19. Green Dots and Giga Factories: Navigating the EV Revolution

Join Chris Sass and Niall Riddell on the latest installment of "Insider's Guide to Energy," featuring an enlightening conversation with electric vehicle (EV) industry veteran, Chelsea Sexton. This episode provides a comprehensive exploration of the burgeoning world of EVs, a topic that's increasingly capturing global attention. Sexton, with her extensive background in electric transportation, offers invaluable insights into the rapidly evolving landscape, where cutting-edge technology intersects with significant financial investments and progressive policy-making.

Delve into the heart of the EV revolution as Sexton shares her unique perspective, gained from decades of experience, including her pivotal role in General Motors' EV1 program. The podcast covers a broad spectrum of topics, from the intricacies of EV manufacturing and the significance of giga factories, to the strategic deployment of charging infrastructure and the complexities of the EV supply chain. Listeners will gain an understanding of the multifaceted challenges and substantial opportunities in transitioning from fossil fuels to electric power in transportation. The conversation also touches on critical aspects such as the role of government initiatives, the importance of public-private partnerships, and the economic implications of electrifying public transport and heavy-duty vehicles.

Tune in to this episode of "Insider's Guide to Energy" for a dynamic and thought-provoking discussion that is not just about the future of electric cars, but also addresses broader implications for environmental sustainability and energy independence. Whether you're an EV enthusiast, an industry professional, or simply someone interested in the intersection of technology, policy, and finance in the energy sector, this podcast is an essential resource for staying informed about the latest trends and developments in the electric vehicle revolution.

Transcript

Transcript 

00:00:02 Speaker 1 

Broadcasting from Washington, DC, This is insider's guide to energy. 

00:00:08 Speaker 2 

This episode of Insiders Guide to Energy EV miniseries is Powered by paua. 

00:00:13 Speaker 2 

Paua helps your business transition to electric vehicles by simplifying charging, managing payments, and optimizing your charging data. 

00:00:21 Speaker 2 

Welcome to insiders guide to energy. I'm your host Chris Sass, and with me is Niall Riddell. Today is another episode of the Insiders Guide EV series. Niall, what are we talking? 

00:00:31 Speaker 3 

About today, this one's exciting. This is where I get an education. Being on the wrong side of the pond, about what's going on in the US. Our guest today is someone that I've known about for a long time. 

00:00:41 Speaker 3 

But never really had the privilege to meet or speak to in person, so I'm delighted that we're going to be joined by Chelsea Sexton, who's going to tell us more about this ecosystem because she is an industry veteran who knows an awful lot about electric cars. Welcome, Chelsea. 

00:00:57 Speaker 4 

Thanks for having me. 

00:00:59 Speaker 3 

So maybe we should start with a a very broad open question, which is what is it that you do these days and you know, what do you know about electric cars? 

00:01:08 Speaker 4 

I'm just a girl that plays with cars. I I'm very lucky. I found these very early about 30 years ago. I started with the General Motors little little car program called the EV1, fell in love, never left. 

00:01:19 Speaker 4 

Electric transportation and after nearly 3 decades in private industry, I joined the loan programs office about 2 1/2 years ago to help bring all of that frontline insight to the deployment of. 

00:01:32 Speaker 4 

Many billions of dollars in capital towards, you know, financing primarily manufacturing facilities for EV's and their components and materials required to not just get all of this, these these technologies going but continue to accelerate them. 

00:01:48 Speaker 2 

Awesome. Excited to have you here. But before Neil goes and asks his question, you said loans program, maybe we need to be a little bit more clear what that program is and you work for because I don't know that the audience knows exactly what you're talking. 

00:02:00 Speaker 2 

Quite yet. 

00:02:01 Speaker 4 

Yeah, no, absolutely. Within the Department of Energy, which is, you know, 10,000 engineers and a whole bunch more nerds sits an office called the Loan Programs Office. We have several loan programs, two of which can finance advanced transportation, manufacturing and deployment. I primarily focus on the manufacturing side, but sometimes I get to play with. 

00:02:22 Speaker 4 

Putting Eva's out into the world, and collectively we have. 

00:02:26 Speaker 4 

A few $100 billion, give or take, would be between all these programs to help enable and finance these projects. You know, different ones qualify in different ways. Most of them have either a greenhouse gas reducing or fuel economy. Improving lens in terms of eligibility. And from there we fight. We primarily work with. 

00:02:46 Speaker 4 

Fairly large projects, $100 billion and higher. 

00:02:49 Speaker 4 

Our largest 1 so far has been 9.2 billion to finance 3 battery Gigafactory, so it's a very wide space we play with everything from critical materials for batteries and components like batteries, but also wiring harnesses and motors and efficient power electronics and those sorts of things all the way up to the vehicles themselves. So it's a pretty fun. 

00:03:10 Speaker 4 

Thanks for someone like me. 

00:03:11 Speaker 3 

This is pretty awesome. I've got so many different directions we can take this, but probably starting chronologically the the GM EV1. There's a whole story in there and it perhaps where I started to learn about electric vehicles was off the back of that story many years after that programme. Do you wanna tell the listeners a little bit about that and what what that's led to today? 

