AAH #762 - Can Carbon Capture Save The Internal Combustion Engine?

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Yeah, I was busy last week. We can talk a little bit about some of what I heard and the like. We've got Frank Marcus here from Motor Trend. Great to have you back on the show.

Out of here. Yeah, but our special guest today for the day is Yabs Cabidi. He's with a company called Ramora. And you guys are working on carbon capture for internal combustion engines.

And I don't know where we want to start with this. First, just give us a thumbnail. What is Ramora? How did you guys get going? Yeah, thank you for having me here. Appreciate you guys giving us this time. My name is Yabs Cabidi. Yabs.

At Ramora, we build a carbon capture device for CO2 emissions. Our focus at the moment is locomotives and semi-trucks.

You can think of our system retrofitting to these systems or vehicles by connecting to the tailpipe. From there, we extract the CO2 and purify the CO2 and produce food grade and beverage grade CO2.

So you're going to sell the CO2. Correct. So that's part of your business plan here. And I just make the equipment, but actually sell CO2. Correct.

Yeah. So in the rail application, you can think of our system as an entire rail car behind the locomotive. And that system connects from the locomotive, there's an exhaust duct or piping that connects to our system.

And then our system is made up of four stages mainly. The first, we're reducing the PM and NOx emissions of the locomotive. So you're doing more than just capturing CO2?

You're cleaning up the exhaust. Yeah. So we're able to go from tier one to tier four. And then from there, we cool and drive the exhaust and put it into our carbon capture bed where we're able to extract the CO2 as I mentioned.

And then the last step is where we take out the CO2, extract it, purify it and have food grade and beverage grade CO2 available. So we have storage tank on board.

As the train stops for a three-fueling, they offload the CO2. And usually there's markets, which we can talk about, where CO2 is highly in big demand depending on the location area.

So it's piped out of the car. Yes. Without back pressure. Yes.

Yes. That's the part I'm really going to hear about it without back pressure in the exhaust. So we're not like loading the engine up. Right.

And see, that's what intrigued me because everything I've heard about carbon capture up to now was that you put it in a tank. And it's like, well, you know, how big does the tank have to be? But you guys are doing this chemically.

It's almost like a catalytic converter for CO2. It's not chemically.

So for the back pressure piece, we have blores on board that are managing the flow that's coming down the pipe. And then from there, we have these pellets.

You can think of them kind of like peas or little nerf balls maybe where the CO2 molecules have high preferential molecular force.

Yeah, where they essentially gets stuck behind while the other constituents like nitrogen and water come out of the end of the bed.

And there's two beds in this system. So the first bed is where you're processing the exhaust and capturing the CO2. And then the other constituents going out to atmosphere.

And then while the other you're extracting the CO2 and pushing it down the pipeline for the storage tank. So we have a storage tank on board is a 10 foot ISO container that stores about 6,000 pounds or 6,000 kilograms of CO2.

And offload whenever the locomotives are resealing and you're liquefying it.

So for those of us who are not train spotters and have no idea about what's going on in the railroad industry, I mean, what are the emissions regulations related to trains?

Yeah, so in terms of emissions, you know, there's a lot of locomotives out there that are different tiers from the EPA.

There's tier zero up to tier four. And there's still a lot of locomotives out there that are like tier fours.

Is it the latest in the same with cars?

Exactly. So there's locomotives that don't meet that requirement at the moment.

And our system is able to provide that plus give a revenue generating system by having us sell the CO2 to offset the cost and use of that device as well.

So any of these adsorption systems, it holds on to it, but then it has to be released.

Correct.

Tell me a little bit about the releasing. Is it vacuum? Is it heat?

And where is the exhaust going while that's happening? Are there parallel paths and it goes with this one now? And then that one's being re...

Yeah, okay.

Yeah, so we employ vacuum swing absorption, so VSA.

And like you mentioned, we have at least two sets of beds at a given time.

So one is always processing the exhaust while the other is being regenerated.

And then we switch and then the other one is capturing the exhaust while the other one is being regenerated.

So you're always processing the exhaust.

And you've got a full tender car on a train.

And on a semi, it's going to fit between the cab and the trailer.

Yeah.

Help me.

Because I have no idea the displacement of a locomotive engine.

How's the scale compare?

Yeah.

Is it scale to the size of the engine or is it scale to the frequency of the refueling, which is your only opportunity to offload?

Yeah.

So there's a lot that goes into the sizing of the system.

Our current target is, you know, to fit within an 89 foot flat car.

So that will be trailing the locomotive.

So that's our current benchmark and to try to fit in as much performance into that system as possible.

So at the moment, you know, we're targeting our system to, like I mentioned,

around six to 8,000 kilograms of CO2 during the, you know, locomotive burns, you know, 2,500 gallons, maybe, you know, weaker, almost in two-week period they can burn up to 5,000 gallons.

So that's, like, one locomotive fuel tank is sized to 5,000 gallons.

So they're burning quite a lot of diesel fuel.

But is that it?

We need that much CO2 because we only stop for fuel frequently enough to do that.

Well, Sam, I was going to run out of these little tanks way sooner than that.

Correct.

Yeah. I think there is, you know, like I mentioned, I think a lot of our focus at the moment is on the locomotive space and trying to get that device out as soon as possible to our customers.

But yeah, I think the, there's a tradeoff of how much space do we want to take, how much power do we want to use?

But I think right now, kind of the sweet spot is trying to fit everything within that one flat car behind the locomotive, the tender car you mentioned.

So that we're able to put in as much performance as possible and prioritizing, you know, also hitting that tear form.

And what's the energy consumption of this thing and the math?

So like, how many more horsepower do we need for the same amount of payload?

Yeah.

Our system, power draw ratio from, from what the locomotive is using, around 30%.

