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Fortune partnered with Great Place to Work to analyze survey feedback representing nearly 100,000 U.S. employees.

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65 Best Small and Medium Workplaces in New York

The companies on this year's list stand out for celebrating innovation, promoting cooperation, and more.

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“Executive leadership sets a great example of supporting, championing, and inspiring individuals and the larger business. They are transparent in communications, available to talk though solutions, and inclusively recognize success. Also the mental health Fridays, guided meditations, and ERG programming are great holistic support resources over the past year.” 
 
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Electric Company Profile, Stock Price, News, Rankings | Fortune

Mario Klingemann, Artist, Botto, In conversation with Tony Chambers, Studio TC & Friends

Brainstorm Design 2024: Androids and Their Connection to Electric Art

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I think this one is gonna be fas fascinating 20 minutes with Mario where we are going to discuss Boto, the Decentralized Autonomous artist and the man who created Botto originally Mario. Before we get into the details on Botto, could you give us some insight and context to where you started? I believe you're a graphic designer working for nightclubs in Germany. Well, it's always difficult to kind of map my career because I always followed kind of what I was interested in most at a certain time and it was usually something that couldn't be taught. So yes, I was always fascinated by doing things with computers and code. And in the early nineties, there was a great opportunity because techno became really big in Germany where I'm from and they needed always kind of weird crazy graphics. So I became a graphic designer by writing Photoshop filters myself using algorithms. And this is when early, not really 1991 90 92 round. And uh so I would call it early generative art because in the end, yeah, you write an algorithm but then you add some sliders to it and get infinite variations and that's kind of my technique of, of doing my work and being kind of like the computer guy like that, which is also like, not really the label I want to have. But uh well as we all know, kind of the world evolved, the internet came along. So that's when those the same people said like, oh, there's a thing called website. So do you know what this is? So I made websites, then I made the video kind of like for German TV, on a computer, not on some million dollar machine. So it was always this end. But I always try to bring I'm lazy in that sense. So I love to spend like two days on an algorithm that then can do something for me a million times on the press of a space bar. So and yeah, so ultimately kind of that brought up the questions, what other things of myself can I replace with a machine? And of course, you said to me earlier that you always wished for an A I to do the things you didn't want to do even in those early days. So yeah, even like I think in 1989 I read this book by Marvin Minsky uh Society of Mind. I think it's called, which already promised all these amazing things like how a machine could make its own decisions and but it was all just graphics and it was really theoretical. So it took until me until like 2015 when deep learning kind of arrived on the scene and had all these amazing uh kind of results like, oh finally, you could detect the dog with 90% probability in an image. But I already knew this is just kind of you always have to kind of see the potential that's coming. And the moment I saw that this is going to be the next thing I jumped on for me, deep dream. Maybe you remember these psychedelic weird images. Uh That was the first time when you could reverse the process from just saying, classifying things to turning something like some numbers into an image. And yeah, so that was also the moment when it became clear that well, it could go beyond that. And uh yeah, I see really like, you know, grandfather's X, this thing where you start with an X and then you replace the handle, replace the Natalie Sharp in the end, like I tried to do that with myself saying, OK, which other parts and of course, that the thing like creativity itself and especially deciding whether something is interesting is good. Can that be replaced with a machine? And then when would you? So boto was born? Well, I mean, the idea for boto he conceive. So it came into the world in 2021. But I think the first time I wrote up the concept was 2018. And but as with any ideas that are maybe too early. I didn't find kind of, I have patterns. So, and sometimes I can go to them and say, oh, look like I have another idea. But in that case, they went for the memories of passers by first, which as we heard was made, eventually was sold at Sotheby's, which was nice. So, but yeah, that thing was in the drawer for another two years. Uh, it helps that then around, like with the pandemic, the Blockchain, the whole crypto world started exploding and suddenly people started seeing, oh yeah, there is actually something to it and then yeah, it took a year to build it. And yeah, in 2021 it bottle came into the world. Great. So now you're going to over the next few minutes give a a clear explanation of how Botto works for the layman and what you mean exactly by decentralized autonomous artist. So first, what does that mean? And how does botto work? Well, let me put this first. So really what I want to create with bottle or is like my answer to the question, can a machine be an artist? And especially now where everybody is becoming an artist by just entering some text. So that's the question like what is it? Is it just being able to produce pretty pictures that makes an artist? No, you have to create a compelling biography. And so that's how Botto is built up. So yes, underneath bottle