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SAI Weekly 02 - 24: BYD has a boat, CES Roundup, GM & VW Down in the Middle Kingdom



 

I’ve been tracking some of the announcements out of CES and a few of them seem pretty interesting but most of them, specifically from legacy OEMs seem a bit like déjà vu because I swear we’ve seen that movie before waaay back in 2020 & 2021.

 

Unfortunately, I wasn’t able to make it to this year’s event but a few of the products and announcements I likely would’ve attended.


  • Seeing the Zeekr 007 in-person (which I’ll see anyway later this year).

  • The Kia platform extensions that include commercial EVs.

  • The ridiculousness of Merc and it’s G-Wagon tank turning spectacle. Remember that the Yangwang U8 SUV (BYD’s luxury brand) can do that AND float on water.

  • Honda’s two EV concepts that point to its clean energy future – they look totally like concepts and likely don’t point to, at least in the saloon’s case, what the production version will emerge as by 2026.

  • Merc and VW incorporating Chat GPT into their infotainment stacks.

  • Amazon and BMW partner on AI to replace the owners manual.


-   The Rabbit AI companion. I added ‘companion’ since I don’t know what to call it yet. No one really does, but this promises to help you complete tasks, not manage but complete them. Mundane, administrative tasks that unfortunately suck up a lot of your time taking you away from doing actually productive tasks.

 

I am a fan and I’ll probably get one. This is going to be a HUGE market – the VCs will make it so meaning they’ll forcefeed us every version of this Rabbit possible until we relent. Believe me here.

 

There are other announcements but rather than turning this into a CES review newsletter, I'll push on. 

 

More sales numbers are starting to trickle out for the legacy automakers so I am going to pull up one of the sections in order to highlight them.

 

 

BY THE NUMBERS

-   What can I say here. GM sold 2.1M vehicles in China in 2023. A YoY decline of 9%, but this isn’t the alarming number. GM has lost 48% of its sales from a high of over 4M in 2017 to the number they just reported this week. They now sell more cars in the US than they do China. That hadn't happened since 2009. 

 

This has been a slow moving train wreck that I watched happening while I lived there that I couldn’t take my eyes off of. First, because I am a GM alum and I have a few family members that have retired from the General so I want to see them do well.

 

Next, because the fact that GM had strong sales in the US (2.59M in 2023) gives the GM rank and file here a false sense of security.

 

Think about that. It lost 2M units of sales in 5 years! That is similar to effectively closing 7 factories (with annual capacities of 300K). And it doesn’t get easier. GM is now caught in no man’s land.


Graph from Bloomberg


They say that they have a robust portfolio of new products, mostly EVs that could do well in the US. But the Lyriq has been a flop in China and I’d argue the US as well. I LIVE in metro Detroit and I see more Rivians than I do Lyriqs.

 

Mary said they'll launch 10 EVs off the Ultium platform in China before 2025. Will that be enough or will it be too little too late?


-   3.83M. That’s how many passenger vehicles were exported from China in 2023, +62% YoY. Of those, about 30% were New Energy Vehicles or NEVs, the collective term the CPCA uses for clean energy vehicles (BEVs + PHEVs + FCEVs).

 

Domestically, Volkswagen Group reported a 23% rise in EV sales in China, unfortunately the NEV sector grew at 36% which means they are actually falling behind China EV Inc, Tesla & BYD by a lot. It’s why they invested $700M in XPeng, they are hoping to stop the bleeding by frankenstein'ing some of XPeng’s tech into their vehicles STAT!

 

The real challenge here is culture and control. Will their culture allow outsiders to be the experts? And one thing that will also take many meetings, I’d argue likely too many, is whether they can give up control – control of engineering, design, manufacturing, sales & marketing, supply chain - fill in the rest of the blanks here.

 

If they continue to control the ‘steering wheel’ and not let XPeng drive, they’ll never be able to catch up, they are just too slow in doing, well just about everything. These challenges aren’t limited to VW either, see the GM post above.

 

-   20.41M. That’s how many NEVs are on Chinese roads. Compare that with 2.4M in the US as of November 2023. This means we aren’t even in the same country let alone state. To add insult to injury (specifically to Legacy Auto) for the US, at least 1.7M of them have that T badge on them.

 

-   40%. Well, 39.5% to be exact. That was the O-fficial take rate for NEVs in China in Q4’23.  See what perseverance, a stack of cash and bunch of brands creating the fiercest competition on the planet can do?

