When you think electric trucks, you probably think of huge semi trucks. But there are hundreds of other types of trucks that need to start transitioning to electric, and how the heck will that happen? Tune into this conversation with Alexander Voets, General Manager of Velocity EV to learn about first steps to electrification and how to navigate all the new pesky regulations.
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When you think electric trucks, you probably think of huge semi trucks. But there are hundreds of other types of trucks that need to start transitioning to electric, and how the heck will that happen? Tune into this conversation with Alexander Voets, General Manager of Velocity EV to learn about first steps to electrification and how to navigate all the new pesky regulations.
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Angela Simoes:
You are listening to the Mile Marker Podcast where we explore trends and innovations and fleet automation and shared mobility, helping fleet based businesses make better informed decisions and achieve full digital transformation.
Angela Simoes:
Welcome everyone to another episode of the Mile Marker podcast. My name is Angela Simoes, and today's guest is Alexander Voets, general manager of Velocity EV, a Velocity vehicle group company that sells commercial electric vehicles. Alexander was also the director of government programs at Velocity Truck Centers where he oversaw the introduction of electric vehicles into the market and helped guide the customer's decision making on what technology is right for their operation. He has spent his career in areas where automotive and technology industries meet, launching several connected car projects, oversaw the autonomous driving team for an OEM and served as a software development manager for in vehicle entertainment applications. Welcome Alexander.
Alexander Voets:
Hi, Angela. It's good to be here. Thanks for having me.
Angela Simoes:
No, it's such a pleasure. And with your background, I mean, gosh, our art conversation can go in a number of different ways, but let's start by having you give our listeners an idea of what you're working on these days and really what's your focus and mission as it pertains to electric trucks.
Alexander Voets:
Great. Yeah, thanks. And again, thanks for having me. It's always great to talk about what my passion is, which is commercial electric vehicles, and I've been in that space for quite some time now. Actually earned my name as Alex Vaults sometimes instead of Alex voets.
Angela Simoes:
I like that. I like that.
Alexander Voets:
And in my current role, I'm the general manager of Velocity EV, and we are the distributor of the Rising Truck brand, which is a class 4, 5 battery electric truck from the Daimler Truck company.
Angela Simoes:
And so when people think electric trucks, right? I mean, obviously people see trucks all over the place, right? Of all sizes, but primarily in the news when people hear, "Oh, we've got electric trucks happening and they're doing roots up and down the highways," they're thinking of semis, right? So you've got TuSimple and Kodiak and the big ones, but people don't think that, well, yeah, all those other smaller trucks are also going to be going electric as well, right? So talk a little bit about some of the different types of trucks that are being electrified. If there's a certain type ahead of the pack, these are going first and some of the issues that the industry is facing with the transition to electrification.
Alexander Voets:
Sure. Yeah. And that is a very important delineation. If we look at electrification of transportation overall in the passenger car industry, it has happened for quite some time. Electric cars, you can buy them for quite some time. Customers are pretty knowledgeable nowadays about how to charge them and how that all works and have charging at home. But for the commercial vehicle industry, that shift hasn't happened until recently. And I think it is actually one of the largest shifts in the commercial industry that I've seen in my lifetime. Maybe somebody is going to argue with me on that, but it's certainly a big, big change and it is important to look at all the vehicles, not only the large classes, like you said, the class 8s or the 18 wheelers that we see on the highway, those are usually the trucks that come to mind for people, right? Because they see them a lot.
But it goes all the way down to class 7, 6, 5, and 4, which are ultimately the vehicles that do your deliveries on everyday items. You go to grocery stores when you go to your delivery for furniture or linens or whatever else. So a lot of the vehicles that drive in our cities are actually these smaller class 4 or 5 vehicles. And ultimately, when it comes to electrification, of course you get the most bang for your buck if you electrify the vehicles that are on the road most of the time.
Angela Simoes:
Makes sense.
Alexander Voets:
Your car and my car as we sit in here is parked in our driveway or parked at work, and that is what passenger car vehicles do most of the time is being parked. So when we want to electrify, we want to take emissions out of the air. Looking at commercial vehicles is really the most efficient way to do it. And the motivation for going electric is clear. It's really two things. One is to reduce emissions and the other one is to comply with regulations. And different companies have a different motivation, be it more on the reducing emissions or more on the complying with regulations. You can think, especially companies that are in the public eye that have consumer products, they oftentimes have general sustainability goals and take an emissions out of their transportation is a big factor there. But then the vast majority of companies, of course, it's not in the public eye every day.
