 Good afternoon, my name is Sven Biker. I'm a lecturer here at the Stanford Business School and I also run my own consulting firm which is Silicon Valley Mobility. I had the pleasure to work together with Jim Sweeney's team from 2012 until 2014. We were looking at electric mobility and a lot actually mulling over the question, what is really happening here and even more so what's missing. And so I guess that's part of the reason why Jim invited me today to moderate this esteemed panel here with the question electrification of transportation at scale, myth or reality. And I couldn't help but actually go back into my email and check when Jim asked me last time to moderate a very similar question. It was actually in 2012, six years ago and back then the title was Vehicle Electrification who should care when and how much. And so I can't help but note that the subtitles were very in a very subtle way always pose a question like, really? And I guess that's what we want to be discussing here today with our panel from, let's see, from your right to your left. We've got Courtney Prado-Smith who's Chief Deputy Director at the California Energy Commission. Thanks for coming Courtney. We've got Monterey Gardner who's a Senior Advanced Technologies Engineer at BMW. And we've got John Bozell, President and Chief Executive at Cull Start. And the way how we will run this panel is I wanted to basically frame the discussion with a few remarks, what I see or what I'd like to answer if Jim Sweeney asked me the question, is it myth or reality? And then each of our panelists we agreed to three slides. You can see how the number three gets interpreted a little bit. But I think we'll do a very good job actually to provide a few personal and also professional remarks, obviously. And then dive into discussion. So I prepared a few questions and then we definitely want to make sure that you also have time to ask your questions because we might not be able to answer wholly that question myth or reality. So we might need to rely on you as our guests here today to get into that. With this, what I prepared in answering or at least framing the question myth or reality is the following. So numbers usually tell a good story, maybe not the whole story. What you see here on the left is basically the new vehicle market share of plug-in vehicles. So plug-in, obviously there's battery electrics but also plug-in hybrids. In dark blue on the left you see California. And then on light blue you see the US as a nation. And yeah, we can wave our bear flag and say, great, we are ahead. If you really want to look at the percentages you would see United States today is roughly where California was about six years ago last time I moderated this panel. And still there's something like 2015 in there which I found interesting and I really was digging deeper into it because it was like, what if anyone asked me what happened in 2015 when basically those market shares were dropping? And we saw that gas prices got lower and also the model mix was shifting to other vehicles that consumers started to say, well, you know what, these crossovers, I really like them and the whole efficiency. That's a topic but I really want that car. So this is where we actually see how fragile the electrification field in general but also how emotional the automotive purchase process in the end is. And overall we obviously see the numbers are going up. Are they high enough in order to fight climate change? I think this is what we will get in a great discussion today as well. Another piece where you can say is it myth or reality? Obviously the picture on the right. How many charging stations do we have? We are approaching on a national level the 50,000 mark. This is charging points, not changes or not stations in general. And just to put this into perspective, we have in the United States about 125,000 gas stations. Each of them, you all have been to a gas station I guess, somewhere between four and 10 pumps or something like this. So this is what you need to multiply those numbers with in order to really make an apple-to-apple comparison. So we might have about maybe one million gas pumps as opposed to about 50,000 charging points. So that's just a perspective but certainly the numbers are heading in the right direction. Should it be a hockey stick versus a linear growth? I think that's also something that we will discuss further. That's what out there but really what is coming down the road and there's always a lot of discussion about the technology. How is the technology moving forward? And maybe start with a picture here on the right which is actually, well, how much does the battery cost? And I'm assuming there are many experts here in the room who are very familiar with the number of costs per kilowatt hours which is basically what you see here on the right. Basically how much do you pay per energy unit of a battery? Or in other words, how much does your battery cost? Numbers going down over the years so that it's certainly good. In dark blue you see the individual cell and then the entire battery pack is in light blue. There's obviously a difference. What many people see as the magic number is $150 per kilowatt hour. And if you read the analyst reports you might find that Tesla might already be at $150 per kilowatt hours. Maybe GM as well with a leaf. Sorry, Nissan with a leaf and GM with a bolt. So there's a lot happening in there. And still I want to note, it might not just be about solving an equation where you say, aha, now actually we break even on cost and everybody is going to buy an electric vehicle. There's certainly much, much more that goes into the purchasing decision. And I guess we will be discussing this today as well. On the left, however, you basically see how much more capacity is being installed in industry like producing these batteries. And why we all like to talk about the Gigafactory just across the state line to Nevada where Tesla has their Gigafactory. If you want to look at the numbers here which is comparing in dark grade 2017 to 2020 in terms of really how many batteries can these companies crank out. You see staggering growth which obviously is a bet like these batteries being needed. But on the flip side, this will bring down the cost for batteries further. So I would say definitely pointing in a good direction here that electric vehicles will really be cost competitive. Now at California and this chart might see a little bit of thunder from Courtney so therefore it will be quick. But I wanted to have this as my closing slide because Jim and his announcements for the session today basically said, there's a lot happening in California with Governor Brown at the beginning of the year basically saying California must go even further to accelerate the market for zero emission vehicles and therefore proposed by 2030 we want to have 5 million zero emission vehicles in the state of California. To put this into perspective we have about 35 million vehicles in California for by the way about 39 million people. That's quite a few vehicles for that number of people but that's really a substantial number if you have a seventh or every seventh vehicle should be a zero emission vehicle in California. There's quite some budget committed to this about two and a half billion dollars we might explore on our panel how far we will get with this and pointing out earlier the charging stations there's a lot happening that we want to get to a quarter million vehicle charging stations what it says here and also on hydrogen which I think some of our panelists will allude to as well. So that is just to frame the topic a little bit now let's get to our experts here. Again we got Courtney, Monterey and John who will tell us more from their respective backgrounds and also I guess a little