1 00:00:00,120 --> 00:00:02,760 Speaker 1: This is Dana Perkins and you're listening to Switch on 2 00:00:02,960 --> 00:00:06,720 Speaker 1: the BNF podcast. Earlier in June, BNAF released the twenty 3 00:00:06,760 --> 00:00:10,200 Speaker 1: twenty three edition of the Electric Vehicle Outlook, or EVO 4 00:00:10,280 --> 00:00:13,119 Speaker 1: for short. It's one of our flagship publications where we 5 00:00:13,160 --> 00:00:17,960 Speaker 1: take a detailed look at how electrification, shared mobility, autonomous driving, 6 00:00:18,079 --> 00:00:21,319 Speaker 1: and other factors are going to impact road transport in 7 00:00:21,360 --> 00:00:25,080 Speaker 1: the coming decades. The report is written by our extensive 8 00:00:25,120 --> 00:00:28,120 Speaker 1: team of specialists from around the world. They can look 9 00:00:28,160 --> 00:00:31,080 Speaker 1: at scenarios for how these trends are going to impact 10 00:00:31,120 --> 00:00:35,760 Speaker 1: the automotive, energy, infrastructure, and battery materials markets. So we 11 00:00:35,840 --> 00:00:38,400 Speaker 1: want to know what's changed since twenty twenty two and 12 00:00:38,440 --> 00:00:41,320 Speaker 1: set it against net zero targets and also talk about 13 00:00:41,360 --> 00:00:44,320 Speaker 1: which areas of the electric vehicle fleet are succeeding and 14 00:00:44,360 --> 00:00:47,040 Speaker 1: which might be lagging. In today's episode, I get to 15 00:00:47,040 --> 00:00:50,159 Speaker 1: speak with benef's head of Advanced Transport, Colin Mcharricer, and 16 00:00:50,240 --> 00:00:53,880 Speaker 1: together we go through consumer demand for electric vehicles across 17 00:00:53,920 --> 00:00:57,240 Speaker 1: different global regions, along with the current mid and long 18 00:00:57,360 --> 00:01:00,480 Speaker 1: term sales forecasts. We also discussed the chin challenge is 19 00:01:00,480 --> 00:01:04,240 Speaker 1: facing medium to heavy commercial fleets and the evolution of 20 00:01:04,280 --> 00:01:07,000 Speaker 1: battery chemistries and the new battery tech that is now 21 00:01:07,040 --> 00:01:10,160 Speaker 1: starting to reach the commercial market. Now, of course this 22 00:01:10,280 --> 00:01:13,000 Speaker 1: is just a snapshot into what is an extensive report, 23 00:01:13,240 --> 00:01:14,800 Speaker 1: but we've pulled out a few nuggets for you and 24 00:01:14,840 --> 00:01:16,959 Speaker 1: hopefully you enjoy. And if you do like it and 25 00:01:17,000 --> 00:01:19,400 Speaker 1: you want to hear more podcasts from us, make sure 26 00:01:19,480 --> 00:01:22,800 Speaker 1: to subscribe to receive updates on future episodes. And also 27 00:01:23,000 --> 00:01:24,839 Speaker 1: if you want to share it with others, the best 28 00:01:24,840 --> 00:01:26,360 Speaker 1: way to do that is to give us a rating 29 00:01:26,480 --> 00:01:30,039 Speaker 1: on Apple Podcasts or Spotify. Now my conversation with Colin 30 00:01:30,280 --> 00:01:44,440 Speaker 1: about the twenty twenty three Electric Vehicle Outlook from vna Hi, Colin, 31 00:01:44,520 --> 00:01:46,800 Speaker 1: thank you for joining us again today. 32 00:01:47,040 --> 00:01:48,600 Speaker 2: Hid integrate to be on the program again. 33 00:01:48,880 --> 00:01:51,320 Speaker 1: So we're here to talk about this year's edition. So 34 00:01:51,360 --> 00:01:54,840 Speaker 1: the twenty twenty three Electric Vehicle Outlook. So we do 35 00:01:54,960 --> 00:01:57,639 Speaker 1: one of these every year, which is a herculean effort. 36 00:01:57,640 --> 00:02:00,600 Speaker 1: And I know there are numerous members both in your 37 00:02:00,600 --> 00:02:03,440 Speaker 1: team and in other parts of VNF that all contribute 38 00:02:03,480 --> 00:02:06,320 Speaker 1: to making this report happen. And so for those who 39 00:02:06,320 --> 00:02:08,600 Speaker 1: maybe are not familiar with the report, or maybe didn't 40 00:02:08,639 --> 00:02:10,720 Speaker 1: listen to our show last year where we went over 41 00:02:10,760 --> 00:02:13,000 Speaker 1: some of the findings, which a few things have changed 42 00:02:13,040 --> 00:02:15,480 Speaker 1: between then and now. Can you just give a very 43 00:02:15,560 --> 00:02:18,800 Speaker 1: quick overview of what this is and perhaps isn't. 44 00:02:18,960 --> 00:02:21,880 Speaker 2: Yeah, definitely. So the Electric Vehicle Outlook is our outlook 45 00:02:21,919 --> 00:02:25,079 Speaker 2: at BNF for all of road transport. So despite the name, 46 00:02:25,120 --> 00:02:28,240 Speaker 2: it's not only about electric vehicles, it's about everything that's 47 00:02:28,320 --> 00:02:31,000 Speaker 2: going on with the vehicles on the road in the world. 48 00:02:31,120 --> 00:02:35,400 Speaker 2: And it also bears mentioning that that isn't just passenger cars. 49 00:02:35,720 --> 00:02:39,200 Speaker 2: So we immediately think of cars, but of course there's 50 00:02:39,280 --> 00:02:40,920 Speaker 2: vans and trucks that are moving around all the goods 51 00:02:40,919 --> 00:02:43,079 Speaker 2: around the world. In some markets, two and three wheelers 52 00:02:43,080 --> 00:02:45,639 Speaker 2: are a big part of the mobility mix. There's municipal 53 00:02:45,639 --> 00:02:47,799 Speaker 2: buses as well. And what you find as you dig 54 00:02:47,840 --> 00:02:50,400 Speaker 2: into these is that not only is each country different, 55 00:02:50,720 --> 00:02:53,720 Speaker 2: but each segment is on its own sort of different trajectory. 56 00:02:54,200 --> 00:02:56,920 Speaker 2: So when we do this exercise, what we're trying to 57 00:02:56,919 --> 00:02:59,000 Speaker 2: figure out is what's happening, and again not just with 58 00:02:59,080 --> 00:03:02,080 Speaker 2: electric vehicles, with combustion vehicles and with other aspects of 59 00:03:02,080 --> 00:03:04,960 Speaker 2: the road transport mix around the world and across all 60 00:03:05,000 --> 00:03:07,400 Speaker 2: these different segments. So we sort of start with what 61 00:03:07,440 --> 00:03:10,160 Speaker 2: does the world look like today, and that is saying 62 00:03:10,600 --> 00:03:13,799 Speaker 2: literally how much do people move around in each country 63 00:03:14,080 --> 00:03:16,240 Speaker 2: and how much do goods move around? So in people 64 00:03:16,280 --> 00:03:18,880 Speaker 2: you're talking about something like a passenger kilometer, or in 65 00:03:18,960 --> 00:03:21,320 Speaker 2: freight you're talking a freight ton kilometer, and then we 66 00:03:21,360 --> 00:03:24,320 Speaker 2: look at how those might change over time. So that's 67 00:03:24,360 --> 00:03:26,760 Speaker 2: where the things around, Okay, the adoption of electric vehicles 68 00:03:26,760 --> 00:03:29,000 Speaker 2: comes in. That's where things like shared mobility. That's where 69 00:03:29,000 --> 00:03:33,399 Speaker 2: things like autonomous driving, changes in consumer behavior, demographic changes, 70 00:03:33,720 --> 00:03:36,840 Speaker 2: urbanization changes, and all of these things come together to 71 00:03:36,920 --> 00:03:39,880 Speaker 2: form our outlook for what happens for road transport. And 72 00:03:39,920 --> 00:03:42,160 Speaker 2: then once we've got that outlook together about where we 73 00:03:42,200 --> 00:03:45,000 Speaker 2: think each segment and country is going, we then map 74 00:03:45,040 --> 00:03:47,320 Speaker 2: that onto on all these other areas, and those are 75 00:03:47,360 --> 00:03:52,040 Speaker 2: things like electricity demand, battery metals and materials, CO two emissions, 76 00:03:52,320 --> 00:03:56,160 Speaker 2: oil demand, infrastructure needs, and of course vehicle sales as well. 77 00:03:56,560 --> 00:03:59,560 Speaker 1: So that was for the people who are not necessarily 78 00:04:00,040 --> 00:04:01,960 Speaker 1: avid followers of this one year to the next, but 79 00:04:02,040 --> 00:04:05,400 Speaker 1: for those who are, there were some new sections this year, 80 00:04:05,520 --> 00:04:09,560 Speaker 1: and within that we added a section on Nordic's in California. 81 00:04:09,680 --> 00:04:12,480 Speaker 1: Can you explain why those sections were added and then 82 00:04:12,560 --> 00:04:14,240 Speaker 1: let's come to some of the other things that maybe 83 00:04:14,280 --> 00:04:17,080 Speaker 1: are newer updates for your loyal followers who have been 84 00:04:17,080 --> 00:04:19,760 Speaker 1: waiting for this year's installment of the electric vehicle outlook. 85 00:04:20,040 --> 00:04:22,360 Speaker 2: Yeah, so the Nordics in California. Every year we get 86 00:04:22,360 --> 00:04:24,039 Speaker 2: asked for by quite a few of our clients to 87 00:04:24,040 --> 00:04:26,200 Speaker 2: add different countries. And each time you add a country, 88 00:04:26,240 --> 00:04:27,479 Speaker 2: it's quite a bit of work because you have to 89 00:04:27,480 --> 00:04:29,680 Speaker 2: go and dig up all of the data about the 90 00:04:29,680 --> 00:04:32,679 Speaker 2: mobility mix in that country and all the other factors 91 00:04:32,680 --> 00:04:34,760 Speaker 2: that I mentioned about what might change that in the future. 