Speaker 1: A historic transition is in the works that shifting from
Speaker 1: the century of the combustion engine to the time of
Speaker 1: electric vehicles. This transformation is affecting consumers and businesses alike.
Speaker 1: US consumers bought nearly three hundred thousand new battery electric
Speaker 1: vehicles in the second quarter of twenty twenty three. In
Speaker 1: the race to dominate the EV global market, China is
Speaker 1: the standout. It makes over eighty percent of the world's
Speaker 1: lithium iron batteries that power such vehicles, but the US
Speaker 1: is keen to be competitive too. President Joe Biden's Inflation
Speaker 1: Reduction Act aims to bring more EV manufacturing back to
Speaker 1: the US and its trading partners.
Speaker 2: That massive new spending bill also set to boost sales
Speaker 2: of electric vehicles. It includes hundreds of billions of dollars
Speaker 2: to address climate change one program new tax breaks for
Speaker 2: electric vehicles.
Speaker 1: Bloomberg's Colin Mckerrika and Malcolm Scott report that this is
Speaker 1: the dawn of the EV era, and the stakes are
Speaker 1: incredibly high.
Speaker 3: When we look at the EV sales figures in the
Speaker 3: most recent month, about a third of all vehicles sold
Speaker 3: in China, in the largest vehicle market in the world,
Speaker 3: are plugins, and about twenty five percent of those are
Speaker 3: purely electric. This is happening really fast now in the
Speaker 3: largest auto market in the world.
Speaker 4: It's all about tensions not just between US and China,
Speaker 4: but tensions between labor groups, tensions between parts of society
Speaker 4: that this transition is causing.
Speaker 1: I'm your host today, Roslin Matheson today on the big take.
Speaker 1: The electric vehicle revolution is here and it's shaking up.
Speaker 5: The global economy.
Speaker 1: Malcolm, I'll start with you because you write in this
Speaker 1: important story that the world is going through what you
Speaker 1: call a historic transition from internal combustion engines to electric
Speaker 1: powered vehicles. Can you just begin by giving us an
Speaker 1: overview of what's happening.
Speaker 4: So, the world economy has been set up for about
Speaker 4: one hundred years based on internal combustion engine supply chains.
Speaker 4: That is all changing very rapidly right before our very eyes.
Speaker 4: At the moment. Of course, those legacy automakers are still around,
Speaker 4: They're still churning out the gas guzzling cars. But the
Speaker 4: Chinese have really made the world stand up and notice
Speaker 4: that this transition to EV sales and EV adoption is
Speaker 4: happening quickly, and it's happening right now, so right across
Speaker 4: the world economy, we're starting to see these changes in
Speaker 4: supply chains already play out. And it's just the start
Speaker 4: of what's going to be a decades long process that
Speaker 4: will revolutionize parts of the global economy.
Speaker 1: And it is happening really really fast. But what's behind
Speaker 1: it happening so quickly? Is it demand to people just
Speaker 1: want to drive electric vehicles because of the environment, because
Speaker 1: of cost. What are the main things that are pushing
Speaker 1: this rapid shift.
Speaker 4: I guess there's the demand side. People have realized that
Speaker 4: these cars are actually pretty cool. Tesla's helped us learn that.
Speaker 4: But then on the technology side, the battery side's become
Speaker 4: so much better. And that's call in space where he
Speaker 4: can maybe talk about some of those changes on the
Speaker 4: battery technology front.
Speaker 3: Yeah, I mean, this is something we've been tracking for
Speaker 3: over a decade at Bloomberg New Energy Finance Bloomberg and
Speaker 3: EF and one of the things that you can really
Speaker 3: see is that battery prices have plummeted. They've gone from
Speaker 3: over one thousand dollars a kill a one hour to
Speaker 3: about one hundred and forty dollars one hundred and fifty
Speaker 3: dollars a kilo one hour over the last decade. There
Speaker 3: is a consumer adoption consumer interest angle, but there's a
Speaker 3: really big technology story here, and it's one of the
Speaker 3: most remarkable technology stories of our time, and that is
Speaker 3: that it has gotten much cheaper to store power in
Speaker 3: a battery over the last decade. And not only has
Speaker 3: it gotten cheaper, the batteries themselves have gotten much better,
Speaker 3: better energy density, better cycle life, better safety. All of
Speaker 3: these things are a big part of what's enabling this
Speaker 3: EV story to take off.
