With Laurent Segeland from London and Gerard Reed from Berlin. This is redefining energy
minutes minutes one point thirty and job is busy closing our deal in Germany.
So we brought a friend, great friend of the show, James Carter,
to talk about Tesla, and EV's thank you for having me. It's great
to be here with you and having a chat. So I'm going to ask
the first question because we've seen the quarterly reserve deliveries and so on as Tesla
lost this module. That is a very good question when we took a look
at Q one results, and frankly, I think Q one metrics for the
company were not really that great. We did see revenue down, we did
see quarterly profit down on those key metrics. I'm not sure that I would
be be that excited, but you know, we are seeing similar things amongst
other rowing ms, and that's one of the key reasons is simply because the
economic conditions, because of high interest rates, people just don't have the money
that they did even two years ago to spend on cars, especially with people
in some countries paying eight ten percent on interest now. But of course,
like a magicians now multiplier announcements of new models and Robotaxi of bright Future.
So do you buy that or not. I'm usually always interested in what's happening
with Tesla and usually fairly optimistic, but this one I wasn't. There are
a couple of reasons why. The first one they announced was that there would
be an update of that vehicles based on the current platform starting from Q one
next year. But that one we kind of knew that's Model Why update.
And you know, we've seen Model three go through their major update this year
with their Highland spec and we've actually just seen the performance version just released.
But that early release is without doubt Model Why. And while they didn't say
that, of course it is. That's the only one that's coming up.
But you know, once beyond that is what's interesting, And frankly I thought
it was a bit of a lack of product. The first thing we noticed
was that this long speculated model to or low cost vehicle has probably is probably
out now. So you know, after spending a couple of years doing development,
why has Tesla decided to ditch that? And there's a couple of reasons.
One is China. Maybe they've just said this is just going to be
too hard, peeps. Maybe we can't actually make any money on this,
and perhaps their unboxing process that they were developing perhaps didn't yield the cost down
that they were hoping for. So perhaps some of that development is now going
towards their robotaxi type thing that they're talking about. The thing that I'm kind
of worried about is that just not too early, Like have they really solved
all the problems surrounding av design and development. You know, we have full
self driving on our car this month and it's okay, but sixteen thousand dollars
worth or i know now reduced price in Canada sixteen thousand or now reduced down
to eleven. That seems like a lot of money for a sixteen year old
driving around my cars. So basically you're saying the juice is not worth the
squeeze. Absolutely not. Now. There was an interesting quote by you know
on when he was not doing his antiques on you know, other stuff.
He said, Chinese atomaker will demolish and I quote demolish most of the world's
other car companies if there are no trade barriers. Our observation is generally that
the Chinese car company are the most competitive cars company in the world. So
that's a good segue to what's happening in China, because if we look at
the EV sales in Q one twenty four, they were up twenty one percent
quarter to quarter, so compared to Q one twenty three, But it was
really a China story. Chinna had the thirty one percent growth, which now
leads to a penetration of fifty percent, which is absolute crazy. Of course,
you can be in the Chinese market is the all European and American market
combined, whereas for evs the US and Canada were up thirteen percent and Europe
only seven. The reason that said for Europe was probably the removal of Subsidi
in Germany. So really is it the tale of China and versus the rest
of the world. It kind of is. At the moment. I'm just
going to talk about North America for a minute because it's kind of important that
we understand what's happening here and then add a little bit of Europe to understand
even give some more perspective on what's happening with China. When you have a
look at North America. The Inflation Reduction Act, which throws a lot of
money at evs and EV supply chain, particularly batteries is in a lot of
ways a let's keep China out of this mix type policy that the US government
has developed. So there's a couple of implications here that we need to talk
about. One is cost. So there's a lot of protectionist policies for the
OEMs that are already in the North American market to come up with something and
have a big buffer and to keep the prices relatively high for evs. But
the problem is is because it sort of artificially keeps EV prices high, the
amount of the adoption rate for evs is kind of slow. That's one of
the reasons in North America that adoption rates are slower than certainly China and certainly
Europe. The other point that we should make is because the US doesn't or
North America hasn't had the supply chain that China has. It's really starting still
being set up, and some of the minerals and processing plants just aren't there,
