WEBVTT - EV Future so Bright Biden Wears Shades 0:00:00.320 --> 0:00:02.760 Hey everybody. So a few weeks ago we did a 0:00:02.800 --> 0:00:05.160 show with ce Me about the policies put in place 0:00:05.160 --> 0:00:08.240 to accelerate e V adoption in China. The title was 0:00:08.520 --> 0:00:11.160 Tesla Crushing it in Car Captain Trade Check it out. 0:00:11.440 --> 0:00:13.560 In that episode I mentioned it was a trailer, a 0:00:13.640 --> 0:00:15.880 sort of preview for what we'd do on BNF's flags 0:00:15.880 --> 0:00:18.760 A report on transport, the Electric Vehicle Outlook, or EVO. 0:00:19.079 --> 0:00:21.320 As I said then, the report looks at how electrification, 0:00:21.640 --> 0:00:25.279 shared mobility, and autonomous driving impact road transport from now 0:00:25.320 --> 0:00:27.600 out to twenty fifty. The reports out and the time 0:00:27.640 --> 0:00:29.480 has come. This week we're lucky to be joined by 0:00:29.560 --> 0:00:32.160 the lead author of EVO and head of Transport for BNF, 0:00:32.200 --> 0:00:35.000 Colin mccarricker. I won't be labor the intro too much longer. 0:00:35.040 --> 0:00:37.160 I just want to say, come for the findings, stay 0:00:37.200 --> 0:00:40.479 for collins insightful opinions and observations. If you follow him 0:00:40.479 --> 0:00:42.479 on Twitter you'll know what I mean. He has a 0:00:42.479 --> 0:00:45.040 way of cutting right to what really matters in a 0:00:45.080 --> 0:00:46.800 way that's easy to follow. Being if you just can 0:00:46.800 --> 0:00:49.519 get the electric Vehicle out one on BNF, go on 0:00:49.560 --> 0:00:52.240 the Bloomber terminal and BNF dot com as a reminder 0:00:52.280 --> 0:00:54.360 of BENF does not provide investment strategy advice, and you 0:00:54.360 --> 0:00:56.080 can hear the full disclaimer at the end of the show. 0:00:56.320 --> 0:00:58.880 I'm Mark Taylor and you're listening to switch down to 0:00:58.960 --> 0:01:08.280 BENF podcast. Colin, thanks for joining. Good to be here. Mark. 0:01:08.319 --> 0:01:10.480 Always a pleasure to join you on the program. It's 0:01:10.480 --> 0:01:12.920 always wonderful to have you on, Colin. We missed our 0:01:13.080 --> 0:01:16.280 January ten Things to Watch this this year, and we'll 0:01:16.280 --> 0:01:17.920 make up for it here. We will. We'll have a 0:01:17.920 --> 0:01:19.840 good chat. I'm looking forward to it. Mark. So back 0:01:19.880 --> 0:01:22.360 when I was an analyst and I was editing, you know, 0:01:22.440 --> 0:01:25.440 my team's work and and the like, I always gave 0:01:25.440 --> 0:01:28.319 the suggestion when I was editing to avoid what I 0:01:28.319 --> 0:01:30.679 would call since the Dawn of Time statements you know, 0:01:30.959 --> 0:01:34.360 and often begin with something like that. It was kind 0:01:34.360 --> 0:01:35.880 of off putting, in a little bit too big for 0:01:35.880 --> 0:01:39.440 the reports we were writing. But in Evil the Electric 0:01:39.480 --> 0:01:43.040 Vehicle Outlook, you rightly start with quote mobility is at 0:01:43.040 --> 0:01:46.120 the core of modern civilization and the way people in 0:01:46.160 --> 0:01:49.640 goods move impacts many aspects of life. So definitely that's true. 0:01:49.680 --> 0:01:52.280 This report is huge and far reaching. Can you tell 0:01:52.400 --> 0:01:55.400 us a bit about it and the objectives behind it. Yeah, 0:01:55.440 --> 0:01:57.480 happy too, And I like the leading of of that 0:01:57.560 --> 0:02:00.000 opening line, and I did think about whether we shouldn't 0:02:00.000 --> 0:02:02.240 fluid that, but I do think it's important when you're 0:02:02.240 --> 0:02:06.160 talking about road transport just to recognize how personal it is. Right, 0:02:06.520 --> 0:02:09.160 the power system isn't that personal for a lot of people. 0:02:09.160 --> 0:02:10.800 They just want the lights to come on and and 0:02:10.840 --> 0:02:13.400 it's as long as that happens there, okay, And as 0:02:13.440 --> 0:02:15.520 long as it's not too expensive, it's okay. Mobility is 0:02:15.560 --> 0:02:18.120 personal in a way that most other areas of the 0:02:18.200 --> 0:02:20.160 energy transition and things that that being NEF works on 0:02:20.200 --> 0:02:23.400 sometimes are not. So what is our electric vehicle outlook? 