Vehicle 2.0 Podcast with Scot Wingo: Electric Vehicle Analyst at EVAdoption, Loren McDonald
EP012 - Electric Vehicle Analyst at EVAdoption, Loren McDonald Episode 12 is an interview with Loren McDonald, Electric Vehicle Analyst at ; recorded on July 1st, 2019. Loren and Scot dive deep into the world of EVs, including such topics as: The growth of total EV market share in the U.S., . Exploring Loren’s . Breaking down batteries, as well as their 7-year cost trajectory. Emerging companies like and , who are pushing for EV usage in non-traditional segments. The , including where charging stations are growing and where they’re still needed. as they begin to phase out. Check out Loren’s work at , as well as his book ! If you enjoyed this episode, please write us a review on ! The four pillars of Vehicle 2.0 are electrification, connectivity, autonomy, and changing ownership models. In the Vehicle 2.0 Podcast, we will look at the future of the auto industry through guest expert interviews, deep dives into specific topics, news coverage, and hot takes with instant analysis on what the latest breaking news means for today and in time to come. This episode was produced and sound engineered by Jackson Balling and hosted by Scot Wingo. Transcript: Scot: [00:56] Welcome to the Vehicle 2.0 Podcast. This is episode 12 and it's being recorded July 1st, 2019. Welcome back Vehicle 2.0 listeners. Uh, we're recording this here in early July. Hopefully this has given you some content for your July 4th travels. Uh, in this episode we have a real exciting treat for you. We're excited to welcome on the show, Loren McDonald. He's the author of the book "Gas Station Zero", editor and contributor to EVAdoption.com contributor to Clean Technica and an all around EV expert. Welcome to the Vehicle 2.0 Podcast. Loren! Loren: [01:31] Great. Thanks for having me, Scott. Really excited about the conversation today. Scot: [01:35] Yeah, me too. We've, uh, I've, I've been a f a Twitter follower and, and read a lot of your content. Um, you know, I think what I've found as I've dug into, I come from the ecommerce world and as I've dug into this world, uh, there's, there's not many people that actually have original content. There's a lot of republishing of the same kind of stuff. And, uh, what I love about your content is, you know, very originally sourced and in a lot of unique thinking there. Before we dig into that though, um, let's talk about your career path. What, what got you into this automotive motive space and writing on this topic? Loren: [02:10] Yeah. So I, I'm, you know, complete outsider, if you will, to the, the automotive and in EV world. I started my career in marketing and PR way, way back in 1984. So 35 years into kind of my, my marketing consulting career have been, uh, you know, CML marketing executive consultant at, uh, a variety of companies over the years. Mostly sort of BDB professional services. But the last a sort of 15, 20 years in the marketing technology space, um, and really kind of the last 15 years spend functioning as a, as a marketing evangelists are flying around the world. Uh, speaking at conferences, meeting with clients, doing a lot of writing and research and stuff. And ultimately that's, you know, kind of the transition to what I'm, I'm doing in the electric vehicle space. Uh, about five years ago I started a blog where I was writing about all things green. Loren: [03:04] The use the, the name Loren Green. If, uh, you, uh, older people on this, they'll get the, uh, the connection there with Lauren Green, the old a actor from the high chaparral. But, uh, what I was doing was writing about a bit of everything and sort of the green space, everything from how to reduce, uh, you know, packaging and, uh, increase recycling and reduce use of water. This was back in the days of, uh, the drought in California, solar power and electric vehicles. And what I quickly found was as I couldn't sort of be an expert on all of those topics and I decided, uh, to sort of pick electric vehicles and that was the one that I was sort of most intrigued by about how are we going to sort of solve this problem, right? Well, what is going to drive people to actually want to, uh, uh, you know, transition to electric vehicles. Loren: [03:58] So that sort of when I started about three years ago, uh, the Evie adoption site and as you mentioned also sort of riding for clean, technical, etc. And so really have, you know, taken my career as sort of a marketer and consultant and strategist and somebody focused on research and data and have tried to focus, uh, on that aspect of them solving the problem, using data of when, you know, when are consumers going to, uh, you know, adopt, uh, electric vehicles, uh, in a, in a really significant way. Well, and is this your first full time gig now or are kind of still a hobby? Wish it was Scott. I'm working towards that. Um, but, uh, it, it is something I do is sort of, uh, on the side, if you will. So a lot of, a lot, a lot of weekends, uh, uh, and, and, and evenings and things like that. Loren: [04:55] But, uh, you know, instead of, uh, instead of being out working in the yard or, or riding a bicycle or spending time with my wife on weekends, I'm uh, you know, chained to my laptop, writing articles and doing great research. But I have to ask, uh, do you drive an Evie? I do. At the moment we actually have two Tesla model essence. Uh, so, uh, got our first one, two and a half years ago and actually just picked up or actually it was delivered to our house. Uh, the second one last, last Sunday. And I've gone from the low end model s which had, uh, about, uh, 200 and a little under 210 miles of range to one that now is 335 miles of range. And so I'm really excited to, uh, put that to the test on road trips when we take our daughter back to us college in southern California later this summer. So a show, we'll, we'll, we'll dive into these and road trips a little bit later in this conversation. Yeah. Cool. Yeah, I'm a, Scot: [05:58] I had a model s or a pretty early on in 2012 and then a side graded to a model three, so, so also live in that as la UV lifestyle with you. Loren: [06:07] Nice, Nice. Scot: [06:09] Cool. We're here on the podcast. We have a framework for the Vehicle 2.0 framework where we talk about the four big changes coming to the auto industry. We talk about connected