Odd Lots - Ex-Logger Aims to Beat Elon Musk in Electric Trucks

Episode Date: January 16, 2023

While electric vehicle use is growing rapidly, the internal combustion engine remains completely dominant in the world of heavy trucks. At some point in the future, Tesla has a plan to commercialize an electric semi, but nobody really knows when. Meanwhile, other entities are looking to compete in the world of industrial vehicles. Chace Barber is a former trucker in the logging industry, which has some very different characteristics than the type of freight trucking you typically see on a highway. When you're driving over the Rocky Mountains, without easy proximity to mechanics, tow trucks or service stations, you need power and reliability. His company, Edison Motors, is building its own trucks with a hybrid diesel-electric approach that it sees as a better path forward. On this episode, we discuss the challenges of hauling logs, as well as how it's possible for a small entity to get in the game of building such large industrial equipment.See omnystudio.com/listener for privacy information.

Thanks for listening to Odd Lots. Follow the show on Amazon Music for more future episodes or just ask Alexa, play the podcast, Odd Lots on Amazon Music. Hello and welcome to another episode of the Odd Lots podcast. I'm Joe Wisenthall. And I'm Tracy Allaway. Tracy, have you been following Elon's... You're going to have to be more specific. You know, I think he kind of has this reputation and it's kind of worked out for a while of like promising things. that maybe take a while to materialize. Like eventually they come around, whether it's Twitter,

it's going to be like this like super app and he's going to get rid of all the bots. Did he get rid of all the bots, Trace? No, absolutely. If anything, I swear there are more than ever. Yeah, it feels like that. Under every tweet now, there's basically someone shilling Bitcoin, I think. Yeah.

And then at Tesla, and again, incredible success story, but like self-driving cars, I think that's been promised for a while. In some form another, it has inhabited. and one of the things that's somewhere on the roadmap and no one really knows when is there's going to be an electric truck. Yeah. So I know various companies have talked about doing this.

And I think there, isn't there a pickup, an electric pickup truck? Yeah, there's a few. The electric pickup truck, you know, there's the Ford Lightning. And so that's started to go. But, you know, obviously we talk a lot about freight on this podcast. And I think there's a long way until we get any sort of. of like electrification of a lot of vehicles. I mean, that's my perception of it, which is when people think of electric vehicles,

it's usually, you know, sort of like basic sedan kind of thing, maybe an SUV. The trucks are sort of further down the line. And then when it comes to actual long haul trucks, I hardly ever hear anyone talk about it. You hear a lot, when people talk about technology in trucking, it tends to be autonomous driving. Yeah. doesn't necessarily seem to be electric trucks themselves. Yeah, and of course, you know, there's this whole infrastructure, right,

associated with trucking, you know, the truck stops, et cetera. You have these big fleets. They make purchase commitments, et cetera. So even if the technology were there somehow, and I don't really know if it is, it seems like it's going to be a long way until we get, you know, an electrified trucking fleet, if ever. And so while, you know, obviously Tesla at some point wants to plan that, there are other entities that want that market as well because it's going to be really big.

Right. And the other thing that we've discussed on the show is the difficulty of rolling out the actual, you know, grid needs for electric vehicles. And I can imagine with long haul trucks, that would be even more difficult and potentially extreme, given that a lot of trucks go to, you know, places far off in the wilderness, you know, think of things like logging trucks. Yes. And so, you know, there are different types of commercial trucking. And so, you know, you think of the highway and the trucks you see on the highway. But, you know, it's a very different when there's like a truck that's like going up the side of a steep and icy, snowy mountain and getting logs and going back down, different physical demands on the truck itself, given different physical demands on the driver. Anyway, we're kind of going to merge these two topics, like different types of trucks, what can be electrified, why?

Try to understand a little bit more about the commercial trucking. infrastructure and not just the highway vehicles that we're going to do logging we're going to do electric logging truck you know what i have an interest in logging now because a tree fell down in my backyard a big tree a couple weeks ago oh and i'm trying to figure out how to move it and once i move it i too will be a logger well this is perfect because we have the perfect guess who could probably tell you all about moving your log off of your property. We're going to be speaking with Chase Barber, who is the CEO of Edison Motors. It's a small startup aiming to electrify the trucking market. And he was also a logger. He drove trucks that moved logs. And so he's

familiar with that world, trucker, logger, electric vehicle entrepreneur. Chase Barber, thank you so much for coming on Oddlott. Oh, you betcha. Thanks for having me on here. Quite a combo there, there are not, I feel like there are not many vehicle entrepreneurs who pivoted from having driven vehicles themselves. I don't, professionally, is that, it seems rare to me. It was really common back in the 1920s, 100 years ago, super common. Nowadays, it is a little bit more rare, yeah. So why do you, actually, before we even get to your company Edison Motors, what do you

