Startup Series: Synop
Today’s guest is Gagan Dhillon, CEO & Co-Founder of Synop.
In many climate conversations about mobility, solutions inevitably turn into conversations about fleets. But understanding what fleets are, how they manage access to fuel, and how all of this will change as fleets adopt EVs are critical to clean transportation at large. Synop automates EV operations by helping businesses handle tracking, billing, reporting, and cost management under one unified, data-centric platform. Compatible with all EV types and charging stations, their AI-powered platform is designed specifically for commercial fleets and OEMs to modernize performance and meet sustainability commitments.
Prior to co-founding Synop, Gagan witnessed first-hand the challenges of businesses transitioning to commercial electric vehicles. Previously at REIN, an insurtech startup, he worked with major commercial OEMs and global insurance carriers on solutions for the commercial auto space. During that time, he got a first-hand look at the challenges of the commercial EV space and was inspired to develop the software needed to support the industry’s transition to using electric-powered commercial vehicles.
In this episode, Gagan explains the fleet landscape and how the electrification of fleet-based transport will change many of the dynamics that are ingrained in the transportation sector today. Cody and Gagan also dig into the Synop product offering, their consumer segments, and how business will evolve as the EV space matures.
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Episode recorded on August 22, 2022.
In today's episode, we cover:
[2:06] Gagan and his co-founder's background
[5:34] An overview of fleets in the transportation sector today
[10:15] How ICE fleets are managed and fueled
[12:03] Challenges of electrifying fleets
[14:33] Use cases for different types of EV charging
[17:48] An overview of Synop
[21:15] Status of electric semi-trucks in U.S.
[24:42] Synop's customers today and who they plan to serve in the future
[27:25] The company's energy management service
[31:03] Synop's solution to charge management for fleet operators
[34:38] Potential cost savings
[39:40] What Gagan has learned along his climate journey
[46:21] Synop's funding and how they plan to capitalize the business going forward
[48:36] How Gagan sees the space evolving over the next 5 years
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Jason Jacobs (00:01):
Hello, everyone. This is Jason Jacobs.
Cody Simms (00:04):
And I'm Cody Simms.
Jason Jacobs (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 (00:15):
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 (00:26):
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 (00:40):
Today's guest is Gagan Dhillon, co-founder at Synop, which provides a software-based platform to help transportation fleet managers deploy and manage commercial EVs. I found that any conversation about mobility solutions inevitably turns to conversations about fleets. And I have to admit that I went into the conversation with Gagan going feeling like I needed to better understand what fleets are, how they manage access to fuel today, in a non-EV world, and how all of this will change as fleets adopt EVs. Gagan patiently explained the fleet landscape to me and help me understand how the electrification of fleet-based transport will change many of the dynamics that are ingrained in the transportation sector today. And we also dug into the Synop product offering, what customer segments he is targeting to start, and how he sees his business evolving as the EV space matures. I hope you enjoy today's conversation with Gagan about Synop and about the future of fleet electrification, and hopefully you learn a few things along the way. I know I did. Gagan, welcome to the show.
Gagan Dhillon (01:43):
Hey, Cody. Appreciate you and the My Climate Journey team for having me. Thanks.
Cody Simms (01:47):
Well, I am super interested to hear how you and Andrew first landed on this problem of working on the electrification of fleets. Maybe walk us through your backgrounds, how you guys met, and how ultimately this ended up being the business that you wanted to build.
Gagan Dhillon (02:06):
Yeah, absolutely. Andrew and I actually met back in high school, in 2005. So we went to high school together, went to college together, had always had these passions of wanting to build things, tinkering and projects. Ultimately, as we grew in our careers, we got more and more interested in the problems that the climate world was beginning to face and our world was beginning to face. And so over the last five years, really starting out in 2017, we were always dabbling in these ideas of, what were interesting ways for us to make an impact in the world of transportation and logistics?
Gagan Dhillon (02:41):
I had had a background in commercial auto through my previous life. I was working very closely with Volvo and Volvo trucks, helping them build fleet products. Andrew was working on software solutions at Amazon Web Services, and was exposed large opportunities and problems there, within the Amazon ecosystem. And we just naturally gravitated towards this world of logistics, which, if you think about it, 24% of the greenhouse gas emissions in the world are contributed by the commercial transportation and logistics industry, right? So it's a pretty big chunk. And if you can make some sort of an impact in that, you can have a pretty substantial impact in the greenhouse gas emissions that are in our atmosphere.
Gagan Dhillon (03:19):
So we started to look into ideas. There was a lot of opportunity, we felt like, and especially through this lens that I had at Volvo, we felt like there was a lot of opportunity in commercial fleet electrification. If you look at trends that happen in the space of the automobile, right, I would say every innovation that happens in personal auto eventually makes its way to the larger vehicles, to larger commercial vehicles, right? So if you think about connected cars, they came about 10 years ago, and then every commercial fleet became connected, and they were sending data back to the cloud, right? You saw what Tesla did to the world of electrification and personal passenger vehicles.
Gagan Dhillon (03:57):
We felt like, just with regulatory tailwinds, we felt like with the technology, that there was going to be an opportunity for commercial OEMs, whether that's Class 8 truck manufacturers, school bus manufacturers. All these big vehicles you see on the road that are loud and noisy, they were eventually going to follow the same set of technology that passenger vehicles were taking. And as they followed that, right, you needed to create technology to make it easy for them to stay on the road, for them to be charged optimally, and for them to ultimately scale and bring down that GHG number that we're all so focused on.
