Episode #219 - NIO ES8 Shakes Up Pricing, Tesla Model Y L, Leapmotor & XPeng Breakout

In this episode of China EVs & More, Tu (Sino Auto Insights) and Lei (former Editor-in-Chief of China Auto Review) dive deep into the latest developments in the global EV and mobility sector. 

From NIO’s bold ES8 relaunch and pricing strategy to XPeng’s surprising earnings and Leapmotor’s raised sales forecasts, the conversation spans China’s ultra-competitive EV market, Tesla’s Model Y L update, and how foreign automakers like Ford, GM, Volkswagen, Audi, and Buick are fighting to stay relevant.

The hosts also discuss battery swapping milestones, government price-cut scrutiny, global tariff shifts, and the EV retail channel wars (4S vs. D2C). To wrap, Tu shares his personal EV shopping experience in the U.S. (Cadillac Optiq, BMW i4, Chevy Blazer EV, Hyundai IONIQ 5).

If you’re tracking China’s EV giants and their impact on the global auto market, this is a must-listen.

Keywords:

China EV market, NIO ES8 2025, Onvo L90, Tesla Model Y L China, Li Auto i8, XPeng P7, Leapmotor sales forecast, BYD Yangwang, Xiaomi SU7, Aito M8, Ford EV platform, CATL battery, Volkswagen XPeng partnership, Buick Electra, Audi E5 Sportback, AutoX robotaxi, Geely satellites, Tesla DeepSeek, EV price war China, battery swapping, NEV sales China, EV breakeven 2025

Companies discussed:

• Chinese OEMs: NIO, Onvo, Li Auto, XPeng, Leapmotor, BYD (Yangwang, Denza, Fang Cheng Bao), Aito, Xiaomi Auto, Geely, Huawei (Momenta, Hesai)
• Global OEMs: Tesla, Ford, GM (Cadillac, Buick, Chevrolet), Volkswagen, Audi, Hyundai, BMW, Lucid, Rivian, Stellantis, Volvo, Polestar
• Suppliers & Partners: CATL, DeepSeek, Doubao, SpaceX/Starlink

Chapters:

00:00 Introduction to the EV Landscape

01:52 NIO's ES8 Launch and Market Impact

09:21 Pricing Strategies and Market Dynamics

18:46 Legacy Automakers and Their Adaptation

28:09 Future Trends in the EV Market

36:04 Tech Upgrades and Market Trends

37:47 Pricing Strategies and Market Positioning

39:38 Brand Differentiation and Consumer Perception

42:33 Competition in the EV Market

47:55 Consumer Preferences and Brand Loyalty

49:42 Localization and Market Adaptation

51:12 Profitability and Production Strategies

55:15 Sales Channels: D2C vs. Traditional Models

57:58 Future of EVs and Consumer Expectations

Transcript

Tu Le 
 Welcome to the China EVs and More podcast. In the next hour or 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.
 
 Lei Xing 
 Thank
 
 Tu Le 
 For those that are new to the show, welcome. And for 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. and I are two of the most knowledgeable people in the world doing this. So help us get the word out about the 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 mobility and transportation 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 I encourage you all to do. Lei been a while back in the United States, Lei, and been a while back in the United States Tu Can you please introduce yourself?
 
 Lei Xing 
 Yeah, good morning. This is Lei Xing, former chief editor of China Auto Review. And this is episode 219. So lots has been happening because lots are happening. And also because we've had this break the last couple of times. So it feels like we miss a lot of talking about a lot of the activities.
 
 that's been ‚Åì in the China EV and the global EV, ‚Åì none more so ‚Åì than the ES8 launch, which blew up the internet again.
 
 Tu Le 
 Yeah, it should. There's
 
 a huge non-price cut price cut for it.
 
 Lei Xing 
 NIO has been on a roll, I'm telling you. And how we keep talking about consistency. We finally are seeing some consistency from NIO, at least from the chatter, from Onvo L90 from the ES8. They seem to be getting on the right track. ‚Åì It's strange, I think it's strange. ‚Åì
 
 Tu Le 
 In other words,
 
 finding their groove.
 
 Lei Xing 
 Finding their groove, finding their groove. And what'd think? Right, now let's...
 
 Tu Le 
 Hold on a second, by the way,
 
 what do you think of my Beijing bikini T-shirt? Yeah, right? So for those that don't know, just really quickly, in Beijing, there's this joke when the nong cun it's super hot, they'll lift their shirts up over their bellies. we call that the, foreigners call it the Beijing bikini. So anyways.
 
 Lei Xing 
 Love the belly.
 
 ‚Åì
 
 It is, it is.
 
 Tu Le 
 It happens a lot. So it's not this is not a one-off thing a lot of men do that. So
 
 Lei Xing 
 Yeah, I do it too. You just have not seen it.
 
 Tu Le 
 You
 
 Well, most of the men that do it have larger bellies than you do too, so it stands out when those guys do it.
 
 Lei Xing 
 So
 
 talking about the ES8 a little bit, think NIO has just completely shattered its own kind of the premium pricing mechanism, if that's the way I kind of put it. Because what happened, yeah, traditional, traditional. And same for the industry, right? We can't really...
 
 Tu Le 
 So traditional premium.
 
 Lei Xing 
 segment on pricing anymore because what you got with the ES8 to put in perspective is cheaper than the Model Y L cheaper than the Li Auto i8 in BAAS pricing mode. So Li Bin seems to be ‚Åì determined and you know make it right.
 
 Tu Le 
 I think he feels
 
 this is an existential thing.
 
 Lei Xing 
 And also something that has completely changed in terms of the model trims. How many times did Li Bin say this standard, that standard, this standard? It must have been over 10 times he said that. ‚Åì And with Li Auto i8
 
 Tu Le 
 Mm-hmm.
 
 Hold on. So for,
 
 let me, let me stop you there. Let's, we, always get new audience members. So rather than just talk about a car, let's give a little background. NIO is obviously a US publicly traded company. The ES8 is their second. If you count that, ‚Åì hyper car is their first vehicle launched. The ES8 is the, is the first production vehicle launched. It's their flagship.
 
