WEBVTT - Electric Vehicle Outlook 2023: On the Road to Net Zero 0:00:00.120 --> 0:00:02.760 This is Dana Perkins and you're listening to Switch on 0:00:02.960 --> 0:00:06.720 the BNF podcast. Earlier in June, BNAF released the twenty 0:00:06.760 --> 0:00:10.200 twenty three edition of the Electric Vehicle Outlook, or EVO 0:00:10.280 --> 0:00:13.119 for short. It's one of our flagship publications where we 0:00:13.160 --> 0:00:17.960 take a detailed look at how electrification, shared mobility, autonomous driving, 0:00:18.079 --> 0:00:21.319 and other factors are going to impact road transport in 0:00:21.360 --> 0:00:25.080 the coming decades. The report is written by our extensive 0:00:25.120 --> 0:00:28.120 team of specialists from around the world. They can look 0:00:28.160 --> 0:00:31.080 at scenarios for how these trends are going to impact 0:00:31.120 --> 0:00:35.760 the automotive, energy, infrastructure, and battery materials markets. So we 0:00:35.840 --> 0:00:38.400 want to know what's changed since twenty twenty two and 0:00:38.440 --> 0:00:41.320 set it against net zero targets and also talk about 0:00:41.360 --> 0:00:44.320 which areas of the electric vehicle fleet are succeeding and 0:00:44.360 --> 0:00:47.040 which might be lagging. In today's episode, I get to 0:00:47.040 --> 0:00:50.159 speak with benef's head of Advanced Transport, Colin Mcharricer, and 0:00:50.240 --> 0:00:53.880 together we go through consumer demand for electric vehicles across 0:00:53.920 --> 0:00:57.240 different global regions, along with the current mid and long 0:00:57.360 --> 0:01:00.480 term sales forecasts. We also discussed the chin challenge is 0:01:00.480 --> 0:01:04.240 facing medium to heavy commercial fleets and the evolution of 0:01:04.280 --> 0:01:07.000 battery chemistries and the new battery tech that is now 0:01:07.040 --> 0:01:10.160 starting to reach the commercial market. Now, of course this 0:01:10.280 --> 0:01:13.000 is just a snapshot into what is an extensive report, 0:01:13.240 --> 0:01:14.800 but we've pulled out a few nuggets for you and 0:01:14.840 --> 0:01:16.959 hopefully you enjoy. And if you do like it and 0:01:17.000 --> 0:01:19.400 you want to hear more podcasts from us, make sure 0:01:19.480 --> 0:01:22.800 to subscribe to receive updates on future episodes. And also 0:01:23.000 --> 0:01:24.839 if you want to share it with others, the best 0:01:24.840 --> 0:01:26.360 way to do that is to give us a rating 0:01:26.480 --> 0:01:30.039 on Apple Podcasts or Spotify. Now my conversation with Colin 0:01:30.280 --> 0:01:44.440 about the twenty twenty three Electric Vehicle Outlook from vna Hi, Colin, 0:01:44.520 --> 0:01:46.800 thank you for joining us again today. 0:01:47.040 --> 0:01:48.600 Hid integrate to be on the program again. 0:01:48.880 --> 0:01:51.320 So we're here to talk about this year's edition. So 0:01:51.360 --> 0:01:54.840 the twenty twenty three Electric Vehicle Outlook. So we do 0:01:54.960 --> 0:01:57.639 one of these every year, which is a herculean effort. 0:01:57.640 --> 0:02:00.600 And I know there are numerous members both in your 0:02:00.600 --> 0:02:03.440 team and in other parts of VNF that all contribute 0:02:03.480 --> 0:02:06.320 to making this report happen. And so for those who 0:02:06.320 --> 0:02:08.600 maybe are not familiar with the report, or maybe didn't 0:02:08.639 --> 0:02:10.720 listen to our show last year where we went over 0:02:10.760 --> 0:02:13.000 some of the findings, which a few things have changed 0:02:13.040 --> 0:02:15.480 between then and now. Can you just give a very 0:02:15.560 --> 0:02:18.800 quick overview of what this is and perhaps isn't. 0:02:18.960 --> 0:02:21.880 Yeah, definitely. So the Electric Vehicle Outlook is our outlook 0:02:21.919 --> 0:02:25.079 at BNF for all of road transport. So despite the name, 0:02:25.120 --> 0:02:28.240 it's not only about electric vehicles, it's about everything that's 0:02:28.320 --> 0:02:31.000 going on with the vehicles on the road in the world. 