1 00:00:05,304 --> 00:00:07,345 Good morning Grid Connections listeners. 2 00:00:07,345 --> 00:00:14,429 This is a podcast where we discuss electric transportation, clean energy options, and our power grid tying all of this together. 3 00:00:14,449 --> 00:00:17,531 Today we're thrilled to be joined by John McElroy again. 4 00:00:17,531 --> 00:00:22,534 He's the president of Auto Line Network and one of the most respected voices in the auto industry. 5 00:00:22,534 --> 00:00:31,770 In this episode, John brings his wealth of expertise to the table as we discuss the ongoing transformation of the automotive landscape from electrification to global 6 00:00:31,770 --> 00:00:32,838 competition. 7 00:00:32,838 --> 00:00:37,712 the rise of autonomous vehicles and the shifting dynamics in the US auto industry. 8 00:00:37,712 --> 00:00:46,859 We'll also touch on the increasing role of China in the EV market, the challenges posed by tariffs and the race to develop the next generation of vehicles. 9 00:00:46,979 --> 00:00:56,246 John's unique perspective gained through decades of covering the industry offers sharp insights into where we're headed and the hurdles we still have to clear. 10 00:00:56,246 --> 00:00:58,228 It's a conversation you won't want to miss. 11 00:00:58,332 --> 00:01:05,110 If you find this episode valuable, please take a moment to share it with at least one other person you think would enjoy these insights as well. 12 00:01:05,110 --> 00:01:08,864 And don't forget to leave us a positive review on the podcast page. 13 00:01:08,864 --> 00:01:11,477 It really helps us spread the word. 14 00:01:11,518 --> 00:01:13,009 Thanks for tuning in today. 15 00:01:13,009 --> 00:01:15,351 And with that, enjoy. 16 00:01:20,476 --> 00:01:24,259 there's a lot of topics I know we're going to be covering today. 17 00:01:24,259 --> 00:01:32,187 But John, just in case there's people listening that somehow is familiar with you and what you do at all, can just give us little quick background about your work. 18 00:01:32,187 --> 00:01:33,998 Yeah, first off, hey, thanks for having me back. 19 00:01:33,998 --> 00:01:37,070 I always love talking with you because we get into these great discussions. 20 00:01:37,070 --> 00:01:40,052 So I'm looking forward to today's as well. 21 00:01:40,052 --> 00:01:43,335 But yeah, we do a daily newscast, Outline Daily. 22 00:01:43,335 --> 00:01:49,498 We put it on our website, Outline .tv, like television. 23 00:01:50,299 --> 00:01:59,225 We do a live webcast with industry executives, experts, or others in the media who really follow this industry. 24 00:01:59,225 --> 00:02:01,851 Every Thursday, that's Outline After Hours. 25 00:02:01,851 --> 00:02:06,356 We also do a bunch of standalone videos about anything and everything to do with the industry. 26 00:02:06,356 --> 00:02:07,317 And that's where we're at. 27 00:02:07,317 --> 00:02:12,573 mean, we're hardcore car enthusiasts, but we're actually enthusiasts for the industry. 28 00:02:12,573 --> 00:02:16,757 We like to get into the nuts and bolts of how this thing works and where it's going. 29 00:02:18,142 --> 00:02:29,418 Yeah, and I think what I've always appreciated about your show is you have such a impressive, just knowledge, like whether it be motorsport to auto manufacturing and just 30 00:02:29,418 --> 00:02:30,439 kind of history of stuff. 31 00:02:30,439 --> 00:02:32,050 I think that's what I've always really enjoyed. 32 00:02:32,050 --> 00:02:40,275 I honestly, without you, I wouldn't have gotten my start in kind of doing this anyway, doing some of those auto line clips and hoping to do more stuff with you soon. 33 00:02:40,275 --> 00:02:43,817 But let's focus on some of the stuff going on today. 34 00:02:43,817 --> 00:02:46,280 And I think what's really fun too is just 35 00:02:46,280 --> 00:02:47,681 You're kind of in the heart of Detroit. 36 00:02:47,681 --> 00:02:48,462 You're always talking. 37 00:02:48,462 --> 00:02:53,086 You had a great conversation recently with Bob Lutz on Auto Line After Hours. 38 00:02:53,086 --> 00:02:58,770 And to be honest with you, his, I've definitely followed a lot of the stuff he said through electrification. 39 00:02:58,770 --> 00:03:09,920 And I found the conversation you guys had this past week to be pretty interesting where it was, he was still very bullish in a lot of ways around electrification, but specifically 40 00:03:09,920 --> 00:03:15,294 like his feedback is that just a lot of the legacy automakers just have too much 41 00:03:15,928 --> 00:03:20,732 kind of vestigial systems and management at these companies. 42 00:03:20,732 --> 00:03:26,176 And like his big thing was just like that they need a light in and kind of reduce some of this management. 43 00:03:26,176 --> 00:03:33,801 think there's been a lot of talk lately about layoffs at companies across the board, but I think a lot of people think about manufacturing around that. 44 00:03:33,801 --> 00:03:38,725 I'd I'd be kind of curious just to kind of talk with you and maybe recap a little bit of that conversation. 45 00:03:38,725 --> 00:03:42,403 Anything that stood out with you speaking with Bob Lutz and yeah. 46 00:03:42,403 --> 00:03:45,623 one, Chase, he's 92 years old. 47 00:03:45,623 --> 00:03:53,353 You know, and you expect to hear this, you know, forgetful, stumbling, you know, old guy and not like that at all. 48 00:03:53,353 --> 00:03:55,623 mean, the guy sharp as a tack. 49 00:03:55,783 --> 00:04:01,783 He never, you know, grasped for what was that word or what was that name or, you know, he was right there. 50 00:04:01,783 --> 00:04:03,473 I thought his insights were brilliant. 51 00:04:03,473 --> 00:04:10,055 Not everybody agrees with what he had to say, but yeah, I thought especially his comments. 52 00:04:10,055 --> 00:04:20,975 on leadership, on management, and on boards of directors is something that anybody who is an executive in the industry should listen to. 53 00:04:20,975 --> 00:04:22,585 I'm not just trying to promote my show. 54 00:04:22,585 --> 00:04:31,095 I'm saying you should go and listen to what this 92 year old, who remember, he worked at Ford, he worked at General Motors, he worked at Chrysler, he worked at BMW. 55 00:04:31,095 --> 00:04:37,087 This guy's just got an amazing amount of experience and he's obviously got great insights as to what's happening. 56 00:04:37,396 --> 00:04:45,802 Yeah, and I think to be honest with you, surprised me about the conversation is I just felt like for a long time, some of the conversations I'd heard are like his things to me 57 00:04:45,802 --> 00:04:48,794 sounded kind of dated or just weren't. 58 00:04:50,922 --> 00:04:58,382 I think there's a fine line between obviously being like overly bullish and like thinking, electric vehicles are here and they're going to be 100 % by next year. 59 00:04:58,382 --> 00:05:08,542 But for a while there, there's a lot of conversation sometimes on auto line, on others I'd seen with them over the years that just, sounded more like the, I don't want to say like 60 00:05:08,542 --> 00:05:12,752 traditional auto exact thing, but even that they were just kind of like similar themes. 61 00:05:12,752 --> 00:05:15,838 And this was just, as you said, he's 92 years old. 62 00:05:15,838 --> 00:05:25,667 But his insights and I didn't agree with everything, but I still thought he had really good points and logic behind a lot of the reasons he thought that way. 63 00:05:25,667 --> 00:05:29,471 And just like the way he talked about globally with China, totally, totally. 64 00:05:29,471 --> 00:05:31,791 no, I don't agree with everything that he said. 65 00:05:31,791 --> 00:05:42,451 In fact, I thought he was kind of conflicted himself on sort of trashing the administration for forcing EVs and then on the same sentence, he talks about he's on the 66 00:05:42,451 --> 00:05:44,931 board of directors of this breakthrough company. 67 00:05:44,931 --> 00:05:46,571 What do you call it? 68 00:05:46,671 --> 00:05:49,111 Material 14, I can't remember the name off it. 69 00:05:49,111 --> 00:05:54,211 But anyway, they're trying to figure out how you charge an electric car in five to eight minutes. 70 00:05:54,363 --> 00:06:05,613 You know, here on one side he's, you know, questioning the political move into EVs and yet on the other side, on the business side, he's pushing it as hard as he can. 71 00:06:06,750 --> 00:06:09,392 Yeah, no, I thought it was pretty fascinating. 72 00:06:09,793 --> 00:06:17,469 And yeah, I think just the topics and stuff he brought up was a pretty, I wouldn't say bullish or bearish. 73 00:06:17,469 --> 00:06:26,616 You just kind of walked a interesting line and overall was just a very, I think astute, I guess is the best way to describe it. 74 00:06:26,616 --> 00:06:31,040 Just look at the global industry and his thoughts on China and what's going on there and some of these things. 