May 14, 2025 • 25 mins
In early 2021, smartphone and electronics maker Xiaomi was blacklisted by Washington, restricting its access to US technology and investors. Although this decision was later reversed, it motivated CEO and founder Lei Jun to enter China's ultra-competitive electric vehicle market, pledging to invest $10 billion over a decade. The bold move has paid off: in China, buyers are waiting up to 10 months to purchase Xiaomi's SU7, and the company's shares have surged more than 150% in the past year.
How did a manufacturer of cheap smartphones and budget appliances create one of the most desirable vehicles in China in just three years? And can Xiaomi continue to deliver on high investor expectations and stand out from its competitors with the launch of its new YU7 model this summer? Bloomberg Intelligence analysts Joanna Chen and Steven Tseng join John Lee on the Asia Centric podcast.
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Speaker 1 (00:02):
China dominates the electric vehicle market. BYD has overtaken Tesla
as the world's largest EV maker, and now almost two
out of every three EV sold globally and made by
Chinese companies. But what may surprise listeners is that the
most in demand EV model in China is not made
(00:22):
by Tesla or BYD. It's actually made by Chaomi, the
company best known for making budget smartphones and other consumer
electronic devices. How did Chami create arguably the coolest EV
in China, What differentiates its car from its competitors, and importantly,
can the company continue to deliver on high expectations with
(00:44):
its share price rising over one hundred and seventy percent
of the last twelve months. You're listening to Asia Centric
from Bloomberg Intelligence. I'm John Lee in Hong Kong. This week,
we've got two analysts from Bloomberg Intelligence. We have Johanna
Chen she looks at the auto, and stevens Son looks
like technology. Joanna and Stephen Welcome to the show.
Speaker 2 (01:05):
Hi John, Thanks for having me, Hi John, Thanks glad
to be.
Speaker 1 (01:08):
Here, Joanna. Most of our listeners live outside of mainland China,
so they probably don't even know that Shallmi makes electric vehicles,
just tell the audience how popular is the EV in China.
Speaker 2 (01:21):
So basically Shaomi was pretty much very new to the market.
The shawms first EV only started its debut and also
delivery back in April last year, and then shall Me
manage to deliver over two hundred thousand units of those
Su seven vehicles in China, and that makes the Su'
(01:44):
saving now one of the most popular EV's and ranking.
I think it's among the top five model in the
Chinese EV market. So it is like the company keeps
beating its targets. And also the wait times are very
long and contry. Apparently they're willing to wait for this
new vehicle. That makes the show Me as you saying,
(02:05):
and also possibly the upcoming next new model very popular
in the Chinese EV market.
Speaker 1 (02:10):
So if you were to order a show Me model
right now, how long will it take?
Speaker 2 (02:16):
So that's a very interesting thing. Right now, if you
want to order a shaw Me car, you have to
wait about nine to ten months, that's how long the
waitlist is getting. And in comparison, if you order a
Tesla you can probably get it under two to four
five weeks. In general, the EV in China, you only
need to wait for a month, but show me, that's
(02:36):
very long waitlist, nine to ten months.
Speaker 1 (02:39):
And I just wanted to confirm this is due to
the high demand and not due to limited supply.
Speaker 2 (02:44):
One hundred percent correct. So originally when the show Me
car first debut, the weight list was about six to
a month, and now it's getting even longer nine to
ten and people are wondering is it because of their
too slow in production ramps, just as Tesla did. But
back in like twenty seventeen, when Tesla first started to
remp up the production of its Model three, its first
(03:07):
volume car model, as Elon Mask said himself, it was
a production hell. There were issues from supply chains to
manufacturing logistics, shipping, customer experience management. But for shall Me,
it seems come pretty natural. And also we didn't hear
any major issues during the ramp up pace in terms
(03:30):
quality are also good. The ramp up speed.
Speaker 1 (03:33):
Is also good.
Speaker 2 (03:34):
It managed to get to like twenty thousand monthly deliveries
in just like nine months. So for shall Me, we're
saying that it's really the consumer demand that is too
high and that's dragging the way times longer and even
though they are ramping up the production pretty quick. Even
(03:56):
though they are beating their sales volume target. Still the
way times are longer and longer. And hopefully with the
second factory coming up in Beijing soon, we'll see the
wait list getting shorter and consumers will be able to
get their car deliver quicker, and then that will draw
more consumers to place orders because they don't have to
wait that long for a car anymore.
Speaker 1 (04:17):
Joina, What makes shall mes Su seven models so popular
and how does it differentiate from its peers.
Speaker 2 (04:24):
So the first thing is it's a really cool car
if you look at the exterior design, and of course
there's some resemblance to the Porsche model.
Speaker 1 (04:36):
You're talking about that Porsche Tyken.
Speaker 2 (04:38):
Yes, right, but still it's a very cool car and
the boat colors with bright blue, bright pink, the purple,
and people love it, especially the younger generation and especially
the female drivers. They are so into the Shell Me
Su seven car. So it's a cool car, and also
it has a very smart market positioning. It's a little
(05:01):
bit affordable, more affordable than the Tesla model.
