Speaker 1: With Laurent's segle and from London and Gerard Reed from Berlin.
Speaker 1: This is redefining energy.
Speaker 2: Today. On redefining energy, we're going to talk about the
Speaker 2: future of the global automobile industry. Who the winners, the losers,
Speaker 2: and I suppose the challengers are.
Speaker 3: And the zombies because unfortunately we believe that some companies
Speaker 3: are not going to make it.
Speaker 2: Yeah, we believe there's going to be some zombies out there.
Speaker 3: And we don't even want to talk about the tariffs
Speaker 3: because it changes by the hour. We don't know who's
Speaker 3: going to tariff home and the spare parts and the batteries.
Speaker 3: So we really want to concentrate on the technology or
Speaker 3: technological edge of all those car manufacturers. Now, if we
Speaker 3: look at the IV market, and I'm quoting the excellent
Speaker 3: row Motion study for Q one twenty five, well four
Speaker 3: point five million evs was sold globally, which is a
Speaker 3: twenty nine percent increase compared to first quarter of two
Speaker 3: twenty four. Of course, China is very strong plus thirty
Speaker 3: six percent, but even Europe is very good plus twenty two,
Speaker 3: and even North America plus sixteen. So we have a
Speaker 3: continuous growth of the EV market.
Speaker 2: And by the way, a continuous decline of the internal
Speaker 2: combustion engine market. We've seen peak IC some years ago.
Speaker 3: To make sense of all this and to assess one
Speaker 3: car manufacturer after another, because I think it's important to go,
Speaker 3: you know, inside the brands and not just blah blah
Speaker 3: about the global market. Web invited one of the leading experts,
Speaker 3: and that is.
Speaker 2: Michael Dunn, and he's the CEO of San Diego based
Speaker 2: consultancy business called Don Insights. Yeah, listen, this guy has
Speaker 2: been around.
Speaker 1: You know.
Speaker 2: He was a president of General Motors Indonesia with a
Speaker 2: managing director of JD Power China, so he really does
Speaker 2: know what's going on in Asia, and we think age
Speaker 2: is particularly important because that's where a lot of the
Speaker 2: challenges are coming from exactly.
Speaker 3: So let's bring Mike on the show. Mike Kiln, finally,
Speaker 3: welcome to the show.
Speaker 1: Tremendous to be here with you. Been looking forward to
Speaker 1: this day.
Speaker 3: Oh my god, you made my day. Like your first question,
Speaker 3: super simplen to watch twenty four seventy five million cars
Speaker 3: producing the world, twenty six million in China. What the
Speaker 3: hell's going on?
Speaker 1: Welcome to the world in which China is the center
Speaker 1: of the global auto industry, the dominator, bigger than America,
Speaker 1: bigger than Europe, number one export in the world, number
Speaker 1: one DV maker, number one battery maker. You go down
Speaker 1: the list, there's China and then everyone else.
Speaker 3: We have decided not to talk about the trade wars,
Speaker 3: the tariffs and song We've decided to concentrate on the
Speaker 3: tech to be rerustrative. We have decided to kind of
Speaker 3: screen the major OEMs in the world and you'll give
Speaker 3: us your opinion. Are they leaders, are they challengers or
Speaker 3: are they strugglers. So we're going to start by China.
Speaker 3: That's because that's probably easier. So Number one byd.
Speaker 1: The single most exciting company, the fastest moving company in
Speaker 1: the world is byd IF. I had the opportunity to
Speaker 1: test drive their vehicles both here in the United States
Speaker 1: and Mexico recently. I can testify that in terms of
Speaker 1: quality and technology, fit and finish performance, they're right there
Speaker 1: with the Hyundais and Toyotas of the world. What's most
Speaker 1: astonishing about this is the speed with which they've risen
Speaker 1: to the top ranks. They're now bigger than Ford. In Nissan,
Speaker 1: they were valued at you know, nothing, five years ago.
Speaker 1: Today the third most valuable company in the world after
Speaker 1: Tesla and Toyota, and by all measures is they're just
Speaker 1: getting started. That most of their sales ninety percent of
Speaker 1: their sales are in China, but going forward they expect
Speaker 1: to sell millions globally, so they have the vertical integration.
