Vollständiges Transkript von #16 Gareth Ridge: Zenobē: Electrifying Buses & Second‑Life Batteries

00:04:36.560 But yeah, that was a milestone project for the company, really globally, to show that we can expand internationally, but also locally, to show how we can do bus depot electrification at scale. 00:04:36.720 --> 00:04:47.040 And then adding, as you said, the solar and the battery to try and mitigate the cost, but to also mitigate some of the peak demand challenges and some of the redundancy uh risks that we could put into the system. 00:04:47.120 --> 00:04:50.079 So, yeah, that project's still going as you would expect. 00:04:50.160 --> 00:04:51.839 Um, it was a 15-year project. 00:04:51.920 --> 00:04:57.839 We're now actually in the process or working with Transport for New South Wales to make that the full 240 bus depot electrification. 00:04:57.920 --> 00:04:59.439 So it'd be one of the largest in the world. 00:04:59.839 --> 00:05:09.759 I remember at the time it feeling like it was, at least to me, a project that was ahead of its time because at that point solar choice didn't really have much to do with EV charging. 00:05:10.000 --> 00:05:15.839 You really didn't see that many EVs on the road in 2020, certainly not electric buses like you do now. 00:05:16.000 --> 00:05:16.319 Yeah. 00:05:16.560 --> 00:05:29.839 So I think you know, it would have been very cool to be at the forefront of a landmark project for Zenobi, but also probably a landmark project for the New South Wales government and for the for Australia, really. 00:05:30.079 --> 00:05:30.879 Yeah, it was. 00:05:31.040 --> 00:05:33.920 And it was really what kick started everything that we're doing now. 00:05:34.000 --> 00:05:44.800 And you know, we try to do market first for everything that we do, whether it's um, you know, the first project we did in the UK, even was one of the first e-bus projects in the UK and likewise here. 00:05:44.959 --> 00:05:52.720 So and we're doing first of its kind second life battery projects, as we'll talk about later, first of its kind you know, off-site truck charging hub project. 00:05:52.800 --> 00:06:06.560 So we like to sort of push the boundary, both in terms of the types of projects we do, but also the commercial models, which, you know, that first project was one of its first of its kind to have a 15-year lifespan and contract link to it, which is quite rare. 00:06:06.639 --> 00:06:12.560 But it, you know, it's having that thinking, out-of-the-box thinking on the commercial models, which actually makes these things stack up. 00:06:12.639 --> 00:06:18.959 And then we can start to think about instead of worrying about TCO, we can make the TCO work for us by looking at the the lives of the assets. 00:06:19.279 --> 00:06:21.040 TCO being total cost of ownership. 00:06:21.360 --> 00:06:21.680 Correct. 00:06:21.759 --> 00:06:21.920 Sorry. 00:06:22.959 --> 00:06:33.439 And and the 15-year agreement just give us that you're providing maintenance services for the charging for, or what's the scope of what you're delivering over 15 years? 00:06:33.759 --> 00:06:39.600 Yeah, so that covers all the operation and maintenance services for the sole of the battery and the buses themselves. 00:06:39.680 --> 00:06:45.439 So we and we actually repurpose as replace the bus batteries at their midlife, which is around eight years. 00:06:45.680 --> 00:06:47.680 That's the life of a bus battery, roughly. 00:06:47.920 --> 00:06:57.199 We'll replace that battery, repurpose it into a second life application, as I said, and then we'll put a new battery into the bus so that it can go for the remaining uh seven or eight years. 00:06:57.439 --> 00:06:57.680 Wow. 00:06:57.759 --> 00:07:02.160 And so is Zenobi providing the capital for all of that upfront acquisition? 00:07:02.399 --> 00:07:02.639 Correct. 00:07:02.720 --> 00:07:05.199 Yeah, so it's all fully funded by us. 00:07:05.360 --> 00:07:14.240 And then the whole project, which is why it was quite attractive to a lot of stakeholders, is that it was no more cost than what it costs for a diesel to run a diesel. 00:07:14.319 --> 00:07:14.480 Right. 00:07:14.639 --> 00:07:22.160 So all the costs that were going through in the transport system, you know, whether it's a if it was a dollar for the diesel system, it was a dollar for this. 00:07:22.319 --> 00:07:25.439 And so that was for everyone's perspective, quite a game changer. 00:07:25.600 --> 00:07:30.720 Obviously, uh, I don't know if you recall, but we had some arena grant funding in there to help plug that gap as well. 00:07:30.879 --> 00:07:34.879 But to be honest, a lot of that went to lawyers and other costs. 00:07:35.199 --> 00:07:40.000 Yeah, which you probably don't need to expend at the same level for future projects. 00:07:40.160 --> 00:07:40.480 Exactly. 00:07:40.639 --> 00:07:49.120 Which is where Arena likes to deposit their money for kind of new novel projects to pave the way for it to happen cheaper and more effectively in the future. 00:07:49.360 --> 00:07:49.839 Yeah, correct. 00:07:50.000 --> 00:07:56.079 So essentially what you've done in that project is for the client completely de-risked the transitioning to an electric fleet. 00:07:56.160 --> 00:07:56.319 Yeah. 00:07:56.480 --> 00:08:04.480 Take on the capital risk, you take on the maintenance headaches, everything that they don't know about, they don't understand the problems, the upkeep, you take that on. 00:08:04.560 --> 00:08:04.800 Yeah. 00:08:04.959 --> 00:08:07.680 You make sure that the business model works in the long term. 00:08:07.839 --> 00:08:11.519 And it seems like a really important part of the transition. 00:08:11.759 --> 00:08:23.600 But I mean, Zenobian, and if there are other companies doing similar things, uh, they're companies that just don't make it into the public consciousness generally because you're not branded on public charges that people are pulling up to or home charges they might buy themselves. 00:08:23.759 --> 00:08:27.279 This is important for moving the needle, but completely behind the

