What does KEIR's CHINA 'TRIP' mean for UK automotive?' Glut Instinct? Biofools?

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1:08Hello 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. I'm joined, of course, by Dan Caesar, CEO of Fully Charged Show, and myself Imogen Vogel one of the presenters and producers here on the Everything Electric show I've really mixed naming there and I'm going to blame having been slightly discombobulated by the wind for my very fluffy intro but Dan tell us how are you how are you doing? I'm really good you've been out filming overseas aren't you not too far away but out in the cold and the wind I'm just at home today which is a real nice treat I was in Birmingham yesterday I'm traveling next week but actually i'm glad to be at home catching up with work admin and life admin and all those good things well i am reporting live from a holiday inn express in antwerp um where you're right we've been filming with a company called windrows who honestly i can't wait for the episode to come out because it's it's pretty extraordinary um in the past four years they're only four years old and they've developed this incredible you know tesla semi like rival hgb and It's pretty fab.

2:19And yesterday we were with a company called Coolbrook in Eindhoven who are doing, let me get this right. They are producing something called a rotodynamic heater, which is a form of turbo machinery to decarbonize high temperature industrial processes over a thousand degrees C using shock waves. So there you go. Wow. Okay. That's got me intrigued. I mean, it's amazing, isn't it? I don't even know sometimes what you're doing day to day, which is great. I get these great surprises, but, you know, maybe I should be more on top of the detail. But that sounds amazing. I can't wait to see both those episodes.

2:56Well, we could have actually been skiving and that could have been totally made up. But no, well, little controversial segments that I'll just sort of sprinkle in here. We were filming with Coolbrook, who are looking at electrification of high temperature industrial processes. but in order to capture them they have their pilot line facility at a petrochemical plant wow we were justified in the episode but i was like i didn't think that we would ever be here under the fully charged show umbrella okay that is uh that's quite a juxtaposition i would say yeah yeah but um no it was really cool and definitely um was a real test of my brain But you've had a busy week.

3:39What have you been up to? Yes, it's been a busy week. I've actually just come back from Birmingham. I've been on the 24th floor of the Shoesmith's office overlooking the city for a partner meeting for Electric Vehicles UK, where we had the great and the good from the EV industry there, including car makers and wider stakeholders across the industry, just talking about how we're going to accelerate EV uptake in Westminster and the wider world over the coming 12 months. And that's been really, really fun for us to found that. I said then it was quite nice for Robert Llewellyn to let me found something for a change.

4:15But actually now I have a team, a CEO and a team, very capable group who are going to lead that forward. So I'm still involved, but it's not going to be quite such a rigorous task for me now. But yeah, From our perspective, to influence MPs, to get them in EVs, to influence the wider public, it really is necessary, I think, to have an organization that really champions the cars themselves. That is our biggest asset. We get obsessed with the edge case. We've led with our chin, I would say, as an industry. But the cars are now so amazing. That is what we should lead with. And that's the intention going forward through education and experiences like test drives.

4:55now I saw that you posted a picture from that event yesterday on LinkedIn and I was like bloody hell it's sort of it's incredible when you look at the team that now sits behind EVUK it's an incredible team Tanya's obviously awesome um Andy Palmer is the chair whenever you have Andy Palmer whenever one has Andy Palmer in attendance he's always going to say something incredibly wise and sage and make everyone feel calm but urgent uh so it's also it's awesome it's incredibly impressive and I was sad to miss out on the event yesterday I have to say. He did. The team's fantastic. The team is almost entirely female apart from one Ben who is a very fun very very talented individual and Andy and Andy is like you say he's amazing and I was reflecting actually that I've had the great privilege to work with Andy.

5:47He's the chair of EVUK. I've had the great privilege to work with our very own Robert Llewellyn and the great privilege to work with Quentin Wilson as well. So I've been kind of really, really lucky in that respect. They've kind of seen and done it all. They've been talking about EVs for many, many years. And it must be strange for them that now is, if not in the mainstream, very close to the mainstream. Whenever anyone new joins the EV industry, I'm always like, it's a nice group to be a part of, isn't it? And they're always like, yes, oh my gosh, everyone's so lovely. And even like the big cheeses are just so willing to chat and share their experiences and that's what happens when everyone's motivated by the same mission I suppose so yeah um yeah lovely lovely EVUK group and if anyone is listening and isn't subscribed to Ben's newsletter Trend is Your Friend then um check that out as well because it's we we often get a mention which is great and it is just a very useful newsletter as well yeah that's a very very good plug shall we get into our stories today because we have three They are all brilliant.