Speaker 1: They make their own batteries, They're low cost, they're high quality,
Speaker 1: no wonder the executives from Toyota who recently visited there,
Speaker 1: went back to Japan and said, uh oh, we're in trouble. BYD,
Speaker 1: putting fear into the hearts of every auto executive world.
Speaker 4: Why today, Mike, I'm so glad you started with BYD
Speaker 4: because actually I put my money where I'm out is
Speaker 4: and I'm invested in them, have been for a while
Speaker 4: because I take that view the same as yourself. I
Speaker 4: don't put it as poetically as you do, but I
Speaker 4: would like you to talk a little bit about what
Speaker 4: is it that makes BYD special? What are they doing
Speaker 4: different than everybody else.
Speaker 1: We kind of have to go back to their origins
Speaker 1: as a company. What's their DNA nineteen ninety five, they
Speaker 1: start making batteries for sell phones. How did they beat
Speaker 1: out the Japanese and Korean battery makers at that time,
Speaker 1: cost down, low cost, and low cost. Again, this has
Speaker 1: been Wangchrang Fu's bible since day one, and that served
Speaker 1: the company well for the next twenty years as they
Speaker 1: got into evs. But really we didn't see this takeoff
Speaker 1: until twenty twenty. What happened in twenty twenty two things
Speaker 1: One is they had hired a designers from Europe, Wolfgang Egger,
Speaker 1: to design, engineer, and develop much better looking vehicles than
Speaker 1: ever before. So if you were in China during the
Speaker 1: two thousand and twenty tens, bid was kind of an
Speaker 1: also rant, not that exciting. People didn't really desire to
Speaker 1: own one. But under Wolfgangger they've come up with really
Speaker 1: good looking products for the first time. Second thing that
Speaker 1: happened the end of twenty twenty they came up with
Speaker 1: this battery called the Blade battery, which is arguably the
Speaker 1: most technologically advanced battery in the world today. There's some
Speaker 1: backstory there. They may have gotten some help from Apple
Speaker 1: on that, but who cares. BYD now has a formidable
Speaker 1: battery manufacturing capability, and then thirdly quietly BYD also has
Speaker 1: this semiconductor subsidiary they're building their own chips. So not
Speaker 1: only are they good at batteries, good looking vehicles, but
Speaker 1: now those features inside the car you're on, navigation, your maps,
Speaker 1: your entertainment, they're engineering that in house too, so massive
Speaker 1: vertical integration, low cost, better designs, and more advanced technology
Speaker 1: all happening at the same time. This is what explains
Speaker 1: their sales going up twelve x in five years, five
Speaker 1: hundred thousand to more than five million this year.
Speaker 3: And it looks like it's just the beginning because I've
Speaker 3: been chicking on their overseas factory which are planned, or
Speaker 3: the construction Brazil two hundred thousand, Thailand thousand, Indonesia, Contism,
Speaker 3: Hungary two hundred thousand, Mexico, Turkey. They're literally all over
Speaker 3: the place.
Speaker 1: All at once. In the old days, you'd say, well,
Speaker 1: let's venture out and build a plant in Brazil, for
Speaker 1: it's going to sell us one that's been idle. That's great,
Speaker 1: Let's go learn how to manufacture something overseas. No, they're
Speaker 1: going globally all at once, including too. This isn't manufacturing,
Speaker 1: but they're going into the Japanese market, which is almost heresy.
Speaker 1: No Chinese company would dare try to sell cars Japan
Speaker 1: until now bids there in forced trying to sell their
Speaker 1: products and arguably the toughest market in the world. They're
Speaker 1: going global at pace, and the chairman has said most
Speaker 1: of our future growth will be outside of China, where
Speaker 1: we can make some profits. This of course leads us
Speaker 1: to the United States, where today they don't have access.
Speaker 1: But the wildcoud out there is will President Trump three
Speaker 1: months from now wake up one day and say, hey,
Speaker 1: I've got a genius idea persuaded BYD to invest ten
Speaker 1: billion dollars here in the US the manufacturer cars and batteries,
Speaker 1: And we're often.
