Our Electrified Future with Ponz Pandikuthira, Nissan Americas

MotorTrend

MotorTrend's Ed Loh & Jonny Lieberman sit down with Nissan Americas' Regional SVP & Chief Planning Officer

Transcript

00:00:00Welcome to The Inevitable, a podcast by Motor Trend.

00:00:16Hi there, and welcome to The Inevitable.

00:00:18This is Motor Trend's podcast,

00:00:20our vodcast about the future of the car,

00:00:23the future of mobility,

00:00:24and we're coming to you live from Tennessee.

00:00:27Actually, we're not live, we're recording,

00:00:28but we're still in Franklin, Tennessee,

00:00:30at Nissan's headquarters.

00:00:32Why? We have two very special episodes.

00:00:35This is the first of two,

00:00:36but before we get to our guest,

00:00:38Ed Lowe has a special message just for you.

00:00:41The Inevitable vodcast is brought to you

00:00:43by the all-electric Nissan Ariya,

00:00:45inspired by the future designed for the now.

00:00:48And yes, that's right, Johnny,

00:00:49we are here at beautiful Nissan USA headquarters

00:00:53in Franklin, Tennessee.

00:00:55We're in this beautiful set,

00:00:57which was a converted office.

00:00:59And today we're going to talk to

00:01:01the SVP Chief Product and Planning Officer,

00:01:03Pans Pandekuthira,

00:01:06who's in charge of basically all of Nissan products

00:01:09for the Americas.

00:01:10Right.

00:01:11Super smart guy,

00:01:13veteran automotive industry executive.

00:01:16Nearly three decades of doing this job.

00:01:18Nearly three decades, doesn't look like it.

00:01:20Super duper smart, super smooth cat

00:01:23in terms of talking about the future of the industry.

00:01:26EVs, soft refined vehicles,

00:01:29and of course what Nissan's doing.

00:01:31And he's going to break some news actually with us

00:01:34in talking about their product lineup,

00:01:37which currently is mostly internal combustion

00:01:41with a couple of EVs.

00:01:44We're going to talk about what's coming down

00:01:46in the pipeline for them on the EV front,

00:01:48but also what they're doing on the hybrid front,

00:01:51which is super interesting.

00:01:52It was news to me.

00:01:53It's very interesting.

00:01:54Very interesting.

00:01:55And a fun conversation,

00:01:56because if you've been doing this for three decades,

00:01:59you're a veteran,

00:02:00you've been through the meat grinder,

00:02:01especially with his curriculum, Vitae.

00:02:04Seen it all, done it all.

00:02:05But a real car enthusiast,

00:02:08which is always fun to talk to executives

00:02:10that love cars.

00:02:13It's a fascinating guy.

00:02:15Love cars, understand them,

00:02:16can talk about them,

00:02:17and can break down super technical topics.

00:02:19So without further ado,

00:02:22let's talk to Pons Pandekathira.

00:02:25Pons, thank you so much for taking time

00:02:27out of your busy, busy day and joining us here.

00:02:31My pleasure.

00:02:32SVP, Chief Product and Planning Officer for Nissan.

00:02:37So what do you do?

00:02:38What do you got planned?

00:02:39So it's Nissan Americas.

00:02:41Responsibility is everywhere from Canada

00:02:44down to the southern tip of Argentina,

00:02:46all in the Americas,

00:02:48defining the product portfolio,

00:02:50what cars we make,

00:02:51when do we make them,

00:02:52how do we make them,

00:02:53what do we put in them.

00:02:55And while that one end

00:02:56is the fun part of creating them,

00:02:58there's also the very rational part

00:02:59of how do you run that

00:03:00once it's in the life cycle.

00:03:02So like a low pressure job.

00:03:04Totally fun.

00:03:05I love it though.

00:03:06Very few meetings, I'm sure.

00:03:07No, no meetings at all.

00:03:08No meetings at all.

00:03:09Just wing it.

00:03:10The fun part is there's the creative element

00:03:12of building cars and developing new cars,

00:03:15which you guys are clearly car enthusiasts,

00:03:17so you get that part.

00:03:19But they also have an element

00:03:20of you have to preserve

00:03:22the life cycle profitability of those vehicles.

00:03:25So I get a business case approved

00:03:27to spend a billion dollars to do a car,

00:03:29and we say that's going to deliver

00:03:30X in value over its life cycle.

00:03:32So I'm not as concerned

00:03:34about what happens month by month.

00:03:35I have a marketing and sales colleague

00:03:37who's doing that month by month,

00:03:38quarter by quarter.

00:03:39But over its five to six year,

00:03:41whatever, life cycle,

00:03:43my team is responsible for making sure

00:03:45that we do deliver

00:03:46on that profit commitment that we made.

00:03:48In other words, if you spend a billion,

00:03:49you got to bring in more than a billion.

00:03:51And that's, yeah, small numbers.

00:03:53I'm talking real money, as they say.

00:03:54That's correct.

00:03:55Okay, so what are you focused on right now?

00:04:00So the portfolio is going through

00:04:02this fundamental earth-shattering change.

00:04:06Everybody is.

00:04:07To understand what is that rate

00:04:09at which we will electrify.

00:04:11Because it's not a question of if,

00:04:12it's a question of when.

00:04:14We've had a major adjustment in the trajectory.

00:04:16We had a very optimistic trajectory

00:04:18of how quickly we would electrify.

00:04:20And then that's kind of damped a bit.

00:04:22And the industry has seemed to have gone

00:04:24through that in the last 18 months.

00:04:26All of us.

00:04:27Like, we're here,

00:04:28and now it's like, eh, back to earth.

00:04:30Yeah, but some people just run away

00:04:31and think, oh, no, EVs are dead.

00:04:33And it's just not going to happen.

00:04:34That's just far, far from the truth.

00:04:35Yeah.

00:04:36It really is.

00:04:37So the fundamental focus right now for me

00:04:39is to identify

00:04:40what does that trajectory really look like?

00:04:42Because we've got lots of EV plans in place.

00:04:45But there is a bridge between now

00:04:47and full electrification.

00:04:48It'll involve a combination of hybrids,

00:04:51plug-in hybrids,

00:04:53much more efficient internal combustion engines.

00:04:56They're still not gone away.

00:04:57And then to see around 2030 to 2032,

00:05:01three,

00:05:02what does that solidly electrified portfolio look like?

00:05:05Okay.

00:05:06Wait, wait, wait.

00:05:07This I really want to stress

00:05:10to people who are listening and watching

00:05:13this very key thing that you're talking about,

00:05:16which is,

00:05:18where's my bell?

00:05:19It's still inevitable, right?

00:05:21EVs are still,

00:05:22can I just ask you,

00:05:24EVs that we will all at some point be driving,

00:05:28most of us will be driving battery electric vehicles.

00:05:31Is that accurate?

00:05:32Absolutely, yes.

00:05:33Okay.

00:05:34So why is it?

00:05:36Because I think a lot of people who,

00:05:38we get a lot of hate on this podcast.

00:05:42The EVs are dumb.

00:05:43It's not going to happen.

00:05:44Ice till I die.

00:05:46I think a lot of the consumers miss the reality of vehicle production

00:05:53and manufacturing,

00:05:54the advantages of EVs.

00:05:55It's not to say that you have to like it,

00:05:57but global car manufacturers,

00:06:01they are really intent on going EV because a lot of reasons,

00:06:07including the cost efficiency,

00:06:10the simplification,

00:06:11there's fewer parts.

00:06:13I would say in your expert opinion as a product planner,

00:06:16why is it inevitable?

00:06:17Simply one reason.

00:06:19It really,

00:06:20there's a bunch of things.

00:06:21We can make it a complex story,

00:06:22but ultimately an industry or something status quo technology gets disrupted

00:06:28when something comes by that's far more efficient.

00:06:31So you take the standard and total combustion engine,

00:06:33been around for a very long time.

00:06:35The really good ones,

00:06:3632,

00:06:3734% efficient.

00:06:39The rest of it is a pure loss.

00:06:41Heat and sound.

00:06:42For combustion,

00:06:43incomplete combustion.

00:06:44So the amount of energy stored in one liter of fuel,

00:06:47there's about a 70 to 80% waste.

00:06:50Yeah,

00:06:51I've heard you say 80% is noise and heat.

00:06:55It's noise,

00:06:56heat,

00:06:57inefficiencies in the driveline,

00:06:58braking,

00:06:59all kinds of things.

00:07:00So it's inefficient.

00:07:01So why EVs is at least the current state of the art EV technology.

00:07:06And I like to say we're in 1910 to 1915 of EVs of where internal combustion.

00:07:12So steam and electric are going away.

00:07:15Everyone's turning to big cars.

00:07:17They were inefficient.

00:07:18You know,

00:07:19a few of them,

00:07:20they're hugely polluting.

00:07:21Whatever you were in 1915,

00:07:22really have EVs,

00:07:23but the state of the art EV today that we have in production being available

00:07:27for sale at dealerships is significantly more efficient than an internal

00:07:31combustion engine.

00:07:32And if you add in a region breaking,

00:07:34you're talking like,

00:07:35you know,

00:07:3680 to 90% efficiency.

00:07:37Correct.

00:07:38It all depends now on the system,

00:07:39but if you just isolate it to the vehicles,

00:07:41the system,

00:07:42because we have to look into what all went into creating that vehicle.

00:07:45So that's why when people talk about CO2,

00:07:47we refer to tailpipe emissions are zero,

00:07:50but there's other emissions involved in making the vehicle.

00:07:52Sure.

00:07:53But those same emissions are involved in making an internal combustion and

00:07:56pulling oil out of the ground,

00:07:58shipping it,

00:07:59refining it,

00:08:00then reshipping it.

00:08:01So there's always,

00:08:02but it's just a more complicated equation saying,

00:08:04well,

00:08:05you already have factories that make internal combustion engines,

00:08:07but now you've got a brand new factory to make batteries,

00:08:10et cetera.

00:08:11So that's added CO2 in.

00:08:12So that's a big discussion,

00:08:13but let's just stop at the system level.

00:08:15An electric vehicle is dramatically more efficient than internal combustion

00:08:19engine.

00:08:20And that's why it's the future,

00:08:21right?

00:08:22So acceleration is far better.

00:08:24Thermal losses are far,

00:08:25far lower.

00:08:26You don't lose as much energy to noise and sound.

00:08:30So that disappoints a lot of traditional deer heads,

00:08:33but it's really the future.

00:08:35It's a quieter way of moving the vehicle.

00:08:37And then braking with regenerative braking is an incredible way to capture

00:08:41energy.

00:08:42We're just not wearing our brakes.

00:08:43You're using that to generate energy.

00:08:45It's a superb system.

00:08:46And that pulls back like 20 to 30% of the energy.

00:08:49Absolutely.

00:08:50Depending on where you drive.

00:08:51I mean,

00:08:52if you're driving up in hilly country,

00:08:53you can recover up to 20,

00:08:5430% of the battery just by coming downhill,

00:08:57you know,

00:08:58from what you,

00:08:59you're just going up,

00:09:00going uphill.

00:09:01Right.

00:09:02And so it's sort of like people saying like,

00:09:03Oh,

00:09:04I want to go back to CDs.

00:09:05Like this digital music thing.

00:09:06Like said,

00:09:07nobody ever,

00:09:08well,

00:09:09you know,

00:09:10records,

00:09:11you know,

00:09:12but,

00:09:13but,

00:09:14but again,

00:09:15there there's a,

00:09:16you know,

00:09:17if you look at record collecting or music right now,

00:09:18there's a very small percentage of people who are,

00:09:19you know,

00:09:20vinyl till I die.

00:09:21Everyone else is digital music.

00:09:22Cause that was a disruptive technology.

00:09:23Exactly.

00:09:24So,

00:09:25so then what,

00:09:26and I know,

00:09:27I think I know the answer to this,

00:09:28but I'm curious about the,

00:09:29the non-EV adopter at this point,

00:09:30because it's kind of like,

00:09:31you know,

00:09:32the early adopters were five years ago.

