China is Coming: Observations from an Expert | In Depth

we're playing checkers one jump at a time they're playing chess hey everybody i'm zach and i'm jesse and you're watching in depth on now you know [Music] now do you remember when japanese cars hit american shores in the late 70s oh right how could you i mean you weren't even born yet so what happened okay well i was just a kid but i remember all of a sudden there were these little cars with funny names that popped up all over the place like what like hondas toyotas datsuns i mean didn't datsun turn into nissan aren't these cars we're all familiar with why are you talking about this well it seems like something that's about to happen again oh right like teslas are popping up everywhere um not exactly i was thinking more like chinese cars i don't see any chinese cars in america how about volvo and polestar those are swedish are they because last time i checked volvo was owned by gili and gili is a chinese auto manufacturer but i think evs are the future so do you think that pole star is going to steal the market away from american japanese and european big auto well i think chinese auto companies are actually further along with ev technology than most other countries and i think china could repeat what japan did back in the 80s i think china is coming and i'm not the only one we interviewed sandy monroe an expert with decades of experience in worldwide manufacturing we'll hear what he has to say after a word from our sponsors we are giving away a 2022 tesla model y performance well we aren't charity stars is that's right and you can win the model y and ten thousand dollars in cash by going to charitystars.com now you know and get this what if you use the code now you know at checkout you'll get 250 free entries on your purchase the tesla model y performance is an amazing car with the top speed of 155 miles an hour over 300 miles of range 0 to 60 in just 3.5 seconds 21 inch uber turbine wheels and the all glass roof are you kidding me i love the model y me too charity 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at ecoware along with a hundred other designs and you don't have to just get t-shirts we got everything from pillows to shower curtains to pet wear and we carbon offset the manufacturing the shipping and the life cycle of everything that we sell and in addition to that we plant 10 trees and in addition to that we help to cap abandoned methane spewing oil wells with our friends at the well done foundation don't forget to use our promo code holiday season to save 15 off your purchase at ecoware well we're so fortunate to have sandy monroe with us right now uh we have some questions for you sandy we're talking about china coming and this kind of reminds me of the 80s with japan i remember all of a sudden all these japanese models were on the market a lot of americans were like what is nissan what is honda they seem like joke cars and yet they took over the market do you remember back in the 80s like what was the car that was most impactful to you the brand that was most impactful as the japanese car market started to ramp up here in america i remember everything crystal clear because i was your age then the japanese invasion happened really quickly much faster than anybody could possibly imagine and i was working at ford at that time ford had a real miserable time trying to put out a small car that wouldn't fall apart you know on your way to the uh to the drugstore these vehicles were absolutely pure crap they had taken the um nba philosophy if you like to the max and what they were doing was anything that got out the door was good to sell and uh and profit well we're gonna make our profit on spare parts when i was at ford i listened to a speech from henry ii henry the deuce is what they called them there and he said the japanese can have the small car market we don't need it we don't want it let them have it they'll they'll never make any money at it and they'll never understand the big car market or the luxury car market or the pickup truck market and sitting right next to him right beside him was lee iacocca because he was still there at the time what i remember was seeing the very first toyota live and in person so i had a morgan super sport and it was a really fast english hand-built sports car and i was racing it and things like that and i pulled into the parking lot i was working as a tool maker pulled into the parking lot at valiant machine tool and a guy pulled in next to me and i looked at it and i said what in the world is that he says i just bought it and it was like my my car let's say was x this this uh this toyota was probably one-tenth x and i said how do they make it so cheap and he says i don't know but uh but i bought it and blah blah works good and yak yak yak and i looked around and i said can you mind if i look underneath and i looked underneath and it had a chain drive this was one of the very first toyotas that came across it was a chain drive i said you're an idiot this thing will never last some of the car companies had already entered the market but under motorcycle names so uh and you meet the nicest people on a honda you know solo suzuki there was a ton of a ton of different different products that they brought into the market first thing they did was gobble up the motorcycle market which was dominated by the english and that disappeared in like it seemed like seconds but it was probably something like uh a few years and then their cars started showing up now i was you know i was like two or three years and now i was at ford and i'm telling you what they devastated they mopped the floor with the american car companies at that time in that era 50 55 of the market belonged to general motors alone 24 25 was uh was ford and and chrysler had 12 or 15 something like that now it's like ridiculously small i think uh general motors is like 18 16 18 something like that amazing and that all happened within five or six years between the oil embargo and the fact that gasoline was hugely expensive it went from like a quarter a gallon to two bucks people were trying to get out of their their big fat cars faster than you could believe and nobody wanted to drive a pickup truck nobody so that this was a cultural and economic change that happened and we're in exactly the same situation now here we are again 35 years later and it's in exactly the same same situation yeah i was gonna ask you it seems so similar that um now evs are more efficient than gas cars so they save you money and the quality a lot of people kind of laugh at chinese brands kind of like they laughed at japanese brands when they first came so do you think this is kind of a repeat oh i'm positive like i've been working with the chinese for the last five years so three months of the year i was in china working on the design of of new cars so they built a tremendous number of vehicles so in 2018 27 million cars were made in china and this year they're expecting somewhere around 24 million if we look at the united states we sell about 17 million in 2018 in 2021 we'll be lucky to do uh 14 maybe 15 million remember these guys have been making cars at a ferocious rate they know what a good car has to look like in