[inaudible conversations] i am the director of new america and i am pleased to welcome new to this discussion today on the electric car and i am very happy to welcome the words on cspan2 our discussion. We will talk about a terrific book today called the great race. It is a very timely book the fourth time the electric car has appeared on the scene and the first time was when Thomas Edison was a great proponent of the electric car and 1 million of that date would be many millions today over 10 years to develop this and he promised the head of the biggest electric Utility Company in america he would put them on the electric system but it did not work out. There were two more episodes than finally we are here today. It is challenging to write a book on this subject that levi has written with sarah several requirements are necessary. You have to know cars, and technology, chinese and japanese, and for to have international competitions. Not many people meet those requirements but you do. I remember when this is just an idea can you give us the sense of what made you think that when you start the book that oil would be 500 a barrel . And the electric car had emergency to date is 50 a barrel but last year 120,000 cars were sold in the United States. How did you get involved and what made you want to write on the subject . Guest a lot has changed since this started the project but one thing that never changes as the patriots always win the super bowl. You may have mixed lamp feelings about that but when i started the book in early 2008, 2009 it came from a meeting. Meeting with a person who was in charge of Product Development his name was eric and his role was the long Term Strategic Development and i had the start of company i was working on at the time working for a very internal Combustion Engine and rethought that would be the future of automotive technology. We did not take batteries very seriously. That the lights came on and he congratulated me. But i would not put money into it because it would cost billions of dollars and take 20 years of everything is going electric anyway. Sova will ego boost then well move to electric vehicles. That was a huge shock in a city think he was serious about batteries . My partner said i dont think he was joking. He was not laughing. So that made me return to the drawing board to make it look at electrification and with the drivers and there were clear macro drivers like whale scarcity that we thought was a big deal at the time in the carbon constrained world but also the idea of industrial leadership that there were these big countries and economies that a new the automotive sector would be a critical part of infrastructure. What about the irish injun . That is on ice right now. I know its engines will be a part of the transportation picture for the next 30 years, but increasingly they will move toward the fuel cell vehicles. What is significant for you is when you were in shanghai and the seller the chinese are doing with electric cars. Was that an epiphany as well or were you already committed . What was amazing is how much has changed since i was at the world expo in shanghai. I know if you are familiar with the structure of the automotive economy but you have big multinational manufacturers sort order to produce or so cars they have to partner with a local company sold the largest is the shanghai Industrial Corporation now partnered with the number of these and for the 2000 expo bareass to put together of vision of what the future of shanghai would like. They created this absolutely dazzling display with the stadium seating and in the theater i huge imax screen they were strapped into the 5. Parnis and it flew you through this technologically advanced and clean electrify world where all the vehicles were autonomous with no stop lights, the other is making it to the hospital on time to deliver their babies. But that looked like something that certainly would not happen 20 years 30 years. But in 2015 it is president pretty reasonable that it is well on its way for the transportation system. And we already have things like fuel cars in every major automobile manufacturer has a serious program underdevelopment and every manufacturer has a very serious electric Vehicle Program as well. Host so from this discussion you see the you can form your own opinion about what kind of car you will be driving in tender 50 years and we will come back to that subject at the end of this. But the architecture of the book is the competition between china and japan and the United States. Why did you organize and to countries other than companies . Because automakers are multinational and gm sells more in china than the United States. The one of the things that drives technology or the evolution of the auto sector is regulation and it happens on a national scale. So in the case of the United States you have a big regulatory agencies. Host we will go into that. Why did you choose russia or germany . Though largest economies and though world and i can really spoke chinese and japanese. My germans still needs a little bit of work. There is some interesting import substitution. So you talk about china and United States and japan than what may be the most powerful a known agency in the world, the California AirResources Board and the long reach of carter and all important that is. Tell us why youre treated as a separate sovereign. California was subject to a crisis of smog. But nobody knew where it came from. It seems obvious today with industrial and the missions and automobiles but at that time they did not know. From the California Institute of technology did some Cutting Edge Research to figure out that most of this monica in particular was coming from cars. The