0:02:31.120 --> 0:02:35.400 And it also bears mentioning that that isn't just passenger cars. 0:02:35.720 --> 0:02:39.200 So we immediately think of cars, but of course there's 0:02:39.280 --> 0:02:40.920 vans and trucks that are moving around all the goods 0:02:40.919 --> 0:02:43.079 around the world. In some markets, two and three wheelers 0:02:43.080 --> 0:02:45.639 are a big part of the mobility mix. There's municipal 0:02:45.639 --> 0:02:47.799 buses as well. And what you find as you dig 0:02:47.840 --> 0:02:50.400 into these is that not only is each country different, 0:02:50.720 --> 0:02:53.720 but each segment is on its own sort of different trajectory. 0:02:54.200 --> 0:02:56.920 So when we do this exercise, what we're trying to 0:02:56.919 --> 0:02:59.000 figure out is what's happening, and again not just with 0:02:59.080 --> 0:03:02.080 electric vehicles, with combustion vehicles and with other aspects of 0:03:02.080 --> 0:03:04.960 the road transport mix around the world and across all 0:03:05.000 --> 0:03:07.400 these different segments. So we sort of start with what 0:03:07.440 --> 0:03:10.160 does the world look like today, and that is saying 0:03:10.600 --> 0:03:13.799 literally how much do people move around in each country 0:03:14.080 --> 0:03:16.240 and how much do goods move around? So in people 0:03:16.280 --> 0:03:18.880 you're talking about something like a passenger kilometer, or in 0:03:18.960 --> 0:03:21.320 freight you're talking a freight ton kilometer, and then we 0:03:21.360 --> 0:03:24.320 look at how those might change over time. So that's 0:03:24.360 --> 0:03:26.760 where the things around, Okay, the adoption of electric vehicles 0:03:26.760 --> 0:03:29.000 comes in. That's where things like shared mobility. That's where 0:03:29.000 --> 0:03:33.399 things like autonomous driving, changes in consumer behavior, demographic changes, 0:03:33.720 --> 0:03:36.840 urbanization changes, and all of these things come together to 0:03:36.920 --> 0:03:39.880 form our outlook for what happens for road transport. And 0:03:39.920 --> 0:03:42.160 then once we've got that outlook together about where we 0:03:42.200 --> 0:03:45.000 think each segment and country is going, we then map 0:03:45.040 --> 0:03:47.320 that onto on all these other areas, and those are 0:03:47.360 --> 0:03:52.040 things like electricity demand, battery metals and materials, CO two emissions, 0:03:52.320 --> 0:03:56.160 oil demand, infrastructure needs, and of course vehicle sales as well. 0:03:56.560 --> 0:03:59.560 So that was for the people who are not necessarily 0:04:00.040 --> 0:04:01.960 avid followers of this one year to the next, but 0:04:02.040 --> 0:04:05.400 for those who are, there were some new sections this year, 0:04:05.520 --> 0:04:09.560 and within that we added a section on Nordic's in California. 0:04:09.680 --> 0:04:12.480 Can you explain why those sections were added and then 0:04:12.560 --> 0:04:14.240 let's come to some of the other things that maybe 0:04:14.280 --> 0:04:17.080 are newer updates for your loyal followers who have been 0:04:17.080 --> 0:04:19.760 waiting for this year's installment of the electric vehicle outlook. 0:04:20.040 --> 0:04:22.360 Yeah, so the Nordics in California. Every year we get 0:04:22.360 --> 0:04:24.039 asked for by quite a few of our clients to 0:04:24.040 --> 0:04:26.200 add different countries. And each time you add a country, 0:04:26.240 --> 0:04:27.479 it's quite a bit of work because you have to 0:04:27.480 --> 0:04:29.680 go and dig up all of the data about the 0:04:29.680 --> 0:04:32.679 mobility mix in that country and all the other factors 0:04:32.680 --> 0:04:34.760 that I mentioned about what might change that in the future. 0:04:34.839 --> 0:04:36.359 So we try and limit it to adding kind of 0:04:36.360 --> 0:04:38.560 one or two each year. And what we wanted to 0:04:38.560 --> 0:04:40.960 do this year is to show what does the transition 0:04:41.000 --> 0:04:43.919 look like in some leading areas. So California is of 0:04:43.920 --> 0:04:47.000 course leading the US, but as also a leader globally, 0:04:47.160 --> 0:04:49.760 the Nordics is probably the furthest along this transition of 0:04:49.800 --> 0:04:52.760 any group of countries or states. I'm sitting in Oslo 0:04:52.839 --> 0:04:55.280 and Norway right now. Over eighty percent of vehicle sales 