Engines, EVs and Espresso: Ep 18 - The Case for Hybrids

On this week’s episode of Engines, EVs, and Espresso, Molly gives us the inside scoop on the coffee culture of the IndyCar paddock, and we brainstorm about the future of coffee activations in motorsport.
Abby and Molly take a deep dive into Toyota’s 1:6:90 announcement and the case for hybrids (PHEVs and mild hybrids) vs. fully electric vehicles (EVs) in a constrained economy and quickly changing climate conditions. Finally, we analyze the evolving business model between Red Bull's F1 team and Alpha Tauri and discuss the implications in the cost cap era.

And as usual, Stay Curious and Stay Caffeinated!

Transcript

Unknown: 0:00

Did you tell me that you weren't going to stare at a thing of letter beads and have the most unhinge bracelet idea and string it. Oh I'm already I'm already thinking about making one that says baby grandma oh my god well now I need it in my life where I won't be fulfilling exactly until I receive this bracelet even have like different metals you can use there you go oh my gosh. Oh my god it's so nice. Oh my good eye that oh my god that's I'm making myself when it says that. Oh my god. Oh, it's perfect. We should give me more background on these bracelets that you made for IndyCar weekend. You weren't in I made him for I started with NASCAR weekend in Chicago. But yes, I was at IndyCar in Nashville. So I needed somebody to pass the time on the train and I'm absolutely loving the the friendship bracelet trend. And so I made a bunch of NASCAR ones that everybody went absolutely feral over cruise included. And so I made a bunch for IndyCar weekend. And then like in the middle of the weekend, we were stringing ones with inside jokes. And so I was giving them out all night and our last night I gave away a bunch to and everybody's like, Do you have any more and I was like, I don't I'm sorry. So I was like giving like my personal was off my wrist to people while we were out at the bar. And then I was like I got to a point I was like Sorry, these are my sentimental ones. And so you had bracelets and you drank coffee up and down the IndyCar paddock. Tell us more about it. I did I had coffee all over Nashville and up and down the IndyCar paddock in the middle of the terrible rain. Because that was a weekend of miserable weather. I found myself in the Honda hospitality with a friend of the pod and Honda hospitality has a full coffee bar like barista make it to order like whole menu of options that you can choose from and then they'll do but I thought this was so fun. I didn't try it. But they'll do themed drinks for the weekend like but their coffee drinks. And so there was like a Music City latte to tell you what was in it. But it was super cute. Like it was very like it was themed and the like board had art on it. And so I wound up having some coffee and Honda while I waited out the rain. And actually it was very delicious. I had an americano that was delightful. And then also had a second americano because we were there long enough because the rain delay happen. And so also while at Honda hospitality I had we were joined by Chuck Schiff ski, who is the head of motorsports marketing and PR for Honda America and his wife and they were absolutely wonderful. So shout out Chuck. Hello. So it was really fun to talk to him. He's absolutely lovely. I did plug the pod and kind of get to nerd out and be like, Oh my god, hide shop and talk to him and get to know him and his wife and we talked about everything from EVs to peacocks that were pestering them at their old house. That's really funny. Yes, like a flock of peacocks. You know how obsessed I've been with peacocks lately, and I've been obsessed with peacocks lately wherever I go. I see peacocks. I don't know what's happening. It shows up in random notebooks. It shows up on screen savers. Yes, there has to be an episode called racing in peacocks and chuck this is my public request to you. We need to have you on I guess we got peacocks but I think first thing about that is that I really liked this idea for free coffee shop I think that reminded me of our Moto GP weekend and Kota there was that coffee bar area they had the run Sylia Silva so I think as a thing in motorsport products have really good yeah, I'm assuming that happens at all sports like hospitalities I'm not used to now and honestly and like i This sounds really entitled if we like I'm very used to being in hospitality or having a credential going to race and that's not common. It's a European thing. Maybe. I wonder if it's like series two series two because like NASCAR, it's not been like that. It's just kind of like they have like the tall things of like carafes of coffee basically. But I know in like EMSA and wack and now Moto GP and I guess now IndyCar but a lot of the teams themselves like there's a big coffee culture in the paddock with the drivers and And with riders and so the teams will actually have, like their own setup. I remember there being a thing about Chip Ganassi in EMSA. And how they bought this like couple $1,000 machine for their hauler, so that they could have good coffee because that's like the team wanted good coffee and they all bond over good espresso and rancor, vendors and who drives in one of the cars brings his beans and it was all this this big thing about good coffee at CGIAR. And then like Honda hospitality had a whole coffee bar, which was super awesome. And so there is like a really prevalent coffee culture in paddocks. I mean even in, I think WAEC and super formula. Kamui, Kobayashi brings