Gagan Dhillon (04:31):
So it was sort of this perfect storm of opportunity in front of us, things we saw from a unique vantage point we had at our past jobs, a little bit of pandemic burnout. We were pretty tired of, I feel like, as the whole world was in the middle of 2021, with our day jobs. We wanted to go pursue a different challenge. So this idea Synop came to us, and we started working it last June of 2021.
Cody Simms (04:57):
Well, super. And I'm super interested to dive into what big ahas you had that have led to the actual product that you're developing. But before we dive into that, let's baseline and level set. On the problem of fleets, in general, anytime you dive into the world of transportation, mobility, you hear about fleets. But I'd love to hear from you, what is a fleet? What does a fleet entail? What are the most common fleets today? How are they generally owned and managed? And I'm sure the answer is, there's lots of different ways. So maybe walk us through some of the more common types of fleets that exist in the transportation sector today.
Gagan Dhillon (05:34):
Yeah. No, absolutely. Look, I mean, I think the simple answer or definition of a fleet, right, is it's a collection of vehicles. It can be a collection of bikes, it can be a collection of buses, it can be a collection of cars, a collection of cement mixers, whatever. A fleet is essentially a collection of vehicles that a company or individuals use to transport themselves or goods, right? But when we look at what's happening in the world of fleets today, fleets are all around us, and we sometimes probably don't notice that, right? The school bus your kids ride on, they're a part of a school bus fleet, right? Our mail is part of the largest fleet in the world. The USPS is 240,000 vehicles, that, by the way, 40% of are being electrified over the next 10 years. These fleets are everywhere around us, and we interact with them in a day-to-day basis, whether we know it or not, right?
Gagan Dhillon (06:21):
They're transporting our goods. They're transporting our kids. They're transporting us, in a lot of cases, if you're on city transit, if you're in an Uber, if you're in a Lyft. They're all part of a fleet. All of these modes of transportation, these methods that we use to get around, they've gone through two transformations, right? Their first transformation was back in 2017. 2016, 2017 they began to get connected, which means that every vehicle could now be tracked with its geolocation to tell us where it is, where it's going, and the state of the health of that vehicle, right? And that was a big innovation about six, seven years ago, through these little devices called ELDs. It's an electronic logging device, right? They would tell you what's going on with your vehicle at all times.
Gagan Dhillon (07:06):
Back in about 2017, 2018, the federal government started to mandate that commercial vehicles have these devices, right? And so this whole slew of startups came up, right? Samsara, KeepTrucking, Geotab, others, really started to take off through this innovation in the fleet world. And now, the tailwinds that we're riding is, now that fleet world that sits on all this data, that tracks all these vehicles, they're starting to become electrified. And so now you have an opportunity for even further products and enhancements to happen, and for that scale of electrification to happen faster because you know where these vehicles are, you how they respond to certain conditions.
Gagan Dhillon (07:43):
And now, you have this challenge of, "Well, I got to help them charge, and I got to help them connect and interact with the grid." Right? And so that's where the state of the fleet world is today. Most fleets are privately owned. They're owned by Fortune 500s, the Fortune 100s that we all know. Individual operators very rarely own a fleet, right? There's a lot of truckers that are independent operators, and they might have one or two vehicles. You would kind of consider that a fleet, but the larger transportation companies, governments, they own a lot of the fleets and vehicles we see on the road.
Cody Simms (08:17):
And you often hear of OEM fleets. Describe what that is. Why does Ford or GM or whomever own a fleet as well?
Gagan Dhillon (08:25):
Yeah. I mean, every OEM's got a different model, right? An OEM fleet, it could be a fleet that they own and operate to service parts of their business, right? And so GM might own their fleet because they've got sales reps that are going to their dealerships or they've got folks going to their maintenance centers, right? Ford might own a fleet for the same reasons, right? I remember when I was working over at Volvo, they owned a fleet because they were then leasing that fleet out to subcontractors, right? And they were using those vehicles so they could lessen the cost of owning those vehicles, but still participate in the financial benefits of driving a truck, making money, and then not having to worry about the hassle that comes with ownership of a vehicle.
Gagan Dhillon (09:07):
So OEM fleets, I think they're a newer concept, but there's definitely a lot of traction behind that concept because of this as-a-service model that a lot of us are starting to more and more familiar and comfortable with, so vehicle as a service, truck as a service, right? It's going to be owned by somebody else, but I, as a consumer, am going to take the benefits of it, without having to take the financial burden of owning and paying for the fleet. It's part of a fleet that's owned by an OEM or some other service.
Cody Simms (09:35):
Obviously, when we talk about electrification of fleets, we're thinking primarily about, how are these fleets getting power so that they can continue to drive? And there's a whole lot more to that story. But before we go into that, how are, from a internal combustion engine perspective, fleets that are filling up with gasoline or diesel, how is that generally managed today? Do most of these fleets end up cutting some deal with a local filling station, where they're getting a discount on fuel? And is someone managing the refueling on behalf of the fleets? Or are the drivers just responsible for topping up the tank at the end of the day? What does that generally look like today?
Gagan Dhillon (10:15):
Yeah. I mean, so generally, today, when you think about it in the internal combustion engine world, the ICE world as we call it, right, they have this concept, and there's big, massive businesses that sit on this concept of fleet cards, right? So you've got this fuel fleet card, and your fleet has cut a deal with Pilot Travel Centers, or they've cut a deal with Flying J truck stops. So you're going to get a discount on the fuel there. You're going to go in there, you're going to swipe your card, you're going to fuel up, and then you're on your way, right? It's a 10, 15 minute process, very easy, on your way. You're out the door as an operator.
