Episode #196 - Lunar New Year, Tesla’s Autonomy Push, and Global Auto Trends

In this episode of China EVs & More, hosts Tu Le and Lei Xing dive into the biggest news in the global EV, AV, and mobility sectors. The episode kicks off with a discussion on the impact of the Lunar New Year on China’s auto market, including the significance of the Spring Festival Gala as a marketing platform for Chinese EV brands.

The hosts break down Tesla’s latest earnings report, discussing Elon Musk’s focus on autonomy, the upcoming “Model Q” as an affordable EV, and Tesla’s unconventional approach to gathering data in China. They also analyze General Motors’ North American manufacturing shifts in response to potential 25% tariffs on Mexican and Canadian imports.

Other hot topics include Volkswagen’s talks with Chinese automakers about factory takeovers in Germany, Stellantis’ struggles, and the evolving dealer model in the U.S. automotive landscape.

Companies Discussed:

• Tesla (FSD, Model Y, upcoming affordable EV)

• BYD (Global sales surge, leadership recognition)

• General Motors (GM) (Tariffs, North American supply chain adjustments)

• Volkswagen (VW) (Potential factory deals with Chinese automakers)

• Stellantis (Inventory struggles, pricing strategy)

• Ford (U.S. EV strategies and competition)

• Hyundai (Amazon partnership, online sales model)

• Nissan & Honda (Potential alliance discussions)

• Xiaomi (Su7 model at the Spring Festival Gala)

• Huawei (Maxro S800 brand visibility)

• Chang’an (Ito M9 light show, Shenlan/Deepal S09, Qiyuan Q07)

• AutoFlight (eVTOL showcase)

• CATL (Battery partnerships)

• Unitree Robotics (Dancing robots at the Gala)

• RoboSense (Lidar technology)

Don’t miss this insightful discussion on the latest trends shaping the global EV and mobility landscape. Subscribe and stay updated on the future of transportation!

Transcript

Tu Le (00:08.489)
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 into X, LinkedIn or YouTube. In the next hour, so my co-host Lei Xing and I will go over the week's most important and interesting news coming out of the global EV, AV and mobility sectors. What Lei and I discuss today 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 smash those subscribe and like buttons so you don't miss anything from us in the future. I'm also confident that Lei and I are two of most knowledgeable people in the world at this. So please help us get the word out to others about this podcast. 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. write free weekly newsletter that we pull many of our discussion topics from. You can sign up for that at sinoautoinsights.substack.com, which I encourage you all to do. Lei, can you please introduce yourself?

Lei Xing (01:23.566)
a Hongbao giving. And yeah, happy Chinese or lunar new year of the snake. We're officially in the year of the snake. And good morning. This is your cohost Lei Xing, former chief editor of China Auto Review. And this is episode number 196, the...

third day of the year.

Tu Le (01:53.058)
man, we're rounding the corner 200 episodes, Lei. I see that you got a haircut, I got a haircut, because it's the new year, so.

Lei Xing (01:56.285)
Yeah.

Lei Xing (02:01.614)
Well, we're getting to that point where getting a haircut doesn't really matter because we're getting to that point where losing hair.

Tu Le (02:15.099)
I've pretty much given up hope, My hairline used to be down here, man. Anyways.

Lei Xing (02:21.006)
So the third day of the lunar new year, last day of January, where in a matter of hours, we probably will know for sure the 25 % tariffs on Mexico and Canada and the 10 % tariffs on China. We probably will know for sure today. know, Trump has

Yesterday, he was hinting that this is happening tomorrow, the first day of February. Right. So it's something I think a lot of people were expecting to happen. So not a surprise. So Spring Festival, China is still on holiday. And over here,

Tu Le (02:57.973)
Which he had promised that initially, or he had threatened that initially, depending on.

Lei Xing (03:20.182)
I think by the turn of the year of the dragon and into the year of the snake, Tesla put out some autonomy stuff.

What's the word I'm trying to use? Broke the internet with the Elon's comments and the self-driving Teslas coming out of the Fremont factory. And then fireworks. We stay on the fireworks narrative at the Spring Festival Gala where Chinese EV

AV Mobility Tech War show. So these were some of the things that we're going to talk about. GM earnings, Tesla earnings, obviously. And some data.

Tu Le (04:21.951)
Deep sea, taking a bunch of money out of people's pockets.

Lei Xing (04:27.756)
Well, the entire January, three names that broke the internet, Xiao Hongshu, Red Note, DeepSeek, and UniTree. And they're all Chinese. Basically, the entire January. And leading up to the Spring Festival Gala were the UniTree bots.

