Latest / Auto Collabs / Why Tech, Not Design, Will Define the Cars of the Future with John Bozzella | Public Policy Day 2025

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Why Tech, Not Design, Will Define the Cars of the Future with John Bozzella | Public Policy Day 2025 · Auto Collabs

• 0:00
  We just got the skinny on the best coffee. Yes. [laughs] Apparently it's, it's Volvo? Yeah, you gotta go to Vol- go upstairs, you go into the show, Volvo car.
• 0:09
  Now by the way, I gotta be careful 'cause I love all our members. Right. Sure. So like I, I don't wanna get in trouble with the others. But the ones that have the best coffee- But the best coffee-...
• 0:15
  you love a little bit more... yes. Yes. Okay, John Vezeau- I'm here for it. Bye. [laughs] John Vezeau, um, Alliance for Automotive Innovation. We quote you all the time- [laughs]...
• 0:27
  in our morning show because you're always, like, have some insights and you're quoted a lot. I don't know whether we should say we apologize or you're welcome. One of the two. No, no, no.
• 0:34
  [laughs] You know- I, I, I love it. Thank you... some- sometimes- I'm honored... who was it? It was, uh, Jimmy Douglas. He used to work for Tesla. He used to head up their remarketing.
• 0:41
  And he came up to me at the Reuters event. Right. And he said, "Hi, I just wanted to meet the man who talked about me on their morning show." And I was like, "Crap." Oh, boy. [laughs] Right?
• 0:49
  'Cause we just kinda like call it like we see it, so I searched our show notes for him and like, "Oh, we said good things about you." Yeah, yeah. Yeah, yeah. [laughs] Thanks for joining us today.
• 0:56
  Well- It's great to meet you in person... it's my pleasure. I love what you do. [smacks lips] Um, okay. You get to see and do a lot.
• 1:01
  You're always paying attention, not only, uh, what is n- the now, but also what's over the horizon. Recently you took a trip to China. Yes.
• 1:09
  And everyone's talking about China and Chinese EVs and what they're doing with technology. Tell us what you saw. Yeah. So it's really, you know, it, it is a critically important question, right?
• 1:18
  Like, what is happening now and what's happening over the horizon? I love the, that setup.
• 1:23
  But, but you gotta start with something a little bit more fundamental, and that's this: so there is a huge, intense global competition happening for a- what I would call automotive business, automotive assets, plans, you know, know-how.
• 1:39
  And the biggest competitors are the US, Europe, and China, right?
• 1:44
  And so I went over there to find out what the state of play was in this big fight, in this big competition, and I came back, like i- it was, uh, like I don't know if this is PG or like if I could s- It's very close...
• 1:54
  like, it's like this was a holy shit moment, right? Yeah. Because, because the, the, what we're seeing over there is a really, really incredibly tech-forward, uh, uh, m- market and industry there. So two things.
• 2:10
  One is you talked about EVs. No question about that, but I think that's pretty fairly well-known, right?
• 2:15
  Like, that, that the Chinese industry, automotive industry has a 10 to 15-year head start on the US industry from an electrification perspective. That wasn't my biggest takeaway.
• 2:25
  My biggest takeaway was the extent to which there's tech integration in the vehicle platform. Yeah. That is mind-blowing. So there's one single operating system, and the other thing, customers shop for it, right?
• 2:40
  They, they are like, "Does this have this operating system in it?" Like, and so it's, you think about where we are- Yeah, I know. I know... and where the Chinese are. That's the biggest thing.
• 2:50
  And so when I think about, you know, global competitiveness, you hear these conversations, places like here in the auto show, you know, uh, software-defined platform. I don't care what you call it.
• 3:00
  Tech integration, that's where, uh, that, that's where they're ahead right now.
• 3:03
  The, the buyer of the future I, I really believe, this is a personal opinion, but I think it's also shared with a lot of people and some, some really strong data, the buyer of the future is gonna be interested
• 3:13
  much more in the tech than actually what the vehicle looks like or feels like. They will wonder how it integrates with the entirety of their life.
