Episode #202 - What Juniper Is Up Against, Tariffs Loom for Large Legacy Auto, Pony AI Dialing Up Robotaxis

In this episode, Tu and Lei discuss the latest developments in the electric vehicle (EV) market, focusing on competition, technology, and consumer preferences. 

They analyze various EV models, including the G6 and Model Y, and explore the implications of lidar technology and RoboTaxis. 

The conversation also touches on the challenges faced by legacy automakers like Volkswagen and the struggles of NIO in the current market landscape. 

The episode concludes with insights into the future of the EV industry and the strategies of companies like Li Auto.

Transcript

Tu:  

Welcome to the China EVs and More podcast. In the next hour or so, my co-host Lei:   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. Also, I'm confident that Lei:  and I are to the most knowledgeable people in the world doing this. So help us get the word out about this show to others.

My name is Tu Le, I am the Managing Director at Sino Auto Insights, a global management consultancy that helps organizations bring innovative and tech focused products and services to the transportation and mobility sectors. I write a free weekly newsletter that we pull many of our discussion topics from. You can sign up for it at SinoAutoInsights.substack.com, which of course I encourage you all to do.

A tan, Lei can you please introduce yourself?

Lei:   

Yeah, good morning. This is your co-host Lei Xing, former chief editor of China Auto Review. And this is episode 202, number 202. It's middle of March. It's Pi Day, which means March Madness. Not the basketball world, the EV world.

Tu:  

Yes.

Lei:   

And also tomorrow is a dreaded day for the PR people because it's the annual shaming event. Remember, we always talk about that. And which automotive brand is going to be shamed? We'll see. But last year, there weren't any. Who knows? But the March man is because we know

Tu:  

Yes.

Lei:   

actions are heating up ahead of the Shanghai Auto Show. And March is supposed to...

Yeah. And March is also a month where sales are supposed to reach their first peak of the year. And you see these model launches or press conferences starting to get more frequent as competition push out messages, push out products.

Yeah, and we saw that from XPeng We saw that from LeapMotor this past week.

Tu:  

Breadcrumbs.

What were these

messages, Lei?

Lei:   

there, how low can you go? Basically, was the message. And one prime example is the G6 comparing the Model Y and He Xiaopeng was like, know, Model Y is 260,000 MB plus the 64,000 for FSD. So, it's 320,000 to have that high levels of autonomous driving features.

Tu:  

You

Lei:   

and the G6 ended up being the sub 200,000 MMB with smart driving standard. So that was kind of a swipe at the Model Y.

Tu:  

So, let

me first say that the XPeng G6 is a B segment crossover SUV, and it is about the same footprint as a Model Y. The Model Y is a little bit wider, a couple inches wider, but effectively it's the same vehicle from a size standpoint. And it's gotten refreshed a couple of times now. We were able to drive the big brother.

in Beijing last year, Lei you and I, from Beijing to Shenzhen. We were very impressed. Fit and finish was great. And this was a press car or a pool car. So it wasn't this brand new car that they loaned us. It was, it had a number of kilometers on it. And during the three days that we were in it, about eight hours a day, no squeaks, no rattles that I could hear that were annoying and convenient with charging in.

The differences between the Juniper and the G6, assume that the G6 has the same number of features as the Model Y. It doesn't, it has many more. And it has 5C charging, which means that you go from 10 to 80 % in 12 minutes if you're on the proper charging station. I don't think the Model Y has anything like that. They have more ubiquitous chargers.

number of chargers in China because of the Tesla charging supercharging stations, but 5C is pretty compelling and it's $24,000, $25,000 as opposed to 36. And to Lei: 's point, if you add 8,000 or 64,000 RMB, now we're at 45,000 for a Tesla Model Y. So almost twice as much for

a Model Y versus a G6 and Lei:  in order to give our audience a better idea of what else is out there comparable. Can you name a few others?

Lei:   

Well, there's all No, no, no, no, no, you won't there's one obvious one the Xiaomi YU7 launching in the summer That that's gonna be the biggest model Y killer yet the g6 and the both the g9 and the upcoming g7 are killers the Luxeed r7 the Li Auto i8 i7 that are launched in on I6

Tu:  

It might take a few minutes, it? It might take a few minutes.

