Kia's Steve Kosowski on the Charging Alliance, EV6 GT, EV9 SUV, & Future Outlook of the EV Market

MotorTrend

MotorTrend's Ed Loh & Jonny Lieberman chat with Kia's Long Range Strategy & Planning Manager - Steve Kosowski! The guys discuss the Charging Alliance

Transcript

00:00:00 (dramatic music)

00:00:02 - Hi there, and welcome to another episode

00:00:17 of The Inevitable.

00:00:19 This is Motor Trends Podcast about the future

00:00:22 of the automobile, the future of mobility.

00:00:25 Where are we going?

00:00:26 How are we gonna get there?

00:00:27 I'm Johnny Lieberman.

00:00:28 This is--

00:00:29 - Ed Lowe, hello. - Ed Lowe.

00:00:30 - And today we have an amazing guest.

00:00:33 I think the first time we have somebody

00:00:34 who has this occupation where basically all they do

00:00:39 is spend their time in the future.

00:00:42 His name is Steven Kozowski,

00:00:45 and he is the national manager,

00:00:47 long range strategy and planning for Kia Motors America.

00:00:51 A super interesting guy who spends a lot of his time

00:00:54 thinking about where are we going?

00:00:57 How are we gonna get there?

00:00:59 And how are we gonna do it in Kia's electrified vehicles?

00:01:03 - Yeah, I mean, this guy knows

00:01:05 what you're gonna be driving in 2030.

00:01:07 So without further ado, let's talk to Steve.

00:01:11 - Steve Kozowski, thank you so much for coming.

00:01:14 Your current title, and please correct me if I'm wrong,

00:01:18 national manager, long range strategy and planning.

00:01:21 And this includes--

00:01:22 - For what company, Ed?

00:01:23 - Oh yeah, sorry, Kia North America.

00:01:27 Inclusive of EVs, hybrids, plug-in hybrids,

00:01:30 which is really why we have you on The Inevitable.

00:01:34 - I wanna jump in because you told me

00:01:36 something interesting on the elevator ride up

00:01:38 and that you are meeting with the alliance.

00:01:42 This is the new charging alliance.

00:01:43 So the seven companies have gotten together.

00:01:46 And my question is, what took you so long?

00:01:48 (laughing)

00:01:49 - Right, or can you actually, before you do that,

00:01:51 define the alliance.

00:01:51 Is this on adoption of NACS,

00:01:55 or is this about the future of CCS?

00:01:57 - This is-- - Or is it both?

00:01:58 - This is the, we like to refer to it as the JV.

00:02:01 - JV, joint venture. - The joint venture.

00:02:03 And this is the JV that's between Honda and BMW,

00:02:08 Mercedes-Benz, Hyundai, Kia, and Stellantis.

00:02:17 And it is a group of OEMs--

00:02:19 - You said General Motors?

00:02:20 - General Motors, yeah.

00:02:22 It's a group of OEMs who've gotten together

00:02:25 to install ultra-high-speed DC charging across the country.

00:02:30 And the intent, the aim,

00:02:37 is 30,000 ultra-high-speed DC chargers

00:02:42 by 2030 across the country.

00:02:44 - And right now, the Tesla Supercharger Network,

00:02:47 I wanna say-- - 12,000.

00:02:49 - Is it 12 or 17?

00:02:50 - Well, it's 20, but the 12 are V3 and V4.

00:02:55 - Yes. - Right, that's the split.

00:02:57 - Which is the higher end.

00:02:59 Those are still not even 350, though, 350 kilowatt.

00:03:02 They're 240? - Yeah, that's about right.

00:03:05 - And then when you say ultra-high-speed,

00:03:07 define ultra-high-speed.

00:03:08 - 350 with upside.

00:03:11 - 30,000-- - 30,350 kilowatt minimum.

00:03:16 - Yep. - Wow, okay.

00:03:17 - I'm gonna write this down.

00:03:18 - And then you ignored the question.

00:03:21 What's at the end of-- - What took you so long?

00:03:23 - No, no, what's at the end of the cable?

00:03:25 Is it gonna be a NACS? - Oh, that question.

00:03:27 - Is it an NACS? - Oh, that's--

00:03:29 - Or is it a CCS1 or something new?

00:03:31 - That's not been completely disclosed.

00:03:34 It's subject to lots of discussion and debate.

00:03:38 But I believe that NACS and CCS couplers

00:03:44 is all that's been disclosed.

00:03:45 So there will be both.

00:03:47 But how many and those kinds of things.

00:03:48 - What's the mix, right? - Exactly, yeah.

00:03:50 That's being looked at.

00:03:51 - And so that assumes that, obviously, by 2030,

00:03:55 V5 or V6 of NACS will be able to deliver 350 kilowatt.

00:04:00 - Yeah, you might think that vector is going that way.

00:04:04 - Okay.

00:04:05 And then back to Johnny's question.

00:04:06 - What took you so long?

00:04:07 How come this didn't happen 10 years ago?

00:04:09 - Yeah, you're the long-range strategy and planning guy.

00:04:12 Come on. - Well, okay.

00:04:12 So you wanna get right into my personal frustrations.

00:04:16 You just touched on it. - Yeah, that's what we're here for.

00:04:18 - Which was, okay, a little bit my, okay.

00:04:20 So let's go back about three years

00:04:22 and we talk about Plan S was announced.

00:04:24 Plan S is Kia's huge investment into EVs

00:04:29 and clean mobility and lots of advanced technologies, 2020.

00:04:34 And at the time it was $25 billion.

00:04:38 And I'm just sitting back there thinking,

00:04:39 well, what about the infrastructure?

00:04:41 What about the, that's what we need to do.

00:04:43 And in this company,

00:04:46 there's so much going on below the surface.

00:04:49 So kind of what you see and feel

00:04:50 is just the tip of the iceberg.

00:04:53 And they did have quite a bit of discussion and activity.

00:04:57 There's work in Europe, if you're familiar with Ionity,

00:05:00 which is sort of-- - No, I don't know what Ionity is.

00:05:03 - So in Europe is Ionity.

00:05:06 And Ionity is a venture between Hyundai and Kia and BMW

00:05:12 and a lot of other OEMs, just like it is in the US.

00:05:15 - And infrastructure, charging solution.

00:05:19 - It's a network.

00:05:20 Yeah, it's a network.

00:05:21 And so that was put in place for the same reasons

00:05:25 we're putting it in place here,

00:05:26 which is to encourage EV adoption.

00:05:29 So I think the company was off and running on that.

00:05:34 And that was a priority.

00:05:38 The US side of things,

00:05:40 the conversation always was like,

00:05:42 well, there's public infrastructure,

00:05:47 EVGo, Electrify America, ChargePoint.

00:05:51 Let's see how that works.

00:05:52 - Okay. - Yeah.

00:05:53 - Not well, but keep going.

00:05:54 - Yeah, yeah, yeah, wait and see.

00:05:56 I get it. - Right.

00:05:57 - It's free to wait and see.

00:05:59 - Right.

00:06:00 And the other part of the argument is that,

00:06:04 well, look, it's 70 to 80% of the world

00:06:06 look, it's 70 to 80% of EV owners charge at home.

00:06:10 - Right.

00:06:11 Right now though, with that demographic

00:06:13 who is buying EVs at that point in history.

00:06:15 - That's right.

00:06:16 That's right.

00:06:17 So let's keep an eye on things and see where they go.

00:06:20 And I think these discussions with the current JV

00:06:24 for North America, they started some time ago.

00:06:28 And sort of what's been revealed of late

00:06:30 is late in the development of this.

00:06:35 So does that help?

00:06:38 - It does.

00:06:40 I guess my thing is, and I just remember very well

00:06:43 as a person who drove a Model S kind of when it launched.

00:06:48 And I think one of the first

00:06:51 or one of the first three superchargers

00:06:52 happened to be near our office.

00:06:54 And I took our Model S, I don't think it was ours yet.

00:06:57 It was one of those borrowing to the supercharger.

00:07:00 And I was like, this just is the smart,

00:07:03 like, forget about how good the car is.

00:07:05 This is such a smart thing to do for a lot of reasons.

00:07:08 At the time you had a bunch of people

00:07:10 buying $100,000 untested first year, first month vehicle.

00:07:14 And they get to all stand around and stare at each other

00:07:16 like, we're so smart.

00:07:17 And I was like, this is great.

00:07:18 This is how you build the Tesla Club of America

00:07:22 as everyone gets to know each other.

00:07:25 But then it just seemed to me like,

00:07:28 at some point over the last four or five years,

00:07:30 the whole industry, our whole future is electric.

00:07:33 And they somehow missed, I think,

00:07:35 the smartest thing Tesla did,

00:07:37 which was like buying real estate or whatever they did,

00:07:39 putting superchargers that reliably work everywhere

00:07:42 so that everybody with a Tesla,

00:07:44 they never have the Electrify America experience

00:07:46 just to kick that dead horse a little bit,

00:07:49 which is like, it's utter misery.

00:07:51 And so I'm just shocked.

00:07:53 How did all these companies miss that part of the equation?

00:07:57 - Well, I think, I also think part of the argument

00:08:00 maybe for the industry as a whole is,

00:08:01 look, we make the cars, we don't make the gas stations.

00:08:04 - But what I'm saying is you have this company,

00:08:07 this very disruptive company come along,

00:08:09 and not only do they make a great electric car,

00:08:11 they did the infrastructure.

00:08:14 How did all the OEMs miss that?

00:08:17 - Yeah, so I think so much of Tesla

00:08:20 raises these questions, Johnny.

00:08:22 And here's, I remember when the Soli,

00:08:24 when we launched the Soli V in 2014,

00:08:27 sitting in a room full of the marketing

00:08:29 and the advertising people,

00:08:30 and somebody said, "Why didn't you guys make a Model S?"

00:08:35 (both laughing)

00:08:38 And I remember saying, wait a second,

00:08:40 if we had gone to the board with,

00:08:42 hey, we're gonna make a bespoke aluminum architecture

00:08:45 with a 75 kilowatt hour package.

00:08:47 - I'm glad you said that.

00:08:48 The aluminum architecture is a huge part

00:08:50 that no one knows about.

00:08:51 - Exactly, they would have walked us out.

00:08:53 - Right. - Get out of here with that.

00:08:55 And so Tesla, in the lens of the automotive industry,

00:09:01 is kind of an anomaly.

00:09:02 - Oh, totally. - Right?

00:09:03 Yeah, and so--

00:09:04 - But there was some point where they weren't.

00:09:06 - Yes, and that was the Model 3.

00:09:09 So looking, I've got some charts with me,

00:09:12 but the sales history of EVs,

00:09:14 and they kind of chug along,

00:09:16 and then here's Model 3 in bolt,

00:09:17 and it just looks like a hockey stick.

00:09:19 - Right. - And then here comes Model Y.

00:09:21 And I think that was the inflection point

00:09:23 where the industry took notice and said,

00:09:25 wait a second, these cars are built in a tent, but, right?

00:09:29 - Yeah, yeah, yeah, doesn't matter.

00:09:31 - Doesn't matter, and I remember reading,

00:09:34 I think it was a Motor Trend article,

00:09:36 and it was an early drive of the Model 3,

00:09:38 and I won't forget this, and it was,

00:09:40 I would talk about the,

00:09:41 I'm gonna get this wrong, you guys, but--

00:09:47 - It's okay, paraphrasing's fine, you do it all the time.

00:09:49 - Yeah, I would talk about the body roll,

00:09:52 if there was some.

00:09:53 - Right. (laughs)

00:09:55 - And the early-- - I think that was

00:09:56 Kim Reynolds' drive with Frans, yeah.

00:09:58 - Yeah, that's what it was, that's what it was.

00:09:59 - I remember that, it was a really good article.

00:10:01 - But I think what you're saying is,

00:10:02 and this is, we've heard this quite a bit now,

00:10:05 and I think this is an interesting moment

00:10:06 because so much is going on across the,

00:10:09 from the legacy manufacturers especially,

00:10:11 but everybody discounted Tesla,

00:10:13 and they discounted them for a ton of reasons.

00:10:15 First, it was like, that's a roadster,

00:10:17 then it was the cars too expensive.

00:10:19 - Tucker, Tucker, Tucker failed in 1948,

00:10:21 can never happen again.

00:10:22 - Yeah, that's-- - No new American cars.

00:10:24 - Tesla's the only successful new car manufacturer

00:10:27 to come along in the last 65 years,

00:10:30 and even until like, whatever, three years ago,

00:10:32 people were still discounting,

00:10:33 well, they're about to fail.

00:10:35 All the production hell they were talking about.

00:10:37 - The short sellers were going nuts.

00:10:40 Oh, yep, six months from now,

00:10:41 I'm gonna make a billion dollars

00:10:42 'cause I'm short selling all the stock.

00:10:43 - But now that things have flipped,

00:10:45 now it looks like every perceived difficulty

00:10:47 Tesla's had is now their advantage.

00:10:49 'Cause it's like, everyone's like, you guys are crazy,

00:10:51 why would you spend all that money on real estate?

00:10:53 Why would you set up a, to your point, it's super valid.

00:10:57 Car companies sell cars, they don't sell gasoline.

00:10:59 They're not in that business.

00:11:01 So the question for you though I have is,

00:11:03 if we now are at the stage where we recognize

00:11:05 that Tesla's the best selling electric vehicle

00:11:08 on the planet and worldwide--

00:11:09 - Best selling vehicle on the planet.

00:11:10 - Right, sorry, yes. - Forget electric.

00:11:13 - Couple years ago, they passed

00:11:15 all the luxury car manufacturers combined,

00:11:17 they were the best selling vehicle in California,

00:11:18 all that stuff, right?

00:11:20 Why does expanding your own charging network

00:11:24 or delivering that experience to the customer,

00:11:26 why do you need to do it as a JV?

00:11:28 How come, why wouldn't Kia and/or Hyundai Motor Group

00:11:32 at large, which is like a super disruptive company,

00:11:35 just say, hey, let's go buy a little piece of land

00:11:39 and drop some chargers on it.

00:11:40 - It's really, really expensive.

00:11:43 The CapEx, the oversight, the electricity,

00:11:47 it is really, really expensive.

00:11:51 Yeah, I mean, that's the short answer.

00:11:53 - It gets into the trillion dollar range, right?

00:11:56 - Multi-billions, for starters,

00:12:01 but yes, it's really expensive, really expensive, yeah.

00:12:06 And arguably with little or no ROI, that's part of it too.

00:12:10 - Well, the ROI is people buy your cars.

00:12:13 - Right, yeah, that's a good point.

00:12:17 - And again, we did a comparison test recently

00:12:22 with the Model Y and the Hyundai Ioniq 5,

00:12:27 and it was Scott Evans and I, co-worker did it.

00:12:31 And before we drove them both and we're like,

00:12:34 I can't figure it out, they're both fantastic products.

00:12:37 Like we love them both.

00:12:39 If this one has better steering,

00:12:40 this one has better ride, whatever.

00:12:41 Couldn't figure it out.

00:12:42 Time to charge.

00:12:43 Plug the Tesla in, 40 minutes later, unplugged it.

00:12:47 No apps, no credit cards, no nothing.

00:12:51 Charge the Hyundai.

00:12:52 There's four chargers, and this is like half mile

00:12:55 from where there's 16 Tesla superchargers.

00:12:57 There's four electrified American chargers, all filled.

00:13:01 One, I see there's people in the car and they get out.

00:13:04 I talk to them, you guys leaving?

00:13:05 No, we're having a problem.

00:13:07 But the BMW dealers around the corner,

00:13:08 we have a guy from the dealership coming to help us charge.

00:13:12 Okay, they're there.

00:13:14 And then 10 minutes later they leave

00:13:16 and I'm leaving out a bunch of stuff.

00:13:17 Like I got out of the car to get some shade

00:13:21 and a person had defecated behind the charger

00:13:25 because of course there's no bathrooms.

00:13:27 - Hey, it was a person, not a large dog.

00:13:29 - I know it was a person.

00:13:30 - Oh, okay.

00:13:31 (laughing)

00:13:32 - I have a young son.

00:13:34 And then when the BMW finally leaves without charging,

00:13:39 I pull in and Unix error message on the charger.

00:13:43 So I don't charge, we go have lunch.

00:13:44 And I'm like, how about we give the win to the Tesla?

00:13:46 'Cause you can't charge the frigging Hyundai.

00:13:49 And then we went to an EV go eight miles away.

00:13:53 We had enough range to get there, plugged in, wouldn't work.

00:13:57 It was just on and on and on.

00:13:59 So it's just like, why would you buy anything but a Tesla?

00:14:03 - Right, that's it, Johnny.

00:14:06 We hear that from folks and it's a real frustration

00:14:09 and arguably what you're describing maybe was,

00:14:12 okay, the industry, we've had enough.

00:14:14 We've had enough.

00:14:15 And also the other part of it is their sales risk, right?

00:14:18 It's one thing to be kind of chugging along

00:14:20 as the industry at seven, eight, nine, 10%

00:14:22 of your volume as EV.

00:14:24 But if we wanna get into the ZEV rules

00:14:26 that are gonna push that up to 35%, 43%

00:14:29 so all the way up to--

00:14:30 - And then 2035.

00:14:31 - Exactly, and you need to start now.

00:14:34 And I think the industry collectively saw this,

00:14:38 what you're describing as sales risk.

00:14:40 - It is, I mean, there's so many,

00:14:42 look, it's a getting new tech.

00:14:44 There's a billion reasons not to buy it.

00:14:46 And I went through this, I remember with the iPhone,

00:14:49 like when the iPhone came out, I was like,

00:14:51 that looks great, it's everything I want,

00:14:52 but I need a keyboard.

00:14:53 And I bought a billion horrible non-iPhones.

00:14:57 - I did that too.

00:14:59 - A billion.

00:14:59 I had this Motorola thing, nothing worked.

00:15:02 And so any excuse not to buy an EV,

00:15:05 people are hungry for it.

00:15:06 And it's such a pain point.

00:15:12 I have an EV, I charge it home, it's painless.

00:15:15 It's a hundred times better than a gas station.

00:15:17 Except the once in a while where it's like,

00:15:19 I gotta, or my wife has to, and she has less,

00:15:23 she's really unforgiving.

00:15:24 - Well, that's a very important point too,

00:15:26 because if we're trying to increase adoption,

00:15:29 we have to get from about 74, 75% of the people

00:15:32 who are buying EVs are men.

00:15:34 - Oh, really?

00:15:35 - Yeah.

00:15:36 - Oh, I never heard that.