0:04:55.279 --> 0:04:58.400 are fully electric. Markets like Sweden, Finland others are not 0:04:58.440 --> 0:05:00.560 too far behind. So what we I wanted to do 0:05:00.680 --> 0:05:04.240 was play out some of the emissions and energy market 0:05:04.240 --> 0:05:07.440 impacts and fleet turnover impacts in countries and regions where 0:05:07.480 --> 0:05:10.039 electricic flood option is going quite quickly, So that was 0:05:10.040 --> 0:05:12.560 the logic behind adding those. Last year we added a 0:05:12.560 --> 0:05:14.679 lot of detail on Southeast Asia because we were seeing 0:05:14.680 --> 0:05:17.719 really interesting things happening there. Next year we'll probably add 0:05:17.760 --> 0:05:21.640 another big emerging economy, so somewhere potentially like Brazil or Mexico, 0:05:21.880 --> 0:05:24.640 where again the mix some mobilities different and the timelines 0:05:24.640 --> 0:05:26.240 are different for all of the things that we're seeing 0:05:26.279 --> 0:05:27.080 happen around the world. 0:05:27.360 --> 0:05:29.000 So a bit of a case study and something that 0:05:29.040 --> 0:05:30.640 you could in theory extrapolate out. 0:05:30.800 --> 0:05:33.440 Yeah, exactly what we want to have is indicative countries 0:05:33.520 --> 0:05:35.880 or regions that people can understand. So we now cover 0:05:36.000 --> 0:05:38.159 fourteen major auto markets around the world. 0:05:38.480 --> 0:05:41.080 So there are a lot of different sections in our 0:05:41.120 --> 0:05:44.520 research on the vehicle outlook. Which section matters the most? 0:05:44.880 --> 0:05:47.440 Obviously they all matter, and it's hard to pick your 0:05:47.440 --> 0:05:49.680 favorite child, but in this you know what is weighted 0:05:49.720 --> 0:05:53.240 most heavily. When you think about things like batteries, battery chemistry, 0:05:53.480 --> 0:05:57.640 or supply chains or charging networks or consumer trends, which 0:05:57.640 --> 0:06:01.359 one would you say is probably the most influential part 0:06:01.480 --> 0:06:05.760 of actually determining what these long term forecasts really look like. 0:06:05.960 --> 0:06:08.400 Yeah, I mean the starting point for BNF has been 0:06:08.480 --> 0:06:12.000 for a long time that batteries are really what's enabling 0:06:12.080 --> 0:06:15.320 this change. And you can take the view that well, 0:06:15.360 --> 0:06:18.000 governments could just force the issue and push every all 0:06:18.040 --> 0:06:21.680 the markets over into electric with enough taxation or subsidies, 0:06:21.720 --> 0:06:24.080 but that gets politically difficult in a lot of countries 0:06:24.080 --> 0:06:28.320 if the underlying technology isn't continuing to get cheaper and better. Fortunately, 0:06:28.360 --> 0:06:31.160 the technology is continuing to get better. It actually got 0:06:31.240 --> 0:06:33.880 more expensive last year due to spike and raw material prices, 0:06:33.880 --> 0:06:35.200 So we go into that a lot and look at 0:06:35.240 --> 0:06:37.640 what's happening there. But I would say the starting point 0:06:37.800 --> 0:06:40.480 is still really in terms of what's going to change 0:06:40.480 --> 0:06:43.160 when we talk about electric vehicles anyway, is certainly the 0:06:43.160 --> 0:06:45.680 battery side. So one of the things we did this year, 0:06:45.720 --> 0:06:48.040 for example, is say, look, battery prices went out slightly 0:06:48.160 --> 0:06:51.000 last year, what do we think happens and what's some 0:06:51.080 --> 0:06:53.920 scenario analysis for when you get to in the passenger 0:06:54.000 --> 0:06:57.279 vehicle segment price parity with combustion vehicles based on different 0:06:57.320 --> 0:07:00.760 battery experienced curves or learning rates that we saw them 0:07:00.760 --> 0:07:02.719 go up for the first time last year. So again 0:07:02.880 --> 0:07:06.719 looking at the underlying technology, battery chemistry mix, and price outlook, 0:07:06.920 --> 0:07:09.440 it still forms the basis for us being able to 0:07:09.440 --> 0:07:11.960 say with some confidence that things are going to continue 0:07:11.960 --> 0:07:15.840 to accelerate quickly on ev adoption. And so again you 0:07:15.880 --> 0:07:18.120 said it, Yeah, I don't want to pick a favorite child, 0:07:18.280 --> 0:07:21.040 but I would say that's probably the most foundational part 0:07:21.040 --> 0:07:23.160 of the work that we're doing. Now. We also do 0:07:23.240 --> 0:07:26.040 this net zero scenario. So the base scenario in the 0:07:26.080 --> 0:07:29.800 report is this economic transition scenario, which says, look, this 0:07:29.880 --> 0:07:33.120 is led by techno economic forces and that's the primary 0:07:33.160 --> 0:07:35.840 thing that drives changes in the vehicle markets around the world. 