00:09:33We're now trying to try for the mass adoption.

00:09:34And we still have people that are kind of over here.

00:09:35They're like,

00:09:36I'm never going to do it.

00:09:37What are they,

00:09:38what are they miss in what you just said?

00:09:39Is it just that they only see what's right in front of them

00:09:40or in their neighborhood or they're in a rural part of

00:09:41America or they,

00:09:42the EVs are too expensive.

00:09:43Like what,

00:09:44what part of this can't they see?

00:09:45Cause I,

00:09:46you know,

00:09:47I,

00:09:48we drive EVs.

00:09:49We drive a lot of EVs.

00:09:50We drive a lot of cars.

00:09:51We drive a lot of cars.

00:09:52I love that they're quiet.

00:09:53I love that.

00:09:54I mean,

00:09:55they're,

00:09:56this is the thing.

00:09:57They're all super fast.

00:09:58They're quiet.

00:09:59Like I can do,

00:10:00I'm just,

00:10:01it's,

00:10:02I charge at home that they're,

00:10:03they're,

00:10:04they're more affordable.

00:10:05Like every,

00:10:06every part of this makes sense to me.

00:10:07I'm also a big,

00:10:08you know,

00:10:09I have a big enough brain.

00:10:10I can see how they don't fit for everybody else.

00:10:11But when you think about the consumer,

00:10:12the people you want to flip to buying an EV,

00:10:13you want to flip to buying an EV,

00:10:14you want to flip to buying an EV,

00:10:15you want to flip to buying an EV,

00:10:16you want to flip to buying an EV,

00:10:17you want to flip to buying an EV,

00:10:18when you think about the consumer,

00:10:19the people you want to flip to buying an EV,

00:10:20the people you want to flip to buying an EV,

00:10:21the people you want to flip to buying an EV,

00:10:22hopefully a Nissan EV.

00:10:23hopefully a Nissan EV.

00:10:24What's the barrier?

00:10:25Yeah.

00:10:26What,

00:10:27what,

00:10:28what barrier do you see?

00:10:29So think about again,

00:10:30it's 1915,

00:10:31maybe 1910,

00:10:321915.

00:10:33So,

00:10:34yeah,

00:10:35I love my horse.

00:10:36Yeah.

00:10:37There's a lot of people who just loved it.

00:10:38Yeah.

00:10:39Bigger horse,

00:10:40faster horse,

00:10:41more horses,

00:10:42carriage,

00:10:43you know,

00:10:44et cetera.

00:10:45So that mindset is still there.

00:10:46And if you think about somebody who is my age,

00:10:47cars, big horsepower cars, earlier in my career I used to love Dodge Vipers, I used to work

00:10:52for what was Chrysler.

00:10:54Still love Dodge Vipers, unabashedly.

00:10:57And a Nissan GTR today, 570 horsepower, I own two of these things, I drive them all

00:11:02the time.

00:11:03It's a masterpiece.

00:11:04Still great, yeah.

00:11:05And there's something about that visceral connection between man and machine and then

00:11:08you feel that exhaust and the exhaust note, the powertrain combustion, etc.

00:11:12You love it.

00:11:14I'm sad not to have that anymore, but it'll just change over time.

00:11:18But you've also mentioned Viper and GTR and less than 1% of the market, most people to

00:11:25put it in Nissan terms are Rogues and Muranos.

00:11:28No one's ever been like, man the exhaust note of my Rogue is so sweet, you know what I mean?

00:11:33It's kind of, yeah you can miss the Viper, but there's none of them.

00:11:39So that's a fair point.

00:11:40Let's just say, you shift away from the enthusiast end, so there's clearly enthusiasts who are

00:11:44just attached to their internal combustion engine vehicles, a lot of nostalgia with that,

00:11:48so they don't want to ever change, but eventually they'll be won over because of the quality

00:11:52of the experience that they get out of a very high power electric vehicle.

00:11:56But let's talk about your Rogue Murano customer.

00:12:01So the number one thing that keeps them wanting their ICE is there's an anxiety about am I

00:12:07going to run out of battery?

00:12:09Can I want to charge, can I charge when I want to?

00:12:12I do long road trips, this is just highly unreliable for me.

00:12:15They don't want to change the pattern of behavior that they're very comfortable with.

00:12:20Gas is very convenient, short term.

00:12:23Especially in this country where fuel is relatively cheaper, Europeans made the switch much faster

00:12:27because fuel is significantly more expensive.

00:12:30So those people will have to be convinced that that user experience is actually inherently

00:12:35superior.

00:12:37My personal belief to make that transition smooth is to offer plug-in hybrids.

00:12:42I'm a big fan of plug-in hybrids, been a big fan of plug-in hybrids since 2016 and we were

00:12:48actually working, now it's okay to share that information, 2015, 2016 we were looking at

00:12:53making a plug-in hybrid version of a Nissan Qashqai in Europe.

00:12:57And we were very close to getting that into market and then some stuff happened internally

00:13:00and we couldn't.

00:13:02But that equation to me, now it's an expensive system, right, because you have an internal

00:13:05combustion engine, you got a battery pack, electric motor, it's a costly car.

00:13:09Two drivetrains.

00:13:10Two drivetrains.

00:13:11One car, yeah.

00:13:12But there's some clever ways to do that if you use a series plug-in hybrid.

00:13:16So like the e-power technology that we have, it's an electric motor driving the vehicle,

00:13:20you have an internal combustion engine acting as a generator, but there's a very small battery,

00:13:24it's a two, two and a half kilowatt hour battery.

00:13:26What if you put a 30 kilowatt hour battery?

00:13:28So I start off with a high state of charge, I just plug it in at home, I don't need a

00:13:33high speed charge or anything like that, a level two will be fast, but I could plug

00:13:36into a 240 volt outlet and I still got my juice for probably 50 to 70 miles of all electric

00:13:43range.

00:13:44Which is more than most people need in a day.

00:13:46Exactly.

00:13:47The big advantage of that kind of a plug-in hybrid is one, you can tow, because otherwise

00:13:52normal hybrids, they don't have the best towing capacity.

00:13:55If you have a pure EV, the towing capacity diminishes the range quite a bit, extreme

00:14:01temperatures don't have as much of an impact on it, and you don't have any range anxiety

00:14:06whatsoever.

00:14:07So all you gotta do is fill the vehicle up and then you're golden.

00:14:10All your daily commute stuff is taken care of, you do a long trip, I don't change any

00:14:14of the normal pattern that you had in a car today.

00:14:17And I think that is what will move people forward and say, you know what, this EV thing

00:14:21really works.

00:14:22So, it's a transition.

00:14:24But Nissan doesn't have hybrids, these kinds of hybrids, plug-in hybrids, any hybrids in

00:14:30the Americas.

00:14:31Yet.

00:14:32Okay.

00:14:33So you're signaling something here, maybe, perhaps.

00:14:36We have to look at these things.

00:14:37So there's a whole portfolio.

00:14:38Now, if you look at the company globally, so we've already got series hybrids in Europe,

00:14:42so the Nissan Qashqai, what we call the X-Trail, there was a Rogue here in this market, they

00:14:47already have these series hybrids.

00:14:48Now, they're not plug-ins yet, but the technology is there.

00:14:52So we have an electric drivetrain driving the vehicle, so then you master the ability

00:14:56of how does a regen braking work, how do you package the motors, you already package

00:15:01a battery in there, you know what the cycles look like.

00:15:04Now, you just have to make a package that's big enough to accommodate now a 30 plus kilowatt

00:15:10hour battery instead of the two and a half kilowatt hour battery that you have.

00:15:13So these are E-Revs.

00:15:14E-Revs.

00:15:15Yes.

00:15:16Exactly.

00:15:17Here in the US, we call them E-Revs.

00:15:18E-Revs, yeah.

00:15:19Right.

00:15:20Okay.

00:15:21And so how many years away are we from seeing a Nissan plug-in hybrid in the Americas?

00:15:26Very soon.

00:15:27Very soon.

00:15:28Okay.

00:15:29Yeah.

00:15:30I mean, again, can't give you some exact dates.

00:15:31Now, a lot of it is also about us forecasting how these segments will evolve.

00:15:36Sure.

00:15:37So we all thought, for example, the C-segment, the Rogue segment, D-segment, which is the

00:15:40Pathfinder segment, that would have a much higher rate of electrification, and the trajectory

00:15:46is lower than expected.

00:15:47So now, you know, you pivot, you go, okay, we have this other tech that's available.

00:15:52And by the way, the plug-in hybrid technology, you know, we have this alliance partnership

00:15:56with Mitsubishi, and Mitsubishi's got a plug-in hybrid and has had a plug-in hybrid for a

00:16:00very long time, since 2016 or so.

00:16:03So we can leverage off of that technology.

00:16:04They've got lots of expertise on how that packages, how it uses, et cetera.

00:16:09And why that hasn't taken off so far is really because of the usable range in all-electric

00:16:14form is still quite low.

00:16:16Right.

00:16:17So when that gets to 70 miles, that's a game changer.

00:16:20So the normal use in the US is about 50 miles.

00:16:23So once you give people 50 miles of all-electric, daily commutes are taken care of, 70 miles

00:16:27gets some buffer, and then if you're familiar with the new emissions regulations in the

00:16:31ZEV states, the zero-emissions states, if you have a 70-mile AER, that will qualify,

00:16:37you can sell up to 20% of your EV allocation in those markets using a vehicle like this.

00:16:42Right.

00:16:43Okay.

00:16:44So you'll see a proliferation, actually, of those vehicles.

00:16:45Yeah, because, I mean, you know, we've seen, you know, the Jeep Wrangler, which is like,

00:16:49you know, effectively, I don't know, 17, 18-mile EV or something like that, and people

00:16:54don't plug them in.

00:16:55So then you just have a very inefficient gas vehicle, really.

00:16:57Absolutely, right.

00:16:58Yeah.

00:16:59So 70 is, that's, and that's, again, being legislated to get the ZEV.

00:17:04I beg your pardon.

00:17:06We have a, we bought a Cayenne E-Hybrid, and it gets about 14 miles of pure EV range, but

00:17:14my wife, she plugs it in, like, after every trip.

00:17:17We've managed to squeeze, like, 1,000 miles out of a tank.

00:17:20We're very proud of ourselves.

00:17:21That's impressive.

00:17:22We track it, yeah.

00:17:23But it's, I mean, it's kind of silly.

00:17:24No, look, my neighbor.

00:17:25It's always on the charger.

00:17:26Yeah, no, my neighbor has a, I don't know what it is, some Kia plug-in hybrid, and he's

00:17:32got to, like, six months, because he is, like, you know, he had, like, a three-mile commute,

00:17:35and he's like, should I worry?

00:17:36Like, I haven't put gas in it.

00:17:38I'm like, it's probably burning itself, but yeah, start to worry, I would.

00:17:42So this is actually, that is a very cool insight.

00:17:45So the way Americans actually measure their economy, the fuel economy, we think, you know,

00:17:50people, like, in this line of business, you're sitting there calculating miles per gallon.

00:17:53You've probably got an Excel spreadsheet going, and you're super nerdy about it, right?

00:17:56But the average customer is measuring how often they go to the fuel station.

00:18:00You give them a plug-in hybrid, they're like, I used to go every week, maybe every two weeks.

00:18:04I haven't been there in six weeks.

00:18:06I got a super-efficient car.

00:18:08Then the mind shift, really, the whole shift shows up.

00:18:11And by the way, when you're plugging in a plug-in hybrid in your house, you're not going

00:18:14to notice that electric bill going up.

00:18:16It's marginal, the cost.

00:18:18You literally don't notice it.

00:18:19You're just noticing that I don't go spend 80 to 100 bucks on the pump every two weeks.

00:18:24I'm doing it once every six.

00:18:25I mean, I saw, speaking of wives, like, you know, we own an EV, and I remember my wife's

00:18:31comment after about a month or six weeks of ownership, she just looked at me, she's like,

00:18:35I haven't been to a gas station in a month.

00:18:38And I go, and?

00:18:39She goes, I love it.