0:02:23.639 --> 0:02:26.400 The kind of high level summary is that this is 0:02:26.560 --> 0:02:30.840 our outlook for all of road transport, looking at how 0:02:31.040 --> 0:02:33.520 people and goods move from now all the way out 0:02:33.560 --> 0:02:36.360 to and then this year we actually extended it out 0:02:36.400 --> 0:02:39.679 to to try and look a little bit at net 0:02:39.760 --> 0:02:41.760 zero scenarios and what that means. And we can talk 0:02:41.800 --> 0:02:43.560 about that in a bit, but that's kind of the 0:02:43.639 --> 0:02:46.919 high level the high level picture. Despite the name, it's 0:02:46.960 --> 0:02:49.440 not just an outlook for electric vehicles. It's an outlook 0:02:49.480 --> 0:02:51.359 for everything to do with how people and goods move 0:02:51.520 --> 0:02:53.800 on on roads around the world in different countries, and 0:02:53.800 --> 0:02:55.720 what is the main objective with it. One of the 0:02:55.720 --> 0:02:58.919 things we're trying to do is really investigate different scenarios 0:02:58.960 --> 0:03:01.680 for how this might all play out, but also stitched 0:03:01.720 --> 0:03:05.959 together a picture that draws in the breadth of research 0:03:06.040 --> 0:03:08.280 that b an e F does. So it's we have 0:03:08.320 --> 0:03:10.720 a team that's called the Electric Vehicle Team. This isn't 0:03:10.800 --> 0:03:12.840 just the output of that team. It's the output of 0:03:12.840 --> 0:03:16.160 that team, plus our intelligent Mobility team, plus the oil team, 0:03:16.400 --> 0:03:19.600 plus the energy storage and batteries team, plus the metals 0:03:19.600 --> 0:03:21.600 and mining team. So a lot of what we're trying 0:03:21.639 --> 0:03:24.960 to do is present an integrated house view from Bloomberg 0:03:24.960 --> 0:03:28.120 an EF about different possibilities for how how road transport 0:03:28.160 --> 0:03:31.119 might might evolve. And this is actually the sixth iteration 0:03:31.160 --> 0:03:33.640 we've done of this report. We started it back in 0:03:35.600 --> 0:03:38.160 and really back then it was only oil companies kind 0:03:38.160 --> 0:03:40.560 of commenting on the future of road transport, and in 0:03:40.560 --> 0:03:44.880 our view, they were dramatically downplaying the changes that were 0:03:44.880 --> 0:03:47.480 afoot that we were seeing on improvements in lithium ion 0:03:47.560 --> 0:03:50.880 batteries and rapid drops in cost. And even though those 0:03:50.920 --> 0:03:54.600 early stages, surging demand and real real consumer interest and 0:03:54.680 --> 0:03:57.320 in electric vehicles. So at that point we thought, look, 0:03:57.400 --> 0:04:00.680 there needs to be an independent voice digging into the 0:04:00.720 --> 0:04:03.000 long term outlook for road transport and playing out what 0:04:03.040 --> 0:04:05.760 it means across all these different areas that that we 0:04:05.760 --> 0:04:07.840 were looking at, And that's kind of how the project 0:04:07.880 --> 0:04:10.360 was was born, and it's evolved a lot since then. 0:04:10.440 --> 0:04:13.280 Each year we're adding new segments. Each each year we're 0:04:13.280 --> 0:04:16.640 adding new countries, we're looking at different impacts. So it 0:04:16.760 --> 0:04:19.320 keeps evolving because we need to stay on top of 0:04:19.320 --> 0:04:21.680 what types of questions are clients are asking us and 0:04:21.720 --> 0:04:24.240 what types of things need answers. There's some things that 0:04:24.240 --> 0:04:25.840 we know more about than we need five or six 0:04:25.920 --> 0:04:27.800 years about, and others that are that are kind of 0:04:27.839 --> 0:04:30.560 still unknowns. So it's really about kind of tying all 0:04:30.560 --> 0:04:33.800 that stuff together, having an independent voice, and then playing 0:04:33.800 --> 0:04:36.520 that out in across different across different areas. What were 0:04:36.520 --> 0:04:38.240 you trying to answer this year that's new that you 