WEBVTT

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I'm here with my good friend and
partner, Alex Xie, who leads our

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automotive business in China.

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Alex, great to see you.

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We see you here.

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It's been a really exciting time
for the China automotive market

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in 2023 with sales ending up
more than 12% relative to '22

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and EVs accounting for more than
30% of new vehicles sold in

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China.

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What's behind that success, and
what's your outlook for 2024?

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Yes, as you know, right. Market
is really exciting at the

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moment.

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You will see that economy is not
doing so well.

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However, the auto market is
growing so great,

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especially on EV. I think there
are three major factors behind

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that.

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Number one is that after many
years of growth, finally

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consumers feel EV is good.

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They have no hurdle buying EV at
all for most of that, right?

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They just feel EV is cool, EV is
new, and then they want to try

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EVs. That's number one.

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Number two is that I think there
are so many new products coming

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from all OEMs, new players into
the market.

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They're not just new but also
really cool products.

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But in China, EV is no longer
just an E powertrain.

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EV means really smart cars with
E powertrain.

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So given that was really very
smart cabbing, smart driving, EV

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is really having very good
products for the consumers.

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Number three is that price. You
know, yes, the market volume

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growing, but as price is going
down, we have so many players

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build up factories, platforms
they need to scale up so that

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they offer their product at a
very low price, competitive

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price, which actually making it
really affordable for everybody.

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So, you know in China, normally
EV is selling at similar price

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to ICE.

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So that's also making customer
feel like, "why not?" It's

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better products, cheaper and
greener.

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So that's actually driving the
whole EV boom in China. Wow,

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that's great.

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So with so many strong
competitors, naturally a number

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of these players are looking to
move abroad, whether it be to

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North America, whether it be
Europe, South America.

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From your vantage leading the
China automotive business, what

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are some of the things you're
seeing with those players that

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gives you confidence that they
can be successful?

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And what are some of the
challenges, the hurdles you

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think they're going to have to
navigate here in the coming

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year?

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Yeah, I think the strengths they
have three, I think unique,

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strengths they should further,
you know, leverage. Number one

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is technology, right?

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They're really having
differentiating technology in

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ecosystem, in smart cabin, and
also in battery, and also

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somewhat in ADAS.

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That's important.

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Technology.  Number two is the
cost base.

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You know Chinese players,
they're strong in cost. Also

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they have actually a very strong
particularly integrated value

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chain.

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Many of them own battery
companies, right?

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By that they can also offer very
cost-competitive products.

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Number three is that on cost on
a product portfolio, they don't

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only have BEV but also have
PHEV, right.

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The PHEV is actually quite
unique in China.

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The PHEV can actually drive on
battery for one hundred, two

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hundred kilometers, but at the
same time also be using the rest

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on gas.

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That's quite unique as well.

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So these three are some things
making them different.

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However, still there are
challenges for sure.

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I think a few things they have
to do: number one is that, you

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know, customers across the world
is different.

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They have to understand the
different customers in different

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countries and then offer them
the best thing they have to fit

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in their needs.

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That's not easy.

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That's number one.

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Number two is that you know they
cannot keep exporting all the

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time.

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They have somehow localization
their manufacturing supply chain

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and by doing that how they can
sustain their strengths or

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advantage in cost that's also a
challenge for them to overcome.

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Number three is, you know,
organization, right?

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It's not like just sitting have
a very big organization in China

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and then having all the cars set
into other markets. They have to

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localizing also the
organization.

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So how they can really have the
best talents locally, best

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culture locally to support a
business, that's another

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challenge to have to overcome.

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So overall, right, I mean I
think the market is there, some

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market even better, some is more
difficult, but they have a

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chance to win there.

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However, to do that, they have
to overcome a couple of core

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challenges.

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It's not easy.

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Well, it's certainly an
incredibly exciting time for the

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industry.

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We're no doubt in for tremendous
disruption here in the coming

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years.

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I've never seen competition be
more fierce, but with fierce

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competition, ultimately
consumers win.

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Thanks.

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Thank you very much.