Published on August 27th, 2016 | by Scott Cooney0
Interview With Ryan Popple, CEO Of Proterra (CleanTechnica Exclusive)
August 27th, 2016 by Scott Cooney
If you don’t know Ryan Popple yet, you should. In terms of movers and shakers in cleantech, Popple is a formidable force for good. A former partner at the VC firm Kleiner Perkins whose investment management areas primarily focused on late-stage cleantech transportation firms, Popple also served as Senior Director of Finance at Tesla Motors, helping bring the company from pre-revenue to $100M+ and ultimately to an IPO.
Popple serves on the EV Strategic Council, and is the CEO of Proterra, a pioneering Silicon Valley–based electric bus manufacturer, which has made waves with innovations as supercharged as mobile charging for 24/7 bus operation and fiberglass bodies that are corrosion resistant and lightweight for maximum MPGe.
Recently, I had the great pleasure to sit down and talk shop with Popple about buses, the future of cities, the amazing divergence in American politics, and the recent Dieselgate fiasco that has made selling electric alternatives to diesel much easier.
Give us a snapshot of where Proterra is today, and what you’re seeing in the pipeline from customers buying buses?
We’re approaching 300 confirmed orders in the U.S. market. The growth in the last 18 months has been a tremendous validation of our strategy that EV is the most economically and environmentally efficient mode of mass transit.
We’re already operational in a dozen-plus U.S. cities, and we have another two dozen we’re building and shipping now. We’re in Washington, California, Nevada, Texas, Florida, South Carolina, Kentucky, Tennessee, Massachusetts. In the last two months, we’ve added more orders for Florida, New York, DC, Illinois, Utah, Delaware, Louisiana, Texas, California, Kentucky, and Washington State. Every transit fleet that has seriously studied this technology acknowledges that EV is the future of this market. We’re seeing action plans, board resolutions, community support, and regulation moving in the direction of Zero Emission EV.
There are only a few transit agencies that don’t seem to get it yet, but you always see that in a market. You have leaders and laggards. I’d say we’re deploying with the leaders, the early majority, and increasingly mass market type buyers. You have a few laggards out there, but the market has shifted.
By 2020, every major fleet should be in implementation mode. By 2025, I think 50% of new purchases will be EV. Diesel, hybrid, and CNG will go completely extinct in transit, starting in 2020. By 2030, there may not be a diesel on the road in California and Washington State. The cycle will start accelerating. Diesel bus manufacturers’ growth rate will turn negative, they will lose access to bank and equity capital, and they will go bankrupt. As the supply shrinks, the cost of fossil fuel vehicles and spare parts will inflate, further disadvantaging the legacy tech. I would not want to be the last agency to purchase diesel or CNG. The residual value of that tech will be zero. You’ll have stranded assets, like CNG fast fill stations with nothing to refuel. Diesel spare parts that get auctioned.
How can we in the media and activists in communities help more cities go electric with their public transit?
Become educated, and take action. Too many laggard transit fleet managers operate like the purchase capital is “their money.” In reality, it is your money. Your tax dollars, your fare box fees, your city roads. Media and activists should ask hard questions whenever a public agency wants to throw money away on the old tech.
The total cost of ownership is now 18% better for EV than diesel, CNG, or hybrid. So a public fleet is wasting your money by not taking EV seriously. It isn’t just about air quality and climate, it is taxpayer stewardship. Attend your local transit board meeting, and let the board know what YOU want.
I saw a great example of this in Park City, Utah. The local community there is very active and green. They wrote letters to the newspaper, talked to their city officials, and attended EV test rides. Now, Park City is receiving its first brand new EV buses to replace dirty diesels. It was a collaboration between the public, environmentalists (like POW), city leaders, and transit managers.
What are the economics of the public transit equation for a city/municipal transit authority with regard to buying a bus? The lifespan for a diesel … what does that look like in terms of financials as well as pollution in the cities?