0:07:35.920 --> 0:07:38.200 And we assume that no new policies are in place, 0:07:38.360 --> 0:07:41.480 and again that's where the battery cost stuff really becomes critical. 0:07:41.680 --> 0:07:43.760 But we also run a net zero scenario, which is 0:07:43.800 --> 0:07:46.320 more of a backcasting exercise that says, if we want 0:07:46.360 --> 0:07:48.560 to get to a net zero capable fleet by twenty fifty, 0:07:48.640 --> 0:07:51.440 what has to happen. That's less reliant on the battery 0:07:51.480 --> 0:07:54.160 price part, because you're sort of saying, well, if you 0:07:54.280 --> 0:07:56.640 believe we can get on track, here's where it would 0:07:56.640 --> 0:07:59.240 have to go, and here's the policy recommendations to keep 0:07:59.240 --> 0:08:01.040 it on track. Obviously, that's a bit of a different 0:08:01.040 --> 0:08:03.760 exercise than sort of what's the trajectory we're on today. 0:08:03.680 --> 0:08:06.520 But the punchline ultimately being that it is possible. A 0:08:06.640 --> 0:08:10.080 net zero future is possible with enough will. 0:08:10.440 --> 0:08:12.480 Yeah, definitely. And I mean one of the things we 0:08:12.560 --> 0:08:14.840 sort of show is that some countries are actually getting 0:08:14.960 --> 0:08:16.920 kind of close, and some segments are getting kind of 0:08:16.920 --> 0:08:19.520 close to the net zero scenario. So when we break 0:08:19.560 --> 0:08:23.360 out two wheelers, three wheelers, buses, those segments are actually 0:08:23.440 --> 0:08:26.320 pretty close. Three wheelers is pretty much on track, two 0:08:26.360 --> 0:08:29.440 wheelers and buses are pretty close, and then you get 0:08:29.440 --> 0:08:33.160 into light duty vans and commercial vehicles and passenger vehicles, 0:08:33.200 --> 0:08:36.120 and there's a lot of variation by country, but again 0:08:36.120 --> 0:08:38.360 you're starting to get some countries that are looking like 0:08:38.400 --> 0:08:40.760 they're going to be able to phase out combustion vehicle 0:08:40.800 --> 0:08:44.120 sales at least very close to by the early to 0:08:44.160 --> 0:08:47.080 mid twenty thirties. And that's roughly what you need to 0:08:47.080 --> 0:08:49.720 stay on track for a carbon neutral capable fleet by 0:08:49.720 --> 0:08:53.240 twenty fifty. Now, it's worth noting that twenty fifty carbon 0:08:53.240 --> 0:08:55.880 neutral capable fleet you also have to have a lot 0:08:55.880 --> 0:08:58.120 of stuff going on in the power system to decarbonize 0:08:58.120 --> 0:09:00.680 the power system to enable that fleet to actually operate 0:09:00.720 --> 0:09:03.000 in a zero emissions way. And so that's a separate 0:09:03.000 --> 0:09:05.240 part of bnef's work, the New Energy Outlook. But what 0:09:05.280 --> 0:09:07.760 we're doing here is looking at can the fleet of 0:09:07.840 --> 0:09:11.319 vehicles on the road operate without producing CO two emissions. 0:09:11.600 --> 0:09:13.920 So there's a lot of money at stake. This is 0:09:14.040 --> 0:09:17.640 definitely a big industry and when we look at consumer demand, 0:09:17.880 --> 0:09:22.280 electric vehicle sales are increasing. Where are they I guess 0:09:22.720 --> 0:09:26.600 now in terms of sales and where do we expect 0:09:26.640 --> 0:09:28.920 them to be in the future, you know, twenty thirty 0:09:28.960 --> 0:09:30.960 all the way out to twenty fifty, both in terms 0:09:31.040 --> 0:09:33.920 of percentage of total vehicles sold, but also in terms 0:09:34.000 --> 0:09:36.600 of how much money is there actually flooding into this 0:09:36.720 --> 0:09:38.160 specific part of the market. 