75 00:06:31,040 --> 00:06:36,434 And I know that was one of the things I want to talk to you about and something you guys have been covering as well as just 76 00:06:36,690 --> 00:06:44,903 since we're in this election year and even leading up to it and really just the past few years when you look at China and a lot of the tariffs that are now being proposed and 77 00:06:44,903 --> 00:06:46,947 being put on Chinese EVs. 78 00:06:46,947 --> 00:06:51,854 I'm really curious on just maybe what your thoughts are on this and how you see that evolve. 79 00:06:52,071 --> 00:06:53,151 Sure. 80 00:06:53,171 --> 00:06:56,141 Well, look, China's got this EV thing locked up. 81 00:06:56,141 --> 00:06:58,841 You let them run rampant, they're going to take over the world. 82 00:06:58,841 --> 00:07:00,511 mean, I'm not exaggerating. 83 00:07:00,511 --> 00:07:06,531 They will take over the global automotive market and drive just about everybody else out of business. 84 00:07:06,931 --> 00:07:10,291 Everybody else is not interested in seeing that happen. 85 00:07:10,291 --> 00:07:13,731 And so the US has taken the most aggressive stance. 86 00:07:13,731 --> 00:07:19,879 When Trump was president, he put a 25 % import tariff on any Chinese EV. 87 00:07:19,879 --> 00:07:22,659 on top of the 2 .5 % they had to pay. 88 00:07:22,659 --> 00:07:31,039 And then the Biden administration just bumped that up to 100 % tariff plus the 2 .5 % that was always there. 89 00:07:31,039 --> 00:07:41,439 So, I mean, this is the one place where the Democrats and the Republicans are in complete agreement on they are not gonna let the Chinese into this market. 90 00:07:41,439 --> 00:07:47,759 And there's no question in my mind that the Chinese would pretty much wipe out the US auto industry. 91 00:07:47,759 --> 00:07:49,511 So we need tariffs. 92 00:07:49,511 --> 00:07:52,221 But having said that, tariffs are not the solution. 93 00:07:52,221 --> 00:07:53,731 This is not the answer. 94 00:07:53,731 --> 00:07:57,891 All the tariffs do is buy the US industry sometime. 95 00:07:57,891 --> 00:08:03,911 Europe's looking at doing the same thing, though they're not nearly as aggressive on the tariffs that they're implementing. 96 00:08:04,611 --> 00:08:07,791 yeah, mean, this buys time. 97 00:08:07,791 --> 00:08:14,355 In fact, I would love to see whichever administration this empowers, let's say in 2030. 98 00:08:14,587 --> 00:08:22,191 Give the industry another decade and say, you know, we're going to slowly start to phase these tariffs out year by year until they're gone. 99 00:08:22,191 --> 00:08:26,634 So now you have a known period of time where you better get competitive. 100 00:08:26,634 --> 00:08:34,458 And everybody points to Chinese subsidies and, you know, the week Yuan versus the dollar and Uyghur labor and all this other stuff. 101 00:08:34,458 --> 00:08:35,709 But they can't control that. 102 00:08:35,709 --> 00:08:39,021 What they can control are their own internal operations. 103 00:08:39,021 --> 00:08:43,733 And, you know, as you were suggesting there, I mean, that Bob Blutz was talking about. 104 00:08:44,215 --> 00:08:49,458 legacy operations are very, very slow and inefficient. 105 00:08:49,478 --> 00:09:00,164 And so it's no longer an answer to keep beating up your suppliers for lower cost if you're an automaker or lay off people and fight your union. 106 00:09:00,164 --> 00:09:10,750 You've got to design the product in new and innovative ways, much of the ways that Tesla has always already blazed. 107 00:09:10,790 --> 00:09:12,923 And, know, Elon Musk talks about 108 00:09:12,923 --> 00:09:16,685 first principles thinking when attacking any engineering problem. 109 00:09:16,685 --> 00:09:21,387 This is how SpaceX was able to bring rockets back from space and land them on their tails. 110 00:09:21,387 --> 00:09:29,470 They attacked the physics that were blocking that and knocked that all down through first principles thinking. 111 00:09:29,470 --> 00:09:36,373 What I'm saying is these legacy automakers got to use first principles thinking on their corporate structure. 112 00:09:36,373 --> 00:09:41,297 They are not structurally organized to be fast and agile. 113 00:09:41,297 --> 00:09:42,588 They're just not. 114 00:09:43,350 --> 00:09:49,276 so that's really what I hope with the tariffs by time for. 115 00:09:49,276 --> 00:09:55,323 It's for these companies and it's gonna be drastic and it's gonna be bloody, but they're going to have to restructure themselves. 116 00:09:55,760 --> 00:09:58,652 Yeah, no, I mean, you cover a lot of interesting things there because I agree with that. 117 00:09:58,652 --> 00:10:03,825 don't think tariffs are necessarily the right method to try and fix this. 118 00:10:03,825 --> 00:10:05,016 And I am concerned. 119 00:10:05,016 --> 00:10:06,617 Is it it delaying the evidence? 120 00:10:06,617 --> 00:10:11,480 Is it giving them time or does it kind of just reinforce like, well, now we don't worry about China. 121 00:10:11,480 --> 00:10:16,213 We can keep building large SUVs and these other things that make us a lot of money. 122 00:10:16,254 --> 00:10:16,651 But 123 00:10:16,651 --> 00:10:19,412 why we got to pull the tariffs off because you're absolutely right. 124 00:10:19,412 --> 00:10:26,774 If the tariffs are, you know, the wall is up, they're going to say, OK, we'll build big SUVs and pickups till the end of eternity. 125 00:10:26,774 --> 00:10:29,055 But, you know, look at what just happened this week, too. 126 00:10:29,055 --> 00:10:40,698 The Commerce Department came out and said, we're going to prohibit any connected or autonomous Chinese vehicle and or the software or hardware from coming into this country. 127 00:10:40,698 --> 00:10:45,689 And there was a realization that the tariffs really weren't going to work. 128 00:10:45,689 --> 00:10:57,803 in the sense that Chinese automakers could start assembling vehicles in Mexico and come into the US market via the USMCA trade agreement, or they could go to some other country 129 00:10:57,803 --> 00:11:03,794 that has a trade agreement with the United States like Vietnam and bring cars in that way. 130 00:11:03,794 --> 00:11:09,186 And the way our trade structure or trade laws are right now, there's nothing stopping them. 131 00:11:09,186 --> 00:11:12,759 And so commerce came up with this idea of, okay, 132 00:11:12,759 --> 00:11:18,210 got to block any connected or autonomous vehicle and all the associated hardware and software. 133 00:11:18,210 --> 00:11:23,319 That is going to be far more effective at preventing the Chinese from getting into this market. 134 00:11:23,956 --> 00:11:25,647 Well, that's actually a really interesting topic. 135 00:11:25,647 --> 00:11:34,613 And one of the things I did want to talk to you about, because in some ways that is almost a bit of a tit for tat because that was one of the big things that China has actually 136 00:11:34,613 --> 00:11:44,821 obviously always been pretty big about is whether like even with Tesla's and some other cars going into the market about whether it be cameras and anything collecting data that 137 00:11:44,821 --> 00:11:47,342 the data centers have to be there in China. 138 00:11:47,643 --> 00:11:49,794 And I agree with you. 139 00:11:49,794 --> 00:11:52,830 think that is a very direct. 140 00:11:52,830 --> 00:11:55,652 but also probably a more effective way to go about it. 141 00:11:55,652 --> 00:12:06,780 And honestly, also I think much more socially and culturally relevant in today's day, today's age versus just slapping a tariff on something just because we're seeing such a 142 00:12:06,780 --> 00:12:12,964 large introduction of so much more different layers of tech stacks in these cars. 143 00:12:13,285 --> 00:12:15,947 Is there, is there anything in your opinion? 144 00:12:15,947 --> 00:12:20,150 I'm just curious of, it seems like everything that's being 145 00:12:20,510 --> 00:12:24,697 proposed or initiated is really around, it's kind of like the stick. 146 00:12:24,697 --> 00:12:35,544 Is there anything in your opinion that's more of a carrot that you think would be an effective way to kind of accomplish some of these things we're talking about? 147 00:12:36,283 --> 00:12:39,484 Well, you know, look, the marketplace is the greatest carrot. 148 00:12:39,484 --> 00:12:44,625 You know, if you do your things right as an automaker, you're going to sell a lot of cars and make a lot of money. 149 00:12:44,625 --> 00:12:47,766 And if you're running the companies, you're going to get massively big bonuses. 150 00:12:47,766 --> 00:12:50,847 So there's all the motivation that they need right there. 151 00:12:50,847 --> 00:12:58,769 But I think there's a need for a lot more collaboration within the industry. 152 00:12:58,769 --> 00:13:01,710 think the automakers need to collaborate more amongst each other. 153 00:13:01,710 --> 00:13:06,311 Suppliers, automakers, two suppliers, suppliers, two automakers. 154 00:13:06,671 --> 00:13:12,435 because there's a lot of redundant work that's being done. 155 00:13:13,256 --> 00:13:16,618 Just one example, just make an example. 156 00:13:16,618 --> 00:13:20,101 Every car has a windshield washer, right? 157 00:13:20,101 --> 00:13:23,502 There's a pump to pump water to clean your windshield. 