1 00:00:05,125 --> 00:00:06,776 Good morning, Grid Connections listeners. 2 00:00:06,776 --> 00:00:16,625 We're joined again today by Tu Le, the founder of Sino Auto Insights, for a deep dive into China's EV dominance and the future of automotive autonomy. 3 00:00:16,665 --> 00:00:26,814 Unlike most analysts, Tu brings a unique perspective, growing up in Detroit, working in Silicon Valley, and then spending years in China, giving him unparalleled insight into the 4 00:00:26,814 --> 00:00:28,835 global automotive landscape. 5 00:00:29,016 --> 00:00:33,139 China's rise as the leader in electric vehicles didn't happen overnight. 6 00:00:33,307 --> 00:00:43,654 Tu unpacks how strategic government policies, relentless innovation and fierce market competition have propelled Chinese automakers years ahead of their Western counterparts. 7 00:00:43,775 --> 00:00:54,963 We explore the rapid acceleration of battery technology, the role of CATL and BYD in dominating global supply chains, and why Tesla's FSD rollout in China might be too little, 8 00:00:54,963 --> 00:00:56,104 too late. 9 00:00:56,124 --> 00:01:00,495 We also dig into the growing divide between Western and Chinese EV strategies. 10 00:01:00,495 --> 00:01:10,369 While US automakers are scaling back EV plans, China is pushing forward with ultra-fast charging, software-driven vehicles, and mass adoption of autonomy. 11 00:01:10,369 --> 00:01:14,091 Is the West falling behind in the next automotive revolution? 12 00:01:14,272 --> 00:01:22,858 Also want to keep up with Tu check out Sino Auto Insights along with his sub stack for his latest analysis and follow him on LinkedIn for real time updates. 13 00:01:22,858 --> 00:01:25,459 All of which can be found in today's show notes. 14 00:01:25,719 --> 00:01:31,864 This is an episode packed with insights for anyone curious about where the EV and autonomous driving industries are headed. 15 00:01:31,864 --> 00:01:39,600 If you find this conversation valuable, share it with someone who cares about the future of transportation and please leave us a review on your favorite podcast platform. 16 00:01:39,600 --> 00:01:47,384 It really helps us get out to more listeners so we can continue to bring on new guests and have new conversations like the ones we're having today. 17 00:01:47,464 --> 00:01:54,448 Finally, you can sign up for our new newsletter to stay up to date on the latest in electric vehicles, energy and policy. 18 00:01:54,447 --> 00:01:56,851 All of these can be found in today's show notes. 19 00:01:56,851 --> 00:01:59,895 Thanks for tuning in and with that, enjoy. 20 00:02:05,037 --> 00:02:06,952 Hey Chase, thanks for having me on again. 21 00:02:07,448 --> 00:02:15,234 So too, I think a lot of our listeners, mean, even if they're not familiar with the electric vehicle space, it's pretty hard to miss right now in the news. 22 00:02:15,715 --> 00:02:16,886 Chinese EVs. 23 00:02:16,886 --> 00:02:22,131 That's kind of like the looming thing in the automotive industry that I think is getting a lot of attention. 24 00:02:22,131 --> 00:02:24,672 We obviously have talked about with you for quite a while. 25 00:02:24,993 --> 00:02:35,112 just in case people aren't familiar, can you just, or not as in depth with the market or the current standing, you're the man that is always the one I go to for these kinds of 26 00:02:35,112 --> 00:02:35,992 insights. 27 00:02:35,992 --> 00:02:46,070 But for our listeners, could you just kind of start with maybe an overview of where the Chinese EV market is and how it is in the larger automotive landscape globally? 28 00:02:47,627 --> 00:03:01,344 Let me take two steps back and talk about the Chinese automotive market, historically in simple terms, and then move towards electric vehicles and clean energy vehicles. 29 00:03:01,465 --> 00:03:06,027 the Chinese automotive market is around 40 years old. 30 00:03:06,488 --> 00:03:11,650 Companies, Volkswagen, General Motors entered very early. 31 00:03:11,650 --> 00:03:16,673 Volkswagen entered in the late 80s, early 80s, I want to say, and then 32 00:03:16,673 --> 00:03:19,634 General Motors officially entered in 1998. 33 00:03:19,634 --> 00:03:21,875 They did that through joint ventures. 34 00:03:21,875 --> 00:03:26,638 Both of them happened to be joint ventures with SAIC or Shanghai Automotive. 35 00:03:26,638 --> 00:03:38,403 So China has what is called state-owned enterprises, meaning that provincial governments have shares of ownership in these companies. 36 00:03:38,403 --> 00:03:41,104 The largest are going to be F.A.W. 37 00:03:41,104 --> 00:03:42,625 First Automotive Works. 38 00:03:42,625 --> 00:03:47,107 They have joint ventures with Volkswagen and a couple of other foreign OEMs. 39 00:03:47,107 --> 00:03:50,868 And let me take two steps back before I continue. 40 00:03:51,029 --> 00:04:00,923 It was a requirement from the Chinese government that if a foreign automaker wanted to enter the China market back in the early or late nineties and early two thousands, that 41 00:04:00,923 --> 00:04:03,674 they needed to find a local joint venture partner. 42 00:04:03,674 --> 00:04:11,497 So when I talk about foreign automakers in China, they'll have one or two joint venture partners and F A W. 43 00:04:11,677 --> 00:04:15,759 is one of the largest SOEs or state-owned enterprises. 44 00:04:15,759 --> 00:04:19,962 Then you get into Dongfeng, Chang'an, SAIC. 45 00:04:19,962 --> 00:04:24,164 And Chang'an is based in Sichuan province. 46 00:04:24,164 --> 00:04:26,585 SAIC is obviously in Shanghai. 47 00:04:26,765 --> 00:04:33,299 And then some of these other acronyms, BAIC is Beijing Automotive, GAC is Guangzhou Automotive. 48 00:04:33,299 --> 00:04:41,723 So not super clever names, but think of these as conglomerates like a General Motors that has multiple brands under them. 49 00:04:42,133 --> 00:04:50,815 And there are technically only three privately held or public companies that aren't state owned. 50 00:04:50,815 --> 00:04:54,716 That's BYD, that's Great Wall Motors, and that's Geely. 51 00:04:54,716 --> 00:05:07,620 Now, that being said, their local governments, BYD is headquartered in Shenzhen, Geely is headquartered in Hangzhou, and Great Wall is just outside of Beijing. 52 00:05:07,620 --> 00:05:11,201 The local governments help them quite substantially. 53 00:05:12,033 --> 00:05:27,320 So the Chinese passenger vehicle market grew substantially from a base of zero to becoming the largest global market in 2009 overtaking the United States. 54 00:05:27,320 --> 00:05:31,061 They've been the number one passenger vehicle market since 2009. 55 00:05:31,061 --> 00:05:40,455 And it also happens to be the timeframe where the Chinese government took a step back and said, we're likely not. 56 00:05:40,577 --> 00:05:47,561 going to be able to build internal combustion engines as good as the Germans or as good as the Americans or the Japanese. 57 00:05:47,561 --> 00:05:49,842 So what do we see around the corner? 58 00:05:49,842 --> 00:05:53,964 What opportunities do we see around the corner to be leaders, global leaders? 59 00:05:54,024 --> 00:05:57,566 One of the areas was batteries, electric vehicle batteries. 60 00:05:57,566 --> 00:05:59,907 One of them was electric vehicles. 61 00:05:59,908 --> 00:06:08,525 And so starting in 2009, that's when the Chinese government allocated earmarked funding 62 00:06:08,525 --> 00:06:11,745 in subsidies into these sectors. 63 00:06:12,345 --> 00:06:21,505 And so the Chinese EV market has become an overnight success and it took about 15 years to do it. 64 00:06:21,505 --> 00:06:26,205 And so if we look at 2009, we fast forward to 2014. 65 00:06:26,205 --> 00:06:30,645 These are certain inflection points, again, because I'm oversimplifying what's going on. 66 00:06:30,645 --> 00:06:37,669 And let me say that I moved to Beijing in 2009. 67 00:06:38,153 --> 00:06:43,944 I originally grew up in Pontiac, Michigan, automotive is like breathing to me. 68 00:06:43,944 --> 00:06:49,097 It's something that I know, something that is very, very close, very personal to me. 69 00:06:49,218 --> 00:06:57,921 And did automotive for a few years before moving out to Silicon Valley for seven years, and then moving to Beijing in 2009. 70 00:06:57,921 --> 00:07:05,804 And so one of the first cars that I got into as a taxi when I was in China was a BYD. 71 00:07:05,804 --> 00:07:07,565 And my initial thought... 72 00:07:07,565 --> 00:07:13,285 with my Detroit automotive hat on in 2009 is, wow, what a POS. 73 00:07:14,425 --> 00:07:21,105 And now BYD is the third largest brand in the world. 74 00:07:21,105 --> 00:07:31,625 So we can talk about that in a second, but getting back to 2014, Tesla enters, starts importing Model Ss and Model Xs into China. 75 00:07:31,825 --> 00:07:34,125 And a company named NIO, 76 00:07:34,125 --> 00:07:44,585 a company named XPeng, a company named Li Auto, they all in and around 2014 and 2015 are founded by technology entrepreneurs in China. 