The Road Ahead: Sustainable Vehicles Today and in the Future – Part 2 – transcript

Ideas to Innovation

Voiceover: The Ideas To Innovation Podcast. From Clarivate.

Joan: Hello and welcome to part 2 of this Ideas to Innovation episode where we’ve been taking a closer look at Electric Vehicle technology; In part 1 we touched on the current EV marketplace, the role they will hopefully play in a cleaner environment and what improvements need to be made to the tech before we can realistically make the transition from fossil fuel. Today we’ll continue that discussion, with Ed White, Head of analytics, Robert Redding, Director of Government and Content Strategy, Brian King, Head of Policy and Advocacy, and David Marques, Principal consultant, Litigation Products and Strategy…welcome back one and all.

Joan: Now automakers have traditionally relied on footfall to car showrooms. Although we’re slowly seeing a semblance of normality returning to our daily lives in business society and so on, digital will play a big role today and in the future, clearly, we’re all-embracing that, but what does this mean for electric vehicles and traditional automakers alike? Brian, if I can involve you in this discussion, I would love your take on the importance of carmakers dealerships, auto retailers having digital capabilities.

Brian: Sure Joan. This has been really a terrific shift in the industry to behold as of late. In the US at least there’s a company that has car vending machines, where you can buy a vehicle on an app or on their website and show up. There’s this massive tower in the sky with a built-in forklift that will rise up, pick up your car, and bring it down to the ground for you and off you go.

This type of purchasing vehicles online is brand new. It’ll really be fascinating to see what this does to the auto sales market. I think a very small percentage of vehicles are purchased this way today, but another company, and we’ll talk about Tesla quite a bit during this podcast because in a conversation around electric vehicles, you can’t help it.

They’ve pioneered the online purchasing of vehicles to the extent that for a while, they were accepting Bitcoin for payment for vehicles. I think they may have turned around on that, but you never know what will happen next when you’re talking about Tesla. If you look at the domain name space around car dealerships and how people interact with the dealership online, there’s no real consistent strategy, it seems, to how brands are going to market in the domain namespace.

I’d encourage listeners to look at the URL or the domain name for their local car dealership. I think you’ll be surprised that it’s not something simplified in uniform, like the name of your city dot the name of your car brand .com as you might expect. These domain names for dealerships were often purchased independently of the brand and so brands can struggle to control the user experience on these websites. That I think is a real opportunity for innovation in how auto manufacturing brands go to market and reach consumers online.

There’s so much autonomy given to these dealerships and how they go to market. The use of the family name, who owns the local dealership, for example, really creates inconsistent URL structures and therefore challenges for brands in online brand protection in that space, let alone being able to reach consumers consistently.

Those consumers, as you mentioned, are shifting early days still, I think, but seem to be shifting away from going to the dealership and interacting with a salesperson, which is an experience everyone loves, I’ll say sarcastically to an online experience, which seems to be strongly preferred by millennials and younger generations. We’ll see a shift there.

One trend that I’ve seen that I find really interesting is the Spanish auto manufacturer, SEAT, actually registered city names, they have their own dotBrand TLD. They own .SEAT to the right of the dot and we’ll talk a bit more about dotBrand, top-level domains, or TLDs later. They’ve done what I think a lot of car manufacturers might see as the future for how they go to market online. In that SEAT has registered a lot of city name domain names to the left of the dot, and then SEAT to the right of the dot. Things like Barcelona.SEAT or Madrid.SEAT where you can get to your local dealership just by typing in the name of the town you’re looking for .SEAT and while I think they’re–

Joan: That’s impressive, isn’t it?

David: It is. It really is. It’s a great use of technology. There’s some really other really innovative other uses of dotBrand TLDs that we’ll talk about but I think that we’re on the cusp of real innovation around how auto manufacturing brands reach consumers online, that’s for sure.

Joan: Sure now, this competition in the electric vehicle space is really heating up. Now, as you said, Tesla is probably the most well-known electric car brand. What other brands are appearing that are beginning to sort of challenge Tesla, and they’re making a mark. Brian, could you respond to that?

Brian: Sure, I think some of my colleagues mentioned some of the geographies that are producing innovation in this space, certainly in Korea, with Hyundai and Kia, both having strong electric vehicles. The usual suspects as well that innovate in the electric vehicle space, like Toyota, who is famous for innovating the hybrid Prius, I think will do quite a bit here from the US. As the American presenter here, I’ll say that two things I’ve observed recently have been really interesting.

