1 00:00:00,560 --> 00:00:03,440 Speaker 1: This is Tom Rowland's Reese, and you're listening to Switched 2 00:00:03,480 --> 00:00:07,320 Speaker 1: on the podcast brought to you by Bloomberg NEF. Demand 3 00:00:07,360 --> 00:00:10,160 Speaker 1: for high performance chips in vehicles is taking off as 4 00:00:10,160 --> 00:00:13,640 Speaker 1: we move towards more automated and connected automobiles with new 5 00:00:13,640 --> 00:00:16,919 Speaker 1: safety standards and smarter driving systems, meaning that what's inside 6 00:00:16,960 --> 00:00:19,400 Speaker 1: the car is now just as important as what's under 7 00:00:19,400 --> 00:00:23,040 Speaker 1: the hood. As vehicles get more intelligent, the relationship between 8 00:00:23,040 --> 00:00:26,560 Speaker 1: car makers, chip makers, and suppliers is also changing fast. 9 00:00:26,920 --> 00:00:29,520 Speaker 1: What used to be a simple supply chain is now 10 00:00:29,560 --> 00:00:32,919 Speaker 1: a web of partnerships, with chip companies working directly with 11 00:00:32,960 --> 00:00:36,479 Speaker 1: automakers and car makers developing their own chips to stay ahead. 12 00:00:36,640 --> 00:00:39,199 Speaker 1: And these new processes are doing more than ever before, 13 00:00:39,400 --> 00:00:42,519 Speaker 1: running both the driving systems and the InCAR software that 14 00:00:42,640 --> 00:00:45,639 Speaker 1: keeps vehicles connected and aware. But as chip makers move 15 00:00:45,720 --> 00:00:49,479 Speaker 1: deeper into vehicle design and automakers start developing their own chips, 16 00:00:49,680 --> 00:00:52,960 Speaker 1: who really holds the advantage in this new landscape. On 17 00:00:53,040 --> 00:00:56,320 Speaker 1: today's show, I'm joined by Andrew Grant, Bloomberg and NIF's 18 00:00:56,360 --> 00:00:59,640 Speaker 1: head of Intelligent Mobility to discuss his team's note AI 19 00:00:59,760 --> 00:01:03,880 Speaker 1: chip to turning vehicles into supercomputers. BNAF clients can find 20 00:01:03,880 --> 00:01:07,279 Speaker 1: this note, along with AI and automotive research by heading 21 00:01:07,280 --> 00:01:10,280 Speaker 1: to BNF go on the Bloomberg terminal or visiting BNEF 22 00:01:10,360 --> 00:01:13,520 Speaker 1: dot com to learn more about how BNF approaches strategy 23 00:01:13,560 --> 00:01:17,240 Speaker 1: research on the energy transition, including developments in commodity markets, 24 00:01:17,240 --> 00:01:20,000 Speaker 1: sector trends, and the technology shaping the future. You can 25 00:01:20,000 --> 00:01:23,640 Speaker 1: find more information at BNEF dot com. So let's explore 26 00:01:23,640 --> 00:01:26,920 Speaker 1: how technology and intelligence are reshaping the global auto industry 27 00:01:27,120 --> 00:01:39,600 Speaker 1: and what it will take to turn automation into action. Andrew, 28 00:01:39,720 --> 00:01:41,559 Speaker 1: Welcome to the podcast today. 29 00:01:41,760 --> 00:01:42,680 Speaker 2: Thanks great to be here. 30 00:01:42,920 --> 00:01:46,600 Speaker 1: I've been looking forward to this because the intelligence and 31 00:01:46,720 --> 00:01:50,920 Speaker 1: automation of the automotive sector is such a fascinating topic, 32 00:01:50,960 --> 00:01:52,640 Speaker 1: and I think it is one of the ones that 33 00:01:52,920 --> 00:01:56,560 Speaker 1: conjures images of a brave new world, a bright new 34 00:01:56,600 --> 00:01:59,880 Speaker 1: future with real changes. Now. Obviously, as an analyst, you'll 35 00:01:59,880 --> 00:02:02,840 Speaker 1: typically finding your pouring cold water on people who get 36 00:02:02,880 --> 00:02:05,400 Speaker 1: excited about this stuff, but I've been looking forward to 37 00:02:05,400 --> 00:02:08,399 Speaker 1: this just to learn a little bit more about how 38 00:02:08,440 --> 00:02:10,799 Speaker 1: things are progressing there, and in particular, you know, we're 39 00:02:10,800 --> 00:02:14,919 Speaker 1: talking about how AI chips and for vehicles, how that 40 00:02:15,040 --> 00:02:18,080 Speaker 1: space is evolving but let's start with just more broadly, 41 00:02:18,160 --> 00:02:22,120 Speaker 1: the automotive semiconductor market, Like, how big is that as 42 00:02:22,200 --> 00:02:23,320 Speaker 1: things stand. 43 00:02:23,240 --> 00:02:26,360 Speaker 2: Well, thoma's always been a big market, and it's getting bigger. 44 00:02:26,480 --> 00:02:30,040 Speaker 2: As the semiconductor industry as a whole grows, so does 45 00:02:30,080 --> 00:02:33,959 Speaker 2: the automotive sector. So semiconductors in twenty twenty four were 46 00:02:34,040 --> 00:02:37,280 Speaker 2: worth about six hundred and thirty billion dollars globally. The 47 00:02:37,320 --> 00:02:40,520 Speaker 2: automotive sector over the last decade is held fairly constant, 48 00:02:40,600 --> 00:02:44,480 Speaker 2: somewhere between twelve and seventeen percent of that last year 49 00:02:44,480 --> 00:02:46,280 Speaker 2: has had about eighty billion dollars. So a lot of 50 00:02:46,280 --> 00:02:49,359 Speaker 2: money from the automotive psyche gets spent on chips that 51 00:02:49,400 --> 00:02:51,919 Speaker 2: go in vehicles, but there's quite a wide spectrum of 52 00:02:52,000 --> 00:02:54,400 Speaker 2: trips that actually make their way under the hood. You 53 00:02:54,480 --> 00:02:57,639 Speaker 2: have these domain controllers or kind of simple chips that 54 00:02:57,760 --> 00:03:00,359 Speaker 2: have a very specific job in the vehicle that control 55 00:03:00,400 --> 00:03:03,359 Speaker 2: the air bags, they control specific parts of the vehicle. 56 00:03:03,440 --> 00:03:06,640 Speaker 2: But what we're seeing more and more are really high performance, 57 00:03:06,720 --> 00:03:10,160 Speaker 2: really complex chip sets and computers that are being put 58 00:03:10,200 --> 00:03:13,080 Speaker 2: together and going into these vehicles that are doing really 59 00:03:13,080 --> 00:03:16,560 Speaker 2: complex sasks, and they're quite expensive chips in themselves, so 60 00:03:16,560 --> 00:03:19,440 Speaker 2: it's really changing the cost of putting a vehicle together 61 00:03:19,600 --> 00:03:22,280 Speaker 2: and the balance of parts that go into a vehicle. 