Episode #195 - Tariffs Loom, Tesla Juniper Ambush, FSD Approval in China

In this episode, Lei Xing and Tu Le discuss the latest updates in the global EV, AV, and mobility sectors. Key topics include:

• US-China Trade & Tariffs – The impact of Biden’s 100% tariff on Chinese EVs and how Trump’s possible return could reshape trade policies.

• Tesla Updates – The launch of the new Model Y (Juniper) and its effect on competition. Discussion on Tesla’s FSD approval in China and how it stacks up against local brands.

• China’s EV Market – Government incentives, rising EV adoption, and CATL’s prediction that LFP batteries will dominate 70% of the market in three years.

• US Automakers – Ford and GM’s EV sales growth, Cadillac’s Lyriq V launch, and Stellantis’ $5B investment in US manufacturing.

• BYD Scrutiny – Reports of hidden debt and its growing competition with Tesla.

• Upcoming Price Wars – How Chinese EV makers may cut prices to compete with Tesla’s new Model Y.

Companies Discussed

1. Tesla – Model Y Juniper, FSD in China

2. BYD – Market leadership, financial concerns

3. Ford – EV growth

4. GM – Cadillac Lyriq V, Momenta partnership

5. Stellantis – Investment in US factories

6. CATL – Battery market trends

7. Xpeng, NIO, Geely – Competition in China

The hosts also discuss the upcoming Shanghai Auto Show and how government policies will shape the future of EVs.

Transcript

Tu Le (00:16.89)
Welcome to the China EVs and More podcast. We will open the room up at around the 40 minute mark to anyone who's keen to ask us any questions. So feel free to post them in the X, LinkedIn or YouTube. In the next hour or so, my co-host Lei Xing and I will go to the week's most important and interesting news coming out of the global EV, AV and mobility sectors.

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 listeners and viewers, welcome back. We ask that you smash those subscribe and like buttons so you don't miss anything from us in the future. Also, I'm confident that Lei and I are two of the most knowledgeable people in the world doing this. So help us get the word out to others about this show. My name is Tu Le

I'm the Managing Director at Sino Auto Insights, a global management consultancy that helps organizations bring innovative and tech-focused products and services to the transportation and mobility sector. 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. A frigid Lei Can you please introduce yourself?

Lei Xing (01:35.908)
Well, the frididity has gone past a... What should I say? A double-dad duty, pondering what could have been Lion's Die Hard fan.

Tu Le (01:46.175)
my

Tu Le (01:53.006)
So much hope, so much hope, so much hope.

Lei Xing (01:57.754)
This is episode 195. So the Lions game, I watched that game, a lot of fireworks. Just like, you know, it reminds me of the China EV in AV mobility space.

Tu Le (02:24.035)
Ha

Lei Xing (02:26.678)
lots of fireworks, constant things happening. Although recent days because of the Chinese New Year coming up, it's slowing down a bit. But on the state side, we've had a week of fireworks from someone named Trump. So this is the backdrop of today's episode.

Tu Le (02:46.744)
Hehehe.

Lei Xing (02:54.202)
And I know you touched upon Trump 2.0, your newsletter, and maybe we start off there. Just talk about, you know, what has transpired and tariffs, right? I think the key word that is all related to this China EV global trade and Trump has been, I think, less

on that department in terms of the fireworks of executive orders that he signed. So we start off there and we talk about what could happen in coming days and weeks.

Tu Le (03:45.602)
I think what's important is kind of talking about the lead up to everything. And this includes the Biden administration, some of the things that they've done. to summarize at a very high level, they...

put in place 100 % tariff, there was already a 27.5 % tariff from the Trump administration in 2018. And so this closed the door, but it was unlocked.

by the Biden administration because there's no language in there that says if you build them in Mexico or Canada, they'll still receive these tariffs. So in addition to the 100 % tariff, the Biden administration just put in policy restrictions on Chinese connected hardware and software. So the software comes first and then the hardware. Now,

The Trump administration got back into office on Monday. There's been a lot of rhetoric leading up to Trump becoming our president again, including repeating and repeating and repeating an EV mandate that the Biden administration effectively jammed down Americans' throats. And so...

Lei Xing (05:15.962)
I'll stop you right there. There's no EV mandate, right? I think EV mandate.

Tu Le (05:17.667)
Okay.

Yes.

So there's nothing in the policies that's mandate, but the EPA restrictions increasing significantly in 2027, the climate goals and the requirements leading up to 2030 where Biden had a goal, which he openly communicated a 50 % take rate.

Lei Xing (05:30.948)
That's, yeah.

Tu Le (05:51.742)
on electric vehicles by 2030, that a lot of people saw this as a de facto EV mandate. I can see why they would think that. Now, if we look at other countries, they've done the same thing. You know, Norway, Europe to a certain extent, because Europe has their own climate goals.

