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The Rise and Fall of Nissan?! The Future of Batteries & the UK's Path Forward – with Dr. Andy Palmer
00:55:29
From pioneering the Nissan LEAF to shaping the future of electrification, Dr. Andy Palmer has seen it all. In this episode of the Fully Charged Show Podcast, Imogen Bhogal sits down with the legendary automotive leader to discuss: ⚡The untold story...
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- [00:00]
A
Hello and welcome to another episode of the Fully Charged show podcast, where today we're catching up with the wonderful Andy Palmer, who is often known as the godfather of EVs, previously holding roles as Chief Operating Officer at Nissan and also as CEO of Aston Martin. Today he spends a lot of his time looking at the future of batteries and cheaper electricity. And in this podcast we span so many topics from the role of apprenticeships to the UK's industrial strategy, or lack thereof. The rise and demise of Nissan, as well as the future of cheaper electricity and driving for free. You're in for such a treat. It was such an honour and delight to speak to Andy, but before we get to that, a very quick advert break. Try everything electric at our exhibitions in Australia, Canada and the uk. Next up, London. Andy, thank you so much for, for giving up your morning. We were just chatting before we clicked start record and there was big celebrations in your household last night. So I'm very grateful for you giving up your Monday morning, the day after, a big celebration.
- [01:08]
B
Daughter's youngest daughter's 18th birthday. So they're all adults now.
- [01:15]
A
All adults. Does that mean you know, you can, you have no responsibilities or.
- [01:19]
B
I didn't find that to be true of my 30 year olds so far. So no, I guess kids always, they never fully leave the payroll.
- [01:31]
A
Never leave the payroll. And I think we all need parenting in some regard. Forever, probably.
- [01:38]
B
Yes. And I think we would probably miss it if they weren't asking occasionally our advice.
- [01:44]
A
Yes, I know that. So my dad is, he was a doctor whilst he was working and he really comes into his own. If we have an injury, suddenly he feels very, very useful.
- [01:55]
B
I'm a doctor, but of the wrong type.
- [01:59]
A
Wrong type for medical terms, but definitely right type for this particular conversation. Now we were also chatting that, you know, many, many people in our, in our audience will be absolutely aware of precisely who you are, but there will be a few for whom they, they won't be as familiar with your story. And in preparation for this podcast, I was sort of going back through your archive of your career and it's been absolutely fascinating and I wonder if you could take us on a brief whistle stop tour of your career.
- [02:27]
B
Oh, my goodness. It's been a long time. 46 years, I think, in the auto industry. So I left school, I didn't like school, so I left school at 15, knew I wanted to be something to do with engineering of cars and so started an apprenticeship with a company called Automotive Products and really blessed because it worked for me. So I'm a big advocate of apprenticeships. I'm also a big advocate of a formal degree system and I worked hard. I finished getting my doctorate when I was 40 years old. So I've sort of gone on this parallel journey. But what apprenticeship gives you is very early insight into what, what I like to say is where the, where the bodies are buried, you know, how the Gemba, the shop floor really works. And I think it helps you empathize with people when you're into senior management. So I started as an apprentice learning how to draft clutches and brakes and semi automatic gearboxes and stuff that were around and starting up in the 80s. I then. So I finished my apprenticeship, I went to college night times and weekends to do essentially a bachelor's in management, which gave me after three years a stepping stone into Austin Rover. Austin Rover were great insofar as I got a lot of experience, but they also insisted that I needed to have a degree in engineering because that was my discipline. So they sent me off again part time to do a master's degree in engineering at Warwick University. Met Lord Batacharia, famous in our industry, which is a great connection later in life. Working with Honda at the time you, you might remember, you won't remember, but you might remember from the history books all of the tensions around the auto industry at that time. Austin Rover, Rover, British Leyland were working with Honda. Fascinating. Working with, with the Japanese. I thought I'd shoot off and work for the Japanese for two or three years, get some experience and bring it back to the car industry. I ended up going to, to Nissan actually, and stayed there for 23 years, 10 years in the UK, getting eventually to the top of engineering in Europe. And then when Renault came in and essentially acquired Nissan in what they called an alliance, the then CEO, Carlos Cohen asked me to move to Japan into a business role to take over responsibility for light commercial vehicles. And that was the rise of my career in a business context, mainly around planning, product planning, around sales, marketing. But I think in this context it was around establishing the business unit for zero emissions, which is the unit that ultimately inspired the Nissan Leaf. And we can get into that if you'd like. Then I rose right the way up to, I suppose number two. I don't like necessarily to express it in that manner, but chief operating officer responsible for most of the operations of Nissan globally. And then somebody came and knocked on my door and said, would you fancy the CEO role at Aston Martin? And Aston Martin is, as you know, just down the road from where I was brought up. So it was like a homecoming. So six years at Aston, changing its profile to be rather than one just of GT cars, but bringing the SUV and the Valkyrie as two bookends, trying to get it on its journey towards electrification before then handing over to Lawrence Stroll and setting off on, I would say, trying to close the link between the Leaf and the current state of play. I always considered that I'd failed with the Nissan Leaf