Speaker 1: It's interesting you're talking about those confluence of factors all
Speaker 1: coming together at once in a way to create the
Speaker 1: environment for this. But mal you mentioned one country in particular,
Speaker 1: China already the standout lead in the EV race. How
Speaker 1: did it get in front so quickly? What gave them
Speaker 1: this advantage?
Speaker 4: Short answer is it's a mix of government subsidies, tax breaks,
Speaker 4: and you know, China doing what China does, deciding we
Speaker 4: want to dominate this space, and then going all in.
Speaker 4: You know, it started in the early two thousands, really
Speaker 4: before many of the Western countries saw the potential I
Speaker 4: guess of what we're seeing today. Into the twenty tens,
Speaker 4: I think there was a real acceleration in China, maybe
Speaker 4: some recognition that it was going to be tough to
Speaker 4: take on the Japanese legacy automakers, the Americans, the Europeans
Speaker 4: in their own game, so maybe EV's was an area
Speaker 4: where they could perhaps leapfrog to some extent. Into the
Speaker 4: mid twenty tens, you had the China twenty twenty five
Speaker 4: Industrial Policies outlined where they decided, hey, we want to
Speaker 4: move our economy away from this low end manufacturing gig
Speaker 4: that's fueled their rise to that date and beca i'm
Speaker 4: an economy moving up the value chain where more of
Speaker 4: the value added of what they're selling is made and
Speaker 4: recognized and into the pockets of the Chinese companies doing it.
Speaker 4: And evs were part of that broad technology focus that
Speaker 4: was part of that broad industrial plan. They've also at
Speaker 4: the same time made sure that they had some strength
Speaker 4: in the processing of the minerals that are needed for evs.
Speaker 4: They've dominated on the production side, but also in the
Speaker 4: processing of those minerals.
Speaker 3: I think a lot of people don't realize this, but
Speaker 3: China is by far the largest auto market in the world.
Speaker 3: It is significantly larger than the US or the EU,
Speaker 3: and not only that, but when we look at the
Speaker 3: ev sales figures in the most recent month, about a
Speaker 3: third of all vehicles sold in China, in the largest
Speaker 3: vehicle market in the world, are plugins, and about twenty
Speaker 3: five percent of those are purely electric. So, just to
Speaker 3: underline Belkom's point, this is happening really fast now in
Speaker 3: the largest auto market in the world.
Speaker 1: It's really interesting the way that we talk about it
Speaker 1: both being very fast in a way very slow, because
Speaker 1: it feels like the accelerated in the past year or
Speaker 1: so where everybody's talking about electric vehicles. But now your
Speaker 1: point was that China saw this twenty years ago. By
Speaker 1: comparison the US and Europe, they seem to be catching
Speaker 1: up or trying to catch up. Colin, can you talk
Speaker 1: a little bit about where the US and Europe are
Speaker 1: now and the question is can they catch up?
Speaker 3: About seventeen percent of global vehicle sales this year are
Speaker 3: going to have a plug of some sort, so that's
Speaker 3: plug in hybrids or battery electrics, and only about three
Speaker 3: percent of all the vehicles on the road in the
Speaker 3: world at the end of this year will be electric.
Speaker 3: There's still lots to play for, but China does have
Speaker 3: this really formidable lead. So China accounts for about eighty
Speaker 3: percent of the battery manufacturing capacity in the world today,
Speaker 3: the lithemion battery manufacturing capacity, and in some parts of
Speaker 3: the supply chain upstream from there, it's even more than that.
Speaker 3: So what's happened in the last really the last two
Speaker 3: or three years, is that Europe and North America have decided, actually,
Speaker 3: you know, we don't want to significantly lose this much
Speaker 3: of the auto supply chain and of the cutting edge
Speaker 3: technology that is going to be a big part of
Speaker 3: the next hundred years of the automotive industry and other industries.
Speaker 3: And they've said, look, we want to re onshore more
Speaker 3: of the manufacturing supply chain.
Speaker 6: And so they're making a big push.
Speaker 3: There's a big push going on right now in Europe,
Speaker 3: in North America, and I would say it's being broadly successful.
