The rise to dominance of China's EV industry

Markham interviews Vivek Vaidya, principal and global client leader at Frost & Sullivan,

What is Energi Talks?

Journalist Markham Hislop interviews leading energy experts from around the world about the energy transition and climate change.

Markham: 00:04

Welcome to episode 204 of the Energy Talks podcast. I'm energy and climate journalist, Markham Hislop. There is a topic that I've been meaning to get to for a long time, and that is the EV, the electrical the electric vehicle powerhouse manufacturing powerhouse that China has become. This is a key part of why the the International Energy Agency thinks that oil demand will peak in 2030, and EV sales around the globe are exploding. Last year, they were 10,000,000, and I think by if I remember my numbers correctly, Bloomberg NEF is forecasting 26,000,000 by 2025.

Markham: 00:47

6,000,000 of those, EVs were sold in China alone. And by 2025, Li Jing, CEO of the Chinese carmaker Li Auto, says electric vehicles could hit 80% of all new cars sold in China. So I'm gonna talk to Vivek Vaidya, principal and global client leader at Frost and Sullivan about Chinese EV manufacturing. So welcome to the interview, Vivek.

Vivek: 01:17

Happy to be here, and this is a very interesting topic, and happy to chat with you about it.

Markham: 01:22

Where are you joining us from today?

Vivek: 01:25

I'm joining you from, Singapore. It's a small city, which is close to, right in the center of Asia Pacific and works closely with both China, India, and Japan, and Korea.

Markham: 01:38

So you have an an an excellent position with which to kind of keep tabs on what's going on in the Asia Pacific and the transformation of the global auto industry that it really is being driven by Asia Pacific.

Vivek: 01:55

That is absolutely correct. And even the city where I stay in Singapore forward looking, very futuristic when it comes to the transportation system. So, yes, it is a excellent position to be in, to analyze, monitor, and compare and contrast between the automotive markets across the world.

Markham: 02:15

Now, Vivek, I'm kinda curious. As much I don't know a lot about China, but at least I keep tabs on it. And I have I've interviewed 1 or 2 experts, in the last year about it. And we kind of you know, we pay attention to India just because of the size of its market, and we know that there a lot of it is, 2 3 wheelers that dominate the transportation market. And there are I I think, it's less than, like, 70% now of those have already converted to electric.

Markham: 02:44

But what about other countries, Asia or sorry, Malaysia, Indonesia, Vietnam, you know, Bangladesh, Pakistan. You know, what's going on with electric vehicles in those markets?

Vivek: 02:59

These countries are taking their first baby steps in electrical world. The, what is in forefront is Thailand as well as Singapore. Both these countries are on forefront. The governments have woken up to the fact that electric vehicle is a new opportunity, and it requires a completely holistic and different mindset to, make it acceptable and make it popular among the customers. So Thailand and Singapore, I would put as 2, countries that are on the forefront.

Vivek: 03:29

Of course, Korea and Japan, which is a home ground of lot of OEMs, there's lot of experimentation that is happening there. Right? So I I'm not considering them. But, other markets, behind China, I would put it put it as Thailand and Singapore.

Markham: 03:47

Well, let's talk about what's going on with China's EV manufacturing industry. Now I understand that 20, 25 years ago, the Chinese government was looking at its auto industry, and it already had a significant auto manufacturing industry, but it was always going to be, behind the other, you know, Europeans and the North Americans and the Koreans and Japanese when it came to internal combustion engine technology. And so it it made a bet at that time. It said, you know what? We think that electric transportation, particularly electric cars and electric cars, are is gonna be the way to go.

Markham: 04:25

That's the future, and we're gonna begin investing in it now so that when the technology becomes mature and when it's ready to move to the market in a big way, we will be we'll be that powerhouse. We'll be and I I liken it to the Americans after World War 2, you know, where they they emerge from that conflict as the global manufacturing powerhouse, and it looks like China is kind of lining itself up to do that with the with the the new emerging clean energy technologies. Is that a fair way to frame this conversation?

Vivek: 05:00

Untotally, because, if you look at the battery electric, especially battery electric vehicle market today, China is head and shoulder above the rest. More than 60% of the vehicle that are sold in battery electric vehicle across the world are sold in China. And they have a very strategic reason for them to do this. As you absolutely rightly pointed out that they did not really have a very strong position in, ice engines, but they realize that, they have lots of lithium, which can become a very important source of their competency, as far as battery electric vehicles are concerned. So they have strategic reasons to pursue battery electric vehicle despite their energy policy.

