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Good morning grid connections listeners.

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Today we're joined again by guest to lay the founder of Sino auto insights.

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And he's here to unpack China's profound impact on everything from electric vehicles and
EV charging infrastructure to the rise of plug -in hybrids and the competitive landscape

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of the Chinese EV market.

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We'll also discuss what global tariffs can mean for Chinese made vehicles and how these
changes might ripple through the global automotive industry.

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Before we get started though, I want to ask a favor.

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If you enjoyed this episode, please share with at least one person you think would love it
too.

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And don't forget to leave us a pause review on our podcast page.

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Your support helps us continue to bring you insights from industry leaders like to lead
today with that.

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Enjoy.

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Chase, thanks for having me on again.

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I think just to kind of kick it off, mean, I was looking back at our episode.

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was almost a year ago that you were on.

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Yeah.

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Yeah.

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Which it didn't, it doesn't seem like that long, but even in that past year, there's been
so much change.

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I think unfortunately some of the challenges we probably talked about last year are still,
present, but I wanted to kind of talk with you first about, for anyone listening today

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that might not be familiar with your work.

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as I said, you have a really strong background in a few different fields of lived
experience.

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And even before we went live, we were kind of talking about, one of the things I really
admire about your work versus like the keyboard warriors out there is you get on, you get

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on the plane, you, you're get behind the wheel.

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You actually are out there, in a lot of different markets, seeing firsthand what is
happening in the space.

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So, just real quickly, if you could just give us a background about a little bit more
around that and what Sino auto insights brings the industry.

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Sure.

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Let me take a few minutes because I'm sure you've grown your audience.

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So maybe they didn't listen to the first episode that we had together.

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Tu Li grew up in Detroit.

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First job was at General Motors and worked in the automotive industry for few years before
going back to graduate school and then moving out to Silicon Valley.

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I'd spent almost seven years there working in high tech.

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at two companies that I believe are probably arguably the best in hardware and software
integration from a product standpoint, Apple and Logitech.

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And so I learned a ton from a digital standpoint and understanding digital products and
how fast a high tech market and sector moves.

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And then I met a girl, a woman in San Francisco, and she happened to get transferred over
to Beijing.

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And I'm actually Vietnamese, so I'm not Chinese.

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I couldn't speak the language at that time, but then ended up chasing her over into
Beijing.

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what I thought or what we thought was going to be three, four, five year thing ended up
being 12 and a half years.

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And about seven years ago, I started a consultancy called Sino Auto Insights.

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Our tagline is we're at the intersection of technology and transportation.

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We have three core beliefs.

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One is innovation is now moving east to west.

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Think TikTok, think DJI drones.

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Number two is that all companies are becoming software companies.

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I actually need to probably cross that out and say, are going to be AI companies.

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And the third thing is you're not moving fast enough.

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And if we've learned anything, we saw Ford is slowing down on the EVs.

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We saw GM laying off people this week.

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We're seeing this disruption and actually

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Let me take that back, Chase.

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It's not a disruption.

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It's a reset.

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That's how broad and deep what's happening in the transportation sector is.

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And to your point, having lived in China for 13 years, I got to see the Neos, the Xpungs,
the Li Autos, the BYDs mature and grow into the players that they are right now in the

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China market.

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And to give your listeners some perspective,

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Last month was the first month China had reached 50 % take rate on passenger vehicle sales
that were clean energy vehicles.

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So clean energy vehicles, and we can argue, because I know a lot of people out there don't
think PHEVs are clean energy vehicles, but the Chinese government considers them to be

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clean energy.

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So they call them NEVs or new energy vehicles.

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So battery electric.

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plug -in hybrid and fuel cell electric vehicles.

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And China became the largest passenger vehicle market in 2009, overtaking the United
States.

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This year, they're probably at around 26 and a half million cars.

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And if we're thinking of half of those are gonna be NEVs or close to half of them this
year, when the United States is gonna be around probably 1 .2, 1 .4 million.

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That gives you some perspective on how competitive the market is.

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Tesla is even struggling in China.

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and to your point, before I bogart this entire conversation, I was just there in April for
the Beijing Auto Show, got to meet up with a lot of Chinese EV companies, try out their

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vehicles.

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We actually, with my co -hosts, or for our podcast, China EVs and More, we drove

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Xpeng G9 from Beijing to Shenzhen about 1 ,500 miles using mostly level two intelligent
driving.

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So that was interesting.

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And again, to your point, I try to separate myself from the people that are critiquing the
Chinese EV industry because I'm out there trying it out.

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And I'd mentioned this before.

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We started

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I also am driving a lucid right now for a week to try that out.

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So I'm able to compare and contrast the Chinese EVs and some of the European and American
EVs too.

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Yeah, I think that's a great overview of what I've always really found really entertaining
about your work.

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And just really the perspective, it's definitely based, I think in an optimistic light of
like how to help a lot of these automakers that are struggling with the move to electric

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vehicles, but also kind of bringing the facts that, there's a lot going on right now in
China.

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That's really pushing the industry forward.

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And sometimes I don't know if the U S especially is seeing as big of the direct impact as,
maybe like the European market is already with, Chinese electric vehicles, but.

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With a lot of this stuff you've already talked about just there.

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I think that gives us quite a bit for what we're going to go over in today's episode.

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But I think you mentioned driving the loosest.

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Let's just kind of start there.

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That's a really interesting one because they are definitely still in the startup phase.

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I think there's a growing interest in their product, but they're pretty still small.

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but they're taking more of the startup approach.

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They're putting a pretty strong focus on efficiency with their electric vehicles.

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They're putting in a, focus on software and with this kind of drive you're doing right now
and your experience, what, what have been your takeaways with, one of the newer, more

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successful startups in the American EV space.

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Well, I would debate whether they're successful yet.

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I think that they have their second product that's going into production, the Gravity,
which is an SUV, but it's still at the $80 ,000 price point.

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And so if we look at the US EV makers, there's really only Lucid and Rivian, arguably.

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Now, Kia and Hyundai have really taken up the mantle from a legacy standpoint.

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That's because up until recently when GM lost the Equinox, the Blazer EVs, there was
really no challengers, right?

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Ford had the F -150 Lightning, which was a truck, and which they said was gonna start at
$40 ,000.

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I think it starts at 57 now.

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And the Mach -E.

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The Mach -E has largely been unchanged since it launched.

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And so we're seeing the Koreans really take advantage of the gap in products or affordable
products for most Americans.

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And that's where Lucid is.

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You know, the air starts at around $70 ,000.

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And so it's not something that most people can afford.

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I can't really afford it myself.

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But what I will say about it is that

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for a first, specifically for a first effort.

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It's a great, great car.

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think if you get behind the wheel, I don't hear any rattles.

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I don't hear any, you know, quality issues that you would normally see in startup cars or,
you know, early production vehicles.

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So they've been able to dial in even with a small production.

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base some of the early issues that they've had.

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Now there's some quirks with the vehicle, I've only spent a couple of days with it, so I
want to spend a few more miles behind it before I really, really judge it harshly.

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I think that's all pretty fair.

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And I think

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though.

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Let me say that.

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It's stupid fast.

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And the battery tech is significant.

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The range is much higher than other comparable vehicles, which is game changing.

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Because I think one of the topics you wanted to talk about is Chinese battery technology.

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So compare and contrast that.

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We can talk about that later, though.

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Yeah, for sure.

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I think just to follow up with that, I think one, you made a great point of saying maybe
successful is a bit early to call them that.

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I, kind of made it.

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I feel like you're right.

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It's like them and Rivian are still like the only two domestically.

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I feel like there's the Lordstown motors and so many other EV companies that got
fundraising, all this stuff that I've just kind of fallen by the wayside and they seem to

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be still,

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moving forward, I will say I definitely see a lot more Rivians on the road than I do
Lucids and part of that is due to product and like you said, the price point, but one of

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the I think early negative kind of feedback about the Lucid was it software.

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And from what I've heard, that's definitely improved.

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And I think that is such a big from what you've also said, the software experience and
kind of having that user refined vehicle.

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is huge, think, not just in the Chinese market, but especially with younger car buyers in
particular.

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And I think that's one of the things that, whether intentional or not, Tesla did have a
lot of success with their EVs when growing was that element of it.

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And given the exposure that you have to a lot more of the Chinese EVs that really excel at
that.

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Is that something you would say the lucid is good at, or is it still need quite a bit of
refinement in your opinion to kind of hit that?

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I think what is now kind of a bar set of a user defined vehicle, whether that be from like
the Teslas of the world, or I think even more so with a lot of the Chinese EV automakers.

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First, I gotta give you kudos, Chase, because you said user -defined.

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I hate when people say software -defined.

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I won't say hate, but I think software -defined is a terrible acronym because...

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guess where I got that from.

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Let's put it that way.

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So anyways, because software doesn't define the vehicle, it enables the user experience, a
good or bad one based on the design.

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But to answer your question, and sorry to go off on a tangent there, but I was like pumped
when I heard you say that.

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I have not encountered any significant bugs on the software side.

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The interface is fairly simple.

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And the fit and finish of the materials is really nice.

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Again, no squeaks and rattles.

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And in an electric vehicle, it's amplified because you don't hear the motor.

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And so that's really, really important to note.

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And it's super roomy.

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I have two kids.

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And they can.

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Lounge in the back seat because they pulled the wheels out, but it creates a weird trunk
egress and ingress egress because it's like a clamshell and it's flat, but it's a little

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awkward.

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But the frunk is amazing and I really enjoy driving it.

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It has some steering feel.

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There are a bunch of cars that I've driven in the past that kind of feel like you're
floating a little bit when you're steering.

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This one has some bite to it, which is great because it makes you feel the ground a little
bit.

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Again, I'm not one of those car reviewers.

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I would recommend you watch videos from those professional car reviewers.

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I think they just sent it to me because they wanted to hear

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get an objective opinion on what is good, what could be improved.

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But so far, so good, nothing that stands out in a negative way.

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No, that's great.

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I think that might be an interesting kind of pivot to.

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Yeah, that's fair.

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Fair for sure.

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And it's interesting you mentioned kind of just the driving dynamics of it because I think
earlier this year I had the chance to test drive Rivian R1S and obviously much different

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vehicle.

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But I was surprised how bode feeling it was for.

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even for an SUV.

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And I think that was something that I kind of hadn't expected and been spoiled with a lot
of other EVs I've driven that just you have to obviously be very you have to put it kind

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of front and center when you're designing an electric vehicle to make it feel more sporty
and or at least like have that kind of connection to the road.

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And that was one of the things that surprised me and it has consistently been a positive
I've heard about the Lucid.

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But kind of focusing on, more of the focus of today's discussion, which is around.

