Startup Series: Ample
Today’s guest is Khaled Hassounah, CEO and Co-Founder of Ample.
When entirely new platforms emerge, the initial product attempts on those platforms often look like what we already know, and they typically don't take full advantage of inherent differences from the historical way of doing things. For example, when the internet first emerged, media resembled digital newspapers. When mobile first emerged, apps looked like small versions of websites. With EVs, the way they are sold and powered mirrors how internal combustion vehicles are sold. After all, you wouldn't buy a gas-powered car without a gas tank!
But Ample is rethinking all of that. The company’s mission is to accelerate the transition to electric mobility by offering an energy delivery system that is as fast, as convenient, and as cheap as gas, while being powered by 100% renewable energy. They do this by deploying robotic pods that enable modular battery swapping for EVs. Ample's take on all this is to rethink how energy is delivered to EVs and to reconsider the unit economics around powering your car. This episode will inspire you to think of all the possibilities of what things can look like when you reconsider them from first principles.
Enjoy the show!
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Episode recorded on August 25, 2022.
In today's episode, we cover:
[2:57] Khaled's background and transition to climate
[5:11] State of EVs today
[8:38] Nuances around EV charging networks and associated challenges
[13:15] Outlier geographies that have done well with EV charging networks
[17:20] Battery swapping and leasing alternatives
[22:10] An overview of Ample and its battery swapping solution
[32:54] How Ample's solution scales while reducing the amount of batteries across their system
[37:06] Different use cases for Ample's different batteries
[40:23] Details of Ample's charging pods
[43:41] The company's go-to-market
[47:21] Ample's pod setup and servicing
[54:11] How Ample is sharing profits with OEMs, landowners, and municipalities
[59:16] How Khaled is building the business from a venture capital and debt financing perspective
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Jason Jacobs (00:00:01):
Hello, everyone. This is Jason Jacobs.
Cody Simms (00:00:04):
And I'm Cody Simms.
Jason Jacobs (00:00:05):
And welcome to My Climate Journey. This show is a growing body of knowledge focused on climate change and potential solutions.
Cody Simms (00:00:15):
In this podcast, we traverse disciplines, industries, and opinions, to better understand and make sense of the formidable problem of climate change, and all the ways people like you and I can help.
Jason Jacobs (00:00:26):
We appreciate you tuning in, sharing this episode, and if you feel like it, leaving us a review to help more people find out about us so they can figure out where they fit in addressing the problem of climate change.
Cody Simms (00:00:40):
Today's guest is Khaled Hassounah, co-founder and CEO at Ample, which deploys robotic pods that enable modular battery swapping for electric vehicles. Ample's mission is to accelerate the transition to electric mobility by offering an energy delivery system that is as fast, as convenient, and as cheap as gas, while being powered by 100% renewable energy.
Cody Simms (00:01:04):
When entirely new platforms emerge, the initial applications of those platforms often look like what we already know, and they don't often take full advantage of the new platform's inherent differences from the historical way of doing things. When the internet first emerged, media looked like, well, digital newspapers. When mobile first emerged, apps looked like small versions of websites. And well, with EVs, the way they are sold and powered kind of mirrors how internal combustion vehicles are sold. You wouldn't buy a gas-powered car without a gas tank after all.
Cody Simms (00:01:37):
But Ample is rethinking all of that. The battery itself is a significant percentage of the cost of an EV, and recharging an EV takes significantly longer than fueling up your car with gas. Ample's take on all this is to rethink how energy is delivered to EVs and to rethink the unit economics around powering your car. I hope you enjoy today's conversation with Khaled about Ample, and it helps you think about the possibilities of what things can look like when you rethink them from first principles. Khaled, welcome to the show.
Khaled Hassounah (00:02:07):
Thank you. Glad to be here.
Cody Simms (00:02:09):
Khaled, I have been trying to read up on everything you're building at Ample, and I have to say, I feel like I'm interviewing someone who's building a science fiction future here, so if EVs are science fiction future that is already here, what you're building is the next wave and iteration of that. But before we dive in and give people all the spoiler alerts on this EV future or this sci-fi future that you're building, talk a little bit about your background, because you've been building this company now for eight years or so, but you're new to... You were new to the space. From what I can see, you have a healthcare background, so help me understand how you transitioned into working in EV and mobility battery space.
Khaled Hassounah (00:02:50):
Absolutely. I mean, I wouldn't say I'm new anymore. It's been eight years, so now hopefully I'm an expert, but-
Cody Simms (00:02:56):
There we go.
Khaled Hassounah (00:02:57):
You're right, when I first started, it was quite new. So I mean, one part that's relevant is I am an electrical engineer by training. Hopefully, there is a bit some credential to get me to focus on electric vehicles, but worked across multiple startups. Actually, both me and my co-founder, who was also a co-founder of a previous company, but between us, we've had five successful companies or startups that we've started, and they have always been, almost always, in a new space. I started my career after college kind of focusing more on communication, and compliance, and security, and [inaudible 00:03:34] acquisition, and then I went to education, where I worked kind of mostly in working with government to create infrastructure for [inaudible 00:03:42] technology, mostly in Africa and South America. And then I moved into health, and then I moved into energy infrastructure.
Khaled Hassounah (00:03:49):
The theory is that while you have to respect expertise a lot, especially as you're solving problems, every time there is a fundamental shift in technology or the nature of the problem you're trying to solve, you do need fresh ideas. So the people who came up with our most successful startups we know about, that we probably can totally agree on them being some of the most accomplished ones typically have not been from the industry that invented those, and that's because you come with a fresh perspective, and you can challenge [inaudible 00:04:17] You come up with new ideas, and you push them through.
Cody Simms (00:04:21):
That's a good point. I mean, Elon Musk certainly didn't spend his whole career building cars or space ships, and now he's building two of the most successful companies in each of those.
Khaled Hassounah (00:04:30):
And he's one of many, right? [inaudible 00:04:32] of the most prolific founders, they either came out of high school to do something, which they knew nothing about it, or they were first-time entrepreneurs in that space.
Cody Simms (00:04:42):
So I want to come back to then how you landed on the idea of Ample, but before we do that, let's set the table in terms of what is going on today in the state of the world as it relates to EV charging, and also, if Ample didn't exist, what you imagine that future would look like over the next five to 10 years, as EVs gain true mass adoption around the world.
Khaled Hassounah (00:05:11):
We're at the point right now where people, I think, are not debating anymore whether electric is necessary or is the right answer. I think we're just beyond that. I remember kind of when it started out seven years ago, we were still met automotive executives, they were like, "If electric happens," like they were building electric cars, but they're still not convinced, and I think now, it's been almost that, like we kind of [inaudible 00:05:32] that we just need to do this. I think the momentum is there in terms of people believing we need to do something about it. I think the momentum is there in terms of governments starting to be pretty serious about first mandating it, but second also putting a lot of incentives to make it happen, and I think that people who are making the things, the manufacturers themselves, really have to fundamentally shift hardware they approach what it is they're building, and how they plan for it in the long term, and how they plan the product are getting there.
Khaled Hassounah (00:06:00):
So in a way, everything is coming together. I think where we are, though, is we are at the point where there is kind of a poverty of ideas, if I may, in the sense of we assume that we know exactly the answer and how we're going to go and scale it and make it happen, but we're still not realizing that it still doesn't work very well for a big percentage of people. Today, kind of for example, if you can afford to pay a bit more for a car, you don't drive a large number of miles, you have a place to park your car and charge it overnight, electric makes perfect sense, but the challenge is any time you go a little bit outside of that use case, it just suddenly becomes too taxing, too tough, to expensive, too inconvenient. I feel like we're going to be able to realize some percentage of adoption and growth, and then we're going to need different ideas and different ways to do things, just so that we can get to the 30%, or 50%, or hopefully 100% being electric.
