 Hello everyone, my name is Peter Harop. I'm chairman of ID Tech X and I've got the privilege of interviewing BYD today and Perhaps you could explain your position Sure, my name is Michael Austin. I am the vice president BYD America, which is a wholly owned subsidiary of BYD corporate I've been involved with almost every aspect of launching BYD in the United States Mostly involved in promoting products that they already developed in China and using that giant Consumer leverage that's going on there to access products that would make sense in the US So we have containers of Batteries that are energy storage stations that have inverter bi-directional inverters and storage to do micro grids and frequency Reg we've had a very good business of that. We have we now opened up two factories in the US We were the first Chinese vendor to the first Chinese vehicle manufacturer to dare put their feet on American soil In California, we launched an electric bus manufacturing site Lancaster is Lancaster. Yeah Lancaster, so it's the northern part of LA County and we now have a thousand Americans designing Manufacturing American made buses from and I think it's 79 percent American material So the parts that we do import are the raw cells from anyone would have to import materials from China if it's cathode or anna, but We import that we manufacture modules in in Lancaster as well in a separate factory It's an American company called BYU energy and I use those batteries for Selling to the the coach and bus team, but I also use those battery modules for for any kind of energy storage in the US Oh, that's interesting, but it's all big grid storage to date hasn't been Yeah, okay. Okay. That's very interesting from the point of view of ID tech X. We are Looking very independently at things and we've always felt that there is a great link between micro grids mini grids off grid and Distributed power and the electric vehicle in a way an electric bus and electric truck is a Micro grid and it was interesting to see how Tesla did merge with its sister business of solar panels, but and that is Not initially for vehicles tall But we did feel we had to write about how BYD If I have it correct you were already in solar and you also even I think do some wind turbines So we we've done we've done all types of renewables and our vision is really to start with low-cost renewable Make it relevant make it firm and dispatchable to the grid with environmentally friendly storage Distributed storage on the grid and then deliver it responsibly to electric vehicles or LED lighting systems and buildings and That ecosystem is we call the zero emission ecosystem. You start with renewables You make it relevant to the grid you deliver it to vehicles and that system of products is what we've been focused on developing in the US We're focused on high utility vehicles So anything that has 18-hour service every day warehousing operations for close right Airport operations tugs, you know like LAX where they're operating There they're actually going to be testing some of our product waste management even that run all the time picking up garbage We we feel like that's a great application street sweepers Drage vehicles moving from the port. So the ports are in operation 24 hours a day. Yeah, those Off-road applications generate a lot of pollution. Yes Because they're they're consuming diesel fuel and burning diesel fuel 24 hours a day We feel like if we focus on those high utility applications We have the biggest payback because it's offsetting the fuel cost and maintenance costs But environmentally it's a huge win so Tell me about energy storage Tesla's done great things. We greatly admire Tesla, but some Panasonic is really their battery technology is your battery technology your own or what so it is it is and You know, I worked at Motorola 15 years I bought Panasonic batteries the NCA chemistry is a great chemistry very high energy density and I would say it was Commoditized years ago the 18 650 cylindrical cell that Tesla launched in their Roadster and used in the Tesla S Very commoditized. That's why they selected it. They wanted a very low-cost platform to launch Unfortunately, the chemistry was already very mature There wasn't a whole lot of energy density improvements appearing and material improvements that already incurred so that there was a plateauing that I think Elon Felt with the pricing the only way to get beyond that was an equity investment So what did he do? He did a capital lease on the Panasonic equipment and built a factory in Sparks, Nevada Now it's still a Panasonic giga factory It's Panasonic engineers. It's Panasonic at least and it's a great chemistry Yeah, and he's done a great job integrating that chemistry and with his other integrated components and a beautiful design in the Tesla S model 3 and Now having success, right? Okay, you asked about energy storage, so well generally could I ask one move one thing forward on sure you make sure Interrupting rudely, but no you mentioned rage trucks. You might mention buses and in China Both of those there are examples of them running on super capacitors not batteries at all sure and that's fairly standard for automatic guided vehicles and new developments in super capacitors Seem to promise some rival with the little light lithium-ion batteries. What's the view of BYD? so on on a Vehicle that operates 365 days Super capacitors, especially if it's in route daily charging Super capacitors don't store energy very long. They're there. They're right They're immediately dissipating energy from the minute you charge them. Yes, so the vehicle has to consume their energy immediately Super capacitors are great if the vehicle is in operation immediately after it's charged But you can't let it sit over