Here is a candidate for the single most important development in the global auto industry this year: One of every two new cars sold in China this year will be electric. Half! In the US and Europe, we are experiencing a kind of EV wheel spin. EVs as a share of total sales in America still hover under 10%. Europe is a bit higher at 15%, but the pace of growth has slowed dramatically. Why is EV demand growing so much faster in China than in the West? One big factor is the cost of batteries. That is where China enjoys a massive advantage. But the game is not over. Startups in the West, like OneD Battery Sciences, are developing better battery chemistries that deliver higher energy density at lower costs. What are they working on? How soon will we see breakthrough batteries? And how might the US electric change the landscape? To get answers, listen to Vincent Pluvinage and K.T. Neumann.
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Episode Transcript
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Speaker 1 (00:02):
Where top executives and crazy entrepreneurs gathered to talk about
the future of electric vehicles. This is the Driving with
Done podcast.
Speaker 2 (00:12):
Hello and welcome to the Driving with Done podcast. I
am Michael Dunn, your host. Now, when you think about it,
this could be the single most significant development in the
global auto industry this year. What am I talking about?
One of every two new cars sold in China this
year will be electric, one half in the world's largest
(00:33):
market going electric. Now, in contrast US and Europe, we're
experiencing a kind of EV wheel spin. EV's as a
share of total sales in America still hover under ten
percent one in ten. Europe is a bit higher at
fifteen percent, but the pace of growth has slowed dramatically.
Still growing, but at a much slower pace. Why is that?
(00:57):
Why is China racing so fast and the West sort
of playing ketchup way behind? One big factor is the
cost of batteries. That is where China enjoys a massive advantage.
But the game is not over. Startups in the West,
like one D Battery sciences are developing better battery chemistries
that deliver what higher energy at lower cost. Lower cost
(01:22):
is key. What are they working on over there at
one D. How soon will we see a breakthrough in
batteries and how might the US presidential election change the
battery landscape. Let's go find out with my two special
guests today, Vincent Pluvina's CEO and Katie Newman, board member
at one D Battery Sciences. Today, it gives me great
(01:51):
pleasure to welcome back to the show, to the Driving
with Done podcast two of my very good friends who
happen to have deep expertise in the future of batteries
and electric vehicles. That's Vincent Pluvinage, CEO of One D
Battery Sciences up in Powell, Alto and across the Atlantic.
My good friend Katie Neuman. We knew each other way
(02:13):
back when in China days Today Katie is also a
board member at one D Battery Sciences. Batteries. Where are things?
Where are they headed? Let's begin with you, Vincent, give
us an update on one D Battery Sciences, the mission
and where things stand today.
Speaker 3 (02:32):
Yes, I mean our story is pretty simple. Our CTO,
Yiman Jew has been developing for fifteen years a silicon
anode technology and what's unique about it is that it's
designed to be very scalable and very cost effective, much
more scalable and cost effective than any other cilicon solution
(02:53):
we know in the market today. And of course you
need to prove that to customers, and then that takes
quite a bit of effort. But I think we've made
great progress in making sure they understand the cost structure
and the benefits rincent.
Speaker 2 (03:08):
Are your customers the automakers or are they the battery manufacturers?
Speaker 3 (03:13):
Actually it's a very interesting. Our strategy has been too
focused on two side of the supply chain. On one hand,
the OEMs that want to achieve differunciation and lower cost structure,
and on the other hand, the grapha suppliers, the anode
material suppliers that basically want to have a better product.
If you take the top four an suplier in the world,
(03:37):
one is Korean, three are Chinese. They all actually today
are making second generation silicon, and so they are interested
in not sitting by. And the portfolio of product they
want to offer often include santiitic, graphied natural graphid and
some kind of silicon. And so the beauty about that
(04:00):
is that we can actually work with them for a
number of reasons and uh, and that is easy for
us because of our ip position, and easy for them
because they have a lot of off take agreements. So
they have the off take agreement with the cell maker.
And if you put yourself in the shoes of no EM,
(04:22):
you want to get your cell supply by multiple cell makers.
If you want to be in the shoes of another
battarial supplier, you want to off take agreement with multiple
cell makers. So by aiding a technology that is a
platform as opposed to a single product, it's easier for
us to work with the upstream and the downstream end
(04:43):
of the supply chain.
Speaker 2 (04:44):
All right, So if those something you just said really
struck me, Three Chinese and one Korean are the top
four manufacturers of the anodes with graph Yeah.
Speaker 3 (04:56):
Yeah. If you take if you take all of the
eb cell factories in the world, okay, and you ask
yourself who is supplying the anode materials for those factories? Yes,
And you want to narrow down from let's say one
hundred and fifty companies in the world to those that
have three characteristics. Number one, they're growing, Number two the
(05:18):
large scale of take agreement, and number three the global
footprint and are profitable. There is only four.
Speaker 2 (05:25):
Only four, well, where are the Germans, the Americans, the French?
Speaker 3 (05:28):
What happened?
Speaker 2 (05:30):
Where's the rest of the world. The Japanese.
Speaker 3 (05:31):
Well, in Germany as gl was trying to do it,
and as of a couple of months ago, they throw
the title and shut down the Anude materials. I think
you have people like Nouveoumone in Quebec that received recently
investment from GM and Panasonic, but they still have to
scale up, so they're not yet at scale and they are,
you know, not yet profitable. I think the Japanese used
(05:56):
to be Tachi chemically back in twenty eighteen twenty nineteen,
they probably at forty percent of the world market for
material outside of China, but they never invested in scaling
up because it was not profitable to compete on price
with the Chinese. They got a Quaby Showadenko who renamed
it Selvezonak. That business is basically minuscule today. And so yes,
(06:19):
the world of and material has.
Speaker 2 (06:21):
Changed heavily concentrated. Three the top four. Can you give
us the names? I'm curious.
Speaker 3 (06:26):
Well, in Korea it's Poscosco, yeah, and and in in
China it's btr futilized slash zer Chan and then shan Chan.
Now there is a few others like caging and sound
that are close by, so you could probably extend by
two or three my list, But but I'm trying to
(06:48):
simplify things.
Speaker 2 (06:49):
Okay, great, one final follow upon this before we go
too deep into the weeds. But I think it's fascinating
as the West tries to gather leverage batteries. We understand
that China manufactures most batteries, that has the supply chains,
that manufactures the cells, it processes the ingredients that go
into the cells. It looks like they have almost a
(07:11):
monopoly on things. But at the same time, there's companies
like yours that are into the design call it design
of chemistries to enhance the energy density overall value for
money of batteries. So as we look at the business
of batteries, is that the way that the West can
salvage some role in battery businesses the design or where's
(07:33):
the opening for non Chinese companies here?
Speaker 3 (07:36):
It's a very good question. I really like that question,
and I'm going to answer it the following way because
I feel that being a little startup is like being
on the serve board in the middle of the ocean.
And the position your serve board and wait for the
way because you kind of change the world. You know,
you have to kind of understand the market that I
mean can be at the right time, at the right place.
(07:58):
And here is the entry thing part about your question.
If you look at all the ev cell factories in
Europe and the United States, ninety five percent of the
graphi they use comes from Korea and China. Right, there
is really no large care production in the United States
or in Europe of any ev grade graphite. So one
(08:20):
way which would be wrong is to say the battle
is lost. But the flip side of the count is
that if you look inside China, there's been such an
expansion of production capacity on the anode materials that there
is probably as much as eight million tons of production
capacity and two million tons of demand from local evc
(08:43):
And so what is the reality in China is that
if you are a nanode producer, the price war is
so brutal that nobody is making money. And the squeezing
on margin means that if you have a ton of
capacity and the large customer is like you know, c
ATL for example, which is the largest ev cell maker,
(09:04):
they're going to play one against the other right, So
that's one aspect of it. And if you are one
of those large companies, then what do you do. You say, well,
I want to go where there is more money to
be made, and that means I'm going to go to
outside China. And what happened is that you have a
company like BTR that sets up not manufacturing in Indonesia
(09:29):
and Morocco, and then you have Chanshen that sets up
factory in Finland and Putali that sets up factory in Sweden.
So putal Eyes announced that they put building up one
hundred thousand terms capacity in Sweden, and I think BTR
sixty thousand tons in Morocco. Well, Morocco is a free
(09:54):
access to the European Union and Morocco as a free
trade agreement, you know the States, And so I think
that the geopolitics of this is that both side benefit
from this localization because the Chinese government is starting to
impose export license and graphite and European Union and the
(10:16):
North American countries Canada and the United States are putting tariffs.
But at the end of the day, the know how
and the scale and the off take agreements with the
incummons means that they're very happy to come and set
up shop and create jobs in Europe and the United States.
And so you're going to see a relocalization much the
(10:39):
same way that the German established John Venture not thirty
years ago. In China, the opposite is happening right now.
And Katie drew me the analogy. Many times they lunder
the good way and they're applying the lessons.
Speaker 2 (10:56):
Tell us more about that, Katie. What are you seeing
in Europe these days? You know, just red headlines at Northfold,
which was a shining star, you know, a rising star
for battery manufacturing, and out of Sweden is having a
rough time, is it. Do you see more and more
Chinese companies investing in batteries and battery supply chains in Europe?
Speaker 4 (11:16):
Yes, I think let's start with I believe the world
changed dramatically in pretty much all aspects. And one of
the aspects is and you know, I'm working with startups
but also with OEMs and also with battery makers, and
there's I think two major problems. One is, no one
can make money. The carmakers count on evs, the battery
(11:40):
makers count on batteries. The second option, the second the
big problem is no one knows what's going to happen
in the world, like politically, because everything changes all the time.
I think then the units just introduced one hundred percent
text on graphite or impoart and so and but you
don't know how the election is going to end up
(12:02):
in the US, and possibly both sides will find additional
means to protect the American American market. In Europe, we're
just about to launch the Texas on the Chinese cast.
So for a car maker, you don't know where to produce.
Actually the answer must be you have to produce in
all regions locally, but that is very unefficient, like you
(12:23):
know how the economics work, and also people are not
prepared for it, like for example, Postyle builds their cars
in mainly in China now and now we're just opened
our manufacturing in North America, but not for all cars.
So now we have to constantly to rethink the footprint.
