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Speaker 1: Hello, and welcome to another episode of the Odd Lots Podcast.

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Speaker 2: I'm Geoe Wisenthal.

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Speaker 3: And I'm Tracy Alloway.

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Speaker 1: Tracy Chinese EV exports. I feel like is a topic

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Speaker 1: that we've danced around, maybe is the way to put

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Speaker 1: it in numerous episodes related to trade, batteries, tech, trade policy, tech,

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Speaker 1: things like that, but we've never really like hit it

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Speaker 1: square on.

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Speaker 2: I don't think.

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Speaker 3: No, it's true. It's one of these things that's kind of,

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Speaker 3: as you put it, hovering in the background, and every

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Speaker 3: time it pops up, there's usually some amazing statistic attached

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Speaker 3: to it. One of the things that's come up a

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Speaker 3: few times now, I think, is this idea that China

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Speaker 3: has surpassed Germany as the biggest exporter of cars. I

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Speaker 3: think that happened last year or in a fairly recent quarter,

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Speaker 3: and it seems to be on track to surpass Japan

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Speaker 3: as well. So that's a pretty amazing development.

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Speaker 1: It's a really extraordinary development. And I think it's like,

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Speaker 1: you know, we talked about this with brand Setser for example,

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Speaker 1: it came up and like it really seems to have

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Speaker 1: caught a lot of people by surprise, and even as

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Speaker 1: recently as like twenty eighteen or twenty nineteen, The ability

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Speaker 1: of China to become a auto export powerhouse was not

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Speaker 1: on a lot of people's radar.

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Speaker 4: Absolutely.

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Speaker 3: And I think the other reason it keeps coming up

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Speaker 3: in conversations and is a particular interest to US is

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Speaker 3: because it relates a lot to this idea of the

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Speaker 3: new Industrial Policy and the idea of nurturing domestic manufacturers

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Speaker 3: and tech sectors of one sort or another. And it

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Speaker 3: also lands squarely into some of the tensions we've seen

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Speaker 3: between Europe and the US over the Inflation Reduction Act.

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Speaker 1: Yeah, I'm thinking about the episode that we recorded in

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Speaker 1: Pennsylvania or this spring with Dan Long where we really

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Speaker 1: talked about the Inflation Reduction Act. And you know, the

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Speaker 1: US has this incredible EV company called Tesla, but what

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Speaker 1: we don't really have nearly as much to the degree

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Speaker 1: is battery tech, which there's the Inflation Reduction Act is

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Speaker 1: trying to foster and so forth. And so there really

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Speaker 1: is a lot here with like this sort of like

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Speaker 1: global sort of like remaking of the entire like auto landscape.

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Speaker 3: Potentially, right, And I think the domestic supply chain is

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Speaker 3: probably where the US differs quite a bit to China,

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Speaker 3: and I think it would be really interesting to dive

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Speaker 3: into how the Chinese EV landscape is developing, and how

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Speaker 3: it compares and contrasts with the rest of the world.

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Speaker 1: And how the Yeah, how competitive are these How good

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Speaker 1: are these cards? Could they one day be on the

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Speaker 1: roads across the United States? Are is the European industry

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Speaker 1: going to be totally decimated by lower cost competitive all

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Speaker 1: these so many interesting topics, labor angles, labor costs would

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Speaker 1: cost so much here. Probably do several episodes over time

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Speaker 1: on this topic.

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Speaker 3: But this is the first.

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Speaker 1: But this is the first word just sort of like

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Speaker 1: looking at it directly. So I'm very excited about our guest.

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Speaker 1: We have the perfect guest to sort of welcome us

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Speaker 1: to this topic. We're gonna be speaking with Corey Kanter.

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Speaker 1: He is a senior associate for electric vehicles right here

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Speaker 1: at Bloomberg ne EF done a lot of research recently

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Speaker 1: put out a big report on the state of the

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Speaker 1: global EV market. Corey, thank you so much for coming

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Speaker 1: on the podcast.

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Speaker 4: Thanks show, Tracy. It's great to be here and great

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Speaker 4: always a great time to talk about electric vehicles. It's

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Speaker 4: always a great always news about electric vehicles. Well, you've

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Speaker 4: sold us.

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Speaker 2: Yeah, we're sold.

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Speaker 1: We're so I want to actually start with you know, again,

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Speaker 1: there's a million different angles. But like we mentioned Tesla

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Speaker 1: in the intro, it's like, Okay, one thing the US

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Speaker 1: definitely has is an extremely successful domestic EV company. But

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Speaker 1: there's also like this Chinese EV company that's like is

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Speaker 1: it bigger than Tesla? Like or is it close to it?

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Speaker 2: Or like what is it?

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Speaker 4: It's bigger than Tesla? And whoa. Folks that Bloomberg are

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Speaker 4: probably really familiar with BYD given that Warren Buffett invested

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Speaker 4: back in two thousand and eight, and since then, folks

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Speaker 4: at Bloomberg and in general have been tracking BID's progress.

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Speaker 4: BID last year had more electric vehicle sales than Tesla,

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Speaker 4: and it's been impressive how much they've grown in a

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Speaker 4: short period of time. So if we go back to

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Speaker 4: before the pandemic, a twenty nineteen BID had about two

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Speaker 4: hundred and twenty thousand electric vehicle sales, and in about

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Speaker 4: three years it grew by nine times. So last year

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Speaker 4: is about one point nine million electric vehicle sales compared

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Speaker 4: that to Tesla last year was one point three million.

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Speaker 4: One kind of key takeaway when we talk about EV's

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Speaker 4: on the BNF team. It's really a two horse race

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Speaker 4: at the top between Tesla and BID. And there's some

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Speaker 4: differences that we can get into between the two companies. Ye,

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Speaker 4: but Bid is winning right now in terms of total sales.

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Speaker 3: Just before we get into more of the Bid versus

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Speaker 3: Tesla idea, can we talk a little bit about the

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Speaker 3: Chinese EV landscape to set the stage, because my impression was,

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Speaker 3: and again I guess it's been you know, over a

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Speaker 3: year a year and a half since I left Hong Kong,

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Speaker 3: but my impression was, there is a lot of sometimes

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Speaker 3: irrational capital flowing into the space. There was talk of

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Speaker 3: a Chinese EV bubble. No one was quite sure whether

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Speaker 3: or not these companies were going to be viable on

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Speaker 3: a standalone basis. But fast forward to today, it seems

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Speaker 3: like we are starting to see some differentiation between winners

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Speaker 3: like Bid and maybe some losers who aren't going to

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Speaker 3: be able to compete.

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Speaker 4: Yeah, and to give you know, listeners a kind of

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Speaker 4: sense of how big that Chinese global EV market is.

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Speaker 4: Last year, globally there was about ten point five million

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Speaker 4: electric vehicle sales. China was about sixty percent of that,

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Speaker 4: so around six million or so, and it's a much

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Speaker 4: more competitive market. When I talk to folks here in

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Speaker 4: the US, Tesla really is far and away the leader.

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Speaker 4: In China, you have everyone, and not just you know,

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Speaker 4: new automakers like Neo who are out there selling EV's,

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Speaker 4: but even GM has this really small mini in venture

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Speaker 4: car that sells hundreds of thousands of units. So, whether

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Speaker 4: traditional or older OEMs or new entrants, it is a

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Speaker 4: competitive market and growing. But BID has really started to

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Speaker 4: affirm itself in the last three years as the market

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Speaker 4: leader there so much so that they've begin to look

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Speaker 4: into expanding into other markets. And we'll touch on that

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Speaker 4: when it gets to Europe. But it is a more

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Speaker 4: competitive space in China, and we do a lot of

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Speaker 4: research on the market in particular. But you know, you

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Speaker 4: don't just have BID dominating. You have now more consolidation

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Speaker 4: than maybe a couple of years ago in twenty nineteen,

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Speaker 4: just because you have more of those winners. Again, BID

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Speaker 4: for a long time was consistent at about two hundred

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Speaker 4: thousand EV sales a year. It was really only after

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Speaker 4: the pandemic when they really accelerated.

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Speaker 1: Well, what did they do what catalyzed so to speak,

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Speaker 1: that sales acceleration decades.

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Speaker 4: I think of battery knowledge. So BID before being an

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Speaker 4: EV company, is a battery manufacturing company, and they did

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Speaker 4: a lot of work in the electric bus space. So

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Speaker 4: people may be familiar with BID in the US because

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Speaker 4: they do have electric buses here that they're building outside

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Speaker 4: of LA in California. So globally they've been building a

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Speaker 4: lot of those electric buses in places like the US

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Speaker 4: but also Latin America. They've been building that kind of

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Speaker 4: global brand and dominance. And then they switch over the

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Speaker 4: passenger vehicles. And one big decision at BID made in

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Speaker 4: twenty twenty one and then they actually followed through with

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Speaker 4: it in twenty twenty two, is that they said we're

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Speaker 4: no longer going to sell gasoline cars. We're going to

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Speaker 4: end internal combustion engine vehicle sales. They announced that in

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Speaker 4: the back half of twenty twenty one, and then they

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Speaker 4: actually followed through in twenty twenty two. So you have

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Speaker 4: a lot of automakers throwing out ice phase out targets,

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Speaker 4: internal combustion engine phase out targets, but they set a

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Speaker 4: target and then they said, you know what, We're just

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Speaker 4: going to go solely in on electric now. They'd be clear.

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Speaker 4: There are some of those hybrid vehicles. Yeah, but they're

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Speaker 4: no longer selling purely gas cars. They're either both ICE

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Speaker 4: and EV or fully electric.

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Speaker 3: So you touched on it just there. But can you

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Speaker 3: talk a little bit more about how important the domestic

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Speaker 3: supply chain is to the China EV success story? I

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Speaker 3: guess because this is one thing that I hear consistently,

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Speaker 3: this idea that part of the reason why China's strategy

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Speaker 3: of building up this industry seems to be working so

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Speaker 3: far is because it has done so in a very

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Speaker 3: conscious manner where it's basically built out, you know, from

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Speaker 3: batteries to other types of components to.

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Speaker 4: Go along with this. Yeah. So China, if you go

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Speaker 4: back to twenty fifteen, they weren't making up, you know,

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Speaker 4: close to sixty percent of the global passenger EV market.

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Speaker 4: They were subsidizing, putting in policies in place restricting gas

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Speaker 4: link car registration to make it more appealing for consumers

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Speaker 4: to actually switch to electric. And then on top of that,

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Speaker 4: they were going directly to the various auto companies and

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Speaker 4: giving subsidies for each EV that was sold, so as

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Speaker 4: opposed to here in the US, for example, where those

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Speaker 4: consumers are getting the credit to purchase evs, they're going

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Speaker 4: more so to the companies themselves than encouraging those sales.