tell us a little bit about your background and like how you got into trucking and what you did in trucking okay well i was one of those guys that i knew like way back in grade one like if you do with those things in like grade one kindergarten uh they're like what do you want to be when you grow up i wrote down truck driver that's what i was going to do after high school i uh i actually i was too young so i joined the army for a couple years and then uh went through there drove truck after it And drove truck till I was about 22, 23, went to university, drove truck all through the summer, because it's a fantastic, well-paying job

while you're going to university in the summer. And I did incredibly well. I did a degree in economics. Oh. And 4.0 GPA, straight A's. And I got super angry after doing four years of straight A's. I got a job offer for $45,000. And the summer before, I was driving truck

in the oil patch, I made $50,000 in four months. And now after four years of university, doing incredibly well, I got second place at the Bank of Canada Economic Forecasting Challenge. And that's the job offer you get. I'm like, I could make more working a third of the year than I did through all this. So we went with my buddy, Eric, who's been my business partner for the last six years since university now. And we put the last of our student loans together.

we bought a 1969 Kenworth that had been sitting in a farmer's field, like a 50-year-old truck with the last of our student loans for $5,000. And we set out as a trucking company. I love this already. I have a bunch of questions. But maybe, I mean, I didn't know that you had an economics degree. Is that something that's been useful to you as a truck driver? If you're an owner-operator, does having an economics background help you think about that business?

Oh yeah One of the reasons I went to school And full full disclosure I failed my first time When I was 21 It was back in 2008 And the financial collapse there I had just started out as an owner operator

Bought myself a truck Saved up for like a year and a half Bought myself a truck Did not know enough about business And got wiped out onto my ass I just made enough money That I was able to walk away from the truck with I think I had like

20 grand left in my pocket after selling the truck and working for like six months, eight months before doing it. And that's what made me all decide. I'm like, okay, I'm going back to school. At the very least, I'll have enough knowledge to not be in this situation again. We mentioned in the beginning, you're a logger. You drove trucks specifically hauling logs. How is that different than typical over the highway freight?

It pays a lot better. I'll tell you that. How come? It's there you don't find a lot of. people willing to do it. It's it is probably one of the harshest demanding jobs on a truck out on the west coast, especially in Canada. We get 40 below in the winter, 50, 40 above in the summer. So what's that for negative 40, negative 50 degrees Fahrenheit in the winter. Then we get up to 110 degrees in the summer. And we are on steep slope. So a US, a truck in

the US is about 80,000 pounds. That's maximum weight limit. A truck. A truck. A truck in the US is about 80,000 pounds. That's maximum weight limit. A truck up in Canada goes to 150,000 pounds. So we're almost double the weight. You have incredibly steep grades. We're talking on an average highway, a really steep highway grade is 10%. We're running up to 30% grades three times steeper than a steep highway hill with over twice a weight. It is. And then you're doing that in the snow. Oh my gosh. So you know, you mentioned that you bought your first truck, I think you said it was a 1969 Kenworth from a field somewhere. And one thing I've always wondered is when you're a truck driver or say you become an owner operator or whatever, how do you actually go about selecting your vehicle and what are there

characteristics that you're looking for? I assume, you know, if you're logging, it probably requires a different vehicle to if you're hauling, you know, retail goods or something like that. But how do you actually make that decision? Well, first you figure out how much money you have. In our case, we had $10,000, and we know that the startup cost were at least half of the truck. So we had a budget of five grand. So that really narrowed that decision down a lot. We had a pretty good mechanical background knowledge, able to work on things. So my biggest criteria selecting a truck is that I need a truck that I can work on. That was one of the issues I had the first time is that whenever it needed service,

it had to go into a shop. I said, okay, I'll get something that's really old, doesn't have a single computer, and then hopefully I can fix everything myself. The news doesn't stop on the weekends. Context changes constantly. And now Bloomberg is the place to stay on top of it all. Hi, I'm David Gurra. Join us every Saturday and Sunday for the new Bloomberg this weekend. I'm Christina Ruffini. We'll bring you the latest headlines, in-depth analysis, and big interviews. all the stories that hit home on your days off. And I'm Lisa Mateo. Watch and listen to Bloomberg this weekend

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Listen on Bloomberg Radio, stream the show live on the Bloomberg business app, or listen to the podcast. That's Bloomberg this weekend. Saturdays and Sundays starting at 7 a.m. Eastern. Make us part of your weekend routine on Bloomberg Television, radio, and wherever you get your podcasts. Is there a difference in the sort of like design choices of a truck for logging versus a typical freight truck? I have to imagine on the way down, particularly. you're riding the brake a lot more. You know, you have to be able to make turns, et cetera.

And then I think maybe I even read it something that you had written about. You mentioned, you know, being able to work on it. I have to imagine that like up on a mountain, it's much more important to be able to like go in and fix your own truck, especially if you're like not near any sort of truck stop or mechanic stop or mechanic shop or a tow company or anything like that. Oh, it's incredibly important when you're up in remote areas in Canada. It's logging beats the hell out of equipment.