0:09:38.320 --> 0:09:41.640 Yeah, let's start with the near term picture. So last 0:09:41.720 --> 0:09:44.720 year there was about ten point five million plug in 0:09:44.800 --> 0:09:47.480 vehicle sold, so that's battery electrics and plug in hybrids. 0:09:47.720 --> 0:09:49.319 This year, we think there's going to be about fourteen 0:09:49.320 --> 0:09:51.440 million sold a little higher than that. Actually, we're trending 0:09:51.440 --> 0:09:54.240 a little bit above that, and by twenty twenty six, 0:09:54.480 --> 0:09:57.280 we're forecasting about twenty seven million sales, and just to 0:09:57.320 --> 0:10:00.920 translate that into percentage terms, that's about thirty percent, so 0:10:01.000 --> 0:10:03.400 just under a third of the global vehicle market we're 0:10:03.440 --> 0:10:06.280 saying as plug in vehicles by twenty twenty six, and 0:10:06.360 --> 0:10:08.880 that's really not very far away, and that's that's coming 0:10:08.880 --> 0:10:12.520 at us quite quickly. What's important again there is that 0:10:12.559 --> 0:10:15.000 there's quite a lot of regional variations. So countries like 0:10:15.080 --> 0:10:17.559 China are probably going to be above fifty percent by then, 0:10:17.720 --> 0:10:20.559 regions like Europe above forty percent, and then there's kind 0:10:20.559 --> 0:10:23.000 of everybody else, and there's quite a big spread between 0:10:23.040 --> 0:10:25.080 the some of the other markets. So the near term 0:10:25.120 --> 0:10:29.959 picture is one of continued pretty rapid acceleration, but then 0:10:30.160 --> 0:10:33.200 a lot of variety between the different countries. And we 0:10:33.280 --> 0:10:35.600 think the fleet of passenger vehicles we're talking about here 0:10:35.720 --> 0:10:39.959 crosses one hundred million evs by twenty twenty six. Now, 0:10:40.080 --> 0:10:41.680 one of the things that kind of falls out of 0:10:41.679 --> 0:10:45.320 that is that combustion vehicle sales have already peaked. So 0:10:45.360 --> 0:10:48.800 they actually peaked in twenty seventeen, they declined in twenty 0:10:48.840 --> 0:10:51.600 eighteen and twenty nineteen, then really dropped in twenty twenty 0:10:51.679 --> 0:10:53.679 because of COVID, recovered a bit in twenty twenty one 0:10:53.720 --> 0:10:56.440 and recovering again in twenty twenty two, but all of 0:10:56.480 --> 0:10:59.679 that recovery is essentially on the electric side, and we 0:10:59.720 --> 0:11:02.640 don't really see them ever getting back to those twenty 0:11:02.679 --> 0:11:05.280 seventeen highs. You just look at what's going on in China, 0:11:05.320 --> 0:11:07.520 where the most recent month sales are, you're already at 0:11:07.520 --> 0:11:10.760 a third of sales. In Europe, you're running around twenty percent. 0:11:10.960 --> 0:11:13.560 It's just really hard to offset that anywhere else in 0:11:13.600 --> 0:11:15.800 the world to get up to the levels of combustion 0:11:15.920 --> 0:11:17.880 vehicle sales we saw in twenty seventeen. So that's kind 0:11:17.880 --> 0:11:20.280 of a near term implication is that they're already combustion 0:11:20.400 --> 0:11:22.800 vehicle sales are already twenty percent off their peak of 0:11:22.800 --> 0:11:24.720 twenty seventeen, and they're probably going to be more like 0:11:24.800 --> 0:11:26.520 forty percent off their peak by the time you get 0:11:26.520 --> 0:11:29.000 to twenty twenty six, and they're now in terminal decline. 0:11:29.120 --> 0:11:31.600 When we look at it further out, a couple of 0:11:31.600 --> 0:11:35.920 things happen. One this gap between the countries, it sticks 0:11:35.920 --> 0:11:38.800 around for a while, but then it starts to even 0:11:38.840 --> 0:11:41.079 out a little bit. It starts to get smaller as 0:11:41.240 --> 0:11:43.560 things take off in the countries that have been slower 0:11:43.559 --> 0:11:45.720 to start with. So a good example of that is 0:11:45.720 --> 0:11:48.400 somewhere like Australia. It's been quite slow so far in 0:11:48.480 --> 0:11:51.040 evy adoption, but it's now picking up quite quickly. And 0:11:51.080 --> 0:11:53.080 we've seen this in a few cases, the countries that 0:11:53.240 --> 0:11:55.600 go slower at the beginning oft and then pick up faster. 