Honda’s $15B EV Collapse, Porsche Profits Crash, and China EVs Surge | Episode #241 Artwork

China EVs & More

Electric Vehicle (EV) & mobility experts Tu Le and Lei Xing plug you in to all the latest going's on in the 🇨🇳EV & mobility space that are sure to have effects on the 🇺🇸 and 🇪🇺 regions. Specifically, Tu and Lei dissect the week’s most important news coming out of the China EV/Autonomous Driving (AV), chip, battery, ride-hailing, shared & micro-mobility verticals. Learn more about companies like: #NIO #XPeng # LiAuto #BYD #Arcfox #Seres #Voyah #Xiaomi #Huawei #Tesla #GM #Ford #VW #Audi #Merc #BMW #Didi #Meituan #WeRide #Pony.ai #AutoX #Baidu #Apollo #Hesai #Seyond #RoboSense

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China EVs & More

Honda’s $15B EV Collapse, Porsche Profits Crash, and China EVs Surge | Episode #241

March 16, 2026 • Tu Le & Lei Xing

0:00 | 40:23

This week on China EVs & More, Tu and Lei break down one of the most turbulent weeks yet for the global auto industry.

Honda stunned the industry by announcing $15.7 billion in EV write-downs and abandoning its “Zero” EV program, marking the company’s first loss in its 70-year history. Porsche and Volkswagen Group also revealed dramatic profit declines as EV investments, tariffs, and China market pressures weigh heavily on legacy automakers.

Meanwhile, China’s EV sector continues to move at breakneck speed. NIO and Li Auto both reported earnings and ambitious 2026 growth targets, while a new wave of large luxury SUVs — from AITO, BYD, Xpeng, and others — intensifies competition in China’s most profitable segments.

The hosts analyze how China’s relentless product cycles and rapid innovation are redefining the global automotive landscape, leaving Western automakers scrambling to catch up.

🔑 SEO Keywords (for description & podcast discovery)

China EVs & More, Tu Le, Lei Xing, Honda EV write-down, Porsche profits decline China, Volkswagen Group earnings EV losses, China EV market competition, Xiaomi SU7 refresh, Tesla Model 3 China competition, large electric SUV market China, NIO earnings 2026, Li Auto earnings results, BYD SUV lineup, Chinese automakers global expansion, EV industry transformation, Beijing Auto Show EV news

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⏱️ YouTube Chapter Timestamps

00:00 Intro and episode overview

01:10 Honda’s $15.7B EV write-down explained

03:30 Porsche profit collapse and China sales decline

05:40 Volkswagen Group earnings and EV investment impact

08:20 NIO earnings and growth targets for 2026

12:00 Li Auto earnings and strategy reset

15:00 Explosion of large electric SUVs in China

18:30 Why Xiaomi’s SU7 refresh could challenge Tesla Model 3

22:00 Tesla’s product strategy and lack of refreshes

25:30 The coming SUV battle in China’s EV market

29:00 Canada opening the door to Chinese EV imports

33:00 Partnerships between Chinese and Western automakers

36:30 Future of global EV competition

38:30 Wrap-up and final thoughts

Tu Le (00:00)
Hi everyone and welcome to the China EVs and more podcast where 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. We will open the room up at around the 40 minute mark to anyone who's keen to ask us any questions. 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. To our loyal listeners and viewers, welcome back. We ask that you smash those like and subscribe buttons so you don't miss anything from us in the future. My name is Tu Le, I am the Managing Director at Sino Auto Insights, a global management consultancy that helps organizations bring innovative and tech-focused products and services to the transportation and mobility sectors. I write a free weekly newsletter that we pull many of our discussion topics from.

You can sign up for it at Sinoautoinsights.substack.com, which of course I encourage you all to do. A waiting in anticipation to get his Tesla Model Y Lei. Can you please introduce yourself?

Lei Xing (01:12)
Two weeks, two weeks until delivery. Yes, good morning. This is your co-host, Lei Xing, former chief editor of China Auto Review. this is episode number 241, another Friday the 13th edition, which in American culture is, yeah, it's right, well, next.

Tu Le (01:28)
it's Friday the yeah, it is. And it's Pi Day. It's Pi Day too.

