Is Tesla’s EV supremacy in the rearview mirror?
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Welcome to Xero, I am Akshat Rati. This week, the global battle for EV supremacy. There is a lot happening in the EV world at the moment. In the US, Teslas are being hawked on the White House lawn, while President Donald Trump mulls whether to cut EV subsidies. In Europe, leading auto manufacturers continue to lobby against stricter CO2 targets, even as EV sales continue to grow at pace.

Meanwhile, in China, electric vehicle technology continues to improve by leaps and bounds. Electric car giant BYD just launched two models that can add 400 kilometers of range, about 250 miles, in a mere five minutes, as quick as taking a stop at a gas station. Keeping up with all the latest twists and turns of the EV industry is a full-time job. And luckily, we have a person whose full-time job it is.

To help us unpick the latest EV trends, I sat down with Craig Trudell, who is Bloomberg's global automotive editor and sits a few desks down from me in our offices here in London. Before that, Craig ran the automotive's team in Europe, the US and Asia, so he has a unique global insight of the EV market as it stands today. Craig also writes the Hyperdrive newsletter for Bloomberg, one of my favorite places for all the latest developments in the world of EVs.

We discuss the state of the global EV industry, why Japan seems so hesitant to embrace the transition, and whether Elon Musk is now derailing the adoption of electric cars. Craig, welcome to the show. Thank you for having me. So I think a lot about electric cars, but I know for a fact, I don't think about them as much as you do. And so I want to understand this moment because there's just so much happening around

in pretty much every auto market in the world. It's not just about Elon Musk and Tesla. So we'll come to that big dark elephant. But before that, let's start in America and let's start with the big automakers.

You know, Ford, General Motors, these companies had committed to go down the path of electrification. They were getting all this money from the Inflation Reduction Act under Biden to subsidize making battery plants to try and get more domestic manufacturing of all sorts in the supply chain happening. And now...

They have, in the Trump administration, pushed back against all forms of EVs. Many of them seem completely dumb, like having charging stations that are perfectly fine and working being shut down. But others, which, you know, can make some rational argument for, which is cutting the subsidies for the sale of electric cars or cutting the subsidies for battery making because that's a Biden thing and Trump doesn't want to do it. So with all this mess happening, how is Ford doing?

I mean, to speak to your point that these companies really took this seriously the last few years, Ford went so far as to completely switch up how it was organized as a company to where it started actually its own EV business within the parent, right? And so they had...

Model E separate from Ford Blue, Ford Blue being the gas guzzling F-Series pickups, this sort of conventional business and Model E being Mustang Mach-E, the F-150 Lightning.

They lost more than $5 billion last year just in the EV business. And that's a heck of a lot of money, period. But it's a heck of a lot of money for, you know, just the size of that business for them. Because much as it is growing, it is still quite small. GM, I think, has...

put quite a bit more effort and investment into electric vehicles is further along. I think, you know, Ford kind of freaked out a little bit by, you know, how Tesla was bringing a pickup to market. Trucks are so important for the Detroit companies. I think they freaked out a little bit because of Tesla. They freaked out a little bit because of Chevy and GM.

They rushed a pickup to market that was sort of a Frankenstein pickup a little bit with some holdover of the way they've been making the F-150 and some new stuff. I think they will come back to the market with something that is much more concerted and more attractive to consumers. But for the time being, they're really pumping the brakes. Yeah.

In America, there's the third big one, which used to be Chrysler, but it's been since taken over by a European company. And now you don't know whether it's American or European, but Stellantis has gone through the same transition. What kind of price are companies starting to pay if they get the transition wrong? I think this is a huge story to watch in 2025. Stellantis' attempt to sort of clean up after the mess of

of the fact that they were so far behind everybody else in this transition. All of Detroit is very much relying on big pickups and SUVs, but I think Fiat Chrysler, the sort of predecessor to Stellantis, was particularly so. When you think about Ram trucks,

and Jeep SUVs, you almost don't have anything left of Chrysler and some of these other brands, right? Chrysler, literally the only thing they manufacture in that market anymore is a minivan. They made this big attempt under the CEO who just left late last year to try and play some catch up and electrify a lineup that was in dire straits and in dire need of some electrification.