Cody Simms (00:06:54):
From a charging network perspective, which when I lean into EV adoption, it seems like the big barriers, one currently is cost, which you presume will go down, two is range anxiety, and three is charger network availability, which relates to range anxiety, frankly. But there are some differences, because even I you have access to chargers today, it takes a lot longer to charge your car than it does to fill up a tank of gas, I think. So maybe help us understand some of the nuances around electric charging, whether it's AC charging, DC fast charging. What are some of the pain points in each of those solutions that exist today, from a, "Hey, I'm going to just..." Like you said, the current model of charging kind of feels like filling up your car with gas. "I'm going to pull up to a thing. I'm going to plug a thing into my car, and then I'm going to wait until I have fuel, or until I have power," which is basically the same model as a gas station. It's just a different form of power. Help us understand the issues that you see in each of those technologies today.
Khaled Hassounah (00:07:55):
To a degree. I'm going to start with the last point you made, because I think it's actually a very, very important point, which is the way we deliver energy through a charger is fundamentally different than the way we deliver energy through a gas station, and the fundamental difference is that when you stop at a gas station, you're not trying to move energy in energy form. You're not trying to burn the gas and convert thermal heat and thermal energy, and then trying to get it stored in a chemical bond somewhere, et cetera. Instead, just we're adding something and moving the car. So effectively, you're not trying to do any energy transformation whatsoever while you're actually getting fuel. You're just moving it physically, and just drive off. And then while you're driving, you actually get to convert it into kind of internal combustion and all these [inaudible 00:08:37] right?
Khaled Hassounah (00:08:38):
The fundamental difference about charging is that that's not true. You're not moving something physically. You're effective trying to move energy through a wire, and then while you're actually plugged in, converting it into a chemical bond inside the battery. Three fundamental challenges with that. The first one is that energy is not information. It is expensive to move. You can increase the bit rate in a line, and that's why you can go to fiber and then everything works. When you move energy faster, there's going to be more friction, there's going to be more heat generated, and it's going to be more expensive, and then you start cooling the line, and et cetera, et cetera, et cetera. So increasing the rate at which you deliver energy comes at a cost, and that's one of the fundamental problems.
Khaled Hassounah (00:09:16):
The second thing is also, because we're trying to do it faster and faster, that's kind of where the battery degradation comes from. In a way, a big part of the challenge, and that's the big fight, is that charging batteries faster reduces their life, and hence, if the battery lives half as long, it's twice as expensive, and that's a big part of it. Is technology not evolving until we solve that problem? We're probably going to solve it in five, 10, 15 years, where you really can charge in a few minutes. I think we're still a ways off, and I think it's going to be exotic and expensive for a while.
Khaled Hassounah (00:09:48):
But even these two fundamental problems are not the bigger problem, which is the way grids, the way we're building grids for 100 years is not conducive to us delivering energy to cars, right? In a way, the way we've built grids is in a way where they're sort of like a tree structure. There's a massive trunk that comes into a city, very high voltage. It gets split into neighborhoods, it gets split until it gets to houses, and factories, and offices, and at the and, at the branches, there is very little power. It's distributed, and the reason is because you don't need to move tons of energy very quickly. You need to use energy slowly over time as you're sitting in an office, or in a house, or operating a factory.
Khaled Hassounah (00:10:32):
When we come to the transportation use case, it is the exact opposite, which is the time I'm getting the energy from the grid takes away from my utilization of the vehicle, so I kind of have to split my time between them. I have to move the energy very quickly, and then go actually use the energy. And grids have not been structured that way. So that's really fundamental. When you think about charging, it's not really the battery technology. It's not can you charge fast. It's kind of how is our grid structured in a way that allows us to suddenly deliver energy to a very different kind of asset, in a way that's efficient and a way that's economically viable.
Cody Simms (00:11:06):
So I'm hearing three big problems. One is with basic AC chargers, they just take a long time. It's going to take a couple hours to charge your car. That's definitely not a pull up to the gas pump and plug in, and then drive away type of use case. Two, with a fast charger, like a DC charger, there are two issues. One is that it degrades the battery life quickly, or relatively quickly, and battery life is, to some extent, the holy grail of EV resale value, because you ultimately need the car that you're reselling eventually to still have enough viable charge for the next buyer. And two, that it gets hot, and it generates incredible demand on a grid infrastructure that is not set up to be able to absorb that amount demand today, which is I think when you often hear people say, "Hey, our grid is not set up to scale for the amount of EV adoption that the current auto makers are forecasting. What are we going to do about it?" Are some of those tensions that you often hear in the EV discussion. Am I capturing the problem set correctly, or did I overly simplify?
Khaled Hassounah (00:12:08):
No, no, no. I mean, you said it much better than I did, and I think in a way, maybe one symptom to that challenge is we've been talking about 350-kilowatt charging for a long time right now. I mean, you go to any major American city, or European city, and they're almost nonexistent. That's because they're really extremely expensive, very hard on the grid, or just not there to support them. And I would even add one other dimension that I think is very very important, which is... And it's somewhat tangential, but I think relevant, is that electrification doesn't necessarily mean greenification. That's kind of another layer to it, which is moving our transportation to electric makes it a lot easier for us to start using renewable energy, but doesn't necessarily guarantee it. If I am stopping at 7:00 PM and using a 200-kilowatt charger, most likely, I'm not using the sun, right? Or I'm using it buffered somewhere that is maybe going to add to the cost, and the expense, and the complexity.
Cody Simms (00:13:03):
And what geographies around the world today have managed charging networks the best? I'm going to presume it's somewhere like Norway, that has very high EV adoption, but maybe unpack that and also, what have they done well?
Khaled Hassounah (00:13:15):
Yeah. I mean, that's a very, very good question. There are outliers that have done a good job. I mean, Northern Europe, or Scandinavian countries generally have done a pretty good job. I think they have less density, and a better network. They have the resources, just from a daily per capita in order to be able [inaudible 00:13:36] And government and policy support in order to build infrastructure well. To a great degree, they benefit from the fact that a lot of people have places to park their car and charge them, so they're a lot more distributed than a Paris, or a London, or a New York, or a San Francisco, right? So in a way, that helps a lot, because then you can use AC charging, you can distribute your usage over time, and hence it reduces the cost, so they have those advantages. At the same time also, they did invest very well.
Khaled Hassounah (00:14:02):
The challenge is, I'm not sure the strategies they've used or what they've done effectively is applicable in many parts of the world, either where people are a lot more price sensitive, developing countries, or countries that don't have necessarily the resources, or places that are a lot more concentrated or have much older grids, that require a lot of upgrades. So in a way, very often, how fast you can move and what choices you make are more a function of your specific circumstance, and I don't know that we yet have kind of a solution to work with across these boundaries, right?
Cody Simms (00:14:35):
Super. Well, thanks. I mean, just a helpful level-set on the state of charging networks. Let's do the same on the state of lithium ion batteries today, and EV batteries in general. I'm making an assumption. We don't really have a robust used EV car market yet, but I'm assuming that as that starts to develop, some kind of measurement of battery health is going to start to become one of the most important factors in the resale value of an EV. Do you agree with that assumption? I'd love to hear your thoughts on that topic generally.