order to make a sale now what they've done is they they don't want to have the the old american masters so a lot of these cars like if you look at uh if you look at the car sales in in china almost all of the big car companies like cadillac or whatever they're all represented in that 24 or 25 million vehicles they're all big they're at the top of the top of the line so you've got gm and and volkswagen and all of the big names all sitting up there at the top well now they're making their own cars and all these big car companies that have been building basically american cars well we're going to build our own chinese cars and they're going to be only electric because they have no desire to get into the into the ice world what happens when these start hitting california i mean california is going to see it first it's just going to be the same as as as japan and quite frankly california doesn't have allegiance to a car company it's not like detroit or something like that they they have an allegiance kind of to uh to tesla but for the most part californians don't care about what they care about is what does it look like is it is it friendly to the environment is it a good price on and on they have a totally different perspective and they don't really care about buy american because a lot of people have a lot of different ethnicities in california there's no world war ii guys left over my dad never not in a million years would ever buy a japanese car he was in world war ii he had his own little experiences and his own we don't have that in we've never been to to war with china so that part of the population is gone and really there's nothing to replace it when i when i said that the crossover point was going to be 2028 for ice to to ev i wouldn't kidding and this is what i've got in the back of my mind a lot of those cars are going to be chinese and they are going to come in in wave after wave after wave after wave and the guys here cannot say no if the u.s government says no then china will nationalize all of the plants that that that all the foreigners are building at in china and they'll instantly go bankrupt because most of their profit now is coming from the china market not from the u.s market so i see a tidal wave of problems coming that uh obviously the rest of the world doesn't see i don't know how they could miss this maybe it's just because i'm old but i'm telling you there's a there's a uh a storm tsunami that's coming that is going to make make the japanese and people will forget when the japanese came after this so let me just ask so you know chinese car manufacturers right now are focusing on evs they're making pretty decent evs but what about safety i mean like people really care about safety and we think you know cars made in china we're used to the stuff that you buy at walmart made from china with not built to last and it'll kill you if you get in an accident is that do you think that's going to be true no it can't be true because they have to go through all the testing and whatnot testing and validation basically the department of transportation um puts out so niched uh the insurance companies will crash those cars everybody is gonna and then we've got uh consumers reports and everything remember shortly after toyota came in they went to the top of consumer's reports jd powers gave them all kinds of five-star ratings and went on they're going to come in as a really well-built car and it'll be they'll be electric they won't they're not going to bring in any gas vehicles none so that means that the epa is totally out of the out of business now you've worked in china at factories like you said for months and months at a time you've seen the inside of these factories what are they doing differently than american companies are doing because i mean gm they've got the ultim battery platform they're they're you know fully embracing evs they say so why aren't american car companies going to be able to compete okay well i don't want to get into chemistries and big decisions that gm and ford are making but i can tell you right now that battery technology is changing in a pretty rapid clip and they've decided to standardize on a battery that i think is right now obsolete let alone in the five years it's going to take them to put the battery plant up the testing and validation that that needs to happen is significant and and to change that on the fly that's just not going to happen it's not going to happen so i think that the big car companies didn't like to listen so this isn't brand new i mean in 2018 i was making noises about hey you know what you guys better pay attention to what's going on in 2019 when i did my round-the-world thing i'm telling you what who was booing not the chinese not the guys in singapore or the guys that were in norway or even in britain oh it would be the japanese the americans and the germans they booed they that's ridiculous you got out of their mind you don't know you're not a real car guy okay well let me hear them now well let's see a couple of those guys in germany they went to jail for dieselgate among other things i'm pretty sure i'm right in fact a lot of people are uh are banking on what i have to say as being uh the truth and i'm thinking right now that there's a tremendous amount of problems associated with the strategic business direction that some of these people are taking and i don't think they're hedging their bets nearly well enough china is not going to be producing a crap car and they know it they know it because they've got they've got their vehicles in china they know what their warranty costs are they know how well they're built there's no way in hell that china is going to send over a bunch of junk that's going to fall apart on the shores these aren't going to be hugos not at all these are going to be built just like a european car and because that's what they use is european standards and most of the guys that i bump into when i'm in china most of the foreigners are german or french or italian or british i haven't bumped into too many americans over there that are into manufacturing but i bump into a lot of the guys from bmw or mercedes that i know or like uh psa who's on citroen or land rover range rover those kind of guys yeah that's who i bump into over there and tons of them design as in styling engineering and manufacturing when do you think we're going to see the first real chinese competitor hit u.s soil i mean what brands you think will be first my guess would be shanghai automotive neo beijing eevee well you've already you got volvo that's gili okay julie is is here already okay so trump put something in place to try and block the chinese and they'll put up with that for a while but sooner or later they're gonna play their ace card either you let us in or we're nationalizing all your car plans and you know who's going to say oh wait a minute we can't do that that's going to be gm and ford bmw mercedes and especially vw vw makes a lot of money over there they're going to be going to the government and saying hey you you got to do this you got to you got to let us let them in so we can continue to make all this big money you can't shut us down it'll kill us all so again this is the difference