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Speaker 4: It's you know, policy wonkery. But in addition, you know,

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Speaker 4: you do that five, six, seven years and it begins

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Speaker 4: to build up that demand for electric vehicles. This doesn't

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Speaker 4: just happen overnight, which is a useful lesson I think

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Speaker 4: to take away for the automakers here struggling that you're

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Speaker 4: not going to just flip a switch with the IRA

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Speaker 4: passing and next year suddenly EV's are sold everywhere. You

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Speaker 4: need a long time to invest in that kind of

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Speaker 4: battery manufacturing side, which you know, to the point I

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Speaker 4: made earlier byd had the battery manufacturing expertise. Tesla has

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Speaker 4: been in the game for a while now with partnering

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Speaker 4: with Panasonic on the battery manufacturing side. I think for

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Speaker 4: too long many automakers have sheared away from the battery portion,

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Speaker 4: just like they have from charging, and so I think

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Speaker 4: that's the big lesson to takeaway. China invested on the

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Speaker 4: battery side, and the auto companies are understanding that that's

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Speaker 4: key to the core EV product.

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Speaker 1: God a billion questions already, this is just so good.

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Speaker 1: But you know, just going back to like the sort

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Speaker 1: of like BYD versus Tesla framework, Hey, can you just

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Speaker 1: reiterate the number unit numbers, but more importantly, like how

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Speaker 1: apples to apples are we talking about, because Tesla is

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Speaker 1: all ev YD does have hybrid and in terms of

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Speaker 1: whether the quality of the cars, the build quality, like

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Speaker 1: and maybe you could speak a little bit like in

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Speaker 1: markets where they both exist and competing, can you just

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Speaker 1: talk a little bit more about how apples to apples

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Speaker 1: we should be thinking about these two companies in comparison.

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Speaker 4: Yeah, and I think it's it's important to be fair

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Speaker 4: to Tesla, right, So let's go back to the top

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Speaker 4: line numbers for last year was one point nine one

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Speaker 4: point a five one point nine million in bilb for

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Speaker 4: BYD and Tesla was about one point three. But BYDS

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Speaker 4: split between hybrid and BEV battery electric vehicle is about

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Speaker 4: fifty to fifty. Okay, So from that standpoint, if you

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Speaker 4: say throughout the hybrids and we just want to look

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Speaker 4: at fully electric, Tesla is still in the lead. You know,

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Speaker 4: one point three million versus around nine hundred thousand or

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Speaker 4: so of the kind of fully electric BYD models. Another

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Speaker 4: big difference is Tesla has your four currently your X,

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Speaker 4: your Y or three, and your model as cyber truck.

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Speaker 4: We will see when that comes. I've been waiting for

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Speaker 4: that for a long time. BYD has many different models

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Speaker 4: close to thirty. You know, we've tracked last year. So

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Speaker 4: they have different segments, different sizes, both battery electric and

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Speaker 4: hybrid versions of the same vehicle type. So again their

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Speaker 4: strategy has been kind of flood the zone for the

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Speaker 4: different segments, and you know there are some advantages to that.

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Speaker 4: You can reach more consumers, different price points, so some

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Speaker 4: of bids. There was this really cool announcement that they're

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Speaker 4: aiming at an eleven thousand dollars car in Brazil in

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Speaker 4: a couple of years, so reaching that lower. Tesla's are

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Speaker 4: not eleven thousand dollars currently. Different ranges too, Right in

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Speaker 4: the US, we expect our vehicles more like three hundred

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Speaker 4: mile range. In China, you know, you could have shorter

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Speaker 4: range gvs about one hundred mile one hundred and fifty

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Speaker 4: mile depending that mini mini car segment, which is really

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Speaker 4: cool to follow that you would never really catch on

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Speaker 4: in other markets. So you can slice them and dice it.

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Speaker 4: Many different ways to say whether Tesla or BID who's

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Speaker 4: actually winning. I think the important thing is that they're

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Speaker 4: far and ahead of other automakers that we think about.

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Speaker 4: Volkswagen GM forward over here in terms of just thinking

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Speaker 4: about how diverse of an EV lineup you can have

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Speaker 4: and then actually executing it. Anytime an automaker is going

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Speaker 4: to go nine times as high in sales from a

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Speaker 4: couple of years ago, you're going to take notice. Even

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Speaker 4: if you doubled, right, if BYD had gone from the

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Speaker 4: two hundred thousand to five hundred thousand, we would you know,

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Speaker 4: make a note of that at BAF. But to grow

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Speaker 4: at that rate in such a short period of time,

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Speaker 4: you know, maybe it's unsustainable to say that they're going

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Speaker 4: to grow by another nine times in the next three years.

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Speaker 4: They're already seeing a little bit of pushback in Europe.

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Speaker 4: In India this week, actually they were rejected from having

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Speaker 4: a new battery plant for national policy reasons. But BYD

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Speaker 4: is going for it. They're going for it in different markets,

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Speaker 4: are going for it in markets that haven't seen evs,

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Speaker 4: like Latin America, which is exciting.

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Speaker 3: You know, you mentioned BYD's Brazilian ten thousand EV and

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Speaker 3: I think they have some sort of partnership with Toyota

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Speaker 3: as well to build something. And I wanted to ask

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Speaker 3: just more generally, it seems like there are quite a

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Speaker 3: few partnerships between Chinese EV manufacturers and foreign car makers

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Speaker 3: of one form or another. How important is that dynamic too,

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Speaker 3: I guess how quickly the Chinese EV industry has been

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Speaker 3: able to ramp up.

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Speaker 4: Yeah, that's a really good question and one that I

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Speaker 4: can frame and not necessarily have the best comment on.

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Speaker 4: In the sense that you look at, for example, for

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Speaker 4: the ncatl over here right, you're having the Chinese manufacturer

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Speaker 4: knowledge and really able to help a US or Western

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Speaker 4: automaker kind of advance their EV development, maybe where they've

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Speaker 4: been lagging, or even moving into new battery chemistry technologies

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Speaker 4: like LFP new in the sense of new for the West.

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Speaker 4: In terms of entering China as a Western automaker, you

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Speaker 4: have to often create what are called joint ventures, so

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Speaker 4: these partnerships with ae automaker to be able to access

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Speaker 4: that market. Now, Tesla, for example, didn't have to do that.

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Speaker 4: They were just, you know, after jumping through the necessary hurdles,

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Speaker 4: able to sell on their own. But other automakers. China

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Speaker 4: has used that kind of joint venture partnership in a

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Speaker 4: weird twist, kind of like the US has set these

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Speaker 4: barriers in the post Inflation Reduction Act world to say

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Speaker 4: you have to build here to be here. Yeah, it's

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Speaker 4: almost copying what China did because it wasn't easy for

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Speaker 4: automakers to get into the Chinese EV market specifically. I

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Speaker 4: hope that answers your question a little bit. I know

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Speaker 4: there's more nuances.

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Speaker 3: No, I was going to say. You started off saying

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Speaker 3: I might not be able to ask that question, and

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Speaker 3: then went into you know, great detail, So that was perfect.

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Speaker 1: You know, you mentioned the breadth of offerings that BYD

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Speaker 1: has and maybe like in the US, like they're probably

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Speaker 1: just is not much of a market anywhere for a

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Speaker 1: car that only has one hundred miles or fifty miles

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Speaker 1: or something like that. But you know, I know, like

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Speaker 1: in terms of exports, like the big anxiety currently like

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Speaker 1: maybe in a few years all the US compoty shoul

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Speaker 1: freak out, but I know, like there's more anxiety in.

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Speaker 4: Europe and stuff. Is that in part?

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Speaker 1: Like are the markets or the domestic markets in China,

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Speaker 1: And like I'm picturing just like a tiny little car

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Speaker 1: in Paris as being something that you would never see

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Speaker 1: here in the US, but maybe you see it in China.

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Speaker 1: Like is there enough like similarity in the sort of

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Speaker 1: like domestic markets of China and some places in Europe

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Speaker 1: such that there's an advantage where the card that they

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Speaker 1: sell domestically also have like an audience in Europe the

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Speaker 1: way they might not in the US.

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Speaker 4: There's definitely been concern from the European automakers around BYD

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Speaker 4: entering or just even a more competitive kind of tavy offerings. Again,

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Speaker 4: because BID has the expertise on the EV side, they're

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Speaker 4: coming in with attractive models and I believe it was

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Speaker 4: an article either earlier this year looking at Norway for example,

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Speaker 4: and the consumers being interested just because the cars are

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Speaker 4: solid quality and compared to automakers that may be struggling

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Speaker 4: with software. You know, BYD is working through or has

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Speaker 4: worked through some of those issues. I don't have the

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Speaker 4: stat right at hand, but it has been attractive enough

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Speaker 4: where the European folks have said, on the one hand,

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Speaker 4: we have Ira, you know in the US, squeezing us

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Speaker 4: out of the US market. On the other hand, we

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Speaker 4: have these Chinese new entrants here that are making us

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Speaker 4: nervous about our ability to kind of maintain home court

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Speaker 4: advantage in Europe. So they've taken notice of it. Have

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Speaker 4: the European automakers been able to respond in the way

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Speaker 4: that they need to? Not necessarily and if you know,

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Speaker 4: China is seen or the you know BYD for example,

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Speaker 4: as a this is a cool, positive new automaker coming

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Speaker 4: in and not the kind of geopolitical concerns. You know,

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Speaker 4: European automakers could be squeezed out or squeezed down. You know,

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Speaker 4: you're not going to see people lose all the market share,

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Speaker 4: but even having that kind of trimmed off the top

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Speaker 4: by now entrant. One thing I like to think about

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Speaker 4: in general, for the global EV spaces, with Tesla MBYD

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Speaker 4: growing at the rate that they are, the overall passenger

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Speaker 4: car sales PIE doesn't grow that much year of the year.

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Speaker 4: You know, it does fluctuate in previous years. It was

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Speaker 4: higher closer to one hundred million annual sales units last

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Speaker 4: year more in the seventy to seventy five million range.

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Speaker 4: But the point is that if you're having EV's making

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Speaker 4: up more of that, it has to come from somewhere.

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Speaker 4: It's not kind of this endlessly growing pie of car sales, right,

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Speaker 4: And so if you're a traditional, if you're a Toyota,

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Speaker 4: if you're a Volkswagen, you know you're going to start

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Speaker 4: to see that margin come down if you're not releasing

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Speaker 4: EV's that are competitive and exciting for consumers.

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Speaker 3: Wait, you mentioned geopolitical concerns, and I'm trying to think

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Speaker 3: how to phrase this question, but you know, if we

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Speaker 3: saw a big boom in China EV's in sort of

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Speaker 3: twenty nineteen twenty twenty, around that timeframe, that was also

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Speaker 3: peak sort of deglobalization fear time, right, Like lots of

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Speaker 3: talk about well, maybe we need to reorient supply lines.

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Speaker 3: Trump's trade war with China was still ongoing in twenty nineteen.

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Speaker 3: Why hasn't that played more of a role in this dynamic,

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Speaker 3: Like shouldn't there be automakers who are looking at China

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Speaker 3: and going, well, wait a second, maybe we don't want

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Speaker 3: to partner too much, you know, at least according to

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Speaker 3: the deglobalization argument.