And it looks like because of the slowdown, again, not a shrinking of EV sales around the world, a slowdown in the growth of EV sales around the world. Now, 2024, there was 25 % growth year over year. Most of that are a good portion of that in China, right? So you need the government to intervene.

when you want these drastic changes to habits, buying habits of consumers, whether they're European Americans or Norwegians or Chinese.

Lei Xing (07:04.506)
Yeah, say on the door analogy, before Trump got into office, that door was locked and put on two locks. One of them is 100 % EV tariff, the other one's ICV ban, so there's two locks. And then when he said yesterday on the video on the Davos, if you're going to produce in our country, you get

maybe zero to no tariffs or to low tariffs. If not, if you import everything into our country, we're going to tax you a somewhat amount. And so that door with the two locks on seems to be from that statement, there's a small opening up. But then again, you think about it like if I'm a Chinese automaker and I want to produce in the US,

The ICV ban says particularly even those vehicles are made in the US if they have the relevant software or as banned. So it's like one defeat the other. So there's really nothing that's so positive of what could happen.

So that's one thing. And the other one on the terrorists, think, like I said, of all the fireworks, the terrorists seem to be hinging with respect to China on a few names or a few terms. TikTok, fentanyl, and Elon Musk.

And so we're still seeing that play out. I think he's hinted at the 10 % from China and 25 % from Mexico and Canada. and early as we could see this happening is February 1st, which a week, little bit more than a week away. so I think the other ones he's done what he's promised.

Lei Xing (09:24.0)
or what he wanted to do, all the other ones on immigration, gender, race, know, all of those things. But tariffs seem to be a wild card, sort of.

Tu Le (09:32.376)
So.

Tu Le (09:37.23)
So this is the obvious thing about Trump. Go ahead.

Lei Xing (09:42.476)
No, and then I think if it's 10%, maybe we can see it as a slap on the wrist compared to, let's say, 60 % of all things imported from China. But I think whether it's 10%, 60%, at least on the China EVs, is a non-issue because I don't think they treat North America, or at least the US, as a priority anyways.

There's opportunities in the rest of world. Yeah, sure.

Tu Le (10:15.17)
Well, they want to the US in a bad way because they see the most opportunity here, to be quite frank. But they also, I believe in...

They know, the Chinese government knows that the US government works in four and eight year cycles. And because of the long-term planning the Chinese government does, sometimes they wait things out. And so they seem much more hopeful about coming to some sort of compromise with the Trump administration more so than the Biden administration. And that's very clear. And you know,

The other thing that has nothing to do with China, but has everything to do with China is that if the USMCA gets blown up, Canada has tariffs and Mexico has tariffs on vehicles imported into the United States. Trump is effectively boxing everybody in and saying, you have to build in the US. So case in point Elkin, who is now the

temporary CEO or leader of Stellantis, he put that $5 billion investment that Carlos Tavares had put on hold back on the table this week. Now, if you read the fine print, it's not new investment, it's investment that was taking off the table that was originally announced a year or two ago. And that just means more jobs in Detroit, more jobs in Ohio and Illinois.

So in a way, it's working because Elkin was quick to put those jobs back on the table. But an alarming number to me was that 40 % of the vehicles that Stellantis sells in the United States are built in Canada and Mexico. So if Trump is successful, we should have a

Lei Xing (12:24.942)
Yeah.

Tu Le (12:31.362)
good number of jobs back in the United States. Now, that's not necessarily good for the D3 because if the Chinese even makers come in the next four years, it's gonna dial up competition like you've never seen. Because we all know that there's gonna be culture challenges, there's going to be labor challenges, there's going to be just...

management style challenges when these Chinese players come to the United States on Mars. There's probably going to be labor shortage issue in the short term. So there's no immediate success that I see for a Chinese EV maker outside of importing quite a few vehicles, which is not going to be happening. the, the, the, Trump is doing is he's accomplishing

that he's creating this uncertainty that is really forcing people to the table. Now, the Chinese can wait this out, but I believe he's also wanting to have Chinese EV makers and battery makers say that they're willing to invest billions of dollars in the United States.

Lei Xing (13:51.8)
Yeah, so we look at the Trump 2.0 effect for China and for the US. So for China, I've heard recently a new term called the Trump stimulus, which is his blocking off imports, let's say, potential imports of EVs for now, for foreseeable future. But within China, we know

the economy, we know the new trade-in and scrap policy that's involving new millions and millions. Trump like to say that millions and millions of vehicles. Yeah, China is a huge number that if this card is played right, and I posted the video from the CETL co-chairman.

Tu Le (14:32.898)
Biggest ever, biggest ever.

Lei Xing (14:48.154)
who expected the take rate.