158 00:13:24,464 --> 00:13:35,527 Why can't the auto industry in the US or Europe or both or whatever, Japan, Korea, agree, look, why don't we just set one spec for the pump and everybody buy it? 159 00:13:35,527 --> 00:13:42,587 Now we'll have economies of scale in the tens of millions and the price will drop to almost nothing. 160 00:13:42,587 --> 00:13:53,127 And then now think about that through, I use the pump as one example, there's myriads of components in a car that the customer could care less about, really doesn't have anything 161 00:13:53,127 --> 00:13:56,127 to do with the brand image or anything like that. 162 00:13:56,127 --> 00:14:02,527 Why not collaborate and say, hey, look, the Chinese have got a 35 % cost advantage on us. 163 00:14:02,527 --> 00:14:05,543 That's what Alex Partners that studied this says. 164 00:14:05,543 --> 00:14:10,403 So, you know, beating up your suppliers is not gonna get 35%. 165 00:14:10,403 --> 00:14:18,383 But collaboration, where you eliminate all kinds of duplication of work and investment could save a ton of money. 166 00:14:18,383 --> 00:14:21,183 You know, take that to a powertrain. 167 00:14:21,183 --> 00:14:26,563 We know that the sunset for ice is somewhere out there on the horizon. 168 00:14:26,563 --> 00:14:33,991 And yet all these automakers, and I'll just pick, you 1 .5 liter, 1 .6 liter gasoline engines, they all make them. 169 00:14:33,991 --> 00:14:36,491 They're all within millimeters of the same size. 170 00:14:36,491 --> 00:14:38,691 They're within grams of the same weight. 171 00:14:38,691 --> 00:14:42,351 They all make the same power, same emission, same fuel economy. 172 00:14:42,351 --> 00:14:47,351 And again, for most applications, the customer could care less what's under the hood. 173 00:14:47,351 --> 00:14:48,671 Transmission's the same thing. 174 00:14:48,671 --> 00:14:51,711 Five -speed, six -speed, seven - to eight -speed, whatever. 175 00:14:51,711 --> 00:14:54,431 They don't even know what they have, most consumers. 176 00:14:54,431 --> 00:15:00,551 Enthusiasts, of course, and that's important to them, but enthusiasts are maybe 10 % of the car buying public. 177 00:15:00,911 --> 00:15:01,831 So... 178 00:15:01,831 --> 00:15:06,213 think that example, especially they're trying to accomplish much different things. 179 00:15:06,213 --> 00:15:15,398 An enthusiast may want a Tiptronic or a manual that has more of that feel, whereas the general consumer probably just wants the most miles per gallon. 180 00:15:15,398 --> 00:15:18,580 And that's where you get these large seven or eight speed kind of automatics. 181 00:15:18,580 --> 00:15:20,161 But in the end, they don't care less. 182 00:15:20,161 --> 00:15:22,072 They just care more about the end result. 183 00:15:22,085 --> 00:15:22,355 Right. 184 00:15:22,355 --> 00:15:29,281 So anyways, the point I'm making is there's a lot of room for collaboration to take cost out. 185 00:15:29,341 --> 00:15:36,547 And I'm sort of preaching this right now because somebody's got to start getting the idea planted and get these companies moving on it. 186 00:15:36,607 --> 00:15:38,549 And it's not going to happen overnight. 187 00:15:38,549 --> 00:15:39,700 It's going to be very slow. 188 00:15:39,700 --> 00:15:41,671 It's going to be very uncomfortable for them. 189 00:15:41,671 --> 00:15:51,239 But, you know, if you look at Renault in France, it spun off its whole ice power train operations as a separate company called HORSE. 190 00:15:51,247 --> 00:15:57,384 And now Volvo and Geely, Geely owns Volvo of course, have joined in and said, yeah, we want to be part of this too. 191 00:15:57,384 --> 00:16:01,519 And that's just one little example of where this could go. 192 00:16:02,922 --> 00:16:07,986 So do you think kind of just there's kind of some interesting trends here. 193 00:16:07,986 --> 00:16:20,537 So one of the other things that we've kind of talked about is the fact that there's a lot of manufacturing plants and just resources in general that are really at under capacity. 194 00:16:20,697 --> 00:16:30,356 And by kind of implementing what you're talking about, while there'd be obviously very large cost savings, wouldn't that also kind of just make that problem even worse instead 195 00:16:30,356 --> 00:16:31,356 of there being 196 00:16:31,498 --> 00:16:36,338 10 companies making, let's say, the window washing pump, there's two. 197 00:16:36,338 --> 00:16:39,878 And now you have these factories that are no longer making that. 198 00:16:39,878 --> 00:16:44,192 I mean, what are your thoughts on that and what that kind of inevitably leads to? 199 00:16:44,192 --> 00:16:50,516 yeah, no, look, if we keep doing the things the way that we're going right now, those plants are going to go out of business anyway. 200 00:16:50,556 --> 00:17:01,542 So there's an opportunity to save it and, you know, especially save a lot of the communities that are where those, surviving plants are located. 201 00:17:01,542 --> 00:17:09,705 So I think there's a real need to do this because look, China has so much over capacity. 202 00:17:09,705 --> 00:17:10,183 Right. 203 00:17:10,183 --> 00:17:15,953 it could easily supply the entire US market with its overcapacity. 204 00:17:15,953 --> 00:17:21,523 It could easily supply the entire European market with all its overcapacity. 205 00:17:22,723 --> 00:17:27,183 and even in the US and Europe, there's overcapacity, not nearly as bad as China. 206 00:17:27,183 --> 00:17:30,523 But yeah, look, this is a big issue. 207 00:17:30,763 --> 00:17:34,363 The US market, car market has not recovered from COVID. 208 00:17:34,363 --> 00:17:38,013 You know, we'll be lucky to sell 16 million cars this year. 209 00:17:38,013 --> 00:17:38,703 That's a 210 00:17:38,703 --> 00:17:42,105 a million units below what we were pre -COVID. 211 00:17:42,105 --> 00:17:43,386 In Europe, it's even worse. 212 00:17:43,386 --> 00:17:46,128 There are two million units below pre -COVID. 213 00:17:46,128 --> 00:17:48,079 Japan, it's flatlining. 214 00:17:48,079 --> 00:17:49,270 Sales are going nowhere. 215 00:17:49,270 --> 00:17:50,791 Same with Korea. 216 00:17:50,791 --> 00:17:55,133 So, you know, we're at an era right now that I call peak auto. 217 00:17:55,153 --> 00:17:59,616 I don't think car sales in the major markets are going to grow anymore. 218 00:17:59,616 --> 00:18:04,999 In developing areas, yes, Africa, Latin America, Southeast Asia. 219 00:18:05,083 --> 00:18:07,806 But for the big markets, the growth is over. 220 00:18:07,806 --> 00:18:09,468 There is no more growth. 221 00:18:09,468 --> 00:18:16,865 And so how do you deal with that as an industry where there's no hope for growing except maybe raising your prices every year? 222 00:18:17,512 --> 00:18:25,658 No, I think that's an interesting point and something I've kind of thought about and I'm not to go down a rabbit hole, but I'm kind of curious on your thoughts on you mentioned 223 00:18:25,658 --> 00:18:27,199 Latam and Africa especially. 224 00:18:27,199 --> 00:18:35,775 And one of the things I've noticed that I thought was really fascinating about both of those markets was actually in the cellular industry for a long time. 225 00:18:35,775 --> 00:18:46,622 Those have been areas that have been underserved or just had challenges with whether it be telephone lines or Internet and kind of bypassed doing all of that with the revolution. 226 00:18:46,798 --> 00:18:53,806 cellular connectivity for not just phone calls but internet and having in a lot of areas much better 227 00:18:55,550 --> 00:19:02,342 just options for getting cell or internet connectivity through cellular versus kind of what we've seen here in the U .S. 228 00:19:02,342 --> 00:19:03,252 and Europe. 229 00:19:03,252 --> 00:19:06,763 Do you think talking about cars we might see a similar thing? 230 00:19:06,763 --> 00:19:10,424 Obviously it's still early days for kind of autonomous vehicles and ride hailing stuff. 231 00:19:10,424 --> 00:19:25,012 But if you are a company and I do feel like there have been some large public companies that have said well there's growing potential in Latam and Africa and other areas. 232 00:19:25,012 --> 00:19:39,845 But do you think that that might be also instead of everyone buying a car, they're more just like, okay, there's actually electric ride hailing or autonomous vehicles I can take. 233 00:19:39,845 --> 00:19:43,509 And so that kind of changes that being a long -term revenue play for them. 234 00:19:43,509 --> 00:19:44,229 Does that make sense? 235 00:19:44,229 --> 00:19:47,380 Do you think that that's even realistic or yeah. 236 00:19:47,380 --> 00:19:54,142 you look, you and I both thought AVs would be here in a more widespread basis than they are right now. 237 00:19:54,142 --> 00:19:57,173 I mean, I would hope, especially Africa, go that route. 238 00:19:57,173 --> 00:20:03,024 Latin America is a pretty, it's a car culture, you know, it's got all the infrastructure and everything there. 239 00:20:03,024 --> 00:20:04,625 Africa is still building. 240 00:20:04,625 --> 00:20:12,219 I would hope that they could leapfrog, you know, the traditional automobile infrastructure that we have today and 241 00:20:12,219 --> 00:20:16,602 To your example, the cell phone, make the leap. 242 00:20:16,602 --> 00:20:21,505 No need to put up a bunch of telephone poles and wires all over the place. 