62 00:03:22,520 --> 00:03:26,200 Speaker 1: That's so interesting. So we're kind of we're moving from 63 00:03:26,200 --> 00:03:30,280 Speaker 1: a world where the automotive industry is maybe thirteen percent 64 00:03:30,400 --> 00:03:33,600 Speaker 1: is pretty significant, but it's still a fraction of the 65 00:03:33,639 --> 00:03:37,520 Speaker 1: overall global chips market, and the chips are a relatively 66 00:03:37,520 --> 00:03:40,440 Speaker 1: small fraction of the overall cost of producing a vehicle. 67 00:03:40,640 --> 00:03:44,360 Speaker 1: Where in the future we're converging towards chips being a 68 00:03:44,480 --> 00:03:48,000 Speaker 1: much bigger part of the overall value of manufacturing a vehicle, 69 00:03:48,200 --> 00:03:50,800 Speaker 1: and chips and vehicles being a much more important of 70 00:03:50,840 --> 00:03:53,600 Speaker 1: the chip market as well. It's not two sectors that 71 00:03:53,680 --> 00:03:56,400 Speaker 1: you naturally in your head put together, chips and cars, 72 00:03:56,600 --> 00:03:59,040 Speaker 1: but their overlap is getting quite a lot bigger. 73 00:03:59,320 --> 00:04:02,240 Speaker 2: Yeah, absolutely, and that's only going to increase as consumers 74 00:04:02,320 --> 00:04:05,960 Speaker 2: have more demand for automated driving features and advanced safety 75 00:04:06,000 --> 00:04:09,200 Speaker 2: systems that are in these vehicles, as more robotaxis into 76 00:04:09,240 --> 00:04:12,520 Speaker 2: the market and are deployed on streets. Also, I should mention, 77 00:04:12,600 --> 00:04:15,720 Speaker 2: as consumers have a greater demand for info, attainment and 78 00:04:16,080 --> 00:04:19,200 Speaker 2: smart features in their vehicles. I've heard some automakers say 79 00:04:19,200 --> 00:04:21,960 Speaker 2: that it's not that interesting to be an electric vehicle anymore, 80 00:04:22,000 --> 00:04:24,720 Speaker 2: you've got to be an intelligent, connected electric vehicle. So 81 00:04:24,760 --> 00:04:28,320 Speaker 2: there's a really significant growing demand for these types of 82 00:04:28,680 --> 00:04:29,920 Speaker 2: computing equipment. 83 00:04:30,480 --> 00:04:33,279 Speaker 1: The numbers that you've mentioned, you know, eighty billion dollars 84 00:04:33,279 --> 00:04:36,080 Speaker 1: of a six hundred and thirty billion dollar market and growing. 85 00:04:36,279 --> 00:04:38,600 Speaker 1: That's pretty impressive. But I mean, I was reading somewhere 86 00:04:38,600 --> 00:04:41,560 Speaker 1: that suddenly, like the global automotive industry is three point 87 00:04:41,600 --> 00:04:44,000 Speaker 1: six trillion, and in the next ten years it's going 88 00:04:44,040 --> 00:04:47,600 Speaker 1: to be reaching something closer to seven trillion approximately, and 89 00:04:47,800 --> 00:04:49,800 Speaker 1: the two biggest drivers of that is going to be 90 00:04:49,839 --> 00:04:54,200 Speaker 1: electric vehicles and automation. So this is a big business 91 00:04:54,240 --> 00:04:56,560 Speaker 1: in itself, but it's also it's kind of like a 92 00:04:56,640 --> 00:05:00,839 Speaker 1: lever that's influencing an even bigger business to get even bigger. 93 00:05:00,920 --> 00:05:05,080 Speaker 1: So how are all these chips changing the automotive industry? 94 00:05:05,279 --> 00:05:08,200 Speaker 1: How is it driving that change? If it really is. 95 00:05:08,520 --> 00:05:10,400 Speaker 2: I mean, certainly a lot of changes of what you 96 00:05:10,400 --> 00:05:13,400 Speaker 2: mentioned the electrification side and all the challenges that brings 97 00:05:13,440 --> 00:05:16,360 Speaker 2: to incumbent automakers, and it's introduced a whole bunch of 98 00:05:16,520 --> 00:05:19,280 Speaker 2: new automakers to the field that are building out their 99 00:05:19,360 --> 00:05:23,200 Speaker 2: vehicles around an electric drive. Train, which does tend to 100 00:05:23,240 --> 00:05:26,640 Speaker 2: be more suitable to some of these computing devices being 101 00:05:26,680 --> 00:05:29,760 Speaker 2: included in the architecture. They can build them around an 102 00:05:29,839 --> 00:05:32,960 Speaker 2: electric motor and a really powerful computer, and it can 103 00:05:33,000 --> 00:05:34,599 Speaker 2: do a lot more than if you are trying to 104 00:05:34,720 --> 00:05:38,320 Speaker 2: kind of redesign an existing platform for an internal combustion engine. 105 00:05:38,400 --> 00:05:42,960 Speaker 2: So that's changing perhaps who has the advantage in this space, 106 00:05:43,040 --> 00:05:46,640 Speaker 2: but it's also changing the supply chain quite significantly. So 107 00:05:46,839 --> 00:05:50,279 Speaker 2: previously what you might have in terms of the relationship 108 00:05:50,279 --> 00:05:54,320 Speaker 2: between the semiconductor, the chip maker, and your car maker, 109 00:05:54,400 --> 00:05:56,760 Speaker 2: there'll be a bunch of different players that sit in 110 00:05:56,800 --> 00:05:59,880 Speaker 2: the middle. There, your fabs, your tier one part supply 111 00:06:00,240 --> 00:06:03,080 Speaker 2: from the automotive side that would work with the semiconductor players, 112 00:06:03,080 --> 00:06:05,159 Speaker 2: and then they would flow it through this nice orderly 113 00:06:05,160 --> 00:06:07,880 Speaker 2: supply chain and everyone would take their turn. And there's 114 00:06:07,960 --> 00:06:11,160 Speaker 2: kind of a shift taking place where the chip makers 115 00:06:11,360 --> 00:06:14,479 Speaker 2: need to work more closely with end product suppliers, whether 116 00:06:14,480 --> 00:06:17,839 Speaker 2: that's the automaker, the car maker, or the robotax you developer, 117 00:06:17,960 --> 00:06:20,720 Speaker 2: to really make sure that the chip is capable of 118 00:06:20,760 --> 