because I hadn't managed to make it zero. Well, to wheel, I'd only managed to make it as a car. Zero emission or zero tailpipe emissions actually. And so I wanted to spend the rest of my career, if you like, the twilight of my career, trying to look at how you could move transportation from zero emissions to what we now call net zero and looking at it from the battery maker's perspective, the cell maker's perspective, the energy provider's perspective, the car maker's perspective, and try to find a pathway which would, which would enable at least partially my own little contribution towards net zero. So I do now a lot of work in the battery space, in the charging space and also in the sort of industry consultation area. And that's why you find me sometimes commentating around what I think, why anybody cares, I'm not sure, but what I think about certain things. I spent a little bit of time advising the current labor government in terms of what their net zero transportation policy should be, but also we're spending time with the Japanese government, with the Slovakian government, with the Spanish government, equally trying to influence that step towards not damaging the earth. I won't say necessarily 100% advocating EVs. I'm a great believer in Darwinism, but basically advocating for steps towards net zero.
- [08:07]
A
So you're not busy at all really? Very lazy, in fact.
- [08:12]
B
I like being busy.
- [08:14]
A
Well, there are so many things in there that I think you've teed this conversation up absolutely perfectly. I know that we're going to spend a chunk of this conversation talking about the Nissan Leaf and of course the work that you do with batteries today. But I want to just touch on that idea of the value of apprenticeships, but because it's something that I have also experienced very, very viscerally. I think for me it wouldn't have been appropriate to do an apprenticeship because as an 18 year old, as a 16 year old, I had no idea what I wanted to do. And so I think I valued that exploration at university. But they have then went and worked with apprentices at Jaguar Land Rover and typically they sort of fitted the mold of didn't get on particularly well at school, wrote incredibly practical, had a sort of more inherent understanding of engineering, did know that they wanted to work in the automotive industry and as such the organisation was sort of in their DNA. They knew it inside out, back to front and they would have these absolutely incredible monumental rises through the organization as a consequence. And I think we, you know, definitely perceptions around apprenticeships are changing but they cannot be celebrated enough because they're incredible. And especially in technical disciplines they are.
- [09:27]
B
And they're not for everybody. So I'm not advocating them as the only cup of tea, but I'm a little bit concerned that the 16 to 18 year old apprenticeship systems in the UK are declining in a moment where they should be increasing. And we have a high proportion of kids between 16 and 18 that are neither in full time education or, nor in college or apprenticeship. So they're setting themselves up to be the low paid workers of the future. You've got to acquire skill, you've got to acquire. Know how some people do that better through the classroom, some people do that better through practical application. I fell into the latter, I fell in love with academia later. But I do think that if you're, if you're in the category of, you know, you want to go to engineering or you know, you want to be in the automotive industry, an apprenticeship, even better, a graduate apprenticeship that pays for your, for your degree is a really good route worth exploring. Or if you're a little bit aimless, I mean rather than doing nothing, take an apprenticeship in, I don't know, plumbing or electricity, electrical engineering, at least acquire a skill because that acquisition process just makes you more valuable even if you don't end up doing plumbing, it makes you more worldly wise. So I do think that the UK really needs to step up its approach to promotion of apprenticeships, really needs to look at the apprenticeship. Levy really needs to concentrate on that group of 16 to 18 year olds so that we don't lose them forever.
- [11:16]
A
And does that form a part of your conversations that you have with say the Labour government when it comes to net zero?
- [11:23]
B
Yes, I advocate a lot and I have a foundation which currently has about 18 kids within its, within its training program. It's not huge, but it basically advocates for kids from disadvantaged backgrounds and pays for their, their apprenticeships. And again they're level, they're level two and level three apprenticeships. But, but I would like to think that even 18 kids, that we're changing, we're changing the future for a few of them and I, I, you know, it's that, that I then use as a platform to, for talking to government. The problem with government is that most of them, no criticism of them, but most of them when to 9 unit nice universities and studied PPE. Same for the civil servants. It's really difficult to find anybody in government that understands the concept of stem. So, you know, a science based education. My count says that about 6% of parliament in total basically went through some form of STEM training and work practice. And so you can talk about it theoretically, but unless you've been through an apprenticeship or you've been through a science based degree, you really don't understand it. And you know, politics and philosophy are a world at Oxford or Cambridge are a world away from Warwickshire, Mid Warwickshire College of Further Education, which is where I went. So I think it's really difficult to put yourself to be empathetic to the needs. And the most important point is an apprenticeship is all about the training on the job. Yet the apprenticeship levy only rewards the time in the classroom. And most kids that are doing an apprenticeship aren't good at the classroom bit. What they're good at is the practical bit. And the levy doesn't address that. So I think we have a long way to go. But what is sure is apprenticeship participation in that 16 to 18 year old group is reducing and that is a problem.
