← Catalyst with Shayle Kann
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- [00:03]
Latitude Media Host
Latitude Media. Covering the new frontiers of the energy transition.
- [00:07]
Shayl Khan
I'm Shayl Khan. I lead the early stage venture strategy at Energy Impact Partners. Welcome to Catalyst. So here's the key fact. Five years ago, China exported about a million cars a year to other countries. This year, it's tracking somewhere around 12 million more than Japan or Germany ever shipped at their peaks. No country has ever scaled car exports that fast, and almost none of them are here in the US we have a tariff of 100% on Chinese vehicles, plus rules that effectively keep Chinese hardware and software off American roads for the most part. So from the space that most Americans sit, this looks like a non story. The cars aren't in the showroom. The threat feels kind of theoretical. The wall is still holding. But everywhere else, Chinese automakers are reshaping markets across Europe, Southeast Asia, Latin America, essentially the entire world ex US They've also become the largest source of imported cars in Mexico, which is obviously not so far from the United States. Mexico put a 50% tariff on them on January 1, and the Chinese executive's response was essentially, that's not going to stop us. Which means we might start to see some Chinese EVs in particular entering the US via Mexico nonetheless. So I wanted to see what's actually happening inside the Chinese market right now. And as far as exports go, we talk about who's winning and why, how far into North America these countries have really gotten, whether that American wall is really protection or just a delay. While the rest of the world gets a head start on the inevitable wave of Chinese vehicles, half of them EVs today, but increasingly all EVs that are coming. My guest is Michael Dunn. He runs Dunn Insights. He hosts the Driving with Dunn podcast. He spent decades tracking the auto industry from inside China. He also has a book coming out on this topic in January called Car Wars. So there's nobody better to map this crazy dynamic in the global auto market. Michael's coming up after the break.
- [02:20]
Alfred Johnson
Trillions of dollars are flowing into clean and critical infrastructure. But those investments aren't driven by technology alone. They're shaped by markets, by policy, by capital, and by the institutions that connect them. I'm Alfred Johnson, CEO of Crux and host of a brand new podcast, Critical Capital. Each episode I talk with people deploying capital, shaping policy and building the clean economy. Tune in as we unpack how progress is actually made. Listen to Critical Capital on Spotify, Apple, or wherever you get your podcasts.
- [02:52]
Latitude Media Host
Catalyst is supported by Fishtank pr, an award winning PR firm focused on climate and Energy tech, renewables, and sustainability. Fish Tank is known for generating prominent and effective media coverage for the brands they work with. If you want a PR partner that's thoughtful, shoots straight, and gets results, you'll like Fishtank PR. To learn more about Fishtank's approach, visit fishtankpr.com that's F I-S-C-H fishtankpr.com when utilities
- [03:19]
Energy Hub Representative
need flexible capacity they can count on, they turn to Energy Hub. Energy Hub works with more than 170 utilities, coordinating over 2.5 million devices to manage 3.4 gigawatts of flexibility. Built for the moments when utilities can't afford uncertainty, Energy Hub builds and operates virtual power plants that utilities actually stake their grid, planning on coordinating EVs, batteries, thermostats, and more through a single platform. Built for utility scale, predictive, verifiable, and designed to perform when it counts. Learn more@energyhub.com.
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Shayl Khan
Michael, welcome.
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Michael Dunn
Thank you so much for having me.
- [03:57]
Shayl Khan
All right, I want to start with you giving me an overview of the Chinese auto market. How would you characterize the state of the market right now?
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Michael Dunn
Oh, brutal, giant, ruthless. And like a meteor from outer space heading our way here in the United States.
- [04:15]
Shayl Khan
It hasn't really hit yet. We're gonna. We're gonna talk about this. It's a meteor that's. That seems to be coming, but has not landed, not made landfall in the United States just yet. But before we get to the US Part of it, giant. Brutal. Those are interesting words to use. Do you just mean in the context of the competition is brutal, or what do you mean by brutal?