the weekend. Yeah, it won't have energy when you ride back So there's a combination Super-capacitor chemistry the lithium-titanate right it it has a similar fast charge capability a Propensity to hold enough storage for 24-hour service But what people have found is that super capacitors and lithium-titanate are extremely expensive and when you Size it so that it can at least do a 30 mile range Then you're adding infrastructure and if you're doing a 500 kilowatt or a 600 kilowatt power transfer like Tesla does Yes, that's that could be upwards of a half a million dollars per site to do that 600 kilowatt charge During the peak hours so you might have some off-peak charging But you also have on-peak that any time you do that on the grid you have demand charges Yeah, that you now have to navigate which can be 80% of your electric bill So what we've tried to avoid is peak time charging Yeah, if you create a vehicle like a drainage vehicle with enough battery to Run 24 hours, but then charge off peak or charge on the rates of the lowest or charge on the utility feels like they need To to get rid of some excess energy if you create a system like that then that flexibility allows you to access the lowest cost Okay, energy and the lowest impact the great. Yes, right But there might be advances. Do you make? Oh, absolutely. Are you working on super? So B. Y. D. Manufactures a whole bunch of different chemistry. Yeah, we manufacture for vehicles. We manufacture nickel manganese cobalt No, that's batteries. That's batteries and we manufacture iron phosphate batteries And we manufacture 1.5 million battery packs a day for of lithium cobalt oxide, which is again And then in the super capacitors and the other we have research development because we do a lot of informatics for vehicles There's a lot of capacitor technologies to balance High-rate transmission. Yeah, you're an advanced user, but not a maker necessarily Well, we have some we have some advances. We haven't done it for Vehicle, yeah, okay. Well moving on. Do you do your own power electronics? Are you in the world of silicon carbide gallium nitride? Have you got an attitude to gallium oxide? So the answer is yes, we have a six-inch wafer Fab and Ningbo and we make all our power MOSFETs We make our own iGBT's for the vehicles those iGBT's become Bidirectional inverters so we use in all of our vehicles and the unique thing about all of BYD's vehicles is that we deliver direct AC to the bus to the truck We we don't have a charge cabinet that converts to DC that's separate from the vehicle We made the investment. We made the investment because we have asynchronous in wheel hub motors We need to take regenerative braking and convert it anyway Yeah, by making it so that we added a little probably a little larger Bidirectional inverter in the vehicles. We've enabled now that vehicle to Generate power so many of our vehicles will have a button that says discharge and when you press that it energizes the port That was the AC 40 volt three-phase port so that you can now Remotely power something you can power a building you can power you can charge another vehicle vehicle to vehicle assist So the approach BYD took was Let's let's bear a little more cost by directional inverters It didn't end actually end up being warm because we threw up throughout the scale it reduced infrastructure cost because every Tesla supercharger Has a 40 volt three-phase Connection we just need to Adapt our connector. Yeah, so everywhere that Tesla has a supercharger. We have access to AC so supercharging for BYD just means Accessing high-rate AC and that standard is already in place Across the whole United States across the UK in across Europe across China So high rate charging for us is extremely simple, right? Whereas our competitors have always put one more stack one more middleman and you actually showed it on some of your slides that Those were going away The middlemen were going away. We agree with that and and having the vehicle Generate or convert its own power right right is is the next step in the illusion as you said your electric powertrain is agnostic it can work with Regenerative suspension. Are you in is that something you're bringing in perhaps? So I believe that the technology that we're focused on right now is Increasing the high-rate efficiency in wheel hub motors. So we have a secrecy asynchronous motors in wheel In wheel at the moment you're near wheel. No, they're in wheel the buses are all in wheel hub motors Okay, and so what's great about that think about this? When you're transporting lots of people you're always concerned about loading times Right and on a standard diesel bus you got four steps up till you get to the driver and you have to stick the fair end, right? We're now delivering buses that have a nine inch step and it's flat floor throughout because if you remove the axle You remove that drivetrain you move much freedom. Yeah, you have freedom to put the aisle below the axles I know people even yes, so it's it's disabled friendly. It's elderly friendly loading It's is by far the easiest we delivered bus a bus to Indianapolis We have 60 foot articulated buses that carry 120 passengers the doors or the buses in At Indianapolis have the buses have five doors. They don't have a fare box Everyone that gets to the platform already is paid with their mobile phone when the doors open It's instantaneous load. Yeah in one minute. You've loaded a hundred and twenty passengers very efficient Yeah, extremely efficient and it's on a platform. They don't even step up The buses have side wheels that actually align it. They step There's an inch gap the platform is the same height as the floor and it's flat floor throughout make your own motors And what type of motor are they so