It didn't go well at all. There was resistance internally, I think, with their dealers, with their suppliers that they have long worked with that have not been in this realm. So this is a company that just a year prior was doing fabulously, roughly 12 billion euros of free cash flow generated to companies.

last year, a 6 billion euro burn. So in the course of a year, it was something on the order of 18, 19 billion euros swing. I think it speaks to just how much this is an industry where, you know, you make some bad bets or they go against you and you pay a price that you just don't see in other industries. And then the dark elephant in the room, Tesla. Now, let's keep the politics of Musk apart for a bit.

and talk about just the company and its performance. Tesla's shares from its peak in December are drastically down, and they don't look like a car company that is growing

You know, stock prices can be vibes, but they are also based on fundamentals. Like, what is Tesla's deal right now as a car company? It sort of changes by the month, by the week, sometimes by the day. I do think that, you know, the one thing that's been really consistent with this company, really, when you go back just the last few years, is that it's been a really consistent company.

It started to become pretty apparent that their very narrow lineup that was a real strength for them during the pandemic because they only had so many mouths to feed, if you will. You know, your supply chain is a little bit easier to manage when you only have so many vehicles. That was a real strength for them. And they had the Model Y at a time when, you know, sort of EV hype was at its peak. And to credit them, they were a huge driver of that hype. And

You got into the 2022 timeframe when Musk goes out and decides to acquire Twitter, where this company that had been promising more models wasn't actually delivering those. And the growth really started to slow down. And so I think we're seeing that...

them sort of feel the ill effects of having maybe counted on this, you know, tight lineup strategy for longer than they really should have. Right. And so this is sort of cutting down the possibility of a cheaper car than the Model 3, then sort of pivoting towards robo taxis. And now if you bring in the politics, because you have to these days,

You are seeing people actually put on advertisements about the Swasti cars and Elon Musk is sitting in them doing the salute. And it's showing up, at least in correlation, in sales drops across the world. So here in the UK, electric car sales are going up rapidly, but Tesla sales have gone down and that shows up in multiple countries.

Is the politics actually having an impact on these Tesla sales? I mentioned the Model Y and that was so important because it actually became the best selling vehicle in the world, which I think nobody saw that coming. I certainly didn't. And I think you have to sort of take your hat off, tip it to Tesla for having done that.

That being said, they sort of let that vehicle age a bit, and they're just now coming out with a redesigned version of that. Anytime you change over a vehicle to a new design, you also have to change over production lines. That's going to cost you some output. And Tesla has said they're going to change over all of the plants that make that this quarter. And so that's absolutely going to have an effect and is something that we're going to have to sort of parse as the year goes on, how much of that

of their early year struggles are sort of a result of that very understandable changeover. And how much is it the fact that Musk, to your point, is alienating a lot of people? And it's not just people on the left. I think when you look at how he's behaved in

toward countries that are big EV buyers, Germans in general just aren't particularly keen for Americans to, American billionaires, to insert themselves in politics. Here in the UK, you know, the Labour Party have been big proponents of electric vehicles and net zero prices.

He, on the other hand, is sort of throwing his lot in with Nigel Farage and reform. And so it's not just the fact that he is so emphatically gotten behind Trump. I'm sure that doesn't help because he, too, is a very divisive figure for a lot of people. But it's more than that. Yeah.

And talking of Europe, now it's not going through the same level of EV backlash on policy at least, but European automakers have not done themselves any favor by lobbying very hard to try and have as much leeway in getting to goals that they must reach because these are, at least in Europe, legally binding climate targets that require them to reach a certain level of electric car sale.

Are there any European automakers that are showing signs of actually making a transition from a legacy player to a

21st century EV carmaker that you ought to be now. Yeah, this has been so interesting. And it's good that we started off the conversation by talking about the state of things in the US and touched on the Inflation Reduction Act, because I think a few years ago, everybody in Europe was freaking out, right? Because Biden passed this climate bill that was just a landmark piece of legislation. Europe was really worried about falling behind. But

And so we've seen a lot more take up of electric vehicles in Europe, but it's really just been in a handful of countries for the most part. To the extent that there's been higher take up, it's been in some smaller markets like Norway, some of the Nordic countries where people just don't buy a ton of cars generally. But I think we've seen really interesting differences in strategy where a BMW, I think a lot of people were doubting whether it was going to make sense to

for them to sort of have, you know, one foot in and one foot in the combustion age. They've actually made that work, you know, pretty nicely the last year where their electric vehicle sales really sort of gain momentum, despite some of them being built off of combustion engine platforms, which a lot of this sort of EV purists thought that that can't work. And so they've really outperformed, I would say, on the

luxury end of the spectrum. For the rest of the industry, I think you've really had trouble, particularly among this sort of mass manufacturers. And I think

