Latest / Clean Power Hour / Solving the Multifamily EV Charging Challenge with Aubrey Gunnels of 3V Infrastructure | EP273

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Solving the Multifamily EV Charging Challenge with Aubrey Gunnels of 3V Infrastructure | EP273 · Clean Power Hour

• 0:50
  Aubrey Gunnels: And it's not and no EV person is sitting here being like 100% of the US fleet is going to be Evie, even if 20% of the EV of the US fleet, so all vehicles on the road are EV.
• 1:02
  Aubrey Gunnels: That is 20% of cars need to be able to have a place to to get fuel, and that is EV charging.
• 1:06
  Aubrey Gunnels: So we think that's really important, and then as we see public programs go away, we really need to prioritize getting private investment in the EV space and to not be scared of the space. The space is certainly still growing, and the underwriting is not simple, but it's certainly achievable.
• 1:28
  Aubrey Gunnels: Are
• 1:30
  intro: you speeding the energy transition here at the Clean Power Hour, our host, Tim Montague, bring you the best in solar, batteries and clean technologies every week. Want to go deeper into decarbonization.
• 1:40
  intro: We do too. We're here to help you understand and command the commercial, residential and utility, solar, wind and storage industries. So let's get to it together. We can speed the energy transition
• 1:56
  Tim Montague: charging infrastructure for electrification of transportation, that is the topic we're taking a deep dive on today. Welcome to the Clean Power Hour. Check out all of our content at cleanpowerhour.com.
• 2:08
  Tim Montague: Please give us a rating and a review on Apple or Spotify and tell a friend about the show. My guest today is Aubrey Gunnels.
• 2:16
  Tim Montague: She is the CEO and founder of 3v infrastructure. Welcome to the show,
• 2:21
  Aubrey Gunnels: right? Happy to hear be here. Tim, this is
• 2:24
  Tim Montague: a unique conversation. I've never really geeked out on infrastructure, on on charging infrastructure, so I'm very happy to bring this. Of course, we solar and storage professionals are also electrification professionals, and charging infrastructure is part and parcel of the work that we do in the CNI solar and storage space. And I have seen the future. Aubrey, I have been to Northern Europe, and EVs are ubiquitous, and the charging infrastructure is ubiquitous.
• 2:57
  Tim Montague: They are 10 years ahead of us.
• 2:57
  Tim Montague: Literally. I was also a model Y owner for a year and a half, and I understand intimately the good, the bad and the ugly of owning an EV and traveling around the Midwest and traveling long distances to the East Coast. And mostly it really worked. But ultimately, range anxiety did kill the model Y for me, because I go to rural parts of the upper Midwest. But Aubrey, I digress. Tell us a little bit about yourself and why you started 3v
• 3:33
  Aubrey Gunnels: definitely. And we hear everything from clients of whether they've had an EV and as you've done so, it's not, it's not the time, but maybe later. And then we have clients that own two EVs per household.
• 3:43
  Aubrey Gunnels: So it really, really changes and depends on people's driving habits. But, but, yeah, so opera gunnels, I'm the founder and co founder and CEO of 3v we are a charge point operator, so a CPO for Level Two charging level two charging for any guests that don't know it's you can charge your card about four to six hours when it's at rest, so similar to how you would charge your phone when you're sleeping or at work, etc. And we own and operate chargers, especially in the multi family spaces where we're focusing now and are really trying to bridge the gap of access to to chargers for people that live in multi family buildings. About 31% of Americans live in multi family buildings. Only about 5% of those buildings have chargers right now, and we also know about 80% of charging happens at home. So as we look at EV adoption and who owns an EV, it's very highly skewed towards single family homeowners. So we're really built out to do so I would say me and my co founder got into the space by one. I was working at a CNI solar fund, and then I was and then my co founder, Ben, was working at a EV charging software company, and we were really focusing in this level two space. And it became very clear that there was just a lack of infrastructure dollars in the space. There's a lot of hardware providers. It's almost a commodity. There's a lot of software vendors, but really there's a big gap, and thinking about level two charging as an infrastructure.
