1 00:00:03,279 --> 00:00:05,560 Speaker 1: It took a pandemic to get me to ride a 2 00:00:05,600 --> 00:00:09,080 Speaker 1: bicycle to work. I live in London and studies show 3 00:00:09,240 --> 00:00:12,320 Speaker 1: that the air quality along a busy road is actually 4 00:00:12,360 --> 00:00:14,840 Speaker 1: cleaner than the air quality on my train ride to 5 00:00:14,880 --> 00:00:19,120 Speaker 1: the office. I do my best to think about personal sustainability, 6 00:00:19,520 --> 00:00:22,800 Speaker 1: yet I only started biking to work in March, when 7 00:00:22,840 --> 00:00:26,160 Speaker 1: the term social distancing was already firmly in the lexicon. 8 00:00:27,280 --> 00:00:30,600 Speaker 1: People all over the world have made major changes to 9 00:00:30,640 --> 00:00:33,680 Speaker 1: their daily lives in the past weeks and months, far 10 00:00:33,760 --> 00:00:36,600 Speaker 1: more significant than my morning commute when I used to 11 00:00:36,640 --> 00:00:40,440 Speaker 1: go into the office. So from a BNF perspective, we're 12 00:00:40,440 --> 00:00:43,320 Speaker 1: going to explore what these changes mean for road transport 13 00:00:43,560 --> 00:00:46,599 Speaker 1: as well as clean energy. On the show today are 14 00:00:46,640 --> 00:00:50,600 Speaker 1: Colin mccarrickre and Logan Goldie Scott. Colin is head of 15 00:00:50,640 --> 00:00:53,360 Speaker 1: Advanced Transport at BENF and Logan is head of Clean 16 00:00:53,400 --> 00:00:56,440 Speaker 1: Power Research. They're going to give us their views on 17 00:00:56,480 --> 00:01:00,200 Speaker 1: how clean energy and transportation are changing right now and 18 00:01:00,360 --> 00:01:02,360 Speaker 1: what we might be able to expect in the future. 19 00:01:03,240 --> 00:01:05,920 Speaker 1: Be an F is currently writing a series of indicators 20 00:01:05,920 --> 00:01:08,319 Speaker 1: reports on the impact of COVID Night Team on the 21 00:01:08,319 --> 00:01:12,520 Speaker 1: industries we cover. These include indicators reports on clean power 22 00:01:12,760 --> 00:01:16,560 Speaker 1: as well as global road traffic. These reports are available 23 00:01:16,600 --> 00:01:19,160 Speaker 1: at b NF dot com and on the Bloomberg terminal 24 00:01:19,200 --> 00:01:22,119 Speaker 1: at b NF Go. And please remember that BNF does 25 00:01:22,120 --> 00:01:24,520 Speaker 1: not provide investment or strategy advice, and we have a 26 00:01:24,560 --> 00:01:26,720 Speaker 1: full disclaimer that can be found at the end of 27 00:01:26,720 --> 00:01:37,440 Speaker 1: the show. Hi Colin, Hi Logan, thank you for joining today. 28 00:01:37,840 --> 00:01:40,559 Speaker 1: Hi Dina, good to be here. Hey Danny, great to speak. 29 00:01:40,920 --> 00:01:44,000 Speaker 1: So that was Colin's voice first and Logan's voice second 30 00:01:44,080 --> 00:01:46,080 Speaker 1: for those who are wondering now, one of the things 31 00:01:46,120 --> 00:01:51,640 Speaker 1: that is really great about recording remote podcasts is that 32 00:01:51,880 --> 00:01:55,480 Speaker 1: we actually have the ability to bring in guests from 33 00:01:55,520 --> 00:01:58,760 Speaker 1: different parts of the world. We have this lovely studio 34 00:01:58,800 --> 00:02:01,400 Speaker 1: in London that I haven't stepped put in about three weeks. 35 00:02:02,000 --> 00:02:05,160 Speaker 1: But now we're joined today by Logan, who is located 36 00:02:05,200 --> 00:02:07,080 Speaker 1: in the San Francisco Bay area, which is where I'm 37 00:02:07,120 --> 00:02:08,720 Speaker 1: originally from. I guess we've got a little bit of 38 00:02:08,760 --> 00:02:12,280 Speaker 1: a swap going on here, and I am curious, from 39 00:02:12,360 --> 00:02:16,720 Speaker 1: a city that has a lot of mobility, when's the 40 00:02:16,800 --> 00:02:19,840 Speaker 1: last time you were in a taxi? So San Francisco 41 00:02:20,120 --> 00:02:23,320 Speaker 1: ended up actually moving relatively early, so we've had shelter 42 00:02:23,480 --> 00:02:27,120 Speaker 1: in place since March sixteenth, and then I was actually 43 00:02:27,200 --> 00:02:30,120 Speaker 1: in an uber on March fifteenth, So that was my 44 00:02:30,320 --> 00:02:34,160 Speaker 1: final social interaction that wasn't via camera and virus screen 45 00:02:34,480 --> 00:02:36,680 Speaker 1: and the final time I was in the uber. So 46 00:02:36,680 --> 00:02:38,600 Speaker 1: it's been a couple of weeks. Callin, when's the last 47 00:02:38,639 --> 00:02:41,120 Speaker 1: time you were in a taxi? For me, it's further 48 00:02:41,160 --> 00:02:44,280 Speaker 1: back actually, So we were out in San Francisco actually 49 00:02:44,480 --> 00:02:47,040 Speaker 1: for the San Francisco Summit and the theme is the 50 00:02:47,080 --> 00:02:49,160 Speaker 1: future of mobility, so we were all there at the 51 00:02:49,160 --> 00:02:51,359 Speaker 1: beginning of February for that, and that's the last time 52 00:02:51,400 --> 00:02:53,639 Speaker 1: I think I was in an uber. Once I'm back 53 00:02:53,639 --> 00:02:56,119 Speaker 1: in London. I'm a big advocate of cycling everywhere, so 54 00:02:56,480 --> 00:02:59,320 Speaker 1: despite being someone who spends their time deeply immersed in 55 00:02:59,360 --> 00:03:02,760 Speaker 1: auto market, I prefer two wheels over four whenever I can. 56 00:03:03,760 --> 00:03:05,880 Speaker 1: So it was that same week before I kind of 57 00:03:05,960 --> 00:03:09,359 Speaker 1: moved into my house full time. But I must say 58 00:03:09,520 --> 00:03:11,920 Speaker 1: the last couple of days at work, I started renting 59 00:03:11,919 --> 00:03:13,720 Speaker 1: bikes and I've become a bit of a cyclist and 60 00:03:13,800 --> 00:03:15,400 Speaker 1: I think that will stick with me for a while. 61 00:03:15,480 --> 00:03:19,160 Speaker 1: So then that leads to another important point and something 62 00:03:19,200 --> 00:03:22,440 Speaker 1: that we are tracking now here at b an Epso Collin, 63 00:03:23,160 --> 00:03:26,880 Speaker 1: we're looking at transport and we're looking at traffic and congestion. 64 00:03:27,600 --> 00:03:29,480 Speaker 1: What are we seeing right now and what sort of 65 00:03:29,520 --> 00:03:31,480 Speaker 1: developed over the last couple of weeks Because we are 66 00:03:31,520 --> 00:03:33,600 Speaker 1: tracking this on a weekly basis around the world, are 67 00:03:33,639 --> 00:03:36,520 Speaker 1: we not? We are? And what you're seeing is predictable 68 00:03:36,680 --> 00:03:39,000 Speaker 1: in some sense. Everybody's been told to stay in their house, 69 00:03:39,040 --> 00:03:41,720 Speaker 1: and for the most part, everybody is staying in their house. 70 00:03:42,200 --> 00:03:46,760 Speaker 1: Traffic is plummeted, use of public transit has plummeted. It's 71 00:03:46,800 --> 00:03:49,480 Speaker 1: not all on the same timeline. Some of them are 72 00:03:49,520 --> 00:03:51,360 Speaker 1: sort of a week or two staggered, or in the 73 00:03:51,400 --> 00:03:54,920 Speaker 1: case of say China versus the US or Europe, it's 74 00:03:54,920 --> 00:03:56,400 Speaker 1: more like a month or two. But you see sort 75 00:03:56,400 --> 00:03:58,600 Speaker 1: of the same wave. And when you look at the 76 00:03:58,640 --> 00:04:02,000 Speaker 1: data really closely, you see that ramps down very steeply. 