Khaled Hassounah (00:15:08):
No, no. Very much so, and you can actually start seeing even the policies starting to protect consumers in terms of giving them the right to understand where their batteries are. I mean, Europe kind of, I think, as often is the case, maybe have been on the forefront of putting policy to give consumers the ability to understand how their usage impacts the residual value of their car, and also giving them protections around getting a guarantee the amount of minimum kind of state of health that remains, based on what the manufacturers promise. But you're right, in that to a great degree, the one fundamental difference in electric cars economics has been the battery.
Khaled Hassounah (00:15:46):
When we first got the electric cars, the promise was this has 200 moving parts as opposed to 1,000 moving parts, and hence is going to be less maintenance, and live forever, et cetera, et cetera, except for the battery. It's a chemical process that will deteriorate over time, and that means the range will go down, and hence the utility of the car will drop. And you see electric cars, even though they're getting better, and I think the supply chain crunch has helped kind of prop up their numbers, but generally, when you're comparing apples to apples, they drop a lot faster than ICE cars.
Khaled Hassounah (00:16:18):
And that spawns maybe two things that we need to think a lot more about. One of them is how do we not get consumers to have to choose between losing value in their car and losing time, and that's often the compromise a lot of people would have to do, and that's unfair for most of humanity. Like, for maybe rich people who don't care, it's fine. "I'll super charge," et cetera, but for most people, that's a very tough compromise, because both are worth something to them.
Khaled Hassounah (00:16:47):
And the second is also, how do you make it easier for us to continue making use of the rest of the asset over a longer period of time. Right now, if you want to change your battery, often makes no economic sense. You're paying anywhere between 10 and $25,000, and hence it's a lot cheaper for you to buy a new car. What that means is that we're not charging these cars a lot faster, which we shouldn't. The theory is that we keep them longer, and I think we need to develop approaches and ideas for how do we extent the lifetime of the rest of the asset, so that it becomes more environmental friendly, but also more economically viable.
Cody Simms (00:17:20):
And we've seen some models, some business models, where EV manufacturers are shipping battery-less cars, right? Like, I believe NIO in China offers a battery-less version, that does have a swappable battery. We've had on the pod previously, a company called BasiGo, that is in Kenya making electric buses that don't ship with batteries, and that have a battery swapping solution. So I think there are some precedents for cars coming to market that actually, the battery is not included in the purchase price of the vehicle.
Khaled Hassounah (00:17:55):
Another way, also, in which people have done that, is battery leasing schemes. In Europe, they're a lot more popular than they are in the US. [inaudible 00:18:03] When it first launched, it had a battery leasing scheme. You buy the car and lease the battery, or lease either of them independently, knowing that they're going to have different lifetimes, and hence you can actually extend one over the other. So you're absolutely right. I mean, when I'm more thinking, I think the challenge has so far been that the way vehicles have been built is kind of more of an integral part, so NIO has invested in a swapping system, and hence that enabled them to unlock the battery effectively, right? And make that possible. I think [inaudible 00:18:33] that so far has not been the case, just because it's built to be kind of this one piece, so far, which hopefully we're changing. We'll talk about that, but that's the way it's been done so far.
Cody Simms (00:18:43):
We'll get there, for sure. I promise. You know, I'd love to understand, in the current setup, that is the way the industry's working at least in the US and most of Europe so far, which is you buy a car that everything's in it, including the battery and the powertrain. You're charging your car every so often. Again, there are obviously issues with this. It's harder for non-single-family homeowners to have an EV, because you don't necessarily have ready access to charging. Again, the grids are adjusting to completely different power demand use cases than maybe they have had to deal with otherwise. But do you have a sense of how, and averages maybe, I don't know if they help or not, but what are the average patterns that people do with their EVs? Are people on average charging every day? Are they on average charging when they get home from work at night, and plugging their car in? Are they on average charging during the day at a place of work? What does the typical industry charging profile look like?
Khaled Hassounah (00:19:49):
I'm going to give you a couple of data points, but also I'm going to give you a cautionary tale. The couple of data points, first, on average, people who own EVs drive a lot less miles per year than people who don't. This could be seen as one of two things, either the result of the fact that EVs often are a second car, people don't use it as a first car as much, and also, that it is used often for shorter routes, or people who maybe drive shorter routes are the ones who can afford to own EV or drive less the number of miles a day. So in a way, that's kind of very common, and that's been a challenge in terms of how do you get EVs to be as usable as a typical car for people who drive X number of miles.
Khaled Hassounah (00:20:28):
The other thing I would be just caution is to the number of EVs we have on the road is a tiny, tiny percentage of cars. I mean, we're talking about at best 3% in certain places. I mean, if you include kind of Norway [inaudible 00:20:42] right, but if you look at the majority of the human population, it's 1 to 3%, and some places, way less than 1% if you're kind of in a more developing geography.
Khaled Hassounah (00:20:51):
What we end up, the trap we fall into is that we start trying to assess what is the typical driving behavior of someone who owns an electric car, but we don't realize that they're self-selecting. So it's possible... I mean, I'll tell you it's 100% the case that the people who own electric cars are people who drive in a certain pattern that allows them to own an electric car, and hence, we start drawing conclusions about how 97% of the population is going to behave based on the 3% that self-selected based on their behavior. That's kind of part of the challenge. So in a way, the only person that can own electric cars today generally are people who have a place to park it, charge it overnight, and they drive less than 50 miles a day typically, or lower.
Cody Simms (00:21:30):
Good reminder, when we're building new markets, to not use the early adopter data as a leading indicator of where the future is going to be as the market grows, and expands, and starts to steal share from legacy markets, which often have very, very, very different user behaviors than the early adopter markets. I think that's enough table-setting. I appreciate you humoring me with that, but it's really helpful, at least for me, and hopefully for people listening, just to wrap our minds around the state of the world today. Let's jump right on in. What is Ample? You're building something totally different than the way the world exists today from an EV perspective. Walk us through it.
Khaled Hassounah (00:22:10):
Let me just give you the very quick, brief idea. I'm sure we'll dig more into it, but Ample is a battery swapping company. Effectively, we build robots that swap your battery. If you own an electric car, you'll drive it to one of our swapping stations. Robots will come remove the battery, with a fully charged on, and you drive with 100% charge in a few minutes or less. [inaudible 00:22:32] just not sure what it is. There are few things we've done... I mean, battery swapping itself is not a new idea, so there are a few things we've done that are fundamentally different.
Khaled Hassounah (00:22:42):
Other than the fact that swapping, almost everything about what we do is different than what people have done traditionally, but at the core of our innovation is the idea of modular battery swapping, where instead of just taking a whole battery out, our batteries consist of modules, and you just kind of remove those modules and replace them. When you go to the next car, there is the same modules, but in a different formation and a different number of them, and that's what allows you to kind of adapt to different car models and still be able to swap every car, regardless of its size or shape and how much battery [inaudible 00:23:13] That's kind of the idea, that we're battery swapping, but fundamental a modular battery swapping approach.
Cody Simms (00:23:18):
But to make sure I understand this, you're not talking about, "Oh, every five years, you need to swap your battery, because you're starting to have a range issue." You're talking about a thing that to me, it looks like an automated car wash, that you pull into, and instead of plugging into an EV charger, you pull into this thing, little robots go under your car, unscrew your battery, pull it out, put a new one in, and you drive off like three minutes later, so you're no longer charging your EV through a charger network. You're literally swapping a battery out every time you need new charge. Is that correct?