Speaker 1 (05:04):
Which one you're talking about, the Model three, Yes, the.
Speaker 2 (05:06):
Model three, because both are sedan car it's a little
bit more affordable than Tesla Model three, but it comes
with greater room and also more smart tech functions for free.
For example, you have to pay everything extra for Tesla
if you want to get the ONUS driving functions, if
you want to get the better connectivity functions, but in
(05:28):
a shall Me car, most of them are free. Also
if you're compared to bid Byde's main battleground is actually
the mass market where cars are more like priced lower
and also with less amenities. But for shall Me car,
basically it kind of like avoided direct competition with BYD
(05:49):
while it gives a consumers more offerings versus.
Speaker 1 (05:53):
A Tesla car.
Speaker 2 (05:54):
And also I think the second thing that's very important
is that the brand value. People recognize the shell me brand,
the shehll me name, people like the CEO Laging. So
the brand value of shall Me is We've never seen
this in any other Chinese even maker. You know, it
takes bid almost a decade to build up its brand
(06:18):
value in China, but for show me, they can just
transfer it from the smartphone space to the EV space.
Speaker 1 (06:25):
And I wanted to just elaborate on one thing you mentioned.
It is cheaper than the Model three by Tesla. But
it's not a budget car in any stretch of the
means right.
Speaker 2 (06:35):
Now, it's not a budget car. If it's a budger car,
then it will face direct competition with BID. So shell
Me was smart enough to price its vehicles and also
position it's vehicles in this we call me to high
end market in China so that you don't go directly
with BID and face its like fierce competition.
Speaker 1 (06:55):
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(07:18):
If you like what you're hear, don't forget to subscribe
and share. Steven, I want to get some background on
show me as a company. Now most people know this
as a maker of I would say budget smartphones. I
also make some cool electronic devices as well. What made
the company get into evs?
Speaker 3 (07:38):
Actually that's an interesting switch because what happens actually back
to early twenty twenty one when the US Garment actually
puts me on the sanctioned list, meaning that show me
can sell anything in the US, and the company had
the urgent board meeting, and during the meeting, one of
the board members say, if we couldn't sell a smartphone,
(08:03):
what would be our alternative? And then so people kind
of brainstorm me, and then some people say, wait, why
not making EV? So there was obviously a bole idea,
and Leging was not on board immediately because he was hesitant.
But then he did some homework, he checked with some
of his friends, did some study, and then even chated
(08:25):
with son of the EV maker in China, and after
a few weeks he made a decision that okay, we're
going to make EV. So that's basically how it starts.
And then obviously spent a lot of the resources and
he basically lead the project. I think they actually sent
a message to the organization that they're serious in this
(08:47):
endeavor apparently is new, so they are studying what other
global companies are doing. And then they leveraged a lot
of the supply chain in China. Obviously China already has
a pretty comprehensive supply chain for electric vehicle at that
point of time, even though shell me is new, but
(09:08):
they can basically tap to those resources. And the other
thing I think is also important, I think is because
the government support in China. Obviously the new energy vehicle
is one of the major industry or more focus based
on the China's twenty twenty five initiative, the Chinese government
is willing to support shell means initiative. Actually, the company
(09:31):
baic was initially the major partner to handle the manufacturing
for shell Me's vehicle before shall Me had its own
capacity for vehicle. Those are I think the thing that
why shell me is able to establish their even business
from scratch. But other than that, the company also coming
(09:52):
about ten billion remen b in this whole R and D.
They are actually developing their own technology for electric motors,
for alloy. They even have a pattern for their own
alloy and also the casting. Also the office is so
software ecosystem, which they leveraged their strengths in their electronic
(10:15):
device business, so they are able to put everything together
to this new electronic vehicle business.
Speaker 1 (10:22):
Stephen Apple famously or they had an open secret pretty
much that they wanted to develop electric vehicle for over
a decade, but they gave up on their plans. Are
you surprised at a company like Shelmi was able to
create an electric vehicle in three years and it was
pretty much a success. It was a home run in
their first try.
Speaker 3 (10:43):
As I mentioned, the whole thing of this developing EV
business for Shelm is really because the under pressure they
have this crisis or survival because if they are not
able to sell smartphone, they basically get over for the company. Right,
So that's actually the big pressure for the company. We
have to say. I mean Apple is never under such pressure,
(11:05):
So I guess that's a huge difference. Also, I think
show me itself, once they make a decision of making EV,
they're actually committed to that goal. Because one example is
that most of the top managements show me at this
point they actually has the driver license for the fine
racing car. Because Laging itself, when he startied this EV business,
(11:29):
he found out that most of the major leading auto
company in the world, all the top management are all
big fan of fin racing cars. So he says, Okay,
if we want in this business, we have to do
this right. You have to really have the passion for
the speed for the car, for the vehicle, so they
do that. I'm not sure if other auto companies in
(11:51):
China are actually doing the same thing, but this actually
is an example showing that they're really committed to what
they're doing.
Speaker 1 (12:00):
Even what's driving the share price. Is it the EV
side or is it the consumer electronic side.