00:03:34 Speaker 4 

Sure. I mean, he needs the modern era of EVA's in the US really started in the mid 1990s. General Motors actually announced what became the V1 in 1990. California saw it got very excited because we've had decades of smog passed a mandate that essentially said to the biggest manufacturers in the world. 

00:03:54 Speaker 4 

If you want to continue selling cars in California, you have to at least start to make some of them. Zero emission could be electric, could be hydrogen. 

00:04:01 Speaker 4 

Matter. Most of the companies at the. 

00:04:03 Speaker 4 

Time went electric. 

00:04:05 Speaker 4 

And each of them put cars on the road, but didn't exactly have their hearts in it. Back then. It was really early for EV's, and consumers weren't entirely ready. From their their standpoint, so they were fairly temporary programs. But the drivers that had them tended to really like them. So when the programs were ended, the the drivers got very upset. All sorts of things. 

00:04:25 Speaker 4 

Happened. There are movies, they were protests, etc. 

00:04:28 Speaker 4 

But it really helped generate what became this newer generation of EV's now starting around the 2010 ERA and in between the two we we told the stories through a couple of documentaries and things like that. So it's been really exciting for me to be part of all of the ebbs and flows of the history of modern electrification. And now we're really excited to not just be talking about. 

00:04:50 Speaker 4 

Electric cars, but electric trucks and buses and public transit and how all of these things kind of fit together and increasingly, yes, we want to electrify all all vehicles that are currently using fossil fuels, but. 

00:05:06 Speaker 4 

Also, how do we enable new business models and things that enable people to not only have their own primary car all the time? How do we enable car sharing and more transit so that people can get out of personal vehicles and reduce their vehicle miles traveled? 

00:05:20 Speaker 3 

So this this means that you've gone from a world where this was too early to a world where it's really happening and clearly you've got billions being invested. Can you give us an example of where some of that money is being spent and what it's being spent on? 

00:05:34 Speaker 4 

Yeah. I mean, in the case of the loan programs office, the Transportation program projects were up to nine of them and it's about $17 billion, give or take total. So two of them are very well known projects for blue Oval, which is the three gigafactories I mentioned and that's a joint venture with Ford and SK on. We also have finance 3 gigafactories for OTM. 

00:05:54 Speaker 4 

Which is LG and General Motors, but the other seven are all relatively smaller projects and newer companies. So we run the gamut from startups relative star. 

00:06:06 Speaker 4 

To you know, really establish companies and from a project standpoint, most of these have been in the battery supply chain because that's where a lot of the interest is and the advanced technology vehicles manufacturing program, which is where most of these projects have lied, really focuses on onshoring and reassuring and otherwise beefing up domestic supply chain. 

00:06:26 Speaker 4 

So we've done graphite processing project in Louisiana, a lithium project in Nevada, a variety of the battery projects, both the big ones but also a couple of the smaller ones to enable smaller projects, smaller vehicle projects. 

00:06:40 Speaker 4 

That won't necessarily get the time of day yet from the panasonics, but have to start somewhere and need someone to really fill that need. And you know one of my favorites is just an innovative wiring harness, which doesn't sound all that sexy, but it's it's really interesting in terms of enabling electrification and increasing the efficiency of vehicles to think beyond just the battery itself and how we. 

00:07:02 Speaker 4 

Incrementally improved fuel economy and efficiency through all of the components involved. 

00:07:08 Speaker 2 

Wow, that's that's a lot going on. Couple of things were running through my mind is you were you're explaining that so your government agency loaning lots of money out for a new and emerging technologies. So when you're evaluating these technologies, are you evaluating a return on investment, are you evaluating you know what what are you looking at what? 

00:07:27 Speaker 2 

When when you get that battery harness, that's this innovative new one that's going to disrupt and change the. 

00:07:31 Speaker 2 

World why are they going to the government for funding? Why not private equity? Or why not some other? 

00:07:38 Speaker 4 

I mean we're. 

00:07:39 Speaker 4 

Not competitive with other sources of financing, but we often step in with the technological risk where say, commercial banks are less comfortable, companies will still need to raise equity and we we cannot finance legally, we cannot finance all of a project. So no matter what a company's going to have to have some skin in the game at that's a minimum of 20%. 

00:07:59 Speaker 4 

That is often higher than that in terms of what we feel comfortable finance. 

00:08:03 Speaker 4 

Using the office and the programs are more comfortable, they said, with technological risk. But we're still looking for the financial bones to be there. We have a congressionally mandated, reasonable prospective repayment mandate across our program, so it's not a straight ROI type calculation, but we are looking for the confidence that this loan actually will get repaid. 

00:08:24 Speaker 4 

So we're looking for a variety of of readiness factors is the project. 

00:08:28 Speaker 4 

Technologically ready is it is the product, technologically ready, is it commercially viable? Has the company been able to raise equity in the past? You know, do they actually have a market and how are they proving that market? Is it, you know, just if we build it, they will come or are they actual contracts involved? We have to be able to do an environmental Policy Act review on all of our projects, which means if you're. 

00:08:49 Speaker 4 

You have to have a site picked for whatever it is you're planning to do so that we can make that a. 