Khaled Hassounah (00:23:50):
Yes, exactly. And we think of it, ourselves actually, as a gas station for electric cars. So in a way, in the same way that today, once you run out of gas, you just stop somewhere and get gas, and then go back on the road, it would be every time you run out of charge, you'd just stop at our station. Our robots pull out the batteries, not literally, but they remove the batteries, put new ones in, and you drive with a full charge. And our idea is that they're abundant, available, they're everywhere, and we'll speak a little bit in a second hopefully, about why we're able to accomplish that, but that's the idea, is that [inaudible 00:24:22] just stop anywhere, get 100% charge, and just leave.
Cody Simms (00:24:26):
Great. So I mean, I have a billion questions for you. The first one I have is what does it do to your vehicle's warranty? Do you have to have a partnership in place with the OEMs, that this is now an Ample-supported car platform?
Khaled Hassounah (00:24:39):
Yes.
Cody Simms (00:24:39):
You do? Okay.
Khaled Hassounah (00:24:40):
We don't touch a vehicle unless we're actively working with an OEM, so this is definitely us collaborating with them. We don't think of OEMs as our customer. We're not selling them batteries. We're really focusing on the end user, be it fleet initially, which is where our focus is, and then eventually consumers, but the idea is that we collaborate with an OEM, so that we'd install our system in their vehicles. Our claim to fame is that we require zero modification of the vehicle so that they're compatible with our system, so it becomes an option, either a fixed battery or swappable battery option, and then you buy the car ready to work with Ample, and that kind of takes care of [inaudible 00:25:16]
Khaled Hassounah (00:25:16):
I mean, from a supplier perspective, we just act like any other supplier. I mean, if today, you buy an electric car, most likely, you're buying a battery in it that's made by someone else other than the auto maker you buy it from, and the warranty works that way. If there's something wrong with the battery, that supplier is responsible for fixing it. Now, one important concept, very important to highlight is, and I think we turn that into an advantage, in the sense that today, when you buy an electric car, like we talked earlier, you have this expensive part in it, and you're super concerned about it, because if it goes bad, your residual value is very bad. Your car is a lot cheaper, and you're not going to be able to make your money back when you sell it.
Khaled Hassounah (00:25:56):
We think that's kind of upside-down. It should be the other way around. The idea is that a battery is a gas tank. You don't worry much about your gas tank when you're selling your car. So the idea is that you should worry about the rest of your car, and someone else should worry about the battery, and make sure you always have one that's... That's kind of the role we play. We say instead of having the battery being an expensive part that you pay a lot of money for up front and then you have to replace if it goes bad, you don't pay for it, and instead, you pay for usage as you use it, and then we're always going to see that you have a good battery, and that's how you get a lot more lifetime out of your vehicle.
Cody Simms (00:26:30):
We're going to take a short break right now, so our partner Yin can share more about the MCJ membership option.
Yin Lu (00:26:37):
Hey, folks. Yin here, a partner at MCJ Collective. Want to take a quick minute to tell you about our MCG membership community, which was born out of a collective thirst for peer-to-peer learning and doing, that goes beyond just listening to the podcast. We started in 2019, and have since then grown to 2,000 members globally. Each week, we're inspired by people who join with differing backgrounds and perspectives, and while those perspectives are different, what we all share in common is a deep curiosity to learn and bias to action around ways to accelerate solutions to climate change. Some awesome initiatives have come out of the community. A number of founding teams have met. Nonprofits have been established. A bunch of hiring has been done. Many early-stage investments have been made, as well as ongoing events and programming, like monthly Women in Climate meet-ups, idea jam sessions for early-stage founders, climate book club, art workshops, and more. So whether you've been in climate for a while or are just embarking on your journey, having a community to support you is important. If you want to learn more, head over to mcjcollective.com and then click on the members tab at the top. Thanks, and enjoy the rest of the show.
Cody Simms (00:27:39):
All right. Back to the show. So do you expect... And obviously each OEM, each dealer, is going to manage pricing of their vehicle however they want to manage it, but you would expect, then, that there will be a future EV market where a consumer can buy a full-priced EV with the battery installed, or can buy an EV, presumably at a pretty significant discount, that comes with an Ample battery swapping placement and tie-in.
Khaled Hassounah (00:28:07):
[inaudible 00:28:07] cheaper, so you can already acquire the vehicle cheaper than a gas car, and not just that, but as I said, you will be able... We'll guarantee the battery continues being good over time, and that means that you'll get a lot more use out of it. If you want to own the car for 12 years, you can do that. If you want to sell it after five, you'll still get a lot of value from it, because you don't have this part that went bad in the car, and then the value of the car went down.
Cody Simms (00:28:34):
So if I am a homeowner who has solar on my own roof, and basically has free, perpetual access to electricity, maybe I buy an EV that has the battery already installed, because I can fill it up essentially for free all the time, but if I don't, or even if I do and I want to own the chassis of the car for the next 20 years, then I may opt for the battery swapping model, where I'm essentially paying, then, every time I want to swap my battery out. How does that compare to, say, the current cost of filling up a car with a tank of gas, as an example?
Khaled Hassounah (00:29:08):
It's a very good question. I mean, our commitment to all our customers today and future customers is that we're going to be 20% cheaper than gas, right? And that's without them having to install chargers and pay for them, getting a gas station like experience, where within minutes, you get 100% charge, not having to pay a lot for a battery that goes bad, because you kind of abuse it by charging it. So with all of these advantages, still per mile, you're paying 20% cheaper than gas, which is not what you could say about kind of other approaches.
Cody Simms (00:29:38):
Yeah, and I presume as well, that with a battery swapping system, the batteries, over time, are going to get better and better, so you're not stuck with a five-year-old technology in your car. You're continuing to drive on the latest and greatest battery technology as well.
Khaled Hassounah (00:29:53):
And actually, one of the things, so when we first started Ample, people think that the first thing we did was to start playing with robots and figure out how to do swapping. We actually didn't. For the first two years of Ample, our prime focus was how do you build batteries that can work across vehicles, and in doing that, because different vehicles are designed to work with a kind of different chemistry, different voltage ranges to a great degree, actually more and more so over time rather than less, so how do you make one battery work across different vehicles?
Khaled Hassounah (00:30:20):
And in solving that problem, we ended up kind of innovating on an abstraction layer between batteries and vehicles, and what that meant is that now you can plug the same battery into a different vehicle, but also over time, as battery changes, even if it's not compatible with a vehicle, you can actually immediately make it compatible with the same existing vehicle. So you're absolutely right. Today, you buy an EV, you expect over two, or three, four, five, eight years, the range is going to drop. In our case, it would probably grow, because we're putting better batteries in the system, and hence, you're getting more range over time.
Cody Simms (00:30:53):
Why do you need to have one battery that fits them all? You're only servicing my car if you already have a partnership with my OEM. When I pull into a Ample swapping booth, why wouldn't you notice that I'm a Rivian, or a GM, or whatever, and just give me the appropriate battery type for that car?
Khaled Hassounah (00:31:13):
I mean, let's think about gas, right? If Ford, and GM, and Hyundai, and Toyota required a different kind of gas, you're going to need a lot more gas stations than you have today, because you need place to store all of that gas. So in a way, we wanted to say, even as we scale and deal with a wider and wider range of cars, you should not need to build infrastructure for each [inaudible 00:31:32] That's just going to become [inaudible 00:31:34]
Khaled Hassounah (00:31:33):
And again, one thing, Cody, that's important here is to think about not what's going to happen when you have 1,000 cars active or 10,000 cars active. What's going to happen when it gets to a billion cars on the road? If you start scaling things, a lot of problems that seem smaller right now become a lot bigger over time, right?
Cody Simms (00:31:51):
And what's the average time to swap a battery? Now getting into your robots and how effective they are, what does that look like?
