Slowdown, what Slowdown? The EV Revolution is Just Starting

Transcript

Dr Andy Palmer

I think those car companies that are spending time lobbying to delay are wrong, because all they're doing is giving extra time to the Chinese to dominate the market. / Back in 2014 I think, I was one of the guys that stood up and said, 'by 2023 we'll have autonomous cars.' How wrong was I? You don't need to convince 80% of the consuming public anymore whether EV is a good idea, because EV is an economic solution to your travels. It doesn't really matter whether it's a gasoline, a diesel or electric, they all drive incredibly well, but this one is just so much cheaper.

Michael Liebreich

Hello, I'm Michael Liebreich, and this is Cleaning Up. For over 10 years now, I've been talking about the transformation of the world's transport system from almost exclusively internal combustion, based on fossil fuels, to electrified. One man, probably more than anyone else in the world, has been not just an observer, an analyst, a commentator on that trend, but he's been actually helping to drive it. Dr Andy Palmer was COO of Nissan Motor Corporation, where he launched the Nissan Leaf, the first ever mass-market electric vehicle. He then went on to be CEO of Aston Martin, where he tried to switch that august sports-car maker into an electric vehicle manufacturer — unsuccessfully, it must be said. He's gone on to have a range of executive and non-executive roles all around the transformation of transportation, many of them around batteries and battery electric vehicles. Please welcome Andy Palmer to Cleaning Up.

So Dr Palmer, Andy, thank you so much for joining us here today on Cleaning Up.

Looking forward to this. It's been a little while coming, but I'm really looking forward to the chat.

Two busy guys, it's been hard getting us in the same place, well, in different places at the same time. Let's start the way we always do, with you saying in your own words who you are and what you do, the short version, because you've done so much.

I'm a car guy. That's the easy way to describe it. 45 years in the car industry, left school at 15, started an apprenticeship at 16, and have worked my way through automotive products, clutch and brake supplier, into Austin Rover, and the many guises of Austin Rover. Then 23 years in Nissan, 10 years in the UK, and 13 years in Japan. Then, of course, back to the UK to be the CEO of Aston Martin. And of late, I was the CEO of Switch. Basically anything to do with the journey towards net zero. So Switch was electric busses. I then did PodPoint, which is chargers. I was CEO. And I'm now the executive chair of a company called Brill, which is a spin out of Oxford University, and a plethora of non-executive duties, mainly around, as I say, the journey to zero — battery technology in particular, but anything that helps the industry to reach that net-zero target.

So you describe yourself as a car guy, I noticed that you didn't say you're a piston head. And that then became clear, as you completed the picture, that you've been on the journey, really, from piston head to, I don't know, a battery head? What's the equivalent?

I like anything on wheels, basically. That includes motorcycles. But during my tenure in Nissan, I conceived with the team and delivered the Nissan Leaf. And that started a journey for me. Originally, it was a journey of how to tackle the Toyota Prius, but it turned into more a career goal to lead the industry through to originally zero emissions, and then eventually to this net-zero goal. And it's really been a major journey for me. And, you know, I don't really distinguish between petrol, diesel or electric, they have to be good cars. But of course, what does matter is what you emit, and electric, to me, seems the most likely means of reaching that net-zero goal.

And you have been not just, whether it's a piston head, but a car guy, or things on wheels. But you have always been right up at the front end of innovation. And I think you're being quite modest, starting as an apprentice, but ending up with a PhD, and having been involved in so much of the cutting edge innovation. I've heard you described as the godfather of the Nissan Leaf, which, of course is, in a way, the godfather of the modern EV industry. So you've really been up at the messy end, right?

I think that journey through not really enjoying school very much, wanting to get into the car industry, and then going through education and going through a very rapid rise in my career has allowed me to be quite innovative and brave. And people have trusted in me to deliver some really interesting cars. So within the context of being an engineer, and my PhD is in engineering, I've actually probably been more successful in what the industry calls product planning, or planning and conceiving, interesting vehicles, like the Kashkai, like the Valkyrie, like the DBX. So within what I call my automotive babies, I think there's some, probably the most obvious, one of which is the Nissan Leaf. But you know, one of my other favorites is the van, the Nissan eNV-200. I thoroughly enjoyed developing that vehicle. But there are these babies, and for whatever reason, I've been allowed to be quite brave. And then, therefore, I think had the opportunity to put some fairly groundbreaking cars into the market, both gasoline, diesel and electric.

So Andy, we're approximately the same age, and when I grew up, my father was a truck mechanic, truck and bus mechanic, and so I used to go and when he was doing, how can I put this, informal economy work on the weekend, dropping gearboxes out of things and replacing clutches with me, sort of rinsing off components in benzene, and doing all sorts of things you're not allowed to do anymore. That kind of grounding, I think it's really, really important. We did a whole episode on how the climate challenge is an engineering challenge, but in a way, what we're still undervaluing is, I think, that kind of almost like the technicians, the people who can actually roll up their sleeves and do things. And that's just missing from so much of the debate and discussion. You get the politicians and the economists and the policy wonks, but somebody's got to actually build the stuff physically.