Speaker 3 (12:05):
It's definitely on EV side. I mean, obviously they're doing
great in their smartphone business. They post a very strong
growth over the past two years. But EV, it's no
doubt that people actually has a very highest petition on
EV business, which is why the valuation actually at some
points are even more expensive than the EV pers in China.
(12:29):
We did have a note Elaradier mentioned about their EV
valuation may not necessarily sustainable at that point because at
one point they're actually traded like a six to seven
ties price to seals will by it is only like
one to two ties. Well, now the share price office
is corrected and valuation wise it become more reasonable. But
(12:52):
then people are obviously waiting for the next model and
hopefully they can maintain their momentum.
Speaker 1 (13:01):
And can you give us some background on the chairman
the founder Leijun for the Western audience. Leijiuon is almost
known as the Steve Jobs of China. Would you say
it's his reputation, Yes, he would draw the comparison. Yes,
he's got a bit of a cult following in China,
especially in social media. Tell us his background, Yes, I
think before show Me he he already is a pretty
(13:24):
well known entrepreneur.
Speaker 3 (13:25):
He's chairman of Kingsoft, which is one of the major
software companies in China. Also, I think he found an
e commerce website which was later on acquired by Amazon.
So before he founded show Me, he has been a
very experienced its manewer enjoy investors in China. And when
he founded shell Me, he never considered show Me to
(13:46):
be a horwad company. He considered showing Me to be
an internet company. So he focused a lot on the office,
the ecosystem software, and then, as you mentioned in the
social media, we are very good in promoting the product
or promoting some idea through social media. To the fame
(14:08):
based building, you must have hurt the me fans, which
are actually very enthusiastic about all the sham prada and
obviously to some stand that kind of enthusiasm also extends
into the chairman Beijing. So the whole thing obviously be
kind of important assets for showing when they move into
(14:28):
new business, and EV obviously is a clear example that
they can actually put us off with a relative period
time because of that.
Speaker 2 (14:37):
Yes, and actually that really helped on the marketing side
for the s U seven because under this hyper competitive
environment of China's even market, all the automakers are trying
so hard and spend so much money on marketing and
show me with like laging quite vocal on social media,
got a huge amount of followers on social media, and
(14:58):
that kind of helped promote the popularity of the Su
seven and people going on social media checking out the cars,
and then they go to the retail stores trying to
get a test drive, and some of them even before
they get a test drive, they will place orders for
the Su seven. That's how popular it is now.
Speaker 1 (15:14):
Joanna, you alluded to the fact that it's really competitive
to trying to make it EV successful in China. I
think there's over one hundred electric vehicles companies right now.
Now you just went to the Shanghai order show. Tell us, like,
what are the differentiating factors right now for Chinese evs?
Can companies actually differentiate themselves.
Speaker 2 (15:35):
That's a really good question. So it's getting more and
more difficult for EV companies to differentiate themselves. And you know,
the technologies are improving so fast. Most of the even
models they claim to have fast charging capabilities, they are
seeing their owns driving capabilities improving. And if you look
at the exterior and also interior design, it's getting more
(15:58):
similar or going for there's futuristic and text savvy looks,
so that's why it's getting more and more difficult. And
shall Me car really stands out because of the very
cool design, the boat colors, the sports car feeling vibe.
And if you look at the crowd, even though Leiging
wasn't there at the Shanghai Auto Show, shall Miss booth
(16:21):
still get the largest crowd. If you go in the
afternoon when all the people crowd into the venue, you
have to wait like thirty minutes to get into the
show me both and you can hardly see the car
because there were so many people in the booths surrounding
the vehicles checking it out inside out. We can definitely
tell even though Leiging wasn't there, it's the busiest booth
(16:45):
among all the venues. At the Shanghai Auto Show.
Speaker 1 (16:48):
And you just mentioned the fast charging av batteries, Now
what's the latest. There was big use that BYD launched
a battery that can fully recharge in five minutes. That's
an amazing step.
Speaker 2 (17:00):
Yes, so b why they launched its fast charging even
battery technology, you know, like four hundred kilometers under five
minutes of charge. And then you know, say, atl the
largest battery maker in China, also launched its fast charging
battery just one months later, saying that it can charge
to five hundred kilometers under five minutes. So you can tell,
(17:22):
like how fast the technologies are involving in China, and
automakers they have to keep up. They have to go
with really fast R and D and technology innovation and
also upgrading their products pretty fast to stay competitive in
the market and keep attracting consumers.
Speaker 1 (17:43):
And let's talk about the future.
Speaker 3 (17:45):
Now.
Speaker 1 (17:45):
They've just got one model right now. To give listeners
some background, shallmy's share prices being one of the best
in the Hangsing index and I've mentioned before it's up
one hundred and seventy percent over the last twelve months.
They are launching a model, a new model in the
next few months. What's the latest.
Speaker 2 (18:02):
Yes, so currently the SU seven is a sedan model
and then Shami will soon launch its next suv model
between June and July. And so far what we know
is that the SU seven also has a pretty cool
exterior design. Again, very cool color offerings, and the size
(18:22):
is also like a miss size suv that comes a
little bit larger than Tesla, but probably the market is
expecting slightly lower prices so make the car more attractive
to consumers. Unfortunately, we didn't see the Yu seven being
displayed at the Shanghai Auto Show, so what we're only
(18:42):
seen so far are the commercials on social media. But
we'll get to see the car pretty soon.
