Speaker1:
Hopefully, this is what convinces people, finally, that
electric cars are Speaker2:
The future Speaker3:
With swapping stations. We're constantly, slowly charging these batteries. Speaker2:
They can draw off those batteries to help do some load
balancing on the on the grid. Speaker1:
Do we want to partner with an oil company? That's the history about humanity is moving on and
they're moving on with it. And they're saying, Listen, we also want to be part of
that solution. Speaker2:
And as we go to twenty twenty five, China will pull
away from everyone else, accounting for at least half of total global vehicle sales. It's been the government pushing the electric vehicle
future. China has been the most aggressive in this regard. Speaker4:
Volkswagen's ambitions for electric vehicles are
global, and they're ambitious. They are, like everyone else, gunning for Tesla. Speaker1:
I think we will be the most profitable company in
electric vehicles. Speaker5:
The global electric vehicle market is heating up, and
China wants to dominate, Speaker3:
Increasingly more and more analysts expect China to be
a leader in EV production, partly because it has the largest
automobile market in the world, and then it has all these government policies to support consumers
to buy EVs. Speaker5:
The Chinese government has invested at least $60
billion to support the EV industry, and it's pushing an ambitious plan to transition to
all electric or hybrid cars by 2035. Speaker2:
They have an all of society approach to winning and
dominating the electric vehicle market globally Speaker5:
In twenty twenty. Ev sales in the U.S. were far below Europe and China. Out of the three point twenty four million electric
car sold, only three hundred and twenty eight thousand were in the U.S., one point thirty three million were
sold in China and one point thirty nine million were sold in Europe. Speaker2:
And as we go to twenty twenty five. China will pull away from everyone else, accounting
for at least half of total global vehicle sales Speaker5:
Despite the pandemic. Deliveries of EVs grew year over year in 2020 by forty
three percent globally. The U.S. only saw a four percent increase. But there are signs that the U.S. is getting more serious about going electric. President Joe Biden has renewed the U.S. commitment to fighting climate change with a goal to
reach net zero emissions by 2050. He's also announced investments in green
infrastructure, including adding an additional 500000 charging stations. In a move that came as a surprise to many, General
Motors, one of the largest automakers in the U.S., announced plans to exclusively offer electric
vehicles by 2035. Speaker2:
They've got a long ways to go, Karl. Let me give you some perspective on GM's global sales. Last year, the company sold about six point six
million vehicles worldwide. Take a guess how many were fully electric, just forty
nine thousand one hundred and forty nine. Speaker5:
But can the U.S. catch up to China's massive lead? Speaker2:
The U.S. seems to be sort of like the young reluctant
colt saying, we'll get around to it, but what's the hurry? Well, there is a hurry. The race is on. China and Europe are way ahead. Speaker5:
Let's take a look at how China came to control the
market the country decided over a decade ago that it wanted to be the world leader in electric cars. Speaker3:
The EV industry in China is one that has been very
interesting to me because it's an example of how government policy
can potentially drive innovation Speaker2:
In an industry. China is betting big on electric vehicles for several
reasons. First, they've always been a follower in traditional
vehicles, and they wanted to find a way to catch up technologically and
not be dependent on Europe or the U.S. on engine technology. Also, they have a significant air pollution problem,
and they're also the world's largest importer of oil. Speaker5:
China is the world's biggest emitter of greenhouse
gases and has pledged to be carbon neutral by 2060 in an effort to support the adoption of EVs. The Chinese government has played a massive role. It has spent tens of billions of dollars to support
the sales of electric vehicles. Speaker2:
It's no secret that without regulation, without rules,
without subsidies, electric vehicles would have never gotten
off the ground. Whether it's in California, in China or in Europe,
it's been the government pushing the electric vehicle future. China has been the most aggressive in this regard. Speaker5:
China has subsidies and incentives that benefit
automakers, suppliers and consumers Speaker2:
In certain cities, for example, in Beijing. You can only have access to the city center in a car
if you're driving an electric vehicle elsewhere in Shanghai. There's an incentive if you buy a gasoline powered
car, you must, first of all, pay twelve thousand for the license plate just to have the
rights to buy the car. Now, if you buy an EV, they waive that licensing
fee. You get it for free, you save twelve thousand. Speaker3:
And then even in cities that are not restricted, the
registration wise, they kind of restrict your access to the road. You can only if you drive a, you know, I see car, you
can only go onto the street between a certain time and a certain time, and
perhaps certain days during the week. Speaker5:
An icy car is short for internal combustion engine. China also has a quota system for manufacturers. They must produce a certain percentage of electric
vehicles every year or they're fined. But some question if this is sustainable. In 2019, after the government cut back on some
incentives, sales fell and the shares of EVs overall dropped from eight percent in mid-2019
to five percent by the end of the year. Speaker4:
Other than Tesla, the only way to sell EV so far has
been through subsidies, whether it's state or federal. We saw that in China a lot. What we haven't seen is organic demand really outside
of incentives or early Speaker2:
Adopters, the amount of funding that has been poured
into the industry, it's mind boggling. It is thirty three percent of all sales, not thirty
three percent of profits, but thirty three percent of all sales. This is a government created market, Speaker5:
But subsidies cannot last forever. And some think with the introduction of more luxury
