Episode #214 - Xiaomi YU7 Is a BIG Headache for MANY, the Basics of Ramping Production

In this episode, Tu and Lei discuss the latest developments in the electric vehicle (EV) market, focusing on the launch of Xiaomi's YU7 and its implications for competitors like Tesla. 

They share insights from their experiences with Waymo in Phoenix, analyze production capacities, and explore the dynamics of the EV market, including the rise of robotaxis and the challenges faced by traditional automakers. 

The conversation highlights the importance of marketing strategies and consumer engagement in the rapidly evolving automotive landscape.

Keywords

Xiaomi YU7, Tesla, EV market, Waymo, robotaxi, automotive industry, China, electric vehicles, market analysis, mobility

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• 12:36 (Cont.) Episode #214

Transcript

Tu Le 
Welcome to the China EVs and More podcast
 
 In the next hour or so, my co-host, 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. I met a ton of people this week, so maybe there's a couple of you there. ‚Åì
 
 Lei Xing 
 Thank
 
 Tu Le 
 For our loyal listeners and viewers, welcome back. We ask that you smash those subscribe and like buttons and make some comments or questions so you don't miss anything from us in the future. and I are two of the most knowledgeable people doing this. So help us get the word out to others about this podcast. My name is Tu Le I'm the managing director at Sino Auto Insights, a global management consultancy that helps organizations bring innovative.
 
 tech focused products and services to the transportation and mobility sectors. I write a free weekly newsletter that we pull many of our topics from. You can sign up for it at Sinoautoinsights.substack.com, which of course I encourage you all to do. A Phoenix bound Lei can you please introduce yourself? Or in Phoenix Lei and in Phoenix Lei.
 
 Lei Xing 
 First one.
 
 Yeah, first time in Phoenix, first time in the Valley of the Sun. I can finally say why it's called the Valley of the Sun. So this is your co-host, Lei Xing former chief editor of China Auto Review. Excuse me. And this is episode 214. Yes, and also to a traveling back home Tu and still traveling on the road for.
 
 Tu Le 
 How's
 
 Lei Xing 
 Oh God, I've been on the road since the 16th from Orlando to Phoenix. And yeah, first time in Phoenix, done a lot of Waymos. My family have tried Waymo a few times, first time and additional time. So that's interesting. Very easy. Yeah, Waymo app. Waymo app. And I'll tell you, the Tesla fans were happy to hear this. Waymo is definitely not perfect because
 
 Tu Le 
 really? Okay, nice.
 
 Is it pretty easy to get? you're using the Waymo app though. You're using the Weemo. Okay.
 
 Lei Xing 
 my wife and daughter actually say a human driver in some of the Ubers and Lyfts that we've taken over the last few days is actually better ‚Åì drivers, better driving. Because the way most they tap on the brakes at the intersection, which make people sitting in the back kind of... ‚Åì
 
 Tu Le 
 Yeah, that's fair.
 
 Lei Xing 
 nauseous a little bit, not to a great extent, you know, we've done the Waymo's in LA and we also had that experience. But nevertheless, I mean, I've done five rides already. It's like, go out, get somewhere, Waymo.
 
 Tu Le 
 Yeah, for sure.
 
 Man, sounds like a pretty
 
 expensive Phoenix trip.
 
 Lei Xing 
 Well, we get 35
 
 % off for four rides, so... Talk about sticky, there's a way.
 
 Tu Le 
 Oh, okay. Got it. So, well,
 
 you should just get your wife to download the app and then she can get 35 % off her rides. So.
 
 Lei Xing 
 Yeah, exactly.
 
 so in Phoenix, Waymo is something that you do here. The sun, obviously, hot, hot, hot. ‚Åì It's 110 degree weather, just pure dry heat. ‚Åì And I've experienced that. No, we actually walked 10 minutes yesterday afternoon in that type of weather. it was kind of like.
 
 Tu Le 
 So you're not super sweaty.
 
 Lei Xing 
 being barbecued slowly, but wasn't too bad. ‚Åì No, think it's definitely, the heat is definitely more, ‚Åì more heat, there's more heat in the Vegas. But speaking of hot, hot, hot, hot, you know where I'm going with this.
 
 Tu Le 
 like Vegas.
 
 Okay.
 
 Yes, I do. Actually, there's already a comment about it. We will hold off until the end of the show. But SPX, I think, posted something just now. ‚Åì
 
 Lei Xing 
 because the internet
 
 has been broken by the Xiaomi YU7 launch the last 24, 48 hours.
 
 Tu Le 
 And this absolutely says that the SU 7 tragedy is in the the rearview mirror, distantly in the rearview mirror.
 
 Lei Xing 
 Yeah, what tries to be? ‚Åì
 
 Tu Le 
 But
 
 I just kept on watching the Lei Jun feed on X and he was posting these tear sheet specifications. There's a lot of features packed into it. So.
 
 Lei Xing 
 huh, I guess.
 
 And I think at this point, the features are, it doesn't matter anymore. know, the range, the 10 million clips, the 3,944 kilometers they've done in the 24 hour test, the specs, the hardware. ‚Åì We're looking at something that I think I still am wrapping my head around.
 
 Tu Le 
 doesn't.
 
 Lei Xing 
 because when those numbers, when those poster came out, I was, I'll be honest, I had to roll my eyes and look at it and say, was there an extra zero? Okay, there was. It wasn't 28,900. It was 289,000.
 
 Tu Le 
 And to give people a better sense of what that
 
 means, their factory in Beijing currently has about 150,000 units of capacity. Well, that's what I was going to say. So they have another factory that already has 150. So they have a total of 300,000 units of capacity, trouble, dual, give or take. that means, remember that the SU7 is also on sale. And if
 
 Lei Xing 
 Times two. Yeah.
 