One is that General Motors took out a 92-second Superbowl ad, the ad was 90 seconds long, which is probably about $15 million worth of ad spend for one spot with Will Ferrell, which highlighted the fact that Norway had a greater production of electric vehicles than the US. The famous tagline, it’s a hilarious sketch, I’d encourage folks to check it out. The hilarious– the tagline was “No way Norway” and kind of challenged the Norwegians and kind of a call to arms for the US to produce more electric vehicles and put General Motors behind that initiative. GM, I think, will help drive the market here in the US.

Another interesting observation of late is that President Biden just toured the Ford factory, and he himself actually test drove the new electric Ford F-150 and got a lot of publicity for that. The reason why that is particularly impactful, I think in the US, is that the Ford F-150 pickup is the top-selling vehicle make and model consistently every year, I think for the last 20 years, the Ford F-150 is the top vehicle sold here in the US. To have a fully electric version of that Ford F-150 available on the market, I think is really going to help drive mainstream adoption rather than historically electric vehicles here have looked weird, they’ve really highlighted the fact that they’re electric vehicles, there’s always something blue about the logo. I think if you have the option to have an electric version of a regular vehicle, we might say, I think that’s really going to help drive adoption.

Joan: Yes, I hear that. I think that’s a really interesting point. I think Ed’s probably got something to say to that.

Ed: Yes, in terms of the brands that are in this space from an innovation perspective, Brian’s captured the big ones. There’s a couple of others that we mentioned earlier, like, for example, Volvo-Geely Polestar Brand which is almost explicitly, a kind of Tesla challenger, but we need to be clear, almost every car brand you can think of is here, Renault, BMW, Volkswagen, Audi, Jaguar, Land Rover, Suzuki, Mazda, they’re all kind of there. An interesting point that’s sort of less obvious from a consumer perspective, is that a really important part of the development of electric vehicles is taking place in the supply chain and there are some very big companies and brands here.

These are the companies that produce the batteries, the materials in those batteries, the motors, the electronics, and these are companies like DENSO, Bosch, [unintelligible 00:44:50], BYD, ZF, [unintelligible 00:44:51]. Many people may not have heard of these firms, except for maybe when you’re looking at a bill in your car dealership for new parts that have been put in your car. You may see them on the battery, for example.

Then there’s another aspect, which I think is really fascinating, which is that there’s a wider technology enabling ecosystem of firms that have big businesses supplying the suppliers, or they have wide market footprints in their technology, and the automotive industry is just one of those. These are companies that you’ve heard of: Samsung, LG, Panasonic, Hitachi, Toshiba. We know these companies from their consumer electronics divisions, but they also have very large B2B footprints as well and they’re an important part of the EV story.

Joan: Thank you for that, Ed.

Now, traditional automakers enjoyed a long period of dominance and growth as we all know, and we’ve sort of touched on. How are they faring against what we might call these new upstarts because you’ve all thrown names at me that I can honestly say, I have never heard of. Ed, what would you say to that?

Ed: It’s interesting, actually, these companies, technologically they’re faring very well. The three strongest on a sort of per invention basis, the three strongest car manufacturer portfolios in the EV space, are Ford, Tata Motors, which you may not have heard of, but they own Jaguar Land Rover, so Jaguar Land Rover, and General Motors. Those are the three, on average, strongest pound for pound– pound portfolios, and these are big, old, traditional automotive companies. Tesla is actually really interesting to look at from a patent perspective because they operate a very light-touch intellectual property registration policy, as well as an open-source model. They don’t file very often but when they do, their patents are actually free to use with some sort of terms and conditions around that.

From another perspective, when we run our models, there’s three key technology areas that are placed squarely in what we call our bleeding-edge quadrant, so immature speculative. Charging, we’ve discussed several times, but also things like the things Brian was talking around; around payments and transaction technology as it relates to EVs. Then driver aids and the actual interior of the vehicle, the dashboard. If you think about Tesla, as a brand, as a car company, the Bitcoin versus Dogecoin debate, what a model 3 looks like inside with that big touchscreen.

Even the Tesla Supercharger brand, its fast-charging network. Robert’s point around moving into potentially restaurant brands. Clearly, the company is very, very focused on that bleeding edge and that’s what separates Tesla out. That isn’t to say that the more traditional car companies are “behind” they just focus differently. The motors, the power trains, the chassis, the things that make mass-produced cars work reliably. That’s a really big deal, and that’s where they are.