I think the key thing about an engineer is you end up making something. You end up manufacturing something. And I think the closer you can get to understanding how you do that, the better you are as an engineer, and you're right. One of the things that I learned living in Japan was how much they value the technician. And you know the importance of, for example, being able to make your own tools in a car company, which the British car industry lost a long, long time ago. But if you look behind me, I recreated my workshop that I learned my trade in. And you can see the chimney out of a forge just behind, over my left shoulder. So I still value drawing, the drawing board, which is downstairs, but also value the machining. There's welding capability down there, there's turning, there's milling, there's drilling, and there's measuring. So I can do pretty much anything that you can do in a workshop just downstairs. The only thing I don't have, because I'm of that age, is I don't have a CAD system and I don't have a 3D printer yet.

That's so funny. So you must be enjoying working with Henry Lawson, my EcoPragma Capital colleague, who has got all the same kit, I believe. And I was the last generation at Cambridge that really did a lot of drawing, physically, we had rows and rows — you'll be familiar — rows and rows of desks with those inclined drawing boards and solving things like Coriolis acceleration equations using a drawing board. And the year after, they just restructured the whole syllabus, and everything was done on a computer, and none of these kids know how to do it properly anymore.

Well, Michael, you, me and Adrian Newey, so we all use drawing boards, and there you go. You've seen Adrian Newey's latest move...

That's right, forever young, he's now got a new job, hasn't he? And Adrian Newey, for those listening in, he's the legendary Formula One designer who's won every accolade and every championship and whatever that you can imagine.

And has recently moved to a very, it seems, very interesting job in Aston Martin in the Formula One race team. So he's got a big job ahead of him.

So Andy, let's get back to Aston Martin. But I want to dive in on the Nissan Leaf, because it was such an iconic vehicle. Obviously, Tesla got a lot of attention for its Sportster and then the S, but the Nissan LEAF — and you said something just in what you mentioned about it earlier, you said zero emissions and now net zero — and I'm thinking that's the difference between tailpipe emissions and whole system net zero. Is that right? And so where did it start? Talk us through that project?

It didn't start out as a super green project. It started out as Nissan getting its backside kicked by the Toyota Prius. And among the things I was responsible for at Nissan, I was responsible for sales and marketing. And my sales guys were, particularly the Japanese ones, the Japanese market, were screaming that we didn't have a product that could compete with the Prius, and they wanted to have their Nissan Prius. I was absolutely convinced that copying Toyota was the wrong thing to do. Toyota is so mighty, just making another me too product I felt was the wrong thing to do. And ultimately, I was proven right, because Honda made the Insight, and that was a big failure. So my point of view was we needed to come at it a different way, and rather than going hybrid, why didn't we go full electric? So that's the start of the discussion. Now, once you make that decision, and that was a hard decision to land, but fortunately, I had the support of my then boss, now the infamous Carlos Ghosn, but he did support me to be very fair to him, and got behind the project, and we were able to turn it then into this target and communication tool that was originally what we called Zero Well to Wheel. You don't hear that expression very often anymore, but Well to Wheel is essentially net zero. So it meant that from the point that you're dragging it, the energy, out of the ground, all the way through to running and the manufacturing of the vehicle, basically you consumed no CO2. And we entered into lots of lots and lots of MOUs with various people. But what was clear, I mean, this was 15 years ago, the world wasn't ready for it. It's simply, we couldn't pull all the plays together. An example, you know, carbon free steel. We couldn't pull all of those strings together, so we ended up controlling what we could control, which was the vehicle itself, and essentially removing the tailpipe, so the vehicle itself emitted zero. Not strictly true, because obviously you emit tire dust and what have you. But essentially there's no tailpipe emissions. And that was the first step. Then, as I say, in 2014, I went off to Aston Martin and played around with a bit of electric there as well, particularly with the Rapid EV, but in coming out of Aston Martin, I wanted to continue that journey, in my mind, the failure of that Well to Wheel ambition, and pick that back up. And I guess that marks out what I'm doing now in the twilight of my career.

This isn't the twilight of your career. My mother is 93. She still runs her antiques business online and so on. We've got plenty of time... we have decades and decades. Don't talk like that. Don't talk like that. But let's come back to, so you launched the Nissan LEAF, and it wasn't a full net zero, but it was the first mainstream fully electric vehicle. I think we can say that.

And a dedicated... I think the point was, it was a dedicated EV. There wasn't a gasoline equivalent. It was a unique platform.

It was architected as an EV. And that's really important, because you I've seen things where you have EVs that have still got prop shaft tunnels where they don't need them and you know, just using the engine compartment for batteries and not putting them under the skateboard design and so on. So this was a proper EV.

Yes, and it had the ambition of being affordable. I mean, still expensive, but it was basically to sit competitively in the C segment, the VW Golf segment, and you couldn't do that by compromising. Now, every other EV that had gone before, of course, was a compromise. Whether you talk about the Tesla Sportster to the Roadster, or you talk about the Mitsubishi i-MiEV, basically, Leaf was the first one to come with a unique platform and try to create an affordable vehicle. And of course, it was incredibly successful as an EV, outsold everybody else added together. And of course, was launched a long time before the Tesla S. It wasn't the first EV, EVs have been around since the turn of the century, but it was really the first in terms of that lithium ion mass production EVs.

We're going to call it the Model T of EVs. How about that? That's probably over-egging it a bit, but let's give you credit. You're very generous with your time here today, so we'll give you credit. But that first model, I think it had a 70 mile range. Is that right? Very limited batteries?