92 00:04:34,839 --> 00:04:36,359 Speaker 2: So we try and limit it to adding kind of 93 00:04:36,360 --> 00:04:38,560 Speaker 2: one or two each year. And what we wanted to 94 00:04:38,560 --> 00:04:40,960 Speaker 2: do this year is to show what does the transition 95 00:04:41,000 --> 00:04:43,919 Speaker 2: look like in some leading areas. So California is of 96 00:04:43,920 --> 00:04:47,000 Speaker 2: course leading the US, but as also a leader globally, 97 00:04:47,160 --> 00:04:49,760 Speaker 2: the Nordics is probably the furthest along this transition of 98 00:04:49,800 --> 00:04:52,760 Speaker 2: any group of countries or states. I'm sitting in Oslo 99 00:04:52,839 --> 00:04:55,280 Speaker 2: and Norway right now. Over eighty percent of vehicle sales 100 00:04:55,279 --> 00:04:58,400 Speaker 2: are fully electric. Markets like Sweden, Finland others are not 101 00:04:58,440 --> 00:05:00,560 Speaker 2: too far behind. So what we I wanted to do 102 00:05:00,680 --> 00:05:04,240 Speaker 2: was play out some of the emissions and energy market 103 00:05:04,240 --> 00:05:07,440 Speaker 2: impacts and fleet turnover impacts in countries and regions where 104 00:05:07,480 --> 00:05:10,039 Speaker 2: electricic flood option is going quite quickly, So that was 105 00:05:10,040 --> 00:05:12,560 Speaker 2: the logic behind adding those. Last year we added a 106 00:05:12,560 --> 00:05:14,679 Speaker 2: lot of detail on Southeast Asia because we were seeing 107 00:05:14,680 --> 00:05:17,719 Speaker 2: really interesting things happening there. Next year we'll probably add 108 00:05:17,760 --> 00:05:21,640 Speaker 2: another big emerging economy, so somewhere potentially like Brazil or Mexico, 109 00:05:21,880 --> 00:05:24,640 Speaker 2: where again the mix some mobilities different and the timelines 110 00:05:24,640 --> 00:05:26,240 Speaker 2: are different for all of the things that we're seeing 111 00:05:26,279 --> 00:05:27,080 Speaker 2: happen around the world. 112 00:05:27,360 --> 00:05:29,000 Speaker 1: So a bit of a case study and something that 113 00:05:29,040 --> 00:05:30,640 Speaker 1: you could in theory extrapolate out. 114 00:05:30,800 --> 00:05:33,440 Speaker 2: Yeah, exactly what we want to have is indicative countries 115 00:05:33,520 --> 00:05:35,880 Speaker 2: or regions that people can understand. So we now cover 116 00:05:36,000 --> 00:05:38,159 Speaker 2: fourteen major auto markets around the world. 117 00:05:38,480 --> 00:05:41,080 Speaker 1: So there are a lot of different sections in our 118 00:05:41,120 --> 00:05:44,520 Speaker 1: research on the vehicle outlook. Which section matters the most? 119 00:05:44,880 --> 00:05:47,440 Speaker 1: Obviously they all matter, and it's hard to pick your 120 00:05:47,440 --> 00:05:49,680 Speaker 1: favorite child, but in this you know what is weighted 121 00:05:49,720 --> 00:05:53,240 Speaker 1: most heavily. When you think about things like batteries, battery chemistry, 122 00:05:53,480 --> 00:05:57,640 Speaker 1: or supply chains or charging networks or consumer trends, which 123 00:05:57,640 --> 00:06:01,359 Speaker 1: one would you say is probably the most influential part 124 00:06:01,480 --> 00:06:05,760 Speaker 1: of actually determining what these long term forecasts really look like. 125 00:06:05,960 --> 00:06:08,400 Speaker 2: Yeah, I mean the starting point for BNF has been 126 00:06:08,480 --> 00:06:12,000 Speaker 2: for a long time that batteries are really what's enabling 127 00:06:12,080 --> 00:06:15,320 Speaker 2: this change. And you can take the view that well, 128 00:06:15,360 --> 00:06:18,000 Speaker 2: governments could just force the issue and push every all 129 00:06:18,040 --> 00:06:21,680 Speaker 2: the markets over into electric with enough taxation or subsidies, 130 00:06:21,720 --> 00:06:24,080 Speaker 2: but that gets politically difficult in a lot of countries 131 00:06:24,080 --> 00:06:28,320 Speaker 2: if the underlying technology isn't continuing to get cheaper and better. Fortunately, 132 00:06:28,360 --> 00:06:31,160 Speaker 2: the technology is continuing to get better. It actually got 133 00:06:31,240 --> 00:06:33,880 Speaker 2: more expensive last year due to spike and raw material prices, 134 00:06:33,880 --> 00:06:35,200 Speaker 2: So we go into that a lot and look at 135 00:06:35,240 --> 00:06:37,640 Speaker 2: what's happening there. But I would say the starting point 136 00:06:37,800 --> 00:06:40,480 Speaker 2: is still really in terms of what's going to change 137 00:06:40,480 --> 00:06:43,160 Speaker 2: when we talk about electric vehicles anyway, is certainly the 138 00:06:43,160 --> 00:06:45,680 Speaker 2: battery side. So one of the things we did this year, 139 00:06:45,720 --> 00:06:48,040 Speaker 2: for example, is say, look, battery prices went out slightly 140 00:06:48,160 --> 00:06:51,000 Speaker 2: last year, what do we think happens and what's some 141 00:06:51,080 --> 00:06:53,920 Speaker 2: scenario analysis for when you get to in the passenger 142 00:06:54,000 --> 00:06:57,279 Speaker 2: vehicle segment price parity with combustion vehicles based on different 143 00:06:57,320 --> 00:07:00,760 Speaker 2: battery experienced curves or learning rates that we saw them 144 00:07:00,760 --> 00:07:02,719 Speaker 2: go up for the first time last year. So again 145 00:07:02,880 --> 00:07:06,719 Speaker 2: looking at the underlying technology, battery chemistry mix, and price outlook, 146 00:07:06,920 --> 00:07:09,440 Speaker 2: it still forms the basis for us being able to 147 00:07:09,440 --> 00:07:11,960 Speaker 2: say with some confidence that things are going to continue 148 00:07:11,960 --> 00:07:15,840 Speaker 2: to accelerate quickly on ev adoption. And so again you 149 00:07:15,880 --> 00:07:18,120 Speaker 2: said it, Yeah, I don't want to pick a favorite child, 150 00:07:18,280 --> 00:07:21,040 Speaker 2: but I would say that's probably the most foundational part 151 00:07:21,040 --> 00:07:23,160 Speaker 2: of the work that we're doing. Now. We also do 152 00:07:23,240 --> 00:07:26,040 Speaker 2: this net zero scenario. So the base scenario in the 153 00:07:26,080 --> 00:07:29,800 Speaker 2: report is this economic transition scenario, which says, look, this 154 00:07:29,880 --> 00:07:33,120 Speaker 2: is led by techno economic forces and that's the primary 155 00:07:33,160 --> 00:07:35,840 Speaker 2: thing that drives changes in the vehicle markets around the world. 156 00:07:35,920 --> 00:07:38,200 Speaker 2: And we assume that no new policies are in place, 157 00:07:38,360 --> 00:07:41,480 Speaker 2: and again that's where the battery cost stuff really becomes critical. 158 00:07:41,680 --> 00:07:43,760 Speaker 2: But we also run a net zero scenario, which is 159 00:07:43,800 --> 00:07:46,320 Speaker 2: more of a backcasting exercise that says, if we want 160 00:07:46,360 --> 00:07:48,560 Speaker 2: to get to a net zero capable fleet by twenty fifty, 161 00:07:48,640 --> 00:07:51,440 Speaker 2: what has to happen. That's less reliant on the battery 162 00:07:51,480 --> 00:07:54,160 Speaker 2: price part, because you're sort of saying, well, if you 163 00:07:54,280 --> 00:07:56,640 Speaker 2: believe we can get on track, here's where it would 164 00:07:56,640 --> 00:07:59,240 Speaker 2: have to go, and here's the policy recommendations to keep 165 00:07:59,240 --> 00:08:01,040 Speaker 2: it on track. Obviously, that's a bit of a different 166 00:08:01,040 --> 00:08:03,760 Speaker 2: exercise than sort of what's the trajectory we're on today. 167 00:08:03,680 --> 00:08:06,520 Speaker 1: But the punchline ultimately being that it is possible. A 168 00:08:06,640 --> 00:08:10,080 Speaker 1: net zero future is possible with enough will. 169 00:08:10,440 --> 00:08:12,480 Speaker 2: Yeah, definitely. And I mean one of the things we 170 00:08:12,560 --> 00:08:14,840 Speaker 2: sort of show is that some countries are actually getting 171 00:08:14,960 --> 00:08:16,920 Speaker 2: kind of close, and some segments are getting kind of 172 00:08:16,920 --> 00:08:19,520 Speaker 2: close to the net zero scenario. So when we break 173 00:08:19,560 --> 00:08:23,360 Speaker 2: out two wheelers, three wheelers, buses, those segments are actually 174 00:08:23,440 --> 00:08:26,320 Speaker 2: pretty close. Three wheelers is pretty much on track, two 175 00:08:26,360 --> 00:08:29,440 Speaker 2: wheelers and buses are pretty close, and then you get 176 00:08:29,440 --> 00:08:33,160 Speaker 2: into light duty vans and commercial vehicles and passenger vehicles, 177 00:08:33,200 --> 00:08:36,120 Speaker 2: and there's a lot of variation by country, but again 178 00:08:36,120 --> 00:08:38,360 Speaker 2: you're starting to get some countries that are looking like 179 00:08:38,400 --> 00:08:40,760 Speaker 2: they're going to be able to phase out combustion vehicle 180 00:08:40,800 --> 00:08:44,120 Speaker 2: sales at least very close to by the early to 181 00:08:44,160 --> 00:08:47,080 Speaker 2: mid twenty thirties. And that's roughly what you need to 182 00:08:47,080 --> 00:08:49,720 Speaker 2: stay on track for a carbon neutral capable fleet by 183 00:08:49,720 --> 00:08:53,240 Speaker 2: twenty fifty. Now, it's worth noting that twenty fifty carbon 184 00:08:53,240 --> 00:08:55,880 Speaker 2: neutral capable fleet you also have to have a lot 185 00:08:55,880 --> 00:08:58,120 Speaker 2: of stuff going on in the power system to decarbonize 186 00:08:58,120 --> 00:09:00,680 Speaker 2: the power system to enable that fleet to actually operate 187 00:09:00,720 --> 00:09:03,000 Speaker 2: in a zero emissions way. And so that's a separate 188 00:09:03,000 --> 00:09:05,240 Speaker 2: part of bnef's work, the New Energy Outlook. But what 189 00:09:05,280 --> 00:09:07,760 Speaker 2: we're doing here is looking at can the fleet of 190 00:09:07,840 --> 00:09:11,319 Speaker 2: vehicles on the road operate without producing CO two emissions. 