• 5:15
  Aubrey Gunnels: So we're and it functions kind of like infrastructure, as in, it's a long hold asset, it requires construction, etc, but it is consumer driven risk. It is small checks times 1000s of properties, which is a little bit different than other types of infrastructure. Types of infrastructure. So really trying to redefine the market in that sense, yeah,
• 5:38
  Tim Montague: you know the when I, when I got my EV, I installed the level two charger. This is a 50 amp charger that I put in my garage. It was about $500 all in. I hired an electrician. I just put a big 50 amp plug and then plug my Tesla into that. It worked great. But you it does take several hours to charge the vehicle. You don't want to try to charge your EV on level one, if you're traveling any kind of distances, that's just a joke, in my opinion. No bueno. But level two is the real deal, and most people do charge their EVs at home. The average commute in America is, like, 40 miles, I think something like that, right? So it's totally doable, but if you don't own your home, you can't necessarily make an upgrade to the garage or whatever you have access to and install a level two charger. And so that is an impediment for renters or multi family dwellers. As you indicated, 30% of our population, that's a big chunk of our population, so we desperately need more EV infrastructure in a multi family space. What is the basic business model that 3b is chasing and
• 6:57
  Aubrey Gunnels: to and even to piggyback on what you just said, it's it's not that real estate owners haven't tried to tackle this issue. It is to work across most real estate portfolio owners own properties across states, so to install across jurisdictions, to install at scale, to install across a portfolio, requires almost an entire person that's dedicated to that rollout, and the ROI doesn't normally meet that. So we've just seen a lot of struggle across the industry of whether to prioritize it, and how it affects an OI and things of that nature. So that's kind of where we see the value prop.
• 7:33
  Aubrey Gunnels: But what we do is we provide all the capex and all the OPEX, so absolutely no cost to the property. And we the drivers pay for electricity through the charges we install. So say the building, the building blended rate is about like 12 cents, then we'll charge an extra 20 cents on top of that, and that is what goes back to paying down the infrastructure cost there, so that way it's no cost to get into the property, and we'll continue to operate the asset over over the life of a like a 10 year, 12 year contract.
• 8:05
  Tim Montague: And so have you ever done a an analysis of how this plays out for consumers, like the relative cost of charging using this financial model versus if I were to be able to do it in my garage using just the cost of the electricity, right? There's some additional expense here, because presumably the consumer is paying for the infrastructure upgrade as well, right? Yeah, I
• 8:36
  Aubrey Gunnels: would say, compared to single family home, it's, I wouldn't say it's like comparable, because you're paying for the electricity and you paid for the upgrade, etc, when it comes to comparing it to level three charging so like superchargers, um, we definitely hit a lower cost per kW than those sites. And then you also don't have the sunk cost of time of sitting at a supercharger for 45 minutes versus you can just charge it when you park and go up to bed and wake up the next day. Yeah. So there's that. And then I would also say, you know, charger liability is a huge piece of of EV charging. EV charging is notorious for a bad experience. And we think that's because of two things. One, it's purely it comes down to the economics. If no one is incentivized to maintain those chargers, then the charges go down. That's how capitalism works. So there's and so early days, there are a lot of bad deals that were done that the contracts just couldn't be maintained. And then the other piece is we have to conduct continue to invest in maintenance and making sure that they are up and someone that is responsible and economically responsible for them to be to be working. So the so the all to say the consumers find can have more time, like they don't spend as much time at chargers to do so. And then two, it's still more cost effective than to one, definitely drive an ice vehicle, so a combustion engine vehicle.
• 9:58
  Aubrey Gunnels: And then two, compared to just relying on the Supercharger network, yeah,
• 10:04
  Tim Montague: it really adds insult to injury when you're looking for a charger and you finally find one, and then it's dysfunctional for some reason out of commission, and that did happen a few times to me. I was mostly just charging at Teslas and at the say, the Tesla infrastructure seemed pretty reliable, but it was also fairly new, so I don't know how it's aging, but the other thing that I think about around this is, how do you decide, based on the number of units in a building, for example, or a complex what number of chargers you want to install, what is a sweet spot?
• 10:42
  Tim Montague: Yeah, so
• 10:45
  Aubrey Gunnels: we are very data driven when it comes to how many we charge, just because we're investors. We have to that's a huge driver of how many chargers to install, because it is directly correlated to our CapEx. And I would say we know that, you know, the demand in LA is very different than the demand in Charlotte. So we use hyper focused, localized data of current EV registration within a half mile square radius, and then apply growth curves of how we anticipate that penetration and at the address level to be.