00:18:40I hate gas stations, you know?

00:18:42So it's funny to watch that shift, you know?

00:18:45So you're not the first senior executive from a car company to tell us that E-Revs are the

00:18:51future.

00:18:52We've also heard that E-Revs are the future in China.

00:18:57For the audience, though, is you have a problem distinguishing, telling them it's a hybrid,

00:19:03it's a plug-in hybrid, or you have to tell them this is new technology that's fundamentally

00:19:07different?

00:19:08Does that influence the way you sell them, you attempt to sell them, or get consumers

00:19:12to buy into it?

00:19:13Absolutely.

00:19:14So in China, they are there today, and they're doing extremely well, and what really worked

00:19:17there is they get a certain license plate that you can use them in the city, you don't

00:19:20have the emissions penalty.

00:19:21Right, right.

00:19:22The green license plate.

00:19:23Exactly.

00:19:24The green license plate.

00:19:25So the Chinese customers, like, give you more of this stuff, and they've got, actually,

00:19:29in kilometers, it's 120, 150 kilometer range, it's all the range now, and they're selling

00:19:35a ton of them in the market.

00:19:36So how do we educate the American customer?

00:19:38They know hybrid, primarily because one of our competitors has been doing it for a very

00:19:42long time, and they've been very well established, and they've got loyalty from customers.

00:19:47So if you come in and say, well, this is kind of a hybrid, and we used ePower, ePower is

00:19:50our name for our series hybrid powertrain, there's a certain education, like, so it's

00:19:55a hybrid, you know, and nobody really wants to know more detail, but when they drive it,

00:19:59they notice, first of all, it doesn't have that rubber band feel of a CVT, because most

00:20:03of the hybrids have a CVT, and then you go lay in on the throttle, and then there's all

00:20:07this rev up, and there's a lot of unpleasant feedback from the internal combustion engine,

00:20:12and then the car goes.

00:20:13But you drive one of our ePower vehicles, and it's an electric feeling, you get that

00:20:18same immediate, very linear torque response curve, and then, of course, the internal combustion

00:20:23engine comes on, because it has to charge, and it's a little non-intuitive when that

00:20:26comes in, because that's not driven by vehicle load so much as the algorithm and the state

00:20:31of charge in the battery, and that takes a little bit of getting used to, so we've

00:20:35invested a lot of money in the NBH isolation of that internal combustion engine, so it

00:20:40doesn't interrupt the driver.

00:20:42And it's running, basically, as a generator, so, you know, I'm making this up, so just

00:20:46steady state, 4000 RPM, or whatever is the best.

00:20:50Not always only a steady state, but there's cool things that you could, if an internal

00:20:54combustion engine is not connected to the drivetrain, it's now independent of the road

00:20:59loads changing all the time, so you can operate an internal combustion engine in its zone

00:21:03of efficiency far better than if it's connected to a transmission and then facing road loads.

00:21:09So that's what makes the internal combustion more efficient, but it's purely a generator,

00:21:13it's just an electron producer that's sitting on the car.

00:21:15And you've stripped off all the other accessories, right?

00:21:17No transmission.

00:21:18No transmission, and you're not running, like, the heat pump, so you're not running the HVAC

00:21:24necessarily, or are you?

00:21:25So it's providing energy through there, but what you don't have is, so certainly you don't

00:21:30have any transmission, but you still do need a radiator, you've got to keep the internal

00:21:35combustion engine cool, and it's still producing energy that's going to power other accessories

00:21:40in the car, so that's why it's not super efficient.

00:21:43It is efficient.

00:21:44The question then is, why are you picking this as a generator?

00:21:46You could actually get a small turbine that would be super efficient producing electrons.

00:21:51But who builds turbines?

00:21:52Small nuclear power plants.

00:21:53Exactly.

00:21:54But who builds turbines?

00:21:55That's the point.

00:21:56You have expertise.

00:21:57We already got a factory, we know how to do it, so use what you have and try and make

00:22:04it more efficient.

00:22:05But all this is bridge tech anyway, right?

00:22:06Right.

00:22:07So I was going to say, I was literally about to say, so put on your forecaster's goggles

00:22:12or whatever.

00:22:13Like, when do you see PHEVs kind of, when does that bridge go away?

00:22:20So I think you'll see, over the next two years, you'll see quite the proliferation

00:22:25of PHEVs in the market, from us, from the competition, 26 to 28.

00:22:31Now, right around 32, a lot of this now depends on the legislation.

00:22:34So we know that legislation accelerates or decelerates the whole rate, so that depends

00:22:39on which administration's in power and what their agenda is, et cetera.

00:22:42But if things stay the way they are on today's trajectory, I think around 2032 or so is a

00:22:48major tipping point, where it'll be much more favorable towards just full battery EVs,

00:22:53and for a couple reasons.

00:22:55So one, battery tech's making a lot of progress right now.

00:22:58The costs, which really should have been lower right now, but then EVs didn't take off, so

00:23:04there's a lot of companies writing off battery investments, et cetera, so you pay a penalty

00:23:07for that.

00:23:08So maybe it's a little bit further in time.

00:23:11But if battery costs get down to $75 per kilowatt hour, I think that's going to be a key tipping

00:23:16point.

00:23:18The number we heard up until now was 100, but it's 75, but at the same time, the energy

00:23:23density in batteries is actually getting better and better over time.

00:23:26Yeah, the tech's just going crazy.

00:23:27It's just going crazy, right?

00:23:28Yeah.

00:23:29So, in fact, by 2026, our next generation of electric batteries will already be 25%

00:23:34more efficient, energy density-wise, even weight and cost-wise.

00:23:38Which is huge.

00:23:39Huge.

00:23:40Yeah, yeah.

00:23:41It's huge.

00:23:42So that's what we're counting on to carry this in.

00:23:43So come back to your original question.

00:23:44Yeah.

00:23:45By 2026 or so, we're going to see a pretty big transition where a much larger percentage

00:23:49of the vehicles, new vehicles being built, will be full battery electric.

00:23:53Now, there are a few exceptions, and I think there's still a very good market for a plug-in

00:23:58hybrid on big vehicles, like, say, the Nissan Armada QX80, for example.

00:24:04So vehicles in that segment, big size.

00:24:06Yeah, driving across the country.

00:24:07Exactly.

00:24:08Yeah.

00:24:09So it's long range.

00:24:10They don't want to be changing their driving patterns, et cetera.

00:24:13They want to tow big tows, so big boats, et cetera.

00:24:16They don't want to be concerned by, it's too cold, it's too hot, my battery range is not

00:24:20ideal.

00:24:21So think solid-state batteries, at that standpoint.

00:24:25So even if you put maybe a 60 kilowatt-hour solid-state battery in those vehicles, and

00:24:29it's a plug-in hybrid, the user experience will be vastly better than what it is today,

00:24:33because it'll have incredible torque, quietness.

00:24:35Yeah.

00:24:36Towing without gears is awesome.

00:24:37It's awesome.

00:24:38Yeah, it's great.

00:24:39It's electric powertrain, that linear acceleration curve.

00:24:42All that stuff would be great, but they won't have the downsides, potentially, of a full

00:24:45battery electric vehicle.

00:24:47So I still see life, post-32, for very efficient plug-in hybrids that spend most of their time

00:24:53in EV mode.

00:24:54Because every time you're in a neighborhood like this, suburban Nashville, and you see

00:24:57all these big SUVs, one person in them, and it's like the size of an Armada QX80, they're

00:25:02just running errands.

00:25:03Yeah.

00:25:04Yeah.

00:25:05Getting electric.

00:25:06Getting 12 miles a gallon.

00:25:07But in a 60 kilowatt-hour battery, it would give you 150 miles of range, or something.

00:25:12Right now, it's multiplied by two, typically, so 60 kilowatt-hours should give you 120 miles.

00:25:18It all depends on the rate at which that makes.

00:25:20So solid-state batteries are supposed to give us a much better multiplier.

00:25:22Sure.

00:25:23I was going to say, by 2032, battery tech will be a lot better than it is now.

00:25:28Correct.

00:25:29So that'll be...

00:25:30Let's say it's lighter.

00:25:31Yeah.

00:25:32Let's use a round number.

00:25:3350 kilowatt-hour solid-state battery in there.

00:25:35Let's say it's able to give you 120 to 150 miles.

00:25:38That's a superbly functional car.

00:25:40The difference I always have to make in my role and with my team, the stuff they want

00:25:46to do to be on the leading edge of technology.

00:25:48But don't forget about that end customer.

00:25:50There's a customer who has needs, they have a usage pattern, and they have a certain willingness

00:25:54to pay.

00:25:55They didn't get endlessly wealthier, and that's actually the fundamental problem that we have

00:25:59now with EVs.

00:26:00People are looking for a $35,000 vehicle, but it's 55 grand to get the EV.

00:26:04The price is really good.

00:26:05But cars have gone up.

00:26:06They have in general.

00:26:07They have in general.

00:26:08Yeah.

00:26:09Yeah.

00:26:10I mean, through COVID, there was a lot of...

00:26:11There was a huge supply shortage, so prices went up, and it's just a macroeconomic thing.

00:26:16Yeah.

00:26:17But in general, people didn't get that much richer.

00:26:18Right.

00:26:19Right?

00:26:20Right.

00:26:21So now people are still saying, you know what?

00:26:22I want my car at $25,000 and $35,000, and I want it to be an EV, and then I'll look

00:26:24at it.

00:26:25But the average car that they're looking for is actually 50 grand, 55 grand.

00:26:29Yeah.

00:26:30Yeah.

00:26:31No, it's shocking.

00:26:32Which IRA, it comes down by $7,500, but it's still an expensive car.

00:26:34Right.

00:26:35So I want to go back to something you said, because you mentioned solid-state a couple

00:26:38of times.

00:26:39Yeah.

00:26:40Solid State Corporation is working on its own solid-state batteries.

00:26:43You guys call it ASSB, all solid-state batteries.

00:26:48So I think you dropped some pearls in there, but can you give us an overview?

00:26:54Where are you with solid-state?

00:26:56So it's making a lot of progress.

00:26:57We've got an advanced R&D team that fully believes in the future of solid-state, and

00:27:03we believe that we need to have the intellectual property there, the advantage of actually

00:27:08designing it and owning that technology and making it more efficient.

00:27:12And the rate at which that is making progress has slowed down just because of the rate at

00:27:16which EV adoption has slowed down.

00:27:18Oh, okay.

00:27:19Interesting.

00:27:20Really, they move in lockstep.

00:27:22So just think about big company, you're allocating billions of dollars in R&D every year.

00:27:26What do you invest in?

00:27:27What you don't invest in?

00:27:28And then you have to decide where you're going to take the pedal off and where you're going

00:27:30to accelerate.

00:27:31So right now, we're more in acceleration mode on plug-in hybrids and a little bit of pedal

00:27:35off on the solid-state battery stuff.

00:27:38But for what I just said, think 2032 timeframe, we will need really good solid-state battery

00:27:44tech.

00:27:45So around 2028, between 2028 and 2032, you'll see a lot of breakthrough stuff happening.

00:27:51That's about as specific as I can get.

00:27:53I was going to...

00:27:54Because I was trying to discern whether the breakthrough move for Nissan would be E-Rev,

00:28:01but the battery is solid-state.

00:28:02It could work.

00:28:04If you came out with that, you'd be golden.

00:28:08You'd have a smaller, lighter, more power-dense battery with the advantage of the motor generator.

00:28:17So the packaging would be...

00:28:18Or I guess...

00:28:19But going back to what you were saying about...

00:28:21Because you kept referencing a QX80 or an Armada-sized vehicle.

00:28:25The advantages of a solid-state battery in a vehicle that size probably are not as great.

00:28:31Because you could...

00:28:32It's such a big vehicle.

00:28:34No, it matters.

00:28:35Absolutely, yes.

00:28:36Batteries are heavy and they need space.

00:28:38So the one thing of having a big vehicle, you still have to package people.

00:28:42They buy a big car because they want the space.

