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AAH #739 - The Shanghai Auto Show and The Next Tech Barrage
AAH #739 - The Shanghai Auto Show and The Next Tech Barrage
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About this episode
The discussion centers around the upcoming Shanghai Auto Show and the evolving landscape of the automotive industry, particularly in China. Guests from Sino Auto Insights and Telemetry provide insights into the contrasting fortunes of foreign and domestic automakers, the impact of recent accidents on regulations, and the future of electric vehicles. Key topics include the challenges faced by companies like GM and Volkswagen in China, the rise of battery swapping technology, and the implications of new safety regulations following a tragic accident. The episode also touches on the New York Auto Show and the introduction of new models by various manufacturers.
Topics:
shanghai auto show
foreign vs domestic automakers
electric vehicles
battery swapping technology
safety regulations
new model introductions
market trends in china
impact of accidents on regulations
Cars:
Aptera Aptera
Chevrolet Equinox
Dodge Charger
Ford Maverick
Hyundai Palisade
Subaru Outback
Tesla Model Y
TOPIC: Shanghai Auto Show PANEL: Tu Le, Sino Auto Insights; Sam Abuelsamid, Telemetry Insight; Gary Vasilash, shinymetalboxes.net; John McElroy, Autoline.tv
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Technical
Too Afraid to Ask
Car
Tesla Model Y
"...n China. Speaker 2: And Jennifer is the refreshed model y. Speaker 4: And kind of as a preemptive strike, p..."
Car
Chevrolet Equinox
"...5: You take as an example, something like a Chevy Equinox type of vehicle. Instead of hauling around eighty..."
Car
Hyundai Palisade
"...eaker 5: Else, Uh, Hyundai showed off the all new Palisade, the next second generation Palisade we had. Spea..."
Car
Subaru Outback
"...second press conference where they showed the new outback, which was should we say, controversial and its s..."
Car
Dodge Charger
"...egment in particular is E revs. You know, the RAM charger that's coming later this year is an E REV. We are..."
Car
Ford Mavericks
"...f companies, a lot of commercial customers to buy Ford Mavericks. Speaker 3: Well, I say, isn't this the Maverick ..."
Car
Aptera
"...efuse to record anything to do with When When did Aptera come out? Six or seven, two thousand and six. Yea..."
Select text to request an explanation
Speaker 1: This is Auto Line after Hours, unscripted, uncensored, unapproved. Hey everybody,
thanks for joining us on Auto Line after ours. I
have no idea where today's show is going. We got
some topics we're going to talk about because maybe you heard there's a lot of action in the automotive industry these days. So we got two Lee from Sino Auto Insights. Here,
we've got Sam abu El Samid from Telemetry, and of course Gary Vassilash and John has blessed us with his presence.
I'm doing pretty good, you.
Speaker 2: Too, good, good, good, good good good.
Speaker 1: Yeah, so let's get into it. Two next week, both
you and I are going to be in Shanghai at the auto show there. I mean we got to kick
off with something. Let's kick off about something that's coming up.
And I'm pretty excited about going there. What do you
think you're going to see her? What are you on
the way?
Speaker 3: Wait, wait a minute, I thought auto shows were dead too, So explain to me why would there be such a thing.
And then Sam, we're gonna here because you just came back from New York Auto Show this morning.
Speaker 1: Yeah, so we'll get into New York too.
Speaker 3: I thought our shoes were, so tell me about Shanghai.
Speaker 4: So I normally am pretty good about remembering numbers and statistics, but I need to read this, and maybe you know some numbers about New York. But there's going to be
one thousand exhibitors in and Shanghai from twenty six countries, three hundred and sixty thousand square meters, so about seventeen football fields. There was a million square feed in New York,
fourteen hundred vehicles, ninety three, World car debuts ninety three, and some notable reveals will be Noia Classic Cockpit because they're leaning into software who ow, and so yeah, it's gonna starts. It already has. X pund did a World
Brand summit in Hong Kong on the fifteenth. You and
I were invited, but we decided not to go because we're gonna in mainland. I'll be there starting Sunday and
then things will start kicking off with media days on the twenty third and twenty four. I think that with
the tariffs, the tragic accident with the SUX seven sell me Sue seven recently, it's going to I think there's going to be a little bit of uncertainty from some of the Chinese players with regards to how flashy they want to be.
Speaker 1: But also oh, they're gonna want to be flashy. Come on.
Speaker 4: The last thing is I think there's this dichotomy of the four an automakers trying to sell to Chinese consumers and the Chinese ev makers looking to show off to the rest of the world. I think that's what's really
really kind.
Speaker 1: Of So, you know, my sense is, at least with General Motors, I think they've hit bottom in China. That's
all I mean.
Speaker 5: I was just going over some numbers this morning with Kaylee Hall from Writers for Piece.
Speaker 2: She's doing buick.
Speaker 5: Over the last four years, their sales in China are down sixty five percent. Yeah, you know, they've gone from
over nine hundred thousand to about three hundred thousand.
Speaker 1: Yeah. No, I think GM and General continuing fifty percent, right,
But I'm saying this year right now, first quarter, it looks to me like GM and maybe some of the other foreign automakers have hit bottom. I e. They didn't
continue the bleeding in the first quarter. So that's what
I'm wondering is have they have they finally gotten enough nevs in their lineup that you know, they they've staunched the bleeding for the moment.
Speaker 3: Well, okay, what's what's your sense of the receptivity of the Chinese public to buy foreign brands?
Speaker 4: Now, Well, I've been told from g from from folks in China that GM has hit a bottom. The folks
that haven't or Volkswagen groups specific like a Porsche. Okay,
And I don't believe the Chinese consumers hate Western brands.
I just don't think the products resonate. And to John's point,
that's a slow slog. Although John Lawler said this week
on a Bank of America interview, they can do Chinese China.
Ev In can do clean sheet to job one in about eighteen twenty months. I don't know any foreign OEM
that can do that. But remember they have platforms. They
do simulations instead of prototype, physical prototypes.
Speaker 2: It's a lot easier to do that.
Speaker 3: About the foreign car companies, I mean these are like you mentioned Lawler, I mean Ford, I mean for US, it's not a foreign car company.
Speaker 4: Yeah. So well, Ford doesn't really sell that much into
China anymore. They export out GM. And I think I
mentioned this last time I was here. Cadillac is now Buick.
Buick is now Chevrolet. Chevrolet is kind of gone from
the China market, and Chevrolet is an export brand into Latin America because they sometimes rebadge rulings and Belduans and ship them to Latin America. And that's where I think
they still feel. GM specifically still feels that Cadillac has
an opportunity because of its premium nature. But what is
a little bit different in than China market is that premium is not about the fit and finish of the interior, how lugurious the leather is. It's how connected the vehicle is.
It's how safe they feel in the vehicle. And that
could be a thirty thousand dollars car, not a sixty seventy thousand dollars car. So I think that kind of
throws the traditional automakers for a loop a little bit.