Khaled Hassounah (00:31:58):
We're right now kind of in the 10-minutes range, and we continue to innovate, so we know that we're going to get to five minutes fairly soon. I mean, five minutes below is when it's indistinguishable from a gas station experience. I mean, even at 10 minutes, but 100% charge, without really any impact and 20% cheaper than gas is still the best offer you can have in EV today, but we're just not satisfied with it. We think we can... or we're fairly confident we can get to five minutes and lower.
Cody Simms (00:32:26):
And do you need to have an order of magnitude... Right now, we already know one of the challenges to scaling EVs is access to the actual materials that are needed for those batteries. Whether that's lithium, or cobalt, or whatever, there's mining scarcities of those metals today. If all of a sudden now, presumably you have multiple batteries out there in the world for every EV that exists. Does that mean we need an order of magnitude more access to battery materials?
Khaled Hassounah (00:32:54):
Yep, yep. That's a really, really good question. Let me first answer kind of maybe comment on how we determine how many batteries we need, and how it's not kind of as many batteries as there are cars on the road. But then let me tell you, really also, in a scaled system, how we actually will need less cars than people will need today, right? The first part is, you come, we swap your battery, and then you leave. The moment you leave, we actually took the battery we took from your car and we start charging it, and within two or three hours, it's ready to put in the next car. So in a way, we do that a few times a day, and you need one battery [inaudible 00:33:30] to serve multiple cars, and you typically don't come once a day, you come twice a week, or maybe once a week, and hence the ratio of cars typically not as [inaudible 00:33:39] It's not like 1:1. It's probably more like 1:10, 1:20, so for every 10 to 20 cars, you have one battery outside.
Khaled Hassounah (00:33:45):
So that's kind of what it is, and then if you take the cost of the battery, now we're talking about 5, 10% of the cost of a battery in a car, and it's a third, so you're really dealing with 2% additional... It's really somewhat negligible by the improvement again in the whole economic system we just covered easily, so in that way, we can be profitable doing that. Now, the interesting thing here is that what's happening in the EV industry is what we call our kilowatt hour arms race, which is every time an OEM or an auto maker kind of figures out how to make an electric car that's profitable, and makes sense, and they can make money out of it, the next auto maker puts more kilowatt hours in the car. And now they're at a disadvantage, and they have to stuff more kilowatt hours and more kilowatt hours.
Khaled Hassounah (00:34:29):
So you end up with kind of a car that goes 400 miles on a charge, when most people drive 30 miles a day. What ends up happening is now you have a lot more range than you actually need, and you have a heavy battery, that's a third of the weight of the car, where effectively it's using a third of its energy just moving itself around. So it just not extremely efficient, doesn't make sense, it's expensive, and to a great degree, the reason you want more and more range is because what you call range anxiety, which we actually call charging anxiety.
Khaled Hassounah (00:35:01):
When you buy a gas car, you don't think twice about how big is the gas tank. You almost never ask that question, because you know, every time I need energy, I stop somewhere for a few minutes. So in a way, the reason we're concerned about the range of EVs is not because of how far a car goes, but because what happens when I run out of charge? And then I get stuck somewhere waiting for an hour in a dark parking lot somewhere. That's really kind of the experience, and no one wants that, even once a year.
Khaled Hassounah (00:35:22):
If you solve that problem, then range anxiety goes away, but more importantly, if I come to you and I say, "Hey, you're going to get a cheaper car, and you're going to pay X number of dollars if you get 400-miles range, but if you're driving 20, 30 miles, how about I give you 250 miles of range, and charge you a lot less? But then one day, you want to take the long trip, I'll put more battery in your car," most likely, you'll go for that. Why would you pay more when you don't need it? What we've done there, is I would take all of the cars on the road, and we can reduce the amount of battery across the system, without reducing the utility. You still can take the long trip when you need it, you still get the energy very quickly, and it's still cheaper. So in a way, we think that in a scaled model, we'd require considerably less battery than everyone else, even though we have batteries outside the car.
Cody Simms (00:36:09):
What I'm hearing you say is an assumption that when I pull up to an Ample station, or an Ample pod, or whatever you want to call it, I can somewhat choose what kind of battery I want to have in my car. Is it going to help me do my 15-mile commute every week, or hey, I'm about to drive cross country, give me the 400-, 500-mile range battery in there so I can go as long as I want.
Khaled Hassounah (00:36:30):
And we can already do that.
Cody Simms (00:36:32):
Yeah, and you already do that, and so I presume that also is a huge requirement for different fleets that you might work with, as you think about a fleet owner who might be a taxi cab provider, or might be... I know you have a partnership, I believe with Uber, where presumably, you're helping their drivers convert to driving EVs, because now instead of having to worry about sitting and charging for a couple hours a day, they can drive into an Ample station and swap out their battery, and be on the road in a matter of, like you said, 10 minutes. But they're presumably wanting as large of range as possible, given their use case.
Khaled Hassounah (00:37:06):
Not necessarily. I mean, if they're very price sensitive, these drivers are good economists. They understand kind of when you can make more money, and how to drive to save yourself money, and how to time yourself, so they're just very conscious. I mean, typically, they're eight to 10 hour drivers every day, so they're professional drivers. The majority of them have come from people who drive that way, and hence, we just give them the options, and they choose, right? So if you say, "Hey, in the morning, stop somewhere for five minutes, in the evening, stop somewhere for five minutes, and you can save a couple of hundred dollars a week," that typically is meaningful enough for them, without really a lot of cost.
Khaled Hassounah (00:37:42):
But you're right. I mean, there is certain use cases in which that's less relevant and others in which it is. If you are a last mile delivery, you are an Amazon or a FedEx and an APS in the beginning of the day, you know exactly the route. You know how many miles you need. You can literally kind of send that data to an Ample pod, and it will put the right number of batteries in the system. And hence, you can give them exactly the range they need plus 30%, so they never get stranded, and you're 100% perfect.
Khaled Hassounah (00:38:09):
So that's, I mean, or a consumer which might know whether they're going on a long trip or not as you explained, et cetera. So in a way, I think it gives you optionality. It gives the fleet owners or the individual drivers the ability to decide for themselves, "What do I need, and how to optimize in a way that saves me cost and time?" And that's what's lacking from what we're doing with EVs today, where we're taking optionality away from people. We're saying it's more expensive, it's lower range, you're going to spend more time, and it sucks, and there's nothing you can do about it, but we're just trying to give that power back so people can make up their own choices.
Cody Simms (00:38:41):
I've got personally a consumer internet digital media background, and this just all reminds me of in the early days of the internet, the original news sources were the newspapers who came online, and what they published online looked a lot like a newspaper, except that it was online. And you know, we all know how much news has evolved as a native form to the internet came into being, with social media and all of that. It's interesting, with what you're saying, today again, even though the chemistry is fundamentally different of how you pull up and fill up your car at a gas station, today EV charging feels a lot like how you sell a car with gas stations and all of that, and you're proposing a much more potentially EV-native model to the entire solution of how do you power your vehicle going forward.
Khaled Hassounah (00:39:25):
I mean, that's right on. Let me just kind of comment on that, because it's really interesting, which is you're right. The moment we kind of make a transition to a new technology, even though it looks very different, it often mimics the way we're used to doing things. It takes a little bit of time, and thinking, and developing of ideas and technology until we get to a point where we really can make use of the new medium. You're absolutely right, and I think the advent of the internet is exactly... Almost everything looked the same as it was before this happened online, and now it's fundamentally changing how we do a lot of things.