brands like Tesla, consumers can eventually be weaned off them. Speaker2:
I think the perception is that China is winning the
electric vehicle race because there's so many subsidies in place. But if we look closer. Something happened in twenty twenty that shifted the
picture when Tesla arrived in the market, and other EV startups like NIO
and Xpeng began to deliver highly desirable, good looking, reliable, long
range vehicles. Chinese customers for the first time said We
don't need subsidies to make the decision to buy this electric
car. Speaker5:
In the U.S., there is a $7500 tax credit available, but
not all cars are eligible and the incentive goes away if the automaker sells
more than 200000 cars. Tesla hit that threshold in twenty eighteen. Democrats have introduced a new bill to expand the
credit for automakers who have hit the threshold and have extended the limit to 400000 cars for a $7000 tax
credit, for example. Tesla doesn't break out deliveries by
region, but it delivered almost five hundred thousand cars last year during the pandemic. Speaker4:
The Biden administration here in the U.S. seems much more open to expanding, if not providing
additional incentives for the EV market, as well as the
infrastructure buildout, which is one of the major concerns. China has been very supportive of the
EV infrastructure and EV companies for years. And we've seen it in their EV sales and
almost same thing with Europe. Speaker2:
There's no question that all of this move to electrics
globally would not have really gotten traction without China
first mandating that electrics would be part of its future and as the
largest vehicle market in the world, that has a global impact. Speaker3:
Primary barrier for consumers to buy electric vehicles
is the cost and batteries represent the bulk of the cost of
the electric vehicles. Speaker5:
Besides subsidies, China's government also provides
support in battery manufacturing and the supply chain. It's the leading producer of electric
batteries and motors. Speaker2:
Battery production around the world is concentrated in
Northeast Asia. It's Japan, Korea and China. Together, they account for about ninety five percent
of total battery production for vehicles now within that ninety five
percent. China has more than 60 percent at this point, so it's
clearly the leader in terms of battery production capabilities. Speaker3:
The analysts are basically across the board saying that
China has control of the chemicals, the production facilities
that are needed for electric vehicle battery production for
the next probably five to 10 years. So there's actually some groups in the U.S. who are also raising this as a concern if the future
of mobility is going to be electric. Speaker4:
Other than Tesla, battery manufacturing in the U.S. is almost nonexistent. General Motors and others have announced plans or
initiatives to kind of enter the market. Gm has a two point three billion dollar investment
right now with LG Chem. They're building a plant in Ohio, and that plan is set
to open, be finished in 2020 Speaker2:
To look at the situation the U.S. and China. The relations are at their worst in 50
years. And should the U.S. become over reliant on Chinese batteries? Well, it would be so simple. Just the Chinese would say, sorry, we don't have
enough supply for you. Speaker5:
China also made charging a national priority and has
been installing an extensive network throughout the country. It has over half a million charging points
compared to the U.S. that has roughly 100000. Speaker2:
Even Tesla has a massive network in China with
thousands of points, and China has already unified their charging infrastructure. So whatever car you're buying, you know that you could
go to a station and get charged up. So America First Step should try to work toward a
unified standard for charging so that no matter what electric
vehicle you're buying, you'll have peace of mind knowing, Oh, I can get it, charge
there. No problem. Speaker5:
Tesla has seen rapid growth in China after building a
factory in Shanghai at the end of 2019. The company earned six point sixty six billion
in revenue from the country in 2020, and the Model three was also the best selling
NEV. Last year, Tesla's China made Model Y began deliveries
in January and was the third best selling electric car in February. Speaker2:
Tesla has played its hand really well. Elon Musk understood that China wanted to be a leader
in electric vehicles and that the incentives may be in place for Tesla to take advantage
of, Speaker5:
Though other foreign automakers make cars in China. They were all required to set up joint ventures with
the Chinese automaker. Saic owns 50 percent of GM and China. Ford also has two joint ventures there, but Tesla was
able to get a unique deal in the country. Speaker4:
They are the first automaker to come into China and
that the government let them own their own factory and let them operate without a
joint venture with a local Chinese affiliate. So Tesla's growth in China thus far has been helped by
the Chinese government. Speaker2:
It's been a red carpet welcome for Tesla because the
Chinese government sees the value of having Tesla and its suppliers right
there planted inside China further fortifying China's stance
as the strongest EV industry in the world. Speaker5:
But Tesla has lowered its price in China a couple of
times at first to qualify for subsidies and then because of cheaper Chinese made
batteries. Speaker3:
One of the reasons Tesla did extremely well in China
this year is because it had a price cuts a couple of times, and the
biggest cut was eight percent a beginning of October. So that really boosted the orders. So we are looking at order number of twelve thirteen
thousand a month in September. All of sudden jumped to about 31000 in October. Speaker5:
Tesla also dominates the U.S. EV market. The company made up seventy nine percent of
all electric cars registered in 2020. The only non Tesla of the top five cars was the
Chevy Bolt, which had around 19000 vehicles registered compared to the Model
three, which alone was over 90000. The company's market cap grew over five hundred
billion in 2020, making it worth more than the nine largest automakers
combined, even though it sells a fraction of the amount of cars. China sold roughly one million more EVs in 2020 than