Lei Xing (01:37)
over the weekend, which in American culture is a horror movie that kind of played this past week. We heard about Porsche, we heard about Volkswagen Group, we heard about Honda putting up horrific numbers, to say the least.

And then there's tons of other things that went on this past week. ‚Åì stateside, yeah. I mean, let's maybe talk about get the horrific stuff out of the way.

Tu Le (01:59)
Stay psyched.

Okay. So

Honda joined the party. They're writing a big check.

Lei Xing (02:13)
$15.7 billion, right? And they killed the zero EVs. It's like poetic, right? Because they named them zero EVs and they ended up not doing them. So zero. And the first loss in the company history.

How old is Honda? 70 years old? Something like that. And they've never had a loss. And you go over to Porsche, they went from 5.6 billion Euro operating profit to roughly 400 million. Basically, it's almost zero. Again, because of the write downs, right? Because of the...

Tu Le (02:34)
I have no idea dude. Is that it?

Lei Xing (02:54)
the strategic redirection of their EV strategy. think that was like alone was like 2.4 billion euros. And then tariffs and all that Volkswagen group, their operating profit went from 19 billion reduced by 10 billion euros in 2025 to just under 9 billion euros. Are the worst over?

That's my question to you.

Tu Le (03:19)
not according to the Leiters because

he's forecasting or Porsche is forecasting in the China market that they're gonna get down as low as 30,000 units. So that's a mighty fall.

Lei Xing (03:32)
Well, what we do

know is on the Volkswagen Group side, their share of the proportion of operating profit from China dipped below a billion euros in 2025. And they expect that to fall further to roughly 200 million to 600 million euros. So there's one indication.

Volkswagen and Xpeng just announced this production of ID.UNYX O8. What they're expecting is toward Q3 and Q4, these products are supposed to ramp up where next year their returns could be better. So I think in general, I think we know in 2026, the overall market is gonna be down. The share of NEVs is gonna be going up for sure.

And many of these automakers, have another tough year ahead of them, if not more.

Tu Le (04:23)
They're trying to find a bottom and macroeconomics do not help them, but they are all hoping, including the Chinese automakers in the China market at least, that some of these weaker players throughout the course of this year, 2026, leave the market and create more opportunity for them in 2027 and beyond. Now,

Again, we talk about consolidation. We talking about weaker players leaving the market, but we then point back to NIO's earnings and how they seem to be very bullish on 2026. And one thing that really stood out to me is that the five and seven seat luxury premium large SUVs

in the second half of 2025 grew 350%.

Lei Xing (05:17)
Yeah.

Yes, so NIO and LiAuto earnings were this past week on Monday and a couple of days ago. NIO, okay, right? So they had a profitable Q4 and their target this year is full year non-GAAP operating profit. Big goal, big goal, okay? And they're expecting 40 to 50 % growth on top of the 320,000 units, which gets them to

roughly just under 500,000 units. Tall order, I mean, the first quarter, okay, we know it's slow. And NIO, I feel like they're becoming more and more of an SUV driven. I think for a few reasons. First of all, it's SUV driven because the market wants them. Second, because they're more profitable models.

But I think on the flip side, I'm just a little worried that because this year these bigger SUVs are a lot competitive than last year. Because almost every other competitor are launching these similar large SUVs. So it's not going to be like...

Tu Le (06:25)
this week's newsletter. made a brief list just off the top of my head. So

AITO M9 Denza N9 Xpeng GX you know, BYD U8 ZEEKR's 9X So that's just off the top of my head.

Lei Xing (06:38)
just

just pull them together into the 7 8 9

Because all of these models have these numbers in them, the 789s, including the foreign ones. Buick is launching one of their bigger cars. Nissan, WEY V9X ArcFox, the DaTang, which we talked about last week. So I think the

ES9, ONVO L80, and the ES7, they expect these along with the ES8 and ONVO L90 to be significant portion of their sales this year. roughly the 460,000, 70,000, I mean, I'd imagine at least two thirds will be SUVs.