It was homologated at something like over 100 but realistically, it was a 24-kilowatt hour battery. And in terms of real world uses, one of my bugbears, actually, is the real world usage and homologated usages are two very different figures, and I've actually been pushing the new government to introduce the equivalent of a Monroney label, which gives you the correct mileage in various scenarios. The development of the Nissan Leaf taught me that. It also taught me, by the way, the importance of having a source of state of health of the battery. And whilst that made the state of health of the battery very transparent to the consumer, it also, of course, causes your other problems, because the consumer can actually see how their battery is ageing. I think ultimately, though, that's also really important and helps quash the fear that somehow batteries don't last very long.

So given that all of these cars have now got SCADA systems, they've all got telematics, I can't understand why we bother with tests at all. Once there are vehicles out there in the market, they should be providing data to the manufacturer, who should have to anonymize, aggregate and stick it back out into the public domain. And you know, you can adjust for the road, you know, we know what roads they're on, and you can adjust it for whether it was steep or mountainous or flat or hot, or whatever, or cold. But people should have real data. I think anything else, frankly, is just an attempt to hoodwink people, in my view.

I agree, as you say, all of these cars are connected. They've all got the data. The label that I proposed for every new car, basically, is, if you will, driving in urban, driving on a motorway, driving in mixed, both new battery and old battery, low temperature and high temperature. So you can look at the range of conditions that you would be using your car in and say, 'Well, I'm going to get 250 miles range and that's suitable, or I'm only going to get 120 miles, and that's not suitable.' So you help the consumer make an informed choice.

Absolutely, absolutely, I can feel a campaign in the works. Those vehicles that were on the road when you launched, which year did you launch?

2010 in Japan, 2011 in Europe.

Okay, and do you know if any of those vehicles, there must be some still on the road, how are the batteries doing? What was the degradation? Because there was a worry that it would be 4% per year, so 14 years later, very poor performance. But is that what you actually see? Do you keep in touch in any way? Do you track it?

I've got a 2011 Nissan LEAF on my drive just out there. So whilst I can see that the state of health has declined over time, I can still say that it's got on the range monitor, it says it can do 70 miles. It can't do 70 miles. It's more like 50. But I also know, because I've been involved in reconditioning the batteries. It's usually one or two cells that need rebalancing, and you can restore them quite well, and with more modern chemistries, then the degradation is almost insignificant. It's there, but it's not what we thought it would be. You know, we all thought that you'd reach 80% of the battery capacity in seven years. And in reality, it's much better than that.

That's right. So I've got a chart that I use quite often when I'm speaking, because you get people who say, 'Oh, you have to replace the battery after seven years, and it costs so much, and all these reasons why you couldn't possibly do electric transportation.' And it's not just that the cost has come down by whatever it is, 90% in the last 12 years or so. It. Also that that same space in the Nissan LEAF now doesn't have a 20 kilowatt hour battery. I don't know what they're selling them at, but we've now got a much bigger battery and much lower degradation, so it's really transforming.

Well, look, when I first sourced the battery for the Nissan Leaf, first of all, there wasn't a source, so we had to establish a new company, which eventually became Envision. Before that it was AESC. Before that, it was a Nissan-NEC joint venture. But the cost of the batteries then and this would be probably 2008, they were over $1,000 per kilowatt hour. Now you think about that today, you know you can buy batteries out of China for $60 or $70 per kilowatt hour, so the cost of batteries has reduced. The cycle capability has significantly increased, therefore the durability is increased. And as you say, the energy density has grown enormously. And I mean to kill another myth, significantly less vehicle fires with batteries than there are with normal gasoline and diesel engines. So many myths to be busted by people that have reasons not to want to go down the route of electric cars.

And there was, we had another one, another episode of Cleaning Up with Hans Eric Melin, who's probably the world's expert on what actually happens to these batteries after they're used. There's this figure of 5% being recycled, which is complete nonsense. The number is already more than 90%, so not only do they last longer, but they also then actually do get recycled. And so, there's sort of good news on every front, but it's not well understood at all.

As you know, European regulation, EU regulation, says that in future, 70% of the lithium and over 90% of the nickel, cobalt, etc., needs to be recycled. And so there's a whole industry sprouting up around that ability to recycle. And the great thing about things like lithium is there's almost no degradation. So recycle it, reuse it.

That industry's biggest problem, in fact, is that the batteries are not coming through to be recycled. So that industry globally is operating, Hans Eric was saying, at about 25% capacity, and the people who've invested in it are losing their shirts. Not because you can't recycle, but because you don't need to, because the batteries last.

The batteries are lasting longer than they were envisaged, and then they're getting used in second life, just to store energy out of wind farms, etc, and it's not until third life that you have the possibility to do that recycling.

Where are you on vehicle-to-grid? Because that's an interesting one. When the batteries were incredibly expensive and every cycle degraded them and probably cost you 20, 30, 40 bucks of degradation, I was saying, forget it. Smart charging, charging at a time that's good for the grid, yes, but vehicle to grid, forget it. But I've come round to thinking we will be doing vehicle-to-grid. Are you there? Or do you disagree?

