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00:00So we're going to talk about electric vehicles but the cool thing about you that I always am fascinated by. If you bought an appliance in the past 15 20 years you should think Cathy because she was one of the main architects of the Energy Star rating system that the EPA rolled out. So fun fact. Thanks Kyle. To do a show of hands who owns an electric vehicle. A few not a lot but every adoption is going quickly. So 5 percent last quarter doubled last year. Yeah us who's an enthusiast for Avis. There we go. Go. OK. Can I ask one more question. I know this is your interview. How many people. How many people in honest. Be brave. Have not ridden an ATV. A few said most people have ridden in an RV. OK good to know. In this conference I was going to ask you've been in the role about five years. Do you think the adoption you're seeing now is it faster or slower than you would've thought when you took the job. I think it's about what I would have expected and it's just a classic of it's classic hockey stick right. Right. In the next 24 months it's expected that we're gonna have 50 new TV models. When I started a TV show you could either do a Nissan Leaf for an idea a BMW ISE before and that was it or Tesla. And now there's just so much work. So whatever kind of car you want to drive or ride in or lease you have a choice. Big small family sports car. They're all they're all becoming available. Pick up truck pick up pick up right there. I forget that. Urban cowboys. Yes. And the Ukraine crisis. How much of a factor or force do you think that is. Do you think it makes a difference now. Well I mean you've seen the same data I have. Like the most common Google search now in America is free of these or something like that. So so it is the is a horrible horrible crisis. But the unintended thought of benefit for electrification of transportation is that going evey is on many more people's minds. So that's that's a good thing for the climate. And you mentioned hockey stick. Is it like are we at a tipping point situation or is it going to be more of a gradual. Well I think we have a supply. Look we haven't we may have a near-term supply of Evie's issue but I think that'll be a 20 22 maybe beginning in early into 2023 issue. The car companies there's not a car company that even go works with we work with everybody or that I even know of. That's not electrifying. Well I mean we we announced a couple of months ago a partnership with Toyota. And again for a long time the word was Toyota is just going to go fuel cell. That's it. And Toyota was clearly planning for electrification and they're now going very very big. So and there's so many new car companies. It's not you know it's not just Tesla's obviously. It's revision. It's lucid. You know Nicolas back on track. There's a whole bunch of other electric vehicle companies that are that are smaller that are going to grow and be big behemoths because so it's all the 500 billion dollars has been committed by those car companies to electrify. That is unstoppable. Right. It's kind of some cost. It's going to it's a good investment. Rather I wouldn't call it a sunk cost to call it great investment. I did want to ask about supply though. You know Ford has stopped taking orders for two of their super coveted is there among them. You know the most researched most marked up vehicles in the country. You don't think battery will be a bottleneck in the next ongoing. I don't I don't think it could be a near-term limitation. You know I think that every single car company that I talk to is thinking about lithium supply and they're going upstream. And you can conserve harking back to maybe a century ago when the steel companies had to think about raw materials as well. I think all the car companies are thinking about raw materials. I think I think Elon Musk is thinking about Rometty. I think Mary Barra GM is thinking about raw materials. They all know that it's really really important and they will make investments accordingly. And in terms of allocation do you think they're very serious about sending these vehicles outside of states with the zero emission mandate. Like will we see them in the heartland. You bet. I mean we even go has we have a partnership a 90 million dollar partnership with General Motors to build across the country. And why. Because GM intends to sell these into their traditional marketplaces which are the heartland. So we're absolutely going to see this everywhere. I mean that's why we need to build the infrastructure to get out ahead of that. Your decision making. Yeah. Let's talk about that. I ask you this every time in the media we like to talk about the chicken and egg analogy. Your folks talk about the hot dog and bun like what's the what's the best metaphor and how do you how do you plan your infrastructure. How far out and where. So so what what do you do. Go our particular sweet spot is fast charging is and we've got the most expansive fast charging public retail network in the United States right now. Every single fast charging stall costs about one hundred thirty thousand dollars. You got two thousand of those or so. Yeah. So between 17 18 hundred right now. So that's one hundred eighty thousand dollars. So what we do is it's a significant capital investment. Two thousand components in every single charger. It's a real construction project. Before we decide to build a new station we have to run the math and make sure that that station is going to pencil on behalf of our shareholders. And so when we we underwrite the assets over about an eight or 10 year life which is pretty conservative you know they may last longer but this is early days. So we do that and we look at we have proprietary models that tell us what. The use of those stations going to be over time. So we look very you know we use to be net forecast on on even