scenes for most people. 00:08:27.519 --> 00:08:28.079 Yeah, correct. 00:08:28.160 --> 00:08:41.679 And we we love, we strive and love to take on those technical challenges or whatever the barriers are to adoption for our customers, whether it's governments or or business customers, and say, all right, what are your barriers, whether it's technical, as you said, or commercial or financial? 00:08:42.000 --> 00:08:43.120 We love cracking that. 00:08:43.200 --> 00:08:46.559 And then, yeah, as you said, working in the background to make things happen. 00:08:46.720 --> 00:08:53.519 I think a lot of people in who live in Sydney would be riding on a bus that's been, you know, funded or supported or charged by Zenobi. 00:08:53.600 --> 00:08:55.120 Um, and they probably don't realize that. 00:08:55.360 --> 00:08:58.240 So, how much with a project like the Lycart bus depot? 00:08:58.399 --> 00:09:00.240 Is there Zenobi doing everything in-house? 00:09:00.320 --> 00:09:05.440 You've got the technical, you've got the engineering, the commercial, it sort of all falls under your umbrella? 00:09:05.679 --> 00:09:12.399 Yeah, so we we would be seen, I guess, similar as a prime contractor or or someone who takes the overall arching responsibility. 00:09:12.480 --> 00:09:14.480 We don't make the buses or make the charges. 00:09:14.960 --> 00:09:21.120 So we go out to market to make sure we get best value for money, which works for governments and our other business customers. 00:09:21.279 --> 00:09:30.399 So we go out, we'll source and we'll make sure that because we're independent of the technology, we can actually pick the best technology to suit the circumstance and the situation for the customer. 00:09:30.639 --> 00:09:33.440 So we're not wedded to a certain type of technology. 00:09:33.600 --> 00:09:37.919 And that's great because as technology advances, we can actually pick new technology from the stack as well. 00:09:38.159 --> 00:09:42.960 I want to talk about the project that actually caught my eye at the end of last year, which is the reason we reached out to you. 00:09:43.120 --> 00:09:50.879 There's some a bit of news, at least news in the the renewable space, about the Woolworths off-site charging hub for the last mile vehicles. 00:09:50.960 --> 00:09:56.720 And people are probably used to seeing them now chugging along their streets or not chugging along, silently gliding along their streets. 00:09:57.279 --> 00:10:01.759 Uh, you know, the vehicles that are doing those deliveries to people's houses of the weekly grocery shop. 00:10:02.000 --> 00:10:08.559 You know, most of the time, if you see one of those trucks on the street, you don't even think about where it's charged and how it's charged, but that's a critical thing, right? 00:10:08.720 --> 00:10:11.279 Because these vehicles are spread everywhere. 00:10:11.440 --> 00:10:16.320 They're not just based in one place, they are constantly moving throughout the entire city. 00:10:16.639 --> 00:10:21.519 So yeah, I'd love to give us a bit of an insight into how a project like that one comes to be. 00:10:21.600 --> 00:10:22.799 Like how does it start? 00:10:22.879 --> 00:10:24.320 How do you move through the process? 00:10:24.639 --> 00:10:28.639 Yeah, look, that's super exciting for project for us locally and globally. 00:10:28.720 --> 00:10:32.799 This is the first time Zenobi as a business has done anything like this. 00:10:32.960 --> 00:10:35.919 And we think it's, you know, there'sn't there's not many out there that you'll find. 00:10:36.000 --> 00:10:37.759 There might be some in the US and China. 00:10:37.919 --> 00:10:39.519 But outside of that, it's probably not a lot. 00:10:39.919 --> 00:10:42.320 This has been about two years in the making. 00:10:42.480 --> 00:10:47.840 We just had our launch, as you said, last year uh with some of the key stakeholders and a couple of ministers. 00:10:47.919 --> 00:10:55.039 And and when we looked back at the timeline, yeah, it was, and you forget about it when you're in the middle of it, you just work, work, work, and then you know, all of a sudden at the end it's done. 00:10:55.200 --> 00:10:58.799 But yeah, about two years with Woolworths, we'd been working on this. 00:10:59.039 --> 00:11:18.720 And uh credit to Woolworths for their, I guess, out-of-the-box thinking to think, okay, well, how do we the main driver of how this came about was typically you would have a site where a fulfillment center for a supermarket company or any sort of logistics company, they'd have a fulfillment center where they would have the trucks come in and then distribute the goods out to their customers. 00:11:18.960 --> 00:11:26.480 Now, the problem, as many of you know and your um listeners would know, is that the space it gets limited as you put in charging infrastructure. 00:11:26.559 --> 00:11:30.240 Obviously, you've got to put a piece of kit in there that was just a car park before. 00:11:30.320 --> 00:11:32.559 And so that will take up a little bit of space. 00:11:32.639 --> 00:11:34.720 And the more you do that, the more space it's taken up. 00:11:34.879 --> 00:11:37.120 So space constraint was the first problem. 00:11:37.279 --> 00:11:38.639 The next one was grid. 00:11:38.720 --> 00:11:45.039 Obviously, you know, there's a lot more draw on the meter and on the grid from your standard lights and whatever you're using. 00:11:45.120 --> 00:11:48.080 So adding a whole bunch of trucks is gonna suck a lot more grid. 00:11:48.159 --> 00:11:51.919 So there was a lot, there was some grid constraints at that particular site as well in mascot. 00:11:52.080 --> 00:12:01.679 And then there were some the commercial challenges to make it work as well, and also understanding if we did do a site, who's gonna take on this multi-user facility risk, which I'll get into later. 00:12:01.759 --> 00:12:05.919 But that's how it came about was primarily the grid and the space constraints. 00:12:06.000 --> 00:12:30.559 And

then we worked together to come up with a solution, which is this multi-user off-site charging hub solution, which basically gives, well, it does give Woolworths the ability to now charge their trucks, not have to put the capital out there for a huge new site, not have to worry about grid or space constraint issues at their own uh fulfillment center, and enables us to try and commercialize the additional charges at that site to make it properly multi-user. 00:12:30.720 --> 00:12:39.919 And we think that whilst this won't be the model, the only model for this, but we see this as one of the models that the industry will consider and are considering and actually rolling out. 00:12:40.080 --> 00:12:46.799 So yeah, very, very exciting because I think there's not a lot of them, and I think it's great to just show how something different can be done. 00:12:46.960 --> 00:12:50.799 And I can get into the commercials of it later because that's also a little bit innovative as well. 00:12:51.039 --> 00:12:51.200 Okay. 00:12:51.279 --> 00:12:56.639 Well, uh maybe you can just paint a picture for us for what it would actually look like, you know, what it looks like there on the ground. 