Tesla Drop Standards! EVs Prop Up EU car sales? American Irrelevance?

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1:51Caesar:Hello and welcome back to another episode of The Pulse Podcast, the podcast where we delve into the life and death decade of the automotive industry. You're joined, as always, by myself, Imogen Bogle, and Dan Caesar, CEO of Fully Charged Show. Hi, Dan. How are you doing?

2:08Bhogal:I'm really well, thank you. It's not long since I saw you. I saw you in Southampton last week. I'm sure we'll come on to that. But how have you been?

2:15Caesar:yeah not bad i do you know what before this podcast i was like when we've seen each other recently when was it but when you're out and about all the time sort of all of the days kind of meld into each other um but yeah i've been good i went to paris last week to see fabrice camberlip to talk about their small car strategy europe's k car why they're still looking at hybrids um which was fabulous and then as you say we met in um a rather gloomy southampton it was a very very gray day but to see some exciting stuff so that was good

2:49Bhogal:how about you uh yes i mean i think i've been sort of getting my head down unfortunately when it comes to fully charged show and everything we do there is quite a lot of work to be done um i'm not saying that you do all the glamour bits but i mean certainly um in the engine room oh no i can't say that can i uh in the beating uh electric heart of uh everything electric and fully charged. There's a lot of work going on for our plans for this year, including our live shows, including all the episodes and podcasts and some other little projects as well that we're working on. So it's a busy time and just keeping up to date with the news of what's going on in the industry as well.

3:28Bhogal:So we can recount that here on the Pulse podcast, because it must be difficult if you're in the market really to keep up every day. There are new breaking stories.

3:39Caesar:yeah and you know what i find um that whenever i have a shoot day which is approximately three days a week and then i come back and i've obviously come back to my to my inbox and i'm like god you know it's been 24 hours and yet i feel so far behind so let alone people who are trying to decipher this industry we're literally paid to be on top of these things but for anyone who's observing it's it's an overwhelming space to to inhabit very very fast changing very uncertain

4:07Bhogal:but I'm sure we'll come on to some of that.

4:10Caesar:Well, we have three stories for you today. We're talking Tesla, controversially. We're talking EV sales and we're talking about a really interesting newsletter from Michael Dunn. So all of that to come but first a very quick advert break.

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4:52Caesar:Right, story number one. As ever, there is an actual headline and then there is a Dan Caesar headline, which you are affectionately known in-house as Captain Clickbait. And this one was good. I did have a little chuckle to myself. So you have written Tesla Drop Standards. Tell us more.

5:14Bhogal:Well, hopefully that got people intrigued. And you mentioned controversially when it comes to Tesla. We're not going to talk about anything too controversial today. We might get dragged into that, I suppose. We're actually going to talk about the cars because a lot of the noise over the last year or so has been about everything other than the cars. a changing business model. And I still have huge affection for Tesla Model 3 in particular. Tesla Model Y obviously sells very well too. And I drove one of those recently. I've probably done over half of my 350 ,000 electric miles in a Tesla Model 3.

5:49Bhogal:So I'm pretty au fait with that car. If I was going to create a Frankenstein's monster of all the EVs driven, quite a lot of tesla model three elements would make it into that frankenstein's uh monster i mean it really is it's a great car and it does some things really really exceptionally well and if i was asked has a car actually matched it yet one of the new evs i'm not so sure definitely in elements like for example last year i had the byd seal which i prefer the look of the BYD seal, especially the exterior look. I've driven stuff like the Renault 5, the IONIQ 5N from Hyundai. What a great car that is to drive, driven a lot of different cars.

6:36Bhogal:But for the total package, the Model 3 is extremely compelling. But they have basically removed or dropped their standard range from the Tesla Model 3. So if you just a quick refresh on the Tesla the model range as most of us see it has obviously been started with model s then went to model x then model 3 then model y i'm not going to mention the the cyber truck uh in this particular uh podcast but those were the four brand the four models the four uh the lineup from tesla and obviously s and x pretty much finishing so it's really about three and y and they are best sellers in many markets around the world.

7:18Bhogal:So clearly, they have been hugely successful. But where do they go from here? I think that is the key point. And they've taken the decision so far not to create a more affordable EV in the sense that we might have expected, which is to go for maybe a smaller entry-level model. But they've chosen to actually make the Model 3 and the Model Y more affordable to a wider swathe of people. And I can't help thinking that in the short term, that's quite clever. In the medium to long term, I do wonder if they have to produce something a bit more compact, more affordable still. But in the meantime, they have, as you know, because we were in Southampton, we went to the Tesla Center, a whole load of, a shipload of Teslas had arrived and were ready for collection.

8:11Bhogal:they've effectively now got a real-wheel drive model 3 and i believe a model y but it was the model 3 we were there to to see and talk about and it is a little bit more basic than the existing model 3 but it's barely noticeable and yet the price point is considerably lower so a huge amount more people now can get in a Model 3, can experience that and enjoy it. So, I think that is quite shrewd in the short to medium term, but I still think questions to ask in the longer term.