 Tu Le 
 The SU7 is already delivering 100 and 100 and something thousand units. That means in the next 12 months, there's only going to be a hundred and at the at the most less than 200,000 of those YU7s launched and that's if they work a ton of overtime.
 
 Lei Xing 
 Capacity, two plants, 300,000 units. Assuming, I'm not sure what shift that is, whether that's a single or a double shift. think it might be. Double shift, okay, so let's say double shift. And they have set a goal of 350,000 deliveries. They've completed 135,000.
 
 Tu Le 
 It's gotta be a double shift.
 
 Actually, let me let me take that back.
 
 It could be a single shift, but it might be. Six days, let me let me I'll. I'll figure that out for the next show.
 
 Lei Xing 
 Yeah, well, yeah, I mean, if we're gonna,
 
 yeah, right, 300,000 capacity, 350,000 delivery target, they've completed 135,000 in first five months. June will be roughly around 30,000 units. So that's 160,000.
 
 Tu Le 
 Well, and remember
 
 the YU7, it looks like it's already started production. So job one is already done, but it'll take probably some ramp, right? It'll take probably quarters worth of ramp to get to full production.
 
 Lei Xing 
 Have you? Yeah.
 
 Have you seen
 
 the pictures of the three rows of YU7s lined up outside the factory in Beijing? ‚Åì They look pretty radical. So I think we're expecting deliveries in the coming days.
 
 Tu Le 
 Mm-hmm.
 
 Ready to go, they look ready for delivery.
 
 Which is weird
 
 because the customers, they must be really fully featured. They must be just optioned out because I don't know why you would make 20, 30, 40,000 units like that. Because unless you have a really, really good idea of what colors, what options people and what trim people will want.
 
 Lei Xing 
 Well, over the last year or so, they've been previewing these specs and colors and interiors ‚Åì in a methodical way. So the consumers will probably know what it is, how it looks like, styling and hardware.
 
 Tu Le 
 So here's
 
 a little story that if you build ahead too early too soon. Remember when Apple had those iPod minis that had four colors, gold, silver, like a burgundy and some blue color. So they built ahead, put them in the retail and then forecasted that one specific color or they
 
 Lei Xing 
 Is it? Is it?
 
 Tu Le 
 So they didn't know what the take rate was going to be per color. So they, they guessed they were completely wrong. And, ‚Åì so a couple of colors didn't sell well at all. One color sold a ton and that was the iPod mini. So there's, there's a chance that that happens. I'm sure they'll be able to sell those vehicles, but it's just seems like a mof on thing. So.
 
 Lei Xing 
 Yeah, I think any every one kind of color that's been ordered that it's going to sell because they on the launch they added some more colors exterior colors right to the ones that they've already previewed before
 
 Tu Le 
 And maybe people will be like,
 
 you know what? I want this. then Xiaomi says, I have that color, but it's with these option packets. Do you want it or not? They'll probably say yes.
 
 Lei Xing 
 And one of the right we talked about pricing a little bit right 253,500 we're starting price point and nobody guessed Correctly, I think myself included I was thinking 249,000 right just below 250,000 but they came out with with the interesting start starting price point and then the
 
 Tu Le 
 Well, remember
 
 that ‚Åì the RMB is weak on the US dollar.
 
 Lei Xing 
 Yeah. So, but another interesting thing is that Max has been sold out. Shouqi, which means sold out. Max is the 330,000 renminbi version. And yeah, and if you think about that, the starting price, which is roughly 35,000 to the 46,000, 47,000. 46,000, 47,000.
 
 Tu Le 
 which is like 47 grand or something.
 
 Lei Xing 
 thousand dollar is the average price of a vehicle in the US and in China you can get a specced out Xiaomi YU7 for an average price.
 
 Tu Le 
 Mm-hmm.
 
 But let me ask you...
 
 What is, is this a no obligation reservation again, like, you know, a hundred RB 500 RB, you can get your money back kind of thing or no.
 
 Lei Xing 
 So the 5,000 RMB is the firm 7-day refundable deposit. If you don't do anything with it, it'll be a locked-in order. And then for the locked-in order, it'll be 20,000. That's my understanding. Non-refundable. So if you decide to not to take delivery or just not do anything with it, you just lose the 20,000 RMB.
 
 Tu Le 
 Okay.
 
 Okay. So.
 
 Got it. the the I'm thinking about it is about 800 bucks. The I definitely want it is almost $3,000.
 
 Lei Xing 
 Yeah. So that was interesting. And then the other very interesting thing is they gave three days, right, until June 29. If you have a locked in order of the SU7, you can transfer that to the YU7.
 
 Tu Le 
 Mmm.
 
 Lei Xing 
 Which I think a lot of people did. Because the YU7, you just pay a little bit more. 10,000, 20,000 or maybe more, you get a SUV. Maybe a little bit.
 
 Tu Le 
 Unfortunately for
 
 the SU7 it just seems like a better car because they learned from a lot from the SU7.
 
 Lei Xing 
 Yeah.
 
 Yeah. So after all the, you know, the dust, you know, we have the 240,000 locked in orders in 18 hours, right? This is in the past. It's a number that's still, it's hard to explain. I've never seen anything like this before. Maybe. I mean, what can be compared to? I don't know.
 
 Tu Le 
 Well, it can be the original iPhone. It could be the original iPhone craze. Yeah, Cybertruck, but.
 