Speaker 1 (18:48):
And Steven, given the fact that Shami is a technology company,
does that give it an added benefit or an advantage
over Piece in terms of AI autonomous driving and its
operating system?
Speaker 3 (18:58):
I think so. I mean, if you compare to the
existing autol maker, obviously they have this creative image as
a technology company, and if you compare to the new
start up in the EV market, show me even though
they are new in EV, but they do have the
(19:20):
clear try records in the smartphone business and also they
have a very strong brain recognition, So those are the
advantage versus those new EV startups. So obviously they're in
a very good position now. As long as they make
the product right, they are actually will be able to
make a very clear impact in the market, which is
(19:42):
basically what s U seven is still in now. And
then going forward, I think as long as they keep
the pace of launching a new product, they are able
to become a very solid player in this very competitive market.
Speaker 1 (19:56):
And when are we going to say, show me cars
in other countries?
Speaker 3 (20:00):
Obviously this is on their to do lists. Legend does
say that they are definitely going to launch the product overseas.
I think it is said that they want to sell
the product in Europe by twenty thirty, and I think
we won't be surprised if we see Shamis EV to
be sold in some Asian countries. But they are obviously
(20:22):
very careful in executing this overseas expansion. Obviously they want
to understand the market before they actually devoted resources there.
At the moment, I think they will launch their EV
in those countries where Shami's smartphone actually has a high
market share because they can actually leverage the channel there.
(20:43):
So I guess that's what has happening actually, and they
already set up an R and D and design center
in Germany. Even though it's very early stage, you can
tell that that they're very serious in overseas expansion.
Speaker 2 (20:58):
And let's not forget consumers in China are still waiting
nine to ten months for the shall Me cars, so
they definitely have to feel the domestic demand first before
really going abroad getting the capacity enough for overseas expansion.
Speaker 1 (21:13):
The story has been all very positive, but I wanted
to focus on the other side. A couple of things.
What's the build quality, like really shell Me versus say,
you know European or Tesla.
Speaker 2 (21:26):
Well, that's a tough one. Well, people have their own opinions.
But from my personal opinion, obviously compared to the Europeans
who have built the cars for so many, so many years,
a new startup like shall Me, it will be very
difficult to match the same craftsmanship you're seeing probably in
(21:50):
a German car. Well, it shouldn't come.
Speaker 1 (21:53):
As a surprise much cheaper.
Speaker 2 (21:54):
Yes, yes, and also like the cheaper so if you
look at the interior and and also some like very details,
probably you don't see the bill quality as that good
as a German car, but still like we don't hear
a lot of complaints from the Shami car. People are
(22:16):
overall satisfied with the quality of their manufacturing and we
don't see like major issues being reported on the manufacturing side.
Speaker 1 (22:25):
And Stephen, the share price had a big correction earlier
this year, though it has recovered somewhat, and this was
on the back of a tragic accident. Can you give
us some details of that accident and it seems like
it hasn't really impacted business, you know, tell.
Speaker 3 (22:40):
Us, Yeah, I think there's obviously something to do with
a very unfortunate accident of three college girls. Basically, the
cars at the crash and burn into flame, and somehow
the door was locked so those girls can knock it
out and hence the tragedy. Obviously, now the scenes are
under investigation. But then, like you said, it didn't really
(23:04):
have any material impact on the EV demand, and we
do see similar assident for other major brand like Testla
for example. They also have such accidant from time to time.
So maybe people are not necessarily right off show me
as an EV brand because of that issue, but certainly
that can be an issue. I mean, going forward, if
(23:27):
that happened again or a similar situations happen again, then
you know the company may be under bigger pressure. Hopefully
it won't happen again, but going forward, I think the
company right now just have one model, but when they
start to expand their product line up, definitely the card
users that we have scrutiny on their quality, safety tray record. Yeah,
(23:51):
so that's definitely something that we need to keep an
eye on.
Speaker 1 (23:54):
Okay, before I let you go, I wanted to ask Joanna,
would you buy show Me EV?
Speaker 3 (24:00):
Yes?
Speaker 2 (24:01):
Absolutely yes, because it's a cool car. It's very cool
and comes with a range that I can afford.
Speaker 1 (24:08):
And Stephen, what's your honest opinion if you had to
buy a Chinese EV, which one would it be?
Speaker 3 (24:14):
Yes? I would definitely show Me. I mean certainly looks
very kind of like a smartphone. Rang this cool product
with value. Also, I think a lot of the integration
in their product which tightly integrate with their product ecosystem,
So I think I definitely I'd like to experience that
ecosystem myself.
Speaker 1 (24:34):
Yeah, okay, I would personally buy the Essayiics Maxis car,
but that's a family car, probably a reflection of myself
rather than anything else.
Speaker 2 (24:44):
Well, I have to say the Maxis MPV are very comfortable.
