Insider's Guide to Energy
The Energy Industry is uniquely evolving as traders are under increasing pressure to manage costs, cash, limits, and risks. The Insider’s Guide to Energy Podcast addresses current and emerging challenges business executives face daily through stories shared from peers and industry experts while covering topics such as innovation, disruptive technologies, and emerging trends.
Insider's Guide to Energy
36 - Revolutionizing Fleets: Electrification, Battery Swapping, and EV Charging Insights
Join us in this compelling episode of the Insider’s Guide to Energy EV Series as we sit down with Giorgio Delpiano, former Senior Vice President of Business Mobility at Shell, to discuss the electrification of fleets and the transformative power of EV infrastructure. From battery swapping for trucks to lamppost charging innovations, Giorgio shares insights from his global perspective, providing a deep dive into the strategies, challenges, and opportunities shaping the EV landscape. Discover how industry giants like Shell are driving the energy transition and learn why fleet electrification is central to a sustainable future.
Giorgio highlights the evolving trends in key markets such as China, Europe, and the U.S., shedding light on how different regions are adopting electrification at varying speeds. Explore how China’s leadership in battery swapping and high-power EV hubs is setting a benchmark for the rest of the world. Meanwhile, we uncover the crucial role of fleet depots, the economics of EV infrastructure, and the unique solutions like lamppost charging that aim to democratize EV adoption for urban residents.
Finally, we delve into the future of EV business models, addressing challenges such as infrastructure costs, standardization, and the consolidation of the EV market. Whether you're an industry expert or an EV enthusiast, this episode provides a fascinating look at the innovations driving the mobility revolution. Tune in to learn how electrification is reshaping global energy consumption and what it means for businesses and consumers alike.
We were pleased to host: https://www.linkedin.com/in/giorgiodelpiano/?originalSubdomain=uk
Visit our website: https://insidersguidetoenergy.com/
Transcript
00:00:00 Giorgio Delpiano
Fleets matter because they consume about a third of all the energy.
00:00:04 Giorgio Delpiano
And we are going to talk today from my global perspective about how fleets are electrifying from battery swapping for trucks to lamppost charging here. The podcast.
00:00:19 Chris Sass
Your trusted source for information on the energy transition. This is the Insider's Guide to Energy podcast.
00:00:31 Chris Sass
Welcome to another edition of the Insider's Guide to Energy EV series. I'm your host Chris Sass, and with me is my host, Niall Riddell. Neil, we've got an interesting topic today and an amazing guest. I'll give it to you to.
00:00:42 Niall Riddell
Start the show. Yeah, we're in a fabulous position today because we have a a true industry expert.
00:00:47 Niall Riddell
Who's going to talk to us about the global position on immobility? So today we have with us Giorgio Delpiano, the former SVP of business mobility from Shell. Welcome to the show, Giorgio.
00:01:00 Giorgio Delpiano
Thank you, Niall. Well, it's a great introduction as as as you mentioned, I've been for a long period of time there with your business mobility shell, which is the payment business of shell for businesses, but also is already charging activities for businesses. So hopefully I can share a few insights with yourselves.
00:01:19 Chris Sass
And I think some of our audience are going to be sceptical by by this introductions, we're all pumped about EV's or an EV show, and then the word shell comes out. So I think when we start out and yelling and and I hope you can explain to our our audience why you and our pumped about having shell on the program.
00:01:33
Yeah.
00:01:34 Niall Riddell
Well, for me, Chris, she's been in the mobility landscape a lot longer than many of the rest of us. We are starting this new transition to E mobility and Georgia has spent a bit of time looking at that. So I'd love it if you could introduce shells, take on mobility and shells, take on that electric transition.
00:01:51 Giorgio Delpiano
Yeah. Thank you. Well, shell is the largest player in the industry in the retail industry with 47,000 service stations in 80 countries. So for more than 100 years have been serving customers, motorists in across.
00:02:08 Giorgio Delpiano
Developed and in the last five years, it started the material investment in EV charging and probably now, after Tesla is the second largest player in EV charging. So I think that, you know the fire, the shell knows very well how to serve motorists, how to operate stations is a is a good fit for what we're going to do.
00:02:29 Giorgio Delpiano
Today.
00:02:30 Niall Riddell
So that's a an incredible place to start from being able to, you know, benchmark your business against Tesla. Tesla clearly has come in and reshaped the dynamic of this marketplace. How has shell, you know, she's a huge organisation. How has Shell tackled that transition?
00:02:47 Giorgio Delpiano
Were originally share invested in a number of businesses independently.