00:08:53 Speaker 4 

Estimate so part of what we do and particularly what what me and my team does is we're, you know I five of us work on the transportation projects, but they're about 50 of us in the office that do nothing but help coach potential applicants through the process and talk very specifically about their individual project and what's ready, what's maybe a soft spot that they need to work on filling in when it makes sense to truly apply. 

00:09:17 Speaker 4 

Some companies are ready right away. Others we talked to you for a couple of years before they're ready, and that's fine with us. It's, it's free. It's no obligation. It's. It makes a lot of sense. And we help sort of coach folks up on what any financing and debt institution is going to require, whether it's us or another one. But we are happy leaning in sometimes when commercial banks. 

00:09:38 Speaker 4 

And some of our programs can provide loan guarantees and work directly with banks as Co lenders or guarantors. 

00:09:44 Speaker 2 

Now you made the transition from a public company to to the government side. What's different in in the looking at energy transition and the kind of projects you're looking at from when you were in the private sector, you said you were at GM and other ventures in the past to being on the public sector, looking at this investment, what what criteria has changed? What? 

00:10:05 Speaker 2 

What makes something more exciting for you today than it might have in the private sector? 

00:10:09 Speaker 4 

Well, the interesting thing is that I personally have always kind of had this. You know what makes sense kind of a brain. And so I have worked with private companies. I've worked as a consultant for many companies, utilities and automakers and governments. I've done venture capital. I've done all sorts of things, but all in this particular space. And I'm often the one being the the sort of practical head. 

00:10:30 Speaker 4 

Even in the private sector versus the like, wishful thinking kind of person. So it's an interesting Venn diagram to bring that same. 

00:10:38 Speaker 4 

Point of view to this particular lens. I think the exciting bit of this is the ability to use a much larger amount of capital and direct it toward the needs and the promising projects that we've kind of always seen all along but haven't been able to find their way to the channel to actually make them happen. There's also lots of projects. 

00:10:59 Speaker 4 

Talk to you and like as Chelsea, I love them and really want to see them succeed, but they may not be quite ready for the rigors of our office and our program. 

00:11:06 Speaker 4 

And we have to help you know, coach folks through that too, which sometimes involves pointing them toward grant programs in the Department of Energy or other sources that we might be aware of. So we try to sort of function at the living room of the office or the department a little bit and help provide guidance accordingly, whether it makes sense for that moment in time. 

00:11:26 Speaker 4 

For one of our programs or not? 

00:11:29 Speaker 3 

So earlier you were talking about the difference between technological risk, which seems to be something you guys are comfortable with in technology risk. Could you spell that out a little further? 

00:11:39 Speaker 4 

Yeah, I mean, our different programs have different sort of philosophical aspects. The the manufacturing program for vehicles AT VM is really meant for scaling relatively proven products. So we have some that are sort of edgier cases, you know to use an example silicon and nodes in batteries are. 

00:11:59 Speaker 4 

Sort of working their way up from wearables to vehicles, but that's a space that we're sort of looking at and seeing where we could probably get there pretty soon in the this particular program. 

00:12:09 Speaker 4 

Things like solid-state or sodium batteries or others are really interesting to us, but haven't yet quite proven their way into transportation. And so we're keeping an eye on them, but it's a little bit further out for this particular program. Most likely a lot of this has proven through off take with a AV battery company or an automaker or whatever. So it's really up to the industry approved. 

00:12:30 Speaker 4 

Us when it's commercially ready versus we see the value of the technology, but maybe not yet for that use case. 

00:12:37 Speaker 4 

We have another program that really is meant to be more first of a kind of commercial scale projects. So it leans in a little bit differently. It's it's not a transportation specific program. We've supported everything from solar panels to nuclear power plants, but it's very much energy projects that reduce avoider sequester greenhouse gas. But it really wants more of that. 

00:12:57 Speaker 4 

Innovation. So sometimes it's more of a programmatic fit than you know a particular one-size-fits-all technology lens, but overall you know we're looking for across all of our programs, projects and technologies that are at technological writing this level 8. 

00:13:13 Speaker 4 

For some of the nerdier folks, you know, it's really meant for commercial scale, but we cannot statutorily finance R&D proof of concept, pilot manufacturing or deployment those sorts of things. And practically speaking, we have to be able to diligence both what you're doing and how you're doing it. So if you're making something you need to be able to make it somewhere and at least. 

00:13:34 Speaker 4 

Pilot scale so that we can diligence the process, not just evaluate the product itself. It's one thing to say, yeah, we believe you visa there, you don't have to convince us that it's going to happen or it's going to continue to. 

00:13:45 Speaker 4 

Grow, but we still have to validate that your particular company and team can do it and pull it off. So there's a whole bunch of different angles to simply saying is something ready? Yes, but. 

00:13:59 Speaker 3 

And before the show, we spoke briefly about a case study. You had an example with blue Oval. Can you tell us a bit more about how that went? Because that's clearly a little bit further advanced. 

00:14:09 Speaker 4 

Yeah, I mean, we're certainly seeing a lot of automakers that are partnering with battery companies to help secure their own supply chain and sometimes because they want a specialized product for their particular EV versus somebody else's. So we've seen a variety of of those folks partner up. And so far as you know, we've financed two of them, Altium and blue Oval. 

