Inside Insights: The Evolving Electric Vehicle (EV) Market with William ”Bill” Newman

In this episode of Tech-Driven Business, William ("Bill") Newman, Industry Executive Advisor (Chief), Automotive for the Customer Innovation Office at SAP North America, rejoins Mustansir Saifuddin to talk about the electronic vehicle (EV) market. Bill shares background on the EV market, how the market is developing, and what to expect in the future. From fuel cell technology to point charging to the changing user experience and sustainability, Bill covers a lot. More importantly he shares some valuable information for consumers and suppliers alike.

Bill has over 35 years of executive leadership, strategy, consulting, practice management experience balanced with extensive public speaking and higher education experience. A former leadership team member for Volkswagen’s IT division, he is the author of two books on enterprise performance and has worked with many OEMs and suppliers across the automotive industry. 

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Episode Transcript

[00:00:03.760] - Mustansir Saifuddin

Welcome to Tech Driven Business brought to you by Innovative Solution Partners. In this episode, I welcome back Bill Newman of SAP. Listen in as Bill shares a background on the electric vehicles or the EV market. He dives into not only the past, but what we can expect to see down the road for suppliers across industries.

 

[00:00:30.200] - Mustansir Saifuddin

Hello, Bill. How are you?

 

[00:00:32.060] - Bill Newman

Good, Mustansir. Good to be back on your show.

 

[00:00:35.960] - Mustansir Saifuddin

Thank you. Hey, welcome to Tech-Driven Business. We had some interesting conversations in the past and I'd like to continue our talk. But this time I picked a different topic than what we had discussed in the past. So looking forward to having that conversation with you.

 

[00:00:53.120] - Bill Newman

Sounds great. Let's dive in.

 

[00:00:56.490] - Mustansir Saifuddin

All right. So what we want to discuss as part of the show today is electric vehicles or EV and technology and how they go hand in hand. So with that, let's start with our conversation. I want to start off with, what are some of the cool things on the horizon when you talk about EV market? Can you just give us some background and your perspective on that?

 

[00:01:24.740] - Bill Newman

Well, sure. I think listeners will be pretty familiar with the light passenger space. Battery electric vehicles, plug in hybrid electric vehicles, particularly those are going to be some of the things that we're seeing now and will continue to see. In other parts of the vehicle space, we're seeing hydrogen, other aspects of fuel cell technology, particularly for long-haul. But the general consumer, unless they're part of that transportation business, is probably, at least in the near term, not going to be impacted by that. With electrification comes this pesky business of having to charge a vehicle. I think listeners might be aware of the term range anxiety. The good news is that on a couple of fronts, battery density and the ability to charge a battery quickly using a DC direct-current fast-charging methods and even some infrastructure that allows parallel DC fast-charging will become more and more available. So it's not just we need locations for charging, but we also need those locations to be quick, efficient, and effective. People understand that you can't just put charging stations out in a parking lot and it works great in the summertime. But when there's weather and in the Sun Belt, the weather can be in the summertime, you have to also provide a friendly charging environment for that.

 

[00:03:14.240] – Bill Newman

So you're going to have covers and maybe some solar collection on the top of the covers, maybe some heated environments for northern climates. These things are all being talked about. We went in deep with them with a recent center of automotive research event that we had that SAP sponsored in San Ramon at the end of 2022. I think also, too, the fact that the federal government is enabling an additional subsidy program for passenger EVs, and also putting some significant infrastructure dollars on the table as a part of the IRA will allow not just the Coast and a lot of the key Gulf Sunbelt strips, which do seem to have a high propensity for charging station density, but allow those to fill into places like in America's heartland where there's lots of open stretches in places where the traditional oil and gas companies have fought to keep electric charging out. So I do think that you'll begin to see over the next few years a little bit less range anxiety. Maybe even we get closer to the mythical 1,000 mile charge, which would really free up EVs as a cross continental and road trip platform that you could take with your friends, your family, maybe even towing, given the fact that we've got some really cool high torque electric vehicle trucks that are now making it into the marketplace and are getting very well received. Here to show everybody around the candy store what might be coming with EVs. So far, it all looks pretty good over the next few years.

 

[00:05:16.620] - Mustansir Saifuddin

I think it's a very exciting time that we're living in, especially that some of the changes that are coming in this segment of the market is pretty phenomenal. How the battery life has been standing in a matter of very short period of time. I think this is really exciting stuff. Taking that growth in that EV space now, looking from the lens of a technology company, how can tech companies support this evolving EV market?

 

[00:05:54.100] - Bill Newman

Well, staying on the topic of point charging, we see there an emergence of a new role in the auto ecosystem and that of energy provisioner. Being not just the companies that create third-party charging stations, but actually brands owning that as an option to say someone like you or I buying an electric vehicle, just like we would decide that we want some sporty wheels and trim packages on our vehicle. Maybe there's a package for pulling a boat, and we'll also be able to buy a trim package to hang a charging unit on the inside of our garage and be able to charge that way. Those are products that need to be built. Those are products that need to be serviced and managed. Guess what? There's a lot of companies, like all the big brands that want to have a piece of that and not only just white label those to be able to provide to their customers, but also be able to potentially do some fractal billing, a few basis pennies per kilowatt hour over time really adds up. And so there's a significant upside and revenue potential there and the Wall Street Journal covered that pretty extensively in an article in late 2022.