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Kind of looking at Chinese EVs and you, mentioned kind of how they have been also
counting, plug -in hybrids towards some of this new electric vehicle, mandates and stuff

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they have.

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How are you seeing, I, because even as you mentioned the love, the domestic automakers are
definitely pulling back on their EVs.

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some of that investments in the software side, some of that's investments in actual
product side.

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How are you seeing it in?

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just domestically and then comparing that to China, because I know a lot of people, I
think from the more traditional auto industry had kind of complained, part of the reason

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they've been so successful in China is incentives.

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And then they even use like the European and union as an example, or specifically Germany
that had really good incentives for EVs.

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And then like the instantly stopped those.

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EV sales did take a pretty serious nose dive.

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And it doesn't seem like that's been quite the case in China, but I'd really love to hear
your kind of thoughts on.

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how that differs around the idea of moving the auto industry forward with EVs and then how
plug -in hybrids play into that.

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Let me address the elephant in the room first.

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So these Chinese EV companies in general have received significant subsidies for the
development of their companies and technologies.

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And that's happened starting in 2009.

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And if you look at sales throughout 2009 until today, the inflection point started in
right around 2020.

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That also happens to be when job one

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of the Shanghai Gigafactory rolled off the line, Model 3.

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so even with substantial subsidies from the Chinese government, these Chinese EV
companies, you can Google it.

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NIO in 2017, 2018 was on the verge of bankruptcy.

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XPUN was struggling a bit.

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And I think it took Tesla to really catalyze and bring much more interest, eyeballs to the
sector.

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And then COVID happened.

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there was for the West anyways, it was like they were flying blind now.

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They didn't see what was going on in China with regards to take rates.

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I can tell you in 2020, there's 1 .5 million cars or any V sold.

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2021 there's 3 .5, 2022 6 .5.

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Last year around 8 .5 million any V sold.

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This year, probably getting close to 10 million.

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And I can also tell you, I was there.

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Because I was stuck in China because of COVID.

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And we didn't leave until 2022.

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So I've been back in the United States for the last couple of years.

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Still travel quite a bit back to China, but now home base is here.

211
00:18:29,992 --> 00:18:34,060
So the proliferation of green license plates

212
00:18:34,060 --> 00:18:38,260
Typical ICE vehicles in China have blue plates.

213
00:18:38,280 --> 00:18:40,620
or NEVs have green plates.

214
00:18:40,700 --> 00:18:48,460
And so you just see more and more and more of those, you know, starting in 2019, 2020.

215
00:18:48,460 --> 00:18:52,340
And now they dominate most of the tier one cities.

216
00:18:52,340 --> 00:19:04,348
And with regards to the subsidies, Europe and the United States have to be in it for the
long haul, because if they only dabble in

217
00:19:04,744 --> 00:19:11,324
incentivizing consumers to purchase EVs, you're going to see this tail off if you pull
subsidies too early.

218
00:19:11,324 --> 00:19:13,954
In China, the market took over.

219
00:19:13,954 --> 00:19:17,044
And so they were able to dial back some of those subsidies.

220
00:19:17,044 --> 00:19:24,204
And what we're seeing now, there was a CNBC video that I was a part of that dropped a
couple of weeks ago.

221
00:19:24,204 --> 00:19:28,164
They said there was 140 EV brands in China.

222
00:19:28,164 --> 00:19:32,940
So if you could imagine being able to choose from

223
00:19:32,940 --> 00:19:49,340
20, 30 brands chase that have products on every, almost every price segment and almost any
feature that you would want and compare and contrast that to the United States.

224
00:19:49,340 --> 00:19:54,600
How many $50 ,000 EVs are in the market?

225
00:19:54,600 --> 00:19:58,100
Number one, how many of them have the features that you want?

226
00:19:58,100 --> 00:20:03,012
Number two, and I'll, I'll, I'll go a step further.

227
00:20:03,436 --> 00:20:10,356
The ID buzz just was announced for US sales.

228
00:20:10,596 --> 00:20:17,596
$70 ,000, 230 or 250, 230 miles of range.

229
00:20:18,496 --> 00:20:21,036
The product is not complete.

230
00:20:21,036 --> 00:20:27,896
How are you selling this thing for $70 ,000 when it only has 230 miles of range?

231
00:20:27,896 --> 00:20:30,056
So I'm torn.

232
00:20:30,056 --> 00:20:30,968
Should.

233
00:20:31,148 --> 00:20:42,668
car makers launch vehicles that don't seem to be competitive and they're definitely not
going to be able to compete with those specifications in China.

234
00:20:42,848 --> 00:20:52,008
But, or do they wait like, like a Ford says, we're not going to launch a full -size SUV,
EV until 2027.

235
00:20:52,008 --> 00:20:59,162
You know, I don't know what the right answer is, but all I know is that the products have
done and Volkswagen.

236
00:20:59,220 --> 00:21:04,461
seems to be satisfied with overcharging for an underperforming EV.

237
00:21:04,672 --> 00:21:17,333
Well, and I think that vehicle especially kind of speaks to some of the electric vehicles
currently in the U S where it's almost, it is definitely lifestyle focused versus like

238
00:21:17,333 --> 00:21:21,523
being a practical or obviously affordable option for most people.

239
00:21:21,523 --> 00:21:31,993
And I'm kind of curious when you talk about, China and like, you tell me there's 30 brands
out there that that's what we kind of keep hearing to me that says that,

240
00:21:32,579 --> 00:21:41,604
Especially with what we're also hearing about kind of a price war in China with EVs that
eventually that sooner or later that's gonna be more consolidation of those brands.

241
00:21:41,604 --> 00:21:53,980
Do you think that that is likely to happen and is the price war we kind of keep hearing
about EVs in China as big of a thing as it actually is or is it just kind of the market

242
00:21:53,980 --> 00:21:56,291
you think sorting itself out?

243
00:21:58,070 --> 00:22:00,161
There's a few different things going on.

244
00:22:00,161 --> 00:22:04,902
the China economy is lukewarm.

245
00:22:04,902 --> 00:22:09,423
It's not going great, not compared to pre -COVID days.

246
00:22:09,423 --> 00:22:21,567
so Chinese consumers are really, really being careful of what they spend their hard
-earned money on.

247
00:22:21,567 --> 00:22:26,508
And so we talked about consolidation in the China market.

248
00:22:26,508 --> 00:22:30,708
Before EVs, there was always talk about consolidation as well.

249
00:22:30,708 --> 00:22:34,468
So can 140 brands survive in China?

250
00:22:34,468 --> 00:22:35,648
No.

251
00:22:35,828 --> 00:22:46,768
But we need to look at the China market and how the foreign legacies compete in that
market separately from what's happening in Europe and the United States.

252
00:22:47,128 --> 00:22:54,468
Because the fact of the matter is 140 Chinese EV brands are not going to be exporting to
the United States.

253
00:22:54,468 --> 00:22:55,500
There might be

254
00:22:55,500 --> 00:23:05,000
15, 20 brands that try to, but there might be three or four that are successful being long
-term players.

255
00:23:05,000 --> 00:23:12,660
If we look at the Koreans, we look at the Japanese, right now it's Honda, Nissan, Mazda to
a lesser extent, and Toyota.

256
00:23:12,900 --> 00:23:14,840
So there's only a handful of players.

257
00:23:14,840 --> 00:23:20,840
And I don't see 20, 30 Chinese brands being very successful in the United States.

258
00:23:20,960 --> 00:23:24,420
Because I don't think there is...

259
00:23:24,960 --> 00:23:29,403
a room for that many brands in the automotive space in the United States.

260
00:23:29,403 --> 00:23:36,927
And so for us to look at it, we're not going to have that many choices.

261
00:23:36,927 --> 00:23:45,371
But what's important is that Tesla pushed along the Chinese EV players and the market is
the way it is.

262
00:23:45,632 --> 00:23:53,456
If the Chinese EV companies come to the United States, whether they're successful or not,
they're going to create more competition.

263
00:23:53,580 --> 00:23:55,361
for the US consumer.

264
00:23:55,361 --> 00:23:59,332
And that means the Detroit three will need to step up in a big way.

265
00:23:59,332 --> 00:24:04,963
Because right now, Hyundai Kia has eaten their lunch.

266
00:24:05,123 --> 00:24:14,646
If there are three, four, or five more players, and we haven't even talked about Tesla,
but Tesla is still pretty competitive, although their products are three, four, or five

267
00:24:14,646 --> 00:24:18,487
years old, largely unchanged in the market.

268
00:24:18,907 --> 00:24:21,990
And that's why they're struggling in China.

269
00:24:21,990 --> 00:24:22,340
yeah.

270
00:24:22,340 --> 00:24:30,292
And I think you said something, if I remember right on an auto line episode recently,
where you kind of talk about how like Tesla is not like maybe the leader anymore as far as

271
00:24:30,292 --> 00:24:37,414
like innovation in the eyes of maybe Chinese buyers, but they're kind of looked at as
almost like the safe play.

272
00:24:37,414 --> 00:24:40,565
Like if you want an EV and you get a Tesla, it's a safe play.

273
00:24:40,565 --> 00:24:41,805
Like, you know, it'll work.

274
00:24:41,805 --> 00:24:42,896
It'll be fine.

275
00:24:42,896 --> 00:24:47,577
Is that accurate or has that kind of changed a little bit?

276
00:24:48,291 --> 00:24:55,392
Are they starting to see the Chinese EVs be more of interest than a Tesla?

277
00:24:55,392 --> 00:24:58,956
Obviously more so than like traditional legacy automakers.

278
00:24:59,500 --> 00:25:07,810
Right now in the China market, there's really two winners and a lot of losers or a lot of.

279
00:25:07,810 --> 00:25:13,780
Ultra competitive companies that that haven't been able to separate themselves.

280
00:25:13,780 --> 00:25:24,380
The first company is is Tesla and the the champion is BYD and this is a champion in a big
way.

281
00:25:24,380 --> 00:25:29,122
They sell about 350 ,000 vehicles a month.

282
00:25:29,804 --> 00:25:34,644
Almost half of those are plug -in hybrids.

283
00:25:34,644 --> 00:25:42,124
So they can offer you a vehicle in any powertrain, although only on clean energy.

284
00:25:42,124 --> 00:25:44,444
So it's either PHEV or BEV.

285
00:25:44,444 --> 00:25:47,524
And they live in the mass market.

286
00:25:48,224 --> 00:25:53,984
And so their products generally are less than 30 40 ,000 US dollars.

287
00:25:53,984 --> 00:25:58,956
And it's important to note that 85%, 90 %

288
00:25:58,956 --> 00:26:03,456
of all vehicles sold in China are less than $50 ,000.