the U.S. with less aggressive subsidies and lack of battery
manufacturing. The United States has its work cut out for it if it
wants to catch up. Speaker4:
The U.S. and China are really different markets. The U.S. is not going to mandate certain things as
much as China will. China kind of had mandates to cut down on
pollution. They had the very large incentives their owners and
many of these companies that are pushing the EVs in the U.S., we have to have more of an organic
growth. Speaker5:
Plus the consumers in China and the U.S. are quite different. While the Chinese will buy miniature, cheap EVs,
Americans are more drawn to SUVs and gas guzzling trucks. In fact, Ford's F-Series, which includes the F-150,
remained America's best selling vehicle for the 39th straight year in twenty twenty. The F-Series brought in forty two billion dollars in
revenue in 2019, which is more than the NFL, NHL, NBA and Major League Baseball
combined. New EV trucks pose a threat to the truck maker's
market share. Speaker2:
When word came out about the Cybertruck, the main
message was We're going after your profits on your biggest selling vehicles trucks. So Ford and GM responded and said, Uh oh, we better
not be asleep at the wheel. Speaker5:
There are a slew of electric trucks coming in the U.S. in the next few years and a number of EV startups
entering the space. American auto giants are making big changes. Speaker2:
To make no mistake, this is General Motors and Mary
Barra making a very clear and declarative statement right now. They will be fully electric and they plan to be there,
at least by twenty thirty five. Speaker5:
Gm CEO Mary Barra said We're committed to fighting for
EV market share until we are number one in North America. China is GM's largest market worldwide when it comes
to total vehicle sales. In the summer of 2020, it launched the Hongguang Mini
with its joint venture, Wuling. The small EV costs four thousand four hundred dollars
and has seen rapid growth in sales. Speaker2:
They're selling more than thirty thousand of these a
month. If you can get to that volume in a month, you're doing
extremely well. So GM went from sort of quiet and not doing much in
China with electrics, to this surprise, sensational new product. Speaker5:
Evs are still a very small percentage of the global
auto market, so it's still anyone's game. Automakers want to keep their customers happy, but
also don't want to lose market share to EV startups or Tesla. In China, competition is growing rapidly. Warren Buffett backed Biden's new luxury sedan, jumped
into the top 10 electric car sold in China last year. China also has hundreds of EV startups. These include shorter range and lower priced cars, but
there are also notable luxury brands popping up to compete with Tesla. They include NIO Expen and Li Auto. All three companies have seen high valuations in the
past year. Speaker3:
The EV auto startup companies are extremely well-funded
and welcome on Wall Street and global capital markets. It's the wide open capital market, and that's the rich
valuation makes the entrepreneurs believe that it is a
worthwhile effort to try, even though the outcome can be binary, but
they still think it's attractive venture Speaker5:
In the U.S.. The race between the Detroit automakers
and a slew of startups is starting to unfold. Gm has unveiled the all electric Cadillac and
Hummer EV. Ford will debut the fully electric Mustang Mach-E. Then there are startups like Rivian, Comu and
Bollinger Motors, all working on electric pickups in Europe. Volkswagen is another automaker, accelerating plans to
dominate the EV space. In the fourth quarter of last year, it sold more EVs
than Tesla, but that number includes plug in hybrids. The German automaker expects half of U.S. sales to be electric vehicles by 2030, while China has
a commanding lead. All hope is not lost for the U.S. to catch up. Speaker2:
China is ramped up battery production as well as car
production for electric vehicles, but the quality of their
batteries, and particularly the quality of their own cars, is still not world class,
and that applies to Chinese cars in general. They're not piles of junk, but they're not going to
compete with leading European brands or Tesla. So if they're going to set their sights on Europe and
the United States, they're going to have to raise the quality of those cars overall to be competitive. We've been the standard for the world in so many
technologies here in America for one hundred years that it's impossible for us to conceive of a
future where we're not in charge. We're not the leader, we're not the standard setter. But the risks are real. We can come back. It's early days. Only five percent of total sales are electric, but the
longer we wait, the harder it's going to be to do a comeback victory. But we better get our act together now. Speaker6:
In the U.S., Tesla dominates the conversation around
electric vehicles as consumers instinctively associate the brand and Elon Musk's
eccentric, visionary persona with the push to go electric. But in Europe, it's a different story. While Tesla's Model three has been selling quite well
in the region, it's not nearly enough to knock the Germany based Volkswagen Group out of its top spot in
the European EV market, where it garnered about twenty six percent market share in the first half of
2021. Speaker4:
Volkswagen's ambitions for electric vehicles are
global, and they're ambitious. They really want to go all in on EVs, and they are,
like everyone else, gunning for Tesla. Speaker6:
The Volkswagen Group, which includes many different
brands such as Audi, Bentley and Porsche, as an edge in Europe thanks to its local manufacturing brand
familiarity and cheaper price points, not to mention Europe's tightening vehicle emission standards
and steep noncompliance fines, which pushed VW to go electric as the company sought to rehab its
image in the wake of the 2015 diesel emissions scandal. Speaker2:
Vw has no choice but to fully, aggressively pursue the
strategy in Europe. Tesla's Berlin Gigafactory hasn't gone up
and running yet, so it's really a timing issue. Vw just started selling cars more aggressively in
Europe than China and the US. Speaker6:
Whether it can replicate the success in other markets
remains to be seen. As Volkswagen still has many models under development, Speaker3:
They've got a lot of vehicles coming and it takes time
to get people to understand that it's there and aware of it and want to consider it. You know, it's not necessarily that someone will not
consider an electric vehicle that's not from Tesla. It's a pun. In some cases, they don't even know what's
there. Speaker6:
In 2015, Volkswagen was caught cheating on American air
pollution tests, programing their diesel vehicles to activate emissions controls only
when emissions testing was in progress. But when the cars were operating regularly, they
emitted 10 to 40 times the legal amount. Speaker4:
Dieselgate kind of really propelled them to try to find
a different way to power their vehicles. They really had to change their Speaker6:
Image after the scandal. The Volkswagen Group replaced their CEO multiple
times. But when Herbert Diess took the reins in twenty
eighteen, he steered the company towards electrification. Speaker2:
It's kind of turned into a blessing in disguise because
now the company has aggressively pushed a full electric strategy. Speaker6:
This has committed to spending about $68 billion by
2024 on electric cars and digital technologies by twenty twenty nine. Volkswagen says that it will build twenty six million
EVs and will offer 50 different fully electric models by 2030, Speaker1:
Adding everything up. Very emotional vehicles. High economies of scale. I think we will be the most profitable company in
electric Speaker6:
Vehicles here at the TRANSPARENT. factory in Dresden, Germany. Volkswagen produces a limited volume of the ID.3, its
top selling EV in Europe. This compact car is mass produced at VW Zwickau Plant,
which is now solely focused on EVs, having made its last combustion engine vehicle
in June 2020. Speaker1:
From my point of view, electric mobility has won the
race in considering the high volumes we are targeting for. I think the customer will also benefit from the
economies of scale decreasing prices. Speaker6:
In September 2020, VW also unveiled the ID for an SUV
aimed at the global market that has become Volkswagen's top selling EV
globally. With the ID.3 is not sold in the U.S., the ID.4 is. It will be produced at Volkswagen's Tennessee plant
beginning in 2022, and production is already underway in Europe and China. But as Volkswagen ramps up production of all of its EV
brands, it's got a ways to go before it catches up with Tesla globally. In the first three quarters of 2021, Tesla sold over
six hundred and twenty seven thousand EVs, while Volkswagen sold about two hundred and
ninety three thousand. Speaker4:
Volkswagen knows that it can't necessarily become
another Tesla. No one can necessarily become another Tesla. Even some of the EV startups Tesla had the EV market
essentially to itself for a decade, which is why their market share is so
high, which is why they have the following that they do. Speaker6:
But as automakers like Volkswagen fully commit to
electrification, analysts say that Tesla's dominance is sure to wane Speaker4:
In a growth market like EVs. It's nearly impossible for a company like Tesla to
maintain its majority market share. Speaker6:
And nowhere is that more clear right now than in the
European market. In 2020, strict vehicle emission standards went into
effect in Europe. This resulted in traditional automakers bringing a
suite of new, fully electric and hybrid vehicles to market. And Volkswagen surged past Tesla to become the
region's EV leader. Speaker3:
The regulations in Europe also require huge fines if
you miss your compliance, and that's particular partially effective
motivator for some of this change. Speaker6:
So far this year, about 72 percent of the Volkswagen
Group's EV sales have been in Europe. Currently, it has 25 different all electric models on
the market, and historically some of its most popular EVs like the e-Golf and E Up have been
tailored for Europe. The shorter ranges but cheaper price points than
Tesla's Speaker2:
In Europe, you have shorter commutes. You don't need as big of a battery range, so therefore
you don't need these large cars. You can get much smaller EVs. Speaker6:
The introduction of the ID series, though, has given
Tesla a run for its money in the region. The base model of the ID.3, for example, gets about
two hundred and sixty five miles per charge, nearly identical to the standard Model three, and it
still costs at least five thousand six hundred dollars less, depending on the country. That price differential is largely due to the fact
that Tesla is not yet producing vehicles in Europe and therefore has to pay transport fees and import taxes
on its cars. That should change soon, though, as Musk aims to start
production at Tesla's Berlin Gigafactory by year's end and ramp up the volume throughout next year. But just like Tesla in the U.S., VW has an important
head start in the region along with deep brand familiarity. Speaker4:
They have a history there. Much like the Detroit automakers do in the Midwest,
Volkswagen has for all of Germany, if not close Speaker6:
To all of Europe. Out of all of Volkswagen's vehicle sales in Europe
this year, seven point nine percent have been all electric vehicles. That's nearly double last year's percentage. But by 2030, Volkswagen says that 70 percent of its
vehicle sales in Europe will be EVs. This is a VW Speaker3:
Shift that is intended to be deep and thorough, and
it's going to take some time to get there. What happens in the next three years in
terms of who's selling more than somebody else is important, really. It's going to be 10 years before we have really good
sense of what's happening. Speaker6:
With the introduction of the ID four SUV, Volkswagen is
aiming to broaden its market share worldwide. So far, sales are picking up in both the
U.S. and China, in Speaker1:
U.s. and other markets. I think the SUV segments are even stronger and that's
why we launched our ID.4, which is basically the electric world car for
us. Speaker6:
Americans like bigger cars, largely because there's
just less space constrained than Europeans. More of the country's rural roads are wider and
parking spaces are larger, making roomy vehicles more appealing. The base version of the ID.4 costs
about $40000 more expensive than other SUVs like the Chevy Bolt or
the Hyundai Kona, but definitely less pricey than the Tesla Model X or Model Y, which have