between american business and definitely chinese business we're playing checkers one jump at a time they're playing chess it's like a really really good movie where you have no idea what they're going to do next and they say oh they planned for it up here to do that unless you're a big fan of the art of war if that's your business plan is is geared toward the art of war you'll win if it's just oh we're going to do this oh we're going to catch up to tesla by 2025 really wow no kidding where did that come from i'd like to see the strategic plan that most guys have a plan that'll last a quarter that's it do you think chinese companies will start buying brands like you just mentioned gili's you know bought volvo mgs bought by a chinese company lotus even pirelli has been bought by a chinese company do you think they'll do that so that it kind of hides their moves more um if they can get something for a bargain they'll take it mg badge came for free basically and that was shanghai automotive they got that for next to nothing and volvo i mean ford couldn't get rid of that fast enough they could not make any money at it same thing with tata buying range rover or land rover they couldn't make a penny at it and now all of a sudden it's rolling in dough and jaguar another good example right all these different badges they don't seem to work under u.s management and the reason for that is because of the short-sighted you know checker kind of moves the only place that americans can really make a tremendous amount of money american car companies is right here and even that is dwindling the chinese they loved the imported american cars then they went over there the long and short of it is the chinese worker really wants to work i mean it's like a source of national pride i can't uh put into words how these guys like to work and how they they want to try and catch up and and beat the japanese it's a it's an amazing phenomenon that work ethic is is going to be very difficult for anybody over here to to catch up to or exceed now how does tesla fit into this i mean do you think that tesla's going to be able to succeed yes this is like we're going to run a 100 yard dash and everybody's at the starting line except for tesla and they got one yard to run unless you're tearing apart vehicles every day like we are unless you're doing that every day you you can't comprehend how fast these guys are moving and how far ahead they are i i'm telling you flat every time we what are you kidding me i mean people talk about some technology and the next thing you know it's stuck inside of a tesla look at that chip that they just came up with that new teraflop chip i mean are you kidding me who who can even make this thing okay so if you look at the original car that we took apart the the model 3 we took apart and you look at the controller board okay there are three nvidia chips there right they designed their own chip it went down to two and now the next boards that come out it'll have one oh there's a chip shortage hey you know what let me think about this if i could take two thirds of the chips out of my circuit board how much faster or better could it be and then you look at these other ones so you look at the chips on the different boards right you've got 10 millimeter chips five millimeter chips and now we're looking at three millimeter and in in essence a one millimeter chip that they're working on okay if you're looking at the three and the one millimeter chips that's where all of the guys who are making chips that's where they want to go they want to go in that direction because they can make a whole lot more money at it but everybody else wants to buy the 10 because well it's old and reliable and look here it is right right here here's my standard it says i have to use that tin the 10 millimeter chip is going away they don't want to build that so they put it in malaysia or indonesia that's where chips go to die right that's the chip graveyard well guess what they didn't ramp up fast enough how many times have you heard tesla crying about we can't get chips none none why because they're not using the old style chips they don't have many of them that they need that are even at five there's a couple of ten millimeter chips but mostly are five or less five millimeter chips all day long out of uh out of taiwan but uh but those other ones not so much and how many chips are made here next to none why oh we can get them cheaper from china idiots here we go i i moved my checkers and look i got one yeah that kind of crap doesn't work this is not an mba market anymore this is a general kind of market this is a market where military designs strategic designs designs that have to go five years out ten years out i mean the japanese used to have a hundred years out they used to have a hundred year plan at toyota not anymore because they went to harvard and they found out they did you don't need to do that i wouldn't be here in a hundred years that's kind of like what the chinese are still doing so then how did tesla get so far ahead you know if they have american workers who you know don't have maybe exactly the same work ethic as uh chinese workers how can they be so far ahead well the easy answer of course is um they have elon musk elon musk does not have an mba he is a technocrat extraordinaire he knows technology he gets excited about new things i i was in a design review with him and i was astounded that the richest man in the world the guy who's probably got more going on in technology than anybody else is sitting in a design review you know how many ceos i've seen in design reviews none i have seen zero ceos ever ever participating in a design review ever they wouldn't know what to say they wouldn't know what was going on and yet here we are talking about a rocket engine and i have worked on rocket engines and a lot of them and people making suggestions and elon said something and they said ah come on elon yeah that guy that won't work blah blah blah this is why a formula this long that i never heard of before and oh ellen says oh yeah yeah you're right son of a yeah okay all right forget that what else have we got do you know what happens when you contradict a ceo in a meeting i mean it's instantaneous your career is over period when you've got that kind of flow and then what's elon's edict to his people chain of command is too slow just get the job done holy sh i mean really i mean this is strategic this is like in world war ii the polish had the best cavalry on the planet and it's really inexpensive to feed a horse and and and give a guys uh a pointy stick right the best cavalry lancers and yet it only took about 15 minutes for the panzers tanks to crush them like bugs why why did that happen i mean after all they were the best in world war one and we're only looking at maybe you know five ten years later and here they are flattened out by a bunch of german tanks what happened they decided to sit still they decided that oh we're very good at this let's just stay at what we know the best and you know we call that in nba language that's called core competency focus on core competency it's a good idea as long as the world doesn't turn when the world goes and stops then core competency