A diesel bus lasts 10–12 years. It requires a major overhaul on the engine and transmission at midlife. CNG engines are lasting less than diesel engines, so their maintenance costs are higher than diesel. Our lightweight, composite/carbon fiber body will last 18 years. The batteries can last between 6 and 18 years, depending on the chemistry and the duty cycle. We let customers specify the battery warranty they want, and some customers are now leasing the batteries so they don’t have to worry at all.
The upfront purchase cost of our EV bus is about the same as diesel hybrid. When you include infrastructure cost of CNG, we are cheaper to install and deploy than CNG. We save cities $1/mile on fuel & maintenance compared to diesel, CNG, or hybrid, and a typical bus runs 40,000 miles per year. So the cash savings for a city is hundreds of thousands of dollars over the bus life. That’s why we’re beating fossil fuel — we’re clean, quiet, green, cool, high tech — AND CHEAPER.
I saw that your buses made a starring appearance at the DNC convention. How did that come about, and what are you hoping to get out of the partnership?
We have a new customer, SEPTA (Southeast Pennsylvania Transit Authority, the largest fleet in Philly), that is replacing overhead wire trolleys with our EVs. Since the DNC selected Philly, and wanted to host a conference that emphasized environmental sustainability, the partners in Philly, including SEPTA, wanted to show off their greenest innovation. The local energy company, PECO, is an Exelon subsidiary, and they too wanted to be part of the story of energy technology. It all came together really well, and we were proud to help leaders in the Democratic Party experience new technology.
The media response and social media was terrific. A few of our team members, Candace Branch and Eric McCarthy, were working around the clock to host and explain the product to DNC delegates. The South Carolina DNC delegation, including Marguerite Willis of Florence, South Carolina, were very proud, because that vehicle was manufactured in our South Carolina vehicle assembly plant.
Were you not also invited to the RNC convention?
We were not invited to the RNC convention. I didn’t get the impression that technology or sustainability was part of Mr. Trump’s convention. If we were invited, like Apple, we may have bowed out. I wouldn’t deploy our product at an event that facilitates denial of science and climate change.
It is unfortunate, I have a lot of friends and family members that used to vote GOP. I’ve voted GOP in past elections, but I’ve found the party lacking leadership on energy technology and environmental stewardship since then. The GOP is losing credibility, in my view, by denying obvious science about climate change.
Climate change is absolutely occurring, and at a frightening pace. We’re already losing shellfish production on the West Coast, near where I live. California is parched by drought, ravaged by the largest fires our first responders have ever experienced. The data are statistically irrefutable. It’s just chemistry and math.
Whether he wins or loses in November, I hope a new GOP emerges from the Trump candidacy, and rejects concepts like Drill, Baby, Drill. The U.S. oil sector has cost investors more losses than a thousand Solyndras. China is playing to win in the 21st century energy game, we’re arguing about coal mining jobs that don’t exist and never will again. Air quality is the number 1 cause of preventable death in our cities.
The Republican Party really frustrates me as a technology company CEO. I’m a technologist, a veteran, an Eagle Scout, an outdoorsman. I can’t imagine raising kids in this country and not teaching them to fish for king salmon in Oregon, surf in California, climb at Yosemite, snowboard in Utah. Where are the original values of the Republican Party these days, where is Theodore Roosevelt? He was the ultimate Republican environmentalist.
If you love this country, protect it, defend it. Like they say, “Don’t mess with Texas.” Patriotism is more than just yellow ribbons and flag waving, it is having a love and passion for the land and earth we’ve been blessed with. We are the stewards of a beautiful, powerful country — our job is to ensure our great-grandchildren inherit a country that is valuable, not drilled out, blasted, polluted, depleted. Look at what Haiti has suffered due to deforestation alone. Had Republicans like TR not been there to take on Big Timber, we’d be a larger version of Haiti, environmentally.
Diesel’s current “black eye”: is the VW scandal giving electric vehicles a better outlook?
Absolutely. Many impacts due to the VW fraud. Number one, it exposes that we can’t trust the big companies to not be biased by their economic interests. Number two, it shows that internal combustion is not the path to a clean planet or avoiding climate change. VW was a powerful voice in blocking progress, they continued to claim that “diesel could get there” from an efficiency perspective.