is really a machine that produces images and tries to sell them. And by selling them, it makes money that keeps it alive. But there are some aspects to it. And I'd like to call the system more like the bottle Trinity. And I also like to call it like an inverse cyborg because this is how boto Trinity we're seeing on the screen. Yes. So explain simple terms how the Trinity works. The inverse cyborg idea is like unless like you do not have a human augmented by a machine, but you have a machine augmented by humans. And this works by these three parts. One is of course, the A I, well, whatever that is like the all the algorithms, the models that produce images and text. But then there is a human community in form of a so called DAO which is a Decentralized autonomous organization. It's kind of a, well, you could say it's company in the Blockchain, but it's a little bit different. But yeah, so community, it's a community that everybody can join and when you join it, you can make decisions and how do you, how do you become a, well, that's where the bottle token comes in or the economy comes in. So you have like just like, you know, Ethereum Bitcoin, there is a coin called bottle, which I call the lifeblood or the pulse and you can actually track the success of bottle in its chart. So you have to acquire bottle and then you stake it in a smart contract. It's kind of like you deposit it there and once it's deposited, you are part of the dow and you are allowed to vote on the books. They bought a small investment or a small, you can, well, you can join for free but you can uh the more you have stake in something, the more you can also profit from it. Because that is the kind of maybe the interesting part about botto. It is not so half of the proceeds. It may come to that later. With the process. We have a lovely graphic. So the process of how botto works, you have the dow which is influence it. So that's the community that teaches it. Is it art teacher boto go to art school. But the big question is like, why should the machine do any kind of art or what art should it make? So you could of course randomize it totally. But let's say realistically a fresh A I does not have any motivation to go in any direction. And that's where the humans come in that guide it. So bottle produces really constantly knew what we call fragments. It's like proto art. It's really, it prompts itself randomly by creating originally based on, on your taste. No. Oh, that's very important. No, no, no, no. Oh Actually, I have to take a step back here. I didn't want to influence the machine at all with my, so what it does is really like a shotgun approach to possibilities. So because that's what I believe is the best way to cover all possible directions. If it would only be my aesthetics, then, well, it would be a clone of myself and that was not the plan. It would be scary. Yeah. So bottle like uh roams through late in space and tries to get in any direction and builds up a huge pile of potential artworks right now. I think we are at five or 6 million that no human has ever seen. But once a week it selects 350 fragments. So thousands and thousands of fragments we boil once a week, it selects itself. So model using the taste model, it's like 350. Yeah. So it's like a curator in its own affairs, but that's when the voting comes in. So the humans uh get to see kind of like the proposals and can put votes on it. And in the end of the of every round, which takes a week, the one that got the most votes gets eventually minted on the Blockchain and set up for auction. That is when then there's the potential that it sells this and money comes back. But at the same time, those votes go back and trade in the taste model. So I'm the winner then learn that OK, this is popular. Actually, all the votes are all the vote. It's not only important what people like, it's also very important what they don't like. It's actually for me even more important because uh there are so many things directions you could go and we really create this kind of gravity of uh where it should show more and where it should show less. And unlike a human artist, it is kind of trying to please, right. A human artist should be kind of against the grain and really try to provoke some of the most successful try to please. Yeah, I mean, financially it's usually better to kind of go with what everybody likes. And if you, as you can see in bottles, art, it does a lot of things that are well agreeable. Well, let's look at some of the art. We have some slides, validating bottos success story over the last few years. Emerging press, we love. These are very early days. This is kind of from 2021 where there was not even these diffusion models like mid journey and all these available. So it was using a different technique. You can see a very clear kind of A I aesthetic, but I really thought out history aesthetic. Here. This is, yes, yes, yes. We have Edward Hopper. So here we can already see a little bit of a development when because what bottle works in is periods. So every period allows to add new models to it. And every period also has a theme which there's always 12 being proposed by bottle by the machine botto again, is deciding it and then the dow again, votes on what should we do next. And every theme comes with like a slogan and it becomes even like a prompt. And so it's like a several nested feedback loops here which and you can see some development that you can see how, let's say their quality, their style. So now it became more post photographic, I would say, and it's quite interesting to watch because not only the machine is learning here. What is for me is interesting, the human doll, which is kind of really people with art background, people without a lot of people who come from crypto, of course, and they all kind of pull in different directions and eventually, well, you get this essence and right now it seems they, they liked a lot, the photographic work. So you're seeing tastes change from both the human