So we're pulling, you know, quite, quite, quite a bit of energy, but we're also processing, you know, the full exhaust to get it to tear for.

So that's knocks emissions, PM emissions.

And then we're also taking that CO2 and purifying it to look with CO2 and getting food grade.

So I mean, all of these processes take energy.

But like I mentioned, I think our goal is to have that as a starting point and iterate to a point where we can build a more efficient, less weight and packaging space.

So I think there's, I think as a startup, you have to pick a point and say, okay, let me hit this benchmark.

Let me get this out there.

Let's see what the operational issues may be because I think we have a lot of engineering ideas.

But what does it mean to actually be in these environments and just, you know, how do we fit this into their logistic?

So speaking of the environment and logistic things.

So it seemed to me that, okay, when a locomotive drives into a place where it's going to be refueled,

it probably has a station that has been built out.

And now you're going to have this other 89 feet that's behind it.

And it would need some sort of mechanisms and plumbing and whatnot in order to get the CO2 off.

It becomes a big infrastructure problem, doesn't it?

I mean, so you guys can have all the engineering on board, but somebody's got to build out some more.

So we need CO2 tanks at these facilities or a DTL truck that drives up to these locations to offload the CO2.

So I mean, there is an added, you know, operational piece to it and how we offload the CO2.

But I think there is a lot of interest in how we can essentially be able to revenue share that product, right?

So I think we have to understand what that operational piece looks like.

So that's why we're engaging with all these customers to pilot these units and see what that means, right?

Because I think we have ideas on how that might work, different locations.

What does that mean, right? How does this fit into their current operations?

And I think that's the piece that we don't have, I mean, we have ideas on,

but until we go out there and do it and get feedback from our customers, we won't understand.

But I think from a capital cost deployment and what type of instruction needs to be in place.

I think, yeah, one is potentially a CO2 storage tank on site or, you know, a vehicle with a CO2 tank on board that can offload it.

And there's more taking on that responsibility of figuring out that infrastructure?

Yeah, so I think that's something we're working with, with our customers to figure that out.

But I think one of the other key piece to this is who are the end users of the CO2, right?

So they also have a role to play on this.

And from the CO2 perspective, you know, one of our interests is, you know, if you look at where does our current CO2 supply come from,

a lot of it, a quarter of it is mined underground.

And that's how we're using, you know, for industrial processes or food and beverage.

And a lot of the costs that comes with CO2 at the moment in industrial use is transport as well.

So a lot of the available CO2 is, you know, located in regions where it's not, doesn't meet the demand.

So with our technology and the rail system, we're able to deploy these, you know, in these locations where there is high demand for CO2,

and we're able to displace some of these, you know, non-renewable or just be able to displace this CO2 that we're mining underground.

So with our partners are trying to figure out where are these demand locations.

And then when we offload these systems, we try to marry that with the customer, right?

So there's kind of like a, you know, there's three partners in this, right?

The rail system, we're able to reduce their emissions, they're able to produce the CO2 from their systems as they're, you know, moving freight around.

And then match that up with folks that need CO2.

And, you know, so there's a bit of a, how do we partner with all these folks?

So there's a co-plant that happened to be right there.

Yeah, and there's also a lot of applications from water treatment to, you know, welding gases, food, you know, preparation and storage CO2 is used.

So there's a lot of usage of CO2. It's like any commodity that we have.

So we're trying to figure out how do we take these sources that are emitting CO2 and actually use them to industrial benefits.

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I got to imagine that even though the railroads may have to deal with a few headaches, i.e. add another car behind the locomotive, figure out ways at refueling stations to move CO2 on and off,

compare it to anything else that they need to do to reduce CO2.

Whether it's looking at hydrogen or some other thing, your solution would allow them to continue using the existing stock of locomotives that they've got.

I think we like to think of ourselves as the toolset and a bunch of the different solution sets, so we're able to provide that.

I think the other piece is with different fuel uses from the locomotives, we're able to further reduce the impact that we are having by burning these renewable fossil fuels.

I think that is kind of the solutions that we're providing us, how do we take these locomotives that are widely used, there's a lot of them, how do we provide a solution for this?

How clean does it make the exact, take us through a little bit about that, what comes out of the engine and what comes out at the end of the tailpipe once you guys are done with it.

Yeah, I mean, like I mentioned the first step is we have an after treatment system on board, right?

So we're, I think on our current setup that we're testing here at work some, we have a tier zero plus engine.

And then from there, the locomotive after being treated is at a tier four level.

So that's stocks, PM, hydrocarbons, carbon monoxide, so that's the first step.

I'll just go in. Tier four is pretty strict.

I mean, so you're hitting pretty clean standards.

Yeah, and I think there's still some pieces that we're testing right now, right?

So before we deploy onto the rail system and our mobile system, we currently are building a stationary system of that unit that we've started the design cycle this year, we've put a railroad in place so we could test this in our parking lot.

And the goal from there is to prove out some of these systems, figure out what the issues are from a functionality and just engineering basis.

What are the issues? How do we get to these requirements that we're trying to meet?

So that's what we're testing for right now.

And then in the meantime, we're also building our mobile system trying to figure out how do we package, just make it mobile ready, make it fit a lot of these operational requirements that we have from our customers.

And about the fuel, I mean, I don't know how different locomotive fuel is from over the road semi diesel, which I know has had a lot of sulfur taken out.

Is the fuel quality similar with the locomotives?

Yeah, we have ultra low sulfur diesel fuel requirement to use our system because it helps with how we built the after-treatment system around it.

And that's mainly used for at least the systems we're requesting from our customers.

And that's what all the trains use today, pretty much the same.

Yeah. So what's your goal? What are you aiming at when you get to tier four? What kind of percentage reduction?

Could we see in CO2 particulate matter and NLX?

Yeah. So from PM and NOx, we were talking about 80 plus percent reduction from the baseline.