bit of a personal insight what they would say in order to answer the question mass vehicle electrification with or reality with this. Courtney, you want to carry on? Great, do you want to pull up my slides? Yes, let me do that. All right, thanks. All right, well good afternoon everyone. Courtney Smith and the Chief Deputy Director at the California Energy Commission. So the Energy Commission has what I would consider two main roles in the electric vehicle space. The first one is that we are the lead public agency investing in public charging infrastructure and refueling infrastructure. And in addition to that we also are the agency that does electricity forecasting for the state. So that way we know what we need in the future and you can't do that without knowing what transportation electrification demand is going to look like. So we actually conduct the only California specific forecast for electric vehicle transportation. So what you see here, this is actually taken from an analysis we did last year. So the question of this panel is at scale, myth or reality. This forecast is one that's demand based. It also takes into account a bunch of different factors, demographic information, economic information. We look at what we expect vehicles to look at or to look like in the future. So what the cost is going to be, what the range we expect it to be. And then most importantly, it's actually based on customer preference. So we do a really extensive survey of customers and ask them what they would buy. And so based on this forecasting effort, you can see here that we think it's reasonable to assume that in 2030 we expect around 3.5 million electric vehicles on California roads and actually as high as 4.2 million. So what this says is a few things. One, it says we're really confident that we're going to be reaching our 2025 goal, which is 1.5 million vehicles, or excuse me, 2020 goal, which is 1.5 million vehicles. The second thing that it shows is that our goal for 5 million electric vehicles by 2030 is ambitious, but it's one that really impels us to do more. If you wouldn't mind advancing the slide, that would be great. The state has done a lot already to try and make it very clear and send the signal that this is where we want to go. We've set extremely ambitious goals. So Sven already alluded to the governor's recent announcement through executive order, establishing not only vehicle goals, but also infrastructure goals. 250,000 charging stations in the state by 2025 and then 200 hydrogen fueling stations as well in that same timeframe. And just a note on that, those numbers are actually, they coincide with analysis that we've done. So I know a lot of people ask what kind of infrastructure, public infrastructure do we need here in the state? And so our analysis suggests that these goals are in line with what we need to keep the market going. In addition to setting really ambitious goals, we've established regulations. So many of you may be familiar with the ZEV regulation administered by the California Air Resources Board. In simple terms, this sets requirements for manufacturers in California to provide to California consumers a certain percentage of electric vehicles and there's a credit system, it's a little more complicated. In addition to that, we also offer a ton of incentives. The California Vehicle Rebate Program, CVRP, offers for the purchase or lease of a new electric vehicle in the state of California a discount depending on what kind of vehicle it is. In addition to that, we are also providing funding that are funded through cap and trade auction proceeds for both vehicles as well as infrastructure. And then lastly, the state is putting quite a bit to make sure that we have the public infrastructure that we need to make this transition so that way that is not the barrier for why people choose not to drive electric. In fact, the governor recently as part of his budget proposal has put forth $812 million towards infrastructure over the course of eight years. So we'll see how this budget cycle plays out, but very much trying to double down on our investment in this space. And then lastly, we also do a lot of research, particularly around the interface between transportation and the grid. Switching, great. But we're not there yet, right? And that's what this panel is about when is this going to become reality? And I think that if I could sort of summarize how I view the challenges, it really has to do with the need to, and it says right here, to expand beyond Silicon Valley. Now, what I mean by that is when we survey who current customers are of electric vehicles, it's disproportionately white, wealthy, older men who live in this geographical region or similar regions. Now, this particular demographic is important, right? They have the social and economic privilege to be able to be first adopters. And we wouldn't be where we are here in the state in terms of vehicle adoption if it wasn't for that demographic. That being said, I think that now is our opportunity and our challenge is to transition beyond that early adopter market and really diversify the kinds of folks who are driving electric. That means focusing on age, right? We should be out there and focusing on folks in their 20s who are poised to go out and buy their first vehicle. And it's interesting too because it makes so much sense, right? They're a generation that is showing their value system actually really aligns with driving electric or in many instances and myself included not having a car at all, right? So why aren't we out on college campuses? Why aren't we focusing our incentives and our education on this particular demographic? It's ripe for opportunity. The other opportunity for diversification is gender. I saw some really interesting research recently that suggested that women are a primary decision makers in about 85% of car buying decisions. And yet we are the minority in the car industry and this conference actually is a great example of being a minority. When you look at the folks who are presenting here, it's about 80, 20 men to women. And so this is again, just another really great opportunity to bring women into the fold. The other area I think that we could really diversify has to do with housing stock. Almost half of Californians are renters, meaning they have and face really unique barriers to driving electric because they don't have the control always to be able to charge at home, right? And so we are doing particularly at this state really focusing on how do we get infrastructure that's public in multifamily spaces, but there is way more to do in this particular space. And then lastly, and I think most importantly, we've got to figure out how to reach low and moderate income Californians because let's be real, that's the majority of California. A great example of a program that's coming out that's aiming to do this is the California Vehicle Assistance Program. So this is something that is going to be funded through the cap and trade auction proceeds and what they're doing is they're offering grants and fair financing to low income Californians who want to buy a new or a used vehicle. And I emphasize used because that's another part of the transition that we have to make. Most people when they go to buy a car aren't looking for a new car, right? They're looking for a used car. And so really focusing on the secondary market and figuring out how we can make, like demystify that is critical. I actually a couple of days ago went on Craigslist in Sacramento, which is where I live to see what was out there in the secondary market. And I found 12 Nissan Leafs and they were all appeared to be super cheap for the model year that they were. But unlike like with internal combustion engines, right? We have like a little bit of common knowledge