243 00:20:21,505 --> 00:20:22,646 Just go cellular. 244 00:20:22,646 --> 00:20:33,953 And hopefully we could see the same sort of thing happen with automotive transportation, that we have a new solution that avoids all this congestion and traffic accidents and 245 00:20:33,953 --> 00:20:37,835 fatalities and all the pollution and everything that goes along with it. 246 00:20:40,138 --> 00:20:41,929 Well, no, I'm glad to hear that. 247 00:20:41,929 --> 00:20:43,369 That's kind of how I viewed it. 248 00:20:43,369 --> 00:20:45,159 But yeah, I think there's still a long road to that. 249 00:20:45,159 --> 00:20:48,420 But it's definitely been something I've been kind of thinking more about. 250 00:20:48,420 --> 00:20:53,202 I guess talking about the autonomous space and how we both maybe be here a little bit sooner. 251 00:20:53,202 --> 00:21:01,614 What is your because I think you even mentioned this on one of your episodes how you've been in and I've been in Phoenix to where they've got Waymo pretty much everywhere and you 252 00:21:01,614 --> 00:21:03,525 can take them from place to place. 253 00:21:03,525 --> 00:21:07,242 What do you think right now is kind of what's been holding that back? 254 00:21:07,242 --> 00:21:08,742 Is it more regulation? 255 00:21:08,742 --> 00:21:12,562 Is it more of these companies still not quite at the right scale? 256 00:21:13,242 --> 00:21:20,902 I'm just kind of curious what you're hearing, because obviously the big thing in the news, like for the last year, 18 months, was kind of like Cruz and others and so many of these 257 00:21:20,902 --> 00:21:24,322 others that were making big waves that just kind of came to a grinding halt. 258 00:21:24,462 --> 00:21:27,692 And obviously, Tesla is kind of making news about what they're trying to do. 259 00:21:27,692 --> 00:21:29,802 And we'll see what happens next month. 260 00:21:29,802 --> 00:21:34,011 But Waymo is actually out there doing this and pretty efficiently in certain markets. 261 00:21:34,011 --> 00:21:35,483 Yeah, no, I totally agree. 262 00:21:35,483 --> 00:21:44,942 Waymo's handled it really well, taking a very go slow approach, making sure everything works, making sure all the stakeholders are on board. 263 00:21:44,942 --> 00:21:51,749 And by that, mean local governments, police, fire, EMTs. 264 00:21:52,711 --> 00:21:57,325 And that was one of the cruises mistakes in San Francisco. 265 00:21:57,595 --> 00:22:05,637 is it just took a typical startup approach and we're the geniuses here, we're out to change the world and make it better, so get out of our way. 266 00:22:05,797 --> 00:22:12,919 And frankly, they pissed off a lot of people and when they ran into problems, that came back to haunt them. 267 00:22:12,919 --> 00:22:20,922 And so now they're trying to start over again with drivers, emergency drivers in the car and trying to establish that they're good guys. 268 00:22:20,922 --> 00:22:25,746 And I think that's one of the lessons is that 269 00:22:25,746 --> 00:22:29,419 the general public is still very leery of this technology. 270 00:22:29,419 --> 00:22:31,160 Very, very leery. 271 00:22:31,160 --> 00:22:39,257 Both you and I know, Chase, that all you have to do is grab one of those leery people, put them in an AV for about five minutes, and they'll forget all their worries. 272 00:22:39,257 --> 00:22:46,133 In fact, they'll probably be doing email or looking at something on their phone and not paying attention to how the car is driving. 273 00:22:46,133 --> 00:22:53,658 But right now, the public is very leery about it, and that's something that these AV companies very much have to take into consideration. 274 00:22:55,052 --> 00:23:02,111 they've got to proceed in a way where the stakeholders are on board and okay with them moving forward. 275 00:23:03,368 --> 00:23:04,599 No, I completely agree. 276 00:23:04,599 --> 00:23:06,511 And I think it'll be interesting to see. 277 00:23:06,511 --> 00:23:13,966 I wouldn't say it's gotten politicized yet, but I do feel like there has definitely been a lot of political pushback in certain markets. 278 00:23:14,107 --> 00:23:19,051 And it'll be kind of interesting to see how that's overcome and how I like. 279 00:23:19,051 --> 00:23:21,383 And like you said, I think Waymo has done a good job of that. 280 00:23:21,383 --> 00:23:22,754 Cruz and others. 281 00:23:22,954 --> 00:23:31,361 And I think it's also just really interesting the different strategies about how they're doing this, whereas like Waymo and even Cruz and a couple others were doing it market by 282 00:23:31,361 --> 00:23:31,741 market. 283 00:23:31,741 --> 00:23:32,522 And then you've got 284 00:23:32,522 --> 00:23:35,150 Tesla and kind of others that are doing more of a. 285 00:23:36,810 --> 00:23:40,825 Throw it at the entire system and entire problem and see what they can get to. 286 00:23:40,825 --> 00:23:42,857 Totally, 287 00:23:43,134 --> 00:23:47,577 know that Elon promises the moon or promises Mars, I guess I should say. 288 00:23:48,278 --> 00:23:55,563 And generally he delivers, but autonomy has been one thing that he's way behind schedule on. 289 00:23:56,315 --> 00:23:56,625 for sure. 290 00:23:56,625 --> 00:24:02,338 And I do think what's interesting with his it's been really interesting seeing how he's approached it. 291 00:24:02,338 --> 00:24:12,022 And then coincidentally, a lot of like the Chinese companies in the autonomous space that have just seemed to also be going down more of the camera approach. 292 00:24:12,022 --> 00:24:22,806 And I think it is a bit easier in a market like China where so much more of the stuff is specifically like highways and roads are not only just newer, but 293 00:24:23,176 --> 00:24:27,669 You're just dealing with a lot less of the variables here domestically, but I totally agree with you. 294 00:24:28,430 --> 00:24:32,292 There's still a long ways to go, even with the ones that are doing well. 295 00:24:32,332 --> 00:24:42,580 I guess one area to kind of look at in addition to that is, like you said, it's kind of building that trust and getting people bought into it. 296 00:24:42,580 --> 00:24:49,624 And right now I feel like, as I even mentioned, like it's kind of even becoming a little politicized. 297 00:24:49,624 --> 00:24:52,316 EVs especially have become politicized. 298 00:24:53,000 --> 00:24:55,911 What do you think is kind the way forward? 299 00:24:55,911 --> 00:24:59,092 I mean, you're in Michigan, you're in a swing state in an election here. 300 00:24:59,653 --> 00:25:10,488 Have you seen still an overall big shift in interest in electric vehicles or is it kind of what people hear and believe among others that are kind of holding it back from moving 301 00:25:10,488 --> 00:25:11,335 forward still? 302 00:25:11,335 --> 00:25:13,557 Well, look, you nailed it. 303 00:25:13,557 --> 00:25:14,527 It's politicized. 304 00:25:14,527 --> 00:25:18,220 So, you know, if you're blue, i .e. 305 00:25:18,220 --> 00:25:20,391 you're probably more bullish on EVs. 306 00:25:20,391 --> 00:25:24,143 If you're red, especially MAGA, you're dead set against them. 307 00:25:24,344 --> 00:25:35,452 And the only thing that's going to resolve that is getting more affordable EVs on the market, getting more charging stations, public charging stations around that are up and 308 00:25:35,452 --> 00:25:37,032 running all the time. 309 00:25:37,133 --> 00:25:40,763 And that's going to convince everybody. 310 00:25:40,763 --> 00:25:49,586 You know, even some of the hardcore people I know who are anti -EV will admit, yeah, somewhere out in the future we're all gonna be driving EVs. 311 00:25:49,586 --> 00:26:00,369 Part of their reluctance is, you know, the Republicans have successfully categorized this as the government shoving EVs down our throats. 312 00:26:00,629 --> 00:26:03,850 And look, there's a truth to that. 313 00:26:03,850 --> 00:26:07,495 As you know, there's no EV mandate per se, but there are. 314 00:26:07,495 --> 00:26:15,899 is also something Bob Lutz kind of mentioned the other day that there's no official EV mandate, but with the EPA requirements, it pretty much means you have to go EV. 315 00:26:16,582 --> 00:26:17,387 Yeah. 316 00:26:17,387 --> 00:26:29,907 And look, I think there will be a push in the next Congress, no matter who gets elected, to push the mix further back into the 2030s. 317 00:26:29,907 --> 00:26:40,027 So I think, you know, at first it was the original regulations, I think required something like 62 % or over 60 % EVs by 2032. 318 00:26:40,027 --> 00:26:43,047 I think everybody agrees that's probably not going to happen. 319 00:26:43,047 --> 00:26:46,007 And so the Biden administration changed the mix. 320 00:26:46,007 --> 00:26:49,927 And I think right now you only need like 32, 33 % EVs. 321 00:26:49,927 --> 00:26:55,987 The other part though has got to be a plug -in or an extended range EV. 322 00:26:55,987 --> 00:27:01,307 And that to me is a more realistic approach. 323 00:27:01,307 --> 00:27:06,767 And look, the goal is to get GHG emissions down, right? 324 00:27:06,767 --> 00:27:08,477 So why not move faster? 