We see the same nonsense from the CNG vehicle industry. Their new claim is that CNG vehicles will eventually run on green biogas, not fossil fuel methane. It’s a spurious concept, as there isn’t enough biogas production or distribution to enable ground transport to shift to “Green Gas.” Green gas also needs an incredible amount of cleaning to run in a vehicle engine, as there are too many impurities in it. It reminds me of the corn ethanol industry — lots of talk about future cellulosic ethanol, as a cover to ship corn ethanol and win subsidies.
Finally, the biggest impact of VW’s fraud is that it put a spotlight on the health impacts of diesel and fossil fuel exhaust in general. Our inbound email traffic jumped up after VW’s scandal, because every city was suddenly aware and talking about diesel pollution. EV was already disrupting diesel, but VW hammered the nails in the coffin of that category.
All of a sudden, everything started making sense. How could London or Paris have unhealthy air? France has a low carbon grid, yet air quality in Paris is awful. Very simple — the diesel engines were much dirtier than claimed. Europe took the diesel car path, and it was a huge mistake. They trusted companies like VW, and that was a mistake. It will take decades to fix, and a lot of kids and adults will be less healthy because of this. If you aren’t outraged, you aren’t paying attention.
How do you feel about the VW settlement? Is it fair? Being used effectively?
I think we should use the VW funding to clean up these cities. Obviously, it would be nice to see funding go toward city buses. But I’m supportive of anything that gets air pollution away from our environment. California uses diesel generator stations to pump water, so let’s get rid of that junk and install solar + battery systems so we stop pumping more pollution into the Central Valley air basin.
I’m not into handouts, so I think we should take a market-based approach. Put the settlement into a trust fund, like they did with Big Tobacco, and then let projects compete for it. Leverage some private capital too. We could do a project that takes VW settlement funds, adds a large green bond, and replaces via Project Finance every diesel bus in the State of California. Let’s do it, go big or go home.
As the CEO of a cleantech startup, what advice would you offer to others in your position that are working to make the world a better place while also trying to maintain shareholder value?
Great question. Priority one, make your company a commercial success. Focus on having a great product, a huge technology advantage. Hire the very best people. Keep the bar high. It isn’t pleasant, but you can’t be patient about performance. Technology companies are very demanding, we aren’t chasing 3% year over year growth, so the people you hire have to be better than the people that staff mature companies. I emphasize company performance first because you won’t get extra credit for being a ‘green’ company. There is no such thing as clean tech. Just tech. Proterra is a tech company that has a superior technology for urban transit. Are we a sustainable company — of course. We wouldn’t bother working on the future of transportation if we weren’t taking on pollution and climate change.
I emphasize this company performance point because this isn’t easy. Big Oil, Big Coal (now bankrupt), politicians, diesel OEMs, they all want you to fail. When you do fail, they will point to your company as an example of why we can’t change, why we can’t move away from fossil fuels. If you’re going to work in technology, and take on the largest, dirtiest companies out there, you are David vs. Goliath. You’ve only got one shot, so you better make it count.
The good news is that tech and science are on your side. Your opportunity is to exploit the bias these large industries have to not innovate. They are fat, dumb and happy. Focus, concentrate, and out-work them. I work seven days a week, I dream about Proterra in my sleep. I’m smarter than my competitors and my passion for the environment drives me to work harder than they would think possible. That’s what I hire for in my company, and that’s the culture we’re building. We talk about why we come to work, and why this matters.
That’s a big advantage, a lot of people at big companies are just punching a clock, they are bored half the time. We offer a purpose, a mission, meaning to our work. That’s a big deal, especially for Millennials. The story of Proterra’s success has very little to do with me, I’m one of 200 team members, and they are excellent. I would bet on them whether or not I was running the place.
Check out our new 93-page EV report, based on over 2,000 surveys collected from EV drivers in 49 of 50 US states, 26 European countries, and 9 Canadian provinces.