191 00:09:11,600 --> 00:09:13,920 Speaker 1: So there's a lot of money at stake. This is 192 00:09:14,040 --> 00:09:17,640 Speaker 1: definitely a big industry and when we look at consumer demand, 193 00:09:17,880 --> 00:09:22,280 Speaker 1: electric vehicle sales are increasing. Where are they I guess 194 00:09:22,720 --> 00:09:26,600 Speaker 1: now in terms of sales and where do we expect 195 00:09:26,640 --> 00:09:28,920 Speaker 1: them to be in the future, you know, twenty thirty 196 00:09:28,960 --> 00:09:30,960 Speaker 1: all the way out to twenty fifty, both in terms 197 00:09:31,040 --> 00:09:33,920 Speaker 1: of percentage of total vehicles sold, but also in terms 198 00:09:34,000 --> 00:09:36,600 Speaker 1: of how much money is there actually flooding into this 199 00:09:36,720 --> 00:09:38,160 Speaker 1: specific part of the market. 200 00:09:38,320 --> 00:09:41,640 Speaker 2: Yeah, let's start with the near term picture. So last 201 00:09:41,720 --> 00:09:44,720 Speaker 2: year there was about ten point five million plug in 202 00:09:44,800 --> 00:09:47,480 Speaker 2: vehicle sold, so that's battery electrics and plug in hybrids. 203 00:09:47,720 --> 00:09:49,319 Speaker 2: This year, we think there's going to be about fourteen 204 00:09:49,320 --> 00:09:51,440 Speaker 2: million sold a little higher than that. Actually, we're trending 205 00:09:51,440 --> 00:09:54,240 Speaker 2: a little bit above that, and by twenty twenty six, 206 00:09:54,480 --> 00:09:57,280 Speaker 2: we're forecasting about twenty seven million sales, and just to 207 00:09:57,320 --> 00:10:00,920 Speaker 2: translate that into percentage terms, that's about thirty percent, so 208 00:10:01,000 --> 00:10:03,400 Speaker 2: just under a third of the global vehicle market we're 209 00:10:03,440 --> 00:10:06,280 Speaker 2: saying as plug in vehicles by twenty twenty six, and 210 00:10:06,360 --> 00:10:08,880 Speaker 2: that's really not very far away, and that's that's coming 211 00:10:08,880 --> 00:10:12,520 Speaker 2: at us quite quickly. What's important again there is that 212 00:10:12,559 --> 00:10:15,000 Speaker 2: there's quite a lot of regional variations. So countries like 213 00:10:15,080 --> 00:10:17,559 Speaker 2: China are probably going to be above fifty percent by then, 214 00:10:17,720 --> 00:10:20,559 Speaker 2: regions like Europe above forty percent, and then there's kind 215 00:10:20,559 --> 00:10:23,000 Speaker 2: of everybody else, and there's quite a big spread between 216 00:10:23,040 --> 00:10:25,080 Speaker 2: the some of the other markets. So the near term 217 00:10:25,120 --> 00:10:29,959 Speaker 2: picture is one of continued pretty rapid acceleration, but then 218 00:10:30,160 --> 00:10:33,200 Speaker 2: a lot of variety between the different countries. And we 219 00:10:33,280 --> 00:10:35,600 Speaker 2: think the fleet of passenger vehicles we're talking about here 220 00:10:35,720 --> 00:10:39,959 Speaker 2: crosses one hundred million evs by twenty twenty six. Now, 221 00:10:40,080 --> 00:10:41,680 Speaker 2: one of the things that kind of falls out of 222 00:10:41,679 --> 00:10:45,320 Speaker 2: that is that combustion vehicle sales have already peaked. So 223 00:10:45,360 --> 00:10:48,800 Speaker 2: they actually peaked in twenty seventeen, they declined in twenty 224 00:10:48,840 --> 00:10:51,600 Speaker 2: eighteen and twenty nineteen, then really dropped in twenty twenty 225 00:10:51,679 --> 00:10:53,679 Speaker 2: because of COVID, recovered a bit in twenty twenty one 226 00:10:53,720 --> 00:10:56,440 Speaker 2: and recovering again in twenty twenty two, but all of 227 00:10:56,480 --> 00:10:59,679 Speaker 2: that recovery is essentially on the electric side, and we 228 00:10:59,720 --> 00:11:02,640 Speaker 2: don't really see them ever getting back to those twenty 229 00:11:02,679 --> 00:11:05,280 Speaker 2: seventeen highs. You just look at what's going on in China, 230 00:11:05,320 --> 00:11:07,520 Speaker 2: where the most recent month sales are, you're already at 231 00:11:07,520 --> 00:11:10,760 Speaker 2: a third of sales. In Europe, you're running around twenty percent. 232 00:11:10,960 --> 00:11:13,560 Speaker 2: It's just really hard to offset that anywhere else in 233 00:11:13,600 --> 00:11:15,800 Speaker 2: the world to get up to the levels of combustion 234 00:11:15,920 --> 00:11:17,880 Speaker 2: vehicle sales we saw in twenty seventeen. So that's kind 235 00:11:17,880 --> 00:11:20,280 Speaker 2: of a near term implication is that they're already combustion 236 00:11:20,400 --> 00:11:22,800 Speaker 2: vehicle sales are already twenty percent off their peak of 237 00:11:22,800 --> 00:11:24,720 Speaker 2: twenty seventeen, and they're probably going to be more like 238 00:11:24,800 --> 00:11:26,520 Speaker 2: forty percent off their peak by the time you get 239 00:11:26,520 --> 00:11:29,000 Speaker 2: to twenty twenty six, and they're now in terminal decline. 240 00:11:29,120 --> 00:11:31,600 Speaker 2: When we look at it further out, a couple of 241 00:11:31,600 --> 00:11:35,920 Speaker 2: things happen. One this gap between the countries, it sticks 242 00:11:35,920 --> 00:11:38,800 Speaker 2: around for a while, but then it starts to even 243 00:11:38,840 --> 00:11:41,079 Speaker 2: out a little bit. It starts to get smaller as 244 00:11:41,240 --> 00:11:43,560 Speaker 2: things take off in the countries that have been slower 245 00:11:43,559 --> 00:11:45,720 Speaker 2: to start with. So a good example of that is 246 00:11:45,720 --> 00:11:48,400 Speaker 2: somewhere like Australia. It's been quite slow so far in 247 00:11:48,480 --> 00:11:51,040 Speaker 2: evy adoption, but it's now picking up quite quickly. And 248 00:11:51,080 --> 00:11:53,080 Speaker 2: we've seen this in a few cases, the countries that 249 00:11:53,240 --> 00:11:55,600 Speaker 2: go slower at the beginning oft and then pick up faster. 250 00:11:55,960 --> 00:11:58,000 Speaker 2: And some of that is just built up demand. There's 251 00:11:58,040 --> 00:12:01,280 Speaker 2: also an economic effect going on when we look at 252 00:12:01,320 --> 00:12:04,280 Speaker 2: emerging economies. So the way we model this is around 253 00:12:04,440 --> 00:12:07,720 Speaker 2: the price competitiveness of evs in different segments and in 254 00:12:07,720 --> 00:12:10,080 Speaker 2: different countries, and one of the things you find is 255 00:12:10,120 --> 00:12:13,160 Speaker 2: that emerging economies are quite price sensitive, right There's not 256 00:12:13,280 --> 00:12:16,079 Speaker 2: a lot of spare money people have to spend on vehicles. 257 00:12:16,160 --> 00:12:17,520 Speaker 2: I mean there is at the premium end, but in 258 00:12:17,559 --> 00:12:19,680 Speaker 2: the bulk of the vehicle market in emerging economy there's 259 00:12:19,679 --> 00:12:22,160 Speaker 2: not a huge amount of extra money available. That price 260 00:12:22,280 --> 00:12:26,559 Speaker 2: sensitivity works against EV adoption before the point of price parity, 261 00:12:26,600 --> 00:12:29,160 Speaker 2: but then it accelerates it afterwards. Once EV's become the 262 00:12:29,240 --> 00:12:32,320 Speaker 2: cheaper option, then things start to go quite quickly, whereas 263 00:12:32,360 --> 00:12:34,600 Speaker 2: before they were the cheapest option, things go quite slowly. 264 00:12:34,640 --> 00:12:37,079 Speaker 2: So that's why you get these different curves where it's 265 00:12:37,160 --> 00:12:39,720 Speaker 2: kind of slow and then really accelerating in the countries 266 00:12:39,720 --> 00:12:41,760 Speaker 2: that are going slowly now and in the emerging economies 267 00:12:41,800 --> 00:12:43,920 Speaker 2: and it's actually fast, and then starting to tail off 268 00:12:43,920 --> 00:12:45,839 Speaker 2: in some of the wealthier countries that are in China 269 00:12:45,880 --> 00:12:48,080 Speaker 2: that are going quicker right now. And the reason for 270 00:12:48,120 --> 00:12:51,000 Speaker 2: that tailoff is actually just you start to saturate the market. 