Leading the Charge: How Partnerships Can Spark the EV Transition | Uber

Hey, good morning everybody. Thank you so much for joining this breakfast conversation. Thank you to Uber for hosting us, thank you to the World Economic Forum. We're going to talk a lot here at Davos. I've been coming to Davos for many years. I'm Kamal Ahmed, I'm the editor-in-chief and co-founder of The News Movement. And we talk about climate and the climate crisis, and what we need to do as organizations, as individuals, as businesses, as governments. And sometimes it doesn't appear very practical. What are we supposed to practically do? Well, what could be more practical than how you get around the city you live in, how you get home from work, how you get to work, how you get home from a night out? And how can that be connected to the challenge we all face around climate change? And the really practical part of that is electric vehicles. Of all the policy issues that have a practical today application, electric vehicles seems to me to be one of the clearest to the public and most obvious that we can really do some good work together. So Dara, chief executive of Uber, delighted to have you here on the stage with us, with our fabulous guests who are experts in this area. We're going to have a fantastic conversation for the next 45 minutes about the EV revolution. Now if we've been having this conversation maybe just two years ago, it could have felt more positive, it could have felt there was real momentum. But the signals we're starting to hear are maybe slightly different. This notion of cost, this notion of accessibility, this notion of do we need to do this quite now? Are we going too quickly? Does it really matter as much as we thought? Cost of living crisis, surely that's more important. Surely the wars around the world are more important. Well, Dara, I'm going to come to you first because I know you know that is the challenge. And I just wondered if you could outline for us, just to kick us off here, chief executive of Uber, your approach to EVs but also the challenge, which I think is what is so interesting about this debate, the challenge you want to lay down for policymakers and for businesses that can reboot and re-energize the EV electric vehicle conversation.

Thanks so much, Dara, for that overview. What do you think has led to... Actually, I want to do a little straw poll: who uses Uber in here? Thank you, look at that, excellent work there. Around here you need to get around. By the way, they're electric. Dara, you talked about momentum shift. What do you put that down to? I mean, I know cost of living, conflict, somehow not EV specifically, but the debate about the energy transition does appear to have shifted in some way. What do you put it actually down to? You suggested execution, the hard work, yeah, is when it's easy to bail out maybe. What do you think is going on here?

Great, thanks so much, Dara. James Bourston, chief executive of the Clean Air Fund, can I bring you in next? Tell us a little bit about the Clean Air Fund for those people in the audience who don't know the great work you do, but then maybe going on from the points Dara is making, have you sensed this momentum shift? And if you have, what could be some of the solutions?

Thank you. The Clean Air Fund is a philanthropic foundation. We work with businesses, governments, and not-for-profits on projects that reduce air pollution. We try and create the circumstances in which there is political will to put in place the conditions that makes the right choices the cheaper and easier ones. Because I completely agree, people will have an appetite for greener and cleaner policy, but they might not be willing to pay for it. And why should they, frankly? So the sorts of things that we do are about creating these conditions that for an ambitious mayor or an ambitious government, they can step into and implement a policy, maybe a low emission zone, the right kind of taxes or subsidies to incentivize electric vehicles. Or if the government is not ambitious, maybe we create the conditions to make them more ambitious. A lot of what motivates people to care about electric vehicles and air pollution is the environmental cost of pollution, but it's actually mostly the health cost. There are some ridiculously large statistics on the number of deaths per year from air pollution: 8 million people a year, which is a huge percentage of the deaths annually globally. It's particularly bad for children because even when they're in the womb, it causes about a third of miscarriages air pollution does in Southeast Asia. And babies that are born in areas with higher pollution have a lower birth weight, and that affects them for the rest of their lives. Once they're born, pollution often sits lower to the ground because it's heavy, and that's where children are out playing, they're in a pushchair. So people really care about the health of their kids: whether it's safe for their kids to go outside, whether their kids can get an education because in some parts of the world, the traffic pollution is so bad that kids can't concentrate at school because the pollution is poisoning them. That's really highly motivational, and people can connect with those stories. I don't know whether any of you have heard of Ella Kissi-Debrah? Anybody? No, two, a little. A very tragic story of a little girl aged nine in London who died of a severe asthma attack brought on by traffic pollution. She's the first person in the world to have air pollution written as the cause of death on her death certificate because of the hard work of her mom getting the inquest reopened after she found out that they lived on the South Circular, which is the inner ring road in London, super congested, loads of heavy trucks use it. Her school was also just off that road, and because it's a big road, there's an air pollution monitor right there by their house. The chief pediatrician in the UK correlated the times that Ella went to hospital in the last few years of her life, all of the really severe asthma attacks that she had, with peak pollution episodes on that road. Her mom now is a huge advocate for reducing pollution in London and the rest of the UK and globally. People see her and think, 'That could be me.' It's not these statistics of the 8 million deaths, it's not something that I can think, 'I can't imagine dying anyway.' We have this cognitive dissonance about death statistics, and we tend to think that that's happening in parts of the world that we don't live in. But when you see Rosamund talking about how she's worried about her twins now because they also have severe asthma, you can really connect with that story. That is what has provided the momentum in London for the low emission zone, which has not been without political difficulty in this latest expansion to 10 million people. It's been quite a bunfight, but it's why the zone got introduced, it's why there was no backlash against the first two phases of the zone, because of Rosamund, because of doctors who are very trusted talking about the health impact on people in London, especially on children.