Speaker 4: Running Michael on that point there. It's sort of already
Speaker 4: happening because my Tesla Model three is a BYD battery
Speaker 4: in it, right, So it's sort of showing you the
Speaker 4: way forward. Isn't it that you have to cooperate with
Speaker 4: the Chinese?
Speaker 1: It really does. It looks like there's no workarounds. They
Speaker 1: own the battery manufacturing business, from a lot of mining
Speaker 1: to definitely processing to the cell manufacturing. It's hard to
Speaker 1: get a battery that doesn't have a Chinese aspect to
Speaker 1: it today.
Speaker 3: If we took about other Chinese OEM because I listened
Speaker 3: to your excellent podcast and you said there were one
Speaker 3: hundred and forty different manufacturers in China, in more than
Speaker 3: four hundred factories. Let's focus on a few big names,
Speaker 3: and because I don't want to least them are So
Speaker 3: we have Shanghai Automotive, we have Gielee, we have Shong
Speaker 3: Gong Automobile, Soon Automobile. I mean every time, it's two mediums,
Speaker 3: great wolves, expand I mean, do you have anyone you
Speaker 3: like or you follow in particular?
Speaker 1: Number one takeaways? There's BYD and everyone else BYD's in
Speaker 1: the class by itself. So then you go to the
Speaker 1: next level and you say, how do we think about
Speaker 1: these one hundred and forty We'll take the next ten.
Speaker 1: And if we look at the next ten nicely conveniently
Speaker 1: for us, there's five what I call OG companies old school,
Speaker 1: and there's five what I call techno gang companies. So
Speaker 1: those are newer companies that want to be the teslas
Speaker 1: of China. Okay, so within those two groups, you've named
Speaker 1: them already, But within the OG group, I'd put g
Speaker 1: L number one. They own the Vobo brand, poll Star, Zeeker, Lotus.
Speaker 1: They have ownership and Mercedes they're the next one to watch,
Speaker 1: and the Ogs. And then in the techno gang of five,
Speaker 1: it's very interesting. You've got this new company called CILB,
Speaker 1: second largest smartphone maker in the world, delivering a beautiful
Speaker 1: new product called the SU seven set the track record
Speaker 1: at nerveer Gring recently. They would be on the top
Speaker 1: of my list. Then you go to x Pun that
Speaker 1: heads that relationship with Volkswagen. They're also very impressive. So
Speaker 1: those are the three companies after BYD.
Speaker 4: Can I specifically ask you about the shelmy car because
Speaker 4: obviously smashing the Nurmberg Ring, this is a shock to
Speaker 4: the Germans. And also it's a shock because the car
Speaker 4: is like a fraction of the price of say the
Speaker 4: Porsche that it looks like.
Speaker 2: And I be interested to know just how the hell
Speaker 2: are they doing that?
Speaker 4: And even to maybe start, we're looking at European guys,
Speaker 4: how does a Porsche compete with these guys?
Speaker 1: Going forward? How do you compete with the Chinese? When
Speaker 1: the Chinese can manufacture at twenty five percent lower cost.
Speaker 1: That's the shock, that's the earthquake coming out of China.
Speaker 1: It isn't necessary that the Chinese are genius in terms
Speaker 1: of innovation, but they are genius in low cost and commercializing.
Speaker 1: So the backstory on Shelmi is so interesting. The founder
Speaker 1: Lei June met Lelon Musk ten years ago in China,
Speaker 1: took delivery of a models and said, one day, I
Speaker 1: hope to duplicate what you've done. And here we are
Speaker 1: ten years later. He's come up with this beautiful new product,
Speaker 1: great design performances there, and it's built in arguably one
Speaker 1: of the most highly automated factories in the world. If
Speaker 1: I'm an automotive executive from the West, I'm not afraid
Speaker 1: of Chinese companies by themselves. What I'm afraid of is
Speaker 1: their ability to manufacture high technology and low cost inside
Speaker 1: China in ways that no other nation can match. That's
Speaker 1: a problem for everybody that's not Chinese.
