Insights from the Advanced Clean Transportation (ACT) Expo 2023
More than 12,000 people descended on the Anaheim ConventionCenter last week for the Advanced Clean Transportation (ACT) Expo, hosted by Gladstein Neandross & Associates (GNA). Attendance was up 50% over the prior year, demonstrating just how much clean transportation has become a mainstream concern. ACT Expo has essentially evolved into the “Consumer “CES” of Clean Transportation.
Erik Neadross, CEO & Partner at GNA, opened the four-day event, calling this an “unprecedented time in history” characterized by “more commitments to sustainability and investment behind those commitments.” He talked about how fleets are moving out of pilots to scale their zero emission vehicle (ZEV) operations, with “some of first big ZEV truck projects hitting the road” and “billions pushed into this market from every angle” (including Voltera’s multibillion-dollar investment).
The idea of never-before-seen scale served as the foundation of most of the discussions at the conference. Jeff Nieman, SeniorVice President of Product Operations at Hertz explained, “Certainly this hasn’t been done before at this scale.” But achieving scale is essential to the decarbonization of transportation and “We can’t let perfect be the enemy of good.” Steve Hanson, Senior Director of Fleet Operations at PepsiCo explained, “Getting vehicles to real scale production will be key to unlocking economic viability.”
Getting to scale is an extremely challenging prospect given just how much of a paradigm shift ZEVs represent for most fleets. Alex Nicholas,VP of Operations at MHX, explained “I had the epiphany that I can’t look at operating a fleet of ZEVs as if I were running diesel.” Ted Cannis, CEO at Ford Pro added, “There’s a lot of education for fleet managers and drivers who may never have bought a kW in their lives.”
For fleets starting out, experts advised that one size does not fit all. Ari Silkey, General Manager of North America Surface Transportation at Amazon explained, “I have a half dozen different use cases, which drive the types of charging solutions I need. The solution should be predicated on the use case.” MichaelGallagher, Head of Sourcing & Category Management at Performance TeamLogistics advised, “Before choosing your charging solution fully under stand your operational duty cycles. Run route simulations to identify your operational needs and boundaries.”
Not all use cases will be fit for electrification at the same time. Thomas de Boer,Vice President of Commercial Road Transport at Shell said, “We’ll unlock certain use cases first then it may be some time before the next use case is unlocked.”
Battery Electric Vehicles: A $2.95 Trillion Transition
Voltera CEO, Matt Horton, moderated a session titled Getting the Most Out of Your Battery. Panelists were Dr. Nadim Maluf, CEO and Co-founder at Qnovo; Dr.Jonas Boehm, Global Director of Mobility at TWAICE Technologies; and Arun Chickmenahalli, Director of Maintenance R&D, Advanced Vehicle Technology at Ryder. Speaking of the transition from internal combustion engines to battery electric vehicles, Dr. Boehm told the audience, “You are part of managing a $2.95 trillion transition annually.”
But that transition, panelists made clear, still has a long way to go. “Fast charging the vehicle in under 30 minutes without damaging the battery is a must,” explained Dr. Maluf. And we’re not there right now. On another panel, Hertz’s Jeff Nieman explained, “We won’t thrive in a world where ‘fast’ charging is 45 minutes. We need to get to the point where we can recharge from 10% to 80% in 10 minutes.”
One of the challenges, Dr. Boehm explained, is that not every battery behaves as expected. “80% of batteries behave as expected. But there are edge cases – 10% on either side performing better or worse – and those are really important for fleet operators to understand the real range of a given vehicle. Is it 230 miles or 270 miles?” The key is understanding the health of the battery, and that requires data. “Let digital technologies help you with this transition.”
Understanding battery health is also key to commercializing vehicle-to-grid (V2G) at scale. Horton said, “I’ve long felt like V2G has to be part of our solution in the complex energy environments where EVs live.”Panelists agreed and noted that V2G is not yet practical at scale.Differentiating between true V2G and bi-directional charging, Dr. Maluf said, “V2G is much more complex.” Dr. Boehm added that understanding battery health is also key to giving batteries a productive second life – which Chickmenahalli said has the additional benefit of “building confidence in the system.”
Mixed-fuels for the Foreseeable Future
Tuesday’s Executive Infrastructure Roundtable featured a conversation about several fuel options for fleets, including hydrogen. There was consensus that no fuel type is a panacea for every fleet and every use case – a message which dovetailed nicely with Voltera’s announcement that we’ll be developing hydrogen fueling stations, in addition to charging facilities for battery electric vehicles.
During the roundtable, Michael Berube, Deputy Assistant Secretary for Sustainable Transportation and Fuels at the U.S. Department of Energy said, “Not every fuel will work in every place at every time. If battery electric won’t work – for long-haul, for example – then you’ll need an alternative fuel.” Nuray Elci, General Manager of Renewables at Chevron agreed, “There is no one-size-fits-all for heavy duty solutions especially Class 8.” She added, “Liquid hydrogen has the benefit of being more similar to the infrastructure we have today.”