We're doing the yangga dancing.

and you know, Chinese EVs models were on there. So where do you want to start?

Tu Le (05:13.269)
There's, so we always pick up new viewers and listeners every year. So maybe you can talk about initially what this gala is that you're referring to, something that I experienced for the first time in 2009, having moved. And it is quite literally something that almost all Chinese families watch.

It's hours long. Hours long. yeah, so why don't you describe to people what it is.

Lei Xing (05:51.48)
So.

So I am a snake and I believe you are a tiger, is that correct? Tiger. So this is my year. And for the people that understand the zodiac, the 12 zodiacs, you can guess how old I am based on knowing that I'm a snake. And for as long...

Tu Le (06:01.727)
Tiger, that's right.

Lei Xing (06:23.822)
almost my entire life, almost. I've watched the Spring Festival Gala. This thing that was started in 1983, now 2025, how many years is that? I don't know, you can do the math, but I've probably watched almost every single year. And it's a celebration once a year, a kind of entertainment, I think for billions of Chinese.

And specifically this year, I think the viewership, interestingly enough, was the highest since the last year of the snake in 12 years. And the box office, movie box office in the last three days was also a new record, over 4 billion MMB in box office receipts.

What can we even borrow from them?

Can we infer that people are staying in and they're not traveling, they're not spending money on other things, traveling? I don't know. It's something that I thought immediately, but a lot of people watch this. And for this event, it's a venue where brands put out marketing stuff on it.

Tu Le (07:55.657)
The number of eyeballs that they get to get in front of is bonkers.

Lei Xing (07:56.117)
Yeah.

Lei Xing (08:04.504)
There's probably, I think I saw a number, over 300 million watched it on the mobile devices. That's the entire population of the US. And there's 1.4 billion people in China. Not everybody watches it. And I kind of watched it in bits and pieces just because I wanted to find out who the...

the China EV brands or models that kind of did the marketing on it.

And guess what? Yeah, you can also share.

Tu Le (08:40.991)
Let me add my take to this. So my family is Vietnamese, technically, but we also celebrate Lunar New Year. In Vietnamese, we call it tết. Or during the Vietnam War, there was a thing called the Tet Offensive, right? So Tet is basically tết. So during Chinese New Year, Lunar New Year, the North Vietnamese attack.

So that's the Tet Offensive. Anyways, the importance of the Lunar New Year to the Asian region can't be understated. it's something where a lot of, this is not just a Chinese thing. A lot of the Asian countries are emerging markets. A lot of people move to the cities and Chinese New Year or Lunar New Year is the only time they get to see their family.

And so it's one of the largest migrations of people traveling in the world every year. And we had an AI or an helper when we had young children and she would go see her son once a year and it was during Chinese New Year. And so it's important, especially because a lot of these people, it's like a Thanksgiving.

know, Thanksgiving is the holiday, it's a non-religious holiday where everybody comes back and sees their family. Okay. Now imagine this for a two week period. It's the only time in China during the year that literally everything shuts down. And if you go to the Great Wall, if you go to Tiananmen, if you go to...

Lei Xing (10:08.322)
Yeah.

Lei Xing (10:12.654)
Come and see us.

Tu Le (10:36.997)
the Forbidden City, all these major tourist attractions, you'll see crowds of people. And it's really, really an amazing sight to see now. With regards to that Spring Gala show, we would go over and watch it with my wife's family. And obviously it's all in Chinese, and I could understand.

you know, more than half, but it's a long, long show. And we normally wouldn't make it the entire time we would go home before midnight because in the early years, we talked about this last week, fireworks are all over the place. But go ahead, Leigh.

Lei Xing (11:27.074)
There were some America factor in the Spring Festival Gala. One Republic performed their Counting Stars, like a huge global song in Wuhan. And this guy, Evan Kyle, who kind of donated the historical photo album, he was in audience and special appearance.

Tu Le (11:36.595)
Yeah.

Lei Xing (11:56.258)
So, but, so I mean, that was really interesting. But really going back to the China EV related stuff, Xiaomi Su7 models were placed on the tables quite a few times there, the camera angles zoomed in. On the back wall, there was the Maxro, Huawei Maxro S800. Yeah. Yeah.

Tu Le (12:22.227)
Maestro? Maestro? Maestro.

Lei Xing (12:25.912)
just a sign, no vehicles. And one of the scenes, they also have these locations, satellite locations. In Chongqing, there were 780 Ito M9s doing a light show at the Chongqing Saris factory. And on

Tu Le (12:48.051)
Where...

Ito's owner Chang'an is Ted Korter.