 Lei Xing 
 you
 
 Tu Le 
 SUV is a large large SUV, so it's about the size of a Li Auto L9 It's big. It's not Tahoe big, but it's not ‚Åì small and this is their flagship and Everything else kind of derives from that. So please continue. I'm sorry
 
 Lei Xing 
 Mm-hmm. It's big. It's bigger.
 
 No, I was talking about the standardizing ‚Åì features and packages. ‚Åì I think it seems to be something that's now, rather than you as a consumer selecting different ‚Åì features, everything is standard. ‚Åì One, that it pieces the consumer. Second, it makes it easy on the supply chain side for production. We talked about that last episode. And Li Auto was pointing to you.
 
 Tu Le 
 And they're copying Li Auto
 
 a little bit.
 
 Lei Xing 
 Yeah, I i8 just having that one pricing trend, something they did within a week of launch. And they've started deliveries. And now we have this ES8, which is, yeah, it's going to start at below 300,000 RMB when it launches.
 
 Tu Le 
 And I'm going
 
 to counterpoint to your point. You talked about them kind of blowing up traditional premium. It started earlier than that. And the Xiaomi SU7 really, really.
 
 I think for most people, because you started seeing BYD with the Han and the Tang move at least fit and finish wise to a premium with still a bit of mass market on the high end of mass market, but mass market pricing. so Xiaomi also flipped this traditional premium segment on its head with the SUV.
 
 And it is doubling down on that with the YU7. And we're just seeing NIO now because that ES8 was pretty expensive. It's always been pretty expensive. But relative to the last version, think CNEVPost it's a 25 % haircut. And this with the background of the Chinese government saying you guys cut out this price war. So I think
 
 To your point, Li Bin didn't want to dilly dally with, OK, let's experiment with price x. And then if it doesn't work, we do price x minus y. He just went super aggressive.
 
 Lei Xing 
 And also with the success of the Onvo L90, the volume's going up and they do share some components, especially the e-motors. So that makes it ‚Åì cheaper on the cost and the production cost side of it. ‚Åì And then he did mention, I think in one of the interviews that they're still able to, you call it a profit at that pricing. And then he did mention about
 
 backstabbing earlier owners. I think it was very frank. He said, in this kind of climate, survival is my number one priority and I have to do what I have to do. So.
 
 Tu Le 
 which
 
 is a huge, huge change from his normally customer focused, customer engaged marketing and his narrative and comm strategy.
 
 Lei Xing 
 Yeah, and now ET9 is their 700,000 MMBE halo car, whereas ES8 is just their top flagship, which, you know.
 
 Tu Le 
 And you
 
 can expect, Lei, that they're likely going to reconcile pricing for the rest of their vehicles now.
 
 Lei Xing 
 It's extremely, ES8 is now extremely close to the BAAS pricing of the ES6 if it falls below 300,000 RMB. So that's something they have to deal with. also at the back of,
 
 Breakeven is the number one priority. And how do they get there?
 
 Tu Le 
 We talk about eking out that profitability and part of the reason they're able to eke that out is because their sales are growing. I mean, it's taking two new brands and it's taken a lot of ‚Åì reconciling their pricing strategy and their product strategy. But that's the scale now that allows you to amortize all these fixed costs for the swapping stations, for these new products.
 
 into a larger number of units ‚Åì that they sell per month. And that's helping them eke out a little profit. But this is why we got to see that continued growth from every EV maker. you're just the constraint of having all these fixed costs around weighing you down without growth and sales is going to be untenable for a lot of these Chinese EV makers.
 
 Lei Xing 
 And then the other change is really the rhythm of launching. Onvo L90 started it. Now ES8 is following with it. Rather than launch something on NIO day and wait more than half a year to deliver, that's completely changed, right? It's ready. They're in showrooms. Test drive will come up. And then delivery is starting in about a month. ‚Åì That'll add to the volume.
 
 and hopefully a breakeven goal. And I think Li Bin, he's still confident that they can reach breakeven in Q4. And interesting that Li Hong, he mentioned that within the first 12 hours, the order that the ES8 got, not firm orders, but it's more than the L90. So go figure.
 
 Tu Le 
 So Deutsche Bank says that they can do about 3K a month of the ES8 with the revised pricing.
 
 Lei Xing 
 Yeah, I
 
 think I mentioned, on the L90, 10,000 would be my kind of expectation. And 3,000, think is roughly right. I expect they can do 5,000 ES8s for a, let's say a grade A performance. And given what has happened so far, I think that's very possible.
 
 Tu Le 
 And NIO and Li Bin is not done. They have NIO Day coming up later this year. So they're still going to pull at least one or two rabbits out of their hat before the end of the year as well. So they'll continue to be in the news.
 
 Lei Xing 
 Well, we know the L80 is.
 
 So soon after the NIO Day L80 will launch. And then on the other side, the auto, the i6, which is competes with the L80, large five seater SUV, will launch. So these are, I mean, they're not, it's almost like I talk about the summer sizzle. It hasn't fizzled. The sizzle hasn't fizzled.
 
 It keeps on coming and amidst all of this, actually the Model Y L is getting a lot of attention, for better or worse. I tweeted a lot of wows for the stands here and a lot of nahs for what we have seen, what's on offer in the market.
 
 Too bad the Y L seems to be that Elon Musk says it may not ever be available in the US. But it's an important addition to Tesla to keep that kind of ‚Åì their resilience, I'd say, so far afloat. And I actually, it's a model that needs to be reckoned with. Although there's tons.
 
 Alright, what we've seen just launched in July and August. The latest I've heard is that they've got what 35, 40,000 orders for the Y L. Still significant. ‚Åì
 
 And now.
 
 Tu Le 
 Well, they have
 
 a lot of, I believe they have a decent amount of capacity, idle capacity on the sidelines that needs some orders. but this isn't.
 
 A new product. This is a trim level of a current product and so we shouldn't see.
 
 Lei Xing 
 Yes.
 
 Tu Le 
 sales growth like a new product might have. We might see a 20 % bump, a 25 % bump, but that's at best. And one of the things that I'd written during ‚Åì the tweet about the show last night is we're gonna get into this final stretch of 2025.
 