For CO2, we're looking for 40 plus reduction from the baseline.

So we're 40 percent capture efficiency, so we're able to capture 40 percent of what's being generated.

And then, like we mentioned, we have a generator on board that's powering all these devices, right?

So we're also collecting emissions from that device and taking the CO2 and also cleaning up the emissions from that unit.

So is it possible for a locomotive basically that's a dirty locomotive to have after-treatment added onto it,

separate from what you're talking about?

I think some of the challenges are the back pressure issue that we mentioned.

I think that's one piece, and then packaging the placement.

Where do you put that unit on an existing locomotive?

So I think pairing that two systems in ours were able to manage the back pressure of that.

We're able to allocate space and power for that system as well.

So I think that's some of the trade-offs that...

What I'm wondering about is that to what extent is the sale of the CO2 that you guys capture important to this whole system in terms of the economics for a rail company?

Yeah. I think there's two pieces to that.

One is the after-treatment, how are they able to... for the systems that they already have, how are they able to keep those in play?

I think that's one piece.

And then the other is, okay, how much is this system overhead in terms of cost?

I can't really talk about what our financial agreements are.

I don't have too much insight into that.

But for them, the economics is how do we marry an after-treatment system that can let us use our current existing locomotives?

And then what we're providing is that plus a revenue generating system by selling the CO2.

So it allows to offset the cost of what you're doing in terms of operationally and just having that system on board.

So I think that's kind of the economics that goes into it from their point of view in us.

What I'm intrigued by with the company is if I got this right, Ramona has been around for five years.

And you've gone through multiple rounds of raising funds, and you've gotten it.

So I've got to believe the rail companies, the trucking companies, and who else are very keenly interested in this that you've been working on this for so long and still are able to raise money.

Yeah, I mean, we're fortunate to have a really great executive leadership from Paul being our CEO and Phil, our VP of Engineering.

But yeah, we've worked on a semi-truck application, learned a lot through that.

And what we've seen is some advantages in doing locomotive initially, so we've pivoted towards that at the moment.

But yeah, we have, and I'm sure you might have looked at our website, a truck size scale system in our books and facilities as well.

For a class 8 semi.

Yeah, so similar to what we're doing with our current build with the locomotive, we have kind of a stationary sprawled out system that is an engineering test bench that's paired with a DD-13 that we're testing our different equipment on and beds and, you know,

backing pumps and all these different equipment.

And then we're, you know, another piece that we're really excited about in this, the locomotive pieces, we're really leveraging modular design where we're trying to leverage some of the designs that we have on the semi-truck design and applying it here so that we're able to modularize and scale up or scale down the system as needed.

And then to your earlier point, how do we scale the system as, you know, as our performance is able to grow, right?

So we'll be able to potentially add those modular systems on top of what we have already in that volume or that space or other energy efficiencies that we can find by replacing those modular components so that we can scale up to treat larger and larger engines or larger, larger CO2 reductions from where we are currently.

How much smaller could you go? Are we like the smaller class diesel trucks?

Yes.

Whether you don't have as much room on board and as much payload to it.

Yeah, I think there's a lot of work that we are, you know, we need to do on how do we fit in the packaging space of the semi-truck and how,

because I think there's a bit of work that we need to do to understand how well can we fit our current system.

I think that's one of the challenges we have, but I think from the way we're approaching the design at the moment is trying to leverage a lot of these components that we have in that design so that we're able to kind of marry those two different technologies as, you know, we're developing one at the moment.

So indulge my fantasy of imagination here. Theoretically, could I'm talking another decade or beyond me, could you get it down to passenger cars?

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Hi. Well, yeah, I don't think so.

And I think the other piece of this is, you know, the technology is really good for long haul, right?

Where you're, I think for a lot of the short, you know, maybe for commuting or just short last mile deliveries and whatnot.

You're able to supplement those with electric vehicles or other, you know, emission less vehicles.

But I think for long haul trucking or long haul, you know, railroad or locomotive travel.

I don't think there's there's a solution space for that.

And I think that's our focus at the moment is how do we address that piece where there's a lot of CO2 that's being emitted.

There's a lot of emissions there as well as how do we clean those up?

And how do we provide a solution to that problem?

I think the other, you know, passenger cars or last mile those are something that we haven't really thought about.

So I mean, it's in part of it though.

I mean, the volume of CO2 that you generate with the locomotive is sufficient that it has economic value.

And it would seem to me that even the semi-truck might not generate a sufficient amount whereby it would make financial sense for the trucking company to say,

yeah, we want one of these because we can sell.

But I mean, if you're selling, you know, with small volume of CO2, it's like, yeah, I mean, I think for the, for the semi-truck application, I think if you have a lot of these in your fleet.

You know, you could, you know, you know, you're talking about for, you know, I, let's say, 600 gallon long haul trip.

That's about 12,000 pounds, 12,000 kilograms of CO2 you're generating in that trip.

So it's not nothing.

So I think if you're able to couple those up in, you know, if you are a large fleet owner, I think.

If you go to a depot and you have a volume, that would be sufficient, that would be valuable to someone.

So I think the, you know, like I mentioned, like right now, I think we're one of our mantras in the engineering team.

You know, we're a small team is really focusing on, you know, what's what's priority, right?

Keep the main thing the main thing. And at the moment it's our locomotive deployment that we're doing at our backyard parking lot.

So, but I think yeah, the, but the economics piece is something that's pretty front of mind for our executive team and figuring that out with our customers.

There's been a little said about the catalyst itself. Are you guys locking down the IP on that before we talk about that?

How's that coming along?

I guess, you know, we're working on it. And so far right now it's really only for diesel.

Correct. And I, because I'm imagining because some of the solutions to lowering carbon for big things, you know, natural gas or whatever, you still lost, you know, too.