77 00:04:02,040 --> 00:04:04,960 Speaker 1: People really stop moving around when these shelter and place 78 00:04:05,080 --> 00:04:08,160 Speaker 1: rules or these lockdowns come in. And then we're starting 79 00:04:08,200 --> 00:04:10,000 Speaker 1: to see that move again. In China, we're starting to 80 00:04:10,040 --> 00:04:12,680 Speaker 1: see much more people moving around. It's still not back 81 00:04:12,720 --> 00:04:16,360 Speaker 1: to pre COVID levels, but that ice is starting a 82 00:04:16,400 --> 00:04:18,240 Speaker 1: thought and people are moving around pretty much in all 83 00:04:18,320 --> 00:04:20,560 Speaker 1: forms more than they were at the height of this. 84 00:04:20,680 --> 00:04:22,719 Speaker 1: So it kind of looks like about a ten week 85 00:04:22,760 --> 00:04:25,160 Speaker 1: wave that peaks around week five or six and then 86 00:04:25,200 --> 00:04:27,520 Speaker 1: starts to come down. Hopefully that's the pattern we see 87 00:04:27,520 --> 00:04:30,680 Speaker 1: in other countries as well, but of course that's hard 88 00:04:30,720 --> 00:04:33,920 Speaker 1: to predict right now. So is this individual transport or 89 00:04:33,960 --> 00:04:37,440 Speaker 1: we also seeing a pretty massive slowdown in logistics, So 90 00:04:37,520 --> 00:04:40,440 Speaker 1: logistics is a bit less affected, it looks like, and 91 00:04:40,480 --> 00:04:42,800 Speaker 1: I think this lines up with everybody's personal experience. Right 92 00:04:42,839 --> 00:04:45,680 Speaker 1: There're still ordering parcels on Amazon, and grocery trucks are 93 00:04:45,720 --> 00:04:48,400 Speaker 1: still moving things around, so some of that has been 94 00:04:48,400 --> 00:04:50,359 Speaker 1: a bit more resilient than personal mobility, because some of 95 00:04:50,360 --> 00:04:52,679 Speaker 1: it is critical and we need to get more goods 96 00:04:52,680 --> 00:04:54,840 Speaker 1: delivered or at least the same amount of goods delivered 97 00:04:54,839 --> 00:04:57,400 Speaker 1: in quite a few cases. But even that is down 98 00:04:57,400 --> 00:04:59,159 Speaker 1: in some place as well. You think about how much 99 00:04:59,520 --> 00:05:02,120 Speaker 1: stuff is moved around, for say the construction industry or 100 00:05:02,160 --> 00:05:04,800 Speaker 1: just commodities being moved by road and rail and things 101 00:05:04,839 --> 00:05:07,360 Speaker 1: like that, so that is down as well, but probably 102 00:05:07,640 --> 00:05:09,440 Speaker 1: it looks like a little bit less dramatically than on 103 00:05:09,480 --> 00:05:13,520 Speaker 1: the passenger side. And then what is the actual impact 104 00:05:13,640 --> 00:05:17,839 Speaker 1: this is having on emissions, and then as second but 105 00:05:18,040 --> 00:05:21,560 Speaker 1: related note, air quality, because I've seen some pictures of 106 00:05:21,640 --> 00:05:24,480 Speaker 1: the Himalayas visible from India for the first time in 107 00:05:24,520 --> 00:05:28,159 Speaker 1: several decades, or even pictures of Los Angeles in the 108 00:05:28,240 --> 00:05:31,600 Speaker 1: valley and having these beautiful blue skies and the ability 109 00:05:31,640 --> 00:05:34,600 Speaker 1: to see hills nearby. Is air pollution down by a 110 00:05:34,680 --> 00:05:37,760 Speaker 1: ton or are we just seeing short term kick and 111 00:05:37,839 --> 00:05:41,400 Speaker 1: air quality? I mean it's noticeably down. If you look 112 00:05:41,400 --> 00:05:43,600 Speaker 1: at pretty much any measure of air quality, whether it's 113 00:05:43,640 --> 00:05:47,560 Speaker 1: Knox emissions or particulates, they're pretty much all way way 114 00:05:47,600 --> 00:05:50,200 Speaker 1: down overall CEO two emissions of course too, as you'd expect. 115 00:05:50,839 --> 00:05:53,640 Speaker 1: And so yeah, you are seeing urban air quality dramatically change. 116 00:05:53,680 --> 00:05:56,400 Speaker 1: I mean, I'm here in central London and looking out 117 00:05:56,440 --> 00:05:58,520 Speaker 1: from my window, not only is the sky a different 118 00:05:58,560 --> 00:06:02,200 Speaker 1: shade of blue, but you can see stars. That's certainly 119 00:06:02,200 --> 00:06:05,120 Speaker 1: not something you would have seen at any point previously 120 00:06:05,160 --> 00:06:07,320 Speaker 1: in the ten years that I've lived here. The open 121 00:06:07,400 --> 00:06:09,600 Speaker 1: question is how much of that stays versus how much 122 00:06:09,600 --> 00:06:11,840 Speaker 1: of that just returns to normal, And I think there 123 00:06:11,839 --> 00:06:14,159 Speaker 1: are some big unknowns in that right now, but certainly 124 00:06:14,360 --> 00:06:18,080 Speaker 1: we are in a very strange and unique window in 125 00:06:18,160 --> 00:06:21,880 Speaker 1: which urban air quality is dramatically better than it's been 126 00:06:21,920 --> 00:06:24,839 Speaker 1: in living memory. I think, so I am enjoying nice 127 00:06:24,839 --> 00:06:27,760 Speaker 1: air quality, I must say, and I've already been somebody 128 00:06:27,800 --> 00:06:31,840 Speaker 1: who's been pretty fascinated enthusiastic about electric vehicles. Now the 129 00:06:31,920 --> 00:06:35,279 Speaker 1: question is do you think other parts of the world 130 00:06:35,920 --> 00:06:39,159 Speaker 1: will be equally as enthralled by electric vehicles? And will 131 00:06:39,240 --> 00:06:41,760 Speaker 1: they when we come out of this fair the same 132 00:06:41,839 --> 00:06:46,320 Speaker 1: as better than or worse than internal combustion engines, because 133 00:06:46,680 --> 00:06:48,720 Speaker 1: with the backdrop of all of this is also an 134 00:06:48,720 --> 00:06:54,400 Speaker 1: extraordinarily low oil price, and the low barrel price also 135 00:06:54,440 --> 00:06:58,680 Speaker 1: makes internal combustion engines much cheaper to operate. Yeah, there's 136 00:06:58,680 --> 00:07:00,600 Speaker 1: a lot of moving pieces in that question of do 137 00:07:00,680 --> 00:07:03,160 Speaker 1: they fare better or worse Because there's a lot of 138 00:07:03,200 --> 00:07:06,720 Speaker 1: moving pieces in what's driving ev adoption. I think in 139 00:07:06,760 --> 00:07:09,520 Speaker 1: the long term, so we go out five to ten years, 140 00:07:09,560 --> 00:07:12,280 Speaker 1: I don't think much has changed. Look, the battery technology 141 00:07:12,320 --> 00:07:14,600 Speaker 1: is going to continue to get better. There's still rising 142 00:07:14,600 --> 00:07:17,440 Speaker 1: pressure around CEO two emissions. There's this pressure around urban 143 00:07:17,480 --> 00:07:19,440 Speaker 1: air quality. I don't think any of that's going away. 144 00:07:20,080 --> 00:07:22,160 Speaker 1: But in the short term there are really big questions 145 00:07:22,160 --> 00:07:24,120 Speaker 1: so you're probably heading for the first year and your 146 00:07:24,200 --> 00:07:28,320 Speaker 1: drop in auto sales certainly since the financial crisis and 147 00:07:28,440 --> 00:07:30,600 Speaker 1: a few thousand eight and nine. The thing about the 148 00:07:30,600 --> 00:07:33,680 Speaker 1: financial crisis is that it hit different countries at a 149 00:07:33,680 --> 00:07:35,960 Speaker 1: more staggered timeframe, right So the US gets hit hard 150 00:07:35,960 --> 00:07:38,960 Speaker 1: in two thousand eight nine auto sales plummeted into thousand nine. 151 00:07:39,280 --> 00:07:41,760 Speaker 1: Europe it's a much more delayed hit. Asia doesn't get 152 00:07:41,800 --> 00:07:43,320 Speaker 1: it as bad. All these sorts of things where it 153 00:07:43,320 --> 00:07:45,640 Speaker 1: was a bit more staggered. We're pretty unique right now 154 00:07:45,680 --> 00:07:48,400 Speaker 1: and that this is hitting everywhere quite at once, but 155 00:07:48,560 --> 00:07:53,000 Speaker 1: pretty close. And cars are large pieces of discretionary spending 156 00:07:53,040 --> 00:07:55,920 Speaker 1: from consumers. So in a time of big economic uncertainty, 157 00:07:56,200 --> 00:07:58,440 Speaker 1: let alone a time where everyone's walked in their houses, 158 00:07:58,880 --> 00:08:01,160 Speaker 1: people don't go out and buy a lot of cars predictably. 