Speaker 1 (24:47):
Okay, that's a great way to end the show. Joanna Steven,
thanks for joining, Thanks for having us. Thank you you've
been listening to Age Eccentric from Bloomberg Intelligence. I'm John
Lely in Hong Kong. You can find with all our
episodes on Apple Podcasts, Spotify, or wherever you listen. This
podcast was also produced by Clara Chan and thanks for listening.
China dominates the electric vehicle market. BYD has overtaken Tesla
as the world's largest EV maker, and now almost two
out of every three EV sold globally and made by
Chinese companies. But what may surprise listeners is that the
most in demand EV model in China is not made
(00:22):
by Tesla or BYD. It's actually made by Chaomi, the
company best known for making budget smartphones and other consumer
electronic devices. How did Chami create arguably the coolest EV
in China, What differentiates its car from its competitors, and importantly,
can the company continue to deliver on high expectations with
(00:44):
its share price rising over one hundred and seventy percent
of the last twelve months. You're listening to Asia Centric
from Bloomberg Intelligence. I'm John Lee in Hong Kong. This week,
we've got two analysts from Bloomberg Intelligence. We have Johanna
Chen she looks at the auto, and stevens Son looks
like technology. Joanna and Stephen Welcome to the show.
Speaker 2 (01:05):
Hi John, Thanks for having me, Hi John, Thanks glad
to be.
Speaker 1 (01:08):
Here, Joanna. Most of our listeners live outside of mainland China,
so they probably don't even know that Shallmi makes electric vehicles,
just tell the audience how popular is the EV in China.
Speaker 2 (01:21):
So basically Shaomi was pretty much very new to the market.
The shawms first EV only started its debut and also
delivery back in April last year, and then shall Me
manage to deliver over two hundred thousand units of those
Su seven vehicles in China, and that makes the Su'
(01:44):
saving now one of the most popular EV's and ranking.
I think it's among the top five model in the
Chinese EV market. So it is like the company keeps
beating its targets. And also the wait times are very
long and contry. Apparently they're willing to wait for this
new vehicle. That makes the show Me as you saying,
(02:05):
and also possibly the upcoming next new model very popular
in the Chinese EV market.
Speaker 1 (02:10):
So if you were to order a show Me model
right now, how long will it take?
Speaker 2 (02:16):
So that's a very interesting thing. Right now, if you
want to order a shaw Me car, you have to
wait about nine to ten months, that's how long the
waitlist is getting. And in comparison, if you order a
Tesla you can probably get it under two to four
five weeks. In general, the EV in China, you only
need to wait for a month, but show me, that's
(02:36):
very long waitlist, nine to ten months.
Speaker 1 (02:39):
And I just wanted to confirm this is due to
the high demand and not due to limited supply.
Speaker 2 (02:44):
One hundred percent correct. So originally when the show Me
car first debut, the weight list was about six to
a month, and now it's getting even longer nine to
ten and people are wondering is it because of their
too slow in production ramps, just as Tesla did. But
back in like twenty seventeen, when Tesla first started to
remp up the production of its Model three, its first
(03:07):
volume car model, as Elon Mask said himself, it was
a production hell. There were issues from supply chains to
manufacturing logistics, shipping, customer experience management. But for shall Me,
it seems come pretty natural. And also we didn't hear
any major issues during the ramp up pace in terms
(03:30):
quality are also good. The ramp up speed.
Speaker 1 (03:33):
Is also good.
Speaker 2 (03:34):
It managed to get to like twenty thousand monthly deliveries
in just like nine months. So for shall Me, we're
saying that it's really the consumer demand that is too
high and that's dragging the way times longer and even
though they are ramping up the production pretty quick. Even
(03:56):
though they are beating their sales volume target. Still the
way times are longer and longer. And hopefully with the
second factory coming up in Beijing soon, we'll see the
wait list getting shorter and consumers will be able to
get their car deliver quicker, and then that will draw
more consumers to place orders because they don't have to
wait that long for a car anymore.
Speaker 1 (04:17):
Joina, What makes shall mes Su seven models so popular
and how does it differentiate from its peers.
Speaker 2 (04:24):
So the first thing is it's a really cool car
if you look at the exterior design, and of course
there's some resemblance to the Porsche model.
Speaker 1 (04:36):
You're talking about that Porsche Tyken.
Speaker 2 (04:38):
Yes, right, but still it's a very cool car and
the boat colors with bright blue, bright pink, the purple,
and people love it, especially the younger generation and especially
the female drivers. They are so into the Shell Me
Su seven car. So it's a cool car, and also
it has a very smart market positioning. It's a little
(05:01):
bit affordable, more affordable than the Tesla model.
Speaker 1 (05:04):
Which one you're talking about, the Model three, Yes, the.
Speaker 2 (05:06):
Model three, because both are sedan car it's a little
bit more affordable than Tesla Model three, but it comes
with greater room and also more smart tech functions for free.
