How China is reshaping the global auto market

In 2020, China exported about a million cars a year. Now, it’s tracking somewhere around twelve million — surpassing the historic peaks of giants like Japan and Germany. Yet this massive global shift feels nearly invisible in the U. S. A 100% tariff on Chinese vehicles, combined with strict rules keeping Chinese hardware and software off American roads, has effectively built a regulatory wall around the domestic market. But in virtually every other corner of the globe, Chinese automakers are dramatically reshaping markets — from Europe and Southeast Asia to Latin America and Canada. In this episode, Shayle sits down with Michael Dunne, the CEO of Dunne Insights and author of the upcoming book Car Wars. Shayle and Michael map out the chaotic dynamics of the global auto market and consider what’s actually happening inside China’s automotive powerhouse. And they explore the biggest question of all: can America permanently shield legacy automakers, or is it just delaying an inevitable wave? Shayle and Michael discuss topics including: - How China successfully applied its massive manufacturing capacity to the automobile industry. - The market forces governing China’s massive car exports - Unpacking the two tiers of Chinese automakers: Legacy scale giants like BYD, Geely, and SAIC versus the "Teslas of China” like Xiaomi, Xpeng, Leapmotor, and Nio. - Why China’s expansion is already forcing major European and Japanese automakers to plan for closures and layoffs. - How regulatory frameworks in China are accelerating the commercialization of autonomous driving far quicker than in the U. S. - Concerns over cybersecurity in Chinese automobiles - Driving with Dunne podcast - Catalyst: Repurposing EV batteries for grid storage - Catalyst: Demystifying the Chinese EV market - Catalyst: Has Humble Robotics cracked the code on autonomous trucking? - Open Circuit: The AI race is really an electro-industrial race, led by China - Latitude Media: Rivian and EnergyHub are teaming up on managed charging Credits: Hosted by Shayle Kann. Produced and edited by Max Savage Levenson. Original music and engineering by Sean Marquand. Stephen Lacey is our executive editor. Tune into Critical Capital, a brand new podcast from Crux and Latitude Studios. Hosted by Crux CEO Alfred Johnson, Critical Capital explores the interlocking forces powering clean and critical infrastructure. Join us every other Tuesday for in-depth conversations at the intersection of energy, government, finance, and global markets. Listen here, or wherever you get podcasts. Catalyst is brought to you by FischTank PR, 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. Learn more about their PR approach and how they can support your company’s messaging by visiting fischtankpr.com. Catalyst is brought to you by EnergyHub. EnergyHub helps utilities build next-generation virtual power plants that unlock reliable flexibility at every level of the grid. See how EnergyHub helps unlock the power of flexibility at scale, and deliver more value through cross-DER dispatch with their leading Edge DERMS platform, by visiting energyhub.com.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:02Speaker 00

  Latitude Media, covering the new frontiers of the energy transition.

• 0:07Shayle Kann?

  I'm Shayle 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

• 0:48Shayle Kann?

  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 executives' 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

• 1:32Shayle Kann?

  why, how far into North America these countries have really gotten, whether that American wall is really protection or just to 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's spent decades tracking the global 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.

• 2:20Speaker 00

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• 3:53Shayle Kann?

  Michael, welcome.

• 3:54Speaker 03

  Thank you so much for having me.

• 3:55Shayle Kann?

  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?

• 4:02Speaker 03

  Oh, brutal, giant, ruthless, and like a meteor from outer space heading our way here in the United States.

• 4:13Shayle Kann?

  But hasn't it hit yet? We're going to talk about this. It's a meteor 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?

• 4:34Speaker 03

  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 export 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.

• 5:17Speaker 03

  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 amassed 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.

• 5:48Shayle Kann?

  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 federal level or at 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?

• 6:32Speaker 03

  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 is 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 to last year, half of them were EVs, half of them were gasoline

• 7:17Speaker 03

  powered vehicles.

