A deep dive into Horace Powertrain, a new joint venture formed from the powertrain divisions of Renault, Volvo, and Geely, focusing on next-generation engines and hybrid solutions. Tom Lewis discusses the company's strategy to innovate in small displacement, high-efficiency engines while avoiding the V8 market. The conversation touches on the evolving automotive landscape, the importance of internal combustion engines in the near future, and the challenges faced by legacy automakers in transitioning to electric vehicles. Insights into the competitive dynamics of the automotive industry and the potential for Horace to disrupt traditional powertrain operations are also explored.
"So, we’re a new joint venture with 125 years of experience. So, essentially, we are the carve out of the powertrain divisions of Renault, Volvo, and Geely."
The powertrain is everything that moves a car: the engine, gears, and parts that get power to the wheels. It’s what makes a car go forward or backward.
The powertrain is the system that delivers power from the engine to the wheels, including the engine, transmission, driveshafts, and differential. It determines a vehicle’s performance, efficiency, and drivetrain layout.
"We’re focused big on hybrids and high efficiency, internal combustion engines, turbocharged engines. I would say also we’re kind of more in the small displacement space."
A small displacement engine is a smaller, lighter engine that uses less fuel. It’s common in city cars and hybrids.
Small displacement engines have a lower total volume of all cylinders, typically 1.0 to 2.0 liters, and are designed for better fuel economy and lower emissions.
"We’re focused big on hybrids and high efficiency, internal combustion engines, turbocharged engines."
A turbocharged engine has a small turbine that pushes extra air into the engine, so it can burn more fuel and produce more power.
A turbocharged engine uses a turbine-driven compressor to force more air into the combustion chamber, increasing power output without significantly raising engine size.
"[413.0s] That's like Formula One levels.
[415.0s] Yes."
Formula One is the top level of car racing, where cars are built to be as fast and powerful as possible. People often use it as a comparison for how advanced or efficient something is.
Formula One is the highest class of single-seat, open-wheel racing governed by the FIA. It features cutting‑edge technology and extremely high power‑to‑weight ratios, often used as a benchmark for performance standards.
"[656.0s] Okay, we know what the Hemi, those are toys, right?"
A Hemi engine is a type of car engine that has a special shape inside the cylinder, which helps it make more power and sound unique.
The Hemi is a family of hemispherical combustion chamber engines produced by Chrysler and its subsidiaries, known for high power output and distinctive sound.
A plug‑in hybrid is a car that can run on both gasoline and electric power. You can charge its battery from a wall outlet, so it can drive some miles without using gas.
A plug‑in hybrid is a vehicle that combines an internal combustion engine with an electric motor and a battery that can be charged from the grid, allowing it to drive on electricity alone for short distances.
"or horse supplied that three and a half liter turbo V6."
A 3.5‑liter turbo V6 is a type of engine with six cylinders that uses a small turbine to make it stronger. It’s common in many modern cars for good power and efficiency.
A 3.5‑liter turbocharged V6 engine is a six‑cylinder powerplant that uses a turbine to increase air intake, boosting horsepower and torque while keeping displacement moderate.
"[1020.0s] And one of them is extended, extended range EVs."
An extended‑range EV is a car that runs on batteries for a while, then uses a small engine to keep going if the battery runs low. It’s like having a backup power source.
Extended‑range electric vehicles (EREVs) combine a small internal combustion engine or generator with an electric motor and battery, allowing the car to run on electricity for a limited distance before switching to the engine.
"And so you can imagine the use case behind that is a lot of companies have made these Bev platforms."
A BEV platform is the basic design of a car that runs only on electric power, with batteries and motors built into its structure.
BEV stands for Battery Electric Vehicle; a BEV platform refers to the underlying chassis, power electronics, and battery architecture designed specifically for fully electric cars.
"[1075.0s] the infotainment features, ADAS features, all the latest and greatest tech,"
ADAS are safety features that help the driver by warning them or even taking control in certain situations, like keeping you in your lane or stopping the car if a collision is imminent.
ADAS stands for Advanced Driver Assistance Systems, which include technologies like lane‑keeping assist, adaptive cruise control, and automatic emergency braking.
"[1462.0s] Why did you guys avoid the three cylinder thing? [1465.0s] Because I mean, a lot of manufacturers are looking at that, reduces parts and reduces internal friction and things like that."
A four-cylinder engine is a type of car engine that has four places where fuel burns to make power. Most everyday cars use this kind of engine because it works well and isn’t too expensive.
A four-cylinder engine has four combustion chambers (cylinders) arranged in a line or V-shape. It is common in many cars because it balances power, efficiency, and cost.
"[1465.0s] Because I mean, a lot of manufacturers are looking at that, reduces parts and reduces internal friction and things like that. [1473.0s] Why fours instead of three?"
A three-cylinder engine has only three places where fuel burns to make power. It’s lighter and can use less gas, but it may feel a bit rougher than engines with more cylinders.
A three-cylinder engine has three combustion chambers and is often used in small cars or hybrids to improve fuel economy and reduce weight. It can be less smooth than a four-cylinder but is lighter and cheaper.
"[1473.0s] Why fours instead of three? [1475.0s] We've got the fours S-10, three cylinder."
The Ford S-10 is a small pickup truck made by the American company Ford. It was sold in the 1980s and 1990s and is known for being easy to drive and useful for light jobs.
The Ford S-10 is a compact pickup truck produced by Ford from 1982 to 1997. It was popular in the U.S. and Canada for its small size, fuel efficiency, and versatility as a light-duty work vehicle.
"[1667.0s] Europe, you know, with Renault, a lot of, you know, the regulations pushing EVs."
Renault is a car company from France that makes many different kinds of cars, like small city cars and bigger family cars.
Renault is a French automotive manufacturer known for producing a wide range of cars, from compact city vehicles to larger family sedans and commercial vans.
"I mean, that's separate from us, but I would say, you know, within a hybrid transmission."
A hybrid transmission helps a car use both gasoline and electric power, making it more fuel‑efficient.
A hybrid transmission is a gearbox that manages power from both an internal combustion engine and one or more electric motors, allowing the vehicle to switch between or combine power sources for efficiency.
"[1956.0s] I mean, an Alfa Romeo or something like that might want something with a little more, [1960.0s] I don't know, a little more vibratory quality or a little more sound quality."
Alfa Romeo is a car brand from Italy that makes cars known for their good looks and fun to drive. They have been making cars for over a century and also compete in racing.
Alfa Romeo is an Italian automotive manufacturer founded in 1910, renowned for its stylish designs and spirited driving dynamics. The brand has a long racing heritage and produces both luxury sedans and high-performance sports cars.
"[2032.0s] How close can you get there's a way we can tune that or change gear ratios,
[2036.0s] you know, in order to meet what they need within our portfolio."
Gear ratios decide how the engine’s power is translated to the wheels. Changing them can make a car accelerate faster or reach higher speeds, depending on what you want.
Gear ratios determine how many times the engine turns for each turn of the wheels, affecting acceleration and top speed. Adjusting them can tailor a vehicle’s performance to specific needs.
"Richdon weatherpeak tires for the 70,000 mile limited warranty."
