When it comes to EVs, people seem to embrace one of two schools of thought. In school one, electric vehicles may have a role to play but that role is limited. Manufacturers should not be required to build them. And citizens should not be required to pay taxes to subsidize purchase of EVs. In school two, the belief is that electric vehicles are, without a doubt, the future. By 2040 the vast majority of all new vehicles will be propelled by motors driven with energy from batteries. Which school has it right? Enter our special guest today, Mike Colias, author of a tremendous new book called InEVitable: Inside the Messy Unstoppable Transition to Electrics. Mr. Colias has covered the automotive business for the Wall Street Journal for more than ten years. In this episode he gives us a view on what makes building EVs and batteries so hard for the Detroit Three. Who among the Detroit Three is doing the best job? Who is falling behind? And how might America's commitment to EVs change under the Trump Administration?
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Episode Transcript
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Speaker 1 (00:02):
As a longtime foreign correspondent, I've worked in lots of places,
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On Face Off, the US versus China will explore what's
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(00:23):
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Speaker 2 (00:33):
Where top executives and creasy entrepreneurs gather to talk about
the future of electric vehicles. This is Driving with Done podcast.
Speaker 3 (00:45):
Hello and welcome to the Driving with Done podcast. I
am your host, Michael Dunn. So when it comes to evs,
people seem to embrace one of two schools of thought.
In School one, electric vehicles may have a role to
play in our society, but that role is limited. Manufacturers
should not be required to build them, and citizens should
(01:07):
definitely not be required to pay taxes to subsidize the
purchase of evs. In Camp two, on the other hand,
the belief is that electric vehicles are, without a doubt
the future. By twenty forty, the vast majority of all
new vehicles will be propelled by what by motors driven
with energy from these amazing things called batteries. So which
(01:32):
school has it right? Enter our special guest today, Mike Calias,
author of a tremendous new book called Inevitable, inside the messy,
unstoppable Transition to Electrics. Mister Calias has covered the automotive
business for the Wall Street Journal in Detroit for more
than ten years. In this episode, he gives us a
(01:53):
take on what makes building evs and batteries so hard
for the Detroit Three, Who among them is doing the
best job, who's falling behind, and how might America's commitment
to EV's change under the Trump administration. It's Mike Colias,
author Inevitable, right here on the Driving with Done podcast.
(02:23):
Mike Calias, thank you so much for taking time to
join me today on the Driving with Done podcast.
Speaker 4 (02:29):
Michael, it's a pleasure.
Speaker 3 (02:30):
We're here to talk about your new book, a tremendous
book that is called Inevitable, with a capital EV in
the middle. There the future of EV's and your book
begins with a really tense scene that draws the reader
in immediately. Jim Farley is there, Maybe it's somewhere in dearborn,
what's going on?
Speaker 5 (02:50):
Yeah, so this was a few years ago now, I
think that was early twenty twenty two.
Speaker 4 (02:55):
And Jim Farley, who's been very.
Speaker 5 (02:58):
Sort of vocal on this, you know, this challenge that
the legacy carmakers have to try to catch up to,
you know, the EV startups in the Chinese and how
a depth they've been this juggernaut on electric cars, right
and so but this was pretty early on. This is
still when Tesla was like the big foe, right, the
(03:19):
one that everyone was trying to catch. And so Harley,
you know the way he tells it, Uh, he had
asked his engineering staff, you know what's the like, what
we're losing money on these on these evs. Tesla's you know,
hugely profitable at this point, Like what do we you know,
what are we missing out on? Like I'm his assumption
was that the way that Ford was designing its its
(03:39):
electric cars, it was just inefficient compared to Tesla.
Speaker 4 (03:43):
Tesla had some secret sauce.
Speaker 5 (03:44):
And so he was told by his staff that no,
you know this is we're pretty competitive, you know, we
think we're apples apples, And so Farley orders this, this
tear down, this dissection of a Model Lie next to
Ford's Mustang Mokey, you know, and the Monkey was had
become a hit at the.
Speaker 4 (04:03):
Time it was. It was a success per board in
the in the early ev days.
Speaker 3 (04:07):
And good looking car really attract stands out on the
road where they both priced comparably. So we're looking at
kind of apples to apples in terms of pricing.
Speaker 5 (04:15):
Yeah, very much, so very much in that sort of
sort of mid size suv sporty suv segment, right, and
these you know, you know, these these dissections teardowns aren't unusual,
but I think what wasn't usual is number one, that
the CEO of the company ordering it up and having
this sort of on display for all of the you know,
(04:37):
the top folks to see. And then secondly, a guy
by the name of Doug Field was the sort of
godfather of the Model three at Tesla back in the day,
really kind of figured out how to how to bring
that first mass market car to the market for Tesla
had by that time joined for just a few months earlier,
(04:58):
and he was the one who was sort of of
going through and running this teardown, and you know, good
guy to do it, right, He basically designed. I had
a big hand in overseeing the design of that model,
Model Why the Model three, which you know, the model
is essentially the same mechanical guts. So anyway, you know,
they they picked this thing apart, and you know, on
(05:20):
one side of the room is the guts of the
Model Why, and then the other is the guts of
the Machi. And it was just apparent right away there
was way more strewn across the floor for the Ford, right,
tons of bolts and rivets and wiring harnesses that didn't
need to be there. And you know, Farley's looking down
at this thinking like this is this is like a
(05:42):
pool of red ink, right, like this is this is
where all the losses are coming from. It's just not
an efficient design relative.
Speaker 3 (05:48):
Ball of metal, yarn and red.
Speaker 4 (05:51):
Ink, exactly. Yes.
Speaker 5 (05:53):
And so that was I think, you know, I think
it was pretty demoralizing for a lot of the engineers
in the room because they had been lauded as this
hit and it was it was, it was hot, it
was selling. There was a waiting list at the time
probably for it, and so I just think Barley was
really trying, you know, he was. He was so sort
of jarred by this he he brought the board through,
(06:16):
you know, like a week later, through the same warehouse
to sort of see it for themselves, you know, And
this is kind of his his mo. He really wants
to shake up the organization, like, we can't just keep
doing things the way we've been doing. We've got to
take a different approach because this is what we're up against.
Speaker 3 (06:33):
You talk in your book about. So let's stay on
the topic of costs and pricing, which is so central
to EV adoption. You know, the average cost of EV
in the United States today is plus or minus fifty
thousand dollars, which is pretty premium pricing. So why is
it so hard for the Detroit to duplicate what Tesla
or others have done in terms of bringing that cost
(06:56):
down and making the prices more affordable.
Speaker 5 (06:58):
Yeah, I think it starts with you know, but I
think many of the legacy automakers, the Detroit companies included,
really started with more of an internal combustion mindset, right,
I mean they you know, they've tried to shootinghorn in
an electric propulsion system into what essentially was designed as
a gas engine platform, and uh, you know, you end
(07:19):
up with a lot of inefficiencies when you do that.
I mean, GM would argue that that they kind of
had a.
Speaker 4 (07:24):
You know, a clean sheet approach to their first generation
of evs. But they're still losing billions, billions of dollars
on their EV operations and so, you know, and they've
had to sort of go go back to the drawing
board a little bit on their approach as well. So
I think it's just you know, another factor is that
Tesla was, you know, as Elon Musk has put it
(07:46):
so close to bankruptcy as they were designing some of
these cars, like you they were, they just had this
miser's mentality like if you know, if we can save
a penny on this decision for to put this part
in or not, we're going to do it. That was
a bit of it.
Speaker 5 (08:02):
A huge factor and you know a lot about this, Michael,
is that the Chinese now have brought to bear many
advantages when it comes to cost. And you know, this
is kind of maybe jumping ahead for our discussion because
this is kind of the eight hundred pound gorilla now,
but I mean from from a cheaper supply base to
raw materials, to government support, just the fact that that
(08:27):
Asia really is the sort of nerve center when it
comes to things like electric motors obviously, batteries, processing of
minerals that go in the batteries. I mean, there's so
many advantages now that China and even other Asian players
have that It's really been hard for the car companies that,
you know, the Detroit in Germany to figure this out
(08:50):
and catch up.
Speaker 3 (08:50):
To figure it out and catch up. It's almost like
the Detroit teams are being asked to play cricket. Okay, yeah,
there's similarity here, there's a ball in a bat, but
my goodness, so much, so many differences and so hard
to make that adjustment. Right, it's different language for these guys.
Speaker 4 (09:09):
No, I think that's right.
Speaker 5 (09:10):
I mean, you know, there's a reason why we really
didn't see a startup auto company for a century more
or less. It's because there was huge barriers to entry, right,
I mean, and it was it was the complexity of
the internal combustion engine and how capital intensive it was,
and the hundreds of parts and thousands of suppliers, and
(09:30):
it just you couldn't you couldn't just waltz into the
industry and start making internal combustion engines and transmissions I
mean hugely complex mechanical systems, right, while the ev you know,
battery chemistry is tricky and finicky and you gotta get
it right, and battery cells are expensive. I mean, you
can essentially take the materials you need for an electric
(09:52):
car and a motor and some battery cells and almost
off the shelf, right and put it into you know,
an existing car platform. It doesn't mean that it's easy
to build cars. That's always hard, but the systems themselves
kind of it lowered the barrier to entry. Mean, that's
how Tesla started, right strapping together all the laptop cell
So you know, at a certain point, the expertise of
(10:16):
a Toyota or a general motors has developed over the
years on you know pistons and you know engine blocks
and transmission like all that stuff is going to matter
for a still a long time, but increasingly less so,
and it's going to become more of a game of
battery cell chemistry. You know, inverters, you know, more efficient
(10:38):
ways of moving these electro electrons around the car. I mean,
that's that's kind of become the game. And then you know,
beyond that, there's also the tech part of it, right,
I mean, I think that's the way Elon Musk looks
at the world now is you're going to have to
have an EV, a super cost efficient EV. That's like
table stakes now, and the race is from here on out.
The race is the technology you infuse into those vehicles.
(11:02):
And so the traditional automakers are still trying to figure
out the first part, right, like how do we get
a boss out?
Speaker 3 (11:07):
Yes, the traditional automakers still wrestling with that first part.
You've been covering the Detroit automakers in Detroit for gosh,
about fifteen years now, since twenty ten, I believe for
the Wall Street Journal. If we look at the Detroit three,
everybody likes rankings. Who do you think is ahead today?
Which company is the caboose, who's doing the best job today?
Speaker 5 (11:30):
Gosh, Well, I think I'm going to give you a
lesson satisfying answer, because they'll have some strengths and serious weaknesses.