both experienced substantial price hikes this year. And it's far from the group's only international
all electric offering. Speaker4:
Volkswagen, Audi, Porsche. All of them. The Volkswagen family. They all have their own different brands. And that's actually where Volkswagen has a very big
advantage over Tesla because they can appeal to more buyers Speaker1:
So every customer can find a suitable product either. It's in the luxury segment, the sporty segment, the
volume segment. Speaker6:
But even with these myriad offerings, there's a good
chance that VW will never be the EV leader outside of its home market. Speaker2:
We're big believers that the future actually looks like
it'll be one of more regional champions, perhaps Tesla in the US or VW in Europe and then in Asia, maybe a domestic player
or perhaps Tesla there. Speaker6:
Currently, Tesla controls about 63 percent of the U.S. market, with the Volkswagen Group vying for a distant
second. While in China, Tesla and local automakers such as BYD
and SAIC are gunning for the lead. All this could change rapidly in the coming
years, though, as the EV market matures and as Narayen sees it. Volkswagen may be well positioned to fill niches that
Tesla doesn't yet reach. Speaker2:
If you look at the lineup that VW has and what Tesla
has, they don't really fall into each other sandbox. You know, VW has Audi and Porsche, which come at the
luxury and SUV market, something that Tesla has somewhat ignored. And then where Tesla really is its its Model three and
Model Y, which really come above where VW Brand's offerings
are, which are priced probably 20 to 30 percent below Speaker6:
Volkswagen's eighty six also began deliveries in China
this summer. It seats seven to accommodate a market where multiple
generations of a single family often travel together in a single car. Speaker3:
If you look at what Volkswagen has coming, they've got
another 10 or 11 VW branded vehicles coming plus Skoda plus SAP plus Audi
plus Porsche. Speaker6:
By 2030, Volkswagen expects that EVs will make up 50
percent of its total vehicle sales in both the U.S. and China. To reach these ambitious goals, analysts say that VW
will need to improve upon its software and battery technologies. Areas where it's still seen as lagging
behind Tesla Speaker4:
The one major advantage if you talk to anyone about
Tesla, it's their software. The major kind of example is the over-the-air
technology. Tesla was really the first to bring that out. It really showed that they are treating the vehicle
more as a technology and not just something to get you from A to B.. Speaker6:
Tesla has long pushed out vehicle updates through its
app, making it simple for users to install the latest navigation, entertainment and safety features. Volkswagen wants to do the same for its ID series, and
the company says that it is investing around $19 billion in digitalization and software
capabilities over the next five years, which includes autonomous vehicles and ride sharing
services. Speaker2:
Vw has a very big ambition to be a software leader. It wants to be the second biggest software company in
Europe right after SAP. They actually believe they could be kind of a one app
to rule them all. Speaker1:
We expect the car to be a mobile device on wheels in
the very near future. We have our own company within the group that is
really focused on software development and autonomous driving Speaker6:
When it comes to batteries. A teardown of the ID three revealed that Tesla's
batteries are about thirteen hundred dollars cheaper than Volkswagen's per car. But VW is thinking big with plans to build six
gigafactories throughout Europe by 2030 and one in China by controlling its own battery
supply chain. Volkswagen can ensure that it gets the best pricing
available and can bring vehicles to market quickly, even if there's a supply chain crunch. Speaker4:
They don't want to face another situation like the
semiconductor chip shortage, where they're literally begging and pleading and negotiating, just trying to
get a few small microchips. Speaker6:
Lastly, Volkswagen is investing heavily in charging
infrastructure. Speaker1:
We are targeting four in total 400 charging stations in
Europe. One hundred of them in Germany. And the idea is to have every one hundred twenty
kilometers one charging point. Speaker6:
Volkswagen also has a U.S. based charging division, Electrify America, that
formed in the wake of the Dieselgate settlement. It's committed to more than doubling its American and
Canadian charging infrastructure by 2025, and the Volkswagen Group is building out its
charging network in China to in partnership with a local startup. Speaker2:
Currently, Tesla has the most charging points, and it
is exclusive to Tesla owners. And so you really have these two ecosystems. The Tesla Supercharger network and then kind of
everybody else who are largely interoperable. Speaker6:
Tesla has recently opened its supercharger network to
non Tesla owners for the first time through a pilot program in the Netherlands. And so if this effort expands, it would be a huge boon
to Volkswagen and every other EV maker. Speaker2:
But in any event, this problem of public charging will
be resolved. They're being built at breakneck speed right
now, Speaker6:
As Volkswagen plans to release an abundance of new EV
models, works to improve its software capabilities and builds out new battery plants and
charger networks. It seems, doubtless, that the company will cut into
Tesla's market share. The whether it can become the global EV leader remains
to be seen. Speaker4:
Any automaker in the world would love to have the
cachet and the appeal of Tesla right now. They have gone beyond the car brand to a cultural kind
of phenomenon, Speaker6:
But scale is undoubtedly on Volkswagen side. While Tesla has historically struggled to ramp up
production, mass manufacturing is something that the Volkswagen Group knows a thing or two about. Speaker3:
I think it's an advantage for all of the traditional
automakers that they already know how to mass produce great vehicles. Speaker5:
And not only that, if you look at the fact that they
have plants to convert. Speaker3:
It's still a costly process, but they do have a
manufacturing footprint to work with already, and Tesla is still developing theirs. Speaker6:
