Welcome to another episode of the Solar Podcast. Today Dave is joined by Loren McDonald, the founder of EV Adoption. Join us as they discuss the shift from internal combustion engines to electric vehicles, smart charging, the obstacles surrounding solar power and the exciting potential of bidirectional charging. It all starts now on the Solar Podcast.
Dave Anderson (00:28):
Well, welcome back to the Solar Podcast. I'm Dave Anderson, the host. I'm thrilled to actually be joined today with Loren McDonald. Loren McDonald's a frequent speaker. His content can be easily consumed and found online. He also spends a lot of time on stage. He's actually spoken to many different audiences. Certainly is an expert in the space of EV, but is an outdoorsman, is an avid recycler, is an some renewables energy a person. So we're thrilled to have him on the podcast. And obviously we've been talking a lot about electric vehicles as of late because it's a hand in glove relationship between solar and electric vehicles. So we're certainly going to dive into that. But we're thrilled to have a huge electric vehicle component, a huge outdoorsman, a huge speaker that's online to be able to join us here on the podcast. Loren, thanks so much for coming on.
Loren McDonald (01:13):
Dave, thanks. I'm really honored to be on, and as you said, it is such a great synergy between solar and electric vehicles. Obviously one of the things that I'm sure we'll dive into is just the idea of around the grid and the sources of energy and the greener the grid gets, the more powerful, if you will, and the more advantageous the transition to electric vehicles is. So it's a great overlap and synergy between the two. So really excited to be on today's podcast.
Dave Anderson (01:44):
You and I talk a lot about some of the same stuff and we've arrived at our own conclusions as it relates to electric vehicles and energy and renewables, these sorts of things. But we have pretty significantly different backgrounds. So I grew up in a small coal mining town in Montana. You're from the Bay Area, so I'd love for our listeners to get to know you a little bit more. Tell us maybe a little bit about your background and maybe how that was influential and the direction you took professionally and personally.
Loren McDonald (02:09):
Yeah. So I grew up in Oakland, California, so most people have probably heard of Oakland because of the sports teams who are increasingly are leaving Oakland for other areas like Las Vegas. But I grew up obviously in northern California, which is arguably one of the hotbeds of progressive thinking and the environment and social activities and things like that. I grew up in the sixties where there was a lot of politics and a lot of change happening, the hippies and everything like that. And my parents, we also had a cabin up about three hours from the barrier where we would literally go to every weekend and it was up there in the woods and my sister had horses and I had dirt bikes and rifles and chainsaws and I learned to love and live in the out outdoors. And that really formed a lot of my thinking.
(03:21):
I was also a big fan of people like Teddy Roosevelt and others who really instituted a lot of the early national parks and ways to think about moving the environment forward. Later I got into backpacking and things like that, so I always had this predilection towards the environment and recycling. I was one of those people that would walk along the roads, whether it was in Oakland or at our cabin and pick up beer cans and things like that, and then take it to the recycling center and buy Black Sabbath records with it or whatever I was in into at the time. And I was just always being in that environment, pun intended, just was always interested in, as you said, in recycling and ultimately EVs. I mean, back in the day, EVs didn't really exist, but I knew they were the future at some level. So even though I wasn't in the industry back then, I always had a sense that would be part of my future.
Dave Anderson (04:33):
I grew up in a place where, I mean literally recycling is not an option. So if you grew up in a prairie town in Montana, I mean if you were to recycle, you'd have to collect the materials, the waste that you'd want to recycle and then ship it a very, very, very long way away. I mean, the cost benefit analysis is almost none, or it's negative I should say. So you grew up in a much different place. So I remember I personally lived in northern California, the Bay Area for better part of a decade or more than a decade, I should say. Not the better part. More than a decade in most of my adult life. And that's where most of my upbringing and raising of my kids happened. And it's just a much different sentiment. In fact, I believe that the Bay Area in California, they boast that they recycle far more than 50 or 60 or 70% of all of the waste material, which is far more than anywhere else, which I think is actually really commendable.
Loren McDonald (05:35):
Yeah. I mean there are recycling centers everywhere. And then really the big shift, which is I think in most markets in the US now is we have three different trucks that show up. Our pickup day is Monday, so we have the black can, which is trash. We have the blue can, which is all the recycles and the green, which is the yard waste. And I've actually got it down to the black bin is literally, I only put a couple of inches of things that everything else goes into those other two bins. So ultimately that was a big shift so that you didn't actually have to drive those aluminum cans and bottles and things 10 miles away to a recycling center. They come to us now, which I think was a huge game changer.