Tu Le (14:50.924)
Well, take a step back, press rewind because you tweeted a few. So can you tell us who was at Davos forum from CACL and what your takeaways from his discussion was?

And let me stop you there, Lei, because SPX, and I'm sorry if I wasn't clear, I meant 10 % tariffs on Mexican-built cars coming to the US, Canadian-built cars coming to the US. That's what I meant, not in addition to the 100 % Chinese tariff. So please proceed.

Lei Xing (15:27.428)
So there was, you know, this past week was the winter Davos that's held every year.

Tu Le (15:33.578)
When are we going to host a podcast at Davos? Maybe next year.

Lei Xing (15:39.125)
But I mean Pan Jian who is the co-chairman of CATL, okay CATL the largest battery maker in the world they have 37 % of the market. Yeah printing money well they were yeah they announced some big numbers earnings numbers but he was at a panel called getting EV supplies changed right and he

Tu Le (15:51.096)
Printing money?

Lei Xing (16:06.208)
I think share some great insights, including he's expecting the take rate by the end of the year, monthly to top 70 % and for the entire year to top 60 % in China to 60%. And he also predicted that LFP will in three years account for 70 % of not only the EV battery, but the battery market overall.

Tu Le (16:20.055)
in China.

Lei Xing (16:35.962)
And he just mentioned a lot of what China did, the kind of the private public sector and why the rest of the world, why Western automakers are slow at the EVs because they were missing that what he terms as the EIV, which is electric intelligent vehicles. And China got the I part of it right.

they obviously got the E part of it right but I think currently they're competing online obviously right so with this backdrop and then thinking of Trump and back to the US you mentioned about Stetlantis they're bringing some of the models back production and they're delaying I think some of the RAM right that RAM 1500 EV has been

It has been announced for how many years already? You talked about the take rate not even reaching 35 % by the time Trump gets out, leaves office. Yesterday, the new Tesla Model Y broke the internet here in the US.

I think in the US market, it's unlike, there's no way near what Pan Jian talked about, this public framework versus the private effort. And that's been many years in the making. I don't know if you read that Zai article that our good friend shared about Wang Gang and Oliver Bluma talking about the early years and how China reached where it was.

It's decades in the making and we just don't have that in the US. It's just totally different.

Tu Le (18:39.63)
Well, I, I, so.

Lei Xing (18:43.14)
But Biden tried to do it with that kind of the so-called EV mandate and the IRA.

Tu Le (18:52.514)
Well, I still have to give Tesla and Elon a lot of credit because they're the OGs on the E and the I and the EIV. Now, this is where the Chinese are probably a little bit like Japan, right? They didn't invent the electric vehicle, but maybe they perfected it or they are perfecting it in present tense.

Let's point back to our great conversation with Brian Gu, Dr. Brian Gu, who, and to his credit, patted XPeng on the back, themselves on the back for saying smartification was going to be an area of opportunity. And he said this, what, three years ago, he said, and that's what we're seeing now. So that's, in other words, what the I is in EIV.

Now I didn't see the whole video from Davos, but that was one of the things I was like, well, Tesla needs to be given proper credit because guess what? They still, one of the guys on Twitter, the guy who always updates the Tesla stuff, I forget his name. He has a beard, but anyways, he had like a list of updated features in the Juniper and one of them was like,

Lei Xing (20:17.178)
Sawyer. Sawyer and Meredith. Yeah, yeah, I saw that.

Tu Le (20:19.296)
Yes, and that wonderful was like, updated metal casing on the door. And I just started laughing, man.

Lei Xing (20:28.014)
No, no, think, know, Tesla Model Y is the best selling vehicle in the world. Obviously it's going to get all the attention because it's, I mean, it's, I was looking at it, right? That they have this launch edition and, you know, like they make it's more expensive, but they also make it quite enticing. Yeah.

Tu Le (20:53.1)
It's going to be $60,000 pre-incentive, pre-subsidy in the US, and it's probably going to be on the roads within the next two months.

Lei Xing (21:03.224)
Let's delivery start in March. So yeah.

Tu Le (21:05.356)
Yeah, say the next two months. So we're already seeing videos of trucks, trailers with Junipers in China. I think Europe is going to launch next. does so is this where Elon sees the 30 or 40 % growth? Remember, he said that in one of the earnings reports for 2025.

I don't know if Juniper can support that itself.

Lei Xing (21:37.242)
Likewise, totally read.

Tu Le (21:45.966)
So they either have something up their sleeve...

a Model 2 or something because...

Lei Xing (21:54.488)
Well done.

Tu Le (21:56.142)
30 % is substantial. It's substantial. It's a lot.