And the same is to with the cell makers, and
(12:45):
the cell factories are basically not full, not in North
America and not in Europe. There's massive investments from Korean
and Chinese sell makers, but the factories are not for
Then on top of that, it is also very difficult
to build seals. I think Norfolk is currently learning it
(13:07):
the hard way. They try to like build like a
number of big giga battery factories in parallel, and they're
not getting the first.
Speaker 5 (13:16):
One to run, and so the whole world is in
a big turmoil.
Speaker 4 (13:22):
It's super difficult what to do, and it requires so
much money, and there is so massive investments and over
capacity from the Chinese side, and actually, if you look
at any business case, you would basically say it doesn't
make no sense.
Speaker 2 (13:36):
It doesn't let them have the entire world because they
have so much capacity. They could they could export to
Mars if necessary.
Speaker 4 (13:45):
They have well I wouldn't say that because what is
happening And you see it in the US that the
customs walls are built, So you have to find the strategy.
But I think it's Vincent feels a little lonely.
Speaker 5 (13:58):
On a surfboard in the ocean.
Speaker 4 (14:00):
How the wave is coming and you never know what's
what the next big thing is and you jump on one,
and then you see that's not going.
Speaker 5 (14:06):
To get me anywhere. I need a big, a different one.
Speaker 4 (14:09):
I think every OEM, every battery maker is in the
exact same situation right.
Speaker 2 (14:15):
Now, everybody's in the situation so hard.
Speaker 4 (14:18):
To understand, to define your strategy because your environment is
changing every day.
Speaker 2 (14:24):
Let me just summarize. One, you said hard to make
money right, Two hard to do the business of cell manufacturing.
Three the geopolitics are up in the air everywhere all
of the same time. How do you make a business
plan that makes sense exactly? Okay, what what do you
say to that? Vincent? You're on your surfboard. I know
(14:47):
you're doing. You're channeling Tahiti from the Olympics. We're still
having the afterglow of the Olympics. The surfboard is out there,
We're in the Pacific. Here comes a giant wave. Which
wave do you jump on? Do you jump on a? Well,
eventually it's going to be globalization, so just be patient.
Or do we think that we're moving into a new
era of nationalism where the West says we need our
(15:11):
own supply chains, we're going to pat on that and
China has a separate set parallel.
Speaker 3 (15:16):
Yeah, So let me kind of step back and and
understand what are the three ingredients of making a good
business work? Are you becoming profitable right? Yes?
Speaker 2 (15:28):
I want to know that that's a good question. Let
me write that down.
Speaker 3 (15:34):
I think that I think that this applies to many sectors,
but certainly applies to the EV supply China. The first
and most important ingredient is to recognize them when there
is a huge amount of shift in an industrial sector,
you know, like the advance of you know, cell phone
(15:57):
or in this case, the EV batteries. Typically those shifts
take on the dimension that is orders of magnitude greater
than what existed before, and the needy, greedy of actually
doing the manufacturing of these things, and the ability to
(16:21):
do it at scale and low cost. Because really what
drove the IVY transition is the fact that the terp
particular hours of little Malion batteries went down by tour
of magnitude. Right, That's what really was the fuel. There
is a very small amount of people with the right nohow.
(16:42):
So the mistake that people they thought is that you
can raise a ton of capital when interest rates are low,
and that you're going to be able to dominate by
just having plenty of cash. And that equation I've seen
play out in Silicon Valley over the last the years,
and it's always incorrect, and it's always incorrect for two reasons.
(17:06):
You give too much cash to a startup and you
end up wasting it. Number one and number two, there
will be a point where the interest rate go up
and the course of capical goes up, and then the
economics of your business are completely schooling. And so the
example of a good company like Norvault that you know,
had a great mission to create a greener battery and
(17:29):
manufacturing plans in Sweden and Canada and son even with
thirteen billion dollars of capital, and even after recruiting you know,
six hundred people from Korea, still has the problem that
delivering at scale good code and electrodes with very high
yield and very high safety and very high quality is
(17:52):
much harder than people think. And my Cto Yim and
Jew he had one d has been in the industry
for more than fifteen years. And I'm completely amazed that
everywhere we go together, you know, they talk about people
they know in common, because there is probably five thousand
people around the world that we're doing that, you know,
ten fifteen years ago. So the scarcity of talent is
(18:14):
actually one of the big big problems, Okay, And you
can reverse that and look at the automotive industry, the
ability in Germany to design very high performance I see
turbo engine liied with people in stut Guard and Eunique
and Frankfurt. And what happened is that when you want
(18:37):
to penetrate the Chinese market, then you create John Venture
where you assemble cards in China. But the core of
the technology is still and the IP do know how
is still in Germany. And that enabled the German to
gain a big footprint and VW and be waving a
(18:58):
big footprint in China. All the same thing is happening
now and so I think that the first lesson to
learn is that if people in China or in Korea
have had you know, ten fifteen years of scaling up stuff,
you need to embrace the know how. And so you're
going to see more and more John Ventures in North
(19:19):
America and Europe where people say, you know, I'm not
going to try to do it alone, I need help.
And so I think that the ability to rely on
the know how of people that have been doing it
is a necessarily equate part of the equation, as opposed
to say I'm just going to go head on and
displace them because I'm smarter it's not possible, Okay. I
(19:42):
think that the second piece is it's obvious that the
large Chinese automakers and the last Chinese ev cell makers
and the last Chinese material producers have to be a
global company. They publicly traded. They need to have a
global footprint for a number of reasons, including financial reasons,
(20:03):
and so their propensity to go and establish a footprint
in Europe in the United States is simply driven by
good sound financial management of public shareholders in those Chinese companies,
and by getting closer to the customers, they can avoid
all of the tariffs and the geopolitics and the logistics
(20:24):
of shipping stuff, and they can charge better prices with
better margins, even though the cost of setting up a
factory may be higher. People locally will pay more if
you have a lower carbon footprint and you can source
locally than if you need to import. And so I
think that that's what's happening. And I think the third aspect,
(20:45):
which have been convinced for ten years, but I'm glad
it's starting to pan out, is this notion that if
you even the infrastructure that has very large capital equipment costs,
and at the same time that you're trying to scale,
you need a lot of innovation. Then the industry needs
to organize itself to share differentiation, to essentially enable the
(21:11):
supply chain to take innovation and do it at scale.
And that is relying on IP rights. And that has
happened in semiconductor, it has happened in cell phone, and
it's happening now in ev You have LGES CEO that says,
you know, we have a lot of patterns and we
(21:32):
know about five hundred and fringers and we want to
license it. Why Because if they've invested ten fifteen years
in R and D, they want to connect some royalties.
Because one of the ways to improve your financial ratios
is I'm going to make a profit margin on the
stuff I make, and I'm going to pay some kind
of rent via licensing on the R and D IP assets.
(21:58):
And that leads to various steps of collaboration, whether it's
cross licensing, whether it's licensing. I mean, you saw quantum
Scape change its agreement with VW, and VW now is
basically free to do what they want. They have a
license and they're free to combine some of the quantum
(22:20):
Scape IP with some IP from other sources, right, And
I think that that's the nature of the beast, and
I think that's the trend that we foreshow ten years ago.
And let me make one blanket statement. I've analyzed all
of the IP in silicon anode in the world for
the last twenty years. Okay, And if I take the
(22:41):
top four and producers that I just mentioned earlier, one
D has more granted IP with better priority day that
all of them combined.
Speaker 2 (22:51):
Beautiful.
Speaker 3 (22:52):
So and we're not trying to displace anybody, We're trying
to help. And so you know, by being open to say,
you know, we want to help you not only enhance
your product and differentiate, but to do that in Europe,
in the United States, where IP rights have to be
respected and where OEM will not touch your product with
(23:12):
ten foot pat if you don't have IP freedom to
operate has put one D in a pole position. And
at the same time, you know, other competitors that you
know are high flying have also of IP problems. They
have pattern lawsuit between them. The Pattern Office is starting
to refuse their patterns based on ours because of better
(23:33):
priority dates. And so it's becoming obvious now we have
not you know, we've been saying that for a while,
but now people are starting to understand it.
Speaker 2 (23:43):
Let me ask a question that's a little bit sensitive,
but probably a top of mind for a lot of
people listening, and that is IP. You've developed the IP
over ten years, you have best in class, your customers
are Chinese, three of the four top or Chinese. How
do you work out protecting that intellectual property or do
you say, well, we just got to keep innovating.
Speaker 3 (24:06):
Well, two things. One is I'm not going to address
the point about how you protect intellectual property in China.
That's a completely different goal game. Okay, But if you're
looking at Europe and the United States, if the customers
are the OEMs and they are you know, VW or
(24:27):
GM or whatever it is, and they're the one that
is going to incorporate the materials and batteries in their cars,
there is no doubt that IP freedom to operate on
their suppliers becomes very important. And I think that what
comes naturally is that we can do licensing with anybody
(24:47):
in the supply chain, especially agent companies that set up
shop in Europe and the United States, and those contracts
are not based on our ability of enforcing pattern rights
in China, which I'm I'm not going to talk about.
It's going to be based on a win win contract
that is beneficial to our licensee and beneficial to our
(25:11):
shareholders in Europe and the United States.
Speaker 5 (25:14):
Okay, very good.
Speaker 2 (25:15):
Now, all of this demand future demand for nodes and batteries,
of course, is dependent on demand for electric vehicles themselves.
And today in twenty twenty four, we have this massive
discrepancy in demand in China. Last month, for the first time,
EV's as a share of new car sales exceeded fifty percent,
the world's largest market. We've gone from like eight percent
(25:36):
to fifty percent in four years, just stunning rise. On
the other hand, here in the United States, we're kind
of meandering around eight nine percent, And in Europe, Katie,
I think it's a similar story. So I wanted to
ask you, you're on the ground there in Germany, what's
the feeling, the vibe when you talk to friends and
family about EV's today. Are we stalling or is it
(26:00):
just a temporary pause and it's going to take off again.
What's the feeling on the ground in Germany today.
Speaker 4 (26:06):
It's very difficult to answer. I think the frustration is
high because the market is not where it should be,
and it actually slowed down. I think it had a
lot to do with the German government's brilliant decision as
a surprise to suddenly stop the support.