271 00:12:51,200 --> 00:12:54,280 Speaker 2: Around the twenty thirty five period, we have markets like 272 00:12:54,320 --> 00:12:56,360 Speaker 2: Europe and China really starting to slow down because you 273 00:12:56,400 --> 00:12:59,000 Speaker 2: start to get to sort of seventy eighty even ninety 274 00:12:59,000 --> 00:13:01,840 Speaker 2: percent of sales being electric, and that just means that 275 00:13:02,000 --> 00:13:03,920 Speaker 2: we think the last sort of ten percent is going 276 00:13:03,960 --> 00:13:06,000 Speaker 2: to be a bit hard to address, and so the 277 00:13:06,120 --> 00:13:08,720 Speaker 2: S curve flows down there. On a global basis, again, 278 00:13:08,760 --> 00:13:11,400 Speaker 2: talking about the passenger vehicle segment. Evs get to about 279 00:13:11,440 --> 00:13:14,320 Speaker 2: seventy five percent of sales in twenty forty globally, and 280 00:13:14,360 --> 00:13:16,079 Speaker 2: that's pure electrics. At that point we see plug in 281 00:13:16,160 --> 00:13:18,839 Speaker 2: hybrids kind of disappearing. By then there are scenarios where 282 00:13:18,880 --> 00:13:21,000 Speaker 2: that goes faster. Of course, the net zero scenario it's 283 00:13:21,080 --> 00:13:22,920 Speaker 2: much faster. It has to be one hundred percent or 284 00:13:22,960 --> 00:13:24,840 Speaker 2: almost one hundred percent by twenty thirty five of new 285 00:13:24,920 --> 00:13:27,360 Speaker 2: vehicle sales to standtrack for the net zero scenario. But 286 00:13:27,440 --> 00:13:30,439 Speaker 2: that's our economic transition scenario, which says no new policies. 287 00:13:30,559 --> 00:13:32,360 Speaker 2: It's about seventy five percent by twenty forty. 288 00:13:32,679 --> 00:13:35,360 Speaker 1: So we've talked a bit about where adoption is going 289 00:13:35,400 --> 00:13:37,719 Speaker 1: really well in what's working well. But let's talk a 290 00:13:37,800 --> 00:13:41,440 Speaker 1: little bit about the medium in heavy commercial vehicle space, 291 00:13:41,640 --> 00:13:44,840 Speaker 1: which is lagging behind some of the other success stories 292 00:13:44,880 --> 00:13:48,200 Speaker 1: like three wheelers. So what is it that's keeping medium 293 00:13:48,200 --> 00:13:52,040 Speaker 1: and heavy commercial vehicles from really having the same adoption 294 00:13:52,200 --> 00:13:53,800 Speaker 1: as you're seeing in other areas. 295 00:13:54,160 --> 00:13:57,840 Speaker 2: Yeah, so the commercial vehicle segment is significantly behind the 296 00:13:57,920 --> 00:14:01,200 Speaker 2: other vehicle segments, and there's a couple couple of reasons 297 00:14:01,200 --> 00:14:04,200 Speaker 2: for that. One of them so far has really just 298 00:14:04,240 --> 00:14:07,960 Speaker 2: been around available models right now, there just aren't many 299 00:14:08,160 --> 00:14:10,559 Speaker 2: that you can go out and buy, and there's sort 300 00:14:10,559 --> 00:14:13,320 Speaker 2: of technological reasons for that. Batteries needed to get better. 301 00:14:13,559 --> 00:14:16,240 Speaker 2: We're starting to see that log jam ease a little bit, 302 00:14:16,400 --> 00:14:18,920 Speaker 2: and that's we're starting to see a lot more models, 303 00:14:19,080 --> 00:14:23,680 Speaker 2: particularly launching in the big markets, so China, North America, Europe, 304 00:14:23,680 --> 00:14:25,880 Speaker 2: and actually so far China is leading this, but it's 305 00:14:25,920 --> 00:14:28,040 Speaker 2: interesting to note that trucking might be one of the 306 00:14:28,040 --> 00:14:30,880 Speaker 2: areas where the US is really going to jump forward on. 307 00:14:30,960 --> 00:14:32,720 Speaker 2: It's been a bit behind those other two regions on 308 00:14:32,720 --> 00:14:35,080 Speaker 2: passenger cars. But I actually think there's some really interesting 309 00:14:35,120 --> 00:14:37,440 Speaker 2: stuff happening on heavy and medium trucks in the US 310 00:14:37,480 --> 00:14:40,000 Speaker 2: and a lot of very interested, large corporate buyers who 311 00:14:40,040 --> 00:14:42,200 Speaker 2: are going to push that forward, and some interesting starting 312 00:14:42,200 --> 00:14:45,200 Speaker 2: points places like ports using these big vehicles for dray Edge, 313 00:14:45,240 --> 00:14:48,840 Speaker 2: and you're seeing some really fascinating activity happening there in California. 314 00:14:48,920 --> 00:14:51,400 Speaker 2: But so there's that model availability question, which is sort 315 00:14:51,400 --> 00:14:53,760 Speaker 2: of being easy now you're seeing more things launch. Then 316 00:14:53,800 --> 00:14:56,240 Speaker 2: there's the price part of it. These vehicles are still 317 00:14:56,280 --> 00:14:59,600 Speaker 2: significantly more expensive, but we see that coming down the 318 00:14:59,640 --> 00:15:01,240 Speaker 2: same way we see it coming down on the passenger 319 00:15:01,320 --> 00:15:03,600 Speaker 2: vehicle side. In general. We've seen the prices of batteries 320 00:15:03,600 --> 00:15:05,840 Speaker 2: going into trucks lag a couple of years what you 321 00:15:05,880 --> 00:15:08,240 Speaker 2: see in passenger cars, and that's just because passenger cars 322 00:15:08,240 --> 00:15:10,400 Speaker 2: are a bigger segment, the buyers have more power, and 323 00:15:10,400 --> 00:15:13,320 Speaker 2: there's just lower prices negotiated there. But again that's starting 324 00:15:13,320 --> 00:15:15,520 Speaker 2: to close a little bit too. The last thing that 325 00:15:15,880 --> 00:15:19,920 Speaker 2: is really still there is charging heavy trucks at the 326 00:15:19,960 --> 00:15:22,640 Speaker 2: highway is tough. It's a lot of power. It's a 327 00:15:22,720 --> 00:15:25,800 Speaker 2: huge demand on the grid in many cases in places 328 00:15:25,840 --> 00:15:28,720 Speaker 2: where there isn't a very thick grid connection, if you will, 329 00:15:28,920 --> 00:15:32,240 Speaker 2: and that's a challenge. Now, it's not a challenge for everybody. 330 00:15:32,320 --> 00:15:34,840 Speaker 2: There is a fair amount of depot charging that can 331 00:15:34,880 --> 00:15:38,400 Speaker 2: go on and predictable routes and relatively slow charging overnight 332 00:15:38,440 --> 00:15:41,360 Speaker 2: because most of those vehicles stop overnight, but that really 333 00:15:41,400 --> 00:15:44,480 Speaker 2: heavy duty, long haul trucking, there is a big charging 334 00:15:44,480 --> 00:15:47,880 Speaker 2: infrastructure need there now. The good thing is we're also 335 00:15:47,920 --> 00:15:50,200 Speaker 2: seeing a lot of money starting to flow towards that 336 00:15:50,360 --> 00:15:54,000 Speaker 2: and a lot more truck focused charging stations start to 337 00:15:54,000 --> 00:15:56,200 Speaker 2: be built. But it's kind of early days, and so 338 00:15:56,760 --> 00:15:59,680 Speaker 2: the EV share of the medium and heavy commercial vehicle 339 00:15:59,680 --> 00:16:02,440 Speaker 2: fleet last year was only zero point one percent, so 340 00:16:02,680 --> 00:16:04,480 Speaker 2: we're at the very very beginning of that. So for 341 00:16:04,520 --> 00:16:07,000 Speaker 2: passenger vehicles it's about two percent of the fleet last year, 342 00:16:07,200 --> 00:16:09,200 Speaker 2: for some of the other ones it's much higher. Commercial 343 00:16:09,280 --> 00:16:12,120 Speaker 2: and heavy vehicles about zero point one percent of the fleet. 344 00:16:12,200 --> 00:16:14,760 Speaker 2: But we saw again just kind of when you're looking 345 00:16:14,800 --> 00:16:17,200 Speaker 2: at these segments where it's early, you're trying to scan 346 00:16:17,280 --> 00:16:18,880 Speaker 2: the horizon of it and see what's happening, and you 347 00:16:18,960 --> 00:16:22,160 Speaker 2: start to see some interesting success stories. So China is 348 00:16:22,200 --> 00:16:24,200 Speaker 2: doing a lot on this. You're in Towards the end 349 00:16:24,200 --> 00:16:26,840 Speaker 2: of last year, there were a few months where medium 350 00:16:26,920 --> 00:16:30,000 Speaker 2: and heavy zero missions vehicles so that includes some fuel 351 00:16:30,000 --> 00:16:32,680 Speaker 2: cell vehicles hit around five percent of medium and heavy 352 00:16:32,680 --> 00:16:35,360 Speaker 2: truck sales in China. On the light commercial vehicle front 353 00:16:35,400 --> 00:16:38,360 Speaker 2: South Korea, about twenty five percent of light commercial vehicle 354 00:16:38,400 --> 00:16:40,880 Speaker 2: sales in South Korea are already electric, so you're starting 355 00:16:40,880 --> 00:16:43,000 Speaker 2: to see more of that stuff happen, but it is 356 00:16:43,080 --> 00:16:46,160 Speaker 2: early days. And I think that charging infrastructure part is 357 00:16:46,200 --> 00:16:48,880 Speaker 2: both a real opportunity and a real challenge. 