Gagan Dhillon (10:50):
To the second part, right, the honest answer is, it depends on how a fleet's operations are set up. If you're bringing your vehicle back into some sort of managed site every day, where you leave the warehouse with your vehicle and you come back to it, that fleet might have onsite fueling. They might have folks that are going to fuel those vehicles up. They're going to have them ready for the next day, right? If you're more over the road, you're driving longer, you are, as a driver, probably responsible for the fuel and maintenance of that vehicle while it's on the road. So there's a couple different concepts that these fleets follow when it comes to fueling.
Cody Simms (11:23):
Yeah, I guess that makes sense. The largest of them will have their own fueling stations there at the overnight facility, presumably. Okay. Hopefully, that's at least helpful to me, in terms of understanding the state of the world that we live in. And now we're moving to this world where, oh, we're changing the entire way these cars are powered. And so, with that, comes a whole new set of considerations. So maybe walk us through with electrification and with fleets considering purchasing EV vehicles... EV vehicles. That's like saying ATM machine... EVs. Walk us through what these fleet owners are grappling with.
Gagan Dhillon (12:03):
Yeah. Look, I mean, I think that the biggest thing, right, is that you're going through a transition as a fleet owner where there's a very defined workload of how you fuel today. Right? Your driver's going to fuel up, just like we talked about, or somebody's going to fuel up for them at a warehouse or Depot that you manage, right? And now you're introducing this new idea of, I have to have an understanding of energy rates, right? I don't want to charge when it's most expensive for me to charge my vehicle. You have to have an understanding of how charging infrastructure works, how you install and plan for the installation of charging infrastructure. How does that charging infrastructure integrate in with your local utility, your local grid, right? How do you understand your time of use rates? These are big challenges that these fleet operators are now starting to get their head around, but they're also starting to... They have to go through a learning process, a learning journey to be comfortable, to be able to make that switch, right?
Gagan Dhillon (12:56):
And then when you make that switch, right, the two biggest things you're always going to worry about... Let's say you've purchased your EVs. Let's say you've installed your charging infrastructure. There's two things you really want to care about. Number one, do I have enough charge to meet the requirements of my day, right? If my vehicle requires 100 miles of charge today, do I have 120? And how do I get to that 120 at the most optimal rate, at the most optimal time? And the other thing you're really going to care about is, do I have enough chargers available to charge my vehicles when they come back, right? How do I optimize my schedule, or how do I optimize my energy requirements, to make sure that my fleet uptime is the same as it would be for a diesel fleet.
Cody Simms (13:40):
And I'm hearing you say that, for most of these fleet owners, when it comes to EVs, they are creating some kind of onsite charging facility or EV supply equipment build-outs to their local fleet management, which is interesting because, when we talked about ICE vehicles, you said it really depends on the use case. The facility may have onsite fueling, but they may also just hand out fleet cards to their drivers and keep them responsible for filling up the tanks. So that, by itself, feels like an incredibly seismic shift that we're talking about. With EV fleets, the expectation is that the vehicle's going to return to some center and get fueled up or get recharged at the center. Am I leaping too much to a conclusion there? Or is that what you're seeing somewhat across the board at this point?
Gagan Dhillon (14:33):
No, it's not a leap. And I think the reasoning behind this is important, right? So when we think about the ICE vehicle use case, mostly those vehicles are over the road, they're longer distances, and they're... It depends the type of fleet, right? If we think Class 8 trucks, they're driving around a lot. They're probably not coming back to the same place every night. Now where the state of electrification and commercial fleets is there's three buckets it falls into, right? You have depot charging, which is the use case we're talking about, you leave your site in the morning, and then you come back at night to the same place so you can charge, or at least another depot that your fleet owns, right? So you're not charging at random places. The second use case is at-home charging, right? This is more relevant if you've got an electric pickup truck and you work for Duke Energy or somebody like that. You can take it home and you can charge it at home, right?
Gagan Dhillon (15:22):
And then the third case is over-the-road charging, which is very similar to the, "Hey, I'm going fill up diesel." Instead, I'm going to charge up at a Electrify America or some other charger that's outside of the depot. So those are the three use cases that are starting to come up in electric commercial fleets. Now the industry is very early, right, and everybody is... They're sort of walking before they run. And there's a lot of depot use cases because these large commercial fleets that are taking on the owners who switch to electric want to own and install that infrastructure. And they're deploying that infrastructure in use cases where the vehicles don't have a long driving requirement.
Cody Simms (16:00):
It's also, presumably, a lot cheaper to install an EV supply equipment chain on your site than it is to install an actual set of diesel gas pumps, I would assume, and probably a lot less regulation.
Gagan Dhillon (16:13):
I think the regulatory piece is way less. Obviously, when you're installing diesel tanks in the ground, you're going through all these environmental checks, you're going through all these other compliance regulation checks, right, and it's just a longer process. And with the charging infrastructure, you don't have those challenges.
Cody Simms (16:28):
We're going to take a short break right now so our partner, Yin, can share more about the MCJ membership option.
Yin (16:35):
Hey, folks. Yin here, a partner at MCJ Collective. Want to take a quick minute to tell you about our MCJ 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, have since then grown to 2000 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.
Yin (17:04):
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 meetups, 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 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 (17:37):
All right. Back to the show. And so to your own business then, with Synop, is there any one of those three use cases, or all of the above, that you're primarily focused on right now?