For example, you have to pay everything extra for Tesla
if you want to get the ONUS driving functions, if
you want to get the better connectivity functions, but in
(05:28):
a shall Me car, most of them are free. Also
if you're compared to bid Byde's main battleground is actually
the mass market where cars are more like priced lower
and also with less amenities. But for shall Me car,
basically it kind of like avoided direct competition with BYD
(05:49):
while it gives a consumers more offerings versus.
Speaker 1 (05:53):
A Tesla car.
Speaker 2 (05:54):
And also I think the second thing that's very important
is that the brand value. People recognize the shell me brand,
the shehll me name, people like the CEO Laging. So
the brand value of shall Me is We've never seen
this in any other Chinese even maker. You know, it
takes bid almost a decade to build up its brand
(06:18):
value in China, but for show me, they can just
transfer it from the smartphone space to the EV space.
Speaker 1 (06:25):
And I wanted to just elaborate on one thing you mentioned.
It is cheaper than the Model three by Tesla. But
it's not a budget car in any stretch of the
means right.
Speaker 2 (06:35):
Now, it's not a budget car. If it's a budger car,
then it will face direct competition with BID. So shell
Me was smart enough to price its vehicles and also
position it's vehicles in this we call me to high
end market in China so that you don't go directly
with BID and face its like fierce competition.
Speaker 1 (06:55):
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(07:18):
If you like what you're hear, don't forget to subscribe
and share. Steven, I want to get some background on
show me as a company. Now most people know this
as a maker of I would say budget smartphones. I
also make some cool electronic devices as well. What made
the company get into evs?
Speaker 3 (07:38):
Actually that's an interesting switch because what happens actually back
to early twenty twenty one when the US Garment actually
puts me on the sanctioned list, meaning that show me
can sell anything in the US, and the company had
the urgent board meeting, and during the meeting, one of
the board members say, if we couldn't sell a smartphone,
(08:03):
what would be our alternative? And then so people kind
of brainstorm me, and then some people say, wait, why
not making EV? So there was obviously a bole idea,
and Leging was not on board immediately because he was hesitant.
But then he did some homework, he checked with some
of his friends, did some study, and then even chated
(08:25):
with son of the EV maker in China, and after
a few weeks he made a decision that okay, we're
going to make EV. So that's basically how it starts.
And then obviously spent a lot of the resources and
he basically lead the project. I think they actually sent
a message to the organization that they're serious in this
(08:47):
endeavor apparently is new, so they are studying what other
global companies are doing. And then they leveraged a lot
of the supply chain in China. Obviously China already has
a pretty comprehensive supply chain for electric vehicle at that
point of time, even though shell me is new, but
(09:08):
they can basically tap to those resources. And the other
thing I think is also important, I think is because
the government support in China. Obviously the new energy vehicle
is one of the major industry or more focus based
on the China's twenty twenty five initiative, the Chinese government
is willing to support shell means initiative. Actually, the company
(09:31):
baic was initially the major partner to handle the manufacturing
for shell Me's vehicle before shall Me had its own
capacity for vehicle. Those are I think the thing that
why shell me is able to establish their even business
from scratch. But other than that, the company also coming
(09:52):
about ten billion remen b in this whole R and D.
They are actually developing their own technology for electric motors,
for alloy. They even have a pattern for their own
alloy and also the casting. Also the office is so
software ecosystem, which they leveraged their strengths in their electronic
(10:15):
device business, so they are able to put everything together
to this new electronic vehicle business.
Speaker 1 (10:22):
Stephen Apple famously or they had an open secret pretty
much that they wanted to develop electric vehicle for over
a decade, but they gave up on their plans. Are
you surprised at a company like Shelmi was able to
create an electric vehicle in three years and it was
pretty much a success. It was a home run in
their first try.
Speaker 3 (10:43):
As I mentioned, the whole thing of this developing EV
business for Shelm is really because the under pressure they
have this crisis or survival because if they are not
able to sell smartphone, they basically get over for the company. Right,
So that's actually the big pressure for the company. We
have to say. I mean Apple is never under such pressure,
(11:05):
So I guess that's a huge difference. Also, I think
show me itself, once they make a decision of making EV,
they're actually committed to that goal. Because one example is
that most of the top managements show me at this
point they actually has the driver license for the fine
racing car. Because Laging itself, when he startied this EV business,
(11:29):
he found out that most of the major leading auto
company in the world, all the top management are all
big fan of fin racing cars. So he says, Okay,
if we want in this business, we have to do
this right. You have to really have the passion for
the speed for the car, for the vehicle, so they
do that. I'm not sure if other auto companies in
(11:51):
China are actually doing the same thing, but this actually
is an example showing that they're really committed to what
they're doing.
Speaker 1 (12:00):
Even what's driving the share price. Is it the EV
side or is it the consumer electronic side.
Speaker 3 (12:05):
It's definitely on EV side. I mean, obviously they're doing
great in their smartphone business. They post a very strong
growth over the past two years. But EV, it's no
doubt that people actually has a very highest petition on
EV business, which is why the valuation actually at some
points are even more expensive than the EV pers in China.
(12:29):
We did have a note Elaradier mentioned about their EV
valuation may not necessarily sustainable at that point because at
one point they're actually traded like a six to seven
ties price to seals will by it is only like
one to two ties. Well, now the share price office
is corrected and valuation wise it become more reasonable. But
(12:52):
then people are obviously waiting for the next model and
hopefully they can maintain their momentum.