• 11:15
  Aubrey Gunnels: And then from there, we have a lot of assumptions around how much, how many kW, what is the KW demand at that at that property, based off of the number of people that live in that building, based off of the number of existing drivers based off of what we see as battery efficiency, what we see as the vehicles miles traveled for this kind of building. So I would say, like, you know, if you live 30 minutes outside the city, you're probably more likely to be a commuter versus if you live in the middle of the city, your vehicles miles traveled is statistically lower. So really taking into account what is the type of demographic at that building, in order to make sure that what we're building meets the need, both from a not to overbuild, but also certainly not to under build,
• 12:03
  Tim Montague: right? And is there some kind of a rule of thumb, though, that okay, if there's 30 units or 100 units in a building, you will try to include 10% of the parking spots with electric, electric charging. Or what is that rule of thumb? The
• 12:23
  Aubrey Gunnels: rule of thumb is like, so location dependent. So I would, but I would say, like we, we, on average, would install, like six to 10, on an average of, like, a 200 unit property. Okay, so, and the reason we do that is one, we are taking inherent risk by building before demand exists. Um, a lot, like the majority of EV drivers, again, live in a single family home, so we are making an upfront investment with the anticipation that EV drivers will live there. Each property is going to have its own story of when that happens. We also know that people buy EVs in the same way that you buy a piece of tech. It's because someone recommends it to you, because a friend like Doug just for it, because a cousin said something.
• 13:09
  Aubrey Gunnels: It's so it's really hyper dependent. And I've talked to many of different investment funds about this, and they've said they've continued, especially across Europe, because, as you stated at the beginning, we're five to 10 years behind. So just trying to find analytic trends of how we can tell where is EV adoption going to happen? And the answer is, it's too impossible to tell, like there's no statistical except for if there's, of course, like policy that's that really resonates.
• 13:39
  Tim Montague: So then I guess let's talk about how you're attacking the market. I would imagine that you're finding big real estate companies that own many assets and trying to do some kind of a master's level service agreement or something like that.
• 13:54
  Aubrey Gunnels: Yeah, we work with large real estate portfolios. So we have two segments, one is like about 50, I would say 50 in the second, and then, like the whale segment, that is over 100 properties in their portfolio.
• 14:08
  Aubrey Gunnels: Versus we have, you know, a list of 500 multi family owners that own an average of 12 properties.
• 14:12
  Aubrey Gunnels: So we work across the gamut, but we also can take a lot of lessons learned from EV charging companies over the last five years, and we know that going door knocking is the ROI on a sales team isn't there, and that's also how you kill a company because of head count.
• 14:31
  Aubrey Gunnels: So really working at the portfolio level, sure we found is how we can achieve it at the multifamily
• 15:30
  Tim Montague: Okay, and here's, here's a geeky question that my listeners will appreciate, though, so is the electrical infrastructure, like the service to the building, a barrier like is, do you have to make service upgrades in the amperage of the service to the building to achieve this? Or is that generally not a problem? It
• 15:53
  Aubrey Gunnels: really depends on the class of property. So, for instance, class C properties, or properties that are built like in the 70s and before, those we have found to not have enough available power.
• 16:01
  Aubrey Gunnels: And that's also but if you add some load sharing software on top, then it kind of depends. I would say most Class A and Class B types properties, there's enough house power to build, especially this first tranche of chargers,
• 16:16
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• 17:20
  Tim Montague: Some are replacing the guts of the panel with with smarter technology that is more dynamic.
• 17:28
  Tim Montague: Is that something that you're also doing, or are you just looking for this sweet spot of, okay, the infrastructure is good, and we're going to add charge point chargers, boom,
• 17:44
  Aubrey Gunnels: yeah. And we work with all kinds of different charging partners, but I would say they they all have load manage, like load management capabilities, and that is so that way they can split a circuit if needed, and things like that. And then I would say, from like a micro grid, adding in a battery and things of that nature, the demand would the data would have to exist in a really meaningful way for us to do that in the first tranche of chart of installation. But say we go back because demand has hit a certain threshold and we need to build more chargers, but there's not available power, then the ROI on on the micro grid like and installing a battery starts to make a little bit more sense. Okay,
• 18:23
  Tim Montague: and what kind of traction Are you getting?
• 18:26
  Aubrey Gunnels: It's it's been interesting. I would say one ever like everyone is interested in providing the best amenity to their to their residents and to stay competitive in the space.
• 18:37
  Aubrey Gunnels: And they're certainly it's being it's very competitive to have chargers at your property, and people do make decisions based off of it. There is a recent survey from Gray star that 27% of renters care if there's an EV charger or not at their properties. So but also our the asset management teams of of these large real estate REITs have a lot going on, and EV charging is not normally in the top five. So it's really moving through the process to to make it a priority, to to really make a compelling case of why this is needs to be addressed today, rather than waiting another year. I would also say we have a number of clients that have tried a rollout process, and it was really burdensome, and have had just like bad experiences trying to make this work across their portfolios, and the ROI is, again, pretty light that they're really looking for an outsourced solution, that it's our sole job is to make sure those charges are working and Providing a reliable amenity.
