Summary:
Prem Patel hosted Vartan Badalian, Director of U.S. Transportation Programs at the Center for Sustainable Energy, to discuss EV market trends and challenges. They highlighted the importance of dealer education through programs like Electrify IQ to boost EV sales, addressed price volatility and the rise of EV leases, and explored barriers to medium and heavy-duty fleet electrification in the Northeast. Innovations like electrified trailers and the high uptime of commercial depots were noted as solutions, while misconceptions about EVs, such as their suitability for long-distance travel, were dispelled. The conversation reflected optimism about increasing EV adoption and market growth.
Transcript:
0:10–
Prem: Hey everyone, and welcome to Episode 5 of Charging into the Future with Synop. I'm your host Prem Patel, and today we're thrilled to have Vartan Badalian as our guest. Vartan is the Director of U.S. Transportation Programs at the Center for Sustainable Energy, and previously he held a key role at the Trellis Group. We're super excited to have him today. Let's get plugged in.
Prem: Vartan, thanks for joining us today, man. How are you doing?
Vartan: Doing great. Thanks for having me, Prem.
Prem: Of course. And so I'd love to get an idea of your background for the audience. How did you find yourself in this kind of EV and transportation industry?
0:44–
Vartan: Yeah, of course. I started out always knowing I wanted to be in sustainability in some form or another. So I went to undergrad focused on sustainable energy. At that time, renewable energy was kind of becoming what the EV industry is right now. They're looking around 2013, 2015. When I graduated or upon graduation, I kind of knew I wanted to get a more advanced degree, just didn't know what. So I chose to go to law school, chose to become an attorney. For reasons I didn't understand then, but I kind of know now what led me down that path. And it was during law school that I saw what was happening in transportation happened in renewables when I was an undergrad. So transportation was just becoming something to talk about for emission reduction. Tesla had just launched a Model S after the roadster, and it was really starting to grow. And I saw the road ahead. And after that moment, I fully committed myself to transportation decarbonization. And really upon graduating law school, having some very clerkships and opportunities and just working in the space, I kind of wove through really exciting positions, really brought in my opportunities beyond transportation or beyond electrification and transportation in some form for some roles with all the industry. But now I find myself back in electrification in my current role.
1:54–
Prem: Awesome. What is your current role?
1:56–
Vartan: I'm at the Center for Sustainable Energy as a Director of U.S. Transportation Programs on the East Coast, where I lead all the state-based programs And for those who don't know CSC, it is a nonprofit that really drives the mission of decarbonization at its core. It really works with states to help administer, set up, administer, and roll out EV incentive programs and solar programs. I focus on the transportation industry on the East Coast, as I said. But we also have various other mechanisms and tools as well. Like I run, for example, a dealership certification program called Electrify IQ, which is super key. A dive into that more because dealerships as we know in this industry can be a potential unlocker of EV sales, but also can be a hurdle or a blocker of EV sales. So really find myself enjoying that work.
2:45–
Prem: Let's dig into the dealership section because I've seen a lot of dealers and hearing a lot of dealers going through this electrification process and there's some mystery around it as well. So maybe can you break down what are you seeing in the dealership area right now in terms of electrification?
3:01–
Vartan: Yeah. Happening, especially now, I think more so than years before. Obviously there are some pockets of the U.S. That are more advanced than others, and that equates to dealerships being more advanced in their knowledge and education about EVs. Various OEMs are more advanced than others, which incentivizes their dealers to become more educated. But generally speaking, there's still opportunity for dealers to get more educated and feel more comfortable about talking about EVs, because historically, as we're seeing until this day, I think we still see certain dealerships incentivize buys or push what they've always sold, which is internal combustion engine vehicles, easier to sell that. Even though electric vehicles now are comparable with gas vehicles and there are good opportunities to sell, to sell vehicles, the right range is there, and the right charging infrastructure is around at this point already. So the opportunity is there for dealers to sell. I think they're not comfortable enough, which is what we decided to do. So we partnered with NADA, the National Dealers Association, and we kind of built this software tool from the ground up called Electric By IQ, which is designed 90 minutes entirely online, super quick and easy to really educate dealers. I actually took it myself to see what it's all about. And I learned a few things given being in the industry this long. So it's definitely useful. And we're seeing as dealerships roll through that certification and get certified, we're seeing testimonials come back that it's helped them sell EVs faster, giving them just overall confidence to sell, which I think is the key here. If you don't feel confident talking about something, you're not going to... The person receiving that information is not going to be confident in the product itself. So it's definitely been a change-maker, but there's more room to be done even in Electrify IQ. So we have a ways to go until we educate dealerships. Yeah.
