WEBVTT 1 00:00:04.080 --> 00:00:07.599 With Laurent's segele end from London and Gerard read from Berlin. 2 00:00:08.160 --> 00:00:10.000 This is redefining. 3 00:00:09.560 --> 00:00:13.359 Energy Today on Redefining erg Jah, we're going to talk 4 00:00:13.400 --> 00:00:14.919 about evs and. 5 00:00:14.919 --> 00:00:19.640 Batteries absolutely and an incredible progress we're seeing in terms 6 00:00:19.679 --> 00:00:22.440 of technology development and also cost reductions. 7 00:00:22.600 --> 00:00:24.719 But first of all from our partner, A. 8 00:00:24.760 --> 00:00:28.000 B Loco Energy is Europe's premier leaser of ten foot 9 00:00:28.079 --> 00:00:33.079 container mobile batteries built in Europe with COTL best LFP cells. 10 00:00:33.640 --> 00:00:38.960 A Bloco Energy serves fourteen European countries, including France, Germany 11 00:00:39.039 --> 00:00:42.240 and the UK. A Bloco's batteries can be leased for 12 00:00:42.280 --> 00:00:45.479 any duration between six weeks and six years and they 13 00:00:45.479 --> 00:00:49.320 are monitored by the Dutch award winning platform school a 14 00:00:49.399 --> 00:00:53.439 Blocko Energy. Make your life easier, make your business more flexible. 15 00:00:53.679 --> 00:00:57.119 Back to the show and the volumes. This year, the 16 00:00:57.159 --> 00:01:01.799 best market is going at forty percent on her and 17 00:01:01.880 --> 00:01:05.120 the EV market is going to expand by twenty six percent, 18 00:01:05.280 --> 00:01:09.040 which is at the latest number from Benchmark Mineral Intelligence 19 00:01:09.640 --> 00:01:13.159 for the first nine months of the year global fourteen 20 00:01:13.359 --> 00:01:17.640 point seven million including so China nine million plus twenty 21 00:01:17.640 --> 00:01:20.159 four percent, You of three million plus thirty two percent 22 00:01:20.799 --> 00:01:24.560 North American only plus eleven percent, and listen to this 23 00:01:24.680 --> 00:01:28.040 rest of the world plus forty eight percent. Insane. 24 00:01:28.519 --> 00:01:30.599 Yeah, And as we are gat to the point now 25 00:01:30.840 --> 00:01:36.560 where these cars are now cheaper to actually buy than 26 00:01:36.599 --> 00:01:39.200 the internal composition engine equivalence. And that's why in the 27 00:01:39.239 --> 00:01:41.599 rest of the world is growing because at the end 28 00:01:41.640 --> 00:01:43.959 of the day, the Chinese are now coming out with 29 00:01:44.040 --> 00:01:47.000 low course cars that are cheaper to buy and cheaper 30 00:01:47.000 --> 00:01:51.280 to run. So those numbers come from Benchmark Mineral Intelligence. 31 00:01:51.840 --> 00:01:53.760 We thought it was a good idea to bring in 32 00:01:53.799 --> 00:01:58.239 the brilliant yola Us, who's head of research at Benchmark 33 00:01:58.319 --> 00:01:59.359 Mineral Intelligence. 34 00:02:00.280 --> 00:02:03.040 Let's bring around the shell. I own it. 35 00:02:03.040 --> 00:02:04.319 It's great to have you on the shell. 36 00:02:04.599 --> 00:02:05.599 Thanks very much for having me. 37 00:02:05.920 --> 00:02:09.199 Well, especially it's great to have somebody something because we 38 00:02:09.280 --> 00:02:12.599 have something the expelled to know nothing. And what we 39 00:02:12.719 --> 00:02:16.080 really like with you is that you are keeping track 40 00:02:16.520 --> 00:02:20.039 of all the data around batteries, eveess and so on. 41 00:02:20.120 --> 00:02:22.879 So we brought you in to discuss the state of 42 00:02:22.960 --> 00:02:26.280 play at the end of tour twenty five. Maybe we're 43 00:02:26.280 --> 00:02:28.759 going to start with the batteries, so I would say, 44 00:02:28.840 --> 00:02:31.199 the cells, what do you see there? 