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My Thoughts on the Li One, MIC Model Y - Best Seller, CATL Domination - SAI Newsletter 14



 

First this week, I wanted to give a more detailed review of the Li Auto Li One. My look will be from these lenses. Technology, design, UX, fit & finish, practicality, features, and finally value. Let me also add that my full-time job is NOT as a car reviewer, there are quite a few out there that are very good at doing that but having said that, I do have an opinion. Initial impressions. This thing is BIG. I was always a fan of the design from afar. Not too many obnoxious plasticky bits on the exterior. But it also doesn’t stand out that much and perhaps that’s by design. Upon opening the door – pretty heavy but it seems solid. That’s one of the first things many ‘car’ people will check out to help them determine whether time was taken on the engineering side to get the feel of the heft (not heaviness) and the sound right on the door slam. Next, jumped in the car and looked around at the front console. I liked what I saw – Nothing seemed out of place and nothing stood out. Materials for the seats, buttons, IP, overhead, door and sun visors were good quality. The car had about ~23K kilometers on it or about 14K miles so enough to begin to show wear but I did not notice any. Another good sign. The front console has three screens. The IP for the driver, the infotainment center console, and a screen where the glove box would normally be on the passenger side. I still think that’s a bit odd to have one there but I better get used to it because a screen is going to be there more often than not nowadays. It wasn’t used that much either while I had it but I could see it being distracting for the driver potentially if used. Turned the car on and checked out the design of the infotainment center and admittedly, my Chinese reading skills are NOT great so I had to guess at some of the buttons so I won’t comment on whether it made sense or not to me. But my wife and kids, who can all read fluently, seemed to not have too many issues with where to find things on the screen. Played with the screen a bit to get used to where the ‘most used’ features like volume, radio stations, map, and AC were. There are also some very convenient control buttons on the steering wheel for the radio and volume. Bonus! There was also a massage function for the chair and I did use it for the long trip I took in it. Drove it home from Shunyi to CBD and didn’t get to let it out that much due to the traffic but thought it was pretty responsive. Again, big car but the steering was pretty light and although I wouldn’t call the car nimble, you could tell that the Li Auto engineers were likely benchmarking the Bimmer X5 while designing the Li One. Now – here comes the most important details. What the wifey and boys thought. When I got home, I wanted to show the boys what new toy we had to play with for the next several days. When they opened the doors, their eyes lit up! First reaction from my youngest was ‘OOOOOOOH!’ Captain’s chairs in the 2nd row so no need to elbow each other for space. AND there was a similar massage function in the 2nd row chairs that the boys discovered as well. A ton of space for a family of four. Well done Li Auto. Now – what did my wife think? She got in and I could tell she was impressed as well. She’d tell you that it’s too big for her to use as a daily driver but it’s something that she felt comfortable in, and we both felt that the kids were safe in it as well, and if you’re positioning yourself and your products as being family-oriented, isn’t THAT one of the important takeaways? A couple of things that I noticed. First, the voice commands seem a little clunky. The kids got a kick out of speaking with Li Xiang 同学 but it didn’t consistently understand what was being said. Next was the sound the vehicle made when braking. It was like a slight hydraulic pump sound. Not loud enough to be annoying, but enough to be noticeable. I am not sure exactly what it was either. Finally, the heft. It felt like a pretty heavy car – and when your wife and kids are inside, that’s a good thing because you feel protected. But the power to weight ratio helped make it a fun SUV to get around in. The acceleration won’t blow you away but it’s definitely adequate. Final thoughts. Li Auto, keep at it. I think this was a very successful first try. The Germans should be concerned. The L9 is likely going to upgrade most of the ‘opportunities’ I saw to improve including having some flexibility in the back seat to entertain kids on long trips. One of the breadcrumbs from Li Auto about the L9 was that you could hook up gaming consoles to the screens in the 2nd row. Well played. The best part – all of this for RMB ¥349,800 or about USD $55K. The only option available is three upgraded colors: Baby Blue, Deep Green, and Tech Blue. One of those colors will run you an additional RMB ¥10K (about USD $1.6K). Like I said earlier, the Germans should be worried because my guess