00:02:52 Giorgio Delpiano
That were kept a bit at harm's length, but in the last three years we brought all of them and the mobility House. And so businesses like Ruby, three City, for example, are actually very active in providing infrastructure, building infrastructure and shell is across the value chain.
00:03:12 Giorgio Delpiano
On eBay charging, well, we don't produce hardware, but we have CPMS. We have MSP's, we do roaming agreements with more than 1,000,000 roaming players worldwide. And then of course, you know we operate, we operate our sides as a CPO. So we we do, we do a pretty much.
00:03:32 Giorgio Delpiano
90% of the activities in May be charging.
00:03:35 Niall Riddell
And and would you therefore consider that your your directed strategy of acquiring players in the market and absorbing knowledge as part of the foundation for what is now the immobility business?
00:03:48 Giorgio Delpiano
Yeah, absolutely. If you look at a company like Shell, we are very good. We have always been very good at building service stations. So now building heavy Chargers is a different way of building infrastructure, but is always infrastructure.
00:04:00
So.
00:04:01 Giorgio Delpiano
And then operating it, but in some of the key elements of the value chain like software like CPMS and MSP, it was very difficult to to to build those those competencies but but now to give you a number, I think that probably there will be over 500 people working in in mobilities in different departments, different parts.
00:04:20 Giorgio Delpiano
Of the company in.
00:04:21 Giorgio Delpiano
In in this area, so it is a big it is a big, big endeavor that you know now it's all under.
00:04:26 Giorgio Delpiano
The mobility business.
00:04:27 Niall Riddell
And shall historically has always business customers and your role is in business customers, but ultimately with the immobility transition, you presumably have a very large consumer facing base as well.
00:04:41 Giorgio Delpiano
Well, shares sells 32,000,000 customers every day to our service stations 47,000 right? So.
00:04:49 Giorgio Delpiano
Overtime, pretty much every single one of the 32,000,000 will end up with an electric.
00:04:55 Giorgio Delpiano
Vehicle.
00:04:56 Giorgio Delpiano
But the the task will be the same, providing energy, whether they they come with an internal combustion engine or they come with the V electric vehicle and delivering them, you know solutions to.
00:05:10 Giorgio Delpiano
But yet go beyond the energy. You know, Shell is also one of the largest coffee chains in the world. So. So we we do operate, you know, we do operate many, many stations in in that way.
00:05:20 Chris Sass
But I guess that brings me to what I was thinking as you described this infrastructure. So I I get the bill.
00:05:24 Chris Sass
Thing and the the relationships across the different parties. But as you bring a new supply chain of energy or different type of energy in, you're more dependent on power needs. So whereas you might be trucking in or have a different supply chain for fossil fuels, how does that work and how does your experience help transition to?
00:05:39
Yes.
00:05:45 Chris Sass
Hey, how do I work with a bunch of different utility?
00:05:47 Chris Sass
Cities to deliver power as opposed to a different distribution network that you've had legacy for 100 years of experience.
00:05:53 Giorgio Delpiano
Yeah. Well, you have two different markets here in, in a part of the world markets, power markets are liberalized including in many states in the US and within that actually we trade. PowerShell is already one of the largest power traders globally. So we do have those capabilities inside the company which were.
00:06:13 Giorgio Delpiano
Learned from, you know, from the hydrocarbon.
00:06:16 Giorgio Delpiano
Side but secondly, we also produce renewable power. We have many positions in wind and in solar in a number of countries, but ultimately it's easier to buy power than to buy in hydrocarbons. So somehow if you do have the capability to trade then.
00:06:36 Giorgio Delpiano
And you are. You know, you are in the business and and every every molecule, every molecule, every.
00:06:42 Giorgio Delpiano
Electron that we sell on on our network is renewable.
00:06:46 Niall Riddell
That's a. That's a fabulous position to be in, because then you're truly underpinning that transition. Your network though is not like other people's networks. Your network is properly global. Can you tell us a bit more about what we're seeing across some of those countries that you've been operating in and studying?
00:07:03 Giorgio Delpiano
Yeah, well, you need to start from China, and China is probably where Europe will be in five years and the US certain states in 10 years.
00:07:15 Giorgio Delpiano
Hopefully not, but hopefully faster. But you see that in China the transition to is being just.
00:07:24 Giorgio Delpiano
Short of incredible by the city elections than there is already, there are more, more electric vehicles in the in the citations than in the whole of the United Kingdom. So it is a very big, big acceleration that China has brought and they have been also very forward-looking, not only on the driving of the industry.
00:07:45 Giorgio Delpiano
The OEM side, but also on the infrastructure.