I don't want to I don't want to squir them
out of the question, but I will tell you I'll
just kind of break each one of them down. I
think I think General Motors was the first of the
three to really jump in a big way and say
the future is all electric and we're you know, we're
(11:52):
making a brand new platform, and we're going to build
a bunch of battery factories and we're all in.
Speaker 3 (11:57):
Right.
Speaker 5 (11:59):
They have very much stumbled out of the gate in
terms of how that all was executed. They've had, you know,
for you know, early in this decade, there was a
lot of enthusiasm. There was a lot of you know,
you could celeby ev you could make right. And having
been the first to jump in, among the first of
(12:19):
the big legacy automakers to jump into this game, they
they could have really killed it in those first few
years twenty twenty, twenty one, twenty two, and instead they
were really struggling with like getting the manufacturing right. They've
at first they didn't have enough before they had transitioned
to their own batteries, they weren't able to get batteries
from the supply chain, which is very unlike general motors,
(12:40):
you know, which can sort of browbeat their supply chain
into doing just about anything.
Speaker 4 (12:44):
Then once they.
Speaker 5 (12:44):
Did have their own batteries, they had a lot of
manufacturing struggles and it just it led to a very
slow start. They had the vehicles engineered and designed and
ready to go, they just couldn't execute.
Speaker 3 (12:58):
Which was the first vehicle GI wanted to bring to
market fully be I.
Speaker 5 (13:02):
Mean, the first fully be on this new platform which
they called Ultium, which they've since scrapped the name, which
would tell you that, you know, things hadn't gone really
as they had planned.
Speaker 4 (13:13):
But it was the Hummer, which was.
Speaker 5 (13:14):
Kind of another you know, very low volume obviously what
one hundred and ten hundred and fifteen thousand dollars, you know,
I think they were trying to make a statement with that,
with that vehicle, like, hey, you know, and and I
get in a way, I get the strategy, right. I mean,
for the previous two decades, the industry caught a lot
of flak for not having sexy, cool electric cars. You know,
(13:37):
you're not trying, You're just giving us a Nissan leave
for a Vault, Like sure, innovative cars, but like it's
not it's not what people want to drive.
Speaker 4 (13:44):
They're not big enough. And so they kind of overcorrected
a bit, and so the Hummer.
Speaker 5 (13:50):
You know, I don't think we'll ever know how how
much of a hit it could have been off the bat,
because they couldn't get them out the door. They couldn't
make them, but I do think it was a little
over the top in terms of pricing and the size
of the thing.
Speaker 4 (14:03):
I mean, it's like whatever, nine thousand pounds.
Speaker 3 (14:05):
And no weight. Yes, I think the battery itself might
weigh as much as a Honda Civic, like.
Speaker 4 (14:11):
Incredibly right, right, Yes, there's all those fun comparisons.
Speaker 5 (14:14):
So just to sum up general motors, I think jumped
in early have done a better job than any of
the three and industrializing the plan.
Speaker 3 (14:22):
Right.
Speaker 5 (14:22):
They've got the battery plants up and running a couple
of them at least, you know. I think that they
are more serious at a sort of ground up approach
or or faster than the other two, but the execution
so far hasn't been there. I mean, they are now
starting to crank these out. They've got a lot of models.
Chevy Equinox EV looks nice, the Blazer, They've got a
(14:43):
Silverado and a Sierra. I think they've got more EV's
than they probably wish they had at this point. But
I think they're very much in the game in terms
of the product and having industrialized the sort of base
to be able to do this at scale if and
when the time comes that they need to Ford I
think was very smart at kind of getting in on
a shoestring budget. You know, was later than GM to
(15:06):
declare all in on evs that that Mustang Mocke was
really you know, a quick kind of built on an
internal combustion platform. But let's get it out, let's make
it look cool. And they, you know, they've had a
lot of success with that. There's a lot of happy
make owners. The four Lightning was you know, a marketing marvel.
I think you could say, I mean, it got a
(15:27):
ton of play. They got it out quick, same deal,
but it was basically you know, gas power to f
one fifties from the same factory. They would just ship
them to the other part of the factory and stick
an electric propulsion system in it.
Speaker 4 (15:40):
But they had a lot of sales of that too.
And Jim Farley will.
Speaker 5 (15:43):
Tell you we've learned a lot about the you know,
the eed customer and about how to do this and
do this with you know, cost effectively and with quality
and all that. So, but they're now behind right, they
don't have an EV schedule for two more years. They've
got this you know this what they like to call
the skunk works out in California where they've got like
all their smartest engineers working to get costs out of
(16:06):
the next generation of evs.
Speaker 3 (16:08):
But including the former Tesla guys.
Speaker 5 (16:10):
Right, yes, yeah, there's a you know, there's Doug Field,
but then there's also an you know, the number two,
a guy named Alan Clark who's kind of spearheading that,
and they're you know, to hear for tell it, that's
a very sort of cost conscious effort to try to,
you know, how do we compete with the Chinese on cost?
(16:31):
And you know, they're saying that they've figured it out
and I think the first product is going to be
a mid sized truck, but you know it's it's a
couple of years out.
Speaker 4 (16:38):
So they're I think they're behind.
Speaker 5 (16:40):
GM in terms of you know, vertically integrating the batteries
and you know, being able to do this at scale
and cost effectively. Stilantis, you know, they're they seem mostly
focused on an extended range you know, I guess e
REV you'd call it, but essentially a hybrid approach that
will allow you know, a pickup truck to go six
(17:02):
hundred plus miles on a combination of electric and then
gas takes over. You know, I think the I think
their furthest behind on the EV part of it. But
maybe the strategy from a business standpoint.
Speaker 4 (17:13):
Was, you know, to be a not a fast follower,
might might make it work out for them.
Speaker 3 (17:18):
That's right. We we Stilantis mostly sell large trucks and
SUVs to North American consumers. They like their big rigs,
they like to go long distances, and they don't want
to worry about charging. So let's roll out this practical
solution called e reps or pagvs and not.
Speaker 5 (17:35):
Yeah, they's I think they're the number one plug in
hybrid producer in the country right now because they've got
them on the Wrangler and some Grand Cherokees.
Speaker 4 (17:43):
So you know, for now that probably works for them.
Speaker 5 (17:45):
It's probably minimizing the losses than if they were trying
to make tens of thousands of evs right now.
Speaker 3 (17:51):
Right so way up top the benchmarks Tesla. Still you've
got the Detroit three racing to catch up. In between,
you have an interesting company called Rivian. What's your take
on Rivian? Will it be the next Tesla? Can it
be the next Tesla?
Speaker 5 (18:05):
I mean, if you just look at all of the
advantages that Tesla had when it was coming into its
own and it's sort of formative years that Rivian does
not now.
Speaker 4 (18:15):
It's hard to see.
Speaker 5 (18:17):
It's hard to see Rivian sort of emerging as like
a juggernaut like that. I mean, years and years of
super low cost capital, years and years of no competition
at all. You know, it's it's Rivian has to compete
now with all these other models coming on online. Detroit
has you know, been defending its position in the pickup
(18:38):
truck market when it comes to electric So even though
they're still losing a lot of money on things like lightning,
they're there with products that Rivian has to compete with.
I mean, it's a it's a really cool story, right,
it's a it's a great story of an entrepreneur R J. Scaringe,
who you know, this has been fifteen plus years now
of him building this company.
Speaker 4 (18:59):
Still still the CEO has.
Speaker 5 (19:01):
Has carved out like a really cool, like specific brand identity,
you know, like this outdoorsy Patagonia of trucks kind of ethos,
and it's you know, it has a devout following.
Speaker 4 (19:17):
It's got a very distinctive product.
Speaker 5 (19:19):
They're struggling to make money and and get the manufacturing
piece of this right still, and they've they've.
Speaker 4 (19:27):
Turned a corner.
Speaker 5 (19:27):
They've come a long way in terms of you know,
figuring out how to make cars, but you know they're
going to have to get a cheaper product. It's going
to take capital. There's questions now around whether or not
they can get a federal loan because all that stuff
in DC obviously is starting to dry up and get
clawed backed by the Trump administration. So you know, they've
still got a long road ahead, but it's it's pretty
(19:48):
admirable I think.
Speaker 4 (19:49):
What they've what they've been able to accomplish so far.
Speaker 3 (19:51):
Yeah, they're persevering, hanging in there, battling, fighting, adjusting. They
don't have the advantages Tesla had, but they're still in
the game, important.
Speaker 5 (20:02):
Game, and we'll see if they stay, if they stay
independent or you know, there's Folkswagen agree to invest quite
a bit of money in them several months ago, and
you know there are some people who think that could
be a precursor to even a closer relationship from US
sort of capital structure standpoints. So we'll see if they
if they need and get more help or try to
(20:23):
go it alone.
Speaker 3 (20:25):
Being there in Detroit, with the new administration, the Trump administration,
what's your sense of how sentiment has changed with regards
to evs. We have the Detroit three, starting at say
twenty twenty, going gangbusters to do evs. Right, you've just
outlined for us the struggles they've encountered. What's the sentiment today.
Speaker 4 (20:46):
Yeah, And I think those struggles were on the manufacturing side.
Speaker 5 (20:49):
There's also a struggle on the demand side in the US, right,
And you know, i'd say starting in mid twenty twenty three, maybe,
so going on two years ago now is when we
started to get signs of, you know, g this might
not go as quickly as we thought. And I think,
you know, the past eighteen months have been a lot
of sort of you know, dawning of the.
Speaker 4 (21:10):
Realization that this isn't going to be this is you know, we're.
Speaker 5 (21:13):
Not going to see that the kind of demand and
the kind of numbers materialize that we thought.
Speaker 4 (21:17):
And so how do we calibrate this?
Speaker 5 (21:19):
And you know, do we slow walk this factory, do
we cancel this you know vehicle We've seen in a
lot of that nobody's walking away from electric cars. I
think they all know that it's if they're all on
record as saying it's the future. They have to uh,
you know, they have to figure this out. But certainly
they're trying to minimize the losses at this point. So
that that's been like the last eighteen months, and now
along comes a term of administration that's openly pretty hostile
(21:43):
to evs, and I think there's definitely the sense that,
you know, this is going to create further headwinds for
the EV story, at least in the US. And you know,
I think on the table are of several things that
that might happen. I think there's no question that he's
going to roll back EPA regulations. They just said that recently,
(22:04):
that that's on the table. I think what's you know,
the upshot of that is the car companies are going
to be able to sell more gas and diesel engines
than engine cars than they would have otherwise under the
Biden rules, which I think the industry feels like went
way too far the other way and you know, would
have required something like half of all sales to be
(22:24):
electric by the early twenty thirties. Really nobody thinks that's
going to happen now. So I think these rules need
probably needed to get pushed back anyway with you know,
in the eyes of the industry. Now how far it goes,
who knows, But I think that's probably welcome here in
the interim because the demand picture hasn't materialized like they expected.