Joan: Yes and obviously at an affordable price for the consumer. Robert, if I might just throw that question to you. How are what we might consider the old trad makers faring against the new whippersnapper upstarts?

Robert: Well, I think they’re faring surprisingly well, and I think they’ve got a number of advantages. Not the least being the fact that they have established brands. Electric cars don’t have to be entirely new creations. The whole concept of hybrid means that traditional manufacturers can start with an existing brand, a well-known car, a top seller, like the Golf, for example, Volkswagen Golf, and they can modify that car so that it’s a hybrid vehicle. It can look the same from the outside. It has the name that consumers recognize that they associate with quality and reliability and perhaps there’s an existing market for people who will just always buy a new Golf, for example, regardless of what’s underneath the hood. I think they have that advantage. They’re able to sell a car that people already know and understand.

I think there’s another, more subtle thing, that’s taken place around about the same time, and that is that if this disruption occurred maybe a generation before, it could have been far more threatening to existing manufacturers because if you think about it, you go back a generation, most major manufacturers only had a small number of different models. BMW might sell three different passenger cars and a couple of different station wagon versions; they only had five or six models. Each model was pretty much designed to last around about 10 years. They’d tinker with it, they’d update it each year, put some new pieces of plastic on the outside, but essentially, that model would last 10 years or more. There wasn’t a lot of change. There wasn’t a lot of flexibility in the production process because it took a long time to bring a new model to market.

Now, of course, if you look at major manufacturers, they’ve got SUVs and crossovers, and coupés. Mercedes and BMW each have probably 20 or 30 different cars in their product range. It’s just so much easier and faster and cheaper to bring out a new model to set up a factory to produce it and to sell it. I think that’s happened at the same time as they’ve needed to innovate in the face of competition. The next generation that’s going to come out from the major manufacturers are going to be completely new models. Mercedes has just announced this year that they’re releasing totally new models which are only going to be electric vehicles.

The other thing about an electric vehicle is a battery can be anywhere. It doesn’t have to be in a certain space within the frame of a car, like a petrol engine that can be spread out. Yes, you’ve got to be careful in terms of safety and center of gravity and things but it means that the shape and the function of the car can be very, very different. Expect to see a lot of innovation in that space going forward. I think the traditional manufacturers, they’re going to hold onto a very large share of the market.

Joan: Now, I would like to circle back to the topic of sustainability. Sustainability is not just about the end product, surely it’s got to be at the heart of the business and a strategic imperative. How do you think companies in the electric vehicle ecosystem of faring in this respect? Are there any companies that truly stand out? David, may I ask you what you think about this?

David: I don’t want to disappoint our listeners who have heard the words Tesla a lot by now but I’m going to say Tesla one more time. One of the great concerns that you read frequently in the media and in the newspapers is the carbon footprint of manufacturing car batteries. It’s a very energy-consuming process. Apparently, there are many studies that try to measure that carbon footprint and they tend to– they do vary quite a bit but they usually tend to point to a heavy number and that’s usually a concern.

Tesla’s 2019 impact report, which I think was launched not that long ago, mentions a very– or a much lower number. I actually have the number written here. Of course, for me, I’m not a car engineer or an environmental engineer. For me, this number in just absolute terms means nothing. It’s 25 grams of CO2 equivalent per mile. They could say 400, for me it would be the same but apparently, 25 grams of CO2 equivalent per mile is way, way lower than the averages that were being considered in previous studies. Tesla has made great strides here in making the pollution that was coming from manufacturing car batteries lower than what the industry was expecting at large.

This, for me, is one of the major steps forwards when it comes to sustainability in the manufacturing of electric vehicles because it really was– one factor that people which were more focused on the carbon footprint of the entire vehicle and the way that it was built, it was one of those specific points that people were paying attention to. There are even, you can sometimes see some comparisons in the media saying, “Look you have this hybrid. If you take into account the manufacturing of the car batteries and the CO2 that is associated to it, then you don’t have that much savings compared to a hybrid car.” Perhaps you’ll have more in the future when the grid starts becoming greener but with this impact report from Tesla, it does reveal that they’re making great strides in that specific matter and that’s great.

Joan: Thank you, David. Thanks for that. Now, Ryan, if I can throw the same question to you?

Ryan: Sure, Joan. When we think about electric vehicles and sustainability, the United Nations has established sustainability goals. I think most people think about goal number seven which is affordable and clean energy. I also like to think about goal number nine which is industry innovation and infrastructure and a trend in tech we’ve seen really explode in recent years is connected devices and what we would call the internet of things.