they're asynchronous and they're they're all we use We use In China we have They're all they're all rare earth metal Permanent magnet motors the asynchronous is no permanent magnet. What's that asynchronous would be no permanent Magnet, you know, they're they're they're using they're using a permanent magnet a very rare earth metal And it's it's a very efficient motor there, but they're They're independent wheel hub motors for the buses. We've adopted them and several of the vehicles We don't have a consumer vehicle today. That is it in wheel hub. No They're all still drivetrain because we we could use the same to go all-wheel drive In fact, all of the vehicles that we've launched this year Follow a five four two initiative five meaning it drives under five seconds from zero to a hundred kilometers per hour Right, right. So that's the first the second is for which is all-wheel drive all-wheel drive They're all motor driven all wheels are motor driven and then two that it would consume if it's a hybrid It would consume less than two liters for every hundred kilometers travel. Gotcha. Yeah, so that standard our engineering standard five four two Has allowed us to really drive traction control and all wheels the performance is really Increased a lot of people are moving towards solar body work Tesla said it's going to adopt it so Toyota says it's Pursuing it It's being brought out by Sono motors and light year next year and energy the year after and we've heard about Hi, wouldn't die moving that direction. What's your attitude to that? Well, the very first mass production plug-in hybrid ever launched three years before the vault Three years before the plug-in pre-use had a solar panel on top of it. It was the f3dm Yeah, but so the body work. I know but this was this was in roof solar Yeah, so be so be white. He's been doing solar panels and we've got a I think more than two gigawatts of annual capacity And just solar that's polycrystalline polycrystalline. There's some monocrystalline We do a dual glass system with a dow corning seal. That's that's a very thin product It has a it's the only panel. I know today that is TUV certified for 40 years So our approach is again to focus on the mass market applications Yes, yes, and and we believe if we help the utilities move to cleaner energy in scale Then everyone's a packed it by the grid and if we help all of our Utilities get cleaner energy then everyone that drives an electric vehicle is immediately adapting that energy because those are energy agnostic platforms So we look at helping the utilities convert to cheaper energy cleaner energy There's several there's several utilities in the US now. They're buying three and a half cent solar plus storage PPAs power purchase agreements, but we've seen a lot of buses in China with solar roof. Yes Yes, you do that. Yeah, we're an option. We actually did that and We launched the first bus that I brought across the US to be tested. We had full solar panels covering the roof The customers actually when I say customers you would be transit companies Actually didn't like it. They have automated bus washing systems that didn't accommodate Solar panels on a roof. It was a little there were maybe their little too robust and they had issues with You know, they had to have it clean They had to have it and it would generate enough power and these are polycrystalline. Yeah, yeah, yeah to offset the AC load Yeah on a hot summer day But in city it was shaded when we drove a downtown LA most the bus was in the shade as it drove along You weren't getting the full solar Full solar radiance didn't make a lot of sense. So our customers asked For that expense to be removed from the buses and we never lot We had buses is shipping and since Shenzhen that had solar on the roof for a time. It's completely capable. It's completely Yeah, and I would see a future where where we had off-grid transit centers in Africa That literally powered their own Carriage Yeah Stored the power in batteries the buses would come pulling in and be charged and we could build this entire system a 10 bus system For $13 million off grid completely off grid off power, right? Yeah. Yeah. Yeah So we see a future exactly what you're seeing where self-generation makes a lot of sense Yeah, right off grid makes sense and you can do off-grid transit systems in Africa today or or Caribbean islands or yeah Yeah, we see that as a major trend ourselves it is tell me about policy with models because BID doesn't talk about it a lot, but as I understand that you do forklifts You're very broad with you know a lot of people talk the talk that electric vehicles electric vehicles But but we've lost they don't actually go far beyond Cars or cars and buses. Yeah, some do Toyota of course moves across But some what is forklift a dead market or a lively markets or forklift is a low-hanging fruit because we see Every continent needing distribution services and they run 24 hours a day so And most of those are mixed in-house outdoor But they're always in-house and if you go in-house you have to vent if you're running any internal cover Oh, yeah, usually natural gas or diesel. It's it's an illegal for you to offer Yeah, but electric is zero emissions. So absolutely. So we've I think last year the number was like 8,000 electric forklifts were shipped last year. Are they lithium-ion? They were all iron phosphate based all lithium-ion all lithium-ion So whereas the market in general with forklifts. I don't know what it is for half a million a year I can't remember the figure, but I Nearly all of that is actually lead acid, isn't it? So you're coming with something next generation We're coming with something next duration We see it actually as a a lifetime battery commitment, right? Yeah, that acid is