Andy Palmer, the ‘Godfather of EVs’, explains how China took the lead in the electric car race. Palmer’s nickname came after he developed the world’s first mass-produced electric vehicle, the Nissan Leaf. He said Chinese EVs offer “amazing” value for money and better battery technology than their Western rivals.
The man known as the “Godfather of EVs” has issued a warning to automakers who are ditching electric cars for hybrids.
Former Aston Martin CEO and Nissan executive Andy Palmer told Business Insider that delaying the transition to EVs in favor of hybrid sales is a “fool’s errand”. It warned that automakers risk falling further behind Chinese EV companies if they do so.
Palmer’s nickname comes from his time as Nissan’s chief operating officer.
He led the development of the world’s first mass-market electric vehicle, the Nissan Leaf, which has sold more than 500,000 units since its launch in 2010.
“We’d like to say we were driven by the motive of making the world a better place, but really we were driven by the Toyota Prius kicking our butt,” Palmer told BI. .
The Nissan Leaf was the first mass-market electric car. Peerapong Boonyakiat/SOPA Images/LightRocket via Getty Images
Rather than emulate the success of the hybrid Prius, Palmer said he pushed Nissan to build an all-electric vehicle, ultimately winning the support of then-CEO Carlos Ghosn.
More than a decade later, automakers including Aston Martin, where Palmer was CEO from 2014 to 2020, are going the other way and turning to hybrid vehicles as EV adoption slows. In particular, he is skeptical.
“Hybrid cars are the road to hell. Hybrid cars are a transition strategy, and the longer that transition period is, the slower the launch into the new world,” Palmer said.
“If we just dilute it with hybrids and delay the transition to EVs, we will lose competitiveness for even longer and allow China to continue to develop its market and leadership. Honestly, I think that’s a fool’s errand.” he added.
China is ahead
In recent years, the auto industry has been reeling from the rapid growth of Chinese brands such as BYD. The company has conquered the domestic market with affordable, high-tech EVs and hybrid vehicles, and is now rapidly expanding overseas.
Related articles
“Chinese cars are very good. Chinese cars offer incredible value for money for what they offer,” Palmer said.
“Their battery technology is class leading and they are very software focused,” he said.
Palmer told BI that the success of China’s EV industry is due to the country’s long-term industrial strategy.
According to one study, the Chinese government has spent at least $230 billion in subsidies to EV manufacturers since 2009.
Palmer, who previously served on the board of Dongfeng Motor, a joint venture between Nissan and Chinese state-owned automaker Dongfeng Motor, said he saw first-hand how aggressive China’s EV strategy was.
“The[Chinese government’s]edict was a transition to new energy vehicles,” he said.
“It starts with industrial strategy. That’s a big thing to learn. For the better part of 14 years, we didn’t have an industrial strategy,” Palmer added.
BYD has conquered the domestic market by offering a wide range of affordable high-tech EV and hybrid vehicles. Getty Images
Both the U.S. and Europe have responded to the rise of Chinese automakers by imposing tariffs aimed at protecting their auto industries, but Palmer said the tariffs have hurt Western companies’ ability to compete with Chinese rivals. He said it would only damage it.
“My experience with tariffs is that they just make domestic industry lazy. They make the gap even bigger,” he said.
Instead, he argued that automakers need to prepare for a “survival of the fittest” battle with Chinese automakers, especially in Europe, where companies like BYD and Xiaopeng have ambitious expansion plans.
“Chinese companies will learn from competing in Europe, because Europe is the toughest market in the world. If they can do that, they will be unbeatable,” Palmer said.
Japanese automakers stumble
The rapid growth of China’s electric car giants has put Mr. Palmer’s former employer, Nissan Motor Co., and its Japanese rivals Toyota Motor Corp. and Honda Motor Co. under intense pressure.
Nissan Motor Co. announced in November that it would lay off 9,000 workers, while Toyota and Honda are both facing declining sales and weak profits in China. In December, it was reported that Nissan and Honda were in merger talks.
Palmer said Toyota’s decision to focus on hybrid vehicles initially paid off, but it put Toyota and other Japanese automakers at risk as key markets such as China rapidly transition to EVs. He said it became.
“Toyota has brought Japanese industry into a dead end. It will be difficult to recover from that,” he said.
A former Nissan executive, meanwhile, said his old company “self-destructed” and wasted a promising lineup of electric vehicles and a decade of lead in EV technology.
“At the last board meeting in July 2014, I was viciously attacked by a bean vendor who said, “This is not going to make money, it’s happening too fast.” I managed to win that day’s meeting. But I left the company,” Palmer said.
“Nissan currently has a very weak product lineup and lacks clear leadership in the EV space, which is a direct result of poor management,” he said.
How can I get my EV working again?
Last year was a tough year for electric vehicles. Although sales are still growing, automakers around the world are scaling back investment as adoption is slower than expected.
Palmer said the reason some consumers have proven reluctant to make the transition to electric vehicles is simple: EVs are too expensive.
“The price has to match that of the internal combustion engine, and to do that we have to be able to offer cars with smaller batteries,” Palmer said.
The average price of an electric car in the U.S. in October was $56,902, compared to $48,623 for a gas-powered car, according to Kelley Blue Book.
Mr Palmer said that to make vehicles with smaller batteries and shorter ranges cheaper, governments needed to encourage the rollout of charging networks to alleviate range anxiety.
He added that Western countries could learn from China’s approach to industrial strategy, especially when it comes to batteries, an industry dominated by China.
“If the West wants to catch up, I would advocate emulating China,” Palmer said.
“The alternative is that at the moment everything is made in China. Even if we manufacture our own battery cells, all the minerals have to come from China,” he said. “The entire supply chain is at a standstill.”