289
00:26:03,456 --> 00:26:13,196
Whereas in the United States, over the last few years, the average price of a vehicle has
gone up to $53 ,000.

290
00:26:13,196 --> 00:26:15,336
And we're not even talking EV.

291
00:26:15,596 --> 00:26:28,612
But the economics are such that now it's as cheap or cheaper in certain instances to make
an EV versus an ICE in China.

292
00:26:28,682 --> 00:26:31,203
So we've reached parity in China.

293
00:26:31,610 --> 00:26:41,752
Now you said Tesla coming to the Chinese market was kind of a motivating moment to the
Chinese automakers to get competitive, to kind of push them forward.

294
00:26:41,793 --> 00:26:44,563
Why do you think that that hasn't quite been the case?

295
00:26:44,563 --> 00:26:53,976
I mean, I would say obviously Tesla motivated a lot of domestic automakers to make and
offer electric vehicles, but it definitely seems like it wasn't quite the like shooting

296
00:26:53,976 --> 00:26:58,577
gun kind of starting the race impact.

297
00:26:58,635 --> 00:27:03,046
that we, in China that it has been here.

298
00:27:03,046 --> 00:27:05,437
And do you think that that's.

299
00:27:05,437 --> 00:27:17,221
due to the actual products themselves and maybe the traditional automakers being so, truck
and large vehicle heavy, or is there something else that's really that kind of made

300
00:27:17,221 --> 00:27:24,823
Tesla's entry into China, kind of kick off a competition race in the EV space, a much
bigger event.

301
00:27:27,073 --> 00:27:32,007
It's definitely the unique use cases that Americans have.

302
00:27:32,007 --> 00:27:47,911
In Michigan, many folks have boats, have trailer hitches, and they do road trips because
we have so much highway mileage all over the United States.

303
00:27:47,911 --> 00:27:53,135
In China, the thought of road tripping is newer.

304
00:27:54,476 --> 00:27:58,356
It's mostly cities that are very, very vastly populated.

305
00:27:58,356 --> 00:28:03,756
Now I lived in Beijing and Shanghai, two of the largest cities in the world, and we're
talking over 20 million people.

306
00:28:03,756 --> 00:28:08,856
So my neighborhood in Beijing was probably larger than some states.

307
00:28:09,356 --> 00:28:23,852
so again, just to emphasize the different use cases, but at the end of the day, Chase, you
and I know it's all about price and in China, it's all about value because

308
00:28:24,140 --> 00:28:38,040
because of the price war, incidentally that Tesla launched in January of 2023 because they
had a three and a four year old Model 3 and Model Y, they needed to lower the price in

309
00:28:38,040 --> 00:28:43,700
order to bring more consumers back to their vehicles.

310
00:28:43,700 --> 00:28:51,214
And so another thing that the legacies will struggle to do is refresh.

311
00:28:51,500 --> 00:28:53,660
vehicles on a timely basis.

312
00:28:53,660 --> 00:29:01,240
In China, cars get refreshed now every nine months, every 10 months.

313
00:29:01,240 --> 00:29:08,660
And I just mentioned to you, Tesla hasn't refreshed in a major way the three or Y in three
or four years.

314
00:29:08,660 --> 00:29:11,340
That's just not gonna get it done in China.

315
00:29:11,340 --> 00:29:17,233
And so it's too competitive in China, which is...

316
00:29:17,233 --> 00:29:25,216
that that kind of, I, that makes me think going back to the question I had around
consolidation, like that level, that many brands with that level of refrashing just

317
00:29:25,216 --> 00:29:30,778
doesn't seem, even when you have a very large car, public just doesn't seem sustainable.

318
00:29:30,958 --> 00:29:39,761
And I think it's, it's kind of funny you say that because yes, Tesla does in some ways
have older products, but a big thing that

319
00:29:40,023 --> 00:29:48,103
had really pushed the American automakers forward was the fact of how quickly Tesla could
iterate and make changes on the flight to their products.

320
00:29:48,103 --> 00:29:51,306
That just was not a thing for us automakers.

321
00:29:51,467 --> 00:29:57,493
And so I'm kind of curious about, with, I'm sorry, were you going to say something there?

322
00:29:57,932 --> 00:30:12,892
Well, Tesla doesn't have that advantage in China because there's so many software
companies and people that have experience writing code.

323
00:30:13,112 --> 00:30:27,748
so let's lump Tesla into the Chinese EV startups where 80 % of the engineers at a Chinese
EV company and let's say Tesla are going to be software.

324
00:30:27,884 --> 00:30:29,724
and software engineers.

325
00:30:29,724 --> 00:30:34,144
20 % are going to be traditional automotive engineers.

326
00:30:35,084 --> 00:30:45,684
At GM, at Ford, at Volkswagen, that number is flip -flopped, meaning 80 % traditional
automotive engineers, maybe 20 % software engineers.

327
00:30:45,684 --> 00:30:57,420
And so what we're seeing is a simplification when it comes to EVs or clean energy
vehicles, because now we don't need thousands of engineers to help develop

328
00:30:57,420 --> 00:31:01,680
the latest efficient petrol powertrain.

329
00:31:01,740 --> 00:31:05,920
Electric motors are much simpler and they're high performing.

330
00:31:06,260 --> 00:31:11,680
And that tells me that they're going to be commoditized very, very soon.

331
00:31:11,680 --> 00:31:25,316
So you can have a $25 ,000 car, EV five years from now in the United States, and it can
still go stupid fast because electric motors will be so...

332
00:31:25,528 --> 00:31:29,978
the performance of electric motors will be so democratized, you know, in a...

333
00:31:29,978 --> 00:31:36,324
now that's, that's definitely an interesting part of it is that, ability to have so much
power in an electric vehicle.

334
00:31:36,324 --> 00:31:41,220
And it's not because you made some new version of a VA or some sort of breakthrough.

335
00:31:41,220 --> 00:31:43,021
It's just kind of like the baseline.

336
00:31:43,021 --> 00:31:43,210
I.

337
00:31:43,210 --> 00:31:46,681
or you threw turbochargers or a supercharger on top of it.

338
00:31:46,681 --> 00:31:46,991
Right.

339
00:31:46,991 --> 00:31:47,121
Right.

340
00:31:47,121 --> 00:31:55,101
And I think that's what's really interesting for the startups and also the Chinese brands
is they don't have to worry about legacy products that they're going to overshadow with

341
00:31:55,101 --> 00:31:56,921
more speed, more performance.

342
00:31:56,921 --> 00:32:03,341
That's actually an incentive for them to kind of crank it to 11 with these entry products
to have plenty of performance.

343
00:32:03,341 --> 00:32:13,221
But, and I do want to talk to you a little bit more specifically about P hubs in the
Chinese market, but I guess going back to that nine month iteration period,

344
00:32:14,467 --> 00:32:23,682
Everything you said there about having these companies that have such strong software
engineering backgrounds and that kind of iterative process totally makes sense to see that

345
00:32:23,682 --> 00:32:25,843
amount of change in the vehicles.

346
00:32:25,843 --> 00:32:30,546
But do you think that, I just hear a nine month change.

347
00:32:30,546 --> 00:32:36,769
And to me, that just doesn't seem sustainable from a almost brand standpoint.

348
00:32:37,310 --> 00:32:42,262
Or do you think, I guess that's, there's, I guess two questions on this kind of area.

349
00:32:42,262 --> 00:32:43,143
I just wanted to,

350
00:32:43,685 --> 00:32:44,825
discuss before we move on.

351
00:32:44,825 --> 00:32:56,790
I guess one is, is that something the consumer is asking for that amount of change, or is
that being driven by the company to stand out?

352
00:32:56,790 --> 00:33:03,033
Cause if it's the latter to me, that doesn't seem like that's going to be a long -term
strategy that works for a lot of these automakers.

353
00:33:03,456 --> 00:33:06,799
These Chinese companies are generally speaking in survival mode.

354
00:33:06,799 --> 00:33:24,695
So they see that if a new product drops or new features drop on a current product, they
might have a month of shine before it gets leaped over or aped by another Chinese EV

355
00:33:24,695 --> 00:33:25,436
maker.

356
00:33:25,436 --> 00:33:29,329
And so this is just survival mode, okay?

357
00:33:29,329 --> 00:33:30,590
If you're not...

358
00:33:30,713 --> 00:33:43,134
because it is kind of like the traditional software and hardware, PC or even smartphone
market where it's like you have the Apple approach and then you have a bunch of different

359
00:33:43,134 --> 00:33:54,024
companies that make windows computers and are battling out on hardware specs, which
traditionally is usually a race to the bottom and hasn't worked out very well.

360
00:33:54,831 --> 00:34:04,023
Do you think that that is, I mean, especially with your kind of background in tech, do you
think that's a pretty analogous experience to what we're seeing in the Chinese EV market?

361
00:34:04,362 --> 00:34:19,863
If you follow Chinese sectors, e -commerce, traditional sectors in China for a while, it's
normally a race to the bottom because it's so competitive.

362
00:34:19,863 --> 00:34:27,899
That's the irony a little bit of what a lot of people think of China is the copycat thing.

363
00:34:27,899 --> 00:34:32,832
it is, when it comes to certain specific sectors, it is some of the most

364
00:34:32,908 --> 00:34:41,588
cutthroat competitive markets, much more competitive than anything in the United States
and in Europe for sure.

365
00:34:41,608 --> 00:34:59,948
so when it comes to, here's my theory, Chase, in the next 20, 25 years, it's not the
battery platform, the actual vehicle is not the physical industrial design or physical

366
00:34:59,948 --> 00:35:02,980
design of the vehicle is not really gonna matter that.

367
00:35:03,368 --> 00:35:17,398
If we look at the current silhouettes and we squint a little bit of some of these
crossovers and SUVs, they have a model Y silhouette.

368
00:35:17,818 --> 00:35:26,504
If we combine that in with ride hailing, no one cares what the brand is that picks you up.

369
00:35:26,504 --> 00:35:31,207
In China, you and I are car guys.

370
00:35:31,347 --> 00:35:32,678
Love Porsche.

371
00:35:33,036 --> 00:35:34,176
I love Porsche.

372
00:35:34,176 --> 00:35:39,276
I would love one 911 Targa in my garage.

373
00:35:40,216 --> 00:35:48,256
It's a brand that has heritage that automatically will have buyers in Europe and the
United States.

374
00:35:48,756 --> 00:35:55,460
It's probably the, if not the, it's one of the strongest automotive brands in the world,
full stop.

375
00:35:56,940 --> 00:36:01,620
In Porsche lost 15 % year over year sales.