although they're starting to find them and put minds in, but as we
all know, minds and processing plants take a long time to build. In
some ways, the inflation Reduction Act. While it throws a lot of money
at it is putting the role out of EVS in North America behind schedule compared
to everyone else. Now we look at China, Europe is a bit less
protectionist than the US. But at the same time, right now there's starting
to be this concern that as you said that a Musk said that China will
come in and take over and put OEM's at risk as well. So there's
a fair chance that we'll see Europe start to add more protectionist method to prevent
that happening. But you're absolutely right that China has the supply chain they have
to know how they have whatever else to make fantastic cars to really wipe the
floor. And if we have a look at a really open market now,
and the one that's most open really globally is Australia. You know where I'm
from. There are more models in Australia being sold, more brands in Australia
being sold than anywhere else in the world. Everything from Europe, everything from
Australia, everything from Asian lands in Australia. And because you've got these huge
amounts of models, we have very fierce competition. You have a look at
who's selling what in Australia, particularly on EV side, and you see one
and two Tesla, so model Y, model Model three like Europe, like
US. Okay, get that, but you have a look at four,
five, six, seven, eight nine, all Chinese models. Ten is
Hundaianamic five or Bobo XC forty. They started number ten best selling model and
then go down from there. So frankly, when you have a look at
that openness of the market, what Mask said is absolutely right, and you
can understand why Europe is looking at putting more protectionist measures in place. Our
friend of the show, Roger Atkins, is currently at the Shanghai ADO Show
and he texted me on a regular basis he said, there are five hundred
available IV models in China. Unbelievable. This is what I don't know.
A few dozens in the US. Very different game. And you're talking about
Europe. I can tell you even the German of tamakers, they're not that
keen because some have developed some strong partnership BMW with cattle and others. So
the fate of protectionism in Europe is still up to debate, which probably I
think that that ship US sail in the US. Oh yeah, yeah,
if you try to conclude the market is going to grow to seventeen million this
year. So whenever you read and I call them the Oil Street Journal and
other modert publication, we explain us that it's finished. The EV market has
crushed. Those guys really are for propaganda le Flet. Yeah, yeah,
absolutely. The thing is, no matter where you are, whether you're in
China, whether you're in your whether you're in the US, you're still seeing
EV growth. You're still seeing them, not perhaps at the rate that we
saw a couple of years ago, but there is still market growth. And
the other thing I think is really important to point out a lot of the
OEM so refocus themselve I was kind of on hybrid and there's a problem with
that, but there's kind of a long run benefit as well that we should
think about. The first is the problem part is really that we're not necessarily
solving the problem of getting ICs off the road. Are you getting pollution getting
carbon off our roads? And I think that is a problem. So sure,
it's sure it's reduced, and particularly when we look at some of the
new Toyota models and these are kind of concerning for me. Is that Toyota
and some other OEMs are releasing hybrid models that aren't really improving fuel economies substantially.
Like the new Tacoma I Force Max hybrid version is still only getting twenty
miles to gallon US, which is what twelve liters per hundred. It's pretty
bad. So we're not making as much progress on that hybrid side to reduce
carbon emissions as I would have hoped. That said, there is something really
important about hybrids in the research that we've done. As soon as someone's owned
a hybrid, and more particularly a plug in hybrid, their next vehicle is
going to be EV. People get addicted to electrons, people get addicted to
just running on electricity and making it low cost rather than using their fuel,
and they don't just want a little bit, they want to go the whole
hold, and their next vehicle often becomes EV. That is good news,
but the progress is just not as fast as I would have hope. Okay,
James, well, thank you so much for coming on the show.
And last words before we got it today. I think the last words from
me is when we look at this EV rollout, when we look at what's
going to happen, in the long term, this is perhaps a bump or
a bit of a dip in the road. Just like anything else that we
see in life, whether it's solo, whether it's other green energy, or
whatever it is, there's always bumps and dips, and maybe we're going through
a little bump or dip through EV. But the long term is still the
same. Zero missions is where it's at. These are mandated by government regulations.
We will see EV become by far the dominant vehicle in the twenty thirties,
and that's what's going to happen, regardless of the bumps and the dips
that happen in the twenty twenties. Well, James, thank you very much
for coming on Readyfining Energy Minutes. Thanks Lauren, thank you for listening to
Redefining Energy. Don't forget to read the show and subscribe on Apple Podcast,
Spotify, or the platform of your choice.