• 19:43
  Tim Montague: And is your business model to own the charging infrastructure or eventually sell it to the facility owner?
• 19:51
  Aubrey Gunnels: We'll own it over the life of the asset, we'll continue to own them.
• 19:54
  Tim Montague: Got it. So check out 3v infrastructure. Just like it sounds normal, 3vinfrastructure.com. You'll immediately see what we're talking about here. There's a great shot of a parking deck, obviously inside some kind of a high rise building, and you've got a bunch of green painted parking spots with conduit running down the poles the columns in the DAT in the parking structure so it, it looks like it works pretty well.
• 20:25
  Tim Montague: It's, it's, you know, it it folds into the existing infrastructure pretty nicely, in my opinion. Of course, it's a lot of electrical work, but say, La vie, right, that's what we're talking about. And I would imagine that this amenity for consumers, allows them to, you know, charge more or promote the property as a luxury property, perhaps. So what is the response you're getting from the multi family real estate owners?
• 20:59
  Aubrey Gunnels: Um, as far as
• 21:02
  Tim Montague: well. How do they, how do they see this? Do they get this light bulb that for the, you know, for example, that I just had about, well, yeah, this is a nice amenity. People are going to elect, you know, buy EVs, despite the ups and downs right there, there's, there's turbulence in the electrification of transportation market. Companies are coming and going, but there's going to be this long term trend because of the cost of EVs, right? Ultimately, EVs are going to be much more economical to own and operate for consumers and fleet owners, period, if you were moving parts. Works, lower cost of energy. Boom done. Happens, right? You can't stop this transition. It. You can. You can accelerate it by providing incentives. And that's what Northern Europe has done, and maybe some states and cities in the US have done this, but we don't have great incentives. I don't know from your perspective, what you think about the incentives for EV infrastructure, but yeah, how do the real estate owners respond to this? Yeah,
• 22:13
  Aubrey Gunnels: definitely. I can address both. I would say they definitely. Real estate owners try to increase noi, which is basically how much they are providing enterprise value to their to their buildings in order to like that is the real estate market, right? Because they buy and sell a lot and things of that nature to stay competitive in the space. And EV chargers do add to in a line. So it's the availability of the best amenities, and reliable amenities is certainly something they're interested in. They also would never want to lose a potential resident because they didn't have chargers there. And especially if it's an achievable, it's very achievable to install chargers there. So we're definitely getting like they see the need as much as we see the need, and they're very amenable to trying to do a full scale rollout,
• 23:06
  Tim Montague: is there other infrastructure that they're installing in their facilities that's analogous where there's a third party owned infrastructure?
• 23:14
  Aubrey Gunnels: Laundry is kind of the best analogy. I would say, if you have shared laundry service that's completely, normally, completely outsourced, and someone maintains those over time, and it's, you know, full function, that's one of the older ones. And then there's also things like package lockers, that is also kind of similar, because they're owned by an outside party, they get a cut of the profit share and things like that. So what
• 23:39
  Tim Montague: about, what about incentives we, you know, is the IRA juicing this industry,
• 23:45
  Aubrey Gunnels: I would say largely, one, 3v we under at this business, wrote that was that with with turbulence in mind, it's a space that we've seen a lot of players come and go, and that is because and so we are really conservative in how we looked at the business to To get into it. So we are not directly like reliant on on subsidies. We'll take free money all day long. But that is not necessarily what's driving our economics, I would say, from a and I would also the level two space was largely, I don't want to say forgotten, but forgotten.
• 24:21
  Aubrey Gunnels: And the inflation Reduction Act and the infrastructure bill, they it was really around providing reliable public level three supercharging in areas that the private sector wouldn't touch. So those programs are important, but just further makes the case of why private charging is even more important now, as we go through shifts in Washington, and I would say that actually the most meaningful subsidies out there are through utilities. Utilities are very and various utilities around the US, whether it's Excel PG and et cetera, are really trying to make sure that as we build out EV charging infrastructure, it's done in a reliable way that they have some control over, and that's really created more subsidies available in that capacity as well the inflation Reduction Act. What impacts us the most is we care about affordable EVs, and as affordable EVs continue to hit the market that is reliant on batteries, battery factories to continue to come online in the US and really watching out for how these EV factories continue to be built, that some of that is coming from both chips and the inflation Reduction
• 25:33
  Tim Montague: Act. Quite a bit of turbulence in the battery industry too. I just noted that fryer, the Norwegian battery company that was going to build a giga factory in Georgia to make batteries here in the US has rebranded, I think it's something like 3t I can't remember exactly, but they're a solar company now they're not just a battery company. And, yeah, I guess, what is America doing right to make this to ease this transition, and what do we need to do better? Let's
• 26:11
  Aubrey Gunnels: see what. I guess, from the battery side, we like. Battery prices are dropping significantly every year, and that's the main cost of an eV so as we see those drive down, the cost of EVs are going to drive down, I would say what a lot of questions we get are, what does the EV market look like, like under this new administration? And the answer is, it's still up and to the right. The question is, how to the right and how up? And that is really driven by, you know, the US automotive sector is, is very asked, if you could put.