45 00:02:31.719 --> 00:02:35.639 Last unpack, It's been a busy year for sure. I 46 00:02:35.639 --> 00:02:37.919 guess first place to start is just in terms of 47 00:02:37.960 --> 00:02:42.560 headline battery demand growth, we're expecting that to come out 48 00:02:42.560 --> 00:02:45.719 at about twenty three percent growth compared to twenty four 49 00:02:45.800 --> 00:02:49.680 levels year to date. When we look at the different markets, 50 00:02:50.000 --> 00:02:53.280 generally we're at twenty eight percent growth. EV market is 51 00:02:53.360 --> 00:02:56.520 up just over thirty percent year to date, and then 52 00:02:56.599 --> 00:02:59.680 the energy storage market is up over forty percent year 53 00:02:59.680 --> 00:03:02.960 to date. So that's certainly well with seeing the strongest 54 00:03:03.000 --> 00:03:05.919 go throup from from the battery perspective. I think the 55 00:03:05.919 --> 00:03:07.879 other thing just to kind of highlight before we get 56 00:03:07.919 --> 00:03:10.680 into the kind of detail of the different markets, is 57 00:03:11.000 --> 00:03:13.560 in terms of the chemistry spits that we're seeing. We're 58 00:03:13.599 --> 00:03:17.520 now seeing LFP chemistry share in the EV market over 59 00:03:17.560 --> 00:03:20.319 fifty percent, and that's really on the back of strong 60 00:03:20.400 --> 00:03:25.319 sales in China and dominant in LFP in Chinese eds. 61 00:03:25.840 --> 00:03:28.039 And then of course in the storage market we're seeing 62 00:03:28.159 --> 00:03:31.240 well over ninety percent LFP share. So when you bring 63 00:03:31.280 --> 00:03:34.319 those two markets together, and because the storage market is 64 00:03:34.360 --> 00:03:37.080 growing a lot faster than the EV market, we do 65 00:03:37.159 --> 00:03:40.879 see this LFP market show really kind of growing its dominance. 66 00:03:41.639 --> 00:03:44.599 Explain a little bit about LFP and the different chemistries 67 00:03:44.639 --> 00:03:47.280 just because like a lot of all our listeners are 68 00:03:47.319 --> 00:03:49.960 experts in that area and just talk about really the 69 00:03:50.080 --> 00:03:52.960 changes that have taken place and in the last few years, 70 00:03:52.960 --> 00:03:54.639 so you can give context to people. 71 00:03:55.240 --> 00:03:55.800 Yeah for sure. 72 00:03:55.879 --> 00:03:56.080 Yeah. 73 00:03:56.120 --> 00:03:59.800 So LFP is a lithian iron phosphate battery that is 74 00:03:59.840 --> 00:04:02.719 the cathode chemistry, so it makes up half of the 75 00:04:02.879 --> 00:04:07.080 ATHMI and battery on the energy have graphiede. That chemistry 76 00:04:07.280 --> 00:04:10.439 historically was seen as maybe not as a good option 77 00:04:10.719 --> 00:04:14.400 for evs for high power could of applications because it 78 00:04:14.439 --> 00:04:17.879 had a lower energy density. However, there've been significant improvements 79 00:04:17.920 --> 00:04:20.439 over the last few years that has enabled that chemistry 80 00:04:20.680 --> 00:04:25.240 to now be used more widespread. The alternative chemistry is NCM, 81 00:04:25.279 --> 00:04:29.160 which is nickel colbot manganese. That chemistry does have intrinsically 82 00:04:29.199 --> 00:04:32.639 higher energy density behind it. But we've seen this big 83 00:04:32.680 --> 00:04:36.120 advancement in how good LFP is and what that means 84 00:04:36.160 --> 00:04:39.399 is we're now seeing it really deployed across all vehicles, 85 00:04:39.399 --> 00:04:43.959 depending on if your small segment A class cheapest vehicles 86 00:04:44.000 --> 00:04:45.839 all the way through to the premium end in the 87 00:04:45.920 --> 00:04:48.720 Chinese market, and in China, you know, we see over 88 00:04:48.800 --> 00:04:52.439 eighty percent lfp SHA in evs outside of China is 89 00:04:52.439 --> 00:04:54.240 a bit of a different story, and maybe we can 90 00:04:54.319 --> 00:04:56.680 get into some details on that and a bit later. 91 00:04:57.519 --> 00:05:00.720 Those cells which are like a big book bo and 92 00:05:00.800 --> 00:05:02.959 of course now I don't know if it's the state 93 00:05:03.000 --> 00:05:04.680 of the art, but you know, we see it pretty 94 00:05:04.720 --> 00:05:07.680 much everywhere. It's what we call the three fourteen and 95 00:05:07.879 --> 00:05:13.279 power cell from COTL. Is it exactly the same blog 96 00:05:13.319 --> 00:05:16.759 who goes into a car and an ESS system? Or 97 00:05:17.480 --> 00:05:20.199 you see a divergence, you know, even if the chemistry 98 00:05:20.240 --> 00:05:24.319 says the same, how the form factor diverging. 