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Podcast

Helping Commercial Fleets Optimize EVs

Learn how Xos is leading the way for the trucking industry when it comes to electric vehicles.

Episode 200: In this episode, we are going to get a chance to speak to two people who are at the center of the trucking industries move to EVs. 

My guests today are Dakota Semler and Gio Sordoni, Xos’ co-founders. 

Dakota Semler and Gio Sordoni headshots, the co-founders of Xos. In this episode, learn how Xos is leading the way for the trucking industry when it comes to electric vehicles.

Xos is an award-winning manufacturer of EVs, including Time Magazine’s Best Inventions, Fast Company’s World Changing Idea Award, and Forbes 30 under 30.

Guest Website: XosTrucks.com

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Transcript of Episode:

Jamie Irvine:

You’re listening to The Heavy-Duty Parts report. I’m your host, Jamie Irvine. And this is the show where you get expert advice about heavy-duty parts that keep trucks and trailers on the road longer while lowering cost-per -mile. In this episode, we’re gonna get a chance to speak to two people who are really at the heart of the trucking industry’s move to electric vehicles. My guests today are Dakota Semler and Gio Sordoni, Xos’ co-founders. Now this is an award-winning manufacturer of electric vehicles. That includes Time Magazine’s Best Inventions, Fast Company’s World Changing Idea award and Forbes 30 under 30. Dakota, welcome to The Heavy-Duty Parts Report. So glad to have you here.

Dakota Semler:

Thanks for having me. It’s good to be here.

Jamie Irvine:

And Gio thanks for joining us.

Gio Sordoni:

Thanks so much glad to be here.

Jamie Irvine:

So I’d like to get into our conversation. Frst of all, talking about the electric vehicles, the new series of vehicles that you are introducing to the market, Dakota, you have a heavy duty class eight tractor, and a medium class six and seven model. And I was curious, what are the three main advantages these vehicles provide fleets over their diesel counterparts?

Dakota Semler:

That’s a great question. So we were actually fleet operators first before starting Xos, and we knew that one of the most important factors that fleet operators have to evaluate when making decisions about acquiring new equipment is managing the best vehicle with the lowest total cost of ownership. And so in our engineering, we really focus on how do we deliver the best total cost of ownership, not just by making the vehicle more efficient and lower cost to maintain, but also by building in a lower acquisition cost, that’s gonna be competitive with diesel. And so when we talk to our fleet customers, the first thing that we really start with, and one of the key highlights of all of these vehicles are MDXT the class six seven platform, and our HDXT the class eight platform is really our focus on total cost of ownership.

These are industry leading vehicles for delivering low TCO for commercial fleets across various different vocations from last mile delivery to food and beverage delivery all the way to regional haul or line haul operations. So that’s the first thing we focused on. The second area is really the connected architecture in these vehicles. So we’ve built them to actually be dynamic smart vehicles that fleets can monitor and manage today, utilizing our Xos for your platform. And why that’s important is, as you probably know, it’s become incredibly complicated to manage a fleet today. From managing maintenance to fueling infrastructure, to service ticketing and service tracking of service records all the way to managing compliance of emissions regulations and what model year your engines and power trains are. We wanted as fleet operators and for our customers to have that all centrally located so that as they’re managing a dynamic, ever growing, ever more complex fleet, they can do it from one single platform and have all of those resources and tools easily accessible at their disposal within Xosphere.

And really these vehicles are the kicking off point where we have our connected vehicle architecture, our telematic gateway unit that enables that platform and allows us to actually dynamically update these vehicles on the road. So not only can a fleet manager actually operate and monitor these vehicles remotely, but now we’re able as the OEM to continually update and make the performance of these vehicles even better. And then lastly, one of the third things I’ll talk about is just our battery architecture. One of the ways we’re able to deliver a industry-leading TCO is by developing our own battery technology. So these vehicles utilize Xos proprietary pack architecture, which takes leading cells from industry leading manufacturers and combines them into a battery system that was purpose built for the commercial vehicle industry. So the rigors of vibration and thermal environments and drive cycle requirements that fleet operators put these vehicles through. And that’s truly unique in this industry. Very few OEMs are actually creating battery systems that are engineered with the rigorous duty cycles and use cases that fleets put them through.

