The Exchanges

Q talked with Neha about Terawatt's audacious plans for heavy-duty electric vehicles and her outlook for the industry. I started by asking her about the passenger vehicle side of the business because the LAX project was Terawatt's first full-build charging site and a major proof point for the company. So you started off near LAX. Can you talk a little bit, first of all, about why you chose that particular site?

A Yeah, so, you know, rideshare autonomous vehicles has always been a focus for us from the beginning, and a huge number of rideshare rides are initiated from airports. Um, it's also a location that's near a major stadium and a lot of other good venues that would require rideshare to be part of that ecosystem. So, uh, the location just made sense, uh, from density of demand. Uh, it also was, um, you know, a site that was You know, for sale. Oftentimes, we might be excited about a specific geography or, you know, geo-fenced area, but there may not be any flat lots or open lots or undeveloped lots to go and work with. So this was something that allowed us to engage in this area, and it was the right size for the application we were trying to put in, which was what ended up being about 30 chargers focused on passenger vehicles, um, with enough space for, uh, You know, driver's lounge, and, uh, you know, all the space for all of the electrical equipment, chargers, everything else that we needed. So, uh, the last piece that is always so important, and it, I'm making it sound like an afterthought, but it really is the most critical thing, and the thing that we almost always think about first, once we identify a location, is it had power. So, it had five megawatts of power that was available from day one. Uh, we just had to, uh, start construction on our site, and the utility had to do …

AI assessment note: “a huge number of rideshare rides are initiated from airports... it had five megawatts of power”

Q this is very cool, and it sounds like tons and tons of lessons learned from this first site that then launched you into building your second site at the Port of Long Beach. So can you talk a little bit about how that project got started, at which point you started thinking about, you know, doing this particular project, working into the heavy-duty vehicle space? How did that all begin?

A So it's interesting, you know, our vision for the company really from the very beginning was focused on being able to electrify, uh, the heavy freight industry. And so, um, the, the gleam in our eye was this segment. You know, we started engaging, uh, and look, the search for sites right when we started this business, you know, in early 21. Heavy duty fleets tend to focus on locations that are near ports, in warehouse hubs, near intermodals. And so the port of LA Long Beach was a location where There already is an intense push for electrification. There's a green lane at the port, so if you are in a zero-emission vehicle, you actually can get into the port faster with less wait time. Time is money for these guys, and so there's some significant upside for them to be able to do that. In Southern California, you also have something called the wear rules, where non-zero-emission vehicles going in and out of warehouse hubs can start to incur fines for those warehouses, and so there is a push in the area for electrification, with the port kind of being Ground Zero, the nexus of a lot of those efforts. And so finding a site near the port was kind of our first order of business when we started the, um, you know, started the company. And so it took us a while to find an ideal site. And when we did, it was pretty expensive. Um, you know, it was probably going to be the biggest single re…

AI assessment note: “our vision for the company really from the very beginning was focused on being able”

Q just with these Bob tail sort of front end of the trucks, but really a fully loaded truck that actually has a trailer behind it. So were you already sure at that point that you wanted to offer that kind of charging capability, or were you really thinking about, you know, what would the site layout look like? What were some of the trade-offs around these different options for charging?

A So again, there's very few sites that have this scale of power and size that would allow that many chargers in one location and that many trucks to charge in one location. So we're kind of, you know, I won't say, you know, making it up, but we were doing a lot of kind of product, uh, assessment and design to understand what would customers need. And if you look at a lot of the sites that are out there today, and even sites that, uh, customers have behind their fence, when they have the charging, it's usually just for a bobtail stall. Um, so this was a little bit of a tug of war between the finance team and the product team. Uh, the product team came from places that had worked with semi-trucks before. And so they really were pushing for those pull through stalls, saying, hey, if you look at the traffic flow patterns, they're going into the port or out of the port with the trailer attached to their tractor. Um, it's gonna be a really big lift for them to have to find a place to put the track, you know, the trailer, uh, detach it, come in and charge, or, you know, just be, uh, in a position where they don't have the trailer for whatever reason, they're between loads, to come back to the site, Charge and then go back and get their trailer. Just a lot of work. And so wouldn't be really a great customer experience if they had to do that. The, the tussle with the finance team was, we…

AI assessment note: “this was a little bit of a tug of war between the finance team”

Q Okay. Well, let's talk a little bit about the development for the site. Can you walk us through some of the things that you had to do around permitting, site preparation, all that sort of stuff? What did it look like to get ready to build it?

