Speaker 1: A couple of months ago, we asked you guys to
Speaker 1: get in touch and tell us what you think about
Speaker 1: one of the buzziest tech companies around. We wanted to
Speaker 1: hear from owners as well as potential buyers. I've had
Speaker 1: my Tesla Model lest for three years. It's the best
Speaker 1: car I've ever owned. I definitely want to get a Tesla.
Speaker 1: I've always wanted one. I think they are beautiful cars.
Speaker 1: I love the Tesla models. I like the smooth ride,
Speaker 1: the great NAV system, the Internet radio, the connected car.
Speaker 1: We got a lot of that. By the way, Tesla owners,
Speaker 1: we can tell you love your cars. And for those
Speaker 1: of you who don't have a Tesla yet, one concern
Speaker 1: stood out. I called up one of our listeners to
Speaker 1: get a better picture. My name is Ramon Old. I
Speaker 1: am a business seannlists living in southern California. Ramon works
Speaker 1: at California State University in Long Beach. He and his
Speaker 1: girlfriend like driving out of the city into the desert
Speaker 1: near Joshua Tree. We go usually two or three times
Speaker 1: per year, two different medeor showers. So now Ramond drives
Speaker 1: a Honda Element he brought in two thousand and seven,
Speaker 1: but he dreams of owning a Tesla. The Tesla brand
Speaker 1: is synonymous with cool for me, particularly just because I
Speaker 1: admire Elon Musk so much and SpaceX and obviously, you know,
Speaker 1: talking about the media showers earlier. Space exploration is something
Speaker 1: that is absolutely fascinating to both me and my partner.
Speaker 1: At a starting price of thirty five thousand dollars, the
Speaker 1: Model three, the first of which just came off the
Speaker 1: assembly line this summer, is Tesla's most affordable car, and
Speaker 1: Ramont thinks he can afford it, but he has one
Speaker 1: last worry that's keeping him from pulling the trigger. I
Speaker 1: don't believe that any of the four or five weekend
Speaker 1: vacations that we've taken in the last twelve months and
Speaker 1: I saw any charging station. Hi em Akito and I'm Pagakari,
Speaker 1: and this week Undecrypted, we're going deep into the world
Speaker 1: of electric cars and asking why, despite tremendous advances and
Speaker 1: much hype, they still haven't gone mainstream. In the US,
Speaker 1: electric vehicles still make up only one percent of new
Speaker 1: car sales. What could finally change that is an ambitious
Speaker 1: and expensive plan that's already underway, funded by Tesla and
Speaker 1: a handful of other companies to build charging stations along
Speaker 1: America's highways, kind of like new gas stations for the
Speaker 1: electric age, so that drivers like Ramont never have to
Speaker 1: worry about running out of battery on a road trip.
Speaker 1: Tesla just announced that it's expanding its network of superchargers
Speaker 1: to not just highways and destinations, but to the center
Speaker 1: of cities like Boston and Chicago. But will more charging
Speaker 1: points be enough to convince drivers all over the world
Speaker 1: to finally make the leap to drip cars? And what
Speaker 1: happens to companies like Tesla if after investing millions of
Speaker 1: dollars on this infrastructure, they don't sell enough cars to
Speaker 1: make up for that investment. Stay with us, all right,
Speaker 1: yea until Antony. After literally years of waiting, Elon Musk
Speaker 1: got on stage at Tesla's headquarters in Fremont, California. He
Speaker 1: unveiled the Model three card. All right, everyone, people in
Speaker 1: the audience are the people that have designed and engineered
Speaker 1: and built the Model three. It was a big milestone
Speaker 1: for Tesla. Elon says, nearly five hundred thousand people have
Speaker 1: reserved a Tesla Model three and because it's so much
Speaker 1: cheaper than Tesla's Model s and Model X cars. It's
Speaker 1: been viewed as a potential tipping point for the entire
Speaker 1: electric car market. Then, while he was on stage, Elon
Speaker 1: must took a moment to mention by the end of
Speaker 1: next year, there will be three times as many super
Speaker 1: charges as there are today. That should really help out
Speaker 1: a lot. Superchargers are the facilities that Tesla has built
Speaker 1: around the country so people on long drives don't run
Speaker 1: out of power in the middle. They charge your car
Speaker 1: in as little as half an hour, much more quickly
Speaker 1: than the kind of plugs you'd have at home or
Speaker 1: at work. That's so you don't have to wait around
Speaker 1: all day at the electric equivalent of a gas station.