Speaker 5: Yeah, so you look at the technology and a lot of these cars, like you look at a Buidcal and you know this is a you know, sub thirty thousand dollars mid SI sedan and feels like something that here, you know, from any any non Chinese OEM, would cost you at least sixty seventy thousand dollars.
Speaker 4: It's still simple, but yeah, it's still it's substantial in its features.
Speaker 5: Yeah, Yeah, there's a lot of technology, a lot of features in there.
Speaker 3: So, Sam, you've been dealing with tech your whole life.
I mean, what is it that allows them to do that at such a price point while we're not seeing that from the domestics.
Speaker 5: Well, a big part of it is the fact that you know, everybody's doing this on ev platforms that have gotten you know, at least within each OEM, and it often you know, shared among multiple brands, have gotten increasingly commoditized.
And so if you think back to the nineteen fifties and nineteen sixties, what it was like here, you know, automakers they would put a new top hat on a vehicle literally every year. I mean it was completely you know,
completely new body, but what was underneath was basically carryover.
It's the same kind of thing. So you're carrying over
a lot out of the core technology. It's evolving too,
but at a slightly slower pace in terms of the generations.
And so you can take that battery, that motor and set and then you know, put a different body, a different interior on there. That stuff's a lot faster to update.
Speaker 2: Uh, you know, you can.
Speaker 5: Do your your CFD for your arrow, do your crash testing with all of that, and you've got the same basic architecture and then you know, at perhaps a slightly different cadence offset from those body changes. You're also doing
fairly relatively rapid iteration as as new batteries come out, you know, updating the motors, and it's not necessarily on you know, the strict annual basis that we've traditionally had.
Speaker 1: But another key thing is none of them are making money.
I mean, there was even an article out this week that said Neo le Outo, le Outo's profitable, even though the profitability is sinking. What was the other one, Sean
Deepro or something like that or anyway, some analysts came out and said, those three companies are not going to survive.
They're going to get restructured, they're going to go out of business, or maybe they're going to merge together.
Speaker 3: Neo, but that was your that was your big battery swapping company, right.
Speaker 1: Oh yeah, No, Neo's doing a lot of really cool stuff technologically, but they're not selling many cars and they're not making any money.
Speaker 5: Yeah, they've sold they've sold a total of about six hundred and fifty thousand cars as they launched, yeah in like twenty eighteen nineteen.
Speaker 1: Yeah, so that's not a lot of cars.
Speaker 5: And you know, one of the things that they're doing right now is they're actually in talks with CTL to sell off their batteries swapping business unit CTL because HL has actually got a really cool new swapping approach. They
call it Choco Swap, which uses it's kind of similar to what AMPLE has been doing, but it's so it's modules swapping modules, but the modules are a little bit larger.
You got two standardized module sizes, and it also comes in two chemistry, so you can get an LFP or NMC chemistries. And it's designed so that an OEM can
take these modules and they can use any combination of one, two, or three of these modules. And it can also be
oriented laterally or long tuninally in the vehicle, so for different sized vehicles, they got common modules in there, and the swap system when the car pulls into the swap station, it detects what the vehicle is, which way it's oriented, and it can come in, you know, take a long tunal one, put put another one back in it's the same module that can go either way. And then the
other thing is you can also you know, you don't have to you know, you can have a vehicle as designed for two or three modules. It doesn't have to
be running with three modules all the time. So you know,
you can run with a single module, and then if you need to take a longer trip, you can go in and get two or three.
Speaker 1: Modules around a bunch of heavy battery that you know.
Speaker 5: You're not hauling around the batteries. You're also not paying
for battery that you're not using. The vast majority of
the time. You pay a monthly subscription for you know,
some some number of kilometers per month of you usage, and then you get to within that limit, you get to swap batteries.
Speaker 2: When a little more is a service.
Speaker 4: A little more detail on that, though, because Neo has now three brands, the third brand being Firefly, which is their mass market brand, and they haven't really sorted out the complete strategy for swapping, because yes, they do have these CATL swapping stations, they have the Neo branded swapping stations, the CETL branded swapping stations or more for fleet for taxis and things like that. And so think a Cadillac
retail store versus a Chevy retail store from a swapping station and cleanliness and things like that and where it's located.
So I think there's this still trying to figure out what our overall swapping strategy is while we're trying to onboard or recruit OEMs to utilize our platform and our IP because that's how we're going to end up making money on swapping. Because the Envo, which is their mid
level brand, was very very disappointing in sales, and the CEO of en Vo when he came on board said if we can't sell twenty thousand a month in the first six months, I'm going to quit. He quit and
Sole Auto.
Speaker 2: Why they're one.
Speaker 4: Of the big reasons they're successful is because they're primarily China and they were e rev. Mostly they have the Mega,
which is a battery electric, but now everybody has a large MPV and x Punk is being really aggressive. Their
brand summit on April fifteenth talked about the the I forget what it's called, but the flying car. The talked
about the robot for manufacturing, and it then talked about how they're going to be sixty five countries. But to
your point about Neo's not going to survive, one of the professors of a Chinese university.
Speaker 1: That's who I'm citing. He's he's the guy who said
they're not going to make it.
Speaker 4: He said it's two million. You need to be two million.
Speaker 1: A year or you're going out of business exactly.
Speaker 3: So, so who in China's two million.
Speaker 4: Period period?
Speaker 1: B id?
Speaker 3: Right?
Speaker 2: So what happens to everybody else?
Speaker 1: They go out of business all and that.
Speaker 5: They got bought by a g L or uh you know or one of the other bigger ones, and you know those grow to that two million scale.
Speaker 4: I think if if there's any IP to extract, because unless you're buying manufacturing or you're buying IP, it doesn't make sense to consolidate that way unless the Chinese governments, like you two should get together. Even s O s
are now talking about consolidation, even the government about yes, yeah, what is an SOE state owned enterprise?
Speaker 1: The government owned car companies?
Speaker 4: So there are five or six and most of the foreign automakers are joint ventured with state owned enterprises. So
SA I see is the Shanghai that GM and Volkswagen are joint ventured with the largest or Sai ce FAW and one is that ch is pretty big.
Speaker 1: Yeah. Sam two brought it up earlier, this crash that
happened in China. He called it the SU seven. It's
the SU seven, Show me SU seven, right, you pick it up from there because talk about the crash and the ripple effect of what's happened in China. Sense.
Speaker 5: Yeah, So apparently the vehicle was operating on their navigation on autopilot mode, which is similar to Tesla's Navigate on Autopilot level two system, and the.
Speaker 2: Car crashed caught fire. Three people died.
Speaker 1: In headlines all across China, and part.
Speaker 5: Of the reason why they died is the car caught fire.
They could not get out of the car. Because so
many of these modern cars, like so many of the modern cars sold here, have you know, some sort of powered door handles, that retracting door handles. Uh, and you
know there's not there's not a readily accessible mechanical latched.
Speaker 1: Open does have mechanical as.
Speaker 2: Well, they all do.
Speaker 5: But what I'm saying is they're not necessarily readily accessible, or if you're not familiar with it, if you haven't used it, that's you don't know where it is.
Speaker 1: People don't like.