159 00:08:01,200 --> 00:08:03,000 Speaker 1: So this is gonna be very tough year for automakers 160 00:08:03,000 --> 00:08:05,560 Speaker 1: for sure. The question then, is do evs hold up 161 00:08:05,600 --> 00:08:09,000 Speaker 1: better or worse than internal combustion engine vehicles. If it 162 00:08:09,120 --> 00:08:11,240 Speaker 1: wasn't for this all of this, you would have been 163 00:08:11,240 --> 00:08:14,280 Speaker 1: heading for a record year for EV sales. Europe, especially 164 00:08:14,400 --> 00:08:16,920 Speaker 1: sales in the first two months were doubling over last 165 00:08:17,000 --> 00:08:20,600 Speaker 1: year because of this driver around CEO two regulations. China 166 00:08:20,680 --> 00:08:23,360 Speaker 1: cut subsidies last year and sales fell in the second half, 167 00:08:23,360 --> 00:08:26,800 Speaker 1: but it was probably gonna rise again this year, so 168 00:08:27,360 --> 00:08:29,400 Speaker 1: we were heading for this real record. I think that's 169 00:08:29,440 --> 00:08:32,480 Speaker 1: off now, at least in unit sales. But I think 170 00:08:32,480 --> 00:08:35,120 Speaker 1: you can probably make an argument that on a percentage basis, 171 00:08:35,240 --> 00:08:39,520 Speaker 1: that percentage adoption EV share of new car sales will 172 00:08:39,559 --> 00:08:43,000 Speaker 1: be either flat or rising a little bit. If you 173 00:08:43,040 --> 00:08:46,800 Speaker 1: look at most sort of conventional auto analysts, they will 174 00:08:46,840 --> 00:08:48,920 Speaker 1: say that EV sales are gonna get hit harder by 175 00:08:48,920 --> 00:08:51,680 Speaker 1: this than internal combustion engine vehicles, and that's because on 176 00:08:51,760 --> 00:08:55,559 Speaker 1: average they're more expensive, and generally, in economic downturns, more 177 00:08:55,559 --> 00:08:58,880 Speaker 1: expensive things get hit harder. Luxury cars go, but cheaper 178 00:08:58,920 --> 00:09:02,600 Speaker 1: cars hold up a little better. Those are valid arguments generally. 179 00:09:02,640 --> 00:09:05,960 Speaker 1: The arguments against that are that one, there are a 180 00:09:05,960 --> 00:09:08,480 Speaker 1: lot of evs out there with long backlogs of pre 181 00:09:08,640 --> 00:09:11,280 Speaker 1: orders that people have put a deposit on that some 182 00:09:11,360 --> 00:09:14,920 Speaker 1: of the automakers are still ticking through those, so Tesla 183 00:09:15,200 --> 00:09:18,160 Speaker 1: Model Why for example, or the Model Free in China, 184 00:09:18,280 --> 00:09:19,640 Speaker 1: so I think a lot of those are still going 185 00:09:19,679 --> 00:09:22,080 Speaker 1: to get shipped, and even you know in Europe a 186 00:09:22,080 --> 00:09:25,160 Speaker 1: lot of automakers last year we're deliberately pushing orders into 187 00:09:25,640 --> 00:09:27,600 Speaker 1: because they could then count them towards their fleet wide 188 00:09:27,600 --> 00:09:30,240 Speaker 1: CEO to target, which they faced fines if they missed 189 00:09:30,240 --> 00:09:32,240 Speaker 1: this year. But there was no fines in place last 190 00:09:32,280 --> 00:09:34,800 Speaker 1: year because the targets didn't apply until this year. So 191 00:09:34,880 --> 00:09:36,480 Speaker 1: I think there's a bit of a backlog there that 192 00:09:36,640 --> 00:09:40,080 Speaker 1: might help. The other thing is that these are still, 193 00:09:40,200 --> 00:09:42,439 Speaker 1: in large part early adopters who may be a little 194 00:09:42,440 --> 00:09:46,040 Speaker 1: bit less sensitive, and then there's this question of policy support. 195 00:09:46,120 --> 00:09:49,760 Speaker 1: So I've mentioned that they're already the European fleet CEO 196 00:09:49,800 --> 00:09:52,120 Speaker 1: two targets. One of the things we've seen so far, 197 00:09:52,200 --> 00:09:55,280 Speaker 1: even in March in Europe, where for about half of 198 00:09:55,320 --> 00:09:58,360 Speaker 1: March most of the big European economies were under lockdown. 199 00:09:58,720 --> 00:10:00,959 Speaker 1: March EV sales in the u K up a hundred 200 00:10:00,960 --> 00:10:04,640 Speaker 1: and thirty three percent, overall internal combustion engine vehicle sales down. 201 00:10:06,120 --> 00:10:10,640 Speaker 1: Germany EV sales up percent. In March, overall internal combustion 202 00:10:10,640 --> 00:10:15,400 Speaker 1: engine vehicle sales down. For France, UM passenger vehicles sales down, 203 00:10:15,480 --> 00:10:19,840 Speaker 1: sales up twelve So it looks like at least in 204 00:10:20,120 --> 00:10:22,720 Speaker 1: Q one they're holding up a little better. The next 205 00:10:22,720 --> 00:10:24,679 Speaker 1: three months are going to be really brutal for all 206 00:10:24,720 --> 00:10:27,760 Speaker 1: parts of the auto market in North America Europe, but 207 00:10:27,960 --> 00:10:29,800 Speaker 1: in China they're going to start to recover. And I 208 00:10:29,840 --> 00:10:32,160 Speaker 1: think what you'll see is still a pretty strong push 209 00:10:32,160 --> 00:10:35,120 Speaker 1: in China. And this is a bit uncomfortable, But my 210 00:10:35,200 --> 00:10:38,080 Speaker 1: bad is that evs hold up slightly better and at 211 00:10:38,080 --> 00:10:41,120 Speaker 1: the adoption rate, the percentage of new sales is flat 212 00:10:41,160 --> 00:10:43,360 Speaker 1: to a little bit up maybe this year over last year, 213 00:10:43,360 --> 00:10:46,080 Speaker 1: but down in absolute terms. Well, you can add this 214 00:10:46,160 --> 00:10:49,480 Speaker 1: to your predictions that you make, for which we did 215 00:10:49,480 --> 00:10:52,040 Speaker 1: a podcast earlier where we went into those we did. Yeah, 216 00:10:52,160 --> 00:10:55,280 Speaker 1: we can talk the beginning of one and see whether 217 00:10:55,360 --> 00:10:58,080 Speaker 1: or not you were on or off on this new 218 00:10:58,120 --> 00:11:00,199 Speaker 1: prediction joining us a little bit later in the year. 219 00:11:00,760 --> 00:11:03,200 Speaker 1: So in that you know, given that there will be 220 00:11:03,280 --> 00:11:06,080 Speaker 1: some reduced demand since one of the many things that 221 00:11:06,080 --> 00:11:07,800 Speaker 1: Logan has done for us here at b n F 222 00:11:08,080 --> 00:11:10,520 Speaker 1: is look very closely at the energy storage market, so 223 00:11:10,559 --> 00:11:13,760 Speaker 1: he knows the battery space pretty intimately well. And one 224 00:11:13,800 --> 00:11:16,280 Speaker 1: of the potential views on our side is that if 225 00:11:16,320 --> 00:11:18,960 Speaker 1: you have a reduction in electric vehicle sales, given they 226 00:11:18,960 --> 00:11:22,200 Speaker 1: are the largest consumers, right now with the myan batteries, 227 00:11:22,240 --> 00:11:25,440 Speaker 1: that this may depress prices for batteries and maybe therefore 228 00:11:25,480 --> 00:11:28,840 Speaker 1: also battery metals. Do we think that that will end 229 00:11:28,920 --> 00:11:33,520 Speaker 1: up being something that will be felt short term, medium term, 230 00:11:33,679 --> 00:11:38,000 Speaker 