Transcript 0:00 [gentle music] I think as more of the industry shifts toward electrification, which a- at least to my eyes is pretty undeniable that's taking place now, you're gonna see costs come down dramatically. 0:13 So I don't think it's beyond the pale, five years we'll see a $20,000 EV with or without incentives. 0:25 [upbeat music] Welcome back to The Peggy Smedley Show, the podcasting voice of IoT and digital transformation. Hello, listeners, and welcome back to The Peggy Smedley Show. 0:38 My next guest brings more than 15 years of experience in the automotive industry in marketing and media, working in both trade and consumer media. 0:47 He has covered the light truck market for more than a decade, following regulatory changes and shifting consumer preferences in the space, such as engine downsizing, the global growth of the crossover segment, and increasing regulatory scrutiny and enforcement of diesel emission standards. 1:07 Please join me in welcoming Edward Sanchez, senior analyst at Global Automotive Practice for Strategy Analytics. Edward, welcome to the show. Thank you. Thanks for having me, Peggy. So Edward, I'm really interested. 1:20 You know, we've talked on this show a lot about where the automotive m- market is going and where we think environmentally things are going, but I'm really kind of curious from your perspective right now, when we talk about the electronic... 1:34 you know, the electric plugin market itself, you know, we don't have a really great infrastructure- Mm-hmm... for addressing this. This is something that's now been 10 years right now. 1:44 I'm kind of curious your overall perspective of how this technology has actually impacted the overall automotive market, and maybe where you see it, m- you know, in general right now. Just your take on it. Sure. 2:01 Well, I mean, I think to be honest, um, like you said, it's kind of been in the works for the better part of a decade, and even before that with the GM EV1, which, um, dates back to the, uh, late '90s. 2:13 But, um, uh, you know, a lot of people that are really, uh, you know, pro free market kind of bristle at this, but, uh, I think the elephant in the room you can't really avoid is, um, a lot of it is regulatory driven. 2:25 Um, you know, between the EU and then most recently you probably heard, uh, California Governor Gavin Newsom saying he wants to ban, uh, internal combustion light vehicles by 2035. 2:39 So, uh, I mean, the momentum is clearly behind electrification. Um, now to your point about infrastructure, it's, it's really all over the map. 2:47 Um, there's certain regions and countries that are better prepared and a little further ahead, um, than others. 2:54 Uh, in the US, California's clearly in the lead in terms of, uh, the density and the build-out of, of charging infrastructure for EVs. Uh, in Europe, Norway is way ahead of everybody else. 3:07 Um, Norway and the Netherlands is, is doing a pretty good job. And, uh, actually in China, uh, the Chinese government has taken a very aggressive, um, stance in building out a nationwide EV charging infrastructure. 3:21 So, um, in terms of the US, I mean, on a national level we're kind of lagging a little bit, but, uh, there is some, some hope in, uh, uh, some regional pockets. So I'm gonna throw this out to you. 3:33 I, I get what Governor Newsom's doing, and I guess- Mm-hmm... you have to push everybody. In fact, I have a book that's coming, uh, out that's called Sustainable and a Circular Economy. Mm-hmm. 3:41 We really have to get everybody excited about being green and doing these things, but yet you ha- Mm-hmm... you, you, you have to push the needle, I get it. Sure. 3:51 But at the same time you have to build an infrastructure, and you can't do that overnight. There's a lot that has to be done. So we could say, "Hey, we're gonna do that," but we have to put everybody behind it. 4:02 You can't just do it in little parts of the world. I mean, everybody's gotta be behind that. So when we talk- Sure... about autonomous, we talk about EVs, we've all gotta be rowing in the same way- Mm-hmm... 4:15 or we're not going anywhere. So I, I guess that he wants to do that, but he's gotta get a complete rallying cry to make that happen. I mean, that's what we have to do. We're a, a make, take, waste society. Mm-hmm. 4:28 So I mean, just getting one part of the country, that's great. I'm gonna drive here from Illinois to California. Yeah. Uh, I'm not gonna get there. I mean, [laughs] you know, I mean- Yeah. Yeah... 4:37 your plugin's not gonna go there. I mean, so how are we gonna do that, I guess, when you think about the bigger picture? Yeah. I think a lot of it kind of hinges on consumer d- demand, uh, to be completely honest. 4:50 Um, in the early days, EVs were looked at as kind of weird, kind of glorified golf cart science experiments. 