Sinocism
Sinocism Podcast
Sinocism Podcast: Tu Le of Sino Auto Insights on the rise of the China vehicle industry
0:00
-56:45

Sinocism Podcast: Tu Le of Sino Auto Insights on the rise of the China vehicle industry

Transcript

No transcript...

Episode Notes:

In this episode of the Sinocism Podcast Bill speaks with Tu Le, Founder and Managing Director of Sino Auto Insights. Tu recently attended the Shanghai Auto Show. We discuss the rise of China EVs both inside China and increasingly in other countries, and especially of BYD, why the legacy foreign auto manufacturers are struggling and will continue to struggle in China, and how “China EV Inc” will win share in many overseas markets. We also discuss Tesla’s positioning in the PRC and some if its challenges ahead, especially from BYD, both inside the PRC and in other markets around the world.

Links:

Sino Auto Insights

Sino Auto Insights newsletter

China EVs & More Podcast, hosted by Tu Le and Lei Xing

Sino Auto Insights on Twitter

Doug DeMuro reviews the BYD Han:

The BYD Song L:


To add the Sinocism Podcast feed to your preferred podcast player:

Click on the "listen on" button and you will see a dropdown with several options. Make sure you are logged into your account when you do it so you get the correct private RSS feed for subscribers. If you have not logged in for a while you can enter your email and then we will send you a link login link.

The “email link” in the pulldown shown above will send you an email that also makes it easy to set it up in your preferred podcast app on your phone.

If you use the Substack app it has a built- in podcast player.

Thanks for listening.

Transcript:

[00:00:00] Bill: Welcome back to the Sinocism podcast. Today we're very lucky to have Tu Le to talk about the PRC auto industry. Tu is the founder and managing director of Sino Auto Insights. Tu recently relocated to Detroit after many years in Beijing. Tu and his team at Sino Auto Insights do advisory and market research work for companies and investors who want to understand the PRC auto industry and especially the rise of Made in China EVs. He also writes an excellent weekly newsletter and does a podcast and occasional or weekly, I think, Twitter spaces. I will put links to those in the show notes. Tu, welcome and thanks for joining the podcast. Great to see you again.

[00:00:36] Tu Le: Bill first. , thanks for having me. Last time we saw each other, I think we were at Central Park having a coffee at Jamaica Blue. That quite a few years ago.

[00:00:47] Bill: Tu and I are old friends from, from Beijing. , so, and, and it's, it's good to see you and, , nice to have you, , back in the US and Detroit. , Detroit is home, right. But it's also a great place to be if you're working on the auto industry.

[00:00:59] Tu Le: Yeah. It's kind of ground zero for what's happening in the EV and mobility space. So, so it's, it's a great time to be back.

[00:01:05] Bill: I've been really wanting to get you on the podcast for a while and I got finally motivated to do so after reading, what you were talking about from the Shanghai Auto Show, which you were, you, you just came back from China, I think, like a week ago, right? You're there for Tu or three weeks, , and nice to be able to travel again, right?

[00:01:21] Tu Le: Oh, man. It was, , it was kind of, , surreal because the last time I traveled internationally from China, we were just, we had bags packed and everything, so a little bit different.

[00:01:35] Bill: Yeah, no, much, much better. , and I think, you know, the Shanghai Auto Show clearly rocked a lot of people's worlds, and so Tu is going help us understand what's going on, and that's why, you know. So I wanna start though, first with, if you could just tell us a little bit about yourself and how you ended up in China, working in the audio industry and, and what your firm does.

[00:01:54] Tu Le: Okay, sure. So,  as you'd mentioned, I grew up in Detroit, actually in Pontiac, Michigan.. In my entire family, all eight of us have worked. In the automotive space, along with our significant others. And, my first job, actually out of undergrad at Michigan State University was working at GM where the recently canceled Bolt is manufactured.

[00:02:16] Tu Le: After grad school I moved to Silicon Valley, worked there for about six, seven years., and I met a girl and chased her over to Beijing actually. So I quit my Silicon Valley job and what I thought was going be a three or four year commitment ended up being 13 years.  I had moved to Shanghai, took a job with Ford in Lujiazui actually for about a year, and then moved back to Beijing due to some family stuff going on.

[00:02:46] Tu Le: And, then I started freelance consulting and worked at a couple of Chinese e e e-commerce startups in Beijing. And then I got pulled over to do some freelance consulting because one of my, friends. Had found out that I had some automotive background and, you know, Mercedes, BMW and Audi, they're all located,  and VW group are located in Beijing.

[00:03:09] Tu Le: And so I started Sino Auto Insights because, you know, right around 2014, 2015, where, you know, at ParkView Green, Tesla had opened the first retail store for China. And so I really started seeing,  a shift in what was going on in the space and, a lot of articles and a lot of bad takes. So I started the newsletter, started the consultancy, because of my experience in Detroit, Silicon Valley and China with startups.

[00:03:37] Tu Le: It's been quite an adventure and we, what we do is we, , , , we're a management consultant consultancy that helps mobility companies enter markets, develop products, raise capital and build their brand and work with them to find customers. And so we were focused primarily in the China market, but now we've kind of expanded because China, EV Inc.

[00:04:05] Tu Le: Has expanded. And with the Inflation Reduction Act, we've recently opened a Detroit office and are, are starting to help companies here expand into the EV space and the mobility space.

[00:04:20] Bill: Oh, that's fascinating. And I just, just to your, like what you mentioned about the, Tesla dealership at, or the, the showroom at, at the phone call the Parkview Green. ,I actually, you know, we both, we lived near there. Our, my kids went to school next to it, I think years went to Fangcaido, right.

[00:04:35] Tu Le: That's right, exactly. I live right next door,

[00:04:37] Bill: you go.

[00:04:38] Bill: Right. And so, and so I went there right after it opened with a friend with a, with a friend of mine from Henan who had like, he had a a, a couple of 730s and a BMW very, you know, had like cars had, could buy what he wanted. And it was really fascinating because he wanted to buy a model S right early on.

[00:04:54] Bill: And he got in there and he's like, God, it's like, it's, it's just so bare bones that does not, you know, so he didn't buy it because he's just like, this is like, not this just, I wanted like a German luxury car.

[00:05:06] Tu Le: and it was over $120,000

[00:05:08] Bill: No, they were, they were quite expensive. I mean this was early, early days. Right. And obviously Tesla's done well since then, but it was just really interesting how when they entered the market, they were not at all focused on, I mean, they were, they were, they had a, a brand image, but actually inside the cars, the way they were appointed was not near what sort of Chinese luxury buyers were used

[00:05:29] Tu Le: right, and, and I would venture to guess, your friend was probably a little bit older,

[00:05:35] Bill: Hey. It was, it's like 40 at the time.

[00:05:37] Tu Le: Okay. So he is pretty young because the digital natives, and, and we'll get into this a little bit later, but the digital natives are the ones that are really looking at the safety and the connected vehicle.