00:15:37 - Yeah, so there's a big chunk of the market

00:15:39 who has an aversion to EVs.

00:15:41 Part of it is related to what you're describing,

00:15:43 which is that you can go to a gas station,

00:15:46 anybody refuel in and out in less than 10 minutes.

00:15:48 But if you go to a charging station,

00:15:51 with an EV6, it could be 18, 20 minutes

00:15:53 if everything's working.

00:15:55 But that's a long time.

00:15:57 And for a woman to be sitting there,

00:15:59 there's security and safety issues.

00:16:01 - We've, okay, this part we've heard about.

00:16:02 - We heard about this from Hyundai's CMO, Angela Zappella.

00:16:06 - And Kristen Leal, before we hired her,

00:16:07 she said the same thing, like,

00:16:09 "I don't wanna go to one in the morning in New York

00:16:11 "to go sit in a parking lot by myself for 10 minutes."

00:16:13 - There's some comfort in a gas station.

00:16:15 - Knowing that.

00:16:16 - It's well lit, there's somebody in there.

00:16:17 - There's an attendant.

00:16:18 - Yeah, and cameras and all that stuff.

00:16:19 - That's exactly right.

00:16:20 - Okay.

00:16:21 - I didn't know that, that's fascinating.

00:16:23 - So, but how does 74%,

00:16:26 and how does 74% of EVs being purchased by men,

00:16:29 how does that compare to industry standard?

00:16:32 - It's about 50/50, actually.

00:16:33 - Isn't it like 52% women, I think?

00:16:36 - Yeah.

00:16:36 - Like all the cars?

00:16:37 - Yeah, and that's an important point,

00:16:39 because I think that's gonna grow, that's gonna grow.

00:16:41 We can talk about that later.

00:16:42 But yeah, it's about naturally split

00:16:45 in the marketplace now,

00:16:47 but EVs are definitely skewed 74, 75% male.

00:16:50 - Interesting.

00:16:51 - Yeah.

00:16:52 - Okay, we have a whole content strategy

00:16:54 around trying to get women to influence the purchase

00:16:58 of an EV, because we think a lot of the men

00:17:01 who are looking at them are like raging,

00:17:04 "I will never buy one!"

00:17:05 But maybe the women are a little bit more open-minded,

00:17:08 and maybe practical about conservations.

00:17:11 - Yeah, they don't care about the V8 grunting.

00:17:13 - Right, yeah, I think you're right.

00:17:14 And that's another important point

00:17:16 about kind of where we are on the adoption curve.

00:17:18 Like, you remember from your marketing classes,

00:17:20 the early adopters and the early majority and all that?

00:17:22 We are there right now.

00:17:23 The early adopters have bought,

00:17:25 early majority are thinking about it,

00:17:28 and curious, and reading your material,

00:17:31 and trying to understand this.

00:17:33 And that's why things like the charging

00:17:35 just needs to be dirt simple.

00:17:36 It's gotta work.

00:17:37 They don't care about kilowatt hours.

00:17:39 They don't care if they had, they just want it to work.

00:17:42 And their affinity for the econess, and the NVH,

00:17:47 and the tech that goes with it,

00:17:49 is so aligned with what the product can deliver.

00:17:53 But there's lots of little hiccups and hangups.

00:17:55 The charging's one of them.

00:17:57 - Yeah, 'cause you know, it's funny.

00:17:58 I've talked to a bunch of people that are like,

00:17:59 "I don't have 20 minutes to charge!"

00:18:02 And I think, as a species, we've become so good at like,

00:18:06 "I can waste 15 minutes on this thing

00:18:08 without even looking, not even caring,

00:18:11 my life's gone, it's being sucked away by my phone."

00:18:14 But if it just worked, like that's,

00:18:16 I'm that desperate, I just, and I want chargers.

00:18:20 Like there's so many, there's three chargers.

00:18:22 - Yep. - Like three!

00:18:23 I live in Los Angeles, there's nine billion people.

00:18:25 - Yeah, and you know, the thing of it is,

00:18:27 in your daily life, you have so much stuff

00:18:31 that you have to do, get done, you gotta be here,

00:18:33 you gotta be there, you got kids, school,

00:18:35 soccer practice, grandparent, the last thing you wanna do

00:18:38 is to have that one little thing in your day

00:18:41 just become a headache, "I got enough headaches,

00:18:44 I don't need another one."

00:18:45 - So, we jumped in real deep, real quick, on charging,

00:18:50 which I know is very sexy to some of the audience.

00:18:53 - Hey, it is!

00:18:54 - But let's pivot, because you have done

00:18:57 some of the sexier vehicles in your long experience at Kia.

00:19:02 I'm not actually, I'm not kidding.

00:19:03 I think, in particular, we can go backwards from,

00:19:05 you mentioned Soul, I think you mentioned Niro,

00:19:08 but let's talk about EV6.

00:19:10 - Yep. - So, did you guys,

00:19:13 is this purposefully, the EV6 GT was supposed to be

00:19:16 like a baby, call it the baby Porsche Taycan?

00:19:19 Like, did you guys, what was the thought--

00:19:21 - It's not so baby.

00:19:22 - What was the thought in delivering a vehicle

00:19:25 that looks that way, that has frickin' racing seats in it,

00:19:29 and what do we do, zero to 60 in like--

00:19:31 - Oh, three seconds. - Yeah.

00:19:33 - But not only that, there's a consistent,

00:19:36 this is a breaking story we gotta start doing,

00:19:38 but there's a consistency to EV launches with modern EVs

00:19:41 that just kind of isn't there on hot days with gas cars.

00:19:45 We just did a video, it's not out yet,

00:19:46 but our show, Head to Head Drag Race,

00:19:48 with an EV6 GT in the M3 competition,

00:19:51 and one time, the BMW beat the Kia,

00:19:55 but like 10 times it didn't, and it was supposed to.

00:20:00 - So talk us through that, talk us through about,

00:20:02 just give us all your, okay, how did EV6 come about?

00:20:07 EGMP, I know, I'm familiar with the platform,

00:20:10 but you're the guy, national manager,

00:20:12 long range strategy and planning, that said,

00:20:14 okay, it's gonna come to this market,

00:20:16 and these following trims or forms or whatever,

00:20:19 how does that go?

00:20:20 - So, okay, so the origin of that car

00:20:22 goes all the way back to like 2016.

00:20:26 So in 2015, 2016 is when the platform layout

00:20:29 and engineering for EGMP started.

00:20:32 - Define EGMP for everybody.

00:20:34 - Electric Global Modular Platform.

00:20:36 It's dedicated to, it's only engineered and built as an EV.

00:20:41 It's all engineered around the battery,

00:20:43 which is under the floor in the center of the car.

00:20:47 - And this is the Ioniq 5 EV6 and the GV60,

00:20:51 the Genesis GV60. - That's right, and the EV9.

00:20:54 - Yes, yeah, and the Ioniq 6.

00:20:58 - That's right.

00:20:59 - And-- - They're gonna iterate

00:21:00 on this platform.

00:21:01 - That's exactly right, Johnny.

00:21:02 Yeah, so all of the platform engineering

00:21:05 and design and development,

00:21:07 the pathway was set in place in 2015 and 2016.

00:21:12 And the, we'll call it the derivative strategy.

00:21:16 You know, you want this, you want that,

00:21:17 you wanna sit down, what is it you want?

00:21:19 That pathway was more or less starting to firm up

00:21:23 in 2016, 2017 for Kia.

00:21:26 - Okay.

00:21:28 The EV, so going back,

00:21:33 there is so much debate and discussion

00:21:36 on what it should be, what it could be,

00:21:38 what do we need, what do we want,

00:21:40 what does the market want, what's feasible,

00:21:42 and what makes sense.

00:21:44 And the overarching strategy seemed to gel at,

00:21:48 okay, well, this is, we've had sole EV,

00:21:51 we've had narrow EV--

00:21:53 - Which were, to the point about EGMP

00:21:56 being an all-new platform and a purpose-built EV platform,

00:21:59 those were not.

00:22:01 Those were, let's take an existing

00:22:03 internal combustion-based vehicle, front drive,

00:22:06 and let's slam in some batteries and electric motor

00:22:09 and see how it goes.

00:22:10 - That's right, that's exactly right, Ed.

00:22:11 And it's, we kind of refer to that as a derivative EV

00:22:14 'cause it's derived from a ICE platform.

00:22:16 But this was, you know, kind of our first clean sheet.

00:22:19 It's gonna be an EV, what do you want it to be?

00:22:22 And there was lots of arguments around the world.

00:22:25 I want this, I want that, we over here, we want this.

00:22:29 And I think what everybody landed on was,

00:22:32 well, let's make a statement.

00:22:34 And we can work out what comes off of that platform later.

00:22:39 And--

00:22:40 - What do you mean by make a statement?

00:22:41 I mean, I like that, I like that, it's great.

00:22:43 I like when car companies make statements,

00:22:44 but what do you, like, what statement?

00:22:46 - So this is aesthetics, performance,

00:22:49 capability, range, charging speed,

00:22:52 all of these kinds of things

00:22:53 that were starting to emerge as,

00:22:55 wouldn't it be great if, wouldn't it be cool if,

00:22:59 yeah, I like that, that kind of--

00:23:02 - So you're not building, not to disparage them,

00:23:04 but you're not building a Nissan LEAF,

00:23:05 that lets build something flexible enough

00:23:08 to take on the Teslas of the world or whoever.

00:23:11 - That's right, that's right.

00:23:12 And I think the engineers are so sharp

00:23:17 and their foresight is so good,

00:23:21 and we're advantaged by this,

00:23:23 that they did put the things in place

00:23:25 like the 800 volt architecture,

00:23:26 which is what gets you that consistency

00:23:29 in your drag races.

00:23:31 And it also gets us the high speed charging

00:23:33 and those sorts of things.

00:23:36 So rather than do a,

00:23:39 we'll call it a garden variety, suburban, sportage EV,

00:23:44 the view was let's make a statement

00:23:47 and show the world how good our EV competency is.

00:23:53 Our engineering.

00:23:54 And then we can work on utilities

00:23:56 that come off of that architecture later.

00:23:58 Okay, all right, okay.

00:23:59 And the other part of it too, at the time,

00:24:01 was that we may not have the cost position

00:24:05 to get us that sportage EV.

00:24:10 We should later, but in the meantime,

00:24:13 our statement can sell well and not be negative.

00:24:18 - You mean from a price position for the consumer,

00:24:20 you won't be able to deliver something

00:24:22 at that sportage level entry price.

00:24:24 - Well, a cost position and a price position, right?

00:24:27 So those are married.

00:24:29 - Right, and the EV6,

00:24:30 everything is inflated so much,

00:24:34 but it's 45,000 to 65,000 is sort of the range,

00:24:37 which is kind of a normal car price.

00:24:40 - Okay, and I don't know how much you can speak on this,

00:24:42 but so that seems pretty far back for you guys.

00:24:45 That's fairly, that is some long range planning

00:24:48 in terms of you're doing EGMP.

00:24:52 Genesis at the time was sort of a hot mess,

00:24:57 not even had launched officially.

00:25:00 - It was the Hyundai Genesis at that point.

00:25:02 - Right, so you had already decided,

00:25:04 the company had already decided

00:25:05 it was gonna be its own brand,

00:25:07 but then from a, like, I guess I'm trying to ask you,

00:25:11 General Motors pioneered this, right?

00:25:13 There's the Chevy, there's a Buick, there's Cadillac.

00:25:16 - You get a promotion, you buy a Pontiac, yeah.

00:25:18 - So, first for every purchase, right?

00:25:20 - Exactly, from that EGMP standpoint,

00:25:23 and I know Kia has, within the group,

00:25:25 has carved out a space for being like leading on design,

00:25:29 maybe leading on a little bit on performance.

00:25:31 Hyundai's a little bit more the mass market brand.

00:25:33 So was that the approach for, as far as you know,

00:25:36 like, did you do all the national managers get together

00:25:39 and say, "Okay, so we're gonna do it this way,

00:25:40 "you do it this way," and then, 'cause Genesis,

00:25:42 I feel like GV60 then, that was conceived that far back?

00:25:46 Or was it like two vehicles at one point?

00:25:49 - Ed, to be frank, I can't comment on,

00:25:51 I wasn't part of those meetings for Genesis and Hyundai.

00:25:56 I can talk about the Kia part,

00:25:59 but when you did meet with R&D,

00:26:01 you would see other vehicles identified on the,

00:26:04 call it the platform plan, that kind of thing.

00:26:05 So it may or may not have said Hyundai or Genesis

00:26:09 or something like that.

00:26:10 - So you didn't see the mood board for those other ones?

00:26:12 - We didn't see the mood board.

00:26:13 - But I like Ed's original question,

00:26:15 how'd the GT come about?

00:26:17 'Cause I think that's just a super cool car.

00:26:19 - So I think, to answer that question,

00:26:22 all roads lead to Albert Biermann.

00:26:24 - Nice. - Okay, so.

00:26:25 - Yeah, this is my assumption,

00:26:26 was all these BMW employees.

00:26:28 - Yeah.

00:26:29 - Well, Albert, so just for,

00:26:31 we've mentioned him before on the podcast,

00:26:32 so Albert Biermann was like a 25 or 30-year veteran of BMW.

00:26:36 - Of M division, not BMW.

00:26:38 - Well, no, no, no, when he left BMW,

00:26:40 he had left as the head of M,

00:26:44 and he moved over to Kia out of Namyang,

00:26:46 and he worked there for like four years,

00:26:48 three and a half, four years, something like that?

00:26:49 - I think that's right, yeah.

00:26:52 - But the badge went from M to N?

00:26:55 - Yeah. - Is that what you call it?

00:26:56 - Well, I saw him at, I assume Kia's there too,

00:26:59 but Hyundai had a development center at the Nurburgring.

00:27:02 - Yeah.

00:27:03 - And I remember Biermann was there,

00:27:05 and there was, they had a, it was a Hyundai Genesis

00:27:08 that was, we said it's the hardest working man in Germany,

00:27:10 it was this guy who was doing laps for days on end

00:27:13 in a Genesis 'cause it was not happy on the Nurburgring,

00:27:15 but Biermann's like, oh, just wait.

00:27:17 - So just for context, that's who Albert Biermann is,

00:27:19 he's no longer with the group,

00:27:21 but what was, how were his fingerprints all over?

00:27:24 - So his, first off, I would say his kind of his impression

00:27:29 over the company as a whole,

00:27:31 with respect to prioritizing dynamic performance

00:27:36 and engineering the cars around dynamic performance.

00:27:40 Like if you look at the K5 and its platform,

00:27:43 the, it's on the N architecture,

00:27:48 and the way that platform is set up for low center of gravity

00:27:55 the way the engine is positioned,

00:27:57 the way it's engineered relative to the previous car,

00:27:59 it's so clear that somebody who prioritize,

00:28:02 prioritizes dynamics set that up.

00:28:06 And I think there's a mindset now that's within

00:28:07 the corporation with an R&D around this.

00:28:11 The E-GMP happened on his watch as well, so did Stinger.

00:28:15 Stinger, when he came, Stinger was almost done,

00:28:18 but he did a lot of work.

00:28:20 - There was something very E39 about the Stinger.

00:28:23 - Yes, and let's touch on that later

00:28:25 'cause there's a little bit of that in the EV9.

00:28:28 - Okay.

00:28:29 - So I think, you know, the E-GMP and all the derivatives

00:28:33 and the development on that,

00:28:34 you know, they happened under his watch.

00:28:36 And again, when you drive that car,

00:28:38 it is so neutral and forgiving and fun to drive.

00:28:41 And the steering is telepathic

00:28:44 and the way that car works is so well sorted.

00:28:48 It is so much fun to drive, not the GT.

00:28:51 I mean, the GT is wicked, but,

00:28:53 so it's clear that that's almost like his capstone project

00:29:00 from some kind of graduate program.

00:29:02 - Got it, yeah.

00:29:03 - And then I think along the way they realized

00:29:05 that the capability, this architecture,

00:29:08 and the potential in the motors and the controls

00:29:13 led to the GT.

00:29:15 Like, let's see what we can do with this.

00:29:16 And then of course you have the other,

00:29:18 you have the IONIQ 5N and some other spicy stuff too.

00:29:23 - Yeah, we're excited, I haven't driven that quite yet.

00:29:24 - We just saw that, we might've just seen that.

00:29:26 - Oh, oh, I haven't driven it yet, but I will soon.

00:29:28 - So, but all this is happening, like, I mean,

00:29:32 a lot of this development,

00:29:33 probably the finishing touches happening

00:29:35 during the pandemic, back half the pandemic.

00:29:38 And again, conceived in like 20, let's just say 15, 2016.

00:29:43 - Well, it's a platform engineering, late 2015, 2016.

00:29:47 2017 is when the EV6, the code for that is CV.

00:29:52 So CV kicked off in 2017.

00:29:56 - What does CV stand for?

00:29:58 - Well, the--

00:29:59 - Cavalinos?

00:30:00 - No, there's within the group's vehicle designations,

00:30:04 there's two letters and a number.

00:30:08 - C segment.

00:30:09 - Yeah.

00:30:11 - Yeah, and then V, vehicle.

00:30:12 - Yeah, for EV.

00:30:14 - Okay, EV, yeah, yeah.

00:30:15 - Right.

00:30:16 - C segment EV.

00:30:16 - Broadly, yeah.

00:30:17 - Drop the E, yeah, yeah.

00:30:18 - And then you'd have one or two,

00:30:20 like CV1 or CV2 for the generation, that kind of thing.

00:30:24 But so 2017 is when that program

00:30:28 really kicked off in earnest.

00:30:29 So we had the platform, that's in development,

00:30:33 what are you gonna make off of it?

00:30:34 And if you remember, there was a concept car

00:30:39 called the Imagine that was created by the European studio,

00:30:42 you can look it up.

00:30:43 - Okay, okay.

00:30:43 - But that was sort of the first attempt

00:30:45 at what can we make off of these dimensions

00:30:48 and off of this beautiful platform.

00:30:51 - Got it.

00:30:51 - And so that came and went and people liked it

00:30:56 and people didn't.

00:30:58 And there was a lot of discussion and opinions

00:31:03 about changing the form of that.

00:31:06 Let's try and keep the proportions,

00:31:08 but change the surfacing and change the feel of it, which--

00:31:12 - Yeah, I'm kind of glancing now, it's very show car-y.

00:31:14 - Kind of got a bug eye, kind of front end,

00:31:16 a little robot kind of thing.