8:46Caesar:Well, I think just to put some numbers on it, we're talking in terms of cost. Let's see, I think I want to say£37 ,000. Railroad drive, yeah,£37 ,990, which, you know, let's be clear, that's not a cheap car, but it does certainly make the Tesla Model 3 that much more accessible to that many more people. And of course, we need to remember that so many people are accessing these on lease schemes or via salary sacrifice, and then things get super, super compelling. We're talking under£300 per month. And it's amazing because we used to have a Tesla Model 3, we then had a Model Y, but I've been out of a Tesla for maybe two and a half years.

9:30Caesar:and I haven't really driven in one. I don't know if that's been deliberate or not. But going back, getting into that car, I was like, it's just a Tesla. You really wouldn't know that it's a super basic spec. It feels like an incredibly normal part of the experience, which I do think is smart. And I think as a society, we've got so used to a world in which we expect new stuff and new models. And yet actually from a business perspective, it is far more savvy to do what they are doing.

10:00Bhogal:Yeah, I definitely was part of that clique that was saying, you know, want a more affordable EV, want a more affordable Tesla. I think that unlocks the mainstream. I think that's obviously where nature abhors a vacuum and China in particular is sort of moving into that space. But then again, having said that, Volkswagen Group are going to release the ID Polo and the ID One in due course. So there's more sort of smaller affordable cars coming. The market's moved a little bit because a lot of people prefer bigger cars now. the SUVification, the obesity epidemic of EVs and cars in general has been going on for a long period of time.

10:35Bhogal:So I think what they've done is very clever. And I think it would make people who thought, you know, a Tesla is unaffordable for them suddenly realize that actually it's a good option. I think at the lowest possible rate, which I believe is business contract hire, you can get into one for about£225 per month. Now, I think that's a 12-months down payment, 36-month term, 8 ,000 miles, but£225 for a Tesla. And then, of course, you're accessing that sort of cheaper, the ability to run a car much more cheaply because you're charging it at home potentially is pretty incredible. If you did the cost of driving electric sort of statistics on what that could save, it's pretty extraordinary.

11:27Bhogal:And then allied to the excellent supercharger network, it's really a powerful position. So as I say, I did come away from that thinking this car is hardly any different to Honor 3 as I've driven before. I was expecting when the press were labelling it as being more basic that it would be much more basic. But that really wasn't noticeable because it's still built around the same car, effectively. It's still built around the same software system. So that was really good. And for those of you listening, Imogen and I drove around her old stomping ground of Southampton with her pointing out memorable landmarks.

12:02Bhogal:And we were chatting about the car. But the car was kind of just an obtrusive part of that conversation. It just did exactly what it was supposed to do. It performed really well. it had all the kind of features I would expect. So I thought that was interesting. I think it's really hard nowadays to talk about Tesla without sort of polarizing opinion. But if you haven't got a strong opinion about its CEO or some of the other aspects of the business, I would say the cars are still phenomenal. And that's the reality of where we are. I'd also say that there's tons of misinformation about the EV transition in general, and Tesla probably suffers from that quite badly.

12:50Bhogal:And so people are looking very eagle-eyed at the sales statistics of EVs in general, but Tesla specifically, and how they are doing. And they have gone from having huge ambitions of selling something like 10 million EVs a year to a more sort of steady state of sort of best part of 2 million cars per annum. But every time there's a drop in their numbers, people are kind of shouting and hollering about it. So, for example, in January, the numbers were reported by a number of tabloids as being really, really low. But Tesla actually does their deliveries very differently. They actually have a big number of vehicles come into country at the end of each quarter.

13:37Bhogal:And so, logically, January figures are always quite low compared. And actually, that's not the way to measure them. So the reality is that they're actually holding up quite well, sales of Tesla 3s and Ys in the UK and elsewhere. And additionally, it's boom time. If you want to get a used, approved Tesla, it's incredibly compelling. So I think, you know, from our perspective, it's important to point out that these are still great cars and they're, you know, a great option amongst a plethora now of different EV options. But yeah, I mean, what is there to say? The car was just like a normal Tesla Model 3, but cheaper.

14:19Caesar:Yeah, exactly that. And Craig David, if you're listening, which I know you probably are, drove past Spring Hill Primary School, pointed that out, where him and I are both alumni of. So Mrs. Norman, if you're also listening, hello. But yeah, I think one thing I would say is that I'm sure you get asked the same questions from various friends and family members of, oh, I'm thinking about an EV. What should I buy? And is Tesla any good? And I think Teslas are good. I think they are good cars. You know what you're getting. You know they're going to be reliable. You know that they're going to work. And if people don't particularly care about cars, it's a great option.

14:59Caesar:But for me, they will always lack a little bit of, I shouldn't say what, a little bit of character. And obviously, you know, this is why cars are also come down to like being a totally emotional and irrational purchase. Because, you know, for For me, deserts don't have that character, but I will still say fantastic cars, and especially at that price point as well.