Cody Simms (00:39:58):
Talk to me about how you charge the battery. You've got these cars that are pulling up into your pods, your robots are removing all these batteries, putting new ones in. You're stockpiling these depleted batteries. What do you do? Are they charged there on the spot? Do you have access to power at the pod station? Are the robots also charging them right there, and preparing them for the next level of distribution? Are you taking them away somewhere? What does that look like?
Khaled Hassounah (00:40:23):
So they charge on premises, right? Or inside the same swapping station, or the pod. It's connected to the grid, and hence, when we take the batteries out, because they're smaller, right? They're actually almost this size. I don't know if you can see it, but effectively [inaudible 00:40:39] just plug them into a shelf and they start charging. We're monitoring them. We make sure they're safe. If there's anything wrong with them, we shut them down and [inaudible 00:40:45] them aside, all that goodness, but we're charging them on site.
Khaled Hassounah (00:40:49):
Now, the advantage we have is that the amount of... And that's kind of where some of the great advantages start to appear, is that because we're separating recharging the batteries from refueling the car, we can take our time. Like, we don't want to put all the energy in your car in half an hour to an hour. We can take three hours charging this battery. Hence, the amount of power we need is considerably lower. That opens up a lot more sites than you have access to in a DC fast charger situation, which it's so expensive to construct, and you need six of them. Before you know it, you need one- to two-megawatt connection. In our case, our suite runs 100 kilowatts, which you look at any building with two parking spots next to it and you have access to that power. So it's opened up a lot of sites in which when we put our station, we can very easily connect to the grid. But we are always connected to the grid.
Khaled Hassounah (00:41:39):
Now, we're thinking about, okay, what do you do between LA and San Francisco, for example? And there's tons of sunlight and lots of space, and you put a big solar panel next to it, it becomes self-sufficient. There are interesting ways that we could do something like that, but within the cities where really we think is the toughest problem to solve, we kind of make it a lot easier to solve, because our power requirement is considerably lower. But we're always connected.
Khaled Hassounah (00:42:01):
The other thing that gives us advantage is now we can... Because we're choosing when we charge the batteries, we can optimize for renewable energy usage. So we can say, listen, we're charging them between 11:00 AM and 4:00 PM when the sun is most available, and still be able to deliver 100% charge in five minutes at 7:00, 8:00 PM, when you come over.
Cody Simms (00:42:22):
And from a distribution perspective, from the pods, are you basically competing with the charge operators, charge network operators, and the EVSE companies, or what does that look like? I presume you're talking to municipal governments, you're talking to retailers, you're talking to corporate landowners, and parking garages, I presume a little bit all of the above.
Khaled Hassounah (00:42:45):
All of the above. I mean, you're talking about kind of from a state's perspective and access to locations to put them.
Cody Simms (00:42:51):
Yeah, where are the pods going to live?
Khaled Hassounah (00:42:54):
Great, great. I think generally, yes, we're competing for space. I mean, especially in cities. Because our power requirements are different, they're lower, our space requirements are different, typically we have a lot more spaces available for us, that we wouldn't compete with a fast charger trying to find a space, because they are willing to pay a lot more money because their cost structure is a lot higher. We can make it a lot cheaper, and hence reduce the cost to the end user, and as we said, we have a lot more sites available to us. So there's some competition, but not a lot of overlap.
Cody Simms (00:43:25):
Let's go into your kind of initial go-to-market. I would imagine scaling this out in a direct-to-consumer model to start is challenging, even if it has tons of benefits for consumers over time, your fleet model is probably how you're finding initial customers, but maybe walk us through that.
Khaled Hassounah (00:43:41):
We don't think consumer is tough. We just don't think it's the right... It's a lot easier to do fleet. We don't think consumer is tough, but we think we can create a geographic concentration, and we can create a very fast adoption, and we can solve a tough problem for people who will move tens of thousands of vehicles to electric in a city if the infrastructure supports them. It's just often, they're either not available, or it doesn't work for them, or for their use cases, or economics, especially given their low margin often in these businesses. Knowing that's our focus, right? We'd much rather kind of sell 10 customers that want to convert 10,000 cars than convince 100,000 consumers to make a transition.
Khaled Hassounah (00:44:19):
The effect though, is that the moment I have enough fleets in a geographic location, that have allowed us to build infrastructure... So in the Bay Area for example, we got there, in the sense of now we are everywhere. Like, we are Oakland, San Jose, and San Francisco, and everything in between. You can go anywhere and get 100% charge in a few minutes. Once there is enough infrastructure, this starts making sense for consumers. So that's going to be kind of the next step for us in these markets. So we start with the [inaudible 00:44:46] to create infrastructure in a way that makes economic sense, and then we transition to consumer, and we're starting to have those conversations with automakers, of what's the strategy, what's the concentration, how do we do it?
Cody Simms (00:44:57):
Are the fleet owner relationships that you're engaging with open to helping you... I guess maybe let me back up. Are the fleet owners paying for the pods, or are you putting the pods in place, and are the fleet owners requiring that those pods are only used by their fleets, or are their fleets using them, but they are essentially public units?
Khaled Hassounah (00:45:18):
Yeah. No, so one of our promises to fleets we work with, or in the future consumers, is that they don't pay for infrastructure. So we cover the cost 100%, and what allows us to do that is that our cost structure is lower. Our sites are cheap, our stations are not expensive, because we're not moving a lot of heavy weight, so that means that they're really, very inexpensive. Takes us a couple of weeks to build them, and we don't dig in the ground, so it's very cheap, and easy, and fast to construct. It's a lot of based on a result of our modular battery swapping, because they're simpler robots, and... Not simpler, our engineers will not like me saying that, but they're kind of cheaper to construct and build, and a lot more reliable.
Khaled Hassounah (00:45:59):
So [inaudible 00:45:59] our cost structure is low, so we pay for the infrastructure up front. Now, typically we like public infrastructure. So when we work with a fleet, we say, "Hey, we'll take care of it. We'll make them available." Because we have so many sites that are public, I mean, you're not in silos. You don't have your own station, someone else's station. You can make use of all of the stations, and we can distribute the demand over time. In a way, that's kind of the approach we take. That said, there is some fleets we're working with that have high enough demand in their own depot, it warrants us putting a station there, just because it just makes sense from a usage standpoint. But we still give them access to the public stations as well, because the drivers should be able to go anywhere, and similar to a gas station, just be able to get access to 100% charge in a few minutes.
Cody Simms (00:46:42):
So presumably then, these fleets have an app that shows them all the charge pods they have access to, the swap pods they have access to, and then the consumers would have an app that just would have maybe two fewer, because it doesn't include the fleet depots' proprietary pods or something like that?
Khaled Hassounah (00:47:00):
That's exactly right, yeah. [inaudible 00:47:02] I mean, in this deployment, and the next one we're doing in Europe, that we actually kicked off in Madrid, the majority of the stations are public stations, so everyone who is in the system has access to all the stations, generally.
Cody Simms (00:47:16):
These pods are... They're not built on site. They're modular. They're dropped in place. Is that correct?
Khaled Hassounah (00:47:21):
To a great degree, yeah. I mean, there is a little bit of setup, kind of you bring the pieces and you connect them together, and you do it, but yes, it's not construction. There's no digging. They come in kits, and you put them together and turn them on. So right now, it takes us about two weeks to get a station up and running. That's come down from three weeks. We think that within the next six to nine months, we'll be able to build a station in three days.
Cody Simms (00:47:45):
And what permitting steps are required?