4:36–
Vartan: And education is one piece, you know, in the news in the past six, eight months, there have been talks about just volatility in prices of electric vehicles, you know, seeing what happened with Tesla. Is that a fear for dealerships as well, that they're going to get vehicles on their lot and next thing you know, the price you're going to drop and they're now stuck in a financial situation that doesn't make sense for them? I certainly think that's probably a thought on their perspectives. But at the end of the day, also, if they're getting the vehicles from their OEMs to their lots, then that's a secondary thought, right? Because the vehicles are coming, and they can sell them. If you hold onto them for too long, then that becomes a problem. Better interest to sell them quickly and get them off the lots so people can have them in their hands. The secondary used vehicle market is a whole different conversation for EVs. And we've seen volatility there. The price dropped, as you just mentioned. Bringing down the used vehicle market. But I think then we're seeing data around how leases, EV leases are up significantly to that exact point as well. So dealerships should incentivize and work on EV leases then because we've seen a huge skyrocket there. And also leases still can take advantage of the EV tax credits that exist at the federal level and some state levels. So it's a win-win-win for the consumer. It's a win for the dealership and a win for the OEM just to get vehicles The used vehicle market can take care of the rest for itself like that.
5:51–
Prem: So you cover the Northeast transportation sector. What are you seeing in some trends right now, specifically with commercial transportation in the Northeast and maybe overall across the country in commercial transportation right now?
6:02 —
Vartan: Generally speaking, I think we're seeing that the fleet space is both slowing down from the EV adoption, and becoming more cautious. But I think it's a stronger value proposition than for the individual consumer because you depot charging infrastructure, if you're talking about medium and heavy-duty, more reliable charging infrastructure experiences, you can control the entire ownership experience for the vehicle. And as we're seeing now, more options are coming up for medium and heavy-duty fleets. Light duty has always been great for some time now, the adoption, sales vehicles, pharmaceutical vehicles, those are all light duty sedans and trucks and those have never been better before than right now. So we're seeing a lot of adoption there, I think, but the medium and heavy duty has been slower, but we're picking up because of what I just said. It's just making sense. Now just the financials have to square out, meaning the ownership experience has to just be right. And sometimes with the vehicle's range that currently exists for some trucks being 250 or 300 miles, you really can't have just a vehicle that does just one battery route because it's not practical from an economics perspective. So, and then charging. I've spoken to a lot of fleets generally in my career who have said, that while the vehicle technology is right, we actually cannot justify incorporating charging dwell times into the business model because that is just too much of an economic hit. Even if we bake into drivers taking their rest and so forth, it's just not a financial move right now that they can adopt. So I think we're seeing a lot of kind of interest is there to decarbonize fleets, but the financials have to align, which I think is one thing I want to kind of bring up, which came to my mind I think that is where we're entering into the space for fleet adoption and electrification, is that financials become the first conversation point and sustainability is a secondary effect of it. And one example of that is range energy. I think they've popped up in a lot of people's focus. They are basically electrifying trailers for trucks in a very intelligent way. Their CEO and founder is a former Tesla employee who launched the Model 3, so he's very much engineering electrification focus. And that business model, I think speaks to what the industry needs to have more of, which is the financials of electrifying the trailer reduces the drag weight of the trailer, which reduces the fuel costs and the fuel needs, which in turn is better for sustainability as well. But the financial mechanism is the primary reason why someone would adopt an electrified trailer, but it has a benefit to the environment. So I think that's where we're heading as we kind of wait for medium heavy-duty trucks to really pick up traction.
8:33–
Prem: Yep. Dollars and cents and the overall total cost of ownership for these vehicles. Outside of upfitting trailers, do you think we're going to get to a point where prices of vehicles are going to come down, prices of chargers are going to get down, and you're going to see a faster TCO reduction compared to the internal combustion and diesel counterparts in the space today? I think we have to.
8:54–
Vartan: It's inevitable for technology adoption to bring down those costs. It's just a matter of when it's going to happen. But if it happens, as for sure, in my perspective, I think everyone. We're seeing it on light duty. I think we're inching closer and closer to, I believe it was 100-kilowatt battery capacity. That was like the comparison between ICE vehicles and electric vehicles for sedans and trucks. That same evolution will come to the medium and heavy-duty space. It'll just take a little bit longer because we started out a little bit later for trucks, but it's going to happen. And once the vehicle's price is as comparable to a diesel or gasoline vehicle, sticker on paper from the beginning, then the TCOs are even far greater in the ownership experience because then you have significantly fewer maintenance costs, less fuel costs, so it just becomes way more practical of a solution and option to have, which is around now driving down the cost as much as we can. And I think a lot of the incentives will help in that space. We're seeing a lot of government announcements come out to help support electrification. The one problem I have right now is that I think everyone focusing on California and fewer investments happening in other parts of the US to decarbonize trucks. But even there, I think we're now seeing some people kind of speaking about, well, what about everywhere else besides California and to incentivize EV truck adoption there. So it's just a matter of the journey ahead. We're losing time from a client perspective, but we're making progress. If I look back half a year or two a year ago, we're definitely further ahead now than we ever were.
