Mile Marker

Leading the Charge Towards Electrification (Mike Landau - Park My Fleet)

December 13, 2022 Season 1 Episode 3
Leading the Charge Towards Electrification (Mike Landau - Park My Fleet)
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Mile Marker
Leading the Charge Towards Electrification (Mike Landau - Park My Fleet)
Dec 13, 2022 Season 1 Episode 3

Mike Landau, CEO of Park My Fleet, stops by to talk about everything electrification, its impact on overall fleet operations, productivity and the bottom line.

https://ridecell.com/
https://www.linkedin.com/company/ridecell/
https://twitter.com/ridecell

Show Notes Transcript

Mike Landau, CEO of Park My Fleet, stops by to talk about everything electrification, its impact on overall fleet operations, productivity and the bottom line.

https://ridecell.com/
https://www.linkedin.com/company/ridecell/
https://twitter.com/ridecell

Stacey Papp:

Welcome to the Mile Marker Podcast. My name is Stacey Papp and I will be your guide taking you on a journey into the world of fleet automation and shared mobility, focusing on innovations for businesses with fleets.

Joining me today is Mike Landau, CEO of ParkMyFleet, who provides fully staffed, secured and gated mobility hubs, supporting fleets with full lifecycle management services. Throughout Mike's career, he has had several leadership roles in the mobility industry, lending his passion for scaling companies for rapid growth to an ever expanding market. Today, he joins us to talk about everything electrification, it's impact on fleet operations, productivity, and most importantly, the bottom line.

Mike, welcome. It's so great to have you here.

Mike Landau:

It's wonderful to be here, Stacey. Thanks so much for having me.

Stacey Papp:

Absolutely. So first things first, tell us a bit about ParkMyFleet and the services you provide to the mobility industry.

Mike Landau:

Sure. So ParkMyFleet is a national, what we would like to refer to as cradle to grave or end to end mobility solutions provider, that doesn't own any vehicles. So when you think about fleet management and quintessential fleet management companies, they're typically ones that possess vehicles and manage vehicles on behalf of others, whereas we do all of the other services around it, including storage, infrastructure, servicing, the movement of vehicles, maintenance and the like.

Stacey Papp:

So as ParkMyFleet CEO, no doubt you see and hear a lot about what might be on the horizon for fleets. What trends do you anticipate will gain traction in the mobility industry with the hopes of making a lasting positive impact?

Mike Landau:

Well, there's a few things there. In regards to the main buzzwords that everybody is talking about, it's all around electrification and the Net Zero by 2030, becoming carbon emission free. And I know we're going to talk a little bit about that later, but in terms of the main trends, that's what we're seeing. I'd also say that we're seeing people due to supply chain constraints keep their fleets on the road longer than normal, which leads to greater impacts in terms of the maintenance required on those vehicles, and their depreciating or appreciating of late value over time.

Stacey Papp:

So let's talk about electrification, good segue by the way. You can't turn on the news or browse the internet without seeing any conversation about EVs, clean vehicles and really their overall impact, not only on the environment, but also on the businesses that operate them. How is the shift from ICE vehicles to EVs impacting fleets?

Mike Landau:

One, that's a great question. I think it's impacting fleets in multiple ways. And one is everybody's bought in, or at least the large enterprise scale fleets, have bought into the fact that they like to get to zero carbon emissions with their fleets, a lot of their corporate offices have mandated it, but they tend to be struggling somewhat with the unit economics around it. So when you compare an ICE vehicle to an EV in a fleet scale operation, which is vastly different than a vehicle that would sit idly in our driveway 95% of its life cycle as we find with personal vehicles, the impact on the fleet transition is much greater. And particularly with how routing works and what the vehicle's use case is and how many miles it's traveling per day, and while everybody's committed to it, the logistics and the infrastructure around it are still question marks in a lot of people's minds.

And that's really part of the role that we're trying to play, is to make sure that we stand up the infrastructure for those fleets, so that if I'm a fleet manager and I'm sitting down with my annual budgets and I'm saying, okay, it costs me this much to operate an ICE vehicle, it's going to cost me this much to operate an EV, but I'm not taking into account the CapEx that's going to be required to install the infrastructure to support that fleet in a timely fashion. And particularly if you look at ride share ramifications as well as last mile delivery where those vehicles don't have long idle times, and if they're working two shifts, they need to be charged and back on the road very quickly.