It's just there's nothing you're off highway with twice the legal highway weight. So you're heavy, you're on rough roads, you're in mud, rock, and it will just absolutely destroy the truck. And because of that, you need to be able to service it. You're 10 hours, 12 hours into a bush. you're not getting a tow truck out there. You've got to be able to fix it where it's at. And that's one of the reasons why the trucks tend to be heavier spec. Thicker frame rails, more reinforced suspension, reinforced brackets.

They're way more, they're more expensive, but they're also built a lot tougher. There's a reason why that truck from the 1960s was still able to go back to work. Actually, the guy we bought it off of, bought it brand new. His name was Bob Murphy. He bought it brand new. back in 1969 when he was in his early 20s, and he drove that one truck his entire career, if that shows you the quality that these trucks are made to.

So the sort of like the bones of the truck, so to speak, it's just really important that it be heavy duty. The insides can be upgraded or worked on, but if you have good bones, if it's thick, if it's strong, then you can use them in the log hauling game for a long time. Yep, good bones, strong. And then the other, the biggest critical thing is that they use a lot of common parts that we've gotten away from in manufacturing today. Is that a freight liner, a Western Star, a Kenworth, a Peterbilt, all the big brands shared components for their heavy spec trucks.

It was the same Vickers steering box across all of them. The gauges were the same. You could have this commonality of parts where you could take parts from one truck and put them into another truck. Actually, that was largely in part thanks to the U.S. military, but that's a whole other story. Well, this is exactly what I wanted to ask you about, because you spoke about how it was important that you were able to repair the truck yourself. And I know that in farming equipment, there's this whole debate about right to repair, and a lot of farmers are upset that tractors are so computerized nowadays. They can't fix them on their own. They have to take them somewhere, and it's really expensive to get stuff fixed.

I think in some cases they even have to pay subscription fees for software and stuff like that. To what extent is that happening in trucking? Do you have a lot more computerization and maybe even subscription type services in trucks? Oh, it's the exact same as the tractor issue in the trucks. You throw fault codes, you get a check engine light, it'll derate your motor, so you only have 50% of your power. And you have to take it into a shop where they hook it up to a computer. They charge you $300 just to hook it onto a computer. They press a button that says clear fault code and they sent you back out the door until it happens again.

And there's nothing you can do about it. If you want a new truck, you have to deal with that there's a ton of sensors over the whole thing. And you as the owner of the truck have no ability to really know what those sensors are saying, no idea to read the fault codes, no way to clear them. You have to go back to the dealership and pay that money. you know i want to get more into the economics of all this and the manufacturing and all that and particularly at your company but uh what was the most terrifying uh do you have a most terrifying jo just wants to hear trucking stories yeah do you have a most terrifying day out on the mountains

oh yeah um so i was coming down this like 25 percent grade 150 000 pounds on i had my truck chained up. I didn't have my trailer chained up and I'm coming down and all of a sudden even with two sets of chains on it was so icy that it just starts taking off down this hill and there is a immediate 180 degree corner and it like it's a hundred feet, 200 feet off the bank if you don't make this corner and in order to stay ahead of my trailer the road's only just as wide as the truck. It's a cut block like they made it just wide enough for a truck to get down. and I'm grabbing gears to try and stay away in front of my trailer.

So what I do is like I pull this trailer spike. It starts going off the bank on the left. So I let it go, kick it back over until that trailer comes on the right side. And I stuffed my trailer into the snowbank so that it acted as a big snowplow. That big snowplow slowed me down enough with drag that I was able to make the corner and get down the next thing without going around it. But that was one of the scarier moments I had. I think I'm visualized. that right and I just stressed me out

like listening to that and just envisioning all that. Oh, last summer we had one. The road was only like I had six inches on each side of my truck. It was over a thousand feet down into the lake, blasted into the hard rock and the road was crumbling down. In order to make it around the corner,

you hung the outside duel of your tire off of this cliff face. Like the outside duel on the trailer overhung the cliff. That's how close we were on that. that whole. Stressing me out. Yeah, this is very stressful. I have one more logging question, and it might be a basic one, but to what extent is the business of being a logging truck driver tied to the lumber business in Canada?

So, you know, if things are booming with the lumber business, if there's tons of demand for wood, for housing construction, or whatever, does that tend to translate into more activity for truckers. Oh, absolutely. If the price of lumber goes up, then the mill wants to make more lumber, produce more lumber, so the demand for logs go up,

which they're willing to pay a better rate so that more trucks get out into the bush. They'll increase the cycle times. When things slow down, like right now, the lumber price has fallen. There's a lot of truck drivers who have parked their trucks for the last three weeks. Just because it's a very boom and bust

on that lumber price. Yeah, that's my impression of it. And then the other thing I want to ask you is, when there is a boom in lumber slash logging, do a lot of truck drivers, can they switch between being a basic long-haul truck driver to going into logging, or does it require specialized equipment and trucks

like you described and experience? Yeah, so logging does require specialized equipment. These are heavy-spec trucks, and a lot of the time, because you need the room for logs. They don't have sleepers. You can't really do long haul. Huh.

