Episode 28 Transcript: The Deep End of Electric Cars

Molly Wood Voice-Over:

Welcome to Everybody in the Pool, the podcast for the climate economy. We dive deep into the climate crisis and come up with solutions. I'm Molly Wood.

This week … we're talking about the transition to electric cars. HOLD IT … as much as I am car-obsessed, as my longtime listeners will know … this is not about me or you or your friend down the street looking for a new EV … that's some one-at-a-time rinky-dink business ain't nobody got time for that business …

Although see me after class because I would still be HAPPY to talk EVs with you if you're in the market …

Today I want to talk about fleets … taxi cabs … company cars … delivery vehicles … government cars. What does it take to get THOSE … to stop burning fossil fuels … and be all-electric instead?

That's what today's guest is working on …

Josh Green:

my name is josh green. I'm the founder and ceo of a company called inspiration mobility. We are the world's first electrification accelerator. And what that means in practice is, uh, we have set up a platform to help companies and organizations decarbonize corporate transportation by adopting electric vehicles.

And we provide financing and charging and other solutions To streamline that process for them and allow them to go electric as quickly as possible.

Molly Wood:

So give us a sense. I think at first who these companies are. I think people don't necessarily realize how many cars out there, how many companies out there are managing fleets of some sort.

Josh Green:

Yeah. So, um, great question. Uh, Let me start by saying, uh, transportation. Ground transportation, the United States accounts for approximately 30 percent of our, uh, overall national greenhouse gas emissions.

And so it's a very large opportunity and, and, and of those emissions, uh, a significant percentage, majority of them come from commercial fleet vehicles. And you can't really find perfect estimates for, for how many vehicles there are in commercial fleets. If you think about, uh, fleets being everything from last mile delivery to corporate fleets, which may be pharmaceutical companies, IT support companies, telecom companies.

To, uh, taxi fleets, to ride share vehicles. But when you take it all together, estimates are that's four to five million vehicles in the United States.

Um, the reason really I started inspiration and I started looking into it in 2020. Was that, uh, the technology. So, so battery technology and electric vehicle technology. Had really arrived at that point and continues to every year get better in terms of the operating costs of an ICE vehicle, of an EV, excuse me, being superior and cheaper than an ICE vehicle, internal combustion engine vehicle.

And, uh, these vehicles are now, uh, purpose built. They will satisfy the demands of the operator. In terms of range, in terms of being able to carry payload. And so, that combination of factors, Uh, you know, led me to, to start the company, Because what I saw was, Despite all those factors being true, The, the decision makers, in most of these companies, Would need to have a complete separate set of skills and capabilities than they do have, To adopt electric vehicles en masse.

And so what that means is, um, There's a, there's a, there's a role in most companies, or in many companies I should say, that have a, that have significant transportation assets. There's a role called the fleet manager. And that person, uh, does exactly what, what you might expect. They, they are responsible for figuring out the transportation needs of the company, uh, procuring the right vehicles.

And whether they purchase them, or they lease them, or they get a loan. Uh, you know, all those are on the table, depending on the company. And they then, uh, work with the drivers. Who, who may be somebody that's a, uh, sales rep who takes the vehicle home at night. Or it may be a service business that has, uh, electricians or, or cable installers that are taking, you know, leaving the vehicle each night at a depot and come back, pick it up, go about their daily work.

Um, in every case, that fleet manager is responsible for two things, really, at the end of the day. Uh, enabling the employees to do their jobs. I'd say three things. Enabling the employees to do their jobs safely and at the lowest possible cost. And, um, and so when it comes to that job, they have developed, uh, you know, sophisticated systems and deep knowledge.

Many fleet managers have been fleet managers in the industry for many, many years, if not decades. And they've developed pattern recognition and skill sets that are all kind of accustomed to an ICE vehicle. Where you buy a vehicle, you throw the keys to the driver, and fueling it is somebody else's problem.

It's just, and frankly, it's not a problem, because everybody knows how to pull into a gas station. When you talk about adopting electric vehicles, there's a whole new set of challenges to face, and a whole new set of expertise needed. Okay. Uh, which vehicle can, can, can satisfy this particular job in terms of the range and really climate adjusted range where, you know, in, in the location in which it's going to be used.

