Just got back from NYC. I, along with a few others (including people from Jalopnik, Car & Driver and Motor Trend), were invited by Zeekr to a track day at the Monticello Motor Club about 2 hours outside the city. Zeekr decided to send over a few 001s and a 009 to see if we could send them back needing some new treads. It was a beautiful fall afternoon to see what these vehicles could do when pushed to their limits.

The day started out with a presentation from Giovanni Lanfranchi, the new head of the Digital team. He went through the history of the brand, positioning, technology, sales and a product overview. For the folks that didn’t know Zeekr well before, the preso was very informative. Remember that they are planning to IPO in the US so I don't think having this track day in the US at this time was a coincidence at all.

Then it was time to drive. Unfortunately, they didn’t send over an X or a 001 FR which are the two cars I really wanted to take for a spin. The 001FR is the performance version of the 001 that was unveiled just the week before in BJ but alas, I was told it could take up to 4 months for a vehicle to hit our shores from China.

Both those test drives will have to wait until I get back to China, likely early next year. I’d driven the 001 before but NEVER like this. The track is about 3.6 miles long so one lap took some time and on one straightaway, I got it up to almost 200km / h which for the Americans is a bit over 120mph. 

I’ve never been that into car racing so I didn’t push the car too much, but I was in the car when one of the instructors they sent over from Shanghai decided to give us one hot lap. Let me just way, I got a much better appreciation of what the 001 can do but also what a race car driver endures when pushing his equipment to the limit. Overall a very fun day.

We also got a sneak peek of Waymo's L4 robotaxi that Zeekr is the contract manufacturer for. It's based off their popular Sustainable Experience Architecture (SEA) platform that also underpins the JiYue 01, Lotus Eletre and other notable EVs from Geely.

I am also locked and loaded for the LA Auto show. I will be in SF for some meetings starting on Mon, November 13^th and then head down to LA on the 15^th through the 17^th. For those in or around NorCal / SoCal that want to meet up, let me know.

CHINA EVs & MORE (CEM)

Back to our normally scheduled programming – 9am ET on Friday. Join us if you’re free.

If you’d like 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. It’s an opportunity to ask any questions and have discussions with Lei and I so if are itching to know more about something, join us tomorrow morning!

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.

BIGGEST NEWS OF THE WEEK

This is really the first high profile company that’s taken these measures, although quite a number of them are (Aiways, WM and few others) are farther gone and close to the end of their rope.

The EV space is becoming less of a two-headed monster with one company clearly taking the global leadership position. And it’ll be really tough for any one company to push them off their perch. Even one with as deep of pockets as a Tesla.

Chart courtesy of Bloomberg.

The non-union factories run by about every other automaker are now under pressure to raise their hourly rates but the US Three are at a distinct disadvantage when it comes to the cost side of the equation, which some analysts equate to higher priced cars, at least during the life of this contract.

With inflation and interest rates high, the current appetite to buy is low. With the automakers dialing back their plans on EV production, higher priced cars could really slow EV adoption down here in the US despite the Inflation Reduction Act incentives. This uncertainty will continue until the US govt can decide definitively who, what, how much given the battery and purchase subsidies. The good thing is that now, the 150K UAW workers can all go back to building cars.

Look for Tesla, BMW, Merc, Volvo, Hyundai and the other non-union US automakers to make a similar move, lest they want to see Shawn Fain’s face on TV all day talking about how unfair their wages are vs. his newly minted US Three contract.

I have an older one but a few friends a fanatics and spend tons of money to get the latest versions. This is another sector that the US is going to find VERY difficult to re-shore. Like almost impossible in the near term.

GET SMARTER

A bit of history here. The UAW recently went through a tremendous corruption scandal that led to the conviction of over a dozen former members including two ex-presidents. This created an atmosphere of distrust between rank-and-file members and so called leadership. For Fain, he had nothing to lose, he barely won the presidency so bringing in outsiders that helped him execute an entirely different negotiation strategy led to the huge wins that are part of this next contract.

I also look at this as the US Three management unable to really manage the conflict in front of them, similar to the Tesla and EV situations. These management teams have really done poorly on the last few major tests that they’ve had to face. And it’s only going to get even more dicey from here.

QUOTED

It’s helped tremendously with pollution and noise in Shenzhen while Beijing and Shanghai are also looking to completely flip their fleets to electric as well. A lot of electricity in China still comes from coal, so there’s still that issue but the success of moving the fleet over to clean energy is something most other countries should study in detail.

Not only because of the vehicles but also how they set up their infrastructure, reinforced their grids and gave domestic companies, specifically BYD an opportunity to become experts at designing and manufacturing electric cars and buses. Look where that’s got them!

BYD

This was the split between BEVs: 165,505 and PHEVs: 135,590. They even exported 30K NEVs to overseas markets from 9.5K YoY or growth of 220%!

Did I also mention they sell cells to other OEMs? They sold 15GWh of cells to other carmakers in October. That’s also up 50% YoY,

This should make it clear, there’s BYD and there’s everybody else. Including Tesla.

TESLA

Their exposure to China is very high, which in good times puts them over the top. In bad times, like when the Chinese economy continues to sputter or when their new(ish) products don’t resonate with the market, it spells trouble for Tesla.

Let me remind you all that they are still worth north of $600B so don’t feel too bad for them. The combined valuations of Toyota ($300B), Stellantis ($62B), VW Group ($57B), GM ($38B), Ford ($40B), Merc ($63B) and BMW ($58B) all add up to about the same amount. I still wouldn’t worry about Tesla too much.

BY THE NUMBERS

This announcement marks the largest commitment made by a foreign automaker in the US market since the IRA was announced and it all but guarantees Toyota a seat at the table as EV adoption heats up later this decade.

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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