Vivek: 05:47

So they have lithium, they have, been supplying, the batteries to, cell phones and other, equipments, and now they want to expand that to into the car, and now the car becomes a very, big consumer of, lithium batteries, which is available in abundance in China.

Markham: 06:10

Now we understand that, when it comes to battery, the battery supply chain, China absolutely dominates. I mean, there must be 75 to 80% of that supply chain is in China, particularly, around things like the critical minerals, particularly lithium, and the processing and and refining of those minerals to make battery metals is where it's they absolutely have a choke hold on the industry.

Vivek: 06:40

That is correct. But it doesn't limit itself to that. Even the battery, so battery manufacturing can be divided into cell manufacturing and battery assembly. So the cell manufacturing, which is an individual cell that is manufactured, and then that is stuck together as a battery and which can go in, cell phones. It can go in laptops.

Vivek: 07:01

It can go in cars. So that I mean, simplistically speaking, this is the basic structure. So, the cell manufacturing is also something that is absolutely dominated by China, but, of course, closely followed by Koreans and, closely followed by Japanese. So these three countries together have a very strong hold on how batteries are being being manufactured, and, there are different applications of, each one of them. China absolutely focuses on cars, and that's where, they think that their source of competency lies in.

Markham: 07:35

I, have interviewed a fellow named Mike Andrade, who's a long time been in the manufacture electronics manufacturing industry and now is the CEO of Canadian solar company, Morgan Solar, and, very thoughtful guy when it comes to these kinds of questions. And one of the points that he he makes is that energy as a technology is very different than energy as a commodity. Once you your tech your energy source becomes technology, it obeys laws in that you find in manufacturing and in electronics, which are very different than than commodity, like oil and gas and and coal. Would you agree with that?

Vivek: 08:16

When I say energy as a technology, I need you to elaborate a little bit. What do you mean by, source of energy as a technology?

Markham: 08:25

Well, I think he he's thinking of solar panels and wind turbines and, you know, and batteries for storage and and software and that those sorts of things.

Vivek: 08:35

Okay. So, what we are essentially talking about is renewable energy. And when you have a ring a source of energy as renewable energy, electric vehicle is absolutely different ballgame, because, you are able to use, say, solar power or wind power and charge the entire car with it and the car runs, then in the running of the car, your carbon footprint is close to 0. Of course, there is carbon footprint associated with manufacturing of solar panels, erection of solar panels, etcetera. But when it comes to running of the vehicle, those, carbon emissions are absolutely 0.

Vivek: 09:16

And therefore, energy policy is a very critical component, when it comes to, promotion as well as success of, battery electric vehicles.

Markham: 09:27

What what is China doing? Now we know that they've subsidized the adoption of electric vehicles very heavily in the past. We know that they've subsidized the development of the, electric vehicle manufacturing sector and of the supply chains. Are they still subsidizing it to the same extent?

Vivek: 09:48

So I don't know whether I can use the word subsidy, but it is definitely incentive. And, world over, the countries have to give incentive at different levels for battery electric vehicle to even, survive it, to sustain. So the kind of incentives, governments are able to do, is monitoring or incentivizing corporate average fuel consumption. So there is an incentive to reduce your fuel consumption. There is a, incentive to reduce, use neighborhood electric vehicles, which is electrification.

Vivek: 10:27

There is an incentive to manufacturing of EV. So all of this is, definitely happening. There is also an indirect incentive. There are, if you look at top 6 cities, in China, they have, like, a waiting list for buying cars because the number of cars that can be sold in the city is restricted. So they call it buying the number plate.

Vivek: 10:53

So when you have to buy the number plate, electric vehicles have a different queue, and a normal car has a different queue. So it's an indirect incentive. Suppose your normal car is going to take, say, 3 months, the electrical car may be available, right away. So that's an indirect incentive that is created to, to, for the customers to buy electric vehicles. I won't really call it as subsidy because if if you call it subsidy, then everybody subsidized in some way one way or the other.

Markham: 11:25

Okay. Fair enough. But, has the level of incentives, do begun to decline as the industry matures and as the domestic market for electric vehicles matures?

Vivek: 11:38

Yes. Definitely. I think, that is happening in China, and that's also happening world over. Initially, there was, like, a cash incentive that the customer would get. So if you scrap your, IC engine vehicle car and then you go into a battery electric vehicle, then you get, like, a cash cash in your hand.

