Good morning, Grid Connections listeners.
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.
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
global automotive landscape.
China's rise as the leader in electric vehicles didn't happen overnight.
Tu unpacks how strategic government policies, relentless innovation and fierce market competition have propelled Chinese automakers years ahead of their Western counterparts.
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,
too late.
We also dig into the growing divide between Western and Chinese EV strategies.
While US automakers are scaling back EV plans, China is pushing forward with ultra-fast charging, software-driven vehicles, and mass adoption of autonomy.
Is the West falling behind in the next automotive revolution?
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.
All of which can be found in today's show notes.
This is an episode packed with insights for anyone curious about where the EV and autonomous driving industries are headed.
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All of these can be found in today's show notes.
Thanks for tuning in and with that, enjoy.
Hey Chase, thanks for having me on again.
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.
Chinese EVs.
That's kind of like the looming thing in the automotive industry that I think is getting a lot of attention.
We obviously have talked about with you for quite a while.
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
insights.
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?
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.
the Chinese automotive market is around 40 years old.
Companies, Volkswagen, General Motors entered very early.
Volkswagen entered in the late 80s, early 80s, I want to say, and then
General Motors officially entered in 1998.
They did that through joint ventures.
Both of them happened to be joint ventures with SAIC or Shanghai Automotive.
So China has what is called state-owned enterprises, meaning that provincial governments have shares of ownership in these companies.
The largest are going to be F.A.W.
First Automotive Works.
They have joint ventures with Volkswagen and a couple of other foreign OEMs.
And let me take two steps back before I continue.
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
they needed to find a local joint venture partner.
So when I talk about foreign automakers in China, they'll have one or two joint venture partners and F A W.
is one of the largest SOEs or state-owned enterprises.
Then you get into Dongfeng, Chang'an, SAIC.
And Chang'an is based in Sichuan province.
SAIC is obviously in Shanghai.
And then some of these other acronyms, BAIC is Beijing Automotive, GAC is Guangzhou Automotive.
So not super clever names, but think of these as conglomerates like a General Motors that has multiple brands under them.
And there are technically only three privately held or public companies that aren't state owned.
That's BYD, that's Great Wall Motors, and that's Geely.
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.
The local governments help them quite substantially.
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.
They've been the number one passenger vehicle market since 2009.
And it also happens to be the timeframe where the Chinese government took a step back and said, we're likely not.
going to be able to build internal combustion engines as good as the Germans or as good as the Americans or the Japanese.
So what do we see around the corner?
What opportunities do we see around the corner to be leaders, global leaders?
One of the areas was batteries, electric vehicle batteries.
One of them was electric vehicles.
And so starting in 2009, that's when the Chinese government allocated earmarked funding
in subsidies into these sectors.
And so the Chinese EV market has become an overnight success and it took about 15 years to do it.
And so if we look at 2009, we fast forward to 2014.
These are certain inflection points, again, because I'm oversimplifying what's going on.
And let me say that I moved to Beijing in 2009.
I originally grew up in Pontiac, Michigan, automotive is like breathing to me.
It's something that I know, something that is very, very close, very personal to me.
And did automotive for a few years before moving out to Silicon Valley for seven years, and then moving to Beijing in 2009.
And so one of the first cars that I got into as a taxi when I was in China was a BYD.
And my initial thought...
with my Detroit automotive hat on in 2009 is, wow, what a POS.
And now BYD is the third largest brand in the world.
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.
And a company named NIO,
a company named XPeng, a company named Li Auto, they all in and around 2014 and 2015 are founded by technology entrepreneurs in China.
Now that's going to be important because it's those three companies that are now publicly traded in the US.
So that's why I bring them up.
But if we go from 2014 to 2018, 2017, we're still seeing electric vehicle companies struggle.
And this was around the time where Tesla engaged with the city of Shanghai to build Shanghai Giga.
And they made an announcement a year later, the factories turning out vehicles.
How quickly that came about should not be underestimated.
The level of cooperation needed for a foreign company to be able to move so quickly in China was unprecedented, number one.
Number two, what makes this
Shanghai Giga specials that Tesla owns it outright.
yes, no need for a joint venture now.
And the first vehicle was a Model 3.
I think it rolled off in December of 2019.
So effectively 2020.
And up until that point, the Neos and Ekipons were struggling with solvency.
They were close to bankruptcy.
The electric vehicle market hadn't really
picked up the way the Chinese government thought it would, despite the subsidies.