10:24–
Prem: Yeah. We're seeing LCFS programs that are really well known in California and the West Coast start making their way to the Northeast over time. And then you layer on certain things like smart charging, of course, carbon credits, of course, incentives like the IRA and policy to really start lowering the TCO. I think we're heading in the right direction. Fleets are starting to recognize that. Let's take also your background and just see what's happening on the residential public side and see what's happening on the commercial side. I want to talk about charging. And there's a Bloomberg article that came out two months ago that One in five public chargers are usually down. And that's not a good sign for this industry, especially when you look at uptime and this idea of uptime. I know there are many definitions of uptime. And now let's take a look at a commercial depot. A commercial depot is usually around 98% uptime. And so there's a stark difference between the public charging infrastructure uptime and the commercial depot uptime. What's your take on what's happening in the public sector right now when it comes to charging and making sure that a consumer can go to a charger and it's ready and available and ready to charge your vehicle successfully?
11:28–
Vartan: Yeah, that stark difference I think points to one obvious point, which is that the fleets have a financial interest to keep the chargers up and running constantly, which is why it's driving that huge success rate. The same needs to equate to the public infrastructure side where historically maybe there's been less investment in maintenance and ensuring stations are kind of operational through and through with high uptime and more interest in just the deploying and getting dots on a map to show growth of the industry. I think that same kind of fleet approach that we just said is what maybe Tesla has done for his entire lifetime with supercharger deployment, which historically has been very high on uptime and reliability and is known for that. I think they've dedicated financial dollars to ensure that stations are operational and running on a per site basis, because there's a financial interest, because they were locked for their just vehicles. So they had to have these stations for their vehicles to charge and a proprietary technology. Actually, I mean, this is a very, very personal point to me because I've dedicated a lot of my career to this because I think without adequate, reliable, e-fuel charging in a public setting, we won't actually see the adoption S-curve that we actually want in the timeline that we want it to. We're definitely seeing a lot of improvement. I actually just came back from BIRSCH24, the climate tech conference where ICF Climate Center and Center for Sustainable Energy and myself and Stacey Noble, co-hosted a charging workshop on improving uptime and reliability for the public network. We actually held the same workshop two years ago at Verge, and we did it again with the right folks, Tesla, the joint office of Android Interpretation, Electrify America was there, BMW, and so forth and so forth, to really talk about this issue and see what we've done. And a lot of it just comes down to, I mean, it's a whole host of things. I can't probably talk about it right now in one answer, so we can dive into it further, but it is really about ensuring redundancy, enough stations at a location to sure if one goes down, people could still charge. It's around just being thoughtful about putting dollars to maintenance as opposed to putting dollars to deployment of new stations. So all those things, but without adequately having stations up and running always, we won't see the S curve on adoption.
13:30–
Prem: You could have a whole episode speaking of uptime, even the definition of uptime and how people will define it. And how do you define uptime?
13:38–
Vartan: I mean, there's a whole host of ways to define it, right? I think depends on, I don't want to say what I believe is firmly right, but I think if you look at the entire site, personally, I think we need to have eight to 16 chargers per site for DC fast charging. You look at the whole site and then there should be an uptime measurement based off the entire location. So if you look at 97% is what you want to go for, then there should only be 3% on a per site basis that are down at any given point in time because that redundancy will protect it. Now that's a evolutionary point because I don't think we should be striving for on a per location basis to have certain charges is always broken. We should strive to have charges constantly up and running and we should be achieving 98%, 99%, even a hundred. But this is the real world and this is hardware that has to communicate with the vehicle. And there's obviously interplays here that are complex. So I think on a per site basis is probably smart for right now, but I know this, that varies from charging company to charging company, from standard to standard and from the joint office to others. So it is a rather complex problem. To address, but I think we have examples of successes that have been working for some time now. And I constantly point to initially Tesla and now Rivian, both have really strong uptime on their networks. Rivian is a much smaller network, but did it because Tesla did it and it worked well for them and they couldn't rely on the public network. There's a financial interest to keep these stations running, which historically has not been the case because charging companies have been given tax dollars and just general funding to deploy less interest on keeping decisions running. But I think we're seeing that change now happen. Nevi is a good solution there, driving that conversation forward, collecting data. Hopefully that data gets actually analyzed and reported out. And then companies that have not met the standard do not continue to receive funding. That is my hope that happens. But it is a complex one. Actually, one point that came to my mind just even at Birch that came up in conversation is that now that we're seeing such more adoption in EVs and more vehicles on the road, the financials actually penciling out for people of our companies, charging companies, to really ensuring maintenance of these stations, because now there's a financial interest to keep them going, which I think maybe two, three, four years ago wasn't the case because there were less EVs on the road. My personal opinion, charging companies should have maintained the stations as if they were vehicles on the road two, three, four years ago, because now we have a bad taste in our mouth, and to really curb that bad taste is going to take some time.