car changing ownership models, uh, autonomy, and then of course, uh, evs. So we want to spend the bulk of our time with you talking about evs. I thought it'd be good to kind of, you know, talk about kind of from a timeframe perspective, uh, where you see things today in the u s and then we can kind of expand from there. Loren: [06:36] Yeah. So we're, we're really quite, quite early for any, uh, sort of, uh, techie geeks. I, I refer to this, we're probably in the palm trio phase. I don't know. Scott, did you ever own a palm trio? Uh, I did. Yes, you did. Yes. And you'd know what I'm talking about, right? We're, we're in that phase of, of where primarily sort of early adopters and I, and I use technology and, and I'm a big fan of, of um, uh, the sort of that w what's commonly known as the technology adoption curve. This idea of how consumers, basically, with any sort of new technology product, they start off kind of the innovators, uh, you know, really, uh, only, uh, for geeks people that are willing, uh, and can afford to sort of pay more for products they want to, uh, own or drive, whatever the latest and greatest thing is. Loren: [07:29] And then it Kinda goes up ultimately into, um, what's called sort of the, you know, early majority, late majority then, then, then laggards. And in, in most markets in the u s and around the world, we're still in that sort of innovator phase of, you know, kind of under two and a half percent. Um, it obviously varies dramatically by market, but in, in the u s today across the u s worried about 2%, meaning, uh, two out of every 100 a new vehicles that are purchased across the US today are electric vehicles. And when I say electric, um, I'm including in that both what we call PHEV plug in hybrids. Those are things like the, the Chevrolet volts and the um, the Ford fusion energy where it has a small battery pack and you can uh, uh, drive on a what's typically anywhere from sort of 20 to have a little under 50 miles range on electric. Loren: [08:30] And then gas engine kicks, kicks in, but you can then recharge that battery, um, by, by plugging it in at home or the workplace or whatever. And then a, what we refer to as be evs, battery electric vehicles. And those are things as you and I talked about, the Tesla model s uh, and three, the Chevrolet Bolt, uh, many, many other factors that, uh, only have electric motors and battery packs is so fully electric. And, um, so again, where we are today in the u s is, uh, is about 2%, but then when you break the country down, it is sort of, we have a fascinating picture, Scott, in that it varies sort of dramatically by sort of state and market. So California finished 2018 at just under 8%, meaning, uh, you know, that almost, and we should hit and we actually hit the 10% in the last few months of, of 2010, we'll probably finish 2019 little under 10%. Loren: [09:31] But in essence, in California, across the entire state, one out of 10 of every new vehicles purchased, uh, is an electric car. And, uh, and most of them, in fact, about 40% of them are, are the Tesla model three these days. But then if you go to a state such as, you know, Oklahoma or Louisiana or whatever it is, it's like 0.2, 2%. And so literally what we have is we have this sort of huge dichotomy and chasm in the United States where you have California, where people are literally buying evs at a rate of 40 to 50 times that of people in, in sort of southern states. And so it's, it's sort of really fascinating. And then if you break that down even further in a, in a city like Palo Alto, which is obviously a sort of a wealthy higher income, high tech community, we're approaching 50%, literally one out of every two cars being purchased there are, are electric. Um, and now where I live in, in the bay area, in the suburbs, we're at about 15%, 20%. And so, you know, that's a long answer to your question Scott, but, but fundamentally, no, across the u s we are still really, really early. But if you look at sort of individual markets, we are sort of well down in the path of adoption. Scot: [10:53] Yeah. Very cool. Um, and then I've seen, I think I've seen Tesla or I can't remember who talked about it, but there's a certain definition of a car where, where they're one of the top sellers where, you know, I think they put the model three into a, uh, you know, a price range, and then it's like a four door, and then in that category of they're outselling the BMWs and Mercedes, the Honda's and the, you know, so another interesting slice where you're starting to see, you know, the, a fair amount of adoption within a pretty narrow definition. Loren: [11:22] Yeah. If you look at sort of the, that sort of luxury sedan market, if you will. So the, the, uh, as you mentioned, sort of, you know, the, the, the BMW three series, Audi a fours, uh, the Mercedes c class, uh, the, the, uh, Lexis, yes. I believes in that market and stuff. The Tesla model three is actually crushing it, right. In sort of that, uh, sort of, you know, 30 to 40, you know, 30 to thousand dollars, depending on what configuration you get of those different vehicles. The, you know, the model three is, uh, uh, is, is, you know, outselling all of those cars by a pretty significant way. And so what's, what's interesting about that, Scott, is that, well, we're seeing the most of the u s and Japanese automakers still sort of laggards on, on launching new models. The German car makers get this right because they're the ones that are actually seeing sort of direct competition from Tesla. I actually start to eat it into either end of the market share and I know we're going to sort of dive into that a little bit more, uh, in a bit. But that's sort of a, a fascinating sort of side effect of, of Tesla success. Scot: [12:33] Cool. And then, um, I know you've done a lot of really interesting research kind of putting on your, your consumer marketing hat about, you know, what I guess what's, what's driving adoption in, in areas like California and Palo Alto, and then, you know, what's slowing down adoption, what are, what are some of the consumer insights you've drawn from that? Loren: [12:53] Yeah. So, you know, fundamentally, again, what I came up with this framework, uh, about three years ago that I called Karma c a r m a the sort of as a way to kind of think about, um, what are the different factors that that will