Catalyst with Shayle Kann - How China is reshaping the global auto market

Episode Date: June 11, 2026

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.

Latitude Media covering the new frontiers of the energy transition. I'm Shail 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 is 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 U.S. We have a tariff of 100% on Chinese vehicles, plus rules that effectively keep Chinese hardware and software off American roads for the most part. So from the space that most Americans sit, this looks like a non-story. The cars aren't in the showroom.

The threat feels kind of theoretical. The wall is still holding. But everywhere else, Chinese automakers are reshaping markets across Europe, Southeast Asia, Latin America, essentially the entire world, X-U.S. 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 1st, and the Chinese executive's response was essentially that's not going to stop us, which means we might start to see some Chinese EVs in particular entering the U.S. via Mexico nonetheless. So I wanted to see what's actually happening inside the Chinese market right now and as far as exports go. We talk about who's winning and why, how far into North America these countries have really gotten, whether that American wall is really protection or just a delay while the rest of the world gets a head start on the inevitable wave of Chinese vehicles, half of them EVs today, but increasingly, all EVs that are coming. My guest is Michael Dunn. He runs Dunn Insights. He hosts the Driving with Dunn podcast. He spent decades tracking the global auto industry from inside China.

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. Trillions of dollars are flowing into clean and critical infrastructure, but those investments aren't driven by technology alone. They're shaped by markets, by policy, by capital, and by the institutions that connect them. I'm Alfred Johnson, CEO of Crux, and host of a brand new podcast, Critical Capital. Each episode, I talk with people deploying capital, shaping policy and building the clean economy. Tune in as we unpack how progress is actually made. Listen to critical capital on Spotify, Apple, or wherever you get your podcasts.

Catalyst is supported by Fish Tank PR, an award-winning PR firm focused on climate and energy tech, renewables, and sustainability. FishTink is known for generating prominent and effective media coverage for the brands they work with. If you want a PR partner that's thoughtful, shoots straight, and gets results, you'll like Fish Tank PR. To learn more about Fish Tank's approach, visit fish tankpr.com. That's F-I-S-C-H-Fish-Tankpr.com. When utilities need flexible capacity they can count on, they turn to Energy Hub. Energy Hub works with more than 170 utilities, coordinating over 2.5 million devices

to manage 3.4 gigawatts of flexibility built for the moments when utilities can't afford uncertainty. Energy Hub builds and operates virtual power plants that utilities actually stake their grid planning on, coordinating EVs, batteries, thermostats, and more through a single platform built for utility scale. Predictive, verifiable, and designed to perform when it counts. Learn more at energy hub.com. Michael, welcome. Thank you so much for having me. 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? Oh, brutal, giant, ruthless, and like a meteor from outer space heading our way here in the United States. But hasn't really 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 U.S. 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? 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're 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 it globally. They're the king of buttons, and they still are. And since then, we've seen that same playbook happen in steel, in solar panels, in drones today, and now it's happening in cars, so much so that China has enough capacity today to supply half the world's demand for cars. And it's not out of the question that one day China could be capable of producing all the cars for everybody in the world. So they amass massive capacity at home, brutal price wars at home, which incentivizes companies to export like crazy all over the place. And that's exactly what we're seeing with cars today in China. 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? Absolutely identical story. So to put some numbers to it, this year, China has capacity to build about 55 million cars. Their domestic demand is 25 million. They'll export another 10 million. That leaves 15 to 20 million in excess capacity idle looking for new markets. So it's precisely to describe it. It's just that today it's the automotive turn.

And importantly, a lot of people outside of China think, oh, well, yeah, that's EVs. No, this is across the board. EVs, pH EVs, hybrids, gasoline. They have overcapacity in every power train. And we're seeing exports last year. Half of them were EVs. Half of them were gasoline-powered vehicles. Of that capacity in China, how much is EV versus?

ice vehicle? 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. Okay, so they're exporting in roughly equal measure to what they are producing, about half and half. Right. Where are the exports going, mostly? Yes. So where they're not going, maybe than easier question to answer, if you imagine a map of the world, and we have this in our corporate presentation, 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 one million cars worldwide. This year, they're on track to export 12 million cars. 12 million. And that's putting the herd on legacy automakers in all these markets worldwide. We're living on an island here in the United States. We haven't felt it yet. So it's hard for us to imagine the immense capability of the Chinese automakers and how they're just taking other markets by storm.

