Transcript
Energy Empire — Episode 8
Hosts: Jigar Shah & Jamie Nolan Guest: Adam Browning, Forum Mobility Produced by: WDHT Productions
Jamie: Hi, Adam Browning. Welcome to Energy Empire.
Adam: Thank you for having me here. I'm excited for this.
Jamie: I want to start somewhere personal. My dad is a trucker. Actually, after a long career as a maritime electrician and mechanic, he retrained for a second career in trucking, and he's absolutely loving it. He's open to new technologies, but electrifying semi trucks sounds super far-fetched to him. So when did this stop being so far-fetched?
Adam: I mean, it is all really new, and I think there's an excitement to that as well. Like, I enjoy the beginnings of things. But you know, I agree — there's a lot of truckers who look at this and they are skeptical, and the technology is evolving rapidly. But let me just share an anecdote.
We've got a depot where we have 12 different motor carriers that operate out of there. It's inside the Port of Long Beach. And they range in size from a guy with a truck to one of the largest trucking companies in the world operating Amazon trucks. This one trucking company, they own tens of thousands of diesels. There is a wait list of people that drive for that company that want to get into the electric.
Once truckers actually drive these vehicles, they really enjoy the experience. It is quiet, there are no fumes, there are no vibrations. One pedal driving is a lot easier on the entire body than clutching through rush hour traffic on the Harbor Freeway. So the actual experience itself is really trucker friendly.
Jamie: Well, that's awesome. And I feel like you just did one of the things that I train my clients to do, which is you just hit all the headlines. You just hit all the key points in that opening statement. So I'm looking forward to digging into more on all of those points. But let's kind of go back to the beginning of your career, because you've had kind of a storied career in energy and environment. And Jigar and I have both known you for a really long time, because we all worked in solar. You worked on mercury emissions at the EPA as well. So what pulled you towards freight for your next act?
Adam: You know, I've never had like a blueprint for how I wanted my career to go, maybe similar to you guys as well. For me, it was like really just the next interesting thing after another. But after 20 years in solar — it was awesome. It was the ride of my life and I was a little burnt out. When I ended up stepping down from my last job, I had a lot of people reach out and I started consulting, and what really grabbed me — I joined a board of this company that I'm now working with, working at, Forum Mobility. What really grabbed me was I liked the beginnings of things, things that we know we need that don't yet really exist.
That to me is the fun part of the ride. And so for me, I'm now invested. I've spent enough time really digging in to seeing how this really crucial part of our economy, the lifeblood of our economy, can be fundamentally transformed and bettered for the experience of everybody involved by deploying advanced technology. And I'm in it to win it right now.
Jigar Shah: All right, Adam, let's set the scene for listeners. I think that when you look at electric vehicles, the legacy automakers had years of warnings that EVs were coming, right? There were all these EV mandates in the state of California, but they really didn't move fast enough. And eventually Tesla was formed and Elon invested in Tesla and then took it over. And then the legacy automakers had to scramble to catch up, right? Is that the movie we're now watching in trucking? Because when I was at the Loan Programs Office the last four years, we kept going after all the legacy truck makers and saying, hey, we're happy to give you a loan to make trucks here in the United States. And they kept dragging their feet and dragging their feet. So I just wanted to get your take on the dynamics here.
Adam: Yeah, I would say the movie seems pretty similar. So at Forum Mobility, what we do is we build truck charging depots and then provide to motor carriers — the trucking companies — charging, or we'll lease them a truck and give them a truck plus charging together. So we own and lease out, and our customers own a lot of Volvos, Daimler eCascadias, BYDs. And they're working great. So our depot inside the Port of Long Beach now just passed — our customers have passed just their two millionth mile of zero emission freight going from the Port of Long Beach out to distribution centers with those containers. So those, that current iteration of truck that we're working with, it works great.
The question though is, can it really scale? And those trucks have been really expensive and the prices have been going more up than down. The Tesla Semi, which Tesla is now building that factory, finishing that factory out in Sparks, Nevada — it is a different beast. It is a 500 mile truck versus the 250, 225 mile range that we've seen with some of the current legacy versions from the other OEMs. And it charges about four times faster on an MCS charging standard. It is more efficient in terms of its ability to turn an electron into a mile. And it's radically cheaper. So twice the range, nearly half the cost. So right now, that is all our customers are buying, almost all. They are mostly just putting in orders for the Tesla Semi.