00:14:29 Speaker 4 

They're both somewhat similar in partnering with the Korean Battery Company and in in our particular project case, each of them has three gigafactories that they are deploying, and you know, Ford obviously is trying to serve the mochi and the Ford Lightning and their other. 

00:14:45 Speaker 4 

But we that was one of our more recent announcements of summer ish this year. And so it's been very exciting to help take a project that might otherwise happen at some scale and amplify it to help beef up the supply chain. 

00:14:58 Speaker 4 

In the US. 

00:14:59 Speaker 2 

I guess when you're beefing up the supply chain, right, what does that really mean? I mean, I I watched the auto industry coming to Greenville, SC, it really built a cluster around BMW opening facilities there because there wasn't really an auto industry. And then that region of the country and suddenly there's a a very healthy auto industry there I would consider. 

00:15:19 Speaker 2 

What does that mean? Beef up the supply chain for electric vehicles. 

00:15:23 Speaker 4 

Yeah, sometimes it's an onshoring. Sometimes it's a, you know, enabling larger capacity of something that might already be happening at some scale. In the US, we are certainly seeing in the wake of COVID and other factors that there are supply chain risks to companies trying to grow and grow pretty quickly as we're trying to do in electric vehicles. So we are seeing more of a pattern of companies. 

00:15:44 Speaker 4 

Wanting to regionalize their manufacturing so they'll want to do a Gigafactory or more in the US, but also in Europe and Asia and and things like that. So some of. 

00:15:53 Speaker 4 

Is a geography type of of approach where you know reducing the supply chain risk and also just the logistics from a climate and economic perspective close or something is the, you know the the less distance over which you're shipping it, the more it makes practical sense. But there's also speed and economics and other other advantages. 

00:16:14 Speaker 4 

So some of the some of our effort is around that kind of thing and helping it to do to happen more quickly or in a a better way. I mean obviously we have a lot of Intel ourselves that we bring to the party when when an applicant comes to us and we sometimes propose ideas to help make their. 

00:16:30 Speaker 4 

Project better or lower risk or or whatever the case may be. But we also want to try to help establish things that are not really happening here at all, or they might be happening elsewhere. They might be really early first of a kind, so you know the wiring harness cell link company was certainly an example of that. It's wiring harnesses are being made in a very. 

00:16:51 Speaker 4 

Sort of. You know, hand built kind of way across the world, but not that much of it is happening here and not in an automated way. So we were happy to sort of bring a first of a kind project to the US versus having it go elsewhere to help enable electrification here. 

00:17:08 Speaker 2 

Many times in this program we get to the IRA at some point, and part of that legislation is onshoring right bringing things here. So is your initiative or directive that you're talking about related directly to that or is this a step cousin or some some distant element? 

00:17:25 Speaker 4 

No, I think they're. 

00:17:28 Speaker 4 

You know they're not codependent because our office in these programs existed well before, and that's all. You know, the supply chain aspect has always been a priority of this program in this office. But certainly, you know, they are, you know, parallel and mutually supportive types of aspects that the this, this administration is also very supportive and and really wants to help onshore. 

00:17:49 Speaker 4 

And beef up supply chains. And so the fact that we already had a mechanism through which to do it and the IRA helped add financial capacity to that mission certainly has been really exciting for us to help grow what we were already doing and and you know, increase it. 

00:18:06 Speaker 3 

So. So what's interesting about this is you're talking in a very confident way about reducing supply chain risks. You talk about hundreds of billions being invested. Things are happening more quickly and you've given us some really big names that are playing in this space, including GM and Ford. 

00:18:22 Speaker 3 

Surely this is a stable marketplace. Everything's happy. We're all good. We can, you know, go to bed and sleep quietly. What keeps you up? 

00:18:27 Speaker 4 

We all know better than that. 

00:18:29 Speaker 3 

What keeps you up at night? What is it that worries you about where we are on this journey? 

00:18:34 Speaker 4 

Yeah, I mean, I am an insomniac, so I have a lot of wee hours to think about these things. I mean, I think it's a combination, you know, something that concerns me that I see sometimes less and certainly not in this office and less from the government perspective. But I hear a lot over the years of like, oh, it's a rolling snowball like we can all go off on holiday now. And I have seen all of those. 

00:18:55 Speaker 4 

20 years in electric transportation and know well how much work there is still to do and believe that it's really up to all of us to make sure that that snowball continues to. 

00:19:06 Speaker 4 

All because it is not yet a foregone conclusion, and so that take concerns me whenever I hear it and I I hear it a little too often. It's inevitable, and everyone's going to be the next Tesla and all of those sorts of things at the same time, there's a huge opportunity attached to that, and this is a really distinct moment in time. 

00:19:27 Speaker 4 

For all of these, supportive factors are kind of coming together and I also know well that that won't last forever. So the how do we make the most with the moment we have is lots of what I think about in the wee hours. 

00:19:40 Speaker 2 

One of the things so making the most and going there but you mentioned. 

00:19:45 Speaker 2 

Earlier in the your answer about automation and bringing automation in right and so I can't go through a day without someone freaking out about AI and their jobs getting replaced and things like that. But I also, you know think of a giga plant factory or the automated wiring harness. 