is that the Li One and/or the L9 will hit German streets in the next 2-3 years. I will occasionally be allowed to borrow other cars and when I do, I’ll share my thoughts on those as well. Maybe there will even be some pictures/videos to go along with it. Please join Lei and me for this week’s EVs & More Twitter Spaces room on Thursday, 04.14 – 9pm EST, Friday, 04.15 – 9am China local time. For getting a download on all that’s happening in the space. For those that aren’t able to join, the EVs & More podcast is available wherever you grab your podcasts from. Most of our back pods are posted and the descriptions will be able to tell you what we discussed that particular episode. QUOTED Economist. I had a chance to speak with Henry Tricks of the Economist to give him some background for an article he wrote this week on educating westerners about the ‘catfish effect’ which is the theory that, and I am quoting, ‘a predator makes weaker rivals swim faster.’ This is a widely held belief in China and the catfish effect has been used notably to jumpstart the mobile phone sector and more recently the EV sector. His premise for the article is that the pendulum is swinging back and now Chinese companies like CATL could become the catfish for the EU or the USA to get battery cell manufacturing jumpstarted. And I tend to agree. For those interested in reading the article, you can click here although it may be behind a paywall. TESLA - The Tesla Model Y wrestles the belt away from the Havel H6 as the best-selling (premium) SUV in China for March. Just so we are clear here. The Model Y is beating ICE vehicles from Bimmer/Merc AND EVs to take this crown. It’s no surprise to me that the Model Y was going to be a strong product for Tesla (check the stats – I’ve said this in past newsletters) but to be numero uno is pretty damn impressive. I don’t see that crown being taken from them anytime soon either. Unless there are production issues. Or BerlinGiga is having trouble getting off the ground and Tesla decides to bridge that gap by shipping more MIC Model Y’s over to compensate. THE MOST INTERESTING THINGS THAT HAPPENED THIS WEEK - Is there more to Tesla’s share price than Tesla and Elon’s reality distortion field? Bots are an issue on Twitter and the internet writ large. That said, a small part of Tesla’s outrageous market cap may be attributed to bots amplifying positive messages while trolling negative ones. There’s a professor that’s studying the correlation (if there is in fact any) between Tesla’s soaring valuation (although the market has taken a bit back in the last few months) and what Tesla bots say and do. I am anxious to see what the findings of this report are because most sane, objective Tesla followers know that their market cap is a gift. This also may explain why Elon just acquired >9% of Twitter, perhaps he sees the bots as a huge boost to the company and doesn’t want that upended. IN THE NEWS - These lockdowns will negatively affect China’s booming NEV market & consequently GDP growth. Although pockets of Shanghai have begun to open up, most OEMs there including Tesla, are still not manufacturing any vehicles, and haven’t been for almost two weeks. My original prediction was that production for Tesla wouldn’t resume until after May 1st but that could be earlier now as some areas begin to open up. That doesn’t necessarily mean Tesla is out of the woods though. Even if all of their tier 1 level suppliers are in and around Shanghai and can re-start their manufacturing too, upstream tier 2/3/4 level suppliers that Tesla doesn’t even have visibility of and are outside of the area may ultimately lead to plant shutdowns as well. TRENDING ON SOCIAL MEDIA - Bimmer and Merc raising prices in China. After initially de-contenting their vehicles and pulling features like wireless charging and auto parking assist, BMW has now restored those features but raised prices on a number of their vehicles, albeit not enough to break the bank of any Chinese consumer in the market for one of their ICEs. Both companies seem to be pointing to the chip shortage as the reason for the bumps. BMW & Merc join a number of EV makers in China including Tesla and XPeng that have bumped the pricing of their vehicles recently to compensate for the increased raw materials and supply chain challenges most of them are currently facing. - A huge blind spot in automotive media. I thought to give Newsweek a pass on this article since it was their first try and I could see a scenario where the two people on the alternate covers, Jim Farley from Ford & Euisun Chung, Hyundai Motor Group’s Executive Chair, have really pushed their companies forward and deserved to be recognized. But the fact that Newsweek has not mentioned any person or company from China tells me that they’re not really looking OR they likely don’t have a CLUE about what’s happening on this side of the world. So I just can’t give them that pass because the title of the article and the cover of the magazine say in big font ‘THE WORLD’S GREATEST AUTO DISRUPTORS.’ Where is Tesla? Where is NIO? BYD? Geely? ALL of the CEOs at any of those companies deserve a serious mention but NONE of them get one? William Li has brought back battery swapping, is that NOT worth noting? Li Shufu has revived one foreign brand (Volvo), helped it create another brand (Polestar), and is on his way to reviving a storied British sports car brand with an SUV! C’mon, you guys can do better. This is the EXACT reason why I started this newsletter and the China EVs & More podcast. I guess I have a tremendous amount of work ahead of me still. - Canoo beats out Rivian & Tesla. With Canoo still under SEC investigation, at least they can look forward to eventually supplying NASA with the vehicle that will take the astronauts to the launchpad for upcoming missions. You could almost look at this like Canoo being the pace car for the Indy 500. A great photo op and marketing opportunity but not much else. Oh, and bragging rights over Rivian and Tesla. GET SMARTER - The growing importance of the AI chip. When I was in Silicon Valley, Intel was considered the top dawg in CPUs that ran computers & servers. AMD was a pretty distant 2nd. A funny thing happened while I was there though, companies began to expect their computers to take on more rigorous tasks that pushed the limits of chip speed, size, heat dissipation, and efficiency. Over the last several years, Nvidia quickly seized this opportunity to reconfigure their best-in-class GPUs to be able to do all this new ‘heavy’ lifting. Their ascent coincided with the deluge of demand from everyone from gamers, and bitcoin miners to now autonomous vehicle companies transforming Nvidia into the current, global power player that it is. Intel was caught flat-footed and is now playing catchup, with not only Nvidia but other companies that are leading the way with their ML/AI optimized chips. Intel has recently made some HUGE announcements about investments in Ohio, Germany, Ireland, Spain, and other countries in order to try to catch up with the likes of Nvidia & TSMC. And for those wondering, they did acquire an Israeli startup called Mobileye in 2017 and have developed partnerships with a good number of automotive brands putting their HW/SW in millions of vehicles. Overall, this is good for the chip sector since Intel has the experience to be able to remain a significant player in the space. But Silicon Valley and Zhongguancun is peppered with AI chip companies that want nothing more than to dethrone the incumbents and become this generation’s Intel & Nvidia. - For those that thought building a delivery drone is easy, think again. If the richest man in the world who used to run one of the most valuable companies in the world is having problems developing an acceptable, safe, reliable, and cost-effective prototype delivery drone so much so that they can’t meet their target annual test flight goals, it is a MUCH tougher nut to crack than most people anticipated. Of course, I am referring to Amazon. This article is worth the read for those that are into e-VTOL or any other form of personal transport/delivery via drone. This space is fascinating and I have made a goal of learning more about it. BY THE NUMBERS - 50.49%. That’s the share for CATL in China for March. They gained 2.5% from February. This monster is getting a bit unruly. Competitors need to step up but that’s not currently happening. Can anyone dethrone CATL? Not likely in China unless the Chinese govt sees them as too big to control. This share should scare likely export markets as well. - $40B. That’s how much Honda has just announced it’s going to invest to get 30 EVs on the road by 2030. This includes capital to invest in R&D for solid-state batteries in order to separate itself from its current crowded room of competitors globally. Honda has always been more on the conservative side (see their partnership with GM in the US) so this announcement must mean they see the writing on the wall and that they can no longer delay or believe that there is an alternate future that includes Honda if it doesn’t begin to produce and sell EVs very soon. Welcome to the party! You can try to elbow your way into the room but it’s quite cozy already. —— This weekly newsletter is a collection of articles we feel best reflect the happenings of the week or important trends that have effects on the automotive and mobility sectors here and in the US, we also provide a point of view that we hope educates and sparks debate.

The Sino Auto Insights

 

Sino Auto Insights is a Beijing, China-based market research and advisory firm that specializes in assisting companies analyze, strategize, and develop products and services that will shape the future of mobility and transportation. Members of our team have experience working in Detroit, Silicon Valley as well as here in China across multiple sectors and functions as entrepreneurs as well as working at larger companies like Apple, Google, Amazon, GM and FCA, and many others.

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