00:06:23,600 Speaker 2: delivering that end products in the way that the en 119 00:06:23,680 --> 00:06:27,320 Speaker 2: product supplier wants it to be delivered. So on moving 120 00:06:27,360 --> 00:06:30,160 Speaker 2: away from this orderly supply chain into something more that's 121 00:06:30,320 --> 00:06:33,120 Speaker 2: more like a network where you still have tier one 122 00:06:33,160 --> 00:06:35,680 Speaker 2: part suppliers doing a lot of integration or tier two 123 00:06:35,720 --> 00:06:39,200 Speaker 2: part supplies integrating chips into a component that becomes a 124 00:06:39,279 --> 00:06:41,280 Speaker 2: larger component that ends up in a vehicle. But you 125 00:06:41,360 --> 00:06:45,159 Speaker 2: really need a lot more communication and partnerships between the 126 00:06:45,240 --> 00:06:48,920 Speaker 2: chip makers and the end use robotax or automaker. So 127 00:06:48,960 --> 00:06:50,480 Speaker 2: the whole supply chain is changing. 128 00:06:50,960 --> 00:06:53,880 Speaker 1: So let's talk about how this is impacting the supply chain. 129 00:06:53,960 --> 00:06:57,479 Speaker 1: And I think it's really interesting to reflect on maybe 130 00:06:57,520 --> 00:07:00,440 Speaker 1: the pattern we see in a way because we've talked 131 00:07:00,440 --> 00:07:03,240 Speaker 1: about how chips are becoming more central to the future 132 00:07:03,240 --> 00:07:06,520 Speaker 1: of automation and how that's shaking up the supply chain, 133 00:07:06,560 --> 00:07:09,000 Speaker 1: and maybe it's not quite as simple as you buy 134 00:07:09,040 --> 00:07:11,080 Speaker 1: chips from chip supplieres, you put them in your car, 135 00:07:11,160 --> 00:07:12,760 Speaker 1: and then your car does whatever it needs to and 136 00:07:12,840 --> 00:07:16,600 Speaker 1: its its application. It reminds me of how things have 137 00:07:16,760 --> 00:07:21,520 Speaker 1: evolved and become complicated with cars and lithiumine batteries. You know, 138 00:07:21,520 --> 00:07:24,920 Speaker 1: when lithumine batteries it became clear that that was central 139 00:07:25,000 --> 00:07:28,240 Speaker 1: to the future of transport, and also that transport was 140 00:07:28,280 --> 00:07:31,240 Speaker 1: central to the future of lithiumine batteries. Certainly, it wasn't 141 00:07:31,320 --> 00:07:33,240 Speaker 1: just like you had suppliers that you brought from You 142 00:07:33,240 --> 00:07:37,720 Speaker 1: had car companies investing in battery manufacturing. And so I'm wondering, 143 00:07:37,840 --> 00:07:41,240 Speaker 1: you know, is there a parallel kind of muddying of 144 00:07:41,280 --> 00:07:43,680 Speaker 1: the waters happening here? I mean, I think you've already 145 00:07:43,720 --> 00:07:46,240 Speaker 1: said that there is, But tell us more about this 146 00:07:46,400 --> 00:07:49,200 Speaker 1: muddying of the waters. How is this getting more messy? 147 00:07:49,240 --> 00:07:49,920 Speaker 1: Who is doing what? 148 00:07:50,440 --> 00:07:53,440 Speaker 2: Well? That's a very interesting analogy in comparison, and I 149 00:07:53,440 --> 00:07:55,440 Speaker 2: think it holds true in a lot of ways. So 150 00:07:55,760 --> 00:07:58,320 Speaker 2: if you start looking at this from the chip maker side, 151 00:07:58,480 --> 00:08:01,280 Speaker 2: to make a compelling product for an automake or a 152 00:08:01,360 --> 00:08:04,880 Speaker 2: ROBOTAXI developer that is trying to automate all or some 153 00:08:05,040 --> 00:08:08,600 Speaker 2: components of driving, you need to basically build out a 154 00:08:08,640 --> 00:08:11,880 Speaker 2: test case, build out a product that you can prove 155 00:08:12,000 --> 00:08:13,840 Speaker 2: can do the thing at the end of the day 156 00:08:13,880 --> 00:08:15,800 Speaker 2: that you are trying to get it to do. That 157 00:08:16,120 --> 00:08:18,200 Speaker 2: is a very detailed process, and you end up having 158 00:08:18,240 --> 00:08:21,480 Speaker 2: to do quite a lot of training of self driving 159 00:08:21,520 --> 00:08:23,520 Speaker 2: vehicle algorithms. You need to have a lot of data 160 00:08:23,520 --> 00:08:25,360 Speaker 2: sets on hand, you need to do a lot of 161 00:08:25,400 --> 00:08:28,400 Speaker 2: the work that the end customer is going to do anyway, 162 00:08:28,800 --> 00:08:32,680 Speaker 2: so why then don't you just do the end customer 163 00:08:32,760 --> 00:08:35,640 Speaker 2: job as well. So we've seen some interesting examples of 164 00:08:35,800 --> 00:08:40,120 Speaker 2: chip makers that have developed these prototype self driving systems 165 00:08:40,160 --> 00:08:43,160 Speaker 2: that they were using to kind of convince customers that 166 00:08:43,200 --> 00:08:45,360 Speaker 2: their product is great, and now they are starting to 167 00:08:45,400 --> 00:08:49,480 Speaker 2: actually offer more software attached to these chips and these 168 00:08:49,480 --> 00:08:52,000 Speaker 2: computers so that they can do more of that self 169 00:08:52,080 --> 00:08:54,600 Speaker 2: driving at the end of the process. I think most 170 00:08:54,840 --> 00:08:58,640 Speaker 2: notably is in Video, who have recently signed a deal 171 00:08:58,800 --> 00:09:02,480 Speaker 2: with Uber of automakers, whereby in Video is not just 172 00:09:02,559 --> 00:09:06,520 Speaker 2: going to be supplying computing power and putting that in vehicles, 173 00:09:06,520 --> 00:09:08,360 Speaker 2: They're actually going to be supplying a lot of the 174 00:09:08,400 --> 00:09:11,800 Speaker 2: software that does make self driving decisions, and that's a 175 00:09:11,800 --> 00:09:13,960 Speaker 2: bit of a shift from what we've seen previously. We've 176 00:09:13,960 --> 00:09:17,960 Speaker 2: also seen this from Qualcomm, which has a partnership with BMW. 177 00:09:18,080 --> 00:09:20,000 Speaker 2: They have a partnership with a few automakers, but they 178 00:09:20,040 --> 00:09:22,520 Speaker 2: announced a little bit earlier in the air that they 179 00:09:22,559 --> 00:09:26,400 Speaker 2: would be providing this Advanced Driver Resistance Systems or aid 180 00:09:26,440 --> 00:09:29,240 Speaker 2: ASS package that is really built on a lot of 181 00:09:29,400 --> 00:09:32,640 Speaker 2: Qualcomm work and BMW are putting it in their vehicle. 