00:12:56.799 --> 00:13:01.039 Because off-site multi-vehicle charging hub is you know, it doesn't paint a picture on its own. 00:13:01.440 --> 00:13:07.919 We only focus on a business model, so on almost a subscription or a long-term lease arrangement for the site. 00:13:08.080 --> 00:13:12.080 It's not a like a public charging uh model where any trucks can just turn up. 00:13:12.240 --> 00:13:19.840 So we're we're quite tight on making sure we know who's in, who's out, because we want to provide a very high level of guarantee on those charges. 00:13:19.919 --> 00:13:25.360 And our customers want to make sure that if they're in there and they're charging, they're definitely going to be out in the morning because it's critical for them. 00:13:25.519 --> 00:13:26.720 So yeah, it's open air. 00:13:26.799 --> 00:13:37.360 There's as you would enter the site, there's a large switchboard, which is where the um, sorry, there's a there's a large substation, which is where the grid upgrade is, one MVA connection that we've got. 00:13:37.519 --> 00:13:44.240 And then you'll see the innovative design about this from engineers is it's actually on an Osgrid site. 00:13:44.320 --> 00:13:50.720 So we work closely with Osgrid throughout this project to leverage a site that was otherwise being completely unused. 00:13:50.879 --> 00:14:00.000 Uh it was just redundant because underneath it there are absolutely stacks of about 132 kV cables and other and 11 kV, etc. 00:14:00.480 --> 00:14:03.840 And so this is an absolute spider web of cables underneath. 00:14:03.919 --> 00:14:09.200 So you they couldn't do anything on the site, but tutos to their engineers and our engineers to work out a way to make it work. 00:14:09.279 --> 00:14:13.200 And so what we did is a complete over-ground, above ground,

I should say, solution. 00:14:13.360 --> 00:14:20.960 So it comes in, there's a grid connection, and then the perimeter has the cabling all around it, and then cables go to the charges all around the perimeter of the site. 00:14:21.120 --> 00:14:24.720 So again, I don't think we've seen many sites like that where everything is above ground. 00:14:24.960 --> 00:14:33.679 Switchboard again is on a platform that's raised up, again, which is good for flooding, but it's also um needed for that particular site, which which has all these cables underneath. 00:14:34.000 --> 00:14:35.840 How many EV charges do you have there? 00:14:36.080 --> 00:14:39.759 So it's 22 dual gun charges, so that'll that'll charge about 44. 00:14:40.000 --> 00:14:42.799 Well, would charge 44 trucks, simultaneous trucks? 00:14:43.279 --> 00:14:44.799 And what's the charge rate? 00:14:45.200 --> 00:14:47.519 There are 120 kilowatt chargers. 00:14:47.759 --> 00:14:48.080 Okay. 00:14:48.559 --> 00:14:52.799 And there they'd be speed limited down to one MVA if that's the site capacity. 00:14:53.200 --> 00:14:53.360 Exactly. 00:14:53.440 --> 00:14:53.759 Yeah, yeah. 00:14:53.840 --> 00:14:57.840 So we have our own software that we've developed that throttles the charging rate as needed. 00:14:58.159 --> 00:15:02.559 Um we can also shift that if there's benefits in terms of peak demand charges and and the like. 00:15:02.720 --> 00:15:15.279 And then also we're looking at like not pure demand response mechanisms, but demand response-like mechanisms where we just where we see there's signals on the grid to say if you throttle your power down, there's some incentive for that. 00:15:15.519 --> 00:15:17.600 Then we can look at that as well with our software. 00:15:17.919 --> 00:15:28.240 So it's it sounds like Woolworths is um like a primary client, but am I right in understanding that you will open that up to potentially other businesses and clients to charge that? 00:15:28.480 --> 00:15:31.440 Yeah, so Woolworths take have 20, 20 trucks there. 00:15:31.519 --> 00:15:34.240 So that's only about 10 of the 22 charges. 00:15:34.320 --> 00:15:34.480 Okay. 00:15:34.639 --> 00:15:44.559 So there's about a little over half of the site is still available for um others, which we're in you know quite a lot of discussions with, given it's central proximity in mascot. 00:15:44.639 --> 00:15:48.399 It's very hard to find space there that's not been primed for development. 00:15:48.480 --> 00:16:06.080 So this is a little bit of a different business model this time around than the Lycart bus station, which obviously was a long time ago, where as an Obi you're focusing on basically being a charge point operator almost, but for a specific use case of commercial fleets. 00:16:06.399 --> 00:16:06.639 Correct. 00:16:06.720 --> 00:16:08.879 Yeah, I guess you could compare it like that. 00:16:08.960 --> 00:16:09.200 Yeah. 00:16:09.360 --> 00:16:17.039 And that's where we see we just see that the trucking market is a little bit more fragmented, it's not driven by a government mandate to say you have to do this and we'll pay you. 00:16:17.200 --> 00:16:21.279 It all has to stack up on its own and the um private sector have to come up with solutions. 00:16:21.360 --> 00:16:28.960 So yeah, and that works for us because it's B2B still, and it's we're not set up for a lot of the the public charging as the public charging system is. 00:16:29.200 --> 00:16:30.559 Yeah, B2C is a headache. 00:16:30.799 --> 00:16:36.720 Yeah, there's a lot of stuff that like I was driving my I have an EV and and driving over the brake. 00:16:37.120 --> 00:16:53.600 And even though I'm in the space, there's you know, the amount of I did come across a lot of challenges um with charging, and I know a lot about these things, and I I can sort of I'm not an engineer, but so I it made me sort of realize what it must be like for the average people or even our you know, the truck drivers and stuff plugging things in. 00:16:53.679 --> 00:16:56.960 If there's warnings or things not working, you know, how does it work? 00:16:57.120 --> 00:16:58.960 So we've still got a fair way to go. 00:16:59.200 --> 00:17:04.720 Yeah, I think me personally are very acquainted with some of the issues with the public charging stations. 00:17:04.799 --> 00:17:07.039 I'm sure some of the listeners are as well. 00:17:07.279 --> 00:17:09.759 And so just give us an idea of the trucks we're talking about here. 00:17:09.839 --> 00:17:17.119 We're talking those uh, you know, like 30-foot trucks, or are we talking so uh four and a half ton, you would have seen them probably buzzing around. 