The Exchanges

Q Let's start here. We're going to talk about VitaX, which is a term people throw around to mean a bunch of different things. You actually have the, the term in your title, uh, VitaX is in your title at GM. So what does it mean to you?

A Yeah, it's a, it's a good question. Um, it, it can mean different things to different folks. Um, for us, V to X is really, uh, the business associated with, uh, what you can do with your car when it's plugged in, um, and the associated technologies and user experience. Um, a lot of folks, um, that are just poking around in this space can get confused about, uh, V to X, uh, on the electricity side versus V to X for the communication side, um, for For a vehicle, the vehicle communications, or a vehicle, the streetlight communications, that's also V to X. Um, but this is just on the energy side, just when it's plugged in, just when it's not moving.

AI assessment note: “for us, V to X is really, uh, the business associated with”

Q the power work sites, or whatever, like, these are all, these are all new, but we'll focus on the, the three we talked about, starting with the one that is, is most straightforward, or at least most, uh, immediate, which is the V-I-G managed charging world. So, uh, How do you think about that, that world as it stands today in the sort of early days of EV adoption here?

A Yeah, I, I think all three of those different categories are, you know, are still relatively early days. In the, in the V-I-G category, we actually have a half dozen programs in place right now, um, where we've partnered with utilities, and we're using these vehicles that are already in the field in customers' hands, um, and we're helping them, uh, use the vehicles to manage the load on the grid. Um, the way we do that is we get the, the vehicle owners to pre-agree, um, Um, on a compensated basis to participate in these programs, and then when the utilities have a grid event, um, either on the spot or planned in a day or two in advance, we'll send a note to the vehicle owners, um, typically through the, the My Brand app, so the My Chevy or the My Buick app or whatever, the stuff they use every day, saying, hey, do you mind if we, if we delay your charging tomorrow at two p.m.? Um, and that's, Part of the program you've agreed to participate in. If they can, great. If they can't, they can always cancel that particular event. Um, but the critical thing here is that this is driving one of the most important parts of this technology, which is the UI and the UX that creates a, a, a reasonable expectation and a comfort for participating in these programs, um, on the part of the customer. That's, that's an important hurdle to get over because this is new stuff for people and it takes …

AI assessment note: “In the, in the V-I-G category, we actually have a half dozen programs in place”

Q What about the, I mean, the other, uh, area of skepticism historically has been, if you're going to discharge your vehicle battery into the grid, are you going to degrade the battery? So are you going to have a shorter lifetime on the battery? And, or are you going to void the warranty on the battery? And those have been fairly significant. Areas of hesitation, I think.

A Yeah, there are big areas of hesitation, and, and we've looked a lot at that, and I think that the consensus is that, um, first of all, the batteries are all getting better, and also people's understanding of how these V to G programs are going to work is also getting much more sophisticated, so a lot of that early analysis was based on, um, batteries with less, um, with less resilient life cycles, but more importantly, they were based on, Uh, largely on calculations that, that a V to G program participation meant you were going to be slamming this thing a hundred percent up and down and fully discharging and charging twice a day. That's just not how that, this is not how it's going to work. I mean, these, you know, this is the value of these batteries is going to be more in the power than in the energy, and it's going to be more in the capacity than in the KWH, right? So You're gonna, you're, you're gonna have, the value is that these things are gonna be available and, you know, maybe sometimes used for a little bit of peak shaving, but not for gunning the whole thing up and down in most cases. Um, now, in some cases, that might be, that might be what's going on if you're in a really stressed part of the grid. Um, but we'll be able to track that and, and we'll know way ahead of time whether or not the, the charging activity is remotely at risk for Impinging on the, the warrant…

AI assessment note: “we'll know way ahead of time whether or not the, the charging activity is remotely at risk”

Q Yeah, exactly. Um, talk a little bit more about the hardware requirements. I mean, that is one difference. Well, I guess on both sides, like what, from a technology standpoint, what is required in order to do managed charging and what is required in order to do V to G? Cause they're sort of different.