182 00:09:32,840 --> 00:09:36,719 Speaker 2: And previously you might have seen that happening through another intermediary, 183 00:09:36,760 --> 00:09:39,880 Speaker 2: somebody else designing the self driving component of that, or 184 00:09:39,920 --> 00:09:43,160 Speaker 2: the automated driving components of that, or even the automaker 185 00:09:43,320 --> 00:09:46,000 Speaker 2: taking on the automated driving components of that. But the 186 00:09:46,080 --> 00:09:49,200 Speaker 2: chip makers are not only working more closely with the 187 00:09:49,240 --> 00:09:52,559 Speaker 2: automakers and the kind of robotaxi suppliers, but in some 188 00:09:52,600 --> 00:09:55,960 Speaker 2: cases they're taking over more of those responsibilities further down 189 00:09:55,960 --> 00:09:56,640 Speaker 2: the Valdy chain. 190 00:09:56,880 --> 00:09:59,160 Speaker 1: So what you're saying is that a chip maker in 191 00:09:59,200 --> 00:10:01,680 Speaker 1: the past would have sold chips to a car maker, 192 00:10:01,880 --> 00:10:05,040 Speaker 1: and whereas now they are actually involved in the software 193 00:10:05,080 --> 00:10:08,199 Speaker 1: that that's used for and in some of the end applications. 194 00:10:08,200 --> 00:10:10,120 Speaker 1: So they're not just they're kind of in a way 195 00:10:10,160 --> 00:10:13,160 Speaker 1: going beyond even the automaker in terms of how they're thinking. 196 00:10:13,200 --> 00:10:17,160 Speaker 1: It's becoming a lot more integrated. Have I understood it correctly? 197 00:10:17,440 --> 00:10:19,840 Speaker 2: Yeah? I think so. I mean they are providing not 198 00:10:19,960 --> 00:10:22,840 Speaker 2: just hardware, they're providing software as well, and that software 199 00:10:22,920 --> 00:10:23,880 Speaker 2: is doing more and more. 200 00:10:24,320 --> 00:10:27,880 Speaker 1: I suppose. If that is the case, then if you're 201 00:10:27,920 --> 00:10:31,600 Speaker 1: an automaker or a software provider, then you say, well, 202 00:10:31,840 --> 00:10:35,400 Speaker 1: why would we let the chip makers capture all this value? Like, 203 00:10:35,440 --> 00:10:38,640 Speaker 1: if this is what's happening, then it's anyone's game. So 204 00:10:38,960 --> 00:10:44,120 Speaker 1: are we seeing automakers investing in chip design, chip manufacturing? 205 00:10:44,200 --> 00:10:48,240 Speaker 1: You know? Is there sort of some competitive investment going 206 00:10:48,280 --> 00:10:48,800 Speaker 1: the other way? 207 00:10:49,160 --> 00:10:52,320 Speaker 2: Absolutely so, I think most notably you've got Tesla doing this. 208 00:10:52,640 --> 00:10:57,840 Speaker 2: It is incredibly expensive to develop these types of computing systems. 209 00:10:57,880 --> 00:11:01,480 Speaker 2: Tesla's spending in the region of Timberland in Capex. A 210 00:11:01,520 --> 00:11:04,320 Speaker 2: lot of that's going towards building out data centers that 211 00:11:04,480 --> 00:11:07,319 Speaker 2: can train their self driving vehicle algorithms, but a lot 212 00:11:07,320 --> 00:11:09,880 Speaker 2: of it is also going into building out their own 213 00:11:09,920 --> 00:11:13,160 Speaker 2: computing hardware that's going into vehicles. But this is a 214 00:11:13,240 --> 00:11:16,400 Speaker 2: very difficult thing to do. There's a huge skill set 215 00:11:16,440 --> 00:11:18,760 Speaker 2: from some of these chip suppliers that have been working 216 00:11:18,800 --> 00:11:20,360 Speaker 2: on this for a very long time, and it's not 217 00:11:20,400 --> 00:11:23,199 Speaker 2: an easy thing to replace. It's very expensive to build 218 00:11:23,200 --> 00:11:26,640 Speaker 2: out these capabilities. Some other automakers that are looking back 219 00:11:26,679 --> 00:11:28,840 Speaker 2: and saying, we're not going to let the chip makers 220 00:11:28,840 --> 00:11:31,760 Speaker 2: be such a huge component of our value chain. Companies 221 00:11:31,960 --> 00:11:35,680 Speaker 2: like xpaying and Neo, both companies founded out of China, 222 00:11:35,760 --> 00:11:38,600 Speaker 2: who will be wanting to do this for similar reasons 223 00:11:38,600 --> 00:11:40,920 Speaker 2: to Tesla. They want to own their own destiny. But 224 00:11:41,080 --> 00:11:44,000 Speaker 2: at the same time, Chinese companies have a bit more 225 00:11:44,000 --> 00:11:46,520 Speaker 2: of an incentive from a different angle to do this 226 00:11:46,600 --> 00:11:48,559 Speaker 2: because it is more difficult to get some of the 227 00:11:48,640 --> 00:11:51,560 Speaker 2: leading IT chips if you are building vehicles in China 228 00:11:51,559 --> 00:11:55,120 Speaker 2: and operating in China because of the very difficult trade 229 00:11:55,200 --> 00:11:57,360 Speaker 2: environment that we find ourselves in at the moment. 230 00:11:57,640 --> 00:12:00,160 Speaker 1: Okay, So that's interesting. So this question of whether or 231 00:12:00,240 --> 00:12:03,000 Speaker 1: not to make your own chips is different for the 232 00:12:03,080 --> 00:12:07,920 Speaker 1: Chinese automotive industry than it is for the automotive industry elsewhere. 