That’s anything from smart refrigerators to toasters that are connected to the internet and can be controlled remotely. Things like thermostats in the home, light bulbs, and things of that nature. The fear from a security perspective is what can happen if a large-scale hacking of connected devices is used by a bad actor, adversarial state actor, or just anyone who wants to be, in general, a troublemaker. It’s a scary thought when we think about our home thermostats and our home refrigerators. It’s even scarier when you think about the ability to hack hundreds or thousands of half-ton pieces of metal that are capable of accelerating to 100 miles an hour down a highway and what that outcome could be if a connected fleet of vehicles were able to be compromised.

Joan: Gosh.

Ryan In the domain name space what we’ve seen– it’s a truly terrifying thought.

Joan: It’s Like a hideous scary movie, isn’t it?

Ryan: That’s right. It’s apocalyptic if you think about it. What we’ve seen is an increasing need for control and security around connected devices. Especially when those devices are going to be automobiles. What we’ve seen in the domain space is a real desire for automobile manufacturers to control the entire domain namespace and to use those dot brand domain names, like I mentioned dotSEAT. If you’re going to have VIN number.Brand registered as a domain name, companies want to control every aspect of that domain name and maximize the security protocols around that. The best way to do that is with a dotBrand TLD.

Ironically, although it wasn’t a criteria to be mentioned or to be included in our top 100 Best Protected Brands Report, every automobile manufacturer that was listed in that report also owned a dotBrand top-level domain. We’re seeing these automobile manufacturers take cybersecurity and online brand protection very seriously. I think that’s a trend that we’ll see continuing into the future when the next round of new gTLD opens up in the next ideally two to three years.

Joan: Sure. It sounds for all the reasons you outlined absolutely crucial. Robert, may I ask you what you think about the truly standout companies.

Robert: Sure. Has anyone mentioned Tesla yet?

Joan: [laughs] I think you deserve to mention Tesla.

Robert: I’ll just raise an extra point then. Sometimes there’s a misunderstanding around electric vehicles and sustainability because we have this idea that it’s not using petrol, therefore it’s good for the environment, but of course, you have to ask, “Where does electricity come from?”

Joan: Sure.

Robert: If we’re getting electricity through the grid and that’s connected to a power station that burns coal or gas to produce electricity, then really, we’re not making any difference whatsoever, we’re just moving things around the chain. I think there’s also a misunderstanding about Tesla because obviously, we think of them as a car company but equally, you get to think of them as an energy company. They spent a lot of time and a lot of money looking at energy, they obviously have a very big battery division. They also have a lot of effort going into sustainability around energy.

As an example, Brian mentioned earlier that Tesla was accepting Bitcoin for a little while. The reason they stopped accepting Bitcoin was they were concerned about the energy that goes into creating Bitcoin and keeping that system running, it’s extremely energy-intensive. Most of the energy that’s being used online to do that comes from fossil fuels, so tey stopped accepting Bitcoin. They’re looking at things like solar and other renewable sources as providing energy to make the electricity that goes into the charging network for cars. I think that’s an important thing that Tesla is doing that other car companies probably aren’t doing to the same degree because they’re only selling cars. They’re not selling energy as well.

Joan: Thank you for that. The Bitcoin issue, that would never have occurred to me, thank you for that; fascinating insights. Now, there are plenty of exciting electric vehicle innovations today at the prototype stage such as solar-powered electric vehicles. Rounding up today’s conversation, what is the one aspirational electric vehicle invention that you would love to see come to fruition in the next 10 years? David, may I ask you first? What would you love to see?

David: [chuckles] Well, that’s a difficult question to answer. To me, I don’t have a specific preference. I do know that what’s really important and would be a real game changer in my opinion from what I’ve read in this specific field is an increase in the energy density of batteries, right?

Joan: Yes

David: Because right now, there are so many applications that are currently not viable due to the sheer size and volume, and weight of batteries. Right?

Joan: Sure, sure.

David: You cannot fit a huge Tesla battery in your Mini Joan. I’m sorry about that.

Joan: No, I’d need a little truck following behind, wouldn’t I, with the battery on it?

David: Yes, so because of that, and Brian was also talking about the F-150, it seems that, for larger applications and for on these industrial applications, and I think that’s where you will see the most gains also in sustainability efforts, you really need the energy density of a battery to improve. Any strides in that direction would be great for both the industry, for adoption, and for the environment. That’s all I have to say.