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Speaker 4: It's a complicated story because I think there is in

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Speaker 4: the way I would kind of phrase it and think about,

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Speaker 4: is the partnership that GM and FOURD and other automakers

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Speaker 4: have here with Tesla around DV charging. There's an element

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Speaker 4: of you have the knowledge, you have the expertise, you

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Speaker 4: want to kind of gain from that experience. And there's

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Speaker 4: been reports I believe it was and I don't want

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Speaker 4: to name the wrong automaker of continued partnerships this week

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Speaker 4: with SAIC kind of reports on a potential potential platform partnership.

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Speaker 4: But to the broader point, you know, it's coopetition a

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Speaker 4: little bit. It's you're going to gain some of that

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Speaker 4: knowledge and then try and leap frog it. From our purview,

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Speaker 4: we've seen automakers in Japan, for example, looking to go

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Speaker 4: to new battery technologies like solid state, so you can

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Speaker 4: kind of leapfrog where China is and it's kind of

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Speaker 4: LFP battery chemistry, which is a kind of cheaper, shorter range,

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Speaker 4: beneficial chemistry for those who aren't familiar. So learning from

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Speaker 4: Chinese automakers, but I would say even the auto industry

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Speaker 4: in general, there's always this kind of domestic sense of pride,

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Speaker 4: whether you're talking about BMW and Volkswagen in Germany or

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Speaker 4: GM forward and now Stilantis here. The Big three in

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Speaker 4: the US. So some of it is new, and we

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Speaker 4: could talk about IRA related and how that policy was constructed,

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Speaker 4: but some of it is very old. And I think

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Speaker 4: that the new thing here is that China has been

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Speaker 4: so successful or some of these Chinese companies have been

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Speaker 4: successful in you know, passing Germany, in you know, competing

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Speaker 4: with Japan, and it's because they've embraced this ev opportunity,

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Speaker 4: both through kind of smart subsidy planning but also the

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Speaker 4: companies doing the work.

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Speaker 1: Let's get to the Inflation Reduction Act because, as you

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Speaker 1: pointed out, like one of the advantages that it sounds

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Speaker 1: like the Chinese companies have is like deep battery experts.

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Speaker 4: Yeah, and it makes sense.

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Speaker 1: I mean, that's the core of an electric vehicle, right,

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Speaker 1: they don't even have that many parts. Right, It's basically

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Speaker 1: like the battery is what the whole is, the whole

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Speaker 1: game in town. And we know that thanks to the

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Speaker 1: Inflation Reduction Act. It's like every day there's a new

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Speaker 1: press release about a new battery factory. Just talk us

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Speaker 1: a little bit, like walk us through the economics of

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Speaker 1: how the IRA changes the game for US battery manufacturing.

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Speaker 4: Yeah, So a good way to think about it is

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Speaker 4: at BNF we put out, well, my colleagues does great

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Speaker 4: work on what we call the Lithium ion Battery Price Survey,

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Speaker 4: So just how much does a battery cost on a

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Speaker 4: kind of volume weighted average, And last year that number

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Speaker 4: was about one hundred and fifty one dollars per kill

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Speaker 4: a wide hour. So why that's important is battery costs

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Speaker 4: need to come down given that they make up such

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Speaker 4: a large portion of the EV, in order for electric

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Speaker 4: vehicles to be one more affordable for consumers but more

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Speaker 4: profitable for automakers. So the IRA has two EV related

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Speaker 4: tax credits. The first is what everyone seems to know about,

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Speaker 4: the seventy five hundred dollars you know for manufacturer in

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Speaker 4: North America for the final assembly all the critical mineral

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Speaker 4: requirements as well as the battery component requirements. That's you know,

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Speaker 4: the consumer this year getting that seventy five hundred dollars.

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Speaker 4: Then there's the battery production tax credit, and I don't

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Speaker 4: know if as many people are as familiar with it

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Speaker 4: for policy wunks, that's the forty five X credit That

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Speaker 4: is about forty five dollars per kilowot hour production tax credit.

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Speaker 4: So what that means is if GM and LG they

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Speaker 4: have ULTM, they set up a battery manufacturing plant here,

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Speaker 4: for every kilowot hour that they produce of batteries, they're

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Speaker 4: going to get a forty five dollars tax credit that

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Speaker 4: goes towards the joint venture. And they could do all

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Speaker 4: the tax magic work with what they will, but really

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Speaker 4: what that means is about thirty percent of that one

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Speaker 4: hundred and fifty one dollars per kilo WoT hour number

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Speaker 4: is going to be subsidized or paid back in some

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Speaker 4: way by the US government over time. And so what

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Speaker 4: that means, and the way the credit is designed that's

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Speaker 4: really smart, is it starts at about one hundred percent

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Speaker 4: of that value, and then later in the decade it

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Speaker 4: declines to you know, seventy five percent, fifty percent, and

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Speaker 4: then phases out. So if you are an EV maker

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Speaker 4: or a battery manufacturer, you want to establish that battery

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Speaker 4: production plant yesterday, and then the next best thing to

436
00:21:49,840 --> 00:21:52,280
Speaker 4: you yesterday is in a couple of years. So when

437
00:21:52,280 --> 00:21:55,080
Speaker 4: you see those announcements, typically it's about two years from

438
00:21:55,080 --> 00:21:57,720
Speaker 4: when you break ground to that kind of fully ramped

439
00:21:57,760 --> 00:22:00,399
Speaker 4: up production, so none of the kind of impact of

440
00:22:00,440 --> 00:22:03,679
Speaker 4: the IRA is necessarily seen today through the battery production

441
00:22:03,760 --> 00:22:06,040
Speaker 4: tax credit. We look at the back half of next

442
00:22:06,119 --> 00:22:09,119
Speaker 4: year into twenty twenty five as when you actually see

443
00:22:09,480 --> 00:22:12,240
Speaker 4: the kind of announcements made since the law pass coming

444
00:22:12,240 --> 00:22:15,600
Speaker 4: into fruition and hopefully that's passed on to consumers. Again,

445
00:22:15,920 --> 00:22:18,760
Speaker 4: it depends on what automakers will do, but it's a

446
00:22:18,800 --> 00:22:20,919
Speaker 4: powerful tool to kind of level the playing field with

447
00:22:21,040 --> 00:22:24,639
Speaker 4: China or Europe. And we've even seen automakers move battery

448
00:22:24,720 --> 00:22:28,520
Speaker 4: manufacturing to the US instead of Europe. Tesla was a

449
00:22:28,520 --> 00:22:30,480
Speaker 4: good example. They were, you know, were building up in

450
00:22:30,520 --> 00:22:32,679
Speaker 4: Germany and then you know they're putting more of a

451
00:22:32,720 --> 00:22:35,280
Speaker 4: focus on here because of how potent that tax credit is.

452
00:22:35,880 --> 00:22:39,560
Speaker 3: So this is why Germany's mad clear. But just to

453
00:22:39,640 --> 00:22:42,560
Speaker 3: hit this point home, because I mean, it seems like

454
00:22:42,880 --> 00:22:46,840
Speaker 3: domestic policy was very important for China's EV industry and

455
00:22:46,880 --> 00:22:51,400
Speaker 3: it could become very very important for America's EV industry.

456
00:22:51,600 --> 00:22:55,840
Speaker 3: What are the key differences and similarities between how these

457
00:22:55,880 --> 00:23:00,199
Speaker 3: two countries are pursuing that type of policy. Like, I

458
00:23:00,200 --> 00:23:04,359
Speaker 3: guess there's tax credits on either side, but comparing contrast

459
00:23:04,440 --> 00:23:05,080
Speaker 3: for US.

460
00:23:05,040 --> 00:23:08,320
Speaker 4: Yeah, I'd say the similarity is the subsidization and the

461
00:23:08,400 --> 00:23:11,840
Speaker 4: tax credits now both focused smartly on the battery side

462
00:23:11,920 --> 00:23:14,359
Speaker 4: and the ev side. China did have more of the

463
00:23:14,400 --> 00:23:17,520
Speaker 4: restrictions in terms of making it more difficult to register

464
00:23:17,680 --> 00:23:22,000
Speaker 4: gasoline cars, which over time encourages consumers to move towards electric.

465
00:23:22,040 --> 00:23:24,320
Speaker 4: When you have so many cars being sold, you want

466
00:23:24,320 --> 00:23:26,600
Speaker 4: to be able to get them registered. In the US,

467
00:23:26,640 --> 00:23:30,040
Speaker 4: the version of that would be through stronger fuel economy standards,

468
00:23:30,040 --> 00:23:33,280
Speaker 4: which the Biding Administration has talked about, or California having

469
00:23:33,320 --> 00:23:36,679
Speaker 4: an internal combustion engine phase out. One thing that Europe

470
00:23:36,680 --> 00:23:38,800
Speaker 4: has done that we haven't seen in China is having

471
00:23:38,800 --> 00:23:42,439
Speaker 4: a twenty thirty five internal combustion engine new sales target,

472
00:23:42,560 --> 00:23:46,800
Speaker 4: so fully electric or hydrogen fuel cell for those vehicles

473
00:23:47,160 --> 00:23:49,480
Speaker 4: as well. You see US states doing that as well,

474
00:23:49,560 --> 00:23:52,320
Speaker 4: but outside of California, the rest of the US isn't

475
00:23:52,359 --> 00:23:55,879
Speaker 4: necessarily on that kind of growth trajectory. So comparative, if

476
00:23:55,920 --> 00:23:58,840
Speaker 4: we had this conversation maybe like two years ago, you

477
00:23:58,840 --> 00:24:01,520
Speaker 4: would say the US from a policymaking standpoint, is far

478
00:24:01,560 --> 00:24:05,040
Speaker 4: behind China Europe. Now because of the Inflation Reduction Act,

479
00:24:05,400 --> 00:24:08,000
Speaker 4: the US is pulled within you know, where they need

480
00:24:08,040 --> 00:24:10,600
Speaker 4: to be. It's now just keeping those policies in place

481
00:24:11,160 --> 00:24:13,840
Speaker 4: and automakers seeing the advantage in the opportunity here.

482
00:24:14,400 --> 00:24:17,520
Speaker 1: So many questions still, there's two questions and I want

483
00:24:17,520 --> 00:24:19,320
Speaker 1: to forget I want to make sure you don't forget them.

484
00:24:19,400 --> 00:24:22,640
Speaker 1: But you know you mentioned charging and I'm curious there

485
00:24:22,760 --> 00:24:24,920
Speaker 1: was that deal a few weeks ago there was announced

486
00:24:24,920 --> 00:24:26,879
Speaker 1: where like GM and four they're like, we're going to

487
00:24:26,960 --> 00:24:30,399
Speaker 1: adopt Tesla's charging standard. Yeah, can you just sort of

488
00:24:30,440 --> 00:24:34,840
Speaker 1: real quickly explain like what the significance of that agreement is,

489
00:24:34,880 --> 00:24:36,879
Speaker 1: how it benefits Tesla. Do they get like a penny

490
00:24:36,880 --> 00:24:40,240
Speaker 1: every time there's a charge, and how charging works in China,

491
00:24:40,359 --> 00:24:42,840
Speaker 1: Like is there just a nationwide standard there?