Speaker 3: So the car's on fire and people can't get them out because there's no door handle for them out.
Speaker 5: The exterior door handles don't pop out because it's lost power, and the interior door handles. They don't know where the
mechanical backup is because often you know, they'll be hidden down in the bottom edge of like the door pocket or something like that. And you know, so I've written
about this is just this is just a terrible idea.
We don't you know, if you're going to have a mechanical backup anyway, then why bother adding the electrical switch gear to do it? Just to have the mechanical door
handle and you know that always works. But one of
the after effects of this is just yesterday or today, the Chinese regulators came out with a bunch of new rules as far as assisted in automated driving systems. So
there's a bunch of things that they're that they're banning, and that's de did I've got to go through go through the list here, but number one on the list, public beta testing programs are now prohibited. So the kind
of thing that Tesla has been doing for the last decade with putting out beta versions of autopilot and FSD.
Speaker 2: You can no longer do that.
Speaker 5: Bolton and Chinese the marketing terminology strictly regulated, so they can no longer they have to avoid terms like automatic driving, autonomous driving, intelligent driving or advanced intelligent driving in their marketing materials. So Tesla already in China recently changed the
branding of FSD. They got rid of the FSD branding
and they have another name for it. Strict on hands
requirements are enforced, a hand on requirements, so no hands off systems, so systems like supercrews, your hands have can't go off the wheel for more than sixty seconds. And
let's see new prohibitions on over their software updates, so it's more restricted. They can still do o t A updates,
but you have to go through the regulatory recall process, so the cadence of those o TA updates is going to be slowed down a lot, so they can't just push out an o TA update whenever they feel like.
Speaker 1: You know, this is very quick to come out with this regulation. Do you think that was already in the
works or was it this accident that triggered them to.
Speaker 5: Spect that they've been They've probably been discussing this first some time, and you know, this news probably pushed them to say, okay, let's go ahead and implement this now.
Speaker 1: So two, what do you think what's the impact? Because
you know, what everybody's talking about in China now is how good they are at all this advanced driving systems eight ass and what not. It's been a key selling
point in China. If you can't even mention this stuff
and you're advertising, now what happens?
Speaker 4: So I think I said this earlier. The two things
that are very important to a Chinese consider how connected the vehicle is and how safe the vehicle is. And
the intelligent driving up until this point really implied safety because we have light are we have radar, we have so ar protecting you, okay, and Shami being such a big brand in China and the Su seven being such a popular vehicle. The additional wrinkle was that the person
that owned the vehicle wasn't driving, so they might not have I'm not seeing the person that owned the vehicle knew the mechanical but that created another It was.
Speaker 2: Like three university students.
Speaker 4: And they found out that it hit the barrier at like seventy two kilometers, so pretty pretty fast. So I
don't the car wasn't breaking or something like that. I
think that it was.
Speaker 5: It was coming up construction zone, the lane was ending, and the car did not immediately recognize it, and then the driver had to take over. As you said, it
did not get slowed down soon enough.
Speaker 4: What So this is on the backdrop of byd Weeks just weeks ago saying we're going to offer it standard on every suside five likely five point three million cars that we're going to sell this year. So it creates
so the Chinese companies will immediately adhere to these new policies, but I think there's going to be a lot of room for interpretation and negotiation to the background to figure out how to practically roll these policies out. But also
there are two or three companies, I think Zeker and x Point were like, we're going to launch level three by the end of this year, So there's that Now announcements about intelligent driving get dialed down a little bit during the show that we're going to be at I don't know.
Speaker 5: But.
Speaker 4: It is pretty much a ubiquity now. Level two plus
in China for most vehicles that are above a certain price point, and it'll slow things down, but that cat is already out of that bag, and I think from it won't be as marketing heavy because it'll die down for a little bit. But these accidents, unfortunately, were bound
to happen just because there's so many cars that have this capability and a lot more people. There's a couple
of things going on. Not many people know how to
drive cars that goes there to sixty in three seconds in a safe way.
Speaker 5: Number two, and that's in this country, that's everywhere.
Speaker 4: Yeah, so and yeah, I think because it seems so safe in the first thirty seconds one minute, generally speaking, there's a false sense of security and if something does happen, yeah, you do have a split second to react. And I
think the difference between China and the United States is that some companies are still marketing it a certain way here and that's not going to be happening anymore in China.
So so.
Speaker 3: If the issue is safety and connectivity, that seems to be this incident is two strikes right.
Speaker 4: Well, the features, the features, So that's what the people want, and that's a huge concern because the shell Me share price tanked quite significantly. I don't know how much it's
gone up over the last couple of days, but there's a great cloud over the brand for a little bit.
And this is on the heels of the U seven or why you seven, And I'm still not sure. I'm
gonna have to ask to show me guys whether it's seven or s u Anyways, the U seven is if you squint, it looks a little bit like the Ferrari as you me, and that is supposedly going to take a ton of sales from Juniper, which launched like two months ago in China.
Speaker 2: And Jennifer is the refreshed model y.
Speaker 4: And kind of as a preemptive strike, probably to pull sales forward. Tesla has currently three years zero percent of
financing on the Juniper in China and the China market because it Tesla probably knows that it's likely going to lose a disproportionate number of sales. And it's not just
the U seven, there are other SUVs, especially after the Shanghai Auto Show, because there's going to be so many debuts that are going to take sales from it.
Speaker 3: Right So to the point of the debuts you something like ninety three world introductions of vehicles. I mean, who
are all these companies that are going to be introducing all of these vehicles?
Speaker 4: Right? There's going to be a mix of foreign companies
and Chinese companies, some companies that you're going to just meet and see for the first time.
Speaker 1: WHOA who can keep track of all the different car companies in China. There's well over one hundred dollars and
some of our little inky dinky ones that are barely hanging on and I can't name them all.
Speaker 5: And the established brands like Byds and Gelie's and so on.
You know, they seem to be launching new brands all the time. Yeah, so you know, now it's not just
the one over arching brand, but you've got a whole bunch of sub brands within that group.
Speaker 3: So what's the reason why they do that?
Speaker 4: I think that they're learning from the foreign automakers and I don't know any Chinese consumer that would buy a sixty thousand dollars seventy thousand dollars BYD, So you kind of got to separate rate that branding to premium and they've done that with Funmbao and Young Wang and they also want to be able to just like here, you know, you know, have a halo vehicle, to have features that will trickle down like God's Eye. Because there's three versions.
There's a non there's a vision only that's going to be on the ten thousand dollars sedans and Hatchbacks, and then the the B version is one lighter and then the three uh, the A version is going to have three light R and that's going to be on the premium, premium yong Wang vehicles.
Speaker 3: So and what would what would that cost their one of those vehicles.
Speaker 4: Yng Wan is about a million bucks a million R and B sorry, yeah, one hundred and fifty. But and
this is where boids just should be spoken about separately because they also launched within weeks of telling people they're going to give God's Eye for free as standard, they have a mega watch charger now and of course the China market after two weeks, there's two more megawat chargers that were out. So that's by their companies, by Zeker
and c Ato, I think so. And we're talking four
hunder climbers two hundred and forty miles in five minutes, right, So what we were talking about swapping. Do we need
swapping anymore?
