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The Detroit Auto show, Gotion in MI, XPeng's newest EV & special features - SAI Newsletter 35



 

Where to begin? This newsletter will largely be about last week when Lei came into town and we attended many of the Detroit auto show events together.

First, it was great meeting Lei finally! I believe there’s a lot of mutual respect between the two of us and we’ve worked hard putting together what I think is a high quality, unique product that is now starting to be recognized globally.

We started out his trip by me being late to pick him up at DTW. I am not a big excuse guy BUT this one time, I’ll blame it on my lack of experience using an Android phone. Yes, my US phone is using Google Fi since when I signed up for it, I was traveling back and forth from and to China quite often (about once/quarter). And since I was stuck in China, I effectively haven’t used this phone in more than two years and the primary ecosystem my digital world plays in is Apple.

Let’s just say I may have fatfingered one of the settings on Google Maps (GM) which led me to taking non-highway streets to the airport. I initially just thought that GM was helping me avoid construction but 3/4s of the way into the trip I checked the settings and sure enough it was wrong. I was a few minutes late but like on the pod, Lei was as even keeled as could be.

Over the weekend we went to the Lions game, his first ever NFL game BTW. It was a brutal loss to the Eagles but a fun time was had by all. It was after Sunday it started getting really fun thoough.

On Monday, we had our happy hour and made quite a few new friends and notably John McElroy decided to stop by so had a ton of fun talking with John about what was happening in the US and the rest of the world. Dude knows his stuff!

On Tuesday we headed over to the Battery Show, a conference ALL ABOUT batteries. That coincided with a HUGE announcement from Our Next Energy (ONE) introducing their anode free battery cell which has an energy density of 1,007Wh/liter.

This is a dual chemistry battery with one side used for daily driving and the other for longer distances. Gemini reduces graphite and nickel by 75% and doesn’t use cobalt at all. The Gemini does use a lot of manganese so he’s effectively trying to eliminate the raw materials that aren’t readily available in the US and if he can get to production in the next year or so, it'll be a popular battery for sure. But more on ONE later in the letter.

We headed to Detroit that afternoon to take a tour of the Book Depository & Michigan Central Station which are going through major renovations and will be the centerpieces for the revitalization of the Corktown area of Detroit. This was definitely one of the highlights of the week and I applaud Ford’s ambition, effort and committed capital that will bring this building back to its former glory.

Ford’s partner Newlab will be managing the Book Depository which will become an innovation lab/incubator and workspace for mobility startups. Alisyn Malek has been charged with managing that space, you may remember her as one of the founders of May Mobility. A big thank you to Connie, Mara, Roshni and Alisyn for taking time out to show us around – Much appreciated!

Lei and I then jumped into the car and drove around the city – we drove through Highland Park around the original factory that built the Ford Model T. I don't think it's abandoned but since we couldn't tell, you get the idea.

Next we headed to Detroit-Hamtramck aka D-Ham where Cadillacs used to be built but is now Factory Zero (as in zero emissions) where the Hummer and other GM EVs will be manufactured.

Wednesday started Media days for the Detroit Auto show and two notable things happened that day. We arrived early and coincidentally bumped into Linda Zhang, Chief Engineer of the Ford F150 Lightning and a huge inspiration to both Lei and I. Linda is also an immigrant from Asia so her story resonates deeply with both of us.

After attending the Jeep press conference, we wandered around a bit but were booted out around 10:30am because President Biden decided to visit the show and make that HUGE announcement about $900M flowing into 34 states and Puerto Rico to build out a national charging network.

Biden has an ambitious goal of 500K chargers blanketing 53K miles of roads across the US and since this is an election year, he made sure to make a stop into a battleground state to tout one of his wins.

After we were let back in Wednesday afternoon, who would show up but none other than Chinese Ambassador to the US Qin Gang. He spent a good half hour checking out the Lincoln L100 & Star concept cars and speaking with Ford Executives Joy Falotico & Hau Thai Tang.

On Wednesday night we attended the Ford Mustang 'Stampede' where Ford unveiled the 7th generation Ford Mustang, the last with an ICE. The stampede of dozens (perhaps hundreds?) of Mustangs began their journey in Tacoma, Washington. Those that made it to the end were parked one after the other in front of Hart Plaza in a glorious display of horsepower! Mustangs from ALL eras were represented and for us car guys, it was quite a sight!