But Tesla is making progress, gearing up for production
on Volkswagen's home turf. Speaker4:
Tesla is obviously still gunning and growing its
business, including a gigafactory in Berlin, which is about two and a half
hours away from Volkswagen's world headquarters. So if that wasn't a shot across the bow at Volkswagen
from Tesla? Nothing really is. Speaker5:
These little robots are actually charging this electric
car. They remove the depleted batteries and replace them
with new, fully charged ones. The whole process takes about 10 minutes. It's called battery swapping. San Francisco based Apple is bringing the idea to the
U.S. The company was in stealth mode for seven years before
launching recently with five swapping stations in the Bay Area. Speaker1:
The plan is to be available wherever people need a fast charge that's as cheap as gas. Speaker3:
The benefits of swapping to charging are numerous. When you're fast charging, you are degrading the
battery at a much faster rate than if you slowly trickle charge a battery. Speaker5:
The concept is not new. Better Place launched an EV and battery swapping
company in Israel, but the company went bankrupt in 2013, even though it had almost $1 billion
in funding. And Tesla gave it a try in 2013, Speaker2:
Took sort of 90 seconds for a pack swap. So hopefully this is what convinces people, finally,
that electric cars are the future. Speaker5:
Battery swapping is already common in China. Electric vehicle maker NIO plans to double its network
of swapping stations to five hundred this year and plans to open battery swapping stations in
Norway as part of its expansion into Europe. Geely, another Chinese automaker, plans to
build two hundred swapping stations in China by 2023. Speaker1:
Almost every taxi in Beijing that move to electric is
being swapped, so there is a significant amount swapping happening in China. We just don't know about
it here because we haven't yet had the problem of moving a very, very large fleet into electric. Speaker5:
But these swapping stations are expensive, and it's
unclear whether American car owners would be willing to swap out their EV battery Speaker2:
In America if we're buying a car. Damn it, we want to buy the battery that runs it. Speaker5:
But Apple has a different approach. Speaker3:
We've really taken the EV battery pack and broken it
down into much more manageable batteries. But why now Speaker5:
And can battery swapping be a good charging solution
here in the U.S.? Nio, Tesla and Better Place all use the same technique
that is removing the entire battery pack and swapping in a new one. The batteries are usually then charged off site, but
EV batteries are massive, and this is part of the reason why swapping stations
have historically been so expensive. Speaker2:
You have challenges there. If you're connecting a 900 pound thing, then you have
to have really, really robust electrical connectors that can handle a
few hundred volts and have something dropped in and out dozens hundreds of times
over the lifetime. Speaker5:
But Apple is trying a new technique. It is building its own batteries designed in these
Lego like modules that charge right inside the battery swapping station. Speaker3:
The main thing that sets Apple apart is that we have a
modular battery with our modular batteries. We can take them out a few at a time, and they're very
light. They're very easy to maneuver. The station is the size of two parking spots, so it
doesn't require a lot of square footage, since the batteries can be
individually put on a much smaller rack to charge. Speaker1:
I think part of the thing about the modular batteries
is it is the ability to fit into different sizes. If it's a big car, you can put
in more small car put in fewer. So it's solved a lot more problems than you'd
initially thought about by going through and doing it. Speaker5:
We were not allowed to film the proprietary tech inside
of the charging station, but we were able to take a peek behind this wall. There are robots zooming around, taking fully charged
battery modules off of shelves and then replacing them with depleted batteries from the car. The new batteries are then quickly but carefully
screwed back into the car, and within minutes the fully charged car drives out of the station. Speaker3:
The station is fully autonomous and the payment is done
through the app. Speaker5:
Ampoules Bay Area stations cost the driver about 10
cents per mile for swap, which is less than gas in the area but a bit more than
traditional charging. Speaker3:
The car isn't perfectly centered where it needs to be. The robots will move it to the right spot, so there's
it's very easy for anyone to just drive up and park on the platform. Speaker5:
Ample battery stations are designed to be installed
quickly along high traffic routes. Former Tesla manager Lindsay Stone is in charge of
deployment. Speaker3:
We build in our office here what we call subassemblies. We build chunks, take them to the site, we create them
up, ship them over and then assemble on site. So there's no construction. There's no digging. How much does it cost to build one of these? Speaker1:
We can't give the exact number, but we'd say in the
tens of thousands of dollars so effectively the equivalent of maybe a slightly expensive level two
charger. Speaker3:
One of the major benefits to ample swapping station is
that it does require a lot less power than a traditional plug in charging station. Speaker5:
This is because ample slowly charges the batteries and
can control when they are charging. This also helps ensure the batteries are being charged
with renewable sources, not fossil fuels. Speaker3:
The benefits of swapping over fast charging are that
you can charge when it makes sense for the grid. So when someone pulls up to charge, they need to pull
that energy from maybe not always sustainable resources versus with
swapping stations. We're constantly, slowly charging these
batteries and so we can really plan around when we can use solar energy or
wind energy to make that charge happen. Speaker5:
Plus, an ample station could eventually also provide
power to the grid. Speaker2:
That stock of batteries that's being charged can
actually also be used as stationary storage when the utilities are hitting peak loads. There's a known set of batteries that are going to be