00:31:18 So, but I guess the question I was really getting to is,

00:31:20 you're kind of, you're doing this whole thing,

00:31:22 but what are you benchmarking from a performance standpoint?

00:31:24 Because, again, I call it baby Taycan, this EV6 GT.

00:31:28 But Taycan wasn't out yet.

00:31:28 - It wasn't out yet.

00:31:29 - Right, so what, for you, aiming at like a,

00:31:31 and the Model 3 was also only starting

00:31:32 to just kind of take off.

00:31:35 What were the dynamic targets?

00:31:38 - Yes and yes.

00:31:39 So the I-PACE.

00:31:42 - Oh yeah.

00:31:43 - Oh, okay, Jaguar I-PACE.

00:31:45 - Boy, great car killed by a terrible range

00:31:47 and terrible software, but yes, great, I like those.

00:31:50 - Yeah.

00:31:50 - Yeah, good looking, too.

00:31:51 - Yeah, yeah.

00:31:52 So I-PACE was a reference vehicle, let's put it that way.

00:31:57 - Okay.

00:31:58 - Anything on the internal combustion side?

00:32:01 - I don't remember evaluating

00:32:04 any internal combustion vehicles.

00:32:07 - But by '17, Model 3 performance was out.

00:32:10 - Yeah.

00:32:11 - By '17, and that was, you know, pretty good car.

00:32:14 - Yeah, and these were part of the mix

00:32:16 during the gestation of CV, EV6.

00:32:19 These cars became references

00:32:21 and lots of other cars along the way, too.

00:32:23 - Okay.

00:32:24 - So just, and this is more for you

00:32:26 to kind of just walk us through how you,

00:32:27 I don't, I've never talked to a long range planner.

00:32:30 Are you thinking, is this somebody else that does it

00:32:35 or is this you?

00:32:36 Are you thinking about the end customer?

00:32:38 Did you already have like a, hey, here's a profile,

00:32:40 it's gonna be a guy named Johnny.

00:32:41 He's, you know, 49 years old.

00:32:44 He's got--

00:32:44 - He has a full stack and a surfboard.

00:32:46 - Right, you know, is this, is that--

00:32:48 - Lives in a loft.

00:32:49 - Is that where, and if so, who was the EV6

00:32:52 and the EV6 GT buyer?

00:32:53 How were they, how were they sort of different?

00:32:55 - Yeah, so there's a couple different,

00:32:58 we'll call them target buyers.

00:33:00 And design typically has a design target.

00:33:04 And then we would have,

00:33:06 we'll call it like a product planning target.

00:33:08 And then actually as the car comes to market,

00:33:10 a lot of that gets changed

00:33:12 into who's the advertising target.

00:33:14 Who do you wanna, you know,

00:33:16 portray as the person who's gonna buy this.

00:33:19 So design will be looking for context and references

00:33:25 that shape how they shape the car.

00:33:30 And some of this stuff gets,

00:33:33 go into somebody's house and visit with them for an hour

00:33:37 and tell me about your life, your house.

00:33:40 Let's go look at your closet.

00:33:41 What do you wear?

00:33:42 Are you playing an instrument?

00:33:42 What do you play?

00:33:43 And then let's show me the garage.

00:33:45 What's in the garage?

00:33:45 Have you always had this?

00:33:46 What inspired you?

00:33:47 That kind of thing.

00:33:48 You really start to build a profile of who this person is.

00:33:53 - Yeah.

00:33:54 For the EV6, it was male, techie,

00:34:01 a picture of an Asian guy.

00:34:07 - Hi there.

00:34:08 - In a tech job, about 48 to 52 years old.

00:34:13 - Nailed it.

00:34:16 - Making about 200 a year.

00:34:18 And you could sort of say he lives in Seattle.

00:34:22 He works for Intel.

00:34:24 He's had electrified cars for a while.

00:34:28 He gets it.

00:34:29 - Electrified.

00:34:30 - Electrified.

00:34:30 - Not necessarily a full EV.

00:34:31 - And now he's graduating.

00:34:32 So you refer to him as the EV graduator.

00:34:35 - Got it.

00:34:36 - That kind of thing.

00:34:37 - And that was for EV6, right?

00:34:39 So GT is like what, that dude?

00:34:41 - Well, the GT is really turning out to be a,

00:34:47 for lack of a better word, the rich guy's car.

00:34:51 Right, I mean, we showed it at the Quail

00:34:52 and there's a lot of interest among a lot of wealthy people.

00:34:55 To be honest, Ed and Johnny,

00:34:59 I haven't looked at the demos on that yet, and I will.

00:35:01 - That's fine.

00:35:02 It is a--

00:35:04 - But it's not, real quick, it's not that expensive.

00:35:06 That's what gets me about the GT was like,

00:35:09 I think the one's 60 something.

00:35:11 - 62.

00:35:12 - Yeah, which is like not the big ask for the,

00:35:15 what it, I mean, not to sell you any cars,

00:35:17 but for what it does, that's a hell of a performance.

00:35:19 - Our CEO drives a Taycan, I'll put him on blast.

00:35:22 And I loaned him the EV6 GT and we had it,

00:35:25 and he was like, and I kept calling on him,

00:35:27 hey, this is the baby Taycan

00:35:29 that might be faster than your Taycan.

00:35:31 He didn't like that.

00:35:32 It's great.

00:35:34 Okay, so switching gears a little bit,

00:35:38 'cause I noticed that it's not on your resume,

00:35:41 but are you involved at all with this amazing EV9?

00:35:45 - So my--

00:35:46 - SUV?

00:35:47 - My work on the EV9 was early in 2018.

00:35:52 And it was a lot of the upfront,

00:35:56 early, early stage, what does this product need to be?

00:36:02 What would be some really cool USP,

00:36:04 some unique selling points?

00:36:06 Lots and lots of workshops with engineers,

00:36:09 with people from all over the company,

00:36:11 with the whiteboards and the little sticky notes

00:36:15 and the little working groups about this

00:36:17 and that sort of thing.

00:36:18 And then my involvement in that

00:36:23 was much, much lower and lower and lower.

00:36:25 It became a little more regulatory.

00:36:27 A lot of my work now is so regulatory.

00:36:30 Probably 75% of my time now is focused on regulatory,

00:36:35 and we can talk about that.

00:36:36 - We'll talk about it, but yuck.

00:36:37 Okay, okay.

00:36:38 (laughing)

00:36:39 Keep going, tell us about EV9, 'cause EV9's awesome.

00:36:42 - That's why my hair's falling out.

00:36:44 - It sounds like you recently drove an EV9.

00:36:47 - Oh yeah, we might have had one at SUV of the Year.

00:36:50 But you know, psh, that's my mom's order.

00:36:53 - Yes, so my early work on that was,

00:36:57 here's the market opportunity, here's the potential,

00:36:59 here's the volume, here's what it needs,

00:37:01 here's how we're advantaged in terms of range and charging.

00:37:04 Step on it, because we think this is gonna be a thing,

00:37:07 and there's gonna be a lot of other manufacturers coming.

00:37:09 So that was in like 2018, 2019.

00:37:13 - Okay.

00:37:14 - And then at that point, and again,

00:37:16 this is a real shame that we're,

00:37:18 I mean, you're the long range guy,

00:37:19 this is similar to like talking to,

00:37:20 when we talked to the designers.

00:37:22 We talk about a product that's coming out now,

00:37:24 it's literally ancient, you were like,

00:37:26 you were so deep on this like three, four years ago,

00:37:28 so I know I can see you're pulling it back.

00:37:30 It's awesome looking, like it is like really like,

00:37:36 it looks like a robot.

00:37:37 It's like beefy and burly, it's like chiseled,

00:37:40 but it's the right size for America.

00:37:43 How, and I'm trying to think back,

00:37:46 'cause around that time, you know,

00:37:48 Telluride, Kia Telluride was our SUV of the year,

00:37:50 and it had a lot of those characteristics,

00:37:53 like really--

00:37:54 - And it looked super premium.

00:37:55 - Super premium.

00:37:56 Does that, I mean, obviously that's intentional,

00:38:01 but in your capacity, or how do,

00:38:06 I'm just super curious as to how Kia

00:38:08 tries to set itself apart within the group

00:38:11 and go to market with these, 'cause all the,

00:38:13 again, the Hyundai Motor Group in general,

00:38:15 all the products are doing, have been awesome.

00:38:18 - Right.

00:38:19 - And then, but--

00:38:20 - And I mean, I know that there's the,

00:38:22 there's a three-row Hyundai version of the,

00:38:24 even the Ioniq 7 or something coming, you know, so.

00:38:28 - How do you differentiate, and how do you,

00:38:30 you guys are all trying to,

00:38:31 but also kind of going after the same market,

00:38:32 especially as these, 'cause these EVs,

00:38:34 these three-row, the big ones are gonna be

00:38:36 on the more expensive, more of the premium side.

00:38:38 - Right.

00:38:39 - Kind of all in each other's swimming pools.

00:38:40 - Right.

00:38:41 - Or swim lanes.

00:38:42 - Well, I think, you know,

00:38:43 principally the differentiation is from a design standpoint.

00:38:48 So, Kareem Habib, he and the studios around the world,

00:38:53 Irvine and Frankfurt, they have a really good vision

00:38:59 of what the brand needs to be

00:39:04 and how the design communicates that.

00:39:10 And, you know, we have our own studio in Korea,

00:39:13 we have our own studio here, Kia is a separate company,

00:39:16 so we're working along our own path,

00:39:21 but we have access to this toolbox of the platform

00:39:24 and the engineering and that kind of thing.

00:39:26 That's the way I see it, does that help?

00:39:30 - Yeah, yeah, yeah.

00:39:31 - Okay. - Yeah, okay.

00:39:32 - Let me ask you this question, though.

00:39:33 You said, you know, 2018, '19, start talking about EV9.

00:39:38 Now it's late 2023, it's still not on sale.

00:39:42 And you said, hey, you just said a minute ago,

00:39:43 let's step on it.

00:39:45 I thought one of the great things about EVs,

00:39:47 especially when iterations off the platform,

00:39:49 is that you can get them to market quicker.

00:39:51 Like this one, is this pandemic-related global dragging?

00:39:55 - Well, okay, so in that timeframe,

00:39:59 you had EV6 that wasn't even on the market yet.

00:40:02 So they were working on that.

00:40:03 And this was in the earliest stages of development.

00:40:06 So this is talking about the concept, the package,

00:40:10 the dimensions, what's feasible, those kinds of things.

00:40:12 - Right, but it's an iteration of a platform

00:40:15 that you've built.

00:40:16 - That's true.

00:40:17 - And I thought, you know, I always heard,

00:40:19 like, to build a new car, gas-powered, is four years.

00:40:22 - Yeah. - End to end.

00:40:23 But in EVs, you can bypass a lot of that.

00:40:26 Especially iterating platforms,

00:40:27 you can bypass a lot of that.

00:40:28 - Well, to be fair, it's been on sale in Korea since May, so.

00:40:33 - Okay, good enough, good enough.

00:40:34 Yeah, yeah, that's fair, okay.

00:40:35 - And by the way, let's talk a little bit about it,

00:40:37 'cause it is kind of mind-blowing that the same,

00:40:40 using the same platform, and again,

00:40:43 for you casual listeners, like, all cars built these days,

00:40:47 they all share, you know,

00:40:49 unless you're like a super one-off exotic car,

00:40:51 they're all sharing different components.

00:40:53 - Yeah, the best, real quick, the best example of that is,

00:40:55 I think, is the Volkswagen Group, the--

00:40:58 - MEB.

00:40:59 - The M, MEB, the, whatever,

00:41:03 the one that is both an Audi A4 and a Lamborghini Urus

00:41:07 is the same platform, MEB Evo 2, that's the platform.

00:41:10 - Right.

00:41:11 - Like, that's platform sharing.

00:41:12 - You move stuff around.

00:41:13 Like, how do you, it's so wild to me

00:41:14 that you can get a vehicle that is relatively compact,

00:41:17 although deceptively large, actually.

00:41:19 EV6 in pictures looks quite small,

00:41:21 but you get up next to it, I guess it's--

00:41:22 - It's a good size vehicle. - It's a good size vehicle.

00:41:24 - Pretty big vehicle.

00:41:24 - But the EV9 looks even, like, it looks like two sizes up.

00:41:27 And it really, it kind of is, right?

00:41:30 - Yeah, it is. - In the marketplace.

00:41:31 - It is, it's bigger than a Telluride,

00:41:33 which is a big vehicle, right, to begin with.

00:41:35 - Wow, I mean, hang on, for Americans, it's a--

00:41:38 - Okay, midsize. - Light heavyweight.

00:41:40 (laughing)

00:41:42 Yeah, it's not, you know, again,

00:41:45 you know, go look at an Escalade.

00:41:46 That is a big vehicle. - Right, right, right.

00:41:48 - To that point, and it was a real sideways way

00:41:50 to get into it, what is this thing you brought us here?

00:41:53 This plastic metal mylar,

00:41:57 I said it looks like a coach's--

00:41:58 - Yeah, here, I'll hold it up for the cameras.

00:42:00 - Clipboard.

00:42:01 - Those are some EV battery cells.

00:42:04 So it's always, I think it's always fun

00:42:06 to see what they look like, how heavy they are,

00:42:09 what the package is, what the size is.

00:42:11 There's 456 of these cells in an EV9.

00:42:15 So you can imagine how do you package those

00:42:18 and how do you manage the mass.

00:42:21 - Johnny's a, he's a amateur strongman,

00:42:25 so he lifted up this quite, this is probably,

00:42:29 this is what, less than 20 pounds?

00:42:30 - It's about 20.

00:42:31 - No, this is probably like--

00:42:32 - Maybe 12?

00:42:33 - No. - Eight, 10 pounds.

00:42:34 - Eight pounds, yeah.

00:42:35 - It's weak, it's something. - It's a gallon of milk.

00:42:36 Yeah, a gallon of milk.

00:42:37 But how do you cool this?

00:42:40 - So, good point.

00:42:41 So, okay, these came out of a,

00:42:43 actually an air-cooled sole EV,

00:42:45 so they're kind of old. - Ah, okay, yeah, yeah, yeah.

00:42:48 - But you get the gist on the pouch-type package

00:42:51 and the size and the weight and everything,

00:42:53 and this is actually the heating element that goes with that.

00:42:55 And on the sole, they were air-cooled, so--

00:42:59 - So you just blow air at 'em.

00:43:00 - Exactly, but currently, the EV6,

00:43:04 the packs in the EV6 and the EV9,

00:43:06 there's a cooling plate on the bottom.

00:43:08 So there's coolant that runs through this aluminum plate.

00:43:11 - Are you still doing pouches on the--

00:43:12 - Yes.

00:43:13 - Okay, so you're not, 'cause I know like,

00:43:15 like Lucid, for instance, who, in my mind,

00:43:17 they're the cutting edge of EV tech, that's my opinion.

00:43:21 They're cylinders, and they do have a cooling plate

00:43:24 on the bottom, but--

00:43:26 - Who else is cylinders, Johnny?

00:43:27 - Well, Tesla does cylinders, but what they do

00:43:30 is they do this weird snaking, cooling snake thing,

00:43:33 which is apparently insanely inefficient,

00:43:35 according to some guys that know at Lucid.

00:43:38 And so, so you guys are going with pouches.

00:43:42 - Yeah, we have pouches.

00:43:43 - So what's the upside of pouches versus the downside?

00:43:46 What's, there's gotta be a reason why

00:43:48 you're not using cells or, you know, round cells.

00:43:50 - Yeah, I think, and I'm not an expert on it,

00:43:53 but I'll do the best I can.

00:43:54 - Sure, sure.

00:43:55 - So I kind of think that the,

00:43:58 there's some sort of engineering philosophy behind it, too.

00:44:01 Like, we've been working with pouches for 10 years,

00:44:03 so I think our relationship with SKON

00:44:06 and LG Energy Systems affords us that.

00:44:10 They've gotten pretty good at it.

00:44:11 And there's advantages either way.

00:44:13 Packaging is one of 'em.

00:44:15 - Right.

00:44:16 - But, you know, Tesla uses cylindrical.

00:44:20 They also, for their LFP, I believe, are prismatic, right?

00:44:23 So they're like little boxes, right?

00:44:25 So, and Volkswagen, too, I think they have prismatic

00:44:30 and pouches, I may be wrong on that, but, so it depends.

00:44:33 - Well, I know, like, for instance, just so we know 'em,

00:44:35 like, you know, Rawlinson at Lucid, he was, you know,

00:44:38 he's the chief engineer of the Model S.

00:44:40 The Air is sort of Model S 2.0, really,

00:44:44 and, you know, he was using cylinders

00:44:46 and still using cylinders.

00:44:47 - But they use cylinders because, originally,

00:44:49 the technology came from laptop batteries.

00:44:51 - Right, that's right.

00:44:52 - And that was what's most, those were widely available.

00:44:55 - When I say cylinders, though, I mean,

00:44:56 they look like a D battery, like a D battery cell.

00:44:59 - Yeah, yeah, yeah, but back when, again,

00:45:02 original Model S, Roadster and original Model S,

00:45:04 they were like, who's supplying all these batteries?

00:45:06 Can we get them in there roughly in the shape,

00:45:08 versus, laptops are not using laptops.

00:45:11 - Right, that's a good point, because you had 18650s

00:45:13 and 2170s and now 4680s and all that.

00:45:16 So I think you're right that the battery cell

00:45:19 manufacturing industry manufactured a cylindrical canister.

00:45:24 - Yeah, yeah, yeah, yeah, and so, yeah,

00:45:26 I was just curious, like, I can see the advantage,

00:45:30 disadvantage of both.

00:45:31 I was just curious, like, why stick with a pouch?

00:45:34 And again, you know, I always, you know,

00:45:37 you come back to Lucid, like, these people sell a vehicle

00:45:40 for over a year now that goes 500 miles on a charge

00:45:43 and the battery's not that big.

00:45:44 It's, you know, it's a 107 kilowatt hour pack.

00:45:47 It's just super efficient.

00:45:48 - Right.

00:45:49 - And they know how to cool it.

00:45:50 - Right.

00:45:51 - And it was explained to me that cooling the bottom

00:45:56 of a cylinder, which they, again, they screwed up,

00:45:58 Gordon Rawlinson, when he did the Model S,

00:46:01 he screwed up by doing the snaking on the side

00:46:03 of the cylinders, very inefficient way to cool.

00:46:06 Bottom of the cylinders, very efficient way to cool.

00:46:08 And a lot of other advantages.