So when it goes down, these trucks quite often sit, unfortunately. Oh, I see. So what about, like, you know, in terms of specialized training, are there specific licenses or programs or schools? Like, how does one make the switch? Especially since, as you point out, because it's specialized, the pay is higher. Yeah. Yeah, there's no specialized training to drive logging truck.

You basically figure it out on the job. That's the only way to do it is most people when they're new, they start in the summer without the snow and then they just transition going forward. But because it is specialized and it is a stressful job, I think it's the only job I've ever had where I've been driving at five miles an hour thinking, holy crap, I'm going way too fast. I have one more logging specific question. Actually, you know, we got your contact from previous guest Gordon McGill.

And actually, that conversation was kind of largely centered around waiting and waiting for trucks to be loaded and unloaded. With logging, is there a similar phenomenon? And does the driver play a role in loading up his or her truck? out here normally the driver doesn't play a role in loading the truck we have dedicated loadermen and normally there's not a big wait time they know you know what trucks you're getting and they schedule it okay we want this guy here at 5 a.m. 536 637 they just give loading times to when they they want the truck showing up so unless it's taking longer to load or the machine's got to walk a little bit. You normally don't have much of a wait time because it's all about the mill and the

logging company is trying to make it as efficient as possible to get these trucks into the mill. They're paying by the hour. And I've always been a big advocate. That's why trucking should be by the hour. When a company is paying by the hour to have a truck, they get trucks out real quick. You can get the news whenever you want it with Bloomberg News Now. I'm Amy Morris. And I'm Karen Moscow here to tell you about our new on-demand news report. delivered right to your podcast feed. Bloomberg News Now is a short five-minute audio report on the day's top stories. Episodes are published throughout the day with the latest information and data to keep you informed. Yes, there are other products like this from a variety of news organizations,

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So let's talk about your company, Edison Motors. So what is it? Yeah, we're a company that's making electric. we started out electric logging trucks and now we've expanded into electric vocational trucks, the entire vocational industry. Can you talk about what the opportunity was that you spotted? Because when you describe logging trucks as these specialized heavy duty vehicles that, you know, to some extent people need them to be kind of simple, easy to fix and maintain,

it doesn't necessarily scream like opportunity for electrification. So what's the thought process there? Okay, well, we've been a big fan of kind of electric vehicles and we reserved a test last semi a long time ago because my thought process was if you're coming downhill, like here you go up the mountain empty and you come down loaded. Electric vehicle average you entered a braking. So you're recharging your batteries when you're going down in order to power the truck to go back up the mountain empty.

You're basically using that stored potential energy of the logs at the top of the mountain to fuel the vehicle to go back up. the mountain. So that was where we first started and then we started looking into it and the battery wasn't enough. The Tesla semi has a one megawatt battery. A login truck when you do the math on it uses about 2.5 megawatts of power. So the largest battery in any electric semi, you would need two and a half times that weight and that truck already weighs 25,000 pounds. Doubling, over doubling that weight is going to put you over legal axle weight. You wouldn't be able to haul any freight. So then talk to us about how you solve the problem. You've started, it's still in very early days,

you've been retrofitting old trucks, like electrifying them. Talk to us about like how you solve the problem or what specifically that you do to the old trucks? We basically put in a diesel generator is had the idea of, in addition to logging, we did a lot of hybrid power systems where we would take solar batteries, bring them up to a mine or a remote community that was running off diesel and we would optimize their grid. That's part of the other side of our trucking business. And we realized that a truck was a lot of the same of this community. So this one project we did where the aha moment really came into it is that,

Small place up near the Yukon border, First Nations Reserve, running 100% off diesel. They were running a 90 kilowatt generator because they had a huge peak load demand. Everyone would get home from work, turn on all their appliances at the same time, 5 o'clock, big peak load demand for an hour or so on that grid. They needed a 90 kilowatt generator to meet that load demand. However, the average load was only like 20 kilowatts. That's 15, 20 kilowatts. So what we did is we put a large battery bank in there.

that battery took up the peak low demand. We offset that with a lot of solar production for daytime. And then we downsize the generator from 90 to 35 kilowatts. I think we build them $140,000 to do this whole project. And their fuel savings was $85,000 in their first year. Just from using the same amount of power, but optimizing that power to work more efficiently. So I was driving back home.

I was actually in that 1969 truck. and I was starting out at a set of lights and the aha moment occurred to me. A truck is a lot like these grids. You have a huge peak load demand. It takes a ton of power to get that truck up to weight. That's why you run a 15-liter diesel, 550 horsepower, to start that truck moving from the line or to pull that weight up a hill. You need a ton of power.