Volkswagen is the one you have to sort of talk about first and foremost, where they put a lot of investment in this, rolled out a lot of models. And while they are maintaining some momentum or at least in a decent position relative to some other players, I think that's more a function of the fact that they're just so big as a group than it is that they've really done a lot of

things right. And then the other one that is perhaps in the laggard territory and maybe among American and European and Japanese ones, the Japanese are the biggest laggards here. And it's not helped that they've had some serious business trouble in recent years. Now, you lived in Tokyo for a while and you follow the Japanese car market really closely. Are they

seeing any of this stuff happening in the West affecting how they think about the transition now? Yeah, there are real differences among those companies where I think Nissan under Carlos Ghosn roughly a decade ago really saw a lot of promise in electric vehicles. And you saw them bring out the Leaf, which was really sort of ahead of its time in terms of, you know, an affordable vehicle that was fully electric. And

And yet I think it left, you know, a fair amount to be desired in terms of, you know, design and sort of shape and utility for folks. And especially in markets like the U.S. where we like our great big vehicles that didn't, you know, hit the mark. And so I think Nissan really sort of pulled back after after missing the mark with with the Leaf. And then I think for the rest of the Japanese, you know, Toyota, you

has really doubted consistently that consumers are ready, especially where it sells an awful lot of cars in the US and in Japan. And much as there's been a sort of consistent questions raised about whether that's the right strategy for them,

I think we have to sort of acknowledge are looking pretty smart in terms of their ability to comply with the rules set by regulators to lower emissions, but not necessarily get to zero because people are buying hybrids like they're going out of style. And it's really difficult, actually, for the company to keep hybrids in stock in the U.S. Here in Europe, you know, it's getting pretty close to hybrid only for them.

And in Japan, I can say, too, you know, it's just sort of what you expect to see on the roads is Priuses. But but also the rest of the lineup is, you know, predominantly hybridized at this point. After the break, the panda in the room. Has China beaten all others at EV technology and cracked the developing world's EV market?

And by the way, if you've been enjoying this episode, please take a moment to rate and review the show on Apple Podcasts and Spotify. It helps other listeners find the show.

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So I want to talk about China's global view of the EV market because it's starting to expand really quite quickly outside of China. But before we go there, given what BYD just announced, I feel like we need to spend a few minutes.

So BYD is launching two new models that they say can go from 7% to 50% charge, roughly 400 kilometers of range in a mere five minutes. Now, you need a few things there. It's not just these two cars, but you also need a one megawatt charger, which is like 10 times the amount of power that a Tesla supercharger has, for example.

But if you have that, now you can get a car charged in the same amount of time that you would spend at a gas station. It feels like it's a deep-seek moment for EV batteries. I think that's right, because I think with deep-seek, the sort of parallel here is that everybody thought that everyone was going to have to spend a ton of money and there was sort of no way around it. And

And lo and behold, some company in China that people, you know, for the most part in the West hadn't heard of, sort of came out of nowhere and sort of blew everybody's mind with, you know, you know what, there's a better way, a cheaper way. And I think we've sort of seen BYD, they were sort of deep seek before there was deep seek and the idea that, you know, they were offering a much cheaper solution for electric vehicles and, you

weren't particularly well known until the last few years. I think even still after the remarkable run they've been on, I think a lot of consumers would only sort of vaguely be aware of what this company is and would have a hard time being able to tell you a specific model that BYD makes, right? And yet they are absolutely setting the car world on fire. And with this announcement, the sort of immediate question that it raises is, is range anxiety dead?

So I started writing about electric cars like in 2017. And that's when the thing that everybody thought about was batteries, because if you could make the battery cheaper and have more energy density does lots of range, then you're going to make this device price parity. And eventually you'll get to this point, which is making charging be as quick as a gas station stop. But

All the battery people also said, "Temper your expectations because batteries are complicated. The chemistry is complicated. It will take a while." And so I went on this wild goose chase about finding these new types of battery technologies like silicon anodes or solid state batteries that would eventually get us to this point.