Speaker 3: Before we leave China, any other names because Neo, but
Speaker 3: he's seen Neo is losing money out over fist.
Speaker 1: Right, Neo, when your twenty second takeaway would be super ambitious,
Speaker 1: great visionary leader, spread too thick, doing everything all at once,
Speaker 1: and it's hard to make money that way.
Speaker 3: Okay, let's leave China, even if we come back on
Speaker 3: a regular basis. So let's just cross the Sea of
Speaker 3: Japan or the Sea of China, because now you don't
Speaker 3: know how you name the piece of of of sea.
Speaker 3: They change name all the.
Speaker 1: Time, Greater China.
Speaker 3: Yeah, so let's go to Japan. And of course Toyota,
Speaker 3: which is the eight hundred pound gorilla, lost a lot
Speaker 3: of time on the hydrogen dreams, which of course would
Speaker 3: never materialize, but seems to be quite okay with hybrids.
Speaker 3: So how do you see Toyota and the rest of
Speaker 3: the Japanese crowd.
Speaker 1: Just came back from a trip to Japan, met with
Speaker 1: several automakers there. My overwhelming takeaway was that there was
Speaker 1: there's Toyota, and then everyone else. Similar to BYD story,
Speaker 1: like Toyota's got its act together. It's not moving as
Speaker 1: quickly as we'd like them too, but they're highly profitable.
Speaker 1: They have a nice portfolio of products distributed across hybrids,
Speaker 1: plug in hybrids, and gasoline. They're making their way towards EVS.
Speaker 1: And when I talk to Chinese automakers, I ask them
Speaker 1: who do you fear in the world, and they say
Speaker 1: they're two companies to re respect. One is Tesla and
Speaker 1: the other's Toyota. Everyone else is sort of up for grabs.
Speaker 1: I'm confident that Toyota will find a way forward. The
Speaker 1: question is what about everyone else in Japan?
Speaker 3: Because Nissan is on his last leg and you still
Speaker 3: have Hondo. Yeah, maybe a merger, a merger will finish
Speaker 3: to up in in that chapter, or.
Speaker 1: No Honda that whole Nissan Mitsubishi with Honda, My concern
Speaker 1: is their core DNA has forever been building great engines
Speaker 1: for their motorcycles and their cars. So I'm fluent in
Speaker 1: Portugueze for decades and then someone comes along and says, no,
Speaker 1: you have to actually learn how to speak Chinese. Now
Speaker 1: what Honda will have a hard time making that transition
Speaker 1: to electric We've already seen it. That's what concerns me.
Speaker 3: Staying in the zone. Koreans, they seem to have adapted
Speaker 3: pretty well.
Speaker 1: Doing nicely both with their conventional gasoline products and their
Speaker 1: evs and smart making investments globally. Here in the United States,
Speaker 1: they just announced a huge additional investment into Atlanta. What
Speaker 1: separates the Koreans. I think they're just tenaciously competitive. They
Speaker 1: understand that they're a country the size of the state
Speaker 1: of Michigan, and there's no time for rest and they're
Speaker 1: just super zealous, work really hard and have a realistic
Speaker 1: appreciation for the competitive environment the world now enters, and
Speaker 1: they say, we have to move faster, work harder than
Speaker 1: everyone else. And they're doing a great job of that.
Speaker 3: And it's probably the only competitors of China was an
Speaker 3: integrated supply chain. Is there a scay and you know
Speaker 3: some sums.
Speaker 1: And some of the semiconductors, they're in good shape there. Now,
Speaker 1: I should hasten to add that no matter how good
Speaker 1: you are globally, global automakers, including Hyundai are really getting
Speaker 1: crushed in China today. Hyundai's numbers down about ninety percent
Speaker 1: from their peak in China. Can you believe that they're
Speaker 1: barely hanging on there? They've done nothing wrong. Products are great,
Speaker 1: but the sentiment inside China for consumers today is I'm
Speaker 1: going electric and I'm going to a Chinese brand, and
Speaker 1: every single non Chinese automaker is taking it on the chin.