(06:20):
The real issue, and this is obviously not what we're talking about today, Dave, but the real challenge now is to your point of where are these things being recycled? And a lot of it is way overseas and stuff, and they're not buying those things back from us anymore. So that's become a real challenge. But that's a topic for another day.
Dave Anderson (06:39):
It's a nice segue though, and I think the thing that I really wanted to call out was this idea of this being socially responsible. And I think most people that recycle have a sense or a feeling that they're doing their part and that they're trying to be socially responsible. You growing up in the Bay Area, that's something that you would've been raised with. The way I was raised with it was a little bit different. So I grew up surrounded by outdoorsmen in Montana and they just had a certain respect for the outdoors and wanted to take care of it. And many of them were farmers and ranchers and agriculturalists and wanted to take care of the land because the land varied, literally is what took care of them and provide for their families. So I think that we all feel like this sense of stewardship and responsibility comes from different sources in different ways, and we all want to do things that are impactful.
(07:21):
I think some people are oftentimes disappointed to find out that recycling by itself in terms of your social impact, in your carbon footprint is a pretty minimal thing relative to so many other things. The two biggest things being obviously the consumption of energy in your own home. And the second thing is how you transport, how you get around, whether you're using internal combustion engines or whether you're using electronic vehicles and how you charge the vehicles, whether you're using public transportation, whether that public transportation is from renewable sources. So these are the things that are far more impactful.
(07:55):
But I don't think that they have had as good of publicity, as good of PR as recycling. Most people generally have accepted that recycling is a good thing, but EV adoption, I think that there are people that are still arguing that it's not necessarily better for the environment, for example, or it's not as impactful. And a lot of the work that you do is to help educate people about the importance of electrifying our homes and electrifying our vehicles. So I'd love for you to talk a little bit about some of the initiatives and things that you work on to really just be educational as it relates to these sorts of things.
Loren McDonald (08:35):
Yeah. I mean, the first thing is people often call me an EV advocate. And when I started out, that was probably a reasonable description, but I actually just took a step back and decided to pivot away from that title and position rather, and really wanted to be thought of more as an analyst. And that was really the big shift. In other words, to your point, Dave, when I started out, it was all about, "Hey. I've got to promote electric vehicles as the future and that." But as I got more and more into it, and it became not just like a hobby and a passion. I was full-time employed at a big company as actually a marketing evangelist. And that played over into the electric vehicle side. But the more I got into it, I realized that I wanted to again, be more of an objective analyst and actually try to step back and understand what is the best way to reduce greenhouse grasses from transportation.
(09:44):
Because ultimately I believe the goal is not necessarily electrification. That may be how we get there, but the real goal is we're trying to reduce greenhouse gases from all sources, but in this case from transportation. And the answer to that actually is not just electric vehicles, it's actually, and this is one of my big points I just made on stage on Friday, is we actually have to reduce how much we drive gas powered vehicles. Because even at the rate that we're going with EV adoption, and if we hit some of the goals that we're targeting with the new APA proposed regulations, there's still going to be about 270 million gas powered vehicles on the road in 2030. We'll only lose about 10 million in the next seven to 10 years. And Dave, this is America. We're not going to get rid of 150 million gas powered vehicles just out of people wanting to do it to reduce their greenhouse gases from their personal transportation.
(10:57):
So we've got to get people actually not just adopting electric vehicles, but we've got to actually get them out of gas-powered cars. We've got to get them to reduce what we refer to as VMT, the vehicle miles traveled. So most people will drive a car 12 to 14,000 miles a year. I hate averages, but that's the average. It varies. From your home area in Montana is probably closer to 16,000, in the Bay Area, it's like eight to 10,000 because people can have other options and don't have to drive as far.
(11:38):
The answer, and to get back to my point is that I wanted to actually talk about what is the solution, what is the actually roadmap to reducing greenhouse gases? And EVs are a big part of that, and that's my focus. But the real answer is we have to do a lot of other things as well. We got to get people on bicycles and walking back on public transportation, driving less. There's a whole slew of things with it that we actually have to do.
Dave Anderson (12:05):
Yeah. You might actually be highlighting one of the real challenges that the EV space has in terms of being able to push the proliferation of electric vehicles because that's obviously part of it as well. I mean, if I drive an electric vehicle in terms of the miles I'm driving, I'm not driving a combustion engine by definition. I might have one, but I might not be driving in. So it's the miles traveled. So I think you might be highlighting one of the real issues that anytime you have a transition or a change, sometimes you start with the proposed change and then you try to justify it. Confirmation bias is one of the things that they call that. So I think what you're talking about here is you're talking about what's the real root problem that we're trying to solve for here, which is the idea of trying to reduce individuals carbon footprint and impact and reduction of emissions and greenhouse gases. And I think that that's the right approach. It's the noble approach.