492
00:24:43,480 --> 00:24:45,520
Speaker 4: Yeah, there's a different standard than China, and there's a

493
00:24:45,520 --> 00:24:47,520
Speaker 4: different standard than Europe, and now there will be a

494
00:24:47,520 --> 00:24:50,320
Speaker 4: different standard in the US. Now. The huge deal in

495
00:24:50,440 --> 00:24:54,119
Speaker 4: terms of ultimately all these evs are charging on you know,

496
00:24:54,200 --> 00:24:56,639
Speaker 4: similar ish batteries, but it's more so what the plug

497
00:24:56,680 --> 00:24:59,920
Speaker 4: looks like and the US charging network compared to China.

498
00:25:00,280 --> 00:25:03,800
Speaker 4: China beyond laps the US in terms of annual public

499
00:25:03,880 --> 00:25:07,640
Speaker 4: charging installation, and they have for some time now why

500
00:25:07,680 --> 00:25:11,159
Speaker 4: they deal with Tesla, GM, Ford and then it seems

501
00:25:11,160 --> 00:25:14,639
Speaker 4: like a new automaker every week, Nissan jumped on, Volvo

502
00:25:14,800 --> 00:25:19,000
Speaker 4: jumped on, Rivian jumped on. Is really handing the not

503
00:25:19,080 --> 00:25:21,880
Speaker 4: the keys to the car necessarily, but a lot of

504
00:25:21,920 --> 00:25:26,080
Speaker 4: your potential success over to Tesla. What Tesla gets out

505
00:25:26,080 --> 00:25:29,040
Speaker 4: of it is they become the premier charging network and

506
00:25:29,080 --> 00:25:33,000
Speaker 4: they've already been outdoing their competitors. You know, it's not

507
00:25:33,040 --> 00:25:35,720
Speaker 4: a slammed on case that this is going to be

508
00:25:35,800 --> 00:25:39,439
Speaker 4: as successful yet. I think the hesitation is maybe Tesla

509
00:25:39,480 --> 00:25:41,480
Speaker 4: hasn't had to manage It's one thing when you have,

510
00:25:41,640 --> 00:25:44,320
Speaker 4: for models, for example, to kind of balance on your

511
00:25:44,400 --> 00:25:47,320
Speaker 4: charging network. Now you're having dozens, right. GM has a

512
00:25:47,320 --> 00:25:49,320
Speaker 4: bunch of models for it has a bunch of models.

513
00:25:49,960 --> 00:25:53,560
Speaker 4: But like we were saying before about batteries, batteries and

514
00:25:53,680 --> 00:25:56,160
Speaker 4: charging our core to the EV experience. And I think

515
00:25:56,200 --> 00:25:58,560
Speaker 4: for a long time, GM and Ford and others said

516
00:25:58,800 --> 00:26:02,199
Speaker 4: we're going to trust these other charging companies to handle

517
00:26:02,320 --> 00:26:06,000
Speaker 4: something that's core to our product, and Ford eventually got

518
00:26:06,080 --> 00:26:08,880
Speaker 4: fed up, and these other automakers have followed. In terms

519
00:26:08,920 --> 00:26:12,040
Speaker 4: of Tesla getting a licensing fee, you know, we haven't

520
00:26:12,040 --> 00:26:14,320
Speaker 4: seen the terms of the agreement, so we don't fully

521
00:26:14,400 --> 00:26:17,639
Speaker 4: know what they were promised. But even without knowing those details,

522
00:26:17,960 --> 00:26:20,720
Speaker 4: consumers now see Tesla as the premium charging network and

523
00:26:20,760 --> 00:26:23,320
Speaker 4: that will benefit them by having more uptake on their

524
00:26:23,400 --> 00:26:25,720
Speaker 4: charging network, and they've been building it out fairly quickly.

525
00:26:26,080 --> 00:26:28,800
Speaker 3: Wait, I have an even simpler question, which is what

526
00:26:28,840 --> 00:26:32,560
Speaker 3: does charging infrastructure look like in China? Because this was

527
00:26:32,560 --> 00:26:35,840
Speaker 3: always thought to be one of the impediments in the US,

528
00:26:35,880 --> 00:26:38,159
Speaker 3: this idea that you know, you can buy an evy,

529
00:26:38,320 --> 00:26:41,080
Speaker 3: but if you're going to do some long road trip,

530
00:26:41,440 --> 00:26:45,480
Speaker 3: it might be challenging to find the requisite charging stations.

531
00:26:45,560 --> 00:26:46,879
Speaker 3: Is it different in China?

532
00:26:46,960 --> 00:26:49,320
Speaker 4: Yeah, so, Tracy, again, I guess on that one. I

533
00:26:49,359 --> 00:26:52,000
Speaker 4: would definitely put posit it to our China specific expert

534
00:26:52,080 --> 00:26:55,280
Speaker 4: on the nitty gritty details. What I can say, like

535
00:26:55,359 --> 00:26:58,439
Speaker 4: we discussed before, is that the actual vehicle needs are different.

536
00:26:58,720 --> 00:27:02,320
Speaker 4: So when you have various different ranges, and in general globally,

537
00:27:02,359 --> 00:27:04,359
Speaker 4: a lot of charging is done at home, So when

538
00:27:04,400 --> 00:27:07,200
Speaker 4: you have smaller batteries in smaller cars, it's a different

539
00:27:07,240 --> 00:27:09,080
Speaker 4: pull on the grid there than it is here in

540
00:27:09,119 --> 00:27:12,520
Speaker 4: the US. But just from a pure kind of addition standpoint,

541
00:27:12,600 --> 00:27:14,760
Speaker 4: China has been far more focused and able to scale

542
00:27:14,840 --> 00:27:17,119
Speaker 4: up the total number of EV chargers. I wish you

543
00:27:17,160 --> 00:27:18,760
Speaker 4: have the numbers in front of me, but I think

544
00:27:18,760 --> 00:27:20,880
Speaker 4: it's I'm not even going to throw it out there.

545
00:27:21,560 --> 00:27:24,239
Speaker 4: But again to kind of restate, China has been a

546
00:27:24,240 --> 00:27:26,800
Speaker 4: lot more on top of building out that EV charging network.

547
00:27:27,080 --> 00:27:29,560
Speaker 4: I think in the US you haven't had the federal

548
00:27:29,800 --> 00:27:33,000
Speaker 4: money up until really the last year or so. And

549
00:27:33,359 --> 00:27:35,080
Speaker 4: you guys can correct me if I'm wrong, but as

550
00:27:35,080 --> 00:27:36,800
Speaker 4: far as I know, a lot of that, you know,

551
00:27:36,960 --> 00:27:40,520
Speaker 4: NEV funding National EV Charging infrastructure as a part of

552
00:27:40,520 --> 00:27:43,000
Speaker 4: the infrastructure law passed a couple of years ago, hasn't

553
00:27:43,040 --> 00:27:46,240
Speaker 4: actually rolled out yet. It's been through the RFP process

554
00:27:46,560 --> 00:27:48,600
Speaker 4: and the state's kind of building out their plans for

555
00:27:48,640 --> 00:27:52,520
Speaker 4: what charging looks like, but the actual chargers haven't been deployed.

556
00:27:52,560 --> 00:27:54,080
Speaker 4: And maybe it's a good thing, because I think a

557
00:27:54,080 --> 00:27:55,960
Speaker 4: lot of states don't know if they should be going,

558
00:27:56,359 --> 00:27:59,320
Speaker 4: you know, with Tesla standard or still the CCS Combined

559
00:27:59,400 --> 00:28:02,119
Speaker 4: Charging Standard that the other auto makers had agreed to

560
00:28:02,640 --> 00:28:05,560
Speaker 4: almost ten years ago, before you know, switching over and

561
00:28:05,600 --> 00:28:06,879
Speaker 4: switching sides to Tesla.

562
00:28:07,480 --> 00:28:09,000
Speaker 1: I like how you said you could correct me if

563
00:28:09,000 --> 00:28:10,080
Speaker 1: I'm wrong, is if I would.

564
00:28:09,880 --> 00:28:14,480
Speaker 2: Have any like, actually, I don't think you got that

565
00:28:15,119 --> 00:28:15,600
Speaker 2: quite right.

566
00:28:16,080 --> 00:28:18,080
Speaker 1: One of the big themes, and this is something that

567
00:28:18,160 --> 00:28:20,720
Speaker 1: comes up all the time, and we've already talked about

568
00:28:21,000 --> 00:28:23,239
Speaker 1: lots on this episode just now, is just like, you know,

569
00:28:23,560 --> 00:28:26,040
Speaker 1: building up knowledge within a company, whether it's building up

570
00:28:26,040 --> 00:28:27,560
Speaker 1: how to put a car together, how to put a

571
00:28:27,640 --> 00:28:30,400
Speaker 1: charging network together, how to make a battery, et cetera.

572
00:28:30,760 --> 00:28:33,239
Speaker 1: And so something I'm curious when you talk about, like

573
00:28:34,040 --> 00:28:37,600
Speaker 1: some of these by D experts are really cheap just

574
00:28:37,640 --> 00:28:40,000
Speaker 1: on the dollar basis, Like, as you've mentioned, eleven thousand

575
00:28:40,000 --> 00:28:43,600
Speaker 1: dollars cars very cheap. How much of that is they've

576
00:28:43,640 --> 00:28:46,040
Speaker 1: just gotten really good at bending the cost curve because

577
00:28:46,040 --> 00:28:49,360
Speaker 1: they've been doing it a lot, versus something like their

578
00:28:49,440 --> 00:28:51,200
Speaker 1: labor costs are cheaper because it's in China.

579
00:28:51,280 --> 00:28:54,240
Speaker 4: Yeah, it's probably a mix of both. I think, you know.

580
00:28:54,320 --> 00:28:56,960
Speaker 4: Having the it was interesting I was looking at a

581
00:28:56,960 --> 00:28:59,920
Speaker 4: little bit of BYD history just before coming on. They

582
00:29:00,080 --> 00:29:02,120
Speaker 4: were founded as a whole company in nineteen ninety five,

583
00:29:02,760 --> 00:29:05,640
Speaker 4: and then they bought, you know, acquired an auto business

584
00:29:05,640 --> 00:29:07,360
Speaker 4: and built it up starting in two thousand and three.