77 00:07:44,725 --> 00:07:51,785 Now that's going to be important because it's those three companies that are now publicly traded in the US. 78 00:07:51,985 --> 00:07:54,025 So that's why I bring them up. 79 00:07:54,025 --> 00:08:02,825 But if we go from 2014 to 2018, 2017, we're still seeing electric vehicle companies struggle. 80 00:08:03,821 --> 00:08:11,861 And this was around the time where Tesla engaged with the city of Shanghai to build Shanghai Giga. 81 00:08:12,541 --> 00:08:18,041 And they made an announcement a year later, the factories turning out vehicles. 82 00:08:19,181 --> 00:08:23,361 How quickly that came about should not be underestimated. 83 00:08:23,361 --> 00:08:31,561 The level of cooperation needed for a foreign company to be able to move so quickly in China was unprecedented, number one. 84 00:08:31,561 --> 00:08:33,727 Number two, what makes this 85 00:08:33,727 --> 00:08:37,940 Shanghai Giga specials that Tesla owns it outright. 86 00:08:38,881 --> 00:08:41,263 yes, no need for a joint venture now. 87 00:08:41,824 --> 00:08:45,267 And the first vehicle was a Model 3. 88 00:08:45,267 --> 00:08:49,050 I think it rolled off in December of 2019. 89 00:08:49,050 --> 00:08:50,391 So effectively 2020. 90 00:08:50,391 --> 00:08:57,097 And up until that point, the Neos and Ekipons were struggling with solvency. 91 00:08:57,097 --> 00:08:59,339 They were close to bankruptcy. 92 00:08:59,339 --> 00:09:02,295 The electric vehicle market hadn't really 93 00:09:02,295 --> 00:09:07,830 picked up the way the Chinese government thought it would, despite the subsidies. 94 00:09:07,830 --> 00:09:14,875 And so it took Tesla to come in, a foreign brand to come in to really create that excitement. 95 00:09:14,875 --> 00:09:25,603 And it was 2020 where electric, so there is a term that the Chinese government uses, new energy vehicle or NEV. 96 00:09:25,824 --> 00:09:32,365 What it means is it's battery electric plus plug-in hybrid or PHEV plus fuel cell electric. 97 00:09:32,365 --> 00:09:33,745 which is hydrogen. 98 00:09:33,745 --> 00:09:36,445 Now the hydrogen is more or less a rounding error. 99 00:09:36,445 --> 00:09:42,245 So the bulk of sales is still battery electric and plug-in hybrid or PHEV. 100 00:09:42,245 --> 00:09:45,565 And in 2020, that number reached one and a half million. 101 00:09:45,565 --> 00:09:48,365 In 2021, it reached three and a half million. 102 00:09:48,365 --> 00:09:51,245 2022, it reached six and a half million. 103 00:09:52,825 --> 00:09:56,005 2023, it reached eight and a half last year. 104 00:09:56,005 --> 00:09:58,765 In 2024, it's around 11 million. 105 00:09:59,185 --> 00:10:00,621 Last year, 106 00:10:00,621 --> 00:10:04,321 Total passenger vehicle sales in China was about 24 million. 107 00:10:04,481 --> 00:10:07,281 So the take rate was close to 48%. 108 00:10:07,281 --> 00:10:11,681 One out of every two cars in China is an NEV. 109 00:10:11,681 --> 00:10:17,861 Now the split between battery electric and plug-in hybrid is like 60-40. 110 00:10:17,861 --> 00:10:21,801 So 60 % battery electric, 40 % plug-in hybrid. 111 00:10:21,901 --> 00:10:28,357 But the growth rate of plug-in hybrids was year over year plus 80%. 112 00:10:29,227 --> 00:10:37,680 So more more Chinese consumers are looking at plug-in hybrids as an alternate to battery electric. 113 00:10:37,680 --> 00:10:42,271 Now, a lot of things, what's that movie? 114 00:10:42,271 --> 00:10:44,982 Everything All at Once happened. 115 00:10:44,982 --> 00:10:47,502 Charging infrastructure was put in place. 116 00:10:47,502 --> 00:10:52,184 Battery capacity for supplying the electric vehicles was put in place. 117 00:10:52,184 --> 00:10:55,225 And this is over that 15-year time span. 118 00:10:56,479 --> 00:10:59,991 In 2009, you never heard of a company called CATL. 119 00:10:59,991 --> 00:11:03,212 Most Americans never heard of a company called BYD. 120 00:11:03,212 --> 00:11:12,957 Now, not only are they globally well known, but BYD is the leader in multiple things. 121 00:11:12,957 --> 00:11:15,858 And one of them is battery manufacturing. 122 00:11:15,858 --> 00:11:23,161 Between CATL and BYD, they control around 52 % global market share for batteries. 123 00:11:23,437 --> 00:11:26,569 And BYD supplies them to Ford in China. 124 00:11:26,569 --> 00:11:28,220 They supply them to Tesla. 125 00:11:28,220 --> 00:11:31,561 So it's not a like for like. 126 00:11:31,561 --> 00:11:38,365 These Chinese companies only supplying to Chinese, these Chinese battery companies only supplying to Chinese OEMs. 127 00:11:38,365 --> 00:11:46,509 As a matter of fact, CATL probably supplies batteries to almost every foreign automaker in the China market. 128 00:11:46,509 --> 00:11:47,369 So 129 00:11:49,549 --> 00:11:58,889 Despite all you hear about these subsidies and how these companies aren't really competitive, let me tell you it's the exact opposite. 130 00:11:59,049 --> 00:12:06,209 Bloomberg in a recent article said that there are about 150 Chinese electric vehicle brands in the China market. 131 00:12:06,389 --> 00:12:14,069 Famously, in 2022, Tesla kicked off a price war that's still going on. 132 00:12:14,069 --> 00:12:16,289 Recently, it's three-year anniversary. 133 00:12:17,869 --> 00:12:21,841 Does that give you good idea of kind of how... 134 00:12:21,841 --> 00:12:25,003 overview of where things are right now. 135 00:12:25,103 --> 00:12:25,874 and I think it's great. 136 00:12:25,874 --> 00:12:37,612 You mentioned the price war because I feel like we had, we also had the price war come here and obviously in the U S domestic market, it's a little bit more, I mean, it is 137 00:12:37,612 --> 00:12:44,296 protected, but it's a much smaller amount of different vehicles that the choose, the consumer can choose from anyway. 138 00:12:44,737 --> 00:12:49,220 And I think it's really interesting looking at how. 139 00:12:49,474 --> 00:12:51,555 that price war kind of happened. 140 00:12:51,966 --> 00:12:59,511 and it's still going on to an extent, but it seems like in a lot of ways, Tesla did kind of win that for quite a while. 141 00:12:59,572 --> 00:13:05,176 And there are some, some of the other you've used were able to kind of get around that by just really pushing leases. 142 00:13:05,176 --> 00:13:10,680 And obviously Tesla's even doing that too, to try and help with that kind of buying price and ongoing price. 143 00:13:10,680 --> 00:13:16,982 But it's really interesting hearing, I think we've even talked about this before in another episode where 144 00:13:16,982 --> 00:13:20,113 In China, Tesla isn't really looked at. 145 00:13:20,293 --> 00:13:30,756 It's it has a positive brand image, but it's not quite the same here as in America and parts of Europe, where it's looked more as this kind of like tech leading leader in the 146 00:13:30,756 --> 00:13:32,757 autonomous and EV space. 147 00:13:32,757 --> 00:13:41,829 It's more looked at as like comparatively what we would think of as the Toyota here domestically as it's like, it's not the sexiest, it's not going to be the on the bleeding 148 00:13:41,829 --> 00:13:45,230 edge, but it's going to be a pretty reliable, safe and 149 00:13:45,230 --> 00:13:56,881 great option if you just want a well-known brand and you don't have to deal with too many of some of the issues you might run into with a newer brand in the Chinese market. 150 00:13:56,881 --> 00:14:02,006 Is that still accurate or have there been any trends come around that that you've noticed? 151 00:14:03,917 --> 00:14:17,753 So Tesla still has some brand cachet, but they've been propping up sales through price cuts for the last several years because the Model 3, there's a small refresh, the same one 152 00:14:17,753 --> 00:14:23,425 that the rest of world got, a light refresh for the Model 3 in the China market. 153 00:14:23,425 --> 00:14:31,688 And we're expecting Juniper, the refresh for the Model Y, to start being delivered later this month. 154 00:14:31,869 --> 00:14:32,789 So... 155 00:14:33,057 --> 00:14:41,021 But before those minor refreshes, the three and the Y were four, three years old in the market. 156 00:14:41,242 --> 00:14:49,506 And in the China market, if you're not refreshing every six to nine months, you're going to get left behind. 157 00:14:50,026 --> 00:15:02,261 But to be clear from a volume standpoint, it's really BYD who sells hundreds of thousands of units a month and a Tesla that sells 158 00:15:02,261 --> 00:15:09,305 or produces, let's say 75, know, 75 to 65,000 units a month. 159 00:15:09,305 --> 00:15:19,711 Most of those are consumed domestically, let's say 40 to 50,000, and they'll ship the rest of those out as exports to Japan, to Korea, to Australia, to the UK. 160 00:15:20,752 --> 00:15:26,295 That is becoming more of a challenge for them because of Berlin Giga. 161 00:15:26,295 --> 00:15:28,716 And so they're really... 