Lei Xing (22:00.408)
Well, yeah, the cyber cap, what becomes of the cyber cap in terms of Mata 2, right? I think that there's still a wild card this year. the attention, so right now is all on Mata Y, the new Mata Y.

Tu Le (22:09.581)
Yeah.

Lei Xing (22:18.85)
And that alone, of course, is not going get you the 30 to 40 % growth.

Tu Le (22:19.086)
There.

Tu Le (22:23.672)
So that means suppliers in China, likely in Europe and the United States are working overtime to fill the supply chains so that the Model Y doesn't ramp like this, it ramps like this. Man, it's such an interesting time, huh, Lei? In a couple of months, we'll be going to Shanghai and...

Lei Xing (22:50.67)
Well, actually, as a matter of fact, exactly less than three months left. Media day is April 23rd. I had that date in my head. Today's January 24th, less than three months. And the other thing on the Tesla this year, critical for the Chinese market, not only the new Juniper, but the FSD approval.

Tu Le (23:19.596)
Right.

Lei Xing (23:19.608)
which might predict they will get. But when that they get it, how does that compare? We were talking about this with another friend of ours, the urban ADAS, NOA game is very cutthroat. And it could be a...

one of the stories of the year if they get the FSC approval but how do they compete actually on the ground in actual situations? You know that's something to see. It's the gold standard here in the US but in China there's several gold standards among several brands. Definitely not that one.

Tu Le (24:07.384)
They'll see a significant sales bump once FSD gets approved in China. Now, will it be the full version? Will it be a derivative of the Western version, US version? It remains to be seen. Obviously, the data centers need to be in China and all that good stuff. But you know...

That's linchpin to Tesla's growth strategy, obviously. And Elon has said it himself, right? It's not about car sales. It's about the AI part of Tesla's product plan. if it doesn't happen this year, which is unlikely, as it stands right now, I'm not hearing significant pushback. I haven't heard really anything.

about the approvals, but we wouldn't expect anything to happen in the next couple of weeks just because of Chinese New Year, which is January 29th. But it's just a really, really interesting time. you know, this coming, let's switch gears and go back to the United States. Ford had announced.

uh, increased sales on the EV side. GM had announced increased sales on the EV side. So this is, this could be a really crushing blow for Ford and GM in the U S if Trump takes away those $7,500 subsidies and go ahead.

Lei Xing (25:47.097)
What?

What's saying for Tesla? I mean, what do think, right? There's been talk, you know, whether it's good for Tesla or bad for Tesla.

Tu Le (25:57.422)
I'm just taking Elon's word for it. Elon says we don't need them. all I can do is point to what he said. Now I agree with you. Yeah, a $60,000 car that turns into a $52,000 car, that makes a difference to me. So.

Lei Xing (26:18.362)
which the launched edition currently enjoys.

Tu Le (26:23.022)
And all the while, the Cadillac Lyric V gets launched yesterday. So.

Lei Xing (26:34.81)
GM put out a teaser yesterday and there are Steve Hill's New Year message. I think it might be the Vistique, the large SUV that will come out in China this year with similar

urban NOA features thanks to a company called Momenta. Yeah, so that game is everybody's going to compete. If you want to be. Yeah. Yeah.

Tu Le (26:59.318)
Momenta.

Tu Le (27:07.83)
And what did I say? There's going to be two stacks. You know, there's going to be the super crew stack. Is it called super cruiser or child? Some of the crews.

Lei Xing (27:15.598)
No. No.

Lei Xing (27:20.152)
Well, yeah, well, I think they're going to use a different kind of something.

Tu Le (27:24.878)
Yeah, yeah. So, so there's GM Super Cruise, which is a consolidation and an amalgamation of Ultra Cruise, Cruise Cruise and Super Cruise. And then the China stack is Momenta, which GM has what five years ago invested $400 million in. So

Not a lot being said about that, is it? At least in the North America side, but that's an important, we had mentioned this in past podcasts, having a significant, not an insignificant, a significant because insignificant to me is Tesla autopilot, significant is FSD. So having a significant player in the intelligent earth.

Lei Xing (27:58.915)
No.

Tu Le (28:20.834)
having a significant intelligent driving system in China, it's not a differentiator, it's a qualifier. So Cadillac, if they want to continue to be the premium American brand in China, need to be in that game, and that's what they're doing. and believe me, I don't think that, cause in the United States that Vistique, or I think it's called Vistick, I think, I don't know.

I was corrected, but I keep on saying Vistique. It's like $90,000.

It's unbelievable. I don't believe it's going to be $90,000 in China because it would never sell. Ever.

Lei Xing (29:07.322)
Hopefully that.

Tu Le (29:09.656)
So Steve's a smart guy. Our friend Will's a really smart guy. So they know, and I'm sure they're trying to sharpen their pencil. But how much Warren pushes back, we'll see. anything else? What do we want to talk about next?

