Listen: So you want to buy an EV: Moving past adoption barriers

View Full Transcript

Taylor Kuykendall:
Hello and welcome to Energy Evolution, the podcast bringing you insights and analysis on the energy sector. I'm Taylor Kuykendall and I'm joined by our correspondent, Camellia Moors.

Camellia Moors:
Hey, Taylor.

Taylor Kuykendall:
Hey, how are you doing?

Camellia Moors:
Pretty well. How about yourself?

Taylor Kuykendall:
I'm doing great. Hey, today we're looking at another piece of electric vehicle adoption, right? This time it's focused on vehicle buyers. Camellia, you did an interview on this. Can you just tell me some of the challenges that EV buyers are running up against when they go out here and try to shop for a new vehicle?

Camellia Moors:
Yeah, so I recently spoke with Bryan Birsic and he's the CEO of AES' Motor. For anyone who might not know The AES Corporation is basically a major utility and power company, and then Motor has Series A investments from both AES and Mitsubishi Corporation. So Motor's focus includes providing services to EV buyers via a platform that aims to clear up some of the major questions around EV adoption like for example, tax credit eligibility and access to charging stations. Brian spoke with me about how Motor works, including how it collaborates with utilities, as well as what it needs to be done on a broad scale to ramp up EV adoption.

Taylor Kuykendall:
Hey, that all sounds really interesting. Let's just jump right into the interview.

Camellia Moors:
Thank you so much for joining us. To sort of kick things off, could you start by introducing yourself and explaining what Motor does?

Bryan Birsic:
Yeah, absolutely. My name's Bryan Birsic and I'm the CEO of Motor. Joined after predominantly starting a solar financing company. This is my fifth startup, but that's the most successful one. So I've been in clean tech for a bit now, and what Motor does is help electric utilities both accelerate EV adoption and also take advantage of EVs as grid assets, which we're kind of understanding as an industry as we roll out some of these interesting programs.

Camellia Moors:
So on that utility note, I mean what role do these utilities play in your strategy and what does collaboration with them actually look like?

Bryan Birsic:
Yeah, 100%. They're our primary customer. So we were born out of a company called AES, S&P 500 company that is the electric utility in Greater Indianapolis and other parts of Indiana and as well as kind of the Dayton Valley in Ohio. So the company is born with kind of a utility DNA, and the thing about the transportation electrification trend that I think is maybe not spoken about as much in the broader financial markets and markets more broadly is the enormous increase in electricity demand that comes along with electrifying a whole bunch of things that used to run on hydrocarbons. So that is number one, and in my mind, the predominant reason why utilities have a role to play in EV adoption is when you go from paying the gas station whatever you pay them monthly to even if it's half of that, that's brand new revenue for the utility, right?
That's an exciting trend for them, and I think estimates have something like 25% increase overall electricity demand just based on the electrification of transport over the next several decades. Number two, and maybe a little less obvious to your person who their engagement with the electricity utility is turning their lights on and off and it works and paying their bill is that solar and wind, which are obviously... and I think very excitingly, a bigger and bigger part of the grid, these are intermittent sources, which is to say they don't produce 24/7 and having the ability to right now predominantly with EVs turn off people's chargers basically en masse when the grid is stretched, hot day in August, everyone's running their AC, they can turn off chargers. Those are called managed charging programs, and we do get paid by utilities to bring people to those programs.
And over time, there are people who think that not only will it be turning off that demand from electric vehicles during tough grid situations, more reliability, the grid might go down, reliability is at stake and that's a big deal. Our society runs on electricity. The other one is sending power back to the grid referred to in the industry as V2G, vehicle to grid. That is some people think it's going to come to pass, others don't, but there's no doubt that having thousands and tens of thousands and hundreds of thousands of batteries on wheels rolling around your grid is something that you sort of, these are thinking seriously about taking advantage of.

Camellia Moors:
Great. I'm also wondering if you could give a little bit of color, if you will, on how Motor's platform works and what the main issues in EV adoption that you guys are really trying to solve.