Gagan Dhillon (17:48):
Yeah. Our goal at Synop is to be the leader in fleet electrification across all three segments, but very focused on depot today, right? So we're focused on where the depot use case is, which is we're going to help you with smart charging management, which essentially means we're going to help you charge your vehicles at the optimal charge they need to be for your routes every day. We're going to help you with the energy management, which is the interface with the utility grid to understand when to charge based on pricing, how to throttle charging based on the load that you have available from an energy perspective at your site.
Gagan Dhillon (18:23):
And then we're going to help you with the vehicle piece as well, right? So we integrate in with the telemetry providers to help you understand real-time state of charge, location of vehicle, what routes it has planned, and how all of that optimizes your charging schedule and energy demand. So we're very focused on that first one, depot. We're starting to get a little bit of use cases in that at-home charging, but for over-the-road charging, especially in a commercial vehicle standpoint, there has to be a lot more investment from an infrastructure standpoint to make that viable for these fleets. And you're starting to see that investment, right, through the IRA and other regulation that's passing.
Cody Simms (18:58):
And so with depot-based charging, are there primary use cases that you're finding are leaning into electrification first, in terms of the types of fleets that are first, saying, "Hey, today we've just been handing out fleet cards to our drivers. We actually want to bring this in house, where we can manage charging and energy and go from there"? What are the types of driving use cases that are most leaning into that right now?
Gagan Dhillon (19:26):
Yeah, absolutely. There's three categories that really see a lot of traction. I mean, number one, it's the bus space, right, whether that be school bus or municipal bus. These are vehicle classes that have a pretty defined set of routes. You're going in a pretty small area of service, and so they're very prime for electrification. There's a lot of government tailwinds behind electrifying these assets as well. The other one is the Class 8 drayage space, right? Drayage is this concept of taking goods from the port to local warehouses, and then moving from those warehouses down logistics chain. Now, California and other states are really leading this charge in regulation of electrifying these use cases because, again, they're pretty defined. These vehicles that they use today emit a lot of greenhouse gases, and they're loud and noisy. And so there's a big push, in California especially, to electrify 100% of the drayage fleet, which is over 30,000 vehicles over the next few years.
Cody Simms (20:24):
What do drayage vehicles tend to look like? Just help me picture what I'm-
Gagan Dhillon (20:28):
It's a classic semi, right? So it's just an 18-wheeler, right? Or it's either going to have a sleeper cab or it's not going to have a sleeper cab. So that's what a drayage vehicle looks like.
Cody Simms (20:40):
But the difference between that and a vehicle I'm going to run into on the interstate in the middle of the Nevada desert, is that a drayage vehicle is running a fairly defined, fairly local route from the port to a warehouse, and then from the warehouse to a Walmart or something like that. Is that correct?
Gagan Dhillon (20:59):
Yes. Yes.
Cody Simms (21:01):
And I didn't realize we were already seeing the electrification of heavy semis starting to come to market in a big way. That would lead me to believe that we already are. Is that a correct assumption?
Gagan Dhillon (21:15):
Yeah. I mean, it's hard to pin an exact number on it, but there's a few hundred electric semis on the road in the US today. If you read any of the releases from the big OEMs like Daimler, Volvo, Paccar, they've got thousands of orders in place for these vehicles, and so that is starting to happen. People are starting to make those orders. Commercial fleets are starting to commit those orders. I think over the next three to five years, it's projected that that market's supposed to reach thousands of vehicles on the road. Now, the supply chain has sort of messed up a lot of where these vehicles should be, so we feel like, as that starts to ease up a little bit, we'll see more and more of these electric semis on the road.
Cody Simms (21:55):
Interesting. And from what I understand, the biggest drawback is just the size of battery you need for those semis to go long distances. But if we're talking about mostly relatively short, local trips from a port to a warehouse, that's where that, presumably, becomes slightly less of a concern. And then you're helping them manage the charging schedule timetable and optimization. Am I understanding correctly?
Gagan Dhillon (22:18):
Yeah, absolutely. These vehicles probably have range, depending on the payload, somewhere between 130, 150 miles per charge. So if you're going, for example, from the port of Los Angeles to the Inland Empire, right, you can make that trip pretty easily with these vehicles and these use cases. And as these battery packs get bigger, as charging becomes more and more accessible, but also faster from a, "Hey, I need to reach 20 to 100%," and that technology exists to make it go faster, then you're going to start these vehicles be deployed across wider use cases.
Cody Simms (22:49):
Got it. Super helpful. I didn't realize we were already seeing that start to roll out, so that's awesome. What's the third big use case that you're focused on today, within the depot sphere?
Gagan Dhillon (22:59):
The third big one is the house-to-house delivery, right, so these step vans that fleets operate, the typical logistics fleets that are operating, right, those step vans.
Cody Simms (23:08):
It could be a Thermo King or something that's delivering cold chain storage, or it could just be the van that's delivering your local Amazon packages or whatnot around a given location.
Gagan Dhillon (23:21):
Obviously, Amazon's got a big focus. They've got 10,000 plus electric vehicles on order, specifically electric vans on order. So it's fleets like Amazon, it's fleets like USPS that are delivering logistics that want to electrify them because, again, the theme here is these defined routes. You're in a certain area, you're in a certain metro, and you can manage the range capacity that the vehicle has and deploy it.
Cody Simms (23:48):
And who are the main makers or manufacturers of those specialty light-range trucks at this point?
