China EVs & More

Tu starts off episode 65 with an update on his status in Beijing and the latest news about auto manufacturing in Beijing and Shanghai including the shutdown of ShanghaiGiga due to a shortage of wiring harnesses. Tu and Lei them move onto BYD’s Changsha problem that has nothing to do with Covid. Due to protests from local neighbors of the factory, BYD was forced to close it factory while an investigation is underway to determine whether or not they’re permitted to be there building cars. Lei shifts the discussion over to LI Auto’s earning that were just released and highlights the announcement about making an even more affordable EV similar to NIO who also had more information leaked recently about their mass market brand targeting the 200 - 300K RMB market segment. The podcast moves onto what Cadillac is doing to prep the market for the Lyriq launch and some of the new vechicles launched by Denza, Arcfox, and LeapMotor that all make bold claims about redefining their market segments. Tu moves the focus to Volkswagen’s announcement about reviving the Scout brand and Lei weaves in his takeaways from the FT’s Future of Mobility conference that featured fireside chats with Elon, Ola, and Herbert and they go into a deeper dive about Elon’s interview and some of the contradictory statements he seemed to make about ShanghaiGiga.   

In Part #2 of this MAX episode, Tu & Lei welcome Steve Levine, global citizen, adjunct professor at Georgetown University, and editor at The Electric - a premium newsletter that specializes in the EV & battery spaces. Steve talks about the journalism journey that brought him to cover EVs & batteries, the challenges he sees ahead including consolidation in the automotive space, and how he thinks things may shake out in 2030 and beyond. 

Tu & Lei start out the pod with a discussion on how the current April sales numbers look to be shaping out. It doesn't look good for most of the legacy OEMs with the exception of BYD. Tu gives a Covid update for Beijing and what he expects to see in the next few weeks.Tu transitions the conversation over to the China autonomous vehicle update and they both share their thoughts on all of the announcements that came out last week from Pony.ai, Baidu Apollo, Momenta and WeRide, who partnered with Pony.ai for the latest investment round of OnTime, a mobility platform whose other major investor is GAC Group. Tu shifts the discussion over to Volkswagen (VW) opening a China office for their software division, Cariad and moving over a Volkswagen veteran to over with strong ties to China to lead the group. Tu and Lei spend a few minutes debating the merits of the moves and the leadership appointed to launch the team in China with, surprise, Tu being a bit skeptical of the moves and whether or not it'll get VW where they need to be with SW development in the timeframe they need to do it in. Tu wraps up the pod with a few quick updates on CATL's swapping station, BYD's substantial increase YoY from Q1 sales, and finally a comment on Elon's purchase of Twitter and whether he'll be pressured by the Chinese govt. to promote a more positive tone on the platform. 

In Part #1 of this MAX episode, Tu & Lei welcome Steve Levine, global citizen, adjunct professor at Georgetown University, and editor at The Electric - a premium newsletter that specializes in the EV & battery spaces. Steve talks about the journalism journey that brought him to cover EVs & batteries, the challenges he sees ahead including consolidation in the automotive space, and how he thinks things may shake out in 2030 and beyond. 

Tu and Lei start the pod out with an update on which manufacturers have been affected by the lockdowns and Covid outbreaks throughout China - Which are running and which aren’t, areas to keep an eye on, and what to expect in the next few weeks. Tu explains what happens normally if there are supply issues at a factory, all of the parties involved, how accurate data needs to be, and how everyone has a timeframe to do it in order for the factory to continue to build. This leads to a discussion about Tesla’s earnings call and how impressive they continue to be. Tu and Lei agree that ShanghaiGiga needs to get back online sooner than later if Tesla is to reach their goal of >1.5M units for 2022. The conversation shifts over to BYD’s announced partnership with Horizon which BYD also happened to invest in. Lei summarizes the five EV debuts that came out within two days of each other - ALL coincidentally from the legacy automakers. Tu gives his opinion on these concept vehicles, one, in particular, that’s he specifically critical of. The podcast ends with a deep dive on the F150 with both Tu & Lei pointing out how inspirational it is for an Asian woman to be the Chief Engineer of such an important product for Ford.  

Tu & Lei go over March sales and BYD’s continued strength despite all the prevailing headwinds and challenges that the other EV makers seem to be running into. Tu explains that the China EV space is being told in chapters starting with Tesla is coming to the current chapter of BYD begins to dominate. Lei continues on with a brief history of BYD and the important milestones in its brief but eventful history and how each inflection point in its history builds up to the announcement that it’ll no longer build ICE vehicles. Tu also points out that the current direction of the auto sector, investing heavily to bring in-house battery cell R&D & chip design, BYD has been a pioneer in those two areas. Lei then turns to some of the challenges that BYD faces and what they still need to confront if they’re to continue to build momentum, gain share and finally enter foreign markets with their passenger vehicles. Tu and Lei move the talk over to Geely and how they’re trying to turn past issues with Chinese build quality on its head by building Smart, Lotus, and Polestar brands in China for the foreign markets. Tu and Lei close the pod by talking about what they expect and how severe the lockdowns in Shanghai and Jilin will be to the automotive sector in Q2’22. 