interpretation of votes, but also, but now 350 images such as this are produced a week for the Dow and the general public to vote, which is, which is interesting. So you don't have to be a member of the Dow. You don't have to have invested to actually vote on this. And um what we've got here, we hope it works is this week's or the last couple of days. Actually, the new round started the day before yesterday. I always mix up the time zones. But yeah, so every Tuesday uh is kind of where the next fragment is decided and immediately the new round star portfolio of work is there for the doubt to vote but also for the general public. And should I let's take a demonstration of where we are? So what you see is kind of like, I think you might have been given like information how to access it. So this is the the voting. It is really, you just scroll down. It's really like you're going through uh kind of like Instagram. And then right now I have 100 voting points which is kind of uh not a lot. So if you're a layman, if you just, but it's really to feel it out and then I can just say, OK, this is like for me, this is kind of boring. So it, it has typical A I cliches. So I give minus seven. This is also terrible. So really? So I don't know. So what you can see is that boto does not really have a single style and uh like usually kind of you would like to have an artist to have a very discernible visual style. What boto does have is a kind of, it has recurring themes and I find it quite fascinating to watch uh too, too typical. No, I hate it. So I'm, I'm more of the critical 10, do we get something loaded up? There we go. Oh No, no. Yeah. But I mean, there are these things like themes coming up, there's often like robots and machine hybrids. OK. Something typically abstract that might work nice on a kind of doctor's waiting room, I guess. Oops, I zoomed in and uh oh, actually I like this one personally need to get more of an idea of your title. And so yo you should note that, of course, botha creates all the descriptions for the for the works itself. Um And yeah, yeah. Yeah. So it analyzes them and uh like depending on what it sees, it, it never repeats any titles. So uh today the selection is, oh, actually, I like this. This is kind of post photographic glacial frame, kind of nice. So after the selection process, um many, many thousands of people voting, you have one winner. Yes. For the there's always a single winner. And yeah, that gets minted, gets put up for auction and if it sells and fortunately for the last 2.5 years, every single one sold typically, like, I mean, I don't know if you followed along the whole crypto kind of ups and downs. That was really kind of the winter and well, but still it went for about like 10,000 $15,000 every week. So in what happens then if it sells half of the proceeds are distributed among everybody who voted in that round, depending on how many voting points you spend. So, it's a little bit so the more stake you have in the game, the more you can win. But even if you don't purchase the artwork yourself, no, no, you don't have to get a share of the proceedings. Yeah. And it's quite interesting because, I mean, most of the people who are voting cannot afford bottos art, but you can shape kind of where boto is going to. So it is in your interest that itself. Well, and that's also the other question like, do you vote by your personal taste or do you vote because you think this will sell. So you have constantly this inner conflict dilemma, this dilemma like pity and commerce. Yes. Yeah. And, and that's what makes it interesting there. So, so an interesting economic model, 50% to the community who have voted and if 50% goes to Bo Treasury to keep the service running. Um Well, I mean, there is of course, and that's the other thing Boto does not try to kind of do kind of puppet play. So it's clear there are certain things that an A I at this point of time cannot like for example, take a call from Sotheby's saying like, oh, we want to auction it. There has to be still a human uh picking up the phone or answering the email. So there is a human team that gets paid and uh kind of, oh, I get a little bit payment even. But because Yeah, I have to take care for bringing in new models. But the nice thing is the more technology progresses, the less humans will have to do. So, we are now at the very future. That's what I'm intrigued about this. It's still very early days. So he, he's an infant, he's still in nursery, um the future. So how do you see it? It's becoming totally autonomous and able to vote for his own work. Yes. So one of the things is that both should be able to, to have more of a word itself. But what for me is the most interesting aspect is we have a potential to create a truly immortal artist here and not sure if that's a good thing, right? If you look at the art market, usually at least for the for the heirs, it's more beneficial. If the artist at some point leaves and stops making more work, it's always a good move young. Yes, that so bottle has the should never die. But yeah, what does it mean? So what I find interesting is that aspect of altruism in A I because as we can see the A I doesn't need all that money it makes. So why not share it with the world and do some good. And so for now, it might be just the people who are believing in boto and helping. But ultimately, the could also decide, OK, Boto should uh create a foundation like I don't know, if it becomes a billionaire, I hope it's uh able to also then think about other things than how it could change the world it would come. Yes. Move from being an artist to a politician. A I these are fascinating considerations. I hope that made sense. It did to me the second time around. I think it's a fascinating area, machines and humans and how taste is controlled or how taste is steered is fascinating and the future of this we will watch very carefully. So, thank you very much, Mario. Thank you. Thank you, Botto. Round of applause for Mario and botto. Thank you.