Um, how do I charge that vehicle?

Molly Wood:

I should have you clarify there. Meaning if you have a bunch of fleet of EVs in cold weather, for example, your range is going to be reduced and you sort of have to plan for that. Or in hot weather. Exactly. Yeah.

Josh Green:

To clarify like, um, In fact, we, because we now have a lot of data on a lot of EVs, we found that certain EVs, their energy usage is actually much higher in summer, in a, in, in certain parts of the east coast, east coast, humid summer because of the air conditioning load than in, in winter interest.

And so the interesting, interesting the range degradation in, again, certain EVs in certain locations. Is, is higher in summer. And so, um, so yeah, what I meant by climate adjusted range is exactly that. A given vehicle going the same mileage will perform differently in Minneapolis than it will in Austin, Texas.

And so, um, part of the, part of the special sauce is figuring out which vehicle and which location. But then they've got to know, in addition to that, they've got to figure out where am I going to charge this? How often does it need to be charged? And, and what's that going to cost me? And relying on public charging for a commercial fleet is usually the option of last resort.

It's not, it's really not what they want to do because it's, you know, tends to be unreliable. You don't know if a charger is going to be available when you get there. Um, the prices are high, much higher than they would be if you kind of set up your own charging. Um, so you're asking a fleet manager to suddenly become an energy expert.

Right. And I think that's a tall order. And, and, and so what I realized back in 2020. When I started looking at this was that to successfully electrify commercial transportation at scale requires this integration of disciplines and expertise from, from fleet management to vehicle finance to energy markets and project development and project construction.

And those things don't normally sit under one roof, nor do those people, frankly, normally even communicate, right? I mean, they're just, they're different silos.

Molly Wood:

And then on top of that, like, just to sort of even complexify it slightly further, on top of that, you have to be up on a lot of brand new car brands, for example, you know, new types of vehicles that didn't even exist before.

I mean, I don't have a fleet and I'm already kind of daunted.

Josh Green:

Yeah, I know, exactly. No, and you're not alone. This is, this is exactly The issue because, um, you know, the traditional automotive sector, uh, is always evolving, of course, but it evolves slowly, right? People, the new Camry is not that much different than the old Camry.

Um, when you're talking about electric vehicles, the rate of change right now and the pace of innovation and the pace of introduction of new models, uh, and new, frankly, new, new automakers, um, not to mention charging hardware makers, charging management software makers. Uh, it, it, it is a constantly evolving landscape and, and it's changing very quickly.

And so to ask any, any, uh, non-expert, to get up to speed and then stay up to speed on an ongoing basis, uh, from, you know, on, on all of the different changes and, and, and know which vehicle, which charger, which, uh, incentive, you know, and the incentive landscape is changing quickly, right. Applies best to a given application that that's a tall order.

And so we set out to build that team of experts from from each part of it. Uh, and so I like to call us the motley crew of fleet electrification. You know, we are a strange mix of people like myself that come out of clean energy and project development and infrastructure, uh, combined with people that come out of fleet management, uh, you know, vehicle finance and vehicle leasing.

Uh, car rental and asset management. It's, it, it is a, it is a strange mix, but you need all those ingredients, uh, in the stew to successfully electrify, uh, commercial fleets at scale.

Molly Wood:

Right. And so it sounds like at its core, what you provide is, is kind of effectively a consulting product. It's a roadmap?

Josh Green:

we are certainly, uh, consulting in some ways and advising our customers and potential customers all the time to help them better chart their path to, uh, our goal, which is 100 percent electrification.

Right. But no, we are not a consulting firm. We're actually Absolutely. Uh, an asset owner and a, and a provider of a turnkey solution, we're, we're the implementer.

Molly Wood:

Ah, okay.

Josh Green:

So what that means is we go to business, um, really with two different business lines. One is, uh, what is called a, a fleet management company and frankly, um, we, we're a different type of fleet management company, we're, we're, we are, uh, the world's first EV only fleet management company.

