China EVs & More

This episode is a complete download from Tu & Lei re: 2023 Shanghai Auto show. It's also Lei unpacking his experience returning to China after 39 months away. There was so much to unpack, it took them over an hour! This is a for certain not to miss episode!

The pod begins with Tu recalling the ordering process for OEMs to suppliers and Lei and Tu discussing the impact of the emissions standard update in July on the pricing and sales of ICE vehicles, specifically those that do not meet the new emissions requirements. Tu and Lei then move the conversation over to BYD and their export ambitions, recent earnings and overall outlook as they expand further into international markets. Lei then moves the conversation over to Huawei and they both discuss Huawei’s ambitions, their partners and what they think will Huawei’s ultimate path to success.The podcast closes out with a discussion on Faraday’s strange Job #1 announcement and their continued struggles. 

Lei kicks off the pod with his feelings on heading back to China after more than 3 years away. Tu then talks a bit about how much China has changed in that short amount of time. Lei moves the discussion over to his trip to the New York auto show and highlights the RAM EV truck that was unveiled. Tu comments on the massive size of the battery pack for the RAM. This gets them into a discussion about what the OEMs and the US need to do in order to create a real EV revolution in the US starting with producing affordable EVs, particularly below the $50K price point. They then begin to talk about why range is such an important consideration for Americans because of the desire to haul or tow things behind their vehicles and the challenges it poses to automakers who are challenged with providing sufficient range for vehicles when towing. Tu and Lei then briefly chat about the challenges being faced by the foreign legacies in China and Tu points to the hey days of them being market leaders is over.Tu and Lei end the pod with a discussion about Tu’s newsletter post unpacking GM’s announcement that it’s not going to support Apple Car Play anymore. 

In this MAX episode, Lei has a sit down with Tom Fennimore, CFO of Luminar Technologies. Luminar is a US technology company that specializes in developing LiDAR for autonomous vehicles. It was founded in 2012 by a then 17-year old Austin Russell and went public on the NASDAQ via a SPAC deal on December 3, 2020. For those unfamiliar - LiDAR is an acronym of "light detection and ranging” or "laser imaging, detection, and ranging.” It is a method for determining ranges or distances by targeting an object or a surface with a laser and measuring the time for the reflected light to return to the receiver. LiDAR is also commonly used to make high-resolution maps.Some of Luminar’s current customers include: Volvo, Mercedes, Mobileye and Polestar and is considered a leader in the very crowded LiDAR space with further expansion plans into the US, European and Chinese markets. The LiDAR space is forecasted to grow to well over $3B by 2028 w/ averaging a compounded average growth rate of 18.4% of which Luminar is poised to take a big chunk of with it’s Iris LiDAR sensor and Sentinel self-driving HW/SW stack. 

The podcast begins with a brief discussion on Ford's accounting of EVs for China and China operations in general. They move their discussion to XPeng's earnings report and take some time to unpack what their troubles were in 2022 and what they're doing to address them now. Lei then summarizes Geely Holdings and their numerous brands and how they all fit together some of the history of a few of the brands that westerners might not have heard of and they both take a few minutes to update on Zeekr. Tu and Lei then give updates on the continuing price war and how it's affected some of the weaker players and foreign brands in particular. Lei pushes the discussion over to Nvidia and how they are likely the largest beneficiary in the push towards more AI use in apps, software and business. The pod closes out with a talk about the struggles of Kia/Hyundai in China and how they still are trying to make headway into the market with the recent announcement of new products. 

Tu and Lei start out the pod with a discussion on the latest price cuts that take the current price war deeper into the hole. They then talk about the VW unveil of the ID.2all and how it may not be that competitive if it was to enter the Chinese market, which currently it’s not set to do.Lei puts the focus on Skoda and their shrinking sales in the China market and how they are doing in other regions. He anticipates that they may ultimately leave the China market due to their continued struggles.Tu updates about the EU’s version of the US Inflation Reduction Act which is called the Critical Raw Material Act or CRMA.The pod closes out with the UK not making the cut for location for the next BYD factory. They didn’t even make the semi-finals and BYD blamed uncertainty in long-term business conditions due to BREXIT as the primary reason. 

In this MAX episode, Lei sits down with Marco Kollmeier, former Executive at Benteler, an Austrian tier 1 supplier that makes it’s bones providing components and modules for the automotive industry, in the areas of chassis, body, engine and exhaust systems as well as future technologies such as system solutions for electric vehicles. A couple of years ago, Benteler’s EV Systems business unit that Kollmeier led developed an EV platform and in an effort to separate the traditional business from the new opportunities in mobility and EVs, last November Benteler spun off that EV Systems BU and the Holon brand was created with Kollmeier peeling off to head that company. For those wondering, HOLON comes from the greek and means something that is both a whole and part of a whole. HOLON recently unveiled its first product at CES, the L4 capable ‘MOVER’ that is based on the EV platform that looks to compete with Cruise, Waymo and Baidu in the robotaxi space. Lei talks to Marco about HOLON and a whole lot more. 

Tu and Lei begin the discussion about the brutal price war that's currently going on in the China automotive sector including where the foreign automakers, SOEs (state owned enterprises) and startups all fit in and how they think it'll affect everyone long-term.They both also discuss the annual Two Sessions meeting that the Chinese govt has each year and try to read between the lines with what's being said and what's actually meant.  The chat moves into a chat about February sales and Tu talks about how western OEMs don't put enough weight on how much the China market means to their success. Tu then moves onto a discussion about the importance of China Battery Inc to the foreign automakers, but not only in China but in their home markets because it's really the only game in town for reliable, competitively priced LFP battery cells.The pod ends with Tu providing a history lesson on the battery cell sector in China and how it built itself out. 

The podcast starts with Tu and Lei having a long discussion about their takeaways from Tesla's Investor Day. For Tu it was all about the ambitious numbers that stood out. Lei thought it was notable that Tom Zhu came out to present. Lei then moves the conversation over to his attending Luminar Day and they both reflect on how important the China market is for Luminar if they're to hit on any of their lofty sales and install goals. The pod ends with Tu and Lei briefly touching on February sales as the sales numbers were beginning to trickle out and what's surprised them so far. 

Tu and Lei talk about the recently announced Leadership change at Ford China and Tu takes a few minutes to give a brief history of Ford China, where he worked briefly in the early 2010s.Lei then shifts the conversation over to letting us know what he learned from the Mercedes Benz digital strategy and OS update in Sunnyvale, CA. This evolves into a broader discussion about Merc's global rollout strategy and how they'll work out the US vs. China vs. EU markets. Tu also points out that Merc will be partnering it's way to a complete HW/SW stack for connectivity and ADAS which is much different than a VW and other legacies who still want to keep most things 'in-house.'The pod closes with a discussion on the new Galaxy brand that Geely unveiled in response to BYD's Yangwang premium brand and they both briefly talk about the differences between Chinese and American's tastes in connected features.