Jim Rowan says his company is on track to go all-electric by 2030, despite nonlinear electric car adoption.

Volvo's CEO says EV innovation is like smartphones replacing feature phones

Photo illustration by Fortune. Photograph courtesy of Volvo Cars.

Leadership

Volvo’s CEO says EV innovation is like smartphones replacing feature phones

I'm guessing that the emails were a little bit different at Dyson as important as vacuum cleaners are, they probably weren't saving lives. I, I I'm pretty emotional about my V 11 animal back here and I don't travel without my hair dryer. So, welcome to leadership next, the podcast about the changing rules of business leadership. I'm Alan Murray and I'm Mia you have set really ambitious goals, turning your fleet entirely electric by 2030. Are you on track to meet that goal? I know there's, there's been some progress fairly recently as well and some excitement but, but tell us where you feel you're at right now. Yeah. So we're making really good progress. So what we gave is we gave guidance that we, we expected to be fully elected by 2030 that we expected to have half of sales, um, fully elected by 2025. We're probably going to go into a double s curve as we pick up. I see in the US right now, the west coast electrifying extremely quickly. Even the east coast, large parts of the east coast electrifying quickly and then in the interior of the US, it's, that's taken longer, but we're in a really privileged position because we have mixed technology. We have really good plug in electric hybrids. We have, we have mild hybrid technology as well as pure electric so we can service all of those customers. And that gives us a really strong bridge to full electrification. And so that's maybe some of the difference. I'm really confident that we can get to where we need to get to by 2030 but it won't be linear. Uh We'll pick up a lot of that soon and then we'll see it transition slowly in other parts. Countrywide, things are really slowing down. Uh The US auto companies seem to be concerned about their goals which are more 2035 focus and you have uh companies like Hertz, the rental car company that had said it was going to build a big electric fleet and then it backed off. Uh the charging stations building is going really slow and you say it's not going to be linear. But do you really feel like 2030 is a, is a realistic goal? There are really two industries within one industry, you have mass market and you have premium when you're selling it and we're selling into the premium market. And the success factors for premium are very, very different from mass mass is basically based on price. Um And there's much, much less customer loyalty or brand loyalty. When you look at premium, you're selling to customers that generally have more than one car, especially in the US. And that means there's options for them to have a bed or a plug in electric hybrid as their second car. They may still want to have a full petrol car as their main car. And as they go through that adoption curve, but we can still sell them a pure electric car or we can sell them a plug in electric vehicle. And we see that more and more frequently. The other thing is when you're selling to the premium sector and the majority of cases they have their own homes, which means they have their own charge infrastructure, which means they don't rely on public charge infrastructure. And so that adoption to bed becomes much, much easier. What we find as well as in the US. Specifically, there's a lot of three car families, especially in the premium sector. That third car, more and more and more is becoming a bed because generally it's maybe for their Children and their Children are saying, hey mom, I want an electric car. So I think when you dissect the industry and remember as well, and we have 1% of the total car industry Volvo and we can get to 2% we will be massively successful. So I'm not chasing volume and I think there's enough customers around the world that want safety sustainability, you know, Scandinavian design uh that want full electric. And that's why by 2030. I think we can find enough of those customers to buy and large be a full electric. What are some of the learnings that you took away from your years at Blackberry? Oh, man, that is, that is such a good question. I mean, it really is because the reason I think it's such a good question is because I actually talk about it and in fact, the guys who are probably fed up me talking about the parallels to that, but just think about that industry, you're going through a massive transition, you're going from feature phones to smartphones. You have Nokia, you have Motorola, you have Sony Ericsson, you have HTC and of course, you have Blackberry really good at that stuff. Two years that transition took 2, 2.5 years as you went from feature phone to smartphone. And the guys who came at the back end of that as the winners weren't even in the game to start with. It was I Os and Android. In fact, it wasn't, it wasn't a hardware play that made the difference of the software and it was the software architecture of I Os and Android. And then of course Android that re enabled people like, like Samsung to get back in the game. And, and that's what I see right now. People are talking about electrification as the change profile within the auto industry, the missing the entire point, its software, it's, it's silicon probably more importantly, silicon, it's connectivity, real time, connectivity with zero latency and it's data and if you want to fit its energy management, but those four things come together. So and I'll give you an example. When I started with the company, we had to make some quick decisions around. Did we want to buy in technology or build that? So what do you build versus what do you buy very quickly? I looked at the silicon architecture and said, and that is a pretty good company. They understand core compute technology. If we're going to move to a co compute architecture, we should go, we should go make sure we talk to the video guys because I think these guys know exactly what they're doing in terms of high computational silicon. And then we've got Qualcomm and what a fantastic partner they are on the entertainment stack. So we say we're gonna buy that technology and we're going to partner with these great technology companies. And we also then partner with Google in terms of Android Auto and we partner with Apple in terms of Apple car because I don't think we need to be making those things when 7 billion people have either got an Android or an Apple phone. They just want to connect the phone seamlessly to a car, but we did want to own electrical propulsion. That's at the core of what we do. And we did want to own the safety stack. So although we're using NVIDIA Silicon, uh we are building the whole software stack from the silicon layer to the application layer of cameras and radars and lights and so on because we really wanted to make sure we understood that software.

Jean-Pascal Tricoire, Chairman, Schneider Electric In Conversation With Claire Zillman, Fortune