Once you're rolling down the road, you back right out of that throttle. You're at 20% throttle and you're just cruising along. So you have this super inefficient system where you have a massive diesel motor that's not needed because you only need that large diesel 10% of the time, but you're running that full-sized diesel 100% of the time. So in addition, we're like, okay, this makes sense of the region breaking logging. If we already have the batteries in there, we can make this entire thing really efficient. Get the range we needed. We'll put in a much smaller. We'll basically cut the size of the diesel motor in half.

that'll recharge the batteries and those batteries will give you the power you need to roll down the road and meet your peak load demand. So this kind of leads into something else I wanted to ask you about, which is, you know, I realize it's dangerous to generalize here. But how do truckers in general feel about electric vehicles and the prospect of electric trucks? Is it so long as it cuts down on fuel costs, it's seen as a good thing? they're a sort of knee-jerk resistance to maybe doing things in a slightly different way? Oh, there's a huge knee-jerk resistance, and I don't think it's to doing things in a certain way. A lot of people I've met, they're open to new ideas, but truckers aren't dumb. They know how much power their truck puts out in the day. They can fill it up at the end of the day,

and they see what their power loads are. And when you tell them that, hey, this truck at full-load, ideal circumstances can do 400 to 500 miles. They quickly figure out that I do 600 mile days. And then they think, where am I going to charge this? Where am I going to plug this vehicle in? This isn't going to work for me. That's one side of the argument. And then the other side, it's like the John Deere tractor thing.

They see these electric vehicles and they're like, there is not a chance I am going to be able to work on this thing. And like every single thing is completely locked out. As an owner operator or a company owner, how are my mechanics going to service it? It's like Tesla, when you hear stories of them buying a car, how long it takes to get it serviced. Well, how long are these trucks going to take is, where's that technician right now? If I go into a truck dealership, these yards don't have people trained up to service the high voltage systems.

They're normal diesel mechanics. We need to go through an entire training process on an entirely new mechanic set of industries. So even if I can't service it myself, I can't even take it to a shop anytime reasonably soon to get it served. and downtime is one of the biggest most expensive things when your truck a truck on average makes about $2,500 to $3,000 a day. $3,000 a day to a truck. If you're down for a week, man, does that add up quick? Yeah. So you touched on this just now, but also does the structure of the trucking industry where you have lots of these independent owner operators is that it sounds like that is also an impediment to electric vehicle adoption. Can you talk a little bit more about that?

Yeah, they want to be able to work on it. They want to be able to service it, fix it, especially like places like logging where you work your truck Monday to Friday, you go out on Saturday, and you wrench on your truck and fix what you broke during the week in order to get it back to work on Monday. If they can't service it and they can't fix it, and a lot of the industry is owner operator, I forget the exact statistic, but it's like 30% of truck drivers are single truck owner operators, one man, small businesses. That's almost 30% of the industry. What is Edison Motors doing in the design of your trucks or the retrofitting to assuage the

concerns of someone who is up on a hill, up on a mountain, and worried that they, you know, and the concerns about can you really repair these electrified vehicles? Okay. So we had a real simple way. We took our experience working on when we, got up to like a four-truck company. We had all trucks from the 1960s to the 1980s. And we learned about the common core components of these trucks that they put back then. And it goes back to that U.S. military. We got a touch on it on a brief synopsis of how it worked back then. Basically, in the 60s, the U.S. military and NATO was worried about the Soviet Union. And they learned from in World War II, what they did is when they war broke out, they bombed the hell out of the German factories.

And they realize that if the Soviets do that and they start nuking our manufacturing hubs, bombing the manufacturing hubs, trucking is so vital for national defense, national security that we need to be able to pick parts, not manufacture, but be able to pull parts from one truck and put them into another. Or people are going to starve to death. They won't be able to maintain their military operations. So what they did is they mandated that if you wanted a contract with the U.S. government as a manufacturer, you had to use a common core set of parts. That's the reason why you see these trucks from the 1960s. I can take the speedometer out of my 1962 Kenworth and I can put it into my 1985 Western Star. It is the exact same speedometer. The treadle valve, the Bendix, the type 30 brake pots, all of them, the only thing you were buying from a manufacturer,

acture that was different was the body. The internal workings of the truck were all common because of that national defense industry. So you can service these trucks and these parts really stayed in like the turn signal from my 1962 Kenworth is the same turn signal that a 2012 Western star has. Isn't that kind of cool? That's awesome. So when did we start moving away from that model? is my next question. They dropped their requirements in some time around the mid-80s, around the fall of the Soviet Union

wall coming down in Germany. They weren't as worried. They started laxing it. And then you see in the 90s, late 90s, the manufacturers really start moving away as we get more computerized, more specific.

Like now this is strictly a turn signal for this year in model a truck. And they realized they could make a lot of money off of the parts sales. it goes back to that theory in economics is that you have a locked in customer. So you could save money by selling a cheaper truck and then making your money on the parts. Is that somebody buys a $300,000 truck. They're now locked into maintaining that truck.

You're not going to throw out a $300,000 truck because of a turn signal goes out. You're going to buy that $400 or $500 turn signal. So you went away from having a turn signal right now, that old one in 62, is about $4,000. $40. A new turn signal, about $450, a 10 times increase in the amount of parts because it specifically molded to the truck and only that one component will work. This is so interesting. I hadn't considered like sort of supply chain resilience and interchangeability as a security concern, just more of like a convenience thing. I hadn't thought about either. I'm sure there's like some like PhD turns.

firm paper to be written or probably has been written about like the end of the Cold War, neoliberalism, market, you know, diversity in market parts and sort of like a lack of supply chain resilience as government purchasing, you know, ceases to be a centralized. You're hitting all the buzzwords. All the buzzwords. But it really does feel like there's like a fairly profound economic story here. Yeah. So Chase.