And so it took Tesla to come in, a foreign brand to come in to really create that excitement.
And it was 2020 where electric, so there is a term that the Chinese government uses, new energy vehicle or NEV.
What it means is it's battery electric plus plug-in hybrid or PHEV plus fuel cell electric.
which is hydrogen.
Now the hydrogen is more or less a rounding error.
So the bulk of sales is still battery electric and plug-in hybrid or PHEV.
And in 2020, that number reached one and a half million.
In 2021, it reached three and a half million.
2022, it reached six and a half million.
2023, it reached eight and a half last year.
In 2024, it's around 11 million.
Last year,
Total passenger vehicle sales in China was about 24 million.
So the take rate was close to 48%.
One out of every two cars in China is an NEV.
Now the split between battery electric and plug-in hybrid is like 60-40.
So 60 % battery electric, 40 % plug-in hybrid.
But the growth rate of plug-in hybrids was year over year plus 80%.
So more more Chinese consumers are looking at plug-in hybrids as an alternate to battery electric.
Now, a lot of things, what's that movie?
Everything All at Once happened.
Charging infrastructure was put in place.
Battery capacity for supplying the electric vehicles was put in place.
And this is over that 15-year time span.
In 2009, you never heard of a company called CATL.
Most Americans never heard of a company called BYD.
Now, not only are they globally well known, but BYD is the leader in multiple things.
And one of them is battery manufacturing.
Between CATL and BYD, they control around 52 % global market share for batteries.
And BYD supplies them to Ford in China.
They supply them to Tesla.
So it's not a like for like.
These Chinese companies only supplying to Chinese, these Chinese battery companies only supplying to Chinese OEMs.
As a matter of fact, CATL probably supplies batteries to almost every foreign automaker in the China market.
So
Despite all you hear about these subsidies and how these companies aren't really competitive, let me tell you it's the exact opposite.
Bloomberg in a recent article said that there are about 150 Chinese electric vehicle brands in the China market.
Famously, in 2022, Tesla kicked off a price war that's still going on.
Recently, it's three-year anniversary.
Does that give you good idea of kind of how...
overview of where things are right now.
and I think it's great.
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
protected, but it's a much smaller amount of different vehicles that the choose, the consumer can choose from anyway.
And I think it's really interesting looking at how.
that price war kind of happened.
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.
And there are some, some of the other you've used were able to kind of get around that by just really pushing leases.
And obviously Tesla's even doing that too, to try and help with that kind of buying price and ongoing price.
But it's really interesting hearing, I think we've even talked about this before in another episode where
In China, Tesla isn't really looked at.
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
autonomous and EV space.
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
edge, but it's going to be a pretty reliable, safe and
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.
Is that still accurate or have there been any trends come around that that you've noticed?
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
that the rest of world got, a light refresh for the Model 3 in the China market.
And we're expecting Juniper, the refresh for the Model Y, to start being delivered later this month.
So...
But before those minor refreshes, the three and the Y were four, three years old in the market.
And in the China market, if you're not refreshing every six to nine months, you're going to get left behind.
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
or produces, let's say 75, know, 75 to 65,000 units a month.
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.
That is becoming more of a challenge for them because of Berlin Giga.
And so they're really...
going to have to realign their manufacturing footprint depending on where they see demand popping up.
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.
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.
driven a lot of American and German and Japanese and Korean vehicles as well.
These are some of the coolest cars that you'll clean energy vehicles notwithstanding.
These are some of the coolest cars full stop.
Now, they don't have particular features for Americans because they're sold in China now.
that being said, the China market
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.
90 % of all vehicles sold in China are below $30,000.
So if you want to compete in that space, BYD is the 800 pound gorilla.
Yeah.
I had mentioned that about 4.3 million cars were sold by BYD in 2024.
90 % of those were consumed domestically.
But BYD is getting very, very strong and bullish in foreign markets.
They're currently shipping their vehicles in over 95 markets.
And last week, they made a...
They had a mic drop moment.
Wang Chuang Fu, who's the founder CEO of BYD, they had a tech day.
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.
And this is why, while in the United States,
Tesla sells FSD for $8,000.
GM, Ford, they also sell as a subscription fee, intelligent driving.
So GM has super cruise, Ford has blue cruise.
Stellantis just announced that they're going to have intelligent driving in their vehicles.
But this throws a huge monkey wrench into everyone's future services revenue that they're projecting.