Vivek: 11:58

So that's no longer happening anywhere in the world that I know of. And, are are at least the markets that are in the forefront, like China, like US, like Scandinavian countries, that practice has stopped. So the average incentive or average payout from the government has definitely reduced. But now, in China, there, people see some obvious advantages of buying electric vehicle, and therefore, there is, I would say, movement towards electric vehicle, and now it is all in the process of becoming a self sustaining product category.

Markham: 12:35

The, we know that, China's battery manufacturers are well advanced. They're far ahead of the US and European, suppliers. And I was just reading last month that, I forget the name of the there's a a car called Zeekr, and I think it's made by Geely. And they were taking a battery. I wanna say it it's the it's from CATL, so the big the big biggest Chinese battery manufacturer, and they were getting over a 1000 kilometers in range, which is essentially double the the average range now.

Markham: 13:18

And it seems like the Chinese companies are leading the charge in terms of technology. Batteries, yes, but also in other areas, people around, electronics, you know, power electronics and and and function within an an electric vehicle. Is is that correct?

Vivek: 13:37

Yes. Now they have the critical mass to innovate in terms of providing support systems for battery electric vehicle. Battery electric vehicle does need a lot of support in the sense there is something called battery management software, which needs to monitor not just how the battery is giving power in the car, but also, how the battery is performing in terms of temperature, in terms of its chemistry, in terms of which sales are functioning, which sales aren't functioning, what should be the prod of our output? There are also developments in terms of, charging the battery when you break or charging the battery when you are decelerating, which further enhances the, charge that you have in the battery. So, since China has that critical mass and has that, initial impetus in terms of, assembling proper batteries, definitely, these are the developments that are happening in and around battery electric vehicles in China.

Markham: 14:46

I was interviewing a a battery expert, and his take on Tesla was that Tesla had a 2 year lead in technology over all other, you know, North American and European and, I guess, Japanese and Korean EV makers. Would Tesla have a 2 year lead on Chinese EV makers?

Vivek: 15:10

I I would say it is more than that 2 years. 2 years is too little time as far as, IC engines are concerned. I think Tesla is, miles ahead of others, and, Tesla's complete approach to to car is different than anybody else in the industry. They do not treat their car as a car. They treat their car as a gadget, And therefore, you find that, it's, I mean, the car aspects of car and the features of car are taken for granted.

Vivek: 15:43

But where they're putting their focus and energies or is on making this, vehicle connected, offering services on top of it, making sure that your consumer interface is good. You they are pushing it towards autonomous. So, they are truly considering their car as a gadget and the living space. So, it's not just a technology, but the entire approach with which Tesla is approaching this passenger vehicle or battery electric vehicle. It's completely different, from other OEMs as well as China.

Markham: 16:15

I interviewed an expert last year who was talk we we talked about, the EV as a as a rolling iPhone, and his point was that this is particularly important in the Chinese market because, Chinese citizens are very plugged into their mobile phones. Everything happens in an app and happens online, and and whether it's a social media app app or a banking app or a whatever it is, it's going through their phone, and they expect their their their automobiles, their transportation to interact with them in in the same way. And his point was that Tesla was, as you say, you know, kind of at the forefront of that, but the only companies that could compete with Tesla around that battery is, you know, car EV as an eye rolling iPhone were were some of the Chinese manufacturers.

Vivek: 17:11

Yes. And this is, I I do not disagree at all. I think we do call that in future, passenger vehicle will become smartphone on wheels because there are a lot of opportunities that passenger vehicles haven't really capitalized on, which is a smarter. So for example, your smartphone knows your next appointment. Your car doesn't.

Vivek: 17:35

In fact, you're going to sit in the car and travel to that. So, actually, the car should know where you are going next, and you don't have to really set your destination and set your journey time, etcetera. The car should know, but, obviously, the way the car is approached in isolation, in like a bubble, they don't know that. And therefore, battery electric vehicle has a necessity for, it to be connected, but over a period of time, all passenger vehicles, including cars, including trucks, including 2 wheelers, will go into this, similar similar framework that it is it has to be smart. It has to be connected.

Vivek: 18:16

It has to be a living space, and your life has to go on even when you're traveling.

Markham: 18:22

My next question revolves around the different segments of the EV market, and we see in North America and Europe where the EV manufacturers, a lot of them are OEM manufacturers. But even this is this is true of some like Lucid and and Rivian, is they're going after the premium market. They they think that they'll get to profitability quicker that way, but China has taken a very different, approach to this. Yes. They have premium brands.