Joan: Excellent, thank you for that. I’ve made a note of that and we’ll talk in 10 years and see where the increase in energy density is.

David: Definitely.

Joan: Thank you, David. Brian, may I ask you the same question?

Brian: Sure, Joan. For me, the answer is easy and it’s self-driving vehicles and to have that be legal and the technology be reliable. I want to take a nap and wake up when I’m there. I think that’s the future, we already have great strides in that technology today. I mentioned my wife drives a Toyota SUV to work every day, and it has technology that will keep you in the lane and will keep you a safe distance from the vehicle in front of you and that’s I think not even the most advanced driver assist technology on the market. I think we’re really not far off and in the next 10 years, I think to have that self-driving technology, that for me, is going to get me to buy an electric vehicle.

Joan: Excellent. Thank you for that Brian. Again I’m going to come back to you within 10 years and see where we’re at with the self-drive vehicle. Robert, may I ask you the same?

Robert: As I mentioned earlier, Joan, I don’t like spending four minutes putting petrol in the car. I don’t look forward to spending hours putting electricity into a car, right?

Joan: I see you’re a man with a very tight schedule here, aren’t you?

Robert: I’m a busy man, what can I say?

Joan: You are. Yes, you are.

Robert: What I would really love to see in terms of innovation is solar. Imagine that you have a car with solar panels integrated into the roof and other surfaces perhaps in a way that you don’t even know that they’re there. Solar technology that is so efficient that they can convert the energy and store it in such a way that you never have to top up or connect your vehicle, it’s always charged, it’s always ready to go. It’s got unlimited range and I don’t have to spend time connecting it to something to put energy into it.

Joan: That is a fantastic idea. I have to say, I’m with you on that. The idea of having to, as you say, sit somewhere and wait while the car is juiced up. It’s an irritating waste of one’s time. Whereas the solar, that would be perfect, wouldn’t it? What would happen, say, in less sunny countries, for example, if I lived in Reykjavik?

Robert: Well, I’ve just come back from Iceland actually, and for six months of the year you’ve only got sunshine. If you have a way of storing it, that’s the key because you’re not always going to have sunshine, you don’t always drive in the daytime, but if you’ve got an efficient storage system, and batteries aren’t particularly good at that right now, but if you did, then you can store the energy when you’re not using your car and the sun is shining so that it’s available for when the sun is not shining and you do want to use your car.

Joan: Excellent noted. Ed, finally, tell me what you think about this.

Ed: Yes, this is where I get to put my electronic engineering hat on, right?

Joan: [gasps] Come on.

Ed: Mine is actually the same as David’s and I think it has some overlap with yours as well, Robert, which is this solution to the energy density problem, how big the battery is, how much power is in the battery. That’s a potential switch from something that we’re all familiar with, which is the lithium-ion battery, it’s just like the one that’s in your smartphone, is also in your Nissan LEAF. Switching from that to aluminum-ion batteries or aluminum-ion, if you prefer. These potentially have two to three times the amount of energy in them for the same size, which means that for the same amount of battery capacity, you could put it in a box three times smaller, three times lighter. Or alternatively, you can have exactly the same size as it is today but the car would go three times as far. Aluminum is a lot more common on planet Earth than lithium is. It’s a lot more stable. It makes it cheaper. It’s a lot less harmful in terms of extraction. It’s a lot easier to recycle an end-of-its-life battery. That could make several of these tough thorny engineering problems we’ve discussed all the way through this go away really, really quickly.

The only downside is– because that sounds like a bit of a silver bullet. The downside is these are really tricky things right now. They are still in the laboratory, there is an enormous amount of technical challenge to overcome, but if it is able to be produced in a commercially viable way, it could be a complete game changer.

Joan: Excellent, Ed, Thank you. Ed White, Robert Reading, Brian King, and Davide Marrakech, you’ve all shone a light on the state of innovation in the electric vehicles industry and the problems innovators are trying to solve. What a dynamic and intriguing industry that promises to bring us evermore exciting innovations as the world continues to accelerate towards sustainable transportation.

Follow and listen to Ideas to Innovation, for engaging, informative, and inspirational content with insights you can use. Now available on Apple Podcasts, Google Podcasts, Spotify, and other podcast directories. Share, like, review, or join the conversation with your comments on Twitter, LinkedIn and Facebook by clicking on the share link. Thank you for joining us. Until next time, I’m Joan Walker. Goodbye.

Male Speaker: The Ideas to Innovation podcast from Clarivate.