00:17:17.200 --> 00:17:20.000 They're so you can drive them on on a driver's license. 00:17:20.079 --> 00:17:21.839 Um so they're under the that limit. 00:17:22.160 --> 00:17:27.119 These are the ones that drop the delivery shopping off to people's individual homes, all the way to the homes, yeah. 00:17:27.279 --> 00:17:31.839 So these are these aren't the middle mile or prime movers, these are the smaller trucks. 00:17:32.000 --> 00:17:41.680 We focused on that segment because that is the market that's sorry, the segment that's moving quickest because the economics are stacking up a lot better than the other, the bigger end of the town. 00:17:41.839 --> 00:17:52.000 It's also easier to do because you can do this sort of back-to-base model, you can get pretty good mileage out of them, and you don't have to worry about you know charging all along the way for a large prime mover. 00:17:52.319 --> 00:18:08.000 Yeah, and I know that Woolworths have a pretty sophisticated energy team there, so they must have been looking at the electrification and the total cost of ownership, some of these things that you're really good at calculating for electric vehicles and electrifying their fleas. 00:18:08.480 --> 00:18:22.480 Do you have any insights as to, you know, in like your example earlier was that the Lycheart site for the New South

Wales government was like a one-to-one for diesel versus going for this electric bus solution? 00:18:22.640 --> 00:18:28.319 Is there any view that this is for wars now a cheaper solution, or is it the similar cost? 00:18:28.400 --> 00:18:33.039 Or yeah, I mean, obviously can't share what the inner workings of of Woolies. 00:18:33.440 --> 00:18:41.920 Um but I know look, what I can say is they worked and have been working quite hard on making this work uh an EV model. 00:18:42.240 --> 00:18:47.599 And this wasn't they've they had already rolled out it might be like roughly 10 or something EV. 00:18:47.680 --> 00:18:54.960 So it wasn't their first, so they had some data already that they could leverage to do all the analysis or as to around you know, how does this stack up? 00:18:55.039 --> 00:18:57.200 And then they obviously had our costings and everything. 00:18:57.359 --> 00:19:06.640 So as you would expect, Woolworths being Woolworths know how to do the numbers right, and they're not in the business of charging customers more for that delivery. 00:19:06.720 --> 00:19:07.039 Yes. 00:19:07.200 --> 00:19:11.359 So they have to look at how do we make this work, how do we make this stack up on our own. 00:19:11.519 --> 00:19:17.359 And obviously, you know, this project wouldn't have happened if it was completely out of the realm of making sense for them. 00:19:17.519 --> 00:19:23.279 Yeah, but yeah, they have to look at all options, whether it's like and we did that on this project, like different sites. 00:19:23.599 --> 00:19:26.160 The location was a huge one, which is actually quite interesting. 00:19:26.720 --> 00:19:42.480 It has to be super close to a fulfillment standard for them, or as it makes would be for any partner, because they're dead running on those, which they normally dead running is only concept usually in buses, because you know, trucks, I mean, trucks do have some dead running, but at the same time dead running being like how long they're not in. 00:19:43.039 --> 00:19:43.839 Yeah, not being used. 00:19:44.000 --> 00:19:44.480 Yeah, exactly. 00:19:45.440 --> 00:19:46.960 Being used, but not for their primary functions. 00:19:47.279 --> 00:19:47.519 Exactly. 00:19:47.599 --> 00:19:59.039 They're just and so if we we have a a site where now they have to park the truck at this site and then take that truck to the fulfillment center to load up rather than being already at the fulfillment center, that adds a cost which had to be factored in as well. 00:19:59.119 --> 00:19:59.200 Yeah. 00:19:59.680 --> 00:20:03.839 The further we got away from that, very quickly the economics fell off a cliff. 00:20:04.079 --> 00:20:04.240 Right. 00:20:04.480 --> 00:20:18.720 Does that mean that you know obviously most of Woolworths or Coles or anyone like that who's doing these last mile deliveries, they're doing them mostly in metro areas, which are the locations where it's hardest to find sites because of the cost of land, because of the availability of suitable sites. 00:20:18.799 --> 00:20:18.960 Yeah. 00:20:19.200 --> 00:20:23.359 Do you think we're gonna see like a bit of a land grab if you know this model works? 00:20:23.599 --> 00:20:26.400 Well, he's got a huge fleet that they're gonna electrify over the coming years. 00:20:26.640 --> 00:20:28.160 You're not meant to be talking about that on this. 00:20:28.319 --> 00:20:29.359 No, no, I'm joking. 00:20:29.599 --> 00:20:37.359 It will there'll be a bit look to a certain extent, but I think as I said before, this won't be the only model. 00:20:37.680 --> 00:20:48.480 There'll be some sites, some fulfillment centers and other sites for logistics companies do have enough power, or at least they have the capacity to upgrade to get enough power and space. 00:20:48.720 --> 00:20:52.480 So not every site will need an off-site charging hub, but some will. 00:20:52.640 --> 00:21:04.319 And I don't know if you've had them on on your um pod, but there's other companies who are looking at charging hub models in this space, but more on the larger sort of prime mover space, not fully getting there just yet. 00:21:04.720 --> 00:21:14.480 So I think there's people looking at it, but it's not at the point where there's you know the gold rush of of people trying to lock up sites just because no one is sure whether it's 100% needed. 00:21:15.039 --> 00:21:32.079 Well, it's really encouraging to hear from the perspective of just the EV transition, decarbonising transport, because these fleets, you know, these thousands of woolies and coals trucks, they just represent such a big percentage of those emissions. 00:21:32.240 --> 00:21:39.200 And like also encouraging to hear that that will, you know, there's there's already work going on with the prime movers, those big trucks. 00:21:39.759 --> 00:21:57.119 Because once the I guess there's provable cases that it's going to be profitable or in the best interest of these companies to go in that way, then there'll be a mad rush to do it because otherwise they'll they'll be at a cost disadvantage to their their competitors. 00:21:57.279 --> 00:21:58.240 So yeah, 100%. 00:21:58.559 --> 00:22:07.759 There's as soon as this PCO needle, again, total cost of ownership, switches just or gets to parity, you will see the floodgates open. 00:22:07.839 --> 00:22:13.759 And because the vehicles work better, the servicing is better, the drivers like them better, then obviously the customers like them better. 00:22:13.839 --> 00:22:24.720 So once you solve the economic problem, which is a primary driver that's not, I mean, obviously, we talked about the land and the grid, but that sort of is part of the economics of it as well, right? 00:22:24.960 --> 00:22:33.200 Once you get that, and that's why we're quite excited about this sector, because it's hundreds of thousands of trucks, so many people will electrify and turn to electric trucks. 00:22:33.279 --> 00:22:42.400 The only thing probably holding it back will