Lei:   

this year and next year. The Onvo L60, it's not doing as well, but it's one. IML S6, the Zeekr 7X, Avatar 07, there is a bunch of them, right? And there are obviously more.

Tu:  

And if

we think about the United States, there might be five or six that I can think of. The IONIQ 5, the Mach-E, the Polestar 4. No, the Polestar, yeah, the Polestar 4. But these cars are $80,000. The Polestar is an $80,000 car. so, whereas the reason I think you brought up the G9.

being a competitor is because price point is similar, although the G9 is much larger than a Model Y. But this is where we point back to premium not being a price tag, premium being a feel, an ability to connect with the consumer or the user of the vehicle. And so the idea that a smaller, cheaper,

Model Y that likely won't launch until at the earliest end of this year in Shanghai. And that is optimistic because I was told that it might not launch until next year. It's probably too little too late. And a baby Model Y would need to be substantially less than a G6, which is 24.

Lei:   

What a missed it.

Tu:  

$25,000.

Lei:   

That's just another sign of the pressure that Tesla is facing because the SU7 the Xiaomi SU7 has passed the Model 3 in sales for three months in a row. And you have a number of these models coming for the Y. And the other perspective is, we often talk about this, need to keep the production humming.

in Giga Shanghai given the fact that the political backlash that Tesla has received elsewhere that's probably affecting export from Shanghai. It's still too early to say, I said Tesla is a Model Y market in China, pretty much. And how

Long that continues is not that rosy. Although it stayed strong, think, the last couple of weeks, Tesla has done over 12,000, 14,000 deliveries based on the weekly numbers. Started delivering at end of February. So that's still pretty strong considering all the

Tu:  

big reason for that is because of Juniper

Lei:   

competition, but they just keep coming. think from Xpeng, from LiAuto, from any of these companies, it's a tsunami wave of pressure, not only on the product side, but on the standardization of the smart driving feature. That was really started by BYD this year.

Tu:  

And you raise a good point, Lei, I think what's really important to take a step back and think through is that it's not going to be one vehicle that beats the Model Y. It's the 12 or 13 that you named altogether. Now there's going to be a lead dog or one or two lead dogs. I think the G6 is going to do pretty well. I think the 7X from Zeekr will do pretty well.

but it's not gonna be one car that a Chinese consumer looks at and say, I'm gonna get this or the Model Y. And then the other thing that I think is really important because you and I recently spoke with Steve Levine is that it's not gonna be one feature. It's not gonna be one unique feature. It's going to be the totality of what I get as a consumer for $25,000, for $30,000, for $35,000. And the fact that

a model Y with FSD light costs $44,000. That's a ridiculous price for, and I think we all agree universally that the, especially the interior of the model Y, there's not much to it. It doesn't feel like a $45,000 car when you get into a $25,000 G6. And I think that's the key. Now,

Do you feel $45,000 value in the United States when you get into a Model Y? I still don't think you see that value, but it's not a stark because there is no G6 here to compare it against. And so it's the totality of all these things together that is likely eroding Tesla's market share in China.

Lei:   

Yeah, hence, the things that Tesla can do tactically, one is this, the model Y, I call it the beggar edition. There actually a word, a Chinese character being used for these kind of no-frills, low-cost versions. It's called a Qigai Ban, which literally means beggar edition. And then the other thing is what Tesla does to increase

Tu:  

Hahaha!

Lei:   

if they can the FSD because hardware not everybody even if they paid 64,000 MB if they don't have the hardware for the vehicle they can't get it right so so so that's a kind of a bind there

Tu:  

One

thing that we should point out is that the G6 is moving away from lidar as well. But it will have two Nvidia Orin chips, which drive up the cost. Think about it, two Orin chips on a $25,000 car. I don't think there's that many $25,000 cars that have that level of compute in the vehicle.

Lei:   

We'll talk about LiDAR

And speaking of lidar, see what the LEAP motor did was they launched the B10, which was revealed at the Paris Motor Show last year when we saw that. 129,800 MIMB with lidar. But what LEAP motor did was their one, yeah.

Tu:  

Right.

Well, exchange,

let's foreign exchange that. So 100,000 RMB is about $16,000. So 129 is almost like 20,000.

Lei:   

Yeah, a little bit less than $20,000, right around $20,000 with LiDAR. And the key thing they did was use both Qualcomm chips for smart driving and the cockpit.