[00:05:48] Bill: And the, and the screens that make it look like you're, like at a currency trading station, right.[00:05:52] Tu Le: oh, yo. Yeah.

[00:05:53] Bill: I want to jump to something that you wrote in your, your latest, , newsletter, , which is excellent. Everyone subscribed to it. And I will link to it, as I said earlier.

[00:06:04] Bill: , but the one, the one about the Shanghai Auto Show, so you wrote. In 20, 30, 50 years from now, we'll likely point to Aha Shanghai TW 2023 as that watershed moment. It's the moment most media outlets acknowledge that the foreign legacies that dominated the China auto market for the last 35 years or so have been overtaken and unable to compete with the EV products launched by China, EV, Inc.

[00:06:31] Bill: Within just the last few years, the legacies haven't given up by any means, but the writing is on the wall. BYD overtook Volkswagen as China's best selling brand in, first quarter 2023, the first time it's ever happened, BYD has no plans of giving up that title for the foreseeable future and are likely only only going to pull away even further.

[00:06:53] Bill: China will never be like it was again, where brand heritage and being foreign gave you an advantage.” So if you're a foreign auto manufacturer…the sense I got from talking to some people reading the media was the foreign, some of the foreign execs who went to the auto show were shocked.

[00:07:16] Bill: And so like, like what do they do? And more importantly, how did they fall behind so quickly? Right? I mean, they have had massive operations in China for decades. Didn't they have a flow of information that helped them understand how the market was changing?

[00:07:30] Tu Le: So there's a few different things going on here, Bill. I think that the fact that most executives outside of the top management haven't been able to travel to China in three and a half years really limited their ability to kind of see and feel the differences and the changes. I was in China for most of that three and a half years.

[00:07:56] Tu Le: And I saw the proliferation of green plates over the last few years. ,

[00:08:01] Bill: just to be clear green, green plates, or if you have an EV

[00:08:05] Tu Le: Right. You and I lived in Beijing during the worst pollution days, and so it was kind of a necessary evil and what, what we'll likely see in India in the future, but that's another subject, and so for them to first be able to land in Shanghai as an international business, travel, see all the green plates from the fleet vehicles and the taxis and then all the way to the passenger vehicles when you get into Jing’An temple area and stuff like that, I think that really shocked them.

[00:08:42] Tu Le: And then to go to the media days on Tuesday and Wednesday, the first days you could actually see, touch and feel the vehicles. You know, they, they close, they make that sound like German cars and the, the fit and finish is much, much better than it was 5, 6, 7, 8 years ago. And so you could always tell the European or German executives, because the uniform, they wear that suit with no tie, white shirt and

[00:09:11] Bill: And tears streaking down their face.

[00:09:14] Tu Le: So it was just an, it was an awestruck moment, but also what do we do? Like, how, how did they get so far ahead and, and how do we catch up? Because most executives, most automotive, traditional automotive executives have no idea about software and hardware, software integration. And so, and user experience, because most automotive companies, their products are product focused, whereas tech companies are user focused.

[00:09:45] Tu Le: And in, in the high tech world, everything's an operating expense. In the traditional automotive sector, everything's a capital expense. And so how you think about financing your new products, it's completely different. And, you know, traditional automotive is just very slow, product life cycles of 5, 6, 7 years.

[00:10:04] Tu Le: Whereas every tech product you get is new every 10 to 14 months. And so, , there, it's, it wasn't just that the products were higher quality, it, it was also the number of them and the number of competitors. And we've seen. a decline, a sharp decline over the last several years in GM sales in Volkswagen, group sales in Ford sales.

[00:10:33] Tu Le: So they've seen this coming, but if we look at how Volkswagen and GM specifically, and Toyota, to a lesser extent have grown and become these global, number one, number Tu, number three automotive players. It's because of the China market. And, and they were making money hand over fist along with their JV partners.

[00:10:56] Tu Le: So they, they had no incentive to disrupt themselves.

[00:10:59] Bill: They were fat and happy,

[00:11:01] Tu Le: Yeah. I want to give Tesla a decent amount of credit because you and I know about this catfish effect because in 2016, so, so Nio, Peng and Li Auto, those companies were established in about 2014, 2015. And they've been, they were struggling for quite some time.

[00:11:21] Tu Le: Nio was close to bankruptcy.

[00:11:23] Bill: they got rescued by that,  provincial government. Right. Or

[00:11:26] Tu Le: That's right. Hefei government. Yep. And so if you look at where the hockey stick starts, it's right around 2019. And guess what? Factory opened up in 2019. Exactly. It's exactly. So the first vehicle for the model three, the Made in China model three rolled off in December of 2019.

[00:11:48] Tu Le: So Tesla should get a decent amount of credit for bringing a lot of attention to the Chinese EV sector, but also bringing the level of competition up. And that's where we're at currently. Because actually, if you look at the US and European markets, I would say Tesla is aggressively playing offense, but in the Chinese market, they're playing a little bit more defense with the price cuts.

[00:12:11] Bill: Well, that, well, that's, so a couple things there. One is, , sort of, I guess the, the traditional carbon manufacturers were also, you know, a bit, been a bit to be, euphemistic behind the curve when it comes to Tesla outside of China. I just wonder though, I mean, I would imagine that the staff and the executives in China for these foreign firms would've been reporting about what was going on.

[00:12:36] Bill: Is it just a case of like the, the foreign headquarters not wanting to listen to the local staff or not believing what they were being told, or they just couldn't do it culturally? They just couldn't, even if they understood intellectually, they just couldn't believe that this could be possible.

[00:12:52] Tu Le: yes. You know, I think, I think all of the above. I think the speed at which everything changed and we're talking three and a half years effectively.

[00:13:03] Bill: like one software update in an American car….

[00:13:07] Tu Le: Yeah.

[00:13:07] Bill: little facetious, but

[00:13:09] Tu Le: And so, , you know, China's the largest, passenger vehicle market in the world. It has been since 2009. United States is a close, there's not, not a very close second, but their second place. But, again, if you are just printing money because of the brand logo on the front of your vehicle, you're not super incentivized to disrupt yourself.

[00:13:38] Bill: So classic.

[00:13:39] Tu Le: this came sneaking up. So, so I'd like to think that since I've been writing this newsletter for the last five or six years, I'd like to think I kind of saw it coming and I was kind of warning

[00:13:51] Bill: and you did. And you, you did. And it was interesting because it just like, people really paying attention said this stuff is happening. But it's just now become this broader, like,oh my God, the Chinese EVs are like amazing. And they're going, they're dominating China and they're, they're coming overseas.