be, you know, existing arrangements on leases of newer trucks, where they think, okay, we're just going to see that lease through until we move. 00:22:42.559 --> 00:22:49.759 But there's this customer's thinking, you know, looking at their aging fleet and say, can we hold out a little bit longer and then we'll switch to electric, which is again reassuring. 00:22:50.000 --> 00:22:53.680 Yeah, which in a way mirrors the rest of the EV transition, right? 00:22:53.839 --> 00:23:02.160 For the the enthusiasts and the people who, you know, the first ones to buy a Tesla Model S, they were driven by excitement with technology and sustainability. 00:23:02.319 --> 00:23:05.680 But over time, for most people, it just kind of gonna come down to cost. 00:23:05.759 --> 00:23:06.000 Yeah. 00:23:06.559 --> 00:23:08.720 Upfront cost, of course, but total cost of ownership. 00:23:08.799 --> 00:23:19.759 And we're seeing that change start with smaller vehicles, passenger vehicles, move into light commercial, now move into medium commercial, and not the last hurdle will be the prime movers, but there's work being done there too. 00:23:19.920 --> 00:23:20.640 Yeah, there is. 00:23:20.880 --> 00:23:21.119 Great. 00:23:21.279 --> 00:23:24.400 And is there anything that's uh in the pipeline that you are able to tell us about? 00:23:24.480 --> 00:23:26.319 Any exciting projects coming up? 00:23:26.720 --> 00:23:33.680 Bus is still our uh one of our larger uh segments that we're working on that you'll hear as well coming out, both in New Zealand. 00:23:33.759 --> 00:23:37.440 There's quite a lot of work that we've just won um in New Zealand that we're building the depots. 00:23:37.519 --> 00:23:42.240 So six depots over there we're building, which is quite big, and a depot in Wellington. 00:23:42.319 --> 00:23:44.799 So yeah, a lot of bus stuff happening. 00:23:44.880 --> 00:23:50.559 And then I think in Australia there's going to be a lot of truck, but there'll be some different bus things popping up. 00:23:50.640 --> 00:23:56.640 We're we're building a couple of sites in which are they not fully public, but they if you dig deep enough, they're public in in Melbourne. 00:23:56.880 --> 00:23:59.200 So a couple of bus depots there that we're working on as well. 00:23:59.279 --> 00:24:10.240 So we like to have a spread of bus and truck, keeps us um interesting, excited and true to our sort of core core market, which was bus and and any basically any heavy, heavy commercial vehicle, to be honest. 00:24:10.319 --> 00:24:24.559 So we're looking at specialized trucks as well, like um BWPs, like elevator work platforms and uh pump trucks and and cement mixes, and uh those you will likely see something this year on the on some of them as well from us. 00:24:24.960 --> 00:24:37.440 Okay, those some of those vehicles, especially things like um you know cement mixers, are ones that I would have expected the battery costs are so significant because of how much weight they're pulling

that we'd be looking even further into the future before seeing electric vehicles like that. 00:24:37.680 --> 00:24:42.799 No, you'll be seeing some of them uh probably this year, at least from our side. 00:24:43.279 --> 00:24:53.839 The weights, yes, there are some weight challenges, but they're already pretty like the axle loads and stuff, and and having to add uh some of the additional axles on on some of the trucks. 00:24:54.000 --> 00:25:01.599 So there is we're solving some of those problems, those um weight problems, but they are solvable and the economics is getting very close. 00:25:02.079 --> 00:25:10.960 Is there any interest from your clients in, you know, one of the buzz topics in in our spaces is vehicle degree and bidirectional charging? 00:25:11.200 --> 00:25:16.720 It seems just listening to you that they've got like a pretty commercial purpose for charging vehicles. 00:25:16.960 --> 00:25:26.079 It would seem a little bit of a an aside or uh out of scope potentially for thinking about utilising batteries in some other way in these vehicles. 00:25:26.160 --> 00:25:31.039 But is that is that ever a topic that you find gets discussed with your clients? 00:25:31.359 --> 00:25:53.279 It is increasingly it's you know, it's come up back in our days, 2020, it was it was discussed, but it was always there was so much limited capacity on the batteries of the buses that we worked on in the early days that why would you or how could you use that battery for another purpose when you're just getting enough juice out of it to do its um run and then you're just having enough time to charge it up overnight. 00:25:53.519 --> 00:25:58.240 If you add any more you know drain on that, then you're not gonna be able to charge it up or or do the runs. 00:25:58.480 --> 00:26:02.480 But now we're seeing improved like battery technology is improving dramatically. 00:26:02.559 --> 00:26:16.319 And I I don't know how much you sort of have talked about this, but from our what we're seeing on the commercial vehicle side is you know rates just continuing to plummet in terms of costs and in terms of battery capacity and weights continuing to improve as well. 00:26:16.400 --> 00:26:18.559 So that's great for us and the sector. 00:26:18.720 --> 00:26:23.119 But yeah, back to vehicle to grid, we are looking at some projects with that. 00:26:23.279 --> 00:26:29.359 It's still early days, both in terms of technology and warranty on the batteries is a big one. 00:26:29.599 --> 00:26:33.279 And then the commercial model of it and the operational model, and how does it work? 00:26:33.359 --> 00:26:39.279 How do we make it work so that as I said, you know, it's not impacting the the actual primary use case of these vehicles. 