Richdon Weatherpeak Tires makes special tires that are tough and give good traction, especially for people who like fast cars or racing.
Richdon Weatherpeak Tires is a manufacturer of high-performance tires known for their durability and grip, often used in racing and enthusiast circles.
"So, what about if somebody, you know, brought back the cavalier that had an internal combustion"
The Dodge Cavalier is a small car that was sold in the U.S. during the 1980s and early 1990s. It was cheap to buy and keep running, which made it popular among budget‑conscious drivers.
The Dodge Cavalier was a compact car produced by Chrysler’s Dodge brand in the 1980s and early 1990s. It was known for its affordability and simple, reliable design.
"I've got one correction for you guys from the comments section GM does have a hybrid"
GM makes a lot of cars you might see on the road, like Chevrolets and Cadillacs. They also make trucks and SUVs.
General Motors (GM) is one of the largest automobile manufacturers in the world, known for brands like Chevrolet, Buick, GMC, and Cadillac.
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Auto line after hours is brought to you by Bridgestone Tires, Solutions for Your Journey. V, John, welcome back. I know I've been gone for the last couple of shows and on vacation, had a great time, but now my batteries have been recharged. I am so glad to be back here on the set. Well, the audience is prep for your journey. Maybe they are. So let's talk everybody who's on the show today. We've got Tom Lewis from home.
We're going to get into what Horace is all about. We've got Jack Kebler here. How do we identify you, Jack? Former journalists, you were in what? Product planning at General Motors? Product planning and vehicle development? Yeah, okay. That was 12 or 13 years. Yeah, and now doing consulting. Consulting? Yeah, okay. Good. Several different makers. Cool. All right. Horace, just like the four-legged creature. That's right. Yeah. So,
tell the audience what this is. Yeah, absolutely. So, we're Horace powertrain. So, we're a new joint venture with 125 years of experience. So, essentially, we are the carve out of the powertrain divisions of Renault, Volvo, and Geely. So, they took out their powertrain groups. We formed a joint venture, and now we make next generation powertrain solutions. We sell that to external companies.
So, let's go through your product portfolio a little bit. You make both engines and transmissions, right? That's right. Yeah. So, and we continue to make engines and transmissions for these previous companies for a new Volvo and Geely. Of course, we're focused big on hybrids and high efficiency, internal combustion engines, turbocharged engines. I would say also we're kind of more in the small displacement space. Yeah, so 2.0 liter, 1.0 liter.
I would say looking in North America and our customer base here, we're not interested in competing in V8 engines. It is cool to see a resurgence there. I love to see the hemi back in the ram truck and to see that sell out. We're not playing in that space. We're playing more in high efficient engines, hybrids, hybrid transmissions, and internal combustion engines.
So, the powertrain is commodity. Yeah, exactly. So, yeah, so let me set the stage a little bit for the discussion. I want to see us get into here a decade ago, Sergio Marcian, CEO of Fiat Chrysler, wrote a significant white paper. And you guys all know this, confessions of a capital junkie. And in it, he said, look, GM Ford and Chrysler build almost exactly the same powertrain lineup, same engines, same transmissions.
You know, you take any of their, I'll say, two liter engines. They're all within a fraction of a millimeter of size. They weigh the same. They produce the same emissions. They produce the same fuel efficiency more or less. And guess what? 90% of the car buying public could care less what's under the hood, especially when it comes to transmissions. They never bought a car or a truck based on the transmission that it had.
And so, Renault really gets the credit, Luca Domeo, right? The CEO of Renault said, he read the paper, obviously, and said, you know, this is a great idea. Why don't we just spin this off? And that's how horse was created. And that Geely quickly said, hey, sign us up. We want to be there and pull Volvo along with them, or maybe it went the other way around. But I'm intrigued that horse has got an office in Detroit.
Because for GM Ford and Stellantis, or even if it's just GM and Ford, the opportunity to spin off their powertrain operations or at least a portion of it could free up billions in capital that they could invest elsewhere.
Absolutely.
What kind of phone calls are you getting here? That horse is open to an office in Detroit.
It's been busy, John. So I can tell you that. I mean, we, we have a ton of opportunities here, very interesting conversations, very mature conversations about business in the United States.
Yeah. So such that we're far along the path in defining our production strategy. So plant in the US, like I said, an office in Michigan. So currently, you know, I'm just working from home in Brighton, Michigan.
But, you know, I'm deep in the study to establish an office for, you know, what will become the initial phase of our tech center and then we'll expand to something a bit bigger, you know, with garage spaces, space and labs.
But that's exactly the point. Yeah. So there's still going to be a lot of internal combustion engines into the midterm, you know, by our projections.
And even these are some old projections, it's even changing into a more internal combustion way, especially in North America.
But in our latest, we expect six out of 10 vehicles produced in 2040 globally to have an internal combustion engine.
That includes plugins, e-revs, whatever happens to be.
Yeah. Absolutely.
Not just pure rice.
Yeah. That's right. So somebody has to take care of that.
And somebody needs to continue to iterate development and make these very efficient engines.
Right. You know, five years ago, a lot of companies have got to a point where they said, this is our last generation of internal combustion engine, you know, I was working for tier one at that time.
Yeah.
That's right.
This is your last chance to get in as a tier one, because we're not changing anything since after this, you know.
And of course, along the way, our internal companies continue to innovate.
You know, and we have made huge strides.
And so we announced it, IA recently, you know, our current internal combustion engines are reaching 43 and a half percent BTE.
But that's for an e-rev application.
Correct. That's for a hybrid application.
Yeah. But e-rev particular, I mean, you're using these as not extended range.
Yeah.
It's beyond extended range.
These are just with dedicated hybrid transmissions.
Really.
Yeah.
That's the same ballpark as Toyota, isn't it?
Well, we're going beyond that, too.
And I can't speak for Toyota to be honest.
But currently, we are developing engines that are more efficient than that, trusting a 45 percent.
And we do have some developments underway to even pass 50 percent, which was thought to be impossible.
That's like Formula One levels.
Yes.
Because, you know, Formula One levels, almost as if cost is no objective or no hindrance, right?
Right.
And you can throw everything in the kitchen sink at it.
And they're only at about 51 percent, I want to say.
And I'm glad you mentioned cost.
Because I mean, also we've been able to innovate over the last five years has been tremendous in terms of cost.
And I mean, this is where we see really the speed of our companies.
You know, we've got Renault, where their powertrain group is in Spain.
You know, and now part of horse powertrain and, you know, Volvo and Sweden, Gili and China.
The collaboration of these groups has been tremendous, John.
And I think, you know, take for example, one of the conversations that we've been having, you know, with a customer over the past, you know, half a year.
Within that time, we've been able to iterate our technology and release something such that we're able to bring the cost down 20 percent.
Bring the weight down 10 percent.
No, it's just by designing cost out, or is it just simply the scale that you're getting with these companies mashing their powertrain ops together?
It's both, but mainly design.
So it's mainly design elements due to the, you know, the integration, the further integration that we did, bringing down signs, taking out material.
Any example of how you took cost out?
Well, reducing material is certainly, you know, a big part of that's integrating different functions within the electronics, for sure.