Tu:  

Right.

Lei:   

I think it's one of the first models doing that in the Chinese market.

Tu:  

And let me quickly

explain because normally on the premium side, there will be Qualcomm Snapdragon that runs the infotainment, the front console, the digital experience. then, yeah, exactly. And then the Nvidia runs the intelligent driving. there's, and we need to think of an electric vehicle, almost like a human body. There are systems, just a car, not even an electric vehicle.

Lei:   

Yep. $82.95 the standard right now. Yep.

On X.

Tu:  

A car has an exhaust system and has a wiring harness that puts everything together. That's like the central nervous system. vehicles have systems that are linked together via control modules, wiring harnesses, and a centralized brain effectively. And it's more prevalent in electric vehicles because everything is software driven.

Lei:   

Yeah, so I mean that could be another Model Y competitor, but although it's much smaller, but the pricing point, I mean, it's just getting ridiculous. The low with the lidar, and speaking of lidar, this week, this past week, the open secret is that Hesai announced a major

supply deal with a top German OEM. And Reuter has already reported that it's Mercedes.

So yeah, well, and that goes through beyond 2030 supply and the next generation of products. So it's

Tu:  

China for China.

Which is...

If you think about Hesai with the, with between RoboSense, Hesai and Innovusion they've driven down the price of LIDAR. Hesai, would argue is really making a decent LIDAR technology affordable to the masses. And so to see it linked to a premium automaker is really a big win for Hesai.

Lei:   

Yeah,

and then Hesai supplies the LeapMotor B10.

Tu:  

And

if you think about it, Lei the software is probably the exact same that runs the Mercedes versus the LeapMotor And it might be a little bit of the hardware that's different. if Hesai, and then you saw the bump that Hesai got in the share price because of that announcement. And so the share price had a little good news this week.

Lei:   

Yeah. Yeah.

Yeah, so I think both tracks are happening. even though XPeng is ditching LIDAR, that doesn't mean LIDAR is not, from a Robosense point of view, they're probably going to deliver over a million each LIDARs, including the RoboTaxis LIDARs, while you have these kind of the end-to-end, vision-only approach that are

Tu:  

And so now...

Lei:   

gaining more traction. The BYDs, kind of the low end. And XPengs, what do they call it? They have a name for it, I forget. Turing AI Smart Driving.

Tu:  

Yeah, I forget to. Yeah, yeah, yeah.

So we'll need to figure out because one of the things that XPeng really leaned into was simplifying their feature set on the G6 for 2025 because I think there was a lot of complaints about how complex the option list was in the 2024 G6. So they simplified that, which is great, but

I'd never heard of this touring. So I want to understand what's difference between all these intelligent driving systems coming out of, of XPeng. Maybe it's just two, two different ones, but, or maybe they've changed the name. I'm not sure. I think that's something that I'll need to look into unless, unless you, are very clear on that.

Lei:   

Well,

I think that this is what they started calling it, starting from the P7+. Yeah, so kind of like the division only that they're terming it without the lidar. Yeah.

Tu:  

Right, okay. So they just rebranded it.

Okay, got it.

and so Pony is going to launch more RoboTaxis. I bring that up because I was, go ahead.

Lei:   

Well, Pony, WeRide

made some announcement last week as well. So I'm going to go there.

Tu:  

So, and they're

looking to raise more capital in Hong Kong, doing secondary listings because they're both listed in the United States currently. I bring that up because I was in Austin a couple of days this week and unfortunately was not able to ride in a Waymo. I was staying, the hotels in Austin during South by Southwest are just ridiculously expensive. So I was out towards the airport.

Lei:   

Yup.

Tu:  

And I was just missing the pickup spot for the Waymo's. That was the first thing. And then the second thing, because you have to go through the Uber app, there's no guarantee that you'll get a Waymo. And so.

Lei:   

Okay.

No luck,

Tu:  

Cause

obviously in SF and Los Angeles, use the Waymo app, but this is Uber. And so I did see some and man Austin's cool town. It was hot. I had a good discussion with Steve Levine and Ed Kim from AutoPacific. We were at the Midwest house talking about auto and flux. Ed kicked some knowledge about.