Markham: 18:49

Of course, they do. But they also have developed vehicles for the lower end of the market and the middle of the market. And so for instance, in in, China, you can buy a a Guangdong, Mini for $45100 US. I mean, you could barely buy an electric bike in Canada for $45100, but here you can have a you can have a a full, you know, 4 wheels and and it it's actually a car. Is does that give China a a very significant leg up, in, you know, in the developing in industry, the fact that it can in hit these different consumer, markets?

Vivek: 19:30

I would put them as 2 different segments. What you're mentioning, sounds like a neighborhood electric vehicle to me. So these are, vehicles which are, which are not meant to travel at 200 kilometers an hour, which we don't need to. Right? These are meant to travel within the city where the speeds rarely exceed 50, 60 kilometers.

Vivek: 19:54

You know, our research, Frostman's eleven research indicates that 80% of the, rides in the passenger car happen when the driver is alone in the car. So you might have, like, 4 seats and you might design the car for the maximum load, but, it is not used 80% of the times. And, therefore, the whole approach and China has numbers to back it up, has the population to back it up, is, to create a lighter version of the vehicle, which is good enough for the city, which is good enough for daily use, and then, the customers can use another vehicle for intercity travel. Whereas, say in Canada or in US, the the vehicle is used as a, individual position, which is used by 1 person to go anywhere and everywhere. And the traveling distances, the speeds are also quite high, and that I would say is a big difference.

Vivek: 20:50

And that's why you you would find that, you have neighborhood electric vehicles and you have premium vehicles, and both of them have their own, place in the world. The reason why, premium vehicles succeed is because, the cost of battery is quite high as compared to engine. And, when you have a battery, which itself is going to be more costly, if you fit it in a vehicle that is going to be at a targeted at a middle class, you are not going to make too much of sense. So therefore, a premium luxury car, which is priced higher, makes better sense in EV, and therefore, all the OEMs are after that segment.

Markham: 21:31

What about the battery swapping? This you know, a couple of companies tried this early on in North America and failed. I hear that it might be coming back for big trucks, you know, class 8, long haul semitrucks, which makes sense. I mean, if you could you know, if you're a a long haul trucker and and you can pull into a a battery swap location, a station, and within 15 or 20 minutes, you can drive off with a a a fully charged fresh battery, that changes the the game probably for for long haul trucking, for for heavy the heavy duty market. But what about and and also, we I should point out that, you know, for for 2 and 3 wheelers, battery swapping has become, very popular in in Asia.

Markham: 22:20

You you you can, I guess, you can do a little shop and and you it's automated, and you can just take the battery out, put your battery in, and and away you go? It's it's very, very quick and and simple. Are we going to see that in China, and in China in Chinese, electric vehicles, are we going to see some form of battery swapping?

Vivek: 22:43

So there are some companies who are pursuing battery swapping as a strategy, and, that is, they are trying to set up the network and trying to make sure that, they they pursue this strategy as a differentiation. But there are some inherent challenges in battery swapping. First one being standardization of batteries. So, if all OEMs come together and decide that they will use same battery in all models and in all cars, Battery swapping is far more intuitive. But if, every OEM pursues, battery as their, differentiator battery as their key competency area and creates a different battery, then imagine what's going to happen at the battery swapping station.

Vivek: 23:29

If you have 100 different cars and 200 different batteries, then how are you going to make sure that any car that comes in gets a battery? And at the back end, they have to charge the battery. So number one challenge there is battery standardization. 2nd challenge there is safety. Battery, you know, saw looks when we keep using laptops and cell phones, we feel our batteries like just dry cell.

Vivek: 23:54

It's not because, when you put a battery of the kind of rating that you have in the car, It is a very big safety hazard and, the battery can heat up. Battery kit is is like explosive in itself if it was not handled properly. So any kind of battery swapping network. Let's say there is an error in fixing the battery. Let's say there is some, loose connection or some safety measure is not taken into account, or, to make the car available for battery swapping, you need to fit the, battery in such a way that it can be removed from outside without opening the car.

Vivek: 24:35

That itself is a, potential design hazard. So all of these, all of these challenges, unless you overcome and unless there is a solution for that, I don't foresee battery swapping becoming very popular in the passenger vehicle segment. 2 wheelers is a different matter altogether because 2 wheelers, the batteries are much smaller. And, you know, you can carry the battery in your hand and, put it and bring it back. You can't do that with the car.