• 3:21
  And, and what you're saying is like they've, they've gone and figured that out in China. And China, they're doing that already. Like, they've figured out that the, like
• 3:28
  if Apple figured out how to do it on a five-device setup, the rest of the world is trying to figure out how to integrate that- Yeah... in the re- in, in all of the vehicles. Y- yeah. All of life.
• 3:36
  You s- you're, you have described the current customer in China. I'll, I'll just give you- Wow... I was trying to figure this out.
• 3:43
  So like I'm over there and I'm driving cars and I'm being driven in automated cars and I'm, but we did some shopping. Like, we did, I would call it mystery shopping, but I was obviously mysterious, right?
• 3:52
  [laughs] Yeah, I was gonna say, like- So I wasn't, I wasn't-... you probably looked out like a sore thumb, let's just say... I wasn't fooling anybody. Right. I wasn't fooling anybody- Attracted a bit of a crowd...
• 3:57
  in the Huawei store in Shanghai- Yeah, no... where like this guy is not- There's this guy. [laughs]... actually here to shop. Okay. All right. So take that point, but like here's...
• 4:05
  So, so what's the average age of a new car buyer, do you think, in China? [smacks lips] I'm gonna say...
• 4:13
  I'm a, I, I'm only gonna, I'm gonna go young just because I feel like you're trying to get me- Okay, there you go... I'm gonna drop low... prices right, I'm trying to get you young... I'm gonna go 27. I was gonna say 31.
• 4:20
  All right. Okay. 35. Wow. So you're in the ballpark. Yeah. So the average new car buyer, age in the, average new car buyer in the US? 42. 61. Whoa, no- Yes... way it's not. Yes. You've gotta be kidding me.
• 4:30
  Okay, check it out. All right. Now look, you guys are, you guys are the fact machines. Stop it. Like, you, you can, like, find out. So think- We believe you... but, but think about that. [laughs] Right?
• 4:37
  So those are two very different customer sets from a tech perspective. Yeah. Here's another fun fact- Way different... to know and trade. You could use this at your next- I'm ready for it. Bring it... all right.
• 4:44
  Here's another one. That's a great one. Half- You coming to Sotocon? Half of- [laughs] Put him on the spot. So trade show- Baltimore...
• 4:49
  half of, half of new car buyer, half of new car buyers, uh, in China are first-time buyers. Wow. Yeah. Now is that- So at 35 years old- Is that-... half of those- Are-... have never bought a car before... correct.
• 5:03
  They're buying a car, a new car for the first time. Their families are pulling the money. They're driving in the backseat, they're driving their parents and their children- Yeah...
• 5:13
  which is why these things are tech-heavy mobile living rooms. Like, it's a different market. Yeah. Mobile living rooms, I think that's the point, yeah. You do see the features in the chairs and the supports- Yeah...
• 5:23
  and the tables and all that. Well, but it's, I mean, well, you think about this, like, we, we, we go back to this every once in a while, and you just look at the amount of time spent in a car, right?
• 5:34
  Now maybe someone in DC or New York City doesn't feel that, but, like, the amount of time spent in a car for the average family is pretty high, right? You got- Oh, yeah, driving to work, kids to sports- Work-...
• 5:43
  going to church... kids to sports, going to- It's like every single day... all, you know, grocery store. Like, you are in that car. And,
• 5:49
  uh, and, like, I was actually just having a conversation just offstage just, just before this about the privacy, the data restrictions, what's happening with the data of a car.
• 5:59
  You think about align the tech prioritiesGet it integrated with all of life. Now, you literally have the access to that, that, the habit matrix- You got it... of the whole entire family. Right. Right.
• 6:11
  And I think that's the big- I think, just to sum that up- That's the play...
• 6:13
  I think that's the biggest difference between the China market and us It's not that they want, like, manufacturing facilities or to sell more cars. It's a massive data play. They have it all, right. Yep.
• 6:19
  Everybody figured out that Tesla's a data company and they're not a car company- Right... and so everyone's moving toward that direction. Yeah, yeah. So- Yeah, so those are the big things.
• 6:26
  Woo Explain, explain the operating system. Yeah. Like, when people say, like, "Does it have this operating?" Oh, yeah. Okay. So- What else in the- Yeah...