Lei:   

You with Waymo yeah

Tu:  

what he's seeing with younger consumers. And what I got from all his research, or all the team's research was basically young consumers in the United States are very similar to young consumers in China. And the difference is that young consumers in China and young meaning let's say 28 to 45, 50 years old, okay. And young consumers. let's say the age is very similar.

But the meat of the market in United States is older just because the price point is much higher. The average price of a vehicle in the United States is around $50,000 US dollars. So a 28-year-old is not going to be able to afford, generally speaking, a 30-year-old is not going be able to afford a $50,000, $60,000 car. But Ed said that they love connected, they want, and they have no problem, no problem buying a Chinese vehicle, generally speaking. And so...

I don't know how long that dam is going to hold. The US government erected?

Lei:   

Yeah, I mean, I was in Cancun, I was in Mexico this weekend. I felt like in China because that was the first time I experienced on the street, just stay on the side of the street and watch the cars go by. One out of every 10 was a Chinese brand. BYD, JAC, Changan, MG, BAIC, a lot of ICE vehicles, small, compact, and a lot of...

Tu:  

Yes. Chery.

Lei:   

lot of Chevrolets exported by GM from China.

Tu:  

Were they Baojun's and Wuling's or were they really Chevy's?

Lei:   

Well, rebadged

Chevrolets from Baojun vehicles. So like Chevrolet Captiva, Chevrolet Aveo, small compact vehicles. So I was there, I'm like, if I was the US, I'd be scared. I'd be definitely scared. Right? Because right next door and the potential of

Tu:  

OK, Baojun. OK, yeah, right. So.

That's proof positive that all automakers are using China as an export hub.

Lei:   

of producing in Mexico and exporting into the US. That's just scary. Hence, we have the current, all of the barriers that are in place.

Tu:  

But instead of Trump administration being surgeons and carving out protectionism where it makes sense potentially, it is just brute force. I'm in a tear for everything and I don't care how much it costs, the US consumer or the American consumer, because whether you're a Trump supporter or not, it doesn't matter.

prices are gonna go up for things in the United States. There's a ton of uncertainty right now. Then if you look at the article in the Wall Street Journal that said that the F-150 10 years ago, you know this Lei, the F-150 moved to a mostly aluminum body. the frame is, yeah, the frame is still steel. And a couple of things here that I learned.

Lei:   

Yeah, now with the tariffs.

Tu:  

And I read the article and did a little more research. So obviously I lived in Pittsburgh for a couple of years, which is where a lot of steel historically has been. So there's still a decent amount of steel that's smelted. It's called smelted in the United States. Aluminum, it is basically gone. And it went to Canada. A lot of our imported smelted aluminum.

Lei:   

Yours.

It's not really, yeah.

Tu:  

is from Canada, which has never been a problem because we've had NAFTA and the Trump administration put the USMCA in place. And if we think about the F-150, the hood, the cab, the bed of the truck, all aluminum. And so, and we have to remember the average price of a F-150 is around $60,000. And let's say being conservative,

it might add 10 % to the price of the vehicle, right? if the wholesale price for an F-150 is $40,000, it might add a few thousand dollars. And I don't think the steel companies will eat that. I think we're gonna eat most of it as consumers. And when Ford is already predominantly a single product company, it's not a great look.

And if you look at Porsche, if you look at Mercedes and BMWs during their earnings reports, the uncertainty, the tariffs really make for dire revenue and profit projections.

Lei:   

Yeah.

And the last week was kind of the earnings week for Germany, especially Volkswagen Group. And that one slice stood out for me was the share of operating profit from China in 2023 was 2.6 billion euros. Last year was 1.7 billion euros. This year is expected to be 500 million to 1 billion euros. So this year, what Volkswagen is saying is

is another down year in terms of market share. And it looks like they are strengthening themselves for a push starting from 2026.