Vivek: 25:06

The battery may weigh a ton, so you can't do that. So it has to be automated. I'm not sure about, this, trucks, but I do believe that, for trucks, they've there are restrictions on how much a driver can drive in a day. And if you look at how much time they are supposed to rest and spend, then, charging in that particular time and giving the range for the full day travel is a far more, sensible solution, or making sure that you give a interim charge when they stop for a lunch or a coffee break. That is a far more intuitive and far more hassle free solution than battery swapping in my opinion.

Markham: 25:53

Fair enough. Now one topic that has really become I'm very interested in it because I was at the 24th World Petroleum Congress in Calgary a couple of weeks ago, and they were the, oil and gas industry is doing its level best to redefine the narrative around the energy transition. So instead of displacing oil fossil fuels, particularly, oil and gas, they're arguing that the growth in population between now 2050 combined with the desire to lift people out of energy poverty will actually maintain demand and grow demand for oil in particular. Might you might see a 130 barrels a day by by 2050, and it'll and and then the electric, vehicles will then simply takes kind of on the margins. You know?

Markham: 26:51

It it it won't displace oil. It won't displace the internal combustion engine. It'll take growth on the margins. And their argument is that, you know, low and middle income companies, emerging economies, you know, in in Africa, in Latin America, in certain parts of of Asia, they will continue with the the old the internal combustion engine technology. And intuitively, that doesn't seem right to me because the electric vehicle technology first of all, your fuel, you you is you know, I mean, some solar panels and a little microgrid in your whole neighborhood is can be set up for charging.

Markham: 27:31

Everybody can have a an electric vehicle or a 2 wheeler or a 3 3 wheeler, whatever the case is. So if I'm living in Africa, I'm more much more likely to have a small EV or a 2 wheeler than I am an internal combustion car. You know, that just seems intuitive to me. But I'm I'm curious about your take on this and if there's any data, any research that addresses this issue.

Vivek: 27:58

So battery electric vehicle as a solution, it's, you know, when you look at it, look at the world from, say, from the perspective of, say, Norway or Sweden or Canada or US, the world appears a lot different. There are a lot of states which are electricity deficient states. So there are a lot of states where, you know, the, challenges between whether 2 powerhouses or whether 2 power battery electric vehicle, which will run equally well or even better in on petrol or diesel. Secondly, the renewable energy, unless, becomes so popular and so, omnipresent, that, the entire electric vehicles can be charged by renewable energy. Just charging the car and running may not make a lot of sense because, let's say you're generating power by coal and charging electric vehicle and running.

Vivek: 29:02

You're actually causing more emission than a fuel efficient petrol or diesel engine. So, I would put it as a very, very long haul, filled with potholes, filled with challenges to go from the current state to 100% electric transportation all across the world. I think that is that is really a very big pipe dream. As far as, projections on oil are concerned, I'm I don't track that market, so it's very hard for me to say. But, even in our 2030 forecast of Frost and Slim, we are not expecting that the world will be icy engineering.

Vivek: 29:42

No. There will be growth. I see engine even by by the year 2030 or 2035 will remain the largest, powertrain across the world. Across the world, it will be IC engine that will be the largest segment followed by battery electric vehicle. And there would be even hybrid vehicles, which has some sort of engine inside, which will also exist.

Vivek: 30:08

So if you include a hybrid plus, IC engines together, which means vehicles that have some sort of engine inside. There's still more than 50%. So, I don't really foresee a situation in which everything is electric. Everything is just driving a battery electric by the law.

Markham: 30:28

Let me give you the perspective that we have here at Energy Media, which is that energy transitions by their very nature take many, many, many decades. The last one did, the last one that started in 19th century, which was the rise of cheap petroleum and the internal combustion engine, you know, really, really 60, 70 years. It it was a long it was a long time. And so we fully expect that, you know, before transportation is fueled entirely by electricity, it will be a long time yet. No there's no doubt about it.

Markham: 31:03

But the the the issue here is is not when whether it's 0 or a100, it's somewhere in between where energy systems get disrupted. It's the disruption that's that's critical. And, of course, you know, here in Canada, we're, you know, the 4th largest oil producer, and the oil producers talk about future oil demand, like, okay. We're a 103,000,000 barrels a day today, but, you know, if if in a decade we're at 80,000,000 barrels a day or 60,000,000 barrels a day, no problem. And that's not how markets work.