penetration. We overlay our own sort of down to the census block predictions about how that much that assets going to get used how much how dense is the housing right in that area. Because the more multi unit dwellings you have the more reliance on public fast charging you're going to need. Because like I live in an apartment in Santa Monica I don't own my apartment. I don't have charging in my apartment. So I have to rely on a Santa Marta. I have to rely on away from home charging. So all of those factors as you know it's a regression model with twelve variables machine learning and all this fancy things. But we use those tools to figure out over the life of that asset. Am I going to get a return that's acceptable that meets my hurdles. Yeah. And one of the things that is really really important in places where there aren't enough easy yet is like General Motors is coming to the party and they're paying us essentially thirty thousand dollars per charging store to build ahead of demand. The state of Virginia we know we won the contract to build out fast charging in Virginia. That that that government program that was fueled by the D Volkswagen diesel gate settlement that had your Appendix D paid for 75 percent of that which meant that we can go and build in places as a private company or as a public company now. But we can go build in places where there aren't enough IV's yet but we can get rid of that. We can eliminate that Gordian knot that sense of oh my gosh I might I don't want to buy an I.V. if I don't see a charger in my grocery store parking lot and even go loves to build chargers in your grocery store parking lot and you can spread the risk. Yeah. Yeah. How much more forward can you pull the economics on. Is it a two year thing and four year thing. Well look let me just give you the case example of California. California is the most advanced market in United States 60 plus. You made the data better than me. 60 plus 70 percent of it is in America are being driven around California. Roads even goes operating a profitable network in California right now because there are enough ideas to simply support the investment in more charging infrastructure. That's also true now and I think Denver Portland and a few other places that is becoming that will become true in more places depending on what the penetration of the US is. And I said we have these sophisticated forecasting tools but overlay on top of that a five billion dollar federal infrastructure program over the next five years over the next five years whose aim is to make charging infrastructure ubiquitous and that will get players like Evey go to be able to build in places where there aren't yet enough these to you know make your money back. Absent that that support. Do you think about it from the flip side. I'm part of the thinking with Tesla keeping the network in-house as it sells their cars. How big is a market of folks who will buy an RV or seriously consider one just because they finally see a station on the route they drive all the time. Well if that's something you can't even care about or worry about well we can't. We care about it. So we want our assets to get used obviously. But but if if the indications from the car makers are are true it matters a lot. I mean when GM came to us and two years ago to cut this deal they said look people care about price. They care about comfort. They care about range. What we know we know they need to feel comfortable with with the couple hundred miles range there's still going to be able to charge conveniently. Therefore we're going to invest in you even go to help build a head of head when that demand is because we know we need that to sell cars before the Hummer gets to the dealership. This was this was before we cut that deal before. Similarly you know that the program with Toyota is that they're you know they're going to give away one year of unlimited charging on TV goes network so that people feel comfortable buying the car. So it is absolutely a part of the equation. If you're making these and you're mainstreaming these and you want you know you want them to become the product that everybody buys that helping with the charging is a part of the equation. Before our session I pulled up your map and I pulled up Electrify America. It seems they're much more focused on transportation corridors and point to point stuff is there is that is that a fair assessment for one. And is there any danger. Is there any you know do stay up at night worrying that you're missing some opportunities in the Dakotas where you have no stations. Yeah Montana and Wyoming. We we look at every opportunity but we always look at it through the lens of visit. Is it a good investment for our shareholders. Corridors to date have not made any financial sense at all that we could not make them pencil anywhere and anywhere. I mean virtually anywhere. I mean we've got some I mean the definition of a quarter the Department of Transportation has an official definition of a quarter. That's part of the Navy infrastructure bill stuff. But so we would have there do also happen to be something like Moss and as you could say is one big interstate highway because of the freeways that that that has enough density. Unfortunately sometimes. But so for us we haven't wanted to. The dynamics change with with the federal infrastructure money that's coming because again that is focused for the first year at least only on quarters. And so the economics might change. So we're looking we're looking forward to participating in that in that and and being able to extend our geographic footprint there. I mean when we talk a little bit about extend. Yeah I was gonna ask. Yeah. So another another thing that we've added to our to our offering is there may be gas station chains in rural America where it doesn't make sense for us to own the asset because the utilization may be intermittent