This isn't going to really help clean those up.

And what about even bigger things like ships where it's bunker oil, but it's not, there's no such thing as sulfur free bunker oil, right?

I mean, so I think for, you know, other applications and, you know, how do we think about those going back to what I was saying about how do we make this modular?

And the other piece is how do we make this, you know, scalable as well, right?

So, I think there's a lot of different technologies or different applications that we can go into.

But I think that some of the problems with going really big is you end up having it be kind of a construction project rather than it being a manufacturing.

So you're talking about building one off so all the time and you won't really have the chance to leverage your designs.

So our focus at the moment is how do we make this modular and mobile because there's a lot of these mobile applications or other applications that we can essentially mass produce these systems for, right?

So I think that's kind of our thought process is we don't want to go chasing some of these bigger and better thing because it ends up being kind of one-offs really long lead times or construction projects that don't.

And would that 30% estimate you had before for the locomotives hold for semi's because 30% that's not, you know, that's eaten into what we're carrying.

Yeah, I think the, yeah, I would say for that there's still more work to be done and I won't comment on that.

So how many locomotives are there out there right now that could use this?

I mean, if you guys were thousands, I haven't checked where, you know, where the latest count is but there's quite a large market for this.

And if you think about, you know, who's the largest fuel burning entities in the U.S. I think outside of the army, I think it's locomotive industry.

So they're burning, yeah, there's a lot of fuel being burned to move right around. So there's quite a lot of opportunity.

Yeah, what got you into this? I'm curious. I mean, yeah, tell us the story.

Yeah, so, you know, Ramorro was founded in 2021. My, you know, I had some connections with the co-founders but I think one of the things that I was etching for as, you know, I've always had a very hardware background where I like to see the things that I'm working on and feel the things.

I think I mentioned the sea last time we met in my collegiate time. I worked on hybrid racing.

So, you know, just being able to not, you know, my background is electrical engineering and computer engineering.

But I'd like to see the things that I'm working on even though it might be software or very small hardware.

So, but yeah, I think just being able to work on a project like this that's very difficult but also, you know, solving some of our, you know, current issues.

It was very interesting and, you know, having it be, you know, done back here, which is Michigan's where I grew up was very intriguing for me.

So, so, okay, you know, web tech in progress rail, which are the two big local motor manufacturers in the country, you know, the web tech offers flex drive and progress rail has EMD jewel.

So, A, why didn't you go with one of those guys given your electrical engineering background and B, why is the remora approach perhaps better than going with one of those local motors?

Yeah. So, like myself going to web tech is what you're mentioning?

Yeah, I mean, you know, my background is I originally was working in embedded systems for like 5G software.

But yeah, essentially I'm always chasing kind of the hard problems and I think this was interesting for me.

But yeah, I think just being able to one be able to lead a team and work with, you know, just diverse engineers is very intriguing and then being able to work in a small team is, you know, you're able to get done a lot of stuff in here.

I think there's a lot of interest in just our team and the knowledge there.

But yeah, I think like I mentioned, I think I'd like to and we like to think of our solution is just another solution set in all the different technologies that people are building.

And, you know, I think we have not only, you know, the technology, but I think the unit economics as well to make it work.

So, I think that's what we're trying to prove out by doing these pilots, doing these engineering builds in our backyard and in our facility.

So, yeah, we're good. We're going to have to wrap up the segment of the show.

But yeah, thanks so much for coming on the show. Very interesting what you guys are doing.

We're going to definitely have to keep an eye on it.

And just so the audience knows when he says, yeah, we got a locomotive in our parking lot.

I drove by their place not knowing about Ramora about a month ago and saw a locomotive sitting in a parking lot and wondered what the heck is going on here.

So, when you mentioned a parking lot, I want the audience to be aware of that.

And we have security.

Just to be quiet.

We're good. So, thanks again. We're going to take a quick break. We'll be back to talk to you about news of the week.

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All right. We're back. Talk about things that have been going on in the industry.

I'm sure you got a list there, Gary.

I do, but I could quiz you guys.

Oh, who is us? Here we go.

All right. So this vehicle was introduced on October 2nd, 1959, keeping with the October 2nd theme of being today.

And it was in production until 1969.

Oh, because that was my first guest was Ed Sol, but 59 to 69, 10 year run.

Can you give us enough?

It is.

It is not just some random.

Like an international scout or something.

No, no, it's not. It's it's it's a vehicle that even car people would be aware of.

Not car people.

59.

Can you give us any other little.

Oh, that's it's going to okay.

That would give it away.

It's going to be so easy.

Robert Foster is correct.

A corveyor.

Wow.

Okay.

That was from the chat room.

Robert Foster.

Yeah.

Congrats, bro.

Okay. What surprised me when I looked into this was the fact that Ralph Nader's unsafe at any speed was published in 1965.

Took him a while.

So, I mean, but I mean, it took, you know, it took him a while for him to come to the conclusion.

It was it was a criticism of the rear suspension that was the problem.

Which by 65 was changed anyway.

And then but then the thing is is that even with that controversy about the vehicle that presumably the book generated,

it still had half of the life ahead of it.

It was bizarre.

But I want to I want to ask about something that is that is not news of the week that that Frank and in motor trend, you had a very interesting comparison of navigator escalade and wagon year.

Yes.

That was fascinating.

And one of the points you made in there where you were talking about the, you know, you were talking about the screens.

All of them have ginormous screens inside them.

And you were saying something about how you're wondering if a decade from now whether the hardware is going to be sufficient deal with the software.

Or talk a little bit about that.

Exactly. Well, I mean, you know, screens at home, right?

I mean, they were 120.

It was great.

You know, 720 started out.

And then it's 4,000 now.

It's 8K coming and whatever, you know, whatever you build into a car is going to be obsolete in a little while.