Gagan Dhillon (23:55):
Yeah. Daimler, and Daimler has got a really good step van program that they're developing. Ford Pro. Obviously, Ford, through their commercial business, that've got a really good program that they're building. Rivian, which is more of a new entrant, but they're partnered up with Amazon, right? You've got Lightning eMotors. You've got Green Power, Green Motor Power, which is out there. So you're starting to see more and more of these. GM has a new initiative with BrightDrop as well. It's a new market, but a very rapidly emerging market. We feel like that there's a lot more entrants that are probably going to take a step into the US market from Europe, that are looking to deploy these step vans as well.
Cody Simms (24:32):
And right now, if you were to look at the customers you're serving today and what you would be expecting to serve three to five years from now, how do you see that shifting?
Gagan Dhillon (24:42):
Yeah. We're serving a lot of traditional fleet operators today, right? We're also serving some OEMs as well. Where I think the shift is going to be is, we're going to be very much focused on the enterprise fleet operator. By that, I mean these large commercial fleets that are just dabbling and have two, three electric vehicles today, but have plans to scale as the industry scales, and also if regulatory requirements require them to scale to electric. So we feel like there's a big pipeline that we're developing in traditional logistics carriers today, a big pipeline that we're developing in the school bus space, and then the municipal transit space, right? So we think that those are areas of natural growth. Now, we also feel like there's a lot of opportunity within government fleets, right? There's a lot of opportunity within what's happening at the USPS. There's a lot of opportunity in that world.
Gagan Dhillon (25:37):
And then, finally, there's going to be a lot of opportunity in the utility space. So ultimately, yes, we're focused on fleets, but we are building an energy business at the end of the day, right? It kind of sounds weird to say that, but we're building an energy business at the end of the day because we are managing a large amount of energy on our platform that these vehicles carry, and energy that they can eventually send back to the grid for bidirectional use cases. So if we think about what's happening in Texas, what's happened in other parts of the country with stress on the grid, right, Synop, over time, and even today this is true, we've got a large amount of megawatt hours under our management that we can, in certain cases, deploy back to the grid. And so we think that's a very exciting opportunity and a very exciting prospect of what we've done, and will have done over the next two to three years.
Cody Simms (26:28):
Well, let's definitely go into that. On your website, you list three main services that Synop provides, charge management, fleet operations, and energy management. I was hearing you say just now vehicle-to-grid orchestration is a big use case as you view yourselves as an energy company over time. So maybe let's start there, let's start with the whole energy management piece of what you provide. Most companies that I talk to today that work in the climate tech space and have some place where they're engaging with both an end consumer of energy and the grid describe themselves as, "Hey, we can provide a whole demand response set of services, et cetera." I'm, to some extent, hearing you say that as well, that your goal is to help these vehicles charge smartly and have the ability to discharge back to the grid at appropriate times. Am I hearing that correctly from you?
Gagan Dhillon (27:25):
Yeah, so you're hearing that correctly. The one thing I would say is, we are not a demand response company. We would rather partner and are partnering with folks that manage these demand response events, that go through and orchestrate and work with the grid directly to do that. Now, where we come in is, we have all these vehicles under management, right? These vehicles have battery packs, battery capacity, that we can then, in certain cases, right, dispatch that back into the grid to participate in demand response and V2G events. Now, we've started to do that in our later... Today's the 22nd of August, so in about two days, you'll see an announcement with us and Daimler come out, that shows how much work we've done this summer on the demand response and sending energy back to the grid side, which I think is going to be a really big step for the industry, and we're really excited to put that out there.
Gagan Dhillon (28:13):
But I think, from our perspective, right, there's only a certain number of use cases that can participate in these events, right? Doesn't make a ton of sense for a Class 8 semi that's doing routes every day and multiple routes every day to be used for a demand response event because the fleet needs its battery capacity. Now, school buses are a little bit different, right? So the school bus world, you, in some cases, have these buses sitting and idling over the weekend, right? There's a big gap in usage over the summer, so you can actually participate in these events. So that's where we see a lot of opportunity as we grow, as our fleet operations grow, and that's the way that we're starting to tackle it.
Cody Simms (28:53):
And it's primarily dependent today on the OEM and the vehicle manufacturer to enable that capability from the vehicle back out to the grid. Is that a correct statement?
Gagan Dhillon (29:05):
Yeah. I mean, the reason this stuff is really hard is you sort of have to have the perfect storm of things come together, right? You have to have the capability be there from the OEM. You have to have the bidirectional capability exist for the chargers that you're using, right? You have to have the firmware to match up, and you have to have software that can orchestrate that across those three levels. And then you have to receive the signals from the utility, right?
Gagan Dhillon (29:31):
So it took us almost a year to build out and test and actually deploy this capacity, and we had a team of 12, 13 really, really good engineers on it. I'm sure other people have way more engineers that they've thrown on it to try and solve it, right? So there's a lot of complexity that goes into this. Fleet electrification is very early, but V2G is even earlier, right? Then being able to send and dispatch power back to the grid is, we think, a really, really powerful concept, but you have to get it right, and you have to be able to deploy it at scale for it to really make a difference.
Cody Simms (30:05):
Is there a peer-to-peer use case within a fleet? So enabling one vehicle to discharge to another vehicle on the same charger network, as an example.
Gagan Dhillon (30:16):
I mean, I think that there's some scientific folks that are working on doing that in very test use cases. You have to be mindful as well of the impact sending so much energy back and how you send it back, what impact that has on the battery life of that vehicle, right? Because you want to be able to maintain as close to 100% battery life and capacity for that vehicle, otherwise you start to lose your return on investment, and that vehicle starts to lose its utility to your fleet.