Speaker 4: So, Michael, can we move a little bit towards the
Speaker 4: old world? And the old world for me is starts
Speaker 4: in Europe, and I would actually start in Germany with Volkswagen.
Speaker 4: If I look at Volkswagen For me, it's just inexcusable.
Speaker 4: They were the biggest manufacturer in China for the last decade,
Speaker 4: and they just seem so ill prepared for the future
Speaker 4: that you sort of have to wonder if it's going to
Speaker 4: be around. That's my assessment, but I'd love to hear yours.
Speaker 1: In a way, this is the second major shock for
Speaker 1: Volkswagen in China. I was there in early two thousands.
Speaker 1: At that time, Volkswagen was enjoying fifty percent market share
Speaker 1: in China, selling through two joint ventures. They owned the market.
Speaker 1: They were the king of the hill. Wto happened and
Speaker 1: all other automakers flooded in and suddenly Volkswagen was really
Speaker 1: under enormous pressure, losing market share, sales and profits. Through
Speaker 1: the early two thousands, they recovered, they rallied somehow against
Speaker 1: the odds. They found a way to update themselves for
Speaker 1: the China market, but that was building gasoline powered engines.
Speaker 1: This time around, they really look vulnerable. How do they
Speaker 1: come back at a time when the Chinese are getting
Speaker 1: stronger by the day. I don't know. They've lost over
Speaker 1: a million sales in the last five years in China.
Speaker 1: They've closing plants, there, it's going to be a lot
Speaker 1: harder to re cover. Their answer, we know, is to
Speaker 1: invest in x pump and try to sort of attach
Speaker 1: themselves with an up and coming Chinese player. That seems
Speaker 1: to be their formula going forward. They probably should have
Speaker 1: done it years ago, but that's where they are right now.
Speaker 3: Yeah, because look, they made a lot of bets, not
Speaker 3: of them winning. If you look at the went beg
Speaker 3: into Northwold, see the result. And also from a software perspective,
Speaker 3: I don't know how much billions they've burned into their
Speaker 3: software platform. It doesn't seem to work very well. Well
Speaker 3: at least they tried, but unfortunately they failed.
Speaker 1: Yes, big picture, guys, I think we're talking technology here.
Speaker 1: The software defined vehicle is a great differentiator. Tesla's there,
Speaker 1: several Chinese are there. Volkswagen has really struggled, as you say,
Speaker 1: with Carryat and they're a hopeful X punk relationship. They're
Speaker 1: hopeful in their Rivian relationship to save them, the rescue them.
Speaker 1: But without an exquisite software defined architecture, they're just not
Speaker 1: going to be competitive. No one will be. And that's
Speaker 1: where we are with Volkswagen today.
Speaker 3: The old Lady Mercy, it is uh huh, what's your take?
Speaker 1: This is going to be heresy or highly controversial. My
Speaker 1: German friends will probably not be happy to hear this.
Speaker 1: But to some extent, when I think of Mercedes today,
Speaker 1: I think this might already be a Chinese company. Look
Speaker 1: at the ownership. Nineteen and a half percent share belongs
Speaker 1: to Chinese groups that gi Le and Baic Wow, single
Speaker 1: largest shareholder in Mercedes. When I listen to the CEO
Speaker 1: talk about, well, we don't need to have tariffsu on
Speaker 1: Chinese cars here in Europe, I do wonder what's inspiring
Speaker 1: those words. And then unprecedented I saw he wrote an
Speaker 1: op ed that was published in the National People's Daily
Speaker 1: in China, which is a direct media organ of the
Speaker 1: Chinese Communist Party. I've never seen a Western CEO do
Speaker 1: that before, so to some extent I wondered, maybe maybe
Speaker 1: China already owns Europe's most iconic automotive.
Speaker 4: Michael, I'll jump on that and say, yeah, they're also
Speaker 4: manufacturing there, because at the end of the day, the
Speaker 4: Smart is not even manufactured, it's it's a Chinese car.
Speaker 1: Basically, right, you are right, the Smart, let's be honest,
Speaker 1: is Chinese now okay, BMW, BMW. I'm more optimistic. Why.