• 7:18Shayle Kann?

  Of that capacity in China, how much is EV versus ICE vehicle?

• 7:23Speaker 03

  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.

• 7:34Shayle Kann?

  Okay, so they're exporting in roughly equal measure to what they are producing, about half and half.

• 7:40Speaker 03

  Right.

• 7:41Shayle Kann?

  Where are the exports going mostly?

• 7:43Speaker 03

  Yeah, 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 million cars worldwide. This year, they're on tractor

• 8:23Speaker 03

  export, 12 million cars. 12 billion. That, 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.

• 8:46Shayle Kann?

  Are we the only country that has imposed significant import tariffs on Chinese cars? Is that why we're just the only country that has that policy?

• 8:55Speaker 03

  That's right. 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 is 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.

• 9:28Shayle Kann?

  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? Who are the... There's 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 2010s, it was Suntech. Suntech doesn't really exist anymore. It was Yingli, it was all these other companies, and now it's Longji and a bunch of others. So like, do you see the same kind of turnover?

• 10:09Shayle Kann?

  Or are we going to have more persistent brands in the vehicle world? Because it's more of a consumer product and like they're trying to build up the brand.

• 10:19Speaker 03

  All right. So one of the crazy things, you probably saw this in solar too. So there are dozens and dozens of Chinese carmakers. At last count, there's more than 60, more than 100 individual brands. So you go, wait a second, how can that be? We have the Detroit Three, 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 wanted to still 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 that 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.

• 10:59Speaker 03

  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 this 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 that are 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.

• 11:44Speaker 03

  Now they're saying, oh, look what Tesla's doing to the auto industry globally as a massive disruptor. We'll be the Teslas of China. So you have names like Xiaomi, XPeng, Leap Motor, uh, who else? Neo's in the mix there. And, um, you know, those are the main players in this sort of new Teslas of China category.

• 12:09Shayle Kann?

  In terms of differentiation amongst them, I mean, you know, we have, we have multiple automakers, a smaller number, we have multiple automakers in the US and, 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?

• 12:40Speaker 03

  Oh, there, there's, I think of them as, you know, ever see that picture of like a massive school of, schools of fish all mixed together, shapes, 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'll produce every powertrain. But if I were going to think, try to distill it down, you have really, uh...

• 13:10Speaker 03

  Old generation or your legacy automakers who are dependent on scale and low cost. That's your BYDs and Geelys 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.

• 13:50Shayle Kann?

  You mentioned cost. 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 like, let's talk about the EVs.

• 14:03Speaker 03

  Okay, 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. Cost, 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, the 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.

• 14:48Speaker 03

  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.

• 14:56Shayle Kann?

  Is $10,000 the price or the cost?

• 14:58Speaker 03

  Ah, the cost, no, they'll start with a BYD C 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.

• 15:32Shayle Kann?

  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 is not Chinese and not US-based, or at least not importing enough into the US for it to make up the difference?

• 15:58Speaker 03

  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.

• 16:39Speaker 03

  One is Nissan and the other is Stellantis, the group that owns 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 now in Europe. Enormous pressure on the existing automakers just to stay alive.

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• 19:23Shayle Kann?

  Let's talk about autonomy for a second. Where does autonomy fit into the mix in China? You know, obviously in the US, we have Waymo, we have the Tesla robot taxi coming. There are others like Zooks who are starting to arrive in some cities. Is China seem ahead, behind? Is it part of the export strategy? Or is it not? Like, where does autonomy fit?

• 19:46Speaker 03

  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

• 20:31Speaker 03

  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.

• 20:52Shayle Kann?

  The other thing that I think is interesting is what's happening in the US with autonomy is you can't today, 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 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.

• 21:28Shayle Kann?

  In China than we see in the US. Again, Tesla FSD notwithstanding.

• 21:32Speaker 03

  Definitely company like Xpung, 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 purchases of their vehicles which which have advanced autonomous features. So if that breaks out in China, it's 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.