Yeah, I think it's the next big step. Now, just a little bit of history. I was working on electric cars, even as far back as 2001-2002, and I was conscious of a lot of the research that was being done in Nissan's advanced engineering. When we had, in 2011, the so-called Great Earthquake in Tokyo, and it knocked out, as you know, the Fukushima facility, we found a lot of people that survived the tsunami were dying in hospitals because they didn't have electricity. And so we raced the technology of vehicle-to-grid, what was eventually called Leaf to Home, out of the lab. And my house in Japan was, I believe, the very first house to get Leaf to Home. And then that was the ability to run your house after an earthquake, two or three rooms, off what was then a 24 kilowatt hour battery. So I'd been working on that technology, and we launched, I think, it was in 2012 when we launched that. As I come around again, if I think about where we are with electric vehicles today, there are probably two big impediments to the rollout. Number one is the cost of the vehicle. They're more expensive than many people can afford, and that's because it's not because the car companies are making lots of money, but because the batteries are still relatively expensive. And so if you can downsize the battery for people in a B segment or an A segment car, the battery represents about 40% of the cost of the vehicle. So you can significantly reduce the cost of the vehicle by downsizing the size of the battery. But to make that happen, you've got to have a charging network everywhere, and we don't have that today. We only have, I think, 70,000 public charges in the United Kingdom right now, so you've got to grow that significantly. And we can talk about public policy around that, if you like. The other thing that I think is important is the running cost. And the breakthrough in the running cost, I think, and I've established a company called Palmer Energy to look at this, but it's basically the ability to run your electric car for nothing. So it becomes incomparable with gasoline or diesel, and it's not 60p versus 80p or whatever. It's basically 80p versus zero. And you do that because the challenge, I think conceptually, is to give every consumer 50 miles of free electricity. And the way of doing that, as you know, is basically either through utilising your battery and exporting, let's say, 10% of your energy back to the grid, or by having a home battery, or actually a combination of both. And the ability then to charge those batteries overnight when it's 7 to 10 pence, and export some part of that energy back to the grid when it's 70 or 80p, means, essentially, you can give the consumer a certain amount of electricity for zero. That, I think, is the breakthrough. Michael, we'll remember our parents probably when diesel started to be introduced. I know my father spent half a day at the dining room table calculating what the payback was on moving across to a diesel engine rather than a gasoline engine, and coming to the conclusion it was X number of years. And you make that calculation really easy if your energy is zero. You're only doing 20 or 30 miles a day, and it costs you zero. And you can buy an electric car for more or less the same price as an internal combustion engine. You don't need to convince 80% of the consuming public anymore whether EV is a good idea, because EV is an economic solution to your travels. It doesn't really matter whether it's a gasoline, a diesel or electric, they all drive incredibly well, but this one is just so much cheaper. And I think we move the dialog beyond simply these things on net zero, because there's so many doubters and, frankly, idiots that want to argue that point, but you just move into the economic argument. You say it is so much cheaper to run an electric car.

Think about diesels back then, and all the criticism about them being tractors and smelly or noisy. It's not that dissimilar to the rhetoric you hear from certain quarters about dismissing EVs as dreadful vehicles and that you shouldn't be driving them. So history has a tendency to repeat itself. But the reality is, as I say, EVs drive very nicely. They do everything that a petrol car will do. But if you go down the route of the economic argument, then I think it wins every time.

I agree with that. I guess one question for you, are you now in the ultimately everything goes EV camp? The all-land transportation goes EV camp? Has your journey got all the way there? Because in 2023 there was an article, June 2023, there was an article by Rowan Atkinson, saying, 'These things are not environmental, whatever.' And there was an outrage. There was a furore from the EV camp. And then you weighed in publicly and said, 'Why is everybody so damn partisan. We can have all three.' So we can have EVs, we can have hydrogen and we can have e-fuels. And were you really genuinely arguing for all of those solutions, or was it the partisanship that really triggered you?

There's a couple of things. One is that I think that the partisanship, as you call it, the tribes, I think, is actually quite damaging. You know, the EV tribe that says EVs are brilliant, you should all absolutely have one, it should be mandatory, and the petrol diesel crowd that says, you should never go near an EV. I saw a tweet this morning saying that these things are much more of an environmental disaster, clearly wrong. I think both camps are wrong. So I think getting to a position of balanced argument is really important as part of the education process. I'm also like you, I'm an engineer, right? Which means that we tend to believe in Darwinism, so you don't just dismiss one technology or the other. You let them play. And there's technologies that we don't know about today that in five years could be mainstream. So I'm a great believer in allowing technology to win, rather than legislate in a direction. I truly believe that, basically, probably all private vehicles will eventually be electric. That's my personal belief. But I do believe that there might be room for combustion of hydrogen or synthetic fuels around the periphery, for example, maybe in heavy goods vehicles, maybe in vintage cars, maybe in supercars, and probably in aerospace. But I'm okay to be wrong, as long as the market is deciding. Ultimately, the customer, the consumer, will decide. And as I say, what I dislike is legislation, as we have in the UK, that basically says it must be EV. When we look across the channel, the EU is more open minded, it allows hydrogen to be considered as a zero emission fuel, whether it ever will be, as I say, the consumer will decide.

We're going to take a short break right there. Don't go anywhere. We'll be back with Dr Andy Palmer talking about the electrification of transportation.

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One of the reasons why this debate is so kind of all over the place, I think, is that a lot of our decision makers have such poor STEM skills. Because what you're arguing, in a sense, you're arguing two different things. You're arguing that in batteries or electric you say, well, we're going to invent and it might be capacitors or inroad charging, or it might be better chemistries, but the fuel cell you've kind of written off. And then a non-technical person will go "a-ha", and I get this all the time. "Oh Michael, you would have said that solar couldn't get cheap," because I have this whole thing about how cheap hydrogen can get. And the problem is on a hydrogen plant, green hydrogen is a chemical plant, whereas solar is material science and manufacturing, series manufacturing. But if you don't have a STEM background, you just think that miracles can happen with equal likelihood, whether they break the laws of thermodynamics or economics or not.