- [04:35]
Michael Dunn
Yeah. So there's something among China hands known as the China's killer playbook. And we've seen China apply this to industry after industry over decades now. Starting when I first went to China in the 1980s, it was buttons. Yeah, the buttons you wear on your shirt. China said, we are going to be the world dominator when it comes to manufacturing buttons. They concentrated massive capacity inside their country. It was brutal competition there. And then they exported globally. They're the king of buttons. And they still are. And since then, we've seen that same playbook happen in steel, in solar panels, in drones today, and now it's happening in cars. So much so that China has enough capacity today to supply half the world's demand for cars. And it's not out of the question that one day China could be capable of producing all the cars for everybody in the world. So they amass massive capacity at home. Brutal price wars at home, which incentivizes companies to export like crazy all over the place. And that's exactly what we're seeing with cars today in China.
- [05:50]
Shayl Khan
I want to talk about the exports in a second, but you mentioned the capacity that they have right now. So I'm more familiar with how it works in solar and batteries. And there oftentimes what you see is, okay, you have dozens and dozens of new manufacturers who spin up in China. They're often supported either at the, the federal level or the provincial level. There is this brutal competition as you described. And so part of what ends up happening as a result of that in solar and in batteries is that they have a lot of excess manufacturing capacity and a lot of that capacity is kind of idle. So, yeah, maybe they have the capacity to meet half of the world's needs, but, you know, average utilization of a manufacturing facility is 50% or something like that. Is it similar in the car world?
- [06:34]
Michael Dunn
Absolutely identical story. So to put some numbers to it, this year China has capacity to build about 55 million cars. Their domestic demand is 25 million. They'll export another 10 million. That leaves 15 to 20 million in excess capacity idle, looking for new markets. So it's precisely to describe it, it's just that today it's the automotive turn and importantly, a lot of people outside of China think, oh, well, yeah, that's EVs. No, this is across the board. EVs, PHEVs, hybrids, gasoline. They have overcapacity in every powertrain. And we're seeing exports. Last year, half of them were EVs, half of them were gasoline powered vehicles
- [07:21]
Shayl Khan
of that capacity in China. How much is EV versus ICE vehicle?
- [07:26]
Michael Dunn
It's about 50, 50 at this point, ICE is drawing down, plants are being closed and maybe converted to EVs, but it's probably about 50, 50 at this juncture.
- [07:36]
Shayl Khan
Okay, so they're exporting in roughly equal measure to what they are producing. About half and half.
- [07:42]
Michael Dunn
Right.
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Shayl Khan
Where are the exports going?
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Michael Dunn
Mostly, yes. So where they're not going may be the easier question to answer. If you imagine a map of the world, and we have this in our present corporate presentations, every country I've visited in the last 24 months in every time zone has Chinese cars entering them now, with one exception, the United States. So Mexico, Europe, South Africa, Thailand, Middle East, Africa, they're going everywhere all at once. Put some numbers to it. In 2020, China exported 1,1 million cars worldwide. This year they're on track to export 12 million cars. 12 million. And that's putting the herd on legacy automakers in all these markets worldwide. We're living on an island here in the United States. We haven't felt it yet. So it's hard for us to imagine the immense capability of the Chinese automakers and how they're just taking other markets by storm.
- [08:48]
Shayl Khan
Are we the only country that has imposed significant import tariffs on Chinese cars? Is this that why we're just the only country that has that policy?
- [08:57]
Michael Dunn
That's right. We're. We're called the exceptional country for a reason, right? We are. You know, until very recently, Canada was holding the line with us at 100% tariffs. That's gone. You know, Prime Minister Carney now welcomes Chinese EV imports. Mexico has 50% imports starting in January of this year. But Mexico's still one of the leading targets for Chinese exports. So we are basically more or less the only nation in the world that effectively blocks Chinese cars.