Speaker 1: Yeah, No, that's right. Now, we've talked about that on
the show before too.
Speaker 5: But I think actually the swapping actually does make more sense because when you when you look at the amount of power that's required for Mega watch charging, especially if you've got a station with four or five, six or more chargers at that location. You know, at peak periods
when you have a bunch of cars show up at once and want to charge, now, you're drawing down a whole lot of power. Whereas with swapping, you know, if
you have a commonized swap system, you can get the same kind of range added in a comparable period of time.
But those modules they go into the rack, they can be charged at a much slower rate asynchronously from the use in the cars, and so the strain on the batteries is vastly reduced. Those batteries are going to last
a lot longer than if you're megawat charging them, and there's a lot less strain on the grid and the amount of power that you have to have coming into that location.
Speaker 1: Now that's a key point that you know, the utilities have got to be able to hook up those kind of Mega chargers, and that's going to come very very slowly. Look,
a DC fast charger right now is I don't know the number off the top of my head, really expensive.
Speaker 5: It ranges, you know, at the low end, for like one hundred and fifty kilo DC charger, you're looking about seventy five thousand dollars up to about two hundred and fifty grand for three hundred and fifty to four hundred kilowatts.
Speaker 1: Right, But that's just buying that, that's not the installation gaps.
Speaker 5: You know, the cost of actually getting that station set up.
And if you need a substation upgrade right now, you're looking at eighteen months to two two and a half years lead time because you know, for you know, the the transformer manufacturers are prioritizing who's getting the transformers. If
you're doing a DC fast charger, you are at best third on the priority list behind AI data centers and healthcare facilities.
Speaker 2: And they want all the farms.
Speaker 5: Yeah, they want all the power, right, So the chargers getting the way.
Speaker 3: So John, I've got to ask you, I mean, okay, this battery swapping means that there has to be commonization agreed to buy multiple OEMs for it to work.
Speaker 5: Okay, and ten Chinese OEMs have already signed on for Choco swap, right, Okay, what.
Speaker 3: Is the likelihood that OEMs in this country would do that?
Speaker 1: Uh? Slim to none. You know, it's happening in China
because there's very generous subsidies to do battery swapping, because China's trying to figure out where's this, you know, is it charging, is it's swapping, what's going to happen? And
they're subsidizing both and they'll let the market figure it out.
But in this country, there's not one penny for battery swapping.
And you're absolutely right, Gary, they'd have to commodize mounting points and things like that. But you know, Sam brought
up this great point that you can have different modules.
So if you're just going to zip around in the city, you have a relatively small battery, you're not hauling around extra weight that's not needed, and you pay less for it.
Speaker 5: You take as an example, something like a Chevy Equinox type of vehicle. Instead of hauling around eighty five kilowatter
hours for a vehicle that most of the time is running less than fifty miles a day, you could have that vehicle that carries you know, say three of those modules, and could have you know, for a long road trip, you could have you know, three hundred and fifty four hundred miles of range with a single module. It will
get you, you know, are at least one hundred miles of daily driving range. And you can still plug it
in and charge it at home, or you can swap it.
And because now you're taking six seven hundred pounds out of the vehicle, it's going to be more efficient, it's going to be.
Speaker 2: Way less costly to purchase.
Speaker 5: So instead of a base price of thirty five thousand dollars, now you're looking now you can maybe get that down well under thirty thousand dollars because you could actually be buying just the vehicle and you're doing battery as a service.
You're not even paying up front for the battery.
Speaker 4: That's what the Chinese do, That's what Neil does, right.
Speaker 3: But I mean, it seems to me that one of the reasons why people are not buying evs in the United States is the whole issue of range anxiety, which I know is you know, you can throw all kinds of numbers at it and point out like, oh, people only drive X number of miles per day, Right, But if suddenly I have a need to go to Traverse City from the studio, I'm going to need.
Speaker 2: I'm going to need into a swap station.
Speaker 5: You get right, and the three fully charged modules, you're on your way. You swap again in Traverse City before
you come back.
Speaker 3: That's assuming the swap station is a accessible, be open, and c doesn't have a large line there doesn't have a large line out of it as the Costco gas station did this morning when I went and put gas in.
Speaker 5: The swap station you know, takes up roughly three parking spaces and uh and and takes less than five minutes to do your swap.
Speaker 4: The Neo get into it.
Speaker 2: Well.
Speaker 4: The the challenge was swapping is obviously the upfront costs, right, and trying to figure out what the utilization will be.
It needs to be above a certain percent to be profitable, number one. Number two, those batteries need to sit on
somebody's balance sheet, right, and if it's on Neo's balance sheet, then the path profitability is gone. So some third party,
whether it's a bank, whether it's a financial institution, needs to create some entity to have those batteries sit on it from an accounting standpoint.
Speaker 2: Right, which is why better place failed.
Speaker 5: But there's actually a you know, there's a potential business there if you can actually get swapping to scale. The
advantage of actually having those batteries on somebody else's balance sheet besides the vehicle owner is that now they control those batteries for the life of that battery from the time it comes from the factory until the time it goes to recycling, and they're generating revenue from that battery throughout its entire life cycle. And then when it comes
time to recycle it, then you know, they can direct it to send it directly to the recycler. They can
also get some potentially get some additional revenue from that that the recycler then recovers from selling the materials they've pulled out of it.
Speaker 1: Right, But it still needs heavy subsidies to break all the numbers work.
Speaker 3: And for me to drive up to Traverse City, halfway there, I'm going to need to stop at a swap station, and this guy is going to be carrying a whole lot of batteries that is costing him a whole lot of money because unlike a metro area where they're be frequent swapping. This guy's like sitting there and it's like, Ah,
somebody's got to come up and get it battery from me.
Speaker 4: This six hundred thousand units for eleven year old company sales of swapping, didn't you know hit some number that made sense for a lot more people to buy swapping vehicles, right.
Speaker 5: So nobody else was using those battery packs except neo vehicles.
When you've got something that is commonized across multiple brands, that's where the scale comes from.
Speaker 2: You have to have that commonality. But I mean hardcore companies.
Speaker 3: Using batteries as a structural element in their vehicles. Therefore,
how do you swap them?
Speaker 1: Well, it's just like having a stressed an engine. As
a stressed member of the chassis, it bolts in and that's when it becomes a structural member. So you can
bolt in these these battery packs and they're structural, but you can unbolt them and take them out, but then the car gets.
Speaker 5: But part of the reason why they're going that structural approach is because they're trying to maximize the amount of battery that you get in the vehicle. Again goes back
to the point, do you need to be carrying all of that battery all the time. If you don't, you
don't necessarily need to use that module as a structural member of the vehicle.
Speaker 4: There's I mean, there's always trade off from a practical standpoint.
It's like GM and four de green on some engineering you know standard, right, they it would be very difficult for them to do that number one. Number two, If
I'm using Neo's IP, I need to pay them money.