- [13:37]
A
It's, it's, it's so fascinating. And this is where I'm going to confess that I went to Oxford and I did engineering and I also did an internship at Citibank because I totally fell into the trap where Citibank come along and take you out for a lovely lunch and then suddenly you're on the interview process. And I had to have this real moment of this is this is not what I want. I did an internship also at Jaguar Land Rover and adored the practical side of it. But I think also in doing that graduate scheme is extremely humbling because you know, you go to Oxford, you think, wow, that's an incredible academic institution. And I worked with engineers who'd been on much more practical courses either through apprenticeship or through university. And I was like, I am a terrible engineer, I might be good at maths, but I have, I'm just operating on a different plane to these incredible people.
- [14:26]
B
Well, the different people, as I said, there are many tunes and I work with Oxford and I share a number of companies that have spun out of Oxford and it's a fantastic institution and they're a place for people that are coming through that training group. But the key And I think this is the key of the institute is you're not fully rounded until you've spent four or five years in the workplace. Likewise as an apprentice, you're not fully rounded until you spend time furthering your education. And I like to say that what you're really looking for is a 25 year old, no matter which way they've come in, that they've acquired both academia and practical experience and that sets them in a really good place. But you're right, if you come out of Oxford and you spend all your time in the stress analysis office just doing maths, then you can't call yourself an engineer. Likewise, if you're. Likewise, if you're a turner that spent all their time on the shop floor, you also can't call yourself an engineer. You've got to get a mixture of both. And that's, that's what I believe that we should be doing. That's what I've seen done really well in Japan, in Germany and where I feel that we, we as the UK used to do it really well, but we don't do it really well anymore.
- [15:49]
A
So you've teed up one of my questions perfectly. Because I mean you mentioned yourself you spent 40 something years in the automotive industry. 10 years in automotive companies tend to be pretty long. And additionally it's partly because the product life cycle is quite long. From first moment that an idea is conjured up on a piece of paper to full scale production might be eight years. And yet when we see how the industry can be supported by government, often those 10 years are much shorter, political cycles are much shorter. How do you think that disconnect impacts how the industry or that disconnect in timing impacts the support that the industry receives. And how could we close some of those gaps?
- [16:31]
B
Well, I wish I knew the, the answer to the latter one because it, you, you, you explain perfectly the rise of China. China. I'm not advocating for a single party state or anything like that, but the fact that China has a single party state, that it's able to write a 30, a 20, a 10, a 5 and a 1 year program for its industries and is able to stick to it, is precisely why you've seen this phenomenal rise of the Chinese. Back in 1992, China government decided that they couldn't beat the west in internal combustion engines, so they had to look for alternative powertrains. They called it new energy vehicles at the time when I joined the board of Don Don is Chinese national car company. So in 2002 I think it was we had the order that Don Brand needed to acquire as much know how as possible from Nissan and from Peugeot and from Honda, learn how to make cars, but then move towards electrification. And at that stage 2002 they weren't quite sure whether that was plug in hybrid or EV. But by 2008 it was clear that it was going to be EV and this is where they were going to win. And they did exactly that. And as you know, by far the bulk of EV know how, and I do mean know how, not just cars, they are 10 years ahead of the rest. And so there you see the benefit of longevity of government, but maybe not in a form of government that we would advocate for. So I mean my, my conversations with other, let's say democracies and in particular the uk, starting with our previous Conservative party and then with Labour is industrial strategy is really important because industrial strategy sits with the civil servants and that gives you the longevity of it in spite of the power or the color of the power and color of the party in power. So I think it's really, really important that the industrial strategy is built from the bottom up, that it is not party politically driven, so it's held by the civil service if you will and that it's able to sustain long term investments. And more than anything else ties together the bit that we're really good at, which we sometimes call TRL123 which is the Conceptual Engineering Oxford and Cambridge Imperial UCL Warwick. They're all really, really good at this making stuff which we are good at actually when I think about things like Nissan in Sunderland or Toyota in Derby, we've proven that we can build stuff at a globally competitive level. But we're really, really, excuse my expression, but we're really crap in between the valley of death, which is basically the ability to finance our really good ideas and see them through the industrial cycle. And that's an area where an industrial strategy, if this was where governments of any color were going to prioritize their investment because that's what's agreed in the cross party industrial strategy, then you've got a better chance of having an industry in 20 years time.