Jamie Irvine:

I think there’s a level of comfort and maybe it is important, maybe it’s not, I mean, there’s some pretty smart people in the world working on this, but there’s just a level of comfort as I hear that your background started with fleet operations. So just having that information, that knowledge, that firsthand knowledge, I’m sure was extremely useful as it guided you through the development of these trucks. So Gio, let me ask you something. All we see in the news is one press release after another about different electric vehicles coming to market. This space filled up really fast and got competitive really quickly. So what’s really giving your trucks and your company a competitive advantage over everybody else who’s bringing EVs to the market.

Gio Sordoni:

Yeah, Jamie, I would point out that while there is a lot of noise and there are a lot of press releases about new products eventually coming to market. We’re one of the few EV companies that’s actually been delivering production vehicles for several years now. So our trucks are battle tested. If you will. They’ve been on the roads they’ve been in real customer’s hands. And we’ve had the advantage of being able to incorporate a lot of that early feedback into the newer products that we’re building and announcing. So just right out the gate, we’re one of the companies that’s actually doing what we’re talking about here. Not just announcing products that will eventually come. Another aspect that Dakota touched on is that our vehicles are purpose built to be electric. We’re not taking a diesel platform and retrofiting it, or adapting it so that it works within electric powertrain.

All of our trucks were designed and built to be electric from the ground up. And that leads to things like TCO advantages that our peers aren’t as fortunate to have, for example. So that purpose-built custom chassis architecture and a purpose built battery PA pack allows us to be TCO competitive. The other aspect is our network of services that come along with the truck. A lot of the fleet customers that we talk to aren’t experts in electrification, they don’t know a ton about batteries and power, trains and charging. So we’re here to help we go into a, a customer and, and understand their, their needs across their depots across the country. And we’ll actually help with their charging infrastructure design and roll out. So we’ll go to a fleets yard and say, okay, here’s where we would put chargers. Here’s the size of charger we’d recommend. Here’s the charger that we recommend you buy. And we go ahead and help them to get that installed and then bring data off of that charger to make sure that it’s performing at its best over time. So connectivity is a huge advantage for XOS. Not only are the trucks connected, we can connect to the charging architecture or the charging hardware as well to make sure that fleets are making the most intelligent decisions on how to optimize all of that hardware that they brought on to make that transition from diesel to electric. And then the third piece is over the air updates. It’s not just a one way stream of data coming from trucks and chargers to the cloud. It’s also our engineers being able to write new code, make the vehicle more efficient over time and update our vehicles over time with that new code that makes them operate even better. And there’s, I don’t know how many OEMs are offering that today but that’s another advantage that sets XOS apart.

Jamie Irvine:

Yeah. That actually really jumps out to me because I mean, let’s face it relatively new technology in the, you know, when you compare the legacy equipment that’s been around for decades. And so that real time update and optimization, I mean, that has got to be something that fleets would be very interested in simply because as time goes on and you actually get more and more miles, more real world experience, if you can adapt to become more efficient over time, this is nothing but good for the fleets.

Gio Sordoni:

Yeah, that’s exactly right. The ability to update the vehicle past the point of sale is a really unique and exciting capability that we’re excited to add to our vehicles when we launch our TGU that telematics gateway unit.

Jamie Irvine:

Yeah. That’s gonna be great. So one of the things that I have been very concerned with and my background, you know, I worked for manufacturers of parts components. I worked for distribution companies, always on the independent service channel. And a couple years ago, I wrote an article that was entitled, Why Manufacturers and Distributors Are in Trouble and what to do about it. And, you know, vertical integration with OEMs is, is a big concern, especially if you’re on the independent side, but even if you’re a parts manufacturer that has relationships that are maybe dual, like tier one and tier two. And I did notice in some of your promotional videos that you talked about a relationship with tier one parts manufacturers. Dakota, I think in the video, it said that this is so that fleets can get access to high volume replacement parts. Can you talk a little bit about how that’s structured and whether or not there’s going to be an opportunity for the independent service channel to also give support to your trucks after they’re in the marketplace?