(22:44):
But the other part, the big part, is ed policy
in terms of funding for electric cars and the seventy
five hundred dollars that many people qualify for to purchase
an EV you know, that's that's up to Congress, and
I think I think there'll be probably no shortage of
Republican lawmakers who are eager to dunk on evs and
and you know, vote to take that funding away. I mean,
(23:06):
I think that's the expectation at this point. I don't
know how quickly that will happen.
Speaker 3 (23:10):
That will help with an interesting twist, right, Mike, because
just this week we have President Trump and Elon Musk
on the lawn to the White House test driving the
bottle as and a cyber truck. So it'll be fascinating
to see if there's sort of this sea change among
the Republican side of the aisle.
Speaker 5 (23:27):
It's really been fascinating and some interesting dynamics here with
with the Musk factor in the administration, right. I mean,
you know, you'd think that the CEO of the biggest
EV maker in the world for now v I D
lurking right behind them, but you know, would would would
support federal funding for evs. Of course Elan is on
(23:48):
record as saying he does not, And of course Tesla
has been the beneficiary of billions of dollars in you know,
federal help over the years. So it's a bit like
slamming the door behind you, you know. I think Musk
knows that that taking that funding away is going to
hurt Tesla in the in the short to medium term,
but I think the bet is that it hurts his
(24:08):
rivals worse, right, I mean, they're still losing a lot
of money on their electric cars. Tesla is now solidly profitable,
and I think, you know, it also is reflective of
the way Musk now views Tesla, which is we're going
to win on AI and probotaxis and that's you know,
that's going to be the key to profitability for this company.
That's why you invet you know, he famously said a
(24:31):
few months back, like, don't invest in Tesla if you
think we're an electric car company, We're you know, it's
we're a much bigger story than that.
Speaker 3 (24:38):
Don't invest in Tesla if we think we're just an
electric car company.
Speaker 5 (24:43):
You're paraphrasing, but essentially that's what he's saying is is
this is an AI story now. And so you know,
if that's the lens through which he's he's looking at
the company, you can see why he may not be
all that concerned about whether or not some of his consumers,
his customers get seventy five hundred bucks on their their purchase.
Speaker 3 (25:01):
I'm going I'm curious. I want to ask you a
question that maybe a little bit tough, but what the hell,
let's go for it. You're an observer and insider there
in Detroit. You understand the companies where they're at, and
their cost structures and their profit and loss. You also, tomorrow,
your appointed cars are. President Trump says, Mike, we want
you in charge of setting policy for our nation with
(25:22):
regards to evs. What do you do? Do you go
full pedal to the metal. EV should get support across
the board industrial consumer incentives, rebates, tax breaks, or do
you go no, let's just take this step by step.
There's no big hurry.
Speaker 5 (25:42):
Well, I think you could look at it like there
is a big hurry because you know, this ev transition.
It's like we talk about the transition, it's really multiple
transitions unfolding at the same time. Right, And so China
is now I think the latest numbers I saw was
more than fifty percent electric and plug in hybrid. Europe
is in the twenty to twenty five percent range, and
(26:03):
we're sitting around ten percent. So if you believe that,
you know, the future is electric, whether or not it's
ever one hundred percent electric, I mean, I think that's many,
many decades away if we ever get there. You know,
I think internal combustions can be around for a long time.
But if you believe that it's going to be central
to the way people get around, and battery technology is
(26:24):
in the national interest to be you know, to sort
of control your own destiny with that and not be
reliant on China for you know, that massive part of
the transportation system, then I think you do need industrial
policy around it. And I think that's what was put
in place through the Inflation Reduction Act of President Biden, Right,
(26:45):
And so I think a case can be made that
it's it's a national defense slash economic competitiveness question as
to whether or not there is some funding to help
companies figure this out, because every day that is by,
the Chinese are pulling further and further ahead on electric
cars and battery technology.
Speaker 3 (27:06):
They really are, all right, So that's that's a big
giant question. I'm going to make an easier one for
you now. Your best friend calls you later today it says,
I'm in the market for an ev which one do
you recommend?
Speaker 4 (27:17):
Wow, well, I think there's I'll give you like a sampling.
Speaker 3 (27:23):
Right.
Speaker 4 (27:24):
Tesla is taking some brand flack right now.
Speaker 5 (27:27):
Right, Uh, you know, the controversy around Elon Musk right
now has a lot of people reconsidering their purchase of
a Tesla.
Speaker 4 (27:37):
There are there are a lot.
Speaker 5 (27:38):
Of Tesla's hitting the market, the used market, not just
from people who are upset with Musk's behavior and politics,
but also you know, Hurts bought tens of thousands of
Tesla's a year or two ago, and that they're still
continuing to flow the market. So if you're looking to
get into you know, what's probably you know, you could
(28:00):
argue the most fully evolved version of an electric car.
There's plenty of really good Teslas in the US market.
That might be one one thing people consider if they're
looking to get in the market. Beyond that, you know,
Honda and Kia, the ED six, I five, I mean,
there's some some really cool stuff. Those don't get great ranges.
(28:20):
I think it's in the two forty two sixty range.
You can do a lot better on range. There's more
affordable options now, like a Chevy Equinox. Let's see, Ribban's
still really cool, it's expensive. I mean, those are those
are some of the you know, those are some of
the sort of options out there.
Speaker 3 (28:36):
Are you seeing many electrics. I'm from Detroit and now
live in California. You can't go a city block here
in San Diego without seeing a Tesla. You cannot, It's impossible.
There's a wy there's a three, there's an there's a
cyber truck. What's it like in Detroit when it comes
to electrics.
Speaker 4 (28:51):
Yeah, certainly not that density.
Speaker 5 (28:53):
The thing I've been noticing lately, though, are a lot
more of some of these competitor brands popping up.
Speaker 4 (28:59):
That I just mentioned.
Speaker 5 (29:00):
I mean, you see, you know, I live in ann Arbors,
so it's a bit of a liberal bubble. So you're
going to get You're going to get a lot of
green car enthusiasts there and people driving evs. But I
you know, I'd commute to Detroit most days of the week,
and you know, you do see you do see Fords,
and you do see Hyundai's and Kias and Volkswagens, And
(29:21):
you know it's I think because of what I cover
and writing the book, I'm sort of on the lookout
for that, and every week it seems there's more and
more of those mixed in with all the teslasm.
Speaker 4 (29:31):
And we have plenty of teslas.
Speaker 5 (29:32):
I'm sure it's just a fraction of what you guys
see out there, but no, it's it's they've become a
part of the landscape, definitely.
Speaker 3 (29:39):
And ar there's a different story from Detroit.
Speaker 4 (29:41):
For sure. Yeah, but you see in both places.
Speaker 3 (29:44):
Can we return to the topic of the title of
your book, inevitable, because I can just kind of hear
our listeners out there going, yeah, inevitable for China and
maybe for Europe, but American exceptionalism. Remember, we're different and
we like to go our own way. So is there
an argument to be made for you know what pH
(30:07):
vs gasoline diesel they're fine for us for the next
ten years. Why would we want to compete in an
industry that China dominates. Playing Devil's advocate here for a moment,
and what how do you how do you respond to
that sort of thinking?
Speaker 4 (30:24):
Oh, for sure, I mean there's there's there's plenty of
room to play, to play Devil's advocate, you know, I think,
I think, I say in the intro of the book,
I'm pretty sure that you know, internal combustion is going
to be around for decades.
Speaker 3 (30:37):
Yeah, you do a great job of that right out
the right out the gates, you go, let's get after this.
Gasoline powered vehicles are not going away anytime soon.
Speaker 4 (30:46):
Right, So what is what is inevitable?
Speaker 5 (30:49):
You know, I think of it as the share of
the global auto industry that's electric or powered by electrons, So,
you know, plugging hybrids, even hybrids for now, is going
to grow in the share of internal combustion, which has
dominated the market for a century, is going to shrink.
Where we end up, you know, we can maybe toward
(31:11):
the end, we can kind of have some fun with
some percentages and some predictions, and I'm happy to do that, But.
Speaker 4 (31:17):
I think there's no question that that's the way it's going.
Speaker 5 (31:19):
So, now, if you're the CEO of General Motors, Mary
Barr is sitting here in Detroit losing billions of dollars
on your EV operations, you know, raking in money on
big gas power, Silverado pickup trucks and kind of like escalades,
which has been the case for a long time. You know,
how painful is it to lean further into that EV
(31:41):
part of your business? Right, you can't lean away from
the pickup trucks and SUVs because that's essentially what's funding
helping you fund this transition. So you still have to
do that stuff and do it well. And then you've
still got the kind of competition there and that like
it's always been. But then you have to do this
whole other thing, and so you know, can you ease
(32:02):
up on that? I mean, they have been, but I
think they know that they're going to have to compete
with the Chinese, whether it's in Europe now, and GM
really isn't in Europe in any real way, for it is.
By the way, you've got a lot of Chinese automakers
coming into Mexico and other parts of Latin America, mostly
internal combustion cars, but increasingly evs. I don't think these
(32:27):
CEOs feel real good about tariffs protecting them from that competition.
So it in the US, it's a longer it's a
longer term concern. But I think that that's what drives
from the from the automaker's side, that's what drives the
imperative to continue to invest in this because I mean,
Jim Farley loves to talk about what we've seen this
(32:48):
movie before, and when the Japanese came in in the
sixties and seventies and eighties and ate our launch, and
you know that we've never recovered that market share. I
think it's probably smart to have that long memory, and
I think that that's the way they look at it.
Speaker 4 (33:02):
I think they're.
Speaker 5 (33:02):
Probably a little relieved that it's not catching on as
fast as as they thought it might because they're not
competitive yet and maybe this gives them some more time.
But they're vulnerable in other parts of the world, and
I think a lot of these executives believe that eventually
they could be vulnerable in the US two and they've
got to get ready for it.
Speaker 3 (33:21):
Vulnerable in the other parts of the world is exactly
right from Brazil to Thailand, from Australia to the UK.
The Chinese have just moved out. Just in Spain last
week fastest growing market in Europe for the Chinese. Spain
I was in the week before. I was one of
the evangel living in San Diego. You can drive down
to the border and walk across and then within a
half a mile there's a BYD dealership. So I got
(33:42):
to test drive the BYD Shark oh cool is a
Ranger Tacoma Fighter. And then independent of the impressive vehicle
priced about forty five thousand dollars. Independent of that, I
also heard from insiders at GM that they had done
to tear down of that vehicle. And we're genuine and
lee impressed and terrified. Two, this is too close for comfort.