around what you need to look for in order to kind of predict whether that vehicle is a lemon or not. And in this space, I have no idea whether a 2011 Nissan Leaf that costs $6,000 and have 50,000 miles is gonna be good or not, right? In terms of how the battery performs and what the recharge is. And I'm in this space, right? So how do we demystify this for folks? I think it's a huge opportunity. So in closing, I would just say that for us to make this a reality, we have a lot of challenges that we're gonna need to overcome. And those really are wrapped up in transitioning away from the focus on the early adopters and really figuring out how we can leverage California's diversity to really expand the market potential, thanks. Great, thanks very much, Courtney. I really appreciate how you put together policymaking and consumer needs, interests and behavior because that's in the end, I guess, what it's all about. After all, we are not just dealing with numbers. We're actually dealing with people who have needs and preferences and so on and might have also certain brand affiliations such as BMW, a company I used to work for, still have very fond memories. Therefore, it's great to have Monterey Gardner here today, Senior Advanced Technologist Engineer at BMW. Please share a few more insights on electrification at BMW. Yeah, absolutely, thank you, Sven. So I've been out of California for about 10 years. I was about five years in DC working for the Department of Energy and then a few years overseas, both in Japan and Germany. So just bringing an international perspective to this panel, I think this question here of electrification at scale, myth or reality is really dependent on how society values carbon, right? So as we march down this path of decarbonization, it's gonna be renewable energy and electrification that's working together to allow us to meet those goals. So BMW has been around for 100 years. We just had our anniversary in 2015. We have over 100,000 employees at 130,000. And in order for us to survive, we're gonna have to be part of this transition and amongst autonomous driving, digitalization and so on, electrification is a core component of what we're gonna have to transition to survive. And so it's not just gonna be the auto manufacturers though, it's gonna be multiple companies within society that are gonna allow this to happen at scale. Let's see. So for BMW's part, right, we've sold over 100,000 plug-in electric vehicles. We just had a big event in December of last year, handing over the 100,000, it wasn't just i3s, but of plug-in vehicles. There's probably close to 30,000 just i3s, all electric that have been sold cumulative in California. So we're pushing this forward. And as this slide shows, looking to the future, by 2025, we're gonna have a full 25 models that are electrified, and at least 12 of those will be all electric vehicles. So it's very clear that plug-in hybrids come first as the bulk of it, and then we'll gradually transition more and more to all electric drive. And so this electrification is gonna happen in stages. And so anything else on this slide? I guess the one thing I would say that our next more exciting vehicles, looking at longer range and bigger changes will be after the 2020s, 2021 timeframe with our iNext, the first level three autonomous vehicle, and then sometime after that for the i4, looking at longer range electric vehicles. So we have a clear transition path in this electrification space and supporting California, supporting the world and getting to this a massive option of electrified vehicles. So how do we do that? So I'm sure people have heard about what are the challenges? Why are we even asking this question? So they're the societal parts. Do people know about them? Try to explain a battery electric, a plug-in electric, and then a hybrid that doesn't plug in to somebody from a overall perspective. Energy is the last thing that people worry about and kind of transportation, how you're getting from A to B. And so in order to do that, there's a big importance to getting people in the vehicles. So I might ask the audience, how many people have driven in an electric car? Okay, so right, it's self-selecting this panel. The reality. Right, reality. We've made it. Mass scale. And so UC Davis, we've been working with them closely. Ken Crony has shown that even from 2014 to 2017 and doubling the chargers, it hasn't changed the perspective in how much charging is needed. And so I think it's really critical to these ride and drives and VELOS and some of the other things that BMW's doing to support getting people into these vehicles. We're also looking at an opportunity to get more of these i3s that come off lease after just three years, right? These are really radical cars, maybe not so much now, they're more than four years old, but they're all carbon fiber body, right? They're 100% renewable energy base from Moses Lake in Washington. We have a wind farm in Leipzig where we are using 700 i3 second life batteries to make sure we decarbonize on the production side. So all of these are coming before we get to the vehicle. And if we can find a way to extend the life of those i3s on the road, I think there's a lot of value. And as Courtney mentioned, right? Finding this way for lower income and finding ways for this to come into, yeah, longer use will be important. So we're doing what we can to encourage that. So once the cars get on the road, the question is, right? What happens when you put, right? Several megawatt chargers on a single distribution node. And as with the last panel, right? The elephant in the room that wasn't asked, right? Why are the CCAs being leaned on is, right? When you're talking to them, they have zero incentive to implement, right? Better use of renewables on those distribution grids, right? They just buy renewable credits. And so if you can find a way to incentivize direct connections between renewable energy, electric vehicle charging, right? Then you can help adopt and get to this mass scale in a faster manner. And one of the ways of doing that is allowing telemodics on the vehicle to communicate directly to the utility who's managing that energy flow, right? Getting to two-way energy flows on the grid is really critical. And that's what Charge Forward is. And it's allowing a dumb low-cost charger to talk directly to the grid. And we're already in phase two. We've been doing this a few years with PG&E. It'll be coming to an end next year. But right, showing that we can take an aggregated load of several hundred vehicles and having 100 kilowatts that can be bit into the electricity markets as a demand response. So this is not vehicle to grid, but just choosing when the vehicles charge as needed. Okay, we'll go to the next slide. Probably over five minutes. So BMW is very focused on bringing all this together. I talked about the i3 factory with the 700 stationary batteries supporting that battery back charging or telematics, right? How are we gonna support the grid? You can't get to mass scale unless the grid is reliable and stable. Next. And as far as decarbonization, right? Is SB 100, who knows here about SB 100? A handful of people. California is trying to get to a 100% renewable energy in 2045, right? This well in advance of any other country that's looking at 80% reduction by 2050. That's gonna take mass decarbonization. And the way you do that, one option is hydrogen for energy storage. And I think in the late 2020s, we're gonna have to start looking at that, getting more hydrogen vehicles in the heavy duty sector especially to allow the renewable integration. I think that's everything. So BMW is doing its part. We are reaching towards, I think more than 140,000 electrified vehicles by the end of 2019. And we're moving forward. Yeah, where we can. So