but the gas station owner says I want to broaden my product suite. So what if he goes offering to do there is do the construction services sell the equipment to the to the gas station operator and then operate it for them as part of VB goes network which is best in country network through under the banner if go extend. It's almost like Intel inside the Eevee go extent. So you're part of the evil go network and that service and the branding that comes with it. But we don't necessarily own the asset itself. And you're also talking to rural utilities development funds that kind of thing. Yeah it does seem like there's an in-between though between North Dakota and the Whole Foods of Los Angeles like northern New England. You seem to have a lot of stations now the Carolinas. Is there kind of like a mixed use. Yeah. Oh sure sure sure. Sure. I mean again there's there's a there's a it turns out that people if you go to an urban center and and you do a radius of a couple hundred miles outside of that to where grandma your cousins might live or whatever people will still drive that distance. So as there are more even is what we basically do is we develop models. What what is going to make financial sense because how much use is the asset going to get. Yeah. And so like what we're seeing in say down the down the spine of the United States say from Wisconsin Minneapolis all the way down through. I mean if you go straight down is that Texas. I presume it is because Texas is so big that down those sort of verticals though those are going to be interesting geographies and those are also geographies the GM is really interested in building. And Toyota wants to be selling cars there. So the economics it's a snowball right. The snowball as it were. Do you think you asked at the beginning are we at an inflection point. I certainly feel like we are you know like the momentum is on our side. You know the snowball is rolling down the hill and getting bigger and bigger. And that's that's all good news. And we've talked about the red tape and the permitting process. I think you said 18 months on average it goes to like let's build one here too. Yeah turning it on. And you want to get that down to six months. Is that how hard is that. Make your job. Like are there a bunch of places where you're just starting things starting things off thinking like an 18 months we might be. Yeah. So it ramps even go. We we're able to construct a high ultra fast charging station with four to six eight stores in a period of four to eight weeks once we start digging. That's how long it takes us to do our piece of it. But before we can actually start to dig the landlord has to allow us to do that. Build it there. The landlord because it's high power the utility needs to put add some more equipment to the site and that requires an easement. So that is another part of the process. The utility has to approve the design because it's connecting to the grid. So all of that work and the local government authority has to give us a permit. And sometimes they want to specify what kind of landscaping and plants go there. All of that takes time. And then at the tail end before we're allowed it'll have a Navy drive up to the Navy gas station in charge. The utility has to come and do a final inspection. So to go from the four to eight weeks of construction to the it used to be 18 months it's now probably down to on average between 12 and 15. So it's getting better because the flywheel started to spin. It's all of those extra pieces around the outside. It's an ecosystem. You know it takes a village to build a fast charging station. But you are you are moving the needle on that. Yeah. Oh yeah yeah yeah. Wait we we've we've established this initiative called Connect the Watts which which is basically a group of all of us industry players local governments utilities site host that are landlords equipment vendors. We bring everybody together and we talk about we share best practice and it's in it's fun because sometimes like like New Jersey has a model ordinance which the local government has figured out how to streamline permitting for fast charging stations just like we did with solar probably 15 20 years ago. They're now doing with fast charging so that the person who runs that program in New Jersey got onto one one of our salons and was able to tell that story to the other local government authorities that were on the phone like oh well maybe we can do that. So even goes happy to sort of contribute this to the conversation because obviously it makes our job easier. Get everyone talking about it. Yeah we're out of time. I want to ask one last question though. Do you think charging is a non-issue for someone considering a car. Are they still. Preferential towards Tesla just because it has fifteen thousand cords around the country. My job is to make them completely comfortable. I would say it's still a work in progress I think. I think what you want to do is think about how I mean what our research says is the number one criteria for four drivers. Is there a fast charging station. Look close to where I need to use it. Is it not a convenient place. I would say you know we know you can you can look on plug share and you can see where all the charges are and like what are your favorite routes if you're gonna go visit your in-laws. Are there are the charters. And if there are places where you think this would be a really good location then drop us an e-mail because we'd like to know that that matters to you. Perfect. Thank you. Cathy Zoi everyone thanks.

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EVgo CEO on Fast Charging’s Role in the EV Boom

EVgo CEO Cathy Zoi discusses how the company is leveraging technology and partnerships to accelerate the shift to clean transportation with Bloomberg Green’s Kyle Stock. (Source: Bloomberg)

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