We began Thursday by recording our latest MAX episode, this one with the Founder CEO of Cepton Jun Pei. His company got a HUGE design win and will be supplying its LiDAR to GM to be used as part of the HW stack powering Ultra Cruise GM’s L2 ADAS system.

Thursday night we attended the Plug and Play pitch competition and listened to 13 mobility related startups with varying degrees of funding get 3 mins each (a soft 3 mins too) to pitch their ideas to a panel of judges. All in all a great event, one we’ll need plenty more of if we’re to play any significant role in molding what the future of transportation looks like.

On Friday, first thing in the AM we met up with the man himself, Mujeeb Ijaz founder and CEO of ONE. We piggybacked off of Steve Levine, friend of China EVs & More and journo/author of 'The Electric' newsletter. Mujeeb was a great host, gifting us a book on the history of electric vehicles that they published themselves.

We also got a sneek peak into their product planning and a deep explanation of their technology, company philosophy and how they plan to support their products through manufacturing and commercial wins.

We headed back to Detroit this time to take a tour of TechTown Detroit, a nonprofit entrepreneurship hub that provides education, programs, support and resources for metro-Detroit entrepreneurs. It’s housed in an old GM design building in mid-town Detroit – and it’s claim to fame is being the location where the original Corvette was designed!

This is ALSO where Lei and I recorded last week’s China EVs & More so watch out for that episode which should drop this weekend. Thanks for Marlo, Danielle and Cristen for your hospitality!

We finished off the week getting all dressed up to attend the charity preview. Overall, it was an amazing time and a time where I met a number of people that I’d spoken with countless times on the phone or via Zoom but had not met yet.

If I am being completely honest and transparent though, I am not sure how many more years are left for the North American International Auto Show, the official name of the Detroit Auto show. I went again this week on Tuesday and yes it was a weekday but the foot traffic and the buzz just wasn’t there.

If I recall correctly, the show is much smaller than when I went as a kid when BMW, Merc, Porsche and many others had humungous booths and numerous product launches. The only real product launch was from Ford for its 7th gen Mustang and you could argue that the new version is more evolution than revolution.

If it wasn’t for Biden and Ambassador Qin attending, I am not sure how much press the show would’ve received outside of Michigan. NADA, the North American Dealers Association needs to try a new formula. It’s just going to be really difficult to compete when most OEMs nowadays would rather not share the stage with anyone else and are highly capable of putting on their own events, which they do regularly a là Apple & Tesla.

I've messily thrown together the below collage that gives you some of the highlights of the busy but very fulfilling week. Now lets move onto the news, some of which is really BIG.



 