So getting DCFC charging infrastructure to support that is expensive, as well as you may not have the power required on site. And local utility and lots of local utilities are focused on supporting the EV transition and have developed EV innovation teams and other things, which is great. Others not so much. So getting the requisite power to those sites that can support megawatt level charging across a fleet of 300 to 500 vehicles simultaneously is not something that's very easy to solve.

Stacey Papp:

So really this becomes a conversation about investing upfront and then reaping the rewards from that investment on the backend, which could be really a couple of years depending on the vehicles that you're operating as a fleet owner or fleet manager.

Mike Landau:

Absolutely, yeah. So being able to amortize that cost over time is the crux of our business, and helping expedite fleets transition to EVs is really one of our core focuses. So if I'm a fleet owner, like we were saying earlier, and I'm looking at, okay, it costs me X to operate an ICE vehicle, Y to operate an EV, what are the logistical ramifications in that? And if we can turn around to them and say, hey, we're going to absolve that part, you don't have to worry about the infrastructure. So while you're used to popping into the national network of gas stations to fill up your ICE fleet, we can create relatively the same level of convenience by having the infrastructure available to you that you didn't have to pay to install.

Stacey Papp:

So you're really reallocating power of the pump to really a power of a charging station at this point.

Mike Landau:

Exactly.

Stacey Papp:

So what are your thoughts on the potential impact of electrification as we work towards that global goal of Carbon Zero, which I think a lot of companies are now starting to adopt under that ESG program that either they've had or they're starting to develop? Will widespread EVs help to reverse the negative effects we're seeing on the environment from ICE vehicles being on the road today?

Mike Landau:

I mean, I think the short answer to that is unequivocally yes. But the long answer to that is, where are you getting the power that's going into those electric vehicles? So there's a few computations that go into it. How much carbon did you emit during the manufacturing process of the batteries and all the components that go into that EV, one? And then two, the power that you're charging or putting into the vehicle, how is that being generated? So in some states, you can get very clean energy that's generated from renewable sources, wind farms, solar farms and the like, and or it could come from a cold burning power plant in which case you haven't achieved much in reducing your carbon footprint.

But certainly adopting an electric fleet, I believe over time you're going to recognize cost savings, and the cost per kilowatt hour of energy that you're using is more predictable than the fluctuating price of gasoline. So I really think it's going to take an entire ecosystem to recognize the full benefits of fleet electrification. It's a good start to electrify your fleet, but you really have to look at where the energy is coming from and how it's being generated in your overall ESG impact.

Stacey Papp:

So under the umbrella of ESG, I know that a lot of policies and programs account for some of the challenges that you may anticipate as you break into something that's a little bit newer. What are some of the challenges you would anticipate fleets having when incorporating more clean vehicles into their fleets and how do they work around combating those?

Mike Landau:

So it really depends on what are you looking at? Are you looking at biodiesel? Are you looking at hydrogen fuel cell? Are you looking at EV? So we discussed that it takes very expensive infrastructure, if you're looking at hydrogen fuel cell, the same holds true. So you are needing to install expensive infrastructure, hydrogen is very difficult and very expensive to transport. So we've been looking at some companies that can do onsite hydrogen generation by using ammonia and other things, that lowers the carbon footprint of the transport and manufacturing of that hydrogen. So if you can create clean onsite hydrogen to power your fleet, then I think that's helpful. And then if you look at the biofuels that are materializing, having those biofuels on a route or very close to where a fleet is domiciled is also critically important.

So getting access and maintaining access to a supply chain of that energy medium is going to be critically important for the decarbonization of fleets.

Stacey Papp:

Who would've thought that you have to also become a scientist, right? You're talking about biofuels and hydrogen, that's also something that we don't really talk a lot about or hear a lot about in this space, so much so as, this is how much it's going to cost, this is how much it's going to save. But you really have to have a different a mindset when it comes to the overall operations of these type of vehicles.