sitting there. They can draw off those batteries to help do some load
balancing on the on the grid. Speaker5:
But in order to use an ample station for swapping, the
car actually needs ampoules batteries in it. It builds custom plates for each car manufacturer
it works with and then fits the batteries into the plate. The plan is for the car buyer to choose whether they
want ampoules batteries in their car or the manufacturer's battery pack, depending on their needs. Speaker1:
Almost every automaker in the world built the car
separate than than the battery, so the battery is a device unique because they know this is probably the
weakest part of the car will need to be replaced and serviced, etc. But if you build a drop in replacement
to that battery, then you don't need a significant engineering effort from the
automaker side. So the way we build our system is you build an adapter
plate, which is defines how many modules you put in the car, how
they're distributed, how they interface with the car so that the car itself doesn't need to change the
software or hardware in any way whatsoever. Speaker5:
The company says it has already partnered with five EV
manufacturers, but it would not disclose which ones. But while we were filming, a Nissan Leaf pulled up to
get a swap. Speaker1:
We're very easy to install. Our system takes 15 minutes to get a car ready to be
swappable, and then as we scale to thousands of cars, then we act just like another supplier. Speaker3:
Most OEMs have very similar setups on their batteries. They have several main connectors, and then all we do
is just identify where the mounting points are of their battery pack and make
sure that our plate mounts to those same points on the car. Straight from there, figure out what the packaging of
our battery modules can be within that geometry. There's not really any limit on that, right. We can do that for a van. We can do that for a truck. I think a Speaker1:
Lot of people kept on saying you'll never be able to
work with OEMs is very hard to work with, and I'd say we've been very surprised with how willing
they've been open to. They realize the problem. Speaker5:
The global electric vehicle battery swapping market was
valued at one hundred point one million dollars in 2020 and is projected to reach eight hundred and fifty
two point six million dollars by 2030. But some are skeptical this will take off in the
United States. Speaker2:
It's a 50 50. You might get a newer, fresher battery than the one
you've already put fifty two thousand miles on, but you might get someone's fifty two thousand mile
battery swapped into your six week old car. In theory, they would have to keep them within some
kind of range. But especially in America, we'd like to buy stuff we
like to own stuff, and that includes the battery. Speaker5:
This could be why the company is initially focusing on
fleets with sights set on individually owned EVs next. Speaker3:
It's a great option for a fleet that needs to have its
cars on the road for as much of the day as possible, and where a quick
refueling is really vital to being able to have the fleet go electric in the first place. It's also, I think, a good option for customers in
cities who don't have a good place to charge. They don't have a garage to plug in at home. Those are kind of the two primary customers that that
we see right Speaker5:
Now, Apple said. It has a range of last mile delivery,
municipal fleet and ride sharing partners, including Uber. Uber drivers in San Francisco can rent an EV equipped
with ample battery built in. That driver can charge using conventional methods or
head to one of Apple's five stations in the Bay Area to recharge ridesharing. Speaker1:
In general, it's difficult for a driver. They often don't have a charger at home, and you could
be spending 10 hours a week charging your vehicle, which means you're just making effectively making less
money. Speaker2:
Where it actually does make the most sense is for
commercial fleet users. They're usually all the same kind of vehicle, so you
could have a swap station that you have a stock of batteries that fits all of
your vehicles and your fleet. And that would make a lot more sense. And the nice thing about swapping is it can be done
very quickly. It can be done in three, four or five minutes. Speaker1:
One interesting thing with the fleets as well is a lot
of fleets of are committed to electric, but as soon as they start deploying it, it starts
falling apart for different reasons. It might be that they have to operate the amount of
electricity in all their depots, which should be costly. Other this logistics of figuring out when to
get the cars or how to go through and charge it falls apart. As we speak with fleets, they've tried it. They know what the challenges are. And so when we present our solution, they can quickly
see how it solves the problems they have. Speaker5:
President Biden said he wants to transition the entire
presidential fleet to electric, which is about six hundred and forty five thousand vehicles. But even Ampol admits that the U.S. may be slow to adopt the technology. Do you see adoption happening faster outside of the
U.S.? Speaker1:
Sadly, yes, you talk to a lot of fleets in the U.S. that actually do want to make the transition. You talked a lot. Municipalities that are already
making the transition. So the interest is there, but the actual adoption has
been happening more elsewhere. Speaker3:
The next phase of the plan is likely some more
deployments internationally. There are a lot of customers interested in our
solution to the EV infrastructure problem in Europe and Asia. Speaker5:
To move from fleets to individually owned gives ample
would need to get automakers and car buyers on board to replace the custom battery in their
EV with an ample system. Automakers pride themselves on their unique battery
tech, so it's hard for some analysts to imagine that this will take off. Speaker2:
If you're a car maker, the battery in your electric car
is a major, major structural element. It has structure going through it
lengthwise Speaker4:
And crosswise that are major parts of the cars crash
protection that are part of its Speaker2:
Overall shell. You're not going to want to use a standardized battery