233 00:12:08,240 --> 00:12:10,439 Speaker 2: Yeah, there's certainly thing other things to consider here. 234 00:12:10,760 --> 00:12:13,160 Speaker 1: So then why is Tesla going that way? 235 00:12:13,480 --> 00:12:17,320 Speaker 2: Tesla has tried to be as vertically integrated as possible 236 00:12:17,400 --> 00:12:20,360 Speaker 2: across pretty much everything that it does. It's wanted to 237 00:12:20,360 --> 00:12:23,680 Speaker 2: build its own hardware. Its early rollout of its robotaxi 238 00:12:23,720 --> 00:12:26,680 Speaker 2: system is it's very in house approach. They are not 239 00:12:26,800 --> 00:12:29,640 Speaker 2: working with many, if any partners on that front. They 240 00:12:29,640 --> 00:12:32,000 Speaker 2: want to keep as much of the value construct inside 241 00:12:32,040 --> 00:12:35,440 Speaker 2: the company as possible. They also have some ambitions to 242 00:12:35,559 --> 00:12:38,400 Speaker 2: use the technology that they developing on the chip front 243 00:12:38,520 --> 00:12:41,360 Speaker 2: in other areas. Whether that's kind of the Optimus robots 244 00:12:41,440 --> 00:12:44,320 Speaker 2: or other projects that they're putting together. But it's a 245 00:12:44,360 --> 00:12:46,760 Speaker 2: bit that they will be able to build these chips 246 00:12:46,880 --> 00:12:50,000 Speaker 2: that are best suited for the purpose that they are 247 00:12:50,080 --> 00:12:52,840 Speaker 2: using them, rather than getting some other company in and 248 00:12:53,160 --> 00:12:56,319 Speaker 2: trying to kind of either adapt a product that already 249 00:12:56,360 --> 00:12:59,040 Speaker 2: exists or that somebody else is designing for their self 250 00:12:59,080 --> 00:13:02,400 Speaker 2: driving service, or they will have to build their own 251 00:13:02,600 --> 00:13:04,960 Speaker 2: system that kind of does the thing that they needed 252 00:13:05,040 --> 00:13:05,319 Speaker 2: to do. 253 00:13:05,640 --> 00:13:09,640 Speaker 1: I mean, doesn't also maker have any competitive advantage in 254 00:13:09,679 --> 00:13:12,720 Speaker 1: this situation. And I realized it might be different for 255 00:13:12,800 --> 00:13:17,640 Speaker 1: Tesla because obviously their owner also has investments in the 256 00:13:17,679 --> 00:13:20,960 Speaker 1: tech industry, so maybe there's more synergy there. And I 257 00:13:20,960 --> 00:13:23,000 Speaker 1: don't know, I'm just kind of speculating here. 258 00:13:23,200 --> 00:13:26,040 Speaker 2: I mean, I wouldn't say an automaker has a particular 259 00:13:26,160 --> 00:13:29,880 Speaker 2: advantage at building the types of chips that we are 260 00:13:30,040 --> 00:13:33,760 Speaker 2: talking about here. We're talking about the real bleeding age. 261 00:13:33,880 --> 00:13:37,920 Speaker 2: I mean, these chips are being produced at four nanometers 262 00:13:37,920 --> 00:13:40,200 Speaker 2: at the moment, So for some of the most cutting 263 00:13:40,280 --> 00:13:43,880 Speaker 2: edge chips that are used for self driving vehicle development, 264 00:13:44,240 --> 00:13:47,240 Speaker 2: that's a fraction of a human here. They are very 265 00:13:47,240 --> 00:13:51,120 Speaker 2: few chips globally that are produced at anything more advanced 266 00:13:51,120 --> 00:13:55,440 Speaker 2: than that. Just having that fabrication capability, there's kind of 267 00:13:55,440 --> 00:13:58,480 Speaker 2: one or two suppliers globally that are able to do that. 268 00:13:58,840 --> 00:14:01,920 Speaker 2: So really use still need to work with the existing 269 00:14:02,120 --> 00:14:05,760 Speaker 2: semiconductive value chain to get these things built out. So 270 00:14:05,800 --> 00:14:09,280 Speaker 2: I wouldn't say that an automaker has necessarily the capability 271 00:14:09,320 --> 00:14:12,120 Speaker 2: to go and alone, and even somebody like Tastler's working 272 00:14:12,120 --> 00:14:14,920 Speaker 2: with Samsung Foundry to actually build out the chips that 273 00:14:15,000 --> 00:14:15,600 Speaker 2: they design. 274 00:14:15,920 --> 00:14:18,240 Speaker 1: And I suppose maybe to some extent, it depends on 275 00:14:18,600 --> 00:14:20,840 Speaker 1: you know, you're making a bet on in the future 276 00:14:21,080 --> 00:14:25,520 Speaker 1: to what extent are automotive applications the main driver of 277 00:14:25,960 --> 00:14:28,680 Speaker 1: AI chips in the future or not, Because if they're not, 278 00:14:28,800 --> 00:14:31,240 Speaker 1: then you really don't have a competitive advantage. But if 279 00:14:31,240 --> 00:14:34,520 Speaker 1: they are, maybe you do have. Maybe this is a 280 00:14:34,600 --> 00:14:37,480 Speaker 1: logical pathway. I don't know, it's super interesting and I 281 00:14:37,480 --> 00:14:40,000 Speaker 1: think you touched a little bit on h We've talked 282 00:14:40,040 --> 00:14:44,359 Speaker 1: about chip makers expanding in the value chain, certain automakers, 283 00:14:44,400 --> 00:14:47,120 Speaker 1: particularly in China, getting into the chip side of things. 284 00:14:47,160 --> 00:14:49,680 Speaker 1: I think you touched a bit on partnerships before. But 285 00:14:49,840 --> 00:14:51,480 Speaker 1: you know that seems like the third way, So could 286 00:14:51,480 --> 00:14:53,240 Speaker 1: you just can we dive a bit more into like 287 00:14:53,320 --> 00:14:54,720 Speaker 1: what that strategy looks like. 288 00:14:55,120 --> 00:14:58,120 Speaker 2: Yeah, so we've seen lots of partnerships sprung up between 289 00:14:58,400 --> 00:15:02,560 Speaker 2: chip makers, automakers and robotaxi suppliers and a lot of 290 00:15:02,680 --> 00:15:05,640 Speaker 2: deals have been signed. So Mobile is a company that's 291 00:15:05,680 --> 00:15:08,920 Speaker 2: gone around and made numerous partnerships. We track it in 292 00:15:08,920 --> 00:15:11,640 Speaker 2: the region of at least fifty companies or automotive brands 293 00:15:11,680 --> 00:15:14,240 Speaker 2: that they have agreements to put their chips in those vehicles. 