I'm here with my good friend and partner, Alex Xie, who leads our
automotive business in China.
Alex, great to see you.
We see you here.
It's been a really exciting time for the China automotive market
in 2023 with sales ending up more than 12% relative to '22
and EVs accounting for more than 30% of new vehicles sold in
China.
What's behind that success, and what's your outlook for 2024?
Yes, as you know, right. Market is really exciting at the
moment.
You will see that economy is not doing so well.
However, the auto market is growing so great,
especially on EV. I think there are three major factors behind
that.
Number one is that after many years of growth, finally
consumers feel EV is good.
They have no hurdle buying EV at all for most of that, right?
They just feel EV is cool, EV is new, and then they want to try
EVs. That's number one.
Number two is that I think there are so many new products coming
from all OEMs, new players into the market.
They're not just new but also really cool products.
But in China, EV is no longer just an E powertrain.
EV means really smart cars with E powertrain.
So given that was really very smart cabbing, smart driving, EV
is really having very good products for the consumers.
Number three is that price. You know, yes, the market volume
growing, but as price is going down, we have so many players
build up factories, platforms they need to scale up so that
they offer their product at a very low price, competitive
price, which actually making it really affordable for everybody.
So, you know in China, normally EV is selling at similar price
to ICE.
So that's also making customer feel like, "why not?" It's
better products, cheaper and greener.
So that's actually driving the whole EV boom in China. Wow,
that's great.
So with so many strong competitors, naturally a number
of these players are looking to move abroad, whether it be to
North America, whether it be Europe, South America.
From your vantage leading the China automotive business, what
are some of the things you're seeing with those players that
gives you confidence that they can be successful?
And what are some of the challenges, the hurdles you
think they're going to have to navigate here in the coming
year?
Yeah, I think the strengths they have three, I think unique,
strengths they should further, you know, leverage. Number one
is technology, right?
They're really having differentiating technology in
ecosystem, in smart cabin, and also in battery, and also
somewhat in ADAS.
That's important.
Technology. Number two is the cost base.
You know Chinese players, they're strong in cost. Also
they have actually a very strong particularly integrated value
chain.
Many of them own battery companies, right?
By that they can also offer very cost-competitive products.
Number three is that on cost on a product portfolio, they don't
only have BEV but also have PHEV, right.
The PHEV is actually quite unique in China.
The PHEV can actually drive on battery for one hundred, two
hundred kilometers, but at the same time also be using the rest
on gas.
That's quite unique as well.
So these three are some things making them different.
However, still there are challenges for sure.
I think a few things they have to do: number one is that, you
know, customers across the world is different.
They have to understand the different customers in different
countries and then offer them the best thing they have to fit
in their needs.
That's not easy.
That's number one.
Number two is that you know they cannot keep exporting all the
time.
They have somehow localization their manufacturing supply chain
and by doing that how they can sustain their strengths or
advantage in cost that's also a challenge for them to overcome.
Number three is, you know, organization, right?
It's not like just sitting have a very big organization in China
and then having all the cars set into other markets. They have to
localizing also the organization.
So how they can really have the best talents locally, best
culture locally to support a business, that's another
challenge to have to overcome.
So overall, right, I mean I think the market is there, some
market even better, some is more difficult, but they have a
chance to win there.
However, to do that, they have to overcome a couple of core
challenges.
It's not easy.
Well, it's certainly an incredibly exciting time for the
industry.
We're no doubt in for tremendous disruption here in the coming
years.
I've never seen competition be more fierce, but with fierce
competition, ultimately consumers win.
Thanks.
Thank you very much.