 What I'm going to be looking for in particular, especially with the ES8 and the L90 from NIO is if the Chinese government is scrutinizing price cuts and really, really looking ‚Åì at hoping the players don't get to that extreme again, what will Aito do?
 
 what will Li Auto do? Because if we think about Li Auto, the L9, L8 are pretty old now relative to all their competitors on the full size SUV, seven seat SUV. So if they can't really cut price or not in any significant way that would drive sales, what will they do?
 
 You know, because the clear winners are still going to be the YU7, SU7 to a lesser extent. Maybe the Model Y L gets an incremental bump. You and I agree that that'll likely happen, at least for the next couple of months through the end of the year. But you know, these larger SUVs, because where does Yangwang fit into all this? You know, with the Y9, is it? Yeah, but you know, ‚Åì
 
 Lei Xing 
 Well, Yangwang is somewhere up there. yeah. I mean, they only sell a few hundred units
 
 a month. it's a bit different. like I said, this summer sizzle, it's continuing, right? So next week, have the, right, you mentioned ‚Åì the other models, Aito M8 EV launching, or at least start pre-sale. And then we have the P7 launch, which He Xiaopeng says he wants that model to be
 
 top 3 for EVs under 300,000mmb.
 
 ‚Åì which I actually I did not think that was a model that was going to be high volume but it seems that ‚Åì it will be one of the significant additions and he says they will want to do 40,000 a month in September.
 
 Again, XPeng there seems to be on the track to achieve breakeven as well.
 
 Tu Le 
 XPeng killed it in earnings. Killed it.
 
 Lei Xing 
 Yeah,
 
 mean, yeah, I think they probably will. I mean, given the current trajectory and then LeapMotor is the other one that killed it. Right. They're actually raising their half a million sales target to 580,000 to 650,000 at this point in time.
 
 Tu Le 
 So good for them.
 
 Lei Xing 
 And then I a million, a million next year.
 
 And they're the second after Li Auto to achieve half-year profitability.
 
 Quite interesting how the LeapMotor.
 
 Tu Le 
 When I think about these revised sales numbers, especially when we're looking out to 2026, I wonder what the sales and forecasting teams at these companies that are raising sales forecasts, not for the rest of this year, but for 2026, because what's their assumption on how many
 
 EV makers exit the market, how many go bankrupt, things like that, because to go to a million units next year, means that...
 
 they're either really, really high on their products and or a combination of being very high on your products, but also the competition lowering a little bit.
 
 Lei Xing 
 Well, part of it is the LeapMotor still have the A and the D series coming, which are at completely opposite ends of their spectrum. And then XPeng still has got the super electric, which is their EREV, coming on the X9 first, but there's also the SUV. ‚Åì
 
 I think the other part of it is, remember China is now a retentional market. It's not a, what's the opposite of it? It's not a growth market. It is, it's still a growth market, but people, yeah, people buying.
 
 Tu Le 
 in a relative sense, but in an absolute
 
 sense, it's going to be tapering off.
 
 Lei Xing 
 people buying
 
 cars for the first time, that share is going down. Whereas people trading up and buying additional vehicles, that share is going up. And so that's for these car makers that they're trying to find ways to address this market. And aside from we've already passed the tipping point, right? 50 % NEVs.
 
 Tu Le 
 Yeah.
 
 Lei Xing 
 And also this year, one very important factor is the expiration of the 30,000 cap on the purchase tax, which will be 15,000 starting next year. Similar to what's happening in the US with the September 30th ‚Åì ending of the tax credit, there'll be a spurt kind of. ‚Åì
 
 Tu Le 
 Mmm.
 
 Lei Xing 
 So but at the end of the day, it's products, products, products at the right pricing, pricing, and the right features and features. And we're seeing this, whether it's the Onvo whether it's the ES8, whether it's Model Y L.
 
 Tu Le 
 I can talk about that a little bit towards the end.
 
 Lei Xing 
 it, you know, let's.
 
 Tu Le 
 ‚Åì it seems like at least in the last couple of months, Li Auto is really the only one that stands out in a negative way when it, when you look at the product launches that have happened over the last six or seven weeks. So.
 
 Lei Xing 
 And then, ‚Åì
 
 yeah, then Li Xiang came out with this interview with Luo Yunhao, the well-known ‚Åì comedian, sort of that long four hour. I think that's a great tactic to turn the attention away from the controversy. Good PR and marketing ‚Åì tactic, I think.
 
 But ‚Åì yeah, I'd say i8 is the most pressured currently. At the same time that you mentioned the L series is facing a bit of a headwind right now.
 
 Tu Le 
 And at a time when people are looking more and more at EREVs and PHEVs, so it couldn't be worse for Li Auto because you would think that it would kind of allow L6, L7 sales to continue to be robust because more and more people are looking at PHEVs and EREVs in the China market.
 
 Lei Xing 
 Yeah, and at the same time, Li Bin says, forget about the shift that's now the large three-row SUVs ‚Åì being fully electric.
 
 So ‚Åì but.
 
 Tu Le 
 You know, here's the conundrum that I have with NIO a little bit because swapping currently in... For NIO is a runaway hit. They reached nine million swaps earlier this week. You saw that rightly. And... ‚Åì
 
 Lei Xing 
 in Shanghai, in Shanghai alone. And then they did that
 
 route 318 Sichuan to Tibet ‚Åì battery swap road or route. ‚Åì That was a good way of lead up to the ES8 launch. ‚Åì
 
 Tu Le 
 So I almost feel like Lei Jun has handed off the social media king.
 
 Title to Li Bin Now, Xiaomi doesn't have new products to launch or offer. So, Lei Jun has just kind of sort of been out of social media, or at least not as popular. But it seems like Li Bin is really leaning into having something to say almost on a daily basis. So.
 
 Lei Xing 
 Yeah, his, his,
 
 you know, brother Ben, his new nickname is Bin Ge to Bin God
 
 Uggghhhh
 
 Tu Le 
 So let me ask you, now that I know that you've been paying mostly attention to the China stuff, but did you get a chance to chew on some of the Ford stuff?
 
 Lei Xing 
 Yeah, the new platform, the universal platform.
 
 Yeah, to me it just seems that they're late with it. That's all. And it's norm. It's the standard.
 
 And now I think maybe this is the... they figured it out and good luck. Should have been done.
 