 Lei Xing 
 Cybertruck! Cybertruck! Cattle
 
 3? ‚Åì Maybe? ‚Åì I actually think the most ‚Åì painful...
 
 company, the company that is being affected most is Xiaomi itself, not Tesla, not others, because now the competitors will come in and say, you're going to wait for 12 to 18 months for YU7. Hey, I have something available in a few weeks. You want to know? I think that's kind of dynamic we're seeing, but also at the same time, how many of
 
 Tu Le 
 Well, I don't, yeah, I-
 
 Lei Xing 
 How many of those 240,000 locked in orders, the people are willing to wait it out given this current environment? These are some questions.
 
 Tu Le 
 Yeah, I think
 
 those are tremendous numbers. I don't think they'll all end up being buyers.
 
 Lei Xing 
 Yeah. So that's why, you know, I kind of treated the million dollar questions. How many, right? Those are willing to wait. And what are we going to see as a delivery of the YU7 this year? What's your hunch? Throw me a number. What do you think? How many YU7 are going to be delivered? 8,000?
 
 Tu Le 
 80,000.
 
 Because so
 
 so so let's do this. Let's do this so they have both factories online now, correct? And in the US the estimates used to be. 200 days you would work 200 days. OK, so we're in the middle of summer, so let's say a little over 100 days that they're going to be working. OK, and divide that by 150. That means no divide that by.
 
 Yeah, 150. Now we're talking about 15,000 units a day.
 
 Right? So 7,500 per factory. So that's, that's the run rate they will need to get to that 150,000 units by the end of this year. Meaning that the factories are running a hundred percent for the rest of the year in order to get to 150,000 units total of which let's say 80,000 are YU7s and 70,000 are SU7s. Now the ratio of sales is probably two to one.
 
 Lei Xing 
 Yes.
 
 Tu Le 
 But the YU7, because it's a new car, I don't think the suppliers would be able to ramp like that either. So the constraint is not the production. The constraint is likely going to be if the suppliers can ‚Åì supply to demand. And I don't know if they can do that. Because the constraint is likely not going to be how many can.
 
 Xiaomi produce, the constraint is likely going to be how much can be supplied to produce.
 
 Lei Xing 
 Yeah, exactly. Speaking of suppliers, the battery, the BYD and CATL both supply the LFPs and CATL exclusively supplies the 101 kilowatt hour for the max. Exclusive. Sorry? Yeah, yeah, right. And then Hesai, right? They posted the 100 % of the 289,000 orders.
 
 Tu Le 
 They posted about it. On social. They posted on social about it.
 
 And they should. think these are, because you know how hard and how low they must have bid to get that for, for, for Xiaomi. Because again, let me go back to Nvidia and Apple back when I was working there. They, Jensen wanted nothing more than to be able to say we are in the next gen power book at the time.
 
 Lei Xing 
 How about tomatoes?
 
 Hmm.
 
 Tu Le 
 The MacBook Pro was called a PowerBook, if you remember that. So it's the same thing. It's the same thing. So it's important. It's a win. It creates prestige for these companies.
 
 Lei Xing 
 So I think in terms of overall sales, we go back to the 350,000 total target. I will...
 
 take a number higher than you. I would say 100,000 units, which is not achievable. If, example, 350,000, 100,000 of those will be YU7s. And they have to do it in six months, basically, right, the rest of the year, which is 16, more than 16,000 a month.
 
 Tu Le 
 Okay.
 
 But hold on, you just said 350, you said 350, so are we saying 350 or 300?
 
 Okay.
 
 Lei Xing 
 That's again unheard of. I can't think of any product that ramps and then delivers. But since we always.
 
 Tu Le 
 Well, and remember,
 
 Lay, it likely, won't be linear. It'll be 5,000, 6,000 first month, 8,000, 9,000. And then in November, there needs to be 20,000 units, 22,000 units, 23,000 units.
 
 Lei Xing 
 Right. And then it up. It could be 20,000. Yeah.
 
 Yeah, so I mean, that's...
 
 Tu Le 
 And
 
 that's what I mean by the supplier. Maybe they can supply 15, but they might not be able to supply 22 for November, December production, you know, so.
 
 Lei Xing 
 All right. ‚Åì
 
 Yeah, so because the reason I'm saying that because we always underestimate and Xiaomi, I mean, they've proven that they've always over delivered, at least from a volume standpoint. I don't think anybody guessed or expected that this order intake will be in the 200,000, nearly 300,000 range. That's why.
 
 Tu Le 
 You
 
 was perfect timing. It's the middle of summer and nobody's paying attention. They flew foreign journalists over, at least two that I know of, that Lambert guy and Kevin.
 
 Lei Xing 
 Yeah, Fred
 
 ‚Åì and Kevin.
 
 Tu Le 
 So
 
 ‚Åì I'm sure they invited others.
 
 Lei Xing 
 Great. I
 
 mean, Xiaomi, team, their branding, marketing team are super, Lei Jun was tweeting, although obviously it wasn't him tweeting because he was speaking at the... Yeah. Yeah.
 
 Tu Le 
 He was prolific on his tweets or his
 
 social media. We can't call them tweets anymore, I guess, but...
 
 Lei Xing 
 Yeah, both in China and internationally. mean, that's a gold standard. ‚Åì
 
 Tu Le 
 So ‚Åì
 
 I told you, but I'll tell the audience, I was in Atlanta yesterday for a small, very, very intimate conference. I was actually at the ‚Åì Porsche North America headquarters ‚Åì and got to meet Abhi. We did not actually spend that much time together. He was in the same building that I was. And so...
 
 Lei Xing 
 nice.
 
 Why don't we? Alright.
 