Lei Xing (12:57.922)
Yeah, and Chang'an was big, right? So we have the Ito, we had the Shennan, there was a poster on the wall of this skit, very, you know, it shows a poster of a Depaul S09, the big EREV SUV they're launching.

Tu Le (13:18.591)
So for those that don't know who Deepol is, I'll translate for Lei. It's a Shen Lan brand.

Lei Xing (13:24.984)
Yeah, deep blue. Translatorily, it's deep blue. Yeah, 深蓝. And then one of the scenes before the skit, these actors arrived in a Qiyuan, Q07, another Chang'an group brand. And what else? one of the drone eVTOL companies called AutoFlight showed this eVTOL in the Chongqing.

And guess what? The batteries are powered by CATL. So directly or indirectly, these Chinese EV brands and models were front and center. But the biggest of them all were the Unitree H1 robots doing dancing. I think that broke the internet.

Tu Le (13:59.797)
course there.

Tu Le (14:18.719)
So for those that are wondering, Unitree is what Boston Dynamics is. And also the Tesla Optimus. So think of those drones and those human and robots, the dog-style robots. There's also a company called Limax or Limax that is co-founded by Le Zhang, who's

also a co-founder at WeRide. So I want to point back to that because we saw DeepSeq take $600 billion, effectively take $600 billion off the value of Nvidia and ChatGPT taking billions off of that value as well. And that's one company. Now,

In the EV space, there are supposedly 150 companies. In the robotics space, there are dozens of companies, too, that nobody knows about.

Lei Xing (15:18.904)
Well.

Lei Xing (15:22.222)
100

Well, like we said, there's hundreds of Zekers in China, just as there are hundreds of unitries in China, and there's hundreds of auto flights in China. X-File and Aero HT, right? These people getting into all of these low altitude or robotics. Or the other company powering the unitry bots is RoboSense, which is one of the big three lidar companies.

So directly, many Chinese tech companies were represented in the show. Yeah, and right, so last couple of days, was a lot of talk on internet, on social media.

Tu Le (16:11.893)
So with all that being said, talking about Chinese New Year, there's not a lot going on in China right now. But contrast that with, go ahead.

Lei Xing (16:21.28)
Even the weekly EV data were off.

I think nobody published anything on that.

Tu Le (16:34.407)
Right. This is the lowest activity of the year for everything China effectively. And contrast that with what you had said at the beginning of the show. We're looking at 25 percent tariffs on Canada and Mexico likely going to be activated or threatened to be activated on February 1st. And there has been articles recently in the Detroit News and Business Insider, I think in Bloomberg. So there are three point six million

vehicles built in Canada and Mexico in 2024. Lion's share of those were shipped to the United States and built by the D3 or D2, however you want to call it. A disproportionate amount of that 3.6 million 900,000 units were built by General Motors in Mexico, who has the largest manufacturing footprint.

Lei Xing (17:12.834)
Yeah, I think.

Tu Le (17:32.933)
in Mexico among the D3.

Lei Xing (17:36.43)
I think, yeah, the numbers seem to be right. So GM sold, I think, 2.7 million in the US last year. And a third of those came from Mexico and Canada. So the math works out to be right. 2.7, a third would be 900,000 units. Yeah. Yeah, chop it up.

Tu Le (17:52.105)
Yeah, trouble to all. so there was an article that talked about Mary, I think it was the Wall Street Journal article or New York Times article that talked about GM having prepped for this situation and effectively looking at their North American, Canada, Mexico, United States manufacturing footprint and moving

manufacturing some capacity over into the United States. And so let me give you all a little bit of background because I'm an ex-supply chain operations guy. So that means six months ago at least, they probably created a war room and said, okay, where are our most flexible manufacturing facilities in the United States? And where do we have the most exposure with regards to Mexico?

who are our best sellers, what are our best sellers? And then they looked at the bill of materials and said, okay, if we were to move the, and I'm making this up, so if we were to move the terrain manufacturing from Mexico to Fairfax in Kansas City, what would the suppliers need to do? And so they create a war room and there's the risk management teams looking at all this and.

trying to figure out how to optimize based on the rumors while the lobbyists in Washington DC are trying to get the seriousness level of the tariffs being enacted and how far and how deep these tariffs go. Is it just finished goods? Is it parts as well? And if that's the case, they're working with suppliers, the sourcing, the supplier quality teams.