(34:05):
It's right in Mexico. It's selling well, and it's a
quality vehicle. So, as you say it, the terrorists by
time here in the United States, but in the meantime,
other markets around the world are coming under pressure.
Speaker 5 (34:17):
Yeah, I mean, how how wild is that you've got
an electric pickup truck that you know, within spitting distance
of your your home market in the US that is,
And I've heard the same thing about the shark that
it's it's a really impressive you tear it down, you
see the sort of simplicity and elegance of the engineering.
Speaker 4 (34:34):
You know, that's got to be that's got to be
a wake up call.
Speaker 5 (34:36):
And you know, I just think that, you know, we've
got this one hundred percent tariff now on electric cars
coming from China right now. Most of these exports and
you know this as well as anyone, Michael, that most
of the exports right now are gas engine cars out
of China, because I think the Chinese consumers want the electrics,
and so this is the you know, massive overcapacity in
(34:59):
that market. They're helping these gas power cars out to
the rest of the world. But it's only a matter
of time before increasingly those become electric cars. You know,
what is it, One in every five electric sold in
Europe right now is Chinese China built.
Speaker 4 (35:15):
So you know, it's happening, whether sooner.
Speaker 5 (35:18):
Or later, and I think, you know, the Gms and
Fords of the world are preparing for that.
Speaker 3 (35:23):
Great let's talk some numbers. Moments ago you alluded to,
you know, let's talk about the future a little bit.
Twenty thirty US market, what's your sense of the breakout
between say, let's just say three categories gasoline, pH V, E, REV,
and then pure electric percentages.
Speaker 5 (35:41):
Yeah, so you threw me because they normally lump evs
and the pfs together. But I would say, you know,
between fifteen and twenty percent, and that's that's on the
low side. I mean, I think if you look at
most consulting companies, they probably have a third by then.
I don't think it gets there, but I think somewhere
in that fifteen to twenty percent range.
Speaker 3 (36:00):
Twenty percent from roughly ten ish now yep, yeah, so
doubling by in the next five years to about.
Speaker 5 (36:08):
Temple Yeah, yeah, I think I could see that with
the amount of Again, the Trump administration is a big curveball, right,
I mean, a lot of that, the funding for charging,
a lot of that is out the door, but some
of it's not. And he's, you know, he's trying to
put a pause on that and we'll see how that
shakes out. There's there's some moment, there's some inertia that
(36:28):
there though, right the companies all had these plans to
put out EV's, they're going to put them out. I think,
you know, I just think that there right now. The
evs are a bit of a political you know, political story,
right and and there's some stigma attached to.
Speaker 4 (36:42):
Them in certain in certain circles.
Speaker 5 (36:44):
This whole had the headwinds that Tesla has right now
in terms of brand image.
Speaker 4 (36:48):
Probably won't help in terms of numbers. It may help some.
Speaker 5 (36:52):
Of the competitors though, But I do think you start
to get the more of these that get into the market,
you start to get a bit of a normalization. You know,
your neighbor has one, you get into one, and finally
drive it. You know, I think we saw the same
thing with hybrids. And granted hybrids aren't aren't a sort
of lifestyle change that owning an electric is. But you know,
(37:12):
twenty five years ago driving a Prius was like you know,
there was a stigma attached to that too, and now
hybrids are all over the place.
Speaker 3 (37:18):
Yes, So in your twenty percent, it gets complicated within
the industry because everyone has different definition. The Chinese have
yet another you know, an EVS. Would you in that
twenty percent that would include beevs, pure electrics and PHVs,
but hybrids would be separate or are they also in
that hybrid separate?
Speaker 5 (37:37):
Yeah, hybrid separate from that, that's just a pure EVS
and plug in hybrids, which today is a very small
part of the market. It's a couple percentage points if
that in the US. I know it's much bigger in China.
Speaker 3 (37:48):
Mike, you did an amazing job. What I really like
about your book is is one it's very well written,
but more importantly, you bring people into the scene, like
you're in the room with these characters, and you've got
great direct quotes from people. I was reading a review
just this week. It said it's a deeply enjoyable and
smart book that uses masterful storytelling to capture the expansion
(38:13):
dynamism of this transition to electric So very well done.
I will have in your coverage in your writing of
the book, who was the single character that surprised you
the most or impressed you the most?
Speaker 5 (38:26):
Well, I appreciate the kind words, and you know, I
think that's what I was trying to do from the beginning,
is like, it can be a dense topic or you know,
there's a lot going on, it's kind of a big
topic to write about, and so I think I discovered
pretty early on that you need to have interesting people
to tell the story. Right, And I think I'll just
say that one of the subjects I enjoyed talking with
(38:48):
the most and I enjoyed writing his story most was
Jack Jack Chang, who's was a long time Forward executive
and later at Chrysler and eventually became one of the
founders of Neo. He told the story He's just he's
a character, and he told the story of being approached
at the Shanghai Auto Show, I think in twenty fifteen
(39:09):
by William Lee, who was who was founding Neo at
the time, or a company that would later become known
as Neo, and he wanted you know, he was William
Lee's basically a tech guy, and he wanted some help
in the actual nuts and bolts of the car business.
Speaker 4 (39:22):
And you know, Jack was like very skeptical at first.
Speaker 5 (39:26):
And then he you know, he kind of enlisted his
his son was a consultant back in the States and like,
tell me, you know, let me know what these guys
are all about. And pretty quickly his son realized that
I think Ali Baba or ten Cent maybe it was,
was one of one of the big investors.
Speaker 4 (39:40):
And so yet, you know, Dad, you better do this
pretty quick.
Speaker 5 (39:42):
And so he he joined and he kind of talked
about how difficult it was to get supplier because he
was mostly kind of in supply chain his whole career purchasing,
and the difficulty in getting suppliers to raise their hand
and actually, you know, go into business with the China.
Speaker 4 (40:00):
He's unproven Chinese startup. You know. He just had a
really really fun story to tell.
Speaker 5 (40:04):
But there was a lot of people like that in
the book who kind of toiled in the US auto market,
you know, hoping to see electrics catch on or battery
tech kind of take the next step, and it just
never did. And then they ended up getting an opportunity
in China, and I thought that was kind of interesting,
as you know, they had to jump to China to
(40:24):
actually see this thing come to fruition.
Speaker 3 (40:26):
Great guy, Jack Chang, wonderful career, knows, China knows, the
US knows. Taiwan. Always always enjoyable to talk to you
in the good mood. I think he has a band, Yeah.
Speaker 4 (40:40):
Yeah, yeah, that was one of the ways he tried
to get the suppliers.
Speaker 5 (40:44):
He threw a big party and played Guns and Roses
and Guns and Roses song on his guitar.
Speaker 4 (40:49):
So yeah, He's got a lot of fun stories.
Speaker 3 (40:51):
On the topic of storytelling. We're going to close with
one prediction from you, and that has to do with baseball.
Who will win the World Series twenty twenty five?
Speaker 5 (41:01):
Okay, well, I'm gonna go with my heart on this one.
The Chicago Cubs, I think, are you know we had
our moment in the sun in twenty sixteen, finally broke
the curse. It's been a little quiet since then, but
they came close to making the playoffs last year. I
think they're predicted to make it this year. And I'm
seeing a run for the North Siders.
Speaker 3 (41:20):
That's National League. What about American League? You got anybody
out front in the American League that's not that are
not the New York Yankees.
Speaker 5 (41:28):
You know, I'm gonna I'm gonna stay Homer here and
go with the Detroit Tiger.
Speaker 3 (41:33):
Right, That's what I wanted to hear.
Speaker 4 (41:34):
Right, I think I saw.
Speaker 5 (41:35):
I think I saw that there are ten to one
to actually when the when the pennant, So you know
they've got a legitimate shot.
Speaker 4 (41:42):
They surprised people in the playoffs last year.
Speaker 5 (41:44):
So yeah, a Detroit Chicago World Series would be a
ton of fun in this part of the country.
Speaker 3 (41:50):
Let's have it. Twenty twenty October twenty twenty five. Mike Calias,
author Inevitable Inside the messy, unstoppable Transition to Electric Vehicles.
Thank you so much for being with me today. Congratulations
on the book, and it's going to be fascinating to
see how this whole thing plays out in particular the
United States.
Speaker 4 (42:09):
Yeah, for sure, Thanks so much, Michael. I had a
great time talking to you.
Speaker 3 (42:13):
All right, I'll see you around all right, appreciate it here.
Bye bye. So ladies and gentlemen, what is your verdict?
Are EV's inevitable?
Speaker 4 (42:31):
Hmmm?
Speaker 3 (42:31):
Kind of depends on where you live, doesn't it. I mean,
think about it. There's that old Silicon Valley saying the
future is already here. It's just unevenly distributed. Ask a
person in China about EV's and they'd say, definitely. One
of two new car sales this year in the world's
largest market will be EV's. Shift over to Europe, and
someone in Paris would say probably, because almost a quarter
(42:55):
of new car sales this year will be EV's across Europe.
But then shift back over the United States and people
would be on the fence, saying I really don't know evs.
Maybe maybe not. Why Well, up until now EV's have
had a hard time getting traction in the United States.
They account for about ten percent of total sales. Okay,
(43:18):
that's the picture globally, so we have highly uneven distribution
of demand for evs. How is Detroit doing? Mister Calias
tells us that GM has probably the most ambitious vision
for evs and batteries. Ford has deployed a crack team
here in California to develop a really cool set of
new products that will be low cost and competitive not
(43:41):
only the United States but worldwide. And then we have
Stillantis that is by and large content with powering their
cars with E revs and PHVs at least for the
time being. So GM out front for catching up fast,
Stillantis biding its time. Second take away way, Detroit to
(44:01):
be competitive has to break through on two fronts. One, costs.
The Chinese are able to manufacture an EV at twenty
five percent lower costs than the Detroit three. Two, and
this may be the more important one. Detroit has yet
to deliver a super compelling EV that will win the
hearts and minds of consumers, not only here in the
(44:23):
United States, but globally so. Tesla's done it with the
Model Y sells really well in Europe, in China and
here in the US. Where is that secret superpower product
from gm Ford or Stillantis. When it comes to evs,
we're not just talking about getting the battery range right
or having charging be convenient, but something that turns heads
(44:46):
and makes people around your neighborhood say, Wow, I'd love
to have one of those. Yeah, A hints of that
with the Ford Lightning, hints of that with a Machi. Genuinely,
we're not there yet. We're not in the realm of Wow.
Detroit crushed it. That's what I'm looking for, That's what
I'm hoping for in the coming years. Tremendous conversation with
(45:09):
mister Calias today. Always great to have you with us.