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.
So their reach is unmatched in the clean energy vehicle space.
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
able to drive BYD's level two systems and how do you see that kind of compared to others on the market?
So in the United States specifically, are, like I had mentioned, GM has a version.
I've tried that.
Blue Cruze, I haven't tried.
I have a Hyundai, so I tried that.
terrible.
Tesla's FSD is pretty decent.
And then Mercedes, go ahead.
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.
obviously this a little specific to Tesla, but like, is it comparative to like Tesla's just free autopilot?
So they're trying to be competitive there, or is it.
Does it have the potential to actually be much more of not just like a highway, ADAS assist system?
Is it the real thing that would actually be a competitor to like Tesla's full self-driving or some other autonomous system?
So here's the thing, Chase.
There's just not a ton of competition in the United States to push FSD.
Okay, so number one, they market it, wink, wink, as this almost self-driving.
Okay, they can't say self-driving because, yeah.
And so in China, most, EV makers have a pretty robust intelligent driving system.
So it's not unique.
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
level two plus system.
And it worked really amazingly.
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.
So there's robotaxi companies and there's intelligent driving.
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
vehicles.
Hardware and software.
and not, sorry, not to interrupt you.
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
outside of like, and even in some parts of automotive people don't really know the difference.
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.
And you're, totally right.
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
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
people.
Yeah, they realize.
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
A lot of consumers fully appreciate it.
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
and all these other options that really make it much more of an actually autonomous vehicle.
Full self-driving in the United States operates in a gray area.
And I would say that intelligent driving on the highway is probably generally pretty good for most intelligent driving systems.
But yes, it is city driving that where you're dealing with pedestrians, you're dealing with bicycles, you're dealing with delivery vehicles.
That is more complicated.
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.
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.
In with GM, you have to be on a highway.
You have to be going at least 55 miles an hour.
Yes.
And so there's these very, very specific situations where you can utilize it.
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,
is level two is I can get sued.
if I get into a car accident.
Level three is the car company will get sued.
The responsibility and liability moves from the owner to the car OEM when it goes from level two to level three.
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
FSD or full self-driving is level 2 plus.
Now, I'm gonna be quite honest with you Chase.
I don't know what the difference between autopilot and full self-driving is, but people are paying $8,000.
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.
Yeah
get it simpler, but FSD could charge $8,000 for FSD.
totally and I don't want to make too much time about this and I think you're right.
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
they're now offering.
That's true domestically that in the US that's just not something we have and the alternatives we have work.
But like I said, I think my biggest issue I've talked to a lot of other people have driven those is
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.
Maybe you have like adaptive cruise control and that's about it.
And so exactly.
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
don't deal with, as much like
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
going to do highway.
It's going to be able to be capable of all these things.
And the law of the legacy automakers have kind of struggled to get competitive in that area.
Now it's become clear with a lot of these systems, whether it be cruise Argon, allow them going away.
It seems like the legacy automakers want nothing to do with it.
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
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
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
I think it's really interesting.
Like when you say something's level two, level three, you're right.
It moves the, blunder, I guess, legal blame to where it can go, but something could be level three.
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.
And that's level three versus what I think when someone hears that they think, the car would just drive itself.
And I'm completely off hands.
And I think that's where it's just like really weird thing is like, okay.
I could have this car from zero to 35 miles an hour on a highway.
I don't have to worry about, but the incident hits 36 and I have to take back over now.
I'm I'm legally responsible again.
and I think it's this kind of like weird.
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
guess is where I'm going with this.
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
by saying like, no, this isn't just going to be a highway.
This is going to be we want this to do everything.
And a quick negative trivia.
It was actually Honda that launched Level 3 first.
They were the first OEM to launch Level 3.
And to your point, you could use it during traffic jams in Tokyo.
So when the vehicle is going slower than, I want to say, 40 kilometers an hour.
And a couple of other points that I'll make with regards to the
the intelligent driving.
I might not have mentioned this, last year, I think I did 24 million cars.
So people talk about data kind of using data to train your algorithm.
Okay.
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.
So if
of passenger vehicle market has 24 million units that they sell every year.
It's still pretty much the only Western or let's say only mature market that's still growing.
could see 27, 28 million units in China before the end of the decade.
so if data is really important and competition breeds innovation and caps pricing, then
China has a clearer path towards wide adoption of autonomy and intelligent driving, especially now that BYD is offering it free on its vehicles.