will work out you'll be happy until then anybody that doesn't move is a luddite luddites are people who hate technology and in 1811 they started smashing looms because they saw this as taking away business from other people you're stealing my job so i'm going to break your loom i don't want to have automation or whatever all right well guess what that was the industrial revolution and too bad you're going to get left behind and we've got a ton of people that are in the exact same position right now and tragically a few of them have made it to positions of authority and on and on i'm worried about the united states i'm worried that they're they're sitting on their hands too much i'm worried that they're not making strategic decisions they're making tactical decisions as a rule just to appease wall street or or maybe get their name in the paper one of the one of the examples that came out in in the press here in detroit was something from john mcelroy's kind of like a local favorite here and he said the tesla deal with hertz is a giant embarrassment to the detroit three okay the traditional automakers have never seen anything like that ever before never and that is a good indication of what's going to be coming down the road they just they don't get it they're still frozen in time they're still froze in fact i don't know if you heard but nishta is also going after chrysler for diesel diesel problems there are so many things that are going on that is such a dichotomy so many things that seem to be going in the opposite direction it's really tragic but this is a train wreck that everybody's watching slowly it'll unfold fairly quickly i think in two years it's going to be it's going to be tragic so sandy i hear that there's a way that fans could maybe hang out with you somehow they're having an auction the american cancer society is having an auction here in detroit it's called the 2021 discovery ball and um it's a formal kind of uh thing but there the auction can be you can you can get to the auction via the internet if you want to if you want to bid on some of these different uh different prizes that they got out and the winner whoever bids the highest gets a chance to have corey and i and we're going to take them to lunch at a place called lollies which is a really nice steakhouse just down the road we're going to give them a tour of the facility talk about the technologies and show them how we tear things to pieces and and then they're they're actually going to watch uh one of our mineral live tapings so it it's kind of like if you're if you're into tesla because we're hoping that we'll have something from tesla to tear apart but if you're into envy or into that and or if you just want to you know make a donation to the american cancer society this is a great way to do it you get something out of it yeah you're gonna have to outbid jessie and i on this so bid high oh really yeah oh come on okay we're gonna be lined up for this uh yeah we'll put the link down below so if you're watching and you wanna have a date with sandy and get all that great stuff uh you can bid down below and help support the american cancer society exactly that's awesome and you know this episode we're doing now on china is uh something that you're actually working on i can't wait to see your upcoming episode tell us about what you're working on yeah we've got uh we've got three episodes that we're we're going to try and push out um one is going to be on business the the changes that are going to come and we're going to talk a little bit about first off the hertz uh situation and then the insurance policy stuff that's after that and on and on and then the the second one is uh going to be basically talking about the chinese invasion and how i see it and how it'll roll out and that kind of stuff and then the third one is which oem is going to survive which ones how much are they going to survive are they going to die completely how much market share will they have those are the three that we're going to be looking at if you're watching this channel right now you already know who sandy monroe is but if you don't you have to head over to his youtube channel monroelive and subscribe right now because this is brilliant and corey's not even in here normally it's corey [Laughter] but anyway i i really appreciate you guys letting uh let me come on i uh i hope that this is a good show for you i'm pretty sure that uh that you're hitting a message that is going to be phenomenal as a prophecy to the future so and you know as soon as we get ahold of this damn ribbian uh we plan on driving it right to you so you can uh well maybe not tear it apart but at least look under the hood we'll be happy to tear apart look under the hood all right as long as you can put it back together i mean i never see you put them back together so i don't know oh we put things back together all right all right then all right maybe maybe we'll let you tear it apart cool all right good i can hardly wait okay we can hardly wait too thank you so much sandy for your time today oh you're quite welcome thank you wow i really didn't expect that to be honest i mean i thought sandy would say something like well china will be a problem you know 10 years from now but he really made a case for big otto in the u.s europe and japan needing to fear chinese auto companies in just the next couple years yeah he brought up so many good points and since this is in depth i think we have to go even deeper what are you saying i think we have to do with china is coming part two that's a great idea because i want to know who the players are and some more numbers and so we're going to need to put our research hats on and get to work on part two for next week and you know why we do this because of our patrons they support us over on patreon.com now you know and it's their support that enables us to do this work for you week in and week out because let's face it who else is going to tell you about the future of transportation well a lot of people actually yeah but how many of them have a track record of being right that's a good point we've been reporting on tesla evs and sustainable energy every week for the past five years and we've been right so far and that's because we're independent we go where the facts lead whether big auto or big oil likes it or not how many other news sources that you know of can say that because if you dig a little you'll find that most of them are supported by big industry one of our sponsors that i want to tell you about is henson shaving yeah it's not a giant conglomerate but a small family-owned company up in canada that used first principles to solve a universal problem how to get a great shave with a low impact on the earth and your body now you might have thought that humans had solved this problem already they did in fact william samuel henson invented the t-shaped safety razor back in 1847. the problem is that your typical safety razor still takes some skill to operate compared to a throwaway cartridge that we all know and hate right cartridge razors are expensive impossible to recycle and just downright don't work properly right i 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Channel: Now You Know