585
00:29:07,840 --> 00:29:10,400
Speaker 4: And again they've had the battery expertise and obviously they

586
00:29:10,400 --> 00:29:13,840
Speaker 4: were selling gasoline cars for a long time, but having

587
00:29:13,840 --> 00:29:16,280
Speaker 4: that battery knowledge fifteen years before you start to see

588
00:29:16,280 --> 00:29:20,600
Speaker 4: that exponential, strong growth. From twenty nineteen onwards, you're seeing

589
00:29:20,640 --> 00:29:24,280
Speaker 4: other automakers who are in Tesla struggling with the growth

590
00:29:24,280 --> 00:29:26,640
Speaker 4: curve of how do you build, you know, bend that

591
00:29:26,720 --> 00:29:28,640
Speaker 4: cost curve, how do you begin to make a profit

592
00:29:28,680 --> 00:29:32,280
Speaker 4: on electric vehicles? And even taking Rivian as a shorter

593
00:29:32,360 --> 00:29:35,360
Speaker 4: term example, you could see how a newer EV company

594
00:29:35,840 --> 00:29:38,880
Speaker 4: that started producing a couple of years ago is maybe

595
00:29:38,920 --> 00:29:41,800
Speaker 4: only starting to hit a stride at a low volume,

596
00:29:42,440 --> 00:29:45,320
Speaker 4: maybe in the last quarter or so. So these things

597
00:29:45,320 --> 00:29:48,520
Speaker 4: take time, and that's without you know, switching over from

598
00:29:48,560 --> 00:29:51,640
Speaker 4: a gasoline product. One thing that BYD did do, and

599
00:29:51,640 --> 00:29:54,720
Speaker 4: I'm interested to see which automakers follow suit, is there

600
00:29:54,840 --> 00:29:57,240
Speaker 4: is an element of let's just go for it. Let's

601
00:29:57,280 --> 00:30:00,920
Speaker 4: just put the gas car behind us fully and commit

602
00:30:00,960 --> 00:30:03,920
Speaker 4: to being an electric vehicle company. I think other car

603
00:30:03,920 --> 00:30:07,480
Speaker 4: companies want to balance kind of shareholder interests and say

604
00:30:07,560 --> 00:30:09,680
Speaker 4: we want to keep making money while we're figuring this

605
00:30:09,760 --> 00:30:12,840
Speaker 4: EV thing out. By D maybe it's because of the

606
00:30:12,880 --> 00:30:15,880
Speaker 4: knowledge and expertise, but to take the leap from we're

607
00:30:15,920 --> 00:30:19,920
Speaker 4: making gas cars and evs to going fully electric. It

608
00:30:20,080 --> 00:30:23,240
Speaker 4: came fairly quickly, but they've reaped some of those benefits

609
00:30:23,240 --> 00:30:26,760
Speaker 4: and now moving forward, the questions we get often is

610
00:30:27,000 --> 00:30:29,120
Speaker 4: you know who will be in second place? Where who

611
00:30:29,160 --> 00:30:33,200
Speaker 4: will surpass Tesla in the US, And now the two

612
00:30:33,240 --> 00:30:36,000
Speaker 4: horses in terms of Tesla and BYD are so far

613
00:30:36,040 --> 00:30:38,280
Speaker 4: out of the barn. It's only going to They're only

614
00:30:38,280 --> 00:30:40,560
Speaker 4: going to gain more expertise and knowledge. I mean, Tesla

615
00:30:40,640 --> 00:30:43,880
Speaker 4: announced earlier this year their next generation vehicle that will

616
00:30:43,880 --> 00:30:46,719
Speaker 4: compete with BYD in that kind of twenty five thousand

617
00:30:46,720 --> 00:30:50,160
Speaker 4: dollars range. For other automakers, if Tesla and BYD are

618
00:30:50,160 --> 00:30:52,400
Speaker 4: in those kind of cheaper categories where you're going to

619
00:30:52,400 --> 00:30:54,640
Speaker 4: see a lot of volume sales in the future, you

620
00:30:54,640 --> 00:30:56,560
Speaker 4: know you're already behind or you're going to be further

621
00:30:56,600 --> 00:30:59,720
Speaker 4: and further behind. As these automakers are investing. It's a

622
00:30:59,760 --> 00:31:02,360
Speaker 4: trick thing for other auto makers to figure out. But

623
00:31:03,040 --> 00:31:06,040
Speaker 4: if they don't, there's a bigger problem if BYD Inteslinae

624
00:31:06,120 --> 00:31:07,960
Speaker 4: keep on taking more and more of that market share.

625
00:31:08,480 --> 00:31:10,640
Speaker 3: So just to press on this point, because it's something

626
00:31:10,640 --> 00:31:13,640
Speaker 3: that's come up, I think in multiple conversations we've had

627
00:31:13,680 --> 00:31:17,600
Speaker 3: with like Brian Deese and Jared Bernstein and certainly Dan

628
00:31:17,640 --> 00:31:20,440
Speaker 3: Wong and Adam Ozomech. But there's this idea that Okay,

629
00:31:20,920 --> 00:31:23,720
Speaker 3: you know, US policymakers can say that we want to

630
00:31:23,760 --> 00:31:27,240
Speaker 3: build up a certain industry within the US, but if

631
00:31:27,240 --> 00:31:30,800
Speaker 3: we're not able to do so in an efficient way

632
00:31:30,840 --> 00:31:34,480
Speaker 3: that can compete with you know, other efficient industries in

633
00:31:34,520 --> 00:31:38,480
Speaker 3: places like China, then it could still be problematic. So

634
00:31:38,600 --> 00:31:41,560
Speaker 3: I guess my question is, like how much does price

635
00:31:41,680 --> 00:31:46,520
Speaker 3: point and branding and origin actually matter for the EV market?

636
00:31:46,920 --> 00:31:50,080
Speaker 3: Could we, for instance, have an American electric vehicle market

637
00:31:50,160 --> 00:31:54,120
Speaker 3: where you know, there are these Chinese, these cheaper Chinese

638
00:31:54,120 --> 00:31:58,240
Speaker 3: imports available, but Americans still have a preference for Tesla

639
00:31:58,360 --> 00:32:00,000
Speaker 3: and other domestic manufacturers.

640
00:32:00,200 --> 00:32:02,880
Speaker 4: Yeah, and you even see the potential kind of Tesla

641
00:32:02,960 --> 00:32:05,040
Speaker 4: brand premium. You know, Tesla does very well in the

642
00:32:05,120 --> 00:32:08,040
Speaker 4: Chinese market, even despite BYD and these other kind of

643
00:32:08,080 --> 00:32:13,360
Speaker 4: more competitive offerings. One thing on the kind of China point. Volvo,

644
00:32:13,520 --> 00:32:16,640
Speaker 4: which is manufacturing many of its vehicles in China, you know,

645
00:32:16,800 --> 00:32:19,080
Speaker 4: is in the US market, and there is a kind

646
00:32:19,080 --> 00:32:22,800
Speaker 4: of brand premium there they unveiled earlier this week. In

647
00:32:22,840 --> 00:32:25,360
Speaker 4: the past couple of months, the e X thirty, which

648
00:32:25,400 --> 00:32:27,080
Speaker 4: is going to be at a thirty five thousand dollars

649
00:32:27,120 --> 00:32:30,440
Speaker 4: price point without any subsidy because of course Chinese produced

650
00:32:30,480 --> 00:32:34,200
Speaker 4: evs won't receive any Inflation Reduction Act credits. That's coming

651
00:32:34,200 --> 00:32:36,640
Speaker 4: out next summer and his plan to come out, so

652
00:32:37,000 --> 00:32:39,240
Speaker 4: you know whether or not it's byd there are going

653
00:32:39,280 --> 00:32:42,720
Speaker 4: to be other Chinese built auto makers that are already here. Pollstar,

654
00:32:42,880 --> 00:32:45,040
Speaker 4: you know, as a part of the Volvo Jili family,

655
00:32:45,160 --> 00:32:48,360
Speaker 4: is also already here, so you know you have those

656
00:32:48,360 --> 00:32:50,440
Speaker 4: cars that may be seen as more premium because of

657
00:32:50,480 --> 00:32:53,440
Speaker 4: the kind of Volvo badge. Tesla's going to contain all

658
00:32:53,440 --> 00:32:56,360
Speaker 4: those Chinese company. Yeah, Volvo is basically Swedish that was

659
00:32:56,400 --> 00:32:59,400
Speaker 4: acquired by a Chili, so there is a subsidiary of

660
00:32:59,400 --> 00:33:14,520
Speaker 4: a subsidiary.

661
00:33:16,480 --> 00:33:18,760
Speaker 1: I want to go back to the tension that the

662
00:33:19,480 --> 00:33:22,560
Speaker 1: US legacy automakers face right now, and you just got

663
00:33:22,600 --> 00:33:24,600
Speaker 1: to It's like they want to make money right now,

664
00:33:24,880 --> 00:33:27,720
Speaker 1: and one way to make money is just selling ice vehicles.

665
00:33:27,960 --> 00:33:30,480
Speaker 1: They also want to be there for the future and

666
00:33:30,520 --> 00:33:33,360
Speaker 1: they are investing in EV's but it's clearly a tension

667
00:33:33,440 --> 00:33:35,560
Speaker 1: because it's going to be a while before they ramp

668
00:33:35,640 --> 00:33:37,120
Speaker 1: up in their money making, and there's a lot of

669
00:33:37,320 --> 00:33:41,240
Speaker 1: capital expenditures. But then there's this other dynamic. And actually

670
00:33:41,240 --> 00:33:44,640
Speaker 1: we're recording this July twenty fifth, and just this morning

671
00:33:44,680 --> 00:33:46,440
Speaker 1: GM came out with earnings and the like. Things are

672
00:33:46,480 --> 00:33:48,480
Speaker 1: looking good, provided we don't have a strike.

673
00:33:48,760 --> 00:33:49,560
Speaker 4: Can you talk a.

674
00:33:49,480 --> 00:33:54,320
Speaker 1: Little bit about how the shift to evs at places

675
00:33:54,360 --> 00:33:58,440
Speaker 1: like GM and Ford the labor tensions that involved in

676
00:33:58,440 --> 00:34:00,000
Speaker 1: this pretty big switch over the work force.

677
00:34:00,640 --> 00:34:04,080
Speaker 4: Yeah, and I think it's an interesting conundrum in the

678
00:34:04,160 --> 00:34:07,640
Speaker 4: sense that you have basically the need to get electric

679
00:34:07,760 --> 00:34:09,759
Speaker 4: vehicles out there at the lower price point. We talked

680
00:34:09,760 --> 00:34:12,080
Speaker 4: before about the battery pack and how you need to

681
00:34:12,080 --> 00:34:15,560
Speaker 4: improve those efficiencies, and so GM and Ford and all

682
00:34:15,600 --> 00:34:18,080
Speaker 4: the other automakers are now building those battery plants here,

683
00:34:18,360 --> 00:34:20,440
Speaker 4: and what does that look like for the workers. You know,

684
00:34:20,480 --> 00:34:23,440
Speaker 4: you got these negotiations coming up in the fall, and

685
00:34:23,920 --> 00:34:27,600
Speaker 4: you know four your contract typically we at BNEF. To

686
00:34:27,600 --> 00:34:30,640
Speaker 4: give a broader context, last year, the electric share of

687
00:34:30,680 --> 00:34:34,040
Speaker 4: new passenger car sales in the US was just under

688
00:34:34,080 --> 00:34:36,960
Speaker 4: eight percent by mid decade. By twenty twenty five, we

689
00:34:37,000 --> 00:34:39,800
Speaker 4: see that going to about twenty three percent, so nearly

690
00:34:40,080 --> 00:34:43,440
Speaker 4: one in five new vehicles as electric and so from

691
00:34:43,480 --> 00:34:47,480
Speaker 4: a kind of negotiation standpoint, whatever GM, forward Stillantis and

692
00:34:47,560 --> 00:34:49,640
Speaker 4: UAW come to it's going to be setting the rules

693
00:34:49,640 --> 00:34:51,839
Speaker 4: to the road whether or not you know, evs are

694
00:34:51,840 --> 00:34:54,400
Speaker 4: in the kind of core negotiations as these. You know,

695
00:34:54,440 --> 00:34:57,040
Speaker 4: Tesla says this a lot. Evs are part of an

696
00:34:57,080 --> 00:34:59,520
Speaker 4: auto company. You know, Tesla is an automotive company, even

697
00:34:59,560 --> 00:35:02,799
Speaker 4: though people try and put EV companies into a different bucket.