358 00:16:48,920 --> 00:16:51,480 Speaker 1: And can we describe what a day in life really 359 00:16:51,520 --> 00:16:53,680 Speaker 1: looks like for someone who is driving one of those 360 00:16:53,680 --> 00:16:56,760 Speaker 1: commercial vehicles, because my understanding is that they're driving long 361 00:16:56,800 --> 00:16:59,560 Speaker 1: distances and have really long hours. And to your point 362 00:16:59,600 --> 00:17:02,600 Speaker 1: regarding charging overnight, that makes sense when you're on the road, 363 00:17:02,600 --> 00:17:05,199 Speaker 1: but can you even make it to overnight? Do you 364 00:17:05,280 --> 00:17:07,760 Speaker 1: have the range and the power? And if not, how 365 00:17:07,800 --> 00:17:10,480 Speaker 1: long is your lunch break essentially that you will need 366 00:17:10,520 --> 00:17:12,399 Speaker 1: to take in order to recharge in order to be 367 00:17:12,440 --> 00:17:14,560 Speaker 1: able to make that route. And I guess if I 368 00:17:14,600 --> 00:17:17,960 Speaker 1: really had to boil it down, what's the range and 369 00:17:18,160 --> 00:17:22,520 Speaker 1: what's the recharge time for a let's say heavy duty 370 00:17:22,720 --> 00:17:25,600 Speaker 1: semi style vehicle or a lory as they would call 371 00:17:25,640 --> 00:17:26,360 Speaker 1: the mayor in the UK. 372 00:17:26,800 --> 00:17:28,560 Speaker 2: Yeah, this is another one that varies a fair bit 373 00:17:28,560 --> 00:17:31,120 Speaker 2: because there's actually different regulations in different countries on how 374 00:17:31,160 --> 00:17:33,080 Speaker 2: long drivers have to stop for. So we did some 375 00:17:33,119 --> 00:17:35,560 Speaker 2: work looking at root patterns within Europe and actually what 376 00:17:35,600 --> 00:17:37,800 Speaker 2: you discover is that there's quite a lot of most 377 00:17:37,800 --> 00:17:40,760 Speaker 2: of the freight moved is actually moved on routes less 378 00:17:40,800 --> 00:17:43,560 Speaker 2: than four or five hundred kilometers in Europe, but you 379 00:17:43,640 --> 00:17:46,000 Speaker 2: do still have a fair bit of really long haul 380 00:17:46,040 --> 00:17:48,560 Speaker 2: stuff and in that case then you are going to 381 00:17:48,560 --> 00:17:51,679 Speaker 2: be dependent on the charging infrastructure on route. And so 382 00:17:52,040 --> 00:17:54,480 Speaker 2: what we did find is that if you say, look 383 00:17:54,520 --> 00:17:56,680 Speaker 2: at Europe, the average time or the amount of time 384 00:17:56,720 --> 00:17:59,000 Speaker 2: that a driver is required to stop for every four 385 00:17:59,000 --> 00:18:02,920 Speaker 2: hours of driving sufficient to recharge to add significant enough 386 00:18:03,000 --> 00:18:05,400 Speaker 2: range to continue on the trip. So I actually don't 387 00:18:05,400 --> 00:18:08,200 Speaker 2: think the downtime is going to be the limitter. Here. 388 00:18:08,240 --> 00:18:10,480 Speaker 2: You're starting to see the truck ranges creep up. A 389 00:18:10,480 --> 00:18:12,800 Speaker 2: lot of them are still in regional and urban duty 390 00:18:12,800 --> 00:18:15,679 Speaker 2: cycles right now, so they do maybe two three hundred, 391 00:18:15,880 --> 00:18:18,679 Speaker 2: four hundred kilometers. Even we're probably going to see the 392 00:18:18,720 --> 00:18:21,359 Speaker 2: next ones that reach five hundred kilometers in large scale 393 00:18:21,359 --> 00:18:23,640 Speaker 2: production in the next little while. Tesla Semi of course 394 00:18:23,640 --> 00:18:25,040 Speaker 2: claiming they're going to be able to do much more 395 00:18:25,080 --> 00:18:28,159 Speaker 2: than that, but we haven't actually seen that in fully 396 00:18:28,200 --> 00:18:31,119 Speaker 2: loaded delivering that capability, which is important to note, but 397 00:18:31,160 --> 00:18:32,920 Speaker 2: I don't think it's going to be the dwell time. 398 00:18:32,960 --> 00:18:35,760 Speaker 2: I think there is more activity around megawatt scale charging, 399 00:18:35,800 --> 00:18:37,879 Speaker 2: so being able to deliver a full megawatt of power 400 00:18:37,880 --> 00:18:40,040 Speaker 2: to the truck. Once you do that, you can cut 401 00:18:40,040 --> 00:18:42,040 Speaker 2: the charging time down into what I think will fit 402 00:18:42,080 --> 00:18:44,760 Speaker 2: into a normal rest period that a driver needs to take. Anyway, 403 00:18:44,840 --> 00:18:47,359 Speaker 2: based on the calculations we've done, the bigger challenge is 404 00:18:47,400 --> 00:18:49,720 Speaker 2: going to be getting all that power down to where 405 00:18:49,720 --> 00:18:51,720 Speaker 2: you need it, and so there you might see a 406 00:18:51,800 --> 00:18:54,879 Speaker 2: quite interesting set of solutions come in. You're seeing in 407 00:18:54,960 --> 00:18:58,040 Speaker 2: China they're experimenting with some battery swapping. You're probably going 408 00:18:58,080 --> 00:19:00,480 Speaker 2: to see a lot of battery storage at the sites 409 00:19:00,560 --> 00:19:03,240 Speaker 2: so that you're charging those batteries at a slower rate 410 00:19:03,320 --> 00:19:05,720 Speaker 2: and then charging battery to battery to cut some of 411 00:19:05,720 --> 00:19:07,719 Speaker 2: the grid strain that you're seeing there. And then you're 412 00:19:07,720 --> 00:19:09,240 Speaker 2: probably also going to see a bit of a land 413 00:19:09,280 --> 00:19:12,640 Speaker 2: grab for where you have places where there is sufficient 414 00:19:12,720 --> 00:19:16,159 Speaker 2: charging or power capacity coming down to the site that 415 00:19:16,200 --> 00:19:18,480 Speaker 2: are going to be suitable as larger scale truck stops. 416 00:19:19,920 --> 00:19:22,479 Speaker 1: Now let's switch over to innovation a little bit, and 417 00:19:22,480 --> 00:19:26,119 Speaker 1: on the technology side, there have been some experiments of 418 00:19:26,160 --> 00:19:29,480 Speaker 1: sorts going on when it comes to battery technology and 419 00:19:29,520 --> 00:19:32,320 Speaker 1: battery chemistries. Can you share a little bit around what's 420 00:19:32,359 --> 00:19:35,080 Speaker 1: happening when it comes to battery chemistries at the moment, 421 00:19:35,359 --> 00:19:37,440 Speaker 1: maybe what are the more exciting innovations? 422 00:19:37,760 --> 00:19:40,159 Speaker 2: Yeah, this year we highlighted three. So each year we 423 00:19:40,200 --> 00:19:42,440 Speaker 2: try and do these thematic highlights where we look at 424 00:19:42,440 --> 00:19:45,520 Speaker 2: things that are we think kind of interesting questions. And 425 00:19:45,760 --> 00:19:47,520 Speaker 2: one of the ones that are beyond the sort of 426 00:19:47,560 --> 00:19:50,159 Speaker 2: big picture modeling stuff and country level modeling, and one 427 00:19:50,200 --> 00:19:52,040 Speaker 2: of the ones we came up with this year was 428 00:19:52,280 --> 00:19:55,199 Speaker 2: noting how there are all these battery innovations that have 429 00:19:55,359 --> 00:19:58,480 Speaker 2: been considered pre commercial for quite a while but are 430 00:19:58,560 --> 00:20:02,320 Speaker 2: now entering the commerci realization phase. And so what we 431 00:20:02,359 --> 00:20:04,760 Speaker 2: did is we identified three of them, and there are more, 432 00:20:04,840 --> 00:20:08,000 Speaker 2: but I think three of the most interesting ones are 433 00:20:08,440 --> 00:20:12,639 Speaker 2: one sodium ion batteries on next generation anautes and solid 434 00:20:12,640 --> 00:20:15,960 Speaker 2: state batteries. And our battery team is all over this 435 00:20:16,119 --> 00:20:19,240 Speaker 2: and they've been publishing a lot on tracking these developments 436 00:20:19,280 --> 00:20:21,280 Speaker 2: over the years and how they've gotten to this point. 437 00:20:21,400 --> 00:20:23,520 Speaker 2: But I think the important thing to note is that 438 00:20:23,640 --> 00:20:26,120 Speaker 2: one innovation in the battery industry is not slowing down 439 00:20:26,119 --> 00:20:28,520 Speaker 2: at all. If anything, it's speeding up as the industry grows, 440 00:20:28,520 --> 00:20:30,920 Speaker 2: which is what we've expected, but it's still sometimes hard 441 00:20:30,920 --> 00:20:34,159 Speaker 2: to predict exactly what shape that takes. On sodium ion batteries, 442 00:20:34,200 --> 00:20:36,160 Speaker 2: this is a technology that is in theory been around 443 00:20:36,160 --> 00:20:39,280 Speaker 2: for quite a while, but there was challenges. You've got 444 00:20:39,280 --> 00:20:41,960 Speaker 2: this balancing act anytime with a new battery around things 445 00:20:42,000 --> 00:20:45,280 Speaker 2: like cycle life and capacity and density and all these 446 00:20:45,280 --> 00:20:47,760 Speaker 2: sorts of things, and some of those it looks like 447 00:20:47,840 --> 00:20:51,840 Speaker 2: some of the leading battery manufacturers have significantly improved on 448 00:20:51,880 --> 00:20:53,960 Speaker 2: the technology enough to be confident that they can put 449 00:20:54,000 --> 00:20:56,520 Speaker 2: it into passenger cars. So you've seen the very first 450 00:20:56,680 --> 00:20:59,440 Speaker 2: set of announcements from some smaller players and some big 451 00:20:59,480 --> 00:21:03,119 Speaker 2: ones on building significant amounts of sodium ion battery capacity 452 00:21:03,200 --> 00:21:06,640 Speaker 2: and commercializing that into vehicles late this year or more 453 00:21:06,760 --> 00:21:09,160 Speaker 2: likely in the next few years, but that's a big 454 00:21:09,200 --> 00:21:12,320 Speaker 2: that's a potential game changer. Now, the energy density isn't 455 00:21:12,359 --> 00:21:15,960 Speaker 2: as good as traditional lithium ion batteries, but they're very 456 00:21:16,040 --> 00:21:18,679 Speaker 2: stable and the materials for them are very cheap, and 457 00:21:18,720 --> 00:21:21,399 Speaker 2: we've done some work looking at how low those prices 458 00:21:21,440 --> 