ultimately drive mass adoption of electric vehicles and, and you know, sort of the, the letter Stanford charging range and speed, affordability, range model availability and awareness and understanding and well, fundamentally that's why the Tesla is sort of, is, is doing so well and that it's, it's pretty much solved most all of these problems, right? So first and foremost, as we all know, consumers that, that are thinking about, uh, potentially. And in Evie you're considering it or just learning about it, there's sort of first, you know, common concern is his range and what we call range anxiety, right? Mo, most cars available in the u s today, especially with sort of the, you know, SUV as larger SUV have north of 400 miles of, of a range and the gas car right and sort of varies anywhere from about three 50 to almost sort of 500. Loren: [14:08] And so consumers have been trained that their car should go, you know, roughly three 50 to 400 miles on a, on a tank of gas. And so their expectation is, is that an electric car should sort of match that. Right. And so know that's where sort of, you know, again, Tesla has done really well in sort of reaching that sort of higher income market that has been able to afford their luxury cars with over 300 miles of range or in some cases a little bit under that. But, uh, and they're going to come out, uh, the, the rumor is by the end of this year with a model s that we'll actually have 400 miles of range. So they're sort of getting to that point of you, at least from a range perspective, consumers who can afford the electric cars will, will not be able to sort of use sort of the, the lack of range of an issue, but fundamentally w you know, range is sort of sort of that, that sort of first starting point. Loren: [15:06] In other words, if you're, if you're going into a car dealer and considering a car, that is sort of the sort of the first step that, that people have to get over. The second one, uh, is, is, uh, I think, um, you know, just sort of affordability, right? And again, the, the challenge today with, uh, sort of both sort of supply and demand of electric vehicles is, is because of the, the cost of the battery packs is still pretty significant and it tends to be about a 20 to 30% of the cost of the vehicle. And so the, the battery pack prices are coming down significantly, but there's still, you know, too high as a, as a percentage of the vehicle. And so when you're looking at comparable vehicles, so if you're looking at a particular car model that has both the gas, uh, uh, you know, motor and an electric motor, and there are several on on the market like that where you can actually get different sort of powertrains, it's often anywhere between five to $20,000 difference. Loren: [16:10] Right. And so in a case like that, it's sort of very apparent to someone that, you know, electric cars sort of cost significantly more. So we've got it, you know, yeah. Get the cost of them down. That's sort of the second, second big thing. And again, we're gonna, we're gonna get there probably in about seven years. That's what McKinsey and, and Bloomberg and many other, uh, research organizations have sort of predicting as that, that sort of cost comparison, that cost parity will come in probably around 2025, you know, plus or minus years that, you know, that's sort of the third piece of this is just making cars that, that people want. And so, as, as you know, Scott pickup trucks are really, really popular in, in, in the u s you know, the Ford, uh, F-150 is the top selling vehicle in the u s the sort of the top six vehicles sold every year in the u s are either SUV slash crossovers or pickups, right? Loren: [17:12] And there just aren't a, today there aren't any electric pickups and B, there aren't really any sort of affordable, uh, crossovers that can compete with something like a Toyota Rav four and stuff like that. And those are sort of the hot markets, right? And so, you know, we're just, there's not sort of competitive vehicles, um, uh, available. And then, you know, I would, uh, just sort of talk about kind of awareness and understanding, right? People just still don't even know what evs are and they think there's sort of something, uh, you know, kind of from the future and, and, um, and, and that's really where the neighborhood effect comes in, right? That's why they're doing so well in markets like California where people just like solar. There's been a lot of research around solar, right? You put solar on your house, your neighbor is more likely to go solar. Loren: [18:03] And that's what's happening in markets like California where people just see all the Teslas and electric cars running around and they become more comfortable. If it's okay for my, it's okay for me. And so we've just, you know, got to sort of do a better job of, of making them available and, and, and making people aware of them and that, that they actually really are a good fit for them. And then the last piece, um, is, is, is charging speed, right? I've talked to a lot of people, I've talked to everybody I know about, you know, when you will, uh, think you might be willing to go. And a lot of people will say, I will not consider electric car until it, it charges in the same amount of time that it takes me to refill my car. Right. Which is about five minutes. And we're, we're a long ways away from that. And so people are going to have to accept the charging is, is, is sort of very different, uh, than, uh, you know, that sort of refueling. Got It. Scot: [19:01] Cool. So the, um, so the main cost difference is the batteries and um, you said about seven years we should get to some kind of parody. Is that because battery production kind of gets to where it needs to be or, or, or what is the driving factor on that? Loren: [19:15] Yeah, it's a combination of things. Scott one, as you mentioned, it's just, it's like any sort of product, right? It's sort of volume, right? So right now, you know, there's, there's a last year worldwide, about 4 million evs were sold. And again, that's across both the, you know, the, the, the full battery electric vehicles and plug in hybrids and stuff. And so that's relatively speaking, you know, there was like 80 million vehicles sold last year in the world. That's sort of a small volume. And so the first part of it is, is just like, you know, smart phones