Speaker 3: There is a significant amount of battery and ev manufacturing
Speaker 3: capacity being built in North America and Europe. It's not
Speaker 3: the scale that China is. So when we look at
Speaker 3: twenty twenty five, look out a few years in twenty
Speaker 3: twenty five, we're still anticipating China to be about seventy
Speaker 3: to seventy two percent. Again, that's down about eighty percent
Speaker 3: today of global battery manufacturing capacity. So the lead is formidable,
Speaker 3: but it is still very early days in this and
Speaker 3: this is a story that's going to play out over
Speaker 3: several decades because there are about one point three billion
Speaker 3: vehicles on the road today and only about forty million
Speaker 3: of those are electric.
Speaker 1: At this point, let's talk about some of the specific
Speaker 1: forecasts from bluebeg NEF. We're not saying billions, we're talking
Speaker 1: trillions here, potentially up for grabs. What are the forecasts
Speaker 1: telling you that you're looking at.
Speaker 3: One thing to note is that global auto sales are
Speaker 3: worth about two point five trillion dollars a year, very
Speaker 3: significant portion of GDP for some countries and a significant
Speaker 3: portion of exports for other countries. And if we just
Speaker 3: take a sort of a step back on where we
Speaker 3: are on this ev question, evs were about one percent
Speaker 3: of sales in twenty seventeen, five percent in twenty twenty.
Speaker 3: This is when everyone starts to notice it a little bit,
Speaker 3: and this year, as they said, around seventeen or eighteen percent.
Speaker 3: When we look a bit further out, we think they
Speaker 3: get to around thirty percent or but a third by
Speaker 3: twenty twenty six, and then just under fifty percent by
Speaker 3: twenty thirty. If you think about that two point five
Speaker 3: trillion dollars a year in annual vehicle sales, a growing
Speaker 3: share of that is going to be electric.
Speaker 5: Colin.
Speaker 1: Let's talk about the US Inflation Reduction Act. Whether the
Speaker 1: US is spending essentially billions to lure produces to or
Speaker 1: back to America. Some critics have called it a subsidy
Speaker 1: in effect for US industry. How might the IRA is
Speaker 1: they call it or IRA play a role when it
Speaker 1: comes to the EV sector in the US.
Speaker 3: Yeah, there's a bunch of different moving pieces around IRATH.
Speaker 3: One of them is around a tax credit for producing batteries.
Speaker 3: So there's a forty five dollars per kilowot hour tax
Speaker 3: credit if you make a battery in the US, and
Speaker 3: that is enough to more than close the gap currently
Speaker 3: with what we see in the difference between batteries produced
Speaker 3: in the US versus in China. So that's meant to
Speaker 3: say this can be a very competitive place to build
Speaker 3: batteries and therefore evs.
Speaker 6: Then there are other things around end consumer subsidies.
Speaker 3: So an income tax credit of seventy five hundred dollars
Speaker 3: for electric vehicles. And then there are a number of
Speaker 3: other provisions that are meant to encourage automakers to retool
Speaker 3: manufacturing plants, and a bunch of other things that are
Speaker 3: designed to look at this whole supply chain altogether. So
Speaker 3: it's a lot of money that the US is mobilizing,
Speaker 3: and in some cases its allies or close friends are
Speaker 3: sort of saying, actually, you're pulling a lot of the
Speaker 3: jobs from other places as well. And that doesn't just
Speaker 3: apply to EV's and batteries. It applies across other areas
Speaker 3: like hydrogen or carbon capture and storage, and a number
Speaker 3: of other parts of what we call the broader energy transition.
Speaker 3: What the move to EV means is that there is
Speaker 3: a large number of very small part suppliers. Those jobs
Speaker 3: are really at risk because a lot of those parts
Speaker 3: and components that go into larger components that eventually go
Speaker 3: into an engine or go into a vehicle, those are
Speaker 3: really at risk in the switch to electric because you
Speaker 3: just won't need as many parts. So I think in
Speaker 3: the supply chain you are probably going to see reduction
Speaker 3: as you move from internal combustion engine to electric vehicle,
Speaker 3: But the big question is where do the battery manufacturing
Speaker 3: jobs go, And that's why there's this big sort of
Speaker 3: fight and this big industrial policy push over the batteries.
Speaker 3: If those can replace what's going on on the job
Speaker 3: losses on the internal combustion engine parts supply side, then
Speaker 3: it's a net neutral or maybe even positive from a
Speaker 3: job's point of view.