00:46:10 So I was just like, okay, you know, you, like,

00:46:13 what's the size of the battery in the EV9?

00:46:15 - 99.8.

00:46:17 - Okay, so, you know, it's not, I don't know the range,

00:46:20 but I'm gonna guess it's nowhere near 500.

00:46:22 So like, maybe--

00:46:24 - 300 on a good day.

00:46:26 - Yeah, so like maybe Lucid's onto something?

00:46:29 Maybe cylinders are--

00:46:30 - Well, let's, hey, you're talking to a long range guy.

00:46:32 - Oh, exactly.

00:46:33 - So this is a good question.

00:46:34 - That's defining, okay.

00:46:35 - He brought the batteries.

00:46:37 So let's talk about it.

00:46:38 What, in your crystal ball, as much as you can tell us,

00:46:41 there's so much, I feel like, or maybe you can,

00:46:44 no, you're wrong, everybody's selling you something.

00:46:46 What is the future for batteries in EVs?

00:46:50 Like, we had a guy sitting in the chair

00:46:51 from an LFP battery supplier.

00:46:55 He's very compelling.

00:46:56 They have this unique, it's a Gemini, like it'll be--

00:46:59 - Well, it's two different battery chemistries in one box.

00:47:01 - Long range, short range.

00:47:02 Like, what, when you look at your crystal ball,

00:47:05 are you gonna be using pouches by 2030?

00:47:08 Or is there a solid state?

00:47:10 Are we structural batteries?

00:47:11 But, you know, like all that, what's going on?

00:47:13 - Yes and yes and yes.

00:47:14 (laughing)

00:47:16 So here's, I think about it like this.

00:47:20 The lithium ion pouch-based battery that we're looking at,

00:47:25 that's gonna be with us for a long time, maybe decades.

00:47:28 The density is gonna continue to get better

00:47:32 and better and better.

00:47:33 And our, Kia's history on that has shown that.

00:47:36 With you look at the Soul EV to the Niro EV

00:47:39 to the EV6 and then the EV9, it's just incredible how--

00:47:42 - It's ramping up, yeah.

00:47:43 - Yeah, it's really impressive.

00:47:45 So I think that's gonna continue.

00:47:46 There's still some room left in that to get ever richer,

00:47:51 ever more energy-dense cells.

00:47:57 Now, the parallel to that would be the introduction of LFP,

00:48:01 a lot of LFP.

00:48:02 I mean, look at GM, Rivian.

00:48:05 Stellantis has a relationship with Samsung.

00:48:09 That's a signal.

00:48:10 And so forth, and so forth.

00:48:11 - LFP is lithium ion phosphate.

00:48:13 - That's right, that's right.

00:48:14 So it takes out some of the other--

00:48:19 - Cobalt, manganese.

00:48:20 - That's right, that's right.

00:48:22 - Graphite.

00:48:23 - That's right, that's exactly right, Johnny.

00:48:24 And you have a lower cost basis by 25 or 30%.

00:48:28 - But they're slightly less energy-dense, right?

00:48:30 - That's right.

00:48:30 - There's a tech trade-off.

00:48:31 You get slightly worse batteries for the same weight.

00:48:35 - Yeah, but cheaper.

00:48:38 - But cheaper.

00:48:38 - And less conflicted.

00:48:39 - Less conflicted, yeah.

00:48:41 - But there's a lot of advantages to LFP.

00:48:43 And so there's a couple things

00:48:45 that are kind of converging here.

00:48:46 One is we need to shift the price curve

00:48:51 and the cost curve to the left.

00:48:53 We need to make the cars more affordable, right?

00:48:55 So if I'm a product planner or product manager,

00:48:58 I want a lower price point,

00:49:00 which means I need a lower cost basis.

00:49:01 So as an industry, we've got to do that.

00:49:03 And that's happening.

00:49:04 And that's good.

00:49:05 - And LFP allows for that

00:49:06 because they're cheaper than lithium ion.

00:49:08 - That's right.

00:49:09 - I'll tell you what else allows for it.

00:49:11 The one we started with,

00:49:12 which is building 30,000 fast charging stations

00:49:16 all around the country,

00:49:17 and then putting a smaller battery in it.

00:49:19 And you don't have to go 300 or 500 miles.

00:49:22 - That is exactly it.

00:49:24 - That's the bigger picture.

00:49:25 - Right, that's exactly it.

00:49:27 And so firstly, foundationally,

00:49:30 infrastructure is like the cure-all for everything.

00:49:33 And what I mean is it's good for charge anxiety.

00:49:36 It's good for the industry in terms of

00:49:39 building the confidence by the consumer.

00:49:43 Hey, there's another charger, there's another, they work.

00:49:45 The word on the street is they work.

00:49:47 Right?

00:49:48 But then also for us,

00:49:50 we know that a 250 mile EV can work for a lot of people.

00:49:55 And it can work for,

00:49:57 what we get when we talk to a lot of people

00:50:00 who are EV graduators,

00:50:01 they realize they really don't need

00:50:03 three or 400 miles range.

00:50:04 Yeah, it's nice, but-

00:50:04 - They can stay in this forever.

00:50:05 - They can live their life,

00:50:08 but the hangup is the infrastructure.

00:50:10 And if the infrastructure was fixed,

00:50:12 then they could, and they could,

00:50:14 LFP likes to be DC charged.

00:50:16 You can hammer those and they can charge it quickly.

00:50:20 And they can go from here to wherever they want to go.

00:50:22 And it's no problem.

00:50:23 That's kind of the vision.

00:50:25 And then for us, we're saying, okay,

00:50:29 let's reduce the cost.

00:50:32 Let's reduce the price.

00:50:33 That gives us more material to make more EVs with

00:50:37 because critical minerals and lots of other elements

00:50:39 are getting harder and harder to find.

00:50:43 So it's kind of a,

00:50:44 so infrastructure winds up being this

00:50:47 win-win for everybody.

00:50:49 The LFP part of it also can work

00:50:52 for lots of other kinds of vehicles,

00:50:54 like delivery vehicles, right?

00:50:55 They don't need 300 miles, 200's enough.

00:50:58 - Right.

00:50:58 - They can charge to the depot.

00:50:59 So now we're saving-

00:51:00 - In fact, 200's probably overkill.

00:51:01 - It may be.

00:51:02 Yeah, it may be.

00:51:03 - But you want, again, that chemistry

00:51:04 that can be fast-charged repeatedly without degradation.

00:51:08 - And then mindlessly 100%.

00:51:10 Yeah, yeah, yeah.

00:51:11 - Exactly.

00:51:12 - 'Cause that, just, if you're listening

00:51:14 and you've never spent a lot of time with an EV,

00:51:18 there's strategy involved with the charging.

00:51:20 You don't just charge to 100%

00:51:22 because that's bad for most types of batteries.

00:51:25 - For the long term.

00:51:26 - Yeah, you want to kind of,

00:51:27 and you don't run it down to zero.

00:51:29 You kind of want to stay in between 80 to 70 to 20.

00:51:33 - The sweet spot.

00:51:34 - Kind of the sweet spot.

00:51:35 And you're not using, it's kind of weird.

00:51:36 You're not using the whole battery.

00:51:37 - That's right.

00:51:38 - And then every once in a while you do a road trip

00:51:39 and you'll go 100%, but you still don't want to get,

00:51:42 it's very bad if you run an EV out of juice.

00:51:45 It's a bad thing to do.

00:51:46 - Right, right, right.

00:51:48 That's right.

00:51:49 This is great.

00:51:49 So the thing is-

00:51:52 - But real quick before we get there,

00:51:54 solid state, solid state.

00:51:55 Because Toyota made some big claims.

00:51:59 2025, 900 mile range, solid state battery.

00:52:02 You know, it's going to be made of metal,

00:52:04 well 3D printed, whatever they're going to do.

00:52:06 Are they nuts?

00:52:07 Is that, are you looking at this?

00:52:08 What's going on?

00:52:09 - Yeah, we're looking at this.

00:52:10 And the group, Hyundai Motor Group,

00:52:13 has more or less been on record saying

00:52:16 that they'll have solid state before 2030

00:52:19 in commercial production.

00:52:20 That there will be, we'll call it pilot production

00:52:24 or early production, you know, a couple of years before that

00:52:27 they have a battery roadmap that they've shown.

00:52:31 - That's like four years away.

00:52:32 - Yeah.

00:52:33 - And what does-

00:52:35 - No, I mean, that's cool.

00:52:35 What is the advantage of solid state?

00:52:36 - Yeah, so in other words-

00:52:37 - Thermal runaway.

00:52:38 - Solid state compared to lithium ion

00:52:41 or lithium iron phosphate.

00:52:42 - We're speaking in code.

00:52:43 - That's fine, yeah.

00:52:44 - Is it thermal runaway primarily?

00:52:45 - Thermal runaway is one.

00:52:46 - That's fire.

00:52:47 - That's fire.

00:52:48 (laughing)

00:52:50 - What a great term.

00:52:51 - It is, I love it.

00:52:52 It's my favorite.

00:52:53 So battery fires, people are freaked out about it

00:52:55 even though as Johnny likes to mention,

00:52:56 there are more internal combustion fires

00:52:58 going on every day.

00:52:59 Not only that, look, there's 121,000 cars

00:53:02 catch on fire in the US or something like that a year.

00:53:06 Very few EVs, no, hey, there's less EVs.

00:53:08 Well, what's the rate?

00:53:09 Oh, look, gas cars catch on fire three times

00:53:11 as often as EVs do.

00:53:13 - Right.

00:53:13 - All things being equal.

00:53:14 - So solid state is a solution for some of that

00:53:17 because it's solid.

00:53:19 It's not liquid.

00:53:20 - That's right.

00:53:21 That's right.

00:53:22 - But what's the other advantage?

00:53:23 We can't just be worried about fire.

00:53:24 - So it's gonna be density.

00:53:28 - So it's more energy dense.

00:53:29 - That's right.

00:53:30 - Yeah.

00:53:30 - Yeah, and mass.

00:53:34 - Be lighter.

00:53:35 - Yeah, so you'll have a packaging advantage.

00:53:37 You'll have a density advantage.

00:53:40 We may or may not have a cost advantage.

00:53:42 That's another factor.

00:53:45 - Pick two, right?

00:53:46 - Yeah, yeah, yeah.

00:53:47 - Yeah, and that's, so we may start to see

00:53:49 solid state emerge on luxury cars,

00:53:52 or I think even Toyota has said they're gonna try it out

00:53:56 on hybrids first and then work them

00:53:58 into electric vehicle production first.

00:54:00 - And so like this battery pack

00:54:02 that's sitting in front of us here,

00:54:03 if you're saying this is eight pounds,

00:54:04 456 of them, quick math, it's a ton, right?

00:54:07 - That's right.

00:54:08 - It's about a ton.

00:54:09 - Yeah.

00:54:10 - What would a comparable solid state battery weigh?

00:54:13 One ton for this thing.

00:54:14 - So probably not half, but maybe 60 to 70% of this.

00:54:19 - Wow.

00:54:21 - That's huge.

00:54:22 - That's compelling because, yeah,

00:54:23 'cause if you can get the same range at 60% of the weight,

00:54:27 like, you know, that's game changing.

00:54:31 - Well, true or false,

00:54:32 is weight the final frontier for all EVs?

00:54:34 Mass reduction?

00:54:36 - You know, it depends on who you talk with.

00:54:38 - Okay.

00:54:39 - Because on the one hand, we've heard it doesn't matter.

00:54:42 On the other hand, from a regulatory standpoint,

00:54:46 it does matter, and it matters a lot in terms of like--

00:54:48 - Let's talk about that.

00:54:49 Why does it matter from a regulatory standpoint?

00:54:51 - So, okay, we're trying to meet CAFE,

00:54:56 greenhouse gas, and ZEV targets, right?

00:54:59 - CAFE, oh, that's it, Corporate Average Fuel Economy.

00:55:02 - That's right.

00:55:03 - Okay, what was the second one you said?

00:55:03 - That's a big one 'cause you get fined.

00:55:05 - That's right.

00:55:05 - Yeah.

00:55:06 - And greenhouse gas, GHG.

00:55:07 - GHG, and then ZEV, Zero Emission Vehicle.

00:55:10 - That's right.

00:55:11 Those are the three overarching regulations there.

00:55:14 - And this is what you spend most of your time with.

00:55:16 - Yes.

00:55:17 (laughing)

00:55:18 - Okay.

00:55:19 - Keep going.

00:55:20 - Go ahead.

00:55:20 - So, CAFE is fuel economy, right?

00:55:25 So, EVs on a dyno in the laboratory

00:55:30 produce extraordinary fuel economy,

00:55:34 like hundreds of miles per gallon.

00:55:36 You know, the label number--

00:55:37 - And MPGE, but yeah, yeah.

00:55:39 - Yeah, yeah, and then sort of the laboratory MPG version

00:55:42 of that is huge.

00:55:44 So, I always like to look at like an F-150 Lightning

00:55:48 is a perfect example.

00:55:49 So, have we talked about the footprint?

00:55:53 - You can show it.

00:55:54 - Okay, so fuel economy and greenhouse gas

00:55:58 uses something called the footprint, right?

00:56:01 It's track width times wheelbase.

00:56:04 And the regulators, EPA and NHTSA,

00:56:09 they provide these curves that look like this.

00:56:13 And each model year, that curve, and this is MPG.

00:56:18 I'm gonna get this wrong, but you get the gist.

00:56:20 - No, this is great, you're amazing.

00:56:21 - Okay.

00:56:22 - Upside down drawing.

00:56:23 - So, this is like Leonardo da Vinci after a few drinks.

00:56:27 (laughing)

00:56:28 - This is great.

00:56:29 - Pretty good, pretty good.

00:56:29 - So, you place your car's footprint

00:56:33 on this curve that's given to you,

00:56:35 and that becomes the fuel economy target, right?

00:56:38 So--

00:56:39 - The bigger it is, the crappier it's gonna be.

00:56:40 - The bigger it is, the lower target.

00:56:42 - The lower the target, yes.

00:56:42 - So, there's a couple things here.

00:56:44 There's a couple important things.

00:56:45 This, imagine this being 60 miles per gallon, right?

00:56:50 This is part of the reason you're seeing cars

00:56:52 like Fiesta, Sonic go away,

00:56:55 because there's no way you're gonna get that car

00:56:56 to hit 60 miles per gallon.

00:56:57 You can do this, but it's gonna cost so much money.

00:57:01 So, a short wheelbase, narrow track car

00:57:04 is basically being engineered out of the market.

00:57:07 - By regulation.

00:57:08 - Yes, yes.

00:57:10 - Because there's no way to cheaply electrify 'em,

00:57:13 and gasoline, even a Prius, awesome, amazing technology,

00:57:18 56 miles per gallon.

00:57:20 - That's right, that's right.

00:57:22 And by the way, it gets higher and higher

00:57:23 and higher every year.

00:57:24 - Yeah, yeah, yeah, interesting.

00:57:26 - So, the other part of this is that--

00:57:29 - Real quick, this is part of CAFE.

00:57:30 - This part of CAFE, and then greenhouse gas

00:57:32 is actually the inverse of this,

00:57:34 because as you consume less fuel,

00:57:36 you're emitting less emissions.

00:57:37 So, you could basically do a mirror image of this,

00:57:40 and that becomes your greenhouse gas curve.

00:57:42 - Got it.

00:57:42 - What's this called, what curve is this called?

00:57:44 - Technically, it's called the Volpe curve.

00:57:46 But we just refer to it as the CAFE curve.

00:57:49 It's also the reason why every successive vehicle

00:57:52 you've seen since about 2012,

00:57:54 longer wheelbase, wider track.

00:57:56 Because the--

00:57:57 - Ride quality, I always thought it was ride quality.

00:57:58 - Well, you're right, Johnny.

00:57:59 It's pitch stability, it's second row package,

00:58:04 it's proportions, everybody loves a longer wheelbase.

00:58:07 - Looks better.

00:58:08 - It looks better.

00:58:10 And so, it's why the engineers,

00:58:14 why we wanna get as far out on this curve

00:58:15 as we possibly can to lower that target.

00:58:17 All right, so--

00:58:20 - But the problem is, as you get bigger vehicles,

00:58:22 you need bigger batteries and bigger motors

00:58:25 and everything's heavier.

00:58:26 - That's exactly right, Johnny,

00:58:27 and you gotta manage that.

00:58:28 And that's mass, mass, and it's materials, it's cost.

00:58:32 How much high-strength steel, how much aluminum.

00:58:35 What is, so, okay--

00:58:36 - And also battery size.

00:58:37 - That's right.

00:58:38 - You know, lithium ain't cheap.

00:58:40 - And then we'll layer on top of this,

00:58:41 we had a great conversation at SV the Year

00:58:43 with one of our guest judges, who I won't name on this

00:58:45 'cause he didn't work for the group.

00:58:47 But he said the biggest problem with EVs now

00:58:51 and how disruptive they are to the traditional legacy

00:58:55 OEM model is that it used to be the larger the car,

00:58:58 the more the margin you would get in selling it.

00:59:01 Because it's really easy to turn an F-150

00:59:05 into a Navigator and just throw some leather in it,

00:59:07 and then the leather might cost another two grand,

00:59:09 but you can charge $10,000 on top of that.

00:59:12 You don't get the same advantages with an EV

00:59:14 because the larger you have to make it,

00:59:16 the battery is so expensive.

00:59:18 And that makes it harder to support the range

00:59:20 and the performance of a large car.

00:59:23 - That's right.

00:59:24 - It's wild.

00:59:25 - Okay, so, all right, so CAFE,

00:59:26 so this is the CAFE regulatory problem.

00:59:29 Greenhouse gas, if you're an EV,

00:59:32 does the government just say you're zero?

00:59:34 Or do they care about manufacturing of the battery

00:59:37 or anything like that?

00:59:38 - That's not a factor.

00:59:39 - So you're just zero if you do an EV?

00:59:42 - Tailpipe emissions, that's right.

00:59:43 - Is zero, and then the third one was?

00:59:46 - ZEV, zero emission vehicles.

00:59:47 - And so that's instant win with an EV?

00:59:50 - Yeah, basically, basically.

00:59:53 - Why wouldn't it be?

00:59:54 Why not 100%?

00:59:55 - Well, you have, yeah, so what the ZEV rules say

00:59:59 is that you need to sell EVs, fuel cells,

01:00:01 and you can sell plug-in hybrids, but not--

01:00:03 - Well, they say you have to sell fuel cells.