 

[00:07:18.940] - Bill Newman

So those are all good things from a vehicle technology perspective, obviously higher density batteries, non-heavy metal batteries. So doing a lot of work with silicone, which can be developed synthetically and not have to be mined and harvested out of tough to reach and sometimes areas with really poor labor practices or maybe not politically friendly to Western markets. So there's a real upside there. And really just also, I think when you look at EVs, the nature, and I've spoken about this on this program and others, the nature of how EVs are shifting the experience from the front-seat driver experience to what I call the back-seat passenger experience, where you might be traveling in a semi-autonomous vehicle that is electrified and may not have a steering wheel, may actually feel more like a rolling, either workplace, or family space. And those provide new opportunities for companies who provide interiors, who provide lighting, who provide sound and instrumentation. We are working with suppliers today, automotive suppliers today, that are really thrilled with the opportunity to come up with some of these new creative designs or creative applications to support some of the new technologies that are going into different EV designs.

 

[00:08:56.580] - Bill Newman

That piece is really extraordinary. If you look back in time, it's almost like when we left the Model A and the lifted carriage design that Henry Ford made so popular and really began to go into the longer sedan like driving experience where everybody could go for a Sunday drive in the countryside. And it was really liberating. I think in many ways we're at that next juncture point now in the design of vehicles that EV is letting us aspire to.

 

[00:09:36.600] - Mustansir Saifuddin

I like your comparison. Really, it is coming to the point where we are going to see a big shift, at least from the vantage point we are at right now, seems like the possibilities are endless, especially when you talk about the interior of a car and the experience of a passenger, not just a driver. You're bringing in a whole new market segment, not only for organizations who are building those interiors, but technology companies who provide those accessories where it opens up a lot of opportunities for the consumers to have a different experience altogether in a vehicle.

 

[00:10:24.330] - Bill Newman

I'll just add really quickly to that and do a shout out to the Experiences Per Mile Advisory Council, and the report that they issued in 2022, actually was the first report of its kind that suggested that the utility or the experience value, the value of an experience was different based on the purpose for that particular use of a vehicle. So if I was going on a vacation road trip, or if I was just driving to the office, or I was taking my kids to a soccer practice, there were lots of different use cases. And it's really pretty extraordinary to see then, are we moving to a place, particularly with new EV design, where we're actually designing or maybe just using a vehicle specifically fit for a given purpose or a set of specific purposes. And then for another basket of reasons why we would use a vehicle, we use something completely different all together. Really suggests a huge differentiation in potentially where vehicles could go and maybe moving out of that, how many hundreds of thousands of this particular vehicle did I produce to make money in a particular year to how personalized was I able to make this vehicle experience to my customers?

 

[00:11:55.840] - Bill Newman

And how many times were they able to come into my portfolio of different vehicles to get the value that they wanted? So it's pretty fascinating stuff.

 

[00:12:07.660] - Mustansir Saifuddin

I think you touched upon a very important point over here, the experience economy. Everything is about the experience now. This whole EV market can definitely change how folks look at a mode of transportation being so versatile and so open to having these possibilities which were unimaginable a few years back. Definitely a big shift in this direction. On a separate note, let me ask you this, what do you consider your biggest accomplishment? I know on a professional level, definitely you have a lot to share, but something that sticks out to you on a personal professional level that you'd like to share with our listeners?

 

[00:13:01.080] - Bill Newman

Well, I think outside of my family, on a personal level professionally, I've always tried to be more of a teacher and a mentor. Interesting story. When I was a junior at UCLA, I was a substitute teacher for a school district that was on strike. All the world of respect to educators out there, but I was a hungry college student that needed to earn a few bucks, so I taught some math classes. One of my most fulfilling moments in my early adulthood was being able to work with some of the high school students that frankly hadn't gotten much of a shot from the institutional educators that were working at the high school that I was pinch hitting in and really being able to watch them grow. I've learned over the years that some of them have actually gone on to become educators themselves. I find that hugely fulfilling and feels like I have in a small way left a mark in somebody's life moving forward. Also just as a youth leader, too, as the same thing, whether it's at church or boy scouts or any of those things. Professionally, I've been part of some really cool vehicle design programs.

 

[00:14:23.900] - Bill Newman

Listeners might know that I was an airplane guy before I was an automobile guy. So being able to take advantage of some design to first flight vehicle programs was really rewarding for me, as well as watching the Volkswagen Beatle sunset and roll off the assembly line down in Puebla, Mexico, after owning one as my first car when I had just gotten my license when I was 16. Those are just some fun things that come to mind. Appreciate you asking the question.

