"Father of Electric Vehicles" Andy Palmer: Robotaxi will challenge private cars, and those who see autonomous driving and shared mobility as a threat will be eliminated

Andy Palmer, while serving as the Chief Operating Officer of Nissan, played a key role in developing the world's first mass-produced pure electric vehicle—the Nissan Leaf. He earned the title of "Godfather of Electric Vehicles." He also served as the CEO of Aston Martin, leading the century-old brand through its electrification transformation.

Recently, Andy Palmer gave an exclusive interview to the Daily Economic News.

When discussing the prosperity of electric vehicles in China, Palmer stated that it is a well-planned "overtaking," and the Chinese experience was a major factor that prompted him to develop pure electric vehicles. He also told the reporter that in the future, autonomous taxis will challenge the traditional car ownership model.

When asked about Trump's plan to impose tariffs on cars imported to the United States, Palmer commented that tariff protection is a big mistake that will make the industry uncompetitive, and the protected companies will become like elderly people, getting weaker day by day.

On Robotaxi and Autonomous Driving: Private Car Model Faces Challenges, Software and AI are the New "Engines" of Cars

NBD: The industry is generally chasing after Robotaxi and autonomous driving technology. What are your thoughts?

Palmer: Robotaxi will undoubtedly become common in cities and urban areas. They have the potential to significantly reduce traffic congestion, lower emissions, and make travel more convenient. As these services become more prevalent, the traditional car ownership model will also be challenged—if a driverless car can be summoned in a few minutes, users will question whether they still need a private car.

For traditional car manufacturers, the rise of Robotaxi is both an opportunity and a wake-up call. Simply manufacturing excellent cars is not enough; manufacturers must evolve into mobility solution providers, and strategic partnerships and technological investments will be crucial. Those who view autonomous driving and shared mobility as threats will face the risk of being eliminated.

As for autonomous driving technology, it has been discussed in the industry for a long time, and progress in this area is now accelerating. It concerns the transformation of the entire mobility ecosystem, from how cars are designed to how they are shared. But the focus is on combining electrification with automation to create a cleaner and more efficient transportation network, which will fundamentally change how we plan our cities and mobility.

We are witnessing a new era of automobiles. In this era, software and AI are extremely important for cars, just like the engines of the past. In the long run, the success of (autonomous vehicles) will depend on the balance between advanced technology and everyday practicality: not only must the technology be impressive, but it must also seamlessly integrate into our daily lives.

Image source: AI generated

Discussing Subsidies and Tariffs: Subsidies Should Not Be a Long-Term Plan, Tariff Protection Will Only Make Companies "Overweight"

NBD: Before, Trump signed an executive order called "Unlocking American Energy," directing federal agencies to immediately suspend funding aimed at promoting the electrification of the automotive industry, including financial support for the construction of electric vehicle charging stations. Trump also hoped to terminate electric vehicle subsidies and incentives and increase tariffs on foreign vehicles imported into the United States. What impact do you think the implementation of these policies will have on the global electric vehicle market?

Palmer: Actually, it's not just Trump; the European Union has also raised similar points.

On the issue of subsidies, I tend to agree with Musk's viewpoint. I believe that electric vehicles should quickly get rid of subsidies. Automobile manufacturing is entirely about economies of scale; scale brings output, which then drives down costs and creates profits. Musk has achieved scale development in electric vehicles, and he may no longer need subsidies now, which I think is the right approach.

Chinese electric vehicles also have scale advantages, while Western car companies have delayed for too long, producing very little, and their cost base is higher than that of China, as China's costs already have scale advantages.

Perhaps, in a very short time, certain subsidies are necessary to promote development, but this should not be a long-term plan.

As for tariffs, I believe this (referring to tariff protection) is a big mistake. History shows that tariffs can be used as part of strategic negotiations. If tariffs are used as a protective measure, it will make the industry uncompetitive because companies will no longer compete with others in the global market and will not expand their scale in the global market. (Protected companies) will become like an elderly person, getting more and more overweight each day.

Therefore, my advice to the (UK) government is that we should remain open, negotiate with China, and invite Chinese manufacturers to establish factories in the UK.