And because I was minded to look, I did a bit of research into the number of our politicians that have STEM qualification: 6%. You really struggle to land the technical argument in that environment, particularly when the previous government, probably Boris onwards, stopped talking to industry, and we know his opinion of business. But when that stopped, then almost every ability to put a rational argument forward disappeared. And I think maybe that's the difference between somewhere like Japan or somewhere like Norway, or somewhere like China, where there is room for proper dialog with proper expertise. And engineers can argue amongst themselves, but we'll not argue about the thermodynamic efficiency or the specific thermal capacity of fuel. You know, those are given. Perhaps the debate will be the speed of development.

I had a conversation with the energy advisor to a former chancellor. I'm not going to say which one, because that would point the finger at who it was. This was somebody out of investment banking, incredibly bright. I had an hour's conversation. He then requested another conversation, and I was 45 minutes in, and he said, "Michael, Michael, I've just got to stop you there, what is a heat pump?" I kid you not. But sadly, I was also in Japan, and you know, Japan for all the engineers at METI, this legendary and you worked in Japan, you know what a kind of oversized influence they've had rebuilding Japan's economy post World War Two and guiding their industrial strategy. Despite that, they want to do synthetic methane for heating. They want to burn ammonia for electricity, and they want to do fuel-cell vehicles. So they may have some STEM-educated policymakers, but their policy sure as hell doesn't show it.

Yeah, Japan's an interesting place. And you know, it's dominated by Toyota. And I think what happened there was, you know, the big fight is always Nissan versus Toyota. Toyota was first in hybrids, it won that. Nissan came back with the electric vehicle. It was inconceivable that the Toyota would follow, and so they went down the hydrogen route, and drove Japanese industry down that route. Now Japan can work in isolation. I mean, it's proven that with things like the kei-cars. But even if you look at Japan now, it's forced back to the EV table. There's rapid redevelopment: Honda, Toyota are rapidly introducing EVs. Not necessarily completely given up on hydrogen vehicles, but they acknowledge that small passenger cars have to be electric. So again, it comes back, however you want to lay it out, but for me, it comes back to that Darwinism. Darwinism persuaded Toyota to change its allegiance, it's basically a move towards an electric future.

Do you think Toyota's really on an electric track? I mean they did announce a bunch of models, but they still endlessly put out PR from top levels of the company about hydrogen, and they've now got their joint venture with BMW. I mean, does BMW seriously think that they're going to launch a fuel cell BMW and sell anything in double digit number of units. Are they serious? Or have they just screwed up their model cycle, and they've got nothing to talk about? What on earth is going on with both of those companies?

I think there's the issue of not losing face, which is very, very important in a Japanese company. But as I say, they can spend money there if they wish, but they'll be dragged down. And the inevitable is that small passenger cars will be electric.

Will they survive? I mean, because everybody assumes Toyota is too big to fail. But big companies, and in fact, even big Japanese companies, have failed. And to me, it feels existential. When we grew up, one car in every three worldwide manufactured was Japanese. That's now one in 12 — I think it's one in 12. And you know, China has gone from the sixth biggest exporter of vehicles to the biggest in three years. I think this is existential for Toyota. Do they think that?

Well, look, it will be existential for some of the traditional manufacturers. Whether Toyota is there or not, we can debate. I think Toyota will pivot when they ultimately have no other choices, but there are other companies — not least my old house — that aren't pivoting quickly enough. I think those car companies that are spending time lobbying to delay are wrong, because all they're doing is giving extra time to the Chinese to dominate the market. I think what was true earlier this week, Carlos Tavares, my old colleague, now at Stellantis, has said basically, "We stick with the targets that have been set. We move the company." And essentially, he's using the same Darwinism argument, which is, we're ready, we're going. And he's absolutely right, because if you don't go, the Chinese will step in, the Chinese will dominate because they have economies of scale. And one can argue, yes, they have government assistance, but they can make those affordable vehicles, they can use the over capacity of battery making that they have in their country, they can bring the prices down, and people will buy Chinese vehicles because they're affordable the home battery that we talked about will make them affordable to run, and it will be a domination in that sector, unless the traditional car companies respond. Some of them won't, and they will go out of business.

But Tavares himself has, over the years, made some very equivocal statements about electricity. So is he now 100%? Because to me, I agree with your diagnosis, it is basically switch or die, and some of them will not make it. Some of them simply will not make it because the time scales to build up the supply chains and so on are such that if you're not fast enough, then the laws of physics apply to your company, right?

I guess Carlos Tavares, he was behind. He's an excellent racing driver, by the way. So you know, he understands the importance of bluffing and racing. So you know he's been bluffing because his company probably wasn't ready. It's now ready, and he's ready to race, and he's right. He's absolutely spot on. And hopefully, as a result, many of the brands of Stellantis will survive.

Talk to me about your move then from Nissan, working with Carlos Ghosn. And then you got a call from Aston Martin. Do you wish you'd stayed? Because, of course, what happened to Ghosn, obviously very famously and publicly, his career blew up spectacularly. Do you regret that you're not there? Or talk us through what happened?