Speaker 1: And Elon might sound relaxed, but the need to charge
Speaker 1: up mid drive is an existential issue for the electric
Speaker 1: car industry. It's super significant and I'll tell you why
Speaker 1: it's it's um in our opinion, it's the last barrier
Speaker 1: to sales for the general consumer. That's Pat Romano. He's
Speaker 1: the CEO of a company called charge Point. Most people
Speaker 1: don't want to worry about that. They just want to
Speaker 1: know that when they're driving along and their batteries getting low,
Speaker 1: that if they look to the left and look to
Speaker 1: the right on the highway. Over the next five or
Speaker 1: six miles, they can see something that looks like a
Speaker 1: place that they can go and get a fast charge.
Speaker 1: So if that's the general consumer sentiment, and there's nothing
Speaker 1: wrong with that sentiment, by the way, because your car
Speaker 1: should be something that is serving you and not not
Speaker 1: the reverse. Um, what we have to do is we
Speaker 1: have to focus on planned build out of appropriate sites
Speaker 1: on highways to cover the world's corridors between metro areas
Speaker 1: before the general consumer population is going to say, look,
Speaker 1: I can make this my only vehicle. Pat's company charge
Speaker 1: Point is the world's largest network of electric charging stations.
Speaker 1: For now, most of his business comes from the long
Speaker 1: duration charging connect there's people use at home or at
Speaker 1: work when the car has hours to charge up. Most
Speaker 1: consumers the fueling model for gas cars is so ingrained
Speaker 1: in their minds that they actually are constantly trying to
Speaker 1: frames are thinking about electric vehicles as how much range
Speaker 1: does the battery have? And it doesn't have as much
Speaker 1: range as my gas tanks, So that must be bad
Speaker 1: because I really want to go somewhere three to five
Speaker 1: days and refuel. Why do you want that shore, why
Speaker 1: not just fuel while you're doing something else. So a
Speaker 1: lot of people who drive electric cars will tell you
Speaker 1: a version of what Pat's saying here that really, you
Speaker 1: hardly ever need to do a gas station style charge
Speaker 1: up because you completely emptied your battery. That's because there
Speaker 1: are actually dozens of charging points all around us. That's
Speaker 1: especially true if you live in a big city. So
Speaker 1: I checked out Tesla's map of where you can charge,
Speaker 1: and I had no idea that in Manhattan, you're basically
Speaker 1: never more than a few blocks away from a parking
Speaker 1: garage that's fit it with a few Tesla connectors, so
Speaker 1: you could keep topping up your battery when you're moving around,
Speaker 1: not just when you're at home or at work, but
Speaker 1: when you go out for dinner, go shopping, go to
Speaker 1: the cinema. I guess most people only do these long
Speaker 1: road trips a handful times a year, although I probably
Speaker 1: wouldn't fit into that category of most people. I drive
Speaker 1: hundreds of miles every weekend to get outside the city
Speaker 1: and go camping and biking and whatnot. So Pat has
Speaker 1: future customers like you in mind when he says these things.
Speaker 1: And that's why, even though his main business is in
Speaker 1: long duration charging. He's going to start building fast highway connectors.
Speaker 1: What it does do is it enables people to buy
Speaker 1: cars um more. You know, it'll accelerate the penetration rate
Speaker 1: to vvs. And what that does for charge point is
Speaker 1: it means those cars show up at work, at home,
Speaker 1: at around town locations, and those businesses have to buy
Speaker 1: the long duration chargers, you know, the chargers that serve
Speaker 1: the long duration parking marketer. And we're engaged with project
Speaker 1: companies right now that are looking at building out either um,
Speaker 1: significant geographic patches in the US, uh, you know, for
Speaker 1: highway transport for the entire US. So it's happening and
Speaker 1: there are going to be multi people, multiple players all
Speaker 1: vying for that. So um, that's good for consumers. By
Speaker 1: the way, it's going to give them even more options.