01:00:06 - They say you can choose between EVs and fuel cells.

01:00:08 - Okay, got it, okay.

01:00:09 - Yeah, basically, yeah.

01:00:11 - Actually, you know, a lot of people,

01:00:13 hydrogen fuel cells we're talking about,

01:00:15 a lot of people, I read way too many comments,

01:00:18 I've wasted way too much of my life reading comments,

01:00:20 a lot of people say, "Ah!"

01:00:20 - You said that those are the best parts?

01:00:22 - EVs are BS and they're evil,

01:00:25 and hydrogen's the future.

01:00:27 We know how Hyundai Corporation feels about fuel cells

01:00:31 for big trucks, but what about passenger vehicles?

01:00:33 - How does Kia feel about--

01:00:34 - How does Kia feel about fuel cells for passenger?

01:00:37 - So we've kind of hung our head on EVs.

01:00:41 We've had this conversation with the group

01:00:43 for many, many years, and the view is that

01:00:48 for us to electrify and be commercially successful,

01:00:53 EVs are the path forward.

01:00:55 - Yeah.

01:00:55 - The group has wonderful fuel cell technology,

01:00:59 you know, the Axion truck and--

01:01:01 - We sat in it.

01:01:02 - Yeah, it's really--

01:01:04 - It's cool.

01:01:04 - It's something to behold, it's pretty amazing.

01:01:07 And I think that the feeling is that

01:01:10 commercial applications for hydrogen

01:01:12 are gonna get a lot more traction, so to speak,

01:01:14 than retail, civilian vehicles, yeah,

01:01:18 for lots of reasons, and it's easy just to say,

01:01:21 "Well, it's infrastructure."

01:01:22 There just isn't enough infrastructure.

01:01:23 - Yes, because as bad as EV infrastructure is,

01:01:26 you have electricity at your house,

01:01:28 you do not have hydrogen at your house.

01:01:29 - Exactly, Johnny.

01:01:30 So we've had this conversation with the head office

01:01:35 many times, "What about this, what about that?"

01:01:36 No, no, no, we're gonna stick with EVs,

01:01:38 that's the path forward, that kind of thing.

01:01:40 - And then you mentioned fuel cell/EV,

01:01:44 but also hybrid, like is--

01:01:46 - Plug-in hybrid.

01:01:47 - Is there, plug-in hybrid, so is,

01:01:50 so a plug-in hybrid can't count as ZEV?

01:01:52 - It can.

01:01:53 - It can?

01:01:54 - Yeah, yeah, it is.

01:01:55 - As long as it has EV-only driving range, right?

01:01:57 - Oh, that's, really?

01:01:59 I don't like that law, that's not ZEV,

01:02:01 that's like, maybe ZEV.

01:02:02 - Well, this is--

01:02:03 - Maybe not ZEV.

01:02:04 - This is a lot of internal friction

01:02:06 within the Air Resources Board in the industry.

01:02:08 - Yes, good.

01:02:09 - Because the Air Resources Board's argument is that,

01:02:13 well, PHEV owners don't plug in,

01:02:15 you're driving around with a trunk full of bricks.

01:02:17 - Exactly, right.

01:02:18 - You're only getting it for the HOV decals.

01:02:20 - And when it kicks on, because the cats are cold,

01:02:24 and you're at highway speed, you have, what is it,

01:02:27 like, two minutes of the most noxious crap

01:02:30 coming out of a tailpipe.

01:02:32 They're dirtier than gasoline-powered cars

01:02:34 for that two minutes.

01:02:35 - That's exactly their argument, Johnny, exactly.

01:02:38 So, this is important because,

01:02:40 so in our current ZEV rule, we're allowed to sell PHEVs,

01:02:44 we don't get the credit we do for an EV,

01:02:46 we get about .7 credits, and the EV gets us about four.

01:02:51 It actually gets us four.

01:02:53 Now, all that changes in 2026 with a new set of ZEV rules.

01:02:57 So, to your point, Johnny, the Air Resources Board has said,

01:03:00 yeah, people don't charge, da-da-da-da-da.

01:03:05 So, here's what we're gonna do.

01:03:06 We're gonna make the range requirement 49 miles.

01:03:11 - Ooh, that's gonna mess up a lot of people.

01:03:15 - You don't get any credit for less than 49.

01:03:17 - Oh, boy.

01:03:18 Jeep is very sad right now, go ahead.

01:03:20 - Yeah, you need a certain size onboard charger,

01:03:25 that's another one.

01:03:25 - What do you mean by size charger?

01:03:27 - The onboard charger has a capacity,

01:03:30 you know, like 3.3 kilowatts, or 11, or what, yeah.

01:03:33 - Ah, okay, so, let's say the Kee and Nero PHEV,

01:03:38 what size charger is that?

01:03:44 - That is a 3.3.

01:03:46 - So, you're gonna have to update that by '26.

01:03:49 - That's right.

01:03:50 - So, this really is your old job.

01:03:50 - That's right, but all these things affect the product

01:03:53 and the strategy and the volumes and all of this,

01:03:55 it is a huge matrix.

01:03:57 And then the other point that goes to your point

01:04:00 about the emissions.

01:04:02 - The NOx, and we say, this is not CO2, this is NOx.

01:04:05 - NOx and HC, hydrocarbons, right.

01:04:07 Is what they call--

01:04:08 - Nitrogen oxide, hydrocarbons.

01:04:09 - Thank you, high-powered cold start.

01:04:11 So, that means that when the engine does start,

01:04:16 that the emissions need to be what they are

01:04:20 when the cats are hot.

01:04:21 - Ah.

01:04:22 - Yeah, so all that's--

01:04:22 - So, how do you do it?

01:04:23 - You gotta preheat, pre-warm.

01:04:25 - Well, I send electricity to the cat.

01:04:27 - It's really difficult.

01:04:28 - Yeah.

01:04:29 - And this is where you have these arm cross discussions

01:04:32 with the engineers.

01:04:32 - Right.

01:04:33 - We're over here saying, but, but, but,

01:04:34 there's a market for these people love these.

01:04:37 They pay a premium.

01:04:38 Just the other day, I went and looked for,

01:04:40 what is a used Sereno PHEV?

01:04:43 It's about what is one for when it's new.

01:04:44 - Yeah.

01:04:45 - With 20,000 miles on it.

01:04:46 They love it.

01:04:47 - So, your engineers are like, no, let's just sell EVs?

01:04:50 - That's--

01:04:51 - Or is that sort of--

01:04:52 - The posture, the short answer is yes.

01:04:54 The posture of the company is electric vehicles

01:04:58 are the path forward and that PHEVs,

01:05:03 they're gonna become a much, much, much,

01:05:05 much smaller part of the mix.

01:05:06 - Right.

01:05:07 - A dead end on the tree of evolution.

01:05:09 - So, can you project, let's say 2030,

01:05:14 'cause right now, if you look at, you know,

01:05:18 gas cars are still the overwhelming majority

01:05:20 of vehicles sold, although it's changing.

01:05:23 In the US, EVs are now 8%, 9%?

01:05:26 - That's right, 8.2%.

01:05:27 - 8.2.

01:05:28 - Yep.

01:05:29 - And PHEVs?

01:05:30 - They're about 4% to 5%.

01:05:33 - Okay, so, let's say five, make it easy,

01:05:36 five, eight, 13, so 87% of vehicles sold

01:05:39 are still gas or diesel.

01:05:41 What is the breakdown in 2030 in the US?

01:05:44 What are we looking at?

01:05:45 - So, if I just defer to the forecast,

01:05:50 the forecasts have it between five and 7%.

01:05:53 Like, they're not going away.

01:05:54 - What's five and seven?

01:05:56 - Internal combustion.

01:05:57 - PHEVs.

01:05:58 - PHEVs remain about five to 7%.

01:06:00 - Oh, okay.

01:06:01 - Yeah.

01:06:01 And then what's the EV gas split?

01:06:03 - So, if the Biden administration's EPA proposal

01:06:08 for 2027 through '32 greenhouse gas rules go through,

01:06:16 it wants 60% nationally as EV,

01:06:19 and by 2032, 67% nationally as EV.

01:06:23 That's a very contentious topic.

01:06:25 This is part of the reason why the UAW is on strike

01:06:27 and a lot of other debate and discussion on this.

01:06:31 If those rules are proposed, there's a lot of debate.

01:06:36 It's not final.

01:06:38 It could be final next year.

01:06:40 And if they go through, that's what we're looking at,

01:06:43 60% EVs by '30.

01:06:45 - So, just to break, I'm just trying to do that.

01:06:48 So, US market is 14 million, 15 million.

01:06:51 - 15.

01:06:52 - 15 million.

01:06:53 So, 60% of 15, so we're talking like--

01:06:56 - By 2032, call it two thirds of that.

01:06:59 - Yeah, so--

01:07:00 - So, 10 to 15 million.

01:07:01 - Eight to 10 million in 2030.

01:07:03 - That's right, that's right.

01:07:04 - Now, let me ask you this, and you must look at this,

01:07:07 how sensitive are car buyers to gas prices?

01:07:11 And this may be a California question,

01:07:12 since our gas prices have exploded in the last two weeks.

01:07:16 Literally, over seven gallon.

01:07:17 Diesel's like $8 a gallon, it's insane.

01:07:19 - Yeah.

01:07:20 - And the rest of the country's still three bucks a gallon,

01:07:25 apparently, but like,

01:07:26 as, let's assume, country falls, California,

01:07:31 to some degree with cars,

01:07:33 as gas prices go up, do EVs sell more,

01:07:37 or do PHEVs sell more?

01:07:39 - Yes, they do.

01:07:41 And we still track this really closely,

01:07:44 and the sensitivity, particularly for hybrids,

01:07:48 is pretty rich.

01:07:50 Like, gas prices go up,

01:07:52 and then you'd see the hybrids go up.

01:07:54 - We see that in the traffic to stores on MotorTrend.com.

01:07:57 - Oh, sure.

01:07:58 - Yeah, it's crazy.

01:07:59 Like, people start, when they peaked during the pandemic,

01:08:02 people were losing their minds.

01:08:03 - I mean, I filled up my Alfa Romeo the other day,

01:08:07 and it was, I pulled in to the station I always go to,

01:08:11 and it was like, premium was like, 6.79 a gallon.

01:08:15 And I was like, well, actually,

01:08:17 maybe my next car isn't gas,

01:08:19 'cause I wanna buy one more gas car,

01:08:20 but maybe, I don't know, maybe.

01:08:21 - You have dominated the last series of questions.

01:08:23 I'm gonna ask him some stuff.

01:08:24 - Oh, you're feeling--

01:08:26 - Yes, that's why you shut out here.

01:08:27 Okay. - Sorry.

01:08:29 - I'm gonna ask you a bunch of random,

01:08:31 just a bunch of random--

01:08:32 - What a great partner I have.

01:08:33 - Random questions here.

01:08:34 - I'll look at Instagram, go ahead.

01:08:36 - Separate from, no, these are good questions.

01:08:38 Separate from all of this, all the long range playing

01:08:41 with, you know, with Cafe and ZEV targets

01:08:44 and all this stuff,

01:08:45 'cause we talked a little bit about weight,

01:08:47 and I saw this article.

01:08:48 Are you looking at, are you concerned at all,

01:08:51 bigger picture of how heavy all these EVs are gonna be

01:08:54 and the impact to infrastructure?

01:08:56 There was some article, I think the Atlantic

01:08:57 or something wrote about how all of our parking structures

01:09:00 in the US were built in like the 50s, 60s, 70s

01:09:04 for cars that weigh like 2,500 to 4,500 pounds.

01:09:09 And now all of these EVs are coming out

01:09:12 like 5,000 pounds plus.

01:09:14 Like-- - 7,200 pounds.

01:09:16 - Right, is that anywhere, do you guys like think

01:09:20 about this stuff or you're like,

01:09:20 this is somebody else's problem?

01:09:22 - I don't know that we view it as somebody else's problem,

01:09:27 but-- (laughing)

01:09:28 - But, put you in a corner there, sorry.

01:09:30 - You know, the one thing that's cool about the group

01:09:34 is we have access to Hyundai Steel.

01:09:36 And Hyundai Steel is a remarkable partner

01:09:40 and there's hundreds of metallurgists

01:09:42 who are constantly working on really strong,

01:09:44 really lightweight steel.

01:09:46 So, like if you look at EV6, it's not actually that heavy.

01:09:51 Even EV9, it's 5,800 pounds, but there's other utilities

01:09:56 that size that are equal to heavy.

01:09:59 So there's some advantage there.

01:10:01 But, I don't think we've really talked so much

01:10:06 about infrastructure, Ed, with respect to bridges.

01:10:09 Although, there's a street off the five on my way home

01:10:13 that says no vehicles over six tons.

01:10:16 And I was thinking, if I was driving a Hummer EV,

01:10:19 I wouldn't be able to drive on that street.

01:10:20 And it's like-- - No, 9,000 pounds, easy, easy.

01:10:23 - Sorry, sorry. - Yeah, yeah, yeah.

01:10:24 - You're right.

01:10:25 - But a semi truck or a towing a Hummer.

01:10:28 - Yeah, a Hummer towing a Rivian, no.

01:10:31 - Yeah, right, right.

01:10:32 - Am I allowed to talk yet?

01:10:33 - No, not yet.

01:10:34 (Ed laughs)

01:10:35 Okay, so let me ask you a personal question.

01:10:38 And there is only one way,

01:10:39 incorrect way to answer this question.

01:10:40 Are you a car guy like yourself?

01:10:42 - I'm a total car guy. - You're a car guy, okay.

01:10:45 - I grew up, Ed, in Chicago.

01:10:49 I went to school in Michigan.

01:10:51 A group in Chicago went to school in Michigan.

01:10:55 And my dad and my brother and my family members,

01:10:58 all my friends were totally into cars.

01:11:01 And in the neighborhood were Camaros and Challengers

01:11:04 and Chevelles and Mr. Stats with his orange Firebird

01:11:07 and my neighbor with his Corvette.

01:11:09 - We'll come back to that.

01:11:10 But in your current role then,

01:11:12 are you, is this just like,

01:11:15 you're awesome at this,

01:11:17 you've got all the numbers in your head.

01:11:18 But are you also like, man, this stuff is terrible.

01:11:20 I'm still all by team ice.

01:11:22 Are you into the EV transition?

01:11:25 Do you feel like it is inevitable?

01:11:27 Like, are you on board?

01:11:30 - Yeah, so yes and yes and yes.

01:11:32 So I'm into it.

01:11:35 It's unquestionably inevitable.

01:11:37 The degree to which is what is,

01:11:41 'cause they don't work for everybody.

01:11:43 And they work for a lot of people

01:11:45 and they work really well.

01:11:47 But there's so many moving parts to answer that question.

01:11:52 But so yes and yes and yes.

01:11:55 They're inevitable.

01:11:57 - There you go.

01:11:58 - We as an industry are gonna go off the deep end on this.

01:12:01 And so much of this is being driven by managerial philosophy

01:12:06 and we can talk a little bit about that

01:12:09 when we get to that.

01:12:10 - Ooh, that's a chart.

01:12:11 - When we look at that pretty chart.

01:12:12 - Ooh.

01:12:13 - Like--

01:12:13 - Hold it up so.

01:12:14 - Well, we'll get to that.

01:12:15 He's gonna share with us.

01:12:16 - Okay.

01:12:17 - But let's, okay.

01:12:18 So let me just ask a follow up before we get to that.

01:12:20 And then you can go, we'll go to this

01:12:21 or you can go whatever.

01:12:22 But you in your personal life

01:12:26 or if you're active in car forums,

01:12:29 what do you tell the haters?

01:12:30 Like do they talk?

01:12:31 'Cause we get, you're gonna get a bunch.

01:12:33 So in the comments below this on YouTube,

01:12:35 they're gonna be like, this is all garbage.

01:12:37 - Yeah, it's all garbage.

01:12:37 EVs are killing the planet.

01:12:38 - EVs are, you know, they're--

01:12:39 - It's a scam.

01:12:40 - I would say--

01:12:41 - Government, COVID vaccine's tracking me.

01:12:43 - Right.

01:12:44 You've highlighted a lot of, we talked about 10 minutes ago

01:12:48 about all the advancements coming to battery technology.

01:12:51 And that's the kind of thing I go back to

01:12:53 in any conversations I have, which is like,

01:12:55 look, guys, internal combustion, great.

01:12:58 We're living in the golden age of horsepower.

01:13:00 These things have never been more powerful

01:13:02 and more efficient.

01:13:03 But, and yeah, they're still iterating,

01:13:07 but more effort and resources and really smart people

01:13:11 are being put towards EVs

01:13:13 and the opportunity across the whole industry

01:13:17 to find new technologies,

01:13:19 to find interesting battery chemistry.

01:13:20 This is like unheard of.

01:13:21 Like we are, I mean, they've, they found,

01:13:24 US found like another huge lithium store, right?

01:13:28 - Not huge, the biggest ever.

01:13:30 - The biggest ever in the world.

01:13:30 - In a volcano.

01:13:31 - Right, yeah.

01:13:33 This would not be happening, no one's looking for this stuff

01:13:36 if there wasn't like this huge potential and opportunity

01:13:38 in this changeover.

01:13:40 And there's gonna be a cascade of these kinds of advances

01:13:43 across every part of it.

01:13:45 So yeah, is there some parts of it

01:13:47 that are sort of problematic right now or too expensive?

01:13:49 - Yes, but the whole point is innovation,

01:13:52 some of it unfortunately mandated by some really arcane

01:13:55 or really weird policies, but we're getting there.

01:13:58 And that's what, I'm fairly optimistic about it.

01:14:01 Where do you sit?

01:14:03 - So we're fairly optimistic about it too.

01:14:05 And I think the way you characterized it

01:14:07 is absolutely accurate, which is we're in early days.

01:14:11 It could be the second inning of a ball game

01:14:14 if you wanna make that reference.

01:14:16 And I think if you just look at the,

01:14:19 we'll call it the tech progression, for example, of Kia

01:14:24 and the industry as a whole,

01:14:25 it is remarkable what's been engineered,

01:14:28 what's in the market now.

01:14:30 And if you peek behind the curtain

01:14:32 or look in the laboratory now,

01:14:33 what's being developed is gonna blow your mind.

01:14:36 And it's--

01:14:37 - Can you give us a peek?

01:14:38 You don't have to say a name or any numbers,

01:14:41 but like what will, in 2030,

01:14:43 when the second gen EV6 comes out or whatever year

01:14:46 it comes out, what will blow my mind about it?