like a modified air stream with Toyota that's a coffee bar. And it's like wow, in the paddock. Yeah. And so there's a lot of coffee culture in racing, and a lot of coffee culture within the paddocks and within the teams. I think it was super cool and I loved it so much. And I love seeing like coffee bars like that and paddocks because I think it's super cool. I love the theme it I didn't try it because it sounded really sweet. But like even the themed options are something local. Even if you're in a certain city like to activate outside of just thinking outside of the teams and their coffee culture activate the city have the coffee bar there. I've had this idea forever, whoever's listening here, activate their local coffee shops. I've had this whole idea for a coffee treasure hunt, but you have to go to each one of it to find out which team drivers latte you're gonna find there's going to be a shareholder clerk somewhere there's gonna be a Pierre Gasly somewhere about turbo TAS if Formula One would like to hire a head of coffee education just give me a call. Give me a call. I mean any series really? Yes. Let's get coffee culture to the forefront of paddocks and races because it's already there. Hey, another great sponsorship idea coffee companies. Yeah, why is Starbucks now partnering we I don't love Starbucks but it's drinkable coffee. Yeah, that was too strong for you. But my point yet the where's the Starbucks hos like they already have Chipotle as exactly Where's like the Starbucks hops f1 team. Chipotle have one team. One thing I loved like sidenote from all of this was the cups were Honda branded. So as you were like we went back out in the paddock, there's a picture of me that was taken. I was bringing a coffee up to one of our friends that had gone to the media center and was on their way back over to Honda. And then I had my coffee and then my friend Frey I had her cappuccino and so I'm like it looks like I'm holding three coffees and all of the cups say Honda on them, like which is brilliant from an advertising standpoint. Another really cool brand activation thing that I've seen with like the coffee specifically is from Williams they had like this really cool little you know, you can do like the stencils like, you know, whenever they had like one in the shape of the Williams logo, and I just thought that was like so cute. Like what a good idea. It takes two seconds to do and feels like really special wasn't Mercedes printing lattes. Formula II just did that too. There was something with Norman and Sasha from Nismo they just did something and it was like the whole grade printed on the lattes with like latte art. It was super cool. And it was a really fun activation to for Formula E while they were in. I think it was when they were in Rome. Oh, Portland would have made good sense to you. That's such a good cause I was Portland or Rome. It was one of the tickets also bonkers hot mostly. So nobody's drinking cappuccinos. But get that cold brew. Get that cold. We're going to call it motor oil. Do something I don't know. Oh, that's great name. Something that you do it like IndyCar NASCAR or something? No, I'm called motor oil call presented by Shell watching calling shell up after sending this episode to them. Oh my god. Yeah, that's just having like a full on like marketing brainstorming meeting. Oh my god. Hey, just hey, you things truly just EQ literally and Jesus EVs and espresso should be the official coffee marketing firm or Formula One. Hey, Gary. Yeah, yeah. A little coffee activation in the paddock. We get our own just give us a kiosk and a dream. And we'll make it happen. Staff it with like barista people that like well hang out free ideas and free coffee. That is fantastic. I'll also bring my tiny bearville I'll just like I'll be in charge of using you Know how to push the buttons and everything tiny dog energy with the tiny bearville. It's tiny dog baby grandma, like I'm bringing all the vibes, the tiny coffee activation. So you mentioned community Kobayashi earlier. And that got me thinking to Toyotas one 690 initiative. And we haven't talked about these for a while. And this is a segue from race cars. And we'll come back to race cars again. But I think we should be talking about the future of electric vehicles as is because, yes, it's not going to be a pure Evie future. And more and more proof is coming out of it. Do you want me to explain one 690. For our listeners that don't know what this initiative is, one of the might be on this call, please. Drill. One 690 Was this initiative that Toyota came out with I think it was in their second quarter earnings broadcast or something around their second quarter calls and kind of their outcomes that they have kind of done the research and recognized that to produce one full battery electric vehicle, the resources, the time, the carbon footprint and everything that goes into producing that one battery electric vehicle that's fully Eevee. You can create, build and put out six plug in hybrids. So that's the one that you could still plug in and charge and 90 non plug in hybrids. So that would be like a pea, half and a half. So that would just be it charges itself advantages everything itself. So for the amount of resources, carbon footprint, the whole nine yards of one single battery electric vehicle, they could do six and 90 of the other, and that they were shifting their brand strategy accordingly to actually focus more on those types of vehicles, versus a Evie heavy portfolio, which a lot of OEMs like Toyota were going towards where they were