Now, when you talk about scale too, being that we have been pushing, you know, scale and a future, a bright future for our supply base too, we've been working with our suppliers to bring in more efficient, higher technology into our electronics and into the components that we purchase.
So there's quite a bit going on there.
What about fuels? Are you, we are, burn anything or, I mean, ethanol, ethanol, CNG, LPG, whatever.
So, yeah, we definitely do have some studies for a low carbon fuels, right?
That's part of what the future is looking at.
Right.
And we have some big studies for methanol, for hydrogen combustion as well.
Cream methanol.
Yeah.
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So, so okay.
All this exuberance aside, if I think about what is available out there right now, and I think about what's been available for the last many years, okay.
The OEMs basically say part of what makes a car a Chevy or a Ford or a Dodge is what we put under the hood.
There's been very little purchase of, I mean, yeah, everybody buys pistons, you can buy con rods, you can buy blocks, let's say.
But when you get right down to it, the engine is the heart and soul of a given company.
And so, who is interested in buying this from you?
You're basically giving them a package, right, and saying, hey, put that under your hood.
Gary, I think maybe the technology has evolved to the point where it's gotten so smooth, so quiet, so fuel-efficient.
And all those manufacturers are sort of, they're coming to the same point technically.
The powertrain isn't really, it's not on your radar screen anymore as a consumer.
You're just looking for something that's close to smooth, right?
Well, but at the very top of the show, he said he was glad that the Hemi is back.
Okay, we know what the Hemi, those are toys, right?
Right, but I mean, but so, you know, doesn't Ford still promote the Echo Boost engine?
Yes.
Okay, and that's nothing special.
Smooth and quiet.
It's not a commodity, but...
No, but Chrysler has come out with another hurricane engine.
Okay, I mean, these people don't want it, they want the Hemi.
Well, my point is, it's absolutely true.
But I mean, there's character given to vehicles by and large.
I mean, we can even see in batteries.
I mean, so, Altium batteries.
I mean, who cares about that?
Well, obviously, the OEM thinks it's important enough to...
Well, they did because now they've dropped that whole branding after.
Well, characters still available though, right?
I mean, that can be tuned in by, you know, a good NVH squad at whatever car manufacturer you're working with, right?
Yeah.
And I think that we will see a kind of resurgence of people caring about what's under the hood,
especially with e-revs and these more advanced hybrids.
They are getting more exciting, yeah?
And I think when you can offer, you know, smooth power delivery and the,
let's say, the feel of a battery electric vehicle,
but the security of having extended range, that's cool.
And I think that is a selling point, you know?
And if you can have an efficient version of that, you know, readily available
from a company like course powertrain,
it makes it easier for an OEM to integrate that.
You know, because like you said, they do have to figure out what they're spending their money on.
And connected services are huge, you know,
ADAS and autonomous driving, even though it kind of took a bit of a dip there
in terms of, you know, implementation, it's still very important.
And I mean, higher levels of ADAS is becoming more standard.
So companies have a limited amount of funds and resources
where they have to focus their energy on creating USPs and the brand image.
But this is going to be an important point to consumers.
And gosh, it'd be nice just to get that from a tier one like course powertrain
at a lower cost of entry.
Sure. And, you know, Gary, you make a really good point.
The engine still is kind of the heart of everything.
But I don't know was that it matters to 90% of the car buying public.
Whether horse supplied that plug in hybrid,
or horse supplied that e-rev, or horse supplied that three and a half liter turbo V6.
But when it comes to the other 10%, the noisy 10%.
The gear heads, right?
Yeah.
That engine matters a lot.
It's a hammy.
They don't want the hurricane.
Even though the hurricane is more powerful and more fuel efficient,
they'll pay an extra 2000 bucks to have a hammy under the hood instead of that.
That's true.
And, you know, it's aimed with GM's V8s, Ford's V8s.
And I'm guessing maybe that's one reason why you're avoiding V8s.
But play this scenario out for me.
How do you think legacy OEMs might approach this?
Would they say, here, horse, you take everything from one liter to three and a half liters.
Well, we're going to keep the performance stuff in the house.
How do you think they would play out?
It's effectively, it's like a band aid, isn't it?
In terms of its capacity without the investment.
In other words, they're going to need these engines for sure.
And you can supply them.
And what, like we've just been talking about, it's this stuff, this texture that you guys are talking about.
It's really not on the customer's radar screen.
Yeah.
But no, I think you're absolutely right, John.
I think it's that sweet spot, you know, that's where they don't have this legacy of big V8s
and the following behind it and high profitability, I'm sure as well.
You know, we can provide these engines that, you know, probably are ones that people care less about.
What's under the hood?
They more care about the fuel efficiency, the range, you know, for these e-revs.
We need a point B charging, charging speed, you know.
And having that optionality to say, all right, I'm either going to add gas to my vehicle,
or I'm going to charge, you know, depending on their preference.
And I think it's all coming down to user interface that stays.
That's what they care about more than anything.
Yeah.
The electronic connection.
Oh, that's true too.
Yeah, and I came from a background in that space too.
So I definitely have, you know, a spot in my heart for infotainments and connectivity.
So because of course, provide these legacy automakers with engines at roughly the same cost
that they're doing it now.
And I'm thinking that with your innovation and your scale that you could achieve,
you could probably give them an inch, sell them an engine, maybe even cheaper
than they could get themselves.
That's the big point, John, because we will have bigger scale because we have,
of course, all of these different companies.
How many engines are sourced making right now?
It's a big number, right?
Yeah.
So we have 17 plants.
I believe it's eight million engines a year.
Eight million a year.
Yeah.
And you're a startup.
Right.
So I mean, have a few more legacy OEMs jump on board.
Your scale is going to be enormous.
So I would think you could sell them engines cheaper than they can make them.
Absolutely.
Is it okay to mention some of the manufacturers you're already selling too?
So you've got like, you know, probably docky, you know, blah blah.
Yeah.
And probably there's, there's more that we can say.
And so of course, there's many things going on.
Of course, there's many things going on.
We saw needs to be cheaper, say these bends.
That's right.
Yeah.
So you know well, we really have it.
Yeah, Mercedes, we announced that we're providing the engine for the next generation, a class.
So I mean, we've been talking here about price, but I mean, it seems to me that you guys are developing some clever technology that others aren't.
So I see you guys came out with the horse C-15.
Yeah.
And you package it and it's described as the dimensions of a large briefcase.
That's right.
So I mean, tell us about what this thing does.
So that's, so we have a few different areas of focus, right?
And one of them is extended, extended range EVs.
So that's all about making these systems as compact as possible.
And of course, maximizing the efficiency for that specific operating range.
You know, to just charge the battery, right?
It runs like a pretty steady state speed, too.
That's right.
I mean, everything else about the way the vehicle moves is all electronically controlled.
Right.
And so you can imagine the use case behind that is a lot of companies have made these Bev platforms.
You know, when they have frunks and they have small front ends, you know,
and I've kind of optimized space around this electric platform.
So now that the consumer is saying, wait a second.
I'm not ready to make the big jump.
And there's a, you know, an obvious pushback to hybrids.
There just isn't the space to put an engine.
You know, one of their traditional engines into that.
So they have a choice to make.