results was over the next 10 or 20 years 30 years california built up the most sophisticated Regulatory Infrastructure for researching and regulating emissions of automobiles but also other forms of environments. With the Clean Air Act was passed the federal government had recognized that that california was far ahead in terms of understanding the science but also sought to regulate to drive manufacturers to bring new technologies to the market. That allowed california its own emissions. Host so in the 1970s that was a long time ago it has a big impact to date. In reverberates very strongly to the present date. And it is even more impact full that other states had to appear to the strict air pollution requirements of california and that is at the root. Host for reading the book to get the impression that a lot of it comes from california. That is what youre book says. [laughter] i agree with my book. [laughter] host so tell us where we are now. Is it interesting story in general would dash in the 80s General Motors was in a bad place taking over by the japanese with high quality lowcost and in fact, it had gotten so bad that Ronald Reagan made the political deal with the japanese government where they throttled back the number of vehicles in use got a federal dollar bailout then General Motors decided they would enter a solar rays across hills trillion al back to show how cutting edge because they could still come up with the Cutting Edge Technology of the day it was like a weeklong race more than the closest competitor it was an electric car and in they build a concept car and had a huge impact because the regulators drove it and that this was the perfect. Was that they got real . That was the vehicle for runner that many people call it through the documentary but it was the impact that convinced california regulators that the electric car was a viable option and a cause them to develop a set of rules from old much larger package that set out a timeline 40 percent of those sold in california. And by 200310 had to. It teeeight it failed. But there was a builtin review mechanism. If it is working or fit is not. How did the automakers feel about the car . They did not like very much in general. Is the evolving relationship. But in general with the series of cantankerous lawsuits. Host so what is requiring today . To date you have a situation where seven states have bought into zero emission mandates and then it is a server portion of electric vehicles. And then it is enormously efficiency enhancing. Bin that makes it of a strategic decision which is the credits awarded to automakers they to buy them from the automaker but it changes the cost who sells more or fewer electric vehicles. But the model was producing an estimated 35,000 worth of credits per vehicle. So tesla in addition to make revenues from making it was also selling the credits. And still are. Tesla made a 76 million through the credits alone. That is a lot of money it has a big impact on the Business Model of electric vehicles. Of those 120,000 sold last year what version are in california . A lot. And then to get really good numbers it is hard but california put out an announcement november of last year with a partner states had sold to do to the thousand electric vehicles. China is having a conversation five years ago about how they would eat everybody elses lunch. Where they so committed . And then we come back to the question how has it been worked out . It does make a lot of sense. For anyone who spent time in china i know when i go a wake up early and led felt the window and if i can see i put on my Running Shoes because there is a chance you cannot do that for the next 67 days but the pollution there is so bad you cannot get a good view of the building across the street. They have an Environmental Crisis that is similar to the california crisis of the 50s. It is just as bad if not worse. That is the first reason. With chinas economy growing very quickly and that translates to increase energy demand. The electric vehicle is a means by which china can have increased mobility but to me it is the most interesting in the real reason why the chinese are interested in electric vehicles the current minister used to be an audi engineers. Host it is a very interesting story to what he came up with this idea into ready to leapfrog the west into the era of electric vehicles. In to build a system to produce a product it he knew it would be very difficult in the Critical Technologies that china looks to the future with electric vehicles that they could leap frog can command the market is. So this is the Global Player . But what have been is day very quietly prodded back to china and is he like a lot of decisions that came back so they made him in charge of the Chinese Government program for development of leadingedge technology. That is a very important thing. Like nasa in the National Science foundation all rolled into one. And then he was the member of the communist party that made him minister of science and technology. That was unprecedented. It hadnt happened for 20 years. Interact it draws from the central level. So the program will leapfrog has not happened yet . As you read the great race you get the sense china started strong but has not kept the pace. What has happened . They put enormous amount of money into the program there was enthusiasm am propaganda that was underpinning the program. That was the expo exhibit the Chinese Government bin to what is the future going to look like . It cannot be more diametrically opposed. But in california they had already been involved in the tugofwar with the industry so they enter stood what kinds of incentives automakers responded to. At the chinese to the political pressure of