Speaker 1: After the break, what are the US and Europe doing
Speaker 1: to keep up with the push for evs? We talked
Speaker 1: earlier about the US and China, but it's also interesting
Speaker 1: to talk some of the key examples around the world
Speaker 1: where this is playing out. So, Malcolm, one of the
Speaker 1: countries that you and your colleagues write about in this
Speaker 1: story is Mexico, which is intriguing because why is Mexico
Speaker 1: so prominent when it comes to electric vehicles.
Speaker 4: Well, Mexico stands to be one of the big winners
Speaker 4: from IRA with those juicy tax credits because they apply
Speaker 4: to cars made there as well, so manufactured right across
Speaker 4: North America, not just the United States of America. So
Speaker 4: you've got General Motors, BMW, Ford, Stilantis, Kia. They're all
Speaker 4: announcing plans to boost and expand their EV production there
Speaker 4: because they want to get in on that game. Tesla
Speaker 4: of course, is building a megafactory in northern state there,
Speaker 4: so you know they want to get in on the game.
Speaker 4: Problem is, China is already there. China is ramping up
Speaker 4: as sales to Mexicans just as Mexico starts to get
Speaker 4: ready to ramp up those sales to North America, to
Speaker 4: the United States. China's already in there. They're selling electric buses,
Speaker 4: they're selling electric taxis, and they're selling a lot of
Speaker 4: cheap internal combustion engines still to Mexico. So so far,
Speaker 4: they're pretty confident that they can keep doing that without
Speaker 4: necessarily causing political tensions. We spoke with BYD America's chief
Speaker 4: Stellar Lee. She said she's not worried about what she
Speaker 4: calls disturbing noise in the media regarding these tensions. She
Speaker 4: thinks that there's going to be so many jobs up
Speaker 4: for grabs. It's going to be new technology brought to Mexico.
Speaker 4: She's betting and maybe China's betting that there's enough to
Speaker 4: go around for both in this case.
Speaker 1: And meanwhile, looking at North America, it's interesting because Canada
Speaker 1: is trying also to push to build a domestic supply
Speaker 1: chain of electric vehicles. We'll see a lot of countries
Speaker 1: try and get this domestic supply chain going.
Speaker 5: Colin how is that going?
Speaker 6: The Canadian government doesn't want to be left out of this.
Speaker 3: Auto manufacturing is a significant portion of jobs in southern
Speaker 3: Ontario and also Quebec, so the Canadian government is also
Speaker 3: making a big push to ensure that batteries are built there.
Speaker 3: So there's been some big announcements there both in Quebec
Speaker 3: and Ontario, and also evs are built there.
Speaker 6: We do this.
Speaker 3: Lithiumion battery supply chain ranking every year at Bloomberg and
Speaker 3: EF and Canada actually comes out quite positively in the
Speaker 3: top few countries, partially because of all the access to
Speaker 3: raw materials it has that can help fuel this battery boom.
Speaker 3: So I think Canada is quite well positioned, and the
Speaker 3: government is providing significant support both at the federal and
Speaker 3: the state level to ensure that jobs aren't lost there
Speaker 3: and that Canada stays at the cutting edge of battery
Speaker 3: and EV manufacturing.
Speaker 6: But there hasn't been.
Speaker 3: That much actually built todate, I should say, so most
Speaker 3: of it is forward looking, at least on the manufacturing side.
Speaker 3: But I do think the Canadian government is very conscious
Speaker 3: that it doesn't want to see all of this new
Speaker 3: capacity end up purely in the US because of the
Speaker 3: Inflation Reduction Act, So it is trying to ensure that
Speaker 3: it's at the table and providing significant support to match
Speaker 3: some of those programs.
Speaker 1: And Malcoln we write in the story about what's called
Speaker 1: the ring of fire, and that's not what we think
Speaker 1: of as kind of the earthquakes and volcanoes that can
Speaker 1: go off around the world, but something else. And why
Speaker 1: is it so important for the manufacturing prospects for Canada
Speaker 1: when it comes to electric vehicles, Well, the.