Khaled Hassounah (00:47:48):
I mean, we will need... This is equipment. It's not a structure, just because of the way it's built. So typically, we are certified. We've got a certain fire test requirement, and mechanical system requirement, so the permitting is like installing a piece of equipment. There is certain standards and codes you adhere to in certain places. For example, like California, there's a seismic requirement. You have to anchor them to the ground, et cetera, so you have to adhere to local requirements, but generally, they're certified as a piece of equipment that you can safely install in other... I mean in a way, it's kind of like a static storage system that has been validated. The standards are fairly sophisticated and developed, so we just follow these standards, and then we can install them anywhere.
Cody Simms (00:48:29):
I don't know the answer to this, but it makes me wonder what the average time to get a gas station constructed and permitted is, but I have to imagine it's more than two weeks.
Khaled Hassounah (00:48:38):
I think the challenge is that really, the environmental impact is often where they spend a lot of their time, right? They're putting gas in the ground, so that's often their challenge, yeah.
Cody Simms (00:48:49):
And what about servicing? Speaking of gas stations, my father-in-law owned convenience stores throughout a small town in Kansas his whole life, and on at least one or two of those properties, he had a couple of robotic car washes, and I can tell you, in the winter, those things were the bane of his existence. They were breaking down or having issues quite frequently, and he was having to go out and service them all the time, himself as a small business owner. What does servicing of the pods look like, given the amount of complexity you have? You say the robots are simple, but they're more complex than probably most things people are driving their car into on a very regular basis.
Khaled Hassounah (00:49:25):
Yeah, yeah. I mean, these are kind of really sophisticated pieces of equipment, so in a way, there is a considerable amount of sensing in them. These motors know days, sometimes weeks in advance before they start failing. They start seeing higher torque and higher friction. Everything is monitored, so to a great degree, we actually have kind of a preventative maintenance system. We always go out, and maintain, and check, and lubricate, et cetera. But at the same time also, we have active monitoring of all the stations. In fact, we have a command and control center here in which someone has access to every station that's deployed, and can go and get readings from almost any system. So the system's smart enough that the moment there is anything that seems off, that could fail in the future, it flags it, and then we send a service technician that checks it, validates it, maintains it, or replaces it, and keeps going.
Khaled Hassounah (00:50:13):
Now, it's an operation. You're building systems out there, and one thing we're learning from our friends who are doing charging is that it is important to keep things up. So from day one, we're really building a lot of sensing, a lot of cloud integration into the platform, so that we can almost immediately, or they said even weeks in advance, can detect that there's something wrong, and make sure it doesn't go bad. I mean, one of the worst experiences, sadly, and I understand kind of the challenge, is that people go to two, or three, four, five charging stations before they get to one that works, and that's not going to scale. At some point, people are not going to be able to run their lives that way.
Cody Simms (00:50:51):
Absolutely, yeah. There's a great startup called ChargerHelp! that I know is doing a lot of work to help maintain chargers, because oftentimes, these chargers that are installed didn't come with service contracts. I know people who have EVs who have that experience, where the chargers themselves are not working, so I'm glad to hear you guys are building that in. It sounds like you own that model, so it's not stuck with the parking garage, or the restaurant, or whatever that has your pod in place. Like, you're going to own servicing of the model, because you're directly profiting off of, I presume, each battery that's swapped in any given pod. Is that correct?
Khaled Hassounah (00:51:28):
Exactly, and from the beginning, we said we don't want to be equipment sellers. I mean, we're not building things we're going to sell. We actually want to be in the business of delivering energy. We want to make sure people get the energy they want, as fast as they want it, and as easily as they want it. So when you think of it that way, kind of you start... Because you're going to eat your own dog food. You have to kind of start thinking about, "Well, I'm going to be responsible for making sure these are up, and if they're not up, then I'm not going to be able to deliver my service," so you think very differently about your system when you're the one who's going to maintain it and make sure it's running.
Cody Simms (00:52:00):
So let's actually walk through the unit economics a little bit, because we haven't done that. Let's say I'm a consumer. I pull into a pod. I'm going to swap my battery for, you said somewhere around 20 to 30% less than a tank of gas, so call it 50 to $100, depending on the type of battery that I want to put into my car. That charge will last me, call it 250 to 300 miles probably, which is roughly about the size of a tank of gas, give or take. Of that, call it $50, then you are presumably taking a cut of that. The landowner that is supporting the pod is taking a cut of that, and I presume the OEM, who has enabled the battery to support Ample, the car to support an Ample battery platform in the first place is taking a per-transaction piece, or did they get some kind of upfront payment from you for supporting the platform in general?
Khaled Hassounah (00:52:52):
Yeah, yeah. I mean, no, we do kind of share our revenue with the OEMs, our... The OEMs, about 100 years ago, got the short end of the stick. They were stuck with building the cars, that's a very, very complex engineering challenge, but the gas companies made all the money, so we're trying to fix a little bit something that may be unfair. So we're saying, "Listen, if you... We're not just going to help you sell more cars to the fleets and consumers," so they cannot own it, and that we think is actually the majority of the use case. We're also wanting to make more money from the car for the lifetime of the car. So in a way, we're trying to align our incentives and say, "We've figured out a way to build infrastructure for EVs that's actually profitable, and hence we can afford to share part of that revenue with you."
Khaled Hassounah (00:53:34):
So yes, we do share part of the revenue with OEMs, which actually also helps them pay for the cost of factory integration and all of that, and we do share some of it with landowners. We're also working with a lot of municipalities that want solutions that work, so we often also get land for free, in a way that supports the communities, and helps, and also reduces our costs, so we can offer a cheaper service. But yes, these are the components. They are the cost of the systems themselves, the cost of electricity, which really we hope we can lower significantly, because we don't have the massive power requirements. So between all of these pieces, that's kind of the cost, yeah.
Cody Simms (00:54:08):
I want to dig into each of those a little bit.
Khaled Hassounah (00:54:10):
Absolutely.
Cody Simms (00:54:11):
On the OEM side, super fascinating to think about, right? The Chevrons, and Exxons, and Shells of the world, who became... I mean, not that OEMs aren't multibillion dollar companies, but they're not getting a piece of transactions today on gas refills. They are getting significant maintenance revenue for oil changes, and dealing with ICE engine maintenance, which is going to start to go away with EVs, so this helps them supplement some of that, as well as participate in the per-refueling part of the economy that they were left out of. That's-
Khaled Hassounah (00:54:44):
That's exactly right. I mean, we're helping them in multiple different ways. I think you mentioned most of them, right? Like, which is they're losing part of their revenue, and now we're solving that problem by giving them another way to actually supplement the revenue that makes the economics work for making cars. Building these batteries that are expensive, and there's a lot of dependence and R&D, and we're saying there is a path in which we can allow you to keep making use of newer batteries as they develop, without having to commit to any major battery supplier in any kind of way, that often, these are five- to 10-year commitments, even if the technology evolves elsewhere. So we just kind of give them a way out.
Khaled Hassounah (00:55:19):
And the third thing is also making it easier for them to get return on investment on these major kind of investments that they've done. A lot of them have spent billions or tens of billions of dollars building cars that really, they're not able to scale as significantly as they hoped for when it comes to electric. So in a way, we're just unblocking them in different ways that makes sense. One thing we always say is there's not one model. I mean, if you look at gas companies, or oil... energy companies. I mean, a lot of them right now are trying to reinvent themselves, rightly so, which they should, and it's a smart thing to do as energy companies. But some of the largest companies in the world just put gas in cars. I mean, it's amazing, right? And in a way, kind of you need to find ways to make that transition work for everybody.