376
00:36:01,760 --> 00:36:07,180
The first half of this year, it fell a further 30%.

377
00:36:07,180 --> 00:36:13,740
There are no sacred cows when it comes to brands in China.

378
00:36:13,740 --> 00:36:25,664
And it's not about this nationalism that some people like to think, because if you make a
great product, it's gonna sell, okay?

379
00:36:25,664 --> 00:36:29,888
And there was another narrative that somebody had written.

380
00:36:29,888 --> 00:36:31,308
won't say who.

381
00:36:31,329 --> 00:36:36,633
It was a couple of weeks ago that were like, the Chinese government want all foreign
automakers out of the country.

382
00:36:36,633 --> 00:36:41,217
That's a completely inaccurate and wrong statement.

383
00:36:41,217 --> 00:36:51,065
Because what the Chinese government want to do is actually attract foreign direct
investment from multinationals into China.

384
00:36:51,626 --> 00:36:54,912
And so if they made

385
00:36:54,912 --> 00:37:01,916
The automotive sector is so unattractive that foreign automakers couldn't play.

386
00:37:02,276 --> 00:37:05,878
Would they be able to attract foreign direct investment from other sectors?

387
00:37:05,918 --> 00:37:06,609
They wouldn't.

388
00:37:06,609 --> 00:37:07,968
So that's a...

389
00:37:07,968 --> 00:37:08,248
point.

390
00:37:08,248 --> 00:37:18,842
And looking at Porsche specifically kind of talking about product mix and, almost product
stagnation, they've got some great products, but as far as like that level of iteration,

391
00:37:18,842 --> 00:37:25,884
especially on their electric side, I'm kind of curious as to if that's part of it, along
with price point, in addition to,

392
00:37:27,205 --> 00:37:29,037
I know we were going to talk a little bit about terrorists.

393
00:37:29,037 --> 00:37:30,588
can get to that in a second.

394
00:37:30,588 --> 00:37:36,453
But I guess the one other question I wanted to ask you was talking about the price war
that did kick this off on Tesla's side.

395
00:37:36,534 --> 00:37:38,275
Do you see that?

396
00:37:38,275 --> 00:37:39,797
Has that hurt them?

397
00:37:39,797 --> 00:37:42,289
Has that been a benefit to them or has that hurt them more?

398
00:37:42,289 --> 00:37:44,861
You think in China?

399
00:37:47,378 --> 00:37:48,573
I think.

400
00:37:51,020 --> 00:37:57,240
They still have that distortion force field around them.

401
00:37:58,120 --> 00:38:15,000
And if there was a $25 ,000 Model 2 that launched tomorrow, it wouldn't be a knockout win
in China because there's already a ton of $25 ,000 great EVs, many from BYD.

402
00:38:15,580 --> 00:38:19,492
They would be successful in Europe and the United States for sure.

403
00:38:19,853 --> 00:38:23,437
Why they haven't launched something like that yet, I don't know.

404
00:38:24,145 --> 00:38:27,825
There, well, it's interesting you say that, or I I'm sorry, continue.

405
00:38:28,905 --> 00:38:39,545
Well, I was going to say one of the theories now it sounds like they are bringing out a
$25 ,000 car again, sometime in 2025, but one of the big theories as to why they had

406
00:38:39,545 --> 00:38:46,785
stopped that was due to how many $25 ,000 cars there already are in China and are being
planned to ship globally.

407
00:38:46,785 --> 00:38:49,617
So I'm curious to see what if.

408
00:38:49,617 --> 00:38:58,057
that does follow through with a $25 ,000 vehicle in 2025, what it is they're going to
bring to market to stand out.

409
00:38:58,057 --> 00:39:01,157
And we'll see if that does follow through.

410
00:39:01,357 --> 00:39:09,297
I guess going to, unless there was anything else you wanted to talk about, I would be kind
of curious to talk with you about tariffs.

411
00:39:09,810 --> 00:39:13,181
Let me pull back to Porsche a little bit.

412
00:39:13,181 --> 00:39:20,483
Let me explain why I think it's going sideways for Porsche in China.

413
00:39:20,563 --> 00:39:30,866
Because they were effectively a niche player, 911s, Caymans, and Boxsters.

414
00:39:30,866 --> 00:39:32,566
And then they launched the Cayenne.

415
00:39:32,566 --> 00:39:35,967
Then they launched the Macan.

416
00:39:36,268 --> 00:39:38,348
Those vehicles in China,

417
00:39:38,366 --> 00:39:42,019
A disproportionate number of those vehicles sell to women.

418
00:39:43,140 --> 00:39:45,872
And we know Porsche as a heritage brand.

419
00:39:45,872 --> 00:39:48,424
We also know it as product focused.

420
00:39:48,424 --> 00:39:50,746
It's not customer focused.

421
00:39:51,007 --> 00:39:56,290
And when they sold nine 11s, performance vehicles, men loved it.

422
00:39:56,311 --> 00:39:56,731
Right.

423
00:39:56,731 --> 00:39:57,912
I loved it.

424
00:39:57,972 --> 00:39:59,713
But guess what?

425
00:40:00,174 --> 00:40:07,700
When half of your sales are SUVs that and a good number of those sales go to women.

426
00:40:08,044 --> 00:40:10,584
You can't be product focused anymore.

427
00:40:11,744 --> 00:40:29,384
And especially when Lotus launches an SUV, Polestar launches an SUV, Zekor launches, you
know, they're because before this is the amazing thing about Porsche.

428
00:40:29,384 --> 00:40:37,826
They entered China in 2001, never had a down quarter until last year, 2023, always grew.

429
00:40:38,348 --> 00:40:45,548
And Porsche only sells around 380 ,000 units worldwide.

430
00:40:45,788 --> 00:40:52,128
But 50 % of Porsche's profits come from China and a lot of their volume.

431
00:40:52,348 --> 00:41:02,788
So in 2023, Porsche actually grew by 2 % despite losing 15 % of sales because Europe and
the United States took up some of that slack.

432
00:41:02,788 --> 00:41:07,228
But they can't expect that to continued.

433
00:41:07,884 --> 00:41:12,889
To your point, does the McCann EV move the needle far enough?

434
00:41:12,889 --> 00:41:13,790
Right.

435
00:41:13,790 --> 00:41:17,683
Yeah, I guess that was going to be the only other thing I was going to talk about that was
I could be mistaken.

436
00:41:17,683 --> 00:41:19,544
I believe Porsche sales are down.

437
00:41:19,544 --> 00:41:30,203
At least the SUVs are already down domestically because of kind of them waiting to come
out and deliver the new Macan EV.

438
00:41:30,243 --> 00:41:37,208
And I think the new version of the Taycan, it just showed like that sales of those
previous gen had nosedived.

439
00:41:37,445 --> 00:41:43,632
I'm kind of wondering, and I guess we'll see how much of that is due to that gap between
the new product coming out.

440
00:41:43,913 --> 00:41:53,725
and obviously is detrimental to them when you have these brands that are able to come out
with a new thing so quickly and deliver it to a market that's looking for those products.

441
00:41:53,924 --> 00:41:57,657
In China, least, Chase, it's not just Porsche.

442
00:41:57,657 --> 00:42:10,697
If you look at ABB, what we call Audi, Bimmer, Benz in China, their sales have cratered a
bit too.

443
00:42:10,918 --> 00:42:12,999
They're getting squeezed both ways.

444
00:42:13,781 --> 00:42:19,906
The ICE vehicles have lost favor from the China, generally speaking.

445
00:42:19,906 --> 00:42:23,328
And then the EVs that they've launched,

446
00:42:23,372 --> 00:42:25,972
have just not resonated very well.

447
00:42:25,972 --> 00:42:35,242
And so where 15 years ago, you could sell a BMW just because of the logo on the hood, you
can't do that anymore.

448
00:42:35,242 --> 00:42:45,592
And let me assure you, my first job at GM, that was my first job out of college working at
GM, I worked at the Oren Assembly Center.

449
00:42:46,032 --> 00:42:52,964
We built five cars, the Oldenville, Aurora, the Sabre, the, shoot.

450
00:42:53,672 --> 00:43:01,037
I forget, but we built five cars there and it became an EV plant, is where they built the
bolt.

451
00:43:01,037 --> 00:43:03,039
So there's an irony to that.

452
00:43:03,039 --> 00:43:05,781
And so I, and I grew up here.

453
00:43:05,781 --> 00:43:09,923
So I mean, talking cars is like breathing to me.

454
00:43:10,184 --> 00:43:19,950
And let me assure your audience chase that Chinese EVs quality wise are some of the best
in the world, full stop.

455
00:43:19,950 --> 00:43:22,610
And you're talking to someone who's

456
00:43:22,610 --> 00:43:26,081
lit or worked at several factories.

457
00:43:26,301 --> 00:43:38,784
And so I have no problem saying that and I'd put money on it because if you talk to some
of your German friends who worked in the automotive space, if there be an objective,

458
00:43:38,784 --> 00:43:44,987
they'll tell you, wow, this has improved significantly over a short period of time.

459
00:43:45,068 --> 00:43:46,878
know, a case in point.

460
00:43:47,067 --> 00:43:54,436
think anyone that says otherwise lately just shows that they haven't been behind one or
haven't seen one in person.

461
00:43:56,159 --> 00:43:57,400
Also fair.

462
00:43:58,562 --> 00:44:00,864
As we were talking about earlier.

463
00:44:01,324 --> 00:44:09,324
In a quick case in point chase, I landed in Beijing in 2009.

464
00:44:09,324 --> 00:44:12,664
One of the first cars I got into was a BYD.

465
00:44:12,724 --> 00:44:17,724
And I was just not impressed because nah, I'm the car guy, right?

466
00:44:17,724 --> 00:44:19,864
I'm like, man, this car's terrible.

467
00:44:19,864 --> 00:44:20,674
This car's terrible.

468
00:44:20,674 --> 00:44:25,164
The doors are paper thin and like, just, you know, didn't feel safe.

469
00:44:25,164 --> 00:44:27,564
The quality of materials was not great.

470
00:44:27,564 --> 00:44:31,268
You get into a BYD right now, you'd be like, wow.

471
00:44:31,833 --> 00:44:37,142
I don't know how the Detroit three are going to compete with this.

472
00:44:37,142 --> 00:44:41,188
Then you look at the price tag, you're like, there's no way they can compete with this.

473
00:44:41,850 --> 00:44:45,776
So they have their work cut out for

474
00:44:47,013 --> 00:44:57,392
Well, I guess talking about BYD, as you mentioned earlier, a lot of their sales are P
Heavs and domestically, obviously the big three and everyone was, especially when Wall

475
00:44:57,392 --> 00:44:59,864
Street was behind it or pushing for it.