Are we the only country that has imposed significant to import tariffs on Chinese cars? Is that why? We're just the only country that has that policy? 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. All right. So we're going to talk more about what that means for the U.S. and whether we will nonetheless see the incursion of Chinese cars in this country anytime soon. But before we do that, who are the big players these days? This is one other thing I will point out, by the way, about the solar industry as it developed, is that the names of the Chinese companies who were the biggest solar panel manufacturers,

a decade ago are not the names of who are the biggest solar manufacturers today. There was a ton of turnover, even at the very top. 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 Laundi and a bunch of others. So do you see the same kind of turnover? Are we going to have more persistent brands in the vehicle world because it's more of a consumer product and they're trying to build up the brand?

All right. So one of the crazy things, you probably saw this in solar too, so there are dozens and dozens of Chinese car makers. At last count, there's more than 60 and more than 100 individual brands. So you go, wait a second, how can that be? We have the Detroit 3, we have a handful in Japan. How come they have something? Well, that's a whole other story about how state capitalism works. But if we wanted to distill it down into its essential ingredients, think of two categories of players, of leaders in the industry.

One would be the legacy automakers. The companies have been around for at least 10 years, probably 20. And top of the list there is your BYD, which also happens to be a major battery manufacturer. Then you have GLE, which is the owner today of the Volvo brand and the Polestar brand and the Lotus brand. And then after that, you have a big state enterprise called Shanghai Automotive, which is exporting products under the MG brand, the iconic British brand they acquired several years ago. These are your legacy automakers. They're larger. They build several million cars a year.

And they're good and strong in their own right. And then you have a second category, a brand new category, and think of these as like the Teslas of China. They've just been born in the last decade. Some of them are only five years old. And they've been founded by billionaires who made their fortunes originally in software in the tech industry inside China. Now they're saying, oh, look what Tesla.

Tesla's doing to the auto industry globally as a massive disruptor will be the Tesla's of China. So you have names like Xiaomi, X-Pung, Leap Motor, who else, Neo's in the mix there. And those are the main players in this sort of new Teslas of China category. In terms of differentiation amongst them, I mean, you know, we have multiple automakers, a smaller number. with multiple aldermakers in the U.S. and those who import into the U.S. 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? Oh.

There's, I think of them as you don't ever see that picture of like a massive school of schools of fish all mixed together, 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 will produce every power train. But if I were going to think, try to distill it down, you have really old generation or your legacy automakers who are dependent on scale and low cost. that's your BYDs and GLEs and SCICs. Then you have this new generation that's all about software and software-defined vehicles and

over-their 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 ones hand, and you have Tesla, Rivian, Lucid on the. other. That's the biggest distinction relevant to us in our discussion today. You mentioned cost. Where are we in terms of costs? What are they charging in China? And then were 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. Okay, because it's a 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 percent less expensive. And so as you look around the world, you say, if you're going to build an electric vehicle, where should you build it? There's only one answer, and that's China.

and Tesla's proof of concept of that, half of Tesla's global production is centered in China. That's not by mistake. Elon looked around the world. Where can I be most competitive? China is the place to manufacture at scale and at low-cost electric vehicles. Is $10,000 the price or the cost? Oh, the cost. No, they'll start with the BYDC goal at about $8,500.

Their cost per unit is probably around. 7,000 in that price point. Their margins are super thin compared to anywhere else in the world. So this is the double edge, is 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. So before we get to the U.S. then, in the rest of the world, you know, these Chinese cars are flooding the market, are we seeing automakers outside of the U.S. start to feel the pain meaningfully? Like, are we going to see a wave of failures of automakers of basically everybody's

not Chinese and not U.S. base, or at least not importing enough into the U.S. for it to make up the difference? We're already seeing it in Europe for sure. Volkswagen's come out and said, between now and 2030, they'll lay off 50,000 people. This is unprecedented. They're closing plants for the first time since World War II. And the Germans are not alone. Honda, also for the first time since the 1950s, announced a loss last year. Why? They're getting beaten down in traditional markets like Thailand, Indonesia, Australia, the UK, across Europe.