To quote, Oasis, 'Don't Look Back in Anger.' But you make decisions in your career, good and bad. I was number two, I suppose, at Nissan, but it was very clear that the coming storm was very clear. The debate between the French government and the Japanese government, Renault potentially taking over Nissan. Ghosn basically made a statement a couple of times in public that he expected that the future CEO of Nissan had to be Japanese, and the future CEO of Renault had to be French, and I had harboured an ambition since I was 20 years old, stupid and ridiculous ambition, that I wanted to be the CEO of a car company. Extremely arrogant, I know, but that was nevertheless what had driven me all of those years. And essentially Ghosn, turned, pivoted on his own. He'd always promoted this meritocracy, that you could get there because you were good enough, and the fact that he said the colour of the passport mattered, it mattered to me. At the same time, by pure coincidence, Aston approached me, it was the Investindustrial, the investors in Aston, and said, 'Would you like to be a CEO of a car company?' And the obvious answer was, absolutely yes. It's Aston Martin. It's in a place called Gaydon, which is next to where I went to school in Kineton. And it just seemed to be stars aligning. I thought about going from a car company that was making millions of cars to a car company that was making, I think, at the time, 3,000 cars a year. But I also, again arrogantly, believed that I had earned the tools to fix Aston once and for all. I think I'm still the only CEO that has ever turned a profit out of Aston, actually, but the the ability to go in, work with a traditional brand, learn a whole load of new skill sets, not least around light weighting of cars, which, of course, is important as we look forward. And recreate the traditional front-engine sports cars of Aston, but then also bring the DBX and the Valkyrie, two cars which I think transform the company. Certainly, most of Aston's sales today are the DBX. To create the Valkyrie, which is, by the way, a hybrid, but create, if you will, I think one bookend of my career, the Leaf being the other bookend. So I don't regret it at all. But in 2020, of course, when Covid came, Lawrence Stroll had stepped in as the new owner. It seemed to be right to move and I was able to move forward and create a company called Switch, which developed the electric double decker bus in London and in Dubai... Oh, sorry, in Mumbai. So, you know, there's always steps in front of you. And as I say, I think the key is, don't look back in regret. Actually, each step of my career has been a learning experience.

Although there's an element of, you know, you started that little segment by saying, 'Don't Look Back in Anger,' which implies that you could have been angry about the way things turned out. Because, there's an alternative sort of interpretation that you came in and you were offered a free hand — presumably, that's one of the things that an incoming CEO usually kind of works out, am I just going to be running errands, or am I going to be running a company? And you developed a quite high profile Project: Project Phoenix. You developed an electric Aston Martin. You had James Bond lined up as customer number one, which is pretty good brand recognition there. And then the whole thing really did go pear shaped. And, when you say, it's a hybrid, yeah, but it's a, it's not, it's not even a plug-in hybrid. It's a nothing hybrid. That's just an efficient petrol car. So, you know, yes, you've done so you revitalised their internal combustion product range, which is good, but really you got, you got ground up and spat out by the system, didn't you?

I mean, look, I gave them the option of an electric vehicle. They ultimately decided not to go down that route. We were essentially forced to IPO, the company, which was, you know... the history around that is an interesting one. I learned a lot, by the way, but it was also a pretty difficult year as a CEO. You carry the can, irrespective of the back history. And I've never talked about the back history of that IPO, I don't think it's appropriate. But, you know, it meant that my tenure, rightly, came to an end. And I prefer to look back on that period fondly. I enjoyed working with the brand. The brand is amazing. I think the cars that were produced there were amazing. I look back with regret that Lagonda isn't there as an EV brand. I think it would have been a marvelous foil to Rolls Royce and Bentley, if it had existed, but it doesn't. I took those learnings on, particularly those lightweighting and aerodynamic learnings. I took them on, and I'm applying them now in the businesses that I work on. And I know, so thanks to you, Michael, but I know so much more about the venture capital, the debt markets, the equity markets, as a result of that experience of Aston and I'm able to work with companies now to help them turn around, you know, working with Brill Power in Oxford and helping them to mature into a really important part of the electric industry. That's born out of that experience for Aston.

And I've had in my career a number of upsets or discontinuities. And I've always come out and I've landed on my feet. And so I do hear you on that Absolutely. When did you move on? What was the date when you left Aston Martin?

June 2020.

Okay.

Just launched the DBX, so I had the privilege of at least getting the first DBX off the production line. And then it was time to move.

So in November 2020, there was a report produced by an operation called Clarendon Communications. And it was this sort of glossy thing that said EVs are really quite dirty, and the answer could well be hydrogen, or it could be synthetic fuels and it had a forward by your local MP, in whose constituency the Aston Martin factory fell. And a bunch of us tried to work out who Clarendon Communications is, and how much they know about the energy systems and so on. And it turned out, with a little bit of sleuthing, it turned out that it was run by somebody called Rebecca Stevens, and the the Director of Government Relations at Aston Martin at the time was a guy called James Stevens. And I thought this was an enormous coincidence, so I did a bit of digging, and found that they lived at the same address. And it turns out that allegedly, Robert Bosch in Germany had funded a sock puppet marketing company to put this report out, presumably as part of the tapestry of companies trying to slow down the transition because their own product lineup is not yet in... they're not ready to do the Tavares, right? I've bluffed enough now I go. So they're still in the bluffing and delaying mode is, I think, how it came out.