 

[00:15:03.360] - Mustansir Saifuddin

Now, that's awesome. I can see that spark in your eyes when you talk about teaching and your passion for that and how it relates to your professional life also. But coming back to our topic, when you talk about EVs and this whole conversation about technology, what's your take on sustainability? How big a role is sustainability playing for the supply chain as you have seen in the past year or what do you see as the future in 2023?

 

[00:15:39.080] - Bill Newman

Well, for sure, we're doing in our supply chain, we're moving more to a make-to-market, so more of a regionalization, which is good ecologically. Putting things on airplanes and putting them on boats and making them go thousands of miles. Yeah, I understand that there's a factor cost benefit to it to keep the price low, but it's not a good thing in terms of emissions either from vehicles or from ships, air vehicles, airplanes, air cargo jets in particular, and it's also very expensive. So I think that that aside, being able to figure out a way to manufacture EV technologies with less of a reliance on heavy materials that, again, need to be strip mined in many situations and have a tendency to devastate the environment of developing nations and not so developing nations who are doing that at their own expense. I think that there's something to be said about that. We're going to look at Scope 1, 2 and possibly Scope 3 requirements, along with significant tailpipe emission requirements and other rules that are going to come to the US in 2023. One can imagine that if I don't have my rules in alignment, I could, as an innocent EV owner, purchase a vehicle that was manufactured using inappropriate labor sources with materials that were mined in non-environmentally friendly ways and powered by non-environmentally friendly coal fired electrical plants.

 

[00:17:39.120] - Bill Newman

So just because you drive an EV doesn't mean that you're being ecologically mindful. You have to really understand where it's all coming from and how you're using it. So sustainability plays a huge role there. We're going to see more regulatory impacts and reporting impacts as we go into 2023. And frankly, that works for people who want to drive gas powered vehicles as well. They're complex pieces of machinery and whether you have an affinity to drive gas powered electric or what have you, there's no guarantee that just because you climb behind a wheel, some gas powered vehicles are actually more sustainable than EVs. So it's not a black and white thing. Just to use the expression, you really have to go under the hood to understand what's going on there so that you're putting your money in a meaningful way in a place where you can act accordingly based on your beliefs for what sustainability means for you.

 

[00:18:48.360] - Mustansir Saifuddin

I think you just hit it really right on the point when you talk about you really have to look under the hood to see what's going on. That's a good advice for our listeners to keep that in mind when you look at sustainability and how big of a role it plays overall. I think that brings us to the end of our conversation. Like I say always, what is the one take away from this particular topic that you're talking about that you want our listeners to keep in mind how we move through 2023?

 

[00:19:26.100] - Bill Newman

Well, I think on the topic of EVs, just to wrap up the last piece that we were discussing, I think you have to decide what kind of an impact and how early you want to make, if you are going to be a green buyer and be conscientious and put your money where your mouth is. And for those people who really want to make an impact right now, immediately, and feel good about what they're doing over the next 5 to 10 years with the environment, buy a plug-in hybrid electric vehicle. It's proven technology. Do plug it in. Don't drive it like a gas powered vehicle because then you're no better off than if you're filling up at the gas station. But that's very finely tuned technology. It's multi generations old. If you do feel that compelled to go in and buy a full battery electric vehicle, also understand that the technology is going to significantly improve, not quite like Moore's Law, but you're going to see some significant improvements in vehicle performance and comfort. Maybe not reliability because they're generally very high quality vehicles built today. But certainly in terms of battery capacity range, etc. You're going to see some real significant improvements in the next two to three years.

 

[00:20:51.240] - Bill Newman

But again, plan to drive the car for 10 years, 15 years, 20 years. That's how they're built. And that's a real change in the mindset, particularly of North American auto consumers who, as recent as 20 years ago, generally bought or leased a new car every 4 to 6 years. We're moving away from that. So be really happy and confident in the purchase, particularly that you're making when and if you do go in for a form of electric vehicle. And that way you'll be quite satisfied over the period of ownership.

 

[00:21:33.120] - Mustansir Saifuddin

That's a good advice to keep in mind. Thank you so much, Bill. It has been a pleasure talking with you. And it was a great conversation, especially this topic has been lingering and a lot of folks have questions in terms of how we are seeing the market now, but also what is the future holds for them. So thank you again for sharing your insights into this topic.

 

[00:21:58.240] - Bill Newman

Great to be with you again. Take care. Have a great day.

 

[00:22:02.340] - Mustansir Saifuddin

You too. Thank you.

 

[00:22:07.920] - Mustansir Saifuddin

Thanks for listening to Tech Driven Business brought to you by Innovative Solution Partners. Bill covered so many aspects of the quickly evolving EV market. His main take away? Decide what environmental impact you want to make and when. We would love to hear from you. Continue the conversation by connecting with me on LinkedIn or Twitter. Learn more about Innovation Solution Partners and schedule a free consultation by visiting isolutionpartners.com. Never miss a podcast by subscribing to our YouTube channel. Information is in the show notes.