00:20:00 Speaker 2 

How much do jobs weigh into this? Right? Because as you automate you, you hire less and less people. So there's there's a clean product of an EV potentially right in the environment. So there, there's a climate goal. 

00:20:12 Speaker 2 

But just because it's unsure doesn't mean there's lots of jobs of some of these highly automated. 

00:20:16 Speaker 2 

Plants, is that a misconception or is that a true statement? 

00:20:21 Speaker 4 

No, I look, I think it's. 

00:20:24 Speaker 4 

I think there are kernels of Fair concern. I also think from a broader perspective these things feel like they're happening really fast. But in the grand scheme it's a little bit more slow than some of the concerns reflect. But I would say that absolutely jobs are a huge priority in our office. We have an entire team that's dedicated just to making sure everyone of our project provides. 

00:20:44 Speaker 4 

With jobs and fair. 

00:20:45 Speaker 4 

Wages, high paying jobs, all of those things, and certainly from a community benefit standpoint, community benefits plans are required for each of our projects and sort of justifying and explaining how you're not just plopping yourself into a community, but really working with that community and creating apprenticeships and working with local community colleges or whatever the case may be for your particular project. 

00:21:07 Speaker 4 

But this isn't a mission to just throw capital at something and automate something, so therefore we don't need people to do it. We're always gonna need the people, and we're very interested in how companies and projects are bringing their employees and the local communities along with them and helping to train up a new. 

00:21:24 Speaker 4 

Force and some of the, you know, acceleration of all these opportunities. By definition, there's so much more happening than otherwise. Would that even if a piece of it is automated in some way, there's still a need for a whole lot more people to actually enable all of these projects. And we hear every single day how folks struggle to find enough. 

00:21:44 Speaker 4 

Employees and enough construction labor or electricians and all of those types of things to enable these projects. So you know, we definitely pay attention to those types of concerns. But I also want to tamp down a little bit of the fear and reassure folks that we really are looking at that and trying to enable. 

00:22:01 Speaker 4 

As many good jobs as possible. 

00:22:03 Speaker 3 

I was an industry event recently where one of the biggest issues raised that hasn't happened yet, but it's clearly starting to brim up and emerge is skills. You know, we're fundamentally changing some of the fairly principled basic principle jobs like mechanics, you know, mechanics now need to fundamentally learn new skills, you know, let alone construction and the batteries. 

00:22:24 Speaker 3 

The side of things that you guys are involved in, do you have anything that supports the sort of skills development side of this space? 

00:22:31 Speaker 4 

The Department of Energy does. We don't. Our office does not provide financing for training, but we do have programs within the DOE that do and certainly other aspects of government are supportive of the the training and retraining and all of those type job development types of things. But you know certainly we've seen you know almost everybody working on. 

00:22:50 Speaker 4 

EV's today. 

00:22:51 Speaker 4 

Was working on internal combustion yesterday, so you know we we have absolutely a track record that demonstrates that it can be done. But you're absolutely right, whether it's electric vehicles or some other technology. You know the whole. 

00:23:04 Speaker 4 

You know, green jobs effort still has to continue to be supported to, as I said, bring all of those folks along into these new projects and new technologies. 

00:23:14 Speaker 2 

What? What is the long pole in the tent for brand new EV's to the North American market, right? Cause you you said it's not. The snowball may not be automatically rolling down the hill, so it's it seems like it started. There seems to be momentum, but what are some? 

00:23:27 Speaker 2 

Of the risks. 

00:23:29 Speaker 4 

Yeah, I mean it's it's not that different than it always has been. You know people can't buy what is not available. So it's definitely getting better, but there's still a product diversity aspect that needs to continue to grow. There are 1,000,000 different types of internal combustion vehicles and brands and performance and price and all of those things. 

00:23:49 Speaker 4 

And the same has to become true for electric vehicles. And as I said, we also need to not just focus on the light duty personal vehicle, but also shared vehicles and and especially transit and those types of things as well as goods movement. I mean, shipping is a huge climate in. 

00:24:06 Speaker 4 

Fact and and same thing with the economic impact. I mean one of the neat things about electrification is it keeps a lot more money in the local economy, it's domestic energy, it's cheaper energy, there's a variety of of benefits that go beyond just like Teslas are. 

00:24:21 Speaker 4 

Fun to drive or? 

00:24:22 Speaker 4 

Whatever the case may be, so you know, that's definitely one of the. 

00:24:26 Speaker 4 

Pieces is just. 

00:24:28 Speaker 4 

Bringing more to the market so that people can adopt it, awareness for as much like I sit in California, we just topped 24/7 percent sales of EV's in the last quarter. Things are moving fast here. We're kind of the Norway of the US, but you know, there's a lot of the country and a lot of consumers and a lot of folks that just don't realize EV's are possible. 

00:24:48 Speaker 4 

Are viable. There's a lot about this that is a very social technology. I'll believe it works when I see my neighbor has one kind of thing, and so the awareness factor really has to continue to grow. 

00:25:00 Speaker 4 

You know, and that's a long slog. You know, we sort of think ohh put out a nap and everything will take care of itself. And that's not the case either. So a lot of the good things are happening there, but we can't give up on that or assume that from our little ecosystem that's obsessed with EV's that we're, we know, all about them. But that doesn't mean that everybody across the country, especially one as big as the US. 