really kind of prioritizing EVs overheads. And now Toyota is took a step back and said, You know what, it's actually it makes more sense to focus on the head and P have versus the Eevee. With this one 690, they'll still be there just won't be as many. And so B V's battery electric vehicles PHE V's your plug in hybrids, or whatever you want to call ATVs or, or mild hybrids. It's so interesting that a z v what people call a zero emissions vehicle, which can be a better electric vehicle, or like fuel cell powered vehicle, it's again, not net zero. And we're running out of cobalt in the world to come up and support that chemistry. And there's new chemistries that have been non cobalt, non nickel, no nickel Sterling, these new Yes, I Barrett's lower nickel applications, those kinds of streams are coming out. But it never really has been scalable. And the biggest problem with batteries is that after a certain size, for trucking and such, you really can't use batteries anymore, just because it starts becoming so flammable. That that weight power that pay off, just like stops happening. So like you can see comments. My first employer, they've gone fully into electrolyzer and hydrogen fuel cell technology for trucks. So you already know the scale that is needed for a battery electric vehicle or BV. It's not there. It's got limitations. And everybody's starting to see the starting of it, which is why we talked about racing a lot on this podcast, when we talk about sustainable fuels. We talk about biofuels, two very different things. People don't get that, but very different things. And these alternative modes of powering vehicles, I think are causing more harm because think about like the summer we've been having in the world. Texas is at a 33 day streak of being over 100 degree Fahrenheit. Yeah. And there's a wildfire risk in Texas right now. Texas as a wildfire risk, is how hot is it right now? We just saw the news from Lahaina Maui almost getting burned down yesterday, which tells us we're at this precipice of making the right climate decisions. And we don't have a lot of time to keep waiting for that scaling of Yeah, be EVs. Yeah, in like the battery chemistry space. There's all of this talk of like solid state batteries, and that's exactly a different anode and a different electrode. That kind of lessen the dependence on some of the more hazardous materials and materials that are terrible to mind for the environment. But there hasn't really been a giant breakthrough in solid states yet. Yeah, I think Toyota might actually be the closest, if not, they might have just had a breakthrough. I know that there was something with their name on it and solid state recently, there hasn't been very material change the solid state works in 2017. No. So there's, there's that and then I did a paper on this for graduate class, they're finding that there is some material in like undersea mud that you can just basically like tumble it out, and put it back in the ocean or interest. And that, that can be used for batteries and semiconductors actually, like there's actually some really good benefits to it. And it's like a naturally occurring resource. And you can put it back once you've extracted the metallic out of it, and the precious materials out of it, which was kind of cool. So there's all this work happening, but it's not happening, like you're saying at a speed in which it's probably fast enough to really make an impact, and really make a difference in the industry, as we kind of Korean towards this, this precipice, precipice, where they're heart of climate issues, and we're really seeing the effects year after year, and especially this year, with the summers and everything. And this is, I think, one of our biggest kind of shifters combined with the work that's going around in E fuels. And there's another challenge to electricity and water on the fuel piece, the way to generate a lot of that for it. So we're in a huge, let's say, transportation question mark era right now on what's the future is going to be? And I think the answer has to be public transport, otherwise, we are going to lose any car driving privileges, I would be sad. But I wouldn't also be surprised if government started to throttle back or come up with technologies using our onboard diagnostics to roll back the amount of time you drive your car. Now, what dystopian world would that be? Could you imagine, but I I would not be surprised if started happening 10 years from now. I mean, I wonder if we can get to a place with E fuels where you can one for one replace? And regular gasoline. I mean, that's probably a distant future away. But it seems like there's something kind of brewing and bubbling in the fuel space that we might be close to something like that. Yeah, that there could be a development in that space, because I think we see Porsche going to market with any fuel car for 2025. Yeah, 70% of the Porsches ever made are still on the road. And so what happens to these cars that are known for their brand life? So Porsche, Ferrari, I think Lamborghini as well, I think they are, they've already gotten the exceptions for E fuel lead cars, in the fossil fuel regulations that have come up recently. So I really need to see which technology is going to be scaling the fastest. Of course, Evie has a lot more of a leg to stand on. But I think it's also been bottlenecked. By all these different challenges we've talked about, right? The materials not being there, the infrastructure for charging infrastructure, the CCS thing going away in NACS coming in North America is