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
create brand awareness, build trust.
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.
The ABB or Audi, BMW, Benz that will likely be much tougher to steal away initially.
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.
Okay.
And these countries, these emerging markets might not have on their radar using intelligent driving in vehicles.
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.
Okay.
And so why that is why BYD's
announcement was so significant is because we use this word democratize.
It's trying to democratize intelligent driving systems.
And Wang Chuanfu during his speech, he said that we're going to make it like you having airbags and a seatbelt.
That's how that's how ubiquitous they want to make it.
And how do you compete with freight?
Especially
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
about every intelligent driving system in China.
And I've ridden in most of the robo taxis in China from most of the different brands.
And so this is where I'm probably
one of 50 people that have done this in the world.
So I'd like to think
out talking outside of China about this on any sort of serious like knowledge about it.
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.
And up until that point, I'd only ridden in cruise.
right now, and I plan to be in China in April.
So I'll test all these Robotex, or I'll try all these Robotex again, because they've updated their software, obviously.
And so I still think currently Waymo is the best.
robotaxi experience in the world.
Does that change when I go back to China?
We'll see, but I was really, really impressed with Wayne.
Yeah, I've taken quite a few in the Phoenix area and.
It's interesting I.
I don't want to compare like Tesla's FSD to it, but I've been trying it on a hardware for car.
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.
It's so much smoother.
Whereas while the Waymo is a true wire, like a taxi where it's no longer on you.
I did a ride with my wife and our, my in-laws and
The way the wheel does kind the robotic jerkiness of like making the turn.
They did not like it at all.
And there's been a couple of times we've gone into Tesla that had the hardware for their latest hardware, the latest FSD.
And once again, it's technically not self-driving, but it's just so fascinating to me.
And I haven't experienced it, but looking at some of the Chinese ones, I'm really cute.
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.
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
is in my opinion, much better than most Uber drivers I've had in a long time.
Now, once again, I it's really weird because it is truly apples and oranges.
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.
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
consistent experience.
And I realized we didn't want to talk about this the whole time.
So I want you to say your point real quick.
I think we can talk about the Tesla FSD launching in China.
And I'm really curious to your thoughts on that.
then we need to get to some of this other stuff.
this is the problem.
We could easily talk about this all day too.
This way it's so fun with you.
So really quickly, I understand completely because I felt a little bit queasy in early iterations.
But I'll give you an example of Baidu.
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
finally.
then, but six months later I jump in.
A software update later, two software updates later, and guess what?
Now it's easing into the stop and it's much more human-like.
And that was my experience with Waymo in November.
So that's why I said, because now it's apples and oranges because LA and San Francisco versus Beijing traffic, completely different.
I think most people in the West would pull their hair out, pull their hair out.
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
weaving in and out.
You have these three wheeled delivery vehicles that are all over the place as well.
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
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
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
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.
so it is just it's it's wild to see how much still has to be done.
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
good.
And it's just wild how quickly this progresses.
I'm really fascinated to hear what your
what your experience will be when you're in April.
I think really quickly and then we'll move to something else.
can move to something else, like as quickly as the software is updated is as quickly as things can improve.
And in an analog world where the automotive refreshes happen once a year, a major refresh happens once every four or five years.
In a digital world, over the year updates happen in real time every few weeks.
And so you could see rapid improvement.
Yeah.
over the course of just several weeks.
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
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
autonomy, but then all these other more user focused services,
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.
What are your thoughts about that?
And how do you see that as, especially now with BYD can offering their service to the intelligent driving for free.
So the FSD that Tesla is offering in China is not full FSD.
It's very, very light.
And they emphasize that the driver still needs to be actively participating.
And so it's day one.
We've already started to see, at least on Chinese social media, I've already started to see some videos.
But I think...
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.
And one of the major players that I think is really important to point out in the China market is Huawei.
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
a connected vehicle service provider, intelligent vehicle service provider.
And so in many circles, Huawei, the Huawei system is the best in China.
I haven't experienced it, but people I trust who have tried it are very impressed.
this is, this is the thing, Chase.
It's not about FSD not being as good.
It's about their FSD is really good, but it's about their competitors in China being as good or almost as good.
So there's not a huge Delta.
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
tell but the difference in FSD being not as good partially due to just local driving
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.
it's not going to be as good because they can't send the Chinese data to the United States.
Right.
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.
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.
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.
And you're right.
The likelihood of it being able to scale as fast probably is unlikely.