So there's that.

There's also the fact that, you know, it's hard to find anything to watch on that, you know, that second screen.

You know, if the person is going to watch the driver can't see it.

It's anti-social.

I don't know why you want that.

That's why I like the Lincoln one.

All the information is up there.

Everyone can look at it's weather and, you know, fuel economy and so on.

So yeah, that was my favorite of the big screens.

Yeah.

I thought it was great to say.

So what, I mean,

give us your impressions of these.

Yeah, I mean, basically, you know, navigators started that whole thing.

But escalade kind of, you know, perfected it.

And they're still hard to argue with.

I mean, power doors, you know, the V8 was the slowest, the practically one there.

But it just sounds so much better.

And, you know, it's only the slowest if your foot's on the floor.

Which I mean, how many times have you put your foot on the floor?

That's a good point.

That's a really good point.

In a powerful car anyway.

Right.

No one, you know.

So anyway, I mean, yeah, the wagon here.

Nice is riding car there, you know, far away.

I mean, I think it rides better than a Cullinan.

You know, I had them back to back once a while ago.

So, yeah, but a stodger, you know, the Lincoln and the escalade when you open the door,

they really wow you in the presence.

Yeah.

And the jeeps a little more stayed in the, it's look as beautiful, perfectly executed.

No chancy stuff, even down on the low on the door and whatever.

The other ones kind of, but yeah.

You know what I think occurred to me was that, okay.

So you have the escalade from Cadillac, which is General Motors luxury division, right?

You have the navigator from Lincoln, which is which is Ford's.

But you have a wagon here from Jeep.

Why do you know?

Well, it's kind of from Jeep.

You've got to struggle to find the word out there.

They were going to try and make that their upscale brand.

Right.

I think they've kind of backed off of that, didn't work.

No, but why isn't a Chrysler? I mean Chrysler basically has the Pacifica. Yeah, because the Jeep brand has got a whole lot more

Panache especially at the upper level than the Chrysler brand does today

I think I think that Stellantis is missing something here. I think that people who buy jeeps

Are not saying I'm buying luxury, okay?

That if you were to have something bring back the Aspen name perhaps it was the you have to remember

It was far in the way that was luxurious thing Chrysler Jeep AMC sold

At the last time the wagon here was around remember. I mean

They charged a lot more for it. They made a lot more money on it. I mean that was

So they're just trying to look at heart back to those days

But who remembers that besides

Old people I know

They don't need them to

That's that's the so I

So okay yesterday September 30th the 70th early yesterday the first so day before yesterday

75 hundred dollars went away

Earlier this week Ford hosted an event in Michigan Central

Accelerate which was about the essential economy meaning people who work with their hands and do things that

are essential to

keeping the lights on and

building cars and tool and dye and so on and so forth

And farly mentioned about how he

thought

We don't need 7500 75 thousand dollar electric vehicles nobody wants them

That it's all about smaller commuter city vehicles and that he thinks that the size of market for EVs could go down to

5% like that. What do you guys think

You hear that that's me with a lemonade in a rocker on my front porch. How did I get here?

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And

Slate get a big bunch of it right? Yeah, right. Yeah. No, I think Farley's right

I think we're going to see a big drop in in EV sales right now

We've seen that happen in other countries that yanked their

Their EV subsidies. I will point out though very interestingly

Germany slowly phased out its subsidies throughout 2023 chopped them all off at the end

Uh EV sales took a pretty big nose dive. They didn't fall by half

But they fell by a quarter and you're to date right now 2025

They're almost back to where they were before the incentives were yanked. So

Why because more EVs came out lower priced EVs came out the infrastructure got better

I think we could see the same thing happen here. I think the zeitgeist over there is completely different too though

You know, there's no make Germany great again. No weird, you know

anti-ev sentiment that we they had not been politicized right that's right. That's right. But

You know look good product solves every problem in the auto industry and if you come out with an affordable EV with a good range

I think you're going to get more and more people to start buying them but

I'm no polyanna on this. I don't see EV sales coming back

To where they are right now. I think they finished

last month at a 12% market share

Uh, you know by the end of this decade

Including pheavs the experts I've talked to you say

They could go to 20%

But it's going to take years to claw back up to that level

So I mean one of the things that I was wondering about when I was looking when I was looking at the sales numbers

So one one for Ford and one for General Motors which sort of struck me so

year-to-date

For Ford the total number of electrified vehicles. So this means their EVs as well as their hybrids was 42

242,298 vehicles

Camry alone, which is a hybrid only vehicle was

234,369 so it was a difference about 8,000 vehicles that Camry was so all of Ford

In Camry

Is I mean so and it's a sedan right nobody buys a dance. Do they oh wait a minute a whole lot of people do so I mean

Frank do you think the Toyota powertrain strategy makes a little bit more sense I mean it has made more sense going forward

You know it's hard to argue against that in the face of everything you know right now. That's for sure

Yeah, I look I think

Toyota they bet heavy on hybrids they've been backing it to the hilt

uh

Certainly in the marketplace right now outside of China and maybe even China to a degree

Uh a hybrid heavy strategy is a really good strategy to have

So another thing that I thought about is okay now we'll go to General Motors so

Your to date they've sold 144,668 electric vehicles okay in the US in the US

So then I looked at the sales of the Tahoe in the Yukon

Okay, so you combined them and they sold

154,000 so they sold a lot more now

As as we well know the margins on things like Tahoe and Yukon are

Pretty substantial some of the best in the business

So if you're making and selling more of these two things versus all of the you know the full suite of

You know from from blazer EVs to the optique from cattle

so it's like

Isn't it General Motors fiduciary responsibility to make more

Tahoe's and Yukon's in fewer electric vehicles

Depends where you where you want to take your company in the future

I mean I would argue that electric is the future

I believe we're going to get there because

You're going to see the cost of internal combustion engine power trains only go up