294 00:15:14,360 --> 00:15:18,120 Speaker 2: But really on the robotaxi side is wherein Video has 295 00:15:18,120 --> 00:15:20,640 Speaker 2: had some strength. They are in the majority of different 296 00:15:20,720 --> 00:15:24,920 Speaker 2: robotaxi developer brands that are actively testing or reaching advanced 297 00:15:25,040 --> 00:15:28,480 Speaker 2: or operational stages at the moment. So really Video is 298 00:15:28,560 --> 00:15:31,040 Speaker 2: kind of the chip of choice for the robotaxi supplier 299 00:15:31,160 --> 00:15:33,440 Speaker 2: Mobile Eye it has the most partnerships. But when you 300 00:15:33,440 --> 00:15:36,680 Speaker 2: look at who's collecting the most revenue from this space 301 00:15:36,920 --> 00:15:39,760 Speaker 2: at the moment, that seems like Qualcomm, who have been 302 00:15:39,920 --> 00:15:42,520 Speaker 2: racking up a decent number of partnerships that also have 303 00:15:42,640 --> 00:15:45,320 Speaker 2: kind of revenue figures from the automotive space to back 304 00:15:45,400 --> 00:15:48,760 Speaker 2: that up, although I should clarify that with in Video's 305 00:15:48,960 --> 00:15:53,040 Speaker 2: automotive exposure not just being tied to self driving chipsets 306 00:15:53,520 --> 00:15:55,280 Speaker 2: like the Mobile I and then video ones. They are 307 00:15:55,320 --> 00:15:58,040 Speaker 2: also they have a number of entertainment products that are 308 00:15:58,080 --> 00:15:58,760 Speaker 2: part of the story. 309 00:16:00,320 --> 00:16:02,920 Speaker 1: Just as an example, a company like in Video, how 310 00:16:03,040 --> 00:16:06,440 Speaker 1: much of their current revenue is for chips for the 311 00:16:06,440 --> 00:16:07,760 Speaker 1: automotive sector. 312 00:16:08,080 --> 00:16:10,320 Speaker 2: Well, in Video on track to make about two billion 313 00:16:10,360 --> 00:16:13,640 Speaker 2: dollars this year from the automotive sector, which sounds like 314 00:16:13,640 --> 00:16:15,800 Speaker 2: a big number, but point of Video, that's just one 315 00:16:15,840 --> 00:16:17,600 Speaker 2: point three percent of their total revenue. 316 00:16:17,840 --> 00:16:20,280 Speaker 1: Okay, I mean it's a big number. From the notes 317 00:16:20,320 --> 00:16:24,440 Speaker 1: I've got, I'm seeing Mercedes Benz within Video, BMW with Qualcom, 318 00:16:24,840 --> 00:16:29,880 Speaker 1: Volkswagen with Horizon Robotics, Porsche with Mobile Eye, and just 319 00:16:29,920 --> 00:16:34,200 Speaker 1: an observation, these are all European companies. Is that a trend, 320 00:16:34,320 --> 00:16:38,200 Speaker 1: that is European automakers seem to be pursuing a strategy 321 00:16:38,200 --> 00:16:40,520 Speaker 1: of partnership or is that just the examples that I 322 00:16:40,600 --> 00:16:42,880 Speaker 1: happen to have seem to paint that picture. 323 00:16:43,120 --> 00:16:45,880 Speaker 2: I think that's the examples that you have that are 324 00:16:45,880 --> 00:16:48,520 Speaker 2: painting that picture. You could say the same thing about 325 00:16:48,560 --> 00:16:52,640 Speaker 2: your GMS and forwards also going that route. Really you 326 00:16:52,720 --> 00:16:55,080 Speaker 2: don't have that many automakers that are looking to go 327 00:16:55,160 --> 00:16:57,920 Speaker 2: alone here, it's really just tied to a few, and 328 00:16:57,960 --> 00:17:01,960 Speaker 2: they all tend to be new aid EV startups that 329 00:17:02,480 --> 00:17:05,920 Speaker 2: are building their vehicles around this idea that they will 330 00:17:05,960 --> 00:17:08,600 Speaker 2: be electric and they will be intelligent, and they've got 331 00:17:08,600 --> 00:17:11,359 Speaker 2: to handle the electric drivetrain, in the battery and all 332 00:17:11,359 --> 00:17:12,879 Speaker 2: of that. But then they also have to build out 333 00:17:12,880 --> 00:17:16,359 Speaker 2: a smart infrastructure that can be compelling to consumers. Something 334 00:17:16,400 --> 00:17:19,000 Speaker 2: that we've noticed quite recently is if you look at 335 00:17:19,280 --> 00:17:22,800 Speaker 2: the number one factor that consumers in China instead they 336 00:17:22,840 --> 00:17:26,720 Speaker 2: look at when considering purchasing a new vehicle, the intelligent 337 00:17:26,760 --> 00:17:29,879 Speaker 2: components are on number one on the servers that we've seen. 338 00:17:30,000 --> 00:17:32,600 Speaker 2: It's not isn't an EV as it clean, doesn't have 339 00:17:32,760 --> 00:17:35,520 Speaker 2: affordable mileage or any of those other features. It's the 340 00:17:35,840 --> 00:17:39,360 Speaker 2: digital aspects that come from having these advanced chip sets 341 00:17:39,359 --> 00:17:39,879 Speaker 2: in the vehicle. 342 00:17:40,240 --> 00:17:45,119 Speaker 1: I mean, we're talking about two industries, cars or automotive 343 00:17:45,119 --> 00:17:49,320 Speaker 1: more broadly, automotive and AI slash chips, both of which, 344 00:17:49,359 --> 00:17:52,520 Speaker 1: in very different ways governments tend to think of as 345 00:17:52,520 --> 00:17:56,000 Speaker 1: strategically important. Whether it's from a job's perspective, whether it's 346 00:17:56,040 --> 00:18:00,240 Speaker 1: from a security perspective, so I imagine that policy is 347 00:18:00,240 --> 00:18:03,320 Speaker 1: playing a role here as well. There's obviously the aspect 348 00:18:03,400 --> 00:18:07,320 Speaker 1: of safety and quality standards and you know regulation more generally, 349 00:18:07,600 --> 00:18:09,560 Speaker 1: which must be an aspect of it. But yeah, what 350 00:18:09,600 --> 00:18:13,480 Speaker 1: are different governments doing in respect to this kind of 351 00:18:13,480 --> 00:18:16,400 Speaker 1: this evolution we're seeing and what's happening around chips and vehicles. 