[00:14:09] Tu Le: Yeah. And, if I'm being honest and frank, it is a lot of hubris. Like how could a Chinese EV company

[00:14:16] Bill: arrogance. Just arrogance and, and, and no, and, and frankly just being patronizing, like you said. How, I mean, how could a Chinese company this, we saw this, right? I mean, you know, didn't we see this with Japanese and Korean cars too in the US

[00:14:29] Tu Le: Yeah. Exactly. And you know that when we were living there in 20 10, 20 11, you got into a BYD car. You didn't feel safe. It wasn't very nice. And you're going talk about this later, but you know, there are western car reviewers, Sandy Munro, and Doug DeMuro. Two of them that really think that BYD is building quality products.

[00:14:56] Tu Le: Can they be improved? Of course they can, but they're globally competitive right now. We can talk about that a little bit later. But BYD, the other thing that I think is really not given a lot of, of, of attention. Wang Chuanfu the BYD CEO, Li Shufu the Geely founder.

[00:15:21] Tu Le: They're as ambitious as Elon

[00:15:27] Bill: And as talented.

[00:15:29] Tu Le: Yes, yes. Without question. Without question. Now they're not on Twitter or they're not doing these huge marketing, , you know, presentations for new product launches, but guess what? They're, they're out there getting it done.

[00:15:43] Bill: Yeah. They're world class executives.

[00:15:46] Tu Le: yeah. So, , and I think they're starting to shine a spotlight on some of what they're doing. But now it's now it might be too late. So,

[00:15:56] Bill: Interesting. So, , you mentioned Tesla, a couple questions around Tesla, how are they doing now? You sort of said they're on the defensive and then also what, and I think it's related to Tesla and being on the defensive. What is going on with all these price cuts and this sort of, this price war among the EV manufacturers in China?

[00:16:15] Tu Le: So let me start with the price cuts. Now, Tesla has never really acted like a traditional automotive company, and I think if we're looking at the media and, and the folks in the analysts that have covered the traditional automotive sector, That's why it's so surprising, but to me it's, it's kind of reacting to the market in an immediate sense.

[00:16:37] Tu Le: Okay. Whereas traditional automotive, they would wait a year before they did any major changes, right? And price cuts, they know that in traditional automotive space, if you do a price cut, you're probably never going get that money back from the customer if you raise the price. And so they're very careful with that. With regards to how Tesla is doing.

[00:16:59] Tu Le: So Elon has reiterated that. Tesla's goal is 20 million vehicles by 2030. To give you a good idea of how ambitious that is, Toyota was the number one automaker last year globally at around 10 million units. And so for Tesla to get to 20 million by 2030, we'll need to see many more Gigafactories opened up, all around the world.

[00:17:26] Tu Le: And we know that the next Gigafactory is going to be in Mexico City. And so that portends a lower price vehicle because the Latin American market and the South American market are not going be able to afford in millions and millions of units a $40,000, $50,000 Tesla vehicle. And so Shanghai is always going be the most important hub for Tesla.

[00:17:52] Tu Le: It's going be a domestic consumption hub, but also an export hub.

[00:17:55] Bill: hub. Okay.

[00:17:56] Tu Le: Export into, , Southeast Asia. They're, they're, they're looking at building in Southeast Asia too. But again, remember if they're getting to 20 million, they need factories all over the place and they need multiple factories all over the place.

[00:18:10] Tu Le: And so, , . But if we get, again, if we look at 20 million units, and then this has less to do with Tesla in China, but more to do with Tesla globally, they'll probably need two or three or four products that are what we call in the automotive space, high runners that sell in the millions and millions of vehicles per year.

[00:18:32] Tu Le: And the only way they get to that is if they build multiple cars at around 20 to $25,000 because that's when India will be able to get more vehicles, that's when Southeast Asia buys more vehicles because at the 30, 35,000 Southeast Asia can't really afford them in the mass quantities they need to to get to that 20 million units.

[00:18:54] Tu Le: And so it'll be interesting to see because Tesla, in lieu of exporting to Europe because of Berlin Giga, now they've announced their most recent announcements they're going be shipping made in China, model 3s and Model Ys to Canada. And so what we'll likely see is unless they're able to get the Model 3 and model Y refreshes done in this year, we'll probably see some more price cuts.

[00:19:21] Tu Le: But until they get to the model 2, model one and a half, where they're really, really going increase the sales volume , the excess capacity of Austin, of Berlin ofShanghai is going be a weight around their neck, I think.

[00:19:40] Bill: And and interesting and won't, for the sort of emerging markets developing market strategy like Latin America, aren't they going run into BYD and some of these other Chinese firms?

[00:19:50] Tu Le: They're kind of running into BYD in China because they've priced the model three so low because you could call them a premium automaker, although to your friend's point, there's not much to the vehicle.

[00:20:04] Bill: Not in the model 3. I wouldn't, that's not a premium vehicle

[00:20:06] Tu Le: Well, but, but they had pre priced it at, at a premium level initially, but now that it's three and a half years old, they have to price it much more aggressively.

[00:20:16] Tu Le: And yes, they're going run into a buzz saw with BYD because one of the highlights of the Shanghai Auto Show was the BYD Seagull., It's a little hatchback, and so it's a smaller car, but it's starting at $12,000.

[00:20:32] Bill: looked really cute.

[00:20:33] Tu Le: Yeah. And it's going be one of their global vehicles. And so that's going sell in the millions,

[00:20:40] Bill: And, and is it,

[00:20:40] Tu Le: America and, and, and Southeast Asia, things like

[00:20:43] Bill: is it a better vehicle than the model three?

[00:20:46] Tu Le: , I haven't driven it yet, but, you know, sitting inside of it, the fit and finish was, was great. And the other thing about the seagull is that BYD was talking about before the end of this year, also utilizing sodium ion batteries in the seagull, which could bring the price down even further. And so if we're looking at a $10,000  legit electric vehicle, then by BYD's going to sell as many as they can make

[00:21:19] Bill: Right. And, and other, like the Tesla and other foreign car manufacturers that they can't compete at that price point.

[00:21:25] Tu Le: They can't. I, well, you know, , , I, I say this and I've gotten pushback for it, but Tesla or BYD is what Tesla wants to be because BYD builds, or, you know, fabs its own silicon, it builds its own batteries. They sell batteries in supply batteries to Tesla. They also sell supply batteries to Ford in China.

[00:21:46] Tu Le: And so they're vertically integrated. Out of all the automakers building EVs, they have the most control over their costs and

[00:21:58] Bill: I know the stock has done really well, but does it trade at the same multiple as Tesla does?

[00:22:03] Tu Le: Oh, no. Oh no. , but Tesla and Elon have always had a reality distortion

[00:22:12] Bill: Yeah. Yeah.

[00:22:13] Tu Le: and part of that is Elon's aura for sure. the second part is that western analysts have been generally too lazy to fly to China to see what was really going on.

[00:22:25] Bill: during the pandemic they couldn't go. Right. But, but, and now there's, there's, yeah. Now they should be on the ground and I assume they were, they were all over the auto show and, and so maybe they're all updating their models right now.