 Tu Le 
 It's
 
 still a 2027 thing and I still don't have a clear idea of how they're going to source LFP. And my assumption is that Marshall, Michigan is going to roll those cells. there's still, so see CATL.
 
 Lei Xing 
 the blue oval, blue oval,
 
 yeah, CATL inside, inside.
 
 Tu Le 
 Yeah, ‚Åì so CATL is still going to be a part of that $30,000 ‚Åì capability to get down to that price point. And, ‚Åì it, it puts Slate a little bit as the odd man out in the U S market. So, but let, let me do this really quickly Lei Go ahead.
 
 Lei Xing 
 It has to be.
 
 More!
 
 No, no, no. Speaking of Ford, think it's worth the mention. We, I like to, we, we, we focus so much attention on, the Chinese EV smart startups, but I think credit should be given to the Buicks, to the Audis because they've recently announced movements. The Audi with the E5 Sportback starting at $235,900.
 
 for Audi? Yeah, it's over $30,000. ‚Åì With CATL, with Hesai, with Momenta, some of the other Audi models as Huawei, the Buick Electra L7, ‚Åì it's actually a EREV, I believe. Also has Momenta. ‚Åì I feel like also with the
 
 Tu Le 
 I think it was like 30, 32 or 38.
 
 Lei Xing 
 ‚Åì momentum of the Chinese smart EV startups. They're not letting up, right? They're just
 
 The foreign legacies are catching up. I applaud them for doing this. ‚Åì So just want to put that there. Also Volkswagen deciding to have Xpeng inside all of their branded vehicles. ICE PHEV, BEV. Times have changed, I tell you.
 
 Tu Le 
 Well, you knew that was going to happen.
 
 At least I thought it was going to happen. It didn't make sense for them to have effectively three platforms. Because ICE, EV, PHEV, or NEV inside China with XPeng and then Europe and then Volkswagen having a separate strategy for that stuff in the United States with Rivian.
 
 Lei Xing 
 Yeah.
 
 Tu Le 
 It just simplifies things for them, right? ‚Åì I won't give them as much credit as you. I won't say that they're catching up. I will say that the legacies are showing that they have a pulse. And I do think that the Buick... The Audi's a little awkward. I like it. But I think it's a little awkwardly designed because you're so used to the jelly bean.
 
 ‚Åì shape and then the interior with the whole coast to coast to the extreme front console. think that's a bit jarring as well. I do think the Buick should find some buyers. They're not bad looking. I think they're aggressively priced. So I do think that GM has found a bottom.
 
 I don't know if Volkswagen has yet in China. Maybe that happens next year. ‚Åì none too soon because that's when the Xpeng Volkswagen co-developed vehicle should start launching and stuff. ‚Åì Again, I won't give them as much credit as you saying they've caught up.
 
 Lei Xing 
 Yeah, G9.
 
 Well, as
 
 far as finding the bottom, probably this year, if I was Volkswagen CEO, I'd say this year is the bottom and next year is really when everything. ‚Åì
 
 ‚Åì is being executed and launched and delivered. Now that's a huge question mark, right?
 
 Tu Le 
 Yes, part of all of these announcements by the legacy automakers and part of these promises that are two years out, 18 months out, even from Rivian and Lucid who think they can get $40,000 SUVs on the road in the United States or North American market by next year. These are still speculation because GM talked...
 
 They're kind of mush because the Jim Farley's and the Mary Barra's said that they're going to be selling a million EVs by 2030, blah, blah, blah, right? So, and we can say that they're victims of circumstance, the new administration, all these other constraints. But at the end of the day, I knew from day one when they made those announcements that it wasn't going to. So, and I'm obviously not the smartest person in the world. So.
 
 I think you and I kind of knew that those numbers were never gonna happen. Yeah, I just was confident that those numbers were never gonna happen. So that's why they've actually...
 
 Lei Xing 
 Yeah, this was what, four years ago? 2021, 22.
 
 Tu Le 
 put us in a position to not trust them, to have to see it to believe it ‚Åì attitude. because the Ford announcement, let's rewind a little bit. A lot of what they talked about, other companies are really already doing it, right? The unicasting, the gigacasting, Xiaomi is already doing it.
 
 know, Tesla kind of created that opportunity. And then to your point about them coming late, GM did the Ultium platform. That's effectively what I feel Ford is doing is creating their own platform that allows them to build top hats. But that's because they didn't do it originally. They decided to pick two.
 
 vehicles, the Mach-E and the F-150 Lightning, and focus on those individual products as opposed to like create a new system. ‚Åì this sector and these sectors and the complementary sectors always stays pretty interesting, huh?
 
 Lei Xing 
 Right.
 
 Yeah, and the major part of it is you spend some time in China and then you come back and you go back to China again and you come back every time it's like, you can do this? Wow. And coming back, it's same old, same old. When do you get over the hump?
 
 Tu Le 
 The one thing about going to China as often as we have recently, Lei, is that I do feel that...
 
 Lei Xing 
 What were the two spoilers?
 
 Tu Le 
 Sales of 2026 are getting pulled into 2025 and there could be a real slowdown in growth in 2026 for the Chinese domestic market.
 
 Lei Xing 
 Yeah, mean, a market of 15 million, 16 million and ease. What can you expect? You can't expect it to double, right? ‚Åì
 
 Tu Le 
 And God bless them because it's lasted this long. You know, that explosive growth, they're going to be almost two thirds or three quarters of the entire NEV market globally in 2025 or something like that. It's a big number. The cool thing, and this is what we love about it, is that the innovation side of things is off the charts.
 
 Lei Xing 
 Yeah.
 
 Tu Le 
 the cool car factor is off the charts and, ‚Åì how that plays out internationally is kind of what you and I are grabbing our popcorn for. ‚Åì because in every other instance, I think in history, some of the products weren't very good. You know, when the Japanese came to the United States, it took them a little bit to, to, understand us taste, but you and I are American, man. We.
 
 know for in our hearts we know in our hearts that some of these Chinese cars the ES8 if they got priced at 55 60 thousand the united states it would sell
 
 It would undercut the X6, X5, X7. It would undercut whatever the, I don't even know what the Mercedes premium large SUV. Yeah, we know the YU7 would sell. We know many of the BYD vehicles would sell. In our hearts, we know this. As someone who grew up outside of Detroit and just
 
 Lei Xing 
 no, no,
 
 VLS.
 