- [20:18]
A
So fascinating because we definitely have the same conversation with many of the different people that we have on this podcast and on our episodes, that commitment to long term vision, irrespective of how that's achieved sort of politically that just, you know, this direction of travel needs to be set. And I was chatting about this also with my family and my brother in law said yeah, we need to sort of, you know, look at that valley of despair and that valley of death and actually just build a bridge of comedy to traverse it. So I think call it a bridge of comedy or an industrial strategy. Either way, it sort of works. I want to go back to the Nissan Leaf, which you were absolutely instrumental in it, in its delivery, but that was back in 2009, which was a very, very different world. Back then, electric vehicles were still considered, you know, certainly in Europe as a bit of a weird thing. And I wonder whether internally was there sort of complete commitment that that was the direction, or was it a particularly divisive product at the time?
- [21:22]
B
It was very divisive. So amongst my portfolio responsibilities I had sales and marketing. And in sort of 2007, 2008, you started to see the emergence, actually, look far back as 1996, actually you started to see the emergence of hybrid. Actually, Nissan was very early, had something called a Tino hybrid. But what you saw was the emergence of the Toyota Prius. And talk about a company that has a long term vision. Toyota is really strong there and was prepared to lose money on its first and second generation of Prius. In particular, in Japan, where the sales and marketing function was quite strong. They were screaming for a, say a Nissan Prius. And it was, you know, they were blaming everything on the product plan for which I was responsible. My view was following Toyota is not going to get you to a position where you can beat Toyota. Toyota is just, just this enormous machine that does things really, really well. What you need to do is you need to, you need to leapfrog it. And so I'll now take you back to 2001, which is when I first moved to Japan. I moved to take over as what was called a program director, one of the six channels of sort of the CEO dividing their portfolio into six. And you're responsible for the profitability of, in my case, light commercial vehicles. Light commercial vehicles by 2001, was the only part of the portfolio that was losing money, other than one other vehicle, which was the Californian compliant car. And so some bright spot decided to put all of the loss making cars all under me, which was amazing, as you can imagine. But what it did do is it gave me the keys to the advanced technology of the company to understand what the clever bods in Atsugi were really, really doing. And it was. They were playing a lot with the lithium ion battery. And I became conscious of this capability. So faced in 2008, oddly off the back of the Lehman shock crisis, because that opened up A lot of potential capital. What I was saying was we should leapfrog Toyota, we should not follow them. Honda decided to follow them with the Insight and the Insight honestly was a failure. We decided to leapfrog, but it was a divisive product because not everybody supported. Fortunately, Carlos Ghosn, my boss, gave me air cover and Yamashita San, who was head of R D was absolutely committed to the technology. So we were able to put a construct a concept that said, we think, looking at all the data, that the future of motoring is largely around the advent of the lithium ion battery. It is really expensive, so let's not make the battery too big. We decided right or wrong, probably wrong on 24 kilowatt hour on the basis that most people only do 20 odd miles a day. 11 miles per journey, I think was the global average. So you can get away with a small battery. By the way, at that time that battery cost us $1,000 per kilowatt hour. Today you can buy a battery for about 50. So you see, you see the Morse curve really at work. Nobody could make the battery. We had a concept of a battery, but nobody could make a battery. So we ended up making a joint venture. I had the pleasure of saying I signed the joint venture with NEC to create aesc. Of course AESC is now envisioned and is one of the biggest battery makers in the world. But it was birthed out of of the need to make a battery for the Nissan Leaf, which we did and we spent on the platform the best part of $4 billion creating Leaf and at launch, which was 2010, created a car that I think was quite good, probably limited by its range, but the price that we charged, we wanted to try to get to something around about 30 to $35,000. So affordable C segment car didn't even cover the cost of all of the bits, let alone the overheads and everything that you allocate didn't even cover the cost of the bomb. And so yes, what you created internally was two tribes. The tribe that advocated for the future, the Moore's curve, the maturation, the technology win associated with the brand I was responsible for marketing. So innovation that excites that stood for all of that and the practical guys on the other side that said, hey, we just lose money on this, we should stop doing it, it doesn't work. And so I was able to bring it to market. I was also able to bring the ENV 200, the van to market in spite of the fact that it was very anti gon insofar as it lost money, but he was able to give me the umbrella to, I would say, protect me politically from the other tribe.