325 00:27:08,477 --> 00:27:12,527 And if you can get more people into an EREV or a PHEV, 326 00:27:12,827 --> 00:27:14,378 Don't hold back for perfection. 327 00:27:14,378 --> 00:27:17,851 Don't wait for the, you know, just a purely Bev world. 328 00:27:17,851 --> 00:27:19,042 Get them used to these things. 329 00:27:19,042 --> 00:27:20,203 Get them used to plugging in. 330 00:27:20,203 --> 00:27:26,639 Get them this idea in their head that, my gosh, gasoline is so much more expensive than electricity. 331 00:27:26,639 --> 00:27:28,460 I want to be plugging in. 332 00:27:28,601 --> 00:27:30,842 And it'll happen. 333 00:27:31,223 --> 00:27:41,461 But I think if they move, give the auto industry another design cycle, move the goalposts back another four or five years, would make all the difference in the world. 334 00:27:42,218 --> 00:27:53,418 Yeah, I think that's an interesting point because the plug and hybrid debate is when we have a lot on this podcast and it's, is kind of funny even anecdotally about like, okay, 335 00:27:53,418 --> 00:27:55,498 you go to that or people actually going to use it. 336 00:27:55,498 --> 00:28:01,018 And you do see people start like, if I had a UV and I mean the volt, a lot of early volt owners saw this too. 337 00:28:01,018 --> 00:28:05,778 It's like, well, if I had a full on electric vehicle, I'd never have to use the gas side of my vehicle. 338 00:28:05,778 --> 00:28:08,488 Cause I'm already using the majority of it. 339 00:28:08,488 --> 00:28:11,970 The battery side for 90 % of my driving anyway. 340 00:28:12,052 --> 00:28:13,873 But just anecdotally, it's really funny. 341 00:28:13,873 --> 00:28:24,190 My mother -in -law, recently got a, they got the plug -in hybrid Volvo, I think XC90 is what it is, the large SUV one. 342 00:28:24,190 --> 00:28:29,334 And they'd already had a Tesla and she actually plugs it in religiously. 343 00:28:29,334 --> 00:28:30,464 She actually uses it. 344 00:28:30,464 --> 00:28:33,656 She does that and tries to max it out as much as she can. 345 00:28:33,857 --> 00:28:42,042 On the other hand, my mom recently just got a Mercedes plug -in hybrid and I doubt she'll ever plug that thing in. 346 00:28:42,170 --> 00:28:45,843 And ironically, they also are have a Tesla themselves. 347 00:28:45,843 --> 00:28:50,716 And it's just it's an interesting thing to me that I totally agree with the theory. 348 00:28:50,716 --> 00:28:53,128 And you do see some people like kind of put it together as a guy. 349 00:28:53,128 --> 00:28:54,259 You know, this is doable. 350 00:28:54,259 --> 00:28:55,840 I can make that leap. 351 00:28:55,840 --> 00:29:02,705 But then it's like like your point was like, are we trying to do this to help with pollution, other things? 352 00:29:02,705 --> 00:29:06,648 Well, I don't know if that's actually going to be accomplished if people aren't doing it. 353 00:29:07,069 --> 00:29:09,418 And there just hasn't really been good data to. 354 00:29:09,418 --> 00:29:12,997 prove one way the other if people actually use plug -in hybrids or 355 00:29:13,049 --> 00:29:19,805 Yeah, the only good data I've seen is out of Europe and the Europe and the US markets are very different when it comes to P -Hebs. 356 00:29:19,826 --> 00:29:30,836 So yeah, my belief is if somebody deliberately buys a P -Heb because they know it's a P -Heb and that's what they want, they're going to plug it in. 357 00:29:30,836 --> 00:29:38,593 If they're taking a P -Heb because the dealer says, look, that's all I got on the lot, you want this, you got to take it, then they may not be plugging in. 358 00:29:38,740 --> 00:29:41,061 Well, and I think maybe it was just the UK. 359 00:29:41,061 --> 00:29:52,107 know that P have were part of the kind of tax incentive there, along with fully battery electric vehicles that if you use this, you pay less than taxes or something. 360 00:29:52,107 --> 00:29:53,958 You can have it as a company vehicle. 361 00:29:54,018 --> 00:29:59,281 And so for a lot of these people who are getting as a company vehicle anyway, they had a gas card. 362 00:29:59,281 --> 00:30:01,833 So, yeah, they were getting a P have, but they ended up just buying. 363 00:30:01,833 --> 00:30:07,946 I mean, it got better range than just the fully gas one, but it's just an interesting dilemma. 364 00:30:07,946 --> 00:30:09,847 I guess is the best way to describe it. 365 00:30:09,867 --> 00:30:11,349 But I do agree with you. 366 00:30:11,349 --> 00:30:14,041 think at least it's at least a step in the right direction. 367 00:30:14,041 --> 00:30:17,604 And it does kind of get that exposure. 368 00:30:17,604 --> 00:30:26,801 And it just does seem like when people actually start being exposed to whether it's that or fully battery electric, battery electric pretty quickly, they can see like, God, this 369 00:30:26,801 --> 00:30:28,102 actually does work with my life. 370 00:30:28,102 --> 00:30:37,850 And I think obviously, P have is have a lot of potential for those right now who live in apartments or other places where they just don't have that ability to plug in overnight. 371 00:30:38,801 --> 00:30:43,622 DC fast charging has come a long ways, but it's still like 90%. 372 00:30:43,622 --> 00:30:47,752 Hell, I put about 30 ,000 miles a year in my vehicle and it's still, could look it up. 373 00:30:47,752 --> 00:30:52,502 I think it's still like 70 to 80 % of it is still overnight level two charging. 374 00:30:52,502 --> 00:30:55,694 And that makes it just so much easier to have an EV. 375 00:30:55,771 --> 00:30:56,651 That's right. 376 00:30:56,651 --> 00:30:57,253 That's right. 377 00:30:57,253 --> 00:31:05,520 I'm very interested in EREVs right now, extended range EVs, because it's actually the hottest growing segment in China. 378 00:31:05,761 --> 00:31:09,784 And there's a lot of interesting work being done on that. 379 00:31:10,985 --> 00:31:14,489 I think we're going to see a lot more EREVs before the end of this decade. 380 00:31:14,489 --> 00:31:17,401 I think PHEVs will probably phase out. 381 00:31:18,100 --> 00:31:28,766 Do you think that that's going to be a universal product or it's going to be the product we see more like in heavy trucks and SUVs just because it helps them kind of get to that 382 00:31:28,766 --> 00:31:33,479 point more efficiently than a fully battery electric can it right now? 383 00:31:33,780 --> 00:31:37,947 Because I don't imagine seeing EREVs in small cars, I guess is what I'm saying. 384 00:31:37,947 --> 00:31:39,729 think we will see e -REVs in small cars. 385 00:31:39,729 --> 00:31:47,164 But to your point, when you've got a big SUV or full -size pickup, the battery pack, it's a pure BEV, it's got to be so big. 386 00:31:47,164 --> 00:31:58,553 It's so expensive that an e -REV is actually, even though you got two powertrains, it's actually cheaper because the batteries are so expensive. 387 00:31:59,678 --> 00:32:01,979 Well, and then you can put in a smaller engine and all this stuff. 388 00:32:01,979 --> 00:32:03,950 it kind of there. 389 00:32:03,950 --> 00:32:08,852 Yeah, I mean, I totally get it for like larger SUVs. 390 00:32:08,852 --> 00:32:14,484 And then you get kind of the pros, too, of having electric motors that help you with towing and stuff like that. 391 00:32:14,484 --> 00:32:17,465 So you can still do a lot of that truck stuff that. 392 00:32:18,206 --> 00:32:18,864 Yeah. 393 00:32:18,864 --> 00:32:20,345 from an acceleration standpoint. 394 00:32:20,345 --> 00:32:22,846 You can have one pedal driving, all that stuff. 395 00:32:22,846 --> 00:32:24,757 But here's another key. 396 00:32:24,757 --> 00:32:30,669 With an eREV, you run the generator engine in an optimum RPM range. 397 00:32:30,669 --> 00:32:37,252 So now you can start to take cost out of the engine because it doesn't have to go through the whole duty cycle of a normal ICE. 398 00:32:37,932 --> 00:32:44,895 And so the Chinese have taken advantage of this and companies like BYD and 399 00:32:47,150 --> 00:32:53,561 Chang 'an have come out with eREV engines that have got like 15 to 1 compression ratios. 400 00:32:53,561 --> 00:33:02,291 I mean you're bumping up against diesel compression ratios there and they've got claims of really impressive thermodynamic efficiency. 401 00:33:02,430 --> 00:33:04,581 44 % or something like that. 402 00:33:04,581 --> 00:33:15,651 You know keep in mind most ice engines on the road today are around 30 % thermodynamically efficient i .e 70 % of the energy of a gallon of gasoline goes out as heat or emissions. 403 00:33:15,655 --> 00:33:26,775 So getting it up to 44%, you automatically make the engine more efficient, theoretically can take out cost, and you get rid of the transmission. 404 00:33:26,775 --> 00:33:29,605 And if it's a rear drive vehicle, you get rid of the drive shaft. 405 00:33:29,605 --> 00:33:34,565 So there's mass and cost advantages to going to an EREV over a PHEV. 406 00:33:34,565 --> 00:33:37,791 And that's why I think we're going to see a lot more EREVs. 407 00:33:38,482 --> 00:33:40,244 No, and I completely agree with you. 408 00:33:40,244 --> 00:33:46,630 There's you start getting a lot more of the benefits of a battery electric by like less parts. 