Tu Le (07:22)
And honestly, I will add an asterisk to your statement about NIO becoming an SUV company. I think they're going to drive a lot of their profits from SUVs, but they are also a small mass market car brand now with ONVO and Firefly to a lesser extent. That's going to drive a lot of their flexibility if they can keep a lot of that volume in order to keep

Lei Xing (07:39)
Sure.

Tu Le (07:47)
to keep the capacity utilization high at their factories, that creates more flexibility for them on the SUV side.

Lei Xing (07:53)
Yeah, and most likely the ES8 is going to probably shatter the record for that vehicle in that segment, how fast it gets to a hundred thousand deliveries. So 80,000 is coming pretty soon. So that was since September. The striking, yeah, yes. But I think the ONVO L90, all of a sudden,

Tu Le (08:09)
Nio is looking for some pretty healthy growth in 2026.

Lei Xing (08:19)
has been rather, I don't want to say disappointment, but compared to the ES8, it's falling off. The sales are falling off for some reason. So that shows you how long does the ES8 continue this run? It's also a question.

Tu Le (08:33)
especially with a new L7, L8, L9 coming on board. So.

Lei Xing (08:37)
And then on the other

side, Li Auto, right? Their target is to grow 20%, which get them to also the same target that NIO is shooting. Although Li Auto is profitable as a company for a full year, they were still profitable. They were profitable ‚Åì in Q4, but they had a loss in Q3. It looks like they're...

Tu Le (09:01)
What a difference a year makes because

this time last year, Li Auto could do no wrong. Their sales were great. Their revenues were great. Now, 2025 was just not a great year for them. Full stop in a lot of different ways.

Lei Xing (09:20)
Yeah.

Yeah. I mean, the i8 and then the i6, the L series went down big time. And now they're relaunching the L9 as this first of their newer EREVs. And plus they want to get i6 to like 20,000 units a month. And Li Xiang, he's like, we're going to go back to entrepreneurial.

style management where they're giving autonomy to these store managers. He says something in earnings called which want these people, the store managers, to become millionaires. So it has to deal with their sales, their channel structure, and on top

the models that they're launching, the new generation of these crazy tech, right? full what? by wire chassis, 360 degree lidar.

embodied AI SUVs.

He's saying we're going to disrupt the tech again, but other people are trying to do the same.

Tu Le (10:23)
Yeah, there's a window of maybe 60 to 90 days for any company to come out with something that's not in the market yet. Because from a roadmap standpoint, you better believe that these companies have it in their roadmap. They might not launch it first, but within a couple of months, there's one or two companies that also have it as part of their feature set for their products.

Lei Xing (10:24)
it

Tu Le (10:51)
Case in point, I was just reading that the Seagull has Lidar, which is a $10,000 car. The L60 is going to, 100,000 RMB whatever. The L60 ONVO is going to have Lidar now, and that's a 20-something thousand dollar car when you get battery swap. so BYD started the trend.

And that has now bled over to a lot of other mass market brands that need to put LIDAR on their lowest priced products.

Lei Xing (11:27)
Yeah, Huawei launching the 896 line, LiDAR, a couple of weeks ago. Seagull, yeah, 70,000 RMB, $10,000 EV with LiDAR. So it's just a matter of time that that comes out.

Tu Le (11:44)
don't feel like things are slowing down at all. We just get bombarded with announcements. Yeah, the SU7, the refreshed SU7 is going to start delivering.

Lei Xing (11:46)
Hey... Hey, Xiaomi!

Xiaomi moved

up the launch of the SU7 to this month. It was supposed to be in April.

Tu Le (11:59)
They see opportunity. think that that does not bode well for the Model 3. So my guess is we'll see some sort of promotion from Tesla in China to try to hold onto some sales for the Model 3.

Lei Xing (12:16)
Yeah, yeah, Tesla is a Model Y market in China.

Tu Le (12:20)
I don't know

how Tesla in general, by the end of this year, their vehicles will look fairly analog to whatever is out there just because I don't believe the 3 and Y are going to see any type of significant refresh or additional features in 2026.

Lei Xing (12:40)
Yeah, I think they're going to still continue to play with ‚Åì tweak the financing deals, giving extra money for paint, for insurance, that type of thing to stay relevant. There are still relevant. Model Y is one of the top selling models. But I think the YU7 has been the top selling model for the first two months of this year, I believe.