Thank you so much for joining. I am Michael Dunn
and this is the Driving with Done podcast.
Speaker 2 (45:20):
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. Thank you for joining this
episode of the Driving with Done podcast. To connect with
Michael Dunn, visit Doninsights dot com or find Michael on
(45:40):
x or LinkedIn This is the Driving With Done podcast
As a longtime foreign correspondent, I've worked in lots of places,
but nowhere as important to the world as China. I'm
Jane Perlez, former Beijing bureau chief for The New York Times.
On Face Off, the US versus China will explore what's
critical to this important global relationship, Trump and Sijan Ping, Ai, TikTok,
(00:23):
and even Hollywood. New episodes of Face Off are available
now wherever you get your podcasts.
Speaker 2 (00:33):
Where top executives and creasy entrepreneurs gather to talk about
the future of electric vehicles. This is Driving with Done podcast.
Speaker 3 (00:45):
Hello and welcome to the Driving with Done podcast. I
am your host, Michael Dunn. So when it comes to evs,
people seem to embrace one of two schools of thought.
In School one, electric vehicles may have a role to
play in our society, but that role is limited. Manufacturers
should not be required to build them, and citizens should
(01:07):
definitely not be required to pay taxes to subsidize the
purchase of evs. In Camp two, on the other hand,
the belief is that electric vehicles are, without a doubt
the future. By twenty forty, the vast majority of all
new vehicles will be propelled by what by motors driven
with energy from these amazing things called batteries. So which
(01:32):
school has it right? Enter our special guest today, Mike Calias,
author of a tremendous new book called Inevitable, inside the messy,
unstoppable Transition to Electrics. Mister Calias has covered the automotive
business for the Wall Street Journal in Detroit for more
than ten years. In this episode, he gives us a
(01:53):
take on what makes building evs and batteries so hard
for the Detroit Three, Who among them is doing the
best job, who's falling behind, and how might America's commitment
to EV's change under the Trump administration. It's Mike Colias,
author Inevitable, right here on the Driving with Done podcast.
(02:23):
Mike Calias, thank you so much for taking time to
join me today on the Driving with Done podcast.
Speaker 4 (02:29):
Michael, it's a pleasure.
Speaker 3 (02:30):
We're here to talk about your new book, a tremendous
book that is called Inevitable, with a capital EV in
the middle. There the future of EV's and your book
begins with a really tense scene that draws the reader
in immediately. Jim Farley is there, Maybe it's somewhere in dearborn,
what's going on?
Speaker 5 (02:50):
Yeah, so this was a few years ago now, I
think that was early twenty twenty two.
Speaker 4 (02:55):
And Jim Farley, who's been very.
Speaker 5 (02:58):
Sort of vocal on this, you know, this challenge that
the legacy carmakers have to try to catch up to,
you know, the EV startups in the Chinese and how
a depth they've been this juggernaut on electric cars, right
and so but this was pretty early on. This is
still when Tesla was like the big foe, right, the
(03:19):
one that everyone was trying to catch. And so Harley,
you know the way he tells it, Uh, he had
asked his engineering staff, you know what's the like, what
we're losing money on these on these evs. Tesla's you know,
hugely profitable at this point, Like what do we you know,
what are we missing out on? Like I'm his assumption
was that the way that Ford was designing its its
(03:39):
electric cars, it was just inefficient compared to Tesla.
Speaker 4 (03:43):
Tesla had some secret sauce.
Speaker 5 (03:44):
And so he was told by his staff that no,
you know this is we're pretty competitive, you know, we
think we're apples apples, And so Farley orders this, this
tear down, this dissection of a Model Lie next to
Ford's Mustang Mokey, you know, and the Monkey was had
become a hit at the.
Speaker 4 (04:03):
Time it was. It was a success per board in
the in the early ev days.
Speaker 3 (04:07):
And good looking car really attract stands out on the
road where they both priced comparably. So we're looking at
kind of apples to apples in terms of pricing.
Speaker 5 (04:15):
Yeah, very much, so very much in that sort of
sort of mid size suv sporty suv segment, right, and
these you know, you know, these these dissections teardowns aren't unusual,
but I think what wasn't usual is number one, that
the CEO of the company ordering it up and having
this sort of on display for all of the you know,
(04:37):
the top folks to see. And then secondly, a guy
by the name of Doug Field was the sort of
godfather of the Model three at Tesla back in the day,
really kind of figured out how to how to bring
that first mass market car to the market for Tesla
had by that time joined for just a few months earlier,
(04:58):
and he was the one who was sort of of
going through and running this teardown, and you know, good
guy to do it, right, He basically designed. I had
a big hand in overseeing the design of that model,
Model Why the Model three, which you know, the model
is essentially the same mechanical guts. So anyway, you know,
they they picked this thing apart, and you know, on
(05:20):
one side of the room is the guts of the
Model Why, and then the other is the guts of
the Machi. And it was just apparent right away there
was way more strewn across the floor for the Ford, right,
tons of bolts and rivets and wiring harnesses that didn't
need to be there. And you know, Farley's looking down
at this thinking like this is this is like a
(05:42):
pool of red ink, right, like this is this is
where all the losses are coming from. It's just not
an efficient design relative.
Speaker 3 (05:48):
Ball of metal, yarn and red.
Speaker 4 (05:51):
Ink, exactly. Yes.
Speaker 5 (05:53):
And so that was I think, you know, I think
it was pretty demoralizing for a lot of the engineers
in the room because they had been lauded as this
hit and it was it was, it was hot, it
was selling. There was a waiting list at the time
probably for it, and so I just think Barley was
really trying, you know, he was. He was so sort
of jarred by this he he brought the board through,
(06:16):
you know, like a week later, through the same warehouse
to sort of see it for themselves, you know, And
this is kind of his his mo. He really wants
to shake up the organization, like, we can't just keep
doing things the way we've been doing. We've got to
take a different approach because this is what we're up against.
Speaker 3 (06:33):
You talk in your book about. So let's stay on
the topic of costs and pricing, which is so central
to EV adoption. You know, the average cost of EV
in the United States today is plus or minus fifty
thousand dollars, which is pretty premium pricing. So why is
it so hard for the Detroit to duplicate what Tesla
or others have done in terms of bringing that cost
(06:56):
down and making the prices more affordable.
Speaker 5 (06:58):
Yeah, I think it starts with you know, but I
think many of the legacy automakers, the Detroit companies included,
really started with more of an internal combustion mindset, right,
I mean they you know, they've tried to shootinghorn in
an electric propulsion system into what essentially was designed as
a gas engine platform, and uh, you know, you end
(07:19):
up with a lot of inefficiencies when you do that.
I mean, GM would argue that that they kind of
had a.
Speaker 4 (07:24):
You know, a clean sheet approach to their first generation
of evs. But they're still losing billions, billions of dollars
on their EV operations and so, you know, and they've
had to sort of go go back to the drawing
board a little bit on their approach as well. So
I think it's just you know, another factor is that
Tesla was, you know, as Elon Musk has put it
(07:46):
so close to bankruptcy as they were designing some of
these cars, like you they were, they just had this
miser's mentality like if you know, if we can save
a penny on this decision for to put this part
in or not, we're going to do it. That was
a bit of it.
Speaker 5 (08:02):
A huge factor and you know a lot about this, Michael,
is that the Chinese now have brought to bear many
advantages when it comes to cost. And you know, this
is kind of maybe jumping ahead for our discussion because
this is kind of the eight hundred pound gorilla now,
but I mean from from a cheaper supply base to
raw materials, to government support, just the fact that that
(08:27):
Asia really is the sort of nerve center when it
comes to things like electric motors obviously, batteries, processing of
minerals that go in the batteries. I mean, there's so
many advantages now that China and even other Asian players
have that It's really been hard for the car companies that,
you know, the Detroit in Germany to figure this out
(08:50):
and catch up.
Speaker 3 (08:50):
To figure it out and catch up. It's almost like
the Detroit teams are being asked to play cricket. Okay, yeah,
there's similarity here, there's a ball in a bat, but
my goodness, so much, so many differences and so hard
to make that adjustment. Right, it's different language for these guys.
Speaker 4 (09:09):
No, I think that's right.
Speaker 5 (09:10):
I mean, you know, there's a reason why we really
didn't see a startup auto company for a century more
or less. It's because there was huge barriers to entry, right,
I mean, and it was it was the complexity of
the internal combustion engine and how capital intensive it was,
and the hundreds of parts and thousands of suppliers, and
(09:30):
it just you couldn't you couldn't just waltz into the
industry and start making internal combustion engines and transmissions I
mean hugely complex mechanical systems, right, while the ev you know,
battery chemistry is tricky and finicky and you gotta get
it right, and battery cells are expensive. I mean, you
can essentially take the materials you need for an electric
(09:52):
car and a motor and some battery cells and almost
off the shelf, right and put it into you know,
an existing car platform. It doesn't mean that it's easy
to build cars. That's always hard, but the systems themselves
kind of it lowered the barrier to entry. Mean, that's
how Tesla started, right strapping together all the laptop cell
So you know, at a certain point, the expertise of
(10:16):
a Toyota or a general motors has developed over the
years on you know pistons and you know engine blocks
and transmission like all that stuff is going to matter
for a still a long time, but increasingly less so,
and it's going to become more of a game of
battery cell chemistry. You know, inverters, you know, more efficient
(10:38):
ways of moving these electro electrons around the car. I mean,
that's that's kind of become the game. And then you know,
beyond that, there's also the tech part of it, right,
I mean, I think that's the way Elon Musk looks
at the world now is you're going to have to
have an EV, a super cost efficient EV. That's like
table stakes now, and the race is from here on out.
The race is the technology you infuse into those vehicles.
(11:02):
And so the traditional automakers are still trying to figure
out the first part, right, like how do we get
a boss out?
Speaker 3 (11:07):
Yes, the traditional automakers still wrestling with that first part.
You've been covering the Detroit automakers in Detroit for gosh,
about fifteen years now, since twenty ten, I believe for
the Wall Street Journal. If we look at the Detroit three,
everybody likes rankings. Who do you think is ahead today?
Which company is the caboose, who's doing the best job today?
Speaker 5 (11:30):
Gosh, Well, I think I'm going to give you a
lesson satisfying answer, because they'll have some strengths and serious weaknesses.
I don't want to I don't want to squir them
out of the question, but I will tell you I'll
just kind of break each one of them down. I
think I think General Motors was the first of the
three to really jump in a big way and say
the future is all electric and we're you know, we're
(11:52):
making a brand new platform, and we're going to build
a bunch of battery factories and we're all in.
Speaker 3 (11:57):
Right.