(12:54):
I think on this podcast for, time sake, we probably make the leap that most people that are listening have already taken or accepted that is what we're trying to solve for. And the fact remains that it's not universally accepted, but the fact still remains that reducing or electrifying your home and then pulling a renewable energy into your home is the number one thing that you can do to reduce your carbon footprint for the average homeowner. And the second thing is obviously making a transition from an internal combustion engine to an electric vehicle. Those are the two most impactful things and probably represent 60 or 70% of any individual's carbon footprint. That also makes the assumption that, again, you're charging your vehicle from renewable sources that assumes that you're getting all of your power from renewable sources and-
Loren McDonald (13:42):
Or at least a significant percentage of it. Yeah.
Dave Anderson (13:46):
Yeah, that's right. So Loren, I love your approach is really to talk about it from the top level, which is what are we really trying to solve for and what are the tools at our disposal to solve for that, electric vehicles is one of those things. So maybe you can help maybe further develop that concept or that idea for our listeners here as well. So what are the high level talking points once you've helped a person understand that we want to reduce greenhouse gases, what are the talking points as to why you're advocating strongly for EVs as part of that solution?
Loren McDonald (14:26):
Yeah. I mean, to your point, when we think about gas powered vehicles, fundamentally we think about those tailpipe emissions. So we think about the burning of gas or diesel and those emissions that come out. If any of your listeners are old enough to remember photographs of Southern California and Los Angeles back in the sixties and seventies, it was almost dark during the day. So one of the things that I think, Dave, that the EV advocates in industry have missed is they focused on GHGs. But your average person, you can't see it. You can't feel it. I mean, sure, maybe you can internalize it when you think about how it's impacting climate and things like that. But reducing air pollution and even noise pollution is something that an average person can actually see in feel.
(15:37):
So I think from an education perspective, obviously the primary reason to transition electric vehicles is to reduce or eliminate those tailpipe emissions. A whole separate topic is obviously the life cycle emissions, which is something that people who are not necessarily on board the transition electric vehicles to bring up first and foremost. All of the energy and everything that goes into producing the batteries and the battery cells and those types of things. And a lot of them are made in Asia and China and places like that that are shipped over here. So that gets into a whole separate issue of actually truly understanding the lifecycle emissions, which gets again into the sourcing of the EVs as well as the grid sources. How are they actually being charged, being refueled, replenished, if you will.
(16:36):
So that gets you into much deeper conversation, which I know we're going to dive into. But fundamentally, that first step is just getting people to understand that we're getting rid of those emissions that are coming out of the tailpipe. And reducing those tailpipe emissions is step one to getting people to understand the change and the impact on ultimately hitting those GHG reductions. But it gets really complicated after that when you start peeling back the onion and truly comparing EVs to what in the industry we call ice the internal combustion engine powered vehicles.
Dave Anderson (17:17):
Yeah. I think what I'm hearing you say, which makes a lot of sense too, is when we talk about decarbonization, we're talking specifically about the greenhouse gases or the carbon that starts to build up in the atmosphere that affects. And the concept is actually was explained to me in my adult years is like, what is this greenhouse effect is? Well, light can travel through that carbon layer, but then once light hits the surface of the earth, it turns into at least in part heat and that heat gets captured or trapped because it can't escape through that same carbon layer or that greenhouse layer and anyone, and they call it a greenhouse effect for obvious reasons. If you have a greenhouse, that's how a greenhouse works as well. So you can have the internal temperature, the greenhouse, be significantly different than the external temperature of the greenhouse. And we've essentially created that a system by having or adding additional carbon to the atmospheric layer.
(18:14):
But you don't really see carbon, and to the point I think that you're making is that, and I remember as a kid. So you talked about in Montana, I'd never been on a plane as a kid. So yes, we absolutely drove places. And when I was probably... Man, I must have been around eighth grade or so, our family took our first crazy trip where I left the state of Montana. I had maybe visited Wyoming or North Dakota, but we did not venture too far outside of Montana. It was our own little heaven, didn't have a reason to, but my family got adventurous and we saved our money and took a trip to the Mecca Disneyland. And I remember driving down the I15 and hearing about this concept of smog and smog didn't really exist certainly not from internal combustion engines where I grew up, it was the big sky state.