0:04:38.279 --> 0:04:40.160 weren't trying to answer in previous years. The big one 0:04:40.160 --> 0:04:42.680 this year is our our net zero scenarios. So generally 0:04:42.720 --> 0:04:44.640 what we've had is kind of our I won't call 0:04:44.680 --> 0:04:47.760 it a base case view, because in economic modeling circles 0:04:47.800 --> 0:04:50.800 and forecasting circles, base case is kind of this thing 0:04:50.880 --> 0:04:53.120 people don't like to say. We call it our economic 0:04:53.120 --> 0:04:56.520 transition scenario, which assumes no new policies are implemented. It's 0:04:56.520 --> 0:04:59.600 a market lad transition. That's what we've generally done in 0:04:59.640 --> 0:05:03.560 the past, sort of a techno economic analysis of adoption 0:05:03.960 --> 0:05:06.640 potential in different segments. So the big difference this year 0:05:06.680 --> 0:05:09.280 is we did a net zero scenario where we said, okay, 0:05:09.320 --> 0:05:11.640 what do you have to do to get road transport 0:05:11.680 --> 0:05:15.800 direct road transport emissions all the way to zero by 0:05:14.600 --> 0:05:17.200 twenty fifty And it's important to note there that that's 0:05:17.240 --> 0:05:20.480 direct tail pipe emissions. There are still possible upstream emissions 0:05:20.480 --> 0:05:24.760 from generating electricity and and potentially generating hydrogen. Those are 0:05:24.800 --> 0:05:27.640 covered in other areas of NF long term forecasting work. 0:05:27.720 --> 0:05:29.640 So long term out looks like our New Energy or 0:05:29.680 --> 0:05:31.720 New Energy outlook. So that's the big change this year 0:05:31.760 --> 0:05:33.600 is to sort of say, let's do a bit more 0:05:33.600 --> 0:05:36.560 of an exercise in working backwards to say what speed 0:05:36.560 --> 0:05:38.520 do different segments have to go at, what has to 0:05:38.560 --> 0:05:41.360 happen over the next five years, ten years, twenty years, 0:05:41.360 --> 0:05:43.200 thirty years to stay on track for this net zero 0:05:43.240 --> 0:05:47.520 scenario by and then look at policy or sorry by 0:05:47.560 --> 0:05:50.160 and then look at policy recommendations that can help get 0:05:50.160 --> 0:05:53.120 you closer to that. So before we get into those 0:05:53.120 --> 0:05:55.279 scenarios a bit more and into the results of the report, 0:05:55.360 --> 0:05:58.040 let's get into the how a little bit more. Thinking back, 0:05:58.080 --> 0:06:00.320 one of my favorite episodes we've done actually was with 0:06:00.360 --> 0:06:04.680 Ian Berryman and it was called Modeling the Energy Future, Ants, 0:06:04.839 --> 0:06:07.720 Birds and Doctor Strange, And in that episode we just 0:06:07.800 --> 0:06:09.760 talked about the only thing we talked about was his 0:06:09.800 --> 0:06:14.680 approach to modeling Energy Forecast Model NEPHEM, the model that 0:06:14.720 --> 0:06:17.840 powers the New Energy Outlook. So I know EVO is 0:06:17.880 --> 0:06:20.600 a similarly complex task that you just mentioned with all 0:06:20.640 --> 0:06:24.120 these teams collaborating and trying to get a coherent view 0:06:24.120 --> 0:06:26.800 on something on the road Transport future. Can you tell 0:06:26.880 --> 0:06:28.640 us a bit more about the approach and how you 0:06:28.680 --> 0:06:30.880 actually got this thing done. One of the big things 0:06:30.920 --> 0:06:32.719 we have to do is kind of start early. So 0:06:32.839 --> 0:06:34.320 we we kind of start at the end of the 0:06:34.320 --> 0:06:36.400 previous year saying what are all the things that we 0:06:36.400 --> 0:06:38.560 want to include in it, and then work for a 0:06:38.560 --> 0:06:41.159 big chunk of the first four or five six months 0:06:41.160 --> 0:06:43.960 of one on it and to put it all together. 0:06:44.279 --> 0:06:46.400 So there's there's definitely an element of planning and thinking 0:06:46.440 --> 0:06:49.080 ahead about what you're gonna do. The summary is that 0:06:49.160 --> 0:06:52.400 it's actually slightly different what we do depending on each segment. 