Speaker 5 (26:23):
So for many consumers they were really left in a
bad situation with that.
Speaker 4 (26:29):
But in generally you hear the discussions about the European
Union has decided that in thirty five you cannot build
combustion engines anymore, and now there's a discussion of whether
they should be postponed, whether this is an goal impossible
to reach. But you hear different voices, right, you hear
a lot of all ways. Like I think just the
CEO of Folksbunk just said he doesn't think it's a
(26:51):
good idea to push it out because I think it
would detract the industry and the whole ecosystem from this target. Unfortunately,
for a stupid reason. I think in America we have
a little bit of that. Evs even became a political subject,
like it is a political statement not to drive an
ev you are not not to follow this this crazy
(27:14):
green and ideas. So I think I cannot predict where
this is going to end. I'm very sure that in
the end everything will be ev Yes, there's of course
things like hybrids and and and.
Speaker 5 (27:34):
And range extending in evs, but it's it's all.
Speaker 4 (27:39):
It's all like an in between, right, It's all not
not the real thing, because we can build evs now
which work, which you can use every day, which you
can drive long distances with which we can recycle, so
it makes sense.
Speaker 5 (27:54):
I think this whole discussion about artificial feuds and see.
Speaker 4 (27:57):
Your two neutral fool feuds is in interesting and hopefully
it will allow me to drive my old push bushes
in a few years.
Speaker 5 (28:05):
But it doesn't solve a mass problem.
Speaker 4 (28:07):
So the mask the mass problem of that we need
to drastically reduce the CO two in the sector, which
which actually the transport sector couldn't in the last years,
but possibly I think the only sector didn't achieve its
targets and it's still lacking behind because people want goods
are moved, so we have to move to electrification. It
(28:28):
will come, but I think it's it's really bad that
we still have a lot of OEMs and also suppliers
who think, oh, the old world.
Speaker 5 (28:37):
Was so nice, we knew how to make money.
Speaker 4 (28:39):
We still knew how to make money with our big
SUVs with combustion engines or hybrid SUVs.
Speaker 5 (28:46):
So maybe we can we can extend this world a
little bit.
Speaker 4 (28:49):
No, I think we need more passion to adapt the
new world and to become leaders in.
Speaker 5 (28:55):
That new world. And that, and I said that before,
is much harder when.
Speaker 4 (28:59):
Your GM, or when you're a Volkswagen and you're building
these fantastic combustion engine cars and you make money on them,
and you tell people you could also alternatively buy an
electric car from US, which is also great, and indeed
it is, but you know what you're.
Speaker 5 (29:14):
Not saying but thinking, But it doesn't make money for me.
Speaker 4 (29:17):
So that's why I think that the native electric brands
like Tesla, but also like like bolt Star and Sofo,
when the Chinese have a much easier position because.
Speaker 5 (29:31):
You go out you say, my destiny electrification. The right
thing to do is electrification. Don't buy a combustion engine car,
buy an TV because it's the better car.
Speaker 4 (29:40):
It's I don't know anyone who drives an EV wants
to go back to a combustion engine. I know many
people who have a combustion engine car and think, no,
EV's are not good for me.
Speaker 5 (29:50):
I can't charge them, you can't.
Speaker 2 (29:52):
Drive with them, no discussion, there's no TV, No, there's
no have you ever been in an EV?
Speaker 3 (29:58):
No?
Speaker 2 (29:58):
Have you ever visited a test?
Speaker 4 (30:00):
No?
Speaker 5 (30:01):
Want?
Speaker 2 (30:01):
No, no no.
Speaker 3 (30:05):
I would start with what you just say, you witness
a disparity, and you say, in China it's more than
fifty percent and in the United States, in Europe it's
less than fifteen percent, right, And then you kind of
have to ask yourself the fundamental question why why? And
there is at least two answer to that question. One
(30:25):
is that it's the affordability of evs. In China, evs
are far less expensive and much more affordable. In Europe
and the United States, there is virtually no EV for
less than thirty five dollars with a reasonable ranch. That's
the number one reason, okay, And why is that? If
(30:46):
you take the dollar par kilar what hours of an
EV battery the course of an EV battery in China
versus Europe and the United States as a delta of
about fifty dollars minimum.
Speaker 2 (30:59):
Fifty percent of the total cost.
Speaker 3 (31:03):
Well, Leah, and then I'm telling you if you have,
if you have a seventy kilo, what our battery and
why do I choose the seventy five kilo what our battery?
At four miles per kida? What ours is three hundred miles,
which is you know, plenty for most people. So if
you have a seventy kilo what our battery and you
(31:23):
have a difference of fifty dollars per kila what ours?
Okay times seventy boom, you have twenty eight hundred dollars,
which is the profit margin on the thirty five dousand
dollars car. Yes, right, So the entire profit margin of
producing profitably a twenty five thousand or less EV disappears
(31:49):
if you cannot produce the batteries at a cost competitive manner.
So reducing the cost of the batteries the number one
problem to make affordable TV because if you sell an
affordable TV at twenty five but you pay but no,
you paid well. But if you pay too much for
the battery, you don't make money as I know, yet
you're to lose money, okay, And so the second reason
(32:12):
is the recharging. Right. If you are like Katie and I,
we don't drive long distance. My commute is twelve to
fifteen minutes, and I have a big garage and I
can recharge at home during the night, so recharging is
not an issue. The majority of people that have lower
income of longer commute and live in apartment buildings, and
(32:36):
if the charging network and the charging speed is too slow,
it's a real pain in the bat And so you
have to do something about both the charging speed and
the charging network availability in order to penetrate a large
percentage of the US market. Now, I'm not talking about
the Bay Area where I live, because there is a
supercharger on every corner, not quite, there is plenty, but
(33:00):
in big chunk of Europe and big chunk of the
United States, it's not true. I spent some vacation a
year ago in Italy and I had to drive, you know,
twenty five minutes to get to the nearest supercharger, and
there was a test Lage supercharger, right, And that's not
really convenient. In vacation, it's okay, But if I was commuting,
would be okay. And I think that the way we
view this as an opportunity is that with the only
(33:22):
city con solution that is cheaper than graphied, we use
the cost of the battery, we make the battery smaller,
think and fitty smaller car. We triple the charging speed,
and we increase the ranch and when you do all
of those things, you begin to the equation to addressing
the problem.
Speaker 2 (33:41):
Can we go back to that gap you talked about
the fifty dollars gap between a battery manufactured in China
versus anywhere else in the world. What in your view
are the key elements contributing to that gap.
Speaker 3 (33:54):
Well, first of all, if you're talking about sending up
a factory, whether it's uh, you know, I know, material
material or eb Sell factory between China and the United States,
there is a ratio of four to one in terms
of capex. That's a big problem.
Speaker 2 (34:10):
Why Why for the one, Well, it's the course of.
Speaker 3 (34:13):
The land, a lot of the fee for the engineering firms,
and the construction costs and the cost of equipment, and
so the the the delta is incredible, right, and so
at the end of the day, you have to have
capex depreciation as part of your corastructure. But if you
capex is that much more, then you have a problem.
Speaker 2 (34:36):
I think that it's a big problem, right, I mean.
Speaker 3 (34:39):
Yeah, I think there is another problem is that in China,
a lot of the state owned banks can make loans
to enterprises even if there is no off take agreement
and UH and there is a couple of things happening.
Then if you have access to a lot of free
capital to expand before you have secure the customers, people
(35:02):
are racing to scale to attract customer. There is a
peculiarity in many provinces. You don't have to depreciate your
capex while you're not yet producing at scale, so it
doesn't show up on your P and L. And then
many many banks that are stayed on banks in the
provinces and their bad loans can send the bad loans
back to Beijing and they disappear. This kind of financial
(35:25):
system has a propensity to create bubbles, right and we
saw that in real estate there is a trillion dollars
of real estate that is empty enough to house an
apartment built in China fifty million people. In the West,
you have the opposite problem. The banks are going to
reinsist on aron clad off take agreement before they provide
(35:46):
the debt, and so I think that that contributes to it.
And then of course there is the cost of energy
in various places. The cost of energy is just too
high now in Sweden, cost of energy is very low,
but in Germany cost of energy is very high. So
you have external factors that makes the economics very different.
Speaker 2 (36:05):
Okay, So Katie you're advising, say, for example, let's imagine
the CEO from Northwold calls tomorrow and says, man, I'm
facing this incredible headwind because the Chinese have me on
every cost runt at four to one on cappex. That's
just the beginning, and I gotta find the talent and
all the rest. What would your advice be? And you
(36:26):
can't say surrender?
Speaker 4 (36:28):
Oh no, And I think they really shouldn't because they
are important because there's not so many capable team of
people with capital behind them in Europe which would be
able to build a battery factory. And I think they
just took a little bit too much on their plate
(36:48):
in parallel specifically, like if you if you see, the
factory is the largest one in Europe they are building,
and I think they they should like, yeah, really focus
on fixing that place first and then possibly get advice
or partnership whatever to fix it so that they can
(37:10):
produce mass produce cells out of this factory. And because
the political ta wind, they have and for good reason
because in the end, yes, the Chinese and the Greens
are building factories. Korea is easier because there we have
a more open relationship. But with China, well we force
(37:31):
them partly into joint ventures. But that's exactly like what
Vincent mentioned before. That's exactly what they did to us
with the car industry, but they keep the IP. So
I think for Europe it is important that companies like
Norfolk succeed. For Norfold, it is important important, I think,
to do a little bit more Chinese steps, and also
(37:53):
it is important for them. And here we come back
to Vincent. They need IP, they need something to differentiate themselves.
And there I think again one d comes into the
game or companies like us there we all should be
a little bit more open. I still see too much
in the outer industry of yeah, we can do it ourselves.
(38:16):
We have always done it this way. And what Vincent,
I think you didn't talk about today is that we
have built a whole pilot factory in Washington State. That
for because they just don't believe if they get the theory,
they don't believe if they get the prototype selves, they
(38:36):
need to see and touch a full manufacturing line before
they trust us that we can we can deliver.
Speaker 5 (38:43):
And so.
Speaker 4 (38:45):
I think we all have to get faster and we
all have to work more together. The European out industry
has to work together to come up with affordable electric cars.