definitely going to help. And so we'll have to see in the next five years where it all kind of goes, because yeah, charging has not been a thing. And the easiest one could have been is the gas companies actually buying out those networks, but they're not doing it either, because they have to give up fossil fuel. So I don't know what the answer is gonna be. And the interesting part is that one 690 thing, and this is my day job, I had to speak to an IDI expert who said, Well, I didn't know this was a thing. And so it's very interesting how well publicized it hasn't been. It's definitely not well publicized. And I'm surprised that not more people are talking about it, because I think also as an OEM, it takes a lot. And I think this is just Toyota being just incredibly agile and on the forefront of things like they have been for so long in realizing that it's not necessarily the right strategy. And we were going to be transparent, open about that. And we're going to pivot and here's what we're going to do. And we're still going to do this, but we may not have gotten it right the first time. Yeah. And I am excited to see where Honda goes with this as well. Right? And how much of hybrids when people say mild hybrid. And racing is such a great way for people to understand this because a lot of people podcasts are listening in for just the racing part. I'm having a light bulb moment. Go for it. I would direct your attention to hypercar in WEC if we're going to talk about exactly erasing leg of it where Toyota has been a hybrid and hypercar. And they've been the only hybrid and hypercar since like 2016, or 2017. They've got a head start on this. They've had a head start. They were one of the first I used to this is another one of those things I wrote a paper on and for grad school class, it was like we had to talk about a hybrid and industry and I was like, I'm talking about the Toyota Gazoo WAEC car because it's actually really cool. They were one of the first pioneers of exhaust recovery. And they helped develop that system and leverage off of Formula One. They had all of this stuff in hybrids that have just gotten better and better and better that have obviously rolled down to the road cars. They're now talking about this like fully fuel cell car that they're going to race in endurance. And where I'm going with this, though, is this L M H and LM d h, which doesn't stand for hybrid, it stands for hypercar, but there are hybrid race cars, and you have the option to actually be non hybrid in the top class, but pretty much everybody's going for it. But I'm going to be very curious, given the sheer number of manufacturers that we see which I think we're up to 16 OEMs for 16 unique entries. In the LM H LM D H class entry. For little tangent LM d h is largely spec you have to use one of the four chassis suppliers. I video I'm gonna put up on this, but you have to use one of the four chassis suppliers. Your hybrid system has to be off the shelf shelf from Bosch, and you have to use the Williams advanced engineering battery pack, which is the same one that's used by Formula E. Now, you have to use all of the standard componentry and then you can build in around it with your car and your arrow. Lm H is ground up much higher of an investment. You can build your own chassis, build your own hybrid electronics and all of that you don't have to use the spec systems. So like Peugeot, Toyota Ferrari, Those are three good examples of the hypercar Acura, BMW, Cadillac, Lamborghini that's going to be an LPN are all going to be LM D H has gone to the more cost effective option. And even with those spec systems in the D H versus the H, I'm really, really curious to see what these manufacturers are going to bring back in house and down into the road car side and see if it actually pushes anything, maybe forward with more hybrid options or if we do see them pivot a hybrid strategy or do bring something hybrid to market with lessons learned. Because what why else would you be racing a hybrid race car, you know, that is why we saw most people leave Formula E and put a lot of their money behind wack. I'm not saying that it was a one to one Audi's doing f1 instead, was there's more hybrid work happening. Formula E has more manufacturers than ever now, but they had their cost cap and all that there's a lot more going on there then yeah, but I think we've also seen most OEMs the bigger ones leave. I think that's just a fact. We've got more racing teams now like the Penske is of the world and whatever you want to call it. mass market cars have left and so I really want to see Toyotas but I also want to see almost Cadillac. If Nissan Would you consider a Nissan mass market? Yeah, yeah, meatless Mondays. That's what I'm saying. That's not everybody but Mercedes. Oh, Audi, who else left BMW. All of the premium cars left. So it's almost not really got I'm gonna fact check. Annex. You've got Jaguar now. Okay, no. And Porsche. Porsche stayed because force hasn't found an exit to f1 yet. And Jaguar. Great. But are we really talking about Jaguar when it comes to cutthroat engineering? No Jaguars done what they've always done and I think when I'm talking about mass market cars, I'm not saying again Formula E is the biggest accidents but they've had a big Exodus happen for you. So I think it's going to be an interesting world in the world of racing and the world of commercial car kind of transference we talked about this Yes, we do constantly. That's literally why we started this podcast it's like a hill we're gonna die on it's like not a hill. We're