You know, we talked about tier four criteria emissions the industry still not there yet

It's probably going to have to go to gasoline our particulate filters to be able to get there

There's even talk that maybe they're going to have to go with

Uh, heated catalysts, you know to prevent cold start emissions

Which is where the most emissions come out and

Interestingly enough while the the the Trump administration has eviscerated anything to do with EVs

It has not touched tier four criteria emissions. So the industry is going to be putting

More cost into EV into ice at the same time. We're still continuing to see improvements made in beves

Costs coming out of them and you know the the points going to cross we're very close to it in the US market

Where it's going to be cheaper to make an EV than it is to make

Uh, an internal combustion power train vehicle and so

For big vehicles that tow or haul far least right, you know, you got to put a massive battery in there

It's really hard to pencil the numbers, but in anything that's you know for everyday commuting or running around with not a long trips

EVs are only going to make more and more sense to more and more customers. It's the future

Sure seems that way

That EVs are the future and and when is the future

That's a sliding scale isn't it

I mean, I'll tell you that at the IAA a couple weeks ago horse power train, you know this new outfit to the cell range extenders and that sort of thing

Big splash a whole bunch of

They got a one an engine. There's like a briefcase size

Yeah, horses uh a spin-off that Renault started they put all their power ice power train into horse

Glee said we're interested Volvo was the first part of Glee to be involved

In fact, we're going to have a guy from horse on the show and two weeks

And they've got an office here in Detroit

And they tell me

People are knocking on their doors here in Detroit saying they're interested in in that

Well, oh speaking of Germany and we in the show last week we talked about this a little bit and um

So ZF has announced that it is going to be laying off 14,000 people by 2030

Today, they basically announced

Where

7,900 of these people are coming from that's from their electrified power train technology division

And this is a quote from their announcement

Development activities in the product groups including on-board chargers, deacon, verters, and electric beam axles e-beam will be discontinued

While the development of innovative products such as thermos, the ZF thermal management system, or the

AHPEvo plug-in hybrid transmission will be consistently driven forward

So basically the e-beam axle which consists of a motor and an inverter and a drive system

So basically plug this into your pickup truck and you've got an EV

gone gone and you know this this thermal management system which is is basically to

manage the

Temperatures of electrical systems to make them more efficient that'll stay but

They're really counting on this evo transmission which is for hybrids and they point out

You don't need a plug

It's better than it's

um

lighter and cheaper than a plug-in hybrid transmission

Yeah, you know

The transmission doesn't care if there's a big battery or small one

So I don't know where they mean by that but well, there's some off the transmission itself

So if you have a p-have setup and I suppose the p-have would have a bigger electric motor

To make it drive, you know, right yeah

Here's the problem is that too many suppliers jumped in with one of these e-beam axles

You know ZF has got one American axle well showed one Magnus showed one

I think Dana showed one and you know they were all hoping to get the business right and I

I don't know if any of the automakers have have sourced that maybe they have but

Yeah, look the

Definitely in the US right now with the the current administration

It's it's yanking anything it can do that will

Prevent EVs from being adopted

They're not growing as fast as was thought would be the case in Europe even though I mentioned in certain countries like Germany

Denmark and the like

Evie saw sales are are quite strong but throughout the continent

I think they're running at about

15 or 16 percent market share so you know probably roughly double us

But still not enough

But uh, I say I still say give it time

Uh the days of uh the ice uh

Market segment are only going to I should say the market segment for ice is only going to shrink

That for beb is going to grow and didn't I just hear aren't we like 120 per kilowatt hour?

I think right now because for a long time he said that at a hundred dollars

It's about parity if you get much below that it's you know

It's good. I yeah right and and it depends are you talking about the cost of the sell or you're talking about the pack

So we should talk packs cost because that's the the real thing

Yeah, I think we're we're very close to a hundred dollars per kilowatt hour

But the the newest numbers I'm hearing is

It's really got to be 60 to 70 dollars

Automate your side or the customer side on

Well, I'm talking

Uh, yeah, Sean Sean saying is it the the customer or to the uh the automaker uh

Yeah, the smaller number is for cost repair

Or wait no the other way around yeah, yeah, yeah, smaller number automaker bigger number

Yeah, like one one hundred to one twenty I think it's where it starts reaching

Yeah, and anyway the the powertrain experts I've talked to have said before this decade is out

We will have crossed this point in the United States where it's cheaper to make above than a nice vehicle

And you keep seeing the new little incremental changes like there's one now

Electrode to pack right yeah, this is the new thing you're we're going to just vacuum pack the two electrodes

And with a little electron in between them and you stack those in there and now you've you know

They're energy densities improved and whatever

Well, you know the fastest way to take the cost out of a bev is use a smaller battery

Yeah, and so there's a lot of really interesting stuff going on on total systems

Approach of making a vehicle more efficient and I saw a presentation recently where

One of the suggestions is putting carbon nanotubes embedded in the windshield

So that you can use a fraction of the energy to deice or defog the windshield and instead of

Heating the entire passenger cabin you just have these micro jets that are blowing warm air on the passengers

And and the arm rests will radiate heat so again

You can downsize the battery and and every increment you I mean you can say thousands of dollars a cost out of a battery just by making it smaller

But imagine the cost of replacing that windshield

Well, that's a big problem if light will just become the Moser variable company on earth. Yeah

And placing all these windshields look all that eight-ass stuff mounted behind it is already

Sent the price of windshield replacement up dramatically. Yeah

So okay

The car companies all did fairly well. I mean even Stellantis broke its losing streak of in the third quarter by actually having a

positive result

6%

What do you guys think accounts for the overall

sales that

These companies have especially since they you know, we we've talked a lot on the show about the affordability crisis and

Hordeon cloud theory today's

average price of a vehicle is 50 grand

Yeah, well, I mean

Part of what drove good sales last month was a mad rush to buy EV

Sales shot up more than 20% as we talked about they they hit over 12% market share they had been down around 8%

So and there was like

Well over I want to say four hundred and fifty four hundred and thirty thousand over four hundred thousand EV sold

Just last month. I mean it was a banner month and I I think that had a lot to do with it

What do you think Frank? I'm with you there. I mean I think we're gonna see just as I would like to know

If the German when those numbers crying how much of that was inflated before then they had a longer ramp down

They did okay, so it might not have had the same situation, but right right it was

It was it went down in phases over the course of a year

So you didn't have a mad rush like we just did here

And it'll be interesting, you know, GM and Ford pulled a really slick

Their dealers have got all these EVs in inventory, right?