6:49We're talking biofuels, we're talking European automotive crisis, we're talking UK-China diplomatic trade relations. This episode is brought to you by Hongkouk. The Hongkouk Ion tyre is built exclusively for electric vehicles, engineered to deliver what EV drivers need most, confident grip, quietness, energy efficiency and long mileage. As the official tyre partner of Formula E, Hongkong proves its EV technology is at the highest level of performance and brings that same innovation to every ion tyre on the road. Should we start with story one? Yes, biofools or biofuels as they're technically termed.

7:31I think it's really interesting that we've been in powertrain wars for a long, long time. To me now, you know, the successful powertrains are going to be battery electric, plug-in hybrid, extended range electric vehicles as well. I think things like mild hybrids are going to go away over time. Petrol is going to go away over time. Some people might be shouting heresy as they listen to this, and diesel is obviously already on steep decline. There's been lots of thoughts about what would replace fossil fuel-based combustion and people have mooted hydrogen for a long time that has absolutely gone nowhere in fact it's it's gone backwards and people occasionally still talk about things like synthetic fuels and biofuels that kind of raises its head every so often now you do really well to dissuade me from a world in 10 years time where almost everything isn't battery electric but i can see some attraction of extended range electric vehicles, for example, the sort of new breed, the super hybrid, if you like.

8:38I can understand why plug-in hybrids have still got some lifespan. And I can understand why manufacturers are hedging their bets to be ever so slightly ahead of the trend, not go too early and certainly not go too late. So I get it. I'm actually much more pragmatic than people might realize. But when things like biofuels get thrown up, I just sort of roll my eyes and sort of say, I really don't think that's going to happen. And the fantastic Hannah Ritchie, who works for Our World in Data and has her own substack, I think it's called Sustainability and Numbers, has sort of done some number crunching recently on biofuels.

9:14I don't know if you've seen it, but it is quite staggering. The headline basically is if you put solar panels on the land used for biofuels, that would produce enough electricity for all cars and trucks to go electric. So it is staggering. And in fact, so much so that when Hannah did the math, she couldn't quite believe it. So she summed up that the world currently uses around 32 million hectares of land, which is roughly the size of Poland, yeah, for biofuels. And actually, how much electricity could we generate if we put solar panels there? And she couldn't quite believe it. She had to double check and triple check numbers several times, convinced she'd accidentally added a zero.

9:56And she said, if we put solar panels on these 32 million hectares of biofuel land, we could generate around 32 ,000 terawatt hours of electricity. That's the same amount of electricity as the world consumes in a year. Or we could keep the biofuels, which amounts to 4 % of global transport only. So the grotesque inefficiency of biofuels alone means that it really is a fool's errand. And ultimately, with all these technologies, once you get them on a spreadsheet, once you look at what works and what doesn't work, it is batteries and energy storage and solar and wind and things like that that win out hands down.

10:36So I just thought that was a fantastic ultimate put down really if someone starts talking about synthetic fuels biofuels etc this is a one one good document you could you could look to to say aha not so fast you know i don't think that's actually going to happen and and hannah is so brilliant at coming out her newsletter our world and data is just absolutely no it's not her news but it isn't our world and data is it company but sustainability numbers is a newsletter i mean we i i can't wait for it to sort of land into the inbox. There's another good newsletter you need to subscribe to if you're not.

11:07Oh, absolutely completely, because she sort of throws out these big questions. For example, this week, you know, how much energy could be consumed and could be generated on the same amount of land currently dedicated to biofuels. And she shows you her logic. She shows you how she's come up to those numbers. And every time I read it, I'm like, oh, she's so good. And she takes problems and she really is so logical and simplifies them. And actually, a few years ago, I asked her to suss out how many people we would need to convince or how many people would we need to buy an electric car and put solar on their rooftop at our Australia live shows in order to offset all of our flights to get there as a team.