• 26:42
  Aubrey Gunnels: With China. China can create electric vehicles for cheaper than we can create ice vehicles, so combustion engine vehicles.
• 26:50
  Aubrey Gunnels: And if they want to compete on a global scale, they need to continue to their path toward creating the best, the latest and greatest EV models. And every report and narrative right now is very much saying that even like Jim, for instance, has come out very strongly that they're going to continue their EV program in the same like caliber. So it's and it's not, and no EV person is sitting here being like 100% of the US fleet is going to be EV, even if 20% of the EV of the US fleet so all vehicles on the road are EV that is 20% of cars need to be able to have a place to to get fuel, and that is EV charging. So we think that's really important.
• 27:34
  Aubrey Gunnels: And then as we see public programs go away, we really need to prioritize getting private investment in the EV space, and to not be scared of the space.
• 27:45
  Aubrey Gunnels: The space is certainly still growing, and the underwriting is not simple, but it's certainly achievable if, if everyone takes, you know, a finance eye to it. So
• 28:00
  Tim Montague: what else should our listeners know in our last couple of minutes together, Aubrey,
• 28:04
  Aubrey Gunnels: let's see one they should buy an EV, unless, and if they live in a single family and they live in a multi family building, they should absolutely contact their property manager, who should contact their property owner, who should say that they should go talk to 3v I think the more that we can also create demand is, the faster our clients are ready to move. So sure, the more that you know it's asked for, the more it helps us, I guess.
• 28:29
  Aubrey Gunnels: But obviously, I'm just trying to put charges in the ground, and I think the I think we will continue to see a very large shift in available EV chargers in the US, and that will just give consumers more confidence to buy an EV, and the more that we can have reliable information on how to take care of an eV.
• 28:51
  Aubrey Gunnels: And things like when you rent an EV, to have that experience to be even better than I think, or even it's been interesting to even see like Uber is a lot of times the first time people ever ride a Tesla, and that creates more drive in the market, and the more that we can expose people that EVs are really great cars and Vulcan and again, the more that we can drive adoption is really what we're after. But
• 29:19
  Tim Montague: I take a lot of Ubers, and I travel around the country quite a bit. The only state where I see a lot of electric Ubers is California, New York. There's quite a bit now too. California did incentivize EV sales, and they are, I think they're still sunsetting ice engine sales. Are they not
• 29:42
  Aubrey Gunnels: think it's gonna that's gonna be pushed back, but I would say, regardless of incentives, there's gonna be plenty of adoption. So yeah, yeah. So
• 29:54
  Tim Montague: is there when you when, when analysts look at the adoption of EVs, like the sales of EVs versus infrastructure?
• 30:04
  Tim Montague: Are they tracking well enough, or is infrastructure lagging?
• 30:08
  Tim Montague: Infrastructure
• 30:09
  Aubrey Gunnels: is severely lagging, and that's for a variety. Yeah, okay,
• 30:15
  Tim Montague: hence the business opportunity. Yes, anything else?
• 30:20
  Aubrey Gunnels: No, I appreciate you taking the time to talk to me. It's also fine. Your name is Tim. My dad's name is Tim.
• 30:25
  Aubrey Gunnels: Awesome.
• 30:27
  Tim Montague: You know, I love running into other Tims. Well, check out all of our content at cleanpowerhour.com reach out to me on LinkedIn. I love hearing from my listeners. You can also find us at cleanpowerhour.com Give us a rating and review on Apple or Spotify. Follow us on YouTube and Aubrey, how can our listeners find you
• 30:47
  Aubrey Gunnels: LinkedIn, or you can find me on the website?
• 30:52
  Tim Montague: Awesome with that, I will say I'm Tim Montague.
• 30:55
  Tim Montague: Let's grow solar and storage.
• 30:55
  Tim Montague: Thank you so much. Aubrey gunnels, you.