(19:02):
And I remember driving down I15 and seeing that LA landscape for the first time, and you saw that smog layer and it was from those dirty internal combustion engines. And I remember at the time thinking, he was like, "How could someone live like this?" And really probably what I was thinking at the time was just too many people. Again, I grew up in a prairie town in Montana, so people is what I was probably more afraid of than actually the smog glare. And cars have gotten cleaner in the sense that you don't see that same smog glare. And I live in Salt Lake now, and Salt Lake deals with every winter, what they call an inversion where you're in a valley and you get this smog that gets held in because you have the, yeah, it can't escape.
(19:44):
And every time a good storm comes through a weather system, it clears out all the air and everyone's happy about the air getting cleared out. So people generally don't like smog. They don't like the smell of it, they don't like to hear it, they don't like or not hear it. Excuse me. They don't like the smell of it. They know it's worse on their lungs, the lung quality, the air quality for breathing, but it's really a lot more than just smog. I mean, we're talking about that carbon layer, and that's the part where I think people, you can't see it. You can't taste it, you can't feel it. So those greenhouse gases that you can't see and you can't feel, there's so much skepticism by so many people as to whether or not it's even bad. And that's the part, I don't think that it's had good PR. I don't think it's been explained well. I don't think people have fully accepted and embraced how detrimental and how negative these sorts of greenhouse gases really are.
Loren McDonald (20:38):
And to your point, the whole climate change thing is still very political and it's still very much one of the many divides we have in this country. So if you think about all the hurdles to getting American consumers to adopt electric vehicles, one is range, one is price point, charging, infrastructure and availability, just models available in the types that people want and are interested. If a significant part of the consumer client base just doesn't believe in climate change or is iffy on it, then you probably also removed a reason for them to consider buying an electric vehicle in the first place. Because there's probably those other hurdles that remove their considerations. And that's why out here in the crazy California golden state where we tend to believe in this stuff, that's why we're going to... Last year we hit 20% EV sales share in California versus your home state of Montana and North Dakota, South Dakota and stuff. They were at 1%.
(21:59):
So we have this divide of literally, there are many states in the US where only one out of 10 new vehicles purchased last year were electric. And then you have California where 20 out of 100, two out of 10, and in my home county over in Alameda County, Oakland, Berkeley, Alameda, they're going to hit 40%. So four out of every 10 new vehicles purchased in Alameda County this year will be electric vehicles. And again, your home state of Montana will not hit even hit 2%. So we have literally more than 20 times the level of EV adoption from the low adopting markets to the high adopting markets. But even within California, out in Imperial County, which is out down towards the Mexican border, if you will, in southern California, they were at less than 5% last year versus again, the near 40% in Alameda.
(23:09):
So we have this aspect, I mentioned this on stage on Friday that EV adoption in the US is not an equal opportunity employer in that there are a lot of factors that go into it. One again is if you step back and look at those states like Montana, South Dakota, North Dakota, et cetera, they tend to be very rural where people drive a lot longer. So range in having pickup trucks with large batteries that can tow trailers and things like that. This haven't been available. And then they cost 15, $20,000 more than a comparable electric truck and stuff. So a lot of this is just the supply and the markets aligning with consumer demand and we're going to get there, but it's going to take a long time. So meanwhile, it's the higher income left leaning often states on each of the coasts is where EV adoption is going to happen. And then it's going to go inward.
(24:21):
I have had a chance to spend some time with Mary Barra, who's the CEO of General Motors. And in an EV event a couple of years ago, she mentioned that GM does really well in the middle of the country from a sales perspective, and they're very weak on the coast, which is where Toyota and Honda have particularly done very well in California. And now Teslas dominates in California. I don't know if you knew this or not, Dave, but last year, and it will happen this year as well, the Tesla model Y in model three will be the number one in two selling vehicles in California. Not just EVs, but of any vehicles. So we get the EV, but we're still, again, 10, 15 years away from reaching that same level of enthusiasm and adoption. And not to keep picking on Montana, but on your home state of Montana, is just going to take a while for many parts of the country to get there.
Dave Anderson (25:29):
Well, we should talk about what are the why's. Why is it going to take a while? So as a marketing professional, and I'm sure one of the things you've looked at is what's the number one motivator or impetus for people that have gone to an electric vehicle? Why did they? And then to counterpoint that, what's the number one reason people don't go EV? So I'm an EV driver, but I'm also a huge solar component, have solar on my house. So I could make a very strong argument to anyone as to why they should couple the two together. I can make an environmental argument, I can make an economic argument. And I think both of them are extremely valid. And I think one of the things that's interesting is I think people, when I'm explaining to them the value proposition both economically and environmentally. It's like they're hearing it for the first time, oftentimes.