Jane, sorry, that's excellent. It's interesting. Maybe I'll come back to you, Dara, in a sec. But that notion of obviously climate is everything, but health is maybe a better connection point for people about why things need to change now rather than in the next decade. Should Uber and others be making much more of that part of the EV conversation that maybe isn't heard as much? It's still really seen as a macroclimate change issue rather than a pollution issue. Is that appears to be what you're saying?

Yeah, I think so. Because especially at a local level, loads of these... Dara said we need the incentives to be set up better, and loads of the incentives end up being set up at a local level. It's quite easy for people to think, 'Yes, it's great for climate change, but why am I doing something when the largest carbon dioxide emissions are elsewhere? What's China doing? What's the US doing?' But actually, the 6,000 childhood asthma cases in London... I know some kids with asthma. That's a local problem, that's something that I can get behind.

Do you think the momentum has shifted? In terms of the conversation, certainly in the UK where you and I are based, the conversation has shifted that this needs to be slower, pushing out the ending of sale of combustion cars to 2035 with the EU. Has there been this change?

Yeah, I think at a national level in the countries that we operate in, yes. At a city level, I don't think so at all. I think the city mayors are actually pushing forward much more quickly on air pollution grounds than they have, and also climate grounds, than they ever have before. It's unfortunate that at a national level in the UK and formerly in Poland, where we do a lot of work, there has been a reluctance to move quickly. I'm totally baffled by this rollback. There was an earlier date for the phase out of the sale of new combustion engine vehicles in the UK that the Prime Minister moved back when nobody was asking for that. I think people think it's bonkers. The market actually is going to move us in that direction anyway. 'Bonkers' is silly for people who don't have UK, but there are things that city mayors cannot do by themselves. I think taxi licensing is one of the things that the mayors we work with talk about a lot. In the UK, for example, if a taxi is licensed in Birmingham, it can operate in London. So despite London wanting to license taxis that are greener, they can't control taxis coming in from elsewhere other than through things like a low emission zone, which is politically very risky to do. They have gone ahead and done it.

Excellent. Well, we'll come on to localism later. I know Lisa, for example, is very engaged in that area. Greg Jackson, founder CEO of Octopus Energy. I think for the room, explain Octopus Energy's journey, which is fascinating, but of course a lot of the EV debate is around infrastructure and doability. Can we do what we need to do? So Greg, we'd love to hear. Tell us about Octopus Energy and then tell us about EV leasing, EV charging, and what your senses are on Dara's point about momentum.