- [27:13]
A
That's an incredible story that I hadn't ever heard that sort of so succinctly sort of spelt out. And I think I can imagine internally that actually, yes, of course, the cost that you were selling it for didn't actually cover the bill of materials, the bomb cost. But in a way, it's a bit like the analogy of pulling back the catapult. You need to do that in order to sort of ping off and set the right trajectory. And you need to always sort of focus on the same vision for everyone to be brought into that mission. And of course, that invariably doesn't happen.
- [27:47]
B
I hear a lot. There's a lot of debate, divisive debate, isn't there, around electrification now out in the public, in the public discourse, it's not so different from the discourse internal to the company in 2010.
- [28:05]
A
Yeah.
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B
Can we really make a difference just as Nissan, can we really make a difference as uk? Is it the right technology? Doesn't the battery take a lot of minerals out of the ground? All of those myths that you hear today were, let's say, coming from the other tribe inside of Nissan. That was really what they were really saying is it's really, really hard work to compensate for the loss that we're making on Leaf by the other portfolio. And my bonus is paid this year, it's not paid five years from now.
- [28:48]
A
Yeah. And also, I guess the other challenge there is that for so many people who bought the Nissan Leaf and love. Continue to love the Nissan Leaf, the miles totally made sense. But there was also a consequence that then people who are skeptical towards EVs look at the Nissan Leaf as their sort of benchmark still of, oh, yeah, but they don't have much range. And then there's sort of this whole narrative of, yes, but the Nissan Leaf was never designed to have a load of range. And also now look at what you're able to buy on the market today and what that car sort of enabled in, through virtue of its existence. And they're impossible conversations and debates to have. And, you know, I was away with friends over the weekend and the debate comes up at about 10pm after we've had a few bottles of wine, I think, how much do I want to get into this at this point in time? I'm not sure.
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B
I think I've quoted just in this discussion, the Moore's curve, which, of course is that the maturation of Technology over time and the speed that you come down the curve, that applies pretty much to almost all technology. And if you don't understand that, then you don't understand why you would make an initial investment or you don't understand why the UK should lead and lose in the beginning in order to win in the long term. It really is about understanding the technology, getting to the economies of scale, finding the most cost effective way of doing things that technology allows you to do. I think that's the key is if you think long and you understand the principle of the Moore's Curve, then you will invest. And I sit now with regret because I have to say after my last board meeting in Nissan was July 2014 and I bought to that board meeting the third car, which was the Infiniti. It was the start of the Infinity's journey on electrification and we had that big two tribes argument. I didn't lose it, but I didn't win it. It was deferred until the September board and in between that I left and went to Aston and therefore the second tribe won. The Infinity was cancelled. Subsequently, the replacement to the Leaf was cancelled, the Blade Glider was cancelled, the Sakura Kei car was cancelled. All because, all for very rational, short term reasons. But I sit back and I say, just imagine that in 2014 that Infiniti had started on its journey. Infiniti is nowhere now. It's an irrelevant luxury premium brand. But if you look at where Tesla is and the value of Tesla, Infiniti would have been ahead of where Tesla is from that movement point of view. Could have been in a very, very different place if you'd stayed committed to the Moore's Curve, to the execution of an electrified platform. Where Jaguar wants to get to talking about your old company, he wants to go 100% electric. It's 10 years ago, Infinity was on that journey. And I think Nissan honestly I believe wouldn't be in its current trouble and strife as an almost bankrupt company right now. It wouldn't be there had it pursued that commitment to electrification and more importantly to technology, because that electrification was enabling connectivity, it was enabling self driving. And much of what you see with, let's talk about the company of Tesla, not of its owner, the companies of Tesla with its innovation. Nissan was ahead of them.
- [32:38]
A
And I think now we fast forward to today and the conversations with Honda have collapsed. They are in financial peril and they are lobbying fiercely against the government around the ZEV mandate to include, well, to have to loosen the regulations around that. Do you feel that had they committed to that long term vision and brought the Infinity to market that they wouldn't necessarily be in this position today.
