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Applying EV lessons to the built environment, with Scott Case.
In this episode, show host Jeff Nichols widens the aperture by looking at the transportation sector to better understand the complex future of sustainability—and EVs provide a timely example. You’ll meet Scott Case, Cofounder and CEO of Recurrent. Scott, a former colleague of Jeff’s became an innovator of smart energy solutions well before they were a thing back in 2008. After a successful run at his first startup, Energy Savvy, Scott began to focus on what problems needed to be solved to help consumers confidently make the transition to electric vehicles (EVs). What he found was an untapped market for EV education and the need for a common understanding of battery life giving consumers a more accurate gauge of their EV's secondary market value. In 2019, Scott co-founded Recurrent, a platform that quantifies the value of and enables a robust market for, pre-owned EVs.
Chaos, rebates, credits, and incentives
Like energy tax deductions and credits for buildings, EV incentives are also subject to enormous changes in today’s political environment. EV incentives are unique in that they were designed to encourage price parity between EVs and (ICE) vehicles while also encouraging manufacturers to move their battery and vehicle production and assembly plants back to US soil. Scott shares examples of how this has worked and where there is risk should the current administration take a more aggressive stance on rolling back these benefits. Scott and Jeff discuss other important variables to consumer EV adoption, such as charging infrastructure (or lack thereof) in markets where EVs have lower adoption rates, and where Federal programs like NEVI (National Electric Vehicle Infrastructure) are beginning to gain traction in partnership with private investment, improving access to reliable charging stations across the US.
Team Red, Team Blue
Scott points out that NEVI greatly benefits states and regions with lower EV density and describes why states with Republican majorities may have the most to lose if the current administration pulls the plug on EV incentives. Scott sees a future with more affordable pre-owned EVs becoming more available to those ready to switch. The macro-economic implications of EV adoption are also clear with an estimated 175,000 EV-related jobs created in “Red Team” states as a direct result of the provisions within the 2022 IRA. Scott urges lawmakers to listen to their constituents and take caution with any proposed rollbacks of EV incentives.
Circling Back
Cars are emotional purchases for people which is an interesting dynamic when it comes to making the switch to an EV—will folks go back to ICE vehicles once they’ve experienced the benefits of their EVs? Scott and Jeff discuss whether the growing passion for EVs will have an impact on the demand for more efficient homes and buildings. How does this growing wave of passion for EV adoption apply to “tenant” awareness and passion for more efficient and sustainable spaces?
- Follow Jeff on LinkedIn (https://www.linkedin.com/in/jeffersonnichols/)
- Follow Scott on LinkedIn (https://www.linkedin.com/in/scott-case-193139/)
- Learn more about NEVI (https://afdc.energy.gov/laws/12744)
Listen and Connect
If you have questions or feedback for the Reframe team, email reframe@pilotlight.ai. You can also follow the podcast through your preferred app to stay updated on future episodes.
Reframe is hosted by Jeff Nichols and presented by Pilotlight.ai
Creators and Guests
Host
What is Reframe?
Reframe is the podcast about building sustainability.
Commercial and public buildings are among the biggest producers of carbon emissions. It’s a problem of massive scale. But, for building owners, engineers and contractors, solving it may actually be more of an opportunity than a challenge. That’s what the “Reframe” podcast is all about. Join host Jeff Nichols on an exploration of the forces driving sustainability in our built environment. And meet the people who are leading the charge.
Reframe Pod Ep7 - Chaos Monkey with Scott Case
[00:00:00] Jeff: I'm Jeff Nichols. Welcome to Reframe. In today's episode, we're going to broaden the aperture on the climate change fight and look at a different marketplace – transportation, electric vehicles, to see what we might take away and apply to the building sector. So I am really excited about my guest today. Uh, and honestly, I'm a little starstruck.
[00:00:41] You see, I've been a fan of Scott Case for a long time. We both worked at Microsoft after Microsoft's $6 billion acquisition of aQuantive in 2007. And Scott started in tech and online advertising, but he made the leap into climate and energy efficiency long before it was even a thing. Uh, and I've long been interested in making a similar jump.
[00:01:04] But Scott was one of the first to make that shift and I've admired his journey ever since. Scott led a product management at Microsoft before he took his first step into entrepreneurship with Energy Savvy, where he served as the COO guiding the company from a concept to a successful exit in 2019. Now as the cofounder and CEO of Recurrent, he's shaking up the used EV market with data driven insights.
[00:01:31] Today's conversation should be a fascinating dive into climate change, energy efficiency, the role of incentives, and more. And what we might learn from the EV market and apply to building sustainability. Scott, it is an absolute pleasure to have you on the show. Thanks for joining me.
[00:01:47] Scott: Good to see you again.
[00:01:48] It's been like 15 years, I think. It's been
[00:01:51] Jeff: a little while. I would love to go back actually and just kind of get some of that origin story. I'm really. Curious, what landed you on EVs besides kind of personal interests? Like what I'm kind of looking for is like, what is the bigger why? Besides efficiency and kind of nerding out on this stuff.