 Tu Le 
 was American car company ‚Åì up until my 20s. I know these things would sell, which makes it very, very difficult. And it creates this consistent pressure in the back of global CEOs minds.
 
 Lei Xing 
 And also the European market, ‚Åì despite the tariffs that are in place, it hasn't really stopped the Chinese being, right?
 
 And yeah. ‚Åì
 
 Tu Le 
 So a couple of quick notes. ‚Åì Geely had that big splash this week with the satellites. So they're doing connected vehicles. I was interviewed for a Wired article that talked about some of that stuff. people were wondering. It's basically, if you think about Tesla, you should think about Starlink. You should think about SpaceX, because Tesla's been putting satellites, or Elon's been putting satellites in orbit.
 
 Lei Xing 
 And he
 
 Mm-hmm.
 
 Tu Le 
 for quite some time.
 
 Lei Xing 
 ‚Åì speaking
 
 of interesting thing that they're integrating Doubao and DeepSeek ‚Åì into the vehicles in China. When that gets pushed out, we don't know yet, but it's an interesting development that now Tesla vehicles in China will finally have this capability, not only in terms of ‚Åì voice interaction recognition, but also
 
 the large language model that are now very popular. If you talk about Li Auto, if you talk about NIO, you talk about XPeng the VLA, right? The LLM. So kudos. You got to do what you got to do. Necessity, yeah. Necessity.
 
 Tu Le 
 Yeah.
 
 Well, but again, this is not an innovation for Tesla in the China market. This is a qualifier. This is because everyone else
 
 has it already. And, and an equivalent to that is I just upgraded to the new iOS on my iPhone 16, plugged it into my IONIQ 5. And so now I have the AI intelligence for Siri in my car.
 
 Lei Xing 
 Yeah.
 
 Hmm.
 
 Tu Le 
 Let's see how more accurate, how accurate it is versus the past versions, because I always do simple things. I always, hey, can you play this? Can you play this for Apple Music? Can you text message this person or that person? And it does OK. It doesn't do great. But I'm hoping that using the AI intelligence, it really boosts the accuracy.
 
 Lei Xing 
 Well, yeah.
 
 thought.
 
 So I'm up for upgrading to the 17 because my three-year plan is up for the AT &T. So I get a trade-in. And so hopefully I'll try that out. I don't have the intelligence now on the 14 Pro, but yeah.
 
 Tu Le 
 nice.
 
 I like, so I do like the button for the camera on the side. I think that's pretty cool. So what else did I want to bring up? This week is a little bit of a lull to me outside of the ES8 announcement in the China market, really. There's a lot of geopolitics and some of that stuff going on, but I think this is the comp.
 
 Lei Xing 
 Yeah, the EU and
 
 the US agreement on some of the tariff stuff, autos. I think it says still 27.5 % to be reduced to 15%, if my understanding is correct. Contingent on what Europe does for American goods.
 
 Tu Le 
 And this
 
 Mm-hmm.
 
 Lei Xing 
 Yeah. ‚Åì
 
 Tu Le 
 This is,
 
 we always have this Lei We always had that one or two weeks at the end of summer. That's the calm before the storm in the China market because we know.
 
 Lei Xing 
 Yeah. Well, I feel like there's always a storm,
 
 a storm every day. Every day China, ‚Åì
 
 Tu Le 
 ‚Åì goodness.
 
 But any so so that's all I really have dude, so let's go to the questions and comments
 
 So SSJJ005 asks, what is your guesstimate for the final price for the new ES8? Well, that's been announced. We talked about that. hold on. Also, yeah.
 
 Lei Xing 
 Well, I already treated that my
 
 micro is 289,800 starting BAAS pricing. The current pre-sale pricing is 308,800. So think about that.
 
 Tu Le 
 Well, and also...
 
 So what is the point for having ES7, which is now more expensive than the new ES8? That's a great question.
 
 Lei Xing 
 Well, that's one of those things we talked about, what happens to the ES6 pricing.
 
 you probably should kill one of the SKUs if it was me.
 
 Tu Le 
 Well,
 
 and I mentioned earlier that they're going to have to reprice everything now.
 
 And the the how's the street going to react to that? Because are they going to be happy that there's profit or they're going to be upset because they lowered the price of everything?
 
 Lei Xing 
 Well, that there's both things going on. So considering that over 10 years of these tech R &D now translating to sales and production costs reduction, given the batteries, that these production costs are going down anyways. ‚Åì There's that side of the equation. And then the other side is sales growing. So at the end of the day, again, it's
 
 Tu Le 
 Because that's.
 
 Lei Xing 
 breakeven, profitability, and what you have to do to make it happen, then we'll see.
 
 Tu Le 
 Okay. Riz, NIO getting closer to Onvo brand and pricing might confuse new customers.
 
 Lei Xing 
 That's another thing. I think it's about a hundred thousand and maybe difference in terms of pricing. 100 or the 279, 265,800 starting price versus the 418,000. That's quite significant. So, so well, there'll be some, you know,
 
 Tu Le 
 It is.
 
 Lei Xing 
 ‚Åì cannibalization, possibly. But I think it's okay, ‚Åì given the current setup. And again, the positioning, The Onvo L90 is pure families, families, Whereas the ES8 is business, executive, family, yeah, premium, more premium. So I think it's ‚Åì differentiated enough.
 
 Tu Le 
 premium.
 
 Lei Xing 
 That won't be a problem, but it's an issue for every company. Anyways.
 
 Tu Le 
 And honestly, this is where the companies will design a brand, position a brand in the boardroom, in the strategy meetings internally, and then they launch it and release it. And sometimes they don't get to dictate that because there might be a brand already positioned in that. And the consumer decides.
 
 where Onvo is on that four quadrant brand positioning. So this is where management needs to have some flexibility to say, you know what? Onvo in our minds was here before we launched it, but in consumers' minds, it's here. So let's reconcile that and try to distance the NIO brand because of the pricing difference, because of all these other things. ‚Åì
 
 with what you said Li Bin had said, right? Right now, my priority is righting the ship. So everything else from a brand portfolio, product portfolio, pricing strategy is gonna be secondary.
 