Lei Xing (29:25.974)
yeah.

No, I just think back to the Trump little bit. think the best word to describe currently China and the US is lukewarm. It's not icy. It's not warm, but it's because Trump, I mean, he's he's he he bashes on China at the same time. Right before he got into office, he had that conversation with Xi and he's like, you know what? We want to work together. We want to, you know,

and she said, right, I mean, like, this is dynamic, it's, it's not as, think his advisors will have him think a little bit more on this, this relationship, rather than just, just, you know, like what he's done with the other executive orders.

Tu Le (30:20.366)
But the thing is, Lei, is that I think the foreign governments that deal with the Trump administration kind of know that he's this blustery guy on its face, but then his team will create back channels. And they'll use those threats that he's saying in public as kind of negotiating points. And then really quickly, Lei,

Lei Xing (30:37.188)
Sure.

Tu Le (30:49.004)
just an update on the U.S. embassy. So obviously I forget his name now, the U.S. ambassador to China. He's leaving, yeah, Burns. Purdue, who is the former Senator of Georgia, one of the senators for Georgia, he's going to be the new ambassador. I think he comes in a week or two or three weeks or something like that. And one of the points I made in the newsletter lay is that his first time around, Trump, when he,

Lei Xing (30:55.854)
Burks.

Tu Le (31:18.848)
entered office, it was just a mess. It was unorganized. It was a free for all. He didn't know who was in charge of what, but this is where he's brought pros in. He's, know, on his first day, he did all these executive actions or executive orders. And so he's learned from his past and he's put these people in now.

Lei Xing (31:31.224)
What? I still can't hear this.

Tu Le (31:47.35)
I'm not endorsing his policies and I'm not against his policies. All I'm saying is that they seem to have much better understanding of what needs to be done and how to get it done as opposed to his first time around where he just kind of felt like he was building the plane as he flew it. And we can see, and this is really important,

the first major investment announcement that the Trump administration makes is about AI and it rewards his Silicon Valley, let's say supporters, okay? So, and remember, at his inauguration, Bezos was there, Zuckerberg was there, Tim Cook was there, who's the Google?

Lei Xing (32:24.249)
Yeah.

Lei Xing (32:31.95)
just check those.

Tu Le (32:46.742)
So Pichai was there. Was the Microsoft there? I didn't see him. Yeah, and so.

Lei Xing (32:47.059)
Sunday, April child.

Lei Xing (32:52.43)
No, he wasn't there. But the CEO of TikTok was there, Joe Shoji.

Tu Le (32:56.885)
Yes, shows the truth.

So, you know, this should tell you that his priority is not manufacturing in the United States. And Masa was there.

Lei Xing (33:02.65)
Lei Xing (33:13.39)
Boy, it is. mean, right? You got a manufacturer in the US or else we're to tear up you.

Tu Le (33:17.964)
Well, so manufacture data centers. Because AI is going to need a lot of servers, a lot of data centers. So surprisingly, Jensen Huang wasn't there. So.

Lei Xing (33:33.762)
Wow, here's in China. Here's in China, give me our red pockets.

Tu Le (33:37.55)
So for our audience, Lei...

For our audience, please tell everyone what traditions are for Chinese New Year, because I'm ethnically Vietnamese. We also celebrate Chinese New Year. Our cultures and traditions are little bit different, but one of the things that we share from a culture standpoint are the red envelopes or the home bow. So can you tell us some of the other? So tell us what a home bow is and some of the other things.

Lei Xing (33:58.851)
Wow.

Lei Xing (34:14.426)
Well, just a red packet or Hong Bao is you give it to your kind of kids or kids in the family as a of auspicious way to wish them luck and have some spending money. So usually here in the stateside, can try the 100 MMB bill is nothing.

Tu Le (34:30.776)
and there's money inside.

Lei Xing (34:41.85)
Here we actually give $100 bills, so it's...

Tu Le (34:46.67)
Well, remember in the booming days in China, the CEOs and managers would give red envelopes to all of their staff with 100 RMB in it.

Lei Xing (35:00.858)
Now, usually you don't do it physically, you do it digitally. You do it on WeChat. Yeah, WeChat. So, digital Hongbao, yeah. so if you look at this past few days, all of these China EVA, V-Movility related brands, their official accounts have been pushing out digital red packet designs, especially Chinese New Year designed.

Tu Le (35:04.078)
Yeah, yeah, yeah. With WeChat Pay, right? The digital home bow.

Lei Xing (35:30.618)
packet that you can download and use to send digital packets to other people showing this is way of marketing, right? So everything is red these days. Everything is red. And actually speaking of

Tu Le (35:38.488)
Yeah. And Xiao Hong Shu is really, really...

especially the little red note, the little red book.