 Tu Le 
 I missed Yilun too, so unfortunately I forgot he lived down in Atlanta. next time. But what was funny was I was doing a small presentation, like almost like a Ted talk. And so I had some slides that I wanted to show and knowing that I was getting fed all this Xiaomi information from some of the guys, some of the people at the event, I downloaded all of the tear sheet specs.
 
 And the last three slides of my presentation was hot off the presses and the pictures of those tear sheets. And then my last slide Lei and you'll, get a kick out of this was a picture of a Chevy Equinox and the title was for the same price. So an Equinox starts at around 40,000. So, um, but man.
 
 Lei Xing 
 You're dunking on your hometown team.
 
 Tu Le 
 It yeah, yeah, it is a frenzy and timing was perfect for him. And people were paying attention even though it's the middle of summer.
 
 Lei Xing 
 think a lot of people point to Xiaomi's marketing gimmicks, Lei Jun's showmanship. That's fine. I'd agree, but I think what they have shown in the last four and a half years is this total drive and just trying to come out with ‚Åì almost a perfect product.
 
 and you add on the Xiaomi badge onto the vehicle and it sells like hotcakes. And that's basically what we're seeing. And based on the reviews that we've seen from both, you know, all of the Chinese media that tested, know, including Mark, right, ‚Åì that already tested the vehicles that it's a different animal. It's been the SU7, but they also expect that the SU7 will continue.
 
 to be a product that will be ‚Åì in hot demand. ‚Åì
 
 Tu Le 
 and continue
 
 to take sales from the Model 3.
 
 Lei Xing 
 Yeah, think Model 3, again, I've said this before, Model 3 is relatively irrelevant in the Chinese market, I think. Model Y is still important, but we know that even if they maintain the sales, the pie is getting bigger and their share is getting smaller. And we're already seeing the stats, right? We're already seeing the data. Not in China, but obviously other parts of the world.
 
 Tu Le 
 Well, one thing that seems to me pretty certain now, there are a couple of people that tweeted it or posted on social that I trust. It seems like Q1 sales for the Model Y or Tesla at least will be better than Q2 sales, which doesn't happen. And so that is not good.
 
 Lei Xing 
 Hmm. Hmm. Yeah.
 
 Tu Le 
 And although they want to point to this shiny little object that is happening in Austin, what is their business foundation? It's selling cars.
 
 Lei Xing 
 We'll go back to that, but ‚Åì a reference, Model Y sells in China, domestic sales about, let's say 25,000 a month. It's only a matter of time, only a matter of time, not if, but when the YU7 tops that. Only a matter of time.
 
 Tu Le 
 And to give people a better idea, there's about 630,000 units sold total for Tesla in China in 2024. I want to say it's like almost a two to one ratio of model wise to model three. So let's say 350 model wise were shipped in China in 2024. that average monthly average is more than
 
 2025 but again We're a year From 2024 number one. So the model Y has lost a tremendous amount of momentum 2024 the price reduction is the non price reduction price reductions Really still boosted sales of the model Y 2025 there's the i8 from Li Auto There is the L90
 
 from Onvo there's the G7 from XPeng. There's one more, isn't there? ‚Åì
 
 Lei Xing 
 So yeah, the
 
 i8, including i6, Onvo L90, the G7, tons more. But these are the ones that are big, big launches. And speaking of, Li Auto is actually taking a proactive approach. They're actually.
 
 ‚Åì They just made an announcement that the Q2 guidance, shrank it, in order to prepare, in order to it, align the organizational structure for the launch of the i8, ‚Åì which was quite interesting.
 
 Tu Le 
 Yeah, yeah, I saw that.
 
 Reduced it.
 
 And remember, a
 
 little background, the i8, so right now they ship one vehicle, the Mega, that is a BEV. The i8 is going to be a BEV. So I think that's part of the reason they're trying to line up all these different disparate things in order to kind of...
 
 start on the right foot.
 
 Lei Xing 
 Yeah, and then was interesting. I also treated that this kind of camaraderie among these CEOs supporting each other's product launches on social media. And even XPeng may have had to make way for the G7 launch because of the YU7 launch. These kind of the dynamics that are behind the scenes. And now we can, you
 
 Tu Le 
 Right.
 
 Lei Xing 
 YU7s in the rear-view mirror, the next is G7, the next is Onvo L90, the next is i8. Week after week, we have these blockbuster launches. And Tesla is feeling pain. They're all SUVs. They're small.
 
 Tu Le 
 So we're
 
 in summer. This means that job one of all these vehicles will ship before the end of summer. I believe, I think the i8 is sometime in middle of July.
 
 Lei Xing 
 Q3.
 
 Yes, launches, I think they're not a part of, really part of Q3 for the launch, for the delivery.
 
 Tu Le 
 It doesn't start delivery until. Okay. Okay. So
 
 the i8 is not going to be super relevant right now. ‚Åì the G7 is also next month, July, right next week. Yep. So, and, one thing that I do want to mention Lei is that in a room full of Americans yesterday, it was eyeopening for a lot of them.
 
 Lei Xing 
 Next week. Next week. Yeah. So.
 
 Tu Le 
 how I talked about what's going on, showed them pictures and kind of after my presentation, lots of folks were like, hey man, great presentation, ‚Åì very objective viewpoint. You know, we totally understand that you are a Michigander and American, but how you talked about what's going on in China really is eye-opening. got a lot of that. Reason I bring that up, Lei, is because I hope in my heart that
 
 the GMs, the Fords, the Stellantis, the Volkswagens are really looking at this launch and taking copious notes about how to engage customers, how to bring excitement to products, how to design something that in totality, it looks like something else. I mean, at least from a starting point,
 
 I take that back visually it looks like something else but in totality is a completely different product. I just hope that they're saying that this is a globally relevant thing that we can learn from as opposed to it's the China market. Chinese consumers aren't the same as Europeans and Americans because you and I hear shit like that all stuff like that all the time and it bothers me to no end. But but
 
 I just feel that it's a missed opportunity if people aren't paying attention in the West to how engaged Xiaomi consumers are for this product. And then the last thing I'll say about this, Lei, is that those little design cues, because one of the things that Kevin tweeted about, posted about was the Kleenex magnet.
 