- [33:03]
B
Yeah, you don't hear Musk complaining about the Z mandate, do you? In fact, his point of view is you can take incentives away because I'll win anyway, which gives me an advantage over others. I find it ironic that The Nissan that 10 years ago was advocating for electrification was very much behind the UK government supporting and with, with incentives that the need, well, very much incentives to bring battery manufacturing and leaf manufacturing to the United Kingdom that that particular company should be now backing away. I think this is, you know, labor is a new government 14 years out of power. You have to get used to how car companies work. Car companies will do two things at once. They'll get working on the technology path at the same time. They'll spend a lot of money on lobbying to delay the inevitable. And you don't have to take too seriously the threats of what they may or may not do. Ultimately they'll be rational. What the legacy car companies actually need is countries like the United Kingdom to move quickly so that they can test their technology quickly before it gets more expanded across the rest of the world. So the more open minded companies, the companies that are reasonably well forward on the investment cycle will not be the ones that are lobbying against the ZDEV mandate. The ones that are lobbying against the ZEV mandate are those that have screwed up their product development and are late and all they're trying to do is protect what is essentially poor product management to give them a chance to catch back the problem. I find, and we can have this conversation about tariffs in the U.S. for example, is when you move to protect your industry, which you have to find a way of helping, not protecting, but when you do, you lose the spark of innovation and you fall further behind. And what I fear for when you talk about Ford or GM or Chrysler is that the tariff protection will protect them for a while, but they'll become even more uncompetitive with the Chinese. So when those tariff barriers lift or when the consumer demands a move towards greater electrification, greater autonomy, their industry won't be fit enough because it hasn't been exercising its muscles in a competitive and open market.
- [35:42]
A
Yeah, because I guess like it, it depends how you use that time, right? It's like is that giving you affording you a little bit of time? I don't know if you remember Bernard's watch the show where he could pause time for a moment in time, you know, do tariffs give that ability to pause, catch up, springboard or is it that mentality of pushing the problem down the road and decreasing your innovation?
- [36:06]
B
So I think, I think if you spend the time well, then it has a merit.
- [36:12]
A
Yeah.
- [36:13]
B
When you accept that you were slow, slow towards innovation, then I think it can be used positively. I think my concern is that in addition to the dialogue both in Europe and in the US around tariffs, you've also got the same people with the same dialogues talking about not believing in, in net zero, meanwhile the planet burns. And I think if you hide behind a wall, but also don't believe in the need to catch up, then eventually you'll be irrelevant. Because at some moment, at some moment, climate change is going to become real to each and every one of us. And at that moment, when it suddenly dawns on everybody that climate change isn't just something for PhDs sitting in Oxford and Cambridge and other institutions worrying about something theoretical, it's real. It's affecting the weather, it's affecting temperatures rising faster than any time in history. The 1.5 degree really does mean something. Fires burn in California. Floods exist elsewhere in the world. As it starts to become very real, humanity has to move. And it'll be those that have been exercising their muscles, principally the Chinese in this case, that will inevitably win because their technology is so far ahead. And that's tragic. And that's, that's why, you know, that's why I spend time talking to you here, is to say we have to keep our muscles toned, we have to invest in technology. Not, not just because we save the planet, but because we also is the only way of saving our industry.
- [38:00]
A
Yeah. God. Oh, I feel in my head I'm like, right, there are 10 million questions that I could continue to ask you and I know I need to be selective here, so I'm going to pivot the conversation to batteries. And I know that we're going to continue talking a little bit about China under that umbrella, but you have been extremely, extremely busy with a large number of battery startups. And earlier in the podcast you mentioned that, you know, the Nissan Leaf looked at zero emissions from the tailpipe, but now you're trying to address that kind of upstream part of this and that getting towards zero emissions from a well to will perspective as well. But also a lot of those battery companies that you're working with are looking at stationary energy storage. So I wonder if you could give us a bit of an overview of the various startups that you have in the works and what your long term vision is there.
- [38:53]
B
Of course. And I never quite Know where to start with this story. I'll start with. I think battery technology can be divided into really three important aspects. Basically chemistry which is the way that you mix the, the formula inside the pouch or the cylinder. So chemistry, what I would then call cooling. But it's really the way that you pack the cells and the way that you cool the cells and then finally control which is sometimes called the battery management system. And you have to master all three. Most of most of the work till now and certainly most of the work I did at Nissan was in the chemistry area. It's the optimization of either lfp, lithium phosphate, which is the cheap chemistry but can be cycled a lot of times, or the more expensive chemistry of NMC on a path to what I think people will generally recognize as a solid, a solid type of cell, a solid chemistry which I think is probably the long term future. So you've got these two paths, solid state and low and cheap. LFP perhaps eventually, perhaps being sodium ion, those are the two paths that you need to consent of. But actually if you spend too much time worrying about the outer edges of chemistry, you miss the fact that you can actually have a big impact on the life of a pack by taking care of the, the way that you cool it and keeping the cooling across all the cells within a certain constraint. And so the way that you pack is really important. And then likewise you can have an awful lot of influence on the life longevity cycles by the way that you control it. So I divide my life in essentially those three so chemistry. I work with a company called Inabat in about a Slovakian cell making company. It's one