162 00:15:29,527 --> 00:15:37,359 going to have to realign their manufacturing footprint depending on where they see demand popping up. 163 00:15:37,478 --> 00:15:49,983 And the Juniper Refresh for the Model Y, it doesn't move the needle in the China market because there are so many other competitors. 164 00:15:50,363 --> 00:15:58,245 take it from me who've driven dozens of these cars and remember in the back of your mind that I'm a Detroit guy. 165 00:15:59,365 --> 00:16:04,288 driven a lot of American and German and Japanese and Korean vehicles as well. 166 00:16:05,449 --> 00:16:11,422 These are some of the coolest cars that you'll clean energy vehicles notwithstanding. 167 00:16:11,422 --> 00:16:14,433 These are some of the coolest cars full stop. 168 00:16:15,294 --> 00:16:23,998 Now, they don't have particular features for Americans because they're sold in China now. 169 00:16:24,939 --> 00:16:28,671 that being said, the China market 170 00:16:28,684 --> 00:16:43,304 90 % or a ridiculous percentage, let's say well over 80 % of the market vehicles are sold below 200,000 RMB or about $30,000. 171 00:16:43,304 --> 00:16:47,604 90 % of all vehicles sold in China are below $30,000. 172 00:16:47,604 --> 00:16:55,644 So if you want to compete in that space, BYD is the 800 pound gorilla. 173 00:16:55,800 --> 00:16:56,237 Yeah. 174 00:16:56,237 --> 00:17:01,797 I had mentioned that about 4.3 million cars were sold by BYD in 2024. 175 00:17:01,797 --> 00:17:04,904 90 % of those were consumed domestically. 176 00:17:05,305 --> 00:17:11,220 But BYD is getting very, very strong and bullish in foreign markets. 177 00:17:11,220 --> 00:17:15,774 They're currently shipping their vehicles in over 95 markets. 178 00:17:16,154 --> 00:17:19,717 And last week, they made a... 179 00:17:21,293 --> 00:17:23,013 They had a mic drop moment. 180 00:17:23,013 --> 00:17:29,433 Wang Chuang Fu, who's the founder CEO of BYD, they had a tech day. 181 00:17:29,493 --> 00:17:46,493 And he said that he is going to offer intelligent driving, let's say level two plus in 21 of his vehicles, so almost every vehicle that they sell for free as standard. 182 00:17:46,653 --> 00:17:50,881 And this is why, while in the United States, 183 00:17:50,881 --> 00:17:54,662 Tesla sells FSD for $8,000. 184 00:17:54,662 --> 00:17:59,999 GM, Ford, they also sell as a subscription fee, intelligent driving. 185 00:17:59,999 --> 00:18:03,171 So GM has super cruise, Ford has blue cruise. 186 00:18:03,171 --> 00:18:08,495 Stellantis just announced that they're going to have intelligent driving in their vehicles. 187 00:18:08,696 --> 00:18:19,404 But this throws a huge monkey wrench into everyone's future services revenue that they're projecting. 188 00:18:20,651 --> 00:18:35,169 The reason I say that the BYD announcement is significant is because they're likely to sell over five million cars this year, number one, and they're in 100 countries this year. 189 00:18:35,169 --> 00:18:42,123 So their reach is unmatched in the clean energy vehicle space. 190 00:18:42,508 --> 00:18:52,732 Now I know there's quite a few different topics we want to get to today, but one thing I didn't want to kind of just explore a little bit more is with how much time have you been 191 00:18:52,732 --> 00:19:01,536 able to drive BYD's level two systems and how do you see that kind of compared to others on the market? 192 00:19:03,985 --> 00:19:11,525 So in the United States specifically, are, like I had mentioned, GM has a version. 193 00:19:11,525 --> 00:19:12,985 I've tried that. 194 00:19:12,985 --> 00:19:14,725 Blue Cruze, I haven't tried. 195 00:19:15,125 --> 00:19:17,545 I have a Hyundai, so I tried that. 196 00:19:17,545 --> 00:19:18,505 terrible. 197 00:19:19,185 --> 00:19:22,425 Tesla's FSD is pretty decent. 198 00:19:23,345 --> 00:19:26,211 And then Mercedes, go ahead. 199 00:19:26,211 --> 00:19:33,844 this out was just, one of the things that was really interesting with this announcement was a lot of people were not sure how it compare. 200 00:19:33,844 --> 00:19:39,386 obviously this a little specific to Tesla, but like, is it comparative to like Tesla's just free autopilot? 201 00:19:39,386 --> 00:19:41,707 So they're trying to be competitive there, or is it. 202 00:19:41,907 --> 00:19:47,410 Does it have the potential to actually be much more of not just like a highway, ADAS assist system? 203 00:19:47,410 --> 00:19:53,972 Is it the real thing that would actually be a competitor to like Tesla's full self-driving or some other autonomous system? 204 00:19:54,359 --> 00:19:56,670 So here's the thing, Chase. 205 00:19:56,670 --> 00:20:00,571 There's just not a ton of competition in the United States to push FSD. 206 00:20:00,571 --> 00:20:06,412 Okay, so number one, they market it, wink, wink, as this almost self-driving. 207 00:20:06,412 --> 00:20:10,753 Okay, they can't say self-driving because, yeah. 208 00:20:11,014 --> 00:20:20,816 And so in China, most, EV makers have a pretty robust intelligent driving system. 209 00:20:20,816 --> 00:20:22,637 So it's not unique. 210 00:20:23,403 --> 00:20:37,859 I'll give you a, instance, in April of last year, I drove a Xplong G9 with my cohost for the podcast, 1500 miles from Beijing to Shenzhen, and 90 % of the miles we used there are 211 00:20:37,859 --> 00:20:39,479 level two plus system. 212 00:20:40,040 --> 00:20:44,101 And it worked really amazingly. 213 00:20:44,402 --> 00:20:53,575 And in the China market, in the U S market, you hear about FSD, you hear about Super Cruise, you hear about Blue Cruise, and then you hear about Waymo. 214 00:20:53,805 --> 00:20:57,107 So there's robotaxi companies and there's intelligent driving. 215 00:20:57,127 --> 00:21:08,934 In China, because there's so many more competitors, we're seeing a convergence where robotaxi companies are partnering with OEMs so that their hardware can be on more 216 00:21:08,934 --> 00:21:11,415 vehicles. 217 00:21:11,696 --> 00:21:12,953 Hardware and software. 218 00:21:12,953 --> 00:21:14,593 and not, sorry, not to interrupt you. 219 00:21:14,593 --> 00:21:22,955 I think part of the reason I wanted to kind of pull this back to is since we're both in the industry, we know level two, level three, level four, level five, yada, yada, yada 220 00:21:23,136 --> 00:21:28,057 outside of like, and even in some parts of automotive people don't really know the difference. 221 00:21:28,057 --> 00:21:36,999 And so I do really think it's interesting domestically that it's kind of become, this is a highway self-driving system or like how it's positioned to the consumer. 222 00:21:37,100 --> 00:21:38,404 And you're, totally right. 223 00:21:38,404 --> 00:21:49,524 In the us we kind of in some cities we have waymo we had cruise and then tesla's trying to launch its own version of the full self-driving that can do all of this not just the the 224 00:21:49,524 --> 00:22:00,044 highway stuff Yeah, correct, correct later this year they're planning to do it in austin i'm among other cities I believe but it's it's interesting where I think for a lot of 225 00:22:00,044 --> 00:22:00,324 people. 226 00:22:00,324 --> 00:22:00,944 Yeah, they realize. 227 00:22:00,944 --> 00:22:07,862 Oh, it's just a highway assist thing Whereas this is actually going much further in a kind of a further step that I don't think 228 00:22:07,862 --> 00:22:09,413 A lot of consumers fully appreciate it. 229 00:22:09,413 --> 00:22:18,408 Obviously you just don't see here domestically everything that the consumer can buy really outside of the Tesla thing is mostly highway based versus like this can drive in cities 230 00:22:18,408 --> 00:22:23,420 and all these other options that really make it much more of an actually autonomous vehicle. 231 00:22:24,247 --> 00:22:28,180 Full self-driving in the United States operates in a gray area. 232 00:22:28,281 --> 00:22:43,834 And I would say that intelligent driving on the highway is probably generally pretty good for most intelligent driving systems. 233 00:22:43,834 --> 00:22:52,545 But yes, it is city driving that where you're dealing with pedestrians, you're dealing with bicycles, you're dealing with delivery vehicles. 234 00:22:52,545 --> 00:22:54,646 That is more complicated. 235 00:22:55,847 --> 00:23:06,993 companies tend to be more careful when launching intelligent driving in city situations, unless your name is Tesla, then we're beta testers for them. 236 00:23:08,385 --> 00:23:21,801 And again, I can't name too many competitors because FSD is almost like this full system that can turn on at any time, okay, during the driving situation. 237 00:23:22,057 --> 00:23:25,540 In with GM, you have to be on a highway. 