The startup’s model tackles the adoption of electric trucks
El Segundo transportation startup Watt-EV recently used its grant and seed funding with an order for 50 Volvo VNR electric trucks to launch the company’s Truck-as-a-Service model in California.
The TaaS model works by making Class 8 electric trucks accessible and affordable to shippers and carriers at a per-mile rate that includes charging. WattEV chief executive Salim Youssefzadeh said the company’s goal is to make heavy-duty electric trucks available “at almost the same cost as diesel” to small owner-operators.
In addition to buying the electric trucks — relieving trucking companies of that expense — WattEV’s system involves building three truck charging depots in Bakersfield, San Bernardino and near Long Beach.
Drivers start with a truck in a depot, secure a load nearby, deliver the truck load to a given warehouse, then drive the truck back to one of the load depots. There, the driver replaces the low-battery truck with a fully loaded one, ready to take the next delivery.
The company’s flagship depot is its 115-acre location in Bakersfield, which has 100 acres dedicated to solar power generation and, at full scale, would be able to charge 200 trucks a day. The San Bernardino and Long Beach area depots will be smaller than the Bakersfield location and will be operated primarily with electricity from the utility grid, according to Youssefzadeh.
All depots, which should be commissioned by the end of this year, have chargers that will provide Volvo trucks with an 80% charge in 90 minutes. WattEV plans to expand its depots as its public charging network grows, eventually offering better charging capabilities that will speed up charging times.
“Volvo Trucks applauds WattEV’s unique approach to accelerating fleet electrification through its TaaS model, which aims to remove potential barriers to adoption so fleets of all sizes can have access to class-leading electric trucks. 8 and make local and regional deliveries zero tailpipe emissions,” said Peter Voorhoeve, president of Volvo Trucks North America, in a statement.
Large electric trucks are not without significant investment. Volvo trucks ordered by Youssefzadeh’s company cost around $500,000 each, excluding taxes and fees, he said, adding that Class 8 diesel trucks cost around $150,000.
“Truck financing is going to be a lot more (than diesel) because those assets are a lot more expensive,” Youssefzadeh said. “We expect insurance to decline over the long term. With maintenance, we expect this to decrease as well. But the cost of power will be much lower than diesel, especially now that diesel prices are rising. »
WattEV can lower the price of access to expensive electric trucks for shippers and carriers using its grant funds and tax credits, as well as its TaaS model. The company announced in August last year that it had raised $6 million in seed funding led by Canon Equity and received a $5 million grant from the California Energy Commission. The company also received state incentives to reduce the cost of purchasing the 50 Volvo trucks it ordered. WattEV has also applied for additional grants for the rest of its sites.
WattEV’s long-term plan is to deploy 12,000 electric heavy-duty trucks on California roads by 2030.
“We saw this as an opportunity and as a challenge to see how we can take these trucks and make them more affordable and accessible to users at a cost almost equal to diesel,” Youssefzadeh said, noting that the company will actively work to develop the model as it is put into action this year.
The company is betting heavily on increased adoption of electric vehicles in California, a state that has implemented several emissions awareness laws and encouraged the use of electric vehicles. For example, the state aims to have five million zero-emission vehicles on the road by 2030 and 250,000 electric vehicle charging stations by 2025, according to a state executive order.
What will be interesting to watch, according to Amir Gharehgozli, associate professor at California State University – David Nazarian College of Business and Economics in Northridge, is how well the startup will integrate with other states if it can expand its infrastructure.
“The bet taken is a very realistic bet and they have to think about it. Maybe (it could work) in California, but in other parts of the country it will be more difficult, like in Texas or in the Midwest,” Gharehgozli said.
Texas, like California, offers rebates for owning electric vehicles but ranks poorly on a transportation electrification scorecard released by the American Council for an Energy-Efficient Economy last year. Texas is ranked 27th out of 29 in the scorecard, indicating that the state has taken minimal steps to prepare infrastructure to support more electric vehicles.
Gharehgozli added that WattEV will need to keep an eye on ensuring a return on investment on the trucks they purchase through consistent use and maintenance. The company has already reserved 50 Tesla Semis in addition to its Volvo order.
Additionally, WattEV plans to operate its own fleet of 50 heavy-duty electric trucks by the end of this year, deploying it under contract with multiple Southern California fleet customers and owner-operators. Some of the trucks will initially be deployed under WattEV Transport, the company’s own transport company.