00:26:39.599 --> 00:26:51.359 But we, as I mentioned, we we have operations in the US as well, and they have a lot of school buses, like hundreds of thousands, I think, school buses, those yellow buses that pop around. 00:26:51.599 --> 00:26:53.920 School buses are a great use case for vehicle to grid. 00:26:54.000 --> 00:26:59.200 They just have this morning peak and an afternoon peak, and there's not a lot they do in the day, and there's a lot of excess capacity. 00:26:59.519 --> 00:27:07.039 Oh, I mean, you you face the same challenges as the residential market in that OEMs aren't really forthcoming just yet on the warranties. 00:27:07.759 --> 00:27:16.960 And yeah, there's not a lot of proof cases of it, but a school bus is the complete perfect example, really, because they're just doing a few runs a day. 00:27:17.279 --> 00:27:17.839 Exactly. 00:27:18.079 --> 00:27:55.119 And you know, at where we're at, Zenobi and and sort of the industry is, and parts of the industry, I should say, is the not proof of concept, but maturing phase where we're making sure that people get comfortable with the technology and the use case and and really bed down that the technology risk and any commercial risk and everything, it doesn't exist and and get everyone comfortable with that before we move to the optimization level, which is where we can then start to look at vehicle to grid, demand response, driver training, other energy, energy optimization tactics that we've got, using software, using better scheduling, putting different weights on different trucks and all that stuff. 00:27:55.200 --> 00:28:01.839 So that's the next level, which we'll get to, which play early stage players like Woolworths and that will probably get to before others because they're rolling out their fleet sooner. 00:28:01.920 --> 00:28:03.440 So they're ahead on that curve. 00:28:03.680 --> 00:28:12.640 But the bulk of the industry is still at just like, I just want to make sure this thing works and does the core function, then we'll move to the sort of fancy bells and whistles to make a bit of extra cash later. 00:28:12.880 --> 00:28:13.680 Yeah, yeah. 00:28:13.839 --> 00:28:27.440 Yeah, it's probably a tough one to throw into the business case to take up to your ASX 200 listed board or to say, well, this project relies on us selling some power out of the batteries on the market. 00:28:28.079 --> 00:28:35.440 Yeah, but I mean that like it's yeah, in a few years that may be a robust, approvable uh revenue stream. 00:28:35.680 --> 00:28:52.400 Yeah, it'll be interesting to see how that plays because there may be others in the market who want to take a play on fleet, uh owning fleets who aren't you know the worst of the world who can take more risk on the energy side and optimize those assets for their customers, uh, which is something we're considering or looking at. 00:28:52.480 --> 00:29:00.640 Um that's where you sort of have people who are better placed to look at how do you do vehicle to grid and then just basically provide as a service, which is what we do to our customers. 00:29:00.720 --> 00:29:04.640 So here's a vehicle as a service or a truck as a service or whatever, yeah. 00:29:04.799 --> 00:29:06.720 And you just

know that you have that truck available. 00:29:06.880 --> 00:29:12.799 What happens in the background, how it's charged, is a vehicle to grid, whatever, you don't worry about it, you just know you're paying a certain Yeah, yeah. 00:29:12.960 --> 00:29:21.279 We'll give you uh a Tesla model three and it'll be at 100% at eight in the morning, and you give it back to us whenever you want, and then we'll do what we do in the background. 00:29:21.759 --> 00:29:22.079 Exactly. 00:29:22.160 --> 00:29:22.960 Yeah, yeah, yeah. 00:29:23.599 --> 00:29:24.319 That's happening as well. 00:29:24.480 --> 00:29:25.279 Good interesting. 00:29:26.079 --> 00:29:31.839 I do want to touch on the the second life battery stuff because I I think this is an incredibly interesting part of the market. 00:29:32.000 --> 00:29:47.920 And I also really love learning about it because it solves one of these myths, one of these concerns that a lot of people have expressed over the last few years that you know EV batteries are useless, you know, after five years, they're gonna have terrible mileage, they're gonna end up in landfill, yeah. 00:29:48.079 --> 00:29:50.160 All these things that we know aren't true. 00:29:50.240 --> 00:29:57.279 Yeah, but I think more and more I'm hearing these exciting uses for EV batteries after they've reached the end of their life in their primary vehicle. 00:29:57.440 --> 00:29:57.599 Yeah. 00:29:57.759 --> 00:30:03.680 So did this sort of start as a way, like yeah, tell us how this started for Zenobi, how did you get into this space? 00:30:03.920 --> 00:30:04.480 Yeah, sure. 00:30:04.559 --> 00:30:06.799 So we call ourselves a battery-based business. 00:30:06.880 --> 00:30:11.920 So we're focused on batteries, whether it's stationary batteries or moving batteries on vehicles. 00:30:12.079 --> 00:30:20.720 So we had our first two business arms, which was you know, large grid scale storage, and then we had our um moving batteries, if you want to call it that, the the bus batteries buzzing around. 00:30:21.039 --> 00:30:32.079 We saw as a business there was an opportunity to try and lead the market commercially to take stronger residual value positions on those batteries, the moving batteries at their end of life. 00:30:32.319 --> 00:30:39.680 But to do that, we needed to get more comfortable with what is the value of that battery at its end of life and what is a good, better use case for it. 00:30:39.839 --> 00:30:58.160 And when we started doing a bit of the digging, we realized, hang on, luckily we had you know some smart engineers and founders who sort of thought, well, there's an opportunity here to try and why don't we create more value than just selling it for scrap metal or or selling it to a um auction house because not they're not putting any value on it, especially you know, six or seven years ago. 00:30:58.319 --> 00:31:16.319 So we worked with a company in the Netherlands who were already starting to dabble in this and you know, took them on as part of the business as well, and then said, all right, well, let's start working with old bus and truck batteries that were in accidents and stuff, because there were no old sort of naturally retired batteries at that point in time. 00:31:16.480 --> 00:31:19.119 So, how do we actually get the business model working? 