Virtually every legacy automaker is taking it on the chin. And the most vulnerable right now, there's two of them. One is Nissan and the other is Stalantis, the group that owns, you know, Fiat and Maserati and Jeep and Chrysler brands. Those two are the most vulnerable. So what will happen is either they'll join venture with the Chinese and eventually be taken over by them or the Chinese would just buy their brands outright. I mean, we're not talking about something that might happen three to five years from now.

is happening right now in Europe. Enormous pressure on the existing automakers just to stay alive. We're living through a profound economic shift, and energy sits at the center of all of it. Trillions of dollars are flowing into power plants, transmission lines, battery factories, data centers, but the future of energy isn't shaped by technology alone. It's shaped by markets, by policy, by capital, and by the institutions that connect them. I'm Alfred Johnson, CEO of Crux, the capital platform for the clean economy. Join me for my brand new show, Critical Capital,

as I talk with people deploying capital, shaping policy and building projects. Together, we unpack how risk is priced, how incentives are structured, and how progress is actually made. Listen to Critical Capital on Spotify, Apple, or wherever you get your podcasts. Are you tired of overpaying for big-name PR firms, but not really knowing what they're delivering? Is your comms team wasting time reviewing lengthy messaging briefs and decks instead of engaging journalists or producing content? Are you wondering why your competitors are getting pressed and you aren't? Fishtank PR is an award-winning climate and energy tech, renewables, and sustainability-focused PR firm dedicated to elevating the work of both early stage and established companies.

Whether you need to position yourself as a thought leader in between project announcements or translate complex ideas and technologies into tangible, compelling stories that resonate with the media, fish tank can help. Check out fish tankpr.com. That's f-is-c-h-fish-tankpr.com. Virtual power plants are becoming a reliable way for utilities to manage capacity, but enrolling devices is just the start. What really matters is confidence, knowing those resources will perform when dispatched and being able to prove it, from the control room to the living room. Energy Hub's platform handles the full picture, from near-real-time forecasting, locational dispatch, and the kind of rigorous verification,

that holds up when regulators, grid operators, or leadership ask, did it deliver? Easy enrollment creates momentum, proven performance builds trust. That's why more than 170 utilities rely on Energy Hub to manage over 2.5 million devices delivering 3.4 gigawatts of flexible capacity. See what that looks like at energy hub.com. Let's talk about autonomy for a second. Where does autonomy fit into the mix in China? You know, obviously in the U.S., we have Waymo, we have the Tesla Robotaxi 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? 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 U.S. leads in technological innovation, but China once again is quicker when it comes to commercialization. Not only inside China, but we're seeing the Chinese autonomous vehicle makers move into Middle East and in the U.K. and Germany now moving quicker to market than their U.S. 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. The other thing that I think is interesting is what's happening in the U.S. with autonomy is you can't – I mean, Tesla is the closest to this with FSD, but generally speaking, you're not buying an actual self-driving vehicle. FSD's name, notwithstanding. You can't buy a Waymo-operated Jaguar, right? And if you did, it would be very expensive because of the sensor suite and so on. But because Chinese vehicles are starting at such a low price point in the first place, I imagine you might –

sooner see consumer-available fully autonomous vehicles in China than we see in the U.S. Again, Tesla FST, notwithstanding. Definitely company like XPung, which does everything akin to mimic whatever Tesla is doing, they are into robotics, and they are very optimistic that their goal, their mission, is to turn a lot of private buyers into purchases of their vehicles, which have advanced autonomous features. So if that breaks out in China, it's the largest market in the world. And just as we've seen, extremely quick adoption of EVs, the Chinese consumer, unlike the American, unlike I grew up in Detroit, car culture, love driving, acceleration, handling, braking, performance.