And I think there's that element to it too that makes people hesitant. Where I see the opportunity is a
desperate automaker, whether that's a foreign automaker that's selling into China.
I need to make my vehicles more attractive. So maybe
I'll license this technology to Neo or from Neo and turn my car into a battery. Because if you look
at Renault, you look at some of these smaller entities, they're struggling mightily. If they want to stay in that market,
they need to either build great vehicles in a real short period of time, or they need to partner. Yeah,
and Volkswagen and Stilantis have already waived that white flag.
Speaker 1: Okay, we've passed the first half of the show, Sean, we have an ad to play or should I? Okay,
I'm going to get this is the break in the show I'm going to give yah. Yeah, yeah, no, no,
as I'm sure most of you watching right now. No,
we're doing a membership drive. You can help support this
show through Patreon. We've got a link in the video
that you're watching right now in the description box of how to get to Patreon, or you can do it on YouTube too. We really need your support to keep
programs like this going. And now I'll shut up. I'm
not going to push that anymore. But Gary, what else
do we need to talk about? I think we've covered
China for the first half of the show.
Speaker 4: I want to hear about the New York Audio.
Speaker 1: Okay, let's hear it. Sam, you were there.
Speaker 5: Well, there wasn't ninety three product introduction.
Speaker 2: It was more like nine.
Speaker 5: But I mean for at least half a day yesterday, it actually was. It kind of felt like auto shows
used to feel like. You know, we had multiple press conferences,
multiple well basically two OEMs that were introducing products.
Speaker 4: You know.
Speaker 5: We started off with Subru they showed off an updated version of their Sulta EV and a new EV that is based on the Sulta, but it's kind of more of an outback type of vehicle with a lot more performance.
Speaker 1: Say the name, because I can't stop.
Speaker 2: It's called trail seeker.
Speaker 1: Trail seeker, I just don't anyway, go ahead, well.
Speaker 2: At any rate.
Speaker 5: He also had Kia that showed off a couple of new products K four hatchback and the EV four sedan that are both arriving this year. And the the EV
four is going to have up up to three hundred and thirty miles of range with the bigger battery price point in the thirty thousands upper thirty thousands range.
Speaker 2: And then what.
Speaker 5: Else, Uh, Hyundai showed off the all new Palisade, the next second generation Palisade we had.
Speaker 1: Uh.
Speaker 5: Subaru also had a second press conference where they showed the new outback, which was should we say, controversial and its styling. Why pretty much nobody that I talked to
that thought actually likes the way it looked.
Speaker 2: It's kind of much more boxy, bulky and boxy looking.
Speaker 1: Uh.
Speaker 5: They've clearly tried to move away from you know, what was obviously, you know, a derivative of a station wagon of the legacy station wagon. The legacy of the legacy
is gone.
Speaker 4: Is unique.
Speaker 2: Yeah, yeah, I mean it's it's definitely unique.
Speaker 5: And then what else, Oh, Genesis showed off the He showed off a new concept called the ex Grand Equator, which is a big off roader with twenty four inch wheels, block wheels with altering tires. Who would ever have twenty
four inch block wheels for off roader? I don't know,
but but I think it gives some hints of where sand Yeah, we're just b lock wheels mean that it's used for for off road vehicles.
Speaker 2: It helps retain the tire bead.
Speaker 4: In the red bolton to the wheel.
Speaker 5: It's not bolted to the wheel, but it's the beads.
The tire bead has a different shape and so it helps retain it in the in the rim of the of the wheel so that as you're going over you don't throw off the Yeah, you're not going to knock the bead out of the thing and lose all your pressure.
Speaker 4: And what was the feeling like? Was it excitingment or
was it.
Speaker 5: Actually it was pretty exciting for a while there. And
you know, and they also showed off their their new in full scale the race car that they're going to take to Lama next year running the World Endurance Championship and bring it to Imsea in twenty twenty seven.
Speaker 1: Uh.
Speaker 5: They had their first two drivers there. They had Jackie
X mister Lama.
Speaker 1: They're very famous race driver Yep from back.
Speaker 5: Well yeah, he uh he won Lama overall six times, He's won the decar Rally several times, he's won in Formula one and on motorcycles he's he's one on everything with wheels that he's ever tried at various times in his career. And then VW showed off the tig One
s C l R Line Turbo, which is just basically a mix of g t I and tig One for their for their new Tag one.
Speaker 4: So Hondai Kia are dominated.
Speaker 3: And then there was there was the wagon Ear Overland Special Edition that was that was actually not at the show.
Speaker 5: That was the Eastern Jeepsafari in Utah.
Speaker 1: Yeah. There. The Hondi Group and Subaru are the only
yauta makers in the US that still treat auto shows seriously.
Speaker 5: And of course the most important thing is Subaru does have their puppy crawl there.
Speaker 1: Oh yeah, the dogs right, So I did some interesting Friday. Saturday.
I was in Miami because Coopra wants to come to the US market. So a little bit of history. Coopra
is a spin off of Saat, which is the car company in Spain that's actually part of the Volkswagen Group.
And about seven years ago, Saat decided, hey, we need an all electric performance brand and they created this thing called Coopra. I thought they were nuts. I mean, you know,
the European market is dead in the water and the last thing it needs is another brand.
Speaker 2: And I thought that it's worse than dead in the water.
Speaker 1: It wants decline. And yet last year Coopra sold over
two hundred and forty eight thousand vehicles, and I'm like, holy crap. But then I heard earlier this year that
they planned to come to the US market, and I thought these guys are nuts nuts, And then of course Trump and the whole tariff thing has happened, and I thought they were even crazy. So that's why I went
to Miami. I wanted to see what is this company about.
And they're they're sticking to their plan. They want to
be in the US market by twenty thirty, and I said have you guys heard about President Trump and his tariffs, And they went, John, it's all going to be resolved by twenty thirty, don't worry about it. So their thinking is,
and this is me reading the tea leaves. They didn't
say this to me. They don't think it's going to
end up as a twenty five percent tariff. The feeling
I got they think it's going to be about a ten percent tariff and that they can probably live with that.
But I got to drive some of their cars, not extensive driving, but very nice interior. So what they've decided
seven eight years ago is that there's a gap in the market between the Volkswagen brand and the Audi brand.
So they're going right in there with highly styled cars, very nice in Tearsgie yeah, Edgie, even more performance, so you get a better car than a Volkswagen that kind of feels premium, but not at the premium price of an Audi. And so far they've made it work, and
that's why they want to come to the US market.
Speaker 3: Okay, So so basically what they're saying is that, Okay, electric VW's here not selling a great deal, Electric Audi's here selling a great so it will come in and not sell a great yeah no, no, no, yes, great great thing.
Speaker 1: So yeah, strategy. Originally it was going to be all BEV.
Market realities are such that now there's ice and p have in the lineup and that's what's really selling.
Speaker 4: You're going to see. So that's the thing about and
now mentioned this one last time about China. That's where
you're going to see a well balanced group of BEVs, PHVs, e revs. You're going to see a lot of that
because more car makers in general, GM for instance, has has phvvs in the market now or PHVs in the market now. So I think that's what's going to be
exciting for you to be able to see the width and the depth and the breath of.