They're either going to scrap this platform, which has the newest connectivity,
the infotainment features, ADAS features, all the latest and greatest tech,
and still sell the legacy platform in parallel, like we've seen happen recently,
or they have to figure out a way to get an engine that does fit.
You know, and that's what we can bring.
We can bring something that can fit into a creative space.
So maybe it's not in the front.
You know, maybe it's behind the wheels in the back, you know.
Because of the compactness of the solutions that we're bringing,
and it opens up options to fit into Bev platforms.
So you can think of Bev in just take the front and say, we're sticking this back here instead.
You know what I mean?
We're putting our briefcase in the front.
And you guys really need to make very little way in the terms of packaging for this vehicle.
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And that's one way to do it.
But one of the cool things is that even the EV platforms here in North America
are still pretty big vehicles.
So there's other places to put that briefcase size engine, right?
And still keep the front.
So that's the goal.
You know, if we can keep the front, that's even better.
I mean, the other issue is you're not...
If you were advancing along and you were doing these electrified vehicles,
this means that you're not going to have to do yet another iteration of an IC vehicle.
You can use the electrified vehicle platform with your powertrain in it.
Yeah, that's exactly it.
That would save you a lot of money.
You're going to save EV platforms that otherwise might have to be written on it.
Exactly.
That's right.
And we're not only bringing these generators for that.
One thing that we showed in IAA is we call the future hybrid system.
And that has a transmission which can also drive the wheels from the internal combustion engine.
So this is also focused on being extremely compact,
fitting in these EV platforms, but it's not just a generator.
So one speed transmission.
Yeah, that's been one of the knocks on e-revs is because they're not mechanically connected.
They're not as efficient.
So you're making that mechanical connection.
That's right.
That's right.
How do you think this might work, again,
when you're communicating into the future in North America,
vis-a-vis the UAW?
Because all GM Ford and Stellantis powertrain plants, engine or transmission,
are represented by the union.
Do you have to have talks with the union?
Have you initiated anything like that?
Or is that for the OEM to do?
Well, one thing for sure, John.
We're bringing jobs with what we're doing.
We're bringing a plant into the United States.
In some cases, bringing this plant in the United States might not mean a trade-off
with jobs here in the United States, but rather jobs in Mexico or somewhere else, too.
So I don't think that there's going to be a consistent or only one situation that happens
as we start to provide engine and transmissions to customers here.
But what's great news is that this is dedicated jobs within the US.
Now, what that means related to unions is something that we're going to have to figure out.
So we haven't gotten there yet.
So what about non-detroit three OEMs?
Toyota, Honda, Nissan, BMW, Mercedes, all have big operations here in the US.
Are they interested in horse?
Absolutely.
In North America.
So we have, of course, broad conversations there with a variety of OEMs, but absolutely right.
I mean, our target here is to provide engines and transmissions to those company
that build vehicles in North America.
That's, you know, not focused.
So they're not just three targets here.
That's right.
All right.
So you guys horse recently exhibited at Agra Technica 2025 for Ag Equipment.
So is this something else that you hear in North America are interested in doing as well as your European colleagues?
Yes.
Of course, our main focus and my main focus is more on passenger vehicles.
Yeah.
So I think as well, there will be a place for us to support some different industries.
Of course, as we build scale, you know, here and build up a production facility in the United States.
I mean, that has to be based first on larger business.
Once that's here, you know, and maybe we want to expand upon that, then other questions can be answered, right?
I can mention we have 17 plants.
So I mean, in other areas of the world, yeah, maybe we've got some room to fulfill the, you know, production requirements for some of these.
Tom, do you have a sense of urgency about getting your message out to these manufacturers?
Because I mean, okay, you guys are clever, but so are all these manufacturers.
I mean, they could form joint ventures and start building engines themselves.
Why are you guys the answer?
Yeah, it's a great point.
I mean, one of the reasons is our cost and our technology that we continue to innovate.
Like I said, because we've had that continued focus in other regions.
And, you know, 1.5 liter or 2.0 liter engines have been the sweet spot, you know, in Europe and in Asia.
I mean, what we're bringing to the US is a lot of, you know, design know how that is well fitting to that space, you know, already available by us.
I think the other side is, you know, OEMs tend to struggle to collaborate sometimes.
Not sometimes.
So it kind of helps to have a third party, you know, like us, because, you know, we're a tier one.
Yeah, we're a tier one. We're providing them a service based on a contract.
And that's a little bit more comfort for our customers.
Hey, I hope this is not a trick question.
It looks like all the stuff that you're currently doing is all four cylinder.
Why did you guys avoid the three cylinder thing?
Because I mean, a lot of manufacturers are looking at that, reduces parts and reduces internal friction and things like that.
Why fours instead of three?
We've got the fours S-10, three cylinder.
I love the research.
And yeah, absolutely.
So we, I'm focused on four cylinders here, so far, you know, in North America.
Does that have to do the weight of the vehicles in North America?
Or heavier, maybe?
Yeah, I mean, we have certain performance KPIs that we're focused on, I know.
And of course, vehicles here need to tow for the most part.
And so that's where we've been predominantly focused in North America.
Also, you know, we need to build that scale and hit a sweet spot in the market.
We have the greatest amount of volume.
But, you know, as Gary mentioned, we do have three cylinder engine technology and other regions.
We could bring that here.
Is that an e-reversata?
The C-10 is, yeah.
Okay.
Yeah.
So that's, that is in that same compact, ultra-compact range extender platform.
Okay.
Tom, do you see horse building powertrain plants or taking over existing ones
if automakers want to go on board with horse?
I love the question.
I mean, we're looking into both, yeah.
But, yeah, if we can find a good brownfield opportunity, you know, that helps.
Yeah, it's cheaper, it's quicker to get it tooled up and run in.
There are viable candidates for that right now in the United States that we're looking at.
But, yeah.
Did you see using their castings and things or would you, I mean, how much of a tear down on the plant,
would you have to do to make it horse versus whoever the manufacturer is?
I love the question because, yeah, we're looking in all options.
Okay.
So we are actively investigating options like that.
And we haven't made a decision yet.
Yeah.
So whether we bring everything in-house or whether we are collaborating there,
there are certainly many options on the table.
Okay.
Tom, was there big celebrations at horse when the $7,500 tax credit for EVs won the link?
You know, I think, I think at horse, you know, there was, I think certainly a lot of celebration
as the market really started to prove that there is a longer life for internal combustion actions.
So I think that's maybe one of the symptoms of what has been happening.
But, you know, before I joined horse, you know, I was in a different company
and looking from the outside, I'm like, man, these guys, that's prophetic what they're doing.
You know, because they carved out, they formed this joint venture
before the market really started to turn.
And then once you started to see that, you're like, holy moly.
You know, that's a great idea.
And, you know, they're already there.
It would take another company years if they started to do that now.
And, you know, we're really, we've hit a sweet spot.
So I think, so this wasn't an issue of Renault and Julie saying, you know what,
this internal combustion engine thing doesn't have a future.
Let's just offload this.
And, I mean, I think that was the original thing.
I mean, at the time that would, would have been, you know, a relevant thing.