And they want to be able to get the $7500

So literally last minute GM financial and Ford credit, which is their finance in house finance arms

ran out and made deposits on every one of those EV

How many of you suppose it is I don't know, but it's how long will it pay what's how many days supply

You know when is the $7500 really run out for all of those cars yeah, so are those cars all gonna be demos now

Are they all have an in-service date with the warranty starting

When that that's a really good question that I don't know, but all I do know is that

You know, Jim and Ford said they cleared this with the IRS

And so now dealers can offer

Elise with that $7500 discount baked into it for everything. There's also for sales too, right?

Um, I don't know why it this does not apply to a sale

Well a sale is a sale, right? And if the sale happens after the incentives expired, you know, sorry Charlie

But if you come in to do a lease on an EV right now, which I would argue is the best way to do it anyway

Because in three years there's gonna be better EVs on the market

So you can go get a lease right now from Jim and Ford

For an EV that's got the $7500 baked into it. So so what does this do? Okay, so so let's say it's a Mach E and it's the Mach E that

They have on the lot, which I'm sure they so lots of them the last few days, but um

What does this do to the new Mach E's that

Get shipped into the dealership to somebody say no, no, no, I don't want one of those

I want one of those that's 75 gold one. Yeah, so they're gonna have to do something

I mean the ionic five just had

Just counts applied to it in the

$69,000 range. I think yeah huge huge cuts. So yeah, I mean

With the new Mach E they're gonna have to do something whether you put more standard equipment on you know

That had been optional or you you've got some sort of finance deal. There's going to be deals sweetened it up somehow to where you gotta have this one now

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Probably more in a color

So what else did we have happening in this industry this week? Well, I'll tell you one thing

And I'd like to get your opinion on this Frank. I've been very bullish on e-revs

And you know because if you're worried about range anxiety

Don't worry. It's got a gasoline engine you fill it up

It's gonna charge the battery you keep on going if you want to drive on electricity plug it in every night

You can drive 70 miles or they're about and

And I thought for the American market with big pickups and big SUVs and towing and all that and e-rev

Seems to make all the sense in the world

where you're just by a top

But now I'm starting to hear that maybe e-revs are not well suited

For the American market that in China they're doing very well in China that segment is growing

very very quickly

That you know if you're in a smaller vehicle

And you're not driving long distances at 70 to 80 miles an hour

And e-rev can be perfect and I'm told that the e-revs in China you can barely hear the engine

You don't hear it start you don't hear it running whereas if you're going to have an e-rev

Let's say a pickup pulling a trailer going up a grade that engines

going at max power and

And it's going to keep on running even when you back off the throttle pedal or if you put your foot back

It's still going to be at the same rpm. So you're going to have this

This drone that's going to be tamped down and maybe noise cancel

Canceled to make it quiet

But you're going to hear this running in the background and it's got no relation to what you're your right foot's doing on the throttle. So

That was everyone's complaint with the CVTs early on right? Yeah, the motorboating or whatever right

So yeah, I mean that's and I haven't been in one to see you know how quiet did they get that right

And start by or whatever you know hooked up to that thing. I don't know

So because I've talked to people who have driven the e-revs or the reaves as they call them in China

The extended range ones and they go oh my gosh. It's so quiet. It's so well done

But I've talked to others doing development work here and they're like

I don't know if our customer is going to go for this

Yeah, so do you think the Chinese vehicles are as loud as the ones that are being developed here yet

They're not it's it's the duty cycle. It's the size of the vehicle. So like you know

Stellantis has said they're going to come out with an e-rev even though it's been pushed back a year

And I wouldn't be surprised if it gets pushed back again with a naturally aspirated three points

six liter of V6

Whereas in China they're using

One and a half liter turbos, but these aren't sedans versus

Skellantis is putting it in in a

full-size pickup. Yeah, the Chinese

Applications are in passenger sedans and that horsepower

Thing was this big that horse has the four cylinder now three cylinder. Yeah, you know

It's probably a little smoother than that one way

I bet that and that they made it so that it'll fit

You know where

Under your front or whatever if you have an electric car

You know ready to go and you're like, you know pulling the rip cord on that idea

This will go right in the same spot and then it's out of the way and it's isolated and so on, you know

You know the Nissan area

was

an e-rev in japan or it was offered as an e-rev in japan, you know extended range and it was

My understanding you know suggested that the American arm of Nissan could take it and they were

Yeah, no thanks

You drive these things at 7080 miles an hour the batteries depleted that things running all the time. It's making too much noise

So I so you're you're souring on e-ros well what I'm what I'm realizing now as I learn more about them is

From a duty cycle standpoint in full-size trucks and SUVs the way Americans drive

It may not be the solution

So I've got to ask

Is autonomy over as well? No, autonomy is not over

This is the year of autonomy accordion. Yeah, because we're seeing rapid global expansion of robotaxe service

And global is the key word and it's happening in the US

It's happening in the Middle East it's happening in China and a few other countries too and it's it's