First of all, about energy. Forgive me for what may sound like a pitch, but particularly for people from the States and so on, you'll be less familiar. We're an 8-year-old startup. By revenue, it's nearly $20 billion a year. We provide clean energy to millions of households across the UK, but also most European countries, very big in Japan. The insight behind it really is that fundamentally renewable energy is the cheapest energy we've ever had, and it's getting cheaper every year. What we have is an outdated system that means consumers don't see the benefit. In fact, one of the things that causes backlash as a misunderstanding is that the system we've inherited, built around fossil fuels on everything from household energy to industrial to transport, has somehow managed to make green energy a premium product. We literally tax people for doing the right thing, even though the underlying physics are that it's the cheapest way of powering our lives. Our job is solving that. By the way, it works. Energy companies globally, or utilities, whichever you want to call them, are either invisible or unpopular. We've got a 44-point net promoter score advantage over the next best company in the sector. It's the greatest gap of any company in any sector in the UK. We're now the biggest power provider in the UK because it works. The kind of thing that we've tried to do is to say to consumers that when it's windy and sunny, the more power you use, the cheaper it gets, and it keeps getting cheaper. You don't necessarily have to think about it. The very best compliment for this is electric vehicles. A household with an electric vehicle uses twice as much electricity as one without, and all of that additional consumption can be shifted. You get home and you plug in. You don't care whether we charge your car at 6:00 AM or 6:00 PM. In fact, for most people, you don't care whether it's Sunday, Monday, or Tuesday as long as you've got the miles when you need them. So you're using huge amounts of AI to estimate when every car is going to get home, how much battery you'll need, and we match that with the cheapest energy available, which really correlates with clean energy. Just to give an idea about how impactful this is, I'll use UK numbers because it's our biggest market. A customer using our smartest products to charge their car pays £2.30 for every 100 miles. For an internal combustion engine car, it's £20. Petrol and diesel cost eight times more than green power if we're using the tech correctly. Now what we're finding... First of all, let's talk about this backlash thing. Forgive me for this, for another Britishism, but I honestly couldn't think of any other way of expressing it: the fossil fuel industry are themselves... right? I'm lucky enough to spend a lot of time with them as a power company, and we even sell an awful lot of gas. I spent a lot of time with them, and they've woken up to the fact that electric vehicles are insanely popular. The exponential demand for electric vehicles has caused this backlash. Every article you read can be traced back to a fossil fuel lobbyist. If you speak to people who drive electric cars, speak to the Uber passengers that go in the back of them, it is a superior experience. It's dramatically cheaper to run. By the way, I know that everyone's got an electric car. I've had them seven years. The total amount I've spent on servicing is $160. Total amount ever. So you've got an entire industry now quaking when it realizes that not only policy, not only the desire for government net zero, not only the commitments that are made and the brilliant work from city mayors, but consumers prefer the product now, today. Some people may say electric cars are a rich person's plaything, but if we look at the tidal wave of cheap models that are going to be emerging from China soon, and look, of course, all the trade challenges and things like that, but they reveal the underlying economics of EVs are getting cheaper and cheaper and cheaper. Battery costs fell 133% last year? They fell 133% the year before. Over the last 30 years, they've fallen 97%. So the hardware is coming down massively in price through technology, it's come down massively in price through scale. The cost to fuel them is getting cheaper the more wind farms and solar farms we build, the cheaper the power at the best times. For the fossil fuel industry, it's particularly bad news because the moment a household gets an electric car and realizes that by using clean energy they can reduce the cost of travel 8X, they ask, 'What else can I do?' We found the electric car is the gateway drug for the transition. The moment you get an electric car, you start thinking, 'What if I got a heat pump and got rid of my gas boiler or my gas furnace? What if I got solar panels? By the way, solar panels reduce the cost of your heat pump and your EV by another 80%.' Now of course, not everyone can have all these solutions today. Many people might not live in a house where they've got the ability to have a cheap charger at home and solar panels on the roof. But as we build out the infrastructure for the early adopters, it makes it cheaper for everyone else. We'll hear about the public charging infrastructure isn't yet up to speed, but it's growing exponentially. As we learn how that infrastructure is used, the data behind it allows us to put more of the right chargers in the right places. As the costs keep coming down, we open up wave after wave of accessibility of EVs for everyone. So I think this backlash is a manufactured resistance, but politicians are responding. Voters appear to be responding. Politicians will respond up to the point they discover that people actually prefer these products. We see it with every technology wave. Who remembers the first of the mobile internet? Do you remember WAP? Anyone looked at WAP and said, 'Mobile internet is never going to happen.' Two or three years later, you had...