Mike Landau:

Absolutely you do. And there's ramifications depending on what that fuel medium is, and what am I trying to create a supply chain for? Am I trying to create sustainable electricity? Like we said, hydrogen, am I trying to get the relevant biofuels onsite? Do I have a requisite supply of it to be able to do that? And can the specs of those vehicles given whatever fuel medium they're utilizing meet my current duty cycle needs? So if I need to transverse X amount of miles per day carrying Y amount of weight, does that all play out? Does that meet the need of what I'm looking at? And from what I'm seeing by and large, whether it's the legacy OEMs or some of the upstarts that are making some pretty interesting innovations in the space, are all basing their R&D on meeting the current duty cycle requirements per class of commercial vehicle 1 through 8.

Stacey Papp:

So you touched on this earlier, and I think it's worth expanding upon, and it's the topic that most often pops to mind when talking about EVs and the incorporation of clean vehicles, is cost. So can you break down some of these costs for us that might be an initial investment, as well as their impact on the bottom line for fleet based businesses?

Mike Landau:

I don't think any of these fleets were necessarily anticipating that they were going to need to install long-term infrastructure, and irrespective of what that infrastructure is, to support their fleets. So let's call this the fourth industrial revolution where we're now segueing to clean energy, and what does that mean and how does it relate?

So there's significant costs associated with that CapEx. I mean, just off the top of my head, one, you're changing out your fleet. You've got maintenance technicians that either are in-house or outhouse that are trained in the maintenance of your specific fleet, and you've got people that understand diesel engines and you have people that understand gasoline engines, and this is a whole new medium. So I'm saving on my supply chain because an EV in terms of fluids, only requires brake fluid as opposed to numerous others when you're talking about the operation of an ice fleet.

But conversely to that, I didn't know that I was going to have to go and apply for permits to trench my site. I didn't realize that I was going to have to coordinate with multiple municipal type bodies, and whether that's the local municipality, whether that's the local utility or other people that hold jurisdiction over where you're trying to do this is. So there's cost in getting through that and obtaining experts that have the subject matter at hand in that specific jurisdiction to be able to achieve what you need to achieve. And then the physical cost and time it takes to have those bid out, specced and built.

And then there's the procurement of the actual infrastructure itself where EV chargers are expensive and not easy to make. To qualify for the various Inflation Reduction Act and various other incentives that are available today, you need to [inaudible] manufactured in the United States. And there's companies that are making big strides in trying to scale up capacity in terms of charger manufacturing, so it's coming, but it's not here yet. So the chargers themselves and the procuring them are a commodity, and then the knowledge of what kind of charger do I need? How am I going to use it? How do I maintain 98% uptime to keep it operational? A lot of the fleets that we work with are mission-critical. People need to move and the goods need to move, and if those goods don't move, there's major issues. So they can't afford to have infrastructure crash and go down like we've seen in some of the public access charging networks.

So helping them solve for that or being an outsource for them for that so they can focus on their core business is what we're focused on.

Stacey Papp:

I want to go back to the Inflation Reduction Act that you mentioned, and with its recent passing, commercial vehicles will be eligible for tax incentives when using clean vehicles. So what impact does this have on total cost of ownership as well as ROI for fleets?

Mike Landau:

So it certainly helps. There's no question that if the cost of procuring a vehicle, in light of everything that we've discussed in terms of the additional cost that are associated with fleet electrification, any incentive that could be recognized under the IRA is hugely helpful and impacts that same fleet manager that's sitting down with his budget trying to make sense of it. It certainly helps spur them towards, him and her, saying, this is what I want to do, this is what makes sense for me, and hey, we're going to recognize X in tax incentives from doing this.

Stacey Papp:

So speaking of incentives, we're on a roll with the segues today, thank you for that, what are some additional incentives or benefits for fleets as they make the switch from ICE vehicles to EVs? Because as they're compiling this information, I have to imagine fleet managers are going, I really wish I had a checklist of not only what to do, but how this really is going to impact my fleet not only today or tomorrow, but downstream in the next five to 10 years? What are we looking at as far as why should they do this and it being beneficial?

Mike Landau:

I think the overall cost of ownership, if you isolate an EV versus an ICE vehicle, is wildly in favor of the EV vehicle. If you think about how many SKUs of parts need to be managed for an ICE vehicle versus the hundreds of parts that are required to operate an EV, if I'm just sitting there and isolating those two segments, ignoring the fuel medium and the infrastructure required for it, if I just isolate those, I believe you'll find that there's significant savings, there's better uptime, there's better maintenance, there's less maintenance to keep that fleet on the road longer.