• 6:31
  like explain, describe their ecosystem in terms we would understand in the US. It, yeah, so there's, there's, there's three elements, right? So there's, there is the infotainment, right?
• 6:40
  Uh, you know, infotainment, telematics systems, and then there's what we, you might call the intelligence of the vehicle, like, uh, you know, its, uh, level of automation. Yeah.
• 6:51
  So in a lot of vehicles today, these are separate things, right? Completely. They're whole separate packages. And they feel disparate. They're driven- Yeah... to separate hardware, separate software.
• 7:00
  It's totally different. So, so in China they're integrated, right? And customers are looking for the best integrated thing, right? So I went to this Huawei store.
• 7:10
  It's like an Apple store except you could buy, you know, you buy a smartphone, a l- a laptop, a tablet, and got, by the way, a car, right? And so- All of 'em at one place. All of 'em in one place. Ah.
• 7:20
  And so Huawei, this is Huawei, they have four different auto manufacturers that make the cars for them, and on the side of each of these cars there's a little HI, Huawei Intelligence.
• 7:32
  So this is one company, one system, one environment- Whoa... one overall intelligence stack. So, so customers are getting attuned to this.
• 7:42
  And so, like, you know, I don't know about you, but I'm a slave to the Apple environment. That's a lot different. I'm stuck. I'm in jail. Like, I can't get out. Yeah.
• 7:48
  And I say this with respect, but, like, I'm stuck in Apple. Yeah. They can hear you. They're right across the street. So, so [laughs] yes, they are. [laughs] And they have my credit card number too, by the way.
• 7:56
  They sure do. So, so, like, um, but, like, that's what's happening over there, right? And so, so, so it's the integration of technology. So Huawei, just hold on. Wait. Yeah. Huawei is the ma- The tech integrator. Yeah.
• 8:07
  And so it has the brand that is the consumer store that people walk in and buy their other tech. That brand is also on the vehicle. S- yes, on the side of the vehicle. But four different manufacturers.
• 8:16
  But it's like, imagine it's like Intel Inside when you used to buy a Dell laptop. Right. Right? So it's still a Dell.
• 8:22
  So this, there's still a piece of, there's still a hardware manufacturer that has its brand on the hood of the vehicle. It, it'd be- But- Would it be similar to an Apple logo on the side? Yes. Apple Inside. Yeah, yeah.
• 8:33
  Is it, it, so- I think a couple manufacturer, well, should line up for that. So, so there's- Wow... but that's what's- There's one that kicked 'em out. Sure. That's what's happening. [laughs] Just one. That- Just one...
• 8:41
  okay, thank you for that context- We'll talk about it... because I don't think we even think in that way. I mean, know we have this, like, Android and Apple CarPlay. Right. But it's not even close to that. No. No.
• 8:50
  It's a very different thing. And, and then the only other thing I'd say, 'cause you probably have other things you wanna talk about, you know, there, there is, there's a ton of overcapacity there.
• 8:59
  They, they're way, they, they have the capacity to make way more cars than they can consume. Yeah. Right? And so those are, th- that overcapacity- Well, and the government subsidies are also quite insane right now...
• 9:07
  you got it. So you got the government subsidies. You got a, a, a focus on the need for economic growth over profitability.
• 9:14
  So there's probably gonna be some reckoning in that industry, but the companies that survive it are gonna be super competitive. All right.
• 9:19
  So speaking of a reckoning, uh, there's a reckoning and questions all around what California is doing right now. Oh, yeah. Yep. Um, talk about California, the, you know, what the requirements are- Yeah...
• 9:32
  and what it may or may not change here. Yeah, so it's interesting. So y- this, by the way, this thing, this little story I'm about to tell only exists in the United States.
• 9:39
  No place else in the world do we have this, this, this crazy land, right?
• 9:43
  Which is we have one vehicle, right, one, quote, tailpipe, unquote, that's regulated through seven different federal and state regulations and four different regulators.
• 9:55
  One vehicle, same ambition, emissions reduction, right? Think about that. Chaos. Totally, totally.