The technology revolution of the smartphone with a touchscreen changed the world. We can't... I said to a fossil fuel exec, 'You know we need an orderly transition.' I said, 'Too late, mate.' When consumers realize they can put solar panels up, charge their cars, and disconnect from your world, and their neighbors discover it, it's scaling. This stuff is all going to happen. They can slow it down through backlash dialogue, but it's the job of leaders. Everywhere I look, there are these things about leadership to make the world a better place. Everyone in this room, everyone in every room other than the fossil fuel lobbyists, should be spreading this story. It is going to happen. It's our job to make it happen as fast as we can, not only because it's good for the planet, but because it's incredible. The local air pollution story is so... Shenzhen has cleaner air than London now. If we're really here to lead and we look at the fundamentals, we know it's better for consumers, and it's also the greatest business opportunity of my lifetime. Energy today is a $2 trillion sector. The entire automotive sector over the next 15 years will change, and companies that lead will deliver greater value for their shareholders than those trying to resist inevitable change.

Greg, could I just ask you: fossil fuel industry you've got in your sights, or should be in our sights. What about the car makers themselves, the truck makers? Have they also got vested interests in slowing down progress, or do you feel that they actually want to get on?

I'm not making many friends, am I? I don't know who's in the audience, but I hope you're enjoying this. First of all, wishful thinking is the greatest enemy of shareholder value. If your assets are 100 years of knowledge in heavy drivetrains and gearboxes, of course you don't want to lose that phenomenal competitive advantage and all the brilliant engineers you employ who understand it better than anyone else. It really would be convenient if this change wasn't coming, but this change is going to come. Those that accept it and learn how to capitalize on it to create better products and services will create better long-term shareholder value than those that resist change. We've seen this in industry after industry that gets disrupted by technology. Very briefly, I come from a software background. We built enterprise software in 2006. I was over the moon when we got Borders Books as a client. They came to us because they'd been tied up in 1997 in an exclusive deal with Amazon because they had wished the internet wasn't going to be that serious. By 2006 they could finally start to think about having their own online presence, and by 2007 they were dead. Traditionally, incumbents think they can watch a trend and when it gets big they'll acquire their way into it, but by then the companies that set the trend have created exponential value and you can never catch up. The advice to automakers is: for 10 or 15 years there will be some demand for the products they currently make, but all R&D efforts should focus on the fundamentals of where the world is going, driven by innovation and invention around electrification.

Lisa, just before I bring you in. Dara, could I just ask you about the pollution issue? Is that a better connector for making the argument than the macro climate issue?

Thanks so much, Dara. Lisa Rock Alexander, you're the chief sustainability officer at Sempra. Do tell the audience a little bit about what Sempra does; that'll be useful. I think we were talking just before we sat down around this idea of localism—well, not quite localism, these are big cities and big city solutions, but at the local drive, Jane, you were saying that the mayors are still driving for change even though in some other areas momentum has shifted. So tell us a bit about Sempra and the local successes that Sempra is deeply involved in.