4:57 Um, I think the real game changer, and, you know, I know it sounds like I'm probably beating a dead horse with this, but it was, is Tesla. Um- Ah, Tesla... they've changed- Model 3... yeah, they've changed- Right... 5:08 EVs from being weird little, you know, dork mobiles to, to these, you know, fast, sexy, you know, status symbols. Um, so I think now the rest of the market is, is trying to kind of play catch up with them. 5:22 Um, you know, whether you're talking, uh, you know, BMW, Mercedes, um, you know, they're all working on EVs. Um, so- Don't they gotta be- But I think that the-... affordable? I mean, the problem I see- Well-... 5:35 with all of these is they're- Yeah... not necessarily affordable. I mean, now we've gotta try to get them- Mm-hmm... so everybody can afford them. And I, and I know we're gonna talk about- Sure... Chevy. 5:45 You know, Chevy came out with one and, and- Mm-hmm... made it a little bit more, but they seem to be a little pricey overall. 5:51 I mean, how do you make it so that we can drive an EV that's affordable, plus that you have all this when you're going home and you can charge it, and it's not just charging out in an infrastructure somewhere else? 6:03 I mean, you gotta be able- Sure... to plug this in when you go home at night.Sure. 6:07 Well, I, I kinda-- I guess I wanna take slight issue with that a little bit, um, because, uh, I, I'm actually a Model 3 owner myself, and I, I got the just the bare kinda entry-level model which I could afford, the Model 3, uh, what they call the SR Plus, the Standard Range Plus, um, which the sticker on it when I bought it was about forty thousand, which, you know, I mean, it's not, quote, "cheap," but, uh, you know, you look at most of the crossovers and SUVs out there, they're high thirties into the forties. 6:38 So, um, you know, I think this perception that, that Tesla's a hundred thousand dollar plus car, I mean, yes, they have, you know, six-figure models, uh, but between the Model 3, the Model Y, the small crossover they've just come out with, and Musk has even said he wants to do a car in the twenty-five thousand dollar range for the European and, and Chinese markets. 7:01 Um, so if that comes to pass, then they'll really be in the thick of, uh, the automotive market in terms of affordability. And that's where I think the biggest challenge is going to be. 7:12 And, and I know you say forty thousand, but if I'm, if I'm a younger generation, that price tag sticker is just a sticker shock. Sure. And that's why our younger generation is saying they don't wanna own cars. You know? 7:25 Yeah. They look at this and say, "Uber, hello." You know? [chuckles] Yeah. Yeah. I just, I, I just, I don't need to own a car. And that's kind of the challenge, I think. 7:33 I think we have to think about that, of saying if we want the younger generation to think they don't wanna get driver's license, and we want them to have driver's license, I mean, some of them don't even know how to parallel park, and they're not even teaching that in driver's ed. 7:45 We [chuckles] need to have our- Sure... younger generations thinking about all these things. We have to incentivize them to see there's a need and a desire. Sure. And you know, I think that'll come with scale. 7:57 I think, uh, you know, it reminds me of when flat screen TVs came out, and yes- [laughs]... I'm old enough to remember when they were, you know, TVs were two feet thick. But, um- I'm with you there... 8:08 uh, yeah, you know, the, the, the early flat screens were thousands and thousands of dollars, and now you can go into Walmart and get one for 200 bucks that can do 10 times as much as the early models did. 8:20 Um, so, you know, I, I, I don't know if the cost reduction is gonna be quite that dramatic with EVs, but I think as more of the industry shifts toward electrification, which, at, at least to my eyes, is pretty undeniable that's taking place now, uh, you're gonna see costs come down dramatically. 8:39 Um, so I don't think it's beyond the pale, in, you know, five years we'll see a $20,000 EV with or without incentives, potentially. And I think what Tesla's done is said it's about the battery. I mean, that's- Yeah... 8:53 where he's made it open up to all of us to understand, is what he's doing is saying, "Look, I wanna make it interoperable because I wanna show you it's all about the battery." Sure. I mean, we've, we've gotta do things. 9:04 Wouldn't you say, I mean, that's what you're doing? Electric cars are going to be a part of the future because it's green. There's so much more. 9:11 We have to figure out how we do this, but that's what he's essentially doing and saying he's changed our mindsets and our whole way of thinking in that, correct? Uh, yeah. I think, um, I, well, I think it's... 9:27 I might wanna redo this sentence. [laughs] Go ahead. 