Bryan Birsic:
Yeah, absolutely. So our predominant product is a 24/7 text us, call us, reach out in any possible way. We try to be on every platform, any EV related issues in the 90 days after the purchase of your vehicle. So that is the product that we are most in market with. We do have a pre-purchase product. We're helping people navigate EV selection and whether an EV is right for them from a data-driven perspective, giving them the evidence, letting them decide, which we think for some folks doesn't make sense, let's be honest. But for a lot of folks it makes a lot of sense particularly financially when you look at the whole life of the car. But yeah, we provide again, a 247 reach out at any time if it's EV related in the first 90 days after purchase. That's most of what we do. And every survey, it's no mystery to anyone in the industry, every survey you read really comes down to the three big issues with EV adoption or big concerns folks have.
Number one is price. No surprise, that's upfront price. Again, lifetime price is often pretty compelling, but we know not every American can put up an extra bunch of thousands at purchase to save money over 10 years. So price is a real concern. And what we do there in particular is help people make sure they're finding absolutely every single dollar that they can get, whether it's local through the utility, signing up for one of these managed charging programs, state or federal. So there are a bunch of qualifications. It's hard for folks to navigate that. So that's one thing we do is make sure people understand every dollar they're going to get back if they do go with an EV and make an informed decision. Number two is charging.
Where am I going to charge? Can I put a charger in my home? Is there a charger at my workplace? If I live in an apartment building, I don't have as much control, so I'm going to have to figure out public charging. Are there free chargers my municipality or state provides? That is often the case. Folks don't know that. So we'll put together whether it's road trip plans going up to their favorite lake house with their boat and figuring out what it means to drag 3000 pounds behind you, or it's finding the good charging infrastructure nearby because a home charger installation is impossible or hand holding them through the home charger installation with an electrician. That's what we're doing on that front.
And then the last one is range. And to be honest with you, this is the one that most comes down to the battery chemists, right? We can't do a lot about what the actual range is. I do think that a lot of Americans don't quite understand how far 350 miles is. It's not the way that we talk about drives. It's not what you're used to when you're filling up a tank of gas. So we put together, again, road trip plans to help people understand if they're driving to see family many, many hours away, here are the compatible chargers. So those are the big three issues, and that's not us. That's again, every survey you can find, it's price, range, and charging.

Camellia Moors:
It does remind me, the last time I took a road trip in a rental car, I was mapping out charging stations on Google Maps in advance based in the range.

Bryan Birsic:
Yes, Google is getting better at that as well, which is helpful.

Camellia Moors:
It was a success. We didn't get stranded anywhere, so-

Bryan Birsic:
There you go.

Camellia Moors:
It worked out in my mind. I'm curious as well, I mean, you talk about this as sort of being a EV adoption assistance platform. Are there other platforms out there and how does this compare to those?

Bryan Birsic:
Sure. OEMs are certainly... which is to say car manufacturers are certainly incentivized and have always done dealer training and vehicle adoption work. This is different, right? Finding a local electrician to do a home charger installation, understanding how to quote that to someone who's thinking about an EV before they've done the work, so they have an informed price of all in what is this going to cost to go electric. That's a new challenge for them. And some partner with folks like Qmerit who we were just at a conference with two weeks ago, but some of them aren't great at it, and dealerships do have their choice about how much to embrace what the car manufacturer provides. So what we've seen is that it's really mixed as to at the dealership level is if you walk in and ask about an EV, what you're going to hear, how accurate the information is, how well they describe the various incentives.
The local programs, they sometimes don't know about them. So they're used to selling gas powered cars right? This has not been a part of their purview. They have not had utility related programs when driving a gas-powered car. So they're adopting, I think, quickly as they can, but for the most part, we are supplementing or in some cases really just providing outright the kinds of services the car manufacturers have provided to dealerships for a long time. And this going electric kind of evolution provides just a totally unique sales experience, support experience, follow-up experience, and we're excited to come in and be paid by the utility to provide that service to dealerships at a price that is lower than it would be obviously if we weren't being paid by the utility as well.

Camellia Moors:
Got it. I mean, you mentioned those three barriers that you're sort of confronting on the consumer side with giving extra information about the pricing and the like. But on a broader scale, I'm wondering what you think are the most pressing things that need to be done, whether that's from a policy side of things or making the cars cheaper or something else to actually get or encourage wider EV adoption.

Bryan Birsic:
Sure. One thing that doesn't seem to happen in the market, but we think is interesting is something that my former portfolio company, Sealed, is doing an energy efficiency with buildings, which is if there's ten-year savings, but there's upfront costs, that kind of begs for financing. If you're used to paying $100 a week at the gas station or whatever you pay and now you're going to pay $40, it might actually be better for you if you pay $60 for electricity and 20 because you got 10,000 off at the purchase price. And I don't know that that's actually the math, and I apologize to the audience for not doing it in advance, but there's some opportunity to kind of play around with the cash flows and the timing of those cash flows. Again, if between the maintenance, which most folks have at about a third per mile and the electricity at the average cost of electricity, you're getting dollar a gallon gas basically is the equivalency.
Again, for folks, there are a lot of Americans that would love to put up an extra five or 10,000 and save more than that over 10 years. They just don't have the five to 10. And so that calls out to me as something that needs to be done. And we've looked at and we've talked to folks about and talked to credit unions about, but financials talk right? And paying extra money upfront is going to be a burden unless someone solves that.
So again, price normally is the number one thing that comes out in these surveys. I would say the other one, and the great news is that we're an enormous way there. And if you told someone three years ago, I think in the industry that we'd be this far along, they'd be shocked by it, but the fact that so many folks have picked up the supercharger standard, the NACS, North American Charging Standard, that Tesla put forward is a very, very big deal. That was a real pain point. We had folks regularly pulling up to charging infrastructure they couldn't use, and obviously it begs for a standard. It's obviously beneficial to have one, and it does look like just in the last 18 to 24 months, so many OEMs, again, car manufacturers have come over to NACS. We think that's going to be a real catalyst for the industry.