“It’s the infrastructure, stupid.”
As was the case at last year’s ACT Expo, most of the conversations centered around infrastructure. James O’Leary, VP of Fleet Services at NFI took a play on the famous “it’s the economy, stupid” adage saying, “Trucks are the easy part. ‘It’s the infrastructure, stupid.’ 90% of the effort needs to be put into infrastructure.” Alex Nicholas, VP of Operations at MHX agreed, “Literally the power infrastructure is the whole problem to solve, the whole bottleneck.”
Drew Cullen, Senior Vice President of Fuels and Facility Services at Penske Transportation Solutions agreed, saying “The key really is the confluence between vehicle availability and infrastructure. We have to get that right. But there are things you don’t control like utility timelines and funding. It’s a very challenging dance to have to do.”
John O’Leary, President and CEO at Daimler Truck North America (DTNA) said the formula for ZEV success has three components: variable product solutions, TCO parity, and dependable charging infrastructure. O’Leary said the industry is doing great on the first; okay on the second; and poorly on the third. “What our customers can’t find is the charging infrastructure to run these projects,” he said. “Infrastructure buildouts are flailing, and we’re destined to fail until emphasis is put on meeting the charging needs of electric fleets. We have to be able to charge where vehicles are domiciled.”
The required power infrastructure investment is enormous. John O’Leary said that accounting for the Advanced Clean Trucks and Advanced Clean Fleets rules, California alone will need 5 gigawatts of installed capacity by 2035 just for medium and heavy duty vehicles. “The dollar investment required for energy generation, transmission, and distribution to support medium and heavy duty vehicles is $52 billion.” That doesn’t include the cost of real estate, which is a significant portion of the capital expense required for a fleet charging facility.
One of the big challenges, a key topic at the recent EV Charging Summit as well, is that utilities are typically not allowed to raise rates today to pay for upgrades that will provide benefits to future ratepayers; rather, their cases for rate increases have to show how new infrastructure will benefit existing ratepayers. The solution, explained Dave Mullaney, a principal at Rocky Mountain Institute, is anticipatory investment. Indeed, Pamela MacDougall, Director of Grid Modernization at the Environmental Defense Fund, talked about utility regulators in New York having initiated a new proceeding that jumpstarts a process for proactive investment in the utility infrastructure required to meet medium and heavy duty charging needs.
Mark Esguerra, Director of Distribution Planning & Strategy at Southern California Edison, explained “Over the next week and a half we’re filing a general rate case which is focused on work we’ll be doing over the next year, especially grid transformation for EVs. We want to engage with fleets, to share where we’re projecting to expand and learn how that aligns with fleets’ plans. And if our plans aren’t aligned, we want to hear about your near-term and long-term plans so we can factor them into our buildout.”
Beyond the modernization required for power generation, distribution, and transmission, a large part of the infrastructure problem is long utility interconnection timelines. Bill Bliem, SVP of Fleet Services at NFI, gave this advice: “Speak to your utility early and often and ask what the rules are for pulling power from the utility. We knew we had 6-7 MW power but didn’t ask enough questions.” Ashley Horvat, Vice President and Head of eMobility North America at Schneider Electric concurred, “If I had to pick one challenge to solve right now it would be shortening utility interconnection timeline. There’s lots of challenges but this would be priority.”
Esguerra understands the challenge and advises fleets to engage early with utilities. “First is situational awareness, info sharing about what fleets’ actual plans are going to be down to chargers, vehicles, sequencing. We send that info to our utility planning teams to see if the grid has excess capacity or is more constrained. We want to get to a standardized way of making these interconnections happen.”
Even in the best-case scenario, building new power generation, distribution, and transmission capacity is a long process. At sites where grid capacity is constrained, there are ways to bridge the gap. Horvat explained “If the utility is an issue then microgrids or other things might come in. There’s infrastructure that you can bring on site to get by in the interim.” Esguerra explained such solutions could include temporarily reconfiguring systems, mobile batteries, potentially even mobile substations. “Where there are constraints, we’re looking at what we can do for temporary service, interim service, and long-term grid operations.”
Experts at the conference had similar advice for dealing with municipalities and other authorities holding jurisdiction (AHJs). PepsiCo’s Steve Hanson said, “I have a dozen too-crazy-to-believe stories about trying to permit a charging location. Because the use case was so new some people just threw the book at it.” Hertz’s Jeff Nieman explained how his organization is tackling the challenge in a number of different ways, including through public private partnerships. “We have to be proactive. We can’t just sit back and say, ‘this has to change.’ We have to lean in and be part of the solution.”