Lei Xing (35:49.21)
Speaking of red, did you see the night of the inauguration where they had the parade inside the Capital One arena? That scene with the red and the white stars, I was like, what's going on? This feels like some kind of a Chinese convention or something.

Tu Le (36:11.182)
I know I didn't. I have not watched the news a lot recently just because I'm on daddy duty, as you know, and this week there were two snow days and not because of snow lay, but because in Celsius it was minus 20 degrees here in Michigan. It was about one degree, two degrees. So luckily I have a

Lei Xing (36:33.55)
Yeah, here was as well.

Tu Le (36:40.598)
half bath in my laundry room and toilet wouldn't flush and the faucets wouldn't work. So I was super worried that the pipes burst, but they did not. So lucky about that. But in Vietnamese, we call Chinese New Year, thet, or tet. If you hear an American person or a Western person say tet, you actually say thet in Vietnamese.

If I may, Chinese New Year is basically celebrating the start of spring because the Chinese use the lunar calendar and the lunar calendar for the start of spring changes every year. And again, this year, January 29th is New Year's Day. Now a Northern habit, which we're going to miss this year. I really, really, you know, I thought it was kind of insignificant when I was

early years in Beijing, I do want, you know, rolling the dumplings with the fillings and then eating them with the vinegar. I'm going to miss that this year and we're not going be able to do it with the boys. So it's unfortunate. We'll go to a restaurant and eat some dumplings for sure. can you, but that's a Northern thing, right?

Lei Xing (38:05.208)
Yeah, that's always a good thing. And the other thing is really we talked about fireworks. Well, this is when the real fireworks happen. That's another.

Tu Le (38:15.694)
So I know we're not talking about the podcast, but I think a lot of our viewers will still enjoy this. I moved to China in 2009 and the first Chinese New Year that I had, first of all, the Mandarin Oriental off of Third Ring Road, that was supposed to be the Mandarin Oriental Hotel, it caught on fire. And it's in...

Lei Xing (38:41.466)
yeah, okay, right next to the CCTV tower.

Tu Le (38:44.622)
CCTV building. So that was the first year that I lived in China. And then we went to my wife's grandma's and then we drove home. And on third, this is in 2009. And so there were no regulations yet about where you could light fire, firecrackers or fireworks. So I look at things distinctly. Fireworks, there's no pop. Firecrackers, there's a pop.

Lei Xing (38:47.104)
okay.

Tu Le (39:13.686)
In China, everything pops. And the vendors will sell boxes as big as a desk that have all kinds of fireworks. And so we're driving home on Third Ring Road at around 12, 31 o'clock in the morning. And I have to avoid big boxes in the middle of this highway because people are on the side of the road lighting these big boxes.

Lei Xing (39:42.637)
I remember that.

Tu Le (39:42.84)
They are literally within 10, 20, 30 feet of these huge buildings. And so we go to our high rise at Xin Cheng Guo Ji and I look out, we're probably, think, at that time we were living on the 28th floor or something like that. I vividly remember it. Looking out and just seeing the fireworks almost eye to eye to me. And I thought it was like the most surreal thing because...

people were on the street, jintong, jintong donglu, right? Just lighting fireworks up. Now, as the years went on, they pushed it farther and farther out so you could not do fireworks inside of Fifth Ring Road, Fifth Ring. So, but those things make me smile because that was like the wild, wild west days where it was like, whoa. Anyways, man.

Lei Xing (40:24.26)
Fifth round.

Tu Le (40:39.406)
So getting back to talking about cars, I sent you the post of my brother sent me. So in Grosse Pointe, Michigan, there's a dealership, a GMC dealership that had a post that wanted to get rid of their Hummer demos. And so that dealership, if you leased a demo Hummer,

Lei Xing (40:50.522)
Two more.

Tu Le (41:09.112)
for 850 bucks, they threw in a terrain. And so my brother who was driving a Yukon XL, which is a suburban effectively, he turned that in early and got this Hummer. And then yesterday he's texting me he's like, hey man, what charging, you know, what charger did you buy for your garage? You know, and he's asking me all these questions. Cause like, I don't know if it was like this.

I don't know how much he was doing research, but he got, went from a petrol engine vehicle to an EV. And I'm like, you know, that's a huge battery. So you better get that charger for your garage sooner than later or you're going to be sitting at a charger for a long time when you charge up. But we're still seeing deals, Lei, for electric vehicles in the United States.

Lei Xing (42:07.556)
So I'm going to, you know, I have one more, a little bit more than one more year left on my loan. It'll be up in 2026. So I'm going to, you know, see this year kind of similar a bit and see what happens to the task credit, what Tesla does with incentives. And I'm definitely looking, you know, for the next vehicle, an EV here.

because I actually want to really try the FSD out. I mean, that launch edition that included everything, right? Actually, it's quite enticing, but we'll see. And, know, putting our consumer hat on.