238 00:23:25,540 --> 00:23:28,262 You have to be going at least 55 miles an hour. 239 00:23:28,262 --> 00:23:29,322 Yes. 240 00:23:29,322 --> 00:23:36,647 And so there's these very, very specific situations where you can utilize it. 241 00:23:36,647 --> 00:23:47,415 And with regards to level two, level three, level four, and then ultimately level five, the easiest way to explain it to your audience that aren't that familiar with it, Chase, 242 00:23:47,415 --> 00:23:50,897 is level two is I can get sued. 243 00:23:51,007 --> 00:23:52,658 if I get into a car accident. 244 00:23:52,658 --> 00:23:55,758 Level three is the car company will get sued. 245 00:23:57,539 --> 00:24:07,102 The responsibility and liability moves from the owner to the car OEM when it goes from level two to level three. 246 00:24:07,102 --> 00:24:19,717 That's why Tesla's lawyers told Elon to shut up because he was saying all these things when technically they have to say that 247 00:24:19,717 --> 00:24:22,520 FSD or full self-driving is level 2 plus. 248 00:24:22,520 --> 00:24:25,923 Now, I'm gonna be quite honest with you Chase. 249 00:24:25,923 --> 00:24:32,663 I don't know what the difference between autopilot and full self-driving is, but people are paying $8,000. 250 00:24:32,663 --> 00:24:41,620 I kind of make the analogy that it yeah, I make the analogy It is it's free but it's more like a highway thing at best where it's it's like adaptive cruise control plus. 251 00:24:41,620 --> 00:24:41,911 Yeah 252 00:24:41,911 --> 00:24:47,621 get it simpler, but FSD could charge $8,000 for FSD. 253 00:24:47,780 --> 00:24:50,360 totally and I don't want to make too much time about this and I think you're right. 254 00:24:50,360 --> 00:24:58,540 The big point is that it's interesting that there's a Chinese company that does have a similar software stack that they're now comparative to Tesla's high-end option that 255 00:24:58,540 --> 00:24:59,900 they're now offering. 256 00:25:00,100 --> 00:25:07,840 That's true domestically that in the US that's just not something we have and the alternatives we have work. 257 00:25:07,840 --> 00:25:11,842 But like I said, I think my biggest issue I've talked to a lot of other people have driven those is 258 00:25:11,842 --> 00:25:21,631 When it's only on certain maps, I guess I go to a lot of rural places and the speed limit can still be 65 and you can use those systems or those systems won't turn on. 259 00:25:21,631 --> 00:25:24,603 Maybe you have like adaptive cruise control and that's about it. 260 00:25:24,884 --> 00:25:26,986 And so exactly. 261 00:25:26,986 --> 00:25:36,014 And so, if you live in the city, if you're along a big quarter, you probably will never know the distance, the difference, but it's an interesting delineation that obviously you 262 00:25:36,014 --> 00:25:38,382 don't deal with, as much like 263 00:25:38,382 --> 00:25:47,150 The Chinese companies aren't approaching like it is a much higher level experience with how they're looking at the autonomy services of this is just like, now this, isn't just 264 00:25:47,150 --> 00:25:47,921 going to do highway. 265 00:25:47,921 --> 00:25:49,813 It's going to be able to be capable of all these things. 266 00:25:49,813 --> 00:25:55,168 And the law of the legacy automakers have kind of struggled to get competitive in that area. 267 00:25:55,168 --> 00:26:01,233 Now it's become clear with a lot of these systems, whether it be cruise Argon, allow them going away. 268 00:26:01,233 --> 00:26:04,236 It seems like the legacy automakers want nothing to do with it. 269 00:26:05,096 --> 00:26:13,189 And even some of the startups have kind of I mean Tesla obviously they're kind of doing their own thing Rivian and lucid are kind of all over the place Rivian's trying to like 270 00:26:13,189 --> 00:26:22,842 catch up with some of stuff but a pretty still mostly highway based system and even a lot of their stuff's at least for now they're planning to change it mapped only but I think 271 00:26:22,842 --> 00:26:31,384 it's just a really interesting dynamic where the Chinese EV companies are really leaned in and know this won't just be a highway focusing and maybe that's just me 272 00:26:31,524 --> 00:26:32,455 I think it's really interesting. 273 00:26:32,455 --> 00:26:35,877 Like when you say something's level two, level three, you're right. 274 00:26:35,877 --> 00:26:43,092 It moves the, blunder, I guess, legal blame to where it can go, but something could be level three. 275 00:26:43,178 --> 00:26:49,944 even though the car is responsible, the car could be responsible on a highway in stop and go from zero to 35 miles an hour. 276 00:26:49,944 --> 00:26:55,131 And that's level three versus what I think when someone hears that they think, the car would just drive itself. 277 00:26:55,131 --> 00:26:56,562 And I'm completely off hands. 278 00:26:56,562 --> 00:26:59,574 And I think that's where it's just like really weird thing is like, okay. 279 00:26:59,660 --> 00:27:03,040 I could have this car from zero to 35 miles an hour on a highway. 280 00:27:03,040 --> 00:27:06,836 I don't have to worry about, but the incident hits 36 and I have to take back over now. 281 00:27:06,836 --> 00:27:09,608 I'm I'm legally responsible again. 282 00:27:10,270 --> 00:27:13,292 and I think it's this kind of like weird. 283 00:27:13,893 --> 00:27:23,992 It has to be all or nothing before it goes from like a safety highway feature to like a truly autonomous thing for the average consumer to fully appreciate and understand, I 284 00:27:23,992 --> 00:27:25,523 guess is where I'm going with this. 285 00:27:26,564 --> 00:27:35,584 And I think it's just so fascinating that the Chinese automakers are really leaned into like the potential where the automotive industry is going globally, what this could unlock 286 00:27:35,584 --> 00:27:38,084 by saying like, no, this isn't just going to be a highway. 287 00:27:38,084 --> 00:27:40,892 This is going to be we want this to do everything. 288 00:27:42,845 --> 00:27:47,347 And a quick negative trivia. 289 00:27:47,728 --> 00:27:51,950 It was actually Honda that launched Level 3 first. 290 00:27:52,030 --> 00:27:53,928 They were the first OEM to launch Level 3. 291 00:27:53,928 --> 00:27:59,453 And to your point, you could use it during traffic jams in Tokyo. 292 00:27:59,835 --> 00:28:04,477 So when the vehicle is going slower than, I want to say, 40 kilometers an hour. 293 00:28:04,477 --> 00:28:11,019 And a couple of other points that I'll make with regards to the 294 00:28:11,019 --> 00:28:13,410 the intelligent driving. 295 00:28:14,210 --> 00:28:20,853 I might not have mentioned this, last year, I think I did 24 million cars. 296 00:28:20,893 --> 00:28:26,916 So people talk about data kind of using data to train your algorithm. 297 00:28:26,916 --> 00:28:27,295 Okay. 298 00:28:27,295 --> 00:28:39,340 Now there's a new form of AI called inference that I think uses less data, but I think by and large, it's still about servers and about collecting data. 299 00:28:39,381 --> 00:28:40,971 So if 300 00:28:41,215 --> 00:28:45,628 of passenger vehicle market has 24 million units that they sell every year. 301 00:28:45,628 --> 00:28:52,672 It's still pretty much the only Western or let's say only mature market that's still growing. 302 00:28:52,672 --> 00:28:58,675 could see 27, 28 million units in China before the end of the decade. 303 00:28:59,115 --> 00:29:09,837 so if data is really important and competition breeds innovation and caps pricing, then 304 00:29:09,837 --> 00:29:21,602 China has a clearer path towards wide adoption of autonomy and intelligent driving, especially now that BYD is offering it free on its vehicles. 305 00:29:21,602 --> 00:29:36,178 So one of the things that I think is really important to note about the BYD and offering it free, when they enter Western markets, it's a slow roll for them because they need to 306 00:29:36,178 --> 00:29:39,469 create brand awareness, build trust. 307 00:29:39,765 --> 00:29:51,731 and understand the pricing schemes because in mature markets, let's say Western, and we'll use Europe as an example, there are already established brands that have a lot of trust. 308 00:29:51,752 --> 00:29:59,516 The ABB or Audi, BMW, Benz that will likely be much tougher to steal away initially. 309 00:29:59,916 --> 00:30:09,031 when they enter emerging markets like a Thailand, like a Brazil, they be in Mexico, they become the number one brand, EV brand very quickly. 310 00:30:09,343 --> 00:30:10,393 Okay. 311 00:30:10,394 --> 00:30:20,478 And these countries, these emerging markets might not have on their radar using intelligent driving in vehicles. 312 00:30:20,478 --> 00:30:30,782 But what if BYD now offers that standard and they convince the Mexican government, you know, if you use this feature, you could save lives. 313 00:30:31,563 --> 00:30:32,163 Okay. 314 00:30:32,163 --> 00:30:37,605 And so why that is why BYD's 315 00:30:37,825 --> 00:30:42,926 announcement was so significant is because we use this word democratize. 316 00:30:42,926 --> 00:30:48,588 It's trying to democratize intelligent driving systems. 