It's a with kind of what's going on there's this report about Also, I can going into the military equipment that's kind of raising eyebrows or raising In China and

Tu:  

Well, you know why that's

happening. It's because number one, they want to diversify revenue. But number two, Trump is wanting to get out of NATO and the negotiation between Ukraine and Russia that's being driven by the United States is really leaving Europe out of the conversation, which they're extremely unhappy about.

or it makes it very unsettling. so the United States has historically been the largest check writer for NATO, I think. And, you know, don't at me because I don't know that as a fact, but I would think that the United States is one of the larger check writers. with that hole in funding and potentially troops missing because the United States also has

bases in Germany and a few other places, you know, Korea. And so I think the Europeans are looking at, man, we need to be able to protect ourselves. So

Lei:   

Yeah, it's, you know, know our chat with our friend here. I think it's gotten to a perfect storm for almost every one of these foreign automakers, be it the Europeans, be it the European premiums, be it Tesla, what they're facing in China, their geopolitical landscape, USA, Canada, Mexico, Europe, the slow down in EV adoption.

You know? And it was really... No, it was kind of gut wrenching to hear Oliver Blume say for the Porsche press conference that four out of five markets grew last year. Guess which one of the market did not grow?

Tu:  

It's a very... Go ahead.

Lei:   

It used to be the other way around. used to be China was growing and growing and other markets were slowing. yeah, it still hasn't bottomed out yet. mean, Volkswagen, the CFO admitted that their market share will continue to go down this year in China.

Porsche, their priority is right sizing the dealership, not growing sales in China.

Tu:  

So.

And here's the craziness about that because I've emphasized it for a year now. These companies are desperate to find a bottom because you're putting out fires, you're putting out fires, you're putting out fires until you can find that bottom and then really begin to assess the damage. Because when the house is burning, how can you repair it?

How do you know how much damage there is? And when they admit to you during earnings calls that, oh man, we still haven't found the bottom. we're three years in, or for Porsche, we're four years in or three years in. With Volkswagen brand, we're six or seven years in to the market shrinking on them in China, their most important market. It's not Germany, it's not Europe, it's China.

And so again, very, very unsettling. And then you look at, I'm going to ask you this, man, I'm going put you on the spot. How much is the management team to blame? Because they've shifted leadership in China. But I mean, at the end of the day, it's a global company with a dozen brands, eight brands, eight or nine brands, right?

I'll say this again because I said it two weeks ago, Blume was in charge of Porsche he still is. And so how does he come off so clean on this? So I don't get this.

Lei:   

Well, mean, you look at Nissan, they basically fired Uchida-san, right? They named the new CEO. Maybe that's planning for the next step of their integration with some other automaker. don't know. But Porsche, Volkswagen Group, I think this might be the last time that Bluma appears as the co-CEO of the group and Porsche.

Tu:  

Mm-hmm.

Lei:   

Maybe next year this time we'll have different; he'll be maybe the CEO of Volkswagen Group. I have another CEO for Porsche. But I think in China, Ralph was put in there in 2022 up until now to kind of re-strategize. And the past three years have been that for a push starting in 2026.

It's what they call the In China for China strategy, right? Everything, the R &D development, working with local partners from the ground up, and they want to see that fruition coming starting from 2026. And we're going to see some of that fruition at the Shanghai Auto Show because they...

announced quite a few of debuts. So the Audi, the four-letter Audi, they're debuting the production car. They're going to show their first EREV Volkswagen brand. And then the CMP platform vehicles are going to show one of those. But these are for 2026, right? End of this year of 2026.

Tu:  

And I'll end this part of the conversation Lei:  with, I believe that they're trying to go as fast as they can. I truly believe that they're doing everything they can to speed up processes, to get more and better product with features that the Chinese consumers can resonate with. But I still just don't think it's fast enough.

Lei:   

So, yeah.

It's taken them, like I said, it's taken them three years to plan for this. That's pretty fast by legacy standards. They said 36 months, right? 36, 30 months. But then you kind of look at the 25,000 euro, the 20,000 euro, the urban family models.

Tu:  

for them.

Yeah.

and

Lei:   

26, 27. mean, the G6 is the perfect 25,000 euro car available now, but it's only in China.

Tu:  

Well,

it won't, won't, it won't. Even if there wasn't a tariff, it wouldn't be 25,000 euro. But that being said.

Lei:   

That's another thing. That's, know, yeah.

Tu:  

I, so, so here's the thing. Let's say Volkswagen comes out with great cars in three years in Europe, you know, clean energy, EREVs, EVs. Now it's got a partner in XPeng who's competing directly with them in their home market, in their European region market. And so that's going to get uncomfortable, I think, because obviously Volkswagen is like the national brand and.

we're not there yet, obviously, because the G6 is better than any clean energy vehicle that Volkswagen brand has out. I would argue that it's probably better than anything that Audi has out as well. but the, the, the two things that are really concerning that seem very concerning and should be concerning to, to Volkswagen group management is that the brand that Porsche has spent a hundred years.