And you know, we had this discussion bible between Reno
and Volkswagen.
Speaker 5 (38:58):
I would have thought there would.
Speaker 4 (38:59):
Be a fantast stick thing to create scale and to
take I think is possibly more competent to cut costs
down of all efficient costs. But then it again fell
into the old patterns of behavior, unions being concerned and
management becoming concerned. So I think I would not surrender.
(39:19):
I would fight. I think we have to. This is
the most important industry we have in this in this region,
and we can't if if but we have to reinvent
how we work and to reinvent also possibly some of
our business models.
Speaker 2 (39:33):
All right, guys, with the time remaining and the time
is just flown by, I have a very We have
a tiny little election coming up here in the United States.
Tiny not that signal, well kind of important. Who's going
to win? And then will policies around evs change dramatically
On the other side, whoever wins. Who wants to take
(39:54):
that one? On first?
Speaker 3 (39:55):
Well, on the first question, I have no idea, no idea.
I don't think anybody knows. I think that fundamentally the
policies will not drastically change because it's all about economics
and jobs. And I think whomever is in the White
House will have to take care of economics and jobs.
(40:17):
And I think that on the edge, the government alone
cannot do squat. You know, it is not the best
capital allocator, but the government can help private enterprise and
can help you know regulations and can help you know
the ability to ensure green supply chain. An example of
(40:41):
EU regulation is this battery passport that creates transparency at
the consumer level on the sourcing of components. Well, that's
an example of a very interesting sound requirement that is
relatively requirement that helps the consumers but really provides an
(41:01):
incentive for everybody along the supply chain around the world
to take care of understanding the sourcing and the carbon
footprint and so adding that, you know, aside from the
extremely no the United States political system as your tendency
to exaggerate division for various reasons. Adding, at the end
(41:22):
of the day, the world is pragmatic and compromise will
be found and the Anders will move forward because there's
just too many jobs at stake.
Speaker 2 (41:32):
Europe doesn't have an election kt but recently put announced
new terrorists on Chinese imports. Yeah, so what's your view there.
Do you think Europe will hold the line and limit
the imports from China in order to encourage investment into
Europe or how do you see that playing out in
the coming months and years.
Speaker 4 (41:53):
Well, I think they are pitching a problem right. It's
possibly the right thing to do at this moment in
time to fix that immediate problem. But what we really
like in Germany, and I also think in the US,
is a good strategy. What do we want to be
in five years and ten years and fifteen years. You know,
Michael very well that the Chinese have that. If the
(42:15):
strategy needs adaptation, they adopted. But they go there and
they told us that twenty years ago we will be
the world leaders.
Speaker 5 (42:22):
In electric cars.
Speaker 4 (42:24):
That's right, And if you want to achieve that, you
have to have a strong home market. So if Europe
would have said that twenty years ago, they should have
had a policy to like transform our own market into
an eb market. They didn't do that, and they didn't
do it because us, the OEMs, pushed against it. We
said no, no, no, let us alone. We know what's right.
(42:46):
Don't give us a solution. And so I think we
must be upset about our governments, and possibly we should
vote for a different government which goes for giving us
a perspective again making a plan together with the industry.
Speaker 5 (43:02):
But make a plan and then work on it and
stay with it for a while.
Speaker 4 (43:06):
That's what the Chinese do and that is a success
they're generating.
Speaker 5 (43:09):
And now what we can do.
Speaker 4 (43:10):
We can petch it, we can introduce customs, we can
give an incentive here or there, and then we stop
it again.
Speaker 5 (43:17):
I don't see a good strategy.
Speaker 4 (43:19):
Possibly the europe postponed thirty five, make it forty, but
that would make problems worse, I believe. So I'm pretty
frustrated about that because I don't see it coming. And
I also don't see again that the OEMs get it
or the t one s get it, and so that
I think we will all struggle.
Speaker 2 (43:38):
It seems like I absolutely agree. It seems as if
there isn't there's an absence of a direction. Where are
we going? What do we want to accomplish. And even
in the you know, especially in the political debates going
into the election here in the United States, I see
them being masters of criticism of the other side, but
no one presenting really a clearity where we want to
(44:00):
go as a nation.
Speaker 3 (44:02):
You know, there is one topic we didn't talk about,
and that's education and education let me kind of put
it abroad, since right, both in Europe in the United States,
there is fantastic graduate schools that graduate people with a PhD.
That they've extremely advanced knowledge in physics and chemistry and sound.
(44:23):
But one of the things that got lost over the
last forty or fifty years both in Europe in the
United States is really the manufacturing no hard and there
is less people that they've actually the technical expertise that
is required to run a good factory. There were more
in the past, and that has decreased. And my daughter
(44:46):
works for Apple, my youngest daughter, and she put you know, recently,
one of the most innovative products that was designed in
Cupertino in manufacturing, and she was sent for a month
in China to essentially the production line that kind of
experience to be on them for manufacturing flaw side by
(45:07):
side with young Chinese people. It's an enormous amount of
nohow and I think the more you do that, the
more you will give hope to the younger generation. But again,
the government can give a policy that encourages that, because
at the end of the day, if you cut yourself
off of the education side, you will not in the talent.
(45:29):
And you know in Germany it is in Munster. You
know a fantastic group of universities that has worked on
batteries for twenty thirty years. There is a professor Martin
Winter who is world fame, is very pragmatic guy, and
he had his budget cut down and it really blew
my mind to a person of that knowledge being given
(45:51):
less money when he's training the next generation.
Speaker 2 (45:54):
Okay, would you guys run for office and next time
I'm too old, You've got another fifty sixty years. What
are you talking about?
Speaker 3 (46:06):
Yeah, huh.
Speaker 2 (46:08):
This is tremendous conversation. Very timely. Things are up in
the air. I think last time we talked, things look
much more optimistic about EV's There was momentum, there were
there was just an excitement, and now there seems to
be a kind of a pause at least in the West.
About where where to from here? So thank you both,
(46:29):
gentlemen for your time today. And last question before we
go briefly, everyone's always curious about I am like, what
car do you drive? What are you driving today?
Speaker 3 (46:40):
Yeah? Tesla?
Speaker 2 (46:41):
Why? Tesla? Why the best selling? Is it still the
best selling vehicle in the world?
Speaker 3 (46:45):
Yep?
Speaker 2 (46:46):
Whoa KT points stuff three?
Speaker 5 (46:50):
Oh?
Speaker 2 (46:50):
You have the three?
Speaker 5 (46:51):
Yes?
Speaker 2 (46:52):
How do you like it?
Speaker 5 (46:53):
I love it?
Speaker 4 (46:53):
I think it's amazing because the points doff tool was
a good car, but it was also it wasn't yet
able to reflect what the Posta.
Speaker 5 (47:02):
Brand should be. Okay, luxury and premium brand.
Speaker 4 (47:05):
And now Posta three can can display that very impressive phenomenal.
Speaker 2 (47:10):
Please take some video of you in the car. I
like to see it.
Speaker 3 (47:16):
And you know what my license plate is, Michael, No,
I don't. One day in California you can have a
personalized license plate. My license it's called Sina Node.
Speaker 2 (47:26):
Sina Node. Okay, I'll look, I'll look for you. What color?
What color model?
Speaker 3 (47:30):
Hy blue?
Speaker 2 (47:32):
Blue, interior white? White? Nice?
Speaker 5 (47:36):
Nice?
Speaker 2 (47:37):
Kat? What color you got?
Speaker 5 (47:38):
I got a white one also with also like white
level right?
Speaker 2 (47:42):
Not white?
Speaker 5 (47:42):
Nice? Michael?
Speaker 2 (47:44):
The bottle ass it's like a metallic gray with a
white interior. Yeah. And last question, I keep giving you,
guys last questions. What I'm curious on the postar three?
What's the range? Non, you're why what's the range?
Speaker 3 (47:59):
Pots?
Speaker 5 (47:59):
That Actually very honest with you.
Speaker 4 (48:01):
I haven't really tried it yet on a long distance
because I just got it like two weeks ago. I
will do a long distance and I can tell you
what it displays. Me is four hundred and thirty kilometers.
What does that in mya?
Speaker 5 (48:15):
It's like.
Speaker 2 (48:17):
Yeah, yeah, okay, good?
Speaker 3 (48:20):
And mine is three twenty five miles.
Speaker 2 (48:23):
Three twenty five okay, so you don't need three twenty
five because your commutes are short. You can give me
that car and get another one. That's just that's right.
Speaker 3 (48:31):
Yeah, but my daughter keeps borrowing it to.
Speaker 2 (48:36):
All right, gentlemen, thank you so much for joining me today.
Always a pleasure. I can't wait for the next time
to see you guys.
Speaker 5 (48:42):
Thank you in person.
Speaker 2 (48:44):
All right, what did we learn? We learned lots today
from Vincent and KT. Here are three major takeaways from
my perspective. One is an obvious one. The People's Republic
of China continues to cement its position as the undisputed
(49:08):
leader in electrics. In batteries and battery supply chains, China
has a seven to ten year lead. The West finds
itself in an unfamiliar position of having to play catch up.
And catch up in batteries and electrics is hard for
us in the West for three reasons. One, where's the
money If you don't have the scale and you don't
have the low costs, really tough to make money on electrics,
(49:32):
So your volkswagens and gms. As Kat told us, why
not keep making those gasoline powered SUVs and trucks cash
profits hand over fist electrics. It's hard to get excited
about it if you're counting the cash. Two, the geopolitical
tensions keep rising, shifting what to do, where to put
(49:54):
our plans? How much should we invest? How risky is it?
Will new tariff walls go up? Don't know?
Speaker 4 (50:00):
Oh?
Speaker 2 (50:00):
And three, let's not forget that the business of making
battery cells is no piece of cake. And the reality
is that here in the West we simply don't have
enough people who know how to do it. Okay, don't
get too depressed, No, not to worry. We're still in
the early days of evs, there is time for a rally,
(50:23):
and companies like one D with Vincent riding its surfboard
in the middle of the ocean, are still confident about
catching that big wave. Love to see that confidence Vincent.
All right, that is your takeaways. I am Michael Dunn.
Thank you so much for listening to this episode of
the Driving With Done podcast.