00:28:46So you can't compromise third-row seating comfort, for example.

00:28:49So if you've been in the new QX80, I mean, that third-row seat is absolutely amazing.

00:28:53You guys would fit in there, no problem.

00:28:55I've been in it.

00:28:56Yeah, yeah.

00:28:57Massive.

00:28:58So that's a packaging thing.

00:28:59But typically, where do you think the batteries go?

00:29:00They're going to go under that seat below.

00:29:02So now that floor gets raised, your leg comfort's not as good, you're compromising a lot of

00:29:06things in how that car should function.

00:29:09So regardless of the size, you can't just put heavy batteries in there.

00:29:13There's a couple examples of big vehicles in that segment right now that have 160, 200

00:29:17kilowatt-hour batteries in there.

00:29:19It's giant.

00:29:20They're huge, yeah.

00:29:21The mass on that thing is just incredible.

00:29:23That's a lot of energy that it uses, and it's going to have some penalties when it's super

00:29:27hot and super cold outside.

00:29:29So this is great.

00:29:30We started by asking you what you do, and we ended up all the way here.

00:29:35But I do want to circle back, because part of your job in all the product planning, all

00:29:41the sexy part of all the new vehicle stuff, which we love, but you're also concerned with

00:29:46making the vehicles and where they're produced.

00:29:51Will these vehicles, especially the EVs, huge advantage if they were built in the US,

00:30:01and financial advantage for the consumer, but also obviously for Nissan.

00:30:07You guys had some announcements on the Canton plant a couple years ago, but there's been

00:30:12some news recently that you're rolling back on, I think, one of the EV sedans.

00:30:19Can you tell us anything about where some of these technologies might show up and where

00:30:23they might be built?

00:30:24So all those changes in the plans, just linked to that trajectory discussion.

00:30:29That's it.

00:30:30So it's not like we've fundamentally changed the strategy.

00:30:32It's just adjusting the trajectory to where the demand is.

00:30:35Now that particular platform that we have in mind, it can deliver a C-segment SUV and

00:30:41can be scaled up to do a D-segment sedan right off the same platform.

00:30:46So same architecture, same battery sourcing, same general overall build.

00:30:50Just to put it in terms, so a C-segment would be like a Rogue and a D-segment sedan would

00:30:54be like a Maxima size?

00:30:55Maxima size.

00:30:56Yeah.

00:30:57Exactly.

00:30:58That's just for people listening.

00:30:59So again, we need to understand where's that customer going and we should maintain that

00:31:02flexibility.

00:31:04So if everything was going for the original forecast that everybody had, those cars would

00:31:08have been right on time and exactly those facilities that we'd announced in the past.

00:31:13So now we're just rethinking about the timing.

00:31:15Everything that we see says the SUV segment, crossover segment is really what's growing

00:31:20much more, a little less on sedans, but there's people not disinterested in sedans.

00:31:25There's actually a lot of, Sentra is doing extremely well right now, by the way, internal

00:31:28combustion engine, but it's a solid value proposition.

00:31:32It's a very well executed car for that segment.

00:31:35It feels more premium than the price point.

00:31:38So we're not going to walk away from the sedan market.

00:31:42With Sentra, with Ultima, with Maxima, we've got lots of heritage, a large car park of

00:31:46people who bought sedans from us.

00:31:48And so we will stay in the sedan space.

00:31:50Now you asked the other question is about building in the U.S. versus elsewhere.

00:31:55So in the current legislative environment, there's lots of benefits for building vehicles

00:32:01here at EV tech here in the U.S.

00:32:04We're certainly doing that.

00:32:05We're investing in plants here to build EVs in the U.S.

00:32:08The other thing we have to keep in mind, our big learning over COVID, is if the supply

00:32:12chain is not local and you have a big disruption like this, you pay a huge price.

00:32:17So in general, Nissan follows this.

00:32:19I mean, we've got a very good global footprint.

00:32:21It's not the type of company that's all building in one area and trying to ship stuff all over

00:32:25the world.

00:32:26We've got a European manufacturing footprint.

00:32:27We've got a very strong North American one.

00:32:29We've got a great set of facilities in Mexico, built in South America, Argentina and Brazil,

00:32:36and of course Japan, the parent market.

00:32:38I even have production facilities in India for the Indian market.

00:32:43So in general, the overall production planning is build where you sell, with some notable

00:32:49exceptions where you have expertise in a certain area.

00:32:53So even though the biggest market for the Armada, it's called the petrol in the Middle

00:32:59East and the QX80, is here in the Middle East, the production facility is in Japan.

00:33:03Now they've historically always built that vehicle.

00:33:05They're really an excellent, very efficient production plant.

00:33:09There are some benefits, you know, with foreign exchange currently.

00:33:12So that's the plant that will build it.

00:33:13So there'll be some exceptions, but in general, we'd like to build where we sell the vehicle.

00:33:18That makes most economical sense for us.

00:33:21Well it's going to make, you're going to need to do that increasingly, right?

00:33:25If, and I don't know, I want to jump into this, we'll just dive right in.

00:33:33At the top of this, we talked about EVs and how this is this huge transitional moment

00:33:39for every car company, but is it correct to say that the even bigger one that's happening

00:33:45is in software-defined vehicles, that the digitization of the car, the fact that like

00:33:52software screens, chips, processors are invading every vehicle.

00:33:57And is that part of your, is that part of your remit too?

00:34:01Absolutely yes.

00:34:02So that's a, that's an architectural discussion, right?

00:34:05So the traditional cars, the way they're made is a series of components and subsystems,

00:34:10right?

00:34:11And this is how they've been done.

00:34:12That's how they've been developed.

00:34:13That's how the supply chain has been developed.

00:34:14It evolved that way.

00:34:15It's evolved that way.

00:34:16Yeah.

00:34:17But these things, gadgets, phones, laptops, et cetera, they're a very different architecture,

00:34:22right?

00:34:23An operating system controls the entire, the running of that device.

00:34:27Chipsets are actually multipurpose.

00:34:28So it's a chipset that does task A, task B, and task C, can be summoned to do different

00:34:33tasks at different times, can actually serve to be redundant.

00:34:36If one fails and the other steps in, which is actually superb for cars.

00:34:41We're just not set up to do that.

00:34:43So future architecture of vehicles, and we've made a few public announcements there, some

00:34:47discussions even with Honda right now about a future software-defined vehicle.

00:34:51And that's a big part of the focus.

00:34:54So what are the advantages?

00:34:55Again, I try not to get carried away with tech for the sake of technology.

00:34:59What are the real advantages?

00:35:00So one is definitely cost.

00:35:02Because once you fundamentally change the architecture of a vehicle, you can manage

00:35:06cost a lot better.

00:35:08Quality should get significantly better.

00:35:10Because now with redundancies built in, and you don't have to do dedicated bespoke systems

00:35:15that are potentially going to fail, get backups built into it, a huge benefit for the customer.

00:35:20And it's a living, breathing organism at that point.

00:35:25And that's hard to explain to people.

00:35:27I've struggled with this, even internally at Motor Trend, to explain this.

00:35:30But the window control chip, that's all it can ever do on a traditional, that's it.

00:35:39That's all it does.

00:35:40It does one thing forever.

00:35:41Whereas, if you have a chip that can do a lot of different things, well hey, new functionality

00:35:46that's as good as the software that's being written, that chip can then control that.

00:35:51And you can just add all kinds of new functionality forever.

00:35:55You know, an example you have to go back to, and this enthusiast cry about this, but like,

00:35:59your iPhone, well, you know, Apple put an accelerometer in it, and somebody figured

00:36:04out a speedometer app.

00:36:06Apple didn't.

00:36:07It just had the good hardware.

00:36:09So you know, you want to have a really good set of hardware, and then software can keep

00:36:13improving forever.

00:36:14I think that's what you meant by a living, breathing organism.

00:36:17The basic premise behind that is, you buy a car today, peak value of the car is the

00:36:21day you drove it off the showroom floor.

00:36:23Yes.

00:36:24And it's just a depreciating asset from that point on.

00:36:26We've got to change that equation.

00:36:28And we're getting very close to that, where year three of that car, it's actually a cooler

00:36:32and more desirable product than when you first bought it.

00:36:35Yeah.

00:36:36I mean, I own a Rivian, and yes, it gets better.

00:36:39Sorry.

00:36:40Oh, no, no.

00:36:41I like it.

00:36:42But it gets better constantly.

00:36:44And the example, I give a lot, but it had 270 miles range when I bought it.

00:36:49Now it has 285.

00:36:50Excellent.

00:36:51You know, software update.

00:36:52Through, yeah, over-the-air updates.

00:36:53Yeah.

00:36:54But what I was getting at is, this sea change, it's not just EVs, it's software-defined vehicles.

00:37:01There are now all these moves afoot in the two major markets, in China and in the US,

00:37:07where the software, the US just came out with this, the government said, hey, no Chinese

00:37:14software, no Russian or Chinese software in American vehicles, vehicles that will be manufactured

00:37:20or sold in the US.

00:37:21And then later on, no hardware either.

00:37:26China has done the same thing.

00:37:27They're moving away from US chips, US software.

00:37:31I think the example is, in all the offices in China, they're trying to get rid of Microsoft

00:37:35office.

00:37:36They have to go to some local productivity suite.

00:37:40How do you manage this?

00:37:43How does Nissan manage this globally, and you specifically for the Americas?

00:37:47Well, I mean, fortunately, out of Japan, we don't have those challenges.

00:37:51So software can still be developed there, and it's a very cohesive kind of trade agreement

00:37:57environment with the US, so we have less of those challenges.

00:38:00But ultimately, software development will happen in more than one place.

00:38:05And that's the whole benefit of it.

00:38:06So if you can get great software development engineers in Rio de Janeiro in Brazil, and

00:38:12they can be working on the product.

00:38:14So you really want your product architecture to be independent of a specific R&D center.

00:38:20So you follow general guidelines of how the software is developed.

00:38:23So you make sure that it's fully transparent and subject to all the regulations.

00:38:28So there's a thing called FEOC, Foreign Entity of Concern, in battery tech, for example,

00:38:32and that's likely to be in other parts of the vehicles.

00:38:35You got to make sure that you're fully compliant there, and there's no risk.

00:38:40So I don't really see that as a big problem going forward.

00:38:43So there won't come a time where Nissan, or is it, it's just an established fact, Nissan

00:38:49vehicles sold in America are fundamentally going to have this software stack, these chip

00:38:56sets, and then the ones sold in China are going to have Chinese software and Chinese

00:39:00software.

00:39:01I see what you're saying.

00:39:02So it's a China-specific business.

00:39:04The vast majority of the R&D that's going to be done, including the supply sourcing,

00:39:08will be in China.

00:39:09It'll be built and developed in China for China.

00:39:12That's the strategy.

00:39:13And quite frankly, the speed at which they've made progress in China is just amazing.

00:39:20It's something to really be impressed by.

00:39:23So we're actually leveraging our partnerships with Dongfeng in China and the R&D centers

00:39:29that are in Guangzhou in China to do a lot of work for the China portfolio.

00:39:34And then depending on the innovations that come out of there, as long as they're fully

00:39:37compatible with trade guidelines and the current rules and stuff like that, we could potentially

00:39:42export that, learn from that technology.

00:39:44Isn't that massively inefficient, though, for a manufacturer to have to develop, because

00:39:48it's fundamentally two systems, right?

00:39:50Or no?

00:39:51Yeah, but I mean, there's a geopolitical element to it right now where you have to, but you

00:39:55can still, there's huge learnings, right?

00:39:56I mean, Tesla's got a huge operation, for example, in China.

00:40:01I'm sure there's a lot that they're learning there that does translate to vehicles that

00:40:05they build and develop for other parts of the world.

00:40:08Could you comment, because I know you've been in the car game for a long time.

00:40:1328 years.

00:40:14Let's say more than, almost three decades.

00:40:15We want to talk about some of that.

00:40:16Yeah.

00:40:17But yeah.

00:40:18We do.

00:40:19But have you ever seen anything like what China's done with EVs in the last five, I

00:40:23mean, it's unprecedented.