So that 500 mile truck just radically changes the use cases that you can deploy a truck into as well. We had been focused, and a lot of the policy makers had focused, on port drayage. So when a ship comes in, it's got all those containers on it. You need to get it out. It is hub and spoke. You are going from the same place every morning and you're just going back and forth to distribution centers. Great application for a more limited range truck. And again, the legacy trucks that we have, that's working great.
With the Tesla Semi, we have a great customer. She says 60% of her business is that local drayage. So they're going from the Port of Los Angeles, the Port of Long Beach out to Carson, South Central Los Angeles, and then all the way out to the Inland Empire. But 40% of her business, she goes with the container directly to Phoenix, with the container directly all the way out to Las Vegas. And again, with the Tesla Semi, those kind of ranges, that next ring is eminently doable. So we are now building charging out in Las Vegas, we're developing depots in Phoenix as well. That is why in our mind, the performance, the cost, the operational capabilities — it's just a step change in the advance of zero emission freight.
Jigar Shah: I mean, everyone loves to hate Elon, but then he pulls something like this out and you're like, I'd rather he be on our side. It's just one of those things. It's the craziness. But the heavy duty trucks don't use standard sort of 150 kilowatt or 350 kilowatt fast charging, right? I mean, these are sort of megawatt scale charging. Is that right?
Adam: No, I mean, right now my Hyundai IONIQ 5 charges faster than the trucks that we have operating in Long Beach. So those are on your standard CCS. We've got dual port 360s out there. And so you can get a maximum of 360. But that's why this next step to the MCS charging is so meaningful. They're pumping 1,200 kilowatts through there, and that is just radically faster. And so it starts to change a lot — you are now looking at something that's much closer to a gas station model.
Jigar Shah: That's great. And so when you think about what you're doing — you're taking drayage ports and doing the short haul there and now you're going to the next ring, right, out to Phoenix, et cetera. It still seems to me though, that what you're looking at is 10% of the class eight truck market, right? Like we're not instantly saying that there's a national build out, that every single route and every single place in the country is fair game for EV trucking, right? It feels like it's more hub and spoke, because the charging infrastructure is expensive. You want to make sure that those chargers are used a lot, right? Is that right? Am I getting that right?
Adam: I think you're absolutely getting that right. And I will also say there is a ton of freight that gets moved in these shorter distances. So it's not just that first mile from port out to the distribution center. It's also middle mile, and then also the last mile, your regional distribution. So at your local Safeway, they have a distribution center. There's a truck that goes in, loads up enough for eight store deliveries or so as they go about their day. You'll see them, those class eight trucks, daycabs idling out in front of you as you're walking through the fumes and they're unloading. Those are 200, 300, 350 mile daily deliveries. That could and should also be done on zero emission.
Let's go back to the analogy of solar days. We started out with rooftop. Why? Well, costs were expensive, competing against a retail price versus a wholesale price put you in the money much sooner. And you also had a customer base that was willing to make those purchases to build scale to bring down costs. And then eventually you brought it into the wholesale. Not to make everything about a solar analogy, but there is an absolute perfect parallel. You don't start with, "this solution has to work for everything everywhere all the time for everybody." You fit the technology to the application where it works until you build the technology and the business models that are going to take it the next step.
Jigar Shah: Yeah, but let's dig in a little bit more on solar. When you think about it, a lot of solar manufacturing was sort of invented here in the United States. It's clearly been dominated by the Chinese. Tesla, I think, played a huge role in getting the first generation car out the door. It's now being dominated by the Chinese. I think 55% of heavy duty truck sales in China last year were zero emission, mostly electric. So what's your sense around US truck manufacturing and whether we should be worried?
Adam: Yeah, China — I think that was the December figure, but over the full year it was around 30%. Nonetheless, yes, I think manufacturing of advanced technology in the US is at an existential state and we should be investing in and building upon the advanced technologies of the future, and we're not doing enough.