00:25:20 Speaker 4 

Really understands them and then certainly the, I would say the retail aspect still you know people are going to sell what they're comfortable with and that's a whole constituent base that we have to bring along with us as well and. 

00:25:32 Speaker 4 

Educate dealers have to get comfy selling EV's. If we're talking about retail passenger cars and you know, they're that's not what they're used to. It's not what they're comfy with in a lot of cases, and they're gonna sell what comes easy to them. No one's gonna be great at selling something that they don't understand themselves. So there's a lot of finger pointing about that aspect. That's sort of. 

00:25:52 Speaker 4 

You know, assumes that dealers are malicious and that's not the case. They're just trying to get through the day and pay their rent too. And so training and getting that that constituent base comfortable is going to be really important as well. And then obviously what what we do on on this side of the office this you know the, the, the, the LP. 

00:26:08 Speaker 4 

Outside is helping to enable a lot of those types of things by making sure that the manufacturing is there and that there's, you know, business case support and and those sorts of things. So it's sort of all hands on deck to. 

00:26:21 Speaker 4 

Make it work. 

00:26:23 Speaker 3 

So that there's a risk that someone listening in from the outside could go well. This is all about risks and concerns and worries. What really excites you about this space and the the transition to electric HTV's for me is amazing. But you know what the things that are exciting you at the moment. 

00:26:38 Speaker 4 

That that is what excites me. Like the easy stuff is a little bit boring to me. After 30 years of doing it, so I don't, you know, when we talk about risk, it excites me because we can fix them. So it's not a matter of trying to make people concerned about it. It's that, yeah, we have to recognize these are there or else we can't fix them. So the more we have. 

00:26:59 Speaker 4 

Yeah, I'm. I'm big on real talk and candor. As you can tell. So acknowledging them helps bring people's attention to it so that we can address it and fix it and ameliorate those risks. 

00:27:10 Speaker 2 

How important is it for an EV to be American made or American assembled in this whole process? Right. Because there's there's a lot of companies that seem global, and EV seems to be a pretty global technology, right where you know, batteries may come from China. The resources may come from Africa or wherever you're getting your, your, your parts, is it? 

00:27:30 Speaker 2 

An assembly question that's really important. Or does the full technology really need to be in the US to be really exciting for your platform? 

00:27:38 Speaker 4 

Well, for the loan programs office, we are happy to work with international companies, but the projects themselves have to be based in the US but we have examples of Canadian companies in our pipeline. We have in Korean companies, obviously the the graphite project in Louisiana I mentioned is getting its feedstock and the mining is in Mozambique. 

00:27:58 Speaker 4 

But the processing is here and we're financing the processing. So we do work with a variety of companies around the world and we are also starting to have conversations with other export credit agencies. So you know we we have an MOU with K Shore, which is the Korean Insurance Credit agency. 

00:28:17 Speaker 4 

To work with them about some of the Korean companies that want to onshore into the US and our starting conversations with some others. So we take a very partnering approach wherever possible. But the programs themselves dictate that whatever projects we finance have to happen here. And then obviously from the, from the consumer standpoint, they're interested in the the EV tax credit. 

00:28:38 Speaker 4 

This does require that the vehicles are assembled here and that the batteries are made here, so there is certainly a competitive aspect about the onshoring of some of these activities as it relates to success in the marketplace and even for us, therefore, a reasonable prospect of repayment. 

00:28:55 Speaker 3 

I I'm starting to feel uncomfortable because we got to that point in the show when we haven't talked about charging electric vehicles. My obsession is that transition away from the liquid fuel. Everyone understands it to this world of charging. What do you see going on in the US that's really driving the charging agenda? 

00:29:12 Speaker 4 

I mean, there's a lot of financial drivers aside from our office which can finance both the manufacturing of them under this manufacturing program, but also the deployment of them under our other. 

00:29:23 Speaker 4 

Program. There's 7 1/2 billion dollars that have been dedicated to this through the Joint Office of Energy and Transportation by the administration and the the IRA and and the infrastructure bill. So there's quite a lot of momentum behind the charging as well. It also is a challenging space. I mean it's a challenging space to for the business case and certainly all of the. 

00:29:43 Speaker 4 

Effort so far has been focused on light duty vehicles, which still need some charging to be built out in some. 

00:29:48 Speaker 4 

Areas, but a lot of it can happen at home and work, and folks tend to forget that the vast majority of charging is actually a whole lot simpler and closer to charging their your phone than filling your gas car. But we're just starting to get going on things like medium, heavy duty vehicles and shipping and trucking and those types of logistics, warehouses and and stuff like that. It's less visible. 

00:30:10 Speaker 4 

But it's really, really important if we're going to electrify those sectors and those have generally less of an ability to charge at home and they can do overnight charging, of course. But the over the road stuff is more complex for sure, than how do I enable somebody to charge their Hyundai Ionic? 

00:30:28 Speaker 3 

Which which then leads to the other favorite question in this charging space. What's going on with the grid and the electricity that's needed to supply these? You know, huge vehicles all over the country transitioning to electric. Are you coping? Is it all going in the right direction? Can we be confident that there's going to be energy and wires in the right places? 