317 00:30:48,848 --> 00:30:58,971 And Wang Chuanfu during his speech, he said that we're going to make it like you having airbags and a seatbelt. 318 00:30:58,971 --> 00:31:02,231 That's how that's how ubiquitous they want to make it. 319 00:31:02,432 --> 00:31:05,412 And how do you compete with freight? 320 00:31:06,393 --> 00:31:07,693 Especially 321 00:31:07,805 --> 00:31:24,380 If the system becomes globally competitive, because to answer your earlier question, Chase, I've tried with the exception of Huawei system and BYD system, I've tried just 322 00:31:24,380 --> 00:31:27,230 about every intelligent driving system in China. 323 00:31:27,511 --> 00:31:33,252 And I've ridden in most of the robo taxis in China from most of the different brands. 324 00:31:33,252 --> 00:31:36,373 And so this is where I'm probably 325 00:31:36,581 --> 00:31:40,686 one of 50 people that have done this in the world. 326 00:31:41,187 --> 00:31:42,700 So I'd like to think 327 00:31:42,700 --> 00:31:48,340 out talking outside of China about this on any sort of serious like knowledge about it. 328 00:31:48,555 --> 00:31:58,628 Well, and the cool thing is I was in LA for the Motor Show and I got in a Waymo in San Francisco and I got in it in LA. 329 00:31:58,628 --> 00:32:02,369 And up until that point, I'd only ridden in cruise. 330 00:32:02,369 --> 00:32:06,210 right now, and I plan to be in China in April. 331 00:32:06,210 --> 00:32:13,292 So I'll test all these Robotex, or I'll try all these Robotex again, because they've updated their software, obviously. 332 00:32:13,292 --> 00:32:18,033 And so I still think currently Waymo is the best. 333 00:32:18,465 --> 00:32:23,193 robotaxi experience in the world. 334 00:32:23,235 --> 00:32:25,108 Does that change when I go back to China? 335 00:32:25,108 --> 00:32:28,795 We'll see, but I was really, really impressed with Wayne. 336 00:32:29,358 --> 00:32:33,017 Yeah, I've taken quite a few in the Phoenix area and. 337 00:32:34,484 --> 00:32:36,328 It's interesting I. 338 00:32:37,868 --> 00:32:42,421 I don't want to compare like Tesla's FSD to it, but I've been trying it on a hardware for car. 339 00:32:42,421 --> 00:32:53,407 And it's in my experience, if I, if I knew that the liability was with the car and not me, it drives better than most duper drivers in my experiences. 340 00:32:53,407 --> 00:32:54,458 It's so much smoother. 341 00:32:54,458 --> 00:33:00,562 Whereas while the Waymo is a true wire, like a taxi where it's no longer on you. 342 00:33:00,562 --> 00:33:04,642 I did a ride with my wife and our, my in-laws and 343 00:33:04,642 --> 00:33:08,103 The way the wheel does kind the robotic jerkiness of like making the turn. 344 00:33:08,103 --> 00:33:10,254 They did not like it at all. 345 00:33:10,254 --> 00:33:15,875 And there's been a couple of times we've gone into Tesla that had the hardware for their latest hardware, the latest FSD. 346 00:33:15,875 --> 00:33:20,516 And once again, it's technically not self-driving, but it's just so fascinating to me. 347 00:33:20,516 --> 00:33:24,335 And I haven't experienced it, but looking at some of the Chinese ones, I'm really cute. 348 00:33:24,335 --> 00:33:31,920 We'll have to have you back on after you go to China in April, but the difference in the experience as a rider with that kind of like jerkiness. 349 00:33:31,926 --> 00:33:43,702 in not only the decision making, also like just seeing the steering wheel and it's really hard to explain, but like now having driven quite a bit on the hardware for of a Tesla, it 350 00:33:43,702 --> 00:33:49,526 is in my opinion, much better than most Uber drivers I've had in a long time. 351 00:33:49,526 --> 00:33:53,948 Now, once again, I it's really weird because it is truly apples and oranges. 352 00:33:54,268 --> 00:34:01,922 And I'm sure Waymo and these others will catch up, but it's it's wild that we live in a time now how quickly these are updating. 353 00:34:01,922 --> 00:34:07,834 that I'm really curious to hear what your experience will be in April, because I've got a feeling it will be much more like that, where it is a much smoother and just like 354 00:34:07,834 --> 00:34:09,354 consistent experience. 355 00:34:09,354 --> 00:34:12,375 And I realized we didn't want to talk about this the whole time. 356 00:34:12,375 --> 00:34:15,256 So I want you to say your point real quick. 357 00:34:15,256 --> 00:34:18,767 I think we can talk about the Tesla FSD launching in China. 358 00:34:18,767 --> 00:34:21,008 And I'm really curious to your thoughts on that. 359 00:34:21,008 --> 00:34:24,099 then we need to get to some of this other stuff. 360 00:34:24,099 --> 00:34:24,729 this is the problem. 361 00:34:24,729 --> 00:34:26,180 We could easily talk about this all day too. 362 00:34:26,180 --> 00:34:27,700 This way it's so fun with you. 363 00:34:28,215 --> 00:34:36,169 So really quickly, I understand completely because I felt a little bit queasy in early iterations. 364 00:34:36,169 --> 00:34:39,331 But I'll give you an example of Baidu. 365 00:34:39,331 --> 00:34:51,818 The first time I wrote into Baidu, was very jerky, Like abruptly breaking and then very hesitant, like a little bit indecisive, but also like it kind of quickly made a decision 366 00:34:51,818 --> 00:34:52,348 finally. 367 00:34:52,348 --> 00:34:57,161 then, but six months later I jump in. 368 00:34:57,161 --> 00:35:00,324 A software update later, two software updates later, and guess what? 369 00:35:00,324 --> 00:35:04,777 Now it's easing into the stop and it's much more human-like. 370 00:35:04,777 --> 00:35:08,970 And that was my experience with Waymo in November. 371 00:35:09,251 --> 00:35:20,941 So that's why I said, because now it's apples and oranges because LA and San Francisco versus Beijing traffic, completely different. 372 00:35:20,941 --> 00:35:26,865 I think most people in the West would pull their hair out, pull their hair out. 373 00:35:26,985 --> 00:35:39,986 if they had to drive in Asia traffic, not just China traffic, Asia traffic and more like Southeast Asia traffic, Thailand traffic, Vietnam traffic, because little motorbikes are 374 00:35:39,986 --> 00:35:40,887 weaving in and out. 375 00:35:40,887 --> 00:35:45,776 You have these three wheeled delivery vehicles that are all over the place as well. 376 00:35:45,776 --> 00:35:54,696 of I haven't spent much time there, but I've been to town in a couple others and it's just like Southeast Asia I haven't been to India but from everything I've seen it's like nine 377 00:35:54,696 --> 00:36:05,696 tenths of that and it is just even that's so wild and a whole different metric for self-driving like to see autonomy play in that space is I think like the final level and 378 00:36:05,696 --> 00:36:15,180 then the other thing is as someone who's driven quite a bit on Like English B roads these very tight very fast country roads 379 00:36:15,180 --> 00:36:25,263 is a whole nother level where you could be coming around a blind corner and then there's a like two story tall combine doing 60 miles an hour because that's the speed limit. 380 00:36:25,703 --> 00:36:30,284 so it is just it's it's wild to see how much still has to be done. 381 00:36:30,284 --> 00:36:39,427 But like you're saying like, because I've driven the Tesla FSD more recently than the way but who knows maybe I go on a waymo next week or even this week, and it would be just as 382 00:36:39,427 --> 00:36:39,887 good. 383 00:36:39,887 --> 00:36:42,058 And it's just wild how quickly this progresses. 384 00:36:42,058 --> 00:36:43,968 I'm really fascinated to hear what your 385 00:36:44,002 --> 00:36:46,377 what your experience will be when you're in April. 386 00:36:46,551 --> 00:36:48,863 I think really quickly and then we'll move to something else. 387 00:36:48,863 --> 00:36:56,178 can move to something else, like as quickly as the software is updated is as quickly as things can improve. 388 00:36:56,279 --> 00:37:04,945 And in an analog world where the automotive refreshes happen once a year, a major refresh happens once every four or five years. 389 00:37:05,069 --> 00:37:12,192 In a digital world, over the year updates happen in real time every few weeks. 390 00:37:12,192 --> 00:37:14,403 And so you could see rapid improvement. 391 00:37:14,403 --> 00:37:14,845 Yeah. 392 00:37:14,845 --> 00:37:17,273 over the course of just several weeks. 393 00:37:18,308 --> 00:37:30,993 when I think this is just something that's so interesting, with really just domestically the EV startup companies, Tesla, Rivian, Lucid, Tesla and Rivian especially, and then the 394 00:37:30,993 --> 00:37:42,028 Chinese automakers where there is this electric vehicle software user defined vehicle first experience, as you always say, that fit kind of automatically fit really well with 395 00:37:42,028 --> 00:37:45,990 autonomy, but then all these other more user focused services, 396 00:37:47,458 --> 00:37:54,635 And then I guess real quickly with Tesla literally today now saying that they're going to open up FSD and launch that in China. 