• 10:02
  So, so what we have with regard to emissions and zero-emission vehicles is we have a federal requirement that says reduce your emissions over time, right? Grams per mile of emissions, right?
• 10:15
  But then we have a separate state requirement that's, that's a device requirement. It's an actual vehicle mandate. We need you to sell as a percentage of overall vehicles more and more EVs.
• 10:25
  So starting last year, or really this year, um, s- California and 11 states that follow them are on the path to 100% zero-emission vehicles. Right. Right?
• 10:35
  So we're gonna ban internal combustion vehicles in California and those states. So now think about this from a customer perspective, right? So you're a customer.
• 10:45
  Um, let's say you live in, uh, the southern tier of New York, right? And so you, you're close- I'm pretty close... you're close to Pennsylvania, right?
• 10:53
  In, in New York in 20, in this model year, model year 2026, which is this calendar year, Cal- New York has to be at 35% share of EVs in the, in the, in the New York market. That's straight EVs, not electrified. Right.
• 11:08
  That's, that's battery electric vehicles- Full electric vehicles... and plug-in hybrids, but not regular hybrids. Got it. Not mild hybrids. All right. They're at 9% now.
• 11:16
  So what's gonna happen is at some point- Overproduction... r- well, or- Over the border... you know, it's a numerator dem- or denominator.
• 11:23
  Like it, maybe a manufacturer might have to restrict allocations to those dealers of higher margin vehicles- To make sure that they meet the requirement... to make sure they meet the requirement.
• 11:32
  That's a bad thing for customers. So if I'm a customer, I drive across the border to Pennsylvania where they don't have this madness. If you're a dealer, you're like, "Wait a minute," like- Hold on... "Hold on a second.
• 11:42
  These guys, the-" We saw this happen with Jeeps actually this year. Yeah, this is, this is crazy, craziness. Now, no one's in control of this. California sets the rules just for California.
• 11:51
  The federal regulators don't oversee the state program, right? And so th- th- there it's, th- th- it's like a wormhole where these states that follow California just do this thing.
• 12:02
  And so I think it's, I don't think people realize yet-That in six of these states that follow California, this is happening this year. 35% of the market on the way to 100% by 2035. Wow.
• 12:17
  You know- Le- I, I wanna get into, uh, obviously those are two big kind of, like, topics at hand, but your organization in particular, I wanna hear, like, what's the goal? Yeah.
• 12:27
  What's the day-to-day, and, and how can people be either getting behind or, like- Yeah... connecting with what you actually do? So it's g- it's... Thank you for that. Um, so we, we are an industry association.
• 12:38
  We're not a nonprofit corporation that represents the interests of the auto industry in, in the US.
• 12:45
  Our members are the iconic companies that build cars and trucks here in America, the suppliers that supply them, the tech companies that supply them, the integrators, the, the, the, the, the, the new entrants to the space.
• 13:01
  That's who we work with every day. We work at the intersection of automotive innovation and public policy. Hmm. Right? Why? 'Cause the stakes are really high. We just talked about China and competition. Right.
• 13:13
  We need, in this country, a competitive auto industry. Why? Because a healthy and competitive auto industry is critical to our economic interests- Health of the competitive economy... and our national security, right?
• 13:25
  Uh, national security, economy. I mean, it's the, it's the largest retail industry in the country. Yes. It's the second largest industry in the country- Yep... behind healthcare. Right.
• 13:32
  Often the largest taxpayers- Right... in any community. So, so we, what we do is we tend to the health of the industry at that intersection, right? Hmm.
• 13:41
  So you got other industry organizations that are focused on commercial, uh, you know, endeavors or, you know, buy, sell, or, you know, the retail space.
• 13:51
  We're focused in this policy and innovation space, so that's what we do. Well, look, as usual, thank you so much for joining us, whether intentionally or not- [laughs]... 'cause we quote you so much.
• 14:01
  [laughs] It's, it's great to sit here and talk with you. Well, ha- have me b- have my word... You can take my words and use them with or without attribution, but I'd love to come back whenever you'd have me.
• 14:09
  We would love to have you. Thanks. Awesome. We'd love it. All right, super. Yeah. Thank you. Thanks so much. Bye bye.