I remember the furore. Fortunately, I wasn't there anymore.

Excellent. That's why I checked what year you moved on. Because somebody's head should have rolled, and I don't think they did roll, because that sort of stuff... that's straight out of the Exxon predatory delay playbook that we still see in the UK gas heating industry, frankly, today, and I take very badly to.

Yeah. Look, transparency. If you want to educate the market, transparency is, of course, it's really important. I come right the way back to the start of this podcast, and the importance of making the consumer aware of everything, and getting rid of a lot of the myths that exist and are created from both tribes. to

I like to think that you left, and it was very clear that the electric stuff was being shelved. And at that point, they kicked off this Clarendon Communications wheeze, and then I caught them. But that's not the only near touch point. There is another one, actually, with Switch. I was on the board of Transport for London, and I was pushing very hard for electric buses. There was a point back in, I think, 201617, where we had 100 of them, and Shenzhen had 16,500 and I was saying, "It's over, we should electrify all of London's buses. People are dying of air pollution. We should just go, go, go and demand that the franchises go electric." And I was deputy chair of the environment panel of the board, so I should have been quite an influential voice. Management didn't want to do it. They were using hydrogen as a way of delaying. So they were talking about their hydrogen buses that they had, at the time, been given by the EU. But they also said, and this was the head of Surface Transport, there was a rogue called Leon Daniels. And he said, it is impossible to do an electric double decker. And this was in one of my panel meetings, and I said, "pardon my French, but cobblers, of course you could." And "no, no, completely impossible." And within a few months, there was an announcement that together with Switch and BYD, perhaps, I'm not sure...

Yeah, ADL probably. ADL and BYD had a collaboration. Switch was born out of Optare and Ashok Leyland, and Right Bus, I guess, are the three major players in the UK. But there is, right at the very top of the pile of vehicles that make most sense to electrify, buses are at the top of the pile. It basically does the same journey every day. You know exactly how far it has to go, and you can put the appropriate amount of charge in, and you can do it. And it varies very little, you know, you put the battery in, it's big batteries, and they work. They're just perfect. I can't think of a better work-cycle for a vehicle than an electric bus, frankly speaking.

I agree. And it's always mystified me then that, when Jo Bamford with Ryze Hydrogen and Right Bus, you know, talking about how the busses are the obvious sort of starting point for hydrogen, and it's always mystified me that he doesn't get sort of thrown out of the room immediately, because it's so obvious. And you know what I was doing from the board of TfL was saying, 'Look, if these bus companies need to get more power into their depots or find out where locally, they could charge these busses, we should be helping with that, but that's how the mayor should be dramatically and rapidly decarbonizing the bus fleet.' We've still only got, I think, 1,300 busses out of 8,000 that are electric. Despite the fact that the buses drive around with adverts saying that they're 100% low emissions, actually, it's still not true. I find that absolutely astonishing.

And I think at one moment there was an initiative: Boris Busses, actually, and it was supposed to transform, I think, 4,000 vehicles within about 18 months. And it never happened. It was another sort of rhetoric, it made great headlines for a day, and then never happened. And the consequence was it put, actually, the bus makers into a big problem, because nobody was ordering buses, because they were all expecting them to get incentives to move towards electric. The incentives weren't forthcoming, and in consequence, nobody built any buses for a long while. So it was actually very damaging to business, and of course, slowed down that whole transition. But we come again, back to the start. The whole idea that your bus station is electrified and you've got storage batteries on site to allow you to reduce the cost of electricity is all part of that transformation.

I want to talk about some of the trends. You've talked a little bit about the companies that you're currently involved with, so let's take that as read. You know, all things electrification, we take as read. But there are some other things I'd love to get your views on quickly. So what about self-driving cars or robo taxis? Are we going to see that, or is that just a problem that's always a little bit too hard to solve?

I think we'll see some forms of autonomous driving, but in the context of safety systems, the idea that we can reach level five autonomy ubiquitously is not going to happen in my lifetime, and I'm not planning on dying anytime soon. But you know that is a step too far. Autonomy in a geo-fenced area is probably possible. Certainly, the idea that your car can intervene in an emergency, and the use of AI on cars is very interesting. But you know, back in 2014 I think I was one of the guys that stood up and said, 'by 2023, will have autonomous cars.' How wrong was I? And as I say, the bar is too high. Likewise, you remember people talked about, I think it was CASE, an acronym called CASE, and one of those was car sharing. Again, the move towards car sharing is probably fake as well. In reality, yes, you have the likes of Uber, and they're important, but people still like their car. What I think is important, however, is integrated transportation. So the idea that you can walk, that you can use your electric scooter, that it integrates into your car, that your car can take you to a car park to a pre-assigned car parking space. You catch the electric train. Electric trains drop you at the electric bus. The bus takes you 50 meters from your office, and you use your scooters. That is all integrated. I think that's well within scope that we ease the carbon footprint, basically, of travel to and from wherever you're going. I think that probably replaces what we said was car share, that AI is an important part of that, that your journey is possible to be shared across various platforms. But technologically, clearly, there's a lot of work. And when I look at batteries, for example, I work in three key companies, but essentially, I look at the chemistry, I look at the control, and I look at the cooling, the three C's, as I call it. And in each of those there's breakthroughs which are really important in terms of making that journey to net zero better, easier and more sustainable.