A Yeah. And so this is something that's always fun when you're starting a new industry. Um, I came from data centers and we had this whole pattern of recognition for data centers too. When it was early days, we'd go into new jurisdictions and people would say, I don't even know what that is. Certainly, uh, that everyone knows what that is in the world now, but for EV charging, Um, there's oftentimes not any code available in the planning code for, ah, how do you permit, how do you entitle a EV charging hub? So, we worked very closely with the City of Englewood, who was a fan, who is a fantastic host for us here in this site, to understand what their existing code was, and how we might fit into it, and had to go through a whole process, ah, with the City Council, the Planning Council, ah, to have them understand what the project was, what kind of benefits it would bring to the community, Um, and then they had to actually put new language in their code to allow the entitlement of this, and so that's something that we find in many new, you know, HJs or authorities having jurisdiction that we enter. Um, they may have never seen this before, so we have the benefit of having done it now. We could hold up this template, but this was the first time, and so we did have to work through that process with the city. Again, they were, you know, super, super collaborative, and so we were able t…

AI assessment note: “we worked very closely with the City of Englewood... had to actually put new language”

Q the show is the question around, do I use an engineering procurement and construction firm to build something, or do I do it myself? And some really interesting impacts flow from those decisions, particularly when you're building things that are effectively first of a kind. So can you talk a little bit about how you were thinking about managing the construction on this first site and what you ultimately decided?

A So for this first site, we did work with an EPC firm, and I think we learned a lot about working with an EPC firm. One thing that we learned is, you know, the civil aspect of our sites is very heavy. If you look at a site, it actually, I think sometimes people look and they're like, oh, that's interesting. It's like, you know, 30 chargers, they're nice and pretty, standing on the ground, but You don't see what's happening below ground, which is massive duck banks. We oftentimes put in extra capacity. So when the charger power might go up, we would have the capability to actually make that change over pretty quickly. Uh, so future proofing, uh, underground. And so there's a lot of ha of stuff happening below the grade. And, uh, I think that's one thing that we learned and that EPC, if you think about it, um, the civil trade, and I'm actually a civil engineer as very local. So having that local expertise, Is very, very critical for the types of things we build because, you know, the type of soil that you're dealing with, um, the codes that are, you know, related to how much rainfall, you know, ends up in an area, et cetera, is oftentimes really contingent upon local expertise to understand those characteristics and how the local, uh, you know, planning commissions and engineering, um, leaders in those planning commissions will think about, uh, our construction. So something that …

AI assessment note: “So for this first site, we did work with an EPC firm”

Q Let's talk about those customers for a sec, because they're obviously very key to the equation here. So can you say a bit about what your customer interactions were like, particularly for this project? When did you start engaging them to understand what they might want, and what sort of contracts they might be willing to sign up for, and when, and how did those, how did those negotiations go?

A Yeah, so we started engaging customers the minute we had the site. It is really hard to have a conversation with a customer if they can't even imagine the location. So Generally speaking, we don't start conversations until we have the specific site in mind, and even a layout. That said, what's interesting is it takes us, call it, 18 months to 24 months to find a site, get it entitled, permitted, constructed, and then operational. Um, most vehicles make vehicle purchasing decisions at the most a year in advance, sometimes six months in advance, so they may decide that they want to buy a few EVs and You know, have those six months later. Um, charging doesn't come that quick. So, for this first one, it was a little bit of lining up those timelines. And so, um, one thing that we did see is we got closer and closer to project completion, a lot more engagement from these fleets, because they could actually come to the site and see, oh, you've got this thing paved, and this is what the flow looks like, and it's really going to come to fruition. I think there is, in any industry that's new and nascent, a lot of discussion of, we could build this, or we could build that by, But by having actually done it, um, and it's in-site and operational, we actually saw, even the week before we launched, you know, we were doing, uh, site tours with lots of, lots of customers, and that turnaround fr…

AI assessment note: “we started engaging customers the minute we had the site.”