or computers or refrigerators. Any other kind of product like that is, is that the price will come down when sort of the battery production sort of scales up. That's the first part of it. The second part of it is, is just um, improving, uh, manufacturing efficiencies, improving the actual, uh, makeup of, of, of the battery packs and selves. Loren: [20:10] We probably don't, don't have time to go sort of deep in into today, but there, there continues to be a lot of um, uh, improvements and developments in, in the actual sort of battery cells themselves. We're seeing in the, in the, in the future we're going to have something called solid state batteries, right, which were moved sort of the liquid in the batteries. And Long Story Short, Scott is that's going to probably double or triple in essence, the energy density of those batteries, which will a obviously, uh, mean that you can produce, you know, a three, 400 mile range battery for, you know, let's say half the cost that, that we, that we are today. So part of it is just sort of, it's, it's still a relatively new emerging technology, if you will. And it's just going to take, you know, five, seven, 10 years to kind of to get there. Scot: [21:00] Do you think lithium ion is going to be kind of the underlying technology that we bet on or do you think some other technology has a shot? Loren: [21:08] Yeah, so lithium ion is obviously the sort of the, the, the goto today, but, but again, I think we're, we're going to see a solid state battery sort of being the, uh, I think sort of the next wave and the next successor. Um, and, and again, it's just a, a sort of a variation if you will, on the lithium ion batteries that it removes that, um, sort of the, the liquid. And so the dendrites don't build up as much. And so basically, uh, you know, you just, you have sort of a higher, higher energy density. There are, there are other sort of technology's out there being, being talked about, but, but I think solid state seems to be the one that most people think is, is ultimately going to kind of be the, be the winner. And again, that's, that's probably, um, seven years, uh, seven to 10 years from being, um, like in electric cars that we would buy. Again from those perspective, it's just, it's a manufacturing and scale perspective that they already have sort of the technology. They just don't have the ability to mass produce those, those batteries yet. Scot: [22:17] Well, who's a, where could we learn more about solid state batteries? Is there like a certain company that's doing this or, or is it like out of a university? Loren: [22:26] Yeah, there, there's several of them. Uh, I've, I've, I had the, the pleasure to interview, uh, one CEO of one company called uh, uh, solid power out of Colorado. They were sort of spun out out of University of Boulder. Uh, Toyota is, is, is working on solid state battery. Dyson, the vacuum cleaner company for lack of a, a better term is walking on one. There are several other, are the universities and companies working on them as well. But those are some of the kind of the, the leaders, uh, Toyota, you know, is claiming that there are solid state battery next year. But, uh, I'm a little little bit dubious on that and think that, uh, showcasing it and actually putting it in a, in a car is, are two different things. Scot: [23:20] Cool. And then a on the lithium ion side. So Tesla built or, or as you know, has built a portion of the gigafactory in, uh, Nevada I believe. Uh, and then aren't they starting a factory in China as well? We'll those two factories kind of, um, you know, give them enough capacity to keep growing and, and kind of, you know, drive up the adoption at least on the Tesla side. Loren: [23:42] Yeah. So you're correct. So it's a, the, the, the gigafactory one like they call it, which is up outside of, of, of Reno, Nevada is a joint venture with, with Panasonic. And the challenge they've had there is just as you say, is they have not been able to actually keep up with demand. In fact, if you're familiar with some of the Tesla energy products, they have the, uh, the, the power wall and the power pack, which are sort of the, the backup battery storage, both for residential and commercial. And they basically had to take the production that was planned for those two products. And actually, but, uh, towards the model three and I'm actually, and so, yes. So the sort of the, the supply of battery packs continues to be sort of the, the biggest alums market. Um, and as you mentioned, China has actually completed the building of their, what they're calling gigafactory three in, in China insurance. Loren: [24:49] And, um, now they're actually, uh, working on, uh, building out the inside of the factory and installing equipment and stuff. They literally, it was sort of amazing that they built this, this factory in six months from literally a literally buying the property and, and getting up is pretty amazing. But those batteries are going to be battery packs and that factory are from everything we know going to be just for the Tesla model three in the model wise that will be sold in China. So that's probably not going to help solve any problem, uh, for, you know, for other, our other markets you up and, and the u s and stuff. And so that week does not go by when, uh, one of the, the, the OEMs, uh, you know, announces yet another, uh, either partnership or plan building a new battery factory. Several of them, uh, are, are being built down in the, in the south, in the US, uh, as an example. But, uh, yeah, so scaling up those, those battery factories, uh, is today literally the sort of the single biggest challenge to sort of growth of the market. They just can't keep up with supply or with demand. Excuse me. Scot: [26:03] Interesting. And then on the models, you talked about a pickup trucks and Teslas working on one. A lot of people are skeptical if, you know, given they're there, they're always announcing things and not delivering on time. Uh, but another one that we've been watching closely as Rivian, um, have you, you think they'll get to market first with their pickup truck? Loren: [26:21] They probably will. There was, and the, you know, there's not another company called work horse out of the Midwest that was been working on a, uh, on a, on a, uh, pickup truck. Uh, but they've been having some financial