Speaker 1: All these right, I can't wait.
Speaker 5: Then that's in my new forecast. That's that's what you know,
forecasting a lot of ERA penetration, particularly in China and North America in the next decade.
Speaker 3: Sam, So when you were in New York, I mean, did you see companies that were introducing P haves.
Speaker 5: Or not not the I mean, well, the Palisade is available as a hybrid now, so they've taken their base Hyundai's basic hybrid architecture they have on many of their vehicles, but they've swapped in a two point five liter turbo in place of the one six that they have and most of their smaller vehicles.
Speaker 2: So that's that's available as a.
Speaker 5: Hybrid now with three hundred and thirty ish horsepower, and so it'll be more more powerful than the base V six version uh and should get mid thirties miles per gallon combined fuel economy.
Speaker 2: And the Palisades a big as fiel.
Speaker 5: Yeah, it's a big three row suv and then not no, but not much smaller than that though, you know.
Speaker 2: So it's it's it's getting there.
Speaker 5: Uh. And it's at the new ones a couple of
inches longer than the than the first generation.
Speaker 1: Uh.
Speaker 2: So we saw that hybrid. Uh.
Speaker 5: And then of course the key EV four is ABOV So you know, we had three new BEVs basically that were shown the the Genesis concept, uh, the off roder concept.
That design does not have a grill. They're they're not
talking about any kind of powertrain for it. But you know,
if they built something like that without a grill, it's obviously sand out. Yeah, obviously, you know they're they're targeting
towards a BEV type of design for that vehicle.
Speaker 3: But I mean to tooth point. I mean in China,
they're they're doing all kinds of propulsions.
Speaker 2: Yeah.
Speaker 3: Well, and it seems like here there's still we're seeing, we're seeing we're seeing more well, no, we are seeing more hybrids.
Speaker 5: Hybrids have picked up a lot of market share in the US in the last couple of years.
Speaker 2: Uh you know.
Speaker 5: Now, you know, for Toyota, I think close to forty percent of their US sales are hybrids now.
Speaker 1: And they've always they've always had hybrids, but they're but.
Speaker 5: They're also they're growing there. They're they're plug in hybrid options.
Uh GM has said they're going to bring plug in hybrids.
But I think the big thing that we're going to see in the big truck and suv segment in particular is E revs. You know, the RAM charger that's coming
later this year is an E REV. We are going
to see an E REV from Ford, I think in the super Defer your post by probably twenty six or I think that's I think that's a good question.
Speaker 1: No, No, My question is I think E revs are perfect for trucks. And SUVs it fits their duty cycle.
I mean the RAM charger. They're talking six hundred mile range.
Uh yeah. The key is where do they price this?
And and will a hardcore truck buyer really buy a bet an e REV. Will they really pull the trigger and
say yep, that's for me.
Speaker 4: Well, and here's the thing about e revs trying to xpund is launching an e REV that's going to have like four hundred miles alone on e REV before the engine kicking in, it's going to have like seven hundred or six hundred miles of range, and an ERAV with six or seven hundred miles. It's crazy. So they're still
one upping and kind of but I just.
Speaker 1: Said, you know, the RAM charger is going to be six hundred really.
Speaker 5: Okay, six hundred and ninety total, it's about one hundred and forty five electric electric. But you know, again for
a big truck like that, that that's.
Speaker 1: Call fourteen thousand trailers.
Speaker 5: Thing is, you know, when if you you know, if you look at the amount of battery you need for those bigvehicles and you do the math, the e REV is actually, even though it has great you know, you have an engine and you have a battery. It's actually
probably going to be like the RAM charger is probably going to be somewhere in the neighborhood of five to six thousand dollars cheaper to build than the BEV the RAM rev because you know, the amount of battery that you're reducing there, you're taking about nine thousand or so out of that. You're adding back in about probably somewhere
in the neighborhood about four thousand dollars for the range extender or the fuel system they exhaust and so on.
So you're going to have a net benefit of somewhere in the neighborhood of five thousand dollars in terms of cost.
How they price it, you know, hopefully you know, they will give at least some of that savings to consumers, you know, so that they can have competitive well, I mean they need to be you know, they need to be competitively priced against the BEV trucks that are out there now because those aren't selling in large part because of the price, but also because of the toing capabilities.
Now you got the toying capabilities. If you can price it,
you know, at least several thousand dollars less than those BEVs.
Now you've got something that might be more compelling to the truck buyers.
Speaker 3: So so too in China, are the e revs just large SUVs or are they being put in other types of vehicles?
Speaker 4: The motor makes E revs, So there's all over fifty thousand dollars cars that are east andans that are E revs.
So it's across the board.
Speaker 1: You know, especially when you get into tier. So I've
read tier two in three cities in rural areas of China.
Range anxiety is a problem in China. You know, the
big cities all have great infrastructure for charging, but once you get out of them, not so much.
Speaker 4: There's there's going to be more penetration into these lower tier cities. But yeah, the first of all, they're more
attractive towards the leap motors because of the price points.
And then also and this is driven by BYD. A
lot of it is driven by BYD because they see the popularity of the sixty forty split between PHVs that that that BYD sells versus the BEVs that they sell.
And in China last year is eighty percent year over year growth just on the PHV side. So just because
of that momentum, it's going to trickle into Europe. And
and remember that the tariff doesn't count on PHVs in Europe, so you're going to see only a lot spike.
Speaker 2: Right.
Speaker 3: So BYD is selling a whole bunch of plug in hybrids and not as many.
Speaker 4: It's like a sixty forty split between forty for Evye sixty for PF. But I don't think they care because
they control seventy percent of the bill of materials themselves, so they're not giving away any margin to any suppliers.
And I think the batteries, the they don't consume themselves.
There's gonna be OEMs that are happy to buy that compass.
Speaker 2: Yeah, they sell those blade cells to all kinds of oways.
Speaker 3: So so Sam, do you I mean, do you see applicability of e revs to being different types of vehicles or just tahoe sized?
Speaker 5: And absolutely there's there's definitely applicability to you know, to particularly down into the mid size segment.
Speaker 6: Uh.
Speaker 5: You know, will we see them here get into compact vehicles?
Speaker 2: Maybe maybe not.
Speaker 5: We could we could see them in like wrap four CRV sized vehicles, uh in the coming years. But I
think you know, Hyundai has already said they're going to do an e REV, which is probably going to be based uh on the Ionic nine, which is you know, big but but smaller than a tahoe sized vehicle. They've uh,
you know, Scout is doing an e REV based on their trucks that's more full size. But I think we
will see that start to filter down at least into the mid size segments here.
Speaker 1: So then we got to talk about one week from today, this startup called Slate is going to launch their inexpensive BEV pickup truck and it's going to be fascinating to see how the market reacts to that.