409 00:33:46,630 --> 00:33:47,972 Totally. 410 00:33:47,972 --> 00:33:53,738 I think that's something a lot of people don't fully appreciate, too, with the e -rev thing is you just have this engine when it's on. 411 00:33:53,738 --> 00:33:56,019 It's just going at a constant state. 412 00:33:56,080 --> 00:33:58,093 And that is huge for. 413 00:33:58,093 --> 00:33:59,124 actually it's not. 414 00:33:59,124 --> 00:34:14,876 It does rev up because one of the detracting points of an e -rev is when the battery gets low and now the generator is trying to feed power to the electric motors. 415 00:34:15,117 --> 00:34:18,039 It's not at idle. 416 00:34:18,260 --> 00:34:22,223 It's not at red line, but you got to run that generator a whole lot. 417 00:34:22,223 --> 00:34:27,247 mean, to get a car to pick up and accelerate quickly, 418 00:34:27,247 --> 00:34:29,173 Man, it takes a lot of power. 419 00:34:30,086 --> 00:34:30,717 Interesting. 420 00:34:30,717 --> 00:34:31,418 Okay. 421 00:34:31,418 --> 00:34:43,758 I understood it, at least in some of the versions I've seen where it is more of a, it's almost more like a diesel locomotive where it's at a more of a flat state, but 422 00:34:43,758 --> 00:34:45,681 in most states, you're absolutely right. 423 00:34:45,681 --> 00:34:48,366 It can run at just this optimum RPM. 424 00:34:48,366 --> 00:34:56,259 But like I said, once the battery, the main storage battery is depleted, the engine's gotta crank out a lot more electricity. 425 00:34:57,894 --> 00:34:58,754 Interesting. 426 00:34:58,754 --> 00:35:04,849 And that does kind of like play into some of the use cases that people talk about with having a traditional truck. 427 00:35:04,849 --> 00:35:12,054 Like if you're on a road trip towing something and then you've got this small little engine that's just going full blast trying to power the rest of the battery. 428 00:35:12,054 --> 00:35:14,866 It just seems like, I dunno. 429 00:35:14,866 --> 00:35:15,409 Interesting. 430 00:35:15,409 --> 00:35:16,079 small... 431 00:35:16,079 --> 00:35:19,993 Look at the RAM charger, the RAM pickup that... 432 00:35:20,314 --> 00:35:23,077 It's a V6 engine, exactly. 433 00:35:23,077 --> 00:35:24,198 That's the kind... 434 00:35:24,198 --> 00:35:33,507 I mean, that shows you how much electricity a big truck can need when it's, you know, pulling a load or going up a grade or anything like that. 435 00:35:33,886 --> 00:35:43,570 Well, it'll just be interesting to see because yeah, I think with a lot of the e -revs I've heard and I were like even in a Chevy Bolt, it's a much smaller engine and it's 436 00:35:43,570 --> 00:35:52,274 interesting to me, kind of like e -revs were pitched originally, at least from what I heard was they would be like, yeah, there'll be like a inline three or inline four 437 00:35:52,274 --> 00:35:53,755 cylinder, the small little thing. 438 00:35:53,755 --> 00:35:55,776 so it pollutes a lot less. 439 00:35:55,776 --> 00:36:00,668 But then in the applications where, yeah, you're playing in a V6, is it really saving that much? 440 00:36:00,668 --> 00:36:01,538 I'm not sure. 441 00:36:02,149 --> 00:36:03,109 Well, is. 442 00:36:03,109 --> 00:36:07,917 yeah, compared to a pure ice, absolutely it's better. 443 00:36:09,140 --> 00:36:11,571 So that no, I don't know. 444 00:36:11,571 --> 00:36:16,533 That's an interesting world, but it's definitely something you guys talk a lot about on auto line. 445 00:36:16,633 --> 00:36:17,564 And you're right. 446 00:36:17,564 --> 00:36:25,357 There's definitely been a lot of interest out of China, but it does seem like the legacy auto manufacturers are also very interested in it. 447 00:36:25,357 --> 00:36:30,239 I know Ram is kind of the big one that announced their own. 448 00:36:30,239 --> 00:36:35,181 But do you see or have you heard I forget is GM or Ford can announce? 449 00:36:35,181 --> 00:36:38,342 I think maybe Ford announced they were going to do something like that. 450 00:36:38,630 --> 00:36:40,730 soon but I don't know if there's been anything official. 451 00:36:40,730 --> 00:36:43,377 I haven't been watching that space and medley as closely. 452 00:36:43,377 --> 00:36:45,669 Ford hasn't announced anything official. 453 00:36:45,669 --> 00:36:56,998 Jim Farley publicly though has talked about his interest in EREVS because remember Ford's partner in China is Chang 'an and Chang 'an is one of the leaders in this. 454 00:36:57,780 --> 00:37:10,631 GM hasn't said anything but know GM just announced to tie up with the Hyundai Group, Hyundai, Kia, Genesis to develop a bunch of product stuff and Hyundai has talked to... 455 00:37:10,757 --> 00:37:12,870 that it's very interested in E -REVs. 456 00:37:12,870 --> 00:37:16,530 So that's about as much as I know, though. 457 00:37:16,530 --> 00:37:20,933 Yeah, you know, just because you brought up I'm kind of curious on your thoughts. 458 00:37:21,374 --> 00:37:30,480 You look at kind of what GM and Honda were doing with the Ultium tie up with this recent announcement with Hyundai and GM. 459 00:37:31,120 --> 00:37:41,918 Do you see that being a more successful or a larger scale partnership or what do you think about that in their electrification that made GM seem like a big partner? 460 00:37:41,918 --> 00:37:44,850 Because it seems like the inverse GM was 461 00:37:44,850 --> 00:37:47,974 not make a whole lot of EVs, but in some ways they were ahead of Honda. 462 00:37:47,974 --> 00:37:54,512 Whereas Hyundai's found a lot of success in EVs and now they're kind doing this partnership with GM that I think surprised a lot of people. 463 00:37:54,833 --> 00:37:59,227 Yeah, and this gets back to what I was talking about earlier of the need for collaboration. 464 00:37:59,227 --> 00:38:01,788 There's so much duplication of effort. 465 00:38:03,130 --> 00:38:11,597 It'll be interesting to see where GM and Hyundai wanna go because Hyundai's got hybrids, GM needs hybrids. 466 00:38:11,998 --> 00:38:16,341 That could be an instant collaboration. 467 00:38:16,722 --> 00:38:22,056 On the EV things, economy of scale is the key way to bring down cost. 468 00:38:22,056 --> 00:38:23,587 What could they share there? 469 00:38:23,739 --> 00:38:35,762 but also increasingly, what they call IVI in vehicle infotainment is becoming the most important part of the customer experience in a vehicle. 470 00:38:37,943 --> 00:38:40,694 the Chinese are super aggressive. 471 00:38:40,694 --> 00:38:42,324 They're in the lead in that. 472 00:38:42,324 --> 00:38:52,647 And this latest move by the State Department, or not State Department, Commerce Department to prohibit Chinese hardware and software with stuff that touches on IVI, 473 00:38:53,489 --> 00:39:01,847 There's going to be a mad scramble to try to lock up with, hook up with tech companies that can do it. 474 00:39:01,847 --> 00:39:10,935 know, GM has announced they wanted to do all this IVI stuff in -house, maybe collaborating with the Hyundai Group is a way to make that go easier. 475 00:39:11,538 --> 00:39:12,028 Interesting. 476 00:39:12,028 --> 00:39:22,821 Because I know there have been some recent ish, maybe a month or two back, kind of announcements that I believe GM made around layoffs on their software side. 477 00:39:22,861 --> 00:39:32,614 And they've put such a big push into software as kind of going their own way versus what a lot of people kind of seem to be doing, which was using CarPlay as kind of almost a crutch 478 00:39:32,614 --> 00:39:36,625 and then falling back to their own internal product. 479 00:39:36,625 --> 00:39:38,666 And that seems to be changing a bit. 480 00:39:38,666 --> 00:39:40,648 Do you find that to be 481 00:39:40,648 --> 00:39:53,237 because the company themselves are realizing that that just isn't as plausible of a plan or is it they're also kind of getting pressure internally, maybe even from stockholders 482 00:39:53,237 --> 00:39:57,329 and stuff to have that differentiation and that kind of knowledge expertise. 483 00:39:57,329 --> 00:40:01,342 Yeah, that's a great question and I don't have a really good answer, but I'll say this. 484 00:40:01,342 --> 00:40:10,920 Remember earlier this year, General Motors announced opening a big software operations in California in the Valley. 485 00:40:10,920 --> 00:40:17,155 just because you're a software engineer doesn't necessarily mean you know how to code the right stuff. 486 00:40:18,457 --> 00:40:26,003 just because you're a software engineer doesn't necessarily mean, especially if you've been working on legacy systems, that you... 487 00:40:26,011 --> 00:40:33,293 really fully understand how to approach this on a total systems basis, such as is required in a software defined vehicle. 488 00:40:33,313 --> 00:40:38,265 So it's entirely possible that GM said, hey, look, we just opened this place in California. 489 00:40:38,265 --> 00:40:41,555 We're hiring the best software engineers in the world. 490 00:40:42,116 --> 00:40:46,377 We don't need these legacy people, legacy software engineers in Michigan. 491 00:40:46,457 --> 00:40:53,298 And so I don't know if that was it or what's really going on, but I suspect it's something along those lines. 