(26:17):
But I would love to hear from your perspective, what's the main reason that the 20% or even 40% Alameda County have made the decision to make the transition from a combustion engine over to EV? And then also to counterpoint to pick on my people back in Montana, what's the number one reason, and maybe not in Montana, maybe California. I think if you grew up in Montana, how far it is to get from one place to the next. So range anxiety would be a real thing in Montana, but it's not necessarily representative of the general sentiment for EVs.
Loren McDonald (26:50):
Yeah. We can talk about the why's and the why not's, but we should also come back and talk about underneath that, what are some of the influencers behind that and how that's changing. But historically, and we're still in the early adoption phase as we like to call it, if your listeners are familiar with what we commonly refer to as the technology adoption curve, how people adopt new technologies. And the same reasons people in California and other places initially bought Toyota, and with hybrids it was to save the planet. And that still is a motivator for a lot of people. But as we get towards that more mainstream adoption, we're actually starting to see people buy EVs for different reasons. And a lot of surveys I've pointed to just better technology. In other words, and as you probably know, Tesla still dominates EV sales in the US. There's dozens of other manufacturers and models out there, but Tesla still dominates about 60% of the sale of EVs in America.
(28:11):
And part of what attracts people is they just think that EVs have better newer, cooler technology. So a lot of surveys and studies have pointed to that it's becoming less about reducing GHCs and saving planning because people just want better technology and cooler technology. I go for one or two walks in my neighborhood every day to get out there and get some fresh air and think I actually dictate a lot of my articles and stuff. And then I stop and talk to one of my neighbors who had had purchased a Model Y, and he's like a 30 something tech sales guy. He never once mentioned saving the planet or GHCs or anything like that. He bought a Tesla Model Y because he thought it was the coolest technology out there.
(29:03):
So we're seeing that shift Dave in that. And it's actually a good thing because then you can start to hit different segments of the market. You can start to reach those people that are not motivated just by environmental concerns and things like that. It's getting that to more of a mainstream consumer adoption factor, like the transition we had from cell phones to smartphones where it was about better features and that type of thing. So it's twofold. People tend to either be motivated by buying an EV because they want to help reduce the impact of climate change, or they just want a better car or truck. They like that new technology. And that defines the idea of the technology adoption curve. Those people that are early adopters, they want the latest and greatest technology.
(30:06):
Obviously at the current state of market that they tend to be higher incomes because EVs tend to cost 10 to $15,000 more out of the gate and not just on price parity. One of the challenges, Dave, is that while a lot of the industry analysts focus on what we call price parity, that difference between the cost to buy an EV versus the cost to buy a similar comparable ice powered vehicle, and we're still many years away from reaching that price parity. Now, when you bring in the lower cost of fuel and lower total ownership cost, fewer things tend to go wrong with EVs. So when you factor all those things in, that payback period is actually a lot lower. But we tend to focus on that initial cost. The problem with that exercise is your average consumer doesn't walk into dealer and say, "What's my total cost of ownership going to be for an EV versus a gas powered car?" Fleet managers do that, but consumers go, "What's my monthly payment? What can I afford?" So that's where EVs still tend to struggle with certain parts of the market.
(31:27):
So the flip side to your question is what's holding a lot of people back? Again, that first part is what I just talked about, just the monthly payments, the affordability, and the challenge right now is because electric vehicles are not profitable for most of the automakers. So Ford announced that they lost 3 billion last year on their electrification program. It's going to take years to scale up the volume manufacturing, the supply chains, things like that. I just was reading inaugural this morning that Jim Farley, the CEO Ford, said they were able to get $5,000 out of the cost structure of the Mustang Mach-E this last year. So as time moves along and the automakers scale up their factories in production, we're going to reduce those cost differences, and that's going to be huge in making EVs affordable to the rest of the country.
(32:36):
The second thing that you touched on really was things like range. So range anxiety was a huge initial hurdle to getting people to consider an electric vehicle. There's been literally hundreds of surveys over the last 10 years or so of consumers of what's holding them back from buying an EV. And typically more than half of consumers in these surveys say they won at least 300 or more miles of range before they were considered in the EV. And the first several years of EVs on the market, there were literally no EVs with 300 miles of range. Now there are dozens of full battery electric vehicles with more than 300 miles of range, even with more than 500, the lucid air even has more than 500. It'll cost you a lot of money, but there are literally dozens of EVs now with say, 275 and more miles of range.
(33:45):
So range anxiety is really switching. For a lot of people it's becoming less of an issue. And that range anxiety issue, that range hurdle is transitioning to what we call charger anxiety. So the shift is, okay, so now if I buy an EV, it probably has enough range to meet my regular needs from a range perspective fairly easily. It's what about when I go on those road trips and I'm going to go on those 500 mile road trips, et cetera, where am I going to be able to charge? So that's the next thing that we're tackling. And big part of that, Dave, is getting consumers to think differently about how they refuel.
