SAI Weekly 18 - 25: Mackinac Policy Conference, BYD Applies Pressure But Feels It Too, Xiaomi Explained
Travel and conferences are ripping up my schedule. Bear with me the next few weeks since there is a gauntlet of events I am either attending or speaking at in the next few weeks. That included this week where I just got back from the Mackinac Policy Conference. It’s THE conference to be at if you’re a politico, aspiring Mayor of Detroit or Governor of Michigan and it’s the most target rich environment if you’re a business leader and want to meet other leaders and people and companies in your orbit.
I happened to kick off the programming with a panel discussion titled: Leading Michigan’s Signature Industry in Complex Times
Moderator: Guy Gordon, former local TV news anchor & radio host
Other panelists: John McElroy, Robert Lee (President & Chief Strategy Officer – LG ES), Pat D’Eramo (President of Martinrea International)
Lots of great points were made, and I especially enjoyed the fact that Robert was able to join since he represents the present and future of clean energy transportation. One thing I know about Robert after having spoken with him at length the last couple days and on the panel is that he’s a BIG advocate for one of the D3 to get back to building a mass market vehicle that would be attractive to most, something they all seem to have conceded to the Japanese and Koreans quite some time ago.
I was approached after the session by audience members who communicated their support for our discussion and some of the thought provoking points made. One person in particular said his takeaways were we’re ‘really behind’ and we need to ‘speed up.’ Perfect takeaways.
I also got to sit in on a fireside chat between Mike Tirico and Jared Goff. Partisan crowd that cheered almost every time he said anything remotely positive about Detroit and Michigan – he knew how to work this crowd!
Jared watching a Jared video
Lastly, I got to hear from Mayor Mike Duggan, who is running for Governor of Michigan. I bring this up because it seemed like he sucked all the air out of the room for the other hopefuls. Where he zigs and everyone else is zagging – he’s running as an independent. He said he wanted to try to help people meet in the middle.
Let’s just say there was a TON of interest in hearing him speak. And I got to listen twice. I even asked him a question about attracting global companies to invest in MI. Why he’s so special and unique? He was the first white mayor of Detroit when he was elected in 2013 since the early 70s – when Detroit was still majority white. Dude is impressive.
For the US politicos that read this newsletter, if you’ve not heard Duggan talk, look up some of his interviews.
Thanks for Glenn, Drew, Paul, Sandy and the entire MichAuto and Detroit Regional Chamber team for inviting me up to speak – learned a lot, met a lot of great people and talked with them all about the challenges, but more importantly, the opportunities I see for Michigan in the future. Great event!
BIGGEST NEWS THIS WEEK
Stellantis has chosen it’s next CEO - and he’s a local, kinda. Italian born Antonio Filosa, who is currently CEO of North America for Stellantis has peculiarly spent the bulk of his 25 year career with Stellantis in …Brazil and Latin America. He’s never led any teams in Europe. This has to point to how important Latin / North America is for Stellantis in the future, right? Me wonders how much he knows about the China market and / or if he’s as on board as Tavares was about the Stellantis investment in LeapMotor.
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A brand new, used car – Good for you, not so much for the govt. It seems that BYD is being questioned about cooking their books a bit. In the US, when a car rolls out of the factory, it’s considered sold. Seems very similar to how revenue is recognized in China as well. Here’s the rub when it comes to EVs – the Chinese govt subsidizes those sales so EV companies could be playing a shell game to get those checks from the Chinese govt.
Don’t know how far, wide or deep this goes just yet, but I have started to ask around and the only thing I can tell you is that it IS happening. And it’s worrisome enough that the Chinese govt has called in BYD, Dongfeng and the China Car Dealers Association in to have a chat.
If BYD has been found to have moved a material number of their vehicles this way, there is going to be some tarnish on this brand that I’ve been saying has been a juggernaut in the sector and was well on its way to becoming the #1 brand in the world in short order. I may be changing my opinion on that – stay tuned.
Speaking more broadly about this, this is how cut throat the EV space has gotten in China. The pressure to sell at any cost has started to really stress the system in an enormous way. That tells me that in the next 12-18 months there will likely be at least a few attempts at not only consolidation, but a few brands declaring no mas. Speaking of which…
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Chevy taps out of the China market. How can you stay in a market when your sales have shrunk in 7 years from an (almost) respectable 640K sold in 2018 to 53K in 2024. How do you spell C-O-L-L-A-P-S-E? According to Car News China, it’ll likely be worse in 2025 since their current sales till April were an anemic 5,314 units, a YoY decline of 76%!
QUOTED
Spoke with my friend Nori Shirouzu about BYD’s latest price cuts on most of their models, between 10%-30% that will go away at the end of June) and how the market didn’t handle it very well – BYD share price slid after the news. First, it’s early in the year for such a move. Next, there will be companies that follow which we’ve started to see soon after the announcement.
BYD’s dominance is being challenged by the likes of Chery, Geely and others and it seems like they’ve started to play a little defense. The entry level BYD vehicles that now start at less than $10K in China now have competitors, good ones too.
In addition, competitors are starting to focus their attention on BYD since Tesla seems to have hit it’s ceiling and isn’t now considered a technology leader in the China market anymore, getting shoved behind BYD and Xiaomi.
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Op Ed in the Det News titled ‘The Future of Transportation is already here – just not in the U.S.’ In it, I introduce what I’ve already mentioned in this newsletter to a broader audience, the:
Electrification > Smartification > Autonomation phases of the future of transportation.
Not many comments yet since it posted just a couple days ago, but it’s good to see that of the few that are there, I am still accused as both a ‘Truth’ Teller AND A ‘Commie Sympathizer.’ I MUST be doing my job then!
And if my opinion isn’t enough to convince you, there was a recent Fast Company article posted that alludes to the same thing. Isolationism likely puts the D3 behind it’s global competitors in a BIG WAY.
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Lastly, I was a part of a CNBC piece re: Xiaomi, thanks to Robert Ferris for reaching out, think the piece was very well done and includes some commentary on its recent challenges.
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Spoke with Olivia Siong for Channel News Asia – CNA, Singapore’s largest media outlet about BYD, God’s Eye and the potential for it to be come ubiquitous, not only in China but in markets outside where it currently ships, including MX and Sing. Olivia shot some video of her visit to BYD HQ in Shenzhen that you can see below:
Olivia taking out the BYD tech for a spin
BY THE NUMBERS
$900. That’s how much Xiaomi is estimated to lose with each sales of its SU7. For perspective, this doesn’t sound bad actually. To be profitable, my guess is that they’d need to be well over 750K units / year.
As volume continues to grow with the SU7, even with the recent hiccup and reinforcements on the way in the form of a midsized SUV – the YU7 beginning delivery in July, my guess is they hit that they’re able to hit that number within the next 3-4 years if they can get another product out the door in the next 12-18 months. All signs point to (adding capacity) Xiaomi believing that the YU7 will drive sales volume, much moreso than the SU7 anyway.
It’s already started being shown off at a showroom in Beijing with more on the way. I am a fan of this, but of course it DOES look like a Ferrari so perhaps that’s the Jedi mind trick here!
CHINA EVs & MORE
We didn’t record an episode last week so this is hot off the presses from this AM. We will be back next week at our regularly scheduled date / time: Friday 9am, ET.
Please join us and message me directly with any questions you may have.
Otherwise, find the recorded episode as an audio podcast or as video on the China EVs & More YouTube channel.
We are live on these platforms: YouTube, Linkedin and X. See you there!
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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
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