• 22:17Speaker 03

  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.

• 22:39Shayle Kann?

  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?

• 22:49Speaker 03

  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 LA, 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 can 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.

• 23:31Speaker 03

  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.

• 23:41Shayle Kann?

  Okay, let's get a little closer to home and start with the, our neighbors to the north and to the south. So you mentioned Canada got rid of its 100% 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?

• 24:00Speaker 03

  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's been the single largest destination of Chinese exports. So much so, the United States said, hey, what the hell's going on down there, guys? You're letting all these Chinese cars in. I was recently in Mexico City. You see dozens of brands, there's 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

• 24:42Speaker 03

  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 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 launchpad 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.

• 25:23Speaker 03

  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, by next week, we'll start to see the first batch. And guess what? The first batch is actually Teslas 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.

• 25:53Shayle Kann?

  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?

• 26:30Speaker 03

  I really appreciate 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 that under $10,000 vehicle that's sold in China would not qualify for registration in the United States on safety and probably on overall emissions, depending on if it's PH EV or EV, but mainly safety homologation is not there. So, for example, that same Seagull that's 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?

• 27:15Speaker 03

  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, the 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 midsize pickup truck called the Shark. It's aimed directly at the Tacoma and the Ranger.

• 27:57Speaker 03

  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 program, uh, 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

• 28:39Speaker 03

  and it may or may not be solving our affordability program. No, actually, they want to get the profits.

• 28:45Shayle Kann?

  Right. So, so particularly with 100% tariff, they're, 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?

• 28:59Speaker 03

  That's right. We, here in San Diego, we'll 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, you can imagine the 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, El, 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

• 29:41Speaker 03

  a pretty good-looking car. I want one of those. There'll be even more pressure on the US to let them in.

• 29:48Shayle Kann?

  We talk about cybersecurity for a second. I mean, you know, we've already, we, 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, um, taking over the market? Like, how have other countries dealt with that?

• 30:18Speaker 03

  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.

• 30:32Speaker 03

  Uh, I can't think, Canada, bring them in. So Mexico, that's fine, Brazil, no problem with the China. So what's going on here? I feel as though the United States understands that it's engaged in a knock down, 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. Uh, and, 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.

• 31:17Speaker 03

  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're, 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. And a few cities at the same time, and there would be panics fill across the United States. So I feel it's much more a case of how vulnerable we feel, how much we have to lose.

• 31:57Speaker 03

  Uh, whereas other countries go, China's not really going to go that, go that way with us.

• 32:03Shayle Kann?

  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're 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 contexts. Is that basically where we're headed?

• 32:40Speaker 03

  Well, potentially, but I think realistically, it's like gravity or water. The Chinese are going to find a way in and maybe by acquiring Stellantis or a Nissan or a plant inside or re-badging. 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 has decided both houses, the administrative, no, no TikTok, ban, not coming in. Here we are a year later. Oh, yeah, TikTok's going to stay.

• 33:23Speaker 03

  It'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.

• 33:40Shayle Kann?

  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?

• 33:49Speaker 03

  Gosh, oh, yeah. So two of my favorites. One is the Xiaomi SU7 or XU7. So Xiaomi's 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 this Zeeker. 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.

• 34:31Speaker 03

  Other Chinese automakers are going to shoot me for stopping there, but you got to have your top two. And there's other, other very impressive cars up there, but those would be the top two.

• 34:41Shayle Kann?

  All right, Michael, this was a lot of fun. Thank you so much for the time.

• 34:44Speaker 03

  Yeah, thank you. Great, great joining you today.

• 34:49Shayle Kann?

  Michael Dunn is the CEO of Dunn Insights. This 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-Levenson. Mixing and theme song by Sean Markwan. Anne Bailey edits the video version of the show. Stephen Lacey is our executive editor. I'm Shao Khan, and this is Catalyst.