00:31:19.279 --> 00:31:24.480 How do we actually set this all up before they all come off in you know the the hundreds in eight years' time? 00:31:24.720 --> 00:31:37.519 So we use, yeah, as I said, they're called first chance batteries, I think, but basically batteries that have come off their first life early because they've just been an accident or whatever, to then prove up the manufacturing capability. 00:31:37.680 --> 00:31:41.039 And we've started, we've produced you know about 50 of those units. 00:31:41.279 --> 00:31:53.839 That then made because we we have now the know-how and the IP around how to put the inverters in, how to retest them, how to recalibrate the cells, and then the commercial side of it, how where do we now sell these things to, um, which I'll get to later. 00:31:54.000 --> 00:32:07.519 But it it then enabled us to be quite sure on what our residual value position is, which then led to us being able to sell or lease more more buses and trucks because we could say, all right, here's your price, and we're going to take a pretty punchy residual value at the end. 00:32:07.599 --> 00:32:09.440 And everyone, you know, banks would be like, What? 00:32:09.519 --> 00:32:10.960 How do you, you know, how could you do that? 00:32:11.119 --> 00:32:16.880 But because we have this business arm, that means that we can take that stronger financial position on it. 00:32:16.960 --> 00:32:20.400 And that's where it sort of all came about and it's just continued to come from there. 00:32:20.640 --> 00:32:26.799 You know, in the the grand idea was, I guess we have hundreds, we were rolling out this year. 00:32:26.880 --> 00:32:31.200 We probably put a gigawatt or more than a gigawatt of storage on the grid in across the world. 00:32:31.440 --> 00:32:36.400 The idea is, you know, we have about 2,000 electric vehicles that we've funded. 00:32:36.640 --> 00:32:41.680 Each vehicle, let's say an average uh size of battery on them is around 300 kilowatts. 00:32:42.079 --> 00:32:46.240 I'll let you two do the maths as to how many megawatts of storage that is. 00:32:46.480 --> 00:32:50.480 But that's a huge amount of storage that's going to be coming off just on what we've got now. 00:32:50.720 --> 00:32:53.920 And we're adding you know hundreds of vehicles to our portfolio. 00:32:54.160 --> 00:33:05.599 So the idea is, you know, if we've got already a stationary storage business rolling out you know huge batteries on the grid, why don't we see there's there's a synergy to actually use our all our old bus batteries and truck batteries to go to that business? 00:33:05.759 --> 00:33:07.759 But that's where it all all started

from. 00:33:07.920 --> 00:33:08.799 Now we're using them. 00:33:08.880 --> 00:33:12.799 We've got two in um one in Australia, one in New Zealand. 00:33:12.960 --> 00:33:20.559 One's been used at a petrol station in New Zealand, was being used for a couple of years there to help with their EV charging. 00:33:20.720 --> 00:33:24.319 So they had two charges, not a very good grid connection. 00:33:24.480 --> 00:33:41.440 And so it trickle charged up through the day and then would provide boost power for those charges when customers would come in and would just always trickle charge up when it could, but it would give you know Z Energy, the company over there in New Zealand, the ability to still have fast charges, but with having a pretty, pretty low grid connection. 00:33:41.599 --> 00:33:43.519 Here we've got them at, as I said, the mascot. 00:33:43.599 --> 00:33:46.480 We've got one at the mascot site, but globally we're using them. 00:33:46.640 --> 00:33:49.519 The biggest use case for them is on the construction sites. 00:33:49.599 --> 00:33:49.759 Yeah. 00:33:50.079 --> 00:34:02.640 So there's there's a lot of um needs to help with you know cranes and and high energy drawing devices where we can provide boost, like a bit of boost power with those uh short duration high power with the batteries. 00:34:02.960 --> 00:34:06.559 And that saves them taking a generator out, presumably, or exactly. 00:34:06.640 --> 00:34:09.920 And and we we have the smarts around pairing them with a generator. 00:34:10.000 --> 00:34:19.280 So sometimes we still will use a generate diesel generator, but it's like 50% less consumption of that diesel because we can throttle the power, right? 00:34:19.519 --> 00:34:30.800 Yeah, and so so those have if I'm riding listening to you there, those are mostly batteries that have that are still in their sort of prime life, but have the bus has been crashed. 00:34:30.960 --> 00:34:37.039 Are there some of these now more end-of-life batteries where the degradation's kind of kicked in quite a lot? 00:34:37.360 --> 00:34:42.880 Yeah, so this we're starting now to get to those ones that are end-of-life to talk a bit more about that. 00:34:42.960 --> 00:34:48.960 So the batteries will are modeled and are warranted to roughly 70% state of charge. 00:34:49.199 --> 00:34:57.760 So you think for the average person out there who's got an EV or doesn't have an EV, you know, that's you can sort of think of it as 70% of the battery is still good, right? 00:34:58.079 --> 00:35:10.239 So the first or the sort of uh use case that we we also like to explore, which probably has an even better use case before we get to the second life repurposing, is putting it on different applications. 00:35:10.400 --> 00:35:27.280 So for trucks and buses, if you can move, as I said, the school bus runs, they're a lot lighter, and other you know, rail replacement or other shuttle services, charter, whatever, you could take a bus that's can't do its primary maybe city routes because it's down to 70% state of charge, is it eight years? 00:35:27.440 --> 00:35:48.480 You could then move it to a second use or lighter um duty application, maybe get it down to maybe 60%, and then we would take it, we would repurpose it and we would get as much use that as much as we can capacity out of that, and that's enough for us for our battery for what we need for the purposes of you know using it as a diesel generator offset or or supporting the grid. 00:35:48.719 --> 00:35:58.400 But I guess even though we haven't we're not using a lot of those batteries just now, we've modeled it all out and we know how it would work because we know the exact state of charge on the batteries that we're we're taking off right now. 00:35:58.800 --> 00:36:14.239 And um, not sure if there's anything you can share on that, but uh the a lot of the data that I've seen, including some testing done by a renewable energy lab in Canberra, that the degradation rate, of course, is like a warrantied 70% after 10 years. 