Speaker 4: So it's in my backyard because I live in Troy, and I'd gotten pinged about it by a couple of journalists and i'd heard, you know, I was like, yeah, I'm not that familiar with it, and then I looked at old text messages and people have asked me about it very quiet. So last week's newsletter, I was a
little bit dismissive because of the twenty five thousand dollars bogie and if it's just a decontented golf cart or whatever, I'm not going to be that impressed. But because I
have that China bias and I know what you can buy for thirty thousand dollars there, So I'm hoping that it's a huge splash.
Speaker 5: I think we're we're some interesting opportunities there. I mean,
they have said that, you know, they're looking their target, you know, getting a lot of customers to up sell and customize, personalize their vehicles.
Speaker 2: So for consumers, you know.
Speaker 5: That twenty five thousand dollars price point is probably going to be much more like thirty five to forty. But
I think where there's an interesting opportunity, especially given you know, the spy photos we've seen right now just show a standard cab pickup, which I'm not sure how appealing that is going to be to regular consumers.
Speaker 3: Uh.
Speaker 2: You know, if you look at.
Speaker 5: The rest of the pickup truck market, very few people are buying standard cab trucks. They're buying extended cab or
crew cabs. But there's a lot of companies, a lot
of commercial customers to buy Ford Mavericks.
Speaker 3: Well, I say, isn't this the Maverick of evs?
Speaker 1: Yeah?
Speaker 5: Basically, and for those for those commercial customers, they don't need the crew cab for that vehicle. They're using it
for deliveries, and so that standard cab form factor could actually make a lot of sense for a lot and they are going to buy the decontented ones. They're going
to buy those twenty five thousand dollars trucks. So there
could be a real opportunity.
Speaker 3: Okay, there is a question about Okay, if you're if you're a fleet buyer, do you buy from a company you've never heard of that started up two weeks ago versus.
Speaker 1: Buy five and see how they do.
Speaker 2: Ye Motors are ford.
Speaker 4: Is that supposedly rebuild is kind of the the the support system and that's bet Bezos backed. But there are
startups like Alpha Motors in California and tie Low Trucks in California that do something very similar and design wise they look great. They just can they catch that reshoring
manu reindustrialization wave and get some checks, because that's the most important thing. I don't think Diesels is going to
want to fund this thing through job one. He's going
to want external and and I think part of the reason the journalists were or Slate was trying to get more attention is to build that excitement, right and for that event in in April twenty fourth.
Speaker 1: Right, so I know a lot about the company. I've
been brought inside. I've actually driven the truck and everything.
So tech Crunch sort of broke the story. Was it
this week or last est week? And so I feel
comfortable talking about what tech crunch has already reported. After
next Thursday, I can spill my guts about what I know.
But I'm really impressed at the approach that they've taken.
They've done things very very frugally. So you know, unlike
all these other startups that get a bunch of funding and they build these beautiful, you know, company headquarters and they I mean, these guys are not spending money. In fact,
one story I'm pretty sure I can share right now is down the street, they saw that there was some company that was revamping its offices and they'd thrown out a bunch of office chairs, and they went, WHOA, just what we need And they ran down and they grabbed a whole bunch of office chairs just so they don't have to spend money. And they have taken a really
good approach at how to design. I mean, they dfmed
this thing to death designed for manufacturing. I don't know
that they're going to pull it off, and and certainly their costs are much higher than what they would be able to get in China. But for what they're trying
to do and where they've gotten so far, I'm super impressed.
And when I went into the meeting with the top executive, I started laughing. I knew half the people in the room.
All right, some of them have been on the show.
Speaker 3: So why is this not going to be the Aptera of pickup trucks?
Speaker 2: John?
Speaker 1: I refuse to record anything to do with When When did Aptera come out? Six or seven, two thousand and six. Yeah,
and they built and my buddy Paul Wilbur was brought into the company to straighten it all out, and he did all these things and then he finally gave up on it until they put sellable units on sale and start selling them. I refuse to report on anything to
do with app Tira. Remember l e O. Everybody was
oh Elio, and they brought the general motor plan to me.
I don't I have to be careful what I how I say this. I don't think they're deliberately trying to
scam people. But until they start selling these things, this
thing's a scam.
Speaker 3: So again my question, why is this slate not going to be or them?
Speaker 5: Okay, so at least you know the slate is something is a vehicle form factor. That is, I think people
would be more inclined to buy than this little free wheelchair drop.
Speaker 1: Wait wait, wait till everybody finds out that the app Terra doesn't meet any safety standards, don't tell you. Oh,
it meets every safety standard there is. It's classified as
a motorcycle, so it meets every motorcycle crash standard. Will
not take any side impact, it will not take any rollover, front impact or rear impact like a regular car wheel.
The slate truck will do that well.
Speaker 5: To be fair, I mean, and I don't have any verification of this, but you know, I asked the same question back in two thousand and nine when I talked to then I think head of marketing comes uh Mark Z McCammon, who runs Karma Automotive. Now you know, I
specifically asked them, you know, about the safety aspect of it.
And this is you know, sixteen years ago, because it is.
Speaker 1: A three wheel arts years ago and they're still not in production class.
Speaker 5: It's class as a motorcycle they said they were designing to.
Speaker 6: Give them credit for being clicking around though right, well, they didn't jump a lot of the time. Persistence that
they did go bankrupt in like twenty eleven and we're gone and we're revived around twenty eighteen or nineteen. But
at the time, he said, even though it's classed as a motorcycle, they were designing it to meet four wheel vehicle FMVSS crash real harments.
Speaker 2: I don't I don't know.
Speaker 1: There's no way saying there's no way look at that thing.
Speaker 5: You know, I'm not disagreeing with you. I'm just saying
that that was their design attack.
Speaker 1: I know. But they say things like that, and then
the public things, oh, it meets all the safety stands, I mean their literature. I don't know if it still does,
but it did in years past. Meets all the safety standards.
And I went and looked at and I thought, this is hoodwinking people.
Speaker 5: But they did recently do a three hundred mile road traps so what put it in production?
Speaker 1: Put them make saleable units, and and then I'll start reporting about it, but I refuse to because I think they've cheated a lot of people. Out of money in
the fact that they have not come to market.
Speaker 3: Okay, so that road, let's let's not talk about AFTUR.
But back to the question. You know to mentioned e
l ms that they were going to have these simple and trucks and and well they were going.
Speaker 4: To import them from right.
Speaker 2: Top front.
Speaker 3: This is before there was even an issue Yoda, and I was on the Code of lot.
Speaker 4: Why I have such heartburn with the slate and I don't I want them to win obviously because they're US based and Michigan based, although building in Indiana according to tech run Yeah, no's but I don't know why they throw out the twenty five thousand dollars bogie. It just
creates like forward with the lightning starting at forty thousand, with cyber trucks starting at It's just an unrealistic number, especially with the backdrop of tariffs, because even if it's built in the United States, it's going to need something from China that's going to cost twice as much now almost twice as much.
Speaker 1: No all fair stuff. I think the price is actually
going to be a little bit higher than that. But
if the seventy five hundred dollars credit is still around it and has it got away yet? Right, It's going to
be a very attractive price. My concern for them is
I think the volume that they need for their plant is higher than what I think they're going to be able to achieve. But but I'm very excited about the truck.