Markham: 31:39

You know, if you've got a 100,000,000 barrels a day of supply chasing 80,000,000 barrels a day of demand, your industry is seriously disrupted. Probably prices are volatile and low, and that affects then revenue for governments, and it affects the number of jobs available. I mean, that's a very, very big disruption for the for the oil industry despite the fact that, you know, maybe by 2050, battery electric vehicles may only be 50% of the market. Nevertheless, it's disrupted the the status quo and disrupted, you know, the the the old energy system. That's that's really, I think, what I'm interested in, and that's why I see that, you know, the emerging economies will be a battleground.

Markham: 32:21

Because China will want China's already setting up you know, Chinese Chinese EV manufacturers are already setting up distribution networks in some of these countries, and, you know, they're settling in for the long haul. They think that they can own those markets, and especially as North America builds out its electric vehicle. You know, it's gonna take them time before they it'd be, who knows when they'll they'll export EVs. And so that gives China an opportunity to get a really strong foothold in what could be very big markets, you know, in 20 40, 2050, 2060.

Vivek: 32:55

Yes. I'll break up your question into 2 parts. 1 is, what happens when the demand of oil declines, and, how do oil companies, survive or what do they do? You know, the industry is disrupted. There is absolutely no doubt about it.

Vivek: 33:09

So there is no debate about whether it is disrupted or not. But whether oil companies will survive or they'll die is a different question altogether because, oil has this, I would say, very specialty where they produce only when they see a demand, and they can quickly do so. So oil companies, really struggle when there is uncertainty or when there is a sudden drop in the demand. But if they know that the steady demand is at x level, they actually work backwards and start producing less and make sure that they always remain profitable. I think that is something that is their inherent position, their their skill, or, unique market position that they have, which will allow them to do so.

Vivek: 33:56

So, I mean, that is, of course, I am no expert on oil companies. I don't track that market, but this is what I understand as a allied industry to the automotive. Now, your second question is, does time China have an opportunity to enter into all the developing markets and directly make them electric vehicles, without going through the pains of or the stages of IC engines. Theoretically, yes. But, electric vehicle is a system play.

Vivek: 34:25

It is not a product play. So when I say system play, it means that you need to have electricity or electricity needs to be coming from renewable energy. You need to have a proper distribution. Most of this power distribution, happens through government companies, which are very inefficient. There are subsidies involved.

Vivek: 34:47

There are leakages involved, Then the electricity reaches, your plug point, and then you sell the car. So just selling the car is not the end game as far as battery electric vehicles are concerned. And therefore, even if you open distribution channel and even if you set up, bring all your swanky cars, unless you have, this entire, whatever is below the eye level, sorted out. So selling the car is just the tip of the iceberg, but, there is a lot that happens before even the car gets sold. Now as far as, petrol engines or diesel engines are concerned, that system is quite sorted.

Vivek: 35:30

As far as electricity is concerned, it is not.

Markham: 35:33

Yeah. I like the way you frame that as a system play versus a a product play. And that's not a way that not a frame that I had used to think about it, but I think that's very, very useful. Vivek, this has been a fascinating conversation. Any final thoughts on the Chinese, electric vehicle manufacturing sector, where the technology is going, where China is going, you know, policy wise, that sort of thing?

Markham: 36:00

Any any final thoughts?

Vivek: 36:03

I think the world has to be ready for Chinese automotive and Chinese battery electric vehicles. They have found, found this niche in which they are leading, and that is supported by, I would say, developed world. So for example, this idea first came to the Europeans that we should have battery electric vehicle. But now, suddenly, it is the Chinese players who are at the forefront, who have, the niche, and who have the, capability, which is far better than those who develop the policy. So that's a very unique market situation, and the world has to be ready for it.

Vivek: 36:42

So, you you may be caught in the mindset of a Chinese product is, you know, has this kind of properties. Maybe it's value for money, but it's not so good, etcetera. But that is not the case, and the world has to be ready to accept the Chinese, battery electric vehicles with open house.

Markham: 36:59

Well, we'll be interested to see because, of course, the Europe is already opening a an investigation into, Chinese EV manufacturers, you know, being heavily subsidizing prices, unfair competition, and so we'll see where that goes. I think that'll be the the test case. But, Vivek, thank you very much for this. This has been very, very interesting.

Vivek: 37:19

Thank you so much for inviting me. I really enjoyed the chat.