Tu Le (42:56.418)
Well, the there's here's the other thing too, as the pipeline gets filled of the Juniper model, why? You're probably going to see some deals for current model year, last model year, model Y to get those out the door. So for those that are in the market, probably in the next one, two, three months, you might see some smoking deals for current body style and current model model wise.

Lei Xing (43:25.85)
Yeah, some of the inventory I saw were $33,000, $32,000 for a long range all-wheel drive. New!

Tu Le (43:34.008)
Yeah, so.

Lei Xing (43:34.522)
That's cabbage price, right? As we say in... Cabbage is another Chinese New Year tradition used to be when people would buy these cabbages and save them in their houses in the winter. Right? Yeah.

Tu Le (43:37.814)
Yup.

But.

Tu Le (43:53.622)
Yes, I know what you're talking about. Let me see here. I'm going to check my...

trusty old newsletter.

Geez. Anything else you want to talk about while I'm doing this?

Lei Xing (44:10.776)
No, I think January we're anticipating a, again, in terms of sales, a low slow month based on the weekly numbers have come out. But, we're here, know, by the time February 1st comes around, we'll see those posters. Kaimen Hong is usually,

what these companies want to achieve, which is we're starting off the year with a bang. End of the year with a bang and want to start off the year with a bang.

Tu Le (44:52.926)
I think the other important thing to note, is that the Chinese government or the automotive body of the Chinese government is looking at prices increasing this year for Chinese electric vehicles. that just means that the price war has taken its toll on some companies.

Lei Xing (44:58.745)
I think.

Lei Xing (45:13.39)
I think ever since the week we were in CES, when the State Council officially announced the expanded trade-in and scrap policy, over recent weeks, there's been press conferences emphasizing on the trade-in incentive and stabilizing economy, encouraging battery swapping, some kind of a new framework.

for battery swapping. I think that's the message that's been given.

Lei Xing (45:55.042)
So.

Tu Le (45:55.32)
So we're starting to see, basically we're starting to see a bit of maturity coming out of the market, at least in the tier one cities. think.

Lei Xing (46:00.57)
Well, also, I think in terms of the price war, so far, it's not as been as fireworks as 2023 and 2024.

I the new model Y obviously is a new, both in China and the US has been a talk of the town.

Tu Le (46:23.05)
Once we see more Model Ys on roads in Shanghai, you better believe that the Chinese EV makers coming out of Chinese New Year are going to lower price on competitor products to the Model Y. And that should ignite or reignite the slow part of the sales season. And I would say March, March.

early April, we'll start to see more companies cut price on B-class crossover SUVs, know, Avatar, G-Le, Xpeng, maybe on the G6, kind of lower price to make a tough decision for the Chinese consumer. Now, we, you know, the interesting thing, and I don't have any research, but I don't know.

how many buyers, let's say out of 10 that want to get an EV in China are tried into, I'm going to buy a Tesla, full stop. And then how many are like, okay, the Model Y is part of my consideration, but I'm also looking at a G6. I'm also looking at an ES6. I'm also looking at a Leado L6, know, a BYD Han.

So, or Tang, but that would be interesting to note, you know, how many Chinese consumers buy it because it's a Tesla. I haven't seen any research like that, but we'll see what, by the end of summer, how much we think the model wide Juniper is going to help Tesla sales, at least in China.

Lei Xing (48:21.626)
Well, I mean, the measuring stick would be maintaining last year's levels.

which will be difficult. Yeah.

Tu Le (48:28.618)
I think that's a loss. I think that's a loss. If they can only maintain last year's levels, then they probably are lower than their internal forecasts. The last thing, Lei, we should take a few minutes, first of all, to thank Dr. Brian Gu for sitting down with us at CES. My apologies. We meant to get this video out last week.

and we'll do a much better job. just, I just got to create a better process for doing this.

Lei Xing (48:59.534)
Well, you know, we should share the backstory a little bit because we had originally planned to interview him right before NVIDIA's keynote, Jensen Huang's keynote, but you know, Vegas traffic.

Tu Le (49:19.128)
So we, so let me add to this. So we were at the Mandalay Bay. This was during press day. And I think Mandalay Bay was only for press day, because then you would go to the conference center or you would go to Venetian on the following days. And so we got out of a press conference and then we were walking what seemed like an endless line, going to meet our contact at Nextpong who was with Brian Goode.

Lei Xing (49:32.974)
Yeah. Yeah.

Tu Le (49:49.826)
We're going to meet them at the Starbucks where the casino ends and the conference center begins at the Mandalay Bay and you take over.