00:21:23,359 Speaker 2: could go, and we think there's a route to getting 459 00:21:23,400 --> 00:21:25,800 Speaker 2: fifty dollars a kilo what hour sodium I own batteries, 460 00:21:25,920 --> 00:21:29,480 Speaker 2: which would be a game changer for very affordable electric vehicles. Now, 461 00:21:29,480 --> 00:21:31,560 Speaker 2: that won't happen overnight. What we've seen is that things 462 00:21:31,600 --> 00:21:33,720 Speaker 2: take time to scale up in the battery industry. But 463 00:21:33,800 --> 00:21:37,080 Speaker 2: that is a chemistry and a technological advancement that we 464 00:21:37,160 --> 00:21:40,000 Speaker 2: think can play a significant role in alleviating some of 465 00:21:40,000 --> 00:21:42,400 Speaker 2: the pinch points we've seen on the battery supply chain 466 00:21:42,520 --> 00:21:44,720 Speaker 2: for some of the materials, So things like lithium or 467 00:21:44,760 --> 00:21:47,040 Speaker 2: cobalt or nickel that spiked last year and I have 468 00:21:47,160 --> 00:21:49,840 Speaker 2: since come down quite significantly, So it's not to say 469 00:21:49,840 --> 00:21:52,199 Speaker 2: they all remain high, but there will be future spikes 470 00:21:52,200 --> 00:21:54,920 Speaker 2: of all of these things and having a diversified portfolio 471 00:21:55,080 --> 00:21:58,000 Speaker 2: of battery options that you can go to if that 472 00:21:58,119 --> 00:22:00,520 Speaker 2: happens for a prolonged period of time, is very, very 473 00:22:00,520 --> 00:22:03,720 Speaker 2: good for the industry. So we think sodium ion is 474 00:22:03,800 --> 00:22:06,320 Speaker 2: going to start at the lower end of the vehicle market, 475 00:22:06,480 --> 00:22:08,920 Speaker 2: similar to the way lithium iron phosphate batteries did a 476 00:22:08,960 --> 00:22:11,320 Speaker 2: few years ago, but we think it has potential to 477 00:22:11,880 --> 00:22:14,480 Speaker 2: change the dynamics significantly sort of in twenty thirty and 478 00:22:14,520 --> 00:22:16,960 Speaker 2: beyond in terms of total amount of lithium demand needed 479 00:22:16,960 --> 00:22:17,560 Speaker 2: for vehicles. 480 00:22:17,880 --> 00:22:20,520 Speaker 1: So really at a point when we talked so much 481 00:22:20,560 --> 00:22:24,200 Speaker 1: about range anxiety and wanting to increase range for drivers 482 00:22:24,240 --> 00:22:27,320 Speaker 1: over and over again, and how that instinctively seems like 483 00:22:27,359 --> 00:22:29,320 Speaker 1: the way of the future. The way of the future 484 00:22:29,359 --> 00:22:31,800 Speaker 1: also increasingly looks like you're going to have different types 485 00:22:31,840 --> 00:22:35,720 Speaker 1: of vehicles for different economic price ranges and also use cases, 486 00:22:35,800 --> 00:22:39,120 Speaker 1: and that perhaps maybe a much lower range but also 487 00:22:39,240 --> 00:22:42,520 Speaker 1: much lower cost for a specific use case. Perhaps urban 488 00:22:42,560 --> 00:22:45,439 Speaker 1: pinging around seems like it's more of a potential than 489 00:22:45,480 --> 00:22:46,200 Speaker 1: it was in the past. 490 00:22:46,560 --> 00:22:48,760 Speaker 2: Yeah, definitely, And this is an important thing, is that 491 00:22:49,000 --> 00:22:51,840 Speaker 2: you're going to see more separation in the overall vehicle 492 00:22:51,880 --> 00:22:54,119 Speaker 2: market in terms of all of it, really the battery 493 00:22:54,160 --> 00:22:56,879 Speaker 2: chemistry they use, the range that people require. As you 494 00:22:56,960 --> 00:22:59,000 Speaker 2: get to more and more scale and get into more 495 00:22:59,040 --> 00:23:01,399 Speaker 2: and more segments, As I said earlier, some segments are 496 00:23:01,400 --> 00:23:03,679 Speaker 2: more price sensitive than others, so you really need to 497 00:23:03,680 --> 00:23:06,760 Speaker 2: have affordable options there. And I think you are going 498 00:23:06,800 --> 00:23:10,720 Speaker 2: to see more diversification of the technology going into different vehicles, 499 00:23:10,920 --> 00:23:12,760 Speaker 2: and even now you're starting to see that. So you're 500 00:23:12,800 --> 00:23:17,080 Speaker 2: starting to see say a Volkswagen or a Ford saying actually, 501 00:23:17,080 --> 00:23:20,800 Speaker 2: our entry level vehicles and even Tesla, Tesla push pioneering 502 00:23:20,800 --> 00:23:23,800 Speaker 2: this approach among Western automakers. Our entry level vehicles are 503 00:23:23,800 --> 00:23:26,400 Speaker 2: going to use a lithium iron phosphate battery. Our higher 504 00:23:26,560 --> 00:23:28,639 Speaker 2: end ones are going to use an NMC or an 505 00:23:28,720 --> 00:23:33,119 Speaker 2: NCAA battery with higher density and higher associated cost as well. 506 00:23:33,240 --> 00:23:34,760 Speaker 2: I think it won't end there. I think you will 507 00:23:34,760 --> 00:23:36,600 Speaker 2: have some who say, no, we're just focusing on urban 508 00:23:36,680 --> 00:23:38,680 Speaker 2: vehicles and those are going to be using a sodium 509 00:23:38,720 --> 00:23:40,159 Speaker 2: ion battery and it's going to be ultra cheap and 510 00:23:40,240 --> 00:23:42,560 Speaker 2: ultra affordable, but still very safe. And I think that 511 00:23:43,240 --> 00:23:45,080 Speaker 2: is a significant difference from where we were a few 512 00:23:45,119 --> 00:23:46,480 Speaker 2: years ago and is a big. 513 00:23:46,359 --> 00:23:48,439 Speaker 1: Change now we can't seem to make it through an 514 00:23:48,480 --> 00:23:51,199 Speaker 1: episode here these days without talking about supply chains. So 515 00:23:51,640 --> 00:23:54,960 Speaker 1: let's go there. Because supply chains globally are shifting, certainly 516 00:23:54,960 --> 00:23:58,320 Speaker 1: within the battery space, but how about within the auto 517 00:23:58,400 --> 00:24:01,840 Speaker 1: manufacturing space. I know, for electric vehicles, a big part 518 00:24:01,840 --> 00:24:03,840 Speaker 1: of the kit is the battery, so we can't touch 519 00:24:03,920 --> 00:24:06,640 Speaker 1: upon that. But when it comes to making that complete 520 00:24:06,720 --> 00:24:09,800 Speaker 1: vehicle that rolls off the line, whether it's for commercial 521 00:24:10,000 --> 00:24:13,800 Speaker 1: or direct individual use to get around town, are those 522 00:24:13,800 --> 00:24:16,440 Speaker 1: supply chains also dramatically changing? 523 00:24:16,760 --> 00:24:20,320 Speaker 2: Yeah, definitely. One of the consistent things in the auto 524 00:24:20,359 --> 00:24:24,520 Speaker 2: industry is that it's always changing and evolving, and you 525 00:24:24,520 --> 00:24:27,240 Speaker 2: can see that over the decades. I think automotive is 526 00:24:27,240 --> 00:24:30,080 Speaker 2: a fascinating lens to view the world through. Generally, you 527 00:24:30,160 --> 00:24:34,399 Speaker 2: have these waves of different companies and countries coming in, 528 00:24:34,600 --> 00:24:37,679 Speaker 2: so the Japanese automakers in the seventies and eighties, and 529 00:24:37,680 --> 00:24:39,760 Speaker 2: then the Koreans and the nineties and two thousands, and 530 00:24:39,920 --> 00:24:43,280 Speaker 2: now the Chinese coming in the twenty twenties. Here that 531 00:24:43,320 --> 00:24:47,000 Speaker 2: will continue to happen. Automotive supply chains are long, so 532 00:24:47,119 --> 00:24:49,000 Speaker 2: they reach a long way up. There's even in an 533 00:24:49,000 --> 00:24:51,080 Speaker 2: ev where there's less parts there's still a lot of parts, 534 00:24:51,080 --> 00:24:53,040 Speaker 2: there's a lot of material, a lot of physical material 535 00:24:53,080 --> 00:24:55,280 Speaker 2: that goes into making a car, and so they are 536 00:24:55,400 --> 00:24:59,800 Speaker 2: also subject to trade challenges. Right, generally they've been able 537 00:24:59,840 --> 00:25:02,879 Speaker 2: to operate without too many restrictions and a lot of 538 00:25:02,880 --> 00:25:06,000 Speaker 2: countries have benefited from relatively free trade on automotive but 539 00:25:06,200 --> 00:25:08,720 Speaker 2: that period may be ending a little bit. We start 540 00:25:08,760 --> 00:25:11,480 Speaker 2: to see more and more tensions around this topic. Other 541 00:25:11,720 --> 00:25:15,800 Speaker 2: policies that are aimed at really explicitly supporting domestic manufacturing. 