Especially, I mean, you see, you know, Julie, you know, Chinese company, EVs going mad, you know,
Europe, you know, with Renault, a lot of, you know, the regulations pushing EVs.
And, you know, suddenly they've got all this capacity.
She said 17 plants, 5 R&D centers.
I mean, it's just like, yeah, what do we do?
I'm sure there was some recognition, you know, looking at the projection of internal combustion engines moving forward
and saying, hey, we have to do something here that makes sense.
You know, because no matter what, there's going to be many internal combustion engines
in operation and in production for several years now.
And we can't let that technology be what was released 20 or 30 years ago.
A lot of the engines, you know, encirculation nowadays were launched, you know, 2000.
You know, so that can't be the case in 2040, 2045, 2050.
You know, we're not really moving towards a sustainable future if we are, you know,
carrying on this legacy old technology.
So I think there was this recognition that on the other hand, no matter what, there is this gradual decline.
And we need to do something appropriate to have, let's say, appropriately sized, you know,
manufacturing capacity globally and make sure that we're innovating and spending money as great a scale as possible.
So a lot of these engines that the domestic manufacturers in the United States have,
they're sort of running out of emissions headroom.
In other words, they can't meet those next level of emission standards, you know,
reduction to CO and NOx and so is, is that the kind of things you guys are working on?
Because my sense was you guys are still working on these engines.
They're not, yeah, they're not really ready to plug and play yet.
They're, they're getting there and they're close, but there's still some development time required.
So we, I mean, we're continuously, yeah, we're continuously launching new engines, you know,
with the, with our legacy companies, right, with Renault Volvo and GLE.
So, yeah, there isn't one point in time when the next generation engine is there, right?
I mean, each generation we're bringing is, you know, iterated a little more clean, a little more fuel efficient,
a little more efficient, a little more compact, a little lighter, a little less costly.
And so all of this just comes in waves, and I think that's also what we can really offer is that we're not only are we doing that now
and proving that technology out, we have a commitment to continue to do that.
Right.
You're still making the investments that maybe some of these other manufacturers have stopped.
Right.
They thought they were going to stop.
Right. Right.
And now the market has shifted.
Right.
You know, look, we've been talking about internal combustion, whether it's hybrid included.
The same theory could apply to electric power trains.
No one's interested, John.
No one's interested.
I'm wondering is, is horse at all interested in making our own, you know, pure Bev technology?
Right.
Not battery.
I'm just saying the whole drive train.
It's not in our scope today.
Yeah.
So, yeah, it's really just not in our focus.
We have to focus on really what makes sense for us and where we have a unique selling point.
And that's what we determined is that spot for us.
No, no, and that makes all the sense of the world.
But like I'm saying, if I'm an automaker and I'm looking at, hey, it makes a lot of sense to off shore or spin off.
A big chunk of my ice opera.
I'll keep the specialty performance stuff in house.
Yeah.
But it would make equal sense for an electric power train.
So, I think Ampere is the right analog to horse.
Yeah, right.
So, that's a good point, Gary.
I forgot about that.
Right.
I mean, that's separate from us, but I would say, you know, within a hybrid transmission.
Of course, you have dual inverters.
Now, you have the same high technology that you bring into an electric drive.
Plus, we've got two motors.
So, we have a P1 and a P3 motor electric motor within these transmissions.
So, let's say we're no stranger to the technology by any means.
But we have a certain area that we're focusing on and optimizing.
And that's what we're bringing to the market today.
So, let's just say, sake of argument that, you know, you have this, this product.
Could you see selling it to three different companies, ideally selling it to three different companies?
And it would basically be the same.
Or would each of those companies say, you know, we need something a little bit different.
Yeah.
Well, that's part of the conversation, isn't it?
When you go to pitch a particular company.
But to your earlier point about that texture that some customers might want.
Let's say to throw one out there.
I mean, an Alfa Romeo or something like that might want something with a little more,
I don't know, a little more vibratory quality or a little more sound quality.
Are you revving?
Yeah, higher revving.
But all that stuff can be talked about and tuned into into this.
What is essentially the same powertrain?
Yeah.
And I think that so far we don't have a consistent same answer to that question
in all discussions that we have with customers.
We certainly do have customers that are saying, yeah, loop me in.
Group me in.
Get me the most efficient plug and play cost effective, you know,
a system that you've got synergized, synergize away.
And of course, we've got some customers that are saying,
I really need something that fits exactly for these specifications.
What do you got for me?
So you have a portfolio.
I mean, would you likely have something for them?
Or would this be another job program?
So with our portfolio, which I would say is relatively broad,
you know, and when you look within the space that we play,
the size of the engines and dedicate a hundred.
Turbo, non-turbo.
Yeah.
So we have a pretty broad range of products within that space.
So for these customers that say, hey, hit my specs, you know,
we find a way.
How close can you get there's a way we can tune that or change gear ratios,
you know, in order to meet what they need within our portfolio.
But, you know, that maybe comes at the expense of synergizing with somebody else
and taking advantage of that scale.
Well, you know, Tom Stevens, who some years ago ran GM's powertrain operations,
explained to me what an engine is.
He said, John, it's a box.
And if the program people come to me and say, I need an engine for my new program,
I always ask them, what size box do you need?
You tell me the size.
You tell me the power output.
You tell me the emissions and fuel efficiency that you have to hit.
And I'll give you a box that does that.
And to me, that just simplified everything.
And so I think you guys can probably come up with the box.
I mean, an engine.
An engine is basically an energy conversion device.
It changes the chemical energy that's in the fuel, whatever it is.
And you guys are saying you're willing to work with any kind of fuel.
It turns that into electrical energy through the generators that are on board the vehicle.
And then pushes the power into the battery.
And then, again, when the vehicle needs to move, power comes out of the battery and goes to the motors.
Yeah, so it's absolutely right.
And I would say where it's become a little bit more complex than that is with hybrids.
And because hybrid systems, then they're factoring in other elements like the size of the battery, the voltage of the battery,
whether this is also made into a P4 drive, you know, rear drive, you know, like an electric machine
that is also powered directly from the battery, right?
So you're looking in a broader scope than in conjunction with these other pieces,
where that box has to fit into, right?
Look, we're going to have to wrap this segment up.
This has been a fascinating discussion.
I think your timing or horse's timing is brilliant because here is an industry that is struggling.
I mean, they're searching in the couch cushions, right, for more capital.
Strip for point.
And if they could just take their powertrain ops or a big chunk of them and spin them off to horse, why does that free up a lot of capital?
See, and it's great that you guys are further developing the internal combustion engine because some people just thought that.
I don't want to name any name.
Right.
No, listen, a lot of my thinking was based on interviews with the VPs of powertrain.
That's what they were thinking, right?
That's what they were thinking.
But anyway, Tom Lewis, thank you so much for coming on this show.
We'll have you back later for a progress report.
I'd love to.
But this has been terrific. Thank you so much.
Thank you very much.
Thank you for having me.
Back in just a moment with some more news of the week.
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All right. We're back.
And there's news of the week to talk about.
And Gary, where do you think we should start?
So, John, we had our last show last Thursday.
You weren't here.
It was, we didn't know what was going to happen.
Whether Elon was going to get the trillion dollar package.
Right.
He's going to be getting it.