99 00:05:24.639 --> 00:05:28.439 Yes, a big divergent. Historically, the energy storage market was 100 00:05:28.480 --> 00:05:31.120 really using the same cells you're using EV. It was 101 00:05:31.120 --> 00:05:33.600 almost acting as a bit of a surplus market whatever 102 00:05:33.720 --> 00:05:37.040 was leftover with fun of that towards storage. However, over 103 00:05:37.079 --> 00:05:40.279 the last few years, the storage market has become very 104 00:05:40.319 --> 00:05:43.639 dedicated in its cell design. So those three one, four 105 00:05:43.839 --> 00:05:47.519 and power cells you referred to are specific energy storage cells. 106 00:05:48.079 --> 00:05:50.600 In the EV market would see pretty different four factors 107 00:05:50.639 --> 00:05:54.360 being used, things like the BYD blade battery, which is 108 00:05:54.560 --> 00:05:57.600 the really kind of long thin battery pack which allows 109 00:05:57.600 --> 00:06:01.240 you to get high and density in a vehicle. Those three, 110 00:06:01.279 --> 00:06:04.040 one four empower cells and storage and now being pushed 111 00:06:04.040 --> 00:06:06.720 to the next level. We see five hundred and power 112 00:06:06.839 --> 00:06:10.519 plus cells entering production, and actually just a couple of 113 00:06:10.560 --> 00:06:14.680 weeks ago we saw byd announcer twenty seven hundred and 114 00:06:14.720 --> 00:06:17.839 ten and power cell. It's fun to see some huge, 115 00:06:17.920 --> 00:06:21.360 huge cells come through. How kind of practical that is 116 00:06:21.399 --> 00:06:23.079 in the real world is still a bit of a 117 00:06:23.120 --> 00:06:25.720 question mark, but that's definitely a big trend of scene 118 00:06:25.839 --> 00:06:28.680 is these cells are getting bigger and bigger dedicated to 119 00:06:28.720 --> 00:06:31.680 the storage market. And really the reason behind that is 120 00:06:31.720 --> 00:06:33.879 because one of the key ones is driving down cost 121 00:06:34.360 --> 00:06:37.639 because when you then put that into a containerized solution, 122 00:06:38.160 --> 00:06:41.800 you get much more energensity within your twenty foot container 123 00:06:41.839 --> 00:06:44.839 for example, but are less components, less other parts of 124 00:06:44.839 --> 00:06:47.560 the cell and starts to have big implications all cost. 125 00:06:48.240 --> 00:06:50.879 That's probably a good segue into talking about costs. So 126 00:06:50.920 --> 00:06:53.639 maybe could talk a little bit about what's happened at 127 00:06:53.680 --> 00:06:56.639 the cell level and also the pack level, which is 128 00:06:56.720 --> 00:06:58.680 over the last whatever eighteen months. 129 00:06:59.199 --> 00:07:02.480 Ultimately, let's if we talk about say the storage market 130 00:07:02.519 --> 00:07:04.800 and the eed market slightly individually. For we were to talk 131 00:07:04.839 --> 00:07:09.399 about cell prices. Essentially, cell prices have fallen significantly over 132 00:07:09.399 --> 00:07:11.680 the last few years. End of three twenty two was 133 00:07:11.720 --> 00:07:14.839 when we saw the highs. Really that's timed with when 134 00:07:15.040 --> 00:07:19.360 the liftium carbon lilyting hydroxyen price reached its highs. Since then, 135 00:07:19.399 --> 00:07:23.240 the raw material prices have declined significantly, reaching their current 136 00:07:23.319 --> 00:07:26.040 kind of floor. However, at the same time, we've also 137 00:07:26.120 --> 00:07:28.920 seen innovation happening at the cell at the system level, 138 00:07:29.240 --> 00:07:32.199 which is also driving down that cost decline that we've seen. 139 00:07:32.920 --> 00:07:36.560 So you have two huge drivers for cost decline coming 140 00:07:36.600 --> 00:07:40.480 through when we look at the system level costs. For example, 141 00:07:40.480 --> 00:07:43.680 for energy storage in the Chinese market, now we see 142 00:07:43.720 --> 00:07:46.920 projects which are going through seventy dollars killer what hour 143 00:07:47.000 --> 00:07:50.519 system costs. That price could have easily been three four 144 00:07:50.560 --> 00:07:51.920 times that a couple of years ago. 145 00:07:52.319 --> 00:07:54.319 And when you say seventy you're just talking about the 146 00:07:54.319 --> 00:07:55.279 battery practice, not. 147 00:07:55.279 --> 00:08:02.079 Including containerized AC solution plus installation in China. In the 148 00:08:02.120 --> 00:08:05.160 Middle East walls seen prices similar level to that. If 149 00:08:05.160 --> 00:08:08.199 we were to then compare that to say the US market, 150 00:08:08.519 --> 00:08:11.800 if you were to use say Tesla Megapak AC solution, 151 00:08:12.279 --> 00:08:16.560 you'd be looking over two hundred dollars. 