352 00:18:16,760 --> 00:18:19,680 Speaker 2: Yeah, I think about this in two ways. So one 353 00:18:19,760 --> 00:18:23,960 Speaker 2: there's the regulatory side that putting safety standards in place, 354 00:18:24,200 --> 00:18:27,760 Speaker 2: making sure these are built properly using the proper procedures 355 00:18:27,800 --> 00:18:31,720 Speaker 2: and kind of development protocols. And really these are chips 356 00:18:31,760 --> 00:18:35,320 Speaker 2: that are taking on a greater and greater responsibility within 357 00:18:35,359 --> 00:18:38,199 Speaker 2: the vehicle, so they do need to be automotive grade 358 00:18:38,280 --> 00:18:41,200 Speaker 2: and everything that that means, not just on the physical 359 00:18:41,480 --> 00:18:44,080 Speaker 2: hardware side that they can withstand shocks and bumps, but 360 00:18:44,160 --> 00:18:48,120 Speaker 2: also that the software is developed using the right protocols, 361 00:18:48,200 --> 00:18:51,880 Speaker 2: that there are cybersecurity measures taken that make sense. So 362 00:18:52,240 --> 00:18:54,600 Speaker 2: those restrictions make a lot of sense to me, and 363 00:18:54,600 --> 00:18:57,199 Speaker 2: there's a growing number of in there. But what it 364 00:18:57,240 --> 00:18:59,560 Speaker 2: really means is it can make it more difficult and 365 00:19:00,119 --> 00:19:03,040 Speaker 2: slow down the process for developing these chips and getting 366 00:19:03,040 --> 00:19:05,760 Speaker 2: them into vehicles. But it's something that I think is necessary. 367 00:19:05,920 --> 00:19:08,760 Speaker 2: But then the other role that regulation is playing is 368 00:19:09,000 --> 00:19:14,239 Speaker 2: how governments and regulators are requiring more safety features and 369 00:19:14,400 --> 00:19:17,680 Speaker 2: smart safety features that are digitally enabled in new vehicles. 370 00:19:17,800 --> 00:19:23,320 Speaker 2: So things like advanced emergency breaking, lane keeping assistance, pediestrian awareness, 371 00:19:23,760 --> 00:19:27,879 Speaker 2: cyclist awareness within vehicles are becoming not just added features 372 00:19:27,960 --> 00:19:31,160 Speaker 2: that automakers might put in the vehicle to make their 373 00:19:31,240 --> 00:19:34,639 Speaker 2: vehicle more compelling to consumers, it's something that's actually starting 374 00:19:34,680 --> 00:19:36,760 Speaker 2: to be mandated in more and more places, and that 375 00:19:36,880 --> 00:19:39,640 Speaker 2: only drives the demand for these types of chips up. 376 00:19:39,880 --> 00:19:42,280 Speaker 1: That's interesting. I remember also, I mean, apart from the 377 00:19:42,320 --> 00:19:46,000 Speaker 1: safety aspect, in a previous life, whilst still being at BNEF, 378 00:19:46,080 --> 00:19:48,359 Speaker 1: I used to cover energy efficiency and at one point 379 00:19:48,359 --> 00:19:50,919 Speaker 1: in time, LED lighting, believe it or not, was the 380 00:19:50,960 --> 00:19:53,520 Speaker 1: big new thing. I know that ledlighting. We take it 381 00:19:53,560 --> 00:19:55,600 Speaker 1: for so for granted so much, And I remember being 382 00:19:55,600 --> 00:19:58,400 Speaker 1: in a lighting conference and someone explaining to me how 383 00:19:58,440 --> 00:20:03,119 Speaker 1: the cutting edge application for LED chips is in vehicle headlights, 384 00:20:03,280 --> 00:20:07,800 Speaker 1: and the reason for that is because the standard of 385 00:20:07,960 --> 00:20:10,680 Speaker 1: quality has to be so much higher and the fail 386 00:20:10,760 --> 00:20:13,480 Speaker 1: rate is so much lower because it's so much more 387 00:20:13,680 --> 00:20:16,720 Speaker 1: expensive to have to change one of these things out 388 00:20:16,920 --> 00:20:20,160 Speaker 1: than it is changing a light bulb in your home 389 00:20:20,320 --> 00:20:22,919 Speaker 1: by comparison. So I mean, I suppose a question I 390 00:20:22,920 --> 00:20:25,600 Speaker 1: have here is obviously from a safety point of view, 391 00:20:25,680 --> 00:20:27,960 Speaker 1: the bar is already pretty high on these, But I 392 00:20:28,000 --> 00:20:30,040 Speaker 1: also wonder it's like in that point of view of 393 00:20:30,400 --> 00:20:33,679 Speaker 1: vehicles are not things that you easily just replace parts 394 00:20:33,720 --> 00:20:35,400 Speaker 1: on or take the part. You know, everything is very 395 00:20:35,760 --> 00:20:38,320 Speaker 1: designed as a package. Does this mean this is also 396 00:20:38,560 --> 00:20:41,280 Speaker 1: raising the bar for chip makers, like this is the 397 00:20:41,840 --> 00:20:44,320 Speaker 1: real If you can do it right in vehicles, you 398 00:20:44,359 --> 00:20:45,520 Speaker 1: can do it right anywhere. 399 00:20:46,160 --> 00:20:48,679 Speaker 2: Yeah, exactly, So I think that holds the stakes are 400 00:20:48,760 --> 00:20:51,560 Speaker 2: very high, so it's important to get this right. Part 401 00:20:51,560 --> 00:20:55,240 Speaker 2: of it that it's also a market that interacts closely 402 00:20:55,320 --> 00:20:58,639 Speaker 2: with a lot of consumers, just like your mobile phones, 403 00:20:58,640 --> 00:21:01,560 Speaker 2: sor it does cars, arc and products that people want 404 00:21:01,560 --> 00:21:03,359 Speaker 2: to build out a product and have their relationship with 405 00:21:03,400 --> 00:21:05,800 Speaker 2: the consumer. So that's a big part of it as well. 406 00:21:06,080 --> 00:21:08,159 Speaker 1: I want to ask you about, you know, now we've 407 00:21:08,160 --> 00:21:10,600 Speaker 1: spoken about everything, what you think the future looks like, 408 00:21:10,880 --> 00:21:12,760 Speaker 1: both in terms of the developments we can expect in 409 00:21:12,800 --> 00:21:17,080 Speaker 1: the next few years, but also how important vehicles are 410 00:21:17,560 --> 00:21:19,879 Speaker 1: now to the development of AI, because I think that 411 00:21:19,920 --> 00:21:22,600 Speaker 1: when we think about AI, everyone's thinking about AI generated 412 00:21:22,600 --> 00:21:25,399 Speaker 1: content because that's front and center. But vehicles could be 413 00:21:25,600 --> 00:21:29,080 Speaker 1: the application that really drives this. Maybe we'll be interested 414 00:21:29,080 --> 00:21:31,199 Speaker 1: to get your view. And then how important and how 415 00:21:31,280 --> 00:21:34,240 Speaker 1: much of a difference does this make to how cars 416 00:21:34,320 --> 00:21:37,400 Speaker 1: and the mortus motive sector generally is going to evolve. 417 00:21:37,920 --> 00:21:41,359 Speaker 2: My colleague Shung who who is one of the authors 418 00:21:41,359 --> 00:21:44,479 Speaker 2: of this note that we're discussing, he likes to say 419 00:21:44,760 --> 00:21:48,040 Speaker 2: that self driving vehicles are the most tangible way that 420 00:21:48,480 --> 00:21:51,560 Speaker 2: humans will be interacting with AI for the next few years. 