01:14:49 - So I think it's going to be--

01:14:52 - In broad strokes.

01:14:53 - It's going to be more range, faster charging speeds,

01:14:58 more conveniences, less concern about charging.

01:15:05 I mean, once that gets erased,

01:15:08 I think those kinds of things.

01:15:11 - Inductive, are we gonna be wireless charging?

01:15:14 Are we gonna pull into a pad in our garage and everything?

01:15:17 - In some places you will.

01:15:18 We are working on it for Kia,

01:15:21 but I think Genesis--

01:15:23 - Yeah, that's--

01:15:24 - A robot arm.

01:15:25 - There's that.

01:15:26 - Or that becomes the luxury thing

01:15:27 that Rolls Royce really wants inductive.

01:15:29 - Right, right.

01:15:31 So that'll be there.

01:15:32 That'll be there.

01:15:32 - Okay.

01:15:33 - But I think, you know,

01:15:35 every day there's news and stories about tech advances,

01:15:39 battery advances, motor design advances,

01:15:42 all those kinds of things every day.

01:15:45 And we're only seeing this much.

01:15:47 Imagine what you're not seeing.

01:15:48 - I have a pretty good idea what I'm not seeing, but yeah.

01:15:50 (both laughing)

01:15:51 - Well, and that's what does my head in about it,

01:15:53 especially, again, all you commenters

01:15:55 are about to like angrily write something.

01:15:56 It's like, guys, I mean, this is,

01:15:57 if you go back to like what hot rodding was

01:15:59 back in the '60s and '70s,

01:16:00 like it literally was like,

01:16:01 let's take the coolest parts of the space program

01:16:03 and then try to apply it to cars.

01:16:04 And the same kind of thing is going on.

01:16:06 - '40s and '50s, but yeah, yeah.

01:16:08 - But it's in the EV space, so.

01:16:11 - Yeah, no, I mean, look, I'm of the, you know, feel,

01:16:16 you know, like I always tell people this

01:16:19 when they're like, ah, you know, EVs suck.

01:16:22 And I go, you know, if a RAV4 is electric, do you care?

01:16:25 Do you lose any, well, no, I hate RAV4.

01:16:28 Okay, great, so in fact, it was electric, great.

01:16:30 And it's just really, you get down to like,

01:16:32 I just don't want my Challenger to become electric,

01:16:34 you know, and that's kind of the,

01:16:36 'cause like luxury cars are better electric,

01:16:38 SUVs and, you know, off-roaders, better electric,

01:16:42 towing, eh, I got a long way to go there,

01:16:44 we'll figure that out.

01:16:45 But like everything else, you know,

01:16:46 pure sports cars, muscle car things,

01:16:49 the weight really is, in my mind, is really problematic,

01:16:52 you know, and, you know, is good.

01:16:55 We just did another one,

01:16:56 we did a Cadillac CT5V Blackwing

01:16:59 versus even more horribly named,

01:17:02 Mercedes EQ-

01:17:05 - E-A-M-G.

01:17:06 - AMG EQE.

01:17:08 (laughing)

01:17:09 Or something like that, whatever the hell the name is.

01:17:11 But like, you know, damn, that Mercedes is quick.

01:17:14 You know, Cadillac, you know, 668 horsepower,

01:17:16 Mercedes 667, annihilation, you know.

01:17:19 But turn the wheel and like,

01:17:21 ooh, like, boy, Cadillac's a thousand times better.

01:17:24 - Right.

01:17:24 - And you know, 4,200 pounds versus 5,500 pounds.

01:17:28 - Right.

01:17:29 - So like, my rant here-

01:17:31 - Is there a question in there?

01:17:32 - Yes.

01:17:33 What are these damn solid states coming?

01:17:36 - No, I got a question for you.

01:17:38 - But do you basically agree with what I'm saying?

01:17:40 - Yeah.

01:17:41 - Is that-

01:17:42 - Yeah, and there's, I go back to, they're not for everyone,

01:17:46 but they can work really well for lots of cars,

01:17:48 for lots of people.

01:17:49 There are instances like that,

01:17:50 and there's also a lot of other-

01:17:53 - But real quick, when you say not for everyone,

01:17:57 like, who are they not for?

01:17:58 'Cause it seems like a real small group to me.

01:18:01 - So you would easily say for the charging-related

01:18:06 challenges.

01:18:11 - Apartment dwellers.

01:18:12 - Apartment dwellers, that's one.

01:18:14 And the cost part of it,

01:18:15 the cost and price part of it, right?

01:18:16 So-

01:18:17 - Yeah, what I meant was,

01:18:19 if everything turns electric tomorrow-

01:18:21 - And these were engineered out, these problems, okay.

01:18:25 - Yes, yes, yes, yes.

01:18:26 So what, but like, you know,

01:18:28 you can't really do an electric Corvette

01:18:33 that drives as good as an electric Corvette,

01:18:36 or an electric 911 that drives,

01:18:37 well, maybe Porsche has like new came and coming,

01:18:39 maybe they figured it out.

01:18:40 - Maybe they figured it out.

01:18:41 - You know, and you can't,

01:18:43 the ease of towing a house with a diesel F350,

01:18:48 I know it's not a Hyundai Kia concern, Kia concern,

01:18:54 but like long haul towing, not good with EVs.

01:18:56 - That's a challenge.

01:18:57 That's a challenge.

01:18:58 - Who, like, who, who,

01:18:59 who keeps saying it doesn't work for everyone?

01:19:01 You're talking about the present.

01:19:02 - Yeah, so that would be a really good use case, right?

01:19:06 Somebody with an F350 super crew, that's a work truck,

01:19:10 that's got to tow a big trailer,

01:19:12 maybe he has a horse, these aren't gonna work.

01:19:14 There's gotta be other solutions.

01:19:16 - Do you wanna cover this

01:19:17 before I ask you some bigger picture,

01:19:19 existential questions here?

01:19:20 - So, so this is-

01:19:21 - I'm gonna hold this up.

01:19:22 - We're gonna see it.

01:19:23 We're gonna try to get this graphic

01:19:24 to put on the screen for people,

01:19:26 but this is called the,

01:19:27 why don't you read it out for us?

01:19:28 - So in some of the presentations we do,

01:19:32 we just wanna give folks a backdrop

01:19:33 about the company's philosophy and sort of the vision.

01:19:37 And there's like three important parts here.

01:19:40 And, you know, at the highest level of the company,

01:19:44 our president in the US, Mr. Yoon,

01:19:46 and the president of the company in Korea, Mr. Song,

01:19:49 and then within the group, executive chair, ES Chung,

01:19:52 they've more or less said,

01:19:55 "Look, there's three important things

01:19:56 "we wanna focus on, sustainable energy,

01:19:58 "sustainable mobility, and sustainable planet."

01:20:01 The energy part relates to the operation.

01:20:04 And I have, you know, we're decarbonizing the products

01:20:07 and the machine that makes them.

01:20:08 So if you imagine the plants

01:20:11 and the operations around the world

01:20:12 and their electricity consumption,

01:20:14 the supply chain production,

01:20:16 those kinds of things that consume energy,

01:20:18 that's a big part of the group's,

01:20:21 the company's, Kia's footprint.

01:20:24 And that's gonna be engineered lower and lower and lower

01:20:27 through solar and wind and storage

01:20:29 and those kinds of things.

01:20:31 The sustainable mobility ties to electric vehicles,

01:20:34 purpose-built vehicles, electric vans,

01:20:36 you know, our relationship with Lyft and Uber.

01:20:40 And then the sustainable planet part

01:20:41 relates to the stuff that's in the car.

01:20:44 So the EV9's a good example of this,

01:20:45 where we're engineering out of the interior,

01:20:49 the hydrocarbons that go in to make the plastics.

01:20:51 So using a recovered fish nuts

01:20:54 and recycled PET bottles

01:20:56 and those kinds of things to make the interior parts.

01:20:59 So collectively, we're decarbonizing the machine

01:21:02 that makes the machine

01:21:03 and we're decarbonizing the products that come out of it.

01:21:06 So that's part of why the directive

01:21:11 from the highest levels of our company is,

01:21:13 you know, make more EVs, basically.

01:21:16 - This is actually, this chart is remarkably similar

01:21:19 to one I saw the BMW had.

01:21:22 They might be, I forget, yeah,

01:21:25 they're sort of carbon neutral, I think, by 2050,

01:21:28 is their plan.

01:21:29 But it was real similar.

01:21:31 And again, it's the factories that are, you know--

01:21:34 - They consume a lot of energy.

01:21:36 - This is, yeah, GM timeframe.

01:21:38 This is kind of why we're here, to be honest.

01:21:39 Like, we kicked this thing off

01:21:41 after everybody started to put out their carbon,

01:21:45 their all-EV and their carbon neutrality targets

01:21:48 about three years ago.

01:21:48 - So the original name of the inevitable was--

01:21:50 - Project 2036?

01:21:51 - Project 2036, great name.

01:21:53 - Great name.

01:21:54 Wow, just rolls right off the tongue.

01:21:57 Okay, let me ask you an existential question here,

01:22:00 because this is a great way to crystallize

01:22:03 what the group is doing in terms of the goals.

01:22:05 And again, you said it the best at the end.

01:22:06 This is why there's such a strong push towards EVs.

01:22:09 What happens when in 2035, '40, '45,

01:22:15 when there are all these EVs on the roads,

01:22:18 and they're all,

01:22:20 and this is where you can feel free to fight me,

01:22:22 all the same,

01:22:23 is this, in your long-range planning,

01:22:25 will all EVs be commoditized

01:22:30 in the sense that they're going to all be quiet

01:22:33 and they're all going to be fast, right?

01:22:35 These things are all doing sub-three seconds to 60, right?

01:22:38 - Well, not all, but--

01:22:39 - But, yeah, I mean, but they could, right?

01:22:41 - The capability's there, sure.

01:22:41 - Yes, but they'll all be quiet, they'll all be fast.

01:22:45 Theoretically, by then, all this charging will be fixed.

01:22:49 - Nipped in the bud.

01:22:50 - Nipped in the bud.

01:22:50 So, then it's like, have you,

01:22:53 and this is where, again, this is for the haters,

01:22:56 you basically turned a car that I love,

01:22:58 this thing that I love, into an appliance, right?

01:23:00 Like, they all kind of deliver sort of the same thing.

01:23:03 Agree, disagree, what's in the tarot cards

01:23:06 for the industry and for Kia in particular?

01:23:08 - So, I think there'll be some of that,

01:23:11 but I think that the people in the industry,

01:23:15 so, firstly, the aesthetics part of it,

01:23:18 that'll be, it'll be really clear.

01:23:21 And you know, you've heard it a million times

01:23:23 that the skateboard platforms provide

01:23:25 the designers wonderful proportions and all that, right?

01:23:29 - They can put a seat on the roof, sure, go nuts, yeah.

01:23:32 - Some of the stuff that's peaked behind the curtain,

01:23:35 Johnny, is so frickin' cool.

01:23:37 It is really exciting to see what our designers are thinking

01:23:42 and how creative they are,

01:23:45 and the latitude that EVs give the designers

01:23:48 to change that up.

01:23:50 So, I think, you know, you're not gonna see

01:23:52 a bunch of vanilla cars rolling around

01:23:54 that, you know, that's not gonna happen.

01:23:57 On the performance side of it, though, you know,

01:24:00 I think that sort of hacking an EV relative

01:24:06 to how you would kind of hack an ICE car,

01:24:08 you know, change the cam, change the intake manifold,

01:24:11 I think there's gonna be a little bit of that,

01:24:14 but not as much.

01:24:18 - I just mean, does it matter, though?

01:24:19 Will it matter?

01:24:20 Like, why would you, you wouldn't need to.

01:24:22 - You probably wouldn't need to.

01:24:23 You probably wouldn't need to.

01:24:24 But, you know, the other part of it, too,

01:24:26 is just the enthusiasts in general.

01:24:28 Maybe I'm wrong on this, but doesn't it feel like

01:24:30 there's a lot of enthusiasts who,

01:24:32 a lot of people who aren't enthusiasts anymore?

01:24:35 They're too busy.

01:24:37 I mean, people don't have time.

01:24:40 That's part of it.

01:24:41 - Well, now you're gonna take away

01:24:42 even the ability to do anything with it, right?

01:24:45 Even if you wanted to, if you had the time,

01:24:46 these vehicles don't necessarily lend themselves to be--

01:24:50 - But, okay, so, yeah, fair enough.

01:24:53 But the EV6 is a good example of what you have

01:24:57 right out of the box, or a Model 3.

01:24:58 Those cars are fast.

01:25:00 Those are really fast cars.

01:25:01 - And, you know, it's funny.

01:25:02 Like, I was up on Engineers' Crest yesterday,

01:25:05 and there was a bunch of the weekend crowd

01:25:08 who had, you know, like, Toyota 86s, GR86s, stuff like that.

01:25:13 And they weren't really tuning the engines much,

01:25:16 because I think modern engines--

01:25:17 - Well, you can't.

01:25:18 California makes it hard, too.

01:25:19 - It makes it hard, but, like, man, they were slammed.

01:25:21 They were cambered.

01:25:22 They had body kits.

01:25:24 They had paint.

01:25:24 They had custom steering wheels.

01:25:26 You know what I mean?

01:25:27 So, like, I think there's still lots of opportunity.

01:25:30 - I'm with you, Johnny, 100%.

01:25:32 And, you know, there was an EV Expo in May in Long Beach

01:25:34 that we were at.

01:25:35 - Electrify.

01:25:36 - I don't know if Gibbs is--

01:25:37 - We were there for five minutes.

01:25:38 We were there.

01:25:39 - But there was a whole section on modified cars.

01:25:41 There was a whole bunch of EVs that were,

01:25:43 just like you described, some of them were stanced,

01:25:45 but some of them were very tastefully done.

01:25:48 - And I would real quick add to your point, though,

01:25:50 real quick.

01:25:51 You know, I hear people say that,

01:25:52 but I'm also like, well,

01:25:53 look at the majority of the cars sold in this country today.

01:25:58 They kind of stink.

01:25:59 I mean, they're boring.

01:26:00 They're just, like, they're just minivans

01:26:04 cut to look like SUVs that have no off-road functionality

01:26:07 whatsoever.

01:26:08 - Well, to that point--

01:26:09 - You know what I'm saying?

01:26:09 Like, it's not so exciting.

01:26:10 It's not, you know--

01:26:11 - I'll read from the question another way,

01:26:14 'cause I didn't really get to the answer

01:26:16 that I'm looking for, which is,

01:26:19 if all of these vehicles do end up having a lot

01:26:24 of the similar features, are you,

01:26:25 let me just stop right there.

01:26:26 Are you concerned, are you looking,

01:26:28 in your long-range planning, competitive analysis,

01:26:31 about, are there just gonna be fewer brands out there?

01:26:34 Are there some that are not, they're not,

01:26:36 we're in this really strange moment in time.

01:26:39 Who's not gonna make the turn?

01:26:41 Like, you know, again, you're part

01:26:44 of a huge global organization

01:26:46 that has some very strong products right now,

01:26:48 but when we look at others in the space,

01:26:50 we're like, man, I don't know, those guys,

01:26:51 they don't even have an EV offering.

01:26:53 - I'll call them out, Stellantis.

01:26:54 Like, I don't think they sell a single EV.

01:26:56 - Mazda, I'm very concerned.

01:26:58 I'm very concerned about Mazda.

01:26:59 You know, like, you don't have to name names.

01:27:00 At least it's not impolite, but are you,

01:27:02 do you think that globally-- - More or less brands.

01:27:04 - And then, set follow-up question.

01:27:06 How much is China on your radar?

01:27:09 - So I think there will be brands that go away.

01:27:14 I think it's inevitable.

01:27:17 (both laughing)

01:27:20 Either the regulations will engineer them

01:27:22 out of the marketplace, or a lot of other market factors

01:27:27 will just make them go away.

01:27:32 - And that's Darwinism, I guess, right?

01:27:35 Sort of marketplace Darwinism.

01:27:37 - It's automotive in the early turn of last century,

01:27:40 where there were all these innovations--

01:27:42 - Yeah, and everybody who had a bicycle company

01:27:43 suddenly had a car company.

01:27:44 - And then General Motors bought them all.

01:27:46 - Well, no, then the Great Recession--

01:27:48 - Right, okay, but keep going, keep going.

01:27:49 - Right, so I think the easy answer is yes,

01:27:51 there will be fewer brands.

01:27:52 That's inevitable.

01:27:56 - One more time.

01:27:57 - Yes, okay.

01:27:58 - Also, General Motors only had four brands,

01:28:00 and then they did the four companion brands,

01:28:02 and Pontiac survived in five.

01:28:04 - Okay, okay.

01:28:05 - So anyway, just to be accurate.

01:28:07 - So China, absolutely, yes, yes.

01:28:09 And this is the interesting thing about our company.

01:28:11 Kia sells into 170 countries around the world,

01:28:14 including China.

01:28:15 So we're exposed to competitors and markets and dynamics

01:28:20 and all the moving parts in the global economy,

01:28:25 including China.

01:28:26 And China's pressure in the primary markets

01:28:31 is unquestionably felt.

01:28:34 - In what way?

01:28:36 - What do you mean primary market?

01:28:37 - So Europe--

01:28:39 - Okay.

01:28:40 - North America.

01:28:42 - Well, not yet North America, 'cause they're not here yet.

01:28:44 - But they're surrounding, right?

01:28:45 If you look at, they're in Mexico.

01:28:47 There's 10, I think there's 10 Chinese brands in Mexico.

01:28:49 - We have a documentary coming out on that, but keep going.

01:28:51 - Okay, and you look at the Model Y into Canada from China,

01:28:56 and I think Model 3 and so forth.

01:28:58 So that's becoming clearer and clearer.

01:29:03 But the, so if Kia is to be successful globally,

01:29:09 it has to be able to go toe to toe with China.

01:29:14 I mean, there's a lot of things that relate to policy

01:29:19 and where you build,

01:29:24 things like the Inflation Reduction Act,

01:29:25 those kinds of things, a lot of moving parts in this.

01:29:28 But China's pressure and force in this sector,

01:29:33 I mean, look at how much control.

01:29:35 I have another chart for you, Johnny.

01:29:37 - Yeah, I have more.

01:29:38 - The, you know, basically--

01:29:40 - More charts, the merrier.

01:29:41 - Oh my, so this one is--

01:29:45 - I failed geometry like three times.

01:29:46 Keep going, Chuck, yeah.