00:30:49 Speaker 4 

Yes, you should be confident because there are stubborn folks like us. I mean, yes, there is a fair amount of it that needs to be done, but again I find I mean I've always heard and like there's never been a time before the sky is falling aspect with respect to the grid. But again, this is happening in a very localized way and a fairly slow pace. 

00:31:10 Speaker 4 

I mean, we're growing year on year and that's all awesome, but it's not like you know, it's not, it's not leaps and bounds. We're not going from 10% to 90% in. 

00:31:18 Speaker 4 

Two years, so the utilities are all on board planning for electrification. They're all seeing what's coming in their particular area. We have more than 3000 utilities in this country. So but there's, you know, 20 of them that make up the bulk of the EV market areas for in the most in in Maine and they all have been planning. 

00:31:37 Speaker 4 

For this for. 

00:31:38 Speaker 4 

20 years in some cases or longer. Some are a little bit newer. As Ivies grow into their areas, but they're all attacking this and then obviously we're looking at it from our side. There's a variety, there's a grid deployment office in the Department of Energy. Our office can support transmission and electrification of the grid side and those components. 

00:31:57 Speaker 4 

I mean, one barrier that we are hearing and trying to figure out how we can help is Transformers. I mean the the utility interconnection times and the lack of transformer availability and the wait times for those definitely impacting charging, but also every other thing that needs a transformer. So we're sort of hitting up all those companies on a regular basis saying, hey, we can help you want to scale in the US. 

00:32:18 Speaker 4 

And same thing with some other weird little supply chain rabbit holes that we hear about from all these conversations we have. We've had charging companies say, you know what, there's it's hard for us to get our hands on liquid cooled. 

00:32:29 Speaker 4 

Cables. There's few companies in the world that make them, and they're hard to get fine. We're happy to call up every company that makes one of those and ask them if we can help finance some increased capacity on their side. So we we deal with a lot of inbound, but we also try to do some strategic outreach to help enable these things too and not just sort of trust that somebody's got their eye on everything. 

00:32:51 Speaker 3 

That's incredible. The the detail you have to go through to make these supply chains work. 

00:32:57 Speaker 4 

We're always looking for Intel. 

00:32:59 Speaker 2 

It sounds like though, I mean, you know, besides herding cats, there's there's a lot of it. You know, I always, you know, to say it's kind of like the Wild West, right. So you've got you're working in big deals. So I think that narrows things down a little bit just because the the scale of what you're working on, there's probably fewer. 

00:33:17 Speaker 2 

You know fewer things you're focused on, but who's orchestrating? I mean, is, is this just kind of happening on its own or is there, is there an orchestration plan to make EV's better? Like who, who, who's pulling the strings? Is it? Is it the private sector who's got their own agenda to pay shareholders? Is it the government looking for climate change or maybe employment like? 

00:33:36 Speaker 2 

Who? Who's ultimately the buck stops here? 

00:33:39 Speaker 2 

Or GAIL. 

00:33:39 Speaker 4 

You know, it's there's not a one. I mean, it is really, it is really all hands on deck. You know, I come from watching this be mostly consumer driven for more than 20 years. I mean it it's it's one of the unique aspects at least for as I said private electric cars, not the trucks and buses and things. 

00:33:57 Speaker 4 

For the 1st 20 some odd years it has been consumers pulling on government and industry and automakers saying please like we want electric cars, maybe not in the millions of volumes you're thinking, but you got to start somewhere. I mean that's why there was such a consumer driven movement when the original EV's. 

00:34:13 Speaker 4 

Were were crushed. 

00:34:14 Speaker 4 

So that's definitely a piece, but now we're also transitioning to, you know, those folks have their cars and things, but there's a whole lot more consumers that don't have that awareness. And so consumers are absolutely a piece that they've been part of the pool. We also have to do some of the pushing folks like the California Energy Resource Air Resources Board have absolutely been instrumental in all of this. 

00:34:35 Speaker 4 

With the with the original EV mandate that is now the advanced Clean Cars program and accelerating that into the Advanced Clean Trucks Flow Program and one that applies to fleets and. 

00:34:44 Speaker 4 

So they're, you know, these sort of mandate driven and goal driven from, you know, President Biden's goal of 50% EV sales by 20-30. All of those types of policy factors certainly help as well, whether they're goals or actual mandates. And then obviously the industry itself is the sort of key enabler because people can't buy what's not available. So. 

00:35:04 Speaker 4 

You know, there's carrots and sticks involved in how we get that industry there. Some have been more or less willing to come along at different paces. 

00:35:11 Speaker 4 

But we need all of them to make it work, whether it's automakers charging companies, utilities, you know, all of the above, as well as transit agencies and folks that have a harder business case and a lot of a lot of ways, you know, from a profit perspective, but still need to walk toward electrification or hydrogen and are working on that as well. And same thing as I said on the goods. 

00:35:32 Speaker 4 

Inside, you know we we need to electrify or you know whether it's through grid electricity or hydrogen. Pretty much everything that has fossil fuels in it today and some sectors are harder to decarbonize than others. But we have to make sure that we're walking all of them along at a pace that's feasible. 

00:35:50 Speaker 2 

Are are you seeing heavy trucks being able to be produced at scale? I mean, I always use California as an example as an early mover on on in the trucking industry and changing that. I mean truck trucking has always had a strong lobby and a strong passion in in. 

