Tencent turned a pavement queue into shipped software in seven weeks. BYD paid half its cash flow to train in the same gym. The gym builds champions; the membership fee decides who I keep owning.
Thank you for the great writeup. Aligned with you on most points and also own HSAI, BABA, XPEV and Wuxi (HKEX: 0470). Do you see any meaningful and effective anti-involution policies being implemented downstream in the near future?
The toolkit is real, but not yet biting for real. MIIT and SAMR actually summoned carmakers on 11 June over irrational competition (see CNEVPost link below), which follows February's below-cost pricing guidelines and the first Pricing Law rewrite in 27 years. They're naming names now, not just filing papers. That's real escalation.
However, the China Passenger Car Association still calls it a price war, and passenger car retail was down 22% in May. Overcapacity doesn't resolve until a weak EV maker fails and the assets reprice. That step hasn't happened yet, but I would not be surprised if we see it over the next 1-3 years. That's what I'm watching.
Got you, thank you for the answer. Personally see more loopholes for manufacturers to compete on price despite the mandated price floor (eg providing free additional services), so prefer the ones with potential for a robotics rerating
On your point: if Europe really wants to compete with China rather than just reach for tariffs, the four-day work week is the wrong discussion. China runs 996 because the launch calendar makes them — arguing about working less is fighting on terms someone else set, and European companies won't win those. The release schedule sets the hours, founder hunger runs it down the supply chain for free, and you can't order that up from Brussels. Europe should pick three or four sectors and go deep instead.
Thank you for the great writeup. Aligned with you on most points and also own HSAI, BABA, XPEV and Wuxi (HKEX: 0470). Do you see any meaningful and effective anti-involution policies being implemented downstream in the near future?
The toolkit is real, but not yet biting for real. MIIT and SAMR actually summoned carmakers on 11 June over irrational competition (see CNEVPost link below), which follows February's below-cost pricing guidelines and the first Pricing Law rewrite in 27 years. They're naming names now, not just filing papers. That's real escalation.
However, the China Passenger Car Association still calls it a price war, and passenger car retail was down 22% in May. Overcapacity doesn't resolve until a weak EV maker fails and the assets reprice. That step hasn't happened yet, but I would not be surprised if we see it over the next 1-3 years. That's what I'm watching.
We overlap on Hesai, Alibaba and Xpeng.
CNEVPost article: https://cnevpost.com/2026/06/11/china-summon-automakers-irrational-competition/
Got you, thank you for the answer. Personally see more loopholes for manufacturers to compete on price despite the mandated price floor (eg providing free additional services), so prefer the ones with potential for a robotics rerating
You are welcome.
As for EV and robotics, have you seen this recent news: https://cnevpost.com/2026/06/03/byd-enters-humanoid-robot-market/
Yes and it made me consider exiting XPEV. I think the cleanest robotics expression is through more upstream players like HSAI
Great article. 996 makes it difficult for Europe to introduce a 4 day workweek if we want to build any kind of muscle in the gym.
Glad you liked the article.
On your point: if Europe really wants to compete with China rather than just reach for tariffs, the four-day work week is the wrong discussion. China runs 996 because the launch calendar makes them — arguing about working less is fighting on terms someone else set, and European companies won't win those. The release schedule sets the hours, founder hunger runs it down the supply chain for free, and you can't order that up from Brussels. Europe should pick three or four sectors and go deep instead.