Cody Simms (30:46):
Well, let's talk about some of the other capabilities you provide then. On the charge management side, I presume you're having to integrate with dozens of different charging network providers. Maybe explain what that benefit looks like, from a fleet operator perspective, to have your expertise in the mix there.
Gagan Dhillon (31:03):
Yeah, absolutely. I think that the reason we really invest a lot of money and time and resources behind charging management software, right, and being able to build the best-in-class charging management software is that, as a fleet operator, you're never going to have just a single OEM of charger you work with, right? You're going to have multiple different types of OEMs of chargers, you're going to have different chargers for different use cases, and you want to have a singular platform you can use to manage those use cases and those chargers in one place, right? So we've spent a lot of time and have gotten very familiar with every leading commercial charger manufacturer to date, to be able to support from what is called the OCPP spec, a set of protocols that every charger follows for smart charging, right? And so that is, "Hey, I want to plug my vehicle in at 5:00 PM, but I don't want it to start charging until 7:00 PM." Right?
Gagan Dhillon (31:52):
"Hey, I need to reach 94% state of charge, based on the route this vehicle needs to do tomorrow. I need to remotely reboot that charger. I need to easily onboard a charger that I have just installed at my newest depot. I need to manage my depots in a holistic view." So that's what charging management for us means and what it enables us to do. We support over 54 different models of commercial chargers today, across 10 different OEMs, and that list is growing every week. But it gives our fleet operators the freedom and flexibility to work with the best-in-class chargers and know that they can manage them across their fleet very easily.
Cody Simms (32:34):
So when you go through all of that, I can't help but reflect back on the conversation we started at the beginning, which is, how do fleets manage fuel today? They got a card, and their drivers drive up to a gas station, swipe a card, and the car is fully refueled. Or they have a diesel pump, which they had to go through all sorts of complexity to get permitted in the first place, but then, beyond that, it's just having a truck show up once a week and fill up the tanks with fuel. This sounds so much more complicated. If I'm a fleet operator, I got to think about all these things, and my hair's on fire. I mean, I guess that's your job, right, is to make it not complicated for them.
Gagan Dhillon (33:16):
No. That was going to be my response, right, is the beauty's in the software, right? So as fleet operator, you have regulatory requirements that you have to start to meet from an electrification and carbon footprint standpoint, right? And so that's where we come in to help you meet those, and not only meet them with one or two vehicles, but meet them with thousands of vehicles, right? Because the one thing every fleet operator is doing, is they are, again, walking before they're running in this world of fleet electrification, right? They've got three or four vehicles. They're testing them out. They're trying to figure out which routes to run them on. They're using software like us to help them understand that, and then when they're ready to scale, they're using software like us to help them scale from one depot to 10 to 20 to 30, from five trucks to 100 to 500, right? So that's where the opportunity, for us, really is.
Cody Simms (34:01):
And I presume, once they figure this scale out, it should be, in theory, much less expensive for them because they can buy their power at optimal times, they can discharge the power into the vehicles at optimal times, and they're not subject to all sorts of crazy shenanigans around inflated oil prices or this, that, and the other. There's a much more greater ability to predict the cost of their business. And by even installing solar or other things, even proactively reduce the cost of operating their business.
Gagan Dhillon (34:38):
No, absolutely. And I think that the one metric that always comes to mind for me, and this has been tested out for a couple of years now, so we can speak to it confidently, there's a school bus fleet, that we're familiar with that before they electrified their buses, they had a per-mile cost of about 1.31 for a diesel vehicle. So for them to drive a mile, and if we take into account everything, right, the fuel, the cost to pay the driver, maintenance and everything, from an annual perspective, it was about a 1.31 for them to drive a mile for that vehicle.
Gagan Dhillon (35:08):
Now, with the introduction of an electric vehicle on the same route, the same parameters, everything else being equal, outstanding, which you replace the gas and maintenance piece with electrons, right, it's about 64 cents a mile for that, right? So there's a massive reduction in that, and as these things start to scale, as these use cases start to become more and more relevant, we're going to see not only that cost savings, but also that environmental impact that it's going to have as well. And by all accounts, everyone that switches from an ICE vehicle of some kind to an EV, right, they notice two things. They notice how quiet it is, and they notice how much easier it is on them to get around and use, right? And so it's very, very driver friendly as well.
Cody Simms (35:52):
Do you know if that greater-than-50% cost reduction, does that take into account the hardware costs of installing the charger networks?
Gagan Dhillon (36:03):
These folks only installed a couple of chargers across a small depot that they've built, so it took that into account. Now, the nice thing about as you install charging infrastructure, as you purchase more and more of these vehicles, there's so many government grants and incentives that fleets are taking advantage of. Your cost to install them is very, very minimal.
Cody Simms (36:21):
And then help me understand how your business, itself, works. So are you getting in touch with these fleets before they start to electrify and you actually handhold them through the electrification process? Are they coming to you after they've already have a few cars on the road, and they realize they don't know what they're doing, or it's too complicated and they need to simplify? And then second question to that is, what does the actual business then look like? What are they paying you for? And how is that structured?
Gagan Dhillon (36:49):
Yeah. Look, from our perspective, right, we're building a software-as-a-service tool for the electrification fleets. And so I want to build a software business in this space and, from our perspective and how customers find us, right, we start off in two different areas. Number one, we're building a team that's going to engage with fleets that are looking to go electric or early in their journey, and they want to be handheld through the process of how do they build out and plan depots. We're not going to do that. We have partners that are going to help them do that, right? They are going through the journey of finding which vehicles and routes to electrify. We'll help them do that. And then they're going to go through the journey of, "Oh, okay. I've got my vehicles, I've got my depots built, and now I need to operate." I channelize these at the scale and efficiencies that an ICE fleet would run at, right? That's one of the areas we engage in.