They're working with their suppliers to try to get them to move supply from manufacturing in Mexico and Canada into the United States, or they're pushing them to eat that cost. And so there had to have been over the last four months, a lot of activity on the sourcing supplier quality side and the logistics. And if you move manufacturing

Tu Le (20:18.389)
product X from Mexico to Fairfax, there's a ramp period, there's a testing and validation period to make sure the vehicles are at or above the quality levels that you need them to be. I'm oversimplifying this because it's a complicated, really complex dance that many different departments need to work together for. So for Mary to say that during the earnings call,

Lei Xing (20:44.984)
Mm-hmm.

Tu Le (20:47.669)
or was it during the earnings call? There's sharehold anyways, for Mary to say that it means that they did an extensive amount of work in the background over the last few months.

Lei Xing (21:00.556)
Yeah, the kind of the politically correct answer, I think she said in earnings call that they've had discussions with the Trump administration. But yeah, mean, their GM is also importing vehicles from China or has been importing vehicles from China. Buick emission, right? Those type of models afford as well. staying on the GM earnings, Tesla earnings,

So China was actually quite a big topic in whether it was in the press release or in the deck earnings stack and in the earnings call because.

Tu Le (21:38.719)
Well, let's broad brush this really quickly. Gross margins down, sales down. China was up for Tesla, but overall margins were squeezed. Anything else you want to add from a result standpoint before we get into the implications?

Lei Xing (21:58.03)
I think results for Tesla, if we see the hard numbers, they were all below kind of expectations. Margins excluding the regulatory credits was 13.6%. And that was kind of stood out to me because that was the lowest, I think, since Q4 of 2017. It a long time ago. And remember,

Tu Le (22:07.645)
Revenues down.

Lei Xing (22:28.374)
I think there were about 600 million, if I remember correctly, that was earned from, was it crypto trading? Was it the Bitcoin? And yet, yet the street reaction was that the stock was up despite all of these negative financial numbers because of all Elon talked about was this

Tu Le (22:37.845)
Yep.

Tu Le (23:00.063)
Well, no, it's because that video of the cars driving themselves into ships.

Lei Xing (23:06.338)
You know, the video was put out on the last day of the year of the dragon. was thinking, just right around, right around when the Unitree bots were doing their dance on the Gala show, I was thinking Tesla must've felt a bit of FOMO. So they put out this video showing, hey, we can do this, we can do this.

And then culminating with the earnings call saying they'll launch this unsupervised FSD paid service in Austin in June. And then he gave out a schedule of when he expects where in the world either supervised or unsupervised FSD is released, is available. He gave out that schedule.

And I think one of the reports that you shared shows that I guess you can no longer, mean, GM, you treat it as an auto company, but Tesla, based on the street reaction, is no longer an auto company. Because there are sales, I mean, nobody talks about that.

Tu Le (24:26.525)
well, honestly laid based on.

Lei Xing (24:31.65)
It was all autonomy, was all optimists, was all bots. mean, even on an earnings call, nobody asked about the kind of the sales projection, right?

Tu Le (24:42.773)
Well, one thing that is important to your point, the sales prediction, right? In Q3 earnings call, he said 20 to 30 % growth in 2025. He took that away on this earnings call.

Lei Xing (24:58.284)
Why not only stack, it just said return to growth.

Tu Le (25:02.129)
Yes. So that tells me that they're not seeing the numbers they want to see out of the Juniper. And maybe that affordable Model 2, whatever they're going to call it, is not going to be as successful in the China market.

Lei Xing (25:16.632)
What? Model Q?

Lei Xing (25:22.988)
Well, so this is something I think because so much talk on autonomy and FSD and optimists, I think that this was.

not as talked which we think or I think I don't know about you but this model Q could be crucial or will be crucial for Tesla to return to that growth in 2025 and the CFO I forget his name did say they're on track to launch this affordable model in the first half of 2025 which

I just treated that based on this auto home report, it's looking to be priced at around 150,000 and maybe Mark less than model three, less than $30,000. I think that is probably a more interesting and important model for Tesla to get to that returning to growth.

Tu Le (26:31.989)
The one thing I want to ask you, is because I didn't watch the whole thing, he never said L3. He only said Unsupervised, correct?

Lei Xing (26:32.386)
Good luck.

Lei Xing (26:41.186)
He noticed at L3.

Tu Le (26:44.767)
So are you assuming unsupervised equals L3?

Lei Xing (26:44.949)
And to me...

Lei Xing (26:51.214)
Here's the thing. He said the paid unsupervised FSD service in Austin, to me, that's a robot taxi. It's a fleet that Tesla is running and he refers to it as dipping a toe in the water. So this is not, right, way more competitive. And then he did say the other regions of the world, the other cities in the US,

Tu Le (27:11.381)
so are way more competitive.