- [09:30]
Shayl Khan
All right, so we're going to talk more about what that means for the US and whether we will nonetheless see the incursion of Chinese cars in this country anytime soon. But before we do that, who are the big players these days? This is one other thing I will point out, by the way, about the solar industry as it developed, is that the names of the Chinese companies who were the biggest solar panel manufacturers a decade ago are not the names of who are the biggest solar manufacturers today. There was a ton of turnover even at the very top. You know, in the. In the 2010s, it was Suntech. Suntec doesn't really exist anymore. It was Yingli, it was all these other companies, and now it's Langi and a bunch of others. So, like, do you see the same kind of turnover? Are we going to have more persistent brands in the vehicle world because it's more of a consumer product and they're trying to build up the brand?
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Michael Dunn
All right, so one of the crazy things, you probably saw this in solar, too. There are dozens and dozens of Chinese carmakers. At last count, there's more than 60 and more than 100 individual brands. So you go, wait a second, how can that be? We have the Detroit 3. We have a handful in Japan. How come they have so many? Well, that's a whole nother story about how state capitalism works. But if we want to distill it down into its essential ingredients, think of two categories of players of leaders in the industry. One would be the legacy automakers. The companies have been around for at least 10 years, probably 20. And top of the list, there is your BYD, which also happens to be a major battery manufacturer. Then you have Geely, which is the owner today of the Volvo brand and the Polestar brand and the Lotus brand. And then after that you have a big state enterprise called Shanghai Automotive which is exporting products under the MG brand, the iconic British brand they acquired several years ago. These are your legacy automakers, they're larger, they build several million cars a year and they're good and strong in their own right. And then you have a second category, a brand new category. And think of these as like the Teslas of China. They've just been born in the last decade, some of them are only five years old and they've been founded by billionaires who made their fortunes originally in software in the tech industry inside China. Now they're saying, oh look what Tesla's doing to the auto industry globally as a massive disruptor will be the Teslas of China. So you have names like Xiaomi, Xpeng, Leap Motor, who else? Nio's in the mix there. And those are the main players in this sort of new Teslas of China category.
- [12:11]
Shayl Khan
In terms of differentiation amongst them, I mean we have multiple automakers, a smaller number. We have multiple automakers in the US and those who import into the US and there's all the standard versions of differentiation. The product is different, cars are different from each other. What do you see as like the biggest differences amongst the major players at least in China? Are they approaching the market with different strategies or different types of products or are they all pretty similar and they're just cutthroat with each other?
- [12:42]
Michael Dunn
Oh, they're, there's, I think of them as. You don't ever see that picture of like a massive school of schools of fish all mixed together, shaped sizes, colors going in different directions. That's China's auto industry. So you have niche players, you have mass scale players, you have electric only specialists, you have companies that produce every powertrain. But if I were going to think, try to distill it down, you have really old generation or your legacy automakers who are dependent on scale and low cost. That's your BYDs and GLEEs and SAICs. Then you have this new generation that's all about software and software defined vehicles and over there updates and digital interfaces. So they're focused on making the car a gadget, the ultimate urban device. And so you have kind of, if we put it in American terms, you have Ford, GM and Chrysler on the one hand and you have Tesla Rivian Lucid on the other. That's the biggest distinction Relevant to us. In our discussion today, you mentioned cost.
- [13:53]
Shayl Khan
Where are we in terms of cost? What are they charging in China? And then what are they charging for exported vehicles? And let's focus, I guess, predominantly on electric vehicles. I know there's differences, but let's talk about the EVs, okay?
- [14:05]
Michael Dunn
Because it's the future. I mean, electrics were 5% of the Chinese market in 2020. They're half now. So they're really on the ascendancy
- [14:15]
Alfred Johnson
cost.
- [14:15]
Michael Dunn
This is where the meteor starts to look really scary. You can build an electric car in China for, and they do, and sell it for under $10,000. In terms of comparison to Europe, United States, they're 30 to 40% less expensive. And so as you look around the world, you say, if you're going to build an electric vehicle, where should you build it? There's only one answer, and that's China and Tesla's proof of concept of that. Half of Tesla's global production is centered in China. That's not by mistake. Elon looked around the world. Where can I be most competitive? China is the place to manufacture at scale and at low cost. Electric vehicles.
- [14:58]
Shayl Khan
Is $10,000 the price or the cost?