397 00:37:54,956 --> 00:37:56,287 What are your thoughts about that? 398 00:37:56,287 --> 00:38:04,064 And how do you see that as, especially now with BYD can offering their service to the intelligent driving for free. 399 00:38:04,717 --> 00:38:10,379 So the FSD that Tesla is offering in China is not full FSD. 400 00:38:10,379 --> 00:38:12,559 It's very, very light. 401 00:38:12,659 --> 00:38:19,561 And they emphasize that the driver still needs to be actively participating. 402 00:38:20,641 --> 00:38:23,733 And so it's day one. 403 00:38:23,733 --> 00:38:28,394 We've already started to see, at least on Chinese social media, I've already started to see some videos. 404 00:38:28,394 --> 00:38:32,405 But I think... 405 00:38:32,851 --> 00:38:40,163 If they're being objective, they'll tell you, mean, Tesla will tell you that it doesn't measure up to what the Chinese have in the market. 406 00:38:40,163 --> 00:38:45,644 And one of the major players that I think is really important to point out in the China market is Huawei. 407 00:38:45,905 --> 00:39:02,049 They have HEMA, which is a consortium of partners, OEM partners that they have, that they have, that they're using Huawei's hardware software stack to become 408 00:39:02,143 --> 00:39:08,595 a connected vehicle service provider, intelligent vehicle service provider. 409 00:39:08,695 --> 00:39:18,057 And so in many circles, Huawei, the Huawei system is the best in China. 410 00:39:18,077 --> 00:39:25,329 I haven't experienced it, but people I trust who have tried it are very impressed. 411 00:39:25,329 --> 00:39:28,450 this is, this is the thing, Chase. 412 00:39:28,450 --> 00:39:32,041 It's not about FSD not being as good. 413 00:39:32,735 --> 00:39:42,515 It's about their FSD is really good, but it's about their competitors in China being as good or almost as good. 414 00:39:42,515 --> 00:39:44,714 So there's not a huge Delta. 415 00:39:44,714 --> 00:39:55,762 there there's that and then there's also the liability of who does it fall to and do you find that do you think a lot of it as to you mentioned and obviously it's really early to 416 00:39:55,762 --> 00:40:03,408 tell but the difference in FSD being not as good partially due to just local driving 417 00:40:05,482 --> 00:40:14,664 unique kind of rules rules of the road and just it being such a new system to China or any other insights around that that you can share or just overall you think. 418 00:40:14,664 --> 00:40:22,270 it's not going to be as good because they can't send the Chinese data to the United States. 419 00:40:22,852 --> 00:40:23,692 Right. 420 00:40:23,692 --> 00:40:29,232 That and that's a, that's a great thing to pull out or call out is just the fact that it does have to stay. 421 00:40:29,332 --> 00:40:37,472 And that's part of the reason allegedly that it's taken so long to launch over there too, was that China required that the data stay in China. 422 00:40:37,472 --> 00:40:42,472 So they have to do a lot of the stuff, especially around some of these AI things that they're trying to do has to stay in China. 423 00:40:42,472 --> 00:40:43,492 And you're right. 424 00:40:43,492 --> 00:40:47,872 The likelihood of it being able to scale as fast probably is unlikely. 425 00:40:48,992 --> 00:40:50,533 But just 426 00:40:50,533 --> 00:40:51,110 they're a business. 427 00:40:51,110 --> 00:40:56,578 we've seen with how much of the AI hardware and infrastructure they have on this side, at least. 428 00:40:56,909 --> 00:40:58,489 There's business challenges, right? 429 00:40:58,489 --> 00:41:02,649 That have nothing to do with policy or anything. 430 00:41:02,989 --> 00:41:08,029 Because year over year 2024, growth was flat. 431 00:41:08,229 --> 00:41:20,029 So if they're not growing, they're not adding significantly more FSD potential buyers or subscribers to their system and network. 432 00:41:20,829 --> 00:41:23,449 and that again, that's not a government thing. 433 00:41:23,449 --> 00:41:24,789 That's a Tesla. 434 00:41:24,789 --> 00:41:25,975 I'm not. 435 00:41:25,975 --> 00:41:28,546 competitive in the market thing. 436 00:41:29,006 --> 00:41:40,371 And what we're seeing is Elon's entry into European politics, specifically in Germany, France, we're seeing the Tesla sales dip quite significantly. 437 00:41:40,631 --> 00:41:44,893 And so is that a trend that is going to continue? 438 00:41:44,893 --> 00:41:46,254 Hard to tell. 439 00:41:46,254 --> 00:41:54,751 How the things to keep an eye out for for Tesla, how is Juniper going to be received in the China market? 440 00:41:54,751 --> 00:42:00,585 It'll get a sales bump for Tesla, but how long without sales bump last? 441 00:42:00,906 --> 00:42:07,430 And they have something, guess, begrudgingly they can call FSD lite. 442 00:42:07,591 --> 00:42:21,841 But if it's not competitive with everybody else, number one, and if it costs much more than everybody else, number two, it's dead on arrival. 443 00:42:22,052 --> 00:42:23,072 For sure. 444 00:42:23,112 --> 00:42:28,092 And then once again, you also have where the liability falls longer term and that stuff. 445 00:42:28,092 --> 00:42:34,352 So yeah, I realized we kind of went a little bit longer on that topic than we'd originally planned, but I really do appreciate your thoughts on this too. 446 00:42:34,352 --> 00:42:39,672 Um, but let, let's kind of move domestically and look at where things are. 447 00:42:39,672 --> 00:42:45,752 I mean, I know you went to CES, you've already been to the Detroit auto show this year, like kicking off 25. 448 00:42:45,752 --> 00:42:50,020 mean, I think we last talked in September, obviously there's the 449 00:42:50,020 --> 00:42:52,460 political changes that have happened domestically. 450 00:42:52,460 --> 00:43:01,820 But I just be kind of curious with what you're seeing already, like starting at CES with some of the companies we've seen kind of take a step back from not just autonomy, but 451 00:43:01,820 --> 00:43:08,460 especially electric vehicle sales in general or electric vehicle offerings in general domestically. 452 00:43:08,460 --> 00:43:13,200 And what you're seeing and how you're kind of, what your take is on all of this. 453 00:43:14,647 --> 00:43:22,267 So CES has become the de facto US auto show. 454 00:43:24,545 --> 00:43:26,449 The things that's... 455 00:43:27,032 --> 00:43:27,486 Go ahead. 456 00:43:27,486 --> 00:43:29,947 That's the consumer electronic show. 457 00:43:30,007 --> 00:43:35,411 Traditionally a big tech laptop, more of a computer realm. 458 00:43:35,411 --> 00:43:44,997 And it's really within the last five, maybe a decade ago it started, but yeah, but really within like the last five years, especially, and maybe a little before that, it's really 459 00:43:44,997 --> 00:43:53,933 become much more automotive focus with some of this in autonomy, but really just the electrification and, addition of software layers, but sorry, just for anyone listening, 460 00:43:53,933 --> 00:43:54,914 you give that context. 461 00:43:54,914 --> 00:43:57,636 you a little, let me give your audience a little bit of further background. 462 00:43:57,636 --> 00:44:12,866 So, Apple, Steve Jobs, when Steve Jobs was alive, they would always do, Mac, Mac world in January and the WWDC in September Mac world went away, but Apple still has the WWDC, which 463 00:44:12,866 --> 00:44:14,987 is the worldwide developers conference. 464 00:44:15,088 --> 00:44:21,892 And then they also started doing one-off events to launch products. 465 00:44:21,892 --> 00:44:22,433 Okay. 466 00:44:22,433 --> 00:44:23,145 So. 467 00:44:23,145 --> 00:44:32,750 Steve and Apple, with the help of some other technology companies, really, really didn't want to share the spotlight at CES with other companies. 468 00:44:32,751 --> 00:44:38,474 And so you started to see Tesla also having their own events. 469 00:44:38,734 --> 00:44:50,441 Cybertruck Day or whatever, when they launched the Cybertruck and they have Battery Day, they have AI Day, and all the other car companies really also started to... 470 00:44:50,541 --> 00:44:52,561 not want to share the spotlight. 471 00:44:52,561 --> 00:45:01,481 And with Zoom and with being able to broadcast digitally globally, it became much cheaper to do this. 472 00:45:01,581 --> 00:45:12,781 so unfortunately for the Detroit Auto Show, there's not a ton of automakers that are unveiling anything or doing anything significant. 473 00:45:13,161 --> 00:45:20,333 And as a kid who probably from the age of five to 23, 24 years old, 474 00:45:20,333 --> 00:45:27,693 didn't miss the Detroit Auto Show and thought it was the coolest, coolest thing in the world when I was younger. 475 00:45:27,693 --> 00:45:29,653 It's a shell of itself. 476 00:45:30,333 --> 00:45:34,733 And I would much prefer to... 477 00:45:34,733 --> 00:45:37,873 So a quick story. 