421 00:21:51,680 --> 00:21:54,800 Speaker 2: So this really is something that we're going to interact 422 00:21:54,800 --> 00:21:56,520 Speaker 2: with the lot and it's going to be very close 423 00:21:56,560 --> 00:22:00,320 Speaker 2: to us. And then what we have is an indutry 424 00:22:00,800 --> 00:22:05,200 Speaker 2: where the main components of the vehicle are really starting 425 00:22:05,200 --> 00:22:07,600 Speaker 2: to change, and the bill of materials, the cost of 426 00:22:07,640 --> 00:22:10,200 Speaker 2: all the different components that go into those vehicles that's 427 00:22:10,240 --> 00:22:12,919 Speaker 2: being reshaped. Suddenly you have an industry that has the 428 00:22:12,960 --> 00:22:16,840 Speaker 2: battery of the electric vehicle accounting for a large chunk 429 00:22:16,840 --> 00:22:18,840 Speaker 2: of fit a third or baut a third of the vehicle. 430 00:22:18,880 --> 00:22:21,040 Speaker 2: And then you have this growing share that's going into 431 00:22:21,040 --> 00:22:24,520 Speaker 2: the computing hardware and it's really a big supply chain 432 00:22:24,560 --> 00:22:26,440 Speaker 2: shift to make it that's trying to build a vehicle, 433 00:22:26,520 --> 00:22:29,399 Speaker 2: or when you've robotaxi developer that's trying to build a robotaxi. 434 00:22:29,560 --> 00:22:32,479 Speaker 1: It's so interesting because I've been thinking about, you know, 435 00:22:32,600 --> 00:22:36,160 Speaker 1: we're in this period where having batteries is a really 436 00:22:36,200 --> 00:22:39,639 Speaker 1: important thing if you're an automaker that it wants to 437 00:22:39,800 --> 00:22:42,360 Speaker 1: jump on the electric vehicle wave. But I've always asked 438 00:22:42,400 --> 00:22:44,480 Speaker 1: myself the question, you know, if that's really going to 439 00:22:44,520 --> 00:22:47,840 Speaker 1: get kind of commodified, if that's the right word, And 440 00:22:47,960 --> 00:22:49,720 Speaker 1: you know, also the cost is going to go down 441 00:22:49,880 --> 00:22:52,760 Speaker 1: and the margins on that aspect of the value chain 442 00:22:52,840 --> 00:22:56,240 Speaker 1: might become really thin, whereas in the internal combustion engine 443 00:22:56,320 --> 00:22:59,720 Speaker 1: vehicle world, actually because they're so complex, actually there's a 444 00:22:59,720 --> 00:23:02,719 Speaker 1: lot of margin and differentiation in there. What is going 445 00:23:02,800 --> 00:23:06,200 Speaker 1: to be the thing that separates out a really nice 446 00:23:06,280 --> 00:23:09,280 Speaker 1: car from a really basic car and from everything you're 447 00:23:09,280 --> 00:23:12,480 Speaker 1: telling me that might well be everything we're talking about 448 00:23:12,520 --> 00:23:15,879 Speaker 1: today is like how clever is your car? Becomes the 449 00:23:15,960 --> 00:23:18,880 Speaker 1: question because your car will already be really fast because 450 00:23:18,880 --> 00:23:22,240 Speaker 1: it's electric, It will already be really economic to run 451 00:23:22,240 --> 00:23:25,760 Speaker 1: because it's electric. So what is there left, and maybe 452 00:23:25,760 --> 00:23:27,919 Speaker 1: it is this question of how clever is it? 453 00:23:28,560 --> 00:23:31,000 Speaker 2: Yeah, how much of the driving can it do for you? 454 00:23:31,400 --> 00:23:34,040 Speaker 2: What are the kind of infotainment or entertainment options that 455 00:23:34,119 --> 00:23:36,639 Speaker 2: you have within the vehicle? How well does it connect 456 00:23:36,680 --> 00:23:39,360 Speaker 2: to the rest of your digital life. That will all 457 00:23:39,359 --> 00:23:42,560 Speaker 2: be incredibly important, and automakers and kind of everybody throughout 458 00:23:42,560 --> 00:23:45,520 Speaker 2: the value chain of looking at that and thinking how 459 00:23:45,600 --> 00:23:47,760 Speaker 2: much of that are things that we can actually charge 460 00:23:47,760 --> 00:23:50,480 Speaker 2: for and make money from. Can we sell subscriptions to 461 00:23:50,880 --> 00:23:53,280 Speaker 2: some of these self driving features or do we need 462 00:23:53,320 --> 00:23:56,199 Speaker 2: to kind of bake that into the cost of selling 463 00:23:56,200 --> 00:23:58,760 Speaker 2: the vehicle because consumers are just going to expect it 464 00:23:58,800 --> 00:24:01,200 Speaker 2: and won't want to pay extra for it. So these 465 00:24:01,200 --> 00:24:02,760 Speaker 2: are kind of a lot of the questions that the 466 00:24:02,800 --> 00:24:04,840 Speaker 2: automakers are looking at at the moment. 467 00:24:05,359 --> 00:24:09,600 Speaker 1: Really fascinating stuff. Thank you, Andrew. This has been so interesting. 468 00:24:09,760 --> 00:24:13,159 Speaker 1: I sometimes just wish I had a time machine. Firstly, 469 00:24:13,240 --> 00:24:16,359 Speaker 1: I could get rich with that, but secondly because the 470 00:24:16,440 --> 00:24:20,399 Speaker 1: possibilities here are so exciting and transformative, and I just 471 00:24:20,440 --> 00:24:22,600 Speaker 1: would love to know what the world looks like in 472 00:24:22,640 --> 00:24:24,320 Speaker 1: ten years time, what the world looks like in twenty 473 00:24:24,359 --> 00:24:26,400 Speaker 1: years time, what the world looks like in fifty years 474 00:24:26,440 --> 00:24:29,240 Speaker 1: time with everything we're discussing. So thank you so much 475 00:24:29,359 --> 00:24:32,719 Speaker 1: for getting me excited. I really appreciate having you on today. 476 00:24:32,920 --> 00:24:34,120 Speaker 2: Thank you very much for having me. 477 00:24:42,880 --> 00:24:46,000 Speaker 1: Today's episode of Switched On was produced by Cam Gray 478 00:24:46,200 --> 00:24:49,919 Speaker 1: with production assistants from Kamala Shelling. 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