152 00:08:15.439 --> 00:08:19.079 Because even you in your Motion Benchmark and Bloomberg everybody. 153 00:08:19.439 --> 00:08:23.120 We were making those predictions even three four years ago 154 00:08:23.720 --> 00:08:26.879 that would see those curves going down and going towards 155 00:08:27.120 --> 00:08:31.160 one hundred dollars tokilo when I were at eleven and 156 00:08:31.279 --> 00:08:35.200 five years earlier, we're at seventy At system level. 157 00:08:35.720 --> 00:08:39.000 Absolutely at that milestone, you've really just blew past it. 158 00:08:39.360 --> 00:08:42.480 At the cell level now, for an LFP cell in China, 159 00:08:42.600 --> 00:08:45.799 you know we hear prices from thirty to forty dollars 160 00:08:45.879 --> 00:08:48.840 kill a hour. So yeah, incredible strides that have been made. 161 00:08:49.279 --> 00:08:51.440 Can I twitch down to evs and talk a little 162 00:08:51.480 --> 00:08:54.679 bit about that, because what for me is interesting is 163 00:08:54.759 --> 00:08:56.960 just I'm obviously looking at two things. I'm looking at 164 00:08:57.080 --> 00:08:59.120 range of the cars. Does the range of the cars 165 00:08:59.120 --> 00:09:02.000 are getting better? And what you're also seeing is the 166 00:09:02.039 --> 00:09:04.360 costs of them are coming down. But when I listen 167 00:09:04.399 --> 00:09:07.200 to the prices you talk about, I cannot imagine that 168 00:09:07.240 --> 00:09:11.399 those prices are in the EV that I'm buying right now, 169 00:09:11.639 --> 00:09:12.200 or are they. 170 00:09:12.960 --> 00:09:16.559 We see some cheaper batteries going through to vehicles. I'd 171 00:09:16.559 --> 00:09:20.159 say the Chinese market more so than elsewhere. Those sort 172 00:09:20.159 --> 00:09:22.720 of low, really low prices that we are seeing would 173 00:09:22.720 --> 00:09:26.399 be typical of more storage cells. We see maybe some 174 00:09:26.720 --> 00:09:29.639 lower quality cells going in storage compared to the EV 175 00:09:29.759 --> 00:09:33.600 market in terms of how that translates to actual evs. 176 00:09:33.960 --> 00:09:36.039 One thing we do is we track, for say, the 177 00:09:36.039 --> 00:09:39.960 top fifteen vehicles for BEV and ICE in each market. 178 00:09:40.159 --> 00:09:43.080 What's the price differential that we're currently seeing. And in 179 00:09:43.159 --> 00:09:46.639 China we now see a four percent price of differential, 180 00:09:46.720 --> 00:09:49.600 So it's four percent cheaper to buy an EV in 181 00:09:49.720 --> 00:09:52.799 China compared to an ICE vehicle. If we then compare 182 00:09:52.840 --> 00:09:55.799 that to the US and the European market, in the 183 00:09:55.919 --> 00:09:59.759 US is forty four percent more expensive to buy an EV, 184 00:10:00.360 --> 00:10:03.080 and then in Europe it's eighty three percent more expensive 185 00:10:03.120 --> 00:10:04.519 to buy an EV right now. 186 00:10:04.840 --> 00:10:10.240 Eighty three percent more expensive? And is that still just 187 00:10:10.320 --> 00:10:13.519 because the automobile manufacturers have gone at the upper end 188 00:10:13.559 --> 00:10:15.799 of the market when they're bringing electric cars? 189 00:10:15.879 --> 00:10:16.639 Is that the reason? 190 00:10:17.120 --> 00:10:19.279 That's definitely a big cause of it. We asked some 191 00:10:19.399 --> 00:10:23.279 to see the entry of some smallest segment vehicles in 192 00:10:23.279 --> 00:10:25.919 the European market, but they still make up a pretty 193 00:10:25.919 --> 00:10:28.120 small market share and they still come in at the 194 00:10:28.240 --> 00:10:29.000 high price point. 