Views: 926,303

Rating: 4.8182716 out of 5

Keywords: tesla time news, now you know, zac, jesse, news, update, elon musk, model x, model 3, model s, model y, supercharger, nyk, electric cars, ev, technology, science, funny, autopilot, electrek, tesla roadster, model 3 performance, model 3 dual motor, bfree, imagination, education, future, solar, in depth, TSLA Stock, Tesla Profitable, gigafactory, tesla battery day, sandy munro, model y teardown, Munro and Associates, sandy, china, byd, shanghai automotive, nio, america, shipping, honda, toyota, nissan

Id: hTOtAniwC18

Length: 33min 17sec (1997 seconds)

Published: Fri Nov 05 2021

Reddit Comments

[u/syn7fold]

No different than Japanese cars in the US market

[u/Aytrone]

I don't know about extinction, but domination for sure

[u/PerseusCommunist]

American automakers have been dead due to Japanese ones long ago. The extinction of Japanese automakers is what will happen soon since those Japanese dinosaurs are xenophobic and resistant to changes. Japan is even paying anti-EV campaigns!

[u/GG-00]

The US domestic market profits are dominated by full-size pickups, which have a high protectionist tariff. China doesn't build a lot of those, so they don't need to compete there.

China makes a lot of inexpensive cars, and can easily dominate the subcompact market immediately, with cheaper, better subcompact EVs than anyone else in the market (Fiat 500e, Mini EV, etc). They are cheap enough to be a 2nd car for local errands and shorter trips, replacing a far more expensive alternative. Get those in people's hands, where the quality is obviously better, while also being cheaper to operate than ICE. Once enough people have experience living with them, that's when the tide turns, and things will see a big reshuffle.

[u/TomaVanPey]

Biggest car market in the world already!

[u/[deleted]]

[removed]

[u/sunoukong]

I suspect one of the main reasons why European countries such as France and Germany reject the Belt and Road Initiative is this. They are afraid that they won't to able to compete against the Chinese industry, including the car market.

[u/yw4lkwhenUcanride]

An affordable EV that wont spontaneously combust on the road/lock brakes on the highway *and* it'll throw a wrench into the US auto machine? plz

[u/ChopSueyWarrior]

Part 2 the presenters was saying how China 'stole' Tesla's technology, what a bunch of half-wits.