we're happy to work with partners. And yeah, thanks. Great, one more. Thanks very much for those insights, especially with driving machine. We've been doing it in order to lure people into electrification, which obviously is some advocacy in itself. And I think that's a good transition to John Duvall. Looking at what Paulette's started doing, also quite a spectrum actually of activities and directions. Okay, Sven really challenged whether I'd stick to my five minutes or not. So I really am going to very quickly. This is our headquarters in Pasadena. We have 84 kilowatt system. We've been charging, powering our building for more than seven years, powering about eight vehicles every day. 100% of our electricity on annual basis covered by solar and it makes good economic sense. We are an organization trying to promote the advanced to clean transportation technologies industry. So it includes a wide array of fuels and technologies, but clearly electric is a big part of that. Before I go to my next slide, let me just ask you a lot of EV drivers in the room. California gasoline demand, given all these EVs coming into the market, over the last five years, have we seen demand for gasoline in California increase? If you think it's gone, increase, raise your hand. And I'll ask you if it's gone down, raise your hand. So increase, raise your hand. Okay, a little less than half. So people who think it's gone down. Consumption has gone down. Did I say that right? Increasing, okay, good. All right, so next slide. So one more click, Sven. So this is the problem. Last six years, gasoline demand has been rising in California. We are nowhere along the way toward 2050 on the transportation side, hitting our greenhouse gas emission target. We're still going in the wrong direction. So despite all you good folks in the room, driving EVs, me included, we haven't turned the ship around. So right now, unfortunately, the answer to the question for the session is myth. That's the unfortunate answer. So let's talk about why we could be optimistic. Incredible advances in energy storage. The Bolt today is such a much better electric vehicle than my 2011 Nissan Leaf. I don't know if there are any Nissan people in the room, but I may not go back to Nissan based on that experience. But this is the cars out there now are much better. Next slide, please. So we've really got what I call EV 2.0, a car with incentives, 30,000 bucks or less, and it has a range of 200 miles or more on a charge. That's the new standard. And that is a car that I think has much greater mass market appeal. Next slide, please. The other company with an EV 2.0 right here, the largest employer, a clean energy employer in the state of California, Tesla. We ought to be very thankful for all those jobs that they create. Next slide. So EVs compete well when they compete. Anybody know how many segments there are in the automotive, car market in the United States in California? How many different segments are there? About 15, 20, actually, according to the new car dealers in California. So there are lots of different segments. And in a few segments, EVs are really killing it. The Bolt is the best selling subcontact. Tesla best selling luxury high end sports car, much to the detriment of their competitors. And then, but the big problem is right now, we have had a huge shift. The sedan market is in a free fall. And we have this huge shift, once again, to SUVs, crossover vehicles, pickup trucks, and very limited plug-in product. So if we're gonna get to reality, we have to see the OEMs come forward with electrified vehicles in those market segments. That's gonna be a huge part of it. And then just an example of the red is in that mid-sized premium sedan market, Model 3, you can see what Tesla is doing. And as they work out their production issues, they're really gonna be killing that segment. So that's the really good news is that EVs can compete really well. I'm gonna stop here. I have additional comments about the importance of unlocking value and why I hate seeing EV adoption curves thrown up there with cell phone adoption curves. I can talk about that later. Did I do it? Four minutes. Yeah, how about that? Well, thanks very much, John. I think you definitely are on the price of the most slides and the fastest talking. And so I think great overviews here from our panelists. Maybe a good time to actually give them a hand because it was actually awesome. And I'm meant to open this discussion session here with actually digging a little bit deeper into what is in our myth or reality, but in the interest of time. And also because all of you did a great job addressing this question already with your remarks. My sense is right now it seems to be more a myth even after like 10 years of electric vehicles. And let's see how we can bring this to reality. So what do you think in order to reach this goal of five million zero emission vehicles in the state of California by 2030, what actually really needs to happen and what are the barriers that we are facing on that path? Anyone? Courtney. Yeah, I'll start. I talked about some of the barriers. Obviously we don't want availability of charging to be a barrier. Technological barrier is a big one, right? We are pinning and a lot of hopes on the fact that battery technology improves, price comes down, there's economies of scale because cost is a barrier for most people right now. In addition to that and because I come from the Energy Commission, I would say that we're also mindful of the impacts of increased transportation electrification on the grid. Not so much as a whole, but I think as folks in the previous panel mentioned, the localized impacts of those. So I wouldn't say that that's a barrier per se, but certainly a potential negative impact that we wanna to push up against. But I think it comes down to kind of a few key things. Price, which we're doing a lot of public policy around to try and accelerate people adopting and not having to wait so long for price to come down. It comes down to infrastructure, so that way people feel like they can live their lives as they normally would and that this seamlessly integrates into that, not the other way around. And then lastly, consumer awareness. Most people don't even know that it's an option. Anything to add, John, or one way? I think I would agree with Courtney about certainly the importance of consumer awareness. I don't think people, surveys have shown that the awareness about what an electric vehicle is and its benefits, despite a real increase in the number of models in the last three years in California, the overall awareness has not really grown. So I think an aggressive public outreach and marketing campaign is really needed. I think in general, we need to really make sure that the incentives are there and that they're gonna be there for a while to really help boost this market. I think the constant sort of uncertainty about whether we'll get it each year from the legislature is a bit of a problem. So I think the state needs to step up and make a stronger commitment that the incentives will be there. And then I really think we've got to continue to really work on the infrastructure and get more chargers out there. If there are any employers in the room, I think getting a workplace, chargers in the workplace is incredibly important because not only does it help people, particularly those who live in apartments to have a place to charge, but they become sort of a second showroom and they help with that consumer awareness, education. People see their colleagues come to work in EV, they start talking to them. So that's an incredibly important part of it. We have to overall, I think, start moving a lot faster than we are. I think we will start to see some more models come in in the bigger vehicles, but