What do you think?
Well, he's still going to meet some requirements.
Yeah, I mean, there's, there's, there's some benchmarks to him.
There's some, some very serious benchmarks here.
And, you know, he's got an increased market cap.
He's got, you know, the revenue's got to grow with certain, you know,
tranches and there's got to be technical breakthroughs and AI robotics, autonomous vehicles.
I mean, yeah, the guy's got a lot on his plate to do this.
But what do you think?
Well, look, you know, if he can grow the, what, what's he want to hit?
An eight trillion dollar market capitalization for the company.
He's going to earn the money.
Eight and a half.
If he can take it from roughly a trillion today to eight and a half trillion.
You give him one of those trillions.
Why should shareholders be upset?
I mean, the rest of us will be upset.
How dare he earn that much money?
But the question is, can he do it?
Can Tesla do it as a car company?
No, weapon way.
There's, there's just no way Tesla is going to be able to do it.
It's all going to be about AI and robots.
So now can he do that?
Now we're going to see how good Elon really is.
Can he pull that off?
All right.
So, so you are saying that the company that we know as Tesla,
the company that makes these things like model wise and model threes,
that's, that's basically an irrelevance.
Irrelevance as to whether Elon will ever make this money or not,
whether he can grow the value with Tesla, you know, eightfold from what it is today.
He's not going to do it with cars.
I mean, Tesla is struggling right now.
They, you know, their, their idea of keeping up with the market is software updates.
God bless them.
That's really cool.
Maybe getting a little bit more range.
But the styling of their cars has not changed with the exception of some minor, minor updates.
Meanwhile, BYD is eating their lunch in China because it's throwing every kind of car
into every kind of segment.
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Okay.
So in the past several months, Tesla has lost the program manager for Cyberpunk Model 3,
the program manager for Model Y, former senior director of North America in the European
Sales and Manufacturing, head of engineering for the Optimus Robot, vice president of hardware engineering,
human resources director for North America, a top battery executive in VP of North American sales.
Yeah, so that's just this year.
Wow.
Yeah, yeah, yeah.
Just this year.
So it lost a bunch last year.
So how is he going to do this?
Well, look, number one, it's, I don't care what company it is.
I don't care what industry it is.
When you see a string of executives going through the revolving doors and not coming back,
that's a sign of trouble within the company.
It doesn't necessarily mean financial trouble.
It just means people don't want to work there anymore.
And that's not a good sign for any company.
So, you know, I get back to this thing of the threat of Elon leaving the company was perceived
as a potential cause for a collapse of the evaluation.
I would say that that's almost a foregone conclusion.
Okay, if Elon leaves, I don't think that company has a future.
Okay, what's his secret sauce?
What is it that he knows about humanoid robots that robotic professionals don't know?
What is it that he knows about AI that AI professionals don't know about?
This is the thing that mystifies.
Well, he knows how to drive a team.
Obviously, he's done that.
I mean, we've seen him get in some pretty serious trouble in the past
and they managed to pull it out of the fire at the last minute.
So, he's a clever innovator.
There's no question about it.
I mean, as crazy as some of the things he says and does,
he does know how to put together a program.
Yeah, but Gary, I think you raised a really good point
because when Elon was competing against legacy automakers with 100 years of procedures,
processes, specifications, Tesla could be a steamroller
and just blow through those kinds of companies.
Now he's competing against other AI companies, bleeding edge, very well-funded.
He's competing against other robotics companies, same story.
This isn't like competing against general motors and Ford and Toyota and the like.
This is going up against the best in the world,
largely out of Silicon Valley and China.
Right.
It's not going to be as easy for him to do that.
But if he left Tesla and now Wall Street viewed Tesla strictly as a car company,
he doesn't get 170 plus times earnings with a stock price like he does today.
He'd be down in GM and Ford territory.
What are they trading?
Six to eight times earnings.
You would see, I mean, we could all make ourselves fabulously wealthy by shorting the stock
if that were to happen.
But I mean, yeah, Tesla stock valuation would be toast without Elon.
You could also make an argument, it might be the best thing that ever happened to Tesla, the car company.
Because Elon's interest clearly is not in Tesla, the car company.
It's in AI and robotics.
Yeah.
Because that's his pathway to a trillion dollar income.
That's what he's been talking about.
And so I can see where a lot of people are going, oh, well, if Elon's not interested in Tesla,
what am I wasting my time here, Tesla, the car company, I'm leaving.
And that's why I think we see a string of executives leaving the company.
There's been a lot of skepticism around full self-driving too.
I mean, not just industry experts are talking about their concern about just using the cameras.
Yeah.
There's that, Jack.
But I've talked to some people who own Tesla.
Right.
They're wowed.
They are.
Until they hit that edge case, John, where the camera doesn't have that.
No, no, that's right.
And, you know, I think most of them are going in.
Eyes wide open.
Yeah.
But I keep my hands wide open.
Well, so, so, so basically it's your point, Jack.
I mean, it's it works until there's a lawsuit.
There becomes question.
Right.
I don't know if it works until there's a lawsuit.
I mean, there've been lawsuits.
I mean, the company continues to, to trundle along.
I think that, that they're kind of running out of momentum in terms of, to John's point about the styling, not changing.
Again, the skepticism around full self-driving.
I mean, I think he's, he's put his, you know, his money is on robotics and AI.
That robotics thing, I don't think he's going to work out.
Well, to John's point, I mean, China is coming on strong with robotics too.
Right.
There are a lot of, you know, cutting edge companies that are working the robotics angle.
So, we'll see.
I mean, what do you have?
A lot of robot companies working the robot angle.
Yeah.
I mean, he had his two robots, what they danced the last meeting they had.
I mean, okay, let me see them build a car.
Yeah, that's right.
Right.
Until that starts to happen.
Who cares about this stuff?
So, so, you know, we've been, we were sort of like stepping on EVs.
Toyota has opened a $3.9 billion battery plant in North Carolina.
What do you think?
Well, look, you know, Toyota's made no bones about it.
Hybrids need batteries.
Right.
And then what it's going to do is solid state batteries.
Well, this is not going to be a solid state plant.
But I mean, that's, that, that's Toyota's committed itself to getting to solid state.
And when that happens, the battery will need to be smaller or the car will have more range.
But solid state is the future.
No, I totally agree.
And there's a lot of hype centered around solid state.
There is.
There is.
In fact, some top Chinese, we just reported this in Adelaide Daily today.
I think it was that top Chinese automotive battery experts saying, whoa, whoa, whoa, whoa, whoa.
Slow down on all the hype.
We're talking next decade before it hits.
When it's 10 years away and it keeps getting 10 years away and 10 years away, you know, you've got a problem.
There's progress being made.
Make, make no mistake out of it.
But for them to be at line speed mass production, affordable, blah, blah, blah.
Even the Chinese, the top experts are going, whoa.
So basically, it'll be a lithium something or other plant that they're, they're.
I guess doing it.
Yeah.
But your point.
Yeah, they're going to use it for the camera.
Which is all hybrid.
Yeah.
And a yet to be announced all electric three-row BEV, which will happen someday.
Yes, it's someday.
But okay, when it's ready.