542 00:25:15,840 --> 00:25:18,359 Speaker 2: So the Inflation Reduction Act in the US China have 543 00:25:18,440 --> 00:25:21,320 Speaker 2: of course been supporting domestic manufacturing of vehicles and batteries 544 00:25:21,359 --> 00:25:24,320 Speaker 2: for quite a long time. Europe now responding to Inflation 545 00:25:24,359 --> 00:25:27,159 Speaker 2: Reduction Act. So this play by play of where are 546 00:25:27,160 --> 00:25:28,840 Speaker 2: the job's going to be and where are the vehicle's 547 00:25:28,880 --> 00:25:30,600 Speaker 2: going to be made and where the battery is going 548 00:25:30,600 --> 00:25:32,800 Speaker 2: to make it's going to continue. We're not at anything 549 00:25:32,840 --> 00:25:35,440 Speaker 2: resembling a steady state on that yet. One thing I 550 00:25:35,480 --> 00:25:37,359 Speaker 2: will say though, is that in the long term, you 551 00:25:37,440 --> 00:25:40,600 Speaker 2: do want to generally make vehicles near the market where 552 00:25:40,600 --> 00:25:43,480 Speaker 2: they're being consumed or used, I should say, and similar 553 00:25:43,520 --> 00:25:46,760 Speaker 2: for batteries. Now right now you're seeing some interesting dynamics 554 00:25:46,760 --> 00:25:49,240 Speaker 2: where a lot of companies are making evs in China 555 00:25:49,359 --> 00:25:52,320 Speaker 2: and shipping them to Europe. I think that holds at 556 00:25:52,520 --> 00:25:54,480 Speaker 2: some reasonable volume and for a little while, but I 557 00:25:54,480 --> 00:25:56,840 Speaker 2: think in the long term it is more desirable to 558 00:25:56,880 --> 00:25:59,920 Speaker 2: have the vehicles made relatively near where they're being consumed. Now, 559 00:26:00,000 --> 00:26:02,240 Speaker 2: there's always going to be exceptions to that, but if 560 00:26:02,280 --> 00:26:04,680 Speaker 2: you look at the orientation of vehicle markets over the 561 00:26:04,760 --> 00:26:07,120 Speaker 2: last twenty years, that is still the case. So, Yes, 562 00:26:07,160 --> 00:26:09,680 Speaker 2: there are lots of Japanese vehicles sold in the US, 563 00:26:09,720 --> 00:26:12,040 Speaker 2: but most of them are made in US plants. Yes, 564 00:26:12,080 --> 00:26:14,800 Speaker 2: there are some vehicles shipped from Germany to China or 565 00:26:14,800 --> 00:26:16,320 Speaker 2: the US, but there's also a lot of those made 566 00:26:16,320 --> 00:26:19,080 Speaker 2: domestically in those countries as well. So it's going to 567 00:26:19,119 --> 00:26:21,040 Speaker 2: continue to be a dance. There is going to be 568 00:26:21,080 --> 00:26:23,119 Speaker 2: a fair bit of localization. I think it is going 569 00:26:23,200 --> 00:26:25,920 Speaker 2: to continue to be a bit of a political hot 570 00:26:25,960 --> 00:26:30,640 Speaker 2: potato around how you incentivize domestic jobs and domestic manufacturing. 571 00:26:30,920 --> 00:26:33,040 Speaker 2: I think this year it caught us by surprise a bit, 572 00:26:33,040 --> 00:26:34,639 Speaker 2: the Inflation Reduction Act, and I think it caught a 573 00:26:34,680 --> 00:26:37,399 Speaker 2: lot of people by surprise, even within the industry, just 574 00:26:37,600 --> 00:26:40,120 Speaker 2: how big a push that was going to be on 575 00:26:40,200 --> 00:26:43,760 Speaker 2: shore the US vehicle and battery manufacturing supply chain, and 576 00:26:43,800 --> 00:26:46,200 Speaker 2: that is happening. It's happening really quickly. There are tens 577 00:26:46,240 --> 00:26:49,320 Speaker 2: of billions of dollars announced since Iro's announced in North 578 00:26:49,359 --> 00:26:53,120 Speaker 2: American battery and component manufacturing, and so I sometimes hear 579 00:26:53,440 --> 00:26:55,640 Speaker 2: this view that like, oh, this has done, China won 580 00:26:56,240 --> 00:26:59,320 Speaker 2: this race. I think we're still in the early going 581 00:26:59,400 --> 00:27:01,239 Speaker 2: of this. I said only the end of the last year, 582 00:27:01,280 --> 00:27:02,800 Speaker 2: only two percent of all the vehicles on the road 583 00:27:02,840 --> 00:27:05,640 Speaker 2: we're electric. There's a lot of rooms still for countries 584 00:27:05,640 --> 00:27:09,080 Speaker 2: to carve out new industrial policy clusters and build new 585 00:27:09,200 --> 00:27:11,439 Speaker 2: base of jobs and innovation. So I think we're going 586 00:27:11,480 --> 00:27:13,520 Speaker 2: to continue to see a fair bit of maneuvering there. 587 00:27:13,800 --> 00:27:16,359 Speaker 2: I hope it doesn't end up too fragmented, because I 588 00:27:16,359 --> 00:27:18,440 Speaker 2: think that will slow down the transition at a time 589 00:27:18,440 --> 00:27:20,240 Speaker 2: when we want to be speeding it up. But I 590 00:27:20,280 --> 00:27:21,760 Speaker 2: think that's a very real possibility. 591 00:27:21,920 --> 00:27:23,800 Speaker 1: So now it's going to be impossible to go through 592 00:27:23,800 --> 00:27:26,280 Speaker 1: everything in this report, and I feel like we pulled 593 00:27:26,280 --> 00:27:29,240 Speaker 1: out some interesting themes, and certainly there is also the 594 00:27:29,280 --> 00:27:31,520 Speaker 1: meat of these forecasts. But I want to pivot now 595 00:27:31,680 --> 00:27:34,080 Speaker 1: to something that I've started doing at the end of 596 00:27:34,080 --> 00:27:35,880 Speaker 1: most of the shows now, which is trying to find 597 00:27:35,880 --> 00:27:38,800 Speaker 1: out what our lead analysts are looking at, what they're watching, 598 00:27:38,960 --> 00:27:42,439 Speaker 1: and what they're ignoring. Maybe in the category broadly of 599 00:27:42,680 --> 00:27:45,760 Speaker 1: weird and wonderful tech, so not covered in this report, 600 00:27:46,119 --> 00:27:49,280 Speaker 1: but in Collins list of things to watch and ignore. 601 00:27:49,560 --> 00:27:51,880 Speaker 1: I'm wondering about hydrogen vehicles. 602 00:27:52,119 --> 00:27:54,520 Speaker 2: Yeah, and that's a good question. I get asked this 603 00:27:54,640 --> 00:27:57,080 Speaker 2: question a lot. I'm still not really clear always why 604 00:27:57,080 --> 00:27:59,520 Speaker 2: I get asked it a lot, because the picture hasn't 605 00:27:59,520 --> 00:28:01,760 Speaker 2: actually changed very much. So this year we actually took 606 00:28:01,840 --> 00:28:04,920 Speaker 2: hydrogen vehicles out of the passenger vehicle forecast. And I'll 607 00:28:04,920 --> 00:28:07,560 Speaker 2: give you a bit of background of why hydroden vehicles 608 00:28:07,560 --> 00:28:10,320 Speaker 2: sales vehicles. Hydroden fuel cell vehicles, I should say, have 609 00:28:10,359 --> 00:28:12,600 Speaker 2: been around for quite a long time. The first discussions 610 00:28:12,600 --> 00:28:16,240 Speaker 2: of them go back decades, and really they have not 611 00:28:16,400 --> 00:28:19,280 Speaker 2: delivered on any of the promise that has been discussed 612 00:28:19,280 --> 00:28:22,080 Speaker 2: over the years. And last year sales of them fell 613 00:28:22,200 --> 00:28:24,359 Speaker 2: from twenty twenty one, so they were down. And not 614 00:28:24,440 --> 00:28:27,800 Speaker 2: only were they down, we saw a few automakers sort 615 00:28:27,800 --> 00:28:30,199 Speaker 2: of reduced their commitment, and we also saw more and 616 00:28:30,200 --> 00:28:32,800 Speaker 2: more of the sales concentrated in the passenger vehicle segment 617 00:28:32,840 --> 00:28:35,560 Speaker 2: in South Korea, So it's about seventy percent of passenger 618 00:28:35,680 --> 00:28:38,040 Speaker 2: fuel cell vehicles were in South Korea. About fifteen thousandth 619 00:28:38,080 --> 00:28:40,520 Speaker 2: sold last year. It's not very many. It's a very 620 00:28:40,640 --> 00:28:43,160 Speaker 2: very small market. It's concentrated in a few models, a 621 00:28:43,160 --> 00:28:46,200 Speaker 2: few automakers, and a very small number of geographies. The 622 00:28:46,280 --> 00:28:49,800 Speaker 2: few refueling infrastructure part is still a major major challenge. 623 00:28:49,800 --> 00:28:52,760 Speaker 2: We've seen supply issues at the hydrogen fueling stations that 624 00:28:52,800 --> 00:28:55,160 Speaker 2: are there a lot of them offline at any given time, 625 00:28:55,200 --> 00:28:57,400 Speaker 2: and some of them just plane removed. For example, in 626 00:28:57,440 --> 00:28:59,280 Speaker 2: the UK, Shell pulled a few out because they weren't 627 00:28:59,280 --> 00:29:02,400 Speaker 2: being used enough. So it's expensive and it's just not 628 00:29:02,920 --> 00:29:05,440 Speaker 2: really what consumers seem to want. In the places even 629 00:29:05,480 --> 00:29:08,640 Speaker 2: that built a fair amount refeeling infrastructure, like California, sales 630 00:29:08,680 --> 00:29:11,440 Speaker 2: are way way down. Sales have plummeted in Japan, which 631 00:29:11,480 --> 00:29:13,880 Speaker 2: has been the biggest backer of the technology. So at 632 00:29:13,920 --> 00:29:16,360 Speaker 2: some point, as forecasters, we just start to get really 633 00:29:16,400 --> 00:29:19,280 Speaker 2: uncomfortable saying I don't feel comfortable making a twenty year 634 00:29:19,320 --> 00:29:23,200 Speaker 2: forecast for something that is so concentrated and falling last year, 635 00:29:23,520 --> 00:29:25,560 Speaker 2: so we just sort of said, look, we're taking it out. 636 00:29:25,760 --> 00:29:28,920 Speaker 2: We'll revisit it when field sell vehicles reach zero point 637 00:29:29,040 --> 00:29:32,400 Speaker 2: one percent of global vehicle sales. So that's not very much. 638 00:29:32,440 --> 00:29:34,640 Speaker 2: That's not a high bar. Zero point one percent is 639 00:29:34,640 --> 00:29:37,240 Speaker 2: pretty low. That would be around eighty thousand vehicles a year. 640 00:29:37,400 --> 00:29:39,520 Speaker 2: Maybe they get there. Will happily revisit it when they do, 641 00:29:39,680 --> 00:29:42,080 Speaker 2: but they're not there now, and it's very uncomfortable for 642 00:29:42,080 --> 00:29:43,720 Speaker 2: people