476
00:44:59,864 --> 00:45:08,422
Everyone was all in on EVs and now really this past year, EV sales are still actually
doing pretty well, even though headlines are kind of like distorting some of those

477
00:45:08,422 --> 00:45:09,372
numbers.

478
00:45:09,933 --> 00:45:10,933
Yeah.

479
00:45:11,354 --> 00:45:11,755
Right.

480
00:45:11,755 --> 00:45:12,225
Exactly.

481
00:45:12,225 --> 00:45:12,895
but

482
00:45:14,851 --> 00:45:17,794
Now they're kind of going back and doubling down on P hubs.

483
00:45:17,794 --> 00:45:26,992
I think it's interesting, especially when I talk to friends of mine who are big truck
guys, they're pretty skeptical of EVs, but they're like, yeah, P hubs makes sense.

484
00:45:27,032 --> 00:45:36,981
And I have my own kind of pros and cons of that, but I'm kind of curious looking at the
growth of a plugin hybrids in China.

485
00:45:37,197 --> 00:45:43,052
Is your feeling that there's a similar sentiment that a lot of the buyers are kind of
like, this makes sense.

486
00:45:43,052 --> 00:45:54,650
I would rather get this over an EV or does price and maybe, life's, is there more of like
a practicality of choosing a P have or an EV or what is it?

487
00:45:54,691 --> 00:46:02,357
I'm just kind of curious of what the sentiment towards that is there versus what we see
here between the two types of vehicles.

488
00:46:03,924 --> 00:46:11,593
I believe they see the success that BYD has on the BEV side and the PHUV side.

489
00:46:11,593 --> 00:46:19,340
And so in order to attract a broader market, they're gonna offer BEVs and PHUVs.

490
00:46:19,441 --> 00:46:22,384
And also...

491
00:46:24,714 --> 00:46:28,837
The tier one cities, so there's four tier one cities in China.

492
00:46:28,837 --> 00:46:30,668
I think there might be more.

493
00:46:30,788 --> 00:46:37,673
I think they approved a couple more, but traditionally it's Beijing, Shanghai, Shenzhen,
and Guangzhou.

494
00:46:38,234 --> 00:46:43,837
Those cities are pretty saturated with NEVs.

495
00:46:44,238 --> 00:46:52,844
And if we go to the tier two cities, we're talking like Wuhan, we're talking like Tianjin,
Wuxi, Changsha.

496
00:46:53,356 --> 00:46:59,676
There's still large cities, seven, 10, 12 million people, but charging infrastructure
isn't as mature.

497
00:46:59,736 --> 00:46:59,996
Okay.

498
00:46:59,996 --> 00:47:09,236
And then you get into the, even the lower tier cities, the tier three and tier four cities
that still have millions of people, by the way, the charging infrastructure and investment

499
00:47:09,236 --> 00:47:11,276
hasn't reached there either.

500
00:47:11,276 --> 00:47:23,040
And so we're likely seeing some of the PHEV sales and the sales growth in China, not only
because there's more products to choose from,

501
00:47:23,040 --> 00:47:28,183
but because the clean energy movement is moving to the lower tier cities.

502
00:47:28,583 --> 00:47:30,943
And I'm not a purist.

503
00:47:30,943 --> 00:47:35,567
So, a BEV or a PHEV is a win in my book.

504
00:47:35,567 --> 00:47:37,268
Let's chalk it up as a win.

505
00:47:37,268 --> 00:47:43,871
And then you look at Toyota, who was very hesitant to go all in.

506
00:47:44,052 --> 00:47:46,973
And let me backtrack a second.

507
00:47:47,093 --> 00:47:52,436
Ford, GM, they were always wrong with their forecasts.

508
00:47:52,620 --> 00:47:54,740
in being so bullish.

509
00:47:54,740 --> 00:48:09,860
Because if we look at it practically, if you're charging almost $60 ,000 for an F -150
Lightning, why would you ever say that you're going to start sales at $40 ,000?

510
00:48:09,860 --> 00:48:15,780
What spreadsheet are you looking at that made you confident to announce that to the
public?

511
00:48:15,780 --> 00:48:21,940
Because if you're buying the batteries from China, possibly, right?

512
00:48:21,940 --> 00:48:22,324
But

513
00:48:22,324 --> 00:48:27,406
your risk management teams and these companies have huge risk management teams.

514
00:48:27,406 --> 00:48:40,581
There had to have been some sort of heads up that says the US government is looking at
making, you know, dialing up restrictions on Chinese batteries and or, you know, slapping

515
00:48:40,581 --> 00:48:41,932
tariffs on them.

516
00:48:41,932 --> 00:48:49,535
And so the forecast numbers were never real to begin with.

517
00:48:49,535 --> 00:48:51,996
And so these Mia Copas that

518
00:48:52,064 --> 00:49:02,409
the CEOs have had to make, just thought, just never thought they were real numbers to
begin with.

519
00:49:02,450 --> 00:49:09,684
And I honestly, and you know this Chase, but I've been writing my newsletter for six,
seven years.

520
00:49:09,684 --> 00:49:17,038
And I wrote about that right when they were talking about these forecasts because I was
still in China at the time.

521
00:49:17,038 --> 00:49:21,540
And I was like, my first question was like, where are they sourcing their batteries from?

522
00:49:21,644 --> 00:49:32,704
The reason batteries are so important in case your audience does not know this is because
it's 30 to 40 % of the cost of manufacturing an electric vehicle.

523
00:49:32,704 --> 00:49:38,824
So you dial down the cost on a battery, all of a sudden it might become profitable.

524
00:49:39,397 --> 00:49:39,917
For sure.

525
00:49:39,917 --> 00:49:45,629
I guess, just default, like one final part of that is, I, I appreciate all that.

526
00:49:45,629 --> 00:49:46,980
That's really interesting.

527
00:49:46,980 --> 00:49:48,840
And that makes a lot of sense.

528
00:49:48,840 --> 00:49:52,071
I guess what I'm asking or curious about is.

529
00:49:52,071 --> 00:50:02,045
I think you're spot on with the company, mindset and execution of EVs versus P house.

530
00:50:02,223 --> 00:50:08,336
But I'm kind of curious about, and it sounds like you kind of answered it about the
consumer mindset of P Heavs versus Bev.

531
00:50:08,336 --> 00:50:21,904
It sounds like for a lot of people in China, if you're in a smaller, let's say city and
there's not the charging infrastructure, the P Heavs is a pretty good option, but there

532
00:50:21,904 --> 00:50:23,649
the buyer wouldn't.

533
00:50:23,649 --> 00:50:28,553
necessarily be closed off to getting a Bev if it fit into their lifestyle.

534
00:50:28,553 --> 00:50:36,530
And it just seems like so much of what I've been hearing, it kind of the American
sentiment from let's say more like middle America or traditional truck buyers that I have

535
00:50:36,530 --> 00:50:37,600
as friends.

536
00:50:37,601 --> 00:50:43,886
It's like the idea of a fully electric vehicle, they're not sold on, but a P have is kind
of that balance.

537
00:50:43,886 --> 00:50:47,941
And so to me, it's interesting that the Chinese consumers open to either

538
00:50:47,941 --> 00:51:01,629
but chooses it based on reality versus, and in some ways, some of it is product fit to
product availability, but someone who is completely shut off from the idea of ever buying

539
00:51:01,629 --> 00:51:02,039
a Bev.

540
00:51:02,039 --> 00:51:04,691
And so they're just going to go with the P have, does that make sense?

541
00:51:04,691 --> 00:51:07,012
That's kind of what I'm talking about.

542
00:51:07,012 --> 00:51:14,336
And is that, would you say that's kind of an accurate reflection of what we're seeing
maybe in the Chinese market versus obviously the uphill battles, maybe domestically around

543
00:51:14,336 --> 00:51:16,227
the Bev versus be have idea.

544
00:51:16,790 --> 00:51:17,790
Here's what I would say.

545
00:51:17,790 --> 00:51:20,091
I think there's a Venn diagram here, right?

546
00:51:20,091 --> 00:51:41,557
There's a circle of BVB buyers, a circle of PHEB buyers, and there's an overlap where they
are curious about battery electric vehicles, but maybe aren't confident that the area that

547
00:51:41,557 --> 00:51:46,763
they live in will invest in their grid in...

548
00:51:46,763 --> 00:51:59,923
Increase the number of charging stations because one of the things that I've figured out
driving this Lucid for the last few days is that charging infrastructure in the United

549
00:51:59,923 --> 00:52:02,383
States still is horrible.

550
00:52:02,383 --> 00:52:07,723
It's terrible specifically in Michigan and I live in Metro Detroit.

551
00:52:07,723 --> 00:52:11,023
I'm 15 miles from the city proper.

552
00:52:11,023 --> 00:52:13,303
I don't know if that was an OEM.

553
00:52:13,303 --> 00:52:16,652
We don't want chargers and so we're not going to.

554
00:52:16,652 --> 00:52:28,692
try to encourage, but it is, I have to, get to a 350 watt charger, a kilowatt charger, I
have to drive seven miles.

555
00:52:29,792 --> 00:52:35,752
And so that just seems really, really terrible.

556
00:52:35,752 --> 00:52:37,892
Cause you know, this is a loaner.

557
00:52:37,892 --> 00:52:38,812
I don't have an EV yet.

558
00:52:38,812 --> 00:52:45,000
So I don't have a, charger at my home and I'm not

559
00:52:45,000 --> 00:52:48,684
looking to spend four hours, five hours at a charger.

560
00:52:48,684 --> 00:52:58,514
And so the fast chargers, few and far between, if you can find a charger that's within a
few miles of your home.

561
00:52:58,514 --> 00:53:04,659
And so that's why you would, in the United States, would want to buy a PHEV.

562
00:53:05,433 --> 00:53:07,484
No, I think that's a great point.

563
00:53:07,484 --> 00:53:15,337
and it's interesting you bring that up because, we've had this, we've talked about this
with a couple other people in the podcast recently about how many automakers when you can

564
00:53:15,337 --> 00:53:18,928
choose like your company vehicle that electric vehicles weren't even an option.

565
00:53:18,928 --> 00:53:26,351
There's these companies that are trying to sell electric vehicles and then the people that
are in charge of like designing it and like thinking the product.

566
00:53:26,351 --> 00:53:30,043
Don't even drive them and understand that experience.

567
00:53:30,084 --> 00:53:35,387
And obviously, as a lot of people know that if you drive, if you have a home and you're
able to do.

568
00:53:35,408 --> 00:53:36,689
Have a battery electric vehicle.

569
00:53:36,689 --> 00:53:37,039
Yeah.