And lo and behold, PYD has come out with this technology with what would be classed as an old school lithium ion battery. As far as we know, and this is where we have to rely on what the company has told us, PYD's battery is a lithium ion phosphate battery. It's one of the cheapest lithium ion batteries you can make. But it is very good because it can handle a lot of power, which is it can take a lot of electricity in a very short amount of time. And that's exactly what you need for a quick charge.

And so because the technology is not a fundamental chemical breakthrough, it might be something that becomes accessible to other battery companies in a few years' time. So this could be a technology that's available to everybody. The catch, of course, is you need a one megawatt charger and that you can't build very many of. I mean, BYD is telling us they'll build 4,000 of these in China. China, as we know, is a huge electric company.

giant, not just in making electric cars, but also deploying all this electricity generation. And so you could perhaps believe that there are one megawatt charges coming in China. Hard to see getting those here in Europe and the US in near term.

The question that I'm left with is if this is real and we do see these commercial models being sold in April as they are supposed to, how does that change the global EV landscape? Yeah, I think assuming all of what BYD has told us, we can take it to the bank and, you know, there isn't a sort of fine print, a sort of catch to all this.

It does actually put battery electric vehicles on a much more, you know, sort of competitive pedestal where, you know, even in China, I think it's gone sort of underappreciated as we've seen this, you know, more global slowdown in the momentum for fully electric vehicles. China, you know, the plug-in hybrid part of what they call new energy vehicles has really been what's sort of driving, you know, the growth for them in the last, call it year plus. And

If that is, you know, in no small part because of this very issue of how long it takes to recharge, the concern about whether or not you're going to run out of juice and need to, you know, stop for 30 minutes, an hour, an hour and a half. And, you know, and sometimes, you know, wait for a line for chargers. It's not, of course, just the idea of, you know, the charge itself. You know, oftentimes you're competing with other drivers who also need a charge. So,

If we can so speed up this process to where it's only five minutes to give you plenty of range to get you to where you need to go and continue on in your journey, that eliminates a huge sort of knock against battery electric vehicles that maybe plug in hybrids. What's the sort of real need for that? It's...

going to be sort of considered an engine that you don't actually need. And so I think that, of course, will have big ramifications as well for emissions, because while plug-in hybrids are much cleaner than full ICE vehicles, they also are not quite where BEVs are in terms of how clean they are. Well, I saved China for the end because...

When I look at liquor car stories and I like to see what's happening outside of the big markets, because the big markets are something that are very well covered. And for a good reason, they're big markets. But then you add those up and then you add the rest of the world and the rest of the world is larger. And what China is doing now is...

It's become the largest exporter of cars, and they're going into this rest of the world market in a strong way. Just recently, there was a headline from Bloomberg reporters looking at Nigeria. Now, Nigeria had cut diesel subsidies. I was aware of that, relies a lot on diesel generators. So it was moving to solar. I was aware of that, but did not realize that the downstream impact is actually so big that

that suddenly Chinese electric cars are now cheaper than the diesel alternative. Not just parity, cheaper. And there's this rapid rise of Chinese electric car sales in Nigeria. Are we just going to see, at least in the electric car space, China now leapfrog all of these other Japanese, European and American automakers?

I think this is going to be the sort of question of the next few years because we've seen it answered, can they dominate their own market? We've seen an emphatic yes, I think, especially with BYD and that company has absolutely cleaned up in China.

And they're really getting aggressive in some of the bigger markets that do get the attention. I would encourage your listeners to read a Bloomberg Businessweek cover story that our colleagues Gabby Coppola and Danny Lee wrote. It was all about how BYD was winning the global race to make cheaper electric cars. And there was this sort of reference in the opening of the story to this idea of

You know, when you think about like chicken bones that, you know, have little bits of meat left on them, that is BYD's strategy. I thought that was so insightful that they, you know, the lead of the story was all about how they're making this big play in Malta of all places, right? And this is in some ways a function of the fact that

These companies, for all the success they've had in making much better cars that are really attractive and turn heads, they still don't have the sort of brand recognition and brand value. And that's going to take them some time to build up. It doesn't happen overnight. It takes a lot of promotions and marketing, and you're seeing them spend money in that regard, too. But I think they're clear-eyed about...

The fact that it will take some convincing of people to ditch, say, a Volkswagen that people have been buying that their whole lifetime and try out a brand that they've only heard of just in the last few years. So they're really making a play for the developing world. And to go back to the conversation about the Japanese manufacturers, that has been their turf. And so we've seen this real changing of the guard of change.