issues and stuff lately, so it's, uh, unclear what's going to happen with them. But yeah, ravion is a, is a really exciting company and Amazon and some other companies invested a $700 million into them. And, uh, as well as Ford has, is, is now invested in them. So they're at a really sort of exciting company to watch, unlike sort of Tesla and, and faraday future and some of the other sort of evs startups. They sort of remained in stealth mode for, for, for many, many years. And then finally came out and showed their sort of, uh, you know, concept, uh, versions of their pickup truck and an SUV and they're actually gorgeous and, and, uh, you know, really sort of amazing looking. Loren: [27:23] They've designed them literally from the ground up as evs. So there's like spots where you can put golf clubs through the side of the vehicle, uh, add on camping accessories to tap into the battery power. So they're, they're, they're very exciting. The problem with them is that, you know, they're basically, you know, 70 to a hundred thousand dollars pickup trucks. And, um, and so, well, their sort of dream pickup trucks, they're not gonna take the Midwest by storm, which is ultimately what what we need, right? So these are going to still be a lot of, you know, Silicon Valley and people on the coast who, who might've purchased a, you know, a Tesla or similar sort of electric luxury vehicle. Now getting excited about being the first one on their block to own a, a, a Caribbean electric pickup truck that, you know, that I think is, is actually going to be amazing, you know, three to 400 miles of range and just just, uh, amazing features. Loren: [28:22] But I think, you know, it's, it's, it's gonna prove that you can build an amazing pickup truck and that'll, that'll sort of pushed some of the other auto makers to sort of speed up it, but it's only going to take away sales from, you know, the very end highlight Ford Raptors, right, that are in that sort of 70, $80,000 range, thousand dollar range. In other words, it's not, it's not going to directly compete with that $40,000 kind of Ford F-150 or you know, or Chevrolet Silverado or whatever it is. So it's a, it's exciting. I expected to do really well with Amazon and Ford and others behind it. There doesn't seem to be any, uh, uh, you know, issues about will they survive. It's just that, how quickly can, can they scale and ultimately build pickups. An SUV is that maybe reach, you know, kind of below the luxury market. Scot: [29:22] Cool one. Um, uh, you talked about costs and for a while there we had a, a national subsidy. And then I think those have gone away, but there's still some state subsidies. We're, where are we on subsidies for, for enticing people to jump into the pond. Loren: [29:38] Yeah. So, so actually, no, so the, the federal electric vehicle tax credit is, we sort of commonly commonly refer to it is still, uh, it's still available. The way, the way it works is that, uh, it's based on each, uh, manufactures. So, uh, the, and, and the amount of the federal tax credit varies by the, the, the, the IRS basically has a, uh, a formula for it. But, uh, if the battery pack is of kind of a certain size, so it can be a plugin hybrid or a full electric, um, the maximum tax spread and get a $7,500, um, and then, uh, the, the smallest I think is about 1,750. I forget the exact amount, sort of, uh, for some, some vehicles and sort of everything in between. Again, sort of based on that sort of battery pack size. But once a, an auto maker sells 200,000 electric vehicles beginning from 2010, it starts kind of a, a complicated, uh, phase out, right? Loren: [30:49] So that get too into the weeds. But basically, uh, that tax credit phased out over, uh, nine quarters, if you will, and gets cut in half. And Tesla actually as of today, uh, their tax credit was cut, uh, uh, in half. Uh, and so it's down now to, or I think it's been cutting twice, half now. So it's down now to God, I forget the amount, but it's like 1,350 or something like that. Uh, I should know that, but it, but bakes look getting, it's been cut in half twice. And so this is the last, um, two quarters where you can get any kind of tax credit, uh, on Tesla models. Chevrolet also reached the General Motors also reached the $200,000, uh, threshold. Um, but they're, they did it a couple of quarters behind so you could still have several more quarters for their models and there's basically nobody else close. Scott Nissan and Ford are still about, uh, 80, 90,000 vehicles away and they don't have sort of any volume of EBS. Loren: [32:00] And so the tax credit in essence for the other 30 manufacturers or whatever is, is still sort of widely available and will be for many years. Um, but, uh, and then at, as you mentioned at the state level, by the way, I should, I should mention there, there's a lot of, uh, momentum to either by a certain people in oil companies that are to get rid of that federal tax credit and then by proponents of it to actually change it in an extended and, and change how it's actually calculated so that there isn't that 2000 sort of threshold. Um, but then as you mentioned, um, a lot of states actually have, uh, either rebates or tax credits. California for example, where I live has one, um, you Lotta utilities, uh, also have them. So like the Pacific gas and electric here in California, in southern California, Edison, et Cetera. Loren: [33:04] I'll have different ones, but it's Tenley tends to be about like $500. Uh, many states have tax credits of say, $2,500, or you know, a thousand, something like that. And then there are also many other sort of incentives or benefits such as access to the eight year v Lane, uh, and, and things like that. So there, there's still a lot of opportunities to in essence reduce your, your overall cost of that electric vehicle through, uh, through these various incentives. Very cool. And then, um, I've heard some states are considering actually, uh, you know, the opposite of subsidies, which would be increasing, uh, effectively a targeted tax, I guess, on, on evs. And I think their argument is we're losing all this tax income from the markup and gasoline. Have any states enacted that or are they just kind of chattering about it at this point? Loren: [33:56] Uh, it's, it's a little bit of both. There's, there's a lot of chatter. Uh, I think it was