[00:22:38] Tu Le: well, and, and this is another conversation, but if you were part of an American media group, you didn't have to be American. You could be from Hong Kong working at Bloomberg, or you're, you're going have difficulties or your, or Wall Street Journal reporter that wanted to go cover the Shanghai Auto Show.

[00:22:58] Tu Le: It was a little bit more difficult for you to get a visa. So  there were some challenges with Western, I won't say Western, with American media companies getting those visas. 

[00:23:10] Bill: , And then, and then onto the, I mean we've been seeing this, I think it started maybe in January timeframe or so, this, this, like these round of price cuts through the industry. Are we seeing the classic sort of evolution of a Chinese industry as it, as it matures where you, you really end up with a, a fighting, you know, margins, compressing, prices dropping, and you know, eventually you see a shakeout.

[00:23:36] Bill: But I mean, cuz you know, there, there's no country, I don't think where the price wars can be as brutal as in China.

[00:23:43] Tu Le: So competition in China, and you know this well, is

[00:23:48] Bill: next level,

[00:23:49] Tu Le: Across sectors. Yes. , there are so many brands and the factor that makes the China market different are the SOEs, because the SOEs will always go lower

[00:24:02] Bill: because they have subsidies, right?

[00:24:04] Tu Le: Yes. And their sole purpose, I won't say sole purpose, but their, one of their primary purposes is to keep people employed and not actually sell vehicles at a profit.

[00:24:15] Tu Le: And so there's always that part of it. And every SOE has an EV brand. Okay, will those EV brands make it to international markets? Likely not, but there is going to be a shakeout. There's a lot of weakness in these companies and, there there's just not a lot of capital that from private enterprises that want to invest further into the EV space because it's pretty low margin right now.

[00:24:44] Tu Le: There's probably going be six or seven or eight brands that do pretty well long term, and they're also going to. probably make an impact in Europe, BYD obviously being one of them. , and then I would say Zeekr, which is a Gelly brand, they also launched, , the Zeekr X at Shanghai Auto, and that's 190,000 RMB.

[00:25:08] Tu Le: And it's about the size of a Volkswagen Golf,

[00:25:11] Bill: Geely own Volvo right?

[00:25:15] Tu Le: Yep. And so they own Volvo, they own Polestar, they own Lotus. There's going be a lot of Wolf and sheep's clothing that have European branding, but with Chinese characteristics that are going be entering, that have either already entered Europe or, or will be entering Europe this year or next year.

[00:25:38] Bill: So that was one of, one of my questions for you was, was how quickly will, do you think these, the, the PRC EV manufacturers will gain shares overseas and in which markets and, and related..and which markets will probably be the most welcoming? It sounds like you think Europe will.

[00:25:53] Bill: There'll be some traction in Europe, but also does the charging infrastructure exist for the surge in new EVs in these markets, or are the Chinese going be building out the charging networks?

[00:26:05] Tu Le: So in Europe it's a little bit weird because the European Union has declared that in 2035 they will stop the sale of ICE and diesel fuel engine vehicles. Now the German government has pushed for a carve out for clean e-fules, and so you can still, they'll still be able to sell engines or petrol engine vehicles after 2035, but very few and far between. the UK even more aggressive by 2030.

[00:26:37] Tu Le: And so if you look at the lineup of products that are supposed to be launched by foreign legacy, whether it's a French, automotive company, a German automotive company, or an Italian automotive company, there's just not a lot of product in the mass market segments currently in Europe. And guess who plays really well and dominates in the mass market price segment?

[00:27:05] Tu Le: And we're probably talking sub 40,- 45,000 euro. That's where China Ev Inc lives.

[00:27:11] Bill: And these little, and these smaller cars too, right? I mean, most of the world is not like America and SUV addicted.

[00:27:18] Tu Le: Right, exactly. There's smaller battery packs, you know, 40, 60, 65 kilowatt hour battery packs that maybe go 250 miles, which is fine for for most driving. I think United States is definitely a different situation because of how much hauling we do. And you recently bought a big SUV because you like the room and space and so you know there's legitimate differences between use cases between Europe and the United States.

[00:27:51] Tu Le: But because the walls are closing in on both sides in Europe because of this 2035 date, I think what we'll see is, A lot of Chinese exports. And I had, there was a Reuters article that I, I was just, quoted in this morning that I said The European market will be a pressure release valve for a lot of China, EV Inc.

[00:28:12] Tu Le: Because many of those startups will likely see less competition in Europe than they do in China.

[00:28:18] Bill: So it’s the classic over capacity release valve where, where they're, they, they're having a hard time competing in China, they're making too much, and then they can effectively push them out to these other markets.

[00:28:28] Tu Le: And, and the crazy thing is, Bill, is that I had the, the pleasure of, , heading down to BYD and Shenzhen right before I left, , to come back here. And I test drove about four or five different, EVs or plug-in hybrids from them. And every single one of them were high quality, like would be competitive in the United States at the $25,000, at the $35,000 price point.

[00:28:56] Tu Le: They're in 52 markets currently and in Thailand, they're the number one EV maker in Thailand and in Israel, they're the number one EV maker or EV product or EV brand. Their product resonates. And guess what? If you're China EV Inc you're going see BYD in almost every market you enter, which is probably not what you're , you're hoping for.

[00:29:24] Bill: Right. No, and, and I mean, they're obviously well, well capitalized and they just have the massive scale now

[00:29:32] Tu Le: Let me point to one thing that I think is really important. In 2022, every other brand, every other OEM had problems with supply chain, with covid, with chips. Who are the machines that built hundreds of thousands, , you know, Tesla with I think half a million, almost half a million units in China and BYD with over a million, million two or something like that.

[00:29:57] Tu Le: , Tesla and BYD, they were machines. So they have this operational efficiency that even the GMs and, and the legacy autso, the Volkswagens still have problems building these EVs. And so that's another reason why BYD is just crushing it because they can build as many as they sell, whereas there are challenges ffor manufacturing for a lot of these other automakers.

[00:30:25] Bill: Right. And so when it comes to Europe, and I think especially say Germany, I wonder if the, the, we aren't heading into a kind of a backlash towards some of the PRC EV makers, just because on the one hand that the German car makers have such a reliance on China and now they're running into problems.

[00:30:47] Bill: And two, as you're talking about, we may be on the cusp of a significant, I mean, I think it's already happening, but it may be accelerating a real surge of PRC exports into the EU market and maybe Germany, where they're actually undercutting a lot of the existing German car manufacturers. It seems like that's the kind of mix that could lead, you know, the, the German car lobby's pretty powerful, it just seems like that's a kind of mix that could lead to a, a bit of a backlash. , and re sorry, and we're related to that, and this is, it's a related question, which is, , there've been reports, and I, I think you can say if they're actually accurate, but there've been reports that there have been occasions where notices have gone out that Tesla vehicles were banned from certain areas in China.