195 00:10:29.399 --> 00:10:31.960 Can I ask then, what we saw on twenty twenty 196 00:10:32.000 --> 00:10:34.159 five towards the end of the year was we saw 197 00:10:34.399 --> 00:10:38.279 Volkswagen beginning to sort of shutter its production. I'm talking 198 00:10:38.320 --> 00:10:40.600 about EV production, and then I look at it and 199 00:10:40.600 --> 00:10:43.799 I sort of say, is this a Volkswagen problem or 200 00:10:43.960 --> 00:10:46.879 is this a problem with EV's In general? My own 201 00:10:46.919 --> 00:10:49.440 gut reaction would be, this is a problem with Volkswagen 202 00:10:49.879 --> 00:10:51.960 and they just don't have that costs in order, because 203 00:10:51.960 --> 00:10:55.080 I see, if I look what Buid is producing and 204 00:10:55.120 --> 00:10:57.440 I compare it to Volkswagen, I go, I'm not going 205 00:10:57.440 --> 00:10:59.480 to buy the Volkswagen, but I'd love to hear. 206 00:10:59.360 --> 00:10:59.919 Your view on it. 207 00:11:00.519 --> 00:11:04.240 When we look at European sales this year, broadly, they've 208 00:11:04.279 --> 00:11:06.960 been good. We're seen so last year penetration rate in 209 00:11:07.000 --> 00:11:10.159 Europe was twenty percent and this year we're expecting to 210 00:11:10.159 --> 00:11:13.240 finish the year at twenty six percent. And WIST noticing 211 00:11:13.279 --> 00:11:15.399 as well that last year we actually saw a decline 212 00:11:15.399 --> 00:11:18.480 in penetration rates. So really you're you're kind of comparing 213 00:11:18.480 --> 00:11:21.879 it to two years ago, and yeah, twenty six percent. Caution, 214 00:11:22.080 --> 00:11:25.399 vehicles being sold in the European market are electric right now, 215 00:11:25.519 --> 00:11:28.320 so progress is good. Compare that to the US, it's 216 00:11:28.360 --> 00:11:31.279 about ten percent. A lot more is really kind of happening. 217 00:11:31.600 --> 00:11:34.440 The key reason behind that is the EU policy. So 218 00:11:34.960 --> 00:11:38.039 this year was a step change year in CEO two 219 00:11:38.159 --> 00:11:41.159 emission policy. What that means is OEMs were required to 220 00:11:41.200 --> 00:11:44.639 sell a great number of evs in order to avoid fines. 221 00:11:45.039 --> 00:11:47.519 When we then put down the context of how different 222 00:11:47.840 --> 00:11:52.159 European OEMs are doing, we have certainly seen an uptick 223 00:11:52.399 --> 00:11:55.200 from vehicles coming from elsewhere. In the first half of 224 00:11:55.200 --> 00:11:58.159 the year, for example, just over a million evs were 225 00:11:58.159 --> 00:12:03.559 sold in Europe and twenty percent that was coming from China. Interestingly, 226 00:12:03.600 --> 00:12:06.240 that's actually a decline in market share compared to last year, 227 00:12:06.440 --> 00:12:08.759 and we saw about twenty five percent coming from China 228 00:12:08.840 --> 00:12:11.919 last year. You know, the volumes have been pretty strong. 229 00:12:12.360 --> 00:12:14.320 One thing to know, and I think that's one of 230 00:12:14.360 --> 00:12:17.480 the key things is Europe did introduce tariffs on Chinese 231 00:12:17.559 --> 00:12:21.600 vehicles last year, but those tariffs only imply to bebs. 232 00:12:21.720 --> 00:12:24.519 So we've seen a big uptick in plug and hybrids 233 00:12:24.559 --> 00:12:28.360 coming from Chinese players into the European market, and BYD's 234 00:12:28.440 --> 00:12:30.399 plug and hybrid's being one of the key ones there. 235 00:12:31.080 --> 00:12:34.519 That's a lot of information. Let me process it. So 236 00:12:34.840 --> 00:12:39.080 twenty five percent penetration in Europe, of which how many 237 00:12:39.320 --> 00:12:42.360 of those cars are producing Europe, how many of those 238 00:12:42.440 --> 00:12:47.559 cars are produced by European OEM but in China, and 239 00:12:47.600 --> 00:12:51.000 how much are pure Chinese? Do you have that split 240 00:12:51.720 --> 00:12:52.559 just in terms. 241 00:12:52.279 --> 00:12:55.759 Of once produced within Europe? A seventy percent in first 242 00:12:55.759 --> 00:12:56.159 half of. 243 00:12:56.080 --> 00:12:58.039 The year, So that's good. That's good. 244 00:12:58.360 --> 00:13:01.559 Yeah, and that was up from it averaged around sixty 245 00:13:01.559 --> 00:13:04.440 five percent over the last five years. That is a 246 00:13:04.480 --> 00:13:07.799 clear indicator that things like those tariffs are having an 247 00:13:07.799 --> 00:13:08.519 impact on that. 248 00:13:09.320 --> 00:13:10.960 Which brand are the best? 249 00:13:11.519 --> 00:13:14.320 So in terms of the top players in the EU, 250 00:13:14.600 --> 00:13:17.840 you've got VW leading the way year to date and 251 00:13:17.879 --> 00:13:20.919 they've actually sold basically the same amount in the first 252 00:13:21.000 --> 00:13:22.679 eight months of