the enterprises that are not just ceos but they put a lot of money behind the electric vehicle. In many cities and provinces for the electric vehicle. It has not taken off. That is one of the most fascinating things that propels the industry for word. It is just to get the incentive right. How does japan and how are they doing . So tell us how to pay and got into that game. And the beginning it is a mosaic spoiler for the American Auto manufacturers. There is a lot of pressure of the big three to reduce air emissions. That theoretically was working on technology but they were promptly sued the they were colluding to keep technologies out of the auto market. But they were skeptical of their collaboration. So they turn to the japanese and said we have a huge market and very defined goals what we want you to do is develop the technologies that detroit is not willing to. The son and toyota is like the big three of japan and there were not that interested to get ahead. But honda saw an opportunity they put the best engineers on the project and then to work shoulder to shoulder. But this is the missions she missions. But skipping forward they have a new set of technologies so as to be an became a recurring competitor of a theme with did the american Regulatory Community that detroit cannot do it look to japan and they may provide a way forward. So get this to the electric car. So that a gold comes in the 2000s. In the 1990s the japanese are forced to build electric cars there in not doing with great gusto because they lacked technology. But to the first program. But the specialty is that he started his career at the fukushima and nuclear complex. That is through the Nuclear Accident was in 2011. Into show the japanese there was value to Nuclear Power beyond theyre standards. Is to have an electric vehicle to run nuclear fuel to say this is a great idea but he left his tradition as a respected person to run that he tries to get the people involved. But now that california isnt forcing them to do this to get from a Technology Perspective to build the electric vehicle. Subaru and its vichy not to be chic it with the was a decision that came from the top of the company but individual there who with a big Research Program who loved electric cars and building the response to the California Program if he knew his leadership which shoots him down immediately to develop a new generation of electric vehicles but he decided to secretly built a vehicle in the way. They developed a new ecosystem then they moved to the Planning Organization with a study of electric vehicles. And the end result for japan to remain that cutting edge there have to put serious money on electric vehicles. This was 2006, 2007 that is when the sun got it in a big way. With this gala funds. So if you value rate the race evaluate their race handicapped where it is now. Certainly the japanese have the huge number of electric vehicles. Japanese and koreans are both very good on batteries. Highquality the japanese are little more sophisticated. But to make the argument they would be leading the race to be much further out for the 2011 tsunami and a nuclear disaster. And then to have those resources of of funding for the Program Leadership for japan and then to build the entire program off the electric Vehicles Program but eventually he was put in charge of the entire Nuclear Energy program. And he was not involved of the 10 years of decision that led to the fatima Fukushima Nuclear disaster but the result was when they reached this cataclysmic point to have credibility. Which country would you put into the forefront . And by coincidence his dog is named tesla. [laughter] we will have a few questions the open it to the audience. Tell us of the impact of the testimony. A lot worse than the dog bark. [laughter] tesla is an incredible company. He is the result of a set of technologies which is the outgrowth bin to invent to race across fields trillion eight shot back. Any changes the public perception. Now they have you to the videos with the city and that sits 70 below capacity. With a super cars with eight cylinders it leaves them in the dust because the acceleration is phenomenal. That is hugely important just to shift the perception. As a big proponent. Is only a small part of what we heard about. With the to address the question of the role of government that is a great question. That is the difference with his strategy and tactics. If we confront a lot of challenges. Within touche to a catastrophic Climate Change but said he is said as the strategic guidepost so it is important to think of the strategic mind but in terms of technology the california Resources Board understands that zero emissions option is that does not create a lot of air pollution from our perspective they are pursuing a number of different technologies. But the main focus is because it is quite clear the only technology that brings us at zero emissions that is bad for human health as it creates air pollution that generate Climate Change. Electric vehicles are the only thing that exists. It makes sense to use those strategic guidepost to create those that allow us to drive to that place. In what about those that achieve the goals . Most of them were four related during the stimulus but then to be an extremely compressed period of time. Said you can see those policies in terms of expenditure of funds is much better. Blooded is the goal of 1 million cars by when . We will not make that. Definitely not. I think the deadline was 2017 but the interesting thing was unaware that goal came from. It was far enough away at the time. Guest it sounded like it was formulated for a speech if you would get californias role, we will have 3. 3 million vehicles on the road s