Lei Xing (49:58.776)
Yeah, so and then I mean he was running late and he was trying to, it was a VIP obviously because the former head of autonomous driving, Dr. Wu Xingzhou is now the head of one of the heads of automotive and video. And then later on he showed a picture of him sitting right next to Wu. So and then it was like, okay, let's prioritize your schedule first.

Tu Le (50:13.678)
Shenzhou.

Lei Xing (50:29.28)
And so we ended up, which turned out to be better, we ended up at the Xpeng ArrowHT booth with the Lotto conference room, which was, I think, better.

Tu Le (50:39.246)
Well, we should also mention that you had in your mind an area where we were going to stand and interview Brian, but then it was just so many people and it was so loud that...

Lei Xing (50:51.318)
Yeah, it was sticking over. was like a concert, right? It was like right before the entrance into a concert. So that was not going to work. So yeah. really, we really didn't prep him with any questions beforehand. was what we thought of. Some curve balls we threw at him. But I think that's the value of it.

Tu Le (51:02.4)
Lei Xing (51:21.146)
And he was quite frank and prepared.

Tu Le (51:32.728)
So we sat down with him in a small little conference room at the ArrowHT booth. We focused on reflections of 2024, internet or XPeng's international expansion, the smartification of the industry in China and what he saw next for XPeng. Answers to those questions, you got to watch the podcast.

When you're watching it, hit the like and subscribe button, because we reawakening our China EVs and more Max episodes, and we'll try to get a couple more interesting guests for you in the near future. But please leave your comments if you have any comments. And yes, we did our best with the recording. The audio sounds pretty good, but the video...

Lei Xing (52:17.742)
Yeah.

Tu Le (52:30.934)
We're still learning about this stuff, but because Lei and I aren't professional content creators. So, hey, one question from Mike, the car geek, read a report about BYD hiding debt used to support its suppliers. Did you hear about this Lei? GMT research reported it in Bloomberg. Any thoughts on this?

Lei Xing (52:37.178)
Well, we try.

Lei Xing (52:50.798)
I know.

Lei Xing (52:58.944)
I haven't heard about it, so...

Tu Le (52:59.35)
So I saw the article, but I haven't read up on it. The one thing that's important here is that...

They, yeah, I can't accurately give you my take. I'm going to read the article and take a closer look at the report. But if that's the case, then, you know, BYD's balance sheet is pretty significantly negative. But again, I don't want to speculate too much. I'll read more. But this is the first I'd heard of it.

Lei Xing (53:39.172)
But...

Tu Le (53:42.508)
when I saw the article or someone sent it to

Lei Xing (53:43.374)
Yeah, I think when you become the bullseye, when you become the number one EV automaker in the world, you're the bullseye and all the scrutiny is going to come at you. that's where I think it's getting tougher when you go to four million, five million, six million, when you become number one. These things are going to come up.

and I don't know the specifics of it, but there's also about Warren Buffett selling stakes. I don't know if it means anything at all. At the end of the day, probably doesn't matter as far as BYD is concerned. It's just that when you hit a scale for anyone,

in the Chinese market, global market, Volkswagen, Toyota, nobody stays on the top forever. And that I think that's you use, we saw this in the Chinese market, right? The auto could be leading the weekly sales for many, many weeks. And all of a sudden, XBUN took over for a week.

wanting to emphasize that it's all that important to look at the weekly numbers but that shows you how difficult the market is.

So yeah, I think BYD is gonna have a new approach this year. I think on the ADAS side, they might have some things up their sleeve. I think they're working with DJI on standardizing the, like Momenta for GM, on standardizing the urban kind of the ADAS features. So yeah.

Tu Le (55:46.562)
I'm gonna do a bit more digging and if I hear anything further about this, I'll try to comment and I'm sure Lei will do some research as well. All right, man, next week is Chinese New Year. It's a normal week for us though.

Lei Xing (56:08.952)
Yeah, can, I I mean, things will still happen in the rest of the world.

Tu Le (56:11.928)
For some reason, I scheduled the live show, but that link that I sent, it didn't work. So this creates a separate, a different link to YouTube. So I don't know. So I need to figure this out. need to, yeah, I need to figure this out. But everyone, as always, thanks for joining us. Good morning, good afternoon, and good evening.

Lei Xing (56:21.434)
Okay.

Lei Xing (56:27.458)
Uh-huh.

I was so learning.

Tu Le (56:40.492)
I would say go Lions, but they're out now. So onto the Pistons who are playoff contenders. Anyways, Lei, I'll catch you on DMs, man. Have a good weekend.

Lei Xing (56:52.622)
Yeah, and last episode of the Year of the Dragon. Goodbye, everyone. Yeah, my year.

Tu Le (56:56.918)
Yes, the year of the dragon before the year of the snake.

Bye.

Lei Xing (57:03.93)
Bye bye.