Speaker 5 (11:59):
They have very much stumbled out of the gate in
terms of how that all was executed. They've had, you know,
for you know, early in this decade, there was a
lot of enthusiasm. There was a lot of you know,
you could celeby ev you could make right. And having
been the first to jump in, among the first of
(12:19):
the big legacy automakers to jump into this game, they
they could have really killed it in those first few
years twenty twenty, twenty one, twenty two, and instead they
were really struggling with like getting the manufacturing right. They've
at first they didn't have enough before they had transitioned
to their own batteries, they weren't able to get batteries
from the supply chain, which is very unlike general motors,
(12:40):
you know, which can sort of browbeat their supply chain
into doing just about anything.
Speaker 4 (12:44):
Then once they.
Speaker 5 (12:44):
Did have their own batteries, they had a lot of
manufacturing struggles and it just it led to a very
slow start. They had the vehicles engineered and designed and
ready to go, they just couldn't execute.
Speaker 3 (12:58):
Which was the first vehicle GI wanted to bring to
market fully be I.
Speaker 5 (13:02):
Mean, the first fully be on this new platform which
they called Ultium, which they've since scrapped the name, which
would tell you that, you know, things hadn't gone really
as they had planned.
Speaker 4 (13:13):
But it was the Hummer, which was.
Speaker 5 (13:14):
Kind of another you know, very low volume obviously what
one hundred and ten hundred and fifteen thousand dollars, you know,
I think they were trying to make a statement with that,
with that vehicle, like, hey, you know, and and I
get in a way, I get the strategy, right. I mean,
for the previous two decades, the industry caught a lot
of flak for not having sexy, cool electric cars. You know,
(13:37):
you're not trying, You're just giving us a Nissan leave
for a Vault, Like sure, innovative cars, but like it's
not it's not what people want to drive.
Speaker 4 (13:44):
They're not big enough. And so they kind of overcorrected
a bit, and so the Hummer.
Speaker 5 (13:50):
You know, I don't think we'll ever know how how
much of a hit it could have been off the bat,
because they couldn't get them out the door. They couldn't
make them, but I do think it was a little
over the top in terms of pricing and the size
of the thing.
Speaker 4 (14:03):
I mean, it's like whatever, nine thousand pounds.
Speaker 3 (14:05):
And no weight. Yes, I think the battery itself might
weigh as much as a Honda Civic, like.
Speaker 4 (14:11):
Incredibly right, right, Yes, there's all those fun comparisons.
Speaker 5 (14:14):
So just to sum up general motors, I think jumped
in early have done a better job than any of
the three and industrializing the plan.
Speaker 3 (14:22):
Right.
Speaker 5 (14:22):
They've got the battery plants up and running a couple
of them at least, you know. I think that they
are more serious at a sort of ground up approach
or or faster than the other two, but the execution
so far hasn't been there. I mean, they are now
starting to crank these out. They've got a lot of models.
Chevy Equinox EV looks nice, the Blazer, They've got a
(14:43):
Silverado and a Sierra. I think they've got more EV's
than they probably wish they had at this point. But
I think they're very much in the game in terms
of the product and having industrialized the sort of base
to be able to do this at scale if and
when the time comes that they need to Ford I
think was very smart at kind of getting in on
a shoestring budget. You know, was later than GM to
(15:06):
declare all in on evs that that Mustang Mocke was
really you know, a quick kind of built on an
internal combustion platform. But let's get it out, let's make
it look cool. And they, you know, they've had a
lot of success with that. There's a lot of happy
make owners. The four Lightning was you know, a marketing marvel.
I think you could say, I mean, it got a
(15:27):
ton of play. They got it out quick, same deal,
but it was basically you know, gas power to f
one fifties from the same factory. They would just ship
them to the other part of the factory and stick
an electric propulsion system in it.
Speaker 4 (15:40):
But they had a lot of sales of that too.
And Jim Farley will.
Speaker 5 (15:43):
Tell you we've learned a lot about the you know,
the eed customer and about how to do this and
do this with you know, cost effectively and with quality
and all that. So, but they're now behind right, they
don't have an EV schedule for two more years. They've
got this you know this what they like to call
the skunk works out in California where they've got like
all their smartest engineers working to get costs out of
(16:06):
the next generation of evs.
Speaker 3 (16:08):
But including the former Tesla guys.
Speaker 5 (16:10):
Right, yes, yeah, there's a you know, there's Doug Field,
but then there's also an you know, the number two,
a guy named Alan Clark who's kind of spearheading that,
and they're you know, to hear for tell it, that's
a very sort of cost conscious effort to try to,
you know, how do we compete with the Chinese on cost?
(16:31):
And you know, they're saying that they've figured it out
and I think the first product is going to be
a mid sized truck, but you know it's it's a
couple of years out.
Speaker 4 (16:38):
So they're I think they're behind.
Speaker 5 (16:40):
GM in terms of you know, vertically integrating the batteries
and you know, being able to do this at scale
and cost effectively. Stilantis, you know, they're they seem mostly
focused on an extended range you know, I guess e
REV you'd call it, but essentially a hybrid approach that
will allow you know, a pickup truck to go six
(17:02):
hundred plus miles on a combination of electric and then
gas takes over. You know, I think the I think
their furthest behind on the EV part of it. But
maybe the strategy from a business standpoint.
Speaker 4 (17:13):
Was, you know, to be a not a fast follower,
might might make it work out for them.
Speaker 3 (17:18):
That's right. We we Stilantis mostly sell large trucks and
SUVs to North American consumers. They like their big rigs,
they like to go long distances, and they don't want
to worry about charging. So let's roll out this practical
solution called e reps or pagvs and not.
Speaker 5 (17:35):
Yeah, they's I think they're the number one plug in
hybrid producer in the country right now because they've got
them on the Wrangler and some Grand Cherokees.
Speaker 4 (17:43):
So you know, for now that probably works for them.
Speaker 5 (17:45):
It's probably minimizing the losses than if they were trying
to make tens of thousands of evs right now.
Speaker 3 (17:51):
Right so way up top the benchmarks Tesla. Still you've
got the Detroit three racing to catch up. In between,
you have an interesting company called Rivian. What's your take
on Rivian? Will it be the next Tesla? Can it
be the next Tesla?
Speaker 5 (18:05):
I mean, if you just look at all of the
advantages that Tesla had when it was coming into its
own and it's sort of formative years that Rivian does
not now.
Speaker 4 (18:15):
It's hard to see.
Speaker 5 (18:17):
It's hard to see Rivian sort of emerging as like
a juggernaut like that. I mean, years and years of
super low cost capital, years and years of no competition
at all. You know, it's it's Rivian has to compete
now with all these other models coming on online. Detroit
has you know, been defending its position in the pickup
(18:38):
truck market when it comes to electric So even though
they're still losing a lot of money on things like lightning,
they're there with products that Rivian has to compete with.
I mean, it's a it's a really cool story, right,
it's a it's a great story of an entrepreneur R J. Scaringe,
who you know, this has been fifteen plus years now
of him building this company.
Speaker 4 (18:59):
Still still the CEO has.
Speaker 5 (19:01):
Has carved out like a really cool, like specific brand identity,
you know, like this outdoorsy Patagonia of trucks kind of ethos,
and it's you know, it has a devout following.
Speaker 4 (19:17):
It's got a very distinctive product.
Speaker 5 (19:19):
They're struggling to make money and and get the manufacturing
piece of this right still, and they've they've.
Speaker 4 (19:27):
Turned a corner.
Speaker 5 (19:27):
They've come a long way in terms of you know,
figuring out how to make cars, but you know they're
going to have to get a cheaper product. It's going
to take capital. There's questions now around whether or not
they can get a federal loan because all that stuff
in DC obviously is starting to dry up and get
clawed backed by the Trump administration. So you know, they've
still got a long road ahead, but it's it's pretty
(19:48):
admirable I think.
Speaker 4 (19:49):
What they've what they've been able to accomplish so far.
Speaker 3 (19:51):
Yeah, they're persevering, hanging in there, battling, fighting, adjusting. They
don't have the advantages Tesla had, but they're still in
the game, important.
Speaker 5 (20:02):
Game, and we'll see if they stay, if they stay
independent or you know, there's Folkswagen agree to invest quite
a bit of money in them several months ago, and
you know there are some people who think that could
be a precursor to even a closer relationship from US
sort of capital structure standpoints. So we'll see if they
if they need and get more help or try to
(20:23):
go it alone.
Speaker 3 (20:25):
Being there in Detroit, with the new administration, the Trump administration,
what's your sense of how sentiment has changed with regards
to evs. We have the Detroit three, starting at say
twenty twenty, going gangbusters to do evs. Right, you've just
outlined for us the struggles they've encountered. What's the sentiment today.
Speaker 4 (20:46):
Yeah, And I think those struggles were on the manufacturing side.
Speaker 5 (20:49):
There's also a struggle on the demand side in the US, right,
And you know, i'd say starting in mid twenty twenty three, maybe,
so going on two years ago now is when we
started to get signs of, you know, g this might
not go as quickly as we thought. And I think,
you know, the past eighteen months have been a lot
of sort of you know, dawning of the.
Speaker 4 (21:10):
Realization that this isn't going to be this is you know, we're.
Speaker 5 (21:13):
Not going to see that the kind of demand and
the kind of numbers materialize that we thought.
Speaker 4 (21:17):
And so how do we calibrate this?
Speaker 5 (21:19):
And you know, do we slow walk this factory, do
we cancel this you know vehicle We've seen in a
lot of that nobody's walking away from electric cars. I
think they all know that it's if they're all on
record as saying it's the future. They have to uh,
you know, they have to figure this out. But certainly
they're trying to minimize the losses at this point. So
that that's been like the last eighteen months, and now
along comes a term of administration that's openly pretty hostile
(21:43):
to evs, and I think there's definitely the sense that,
you know, this is going to create further headwinds for
the EV story, at least in the US. And you know,
I think on the table are of several things that
that might happen. I think there's no question that he's
going to roll back EPA regulations. They just said that recently,
(22:04):
that that's on the table. I think what's you know,
the upshot of that is the car companies are going
to be able to sell more gas and diesel engines
than engine cars than they would have otherwise under the
Biden rules, which I think the industry feels like went
way too far the other way and you know, would
have required something like half of all sales to be
(22:24):
electric by the early twenty thirties. Really nobody thinks that's
going to happen now. So I think these rules need
probably needed to get pushed back anyway with you know,
in the eyes of the industry. Now how far it goes,
who knows, But I think that's probably welcome here in
the interim because the demand picture hasn't materialized like they expected.