00:07:48 Giorgio Delpiano
Side so shell has the largest heavy charging position globally in China, where next to the airport of Shenzhen there are 260 high power chargers in one single location. If you go to Europe the the location where you find something closer to that.
00:08:08 Giorgio Delpiano
Maybe in Germany, a location where I think there.
00:08:11 Giorgio Delpiano
Are 60 positions.
00:08:13 Giorgio Delpiano
So you know, China is just the scale is is just phenomenal.
00:08:17 Giorgio Delpiano
Then if you go to to the US, the the development of recharging is very patchy. Certain states like California are really going fast and others.
00:08:26 Giorgio Delpiano
Starting now to embrace EV charging and in Europe, where again you have a very big, big differences in my home country, there is a lot of in Italy the the electrification is going very slow. But if you go to Norway now over 80% of the cars sold in Norway are electric.
00:08:47 Giorgio Delpiano
So it is a. It is a big, big different to also different speed, but you would be surprised to see that actually in many emerging markets electrification is going much faster than we thought. So country like Thailand, Malaysia, Mexico, Colombia, South America where the Chinese manufacturer are actually entering and bringing their vehicles.
00:09:09 Chris Sass
Interesting. When you talk about China and other markets and this is my American perspective coming through.
00:09:15 Chris Sass
When you when you're bringing in oil, a country can't really nationalize or do things locally because they need your resource that you have to come from somewhere else. But electricity is generally made locally, is it not? So is it just that they really want your technology for the billing or for the infrastructure cost to pay for what? What makes a country like China look for an outside?
00:09:36 Chris Sass
Party such as Shell to come in and make significant investment in their country.
00:09:39 Giorgio Delpiano
Yeah. So China is a well, first is an open market from any charging perspective is a level playing field. So everybody any company can operate in China as long as you know you're.
00:09:52 Giorgio Delpiano
So actually is the judging side is free market. Some of the other industries that you can you can find?
00:09:59 Giorgio Delpiano
In.
00:09:59 Giorgio Delpiano
China and then there is a very big difference between the the the state grid and all the operators of charges in China we have, you know historically been in partnership with many.
00:10:12 Giorgio Delpiano
With many players and we do have a JV with the BYD for every charging. In the situation there, in a number of other areas so.
00:10:22 Giorgio Delpiano
So I would say the China from an EV charging perspective is a very.
00:10:26 Giorgio Delpiano
The open place to invest and also the regulation is the probabilistic more open mind that than what you see in Europe or in America, where somehow the bureaucracy to be the to build infrastructure is very complex.
00:10:41 Niall Riddell
I guess one of the things I'm really interested about when you get into these like more advanced markets, which are further down the adoption curve is what happens because?
00:10:50 Niall Riddell
Because we talk a bit about queueing, we talk a bit about booking. We talk about challenges, getting certain building types to get access to charging. We talk about grid constraints to talk about access to network. What are some of the things that China has learned over the over the last few years as they've really expanded that we can maybe learn from here in the.
00:11:10 Niall Riddell
Europe, or potentially also in the US?
00:11:13 Giorgio Delpiano
Well, in China you have a relatively simple, straightforward process for setting up infrastructure.
00:11:21 Giorgio Delpiano
So the availability of the grid because it's a newer infrastructure that's been built in the last, you know, 30 years is definitely different than what you have in in Western Europe. Second, there is a level playing field about what what you can charge to to customers.
00:11:40 Giorgio Delpiano
So margins are are fixed for from the.
00:11:44 Giorgio Delpiano
Power to customers.
00:11:45 Giorgio Delpiano
And and finally being more important, the access to very competitively priced hardware.
00:11:52 Giorgio Delpiano
Makes the cost of the infrastructure that the CapEx required to build infrastructure a fraction of what it is in Europe, I would say easily from half to maybe 3 to 4-5 times cheaper.
00:12:07 Giorgio Delpiano
And and that makes obviously for the same dollar you can build three times infrastructure and that is a is.
00:12:14 Giorgio Delpiano
A big difference.
00:12:15 Niall Riddell
And so that that's quite interesting because what that says is the deployment of infrastructure and the cost of getting it in is lower.
00:12:21 Giorgio Delpiano
Not sure.
00:12:22 Niall Riddell
As a consequence, does that lead to more infrastructure and therefore a better consumer experience?
00:12:27 Giorgio Delpiano
Yes it does, because if you look at, you know, building a building, a charging local position in you know in in Europe or in America with 10 charges, you can easily get it, you know have high high power charge, you can really get into.
00:12:41 Giorgio Delpiano
$1,000,000 type of.