 Lei Xing 
 Yeah, and the question.
 
 Tu Le 
 right behind the infotainment.
 
 Lei Xing 
 Yeah,
 
 exactly. I mean, these are small details that that do sell.
 
 Tu Le 
 and
 
 they all add up to your paying attention.
 
 Lei Xing 
 And then one of the part of the press conference was how Lei Jun ‚Åì iterated how they're friendly to the Apple iPhone owners. You don't have to have a Xiaomi phone for this work, for the ecosystem, right? And then these tag on the add-ons, the hardware add-ons, right? The phone holders, the speedometers, little things.
 
 Tu Le 
 What would
 
 be interesting to see, because you raise a great point. How many iPhone users are buying Xiaomi EVs, number one? Number two, how many convert to using a Xiaomi phone after they purchase their, because there's going to be more seamlessness between the Xiaomi EV and the Xiaomi phone than an Apple phone.
 
 Lei Xing 
 Sure.
 
 Damn.
 
 Tu Le 
 But ‚Åì that
 
 would be interesting statistics.
 
 Lei Xing 
 I'm sure that Xiaomi, internally, they have those kind of data. these female owners are actually a major part of Xiaomi customers. The conversion from the BBA owners who are buying additional vehicles, they're going over to our Xiaomi.
 
 Tu Le 
 Talk about people needing a hug. The BBA and the Porsche people in China must be like, my goodness, how are we gonna compete with this?
 
 Lei Xing 
 And also they're
 
 going back to earlier comment that they're probably holding their head just from that slide on the N√ºrburgring lap records. How a four and a half, yeah, the SU7 Ultra prototype, how a four and a half year old EV company or brand can improve that track record by over 22 seconds.
 
 Tu Le 
 yeah, the SU7.
 
 Lei Xing 
 And when you're a Porsche or when you're a Mercedes or you're a Lotus, these 70, 80 year old companies spending. Yeah. Yeah.
 
 Tu Le 
 that pride yourself on engineering and
 
 speed and ‚Åì being able to drive into corners with your product, things like that.
 
 Lei Xing 
 So, right, so a lot of questions to take away home for these legacy ‚Åì competitors. ‚Åì they've learned, I think, Toyota, think they're going the right way in China with their recent launches. They even posted, no, it wasn't Toyota. was somebody, yeah, was Toyota. They had a poster of the BZ7 because it had a seven on it. Some kind of like a congratulatory.
 
 Tu Le 
 Mmm.
 
 Lei Xing 
 message the use ever since. Right? It's good marketing. ‚Åì And guess what? They all have Chinese tech, major Chinese tech on their upcoming EVs. Same as Volkswagen, as Mercedes, but we won't see them until 2026.
 
 Tu Le 
 Yeah, Yeah, dude.
 
 Well, so
 
 that's great. It's late, better late than never. And let's hope that with this extra time that they're using to get these products on the road, there aren't serious software issues with them because it would be a shame. You know, like Cariad with the ID series vehicles, they rush these vehicles on the road and
 
 all kinds of software problems. And GM with the Blazer here in the United States. ‚Åì the other thing that I think is... So did you want to move to something else or do you want to say anything else about the YU7?
 
 Lei Xing 
 No, think we can talk about the YU7 for hours. ‚Åì
 
 Tu Le 
 All day long, yeah. I mean,
 
 we're just gonna need to get behind the wheel in July, I guess, huh?
 
 Lei Xing 
 Well, that's one of the
 
 first things I try to do when I go back next week. So to get hands on a YU7 and feel it, because the reviews say it's different than the SU7, but on an SUV, it's still sporty, which is what it wants to do, but more family spacious features to it.
 
 Tu Le 
 So
 
 one of the one of the tear sheets talked about 36 like compartments.
 
 Lei Xing 
 Look
 
 Yeah, the leg room, the head room, right? The comparisons with the Model Y and the Cayenne.
 
 Tu Le 
 Zero gravity
 
 seats for front and back. very, very thoughtful, very thoughtful design, I think. And I think that's gonna win over a lot of Chinese consumers. Now, ‚Åì Trump hot off the presses. So let me tell you another quick story about yesterday's conference. ‚Åì I was talking about how premium is being redefined in China. And I mentioned,
 
 Lei Xing 
 Yeah.
 
 Tu Le 
 in 2022, a certain brand minus 2 % year over year growth. The next year minus 15 % year over year growth. And then the next year minus 28%. And then Q1 of 2025 minus 42 % year over year. And so the gentleman after me, he was like, hey, wanted to...
 
 I'd heard security talking outside and I think they're going to be escorting Tu Le out of the building. Because you know what brand I was talking about in China.
 
 Lei Xing 
 Well, there's two brands in Atlanta that's quite relevant to the auto industry and they're both from Stuttgart.
 
 Tu Le 
 Yeah, so So
 
 yeah, and anyways, I and and you guys know I was at the Porsche show so so that's why ‚Åì he had joked around about that and they all kind of laughed but so hot off the press Lei Trump Cancels negotiations with Canada. So This if this stays the way it is with the impasse between Canada the United States
 
 Lei Xing 
 Ugh.
 