Discussing Technology Companies Entering the Automotive Industry: Can Strengthen the Creation of High-End, Luxury Brands

NBD: Chinese tech giants like Xiaomi and Huawei have entered the electric vehicle market. What do you think about the phenomenon of tech companies entering the electric vehicle market?

Palmer: I have worked in the automotive industry for nearly 46 years. The automotive industry used to be a narrow field. About 15 years ago, when I was just starting to develop the Nissan Leaf, I realized that continuing to maintain a narrow definition was not feasible. The automotive industry needs to connect with other fields, such as mobile networks, and requires interaction with industries outside of itself, as well as influences from outside the industry. At that time, I already realized that cars had to change.

The entry of tech companies will have a huge impact on the automotive industry. But it is very difficult for tech companies to truly become automotive companies; companies like Apple and Google have both failed.

However, Tesla has integrated many industries together, successfully incorporating AI to some extent, and has successfully integrated autonomous driving capabilities, trying to do some experiments with self-driving taxis. Traditional car companies and emerging tech companies can refer to this model for cooperation. There are many modes of cooperation, such as acquisitions and mergers, etc In addition, Huawei's work in this area is also noteworthy, especially in AI integration. Both China and the United States have been at the forefront of AI development. The automotive industry serves as a carrier for AI and may be the most attractive carrier.

If traditional automotive companies and technology companies can collaborate quickly, they can create competitive advantages faster. China has developed rapidly in the AI field, and in manufacturing, it has strong advantages in both quality and technology. However, I believe that Chinese companies still have room for improvement in vehicle driving, handling, noise and vibration, as well as brand management.

Currently, China manufactures many high-quality and cost-effective vehicles, but there is still a need to strengthen the development of high-end and luxury brands. Nio's (蔚来) attempts can be seen as a starting point. We need more brands like this, low price is not the only tool; pricing is also a strategy, and this requires strong brand appeal as a foundation. This is something China should strengthen.

When I was the CEO of Aston Martin, I had many conversations with Chinese companies, and they all said that we could produce 100,000 Aston Martins in China. I told them they did not understand luxury goods.

We should not produce 100,000, but rather 10,000, because scarcity is important. Scarcity creates desire, desire drives demand, and demand pushes prices, which is the most basic principle of supply and demand in economics. China has become an expert in low-cost, high-volume production, but the automotive industry should also consider a high-cost, low-volume model, which is something Chinese companies must think about.

Aston Martin Image Source: Provided by the interviewee

Talking about Chinese Electric Vehicles: A Well-Planned "Overtake"

NBD: You previously mentioned that Chinese electric vehicle companies have become strong competitors in the global market. Why do you say that?

Palmer: My greatest admiration for China comes from my experience serving on the board of Dongfeng Motor.

As early as the early 1990s, the Chinese government proposed a strategy to lead in the field of new energy vehicles (In 1992, Academician Qian Xuesen suggested skipping the gasoline and diesel phase and directly developing new energy vehicles: an immediate plan for battery-powered vehicles should be formulated to catch up and strive to surpass! During the "Eighth Five-Year Plan," the national key scientific and technological project included "Research on Key Technologies for Electric Vehicles").

On August 22, 1992, Qian Xuesen wrote a letter discussing the automotive industry. Image Source: "Selected Letters of Qian Xuesen" My first encounter with this vision was in 2002 when I joined the board of Dongfeng Motor. As the only non-Chinese and non-Japanese director, I gained a deep understanding of the Chinese government's planning and automotive strategy, the goal of this strategy is to surpass the West through new energy vehicles.

Through this plan, first, joint ventures with Western companies were established to learn how to manufacture cars, bringing advanced technology and creating local brands. Then, local brands gradually grew, ultimately moving towards export and internationalization, even globalization.

What I admire most is that from 1992 to today, China has maintained a consistent understanding of promoting development through industrial strategy, especially in the interaction of the battery industry, steel, and aluminum, as well as the overall coordinated operation, (this process) is like a highly complex and coordinated dance.

NBD: What factors led you to fully embrace the concept of electric vehicles?

Palmer: My first encounter with electric vehicles was in 2001. At that time, I was responsible for Nissan's light commercial vehicles, including an electric vehicle that was compliant only in California. This electric vehicle did not sell well, but it gave me an in-depth understanding of electric vehicle technology. Later, there was an internal desire at Nissan to launch a similar model to the Toyota Prius. But I believed that if we only relied on imitation, we would never surpass Toyota.