Speaker 3: We had Robert Bollinger on the show. Yeah, right, a
couple of times, a couple of times, and he's suing his company.
Speaker 1: Oh is he really? I mean it's well, he's got
it Mullen Mullin bought it. Right.
Speaker 3: So there are all these companies that start up, and but here's what I'll say is the people behind the not the investors.
Speaker 1: There's there's billionaires who are putting their money to get Slate launched. People doing all the work are people the
people you guys know, people who have been in the industry for a long long time. They know how to
hit FMVSS standards, they know how to put up a supply chain, they know how to deck. This was done
work for them.
Speaker 4: But this is where I got to push back. I
don't know how much that matters.
Speaker 3: Now.
Speaker 1: I agree to no, I agree. I'm excited because the
process that the product development process that they're using wows me.
Wows me. I mean they've pulled this all together in
a very short amount of time. None of it leaked out.
None of it leaked until last week. And it only
leaked because I think one of those billionaires spilled their guts to to tech Crunch.
Speaker 4: Basically was the plan that was planned.
Speaker 2: That was a plan trying to build up excitement.
Speaker 4: And since you say that, I look at it differently, so because I don't want to be recycled auto guys that are just like incrementally reducing costs, they do need to think differently and look at things differently and start from nothing as opposed to like.
Speaker 1: A first principles approka good to everything that they did?
Speaker 2: Yeah so did so did Tesla?
Speaker 3: How's that working off for them in California?
Speaker 1: Well, you know, Tesla, it went off the rails, wah.
Speaker 4: Tesla because so many other reasons. But there's still multiples
more valuable than the rest of the Okay.
Speaker 1: Here's the other thing too. You know it came out
today Tesla sales down fifteen percent percent in California. I
would have thought it would be down eighty percent the way the media is hyping up and you know, especially California Liberal bastion and hating lines guts. A fifteen percent
dropping sales is not good, but it's far less than I thought.
Speaker 3: They're also, you know, doing so so John, that fifteen percent has to be put in context that the others are up thirty five percent.
Speaker 1: Oh yeah, yeah, yeah right.
Speaker 3: And in that last year they were fifty five point five percent in Q one share market. Now they're down
to forty three point nine percent. Oh yeah, yeah, So
just saying oh, they're only downe fifteen, I think the.
Speaker 4: I think the other thing is is what's really important is some of the guys that I trust from a forecasting standpoint, So they're going to shrink this year.
Speaker 5: Yeah, oh, they're absolutely go across Sam, What does Sam say, Oh They're They're yeah, they're They're definitely going to be down probably somewhere in the neighborhood of thirty percent this year, because I mean, their their shrinkage in Europe is way more than it is here, and you know, also significant shrinkage in in China. Uh so, yeah, they're they're going
to be down a lot this year. And that's you know,
when you also factor in that their take rate on stuff like FSD is declining. They're not going to be
able to launch a true rebo taxi service. Uh, so
they're not going to get any revenue from that. They're
you know, we are what we talked about earlier in China.
They were counting on being able to really launch FSD in China. They're not going to be able to do that.
Speaker 4: But this is why that was never guaranteed for success anyway, just because of the number of competitives.
Speaker 2: Yeah, exactly in China or in China.
Speaker 1: Yeah, and I look, I think BYD announced Hey, you know FSD for free from US.
Speaker 2: Yeah.
Speaker 1: I would put a torpedo in Tesla.
Speaker 5: Yeah, I wouldn't be surprised if you know Tesla, you know, negative net income this year, probably every quarter this year.
Speaker 1: Wow.
Speaker 4: Remember they have a million units that need to get rid of of Shanghai gigas. So the pressure to export
to Japan, to Korea, to Australia, the non European because they're still exporting to Europe from Shanghai. And so I
don't know what that means for Berlin.
Speaker 5: Giga, but that that plan is running at maybe twenty five percent past exactly Berlin or yeah, Berlin exactly.
Speaker 4: So it's and they have requirements from the Shanghai government.
Speaker 5: I believe that, you know, it's part of the deal to get the land and everything and get the support to build it is that they have to they have to sell a certain number of units, and they have to you know, they have money they have to pay back to the Shanghai government.
Speaker 4: And I think the Chinese government wants a strong Tesla because it'll continue to bring attention to the entire sector, not necessarily buying Tesla's, but they'll buy more evs generally speaking.
And so we Tesla, especially with Sumi having that big controversy and how long that hangs out there is going to create a lot of a lot of uncertainty this year for the China market.
Speaker 1: So any anything, if you have any sense of what Chinese buyers think of So I'm going to repeat the question because just so China's Shaun is saying that there's a question in the chat room that people want you to to opine on. What are Chinese people thinking, Chinese
car buyers thinking about Tesla these days with all the controversy.
Speaker 4: The weird thing is Elon has injected himself into the political discourse in the United States and in Europe. He
hasn't done that in China. And so the reason is,
I would say a large, large reasons for the sales declents in California, and I would look at California more than I would look at the United States, and then I would look at Europe. Those reasons are political, I
believe in China, it's just that there's so much competition.
And to go from last gen Model Y to Juniper was a baby stab FSD is not actually FSD. They're
still charging eight thousand dollars.
Speaker 2: For it, and.
Speaker 4: It's it's an also rand. There's nothing that stands out
from that standpoint, and John and I are unless you guys are going are going to see some really amazing vehicles that are probably going to take out the model Why from a sales standpoint, even more past the summer, because we'll get into summertime. The real numbers start showing
up in September, October, November, and based on these initial numbers, for the next few months, Tesla is going to do maybe more financing, so non price cut price cuts, and in the China market, what happens is they show something at this price when it's actually ready for production. They
already reduced the price, so they they price cut themselves a little bit just because how dynamic the market is.
Speaker 3: So basically you're saying, is that in China it's not an issue the same way it's a product issue. It's
a product issue that there are competitors out there that have superior product.
Speaker 4: In China, the Model Wine interior looks like a DD car or an ubercar, and you know, the single I think I'm actually very impressed with the resilience of the brand in China despite not having very you know, effectively one car because the Model three cells. Okay, but it's
China's like the United States, the crossfold RESUV, crossover RESUV and so the not taking an away Model Y was the number one EV last year or two years ago, number one EV last number one vehicle last year. But
that's a lot of eggs in one basket.
Speaker 2: Yeah, and.
Speaker 4: When there are ninety three debuts, there's probably a few of them that will compete pretty well, pretty significantly with the Model Y.
Speaker 1: Hey, look, we got to wrap things up just so we don't drag the audience this much longer. But it's
been a great show. Two lead Sonic sign on auto Insights.
Great to have you, Sam Abou al Submid from Telemetry, great having you here. And Gary I'll be out next week.
You'll have a show to do robotics here.
Speaker 4: We'll take a lot of selfies.
Speaker 1: Yeah, that's right. Anyway, I want to thank all of
you for having tuned in.
Speaker 4: H
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