492 00:40:53,298 --> 00:40:54,378 Interesting. 493 00:40:54,819 --> 00:41:02,906 And I mean, just kind of talking about layoffs, there's it definitely seems to be in the forecast to happen more and more. 494 00:41:02,906 --> 00:41:11,493 Just kind of looking at where the audit, I mean, exactly kind of going back to what you're talking about around the SAR and just how many vehicles that are going to be produced 495 00:41:11,493 --> 00:41:13,855 seems to be lower than forecasted. 496 00:41:14,075 --> 00:41:22,538 Do you think that this is something we're likely to see probably after the election or some sort of announcement more drastic about what these cutbacks are? 497 00:41:22,538 --> 00:41:29,136 What is kind of just I'm curious on your thoughts about what that might look like in the next 12 months? 498 00:41:29,445 --> 00:41:31,555 cutbacks and what? 499 00:41:33,315 --> 00:41:35,162 Layoffs, guess, specifically. 500 00:41:37,154 --> 00:41:37,736 Look, I. 501 00:41:37,736 --> 00:41:39,892 guess we only I mean it's already almost October. 502 00:41:39,892 --> 00:41:44,463 So yeah, at this point there's only a month to the election anyway pretty much. 503 00:41:44,825 --> 00:41:45,201 Yeah. 504 00:41:45,201 --> 00:41:52,687 Look, I think that the Federal Reserve cutting interest rates is going to be a real help to the auto industry. 505 00:41:52,808 --> 00:41:58,002 Sales are running below where everyone thought they would be at the beginning of this year. 506 00:41:58,002 --> 00:42:09,758 And though prices, car prices have come down, more incentives are out there, insurance rates have gone through the roof. 507 00:42:09,758 --> 00:42:10,554 Yeah. 508 00:42:10,691 --> 00:42:18,213 Gas prices are starting to moderate a bit right now, but for most of the year, they were pretty high for most people. 509 00:42:19,214 --> 00:42:25,265 So I would think that with interest rates coming down, that's gonna make cars a little bit more affordable. 510 00:42:25,265 --> 00:42:30,797 It's going to make people with low credit scores more likely to be able to qualify for a loan. 511 00:42:30,797 --> 00:42:33,527 I think it'll help the industry. 512 00:42:33,527 --> 00:42:35,558 Forecasting into next year, I don't know. 513 00:42:35,558 --> 00:42:38,459 I mean, who knows what's going to happen. 514 00:42:39,099 --> 00:42:43,531 But these rate cuts are only good news for the auto industry. 515 00:42:44,564 --> 00:42:46,475 And do you think that that's likely to continue? 516 00:42:46,475 --> 00:42:52,336 I know there's point five and there's been talk about more coming in the next one. 517 00:42:52,336 --> 00:42:54,297 But do you think that it's. 518 00:42:55,417 --> 00:42:59,128 Do you think that that's having a larger impact, I guess, is what I'm asking, then? 519 00:42:59,128 --> 00:43:03,780 The fact that there's a lack of. 520 00:43:04,760 --> 00:43:11,311 Under forty thousand dollar priced vehicles that are compelling new vehicles for people to buy right now, if that makes sense. 521 00:43:11,311 --> 00:43:20,025 well, there are, you know, vehicles, Buick, Chevrolet, Ford, I'm thinking like the Maverick in the tracks and things like that. 522 00:43:20,025 --> 00:43:23,857 They can't build them fast enough, you know. 523 00:43:23,857 --> 00:43:27,658 People are really latching on to more affordable cars. 524 00:43:29,299 --> 00:43:34,221 My guess is the Fed will continue to cut rates. 525 00:43:34,221 --> 00:43:37,112 you know, look, just keep an eye on the inflation rate. 526 00:43:37,112 --> 00:43:39,063 That's what the Fed's watching. 527 00:43:39,203 --> 00:43:44,309 And as long as the inflation rates coming down, it will feel comfortable cutting rates farther. 528 00:43:44,551 --> 00:43:48,375 And that seems to be what's happening right now. 529 00:43:49,578 --> 00:43:55,238 No, and I'm curious then, Andrew, I guess I chose 40 ,000 as a random number, but you're right. 530 00:43:55,238 --> 00:44:03,128 There are more vehicles now than there were even just recently that are kind of lower priced, but we still haven't seen anything. 531 00:44:03,128 --> 00:44:08,858 And obviously inflation plays some into that since like pre COVID and it's we're still seeing such a high. 532 00:44:08,858 --> 00:44:11,238 I forget what is the average selling price of a car. 533 00:44:11,238 --> 00:44:13,178 It's still somewhere in the 40s. 534 00:44:14,458 --> 00:44:15,227 Yeah. 535 00:44:15,227 --> 00:44:20,087 is, you know, a good 30 % higher than it was before COVID. 536 00:44:20,087 --> 00:44:22,457 And so, no, look, your point's absolutely taken. 537 00:44:22,457 --> 00:44:24,127 Car prices are too high. 538 00:44:24,127 --> 00:44:26,547 You know, we've priced people out of the market. 539 00:44:26,547 --> 00:44:34,157 And when you add high interest rates and high insurance costs and high gasoline prices, lot of people said, look, I'm just going to fix up the car I've got. 540 00:44:34,157 --> 00:44:35,679 I'm not going to get a new one. 541 00:44:37,236 --> 00:44:46,133 Well, then I think the point you made earlier about just the used car market still being so just out of whack compared to what it happened. 542 00:44:46,133 --> 00:44:50,616 I mean, it was still kind of out of whack before COVID, but it really just hasn't recovered since then. 543 00:44:50,616 --> 00:45:01,224 Is there anything that you see on the horizon or you kind of expect to maybe get that to maybe a healthier place at least for people who are buying used cars? 544 00:45:02,546 --> 00:45:03,183 Yeah. 545 00:45:03,183 --> 00:45:06,123 as I said, car prices jumped roughly 30%. 546 00:45:06,123 --> 00:45:10,763 We're not going to see the automakers turn around and cut the prices 30%. 547 00:45:10,763 --> 00:45:12,893 They'll add incentives and the like. 548 00:45:12,893 --> 00:45:15,623 We're just going to have to grow out of this problem. 549 00:45:15,623 --> 00:45:25,523 And it's going to take a number of years to be able to do that, where car prices remain fairly steady at where they're now. 550 00:45:25,523 --> 00:45:31,359 And over the years, income levels build up to where cars become more affordable again. 551 00:45:31,601 --> 00:45:41,798 But in the meantime, look, who can figure out how to restructure, I'm talking legacy automaker now, anyone of them who can figure out how to restructure their corporate 552 00:45:41,798 --> 00:45:56,685 structure, anyone of them who can figure out new ways, especially using simulation to design cost out, using Sandy Monroe and Karasoff kind of principles of taking cost out. 553 00:45:56,685 --> 00:46:02,105 And anybody who comes out with much more affordable vehicles is going to hit a home run in the market. 554 00:46:02,105 --> 00:46:03,617 They'll gain market share. 555 00:46:04,618 --> 00:46:12,784 I mean, kind of going back to our earlier comments about like just how a of these companies need to kind of cut down and become more streamlined. 556 00:46:14,740 --> 00:46:24,785 Do you see in the current state of the kind of like the legacy, I was going to say big three, but like big two and a half, the automakers being able to do that, or do you think 557 00:46:24,785 --> 00:46:34,160 it would require a new management or someone to really come in and just say, Hey, we got to make kind of summer heads have to roll to kind of make these changes. 558 00:46:34,160 --> 00:46:39,143 And I mean, when you have that high of overhead anyway, of course you're going to have expensive cars. 559 00:46:39,143 --> 00:46:55,463 Right, so I would say what you gotta do is look at the age of the CEOs in power and keeping in mind that retirement age is typically around 65, 66 years old and anyone who's 560 00:46:55,463 --> 00:46:59,023 close to that age is not going to take drastic action. 561 00:46:59,163 --> 00:47:09,467 It's going to take the next generation of CEOs who come in that are maybe in their mid -50s, got a decade ahead of them and are willing to tackle this. 562 00:47:09,553 --> 00:47:19,063 But yeah, I just think human nature is such that somebody who's a year or two away from retiring is not gonna take drastic action. 563 00:47:19,262 --> 00:47:20,883 Yeah, fair. 564 00:47:21,363 --> 00:47:24,085 Well, under a different note, I guess. 565 00:47:24,085 --> 00:47:25,826 But no, I appreciate answering that. 566 00:47:25,826 --> 00:47:30,888 Obviously, we've some of the topics we've talked about are more general around just the automotive space. 567 00:47:30,888 --> 00:47:36,201 But I'm kind of curious as to what you've been seeing or hearing around EV charging. 568 00:47:36,201 --> 00:47:39,983 think where I live is kind of a remote spot in the Northwest. 569 00:47:39,983 --> 00:47:43,285 And so there's still quite a few gaps around like public fast charging and stuff. 570 00:47:43,285 --> 00:47:49,178 But for long time, I've heard that there can be kind of challenges with that in the Michigan and kind of that region. 