698
00:35:03,160 --> 00:35:05,879
Speaker 4: So GM, Ford and the others they have to kind

699
00:35:05,880 --> 00:35:09,320
Speaker 4: of balance how do we make EV's cost less while

700
00:35:09,440 --> 00:35:12,320
Speaker 4: keeping you know, workers happy, while still making a profit.

701
00:35:12,320 --> 00:35:14,440
Speaker 4: It's a lot of balls to juggle, So you could

702
00:35:14,440 --> 00:35:16,800
Speaker 4: see why UAW wants to kind of make a stand

703
00:35:16,920 --> 00:35:19,160
Speaker 4: and take the issue there. That being said, there is

704
00:35:19,200 --> 00:35:21,239
Speaker 4: the counter tension that if there is a kind of

705
00:35:21,280 --> 00:35:24,520
Speaker 4: prolonged issue or worker problem that Tesla is still here.

706
00:35:24,600 --> 00:35:26,920
Speaker 4: They don't unionize their workers and they're still trying to

707
00:35:26,960 --> 00:35:29,480
Speaker 4: get market share. So I think you'll have those two

708
00:35:29,560 --> 00:35:31,880
Speaker 4: kind of issues in tension and we'll see where it lands.

709
00:35:32,040 --> 00:35:35,640
Speaker 1: Now just on the sort of challenge that GM and

710
00:35:35,680 --> 00:35:39,400
Speaker 1: Ford are going to have instillants, I guess in these negotiations,

711
00:35:39,400 --> 00:35:42,480
Speaker 1: like part of it is like EV's don't have as

712
00:35:42,480 --> 00:35:44,200
Speaker 1: many parts, right, And we sort of hit on this

713
00:35:44,280 --> 00:35:46,880
Speaker 1: earlier and they're less complex. And I remember reading about

714
00:35:46,880 --> 00:35:48,719
Speaker 1: this a couple of years ago. There was this great

715
00:35:48,719 --> 00:35:52,600
Speaker 1: Business Week story about Germany and like the conversion. They're like,

716
00:35:52,960 --> 00:35:55,719
Speaker 1: they're just simpler machines, and right, like can you talk

717
00:35:55,760 --> 00:35:57,960
Speaker 1: a little bit about the sort of manufacturing aspect and

718
00:35:58,040 --> 00:36:00,960
Speaker 1: like they you know, they just it's like the you know,

719
00:36:01,000 --> 00:36:02,400
Speaker 1: the battery and a couple other things.

720
00:36:02,239 --> 00:36:06,480
Speaker 4: Right, yeah, exactly, there's simpler machines and especially you know,

721
00:36:06,520 --> 00:36:08,880
Speaker 4: we do a lot of price parity research at BNF

722
00:36:08,920 --> 00:36:12,040
Speaker 4: and we it changes depending on the battery size and

723
00:36:12,200 --> 00:36:14,319
Speaker 4: you know, how long range your electric vehicle will go.

724
00:36:14,600 --> 00:36:17,400
Speaker 4: But we see by mid decade twenty twenty five in

725
00:36:17,560 --> 00:36:21,280
Speaker 4: European markets through the late twenty twenties in the US,

726
00:36:21,320 --> 00:36:24,000
Speaker 4: depending on your segment of reaching that upfront price parody.

727
00:36:24,400 --> 00:36:25,960
Speaker 4: It's a lot of it is just figuring out the

728
00:36:26,000 --> 00:36:29,200
Speaker 4: battery component aspect of it and building up those battery plants.

729
00:36:29,520 --> 00:36:32,200
Speaker 4: But yes, there's less maintenance costs, which a lot of

730
00:36:32,320 --> 00:36:35,040
Speaker 4: dealers have been concerned about the battery portion, you know,

731
00:36:35,040 --> 00:36:37,120
Speaker 4: figuring out how to recycle that is going to be

732
00:36:37,160 --> 00:36:39,480
Speaker 4: a key question. We don't do it any f any

733
00:36:39,560 --> 00:36:42,839
Speaker 4: like labor specific research, but what I can say is that,

734
00:36:43,239 --> 00:36:45,400
Speaker 4: you know, the other industry is going to look different.

735
00:36:45,480 --> 00:36:47,640
Speaker 4: It's not going to be as much focused on, you know,

736
00:36:47,680 --> 00:36:50,600
Speaker 4: those smaller aspects of an internal combustion engine. It might

737
00:36:50,640 --> 00:36:53,720
Speaker 4: be more jobs, or more focused on the charging network,

738
00:36:54,000 --> 00:36:56,759
Speaker 4: on balancing out the charging network through utilities, kind of

739
00:36:56,800 --> 00:36:58,880
Speaker 4: shifting people around. But yes, it's the core kind of

740
00:36:58,920 --> 00:37:01,520
Speaker 4: automotive worker. It's going to look a bit different in

741
00:37:01,600 --> 00:37:04,080
Speaker 4: terms of what offerings you know, you know, what they're

742
00:37:04,080 --> 00:37:06,319
Speaker 4: going to actually be producing. But it has to be

743
00:37:06,360 --> 00:37:08,600
Speaker 4: different if evs are going to take off, and if

744
00:37:08,640 --> 00:37:11,239
Speaker 4: you're going to meet those climate targets. You know, and

745
00:37:11,520 --> 00:37:13,239
Speaker 4: EV's are a part of that story as well. We've

746
00:37:13,239 --> 00:37:15,880
Speaker 4: talked about the It's interesting because evs are both kind

747
00:37:15,920 --> 00:37:18,359
Speaker 4: of fun in terms of analyzing the car market. Cars

748
00:37:18,360 --> 00:37:20,600
Speaker 4: are always a good time, but there is a climate

749
00:37:20,600 --> 00:37:22,880
Speaker 4: benefit here too, which is why you know, you're switching

750
00:37:22,920 --> 00:37:25,080
Speaker 4: over from gas cars that lose a lot of that

751
00:37:25,160 --> 00:37:27,920
Speaker 4: energy to the atmosphere versus EV's that are much more efficient.

752
00:37:28,200 --> 00:37:30,759
Speaker 3: I have a related question, but more from the China side.

753
00:37:30,880 --> 00:37:36,000
Speaker 3: You know, we're talking about BYD's stunning rise in recent

754
00:37:36,080 --> 00:37:39,520
Speaker 3: years and basically like a lot of the success story

755
00:37:39,680 --> 00:37:44,160
Speaker 3: of Chinese EV manufacturing, But what are the risk factors here?

756
00:37:44,239 --> 00:37:48,120
Speaker 3: Like what could slow that industry down in the foreseeable future?

757
00:37:48,200 --> 00:37:51,480
Speaker 3: What would make Warren Buffett orry about his BYD position.

758
00:37:51,800 --> 00:37:53,319
Speaker 4: I don't know if I'm a position to tell Warren

759
00:37:53,320 --> 00:37:56,600
Speaker 4: Buffett what to or not to worry. One more stat

760
00:37:56,600 --> 00:37:58,400
Speaker 4: I want to give you just on the EV dominance

761
00:37:58,400 --> 00:38:00,359
Speaker 4: of BYD in Tesla and then I'll get to your

762
00:38:00,440 --> 00:38:04,279
Speaker 4: question Tracy. But basically, if you look at BYD and

763
00:38:04,320 --> 00:38:07,120
Speaker 4: Tesla combined last year, they were about thirty percent of

764
00:38:07,160 --> 00:38:10,759
Speaker 4: all global electric vehicle sales. And you know, BID in

765
00:38:10,840 --> 00:38:13,400
Speaker 4: the first quarter of this year was about twenty one

766
00:38:13,480 --> 00:38:15,799
Speaker 4: percent of global EV sales and then Tesla was about

767
00:38:15,800 --> 00:38:18,640
Speaker 4: sixteen point five. So they went up from full year

768
00:38:18,719 --> 00:38:21,360
Speaker 4: twenty twenty two about thirty percent of the market and

769
00:38:21,400 --> 00:38:24,279
Speaker 4: the first quarter this year about thirty eight percent in

770
00:38:24,400 --> 00:38:26,879
Speaker 4: terms of risk. And I think the India story gets it.

771
00:38:27,239 --> 00:38:30,400
Speaker 4: You know, BID has been moving really fast and operating

772
00:38:30,480 --> 00:38:32,680
Speaker 4: under the radar. Now people are paying attention, and I

773
00:38:32,680 --> 00:38:35,080
Speaker 4: think one thing maybe to take away from our conversation

774
00:38:35,120 --> 00:38:37,040
Speaker 4: today is that if you haven't heard of BYD before,

775
00:38:37,080 --> 00:38:39,239
Speaker 4: maybe go google them and look them up and see

776
00:38:39,239 --> 00:38:41,520
Speaker 4: their rise. What it means is, you know there might

777
00:38:41,520 --> 00:38:43,840
Speaker 4: be more of that brand value and upside, but you

778
00:38:43,840 --> 00:38:46,960
Speaker 4: know companies or countries could be more wary and taking

779
00:38:46,960 --> 00:38:50,040
Speaker 4: them seriously as a competitor. In terms of the overall

780
00:38:50,120 --> 00:38:53,200
Speaker 4: issues with the EV market in China and elsewhere, I

781
00:38:53,200 --> 00:38:56,280
Speaker 4: think it's the same challenges of getting consumers to buy,

782
00:38:56,560 --> 00:38:59,600
Speaker 4: you know, a newer product. The charging concerns even you

783
00:38:59,600 --> 00:39:02,560
Speaker 4: know outdid side of the US remain paramount. How do

784
00:39:02,600 --> 00:39:05,640
Speaker 4: you reach consumers who may want to go further in

785
00:39:05,719 --> 00:39:07,719
Speaker 4: newer markets? How do you trust a new brand that

786
00:39:07,760 --> 00:39:10,200
Speaker 4: you may not have seen before, like in Europe. But

787
00:39:10,400 --> 00:39:14,040
Speaker 4: again China has U and Chinese companies have done quite

788
00:39:14,080 --> 00:39:16,440
Speaker 4: well by getting out and getting that early move advantage.