1: long term come to pass, so the longer term to 231 00:11:38,000 --> 00:11:41,600 Speaker 1: reject you for battery prices, it's fairly clear. We've observed 232 00:11:41,679 --> 00:11:45,920 Speaker 1: this incredible reduction in battery prices nearly over the last decade, 233 00:11:46,520 --> 00:11:49,319 Speaker 1: and we expect that to continue and battery prices to 234 00:11:49,400 --> 00:11:51,640 Speaker 1: fall from sort of close to a hundred fifty dollars 235 00:11:51,640 --> 00:11:54,760 Speaker 1: a kill it was, how today to nearly sixty dollars 236 00:11:54,760 --> 00:11:59,520 Speaker 1: by so that longer term tige actually remains relatively unaffected 237 00:11:59,640 --> 00:12:03,800 Speaker 1: by the near term issues. As Colin mentioned around electric vehicles, 238 00:12:03,880 --> 00:12:06,680 Speaker 1: there are so many different overlapping factors that will impact 239 00:12:06,679 --> 00:12:10,040 Speaker 1: the battery price. We've looked at VC investment in Q 240 00:12:10,240 --> 00:12:13,920 Speaker 1: one and battery technology companies, lithium iron companies. It looked 241 00:12:14,040 --> 00:12:17,520 Speaker 1: very similar to VC investment that we saw in previous quarters. 242 00:12:18,040 --> 00:12:20,439 Speaker 1: Clearly there's a lag there in this may drop off 243 00:12:20,480 --> 00:12:23,280 Speaker 1: over the coming months, but many of these investments were 244 00:12:23,360 --> 00:12:28,760 Speaker 1: from strategic investors large automakers where the emission targets aren't 245 00:12:28,800 --> 00:12:32,760 Speaker 1: going away, where desire for competitive attractive vehicles is not 246 00:12:32,840 --> 00:12:36,720 Speaker 1: going away, and that needs the highest qualities actually, so 247 00:12:36,960 --> 00:12:39,280 Speaker 1: longer term, we don't see this as a sort of 248 00:12:39,280 --> 00:12:44,360 Speaker 1: particular disruption. The very immediate impact is that the uncertain 249 00:12:44,400 --> 00:12:48,240 Speaker 1: demand has a really significant ripple effect across the supply chain. 250 00:12:48,640 --> 00:12:51,960 Speaker 1: It's essentially a bullwhip effects. By the time that you 251 00:12:52,040 --> 00:12:54,880 Speaker 1: actually get to the raw materials, the lithium, the nickel, 252 00:12:54,960 --> 00:12:59,800 Speaker 1: the cobalt, that uncertainty is magnified hugely, and there were 253 00:13:00,040 --> 00:13:04,719 Speaker 1: ready issues from raw matail processes and miners desperate for 254 00:13:04,800 --> 00:13:08,800 Speaker 1: greater certainty from automakers. They were already complaining about that 255 00:13:08,840 --> 00:13:12,400 Speaker 1: because the investment time frames didn't line up, like a 256 00:13:12,520 --> 00:13:16,840 Speaker 1: minor wanted many more years of certainty than an automaker 257 00:13:16,920 --> 00:13:20,880 Speaker 1: was willing to give them. This collapse in certainty around 258 00:13:20,920 --> 00:13:25,600 Speaker 1: demand is hugely problematic and will make aligning those timings 259 00:13:25,600 --> 00:13:29,640 Speaker 1: on getting a mind, getting a processing fertility, and a 260 00:13:29,720 --> 00:13:33,719 Speaker 1: battery manufacturing plant all online at the right times much 261 00:13:33,840 --> 00:13:35,960 Speaker 1: much harder. Now that you just do not have this 262 00:13:36,080 --> 00:13:39,840 Speaker 1: visibility on demand. We have seen lithium and nickel production 263 00:13:39,880 --> 00:13:44,240 Speaker 1: capacity around ten percent has also been impacted by quarantine measures, 264 00:13:44,480 --> 00:13:47,679 Speaker 1: which is this sort of additional layer of disruption and 265 00:13:47,720 --> 00:13:52,840 Speaker 1: then delays surrounding COVID nineteen also means that we don't 266 00:13:52,840 --> 00:13:55,800 Speaker 1: expect a coboard production in the Democratic Republic of Congo 267 00:13:56,040 --> 00:13:59,280 Speaker 1: to increase as we had in our early predictions. Instead 268 00:13:59,320 --> 00:14:01,960 Speaker 1: this year we think that will be flat. So Logan, 269 00:14:02,200 --> 00:14:04,440 Speaker 1: let's throw on the other hat that you know quite 270 00:14:04,440 --> 00:14:07,040 Speaker 1: a bit about right now, the clean energy space. Our 271 00:14:07,040 --> 00:14:10,640 Speaker 1: colleagues over in the Bloomberg Economics team got an interview 272 00:14:10,800 --> 00:14:14,160 Speaker 1: with the head of logistics at Longisolar, who was saying 273 00:14:14,200 --> 00:14:16,560 Speaker 1: that these have been challenging times for them from a 274 00:14:16,559 --> 00:14:21,120 Speaker 1: production standpoint due to some of the logistics concerns. Are 275 00:14:21,160 --> 00:14:25,640 Speaker 1: we seeing supply chain issues and logistics as a challenge 276 00:14:26,080 --> 00:14:28,560 Speaker 1: for what we would consider maybe some of the bigger 277 00:14:28,600 --> 00:14:32,440 Speaker 1: clean energy markets, let's say wind and solar. Do you 278 00:14:32,480 --> 00:14:34,640 Speaker 1: think that these supply chain issues are going to have 279 00:14:34,680 --> 00:14:36,720 Speaker 1: a massive impact or is it going to be something 280 00:14:36,760 --> 00:14:40,080 Speaker 1: further on the demand side. So let's stop with supply 281 00:14:40,160 --> 00:14:43,000 Speaker 1: then we consider move on to demand for solar, for 282 00:14:43,280 --> 00:14:47,160 Speaker 1: energy storage and for the domestic market for wind China 283 00:14:47,200 --> 00:14:49,960 Speaker 1: and China supply chain is sort of hugely important, and 284 00:14:49,960 --> 00:14:53,520 Speaker 1: it did face severe disruptions throughout Q one. China is 285 00:14:53,560 --> 00:14:58,040 Speaker 1: almost completely resumed production now, so these factories are coming 286 00:14:58,040 --> 00:15:01,760 Speaker 1: back online and lamping up acted their maximum capacity. So 287 00:15:01,840 --> 00:15:04,880 Speaker 1: you have a few weeks of backlog, but production is 288 00:15:05,000 --> 00:15:09,200 Speaker 1: coming back. Outside of China, some factories are also still 289 00:15:09,200 --> 00:15:12,360 Speaker 1: operating in Europe and the US, but many have shut 290 00:15:12,400 --> 00:15:16,280 Speaker 1: down due to sort of national or local shutdown orders. Well, actually, 291 00:15:16,320 --> 00:15:19,880 Speaker 1: the other big thing is just related difficulties maintaining the 292 00:15:19,920 --> 00:15:24,440 Speaker 1: safety of the workforce. So supply chain was severely disrupted. 293 00:15:24,640 --> 00:15:27,240 Speaker 1: There were a couple of things in China that that 294 00:15:27,400 --> 00:15:31,880 Speaker 1: offset that. Many companies had started stockpiling ahead of Chinese 295 00:15:31,920 --> 00:15:35,200 Speaker 1: New Year, and so you had greater inventory, so you 296 00:15:35,320 --> 00:15:37,200 Speaker 1: knew that many of these factories were going to be 297 00:15:37,240 --> 00:15:39,960 Speaker 1: either shut down or operating at a lower rate. This 298 00:15:40,120 --> 00:15:43,960 Speaker 1: extended it, but there was some preparation built in. The 299 00:15:44,000 --> 00:15:47,240 Speaker 1: demand story is much more uncertain, and for US that 300 00:15:47,400 --> 00:15:50,520 Speaker 1: is a much bigger concern in terms of understanding sort 301 00:15:50,520 --> 00:15:53,320 Speaker 1: of broader decarbonization targets over the next couple of years. 