who rely on data to try and make a 643 00:29:43,760 --> 00:29:46,600 Speaker 2: long term forecast. Trucking. They still play a role in 644 00:29:46,640 --> 00:29:50,280 Speaker 2: our zero scenario, but they're sort of backfilling where batteries 645 00:29:50,320 --> 00:29:53,400 Speaker 2: don't work rather than the main solution. So I think 646 00:29:53,440 --> 00:29:56,040 Speaker 2: another way to think about hydrogen fuel cell vehicles if 647 00:29:56,080 --> 00:29:59,760 Speaker 2: you're thinking about energy and emissions from the passenger vehicle segment, 648 00:30:00,000 --> 00:30:02,520 Speaker 2: if you were to double the size of the passenger 649 00:30:02,560 --> 00:30:04,600 Speaker 2: fuel cell vehicle fleet, So you take all the number 650 00:30:04,640 --> 00:30:06,280 Speaker 2: that have been on the road sold over the last 651 00:30:06,280 --> 00:30:08,840 Speaker 2: twenty years, and you double it every three years, so 652 00:30:09,160 --> 00:30:10,880 Speaker 2: all the way out to twenty forty. Every three years 653 00:30:10,920 --> 00:30:12,800 Speaker 2: you double the size of the fleet. That's a pretty 654 00:30:12,800 --> 00:30:15,240 Speaker 2: aggressive rate of growth considering how long it's taken to 655 00:30:15,240 --> 00:30:17,400 Speaker 2: get to where we are. If you do that, then 656 00:30:17,640 --> 00:30:19,720 Speaker 2: they will be about zero point two percent of the 657 00:30:19,800 --> 00:30:22,920 Speaker 2: vehicle fleet in twenty forty, so have no meaningful impact 658 00:30:23,000 --> 00:30:26,800 Speaker 2: on emissions or energy consumption in passenger transport. So again 659 00:30:26,840 --> 00:30:28,480 Speaker 2: you sort of look at that. If that's the upper 660 00:30:28,480 --> 00:30:31,160 Speaker 2: bound snario, that's the optimistic scenario for growth, and it 661 00:30:31,160 --> 00:30:34,200 Speaker 2: has zero impact on global CEOTO emissions in twenty forty, 662 00:30:34,240 --> 00:30:36,040 Speaker 2: then you have to sort of say, well, why are 663 00:30:36,080 --> 00:30:38,800 Speaker 2: we spending so much time talking about this? So I 664 00:30:38,840 --> 00:30:41,760 Speaker 2: think there's still a potential role to play as backfill 665 00:30:41,880 --> 00:30:44,520 Speaker 2: in the trucking segment, in heavy duty long haul in 666 00:30:44,560 --> 00:30:46,959 Speaker 2: parts that are hard to electrify. I think it's significantly 667 00:30:46,960 --> 00:30:48,960 Speaker 2: smaller than batteries and smaller than a lot of the 668 00:30:49,080 --> 00:30:51,800 Speaker 2: proponents suggest. But I really don't see, at least in 669 00:30:51,840 --> 00:30:54,200 Speaker 2: the data right now, much of an interest from consumers 670 00:30:54,200 --> 00:30:55,440 Speaker 2: in the passenger vehicle segment. 671 00:30:55,600 --> 00:30:58,680 Speaker 1: So maybe more in the weird and wonderful category. Are 672 00:30:58,720 --> 00:31:01,920 Speaker 1: you closely watching or ignoring solar cars? 673 00:31:02,280 --> 00:31:04,280 Speaker 2: Ignoring? That's for me, the ignoring camp. 674 00:31:05,960 --> 00:31:07,800 Speaker 1: So last one, you can't look at the news these 675 00:31:07,880 --> 00:31:10,760 Speaker 1: days without looking at something that has to do with AI, 676 00:31:11,040 --> 00:31:13,240 Speaker 1: and I want to know, are you closely watching or 677 00:31:13,240 --> 00:31:16,160 Speaker 1: are you sort of ignoring self driving vehicles because the 678 00:31:16,200 --> 00:31:19,000 Speaker 1: self driving space has come in and out of fashion 679 00:31:19,040 --> 00:31:19,640 Speaker 1: a few times. 680 00:31:19,800 --> 00:31:22,600 Speaker 2: Yeah, we're not ignoring it. And I would say if 681 00:31:22,600 --> 00:31:25,880 Speaker 2: you read media coverage only, you would think that self 682 00:31:25,960 --> 00:31:29,320 Speaker 2: driving cars are completely failing. And our view has always 683 00:31:29,360 --> 00:31:32,240 Speaker 2: been that it will take time. Once we're talking about 684 00:31:32,360 --> 00:31:35,479 Speaker 2: big impact. Societal impacts are more of a twenty thirties 685 00:31:35,480 --> 00:31:38,320 Speaker 2: and twenty forty story, but there is real progress being made. 686 00:31:38,360 --> 00:31:41,840 Speaker 2: There are commercial self driving car services you can take 687 00:31:41,920 --> 00:31:46,240 Speaker 2: now in San Francisco, in Beijing, and they're expanding. Yes 688 00:31:46,240 --> 00:31:49,560 Speaker 2: they're geofenced, and yes, there's all sorts of caveats to it. 689 00:31:49,600 --> 00:31:52,560 Speaker 2: But you should probably be more optimistic on the technology 690 00:31:52,600 --> 00:31:54,960 Speaker 2: now than in the past because it exists now and 691 00:31:55,000 --> 00:31:57,000 Speaker 2: it didn't when the sort of hype cycle was that 692 00:31:57,040 --> 00:31:58,960 Speaker 2: its peak. You couldn't commercially go and get in a 693 00:31:58,960 --> 00:32:00,920 Speaker 2: self driving car. You can do that now and they're 694 00:32:00,960 --> 00:32:03,320 Speaker 2: really racking up the kilometers and the China market is 695 00:32:03,360 --> 00:32:06,040 Speaker 2: moving really quickly. So I think all this stuff around 696 00:32:06,040 --> 00:32:08,080 Speaker 2: stelf driving cars gets caught up in these all or 697 00:32:08,080 --> 00:32:11,320 Speaker 2: nothing it's going to go take over one hundred percent immediately, 698 00:32:11,640 --> 00:32:14,080 Speaker 2: or it's all smoking mirrors and nothing's going to happen. 699 00:32:14,320 --> 00:32:16,640 Speaker 2: I think you're going to see this stuff slowly and 700 00:32:16,680 --> 00:32:21,160 Speaker 2: steadily expand more geofenced areas. But it is real, and 701 00:32:21,480 --> 00:32:23,320 Speaker 2: so one of the things we did this year is 702 00:32:23,560 --> 00:32:27,360 Speaker 2: run two scenarios to say, look, what does happen if 703 00:32:27,440 --> 00:32:30,560 Speaker 2: this stuff really takes off? And it does potentially dramatically 704 00:32:30,560 --> 00:32:32,880 Speaker 2: cut down the size of the global vehicle fleet, and 705 00:32:33,160 --> 00:32:36,360 Speaker 2: it also can push you towards electrification sooner. And that's 706 00:32:36,360 --> 00:32:40,200 Speaker 2: because more of the autonomous vehicles that are being used 707 00:32:40,200 --> 00:32:41,920 Speaker 2: for testing right now are electric, and there's a lot 708 00:32:41,960 --> 00:32:44,520 Speaker 2: of reasons to think because of economics and regulation that 709 00:32:44,560 --> 00:32:46,640 Speaker 2: future ones are going to be electric as well. That 710 00:32:46,760 --> 00:32:49,000 Speaker 2: means that the kilometers can go electric faster than the 711 00:32:49,000 --> 00:32:51,200 Speaker 2: fleet can if we take how much people move around 712 00:32:51,240 --> 00:32:53,880 Speaker 2: and assign it to different drive trains, so it can 713 00:32:53,920 --> 00:32:55,880 Speaker 2: both lower the size of the vehicle fleet and push 714 00:32:55,920 --> 00:32:58,520 Speaker 2: it towards electric faster. Of course, there's still the nightmare 715 00:32:58,560 --> 00:33:00,800 Speaker 2: scenario where there's a big bound in the amount of 716 00:33:00,840 --> 00:33:03,280 Speaker 2: vehicle use because of the self driving cars. We didn't 717 00:33:03,280 --> 00:33:05,560 Speaker 2: really dive into that in this time, but in general, 718 00:33:05,600 --> 00:33:07,280 Speaker 2: I think it's not something you should ignore. I think 719 00:33:07,320 --> 00:33:09,719 Speaker 2: it's something you should recognize that we don't know and 720 00:33:09,800 --> 00:33:13,560 Speaker 2: do sensitivity on scenario analysis accordingly. So I think it's 721 00:33:13,600 --> 00:33:15,240 Speaker 2: definitely still something to watch, and I actually think you're 722 00:33:15,240 --> 00:33:16,840 Speaker 2: going to hear quite a bit more about it in 723 00:33:16,880 --> 00:33:18,920 Speaker 2: twenty twenty four and twenty twenty five, as some of 724 00:33:18,960 --> 00:33:20,600 Speaker 2: these services start to scale up further. 725 00:33:30,280 --> 00:33:33,640 Speaker 1: Bloomberg NF is a service provided by Bloomberg Finance LP 726 00:33:33,800 --> 00:33:37,200 Speaker 1: and its affiliates. This recording does not constitute, nor should 727 00:33:37,200 --> 00:33:41,240 Speaker 1: it be construed as investment advice, investment recommendations, or a 728 00:33:41,320 --> 00:33:44,840 Speaker 1: recommendation as to an investment or other strategy. Bloomberg an 729 00:33:44,880 --> 00:33:48,400 Speaker 1: EF should not be considered as information sufficient upon which 730 00:33:48,440 --> 00:33:52,080 Speaker 1: to base an investment decision. Neither Bloomberg Finance LP nor 731 00:33:52,120 --> 00:33:55,600 Speaker 1: any of its affiliates makes any representation or warranty as 732 00:33:55,640 --> 00:33:58,480 Speaker 1: to the accuracy or completeness of the information contained in 733 00:33:58,520 --> 00:34:01,600 Speaker 1: this recording, and any viability as a result of this 734 00:34:01,720 --> 00:34:03,440 Speaker 1: recording is expressly disclaimed.