You don't see them every day. So for them, the vast majority of the motivation is to comply with the regulations that are in the market. Right now, we see them in California the most, which is why that's the most action happens in California. But those two tend to be the biggest items. But when we talk about motivation, we've got to talk about problems of course as well. And there's a lot of challenges when it comes to electrification. It is a new technology. There are new players, there are new stakeholders in this whole electrification journey. Customers have a lot of questions. The capability of the vehicles are different, the prices are higher, the lead times are longer. So a lot of companies are trying to navigate these waters and see what all the options are that they have, and it's the big trucks and the small trucks to find the right candidates to start with.
Angela Simoes:
Right. You mentioned that there are so many more trucks that are on the road more frequently, so it's a great way to start because as you said, our cars are mostly sitting in our driveways and you think about it, sure, I mean just with Amazon delivery trucks, right?
Alexander Voets:
Yeah.
Angela Simoes:
They're like little beans-
Alexander Voets:
See them all the time.
Angela Simoes:
All over the place, right? But then there are so many other types of trucks. So do construction vehicles fall into this category or-
Alexander Voets:
Yeah. Essentially almost every vehicle that is paid to be on the road all the time. And it's not the same difficulty level and complexity for every vehicle. That's why most of the vehicles that people think of for electrification first are those back to base type of operations or what we sometimes call the hub and spoke type of applications. So when you think about a grocery store delivery, for example, there is probably going to be one warehouse, one distribution center that goes to the same 10 supermarkets every week, and it's the same route a week over week, over week, and it comes back to the same location and can plug in there every day. Those are nice use cases for electrification because you know the miles, you know how long they sit to be able to charge and so on, so forth.
Other use cases like close to coast, moving transportation, it's probably a lot harder to electrify, right? Because one time you drive from New York to LA, the other day you drive from LA to Michigan or what have you. So that is certainly a lot harder, especially while public charging infrastructure doesn't exist yet for commercial vehicles. So when you think about electrification for commercial vehicles, a big, big question will always be where to charge them. And while we see more and more public charging infrastructure for passenger cars, it is certainly very difficult. I've done it before, but it's certainly very difficult to get a big class a truck into a parking spot that was designed for a passenger.
Angela Simoes:
I imagine that you'd have to take up maybe two or three spots depending on where the port is, because even as an EV driver myself, the ports aren't always in the right position and you have to back in and sometimes I'm parking a little to the side or at an angle and there's a lot of design work that needs to be done. But it's a good point that you make about charging infrastructure, right? So even if it's a smaller truck, it's still a truck, right? And it still might not fit into the regular charging infrastructure that's out there. So between the desire to electrify, but then also the regulations, a lot of companies are probably thinking, where do I start, right? What's the first step? I don't even know what to think about first. So what are your tips on that aspect?
Alexander Voets:
And that is an excellent question. And you're right, a lot of customers are exactly in that boat. There is so much information on different vehicles, on different technologies, different battery technologies, different charging providers. So the question of where to start is certainly super important. I always recommend a couple of steps to take. I always say determine what is your driver first. We talked earlier about the motivation, be it the sustainability, be it the regulations, whatever the driver is for a specific customer, just be honest about it because that will determine a lot of decisions down the road here. As an example, if you are really concerned about sustainability and being environmentally friendly, then maybe not only the charger, but maybe stationary battery storage or affordable types, solar power, those things might all be important for your overall plan. But if your goal is to meet regulations at the cheapest possible price, then maybe those discussions are not important to you.
So being upfront and honest to yourself about why you're doing it is certainly an important first step. Then the second I would say, know your details, meaning the details of the customer that's actually asking for this. Know how many vehicles are in your fleet, how long they drive every day, how long they have to charge every day, do they come back to the same base? Do they all go out at the same time? Because these will all be important considerations when it comes to selecting the charging infrastructure, when it comes to selecting the right vehicle and so on and so forth. So having all that information ready certainly is going to speed things up quite a bit. And then I would say create a budget. So understand what some of these things cost, what some of these vehicles cost, get some quotes from your OEMs, get some quotes from your charger providers, make some estimates about construction and really get a grip on what you think the budget for something like this is.