Dakota Semler:

Yeah, it’s a great point. And this is where our fleet experience, as well as the experience of our customers has factored into a lot of our strategy in how we bring products to market. So knowing that there are several components and parts of a vehicle, particularly a commercial electric vehicle that aren’t gonna change from an internal combustion engine. We wanted to partner with the industry leaders for manufacturing those components. And so we have several partners that we’ve announced, Tulsa which is our frame rail provider. We work with Hendrickson for suspension components, and we’ve obviously most recently announced our partnership with Alison really around axles and other components related to the axles. And that’s critical because as we were fleet operators, we wanted to have serviceability and access to parts wherever we operated, so that we could keep our uptime performance up and get trucks back on the road as quickly as possible. So our entire engineering strategy has focused on how do we collaborate and build really strong relationships with those parts suppliers so that they can be accessible, not just through our own direct channels, but through a network of independent parts distributors that ultimately will have access to these parts as vehicles are dispersed and deployed across the country.

Jamie Irvine:

Okay. That makes a lot of sense. Now, Gio I got one for you, 22 parts versus thousands that was in another one of your videos. I believe the exact way it was described was 22 moving parts instead of thousands. I gotta be honest as someone who’s been in the parts business since 1998. Um, I understand we have to be progressive. We have to move forward, but our EVs gonna be the end of the parts business as we know it?

Gio Sordoni:

Absolutely not. There’s still gonna be plenty of opportunity in parts. Vehicles still get collisions. For example, there, there are still some moving parts in the vehicles that will need service over time. You’re still gonna have brakes and tires and all of the normal wear and tear that vehicles, especially heavy duty and commercial vehicles see out there on the road with all the miles that they do. There are also new and sort of different opportunities for service as there’s more equipment involved in the equation. The charging stations that a lot of fleets are purchasing and putting at their depots will have service as well and parts that need fixing and parts that break over time. Tthere are also some large ticket items on the vehicles that will need service throughout the life of the vehicle. Battery packs, for example, should get you through a decent period, depending on how you use your truck and how you charge that battery. But that’s a big ticket item that through a 20 year period would eventually need to be replaced.

Jamie Irvine:

That makes sense. That makes sense. We’re gonna take a quick break. We’ll be right back. Don’t have a heavy-duty part number and need to look up a part? Go to parts.diesellaptops.com or download the app on Apple or Android to create your free account. Looking for high-quality fuel injection for heavy-duty applications? Having one supplier for fuel injection allows you to better serve customers by providing them with a complete line, which increases your sales and profitability. Learn more at ambacinternational.com/aftermarket. We’re back from our break. And before the break, we were really getting to know, the commercial trucks that both Gio and Dakota are co-founders of Xos. And they’re bringing these trucks to the market now, and they’ve been doing so actually for some, some time now. So it was very exciting to learn more about the way that they’re, you know, differentiating themselves in the EV space and how their background with fleets has really drive their overall strategy Dakota up. Let’s talk a little bit about some of the software and the architecture that had to be put in place for EVs. You recently made some news with the introduction of your advanced vehicle ecosystem for EVs. And what I was interested in is, it said that the role, the software like Xosphere will play will minimize the total cost of operation for an electric fleet. So tell me more about Xosphere, tell me more about how this architecture, why it’s necessary and how it’s going to help drive down the overall cost for fleets.

Dakota Semler:

Absolutely. So the Xosphere stemmed from so many different disparate data sources coming from your service platform or your service management tool, such as a decisive or your vehicle maintenance tool, or your vehicle telematics tool, like a geo tab all the way to a different platform like your fuel card management system, and having all of that disparate data be disconnected. We wanted to give fleets the ability to then actually connect that data and have more powerful insights into their total cost of ownership. So not only will they have the insights, but they’ll have the resources to be able to make decisions on how they can more cost effectively operate that their fleet. And that might mean reducing your energy costs by scheduling your charging periods at a different time. That might mean optimizing charge profiles to reduce the service and maintenance intervals on specific power, electronics, or batteries. There’s a variety of different ways in which this can pan out and how the Xosphere actually makes it happen. But ultimately it’s about putting the information in the hands of the fleet operator and the fleet manager to be able to make those connections, those have those insights and make smarter, profitable, more profitable decisions.