Lei:   

Mm-hmm.

Tu:  

nurturing and shaping. It has eroded quite precipitously in China. And that veneer of invincibility is now kind of wiped away by largely by a car that looks just like one of theirs. And

Lei:   

I think, yeah, think it's.

Tu:  

likely buy a car, an SUV that's coming out later this year that looks quite like a Ferrari SUV.

Lei:   

I think if Porsche... I mean, there's a possibility that Porsche could become a niche brand like a Lamborghini or a Bentley in China that don't sell that many vehicles in China if they're not careful. I think this year, mean, last year was just over 50,000 units.

This year, I don't know. This year, no.

Tu:  

Yeah, they're in no man's land right now. They're in no man's

land because the SUVs that drive the volume are not competitive in China. And, you know, they're hedging bets just like Mercedes is. We're going to build an electric version or a hybrid version and a gas version. So how long can you do that? If you have a dollar and one business to invest in, okay, then easy decision.

I invest that dollar into this one business. But you're trying to nurture two businesses now. So now it's 50 cents and 50 cents or does 50 cents and 50 cents make sense? you know, but let's point back to what we said earlier. You said that they still haven't found a bottom and that should be very unsettling. Now.

Lei:   

Yeah.

Tu:  

No, they believe that the US market in the short term can make up for some of those shortcomings in the China market. But now it's not so clear cut because Trump is talking about import taxes on Porsches. And we know that Porsche only makes vehicles in Germany. Okay. And they're talking about

Lei:   

And yeah.

Tu:  

because there's excess capacity and the the Chattanooga, I think it's Chattanooga factory. They're talking about building Volkswagens, Audis and Porsches on the same factory line. They also have the Scout Motors factory in South Carolina that's being built as we speak. So, you know, these are solutions, but when you're only building in one country and then you have to build in another country, it's not like your suppliers are already there.

So you have to coax them in, and just remember, Porsche is a high margin brand or a high margin business, but the suppliers probably aren't. And so to get them to come with you to the United States, that's a heavy investment for the suppliers too. And so this is where it's always important to remember in the automotive space, it's about utilizing capital.

Lei:   

Yeah.

Tu:  

It's about making sure that your factories are running all the time at a pretty high rate because that allows for flexibility. And then if there's a hiccup, because it's your factory, you're still paying these overhead costs for a factory that's running half speed. So any car that's not built is revenue being taken away. And so maybe in

In five or seven years lay the contract manufacturing from a Foxconn, Magna Steyr might make more sense for some of these smaller companies.

Lei:   

Yeah, and for European, you know, the Volkswagen's, that's why, you know, they're in a bind and the perfect storm because the premium brands, they export them from Europe to China, to the U.S., right? All these Porsches. At the same time, Volkswagen is probably one of those most exposed in Mexico because they have the highest share of vehicles, I think, made in Mexico, exported into the U.S.

OK, actually more than the US do, more than the US automakers do.

Tu:  

What I would do if I

was Volkswagen in Mexico Lei:  I would shift production and then undercut Chinese cars in Mexico. That's what I would do. To play defense. So.

Lei:   

Yeah, well, easier said than done. And

then this week, the bromance between Elon and Trump reached a climax at the White House when they showed up with the cars. And Elon said, we're going to double production in the US in the next two years. I'll put, well, production.

Tu:  

No, he said double output. He said double output.

Lei:   

Yeah, Well, I

Tu:  

I don't know what that, I have no idea what that means. I don't know what that means.

Lei:   

take it to mean production. I don't know. So they have about over a million in capacity in Austin and Fremont, right, I think.

Tu:  

Yeah, so let's do some.

Yeah, so let's do some back of the envelope. They probably have a little over 2 million units of capacity around the world. Let's say for the sake of simplicity, 2.3, 2.4. Okay, probably a little bit high, but I think Shanghai Giga is a little over a million units in and of itself. So just those two. And then if we say Berlin has 200,000 units of capacity, now we're getting to the 2.4, okay?