But just
they're a business.
we've seen with how much of the AI hardware and infrastructure they have on this side, at least.
There's business challenges, right?
That have nothing to do with policy or anything.
Because year over year 2024, growth was flat.
So if they're not growing, they're not adding significantly more FSD potential buyers or subscribers to their system and network.
and that again, that's not a government thing.
That's a Tesla.
I'm not.
competitive in the market thing.
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.
And so is that a trend that is going to continue?
Hard to tell.
How the things to keep an eye out for for Tesla, how is Juniper going to be received in the China market?
It'll get a sales bump for Tesla, but how long without sales bump last?
And they have something, guess, begrudgingly they can call FSD lite.
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.
For sure.
And then once again, you also have where the liability falls longer term and that stuff.
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.
Um, but let, let's kind of move domestically and look at where things are.
I mean, I know you went to CES, you've already been to the Detroit auto show this year, like kicking off 25.
mean, I think we last talked in September, obviously there's the
political changes that have happened domestically.
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
especially electric vehicle sales in general or electric vehicle offerings in general domestically.
And what you're seeing and how you're kind of, what your take is on all of this.
So CES has become the de facto US auto show.
The things that's...
Go ahead.
That's the consumer electronic show.
Traditionally a big tech laptop, more of a computer realm.
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
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,
you give that context.
you a little, let me give your audience a little bit of further background.
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
is the worldwide developers conference.
And then they also started doing one-off events to launch products.
Okay.
So.
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.
And so you started to see Tesla also having their own events.
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...
not want to share the spotlight.
And with Zoom and with being able to broadcast digitally globally, it became much cheaper to do this.
so unfortunately for the Detroit Auto Show, there's not a ton of automakers that are unveiling anything or doing anything significant.
And as a kid who probably from the age of five to 23, 24 years old,
didn't miss the Detroit Auto Show and thought it was the coolest, coolest thing in the world when I was younger.
It's a shell of itself.
And I would much prefer to...
So a quick story.
I took the red-eye Thursday night from Vegas to arrive in Detroit at 5.30 a.m.
so I could hit media day.
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.
That's what they were saying because it's just cars on carpet and I walked around the show.
It took me about an hour and a half.
And I was done.
There were no new cars to really see.
There's a couple of concepts that I hadn't seen before, but CES I was walking.
20,000 steps.
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
the Zekr booth.
Zekr is a Geli brand.
and they're very they have products that they're now selling in Europe.
And what's the
The common thread for Zika in the United States is they're a contract manufacturer for Waymo.
So they're helping Waymo build their robotaxis.
But Zika had a press event.
It was oversubscribed, standing remotely.
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.
He traveled over to go to CES.
It was really great to see him.
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,
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.
for 40, 50, 60,000 US dollars in China.
It's just, that's what we're missing.
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.
And you also talk to McElroy a lot, and he's seen these cars.
He's driven these cars, Sandy Monroe.
So if you don't believe me, believe those guys who are legends in the industry.
They know what they're talking about, have no reason to mislead.
These cars are ready, and they could be sold in the United States tomorrow.
So as a consumer, I don't want to
to spend $50,000 on 2020 technology.
But in all fairness, that's what we're seeing.
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
counterparts.
And I think he's being kind.
yeah.
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
journalists really talk about the difference being between the Chinese vehicles and domestically electric, the domestic electric vehicles and European ones too, is the
charging rates that you're just seeing with some of these Chinese batteries.
mean,
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
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.
I think that the tariffs and a lot of these things were talking about have a lot of clear
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
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
is pretty shocking I think no pun intended where I think it what is it the golden Zika battery or something charges from like
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.
It's got plenty of range.
Yeah, I mean it's at the point where it's like who cares about stopping a gas station fast.
might not want to sit in the car because it might be like super like radio.
I'm just joking.
But like, holy cow, right?
Like it is like.
But a lot of that.
So you're you're effectively referring to some of the features of these vehicles.
400 volt, 800 volt.
And then on top of that, you're looking at charging infrastructure from each of these brands that support that 800 volt.
system in order to get to the 0 to 80 in 10 or 11 minutes.
OK, and so that's also what I'm talking about.
Like these features, they become qualifiers so quickly, but they're not differentiators because of the ultra competitiveness in these markets.
If you're not updating your architecture to take on fast charging, ultra fast charging,
man, you quickly leave this game.