570
00:53:37,039 --> 00:53:47,246
Most of the time you're doing level two, but, so much of the public fast charging,
unfortunately in the U S is not up to grade and it's shocking.

571
00:53:47,246 --> 00:53:54,231
I still haven't been and witnessed it firsthand, but I consistently do hear from people in
the Detroit area who still talk about.

572
00:53:54,395 --> 00:53:56,547
how bad public charging is.

573
00:53:56,547 --> 00:54:06,376
And you would think that that would be something that a lot of the people and the
companies in that area would be very focused on trying to change that experience and also

574
00:54:06,376 --> 00:54:12,102
that mindset internally to have their own employees be driving them and experiencing to
see where they can make those improvements.

575
00:54:12,102 --> 00:54:15,364
But now I'm just complaining, I guess.

576
00:54:16,205 --> 00:54:23,847
Tesla has, one of the big reasons Tesla has loyalty, because of their supercharging
network.

577
00:54:24,807 --> 00:54:31,929
Tesla buyers, they don't have to experience what I've experienced the last three days.

578
00:54:32,550 --> 00:54:41,412
And so if I was an OEM, I would find a way to partner with EVgo.

579
00:54:41,452 --> 00:54:47,962
or one of these network providers, charging infrastructure providers, and own the customer
experience.

580
00:54:47,962 --> 00:55:00,212
If I truly want to increase sales of EVs of my vehicles, now remember, the major OEMs have
all moved over to the NACS Plus.

581
00:55:00,212 --> 00:55:10,528
And I think starting in 2025 model year, the charging or the whole and the female in the
vehicle

582
00:55:10,528 --> 00:55:12,189
will all be NACS.

583
00:55:12,189 --> 00:55:13,550
So that should help.

584
00:55:13,550 --> 00:55:23,956
It's gonna suck for Tesla buyers or Tesla owners, but it should help the rest of the OEMs
because now there's this standard.

585
00:55:25,357 --> 00:55:27,518
there's an inevitability to it.

586
00:55:27,518 --> 00:55:33,161
would ping me with wanting to talk about some of the battery technology.

587
00:55:33,161 --> 00:55:36,003
It's not just battery technology, Chase.

588
00:55:36,003 --> 00:55:38,128
It's how fast chargers.

589
00:55:38,128 --> 00:55:38,726
for sure.

590
00:55:38,726 --> 00:55:40,547
now, like DC fast charging.

591
00:55:40,547 --> 00:55:48,899
In Detroit, there's a mile of highway or road that is charging under the road.

592
00:55:48,899 --> 00:55:49,350
forget.

593
00:55:49,350 --> 00:55:51,820
Like wireless charging is called.

594
00:55:51,900 --> 00:55:55,341
And so these are some of the kitschy stuff.

595
00:55:55,822 --> 00:55:58,822
don't look at it like an either or.

596
00:55:58,903 --> 00:56:00,843
OK, look at it like an.

597
00:56:00,863 --> 00:56:01,589
OK, so.

598
00:56:01,589 --> 00:56:04,649
Well, I know I completely agree with you.

599
00:56:04,649 --> 00:56:07,919
And I think that's what I was interested to hear your experience with.

600
00:56:07,919 --> 00:56:09,059
Because like you're totally right.

601
00:56:09,059 --> 00:56:19,859
Like in the US, we're starting to see some of the Hyundai stuff, of the like Porsche's new
generation can tip 300 kilowatts.

602
00:56:19,859 --> 00:56:25,445
Yeah, 800 volt, but like their actual charging is like around that 300 kilowatts spot.

603
00:56:25,489 --> 00:56:32,269
And then we have Tesla still kind of pretty much all their stuff does 250 or even the
Cybertruck I guess goes higher now.

604
00:56:32,269 --> 00:56:38,429
But then you look at what not only the chargers, but some of the energy density of the
batteries in the China.

605
00:56:38,429 --> 00:56:42,849
to be honest with you, I'm more interested in actually the charge speeds of these Chinese
EVs.

606
00:56:42,849 --> 00:56:46,169
But we have some that are in the 400 to 500 range.

607
00:56:46,169 --> 00:56:53,591
And I'm kind of curious if you've had any experience with trying or testing those out
firsthand, or if you

608
00:56:53,649 --> 00:57:03,869
think that that's, I don't know if you feel like any of these brands are trying to over
hype what's actually capable right now and what the cars can deliver or what, what you're

609
00:57:03,869 --> 00:57:14,489
just seeing or hearing from brands and the experience in China versus cause like, to me,
it's so ridiculous that so many us automakers are releasing brand new EVs and the best

610
00:57:14,489 --> 00:57:18,363
thing to do is 150 kilowatts, which yeah.

611
00:57:18,385 --> 00:57:19,486
It's horrible.

612
00:57:19,486 --> 00:57:26,129
So I've experienced battery swapping in China.

613
00:57:26,550 --> 00:57:28,971
Super, super, super convenient.

614
00:57:29,251 --> 00:57:31,072
And again, it's not an either or.

615
00:57:31,072 --> 00:57:33,974
It's not either charge or swap.

616
00:57:33,974 --> 00:57:35,094
It's and.

617
00:57:35,094 --> 00:57:37,776
You can charge and you can swap.

618
00:57:37,776 --> 00:57:44,273
So that to me is customer engagement.

619
00:57:44,273 --> 00:57:45,217
for sure.

620
00:57:45,612 --> 00:57:47,752
provide you options.

621
00:57:47,752 --> 00:57:57,972
And then on the charging side, so I'd mentioned earlier that I drove a Xpung G9, which is
the flagship SUV from Xpung.

622
00:57:57,972 --> 00:58:05,752
Five seater, large, it's probably about the size of a Land Cruiser, a Toyota Land Cruiser.

623
00:58:05,752 --> 00:58:10,512
And over three days, about 500 miles a day.

624
00:58:10,512 --> 00:58:14,692
And the battery, think it was 97 kilowatt hour battery.

625
00:58:15,180 --> 00:58:22,060
And we drove, so we would have to charge at least once during the day.

626
00:58:22,620 --> 00:58:31,900
We would drive from like, say 95 % to less than 20%.

627
00:58:31,900 --> 00:58:40,360
We'd go to the charging station, did not have any issues finding a working charger, none.

628
00:58:40,620 --> 00:58:42,028
They all worked.

629
00:58:42,028 --> 00:58:47,074
just to get that is unfortunately a huge win here in the States.

630
00:58:47,468 --> 00:58:55,908
And then the XPeng interface would tell you, okay, these are the chargers that you should
go to.

631
00:58:55,908 --> 00:59:01,048
So on the map, it would just tell you, go to this charger.

632
00:59:01,048 --> 00:59:16,110
And then it would take between 20 and 40 minutes, depending on the number of other EVs
being charged at the station.

633
00:59:16,172 --> 00:59:23,472
And so we would go from 20 % to 95 % in less than generally 30 minutes.

634
00:59:23,932 --> 00:59:36,972
So we would have lunch or whatever and then go and go to the hotel, charge it up, and then
have 95 again starting the next day.

635
00:59:37,552 --> 00:59:40,420
So that experience was...

636
00:59:42,038 --> 00:59:43,889
Quite pleasant.

637
00:59:43,889 --> 00:59:46,790
So we had two reasons to do this trip.

638
00:59:46,930 --> 00:59:55,734
Test the intelligent driving and experience the charging from northern China to southern
China.

639
00:59:55,734 --> 01:00:01,616
And so if you look on a map, Beijing is northern China and Shenzhen is very southern
China.

640
01:00:01,616 --> 01:00:07,099
so, you know, it was eye -opening.

641
01:00:07,099 --> 01:00:10,540
And now even I was in California.

642
01:00:10,540 --> 01:00:23,760
two months ago and I had rented a Kia Niro EV and This was California I was struggling to
find a Decent charger because it wasn't a Tesla.

643
01:00:23,760 --> 01:00:37,964
Okay, and then trying to find a 350 kilowatt hour charging station was really challenging
and then the third thing was It throttles you so you're not

644
01:00:37,964 --> 01:00:40,144
you're never at 350 kilowatt hours.

645
01:00:40,144 --> 01:00:42,184
You might be at 120.

646
01:00:42,184 --> 01:00:47,824
Even if there's no other vehicles being charged, you're never hitting that 350.

647
01:00:47,824 --> 01:00:53,744
Because if you did, you'd be on your way within 20, 30 minutes.

648
01:00:53,824 --> 01:01:06,284
So that's a bit frustrating because the Lucid even, I was at a 350 kilowatt hour charger,
and there was a car next to me using the same charging station.

649
01:01:06,284 --> 01:01:07,306
So I thought,

650
01:01:07,306 --> 01:01:10,061
When they unplugged, I would see a jump.

651
01:01:10,303 --> 01:01:12,005
Did not see a jump.

652
01:01:12,347 --> 01:01:13,900
So a bit frustrating.

653
01:01:13,900 --> 01:01:14,550
so.

654
01:01:15,653 --> 01:01:29,038
Well, I think that just totally hits on software, both on the infrastructure side and on
the car side, because I think that's still an area where even the Rivians and the Lucids,

655
01:01:29,038 --> 01:01:37,981
who I think do above average, still aren't as good as Tesla when it comes to that
advantage of just telling you where you're going to be.

656
01:01:38,167 --> 01:01:44,763
How long it essentially removes having to think about anything and just the fact that you
can do the plug and charge functionality.

657
01:01:44,763 --> 01:01:49,486
I, something I say on this podcast a lot is for a technology to take off.

658
01:01:49,486 --> 01:01:50,688
doesn't have to be just as good.

659
01:01:50,688 --> 01:01:52,148
It has to be better.

660
01:01:52,449 --> 01:01:56,262
And for kind of the Tesla experience where you just plug in, you don't even think about
it.

661
01:01:56,262 --> 01:01:56,943
You can walk away.

662
01:01:56,943 --> 01:01:58,144
You don't have to swipe a card.

663
01:01:58,144 --> 01:02:04,559
That's still better than a gas station where you have to swipe a car and it's not that
hard, but it's like when you're on a road trip, especially when you've been in the car for

664
01:02:04,559 --> 01:02:06,821
like three hours and you have to be lined to the bathroom.

665
01:02:06,821 --> 01:02:08,401
It is so nice to just plug in and walk away.

666
01:02:08,401 --> 01:02:11,622
Don't even think about it, let alone to deal with that.

667
01:02:12,403 --> 01:02:17,644
so the car is proactively kind of told you where to go down the charging and figuring out
how long.

668
01:02:17,644 --> 01:02:23,286
And you can either do that or, and it clearly gives you other options, kind of like your
experience.