00:36:03 Speaker 2 

The US politics. 

00:36:05 Speaker 2 

Goods are fundamental. Getting them, you know, across the country. 

00:36:09 Speaker 2 

So where is that and what's the capacity to deliver affordable solutions for for industry? 

00:36:16 Speaker 4 

Yeah, I mean it's happening. But when we think about trucks, we usually think about sort of the Class 8 semi trucks, the long haul stuff and that's one of the harder use cases when it comes to trucking electrification. But there are a lot of other segments that are just not that visible to us. So you know in terms of you know the pace, the segmentation of trucking. 

00:36:36 Speaker 4 

One of the things that's electrifying sooner are drainage trucks. They're so big, but all they do is go from. 

00:36:41 Speaker 4 

Ports to downtown. 

00:36:43 Speaker 4 

So like 20 miles in the case of the port of LA to downtown LA, just back and forth. And that's sort of all they do. So they're not trying to do hundreds of miles at a time cross country. And that's a segment we can electrify sooner. We're seeing the same thing in the bus segment, both transit and school buses and so on and so forth. The box trucks, the stuff that delivers stuff to your house. 

00:37:04 Speaker 4 

Those are also able to be electrified and are electrifying a little bit sooner than we may see mainstream long haul trucking electrify it's starting. But those numbers are still pretty small compared to things like the Amazon vans, so each of them requires. 

00:37:19 Speaker 4 

You know, there's some common supply chains, but each of them requires a slightly different strategy and expectation of pace than assuming trucking looks only like one thing. 

00:37:29 Speaker 3 

Yeah, this is a theme we've heard before, which is the idea. There's going to be some segments which you can pick up and adapt much faster and therefore you've got some pioneers. The school buses are always a good example from the US What do you think the really hard to electrify segments look like? I mean, what about excavators and mining equipment and all those really nasty. 

00:37:49 Speaker 3 

Heavy, you know, power hungry things. You know, refrigerated lorries are you? Are you seeing hard work going into those spaces as? 

00:37:57 Speaker 4 

I am. Yeah. I mean they're those are also different volumes, but yes, there is quite a bit of work going into mining. We are seeing a lot of actually refrigerated lorries and those sorts of things, reefer cabs or reefer trucks. So each of those things is happening. But you know the volume of mining vehicles versus you know. 

00:38:17 Speaker 4 

Long haul trucks, that's different. So we're seeing different strategies to to electrify those, but given what they do like they, they actually benefit quite a bit from region breaking. And when it comes to their particular duty cycle, given all the weight and the up and down hill and that kind of thing. So what seems really, really hard, some of them actually have. 

00:38:37 Speaker 4 

You know a weirdly unique, conducive use case that goes with it. It enables it sooner than we might require agricultural vehicles, tractors and things. Or another piece that we sort of see regularly. And then, you know, on my last trip to Norway, I was very happy to see that in Oslo, one of their one of their latest things are always ahead of us. And so I go there to see what we'll be talking about in five or 10. 

00:38:58 Speaker 4 

Years, you know, they are mandating 0 mission construction sites and so all the backhoes and all of those types of things for construction are having to be electrified there and that, you know, often what starts in one place and ends up being able to grow on others. Electric fairies are also foregone conclusion there. There is not a lot of anything else. 

00:39:18 Speaker 4 

Happening. And so those types of technologies will become exported to other areas of the world based on where they get started. So these things are all happening, but we need to figure out how to support them in other regions. 

00:39:31 Speaker 3 

And one of the questions that I like to ask all of our guests is, you know, what's your personal mode of transport? What's your decision around how you travel around? 

00:39:40 Speaker 4 

Yeah. So I I do. Everyone finds this funny. I do still own a little 20 year old tiny little gas car. It's my last car. It's a Saturn. That brand doesn't exist anymore. But the last car I bought when I worked at General Motors, I actually travel much more by foot and bike. And so my EV is actually an. 

00:39:57 Speaker 4 

Electric bike. 

00:40:02 Speaker 3 

So at this stage we've been on quite a journey through billions of dollars that you have at your disposal to to present, to willing companies at the right stage in their technological readiness. We've been on a journey through some of the people who have, you know, taken that benefit from the loans program. 

00:40:20 Speaker 3 

We've explored some of the ways that you're reducing risk and supply chain and make it beefed up so we can handle the growth, but you you highlighted, you know you're very you're very candid about the fact that we still have some hard work ahead of us. We're on quite a journey and it's been incredible to get this update on where we are on the journey. So thank you ever so much for your time joining us today. 

00:40:41 Speaker 4 

Thanks for letting me crash your party. 

00:40:44 Speaker 2 

For audience, we hope you've enjoyed this content as much as we did in making it. It's been an amazing conversation. It's always interesting to hear you put the billions word in there. It gets even more entertaining and interesting for most of us, if you like the content, don't forget to subscribe and follow us. Check us out on YouTube. We want followers there as well. There's unique content there that you can get and that's the only place you can get it. 

00:41:04 Speaker 2 

And that brings us to an end of another episode of the EV series. We'll see. 

00:41:07 Speaker 2 

You again next time bye bye.