00:12:42 Giorgio Delpiano
Investment is a big is a big, big investment for 10/20 charges. So if you can achieve that for half of the price or a third of the price, then of course all of your economics also play much better because then you need less utilization in order to justify this type of investment.
00:13:02 Niall Riddell
And suddenly the consumer experience is enhanced because there's more charges and more locations.
00:13:07 Niall Riddell
Making.
00:13:07
Yes.
00:13:07 Niall Riddell
It easier to access and use, which encourages adoption which?
00:13:12 Giorgio Delpiano
Yes.
00:13:13 Niall Riddell
Naturally leads to a self performing cycle. I'm conscious that one of the areas that we spoke about before the show was an area which I'm quite fascinated about and we've had former guests on the show talking about this, which is battery swapping. So this is, you know, moving the battery out of the vehicle rather than charging it and replacing it with a full.
00:13:15 Giorgio Delpiano
Yes.
00:13:28
Hmm.
00:13:34 Niall Riddell
You've got some very specific experience with that out in, out in China. I think it was, was it Shenzhen?
00:13:39
Yes.
00:13:40 Niall Riddell
Again.
00:13:41 Giorgio Delpiano
That chingao chingao.
00:13:42 Niall Riddell
Can you tell us what channels can you tell?
00:13:42 Giorgio Delpiano
Yeah, yeah, yeah, sure.
00:13:44 Niall Riddell
Us more about that.
00:13:45 Giorgio Delpiano
Yeah, yeah, sure. So in Qingdao, so battery is working for trucks.
00:13:50 Giorgio Delpiano
And there are.
00:13:52 Giorgio Delpiano
Three main differences that needs to be taken into account in battery swapping for vehicles. If you compare cars with trucks, well, the first is that on the track, the battery can just be plugged on the back of the cabin of the.
00:14:07 Giorgio Delpiano
Track and doesn't need to be a nice looking battery or a very simple battery so you can get. You can get that that easily replaced against the car. Then the second is that the cost of the battery is cheaper because you can be you can have a heavier or a bigger battery and it doesn't need to be.
00:14:29 Giorgio Delpiano
Of course, the same battle that you will with installed in the car just naturally needs to be lighter and and the more.
00:14:36 Giorgio Delpiano
More, more more cost.
00:14:38 Giorgio Delpiano
And finally, if you want to be if you have tracks, you don't need the dense network of chargers, you can actually have fewer batteries. Swapping locations to swap batteries, and in Chingao I saw a location where you can change swap a battery in 4 minutes. There are 2 1/2.
00:14:57 Giorgio Delpiano
Those battery the big batteries but can be swapped very quickly and they provide around 80 miles range which is enough to do 3.2 point deliveries for these trucks that bring container.
00:15:10 Giorgio Delpiano
Out of the harbor.
00:15:11 Chris Sass
To supply chain for this developing. So are we going to start seeing? I mean it's great that it's a city in China where they've got a lot of control. Do I expect to be in central Europe, in sea trucks with battery?
00:15:21 Chris Sass
Swapping stations at.
00:15:22 Chris Sass
The depot, or what do I expect to?
00:15:22
I.
00:15:24 Chris Sass
See how does this develop?
00:15:24 Giorgio Delpiano
I would hope so, because from a use case perspective, the main advantage of a battery swapping for trucks is that because you need a lot of power, you do not need to build a very expensive high power infrastructure high voltage infrastructure which can cost if we if the cost for 20 charges.
00:15:44 Giorgio Delpiano
The public is in the emergence.
00:15:47 Giorgio Delpiano
The cost of 20 charges of high voltage can be in the multimillions so so you know the batteries will work as a grid balances. If you want in the battery swapping solution. So what we need is European OEMs to start to build batteries, swapping trucks. They are very simple to build actually and I would expect the.
00:16:06 Giorgio Delpiano
Chinese manufacturers, we start to bring trucks into Europe and pretty much the rest of the world in order to get in order to get.
00:16:16 Giorgio Delpiano
You know a.
00:16:16
Get the.
00:16:17 Niall Riddell
And historically, when we talk about battery swapping, the criticism tends to be around standardization because you need, you know, the physical space, dimensions, terminals, or those things to be aligned. Do you think that we will get that sort of consolidation around a a Chinese battery swapping technology?
00:16:25
Yes.
00:16:37 Giorgio Delpiano
Yeah, well, in.
00:16:38 Giorgio Delpiano
China, the location that I saw had two different Toya manufacturers.