Vincent Valk:
If you're enjoying this Commodity Insights episode, we think you'll really enjoy our Chemical Week Podcast as well. Twice a month, the Chemical Week Podcast dives into important issues impacting the global chemical sector. I'm Vincent Valk, one of the hosts from Chemical Week and Commodity Insights, and we bring you incisive and thoughtful conversations with executives and industry experts about petrochemical markets, sustainability, innovation, and lots more. Subscribe on your favorite platform or visit chemweek.com/podcast.

Camellia Moors:
Interesting. So it sounds like there's cause for optimism for sure, but on the flip side of things, I'm also wondering, I mean the EV credits when we're talking about pricing are probably pretty important for a lot of people considering purchasing these EVs or new vehicles reduce the initial upfront cost. There is some talk in Congress of rolling that back. Election outcomes are on everybody's mind I think in one way or another. I'm wondering if that were to happen, if that is a sort of cause for concern in your mind, for the potential for the uptake of EVs in the future.

Bryan Birsic:
Yeah, of course right? We saw the changes on Jan 1 in terms of what vehicles qualified, and you saw a media change in consumer behavior. Again, money talks. Appropriate for an S&P podcast. That said, I do think that pulling back and thinking about things in a five to 10 year perspective for these emerging industries is helpful and you're going to pull forward or push back demand, and that has real impact, particularly for publicly traded companies, of course, that folks listening to this podcast might be interested in. But at the same time, this is an industry that gets doom and gloom articles written with regularity because instead of growing 70%, it grew 45%. That is your annual growth rate. This is last year in 2023. This is a growth rate that most industries would be ecstatic about. In fact, it's almost hard to wrap your fingers around as you're growing with that industry, the new makes and models and advances in battery technologies.
So I think the overall macro trend is solid. Would we see a slowdown with less incentives? Of course, right? Incentives work, but I do think that folks that are positioning themselves well in this market are going to benefit over five to 10 years. I will say that I'm also... we support plug-in hybrids. We find that plug-in hybrid drivers also want to get home charger installation, which is a big part of what we do as discussed, and we think that's a great, not even bridge technology necessarily. There are use cases and places that people live. We work in Vermont with Green Mountain Power that they need more than what an EV can provide in range at some times, and that's a relatively rare situation, but we're big fans of plug-in hybrids, so we love these trend lines long-term. Might you see a hiccup with political winds changing? Of course.

Camellia Moors:
Well, keeping on long-term ideas. I'm wondering what in your mind is the most exciting recent development in the EV world and what you're most looking forward to in the future?

Bryan Birsic:
Yeah, I think we're at a crossing the chasm moment to reference the book in which early adopters to EVs, the first 7%, which we hit, we exceeded last year for the first time, largely price-insensitive, largely self-motivated, we're willing to deal with the early hiccups of charging networks. They were enthusiasts. We're getting to people who are normal Americans, if you will, that the economics really talk, and the used car value talks and servicing needs to be close and convenient, not far away. So I think that the movement by OEMs to get cheap models out is a very, very big deal and very positive. We're starting to get to the point... we went from, again, this is an industry that a lot of industries would envy at the growth, but we had 250... I think we cracked a quarter of a million for the first time in I want to say 2019, and last year we cracked a million for the first time, 1.2 or so million EVs sold.
So incredible growth. But that also means the used car market has not really been a market, right? You lag two to three years back, there aren't that many cars available. We're starting to catch up to that, which is exciting for, again, people who can't spend 70,000 on a car. So I think the affordability side, to answer your question is what's most exciting, closely followed by charging infrastructure continuing to build out because that solves a lot of problems for folks that can't put a home charger in, which is a lot of people in this country.

Camellia Moors:
Well, this has been really great. Really appreciate you joining us.

Bryan Birsic:
Absolutely. Thanks for having me.

Camellia Moors:
All right, everyone. That's all for today, and thanks so much for tuning into this episode. I want to give a special shout out to our incredible podcast team members, including Taylor Kuykendall, Dan Testa, Camilla Naschert, Christopher Coats, Karen Willenbrecht, as well as our fantastic agency partner, the One Nine Nine. To stay up to date with our upcoming episodes, be sure to subscribe to Energy Evolution on your favorite platform. And if you have any ideas for future topics or speakers, we'd love to hear from you. Send us an email at energyevolution.s&pglobal.com. And if you liked what you heard today, please consider sharing our podcast with others or leaving a review on your preferred podcast platform. We can't wait to bring you more fascinating energy talks in the future. Until next time, take care and stay tuned for more from Energy Evolution.