669
01:02:23,286 --> 01:02:31,538
And then once you get to a charger, the charger does the software of like managing the
site instead of it being this kind of kind of chaotic thing.

670
01:02:31,538 --> 01:02:35,533
And I think that's where just this level of customer.

671
01:02:35,533 --> 01:02:40,354
experience is like night and day between still kind of the Teslas of the world.

672
01:02:40,354 --> 01:02:45,436
Some of the stuff that Porsche has come out of this new level is finally like getting
there from what I've seen at least.

673
01:02:45,786 --> 01:02:50,027
and then really most Chinese automakers are already just kind of doing this day one.

674
01:02:50,357 --> 01:02:56,159
and I think that that's still just going to be inherently, until that is solved by others.

675
01:02:56,159 --> 01:03:03,321
That's just going to be why other people just don't understand how living with an EV
really is not a challenge.

676
01:03:03,321 --> 01:03:04,841
In fact, it's an improvement.

677
01:03:05,051 --> 01:03:05,836
for most people.

678
01:03:05,836 --> 01:03:09,477
Two comments on that because I agree with you.

679
01:03:09,598 --> 01:03:16,901
First of all, legacy automakers are normally, like Porsche, product focused.

680
01:03:16,901 --> 01:03:19,482
So they focus on the vehicle.

681
01:03:19,482 --> 01:03:20,783
They don't focus.

682
01:03:20,783 --> 01:03:22,544
And then you look at technology companies.

683
01:03:22,544 --> 01:03:31,468
In order to get stickiness on your app, on your e -commerce website, you gotta be user
focused.

684
01:03:31,468 --> 01:03:32,334
Tesla made...

685
01:03:32,334 --> 01:03:41,124
further and look at it as like platform platform versus just the product kind of speaking
of the software realm where you have to look at the multiple customer interaction points,

686
01:03:41,124 --> 01:03:41,834
but I'm sorry.

687
01:03:41,834 --> 01:03:42,755
Continue.

688
01:03:43,436 --> 01:03:49,436
No, I think you make a great point because again, Tesla made it seamless, right?

689
01:03:49,436 --> 01:03:50,776
Frictionless, right?

690
01:03:50,776 --> 01:03:54,136
I park, I plug and I go.

691
01:03:54,436 --> 01:03:54,926
You're right.

692
01:03:54,926 --> 01:03:58,576
I don't need to look at the screen to make sure it's charging.

693
01:03:58,576 --> 01:04:04,456
I don't need to wait, you know, 10, 12 seconds to make sure everything works.

694
01:04:05,036 --> 01:04:05,956
Yeah.

695
01:04:05,956 --> 01:04:06,516
my God.

696
01:04:06,516 --> 01:04:10,296
And so the second part is really, really important.

697
01:04:10,296 --> 01:04:12,950
And I'm not sure a lot of people really

698
01:04:12,950 --> 01:04:14,068
Get this.

699
01:04:16,008 --> 01:04:18,409
Apple and Tesla have closed systems.

700
01:04:18,409 --> 01:04:19,820
They build their own chargers.

701
01:04:19,820 --> 01:04:25,954
They build their own software to integrate the hardware part to the software part.

702
01:04:25,954 --> 01:04:33,157
And so that's how they can create a non -buggy seamless experience.

703
01:04:34,078 --> 01:04:45,714
And in theory, if you're using somebody else's charging infrastructure, you could in
theory create a seamless experience, but

704
01:04:45,866 --> 01:04:57,382
That means that this third party charging station that charges GM vehicles, Ford vehicles,
Kia vehicles needs to cooperate.

705
01:04:57,962 --> 01:05:08,061
And so where a challenge might be for Tesla is now that they're accepting non -Tesla
vehicles, there could be some bugs that emerge from that.

706
01:05:08,061 --> 01:05:17,250
have seen the kind of reports of that with people having some challenges or not getting
the full speeds or sometimes it derating a little bit because of heat unexpectedly.

707
01:05:17,250 --> 01:05:26,959
Whereas yeah, having that closed loop system requires a lot of work, but delivers usually
the optimal experience and gets a lot of that friction out of the way.

708
01:05:26,959 --> 01:05:28,680
I completely agree with you.

709
01:05:29,458 --> 01:05:42,444
And the other important aspect, and you know this, is that it's not only the software and
battery management system of the charging station, but also the vehicle that kind of sets

710
01:05:42,444 --> 01:05:45,735
the stage for a successful charging experience.

711
01:05:45,807 --> 01:05:49,019
And I think, well, I was just going to add to that.

712
01:05:49,019 --> 01:06:00,157
think, something we both can have discussed is like the hardware element of the EV
infrastructure is huge when it comes to being able to deliver and continuously deliver,

713
01:06:00,157 --> 01:06:03,448
but I still think a lot of them are falling or

714
01:06:04,591 --> 01:06:12,786
really missing on the software level of how you take this hardware and actually kind of
make it think or make it smart in the fact of like your experience exactly.

715
01:06:12,786 --> 01:06:14,207
Like maybe it was hardware limited.

716
01:06:14,207 --> 01:06:25,013
Maybe there was some other issue going on, but it should know the instant that other car
unplugs that yours should just shoot way to the top and meet what it needs versus this

717
01:06:25,013 --> 01:06:30,897
kind of lag of just not doing that for the user.

718
01:06:31,508 --> 01:06:38,731
And what's important here, Chase, is that as a consumer, I don't really care what the
problem is, fix it.

719
01:06:39,592 --> 01:06:47,935
You know, why do I have to stand there and figure out and be confused and be frustrated?

720
01:06:47,935 --> 01:06:50,219
Like, holy cow, man.

721
01:06:50,219 --> 01:06:51,720
or confused when I fuel my car.

722
01:06:51,720 --> 01:06:56,321
just swipe the card, plug it in or put the gas pump in and it works.

723
01:06:56,321 --> 01:06:58,862
And I completely, you are preaching the choir.

724
01:06:58,862 --> 01:07:05,304
cannot, and I wish more people would understand that and kind of hear that, in the
industry to really resolve this.

725
01:07:05,304 --> 01:07:09,375
But I do realize we've already gone over a bit over time.

726
01:07:09,515 --> 01:07:14,997
And, if you have a few minutes, I would just like to talk with you still on the tariff
side of stuff.

727
01:07:14,997 --> 01:07:16,876
Can you go a few minutes longer or?

728
01:07:16,876 --> 01:07:18,551
Yeah, I can go till 3 .30.

729
01:07:18,551 --> 01:07:28,466
Okay then yeah let's just real quickly I would just love to kind of get your thoughts on
what we're seeing especially we're going to election year here in the US and not trying to

730
01:07:28,466 --> 01:07:38,241
get too into the political thing but there's obviously already been just recently with
Biden increasing the tariffs on Chinese EVs and talk of that changing in other markets too

731
01:07:38,241 --> 01:07:42,413
not just the US and I'm kind of curious on your perspective of what that

732
01:07:42,413 --> 01:07:53,184
has signaled to the Chinese automakers and if they're actually really that concerned about
it or what, those kinds of impacts have and, any ideas that China has maybe shared about

733
01:07:53,184 --> 01:07:56,927
how they're going to maybe put their own tariffs on certain vehicles.

734
01:07:58,990 --> 01:07:59,930
Yeah.

735
01:07:59,930 --> 01:08:00,181
Yeah.

736
01:08:00,181 --> 01:08:03,504
This might, this could easily be its own podcast.

737
01:08:03,504 --> 01:08:06,367
I realize, but just, any high level things.

738
01:08:06,367 --> 01:08:07,107
Yeah.

739
01:08:08,460 --> 01:08:17,860
first of all, the Inflation Reduction Act put a 100 % tariff on Chinese EVs entering the
United States.

740
01:08:17,860 --> 01:08:25,420
There was already a 27 .5 or 25 % tariff that the Trump administration had slept on in
2018.

741
01:08:25,700 --> 01:08:28,140
Before that, there was always a 2 .5%.

742
01:08:28,140 --> 01:08:33,220
So that's why when people talk 27 .5%, it's 25 plus 2 .5.

743
01:08:33,228 --> 01:08:40,568
Now with this 100%, it's really made it very, very unattractive for Chinese EV makers to
enter the United States market.

744
01:08:40,568 --> 01:08:48,088
And so that's when you heard rumors about BYD and certain Chinese EV companies entering
through Mexico.

745
01:08:49,008 --> 01:08:52,328
And I'll get back to that.

746
01:08:52,328 --> 01:09:00,994
But then you saw the EU do an investigation and just yesterday, they, I think, finalized
the tariff rates.

747
01:09:01,100 --> 01:09:02,400
on certain brands.

748
01:09:02,400 --> 01:09:05,900
Tesla is at 9%, BYD is at 17%.

749
01:09:05,900 --> 01:09:13,020
So there was already a 10 % tariff for Chinese vehicles entering Europe.

750
01:09:13,020 --> 01:09:19,020
So at 17 and 10, BYD has 27 .5 % or 27%.

751
01:09:19,020 --> 01:09:31,148
And then SAIC, which is Shanghai Auto, which happens to be the state -owned enterprise
with joint ventures with General Motors and Volkswagen in China, they own

752
01:09:31,148 --> 01:09:33,628
a British brand called MG.

753
01:09:34,408 --> 01:09:42,708
And because they weren't very cooperative with the investigation that you had done, they
were slapped with a 36 % tariff.

754
01:09:42,708 --> 01:09:45,488
So basically 50%.

755
01:09:45,488 --> 01:09:47,748
And so they're not very happy.

756
01:09:47,748 --> 01:09:55,008
That being said, we see that BYD is going to be building in Hungary and Poland and Turkey.

757
01:09:55,808 --> 01:09:57,518
So intended consequences.

758
01:09:57,518 --> 01:10:00,182
The EU wants jobs.

759
01:10:00,182 --> 01:10:02,573
production to come to Europe.

760
01:10:02,573 --> 01:10:03,003
Okay.

761
01:10:03,003 --> 01:10:16,328
The United States, it's a little, it's so political still because November we're going to
elect a new president and hopefully in January, we're going to peacefully transition to

762
01:10:16,328 --> 01:10:18,520
the next president.

763
01:10:18,720 --> 01:10:27,384
So two weeks ago, there was an article about the Biden administration.

764
01:10:27,951 --> 01:10:35,940
restricting Chinese technology for intelligent driving.

765
01:10:35,940 --> 01:10:41,958
If we think about the USMCA, which is the revamped NAFTA,

766
01:10:43,840 --> 01:10:50,062
That was the loophole that Chinese EV makers had to build in Mexico to ship the United
States tariff free.