Gagan Dhillon (37:39):
Now, we've had a lot of fleets and enterprises come to us after they've installed some chargers, after they've done their little test of two or three vehicles and they're ready to scale, and they need software to help them scale, right? And that's where we're really starting to get a lot of traction. That's where we have a large number of customers as well, today, that we're helping them go from two to 50 to 100, right, both on the vehicle side and the charger side.
Gagan Dhillon (38:04):
And the way that we do that to your second question, right, is we're going through and helping them and charging them with the number of vehicles that are on our platform, right? So there's a monthly subscription that they pay us for, the number of vehicles on the platform or the number of chargers on the platform. And so that's the entry for us, as a business. That's our entry-level business model. And then as you get more and more complex in these use cases, as you get more and more complex under energy management, right, there's other streams of revenue that we capture from energy back to the grid as well.
Cody Simms (38:38):
And what interfaces are the grid operators seeing from you to get a sense of the services that you're providing on their behalf?
Gagan Dhillon (38:47):
Today, and I don't want to say too much about the state of the technology of utilities, but utilities interact with us through an email, right? And so if there's a V2G event or something happening, more often than not, we're going to be notified of that via an email. For the utility though, they have access to our dashboard, to our backend, that's showing them the energy that we're dispatching. We're showing them the vehicles under management, if we can, in some cases, and how much energy is available for them to pull back into the grid. So that's what that looks like.
Cody Simms (39:18):
And I'm curious what you've learned so far on the journey that surprised you as you've been building this, either consistent asks from these fleet operators has been a surprising realization or consistent non-asks that you're seeing in the data that you're surprised more people aren't anticipating.
Gagan Dhillon (39:40):
Yeah. I mean, I think when we started this company, we thought that the industry was a lot further along, from a vehicles-on-the-road perspective, from a chargers-on-the-road perspective, and we found that it wasn't. And for us, that's an opportunity, right, and we're helping as many fleets as we can with our technology. So I think that was a big learning, was everyone's still sort of in this education mindset of, "Hey, we're going through this journey. We're learning how it's going to benefit us, what we use, what we don't use." So that was a big thing for us.
Gagan Dhillon (40:14):
I think a lot of what fleets are looking for... It's funny to say this, but you're not solving a super-complex problem yet. There's two things they really want. They want to make sure the vehicle has enough state of charge to meet the driving requirements for the day, and they want to make sure they don't pay too much for that energy, right, so, for lack of a better term, they're not charged for that energy more than they should be, right?So you have to have software that's going to reliably help them charge at the right time and have the appropriate state of charge for the route that they need to run. So those are, I think, the other big surprising thing for us is, okay, there's very much a walking before we run mindset in this industry.
Gagan Dhillon (40:56):
And then the other part of it is, things we don't really get asked a lot is... I think people are going to become more and more aware of the energy management piece. And I don't think they understand the power of how much energy they're storing and what they can do with it and how they can have a positive impact on the climate itself. I think that traditional fleet operators don't think about the climate impact as much. They think about the operational and efficiency impact a lot more. The larger corporations that have a chief sustainability officer, or somebody else similar to that in a role, they think about the climate impact of electrifying. It's interesting because, when you're talking to these fleet operators, you don't hear them talk about the climate impact as much as you think they would, but I think it's starting to become more and more top of mind for them.
Cody Simms (41:42):
And I'm curious, just thinking about how they are used to buying fuel today, which again is, they go knock on the door of Conoco or Chevron or Shell, and basically try to negotiate the best discount they can get on fuel. And now we're talking about, okay, I'm going to be subject to the pricing that is being provided by the utility at any given time of day, which is changing by the hour. In non-regulated utility districts, are you seeing them question which utility provider they should be using and seeking your advice on, "Should we be swapping from utility A to utility B? And can we get a discount on the price of electricity based on that?"
Gagan Dhillon (42:28):
We are not getting that question a ton because I think that we probably sit a little bit further downstream from when those decisions are being made, right? So we're not running into that question a ton, but I don't think that the risk of energy gouging exists in this industry where price gouging in fuel could exist, right? I think that there's a lot of regulation around how utilities price and how energy is priced. Now, during peak events, during demand response events, there might be cases where there's an uptick in pricing or you need to respond to some sort of event as a utility for the cost of energy. But for the most part, in areas that we've operated in... We are in seven states with vehicles on the road today... we've seen a pretty consistent level of pricing from utilities.
Cody Simms (43:19):
And you mentioned, just within the depot use case, three big use cases, school buses, drayage vehicles, which is essentially your semi trucks, and then vans and light trucks that are doing point-to-point delivery. Those are lots of, presumably, different use cases that you're having to solve. As a business, how do you decide... Right now, as an early-stage startup with limited resources, how do you decide what to say no to?
Gagan Dhillon (43:45):
Yeah. I mean, I think for us, right, the priority has always been, hey, we want to focus on use cases where we know vehicles are actively deployed and that they're actually running routes, they're actually requiring software to charge them versus, "Hey, we're going to have a fleet of 100 cement mixers on the road in 2024, and we want to go through an exercise of how we do that." Right? I mean, I think for us, we've been super intentional about wanting to work with folks that have deployed, but industries that we know have strong regulatory and strong consumer pressure to electrify and to reduce carbon footprints on it. And we know that investments are actively being made to do that. So that's been where our focus has come from.