00:40:24Unprecedented.

00:40:26What keeps you up at night?

00:40:28When you internally talk to people about China, what is that conversation like?

00:40:33So with my SVP colleagues, the head of manufacturing, the head of finance, head of R&D, myself,

00:40:39four of us, we went to China as soon as we really could, because it's post-COVID, it's

00:40:44easy to travel and stuff.

00:40:45Didn't want to get stuck in a hotel for 70 days, yeah.

00:40:48It was last fall, about roughly a year ago.

00:40:51And so we spent a full week in there.

00:40:53We had an immersion in Shanghai.

00:40:55We've got an advanced R&D center there with the Renault-Nissan alliance, and then we have

00:41:00a huge, beautiful design center, and they showed us design themes, et cetera.

00:41:04And then we went and visited all these different car dealerships.

00:41:07We had a test drive at a test rack in Guangzhou, testing the competition.

00:41:12And honestly, we were just blown away.

00:41:15Wow.

00:41:16Absolutely blown away.

00:41:17Yeah.

00:41:18And I didn't think that, I've been in the industry for so long, it's, you know, you

00:41:20become a bit cynical about, yeah, this is great, but, you know, you look for flaws.

00:41:24The rate of progress in between three and five, actually, I'd say three years, because

00:41:28you really didn't have much exposure to China, you know, starting in 2020 to about 2023,

00:41:34you were literally out of that market.

00:41:35We weren't even attending motor shows.

00:41:37It was just amazing.

00:41:39The speed of development.

00:41:41So it wasn't like, oh yeah, this is like that car.

00:41:43This technology is like this technology, but it's slightly different.

00:41:46They've gone past the stage of reverse engineering to pure innovation on the technology side

00:41:53and in design.

00:41:54Right.

00:41:55So I'm blown away by the designs that I saw there.

00:41:56So my personal favorite, and, you know, I'm mad enough to admit when a competitor does

00:42:02something that's very cool.

00:42:04It's the Avatar, A-V-A-T-R.

00:42:05I drove it.

00:42:06Oh my God.

00:42:07Yeah.

00:42:08That thing's beautiful.

00:42:09I love the way it looks, the tech.

00:42:10Which one is this?

00:42:11Avatar.

00:42:12Avatar 11.

00:42:13They had an Avatar 10, Avatar 11.

00:42:14I think there's a 12 as well.

00:42:15Oh, you got to look at this.

00:42:16Yeah.

00:42:17Gorgeous.

00:42:18Okay.

00:42:19It's made by, the parent company is Chang'an, right?

00:42:20Chang'an Motors.

00:42:21Yeah.

00:42:22Because the stat that like blew my mind the other day was I read or heard or something,

00:42:27but anyways, a billion, no, I'm sorry, a million EVs are being sold a month in China, a million

00:42:32a month.

00:42:33Oh, that thing.

00:42:34Yeah.

00:42:35And the, you know, the market there is like 17 million vehicles a year.

00:42:4023.

00:42:41Is it that high?

00:42:42Okay.

00:42:43Yeah.

00:42:44So a million a month is, you know, half.

00:42:45Staggering.

00:42:46Right?

00:42:47Well, the legislation has a lot to do with that.

00:42:49Oh, I understand.

00:42:50So like US market, you know, we're going to, we're going to cross a million EVs this year.

00:42:54No, no, we cross it.

00:42:55We, we.

00:42:56No, no, no.

00:42:57Yeah.

00:42:58We crossed it last year.

00:42:59We're going to do it again this year.

00:43:00Yeah.

00:43:01But like that's, they're, they're 12 times.

00:43:02We should be around 1.5 by the end of this year.

00:43:03Well, but they also have EVs that are, I think the least expensive one in, at current exchange

00:43:08rates.

00:43:09It's like 15, $18,000 EVs.

00:43:10Oh, 11,000.

00:43:11BYDC goal.

00:43:12Yeah.

00:43:1311,000.

00:43:1411 to $13,000.

00:43:15At the spot rate.

00:43:16Right.

00:43:17Let me just blow your mind.

00:43:18I was just like, what is happening?

00:43:19Let me just blow your mind a little bit because, so I, we just went, I took a small crew, three

00:43:25editors and myself, we went to, to, we went to Wuhan actually, and we drove at a brand

00:43:31new test track.

00:43:32We drove 19, all different Chinese EVs in the course of two and a half days.

00:43:37I had been to go, I've been going to China since 2008 or 2009, but the three guys I took

00:43:43never been to China before.

00:43:45The youngest, the oldest guy is about 10 years younger than I am.

00:43:47He's still been in the game.

00:43:49He's our testing director, Eric Tingle.

00:43:50Yeah.

00:43:51He's been in 15 years.

00:43:52He's been 15 years in the industry.

00:43:53And these guys follow it and they've heard all this stuff and they're like, oh man.

00:43:56So they're excited to go.

00:43:57The list is super hot.

00:43:58We went in July and they're like, they tested all the vehicles, drove them all, we're exhausted.

00:44:04We come back, we talk about it.

00:44:06I'm like, what'd you guys think?

00:44:07And not totally, but they were basically like, eh, what?

00:44:12They had heard so much.

00:44:14And yeah, they were impressed.

00:44:15They said, yeah, fit and finish, build quality, it's all good.

00:44:21Some dynamic here and there, some of the styling's a little funky.

00:44:25But the thing that was missing for them is that they had not seen the tremendous step

00:44:30change because it hadn't been going.

00:44:32That's why.

00:44:33So they weren't there.

00:44:34Because I was at the Beijing show in 2012, where the cars were pretty good, but the presentations

00:44:39were terrible.

00:44:40They had the booth models up there, you're like, nobody in the US is doing this anymore.

00:44:45Or you go behind the stage and there's exposed wiring.

00:44:48All that has changed.

00:44:50And now all the press kits, every part of the presentation is perfect.

00:44:54And the product, insane.

00:44:57And then everything on the screens.

00:44:58But because they don't have that context, they're like, oh yeah.

00:45:02And then I think that another huge gap that we all felt is we don't have an appreciation

00:45:08for how much the digital part of the experience in the car is a part of the Chinese consumer's

00:45:14life.

00:45:15Exactly.

00:45:16Because we don't have that here.

00:45:17Exactly.

00:45:18We don't have the super apps.

00:45:19And we're very quick to dismiss if it takes one second to figure something out in a car,

00:45:23I won't touch it again for seven years until I sell the vehicle.

00:45:28You're laughing because you know I'm right.

00:45:29I'm usually the one digging to figure it out, I've got to figure it out.

00:45:33I remember we had some car and I asked my wife, I said, did you ever knock the transmission

00:45:39into manual mode?

00:45:40No.

00:45:41Did you ever hit the sport button?

00:45:44So this thing, you made some awesome points there.

00:45:47So number one, the rate.

00:45:49So 2019, before COVID, the motor shows were 80% of the audience is that all of these joint

00:45:56venture, the foreign partners and the local domestics didn't have a whole lot of attention.

00:46:02And 2023, when we went back over there, it was totally flipped.

00:46:07Everybody is looking at a local Chinese OEM with some funky name, like Oracat, and that's

00:46:12like a big thing.

00:46:13And they're all over it.

00:46:14And people are just not interested in Volkswagen, Mercedes-Benz, BMW, Nissan, Honda.

00:46:19And that's what's so crazy is that, why would it mean anything to them?

00:46:23It showed up new and now it's gone.

00:46:27And if you're the patriotic Chinese citizen, you're like, our tech is better, our styling

00:46:33is better.

00:46:34Because a lot of these Chinese car companies have gone and hired all the foreign design

00:46:38talent and they're producing really good-looking cars.

00:46:42And they own the battery, the chip, the supply chain for all of that.

00:46:46And it's cheaper.

00:46:48And now they have Huawei and all the mobile phone guys are getting into it.

00:46:54Xiaomi.

00:46:55Xiaomi.

00:46:56We drove the Xiaomi Su7 and that thing looks like a McLaren, bred with a Panamera.

00:47:02Like the thing's incredible.

00:47:05We've got this at the Chinese park in Dongfeng and they have a brand called Voyage, V-O-Y-A-G.

00:47:10And they're relatively small in China.

00:47:12So they picked me up in this car and then we have a designated driver the whole time

00:47:16because, of course, they don't let us drive in China by ourselves.

00:47:18So the driver's driving around.

00:47:19I've driven in China.

00:47:20Not the worst decision.

00:47:21No, it's not bad, actually.

00:47:22I think their traffic, I mean, if you compare it to a country like India, China's traffic

00:47:27is dramatically better.

00:47:28Yes.

00:47:29Compared to India.

00:47:30I just saw some suspect vehicles on the road.

00:47:34Yes.

00:47:35This is 10 years ago.

00:47:36Oh, no.

00:47:37Now, believe me.

00:47:38Big cities.

00:47:39It's a completely different game.

00:47:40Super organized.

00:47:41People stay in their lanes.

00:47:43It's really amazing.

00:47:44No more three-wheel semi-trucks?

00:47:45No, no, no.

00:47:46You've got to go back.

00:47:47They've really cleaned up.

00:47:48Honestly, it's worth the trip.

00:47:49No, yeah, yeah.

00:47:50No, no, no.

00:47:51I will.

00:47:52I will.

00:47:53It just sets the bar differently.

00:47:54But voice control inside of the car.

00:47:55So I'm sitting in this Voyage.

00:47:56It's a very nice car.

00:47:57Very well executed car.

00:47:58I'm sitting in the backseat and then it's super hot.

00:48:01And so we're trying to ask the guy.

00:48:02It's all glass roof.

00:48:03And we're trying to ask him something.

00:48:05And then he just takes his phone out, turns the thing and holds it for us to say something.

00:48:10So we say something.

00:48:11He looks at it.

00:48:12He goes, OK.

00:48:13He says something in Chinese.

00:48:14The whole glass frosts up on the roof.

00:48:16And then we're like, my goodness, the voice control is so good.

00:48:18And so when we stop, we ask him more questions using our translator.

00:48:22He looks towards the passenger window and he says something and only that window comes

00:48:26in.

00:48:27He looks at the driver's window.

00:48:28He makes the same command.

00:48:30That window comes in.

00:48:31So it's using the camera.

00:48:32No, voice direction.

00:48:33Oh, it's just the microphones.

00:48:34Oh, OK.

00:48:35Unreal.

00:48:36Wow.

00:48:37Yeah.

00:48:38And then we ask more questions about this to our local staff there.

00:48:40And they said the Chinese language, because I asked about accents, that's the biggest

00:48:43problem we have here in the U.S.

00:48:45So my boss, Jeremy, is French and then he gets into the car and he uses the voice control

00:48:49that doesn't work and he comes all pissed off at us.

00:48:53These guys say that the Chinese dialects have a huge range in accents and pronunciation.

00:48:59And the voice, the average voice control software handles the full range.

00:49:03Now, that's impressive.

00:49:04Right.

00:49:05Wow.

00:49:06So the level of compute that's going into it.

00:49:07It's just better tech.

00:49:08And the learning is superb.

00:49:09Right.

00:49:10And so I think that is something that will be in the future of our cars regardless of

00:49:13where the software stack is developed and deployed.

00:49:16We do need voice commands.

00:49:17We should not be searching through menus when we go through cars.

00:49:20So that's one of our big focus areas is what can we do with voice control to activate a

00:49:25lot of these different things.

00:49:27And we're running the Android OS in our car, for example, but we're also compatible with

00:49:31Apple CarPlay.

00:49:32So if you have your Apple CarPlay phone hooked up and you want to use an Android command,

00:49:38how is the voice control going to work?

00:49:39These things are going to play a big role in the evolution of cars going forward.

00:49:43So how did, it's interesting though, because I remember when voice control first came into

00:49:48vehicles and it never worked, but how is China able to leapfrog to where it does work?

00:49:56Because they focused on it?

00:49:57They made it a priority.

00:49:58Made it a priority.

00:49:59It just was never a priority for us.

00:50:00I know that.

