SAI Weekly 17 - 25: CATL Doubles Down, BYD Overtakes Tesla in a New Place, YU7 Unveiled
Biggest news this week – the CATL secondary listing on the HKEX.
Will talk more on that below though, both via the video and a bit more in a detailed post.
Next week, I’ll be in the UP to speak at the Mackinac Policy Conference and am really looking forward to it. For those non-Michiganders, UP = Upper Peninsula. Not sure if I’ve ever been to the UP, I have to have, right? Anyway, the title of my panel discussion is: Leading Michigan’s Signature Industry in Complex Times
For those planning to attend - stop me to say Hi. Not sure what to expect, but was told many of the potential 'next’ Governor’s of Michigan all go to this thing so…
Finally, I’d posted these without much fanfare so I thought I’d link them to this week’s newsletter. I did do A LOT of walking at AutoShanghai2025 and created content around some of the more notable brand booths, here is a sample (in double time):
BMW
A-U-D-I
Cadillac
XPeng
NIO
BONUS NIO VIDEO - NIO ET9 SkyRide Dance
FOOD FOR THOUGHT
Highlighting an Op Ed from Kyle Chan who writes some thoughtful pieces on China’s tech, manufacturing and economic sectors. This should scare most Americans into (hopefully) taking China much more seriously on these fronts. As a friend had mentioned, the Op Ed only skims some of the major domestic challenges China has to face, but it’s an Op Ed so it’s meant to be thought provoking. You can read it here.
The other important thing to note, the title is starts with ‘In the Future…’ so there’s a future where the US has much more say, if we can turn around some of our current policies. I’ve talked about this bifurcation in previous newsletters, one where we get the analog toys, the ones that don’t come with infotainment screens, but do come with manual window cranks and plastic front quarter / rear panels that on a good day give us 150 miles of range and / or Tesla’s best - which we know isn’t good enough in China - while the rest of the world gets the newest, shiniest digital toys, at much lower prices.
BIGGEST NEWS THIS WEEK
Officially de-throned in the EU. April 2025: BYD EU BEV registrations - 7,231 (+169% YoY), Tesla EU BEV registrations - 7,165 (-49% YoY)
BYD distancing itself from you know who. It’s ONLY going to get worse for Tesla in China. See Xiaomi post below.
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Not auto related …probably? As an Apple alum who used to see Jony Ive having lunch at Café Macs quite often, I keep track of the leadership team that was at Apple while I was also there. So it’s notable that a 1 year old AI hardware startup called IO that was co-founded by Jony Ive has now been acquired by OpenAI of ChatGPT fame. The pricetag? How about $6.4B!
I’ve ALWAYS been a HUGE Jony Ive fan, how could you not seeing all the great product he and his team designed while at Apple?! I can’t wait to see what he has in store for us on the AI hardware side. Also, does this mean we could be looking at what an Apple Car will look like, but not actually by Apple??
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Hiding behind heritage. This is INFURIARATING. Not sure if it’s because I know SO MANY German execs or if it’s because THEY are seemingly the ONLY ones that bring this heritage thing up. I get it, I am the target market that used to be convinced that heritage matters. History matters. Races that happened 40, 50, 60 years ago matter. It still does for some, at least for those that have followed the brand since they were little kids. The ones that had the posters on the walls (like me) and could pop off the specs of any car they read about just once in R&T, Automobile, Motor Trend and Car & Driver magazines.
But it doesn’t. Not to people who weren’t even born when the brand won it’s races at LeMans or F1 or whatever old skool race that doesn’t matter today. Because it doesn’t sell, not in the largest passenger vehicle market in the world. If it did, Porsche sales wouldn’t have fallen (-2%) in 2022, (-15%) in 2023 and (-28%) in 2024 in China.
I also get that people get defensive. I’ve had more than a few spirited debates over Tsingdao or Yanjing beer, followed by a few single malts with friends while in Beijing about cars, MANY German, but mostly Europeans about high tech companies and about why doing software & UX design WELL was really hard. I was told several times directly and indirectly, ‘How hard can software be?’ followed by ‘Can these companies mass produce vehicles?’ I took it personally because it implied that they didn’t respect how hard working in Silicon Valley was - how hard I worked! It’s one of the reasons I am typing this today. I had to communicate what I saw as this naivete among the ‘auto’ guys with, well just about everything.
I also talked about how quality didn’t matter to some consumers and pointed to Tesla as a prime example. Ignored. Those same people now acknowledge that they underestimated the difficulty, the ingenuity and the ability of tech companies and the Chinese WRT to all of it. Right before they point back to how important heritage is.
These people remind me of who Bruce Springsteen was referring to in his ‘Glory Days’ song. I wonder if they’ve heard of the Janet Jackson song ‘What Have You Done For Me Lately?’
With all that said, brand will be much more important moving forward for China EV Inc, both domestically and as they make their way to international markets. But the reasons are different.
Domestically, we’ve reached the point in the show where within weeks of a new feature being ‘pushed out’ (that’s a tech term BTW) by an EV player, usually more than one competitor has announced the same feature or at least something pretty similar. If the HW is the same - Snapdragon up front Nvidia out back - and the software + OS isn’t much of a differentiator, how else do you stand out in the market?
