• EV Mack Trucks - The DL S3E20

    EV Mack Trucks - The DL S3E20 is now available on Apple Podcasts, SoundCloud, IGTV, and YouTube.

    In this episode of The DL, Diesel Laptops’ Founder and CEO, Tyler Robertson, is joined by George Fotopoulos - VP of eMobility at Mack Trucks to discuss EV Refuse Trucks.

    Please like, subscribe, and share. If you have questions or would like to learn more about a particular topic, drop a comment and let us know. 

    As always, thank you for watching and listening!

    Connect with George Fotopoulos and Mack Trucks:

    LinkedInhttps://www.linkedin.com/in/george-fotopoulos-56a9444/

    Websitehttps://www.macktrucks.com/

    Transcript for EV Mack Trucks - The DL S3E20:

    Tyler Robertson: 

    All right. Welcome everyone to another episode of The DL. I am your host, Tyler Robertson, also the CEO  and founder of Diesel Laptops. This is the podcast show. We talk about everything going on in the world  of commercial trucks, off-highway equipment. All these are traditionally diesel powered equipment, but as you know, if you've been listening and watching the show and following along, we're talking a lot about EVs and today's going to be no different. I'm excited to learn more. So today I have with us George, who is the Vice President of E-Mobility with Mack Trucks, and we're going to talk about what  Mack has going on, on the EV front. So George, welcome to the show. 

    George Fotopoulos: 

    Ah, very nice to be here. Thank you very much, Tyler, and yes, I say the copper era's before us. So the bronze era's gone, now it's the copper era. Copper being the color of our bulldog, of course, for our EV products. 

    Tyler Robertson:

    Well, this is a really exciting time, because I think a lot of people didn't think EV trucks, they heard it. I think I was at a dealership and we had all this alternative energy stuff going on back in the day. It fizzled out, but now EV trucks, it's not a future thing. They're actually here. Can you give us a little lay of the land? What trucks are available? Are they available to buy? Are there some out there? Where are you guys at currently on the EV side over at Mack? 

    George Fotopoulos: 

    Sure. Let me give you, I guess a little bit of the back in time history lesson here. I think we announced  our intention here on the Mack LRE, LR Electric Vehicle was back in 2018 and the LR Electric, by the way,  it's a refuse vehicle for urban and suburban applications. I think it's good to notate that here in our  beginning of our discussion, obviously for waste pickup there, and we started developing the truck back  in 2019. We put pilots into work and for test and validation back in 2020. Then we went into production  here in 2021 with serial production started commencing in December 2021. 

    And then most recently we've announced actually our next generation LR Electric with an  increased battery capacity. That brings us basically to today, and that's where we're at today. So we  have our LR Electric available to order with actually a few production slots still remaining for the year. So  we even have some in inventory as well, if you want one tomorrow for today. 

    Tyler Robertson: 

    Well, so I got a lot of questions here. Obviously, Mack is going with the refuse market. I see Navistar  went with the bus method first, and I see Freightliner has got their Ecascadias. Does everyone kind of  seemed to pick like a different initial path going down here. Why refuse? Why was that the first one that  really got zeroed in on? 

    George Fotopoulos: 

    Sure. Yeah. It's a easy one. It's a softball question if I may, but it's really easy for me. I'll say that the  Mack is actually the industry leader in refuse. If you look at the March data, we're about 36% of refuse  business and 50% of low cab over vehicle sales out there in the industry in the heavy duty side. So what  type of leader would we be if we would not push the technology envelope in the agenda here on our  core segment, of one of our core segment of ours. So that's one of the reasons. 

    But then the main reasons is that if you look at the application itself of refuse, it's super a well suited application for EV. And why do I say that? It's a closed loop operation and it's a predetermined  route that it does day in and day out. 

    If you look at the average routes that we have out there for the refuse side, they're about 60  miles on average, and then they return home every night, and why is that important? Because, they  have a consistent place to charge. Then the other characteristics of the refuse duty cycle, you're doing a  lot of start and stopping naturally, to pick up the waste bins there on the side of the road. So that allows  for plenty of regenerative breaking opportunities to recapture that energy on that application. So, it's all  about cleaning up our world, the refuse business. Why not do it with a truck that does not dirty it? So  there's many good reasons why we went onto the refuse side. 