- [15:00]
Michael Dunn
The cost. No. They'll start with the BYDC goal at about $8,500. Their cost per unit is probably around 7,000 in that price point. Their margins are super thin compared to anywhere else in the world. So this is the double edged sort of knife edge of what's happening in China. You have scale, you have competitiveness, you have great products at low cost, but your margins are ultra thin. They're not making much money, but they're selling like crazy.
- [15:34]
Shayl Khan
So before we get to the US then in the rest of the world, you know, these Chinese cars are flooding the market. Are we seeing automakers outside of the US start to feel the pain meaningfully? Like, are we going to see a wave of failures of automakers, of basically everybody who's not Chinese and not US based, or at least not importing enough into the US for it to make up the difference?
- [16:00]
Michael Dunn
We're already seeing it in Europe for sure. Volkswagen's come out and said between now and 2030 they'll lay off 50,000 people. This is unprecedented. They're closing plants for the first time since World War II. And the Germans are not alone. Honda, also for the first time since the 1950s, announced a loss last year. Why? They're getting beaten down in traditional markets like Thailand, Indonesia, Australia, the UK Across Europe, virtually every legacy automaker is taking it on the chin. And the most vulnerable right now, there's two of them. One is Nissan and the other is Stellantis, the group that owns, you know, Fiat and Maserati and Jeep and Chrysler brands. Those two are the most vulnerable. So what will happen is either they'll joint venture with the Chinese and eventually be taken over by them, or the Chinese will just buy their brands outright. I mean, we're not talking about something that might happen three to five years from now. It's happening right, right now in Europe. Enormous pressure on the existing automakers just to stay alive.
- [17:15]
Alfred Johnson
We're living through a profound economic shift and energy sits at the center of all of it. Trillions of dollars are flowing into power plants, transmission lines, battery factories, data centers. But the future of energy isn't shaped by technology alone. It's shaped by markets, by policy, by capital, and by the institutions that connect them. I'm Alfred Johnson, CEO of Crux, the capital platform for the clean economy. Join me for my brand new show, Critical Capital. As I talk with people deploying capital, shaping policy and building projects together we unpack how risk is priced, how incentives are structured, and how progress is actually made. Listen to Critical Capital on Spotify, Apple or wherever you get your podcasts.
- [17:58]
Latitude Media Host
Are you tired of overpaying for big name PR firms but not really knowing what they're delivering? Is your comms team wasting time reviewing lengthy messaging briefs and decks instead of engaging journalists or producing content? Are you wondering why your competitors are getting press and you aren't? Fishtank PR is an award winning climate and energy tech, renewables and sustainability focused PR firm dedicated to elevating the work of both early stage and established companies. Whether you need to position yourself as a thought leader in between project announcements or translate complex ideas and technologies into tangible, compelling stories that resonate with the media, Fishtank can help. Check out fishtankpr.com that's F I S C H fishtankpr.com Virtual power plants are
- [18:41]
Energy Hub Representative
becoming a reliable way for utilities to manage capacity. But enrolling devices is just the start. What really matters is confidence, knowing those resources will perform when dispatched and being able to prove it. From the control room to the living room, Energy Hub's platform handles the full picture from near real time forecasting, locational dispatch, and the kind of rigorous verification that holds up when regulators, grid operators or leadership ask did it deliver? Easy enrollment creates momentum. Proven performance builds trust. That's why more than 170 utilities rely on Energy Hub to manage over 2.5 million devices and delivering 3.4 gigawatts of flexible capacity. See what that looks like@energyhub.com.
- [19:27]
Shayl Khan
Let's talk about Autonomy for a second. Where, where does Autonomy fit into the mix in China? You know, obviously in the US we have, we have Waymo, we have the Tesla Robotaxi coming. There are others like Zoox who are starting to arrive in some cities. Is China seem ahead behind? Is it, is it part of the export strategy or is it not like where does Autonomy fit?