00:50:01Yeah, it was a third way to do something.

00:50:02It's just like, you know what?

00:50:03We know how to use these buttons and switches.

00:50:04Let's worry about user experience and how you nest the menu.

00:50:08That was far more important for us.

00:50:10But they just went in.

00:50:11You know, it's like, I use this example for mobile phones.

00:50:14So India as a country had a terrible landline network.

00:50:18You'd literally, I think you'd have to wait like months or maybe in a year to get a landline.

00:50:23When mobile phones came in, everybody had a mobile phone.

00:50:25So they just leapfrogged this entire landline network.

00:50:28Didn't bother developing it, just went to the next level of tech.

00:50:31And that's really what China has done.

00:50:32They missed that interim step, so they didn't worry about going through getting the best

00:50:35menus and the best button setup or anything like that.

00:50:38They're like, we're just going to go voice.

00:50:40I think some of it comes out of this, it's the broader incorporation of the digital life.

00:50:48Like the super app, everything being on the phone.

00:50:51We're on our phones, we're on our Android phones, our Apple phones, but we don't have

00:50:56apps as powerful as like WeChat and Weibo that also now incorporate this voice function.

00:51:02But I think the equalizer will likely be AI, because AI is allowing for a lot more natural

00:51:09language, a lot more.

00:51:10And I think to your point, the first gen voice controls were crap.

00:51:16Because if you mispronounce something, it didn't understand you, then you're just like,

00:51:20what am I doing?

00:51:21That's exactly what you just said.

00:51:24You just bypass it, you don't deal with it again.

00:51:25It just becomes an annoyance.

00:51:27To pick on one of your former partners and competitors, like in Mercedes, if you say,

00:51:33hey, Mercedes, it voice prompts.

00:51:34Well, there's a lot of things you say during the day that sound like, hey, Mercedes.

00:51:38And all of a sudden, it's crazy.

00:51:39And it's just constantly annoying.

00:51:41And then 80% of the time, it's the wrong answer or it doesn't do what you want.

00:51:46And you just ignore it.

00:51:48Like, oh, my car is annoying.

00:51:49There's too many screens, too much technology.

00:51:51I hate it.

00:51:52Where if it just worked better.

00:51:55So we've already made big progress.

00:51:57You should test drive our QX80.

00:51:58Have you driven it?

00:51:59We just, yeah.

00:52:01So if you just do the, OK, Google, give it a command.

00:52:03Like, you don't have to sound like a robot when you just say, OK, Google, take me to

00:52:08Burger Republic, downtown Nashville.

00:52:10It takes you.

00:52:11It needs to be that natural.

00:52:13If I have to say, address, please, city, please.

00:52:16And then you say the city name.

00:52:18And it goes, wrong phone number.

00:52:20Nobody's ever going to use that again.

00:52:22We're making a lot of progress.

00:52:23But watch that space for huge improvements, really, going forward.

00:52:27OK, so we're running out of time.

00:52:30Let's bring it back to some of your future products that I think you can talk about.

00:52:37Anything come to mind?

00:52:39We can start with Leaf.

00:52:40Or like, what's burning hot on your plate?

00:52:43So Leaf will be renewed.

00:52:44So clearly, that's an aging vehicle.

00:52:47It was a pioneer back in 2010.

00:52:49And because of the rate at which electrification developed, we didn't invest in it as much

00:52:53as we did.

00:52:54Aria was then the breakthrough car, which even today, I believe, is really a superb

00:52:58execution of an EV in that segment.

00:53:00But Leaf will be the next step above.

00:53:02We need to get a level of affordability below where Aria is.

00:53:06So you can expect a car very much like that chill-out concept that we've shown publicly.

00:53:12Yes.

00:53:13Very much a car like that that will replace the Leaf in the very near future.

00:53:18For those who maybe haven't, this is also a podcast, so it's audio.

00:53:22How would you describe what the chill-out looks like?

00:53:26So Aria's form factor, the overall design, it's biased towards aerodynamics.

00:53:33But it doesn't look like an egg.

00:53:35So there's enough shape and character lines on it where it defines that it is a Nissan.

00:53:42So there's elements on the front grille, for example, the way the headlamps are executed.

00:53:46It's very much a Nissan, but it looks very sophisticated and sleek.

00:53:50So take the smaller version of this.

00:53:52So Aria is about 4.6 meters overall in length.

00:53:55So take the C-segment versions around 4.4 meters, roughly 4.4, 4.5 meter length vehicle.

00:54:03And that's really what the chill-out will be.

00:54:04So a baby Aria, if you will.

00:54:07But it's come much later.

00:54:08So the interior tech, the electrical architecture,

00:54:12feature content will be really very advanced compared to where Aria is.

00:54:17And we're doing all of this to make sure it comes in at a much more

00:54:19affordable price point than where Aria is today.

00:54:22And then, hypothetically, do you scale up from there?

00:54:26Like, OK, we've got Leaf chill-out, and now we're going to replace Aria.

00:54:32You say chill-out, we've got Leaf.

00:54:34OK, sorry.

00:54:36Do you go even bigger?

00:54:38In other words, is this scalable, what the new product is?

00:54:43So platforms becomes kind of a nebulous discussion.

00:54:48But let's just say, we talk about the Canton vehicles that we announced in the past.

00:54:51So that family of vehicles can do a CSUV range of vehicles.

00:54:56It doesn't need to be a single one.

00:54:58You can do a rugged off-roader.

00:55:00You can do kind of a soft-roader off of that.

00:55:02There's a bunch of different versions of vehicles you can build off of that.

00:55:05You can clearly build some sedan off of that.

00:55:08And then, what we really are looking for, in the beginning, we were looking at that D segment.

00:55:12So D segment is Pathfinder QX60 on the Infiniti side to be electric vehicles in the future.

00:55:18But the way we see the trajectory lining up right now, that segment will be potentially

00:55:24predominantly plug-in hybrid, maybe even parallel hybrid for that.

00:55:29And there might even be space for an internal combustion engine, as long as you can meet

00:55:33Tier 4 Sulev 20.

00:55:35Those are other emission standards you absolutely need to comply with if you stick with the

00:55:39internal combustion engine.

00:55:40I think that'll be slower.

00:55:42Could you do kind of like what BMW is up to, where whatever you want, if you want a 5 Series,

00:55:50pure gas, plug-in hybrid, or EV, same vehicle.

00:55:54In other words, could you do a Pathfinder that's like a ICE, a PHEV, or electric?

00:56:01We could do that.

00:56:01But it's not an efficient way to develop cars.

00:56:03Yeah.

00:56:04It just isn't.

00:56:05So if you develop a vehicle that's going to accept an internal combustion engine and an EV

00:56:09platform with a battery pack, you're just going to be a compromised version of both.

00:56:13Yes.

00:56:13So the way we see-

00:56:14Strongly agree, yes.

00:56:16And you know it.

00:56:17It's the architecture of the vehicle, the weight, the packaging, seats, et cetera.

00:56:21So there'll be an architecture developed to accept a hybrid powertrain, whether it's a

00:56:26Series hybrid powertrain, a plug-in hybrid powertrain, or a Series plug-in hybrid powertrain,

00:56:34et cetera.

00:56:34They'll be fundamentally designed to do that.

00:56:36And then there'll be vehicles designed to be EVs.

00:56:38EVs, EV.

00:56:39That's what I was trying to get at.

00:56:41Would you ever be in a scenario where there's a PHEV and an EV on the same platform?

00:56:46Not on the same platform, but they could potentially share the nameplate.

00:56:49And I think a couple of OEMs have done that.

00:56:51Yes, for sure.

00:56:52Because nameplates-

00:56:53Chevrolet, Equinox, and Equinox EV.

00:56:55Exactly.

00:56:56Nameplates are really about awareness, familiarity.

00:56:59The customers have a huge car park on it.

00:57:01So we shouldn't be in the business-

00:57:02Or I was going to say a Ford Mustang, Mustang Mach-E.

00:57:04Mach-E, that's very clever, actually.

00:57:05Because in the beginning, a lot of haters took off on it.

00:57:09But now nobody's having that conversation, right?

00:57:10You want an EV, you get an EV.

00:57:11You want the classic Mustang, get a classic Mustang.

00:57:13I went in real early to look at that.

00:57:15And we all said, well, why are you doing this?

00:57:17And they said, well, here's the dorkmobile we were going to do.

00:57:20And we said, hey, what if we made it sexy?

00:57:22And like, what's sexier at Ford?

00:57:24Mustang's the only sexy product we make.

00:57:26And I was like, it took me a second.

00:57:27I was like, oh, yeah, that's a good point.

00:57:29So an interesting tidbit, then, for your podcast viewers

00:57:32who would probably like this a lot.

00:57:34Aria today was originally supposed to be the Murano replacement.

00:57:37Yes.

00:57:37If you think about the timing, the kind of customer it goes after,

00:57:40driven by form factor, very fine design, et cetera.

00:57:44But then from a marketing and strategic standpoint,

00:57:46we thought we want to make a big statement about Nissan's new EV.

00:57:50LEAF was a LEAF, but now we're going to go in a bigger segment,

00:57:53more premium vehicles, all new.

00:57:55And that's why it got a different name,

00:57:57where it otherwise might have been lost in,

00:57:58OK, it's just the new Murano and not an electric vehicle.

00:58:02Right.

00:58:02But otherwise, I see nameplates being reused.

00:58:05Just because a vehicle goes from internal combustion engine to EV

00:58:07doesn't mean you have to change the name.

00:58:08No.

00:58:09Well, let me extend off of that and ask a controversial question.

00:58:12So Titan just went out of production.

00:58:16E-Rev technology that we talked about at the top of this,

00:58:19as you mentioned, it works really well for a large SUV.

00:58:21For towing.

00:58:22For towing.

00:58:23Could a Nissan truck come back as an E-Rev?

00:58:28There's another large competitor out there.

00:58:31Ram's doing it.

00:58:35Could you do a small truck as an E-Rev?

00:58:38Is there something in that?

00:58:39So that full-size pickup truck segment, great question.

00:58:42It's dominated by the US brands, the domestic brands.

00:58:44There's no doubt.

00:58:45And there's very little room for an import Japanese brand

00:58:49to really go and make an impact in that space.

00:58:51It's a very expensive enterprise.

00:58:53And you've seen what that means.

00:58:54Yeah.

00:58:54And massive competition.

00:58:55Massive competition.

00:58:56I mean, it's probably the most competitive.

00:58:58Loyalty is very high.

00:58:59So it's probably not the cleverest place for us to put some resources.

00:59:02OK.

00:59:02Now, midsize truck, Frontier, on the other hand, why not?

00:59:06We're doing very well with the Frontier.

00:59:07We've finally invested in that platform after many years of a relatively old,

00:59:12dated vehicle.

00:59:13And Frontier is now really a superb product.

00:59:16It's tough.

00:59:17It's still lifestyle.

00:59:18We've upgraded the interior now with the architecture, a new screen, et cetera.

00:59:22It looks like a modern pickup truck.

00:59:24But that platform, and we're actively looking and studying,

00:59:28what can we do to electrify that?

00:59:29What solution makes sense where we don't lose the ruggedness,

00:59:33we don't lose towing, and we shouldn't be slave to the grid?

00:59:37Right.

00:59:38People who want that vehicle want to use it as a truck.

00:59:40All right.

00:59:41Well, I got to say this then.

00:59:42So Xterra, does that come back?

00:59:46Does that come back?

00:59:47Because that was a very, I think, beloved vehicle.

00:59:50And it had every attribute you just mentioned, tough, rugged, off-road, capable,

00:59:55and all that.

00:59:56Does that have a nameplate that I think still carries a lot of water?

01:00:00Does that?

01:00:01I'm doing everything I possibly can to bring that nameplate back.

01:00:04Awesome.

01:00:04That's a good answer.

01:00:05I love the Xterra.

01:00:07Oh, the Xterra was, I mean.

01:00:08The key with these nameplates, though, the one thing I'm very clear with is

01:00:12they have to be authentic.