Speaker 1 (50:43):
Where you meet the experts creating the technologies that will
power tomorrow's cars electric autonomous software. To find this is
a Driving with Done podcast.
Speaker 4 (50:55):
Thank you for.
Speaker 1 (50:55):
Joining this episode of the Driving with Done podcast. To
connect with the Michael, visit Doninsights dot com or find
Michael on x or LinkedIn. This is the Driving Done Podcast.
Where top executives and crazy entrepreneurs gathered to talk about
the future of electric vehicles. This is the Driving with
Done podcast.
Speaker 2 (00:12):
Hello and welcome to the Driving with Done podcast. I
am Michael Dunn, your host. Now, when you think about it,
this could be the single most significant development in the
global auto industry this year. What am I talking about?
One of every two new cars sold in China this
year will be electric, one half in the world's largest
(00:33):
market going electric. Now, in contrast US and Europe, we're
experiencing a kind of EV wheel spin. EV's as a
share of total sales in America still hover under ten
percent one in ten. Europe is a bit higher at
fifteen percent, but the pace of growth has slowed dramatically.
Still growing, but at a much slower pace. Why is that?
(00:57):
Why is China racing so fast and the West sort
of playing ketchup way behind? One big factor is the
cost of batteries. That is where China enjoys a massive advantage.
But the game is not over. Startups in the West,
like one D Battery sciences are developing better battery chemistries
that deliver what higher energy at lower cost. Lower cost
(01:22):
is key. What are they working on over there at
one D. How soon will we see a breakthrough in
batteries and how might the US presidential election change the
battery landscape. Let's go find out with my two special
guests today, Vincent Pluvina's CEO and Katie Newman, board member
at one D Battery Sciences. Today, it gives me great
(01:51):
pleasure to welcome back to the show, to the Driving
with Done podcast two of my very good friends who
happen to have deep expertise in the future of batteries
and electric vehicles. That's Vincent Pluvinage, CEO of One D
Battery Sciences up in Powell, Alto and across the Atlantic.
My good friend Katie Neuman. We knew each other way
(02:13):
back when in China days Today Katie is also a
board member at one D Battery Sciences. Batteries. Where are things?
Where are they headed? Let's begin with you, Vincent, give
us an update on one D Battery Sciences, the mission
and where things stand today.
Speaker 3 (02:32):
Yes, I mean our story is pretty simple. Our CTO,
Yiman Jew has been developing for fifteen years a silicon
anode technology and what's unique about it is that it's
designed to be very scalable and very cost effective, much
more scalable and cost effective than any other cilicon solution
(02:53):
we know in the market today. And of course you
need to prove that to customers, and then that takes
quite a bit of effort. But I think we've made
great progress in making sure they understand the cost structure
and the benefits rincent.
Speaker 2 (03:08):
Are your customers the automakers or are they the battery manufacturers?
Speaker 3 (03:13):
Actually it's a very interesting. Our strategy has been too
focused on two side of the supply chain. On one hand,
the OEMs that want to achieve differunciation and lower cost structure,
and on the other hand, the grapha suppliers, the anode
material suppliers that basically want to have a better product.
If you take the top four an suplier in the world,
(03:37):
one is Korean, three are Chinese. They all actually today
are making second generation silicon, and so they are interested
in not sitting by. And the portfolio of product they
want to offer often include santiitic, graphied natural graphid and
some kind of silicon. And so the beauty about that
(04:00):
is that we can actually work with them for a
number of reasons and uh, and that is easy for
us because of our ip position, and easy for them
because they have a lot of off take agreements. So
they have the off take agreement with the cell maker.
And if you put yourself in the shoes of no EM,
(04:22):
you want to get your cell supply by multiple cell makers.
If you want to be in the shoes of another
battarial supplier, you want to off take agreement with multiple
cell makers. So by aiding a technology that is a
platform as opposed to a single product, it's easier for
us to work with the upstream and the downstream end
(04:43):
of the supply chain.
Speaker 2 (04:44):
All right, So if those something you just said really
struck me, Three Chinese and one Korean are the top
four manufacturers of the anodes with graph Yeah.
Speaker 3 (04:56):
Yeah. If you take if you take all of the
eb cell factories in the world, okay, and you ask
yourself who is supplying the anode materials for those factories? Yes,
And you want to narrow down from let's say one
hundred and fifty companies in the world to those that
have three characteristics. Number one, they're growing, Number two the
(05:18):
large scale of take agreement, and number three the global
footprint and are profitable. There is only four.
Speaker 2 (05:25):
Only four, well, where are the Germans, the Americans, the French?
Speaker 3 (05:28):
What happened?
Speaker 2 (05:30):
Where's the rest of the world. The Japanese.
Speaker 3 (05:31):
Well, in Germany as gl was trying to do it,
and as of a couple of months ago, they throw
the title and shut down the Anude materials. I think
you have people like Nouveoumone in Quebec that received recently
investment from GM and Panasonic, but they still have to
scale up, so they're not yet at scale and they are,
you know, not yet profitable. I think the Japanese used
(05:56):
to be Tachi chemically back in twenty eighteen twenty nineteen,
they probably at forty percent of the world market for
material outside of China, but they never invested in scaling
up because it was not profitable to compete on price
with the Chinese. They got a Quaby Showadenko who renamed
it Selvezonak. That business is basically minuscule today. And so yes,
(06:19):
the world of and material has.
Speaker 2 (06:21):
Changed heavily concentrated. Three the top four. Can you give
us the names? I'm curious.
Speaker 3 (06:26):
Well, in Korea it's Poscosco, yeah, and and in in
China it's btr futilized slash zer Chan and then shan Chan.
Now there is a few others like caging and sound
that are close by, so you could probably extend by
two or three my list, But but I'm trying to
(06:48):
simplify things.
Speaker 2 (06:49):
Okay, great, one final follow upon this before we go
too deep into the weeds. But I think it's fascinating
as the West tries to gather leverage batteries. We understand
that China manufactures most batteries, that has the supply chains,
that manufactures the cells, it processes the ingredients that go
into the cells. It looks like they have almost a
(07:11):
monopoly on things. But at the same time, there's companies
like yours that are into the design call it design
of chemistries to enhance the energy density overall value for
money of batteries. So as we look at the business
of batteries, is that the way that the West can
salvage some role in battery businesses the design or where's
(07:33):
the opening for non Chinese companies here?
Speaker 3 (07:36):
It's a very good question. I really like that question,
and I'm going to answer it the following way because
I feel that being a little startup is like being
on the serve board in the middle of the ocean.
And the position your serve board and wait for the
way because you kind of change the world. You know,
you have to kind of understand the market that I
mean can be at the right time, at the right place.
(07:58):
And here is the entry thing part about your question.
If you look at all the ev cell factories in
Europe and the United States, ninety five percent of the
graphi they use comes from Korea and China. Right, there
is really no large care production in the United States
or in Europe of any ev grade graphite. So one
(08:20):
way which would be wrong is to say the battle
is lost. But the flip side of the count is
that if you look inside China, there's been such an
expansion of production capacity on the anode materials that there
is probably as much as eight million tons of production
capacity and two million tons of demand from local evc
(08:43):
And so what is the reality in China is that
if you are a nanode producer, the price war is
so brutal that nobody is making money. And the squeezing
on margin means that if you have a ton of
capacity and the large customer is like you know, c
ATL for example, which is the largest ev cell maker,
(09:04):
they're going to play one against the other right, So
that's one aspect of it. And if you are one
of those large companies, then what do you do. You say, well,
I want to go where there is more money to
be made, and that means I'm going to go to
outside China. And what happened is that you have a
company like BTR that sets up not manufacturing in Indonesia
(09:29):
and Morocco, and then you have Chanshen that sets up
factory in Finland and Putali that sets up factory in Sweden.
So putal Eyes announced that they put building up one
hundred thousand terms capacity in Sweden, and I think BTR
sixty thousand tons in Morocco. Well, Morocco is a free
(09:54):
access to the European Union and Morocco as a free
trade agreement, you know the States, And so I think
that the geopolitics of this is that both side benefit
from this localization because the Chinese government is starting to
impose export license and graphite and European Union and the
(10:16):
North American countries Canada and the United States are putting tariffs.
But at the end of the day, the know how
and the scale and the off take agreements with the
incummons means that they're very happy to come and set
up shop and create jobs in Europe and the United States.
And so you're going to see a relocalization much the
(10:39):
same way that the German established John Venture not thirty
years ago. In China, the opposite is happening right now.
And Katie drew me the analogy. Many times they lunder
the good way and they're applying the lessons.
Speaker 2 (10:56):
Tell us more about that, Katie. What are you seeing
in Europe these days? You know, just red headlines at Northfold,
which was a shining star, you know, a rising star
for battery manufacturing, and out of Sweden is having a
rough time, is it. Do you see more and more
Chinese companies investing in batteries and battery supply chains in Europe?
Speaker 4 (11:16):
Yes, I think let's start with I believe the world
changed dramatically in pretty much all aspects. And one of
the aspects is and you know, I'm working with startups
but also with OEMs and also with battery makers, and
there's I think two major problems. One is, no one
can make money. The carmakers count on evs, the battery
(11:40):
makers count on batteries. The second option, the second the
big problem is no one knows what's going to happen
in the world, like politically, because everything changes all the time.
I think then the units just introduced one hundred percent
text on graphite or impoart and so and but you
don't know how the election is going to end up
(12:02):
in the US, and possibly both sides will find additional
means to protect the American American market. In Europe, we're
just about to launch the Texas on the Chinese cast.
So for a car maker, you don't know where to produce.
Actually the answer must be you have to produce in
all regions locally, but that is very unefficient, like you
(12:23):
know how the economics work, and also people are not
prepared for it, like for example, Postyle builds their cars
in mainly in China now and now we're just opened
our manufacturing in North America, but not for all cars.
So now we have to constantly to rethink the footprint.
And the same is to with the cell makers, and
(12:45):
the cell factories are basically not full, not in North
America and not in Europe. There's massive investments from Korean
and Chinese sell makers, but the factories are not for
Then on top of that, it is also very difficult
to build seals. I think Norfolk is currently learning it
(13:07):
the hard way. They try to like build like a
number of big giga battery factories in parallel, and they're
not getting the first.