478 00:45:37,993 --> 00:45:45,673 I took the red-eye Thursday night from Vegas to arrive in Detroit at 5.30 a.m. 479 00:45:45,673 --> 00:45:47,813 so I could hit media day. 480 00:45:48,191 --> 00:45:58,124 in Detroit for the auto show and I was so disappointed and after the media events I went to the floor and cars and carpet. 481 00:45:58,124 --> 00:46:04,173 That's what they were saying because it's just cars on carpet and I walked around the show. 482 00:46:04,173 --> 00:46:06,646 It took me about an hour and a half. 483 00:46:07,586 --> 00:46:08,667 And I was done. 484 00:46:08,667 --> 00:46:11,487 There were no new cars to really see. 485 00:46:11,487 --> 00:46:17,869 There's a couple of concepts that I hadn't seen before, but CES I was walking. 486 00:46:17,869 --> 00:46:20,370 20,000 steps. 487 00:46:20,950 --> 00:46:31,505 for those folks that were tracking CES, the two biggest in the automotive space, the two biggest booths were the Honda booth, because they unveiled two vehicles and the Zekr and 488 00:46:31,505 --> 00:46:32,755 the Zekr booth. 489 00:46:32,755 --> 00:46:35,676 Zekr is a Geli brand. 490 00:46:36,537 --> 00:46:44,220 and they're very they have products that they're now selling in Europe. 491 00:46:44,540 --> 00:46:47,117 And what's the 492 00:46:47,117 --> 00:46:51,317 The common thread for Zika in the United States is they're a contract manufacturer for Waymo. 493 00:46:51,317 --> 00:46:54,857 So they're helping Waymo build their robotaxis. 494 00:46:56,077 --> 00:46:58,817 But Zika had a press event. 495 00:46:58,817 --> 00:47:01,357 It was oversubscribed, standing remotely. 496 00:47:01,357 --> 00:47:12,157 I was lucky enough, I was sitting next to Bill Russo and he and I were chatting about this because obviously we go way back from the China days and he was at CES. 497 00:47:12,157 --> 00:47:14,437 He traveled over to go to CES. 498 00:47:14,437 --> 00:47:16,337 It was really great to see him. 499 00:47:17,417 --> 00:47:30,949 the number of jaws being dropped because of the announcements that Bill and I had already known, and then going to the actual booths, seeing the vehicles, and more importantly, 500 00:47:30,949 --> 00:47:44,749 seeing the expressions, hearing what people were saying, and them then finding out how much those vehicles cost in China and being amazed at what you can buy. 501 00:47:44,749 --> 00:47:49,469 for 40, 50, 60,000 US dollars in China. 502 00:47:51,429 --> 00:47:56,209 It's just, that's what we're missing. 503 00:47:56,209 --> 00:48:13,909 Now, as a Michigander, as a fan of the D2, D3, however you wanna call it, these tariffs, they're here for a reason, because these Chinese brands are pretty serious. 504 00:48:14,269 --> 00:48:19,200 And you also talk to McElroy a lot, and he's seen these cars. 505 00:48:19,200 --> 00:48:22,671 He's driven these cars, Sandy Monroe. 506 00:48:22,871 --> 00:48:27,973 So if you don't believe me, believe those guys who are legends in the industry. 507 00:48:27,973 --> 00:48:33,814 They know what they're talking about, have no reason to mislead. 508 00:48:34,194 --> 00:48:39,036 These cars are ready, and they could be sold in the United States tomorrow. 509 00:48:40,276 --> 00:48:43,917 So as a consumer, I don't want to 510 00:48:43,917 --> 00:48:49,617 to spend $50,000 on 2020 technology. 511 00:48:52,317 --> 00:48:56,577 But in all fairness, that's what we're seeing. 512 00:48:56,577 --> 00:49:06,737 And back to Wang Trump Fu, he said during an interview after that press event, he said that generally Chinese brands are about three to five years ahead of their foreign 513 00:49:06,737 --> 00:49:07,877 counterparts. 514 00:49:08,017 --> 00:49:09,985 And I think he's being kind. 515 00:49:09,985 --> 00:49:10,275 yeah. 516 00:49:10,275 --> 00:49:23,813 And I, I know we've had this really be an autonomy focused conversation, but I think the big news that more automotive, EV focused some, a niche of a niche, EV focused automotive 517 00:49:23,813 --> 00:49:33,207 journalists really talk about the difference being between the Chinese vehicles and domestically electric, the domestic electric vehicles and European ones too, is the 518 00:49:33,207 --> 00:49:37,410 charging rates that you're just seeing with some of these Chinese batteries. 519 00:49:37,410 --> 00:49:38,220 mean, 520 00:49:38,620 --> 00:49:49,493 Obviously Tesla uses I know C a T L's LFP battery and I think a couple other Chinese made lithium packs and even though the batteries are smaller because the chemistry and the way 521 00:49:49,493 --> 00:50:01,536 they're made by these with the setup they can charge even faster and have a better charging curve further into the pack and It's really interesting to me. 522 00:50:01,536 --> 00:50:07,436 I think that the tariffs and a lot of these things were talking about have a lot of clear 523 00:50:07,436 --> 00:50:15,989 Motivation to try and stop some of the Chinese EV makers from coming and offering or making it much more difficult and try and get some of that money to stay in the US and 524 00:50:15,989 --> 00:50:26,322 create jobs but around the battery side we've already had a couple of Chinese like Battery manufacturers look and try to build factories here and the Delta and the technology there 525 00:50:26,322 --> 00:50:34,788 is pretty shocking I think no pun intended where I think it what is it the golden Zika battery or something charges from like 526 00:50:34,788 --> 00:50:43,744 10 to 80 percent I think someone tested it in 10 minutes and then 10 to 120, 22 minutes and it's a big pack. 527 00:50:43,744 --> 00:50:45,216 It's got plenty of range. 528 00:50:45,216 --> 00:50:51,345 Yeah, I mean it's at the point where it's like who cares about stopping a gas station fast. 529 00:50:51,345 --> 00:50:55,057 might not want to sit in the car because it might be like super like radio. 530 00:50:55,057 --> 00:50:56,328 I'm just joking. 531 00:50:56,548 --> 00:50:58,279 But like, holy cow, right? 532 00:50:58,279 --> 00:51:00,230 Like it is like. 533 00:51:00,230 --> 00:51:02,811 But a lot of that. 534 00:51:02,811 --> 00:51:09,365 So you're you're effectively referring to some of the features of these vehicles. 535 00:51:09,365 --> 00:51:12,076 400 volt, 800 volt. 536 00:51:12,197 --> 00:51:20,781 And then on top of that, you're looking at charging infrastructure from each of these brands that support that 800 volt. 537 00:51:20,781 --> 00:51:28,101 system in order to get to the 0 to 80 in 10 or 11 minutes. 538 00:51:28,361 --> 00:51:31,021 OK, and so that's also what I'm talking about. 539 00:51:31,021 --> 00:51:43,661 Like these features, they become qualifiers so quickly, but they're not differentiators because of the ultra competitiveness in these markets. 540 00:51:43,661 --> 00:51:49,685 If you're not updating your architecture to take on fast charging, ultra fast charging, 541 00:51:49,685 --> 00:51:53,126 man, you quickly leave this game. 542 00:51:53,126 --> 00:52:01,558 But one of the things that I think is also really important is that the United States does have different use cases. 543 00:52:01,558 --> 00:52:06,420 People do tow boats and trailers and things like that. 544 00:52:06,420 --> 00:52:07,750 Not many. 545 00:52:07,750 --> 00:52:10,091 It's not like every person. 546 00:52:10,091 --> 00:52:17,733 I mean, there's more soccer mimes and tajos by themselves in metro Detroit than you could shake a stick at. 547 00:52:18,347 --> 00:52:23,500 So is it necessary to have a freaking huge Tahoe if you're a family of three? 548 00:52:23,500 --> 00:52:26,421 Maybe not, but whatever's whatever. 549 00:52:28,943 --> 00:52:35,246 But in China, so a particular example is Neo. 550 00:52:35,647 --> 00:52:41,330 They're the ones that have become synonymous with battery swapping. 551 00:52:41,330 --> 00:52:44,632 But Neo, it's not an either or. 552 00:52:44,873 --> 00:52:46,163 You can swap. 553 00:52:46,419 --> 00:52:50,173 Or you can, and I won't say or. 554 00:52:50,375 --> 00:52:59,166 You can swap and you can ultra fast charge because the architecture and the battery pack supports that. 555 00:52:59,948 --> 00:53:03,869 And so that's where it's really interesting. 556 00:53:03,869 --> 00:53:07,260 that I know and I it's it's interesting because it's moved outside of China. 557 00:53:07,260 --> 00:53:14,653 There's quite a few places in Europe now that Neo has even battery swapping locations and. 558 00:53:15,674 --> 00:53:22,426 There's some really cool things to that, but it part of my engineering brain is always kind of like, well, that's more parts. 559 00:53:22,426 --> 00:53:25,027 That's more points of failures, yada, yada, yada, yada. 560 00:53:25,738 --> 00:53:31,148 more products you have to make and all this stuff to have that battery swapping functionality, but. 561 00:53:31,148 --> 00:53:33,039 It's clearly gone down to a point anyway. 