 Lei Xing 
 Yeah, that's, know, and these pricing, if Onvo L90 was an indication, these pricing are built on the cost, on the expectations of volume. And it's not something that they, you know, just hit their head and we're going to price it like this. There's a lot that went through it, that went into it. And, you know, and that translates to what happens on the market performance.
 
 Tu Le 
 So, SBX says, good morning guys, great to see you back, good to see you and having you SBX, appreciate your loyalty. How does the ES8 compare to the Li Auto i8? And any water army attacks?
 
 Lei Xing 
 Well, I mean, we kind of talk about at the very beginning of this show about premium. What is premium? What pricing means premium that's being shattered. So I was thinking if we compare the Onvo L90 to the i8 as the biggest rivalry, but now we have the ES8, which is actually in terms of pricing is at the point of i8.
 
 So now we actually have possibly two NIO models competing against one i8.
 
 Go figure.
 
 Tu Le 
 The i8
 
 needs to reduce price, that's clear.
 
 Lei Xing 
 Well, I don't know about that. mean, they already did it once. Not reducing, but kind of just aligning it into one pricing. But that's a lot of pressure. That's a lot of pressure. think for Felicia.
 
 Tu Le 
 It is a lot of pressure. man, hey,
 
 China Driven, what's up buddy? Good to see you, man.
 
 Lei Xing 
 Yeah, that's all well a couple of times in Beijing.
 
 Tu Le 
 second and ‚Åì Mike
 
 the car geek is there too so very confusing why the Chinese consumers still love model Y and model 3 when you can choose better EVs for the same or cheaper price my only thought on that SS JJ 005
 
 It's actually pretty overwhelming because we talk about a handful of cars in different segments. There are a half a dozen cars in the Model 3 segment, more than half a dozen. There are at least 10 or 12 in the Model Y segment, know, similar midsize crossover kind of thing. So it's intimidating. And so maybe Chinese consumers says, well, I know what a Tesla is.
 
 I don't know what an Aito is. I don't know what a leap motor is. Not from that brand awareness and trust standpoint. So maybe by default they're like, you know what, this is way too...
 
 because it's not because of innovation and it's not because of all the features of a Tesla. Now, China driven, if you want to type something in and add to that, please feel free.
 
 Lei Xing 
 I'm going to go out on a limb and say Tesla is still king in China as far as the Model Y is concerned because it's still the top selling SUV, fully electric SUV in that segment, below 300,000 RMB The reason why being is exactly what you said.
 
 It's the reason being those five letters. Tesla, because it's a global brand. It's produced in three continents. It's Elon Musk. It's simplicity. Although, you know, the nickname for Tesla vehicles in China is the Mao Pei Fang, which means a apartment that's not renovated.
 
 But somehow ‚Åì that pulls the consumers because of the simplicity. That it does not have the premium feel inside. It's a big ghetto. But it does the job. And a lot of consumers still trust the five letter of the Tesla brand. I think that's the reason. Not to say that they're completely vulnerable.
 
 Tu Le 
 So I'd written in the newsletter this week that it...
 
 Lei Xing 
 are ‚Åì not vulnerable, right? But.
 
 Tu Le 
 I'd written in this week's newsletter, Lei,
 
 that the Model 3, Model Y looks more like a ride hailing car in China than some sort of massive runaway hit car. ‚Åì yeah, the other thing that I will add to this, to your statement, Lei, and kind of reinforce that is it straddles the line because some Chinese consumers
 
 think it's Chinese because it's built in China. And then it can also be this international brand. So I think it doesn't really tell you that it's American brand in your face. So I think there's this gray area that it sits in and it allows them to play both sides.
 
 Lei Xing 
 Yeah. And there's still a huge following huge fan base. Remember the market is a 25, 30 million vehicle market. And right now it's still a worrying state. There's a fan base for Nio, there's a fan base for Li Auto, there's a huge fan base for all of these brands until we haven't reached that point yet. What He Xiaopeng says about each company does five, six, seven million vehicles a year.
 
 Tu Le 
 Win. ‚Åì
 
 Lei Xing 
 there's only less than 10 players left. We're not at that point yet. ‚Åì
 
 Tu Le 
 And familiarity will breed sales. If you go to Shanghai, you'll see a lot of Nios. You go to Guangzhou, you see a lot of Xpengs. In multiple cities in China, you'll see a lot of Teslas. So that also creates this fresh in your mind perspective for Chinese consumers.
 
 Riz writes, deep-seek coming to Tesla in China. It's all happening now, driven by competition in the amazing market.
 
 Lei Xing 
 Shortest you have to have what other people have.
 
 Tu Le 
 So here's the crazy thing, because we should remember this. Before the Biden administration left, did two, I want to say executive actions. I'm not sure what they're called. I will find out what the official name of these things are. Model year 27, restricted Chinese software, connected software, model year 2030.
 
 Lei Xing 
 Software band, right?
 
 ICV band, right? And software band, yeah.
 
 Tu Le 
 So with the foreign legacies, a GM using Momenta, Volkswagen using primarily Xpeng, Silicon and Stack, it makes sense that if a Chinese EV company comes to the United States or North America, they would partner with a local entity, right? So this shouldn't be unprecedented because it's happening in China. It's just that
 
 There is no, and I could be wrong, is there a specific policy that says you need to partner with a Chinese connected vehicle software provider or hardware provider? I've not read that, but I think it's understood. I think it's understood.
 
 Lei Xing 
 But I'm not read that either. But yeah, the
 
 word is localization. That's all it is.
 
 Tu Le 
 Yeah, that's so. And honestly, in China, there's just not very many Western competitors that have the level of innovation ‚Åì that the Chinese domestic competitors do. So it's pretty amazing how XPeng runs their company. This is SSJJ006. and Diana or Diane laughs at my
 
 my T-shirt, my Beijing bikini T-shirt here.
 
 Lei Xing 
 Yeah, mean, XBON is, I think, something that's often not talked enough about is their overseas strategy and tactics. That's been working out great for them. Revised. Yeah, revised. So channel, especially working with the right partners in the respective countries. And yeah.
 
 Tu Le 
 the revised Overseas Strategy.
 