Speaker 1: Eventually you'll be able to go anywhere on Earth. Yeah,
Speaker 1: so I thank you. In June, the University of Michigan
Speaker 1: published a report saying that they're about sixteen thousand public
Speaker 1: electric vehicle charging stations in the US with forty three
Speaker 1: thousand connectors. A sizeable chunk of those chargers belonged to Tesla,
Speaker 1: which just announced that it's expanding its supercharger stations to
Speaker 1: city centers so that people who don't have plugs at
Speaker 1: home or at work will still have somewhere to quickly
Speaker 1: charge their cars. The first of the urban stations launched
Speaker 1: on Monday in Boston and Chicago. Tesla's website shows that
Speaker 1: they're about nine hundred fifty supercharger stations globally with about
Speaker 1: sixty undred connectors. The company's goal is to get that
Speaker 1: to ten thousand by the end of the year. Expanding
Speaker 1: this infrastructure is obviously a top priority for Tesla now
Speaker 1: that it's mass market car the Model three is on
Speaker 1: the market. I am Chelsea Saxton, and I am an
Speaker 1: electric vehicle consultant and advocate working in the space now
Speaker 1: for over twenty years. Well, we do need quite a
Speaker 1: few more stations across the major highway networks, except for Tesla.
Speaker 1: I mean, Tesla does need to beef up their networks
Speaker 1: with the Model three coming in their increasing vehicle volume coming.
Speaker 1: But the main to stepancy at the moment is infrastructure
Speaker 1: for everybody else. When Chelsea talks about infrastructure for everybody else,
Speaker 1: what she means is that Tesla's network of charges is
Speaker 1: actually already pretty good, but also you can only use
Speaker 1: it if you have a Tesla. They're actually a number
Speaker 1: of different charging connectors out there. It's sort of like
Speaker 1: how an iPhone charger doesn't really work for Android phones.
Speaker 1: The Tesla network is called Supercharger. The other connectors have
Speaker 1: names like Chattamo and J one seven seven to. A
Speaker 1: handful of third party companies are building those networks that
Speaker 1: will serve all the non Tesla electric cars. One of
Speaker 1: those players is charge Point, and we've heard from its
Speaker 1: CEO Pat already in this episode. There's also green Lots
Speaker 1: and electrify America. Electrify America is a U S subsidiary
Speaker 1: of Volkswagen, the German car maker. It was created as
Speaker 1: part of their court settlement for cheating regulators over diesel emissions.
Speaker 1: The big elephant home room at the moment is the
Speaker 1: Volkswagen Diesel settlement and the fact that as part of
Speaker 1: that they're spending two billion dollars through a new division
Speaker 1: College by America on agnostic infrastructure and awareness for eighties
Speaker 1: two billion dollars, that's a lot of money that could
Speaker 1: make a lot of things happen very fast. Electrify America
Speaker 1: is planning to spend its money in several phases, and
Speaker 1: it made its first round of investments this year in April.
Speaker 1: Having the whole U S Highway system covered is probably
Speaker 1: two three years off in terms of, you know, really
Speaker 1: adequate infrastructure. Did not think about the you know, not
Speaker 1: not not have to think about you know, what are
Speaker 1: the two metro areas that I'm trying to drive between? Wow?
Speaker 1: I mean, I think if you live on the West coast,
Speaker 1: I think you're fine. And I think if you live
Speaker 1: on the East Coast, I think you'll be fine before
Speaker 1: that or northeast, I should say. But an arbitrary metro
Speaker 1: connectivity your your a couple of years away. Once the
Speaker 1: charging network is in place, Pat thinks customers will be
Speaker 1: a lot less worried about another fear around electric cause,
Speaker 1: and that's something known as range anxiety. A lot of people,
Speaker 1: including Raman who you heard from earlier, want to know
Speaker 1: that they can travel very long distances on a single charge.