Illinois proposed like a thousand dollar registration fee. And then I think just like a week ago, it was, uh, it did not pass. Um, but there are some states that have past ones of like, it's like sort of double the registration of sort of a gas vehicle or they've added additional hundred or $200 and things like that. So yeah, you're, you're absolutely correct. There are, um, uh, some states that, um, are, are an acting anything from sort of small to fairly significant, uh, ways either sort of, typically it's sort of a registration fee. There's sort of increasing that, um, at basically it just as you said, as a way to say how do we recapture sort of the, the gas tax, uh, you know, w uh, gas taxes that we get to fund, uh, infrastructure, roads and bridges and things like that. Loren: [34:58] And that's actually a topic that, uh, I'm really gonna sort of dive into pretty significantly over the next couple of months, Scott. Cause it's, it's one that really fascinates me cause there are, there's about a half a dozen different models that people are talking about. Uh, but, but none have sort of emerged and this is not just the US and state issue. This is a global issue, right? Like nobody has actually figured out what is going to be kind of the most equitable, fair way and makes everybody happy to do this. And some of it sort of big brothery like people are talking about, they would track your mileage. Other people talk about you take your car in for an annual checkup and they'd look at the mileage thing, you'd be assessed a fee. Uh, there's electricity taxes, there's just flat registration, there's tire, you know, tire taxes. There's like all these things being floated and um, you know, none have, none have actually sort of emerged yet. And so meanwhile you're seeing just what you talked about Scott, which is states and sort of some states are just saying we don't know what the right answer is, but we're gonna, we're gonna Start, uh, taxing more. It's charging these fees because we know even though it's only a couple percent of, of the new vehicles that it's coming and we need to start, start generating that, that sort of revenue, recapturing that lost revenue in some way. Yeah. It's funny cause it seems so misaligned with, you know, Scot: [36:23] they'll try to be green and reduce carbon footprint. Everything did that you would create a disincentive for going EV. It just kind of, Loren: [36:30] yeah. And, and that's, yeah, that's a really good point in that, you know, depending on how you view of the world, right. Many people think that, that, that in fact, yes, we should look at sort of the, the actual impact that the internal combustion engine has, that we're actually not charging for it, right. Everything from, you know, sort of air pollution to, uh, carbon emissions and things like that. And so, you know, then that gets to a sort of a whole nother sort of complex, uh, way of sort of thinking about it. But, but you're right. And so you have this sort of like everything in the world, in the u s today, everything is sort of, you know, red and blue or black and white and this sort of, you know, it's hard to sort of bring people into the middle to find a, a, a good common and simple solution. Scot: [37:21] Cool. Um, last topic on Kinda like adoption rate. Um, where are we on charging infrastructure and is there, is there some metric we look at like chargers per population or just like the number of charges out there and any trends on that? Loren: [37:35] Great question. Yeah, I sorta, you know, to kind of back up for a little bit. Um, you know, the, the thing that, that people who don't have an Evie and, and as, as someone who's, who's on your second Evie, you absolutely understand this, right, is that, you know, when we think about refueling our gas or diesel powered car, we think about, we get in our car and we'd drive to a gas station or we stop off on the highway at a gas station going in, refuel, and then, you know, Kinda get back on the road or whatever it is with, with the electric cars, people have to sort of be re taught how to kind of think about charging. And that in a, for, in, in, in, in most parts of the world, in the u s you're looking at about 60% of people live in some form of a single family homes. Loren: [38:27] So they can install an Evie charging station in their house from anywhere from, you know, 500 and $1,500. Uh, which again is not necessarily a small number for a lot of people, but basically you drive in as you know, and you plug in your car at night just like you do your smart phone, you wake up in the morning and it's charged. Uh, maybe you drive to work and you, if you were lucky enough to have a, an employer that has charging stations that work and there are a lot of them out here in Silicon Valley. I know there's a lot down in places like Atlanta and probably where you are in Raleigh and stuff, but that's sort of another source, a target and Walmart have uh, hundreds and hundreds of charging stations that they've, they've built many of them, Tesla superchargers and other ones as well. Uh, Tesla has this what's called destination charging program where literally there are thousands of hotels and resorts around the world that have installed what's called the Tesla Wall charger. Loren: [39:27] So you can go stay at their hotel and just sort of plug in while you're sleeping at night there as well. The, the, the two biggest challenges, Scott, to kind of the charging infrastructure is solving the problem for renters, if you will. Or people that live in, you know, condos or, or high rise downtown in New York or something like that. Right? Where you can't just drive home and, and, and, and easily, easily plug in. So that's the first big a charging infrastructure challenge we have to solve. And that part of that's going to be solved by, uh, workplace. Part of it's going to be solved by the sort of, you know, urban charging centers and, and charging it at target and Walmart and places like that. Um, longer term sort of the apartment owners and managers and stuff, we're going to have to step up to the plate. Loren: [40:20] Most of them do not want to yet. They don't feel like it's their responsibility to be, to build out the sort of the refueling centers. But, so that's sort of the first part of kind of where we are is, is, you know, if you're a homeowner, it's, this