Cody Simms (00:56:07):
And then, on the landowner front, I have been wondering for a long time, what is going to happen to all these gas stations around the world? Today, for the most part, gas is a relatively break-even product for them, and they make money by getting people to come inside and buy snacks, and sodas, and coffee, and whatever, but if you're no longer stopping to fill up with gas, you're no longer buying any of that stuff in the store either. Do you see your Ample solution as being a swap-out replacement for the existing... I would call it real estate platform that is the gas station distribution around the world, as a way for many of these stores to continue to survive in the EV era?
Khaled Hassounah (00:56:50):
Very much so. I mean, if you look at our investors, you see Shell, and Repsol, and INEOS, and PCT, some of the largest kind of energy companies in the world. They own a lot of gas stations, and to a great degree, I mean, all of them very kind of publicly have invested in charging, because they want to be in that business. The fundamental challenge they have is gas stations are built around the model you just described. A car comes in for a few minutes, so they're not using their real estate for long, so you can have a lot of kind of continuous stream of cars coming in, and one of the things that they do as they're there, that they step down and buy kind of a drink, or a snack, or something else. And that's a big part of how you make the economics work. And then, when you put chargers there, it's not that anymore. Now that one spot, you have a car sitting at for an hour as opposed to 12 cars passing through at an hour, hence reduces the revenue from everything.
Khaled Hassounah (00:57:39):
So we look like an almost kind of drop-in replacement, and almost a sideways transition, where it works the same way. You come here for a few minutes. It's enough time for you to buy a snack, but not too long that you're making the space have lower utilization. Now, one other thing we're doing is also opening up a lot more spaces. For various reasons in the big cities, the number of stations has been going down, gas stations, and hence, locations for energy delivery has been dropping, because for various reasons. And if you're in San Francisco, it's a lot more profitable to build an apartment building, but also kind of environmentally, people have become a lot more conscious, and they don't want kind of a new gas station in their neighborhood.
Khaled Hassounah (00:58:18):
So one of the other ideas as well, is that we're opening up more spaces to become potential ways to deliver energy, because we're doing it in a clean way. So there's the balance, of allowing them to kind of continue with the model in a way that transitions nice with electric, but at the same time, opening up more locations [inaudible 00:58:33]
Cody Simms (00:58:34):
Well, and let's... I realize we probably need to start wrapping up this conversation, even though I could keep going. We've hardly even talked about some of the pilots you have in place, which maybe you want to touch on briefly. But you mentioned some of your bigger investors. Maybe walk us through a minute, just how you've capitalized the business to date. You've closed, I believe $160 million series C earlier this year, I think. You've closed a separate investment from Blackstone earlier this year. Talk through how you're building the business, both from a venture capital perspective, from a debt financing perspective, if you're financing different parts of the business with different types of capital, helping entrepreneurs who are listening to this understand how a company that's gotten to your scale is starting to think about the growth and scale components of your rollout.
Khaled Hassounah (00:59:16):
Absolutely. I mean, we've raised three main rounds of funding with my co-founder, John, and I. This is not our first rodeo as I said, so in a way, we've kind of have multiple times had to think through, "Okay, how do you balance growth and funding?" And for entrepreneurs, what you don't want to do is to raise way more money than you need, because if you do it too early, you still haven't created enough value for you to really good valuation for your business. But at the same time, you don't want your money to last you too little, because then you have to go raise again before you've created enough value. So that balance is really the toughest part, and the golden rule, I guess, is you raise a little bit more, or 50% maybe more than what you think you need, and you work really hard to make it last you as much as possible.
Khaled Hassounah (00:59:59):
We've done a good job to a degree, where every time we've raised a round of funding, it was at the heels of a major event in Ample, right? Getting first major proof of concepts done, where we can prove the technology is meaningful, getting our first commercial kind of rollout started, et cetera, et cetera. So in a way, you want these steps functions, and they also help punctuate you in terms of knowing that you have to get to the next level again, again, and again.
Khaled Hassounah (01:00:28):
We're at a point right now, where our investors kind of are a combination of savvy financial investors, who could help us think about the financing from a debt financing perspective or other kind of instruments going forward, which I'll describe in a sec, but then also, good strategic investors who can validate that our thinking about the progression of the technology, and the business, and the market makes sense. At this stage, we feel we might need more funding to support the growth, but we don't want more capital funding to support the assets. We've gotten to a point where we've done two things. We've built a swapping station that's profitable, and hence is financeable, and we've taken an electric car battery, that today is embedded in a car, and doesn't come out, and just loses value over time, and we made it financeable, because we took it out, made it into a pool of batteries that you'll get the most benefit out of.
Khaled Hassounah (01:01:20):
So, we do strongly believe right now that there... And we already kind of have done some of this, in that a lot of the financing [inaudible 01:01:27] would come as asset financing, and there's a lot of people in the world who are very interested in putting money into batteries and infrastructure, so it just enables them to do that.
Cody Simms (01:01:37):
Super. Well, Khaled, what didn't I ask you? Feel free to... If there's anything you felt like was important, that we didn't cover, whether it was some of what you're doing with Uber, how you're looking at Japan. I know there have been a number of things that you all have announced recently as a company. Make sure to share it before we wrap up.
Khaled Hassounah (01:01:52):
Sure, sure. Maybe a couple of thoughts. Thank you for your question. I mean, I always kind of say that a good interview's a function of how good the questions are, so I really appreciate you asking really, really good questions and just kind of digging in. So I would say maybe a couple of things. One of them is I think as we look at electrification, it's going to be a function of two things, one of them, making it work for the end user, whether that's a fleet, or a consumer, or the driver. It has to work for them. We can't ask them for too much. We can't ask them, as I said, to pay more, wait more, and change the way they're living just so that we would save the planet. Everybody wants to, but at the end of the day people have kids to drop to school and work to go to. So it just has to work for them, and until we can make that a lateral transition from gas, it's just not going to work. We're not going to be able to achieve the scale we want.
Khaled Hassounah (01:02:41):
And the second important component, which I think we've spent a lot of time thinking about, is the reason people don't think twice about buying a gas car is because there are gas stations everywhere. So in order to make electric work, we have to deploy infrastructure at a much faster pace, in a way that's economically viable. And that's one thing we love about what we're doing, is that once we open up the markets, we can set up a whole city in a few weeks. [inaudible 01:03:04] You can go anywhere in a city, you get 100% charge in a few minutes, and I think that's going to be the determining factor. Can you build infrastructure fast enough, in a way that does not require you to completely rebuild the grid, and make economics that don't quite work, and take months and months for construction? You have to be able to do it fast, efficiently, and put assets on the ground in weeks rather than months. We feel we can do that, and I think that's one of the reasons where we're very bullish about kind of our ability to expand very quickly.
Cody Simms (01:03:32):
Well, Khaled, I super appreciate you coming on today, sharing what you're doing, and good luck to you as you continue to build out the Ample platform.
Khaled Hassounah (01:03:41):
Absolutely. It's been a great conversation. Really appreciate the interview. Thank you, Cody.
Jason Jacobs (01:03:45):
Thanks again for joining us on the My Climate Journey podcast.
Cody Simms (01:03:49):
At MCJ Collective, we're all about powering collective innovation for climate solutions by breaking down silos and unleashing problem solving capacity. To do this, we focus on three main pillars, content, like this podcast and our weekly newsletter, capital, to fund companies that are working to address climate change, and our member community, to bring people together as Yin described earlier.
Jason Jacobs (01:04:11):
If you'd like to learn more about MCJ Collective, visit us at www.mcjcollective.com, and if you have guest suggestions, feel free to let us know on Twitter, @MCJPod.
Cody Simms (01:04:26):
Thanks, and see you next episode.