Lei Xing (27:20.718)
that unsupervised FSD will be available. Now it isn't clear whether he means similar paid unsupervised FSD fleet service or as a private driver that this is unsupervised FSD, which to me in that sense is level three because you're still sitting in the car, right? But you can look away.

which is L3.

Tu Le (27:52.745)
Well, what's important, the reason I keep on harping on the L3 part is that liability moves from the vehicle owner to the manufacturer.

Lei Xing (28:01.56)
He never touched upon that part of the, yeah. So a lot of Yeah. But.

Tu Le (28:08.533)
Probably by design.

Lei Xing (28:15.918)
Yeah, I mean simply put it's it's a it's a what they're doing Austin is a way more Competitor right And then he kind of talked about I think what was interesting was he for the first time He revealed how they gather data in China Did you hear about that they were taking their Videos off of the internet

Tu Le (28:39.925)
It's Super Ghetto! It's Super Ghetto!

Lei Xing (28:45.326)
When I heard that, I was like, what? And then he talked about the... No, I didn't see it yet.

Tu Le (28:50.195)
You saw what I wrote in the newsletter,

so anyway, so I saw that and I heard that too and I was like, what? And my first thought was, okay, and Stanley Twin, they had two lanes and then a year later it turned into a one way with no left turn. Remember where the Uniqlo store is? Taekoo Lee.

Lei Xing (29:15.533)
Yeah.

Tu Le (29:23.987)
Remember Tai Kuli, right? And then they turn that two-way street into a one-way bar street. Remember bar street? So the signs, the way on streets change in China. And I'm not saying the tier one so much because Shanghai is pretty much set. Beijing pretty much set. But some of these lower tier cities, they're still building out roads.

Lei Xing (29:25.294)
Mm-hmm.

Tu Le (29:53.255)
And so if you're looking at a video that's a year old, two years old, six months old, it's not going to be accurate. And, man. So, that's a weird thing. Weird, weird thing. I, I think the people that have lived and have visited China often can appreciate what I'm saying more than, you know, cause if, if you're looking at a video of I-75 in Michigan,

Okay, yeah, doesn't change. That hasn't changed in years. But in China, that stuff changes pretty regularly.

Lei Xing (30:30.722)
Yeah, I mean, I think he was talking about, I think he was vehemently against LIDAR. You he said, you know, people don't shoot out lasers from their eyes. And it was like, so funny hearing. And I mean, that's, and he talked about the kind of the bus lane, the BRT, bus rapid transit lanes. It's only one of them.

Tu Le (30:55.021)
Can you tell people about that, about how China works, especially in major cities?

Lei Xing (31:00.256)
in the least in the major cities and I've been I've actually taken buses on those routes where there's special lanes. Mostly well, it could be in the middle of the road or to the right of the road where only buses are allowed either full time or at certain times of the day where a private vehicle cannot use. If you do, yeah, use if you do.

Tu Le (31:26.503)
normally during work hours.

Lei Xing (31:30.05)
You get a ticket, electronic ticket, and you have to pay it off, right? So he thought that.

Tu Le (31:37.469)
And sometimes, Lei, there are physical islands that separate the bus lane from the road. Sometimes there's just a paint mark or stripes, paint stripes.

Lei Xing (31:46.606)
Yeah. So I mean, those are only one of the countless complexities on roads in China, big and small, cities big and small.

Tu Le (32:00.353)
And just like in the US and Europe, state by state, city by city, there are different rules. There are different customs. a lot of you can put every single law into the algo and the car can follow every single rule. But then the customs locally to that city need to be taken into consideration. I don't know if you can get that by just

Watching video and then one of the things I brought up land. This will make you smile, you know, ciao young men Why thought you they had that physical island where the bus lane goes into the middle and My friend she would always Turn turn right and go to the middle bus lane and always got tickets because she just never thought of it and You know those simple things

Lei Xing (32:38.968)
Mm-hmm.

Lei Xing (32:52.366)
Yeah.

Tu Le (32:59.229)
Unless you're actually driving and seeing this, I don't know how they deal with that.

Lei Xing (33:09.016)
Yeah, but I guess the earnings call did confirm last episode. I expected that as a matter of time, that FSD does get approval. So it looks like Elon hinted that sometime this year they will get the FSD approval in China. But how competitively it is compared with the other NOAs available, that's a different story.

And we saw some numbers. I think the new model Y got like 70,000 orders in China. So these are very fluid. think there's both positive and negative. But I think that new affordable is pretty important. Because one of the numbers they showed in the earnings deck was their COGS.

was at the lowest point, but it still above $35,000. And in order to bring down kind of the amount of Q to below $30,000. And oh, and the other thing that I thought was interesting was, Elon mentioned was they still have constraint on the battery packs. He said it was one of the constraints this year.