Tu Le (13:05)
for the B segment

crossover SUV, which is where the Model Y sits and the ES6 sits. ‚Åì

Lei Xing (13:07)
Go.

So this is all anticipation of, Beijing Auto Show will come up in five weeks or five or six weeks. A lot of fireworks.

Tu Le (13:21)
I'm starting to get pictures from my friends in Shanghai about the F1 that's happening. I'm a little bummed. I was thinking about going, but it doesn't make sense for me to go and then come back and then go again in three weeks.

Lei Xing (13:21)
Yeah.

Yeah.

Yeah, it's always, they moved it to March this year. It's usually in April, but last year it was in March, right? Usually coincides with the Shanghai and Beijing auto shows,

Tu Le (13:38)
Yeah, that's what I thought.

Mm-hmm.

Lei Xing (13:44)
Yeah, I mean, that's an opportunity for these branding, To, you know, the Cadillac. Cadillac is now in F1, right? They're doing it, you know,

Tu Le (13:54)
folks that

aren't very knowledgeable about F1, me being one of them, let me be the first to volunteer and identify as a novice on F1. Ford is back in because they are supplying hybrid engines to Red Bull. So they don't have a team. And Cadillac is in with a team and a car, but they're using Ferrari engines.

Lei Xing (14:10)
or training.

Tu Le (14:17)
They won't use the Cadillac engine, in two or three years. God bless it. There is a, and I've mentioned this before in past podcasts, there's a podcast called Acquired. The latest podcast they had, it's four hours long. It's about F1. And for those people that want to understand companies, tech companies in particular, but also they've done sports.

Lei Xing (14:20)
Mm-hmm.

Tu Le (14:42)
league. they've done an NFL, they've done an international, the premier cricket league in India. Very, very, very, very great podcast that I can wholeheartedly recommend. I'm a nerd. When I'm driving, I put it at 1.3 speed and just listen. My sons are like, you know, I don't want to listen to this.

Lei Xing (14:59)
Yeah.

Yeah,

even my daughter is a big fan of F1.

Tu Le (15:07)
So,

and Cadillac has a Chinese driver.

Lei Xing (15:10)
Yeah, Zhou Guanyu, reserve driver, reserve driver.

Tu Le (15:12)
So right, there

was a lot of complaints from the star drivers about the engine and the battery. And so I'm all for it. I'm all for it.

Lei Xing (15:23)
New rules,

right? 50-50 split between the ICE engine and batteries. So that's a new rule which benefits Mercedes significantly this year. Because they have the history of these prowess in developing this hybrid power train. But yeah.

Tu Le (15:35)
So.

Yeah, it's a fun

time right now in Shanghai, according to, well, from the pictures that I'm getting from my friends. so God bless it because Shanghai was always a little bit better off than Beijing post-COVID, but it's good to see that some of the energy is coming back to the city of Shanghai. But let me throw you a curve ball, Lei.

You probably know about the R2 now and the Lucid Investor Day.

Lei Xing (16:13)
I'm a bit formal.

I'm a bit FOMOing right now because I still have the R2 on order. I haven't canceled it. But the performance package with the launch edition, that's not something that I want. I want something the $45,000 good value. Cool.

Tu Le (16:20)
Maybe your wife needs a new car.

No, so

that's a bait and switch. Did you see that? So they have a $48,000 that has a larger battery and more range. And then the $45,000 is a smaller battery with less range. So why would you spend the extra $3,000? They just added that $45,000 because I can't imagine they're gonna get too many orders for that. Maybe as a fleet vehicle, but.

Lei Xing (16:41)
Yeah, which is the... Yeah. ‚Åì

So.

Tu Le (17:01)
I think they couldn't hit that $45,000 target, so they added this SKU, this low-end SKU to do that.

Lei Xing (17:08)
When the R2 was announced two years ago, this is our $45,000 But.

And that's the only thing that kind of turns me off a little bit. But I think it's a great option for the American consumers, other than Model Y, other than some of these other ones.

Tu Le (17:28)
There was only so much time that there was only so long that Tesla was going to have no competition, like actual products that were good because you could technically say they have competition currently, but the vehicles and the products aren't great relative to what Tesla has on offer from a tech stack. FSD alone is a reason to get into a Tesla.