Innovation Forum 2024: The Green Tech Paradox

Brainstorm Innovation Forum 2024: The Green Tech Paradox

So you're Chair of Schneider Electric now, but I wanna go, you were CEO before um from 22,006 to 2023. And the company under during your tenure just had really extraordinary growth. And I'm wondering if you can kind of just briefly walk through some of the pillars of that growth that really built Schneider into this sort of green, the green giant that it is today. Well, first, it's great to be with you. Uh Good evening to all. Uh it's a late session. We'll try to keep it animated. But when you speak about Schneider, many people don't know us. So as a disclaimer, we don't do elevators because people confuse us with Schindler. Normally Schneider is really a world leader in the field of electrification. Um When you speak about the transformation we drove over the past 20 years, we had the intuition on the strong conviction that the world of energy was in a deadlock. So we had to re invent because on one side, you have to provide energy to many more people in the world. On the other side already 20 years ago, people were starting to speak about carbon emission and climate change. Um personally had lived in China in the nineties and I was in emerging countries of which Africa and you soon realize that energy is your passport to decent life. But at the same time, energy is the first source of pollution, of disruption and everything. So we embarked 20 years ago to be championing sustainability thanks to technologies and we bet on two technologies mainly one is digitization and it seems obvious today. But at that time, nobody was speaking about IOS internet of things. So it was the episode two of digitization, bringing internet to machines so that we would be much more efficient in everything we do. On. The second one was electrification as a factor of decarbonization because the only way to eliminate carbon is to take out combustion and the only way to take out combustion is to refer to or to recur to clean electricity. So electrification digitization that brings we became partner of our customers in the field of sustainability. We are the partner today of 40% of the fortune 500 companies in establishing a goal driving solution. Or um the last bet or the other bet we took is to say that probably the biggest acceleration that would happen on those transitions would come in countries which have no legacy. And therefore we re embarked in new economies today. If you look 20 years after fast forward, we multiply by four, the size of the company, we multiply by 10 in Asia and in new economies, we multiply by five in North America. And the company has seen its market cap being multiplied by 12, but just by having 20 years before on much earlier than probably others, a different view of energy which is efficiency first, decarbonization, first on term to sustainability. And one of the things that, that Schneider does that I think is interesting is, you know, retrofitting buildings to be much more energy efficient through the digitization automation electrification. When we talk about a building like this, the hotel we're in now, can you just give us a sense of what Schneider can do to make this building more efficient? Well, number one, connect everything. So going to so saying, making sure that once everything is connected, the building adapts to what the people do on most of the buildings too, they don't do that. So when the room is empty, making sure that there is no energy or consumption and so on. Number three, apply on a niche software A I for to optimize everything the the life cycle of the building. So optimize every phase from design to build, to operation, to maintenance, making sure that everything is optimizing your building, heating, water, everything and and manage your company, not what we used to do before, which is building by building room by room, but making sure that you can manage your company on a holistic basis and we do that here with number of reputable company. I won't say I won't cite all of them, but we have done a digital repository for Swire from Han Nung and from other, other companies. And you were really an early adopter of this. Um uh So the philosophy that's really popular with CEO S now that you're gonna center your management strategy around the planet and around society. And I'm curious sort of, what about your personal background and experience really led you to sort of take for, for that approach to sort of be on your radar so early. Look, there is first the fact that climate change, right is probably one of the biggest challenges of of our generation and it has different expression. We speak about climate change as a as a big idea, but it can be droughts, it can be water shortages, it can lead to typhoons here in Hong Kong and major disasters. So it has already strong social and economic consequences. Then when you look at what we do, which is energy management, it's not complicated. Climate change is 80% due to carbon emissions and carbon emissions are 80% due to the way we use and produce energy. So when you speak about climate change, normally media and government, they all speak about generation like renewable, nuclear coal gas and things. But when you think about it in the story of humanity, energy transitions to something which is net zero never happens through the through the supply, there won't be more electric cars because there is more electricity. Actually, there is not more electricity. As we speak, there would be more electric cars because California and China have started a movement that goes very strong in the direction of electric cars. And with that in 10 or 20 years, we are going to decarbonize transportation which is 30% of carbon carbon emissions in the world. So we saw that our mission was to enable this transition of the demand, making sure that every building would go to net zero, every industry would go to net zero, every city would go to net zero on making sure so and we are the biggest supplier of energy to data centers that we would put together the digital infrastructure, not only for us to live in the digital age, but to make sure that everything would be connected and everything could be optimized. It took some time to be understood. But then the world keep from turn and then we had a lot of momentum on the route of advance on our competition on V CS. What created the dynamics I was describing before? And what about the buy? I mean, you you undertake this big mission. What was the response like within the company within your board among shareholders? Um When you sort of launched this big push towards sustainability, was there push back? Or I have to say I put from day 1, 2003, I became CEO of the company on Sun CEO. Day one, I put slides about sustainability in each and every of my presentation. I can say that for investors for 15 years, nobody was caring till there was 2015, the cop 21 but more