We were at 1.8 million units of sales last year, shrunk by 1%. I was corrected by Steve Levine. said during our chat in Austin, was like, flat, sales were flat. Steve was like, no, they were down by 1%. And was like, okay. And Steve also said, and this is really, I don't pay a ton of attention because there's so much Tesla news out there, but Steve said that,

He thinks sales are gonna shrink in 2025. He was the first person I heard say that, and then I looked and now like more analysts are saying sales are looking to shrink in 2025.

Lei:   

Well, we said quite

a while ago that if it's a flat in 2025, it will be a win. So, mean, we're kind of eluding.

Tu:  

Yeah.

Yes,

we said that, but I didn't go as far as to say, I don't see sales. You know, I don't see sales more than 2020.

Lei:   

Well, we kind of meant that

more than likely it might go down.

Tu:  

Well, I think we're trying to be optimistic for them, for them. So,

which is concerning because this whole, we're an AI company, an AI company that AI service doesn't work. And the AI company where the full version is not available in the largest passenger vehicle market in the world. And so,

to have 2.4 million units of capacity when you're selling 1.7, 1.8 million units of vehicles, that's a huge, huge cost disadvantage for Tesla. And so these are all things to think about because I think people forget sometimes that these factors are massive, these investments that people make are massive. So...

Low utilization for a quarter or two quarters, it carries a huge burden, but it's not the end of the world. But when you're a year and you're only using the factory at 60, 70%, then it gets really, really, then the street pays attention. And so where it's a...

Where it's interesting for a Tesla is that they build effectively the same cars in all these different factories. Whereas a GM or a Ford, they might build different cars in different factories in different regions. And so like a Model Y car structure coming out of Shanghai is a lot different than a Model Y car structure coming out of Austin or Fremont. That's what I'm alluding to. And so...

That's really, let me see here. Anything else that you want to talk about,

Lei:   

No, I think we covered pretty much everything. Li Auto just had their earnings call this morning. I listened to a little bit of it. So they're launching the i8 in July and i6 later in the year. So two BEVs this year. And they're actually expanding to more global markets. Europe, Latin America.

So, you know, a time, And I think they want to have, they want to have 4,000 supercharging stations up by the end of this year. And currently it's 1,900. So they want to double that by the end of this year. Think about the speed of these charging station build-outs. Incredible.

Tu:  

It's about time, I guess, huh?

So for...

So for those that are wondering, that are new to the show, Li Auto historically has EREVs, or Extended Range Electric Vehicles, where there is a gas motor. It doesn't power the wheels, but it recharges the battery. And they have L6, L7, L8, L9, all very similar looking, but smaller, larger versions of the same vehicle. And then last year, they launched the Mega, which is effectively

A supersized MPV that was their first battery electric vehicle and there was a ton a ton of technology that was packed into it not a great seller because it was and it is an $80,000 MPV but looks like some of that technology is going to bleed into the L the i8 and the i6 and so Hopefully we'll get a chance. Maybe not they'll likely have it at the

Shanghai Auto Show, but we probably won't be able to drive it. And then, what are your thoughts on GAC with the Xiang Wang? Not to be mistaken with Yang Wang from BYD.

Lei:   

Shanghai auto show,

There's more of these as young love.

It's getting right. number of still brands or sub set of brands that are being launched is still happening. We still have quite a few or a couple of Huawei new brands coming. The Huawei ecosystem brands outside of their force.

Tu:  

So the hybrid

S7 is huge, it's five meters. So it's almost the size of a Tahoe, five meters long. So this is not some small, it's the flagship. I think it's the flagship.

Lei:   

Ugh.

Yeah, yeah, that's what, land rover.

Yeah, so that's another thing to watch this year is these bigger SUVs, the Denza N9, I think is launching pretty soon, the Hangzhou Bay Cullinan from Zeekr

Tu:  

So let's

rewind really quickly back to the GAC so I let people know. This has Dolby Atmos in the vehicle. It's a hybrid, so it has 630 miles of range. And it's going to have DeepSeek AI integrated later in the year.

Lei:   

Who doesn't?

Tu:  

It starts at $29,000. my goodness. It's a Tahoe. It's as large as a Tahoe at $29,000. A Tahoe in the United States starts at $65,000.