Sure. So Sempra is an energy infrastructure company. We serve more Americans their daily heat and electricity through our infrastructure than any other single company. About 15% of the American population is served by our operating companies, which include some of the country's largest utilities. Those utilities are primarily in some of the biggest markets in the country: California, Texas. We also have significant assets in Mexico. If you combine those, our infrastructure is powering the third-largest GDP if you add those markets together. We also have the highest percentage of renewables flowing through our grids compared to any other single utility infrastructure company in the country. In Texas and California, we're well over 60% renewables at any point in time, often higher. We have this incredible footprint to make a difference, powering some of the world's most significant economies, some of the fastest-growing economies. It's a real opportunity to tap into growth related to reducing emissions and improving air pollution. If I double-click into San Diego, where we have significant infrastructure, we have some of the highest penetration of rooftop solar in that area and some of the highest penetration of electric vehicles compared to any other city in the country. There are almost 100,000 electric vehicles in San Diego alone, about 10,000 chargers today. We've had a 40% year-over-year growth in electric vehicles in that market. San Diego is a really great example of what can happen with the future. By 2030, we expect to grow from around 100,000 electric vehicles to nearly a million, and from 10,000 chargers to nearly 200,000 in just six years. This is an incredible business opportunity for chargers, for electric vehicle companies, and for others. From my perspective, we think about operating the grid to keep the electricity on and to power this. Greg mentioned that one electric vehicle in terms of energy demand is roughly the equivalent of half a residential home. By 2030, San Diego currently has a housing stock of around 500,000 homes. By 2030, we will have the equivalent in EVs of another 500,000 homes in our city served by the grid. It is a doubling of the load we typically have. As we think about what's possible on a local level, we really think about how to shore up the grid to make that happen. But most excitingly is the role of EVs in energy. We're talking here about transforming the transportation sector. You see drivers and cars; I see roaming virtual energy grids through the electric vehicle fleets of the future. We're doing a lot with vehicle-to-grid pilots and demonstrations. Vehicle-to-everything: not just vehicle-to-grid, but vehicle-to-home, vehicle-to-generators in the case of a crisis. We're really excited about the software and hardware prospects, partnering with many. Partnership is key. Today, where we see the most near-term opportunity for this vehicle-to-everything comes down to a local example with school buses: fixed routes, charge during the day when we have the most solar coming through the grid. There, we can aggregate what the school buses are doing, aggregate the demand, and use the bus fleets to help balance the energy grid and maximize the renewables coming online while ensuring we don't run into reliability issues. From a grid perspective, we think EVs are truly part of the future, and it's not just about transforming energy, it's about transforming transportation and our energy systems.

Lisa, talk us a bit through—I'm slightly ignorant about many parts of America, sadly, forgive me—the accessibility issues in Europe, where we have a certain type of city infrastructure, building many apartments, very small streets, lots of it built in the 19th century. Britain in particular is a lot of it very old and very cramped and very inaccessible for the kind of infrastructure we're talking about on this panel. I imagine San Diego doesn't have as many challenges in terms of accessibility of chargers. Is there anything that Europe and the UK could learn from the work you've been doing, particularly in California on accessibility? Because Dara made the point: until the vehicle is cheaper and charging is more accessible to me—I live in a fifth-floor apartment in a poorer part of London—how do we fix that?

Right. So California is a hotbed of innovation, largely because so much of our infrastructure is new; we have a lot of land, so we don't deal with these generational built environment issues. I will speak to an important part of what you just said, though, which goes back to the affluence that's been driving EV adoption to date. Charging is also related largely to single-family homes as well as public charging stations. The real gap in California, and probably in London as well, relates to rental environments and apartments. More than 40% of people in our state in California live in those environments. There are a number of issues. Part of it is the physical space, which you alluded to, which is a challenge in London as well. I think the bigger issue is the economic disconnect between the owners of the apartments and the renters. The renters who would be charging benefit directly from that charging infrastructure, but the owner's incentive to put it in place is much less. This is where public policy can really come into play to bridge that economic misalignment.

That's great. Lisa, Dara, we're coming towards the last five, six, seven minutes of this fantastic discussion. Just wanted to move it on a little bit into the notion of how we travel. My daughter's 23, my son is 20. I remember wanting desperately to buy my first car as soon as I could pass my test at 17. In the UK, we had figures earlier this week: it is now more expensive for an 18-year-old to insure their car than to buy a car. I cannot imagine my daughter and my son—they haven't passed their driving tests—they use Uber via my family app. So I need to consider that expense to their father, who's a lovely man. But just take us forward five to ten years: you're in the transportation of people industry, as well as many other things. How does that change, and how does that help this debate? My son and daughter would rather travel around in a nice EV. How does personal transport change if people aren't actually buying their own cars?

Greg, can I pick up on a very powerful point that Lisa made about this accessibility issue: renting spaces that don't have the economic muscle. You said it's odd that we're in a world where this is seen as a premium product even though the base energy coming in is cheaper. You've asked Sempra for policy proposals. Who needs to change so that landlords have a duty to put it as part of the rental agreement? What can change it?