overall the pace is not gonna be sufficient with the current measures in place. So for BMW's point of view, we're participating in VELOS. So this is an industry group that's spending a lot of effort, taking a lot of time to strategically reach out to consumers and find out the best way to spur this adoption. And I think for anybody here who's driven an electric car, once you're behind the steering wheel, it's very different and it's getting them in there. So whether it's ride and drives, public outreach, these are the kinds of things that are needed to raise that awareness. And part of it is just getting people to find the time and get into the vehicle and to motivate them. And so right now we have a lot of incentives coming from California for the federal government up to a limit in the number of cars. So in the coming years, those dialogues will have to continue. But one of the, I don't know if it's an unintended consequence of that level of incentive. If you have $10,000, $20,000 incentive is coming for these vehicles, what does that do to the resale market and how do you find a path to getting these on the road and keeping them on the road? This battery life, the health of the vehicle, how is that communicated in the secondary market? So I think there's a path forward but as the other panelists mentioned, again, the price, awareness, and then infrastructure. Using the infrastructure you have giving it the most utilization possible and trying to find that business case. The various settlements and the various incentives for infrastructure aren't gonna last forever. We want this to be a self-sustaining market and that's finding the best way to use that infrastructure and charge forward is one way of doing that. And with more communication, 5G coming, connecting a person's schedule to the charging with real-time mapping, all that works together to get better utilization on the infrastructure. I think, Monterey, you really made an important point. These incentives don't last forever. And we obviously have quite a history instead of California of yellow stickers and green stickers and white stickers. And I'm still trying to figure out what the red stickers are. Maybe someone can explain to me later on. But how long do these incentives need to be out there so that consumers really make a sustained, well, I mean, time-sustainable, long-lasting decision instead of just taking advantage of like, well, this year I buy this car and I get the incentive, that's fine. Because in those numbers that I showed earlier from 2015 where I was dropping, there was, for instance, in Georgia, when in Georgia the incentives went away that the people shied away from electric vehicles. So is it like five years, 10 years, 20 years that you need to have incentives to really change long-term consumer behaviors and beliefs, quite frankly? I was just gonna jump in with one point. So in Southern California, they've already, I think, disallowed electric vehicles in the HOV lane. And if you talk to anybody in the area, right, that's one of the biggest incentives, probably for the people in the room to own an electric vehicle. So it's already leaving the incentives. So, Sven, maybe just to go off on that one a little bit. So one of the benefits of the 50th anniversary of Earth Day, which occurred earlier this year, I watched a documentary. And the largest single day of protests in the United States occurred on the first Earth Day. According to the records, that 20 million people got up and demonstrated around the world, around the country. You, on this whole issue of climate change, when do you hear about protests and campuses these days? When is there, when are people really kind of taking the street? The governor calls this as the existential threat of our times. We had in the 1970s, the Cuyahuga River in Ohio for like the 18th time caught on fire, because it was just a dumping ground for industrial waste. You could see the air, the smog in LA in Pittsburgh. You had President Nixon, a Republican, sign the Clean Air Act, sign the Clean Water Act, sign the EPA, create the EPA. And then you had Governor Reagan creating California Air Resources Board. But those pollutants, and we said what we said was you can't dump into the commons. You can't dump into the rivers. You can't just dump into our air sheds. That's no longer good. We can't allow that. So now we're in this situation where you got this invisible gas, CO2, going into the atmosphere. But we're treating it the same way we treated those rivers and the air sheds. It's a dumping ground, and people can do it without any penalty. So I think that we need, and unfortunately, it's like, do we need a whole change in public attitude, education? I don't think the politicians at the federal level are gonna drive this thing. I think the people have to drive it. So I'm just throwing that out there as a question. Is that what's really needed? Is a citizens-based movement similar to what we saw on Earth Day, 1978, 68? And any thoughts how we can get there? I mean, I observed, let's say, in 2007, 2008, when many things came together, which was really climate incidents such as in 2005, Hurricane Katrina and Rita, and then also in 2007, oil prices going up, and then people really flocked to buy hybrid vehicles. Is it really more of these almost external factors, much more than like, here's $7,500, and good luck with your electric car? Is it that we need this perfect storm to really get mass consumer adoption? I think that incentives are not looking at the system as a whole. It's society's value of carbon, if I come back to that. So if we decide what it costs to drive a vehicle, or if we have toll roads, if we look at what, already the Bay Area is looking at, what's the cost of sea level rise? What's the impact on those communities if we look at some of the lawsuits that are in the media? And so we're moving down that path and how fast it goes is gonna be directly in response to how citizens and society perceive that damage. So whether it's the wildfires, the flooding, all of this has an enormous impact and it's just the time delay between people react and what damage is coming is gonna kind of answer that question and how fast. According. So my background actually is in public health. I focused on public health and got my degree at Berkeley specifically focused on the health impacts of climate change. And the reason why is because I didn't feel like people were ever gonna respond to climate change unless it actually impacted them, right? And so that's the problem here with greenhouse gas emissions. It's this ethereal thing that happens globally and the decadal process is hard to really factor into your decision-making. So while I continue to hope and advocate for folks to make actions based on a value system that cares about the environment and its intrinsic value and can make those long-term decisions, science says that human behavior doesn't make decisions that way. We are short-termed in how we make our decisions. And so things like state incentives to bring down the upfront cost of a vehicle are effective in changing behavior. Now, the question of course remains how much do we need, how long do we need it? And that's part science, part art. And I will say that the state continues to evaluate the level at which we offer incentives to try and continue to move that needle. But it's not easy and I think it's important to really remember that we are not homorational, right? Like we are very much emotion-driven in our decision-makings and car buying is not that different. I mean, there's been a lot of research that's shown that even when you try to educate people around that over the life of the car, when you factor in how much per mile you pay for electricity versus gas, you'll be saving money. People don't