(34:32):
So I like to say the refueling of an EV is much more akin to charging your smartphone, which you know don't typically take out to a public charging location. You do it at home, you plug it in at night, wake up in the morning with full charge. So people have to change their thinking that refueling an electric vehicle is really about parking and doing other things. Like when we go on road trips, we think about what we want to eat. Charging is what you do while you do other things. You go eat, you go have a nice lunch, breakfast, dinner, you go on shopping, whatever it is.
(35:22):
But most consumers expect EVs to refuel like a gas powered car. I'm going to drive it somewhere to a gas station, fill it up, and they hope it for it to be five minutes. And that that's not how you refuel an electric vehicle. You park and it charges why you refuel yourself. And people don't understand that until they actually own and experience an electric vehicle. So that's really charging after affordability and getting people to accept that EVs have enough range. That charging aspect is really the, I think the next key hurdle. And we've got a lot of government incentives and a lot of private enterprises are chasing what I call the biggest... In essence, it's like the 1849 period here in California, the gold rush. EV charging deployment in America is the modern gold rush. I run across literally new companies every day that are going after this space. Everybody's chasing this opportunity to basically build out entirely new charging refueling infrastructure. So it's a massive opportunity.
Dave Anderson (36:55):
So I mean, Tesla and then Rivian to a smaller degree, the two new EV companies that have gone direct to consumer, it's changed. It's flipping the dealership model on its head a little bit. And there's a lot of regulation in certain states. And Tesla actually and Rivian are fighting the fight to be able to continue to go direct to consumer. They certainly are trying to have the conversation about cost of ownership. Obviously here on the Solar Podcast, we've talked a lot about this. The true cost of ownership. And if you're going to purchase a car, you really should understand what is the true cost of ownership driving a vehicle. So you obviously have your monthly payment, but then you also have your maintenance costs, you also have the fuel costs or the energy costs, however you want to look at it. And when you look at those things holistically, I think you start to bring the cost, you get a lot closer to cost parody. In fact, in some instances it's far less expensive to drive an electric vehicle than to drive a standard ice engine or an ice vehicle.
Loren McDonald (37:56):
And I mentioned the fleet managers live and breathe and exhale and that total cost of ownership. But again, most consumers when they walk into a dealer or in the case of Tesla, Lucid, Rivian and some of the other startups and they buy direct or whatever it is, we think about what is the monthly payment I can afford? Whether it's purchasing an loan or it's leasing. We don't think about over five years or seven years, I'm actually going to lower my cost. We think about what can I afford right now.
(38:39):
So that's why the value proposition of EVs is very different for the commercial fleet space because those people truly get it because that's what they're calculating on a daily basis. They're different challenges for the fleet market when it comes to EVs. But Dave, a lot of people seriously are doing that. A lot of consumers are doing that exercise that you're talking about, but your average consumer really fundamentally doesn't think about total cost of ownership. They think about monthly payments and affordability.
And I would say that that's actually in part a consequence of the way that we've conditioned ourselves to purchase and buy vehicles. So I think to your point, and as a marketing professional, you'd certainly recognize this to be true dealerships that embrace because there is a transition that's happening. There's the tailwinds federally that are pushing electric vehicle adoption. So the dealerships that really embrace the model of helping consumers understand the true cost of ownership and then go even one step further and help people understand, look, we can also help you get smarter in the way that you electrify your home as well, meaning starting to couple solar with EV.
(39:51):
And what's interesting about that is Tesla who is selling an incredible amount of cars, obviously in California and across the country, haven't actually cracked that code. And I think that there's opportunity and space for the OEMs, for all of the manufacturers as well as the dealerships at the franchise level and even your cornered lot to help consumers understand, hey, look, we can not only help you get into a car, but we can also change the way that you electrify your home and change the way that you charge your vehicle. And I think when people start coupling those things together, there will be dealerships that rise because the value proposition to the consumer's going to be better and the sentiment's going to change as well. And that's something I'm actually really excited about. We've talked a lot about it on this podcast.
Loren McDonald (40:32):
Yeah, no. It's great that you mentioned that in a webcast that I'm involved with. Just a couple of weeks ago we had on, as a guest, a battery executive from Stellantis, the parent company of what used to be called Fiat Chrysler. People were familiar with the brands underneath that in the US, Dodge, Chrysler, Jeep, et cetera. But this was a big part of what we talked about is, and you mentioned Tesla. Tesla was the shining example of this where they are both an automotive company and an energy company with a battery storage and solar. I have solar city panels on my house, which obviously is as all your listeners Tesla acquired years ago. So I have both a Tesla in my garage, a Tesla charger and Tesla solar on my roof. I don't have battery backup, but I'm sure we'll get into that topic as well because I do have a big battery sitting in my garage.