Speaker 1: You don't need four or five six miles of range
Speaker 1: in a vehicle. That's actually overkill with respect to that.
Speaker 1: And I think that that need is going to subside
Speaker 1: when people see fast chargers at appropriate intervals on the
Speaker 1: highway above a hundred and fifty or two hundreds, they
Speaker 1: start to realize, Yeah, I'm largely carrying around a battery back.
Speaker 1: I don't use that often. Of course, it costs a
Speaker 1: lot of money in solving thousands of these charging connectors.
Speaker 1: It's one thing for a group like Electrify America, which
Speaker 1: is getting its funds from the v W settlements, But
Speaker 1: what about Tesla. Some investors might question the wisdom of
Speaker 1: an already heavily indebted electric car maker spending big on
Speaker 1: a whole new project. One day this summer, I took
Speaker 1: a trip down to a Tesla supercharger near New York's
Speaker 1: JFK Airport. The connectors were in the back corner of
Speaker 1: a parking lot. The plugs are stationed at the end
Speaker 1: of a regular parking bay, so you'd reverse into the
Speaker 1: spot and then take out the plug. The plug hooks
Speaker 1: into the back of the car near the tail lights.
Speaker 1: I should say I hung out at the parking lot
Speaker 1: for a couple of hours, and nobody pulled in to
Speaker 1: charge up. When the whole point of your trip is
Speaker 1: to go and talk to owners of these Tesla's. Yeah,
Speaker 1: my takeaway was that I was probably a bit too
Speaker 1: close to the city. Drivers have so many other places
Speaker 1: to top up that they probably only need a supercharger
Speaker 1: when they're in a more remote place. Yeah, going to
Speaker 1: these superchargers is not like going to a regular old
Speaker 1: gas station. Rather than standing next to your car like
Speaker 1: you would when you're filling up gas, most Tesla owners
Speaker 1: plug in their cars and then leave them there for
Speaker 1: like twenty thirty minutes. You want to be able to
Speaker 1: go get a coffee, use the restroom, maybe run an
Speaker 1: errand um. I mean at one point I stopped and
Speaker 1: I was charging the car, and I think I went
Speaker 1: outlet shopping and an ant Taylor, which was very convenient
Speaker 1: for me. That's our colleague Dana Hull, who covers Tesla
Speaker 1: and SpaceX for Bloomberg, and not long ago, Tesla loaned
Speaker 1: her a car and she took it out for a
Speaker 1: short vacation. You know, when I have pulled into Tesla's
Speaker 1: either supercharger or the destination charger, you know, chances are
Speaker 1: there's another Tesla there, or as you're getting ready to leave,
Speaker 1: another Tesla might be pulling up, and so you have
Speaker 1: this kind of social connection. It's almost like going to
Speaker 1: a dog park. If you're a dog owner, you quickly
Speaker 1: get to know all of the other dog owners. You
Speaker 1: child chat about your dogs. The same thing happens at
Speaker 1: a Tesla supercharging or destination charging station. You start to
Speaker 1: chat about your vehicle and over the over the air
Speaker 1: software updates and you know what is Elon Musk doing next,
Speaker 1: and um, it's It's just it's different. Building a charging
Speaker 1: network that covers the whole country, eventually the whole world
Speaker 1: is a business imperative for Tesla. This is key to
Speaker 1: Tesla's whole business model. Because the Model three is their
Speaker 1: mass market car. They're going to have a huge volume
Speaker 1: of cars coming onto the roads within the next couple
Speaker 1: of years, and in order to meet that demand, they
Speaker 1: absolutely need to have a charging infrastructure in place. Making
Speaker 1: a viable business out of Tesla over the long term
Speaker 1: will depend on making the Model three a success. And
Speaker 1: it's clear that Tesla is already at its charging capacity.