- [19:49]
Michael Dunn
Great, great arena here, Autonomy. So it is a two horse race between the United States and China. The edge to China comes on the regulatory front. Here's a comparison. When I talk to regulators in China, their job as they see it, their mission is to smooth the way to commercial ramp of autonomous in China and other markets worldwide. Make it as easy as possible, facilitate, make it go faster. What do you need to make it happen? Whereas here in the United States, the regulators are much more cautious. How do we make sure things don't go wrong? How do we make sure it's safe? So in that respect, the US leads in technological innovation, but China once again is quicker when it comes to commercialization. Not only inside China, but we're seeing the Chinese autonomous vehicle makers move into the Middle east and in the UK and Germany now moving quicker to market than their US counterparts. And this is where we're at risk. We might be the inventors, but China commercializes more quickly. And that's a problem for us.
- [20:56]
Shayl Khan
The other thing that I think is interesting is what's happening in the US with Autonomy is you can't, I mean Tesla is the closest to this with fsd, but generally speaking you're not buying an actual self driving vehicle. FSD's name notwithstanding, you can't buy a way a Waymo operated Jaguar. Right. And if you did, it would be very expensive because of the sensor suite and so on. But because Chinese vehicles are starting at such a low price point in the first place, I imagine you might sooner see consumer available fully autonomous vehicles in China than we see in the U.S. again, Tesla, FSD notwithstanding.
- [21:36]
Michael Dunn
Definitely. Company like Xpeng, which does everything it can to mimic whatever Tesla's doing, they are into robotics and they're very optimistic that their goal, their mission is to turn a lot of private buyers into purchasers of their vehicles which have advanced autonomous features. So if that breaks out in China, it's the largest market in the world. And just as we've seen extremely quick adoption of EVs, the Chinese consumer, unlike the American, unlike I grew up in Detroit car culture. Love driving, acceleration, handling, braking, performance. For the Chinese, the car is something different. Number one, it's a projection of social status. And number two, it's a gadget. You get in your car, you're not going to have a whole lot of fun driving around Beijing or Shanghai because the traffic's unbelievable. It's more like, what can I experience inside my car? And if I don't have to drive, all the better. So my bet would be we'd see earlier, quicker, faster AV adoption, just as we've seen EV adoption in China.
- [22:42]
Shayl Khan
What's the charging infrastructure like in. In China, particularly in urban areas, I wonder. There's such dense urban cities, Beijing and Shanghai and things like that. How do people charge?
- [22:53]
Michael Dunn
You know what? It's so good that people don't even think about it anymore. There's charging, for example, Tesla superchargers. You know how in the United States there's more or less planted in between cities? When you take a road trip between San Diego here and L. A, I know where the supercharger stations are. In China, they put the Supercharger stations inside the cities so that people on their way to work and stop and charge up. But there are dozens of other providers of charging services inside the city, outside the city, so that many owners of EVs don't have to worry about charging at home. They can charge at the office, they can charge at the mall, they can charge on their way to work, on their way home. Very convenient in most major metropolitan areas across China. That's a, that's one of their secret superpowers in this rapid adoption of EVs.
- [23:44]
Shayl Khan
Okay, let's get a little closer to home and start with our neighbors to the north and to the south. So you mentioned Canada got rid of its hundred percent tariffs. You mentioned Mexico still has a 50% tariff. So in both of those cases, how quickly and how much have Chinese vehicles started to penetrate those markets?
- [24:03]
Michael Dunn
Okay, so let's take Mexico first, because there's a little bit of history there. Mid Covid, the government decided, oh, our consumers need affordable vehicles, so we'll drop import duties to zero. And that was the beginning of this torrent of Chinese cars going into Mexico. And for the last two years, Mexico has been the single largest destination of Chinese exports. So much so the United States said, hey, what the hell is going on down there, guys? You're letting all these Chinese cars. And I was recently in Mexico City. You see dozens of brands with Chinese cars all over the place, dealerships going up. And so the US put pressure on Mexico finally in January of this year to raise that import tariff from basically nothing to 20% last September to now 50%. So we've seen a deluge or an outpouring of cars into Mexico. There's several hundred thousand on the road now, many brands. It's slowed a little bit by the tariffs, but guess what? The Chinese are now eyeing plants inside Mexico. They'll do assembly and sell to Mexican customers. So Mexico is a strategic launch pad for the, for the Chinese in North America. And if we go north of the border, just as you said, Canada held the line on imports at 100% with the United States until earlier. Gosh, time flies so fast earlier this year when Carney went and said we're going to allow our first 49,000 cars from China duty free to come in EVs. And we're already seeing by next week we'll start to see the first batch. And guess what? The first batch is actually Tesla's made in China, but they'll be followed by volvos. I know SAIC's in there, BYD's in there, Geely's in there. They're all muscling in to try to get a share of that $49,000 quota.