[00:31:33] Bill: Say where, around where Xi Jinping was making inspection tour or around sensitive sites like military sites because of national security concerns that potentially the Tesla vehicles, their connected vehicles, they could be, , basically setting back, you know, record video or audio, whatever and, and or like other kinds of data that would threaten PRC national security.

[00:31:55] Bill: , isn't that argument possibly something that will be used by other lobbying groups or governments that don't want to see Chinese EVs in their countries? They can point to that and say, well, why is your BYD different than a Tesla?

[00:32:10] Tu Le: You're absolutely correct on that last statement, bill. The cameras and the sensors and the, the mapping. That's not a Tesla problem. That's a smart connected EV problem. And so they used Tesla as the example in China because they were the volume seller at that time, and they wanted to make an example and point out the American company.

[00:32:35] Tu Le: So I think that's an important distinction. But yeah, all again, all of the above. CarlosTavares , who is the CEO of Stellantis he's already cried about some protectionism.

[00:32:49] Bill: Lanis is pulling out, aren't they?

[00:32:52] Tu Le: yeah, so , they are

[00:32:54] Bill: so he can talk, he's speaking freely, or he's bitter. Or,

[00:32:57] Tu Le: speaking openly.

[00:32:58] Bill: or both. Right.

[00:32:59] Tu Le: So this is, this is the conundrum, and this is the CEO's talking out of both sides of the mouths or, or the ones that are speaking openly and freely.

[00:33:10] Tu Le: Now anyways, , you know, Carlos has said, it's much more difficult to do business in China, and that's fair, that's a fair statement. But before that, 35 years, you seem to be doing fine. And he has shareholders that he needs to explain their strategies to, but he, he doesn't acknowledge that, you know what, the competition got a lot better and our products didn't.

[00:33:37] Tu Le: And so he doesn't point that out. So I think to, to be fair and, and kind of balanced, , we should acknowledge that China EV Inc. just really, really caught up really quickly.

[00:33:48] Bill: No, and I mean, and, and there was, there, there was, there was government programs, government subsidies, you know, made in China, you know, 2025. I mean, they, they're, they, these, the Chinese EV makers got a lot of government support, but we all knew that was coming and especially the foreign automakers. They all knew it was happening years ago.

[00:34:04] Tu Le: Yeah. And, and again, so these programs started in 2009. Electric vehicle subsidies, hydrogen fuel cell subsidies, and then R&D for battery cell, R&D subsidies came into place. And CATL was nothing, 5, 6, 7 years ago, but there was about a three or four year program where there was a white list of battery cell manufacturers that if you wanted to get the Chinese subsidy, you needed to buy from one of these 17.

[00:34:37] Bill: All domestic suppliers

[00:34:38] Tu Le: suppliers.

[00:34:39] Tu Le: Y just happened to be, just happened

[00:34:41] Bill: Coincidentally only PRC battery suppliers.

[00:34:44] Tu Le: Just happened to be, but guess what? They saw the writing on the wall or the Chinese government saw the writing on the wall and said, we're going start exporting, so we need to get rid of this list. And this is one of the reasons BYD and CATL last year owned 50% of the market share for LFP batteries and for the foreseeable future Europe and the United States, those legacies, they're going need Chinese batteries to build sub 50,000 US dollars, sub 45,000 Euro EVs.

[00:35:16] Tu Le:I'm saying through 2030 probably because to get those mines, the lithium mines or whatever they're trying to put, , in Europe and the United States, that's going take several years to get enough volume to make a difference and then refining capacity because not only does China own about 40% of the mining rights for lithium, they have about 70% of the capacity for refining it.

[00:35:41] Tu Le: And so even if there were mines in the United States, that that sourced enough lithium to supply US legacies, it would need to be shipped to China to get refined.

[00:35:54] Bill: not dissimilar from rare earths, which aren't rare, but it's the processing that's the challenge. And China dominates there. So on that, on that point about the batteries, can you talk about the deal that Ford cut to basically license CTL technology? It sounds from a corporate perspective like a really smart deal.

[00:36:13] Bill: Obviously it has had some real political, , , it's caused a bit of a political fewer

[00:36:19] Tu Le: right. So, so currently there are, there's Gotion who had made an announcement about a firm investment into, Michigan. So they're investing their own RMB into building a battery components factory and, and I think components equals battery cell factory. , And, and you probably remember because your next door neighbors with Virginia Youngkin had kind of said they don't want Chinese money investing in Virginia.

[00:36:52] Tu Le: Right. , so I, my the, what I'd heard was the ror was that Youngen wanted a bigger investment from Gotion and he didn't get it. And so he tried to kill to birds with one stone by saying, yes, we're not taking Chinese money. And, you know, governor Whitmer, gladly took it because that means jobs for, for the United States.

[00:37:12] Tu Le: And so what you're referring to with Ford is also a Tesla deal where Ford and Tesla are going to build battery cell factories. Ford’s going build it in Michigan. and Tesla, I'm not sure if they've announced where they're going be billed, but they basically are going license the, the IP from, from CATL.

[00:37:33] Tu Le: So there are no CATL employees that build battery cells in the United States for on, on Ford's behalf. And so the lesson to me is that if you want American Jobs, don't use RMB  to create them. It’s better to go around the Inflation Reduction Act than to try to get American jobs using Chinese capital.

[00:38:00] Bill: And so the way that, that the sort of the licensing of the CATL  technology, you're saying that's the way to get around the Inflation Reduction Act.

[00:38:09] Tu Le: yeah, so I've been hearing that Manchin is going be pushing back on that as well, but currently to my understanding, the Gotion deal will go through CFIUS, but the Ford and the Tesla deal with CATL will not.

[00:38:23] Bill: Okay. So, and,

[00:38:24] Tu Le: not any money being invested in the US from CATL

[00:38:28] Bill: and, and I guess the question, I mean, again, I looked at the sort of about that licensing, the CATL technology. I mean, I don't understand, is the national security risk that people talk about the fact that these, these, these firms will be relying on Chinese battery technology.

[00:38:46] Bill: It's not like they're going be like slipping in secret code or like chips to transmit back in the technology they're licensing in the batteries. Are they, I'm just, I'm just curious like why it's such a seen as such a now security problem. It seems like a pretty clever solution to a problem. The problem being that the US doesn't make these things in any kind of the vole that these car companies need it for.

[00:39:08] Tu Le: Right? I think the real risk Bill is that. We would get addicted to Chinese battery cells and the pricing that come with it, and never wanna move to domestic because CATL BYD, Gotion, they'll always go lower.

[00:39:25] Bill: The US and again I do understand that, that there is pushback because they're able to price that way because of all the subsidies, because of the, you know, and so of course now the US is pursuing an, we're a little bit late, right? We're in like made in USA 2050 at this point, right?