The other legacy OEMs — they're awesome people, awesome trucks, and they're also global manufacturers. Volvo and Daimler have an MCS truck that they sell in Europe. They don't have it yet in the United States, and I cannot explain why that is. So I do think, and I would like to see — Tesla needs competition. I see this as a catalytic call to arms for the other OEMs to lift up their game and bring a better product, build a better product here in the US as well. I have faith that over the arc of our lifetimes, that will be the case. But we are still in the "let's get our shit together" phase. Tesla has got a vastly different product right now. It's time for everybody else to level up.
I would also say it is interesting internationally — both when you look at light duty and heavy duty, the international export market is largely now going electric. Ethiopia two years ago banned the import of internal combustion engine vehicles. And they are now building large truck charging depots every 10 miles on their freeways, and they're importing trucks from China. They've got plenty of hydro power at really low cost, and they are going to be insulated from the craziness that's going on in the Middle East and the Straits of Hormuz because they are not going to be depending upon fossil fuel imports.
This shift to an electric, zero emission future is going to be driven not just on the economics, but on geopolitical concerns as well. And I think that the US needs to skate to where the puck already is, not even where it's going to be, and scale up. I do think actually a lot of our legacy OEMs — you hear the CEO of Ford talk about how the majority of their dealerships aren't in the United States and the rest of the world is clearly going electric. So they're now talking about partnerships with Chinese companies after their massive write-downs with the cancellation of the IRA.
Definitely it's a missed opportunity. I don't know yet if it's a lost cause, but this is where I think that our internal manufacturing capability and expertise desperately needs to go, because this is where the world's going.
Jigar Shah: So one thing I'm curious about, Adam — particularly in drayage and ports, when I worked at the Carbon War Room, one of the things that we found was the health impacts from diesel at the ports made it 10 times worse in terms of health impacts to live next to a port. I guess what I'm trying to figure out is, for a listener who's never thought about freight in their life, why should they care whether the truck delivering their Amazon package runs on diesel or electricity? What's the version of the story that you find actually lands with people?
Adam: Yeah, I mean, I never tell someone exactly why they should care about something. I let them bring their own issue to it. And I think there is a range of issues here. It is true that the concentration of diesel emissions, especially in some of these more freight-concentrated heavy locations like at the ports, are really horrible. And if you live right next to one of the busier ports and you've got all those diesel trucks going by, the impacts on your life expectancy are measurable and unacceptable. And so we have great partnerships with the ports who are really trying to walk the walk and drive the drive on being much better neighbors to the poor communities by helping to make this transition away from diesel to zero emissions.
I would also say, we can't solve for climate without solving for freight globally. That's part of my big motivation — solving for climate. Roughly seven percent of total global climate emissions are involved with freight. We need to figure this out. This is often thought of as a hard-to-abate sector. I can tell you it may be hard, but it is also doable. So let's do it.
I would then finally say that it does need to benefit everybody in order to be really a durable long-term solution, and I think the deployment of advanced tech is going to not only result in lower costs for the truck companies, but then also for anybody that enjoys products delivered by a truck — which is everybody. So this isn't only going to be a cleaner system, this will also be a lower cost system. We could go on and talk about geopolitical resiliency, but there's not just any one reason, there's a lot of reasons, and you pick yours — whatever motivates you the most.
Jigar Shah: All right, we've been expecting volumes of trucks coming out of Tesla for a long time. We've been promised them, right? Now, there was a recent spat of tweets and announcements that came out. I think everyone is now expecting that 2026 will be the year. What is your over-under on whether we're going to get to meaningful deployments or deliveries of Tesla Semis in the year of 2026?
Adam: I mean, I will definitely take the over on this. I have a lot of trucker hats, let me tell you. So if I eat one, I won't miss a thing.
Jigar Shah: You're going to eat your trucker hat if you don't get your deliveries!
Adam: But more to the point — I can't speak for Tesla. What I can say is that I was at the factory in Sparks, Nevada, Friday, and we as a company have been taking motor carriers — the trucking companies — out to see for themselves. And it is an enormous facility right by that initial Gigafactory. It is the equivalent of 30 football fields under one roof. They say that they will have an eventual production capacity of 50,000 units a year. And walking through the incredible amount of machinery and technology that is installed in that place — yeah, it jibes. You feel it. They've run a couple of fully assembled vehicles through. They are fine tuning the production lines, having deep conversations with the various robots.