Speaker 1: In some parts of the network, there really is a
Speaker 1: congestion issue, particularly in California, which is Tesla's home state,
Speaker 1: and on certain routes like the route between San Francisco
Speaker 1: and Los Angeles, for example. You know, on the weekends,
Speaker 1: road trippers, Friday night people go back and forth, and
Speaker 1: you might go into a supercharger on Interstate five where
Speaker 1: there might be eight spots for eight different cars, and
Speaker 1: there could be a line of people actually waiting. There's
Speaker 1: no two ways about it. Expanding the super charge and
Speaker 1: network is going to be expensive, and a lot of
Speaker 1: investors are already nervous about how much money Tesla is
Speaker 1: burning through. Remember, investing in new charging stations is just
Speaker 1: one of the many big, expensive projects that Tesla is overseeing.
Speaker 1: For the last several years, Tesla has been constructing the
Speaker 1: largest factory on Earth, called the Giga Factory, where all
Speaker 1: its batteries will eventually be made. They also merged with
Speaker 1: Solar City in November, taking on a lot of debt
Speaker 1: that the rooftop solar company had on its books. Tesla
Speaker 1: continues to go back to the capital markets in the
Speaker 1: bond market to raise money to kind of fuel the
Speaker 1: Model three and the expansion of both charging and service.
Speaker 1: So they are definitely spending, you know, millions to kind
Speaker 1: of expand this network, but I see it as really
Speaker 1: being first mover advantage and really kind of cementing their brand.
Speaker 1: The brand and the minds of the public. Despite all
Speaker 1: the money that Tesla and others are investing, it's not
Speaker 1: clear at this stage how much revenue electric vehicle charging
Speaker 1: will generate. So while Tesla is pouring millions of dollars
Speaker 1: into building more superchargers, it's an investment that will really
Speaker 1: come back to them once they start selling more cars.
Speaker 1: For a while, it was free for Tesla drivers to
Speaker 1: charge up, but at the beginning of this year, the
Speaker 1: company implemented a new policy where if you exceed the
Speaker 1: equivalent of about one thousand miles, you have to start
Speaker 1: paying a nominal fee. Most of the people I spoke
Speaker 1: to think we'll end up with some kind of a pass,
Speaker 1: something similar to the data plan that comes with your
Speaker 1: cell phone, that gives drivers access to the charging network,
Speaker 1: and if you're really organized, you may never have to
Speaker 1: stop at a supercharger at all unless you're driving a
Speaker 1: long distance. Tesla has also developed something called destination charging.
Speaker 1: It's another little known but important piece of Tesla's business model.
Speaker 1: This is where Tesla makes its charging connectors available to hotels, wineries,
Speaker 1: places where Tesla owners might like to go on vacation.
Speaker 1: I talked to a man who lives in Salt Spring
Speaker 1: Island in Canada, and he regularly drives from Canada all
Speaker 1: the way to Montana and back. Um. I mean, there
Speaker 1: are a lot of a lot of Tesla owners who
Speaker 1: road trips is a big part of their life. It's
Speaker 1: a big part of why they bought an electric car,
Speaker 1: and they will as they plan their route, they will
Speaker 1: plan it around their charging. And this holds true in
Speaker 1: even more remote places. Dana had a chance to test
Speaker 1: this herself actually in Yosemite. The i Wanne Hotel has
Speaker 1: a destination charger. So this was fantastic because we were
Speaker 1: going to be, you know, in a fairly remote place
Speaker 1: in the mountains, far away from any highway where there
Speaker 1: would be a supercharger. And yet I could plan this
Speaker 1: Yosemite vacation with my family knowing that I could charge
Speaker 1: the Tesla overnight. Eventually, as electric cars come to account
Speaker 1: for a bigger and bigger slice of the car market,
Speaker 1: and we should say that's still quite some ways off,
Speaker 1: utilities will have to think about how a new generation
Speaker 1: of electric cars will affect the national grid. See e
Speaker 1: V batteries are big and could add up to a
Speaker 1: lot of extra burden if hundreds of thousands of them
Speaker 1: are all plugged in and charging at the same time.
Speaker 1: If done haphazardly with no coordination with utilities at scale,
Speaker 1: it is actually a very difficult problem for the grid.