A Yeah, so, so for managed charging, all you need to do is be able to tell, you need to be able to stop the charging, and so you could do that through the, the charging equipment, or you could do telematics through the vehicle, um, and depending on who you're talking to in the industry, you know, one is the perfect answer, and the other, or the other is the perfect answer. Um, I think our perspective is, is you get the most flexibility if you can control it on the car, because the car is going to go different places, and you could, you know, one, one point of connection gives you, V one G capabilities anywhere you go. Um, so, so technically V one G is, is, is pretty simple on that front. With V to G you have, um, you've got, now you've got power flowing, uh, backwards into a source that might otherwise normally just be, you know, flowing energy out. So you, so you need to have that shut off capability and you need to have a, a system which is engineered to be able to allow Bi-directional power flow, at least at that point of interconnection. Um, so, uh, so there is additional complexity there. Um, one of the things that we're seeing is that, is that the places where there's a strongest interest for V to G, you're already going through a process where maybe you're adding some additional storage, um, at the building, um, and oftentimes being paired with solar, which really gives yo…

AI assessment note: “a system which is engineered to be able to allow Bi-directional power flow”

Q somebody is sort of in the background trying to figure out at any given time what I should be doing with that battery if it's plugged in. How do you think about the, like, ecosystem around that, ultimately? What is the role that, like, OEMs like GM should play? Who else needs to be in that ecosystem? Like, where do we, where do we land from a market structure perspective?

A Yeah, that's a, that's a great question. Um, this is still a very early market. Um, you know, there's a lot of folks out there that have developed a big name for it, but the, the space is just gonna grow and grow, and there's a lot of folks that want a piece of it. Um, you've got competitors ranging from, you know, the solar companies wanna get more of a piece, the, you know, the generacs of the world, they're like, wait, we're the storage people, and so everything should be coming through us. You got, you know, Google and Amazon, Who are out there trying to say, like, wait a minute, we're the home communications interface people, so all those devices really need to be coming through Siri or Alexa or whatever else. Um, and then you've got, you know, umpteen home energy management standalone independent device companies. So, um, I think it's, I think it's really, uh, an outstanding question as to, as to what that final structure looks like. But I think the reason that there's so much push for this is I, I don't think That every home is going to have five or six home energy management apps. You're just not going to do it. You're not going to, you're not going to sell, you know, availability on your refrigerator's capacity to one utility and then have, you know, your CCA take the capacity on the, on the, and on your vehicle and all those things have to talk to each other and be ma…

AI assessment note: “there's going to be a lot of participants and not that many interfaces”

Q home with sufficient capacity in their battery to charge? I assume the way that you get around that is in aggregate. Right, and you just assume that, like, across a, a large enough aggregation of vehicles, some of them will be there, but like, what, how much of a, how much do we still have to prove in terms of being able to quantify the capacity value of these batteries?

A Yeah, if, if you look at statistically how reliable the, any given vehicle is going to be, any given vehicle, you can't count on it at all. Um, but, You know, we're gonna be putting millions of vehicles out in the field, and so are other companies, um, and it doesn't take too long before, you know, that's gigawatts of power, and it doesn't take too long before you'll, you'll strike this relatively functional balance of real capacity and real customer response time, so you'll be able to know what it is. I mean, a coal plant is what, like, I don't know, 80, 90% uptime and reliability, if you call on it in a certain, certain time zone. Well, if you, if you've got a million vehicles, and you've got a track record on how those vehicles perform over the last 20 events, um, it's kind of like, kind of like thermostats. You know, we, I think probably 10 years ago, people were saying thermostats just foundationally are not dispatchable resources, and now we know that, well, if you have a million thermostats and you've done it 20 times, then actually it's more dispatchable than a, than a discrete peaking resource. And I think you're gonna find that with, with vehicles as well. It's gonna be very fungible, it's gonna be very predictable, we're gonna know exactly where they are in the grid, um, and people say like, well, they're gonna move around, jeez. Yeah, they're gonna move around, and …

AI assessment note: “if you've got a million vehicles, and you've got a track record”

Q of that V to G as a market? Like V, V one G there's, you know, you said you've got Half a dozen programs around the country. I mean, there, there are dozens of them out there. It's happening. Uh, often the times they're pilot programs and so on, but it, but it's pretty widespread, at least across the U S. Uh, where, where are we with V to G?