is, this is a piece of cake. Uh, it's, it's those sort of non homeowner homeowners that we would kind of have to sort of focus on, on, on building out. The second piece of it is road trips, right? It's like most of us probably only do a couple of long road trips per year, but that is the biggest fear of most people in an, in, in buying an Evie, I'm going to Disneyland Disney world, going to see grandma two states away. It's a 500 mile trip, where am I going to starch? And, and Tesla understood that early on and so took the, you know, had the foresight to build out their Tesla supercharger, uh, network to sort of solve that problem. Loren: [41:19] And if you've ever been to sort of, you know, California and driven from like the bay area down to southern California, literally there's, you know, like where I live to down to la, there's like seven or eight different supercharger stations. You have plenty of options to sort of stop and charge that. So we have to sort of build that out. Electrify America, which is the, uh, the diesel gates, a subsidiary of Volkswagen, uh, that basically they've committed to $2 billion to building out, uh, the charging infrastructure in the u s both those sort of a road trip chargers as well as it apartments and in sort of a, an urban locations and stuff. And they're building out really pretty quickly there several other charging networks that are, uh, uh, ego and, and chargepoint et Cetera, that are sort of, uh, building out and, uh, you know, it, the thing that is sort of, we're, we're still not at that is that I believe is sort of the other, uh, automakers haven't really sort of stepped up to the plate, at least in the u s sort of help build that out. Loren: [42:28] And so I think that that's something that, that we need to need to see more of, uh, going forward. But to your question around the metrics, yeah. I, I tend to look at, uh, things like, uh, the number of, uh, uh, charging locations per number of electric vehicles. In other words, if you think about that, like fundamentally we need to scale the number of, of uh, electric charging stations in locations, uh, you know, at the same rate or ahead of the rate of, of people buying them. Um, and, uh, right now we're, you know, in most markets we have sort of a pretty, pretty good ratio. Um, there tends to be anywhere from about 15 to 30 electric vehicles per charging location and that seems to be okay. We probably need to get that down to closer to between 10 to 15. Uh, and then the second metric that I like to look at is the number of charging stations. Loren: [43:36] And this is the language we use in this industry is really bad, uh, because it's very different from gas stations, right? We say charging stations, which is actually means those sort of plugs the connections. Um, but a key metric to me in that area is, um, the number of those connections per location, right? And Teslas at almost 10, meaning if you go to their supercharger station, the average one has just under 10 connections. So 10 cars can plug in and charge at the same time. They have some that have as many as 40 connections. A lot of them now are, are 12, 12, 15, 20 et cetera. Um, but most of the other networks are only at two to four. So we've, we've got to build these sort of what I call sort of super centers, right? Where literally as, as the number of electric vehicles scale and they're driving down, you know, the east or mid West or the southern California, whatever it is. And you can have, you know, literally 50 cars stopping in at one location and, and all charging and being able to charge in 15, 20 minutes and get on their way. Scot: [44:46] Cool. Um, do you happen to know how many just total plugs there are in the United States? Loren: [44:52] There's about 65,000, what we call level two. Uh, that's like the level to sort of like what you plug in for your washing machine, that sort of, you know, two 20 capability and then, uh, what we call DC fast chargers, right? Those sort of superchargers that charge it really high rate. And you sort of combine those two together. We're at about 65,000 today in the u s um, but again, you know, Scott, if you think about that metric, that metric doesn't include the, you know, about 900,000 that are in people's homes. Yeah. Right. And so that's, you know, that's sort of the other, uh, other sort of, you know, key metric that almost everybody that buys an Evy obviously install some sort of a charger in their home and that that basically takes care for most people, uh, about 95% of their charging needs. Right. The only time you kind of, if you have a home that you can plug in the, that you have to go outside that is for those sort of either sort of mid or long road trips. Scot: [46:03] All right. So let's, uh, so that's a really good status of kind of where we are today and what's keeping people from adopting evs. Um, when you project forward, when are we going to cross that chasm and see evs become a much more material part of, of vehicles being sold? Loren: [46:19] Yep. Yep. Great question. So I use a, and thank you for using that sort of crossing the chasm. That's one of my favorite sort of terms and, and many, many of your listeners would probably feel are familiar with the book from many years ago, but the crossing the chasm refers to that, uh, technology adoption curve. I, I'm, I mentioned at the beginning of the podcast around, uh, when you basically go from early, early adopters and cross into that sort of early majority, which is 16%. So I like to be sort of very specific around, uh, the, the concept of when we will go mainstream. And so I use that 16% and I've, my prediction is that across the u s we will cross that 16% chasm, uh, in 2028. Um, but, um, uh, in California, uh, I believe it will be there in 2022. So just, uh, what three years away, cause we're, we'll probably be, as I mentioned at about 9%, uh, hopefully close to 10% by the end and of this year. Loren: [47:27] Uh, but what that also means, Scott, that when we hit that 16% across the US in 20, 28 or thereabout, it means that we might only be at, you know, 8% in Louisiana or something. So again, you know, and by that point, California might be, you know, 30, 35%. So we're still going to have sort of this, this, you know, in the u s and around the world is adoption is, is very, very market specific. And even cities specific, if