00:16:44 Giorgio Delpiano
Chassis and using the same battery. So I do think that there will be that there is an opportunity for standardization and and this matters because if you standardize the batteries whopping for trucks, you not only lower the cost tremendously of the vehicle but.
00:17:04 Giorgio Delpiano
Also, don't forget that you also lower the cost of the supply chain of these.
00:17:10 Giorgio Delpiano
So even transporting goods to to supermarkets is cheaper, if the cost of the truck is $50,000 rather than three.
00:17:18 Giorgio Delpiano
$150,000.
00:17:20 Giorgio Delpiano
And that, I think is the missing point that we are having in Europe that they're actually in China, they got the right that by standardizing these type of vehicles and making them very cost competitively.
00:17:32 Giorgio Delpiano
The benefits go beyond the the EV uptake. They go into the supply chain.
00:17:37 Chris Sass
So what I think I'm hearing, or what I'm picturing is I'd buy an inexpensive truck.
00:17:43 Chris Sass
And then perhaps at least batteries from the competitor that makes the the least expensive battery. So there'd be two markets, there'd be a market for an expensive chassis, which may hurt the market, right? Because there's not a lot of differentiation at that point. Then it's just a A chassis with with a motor. And then there'd be batteries that you'd pick from whichever vendor you like and get the best price there. So they're probably.
00:18:03 Chris Sass
Pulling apart that that, that technology.
00:18:05 Giorgio Delpiano
They do. That's why you see some OEM's in Europe or America not particularly keen on this model, but has everything, you know, the new models, new business models and.
00:18:15 Giorgio Delpiano
You know that that in transport, especially cost is what matters and what drives decisions. So if this set up, yeah.
00:18:22 Chris Sass
What? What? The infrastructure that changes, you know a multi ton battery or a big battery. You know the the robotics to do that. You know when you're looking at cost structure and you said you know they can do it in a few minutes to to come in and out of a truck. So does it depot get one of these things or just for redundancy they.
00:18:32
Yes.
00:18:34
Yes.
00:18:37 Chris Sass
Need 2 of.
00:18:38 Chris Sass
These and what are the economies of scale there? What is that infrastructure cost?
00:18:40 Giorgio Delpiano
Yeah. No, the infrastructure for what I can tell is similar or cheaper than the infrastructure to build the the high voltage high voltage.
00:18:52 Giorgio Delpiano
Charging for for trucks and the reason is that is almost like a a truck car wash or the truck wash. The truck is in the the robot, which is like a glorified forklift lift the lift the battery, put it into the into the into the.
00:19:11 Giorgio Delpiano
The plug and and get the new battery out, so it's not a very sophisticated technology and the difference that in tracks, the batteries outside the.
00:19:22 Giorgio Delpiano
So can be taken in and out very easily in cars. Normally the battery is underneath and it's a much more complex way of taking it underneath.
00:19:29 Chris Sass
And what about the weight? Is one of the things about trucks they always talk about the weight, you know, obviously it affects the range, but even just for usage of roads or if you're doing deliveries for bridges and things like that, how much weight are we adding to a mid size delivery mat?
00:19:41 Giorgio Delpiano
In general, in general for a truck.
00:19:44 Giorgio Delpiano
The the you.
00:19:45 Giorgio Delpiano
Know the operating harbours and the transport containers, the back, the weight of the battery is 2 1/2 tons and these are easily 25 tons. So maybe 10% of the weight, but you would have something similar if you would have a standard track which has a battery.
00:20:00 Giorgio Delpiano
Underneath the the underneath the chassis so the the weight of the battery is is similar. The difference in having an external battery that you can make it bigger can be uglier and maybe slightly more heavier and you can still take it in and out very easily and that lowers lowers the cost of the battery material.
00:20:20 Niall Riddell
Yeah, I can see this model being quite interesting. I was just an event recently where they talked about swapping tractor units so they would drive one tractor unit to a location and lift off the trailer and switch the.
00:20:25
Hmm.
00:20:30 Niall Riddell
Tractor unit and for the driver. They would then leave the tractor unit. But now you've got 2 tractor units, whereas actually this model means you could stop in the same scenario, switch out the battery, upload a new one and be back on the road within like you say 4 and a half, 10 minutes. Let's call it. So you've then got like a really efficient train based system. But of course it requires that adoption of.
00:20:51 Niall Riddell
Infrastructure providers in the right locations to manage the routes and that's gonna be that's gonna be the fun bit. But like you say, once it's built, you've got the ability to flex the grid.
00:21:00 Niall Riddell
As well, do you see that being a model which would require a Chinese entry into European markets, or do you think people will learn fast enough to bring it to Europe first?