Lei Xing (17:28)
I

Tu Le (17:56)
even if you think the interior is a little bit conservative. Yeah, exactly. I mean, I was one of them. I just wasn't ready to spend $8,000 on a lease vehicle that I wasn't sure I was going to keep. I'm all in on the US market. I'm not as confident in some of the legacy automaker products.

Lei Xing (17:58)
Case in point, case in point.

Tu Le (18:19)
because we've heard promises from them about, and in Ford's case, the UEV, I've read a lot about the Bolt recently, the updated Bolt, and that's gotten a lot of great reviews. It's a $30,000 car without any subsidies. And you and I have children or kids that are close to driving age. So...

The last thing I want is to give them a huge car so 18 of their friends can get in the car with them and distract them while they're driving. So I want something small and safe that will get them around because my oldest is going to be the Uber driver eventually for my youngest.

Lei Xing (19:04)
R2, I think everything looks great. Aside from kind of the pricing a bit, the car is great, the UI is great. I've test driven the R1S. It's a right size vehicle. I think the only thing left, that's the bottleneck, is manufacturing and production. They have the capacity, 150,000 capacity. How do they ramp to that volume, 100,000 units? I'm not even sure if they can get to 100,000 next year.

Tu Le (19:27)
Well, so normal actually has

200,000 units of capacity. So let's say 30, 40 R1s are annual sales, 30, 40,000. again, an R1 is $90,000, like $90,000. It's unbelievable.

Lei Xing (19:32)
Yeah. Right. So.

Tu Le (19:48)
High runner, the R2 is likely still over $50,000. It's not going to be the $40,000, $45,000. It's going to be likely the $53,000 trim package, which is still, again, over $50,000. And so it doesn't help bring down the average MSRP in the United States.

Lei Xing (20:05)
But the-

Well, the argument could also be made is $45,000 two years ago. Now they're $50,000 or more, maybe because of the inflation and all that's going on. Gas prices. It's, yeah.

Tu Le (20:26)
That is,

as adults Lei, as someone younger, my younger self, I didn't really pay attention to a lot of what was going on in the rest of the world until I moved to California and then moved to China. So I got a great grounding on what happens in the United States affects Europe, China, and vice versa.

And so the Iran war is really, it could be such a change agent for sentiment about gas powered cars, about all these things, because once we get over $3.50 close to $4 on gas price, we're gonna see a mass exodus likely of

Tahoe buyers, Expedition buyers, will they get into EVs or will they go into hybrids from the Koreans and the Japanese? Don't know. But we're still early into the Iran War and I'm hopeful and I'm sure you are too that it doesn't last very long. And we're kind of back to normal in the next 12, 14 months.

Lei Xing (21:31)
What?

It affects all of us, right? Everyday gas prices, flights.

We're just talking about it flights are the crisis going up by the hour

Tu Le (21:43)
and in.

Lei Xing (21:43)
I'm

glad I got my ticket to Beijing a couple of months ago for only RMB4,000.

Tu Le (21:48)
Well, if we think about it, lay. So.

Petrol and petroleum is used in plastics. And so it's not just gas, it's part component pricing that's going to change aluminum. I didn't realize this until Joe White told me that I think 20 % of our aluminum comes from there.

Lei Xing (22:00)
Yeah.

Tu Le (22:12)
some significant number comes from the Middle East because yeah, and so, and then that strait of Hormuz, 20 % of all the oil goes through that strait of the world's oil. So if you used to have a hundred units of capacity and you take out 20 units of capacity, that drives simple supply and demand.

You continue to have the same amount of demand and economics 101, what's gonna happen? The price is gonna go up. And not to mention just people in harm's way, that seems really tragic as well. Anyways, but what about Lucid?

Lei Xing (22:57)
Yeah, Lucid, mean, great. The fact that Rivian and Lucid on the same day are announcing their next generation of products, even if it's on paper, right? If it's on a PowerPoint. They're due. mean, the American consumers, they lack these affordable, what I call them tech forward, feature rich EVs. Competitive.