important in 2019, um some of our investors starting with Black Rock Clar started to send letters saying we all view account. We we all do accountable UC OS, not only on the financials, but on the all impact you have on your environment and then it became mainstream, right? So I'm gonna give a few examples for the people who could doubt of that. The first one I from the origin, we belong to the United Global Compact. We are part of the because Global Compact gives you a sort of compass to all the companies who want to work together in that direction. Last year, another 3000 companies joined the Global Compact at the time when people could speak about the backlash against cag. But you see that movement, you've got 3000 companies who've signed to be Net zero on being certified through S BT. Those 3000 companies are tagging along or taking along thousands of other companies who are their suppliers on scope three and we are part, of course, we are company 59 on, on that group of companies. So the movement is taking place and it's a sort of snowboarding because I take Schneider 99% of our footprint is with our ecosystem. So when we took that commitment to be net zero by 2050 then we are taking along our suppliers, 1000 suppliers, we bring 100 million tons of saving to our customers. We help the communities to get access for the first time to green energy. 50 million people who didn't have access to energy, get access to energy. Thanks to what we do and investors react positively to that. So last year we are one of the top three companies in which the ESG fund are investing. So that has driven a lot of rating or positive rating for Schneider. And you've seen the share price going up very fast. So when you do that, number one, you need to align the purpose, the strategy, the mission of your company with EG and to do it very rigorously. Number two, you need to have the right governance. So for us, we have a committee at the board, we have a representative at the executive committee and we have a stakeholder committee which challenges the decision of the board, taking other stakeholders point of view. Number three, you need to embark your own ecosystem, customers, suppliers, employees shareholders, they have to, yeah, they have to be consistent with what you have described. Number four, your culture and therefore the people you choose. But when you live like me a community of 150,000 people in 100 countries. It's not only good to have one very clear purpose which is aligned on something positive because sustainable means that what you do is sustainable by definition. But it's also super important that people know how to do things. Um eeg allows you to define ethical, ecological, social sort of standards that you want to adhere to. So all of this was actually demanding at the beginning needed a lot of explanation. But suddenly the people who join you are people who believe in those things that mean your company in the right tail winds because what's sustainable actually brings a lot of growth. And one thing if you are the CEO is to derisk your company. So making sure that you have strong standards in terms of CG is bringing is decreasing, noticeably all levels of risk in the company. So more opportunities, less risk that brings normally good results. And you mentioned cop and you were there again this year. Um And when you were there, you, you um you shared this sort of remarkable stat or at least I find it remarkable that 70% of carbon emissions today can be eliminated with today's technology. And I I find that very reassuring actually that we don't need some, you know, huge breakthrough. We have some of the tools um to do that to, to really um bring down emissions today. But my question is So, so what's the hold up? You know, why aren't we making more progress or more rapid progress on cutting emissions? I think, because human beings are very, very slow to embrace change. Uh Think about it. I had my first internet connection when I was living in China in 9495. And it took another 10 years to get Facebook and probably another 12 or 15 years to get tuba and all of this could have been possible much earlier, not completely because you needed the smartphone as the as the other innovation to to enable that. Um Let's let's look at at the reality today. If you start by saying that the real transition is starting with a demand. I mean, if your building is net zero, then you put no pressure on the supply or if your plant is not zero, like we help Takida in Singapore to be 15% energy positive in a place which is constrained in terms of energy. Then suddenly your manufacturing is becoming positive in uh in Singapore and you can apply that to uh uh many, many things. But the technologies which allow us now to do that are completely different from the one that we used even 10 years ago. Smart buildings. Everybody is speaking about small buildings, you go to Europe and the US, less than 10% of the buildings are smart and buildings are representing 37% of energy consumption on carbon emissions. So before speaking about moonshots and doing whatever nuclear fusion and those kind of things, let's make sure that all of the buildings are connected and they are very energy efficient and they can load and store energy when energy is cheap and green when the solar panels are working on the, when the windmills are pro producing energy. Um I look at the buildings around me, even here in Hong Kong, there is not much solar panel and there is a lot of sun which is available. So when you speak to the construction industry and you spoke about the building, so I stick here or I stay here. Um When, when you speak about efficiency, many people will speak about windows and roofing and this is very expensive and this takes a lot of money and a lot of time um you apply digital to most of the buildings, you're going to get the same result for 1/10 of the cost and 1/10 of the time. Um And it's exactly the same thing as with the internet. Today. People have not yet integrated the capability. Uh And with that on the top of it, once you have digitized, you can connect to the grid, the smart grid. And we are doing for instance in Hong Kong, the grid smart with C LP and you can make sure that your buildings on your homes are loading energy when it's cheap and green. So all of this has barely started. But this is very exciting for the next years to come. So what I'm saying is that before thinking about the big revolution that just deploy what we have because time time counts, right? Carbon is not, it's it's it's integrated, a ton of carbon that we save today has 10 times more value than a ton of carbon we save in 10 years time. So time is really important. Great. Well, we will leave it there. Thank you so much for being with us and for giving us some actionable steps as we look to cut emissions and hopefully have a greener future, go digital and go electric. Ok. Thank you. Thank you. Thanks so much.