care, it's not sexy, right? So we really need to start to focus. If we want to get it scale, we've got to start recognizing how humans make decisions and really catering to that. I think the homorational, it's a very important point. Before we go to questions from the audience as well, I want to talk a little bit more about the supply side. So I think it's very important to note that the demand side, our consumers getting behind it, our consumers interested in these vehicles, but on the supply side, and we heard already a little bit about the infrastructure and the utilities. And then I'd like to discuss a little bit more what needs to happen maybe also on, especially bringing different players together. So vehicle manufacturers, utilities, other service providers, maybe retail businesses to actually install charging stations and this. And if I may maybe start with Monterey because you gave us quite some interesting examples and I know that BMW has worked together for quite some time with PG&E. Tell us a little bit more like usually the automotive companies are always called to dinosaurs and the slow moving companies. What does it like to work together with quick and very nimble utilities? So I mean, coming back to that previous question and transitioning, it's the policy. So that million dollar, several million dollar grant from the CEC is what enabled this partnership to start up. So if we didn't have that California direction and policy, we wouldn't be where we are. But BMW is an innovative company and we're always looking at ways to make this work better. And so that telematics, I think there's maybe one or two other auto manufacturers going in that direction, but it's definitely a future that I think all of the auto manufacturers are moving towards as we get closer with the 5G coming, ubiquitous in vehicles. But working with PG&E has been great. My colleague, Adam Langton is the project manager. He sits a few desks away, but he's I think very appreciative and we're already talking about what are the next steps that we can go to after the second phase? So yes, they do have this reputation as being slow and like dinosaurs, but anybody know how fast CBC works on rate changes? Okay, so you can correct me, right? If it takes five, 10 years for rate change to come through and technology with solar panels are going faster and if people may know about the duck curve, right? How can auto manufacturer work with the utility if their hands are cuffed by the CPC and getting the right rate incentives, right? We heard about rational human beings and we need that real time pricing being up in front and center to the consumer to make those changes. Is that something maybe, John, what Car Start can do like pull the strings in between utilities and car companies and the likes? We do a lot of work trying to bring people together and operate programs and there are a lot of opportunities. I will just say that I think another key driver and all this is a regulatory measure that there's both the federal vehicle efficiency standards and the Trump administration's trying to push those back. If we can hold those or maybe make some minor modifications, I think that will continue to drive the market forward. California also has its own ability to set a zero emission vehicle requirement on the automakers. Colorado just this week decided to sign up to that program. So now there are California and I think 13 other states. So that's a pretty exciting development. The state's in the process of figuring out what those targets should be post 2025, starting to collect data and information. So that's another key regulatory tool that the state has to help drive that change forward and help encourage more vehicles, more plug-in vehicles to the market. Okay, I just want to see a question from the audience. If you don't mind coming to this microphone here maybe and whoever's first come first serve basis, please bring your questions. So I thought about Volkswagen Eagle because I looked around at some of the other cars I couldn't afford a Tesla, but I wanted something that was really nice looking. And I have to say that a lot of the cars that are on the market now are a little bit clown carny, car E, like, so getting to that sexy. And I know that the Tesla engineers actually had in mind making their car look great and have people want to drive it. So how can we like start to talk to manufacturers about making it a little bit more fun, not as goofy and kind of obviously a climate car? Compliance car, what? So I think it's gonna take time, right? It was looking at the energy density, right? Making sure that that car is affordable, right? So if you look at, does anybody know what the Tesla three was offered at and what it's actually being sold at? Yes. It's 2X, right? So if you wanna do mass market, you wanna sell, right? Hundreds of thousands of vehicles, I misspoke earlier, but we're getting to 500,000 plug-in vehicles by the end of 2019. And that means transitioning from plug-in electric where it doesn't look a lot different, looks normal to all electric, but we need the cost to come down, right? To make profit, that's really important for BMW, maybe not other manufacturers. And it's also really important, right? To have a car that's fun to drive and you need that technology balance and the design. Can I just add to that? Yeah, please. Obviously I don't work for a car company, but just from what I've observed, I feel like it really depends on the car company. So in Sacramento, I went to my local Audi dealer and they were also had a Fiat lot as well. And the Fiat was, I asked, is this popular, the electric version? And they were saying how the electric version was way more popular than the internal combustion engine version, but visually you couldn't tell the difference, right? So they had figured out, and I had asked them, they're like, we're not gonna manufacture a car that we don't wanna put our Fiat label on. So it needs to look good. And in fact, it was identical. So I feel like that's kind of an interesting experiment because you have a car that looks the same, it looks the same, and yet it's at least where I live, way more popular, the electric model than the non-electric model. So I do think there's something to be said for, again, it's we're emotional, right? And cars are part of American culture and we wanna look good when we're driving. So we've gotta make sure the cars can fulfill that need. Yeah, and it really seems to be almost a holy grail in terms of, on the one hand, make it look like a normal car. On the other hand, make it stand out like, I'm one of those who believe into it. And I personally find observing how Toyota's designing the Prius with the very first Prius, like the second, okay, third getting there. And now the fourth version, I think that we see. Let me just say interesting. But Tesla has done that. That's right, yeah. Next question. Yeah, so I went for the BMW i3 for three reasons. One was, of course, going in the diamond lane, also knowing that the BMW, the performance is gonna be great. And they also had this mobility program, which also attracted me. So if I wanna go to San Diego, for example, 600, 700 miles, I can get a loaner car from BMW because I own an i3 and I could go to San Diego and come back. So, and by the way, just to let you know, I've loved that car. Okay, good. Go for another one pretty soon. Very good. So that was one. I have a question for Courtney. DC fast charges, which are 440 for DC, there's not too many. That's right. 