So the Earth and the other ones, but the Cosmos and one more are those that are coming probably next year, maybe or the year after. Still have to wait a bit. But on the other hand, think Lucid is betting on robotaxis as their additional revenue stream as a strategy.

Tu Le (23:31)
And I love that.

But I also

love the fact that Lucid and Rivian sit in such different positioning in the market. And I believe that their technology is pretty significant and can hold its own against the Chinese. But you had mentioned this earlier. Can they block and tackle? Can they build? Can they build at speed? Can they reduce their pricing?

as volume increases. These are all questions that need to be answered because up till now, Lucid and Rivian had had sales challenges. So look at NIO in the past, you and I, three, two, three, four years ago when we started this podcast, we questioned, they don't know how to sell cars. And with Rivian and Lucid, price is a big determinant of why they can't sell in volume. But part of

their responsibility is to get really good at manufacturing, even at smaller volumes, so they can drive some of that price down, drive some of that cost down, and then pass it on to consumers. But these MSRP's have kind of stayed the same with Rivian It's actually gone higher. And that's a little bit crazy. So Lucid's e-motors are great. I think the battery technology is pretty significant.

And Rivian is really leaning into its autonomy plus.

Lei Xing (25:00)
Yeah, same.

Lucid, I mean, they were going big on consumer level two, level three, level four. They have a roadmap, right? Of these vehicles that you can buy, similar to Xpeng, right? They're launching these Robo versions that you can buy that have L3 and L4 capability, as opposed to a robotaxi

So that's another bet. they're just doing what the Chinese have done, basically. Same for Volkswagen, we talked about earlier in the show, of this ID.UNYX 08. I mean, all of the specs and features are just following the Chinese, that they have to have them.

Tu Le (25:39)
I know we're jumping around a little bit, let me ask you, know, Leiter's comments about we're going to launch higher, higher price SKUs. Do you think that's a winning strategy for Porsche?

Lei Xing (25:48)
Portia.

Yeah, Michael Leiters is the new CEO of Porsche. Yeah. It's weird not seeing Oliver Blume front and center because he's been the CEO of Porsche since 2015. So it's a little bit weird and getting used to. well, their goal is actually to reduce SKU, right? But at the same time, go higher up.

Tu Le (25:54)
Started in January, started in January. He's ex-Porsche, he's ex-Porsche.

Lei Xing (26:18)
positioning wise. So another sports car model above the 911, something like that. Another SUV model above the Cayenne.

Tu Le (26:28)
Which is weird because the Cayenne EV is well over $100,000 MSRP. So.

Lei Xing (26:34)
Well, they can't go down. They can't have a one below 718. That's not gonna work. Cause they can't be profitable on that. So the only way to go is go up.

Tu Le (26:41)
Right.

If Porsche doesn't get its act together, they have probably five years in Europe. And then United States, they probably have five, six, seven years because of the Chinese, for sure.

Lei Xing (27:08)
And we just heard about Stellantis possibly offloading Maserati to possibly to one of these Chinese companies. BYD and Xiaomi are in the rumors.

Tu Le (27:08)
cuz

Thoughts on that?

That's the only way

this makes sense. Partnerships with Stellantis do not make sense to me because they have LeapMotor ‚Åì And they need to extract all the value they can from LeapMotor before they start partnering with another Chinese brand. So if this is XPeng and BYD kicking the tires on buying a European brand, all for it because Stellantis has too many. Would you agree with that?

Lei Xing (27:30)
Yeah.

Yeah, and at the same time, some of these Chinese companies have too many brands as well.

Tu Le (27:52)
Oh, for

sure. I've always talked about this where it's like, okay, we have a weak brand, a legacy brand that has a decent manufacturing footprint. Okay. Let's buy the brand and, and, and for the assets, not for the actual brand. but be careful of what you wish for because Maserati is an Italian brand. So.

That likely means Italian unions. Are the Chinese ready to deal with that kind of stuff? I would argue they don't want to deal with that stuff. Just like in the United States, they probably prefer to build outside of the Midwest where the UAW is very strong. if Stella Li also talked about BYD building in Canada, she doesn't want to partner, but if you build in Canada,

you're going to deal with the Canadian auto workers because we need to point down to Brazil and the challenges they had building that factory in Brazil in 2024. So there's going to be growing pains from these Chinese companies for sure. And in the China market, they can kind of brute force and force the corrections in place. But in Europe and

North America, United States in a few years, there's gonna be a lot of wheeling and dealing behind the scenes and then politicking in the media and in the public sphere to get people and folks on your side. And that's gonna be new to the Chinese players.