00:36:14.320 --> 00:36:16.880 That's the classic that you see in the residential market. 00:36:17.199 --> 00:36:22.239 But when they did the testing, a lot of the batteries they tested were actually far above that. 00:36:22.400 --> 00:36:24.239 Yes, particularly with the better brands. 00:36:24.400 --> 00:36:28.079 So the that's like that's like the minimum they'll guarantee. 00:36:28.239 --> 00:36:32.159 But in reality, a lot of batteries might be at 80 or 90% after that 10-year mark. 00:36:32.400 --> 00:36:32.719 100%. 00:36:33.039 --> 00:36:46.639 We're seeing that and the OEMs, uh, sorry, OEMs being the manufacturers of this kit, are starting to get more confidence because they've got more data really to draw, and everything is coming back with a lot more state of health than what they thought it would. 00:36:46.800 --> 00:36:50.960 And that means warranties are being improved, going higher, going longer, getting better. 00:36:51.199 --> 00:36:57.920 We still think the second life battery thing is of use because at some point they still will get to their end of life and you still can use them. 00:36:58.000 --> 00:37:02.079 It just might be in seven years or eight years, it might be now in 10, 12, 15 years. 00:37:02.320 --> 00:37:19.280 Yeah, we're basically hearing that echoed from every corner of the market, whether it's the first Model S buyers who've now been running their EVs for 10 years, saying, you know, we had um Tom from Lucasfeed saying he had his his battery tested in his 10-year-old S, and um it was what was it, something like close to 90. 00:37:19.440 --> 00:37:20.880 It was way above what was expected. 00:37:21.119 --> 00:37:21.280 Yeah. 00:37:21.440 --> 00:37:27.840 We've spoken to some people on the podcast who who run battery health testing companies, and same thing, with a couple of very specific exceptions, yeah. 00:37:28.079 --> 00:37:31.440 The vast majority of batteries are just way outperforming the

expectations. 00:37:31.679 --> 00:37:35.679 Yeah, I think it's great to see because I just think it'll just keep going like that. 00:37:35.760 --> 00:37:40.800 I I think one not caveat, but one thing to note is, and I think one of you said is quality. 00:37:40.880 --> 00:37:45.679 Like if you're going with someone who's you know respectable quality outfit, then that's important. 00:37:45.760 --> 00:37:57.280 I I think that the we see it a lot in the heavy commercial space because probably 95 plus percent of all the batteries coming on buses and trucks are from either BYD or CATL. 00:37:57.440 --> 00:38:01.199 Yeah, and probably it's probably similar across other spaces. 00:38:01.360 --> 00:38:05.840 But if you go for something else that's random and yeah, it might not perform like that. 00:38:05.920 --> 00:38:10.239 So I think yeah, still going for something quality, you've got more chance of getting that extension. 00:38:10.559 --> 00:38:23.920 Given that it's early in the year, um, something that Jeff and I did on our last episode, which was for January, um, with some predictions for for 2026, some trends that you expect to see might be in the vehicle market or in the charging market. 00:38:24.239 --> 00:38:26.320 Have you got anything in mind that you want to want to share? 00:38:26.480 --> 00:38:28.880 Something you think we're gonna see in the next 12 months? 00:38:29.199 --> 00:38:29.599 Yeah, sure. 00:38:29.679 --> 00:38:32.239 Well, I've let out a couple of little snippets of what I think. 00:38:32.400 --> 00:38:34.960 So, you know, specialized heavy vehicles. 00:38:35.039 --> 00:38:37.280 I think you'll see some new ones coming out there. 00:38:37.519 --> 00:38:43.360 I think you're gonna see more charging hub-style models, not drastic amounts, but but some more. 00:38:43.760 --> 00:38:51.119 I think, don't know if it'll be this year, but might just tip into next year, but some more uh stuff happening in the electric ferries. 00:38:51.280 --> 00:38:51.440 Right. 00:38:51.679 --> 00:38:54.800 Definitely New Zealand, but hopefully in Australia a little bit more. 00:38:55.039 --> 00:39:07.440 In terms of charging, I'm pretty sure this year you will we should see like a megawatt charger uh rollout, which is uh you know huge and will be a game changer for certain use cases. 00:39:07.599 --> 00:39:10.079 Obviously, you know, one megawatt is massive. 00:39:10.159 --> 00:39:13.360 You know, I was talking about 120 kilowatts, so it's like you know, eight times the size. 00:39:13.519 --> 00:39:22.320 So, yeah, some really, really large charges coming out, even if it's one or two, if we can evidence that that works, we'll be humongous for the prime movers and and for the heavy vehicles. 00:39:22.559 --> 00:39:31.679 I think you'll see more happening this year, probably in in the mining and ports and that sort of space, there or like right on the horizon, being looking at a lot of stuff. 00:39:31.920 --> 00:39:33.519 Yeah, exciting times ahead. 00:39:33.679 --> 00:39:34.639 Yeah, definitely. 00:39:34.880 --> 00:39:37.119 I think that brings us to the end of our time together. 00:39:37.280 --> 00:39:38.800 Thank you so much, Gareth, for coming in. 00:39:38.880 --> 00:39:42.960 Really appreciated the look into your little corner of the transition and the electrification world. 00:39:43.039 --> 00:39:43.840 So thanks for coming in. 00:39:44.079 --> 00:39:44.960 No, thank you for having us. 00:39:45.039 --> 00:39:45.519 It was great. 00:39:45.599 --> 00:39:46.320 Thanks, Gareth. 00:39:46.559 --> 00:39:47.599 Great to have you on. 00:39:52.079 --> 00:39:53.280 That's it for today. 00:39:53.440 --> 00:39:54.400 Thanks for listening. 00:39:54.480 --> 00:39:57.599 And make sure you share an episode with someone that you think might enjoy it. 00:39:57.760 --> 00:39:59.360 Leave us a review, leave us a comment. 00:39:59.440 --> 00:40:01.280 It really does make a difference for us. 00:40:01.440 --> 00:40:14.159 And if you need a quote for anything related to home electrification, solar, batteries, heat pumps, aircon, and of course EV charging, head to solidchoice.net.au to get instant quotes from pre vetted installers. 00:40:14.559 --> 00:40:16.159 See you next month.