(41:39):
But yeah, I mean, what you mentioned, Dave, is it's going to be fascinating because that was one of the questions I asked the guest on that other show is in 10 years are we going to be looking at the auto industry as not the auto industry? It's really going to be this broadened integrated mobility and energy storage, and that really is the direction that most of the major automakers are going in. They're either building out or acquiring battery storage. So first just for their EVs, but they're going to expand into that. We've seen General Motors make a bunch of announcements around that. They have a separate energy division. So that hopefully is going to translate down to at the local level, are we going to see dealers... I've written articles and things about this to get the dealers to think about not just selling their vehicles, but selling and installing the EV chargers, which then gets you into their home exactly to your point, and gets them to think about that they're not just selling cars and trucks, but they're selling this entire mobility and energy solution.
(43:00):
And EV chargers can really be that first step. We sell them the electric car, we sell them the charging solution, guess what? Then we can marry home energy management solutions and solar, battery backup, all of those things. And to your point, most dealers by their very nature are franchises, which means they typically are entrepreneurs. So it's going to be interesting to see how many of them actually do make that leap into this new paradigm of thinking beyond just selling and repairing cars and trucks. It's a massive opportunity, but it's going to require a huge transition in thinking for a lot of these entrepreneurs.
Dave Anderson (43:50):
Yeah. We've talked or you talked a fair bit about that technology adoption curve, and usually you start with the first two and a half percent to people being those early innovators and then like 17% early adopters, and then they call that the chasm. So crossing the chasm into early majority. And I think that in California certainly we've crossed that chasm and we're in that early majority, and so many of the people that are going solar are doing it because other people already went EV. Many people that are getting EVs now are doing it not for the same motivations or reasons that those early innovators and their early adopters did. They're doing it because everyone else is doing it. So early adopters tend to be trendsetters, and that early majority tends to follow the trendsetters. So I think we're seeing that on the EV side of things.
(44:36):
Part of that's just been politically driven, part of it's been federally driven, part of it's been incentive driven, but at this point it's got enough momentum that we would expect to see a faster increasing number of people adopting electric vehicles. I would say though that the two things that tend to fall behind the initial adoption is infrastructure. So one of the things that we're struggling with now a little bit is infrastructure. So you see these people that are really opponents of electrification of vehicles. You'll see pictures of a Tesla parked at a charging station in middle America where it's a diesel generator that's essentially generating the electricity. And the truth of the matter is that the technology, the infrastructure is lagging behind a little bit, and solar also has an issue.
(45:33):
So in terms of solar adoption, it has an issue of transportation. We're still really reliant upon the grid because solar works great when the sun's shining, but we call them solar panels, not lunar panels. Because they don't work at nighttime. So we have this issue of trying to figure out how do we power our lives during during nighttime? So storage is an issue. So obviously there's huge opportunities and you hit it on the head, you've got a gigantic battery that's sitting in your garage, and there's a way of taking the infrastructure or the fleet of vehicles that's being purchased and then essentially being able to couple that with solar. And there's ways to manage energy from car to home, from home to car, to car to office, from office to car, and there's ways to manage that and solve both problems at the same time. And we're working on the problems independent of each other, but we're starting to see those things come together in a more holistic way where you're talking or hearing about bidirectional charging.
(46:38):
Ford was the first one to really start advertising that, GM is talking about it, Tesla's talking about it, but I think there's huge innovation and opportunity that is inevitably going to come down the road where individuals could be completely energy independent of the grid just by virtue of having a car and solar on their home. And there are huge challenges with that. How much is bidirectional charging going to affect the longevity of the battery, for example, these sorts of things. So lots of things to solve there. But Loren, I'd love to get your concluding comments on how you think or what your vision for how these things are going to start in a future case scenario, start working together.
Loren McDonald (47:24):
Yeah. We could spend a whole podcast just on-
Dave Anderson (47:28):
Easily could spend a whole podcast on it.
Loren McDonald (47:30):
... on bidirectional charging and all of the multiple acronyms of vehicle two, vehicle to grid, vehicle to home, vehicle to building vehicle to load, et cetera. And you also hit one of the key challenges is batteries every time you cycle it. So every time you either charge or discharge that impacts the life of batteries. So one of the challenges of bidirectional charging and especially vehicle to grid is the automakers are deathly afraid of their warranty liabilities. So a typical battery warranty is for eight years. And if people start using their battery in replace of, say, a stationary storage in their house or something like that, most people are not going to probably do that. But if they started to do that, what if that battery only lasts six years? Then GM, as an example, has got to replace that 15 or $20,000, whatever it costs battery at their cost. So that's one of the hurdles.