15:21Bhogal:I think that whole debate is do electric vehicles have as much character as combustion engine vehicles is quite an interesting one. I think it's rooted in our culture and our psychology in billions and billions of pounds worth of advertising to evoke certain feelings in us, which often revolve around the noise of the car, the smell. I think what Renault's done with its kind of retro-futuristic look at the Renault 5 is very clever because it opens up quite a broad audience potentially of petrol heads to electro heads and everything in between. I think what Tesla's done is it's created a market and a market which, you know, there's lots of other cars now that look quite like Tesla's.

16:09Bhogal:um i i personally i quite like the look of most new evs and so i i do i do like tesla but i take your point i mean there is now so much choice when we first started doing fully charged live as it was back in the day now everything electric uh shows around the world there was only literally 10 cars to to choose from now you're so spoiled for for choice um but yeah i'd certainly say I'm still waiting for a car to sort of make me think this is better than the Model 3. But there are plenty of cars that are right up against it now. It's fascinating to see that market change. So, yes, it's one of the cars I'd recommend, but I have the brilliant luxury now of when people say, which car should I get?

16:58Bhogal:What are you after? What shape? You know, what are your needs? And I can recommend often four or five different cars for each different person's requirement. And that's what I do now. And I often say, come and test drive them at Everything Electric shows as well, just to compare and contrast. But no, the market is transformed. And Tesla and now China have played a huge, huge role in that.

17:20Caesar:Oh, 100%. And I would say any car brands that are listening, if you'd like to gift me a Volvo EX60, I'll gladly take it off your hands. That's what I will say on my current personal preference of EVs. Shall we move to our second story?

17:39Bhogal:Let's.

18:17Bhogal:Well, we're going to talk about sales of cars, all power trains in Europe, and how sales of EVs are actually doing quite well. So obviously, the EU has been under pressure to kind of slightly dilute its zero emission vehicle ambitions. We even heard from one car exec in Europe who said that there's no natural demand for EVs. We've seen all sorts of headlines saying that the EV era is over. And every time I see something like that, I pull what remaining hair I have from my head because actually there are mountains and mountains and mountains of data that show actually that battery EVs are doing pretty well.

19:05Bhogal:Plug-in hybrid vehicles are doing pretty well. It's actually the rest of the market that is in decline. And so January sales figures from across Europe, which includes, by the way, Britain, Switzerland, Norway, and Iceland for the purpose of these figures, show that car sales are down 3.5%, but actually battery EV sales are up 14%. So my question is actually, are battery EVs the bright spot in a difficult marketplace? I think they are. Just because one American president doesn't like electrification, for example, we shouldn't all be swayed by that. That is the direction of travel. You can see it again in these sales figures.

19:54Bhogal:What's interesting is that petrol sales are down quite significantly. I'm talking here about pure petrol cars as opposed to mild hybrids, but actually more and more people are getting into a hybrid or actual electric vehicle of some sort. But actually, pure petrol sales were down, I think, 49 % in France, 30 % in Germany, as people move towards these electrified models. Now, I'm not having the electrified term. I really only believe that battery EVs are the only true electric vehicle. But I am quite happy to concede that cars with a plug are at least going in the right direction. They're getting people more comfortable with that mindset.

20:39Bhogal:But back onto the subject of what cars would you recommend? I would only ever recommend a battery EV to anyone who asked me. And I do huge mileage, so let's not let that be an excuse. So I think it's really, really interesting to see what's going on in the marketplace. BYD sales up by 165%. year on year, January to January. So they are making huge inroads. And Toyota are one of the biggest fallers. I'll leave that there.

21:07Caesar:So I'm just going to turn my head for one second to look at my bookshelf. I think it's up there somewhere, but there's a really good book, which I'd highly recommend to everyone in this audience called Good Data, Bad Data. It's written by a data scientist. And her whole sort of thing is that like, you know data is only valuable if you can understand its context and what it's being compared to and how it was measured and you know i think we've seen so many headlines that allude to there's no demand for evs like demand is declining but it's never given in the context of the overall car market irrespective of powertrain and so i just i just feel that journalists should be held to a higher account of if you're going to give a stat give its context and give the counter or at least, yeah, you know, something to that effect.

21:58Caesar:Because it's just annoying, especially in this world of so much misinformation that if you have a stat in there on its own, you believe that it's a trustworthy source. And this is where you actually understand the nuance.

22:09Bhogal:Yeah. I'm guilty here in picking up a story, which is about January. You know, we often see stories that, you know, are about one month and a negative. And we say that's too short a window to make any judgment. You're just using one month's figures to support your argument, whether that's right or wrong. So I'm guilty of that here, I suppose. But I am very much all over the trend lines in all of the major and some of the minor markets in the world. And generally, the trend line is battery EVs are on the up and up. Maybe not at the pace that some would have predicted or would have liked, but they are up.