format. It's part of a structure. It's the heaviest component in an electric car. Manufacturers are just not going to do that. Forklift manufacturers, OK, fine, not car makers. I think it's very unlikely that any automakers are
going to adopt it. Where you might see some adoption again is if you have
some particularly large fleets that are maybe converting some existing vehicles to electric
and then, you know, they might want to have whatever company they're working with to do
the conversion. Use an Apple style battery that might make sense, but
again, the manufacturers are increasingly moving towards building
their own cells in-house. So I think that the chances of a startup like Apple or
anybody else coming in and convincing manufacturers to go that direction is very
unlikely. Speaker5:
Well, it could be good for fleets. Some experts think U.S. car buyers will just not be interested Speaker2:
For the average person if they're going to go into a
swap station. They don't know what the history of the battery
they're getting is because batteries degrade over time. And so I think for consumers, there is likely to
be a little more of a reluctance to adopt this. Speaker5:
That could be why Tesla didn't give it much of a chance
back in 2013. It only opened one battery swapping station in between
L.A. and San Francisco, and it closed shortly after Elon
Musk said Tesla owners weren't interested in it. Speaker2:
And they did that mainly because of a loophole in
California's ZEV credit system that got them a whole bunch of extra
credits for EVs. They operated the station for about a year. It got almost no use. It was located in a very remote area. Speaker5:
But perhaps it would have been a different situation
for Tesla in a city. Speaker3:
I would say we're definitely targeting cities first. I think it's the most applicable in a high traffic
area. Speaker5:
But if Tesla, by far the US's largest EV company, opts
not to work with Apple, that could prove challenging for the company. Speaker3:
Have you talked to Elon Musk? Has he is he interested in Ampol? Speaker1:
We have not yet. He hasn't called us yet. I mean, I think he's doing an amazing job. He really made us all open our eyes and realize this
can work. But one thing that we always believed is that one
person is not only come up with all the answers takes all of
us. So we all need to solve our part of the problem. And even within the same problem, we need a lot of
solutions. Speaker5:
It's also unclear whether anyone would want to do a
battery swap when traditional charging keeps getting faster and faster. Charging can take a couple of hours, but with DC fast
charging drivers can get an 80 percent charge in about 20 minutes. There are more than 5000 DC fast chargers in the
United States today, and President Biden plans to spend billions to build 500000 more public
chargers. Speaker2:
And the question becomes If you can fast charge at that site, how much benefit is there to the consumer
of dropping out a pack in seven minutes? Let's say soup to nuts versus fifteen twenty twenty
five minutes where they can buy something to eat and use of
facilities and play with their phone. And that's an answer that only the consumer market can
answer. Speaker1:
We did spend a lot of time looking at charging. At some point you have batteries you can charge in
five minutes, but if you do that, you then need these massive chargers, maybe one to two megawatt chargers
to charge it very quickly. They're very expensive. The detail of construction to build they can be energy
inefficient. So this is a global problem. You need something that can work all the way from from
India to South America, and so went back and said battery swapping can solve those
problems. Speaker5:
Electric vehicles are expected to hit 10 percent of
global passenger vehicle sales by twenty twenty five. Rising to fifty eight percent of sales by 2040. So more charging will be needed, especially because
range anxiety is still a concern for buyers Speaker2:
To we do an annual EV consumer survey. And in our 2020 survey, the top three barriers to EV
adoption were the cost of the vehicles, access to charging and
the time it takes to charge Speaker5:
Even Big Oil is getting involved. Nio partnered with Chinese oil group Sinopec to build
its swapping stations and ample is raised $68 million in funding led by Shell Ventures and
joined by Repsol and Ineos. These fossil fuel centric businesses are slowly
starting to green their portfolios as governments push for an electric future. One of the Speaker1:
Debate we had internally early on is Do we want to
partner with an oil company? And I think it's obvious right now that they
do think of themselves as energy companies are not oil and gas companies anymore. That's the history. But humanity is moving on and
they're moving on with it. And they're saying, Listen, we also want to be part of
that solution. Speaker3:
Ev infrastructure is a huge problem. I don't think we should just do one thing. The two don't need to compete. I think there will be charging stations coming up and
that's great and there will be ample swapping stations coming out. And that's also great. And they have kind of different applications and
people will be able to choose which one is right for them. Speaker2:
I do think that battery swapping will become part of
the mix for the U.S. market, but mostly for commercial fleet operations. Not so much for consumers. Speaker1:
Some of the funniest conversations we had were when
you're trying to raise money, it was meeting with people who and we had one person who said, Look, I
don't see the problem. I have a Tesla. I can charge it overnight at home and
then they have no problems, like, what do you do when you drive far? Goes, I just take the push and then just take the
portion and go as far as what we did run into a lot of issues that people who who have the luxury of
charging it at home, not driving that far and probably having access to a
gas car in case they need to. And lots of people just do not see the problem. And there was a tough one to say that's that's a very
lucky situation to be in. That's not the rest of.
I would say don't sleep on polestar.
Scroll to after 28.15min mark. Volkswagen is investing big in software to fend off Tesla, tech rivals. They want to excel in autonomous driving. This makes me feel even confident that MicroVision is very likely working with Volkswagen in Germany.