China is the bright spot for the EV market, says Tim Higgins

Bit of an odd time to launch an EVIPO, especially with so much pressure on the industry. What are your expectations for this IPO? How do you think investors view this company? Yeah, it’s interesting about a year ago where the kind of the thought was maybe the company might raise more than a billion dollars. Now clearly that’s not the case, probably in part because where people’s minds are regarding kind of the market in general, the one bright spot for E VS globally is China. But as you just pointed out, it is a fierce competition among a whole heck of a lot of brands, a lot of capacity and you know, a price war that has even hurt the likes of Tesla, which would have been hard to imagine 18 months ago, you know, which you just talked about. It’s pretty interesting. Number one, another Chinese automaker, Geely’s one of the backers of this company and also in Zika’s filings, one of the big things that they highlighted was China risk. Even though they’re a Chinese company, not only from regulation from the government, but also from some of this price war as this company’s under the market, is there anything to differentiate them from some of the other EV makers that maybe offset some of that price pressure? Yeah. Well, Julie’s, you know the Parrot there is a very important and interesting company. But for Western investors this is an interest. It could be a potentially interesting way to get into that Chinese market, a way to invest in a in a in in some of that growth over there. As I would say, the China market is really the bright spot for EVs despite all of their challenges there. If you look at the US market, automakers are really looking at the slower of perhaps adoption of E VS. And just a few years ago they were thinking this was going to go really gangbusters. And now you look at the US customer and they’re tending to go towards hybrid technology, which is surprising a lot of people, not surprising people, the likes of Toyota or Ford for example, who are making that kind of dual bet that that’s where the market was going. But if you’re the, if you’re chasing E VS in the US, it’s not so robust. China is really probably the place to be if you’re going after this technology for a whole heck of a lot of reasons. All right, so I have a lot of reasons there. I want to turn back to the USA bit. When it comes to EV adoption, we’ve mostly seen enterprise adoption. When it comes to E VS, I’m thinking like an Amazon and Vivian, a UPS and arrival in some other companies. Why aren’t we seeing even more enterprise adoption when it comes to commercial EVs? Of course Ford has some commercial visa that they’re putting on as well. I believe they sold some to the post office, but why aren’t we seeing more of that? Why isn’t that a bigger business for these companies as opposed to being consumer focused? A lot of the focus has been consumers. You know there is an interesting kind of case that’s being made for commercial, not just when you talk about cars or delivery vans, but kind of those semi trucks. You see Tesla kind of getting into that, into that right, that area with their semi. One of the issues here is batteries. You need a lot of batteries in order to kind of haul all of this and that adds expense. So that’s one of the issues, you know, that’s the kind of the industry sees this as potential, but it’s also, you know, the slow adoption for all buyers out there. All right. So Tim, here’s a big question for you. Where we at when it comes to price pressures on EVs? I see BYD is actually ready to release a version of its Seagull EV in Europe. In China, it sells it for less than $10,000. I would imagine the price point will be similar when it comes to Europe. So is there more of a race to the bottom here or do you think we’ve actually may have reached the bottom when it comes to pricing on these E VS? Well BYD is really impressive what it’s been able to do on pricing and and probably part of the reason why Elon Musk over at Tesla seems to be signaling that he doesn’t want to get into a race on price or on cost with his next generation vehicles, his next generation EV vehicles. And why he seems to be focusing more on developing or or putting his excitement towards autonomous car development where there could be higher margins on that software like business. This is the challenge for the entire industry and why Western automakers seem to be very nervous about the future of EVs and that this idea that maybe the Chinese have already won on cost and it’s going to be a race for the bottom. But there’s a, there’s several reasons, but they have some advantage in part because of the the battery technology development that’s occurred in China on that supply chain.