Q thinking about your next site, and the one after that, and the one after that, and a whole fleet of sites to come, particularly on the I-Tank Corridor in California, but maybe elsewhere too. So tell us about what comes next. What is the next site that's going to come online? How are you thinking about your future build out? How many sites are you working on all at once?

A Yeah, so for this, this definitely is the first of a couple of projects. Um, we have our next site that will come online in the summertime that will be in the Inland Empire, which is after a vehicle goes to the port, it generally goes to the Inland Empire, uh, which is the, you know, giant warehouse district for the, uh, the port, uh, here in California. And so we'll have a second site there in a few months. And it really is thinking about this as a network, right? These are moving assets, I mentioned that top off charge that could be really beneficial to higher utilization of these pretty expensive vehicles for now. Um, and so really excited that that will allow a lot more operational flexibility for EV fleets to move freight around the area. And so we call it a lane in the freight industry, so the lane between the port and the Inland Empire is a very important lane, and having charging on both ends Just allows a lot more confidence in electrification. Um, having the capability to maybe have a contract that allows access to both sides, which we're seeing the demand for now, um, is also really freeing and exciting for customers. If they had to do that on their own, they would have to figure out a location that they had to find access to near the port and one near the Inland Empire. And oftentimes these are drayage companies where their main operations may be near the port, But …

AI assessment note: “our next site that will come online in the summertime that will be in the Inland Empire”

Q Sure. Okay. Well, and then let's talk for a second about your hardware supplies. So there are a lot of different charging companies that supply hardware for passenger vehicle charging. So how did you think about that? How did you select your hardware provider, and is it kind of a single provider that you always work with, or how do you think about your, your supply chain here?

A Yeah, so it's interesting you say supply chain because there's so many components, not just the chargers. For this site, for the chargers, you know, we wanted to make sure that we had a partner that was going to be working with us to maintain that high uptime, um, and so we worked with that partner really closely to make sure that, you know, any kind of visibility software we were building was going to be very compatible with their chargers. Um, that's a level of integration that's generally not there. Generally, there's probably, you know, Call it four to eight would be a large, large installation of chargers in one location. Um, this is a much larger deployment that I think most charger companies are used to doing in one location. So the concept was a little bit different for them as well, I believe. And so working really closely with them to make sure that our software worked with their hardware, um, that we were able to do what we needed to do to have the remote, uh, network operating center, have the visibility they needed. So there was a lot of work up Front to make sure. And again, we're also deploying our software for the first time. So a lot of work to make sure that there was a level of collaboration. So when we look for hardware providers, obviously the hardware has to work. It has to be high quality, but the real table stakes for us is collaboration. And so ensuring…

AI assessment note: “when we look for hardware providers, obviously the hardware has to work... real table stakes for us is collaboration”

Q freeway counting trucks at various points to influence how this decision went. And can you say a little bit about how that felt to kind of finally make a decision on this site? Because this was a pretty huge moment for the company to ultimately make this down selection and put, as you put it, like a fair amount of money on the line to make this site acquisition happen.

A I mean, the location has to be there, and that's why I talked about the Venn diagram, so we got comfortable with the location. This site also had something really incredible where you don't find this in many locations, which is seven megawatts of power available from day one. So that amount of power allowed us to do a lot of great things with this site. It was, you know, a corner lot. It had the right dimensions. It had a lot of space. So the site characteristics were great as well. You know, we had started to build these other sites, and so we kind of had an idea of what that process is for entitlements. Um, so kind of everything started to tick all the boxes, and that got us comfortable with it, but ultimately we, uh, got super excited, actually, not just comfortable, excited about this location, um, based on everything I just said, and we're, um, excited to get this, um, into our portfolio and under construction.

AI assessment note: “got super excited, actually, not just comfortable, excited about this location”