And then to it is announced that within the next five years, it'll spend $10 billion in the US.
Yeah, I saw that.
Well, I take this with a grain of salt.
I'm sure they're going to spend a lot of money in.
But right now, all the automakers know in dealing with the Trump administration,
you want to take every single penny that you will possibly spend in this country,
wrap it up in a nice president and present it to the Trump administration and go,
look at all the money we're spending here.
Yeah.
So I take it with a grain of salt.
I'm not saying there's no plays well in Washington.
It plays really well in Washington.
If you go and say, here's how much money I'm spending.
Here's how many American jobs I'm creating.
And here's how many vehicles I'm exporting, i.e. to reduce the trade deficit.
They'll kiss you on both cheeks.
So you're suggesting that perhaps this money will not be spent within this period of time?
No, I'm just saying that it's been.
Silver promises.
They're rewarded.
I'm not saying they're not going to spend this money.
I'm just saying that they're throwing everything in the kitchens
and to make this number look as big as it possibly can be.
And they're saying over a decade.
Well, that's what?
A billion a year?
I thought it was five years.
Over five years?
That's just the paint part of the plant.
Yeah, look, you know, they were probably going to spend that amount of money anyway.
Right.
Right.
But now you package it up and you say to the administration, look what we're doing.
Alright, so let me, let me come at it from a different angle then,
that you have Toyota opens a battery plant.
We've seen recently General Motors offloading battery plants, right?
So not so good.
Ford, same sort of a situation that battery plants are not as intriguing to them as they once were.
And I have 13 billion bucks that these guys have spent on a brand new battery plant.
And they're talking about this $10 billion.
I mean, how does this, how does this play in Dearborn and Detroit?
What are these?
What are these guys?
Jack, what?
Well, you know, what are they thinking at?
Well, HQ.
But I mean, you know, Toyota and some of the other Japanese manufacturers like Honda,
they've got a lot of hybrids.
They're building a lot of hybrid vehicles.
So they're using those batteries.
It's not like if they're going to be, it's going to be stranded capital.
Like, like it is with the domestic manufacturers.
Where, you know, suddenly, there's no $7,500 incentive.
So, you know, what Jim Farley said, you know, we're expecting the market to be maybe half what it is right now.
I mean, that's that's scary talk.
Right.
Well, at least Ford has some hybrids.
General Motors has zero hybrids in this market.
The hybrids are the hardest thing going right now.
So they're exactly who horse should be talking to?
They are.
So, so Jack, I mean,
you know the people there at General Motors when plans were being made that, you know,
that the future would be electric.
You know, there was the, what was it, zero, zero, zero?
Hmm.
Was it no emissions, no accidents, and no something else?
Yeah.
Yeah.
No congestion or something like that.
Yeah.
They absolutely invested in the future that was electric.
And, and I think at the time they were struggling with the emission standards.
And they looked at the electrics and they said, there are no emission standards basically for electrics.
And we can walk away from all those issues that are associated with, you know, making those engines.
And so, you know, that they made it, they made a commitment, a big one.
I think the part.
When I say that, I'm talking about, you know, Mary Barra and Mark Royce.
Those are the two decision makers.
Absolutely right.
And I think part of their thinking was, is the industry ultimately going to go electric?
Yes it is.
Yes it is.
Okay.
So let's not put a foot around.
Let's go head first in and go all the way.
Yeah.
And we'll do this Altium platform, Altium battery.
I thought it was a brilliant plan.
And you're a first mover too.
And you're a first mover, but the market wasn't going that way.
Well, yeah.
GM was sort of the legacies.
Sort of.
But they're playing fast.
They're playing catch up, right?
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So they thought it was the right idea at the time.
So what's going on there now?
I mean, it's John pointed out, I mean, no hybrids.
Well, I think there's a certain amount of panic going on right now.
Now, let me just add, they do have hybrids in China.
They do have hybrids in South America.
So GM has got hybrids in its portfolio.
They're just not integrated in it.
But you sort of have to reconfigure them or ship them to the United States to make that
happen here.
Those are investments that were made in those particular regions and that's kind of
where that stays.
So what does this do in terms of, I mean, we've seen recently factory zero is shut down
right?
Yeah.
Yeah.
And I'm making cars.
Right.
At the time being.
I mean, how do they look at that in terms of its future?
It's painful.
It's painful.
They still make an enormous amount of money on trucks.
So I mean, as long as that's kind of trundling along and working well, there's profitability
there.
At least enough to sustain them.
Now, of course, there was that enormous recall on the 6.2 liter V8 that goes in the very
best versions of all those trucks, whether it's a GMC or a Chevy.
And I think that they took a hit on that too.
So I mean, they're bleeding sort of multiple wounds.
But again, as long as, I think as long as truck bill is happening, I think GM's probably
going to be okay.
Yeah.
But I would point out though that there are several other electric cars that are doing
relatively well.
Chevy Equinox.
Yeah.
They've been very well received.
Yeah.
The Cadillac Optic.
Right.
I would argue that, pardon the lyric, the lyric.
I would argue that for all the automakers that got into full-size electric pickups, this
represents the biggest product development fiasco in the history of the industry.
It's that stall.
And what's so extraordinary is they really know their truck customer.
They know they're well.
And yet they overlook the fact that the truck customer doesn't want electric at all.
And the people who are buying electric pickup trucks are not coming out of F-150 Silver
Rottles or Rams.
They're people who are like, oh, electric.
I mean, they're not truck buyers.
They're not traditional.
They're not truck buyers, right?
They're not truck buyers, right?
It's the guy that's got a leather vest on a cowboy hat.
He's not really going to work every day and using a hammer or a plumber's wrench.
Doesn't have any cattle.
Those customers, they're there, but I would say that there are segments where EVs will
do quite well.
Sure.
And I think GM will save that part of the program where it makes sense, regionally segment
size.
I think the bolt's going to do, OK.
I think it will do quite well.
Because it's the right price.
It's got good range.
Right.
It's got good utility.
So I think that's going to be one of the bright spots.
Not like a 100 watt bulb, but it's going to be one of the brighter spots at General Motors.
But Gary, here, switching subjects here, I got a question for you, which also ties into
this.
Here's General Motors goes all in on EVs, tells the world it's committed to EVs and tells
all its suppliers get on board.
Now we got another corollary.
Comes out this week, Wall Street Journal broke the story.
General Motors has told its suppliers for North America, get the hell out of China.
We don't want anything sourced from China for North American products.
So yes, you know, a decade ago, GM was telling all of its suppliers, all of them.
Show me your China price.
Oh, you don't have a China price.
You better get to your ass over to China, or you're going to lose the business.
And now they're telling them, get the hell out of China.
What do you think they're giving some until 2027 for them to have no China content in their
products?
Well, I mean, I wonder if this doesn't go back to what you were saying about making
noises that make the administration think that you're doing the right things, okay?
It takes a tremendous amount of time to create a supply chain.
I think people really don't even think about that, right?
And so part of the thing is, is that, okay, why are you sourcing from China?
Well, because they have capacity, and the capacity leads to a competitive price.
And because they have those two things, you don't create the capacity somewhere else to
do the same thing that would cost you more money, like let's say Germany, right?