So it has Dolby Atmos. Dolby Atmos.

Lei:   

We're drooling, right? We're spoiled.

It's like the first thing we always think is, is why aren't these available in the U.S.? Why can't we get?

Tu:  

Well, the other

thing that's really important about this Xiang Wang S7 is that it's gonna use L3 later this year. It's gonna be L3 capable, L3 intelligent driving capable. it is amazing. Now, again, these companies aren't making money, but the...

Velocity at which the refreshes come out, the new products come out, the new brands come out, continuing to come out, the new brands continue to come out. So you're gonna say something.

Lei:   

Speaking of making money,

maybe the last thing we should talk a little bit about is NIO. A lot of action last week, it took an action from Li Bin to push that article from that former employee who wrote something about what NIO needed to do. And Li Bin actually pushed that article to, I think, to his team.

Tu:  

They laid some people off this week.

Lei:   

And it took that for the stock price to go up to about $5 again. And it felt like the recent times that NIO had one foot stepping into the ICU room again.

because of so much flags they've planted that have not materialized. That's driving, think, also us, some of the investors, retail investors, fans, driving them crazy because you put NIO next to what has happened with XPeng. XPeng, since the second half of last year, they're, I mean, they

turn themselves completely around. Everything they do now is filled with confidence. The G6, the G9, the Mona, the P7 Plus, their sales numbers, right? They're number one last week, topping the auto in the startup rankings. And you have NIO.

Tu:  

LiAuto

is beginning, it looks like they're beginning to struggle a little bit.

Lei:   

Well, I mean, they've reached that kind of the rhythm product, rhythm bottleneck point. And NIO I think last week they fell out of the top 10 among the Smart EV startups in the weekly numbers. I don't really pay too much attention to those because it's weekly. But I mean, those are the ones that will make you criticize and talk about

and what they needed to do. it looks like Li Bin is pretty much helping on cutting costs. Phone business. We talked about the phone business when they were started that, you know, what happened? The non-performing, get rid of it. know, right? What the hell are they doing?

Tu:  

Zero.

The,

let us reassure our audience that.

despite all these challenges that you hear about them, the vehicles are great.

You know, the driving dynamics are pretty good. They're not great, but like the fit and finish, the design and kind of the feel of the vehicles is good. It's not that because the vehicles are crap, this is why they're struggling with sales. That's not the reason. It's all these other things that Lei: , you just alluded to that complicates their

their business and I think doesn't allow them to focus on some of the core things. I swapping also really kind of complicates their business as well, much more so than some of the other players. And they don't have that scale yet that's needed to really create the flexibility to allow them to launch a phone, to allow them to do these other things. And Li Bin I think maybe it's the whole

everything all at once strategy that's not working so well.

Lei:   

Yeah, so I think in hindsight, some of the strategic.

missteps. think there was definitely some strategic missteps that have happened that have led to where they are today, the kind of the situation they're in. And obviously, they're still launching this refreshed, kind of like the G6 and G9, the refreshed 5 & 6 models this year, plus the ET9 that are starting to, about to be delivered.

And then Onvo is not really, I mean it's lackluster, right? Given what they promised. And I said I don't think they'll reach 20,000 in March. It doesn't look that obvious.

Tu:  

No, I don't think so either. That window

has closed. We don't hear a lot about the ET9. so, still lots of challenges for NIO

Lei:   

So that's why they're

integrating the delivery part of the Onvo and the NIO brands. I think they were separate before, now they're putting it together. They set up this of the sell business unit where every penny counts. remember, I think Li Bin said they want to break even next year and possibly reach break even in Q4.

Which by the way, LeapMotor did in Q4 2024. I think they're after the auto, the second smart EV startup in China to reach breakeven. But NIO, Xpeng, mean, yeah, we're still waiting for them to reach that point.

Tu:  

Man, Lei:  It's always one of those things where I go into the show thinking, man, this will be probably a quick show. And now we're at 56 minutes. So that's really all I have. No one has any questions that I see or any comments. So maybe we close it out here.

Lei:   

Thank

Tu:  

So everyone, thank you for joining us as always. Good morning, good afternoon, and good evening. We will talk with you all next week. And next week, we may be doing this at a different time.

Lei:   

All right, maybe we can, yep.

a different time

as I'm traveling for volleyball again.