Cody Simms (44:30):
Got it. So if there's a commitment to put EVs on the road for commercial use case at scale, you guys are interested in learning more about how you could help service them, is what I'm hearing, broadly, if they're committed to doing it right now.
Gagan Dhillon (44:43):
If they're committed to doing it right now, there is a plan in place, or if they need help putting a plan in place, right, we are the people that they should reach out to, that can have a conversation with them. And that isn't to dismiss anybody that's thinking about it in 12 or 18 or 24 months, right? But as a young company, you've got to go out and prove what you're building. You've got to have actual data. You've got to have things that back what you're working on, and that was our solution to having that.
Cody Simms (45:10):
And are you seeing charging networks themselves try to go into this space also, where they're trying to provide software services for optimization.
Gagan Dhillon (45:18):
Everybody's trying to provide software services for optimization, right? So I think what's happened with the charging network world, they were very focused on the personal auto side, right, and trying to help you charge your Tesla or your Bolt or whatever vehicle you had, and now they're trying to build these fleet use cases. So we're starting to see a lot more interest from the charging network providers.
Cody Simms (45:38):
Do you feel there's a risk that they shut off your ability to access data?
Gagan Dhillon (45:43):
Yeah. You always have to have things like that be at top of mind, but we feel like by partnering with and working very closely with some of these charging network providers, we can mitigate that. We're not super reliant on the Electrify Americas or the EVgoes of the world today, but that's something that is always top of mind.
Cody Simms (46:01):
And then you all just announced a couple months ago your seed round, that were led by many friends of the firm here with MCJ, with Obvious, Wireframe, Congruent, and Better Ventures. Maybe explain a little bit about that, how you're planning to capitalize the business going forward, what you're planning to use this seed funding for, and what your expansion plans look like.
Gagan Dhillon (46:21):
Yeah, absolutely. We ended up raising our seed round in April of this year. We were very fortunate to have Andrew Beebe and the team at Obvious Ventures lead that round. I'm very, very excited to have them be a close partner of our business. We were able to have Congruent join our investment syndicate as well, with an agent team. They've been super helpful. And then past investors, Wireframe and Better Ventures, also participated. And from our perspective, we felt like that we were starting to see... From last fall up until early spring, we were starting to see some really good signals from a product standpoint that'd we built. Customers were really starting to respond well to it.
Gagan Dhillon (47:00):
We were starting to see that we had a robust pipeline being built, and we felt like the industry was starting to teeter at that point, where you needed further investment and moving a little bit faster on the product and sales side. So, for us, we went and raised that capital. We're very focused on building out a sales team right now, a business development team, and a customer success team, so sort of a commercial arm of our business, and also executing faster on our roadmap, right? You're going to see a lot more from us on the energy management side. You're going to see a lot more from us on the charging management side. And with that, you need more and more talented engineers and developers within your business. So that's what we raised that capital for. That's where we're deploying that capital. We're pretty excited about having the runway to be able to do that, and really, really thankful to be able to work with such a great group.
Cody Simms (47:46):
For anyone listening who maybe operates a fleet, or anyone listening who is one of those talented developers or other roles you need filled, what are the best ways for folks to reach out if they are interested in what you've shared today?
Gagan Dhillon (47:59):
Yeah. Please reach out to us on our website, fill out the Contact Us form. It's right there at the front of the page. LinkedIn is a another super-easy way to reach out to myself or anybody on our team. We're very active there, or at trade shows, right? We're at every, almost, major climate trade show. We're at almost every major fleet electrification trade show, conference. Or you can send me an email, D-H-I-L-L-O-N @synop.ai.
Cody Simms (48:23):
Awesome. Well, Gagan, I super appreciate you taking the time to come on today. And I guess the final question I'll ask is, how do you think the space changes over the next five years? Looking forward, where do you see everything going?
Gagan Dhillon (48:36):
Yeah. Look, I think the big thing that's going to happen over the next five years, right, you're going to see two really big shifts. You're going to see continued pressure and regulatory changes from states to further enhance the adoption of electric vehicles and reduce greenhouse gas emissions from the transportation industry. California is leading the charge. There's 15 other states that are adopting similar regulatory environments to California, and regulatory requirements to California, for electrification of commercial vehicles.
Gagan Dhillon (49:05):
And then I think you're going to see a lot more OEMs offer a lot more choices of electric vehicles, right, whether that be on the personal side, which we're starting to see a lot, but also on the commercial side, right? So almost every major commercial OEM has some sort of EV in development, or that they've already launched. And with that choice, with that further diversity of vehicles, it makes that cost of ownership a lot lower, and it lowers the hurdles of a fleet going from an ICE vehicle to an electric vehicle. So we're excited to see both of those things happen.
Gagan Dhillon (49:39):
And then, finally, I think the third thing that we're going to see, we're starting to see, and we kind of talked about at the beginning of this podcast, you're going to see a lot more talented people want to jump in and try and solve these problems, right? So folks that have worked in traditional big tech, that have worked in other industries that reach out to us, are going to reach out to everybody else in this space. They're going to become more and more passionate about solving problems in climate.
Cody Simms (50:01):
Gagan, thank you so much for joining us today. I learned a ton, and hopefully everyone listening here did too.
Gagan Dhillon (50:08):
Yeah. Thank you, everybody, for listening. Thank you, Cody and the My Climate Journey team for having me. I really, really appreciated it, enjoyed the conversation.
Jason Jacobs (50:16):
Thanks again for joining us on the My Climate Journey Podcast.
Cody Simms (50:20):
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 (50:42):
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 (50:57):
Thanks, and see you next episode.