    Tyler Robertson: 

    I worked at a truck dealership and I actually did some truck sales, and I've worked with truck salesmen  for a lot of my career. It wasn't really, most times not a complicated thing. It was customers user trucks,  spec a truck. You didn't need to get the factory involved, but you did, as you got into these specialty applications, the heavy haul, or putting a bunch of different bodies on these things, which is obviously  what's going on in the refuse market. 

    So how much is it a process now? Is it an easy thing to spec these things out, or is it a process  where you have to work with a customer and figure out the routes and the right batteries and all these  things? What's the process like versus a diesel, when it comes to purchasing one of these trucks? 

    George Fotopoulos: 

    Sure. I do say that it's a unique process for sure. We do work very closely with our customers and our  dealers, by the way, in that regards. I'll say first that we have a system in place, and maybe this is a little  bit of internal lingo, but we do not allow green orders to come in, and what green orders means is there  is no checking that's necessary to build up the vehicle. So we have a stop gate in place for our LR  Electric. So every spec, every order is looked at thoroughly to make sure it's specked correctly. We also  have a dedicated EV product manager that is in place, and that works with in a customer face and role,  just for this purpose alone, as the subject matter expert to of course, assist our customers, and dealers,  and spec in that vehicle. 

    Then we also have a proprietary simulation software that comes into play, and what this does, it  mimics our route here to ensure that this route is ready for the LR electric and its application, and if  there's anything that needs to be done to that route to make it more accommodating for LR electric.  What I mean by that is, if there's an opportunity to charge availability for that route to be accomplished,  then we can of course engineer that into the actual route itself. 

    And then finally, I want to say that it's not just the truck spec, even though we're talking about  the truck spec here, it's a whole ecosystem that needs to be configured and come into place. Perfect  example is the charging and infrastructure. So bring in those experts to the table and that knowledge to  the customer, to the dealer, to see what solutions that we have in place for charging and infrastructure  needs, as one example, but there's plenty more other examples as well. 

    Tyler Robertson: 

    If there's a traditional diesel powered refuse company listening to this, like man, "We want to go EVs,"  and they don't know anything about it at all, they got no infrastructure. I got to imagine it's a bit of a  process to... There's a learning curve here, and a bit of a process to plan and all that. How long does it  take someone to go through? How long should they think ahead before they want to buy EV trucks to go  through the process? 

    George Fotopoulos: 

    At least six months. The reason I say that is the charging infrastructure bit is a change curve that we all  have to go through in our system and our operations, and some of that has a lot of red tape associated  with it. Sometimes it could take as long as a year, but six months is a good number to use some of the  year type of number to actually plan ahead. Definitely the more, the better, timing wise. 

    Tyler Robertson: 

    So can you talk at all about how many of these trucks are out there today working, and what's the  customer demand been like? Are people really excited about these things, or has it been tepid? What  have you seen out there in the market? 

    George Fotopoulos:

    First of all, I'll say that the acceptance of it, the vehicle itself, you get your butt in the seat, you drive the  vehicle, it's overwhelmingly positive. The driving experience, the build quality, our integrated power  training go on and on. Then when it comes to the actual production numbers, I can give you what we  have announced. We don't really talk about our production numbers for competitive reasons. I hope  you can understand that, but they're actually out there, of course, running in the field. We have demos  that are running across the nation, also in Canada as well. So we've covered it with a slew of demos that  we have out there, and then we have, of course, units that are publicly announced that are running in  New York, that are running in New York City, by the way, with the department of sanitation, and then  we also have it with Republic there in Hickory, North Carolina. 

    So to go a little bit around the other announcements that we've made, we have units that have  been purchased down in Ocala, Florida. We have units that will be on the West Coast with Santa Cruz in  California. We even, like I said, have units in Canada. I'm trying to do the circle of the US to recollect who  we have out there, and obviously the mountain is territories where we have it covered with... Oh, it's  Eco Cycles out in Colorado. So another customer example as well. So they're out there. They're out  there in the wild. 