Speaker 1: I think that they retain their independence and they're still
Speaker 1: innovating and they'll find a way to survive. And this
Speaker 1: is where guys, I'm an American who lived in Asia
Speaker 1: for a long time, so I'm a little bit far
Speaker 1: from Europe the Old Continent. But as I look at things,
Speaker 1: I would say I bet on BMW finding a way
Speaker 1: to compete long term.
Speaker 4: By the way, Michael, I wanted to talk about the French,
Speaker 4: but they're useless and they have no chance to survive,
Speaker 4: and so we could probably not that.
Speaker 3: Interestingly, there is this group which is half European, half
Speaker 3: American and that kinda allows us to cross the Atlantic.
Speaker 3: It's stell Antis, which is really a pile of weak
Speaker 3: brands of being coupled up together. And they're now changing
Speaker 3: their CEO. So stell Anti's.
Speaker 1: Which is like what they have a new one yet.
Speaker 3: As we speak, I don't know. It must be very
Speaker 3: tough to manage all those dispread brands from Chiat to
Speaker 3: Open to Purge You to Chrysler to Wow. So stell
Speaker 3: Antis first, does it exist as a group or it's
Speaker 3: still different strategy The way you see it between the
Speaker 3: European side and the American side.
Speaker 1: Feels like Stellantis on the side of the ocean is jeep, yeah,
Speaker 1: and then on the other side of the ocean is
Speaker 1: the European brands. Here again, they wouldn't be surprised to
Speaker 1: see a Chinese automaker make a bid for one or
Speaker 1: more of those brands in the near future.
Speaker 3: Wow. Interesting?
Speaker 1: Why because they've done so well when they acquired the
Speaker 1: MG brand, they acquired the Volvo brand, it's been a
Speaker 1: winner so far, so why not pick off one of
Speaker 1: those brands from the Stilantis group.
Speaker 3: Okay? In the US, Ford GM, How do you see
Speaker 3: them from a technology point of view? Because Ford was
Speaker 3: quite ahead, but now it's seeing GM's coming back. Was
Speaker 3: it just pr or is there a bit of substance behind.
Speaker 1: Ford's rush into evs? I do feel as though, in
Speaker 1: retrospect was premature and mostly driven by a desire to
Speaker 1: make an impression on Wall Street. So they ran both
Speaker 1: the F one fifty Lightning not a good idea. You
Speaker 1: knew that their range wouldn't be there on the battery
Speaker 1: powered full size electric pickup truck. You know you've got
Speaker 1: long distances, high speeds, Hills cold weather towing and that's
Speaker 1: been a disappointment. Secondly, they really fitted battery arc texture
Speaker 1: onto cars that were designed for guests, so they sort
Speaker 1: of rush to markets Fords behind. In my mind, GM
Speaker 1: has done the right things in investing in crews and
Speaker 1: try and develop its own battery manufacturing capabilities with LGCM,
Speaker 1: but they have not executed well. So I feel as
Speaker 1: though as a detroiter I can feel their pain. They
Speaker 1: are companies one hundred years of manufacturing and suddenly the
Speaker 1: game has changed to things called chemicals that batteries and
Speaker 1: then again software defined vehicles, and it's so unfamiliar to them.
Speaker 1: How do they make that transformation? I'm very concerned about
Speaker 1: the future of those two companies. They'll be able to
Speaker 1: carry on in North America buildings, large trucks and SUVs
Speaker 1: for probably a couple more decades. But if you look
Speaker 1: outside the United States, where are Ford or GM competitive?
Speaker 1: Europe niche player right, yeah? Asia?
Speaker 3: No, they used to wreck billions every year in China
Speaker 3: last decade. Then now it's gone.
Speaker 1: Gone, swung from huge profits to losing losing Boku money.
Speaker 1: That's not good. The trend is not their front. GM.
Speaker 1: You know, took a five billion dollar charge last year.
Speaker 1: They used to take home two billion dollars a year
Speaker 1: in dividends for years, and now they're underwater, so it's
Speaker 1: forth okay.