We also want to let everyone know that China EVs & More is co-lab’ing with Move America to become media partners for their event in Austin, TX that’s scheduled for Sep 27-28th. I will be moderating a panel at the conference so anyone who’s interested in attending, hit me up – I have some discount codes to share. For those curious about the event, it's going to be MEGA so check it out here. China EVs & More is scheduled this week for Thursday, 09.22 – 9pm EST, Friday, 09.23 – 9am China local time so meet us in our Twitter Spaces room then to get a download on all that’s happening in the space. Those that aren’t able to join us live, the China 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 - With intense competition at home, China EV Inc sees huge opportunities abroad. I was interviewed for this article in Asia Financial which captured my thoughts on Chinese EV companies entering the European markets. Due to the uncertainty of the US Inflation Reduction Act (IRA), Europe is even more likely to be a focus region for ambitious Chinese EV companies that will look for growth via export there. As evidenced by other another post in this week’s newsletter, it’s not just the EV OEMs but we’re seeing more and more Chinese battery cell manufacturers look to stretch their reach into the European and US markets (eventually). Currently, Europe is priority #1 while the US is a fairly distant priority #2. TESLA - The MIC MY holds its value the best among Chinese EVs. This isn’t hype – for a buyer this makes for a prudent purchase. More prudent than a NIO, XPeng and even Porsche. After 1 year, Tesla buyers can expect to hold onto ~89% of what they paid for the Model Y. What was a bit surprising and funny was that 3rd place went to the Wuling Hongguang Mini EV which holds onto 88% of its value after the 1st year! BIG NEWS OF THE WEEK - Gotion going big in Big Rapids? Not sure whether the Detroit News actually has a scoop, whether this was leaked as part of a trial balloon by Gotion or if they are negotiating in the media but they’ve not confirmed or denied this reporting. Battery factories are expensive and the number attached to this rumor is $3.6B. That’ll create a lot of jobs in Big Rapids so US China tension be damned, there will still be plenty of US states that welcome that type of financial commitment. There are folks speculating about who could be the US partner since GM, Ford have already made huge commitments to their S. Korean battery cell partners in KY & TN but I think lost in all of this is that we’d heard about CATL’s pending announcement about a factory somewhere in North America and BYD’s big potential moves into the region but the point here is that China EV & Battery Inc are coming. Full stop. No more ifs, just whos, whens and wheres. China AV Inc is already here and they’ve been here since Day 1. And as long as the Chinese can help fulfill battery cell demand at a reasonable price, there will be demand for their product. The US OEMs are stuck between a rock and a hard place – one that the US govt purposely put them in. Can they get themselves out? We will find out in the coming years. IN THE NEWS - CATL going for the triple in Europe – Maybe. CATL is still aggressively making moves, even if not yet in the US. Their 2nd European factory is set begin rolling out battery cells later this year (if they can secure enough electricity) so we are likely to see CATL factories in all three major EV regions within the next 5 years. This should also put a tremendous downward pricing pressure on the S. Korean and Japanese battery manufacturers since CATLs factories AREN”T small and they'll have alot of capacity to sell. How will the Inflation Reduction Act (IRA) change the calculus & strategy of these battery companies, specifically the ones from China, we aren’t sure yet but as stated in the post above we should focus more on when they’re coming then if they are. - The US govt looking to put another Chinese chipmaker on the ‘blacklist.’ This one is called Yangtze Memory Technologies Company (YMTC) for providing NAND memory chips to Huawei. NAND memory chips use US technology which means that YMTC is barred from shipping any of them to Huawei. If YMTC is found to be violating US export controls, it could spell big trouble for the memory maker and further complicate US China relations. TRENDING ON SOCIAL MEDIA - Cruise chief says humans will be around to help autonomous cars for a long time. In a ‘saying the quiet part out loud’ moment, Kyle Vogt, the CEO of Cruise Automation GM’s robotaxi division said that having humans help with the edge cases that often stump AVs helps give its passengers peace of mind and that humans would likely be part of the AV experience for the foreseeable future. It’s actually quite refreshing for this level of honesty, especially since others in the sector talk about point-to-point L4/5 autonomous being right around the corner. We now know this for sure - Getting to L4/5 autonomous will take years AND it’ll be VERY expensive. That just means we’ll see more tech/OEM partnerships in the future as the tech companies begin to run out of money and/or the OEMs get desperate about keeping up with the Joneses (other OEMs). INTRODUCING - The XPeng G9. So I am going to just call XPeng, NIO and Li Auto the Chinese triplets since they always seem to be compared to one another even though their products service somewhat different markets. It doesn’t help that they all decided to launch premium SUVs within months of each other. The last of the three is the XPeng G9. We’ve talked about the G9 here a bit already so I won’t get into the vehicle too much. It’s pricing starts at an astonishingly competitive $45K which undercuts both the L9 and ES7 by quite huge sums. It’s also the sportiest of the bunch and isn’t positioned to be as ‘family’ friendly with only 5 seats vs. 6 & 7 for the NIO and Li Auto products. For those wanting to have an initial look, I’ll link you to my friend from Fully Charged – Elliot Richards initial take on the G9 here. What is a difference maker is the new 480KW fast chargers that can add 200km of range in just 5 minutes of charging. That’s currently best-in-class and the type of progress we need to see for even wider EV adoption, whether in China or the ROW. The other notable feature is the City NGP that provides L2 ADAS in the city. This feature was delayed for quite some time so I asked Chairman Brian Gu on a call yesterday why that was. He’d mentioned that HD maps needed to be updated for the City NGP to work and it took a while for the city of Guangzhou to approve it. How well does it work? It’ll likely work much better when XPeng switches from Nvidia’s Xavier chip to their Orin chip upp’ing the TOPs to 500 which Brian said should arrive next year in the G9s. WIth that said, I can't wait to try it out so XPeng I will let you know when I am back in-country! ---------- 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 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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