302 00:15:54,000 --> 00:15:56,200 Speaker 1: On the demand side, Does it have to do with 303 00:15:56,240 --> 00:15:59,920 Speaker 1: a lack of government attention because they're distracted in rightfully 304 00:16:00,160 --> 00:16:02,840 Speaker 1: by these health concerns, or does it have to do 305 00:16:02,960 --> 00:16:06,040 Speaker 1: with consumer demand, I mean, explain why demand is so 306 00:16:06,160 --> 00:16:09,560 Speaker 1: uncertain in the medium to longer term. So success more 307 00:16:09,600 --> 00:16:14,000 Speaker 1: broadly is held by continuity and economies of scale. So 308 00:16:14,120 --> 00:16:16,560 Speaker 1: if you have those two things, success is likely to 309 00:16:16,600 --> 00:16:20,040 Speaker 1: come your way. At the moment that disruption, supply chain 310 00:16:20,280 --> 00:16:23,840 Speaker 1: caused ripples in terms of the timing of getting projects 311 00:16:23,920 --> 00:16:27,200 Speaker 1: install of time, and so even though there's only a 312 00:16:27,200 --> 00:16:30,920 Speaker 1: few weeks disruption in the US, for instance, the schedule 313 00:16:31,040 --> 00:16:34,320 Speaker 1: for cranes to get win projects up and running, that's 314 00:16:34,360 --> 00:16:37,560 Speaker 1: a very well managed schedule if there are any hiccups, 315 00:16:37,760 --> 00:16:40,400 Speaker 1: and that has a ripple effect across the board. So 316 00:16:40,480 --> 00:16:44,000 Speaker 1: you do have the supply chain impacting demand. Companies are 317 00:16:44,080 --> 00:16:46,480 Speaker 1: rushing to get projects built by end of year or 318 00:16:46,480 --> 00:16:49,360 Speaker 1: by certain deadlines in order to get that government support. 319 00:16:49,960 --> 00:16:53,640 Speaker 1: We expect some leniency in many markets, so that should 320 00:16:53,720 --> 00:16:56,680 Speaker 1: ease things, but clearly that's something that's just been a concern. 321 00:16:57,400 --> 00:17:01,560 Speaker 1: The other piece is immediate government at engine is clearly elsewhere. 322 00:17:02,080 --> 00:17:06,320 Speaker 1: We've seen around half of total wind and solar capacity 323 00:17:06,359 --> 00:17:10,320 Speaker 1: that was due to be auctioned in has now been postponed. 324 00:17:10,800 --> 00:17:14,200 Speaker 1: Governments are not planning on running the auctions as they were, 325 00:17:14,600 --> 00:17:17,720 Speaker 1: but because clearly there are other priorities and companies don't 326 00:17:17,800 --> 00:17:20,439 Speaker 1: know how to bid into those auctions. And so we 327 00:17:20,480 --> 00:17:23,439 Speaker 1: saw that and File decide not to bid into an 328 00:17:23,440 --> 00:17:27,480 Speaker 1: auction in Europe recently because of the broader uncertainty impacting 329 00:17:27,560 --> 00:17:30,240 Speaker 1: their business. They didn't know where the appropriate place in 330 00:17:30,280 --> 00:17:33,440 Speaker 1: the bid was. And so you do see supply chain 331 00:17:33,480 --> 00:17:38,119 Speaker 1: issues impacting the timing, and that's this renumeration for these projects. 332 00:17:38,600 --> 00:17:42,160 Speaker 1: You see near term policy being pushed back, and there's 333 00:17:42,200 --> 00:17:46,600 Speaker 1: also this issue around longer term targets. Many observers that 334 00:17:46,680 --> 00:17:49,359 Speaker 1: I followed have said, now is not the time to 335 00:17:49,440 --> 00:17:52,639 Speaker 1: be talking about clean energy, to be talking about climate girls. 336 00:17:53,000 --> 00:17:55,119 Speaker 1: This is a distant future and we really need to 337 00:17:55,160 --> 00:17:57,800 Speaker 1: focus on the sort of COVID nineteen sort of pandemic 338 00:17:58,160 --> 00:18:01,959 Speaker 1: right now. For me, that's a very misguided view. I 339 00:18:02,000 --> 00:18:04,600 Speaker 1: think in any time where you're thinking about a long 340 00:18:04,720 --> 00:18:09,800 Speaker 1: term massive stimulus package or any type of nationwide support, 341 00:18:09,960 --> 00:18:13,040 Speaker 1: you want to be aligning that near to need with 342 00:18:13,119 --> 00:18:16,159 Speaker 1: a longer term aim. As well. The fact that in 343 00:18:16,200 --> 00:18:20,280 Speaker 1: some countries there is uncertainty around whether the government will 344 00:18:20,320 --> 00:18:24,320 Speaker 1: continue to push your head with their previous targets around decoganization. 345 00:18:24,720 --> 00:18:27,480 Speaker 1: I think that threatens many of these sort of companies 346 00:18:27,560 --> 00:18:30,720 Speaker 1: long term goals as well. I think green stimulus is 347 00:18:30,760 --> 00:18:33,840 Speaker 1: something that is chatted about quite a bit in circles 348 00:18:33,880 --> 00:18:36,600 Speaker 1: that we're in, But I would like to know are 349 00:18:36,680 --> 00:18:41,320 Speaker 1: we actually seeing any tangible moves into this in any 350 00:18:41,359 --> 00:18:43,879 Speaker 1: country in the world or is this just something that 351 00:18:44,560 --> 00:18:47,280 Speaker 1: maybe people in our industry like to talk about. The 352 00:18:47,400 --> 00:18:49,359 Speaker 1: one thing I can point to that we are seeing 353 00:18:49,600 --> 00:18:52,080 Speaker 1: is out of China and is an indication that ev 354 00:18:52,240 --> 00:18:56,280 Speaker 1: charging infrastructure might be part of that stimulus. The government 355 00:18:56,280 --> 00:18:58,760 Speaker 1: has indicated that charging infrastructure might be one of the 356 00:18:58,760 --> 00:19:02,399 Speaker 1: focus areas. Southern Grid, one of the power grid operators, 357 00:19:02,640 --> 00:19:04,440 Speaker 1: has indicated that they're going to invest about three point 358 00:19:04,480 --> 00:19:06,879 Speaker 1: six billion dollars in charging infrastructure. That just came at 359 00:19:06,920 --> 00:19:09,360 Speaker 1: the end of last week. So that looks like one 360 00:19:09,440 --> 00:19:12,800 Speaker 1: And we know governments do like shovel ready infrastructure projects. Right. 361 00:19:12,840 --> 00:19:15,480 Speaker 1: You go back to the last financial crisis two thousand 362 00:19:15,560 --> 00:19:18,320 Speaker 1: eight nine in the US, things like the whole grid 363 00:19:18,359 --> 00:19:21,520 Speaker 1: modernization effort. The smart grid was a big part of 364 00:19:21,560 --> 00:19:24,600 Speaker 1: the American Recovery and Reinvestment Act was pushing money into 365 00:19:24,680 --> 00:19:26,840 Speaker 1: some of these infrastructure ready projects where you could go 366 00:19:26,920 --> 00:19:29,640 Speaker 1: and spend money and get things moving right away. Now, 367 00:19:29,720 --> 00:19:31,840 Speaker 1: I do think there's sort of a hierarchy of needs 368 00:19:31,960 --> 00:19:33,480 Speaker 1: and in the places that are still in the very 369 00:19:33,560 --> 00:19:36,520 Speaker 1: much the acute phase of this. This is all about 370 00:19:37,040 --> 00:19:40,400 Speaker 1: managing the pandemic, managing the health crisis and the humanitarian 371 00:19:40,440 --> 00:19:43,920 Speaker 1: crisis on that side of it. But then again, looking 372 00:19:43,920 --> 00:19:45,800 Speaker 1: to China as an example, is sort of starting to 373 00:19:45,840 --> 00:19:47,800 Speaker 1: come out of this and thinking where to go with 374 00:19:47,840 --> 00:19:51,359 Speaker 1: how you push the recovery. I think it probably depends 375 00:19:51,359 --> 00:19:53,440 Speaker 1: a lot on the politics of who's in power at 376 00:19:53,440 --> 00:19:56,080 Speaker 1: the time, so you will have that reflected in the 377 00:19:56,119 --> 00:19:59,760 Speaker 1: stimulus packages that come out. So I don't think, for example, 378 00:19:59,760 --> 00:20:03,359 Speaker 1: in Europe, you will see a big relaxation of the 379 00:20:03,400 --> 00:20:05,520 Speaker 1: push on the green deal or just sort of generally 380 00:20:05,560 --> 00:20:08,840 Speaker 1: around the green economy that Europe is trying to push 381 00:20:08,880 --> 00:20:11,320 Speaker 1: and these twenty thirty targets that are in place, that 382 00:20:11,400 --> 00:20:14,199 Speaker 1: would be very hard I think to justify, given all 383 00:20:14,200 --> 00:20:15,840 Speaker 1: the things that have gone into getting it to where 384 00:20:15,840 --> 00:20:18,160 Speaker 1: it is. In the U S, it's a bit more uncertain. 