767
01:10:51,263 --> 01:10:56,725
This might be the Biden administration's way of closing that loophole.

768
01:10:57,606 --> 01:11:13,722
Because now if that becomes a policy, the Chinese EV makers would need to basically have
two bills of material, one for the West and one for China.

769
01:11:14,528 --> 01:11:19,529
they're likely, Chinese EV companies can't afford to do that.

770
01:11:19,529 --> 01:11:21,490
So that's a limiting factor.

771
01:11:21,490 --> 01:11:37,815
But instead of reconciling with Mexico and browbeating them to not accept foreign direct
investment by Chinese EV companies, I think this is the Biden administration's way of,

772
01:11:37,815 --> 01:11:39,715
again, closing that loophole.

773
01:11:39,715 --> 01:11:43,176
So that pushes out EV

774
01:11:44,338 --> 01:11:49,850
and Chinese EVs coming to the United States likely for at least two or three years.

775
01:11:49,850 --> 01:11:50,910
Okay.

776
01:11:50,991 --> 01:12:01,695
I don't see Trump or Harris, either presidential candidate, lifting that hundred percent
tariff.

777
01:12:01,695 --> 01:12:12,759
But what I do see potentially is, you mean Trump said it point blank, you can build in the
United States.

778
01:12:12,920 --> 01:12:13,972
And so

779
01:12:13,972 --> 01:12:27,988
What needs to be reconciled is if Chinese EV companies or Chinese companies are going to
be building in North America or Latin America, do we want to lose those jobs to Mexico,

780
01:12:27,988 --> 01:12:31,239
Canada, or any other place?

781
01:12:32,000 --> 01:12:42,944
You know, as a president, because if you think about it, Trump's main sources of support
or one of his main sources of support are the Southern states.

782
01:12:44,588 --> 01:12:59,128
How, what would be a great reward for a Mississippi governor and Alabama governor to have
BYD write them a $4 billion check and have BYD employ about two, three, 4 ,000 Americans

783
01:12:59,128 --> 01:13:01,168
in Mississippi or Alabama.

784
01:13:01,168 --> 01:13:01,858
Okay.

785
01:13:01,858 --> 01:13:05,268
So there's, there's that aspect of it.

786
01:13:05,288 --> 01:13:13,004
and, and now pre -tariff, pre inflation reduction act, pre European tariffs.

787
01:13:14,092 --> 01:13:17,672
there's already talk of overcapacity in China.

788
01:13:18,352 --> 01:13:24,502
Currently, most of that overcapacity is on the ICE side, the petrol side, okay?

789
01:13:24,502 --> 01:13:33,672
Because EV companies are much smaller, their manufacturing footprints are much smaller,
but it has the potential to increase significantly, okay?

790
01:13:33,752 --> 01:13:40,820
Because of the price war in China, many of these 140 brands,

791
01:13:40,874 --> 01:13:44,585
aren't very successful at selling into the domestic market.

792
01:13:45,406 --> 01:13:49,888
That dials up the pressure to send that capacity somewhere else.

793
01:13:50,808 --> 01:13:51,948
Okay?

794
01:13:51,989 --> 01:14:04,774
And so now that the United States is off limit for the short term, Europe is less
attractive because of these tariffs.

795
01:14:05,314 --> 01:14:09,556
We're going to see the pressure release valve

796
01:14:09,856 --> 01:14:16,799
be Southeast Asia, be Latin America, be South America, be Middle East, be Africa and
Australia.

797
01:14:16,879 --> 01:14:18,279
That's what we're going to see.

798
01:14:18,279 --> 01:14:24,402
Now, if we look at Canada, they're talking about putting a tariff up.

799
01:14:24,542 --> 01:14:27,603
And so it's going to exacerbate.

800
01:14:27,603 --> 01:14:37,527
If these countries don't want the excess capacity to go to their countries, they might
have to consider tariffs as well.

801
01:14:38,227 --> 01:14:40,008
And that's going to create a

802
01:14:40,044 --> 01:14:53,264
really, really weird situation in China because one thing that's really important Chase is
that it's not just Chinese brands that have over capacity.

803
01:14:53,544 --> 01:14:56,144
Volkswagen has over capacity in China.

804
01:14:56,144 --> 01:14:57,924
GM has over capacity.

805
01:14:57,924 --> 01:15:08,132
And if we look at all the announcements over the last 48 months, Volkswagen said that
they're going to be shipping ID series EVs to Europe.

806
01:15:08,716 --> 01:15:14,123
Ford already ships Chinese -made Lincoln Nautilus to the United States.

807
01:15:14,123 --> 01:15:16,725
GM ships Buick and Vision.

808
01:15:16,725 --> 01:15:20,031
it's not Chinese brands that are shipping.

809
01:15:20,031 --> 01:15:24,736
Tesla was the number one exporter last year from China.

810
01:15:24,916 --> 01:15:27,241
everybody is looking to make...

811
01:15:27,241 --> 01:15:30,221
that you brought up about like the 9 % Tesla has to pay.

812
01:15:30,221 --> 01:15:39,641
Cause I think a lot of people don't fully appreciate how many, even though they have a
factory in Germany, how many are being imported into Europe still from the Chinese plant

813
01:15:39,641 --> 01:15:42,441
for a lot of the LFP batteries and all that stuff.

814
01:15:42,561 --> 01:15:45,581
But no, mean, all of those are amazing points.

815
01:15:46,334 --> 01:15:57,940
believe that it's one of the reasons Berlin Gigafactory hasn't ramped completely because
they have a lot of capacity in Shanghai that needs to go somewhere that can't sell into

816
01:15:57,940 --> 01:16:00,882
the market because they have a four and five year old vehicle.

817
01:16:00,882 --> 01:16:07,326
So the demand isn't there and they can't keep on cutting price in order to try, because
it's the law of diminishing returns, right?

818
01:16:07,326 --> 01:16:08,537
How much lower can you go?

819
01:16:08,537 --> 01:16:09,187
so...

820
01:16:12,148 --> 01:16:15,445
I don't know if that answers your question on tariffs, but that's kind of...

821
01:16:15,445 --> 01:16:17,316
I think that's a great overview though.

822
01:16:17,316 --> 01:16:22,038
And I, like I said, I realized you're trying to squeeze a lot in and we're, coming up
right on that half hour mark.

823
01:16:22,038 --> 01:16:33,002
So I want to be respectful of your time, but no, I think that, that did answer stuff and,
really kind of dived into the other topic that we're seeing globally, not just in China,

824
01:16:33,002 --> 01:16:34,873
which is that over capacity.

825
01:16:35,013 --> 01:16:39,517
But unfortunately that's going to have to be for another conversation soon.

826
01:16:39,517 --> 01:16:43,030
And I just want to say thank you so much for coming on the podcast again, too.

827
01:16:43,030 --> 01:16:45,283
This is always so fascinating.

828
01:16:45,283 --> 01:16:50,377
And I realize I could probably just keep asking you questions all day, but there's, I know
you have only so much patience.

829
01:16:50,377 --> 01:16:53,050
So, no, I thank you again.

830
01:16:53,050 --> 01:16:54,751
Looking forward to doing this again soon.

831
01:16:54,751 --> 01:16:56,973
And this has been a great conversation.

832
01:16:57,780 --> 01:17:00,088
Hey, Chase, thanks for having me.

833
01:17:00,088 --> 01:17:04,793
And hopefully, we'll get an opportunity to meet in person sometime in the near future.

834
01:17:04,793 --> 01:17:05,434
I hope so too.

835
01:17:05,434 --> 01:17:16,331
And I guess, I will have links in the show notes, but for anyone, that's listening, what,
what are the best ways to engage with you and Sino auto insights and any, maybe

836
01:17:16,331 --> 01:17:20,997
opportunities in person or other events that you'd like to promote real quickly.

837
01:17:22,390 --> 01:17:27,102
So I'd mentioned earlier, we write a weekly newsletter.

838
01:17:27,283 --> 01:17:30,944
You can find it at SinoAutoInsights .substack .com.

839
01:17:31,405 --> 01:17:37,748
I think there's a decent number of readers that appreciate my perspective on the market.

840
01:17:37,748 --> 01:17:39,609
We get into a little more detail.

841
01:17:39,650 --> 01:17:42,831
I also co -host a podcast called China EVs and More.

842
01:17:42,831 --> 01:17:46,513
You can find it on all the major podcast platforms.

843
01:17:46,613 --> 01:17:48,715
We have a pretty global audience.

844
01:17:48,715 --> 01:17:51,508
We get into the minutia of

845
01:17:51,508 --> 01:17:55,689
what happens every week in the China EV industry.

846
01:17:56,250 --> 01:17:57,250
Thanks.

847
01:17:57,651 --> 01:18:04,613
yeah, I will be in Vancouver the first week in September for fully charged.

848
01:18:04,613 --> 01:18:10,676
think I'm sitting in a panel, might be moderating one, but if you are in Vancouver, you
don't get in touch.

849
01:18:10,676 --> 01:18:20,412
And then yeah, you can just find me normally being interviewed or quoted by most of the
main media outlets as well.

850
01:18:20,412 --> 01:18:25,978
feel like every week I'm seeing you in some sort of clip or other interview thing on
LinkedIn and others.

851
01:18:25,978 --> 01:18:28,541
So we'll have links to all of that in the show notes for today.

852
01:18:28,541 --> 01:18:32,255
And once again, just thank you so much and we'll have to talk to you again soon.

853
01:18:32,255 --> 01:18:33,696
It's been too long since last time.

854
01:18:33,696 --> 01:18:34,777
That's for sure.

855
01:18:35,604 --> 01:18:36,553
Hey Chase, thanks.

856
01:18:36,553 --> 01:18:37,646
We'll talk to you soon,

857
01:18:42,967 --> 01:18:46,409
Thanks for tuning into this episode of the Grid Connections podcast.

858
01:18:46,409 --> 01:18:50,791
I hope you enjoyed our conversation with Tu Li, the founder of Sino Auto Insights.

859
01:18:50,791 --> 01:18:59,276
It was fascinating to explore how China is reshaping the global auto industry from
electric vehicles and charging infrastructure to the rise of plug -in hybrids globally.

860
01:18:59,276 --> 01:19:05,640
If you found this episode insightful, I encourage you to share it with at least one other
person who would appreciate the content as well.

861
01:19:05,640 --> 01:19:09,011
And if you have a moment, please leave a pause or a view on our podcast page.

862
01:19:09,011 --> 01:19:12,097
It really helps us continue to you valuable discussions.

863
01:19:12,097 --> 01:19:13,548
like this one today.

864
01:19:13,690 --> 01:19:17,425
Until next week, this is the Grid Connections podcast, signing off.