And, and we call that an EFMC as opposed to a FMC, which is, which is the FMC is the, the acronym for fleet management companies that has been, that has been used for a long time. And in that business, what we do is we work with those fleet managers and, and in some cases in smaller companies, it might really be with the CO, COO or the CEO to, uh, identify the right vehicle, procure the right vehicle, lease them.

So we buy, purchase and own the electric vehicle and lease it to the companies. And then we provide a, a whole raft of fleet management solutions around those vehicles to simplify their deployment. And that's everything from things that are new to the FMC industry. So, so charging solutions to make sure that they can be fueled reliably, safely, quickly.

Um, as well as, uh, what are, what one would think of as traditional fleet management solutions. So, um, things like managed maintenance on those vehicles. Uh, tolls and violations, tracking, uh, title and registration, you know, more traditional fleet services. So, so that's one business. And then we have a second business that, that actually will build, own, and operate, uh, high speed charging infrastructure.

That serves, uh, either, you know, a single fleet or in most cases, uh, it serves multiple fleets that need a high speed charging solution to, to satisfy their operational needs.

Molly Wood:

Gotcha. So. This is a good opportunity to clarify even further that even if you were just buying regular old ice vehicles, gas powered cars like you always had, it would still it is still complicated enough that companies don't do this in house.

They, for the most part, or exclusively, they, they work with these fleet management companies to get these cars. So you were like, we can come in and replace that company. With a better one.

Josh Green:

Yeah. Yeah. I mean, uh, for, for some subset of the fleets. Yeah. So, so, so perhaps it would be helpful for me to, um, segment the market a little bit.

Right. Um, so we work with companies as diverse as, uh, you know, fortune 500 companies where the vehicle is another tool for the employee, but it's not the core service or product. So think again of your cable company, your telecom company. Okay. Uh, a last mile delivery company, right? They have a core product, which is, which is internet service, for example.

The van, in that case, is nothing different to their, to their company than the computers they hand to their employees or the cell phones. It's a, it's a tool for the employee to conduct their job. And in that case, for most of those companies, yes, it is, it is, today they will work with a fleet management company, not, not all of them, but most of them, because, You know, they want to, there's no reason for them to own and manage those vehicles.

They have somebody else do that, just like they lease their copiers, and they lease their computers, and they lease everything else. Um, then there's a, then there are companies like, uh, taxi companies, and some, some, uh, freight and logistics companies, where the core product is transportation. And in that case, traditionally they have not worked with a fleet management company.

They might work with a bank to finance those vehicles. But the actual, uh, servicing of the vehicles and the management of the vehicles, uh, has been done by them, by them because actually they, you know, that is their core business. And now, even for those companies, I will say that when it comes to electric vehicles, many of those companies that traditionally might have owned and serviced their vehicles because they don't necessarily know or want to today take on that burden and perceived risk, they'll, they'll ask us.

To come in and lease them those vehicles and, and, and manage the, the fleet with, with managed services. So, so in that case, they are actually changing their behavior because ICE vehicles, sorry, EVs are new. And because, you know, electrification and, and electrification infrastructure is something they don't necessarily want to, uh, kind of own themselves.

Molly Wood Voice-Over:

Time for a quick break. When we come back … why Josh … who's a longtime clean energy guy … determined that THIS … was the most impactful way climate solution he wanted to work on … and the dirty little secret about why … it's not happening in other fleet management companies.

Welcome back to Everybody in the Pool. We're talking with Josh Green … CEO of Inspiration Mobility … about replacing THOUSANDS of cars on the road with EVs … all at once.

Molly Wood:

I want to go back to the origin story. You mentioned that you came from clean energy and kind of got interested in this. Give me give me a little more about your background. And you know, what was the moment that because that this could be seen as a bit of a departure? What was the moment that said this is really the opportunity for you?

Josh Green:

Yeah, well, actually, I would say it's it's not so much a departure, but an evolution. Um, in that I have, uh, Been in the clean and clean energy and climate industry since, uh, since really 2000. So, so going on on 25 years, um, and in that time, uh, I have been an investor in, in both, uh, energy projects.