385 00:20:18,480 --> 00:20:20,719 Speaker 1: I don't see much of a push coming on the 386 00:20:21,080 --> 00:20:24,800 Speaker 1: clean transport side as a result of stimulus and recovery efforts. 387 00:20:24,800 --> 00:20:27,280 Speaker 1: In the US. I think that is in line with 388 00:20:27,840 --> 00:20:31,760 Speaker 1: also the Trump administration's recent rollback of fuel economy standards, 389 00:20:31,760 --> 00:20:33,440 Speaker 1: which of course are going to get tied up in court, 390 00:20:33,480 --> 00:20:35,800 Speaker 1: but that's consistent with what they've said there. This is 391 00:20:35,800 --> 00:20:38,040 Speaker 1: not a higher priority. So I think a lot of 392 00:20:38,040 --> 00:20:41,399 Speaker 1: this ends up reflecting the politics and the priorities of 393 00:20:41,400 --> 00:20:43,520 Speaker 1: the groups that are in power in those countries today, 394 00:20:43,920 --> 00:20:45,360 Speaker 1: and that means there's going to be a very big 395 00:20:45,359 --> 00:20:48,679 Speaker 1: patchwork of types of stimulus measures and focus of those 396 00:20:48,680 --> 00:20:53,040 Speaker 1: stimulus measures between countries. I'd agree completely. In the US, 397 00:20:53,280 --> 00:20:56,960 Speaker 1: clean power and dcomganization is much more contentious than it 398 00:20:57,080 --> 00:20:59,680 Speaker 1: is in most parts of EU and many other markets. 399 00:21:00,080 --> 00:21:03,160 Speaker 1: There was nothing relating to clean power in the first 400 00:21:03,200 --> 00:21:06,160 Speaker 1: stimulus package that was passed here in the US. If 401 00:21:06,200 --> 00:21:09,280 Speaker 1: anything is to make it into any upcoming stimulus package, 402 00:21:09,480 --> 00:21:13,639 Speaker 1: which is still potentially a trillion dollar plus package, it 403 00:21:13,680 --> 00:21:16,600 Speaker 1: will be a big fight from Democrats to get anything 404 00:21:16,640 --> 00:21:19,080 Speaker 1: related to clean power in there. It's a much more 405 00:21:19,119 --> 00:21:22,600 Speaker 1: contentious issue in Europe because of the EU Green Deal. 406 00:21:23,000 --> 00:21:25,000 Speaker 1: It does look like they're sort of that longer term 407 00:21:25,000 --> 00:21:28,359 Speaker 1: alignment and a broader desire, even if the details haven't 408 00:21:28,359 --> 00:21:31,640 Speaker 1: been worked out to do something that does align with that. 409 00:21:32,080 --> 00:21:35,040 Speaker 1: And then we have smaller instances like China is clearly 410 00:21:35,040 --> 00:21:38,000 Speaker 1: the big one, but in Korea they passed a similar 411 00:21:38,080 --> 00:21:42,760 Speaker 1: package that included some relief for Korean solo installers. The 412 00:21:42,840 --> 00:21:45,879 Speaker 1: Korean government is very keen for solo to continue to 413 00:21:45,960 --> 00:21:49,040 Speaker 1: continue to be deployed in the country. They bumped up 414 00:21:49,040 --> 00:21:52,280 Speaker 1: the subsidy in order to encourage further adoption. And then 415 00:21:52,440 --> 00:21:54,160 Speaker 1: those are all things at the national level, and that's 416 00:21:54,160 --> 00:21:57,480 Speaker 1: of course where stimulus really comes in, because the government 417 00:21:57,520 --> 00:22:00,240 Speaker 1: has the power to print money and spend money in 418 00:22:00,280 --> 00:22:02,920 Speaker 1: a different way. But one of the interesting policy responses 419 00:22:02,960 --> 00:22:05,240 Speaker 1: I'm waiting to see is what we talked about earlier 420 00:22:05,280 --> 00:22:09,199 Speaker 1: on this this part about the city level. The medical 421 00:22:09,280 --> 00:22:14,160 Speaker 1: data supports the idea that the mortality of the coronavirus 422 00:22:14,160 --> 00:22:16,520 Speaker 1: of COVID nineteen is worse in places that have worse 423 00:22:16,520 --> 00:22:18,840 Speaker 1: air quality. We know the places that have worse air 424 00:22:18,920 --> 00:22:21,760 Speaker 1: quality lead to more respiratory problems. We know people with 425 00:22:21,800 --> 00:22:24,800 Speaker 1: more background respiratory problems have a higher mortality rate. When 426 00:22:24,840 --> 00:22:27,359 Speaker 1: it comes to this, I think there's a real chance 427 00:22:27,400 --> 00:22:30,160 Speaker 1: that that makes some people in cities angry that their 428 00:22:30,200 --> 00:22:33,040 Speaker 1: governments have not done more to tackle this faster. I 429 00:22:33,040 --> 00:22:35,960 Speaker 1: would put myself in that category. I imagine you might 430 00:22:35,960 --> 00:22:38,720 Speaker 1: as well, Dana, And I think there's a possibility that 431 00:22:38,760 --> 00:22:42,480 Speaker 1: at the city level that accelerates some action towards electrifying buses, 432 00:22:42,520 --> 00:22:46,280 Speaker 1: towards electrifying taxis just towards getting on with it some 433 00:22:46,320 --> 00:22:47,879 Speaker 1: of the stuff we've been talking about for quite a 434 00:22:47,920 --> 00:22:50,520 Speaker 1: while that has already started and is happening at scale, 435 00:22:51,080 --> 00:22:53,760 Speaker 1: but could certainly happen faster, and we've seen templates for 436 00:22:53,760 --> 00:22:56,800 Speaker 1: how it can happen faster. There's no trillions attached to 437 00:22:56,840 --> 00:22:58,879 Speaker 1: that with a T or probably even with a B 438 00:22:58,880 --> 00:23:01,120 Speaker 1: billions going out on at and there isn't the ability 439 00:23:01,160 --> 00:23:03,720 Speaker 1: to borrow huge sums of money and get the gears 440 00:23:03,720 --> 00:23:06,840 Speaker 1: the economy turning again. But there is this element of 441 00:23:07,040 --> 00:23:10,560 Speaker 1: legitimacy of government and the priorities that they have and 442 00:23:10,560 --> 00:23:12,440 Speaker 1: what citizens really want them to do. And I think 443 00:23:12,440 --> 00:23:14,399 Speaker 1: there might be some interesting things that emerge from that 444 00:23:14,680 --> 00:23:16,800 Speaker 1: at the municipal level as well as the national level. 