So I stood up in 2016 and said I did not think that we would be in self-driving cars. And in fact, I've got a number of bets with people. One bet was somebody who said that they would be in a self-driving car reading a newspaper, driving across London by 2025. And at the time I was on the board of Transport for London. I said you're wrong for three reasons: One, the tech won't work. Two, where the hell are you going to get a newspaper in 2025. And three, at this point, I'm the regulator. But I hear you on the end to end. I also just went to Japan, and I took public transport. Had to change trains two or three times to get to the hotel with no stress at all. Previously, no way. And that was all to do with the apps and the availability of the connected apps. I guess one question on that, though, is I'm sure like me, you're reading all about generative AI, machine learning. Is there a chance that two old farts of our age will be wrong footed, because this time it's different?

I suppose. I hope that that's true, but I doubt it. The viewpoint to look about, I think, particularly on autonomous vehicles, is your ability to drive in somewhere like Delhi, where you not only have the rules of the road, but you have not the rules of the road. And the iterations of potential solutions for a given problem are almost infinite, and that's where human intervention is therefore necessary. So in 2016 it was possible for me to take a Nissan Leaf from my car parking space in Yokohama and go all the way to the test track some four hours later without touching the wheel. It was possible. However, there would inevitably be something along one of the journeys where you had to intervene. And that's the problem, is that you can't cover all eventualities. And if safety is really important, right? That's the point, why we do it. I think you can get to a level four, a level four where you may have to intervene, but I don't think that you can get to a level five. However, Michael, I'd love to be wrong.

So just to recap the levels so, level three, you have to be sort of alert all the time to jump in. Level four, you've got big chunks of journeys where you really don't have to. Level five is where you just get rid of the steering wheel and, you know, you no longer have it.

Simply said, level three is eyes on the road. Level four is eyes off the road, right?

And a question for you. Level three. Is it ever safe to sell a level three car? Never mind whether you call it full self driving or autopilot, let's set that absurdity aside. Is it ever safe to have a driver and say, you know, you have to be ready to jump in for hours and hours and hours in all road circumstances, but you're not doing anything?

Look, I famously said at both Nissan and Aston that we wouldn't introduce level three. So you have advanced level two, but you don't imply that the system is capable of driving itself. You don't call it autopilot or whatever. These are level two systems. They're sophisticated level two systems. I personally don't advocate for level three, but I do advocate for level four if you can get there. And the point of level four is that if there is an issue, for example, your car has a problem in the fast lane of a motorway, that it's capable of pulling over and safely parking up, as opposed to just beeping at you and telling you to take over again.

My personal view is that level three is tantamount to corporate manslaughter. It is systemically unsafe. And anybody who's, you know, the Air Force and people who've done human factors analysis will absolutely confirm that. Final question, then on autonomy. Do you buy the argument that says, 'As soon as it is overall safer than humans, society should and will be prepared to switch to it'?

So I think you have to be almost 100% sure that you won't cause a fatality when you're allowing computers to essentially replace the human. The human is naturally fallible, but computers have to be infallible. That's the principle that the industry has worked on forever. Basically, we create FMEAs and FTAs that try to basically eliminate the possibility of failure. You can't introduce your technology knowing that it's fundamentally flawed.

So it will only happen when we can simultaneously switch to, in a sense, airline safety on the roads, rather than just a bit better road safety on the roads, which we all know is very unsafe.

Yeah. I mean, basically the original direction of autonomous driving at Nissan was actually very clearly parked under a policy of zero fatalities. And unless you can answer that question, which is, 'how do you reach zero fatalities on the road?' then I don't think that you can say that you've reached an autonomous vehicle.

Fascinating. Thank you so much. Insightful, enjoyable, and I very much look forward to continuing on some of those rabbit holes that we managed to avoid, mainly, but let's do that over a beer or a glass of wine in person at some point in the near future. And it's been a pleasure.

Sounds very good, Michael, it's a pleasure.

So that was Dr Andy Palmer, COO of Nissan, where he launched the Nissan leaf, the first mass market EV in the world. Former CEO of Aston Martin and who now holds a range of non-exec and executive roles, all related to the electrification of transportation. As always, we'll provide links in the notes to the resources that we mentioned during the conversation. So that's my write up of the Aston-gate sock puppet research report scandal. That's Andy's public intervention in the wake of Rowan Atkinson's hit job on EVs. That's episode 175, the first episode of this season with Greg Jackson, who talks about how homeowners can benefit from low and negatively-priced electricity to charge their EVs. Also obviously a link to Andy's bio and materials on his work with Nissan, Aston Martin and since. My thanks as always to the team behind the scenes and please join us this time next week for another episode of Cleaning Up.

Cleaning Up is brought to you by members of our new Leadership Circle. So that is Actis, EcoPragma Capital, Eurelectric, Gilardini Foundation, KKR, National Grid, Octopus Energy, Quadrature Climate Foundation and Wärtsilä. For more information on the Leadership Circle and to find out how to become a member, please visit cleaningup.live, that’s cleaningup.live If you’re enjoying Cleaning Up, please make sure you subscribe on YoutuBe or your favourite podcast platform, and leave us a review, that really helps other people to find us. Please recommend Cleaning Up to your friends and colleagues and sign up for our free newsletter at cleaninguppod.susbtack.com. That’s cleaninguppod.susbtack.com.

Slowdown, what Slowdown? The EV Revolution is Just Starting | Ep178: Dr Andy Palmer

Michael Liebreich

Andy Palmer

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