0:06:52.520 --> 0:06:55.680 So some segments have a very different architecture of the 0:06:55.680 --> 0:06:58.839 way you model uptaking them. For example, when we're looking 0:06:58.880 --> 0:07:02.320 at commercial vehicle it's really driven by total cost of 0:07:02.360 --> 0:07:06.680 ownership of different competing drivetrain technologies. When we're modeling passenger vehicles, 0:07:06.720 --> 0:07:09.080 it's much more driven by upfront prices and where did 0:07:09.120 --> 0:07:11.640 those get to. But the one common theme that we 0:07:11.680 --> 0:07:14.080 have across all of what we do is that we 0:07:14.160 --> 0:07:16.920 actually start with again come back coming back to what 0:07:16.920 --> 0:07:19.360 we open with, how do people in goods move? So 0:07:19.400 --> 0:07:22.560 when when we try and forecast or do our outlooks 0:07:22.560 --> 0:07:25.280 for the amount of vehicles that are going to be sold, 0:07:25.440 --> 0:07:28.560 we actually start with kilometers of mobility how much do 0:07:28.640 --> 0:07:30.880 people literally how much do people move around in a 0:07:30.880 --> 0:07:34.160 different country, and freight time kilometers for how much goods 0:07:34.200 --> 0:07:36.600 move around, And then we look at all the factors 0:07:36.640 --> 0:07:39.760 that impact that over time. UH and those can be 0:07:39.800 --> 0:07:42.400 some things that have been consistent or throughout the last 0:07:42.400 --> 0:07:45.040 twenty years or other things that that are just starting 0:07:45.040 --> 0:07:48.160 to come in. So something like e commerce changes the 0:07:48.240 --> 0:07:52.880 distribution of kilometers of freight between whether they're heavier trucks 0:07:52.960 --> 0:07:56.120 or lighter trucks, you might get more last mild delivery 0:07:56.160 --> 0:07:58.320 going on, and that you just start to see that 0:07:58.360 --> 0:08:02.040 in the data. So basically with with starting with kilometers, 0:08:02.120 --> 0:08:05.120 it gives us a really good baseline for this is 0:08:05.160 --> 0:08:08.360 how people in goods move, and then from there we 0:08:08.560 --> 0:08:11.200 determine how many vehicles you need in order to satisfy 0:08:11.280 --> 0:08:13.800 that demand for mobility for people and goods, and then 0:08:13.840 --> 0:08:16.840 from fleet we get to sales. So a lot of 0:08:16.880 --> 0:08:18.920 the and I think that's kind of something a bit 0:08:18.920 --> 0:08:20.760 different about the way we approach it, is that a 0:08:20.800 --> 0:08:22.920 lot of these a lot of the other exercise we've 0:08:22.920 --> 0:08:25.880 seen generally think of sales as just sales, but but 0:08:25.920 --> 0:08:28.000 people don't buy a car just to have a car. 0:08:28.080 --> 0:08:30.840 It's it's to serve a purpose and that purpose is mobility. 0:08:30.880 --> 0:08:33.080 So we kind of start with mobility and then work 0:08:33.080 --> 0:08:35.600 our way down to sales, and then within sales in 0:08:35.640 --> 0:08:39.880 each country, and each year we're creating an adoption outlook 0:08:39.920 --> 0:08:43.360 for different drive trains. So the competing mix of different 0:08:43.440 --> 0:08:47.319 drive trains can be is quite different between different segments. 0:08:47.320 --> 0:08:50.240 So in trucks you might have C and G playing 0:08:50.240 --> 0:08:52.679 a role, compressed natural gas playing a role, whereas in 0:08:52.720 --> 0:08:56.960 the passenger cars it's really much more about um internal combustion, hybrid, 0:08:57.000 --> 0:08:59.800 plug in hybrid, battery electric and maybe a bit a 0:08:59.840 --> 0:09:01.679 few will sell that. We're a bit pessimistic on that. 0:09:02.160 --> 0:09:03.959 So in each year, in each country, in each segment, 0:09:03.960 --> 0:09:07.200 we're building a drive train outlook, and that factors in 0:09:07.240 --> 0:09:10.400 all these different things around economics, but also other factors, 0:09:10.480 --> 0:09:13.040 and there's a lot about the way we kind of 0:09:13.480 --> 0:09:16.080 tie that all together in the long term outlook part. 0:09:16.520 --> 0:09:19.120 And and again the exact mechanics differ a bit depending 0:09:19.160 --> 0:09:21.199 on the segment you're