a great chemistry But if you operate it 36 months, you know, oh, yeah, you're pretty much replacing the entire system Whereas iron phosphate you have 10,000 cycles. Yeah, it's a 70 percent. Yeah, and it is a heavier chemistry But for ballasted operation like forklifts. They want more battery. It's not heavy enough They actually are adding cast iron. You need it. It's a counterweight. You add cast-on, but it still makes sense It makes brilliant sense. So it's lower cost of ownership if a forklift is lithium-ion. Absolutely However, maybe it's only a few percent of the world's forklifts every year are lithium-ion. Why is that as an observer? Why aren't the others doing what you're doing? Well, I do see some I see a lot of Japanese forklifts going lithium-ion, right? And that's great B.u.i.d. Has just entered the market two years ago So to do six to eight thousand in the first year of production is really price I think we've shipped four hundred five hundred in the US now So it's ramping you will see it ramp really well. It will it will Disrupt it would seem to us to make sense because it's a cost in that sort of industry There's no romance that's just hard money And if you it's a lower cost of ownership you can't afford not to do it, right? And so and we see it we see it as look if if you're looking for job creation tools Hmm if you're a continent that doesn't have vast amounts of fuel reserves or vast amounts of fuel refining or access then every diesel bus every Diesel vehicle every gasoline vehicle you buy or our implement is Hemorrhaging GDP you're giving your money away to the to another continent. Yeah, yeah, yeah, and but when you electrify a platform It's always an electric job creation Yeah electricity is always locally generated with natural resources. Yeah, whether it's wind or solar Maybe it's hydro if you're blessed with with some of that potential, but it's always local Yeah, so it's so that creates a Reciprocal effect an indirect effect yes of job creation Because the platforms are energy ignited. Okay, let's move across everything. You've said okay lifts buses cars Dredge vehicles about fuel cells related to all of that because I think the hard facts are that With for lifts a few thousand a year were done with fuel cells, but it's sort of stored and with cars a number of car automotive companies have Backed off from fuel cells. They have felt that the hydrogens not green the products not ready The advantages are not necessarily there Certain other companies are very enthusiastic about them as you know hyundai Toyota But in the so far the hard facts are that the number of cars that a fuel cell cars is tiny But like fuel cell for lifts similarly with buses similarly with trucks So across the patch, what is your attitude to fuel cell vehicles? So I I've had a long experience with fuel cells and Byd is still committed to Working with vendors that are trying to develop those we've launched an initiative in Hawaii That will be a battery a battery bus with a regenerative fuel cell Generator to help do a range extension of that bus and that's stop you there Is that a get-you-home emergency life-builds or is it something that would be used on every trip? It could be used on every trip. Okay, as long as it stays functional range extend That's not as long as it stays functional I think that It has been tough for Toyota launch fuel cell at a cost that that isn't cost prohibitive You know and they launched their leasing operations they lost but they they themselves said it was a hundred and thirty thousand dollar vehicle so Commercializing a hundred and thirty thousand dollar consumer vehicle. Yeah is a tough sell. Yep And until you get that very complex system of pumps and stacks and specialized metals materials some rare earth metals Until you get that system Really down in cost. Hmm. It can't compete with low-cost batteries in What's a very mature technology and in motor technology indeed indeed and so that? That the thing they're trying to solve is a great target, which is let's have a very fast real fuel They can refuel with a you know pumping that hydrogen. Okay, right? It's a high energy density fuel So they're trying to achieve that what I see though is before they get Commercialization of a vehicle that's less than fifty thousand dollars Electric buses electric cars will charge in seven minutes So if I was going to just force you before moving on Across the spectrum from an electric bike up to a light railway train Trucks and buses in between if I was going to Urge you to tell me which one has the highest chance of succeeding with for with fuel cells They might not become the majority, but at least they will get a beefy share and make money for someone Which type of vehicle is most suited to fuel cells? So I would say long-range payload sensitive applications So so we're talking light rail and trucks long range is long-range coaches got you and In those applications, they are in high utilization. You have to have high utility So that has to be in operation all the time to make the total cost of ownership worthwhile In those applications, I see potentially You know what if it's rail for example making an investment in their own hydrogen generation stations at their own secure Yeah sights right where they already have railroad property secured because it's dangerous around railroads So that's my biggest fear when I've seen hydrogen fueled I've seen hydrogen fueled waste management vehicles Go up in flames and that's a that's a really Intense fire. It's it's a high-energy density fuel But but it's an hit it's a Hindenburg at the end of the day if you don't have a safe system so the safety becomes paramount and in San Francisco They made a very strong commitment to compress natural gas, which is not