But one of the things that I think is also really important is that the United States does have different use cases.
People do tow boats and trailers and things like that.
Not many.
It's not like every person.
I mean, there's more soccer mimes and tajos by themselves in metro Detroit than you could shake a stick at.
So is it necessary to have a freaking huge Tahoe if you're a family of three?
Maybe not, but whatever's whatever.
But in China, so a particular example is Neo.
They're the ones that have become synonymous with battery swapping.
But Neo, it's not an either or.
You can swap.
Or you can, and I won't say or.
You can swap and you can ultra fast charge because the architecture and the battery pack supports that.
And so that's where it's really interesting.
that I know and I it's it's interesting because it's moved outside of China.
There's quite a few places in Europe now that Neo has even battery swapping locations and.
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.
That's more points of failures, yada, yada, yada, yada.
more products you have to make and all this stuff to have that battery swapping functionality, but.
It's clearly gone down to a point anyway.
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.
Are you still seeing how I mean, I haven't really heard too much actually about the battery swapping growth.
I don't know.
Is that still something you're hearing a lot?
I'm hearing more about the charging rates increasing so fast that in some ways that gets around the heavy
I mean, it's already capital intensive to build charging stations.
Building a battery swap charging station is even more capital intensive.
What trends are you, are there any trends around that you're seeing that are really interesting?
So the basics of battery swapping, needs to be, the swapping stations need to be highly utilized, okay?
Just like charging infrastructure.
In order to get a return on that investment, you need to use them quite often.
so, swapping lends to cities that have millions of people.
So it...
Does it make sense for a European city with 200,000 people?
Maybe not, unless there's a high penetration rate by by Neo.
Okay.
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.
Okay.
But in general, when I lived in, I had 20 plus million neighbors when I lived in Beijing, I had 20.
223 plus million neighbors when I lived in Shanghai.
In Tokyo, if you think about greater Tokyo, we're talking 30, 40 million people.
So Asian cities are just wired differently and are completely different than European and American cities.
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
700,000 people.
You know, and so that's one thing.
The next thing is creating a standard.
So chase motors and two motors, we each have our own swapping standard that creates costs for each of us separately.
OK.
And so in order for me to get utilization rates high on my swapping, I need some more vehicles.
But if chase motors licenses their technology, their swapping technology to me or we standardize the battery pack.
Then multiple brands can take advantage of a single swapping station.
And that's what we're starting to see in China.
They're trying to create a standard.
NIO is trying to convince other automakers to use their swapping stations and their IP.
And that does seem to always because I mean, they're not the first to have done it.
Obviously tested Tesla tested barely.
But even before them was the original, which was better place in Israel was like the original to do it.
But part of the scaling issue was exactly that was this.
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?
Then do you need
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?
Location I don't know.
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
quick and work on it, but
And this is where, we broaden that conversation out, Chase, look at fleet vehicles, right?
So fleet vehicles lend themselves to swapping.
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
construction guy, but if there are big loaders, right?
And you needed to work.
the EV size Milwaukee electric packs you can start putting in into your work site truck?
But I mean, kind of seriously, yeah.
because it would allow you to have utilization rates much higher, right?
And so again, swapping is this, yeah, yeah.
And swapping is a success story in China and swapping on the moped side is a success story in Taiwan.
whether it works in Europe or the United States or North America is still
up for debate, if I'm an OEM, yes, if I'm an OEM, I'm kicking the tires, at least.
And there's a company in San Francisco that you should follow called Ample.
They're doing battery swapping.
And so they're trying to sign up some OEMs.
And guess what, man, if there are some brands that get desperate enough, you better believe they'll try to differentiate themselves or
try to save costs through these partnerships or these different types of opportunities.
So Ample, I was told, is gaining some traction in Japan.
So maybe Ample does well in markets outside of the United States for the time being.
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.
so we, have to have you on again soon.
There's always so many different things happening.
And, I just want to say thank you for sharing this.
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.
So safe travels.
We'll talk to you soon.
And thank you so much for coming on today.
And for anyone listening, obviously we'll have links to all the two.
work with SinoAuto Insights and much more and links to your new sub stack, right?
Along with you even have some upcoming events.
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.
So look for us there.
yeah, man, thanks for having me on.
That's a wrap for this episode of Grid Connections.
Huge thanks to Tu Le for joining us and sharing his deep knowledge on the future of electric vehicles and autonomy.
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Until next week, this is the Grid Connections podcast signing.