If you look down on the piece of paper, you will see it's a very large number and it's not at 3% more than last year or 5% more than last year. It is significantly more money. Every new technology costs more money, and in this case, electric commercial vehicles were still in the teenage years. So it is an expensive technology. And because it costs so much money, I would also say assign a champion, assign either a project manager or somebody that has it as their full responsibility to see this through from start to finish because you will see that there is so many more players involved. You might want to have an incentive. You have your facility manager, you might have electricians, you might have utility companies. So there is a lot of coordination that is needed. And then I would say plan. Plan your vehicle availability.
When will they come? How long do you need for the upfits? How does that jive with when you need to meet regulations? What is your infrastructure lead time look like? Which locations to start first? And really think it through. Once we have a champion assigned and they have a little bit of authority, of course they can drive this a lot better. And then I would also say partner if needed. There is no shame in trying to understand more information or get more information from either your peers, from your suppliers, from your customers. It is a very, very big field and there is a very, very big shift and there is no shame in trying to get help from outside. Sometimes that help is paid help and sometimes that help is free help. And then the last step, I would say start and start learning because I always recommend because it is so intimidating, you're much better off starting with something small and then learn in the process and be so much smarter when you scale up than to be intimidated away from even starting.
Angela Simoes:
I think there's some really great specific steps to follow. I almost might put the assign a champion at the top, right? Because that person is going to be putting together the budget and the plan and the budget can change, right? So even if you got some quotes at the beginning of the year, by the time you're ready to execute, prices may have gone up, right? And then there's so much research that has to be done. The type of trucks that you have, are they even available in electric version, right? And if they aren't, will they be? And if they won't, then I guess you have to look at a new type of truck, right?
Alexander Voets:
That's exactly right.
Angela Simoes:
If that's going to be required by the state, right? Like is if the state says you have to be electric, then you can't just say, "Oh, well they don't make a truck that I need an electric version." You have to find a different kind of truck. So I mean there are so many different pieces. And then that's just the hardware part, right? And the planning. We haven't even touched on the management and the software part, right? So a lot of these companies are already using fleet management software. They're managing their fleets in a few different ways. Perhaps they're still using Excel spreadsheets, I'm not sure. But let's talk about what are some of the new things that they're going to have to start tracking and then that might cause them to have to change up their fleet management system or systems, right? So what are some of the new things that they'll have to keep in mind that they'll have to monitor in this new age of electrification?
Alexander Voets:
Yeah. So I think you hit it right on the head. It's certainly information and tracking information and learning from that information becomes more and more important. Today, of course, we do have telematics systems, and when I described earlier about knowing your details, knowing how much your trucks drive and where and how long, that is where most companies will look at is their telematics data, right? See what the daily operation is, how many miles they clock and all that stuff in order to then determine who are the best candidates for electrification. And then when it comes to electric trucks and they're actually in the fleet, and with all these information, all that information that's being generated and all the education that is necessary, customers will certainly look at their telematics information to see the uptime of the vehicles, to see how the drivers drive the trucks. Are they very heavy footed?
Are they going over the speed limit? Are they always running it down for 0% state of charge? But then also determining which drivers are very efficient drivers, the kilowatt-hours per mile that the trucks have, which is the electric equivalent of the miles per gallon on the combustion engine. That is of course determined by driver behavior, by the topography, by a lot of different factors just like it is on combustion engines. But on combustion engines, we have a lot of information already. We have a lot of reference points. On electric trucks, customers still want to create that and telematics systems and understanding where the trucks are, understanding the operation and being a little bit closer to the day-to-day work that they do is going to be extremely important there. And that's the goals for the truck, but also for the charging station because if the charging station is down, of course the truck doesn't charge. So having uptime on the vehicle and on the charger of course of both important.
Angela Simoes:
And that knowing where to charge, right? Because if you can't use a public charger, then is it up to the company to establish or charging stations in different locations or it's that you have to be able to do your route and get back home to the depot in order to charge. I mean, those are some considerations too, right? Or do truck companies start partnering on setting up truck charging stations that serve multiple companies? I mean, there's a lot of these things to consider.
Alexander Voets:
Oh, yeah. And there is a lot of companies that are creating new business models today and there are a lot of companies looking at it from multiple different angles. And that is also where we come back to our initial question when you said the large trucks versus the summer trucks, because they potentially need different infrastructure to be able to operate. So especially the larger trucks will usually only operate on what's called DC fast charging. And those charging equipments are extremely expensive. They have of course, the benefit that they charge very, very fast. And on some of the larger vehicles, that's the only way to charge them because it would be unreasonable to charge them on what's called AC or alternated current charging. And for commercial vehicles, there is minimal charging infrastructure publicly available today. So these DC fast chargers that we sometimes see on the back of a big grocery chain, or we can find them online, those are all intended for passenger cars.