Speaker 5 (13:16):
One to run, and so the whole world is in
a big turmoil.
Speaker 4 (13:22):
It's super difficult what to do, and it requires so
much money, and there is so massive investments and over
capacity from the Chinese side, and actually, if you look
at any business case, you would basically say it doesn't
make no sense.
Speaker 2 (13:36):
It doesn't let them have the entire world because they
have so much capacity. They could they could export to
Mars if necessary.
Speaker 4 (13:45):
They have well I wouldn't say that because what is
happening And you see it in the US that the
customs walls are built, So you have to find the strategy.
But I think it's Vincent feels a little lonely.
Speaker 5 (13:58):
On a surfboard in the ocean.
Speaker 4 (14:00):
How the wave is coming and you never know what's
what the next big thing is and you jump on one,
and then you see that's not going.
Speaker 5 (14:06):
To get me anywhere. I need a big, a different one.
Speaker 4 (14:09):
I think every OEM, every battery maker is in the
exact same situation right.
Speaker 2 (14:15):
Now, everybody's in the situation so hard.
Speaker 4 (14:18):
To understand, to define your strategy because your environment is
changing every day.
Speaker 2 (14:24):
Let me just summarize. One, you said hard to make
money right, Two hard to do the business of cell manufacturing.
Three the geopolitics are up in the air everywhere all
of the same time. How do you make a business
plan that makes sense exactly? Okay, what what do you
say to that? Vincent? You're on your surfboard. I know
(14:47):
you're doing. You're channeling Tahiti from the Olympics. We're still
having the afterglow of the Olympics. The surfboard is out there,
We're in the Pacific. Here comes a giant wave. Which
wave do you jump on? Do you jump on a? Well,
eventually it's going to be globalization, so just be patient.
Or do we think that we're moving into a new
era of nationalism where the West says we need our
(15:11):
own supply chains, we're going to pat on that and
China has a separate set parallel.
Speaker 3 (15:16):
Yeah, So let me kind of step back and and
understand what are the three ingredients of making a good
business work? Are you becoming profitable right? Yes?
Speaker 2 (15:28):
I want to know that that's a good question. Let
me write that down.
Speaker 3 (15:34):
I think that I think that this applies to many sectors,
but certainly applies to the EV supply China. The first
and most important ingredient is to recognize them when there
is a huge amount of shift in an industrial sector,
you know, like the advance of you know, cell phone
(15:57):
or in this case, the EV batteries. Typically those shifts
take on the dimension that is orders of magnitude greater
than what existed before, and the needy, greedy of actually
doing the manufacturing of these things, and the ability to
(16:21):
do it at scale and low cost. Because really what
drove the IVY transition is the fact that the terp
particular hours of little Malion batteries went down by tour
of magnitude. Right, That's what really was the fuel. There
is a very small amount of people with the right nohow.
(16:42):
So the mistake that people they thought is that you
can raise a ton of capital when interest rates are low,
and that you're going to be able to dominate by
just having plenty of cash. And that equation I've seen
play out in Silicon Valley over the last the years,
and it's always incorrect, and it's always incorrect for two reasons.
(17:06):
You give too much cash to a startup and you
end up wasting it. Number one and number two, there
will be a point where the interest rate go up
and the course of capical goes up, and then the
economics of your business are completely schooling. And so the
example of a good company like Norvault that you know,
had a great mission to create a greener battery and
(17:29):
manufacturing plans in Sweden and Canada and son even with
thirteen billion dollars of capital, and even after recruiting you know,
six hundred people from Korea, still has the problem that
delivering at scale good code and electrodes with very high
yield and very high safety and very high quality is
(17:52):
much harder than people think. And my Cto Yim and
Jew he had one d has been in the industry
for more than fifteen years. And I'm completely amazed that
everywhere we go together, you know, they talk about people
they know in common, because there is probably five thousand
people around the world that we're doing that, you know,
ten fifteen years ago. So the scarcity of talent is
(18:14):
actually one of the big big problems, Okay, And you
can reverse that and look at the automotive industry, the
ability in Germany to design very high performance I see
turbo engine liied with people in stut Guard and Eunique
and Frankfurt. And what happened is that when you want
(18:37):
to penetrate the Chinese market, then you create John Venture
where you assemble cards in China. But the core of
the technology is still and the IP do know how
is still in Germany. And that enabled the German to
gain a big footprint and VW and be waving a
(18:58):
big footprint in China. All the same thing is happening
now and so I think that the first lesson to
learn is that if people in China or in Korea
have had you know, ten fifteen years of scaling up stuff,
you need to embrace the know how. And so you're
going to see more and more John Ventures in North
(19:19):
America and Europe where people say, you know, I'm not
going to try to do it alone, I need help.
And so I think that the ability to rely on
the know how of people that have been doing it
is a necessarily equate part of the equation, as opposed
to say I'm just going to go head on and
displace them because I'm smarter it's not possible, Okay. I
(19:42):
think that the second piece is it's obvious that the
large Chinese automakers and the last Chinese ev cell makers
and the last Chinese material producers have to be a
global company. They publicly traded. They need to have a
global footprint for a number of reasons, including financial reasons,
(20:03):
and so their propensity to go and establish a footprint
in Europe in the United States is simply driven by
good sound financial management of public shareholders in those Chinese companies,
and by getting closer to the customers, they can avoid
all of the tariffs and the geopolitics and the logistics
(20:24):
of shipping stuff, and they can charge better prices with
better margins, even though the cost of setting up a
factory may be higher. People locally will pay more if
you have a lower carbon footprint and you can source
locally than if you need to import. And so I
think that that's what's happening. And I think the third aspect,
(20:45):
which have been convinced for ten years, but I'm glad
it's starting to pan out, is this notion that if
you even the infrastructure that has very large capital equipment costs,
and at the same time that you're trying to scale,
you need a lot of innovation. Then the industry needs
to organize itself to share differentiation, to essentially enable the
(21:11):
supply chain to take innovation and do it at scale.
And that is relying on IP rights. And that has
happened in semiconductor, it has happened in cell phone, and
it's happening now in ev You have LGES CEO that says,
you know, we have a lot of patterns and we
(21:32):
know about five hundred and fringers and we want to
license it. Why Because if they've invested ten fifteen years
in R and D, they want to connect some royalties.
Because one of the ways to improve your financial ratios
is I'm going to make a profit margin on the
stuff I make, and I'm going to pay some kind
of rent via licensing on the R and D IP assets.
(21:58):
And that leads to various steps of collaboration, whether it's
cross licensing, whether it's licensing. I mean, you saw quantum
Scape change its agreement with VW, and VW now is
basically free to do what they want. They have a
license and they're free to combine some of the quantum
(22:20):
Scape IP with some IP from other sources, right, And
I think that that's the nature of the beast, and
I think that's the trend that we foreshow ten years ago.
And let me make one blanket statement. I've analyzed all
of the IP in silicon anode in the world for
the last twenty years. Okay, And if I take the
(22:41):
top four and producers that I just mentioned earlier, one
D has more granted IP with better priority day that
all of them combined.
Speaker 2 (22:51):
Beautiful.
Speaker 3 (22:52):
So and we're not trying to displace anybody, We're trying
to help. And so you know, by being open to say,
you know, we want to help you not only enhance
your product and differentiate, but to do that in Europe,
in the United States, where IP rights have to be
respected and where OEM will not touch your product with
(23:12):
ten foot pat if you don't have IP freedom to
operate has put one D in a pole position. And
at the same time, you know, other competitors that you
know are high flying have also of IP problems. They
have pattern lawsuit between them. The Pattern Office is starting
to refuse their patterns based on ours because of better
(23:33):
priority dates. And so it's becoming obvious now we have
not you know, we've been saying that for a while,
but now people are starting to understand it.
Speaker 2 (23:43):
Let me ask a question that's a little bit sensitive,
but probably a top of mind for a lot of
people listening, and that is IP. You've developed the IP
over ten years, you have best in class, your customers
are Chinese, three of the four top or Chinese. How
do you work out protecting that intellectual property or do
you say, well, we just got to keep innovating.
Speaker 3 (24:06):
Well, two things. One is I'm not going to address
the point about how you protect intellectual property in China.
That's a completely different goal game. Okay, But if you're
looking at Europe and the United States, if the customers
are the OEMs and they are you know, VW or
(24:27):
GM or whatever it is, and they're the one that
is going to incorporate the materials and batteries in their cars,
there is no doubt that IP freedom to operate on
their suppliers becomes very important. And I think that what
comes naturally is that we can do licensing with anybody
(24:47):
in the supply chain, especially agent companies that set up
shop in Europe and the United States, and those contracts
are not based on our ability of enforcing pattern rights
in China, which I'm I'm not going to talk about.
It's going to be based on a win win contract
that is beneficial to our licensee and beneficial to our
(25:11):
shareholders in Europe and the United States.
Speaker 5 (25:14):
Okay, very good.
Speaker 2 (25:15):
Now, all of this demand future demand for nodes and batteries,
of course, is dependent on demand for electric vehicles themselves.
And today in twenty twenty four, we have this massive
discrepancy in demand in China. Last month, for the first time,
EV's as a share of new car sales exceeded fifty percent,
the world's largest market. We've gone from like eight percent
(25:36):
to fifty percent in four years, just stunning rise. On
the other hand, here in the United States, we're kind
of meandering around eight nine percent, And in Europe, Katie,
I think it's a similar story. So I wanted to
ask you, you're on the ground there in Germany, what's
the feeling, the vibe when you talk to friends and
family about EV's today. Are we stalling or is it
(26:00):
just a temporary pause and it's going to take off again.
What's the feeling on the ground in Germany today.
Speaker 4 (26:06):
It's very difficult to answer. I think the frustration is
high because the market is not where it should be,
and it actually slowed down. I think it had a
lot to do with the German government's brilliant decision as
a surprise to suddenly stop the support.
Speaker 5 (26:23):
So for many consumers they were really left in a
bad situation with that.