No, I have not I'm dying too. I went to Austin and we tried to do a race

You know between a Tesla robotaxe and a Waymo he could never get them to come at the same time

Well, we didn't realize is that the Waymo's are not allowed on the highway yet

so if you

Pick a route that would be best served by a highway

They wouldn't send you one of those and we were trying to utilize that whole

You know like a you know 15-minute ride up up the whole you know service area and so we never got one

Anyway, um big difference in the two of those

um

The we all there were a lot of glitches with

The robotaxe which still has a a guy riding shotgun

This is the Tesla car. Yeah, that's it's just a model Y that's got a little bit of extra stuff on it not much

But it was smoother that it you know what was striking and startling is that Waymo

With a zillion

Lidars and stuff all right. It knows where everything is all the time

So it'll whip up and stop and go

Faster than you would because you'd be like

Do I look this way and when I was looking at it come on you want to look both ways a couple times whatever this thing already knows

So

Runs right out there, you know, it was pretty impressive and not as smooth as the the Tesla for some reason

But calibration calibration calibration yeah

And maybe that wasn't the their number one worry with that thing so

You know, I read something this week that you know, there's there's an issue about um what happens for a moving violation

Right there's a U-turn right so

That hasn't been worked out yet no so and this is for a Waymo vehicle my question though is

The U-turn that that Waymo pulled

Did it interrupt traffic? Did it interrupt pedestrians was it just an innocuous U-turn

And did the cops go work and I pull that guy over or you know, I'd like to be posted because I mean

It's unless it's forbidden. I think in a lot of cases. It's illegal. It is legal

So I yeah, I don't know what the situation was down there

It for me if it didn't interfere with traffic or pedestrians or anything

It's kind of a big deal. Okay, but what if what if you were driving that vehicle yeah my guys like

There you go. Yeah, I'd say officer number one. Yeah, I

It depends look if I cut somebody off. It's like yeah, I deserve a ticket if I wasn't aware that U-turn was not

uh legal and

If I didn't what is the only about ignorance not being a

If that you lose or I'll tell you because I've had some recent experience with this if a cop's having a bad day

They're out looking for things to pull people over for. I'm sorry. That's just human nature. It's true

And so

Was this guy having a bad day and going I'm going after that car

Right now a car Subaru and Beaverton sign for the 2025 Subaru share the love event so much love

We think about Subaru loves to care Subaru loves pets

Subaru loves pets is one of our love promised pillars because we love pets and it's our way of giving back to the community

Subaru loves learning. Yeah, everybody should get the same opportunity and I feels really good to have supply that

We did all these events throughout the year and now here we are at the

2025 Subaru share the love event at car Subaru and Beaverton

It is a great time

It's the culmination of everything that we've done to give back to the community and now

Not only can you get a great new Subaru, but you'll know that you're doing good for the community during this time

$350 donation goes to some great national charities and a couple local ones here

Providence Child Center and the Sunshine Division and now we're adding in the two

Mount Hood fusion passes just in time for the ski season

It's just a great time to get a car and you can't understate the love because that's really what it's all about

It's a great way to end the year at car Subaru and Beaverton with you all the way every mile every day

So isn't this putting a like a slight

Reduction in the possibility of us being the year of our time and all because I'm sure what Waymo did

They went into their algorithms and said don't do you turn and there is no

Nobody doesn't know that's a Waymo nobody doesn't know that's an autonomous car right

So they must have wanted to pull over an autonomous car or try to or whatever you know

Yeah, look if the cops suspect anything in a car they'll look for any reason to pull it over

You know so that they have you know cause

But and then maybe yeah, you're right, you know with all the whizzing things on you know

The the Tesla's by contrast no, I mean they just say robo taxi kind of

You know quietly on the door you would know that that wasn't yeah, so it was the guy doing who was in the car

He was there as we noticed

When one of them started to make a left turn into a restaurant and stopped and just like kind of went open loop from it

He hopped out and went around and got in the car

Finishing who's kind of blocking traffic a little bit

So that's what they're there for and to you know they they can force it to stop and pull over

With a push of a button

Yeah, it's that kind of thing

We're not supposed to talk they're not supposed to talk to the people in the back seat really no

But you never got the motor trend race between no and we weren't able to go in the same place at the same time

um

On this one, but we got enough rides in the two of them to kind of assess them and we came back saying yeah the Waymo is

Got a stronger brighter future

So you personally would you use robo tax in the future? Yeah, and I think you we the people I've talked to that live in the areas where these are going

They're like yes, it's novel the first few times, but after that, you know

You're just looking at your phone. You're not paying any attention

Just like you wouldn't if somebody was driving, you know, it becomes second nature

Real good

So you got anything else burning or nope, okay, we're gonna wrap it up done

Frank Marcus great to have you back on so you have to be back always yeah, no, this is really good

Gary always having a lot of fun with you and I hope all of you enjoyed having tuned in

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Right now a car Subaru and Beaverton sign for the 2025 Subaru share the love event so much love

We think about Subaru loves to care Subaru loves pets

Subaru loves pets is one of our love promise pillars because we love pets

And it's our way of giving back to the community

Subaru loves learning yeah, everybody should get the same opportunity and it feels really good to have supply that

We did all these events throughout the year and now here we are at the

2025 Subaru share the love event at car Subaru and Beaverton

It is a great time

It's the culmination of everything that we've done to give back to the community

And now not only can you get a great new Subaru

But you'll know that you're doing good for the community during this time

350 dollar donation goes to some great national charities and a couple local ones here

Providence Child Center and the Sunshine Division and now we're adding in the two

Mount Hood fusion passes just in time for the ski season

It's just a great time to get a car and you can't understate the love because that's really what it's all about

It's a great way to end the year at car Subaru and Beaverton with you all the way every mile every day

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