For the Chinese, the car is something different. Number one, it's a projection of social status. And number two, it's a gadget. You get in your car, you're not going to have a whole lot of fun driving around Beijing or Shanghai because the traffic's unbelievable. It's more like, what can I experience inside my car? And if I don't have to drive all the better. So my bet would be we'd see earlier, quicker, faster, AV adoption, just as we've seen EV adoption in China. What's the charging infrastructure like 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? You know what? It's so good that people don't even think about it anymore. There's charging, for example, Tesla supercharters. 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 in L.A. I know where the supercharger stations are. In China, they put the supercharger stations inside the cities so that people on their way to work can stop and charge up. But there are dozens of other providers of charging services inside the city. the city, outside the city, so that many owners of EVVs don't have to worry about charging at home. They can charge it at the office. They can charge at the mall. They can charge on their way to work on their way home. Very convenient in most major metropolitan areas across China.

That's one of their secret superpowers in this rapid adoption of EVs. Okay. Let's get a little closer to home and start with our neighbors to the north and to the south. So you mentioned Canada got rid of its hundred. percent tariffs. You mentioned Mexico still has a 50 percent tariff. So in both of those cases, how quickly and how much have Chinese vehicles started to penetrate those markets? Okay. So let's take Mexico first, because there's a little bit of history there. Mid-COVID, the government decided, oh, our consumers need affordable vehicles. So we'll drop

import duties to zero. And that was the beginning of this torrent of Chinese cars going into Mexico. and for the last two years, Mexico has been the single largest destination of Chinese exports. So much so, the United States said, hey, what the hell is going on down there, guys? You're letting all these Chinese cars. And I was recently in Mexico City. You see dozens of brands. There's Chinese cars all over the place. Dealerships going up.

And so the U.S. put pressure on Mexico finally in January of this year to raise that import tariff from basically nothing to 20% last September to now 50%. So we've seen a deluge or an outpouring of cars into Mexico. There's several hundred thousand on the road now. Many brands. It's slowed a little bit by the tariffs. But guess what? The Chinese are now eyeing plants inside Mexico.

They'll do assembly and sell to Mexican customers. So Mexico is a strategic launch pad for the Chinese in North America. And if we go north of the border, just as you said, that held the line on imports at 100% with the United States until earlier, gosh, time flies so fast earlier this year when Carney went and said, we're going to allow our first 49,000 cars from China duty-free to come in, EVs, and we're already seeing, by next week, we'll start to see the first batch. And guess what? The first batch is actually Tesla's made in China, but they'll be followed by Volvo's. I know SCIC's in there. BYD.

D's in there, Gili's in there, they're all muscling in to try to get a share of that $49,000 quota. Okay. And so here we are in the U.S. 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 it $10,000. Even with 100% import tariff, they're still going to be cheaper in the U.S. Like if you're trying to buy an EV in the U.S., 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? I really appreciate it at the outset when you said we might go deeper in the weeds because it gets a little bit hairy here. So a couple of caveats that under $10,000 vehicle that's sold in China would not qualify for registrate 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 sold in China at $10,000, I'd call it, sells in Mexico

for $20,000. Mexico's standards are not as high as the United States, so we're talking about $25,000, $30,000. Now you have a small car with small range, and guess what? the American consumer goes, not really into that. I know it's 25, but it's small and short range. Not that great looking. No, I want a bigger vehicle. So let's be care.

I think we need to be careful about what kinds of cars would actually, the Chinese would actually aim to sell here. Second thing to note, the Chinese are starred for profits. And when I talk to the Chinese manufacturers, they're far less interested in solving America's affordability program and far more interested in saying, How can we attack the larger SUV and pickup truck segments? BYD, for example, recently launched this mid-sized pickup truck called the Shark.

It's aimed directly at the Tacoma and the Ranger. And I know other Chinese automakers have the full-side pickup and SUV trucks in their pipeline for planning. So we got to be careful. Like, we'd love to the Chinese come in and solve our affordability problems. But I don't think that's on the agenda. they would come and build as high class, high quality vehicles as possible in the hopes of capturing those profits that they cannot find easily anywhere else in the world. So this is an important point.

