I promise I am going to take the training wheels off this Substack as I learn how to better navigate and optimize for interaction. I’d also like to engage you more so for the few who’ve posted comments, I will respond shortly. Please keep them coming as well!
Busy next couple months for me as I’ll be in CA in two weeks for two meetings and a special visit (or two). This short week really threw me off, just starting to get caught up.
I then head off to London on June 16th to be a part of the Move London Conference that’s scheduled for June 19-20th. For those planning to attend, please do reach out. I am pretty excited to be moderating two panel discussions. Here is one of them.
Sino Auto Insights may host a happy hour the week of June 16th as well since I will be meeting up with my good friend, who happens to be co-founder of Beijing brewery 京A so stay tuned for those deets.
We may also be part of an event in London the week of June 23rd as well and details of that event will follow shortly if we can hammer out those details.
Anyone that’s in Silicon Valley or London while I am around, please reach out. My schedule in the Bay is going to be pretty tight and I’ll mostly be in South Bay for a few days, but there could be a chance I am out for a pint, I am a fan of Stein’s so you may see me there one of those evenings.
The biggest news that came out yesterday was BYD’s next gen hybrid technology that’s going to be in the next gen Seal and Qin sedans. Let me be clear with something I think folks in the west are a bit confused with. It’s mistaken to think that Toyota is the clearcut leader in hybrid technology.
You can be forgiven since the Prius has been a part of western consciousness since 2000. But BYD has been dialing in their DM-I or (dual mode) hybrid tech for a very long time, so much so that 1 of every 2 hybrids sold in China is a BYD. So to put it plainly – BYD is the global leader in hybrid technology. This next gen version points to that. TLDR: The key to this next gen powertrain is that it ekes out even more efficiency, from 3.8L of petrol / 100km down to 2.9L / 100km.
Will it get 1.3K miles of range, it remains to be seen, but if it gets anywhere close we are talking game changing. And I’ve said this before, no purity tests here for me, BEV, PHEV, EREV All = WINNING.
On the other end of the spectrum is Toyota who this week unveiled new, small displacement engines that can use biofuels to power them. They are still ICE vehicles but are much more efficient and don’t need petrol to run. Toyota is effectively conceding the EV space for now to China EV Inc and believe that their smaller, higher efficiency engines + their lineup of hybrids can hold their own.
These newly developed engines also point to the opportunity Toyota and others including BYD, Stellantis and GM see with the Brazilian market which in 2023 was the 6th largest passenger vehicle market in the world behind 1. China, 2. USA 3. Japan 4. India 5. Germany
To put things into context, investments into Brazil announced the last few years by:
GM - $1.4B
Stellantis - $6B
BYD - $1.06B
Toyota - $2.2B
Volkswagen - $3.2B
Great Wall Motors - $1.8B
These are JUST the OEMs. There will also be smaller, but still important investments into Brazil by the suppliers too. Looks like Brazil will become a battleground. One where prices will need to be low and clean energy, not likely electric so much, but ethanol will lead the way. Oh, and something that may only interest me – Fiat is the #1 automotive brand in Brazil.
It should also be noted that Mexico was the 12th largest passenger vehicle market in the world in 2023 but had a growth rate of 25%. Look for not just Chinese companies to make bigger noises in the Latin / South American markets. For legacy auto, they need to try to make up for the volume they’ve been losing in the China market the last few years.
Latin + South America = $130B market opportunity, one that’s so far welcoming investment from all comers.
Today, I was also a guest on Autoline After Hours hosted by John McElroy to talk about US competitiveness and some of my thoughts on what needs to be done to get more competitive. John throws an interesting question at me; one I think most of his other guests would’ve completely avoided but one that I answered honestly (and willingly). Want to know what he asked? You’ll have to click this link to find out.
China EVs & More
So many of you may or may not know I co-host a weekly podcast called China EVs & More. We just celebrated our 3rd anniversary so congratulations to us! What some of you may NOT know is that we host a livestream on the platform formerly known as Twitter and at the end, we take questions from the folks, normally between 20-30 people that are listening in the room.
It’s a pretty global audience and we decided that the best time to do it would be 9am ET. This is the best time we could do to try to accommodate Asia, Europe and the United States. We will be having our live show tomorrow at 9am ET as a matter of fact. For those that are interested in listening in tomorrow, you do need an X account to enter our room. If you don’t have any questions, you can just wait till the recording gets posted to our podcast.
Either way, I invite you to have a listen and send over any feedback you have about the show in general or the particular episode.
We also launched our YouTube channel where we’ll begin to also post video content. You can find our YouTube Channel on: https://www.youtube.com/channel/UCnQkkMqjpoFs0yHmqmKitNQ
The first video we posted is of Lei and I chatting while making our way down to Shenzhen in an XPeng G9 using mostly X-NGP, XPeng’s intelligent driving system.
Get Low(er)
There have been a few announcements recently by legacy auto about products that hit well below the current average sales price of ~$48K in the US for a passenger vehicle in 2023.
· The Chevy Equinox EV priced at <$44K before credits. It’s gotten really good reviews too, so this vehicle could give GM the affordable ‘hit’ it needs to jumpstart its EV transition in ways the Hummer and Escalade can’t. Getting everyday consumers into clean energy vehicles.
· A $25K Jeep was promised by Carlos Tavares, alas it won’t arrive until 2027.
· Renault announces it’ll develop a EU market, $21K Twingo in China. No word on when it’ll be launched yet but if it’s after 2027, it’ll likely be DOA in markets not named France.
In Other News
· Elon agrees with Ola, Carlos, Oliver and other automotive CEOs that he doesn’t want tariffs slapped on Chinese EV imports. It’s a bit rich for him to say this as he is looking for the Chinese govt to finalize approval of Tesla FSD for the China market. But Elon is Elon so…
· California (CA) leads the US in EV adoption and it’s making their roads worse. California currently uses revenues from taxes it charges for gasoline to help maintain its roads and highways, but as more EVs and PHEVs hit the ‘roads,’ it takes from their old revenue stream.
In order to make up that delta, CA is looking to charge folks for miles driven and it’s going to run a pilot later this year. I think we should come up with a formula where they can combine weight of the vehicle along with mileage so that the folks with the largest vehicles have to pay the most to use them.
· Prediction: NIO’s battery swapping is going to be a Harvard business case. First, it needs to be highlighted in the Harvard Business Review, oh yeah it just was.
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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 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.
I will be at MOVE in London, and would love to catch up with you there. -JJ.
In your Autoline conversation, you made a really interesting point about Ji Yue and other Chinese EV makers flipping the US legacy 20% software vs 80% automotive engineer ratio.
Does the Chinese EV maker 80% of SWEs include hardware/embedded systems engineers? I would think these would also be extremely important in integrating all aspects of the NEV stack - BMS, inverters, motors, 12/48/400/800v architectures, chips for driving/autonomy/infotainment, etc.