01:29:48 - So it's all the different battery components,

01:29:51 you know, the lithium and the lithium processing

01:29:54 and the--

01:29:56 - Yeah, the manganese, the cobalt, the nickel.

01:29:59 - It's a barge, forgive my art.

01:30:00 - Yeah, yeah, yeah.

01:30:01 - And so forth.

01:30:02 And, you know, here's China, here's China, here's China.

01:30:07 Yeah, and here's a little sliver for, right?

01:30:10 - Right, right.

01:30:11 - And so their force on this sector is huge.

01:30:16 So we have to compete with that, and we will.

01:30:19 - What about the technology though?

01:30:21 Are you, is there a concern that they're so far ahead?

01:30:24 We had Jim Farley on recently, and he said, like,

01:30:29 he's been telling me for years, China has no,

01:30:32 they're so far ahead in so many different ways

01:30:35 in terms of the experience they deliver.

01:30:37 And, you know, some of the vehicle, the styling, whatever.

01:30:39 But the tech, basically, is out of sight.

01:30:41 Are you concerned at all there?

01:30:43 - I would agree with Jim Farley on that.

01:30:46 Concerned, I have a lot of confidence in our engineers

01:30:50 and our leadership, so.

01:30:51 - Right, okay.

01:30:52 Last question on China, 'cause again,

01:30:55 I love talking to somebody who's thinking,

01:30:56 who's living in the future, basically.

01:30:57 You're thinking about this all the time.

01:30:59 I have a lot of family, and my family's from Hong Kong.

01:31:01 They're, some of the older generation

01:31:03 has done this pivot towards mainland China.

01:31:06 Like, this is amazing.

01:31:07 They have a huge problem from a population perspective,

01:31:12 right?

01:31:12 It's just what I've been reading in all these Atlantic

01:31:14 and The Economist is that their birth rate

01:31:17 has plummeted first time, for first time

01:31:21 in like 50 years, they had negative growth.

01:31:24 They'd lost 850,000 because their one child policy

01:31:29 is now, please have three children,

01:31:31 and we're gonna pay you for the second and the third.

01:31:33 - They also started educating women.

01:31:34 I mean, there's a direct correlation.

01:31:35 You educate women, birth rates go down.

01:31:37 - Right.

01:31:38 - Direct correlation.

01:31:39 - So are you, and this, I've asked now

01:31:41 the long-range planner to please be a global economist.

01:31:44 (laughing)

01:31:46 But seriously, in 20 years' time,

01:31:48 which is roughly the window we're talking about,

01:31:50 like, China could also maybe not be that relevant.

01:31:53 There's something like, I just heard this podcast.

01:31:54 - Well, also, they have a fascist totalitarian regime,

01:31:58 which they can change their mind at any moment

01:32:00 and suddenly, like, remember, Lincoln's strategy was China.

01:32:03 That was literally Lincoln's strategy,

01:32:05 and it's like, you know what?

01:32:06 Now it's not because we don't wanna deal with them.

01:32:09 - Right.

01:32:09 - And they don't wanna deal with us, so.

01:32:11 - Any thoughts there in that direction?

01:32:12 Or you're like, it's too big?

01:32:14 - It's a huge topic.

01:32:15 I didn't really do my homework, but I do have some.

01:32:18 So I think, yes, and I have read similar articles,

01:32:22 like the Japanification of China.

01:32:24 - Yes, I think we were saying.

01:32:25 - Right, and so--

01:32:26 - Explain that for casual, if you haven't read that article.

01:32:30 - China in the '80s was supposed to be like--

01:32:31 - No, Japan in the '80s.

01:32:32 - Sorry, Japan in the '80s was this huge thing.

01:32:34 It bought up all this real estate in America.

01:32:35 - Pebble Beach, they bought Pebble Beach.

01:32:37 They're coming for your job.

01:32:38 - Right.

01:32:39 - Gung-ho, remember Gung?

01:32:40 - But then they had a similar thing

01:32:41 where their population was not replacing itself fast enough

01:32:44 and they're now in, like, decades long stagnation.

01:32:46 - And their economy bubbled.

01:32:48 And since '96, there's been negative GDP growth.

01:32:51 - Right, right, there's a lot of points of view

01:32:53 saying similar things are gonna happen to China,

01:32:56 that we're sort of overthinking

01:32:59 or overestimating the China threat.

01:33:02 I don't know about that.

01:33:04 I think, you know--

01:33:08 - And why don't you know about that?

01:33:10 What's different about, I mean, you know,

01:33:13 besides the obvious, what's different?

01:33:14 - Um, you know, firstly, I'm not an expert on China

01:33:19 or, you know, economics, like geopolitics

01:33:22 and a lot of these.

01:33:23 I read about it, but trying to synthesize that

01:33:26 and come back is, I guess my point would be,

01:33:29 don't underestimate China.

01:33:30 - Right, right.

01:33:31 - That's, I think, the key.

01:33:32 - I got an easy solution for them.

01:33:34 - And then, oh, go ahead.

01:33:36 - Open the borders.

01:33:37 Like, if they just did mass, like, immigration,

01:33:42 like, but they'll never do it.

01:33:43 - Yeah, yeah, yeah, I got another one,

01:33:44 like, get rid of communism, you know?

01:33:46 - No, no, no, that doesn't help.

01:33:47 - Oh, okay.

01:33:48 No, but I was gonna say, in my mind,

01:33:50 in terms of E, in terms of the essential planning,

01:33:53 in terms of EVs, the difference is that Japan,

01:33:56 and this is why World War II happened,

01:33:58 never had any natural resources.

01:34:00 China got natural resources and they control manufacturing

01:34:04 in a lot of really key areas.

01:34:05 - Yes.

01:34:06 - So that, to me, is like, I think there's a baseline

01:34:09 China can't really go below, too big to fail, in other words,

01:34:13 where Japan never was.

01:34:14 - Yeah, I would agree with that.

01:34:16 And the inflation reduction, the inflation reduction

01:34:18 will have a big, I think a big impact,

01:34:22 not so much, like, hurtful on China,

01:34:25 but for us to, in a way, bootstrap this

01:34:29 and show the world that we can do this without them.

01:34:32 - Right.

01:34:32 - Batteries, car production, chips, the whole thing.

01:34:35 - Chips, yeah.

01:34:36 - Well, 'cause we outsourced it, we had it all.

01:34:38 - We just gave it away, yeah.

01:34:39 - Yeah, you're right.

01:34:41 And now's probably, maybe four or five years from now,

01:34:45 we're into 2027, 2028, where I think we're gonna start

01:34:48 to see some fruits from this.

01:34:50 - Okay, well, and we'll just jump out of like a super,

01:34:53 not controversial-- - Geopolitical.

01:34:54 - Yeah, not controversial, not big picture topic of China,

01:34:57 and just go on a much easier one,

01:34:58 which is, from a policy perspective,

01:35:00 we're heading into an election year.

01:35:01 - Oh, good.

01:35:02 - Okay?

01:35:03 How much of what you worry about and work on,

01:35:07 all these policies you talked about,

01:35:08 you mentioned Biden, the Inflation Reduction Act,

01:35:10 how much of that can be undone in the next administration?

01:35:13 Say it's not Biden.

01:35:15 - It goes the other way, yeah.

01:35:15 - Say it goes the other way,

01:35:16 how much of that can be walked back or changed?

01:35:20 We saw that happen during the Trump years,

01:35:22 where all the car manufacturers said,

01:35:24 we're gonna go do this, and then Trump came out and said,

01:35:25 you know what, maybe we'll go wherever you're going.

01:35:28 Is this a nightmare scenario for you,

01:35:31 or for the country, or the industry?

01:35:33 - Oh, man, there's like 12 questions here.

01:35:35 - I know.

01:35:36 (laughing)

01:35:37 - I thought we were here to talk about EVs, and--

01:35:39 - We are.

01:35:40 - This is a real EV question, actually.

01:35:42 - But what you're describing is top of mind for everybody,

01:35:46 which is, first off, what's gonna happen

01:35:49 with the administration?

01:35:51 Is President Biden gonna get reelected?

01:35:54 Is Trump gonna run?

01:35:56 What is gonna happen there?

01:35:57 We're not really sure.

01:35:58 It depends on what you listen to, or what you read.

01:36:02 - Sure, sure.

01:36:03 - The NPRMs, which is Notice of Proposed Rulemaking

01:36:08 for the EPA rule, and I'll answer your question.

01:36:13 That has to be enacted by about May or June.

01:36:18 If there's some wrench in the works,

01:36:20 if it doesn't get enacted--

01:36:21 - Government shutdown?

01:36:22 - Government shutdown, if there's some delay,

01:36:25 some significant delay that pushes it

01:36:26 into like July is coming.

01:36:28 - Yeah, so.

01:36:30 - So if that doesn't get enacted, then it would,

01:36:37 let's see if I can articulate this.

01:36:39 Then if it does get enacted after, say, June,

01:36:44 then the next administration has potential to unwind that.

01:36:48 That's important.

01:36:50 So those rules that we talked about, the EPA rules,

01:36:53 that are gonna require much, much, much, much higher

01:36:57 proportions of EV, much, much, much stricter

01:37:02 criteria pollutant, tier four emissions, things like that.

01:37:07 If that approval gets delayed into the second half of '24,

01:37:14 then the next administration, if it's the GOP,

01:37:16 could unwind that in like the first three months.

01:37:19 And then--

01:37:20 - Oh, yeah.

01:37:21 - Right?

01:37:22 - Yeah.

01:37:23 - That kind of thing.

01:37:24 So that could happen.

01:37:25 All these proposed rules are made into law,

01:37:32 let's say May of '24.

01:37:34 Then we as the, the manufacturers are caught

01:37:38 in the middle of all this.

01:37:38 We shouldn't make cars, right?

01:37:39 So we're gonna go forth with our plan

01:37:42 and we have the capacity and the sourcing

01:37:46 and the product plan and everything in place

01:37:48 for ever more EV sales north of 40% by 30.

01:37:52 That's more or less the plan.

01:37:54 - Okay.

01:37:54 - You know, that could go higher if we need to.

01:37:58 - Right.

01:37:59 - Does that help?

01:38:00 - Yeah, yeah, yeah, totally.

01:38:01 - But I have no, I have zero understanding of you--

01:38:03 - But like, would the, back to this,

01:38:05 let's say for a second,

01:38:06 would you just say, you know,

01:38:07 we don't care what the regulations are,

01:38:09 we're just gonna do this

01:38:10 'cause we wanna be carbon neutral by 2045?

01:38:13 - Well, that's kind of--

01:38:15 - Or is it like, ah, we're business guys,

01:38:17 like let's pollute a little bit more as long as we can.

01:38:21 - Yeah, so, so the,

01:38:26 I'd put it this way, Johnny.

01:38:28 We will sell more EVs next year

01:38:30 and more the year after and more the year after

01:38:32 and more the year after, right?

01:38:33 And there will be more and more and more electrification

01:38:37 in the portfolio across the board,

01:38:41 hybrids, EVs, P8,

01:38:43 so all of that is up and to the right, no question.

01:38:47 The steepness of that ramp is probably subject to--

01:38:51 - Got it.

01:38:52 - Right, some factors.

01:38:53 And there's a lot of moving parts in that too,

01:38:54 because you have cost and price, right?

01:38:57 So moving from Korea to the United States,

01:39:01 that doesn't necessarily help your cost basis, right?

01:39:04 So when you're resourcing away from the pivot from China,

01:39:09 that cost basis changes, but it's not to the better.

01:39:13 So that has a bearing on the business,

01:39:17 part of our business.

01:39:19 Does that help?

01:39:20 - Yeah. - Yeah.

01:39:21 - Okay. - Super, super duper helpful.

01:39:21 - Okay, and I wanna thank you

01:39:23 because we did take it into an area

01:39:26 which I don't think you even thought we would ever go.

01:39:28 - No, but it's all part of long range planning.

01:39:30 I mean, you're right.

01:39:32 This is not the first time you've had these thoughts, right?

01:39:34 - No, and I'll tell you something.

01:39:36 So I was kinda hoping we'd talk a little bit about this

01:39:40 because it used to be in my,

01:39:43 I've been doing this since 1992.

01:39:46 - Oh, wow.

01:39:47 - And in various companies,

01:39:49 and it used to be most of the time

01:39:52 you'd be making another version of the car

01:39:54 that's already in the lineup.

01:39:55 It's time to make another Civic.

01:39:56 It's time to make another Accord.

01:39:58 It's time to make another Optima.

01:40:00 And you could reference the current product,

01:40:03 talk to the customers, what do you need?

01:40:05 What do you, and you could come up

01:40:06 with the product plan and the formula.

01:40:07 And I don't wanna say it was easy,

01:40:09 but now the moving parts in this,

01:40:13 the elements of that matrix we look at

01:40:15 when we're looking at this is so complex

01:40:17 with geopolitics, economics, more regulation,

01:40:21 sourcing issues.

01:40:22 - The human factor where you have some people

01:40:24 like EVs have become politicized.

01:40:26 - Yes.

01:40:27 - And you have some people, I'll never buy one.

01:40:28 - Yes, right.

01:40:30 Don't build your EV factory in my backyard.

01:40:32 Literally happened to Rivian, right?

01:40:33 - Yes.

01:40:34 - Like really?

01:40:35 Like we're gonna politicize this too?

01:40:36 This is crazy.

01:40:37 - And the politics, and just a couple of weeks ago,

01:40:40 we had some visitors from Korea.

01:40:41 We were talking about some kind of macro level

01:40:43 research projects.

01:40:44 And we had a list of things that 90% of it

01:40:48 was related to EVs, consumer EV research.

01:40:51 But they said, well, what else do you think

01:40:53 we need to put on the list?

01:40:54 And I said, there's two things.

01:40:55 One is aging America.

01:40:58 We need to understand that with respect

01:40:59 to the Japanification of China.

01:41:01 And two, the title I call it is divided America.

01:41:05 How does this work out?

01:41:07 And some of the work that I've done,

01:41:11 it's really interesting, but you listen to people

01:41:13 talk about it and you read about it.

01:41:15 And they point the finger at the baby boomers

01:41:18 or the problem or whatever.

01:41:20 I don't know if you guys study demography

01:41:23 or economic history related to this,

01:41:26 but there's another graph I'll draw here.

01:41:31 And it has to do with generational cycles

01:41:35 and the sine wave that exists.

01:41:37 And how we as a society move between spring,

01:41:42 summer, fall, and winter.

01:41:44 And this is an aggregation of the mood, the economy,

01:41:47 how I feel, generational attitudes and values,

01:41:52 and how some of these move to move.

01:41:55 And the point I'm getting to is that right now

01:41:57 we're in winter.

01:41:58 It doesn't feel good.

01:41:59 It doesn't feel good for a lot of people.

01:42:01 - Especially younger people.

01:42:02 - Yes, exactly.

01:42:03 - They really like, I mean, real quick,

01:42:07 like I was talking about like housing prices.

01:42:10 'Cause my wife was like, should we buy another house?

01:42:15 And I'm like, if we sold her,

01:42:17 just because of the interest rates we got

01:42:18 and the taxes we paid when we bought that house,

01:42:20 if we sold our house right now and re-bought it

01:42:24 with the money that we sold it for, the same house,

01:42:26 our mortgage would more than double.

01:42:29 Just more than double.

01:42:30 So, and we do okay, but like young people

01:42:34 getting crushed everywhere and can't afford EVs

01:42:38 or too expensive.

01:42:39 - Yeah, Johnny, this is it.

01:42:40 This is exactly it.

01:42:42 And so now you have Gen Z, Gen Y in a period,

01:42:46 in a life stage where normally they'd be building wealth,

01:42:50 they'd have a house, they'd have an, and--

01:42:52 - You know, they're just drowning in debt.

01:42:53 - They're drowning into school loans,

01:42:55 they can't buy a piece of real estate,

01:42:57 which means that their assets or net worth is not growing.

01:43:00 They're kind of stuck.

01:43:01 They may not be able to have the means to buy an EV.

01:43:05 So my point in this little sine wave here

01:43:07 is that the view is that all of that is gonna change

01:43:10 around 2030 or 2033.

01:43:12 - And you know this how.

01:43:15 (laughing)

01:43:16 - Change for the better, right?

01:43:17 - Bitcoin's going back up.

01:43:18 - You can't get any colder than winter.

01:43:19 - Right, exactly.

01:43:20 We're gonna get into spring.

01:43:21 - Oh, you're saying it's inevitable, it has to change.

01:43:23 - Ooh, there it is.

01:43:25 So--

01:43:26 - Burn the bell.

01:43:27 - It could be inevitable, it could be inevitable.

01:43:29 - Okay, so you just think,

01:43:30 I was gonna shorten this,

01:43:33 based on factors we've seen before,

01:43:35 there's a way to come out of this.

01:43:37 Like the--

01:43:38 - It's either a prolonged winter, which would be terrible,

01:43:40 or hopefully the sine wave returns.

01:43:42 - Right, and kind of the view,

01:43:45 getting back to politics here,

01:43:46 is as a lot of the baby boomer politicians retire,

01:43:50 you know, Mitt Romney and a lot of the other guys retire.

01:43:52 - Die off, yeah.

01:43:53 - That there is a lot of younger Republicans and Democrats

01:43:58 in office who actually see eye to eye

01:44:00 on things like gun control, healthcare,

01:44:03 the environment, those kinds of things.

01:44:04 - Climate change, yeah.

01:44:05 - Climate change.

01:44:06 And so that's one part of this.

01:44:08 And then the other part of it is the mood

01:44:10 and the attitude and the values of young consumers.

01:44:13 If you look at

01:44:15 how do you think about EVs,

01:44:18 how do you feel about EVs,

01:44:20 how do you like EVs,

01:44:21 how do you want EVs by generation?

01:44:23 It's intuitively, both you guys know,

01:44:25 the older you are, the lower the interest.

01:44:27 But the younger buyers, Gen Y,

01:44:31 they're so into it and so aspirational toward it.

01:44:37 They may not have the means, but they want it.

01:44:40 Another little twist is what are all these young

01:44:43 Gen Alpha, Gen Z people, they're riding around on electric.

01:44:46 - Yes, so am I.

01:44:48 - Right, and they know and feel and like

01:44:50 and want that electric smile.

01:44:52 So I think if you kind of look into the pipeline of people,

01:44:57 if you want to look at it that way,

01:45:00 that the younger and younger and younger people

01:45:03 really have an affinity for electrification.

01:45:06 - This is so true.