0:11:55.960 --> 0:11:58.000 And some of that is just built up demand. There's 0:11:58.040 --> 0:12:01.280 also an economic effect going on when we look at 0:12:01.320 --> 0:12:04.280 emerging economies. So the way we model this is around 0:12:04.440 --> 0:12:07.720 the price competitiveness of evs in different segments and in 0:12:07.720 --> 0:12:10.080 different countries, and one of the things you find is 0:12:10.120 --> 0:12:13.160 that emerging economies are quite price sensitive, right There's not 0:12:13.280 --> 0:12:16.079 a lot of spare money people have to spend on vehicles. 0:12:16.160 --> 0:12:17.520 I mean there is at the premium end, but in 0:12:17.559 --> 0:12:19.680 the bulk of the vehicle market in emerging economy there's 0:12:19.679 --> 0:12:22.160 not a huge amount of extra money available. That price 0:12:22.280 --> 0:12:26.559 sensitivity works against EV adoption before the point of price parity, 0:12:26.600 --> 0:12:29.160 but then it accelerates it afterwards. Once EV's become the 0:12:29.240 --> 0:12:32.320 cheaper option, then things start to go quite quickly, whereas 0:12:32.360 --> 0:12:34.600 before they were the cheapest option, things go quite slowly. 0:12:34.640 --> 0:12:37.079 So that's why you get these different curves where it's 0:12:37.160 --> 0:12:39.720 kind of slow and then really accelerating in the countries 0:12:39.720 --> 0:12:41.760 that are going slowly now and in the emerging economies 0:12:41.800 --> 0:12:43.920 and it's actually fast, and then starting to tail off 0:12:43.920 --> 0:12:45.839 in some of the wealthier countries that are in China 0:12:45.880 --> 0:12:48.080 that are going quicker right now. And the reason for 0:12:48.120 --> 0:12:51.000 that tailoff is actually just you start to saturate the market. 0:12:51.200 --> 0:12:54.280 Around the twenty thirty five period, we have markets like 0:12:54.320 --> 0:12:56.360 Europe and China really starting to slow down because you 0:12:56.400 --> 0:12:59.000 start to get to sort of seventy eighty even ninety 0:12:59.000 --> 0:13:01.840 percent of sales being electric, and that just means that 0:13:02.000 --> 0:13:03.920 we think the last sort of ten percent is going 0:13:03.960 --> 0:13:06.000 to be a bit hard to address, and so the 0:13:06.120 --> 0:13:08.720 S curve flows down there. On a global basis, again, 0:13:08.760 --> 0:13:11.400 talking about the passenger vehicle segment. Evs get to about 0:13:11.440 --> 0:13:14.320 seventy five percent of sales in twenty forty globally, and 0:13:14.360 --> 0:13:16.079 that's pure electrics. At that point we see plug in 0:13:16.160 --> 0:13:18.839 hybrids kind of disappearing. By then there are scenarios where 0:13:18.880 --> 0:13:21.000 that goes faster. Of course, the net zero scenario it's 0:13:21.080 --> 0:13:22.920 much faster. It has to be one hundred percent or 0:13:22.960 --> 0:13:24.840 almost one hundred percent by twenty thirty five of new 0:13:24.920 --> 0:13:27.360 vehicle sales to standtrack for the net zero scenario. But 0:13:27.440 --> 0:13:30.439 that's our economic transition scenario, which says no new policies. 0:13:30.559 --> 0:13:32.360 It's about seventy five percent by twenty forty. 0:13:32.679 --> 0:13:35.360 So we've talked a bit about where adoption is going 0:13:35.400 --> 0:13:37.719 really well in what's working well. But let's talk a 0:13:37.800 --> 0:13:41.440 little bit about the medium in heavy commercial vehicle space, 0:13:41.640 --> 0:13:44.840 which is lagging behind some of the other success stories 0:13:44.880 --> 0:13:48.200 like three wheelers. So what is it that's keeping medium 0:13:48.200 --> 0:13:52.040 and heavy commercial vehicles from really having the same adoption 0:13:52.200 --> 0:13:53.800 as you're seeing in other areas. 0:13:54.160 --> 0:13:57.840 Yeah, so the commercial vehicle segment is significantly behind the 0:13:57.920 --> 0:14:01.200 other vehicle segments, and there's a couple couple of reasons 0:14:01.200 --> 0:14:04.200 for that. One of them so far has really just 0:14:04.240 --> 0:14:07.960 been around available models right now, there just aren't many 0:14:08.160 --> 0:14:10.559 that you can go out and buy, and there's sort 0:14:10.559 --> 0:14:13.320 of technological reasons for that. Batteries needed to get better. 