I think that there's a lot of unknowns, I think that there's unknowns in regards to battery degradation and energy density and how that degrades over time. We know that batteries degrade over time and that energy on a cell will decrease as it's used and charged, that's just battery chemistry. So getting the maximum efficiency out of those, what's their depreciated value, if any, at the end of its lifecycle? When am I going to remove it from my fleet, when am I going to add additional vehicles to my fleet? How do I stay up on the latest innovations in that so I make sure that I'm getting not a pilot type vehicle, but really a full-blown vehicle that can actually perform in its duty to me?

Stacey Papp:

So there is a lot of information out there about EVs when it comes to a lot of the things that we talked about today, cost, maintenance, and really just overall impact on operations. What resources have you found to be credible that helps provide concise and accurate information for fleets looking to make the change that's not scary or overwhelming or daunting, but really just lists out, here are the benefits and here's how to baby step your way through this big transition?

Mike Landau:

Excellent question, and I think that there's a lot of unknowns around that. Certainly the OEMs provide guidance. So the manufacturers of these vehicles have very specific use cases in mind for them when manufacturing them, so if it's a last mile delivery van, if it's a ride share type vehicle, if is it a class 8 that's going interstate. All of those are being taken into account and they're looking at average routes and things like that, and trying to provide guidance to the fleet owner on, hey, here's what the vehicle can do, here's what your current fleet does, and here's what you can try to measure against.

Now, I think that there's going to be an ease into this transition. So what we're seeing now is not wide scale deployment, but more, okay, let's put one to five to 10, maybe 15 vehicles in a certain location. Let's see how they perform in that location, let's take the learnings from those pilots and then see how we can adopt those across our fleet, multi-jurisdiction, that type of thing. I think people are committed to it. I think people are, I don't want to use the term dipping their toe in the water, but they're certainly testing the waters to make sure that things are viable before there's a wide scale rollout. And the OEMs that are manufacturing these vehicles need that time to ramp up capacity with all of the lingering COVID supply chain [inaudible].

Stacey Papp:

So one last question before you go, it's my favorite question to ask, it's the crystal ball question, so get your prognosticating hat on. If you had a crystal ball. What do you envision the mobility industry to look like in the next five years when it comes to adopting more clean vehicles?

Mike Landau:

I think you're going to see mass adoption over the next five years, and I think the next five years are really going to be critical. And utilizing the funding that's come from the Inflation Reduction Act and the bipartisan infrastructure bill are certainly going to help in getting that transition going and spurring development in public and private partnerships. So it takes private industry and it also takes the government on board with their resources and their knowledge to make this a success, and I think that's what those two bills are trying to accomplish.

So I think you're going to see a vastly different landscape than you do today, and I think that you probably will not see any of the big players [inaudible] ICE vehicles, unless they're very, very specific use cases that are going to be new to their fleet in the next five years. I think all the planning that's going on with both the OEM manufacturers as well as the fleet owners themselves are all centered around either EVs or other clean type of vehicles. I don't think anybody's talking anymore about, well, how much more mileage can we squeeze out of an old ICE vehicle and try to get this thing so it fits into our carbon footprint. I think people have moved away from the ICE model by and large for anything new. And five years from now, you're going to see the direct impact of that with widely deployed infrastructure and a real good chance of hitting that Net Zero by 2030 goal.

Stacey Papp:

So Mike, I want to thank you so much for joining me today. This was a really great knowledge exercise about electrification. I know that there are a lot of question marks out there when it comes to how does this impact me? Why should I do this? How much is this going to cost me? And I really am thankful that you provided a lot of those answers. So thank you so much, it was a pleasure to have you here and learn from you.

Mike Landau:

Stacey, it was great to be here. Great conversation. Thanks so much for having me, and I hope to come back.

Stacey Papp:

Absolutely, we can't wait to have you back. So until the next time, keep moving the world better.

Thank you for listening to the Mile Marker Podcast. Stay tuned for another episode full of insights and ideas to keep the mobility industry moving forward. In the meantime, follow us on social media and be sure to like, comment and share today's episode.