445 00:23:17,440 --> 00:23:19,320 Speaker 1: So there are some out there who think maybe we 446 00:23:19,440 --> 00:23:22,879 Speaker 1: have reached peak carbon emissions and that we might actually 447 00:23:22,880 --> 00:23:26,160 Speaker 1: be on the decline after this. But what I'm hearing 448 00:23:26,160 --> 00:23:28,800 Speaker 1: for both of your industries is that that actually might 449 00:23:28,880 --> 00:23:31,200 Speaker 1: still be lagging out there in the future. Now I'm 450 00:23:31,200 --> 00:23:33,679 Speaker 1: asking you guys to make tough predictions right here on 451 00:23:33,720 --> 00:23:36,679 Speaker 1: the spot. But my question to both you Logan and 452 00:23:36,760 --> 00:23:39,040 Speaker 1: Colin is, at least for the spaces that you cover 453 00:23:39,160 --> 00:23:42,280 Speaker 1: so clean energy on Logan and advanced transportation for Colin, 454 00:23:42,359 --> 00:23:46,040 Speaker 1: do you think we've hit peak emissions and will be 455 00:23:46,080 --> 00:23:48,679 Speaker 1: on the decline at least on in a decade all sense, 456 00:23:49,080 --> 00:23:52,320 Speaker 1: when we get out of this. One thing we started 457 00:23:52,359 --> 00:23:54,919 Speaker 1: tentatively saying a year and a half ago is that 458 00:23:55,000 --> 00:23:58,480 Speaker 1: it actually looks like sales of new internal combustion engine 459 00:23:58,520 --> 00:24:02,280 Speaker 1: vehicles might have already peaked. Now, that was really uncomfortable 460 00:24:02,320 --> 00:24:05,719 Speaker 1: at the time because that was and we were saying, look, 461 00:24:06,520 --> 00:24:09,000 Speaker 1: might have been a high water mark for that. So far, 462 00:24:09,080 --> 00:24:11,520 Speaker 1: that is holding up, and that will continue to hold 463 00:24:11,600 --> 00:24:14,480 Speaker 1: up after this. So, look, you're gonna have internal combustion 464 00:24:14,520 --> 00:24:17,119 Speaker 1: engine vehicle sales. Overall vehicle sales globally are going to 465 00:24:17,160 --> 00:24:19,760 Speaker 1: be lower this year than they were in seventeen. They're 466 00:24:19,760 --> 00:24:21,359 Speaker 1: going to be lower the year after. They're probably gonna 467 00:24:21,359 --> 00:24:24,199 Speaker 1: be lower in two, it's gonna take a while for 468 00:24:24,280 --> 00:24:26,640 Speaker 1: this to fully bounce back. By the time you get 469 00:24:26,640 --> 00:24:29,159 Speaker 1: to that point, we're anticipating evs are really starting to 470 00:24:29,200 --> 00:24:31,680 Speaker 1: get cost competitive and their policy pressure is starting to 471 00:24:31,800 --> 00:24:33,880 Speaker 1: ratch it up. So then they're getting into the sort 472 00:24:33,880 --> 00:24:36,560 Speaker 1: of five to ten of new vehicle sales. Then it's 473 00:24:36,560 --> 00:24:39,600 Speaker 1: really hard to see internal combustion engine vehicles ever returning 474 00:24:39,640 --> 00:24:42,159 Speaker 1: to those levels of thousand seventeen. So I think in 475 00:24:42,240 --> 00:24:44,880 Speaker 1: sales of new internal combustion engine cars in the passenger 476 00:24:44,960 --> 00:24:48,080 Speaker 1: vehicle segment have already peaked in the past. When I've 477 00:24:48,080 --> 00:24:50,239 Speaker 1: made that in presentations, I've put a question mark at 478 00:24:50,240 --> 00:24:52,960 Speaker 1: the end of the title slide. I'm taking the question 479 00:24:53,000 --> 00:24:55,400 Speaker 1: mark out. I think they've peaked. That doesn't mean transport 480 00:24:55,400 --> 00:24:59,000 Speaker 1: emissions overall have peaked, unfortunately. So we know aviation is 481 00:24:59,080 --> 00:25:02,159 Speaker 1: still high and rise of course this year, notwithstanding. You 482 00:25:02,200 --> 00:25:05,520 Speaker 1: know shipping is high and rising this year. Notwithstanding. I 483 00:25:05,520 --> 00:25:06,960 Speaker 1: don't think those are going to be on a good 484 00:25:06,960 --> 00:25:10,920 Speaker 1: trajectory anytime soon. I think also trucking means that emissions 485 00:25:10,920 --> 00:25:13,560 Speaker 1: from transport are going to keep rising. Now, when you 486 00:25:13,600 --> 00:25:16,240 Speaker 1: look at overall emissions, you need to figure Okay, look 487 00:25:16,280 --> 00:25:19,240 Speaker 1: maybe some segments of transport are still flat, or some 488 00:25:19,320 --> 00:25:22,200 Speaker 1: are down slightly, or some are rising. Is that enough 489 00:25:22,240 --> 00:25:24,679 Speaker 1: to be offset by what's going on in the power sector. 490 00:25:25,160 --> 00:25:27,720 Speaker 1: So I think we're not quite there yet, but I 491 00:25:27,760 --> 00:25:31,600 Speaker 1: think road transport emissions are going to peak within the 492 00:25:31,640 --> 00:25:34,960 Speaker 1: next ten years. Passenger vehicles is going to peak before that. 493 00:25:35,320 --> 00:25:37,520 Speaker 1: Right now, the fleet of internal combustion engine vehicles is 494 00:25:37,560 --> 00:25:40,440 Speaker 1: still growing. But each year where we don't see them 495 00:25:40,440 --> 00:25:43,320 Speaker 1: grow again, you're you're sort of not locking in a 496 00:25:43,320 --> 00:25:45,800 Speaker 1: bunch of further oil consumption that from those vehicles that 497 00:25:45,840 --> 00:25:47,720 Speaker 1: would stay on the road for ten to fifteen years. 498 00:25:48,119 --> 00:25:51,320 Speaker 1: So what's happening right now is really significant. So you know, 499 00:25:51,440 --> 00:25:55,680 Speaker 1: annual New Energy Outlook exercise, in the outlook, you ended 500 00:25:55,760 --> 00:25:58,159 Speaker 1: up with clean energy making up. Just a visit of 501 00:25:58,200 --> 00:26:01,600 Speaker 1: half tital generation was a more bullish view in terms 502 00:26:01,600 --> 00:26:04,600 Speaker 1: of renewable energy adoption than what you saw from many 503 00:26:04,640 --> 00:26:07,399 Speaker 1: of the oil majors from the i E. Now, even 504 00:26:07,520 --> 00:26:10,919 Speaker 1: in that be nephew, there was a huge gap between 505 00:26:10,920 --> 00:26:13,760 Speaker 1: that and a two degrees scenario and that in a 506 00:26:13,800 --> 00:26:16,959 Speaker 1: one point five degree scenario. And so the message was 507 00:26:17,400 --> 00:26:21,600 Speaker 1: even with this significant acceleration in installations for wind and solar. 508 00:26:21,920 --> 00:26:24,800 Speaker 1: There's still much more needs to be done. Now is 509 00:26:24,800 --> 00:26:27,000 Speaker 1: not at the time to take the foot of the pedal. 510 00:26:27,480 --> 00:26:31,040 Speaker 1: This clearly complicates that for wind and solo we were 511 00:26:31,520 --> 00:26:37,400 Speaker 1: expecting record years in as of Q one, our outlook 512 00:26:37,440 --> 00:26:41,479 Speaker 1: for global wind installations for this year is twelve than 513 00:26:41,560 --> 00:26:44,480 Speaker 1: what we were saying Q for last year. The outlook 514 00:26:44,520 --> 00:26:46,840 Speaker 1: from US at the midpoint for solo is eight percent 515 00:26:46,920 --> 00:26:49,840 Speaker 1: lower than what we were saying in QUE four last year. 516 00:26:50,240 --> 00:26:53,960 Speaker 1: So this certainly hurts things in that near term. If 517 00:26:54,040 --> 00:26:57,600 Speaker 1: installations are down, it makes what was already a sort 518 00:26:57,600 --> 00:27:01,560 Speaker 1: of gantuan task even harder. It doesn't mean that the 519 00:27:01,600 --> 00:27:06,960 Speaker 1: PACER change cannot accelerate, because greater awareness around emissions, around 520 00:27:06,960 --> 00:27:10,840 Speaker 1: the benefits the economic benefits of decarbonization, and around the 521 00:27:10,920 --> 00:27:14,159 Speaker 1: economics wind and solar is in many parts of the 522 00:27:14,160 --> 00:27:19,840 Speaker 1: world a cheaper way of producing electricity than emitting alternatives, 523 00:27:20,240 --> 00:27:22,720 Speaker 1: even before you account for any of the nonpower sector 524 00:27:22,760 --> 00:27:26,880 Speaker 1: related costs. So longer term, still more needs to be done. 525 00:27:27,240 --> 00:27:30,119 Speaker 1: COVID nineteen sort of doesn't change that. This does end 526 00:27:30,200 --> 00:27:32,960 Speaker 1: up being a stumble now. What what I think is 527 00:27:33,000 --> 