0:14:13.559 --> 0:14:16.240 We're starting to see that log jam ease a little bit, 0:14:16.400 --> 0:14:18.920 and that's we're starting to see a lot more models, 0:14:19.080 --> 0:14:23.680 particularly launching in the big markets, so China, North America, Europe, 0:14:23.680 --> 0:14:25.880 and actually so far China is leading this, but it's 0:14:25.920 --> 0:14:28.040 interesting to note that trucking might be one of the 0:14:28.040 --> 0:14:30.880 areas where the US is really going to jump forward on. 0:14:30.960 --> 0:14:32.720 It's been a bit behind those other two regions on 0:14:32.720 --> 0:14:35.080 passenger cars. But I actually think there's some really interesting 0:14:35.120 --> 0:14:37.440 stuff happening on heavy and medium trucks in the US 0:14:37.480 --> 0:14:40.000 and a lot of very interested, large corporate buyers who 0:14:40.040 --> 0:14:42.200 are going to push that forward, and some interesting starting 0:14:42.200 --> 0:14:45.200 points places like ports using these big vehicles for dray Edge, 0:14:45.240 --> 0:14:48.840 and you're seeing some really fascinating activity happening there in California. 0:14:48.920 --> 0:14:51.400 But so there's that model availability question, which is sort 0:14:51.400 --> 0:14:53.760 of being easy now you're seeing more things launch. Then 0:14:53.800 --> 0:14:56.240 there's the price part of it. These vehicles are still 0:14:56.280 --> 0:14:59.600 significantly more expensive, but we see that coming down the 0:14:59.640 --> 0:15:01.240 same way we see it coming down on the passenger 0:15:01.320 --> 0:15:03.600 vehicle side. In general. We've seen the prices of batteries 0:15:03.600 --> 0:15:05.840 going into trucks lag a couple of years what you 0:15:05.880 --> 0:15:08.240 see in passenger cars, and that's just because passenger cars 0:15:08.240 --> 0:15:10.400 are a bigger segment, the buyers have more power, and 0:15:10.400 --> 0:15:13.320 there's just lower prices negotiated there. But again that's starting 0:15:13.320 --> 0:15:15.520 to close a little bit too. The last thing that 0:15:15.880 --> 0:15:19.920 is really still there is charging heavy trucks at the 0:15:19.960 --> 0:15:22.640 highway is tough. It's a lot of power. It's a 0:15:22.720 --> 0:15:25.800 huge demand on the grid in many cases in places 0:15:25.840 --> 0:15:28.720 where there isn't a very thick grid connection, if you will, 0:15:28.920 --> 0:15:32.240 and that's a challenge. Now, it's not a challenge for everybody. 0:15:32.320 --> 0:15:34.840 There is a fair amount of depot charging that can 0:15:34.880 --> 0:15:38.400 go on and predictable routes and relatively slow charging overnight 0:15:38.440 --> 0:15:41.360 because most of those vehicles stop overnight, but that really 0:15:41.400 --> 0:15:44.480 heavy duty, long haul trucking, there is a big charging 0:15:44.480 --> 0:15:47.880 infrastructure need there now. The good thing is we're also 0:15:47.920 --> 0:15:50.200 seeing a lot of money starting to flow towards that 0:15:50.360 --> 0:15:54.000 and a lot more truck focused charging stations start to 0:15:54.000 --> 0:15:56.200 be built. But it's kind of early days, and so 0:15:56.760 --> 0:15:59.680 the EV share of the medium and heavy commercial vehicle 0:15:59.680 --> 0:16:02.440 fleet last year was only zero point one percent, so 0:16:02.680 --> 0:16:04.480 we're at the very very beginning of that. So for 0:16:04.520 --> 0:16:07.000 passenger vehicles it's about two percent of the fleet last year, 0:16:07.200 --> 0:16:09.200 for some of the other ones it's much higher. Commercial 0:16:09.280 --> 0:16:12.120 and heavy vehicles about zero point one percent of the fleet. 