looking at. So it actually does 0:09:21.240 --> 0:09:24.520 sound a bit like power that you start with demand, right, 0:09:24.800 --> 0:09:26.400 you know, in power, you'd start with demand as well, 0:09:26.600 --> 0:09:28.320 and then you build some power plants to meet that 0:09:28.400 --> 0:09:32.200 demand sales or drive trains, and then you start selling megawatts, right, 0:09:32.280 --> 0:09:34.599 so you get individual unit sales. I guess one of 0:09:34.640 --> 0:09:36.880 the things that was kind of, to be honest, controversial 0:09:36.880 --> 0:09:39.560 when we started doing this was that you could use 0:09:39.600 --> 0:09:42.680 consumer adoption modeling trends to actually forecast what was going 0:09:42.720 --> 0:09:44.800 to happen. When we started doing it in twenty six 0:09:45.600 --> 0:09:48.680 going and presenting a vast diffusion curve saying look it 0:09:48.760 --> 0:09:50.319 is going to follow and ask curve that was quite 0:09:50.720 --> 0:09:53.640 We've got a lot of skeptical looks at the time. 0:09:53.880 --> 0:09:56.679 Now everyone kind of accepts that, accepts that, at least 0:09:56.679 --> 0:09:59.720 on the passenger vehicle side, this probably will be a 0:09:59.760 --> 0:10:03.160 tech knowledge adoption story, and it's just people debate over 0:10:03.679 --> 0:10:05.559 which speed and in which segments and how fast it 0:10:05.559 --> 0:10:07.640 goes in which country, but that that that that changeover 0:10:07.720 --> 0:10:10.560 is coming. So when we look at that part, we 0:10:10.600 --> 0:10:13.640 try and say, okay, here's here's what's happened in places 0:10:13.679 --> 0:10:17.840 where adoption has gone quickly, and here's the parameters that 0:10:17.920 --> 0:10:19.440 lead to that. And then we look at how that 0:10:19.520 --> 0:10:21.880 might play out in other countries, and then we add 0:10:21.920 --> 0:10:25.080 some kind of gating factors, and these are sometimes controversial. 0:10:25.160 --> 0:10:27.440 So one of the things we do, for example, is 0:10:27.840 --> 0:10:30.600 when we're again in the passenger vehicle segment, we have 0:10:30.640 --> 0:10:33.400 a higher faster adoption rate for people who live in 0:10:33.480 --> 0:10:36.480 single detached homes than in people who live in high 0:10:36.559 --> 0:10:40.000 rise multi dwelling units. Because we think people who have 0:10:40.080 --> 0:10:42.920 easy access to home charging infrastructure will probably go electric faster. 0:10:43.240 --> 0:10:45.559 Now that it might not be the case. A government 0:10:45.600 --> 0:10:48.000 may build its way out of that constraint and just 0:10:48.080 --> 0:10:50.280 blanket a country and chargers, and then the adoption rate 0:10:50.360 --> 0:10:51.920 might be the same. But those are some of the 0:10:51.960 --> 0:10:53.880 things that we can play around within our model and 0:10:53.920 --> 0:10:55.360 say do we think that's a thing, that we think 0:10:55.360 --> 0:10:57.720 that's not a thing. I think it's a thing. I mean, 0:10:57.840 --> 0:11:00.599 I am I'm living proof. Last year I bought a 0:11:00.640 --> 0:11:02.680 car and I didn't buy one because I can't get 0:11:02.679 --> 0:11:05.600 a you know, I live in a row house on 0:11:05.320 --> 0:11:08.200 a on a London street, right, so I don't have 0:11:08.200 --> 0:11:11.720 a charging option. And the deal was that the next 0:11:11.720 --> 0:11:13.640 car we get will be an electric one because the 0:11:13.679 --> 0:11:16.600 assumption is that there will be a charging network by then, hopefully. 