By truly understanding your target market and using that knowledge to position your brand to bring those consumers into the fold. NIO is great at engagement, what they aren’t great at is sales or at least converting that engagement into sales. No one said this would be easy.
As for the international markets, domestically they can be positioned a certain way, but they don’t have first mover in many other markets where VW, Chevy, Fiat, Citrëon, Renault and others have all been in the market for 60-70 years or more. They also don’t have that trust yet from consumers in those markets.
And not everyone can be BYD, so what do you do? You build up awareness, credibility and then finally trust in your brand. How long will that take and how much will it cost? That depends on your local partners and how good your product is.
For the premium segments, China EV Inc are going to be in for a much bigger fight in the EU markets where ABB dominate. But they’ve been able to redefine what premium is in China where it doesn’t start with price and a decked out interior, can they do the same in the 2nd and 3rd largest passenger vehicle markets in the world? It’ll take time, but I wouldn’t be surprised if China EV Inc puts out of business a few of those ‘heritage’ brands in the next 10 years.
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The CATL story, told again – for the newbies. Congrats to Breana Noble, a journalist at the Detroit News who attended a session a had with Joe White (to test out our new content platform, stay tuned for more deets on that shortly) when I’d mentioned how CATL really got its start and the American that helped CATL become the juggernaut they currently are. See the post below.
During my discussion with Joe, I’d mentioned Bob Galyen, the former CATL CTO who brought LFP to the Chinese company and the rest they say, is history. Bob now chairs the Battery Show Conference, and I’d spoken with him a bit a few times while I attended and as a panelist. I always thought this story needed to be told, luckily Breana followed up quickly asking for more details about who Bob is.
Now, I also need to give Steve Levine some credit here as he also has told this story before, but Breana, who coincidentally wrote this story the week prior to CATL’s secondary listing, has written a great piece that includes details on how the battery technology was nurtured, the main players involved and in summary how LFP came to be the dominant battery chemistry for electric vehicles. I also happen to be quoted in this article so give it a read. Will we repeat ourselves with technology we’re currently nurturing at the American universities or take a pass on seeing the tech through? That would be to our detriment. See CATL.
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CATL trying to change the narrative. Robin Zeng said that CATL is a zero carbon technology company rather than a battery company in interviews following CATL’s secondary listing on the HKEX earlier this week. CATL was able to raise $4.3B to help fund a $7.3B cell factory in Hungary. But it sounds like CATL wants to go after higher margin business and will need to move upstream in order to do that, hence the re-invention by Robin Zeng.
This likely means they will use batteries as the backbone for any grid management systems, or full service products that would help them create business opportunities outside of the automotive / EV space, mitigating risk and perhaps lowering the temperature on the political side as well. I’ve said this before, but it’s worth noting for the new readers. CATL is the BIG DOG when it comes to automotive grade battery cells, of which is specializes in the LFP chemistry who they supply to virtually all legacy OEMs as well as most major Chinese EV players as well.
The bottom line is that they have no peer with their closest rival being BYD who controls ~17% share to CATL’s 38%. As the appetite for clean energy vehicles grows further in Europe, we could see CATL grow along with it since I see CATL currently having no peer, but EVERYBODY wants to move upstream whether you’re Foxconn, Magna Steyr or Apple. CATL in the energy space is just best well-positioned to actually get it done.
Here’s my take on CATL’s listing as told to CNBC’s Squawk Box Europe a couple days ago:
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Waymo vs. Tesla. Saw this great piece where Waymo Co-CEO Takedra Mawakana explaining the difference between the Waymo philosophy vs. Tesla’s. This battle is only starting to heat up and should begin to simmer if Elon ever decides to get some of Tesla’s own robotaxis on the road. I guess we continue to wait until it eventually happens.
BY THE NUMBERS
-38%. That’s the depreciation rate of the Cybertruck after a little over a year and between 10 & 20K miles on the odometer. That’s better than most other vehicles, but a still eyewateringly high rate for a vehicle that at that time costs >$100K. This is Tesla’s valuation as well, how external parties may value the vehicle, we’ll find out soon enough.
UNVEILED
Finally, Xiaomi took the cover off the YU7. This was supposed to happen at AutoShanghai2025, but just prior there was a tragic accident that involved a Xiaomi SU7 in which three women in the vehicle died. Xiaomi has been concerns about the SU7 while managing the social media fallout since.
Why this EV is notable? It’s aimed directly at the Model Y Juniper. The other brand that should be pretty freakin’ scared? Porsche. Xiaomi is positioning it as a ‘luxury performance SUV.’ That sounds familiar.
Before the tragedy, this was going to be the story of the show. It’ll still likely sell well, something that should be very concerning for Tesla, but it’ll be more complicated now with the more conservative approach they’ll need to take to market it’s intelligent driving capabilities and the actual car itself.
Pro tip: Squint (or not) and it looks a bit like a Ferrari Purosangue. I like it! And I’d definitely take this down if starting MSRP is <$45K, which is expected.
CHINA EVs & MORE
Episode #209 - Xiaomi’s first crisis, Don’t Sleep on China AV Inc, Updated XPeng P7 revealed
No live episode this week, but we’ll be back next Friday. Otherwise, find the recorded episode as an audio podcast or as video on the China EVs & More YouTube channel.
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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