Well, think about it this way. Have a look at it. is when we hit COVID and the supply chains went down, the trucking industry was massively shorted by parts supplies. Right. Now, that was just a supply due to COVID and the natural way the pandemic happened. If there was an actual military event where, say, a incident broke out between China and the U.S., our entire trucking industry would collapse overnight without those common core parts and those older trucks.

You can't maintain those computer sensors. the truck go down. And that's a major issue is that how do you feed the population? The grocery stores only have two, three days worth of food on the shelf. The trucks go down. What do you actually do to these cities? So, yeah, oblique thought to say the least. So talk to us like, okay, you're competing with Elon Musk.

Yeah. Like, what is the plan here? So I, and I know your company is young and you've started off doing retrofitting, And that sounds, it's very intriguing, but that's a long way. You know, there's a, seems like there's a big gap between retro electrifying a truck from the 1960s versus actually competing against the biggest or one of the biggest vehicle manufacturers in the world and eventually creating your own trucks. Like, what is your vision here?

Why do you think you have an opportunity? Okay, yes. So we've got an opportunity is we got that market segment. So with those common core parts, that's a. essentially all we used. We went, what are those common core parts that are still on the shelf? Cheap, easy to install. That's what we built our trucks off of. So that allowed us, we didn't have to make any specific parts. You know how fast that speeds up your ability to get to production when you don't have to make any parts. It also simplifies our supply chain logistics is that we partnered with several parts stores that can get that they all have those parts and shelves. We partnered with these parts stores and we're like, okay, what? are the parts that you always have on your shelf. What are the thing that a trucker's going to go in there and get?

Perfect. Now we don't need a warehouse for these parts. So we stepped up our production that way. That's how we're now, in just a year, went from prototype to production. And when it comes to competing, yeah, we're not going to compete on the Freightliner Cascadia, hundreds of thousands of trucks per year. It's just you need a million dollar, a billion dollar facility. $2 billion

dollar facility but what a lot of sorry is my dog barking in the background it's okay we're a dog friendly show what kind of dog is it uh border collie

I love border collie I have a hurting dog as well I have a corgi I don't know what it is when I go on the phone she's outside and she's just looking in my office window crying at me

I'm sorry but yeah it's to get us back on track there we can't compete with 100,000 trucks per year. And that's a lot of where these manufacturers focus on. Like, they're going after the, there's 300,000 of these dry van trucks sold every year in the US in Canada.

We're targeting the heavy vocational market, which is still about 25 to 30% of the truck markets. But what a lot of people don't realize is that when you're into that heavy vocational, say Kenworth, C500 model, they're not built on an assembly line. Every single one of those trucks is built by hand. There's a small kind of assembly line, but they are so custom.

It's not like building a car where every Chevy Malibu is basically the same. Same wheelbase, tires go in the same spot. When you get into these heavy vocational trucks and you get into places that have bodybuilders, they're putting on tow truck bodies, cement trucks, everything is so customized to what your wheelbase is, where your axles go. Does it have twin steering? Does it have three drive axles? Does it have one drive axle? Where does the fuel tank go? How much room do I need here? It's you can't build that on

an assembly line because every single truck is so custom in its build down to the even the engine size. Do you want a seven liter engine? Do you want a 16 liter engine? What transmission do you want? Is it going to be an automatic, an 18 speed, a five speed? Is it going to have auxiliary transmissions? Like there's so many different options that every one of these is basically built by hand. That's why the price tag also jumps way up. You're looking at $150,000, $200,000 for a highway truck. You're looking right now at $300 to half a million for one of these heavy vocational trucks because it is still hand built. So two things.

I wasn't actually familiar with the term vocational truck before, but now I understand what you're talking about. these sort of like specialized trucks for things like logging or oil fields and so forth. And I also did not realize that, you know, that there is not an assembly line for these type of vehicles, which we see. We see dump trucks, things like that. I hadn't realized that they're much more bespoke than the typical semi that you see on the highway. Yeah. And the fancier you get with the truck, the more bespoke it is. Like, think about a crane truck, a large crane truck. look how custom and bespoke that has to be to accommodate those cranes, those outriggers, tow truck bodies. It's kind of a cool thing that when you get into the large things like the C-500 that they're not assembly line produced.

And that makes it a lot easier for somebody, a smaller company like us, to really come in there, is that we can focus on those high-end, not mass-produced, mass-produced trucks. we're very cost-competitive building these by hand. What's the resale value on these trucks then? You know, if they're so customized and bespoke, but at the same time, I guess they're using the common core parts. Well, they're actually getting away from it more and more, even on the bespoke one, which is like even on the login trucks, it's getting more and more away from it as manufacturers don't focus on these trucks.