00:21:11 Giorgio Delpiano
I I would love to have some European companies to get started, so if someone is listening to this call and wants to get going, you know, give me a call which we have to link it in. But I am afraid that again China is maybe 3-4 or five years ahead. You know Neo, Neo is VV car manufacturer, very big in China.
00:21:31 Giorgio Delpiano
They already done more than 1,000,000 batteries whopping for cars.
00:21:36 Giorgio Delpiano
So of course there is a big learning curve in and a big fine tuning in these activities all the time. The robotics that you know that work with that, so you do have you do have I think China has a bit of a head start off in this into this technology but you know like everything you know we we cannot just complain about it. I think in the case of Europe and America.
00:21:56 Giorgio Delpiano
We can still create companies.
00:21:58 Giorgio Delpiano
Fulfill this need.
00:22:00 Niall Riddell
Yeah, the NEO model would be super exciting to see come more extensively into Europe because we did have early tentative movements, but nothing at any particular scale. So I'm going to take you from the very big to the the bit smaller, bit smaller, but many more of them, which is the the world of St. charging.
00:22:07
Yes.
00:22:19
Yes.
00:22:19 Niall Riddell
I'm aware that you clearly in a previous role were very closely linked with Uber. Tricia, do you want to tell us a bit more about what Uber Trinity do and your involvement there?
00:22:23
Yes.
00:22:27 Giorgio Delpiano
Yeah. Well, if this city is a phenomenal business, I had the privilege to be the chairman for for a couple of years and is a very.
00:22:37 Giorgio Delpiano
Clever, but also very efficient business because it mostly leverages Lampos to introduce a charger within and normally originally lampos used to have a very high-powered lights that with the advent of LEDs were converted and freed up about.
00:22:57 Giorgio Delpiano
Five kilowatt of power available for charging, and if you look at Europe alone, there are 20 million lampposts that could.
00:23:07 Giorgio Delpiano
Be used to.
00:23:09 Giorgio Delpiano
To fit an Ubi 3 city or, you know, a a lamp solution.
00:23:14 Giorgio Delpiano
And and that matters because whenever you know for those who live in London, but whenever, wherever you live, when you drive and you see cars parked along the street, it means that those cars cannot be charged easily, that are not in the garage, they're not in a in a in a part of a big villa, but.
00:23:32 Giorgio Delpiano
They're actually, you know, people who.
00:23:33 Giorgio Delpiano
To buy them on the street and would be crispy fulfilled. That use case is very well is five kWh more or less, or not to to to to to to charge. You know a full battery it might take.
00:23:45 Giorgio Delpiano
A number of hours, but still it's a is a very neat solution. Very cheap. The cost is, you know, is a couple of $1000 to to for one of these installations. And then is a very a very smart way to leverage infrastructure.
00:24:00 Niall Riddell
And I'm very lucky because I can walk around the streets around here and you see this tiny blue dot on the on the lamp post and a little plaque that says the charge is there. And the fascinating thing is they're they're very low impact. They don't, they don't increase St. clutter. They don't make our streets anymore untidy. They're just integrated into the system.
00:24:19 Niall Riddell
What do you think we need to see to enable us to get that as a more universal solution because what often we hear from drivers is there's no charges near me. How do we help make that proliferate?
00:24:29 Giorgio Delpiano
Yeah.
00:24:30 Giorgio Delpiano
Well, I think that here normally councils and cities just have to, you know, get get going with it. It is, it is not only you, but this is the number of companies that are available. So it's really about making sure we you know we do those investments and if you look at the cost per kilowatt.
00:24:48 Giorgio Delpiano
Stone is probably the best use of money that you can have because it's a very low, very low cost solution and normally we will be very highly utilized charges.
00:24:59 Chris Sass
You know, we're talking about a different model and in the interview we started talking about 100 year history, all the stations, the coffee shops and all that. And and one premise that I have is we're looking to the future at an eye to the past that the consumer behavior of the future.
00:25:13 Chris Sass
For example, my my wife commutes every day about 30 miles.
00:25:16
So.
00:25:17 Chris Sass
And.
00:25:19 Chris Sass
She's a perfect EV user cause you can plug it in in the.
00:25:21 Chris Sass
Dodge.
00:25:22 Chris Sass
You can go into work and she doesn't go to the service station, doesn't stop and get that cup of coffee anymore.
00:25:27 Chris Sass
So how does your business model and expertise that you bring evolve? Because my premise is you shouldn't need to unless I'm driving across country. In the US, we have long distances, so I might need superchargers from time.
00:25:38 Chris Sass
To.