Roger Atkins, Founder, Electric Vehicles Outlook (Appearing Virtually) Christopher Beddor, Deputy China Research Director, Gaveka Paul Gong,  Executive Director, Autos Research, Ubs

Innovation Forum 2024: Winning The Global Ev Race

Innovation Forum 2024: Who’s Winning The Global Ev Race?

Hey, everyone, very excited about this panel. I think we all kind of woke up to uh the strength of the Chinese ev sector in the past year. Um I want to start by by pointing out two milestones and the first milestone I would like Chris to respond to last year, China became the world's top auto exporter beating out Japan how much of that is due to evs uh it's basically fully an EV story. Um So the story of China's auto sector is basically that prior to about 2021 the entire industry in terms of production was actually on something of a slight down slope. Uh And then the EV transition happened. So I realized that most people have just kind of attuned to it over the past year or so, but it's actually been going on since about uh you can date it at various points. But we, we take about 2021 as really the the key moment and that growth has been almost entirely from EVs. Uh So what you're looking at is every single year, consumers within China have bought about 2 million more evs than the previous year. Give or take. Um at the same time, uh industrial internal combustion engine vehicles have actually been in decline. The transition has been so rapid that many of the legacy automakers are actually left with excess spare capacity. So they've been started exporting that abroad. So the exports start again around 2021 is when you start to see the increase. And that's es which has caught all the news, but it's also just legacy it vehicles as well. So where we are right now is sort of the inevitable discussions about. Ok, well, have we been producing too much? Is there excess capacity? How many price cuts are manufacturers going to have to give? Uh is there going to be market exits? And then of course, abroad, you're seeing the discussions about what do we do with these extremely competitive Chinese evs and I want to bring in Paul now and I want to thank Paul for giving us your time as you're heading to the airport later today. Um But I want to ask you about the other big milestone last year, which was Byd, beating Tesla as the world's largest seller of battery electric vehicles. And that's specifically saying that because I know in terms of all electric vehicles that beat Tesla ages ago, but, but you know, is Byd just built different, what is it about this company that's made it so successful? Yeah, sure. Um Well, at U Bs, we like to tear down ev five years ago, we had the Tesla Model three tear down and we were shocked how much Tesla was ahead in terms of technology leadership. It was several years ahead. But last year when we had the by DC O tear down this time, we find basically there is little gap of the technology but just different priorities. For example, the Tesla will might prioritize the top speed byp has a bigger space. Tesla has better autom driving a function while BYP has five G connection and the infotainment system that is better. But more importantly is when we find this BYD built by BC O which is highly comparable to the model three as a medium size, its cost is about 15% lower even than the Tesla Shanghai factory production. Thanks to the system integration, thanks to the smart design. And so we were shocked how fast Boyd has caught up in terms of this gap. And behind of that at the moment of our TRB ID has 70,000 R and D engineers as a comparative Tesla has 120,000 total number of employees including workers and sales people. And they recruited another 30,000 last year from the fresh grad. And yesterday, the report is fine annual report that was 100,000 R and D engineers that is the biggest team in the world and almost fully dedicated within the EV and the supply chain. Um I want to bring in Roger for this next question because we talk a lot about EV companies, car makers, but there's more into the car than just, you know, the car, there's components and there's the batteries. Um How is the battery making sector being transformed by this big EV boom? Uh Well, good evening everybody. Hello, Nicholas and, and to add to my panel, um my fellow panelists this all began actually in really 2015 or a little bit before it was all part of the made in China 2025 ambition. And at the heart of that indeed is the battery. Uh So if you look at how China has developed the one thing they've done incredibly successfully as have Tesla is vertical integration is the ability to have the ecosystem which is very much centered around the battery. So when you look at the development in China of companies like Byd, like CATL, like a number of other key companies that's at the core of why Asia now in general, because you've seen similar activity, of course in, in South Korea and in Japan, um very much to a lesser extent, but certainly more advanced than, than Europe. So Europe now is playing a frantic game of catch up and the vertical integration isn't just about making a battery. Of course, there's the downstream and upstream sides to both of those things and the critical minerals focus again that China put into that made in China 2025 plan is at the heart is at the core of where this all is. So I would say it's about having long term strategic thinking, it's about having vertical integration. And then the other core part which is only now emerging is joining up the renewable energy revolution, new energy with electric vehicles, with the battery in the middle. So the battery then becomes part of that system if you like it enhances both new mobility and new energy. And I think it's quite, it's quite useful in many ways that the Chinese call their electric vehicles, new energy vehicles, not ev si think that's a very, that's visionary quite frankly. So II I do want to stick on this topic of industrial policy. You know, EVs are now one of it's like solar, it's like wind, it's an area where China made a very big long term bet and it appears to be successful. Um But now you know that they're starting to withdraw support, Robin Zung was to the media talking about how the market to be much more market driven going forward. You know what as Beijing kind of changed its approach to the sector, how is EV is going to change, going to be in the next few years and maybe Chris, you can, you can take that question. Yeah, I think that so where we're at in this movie right now is that you do hear a lot of talk within the government about the potential for, maybe there is excess capacity and maybe we do need to take some steps to, uh, to address that. So, some of the things that the government is doing at this point is, uh, they've already removed cash subsidies. Um, they are capping the, um, the exemption that you get on auto taxes and they're going to lower that. So basically taking away incentives uh that they had put in place and Paul is exactly right. This is essentially a creature of industrial policy at some level. Um But at the end of the day, I mean, what's happening here just like you said, it's happened before with solar. Um and it's happening now with evs, uh China is essentially doubling down on industrial policy. Um EVs are kind of the topic of the moment, there'll be something else, uh you know, after evs um and ultimately how this resolves itself is uh through, you know, prices going down market, clearing and so forth, some manufacturers will probably exit the market. Um So I think that we're, we're sort of like midway through this movie. Um But I think we still got a ways to go. Um I want to go back to you Roger. Um You know, again, the headlines right now, the discussion about companies invest a lot in evs, but now maybe there's some overinvestment of overcapacity, uh dealers in the US are complaining about ev staying on lots. Um And we've seen this cycle before where in the cycle do you think we are in terms of ev demand and, and customer um interest in evs? I really, that's at the heart of this, this whole arena now. I think it's a great question. Um, cycles, you know, we've seen many cycles in human history, you know, in human history, the rise and fall of empire, um economic cycles, the previous panel was talking about where we are, you know, Japan interest rates, the global economic system and yeah, cycles are what they are. And within the automotive industry, I've been in that 40 years, half of