00:27:37,040 Speaker 1: particularly interesting around this is how it could impact the 528 00:27:37,119 --> 00:27:40,800 Speaker 1: type of clean engine installations in place as well. Colin 529 00:27:40,840 --> 00:27:43,080 Speaker 1: mentioned at the very beginning that many cards it would 530 00:27:43,080 --> 00:27:46,840 Speaker 1: be counted as a discretionary spending. Now, utility to get 531 00:27:46,920 --> 00:27:49,439 Speaker 1: wind and solar doesn't tend to fall into that bucket, 532 00:27:49,840 --> 00:27:53,840 Speaker 1: but distributed solar and distributed storage very much does. In 533 00:27:53,960 --> 00:27:57,400 Speaker 1: terms of where the biggest impact on clean power has 534 00:27:57,480 --> 00:28:00,200 Speaker 1: been of the back of COVID, the biggest impact act 535 00:28:00,240 --> 00:28:04,560 Speaker 1: has been in distributed solo and distributed steorage. We reviewed 536 00:28:04,640 --> 00:28:07,720 Speaker 1: what a number of market participants had said over Q one, 537 00:28:07,800 --> 00:28:11,280 Speaker 1: so these are typically solo installers in the US. These 538 00:28:11,320 --> 00:28:15,520 Speaker 1: market artistants seem to agree that sales were down compared 539 00:28:15,560 --> 00:28:19,160 Speaker 1: to what they'd expected. In January and February, average number 540 00:28:19,160 --> 00:28:24,720 Speaker 1: of permits was down across California, Texas, New York, Florida, Nevada. 541 00:28:25,160 --> 00:28:29,439 Speaker 1: So across clean power, this is a stumble. It makes 542 00:28:29,600 --> 00:28:34,160 Speaker 1: an already hard task harder. Distributed clean power gets hit 543 00:28:34,240 --> 00:28:37,159 Speaker 1: the hardest. So I think we'll have to continue to 544 00:28:37,200 --> 00:28:40,080 Speaker 1: come back to this in the next five and ten years. 545 00:28:40,080 --> 00:28:42,480 Speaker 1: So let's let's keep this podcast and these interviews going. 546 00:28:42,480 --> 00:28:45,200 Speaker 1: But I think one thing that is very clear today 547 00:28:45,200 --> 00:28:50,240 Speaker 1: that peeling back the onion around what is something that's 548 00:28:50,240 --> 00:28:54,280 Speaker 1: impacting industry right now and what will in the near term, 549 00:28:54,360 --> 00:28:56,640 Speaker 1: and then what will in the longer term. Is something 550 00:28:56,640 --> 00:29:00,840 Speaker 1: that we're watching very closely and kind of monitoring as 551 00:29:00,880 --> 00:29:04,560 Speaker 1: we look at how this is all evolving. So I 552 00:29:04,600 --> 00:29:07,920 Speaker 1: want to know, since we started this podcast today with 553 00:29:08,720 --> 00:29:10,880 Speaker 1: you know, an impact to how you're moving around or 554 00:29:10,920 --> 00:29:13,160 Speaker 1: as the case, maybe not moving around since we're all 555 00:29:13,200 --> 00:29:15,880 Speaker 1: recording from our homes right now, I want to know 556 00:29:16,120 --> 00:29:19,800 Speaker 1: what has been the biggest change to the way that 557 00:29:19,920 --> 00:29:22,920 Speaker 1: you work. For me, if that's quite an easy one, 558 00:29:23,000 --> 00:29:25,680 Speaker 1: it's that I spend half the day taking care of 559 00:29:25,680 --> 00:29:27,520 Speaker 1: a one and a half year old at home. I 560 00:29:27,560 --> 00:29:29,960 Speaker 1: love it. I'm having a great time. I know that's 561 00:29:30,000 --> 00:29:32,239 Speaker 1: not the conventional answer from people who've been stuck at 562 00:29:32,240 --> 00:29:35,760 Speaker 1: home with their kids um and certainly balancing work is tough. 563 00:29:36,280 --> 00:29:39,280 Speaker 1: One of the most difficult things I think is contact switching. Right. 564 00:29:39,280 --> 00:29:41,880 Speaker 1: You sort of go from being intensely focused trying to 565 00:29:41,920 --> 00:29:44,480 Speaker 1: say something professional and trying to get a piece of 566 00:29:44,480 --> 00:29:47,640 Speaker 1: work done or edit something and publish something, to quickly 567 00:29:47,760 --> 00:29:50,040 Speaker 1: dealing with somebody who's about to jump off a table. 568 00:29:50,920 --> 00:29:53,880 Speaker 1: And so that's a huge challenge. But I think there's 569 00:29:53,960 --> 00:29:55,880 Speaker 1: a lot of great things about it. I'm getting to 570 00:29:55,960 --> 00:29:58,160 Speaker 1: spend more time with my one and a half year 571 00:29:58,160 --> 00:29:59,880 Speaker 1: old son than I would for all this sudden happened 572 00:29:59,880 --> 00:30:03,520 Speaker 1: so silver Lines. So the biggest change for my perspective 573 00:30:03,720 --> 00:30:06,560 Speaker 1: is making sure that I'm speaking to the team frequently. 574 00:30:06,880 --> 00:30:09,320 Speaker 1: There's so many moving parts at the moment. Everyone is 575 00:30:09,400 --> 00:30:13,360 Speaker 1: juggling a huge workload and personal commitments, and so it's 576 00:30:13,400 --> 00:30:17,000 Speaker 1: making sure that everyone in the team is communicating, is happy, 577 00:30:17,440 --> 00:30:20,680 Speaker 1: and is not overworked. It's really hard to balance your 578 00:30:20,680 --> 00:30:23,360 Speaker 1: time if you're not leaving the house, so making sure 579 00:30:23,400 --> 00:30:26,840 Speaker 1: that we retain some balance as well. So, Logan, that's 580 00:30:26,840 --> 00:30:28,600 Speaker 1: a really good point. And I would say the biggest 581 00:30:28,600 --> 00:30:30,920 Speaker 1: thing that has changed from my perspective since we have 582 00:30:30,960 --> 00:30:33,840 Speaker 1: all started working from home has been that time has 583 00:30:33,880 --> 00:30:37,160 Speaker 1: become incredibly fluid and that there's no start time, there's 584 00:30:37,200 --> 00:30:40,360 Speaker 1: no stop time. There is parenting and working, and that 585 00:30:40,520 --> 00:30:42,920 Speaker 1: is very evident by the fact that we are recording 586 00:30:42,960 --> 00:30:45,400 Speaker 1: on what is a public holiday. So I would like 587 00:30:45,480 --> 00:30:47,680 Speaker 1: to say thank you, Logan, thank you calling so much 588 00:30:47,720 --> 00:30:51,320 Speaker 1: for carving time out of your busy schedules to be 589 00:30:51,440 --> 00:30:54,200 Speaker 1: here on the podcast. Thanks Dana, it's always a pleasure 590 00:30:54,200 --> 00:30:57,520 Speaker 1: and yet very interesting times ahead. Everybody, stay safe and 591 00:30:57,560 --> 00:31:03,360 Speaker 1: take care. Thanks Dania, Thanks Colin. Bloombergin e F is 592 00:31:03,360 --> 00:31:06,160 Speaker 1: a service provided by Bloomberg Finance LP and its affiliates. 593 00:31:06,200 --> 00:31:08,920 Speaker 1: This recording does not constitute, nor it should it be construed, 594 00:31:08,960 --> 00:31:12,720 Speaker 1: as investment advice, investment recommendations, or a recommendation as to 595 00:31:12,920 --> 00:31:15,440 Speaker 1: an investment or other strategy. Bloomberg. An e F should 596 00:31:15,440 --> 00:31:18,040 Speaker 1: not be considered as information sufficient upon which to base 597 00:31:18,080 --> 00:31:21,600 Speaker 1: an investment decision. Neither Bloomberg Finance LP nor any of 598 00:31:21,640 --> 00:31:24,640 Speaker 1: its affiliates makes any representation or warranty as to the 599 00:31:24,680 --> 00:31:27,920 Speaker 1: accuracy or completeness of the information contained in this recording, 600 00:31:27,960 --> 00:31:30,280 Speaker 1: and any liability as a result of this recording is 601 00:31:30,320 --> 00:31:31,320 Speaker 1: expressly disclaimed.