the year as what they've sold in 253 00:13:22.679 --> 00:13:25.399 the full year twenty twenty four. Next up you have 254 00:13:25.720 --> 00:13:30.080 BMW and there's a big differential. Bw's sold about three 255 00:13:30.159 --> 00:13:33.679 times more than BMW has year to date. And then 256 00:13:33.799 --> 00:13:36.879 next behind that you have Stilantus with just over two 257 00:13:36.960 --> 00:13:39.480 hundred thousand units in the first eight months of the year. 258 00:13:40.039 --> 00:13:43.679 Worth noting as well that Tesla in the first eight 259 00:13:43.720 --> 00:13:47.399 months of the year is currently coming in in eighth position, 260 00:13:47.720 --> 00:13:50.960 whereas last year for the full year, they were in 261 00:13:51.039 --> 00:13:54.720 second place, so big big draph hole there for Tesla sales. 262 00:13:55.320 --> 00:13:57.519 Can I ask you and how about bid on that list? 263 00:13:57.799 --> 00:14:01.919 P ID is coming in on tenth with just under 264 00:14:01.960 --> 00:14:05.200 one hundred thousand sales, which you know is quite a big 265 00:14:05.200 --> 00:14:07.480 step up because last year for the full year they 266 00:14:07.480 --> 00:14:10.200 did about half that. They have doubled in just the 267 00:14:10.240 --> 00:14:11.440 first eight months of the year. 268 00:14:12.159 --> 00:14:15.759 I see all the those new ships they have. In fact, 269 00:14:15.759 --> 00:14:18.279 they can export much more now because they own their 270 00:14:18.320 --> 00:14:22.320 own fleet. Okay, so that's Europe. Can we switch to 271 00:14:22.360 --> 00:14:24.519 the rest of the world. You know, before we look 272 00:14:24.559 --> 00:14:27.840 back into China, we hear that in the rest of 273 00:14:27.840 --> 00:14:31.360 the world is very strong and it's mostly Chinese. Would 274 00:14:31.360 --> 00:14:33.639 you see the same way, Yeah. 275 00:14:33.480 --> 00:14:37.919 For sure, definitely seeing the expansion of Chinese OEMs elsewhere 276 00:14:37.960 --> 00:14:40.919 in the world. If we look at South American markets, 277 00:14:41.080 --> 00:14:44.720 the Australian market, the rest of Asia, really start to 278 00:14:44.720 --> 00:14:47.840 see the dominance of Chinese players coming through there at 279 00:14:47.879 --> 00:14:51.600 the loss of other key players historically, particularly players at 280 00:14:51.600 --> 00:14:54.639 the Japanese and the Koreans, if historically had good market 281 00:14:54.720 --> 00:14:58.399 share in the ice market and places like Australia, they're 282 00:14:58.440 --> 00:15:02.559 really losing out to China. The EU manufacturers and you know, 283 00:15:02.559 --> 00:15:05.120 it's reflective as well in the chemistry split that we 284 00:15:05.200 --> 00:15:08.200 see coming through in the rest of the world, whereas 285 00:15:08.480 --> 00:15:11.519 Europe and the US we aren't seeing that much LFP 286 00:15:11.679 --> 00:15:15.399 come through yet because the Chinese influence is smaller in 287 00:15:15.480 --> 00:15:17.960 those rest of the world regions, we do see strong 288 00:15:18.039 --> 00:15:20.320 dominance of Chinese cells in there as well. 289 00:15:20.960 --> 00:15:22.720 I own it earlier in the year. What I did 290 00:15:22.840 --> 00:15:24.320 was I just went and had a look at the 291 00:15:24.360 --> 00:15:28.799 costs of production of say a bid against a Volkswagen. 292 00:15:29.200 --> 00:15:31.559 And what I've said I realized was just the cost 293 00:15:31.639 --> 00:15:35.120 advantage that BYD had. Where I'm coming from that is 294 00:15:35.399 --> 00:15:38.200 that surely means going forward that BYD is just going 295 00:15:38.240 --> 00:15:40.840 to continue in a market share going forward. Would you 296 00:15:40.879 --> 00:15:42.799 have a similar view with that or how would you 297 00:15:42.799 --> 00:15:43.399 think about this? 298 00:15:44.080 --> 00:15:46.360 It's something that we ran quite a lot of analysis on 299 00:15:46.679 --> 00:15:49.480 when the tarists were introduced, really to kind of see 300 00:15:49.879 --> 00:15:53.519 how much potential do these Chinese players have to absorb 301 00:15:53.639 --> 00:15:57.080 tarak cops essentially and still offer their products at a 302 00:15:57.120 --> 00:15:59.799 similar parts to what they may get from a