Just to stay on that for a moment because I hear so many people like, oh, just please let the Chinese in because they're going to make our lives all happy. Well, the Chinese are not dummies and they have their own agenda and it may or may not be solving our affordability program. No, actually, they want to get the profits. Right. So particularly with 100% tariff, 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? That's right. 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 imagine a scenario. There's a lot of people commute over the border every single day. Tens of thousands, hundreds of thousands of people. Cross the border, buy a Chinese car there, register it there, and make that your daily

driver. That's happening in places here. Also near El Paso, Texas. We even see them in Phoenix. Now, these are small numbers. They're not overwhelming. But imagine as more and more of these cars come across the border and Americans see them and go, hey, that's a pretty good looking. I want one of those. There'll be even more pressure on the U.S.

to let them in. We talk about cybersecurity for a second. I mean, you know, we've already, we ban lots of Chinese things where we have cybersecurity concerns. I can imagine that our vehicles are one of the areas, that that would be a concern for us. Obviously, we've effectively banned Chinese vehicles anyway via this tariff, but other countries, is that a concern that you have a Chinese vehicle that is a software-defined vehicle, as you said, taking over the market? How have other countries dealt with that? It's absolutely a concern here in the United States, and other countries so far look at it and seem to just shrunk.

UK, no problem. Australia, New Zealand, no problem. I can't think Canada, bring them in. So Mexico, this is fine. Brazil, no problem with the Chinese. So what's going on here? I feel as though the United States understands that it's engaged in a knockdown, dragout, rivalry competition with China, and we would find ourselves vulnerable, whereas China is not going to go after a Thailand or even a UK, but they could do significant damage to us. And we can look at the situation in Iran.

Remember the story in Iran of the traffic light and the cameras on the traffic lights were being hacked by the Israelis and they understood where everyone was. Well, let's not be naive. That same kind of tool could be used in the form of cars here in the United States. We have more to lose than other countries. So on the one hand, we look like we're over paranoid. On the other hand, I feel it's justified because we have a lot to lose. We could be extraordinarily vulnerable. they could do massive damage in seconds to, you know, they could unleash chaos.

All they have to do is say, run the red lights or don't stop at the stop signs in a few cities at the same time, and there would be panicsville across the United States. So I feel it's much more a case of how vulnerable we feel and how much we have to lose, whereas other countries go, China's not really going to go that way with us. 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, X. 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 U.S. market.

And we're in some ways, we're like an isolated country like North Korea. but in different context. Is that basically where we're headed? Oh, God. Well, potentially, but I think realistically, it's like gravity or water, the Chinese are going to find a way in. And it may be by acquiring stalantis or a Nissan or a plant inside or rebadging. It's a leap motor, but it's badged a Dodge.

And people start to, oh, yeah, okay, I understand it's Chinese, but it's American and there were shared interests. So a lot of people point to the TikTok example as a precedent, right? TikTok not that long ago has decided both houses upon the administrate vitamin. No, no TikTok, ban, not coming in. Here we are. A year later, oh, yeah, TikTok's going to stay. There's going to be some American majority ownership.

It will manage things. I think that's most likely scenario for Chinese cars. Maybe it's a joint venture. the American side has majority shared, but it's hard to imagine a future where the Chinese are not here. All right. Final question for you. Say I'm visiting China sometime soon. What's the coolest vehicle I should go drive and why? Gosh. Oh, yeah. So two of my favorites. One is the Xiomi, SU7 or XU7. So Xiaomi is founder. Lejeune is known as the Steve Jobs of China. 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 Zeker.

This is a new brand under the GLE group, designed and engineered out of Sweden by former Volvo engineers and designers. Great car, great looking car, excellent performance. Those would be my two top picks. Other Chinese automakers are going to shoot me for stopping. there, but you've got to have your top two. And there's other very impressive cars up there, but those would be the top two. All right, Michael, this was a lot of fun. Thank you so much for the time. Yeah, thank you. Great, great joining you today. Michael Dunn is the CEO of Dunn Insights. This show is a production of Latitude Media. You can head over to Latitude Media.com for links to today's topics. This episode was produced by Max Savage

Levinson, mixing in theme song by Sean Mark Wan, Anne Bailey, and it's the video version of the show. Stephen Lacey is our executive editor. I'm Shay O'Con, and this is Catalyst.