Speaker 4: Ring of Fire gives them a real shot at mining
Speaker 4: many of these minerals that're so crucial to the batteries. Domestically,
Speaker 4: there's some sixty seven billion dollars worth of these minerals
Speaker 4: that mining companies are estimated to be sitting on. It's
Speaker 4: all about tensions, not just between US and China, but
Speaker 4: tensions between labor groups, tensions between parts of society that
Speaker 4: this transition is causing. Here, it's a tension between two
Speaker 4: green goals. We think that digging up these minerals is
Speaker 4: going to be good in the long run because it's
Speaker 4: going to get rid of these gas guzzling engines and
Speaker 4: help produce nice, clean evs. But on the other side
Speaker 4: of this, there are people pro testing and saying hold on,
Speaker 4: These vast deposits of minerals are also in what's one
Speaker 4: of the world's most effective carbon sinks, and we don't
Speaker 4: want to mess with that. There's also indigenous interests and
Speaker 4: communities that are saying hold on, hold on, let's not
Speaker 4: mess up this pristine green environment. So you know, you've
Speaker 4: got these green goals colliding, and that means there's been
Speaker 4: real delays in the approval of what could be a
Speaker 4: real lifeline to Canada's economy. Bloomberg economist Stuart Paul says
Speaker 4: this could be worth somewhere between two point seventy five
Speaker 4: to four point two five percent of Canada's GDP, So
Speaker 4: this is significant, you know, economy altering stuff that's up
Speaker 4: for grabs here.
Speaker 5: Over in Europe.
Speaker 1: Also, there's another country that stands out also pushing into
Speaker 1: the manufacturing race on electric vehicles, and that's Hungry.
Speaker 4: Our reporter there, Bureau chief Salton Simon in Budapest, has
Speaker 4: done plenty of reporting on the big new battery plant
Speaker 4: that's being built by the Chinese investment there. BMW is
Speaker 4: building a new EV factory in Hungary. So it's interesting
Speaker 4: what's happening in the second largest city in Hungary to Brexen,
Speaker 4: which is traditionally played second fiddle to Budapest, but at
Speaker 4: the moment is something of a boomtown. It's transforming the
Speaker 4: city of around two hundred thousand residents. Home prices are
Speaker 4: surging as workers file in. This is putting Hungry potentially
Speaker 4: on the map to become one of the world's most
Speaker 4: significant battery producers.
Speaker 1: And Colin, what are we drawing from the Bloomberg NIF
Speaker 1: data about that industrial park in Debretzen.
Speaker 3: That Hungary is emerging as one of the clusters and
Speaker 3: that specific region as one of the clusters of the
Speaker 3: new automotive supply chain. And if you look across Europe,
Speaker 3: there's a few of these forming. There's one in sort
Speaker 3: of Hungary and eastern Europe. There's another one in the
Speaker 3: Nordics where a lot of the battery makers are looking
Speaker 3: to try and capitalize on the fact that the grid
Speaker 3: is already supplied by clean electricity, mostly from hydro and
Speaker 3: trying to make a green battery as a result. But
Speaker 3: so these are kind of the new hubs I guess
Speaker 3: if you will, of where it looks like this industry
Speaker 3: is emerging. So Hungary is definitely one of them.
Speaker 1: And Malcolm, is that feeding into any tensions in the region.
Speaker 1: Are we seeing that start to show up when it
Speaker 1: comes to electric vehicles and the competition there for market share?
Speaker 4: There is the threat that nearby neighbors that are still
Speaker 4: very reliant on the internal combustion engine, like the Czech
Speaker 4: republican Slovakia, they get left behind somewhat. The Czech government
Speaker 4: was left scrambling for alternatives. Volkswagen they said that there's
Speaker 4: no business rationale to build a battery factor in the
Speaker 4: country now, or at least for now. So you know,
Speaker 4: there is a risk that as Hungry rises, other nearby
Speaker 4: neighbors that are still maybe stuck with their legacy IC
Speaker 4: engines and supply chains reliant on those start to fade.
Speaker 4: We are still going to see internal combustion engines around
Speaker 4: for a while yet, So this isn't necessarily overnight. It's
Speaker 4: about tapping into the rapid growth of evs. While the
Speaker 4: legacy ICE related manufacturers maybe are all battling for a
Speaker 4: smaller and shrinking pie.
Speaker 1: Coming up a closer look at China's investment in the
Speaker 1: EV market beyond.
Speaker 5: Its own borders.
Speaker 1: We were talking earlier on about Mexico, which is a
Speaker 1: key player in all of this in terms of the
Speaker 1: push for electric vehicles and mal you did talk about
Speaker 1: China's role in that, but Colin, can you just remind listeners,
Speaker 1: how is the approach of China in Mexico different from
Speaker 1: the US approach.
Speaker 3: The Chinese vehicle manufacturers of all types have significant over capacity,
Speaker 3: and that's not just evs, that's also internal combustion engines.