    Tyler Robertson: 

    Yeah, obviously, we can't have a conversation about manufacturing without supply chain, and I know  order banks are pretty much full in the diesel side. A lot of it's due to chips and component shortages  and raw material. How's it on the EV side? Is it better? Is it worse? Is it kind of all the same? What do  you see there? 

    George Fotopoulos: 

    Yeah, the EV side is not immune to what's happening out there in the supply chain. So obviously we  have strong a relationship with our supply chain partners and we work closely with them, and not just  reactively, but proactively to get ahead of the eight ball when crisis' do come, or before they actually  come, and the problems still exist out there. 

    Everything from the famous semiconductors to a devastating war in Ukraine, to labor shortages.  You mentioned the shipping. The Panama canal store I got yesterday, that was an interesting... They had  a bit of a traffic jam and it's not like we can just fly a helicopter on a ship out there and grab our stuff out  of a container. That's not a solution. So I do personally believe it. It is improving. I think it's because  

    we're working so hard at it and getting ahead of that eight ball to be actually to put some proactive  measures in place, but there's always that darn Murphy's Law thing and it's still have the problems. 

    Tyler Robertson: 

    I worked in dealerships for over a decade and I understand the value of a dealership, how much support,  the knowledge, the parts, all those things, and as I saw all these startup companies coming out last year  and coming out with trucks, I'm like, man, that's a hard hill to climb, trying to like... You make these  trucks, you put them out in the market, someone has got to support these things and do things with  them, especially the guys doing the over the road EV trucks and sleeper trucks and that. So your dealers,  how has it been there? I'm assuming they have to go through a certification process, or can any of them  sell it? How are you guys handling that? 

    George Fotopoulos:

    Sure. Yeah, our dealer partners out there, we have a slew of them. I think this is a great asset that Mack  brings to the table. So when you do buy that vehicle, it's obviously serviced out there in its application,  wherever you may be using it. 

    So yes, all dealers, you can go in there inquiring quote at all dealers for sure. To actually retail  unit and put it in an operation, here the dealer has to become an EV electric vehicle certified dealer.  Obviously safety is the paramount important topic to cover, so making sure that dealer has the right  training, the right policies, the right people, the right tools in place, the right protective equipment in  place as well, and training is a big part of that. 

    Everything from not just the service side of the training, but again, I'll mention the importance  of safety as well, safety training, and also a bit of the selling training, as well as we talked about. It's a bit  different here on the EV side. There's a lot more to cover on the sales progress or the sales funnel. 

    So there's some sales training to be had as well, and then I also made reference to the charging  and infrastructure. So when this truck comes in for service, the dealerships obviously need to be able to  charge it, and that hardware of that charging system, and obviously any investments that needs to be  made, on the utility side also needs to be made. Then finally there is obviously some facility  accommodations to be made, and what I'm talking about here is actually having a service bay for EV,  having a battery area just in case we need to confine a battery, having a crane in part in place, because  these batteries are not lightweight batteries, they are not double A's. 

    And have some common stock parts that are also in stock. So these are the accommodations for  the facilities to be made as well. So it's an extensive process that we bring up the dealers up to this EV  certified level. 

    Tyler Robertson

    So I think the interesting thing here is that usually when I've been talking to people about EVs, it's  California, and rebates, and requirements, and they're pushing hard, but as you were talking there  earlier, you mentioned a lot of states that weren't California that are doing these things. North Carolina  is just up the road from us here. 

    I guess you got to talk about the economics here a little bit. So when I talked to Navistar with  their buses, they're like, "Man, these things are two or three times more expensive, but hey, it's day  one. The analogy we used was when flat screen TVs came out, they were really expensive. Now they're  super cheap." 

    Is there an economic reason for people to do this? Or is it still, the companies are looking at this  saying, "Hey, we want to go EV, we want it to be quieter, do things better for our environment." Is it  that side, or when do the scales start tipping towards the economics of this thing? 