Speaker 4 (26:29):
But in generally you hear the discussions about the European
Union has decided that in thirty five you cannot build
combustion engines anymore, and now there's a discussion of whether
they should be postponed, whether this is an goal impossible
to reach. But you hear different voices, right, you hear
a lot of all ways. Like I think just the
CEO of Folksbunk just said he doesn't think it's a
(26:51):
good idea to push it out because I think it
would detract the industry and the whole ecosystem from this target. Unfortunately,
for a stupid reason. I think in America we have
a little bit of that. Evs even became a political subject,
like it is a political statement not to drive an
ev you are not not to follow this this crazy
(27:14):
green and ideas. So I think I cannot predict where
this is going to end. I'm very sure that in
the end everything will be ev Yes, there's of course
things like hybrids and and and.
Speaker 5 (27:34):
And range extending in evs, but it's it's all.
Speaker 4 (27:39):
It's all like an in between, right, It's all not
not the real thing, because we can build evs now
which work, which you can use every day, which you
can drive long distances with which we can recycle, so
it makes sense.
Speaker 5 (27:54):
I think this whole discussion about artificial feuds and see.
Speaker 4 (27:57):
Your two neutral fool feuds is in interesting and hopefully
it will allow me to drive my old push bushes
in a few years.
Speaker 5 (28:05):
But it doesn't solve a mass problem.
Speaker 4 (28:07):
So the mask the mass problem of that we need
to drastically reduce the CO two in the sector, which
which actually the transport sector couldn't in the last years,
but possibly I think the only sector didn't achieve its
targets and it's still lacking behind because people want goods
are moved, so we have to move to electrification. It
(28:28):
will come, but I think it's it's really bad that
we still have a lot of OEMs and also suppliers
who think, oh, the old world.
Speaker 5 (28:37):
Was so nice, we knew how to make money.
Speaker 4 (28:39):
We still knew how to make money with our big
SUVs with combustion engines or hybrid SUVs.
Speaker 5 (28:46):
So maybe we can we can extend this world a
little bit.
Speaker 4 (28:49):
No, I think we need more passion to adapt the
new world and to become leaders in.
Speaker 5 (28:55):
That new world. And that, and I said that before,
is much harder when.
Speaker 4 (28:59):
Your GM, or when you're a Volkswagen and you're building
these fantastic combustion engine cars and you make money on them,
and you tell people you could also alternatively buy an
electric car from US, which is also great, and indeed
it is, but you know what you're.
Speaker 5 (29:14):
Not saying but thinking, But it doesn't make money for me.
Speaker 4 (29:17):
So that's why I think that the native electric brands
like Tesla, but also like like bolt Star and Sofo,
when the Chinese have a much easier position because.
Speaker 5 (29:31):
You go out you say, my destiny electrification. The right
thing to do is electrification. Don't buy a combustion engine car,
buy an TV because it's the better car.
Speaker 4 (29:40):
It's I don't know anyone who drives an EV wants
to go back to a combustion engine. I know many
people who have a combustion engine car and think, no,
EV's are not good for me.
Speaker 5 (29:50):
I can't charge them, you can't.
Speaker 2 (29:52):
Drive with them, no discussion, there's no TV, No, there's
no have you ever been in an EV?
Speaker 3 (29:58):
No?
Speaker 2 (29:58):
Have you ever visited a test?
Speaker 4 (30:00):
No?
Speaker 5 (30:01):
Want?
Speaker 2 (30:01):
No, no no.
Speaker 3 (30:05):
I would start with what you just say, you witness
a disparity, and you say, in China it's more than
fifty percent and in the United States, in Europe it's
less than fifteen percent, right, And then you kind of
have to ask yourself the fundamental question why why? And
there is at least two answer to that question. One
(30:25):
is that it's the affordability of evs. In China, evs
are far less expensive and much more affordable. In Europe
and the United States, there is virtually no EV for
less than thirty five dollars with a reasonable ranch. That's
the number one reason, okay, And why is that? If
(30:46):
you take the dollar par kilar what hours of an
EV battery the course of an EV battery in China
versus Europe and the United States as a delta of
about fifty dollars minimum.
Speaker 2 (30:59):
Fifty percent of the total cost.
Speaker 3 (31:03):
Well, Leah, and then I'm telling you if you have,
if you have a seventy kilo, what our battery and
why do I choose the seventy five kilo what our battery?
At four miles per kida? What ours is three hundred miles,
which is you know, plenty for most people. So if
you have a seventy kilo what our battery and you
(31:23):
have a difference of fifty dollars per kila what ours?
Okay times seventy boom, you have twenty eight hundred dollars,
which is the profit margin on the thirty five dousand
dollars car. Yes, right, So the entire profit margin of
producing profitably a twenty five thousand or less EV disappears
(31:49):
if you cannot produce the batteries at a cost competitive manner.
So reducing the cost of the batteries the number one
problem to make affordable TV because if you sell an
affordable TV at twenty five but you pay but no,
you paid well. But if you pay too much for
the battery, you don't make money as I know, yet
you're to lose money, okay, And so the second reason
(32:12):
is the recharging. Right. If you are like Katie and I,
we don't drive long distance. My commute is twelve to
fifteen minutes, and I have a big garage and I
can recharge at home during the night, so recharging is
not an issue. The majority of people that have lower
income of longer commute and live in apartment buildings, and
(32:36):
if the charging network and the charging speed is too slow,
it's a real pain in the bat And so you
have to do something about both the charging speed and
the charging network availability in order to penetrate a large
percentage of the US market. Now, I'm not talking about
the Bay Area where I live, because there is a
supercharger on every corner, not quite, there is plenty, but
(33:00):
in big chunk of Europe and big chunk of the
United States, it's not true. I spent some vacation a
year ago in Italy and I had to drive, you know,
twenty five minutes to get to the nearest supercharger, and
there was a test Lage supercharger, right, And that's not
really convenient. In vacation, it's okay, But if I was commuting,
would be okay. And I think that the way we
view this as an opportunity is that with the only
(33:22):
city con solution that is cheaper than graphied, we use
the cost of the battery, we make the battery smaller,
think and fitty smaller car. We triple the charging speed,
and we increase the ranch and when you do all
of those things, you begin to the equation to addressing
the problem.
Speaker 2 (33:41):
Can we go back to that gap you talked about
the fifty dollars gap between a battery manufactured in China
versus anywhere else in the world. What in your view
are the key elements contributing to that gap.
Speaker 3 (33:54):
Well, first of all, if you're talking about sending up
a factory, whether it's uh, you know, I know, material
material or eb Sell factory between China and the United States,
there is a ratio of four to one in terms
of capex. That's a big problem.
Speaker 2 (34:10):
Why Why for the one, Well, it's the course of.
Speaker 3 (34:13):
The land, a lot of the fee for the engineering firms,
and the construction costs and the cost of equipment, and
so the the the delta is incredible, right, and so
at the end of the day, you have to have
capex depreciation as part of your corastructure. But if you
capex is that much more, then you have a problem.
Speaker 2 (34:36):
I think that it's a big problem, right, I mean.
Speaker 3 (34:39):
Yeah, I think there is another problem is that in China,
a lot of the state owned banks can make loans
to enterprises even if there is no off take agreement
and UH and there is a couple of things happening.
Then if you have access to a lot of free
capital to expand before you have secure the customers, people
(35:02):
are racing to scale to attract customer. There is a
peculiarity in many provinces. You don't have to depreciate your
capex while you're not yet producing at scale, so it
doesn't show up on your P and L. And then
many many banks that are stayed on banks in the
provinces and their bad loans can send the bad loans
back to Beijing and they disappear. This kind of financial
(35:25):
system has a propensity to create bubbles, right and we
saw that in real estate there is a trillion dollars
of real estate that is empty enough to house an
apartment built in China fifty million people. In the West,
you have the opposite problem. The banks are going to
reinsist on aron clad off take agreement before they provide
(35:46):
the debt, and so I think that that contributes to it.
And then of course there is the cost of energy
in various places. The cost of energy is just too
high now in Sweden, cost of energy is very low,
but in Germany cost of energy is very high. So
you have external factors that makes the economics very different.
Speaker 2 (36:05):
Okay, So Katie you're advising, say, for example, let's imagine
the CEO from Northwold calls tomorrow and says, man, I'm
facing this incredible headwind because the Chinese have me on
every cost runt at four to one on cappex. That's
just the beginning, and I gotta find the talent and
all the rest. What would your advice be? And you
(36:26):
can't say surrender?
Speaker 4 (36:28):
Oh no, And I think they really shouldn't because they
are important because there's not so many capable team of
people with capital behind them in Europe which would be
able to build a battery factory. And I think they
just took a little bit too much on their plate
(36:48):
in parallel specifically, like if you if you see, the
factory is the largest one in Europe they are building,
and I think they they should like, yeah, really focus
on fixing that place first and then possibly get advice
or partnership whatever to fix it so that they can
(37:10):
produce mass produce cells out of this factory. And because
the political ta wind, they have and for good reason
because in the end, yes, the Chinese and the Greens
are building factories. Korea is easier because there we have
a more open relationship. But with China, well we force
(37:31):
them partly into joint ventures. But that's exactly like what
Vincent mentioned before. That's exactly what they did to us
with the car industry, but they keep the IP. So
I think for Europe it is important that companies like
Norfolk succeed. For Norfold, it is important important, I think,
to do a little bit more Chinese steps, and also
(37:53):
it is important for them. And here we come back
to Vincent. They need IP, they need something to differentiate themselves.
And there I think again one d comes into the
game or companies like us there we all should be
a little bit more open. I still see too much
in the outer industry of yeah, we can do it ourselves.
(38:16):
We have always done it this way. And what Vincent,
I think you didn't talk about today is that we
have built a whole pilot factory in Washington State. That
for because they just don't believe if they get the theory,
they don't believe if they get the prototype selves, they
(38:36):
need to see and touch a full manufacturing line before
they trust us that we can we can deliver.
Speaker 5 (38:43):
And so.
Speaker 4 (38:45):
I think we all have to get faster and we
all have to work more together. The European out industry
has to work together to come up with affordable electric cars.
And you know, we had this discussion bible between Reno
and Volkswagen.
Speaker 5 (38:58):
I would have thought there would.
Speaker 4 (38:59):
Be a fantast stick thing to create scale and to
take I think is possibly more competent to cut costs
down of all efficient costs. But then it again fell
into the old patterns of behavior, unions being concerned and
management becoming concerned. So I think I would not surrender.