220 volts, so is there any plan? Yeah, so the short answer is yes, there's a plan. The part of the governor's goals includes a focus on DC fast charging. Right now we have about 1,800 DC fast chargers here in California. We wanna get it to 10,000, that's the goal. And so over the course of the next eight years, as I mentioned, the governor's budget is hoping to put around $812 million over the course of the eight years in infrastructural loan. A big part of that is DC fast charging. And we're really gonna be doing it in a very targeted way. And the other thing I should mention on infrastructure investment is there's a lot of private investment, utility investment, settlement monies going this space. Local governments are working in this space. And so we will really be trying with the state money to look at that landscape and target our investments to fill the gaps, right? And DC fast charging is, I would say, a great example of that, to make sure that there are interstate corridors that not only have it, but it's sufficient, right? You're not standing there and waiting in line when you're trying to go down to LA for the day or whatever. So yes, it is absolutely part of the plan. Great, and thanks for sharing your motivation buying the vehicle, which really shows that it's not just one thing because it's electric, I'm buying it. There's more to that. One more comment, my younger son says, hey dad, you've got a spaceship. Okay. Which makes you pretty cool. Next question, please. Yes, one observation. And that is the three of you all talked at one point about the environmental costs of the carbon economy. And this seems to be the key that we acceded this. And one of the things that we perhaps ought to be considering more carefully than we have for some time is a carbon tax, a revenue neutral carbon tax. That would change the relative prices of electric vehicles versus internal combustion vehicles. And as any economist can tell you, changes in relative prices have a big impact on demand. So I want to get that point out there, is that there have been a lot of studies on monetizing the costs of carbon pollution. And if we can make the case for revenue neutral, that is we take the carbon tax and then we offset the revenues of that carbon tax by reductions of other taxes. Say the California state income tax, federal income tax. Maybe we can make a case. The other thing is that you haven't really addressed except tangentially the real elephant in the room as far as the demand for electric cars. And that is, although Courtney did partly when she said that the government, the state government is emphasizing fast charging. But right now, with my Ford fusion hybrid, I can drive down to LA and back to Bakersfield on one tank of gas, fill up the tank in 10 minutes, and come on home. Now, what kind of electric vehicle and when will even begin to approach that? And by the way, that's a nice comfortable sedan. It's not a tiny little- And anything that we see in the future that can beat that from Bakersfield to- Or even begin to approach it. I mean, you've got a 240 mile range. So that means I can get a little more than halfway to LA before I have to stop at a charging station. So let's see, let's hear your experts. Thanks very much. And also carbon tax, political suicide. Question mark. That's a different panel. Right, right. But maybe I will just comment on your first point. Obviously the state doesn't have a carbon tax. We have a cap and trade program, which is a market mechanism. Last year, the year before, it's all blending. The transportation fuels were brought under the cap. As a result of that, we estimate that it's roughly translated into a nine cent increase per gallon in terms of- But gasoline tax in general, right now, right in California is a very contentious issue. There are a lot of people here in the state, particularly low income people, who that really impacts. So figuring out sort of the balance and the trade-offs in terms of how do you change behavior, but also don't penalize folks. And there's an equitable perspective. That's a tough one. But I will just say that with the state does have, we do have a program that tries to put a price on carbon. All right. John, one way. Yes, go ahead. Okay, so just on that question, right, when are those cars coming, right? And it's directly proportional to cost and right how far you can get. So electric cars can get about half that distance. And more is possible, but right, it's gonna take more technology advances. But for BMW, right, it's the plug-ins, hybrids, plug-ins, and then electrics. And then when consumers ask us, when people are ready for that range, then hydrogen fuel cell vehicles, I think are that long distance option. John, will you agree? So I think we should be thinking about when we get the politics to change nationally about a carbon tax. And I like the revenue neutral. I think it needs to be done in conjunction with all the other policies we're pursuing, particularly because the carbon tax doesn't filter down to a price per gallon. That's really that meaningful. It can impact a lot of the other sectors more quickly than it will transportation. I just want to call out that this governor exercised some incredible political leadership this year and got the gasoline, or last year it got the gasoline diesel taxes increased, adjusted for inflation. They haven't changed in price amounts since 1993. He was able to pull that off, get two-thirds vote. The oil industry, hopefully not Shell participating, is gonna, as a measure on the ballot in November, to overturn those gas tax. So I hope everybody's aware of that and we'll go turn out and reject that proposition. All right, lib it off, political statement here as well, but why not? It's an open forum. Please, I have four more and crisp questions, maybe. Steve Cattivore, one answer to this question is probably Al Gore saying, inconvenient truth. I think so, yeah. Yeah, so therefore, those who really want to have all the time convenient must face inconvenient truth. Right? My question is that federal government or state government sometimes really go into the trouble of helping people to buy their houses by funding or contributing into the first payment and so forth. Well, we started the discussion saying that we have to go beyond Silicon Valley. So what is the bold movement from the government entity come by and saying that those who cannot afford buying, let's help them. Great, thanks so much. I mean, it's great if a Tesla buyer gets $7,500 tax breaks, but what about the second hand market for a leaf that's a 2011, sounds like a good deal, but do we know if it is? So what can be done in order to... Yeah, I'll comment on that. So we're actually trying to explore a whole variety of innovative ways to get low and moderate income folks in these vehicles. At the beginning, I mentioned one of them, the California Vehicle Assistance Program. This is offering, in addition to CVRP grants and fair financing for folks to be able, who qualify as low income to be able to buy both a new or a used EV. So it doesn't have to be a new one and I think that's really critical, but there's other ways to allow that population base to really benefit from this. We're investing in electric vehicle car and ride sharing, particularly in disadvantaged and low income communities. We're also piloting electric van pooling, not only in urban spaces, but also in the agricultural space because a lot of folks who are the migrant farm worker population, they really benefit from having that to get from one place to another. But there is more to do in this space for sure. And that's one of the areas that we continue to evaluate. Oh, I should mention too that with CVRP, we offer more money for folks who make less money to try and help bridge that gap, which at this stage is necessary, but not sufficient. So there's quite a bit happening. Would it be fair to say it's also trying out things and see what sticks and then always you need to revise, I guess. Yeah, this is partly experiment, right? Figuring out how you change people behavior is no easy