    George Fotopoulos: 

    Quickly, diesel prices these days, that'll help, right? Even before these abnormal diesel price that we  have today, let's just go back to days of $3.50 per gallon for diesel. If you look at the refuse trucks, first I  want to say that the refuse trucks have a long life cycle. It's a very specialized vehicle that typically the  customer keeps for 10, 15 years plus. 

    So what I'm going to say is, if you look at it without any kind of incentives, the payback is there,  again, at normal diesel levels, not at the high... It's even better of course today, be given the fact how  high diesel prices are these days, but at normal diesel levels, the payback is there. Unfortunately it's not  until the double digits of years that the payback comes into play. Now you add incentives into the mix.

    Obviously the payback on that total cost of ownership happens in the single digits. So really,  what do you want to spend your money on, as far as do you want to spend a $100 to get that back, a  $100 more to get that back 10 years from now? That's not a really strong return on investment,  obviously, so there's other values that come into play. So how does a company evaluate the whole  carbon zero part of the equation that's greening up the environment? 

    Is there some value put to that? And I'm talking about shareholder value. There is an interest of  course, for shareholders to invest in companies that are taking care of the future. So there's other  values than just purely economics, that the TCO economics, but you are right. Yes, it's the technology is  new. The vehicle's more expensive than the diesel equivalent. The return investment is there. It's not to  an appetizing level without incentives, but obviously there's incentives out there to be had, and the  diesel prices at six plus are helping matters tremendously as well. 

    Tyler Robertson: 

    Yeah. That makes a lot of sense, and one of the other conversations that always come up with EVs is  weight. These things are heavier, and I know that's a big deal, if you're [inaudible 00:14:11] class eight  stuff. Your class eight traditional tractor trailer. Is that a big deal at all in the refuse market or is the  weight limits... These things got to weigh a little bit more I'm assuming than a diesel truck, or are I off on  that? 

    George Fotopoulos: 

    No, they do. So you take away the engine, you put in the batteries, the net effect is still, it's about a  5,000 pound difference here on our side. But yes, weight sensitivity is definitely a real thing within the  refuse space as well. The reason being is refuse companies, they go out there, they collect 10, 12 tons of  refuse and the vehicle needs to accommodate that. So we take that into consideration in our strategy to  make sure that the customer's money maker, which is payload, is taken into account. We're not going to  just take a truck and load it up with batteries to make it go two, 300 miles when you can only get five  tons a payload on it, obviously. So we took that into consideration in the whole application here at our  whole configuration of our vehicle. 

    Tyler Robertson: 

    So when you're talking to customers, have you ran across yet where a customer really wants to do it,  and then you start breaking the numbers down, and the route and how much you need to haul, and you  got to say, no, nevermind this isn't a good deal for you, or is it always worked out, or what have you  seen there? 

    George Fotopoulos: 

    Yeah, I think both. You're always, obviously going to have ways to get around any hurdles that you reach  within any route that you're looking to apply it, going back to the opportunity charging that I mentioned.  And by the way, we did put a fast charging capability on our vehicle to accommodate that ability. 

    Now, some customers do not want to change their operation. They want to push through the  route and just do it in the eight, nine hours that they're working in that day, and if it's a very long route,  this truck may or may not be able to accomplish that route. So that's why we have that proprietary  software that I mentioned, that makes sure that we are simulating that route. We understand what the  needs are. We understand what the vehicle does. Is it a match or is it not? And when it's not, there's options that come into play, and that major option is opportunity charging that can come into being to  make this vehicle, of course, extend itself in its capabilities, in its range, in that route. 

    Tyler Robertson: 

    So one of the added complexities you have is you're putting a body on it and those aren't bodies that  Mack makes. So what's that been like working? Can anybody get any body they want, or is there certain  brands, certain manufacturers you had to work with on the body side? 

    George Fotopoulos: 

    So, no, we stay very brand agnostic when it comes to the body side of it. We try to make  accommodations as much as possible in regards to fitting various bodies on our vehicles. I do have to say  that throughout the time, we actually have a pre-configuration kit for certain body manufacturers that  are out there, that are quite popular with our customers, and of course, that pre-configuration kit that  you can spec easily on your truck grows with time, as a customer comes about, that wants a certain  body on it. We, of course look at that accommodation. We make that accommodation, that we make  that offering for a future customer as well. 