9:29 Um, uh, you know, I think he really has focused, um, uh, development on the battery and forced other OEMs to focus their development on batteries because, I mean, that's really the key enabling technology for EVs. 9:44 Um, electric motors themselves are really super simple and fundamentally haven't really changed really over the past century. I mean, you got a rotor and a stator. Uh, you know, you... 9:57 Some have magnets, some don't, but it's, it's basically a little spinning shaft. 10:02 Um, the, the secret sauce up to this point has been the control, so the modulation of, of that power, but most importantly is the battery technology. Um, 10:14 and I think the real key, and this is I, I think kind of been another hindrance for adoption of EVs is, um, is the charge time. I mean, let's, let's be honest. 10:23 Uh, you, you pull into a gas station, it's 5 to 10 minutes, in and out, you're back on the road. 10:28 Uh, you know, EVs aren't there yet, and I've, I've taken multiple road trips in my Model 3 and, uh, you know, you're, you're sitting there, you know, 30, 45 minutes to an hour waiting to charge, and that's on a fast charger. 10:42 So [laughs] if, if you're plugging f- you know, just a wall charger, you're looking at multiple hours. 10:47 I mean, thankfully, I can watch Netflix in my car, which, you know, not a lot of people can do, but, uh, y- you know, that is a convenience factor that, that needs to be overcome before I think you'll really see mass market adoption. 11:00 But we, from a, from a sustainability standpoint- Mm-hmm... and all the other things we talk about, if we wanna be green and we wanna do more things when we think about the future, this is where we're headed. 11:11 We- w- it's not even an, a- Absolutely. Yeah... an option. We are going there. Yeah. And it's just a matter of what that timeframe is. 11:18 And so if you look at electric cars, this is just so much better for our environment, period, right? Yeah. Yeah. 11:25 Uh, yes, I will address the caveat that a lot of detractors like to throw out, is, "Well, what are you gonna do with the batteries when they're done?" [laughs] Exactly. 11:34 And the thing I would bring up with that is, um, I don't know if you've... I'm, I'm sure you've heard the name. I don't know if a lot of your listeners have. Uh, JB Straubel. Yeah. Uh, he was, um, 11:45 one of the chief engineers, I think the, actually the CTO at Tesla for many years, um, and he was really instrumental in designing the Model S and the Model 3. 11:54 He since left the company, but he started another company called Redwood Materials, and their whole entire focus is dealing with the end-of-life battery issues with EVs. 12:06 So basically-Extracting and recycling, uh, the raw materials from the batteries in an environmentally, uh, responsible way. So they're kind of in stealth mode. 12:18 We don't know a whole lot of details about what they're doing, um, but that's a potentially pretty big development. 12:26 And I, I would also note, uh, Straubel's also just joined the board of QuantumScape, um, who's just recently claimed a breakthrough in, uh, solid-state batteries, which, um, really could be a huge game changer for the market. 12:41 And these are the th- exciting things that we think has to keep advancing when we look at technology. I have to tell you- Yeah... these are great discussions. I really enjoyed this. 12:49 Edward Sanchez, senior analyst at Global Automotive Practice for Strategy Analytics, thank you so much for your time today. I hope you'll come back. 12:57 I really wanna hear more as things advance because I think this is just the beginning. Even though we've been doing it for the past decade, I think there's so much more to talk about. 13:05 What's your URL so our listeners can, uh, learn more about what you guys are doing? Sure. Um, my company website is strategyanalytics.com, one word. 13:15 Um, if they're interested in, in a little more of an off-the-cuff take, um, I am a contributor, uh, to a blog site called The Watt Car, also one word. T-H-E W-A-T-T C-A-R, thewattcar.com. 13:31 Uh, so they can, uh, see what we have on offer in terms of, uh, business intelligence on Strategy Analytics and my personal take on EVs at The Watt Car. Love it. Edward, thank you so much. 13:42 All right, listeners, that's all the time we have for today. Remember, we are broadcast live every Tuesday at 12 PM Central. Check out our website at connectedworld.com or our show website at thepeggySmedleyShow.com. 13:53 But most importantly, what we want you to do is tweet at us at connectedwmag. All right. This is The Peggy Smedley Show, the podcasting voice of IoT and digital transformation. 14:03 And remember, with great technology comes great responsibility. Have an awesome week. [upbeat music]