you will, nursing, well, the, uh, California grid be able to handle that many evs. Yeah, great question. So that's, that's one of the things that a lot of people sort of talk about. One, you know, is the, is the during grid, right? The, with, with, uh, being used coal and natural gas, etc. And, and, and, and be, can grid actually handling. So, you know, a couple of things are happening in, in parallel, right? Loren: [48:24] And so the, in fact, the move to renewable energy solar and wind is actually happening at a faster rate than electric vehicle adoption in the u s so in other words, w w the grid is a getting cleaner faster than we're buying electric vehicles. And B, uh, the concept of sort of battery storage and micro grids is, is also sort of taken off. So as the cost of batteries declined for, for electric vehicles, they're also declining for that sort of what, what's called Keke storage demand. Right. And so you have this situation where, uh, you know, take, take a market where it's, you know, it's 100 degrees in the middle of the summer and everybody comes home at six, seven o'clock at night, fires up their air conditioner and stuff. And that's where we, we have, uh, you know, Brian House blackouts, et Cetera. Um, uh, and so the concept of peaker plants, so, uh, in particularly natural gas has been used, used for that in recent years. Loren: [49:31] So basically they fire those up to meet that specific, uh, demand rallies with sort of a battery storage. We can store all that excess, uh, solar and wind energy that's being created sort of during the day and throughout the day and those batteries and in literally a Nanosecond, those that battery storage can be tapped into sort of hit that sort of peak demand. So the reality is that at how we charge and when we charge is, is actually going to be monitored by abilities and you will like, I don't know Scott when you charge, but I charged my, my cars like at two o'clock in the morning, I get a lower rate. Nobody's, you know, nobody else's sort of using electricity at the time. And so it, it doesn't have that impact. Right? And so the utilities and software and AI will sort of manage when and how we charged the sort of make sure that not everybody's charging at the same time. And again, we'll have this sort of, uh, battery, uh, backups that are to manage that sort of peaks and stuff. So I'm not concerned at all about, um, the grid handling it. Technology will sort of solve that and sort of the growth of, of, of renewals. And battery storage. We'll, we'll take care of it. Scot: [50:52] Cool. Uh, I could go another hour, but I know we're kind of bumping up against time here and want to be, uh, you know, really appreciate you. You've given us a, an hour of your time. Um, any other last thoughts on, so I would love to talk about connected car and some of the ownership models and avs. Um, I kind of view, you know, Evie is kind of a, an underlying kind of platform for the, some of those things. It's just kind of kind of happen along with those. Um, or, or if you'd like to spend our last couple minutes talking about what's going on in other countries around evs. I'm, I'm open to either topic, whatever's interesting to you. Loren: [51:25] Yeah. I mean, I could, I could go another nother three hours, but, uh, yeah, I'll, I'll, I'll put quick, quickly on, on both of them. So, you know, globally, uh, you know, China is, uh, has the Chinese government is basically recognized electric vehicles as a business opportunity. So you look at, uh, many, many countries, France, UK, uh, uh, Netherlands, Norway, et Cetera. And they're looking at electric vehicles from kind of the, we need to reduce, uh, carbon emissions and climate change and air pollution and et cetera. And so we need to transition. China's sees that as well, but they also see this as perhaps the single biggest business opportunity potentially in the history of China. In other words, they see that, uh, that they can sort of dominate, like they've done in consumer electronics. And so most of the battery packs, uh, battery factories in the future are going to probably be the majority of them in China. Loren: [52:33] They see it as a massive opportunity. And so they're doing a lot of things to sort of take the lead there. And so we could, we could spend an hour on tariffs and all this sort of the politics of this, but, but China, uh, you know, many of our cars that, that you and I will purchase in, you know, seven to 10 years are probably going to be made in China. So that's sort of that, that sort of first part of it. Um, uh, but then sort of back on kind of the, uh, you know, connected and autonomous vehicles. I mean, obviously, uh, autonomous vehicles are primarily going to be powered by electric cars just because if you have, you have these sort of abs sort of, you know, running around the Robo taxis and stuff without a driver and you look at the maintenance costs and everything like that, it's sort of a natural natural with electric vehicles. So those two, uh, things I've obviously go go hand in hand. And so, um, yeah, the, you know, again, the, the uh, the, the intersection there is, is, is sort of a, uh, ideal. And, um, while we, you know, today we're seeing sort of a mix of those in the, in the next couple of years, we're going to see most all of the ads being made on, uh, electric platforms. Scot: [53:51] Awesome. Uh, and then, uh, last question, uh, you know, if folks want to find you online, where are the best places Loren: [54:00] so they can go check out a, the website and blog Evie, adoption.com just like it sounds. And follow me on Twitter at EVAdoptiontweet. Ah, those are probably the two best ways and they can a sign up for my email newsletter or a on the website as well. Would love to have them opt in. Scot: [54:19] Awesome. Well we really appreciate you taking time to be on the podcast. I jotted down 50 things I learned and hopefully everyone else learned a ton as well and uh, we'll have to get you back on. I know you're always doing research and things like that, so I'd love to get you back on the next time you update your models and get an update from you. Loren: [54:36] Great. Thanks. I really appreciate it. This was a lot of fun.
https://vehicle2.libsyn.com/electric-vehicle-analyst-at-evadoption-loren-mcdonald
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