(22:44):
But the other part, the big part, is ed policy
in terms of funding for electric cars and the seventy
five hundred dollars that many people qualify for to purchase
an EV you know, that's that's up to Congress, and
I think I think there'll be probably no shortage of
Republican lawmakers who are eager to dunk on evs and
and you know, vote to take that funding away. I mean,
(23:06):
I think that's the expectation at this point. I don't
know how quickly that will happen.
Speaker 3 (23:10):
That will help with an interesting twist, right, Mike, because
just this week we have President Trump and Elon Musk
on the lawn to the White House test driving the
bottle as and a cyber truck. So it'll be fascinating
to see if there's sort of this sea change among
the Republican side of the aisle.
Speaker 5 (23:27):
It's really been fascinating and some interesting dynamics here with
with the Musk factor in the administration, right. I mean,
you know, you'd think that the CEO of the biggest
EV maker in the world for now v I D
lurking right behind them, but you know, would would would
support federal funding for evs. Of course Elan is on
(23:48):
record as saying he does not, And of course Tesla
has been the beneficiary of billions of dollars in you know,
federal help over the years. So it's a bit like
slamming the door behind you, you know. I think Musk
knows that that taking that funding away is going to
hurt Tesla in the in the short to medium term,
but I think the bet is that it hurts his
(24:08):
rivals worse, right, I mean, they're still losing a lot
of money on their electric cars. Tesla is now solidly profitable,
and I think, you know, it also is reflective of
the way Musk now views Tesla, which is we're going
to win on AI and probotaxis and that's you know,
that's going to be the key to profitability for this company.
That's why you invet you know, he famously said a
(24:31):
few months back, like, don't invest in Tesla if you
think we're an electric car company, We're you know, it's
we're a much bigger story than that.
Speaker 3 (24:38):
Don't invest in Tesla if we think we're just an
electric car company.
Speaker 5 (24:43):
You're paraphrasing, but essentially that's what he's saying is is
this is an AI story now. And so you know,
if that's the lens through which he's he's looking at
the company, you can see why he may not be
all that concerned about whether or not some of his consumers,
his customers get seventy five hundred bucks on their their purchase.
Speaker 3 (25:01):
I'm going I'm curious. I want to ask you a
question that maybe a little bit tough, but what the hell,
let's go for it. You're an observer and insider there
in Detroit. You understand the companies where they're at, and
their cost structures and their profit and loss. You also, tomorrow,
your appointed cars are. President Trump says, Mike, we want
you in charge of setting policy for our nation with
(25:22):
regards to evs. What do you do? Do you go
full pedal to the metal. EV should get support across
the board industrial consumer incentives, rebates, tax breaks, or do
you go no, let's just take this step by step.
There's no big hurry.
Speaker 5 (25:42):
Well, I think you could look at it like there
is a big hurry because you know, this ev transition.
It's like we talk about the transition, it's really multiple
transitions unfolding at the same time. Right, And so China
is now I think the latest numbers I saw was
more than fifty percent electric and plug in hybrid. Europe
is in the twenty to twenty five percent range, and
(26:03):
we're sitting around ten percent. So if you believe that,
you know, the future is electric, whether or not it's
ever one hundred percent electric, I mean, I think that's many,
many decades away if we ever get there. You know,
I think internal combustions can be around for a long time.
But if you believe that it's going to be central
to the way people get around, and battery technology is
(26:24):
in the national interest to be you know, to sort
of control your own destiny with that and not be
reliant on China for you know, that massive part of
the transportation system, then I think you do need industrial
policy around it. And I think that's what was put
in place through the Inflation Reduction Act of President Biden, Right,
(26:45):
And so I think a case can be made that
it's it's a national defense slash economic competitiveness question as
to whether or not there is some funding to help
companies figure this out, because every day that is by,
the Chinese are pulling further and further ahead on electric
cars and battery technology.
Speaker 3 (27:06):
They really are, all right, So that's that's a big
giant question. I'm going to make an easier one for
you now. Your best friend calls you later today it says,
I'm in the market for an ev which one do
you recommend?
Speaker 4 (27:17):
Wow, well, I think there's I'll give you like a sampling.
Speaker 3 (27:23):
Right.
Speaker 4 (27:24):
Tesla is taking some brand flack right now.
Speaker 5 (27:27):
Right, Uh, you know, the controversy around Elon Musk right
now has a lot of people reconsidering their purchase of
a Tesla.
Speaker 4 (27:37):
There are there are a lot.
Speaker 5 (27:38):
Of Tesla's hitting the market, the used market, not just
from people who are upset with Musk's behavior and politics,
but also you know, Hurts bought tens of thousands of
Tesla's a year or two ago, and that they're still
continuing to flow the market. So if you're looking to
get into you know, what's probably you know, you could
(28:00):
argue the most fully evolved version of an electric car.
There's plenty of really good Teslas in the US market.
That might be one one thing people consider if they're
looking to get in the market. Beyond that, you know,
Honda and Kia, the ED six, I five, I mean,
there's some some really cool stuff. Those don't get great ranges.
(28:20):
I think it's in the two forty two sixty range.
You can do a lot better on range. There's more
affordable options now, like a Chevy Equinox. Let's see, Ribban's
still really cool, it's expensive. I mean, those are those
are some of the you know, those are some of
the sort of options out there.
Speaker 3 (28:36):
Are you seeing many electrics. I'm from Detroit and now
live in California. You can't go a city block here
in San Diego without seeing a Tesla. You cannot, It's impossible.
There's a wy there's a three, there's an there's a
cyber truck. What's it like in Detroit when it comes
to electrics.
Speaker 4 (28:51):
Yeah, certainly not that density.
Speaker 5 (28:53):
The thing I've been noticing lately, though, are a lot
more of some of these competitor brands popping up.
Speaker 4 (28:59):
That I just mentioned.
Speaker 5 (29:00):
I mean, you see, you know, I live in ann Arbors,
so it's a bit of a liberal bubble. So you're
going to get You're going to get a lot of
green car enthusiasts there and people driving evs. But I
you know, I'd commute to Detroit most days of the week,
and you know, you do see you do see Fords,
and you do see Hyundai's and Kias and Volkswagens, And
(29:21):
you know it's I think because of what I cover
and writing the book, I'm sort of on the lookout
for that, and every week it seems there's more and
more of those mixed in with all the teslasm.
Speaker 4 (29:31):
And we have plenty of teslas.
Speaker 5 (29:32):
I'm sure it's just a fraction of what you guys
see out there, but no, it's it's they've become a
part of the landscape, definitely.
Speaker 3 (29:39):
And ar there's a different story from Detroit.
Speaker 4 (29:41):
For sure. Yeah, but you see in both places.
Speaker 3 (29:44):
Can we return to the topic of the title of
your book, inevitable, because I can just kind of hear
our listeners out there going, yeah, inevitable for China and
maybe for Europe, but American exceptionalism. Remember, we're different and
we like to go our own way. So is there
an argument to be made for you know what pH
(30:07):
vs gasoline diesel they're fine for us for the next
ten years. Why would we want to compete in an
industry that China dominates. Playing Devil's advocate here for a moment,
and what how do you how do you respond to
that sort of thinking?
Speaker 4 (30:24):
Oh, for sure, I mean there's there's there's plenty of
room to play, to play Devil's advocate, you know, I think,
I think, I say in the intro of the book,
I'm pretty sure that you know, internal combustion is going
to be around for decades.
Speaker 3 (30:37):
Yeah, you do a great job of that right out
the right out the gates, you go, let's get after this.
Gasoline powered vehicles are not going away anytime soon.
Speaker 4 (30:46):
Right, So what is what is inevitable?
Speaker 5 (30:49):
You know, I think of it as the share of
the global auto industry that's electric or powered by electrons, So,
you know, plugging hybrids, even hybrids for now, is going
to grow in the share of internal combustion, which has
dominated the market for a century, is going to shrink.
Where we end up, you know, we can maybe toward
(31:11):
the end, we can kind of have some fun with
some percentages and some predictions, and I'm happy to do that, But.
Speaker 4 (31:17):
I think there's no question that that's the way it's going.
Speaker 5 (31:19):
So, now, if you're the CEO of General Motors, Mary
Barr is sitting here in Detroit losing billions of dollars
on your EV operations, you know, raking in money on
big gas power, Silverado pickup trucks and kind of like escalades,
which has been the case for a long time. You know,
how painful is it to lean further into that EV
(31:41):
part of your business? Right, you can't lean away from
the pickup trucks and SUVs because that's essentially what's funding
helping you fund this transition. So you still have to
do that stuff and do it well. And then you've
still got the kind of competition there and that like
it's always been. But then you have to do this
whole other thing, and so you know, can you ease
(32:02):
up on that? I mean, they have been, but I
think they know that they're going to have to compete
with the Chinese, whether it's in Europe now, and GM
really isn't in Europe in any real way, for it is.
By the way, you've got a lot of Chinese automakers
coming into Mexico and other parts of Latin America, mostly
internal combustion cars, but increasingly evs. I don't think these
(32:27):
CEOs feel real good about tariffs protecting them from that competition.
So it in the US, it's a longer it's a
longer term concern. But I think that that's what drives
from the from the automaker's side, that's what drives the
imperative to continue to invest in this because I mean,
Jim Farley loves to talk about what we've seen this
(32:48):
movie before, and when the Japanese came in in the
sixties and seventies and eighties and ate our launch, and
you know that we've never recovered that market share. I
think it's probably smart to have that long memory, and
I think that that's the way they look at it.
Speaker 4 (33:02):
I think they're.
Speaker 5 (33:02):
Probably a little relieved that it's not catching on as
fast as as they thought it might because they're not
competitive yet and maybe this gives them some more time.
But they're vulnerable in other parts of the world, and
I think a lot of these executives believe that eventually
they could be vulnerable in the US two and they've
got to get ready for it.
Speaker 3 (33:21):
Vulnerable in the other parts of the world is exactly
right from Brazil to Thailand, from Australia to the UK.
The Chinese have just moved out. Just in Spain last
week fastest growing market in Europe for the Chinese. Spain
I was in the week before. I was one of
the evangel living in San Diego. You can drive down
to the border and walk across and then within a
half a mile there's a BYD dealership. So I got
(33:42):
to test drive the BYD Shark oh cool is a
Ranger Tacoma Fighter. And then independent of the impressive vehicle
priced about forty five thousand dollars. Independent of that, I
also heard from insiders at GM that they had done
to tear down of that vehicle. And we're genuine and
lee impressed and terrified. Two, this is too close for comfort.
(34:05):
It's right in Mexico. It's selling well, and it's a
quality vehicle. So, as you say it, the terrorists by
time here in the United States, but in the meantime,
other markets around the world are coming under pressure.