They're not a huge part of their volume. You know, you're selling 100,000. highway trucks a year. There's only 5,000 logging trucks in all of BC. With normally you keep them for 10 years, which means that each manufacturer might sell 50 of these trucks per year. They're not going to tool up an entire assembly line for logging trucks for 50 trucks a year. They don't care about it.

So now you start, they're starting to get, well, now you're going to get a highway chassis and we're just going to send the highway cab, the highway hood into the place that makes a frame rails and they'll do all the extra stuff. So it's getting less bespoke, which is also causing more reliability issue problems, is that it's essentially a highway truck cab put into an off-highway situation.

Can we go back and talk a little bit more? I still want to wrap my head around, why electric? And I'm also curious about, like, the supporting infrastructure for vocational trucks, particularly logging trucks, for electric vehicles. And, you know, I do, you know, there's, There is not much of an electric vehicle infrastructure still just for regular cars on the highway, although that's getting built out rapidly, but there's still a lot of work to do. What does the, what is the sort of like charging infrastructure look like when you think about your markets?

Well, we run that diesel generator, so we don't need charging infrastructure. And that whole charging infrastructure being built up is a bit of a misnomer. Okay. The charging stations are there, but if you look about 15 years ago, we had about 4,000 terawatts of power in the U.S. Okay. It was 4,100. Now we have 4,110.

We've only increased the capacity of the amount of electricity on the grid in the last 10 years by 10. Like it's so insignificant that the amount of electricity we have on the grid has not increased at all in 10 years. If you compare that to China, 10 years ago, China had about 2,000 on the grid. They're now at 7,500 terawatts of power on the grid. They've done a three and a half times increase, almost four times increase. And North America has stayed flatlined in the same amount of time. So they say that, yeah, we're putting in the charging stations and you see more charging stations.

but we don't have the extra energy and electricity to support those charging stations. And where that comes into real effect is that cars are okay. They increase the grid load where they're at a little bit. The price of electricity does go up. But the amount of power that a car uses is nothing compared to the amount of semi-truck uses. So if we were to make all the logging trucks in British Columbia, Canada, all 5,000 electric at 2.5 megawatts of power per day for 5,000, thousand trucks gives you about 12,500 megawatts, 12 gigawatts of power. Right now, our government's been building a new dam, the site sea dam. It's been in construction for 15 years. They've spent

$21 billion on it and it has a 1.1 gigawatt capacity, which means you would need to build about 8 to 12 more of these dams in order to just supply the electricity required for logging trucks in a small province in Canada. A niche industry in a small thing needs at least 10 more hydroelectric dams in the $20 billion range. That kind of shows me where our infrastructure's at.

No, it's not happening anytime soon unless we have levels of infrastructure investments similar to what China does. It's just there's not going to be a smooth, easy transition. It's why I'm still in favor of these diesel electric hybrids. A much smaller, much more efficiently ran diesel that's running at its peak ideal RPM that then just recharges the batteries. And right now what we found in our prototypes is that you get about two hours of driving

out of the truck and you run the generator for about half an hour. to recharge the batteries, half hour to 40 minutes. So it burns in that half hour, about 30 liters of diesel to drive the truck about 200 kilometers, two hours of driving for 30 liters of diesel. If you consider that same amount of fuel burn, you're looking at 100 liters of diesel to 120 liters of diesel. So if we're trying to reduce emissions, reduce fuel consumption, by going diesel electric, you can still have that 75% reduction in fuel mileage burnt much more efficiently as you go electric

and then as the grid improves, if we do invest in our electrical infrastructure like China does with that charging capacity and that electric capacity on the grid, over time as the batteries get better, you can put more batteries in there and you can make your generator smaller instead of a 9-liter, 6-liter, maybe a 3-liter, and then you can get rid of it all together.

And that's the way I believe that we need to transition into this zero emissions electric economy over the next 20, 30 years is by making that hybrid electric drive train more efficient. Right. And evolution instead of a revolution, I guess. Chase, there was one other thing I wanted to ask you about, which is how have you been fundraising so far? And what's that been like? So we did our first fundraising was off just crowdfunding. We started it off. I announced this business on TikTok. And within four days, we raised about half a million dollars. And okay, cool. That allowed us to get the first retrofit prototype built.

Then we built that. We showed it off. We showed that people we could build it. Then we had another crowdfunding. And we had a goal of one and a half. million to start the production of the first production trucks. And we raised that one and a half million in about four days. And this is one of the nice things is that we were trying to stay away from venture capital.

Because I made a point on that first round of investment to call everybody that invested over $1,000 into the company. I wanted to make sure that they were okay with the investment. I mean, literally, you invested in a tech startup off of TikTok. Are you sure about this? Like, and then what I found out, though, in that, oh, God, it took three weeks to do all those phone calls. But what I found out is that 95% of all their people were owner operators, small fleet owners, or truck drivers. Our investors, especially like, and it stayed true, even going into the next thing.