So think about, you know, wind, wind farms and, and, uh, solar, both utility scale and, and what's known as CNI commercial industrial solar. So on, on building rooftops. Uh, I've been a venture capitalist in technology companies that are, that were attacking climate change and, um, and I've also been a venture backed entrepreneur before.

and I have the pattern recognition from seeing both wind that I started working with in the mid nineties and solar that I started working with in kind of the.

The, the early noughts, so like 2007, 8, 9, um, go from kind of geeky environmental science project to cheapest forms of energy in the world, right? These things went mainstream, uh, over, over, in some cases decades. But now, like, those are the two most deployed and cheapest forms of energy in, in, in the entire world.

Uh, I looked around, I kind of surveyed the landscape and Electrification transportation felt to me like the next big thing. And what I mean by that is that, you know, one, I was looking for, uh, a segment, an opportunity where we could drive large emission reductions very quickly.

So as we say in the climate world, where we could actually drive a climate wedge, uh, quickly. And, and two, where there was no

need for government subsidy, like the technology was mature enough. The product was ready and commercially available, and the economics stood on their own, like, like there was a, it was, the conversion was, was inevitable at the end of the day, because you simply had a better product.

And the more I looked around, the more I, I saw that electrification of transportation was, was at that tipping point. I saw that businesses if they took the time to run the numbers and and do the do the assessments on, on, on operating sufficiency. Would quickly see that electric vehicles were superior at that time in most light duty use cases, and it's expanding now into medium duty and heavy duty. Um, but that, that the barrier to adoption then became which vehicle, which charger, how do I charge them, where do I charge them, how much is it going to cost for me to charge them.

And, and, and it was that insight into, well, you know, if left to their own devices, that will take a decade for some people to kind of put together. They're going to need to hire new people, they're going to have to retrain people. Or we can provide an integrated solution that solves all those pieces for them and gives them as much or as little, frankly, of that as they need.

Molly Wood:

Right. And then to your earlier point, it's a one to many solution. Instead of like trying to enable consumers one at a time to replace cars, it's like, hey, let's get 20 to 1, 000 cars switched all at once.

Josh Green:

That's right. Some of these commercial fleets, I mean, we work with, today we work with commercial fleets that range in size, probably the smallest fleet we work with has a few hundred vehicles.

And the largest has 50, 000 on road vehicles in the U. S. So, um, you can make change happen pretty quickly. Uh, you know, it's not, it's not easy. But, like you're saying, it's a one to many approach.

Molly Wood:

What, um, why aren't existing fleet management companies doing this for the businesses who have done the math and realize this is a better solution?

Like, what is your risk of competition?

Josh Green:

our customers have a range of alternatives, but, but certainly for the ones that work with fleet management companies, uh, our, yeah, what we need to do is convince them that, that their existing provider. If they're serious about going electric, their existing FMC is probably the wrong choice. And, and, that's because fleet management companies, First off, I'll say that fleet management companies are not a well known industry to most, probably most of your listeners.

Um, it is a, an industry that's very large, and, and, uh, you know, performs very well, uh, economically, and has great returns, but it is, I would say not mainstream.

But what you see pretty quickly when you start looking into fleet management companies is that these are massive entities that have been around for decades, in some cases going on a century. but most importantly, from an electrification perspective, the fleet management companies to have been built up and their business models optimized around the ice vehicle, the internal combustion engine.

So everything from how they finance those vehicles. To how they, uh, they, they, uh, dispose of those vehicles to the services they provide around those vehicles. And frankly, their revenue models to like how they make money has been built around the internal combustion engine. So, so, um, the truth of the matter is that, that when you look at the numbers and you understand how those fleet management companies have built to be profitable and deliver results to investors.

50 60 percent of their revenues in, in the vast majority of cases. come from the provision of services beyond the actual lease of the vehicle. And most of those services are tied to the internal combustion engine. So think about oil changes, think about, uh, fuel refilling like gas and diesel, think about spark plugs, think about, you know, all the things that the internal combustion engine requires to, to fulfill its duties for 100, 000 miles, 200, 000 miles.

And by the way, 200, 000 miles is pretty good on a nice, on a nice vehicle. Um, these businesses have been built up to, to earn money on every, on every oil change, right? To earn money every time it pulls into a gas station. Right. Like car dealers, you know, everybody thinks car dealers make money on cars, but they make money on maintenance on those.