Speaker 1 (13:01):
And can you give us some background on the chairman
the founder Leijun for the Western audience. Leijiuon is almost
known as the Steve Jobs of China. Would you say
it's his reputation, Yes, he would draw the comparison. Yes,
he's got a bit of a cult following in China,
especially in social media. Tell us his background, Yes, I
think before show Me he he already is a pretty
(13:24):
well known entrepreneur.
Speaker 3 (13:25):
He's chairman of Kingsoft, which is one of the major
software companies in China. Also, I think he found an
e commerce website which was later on acquired by Amazon.
So before he founded show Me, he has been a
very experienced its manewer enjoy investors in China. And when
he founded shell Me, he never considered show Me to
(13:46):
be a horwad company. He considered showing Me to be
an internet company. So he focused a lot on the office,
the ecosystem software, and then, as you mentioned in the
social media, we are very good in promoting the product
or promoting some idea through social media. To the fame
(14:08):
based building, you must have hurt the me fans, which
are actually very enthusiastic about all the sham prada and
obviously to some stand that kind of enthusiasm also extends
into the chairman Beijing. So the whole thing obviously be
kind of important assets for showing when they move into
(14:28):
new business, and EV obviously is a clear example that
they can actually put us off with a relative period
time because of that.
Speaker 2 (14:37):
Yes, and actually that really helped on the marketing side
for the s U seven because under this hyper competitive
environment of China's even market, all the automakers are trying
so hard and spend so much money on marketing and
show me with like laging quite vocal on social media,
got a huge amount of followers on social media, and
(14:58):
that kind of helped promote the popularity of the Su
seven and people going on social media checking out the cars,
and then they go to the retail stores trying to
get a test drive, and some of them even before
they get a test drive, they will place orders for
the Su seven. That's how popular it is now.
Speaker 1 (15:14):
Joanna, you alluded to the fact that it's really competitive
to trying to make it EV successful in China. I
think there's over one hundred electric vehicles companies right now.
Now you just went to the Shanghai order show. Tell us, like,
what are the differentiating factors right now for Chinese evs?
Can companies actually differentiate themselves.
Speaker 2 (15:35):
That's a really good question. So it's getting more and
more difficult for EV companies to differentiate themselves. And you know,
the technologies are improving so fast. Most of the even
models they claim to have fast charging capabilities, they are
seeing their owns driving capabilities improving. And if you look
at the exterior and also interior design, it's getting more
(15:58):
similar or going for there's futuristic and text savvy looks,
so that's why it's getting more and more difficult. And
shall Me car really stands out because of the very
cool design, the boat colors, the sports car feeling vibe.
And if you look at the crowd, even though Leiging
wasn't there at the Shanghai Auto Show, shall Miss booth
(16:21):
still get the largest crowd. If you go in the
afternoon when all the people crowd into the venue, you
have to wait like thirty minutes to get into the
show me both and you can hardly see the car
because there were so many people in the booths surrounding
the vehicles checking it out inside out. We can definitely
tell even though Leiging wasn't there, it's the busiest booth
(16:45):
among all the venues. At the Shanghai Auto Show.
Speaker 1 (16:48):
And you just mentioned the fast charging av batteries, Now
what's the latest. There was big use that BYD launched
a battery that can fully recharge in five minutes. That's
an amazing step.
Speaker 2 (17:00):
Yes, so b why they launched its fast charging even
battery technology, you know, like four hundred kilometers under five
minutes of charge. And then you know, say, atl the
largest battery maker in China, also launched its fast charging
battery just one months later, saying that it can charge
to five hundred kilometers under five minutes. So you can tell,
(17:22):
like how fast the technologies are involving in China, and
automakers they have to keep up. They have to go
with really fast R and D and technology innovation and
also upgrading their products pretty fast to stay competitive in
the market and keep attracting consumers.
Speaker 1 (17:43):
And let's talk about the future.
Speaker 3 (17:45):
Now.
Speaker 1 (17:45):
They've just got one model right now. To give listeners
some background, shallmy's share prices being one of the best
in the Hangsing index and I've mentioned before it's up
one hundred and seventy percent over the last twelve months.
They are launching a model, a new model in the
next few months. What's the latest.
Speaker 2 (18:02):
Yes, so currently the SU seven is a sedan model
and then Shami will soon launch its next suv model
between June and July. And so far what we know
is that the SU seven also has a pretty cool
exterior design. Again, very cool color offerings, and the size
(18:22):
is also like a miss size suv that comes a
little bit larger than Tesla, but probably the market is
expecting slightly lower prices so make the car more attractive
to consumers. Unfortunately, we didn't see the Yu seven being
displayed at the Shanghai Auto Show, so what we're only
(18:42):
seen so far are the commercials on social media. But
we'll get to see the car pretty soon.
Speaker 1 (18:48):
And Steven, given the fact that Shami is a technology company,
does that give it an added benefit or an advantage
over Piece in terms of AI autonomous driving and its
operating system?