And do you have the problem that we discussed earlier that you can't really [inaudible 00:17:59]? So if customers electrify these large vehicles, they need to look at their own charging infrastructure, which is expensive and takes a lot of time to put into the ground. You need to have a utility company on board. They need to assess that you have enough power at your location and so on and so forth. The big advantage we have on the rising truck and the smaller class 4 or 5 vehicle here is that not only can you use your DC fast charging equipment that you might put in place for larger vehicles anyways, but you can also either in the meantime or as a final solution use AC, alternating current charger equipment. And those are very similar chargers that all of us know from our passenger cars when we plug them in at our garage at home.
Of course there's commercial grade quality for commercial vehicles, but essentially it's the same power that is needed there, and those charges can get put into the ground a lot faster. You're talking about weeks of lead time and not years, and the cost of these are significantly, significantly smaller. So as fleets are back against the wall because they either want to make a meaningful change here quickly with electric trucks or they're up against timelines for regulation, that is what we consider the most efficient pathway to compliance is to start with a smaller vehicle like the Verizon truck here, start with AC charge equipment that can be put into place very, very quickly and then start learning that way as you make decisions at scale for much larger vehicles.
Angela Simoes:
Is there ever a situation where the trucks would go home with the driver and be charged at home, and so then the company would then look at installing the appropriate charger at the employee's home? And then of course, there's a whole other element to how does the employee get reimbursed for the energy and that sort of thing. But I mean, when there's a lack of public infrastructure to charge these, that could be an alternative, right? I just don't know that you really want to park a cement truck outside your house. However, if you have the room, you might consider it. I don't know, I'm just curious if that's an option.
Alexander Voets:
It does happen sometimes on the larger trucks, not so much, but on smaller vehicles that sometimes double as a parts truck or maybe they are a manager type of vehicle or a sales type of vehicle, that does happen that customers take these vehicles to their personal home and then add out from there. But on the larger vehicles, it's very unlikely. One thing to note though, on the smaller vehicles, even though we set for the large trucks, it's very difficult to get them in parking spots for passenger cars. On the smaller vehicles, if you are in a pinch and you need to top off somewhere, that is of course a lot easier to get a vehicle like that into a passenger car parking spot. And then for the cost reimbursement, and of course the devils is in the details sometimes, but luckily the charge equipment is usually smart enough to really identify how many kilowatt-hours were the participants and potentially even if the rate is loaded there, how much that actually costs. So there is some ways around that as well.
Angela Simoes:
So one question I'll throw out to you that we actually didn't really prep for, but I feel remiss if in today's day and age we're not mentioning AI in some way, shape or form. Are you seeing AI or automation find its way into the charging or transition of the smaller class of trucks to electric?
Alexander Voets:
Yeah, I mean, I think AI makes their way into-
Angela Simoes:
Everything.
Alexander Voets:
All aspects of our daily life, right? For trucks specifically, we certainly see a lot more automation happening, usually for safety considerations, right? So we have more cameras on board, we have more radars on board. And of course, through AI and machine learning, those sensors and the backend of those sensors get more and more or smarter and smarter and therefore getting better and better at preventing accidents or at least mitigating them to a high degree. And certainly when it comes to the optimal charging, when it comes to charging at rates that are lower than the peak rates, that's already something that happens today through what's called smart charging. But AI and machine learning as we go into a more and more efficient way of transportation will certainly play a bigger and bigger factor as we move forward. We talked about electrification mainly today, but of course, autonomous driving ADAS systems are similarly improved as we move forward to ultimately make these vehicles safer and safer and more and more affordable to operate ultimately. But the upfront cost on most of these technology items is usually pretty high and the payoff comes through the operation.
Angela Simoes:
Thank you for raising the cost issue again, because one question I did want to ask and I forgot, was I imagine there has to be some type of subsidy or grant program through the states or the federal government, especially if they're issuing regulations and stating you have to make the transition. And so what kind of programs are you aware of and where can companies find out more information about that?