0:16:12.200 --> 0:16:14.760 But we saw again just kind of when you're looking 0:16:14.800 --> 0:16:17.200 at these segments where it's early, you're trying to scan 0:16:17.280 --> 0:16:18.880 the horizon of it and see what's happening, and you 0:16:18.960 --> 0:16:22.160 start to see some interesting success stories. So China is 0:16:22.200 --> 0:16:24.200 doing a lot on this. You're in Towards the end 0:16:24.200 --> 0:16:26.840 of last year, there were a few months where medium 0:16:26.920 --> 0:16:30.000 and heavy zero missions vehicles so that includes some fuel 0:16:30.000 --> 0:16:32.680 cell vehicles hit around five percent of medium and heavy 0:16:32.680 --> 0:16:35.360 truck sales in China. On the light commercial vehicle front 0:16:35.400 --> 0:16:38.360 South Korea, about twenty five percent of light commercial vehicle 0:16:38.400 --> 0:16:40.880 sales in South Korea are already electric, so you're starting 0:16:40.880 --> 0:16:43.000 to see more of that stuff happen, but it is 0:16:43.080 --> 0:16:46.160 early days. And I think that charging infrastructure part is 0:16:46.200 --> 0:16:48.880 both a real opportunity and a real challenge. 0:16:48.920 --> 0:16:51.480 And can we describe what a day in life really 0:16:51.520 --> 0:16:53.680 looks like for someone who is driving one of those 0:16:53.680 --> 0:16:56.760 commercial vehicles, because my understanding is that they're driving long 0:16:56.800 --> 0:16:59.560 distances and have really long hours. And to your point 0:16:59.600 --> 0:17:02.600 regarding charging overnight, that makes sense when you're on the road, 0:17:02.600 --> 0:17:05.199 but can you even make it to overnight? Do you 0:17:05.280 --> 0:17:07.760 have the range and the power? And if not, how 0:17:07.800 --> 0:17:10.480 long is your lunch break essentially that you will need 0:17:10.520 --> 0:17:12.399 to take in order to recharge in order to be 0:17:12.440 --> 0:17:14.560 able to make that route. And I guess if I 0:17:14.600 --> 0:17:17.960 really had to boil it down, what's the range and 0:17:18.160 --> 0:17:22.520 what's the recharge time for a let's say heavy duty 0:17:22.720 --> 0:17:25.600 semi style vehicle or a lory as they would call 0:17:25.640 --> 0:17:26.360 the mayor in the UK. 0:17:26.800 --> 0:17:28.560 Yeah, this is another one that varies a fair bit 0:17:28.560 --> 0:17:31.120 because there's actually different regulations in different countries on how 0:17:31.160 --> 0:17:33.080 long drivers have to stop for. So we did some 0:17:33.119 --> 0:17:35.560 work looking at root patterns within Europe and actually what 0:17:35.600 --> 0:17:37.800 you discover is that there's quite a lot of most 0:17:37.800 --> 0:17:40.760 of the freight moved is actually moved on routes less 0:17:40.800 --> 0:17:43.560 than four or five hundred kilometers in Europe, but you 0:17:43.640 --> 0:17:46.000 do still have a fair bit of really long haul 0:17:46.040 --> 0:17:48.560 stuff and in that case then you are going to 0:17:48.560 --> 0:17:51.679 be dependent on the charging infrastructure on route. And so 0:17:52.040 --> 0:17:54.480 what we did find is that if you say, look 0:17:54.520 --> 0:17:56.680 at Europe, the average time or the amount of time 0:17:56.720 --> 0:17:59.000 that a driver is required to stop for every four 0:17:59.000 --> 0:18:02.920 hours of driving sufficient to recharge to add significant enough 0:18:03.000 --> 0:18:05.400 range to continue on the trip. So I actually don't 0:18:05.400 --> 0:18:08.200 think the downtime is going to be the limitter. Here. 0:18:08.240 --> 0:18:10.480 You're starting to see the truck ranges creep up. A 0:18:10.480 --> 0:18:12.800 lot of them are still in regional and urban duty 0:18:12.800 --> 0:18:15.679 cycles right now, so they do maybe two three hundred, 0:18:15.880 --> 0:18:18.679 four hundred kilometers. Even we're probably going to see the 0:18:18.720 --> 0:18:21.359 next ones that reach five hundred kilometers in large scale 0:18:21.359 --> 0:18:23.640 production in the next little while. Tesla Semi of course 0:18:23.640 --> 0:18:25.040 claiming they're going to be able to do much more 0:18:25.080 --> 0:18:28.159 than that, but we haven't actually seen that in fully 0:18:28.200 --> 0:18:31.119 loaded delivering that capability, which is important to note, but 0:18:31.160 --> 0:18:32.920 I don't think it's going to be the dwell time. 0:18:32.960 --> 0:18:35.760 I think there is more activity around megawatt scale charging, 0:18:35.800 --> 0:18:37.879 so being able to deliver a full megawatt of power 0:18:37.880 --> 0:18:40.040 to the truck. Once you do that, you can cut 0:18:40.040 --> 0:18:42.040