Jigar Shah: What kind of deep conversations are they having with robots?
Adam: "Work harder." Just to say that there's a lot of tune-ups. You have installing the stuff, and then there's a lot of tuning up that goes on. So yeah, it's going to happen. Will it happen this week, this month, next week, next month? It will happen within a relevant timeframe because all the materials are there. It is just the fine tuning left to go.
What we have done is we have brought a lot of motor carriers who are interested, who have the same concerns, to the factory themselves. Let them make their decisions, and they have put in orders for hundreds of them. Our customers have been advised that their delivery date will be late summer, early fall — depending upon when they order, how many they order, whether they order the standard range or the long range. Some folks want the shorter range, the 300 mile truck, because it's lighter and that makes a difference. And if they don't need 500 miles, they'll go with the 300 mile. It's also got a tighter turning radius — a tighter turning radius than my old Chevy Bolt. It is really kind of amazing.
So yeah, I can't tell you the date. My bet is it's going to be this year, solidly this year, just because I've seen the immense amount of work and the deployment that's there.
Jamie: Awesome. So it seems like Tesla has a unique ability to really make consumers pay attention to and maybe care about things that they otherwise wouldn't think about. So do you think that the Tesla Semi is going to do that for trucking? Do you think it's going to change how the public views and thinks about freight, which is probably not much at all right now?
Adam: Yeah, I mean, Jamie, you are a marketing professional and I would love to know how — as far as I know, Tesla doesn't really market things. They shoot a car into space. They have other ways of bringing people in. Our customers are mostly interested in the performance and the price point rather than any Tesla-specific mystique. And I do think that because of the performance and the price point, this will get a lot of people's attention and will be a transformative vehicle. And also, I hope that this catalyzes not just Tesla, but a lot of the traditional OEMs to be right there at those same price points as well as performance characteristics.
Jigar Shah: I'm not going to hold my breath on all of those other serious players, having met them all the last four years and being completely underwhelmed by their lack of enthusiasm for dreaming big. But help me understand range anxiety, right? We talk about it all the time with passenger electric vehicles, but how does that problem change or get worse in a field like long haul trucking?
Adam: I think these initial deployments won't necessarily be for cross-country trips. That will be much more regional. And with charging built and specced to customers and customers' needs — we had talked about this being a similar movie to what we saw in light duty. Tesla is investing in a similar initial deployment of charging infrastructure, enough to remove that range anxiety for the initial deployments as well. They've announced some 50 different sites that they will bring on by the end of this year, early next. Pilot Travel Centers are now doing 35 different deployments of MCS charging, principally on interstates. And then we as a company at Forum Mobility are building a lot of charging, and we have competitors that are doing the same as well.
Jamie: How long does it take to charge one of these all the way to 500 miles of range?
Adam: You can recover that between 30 to 40 minutes. And similarly to your passenger vehicle, if you can avoid going all the way to 100%, it is helpful to battery health to charge something less than 100%. So most substantial charges are going to be in the realm of 30 minutes, which aligns very well with the mandated breaks for truckers.
Jamie: Awesome, I love that. Talk to me about refrigeration. So I solicited questions from my dad, who I mentioned is a trucker. He drives a 30-foot refrigerated truck and he pulls a 53-foot trailer. He mentioned that the refrigeration elements of the truck also run off of the diesel. So that dramatically reduces his fuel economy and his mileage averages seven to eight miles per gallon depending on load rate, speed, terrain, et cetera. So what's the status of electric vehicle technology for refrigerated trucks? Is that coming?
Adam: That is an excellent question. Thank your dad for that one. So I think there's twofold on this. One is that there are those that are building the chassis with battery support in it that isn't associated with the truck itself to support refrigeration. The other is some trucks, including the Tesla, have an EPTO, which does also support pulling a reefer. It does knock down your range substantially, depending upon how cold you need it to be, what the outside temperature is, how far you're going. So that is going to be one of the harder edge use cases that will not be your first to electrify, but we are seeing evolving solutions to that situation.