571 00:47:49,531 --> 00:47:58,776 And I'm kind of curious what you're hearing or experiencing from like even when you have like a press vehicle or just others or EV drivers, if there's been an interest in how that 572 00:47:58,776 --> 00:48:01,880 might be impacting people buying EVs right now. 573 00:48:02,661 --> 00:48:11,208 Yeah, look, I got to tell you in this area, I just keep seeing more more chargers going up and at gas stations too, not just, you know, stand alone in a strip mall kind of a 574 00:48:11,208 --> 00:48:13,399 charging situation. 575 00:48:14,721 --> 00:48:19,645 I may not be a good one to ask because I'm so much more aware. 576 00:48:19,645 --> 00:48:27,081 I mean, I talk to people in this area all around all the time and they say there's no chargers and then I start pointing them out and there was like, my gosh, I didn't know 577 00:48:27,081 --> 00:48:28,072 that they were there. 578 00:48:28,072 --> 00:48:32,235 That's the problem is people are just not aware of what's out there. 579 00:48:32,271 --> 00:48:37,713 Now, having said that, even if they are aware, we need a whole lot more charges and they have to be more reliable. 580 00:48:38,454 --> 00:48:42,075 This was supposed to happen under the Inflation Reduction Act. 581 00:48:43,776 --> 00:48:54,020 obviously one of the big hangups, because I mean, there's billions out there just going begging, but permitting has been a big issue. 582 00:48:54,281 --> 00:49:00,193 And it just seems to take forever to get anything done in this country anymore. 583 00:49:00,607 --> 00:49:09,710 were so tangled up in red tape and that's something else I think that will become an issue after the election. 584 00:49:09,870 --> 00:49:19,433 In fact, know, Trump has even said he'd welcome Elon Musk into his cabinet to start attacking, you know, bureaucracy and regulations. 585 00:49:19,433 --> 00:49:24,614 You know, those rules and those regulations are there for very good reasons. 586 00:49:24,614 --> 00:49:27,975 But, you know, in California especially, 587 00:49:27,975 --> 00:49:31,035 It takes forever to get anything done. 588 00:49:31,035 --> 00:49:41,555 mean, road projects, and I'm not saying Michigan's great by any example, but a road project that takes a year to get done in Michigan, honest to God, can take 10 to 12 years 589 00:49:41,555 --> 00:49:43,055 in California. 590 00:49:44,495 --> 00:49:46,615 There's no excuse for it. 591 00:49:46,615 --> 00:49:47,290 So, 592 00:49:47,290 --> 00:49:52,303 I think it's the epitome of the old saying the path to hell is paved with good intentions. 593 00:49:52,403 --> 00:49:55,865 And I completely agree that there's just too much. 594 00:49:56,646 --> 00:49:58,847 I think a lot of these regulations were put in. 595 00:49:58,847 --> 00:50:01,728 I mean, you even see this with like car manufacturing regulations. 596 00:50:01,728 --> 00:50:09,823 I think the big one that gets a lot of flak and I think is finally changing is around American headlights and how it has to be so specific. 597 00:50:09,823 --> 00:50:12,094 And I was based on a good intention back in 598 00:50:12,094 --> 00:50:21,506 believe the 50s, but now there are so much so many more advanced kind of white technologies coming out from these manufacturers that can't be implemented. 599 00:50:21,506 --> 00:50:22,157 Yeah. 600 00:50:22,157 --> 00:50:28,080 takes NHTSA seven years to write a new safety regulation. 601 00:50:28,080 --> 00:50:29,031 This is ridiculous. 602 00:50:29,031 --> 00:50:34,084 People are getting killed at the same time it's taken seven years to write a regulation that could help them. 603 00:50:34,084 --> 00:50:36,105 And, you know, it's even worse than that. 604 00:50:36,105 --> 00:50:40,507 So NHTSA sets fuel economy regulations. 605 00:50:40,507 --> 00:50:43,829 The EPA sets emission regulations. 606 00:50:43,829 --> 00:50:47,505 Emissions have a direct impact on fuel economy and vice versa. 607 00:50:47,505 --> 00:50:53,521 but they both have two separate sets of regs that the industry has to test for. 608 00:50:53,521 --> 00:51:00,868 And then on top of that, NHTSA also controls all safety things and it's mandating all this extra structure being added to car that does what? 609 00:51:00,868 --> 00:51:04,131 Drives up emissions and drives down fuel efficiency. 610 00:51:04,131 --> 00:51:08,485 And none of these agencies are coordinating things amongst each other. 611 00:51:08,485 --> 00:51:09,816 And I don't blame them at all. 612 00:51:09,816 --> 00:51:12,378 This is how Congress has set things up. 613 00:51:12,378 --> 00:51:13,403 And there was no. 614 00:51:13,403 --> 00:51:15,514 grand overall plan of how to do this. 615 00:51:15,514 --> 00:51:19,226 These agencies just sort of grew up on an as needed basis. 616 00:51:19,226 --> 00:51:27,510 But there I think is a perfect example of saying, let's take a step back and figure out how we can get these things done. 617 00:51:27,510 --> 00:51:37,415 And even if we lower the regulations a little bit, they're going to be implemented so much faster that the net result will be lower emissions, higher fuel efficiency, lower 618 00:51:37,415 --> 00:51:38,715 fatalities. 619 00:51:39,442 --> 00:51:42,184 And hopefully lower costs, but I I completely agree. 620 00:51:42,184 --> 00:51:43,355 I completely agree with you though. 621 00:51:43,355 --> 00:51:49,060 I think that's truly the thing is just like there's people dying and getting injured and that's what you're trying to solve. 622 00:51:49,060 --> 00:51:52,372 And ironically, it's kind of held holding these things up. 623 00:51:52,473 --> 00:51:55,315 And we're seeing this just in so many areas. 624 00:51:56,236 --> 00:52:02,211 Whether it be in the auto industry or even like home building and these things that are just making prices of everything. 625 00:52:02,211 --> 00:52:07,845 and yeah, that could be its own podcast and its own rant, but. 626 00:52:08,016 --> 00:52:19,173 I, yeah, I, whoever wins, I hope that somebody seriously tackles just like there does need to be a pretty serious restructuring and focus on output. 627 00:52:19,234 --> 00:52:26,949 And I think that's what you hear from so many Americans, whether I don't know if they say it correctly when they say they want America to be run more like a business. 628 00:52:26,949 --> 00:52:34,824 think what they're really looking for is accountability and that efficiency that I think will hopefully get there. 629 00:52:34,985 --> 00:52:37,126 But that, I mean, that's been a 630 00:52:37,532 --> 00:52:46,135 It's a very different reason why, that has also been part of the reason China has been able to move so fast is good or bad when they agree on something that's just what it is 631 00:52:46,135 --> 00:52:46,975 now. 632 00:52:49,781 --> 00:52:51,043 same, same. 633 00:52:51,043 --> 00:52:52,264 That's a great clarification. 634 00:52:52,264 --> 00:52:53,235 Yeah. 635 00:52:53,235 --> 00:53:00,139 Winston Churchill quote, know, democracy is the worst form of government there is, except compared to all the others. 636 00:53:00,279 --> 00:53:07,393 And so it's messy and it can be slow at times, but it's proven itself to be very resilient. 637 00:53:07,582 --> 00:53:08,643 Yeah, that's true. 638 00:53:08,643 --> 00:53:10,264 No, I completely agree with you there. 639 00:53:10,264 --> 00:53:19,790 I think that's a good, a good kind of positive note, maybe two in this episode on since we've been covering so many different topics. 640 00:53:19,790 --> 00:53:22,372 But John, I really appreciate you coming on and talking to these. 641 00:53:22,372 --> 00:53:24,994 And I know we could easily talk for another hour or two. 642 00:53:25,014 --> 00:53:33,400 I'm definitely hoping to have you again on with just more of these insights and probably have to get you after the election to talk about all the things that are now going to 643 00:53:33,400 --> 00:53:37,232 happen with however the cards fall. 644 00:53:37,585 --> 00:53:39,438 Well, Chase, thanks so much for having me back on. 645 00:53:39,438 --> 00:53:40,800 Always a pleasure to talk with you. 646 00:53:40,800 --> 00:53:45,346 You always ask great stuff and I love the conversation that we engage in. 647 00:53:45,778 --> 00:53:46,865 My pleasure, same here, John. 648 00:53:46,865 --> 00:53:48,343 I'll let you get going and have a great day. 649 00:53:53,618 --> 00:53:56,960 Hope you enjoyed another episode of the Grid Connections podcast. 650 00:53:56,960 --> 00:54:06,287 A big thank you to John McElroy for sharing his thoughts on the future of the auto industry, from electrification and autonomous vehicles, the global EV race, and how legacy 651 00:54:06,287 --> 00:54:07,968 automakers are adapting. 652 00:54:07,968 --> 00:54:11,651 There's so much to consider as we look forward to the future of transportation. 653 00:54:11,651 --> 00:54:17,695 If you enjoyed today's episode, we'd love it if you could share it with at least one person who would appreciate these insights too. 654 00:54:17,695 --> 00:54:21,832 And don't forget to please leave a positive review on our podcast page. 655 00:54:21,832 --> 00:54:26,072 Your support helps us continue to bring these important conversations to life. 656 00:54:26,072 --> 00:54:30,752 Thanks for listening and until next week, this is the Grid Connections podcast signing off.