A Um, so there, there's, there've been some pilots going on with V to G. We've demonstrated our vehicles, um, in V to G mode. Uh, we don't have any programs going with utilities for V to G mode, but I think the expectation in the industry is that, is that what happens is, uh, These existing programs with utilities just roll right into V to G programs. And so, uh, you know, there are, there are additional hardware requirements, and so you've got to have that commensurate additional economic benefit. Um, and partly for that reason, I think you're going to see a geographic distribution of these programs that is, that is energy market driven. You know, when, when you look at the economic value of V one G or a V two G vehicle, um, it's a, it's a function of the energy prices and the volatility in a given market. So high renewables and hence high volatility markets are going to be the places where you're going to see not just V one G, but V two G. Um, and then you're also going to see spiky activity in states where they incentivize this ahead of other states. I mean, you, you've been watching this field for, um, As long as anybody, and, you know, all of a sudden, some state comes out of nowhere, and all of a sudden, they're the hotspot for a given technology. We'll see that happening here as well.

AI assessment note: “there've been some pilots going on with V to G. We've demonstrated our vehicles”

Q And so the promise of V to H or whatever we want to call it is why do you need the stationary battery? You've got a much bigger battery in your vehicle. If you're willing to Give up on some range, which we should probably talk about, then in the event of an outage, use your vehicle to power the home. How high a priority is that for you guys?

A So it's a really high priority for us to be able to deliver a full home solution for our vehicle customers. Um, and that is what we're going to be rolling out, um, with the Silverado is you'll be able to pick up, uh, uh, not just the storage, but all the additional charging infrastructure, but also solar, uh, Um, through our SunPower partnership. Um, and so you'll be able to get a full home ecosystem, um, with the vehicle. Um, and I think that's really important for, for folks. I think the, the, the number of times people use V to H is going to be low. The amount of emotional equity that they put in the comfort of having a home that's resilient and, um, You know, for some people it matters also if it's renewably powered, but it's amazing how much, uh, zeitgeist there is around vehicles powering your home and that sort of providing this dramatic enhancement to resilient for resilience for the homeowner. Um, and it's, it's, it's real, like the, the number of outages we have around the country, and you guys have done a lot of segments on this round, you know, the aging grid, um, Um, now with, you know, a lot more, uh, volatile resources on it, more climate change, there's just gonna be more outages. Um, and I think, you know, everyone going out and getting a generator is not the solution. This is gonna be a very compelling solution, and it, and it sort of matches the, the needs of…

AI assessment note: “So it's a really high priority for us to be able to deliver”

Q In your mind, ultimately, does it displace stationary batteries for, Used for resilience? Like, is there any reason why you'd still want or need a, a Powerwall, or whatever it might be, if you've got five times the capacity in your vehicle that you can use?

A Yeah, people still want to be able to drive their car. In the, you know, when, when the zombie apocalypse hits or a hurricane or something else, you still gotta go out and buy bread or, you know, do what you gotta do. And it's, it's not, it's not ideal for the, it's not ideal that, that, you know, your refrigerator turns off when someone, you know, drives down to get new sandbags or whatever for the, for the home. Um, but I think also the, the other benefit of, of the battery is that when the, when the vehicle isn't there, Your battery is earning its salary by being this load management asset and doing other grid balancing stuff. And if you've got solar, then, um, I mean, you're aware of all the, all the different legal challenges coming up to some of the solar pricing structures around the country. Those actually enhance the economic value of batteries. So, so the, the, the battery installation is, is really an important sort of workhorse for the home energy management ecosystem. And as You know, more and more municipalities move towards electrification mandates. That just becomes even more critical. Um, so I think economics are, are generally moving very powerfully in favor of home batteries with or without V to G. And again, the combination of those tombs is, those two is particularly compelling.