- [25:57]
Shayl Khan
Okay, and so here we are in the US and I guess I have a first question, which is we have the reason that we haven't seen Chinese cars, Chinese EVs in particular, flood the market here is because we have this 100% import tariff. But given the pricing that you mentioned, they're selling at $10,000. Even with 100% import tariff, they're still going to be cheaper in the us. Like, if you're trying to buy an EV in the US it's hard to find a $20,000 EV as well. So I'm sort of surprised that even despite that tariff, we haven't started to see a lot of imports. Why do you think that is?
- [26:33]
Michael Dunn
I really appreciate it at the outset when you said we might go deeper in the weeds because it gets a little bit hairy here. So a couple of caveats. That under $10,000 vehicle that's sold in China would not qualify for registration. United States on safety and probably on overall emissions, depending on if it's PHEV or ev, but mainly safety homologation is not there. So for example, that same seagull that sold in China at $10,000, let's call it, sells in Mexico for $20,000. Mexico's standards are not as high as the United States. So we're talking about 25, $30,000. Now you have a small car with small range and guess what? The American consumer goes not really into that. I know it's 25, but it's small and short range, not that great looking. No, I want a bigger vehicle. So let's be care. I think we need to be careful about what kinds of cars would actually Chinese would actually aim to sell here. Second thing to note, the Chinese are starved for profits. And when I talk to the Chinese manufacturers, they're far less interested in solving America's affordability program and far more interested in saying how can we attack the larger SUV and pickup truck segments. BYD for example, recently launched this mid sized pickup truck called the Shark. It's aimed directly at the Tacoma and the Ranger. And I know other Chinese automakers have the full size pickup and SUV trucks in their pipeline for planning. So we got to be careful. Like we'd love to the Chinese come in and solve our affordability problems, but I don't think that's on the agenda. They would come and build as high class, high quality vehicles as possible in the hopes of capturing those profits that they cannot find easily anywhere else in the world. So this is, this is an important, important point just to stay on that for a moment because I hear from so many people like, oh, just please let the Chinese in because they're going to make our lives all happy. Well, the Chinese are not dummies and they have their own agenda and it may or may not be solving our affordability program. No, actually they want to get the profits right.
- [28:49]
Shayl Khan
So. So particularly with 100% tariff there, they actually wouldn't be competitive in the United States given what they would sell here and what they would have to sell it for. Are we seeing Chinese vehicles sneak into the United States nonetheless via Canada or Mexico?
- [29:02]
Michael Dunn
That's right. We here in San Diego will see it's not uncommon to see BYDs and MGs come across the border for the day. So still not possible to register them here legally. But you can imagine a scenario. There's a lot of people commute over the border every single day. Tens of thousands, hundreds of thousands of people cross the border, buy a Chinese car there, register it there and make that your daily driver. That's happening in places here also near El Paso, Texas. We even see them in Phoenix. Now these are small numbers, they're not overwhelming. But imagine as more and more of these cars come across the border and Americans see them and go, hey, that's a pretty good looking car. I want one of those There'll be even more pressure on the US to let them in.
- [29:52]
Shayl Khan
We talk about cybersecurity for a second. I mean, you know, we've already, we ban lots of Chinese things where we have cybersecurity concerns. I can imagine that our vehicles are one of the areas that, that would be a concern for us. Obviously we've effectively banned Chinese vehicles anyway via this tariff. But other countries, is that a concern that you have a Chinese vehicle that is a software defined vehicle as you said, taking over the market? Like how have other countries dealt with that?