01:00:14Right.

01:00:14So for example, some of the vehicles that we've called Nismos in the past,

01:00:18I was deadly against them.

01:00:19I won't be specific.

01:00:20But it just was not right.

01:00:21The fact that you can admit that is, hey, that's great.

01:00:24So GTR Nismo is a Nismo.

01:00:27And that is an outstanding piece of equipment.

01:00:29So if we bring an Xterra back, actually, when we bring the Xterra back,

01:00:35it has to be authentic to what Xterra represented in terms of ruggedness,

01:00:39capability, affordability, all of that good stuff.

01:00:42So stay tuned.

01:00:43Very cool.

01:00:45We're quickly coming up on time here.

01:00:47But I want to ask about autonomous vehicles.

01:00:50Ah, yes.

01:00:52But I will enter from a side door, which is the Tesla RoboTaxi event just happened.

01:01:01They showed the RoboTaxi.

01:01:02They showed the RoboVan.

01:01:03They showed some robots.

01:01:07Any point of view?

01:01:09Any thoughts on what you saw?

01:01:12It's all cool stuff.

01:01:13Right?

01:01:14I mean, it's cool stuff.

01:01:14There's some level of theater involved.

01:01:17But let's talk about real success in AV today.

01:01:21And it's Waymo.

01:01:23So Waymo is running 100,000 trips a week, paid trips.

01:01:27The average price of a trip is at about a 10% to 20% premium to what Uber charges.

01:01:33They're in a grid-like city like Phoenix.

01:01:34But they're also running in San Francisco.

01:01:37I've had multiple rides in LA.

01:01:37They're running in LA now, yeah.

01:01:39In LA.

01:01:39So LA is still kind of gridlocked.

01:01:41I mean, anyway, you spend most of your time in traffic in LA.

01:01:43But San Francisco, hilly, windy roads, people jumping out on bicycles, whatever.

01:01:48And people feel like they own the roads there more than cars.

01:01:51And it does an amazing job of navigating that.

01:01:54So if you wanted to see the benchmark for the future of autonomous mobility, to me today,

01:01:59it's a Waymo.

01:02:01And I do believe...

01:02:04So let's switch gears just a little bit.

01:02:06Now, I don't think there's customers sitting going...

01:02:09There's a very small number of customers sitting there going,

01:02:11I can't wait for the day that I can sit in the backseat of my Ariya and it takes me to the office.

01:02:15There's a small group of people.

01:02:17But that's really not the problem that's begging to be solved.

01:02:20There's people saying, I spend a lot of time driving to work.

01:02:23And I want to make that time more useful for me.

01:02:25Especially when you get 45 minute to an hour commute.

01:02:28Up to 25 minutes, people don't mind it.

01:02:30When you cross the 25 minute mark, people start to hate it.

01:02:33So what's the solution for them is a shared vehicle.

01:02:38But it can't be a vehicle that we have today.

01:02:41Okay, so if it's a sedan that I have today,

01:02:44and I've got a total stranger sitting relatively close to me.

01:02:46Yuck.

01:02:47Or a van where I have to walk over somebody to sit down there.

01:02:50That user experience is terrible.

01:02:52Yeah.

01:02:52Okay, so the true future for me, for autonomous mobility,

01:02:57is a 68 passenger van-like vehicle.

01:03:00But don't think of a van like it is today with bench seats and that kind of crappy on the inside.

01:03:05But a really great user experience on the inside,

01:03:07which people can share and that is not on a fixed route.

01:03:11That to me is a genuine future of shared mobility.

01:03:15So get the cost per mile down to where it's lower than using your personal car.

01:03:19Get the convenience factor way up because it's taking you from point to point.

01:03:22Make that user experience seamless that you just summon it from your phone.

01:03:26But when you get into your seat,

01:03:27you're in an environment that's fully protected.

01:03:29Then you can actually do productive work in there

01:03:32without sitting next to a stinky co-passenger or whatever.

01:03:35Right, right.

01:03:36The bus experience.

01:03:37The bus experience.

01:03:38Which everybody hates.

01:03:38That's exactly right.

01:03:40So do not replicate the classic experience.

01:03:42The American bus experience.

01:03:44Different than like the London bus experience.

01:03:46Or a Japanese train experience, which is just superb.

01:03:49Right.

01:03:49So does that make sense?

01:03:50So that's really, to me, the future of autonomous.

01:03:52Now there is a subset of that.

01:03:54If you drive the QX80 again on these highways using the AD2 or ProPILOT Assist 2,

01:04:02which does lane changes, it's absolutely superb.

01:04:04So this morning I'm driving into work,

01:04:06I had an early morning meeting at 6 a.m.,

01:04:08and then I went till like 8 and I had to be here right after for a meeting.

01:04:11So I had to join one of my meetings from my phone.

01:04:14And I'm sitting here on AD2 mode.

01:04:16Car's taking care of most of the stuff.

01:04:18So I'm not looking at my phone,

01:04:19but I'm paying very close attention because it's on my Bluetooth

01:04:22and periodically maybe I just look up on my phone.

01:04:25But that car is doing all the stuff that it needs to.

01:04:27I don't have to worry about somebody who potentially is breaking suddenly

01:04:30and I'm at rear end them.

01:04:32That has very real use.

01:04:34And you will see that technology get better and better and better.

01:04:36How close are you working?

01:04:38I'm sure you're working on it.

01:04:39But how close is Nissan to level three and four?

01:04:42Because I know Mercedes introduced it and you can get it now on the S-Class.

01:04:46Yeah, we have the technology.

01:04:47It's just a question of how affordable is that?

01:04:50Okay, I see.

01:04:52Because that to me is the game changer.

01:04:54That's why I don't really understand the Tesla RoboTaxi is enough.

01:04:56But when the liability burden shifts to I've now activated my car to drive itself

01:05:03and Mercedes is responsible,

01:05:06boy, then you can really work and you're not paying attention to anything.

01:05:09That's a great R&D question to answer,

01:05:12but it's not the burning problem to be solved from a customer perspective.

01:05:16What I described for you for this shared vehicle and autonomous vehicle,

01:05:19that's the burning customer problem that needs to be solved.

01:05:22So I'd rather focus resources on solving that problem.

01:05:26And then the second one is customers are in their car.

01:05:29They are going to multitask.

01:05:30You tell them all that you want.

01:05:32Don't text and drive, but people are just going to look at their phones.

01:05:35So build in a safety system.

01:05:37But to me, that's level three where the, like I said,

01:05:40the liability shifts away from the driver to the machine.

01:05:44Yeah, we're not in a big hurry to get there.

01:05:46Okay.

01:05:48I mean, you can, but then the willingness to pay,

01:05:50is that really the problem that's begging to be solved?

01:05:52There's a whole list.

01:05:54So my job is constantly about prioritization.

01:05:57You got X amount of money to spend.

01:05:58Where do you want to put it?

01:05:59How is it going to solve something for your customer?

01:06:01Is that the best use for your brand?

01:06:03Also got to remember, this is a mainstream accessible brand.

01:06:06It's not a unique niche brand.

01:06:08It's not Mercedes, right.

01:06:09I'm fascinated by your description of the future of autonomy

01:06:13because I actually have never heard it described that way

01:06:16where it's this shared use vehicle,

01:06:19but with each occupant getting their own sort of space.

01:06:23Like I haven't seen actually a sketch or a concept vehicle like that.

01:06:27The thing that bugged me about the Tesla,

01:06:30the hubbub on the robo-taxi and especially the robo-van

01:06:33is that robo-van has been seen before.

01:06:35Everybody has done a large driverless box

01:06:39with like big opening doors and multiple seats in it.

01:06:42In fact, there's nothing new there.

01:06:44And they just see these benches.

01:06:45I'm like, nobody wants to sit on a bench.

01:06:47It's not going to encourage me.

01:06:49I've got this beautiful car that I drive to work every day

01:06:51and I love the environment that I'm in.

01:06:53You're going to make me sit on a bench.

01:06:54You're giving me a bus experience when I'm used to

01:06:57like a car that's a private jet.

01:06:59I mean, look, Tesla's never been about the interior experience.

01:07:02So fair point.

01:07:04So let's just think about it.

01:07:05I mean, for your customers, I'd love to get that feedback

01:07:08is if we changed your user experience

01:07:10and how you could get from point A to point B,

01:07:13would you then change or consider a different type of mobility?

01:07:16And you know what that does for a car company?

01:07:18We're all about revenue per steel box sold.

01:07:21You will go into revenue per mile traveled

01:07:23and that's a much bigger pie.

01:07:25Got it.

01:07:26Fascinating.

01:07:27Yeah, that's new.

01:07:28So let's cover two things.

01:07:31Let's talk about Formula E because you have a burning passion and interest there.

01:07:40But also earlier in your career, you did some, you were...

01:07:45We were going over your curriculum VTAC.

01:07:47Oh, yeah.

01:07:50Well, why don't we start there?

01:07:52Because then we can end on a Nissan note with Formula E.

01:07:55You were at Cerberus at a very interesting time.

01:08:02You guys are good.

01:08:03You zoom right into the nugget.

01:08:05I mean, I was just like, whoa.

01:08:07So for those listening, this was when Chrysler eventually became...

01:08:12Fiat Chrysler.

01:08:13Fiat Chrysler became FCA.

01:08:16You were at this really gnarly point in history.

01:08:19Is that when you entered the car business?

01:08:21Oh, no, no, no, no.

01:08:22I'm much older than that.

01:08:2328 years.

01:08:24So I joined in 96.

01:08:26So I joined what was American Chrysler in 1996,

01:08:30actually working at the assembly plant that produces the Dodge Ram.

01:08:34And I was actually a resident engineer in the stamping facility.

01:08:38So if there was a way to start at ground zero, that was it.

01:08:41Yeah, banging on door panels.

01:08:42A stamping plant in 1996 in Detroit at Nine Mile and Mound.

01:08:47This was the Tom Gale, the semi-truck looking with the crosshair grille.

01:08:53First gen.

01:08:54BR was a body car, I still remember.

01:08:56It was still a Dodge Ram at that point.

01:08:58And you drove it around and everybody would just be pushing their hands like this,

01:09:01like you got to pull the pickup truck.

01:09:02It was a hit.

01:09:03It was a huge hit.

01:09:04Huge hit.

01:09:04Massive hit.

01:09:05But that's how I learned the business is how is stuff made from the ground up.

01:09:09That's why a lot of the stuff I talk to you about talks about how you make stuff.

01:09:13I didn't just jump into the glamorous end of the business.

01:09:16Really, the gnarly end of the business.

01:09:17Literally, the least glamorous is stamping door panels and tailgates.

01:09:21Yeah.

01:09:21So I had many other jobs after that.

01:09:23And then at some point, this was in, let's see now, 2006, I believe.

01:09:30Maybe, I think it was 2005, if I remember right now.

01:09:332005, 2006 time frame, somewhere there.

01:09:37I got actually, we went through this whole big interview process.

01:09:40They had a bunch of candidates.

01:09:42And I was selected to be the executive assistant,

01:09:45so technical assistant to Dieter Zetscher.

01:09:48Oh, wow.

01:09:49When Dieter Zetscher was the CEO of the American Chrysler.

01:09:51Dr. Z.

01:09:52So I got selected for the job.

01:09:53I was super excited.

01:09:54Couldn't wait.

01:09:55And this guy is a legend in the business and has all this deep respect.

01:09:58Daimler Chrysler is this $170 billion company.

01:10:00I just thought, you know, that's it.

01:10:02My life's good now.

01:10:03I'm made.

01:10:04And then literally, like two months later,

01:10:06Jürgen Schrampp retires from Daimler Chrysler at the time.

01:10:10And Zetscher gets the top job.

01:10:12Right.

01:10:12So he has to move from Auburn Hills now to Stuttgart.

01:10:15And he doesn't really need an American helping him in Germany.

01:10:17Right.

01:10:17So he's like, yeah, you know, this is great.

01:10:19But I'm sorry.

01:10:20Now I'm moving.

01:10:21So I was kind of without a job for a bit.