0:11:17.000 --> 0:11:19.120 I'm sure that's the calculus for a lot of people. Yeah, 0:11:19.120 --> 0:11:20.600 And I think we're just getting to that point where, 0:11:21.360 --> 0:11:23.679 I mean, you have more conversations about this with people, right, 0:11:23.840 --> 0:11:25.600 that's a double edged sword. If you've been working on 0:11:25.600 --> 0:11:28.079 this stuff for a decade, it means everybody wants to 0:11:28.160 --> 0:11:30.600 chat about it, but it also means that you end 0:11:30.679 --> 0:11:33.080 up talking about your work a lot at dinner, which 0:11:33.320 --> 0:11:35.840 which maybe isn't a good thing. As you said, it 0:11:35.920 --> 0:11:38.040 matters to everybody, right, So even if somebody is not 0:11:38.080 --> 0:11:41.960 necessarily interested in the S curve, they're interested in their 0:11:42.800 --> 0:11:45.360 mode of transportation. And then I guess whether that's even 0:11:45.640 --> 0:11:48.800 public transportation two wheelers, cars, trucks, you, I mean, you 0:11:48.800 --> 0:11:50.920 put all of it in. There. Is there different curves 0:11:50.920 --> 0:11:54.120 for different types of technologies that you're seeing, Yeah, there is, 0:11:54.240 --> 0:11:57.560 and and so for example, plug in hybrids in the 0:11:57.840 --> 0:12:01.120 in the passenger vehicle segment, more and more they look 0:12:01.200 --> 0:12:05.200 like a compliance strategy primarily by automakers to meet tightening 0:12:05.200 --> 0:12:09.079 fuel economy regulations. And that's really why they've surged in Europe. 0:12:09.120 --> 0:12:11.320 There about over half of all the plug in vehicle 0:12:11.360 --> 0:12:13.600 sales in Europe right now are are our plug in hybrids. 0:12:13.600 --> 0:12:16.079 The other half better electrics, of course, and that's really 0:12:16.080 --> 0:12:18.120 because Europe tightened the screws on on the CEO two 0:12:18.160 --> 0:12:21.319 regulations for cars this year or last year rather, and 0:12:21.720 --> 0:12:24.240 it's a bit more again this year, and that has 0:12:24.280 --> 0:12:28.359 really mend automakers who are skeptical of fully electric technology 0:12:28.440 --> 0:12:30.679 or who don't have their platforms fully ready to go 0:12:31.040 --> 0:12:33.160 are pushing a lot of plug in hybrids into the market, 0:12:33.640 --> 0:12:35.480 but the dynamics of that are are kind of much 0:12:35.520 --> 0:12:39.480 more predictable based on policy than they are or earth. Sorry, 0:12:39.480 --> 0:12:42.320 the uptake of that technology is much more predicated on 0:12:42.320 --> 0:12:45.200 on policy than it is on other sort of more 0:12:45.280 --> 0:12:49.160 organic consumer demand factors. And that's that's kind of evident 0:12:49.240 --> 0:12:50.800 in the data. So you don't get the same kind 0:12:50.800 --> 0:12:52.959 of s curve for for plug in hybrids as you 0:12:52.960 --> 0:12:55.280 do for better electrics. One, because they never get cheaper, 0:12:55.520 --> 0:12:58.080 They never get cheaper on and upfront basis than comparable 0:12:58.080 --> 0:13:00.520 internal combustion engine vehicles because they still have a combustion 0:13:00.520 --> 0:13:03.360 engine on board. And in our model, which is looking 0:13:03.360 --> 0:13:05.760 for the kind of cheapest path to do that, it 0:13:05.840 --> 0:13:08.600 doesn't build a lot of those beyond what is required 0:13:08.640 --> 0:13:12.520 by current compliance with with existing policies. So that's kind 0:13:12.559 --> 0:13:15.920 of an example of a technology that adoption is going up, 0:13:16.520 --> 0:13:18.920 but it's not going up. It's we don't think it's 0:13:18.920 --> 0:13:20.480 going up on the same kind of ask curve that 0:13:20.480 --> 0:13:23.400 you're going to get with fully electric vehicles. Makes sense, Yeah, 0:13:23.440 --> 0:13:25.559 And I mean they just don't seem very interesting, right, 0:13:25.559 --> 0:13:27.640 Like they don't seem like a big enough change to 0:13:27.760 --> 0:13:31.040 really be all that enticing apart from a policy measure 0:13:31.760 --> 0:13:34.319 or a policy incentive. That's just me speaking, And I 0:13:34.400 --> 0:13:36.959 think for some consumers they are actually a good choice 0:13:37.120 --> 0:13:40.080 if with the right needs. Maybe you just only want 0:13:40.120 --> 0:13:41.679 to go on the odd long trip out out of 0:13:41.679 --> 0:13:44.199 the weekend on the weekend, and and they're good fit 0:13:44.240 --> 0:13:46.520 in that case. I think our our skepticism is more 0:13:46.600 --> 0:13:51.320 that will automakers really build something that if there isn't 0:13:51.480 --> 0:13:53.719 a policy push to do so, that can never get 0:13:53.800 --> 