelys, BYDs, the Cherys But who knows?
 
 Tu Le (42:56)
 So I will point to, my goodness, the Ample blowing up, going bankrupt as a challenge. Ample being the Silicon Valley startup that was doing battery swapping. They filed for bankruptcy. Number two, there are a lot of things to consider when you bring
 
 battery as a service, swapping as a service, because NIO needs to sell enough vehicles or whoever brings it needs to sell enough vehicles to where the swapping stations have utilization rates that are pretty high. The second thing, I don't know any manufacturer that has that type of capital that can continue to build swapping stations on their own without a financial partner. Okay.
 
 That's the second thing. if whoever brought EVGO or what's the Choco, know, CATL would likely need a financial partner in order to help them finance swapping stations. NIO, the same thing. And they have that in China, but not in the West yet that I know of. The batteries, they can't sit on NIO's balance sheet.
 
 they need to sit somewhere else. So from a financial accounting standpoint, that needs to be settled as well. And so when you talk about BAAS, if NIO was selling tens of units or hundreds of units even, is that gonna be enough to satisfy three or four swap stations in the city of San Francisco or the city of Los Angeles? so the...
 
 Lei Xing (44:36)
 Well.
 
 Tu Le (44:36)
 because
 
 there's only a handful of cities in the United States that I can think of, know, probably six, seven, eight, nine, 10. Let's say LA, San Francisco, maybe New York, Chicago, a few others that are large enough that NIO could sell enough vehicles for a swapping station or two swapping stations to really, really make sense. But selling into those markets is the first challenge that they need to kind of deal with.
 
 Lei Xing (45:03)
 Yeah, think strategic location is right. Where do you put your first one? Second, third, fourth, at the same time, probably whoever comes in has to utilize Tesla's and NACs network. Right, because virtually every automaker now
 
 can charge at Tesla's, the supercharging network, then you must have that capability. You have to utilize the current eggs on the market. At the same time, the chicken and egg, right?
 
 Tu Le (45:32)
 Whoa.
 
 Well, you had mentioned,
 
 Lei, this morning that you're going to be minus 19. We see the current crop of EVs range reducing by 30%, 40 % because of this cold weather. This is where swapping would be great. So that's also something to think about. again, don't, NIO, I'm sure, has a spreadsheet that shows you
 
 Within a square kilometer, we need to sell this many vehicles in order to have one or two or three swapping stations. And then they do a heat map. know, Lei, NIO owner is in Amherst, Tu NIO owner is in Boston. So it makes sense to put the swapping station equal distance. And I'm making this up, but I'm sure they have those, those statistics and spreadsheets for China. And again,
 
 What's the minimum number of people needed in a city for even swapping to make sense, whether it's NIO, Choco or Geely or whatever? And it's very limited in Europe, in my opinion, because many cities are 200,000, 300,000.
 
 Lei Xing (46:45)
 And then
 
 also from the product side, right? If you come in, do you come in with the ES8 or ES6 type of product or do you come in with the Firefly? If you talk about urban, if you're interested in growing, starting in the urban areas.
 
 a host of things to consider and decisions to make.
 
 Tu Le (47:05)
 You know, this is why they should hire us to do their strategy work in North America, Lei. Anyways, hey, So next week we will do our awards. We will give out our awards. So please. Yes, those are some Easter eggs, Easter eggs, but hey, man.
 
 Lei Xing (47:11)
 I think we're
 
 Some of which actually have already mentioned in this episode.
 
 Tu Le (47:25)
 Stay warm, dude. I'll catch you on DMs. so everyone Thanks again for joining us as always Stay warm for those people in in the United States and we will talk with you all next week. Good morning Good morning. Good afternoon. Good evening
 
 Lei Xing (47:38)
 Next week should be good, yeah.
 
 Bye bye.