traditional 303 00:15:59.840 --> 00:16:03.679 um The production costs come in a lot lower in 304 00:16:03.799 --> 00:16:06.919 terms of current price to the market. They are applying 305 00:16:06.919 --> 00:16:10.480 pretty big margins with within Europe, so the price differential 306 00:16:10.519 --> 00:16:13.639 that consumer sees isn't as significant as what you would 307 00:16:13.679 --> 00:16:16.159 see from the production side. I think the other thing 308 00:16:16.159 --> 00:16:18.519 to consider as well is just how things play out 309 00:16:18.559 --> 00:16:21.480 with tariff's strategy. Right now, there is this loopholeer of 310 00:16:21.480 --> 00:16:25.679 plug in hybrids. Whether that gets shots is a question mark. 311 00:16:26.240 --> 00:16:28.440 At the same time, you potentially there's talk now of 312 00:16:28.679 --> 00:16:31.799 Trump suggesting that Europe needs to impose one hundred percent 313 00:16:31.919 --> 00:16:36.480 tariff on China, on India or on other countries. If 314 00:16:36.519 --> 00:16:38.799 anything like that comes through, that could obviously then change 315 00:16:38.799 --> 00:16:42.360 the dynamic quite significantly, and given the tariff world that 316 00:16:42.399 --> 00:16:44.679 we live in these days, and nothing is really asked 317 00:16:44.720 --> 00:16:47.320 the question when it comes to potential variations. 318 00:16:48.039 --> 00:16:49.480 I read a lot about to go in the press, 319 00:16:49.559 --> 00:16:52.200 and the great thing is sources always well motion, so 320 00:16:52.240 --> 00:16:55.279 you can go back to the source. When it's come 321 00:16:55.320 --> 00:17:00.519 to China, the situation seems absolutely absurd. I read that 322 00:17:00.600 --> 00:17:04.319 they sell more IV in China than the old US market, 323 00:17:04.680 --> 00:17:08.799 So that's number one. But number two is the factory 324 00:17:09.200 --> 00:17:13.000 capacity that they have put together. Because we always talk 325 00:17:13.039 --> 00:17:15.279 about DYD and a few others, but you know, there 326 00:17:15.279 --> 00:17:19.240 are hundreds of brands and there's a price war, and 327 00:17:19.279 --> 00:17:21.680 of course byd say I'm going to survive, but the 328 00:17:21.720 --> 00:17:23.799 others are going to go down, especially the one who 329 00:17:23.799 --> 00:17:27.880 can't export. So I hear the capacity of fifty million 330 00:17:28.000 --> 00:17:31.240 cars in China or something like this, which is like 331 00:17:31.400 --> 00:17:36.200 three quarters of the world market every engine combined. So 332 00:17:36.400 --> 00:17:39.759 what's your take on what's going on in China because 333 00:17:39.799 --> 00:17:41.240 they clearly overbuilt. 334 00:17:41.799 --> 00:17:44.880 Yeah, yeah, definitely things in China I think are accelerating. 335 00:17:45.279 --> 00:17:49.079 Furse don't really any analyst expectations. One thing I just 336 00:17:49.079 --> 00:17:50.880 did I look at for this cool because I was 337 00:17:51.400 --> 00:17:53.960 curious to see how it's changed in the last year 338 00:17:54.079 --> 00:17:58.480 or so. So currently this year, China penetration sits at 339 00:17:58.480 --> 00:18:02.480 about fifty percent twenty thirty. We're forecasting that to reach 340 00:18:02.839 --> 00:18:05.880 just under eighty percent. If we compare that to our 341 00:18:05.920 --> 00:18:09.160 forecast from Q one of last year, we were only 342 00:18:09.200 --> 00:18:12.200 expecting it to reach sixty five percent. So basically, over 343 00:18:12.319 --> 00:18:14.359 the last year and a half, our view of that 344 00:18:14.480 --> 00:18:18.599 Chinese market has accelerated so much because of how quickly 345 00:18:18.680 --> 00:18:21.480 things are moving and how commitments continue to be made 346 00:18:21.759 --> 00:18:24.759 on the policy side from the OEMs themselves, and also 347 00:18:24.799 --> 00:18:28.960 the cost advantages too. So there's really no stopping Chinese 348 00:18:29.000 --> 00:18:31.799 market growth at this point. There is definitely an element 349 00:18:31.920 --> 00:18:36.519 of oversupply, price wars, a lot of competition. We're going 350 00:18:36.559 --> 00:18:39.880 to see a lot of consolidation in the market for sure, 351 00:18:40.319 --> 00:18:42.759 But in terms of market growth, it seems to be 352 00:18:43.079 --> 00:18:46.839 a key pillar of China's next five year plan and 353 00:18:47.079 --> 00:18:49.400 they see it as a key industry for supporting that. 354 00:18:49.519 --> 00:18:52.240 So yeah, expecting strong growth to continue. 