00:00The CEO said the company basically overestimated the pace of the energy transition. Craig, is this reset that we're seeing not just at Stellantis, but across all EV makers, thanks to the Trump administration and current policies, or is it a broader lack of appetite now for EVs?
00:15Yeah, I think it's a little bit of all the above. I also think you have to pin quite a bit of blame here on management teams, right, where, you know, at Stellantis under, you know, the new CEO who's been in place for a good while now, but also his predecessor, Carlos Tavares, it has been difficult for them, right?
00:35They've had to answer to two very different administrations in the U.S. who had, you know, diametrically opposed views on the future of the auto industry. That's really difficult to run a business around.
00:46But, you know, this is also a story of a company that was trying to become competitive in electric vehicles, investing a lot in that and getting their suppliers on board to, you know, feed those batteries and, you know, put those EVs on the market.
01:01Now that you throw those out in response to the changes in policy, it's going to cost you a heck of a lot of money. And that's what we're seeing this morning and also have seen at GM and Ford.
01:11Yeah, exactly. And also what surprised me is that China is also seeing a cooling in demand for EVs. We saw, you know, trouble with BYD this after, you know, a price war between the EV makers in China.
01:23So I'm wondering just, you know, what is that broader sort of shift away from electric vehicles? Has it something to do with the difficulty of using them, charging facilities, batteries versus charging, et cetera, as well as everything else?
01:37Yeah, I think we have to maybe separate China from from the rest of the world to some degree, because absolutely we're seeing a slowdown there.
01:45But it's a slowdown from a really impressive high level in terms of sales. And it's a very different story in the U.S.
01:53And even, you know, I think, you know, the Europe is somewhere in the middle. And interestingly, Stellantis has had, you know, this approach of trying to leverage a relationship with a Chinese manufacturer called Leap Motor that, you know,
02:07arguably is making their life difficult at, you know, some of Stellantis's brands where, you know, if you have this new entrant with, you know, a lower cost base out of China and the ability to price very competitively, that, you know, puts a high volume manufacturer like Stellantis in this very difficult position over here in Europe.
02:27So where we've seen, you know, some pickup in demand, but still a bit of a disappointment in terms of, you know, the growth not being what policymakers hoped, you know, when they were setting these targets to phase out the combustion engine, you know, around 2035.
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