Speaker 3: Vehicle sales in the country have risen dramatically but have
Speaker 3: not continued the same trajectory they were on before the pandemic.
Speaker 3: And what that sort of means is that a lot
Speaker 3: of those manufacturers are then looking to other parts of
Speaker 3: the world and looking to where they can export vehicles to.
Speaker 3: So you're seeing a significant amount of Chinese made vehicles
Speaker 3: starting to show up in places like Mexico and other
Speaker 3: parts of Latin America. There's places like Mexico, but other
Speaker 3: markets like Brazil interestingly, forward closed its vehicle manufacturing facility
Speaker 3: in Brazil, and the buyer of it was BID, a
Speaker 3: Chinese electric vehicle manufacturer, and that will start producing evs
Speaker 3: for the Brazilian market starting next year and probably other
Speaker 3: parts of the Latin American market.
Speaker 6: So China is sort.
Speaker 3: Of stepping in in some ways as the US is
Speaker 3: stepping back. The Chinese vehicle players are targeting the bottom
Speaker 3: of the market and are really going aggressively after these
Speaker 3: international regions because of this overcapacity they have domestically.
Speaker 5: Well quite some way away, Malcolm.
Speaker 1: Of course, China is also targeting Thailand for electric vehicles.
Speaker 1: Can you talk a bit about what you're saying there.
Speaker 4: We had reporting there that tapped into the tension that's
Speaker 4: flaring this time, not necessarily US China tension, which were
Speaker 4: also used to talking about this time, it's Japanese Chinese tension.
Speaker 4: Japan has long been the leader in Thailand's car making space,
Speaker 4: but quickly it's being challenged by China, which is ramping
Speaker 4: up its foreign direct investment into the area. Thai authorities
Speaker 4: are welcoming it with open arms. We spoke with the
Speaker 4: manager of a vast industrialist state who said that she's
Speaker 4: seeing huge investments from companies such as byd and others,
Speaker 4: and her Japanese clients are teasing her saying, hold on you,
Speaker 4: you like these Chinese guys better now She of course said, no, no, no,
Speaker 4: we like all our clients. But you know, the numbers
Speaker 4: do tell the story from just a few years ago,
Speaker 4: where the Japanese were outpacing Chinese investment into that automotive
Speaker 4: space by you know, four or five to one. Now
Speaker 4: those ratios are flipped and this year so far we've
Speaker 4: seen Japanese investment lagged Chinese investment by about a ratio
Speaker 4: of two to one. So the Chinese are pouring the
Speaker 4: money in to what is a vastly important industry for Thailand.
Speaker 1: And Colin of course, we know that the Thai government
Speaker 1: is very much encouraging investment but also pushing people in
Speaker 1: Thailand to drive more electric vehicles.
Speaker 5: What's their target for twenty thirty, So.
Speaker 3: The Thai government has a target of thirty percent of
Speaker 3: all automobile production in Thailand to be electric by twenty thirty.
Speaker 3: And that's really because right now auto manufacturing is about
Speaker 3: ten percent of Thai GDP. It's sometimes referred to as
Speaker 3: the Detroit of Southeast Asia or Detroit of the East
Speaker 3: It is a very significant part of the overall economy,
Speaker 3: and Thailand exports vehicles to a lot of the other
Speaker 3: Southeast Asia economies, so they're again ensuring they don't want
Speaker 3: to be left behind in that. So they've got this
Speaker 3: thirty percent target by twenty thirty, which is six years away.
Speaker 3: Now that they're aiming for that, early signs are quite promising,
Speaker 3: as Mel has said. Byd Changana see Great Wall Motor.
Speaker 3: These might not be household names to Western listeners, but
Speaker 3: these are big Chinese auto manufacturers who are setting up
Speaker 3: shop building plants making investments in Thailand as a way
Speaker 3: to get into the broader Southeast Asia region, which is
Speaker 3: one of the faster growing car markets in the world.
Speaker 1: And obviously we're talking about a lot going on globally here,
Speaker 1: a lot of money, a lot of accelerated plans for
Speaker 1: investment companies taking advantage and pushing heavily into this sector.
Speaker 1: And as you were saying, call, some of these targets
Speaker 1: aren't that far off, but also a lot can happen
Speaker 1: between now and then. If you're talking to our listeners,
Speaker 1: you're saying, what are the things they really need to
Speaker 1: be looking for in the coming months and years.