    So we stay brand agnostic, but I think you know the big players that are out there and they're  definitely pre-configured kits for this application that we have. Now today's LRE is for the side and rear  loader. We do not have a body that is a front loader at this point in time. And the reason for that is the  batteries that we position there behind the cab, we call it the gantry of batteries that there's two  batteries there, and there's two batteries actually on the side of the vehicle. Right now, the  configuration has those two and two batteries, as I mentioned, and it does not allow for a front end  loader, but obviously we look to expand that offering in the near term here as well. 

    Tyler Robertson: 

    So is there different battery options available now for different ranges or is it just, "Hey, this is the one  model we have today, in terms of how far they can go." And what kind of life expectancy can people  expect to get out of these? I know you just talked about people hold these trucks around for a long time.  I think everyone's concern is, "Oh, these batteries are going to be junk in five years and I got to replace  them," but I don't think that's the case. 

    George Fotopoulos: 

    That's not the case. No, they're not built for five years and you throw them away. No, that's not  happening. For your first question is, yes, there is one battery configuration for the vehicle. It's 376  kilowatts to be specific, and that is that the vehicle that is available to order and buy today. So there is  no option on a lesser or a greater battery pack at this point in time. Going back to your other question of  how long do they last, here's the infamous answer within the EV space, is it always starts with it  depends, and what does it depend? Obviously depends on the duty cycle of that battery. How many  times are you cycling it? How many times are you opportunity charging into the day? Are you using it  one shift per day? Are you using it 24/7? 

    So there's various considerations of course on that, it depends, and those criteria make up to  when we feel the battery is reaching a point of time that we need to do something about it. And I'm  going to give you those figures soon, but I also want to state first that what we consider a battery that  needs to be treated is not a battery that's dead. It's a battery that is at 80% of its state of health. So  when you first buy it, it's at a hundred percent and just like your iPhone battery, it doesn't hold a charge the whole day, the battery cells that are in there tend to die out, and when it reaches an 80% ability of  the battery, this is when the flag gets raised for us to do something about this, and you don't just swap  out batteries. 

    You're not going to throw away the batteries that are on them, and you'll never throw them out  by the way. The first thing that you'll do is you'll refurbish the battery, and the second thing that you'll  do is probably refurbish it again, but the third thing you would do is actually we would buy the batteries  back and we would repurpose them for another application. 

    It would not be going into a vehicle. It would be going into, let's say a solar farm in a field, for  instance. So there's other applications to use for the batteries where they're no longer refurbishable,  and let's say they're at 80%, 85% still capable. You don't just take them and then throw them out at that  point in time. And then when they live their life in there, whatever repurposed application, we would  then recycle the battery and the amount of minerals, which by the way, a lot of good minerals in those  batteries, expensive minerals, are recyclable to the tune of 90% or greater. 

    So there's great recycle ability in that battery technology today. Now, trying to circle back to  answer, how long do these battery lasts? The answer I gave was, it depends. I'll say if you're using it 24/7  and not stopping at all, just charging, discharging, charging, discharging, you're probably going to get a  five year cycle out of this battery, again, reaching that 80%. If you're using it one cycle a day, it can go 13  years plus. So that's why the range is, it depends on how much you're using that vehicle, and just like  the diesel, I guess, depends on how much you're using the motor. Same consequence... Yeah. 

    Tyler Robertson: 

    So diesel I'm used to these B50 lives, or number of hours, or number of miles, is there a metric that  people need to talk about when they talk about battery life? Is it like recharge cycles, or hours of usage,  or what's the best measuring stick? 

    George Fotopoulos: 

    It's the typical measure stick is years, and at this point in time, I don't think we're mature enough to say  how many hours have you used the vehicle? Or what kind of kilowatts did you cycle through the  vehicle? That's probably a more accurate measurement, but we're not mature yet enough to be able to  quote those type of figures, or the industry be knowing those type of figures. So the more natural one is,  "Hey, how long does it last?" So it's a time element that comes into the measurement at this point. I'm  sure that'll change over time, no pun intended. 