Our investors weren't investing in us because they wanted a huge return. I can't wait to see that return. I'm investing. I mean, yeah, some of them are hoping that, yeah, we're successful. We take the company public. They can see a return on that initial investment. But what they were mainly invested in is that they wanted to buy our trucks. They believed in the trucks we were building.

They believed in how we were doing it. So all our investors themselves are truck drivers and company owners that their return on investment isn't the money they're making off of it. Their return on investment is being able to buy a good truck that does the job for them without the planned obsolescence with the efficiency of the diesel electric system. So it's kind of put us in this really unique thing is that we don't have venture capital behind us asking for a big return on their investment. We have these small owner operators, these medium-sized companies that says our return on the investment is just getting the truck. So I think that's kind of unique in the tech space.

Chase Barber, this is such a fascinating conversation. I learned a lot in this episode, but I think that's a good place to leave it. Sounds good. I'm glad I could help. There's a lot of information to cover. It's one of those ones where an hour goes by super quick. Everything about logging worked, vocational trucking, the interchangeability of the parts and the connection there to the military, the fact that these are like sort of more bespoke and limited runs. So it doesn't really make sense to stand up an assembly line for much of these things. none of the sort of the energy systems of like charging on the way down all things I hadn't really thought about before but a very fascinating really appreciate you coming on odd lines oh thanks for having me on I had a lot of fun talking about this thanks so much chase yeah that was really interesting yeah that was great yeah Tracy I found that to be really fascinating like I said this was like totally new stuff the part about interchangeable parts of the military I think was like sort of very eye-opening like obviously I should have rephrased what I said earlier. Obviously supply chain resilience is a security concern, but I had not considered interchangeability of trucking parts or manufacturing parts more generally as part of that considerations. And the role of the U.S. Army in doing that was absolutely fascinating to hear. I will say, I have a feeling the way some of our listeners feel about our market structure episodes might be the way I feel about some of the conversation.

over, you know, like engine size and structure and power needed for logging trucks. But I think I got most of it. I will admit, even after all of these episodes that we've done on energy and electricity, like, I don't have an intuitive sense of, like, kilowatt hours or, you know, some of, or kilowatts or some of these things, like, I haven't, like, totally internalized them. But, like, this, like, basic idea, and, you know, it's come up in multiple times, in multiple conversation, which is that when we're talking about electricity, there is always this tension that doesn't really exist, you know, in sort of other forms, of like peak versus average.

And so you need to have the capacity to deliver at peak, but oftentimes there's like a waste in terms of because of the average time you don't need that. And so it's interesting this idea that maybe the sort of the diesel hybrid electric solution is one way to address that. And at first, like, I didn't really understand like this idea of like, well, how are you going to have like a trucking company and it's sort of like crowdfunded? Like, don't you need like hundreds of millions of millions of dollars? But if they're bespoke or if it's if they're serving areas. And aimed at owner operators as well. Or the expectation is for bespoke and it's sort of these then interchangeable parts, then it makes a little bit more sense to me.

Yeah. The peak versus average use thing is really important, I think. And also I hadn't, you know, listening to Chase talk. about the weight of actually moving logs. Like I hadn't really considered it, but that tree that fell down. Yeah. We have to, my husband and I, we have to lift it up before we can chop it into pieces because it's flat on the ground and trying to lift that thing.

You start to get a sense of what it must be like to cart around a whole load of logs. They're just incredibly heavy. Just that hearing him talk about like going downhill and a lot. 180 turn and then having to like use vicarious stress as a plow to sort of like build up resistance and slow down like having to wear with all and I remember this I think this is something that um gourd talked about too which is that if you want to like make more make some better money in trucking you have to be uh you have to specialize in some way and so you could see how specialized that skill is like knowing how to do that or like having like half the wheelbase be over

the edge. Like, I guess if you're going to have like a higher, a higher salary in trucking, then these are some of the choices that you have to make. Absolutely. The other thing I was thinking about was just, and this comes up on odd lots all the time, but the idea of in a very cyclical industry, how do you sort of encourage people to build up capacity that you know at some point is probably going to get furloughed, right? And Chase was talking about how when the lumber industry experiences a downturn, a lot of logging trucks, just end up on the site. And but at the same time you don't actually have that many logging trucks when the industry starts to heat up again. Yeah.

All right. Shall we leave it there? Let's leave it there. Okay. This has been another episode of the Odd Lots podcast. I'm Tracy Alloway. You can follow me on Twitter at Tracy Allaway. And I'm Joe Wisenthall.

You can follow me on Twitter at the stalwart. Follow our guest, Chase Barber. He's on TikTok. I don't even think he's on Twitter. He's at Chase Barber on TikTok. He has lots of videos about all this stuff. Super interesting. follow our producers Carmen Rodriguez at Carmen Armin and Dashel Bennett at Dashbot

and follow all of the Bloomberg podcasts under the handle at podcasts. And for more Oddlots content, go to Bloomberg.com slash oddlots. We're tracing our blog. We post transcripts. We have a weekly newsletter that comes out every Friday. Go there, subscribe to it. Check it out. And thanks for listening.

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