Lei Xing (34:33.88)
for a company that does close to 2 million vehicles a year.

Tu Le (34:42.594)
Let's think of this from a China competitiveness standpoint.

I would argue, and please, if you disagree, let me know. We look at the Model 3 refresh, we look at the Model Y refresh, they're still very, very, very bare bones. And they're much more affordable in China than they are in the rest of the world. But they're still fairly expensive relative to other products that

they compete against in China. Now, if they decontent that even further to get to that 150,000 RMB price point lay, we're going to be talking basically a bare bones electric vehicle with nothing. Because they don't have a center, they don't have a instrument panel like a lot of other vehicles do, which

In and of itself is not a big deal because Lee Auto stopped doing instrument panels, but they have HUD. Okay. So. $150,000 or 150,000 RMB Tesla in the China market. That's more bare bones than the three or current Y. I don't know how it competes because the Sue seven is feature packed for $30,000 for $35,000. So.

What do you think?

Lei Xing (36:21.186)
Yeah, I agree. mean, it's, can they, well, this is how I look at it. Can they have the same resiliency with what the Model Y has done? And Elon did say for the second year in a row, the Model Y will be the best selling vehicle of any kind in the world this year. so he has a lot of confidence on that and Model Y has stayed strong, I think.

last year in China, but for the 150,000 renminbi, can it do the same thing? Not so sure.

Tu Le (37:03.473)
One other thing I want to note, Lei, is you know that the automotive executives in China are looking at the weekly sales numbers for Juniper, even during Chinese New Year. And once Chinese New Year ends next week, depending on how positive those sales numbers are, it's going to...

It's going to give them how aggressive they need to be with promotions for price reductions because they're all going to try to make sure Juniper doesn't take sales from them. And I can assure you that the month of February and March, there's going to be some fireworks. If Juniper has sustained growth and good news for Tesla in

in China at least.

Lei Xing (38:04.684)
Yeah, so from the early numbers, it looks like it's okay. It's not out of this world, you know, numbers, but it's good. I think given the position of the bloodbath in Chinese market.

Tu Le (38:23.501)
But 70,000 units is not growth for China. So not really. That's kind of flat, depending on how many are exported. But we also know that they're ramping Juniper in Europe and ramping Juniper manufacturing in the United States. So assuming that most Juniper...

Lei Xing (38:28.852)
Yeah, I mean,

Lei Xing (38:41.58)
Everyone.

Tu Le (38:50.645)
Juniper's built in Shanghai are domestically consumed, that's incremental growth. you know, and it confirms Elon's, yes, we're going to return to growth, whether that's 2%, whether that's 5%, it's not going to be the 20 or 30 that he had called out in a previous earnings call.

Lei Xing (39:10.178)
Yeah, and also the, what was I thinking about?

Lei Xing (39:20.066)
Yeah.

But just, mean, really nothing on the automotive part of it. I think everything was either autonomy or optimists. And he's talking about valuation being more than the next five combined, revenues of 10 trillion alone for the optimists. He's just putting all these flags down, like he always does.

and

Tu Le (39:54.229)
So there's a couple of different things going on in the United States. So maybe we can focus on that for a few minutes and maybe we get out here a little bit early because not a ton of news coming out of China. The cars are Moreno, who's a Senator from Ohio in the United States. He's trying to roll back the EPA restrictions. He's trying to defang California's

power to create their own emissions rules to sell into California. He's going to probably lean into protecting the dealer lobby in the United States all the while. we know historically Rivian and Tesla have taken the dealer lobby to court in order to

be able to sell their own vehicles as they see fit. Volkswagen Group is now, Vscout is now in court with the dealer lobby because they want to be able to do their own thing, direct to consumer. And so we could see...

how the passenger vehicles started in the United States changing materially. I am an outspoken advocate for that because although my purchase process for the Hyundai was fairly painless,

Having dealers lead your sales process is probably not the right way to go moving forward in a digital world. So in the United States.

Lei Xing (41:48.174)
Well, yeah, well, Hyundai and Amazon came out with that online. It's available, but you still need to go through the dealerships because you really need to select the dealerships. Anyways, So dealers are involved no matter what. Yeah. then with respect to the potential 7,500 credit being axed,

Tu Le (41:54.409)
Right.

Tu Le (41:59.093)
You

Tu Le (42:04.853)
So that's almost an extra step now. So I don't know.

Lei Xing (42:16.812)
I think Elon only responded by saying sustainable transport is inevitable. He did not address that directly.

Tu Le (42:29.403)
And he would also never admit that almost every vehicle that Tesla has sold has gotten government help.