Jamie Irvine:

So is this something that is proprietary just for your EVs or is it kind of like a vehicle agnostic if you will?

Dakota Semler:

So today it’s really focused on our vehicle platform, but we do work with other charging platforms. So if a customer comes to us, has existing charging infrastructure with another charge point operator out there or charging provider, as long as they connect into the industry standard OCPP connection, we’re able to sync with that infrastructure and make sure that we can still create a connected ecosystem to make smart decisions with our vehicles.

Jamie Irvine:

I wanna ask one more question about that. So I think back to how this, like, when I think of where we are today, and it’s like a brave new world with all this electric technology. And I think back to the way it must have been when the automobile was first created, right? Like everybody had a Ford and then there was other companies that were coming in. And so I imagine over time, especially with commercial fleets, you had this fleet had chosen that model and that fleet had chosen that manufacturer and everything in the fleet was, was just the same. But over time, you, you got mixed fleets. Do you see that, that over time commercial fleets will continue to have a mixed fleet where they’ll be different manufacturers and they’ll be buying specific trucks for specific vocations, if you will. And certain things that, like targets they’re trying to reach, is that, is that what you see in the future? Or do you just see, like all the fleets will either have your truck or a competitor’s truck? What do you think is gonna happen Dakota?

Dakota Semler:

It’s gonna be a mixed ecosystem just as it is today. And just as we focus on classes, five through class eight, we have several customers and large fleet operators, companies like FedEx that operate everything from class one all the way up to class eight, right. They operate vehicles that are even lighter than class one like bicycles. And so we expect to see a mix of vehicles across our customer base, and it’s really gonna be provided by various solution providers. Although we really wanna focus on the markets that we think are gonna go electric first and are gonna have the highest TCO payback, which is in that medium and heavy duty regional haul segment that we think ultimately has the biggest propensity to go electric first.

Jamie Irvine:

Yeah. And it really seems to me, just from what I’m hearing from you, that you’re very forward thinking. You’re seeing that for example, the architecture of your software, as long as it meets the standards is gonna be usable across a different platforms. So that’s fantastic. I mean, this is gonna be music to fleet’s ears. Gio let me ask you something. When I talk like my daughter, she’s gonna turn 18 in a couple months. And when I talk to kids in her generation, they almost have this, this like naive idea that electric vehicles are, the energy costs are zero. And with fossil fuel, there’s the obvious costs where they can see the prices at the pump. It’s not really like that though. There is a cost. And so when it comes to running a commercial fleet and having electric vehicles, how important will measuring and minimizing energy costs continue to be. And what’s the difference between, let’s say a traditional fleet today that’s on fossil fuel versus what an electric fleet will be in the future.

Gio Sordoni:

Yeah, that’s a great question. We think it’s so important to be able to measure your energy costs and your energy usage. And that’s part of the intention of the Xosphere is to give the customer and the fleet real time feedback on how much energy they’re using to move their trucks, not at the end of the month or at the end of the quarter, when you add it all up and say, Hey, why did we spend this much on fuel, but getting a sense for how much energy has been been used for each truck every day, and being able to communicate that to the team in a way that that makes sense, it’s digestible and actionable. So very important. We’re also doing things to help minimize that cost. Dakota alluded to a number of these things just a bit ago, but optimizing when you charge the vehicle. Charging not when all the vehicles come in and plug in at the same time, but maybe metering out those vehicles to charge throughout the evening if they’re going out the next day as an example. So there is a lot that we can be doing to help fleet save on energy costs. And in general, especially where fuel prices are today. Fleets should be saving money on their energy costs. There are exceptions if you’re getting hit with, you know, demand charges, and you’re plugging all your vehicles in at the same time. And in certain utility districts, it’s hard to say across the board because pricing does vary from utility to utility, but in general fleets should be saving money on fuel and in some cases in a major way.