0:13:56.120 cheaper than an internal combustion engine vehicle, because you do 0:13:56.160 --> 0:13:59.200 have a lot of added costs. And so increasingly what 0:13:59.240 --> 0:14:01.679 we're seeing is it automakers kind of they're going to 0:14:01.760 --> 0:14:03.400 sell a bunch of peat plug in hybrids in the 0:14:03.480 --> 0:14:05.480 next little while. But then the strategy starts to get 0:14:05.480 --> 0:14:07.679 a bit more, a bit like a barbell. You go 0:14:07.800 --> 0:14:10.800 fully electric, and then you do a bunch of mild hybrids, 0:14:11.360 --> 0:14:15.440 non pluggable the lowest level of electrification you can, because 0:14:15.480 --> 0:14:17.560 that's quite a cheap way to get the rest of 0:14:17.600 --> 0:14:19.520 the emissions of the rest of your fleet down, and 0:14:19.560 --> 0:14:22.040 then you sell a fair amount of fully electric vehicles 0:14:22.080 --> 0:14:24.480 as well. This is actually one of the fascinating things that, 0:14:24.520 --> 0:14:26.360 to be honest, makes this out look really hard to 0:14:26.360 --> 0:14:30.560 do is that, for one, on the passenger vehicle side anyway, 0:14:30.640 --> 0:14:32.400 right now, in some places you're in the middle of 0:14:32.440 --> 0:14:35.400 a steep part of the curve. Right This isn't theoretical anymore. 0:14:35.800 --> 0:14:39.760 In Germany, more than of auto sales have a plug 0:14:39.880 --> 0:14:44.480 right now. China the latest data in June here around 0:14:44.520 --> 0:14:47.280 fift that's the world's largest auto market. You're really hitting 0:14:47.320 --> 0:14:48.960 kind of the steep part of the curve. So one 0:14:49.000 --> 0:14:50.360 of the things that makes it tricky there is that 0:14:50.720 --> 0:14:53.120 it's already kind of happening. This isn't something way in 0:14:53.120 --> 0:14:55.560 the future. It's kind of happening now. The other thing 0:14:55.600 --> 0:14:57.000 is course, is that there's still a lot of policy 0:14:57.040 --> 0:14:59.720 in the mix. Like we're waiting kind of on tenter 0:14:59.760 --> 0:15:01.960 hook right now to see what the Biden administration does 0:15:02.280 --> 0:15:04.800 with fuel economy regulations in the US, because depending on 0:15:04.840 --> 0:15:07.320 what they do with those, it could go faster or slower. 0:15:07.640 --> 0:15:10.360 So this is where when you're doing these long term 0:15:10.360 --> 0:15:11.840 out looks, you have to be really clear what the 0:15:11.880 --> 0:15:15.200 exercises and what we're trying to do is saying here's 0:15:15.200 --> 0:15:18.000 the policy or here's the outlook with no new policies, 0:15:18.280 --> 0:15:20.040 and then here's the net zero outlook. If you want 0:15:20.080 --> 0:15:22.200 to get to that, here's how how much further and 0:15:22.240 --> 0:15:25.080 faster has to go. But we recognize that in the 0:15:25.120 --> 0:15:26.880 near term there is going to be more policy, there 0:15:26.920 --> 0:15:28.400 are going to be more changes, There's gonna be a 0:15:28.440 --> 0:15:31.080 lot of different things that happened. So I think that's 0:15:31.480 --> 0:15:33.880 maybe something we haven't explained as well as we could 0:15:33.920 --> 0:15:37.360 have in the past, that that economic transition scenario assumes 0:15:37.360 --> 0:15:40.640 no new policies, and therefore when there is a new policy, 0:15:41.000 --> 0:15:44.120 it might change the curve. So an example I always 0:15:44.160 --> 0:15:47.440 kind of give is, look, if you were building an 0:15:47.520 --> 0:15:52.600 outlook model in the US last year and you somehow 0:15:52.680 --> 0:15:56.920 knew that Biden was going to win the election, great 0:15:57.000 --> 0:15:59.160 good on you. But we didn't know that, and we're 0:15:59.200 --> 0:16:01.240 not in the business of a forecast election. So we 0:16:01.280 --> 0:16:03.200 had to take sort of here's what the current policy is, 0:16:03.240 --> 0:16:06.440 and here's what what that means for adoption. So that's 0:16:06.480 --> 0:16:08.160 kind of one of the tricky things both to do 0:16:08.360 --> 0:16:11.880 and to kind of communicate what it means overall. Okay, 0:16:12.120 --> 0:16:14.120 so many different directions we could go down. There, so 0:16:14.120 --> 0:16:16.960 many roads we could go down. Huh No, pun intended. 