(39:19):
I would fight. I think we have to. This is
the most important industry we have in this in this region,
and we can't if if but we have to reinvent
how we work and to reinvent also possibly some of
our business models.
Speaker 2 (39:33):
All right, guys, with the time remaining and the time
is just flown by, I have a very We have
a tiny little election coming up here in the United States.
Tiny not that signal, well kind of important. Who's going
to win? And then will policies around evs change dramatically
On the other side, whoever wins. Who wants to take
(39:54):
that one? On first?
Speaker 3 (39:55):
Well, on the first question, I have no idea, no idea.
I don't think anybody knows. I think that fundamentally the
policies will not drastically change because it's all about economics
and jobs. And I think whomever is in the White
House will have to take care of economics and jobs.
(40:17):
And I think that on the edge, the government alone
cannot do squat. You know, it is not the best
capital allocator, but the government can help private enterprise and
can help you know regulations and can help you know
the ability to ensure green supply chain. An example of
(40:41):
EU regulation is this battery passport that creates transparency at
the consumer level on the sourcing of components. Well, that's
an example of a very interesting sound requirement that is
relatively requirement that helps the consumers but really provides an
(41:01):
incentive for everybody along the supply chain around the world
to take care of understanding the sourcing and the carbon
footprint and so adding that, you know, aside from the
extremely no the United States political system as your tendency
to exaggerate division for various reasons. Adding, at the end
(41:22):
of the day, the world is pragmatic and compromise will
be found and the Anders will move forward because there's
just too many jobs at stake.
Speaker 2 (41:32):
Europe doesn't have an election kt but recently put announced
new terrorists on Chinese imports. Yeah, so what's your view there.
Do you think Europe will hold the line and limit
the imports from China in order to encourage investment into
Europe or how do you see that playing out in
the coming months and years.
Speaker 4 (41:53):
Well, I think they are pitching a problem right. It's
possibly the right thing to do at this moment in
time to fix that immediate problem. But what we really
like in Germany, and I also think in the US,
is a good strategy. What do we want to be
in five years and ten years and fifteen years. You know,
Michael very well that the Chinese have that. If the
(42:15):
strategy needs adaptation, they adopted. But they go there and
they told us that twenty years ago we will be
the world leaders.
Speaker 5 (42:22):
In electric cars.
Speaker 4 (42:24):
That's right, And if you want to achieve that, you
have to have a strong home market. So if Europe
would have said that twenty years ago, they should have
had a policy to like transform our own market into
an eb market. They didn't do that, and they didn't
do it because us, the OEMs, pushed against it. We
said no, no, no, let us alone. We know what's right.
(42:46):
Don't give us a solution. And so I think we
must be upset about our governments, and possibly we should
vote for a different government which goes for giving us
a perspective again making a plan together with the industry.
Speaker 5 (43:02):
But make a plan and then work on it and
stay with it for a while.
Speaker 4 (43:06):
That's what the Chinese do and that is a success
they're generating.
Speaker 5 (43:09):
And now what we can do.
Speaker 4 (43:10):
We can petch it, we can introduce customs, we can
give an incentive here or there, and then we stop
it again.
Speaker 5 (43:17):
I don't see a good strategy.
Speaker 4 (43:19):
Possibly the europe postponed thirty five, make it forty, but
that would make problems worse, I believe. So I'm pretty
frustrated about that because I don't see it coming. And
I also don't see again that the OEMs get it
or the t one s get it, and so that
I think we will all struggle.
Speaker 2 (43:38):
It seems like I absolutely agree. It seems as if
there isn't there's an absence of a direction. Where are
we going? What do we want to accomplish. And even
in the you know, especially in the political debates going
into the election here in the United States, I see
them being masters of criticism of the other side, but
no one presenting really a clearity where we want to
(44:00):
go as a nation.
Speaker 3 (44:02):
You know, there is one topic we didn't talk about,
and that's education and education let me kind of put
it abroad, since right, both in Europe in the United States,
there is fantastic graduate schools that graduate people with a PhD.
That they've extremely advanced knowledge in physics and chemistry and sound.
(44:23):
But one of the things that got lost over the
last forty or fifty years both in Europe in the
United States is really the manufacturing no hard and there
is less people that they've actually the technical expertise that
is required to run a good factory. There were more
in the past, and that has decreased. And my daughter
(44:46):
works for Apple, my youngest daughter, and she put you know, recently,
one of the most innovative products that was designed in
Cupertino in manufacturing, and she was sent for a month
in China to essentially the production line that kind of
experience to be on them for manufacturing flaw side by
(45:07):
side with young Chinese people. It's an enormous amount of
nohow and I think the more you do that, the
more you will give hope to the younger generation. But again,
the government can give a policy that encourages that, because
at the end of the day, if you cut yourself
off of the education side, you will not in the talent.
(45:29):
And you know in Germany it is in Munster. You
know a fantastic group of universities that has worked on
batteries for twenty thirty years. There is a professor Martin
Winter who is world fame, is very pragmatic guy, and
he had his budget cut down and it really blew
my mind to a person of that knowledge being given
(45:51):
less money when he's training the next generation.
Speaker 2 (45:54):
Okay, would you guys run for office and next time
I'm too old, You've got another fifty sixty years. What
are you talking about?
Speaker 3 (46:06):
Yeah, huh.
Speaker 2 (46:08):
This is tremendous conversation. Very timely. Things are up in
the air. I think last time we talked, things look
much more optimistic about EV's There was momentum, there were
there was just an excitement, and now there seems to
be a kind of a pause at least in the West.
About where where to from here? So thank you both,
(46:29):
gentlemen for your time today. And last question before we
go briefly, everyone's always curious about I am like, what
car do you drive? What are you driving today?
Speaker 3 (46:40):
Yeah? Tesla?
Speaker 2 (46:41):
Why? Tesla? Why the best selling? Is it still the
best selling vehicle in the world?
Speaker 3 (46:45):
Yep?
Speaker 2 (46:46):
Whoa KT points stuff three?
Speaker 5 (46:50):
Oh?
Speaker 2 (46:50):
You have the three?
Speaker 5 (46:51):
Yes?
Speaker 2 (46:52):
How do you like it?
Speaker 5 (46:53):
I love it?
Speaker 4 (46:53):
I think it's amazing because the points doff tool was
a good car, but it was also it wasn't yet
able to reflect what the Posta.
Speaker 5 (47:02):
Brand should be. Okay, luxury and premium brand.
Speaker 4 (47:05):
And now Posta three can can display that very impressive phenomenal.
Speaker 2 (47:10):
Please take some video of you in the car. I
like to see it.
Speaker 3 (47:16):
And you know what my license plate is, Michael, No,
I don't. One day in California you can have a
personalized license plate. My license it's called Sina Node.
Speaker 2 (47:26):
Sina Node. Okay, I'll look, I'll look for you. What color?
What color model?
Speaker 3 (47:30):
Hy blue?
Speaker 2 (47:32):
Blue, interior white? White? Nice?
Speaker 5 (47:36):
Nice?
Speaker 2 (47:37):
Kat? What color you got?
Speaker 5 (47:38):
I got a white one also with also like white
level right?
Speaker 2 (47:42):
Not white?
Speaker 5 (47:42):
Nice? Michael?
Speaker 2 (47:44):
The bottle ass it's like a metallic gray with a
white interior. Yeah. And last question, I keep giving you,
guys last questions. What I'm curious on the postar three?
What's the range? Non, you're why what's the range?
Speaker 3 (47:59):
Pots?
Speaker 5 (47:59):
That Actually very honest with you.
Speaker 4 (48:01):
I haven't really tried it yet on a long distance
because I just got it like two weeks ago. I
will do a long distance and I can tell you
what it displays. Me is four hundred and thirty kilometers.
What does that in mya?
Speaker 5 (48:15):
It's like.
Speaker 2 (48:17):
Yeah, yeah, okay, good?
Speaker 3 (48:20):
And mine is three twenty five miles.
Speaker 2 (48:23):
Three twenty five okay, so you don't need three twenty
five because your commutes are short. You can give me
that car and get another one. That's just that's right.
Speaker 3 (48:31):
Yeah, but my daughter keeps borrowing it to.
Speaker 2 (48:36):
All right, gentlemen, thank you so much for joining me today.
Always a pleasure. I can't wait for the next time
to see you guys.
Speaker 5 (48:42):
Thank you in person.
Speaker 2 (48:44):
All right, what did we learn? We learned lots today
from Vincent and KT. Here are three major takeaways from
my perspective. One is an obvious one. The People's Republic
of China continues to cement its position as the undisputed
(49:08):
leader in electrics. In batteries and battery supply chains, China
has a seven to ten year lead. The West finds
itself in an unfamiliar position of having to play catch up.
And catch up in batteries and electrics is hard for
us in the West for three reasons. One, where's the
money If you don't have the scale and you don't
have the low costs, really tough to make money on electrics,
(49:32):
So your volkswagens and gms. As Kat told us, why
not keep making those gasoline powered SUVs and trucks cash
profits hand over fist electrics. It's hard to get excited
about it if you're counting the cash. Two, the geopolitical
tensions keep rising, shifting what to do, where to put
(49:54):
our plans? How much should we invest? How risky is it?
Will new tariff walls go up? Don't know?
Speaker 4 (50:00):
Oh?
Speaker 2 (50:00):
And three, let's not forget that the business of making
battery cells is no piece of cake. And the reality
is that here in the West we simply don't have
enough people who know how to do it. Okay, don't
get too depressed, No, not to worry. We're still in
the early days of evs, there is time for a rally,
(50:23):
and companies like one D with Vincent riding its surfboard
in the middle of the ocean, are still confident about
catching that big wave. Love to see that confidence Vincent.
All right, that is your takeaways. I am Michael Dunn.
Thank you so much for listening to this episode of
the Driving With Done podcast.
Speaker 1 (50:43):
Where you meet the experts creating the technologies that will
power tomorrow's cars electric autonomous software. To find this is
a Driving with Done podcast.
Speaker 4 (50:55):
Thank you for.
Speaker 1 (50:55):
Joining this episode of the Driving with Done podcast. To
connect with the Michael, visit Doninsights dot com or find
Michael on x or LinkedIn. This is the Driving Done Podcast.
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