Jamie Irvine:

Yeah, it’s not zero, but it’s gonna go down in a typical situation. Dakota, let me ask you this there’s 80,000 open driver positions today. I’ve seen projections that that’s gonna go to 160,000 by 2030. Like I said, I’ve been in the parts business most of my career, and we are in such a desperate need for parts technicians. There’s a shortage there there’s a shortage of, of repair technicians as well. So it seems to me that things like autonomous vehicles and the changes in technology could actually be part of this labor shortage solution. And if you were talking to young people, which I’m sure you want young people to know about your company, because you’re gonna be looking for future engineers and thinking software and coders and things like that, what do you think is the best place for a young person to put their time and attention? Like what part of the industry should they focus on from your opinion? Is it the repair technician? Is there still a place in parts? Like, what’s your thoughts on that?

Dakota Semler:

Yeah, it’s a really great question. And to be honest with you, it was a question that some of my friends and my colleagues asked me when getting into the heavy-duty trucking industry is why are you getting into transportation or trucking? It doesn’t doesn’t sound cool. It’s not like a tech company. And I think the industry has really shift and it’s been prompted to do so by companies like ours that are at the forefront of disrupting the way things are done, but I wouldn’t narrow it down to any one area of the business because this industry is going through such an evolution that there are so many exciting roles, whether it’s on the manufacturing side and engineering and delivering products, whether it’s on the parts and service and support industry, that’s keeping these vehicles on the road or even on the operational side.

Dakota Semler:

And one of the areas that I think we’ve spent an incredible amount of time on is not necessarily focusing on full autonomy. We believe the driver has a role to play for a long time into the future, but on making that work environment a more comfortable place to work, a more accessible place to work and something that’s actually enjoyable and not just a really a grimy job that people don’t look to as a good opportunity. And so things like user experience for our human machine interfaces or our infotainment systems, things like making the cabs more comfortable to be accessible to younger drivers. These are all important parts of our engineering process that we’re focusing on to attract that younger workforce and really make sure that not only do we have drivers to meet the driver shortage, but we have young people throughout the workforce, providing drivers, servicing and supporting these vehicles, being technicians on the vehicles.

And I think the industry at large is just going through this immense shift where a typical diesel mechanic may have come home and, you know, had grease or oil all over them. Now, a vehicle technician, their primary tool might be a laptop and they may be able to work from a sedan or a passenger car. So it’s a very different landscape and I’d encourage everybody, whether you’re coming out of high school, whether you’re coming out of a college or graduate degree to look into the industry and take a deep dive into companies like ours and really get to see what’s going on, because it has certainly shifted in the last five to 10 years. And it’s only continuing to shift more, particularly as more zero emissions vehicles get on the road.

Jamie Irvine:

Yeah. And from my perspective, I definitely bridge the gap from the old way to now where we are today in my career. This has been an amazing industry. It has treated me very well. I love being in this industry and I’m actually very excited about all of these changes, because I think it’s only going to enhance and make this industry better over time. So I’m right there with you. Gio, let’s get out our crystal ball here, everybody. I talk to, I go to trade shows or I talk to people on my show, they all ask me the same thing. When’s the last diesel engine going to be produced? You know is that gonna be over in 10 years? Are there gonna be diesels here 25 years from now? What is the landscape gonna look like on powertrain in the future? I know, we’re not gonna hold you to it, but just give me some of your thoughts of the way that you see this rolling out because you did mention that you had put a focus on specific locations that are most let’s just say better suited for EVs today than other applications. So what’s your thoughts there?

Gio Sordoni:

Yeah, absolutely. At Xos, we like to say everything that can go electric will go electric. And today our focus is really on those routes that are 200 miles or less and return to the same home base at night. And that way we can help our fleet customers install chargers at home base and they don’t have to rely on a public charging network. There are a ton of routes in that segment that will keep us busy for years to come. But there are a lot of routes that go beyond 200 miles in a day and you know, make multiple stops and maybe don’t come back to the same place every single night and have time to charge. And so it’ll be a long while, I think one way to look at it is look at what regulators are doing and what governments are saying.