Jigar Shah: And when you say EPTO, that's just connecting the container to the truck electrically.
Adam: Exactly, so that you can then pull a refrigerated unit and provide it with refrigeration.
Jigar Shah: All right, now we're going to get into the lightning round of hard economics. So I think it's pretty obvious to everybody that diesel costs more than electricity, but why don't you boil that down for me.
Adam: Yeah, and there is no one number for what running an electric vehicle costs — or what diesel costs, frankly. There are regional differences in diesel prices that can vary quite substantially as well.
I would say you break it down between fuel savings as well as maintenance savings. On the maintenance side, we are seeing people go through tires faster, and sometimes quite a lot faster, due to the extra weight and maybe even just the improved torque. But on the flip side, our customers are experiencing savings on maintenance as well. And that is expected to accelerate as these trucks get older and older, or as you're competing against older trucks.
Then there's the fuel savings. Your electricity is your fuel, and that can vary widely depending on where you are in the United States and whether you're essentially charging behind the fence at the retail rate or whether you have to have somebody else like us build a charging depot for you and you're charging in essence on the road. But even so, under these use cases in California, we can typically offer a customer around a 30% reduction in their cost per mile — their total cost of ownership — which is non-trivial as we look out over five-year deployments. And this is also inclusive of the subsidies that are available. That brings people to the yard. That is a good conversation starter, I will say.
Jamie: So Adam, if you had five minutes with my dad or any other skeptical trucker, what's your pitch? What's the number one argument that usually brings people around on the solution?
Adam: Well, if I was talking to your father, I would first congratulate him on doing such a good job of raising an awesome daughter.
Jamie: [laughs]
Adam: And then, yeah, you know, I get it. There's a lot of truckers that are skeptical, and the range anxiety is one of the first and foremost concerns. If you get past that, you really do have to think about your vehicle in a different way.
I would say some of the other advantages — first, the experience of driving an electric truck. You don't have the vibration, you don't have the noise, you don't have the fumes. You are doing one pedal driving, so you are not constantly clutching. We get consistent feedback from our drivers that they really enjoy the experience, that their body has never felt better. Their hips, their knees are in way better condition. And they will never go back. They do not want to go back to driving a diesel after that.
I would also say, these trucks have a lot of power. You are passing diesel trucks when you're going up the Donner Pass. There are some real benefits that if you drive an electric car, you appreciate as well. You see those iterated in the trucks too. But first and foremost, it is that daily experience of being in a vehicle that doesn't put your senses on constant assault. It is just a much more human-friendly driving experience.
Jamie: Well, that sounds awesome. I think next time I'm in town, I'm going to have to bring my dad out to your facility so he can test drive. I'm going to do that.
Adam: You've got a standing invitation to do that. I would also say, what we offer at our depot in the Port of Long Beach is demo fleets. He should not only come to drive, he should bring his typical loads. We give fleets a truck and let them run it on their loads for a week, with their drivers, in their routes, on their lanes. Try it before you buy. When he comes, he should bring his cargo with him.
Jigar Shah: One thing I'm concerned about on the policy side, Adam, is that California is a laboratory for a lot of this kind of stuff. Commercial trucks are only 7% of vehicles, but they're over a quarter of greenhouse gas emissions in California. One of the things I'm curious about though — it does seem like the CARB incentives have sort of been upfront rebates, and that the traditional truck manufacturers have jacked up the cost of their electric trucks by exactly the amount that CARB is providing as a subsidy. Have you guys thought about what the next generation of incentives might look like to sort of break this cycle and really get the total cost of ownership to a place where everyone's just super excited about moving to electric?
Adam: Yeah, I mean, our first challenge here is that we are now shifting between regimes of policy in California. The first effort was around the Advanced Clean Trucks and the Advanced Clean Fleets rules, which were designed to mandate this transition. And there's a role for sticks. There's a role for mandates. But now that has gone away — the Trump administration and their revocation of, or at least attempt to revoke, California's ability to set standards that exceed the Clean Air Act. So we are in a different paradigm where the process going forward is carrots rather than sticks.
And I do think our incentive regime needs to be market responsive. I think the blue ribbon standard for how you design customer incentives has been the California Solar Initiative from way back when.