[00:39:44] Bill: I mean, it's a little, I mean, but No, but we are like, we've sort of, I mean, I think, you know, the National Security Advisor Sullivan's recent speech, which was really a sort of, this, this a real shift in looking at sort of economic policy, and in many ways it's, you know, they didn't come out and say it, but it's like, cause China's actually looks like they've been successful with some of this stuff, right?

[00:40:03] Bill: And I think this is why, like the car industry is certainly one of those areas, right?

[00:40:09] Tu Le: So, I have a European friend that told me you cannot call the EU a socialist region anymore because of the Inflation Reduction Act . But to me, as you know, as the Homer, if I'm putting my Homer Detroit in US hat on, it's better late than never.

[00:40:28] Bill: right?

[00:40:28] Tu Le: , Because I know, and I think you know, that, if we let them, they'll flood the market.

[00:40:38] Tu Le: , with EVs, with batteries, , and Americans love, made in America, they love that story. They love that theme. It's the second most important thing to them. The first being price. And so if there's a quality product that a Chinese manufacturer is able to provide to an American consumer, You better believe that that American consumer will buy it.

[00:41:04] Tu Le: And so, , there, there needs to be some sort of protectionism or the, the US legacies don't stand a chance

[00:41:11] Bill: We saw this with Japan in the, in the early eighties, right? Ultimately the US cut a deal with the, with the Japanese and forced the Japanese effectively forced the Japanese to set up factories in the US and, you know like my wife has a BMW that was made in South Carolina.

[00:41:29] Bill: Right. And, and, and, and so I mean, are we, are, should we expect to see like BYD trying to do a manufacturing facility in the US or is that just not politically possible?

[00:41:39] Tu Le: I don't think there's any doubt that China, EV Inc. will build and set up a shop in Europe and in, in, I won't say the United States, I'll say North America because we have that free trade agreement

[00:41:51] Bill: Right,

[00:41:52] Tu Le: So, , if you think of. it from a strategic level. , if we believe that Tesla is going to eventually build a cheaper model 2, in Mexico City, for North America, for Latin America, for South America, there's going be a lot of suppliers in and around that area already.

[00:42:12] Tu Le: And so if I was a BYD or an xPeng, I would consider opening in Mexico City because there's already their suppliers, it's free trade with the United States.

[00:42:25] Bill: logistic networks are already set up and.

[00:42:27] Tu Le: and the politics might not be as nuclear as if they opened up shop in the United States. But I will say this, Bill, if BYD approached the governor of Mississippi or Alabama or South Carolina and said, I'm going write you a 5 billion dollar check.

[00:42:47] Tu Le: and I'm going hire a bunch of South Carolinians or Alabamans and Mississippians. You, you don't think that that governor would take that money? Of course he would.  But again, this is one of those things we're, we're moving towards an election year, and I think China bashing is kind of en vogue on both sides of the aisle.

[00:43:09] Tu Le: , but we have to separate that out with, you know, at the United States, you and I, we work hard for our money. And I want the best product regardless of, of where it's, where it's built or

[00:43:22] Bill: and and cars are getting a lot more expensive in the US.

[00:43:25] Tu Le: Oh yeah, yeah, exactly. And so, , , do I think that the United States can catch up or the US legacies, I do.

[00:43:35] Tu Le: I do, but I think it's where the Europe might be the odd man out because here's a question I've posed to many German auto executives, you know, , I've asked them, okay, name me five globally relevant Chinese technology companies. No problem. We can do that, right? , US name me five globally relevant US technology companies.

[00:44:00] Tu Le: Okay, no problem. We can do that now. Name me, five European , globally relevant technology companies. And so that software, that capability that Europe doesn't have, I think it's going create this buy situation. And you either gotta buy it in China, from Chinese technology companies, and then when you go outside China, there's a rest of the world strategy.

[00:44:25] Tu Le: This is going really create a lot of anxiety and headaches and sleepless nights for the European leadership of these automotive

[00:44:35] Bill: And what about the Japanese and Korean auto firms? I mean, the Japanese market is, is still even after all these years, right? US cars have very low share in Japan and Korea, right? I mean, they're fairly protected markets are the Chinese EVs can have much chance of breaking into those markets.

[00:44:51] Tu Le: So, , I think so because again, they can produce these vehicles at such a cost that the Japanese, you know, Toyota doesn't want to play in the 10,000 US dollar price range, 13, 14 US thousand dollars price range.

[00:45:12] Bill: In, in Japan, they, they do that in like Southeast Asia, don't they? Or in other markets.

[00:45:16] Tu Le: they do, but, , their global strategy on product planning has really been slow. Just like in China and BYD there's a company called Neta. There's a couple of other companies Chinese EV companies that are, have started to export into Thailand, BYD just announced that they're going be building a factory in Vietnam as well now.

[00:45:44] Tu Le: And so they have a kit factory in India, BYD does. And so these companies are already there. And what the Thailand and the Vietnams and the Indias…so I'll give you a good example. India became the fourth largest passenger vehicle market in the world last year,, behindChina, United States, Japan, and Germany or something like that, or surpassed Germany.

[00:46:10] Tu Le: And so, , I think they're on almost 2 million units. But Modi, he knows he can't stay in power if. It's polluted like it is in, in those Indian cities. And so in order to get rid of that pollution, he's going have to get clean energy vehicles. Most of them are going be mopeds. But as the per capita income increases, people are going wanna buy cheaper passenger vehicles, right?

[00:46:33] Tu Le: And so if Modi's to stay in power, he's going really have to get rid of that pollution eally quickly. And how do you do that? You do that through electric mopeds and electric passenger vehicles and commercial vehicles. And the only game in town at that price point is still going be China EV Inc.

[00:46:51] Bill: It's really fascinating because I, I mean, so I, I would not be surprised then if we start seeing all many more governments pushing out subsidy programs. I have no in inside knowledge, but I will be shocked if we don't start seeing like a more of a concerted campaign in some of these markets from various.

[00:47:14] Bill: Lobbyists, politicians around the national security implications of these connected cars.

[00:47:18] Tu Le: Yeah, so,

[00:47:19] Bill: I think that's going sort of be the, what, what a, what some people see as kind of the Trump card around sort of why, you know, why you can't, you know, and, and, and again, I think it's like we can, that's a much longer discussion, but, but it, it, it, because it, because from a sort of a, purely a actual product and price perspective, it sounds like this tsunami is coming that most markets and most car manufacturers just can't compete with.

[00:47:45] Tu Le: so your point is valid because right now Chinese exports into Europe and the United or Europe are still fairly small, but, but BYD alone said they want to ship 800,000 vehicles to foreign markets this year. The United States last year bought a total of 800,000 EVs. So that gives you kind of ,

[00:48:13] Bill: sense of the scale,

[00:48:14] Tu Le: the context, right?

[00:48:15] Tu Le: And so yeah, scale. So the EU and the United States have different takes on private data security, data privacy and, and, and where it needs to reside and all that stuff. This is their opportunity to get in front of it. Before this, like you said, tsunami arrives, right? But remember, MG  is an SAIC brand, but with British heritage.