Speaker 3 (18:58):
I think so. I mean, if you compare to the
existing autol maker, obviously they have this creative image as
a technology company, and if you compare to the new
start up in the EV market, show me even though
they are new in EV, but they do have the
(19:20):
clear try records in the smartphone business and also they
have a very strong brain recognition, So those are the
advantage versus those new EV startups. So obviously they're in
a very good position now. As long as they make
the product right, they are actually will be able to
make a very clear impact in the market, which is
(19:42):
basically what s U seven is still in now. And
then going forward, I think as long as they keep
the pace of launching a new product, they are able
to become a very solid player in this very competitive market.
Speaker 1 (19:56):
And when are we going to say, show me cars
in other countries?
Speaker 3 (20:00):
Obviously this is on their to do lists. Legend does
say that they are definitely going to launch the product overseas.
I think it is said that they want to sell
the product in Europe by twenty thirty, and I think
we won't be surprised if we see Shamis EV to
be sold in some Asian countries. But they are obviously
(20:22):
very careful in executing this overseas expansion. Obviously they want
to understand the market before they actually devoted resources there.
At the moment, I think they will launch their EV
in those countries where Shami's smartphone actually has a high
market share because they can actually leverage the channel there.
(20:43):
So I guess that's what has happening actually, and they
already set up an R and D and design center
in Germany. Even though it's very early stage, you can
tell that that they're very serious in overseas expansion.
Speaker 2 (20:58):
And let's not forget consumers in China are still waiting
nine to ten months for the shall Me cars, so
they definitely have to feel the domestic demand first before
really going abroad getting the capacity enough for overseas expansion.
Speaker 1 (21:13):
The story has been all very positive, but I wanted
to focus on the other side. A couple of things.
What's the build quality, like really shell Me versus say,
you know European or Tesla.
Speaker 2 (21:26):
Well, that's a tough one. Well, people have their own opinions.
But from my personal opinion, obviously compared to the Europeans
who have built the cars for so many, so many years,
a new startup like shall Me, it will be very
difficult to match the same craftsmanship you're seeing probably in
(21:50):
a German car. Well, it shouldn't come.
Speaker 1 (21:53):
As a surprise much cheaper.
Speaker 2 (21:54):
Yes, yes, and also like the cheaper so if you
look at the interior and and also some like very details,
probably you don't see the bill quality as that good
as a German car, but still like we don't hear
a lot of complaints from the Shami car. People are
(22:16):
overall satisfied with the quality of their manufacturing and we
don't see like major issues being reported on the manufacturing side.
Speaker 1 (22:25):
And Stephen, the share price had a big correction earlier
this year, though it has recovered somewhat, and this was
on the back of a tragic accident. Can you give
us some details of that accident and it seems like
it hasn't really impacted business, you know, tell.
Speaker 3 (22:40):
Us, Yeah, I think there's obviously something to do with
a very unfortunate accident of three college girls. Basically, the
cars at the crash and burn into flame, and somehow
the door was locked so those girls can knock it
out and hence the tragedy. Obviously, now the scenes are
under investigation. But then, like you said, it didn't really
(23:04):
have any material impact on the EV demand, and we
do see similar assident for other major brand like Testla
for example. They also have such accidant from time to time.
So maybe people are not necessarily right off show me
as an EV brand because of that issue, but certainly
that can be an issue. I mean, going forward, if
(23:27):
that happened again or a similar situations happen again, then
you know the company may be under bigger pressure. Hopefully
it won't happen again, but going forward, I think the
company right now just have one model, but when they
start to expand their product line up, definitely the card
users that we have scrutiny on their quality, safety tray record. Yeah,
(23:51):
so that's definitely something that we need to keep an
eye on.
Speaker 1 (23:54):
Okay, before I let you go, I wanted to ask Joanna,
would you buy show Me EV?
Speaker 3 (24:00):
Yes?
Speaker 2 (24:01):
Absolutely yes, because it's a cool car. It's very cool
and comes with a range that I can afford.
Speaker 1 (24:08):
And Stephen, what's your honest opinion if you had to
buy a Chinese EV, which one would it be?
Speaker 3 (24:14):
Yes? I would definitely show Me. I mean certainly looks
very kind of like a smartphone. Rang this cool product
with value. Also, I think a lot of the integration
in their product which tightly integrate with their product ecosystem,
So I think I definitely I'd like to experience that
ecosystem myself.
Speaker 1 (24:34):
Yeah, okay, I would personally buy the Essayiics Maxis car,
but that's a family car, probably a reflection of myself
rather than anything else.
Speaker 2 (24:44):
Well, I have to say the Maxis MPV are very comfortable.
Speaker 1 (24:47):
Okay, that's a great way to end the show. Joanna Steven,
thanks for joining, Thanks for having us. Thank you you've
been listening to Age Eccentric from Bloomberg Intelligence. I'm John
Lely in Hong Kong. You can find with all our
episodes on Apple Podcasts, Spotify, or wherever you listen. This
podcast was also produced by Clara Chan and thanks for listening.
Hosts And Creators
John Lee
Tom Corbett
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