562 00:53:33,039 --> 00:53:42,151 And then depending on how you price the vehicle, you can price it like they were kind of separate of the battery pack and bring the cost of the vehicle down lower. 563 00:53:42,471 --> 00:53:51,294 Are you still seeing how I mean, I haven't really heard too much actually about the battery swapping growth. 564 00:53:51,294 --> 00:53:51,784 I don't know. 565 00:53:51,784 --> 00:53:53,274 Is that still something you're hearing a lot? 566 00:53:53,274 --> 00:54:00,156 I'm hearing more about the charging rates increasing so fast that in some ways that gets around the heavy 567 00:54:00,216 --> 00:54:04,063 I mean, it's already capital intensive to build charging stations. 568 00:54:04,063 --> 00:54:08,991 Building a battery swap charging station is even more capital intensive. 569 00:54:09,774 --> 00:54:13,630 What trends are you, are there any trends around that you're seeing that are really interesting? 570 00:54:14,071 --> 00:54:22,005 So the basics of battery swapping, needs to be, the swapping stations need to be highly utilized, okay? 571 00:54:22,005 --> 00:54:24,245 Just like charging infrastructure. 572 00:54:24,526 --> 00:54:30,668 In order to get a return on that investment, you need to use them quite often. 573 00:54:34,270 --> 00:54:38,912 so, swapping lends to cities that have millions of people. 574 00:54:39,712 --> 00:54:41,665 So it... 575 00:54:41,665 --> 00:54:45,297 Does it make sense for a European city with 200,000 people? 576 00:54:45,297 --> 00:54:50,290 Maybe not, unless there's a high penetration rate by by Neo. 577 00:54:50,290 --> 00:54:50,950 Okay. 578 00:54:50,950 --> 00:54:57,994 If there's a lot of buyers of Neo in a population of 200,000 people, then maybe having a couple of swapping stations make a ton of sense. 579 00:54:58,074 --> 00:54:58,524 Okay. 580 00:54:58,524 --> 00:55:10,733 But in general, when I lived in, I had 20 plus million neighbors when I lived in Beijing, I had 20. 581 00:55:10,733 --> 00:55:14,073 223 plus million neighbors when I lived in Shanghai. 582 00:55:14,752 --> 00:55:19,893 In Tokyo, if you think about greater Tokyo, we're talking 30, 40 million people. 583 00:55:19,913 --> 00:55:27,113 So Asian cities are just wired differently and are completely different than European and American cities. 584 00:55:27,853 --> 00:55:39,313 Now, would swapping just from a number of people standpoint, it might make sense in New York, it might make sense in LA, but it might not make sense in Detroit because Detroit is 585 00:55:39,313 --> 00:55:40,557 700,000 people. 586 00:55:40,557 --> 00:55:43,537 You know, and so that's one thing. 587 00:55:43,537 --> 00:55:47,317 The next thing is creating a standard. 588 00:55:47,437 --> 00:55:55,817 So chase motors and two motors, we each have our own swapping standard that creates costs for each of us separately. 589 00:55:55,877 --> 00:55:56,837 OK. 590 00:55:56,837 --> 00:56:02,497 And so in order for me to get utilization rates high on my swapping, I need some more vehicles. 591 00:56:02,497 --> 00:56:10,677 But if chase motors licenses their technology, their swapping technology to me or we standardize the battery pack. 592 00:56:11,627 --> 00:56:17,105 Then multiple brands can take advantage of a single swapping station. 593 00:56:17,105 --> 00:56:19,788 And that's what we're starting to see in China. 594 00:56:20,269 --> 00:56:22,793 They're trying to create a standard. 595 00:56:22,793 --> 00:56:28,354 NIO is trying to convince other automakers to use their swapping stations and their IP. 596 00:56:28,354 --> 00:56:31,385 And that does seem to always because I mean, they're not the first to have done it. 597 00:56:31,385 --> 00:56:34,986 Obviously tested Tesla tested barely. 598 00:56:34,986 --> 00:56:40,548 But even before them was the original, which was better place in Israel was like the original to do it. 599 00:56:40,548 --> 00:56:43,948 But part of the scaling issue was exactly that was this. 600 00:56:44,309 --> 00:56:54,692 Especially when the industry was so young then like how one, there was like one other electric car out there, but two, it's like what, how do you get the right standard? 601 00:56:54,692 --> 00:56:56,032 Then do you need 602 00:56:56,300 --> 00:57:04,123 Multiple types of batteries for like a small crossover versus a larger SUV and then how many of these batteries can you store at each of these? 603 00:57:04,463 --> 00:57:06,104 Location I don't know. 604 00:57:06,104 --> 00:57:15,008 I think it's a really fascinating and obviously there's some really cool Functionality from a service standpoint just having it so you can always get a battery pack out real 605 00:57:15,008 --> 00:57:16,618 quick and work on it, but 606 00:57:16,897 --> 00:57:24,023 And this is where, we broaden that conversation out, Chase, look at fleet vehicles, right? 607 00:57:24,023 --> 00:57:27,726 So fleet vehicles lend themselves to swapping. 608 00:57:27,927 --> 00:57:39,716 Commercial vehicles could lend themselves to swapping because if you're on a construction site and there's a lot of digging, I'm just making this up because I'm not a huge 609 00:57:39,716 --> 00:57:43,759 construction guy, but if there are big loaders, right? 610 00:57:44,100 --> 00:57:45,466 And you needed to work. 611 00:57:45,466 --> 00:57:53,888 the EV size Milwaukee electric packs you can start putting in into your work site truck? 612 00:57:53,888 --> 00:57:56,010 But I mean, kind of seriously, yeah. 613 00:57:56,119 --> 00:58:01,012 because it would allow you to have utilization rates much higher, right? 614 00:58:01,012 --> 00:58:05,955 And so again, swapping is this, yeah, yeah. 615 00:58:05,955 --> 00:58:13,628 And swapping is a success story in China and swapping on the moped side is a success story in Taiwan. 616 00:58:15,530 --> 00:58:21,555 whether it works in Europe or the United States or North America is still 617 00:58:21,555 --> 00:58:29,771 up for debate, if I'm an OEM, yes, if I'm an OEM, I'm kicking the tires, at least. 618 00:58:29,812 --> 00:58:34,295 And there's a company in San Francisco that you should follow called Ample. 619 00:58:35,657 --> 00:58:37,498 They're doing battery swapping. 620 00:58:37,679 --> 00:58:43,103 And so they're trying to sign up some OEMs. 621 00:58:43,243 --> 00:58:50,487 And guess what, man, if there are some brands that get desperate enough, you better believe they'll try to differentiate themselves or 622 00:58:50,487 --> 00:58:55,711 try to save costs through these partnerships or these different types of opportunities. 623 00:58:55,711 --> 00:59:02,947 So Ample, I was told, is gaining some traction in Japan. 624 00:59:03,948 --> 00:59:10,473 So maybe Ample does well in markets outside of the United States for the time being. 625 00:59:13,006 --> 00:59:20,429 Well, too, I realize we've kind of gone a little bit over time and I, I, I, which I always feel like is what happens when I have you on. 626 00:59:20,429 --> 00:59:22,150 so we, have to have you on again soon. 627 00:59:22,150 --> 00:59:24,351 There's always so many different things happening. 628 00:59:24,351 --> 00:59:27,302 And, I just want to say thank you for sharing this. 629 00:59:27,302 --> 00:59:33,925 realized this became a little more autonomy heavy than we planned, but, we'll have to have you back on, after your trip in April. 630 00:59:33,925 --> 00:59:35,606 So safe travels. 631 00:59:35,606 --> 00:59:36,486 We'll talk to you soon. 632 00:59:36,486 --> 00:59:38,087 And thank you so much for coming on today. 633 00:59:38,087 --> 00:59:41,608 And for anyone listening, obviously we'll have links to all the two. 634 00:59:42,168 --> 00:59:46,844 work with SinoAuto Insights and much more and links to your new sub stack, right? 635 00:59:46,844 --> 00:59:49,622 Along with you even have some upcoming events. 636 00:59:50,029 --> 01:00:02,671 Sure, I'll be at South by Southwest and I'm hosting a discussion on March 11th for those that are going to be specifically at the Midwest house in South by Southwest. 637 01:00:02,671 --> 01:00:04,713 So look for us there. 638 01:00:04,713 --> 01:00:07,197 yeah, man, thanks for having me on. 639 01:00:12,322 --> 01:00:14,743 That's a wrap for this episode of Grid Connections. 640 01:00:14,743 --> 01:00:20,504 Huge thanks to Tu Le for joining us and sharing his deep knowledge on the future of electric vehicles and autonomy. 641 01:00:20,504 --> 01:00:29,867 If you enjoyed this conversation, help us spread the word, share this episode with a friend and leave a review and subscribe to our newsletter for even more industry insights. 642 01:00:30,007 --> 01:00:31,057 Want to keep up with Tu Le? 643 01:00:31,057 --> 01:00:40,706 Check out Sino Auto Insights along with the Substack for his latest analysis and follow him on LinkedIn for real time updates, all of which can be found in today's show notes. 644 01:00:40,706 --> 01:00:43,846 Until next week, this is the Grid Connections podcast signing.