Molly Wood:

Right. Because you, for people who don't have an EV, if you're listening out there, I don't think you understand. Like, you don't take that in for maintenance. There is nothing to break. It's a battery on wheels. Literally, it's, it is amazing. I've now driven an EV for two years. And it, it's amazing to me that I've never, you know, I just whizzed by the gas station.

I've never gone to a gas station. I've never had to take it in once.

Josh Green:

Uh, most updates occur over the air. Um, so, so yeah, I think, so, so the, the dirty little secret is that traditional FMCs have a disincentive. Right. All the way down to the salesperson usually to, uh, promote and deliver an EV to a customer as opposed to another ICE vehicle.

Molly Wood:

There's no service contract attached to it.

Josh Green:

Yeah, there's less. There's certainly less services. And, and, you know, the salesperson most likely in these big organizations has never driven an EV or if they have, you know, it's been once, but they aren't experts in EVs. They certainly aren't experts in electrification and the energy side of it.

Um, and so. It's not that they aren't serving, uh, customers with electric vehicles, they are, and, and certainly if you go to their websites or hear them talk, they, they talk a, they talk a great game about everything they do with, with electric vehicles, and I think customers, you know, if the customer demands an electric vehicle, they will serve up an electric vehicle, but, but for those customers that actually, those companies and organizations that actually want to make significant progress on electrification and realize that electric transportation is cheaper, safer, more reliable, better driver experience.

Um, you know, we like to say those your traditional FMC will go as slowly as it possibly can. It will, it will do what it needs to, to keep the customer, but it will go as slowly as it can. Whereas we are from day one pushing to try and say, how do we get to a hundred percent electrification as quickly as possible?

Right. So it's just a very different starting point and approach.

Molly Wood:

Now, I know you're not planning to make 40 or 50 percent less money than they are. So, so how, how do you make up the difference, uh, in all those oil changes and gas fill up?

Josh Green:

Yeah. No, that's a really good question. And, and, uh, I'm sure some of my competitors would love to know that answer down to a very detailed level, but so, so I'm, I'm not going to give you the exact, the exact specifics, but, but let me just say that, um, I am confident in saying that we make more margin and profit on our vehicle leasing side than they do.

I'm confident in saying that, uh, yeah. There's a whole host of other EV specific services that we can and do charge for, that I think many of which I think are, you know, legacy FMCs haven't yet even thought about, um, but are of relevance to and importance to the fleet manager, um, I would, I would also say what we do on charging, we have a whole, a whole set of charging solutions that I've never, to be honest, I've never, um Compared what we can make on a charging solution versus a fuel card or a, or an oil change because we've never done any of those, but, um, but, but I can say that we have many other ways to help the customer, including some that aren't frankly related directly to the vehicle, uh, in terms of how they can decarbonize, uh, their, their transportation and operations and, uh, achieve financial savings and, and, Uh, you know, our, our economic model has very positive results.

Molly Wood:

I do. And I want to ask you about the charging infrastructure side of the business. How, how hard is that? I mean, we keep, you know, the, the rollout of charging infrastructure nationally has already been, I think, slower than most people want. How challenging is that kind of side of the house?

Josh Green:

Yeah, it's interesting.

I, I, I've, uh, I've, I've given a few speeches about this recently at conferences. Um, at the risk of being controversial, I will say that for, uh, the average fleet in the United States and certainly for the big, you know, the larger, more diverse fleets, this, this, This notion of charging being me, being the limiting factor and, and, and making electrification is impossible is frankly a bit of a red herring.

Um, I think that, uh, in the press and, uh, you know, kind of in, in mainstream, uh, discussions, a lot of people focus on the lack of public charging infrastructure in the United States.

Um, but what I would say is that at the commercial level, most fleets have many vehicles that could be electrified today quite easily based on the charging, the best charging solution for those vehicles. Um, and, and in fact, we, we call this phenomena, we've, we've kind of coined a, a phrase for this phenomena, we call it the electrification action gap, because, because, and here's what that means, Molly, most fleets, when you look at them, let, let's, let's start with corporate fleets, the, the large corporate fleets, many of them have sustainability goals, uh, in fact, you know, 75 percent of the 200 largest U.