00:25:38 Chris Sass
Time but lesson going in great distance. The EV range is great. I don't need to go to a station. How does that model change when you look at a legacy infrastructure?
00:25:38
Yeah.
00:25:47 Chris Sass
You know, I forget how many thousands of stations you just talked about.
00:25:49
Of this.
00:25:50 Chris Sass
But won't that change in in this ubiquity example as an example of where I don't really need to go buy that cup of coffee anymore because I'm just unplugging when I parked on the street parking. If I was fortunate enough to find one?
00:26:00 Giorgio Delpiano
Well, actually we would be surprised, but about already today half of the visits on the service stations are not for purchasing fuel.
00:26:11 Giorgio Delpiano
Because, yeah, maybe you might not buy coffee, but there are.
00:26:13 Giorgio Delpiano
Many, many people, yeah.
00:26:13 Chris Sass
So you're basically.
00:26:14 Chris Sass
Just a 711 at this point, you're no longer your convenience store.
00:26:15 Giorgio Delpiano
Yeah, yes, the, the the people are stopping the service station or, you know, even, you know, even without almost electric vehicles, someone will still need to go to the toilet.
00:26:26 Giorgio Delpiano
The occupant of the car we still want a cup of coffee or a Panini or, you know, having some service. So yeah, so the the, the business model of, you know of of the service station is gonna evolve in into a multi solution.
00:26:39 Chris Sass
But your margins change, right? I mean if if only 10% of the people come in by another high high margin profit Center for you, does that mean your service station suddenly become much smaller or I mean, I mean how do you afford to have people there or are they automatic or what it's got to change right that the same rules can't apply?
00:26:56 Giorgio Delpiano
Yeah, it will. It will change. You might have fewer locations.
00:27:00 Giorgio Delpiano
Likely also bigger locations, because to charge the equivalent 1 fuel 1 fuel pump to give you an idea is equivalent.
00:27:08 Giorgio Delpiano
To 10 charges.
00:27:09 Giorgio Delpiano
In terms of energy delivered, so you need to have a bigger, most likely bigger locations than the smaller locations, but it will. People will no even today and people are not bringing home the fuel. OK, now you have you happen to have the capability to charge it at home and that is you know and that is definitely you know competitive.
00:27:29 Giorgio Delpiano
But I don't know why people are going to Starbucks when they could have. They could actually have a coffee at home, right? And ultimately it's also about convenience. It's about the.
00:27:37 Giorgio Delpiano
Time and we do expect that at least a third of the total charging event will continue to be in on the move. So there is still a lot of power to be sold on the move onto service stations.
00:27:51 Chris Sass
And and the second thing that I see is we're still in early innings here as I like to say in the US, it's very early in the development, at least in the North American market.
00:28:00 Chris Sass
That's a bit of what we call the Wild West. There's a lot of developers building charging stations. There's a lot of optimistic, some fail, some succeed, but there's going to be a kind of pulling together and, you know, imagine if you've got the deep pockets and the the technology and the economies of scale you're gonna want to either grow through acquisition or through bringing these pieces together. How does that work with all the disparate?
00:28:21 Chris Sass
Charging plans and structure that's getting put in place today so that 10 years from now, when there's two or three big players that maybe own the market, how do you make that rationalization?
00:28:29 Chris Sass
And make it work for the user experience along the way.
00:28:32 Giorgio Delpiano
Well, I think that's that's great, great point. And there's also is a is a bit of a problem is because what you see is some of these early players, actually they don't have economics at work. So they need to save money by spending less money money than us for example. Therefore having charges at work worse and so on.
00:28:52 Giorgio Delpiano
But this is a new industry, like is any new industry starts with many players. Everybody sees the opportunity and then over time, the most professional companies, the companies that can differentiate, can actually start to consolidate, acquire these players and then yeah, indeed ending up with the with the smaller you know with the smaller footprint.
00:29:12 Giorgio Delpiano
You're in the same challenge on the hard.
00:29:13 Giorgio Delpiano
Side but no, I go back ended years ago, there were probably 100 suppliers of pumps globally and now probably the top five are, you know, over 50% of the market. So that this dynamic will happen also need to.
00:29:27
Charge.
00:29:28 Niall Riddell
Although I'm perhaps a little bit more cruel at this point, I'm not sure that there will be that many acquisitions. I suspect we're going to see many more failures and perhaps are sweeping up of the bits that are left over rather than acquisition. Do you see?
00:29:42 Niall Riddell
Do do you see the market split between high value companies that are hugely acquirable and desirable and those who unfortunately just need to let collapse? And then we'll tidy up afterwards?
00:29:52 Giorgio Delpiano
I.