 Tu Le 
 and a lack of a trade agreement, you can book Canadian dealers selling Chinese cars within the next six to nine to 12 months.
 
 Lei Xing 
 I don't
 
 But by this point, we know Trump's acts. So he could be coming right back and, we have a deal with Canada.
 
 Tu Le 
 Yeah, so, but...
 
 Lei Xing 
 So,
 
 mean the way he's, you know, going on over the places.
 
 Tu Le 
 I'm so close to
 
 Canada and they, so there's a lot of Canadians where I live and they are really, really mad at the US. Really, really mad. I've never seen them like this. So, but you know, I was like, not me, man.
 
 Lei Xing 
 Yeah. So, okay, ‚Åì YU7,
 
 I think we're done with YU7 for now, but going to a very relevant point you made about...
 
 selling vehicles as a business model, does that ensure a trillion dollar market cap for a company that starts with the T or does revenues from sharing of these existing fleets of vehicles ensure not selling vehicles, ensure the trillion dollar market cap, right? This is what we're talking about.
 
 with respect to the so-called robotaxi launch last Sunday with great fanfare, myself included.
 
 Right? That's the question. I am. I am. And the fans, the STANs will always come right back and say, ‚Åì you know, we're doing this without LIDAR. We're doing this without, you know, achieving this, you know, the vision only. Why can't they?
 
 Tu Le 
 You're such a fanboy. You're such a fanboy.
 
 It's unsupervised, although
 
 there's somebody sitting in the passenger seat, it's unsupervised.
 
 Lei Xing 
 ‚Åì Right. So that's one of the things too. Can they change exactly that game established by the robot taxi, the pure plays Baidus the Waymos I've taken a lot of Waymos I love to take a Tesla robot taxi when it expands, when it right. But that's the question because that's the reality that Tesla is facing right now because they're losing sales.
 
 they're not going to get to the 1.8 million this year. They're going to have a negative growth. And perhaps going forward, yeah, perhaps going forward, they may be retreating in sales if they don't have the products that can compete.
 
 Tu Le 
 highly negative.
 
 That capacity, let's say 300,000 in Berlin, 300,000, 400,000 in Austin, 300,000 in Fremont, a million units in Shanghai, that's gonna hang on their neck like a huge weight. And so they don't have any new products really that I can think of. A Model 2 is not gonna be this clear cut winner in any of these markets now.
 
 Lei Xing 
 Right, and then they just let the, was it the head of manufacturing? What's the guy's name Omar or something? ‚Åì Right, he left or was fired. I think one of the HR people left. ‚Åì
 
 Tu Le 
 I don't know. I'm not sure.
 
 Yep.
 
 And one of the... ‚Åì but they hired a cruise guy. Cruise, so...
 
 Lei Xing 
 Right, I saw that.
 
 So if we're only talking about sales, selling EVs, Tesla is in a precarious spot right now.
 
 Tu Le 
 And, and, but let's just go by sheer data, sheer numbers. Yesterday or Sunday was the first day for robot taxis for Tesla in the city of Austin. Waymo, you and I have experienced it. Now you've experienced it in three cities. They
 
 Lei Xing 
 Waymo just launched
 
 in Atlanta through Uber. Have you heard that?
 
 Tu Le 
 I to I tried to call one and then and so I cancelled it. I
 
 called three times and I cancelled it and I was I stayed at a hotel at the airport so it wouldn't go there anyway. So I was just going to drive it around the city and change addresses and but because I saw them. I saw a couple riding around. Unfortunately, I didn't get to call one but. Tesla launches on Sunday with about 10 to 20.
 
 Lei Xing 
 Yeah.
 
 Tu Le 
 Robo taxis 10 to 20. Okay ‚Åì Waymo They're in Austin. They're in Phoenix. They're in LA. They're in San Francisco They just announced that they're trying to get their permit for New York City Four-season city. So this is a lot different than the current cities that it's in Okay There they have about 500 Robo taxis in service right now
 
 Lei Xing 
 vehicle.
 
 Yeah,
 
 I'll give you one reference point. it's interesting in Phoenix, downtown Phoenix, where actually the area where Waymo operates, there's nobody on the streets, walking on the streets, no pedestrians, no bikes, bikers, because it's just too hot. And that creates the perfect conditions ‚Åì for the robotaxis because it's relatively less complex. Actually, my wife and I were talking about that.
 
 Tu Le 
 It's too hot.
 
 Yeah.
 
 Lei Xing 
 while writing one. We were kind of like debating each other. Yeah, so.
 
 Tu Le 
 I think San Francisco
 
 is decently messy. New York is going to be clearly their most challenging market for now.
 
 Lei Xing 
 LA we know it was messy recently.
 
 Tu Le 
 Yeah, and then,
 
 ‚Åì Baidu in China, they operate in 10, 12, 14 cities. Half of those cities are no safety driver. They have about a thousand. Robotaxes in all these cities. If you add up pony, you add up, we ride, you add up deep route and a few of these other smaller companies, there's probably another 400. Robotaxes. So in China, there are.
 
 Lei Xing 
 And then there's
 
 the different form factors, not only the passengers carrying, right? There's the ones.
 
 Tu Le 
 Right.
 
 And so in China, there's let's say, Robo taxi wise, there's about 14 to 1500. So Tesla has 10. Waymo has 500 by do has about 1000. So where this what's never clear to me is these analysts that say it's a multi trillion dollar company, they don't tell me they don't ever tell you percentage wise. ‚Åì
 
 Lei Xing 
 So.
 
 Tu Le 
 How much of that valuation is based on them dominating the China market? Right? Are they saying that it's a multi-trillion dollar market just in North America? Or are they going to dominate the world? It's never clear to me.
 