that time has been in and around electric vehicles. I've seen a number of cycles but the two big differences, I think now that sit over what happens next are climate change because that hasn't happened at all in human history before. So that cuts right across a number of these cycles, how they work and why they work. And then the other one a bit as the panel were alluding to earlier is demographics, an aging population changes so much. So my personal view, I suppose it's a professional view because that's kind of what I do. Um is I don't think massive option of electric vehicles should or will ever happen. And the reason for saying that is I think the the bigger shift is going to be towards the artificial inspired um uh driverless vehicle technology, uh ride sharing, etcetera, etcetera. Because if you combine an increasingly urbanized city based global population as an aging population with a number of other factors which I won't go through them all. And I think it all leads you down to that. What's that phrase? Uh Necessity is the mother of invention? Um, so I, I don't think we're ever gonna see mass adoption of evs because I don't think that the global car market of 80 million a year is ever gonna be that big again. I think it's gonna come down to 70 60 50 40 million because we'll have, we'll just share more because we have to and I, I want to ask a similar question to you, Paul. Um looking at China specifically, you know, the China Car Association, I believe they're predicting 25% ev growth this year compared to 36% last year and 96% the year before that. So slowing down. Um What does that mean for China's EV sector? You know, a lot of these loss making companies, there's profitability concerns, there's a price war going on as ev growth in China slows, what does that mean for the industry? Well, I mean, from the growth rate point of view because nowadays you have a bigger base. So it seems that the growth rate might slow down a little bit, which might not necessarily be the case because you are going to have another rebalancing of the pricing and the declining of the DC M price as well as the supply chain efficiency. Again, that could bring the UV back into the competitiveness versus the ice car. Again, um What we are seeing is uh the penetration rate continues to raise B to high single DJ or about 10% every single year. And uh the growth slowdown is more like a de or base rather than really a significant slowdown. I think there is a huge difference between China versus the Western market right now. What we are saying is in Europe and in us, the subsidies or the uh is either existing in Germany or tightening in France or us. But in China, the carmakers has really brought down the e cost back on par versus the ice and the introduction and the market competition has made them so competitive that it is indeed going to be fully. Yeah. Uh you know, another, another question for you, Paul that we were talking earlier, you know, there's this, there's this big battery electric vehicle versus hybrid vehicle debate um in the global ev sector, you know, everyone talks about Toyota made this big kept with hybrids, everyone made fun of them and now they have record sales. Um What's the EV versus hybrid discussion like in China? Um It's more or less really leaving to the market to design. Uh Just now. Um Roger has emphasized the made in China 2025 the government policies, but I think what has been underappreciated in this market is really the market for the competition. When you consider that the US is like 1 million a year. Tesla has more than half the market share in Europe. You have Volkswagen and these traditional car makers. But in China, Tesla is just 10% out of this 9 million units, Volkswagen. Less than 5% 85% of them are Chinese, the start up the incumbent transformation, the joining of the tech giant all in this fierce competition. And of course, not everyone is going to make but the excited it is this a market force that has bought the innovation efficiency again. And when you mentioned about this planing hybrid, actually, the government never plan the extended range electric vehicle, never in the plant, but it was the the auto that bought this and it was a market force that brought this into the center stage. Um But Nicholas can I just say in terms of cycles, we've been here before. Um history teaches us a lot in the United States when Henry Ford initiated the internal combustion indus industry uh for a number of decades. In the 19 twenties and thirties, there were hundreds and hundreds of car companies just like there've been lots hundreds of electric vehicle companies in China. And what happened is over time, they all, they all diminish because and then you know, the cream rises to the top that happens. And also what we've seen before was when China uh Japan had its export onslaught into the United States and Europe back in the 19 seventies and eighties. Um the Europeans then the Americans as well uh imposed tariffs. And then the way the Japanese got around that was to embed facilities, production plants in those locations. We're now already seeing that with Byd in Hungary, for example, building batteries. So, so if you like the play, we've seen it before. This story, this movie that my friends have. Uh I like the description, by the way, movie we've in these scenes before different access, same scene. Um It's good, you mentioned be waiting hungry because um there is obviously this like overseas expansion in terms of sales and in terms of manufacturing, that's potentially triggering a protectionist backlash in Europe in the US, potentially even like Brazil, you know, very quickly, Chris, I mean, should China's Ed companies be worried about this backlash or will it just kind of play out? Ok. Oh, they should be, I think they already are. Um So there's protection is upcoming. It's really just a question of how much. Uh so I think the focus right now is of course on the EU um and its anti subsidy probe into Chinese uh Chinese autos. Um Also, you're hearing noises from the Biden administration as you mentioned, Brazil. Um So it's really, I mean, we, we basically agree with consensus that you'll see more tariffs saying in the Eu um that said, I think that, you know how they're responding in terms of locating more production facilities abroad. That's the right way to go. I also think that the key factor is going to be the demand in other emerging markets. And there, you've got a really mixed picture. I mean, you've got a group of countries like uh like South Africa, like Indonesia that maybe don't want to scrutinize Chinese imports too much because they sell other things to China. You've got a group that maybe uh like Russia depends on China for other needs. Um So really, once you go through all that list of emerging markets and think through what are the protectionists like, how likely is that? Is that to be uh you get a very, very mixed picture. Final word Chris, very quick. We talked about China having an industrial policy playbook for solar for wind, for evs. Are we going to see it again in another industry? Yes, that's, that's the easiest question you asked. Uh um So I think uh just, just my two cents would be like uh I think that China is currently doubling down on industrial policy. I think that what you're seeing in EVs is of course a story about Chinese CV S and EVs more broadly. Uh but it's also a story about how China conducts industrial policy. Um as Paul mentioned, there is a lot of market forces in there, but there's also a tremendous amount of, I mean, it's a Leninist system, you know, the, the central leadership will say we want to target a certain industry. Everyone focuses on that it's conducted in a campaign style. They go forward at some point. There's a recognition we've gone too far. They pull it back. I think we're currently sort of in the process of that for evs. But the key is that what you're seeing in evs is just a preview. So they're doubling down, there's gonna be more to come. Um So can I just say, I think this whole thing is about energy, it's about resources. It, it always has been, that's the way the world's always worked. So I think the battery and this marriage between new mobility and energy. That's the key. Yeah. So we're at the end of our journey for evs and we should charge ahead to our next session. But before that, I want everyone to thank Chris Paul and Roger for joining us today.

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