Speaker 5 (34:17):
Yeah, I mean, how how wild is that you've got
an electric pickup truck that you know, within spitting distance
of your your home market in the US that is,
And I've heard the same thing about the shark that
it's it's a really impressive you tear it down, you
see the sort of simplicity and elegance of the engineering.
Speaker 4 (34:34):
You know, that's got to be that's got to be
a wake up call.
Speaker 5 (34:36):
And you know, I just think that, you know, we've
got this one hundred percent tariff now on electric cars
coming from China right now. Most of these exports and
you know this as well as anyone, Michael, that most
of the exports right now are gas engine cars out
of China, because I think the Chinese consumers want the electrics,
and so this is the you know, massive overcapacity in
(34:59):
that market. They're helping these gas power cars out to
the rest of the world. But it's only a matter
of time before increasingly those become electric cars. You know,
what is it, One in every five electric sold in
Europe right now is Chinese China built.
Speaker 4 (35:15):
So you know, it's happening, whether sooner.
Speaker 5 (35:18):
Or later, and I think, you know, the Gms and
Fords of the world are preparing for that.
Speaker 3 (35:23):
Great let's talk some numbers. Moments ago you alluded to,
you know, let's talk about the future a little bit.
Twenty thirty US market, what's your sense of the breakout
between say, let's just say three categories gasoline, pH V, E, REV,
and then pure electric percentages.
Speaker 5 (35:41):
Yeah, so you threw me because they normally lump evs
and the pfs together. But I would say, you know,
between fifteen and twenty percent, and that's that's on the
low side. I mean, I think if you look at
most consulting companies, they probably have a third by then.
I don't think it gets there, but I think somewhere
in that fifteen to twenty percent range.
Speaker 3 (36:00):
Twenty percent from roughly ten ish now yep, yeah, so
doubling by in the next five years to about.
Speaker 5 (36:08):
Temple Yeah, yeah, I think I could see that with
the amount of Again, the Trump administration is a big curveball, right,
I mean, a lot of that, the funding for charging,
a lot of that is out the door, but some
of it's not. And he's, you know, he's trying to
put a pause on that and we'll see how that
shakes out. There's there's some moment, there's some inertia that
(36:28):
there though, right the companies all had these plans to
put out EV's, they're going to put them out. I think,
you know, I just think that there right now. The
evs are a bit of a political you know, political story,
right and and there's some stigma attached to.
Speaker 4 (36:42):
Them in certain in certain circles.
Speaker 5 (36:44):
This whole had the headwinds that Tesla has right now
in terms of brand image.
Speaker 4 (36:48):
Probably won't help in terms of numbers. It may help some.
Speaker 5 (36:52):
Of the competitors though, But I do think you start
to get the more of these that get into the market,
you start to get a bit of a normalization. You know,
your neighbor has one, you get into one, and finally
drive it. You know, I think we saw the same
thing with hybrids. And granted hybrids aren't aren't a sort
of lifestyle change that owning an electric is. But you know,
(37:12):
twenty five years ago driving a Prius was like you know,
there was a stigma attached to that too, and now
hybrids are all over the place.
Speaker 3 (37:18):
Yes, So in your twenty percent, it gets complicated within
the industry because everyone has different definition. The Chinese have
yet another you know, an EVS. Would you in that
twenty percent that would include beevs, pure electrics and PHVs,
but hybrids would be separate or are they also in
that hybrid separate?
Speaker 5 (37:37):
Yeah, hybrid separate from that, that's just a pure EVS
and plug in hybrids, which today is a very small
part of the market. It's a couple percentage points if
that in the US. I know it's much bigger in China.
Speaker 3 (37:48):
Mike, you did an amazing job. What I really like
about your book is is one it's very well written,
but more importantly, you bring people into the scene, like
you're in the room with these characters, and you've got
great direct quotes from people. I was reading a review
just this week. It said it's a deeply enjoyable and
smart book that uses masterful storytelling to capture the expansion
(38:13):
dynamism of this transition to electric So very well done.
I will have in your coverage in your writing of
the book, who was the single character that surprised you
the most or impressed you the most?
Speaker 5 (38:26):
Well, I appreciate the kind words, and you know, I
think that's what I was trying to do from the beginning,
is like, it can be a dense topic or you know,
there's a lot going on, it's kind of a big
topic to write about, and so I think I discovered
pretty early on that you need to have interesting people
to tell the story. Right, And I think I'll just
say that one of the subjects I enjoyed talking with
(38:48):
the most and I enjoyed writing his story most was
Jack Jack Chang, who's was a long time Forward executive
and later at Chrysler and eventually became one of the
founders of Neo. He told the story He's just he's
a character, and he told the story of being approached
at the Shanghai Auto Show, I think in twenty fifteen
(39:09):
by William Lee, who was who was founding Neo at
the time, or a company that would later become known
as Neo, and he wanted you know, he was William
Lee's basically a tech guy, and he wanted some help
in the actual nuts and bolts of the car business.
Speaker 4 (39:22):
And you know, Jack was like very skeptical at first.
Speaker 5 (39:26):
And then he you know, he kind of enlisted his
his son was a consultant back in the States and like,
tell me, you know, let me know what these guys
are all about. And pretty quickly his son realized that
I think Ali Baba or ten Cent maybe it was,
was one of one of the big investors.
Speaker 4 (39:40):
And so yet, you know, Dad, you better do this
pretty quick.
Speaker 5 (39:42):
And so he he joined and he kind of talked
about how difficult it was to get supplier because he
was mostly kind of in supply chain his whole career purchasing,
and the difficulty in getting suppliers to raise their hand
and actually, you know, go into business with the China.
Speaker 4 (40:00):
He's unproven Chinese startup. You know. He just had a
really really fun story to tell.
Speaker 5 (40:04):
But there was a lot of people like that in
the book who kind of toiled in the US auto market,
you know, hoping to see electrics catch on or battery
tech kind of take the next step, and it just
never did. And then they ended up getting an opportunity
in China, and I thought that was kind of interesting,
as you know, they had to jump to China to
(40:24):
actually see this thing come to fruition.
Speaker 3 (40:26):
Great guy, Jack Chang, wonderful career, knows, China knows, the
US knows. Taiwan. Always always enjoyable to talk to you
in the good mood. I think he has a band, Yeah.
Speaker 4 (40:40):
Yeah, yeah, that was one of the ways he tried
to get the suppliers.
Speaker 5 (40:44):
He threw a big party and played Guns and Roses
and Guns and Roses song on his guitar.
Speaker 4 (40:49):
So yeah, He's got a lot of fun stories.
Speaker 3 (40:51):
On the topic of storytelling. We're going to close with
one prediction from you, and that has to do with baseball.
Who will win the World Series twenty twenty five?
Speaker 5 (41:01):
Okay, well, I'm gonna go with my heart on this one.
The Chicago Cubs, I think, are you know we had
our moment in the sun in twenty sixteen, finally broke
the curse. It's been a little quiet since then, but
they came close to making the playoffs last year. I
think they're predicted to make it this year. And I'm
seeing a run for the North Siders.
Speaker 3 (41:20):
That's National League. What about American League? You got anybody
out front in the American League that's not that are
not the New York Yankees.
Speaker 5 (41:28):
You know, I'm gonna I'm gonna stay Homer here and
go with the Detroit Tiger.
Speaker 3 (41:33):
Right, That's what I wanted to hear.
Speaker 4 (41:34):
Right, I think I saw.
Speaker 5 (41:35):
I think I saw that there are ten to one
to actually when the when the pennant, So you know
they've got a legitimate shot.
Speaker 4 (41:42):
They surprised people in the playoffs last year.
Speaker 5 (41:44):
So yeah, a Detroit Chicago World Series would be a
ton of fun in this part of the country.
Speaker 3 (41:50):
Let's have it. Twenty twenty October twenty twenty five. Mike Calias,
author Inevitable Inside the messy, unstoppable Transition to Electric Vehicles.
Thank you so much for being with me today. Congratulations
on the book, and it's going to be fascinating to
see how this whole thing plays out in particular the
United States.
Speaker 4 (42:09):
Yeah, for sure, Thanks so much, Michael. I had a
great time talking to you.
Speaker 3 (42:13):
All right, I'll see you around all right, appreciate it here.
Bye bye. So ladies and gentlemen, what is your verdict?
Are EV's inevitable?
Speaker 4 (42:31):
Hmmm?
Speaker 3 (42:31):
Kind of depends on where you live, doesn't it. I mean,
think about it. There's that old Silicon Valley saying the
future is already here. It's just unevenly distributed. Ask a
person in China about EV's and they'd say, definitely. One
of two new car sales this year in the world's
largest market will be EV's. Shift over to Europe, and
someone in Paris would say probably, because almost a quarter
(42:55):
of new car sales this year will be EV's across Europe.
But then shift back over the United States and people
would be on the fence, saying I really don't know evs.
Maybe maybe not. Why Well, up until now EV's have
had a hard time getting traction in the United States.
They account for about ten percent of total sales. Okay,
(43:18):
that's the picture globally, so we have highly uneven distribution
of demand for evs. How is Detroit doing? Mister Calias
tells us that GM has probably the most ambitious vision
for evs and batteries. Ford has deployed a crack team
here in California to develop a really cool set of
new products that will be low cost and competitive not
(43:41):
only the United States but worldwide. And then we have
Stillantis that is by and large content with powering their
cars with E revs and PHVs at least for the
time being. So GM out front for catching up fast,
Stillantis biding its time. Second take away way, Detroit to
(44:01):
be competitive has to break through on two fronts. One, costs.
The Chinese are able to manufacture an EV at twenty
five percent lower costs than the Detroit three. Two, and
this may be the more important one. Detroit has yet
to deliver a super compelling EV that will win the
hearts and minds of consumers, not only here in the
(44:23):
United States, but globally so. Tesla's done it with the
Model Y sells really well in Europe, in China and
here in the US. Where is that secret superpower product
from gm Ford or Stillantis. When it comes to evs,
we're not just talking about getting the battery range right
or having charging be convenient, but something that turns heads
(44:46):
and makes people around your neighborhood say, Wow, I'd love
to have one of those. Yeah, A hints of that
with the Ford Lightning, hints of that with a Machi. Genuinely,
we're not there yet. We're not in the realm of Wow.
Detroit crushed it. That's what I'm looking for, That's what
I'm hoping for in the coming years. Tremendous conversation with
(45:09):
mister Calias today. Always great to have you with us.
Thank you so much for joining. I am Michael Dunn
and this is the Driving with Done podcast.
Speaker 2 (45:20):
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. Thank you for joining this
episode of the Driving with Done podcast. To connect with
Michael Dunn, visit Doninsights dot com or find Michael on
(45:40):
x or LinkedIn This is the Driving With Done podcast
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