task. Great, thanks. We have three more quick questions. Yeah, this question is for Monterey is relating to BMW safety issue. I am an owner of BMW 3 Series and I enjoyed the driving except about a month ago, while I was driving on Montego Expressway right at rush hour, my car stopped while I was driving without any warning. And actually it's still in the dealership today. And I've tried to get some data to understand what has happened and not so helpful from the Monterey dealer. I wonder if you can help me to get some. There might be an offline conversation. If you don't mind, we have two more questions. The other question is, when we shift to electrical vehicle, then the engine starting issue, does it improve relative to the conventional gas engine? It's because I need some data to boost my confidence in BMW. I need to make a decision on what is my next step. Am I going to keep this 60,000 mile vehicle or I need to change to a different one? Then what kind? I like to go for a more environmental correct one, but safety is the most concern to end consumer. And I happen to be unlike enough to experience the experience, but lucky enough, there was no injury or accident. Okay, since we made voting recommendations, let's make purchase recommendations. Yes. Do you want to comment briefly? We are running out of time. Right now, I think we can talk offline about that, but I think for the auto start-stop, I didn't quite understand the question, but I mean, that will reduce wear on the engine and it's important on the emission side, but we can talk more about the vehicle and the challenges you've had. Luckily, I'm a volt driver, so I won't be bothering you with that. So I think one of the elephants in the room that we haven't talked about about electrification at scale is China. And I'm really curious especially when you think about, I think Monterey, this is particularly for you, when you think about the supply chain and the fact that you're building up the whole EV supply chain today, and a large part of that is catering to the Chinese market, how does that sort of interfere with your plans or does it complement perhaps your plans for California? Thanks. So I think that question of scale in manufacturing and supply chain is critical, and China is somewhat following the ZEV mandate. As you look at the ZEV mandate moving there and then to Europe, you need those bankable policies for the auto manufacturers to come into this new transition of electrification. So yeah, I agree that it is helpful in reaching that. Last question before my closing question. Last question. Yeah, hi everybody. I missed the first part of this, so forgive me if this was a question that was already discussed at length, but for the last few years, I've really been looking at the intersection of electric and shared vehicles and believe that there's a huge potential for vehicles sharing to kind of overcome some of these problems that were voiced earlier. I'm thinking particularly Courtney, your comment about human irrationality, and I think that's 100% agreement when it comes to a personal purchasing decision, but when you're looking at a fleet purchasing decision, the economics really work in favor of heavily utilized electric vehicles, and I just wanted to know if anybody, the others had comments about that. So your academic colleagues at UC Davis are pushing the three revolutions, the shared, automated and electric. Professor, I think you're talking about a two revolution, the shared and electric. And I do think in the near term, hopefully we'll see a lot of that. There's a bill in the California legislature right now trying to mandate that the TNCs move in that direction. It's a little tricky since the transportation network companies Uber and Lyft don't own their vehicles. So how do we do that? How do we create incentives? We are really interested in working with the energy commission in targeting some of the infrastructure dollars so that there can be those clusters of the DC fast chargers in areas where the TNCs tend to operate, they're high mileage drivers. So providing that incentive so that they could have kind of like a gasoline station type experience and we could see more. So I mean, if we can get more of these in the hands of these high mileage TNC drivers, I mean, that would be fantastic. So we really, we ought to be trying to make that happen. Anything like reach now, maybe? Yeah, reach now. I think at the end of the day, there has to be a sustainable business case. And I think if you look at costs per mile in areas like San Diego and parts of PG need, depending on what rate you have, you're paying more for that electric vehicle, right? Oftentimes we talk about wholesale electricity prices, not retail. So you're paying more per mile. So you're forcing these companies to lose money. And that's the second item is utilization, right? How many miles can you go on a single charge? And can you get the same use out of that vehicle if you're working back to back? The really good news is we now have options. When you have cars with 240 mile range, now we can really have that discussion. We couldn't have it with the early Nissan League. So that's the exciting thing. And I think the trajectory is downward in terms of price of batteries, which is really good. And there are some great companies that are in stealth mode here in the Bay Area, companies that have been invested in, and that could be a real step function change in terms of battery performance. Courtney. I was just gonna add, we kind of had a greatest panelist before this to keep the medium heavy duty space off the table because we could talk about that all day too. But I think in terms of automation, I mean, we think about the extreme, which is the self-driving cars, but of course there's all these iterations in between. And I think the medium heavy duty space is one of those areas where, trying to electrify, but also having intelligent transportation systems is a huge opportunity. But maybe we can talk about that next year. We might do this. Maybe it's a closing question, just real quickly because I want to give everybody of you the opportunity to close this discussion. Maybe with the recommendation what the rest of the nation can learn from California. Because we've been talking about California quite a bit and we saw in some of the numbers earlier that the US at scale is at a different point in this. Moment. So what can we really recommend from here, from California to the rest of the nation? Maybe a quick closing statement. I would say the political courage to set in place the right regulations and find the revenue to provide the incentives and get the charging out there. Thank you. I think it's really important to have stability, right? So if you look at how long the Zeb mandate has been pushing to get where it is, right? Industry needs bankable policy. It's gone through courts before they can make that decision. So we need something that's long-term and not gonna be yo-yoed back and forth from the federal government. According. This is a tough one, because they just took both of mine. But I would just add to that that I think something that other states can learn from California is that, we're an advantage, right? Because we're one of the largest economies in the world. But that being said, I think there's something to be said for being able to act locally. And California shows time and again, whether you're talking about renewable energy or energy storage or electric vehicles, that we can do this, even in the absence of federal support. Certainly our governor has been a leader. I'm hopeful that our next governor will continue to carry that futon. But the world is watching. So, yeah. Great. Thanks very much, Courtney, Monterey and John. And I think we'll be around for a few more questions.