    Tyler Robertson: 

    Yeah, like everything. I'm just excited. This is literally the start of a whole new era here of commercial  trucks. So for me, it's really exciting. I feel like probably how people felt when the internal combustion  engine came out years ago. I know Mack has been around for over a hundred years. So you guys have  been there, done this a couple times, it sounds like. 

    George Fotopoulos: 

    Yes, and actually before Mack Trucks even started, the Mack brothers, they were dabbling with electric  technology before Mack Trucks Incorporated. So they've been down that road before and we have a rich  history of course, with electric vehicles. Let me state that as well. We are fortunate to be part of a  group, the Volvo Group, which started the electric journey back in the buses, back in 2009, so it's been a  long time that we've been dabbling in this battery electric technology.

    Tyler Robertson: 

    Yeah. So I know Volvo is going a different route with the EV stuff and Volvo trucks, and you guys are  doing the refuse. Can you talk at all, what's next? Or is it just, "Hey, we're going to dominate the refuse  market and then we'll worry about the next market and in the near future." 

    George Fotopoulos: 

    Yeah, this is one other question that I wish I could answer, but for competitive reasons, you know that  we don't comment on future production plans, but I will say that it's safe to assume that we are working  on our EV versions of our complete product portfolio. I'll leave it at that. So obviously the plans are in  motions to accomplish this, but I'm not here to announce any new products today. 

    Tyler Robertson: 

    Well, I had to give it a try, right? 

    George Fotopoulos: 

    Yeah, of course. 

    Tyler Robertson: 

    All right, so if people want to go, is there a website? Where should they go, if they want to learn more  about the LR Electric that's going out there? 

    George Fotopoulos: 

    Sure, yeah obviously Macktrucks.com. That's the one stop shop. You'll see the LR Electric there,  bannered at the top. Obviously there's menu items to be able to search for the various specifications  and any kind of news releases that we have, but then obviously the more impactful it is visit your local  Mack Trucks dealer. So that's, also a very good resource. 

    Tyler Robertson: 

    Just one more question from you. Are these bought in a different way now? Traditionally you buy a  commercial truck, you buy a commercial truck, or you lease it through a leasing company. Are these sold  differently now, like as a service or anything like that, or is it still just strictly I'm buying a truck and here  you go? 

    George Fotopoulos: 

    We have various business models and there is a unique business model that's out there for this vehicle  specifically. So you could traditionally retail it, buy it. You can traditionally of course, finance it out, but  what we've offered on this vehicle, that's unique is this vehicle as a service, and it is a full bundled FMV  lease package. So there is a lease behind there, but it's not just taking care of the vehicle, the chassis itself. It's bringing the body into the mix. It's bringing the charging and infrastructure into the mix. 

    It's bringing the servicing and the preventive maintenance of this vehicle in the mix, the battery  health and the battery guarantee. It's bundling everything that we have into one payment, and it's called  vehicle as a service. There's a lot of collateral at Mactrucks.com, on this specific offering. It is unique. I  can talk about it forever. It's probably another 30 minute section, but yes, that is a very unique offering  that we have on this vehicle, and it's an attractive one at that.

    Tyler Robertson: 

    Well, George, I just want to thank you very much for coming on here. Having some conversations with  us, talking through all these things. Definitely again, start of a whole new era here. People are going to  start seeing more and more and more of these trucks along. It's not just happening in California. It's  happening all across the United States with a lot of manufacturers and obviously Mack Trucks in the  refuse market. They dominated, they have for a long time. I'm excited to see it. I'm excited not to get  woken up at 5:30 in the morning with the garbage truck at my house, hearing in the brakes going and  the engine thumping. 

    So George, appreciate you coming on the show, and for everybody else, we're going to wrap this  one up. We're going to call it an episode and remember, it's not just diagnostics, it's diagnostics done,  right, and you need to start learning electrical. EVs are coming. You need to learn them. You need to  understand what's happening here. There's a whole new world of opportunity opening up for  everybody. So thank you for watching, and listening. 

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