Tu and Lei start this podcast by highlighting a WeChat moment post by He Xiaopeng, founder of XPeng warning that if issues can’t be contained and resolved production for the entire month of May could be lost. They then move on to review the March & Q1 sales and registration numbers.  Tu takes a few minutes to explain his prior experience working on the supply chain side back in the US and dealing with production disruptions in the automotive and high tech spaces. Since they talked about Q1 numbers, Lei dives deeper into the brand sales numbers that were reported. Lei points out that for the first time, Ford China reported March sales numbers for the Mustang Mach E. Most brand sales numbers were down from Q4’21 which is no surprise. Tu and Lei agree that the Volkswagen ID Series sales numbers continue to disappoint and Tu takes a few minutes to explain that the opportunity to build sales momentum starts when the product is launched when you have a marketing budget that’s supposed to build excitement for the product. One year into the initial launch of the ID.4 and sales are still hovering around 10K/month which points to a lack of overall enthusiasm for the products. Tu stresses that it’ll be difficult to ignite any real excitement for the products after having been in the market an entire year already. Tu takes a few minutes to rant about Newsweek’s article about automotive disruptors without any mention of Tesla or any Chinese EV makers. Lei then talks about his trip to the New York International auto show and how Hyundai and Vinfast seemed to be the BIG news along with a few American EV startups that he’d not heard of until that event. 

Tu and Lei start this show out by paying homage and giving a big shout-out to their friends that live in Shanghai that are currently on lockdown. After the headlines, Lei gives everyone a lesson on the EV100 Conference that is normally held each January but was delayed and finally put online last week. One highlight of the EV100 was the announcement from Horizon Robotics about licensing their IP to OEMs so that the OEMs could piggyback off of their existing chip technology in order to design their own SoCs.Tu shifts the conversation over to compelling design takes a happy marriage between hardware and software and one without the other would likely make for a bad UX.The discussion then shifts to XPeng earnings. Lei summarizes the ‘flagpoles’ that XPeng is planting this year likely hit their margins in 2021. The momentum of the P5 & G9 should help them build on their margins as XPeng only needs to focus on marketing these vehicles and launching them on time and on budget. Tu then shifts to talking about the launch of the Lotus Eletre and the reactions on social media from the various interested parties. Lei discusses how surprised he was about the Lotus’s extensive sensor kit for ADAS/AV and how now LiDAR and premium sound have become qualifying features in the near-premium/premium segments. Tu closes out the pod with his take on Vinfast and their aggressive moves into the US market including their recent announcement of building a factory in North Carolina. 

Lei begins this podcast with announcements from the OEMs of record profits in these tough times and the cognitive dissonance of profiting the most during the most challenging times. Tu updates on the current situation on the ground in China with regard to the Covid situation and where the lockdowns are currently taking place and what he thinks will happen with the Beijing auto show that’s scheduled to happen in just over a month’s time.Tu takes over for Lei to make the announcements this week since Lei was traveling. Tu lists all the cars brands in China that have raised pricing of their vehicles, it’s a long list. Tu highlights a Financial Times deep dive into VW Group’s reliance on the China market. A fascinating piece for those that follow VW Group closely.Tu and Lei move on to a conversation about recently announced vehicles that’ll soon enter the China market, with a few of them also likely to be exported to a market near you.Tu and Lei then discuss the recent rumor that Didi is getting int car manufacturing, a Didi Motor Company perhaps and whether either of them thinks it makes sense. The topic moves to TuSimple and what looks to be a planned split between their US and China entities. This turns into a broader discussion about the AV sector including what could happen to US/Chinese hardware developers. All indications point to a similar hard look at how they will be treated by each country. Tu and Lei close out the pod with a discussion on how the short-term increase in EV pricing may initially scare off US consumers and whether or not that’s a good or bad thing for legacies. 

The episode starts with a discussion about Li Auto loaning a Li One out to Tu for a week in order to get his feedback on the SUV. The conversation moves on to NIO being one of the last EV makers to raise prices and Tu points out why NIO may have a bit more flexibility than their competitors that are building their own vehicles. Still talking about NIO Tu & Lei go over NIO’s earnings and evolves into a longer discussion about NIO’s current situation, their strategy, and where their announced investments, including increasing the R&D staff to 9K people could lead them in the future. Lei then talks about his experience with the Mercedes Tech Day that he attended in LA and gets into a broader discussion about how its new EQS will be one of the first vehicles to offer Level 3 (L3) autonomous and what conditions need to be met in order to activate that function. Tu and Lei get into a detailed discussion about what needed to happen for the L3 feature to be used on the roads in Europe and what would likely happen before the end of the year when the feature will be launched in the US. Tu closes out the podcast by moving the discussion to BYD’s just-announced partnership with Shell. Lei pulls out the discussion to a broader look at how these traditional petrol companies are now rebranding and reinventing themselves to maintain relevance during the cleantech push.