Lei Xing (42:41.57)
Well, I mean the-

Tu Le (42:41.811)
Whether it's in the United States, whether it's in China, it's gotten subsidies or some help. so Tesla. Is has been one of the most subsidized EV companies. Full stop in the world. So. man, and then.

So really quickly, I had a good event with Joe White, ex-journalist from Reuters in semi-retirement. He seems busy or never, a lot of interest, especially now that the Trump administration is really starting to articulate more details on their vehicle strategy and the automotive space.

The combination of 25 % tariffs in Canada and taking away of the $7,500 subsidy. First of all, I don't know how easy that's going to be. I think it's going to take an act of Congress. It's not just an executive action that he can do. But if those happen, I think the tariffs he can put in place himself. if those two things happen, we're going to see a lot of

movement in the automotive space because we also have to remember that everybody builds in in North America whether you're Volvo, BMW, Mercedes and so

they're going to have to reconcile their EV pricing.

Tu Le (44:22.645)
how taking away 70, because Elon has said historically, we don't need that $7,500. He's lying. They need it. And I wouldn't have been able to get the IONIQ 5 without that $7,500 credit at the price that I got it at. And so, man, we're likely going to be talking about the United States or the North American market a bit more often.

this year, Lei, in our Chinese EVMOR podcast.

Lei Xing (44:54.776)
Yeah, yeah, well, it's, it's, it's directly or indirectly related. Anyhow.

Tu Le (45:02.239)
The one thing that I wanted to get your take on, Lei, is not sure if you saw that Reuters article where Volkswagen is rumored to be in discussions with Chinese automakers, their partners, to possibly take over factories in Germany.

Lei Xing (45:17.826)
Yeah, mean, everything's on the table. I think Oliver Bloom even confirmed it, that they are kind of in discussions. I remember, here's an anecdote that we haven't shared. Right after we interviewed Brian Gu, the next person in line that had a meeting with him was the sales marketing head of Magna Steyer. And what does Magna Steyer do?

Tu Le (45:25.523)
which seems blasphemous, which would have seen blasphemous five years ago.

Tu Le (45:45.023)
Magna.

Lei Xing (45:48.29)
They contract manufacture vehicles from Mercedes, Toyota, BMW, the Waymo robotaxis in Graz, Austria. Yeah. And from my knowledge, they've been in discussions with many, many Chinese EV makers with the ambition of going into Europe. contract manufacturing.

Tu Le (45:57.727)
They were doing Fisker.

Lei Xing (46:16.532)
utilizing the current assets of German automakers in Germany or somewhere else, exporting, doing a greenfield. I think everything is on the table, right? And I think.

Tu Le (46:30.473)
Well, I think that the what

What could be really revelatory is that as the European automakers are weak in Europe and the US automakers are weak in the United States, if that continues, we might see the Chinese automakers come in by Brownfield. So Brownfield is an existing manufacturing site that's taken over. And Greenfield,

just means that they're building a brand new factory from the ground up. Now, this is the mindset shift that people probably aren't prepared for. They might get bailouts from the Chinese automakers in North America if their sales continues to shrink because you can't be owning and running factories at 50 % utilization rate. And so,

That's also why GM builds almost a third, more than a third of their vehicles in Mexico because it's cheaper. And that tariff takes that away. But what I will be looking for after February 1st, if the tariffs get turned on, is how pricing gets adjusted, if at all, by the D3. Because we know Stellantis is already

in trouble because they overpriced everything and took advantage of customers during the COVID years. And they're paying the price because of fat inventory levels, at least through the end of last year.

Lei Xing (48:17.976)
Yeah, and then I think that EU tariff discussion of minimum pricing is still going on. There have been recently some few lawsuits filed by BMW. I think GLE, I don't know whether Tesla did so as well, but I think it's all right to the EU Commission. And yeah, so a lot of activities in the European.

Tu Le (48:37.065)
They did too, I think so. Yep.

Lei Xing (48:47.502)
side of things for China EVs. Not so much here, but here is more of what the US, big three and with Tesla, how they confront this potential new tariffs, right? Imported into the, you know, even from China. So that's where we kind of stand and yeah.

Also tomorrow we'll hear the January numbers. Tonight actually we'll be starting to hear the sales numbers. We can't make any conclusions from it because the Chinese New Year is only starting the year. It'll be long compared to December obviously.

Tu Le (49:38.078)
and

Tu Le (49:41.459)
I just haven't heard that much. I don't know if you're getting, mean, obviously most of the, our contacts are on vacation or off. Yeah. So, and I'll be honest with you. I would normally ping them, but I want to respect their time off.