 So let me finish that comment. It's pretty amazing
 
 how XPeng run their company because half of the sales comes from the very cheap MO3, which only costs 120,000 RMB and still going to achieve profit.
 
 Lei Xing 
 on the television.
 
 So their top selling models are the Mona M03 the P7 +, the G7, and now with the new P7 coming. And then the X9, which is a bit more profitable for them.
 
 Bye.
 
 Tu Le 
 I don't want
 
 to oversimplify this, but this points back to utilization rates at factories. When you're at 80 % utilization rate, you're breakeven. And every vehicle after that, you're making money, generally speaking. Generally speaking.
 
 Lei Xing 
 Yeah, yeah. And again, know, Leap
 
 Motor, Li Auto, XPeng, they're all one brand. At least as of today. Or where NIO has got three brands on their plate. And they have to figure out positioning, know, premium channel. But the point is to reach profitability, they have to take actions. And one of those actions is
 
 the channel part of it. Do you put a firefly in a NIO showroom? You do. Do you not organize a NIO day and spend too much money on it? No, you do, as is happening this year.
 
 Tu Le 
 And remember
 
 that the alternative is Firefly is a ‚Åì mass market, pretty cheap vehicle. If you build retail stores solely for Firefly, that expense for that brand is going to be overwhelming.
 
 But that's the art of brand positioning with one company. And Alfred Sloan kind of created this whole, you know, a product or brand for every point in your life. And that's what traditional automotive has always been. You start off in a Pontiac, you get a raise you move to a Chevy.
 
 Once you're an executive, you buy a Cadillac. At least that was GM strategy. And if you look at Firefly and then Onvo and then Nio, that's kind of that strategy. You look at BYD. BYD has Fang Cheng Bao, then they have Denza, and then they have Yang Wang. It's not working out so well for BYD's other brands yet, but that's kind of the ‚Åì strategy for these companies, which has been...
 
 A tale as old as time in the automotive space. And this is why, and you'll agree with this, Lei, this is why it's perplexing when you see a Stellantis, when you see a Geely that have brands that seem to overlap. And you had mentioned this earlier, that may be cannibalizing each other. A specific example is Volvo Polestar.
 
 it creates confusion amongst the consumer. So let me see, SPX. Man.
 
 Lei Xing 
 Well, then you also have BYD,
 
 which with their Ocean and the Dynasty networks, how many models overlap? Dozens and dozens of models that overlap.
 
 Tu Le 
 Well, their strategy was obviously just to flood the zone, like overwhelm. It has worked because their sales volume is so high. as they try to find more sales to continue growth, that is probably going to start to backfire. And they'll probably have to back off on that. Now, I got to tell you, Lei, man
 
 Lei Xing 
 Yet.
 
 You have plans on,
 
 Tu Le 
 People must have missed us, at least these three or four people, because we're getting peppered with questions. And I didn't realize we were off for so long. here's SPX. What's the more popular sales models? 45 dealers or D2C, or 4S dealers or D2C? I don't have my glasses on. Deployed among major brands, which is trending to be the preferred method per market.
 
 Lei Xing 
 Maybe they come out late.
 
 Tu Le 
 force in terms of better customer engagement and experience.
 
 Lei Xing 
 We're talking about channel now. The 4S model versus the direct to consumer model.
 
 Tu Le 
 Okay, me.
 
 DTC, direct to
 
 consumer.
 
 Lei Xing 
 I think it's obviously a ladder.
 
 That doesn't mean that the traditional 4S is not working because we know the XPeng actually went back to that model bit, Remember, in terms of channel, working with the traditional partners. It's basically figuring out the sweet spot. And if it works for one brand or some brands may not for the others. But ‚Åì I'd say definitely the D2C is currently the way.
 
 the smart idea. Because even for the traditional 4S, I think it's also that idea or concept is shattered. There's no really the true traditional 4S dealerships anymore in China.
 
 Tu Le 
 Well, the infrastructure on the 4S stuff is hard to ignore.
 
 Lei Xing 
 Because a associate that tells you about the vehicles, the Chinese consumers, they're a lot more knowledgeable nowadays. Right? What they want, when they want. Yeah. So it's been shifted.
 
 Tu Le 
 are much more educated. They know.
 
 And here's a quick example. Li Bin's on social. He'll tell you what the vehicle is doing. Lei Jun is on social. He'll tell you every single feature on this car. You're not seeing Mary Barra's talk about the newest Tahoe. You're not seeing Jim Farley talk about the newest F-150. So the information is easily accessible and it's not so complicated that a Chinese consumer can't understand what a YU7 has from a feature set standpoint in a
 
 in a less than 10 minute video.
 
 Lei Xing 
 And the other thing I think that's, I'm not sure this is happening in the U.S. is when you go to these showrooms for us or showrooms themselves, these sales associates, they add you on WeChat and then they keep bombing you with information saying, hey, do you want to test drive? We can bring the vehicle to you. You know, let me know. I keep getting these messages all the time, whether it's
 
 Tu Le 
 How many cars
 
 did you buy? What's the close rate for these cars?
 
 Lei Xing 
 None. I'm
 
 like, sorry, I'm not in a market. I was just interested, but.
 
 Tu Le 
 So you raise a good point about the 4S ‚Åì not being relevant and D2C kind of being. So there's this.
 
 ‚Åì they, they, they, they need to work symbiotically. And during a price war, people, there's a FOMO thing. There's just, I want to get this because it's a low price. It's the newest thing. But once we get into more mature market where branding is really important, where positioning and understanding and you get sales because I trust Li Auto more than I trust Xpeng or NIO and vice versa.
 
 That's where 4S and D2C need to work closely together. And this is where the brands need to create training programs to make sure that the sales guys pinging you on WeChat are consistent with their messaging so that it's not confusing that I went into a NIO store and saw an Onvo because I know what the positioning is in my mind. And we're not seeing that right now just because
 
 the mad dash because of the price wars, but the price war as that subsides, the training and understanding from the internal folks that touch the customer will be much, much, much more important.
 
 me see here. So Mike, deep question. wow. Do you know what happened to Auto X Robo Taxi fleet in China? The US operations is now called Tensor Auto and want to sell a funky personal Robo car.
 
 Lei Xing 
 AutoX, I'm telling you, has been one of the most mysterious companies that we know or not know about since the beginning.
 