 Lei Xing 
 Theoretically,
 
 with their fleets all over the world, that is the ink.
 
 Tu Le 
 But the assumption that...
 
 Lei Xing 
 But in China, we know what's going
 
 on with FSD.
 
 Tu Le 
 Well, exactly. So the assumption is that FSD will get worked out in China. You and I know that that is not a done deal and there's no guarantee of that. In Europe, there's no guarantee of that. And so it's largely just North America that in my estimation, these analysts are saying make make Tesla a multi-trillion dollar company. I want Tesla to have great
 
 robotaxis. I want more competition in robotaxis to be quite frank in the United States because without cruise, we lost 33 % of the competitors. But the reality is they're almost like a rounding error in the totality of global robotaxis on the road.
 
 Lei Xing 
 Yeah, so it's just Waymo, Tesla trying to be one, Zoox maybe, you know, starting, ‚Åì May Mobility, Nuro
 
 Tu Le 
 I know you've
 
 had ‚Åì your head in volleyball matches, but did you see that Uber is looking at acquiring Pony?
 
 Lei Xing 
 no, I haven't.
 
 Tu Le 
 There's an article
 
 in the Wall Street Journal, want to say, that Uber has ‚Åì spoken with Travis Kalanick to try to ‚Åì kick the tires on Pony to see if it could be acquired.
 
 Lei Xing 
 Well, they are
 
 working together outside of China, so anything could happen. Right? What's with the...
 
 Tu Le 
 So that also means
 
 that they're talking to WeRide.
 
 Lei Xing 
 I'm certain, you know.
 
 Tu Le 
 I'm also certain that they probably made inquiries into DeepRoute.
 
 Lei Xing 
 Yeah, I think Uber, that's kind of their maybe going back a little bit to their original intention when TK, right, when he was around of when he said at a conference in Beijing 10 years ago that they wanted to achieve mobility flowing like water, which means the robot taxi must be a big component of it.
 
 Tu Le 
 So let's talk about how this changes things for Uber and for Pony. First of all, Pony is a Chinese robot taxi company that plans to operate in Europe. That hasn't been sorted out because there's a ‚Åì challenge from a policy standpoint. There's a hardware software potentially, right? The European Union hasn't called any of those issues out or challenges out yet.
 
 Will they allow Chinese hardware and software running on European roads? The reason I bring that up is because there are policies in the United States that prevent that for private passenger vehicles. And then with Uber, if they were to acquire, it doesn't matter if it's Pony or WeRide or DeepRoute or Waymo, they would have a competing service on their platform when they're partnering with
 
 robot taxi companies unless they're servicing different countries or different cities in countries. you know, we're, they're going to be frenemies it looks like. And we should always remember that Uber used to have the advanced technical group, the ATG group in Pittsburgh. It ran over a woman on a bike, killed her, shut it down.
 
 sold it to Aurora, which is the commercial trucking autonomous vehicle company in Pittsburgh. So tangled web we weave Lei, tangled web.
 
 Lei Xing 
 Yeah, so I think Tesla is right now is the probably the only one ‚Åì first a traditional automaker, not a pure play robot taxi company to achieve the second one that has fleets all over the world. So they're the one company that wants to make autonomy work in every region of the world.
 
 Can they do that? Waymo can't because Waymo is US focused, is North America focused. then they're not going, at least they're in Japan, but the Chinese, they're also China focused, but they're expanding rapidly to the Middle East, Southeast Asia. ‚Åì But there's no, right, the UK, but there's no one company that can be a global AV player yet.
 
 Tu Le 
 And remember now there's Wayve in the ‚Åì UK company too.
 
 Lei Xing 
 ‚Åì and test what is the one to do it.
 
 Tu Le 
 And
 
 there may never be one, depending on the data ‚Åì policies, not only where they reside, but the security and the privacy of them.
 
 Lei Xing 
 Yeah,
 
 but if Tesla can do it globally, then I'd agree with the analysts that they add the trillion or 10 trillion, whatever. But at the same time, they're still losing sales. Can they have enough revenues to support?
 
 Tu Le 
 No, I-I-I-I-
 
 Because I so my underlying my underlying assumption for these analysts that are saying it's a multi trillion dollar company is that they're assuming that Tesla would dominate every market that it's in. It's not going to dominate China. It's just not. It's not going to dominate the United States unless Waymo goes away. So. Yeah, it's just.
 
 Lei Xing 
 the business model, but not selling.
 
 Tu Le 
 You know, these are interesting things we're talking about because it's an interesting time, especially now that the Trump administration is kind of taking a different tack when it comes to they haven't really talked about. They haven't canceled those policies from the Biden administration, but they haven't really talked about them either. And so I think this is interesting. Hey, we are getting towards an hour or so.
 
 Lei Xing 
 Yeah.
 
 Tu Le 
 I don't have anything else, how about you?
 
 Lei Xing 
 Same here, I mean we're at the midway point of 2025 and the recent last week the robotaxi plus the use of launch I think was a good kind of a combination of the first half of to, I mean it's an understatement to say again an interesting first half in the industry but.
 
 Fireworks, you know, they're coming. More fireworks.
 
 Tu Le 
 Well, think you'll have
 
 a head start on me in China and then I'll meet you in China. I won't be there the entire time, but I'll try to do a couple of things that I've been wanting to do. So we should probably be able to update folks on some of the things. I don't know what they will be yet because it just depends on availability of vehicles and
 
 and people. So I don't want to say anything yet.
 
 Lei Xing 
 I mean, the first thing I
 
 land after in China is definitely check out the YU7. I mean, there's, right? There's no brainers. And yeah, the seeing it in the flesh.
 