Lei Xing (49:42.51)
Yeah.

Lei Xing (49:51.49)
Mermute.

Lei Xing (49:58.434)
Yeah, as a courtesy, we kind of, you know, not bother them.

Tu Le (50:02.919)
Yeah, I'm okay with that. I think right after Chinese New Year, we're going to see a lot of behind the scenes activity. I think you and I will see that late. And yeah, so that's all I had today.

Lei Xing (50:15.028)
And the last thing, congrats to Stella Lee on winning that World Car Person of the Year. First lady to do it, first person from a Chinese brand to do it. And 30 years ago, she was selling magazine ads. And then 30 years later, she's the World Car Person of the Year.

Tu Le (50:22.421)
yeah.

Tu Le (50:40.339)
I don't know if you can really call yourself...

a global automotive analyst without some acknowledgement that BYD has just really, really taken the automotive world by storm and crediting Wang Chuang Fu and Stella Le in particular.

Lei Xing (51:00.27)
Yeah. So, surprise, Wang Chuanfu didn't get it. I mean, I think he was in the running. Yeah, for the international league. And one of their models, the BYD Seagull, is one of the top five in the Urban Car of the Year. So, there's still a possibility that a Chinese model could win one of the World Car Awards this year.

Tu Le (51:08.627)
Well, she's out front more than he is, at least in the West. Yeah.

Lei Xing (51:30.322)
And if not this year, by the end of this decade, I'm certain a model from China has got to win this award. It's only a matter time.

Tu Le (51:39.797)
I don't disagree. The last thing I will say is our friend Ed Kim had posted, he's currently driving an ID buzz. And he posted on LinkedIn yesterday that the second road does not have any cupholders.

Lei Xing (51:58.818)
This is American thing, or is it a global thing?

Tu Le (52:03.165)
Well, it's definitely an American thing, but you know, it's he's driving it in California and it's supposed to be a family vehicle. And so that seems like a major, major, major design oversight. Whether it's cost cutting, whether it's by design, I don't know. But as you and I know, cup holders, most automakers OD their vehicles OD on cup holders.

Lei Xing (52:09.998)
Good.

Lei Xing (52:31.774)
Well, I think even in China, the Chinese EV makers, make an effort to market vehicles with not cup holders, with what they call it as, well, refrigerator is one thing, but these locations where you can put things in, including cup holders, I think they can make a big effort on having that. Yeah.

Tu Le (52:43.187)
Refrigerators.

Lei Xing (52:58.734)
And then speaking of BYD, the last thing I'll share is I some digging of the top global automakers by sales in 2024. in terms of number, so 10, Toyota, Volkswagen, Hyundai, Kia, GM, Stellantis, BYD is right now in number six. And surpassed Ford, Honda, Nissan, which are 789 last year. And G. Lee Holden Group.

including all the foreign brands is number 10.

Tu Le (53:31.413)
But isn't Chung An at around 3.5 million?

Lei Xing (53:35.616)
Now, Chang'an, there were 2.6 million last year, including the forward brands. So they're outside the top 10.

So PYD and GD holding group are two of the top 10 in the world.

Tu Le (53:53.459)
Yeah, so I'd written that in the newsletter that I thought BYD was going to...

be higher ranked than Ford and Honda, so.

Lei Xing (54:01.198)
Yeah, thing, so Solantis Group globally was a little bit over 5 million last year. So the thing to watch this year is whether BYD can top that this year. Something to watch. And then the other thing.

Tu Le (54:14.857)
They're looking, I know internal targets are like five two.

Lei Xing (54:19.95)
Yeah, the other thing is we're still waiting on the Honda Nissan announcement. If they do combine, then they will be the number four after Hyundai. Number four, Hyundai Kia is 7.23 last year. Honda Nissan was a little bit lower. So, and I don't think they'll increase this year.

Tu Le (54:30.197)
Three?

Okay.

Tu Le (54:41.469)
And just.

Just a reminder, Tesla's at 1.8. And according to Elon, they're going to return to growth. So is that 2 million? Is that 2.2? Is that 2.4? We're still not sure. We will know more.

Lei Xing (54:57.934)
Well, 1.8. Last year it was 1.79ish. So 1.8 is growth.

Tu Le (55:02.973)
Nine. Yeah.

Tu Le (55:08.455)
Yes, 1.8 is growth. All right, that's all I had. Everyone, thank you for joining us. do we know? So the LinkedIn, normally there's comments on LinkedIn, but the LinkedIn link is not working or something. Anyways, everyone, good morning, good afternoon, good evening. We will talk with you all next week.