of the few last man standing cell manufacturers that isn't of Chinese descent. So you know, I hope that it will eventually become one of the pillars of European cell making. The second One is the PACs. And I work with a company called Ionetic which is looking at the way that you do low cost packs to make it more accessible, particularly to UK boutique car makers, lower volume car makers and then on control the electronics. I work with an Oxford spin out called Brill Power which has got this really cool technology where rather than one BMS controlling all of the pack, you break it down to strings of cells and then you extract the right amount of power from each of the cells so that you don't unbalance the pack. And it's really, really smart technology. It's all a bit nerdy but, but expands the life of the battery. And so those are the three that I work with and then I have My own two companies. One is consulting Palmer Automotive. The other is Palmer Energy Energy Technologies, or Petal. And it's all about static storage. Now, why static storage? Important. So I told you earlier, I'm trying to complete that task I set myself in 2008 of how do you make zero? Well, to wheel, you expressed it really well. That's how I would express it. And for that to happen and to be successful in electric cars, you've got to address what I think are the two main limitations. One is the cost of the car, and the other is the cost of charging the car. On the cost of the car, you've got to look at parity with an internal combustion engine. And in general, the fastest way to get to parity is to reduce the size of the battery because the battery represents about 40% of the cost of the vehicle. But no one is going to live with range anxiety unless we can see a prolific rollout of charging. And so the way of addressing the cost of a car is to make sure the governments around the world assist the industry in rolling out fast charging, but also home and work charging. Home and work charging is so important, they represent 70 to 80% of the way that we charge our car. So don't ignore it. Just spending lots of money on fast chargers is not the whole solution, but the solution is there. You now can go out and you can buy a car that's at parity with an internal combustion engine, and that will address your market share and your volume. So you get onto a virtuous circle. But on charging, parity is not good enough. You've got to make a profound impact on the, on the cost of travel. And to me, a profound impact means you need to be able to travel for free. So who wouldn't consider an electric car that costs the same as a gasoline car, but didn't cost you anything to run? And so my goal through Palmer Energy has basically been driven by that give every customer ultimately about 50 miles a day of free mileage. How do you do that? Well, it's nothing to do with the car. It's to do with the way that you, you democratize and decentralize electricity. And you do that basically using batteries. Batteries allow you to, when you're not using electricity, for example, during the night, but the wind is still blowing, that basically you dump that, that cheap electricity into a battery and you use that battery electricity when the electricity is expensive to charge your car. But anything that's left behind, you sell back to the grid. And by doing that, then you can Essentially pay for some part of your mileage. And so static batteries, whether they be residential, connected to solar, if you're lucky enough to have your own roof, whether they be what we call commercial CNI connected to your fast charger, or whether they be grid scale, basically helping support the grid so you don't have to build lots of new power stations. Basically they work in concert with the electric vehicle. And that democratization and decentralization of electricity actually becomes the bigger picture, the macro picture of which using an electric car is simply part of, because for 80% of us, I mean, there are going to be a few dinosaurs that will want to continue no matter what, to, to run around in a dirty diesel. But, but for the majority of people, if you can have electric car, which you and I know is great to drive, there's no great negatives. You know, you can charge it, you can buy it, pay the same price as you do for your gasoline, but you can run it for practically nothing. What's not to like about that? And that for me is how you move it from relatively niche technologies, 20% of the market, to the mainstream, and let's say 80% of the market, you have to address that electrical distribution piece. And so that's where I concentrate much of my effort these days, along with pod point, which of course is the connection between the battery and the car. And I chair pod Point. So that's how sort of all the dots join together. I know it looks pretty complicated if you look on my LinkedIn profile, but there is a plan. There is a plan.
- [47:12]
A
Well, I think as soon as you said chemistry, cooling and packaging control systems, I was like, I've got it, it totally, totally makes sense. And actually that that fourth component around making electricity cheaper, such that we're not just getting price parity, but it's just so overwhelmingly compelling. Why on earth wouldn't you do anything differently? And actually, last week I interviewed Dr. James Richardson, who is from the Climate Change Committee 7th carbon budget has been recently published. And the key thing, the key output of that is that here are the sort of ingredients that we need to achieve our net zero carbon targets. However, the real key to unlock this is cheaper electricity. And there are a number of things that we need in order to enable that.
- [47:56]
B
We talked about two tribes earlier. I mean, clearly you're threatening an industry, the power generation industry, which is hugely politically powerful, and you're going to get pushback. I mean, the two tribes in Nissan was a breeze compared to basically changing the way that we consume electricity. But why wouldn't you? Why wouldn't you? Question, for example, all of our electricity is pegged to the cost of gas. Why it represents 50% of what we use or less. You've got to start changing that. You've got to start changing the way that we facilitate, for example, residential batteries. At the moment, it's almost impossible to participate in the trading of electricity or most of the parts of trading electricity from a home system. You've got to be part of the club. You've got to be able to get that planning permission, you've got to be able to get that G99 certification, you've got to change all that. You've got to make it much more open and put the power of trading in the hands of the consumer. And that will force the cost of electricity down. But that, of course, is going to meet with opposition from the current incumbents.