Lei Xing (29:25)
This year we can anticipate Stellantis, they're gonna have their what, general meeting or capital markets day or something coming up in a couple of months. They probably will make a decision. We may be seeing some announcement. The BYD Canada article news from Bloomberg about what they wanna do in Canada. We may be hearing some announcement this year.

welcoming red carpet rolls out for the Chinese EVs. And then end of this month, the Xi-Trump meeting. What comes out of that, given the current global mess that's happening?

Tu Le (30:03)
Well, there's a chance

that it doesn't happen, you know, because of the Iran war. I know the Chinese still wants Trump to visit, but...

Lei Xing (30:12)
Well, the foreign minister, Wang Yi, he said, we have to prepare thoroughly in advance for this to happen.

Tu Le (30:21)
And one thing I will say about the Canada ‚Åì thing, I spoke recently to David Kennedy from the Automotive News Toronto Bureau Chief, he said that they're trying to fast track home allegation in their Chinese brands actively talking to dealership groups, service ‚Åì companies. My guess is that we see

Lei Xing (30:40)
Sure.

Tu Le (30:45)
the Chinese vehicle on Canadian roads by the end of this year. And one of the biggest differences is that in 2026, there will be no cap on price. So it doesn't have to meet that $35,000 threshold. And that's not the MSRP, by the way, that's the landed ship costs. So

The Chinese can add margin to that, but there's going to be a limit grandfather in So 27, 28, 29, they'll be much more restrictive on that MSRP or that pricing, the landed cost. So it does create an opportunity for some of the more premium automakers to be aggressive and come early. think ZEEKR, think...

Lei Xing (31:12)
Sure.

Tu Le (31:36)
‚Åì BYD, Fang Cheng Bao Yang Wang because it's those three or four companies that have the capabilities, the capital to enter Canada.

Lei Xing (31:48)
Yeah,

well for Li Auto, mean, they're not gonna go to Canada most likely, not this year, but one of their biggest ‚Åì things revealed at the earnings call was their globalization kicks up a notch this year because out of those 400,000 some units target sales, I'd say a more significant portion are probably will be exported.

Tu Le (32:13)
So I get pictures from random people. They send me pictures of Chinese cars and there's some Li Autos in like Kazakhstan or some like these weird countries because they get them via gray market. And we always have to remember that that Li Auto, the L series vehicles are all EREV. So it makes a lot more sense for Li Autos.

Lei Xing (32:23)
Yeah. ‚Åì

Tu Le (32:35)
to be exported and used in foreign markets where they're not officially even entered yet, because you could just pour gasoline into the engine, whereas a battery electric vehicle, if you don't have grid, it makes a lot less sense to buy a vehicle that's not supported or officially entered into that market.

Lei Xing (32:41)
Mm-hmm.

All right, we're at 40 minutes.

Tu Le (32:55)
I don't really have anything

else, man. I had a long rant about the big SUV thing, so...

Lei Xing (32:58)
So I know, yeah.

Well, we talked about NIO, Li Auto this past week also were the annual press conferences from Volkswagen, BMW. Renault launched their futuREady strategy. And it's interesting that their CTO talked about the ACDC, which is the Advanced China Development Center. And the role that plays for a company like Renault.

which doesn't operate vehicle production and sales in China, but they depend China to develop their next generation of EV products at China's speed. So that's a very interesting tactic. If you want to call it a light asset model, that you still have to depend on China, even if you don't produce there. And that's the way that Renault has played it.

That was quite interesting. ‚Åì

Tu Le (33:52)
You know, one

thing that I think is really clear is that across the board whether it's through the media or official announcements, virtually every foreign automaker has either been in talks or have already partnered with a Chinese automaker outside of China.

We know that they have joint ventures in China, but virtually every automaker with the exception of GM. I haven't heard that many things about GM outside of the China market talking or kicking the tires, but

Lei Xing (34:27)
Mm-hmm.