anywhere close to as volatile as hydrogen But true, but they had a leak okay one leak in their distribution system and shut their entire transit down system down for three days Wow, you don't remain and yeah at your job anymore if your transit system goes down for three days, so So liquid fuels that are difficult to dispatch to vehicles and Really inefficient natural gas is a poor example But but dangerous potentially handle those are tough ones to sell unless you have a really secure site and I see real ways in case Yes, yeah. Yeah. Yeah. Yeah. I I see it maybe for long-haul trucks Yeah as a range extender Yeah, because if you're doing long-haul and we don't have the infrastructure even the AC Infrastructure for fast charge you'll have to have a way to go just that extra okay hundred miles to make your range That's good. So so I do see it a payload sensitive and potentially potentially long-range Fascinating insights and and one last question in terms of the cost of a vehicle. Let's say your superb buses The battery is a large part of the cost But battery costs are coming down Are they coming down faster than the cost of the vehicle and if they are What is taking that percentage because you have to add up to a hundred percent? Yeah, I would say in China They've solved the problem They mandated that all new bus purchases all replacement buses will be zero emissions And the only technology today that's commercially viable for zero emissions is an electric bus just to finish off, okay? the We were Discussing how within the cost of one of your vehicles bus car The battery isn't is you agree likely to be a lesser proportion of the cost Yes, what will be a greater proportion of cost inside that the vehicle so what will assume the higher role so Batteries are coming down at least 10% per year Which means at some point they'll be less than 50% of the total subcomponent cost Inverters always have been especially big bi-directional inverters have been Big cost in electric buses the sub it's a it's a large Aluminum substructure so the build out of all that aluminum and the manual operations to do a unibody construction Really becomes the larger proportion of cost as battery gets lower. So labor cost Because assumes a bigger cost with so much custom aluminum Structure so in China they have an advantage in cost because the labor is lower cost in the United States I have to pay a little more, but the total cost of ownership is still Literally you get your bus paid off in California in two and a half years Hmm, but California is unique because they charge a carbon tax on every diesel bus right so approximately seventy five thousand dollars a year and that carbon tax is placed into a a Hybrid incentive or a low vehicle incentive program Yeah, and you can get a hundred and fifty thousand dollars off the price of your bus You know for price is a special market to try to adjust you got you but in a normal market Yeah, Kansas City or these are Indianapolis They will see those buses paid off in three to five years. Yep total cost of ownership Yeah, would save them in 12 years the entire cost of a replacement bus So a 60-foot articulated bus that goes for 1.1 million dollars will save in 12 years $1.1 million and enough saving to pay for position. Yeah, it's it's the perfect virtuous cycle You're you're literally saving enough for your next replacement bus and and You feel that a lot of the things being added to vehicles like vehicles of grid vehicles of house and Is really Customer-driven they're asking for all manner of extras. Tell me about bicycle, right? Okay, so So Transit companies in the United States have seen a decline in ridership Hmm in order to counter that they want to make the bus more comfortable What they are able to do with an electric bus is they have a flat floor throughout very easy passenger friendly and it's quiet You can carry on a conversation now on an electric bus. Yep. Absolutely So now they're putting in seat chargers five volt So just USB slots so you can charge your phone. They're adding Wi-Fi so it now becomes your mobile office. They'll have Eight cameras like Stanford University is replacing their whole fleet But it's free service and they have some vandalism problems So they have outside bus cameras and inside bus cameras Streaming video more thing to their knock center, right? So yeah those attributes Which are considered high-tech attributes Yeah, align with the the whole image of an electric bus. Yeah, so transit company companies are more apt to invest in high-tech Gadgets indeed. Yes, that's right. You talked about Indianapolis has I think four or six bike racks inside the 60-foot bus Bicyclic was not high-tech, but it's catering to a different it's a millennial market. Yeah, right. Absolutely Because you don't have 97-year-old guys getting on the bus with their bikes Yeah, so so even though it's elderly friendly Yeah, you got six bike rocks and you don't have to put it outside and get all snowy Yeah, I'll load my bus inside the bus, you know, I remember at the conference in Oregon I rode on a BYD bus and they said this is a European version because each window has a hammer to Get out if it rolls, but if it was American you don't get to have the hammer. No, no, right? No hammers But they do have two portals on the roof. So I guess I guess they I guess they expect the bus to tip over and you can get out the side Yeah, in Europe, they have a Crash hammer and every way you have to personalize what you're doing for a tree is what you're doing That's wonderful. It's very exciting very exciting company obviously doing great things moving very fast And it's great privilege to hear your opinions as to how all the trends are going. Thank you for your time I appreciate your time. Thank you. Thank you