[00:48:38] Tu Le: And so they're already,  and, and the other thing that's really, , interesting, Bill, is that Volkswagen announced that they're going be shipping Chinese made Volkswagens into Europe, and Ford has announced that they're going be shipping Chinese made Lincoln Aviators into the United States. And so in these, in these instances Bill, the calls are coming from inside the house.

[00:49:16] Tu Le: To me, the ev and we haven't even talked about autonomous vehicles because that's the real, you know, technical and data intensive sector that is going play a huge role in the, in the next 15, 18 years because there's a number of Chinese autonomous vehicle startups

[00:49:40] Bill: they pretty good now?

[00:49:42] Tu Le: man. I got into the Baidu and level four with, with Duncan, of course.

[00:49:47] Tu Le: And, , yeah, there was no, no driver that. And so I've done that in San Francisco and I've done that in, in China. Now I'm probably one of, you know, , , the few people that have,

[00:49:58] Bill: This is like the, the Baidu taxi.

[00:50:01] Tu Le: yeah, in Yizhuang. So it's South Beijing and they have this, , this like zone where they're testing vehicles. And so I was lucky during my trip, my three week trip, I got into four robo taxis in China, just China.

[00:50:15] Tu Le: So there's four of them, but we don't get any kind of coverage on these four. We only talk about Waymo. We only talk about Cruise, Motional to a lesser extent and or certain western companies. But this is going be a global showdown. And what China AV Inc  and US AV Inc. are going do is likely going to compete for Europe, compete for Southeast Asia, compete for, the Middle East, from the standpoint of carving out where their autonomous vehicles are going be launched and pilots are going be,

[00:50:50] Bill: It, it, it's interesting and I wonder if it'll be like, if, if the country already has the Huawei Telecom network, then the Chinese AVS will be welcome. And the ones that have basically pushed out Huawei, it'll be this big bifurcation. And the ones that don't allow Huawei probably won't allow the China AVs.

[00:51:06] Tu Le: I don't think there's any doubt that there's going be some sort of bifurcation. I'll give you a quick example. Bill. , GM acquired Cruise, I want to say about seven years ago or six years ago for over a billion dollars. And you, you would think that for that type of investment they'd make Cruise their autonomous vehicle arm globally.

[00:51:27] Tu Le: but last year they invested, I want to say 400 million US dollars in a Chinese autonomous vehicle company called, Menta. And so if they thought that they could use Cruise in China, why would they invest 400 million in the Chinese autonomous vehicle

[00:51:49] Bill: They're smart. They, they get it right. They are. And so that way you play, you can play both market, you can play sort of the bifurcation of the of the global market.

[00:51:58] Tu Le: yeah. And we'll let the politicians decide how,

[00:52:01] Bill: We got our, we have our hedge, right? We, we we're going be able to, that's pretty smart actually.

[00:52:07] Tu Le: Exactly. And so I think that as, so, so the, the one thing that's kind of the current wild card is that ADAS or advanced driving assist systems, level Tu, level three, where it's like that smart cruise control or where you can take your hands off the wheels for a little bit as long as you're looking at the,

[00:52:27] Bill: or if you're a Tesla driver, think you can like watch a movie while you're driving and then,

[00:52:31] Tu Le: Well, yeah. What? But that only

[00:52:34] Bill: Don't do that at home, please.

[00:52:35] Tu Le: That only happens in the US. That doesn't happen in China, as you know. But I think that's going really push that whole data thing, right? Because now vehicles come with radar, they come with sensors, to your point about the smart EV. So it's, it's coming faster than most governments think.

[00:52:53] Tu Le: And so they really probably in the next 18 months, really need to get in front of regulatory, , or kind of regulations and how they want to deal with that stuff. So

[00:53:03] Bill: That would require a thoughtful, methodical government regulation and political environment, which I'm, I'm not, maybe that'll happen in the EU. I don't know. I'm not super optimistic that we'll be there in the US, but I could be wrong. So a couple last, a couple final questions. I know, I know you're busy.

[00:53:20] Bill: I'll let you go, but I, I, , , you know, I, I like watching the sort of the car review videos on YouTube. I'm a big fan of Doug DeMuro, who has like, I don't know, five and a half million subscribers, something. And so about a, a few weeks ago, or maybe a couple months ago, , BYD, which obviously has a very smart marketing department.

[00:53:39] Bill: You know, they're, they're not for sale in the US but they got a BYD Han vehicle to California and he was one of the people they offered it to, to review and test drive. He test drives everything and he's pretty quirky, pretty funny, can be pretty critical and. The takeaway, like he, the car had some quirks, but I think from BYD’s perspective, they must have been ecstatic with this review because it was basically like, wow, this is a really good car.

[00:54:09] Bill: There's a lot of potential here. Maybe we're going see a lot more Chinese cars because they actually can make really good cars. Which again, was sort of this eureka, not eureka moment, but like a, a real re it was really revelatory because it's like the old days where the assumption was, you know, the Korean cars were crappy and the Japanese cars were crappy, you know, way back in the day and they were for a while and then all of a sudden they just like rolled over the US auto manufacturers.

[00:54:32] Bill: And so I think this review was sort of this wake up call for a lot of people, and especially for him that actually the Chinese, and of course people in China know this and like people like you know this. But this was a much sort of broader market messaging and kudos to BYD for really targeting the right people to review their cars.

[00:54:49] Tu Le: and, and, , Sandy Monroe is also a, a very, he's, he's long China EVs as well. Sandy Monroe is famous for, breaking down or, or, , deconstructing vehicles and then selling that information for creating efficiencies and manufacturing to the OEMs. So they can save money. He’s old school. He's, he's here in Michigan and he's very well known in the industry.

[00:55:16] Tu Le: He's, he's very, , very positive on Chinese EVs as well. So I think, , again, people are starting to wake up that these are competitive products, competitively priced, and it'll take time because there are two emotional buys in a person's life, a house and a car, and you, although an iPhone might cost you $1,200, ,if you lose it, you'll just go buy another one.

[00:55:49] Tu Le: It takes hours of research before you actually go buy a car. And so the Chinese EV manufacturers know this and they'll be patient when it comes to kind of creating a brand, creating that awareness, determining what the positioning is in each of these markets. US market, German market, Italian market. And again, most won't be successful, but there will be 5, 6, 7 brands depending on the market that will be.

[00:56:16] Tu Le: And I think the Chinese EV manufacturer, generally speaking, have nothing but patience because of the flexibility they're allowed by being successful in, in the Chinese market. Where Li Xiang, who's Li Auto’s founder. . He said by 2025 there should be an 80% take rate. And last year alone there were 22 million vehicles sold in China.

[00:56:43] Tu Le: So 80%, if 80% of those by 2025 are EVs.