00:29:52 Giorgio Delpiano
I do need because also what you see is that some of these companies are not have have grown badly either they have increased the, you know, their workforce so fast and so much that actually the the culture of the company is now all over the place or they have all the technology.
00:30:13 Giorgio Delpiano
Legacy, which as you say you know, cannot really be.
00:30:16 Giorgio Delpiano
Worked properly or they scaled up very inefficient processes because they were start up operating a certain way and has the industry. There was a big drive for growth in the last few years, then they they grew in the, you know, maybe in the in in inefficiencies rather than growing.
00:30:36 Giorgio Delpiano
Properly, you know, I I say this job with said it also before you know in, in, in, in in the prep call that you know if you if you're too sick man you cannot make a healthy man or too sick woman a healthy.
00:30:48 Giorgio Delpiano
And here the problem is that there are quite a few of these companies now out there in the market and as as you say, the unfortunately the most likely outcome is that they will end up closing rather than being acquired by somewhere else and maybe only only certain parts will be will be acquired, but consolidation will happen and.
00:31:08 Giorgio Delpiano
As usual, the the best.
00:31:10 Giorgio Delpiano
Will win, and the company has more creativity. The best.
00:31:13 Giorgio Delpiano
The technology, the more customer friendly solution will you know, will end up you.
00:31:19 Giorgio Delpiano
Know playing a role.
00:31:19 Niall Riddell
It's it's really interesting to hear you injecting culture into part of that growth story because conventionally you know the growth story of early stage companies is all about cash being flowed in to create these huge user numbers. But the idea that we've gotta do that in the right way, both for the internal team and the the end customer is really, you know, it's really important.
00:31:40 Niall Riddell
For how we grow these future businesses.
00:31:43 Niall Riddell
One area I'd like to take us back to is fleet and depot. You provide business solutions, how do you see the depot environment changing now that we've got this electrification agenda emerging?
00:31:46
Hmm. Yes.
00:31:58 Giorgio Delpiano
The deeper environment actually, I see it changing even more than the home charging and the reason is that for business companies, the transport is a is a competitive advantage.
00:32:11 Giorgio Delpiano
So they need to get it right, but also, you know, if you transport goods and then you your vehicles are stuck on the road, then you haven't got the business. So the criticality of the poor in terms of infrastructure, quality of infrastructure is different than the criticality of home charging. Well, OK, if your car doesn't work, you can always jump in an Uber.
00:32:32 Giorgio Delpiano
So I see they pose becoming much more sophisticated on how how the.
00:32:39 Chris Sass
How?
00:32:39 Giorgio Delpiano
The how the customer they want from the customer requirement perspective also because of the sheer amount of power that you buy in the depot, you also have opportunities to trade around around depot to charge at different times and you know a few cents per kWh on mega MW hours of.
00:32:59 Giorgio Delpiano
Purchase actually represents thousands and thousands of dollars, so I think the depot are gonna be and they are an excite, a very exciting place to to.
00:33:08 Giorgio Delpiano
And and they do and there will be a big investment going into that into that. You know, I was looking at the report from McKinsey recently that says about about $10 billion needs to be invested in Europe alone to power depots.
00:33:20 Niall Riddell
And that that sort of like number is the kind of challenges that we're seeing ahead of ourselves as we move forward. Georgia, this has been an incredible run through a number of different areas, filtered and dropped in with factoids that you dropped picked up on that journey. The ones I wrote down were.
00:33:36 Niall Riddell
Miner, five years behind as Europe, another five years behind as the US the size of some of the high-powered charging hubs, you're looking at 260 high-powered chargers is 10s of megawatts of power. The the idea of having 20 million lamp posts that we can deploy St. charging into and the one I personally enjoyed was.
00:33:57 Niall Riddell
One fuel pump needs about 10 charges to replace it, which I thought was really fascinating. From that sort of how do we get the energy into the vehicles to do?
00:34:04 Niall Riddell
Myles, so thank you very much for coming to.
00:34:07 Niall Riddell
Join us today.
00:34:08 Giorgio Delpiano
My pleasure. Thank you, Chris.
00:34:09 Chris Sass
For audience, you hope you've enjoyed this episode as much as we have. It's been an exciting journey on this conversation, learned more than I thought about battery swapping. I know we've touched the topic a couple of times. I didn't realize it was so prevalent in in the the delivery segment, so if you've enjoyed this content and you want more content like this, please don't forget to subscribe. Follow us, share the link with friends.
00:34:29 Chris Sass
And we'll see you again next time on the Insider’s Guide to Energy EV series. Bye for now.