11:48And it was like two. We need to convince two people to get solar and electric vehicle. And we know, given the tens of thousands of people who come to our shows, it's much more than that. So she made me feel very good on that occasion. That has made me feel slightly better because that's been an unfortunate byproduct of what we've done over the years. Not something I set out to do, but in any means, and we're going to lessen that more and more. But that's really good to hear. I mean, she is amazing. We've had her at our London show, I think, a couple of years ago. We've had her on the podcast. It's probably high time we got her back on the podcast.

12:18She's got a lovely, disarming Scottish accent. and I just immediately trust everything she says. But with justification, because like you say, all the workings out of there, she really is an absolute treasure. So that was great to see biofuels, the argument being kind of not so much pulled apart as dismembered and fed into the wood chipper. Anyway, that's too many metaphors in one go. So let's move on. Well, and for anyone's thinking like, oh, yeah, but what about the efficiency? see she also does go into this into more detail in this article about actually the efficiency of how much solar in versus how much energy out with biofuels which is about one percent of conversion of solar energy to energy versus like the you know well 60 percent solar it's more like 27 anyway many many factors more efficient with solar than it is with biofuels so we will link to that episode to that article and it is really fabulous and so too is Hannah.

13:27I've got Dan Morgan here on the pod. Say hi Dan. Hey how's it going today? It's going good man. Tell us who you are and what you do. I'm Dan Morgan. I'm an attorney and a managing partner at Morgan & Morgan which is America's largest injury law firm. That's pretty awesome. I think I think I saw a billboard of yours recently that said 20 billion won. 20 billion is an insane number. Yeah, 20 billion recovered. It's actually, I think, somewhere north, probably closer to 22, 23 after this year. And each year we get bigger and badder and our army grows. So the number will hopefully keep getting bigger and bigger as time goes on.

14:02Awesome. So how does someone get in contact with Morgan & Morgan? What would I do if I got into an accident? Probably the easiest way is dialing pound law. That's pound 529 from your cell phone. We are always open. Our call center is always waiting to take your call. 24-7, 365. Wow. Dan Morgan from Morgan & Morgan, America's large injury law firm. Thanks for coming by the show. Thanks for having me. Visit forthepeople.com for an office near you. Shall we go to Article 2? Yes, I think that for us, there's some key buzzwords you can expect to hear over and over and over again this year. They might not quite make it into the Collins Dictionary of the Year word and all those sorts of things.

14:42I think vibe coding was one of the words of the years last year. But they're words you're going to hear in the industry constantly. And consolidation is going to be one of those words. The other one, to me, the big one is overcapacity. You know, as a market shifts, how hard must it be to predict what's going to happen? And that's why chopping and changing politically really, really doesn't do anyone any favors because you just don't know where you stand. businesses thrive on continuity and planning. And suddenly, if you pull the rug out from underneath a particular powertrain, for example, the knock-on effect for carmakers is huge and absolutely devastating.

15:25And I think with overcapacity, you quite often hear that in connection with China, that they have got this huge amount of overcapacity. And therefore, they're almost using other nations outside of China as a kind of release valve. You know, they've got all these people working, building these cars, or probably not even people, machines. And they actually have a huge amount to export. I think China overall has a trillion dollar trade surplus now, which is the difference between how much it exports and imports. It's an extraordinary amount in spite of tariffs that are being applied. And so, yeah, it's synonymous with China, overcapacity.

16:09But it is happening elsewhere. It is also happening in Europe. They have probably someone got their forecast wrong, and it's almost impossible to forecast accurately in the modern world, I think. And so there is serious overcapacity in Europe as well, for example. VW are one of the biggest affected countries. And I see that they're actually pursuing sort of radical capacity reduction through cost-cutting programs, 35 ,000 job losses in Germany. The group is, the Volkswagen group is 500 ,000 vehicle sales short of annual targets, which is equivalent to two full plants worth of output, making further restructuring very, very likely.

16:53They're not the only ones. Stellantis also have a similar overcapacity problem. and frankly, I feel a huge amount of empathy and sympathy towards people in the boardroom right through to people on the factory floor. It must be extremely disconcerting, but it isn't just about EV. It's about all power trains. It's about total car sales. It's about the wider macroeconomic situations, but overcapacity is going to be a big, big word this year that we need to keep an eye on And not just the word, but the whiplash it's going to cause, I think, in the automotive industry, very, very sadly. Yeah. And 35 ,000 jobs just as a number is really staggering.