- [49:14]
A
And what is so exciting as to people who are entering into this space, is that, my word, how many different products and services and new jobs and new innovations can, can be produced as a consequence of totally rethinking this electricity market. But at the same time, exactly as you describe, we have to battle this legacy of how this has always been done and the institutions that exist around that.
- [49:37]
B
Well, that's why I often rail against the commentator that says the UK is only 1% of the CO2. Why bother? Or your net zero is killing our car industry. I tell you what, it's not. It's the exact opposite. It's, it's. We don't. If, if the UK was a laboratory for all of this innovation, where companies could invest here and, and, and validate their, their technology, if the UK was a leader in this space, we would be rebuilding our industry. We wouldn't be risk losing it. Where you risk losing it is where you sit behind those tariff barriers and you let those muscles decay.
- [50:19]
A
So we've spoken about a lot of things in this podcast and the thing that has really struck out to me is that in the UK we have a lot of expertise in those early technology readiness levels. We do also have, if we continue to build those muscles and use them, we have an enormous amount of manufacturing capability as well. Yes, it feels often that we're missing this key piece, which is the industrial strategy. And of course there is general chaos across the world with regards to where we are with even and believing in Net zero as a concept, as well as tariffs as well. You're obviously impacting a huge amount of this and doing everything within your power to push us in the Right direction. But if you could ask for one thing, if you could have one wish granted that could, I guess, protect the UK automotive industry, but also generally get us in the right direction when it comes to electrification, what would you ask for?
- [51:18]
B
I've never had a fairy godmother, so it's a tricky question, but I think we used to be good at it, so let's call it a return to consistency and British reliability. So people used to invest here, including me sitting on the board of Nissan, because the UK was very predictable. We have English language, we have English rule of law. But most importantly, from a policy point of view, you knew if the UK said it was going to do something that it would generally basically do it. In the last, I don't know, five or six years, certainly from COVID onwards, I would say even post Theresa May government, we have become completely unpredictable. One moment, you know, Boris pushing on around net zero and making commitments that he couldn't live up to, then the Liz Truss era. Are we in Zev Mandate? Are we not? Are we 2030, are we 2035? Are we not? We're just completely unpredictable and nobody will invest in that circumstance, nobody will invest in something that's uncertain. And so I think why I advocate for an industrial strategy is it gives a degree of certainty around what you're thinking and what you're doing. So that would be one. And I'd be getting on an airplane if I was in government, getting across to partners in China and in Korea and in other places around the world and saying, look, we're an open marketplace, we believe in technology, we are your laboratory, we are not going to put tariffs in place. But the quid pro quo of that is you invest in our supply chain, you invest in our industry and you know that we're reliable for the next 10, 15, 30 years. And so I guess it's that that I would look for, for a partnership between government and industry which is reliable in its. In its ability to commit to something.
- [53:40]
A
Seems like an easy ask, doesn't it?
- [53:43]
B
I'm no politician, so I'm sure it's harder than I make it seem. But the key there is, is the partnership. I think in times of massive change, you can't just rely on market forces. In the traditions of capitalism, you have to have a certain amount of Keynesianism, you have to have a partnership between industry and government and probably academia, and it's that collaboration that is really, really important to win, as we see in China.
- [54:14]
A
Goodness, I think that is a perfect note to end on and We've been chatting for 53 minutes and 42 seconds, and yet I feel we could absolutely double the length of this podcast because there are so many things that I haven't had a chance to ask you. Is there anything else you want to finish on before we wrap up?
- [54:31]
B
All right, let's do it again sometime.
- [54:35]
A
Let's definitely do it again sometime. Honestly, Andy, thank you so much. This has been an utter privilege and delight to have this conversation. And yeah, I'm very grateful for you giving up your Monday morning.
- [54:44]
B
My pleasure.
- [54:46]
A
So there you have it. Consistency, being a reliable partner, and an industrial strategy which fosters that innovation. I certainly feel a little bit wiser for having had that conversation with the wonderful Andy Palmer. But that's it. That's all that we have time for. Before you go, if you could do us a teeny tiny favor of, like, commenting, subscribing, or sharing this episode with a friend, I cannot begin to tell you how truly, truly appreciated it is. It really does ensure that we can keep on carrying on having the cool and interesting and important conversations we which are so necessary in this clean energy transition. But that's it. Thank you to Katie from our team who will be editing this particular episode, and if you have been, thank you for listening and watching.