 Tu Le 
 Wow, remember we
 
 went to that event in Shanghai and they had like a car with duct tape and stuff on it. And so...
 
 Lei Xing 
 They're still around to sometimes talking to some of these WeRide people and they're still around. Just not as actively pushing out, you know, we did this this time or did this today or, ‚Åì you know, we did this tomorrow. No, they're just.
 
 Tu Le 
 Yeah.
 
 Well, they kind of ran
 
 out capital.
 
 Lei Xing 
 Yeah, under the radar, but
 
 still around, but just no news that we know of.
 
 Tu Le 
 Okay, so Will writes, ES8 is now priced for volume. I think this is from my telling him to comment. ES8 is now priced for volume as the slot between Onvo L90 and the rumored ES9. NIO has entered the price war. Tesla is really the only established foreign brand in China and that still holds some weight. And major modern cities might be more likely to embrace high level Chinese goods.
 
 But in the rest of the country, there's a still prestige to foreign brands and stigma to having a Chinese car brand. It's moving, but it's a slow thing. Yeah, I agree with that too.
 
 Lei Xing 
 Yeah, that's a good point.
 
 Tu Le 
 Jeffrey,
 
 hello Jeffrey, what's going on buddy? Just got back, yeah he's just got back from the ES8 launch, Li Bin definitely unloaded some firepower this round.
 
 Lei Xing 
 I'm sure he had fun with the launch event.
 
 Second time in a month. I'll tell you that.
 
 Tu Le 
 man, Jeffrey's having some he's he's you know, having some good days connected together. Good for you. ‚Åì Will also writes Xpeng have done a great job of turning things around. Stopped all wheel drive in most models. ‚Åì AWD aimed at comfort and practicality and price. This is what the market basically wants. Customers put their money where their mouth is. For DTC and for us in China, we have 2S, the shopping mall store.
 
 ‚Åì Riz, we definitely missed you both. Thanks, man. ‚Åì Will, yeah, Will writes, well, Onvo now brand themselves from their salespeople calling for messaging me as NIO Onvo or in Chinese. ‚Åì Yeah, so that's it, man. Hold on. Let me make sure.
 
 Lei Xing 
 Yeah, to us.
 
 Yeah, I think it was in China for a few days.
 
 Tu Le 
 This is a good active group. I like it. You guys make sure to bring questions. We're going to try to do a better job of marketing the show because I think it's one of the best in the biz. I think it's the best in the biz when it comes to China stuff, but we'll do a better job of marketing in the future. So I don't have anything else. And what I thought was going to be a short show is now over an hour long. ‚Åì
 
 Lei Xing 
 I hope so.
 
 We can call it a day.
 
 Well, usually it's about an hour. We try to make it 40, 50 minutes, but usually it runs long.
 
 Tu Le 
 Yeah.
 
 So.
 
 Lei Xing 
 once you add in the questions and stuff.
 
 Tu Le 
 Last thing is my situation. I have the IONIQ 5. I have to turn it back in in January. Yeah, remember I got the 13 month lease. So this week I went to Cadillac to look at the optic. I went to BMW to look at the I4. I went to Chevy to look at the Equinox and the Blazer EV. So those are the car.
 
 Lei Xing 
 Already? okay.
 
 That's fast.
 
 Tu Le 
 And I went to the Hyundai dealer and they were kind of jerks a little bit. My sales guy is out of the country on vacation. So I just went in there and I was like, hey, you know, salesperson's like, how can I help you? Well, I'm looking to price out an IONIQ 5. He's like, oh, we don't have any. And he didn't say anything else.
 
 He didn't say, well, we don't plan on getting any more by September 30th. didn't because that's my bogey. September 30th and the next five weeks, I'm probably going to sign a lease on a new car. That being said, I'll probably have two leases for three or four months. And. I'm still convinced I want an EV. That's for sure. Today I might go look at.
 
 Lei Xing 
 Ugh.
 
 Tu Le 
 because I'm joking around with my son. So let me tell you, the i4 drives great. It's around $650, $700 a month, three years, 12,000 miles, drives awesome. It gets less than 300 miles of range, but backseat and the trunk is too small for two pre-teen kids, two pre-teen boys. So.
 
 If it was me, I'll probably get the i4. The optic is almost the same price, but it comes with a charger and it comes with Super Cruise as standard. The problem with the optic is that there's low inventory in Michigan with the optic. And so I, I, and then the Equinox and Blazer, we're looking at 24 months, not 36.
 
 Lei Xing 
 huh.
 
 Yeah.
 
 Tu Le 
 and less than $400 a month.
 
 Lei Xing 
 Mmm. Mmm.
 
 Tu Le 
 crazy crazy crazy pricing
 
 right now. the good thing is that they do have inventory of the blazer and the equinox.
 
 Lei Xing 
 I still have until
 
 end of September, so five, six weeks left.
 
 Tu Le 
 Yeah, which is not actually a lot when you're shopping car shopping, because when there's only like two or three of something, you got to know about it early. And I'm not confident that the current Cadillac dealer I'm working with will get any more optics. So I'm leaning optic right now. But if I can get a Blazer EV with Super Cruise, then maybe I go Blazer. And so hold on a second, we got one more.
 
 Lei Xing 
 Just pick
 
 one of the good old American brands, including Tesla.
 
 Tu Le 
 So,
 
 SPX, ‚Åì Gravity, I don't really want a $1000 payment or a $900 payment to be quite frank. And with R1S and the Gravity, I actually was this close to getting a Lucid Air before I got the IONIQ 5. But ‚Åì the other thing that I really, really want is Super Cruise.
 
 I actually haven't looked at pricing on Teslas yet. I'm going to do that as a matter of course, just so I'm thorough. But all else being equal, I would probably get an optic before I got a Model Y with FSD. So I was told, rumor was whispered in my ear, that the Super Cruise in upcoming over the air updates, you might be able to start using it in cities.
 
 Anyways, everyone, thank you for joining us. ‚Åì Sorry we missed you the last few weeks, but we're back, baby. We're back in a strong way. We're going to finish up this year pretty strong. Thanks again. We'll see you next week. Good morning, good afternoon, good evening.
 
 Lei Xing 
 Bye, guys. Bye-bye.