17:39And it's not just a huge number and it's incredibly stressful for any of the families involved. But if you work in the automotive industry, that is typically a career that lasts many, many decades. And being in the automotive industry forms so much of your identity and your professional identity, especially. and that is something that I think we have to think about within this clean energy transition more broadly that some jobs will change and some of those changes will feel quite natural for example combustion to electrification or you know having worked in fossil fuels and then working in renewable energy but for some people they will be totally out of a job and how they then culturally perceive the influx of electrification or clean energy as the case may be will be negative.

18:26And so it's kind of like, you know, this isn't we have to remember that, yes, we're talking about cars, but we're also talking about livelihoods and how they're supported and how the policies and questions support the most amount of livelihoods in the best way possible. It's well, I've definitely been guilty of that. I mean, I think when it was in the abstract, you know, we know this is going to change. We know that jobs will be at risk. We know that companies could even be threatened existentially by what's happening and it's not just electrification it's just dealing with change then we have said you know who's who's not going to make it and we've been quite glib about it i'm not so much recently but in in years gone by you know now the rubber's hitting the road it's not funny you know it's very very serious people are going to be impacted livelihoods going to be impacted often by big decisions taken a long way out and And the reality is it's very, very sad to see that, but it does feel that we're at the point of consequence.

19:23You know, I think Roger Atkins, our friend, the king of LinkedIn and EV expert himself often talks about it being a banquet of consequences. I often talk about it being sort of musical chairs. Some of the chairs are getting pulled away. The music is going to stop. And unfortunately, there isn't going to be enough for everyone. So it is sad, but it isn't just about electrification. And that is the thing I'm always key to point out to people. Oh, yeah, because, you know, as we also see, the sale of combustion engine cars is on the slump and electrification is on the up. And that's something that we never see those two stats really presented together, which I find interesting as well.

20:03Well, I think we've seen in the last 24 hours some stories that actually battery electric is outselling petrol and there's just been that crossover point in Europe. I'm a little bit less triumphal about that for all the reasons that I've sort of pointed to earlier, but also because actually that excludes HEVs. So that wouldn't exclude mild hybrids, which are petrol vehicles, let's be honest. But I think I did see some other statistics, which I'm more likely to crow about, which is that the market share of battery EVs was up in 23 European nations last year. So again, we'll try and post all these links for these statistics.

20:47But yeah, the reality is that diesel is not quite in a death spiral, but isn't going to come back from where it is. Petrol is going to decrease. I think we've seen peak fossil fuel usage. But yeah, the impact is very, very serious. And when it comes to overcapacity and maybe the assumption in Europe was that if we kind of keep some of the newer entrants, particularly the Chinese entrants out, they won't be able to respond. So maybe if we sort of slightly slow pedal battery EVs, that will hit them. But of course, the Chinese make some really, really good petrol cars and petrol hybrids. And they've actually been able to turn up and down their production capacity more quickly, I would say, than some other manufacturers.

21:37But no one's laughing. It's a very serious situation and it is going to be a theme of this year. And, you know, for anyone who works for any of the companies mentioned, you know, what can we say other than, you know, I think one of the things that we've always felt as the fully charged show as was and everything electric is when we're sort of saying, you know, So X, Y, and Z company, maybe you should electrify a bit more quickly. It's more out of concern for the brand rather than lecturing or hectoring the brand. It's actually saying, we're worried about you and we're worried about your employees.

22:09So it might not have come across as constructive criticism or constructive friend. But really, from our point of view, we don't want to see livelihoods lost. And the most agile and adaptable and the ones that are slightly, I think, ahead of the curve will be the ones that survive. And some others will just be smaller companies. Maybe they won't go bang, maybe that's hyperbole, but they will just be much smaller companies. Do you know, that is the joy of the job that we get to have this little tiny window into so many different organisations and to understand how they operate, the culture, what things they have coming, what they don't have coming.

22:43and so you know we have this incredible helicopter view and so often OEMs are huge behemoth organizations and it's much easier to look internal to the organizations and think that challenges are unique to that organization rather than to see the macro trend so you're so right like whenever we've we've seemingly been judgmental it has come from a place of like no we need everyone to succeed that's how we get the best array of electric vehicles and the best array of technology and allow people to continue having their identity so firmly rooted in the automotive industry as well.