Speaker 6: Yeah.
Speaker 3: So the first one is this point between government push
Speaker 3: and organic consumer demand take off. So a lot of
Speaker 3: the last decade has been government trying to get the
Speaker 3: EV market going, hoping that organic consumer demand will take
Speaker 3: off and then they won't be rolling such a big
Speaker 3: ball up such as steep Hill.
Speaker 6: And that's already happened in China.
Speaker 3: What we're watching for is which other countries does that
Speaker 3: happen to as well. In Europe, you're already over twenty
Speaker 3: percent of sales being electric too, so you could argue
Speaker 3: that's kind of the case there too, though there are
Speaker 3: a bunch of policy leaders still pushing that forward.
Speaker 6: The big question is the US.
Speaker 3: For US, so since the Inflation Reduction Act was passed,
Speaker 3: over one hundred billion dollars of new investment we've tracked
Speaker 3: that is going into EV and battery manufacturing in North America.
Speaker 3: That's a really, really significant amount of money that should
Speaker 3: really set the US and North America up to start
Speaker 3: to catch up with the rest of the world.
Speaker 6: When it comes to EV adoption.
Speaker 3: But you move from this challenge of kind of getting
Speaker 3: in the game to executing, and now we're in kind
Speaker 3: of this execution phase. We're watching to see how well
Speaker 3: the US can execute on this scaling up all these
Speaker 3: things of the supply chain to enable this supply to
Speaker 3: match demand and continue to rise and get that takeoff
Speaker 3: that we've seen in other places. The other thing is
Speaker 3: this tension between different parts of this transition. So there's
Speaker 3: this tension between global environmental goals or large scale CEO
Speaker 3: two goals and local environmental concerns around extraction. There's also
Speaker 3: this tension between localization and cost reduction. So a lot
Speaker 3: of the push over the last decade has been to
Speaker 3: get costs down. Now you also have this additional variable
Speaker 3: in there, which is we don't only want them to
Speaker 3: be affordable, we want them to be made locally. That
Speaker 3: may actually cause a slowdown in some of the adoption
Speaker 3: that we're seeing.
Speaker 4: We're already seeing some of this protectionist sentiment come through.
Speaker 4: The European Union last month launching an investigation into Beijing's
Speaker 4: financial support for the ev industry.
Speaker 7: The EU is worried about the threat to its carmakers
Speaker 7: from cheaper imports from China. It says it's Chinese rivals
Speaker 7: have an unfair advantage from state subsidies. European officials say
Speaker 7: this distorts the market. They've launched a major inquiry.
Speaker 4: You know, there's millions of jobs that at risk across
Speaker 4: Europe as these cheap Chinese cars flood in. If they
Speaker 4: start to put up barriers, If these barriers start to
Speaker 4: impede on the relationships even further than that, of course,
Speaker 4: is going to ripple through the global economy, in fact,
Speaker 4: is already rippling through. And the other thing that's come
Speaker 4: up already in this conversation is the simple fact that
Speaker 4: evs don't need as many bits as the cars that
Speaker 4: we're used to. So we're seeing some economies, some smaller
Speaker 4: economies that really are going to lose out no matter what.
Speaker 4: One of the cases we've got in our stories. South Africa,
Speaker 4: platinum palladium is a big part of their mining industries.
Speaker 4: As those metals go into catalytic converters, which are parts
Speaker 4: of the exhaust system that turn some of the nasty
Speaker 4: gases into less nasty gases. You just don't need those
Speaker 4: in evs anymore. So we've got those metal prices falling dramatically,
Speaker 4: about forty percent down at the moment over the past year.
Speaker 4: Jobs are being lost already there in an economy where
Speaker 4: unemployment's already around thirty three percent, potential loss of mining jobs.
Speaker 4: The challenge to keep up is going to be really challenging.
Speaker 4: And that's just one economy. There's going to be plenty
Speaker 4: more losers e merge for every winner, So you know
Speaker 4: that's going to be very challenging right across labor markets
Speaker 4: across the globe.
Speaker 1: And of course you throw politics in the political cycle
Speaker 1: and elections coming into all of that, and you've got
Speaker 1: a complex soup. Colin Malcolm, thank you very much for
Speaker 1: joining me today.
Speaker 6: Thanks for us, Thank you, thanks for.
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Speaker 6: Pat Pat Pat don bore