S. fleet operators have actually committed to decarbonization targets for their fleets. So, so, so they've, they've made commitments. And when you talk to them and about where they are in, in meeting those commitments, most of them have done a few EV pilots. Maybe they've got 100 or 50 EVs in their fleet, but that's out of a fleet of 2, 500 or 10, 000 vehicles.

And, and we say to them, well, why, why aren't more of them electric? And they say, well, you know. Charging's complex, or we couldn't get our hands on the vehicle, or, uh, we couldn't justify it financially, and, and, and so we say, all right, let us come in there, and, and, and, uh, if you'll, if you'll give us the data, we will, for free, perform what we call an EV Opportunity Assessment, and we will look at every single vehicle on a case by case basis, where it lives, what's its duty cycle on a daily basis, uh, You know, what, what, what is the range required and decide with data, which vehicles could be electric today.

And that's really based on a few different factors. One, there's an available electric, there is an available EV substitute that's fit for purpose, meets the range requirements. Uh, you know, and you can get your hands on. Two, that the charging is easy to set up. So charging can be really complex and take years to set up in certain cases.

This screens out for that and says which charging can be set up in a in a month in two months Um, and where do the economics pencil? So so let's let's run the economics and say when you look at this higher upfront cost potentially, but the incentives available The uh fuel maintenance savings which usually run 50 to 60 percent compared to a nice vehicle Uh, when you look at all those factors which vehicles in your fleet should be electric today and which are?

And that is the electrification action gap. And almost universally, we see a huge number of vehicles that are just sitting there. And, and that company or organization is literally losing money every single day. They're driving an ICE vehicle on that route. And so, um, that's, that is what we do when we say charging is a limiter.

And I'll come back to my charging is a bit of red herring. Charging is a limiter in certain cases. There are heavier duty vehicles, there are certain longer mileage, uh, applications. There are, uh, depots where it's a leased property and the landlord won't let you install charging. There are depots where there's not enough power on the, on the utility grid in that location to allow you to install charging.

There's all sorts of barriers. Right. But, the point is, there are also easy wins that companies are usually not taking. And our role is to come in, identify the easy wins, electrify those vehicles that are, that are ready and in the money today and start planning for, you know, taking those steps so that you're, you are gradually installing the charging infrastructure or exploring offsite options that get you to, okay, well, this batch of vehicles will be electrified, you know, in a year we're going to wait, or, or it may be vehicle related.

It may be, oh, there's, you know, the right, Heavy duty or medium duty vehicle for this application with the right mix of cost and, and, and range is coming out in late 24. Okay, well, we'll wait on that, but it is a vehicle by vehicle, uh, location by location assessment, which then, uh, delivers, uh, what we call our road to 100, a fleet electrification plan that starts with where you are today and gets you to 100 percent electrification over time.

And I just think this focus on charging sometimes allows people to, uh, you know, on To, to, to wait for the silver bullet. It's like, let me wait for charging to be solved and then I'll electrify. Right. And, uh, we like to say, you know, don't let the perfect be the enemy of the good. Start with where, what, what can be electric today.

Start, start achieving those savings and, uh, delighting drivers and, and let us plan for the future.

Molly Wood:

Josh Green is the CEO of Inspiration Mobility. Thank you so much for the time today.

Josh Green:

Thank you, Molly. Really enjoyed speaking with you.

Molly Wood Voice-Over:

And that's it for this episode of Everybody in the Pool … yet another reminder that so often … the biggest barrier to doing things differently is the way we've always done things. Fleet management companies aren't EVIL for wanting to continue to make money … charging for service contracts on gas-powered cars … it's just … how they built their businesses when that's all we had. But now … we have something else … that's better … and making impactful climate change is all about embracing … the actual change.

Thank you so much for listening.

Email me your thoughts and suggestions to in at everybody in the pool dot com and find all the latest episodes and more at everybody in the pool dot com, the website. And if you want to become a subscriber and get an ad free version of the show, hit the link in the description in your podcast app of choice.

Thank you to those of you who already have. See you next week.