So you have the plant in China, you don't have the plant in Germany.
So your sourced from China, you don't have the sourced from Germany because it is less
expensive.
So when all of us buy a vehicle, it's less expensive if they were to have the parts that
were being made in Germany, or Switzerland, or fill in the blank, it would be much more
expensive.
So my question is, is that, okay, I get the rationalization of saying, oh, gee, there's
all this oiling going on in terms of the geopolitical machinations between Washington
and Beijing.
Maybe we need to protect ourselves from that in some way, shape or form.
Seriously, to tell your supply base, like, no, you can't use a huge section of the world
capacity to do your, to make the part for us, I think it's just going to, if it happened
and it won't happen for decades, it would make unaffordable vehicles.
I mean, you certainly need to prognosticate what administration is going to be in.
I mean, is it going to continue to be Trump and the Republicans, or are the Democrats,
they had that recent bright spot with the recent elections, I mean, is it going to change?
And if it does change, are they going to be a little more measured in the way they
approach emissions and EVs, or are they going to just, depends which wing of the party
takes power.
You're right, John.
Right.
Are there super progressives or the folks that are a little more measured?
Here's another thing, and this almost gets conspiratorial, but maybe not really, you know,
there's growing tensions between the U.S. and China centered largely on Taiwan.
There was a U.S. naval admiral who just a couple of years ago in a Senate hearing blurted
out that the war is coming in 2027, that that's when China is going to go into Taiwan
to Taiwan.
I think it's also important to point out that two of GM's board members have deep ties
to the military.
One of them is the former CEO and chairman of Northrop Grumman.
The other is a retired admiral from the U.S. Navy.
And I could be wrong, but I think Royce also has some more connections.
Yes.
Oh, okay.
But I'm just saying board members.
Right.
So you're saying that there's going to be a war in 2027, and so you're not saying
that.
I'm saying okay.
And they have insider information or you're implying that this may happen.
What I'm saying is look, this has been discussed openly in Washington in the military circles
that the 2027 is the year when China is going to go in.
And I just find it very interesting that GM saying gets your ass out of China by 2027.
Well, it's only for some suppliers, not for all of their suppliers, 2027.
Well, for anybody supplying North American vehicles, it's not, I mean, you know, all of
them at some point, few of them for 2027.
Okay.
Okay.
Got it.
Okay.
Okay.
So, but it's probably, I mean, let's face it, if there's a major war, I don't know that a
whole lot of people are going to say, I've got to get a new car, or they might hold
off.
Yeah.
They might.
Right.
Those things seem to have an effect on sales, what about the, I mean, you know, I mentioned
affordability.
I mean, the new KVB number came out, and now it's below 50 grand.
It's now like back to.
Is that because the electrics got pulled down?
I think that is.
Well, but the electric price is actually went up.
So, I, you know, I thought that that was, you know, but, but the volume of the, yeah.
So, so, I mean, Jack, you know, you're saying, you think the bull's going to do well, but
that's because they're talking about it being a sub $30,000.
Right.
It's affordable.
Right.
Right.
And it's got a cheaper battery.
Okay.
So, what about if somebody, you know, brought back the cavalier that had an internal combustion
engine?
Um, and it was like sub $25,000, it would sell well, it would have, look affordability,
but only if it can meet emission standards.
You can only sell it.
If it meets.
Okay.
But out of mission standards basically being, you know, like all, you know, all, you
just look somewhere else that the standards are there.
We're not going to enforce them.
Yeah.
We're not going to enforce the fines, if you miss it.
Right.
Hmm.
So, but to your point, Jack, that's with this administration.
Right.
And this is how automakers have got a plan.
What if in 2028, the Democrats pull off the, the perfect trifecta, take the house, the
Senate, the, uh, the White House and, uh, and go, okay, we're, we're going right back
to where we were and with the Biden administration.
You could very easily as an automaker, find yourself with stranded ice assets versus
the stranded.
With bad assets.
This is what makes horse so attractive.
Absolutely right.
Well, I, I mean, I, I think that starting with the pandemic, when we saw the issues supply
chain, and we saw the inability for us to be able to have things that we needed, that
industrial policy became something that is accepted from both sides of the aisle, both
sides of the aisle now.
Right.
Any flexible policy?
Well, no, you mean industrial policy.
Industrial policy.
There's, there's an understanding that there's an acceptance that we need it, that we need
to make stuff.
Right.
Okay.
Okay.
And, and I, and I think that, you know, you, you could have, you know, Trump or AOC would
both agree.
Yes.
I, I'm with you on that.
I, I think you're right.
And so I think regardless what happens in 2028, that will still be part of what makes policy
going forward.
So if it were to be a situation, and I think we're seeing this play out in Europe right
now, where, where the auto companies are basically saying to the, you know, the, the people
in Brussels, like, hey, hey, wait a minute with this banning of internal combustion engines
by 2035, you know, it's going to destroy us.
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You know, the ones got the cozy fireplace and the open kitchen and a guest bath that you're
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And I, I, I, I don't think you'd have those stride.
No, no.
And what's making it all the more real in Europe is what the, the German auto industry
is on track to lose 100,000 jobs by the end of the decade.
And we're already seeing tens of thousands getting and laid off and that's where Brussels
is going to have to sit up and pay attention because, you know, yes, we need to reduce CO2
emissions and I'm all on board with that.
But if that means throwing thousands, tens of thousands, a hundred thousand people
onto the street with no means of earning a living, you're going to have riots on your
hands.
I mean, you've, you've got to be pragmatic about this, you know, the situation.
And I think, you know, when you look at a strategy like, you know, we're going to provide
engines and you're not going to, you know, you're not going to, you're not going to be spending
any capital to get them and engines and transmissions that plug into existing architectures
that you're working on, you know, the styling's done, you know, we're, you know, three months
from production.
I mean, there has to be a certain amount of flexibility by the administration because
I, you know, I think one of the things that got, you know, the current, or not the current,
but the former administration trouble was maybe a little too eager to get to, you know,
clean air, but, but, you know, it's like, what is, what is actually doable versus, you
know, shooting, shooting at a target and not really, it really doesn't matter whether you
get there or not.
That's right.
Because no one cares about the target.
Yeah.
Your opponent, your, your political opponents can make, hey, with the fact that you don't
get to where you need to go.
So maybe pragmatism is the word going forward pragmatism should be the word at least the way
I see it.
But hey, look, we're going to have to wrap this up.
Okay.
Jack, it's been great having the show Gary.
This has been terrific.
Yeah.
Now we all have to go out and figure out, how do we buy stock and horse?
Because I think we all agree this company's going places.
I've got one correction for you guys from the comments section GM does have a hybrid
of us.
Oh, the e-ray.
And the CR1X.
Oh, yeah.
Yeah.
So that's on off camera saying there's two Corvette hybrids.
So they do have a hybrid.
Yes.
I stand corrected.
But, but those are performance hybrids, you know, they weren't, they were talking about
bringing in some of the stuff from Latin America, the United States, where they, where they
do have hybrids.
Correct.
But you made the great point.
You got to build it here.
Yeah.
You can't just import it.
It costs too much.
Yeah.
Anyway.
I want to thank all of you for having tuned in.
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