Speaker 3: So that's the shrinkflation before we go to the last
Speaker 3: one world on Rivian? Are they going to survive as
Speaker 3: a stand alone company?
Speaker 1: In your opinion, the terriffs might buy them some time.
Speaker 1: They're all American, and who knows. If our ja get's
Speaker 1: on the good side of Donald Trump, he might put
Speaker 1: a Rivian on the lawn too and say this is
Speaker 1: a good American car. We should buy more of these.
Speaker 1: Take away on Rivian impressive leadership, quality car, quality company.
Speaker 1: But you know, let's remind ourselves how many new automakers
Speaker 1: outside of Tesla have been born in the last generation
Speaker 1: and survived. It's so glad to do. I used to
Speaker 1: have money and Rivian about two years ago. No, I
Speaker 1: don't have an appetite for that risk anymore, so I
Speaker 1: wouldn't you know. Our test right is always do we
Speaker 1: take the cash from our pocket and put it on
Speaker 1: that company. I'm not there.
Speaker 3: Yet, Michael. Let's finish our around the world trip with
Speaker 3: the most innovative and now the most controversial brand, the
Speaker 3: one who made it happen and now might be past
Speaker 3: to speak. Last year I did an episode and we
Speaker 3: ask ourselves as Teslamojo and everybody recognized five years ago
Speaker 3: they were like on the top of the world, and
Speaker 3: maybe they'll see you what has dropped the ball? How'd
Speaker 3: you see them the next five years?
Speaker 1: Several years ago I had the opportunity to sit down
Speaker 1: with Michael Mortz, who's one of the founding partners. That's
Speaker 1: a quare capital, highly regarded worldwide, and at the time
Speaker 1: I was asking him about the Apple project. I said,
Speaker 1: I'd like to get involved. I know you know Tim Cook,
Speaker 1: I know you know Elon Musk. How could I contribute?
Speaker 1: And he said, why would you want to go to
Speaker 1: Apple when the answer is right there with Elon WHOA
Speaker 1: that got my attention. This is already this is like
Speaker 1: twenty seventeen, twenty eighteen. He for one saw Elon as
Speaker 1: someone extraordinary, exceptional, and he's it's been proven out. So
Speaker 1: I know today there's a lot of controversy around Elon Musk,
Speaker 1: but the bottom line is I don't want to bet
Speaker 1: against him. I just don't want to. I think he
Speaker 1: will return to Tesla, and he's already called it an
Speaker 1: AI and robotics company. He's making a big bet on
Speaker 1: robo taxis. They're rolling them out in Texas soon, they've
Speaker 1: applied for permits here in California. I think we've were
Speaker 1: going to see great things out of Tesla in the
Speaker 1: coming years. I'm optimistic.
Speaker 4: So, Michael, maybe we can just zoom back up to
Speaker 4: big picture. I'd love to hear your views on how
Speaker 4: fast we electrify automobiles across the world.
Speaker 1: What do they say about the future is unevenly distributed?
Speaker 1: Here we go again, futures here unevenly distributed. We're going
Speaker 1: to see continued rapid development of evs in China last
Speaker 1: year was fifty percent of total sales. That's the China playbook.
Speaker 1: In the United States much different picture. I think that
Speaker 1: five years from now we'll see evs accounting for just
Speaker 1: ten percent of the market, maybe fifteen, and in Europe
Speaker 1: probably likely to land somewhere in between. So say by
Speaker 1: twenty thirty, let's put some numbers to it. China could
Speaker 1: be easily could be seventy five percent, US fifteen, Europe
Speaker 1: maybe thirty. So much depends on policy of course, but
Speaker 1: I see the rush to electrics being a national imperative
Speaker 1: in China and for the rest of the world, it's like, yeah, okay,
Speaker 1: it's an option, but it's just not mandatory in the
Speaker 1: short term.
Speaker 3: My John, I'm so pleased to have you finally on
Speaker 3: the show and a great conversation. I would have you
Speaker 3: for hours, but just an opportunity to extend a reinvitation
Speaker 3: next year to see how things have panned out. We
Speaker 3: kind of agree generally that it's an absolute party for China.