(48:45):
But first and foremost, I see what we refer to as vehicle to home being the initial focus of bidirectional charging. One of the challenges to adoption of vehicle to grid is the utilities. Utilities, Dave, quite frankly, are deathly scared of vehicle to grid and there's a lot of things they haven't figured out how they pay for it. I sat next to a utility executive years ago at a conference and he said, "We don't want to pay for electricity twice," meaning they didn't want to pay for to produce the power and then have to buy it back from a consumer who charged their EV stored it and then sold it back to them. So there's things like that with utilities that are holding things up.
(49:44):
And that's why most all of the automakers and everybody are focused on what's called vehicle to home first. Like you mentioned the example of the Ford F-150 Lightning where is, if the power goes out at my house for a couple of hours, I can just tap into my EV sitting in the garage and power my refrigerator and things like that. The reality is it's not that simple. It costs about anywhere from about eight to $12,000 to buy all of the equipment that you need to make that happen. So that's another hurdle because a lot of people are just going to go buy a natural gas generator if they actually have a lot of power outages at their house.
(50:32):
But vehicle to home is probably going to be the first step for most people because the idea would be that you only use that battery when you need to, when have those power outages. And then long term we'll get into vehicle to grid where we'll be sending power out to the grid when there's high demand at six o'clock, seven o'clock, eight o'clock at night in the middle of the summer when everybody's got their air conditioners going and things like that. But we've got to work through the infrastructure issues and the battery longevity issues and how do we actually pay for it and those types of things before we get there.
(51:16):
So what I would say, and just summing that up, the near term easiest opportunity is what we call managed charging or smart charging. And there are several companies doing this in the US where they basically just determine what time of day you charge your electric vehicle. So it's a combination of their software, the utility, and you giving permission so that we switch when people charge, for example, out here in California from the middle of the night when they're probably going to be pulling power from natural gas peaker plant or something. And actually ultimately over time switch that to charging from solar during the middle of the day when solar production is the highest and demand is lowest. So that's really the near term opportunity is just to switch when people charge to the optimum time from more renewables and less cost.
Dave Anderson (52:17):
Yeah. You're absolutely right. We could spend an entire podcast talking about four or five of these topics. I mean, the truth matter is it relates to that. There's examples where if you're going to charge your vehicle when the grid is really overstressed, the kilowatt hour prices are extremely high. But there's other times and in other places, even in the country today where you can actually get paid to charge because you have an excess amount of energy. So you're actually getting paid literally to charge your vehicle at those times. So I think that the grid needs to get smarter for sure, but each individual home can become its own microgrid and a car and solar are parts of those. And again, I think we could talk about each of these things for hours onto themselves.
(52:52):
In fact, Loren, I'd love to invite you formally back to come back another time to speak to us here on the Solar Podcast. I think it's great to hear an advocate talking about the challenges that we're facing with EV adoption, but also the, it's great to hear all the positive things are happening as well. And I think that as we see both EV and solar evolve, we're going to see them come together more and more and more. I mean, you can't really talk about an electric vehicle without talking about how you're going to charge it. You can't talk about solar without talking about its uses and its shortfalls. So I think you're going to see those things coming together. It's really a hand and glove relationship between those two things.
(53:32):
And then when you layer on top of it, the environmental benefits of being able to reduce your carbon footprint significantly, both first in the home and secondarily with the EV, it's just the most impactful thing person can do. It's the same reasons that you as a young kid were walking around picking up beer bottles along the side of the road to recycle just the right thing to do.
Loren McDonald (53:49):
Yeah. And you said, we did solar first and then got our EV, and that's back in the early days in California about a third of consumers had solar first before they bought their first EV. And that's changing now. But there is, to your point, that's why I'd love to talk further about that. But there is this huge synergy between solar and EVs. They're literally wet at the hip.
Dave Anderson (54:17):
Yeah. And as a person that spoke on the subject over 200 times, I'm sure that you could talk to us a lot more about it. But thank you so much, Loren, for coming on the Solar Podcast. It's been absolutely fantastic and fascinating for me to visit with you for this past hour. And we'd love to have you come back and share some more of your wisdom and knowledge. And the truth matters is this industry's evolving quickly, so there'll be more things to talk about next time we chat.
Loren McDonald (54:37):
There will indeed. Thanks for having me. Take care.
Dave Anderson (54:40):
You bet.
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