355 00:18:52.880 --> 00:18:54.799 Can I ask what's your view and the rest of 356 00:18:54.839 --> 00:18:58.039 the world then, are you upping your numbers there or 357 00:18:58.160 --> 00:19:00.000 downing them or how do you see that? 358 00:19:00.720 --> 00:19:03.359 The US one is the one which is probably the 359 00:19:03.359 --> 00:19:07.480 most shocking and understand not surprisingly so given the changing 360 00:19:07.559 --> 00:19:10.599 policy landscape that we've seen this year. We're comry sas 361 00:19:10.720 --> 00:19:14.319 about ten percent market share for bvs and plug and hybrids. 362 00:19:14.759 --> 00:19:19.079 By twenty thirty, we're now expecting eighteen percent market share, 363 00:19:19.599 --> 00:19:22.680 whereas comparing to that same T one twenty twenty four 364 00:19:22.759 --> 00:19:26.279 data point, we were expecting forty percent market share. So 365 00:19:26.400 --> 00:19:29.079 really in the US you've got two major things which 366 00:19:29.119 --> 00:19:32.279 are impacting that forecast, with the removal of the EV 367 00:19:32.400 --> 00:19:34.799 tax credit that's seven and a half thousand dollars tax 368 00:19:34.799 --> 00:19:38.839 credit and then also the changes for the EPA's standards, 369 00:19:38.839 --> 00:19:42.519 so the emission standards, that policy was historically quite strict 370 00:19:42.880 --> 00:19:45.400 in terms of what are required for people to sell. 371 00:19:45.960 --> 00:19:48.559 The removal lot can strip back of those is going 372 00:19:48.599 --> 00:19:51.240 to be a big one, along with CAFE standards, that 373 00:19:51.359 --> 00:19:55.319 CARB standards, various different emission related standards that the exist 374 00:19:55.400 --> 00:19:57.519 in the US that are already going to going away 375 00:19:57.599 --> 00:19:58.759 under the current administration. 376 00:20:00.000 --> 00:20:04.920 Seconds have decided to ncap the ev industry because their 377 00:20:05.039 --> 00:20:08.200 OEMs are struggling to convert and b they've got a 378 00:20:08.240 --> 00:20:11.559 lot of cheap oil. But there is clearly a divergence. 379 00:20:11.839 --> 00:20:14.680 You see China going on one side, and then some 380 00:20:14.759 --> 00:20:17.839 parts of Europe following quite fast, and as you said, 381 00:20:17.880 --> 00:20:20.039 some part of the rest of the world following because 382 00:20:20.680 --> 00:20:23.079 probably more at the expense of the Japanese than the 383 00:20:23.119 --> 00:20:26.359 German because there's a lot of segments that the Chinese 384 00:20:26.359 --> 00:20:28.759 are in and used to be taken over by the 385 00:20:28.880 --> 00:20:32.880 Japanese and the coins. Do you see those trends well 386 00:20:33.000 --> 00:20:36.000 established and going on like this till the end of 387 00:20:36.000 --> 00:20:36.799 the decade. 388 00:20:37.200 --> 00:20:39.240 Yeah, there's a lot of uncertainty in the market and 389 00:20:39.440 --> 00:20:42.640 we are increasingly seeing OEMs announced that they're going to 390 00:20:42.839 --> 00:20:46.359 where they had committed switching lines or building facilities dedicated 391 00:20:46.359 --> 00:20:50.039 to evs, calling back on those plans, pushing out the 392 00:20:50.400 --> 00:20:54.359 launch dates of various EV models. So the momentum has 393 00:20:54.400 --> 00:20:56.839 definitely been kind of switched off on the TV side. 394 00:20:57.240 --> 00:20:59.440 One thing that that's kind of a silver lining for 395 00:20:59.480 --> 00:21:02.240 the battery and where we're seeing a lot of activity 396 00:21:02.319 --> 00:21:05.160 is the storage market in the US market. Now, we've 397 00:21:05.160 --> 00:21:09.400 seen whole range of the Korean cell manufacturers who had 398 00:21:09.759 --> 00:21:13.240 EV capacity that have taken those lines and converted it 399 00:21:13.319 --> 00:21:16.680 and making energy storage cells, and they see it as 400 00:21:16.720 --> 00:21:20.240 a more stable demand market that will continue over the 401 00:21:20.279 --> 00:21:23.920