Speaker 3: In Europe still because we need to import a lot
Speaker 3: of oil, we'll be wobbling on the high side and
Speaker 3: the US. I share your skepticism, but very interestingly in
Speaker 3: the rest of the world, took in India, Southeast Asia,
Speaker 3: Brazil and so on. The qualification is going to go
Speaker 3: pretty fast as well.
Speaker 1: So overall, the thing we're watching is PHTV versus EVS.
Speaker 1: So I was in Mexico last week, just across the
Speaker 1: border here from San Diego BYDS store there and I
Speaker 1: asked them what's selling and they said EVS no, PHVs yes.
Speaker 3: Interesting.
Speaker 1: So that would fit in a lot of developing markets.
Speaker 1: You don't have to worry as much about the charging.
Speaker 4: Thank you very much, Michael, brilliant, happy.
Speaker 1: Thank you, great to join you guys.
Speaker 2: Thank you for the It was a lot of fun. Laurent.
Speaker 2: I'm going to use the word mind blowing. And the
Speaker 2: reason I say mind blowing is because I talk a
Speaker 2: lot from theory, from what I read, and this guy's
Speaker 2: coming up from practice, and he was just so forth
Speaker 2: right and open in his opinions in and around the
Speaker 2: different manufacturers, where they stand, where they don't stand, who's
Speaker 2: gonna win, who's gonna lose?
Speaker 3: A super Oh, it was great, such a pleasure, such
Speaker 3: a pleasure to do this podcast. So we have the
Speaker 3: opportunity to have great conversation with guests like Michael. Now,
Speaker 3: I did not realize a certain number of things. I
Speaker 3: did not realize that behind BYD there's going to be
Speaker 3: a lot of pain with the one hundred ish Chinese brand.
Speaker 3: If you look at Japan, Toyota is in a better
Speaker 3: shape than I thought. Of course now they've given up
Speaker 3: on hydrogen, but they look like they're resilient. But if
Speaker 3: you look at Nissan, oh my god, I was surprised
Speaker 3: by the fact that you thought that Korea was under threat. Yeah,
Speaker 3: so I really learned a lot.
Speaker 2: Yeah, and listening confirmed a few things that I was taught,
Speaker 2: which is that obviously Volkswagen is stuck in reverse gear.
Speaker 2: I'd also look at the manufacturers and actually think the
Speaker 2: German wants to say that BMW is the best position.
Speaker 2: He was sort of confirming this. I did find it
Speaker 2: interesting the point he made about Mercedes, which is it
Speaker 2: increasingly feels like a Chinese business. You know, Yeah, very interesting.
Speaker 3: And look, there is the wild card Tesla, and I
Speaker 3: know a lot of people have a lot of opinion
Speaker 3: about Ilon Musk, opinion which might have changed a lot
Speaker 3: in recent years. Look for me, rather than say something,
Speaker 3: I just want to pass the song.
Speaker 2: That's a good way to finish this podcast, right, That's
Speaker 2: a good way.
Speaker 3: I don't know what they're going to do with the
Speaker 3: robots or to the mus and everything, but what is
Speaker 3: clear is that there was so much ahead five years ago,
Speaker 3: and now while there's a there's a lot of competition.
Speaker 3: So yeah, it's going to be more challenging going forward.
Speaker 2: I think the one thing I would just say is this,
Speaker 2: it's been a huge damage onto the brand over the
Speaker 2: last six months anymore now mm hmm.
Speaker 3: Well, well, well we wish the best to everybody. But
Speaker 3: it's very clear that the k industry, which those big brands,
Speaker 3: are pretty stable from one decade to the other. At
Speaker 3: the end of this decade, there'll be a lot of
Speaker 3: guys left behind, which is sad, but that's capitalism.
Speaker 2: That's capitalism.
Speaker 3: Yeah, okay, Jad, great talking to you and I talk
Speaker 3: to you next week.
Speaker 4: The to us, Yeah, thank you for.
Speaker 2: Listening to Redefining Energy.
Speaker 1: Don't forget to read the show and subscribe on Apple, Podcast, Spotify,
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