15:59–
Prem: There are a lot of “bad” tastes in people's mouths sometimes around EVs. That you see in the news, especially sometimes in the cold weather that, you know, I can't drive my EV in the cold weather. And you know, there are a lot of that's untrue as well. What are some common misconceptions? Maybe bring up one common misconception about the EV industry that you'd like to clear up here.
16:18–
Vartan: I think the biggest one is that people think they can't drive a vehicle long distance, or they think they can't go on a road trip with the vehicle. They really don't conceptualize, from the conversations that I have with individuals, that a vehicle right now today that you purchase, which has 250 to do 300 miles minimum is actually adequate enough for your daily commute and your potential road trip commute. That is actually not the case. Now it's a different experience depending on which vehicle you pick, where you charge, with which provider you charge, which is a little bit of a learning curve that people need to accept and learn if they want to. But the notion that the vehicle and the industry and the charging infrastructure is not built out enough right now for me to have my life is just not true anymore. For example, I mean, this constant gets mentioned, which is unfortunate, but the Tesla is the primary example people kind of leverage. But if you go down the Tesla route, it really is a far better driving experience than a internal combustion engine vehicle. It is actually mentally, in quote unquote, like brainless. It is really efficiently designed for you to just drive and get to where you need to go, plug it in charge. The same is being built out for a non Tesla vehicle in terms of route optimization and route navigation with charging spots in the route. So it really is actually a pretty simple and far better user experience than going to a gas station where historically you do not want to be at. In my prior role, this made me think about, I was actually writing at Greenbrace, which is now called Trellis Group. And one of the articles I wrote about, which is why are we holding on to the gas station experience? Why is that such a fond memory for Americans? Because historically, or even if you just look at the gas station experience, it is not a pleasant one.
17:56–
Vartan: You do not want to stay there more than four or five minutes because of the fumes. Just the ambiance is not great. It is not a pleasant experience to have. Whereas if you turn now to the charging experience, while the wait time is potentially 15 to 20 minutes, the experience is far greater. There is no fumes. The overall atmosphere of the space, while maybe sometimes simpler than a gas station, usually does have convenience stores, clean bathrooms and whatnot. And you do naturally just want to take time to rest. And it is just a far better resting experience. So I think this mentality people need to kind of get over, but they will not get over it unless they experience it for themselves. Word of mouth only can go so far. They need to actually be in an EV, take that trip, drive it, and see what it's really like, Completely agree. Really, really agree on that point. What do you think is the most exciting success story in EVs over the past two years? I think the fact that we have so many vehicle options now that are above 300 miles. I would say successes on the charging infrastructure side is great. I'm going to say two, charging and on the vehicle side. The vehicle side, we have a whole bunch of EVs now that exist that are in the 30 to $40,000 range. Pre incentives, post incentives, you're even pushing that further down that are just great for all types of consumers. And we have not had that. I remember when I first started my career, we were at 1% EV adoption or less than 1%. And now we're pushing 10, little bit past that potentially at this point. So the market is definitely growing and this notion that it's stalling or consumer sales are stalling is not true and there's data around that that can be seen. So adoption because the vehicles are there is great. On the charging side, I think having Tesla's charging standard open up to all of their OEMs and all of their vehicles is a tremendous opportunity now that we're going to see first with these adapters. If those of you who don't know, Tesla has rolled out their charging standard to other this year into next, it's really more about adapters and then come integration of the charging standard built into the vehicle. So no adapter, you just go to a supercharger, you plug in like any car, like any Tesla vehicle, and you start charging seamlessly. I think that's going to be huge. Now there's things that need to be squared away with like all vehicles having the port on the right side, the cables reaching, cars not taking up more than one spot, which right now is kind of happening for like Ford F-150s have to take up two spots, for example, and so for it. Once that all gets squared away, I think we're going to see a massive spike. Consumers will start realizing that they're getting access to this incredible charging network that has historically been incredible. And I think Tesla will continue to keep it the way that it has been. I think adoption is going to rise. I think that is a massive success story, which as we start seeing it kind of roll out, it's going to increase adoption.
Prem: Amazing. Vartan, if someone wants to speak with you about the Center for Sustainable Energy, how can they reach and what's the best way to do so?
Vartan: Find me on LinkedIn. I'm there. Type my name, shoot me a message, and we can chat.