Jigar Shah: So good.
Adam: The ability to have a set of incentives that were market responsive, that helped build sufficient volume to help bring down those prices, was really quite helpful. I'm a little less worried now. The last opening of incentive availability back in September — it ended up the market spoke. About 80 to 85% of the applications for incentive vouchers were for the Tesla Semi. So if you had a more expensive truck, people just weren't buying it. The market imposed its own discipline without having to have a regulatory or incentive design standard.
So I'm less concerned about needing to have the perfectly most elegant solution right now. Right now, we need to get volume out there. We need to get trucks on the road.
What I think the next phase is really about is consumer demand driven by the shippers. I would like to see zero emission freight be a proper noun — be the next big thing that every corporate sustainability director knows that they need, that every CEO with a customer-facing brand needs to answer to their customers for. This deployment of advanced technology is going to benefit the trucking companies and it's going to benefit, in the long term, the people who are shipping goods.
Jigar Shah: All right, so let's get to the end here. We've talked a lot about California, but how many states do you think will have a critical mass of Tesla Semis, chargers, et cetera by 2030?
Adam: I think it will be principally driven around California for quite some time because of the money California is putting into it — the support for charging through the California Energy Commission, the support for incentives through the California Air Resources Board.
Similar to the solar story, the next place is going to be Texas. Land's cheaper, electricity's cheaper. Those are critical inputs for fueling electric trucks. If you look at where Tesla is deploying their charging, they're putting in a ton of charging in Texas as well. We're developing in Texas as well.
Illinois isn't going to be too far behind either. Chicago is crucial in the freight economy. The Pritzker administration is also quite interested in supporting climate solutions. Any place that moves goods and has cheaper electricity is going to be on the map. Washington is a place where you have a lot of hydro power — cheaper electricity, if they can keep it, if it doesn't all get absorbed by data centers. They haul really heavy. There are some challenges in deploying electric trucks in Washington, but they've been exhibiting cool leadership too. I think New York and New Jersey are going to be some additional places with the political leadership, though the cost paradigms are a little more challenging there.
Canada is going to do great. Ethiopia is going to do great. There are a lot of places in Africa that I think are going to make the switch quicker than some of the states in this country, to be honest with you.
Jigar Shah: We're going to have to do a tour together of Ethiopia. I feel like there's an Energy Empire on the road tour coming up here soon.
Adam: Roadshow! I love it.
Jigar Shah: Well, given how much I hate gas leaf blowers, noise has become like a really big thing for me too. It does feel like a lot of the noise pollution in big cities is also due to diesels. How is it going to sound in some of these big cities as you succeed?
Adam: I think it will sound quieter. Particularly around the commercial deliveries — when you're thinking about all the vehicles that are bringing food to grocery stores, the beverage delivery. I appreciate Amazon when they roll out their electric trucks rather than gasoline. There is that just sort of common backdrop hum in large cities that I hope will be measurably quieter if we are able to get beyond just the insistent backdrop of the internal combustion engine.
Jamie: I mean, you've sold me, Adam. What's not to love?
Adam: I agree. I love it all. But I would also just say, Jamie — it is early days and we are on the cusp of a generational transition to zero emission freight. And I do think nothing succeeds like success. We're going to get more truckers. We're going to get your dad out in a zero emission truck. And then eventually, what I am hoping for is a similar scaling as to what we saw in solar. Once you get to that point where the pull of the economics takes over, things get really exciting right there.
And as we've seen, China moves more freight than the US. 30% of their sales last year were zero-emission trucks. December of last year, 55% of their sales of heavy-duty trucks were zero-emission. This is clearly the future, and our pathway to bringing down costs and building up scale is before us. It's really an exciting time to be pursuing these solutions.
Jigar Shah: Adam, it's always a pleasure to see you. I'm glad that you haven't retired after solving all the challenges in the solar industry and you have decided to take on this new mountain. It's going to be fun to see Tesla Semis come off the line and into your fleet.
Adam: Well, I appreciate you all and all the work that you're doing to uplift and tell the story of hope. There's a lot going on in the world these days. We need y'all's deep understanding of where the good things are as well. So I appreciate you all.