01:10:24And then some months later, so in probably January of 2006, I think,

01:10:29Joe Eberhardt, who was now the CEO of Jaguar Land Rover in the US,

01:10:34he hired me to be his technical assistant.

01:10:36He was the EVP of sales and marketing of Daimler Chrysler,

01:10:39but of the American business in Auburn Hills.

01:10:41So working with him.

01:10:42And, you know, he's obviously super well connected with Zetscher

01:10:45and with all the people in Germany.

01:10:47Back and forth.

01:10:48I probably logged something like 300,000 miles on the company jet in like two years.

01:10:53But those were pivotal two years.

01:10:55Yeah.

01:10:55Because at the end of that year, Eberhardt leaves.

01:10:58There's a whole bunch of internal politics that goes behind it.

01:11:00And there's plenty of stuff you can read publicly.

01:11:02Yeah, yeah.

01:11:03Stuff that I simply cannot share because that stuff is still confidential.

01:11:06But he leaves the company.

01:11:08Tom Lasorda takes over.

01:11:10I mean, he's the CEO.

01:11:11Tom Lasorda takes over sales and marketing.

01:11:13He keeps me in that job.

01:11:14And he's like, I need you to support me through all this sales and marketing stuff.

01:11:19And there's a very interesting chart.

01:11:22If you look at the stock of Daimler Chrysler, DCX stock,

01:11:26at some point starting in December 2006, the stock started creeping upward.

01:11:37OK, then in February 2007, it really started going up.

01:11:41There was a couple of announcements linked to that.

01:11:43So basically, December 2006 is when they originally got some investment bankers in

01:11:49to evaluate spinning off the Chrysler business.

01:11:51Right.

01:11:52So I sat through all of this stuff, working for the top executives of the company,

01:11:56the entire process of how the company was evaluated, and then selling it off to Cerberus,

01:12:01and then supported the new management team, which was brought in by Cerberus.

01:12:05That was, well, Bob Nardelli from ex-Home Depot at the time.

01:12:08Right, Jim Press.

01:12:09Jim Press came in, all of those, Mike Manley, Landry.

01:12:12All of these guys.

01:12:13I supported all of them.

01:12:14So it was the most incredible learning experience.

01:12:17I mean, I aged rapidly in those two years.

01:12:19How old were you?

01:12:21So this would have been 2006.

01:12:23I've been 34.

01:12:23Wow.

01:12:24Oh, that's a lot for a young kid.

01:12:2634, 35-year-old.

01:12:27Yeah, that's a lot.

01:12:28It was superb.

01:12:29I mean, huge responsibility.

01:12:30I mean, there was literally no rest whatsoever.

01:12:32You're traveling, flying all over the place.

01:12:35Just learned a ton.

01:12:36But that's actually what taught me how quickly things can change in this industry.

01:12:41One minute, you're this big, successful $170 billion company.

01:12:44Next thing you know, you're spun off in a small arm to a private equity company.

01:12:4818 months later, you're bankrupt.

01:12:49Right.

01:12:50Right, that's really what happened, the whole process.

01:12:52And that's actually when I left what was Daimler Chrysler became Cerberus Chrysler

01:12:57became Fiat Chrysler.

01:12:58And then shortly after that, I left.

01:12:59And that's when I joined the Kia of Europe in Frankfurt.

01:13:02Did you ever?

01:13:04That was before Mark Young.

01:13:05It was before him.

01:13:07So funnily, I was working for Mike Manley at the time.

01:13:11And I was actually based in Germany at the time.

01:13:12I'd taken an international assignment.

01:13:14And Mike Manley had wanted me to come back to the US.

01:13:18And he wanted me to come back to the US.

01:13:21And typically, Mark Young, I mean, I would have reported directly to Mike back in the US.

01:13:26And he reported to Mark Young.

01:13:27And he always wanted to meet one level in because he was in the business of getting

01:13:31rid of the people first line.

01:13:33He wanted to make sure there was another line ready.

01:13:36But anyway, I just didn't think that whole environment was for me.

01:13:39And you went through a lot.

01:13:41I'd really been through a lot.

01:13:43You know, I mean, seriously, those things can burn you out.

01:13:45They're stressful.

01:13:46And there was this great opportunity with Kia.

01:13:48Sure.

01:13:49They had hired Peter Fryer from Audi at the time.

01:13:52They were going on this big product blitz.

01:13:53We launched like seven cars in just two and a half years.

01:13:57And so it was a great life.

01:13:59Also, Zetsche and Eberhardt are two of the nicest guys in the business.

01:14:03Very knowledgeable guys.

01:14:04Yeah, knowledgeable, but also just like kind, which is sometimes rare.

01:14:07To you, to the press.

01:14:09Were they actually kind?

01:14:11Actually, I have great relations.

01:14:12I'm personally still friends with Eberhardt.

01:14:13Eberhardt's a good dude.

01:14:14He's a great guy.

01:14:15I mean, I know his kids.

01:14:16I know his family.

01:14:17They're great people.

01:14:18Yeah.

01:14:18Okay.

01:14:19So that's cool.

01:14:19All right.

01:14:20Well, that's great.

01:14:20That's awesome.

01:14:21That's exactly the story.

01:14:22I looked in your LinkedIn.

01:14:24I know there's something.

01:14:24He showed me.

01:14:25I was just like, Nardelli, ooh.

01:14:28Fun times.

01:14:29Okay.

01:14:30And then so lastly, let's close it out.

01:14:32We went to Formula E earlier this year.

01:14:35We went to Portland.

01:14:36We talked to your Tomas Avolpe.

01:14:40We talked to two of your race engineers.

01:14:42We had a great time.

01:14:44Did you talk to the racing manager?

01:14:46The woman from?

01:14:47Yes, Christina.

01:14:48Christina, superb.

01:14:49She's awesome.

01:14:50Yep.

01:14:50And phenomenal.

01:14:53Nissan's been in for a long time.

01:14:56Going to stay in it?

01:14:58Yes.

01:14:58They're down for the future.

01:15:01We're in the next generation.

01:15:03In fact, I was a part of that whole process.

01:15:05Part of the team was recommending that we continue with Formula E

01:15:09and securing the investment to be the next generation.

01:15:12So the interesting thing in Formula E,

01:15:14so we build our own car.

01:15:15We were with the racing team, E-Dams that we then acquired.

01:15:18Now we own the entire car making operation

01:15:21and also the racing operation is fully owned by Nissan.

01:15:24But we also build the racing car for McLaren.

01:15:27Yes.

01:15:28So in every race, we've got four cars in every race.

01:15:30Two of ours under Nissan, two under McLaren.

01:15:32We actually compete on the tracks.

01:15:34We don't share anything on the track.

01:15:35Formula 1, I mean, it's been around for so long.

01:15:38And honestly, a Formula 1 car

01:15:40is a super incredibly sophisticated vehicle

01:15:43that has little to nothing to do with most normal passenger.

01:15:46At best on hypercars, you get maybe some of the aero.

01:15:49Correct.

01:15:49Or DRS or some technology like that.

01:15:51Correct.

01:15:51But very, it's just, it's not a lot of everyday transfer.

01:15:55Correct.

01:15:56That's because passenger cars were here.

01:15:58Formula just, Formula 1 just evolved

01:16:00at a completely different.

01:16:01Crazy rate.

01:16:02Completely different rate, right?

01:16:04But EVs is a different thing.

01:16:05So there's still a very, there's lots of controls in place.

01:16:09It's not just about budget.

01:16:10There's lots of controls of what you can and cannot do

01:16:12in a Formula E car.

01:16:14So it's not about the team with the bigger budget wins.

01:16:17It's the more innovative team

01:16:18and the better run racing team that wins.

01:16:20That's what I really like about the format.

01:16:23Battery tech, heating and cooling cycles.

01:16:25Sure.

01:16:26Regen braking.

01:16:27Discharge.

01:16:28Aerodynamics and cooling.

01:16:30All kinds of great stuff that gets learned there

01:16:32on the track that is making its way into our EVs.

01:16:35So you'll see now future EVs.

01:16:37We have very, very slippery coefficient of drags.

01:16:400.25, 0.24s.

01:16:43GTR is a 0.26 to put it in.

01:16:45That was a huge aero achievement really

01:16:48for a car in that segment.

01:16:49So we're learning a lot about energy management,

01:16:53battery management, software.

01:16:55The software development stuff that these guys do

01:16:57on the teams is just fascinating.

01:16:59It's really ultimately a big data exercise

01:17:02because it's a massive optimization exercise.

01:17:04When do you get into attack mode?

01:17:06When do you use peak power?

01:17:07When do you back off?

01:17:10You definitely do this in Formula One as well,

01:17:13but Formula E, you're learning usable stuff

01:17:16that is being translated now into mainstream vehicles.

01:17:19So we've got engineers.

01:17:20Because everything is new.

01:17:21Exactly.

01:17:22Right.

01:17:22So we've actually got engineers from Japan,

01:17:24from the Atsugi Tech Center,

01:17:26who are physically based in Paris with the racing team.

01:17:30Learning stuff, communicating back

01:17:32with the home engineering team.

01:17:33It's not just something that's, you know,

01:17:35these are the race guys.

01:17:36They're off doing their thing off the reservation.

01:17:39And we talked about this a little bit

01:17:40before we started recording,

01:17:41but where are the races we should go to?

01:17:44So number one, I think just closer geography-wise,

01:17:49Mexico, because they're super passionate.

01:17:52Mexico City Race.

01:17:53Mexico City Race.

01:17:54It's an urban race.

01:17:56The fan base is incredible.

01:17:57They absolutely love it.

01:17:59I attended Sao Paulo this last year,

01:18:00and I thought it was fantastic.

01:18:02The location in Sao Paulo is not the greatest.

01:18:04It's a bit gritty around the track,

01:18:06but the actual race day environment is fantastic.

01:18:08People are just totally into it, fully engaged.

01:18:12I haven't been to the one in, I missed New York City,

01:18:15but I heard the one in Tokyo this year was outstanding.

01:18:18Oh, that's got to be cool.

01:18:20That's got to be super cool.

01:18:20So the first time in Tokyo,

01:18:22and then, you know, you've been to the city of Tokyo,

01:18:24it's just perfect for a race like that.

01:18:25That's cool, really.

01:18:26The environment.

01:18:27That's like a video game, isn't it?

01:18:28So if I had to rank order it, do Mexico City, do Tokyo.

01:18:33Just to, you know, then we can probably combine that

01:18:35with getting you guys into our headquarters,

01:18:38and maybe have an interesting conversation.

01:18:40Go to Yokohama.

01:18:41I would, Mexico City, like, let's go.

01:18:44Awesome, all right.

01:18:45Just for the food.

01:18:46Food, outstanding food.

01:18:48Well, this was a tremendous conversation.

01:18:50So we'd love to have you back on.

01:18:53We went way over, and we still have a lot.

01:18:55I could ask you.

01:18:56I could sit here and chat all day.

01:18:58But we'll tell you what.

01:18:59We'll have you back on after some of this.

01:19:00Well, how about when some of these E-Revs,

01:19:03P-Hev vehicles come out?

01:19:06E-Revs come out, we'll chat again.

01:19:08Or maybe we could do this recording in Tokyo.

01:19:11Perfect, Mexico City, yeah.

01:19:14For a race.

01:19:15That'd be amazing.

01:19:17But this was awesome.

01:19:18So I just want to thank you, Pons, for coming on.

01:19:20Thank you, gentlemen.

01:19:21This was fun.

01:19:22I'd love your feedback on our new products, by the way.

01:19:24You can be super direct and rude with me.

01:19:26That's all right.

01:19:26Fine, totally.

01:19:27We're super direct and rude.

01:19:29Excellent.

01:19:29Yeah, rude, if nothing else.

01:19:32But no, thank you so much.

01:19:34This was great.

01:19:35And yeah, thanks again.

01:19:52The Inevitable Vodcast, brought to you by the all-electric Nissan Ariya.

01:19:56Inspired by the future.

01:19:58Designed for the now.

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