01:45:07 I can't even tell you the number of just people

01:45:10 employed by the car business that are like,

01:45:11 I remember I was in somewhere with an Audi guy,

01:45:15 and he goes, "I bring home an R8,

01:45:16 "my teenage son doesn't even look at it.

01:45:19 "I bring home an electric Audi,

01:45:21 "and his friends are crawling over,

01:45:23 "they're poking the screens, that's exciting.

01:45:25 "R8 is boring to them, it's an old man's car."

01:45:28 - Yeah. - And it's wild.

01:45:30 - The other thing I was thinking about,

01:45:32 and this isn't exactly the case,

01:45:33 because it is only the privileged subset of Gen Z,

01:45:38 Gen Y and Gen Z.

01:45:40 But there are kids right now

01:45:43 that their first car is a Tesla.

01:45:45 It's used, it's mom's Tesla.

01:45:46 They grew up, they only know it.

01:45:48 - Right, and why would they pay for gas?

01:45:51 - Well, no, no, no, but they can't even consider a gas car,

01:45:55 or a car where, you know, we just got into a vehicle,

01:46:00 we maybe had some time in the new Tesla Model 3 Highland,

01:46:04 and it's got this predictive shifting, right?

01:46:06 The car will tell you, assume you want to go backwards

01:46:10 'cause you're parked up against the wall.

01:46:12 You do that long enough, and maybe it doesn't work right now,

01:46:14 but it's gonna get better.

01:46:15 You're gonna have a generation--

01:46:16 - By the way, it's 90% accurate now.

01:46:18 - Right, you have a generation of the grown-up in EVs

01:46:22 that where the car starts when your butt hits the seat,

01:46:25 and it's ready to go, you can't go back.

01:46:28 - That's right. - Why would you turn

01:46:29 the car on?

01:46:30 What a crazy thing to do. - Exactly right.

01:46:31 - It's like telling kids, giving them an analog phone,

01:46:34 a rotary dial phone, and trying to figure it out

01:46:36 when they grew up with only an iPhone.

01:46:37 - Exactly. - They're gonna be like, "What?"

01:46:38 Which are the funniest videos on the internet?

01:46:40 There's nothing better than dial,

01:46:42 call your house on this device.

01:46:44 That's the-- - They're pushing it.

01:46:45 - Have you seen that? - Yes.

01:46:46 - Oh, those are the best.

01:46:48 - Yeah.

01:46:49 Do you have anything, 'cause we're running out of time here.

01:46:52 Again, we surprised you.

01:46:53 Is there anything we didn't cover

01:46:54 that you really want us to tell our audience

01:46:56 about what Kia's doing, about what's on your mind?

01:46:59 We can take a quick spin through your own background

01:47:01 if you like, but we're--

01:47:03 - I think we covered so much of what's important.

01:47:05 I think maybe the thing,

01:47:07 so we have such EV competency in this company.

01:47:11 We've done really well.

01:47:13 We think that the EV9 is gonna be huge success.

01:47:16 The EVs that are-- - And by the way,

01:47:18 we haven't even said this.

01:47:18 EV9 is a three-row EV.

01:47:20 It's an SUV.

01:47:21 It's an electric-- - It's awesome.

01:47:23 It looks like Voltron's foot.

01:47:26 It is so-- - It does look cool.

01:47:27 It does look cool. - It kicks so much ass.

01:47:29 It just looks so good.

01:47:30 - But it's, yeah, but it's an electric three-row,

01:47:33 which is big 'cause there just aren't a lot of them

01:47:35 right now. - Yes, that's right.

01:47:35 - And Americans love three-rows.

01:47:37 - The only competition right now--

01:47:38 - If you have one baby, you need a three-row.

01:47:40 - It's like the Mercedes Benz.

01:47:43 What is that with the EQ?

01:47:44 - It is a Mercedes EQ.

01:47:46 - And the Rivian LS. - EQ, E, SUV, EQ.

01:47:49 No, EQ, sorry, EQS. - EQS, 'cause it's three-row.

01:47:51 There's only two out there right now.

01:47:52 - Do you know how desperate Mercedes is

01:47:53 to change their naming convention?

01:47:55 - Oh my God. - They're so desperate

01:47:56 'cause they don't even know what they're called.

01:47:57 - I would say this looks better than both of those, too.

01:47:59 Definitely better than the Benz.

01:48:01 People like the Rivian.

01:48:02 I like the EV9.

01:48:03 - And the initial theme came from our Rivian studio.

01:48:06 So, really, really good. - Yeah, it's nailed it.

01:48:09 - Sorry, we keep saying EV9.

01:48:11 - So, yeah, Sakiya has huge confidence.

01:48:13 We would agree.

01:48:14 Like, we think very highly of your products overall,

01:48:17 but the EVs in particular have been very impressive.

01:48:20 - Yeah, we're super excited about the current product,

01:48:24 what's in the pipeline, the lineup, the brand,

01:48:29 the direction the company is going in.

01:48:32 It's super exciting and super cool,

01:48:34 and it's a super cool time to be doing this.

01:48:36 - When do we start to see,

01:48:38 I forget the term you used,

01:48:42 but like a Kia Soul that is on the modern platform,

01:48:47 not an electrified-- - Not a derivative.

01:48:53 - Yeah, not a derivative EV.

01:48:54 When do we, where's the $29,000 Kia EV?

01:48:59 When do we see that?

01:49:01 - That's a couple years away,

01:49:02 but we're fully aware of it, Johnny,

01:49:04 that the sort of the white space or the opportunity,

01:49:08 yeah, it's a couple years away for the US,

01:49:12 but maybe in other markets a little sooner.

01:49:15 - Okay, okay, that's good,

01:49:16 'cause that seems like the next frontier

01:49:18 is get these three rows out.

01:49:20 That's great, but it's $80,000 price point.

01:49:23 They're not cheap, and what people want is--

01:49:28 - That's exactly right, Johnny,

01:49:29 and if we could take just a minute--

01:49:30 - Yeah, yeah, yeah, please, please.

01:49:31 - So this is another part of like the macro strategy

01:49:35 is that this product concept, electrified utility,

01:49:40 is going to start here,

01:49:41 and it's gonna continue to move down market,

01:49:43 and that's part of the thrust

01:49:45 of getting the mainstream people to buy this

01:49:47 is that we wanna, so if you look at the US market,

01:49:51 2.3 million full-size pickups a year,

01:49:53 about 2.2 or 2.3, we'll call them compact SUVs or subcomp,

01:49:59 we call them subcomp, so Sportage, RAV4s.

01:50:01 Those are the people we wanna target

01:50:03 with a proper EV, SUV that's attainable,

01:50:07 that's useful in a 300-mile range,

01:50:10 I can charge at home, is bulletproof,

01:50:12 dirt simple to operate,

01:50:13 and can replace that Sportage or RAV4.

01:50:17 And then sort of the math on this is that

01:50:19 those customers have about three cars at home,

01:50:25 and kind of the view is at least one of 'em,

01:50:28 maybe two of 'em can become fully electric.

01:50:31 Maybe not all of 'em, but maybe for some,

01:50:34 and so on and so forth.

01:50:35 But that market is what is gonna be targeted.

01:50:38 This is ID4, Aria,

01:50:42 a little bit Model Y, but the price point's a little high,

01:50:49 but that sector right there, BZ4,

01:50:52 maybe, so that target--

01:50:55 - So you're saying that you have a lot of,

01:50:56 that's a target-rich environment.

01:50:57 - Yes, highest volume.

01:50:59 - Well, but also those are all pretty poor vehicles,

01:51:01 I would say, compared to like an IONIQ 5.

01:51:04 No, I'm just, I'm just,

01:51:05 but there's a reason why, they have a low price point.

01:51:07 Yeah, they have a low price point, yeah.

01:51:08 - This is a really important point, Johnny,

01:51:11 because imagine taking a dedicated EV platform,

01:51:15 and imagine taking an EV, a dedicated EV platform,

01:51:19 and configuring that vehicle with that tech

01:51:22 we talked about, right?

01:51:23 That is so cool.

01:51:25 And with the Inflation Reduction Act,

01:51:27 with a $7,500 point of sale rebate,

01:51:30 which is what it'll be in 2024,

01:51:33 that starts to put the mass market EV

01:51:37 into a much more attainable price point.

01:51:39 - It's higher up on that adoption curve.

01:51:42 - Right, exactly.

01:51:42 - So in other words, a $35,000 vehicle

01:51:45 can be yours for $2,700, $2,500.

01:51:48 - Or maybe low 40s could be yours for 35,

01:51:51 something like that.

01:51:52 - Oh, okay.

01:51:53 - That kind of thing.

01:51:54 - Inflation's out of control, good.

01:51:55 But then below that will be other utilities,

01:51:58 and those are the ones that are gonna be

01:52:00 in the high 30s, 28 to 32, something like that.

01:52:03 - Yeah, I just know, still talk to a lot of friends of mine

01:52:06 that there's this, under 30 for a new car,

01:52:11 it's just getting rarer and rarer, you know?

01:52:14 And it seems to be--

01:52:16 - So buy used.

01:52:17 Teslas are like $27,000, Model 3.

01:52:20 - We're in the new car business.

01:52:21 - I know, but I like to tell people the truth, too.

01:52:23 - Really?

01:52:24 - I'm just kidding.

01:52:25 - And don't forget, there's a $4,000 IRA used TV rebate.

01:52:29 - Oh yeah, yeah.

01:52:30 - Taxes, right?

01:52:31 - Yeah, yeah, yeah.

01:52:32 - Can't forget that.

01:52:32 - Okay, my last question for you, Mr. Long Range Planner,

01:52:34 is did you have any input, was it part of your remit

01:52:39 to do the, redo the logo?

01:52:42 - So that wasn't my doing, that wasn't my doing,

01:52:47 but we have had umpteen conversations, Ed, about the logo.

01:52:51 The logo, the logo, the logo, the dealers, everybody,

01:52:53 the market, the media.

01:52:55 - If you remember before, the Kia logo,

01:52:56 it was an oval badge, and it just was very simple.

01:52:59 - It was a four-badge in black, and it said Kia.

01:53:00 - It said K-I-A on it.

01:53:01 And the new one is super cool, super angular.

01:53:04 I dig it. - Stylized.

01:53:05 - Although, I think we even wrote an article about it,

01:53:07 explaining it, because apparently a lot of people are like,

01:53:09 what is this new KV brand?

01:53:11 - Or KN.

01:53:12 - Yeah, KN, right?

01:53:13 - The N backwards, yeah.

01:53:14 - Yes.

01:53:15 So that's kind of how it's been.

01:53:18 It's cool looking, but a little bit of confusion,

01:53:19 a little bit of brand confusion, or?

01:53:22 - Maybe a little bit initially,

01:53:24 but now I think it's fully accepted.

01:53:27 - You gotta run more NBA ads, put more,

01:53:29 put the, whatever the sponsorship is.

01:53:31 - All right, my last question.

01:53:32 - Big.

01:53:33 - 'Cause I think this is the last question.

01:53:34 Isn't the EV6 just an electric Rondo?

01:53:37 - No, come on, Giants.

01:53:39 - In terms of packaging, isn't it kind of

01:53:41 exactly the same thing?

01:53:42 I love the Rondo, I'm gonna just go out and,

01:53:44 that was a very cool--

01:53:45 - Why did you bring the Rondo?

01:53:46 We're joking a little bit, because--

01:53:47 - It's a little bit--

01:53:48 - John, this morning, or as part of my research on Steve,

01:53:51 I went and I looked, I do two things.

01:53:53 I look and see if anybody's recorded a podcast before,

01:53:56 and then I also go to YouTube,

01:53:57 and there is a YouTube video of you from--

01:54:01 - At the Rondo launch in 2007.

01:54:03 - 2007.

01:54:04 - It dusts that off.

01:54:06 - Young man, still on his game, didn't chart any graphs.

01:54:11 - I'm like, now?

01:54:12 - No, no, no, no, I meant, I did that in a good way.

01:54:14 - Thanks, thanks, Ed.

01:54:15 Thought we were friends here.

01:54:16 - Well, that's Ed being friendly.

01:54:18 - But if you don't remember the Rondo,

01:54:20 we had one at Motor Trend,

01:54:21 we had one at Long Term Fleet, three row, crossover.

01:54:24 - But the second row really slid.

01:54:26 - Did it have?

01:54:27 - Yeah.

01:54:28 - The big second row package.

01:54:29 - It didn't have a front bench, did it?

01:54:30 It wasn't like some weird nine passenger, three row--

01:54:33 - When I was at Jalopnik, Bumbeck did this thing,

01:54:35 'cause he was so into the fact that it was,

01:54:37 A, called it a Rondo, B, how big the back seat was.

01:54:40 We did like a all you can eat Korean barbecue.

01:54:43 We went to like four different all you can eat places

01:54:45 and just gorged, and then just laid the back seat like,

01:54:48 (groans)

01:54:49 and it was the best.

01:54:51 - How long were you at the company when you did that video?

01:54:54 - I was about two years in.

01:54:55 - Okay, that was your first project?

01:54:57 - Yeah.

01:54:58 - Nice.

01:54:59 - Yeah, yeah, yeah.

01:55:00 Well, actually the first project

01:55:00 was what we called the G Project,

01:55:02 which was the Georgia Plant Project.

01:55:05 So it hadn't been named yet,

01:55:07 but it was called the G Project for Georgia.

01:55:09 And that was the first one, that was like the second day.

01:55:13 And this was interesting because the view was,

01:55:16 we're gonna build a plant,

01:55:18 and we're gonna build 330 or 360,000 units a year.

01:55:22 Let's talk about work on what we need to build,

01:55:25 like what fits.

01:55:27 And I'm looking at this and I'm like,

01:55:29 you don't sell 300, you have an export plan, right?

01:55:33 No, that's for the United States.

01:55:36 - All right, follow up last question.

01:55:37 So from the Rondo launch to like,

01:55:40 you got EV6 GT, EV9, you're these really like,

01:55:44 not only like, good vehicles,

01:55:47 but like best in segment by kind of a lot vehicles.

01:55:50 And also first in segment, like the EV6 GT,

01:55:52 you know, nothing like,

01:55:56 put yourself back in 2007 Rondo launch mindset

01:56:00 or project G, like, did you ever see this?

01:56:02 Like, does this make sense that Kia is where it is?

01:56:05 - You know, parts of it, yes.

01:56:09 Which was in the sense that when I started,

01:56:15 they had just hired Peter Schreier

01:56:18 and they were putting the piece--

01:56:19 - That far back?

01:56:20 - Yeah.

01:56:21 - Wow, 18 years?

01:56:22 - And yeah, and Tom Kearns had hired on

01:56:24 as the design chief for the Irvine studio.

01:56:28 And the kind of the pieces of the puzzle

01:56:30 were coming into play.

01:56:31 So there was a R&D chief who was newly hired,

01:56:36 he had Peter Schreier,

01:56:40 the sole concept had just been emerged.

01:56:44 And so you could sort of see the path forward

01:56:48 was starting to come together

01:56:49 with sort of the lot of really strong talent.

01:56:52 But at the same time,

01:56:56 there was also effort in Korea

01:56:58 to start digging much more deeply into electrification.

01:57:03 There were some hybrid projects--

01:57:04 - That far back?

01:57:05 - Yeah, hybrid projects, EV projects.

01:57:09 I worked on the first Optima hybrid,

01:57:12 which was novel.

01:57:14 And so sort of the little glimmers

01:57:19 of this could be the way to go were there,

01:57:24 but not like EV6.

01:57:25 I mean, I'll tell you something,

01:57:30 some of the real moments came

01:57:32 when we first saw the materials on the EGMP platform,

01:57:40 it was like radical.

01:57:42 And then some of the other moments came

01:57:44 when we first drove some of the mules

01:57:47 that were like, wow,

01:57:49 this car is barely put together

01:57:53 and it is really fast and really strong.

01:57:58 Oh my God, we got something here.

01:58:00 - Terrific cars.

01:58:02 I just, 'cause it's, you know, look,

01:58:04 a lot of people, you know, and you know this,

01:58:06 like the psychographic of the average consumer

01:58:09 is 10 years behind reality.

01:58:11 You know, it's like the Angus, our old boss,

01:58:14 he used to, his thing with, you know,

01:58:16 how do you turn a company around was,

01:58:18 well, you gotta build good cars for 10 years

01:58:20 and then it takes people 10 years

01:58:21 to realize you're building them.

01:58:22 It's a two decade transition.

01:58:24 And, you know, Kia was what it was

01:58:27 when it came to the US.

01:58:28 And, you know, I still hear people say like,

01:58:31 if they don't like the way a car looks,

01:58:32 they'll say it looks like a Kia.

01:58:33 And I'm like, have you looked at a Kia

01:58:35 in the last, you know, 10 years?

01:58:37 Like they're kind of leading the design.

01:58:39 - That's right.

01:58:40 - You know?

01:58:41 - That's right.

01:58:42 - So it's just a crazy transition

01:58:43 that we've seen for this company.

01:58:44 - Thank you, Eddie.

01:58:45 And that ties to, you know, again,

01:58:46 the company's ambitions, the leadership ambitions

01:58:50 and the drive and the, one of the things

01:58:54 in my notes is just, we have to work together

01:58:58 to find a way to make this happen.

01:58:59 It's kind of an internal team spirit culture

01:59:04 that exists within this company.

01:59:06 And it's obvious, I think.

01:59:09 - Cool.

01:59:11 That's great.

01:59:13 - It was awesome having you.

01:59:14 I can't believe that you've been in the business

01:59:15 since 1992.

01:59:16 You're still very passionate.

01:59:18 Like, is that what you said?

01:59:19 1992, right?

01:59:20 - Well, yeah.

01:59:21 Even longer than that, if I go back to,

01:59:22 I worked at a dealership from '85 to '90.

01:59:26 - Wow.

01:59:27 - That's insane.

01:59:28 - Really?

01:59:29 - Yeah.

01:59:29 - What dealership?

01:59:30 - It was a Lincoln Mercury dealership in Chicago.

01:59:31 Remember those?

01:59:32 - Half of those are left, yeah.

01:59:33 (laughing)

01:59:35 - But we could talk about the future with you forever.

01:59:39 So we're going to have you back at some point.

01:59:40 - I was going to say that earlier, but yeah.

01:59:42 - Yeah.

01:59:44 Steven Kozowski, it was awesome having you.

01:59:47 Thank you so much.

01:59:47 - Thank you for the opportunity, guys.

01:59:49 I really enjoyed this.

01:59:49 It was really cool to talk.

01:59:51 Thank you.

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