Therefore, I began to think about how to draw on China's experience and choose leapfrog innovation—pure electric. Ultimately, we launched the Nissan Leaf in 2010, which was not only a technological innovation but also drove market growth for pure electric vehicles and extended-range electric vehicles. This decision was seen as crazy at the time, but it has proven to be successful.

For a while, my colleagues joked about me, they thought spending $4 billion to develop the Nissan Leaf was better off thrown into the Pacific. But now it has proven that this decision was correct.

Nissan Leaf Image Source: Wiki

Discussing "Landing" in Europe: Build factories in the UK, replicate Toyota's success

NBD: What advice do you have for Chinese electric vehicle companies wanting to win the European market?

Palmer: Build factories in the UK, this can be discussed from historical experience.

In the 1980s, oil prices soared, and traditional Western car companies were manufacturing large cars, while Japanese cars had a technological advantage, producing small, fuel-efficient cars. Faced with barriers set by the American and European markets, Japanese companies chose to build factories locally, and Toyota became the largest car company in the world.

Strengthening research and learning is the way for China to maintain momentum in the automotive industry, not only to enhance globalization capabilities globally but also to globalize production. So, come on, build factories in the UK.

Discussing the merger of Nissan and Honda: It was a mistake, with little synergy effect

NBD: Previously, Nissan and Honda announced plans to merge, but the latest news indicates that the two sides have terminated merger talks and decided to abandon the integration plan due to disagreements on key conditions such as the integration ratio. Can you discuss the strategic value of mergers in the automotive industry?

Palmer: I believe that the merger between Nissan and Honda could be a mistake.**The two companies are very similar; both are Japanese companies with the same brand value, producing similar models and targeting similar markets.There is not much synergy between these two companies, and it would ultimately lead to them consuming each other.

They already have a competitive relationship, and after the merger, it would become a situation of "1+1=1." True collaboration should be "1+1=3." In other words, Honda would completely absorb Nissan, and Nissan would ultimately exist only as a brand.

On the other hand, the collaboration potential between Renault and Nissan is "1+1=2" or "2.5," because they are different types of companies facing different markets; Renault dominates in Europe, while Nissan is stronger in China and the United States. Therefore, there is synergy between them.

If an automotive company collaborates with a technology company, such as Tencent and Nissan, 1+1 could equal 3. There are risks in such collaborations; cultural differences could destroy both parties, but they could also bring huge returns. I believe this collaboration model will ultimately be more beneficial for the industry. In contrast, the merger of two very similar companies is more of a defensive choice.

Talking about the Future: In 20 Years, There May Only Be 20 Companies Surviving

Image Source: Visual China

NBD: Looking ahead to the next decade, what advancements do you foresee in electric vehicles? Which companies or sectors will shape the electric vehicle market?

Palmer: In the early 2000s, there were 20 major automotive companies globally. Today, many new companies have emerged. However, in 20 years, there may only be 20 companies left. I believe Tesla will still exist in 20 years, and we may also see Geely and Nio.

From a technological standpoint, there will be significant advancements in battery technology. I think there are two particularly promising paths: one is achieving high energy density through solid-state batteries, exploring the transition from NMC (nickel manganese cobalt) to semi-solid batteries; the other is low-cost technology, which may involve LFP (lithium iron phosphate) derivatives or sodium-ion technology. These two paths can be combined with advancements in battery cooling and electronic control, which will be very noteworthy.

Currently, there is much debate about the future technological paths of the automotive industry, especially in certain specific areas. Although electric vehicles have thermodynamic advantages, it remains unclear whether they will be the absolute winners in all fields. In some areas, synthetic fuels still have their place I believe that automakers should fully promote the development of electric vehicles while maintaining an open mindset to explore the application potential of hydrogen combustion, synthetic fuels, and fuel cell technology in specific models such as luxury cars, trucks, and vans.

Author of the article: Yue Chupeng, Source: Daily Economic News, Original title: "Exclusive Interview with 'Father of Electric Vehicles' Andy Palmer: Robotaxi Will Challenge Private Cars, Those Who View Autonomous Driving and Shared Mobility as Threats Will Be Eliminated"

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