 Tu Le 
 So
 
 moving to questions. Good afternoon, guys. So SPX, ‚Åì thank you, number one, for being a loyal live streamer, though today's episode is what? ‚Åì Seven hours later. And it was supposed to be six hours later.
 
 Lei Xing 
 You are behind the clock.
 
 Actually, it works out better for me since I'm on the West Coast.
 
 Tu Le 
 I'm
 
 not going to make any excuses, but Delta delayed my flight. ‚Åì So his comment is with YU7's explosive launch, what edge does the Model Y have left in China? How do other major options compare in the mid 2003? I think we kind of talked about it, but Lei, why you go ahead.
 
 Lei Xing 
 I... yeah.
 
 Yeah,
 
 I think the only edge they have left in China is that similar to ‚Åì the Xiaomi cult, there's still a significant Tesla cult, custom made in China. yeah. Well, I mean, in a more positive sense, because they still think Tesla as a global brand that is produced ‚Åì in multiple parts of the world.
 
 Tu Le 
 There are Chinese Tesla STANs
 
 Lei Xing 
 It's the number one selling EV in the world, vehicle in the world. And they're continuing to push the current five years zero financing, 8,000 insurance subsidy kind of. So I mean, the sales are still quite significant. But again, right, we said, even if they maintain, let's say a 25,000 Model Ys per month.
 
 their shares are getting smaller. And with these oncoming killers, I don't know what edge they still have besides the kind of the brand still the brand aura that's still in some sense a lot less than years past. other than that, if you compare the pure tech spec, they're already being killed, right?
 
 YU7 is the latest example. The G7 is coming. G7, we said, is going to be obviously priced lower than the YU7 in the $200,000 to $250,000 range, which XPeng is very confident of. The Li Auto BEVs, these are coming. And Tesla does not have an additional model to bring to the plate.
 
 Tu Le 
 And as far as I know, they're not doing any small tweaks to the Model Y for the rest of this year.
 
 Lei Xing 
 No. ‚Åì
 
 Tu Le 
 What
 
 I'll say is in trying to find something positive, you'd mentioned brand loyalty. There are some Chinese consumers that are loyal to the Tesla brand. I agree with that. The second thing is that the charging infrastructure is pretty substantial in China. and again, I'm searching for something to be positive about for the Tesla Model Y. When you say 25, I want
 
 to remind the folks that when we get into the later months of 2025, that's when they get to the 70, 80, the 90,000 units historically. And that is not likely going to be happening. And it's almost a double whammy because domestic sales are down and their exports are also going to be down. So that absolute number, the production number or the sell number, not for domestic, but total sales.
 
 is going to be lower, unfortunately, for the Model Y probably.
 
 Lei Xing 
 Like again, I'll reiterate this. Tesla is not, they're gonna be relevant. They're not done, right? In China. But again, the YU7 surpassing the model Y sales, monthly sales, matter of time, matter of time. That's it.
 
 Tu Le 
 ‚Åì
 
 I would argue, that they're relevant still, but they're doing everything in their power to not be relevant, it seems like.
 
 Lei Xing 
 And again,
 
 we're at the end of June, starting July. Let's see what incentives they announce.
 
 Tu Le 
 Well, first of all, let's see if Q2 numbers are lower than Q1 numbers because you know my favorite GIF is the panic button. So I might have to pull that out if Q2 numbers are pretty anemic. At Preza this month, Tesla is in the hard times. Tesla Model Y versus Xiaomi, YU7 versus Xpeng G7 versus i8.
 
 versus Onvo L90. You're absolutely right, Impreza. I think that... So we talked about this a little bit earlier. There's going to be a stagger on some of these launches, but I think the G7 is probably going to be... Aside from the YU7, the G7 is probably going to be really close in the Model Y's rear view mirror.
 
 Lei Xing 
 ‚Åì
 
 And again, we said this, said this, these other competitors to the YU7 launching, they'll be saying, hey, look, we can deliver our vehicles faster. Come on over. You know, if you hesitate, you know.
 
 Tu Le 
 So what we can anticipate internally from Xiaomi is that the sourcing guys are working every day contacting their suppliers to pull in schedule. And they're putting pressure on the suppliers to put pressure on their suppliers, the tier two, tier three, tier four, to work overtime in order to get more components to the factories in Beijing. so the art
 
 to what the manufacturing operations team in Xiaomi is probably gonna be to figure out what the right mix is. Because if you were a SU7 buyer or ordered a SU7, you don't want your lead time to now get pushed out by a month, six weeks. You're not gonna be very happy about that. So you still gotta balance SU7 deliveries with YU7 ramp and YU7 deliveries.
 
 Lei Xing 
 That's the balancing act of a Lei Jun and company. That's gonna be difficult.
 
 Tu Le 
 Cause there will be people that complain and you know that I know that full stop. There will be people that complain and unfortunately if it goes viral, that's when things will get a little dicey for Xiaomi.
 
 Lei Xing 
 Well, always.
 
 Alright, yeah.
 
 mean,
 
 YU7 has turned into a war of words, even among the leading KOLs in China, even among the senior executives of competitors. Shouting match. Yeah, just like Jack Wei saying, this guy is the Evergrande of the industry.
 
 Tu Le 
 Well, they feel the pressure, they feel the heat.
 
 I don't have anything else so Lei. Have a good weekend in Phoenix.
 
 everyone
 
 ‚Åì Thanks for joining us as always. We will catch you all next week when Lei will be in Beijing. So good morning, good afternoon, and good evening.
 
 Lei Xing 
 That's correct.
 
 Good afternoon from my side. Bye bye.