[00:56:47] Bill: 17 million, 18 millions thereabouts.

[00:56:49] Tu Le: So there's plenty of, of, of room.

[00:56:51] Bill: more because the market will grow too. Yeah.

[00:56:52] Tu Le: Exactly. So there's plenty of space to make money in China alone. So they'll have patience in Europe. And Nio has already said that they're going be entering the market by 2025. B Y D I don't think are going be waiting much longer than that either.

[00:57:08] Tu Le: So we'll, we'll start to see them in the US for sure

[00:57:11] Bill: Well, I'll just wait and see who does the first Super Bowl ad, right? No, I mean, I'm not joking though. Right. That'll be a real tell. I mean, cuz that'll be like they're here. Like this is the, this is that moment. And you know, in, in some ways, if you are, if you're like, you know, the car advertising industry in the US is, is huge.

[00:57:27] Bill: A lot of media companies, you know, TV networks, they rely on, on car advertising. They'll love the Chinese companies coming into the market cuz they're going have to spend a huge amount of money building their brands.

[00:57:40] Tu Le: Yeah. And, and I should , also mention, you probably already know this, is that Zeekr will be IPOing in the US later this year. So, or at least that's what they said. , so, so I think not only will there be Nio, xPeng and Li Auto, Zeekr should be joining them very soon

[00:57:58] Bill: Interesting. And they, and they, they've had a good, some of them did well, they haven't done so well lately. I think the price cuts seem to be hurting the stock prices. Am I correct?

[00:58:05] Tu Le: Yeah, yeah, they are. And you know, some of them are, are, xPenng and Nio have had some operational challenges. Li Auto has been crushing it in the China market, but they're solely focused on China for now. So I think that kind of shields them a little bit more. , and they have, they've, they've gotten some amazing products as well, so, so yeah.

[00:58:24] Bill: right, so one last question. So while, while you're at the auto show, or Tu questions actually one. What was your favorite car that you saw? , three questions. Sorry. So what was your favorite car? Is the BYD Yangwang? Does it look exactly like the Land Rover defender? At least from the, on the outside.

[00:58:41] Bill: , and then three is if money were no object, would you buy a Rolls Royce or would you buy the top of the line red flag hongqi

[00:58:49] Tu Le: Oh

[00:58:49] Bill: which look pretty badass these days, I gotta say,

[00:58:53] Tu Le: So answer to number one, , and I'm, I'm going keep the exotics out of it because, you know, I'm a car guy and I love the, love the exotics cuz if I had a choice, I would just get a, you know, a an M%. But the car that I really thought. Looked really good was the BYD Song L and it was a concept car that that'll be launching, I think later this year.

[00:59:20] Tu Le: I was super curious. It didn't get the, the, the, the windows were blacked out, so we didn't get to see the interior, but the Song L , was what I thought would look really, really good.

[00:59:29] Bill: Is it, is it a sedan? What is it? Or is it like more of a sports

[00:59:32] Tu Le: kind of like a small crossover. , little bit like an SUV, but not really. So kinda like, like, like a little hatchback.

[00:59:42] Tu Le: And then your second question, , yes, the U9 looks exactly Well, I, I'll just say silhouettes. , just like the defender. And so they had two Yangwang cars, the U8 and U9, if I'm mixing them up, , my apologies. The U eight I believe is the, the sports car.

[01:00:05] Bill: okay.

[01:00:05] Tu Le: then the U9 is the  SUV.

[01:00:08] Tu Le: There was about five or six people deep on the, the SUV and there's like one or Tu people deep on the sports car. So everybody

[01:00:17] Bill: I mean, it looks like a nice car, but, but it definitely looks inspired from the, , British now India owned, , land Rover line.

[01:00:24] Tu Le: yes. And , well, and and you should know because you, you see, see it every day now. Right. , and, and I got to see a couple of, of those disguised mules of the SUV of the Yangwang SUV while I was in, in i d headquarters. , last question, I I, I love that home chi man.

[01:00:45] Bill: thing look great, right,

[01:00:46] Tu Le: end is just mean looking and oh man.

[01:00:50] Tu Le: Now the interior's a little cheesy, but it is such a unique car and it just is really badass. Right.

[01:00:57] Bill: be fun to drive around Detroit, wouldn't it?

[01:01:00] Tu Le: yes. The, you would get so many stares, like this is the coolest thing ever. So that's one of my, one of my goals is to kinda like import a, like an old school. Not one of the new home

[01:01:12] Bill: Although the old schools are Yeah, no, they're, they're, they're, , they're pretty impressive. So, ,

[01:01:16] Tu Le: So

[01:01:17] Bill: great. Well, thank you for your time. Any, anything else you want to add or, I mean, we've, we've talked about a lot.

[01:01:21] Tu Le: Yeah, no, I Maybe, maybe we can make this a regular thing cuz you know that it's going be changing. Changing,

[01:01:27] Bill: Yes, absolutely. Love

[01:01:28] Tu Le: be talking about all this kind of stuff cuz , you know, Beijing auto show is just around the corner, man,

[01:01:34] Bill: Are you going?

[01:01:34] Tu Le:I'll be there for sure. I'll be there for sure. I plan on, you know, well, you know, we have family ties.

[01:01:42] Bill: D the other auto shows around the world matter anymore?

[01:01:47] Tu Le: not so much I think

[01:01:49] Bill: Amazing.

[01:01:50] Tu Le: because even, even in Europe, the, the Chinese brands dominated. . Right. And I went to Detroit last year, and it was just, okay, I mean, I, I, I wasn't that impressed, so, which is unfortunate, but maybe the IRA will make, , the Detroit Auto

[01:02:10] Bill: protectionism, baby industrial policy. Right.

[01:02:13] Tu Le: Yeah, man. It's a jobs program, right?

[01:02:16] Bill: learn. Learn from the, learn from the PRC on. , well look, thank you. So Tu Lee, this has been great. He runs Sino Auto Insights. , I'll put some links in. He has a great newsletter, a great podcast. Your Twitter spaces is weekly or what is that?

[01:02:29] Tu Le: It's weekly. Yep. So

[01:02:31] Bill: And ,

[01:02:31] Tu Le: can find me, you can find me at @SinoAutoInsight without an S so, , my Twitter handle.

[01:02:36] Bill: And I'll put all this on the show notes. So thanks again for your time. This is really great and I've learned a lot about the auto industry. Really appreciate it.

[01:02:42] Tu Le: thanks for having me, Bill. Let's, let's catch up soon.

[01:02:45] Bill:  Absolutely

0 Comments
Sinocism
Sinocism Podcast
A podcast from Bill Bishop, author of the Sinocism newsletter, in which we talk to experts from around the world to help us all get smarter about China. Topics discussed include politics, foreign relations, business, finance, culture, history and markets. Nearly 100,000 investors, policymakers, executives, analysts, diplomats, journalists, scholars and others read Sinocism for valuable insights into China.