Speaker 1: This is pat Romano from charge point again. If done
Speaker 1: with reasonably, you know, very practical, very simple things, in
Speaker 1: coordination with the grid, it actually helps the grid. Utility
Speaker 1: networks in all countries right now are a sort of
Speaker 1: peak demand oriented. They have to be engineered for peak demand.
Speaker 1: Just explain what pat means here. The grid is set
Speaker 1: up in a way that means it can only handle
Speaker 1: a certain amount of demand at a time. If one
Speaker 1: building decides to turn its air conditioning on and that
Speaker 1: exceeds the generation capacity at that moment, it could bring
Speaker 1: the whole grid down. So for now, the ideal time
Speaker 1: to charge electric cars is at night, when skyscrapers have
Speaker 1: their lights off and electricity demand is generally low. But
Speaker 1: there's a chance that equation could change if renewable energy
Speaker 1: like solar and winds start to play a more important
Speaker 1: part in our energy mix. Because our grid is built
Speaker 1: to deliver electricity instantly, we don't have a lot of
Speaker 1: infrastructure in place to store energy that we can use later,
Speaker 1: So we could be in a situation where there's too
Speaker 1: much electricity being generated during the day when the sun
Speaker 1: is out. So what that means is you want cars
Speaker 1: plugged in at work all day long, and you want
Speaker 1: to potentially in the long term, plugged in at home
Speaker 1: so that opportunistically the rate of charge into the car
Speaker 1: can be managed by the utility. So when the sun
Speaker 1: is burning bright and solar is providing an abundance of energy,
Speaker 1: it's a great time to charge vehicles. In fact, in
Speaker 1: many cases they're paying people to take load right now.
Speaker 1: So there's a lot of really interesting debates within the
Speaker 1: industry going on about vehicle to grid so that potentially
Speaker 1: the cars could act to sort of mobile storage units
Speaker 1: and send electricity back to the grid. We're not really
Speaker 1: at the at the point yet where that's become an
Speaker 1: issue or where that's happening in practice, but it's something
Speaker 1: that people are seeing as a potential synergy that could
Speaker 1: really help manage these load issues that utility operators and
Speaker 1: grid operators are always struggling with. So of course the
Speaker 1: big question is whether having more charges around will mean
Speaker 1: that people start buying more electric cars. I tested this
Speaker 1: out with Ramon Vivero. He's the listener from southern California
Speaker 1: who we heard from at the start. In the beginning,
Speaker 1: Ramon was kind of skeptical. He told me he lives
Speaker 1: in an apartment where he couldn't install an electric charging connector.
Speaker 1: He was also worried about taking an electric vehicle on
Speaker 1: a road trip to Palm Springs. But I actually looked
Speaker 1: online and there are places Ramon could stop to charge
Speaker 1: on the way. So I asked him if that made
Speaker 1: him feel different. I'm very impressed. I didn't think that
Speaker 1: they would be at this point for another year or two. Um,
Speaker 1: so conceivably with only a thirty minute detour, you can
Speaker 1: go four miles. I mean, that's Los Angeles to Vegas,
Speaker 1: seems we I mean obviously, once we have the hyperlips,
Speaker 1: that's entirely different. UM. Waiting on that. And that's it
Speaker 1: for this week's episode of Decrypted. Thanks for listening. Do
Speaker 1: you have an electric car or are you thinking about
Speaker 1: getting one? We'd love to hear your story. Get in
Speaker 1: touch at Decrypted at Bloomberg dot net or I'm on
Speaker 1: Twitter at pa Gadkari and I'm at aki Eto seven.
Speaker 1: If you haven't already subscribed to our show wherever you
Speaker 1: get your podcasts, and while you're there, please leave us
Speaker 1: a rating and a review. I read each and every
Speaker 1: single one of these, and it goes such a long
Speaker 1: way to get the show in front of more listeners.
Speaker 1: This episode was produced by Liz Smith and Magnus Hendrickson.
Speaker 1: A very special thanks to Dana Hull for all her
Speaker 1: guidance and expertise on this topic, and to Isabel Gottlieb
Speaker 1: who helped with research for today's episode. We'll see you
Speaker 1: next week.