For those that still aren’t piecing it together - DEMAND. The top brands for Q4 are as follows:


Graph from CarNewsChina


Highlighting positions 2-4 occupied by VW, Toyota and Honda. THIS is why they aren’t giving up on the China market, there is no other market on the planet that gives this much bang for the € or ¥.


TESLA

-   When is a recall NOT a recall? Tesla will be ‘recalling’ 1.6M of its vehicles in China to ‘fix’ what they will tell you is not a software issue. The recall will effectively install more robust checks on its L2+ ADAS system. The Chinese govt, like the US govt recently think it can be gamed too easily.

 

There’s debate about whether or not this should be categorized as a recall since the system was originally designed this way and that it’s working the way it’s intended. THIS I agree with.

 

On the other hand, we know it’s abused since videos are posted on social daily, at least in the US, which means that Tesla drivers are making their passengers and the other drivers on the road beta testers for Tesla’s software.

 

By purchasing the vehicle and clicking through all those initial disclaimers, Tesla has an almost bulletproof way of pointing the finger at the user, since categorizing the system as L2 pushes responsibilities to the driver regardless of what Elon says.

 

 

BYD

-   We have our own boat! The BYD ship that will transport 7K BYD vehicles / journey is embarking on its maiden voyage as of January 11th. Currently, Chinese carmakers use trains and ships similar to the photo below to ship vehicles to its export markets. BYD is NOT f’n around, so now what Legacy Auto?


-   Speaking of boats and exports. BYD exported 242,759 vehicles in 2023, up from 55,656 or YoY +336%! BYD’s BEVs dominate the vehicles being exported 211,063 (87%), but with the popularity of PHEVs gaining in and outside of China, look for that (%) to be smaller by the end of 2024.

 

It also means that 8 of every 100 vehicles it sold is being driven outside of China. Since forecasts point to NEV sales in China will continue to slow in 2024, that means that the 8 of 100 should also get larger. Some of that will be determined by the foreign govts concerned about being flooded with BYDs, but that’s incumbent on Legacy Auto putting some competitive product on the road. And that’s not likely to happen for another couple years, at the earliest.

 

 

BIGGEST NEWS OF THE WEEK GET SMARTER

-   XPeng’s flying car is coming closer to reality. According to XPeng at CES, they will begin delivery of their modular flying car by Q4’25. XPeng Aeroht, its flying car division have confirmed that there will be two products but hasn’t made any announcements on that one yet.

 

-   NIO adding to its swapping partner list. The list is getting longer as Geely and Changan welcome Chery and JAC to the fold. Man, behind the scenes I could see this getting really messy. And this by no means points to the economics of swapping working outside of China, as the only way NIO has any hope of making it work abroad – convincing one of the larger Legacy automakers.

 

-   As we talk about autonomous vehicles, others are out there getting it done. WeRide unveiled its L4 robobus at CES, providing demo rides to conference attendees. This is a smart move since we know they are trying to attract western capital for its IPO that should happen later this year.

 

 

CHINA EVs & MORE (CEM)

9am ET on Friday, tomorrow. Join us. We’ll talk about more sales numbers since foreign OEMs started posting their China / global sales numbers. They aren’t looking great either.

 

To join the live show, follow me on X: @sinoautoinsight and at 9am at the top where the Spaces rooms show up, you should see our show. You can any questions you have.

 

If you can can’t join the live show, I invite you to listen to our recorded China EVs & More episodes at this site. And as always, we appreciate any feedback that will make the show better.

 

 

INTRODUCING 

-   The Yangwang U7. BYD’s luxury brand is leaving no stone unturned unveiling their flagship sedan that promises to push the segment forward. Starting at ¥1M ($140K), it will compete directly with ABB’s flagships. I like it, although the read end is a bit ‘Lincoln-ish.’

 

Picture from CNEVPost


-   (Geely) Galaxy E8. Another flagship sedan, but at the other end of the price spectrum with a starting price of ¥175K, the amount of pressure for Xiaomi’s debut SU7 pricing to come in super low is getting immense. It boasts a ‘coast to coast’ front console that is made up entirely of one screen.

 

Picture from Gasgoo   


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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 global automotive and mobility sectors. We also provide a point of view that we hope educates and sparks debate.

 

 

The Sino Auto Insights team



 

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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