AI assessment note: “Yeah, people still want to be able to drive their car.”

Q actually have less, uh, charge in the battery until we recharge it. What do we know about compensation requirements for V-IIG and, and is there enough juice there? Like, is the value to the grid sufficient? To pay for whatever that compensation is going to be required to the customer, plus whatever margin, you know, the intermediary, be it GM or somebody else, is going to command in the middle.

A Yeah, this, this is one of my, my favorite, um, Thinking points around, around V to G, which is that a lot of people think like, well, okay, there's, there's X value in a certain vehicle or a certain market of vehicles for V one G. And if you can reverse the charge, well, then it's twice as, it's twice as valuable, but it's actually not twice as valuable. It's much more, it's much more than twice as valuable. If you think about V one G value, it's only, it's only a negawatt capacity if the vehicle is not charged. And a lot of times what happens, people bring their vehicle someplace, they plug it in, and it's charged, and so you've got, you've got basically negawatt capacity for as long as it's sitting there either charging or maybe about to be charging. But if you have V to G, then it's basically, it's got capacity in some form available for the entire time that it's plugged in, because most of the time you'll be able to take a little bit of power out, And you can also defer from a potential charge happening. And so, if you think about, there's maybe, you know, for V-I-G, there's millions of cars out there, a very large percentage of which are not useful to the grid at all, because they're already charged. So, so it's not just double, it's like, and, and the math can be done several ways, but it's really three or four times as valuable for a given, for a given vehicle. Um, so i…

AI assessment note: “it's really three or four times as valuable for a given vehicle”

Q to introduce this to customers, how much to make it mandatory versus optional, and then how to compensate them for it. And I'm curious in the early days what, what you're seeing in terms of what it takes to get high adoption from customers. How much do we have to pay them? You know, are there clever things being done in terms of how to compensate? Like, what works here?

A Yeah, I think, I think there's, there's a lot of clever stuff being done in the space just because none of it's been done before, and everyone's just kind of trying to figure it out on the fly. You know, the biggest problem at this point in the market's development is just getting people to understand what the heck you're doing and to get them comfortable that you're not somehow hijacking their car or gonna leave them with their vehicle drained sitting as a doorstop in their, in their driveway. Um, and so there's a lot of education that goes into just getting people comfortable with it. Um, the compensation side is interesting because, um, on one hand, People are just tickled at the very idea of getting paid to provide the option for this charging curtailment to happen. Um, but also it's a, it's a particular vehicle owner that's, that's available to participate in these programs we're running because it's all Bolt owners at this point for us. Um, and the, the demographic of people buying Bolts is very different than, than the folks who are going to be buying the first Silverados coming out, first EV Silverados coming out later this year. Um, so So you have educational requirements that are just not going to be relevant, you know, three or four years from now. And, and we haven't really tested the economics of what's going to be compelling for folks going forward. Um, but I also…

AI assessment note: “we haven't really tested the economics of what's going to be compelling”

Q uh, I guess are a little less proven at this point. So I think in, for that reason, in part, more interesting to talk about. Um, you alluded to the, the trade-offs with V-IIG, but let's just talk about, like, what, what have been the hesitations historically about V-IIG? There's been a lot of skepticism about it, I think, that seems to be morphing a little bit in real time.

A Yeah, there's a bunch of things. One is, one is just the, the, the public perception about the public perception, and are people going to be willing to let you do this? Um, I kind of put that in the, in the same category as range anxiety. I think technology is solving that problem as kind of a Y two K thing, like just time will deal with that and people will be less worried about it. Um, but I think also that people are, um, people are willing to, um, Um, try things when they see that it's in their financial benefit to do so, and they're really going to be, um, jumping on top of this because it's going to make sense for them.

AI assessment note: “One is just the, the, the public perception, and are people going to be willing”