China overtaking Japan in no small part because of a lot of these markets that people overlook. And one other reason is they are going to these markets because Western countries are just putting up these tariff barriers, right? Huge amount of money that you need to pay if you're buying a Chinese car in the U.S., which almost...

impossible to buy one. You could still do that in Europe, but then pay 45% tariff on top. Typically, these tariff stories tell you that, look, Europeans want to save their automakers and Americans want to save their automakers. But the reality is no auto company in the world in history has really become a big giant auto company without the domestic government funding.

playing a key role in making it a big company. So is it really fair that this tariff game is being played by saying China is so different and it's so heavily subsidizing its electric cars that they must pay this tariff?

I think, honestly, this is a reflection of the rest of the world sort of, you know, seeing the writing on the wall and realizing that they are in big, big trouble. And to your point, this is an industry that is hugely nationalistic, right? There is a reason why French companies that, you know, are not necessarily all that strong globally and, you know, in pockets of Europe even,

aren't strong, but they still dominate the French market. The same goes for Italy and the same goes for Germany. India. In India. I think this is a function of the fact that these companies are so big. The products that they make are so high value. They require so much labor. It absolutely is the case that this is an industry where the governments look out for the companies and

when you make a sort of bet on a paradigm shift, which China did years ago now, and steadily organize around that bet on a paradigm shift, and that comes to pass and you're able to do what the rest of the world has not figured out, and you sort of beat them to the punch to a substantial degree,

I think we had a sort of, oh, shoot moment. I know this is a family show. And the world is not being particularly coy about talking about...

needing to give their industry a lift and protect them from China. China was absolutely at the center of how IRA was crafted. Joe Manchin and Joe Biden, the reason they were sort of able to make the IRA work was

was because Manchin said, if these automakers want these subsidies, then build me a dang domestic supply chain. And there is no way to do that and compete with China without doing something policy-wise to account for the fact that China is so far ahead on cost and scale. Now, we have seen a shift in the American stance since the IRA.

What we don't know is how far this stance goes, right? We are getting an anti-EV movement in America, but also these tariff games that are being played by the Trump administration with allies or with enemies. It doesn't really matter.

What in 2025 should you be looking out for if you're interested in the auto market without knowing the specifics of all the weird things that are likely to happen? Where are the stress points that are worth considering?

knowing. I think, you know, the Trump administration has made an awful lot of noise about doing away with the quote unquote EV mandate. There isn't, in fact, an EV mandate, a hard and fast one, at least. But the threat of subsidies going away, especially incentives for consumers, I think is a huge story to watch because the

The way that this has played out in terms of the amount of investment by the industry, both by car makers, by battery manufacturers, by miners, you know, sort of you name it.

There's been an awful lot of investment, particularly in red districts. I think it's going to be harder than maybe the headlines have suggested for Washington to get comfortable with taking away subsidies for the companies. So maybe those get protected.

The question will be, are those investments still money good if at the end of this chain, the consumer isn't incentivized to actually buy? Because what we need to see as an industry is scale. And in order to have scale make any sense, you need people to buy what you're making.

And I think there's a lot of doubts about being able to achieve, you know, what was sort of, you know, desired under the Biden administration, given the constraints that Trump has sort of signaled he's going to put on this industry and his complete disinterest with wanting to see EVs continue to maintain momentum.

Well, this was really fun. And I wish you that you get more sleep in 2025 and are not disturbed by too many Elon tweets. I'm not counting on it, but thank you. Thank you for listening to Xero. Sign up to the Hyperdrive newsletter for all the latest in the EV world. There's a link in the show notes. And now for the sound of the week. That's the simulated exhaust sound of the Dodge Charger electric muscle car. Because some people just like to be loud.

If you like this episode, please take a moment to rate and review the show on Apple Podcasts and Spotify. Share this episode with a friend or with someone who's thinking about buying a Chinese EV. You can get in touch at zeropod at bloomberg.net.

This episode was produced by Oscar Boyd. Bloomberg's head of podcast is Sage Bauman and head of talk is Brendan Newnham. Our theme music is composed by Wonderly. Special thanks to Maithili Rao, Somer Sadi, Moses Andim, Blake Maples and Siobhan Wagner. I'm Akshat Rati, back soon.