0:16:17.640 --> 0:16:21.359 So much of our language is based on metaphors around transport. 0:16:21.480 --> 0:16:23.520 Once you start to see them, notice them, you can't 0:16:23.520 --> 0:16:29.360 stop seeing them everywhere. Oh sure, okay, so let's actually 0:16:29.360 --> 0:16:31.080 do get into the results for a second, and then 0:16:31.120 --> 0:16:33.400 we can go down a few different roads about you 0:16:33.440 --> 0:16:35.360 know what some of the different markets are doing, some 0:16:35.400 --> 0:16:37.840 of the policies that are in place, etcetera. But as 0:16:37.840 --> 0:16:39.520 you said, your team has been doing this for six 0:16:39.600 --> 0:16:42.760 years now. Is there anything that surprised you from doing 0:16:42.840 --> 0:16:45.600 this year's EVO that you hadn't seen in previous years. 0:16:46.000 --> 0:16:48.280 I think doing this net zero scenario was a bit 0:16:48.320 --> 0:16:50.960 of an eye opener. Even been working on the stuff 0:16:50.960 --> 0:16:53.520 for a long time, and you see how fast it's 0:16:53.520 --> 0:16:55.800 all happening, and it feels like, wow, we're we're in 0:16:55.800 --> 0:16:58.000 the middle of a huge transition. Things are really going 0:16:58.480 --> 0:17:01.120 But at the same time, doing the net zero scenario 0:17:01.200 --> 0:17:03.520 reminds you that it's still all has to go a 0:17:03.560 --> 0:17:07.840 lot faster, and I think that was probably the biggest surprise. 0:17:07.880 --> 0:17:10.240 I mean, you sort of know that intellectually, but then 0:17:10.280 --> 0:17:12.240 you spend three months kind of in the data and 0:17:12.240 --> 0:17:15.600 you're like, well, we we have to as a like globally, 0:17:15.640 --> 0:17:18.920 you would have to phase out combustion vehicle sales um 0:17:18.960 --> 0:17:23.040 completely to stay on track for the net zero scenario, 0:17:23.400 --> 0:17:26.600 and even to do that, you need to do a 0:17:26.600 --> 0:17:30.000 lot of early retirements of older vehicles in to even 0:17:30.040 --> 0:17:32.520 do that. If you wanted to and if you wanted 0:17:32.520 --> 0:17:35.240 to get to net zero without doing early retirements, you 0:17:35.240 --> 0:17:37.720 almost have to stop selling to internal combustion engine vehicles 0:17:37.760 --> 0:17:40.480 tomorrow because some vehicles that are sold now stay on 0:17:40.520 --> 0:17:42.800 the road for a very long time. So so there's 0:17:42.840 --> 0:17:45.440 just some reality of spending that time in the data 0:17:45.440 --> 0:17:47.240 around the net zero scenario that makes you go, wow. 0:17:47.680 --> 0:17:50.800 Road transport is especially personal. Road transport is probably one 0:17:50.840 --> 0:17:54.080 of the areas that, um, we're most optimistic are in 0:17:54.280 --> 0:17:56.520 the in the energy transition, because you have the solutions 0:17:56.560 --> 0:17:58.880 today that can get you most of the way there 0:17:59.359 --> 0:18:02.400 and yet still hard. So I think that's important kind 0:18:02.400 --> 0:18:06.000 of kind of context in all of this that that 0:18:06.080 --> 0:18:08.080 was maybe a bit surprising, again even though you might 0:18:08.119 --> 0:18:10.680 intellectually know it. The other one that's kind of related 0:18:10.920 --> 0:18:14.840 is that we did some investigations this year around reducing 0:18:14.880 --> 0:18:18.040 demand from mobility. Everyone talks about changing over vehicles and 0:18:18.080 --> 0:18:20.560 most of the government programs are aimed at at that, 0:18:20.680 --> 0:18:24.200 at having different options to do the same amount of 0:18:24.280 --> 0:18:26.399 driving and this sort of thing. But we are starting 0:18:26.440 --> 0:18:28.760 to see some governments saying, actually, no, we need to 0:18:28.800 --> 0:18:32.119 tackle how much people are driving around and we need 0:18:32.160 --> 0:18:35.000 to reduce that. And that's through a combination of active travel, 0:18:35.400 --> 0:18:38.800