789
00:39:16,520 --> 00:39:19,480
Speaker 4: We haven't talked too much about CATL today, but they

790
00:39:19,480 --> 00:39:21,120
Speaker 4: are an important part of this tell us.

791
00:39:21,440 --> 00:39:24,040
Speaker 1: We've talked we CETL has come up on some of

792
00:39:24,040 --> 00:39:28,160
Speaker 1: our battery episodes, but in the context of this specific conversation,

793
00:39:28,600 --> 00:39:30,239
Speaker 1: what should listeners know about.

794
00:39:30,000 --> 00:39:33,040
Speaker 4: C ATL CTL has a lot of battery know how

795
00:39:33,120 --> 00:39:36,279
Speaker 4: and wherewith all their the leading battery manufacturer globally. They

796
00:39:36,280 --> 00:39:38,960
Speaker 4: have partnerships with Ford, and that's going to allow Ford

797
00:39:39,000 --> 00:39:41,160
Speaker 4: to be able to, assuming that the factory is built

798
00:39:41,200 --> 00:39:44,400
Speaker 4: and all goes well, to sell vehicles with lithian ion

799
00:39:44,400 --> 00:39:48,080
Speaker 4: phosphate LFP that may go a shorter range than the

800
00:39:48,120 --> 00:39:51,799
Speaker 4: traditional batteries you see here, but offers, you know, more

801
00:39:51,960 --> 00:39:54,680
Speaker 4: variety in terms of what consumers can expect. I think

802
00:39:54,680 --> 00:39:56,200
Speaker 4: it's going to be kind of interesting in a couple

803
00:39:56,239 --> 00:39:59,160
Speaker 4: of years. You know, maybe savvy consumers will say, hey,

804
00:39:59,200 --> 00:40:02,680
Speaker 4: I bought a Ford Maki with LFP, or oh I

805
00:40:02,680 --> 00:40:06,600
Speaker 4: have a long range Maki that has a traditional NMC

806
00:40:06,840 --> 00:40:10,200
Speaker 4: which is you know, wonky battery talk that acts differently.

807
00:40:10,400 --> 00:40:14,319
Speaker 4: But ultimately, because of Ford's partnership and licensing that technology,

808
00:40:14,560 --> 00:40:17,000
Speaker 4: they have access to it. And there's a great Bloomberg

809
00:40:17,040 --> 00:40:19,880
Speaker 4: piece by BN, a great reporter who looked at the

810
00:40:19,960 --> 00:40:22,439
Speaker 4: kind of history of LP which has moved between US

811
00:40:22,480 --> 00:40:25,000
Speaker 4: and China, who actually kind of has been investing in it.

812
00:40:25,440 --> 00:40:28,160
Speaker 4: But CATL has been a kind of pioneer in that space,

813
00:40:28,200 --> 00:40:30,759
Speaker 4: and Tesla wants to partner with them. Everyone's trying to

814
00:40:30,760 --> 00:40:32,200
Speaker 4: figure out and this is maybe a good time to

815
00:40:32,280 --> 00:40:36,120
Speaker 4: drop an IRA provision around foreign entities of concern which

816
00:40:36,160 --> 00:40:38,000
Speaker 4: is the kind of last shoe to drop around the

817
00:40:38,040 --> 00:40:41,600
Speaker 4: EV tax credit, the seventy five hundred, basically within the

818
00:40:41,640 --> 00:40:46,000
Speaker 4: Inflation Reduction Act. Senator Mansion was adamant that cars basically

819
00:40:46,040 --> 00:40:49,440
Speaker 4: from these foreign entities of concerns shouldn't be subsidized. So

820
00:40:50,000 --> 00:40:53,760
Speaker 4: Ford Caatl's arrangement is a way of maybe getting around

821
00:40:53,760 --> 00:40:56,799
Speaker 4: that provision. It hasn't been defined by the Treasury Department yet,

822
00:40:57,080 --> 00:40:58,680
Speaker 4: but I know when we speak to clients there's a

823
00:40:58,680 --> 00:41:01,560
Speaker 4: lot of anxiety around if we have a small portion

824
00:41:01,640 --> 00:41:04,960
Speaker 4: of our EV battery that comes from China or or

825
00:41:05,239 --> 00:41:07,960
Speaker 4: really China, Russia and Iran are thrown in the kind

826
00:41:07,960 --> 00:41:11,399
Speaker 4: of foreign nentities concerned kind of thought process. But really

827
00:41:11,400 --> 00:41:14,120
Speaker 4: this is about China. Folks are concerned about does that

828
00:41:14,120 --> 00:41:16,080
Speaker 4: mean we won't have an EV subsidy anymore? You know,

829
00:41:16,160 --> 00:41:18,600
Speaker 4: how low of a threshold does it take to trigger

830
00:41:18,640 --> 00:41:21,959
Speaker 4: that provision. It's something for folks to keep an eye on. Automakers,

831
00:41:22,160 --> 00:41:24,960
Speaker 4: Joe to your earlier point, are really beginning to look

832
00:41:24,960 --> 00:41:27,200
Speaker 4: at their supply chain. And we've seen many announcements by

833
00:41:27,239 --> 00:41:29,279
Speaker 4: GM and four to say, oh we're going to be

834
00:41:29,280 --> 00:41:33,080
Speaker 4: sourcing you know, these metals from here, and so this

835
00:41:33,120 --> 00:41:35,880
Speaker 4: is one outstanding part as a big picture almost returning

836
00:41:35,920 --> 00:41:38,880
Speaker 4: to our earlier point, how close do automakers want to

837
00:41:38,920 --> 00:41:41,720
Speaker 4: work with China or how close can they work with China?

838
00:41:42,000 --> 00:41:44,640
Speaker 4: And on flip side, you know, will China because of

839
00:41:44,680 --> 00:41:48,000
Speaker 4: that kind of built up early advantage, really needs subsidies

840
00:41:48,000 --> 00:41:50,160
Speaker 4: to compete here, it's an ongoing story. It's going to

841
00:41:50,160 --> 00:41:51,640
Speaker 4: be a lot of honestly a lot of fun to

842
00:41:51,640 --> 00:41:52,560
Speaker 4: watch it unfold here.

843
00:41:52,800 --> 00:41:54,680
Speaker 1: I just have one last question, and you know, Tracy

844
00:41:54,680 --> 00:41:56,319
Speaker 1: asked about risks, and so that was.

845
00:41:56,239 --> 00:41:57,560
Speaker 2: Where my head went to.

846
00:41:58,120 --> 00:42:00,960
Speaker 1: You know, like battery tech is not settled right like

847
00:42:01,000 --> 00:42:03,200
Speaker 1: you even just described it just now. There's like multiple

848
00:42:03,239 --> 00:42:06,279
Speaker 1: different kinds maybe solid state batteries that can be some

849
00:42:06,360 --> 00:42:09,160
Speaker 1: great breakthrough even though supposedly like they've been working on

850
00:42:09,160 --> 00:42:11,000
Speaker 1: that for like a hundred years or something like that.

851
00:42:11,400 --> 00:42:13,640
Speaker 1: And then you have other entities that are not even

852
00:42:13,680 --> 00:42:16,239
Speaker 1: one hundred percent sold on evs. I think like Toyota,

853
00:42:16,280 --> 00:42:19,280
Speaker 1: for example, is not actually like completely convinced that evs

854
00:42:19,280 --> 00:42:22,080
Speaker 1: are the future. I think there's still have a dipping

855
00:42:22,080 --> 00:42:25,160
Speaker 1: a toe in hydrogen powered vehicles and there's some optimism there.

856
00:42:25,239 --> 00:42:26,239
Speaker 2: I think Joe Manchin likes.

857
00:42:26,239 --> 00:42:29,120
Speaker 1: Hydrogen powered vehicles. Can you just talk a little bit about, like,

858
00:42:29,160 --> 00:42:32,839
Speaker 1: when you think about risks, the possibility that like we

859
00:42:32,880 --> 00:42:36,440
Speaker 1: don't actually know yet or maybe we do, but the

860
00:42:36,480 --> 00:42:38,960
Speaker 1: possibility that the future is sort of uncertain about what

861
00:42:39,000 --> 00:42:39,680
Speaker 1: we'll be driving.

862
00:42:40,040 --> 00:42:42,480
Speaker 4: Yeah, I think that's what makes the EV space really exciting.

863
00:42:42,880 --> 00:42:45,360
Speaker 4: One analogy I like to use a lot when speaking

864
00:42:45,440 --> 00:42:48,879
Speaker 4: with subscribers to be any fit is when you look

865
00:42:48,880 --> 00:42:51,719
Speaker 4: at the current automotive market, you're really relying on a

866
00:42:51,719 --> 00:42:54,680
Speaker 4: few different gasoline types. Right in Europe they have more diesel.

867
00:42:54,719 --> 00:42:56,279
Speaker 4: I was just in Europe, you know, we filled up

868
00:42:56,280 --> 00:42:59,600
Speaker 4: on diesel when taking a nice little drive through Portugal.

869
00:43:00,040 --> 00:43:02,440
Speaker 4: In the US you have ethanol, you know, different mixes

870
00:43:02,440 --> 00:43:05,920
Speaker 4: of gasoline. But that's it. The EV industry, if done correctly,

871
00:43:06,000 --> 00:43:09,560
Speaker 4: can have many different battery types. A common criticism of

872
00:43:09,600 --> 00:43:12,960
Speaker 4: evs is that you're using cobalt in NMC batteries. With

873
00:43:13,160 --> 00:43:16,400
Speaker 4: LFP there's no cobalt and no nickel. Lithium is the

874
00:43:16,520 --> 00:43:18,800
Speaker 4: kind of key mineral in many of these EV batteries

875
00:43:18,800 --> 00:43:21,439
Speaker 4: and will continue to be important moving forward. But what's

876
00:43:21,440 --> 00:43:23,080
Speaker 4: exciting about this is we don't know what the future

877
00:43:23,120 --> 00:43:25,759
Speaker 4: looks like. If automakers can kind of leap frog into

878
00:43:25,800 --> 00:43:29,000
Speaker 4: solid state or other type of battery chemistries, you know,

879
00:43:29,080 --> 00:43:31,319
Speaker 4: you can create new supply chains and a potential new

880
00:43:31,320 --> 00:43:34,400
Speaker 4: competitive advantage even if you're behind, you know, like a

881
00:43:34,480 --> 00:43:38,279
Speaker 4: Toyota or other you know, Japanese automakers have been that

882
00:43:38,400 --> 00:43:41,320
Speaker 4: being said, I think the big takeaway from our conversation

883
00:43:41,440 --> 00:43:44,520
Speaker 4: and watching both Tesla and BYD is that you can't

884
00:43:44,560 --> 00:43:47,279
Speaker 4: completely make up ground because Tesla and BID are also

885
00:43:47,440 --> 00:43:50,319
Speaker 4: looking into the same next gen battery technologies. You know,

886
00:43:50,400 --> 00:43:53,120
Speaker 4: certain automakers may say, oh, we're looking into this, We're

887
00:43:53,120 --> 00:43:55,600
Speaker 4: going to leap frog. It's easier said than done, and

888
00:43:55,680 --> 00:44:00,319
Speaker 4: ultimately producing evs at scale is a challenge. Making cars

889
00:44:00,400 --> 00:44:02,680
Speaker 4: is not easy, but if you kind of work through

890
00:44:02,680 --> 00:44:04,919
Speaker 4: the process and you really focus on it, these two

891
00:44:04,920 --> 00:44:07,520
Speaker 4: companies show that there is you know, success waiting and

892
00:44:07,560 --> 00:44:10,440
Speaker 4: improvements to be made. So, you know, sum up on

893
00:44:10,480 --> 00:44:13,239
Speaker 4: the question, there is a lot uncertain and really you know,

894
00:44:13,280 --> 00:44:16,360
Speaker 4: there's recessions. There's other black Swan events. Even Russia's invasion

895
00:44:16,360 --> 00:44:19,719
Speaker 4: of Ukraine had an impact on the commodity costs of

896
00:44:19,760 --> 00:44:23,480
Speaker 4: the materials that went into batteries, increasing the overall battery

897
00:44:23,680 --> 00:44:25,799
Speaker 4: cost in our survey for the first time in the

898
00:44:25,840 --> 00:44:28,080
Speaker 4: ten years that we had been doing it between twenty

899
00:44:28,120 --> 00:44:31,200
Speaker 4: one and twenty twenty two. But there's also potential upside

900
00:44:31,200 --> 00:44:33,279
Speaker 4: moving forward, and that's something that we on the EV

901
00:44:33,400 --> 00:44:36,719
Speaker 4: team at BNEF track every quarter, every week, every day.