Alexander Voets:
Yeah, so there are certainly incentives that help companies overcoming the higher purchase price of not only the vehicle, but also the charging equipment. I will say every incentive is different. There are some incentives that are very prominent and have been around for a long time. The [inaudible 00:23:55] program in California is one of those examples. I will warn listeners though, that only looking at the incentives is the wrong approach because the old saying goes, "You can't mandate what we incentivize or you can't incentivize what we mandate." And that is also the case here to some degree. So there is a regulation in California, it's called the Advanced Clean Fleet rule, that dictates that customers, drivers, fleet operators need to have an increasing percentage of their fleet to be zero emission, which essentially means electric. And there are also incentives to help them overcome that purchase price.
But you can't double dip, essentially. You can't take the money and then also counter it towards the compliance regulation deadlines. So I always advise customers, especially also when they look at their budget here, have real numbers, the actual numbers before incentives get applied. Every incentive that you get, makes your project cheaper and better and more efficient. But don't look at the incentives as the only driver here. The driver should be either the emission reduction or the compliance. The financial aspect is a big aspect here, but the electric vehicle will not be cheaper than your combustion engine vehicle.
Angela Simoes:
Right. So there will still be a significant investment needed even after the incentive. So yeah, I think it's a great point that you make about being realistic. So we're coming to the end of our episode, and so there's clearly... I feel like there's a lot to be done. It almost feels like with the smaller trucks, we're at the stage where we were with passenger vehicles maybe a few years ago, right? So it's growing, right? There's a lot of possibility, but also a lot of problems to solve. And so what's the most exciting thing for you, and what do you think will happen in the next 12 to 24 months?
Alexander Voets:
So first of all, it is an exciting time, right? We are changing an industry. There is a lot to do. There's a lot to do for a long time. We talked about all the challenges with vehicles potentially being heavier than being more expensive, it being more difficult to put in operation. But the great thing is once a customer, a driver is behind the wheel of these trucks, they love them. They're quiet, really, there's no vibration. There's instant acceleration, instant torque. You have regenerative braking and therefore putting energy back in the batteries instead of wasting it on an engine brake. So drivers don't smell like diesel or other fluids when they come home. It's less fatiguing on the body with less vibration. So that is the ultimate end goal always. It's just how easy it is once you overcome the problems and how enjoyable it is to drive these vehicles once somebody's on the road. I can tell you I got a lot of people into an electric truck that didn't want to buy them.
I didn't get a lot of people out of an electric truck that didn't want to buy them. So once they are in the vehicle, there is nothing to complain about. It's a great vehicle. And once we navigate all these other challenges that we have in the truck electrification, I think it's going to be a win for everybody involved.
Angela Simoes:
The point about being less fatigued as a driver didn't even think about that, but it's absolutely true, right? Like how many people do you know that do drive a lot and you just get home and you're just so tired? Like all I want to do is sit and driving does take a lot out of you. And so if that can be minimized, I mean, that's amazing.
Alexander Voets:
And especially for vehicles that drive in urban environments a lot. And in California, of course, we have a lot of big cities here and have a lot of traffic. So the drivers that drive these vehicles, they also tell you they are in it and they are passionate about it for the sake of their children and the sake of their grandchildren. So if they five, 10 years in the future when electric trucks is a normal thing for us to be able as a driver to say, "Hey, I was one of the first people to sit behind an electric truck and drive this shift in the industry forward," it's a pretty big deal.
And whenever we have these ride and drive events or we have customers over and show them the vehicle, and of course they can drive the vehicle around, sometimes they're a little bit timid and say, "Ah, no, I don't need to drive it." And I always tell them, "You join by sitting behind the wheel of this electric truck. You join a very exclusive small group of people that have the privilege of driving electric trucks. Don't throw that privilege away. It's a big, big deal."
Angela Simoes:
Well, and I can't think of a better note to end this episode on. So thank you so much, Alexander. This has been just such a great conversation, and I hope that our listeners found it informative and exciting. I mean, like you said, it's a very exciting time to be in this industry. So thank you so much, Alexander. It was a pleasure.
Alexander Voets:
Thank you very much.
Angela Simoes:
Thanks for listening to the Mile Marker podcast. If you liked what you heard today, give us a like, share this episode on social media and even take a minute to give us a review on iTunes or wherever you listen to your podcasts. Be sure to subscribe to our channel so you can join us for future episodes full of insights and ideas to keep the mobility industry moving forward.