just going to stand and fight on for live that we're probably going to die on that hill live motorsports or road car sorry. Next. Sorry next. is happening at alphatauri Friends toaster was going to leave the end of the year. Laura Mackey's was going to take over. We saw weird article a couple of days ago that he's already headed to find that and the article was I don't even know where I read it. I was on x. Formerly Twitter is like loron. Mickey's is on his way to find that like, was he on the train? Was he on the plane that somebody seemed on a bicycle, like I needed more information on it wasn't there, then we saw an article somewhere that they're going through an identity crisis, and I want to hear what other people have to think about this, but, but like, what is happening with them? I don't get it except for the fact that Dan Ricardos back from there. I really want to know what's going on in alphatauri. And you read something very interesting from a Helmut Marko interview recently. Yeah, let me pull it back up. So I In like for Batum, this while I do, I'm gonna like pull the thread of like what's going on at alphatauri Because we know that this car currently is still running a lot of 2019 Red Bull pieces. And that when we went into this new era, there was a lot of talk from Alfa Towery that they were saying that they even with the cost cap, don't want to lose the budget by having to buy the newest, latest and greatest from Red Bull to be on the newest car and they've always kind of been a year behind with the car throughout the years. Um, they've always kind of been like one season later with a lot of the development and it was kind of shocking to hear that they were still on some 2019 stuff. And when we're in 2022, but it's kind of really interesting for them to go from this kind of year behind and having a actually decent car with the 80 01 and the 80 02. And the last of the Scuderia alphatauri, or the tour Ross was, which I think was like str 17 or something. And then the 80 03 was a pile of junk. And the 80 04 is still a pile of junk. And so kind of on that it's like, it's unbalanced cards terrible. Helmut Marko did an interview with the young economist, and it's in German, but the translated quote that I had talked to Ali and Abby about was that there is a big cut has been made in regards to Alpha Towery, there is no clear instruction that everything that is allowed by regulations must be taken over from Red Bull Racing, no more in house designs, no more idiosyncrasies in phasa. And the synergies will be used where possible, also, where Red Bull Racing is better, for example, the whole marketing department and the light that brings a big old question to me. What are they going to be spending their money on? Not making any legit comments here? Yeah, go ahead. Say it, you probably say the same thing I'm gonna say. Or if they're going to buy readymade designs and going to be trading hands on the money. Where does that money really go? Is the only question. Yeah, well, I would think and this is where I could go pull the regulations, if we really wanted, that it would likely work in the same way that the power units are handled in the money that changes hands for customer teams. If that because that, to me really kind of screams that this is gonna become a customer Red Bull Car, if that makes sense. Like this is going to be Yeah, a customer program. And so there's regulations around that I'd have to go look at how they do that. So I wonder if that money becomes something different. But at the end of the day, it's still more money in for Red Bull. Yeah, they're basically going to be running a free race car. But the biggest thing I do think is that they still can't spend more than the cost cap on the development of the car. What really this tells me is that their balance sheet is going to look a little bit more healthier and this recession world just because they're actually also making money selling a car to their own team, and don't get it and alpha tower you will have a fighting chance to have more race once. And if everything's being done above board, and there's no more cost cap issues. Well, maybe they can spend more on carry now. I was literally about to say the catering is about to be incredible over their money with an espresso bar. So we can't talk too much crap because we're our espresso bar is gonna be sponsored by Red Bull. Careful, exactly. Red Bull. It's okay. You do whatever you want with your money, your money, your problems. But just invite us for coffee. Or let us make coffee with our bearville in your if it's one of those printers, we'll put whoever you want on it. I like how we kind of started this episode with coffee in a paddock and ended it with coffee in a paddock. I know, right? Yeah, it's just like a circular world. People really probably don't want to hear my theory of time is circular and I will get shut down here. Okay, Matthew McConaughey, time is a flat circle time. That circle is a flat circle is a flat circle. Hey, Matthew McConaughey lives in Austin. We're all the same kind of crazy people. You got to represent Yeah, represent. And so yeah, thank you for listening to this week's episode of engines EVs and espresso. Stay caffeinated. Please be sure to like rate review. Subscribe to this podcast on all your favorite listening platforms of choice. And be sure to follow us on socials on Instagram at engine CBS and espresso and at Twitter slash x I guess at e cubed pod that's easy UV EDP od Baba we could just say that let's aggressively you're like thank you for listening