And in California, for example, they passed a rule that all trucks sold in the state of year 2045 will be zero emissions. And so I think that is a line in the sand. California is also obviously a little more progressive than other parts of the country and other parts of the world, but it’s not a a 10 year problem. I think it’ll take decades, especially to turn over such a large fleet. There will be diesel trucks in the national fleet for decades and decades to come. It’s not a switch that we can flip overnight and make all trucks electric.

Jamie Irvine:

Is it 2035 or 2045 that California wants all new, new commercial vehicles to be EV?

Gio Sordoni:

Yeah, by ’35 it’s 50% of the fleet okaying and by ’45 it’s hundred percent, sorry, not of the fleet, but of, of new vehicle purchases.

Jamie Irvine:

New vehicle purchases. Okay. Still SIL ways out,

Gio Sordoni:

Still a ways out. Yeah. So percent of all, all vehicle purchases or commercial purchases in the state will be zero emissions. And by it’s

Jamie Irvine:

Can I ask another question and excuse my ignorance on this, but I know like I’ve got clients that live and work in California, they have brownout in the summer. We’re gonna have to rely on governments and the public sector to invest in infrastructure. Are they gonna be able to pull it off to invest in the infrastructure necessary as so many vehicles go EV or is it gonna have to be like a public, private partnership to get the job done? What are your thoughts on that?

Dakota Semler:

Yeah, I’m happy to happy to respond on this one and I’m sure Gio can add more clarity. It’s really gonna be a public private partnership. So when you think about the electrical grid and the grid that supports charging infrastructure for medium and heavy duty vehicles and even light duty vehicles, there’s three main components there’s generation, which is the generation source of the power there’s transmission, which are those high voltage lines that you see carrying power of long distances from the generation source to the consumption source. And then there’s distribution generation and transmission are not as constrained as we are led to believe. There’s really lots of fungible capacity in there and projects coming online all the time that are renewables as well as conventional generation that are coming into our transmission system. What’s constrained is really the distribution. And we like to think about it as the last mile of electricity.

It’s getting electricity from those regional substations to the fleet where they’re consuming them. And it’s not just one company that’s going to be able to solve that problem. And it’s not just one government. It’s gonna take a network of regional utilities, local utilities, governments, as well as companies like us to develop solutions, to make sure that infrastructure is ready for when vehicles arrive. And we’ve already started to see that there are constraints on the distribution infrastructure. So we’ve even developed products to address and respond to that need like our Xos hub, which is our mobile energy storage and charging infrastructure system. So before fleets have permanent infrastructure ready, if the timelines are taking too long for the utility or building department to approve that infrastructure, we can actually drop a unit that will have up to five portable charge heads with the energy storage on site. So fleets can start charging their electric vehicles within a single day after getting those vehicles delivered. So that’s why we think it’s gonna be a collaboration between companies like ourselves as well as utilities and governments to really make this happen.

Gio Sordoni:

Yeah. The only thing that I would add is that the dramatic drop in battery prices over the last 15 years has spurred the electric vehicle revolution, but it also makes affordable energy storage a reality for fixed assets. And that’ll transform the way that the grid works, whether it’s at the utility level and there’s, you know, a massive bank of batteries or even at the residential or Depot level, having that ability to take some storage on and to charge a vehicle for example, from that battery bank, instead of directly from the grid will have a huge impact on the way that the grid works and on the rollout of electric vehicles.

Jamie Irvine:

You’ve been listening to The Heavy-Duty Parts Report. I’m your host, Jamie Irvine. And we’ve been speaking with Dakota and Gio who are co-founders of Xos to learn more, visit XOStrucks.com. Links are in the show notes. Dakota, thanks for being on the show. I really appreciate your insights.

Dakota Semler:

Thanks Jamie

Jamie Irvine:

Gio, thank you so much. It was a real pleasure talking to you.

Gio Sordoni:

Thank you.

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