Yeah.

Tu Le (34:32)
This tells you that the automakers realize how far behind they are. They're starting to realize how far behind they are. And this is likely the only strategy that will keep them from bottoming out in their most important markets, with the exception of the US.

Lei Xing (34:52)
And here's something that just happened,

So Geely's the G-ASD that they announced at the CES, now they just received a EU certification, which will be used and supplied into Geely, ZEEKR, LYNK & CO models in the European market. So that's an interesting thing because...

How do these Chinese tech go outside of China? That's one example. LIDARs, we talked about LIDARs, right? Rivian has been kind of mum on this RoboSense LIDAR. Nothing was talked about there. When does that happen? Lucid, right? Lucid uses RoboSense LIDAR.

Tu Le (35:35)
I actually wouldn't be surprised if Lucid

could license some of their technology, e-motor, battery technology, to some Chinese brands. I think Lucid's technology stack is pretty significant.

Lei Xing (35:49)
Likewise for NIO, They're proprietary e-motor, right? E-motors, right? They've iterated many generations. They're Shenji, they're launching a second generation, which is going to be a lower cost and they're looking for external customer. And those are in discussions. The 5nm chip, for ADAS

Tu Le (35:54)
Ian Motors,

Lei Xing (36:12)
Ugh.

Tu Le (36:13)
hot off the press Lei, BYD's, this is on car news China, our friend, Jiri BYD's new Fang Cheng Bao Ti3 launches with flash charging starting at $22,000.

Lei Xing (36:15)
Yeah.

Yeah, yeah,

it's one of the 11 that they announced a couple of weeks ago, right? So.

Tu Le (36:31)
Yes, so we can

get flash charging at $22,000. Beat that legacy auto.

Lei Xing (36:37)
You know, yeah,

this this charging, bickering and swapping between BYD and NIO are, I feel a little bit overblown because in the future, supposedly NIO can charge as much as they can at their own and also at BYD flash charging because they're open to other partners. And,

80 % or more of NIO's chargers are charging other brands. I think we often forget that NIO, they often stress that they are upgradable, swappable, chargeable. And I just wish like in the future, the BYDs can swap at NIO stations and NIOs can be charged at BYDs flash charging. This is my wishful thinking. I don't know about that.

Tu Le (37:23)
Yeah, I don't know if that's ever gonna

happen. Yeah, I don't think that's wishful, I think that's fantasy.

Lei Xing (37:28)
Why canopy? Fantasy.

Okay. Yeah. Sometimes I like to have fantasies.

Tu Le (37:38)
I think Tesla has a better

chance of adopting swapping than BYD does. So... Anyways.

Lei Xing (37:42)
Yeah. No, I mean, yeah.

Yeah, because

Li Bin, he's quite a few times on the record, he's like, no matter how fast you flash charge, you're not gonna beat a battery swap.

Tu Le (37:58)
So, ‚Åì

Now begins, starts anyways, our travel, heavy travel time for me. so I might be in DC in two weeks, then I'll be in San Francisco and then I'll be in Beijing. So anyways, I don't have anything else, man. I don't have any comments. There are no comments. So unless you have anything you want to talk about.

Lei Xing (38:23)
I don't know. It's a one today, quicker than the past ones. ‚Åì

Tu Le (38:26)
Yeah.

Everyone,

we will see you all next week. Same bat time, same bat channel. And hopefully, Lei will give us an update on his Model Y. ‚Åì

Lei Xing (38:38)
So

two weeks, the reverse. ‚Åì

Tu Le (38:39)
Did you buy a Tesla charger

yet?

Lei Xing (38:41)
All I need is a mobile connector.

Tu Le (38:43)
yeah, that's right. keep on forgetting you already have a charger. I'm sorry.

Lei Xing (38:44)
Yeah, I actually had

an electrician come over and assess and he said, you're all set. You just get a mobile connector and plug it into the 240 outlet.

Tu Le (38:54)
Okay. Got

it. Got it. Got it. Everyone. Good morning. Good afternoon. Good evening. We will talk with you all next week.

Lei Xing (39:03)
Bye.