23:26I've got Dan Morgan here on the pod. Say hi, Dan. Hey, how's it going today? It's going good, man. Tell us who you are and what you do. I'm Dan Morgan. I'm an attorney and a managing partner at Morgan & Morgan, which is America's largest injury law firm. That's pretty awesome. I think I saw a billboard of yours recently that said 20 billion won. 20 billion is an insane number. Yeah, 20 billion recovered. It's actually, I think, somewhere north, probably closer to 22, 23 after this year. And each year we get bigger and badder and our army grows. So the number will hopefully keep getting bigger and bigger as time goes on.

24:01Awesome. So how does someone get in contact with Morgan & Morgan? What would I do if I got into an accident. Probably the easiest way is dialing pound law. That's pound five to nine from your cell phone. We are always open. Our call center is always waiting to take your call. 24 seven, 365. Wow. Dan Morgan from Morgan and Morgan, America's large injury law firm. Thanks for coming by the show. Thanks for having me. Visit for the people.com for an office near you. Shall we move to story three? Let's I think this is fascinating. As we speak, Keir Starmer, UK's Prime Minister, is in Beijing. He's there a few weeks after the Canadian Premier Mark Carney made the same trip.

24:46For us, this feels significant. Obviously, he will be there not just for purposes of cozying up to automotive industry or even the energy industry, but it will be a much wider diplomatic trip with huge potential trade implications. And the Secretary of State for the Department for Business, Johnny Reynolds, went out to Tokyo, I think about 15 months ago. And at the time, I think I said, you're in the wrong country you know if you really want to be engaging with the country that's growing fastest the biggest country you need to visit beijing you need to visit shanghai obviously robert and elliot and i were in the shanghai motor show a few months later and i really just wanted to transport that feeling back into uk government to get them to realize what's really going on.

25:46Because if you're in a government, you read probably the same things that the general population do. You might think that Chinese product isn't that great, or you might think other misinformation. But let me tell you, it is the most technologically advanced country in the world, with America in AI and other as being obviously a close second. But it is miles ahead from what I've seen. And so a successful trip to Beijing will be interesting. Obviously, there's lots of contention around it. It comes as very loaded trip. There's obviously a risk that it could trip Starmer up. It could be popular at home, unpopular.

26:31It depends how it's framed by the media. But it is really, really important in this post-Brexit world, I think, that we actually are opening up and working more. And what was interesting to me was that actually, from an import perspective, we import more from China. It's probably no major surprise than from any other nation apart from Germany. And from an export perspective, China actually sits sixth on our list as well. So let's not have hysteria about it. We already, China is already a very, very, very significant trading partner for us. And it is growing. It is getting bigger all the time. So really fascinating.

27:16And then we can't help but wonder, being in the automotive sector, what this means in relation to particular car companies. So the electric car grant, which went live last summer, for example, has, on a technicality, excluded car makers that are too far away, basically. which obviously includes the Chinese car makers. So if you're looking for a grant, you won't be able to get one, for example, on a number of the different cheaper Chinese models. So it's a tariff without a tariff effectively. So we wonder, maybe will Starmer come back with some sort of arrangement with a car maker, with a Chinese car maker?

27:57Might be related to the grant, might be related to inward investment into the UK to Greenfield Investment, maybe partnering up with someone else. And the word on the street is, and I've read a great story about this from a friend of ours, Kana Inagaki, who works for the Financial Times. You know Kana very well as well, which effectively seems to think that it may be that Jaguar Land Rover are speaking to Cherry. Cherry are a huge automotive behemoth in China. They are doing incredible export trade around the world. You might be familiar with their brands that are doing really, really well here in the UK.

28:36Emoda and Jaiku. They have other brands coming as well. Lipas or Lipa, I'm not sure how to pronounce that. iCar, there's others that are coming. Cherry's brand itself. They are huge and they already have some joint venture relations with JLR. who you used to work for back in the day. And there are rumors that they may do something together. They may solve some of JLR's capacity issues here in the UK. So we're really watching closely to see what gets announced on the return. But I have to say, I've looked into this a little bit more. And one of the things I find really, really interesting is as it relates to jobs, The SMMT do a fantastic job of talking up how big the automotive industry is in the UK, how much money it's worth, how many people it employs.