902
00:44:37,760 --> 00:44:40,759
Speaker 1: Corey Kanter Bloomberg and you thank you so much for

903
00:44:40,880 --> 00:44:42,920
Speaker 1: coming on odd lots. We really needed to do that

904
00:44:42,960 --> 00:44:43,840
Speaker 1: episode that I.

905
00:44:43,920 --> 00:44:46,200
Speaker 3: Learned a lot, thanks for that was super interesting.

906
00:44:46,320 --> 00:45:01,400
Speaker 2: Yeah, that was great, Tracy.

907
00:45:01,480 --> 00:45:03,360
Speaker 1: I really enjoyed that conversation.

908
00:45:03,440 --> 00:45:04,120
Speaker 2: I learned a lot.

909
00:45:04,200 --> 00:45:06,160
Speaker 1: You know, I want to just in terms of my thoughts,

910
00:45:06,239 --> 00:45:07,759
Speaker 1: I kind of like want to start like at the

911
00:45:07,840 --> 00:45:10,480
Speaker 1: very last point that Corey made that like, you know,

912
00:45:10,640 --> 00:45:12,440
Speaker 1: this is such a key theme for us, the sort

913
00:45:12,480 --> 00:45:16,080
Speaker 1: of like learning by experience, learning by doing, et cetera.

914
00:45:16,280 --> 00:45:19,239
Speaker 1: And this idea that like even if the future of

915
00:45:19,400 --> 00:45:23,000
Speaker 1: like battery tech is still TBD and it's probably going

916
00:45:23,040 --> 00:45:25,480
Speaker 1: to keep evolving for the rest of our lives, that

917
00:45:25,560 --> 00:45:28,000
Speaker 1: like it's really hard to just leapfrog anyone. Like if

918
00:45:28,000 --> 00:45:32,960
Speaker 1: you have the experience already building high performance EV batteries,

919
00:45:33,200 --> 00:45:35,520
Speaker 1: you're probably going to be better at it than some

920
00:45:35,560 --> 00:45:38,120
Speaker 1: other entity that's starting today who like imagines they're going

921
00:45:38,200 --> 00:45:38,880
Speaker 1: to leapfrog you.

922
00:45:39,600 --> 00:45:43,400
Speaker 3: Well, I learned a new word, which is coopetition, and

923
00:45:43,480 --> 00:45:46,640
Speaker 3: maybe that maybe that speaks to some of the idiosyncrasies

924
00:45:46,800 --> 00:45:50,759
Speaker 3: around battery making as an industry. But this idea that

925
00:45:50,840 --> 00:45:53,200
Speaker 3: you know, if you can't leap frog your way into

926
00:45:53,239 --> 00:45:56,600
Speaker 3: this technology, then maybe it makes sense to partner with

927
00:45:56,640 --> 00:45:59,560
Speaker 3: a company that has some expertise in it, even if

928
00:45:59,560 --> 00:46:03,239
Speaker 3: they are ostensibly in a country with which you might

929
00:46:03,280 --> 00:46:06,080
Speaker 3: have some sort of trade or geopolitical tensions at the moment.

930
00:46:06,239 --> 00:46:09,000
Speaker 1: Well, and also to Corey's point, like, you know, a

931
00:46:09,040 --> 00:46:11,520
Speaker 1: big story for the rest of the world and China

932
00:46:11,560 --> 00:46:14,839
Speaker 1: in particular over the last several decades was the sort

933
00:46:14,880 --> 00:46:18,520
Speaker 1: of their importation of America, know how of like various

934
00:46:18,520 --> 00:46:21,440
Speaker 1: tech right and like companies setting up domestic jvs and

935
00:46:21,480 --> 00:46:25,480
Speaker 1: that tech transfer process, et cetera. Historically that hasn't gone

936
00:46:25,480 --> 00:46:28,480
Speaker 1: in the other direction so much. But the US is

937
00:46:28,600 --> 00:46:32,480
Speaker 1: behind on battery tech. There are these subsidies and so

938
00:46:32,640 --> 00:46:34,960
Speaker 1: to the extent that like the US is sort of

939
00:46:35,000 --> 00:46:38,160
Speaker 1: like our shot is like sort of partnering with foreign

940
00:46:38,280 --> 00:46:41,280
Speaker 1: non US battery makers, like importing that, know how, learning

941
00:46:41,320 --> 00:46:44,799
Speaker 1: from them. That seems like part of how the US could,

942
00:46:44,800 --> 00:46:47,120
Speaker 1: at least in theory, be a major player.

943
00:46:47,560 --> 00:46:49,839
Speaker 3: Yeah, but it is going to be interesting to see

944
00:46:49,880 --> 00:46:53,960
Speaker 3: whether or not it continues in the current landscape. So yes,

945
00:46:54,000 --> 00:46:56,160
Speaker 3: it kind of makes sense for the past few years.

946
00:46:56,640 --> 00:47:00,840
Speaker 3: But with the IRA underway, with some of the tensions

947
00:47:00,920 --> 00:47:05,040
Speaker 3: arising in Europe, I do wonder whether or not those

948
00:47:05,120 --> 00:47:08,760
Speaker 3: types of partnerships that have really helped sort of spring

949
00:47:08,840 --> 00:47:13,000
Speaker 3: load or jumpstart China's EV industry whether or not they're

950
00:47:13,040 --> 00:47:16,239
Speaker 3: going to continue at the same pace that they have previously.

951
00:47:16,640 --> 00:47:19,440
Speaker 1: Yeah, there's so much money in it, Like it's just like, no,

952
00:47:19,600 --> 00:47:21,759
Speaker 1: that's like everything. Every time I hear about how they

953
00:47:21,800 --> 00:47:25,360
Speaker 1: design the IRA, it's like they're just like absolutely spray

954
00:47:25,400 --> 00:47:27,680
Speaker 1: hosing cash at all this and so I feel like

955
00:47:27,680 --> 00:47:29,920
Speaker 1: when you see all these announcements, it's like no one

956
00:47:29,960 --> 00:47:32,319
Speaker 1: wants to avoid that money. Everyone everyone wants to get

957
00:47:32,320 --> 00:47:34,800
Speaker 1: in front of it. Like I'm imagining those like boxes

958
00:47:34,800 --> 00:47:35,880
Speaker 1: where the dollars fly.

959
00:47:35,800 --> 00:47:37,600
Speaker 3: Around and everyone just sort of like everyone grabbing.

960
00:47:37,640 --> 00:47:40,400
Speaker 2: That's sort of how I think of like IRA's.

961
00:47:39,960 --> 00:47:45,040
Speaker 3: Joe's mental framework of industrial policy.

962
00:47:44,680 --> 00:47:48,480
Speaker 1: Like a telephone booth of swirling dollars and all these companies.

963
00:47:48,080 --> 00:47:48,680
Speaker 2: Trying to catch it.

964
00:47:49,680 --> 00:47:50,520
Speaker 3: Shall we leave it there?

965
00:47:50,600 --> 00:47:51,239
Speaker 2: Let's leave it there?

966
00:47:51,320 --> 00:47:54,840
Speaker 3: Okay, this has been another episode of the All Thoughts podcast.

967
00:47:54,920 --> 00:47:57,239
Speaker 3: I'm Tracy Alloway. You can follow me on Twitter at

968
00:47:57,320 --> 00:47:58,080
Speaker 3: Tracy Alloway.

969
00:47:58,280 --> 00:48:01,120
Speaker 1: And I'm Joe Wisenthal. You can follow me on Twitter

970
00:48:01,200 --> 00:48:04,359
Speaker 1: at the Stalwart. Follow our guest Corey Canter. He's at

971
00:48:04,480 --> 00:48:07,600
Speaker 1: Corey b cantor check out all of his work, great

972
00:48:07,640 --> 00:48:10,160
Speaker 1: stuff by him and his team over at Bloomberg and

973
00:48:10,280 --> 00:48:14,120
Speaker 1: ef really tracking this data well. Follow our producers Carmen

974
00:48:14,239 --> 00:48:17,759
Speaker 1: Rodriguez at Carmen Arman and dash Ol Bennett at dashbot.

975
00:48:18,000 --> 00:48:20,440
Speaker 1: And check out all of our podcasts onto the handle

976
00:48:20,520 --> 00:48:23,800
Speaker 1: at podcasts. And for more Oddlots content, go to Bloomberg

977
00:48:23,840 --> 00:48:27,080
Speaker 1: dot com slash odd Lots, where we post transcripts. We

978
00:48:27,120 --> 00:48:31,040
Speaker 1: have a blog and a newsletter. And check out the Discord.

979
00:48:31,120 --> 00:48:33,279
Speaker 1: We have a whole room. We talk about transport, we

980
00:48:33,280 --> 00:48:36,680
Speaker 1: talk about energy, all of these topics. Actively discuss twenty

981
00:48:36,719 --> 00:48:40,080
Speaker 1: four to seven Discord dot gg slash od lots.

982
00:48:40,200 --> 00:48:43,640
Speaker 3: Yeah, and if you enjoy odd Lots, if you like

983
00:48:44,040 --> 00:48:47,800
Speaker 3: conversations about Chinese ev and competition with the rest of

984
00:48:47,840 --> 00:48:51,560
Speaker 3: the world. Then please leave us a positive review on

985
00:48:51,680 --> 00:48:54,080
Speaker 3: your favorite podcast platform. Thanks for listening.

986
00:49:15,440 --> 00:49:15,920
Speaker 1: Benea