- [30:22]
Michael Dunn
It's absolutely a concern here in the United States and other countries so far look at it and seem to just shrug. UK no problem. Australia, New Zealand, no problem. I can't think Canada, bring them in. So Mexico, that's fine. Brazil no problem with the Chinese. So what's going on here? I feel as though the United States understands that it's engaged in a knockdown, drag out rivalry competition with China and we would find ourselves vulnerable. Whereas China is not going to go after a Thailand or even a uk but they could do significant damage to us and we'd only have to. We can look at the situation in Iran. Remember the story in Iran of the traffic light and the cameras on the traffic lights were being hacked by the Israelis and they understood where everyone was. Well, let's not be naive. That same kind of tool could be used in the form of cars here in the United States we have more to lose than other countries. So on the one hand we look like we're over paranoid, on the other hand I feel it's justified because we have a lot to lose. We could be extraordinarily vulnerable. They could do massive damage in seconds to, you know, they could unleash chaos. All they have to do is say run the red lights or don't stop at the stop signs in a few cities at the same time and there would be panics across the United States. So I feel it's much more a case of how vulnerable we feel and how much we have to lose. Whereas other countries go, China's not really going to go that far, go that way with us.
- [32:06]
Shayl Khan
So where do you think this all goes? I mean you could project forward a few years and if nothing changes, it's easy to imagine a scenario where China basically floods the entire world with cars, becomes the dominant supplier of vehicles in the entire world, ex US and then we are this little island where we have some domestic manufacturers of vehicles who basically can't export anymore because they're not competitive and so they only sell into the US market. And we, and we're, in some ways we're like an isolated country, like, you know, North Korea, but in different context. Is that basically where we're headed?
- [32:44]
Michael Dunn
Well, potentially, but I think realistically it's like gravity or water. The Chinese are going to find a way in and it may be by acquiring Stellantis or a Nissan or a plant inside or rebadging. It's a leap motor, but it's badged a Dodge. And people start to, oh, yeah, okay, I understand it's Chinese, but it's American. And there were shared interests. So a lot of people point to the TikTok example as a precedent. Right. TikTok not that long ago is decided both houses, the administrative Biden. No, no TikTok ban not coming in. Here we are a year later. Oh, yeah, TikTok's going to stay. There's going to be some American majority ownership. It will manage things. I think that's most likely scenario for Chinese cars, that maybe it's a joint venture, maybe the American side has majority share. But it's hard to imagine a future where the Chinese are not here.
- [33:44]
Shayl Khan
All right, final question for you. Say. I say I'm visiting China sometime soon. What's the coolest vehicle I should go drive and why?
- [33:52]
Michael Dunn
Gosh. Oh, yeah. So two of my favorites. One is the Xiaomi SU7 or XU7. So Xiaomi is founder. Lei Jun is known as the Steve Jobs of China. He. He has a billionaire who built up this massive smartphone company called Xiaomi a few years ago, got into the car business. Tremendous looking cars. Xiaomi, look at that one. The other one I like the zeekr. This is a new brand under the Geely Group, designed and engineered out of Sweden by former Volvo engineers and designers. Great car, great looking car, excellent performance. Those would be my two top picks. Other Chinese automakers are going to shoot me for stopping there, but you got to have your top two. And there's other very impressive cars out there, but those would be the top two.
- [34:45]
Shayl Khan
All right, Michael, this was a lot of fun. Thank you so much for the time.
- [34:48]
Michael Dunn
Yeah, thank you. Great joining you today.
- [34:52]
Shayl Khan
Michael Dunn is the CEO of Dunn Insights. The show is a production of Latitude Media. You can head over to latitudemedia.com for links to today's topics. This episode was produced by Max Savage Levinson. Mixing and theme song by Sean Marquand. Ann Bailey edits the video version of the show. Stephen Lacy is our executive editor. I'm Shayl Khan and this is Catalyst sa.