Well, first of all, picking up on Dara's analogy earlier about the expense of electric vehicles. The hardware, the capital cost—when the iPhone was launched, Steve Ballmer, then CEO of Microsoft, laughed loud on TV and said, 'Who's going to pay $500 for a phone? It hasn't even got any buttons!' There were two failures of vision in that statement. One was that buttons were going to be necessary. I think understanding the improvements: for example, you lose the noise when you get an electric car. You can't rev one. What a massive upgrade for the citizenry and for drivers. The other failure of vision was understanding that what started at $500—and by the way, if you want to spend a lot, iPhones have gotten much more expensive—would pave the way to the $10 or $20 Android within half a decade that changed the world. We have the same underlying processes now. There will always be very premium electric cars, just as there were very premium petrol cars, but the base models are going to get cheaper. The cheapest model is a skateboard with a battery and some open-source software. That's what we're building. Whether it be from China or in the US, sooner or later consumer demand will say, 'We see these devices elsewhere and we want them.' The first thing we have to do is remember: when the iPhone launched, you couldn't get a signal. It launched with Edge as the wireless signal. Now if you get an E on your phone, you write a letter; it's faster. But it paved the way. The second thing was you couldn't get a signal for many months in most cities because the data infrastructure had never been built for it and was swamped. Consumer demand drove the change that led to near-universal 3G, 4G, 5G. Consumer demand will drive it. The more we put electric cars on the road, the more that those who get them will demand from their local authorities the ability to run a cable across a pavement with proper protection, or lamp post charging on every lamp post. The first thing is we shouldn't lose sight that consumer demand—consumers are voters and citizens—can really drive change. On the regulatory side, we have this crazy thing where there are cities in the UK where the council tells you how to run a cable across a pavement safely, and others where they prosecute you for it. What we have to do is illustrate to policymakers that thanks to private sector innovation and early policy, there is now phenomenal demand. We need to make it easy. Whether it be forcing landlords to put communal charging in buildings, which works brilliantly for driving adoption, or finding solutions for cities where people park on streets.

OK, Jane. Policy solutions: this is what we've been looking for, things that are doable. I love Greg's consumer demand side of this, but we know there is still a digital divide. Many people don't have access to the smartphone ecology.

In the UK, 97% of people have got a smartphone or internet connection at home. They don't carry the same kit around with them, do they? Honestly, it's really... look, it's not totally universal globally, but it's pretty universal. You can get there through consumer demand.

OK, Jane: policy solutions to this notion that Lisa raised around, particularly in Europe, where the heritage infrastructure is so difficult in terms of putting in new infrastructure?

Well, I was just thinking as you were talking: timing is critical. I actually worked on London's first electric vehicle strategy 15 years ago. I had forgotten that until this conversation. We got some modeling of who the early adopters were, and it was exactly as Dara said: people who think of themselves as green, who are able to afford the Tesla, who in London don't have a driveway or garage because they live in Richmond and Camden and those central London boroughs. Then what's the adoption curve? Timing for charging infrastructure has to be right. In London, Camden was the perfect area for adoption; people there were driving three or four miles a day dropping kids off at school. Other people on the outskirts of London were driving 50 miles a day, they had a driveway and a garage, but they were not early adopters. As a government, you don't want to invest in infrastructure that won't be used, especially if it leads to a backlash. Another example from Poland: the national government moved too fast on electric vehicles. Their first law to enable cities to put in low emission zones said they could only allow electric vehicles. Krakow implemented one, but electric vehicle penetration was 0.1%. Nobody could drive there; they had to cancel it, setting back EV adoption and low emission zones in Poland by a number of years. Now the law has changed, focusing on cleaner vehicles. Timing is one point. The other is focusing on Dara's point about mileage driven, not number of vehicles. Corporate fleets, taxis: making sure incentives are there for those driving the most miles to switch from combustion engine vehicles, not focusing so hard on private car drivers.

Yeah. Dara, we've come to the end of our time together. Just to finish with you: three takeaways for the audience—and I'm seeing a huge number of people here, some of them policymakers, so I will reflect this conversation to them in the meetings I'll be having. Three things that should happen this year or in the medium term that will really help your drive towards being—is it in the end you want Uber to be an EV-only business?

Easy. Dara, thank you so much. Lisa, thank you. Jane and Greg, even though you swore on stage, thank you so much. Thank you, audience. What a fantastic conversation.