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Tesla's Main Chinese Competitor Hesitant about USA business · Elon Musk Podcast

• 0:00
  Hi, everybody and welcome back to the Elon Musk podcast.
• 0:03
  Today we're going to be taking a look at another EV company
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  called NEO. They're a Chinese electric
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  vehicle manufacturer and how they're going to be trying to
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  get into the US market. Kind of Now as we look at Neo
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  strategies and the hurdles that they face, particularly with the
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  Inflation Reduction Act in the US, there's going to be an
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  analysis of what it means for the overall EV industry, but
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  also mainly about NEO. So Neo, CEO for the US, has set
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  a target for the company to launch its first EV in the
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  United States by 2025. Now this plan is part of Neo's
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  broader vision to expand it to 25 countries and regions all
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  over the world. However, Neo's approach differs
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  significantly from other automakers.
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  Instead of establishing local production facilities in the US,
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  NEO intends to import its premium electric cars directly
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  from China. Now, the strategy could be
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  challenging due to the Inflation Reduction Act, which provides
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  tax incentives to EV manufacturers domestically built
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  right in the United States. And despite the outline plans,
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  there remains uncertainty around Neo's U.S. market entry.
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  And recently, Iyer suggested that the company is still
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  debating the specifics of their American venture, particularly
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  the timeline. The decision to build E VS in
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  China and import them into new markets such as the US adds
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  layers of complexity to their expansion strategy.
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  It necessitates careful navigation of trade policies,
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  market dynamics, and consumer preferences.
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  NEO, already a prominent name in China's EV market, has
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  successfully extended its reach into Europe and the company is
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  known not just for its electric vehicles but also for leading
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  the charge and battery swap technology.
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  Neo's foray into mobile phone technology indicates its
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  ambition to offer a holistic tech centric experience to its
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  customers. This diversification strategy is
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  part of Neo's larger goal to establish itself is more than
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  just a car manufacturer, however.
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  The company's North American ambitions are still taking
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  shape, and while the intention to enter the North American
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  market's clear, the specifics, including the timeline and
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  operational details are still under discussion and much
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  consideration now. Neo's expansion into new markets
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  requires not just selling cars, but also building a support
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  infrastructure including showrooms, service centers, and
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  perhaps even battery swap stations as seen in its European
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  territories. Now the move into North America
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  positions NEO in a highly competitive and regulated.
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  The move into North America positions NEO in a highly
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  competitive and regulated market and other Chinese manufacturers
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  like Xpang Motors and BYD. It was shown varying degrees of
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  interest in the US market, each adopting different angles.
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  And Neo's decision to import vehicles to the US might place
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  it in a pricing disadvantage against local competitors like
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  Tesla, which enjoy the benefits of tax incentives under the
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  Inflation Reduction Act. And this act encourages EV
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  manufacturers to build vehicles domestically by offering
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  consumer tax credits for EVs made in the United States.
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  Now. As a result, companies like
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  Hyundai are investing in local manufacturing facilities to
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  capitalize on these incentives. And Neo's approach of importing
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  vehicles from China, where it's established a strong network of
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  exclusive suppliers, presents a unique set of challenges,
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  including higher tariffs and lack of eligibility for these
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  tax credits. Neo's decision to continue
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  manufacturing its E VS in China for the US market stems from
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  several considerations. Establishing manufacturing
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  facilities in the US is a costly endeavor, and NEO relies heavily
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  on a network of Chinese suppliers who do not operate in
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  the United States. And this reliance on Chinese
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  suppliers is a significant factor in NEO strategy and as
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  the company seeks to maintain its unique product offerings and
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  quality standards of what they're used to now.
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  However, this approach means that Neo's vehicles,
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  particularly its high end bottles, will not qualify for
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  the UX tax incentives as per the Inflation Reduction Acts current
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  stipulations. This presents a significant
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  hurdle for NEO, affecting the pricing and competitiveness of
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  its vehicles in the US market, and the company's CEO Iyer has
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  emphasized the importance of maintaining their pricing
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  strategy, suggesting that NEO will not compromise on price
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  just to fit into the incentive brackets.
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  Now founded in 2014 and having launched its first EV in 2018,
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  NEO has consistently focused on innovation, especially in
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  battery technology and semiconductor systems, and the
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  company's approach reflects A commitment to leading in the EV
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  sector with cutting edge tech. However, adapting these
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  technologies to different markets, each with unique
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  consumer preferences and regulatory environments, is a
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  very complex task. And IRA acknowledges that the
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  American EV market has different needs compared to China and
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  Europe, and adjusting to these needs requires not only time but
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  also significant capital investment.
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  And Neo's pass to the US market therefore involves a careful
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  balance between maintaining its technological edge and adapting
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  to local market conditions. Neo's journey towards entering
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  the US market by 2025 encapsulates the challenges and
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  opportunities faced by global EV manufacturers.
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  And as the company navigates manufacturing decisions, supply
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  chain complexities and market dynamics, it'll be interesting
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  to observe how NEO adapts and evolves in the competitive
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  landscape. Now I want to say thank you very
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  much for listening to the show today and if you are a fan or if
• 5:34
  you're new here, thank you so much for being here for a while
• 5:38
  or being new here. So thank you for tuning in.
• 5:41
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  listening on right now because not only does it help me out,
• 5:50
  but you'll get all the latest news about Elon Musk and
• 5:53
  companies that are competing with him and also his companies.
• 5:57
  So thank you so much for doing that.
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  Now that's it for today everybody.
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  Take care of yourselves in each other and I will see you
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  tomorrow.