[00:02:06] Like, is there a bigger why or what, you know, what is that driving force behind all your hard work?
[00:02:12] Scott: Yeah. So ran Energy Savvy for 10 years, 20, 2009 to 2019. And, you know, when we exited, uh, it was like, all right, well, we obviously didn't fix climate. So what's the next way to chip away at that problem? You know, I'm a pretty pragmatic person and I, you know, I'm, I'm, I'm just looking to grind out the next five, 10 percent case to reduce emissions.
[00:02:35] And I'll be happy if this is my entire career doing that, you know? Yeah. So. Why EVs in particular, you know, huge source of transportation emissions, obviously. And the funny thing is, I wasn't an EV early adopter. Uh, at the time I lived in Seattle in a 1923 Craftsman with no garage, no driveway, uh, off street parking was on the other side of the street.
[00:02:56] So as much as I wanted to buy an EV, like there was just, I was, it was not happening. However, in 2019, you know, I was sort of like looking around kind of paying attention for the first time and going, Oh my God, there's batteries everywhere on the roads now here in Seattle, you know, Seattle, obviously the leading market for that, but that sort of showed the path of where everybody's going to be in sort of five years.
[00:03:18] And so I was like, all right, gosh, I'm not a guy who's going to go and build a car and I'm not like a battery chemist. So I'm not going to like go and figure out the new cathode or anode material to make a more efficient battery. But what I can do is, you know, Consumer engagement and understanding how to build really cool and compelling web user experiences and how to bring a product to a, to a difficult market where there's a lot of people used to doing things the way they've been doing it for 100 years.
[00:03:44] And, you know, I think that that. The corollary of grinding away at energy efficiency, working with utilities that only ever done things the same way for 100 years, a lot of corollaries to like going into the, the auto industry and trying to create a change with auto dealers and, and, um, you know, car companies that have done just, they've been great at building and selling, uh, combustion engine cars for 100 years.
[00:04:13] And so. Now all of a sudden it's changing for the first time in that period and, and we're right in the middle of it again. So, um, I, I don't know if I'm, I think it's just like I'm an idiot and I can't avoid like these kinds of situations where I'm the poignant of the spear into these old school industries that have just been the same forever.
[00:04:32] And now they go through the once in a hundred year transition and I'm the first one through the, through the gap basically on that.
[00:04:38] Jeff: Yeah.
[00:04:38] Scott: But here
[00:04:39] Jeff: you're my kind of idiot then because I, I'm a fast follower on, uh, on that front. Talk to me a little bit, you know, how would you explain recurrent? What are you guys trying to provide in the marketplace?
[00:04:52] Scott: Yeah. Well, I guess like, because I wasn't one of the first people thinking about building and charging infrastructure or building batteries. I kind of had to look around in 2019 and go, okay, well, what problems need to be solved in the, uh, auto ecosystem to allow for this transition to accelerate, you know, the problem actually, I originally wanted to solve the, the company that I, that I sort of started out researching when I was spent time at University of Washington's Clean Energy, Energy Institute in 2019 was I wanted to do a business where I was reusing decommissioned EV batteries in, um, stationary grid, Storage.
[00:05:29] So lots of renewable energy flowing onto the grid problem is like, there's this mismatch of when, you know, the sun shines and like really intensely in the middle of the day, but then, uh, peak power usage tends to happen later in the day when the sun's going down. So this is, you need a lot of battery storage to be able to do that.
[00:05:47] And I thought, you know, working with utilities for 10 years, I'm like, Oh, yeah, utilities are so cheap, they always want to go for the lowest cost solution to the problem. And so my thought was, if you could take the decommissioned EV batteries and reuse them for grid storage, like that's a way to have a lowest price bid on on those kinds of contracts.
[00:06:09] So that was what I started out thinking about. Ultimately, I concluded that that it was too early for that, just because there's not enough decommissioned EV batteries out there to sort of build a scalable business. Now, other other companies have actually gone and done that in different ways. But like, that was sort of my conclusion.
[00:06:26] However, in the process of doing diligence for that company idea, I started to look at used EVs because used EVs are basically inventory in progress to becoming decommissioned batteries. As a general rule of thumb, an EV battery is good for transportation purposes for 10 to 15 years, kind of depending on, you know, the, how it's used and, and how it's, and the materials and everything like that.
[00:06:49] And then it's probably good for another five to 10 years in stationary storage because the velocity of pushing power in and out of. The lithium ion cells is less in grid storage than it is for transportation purposes. And so they can do that for a while longer and then eventually can get recycled or, you know, into, into component materials.
[00:07:08] So it's like on paper, it's definitely a great, you know, idea, but it was too soon for me. Digging into just some like inventory and progress, like I said, for decommissioned batteries, I was looking at Nissan LEAF listings on Craigslist and people were describing them in weird ways that I'd never, you know, I've bought and sold cars on, on used cars on Craigslist before.
[00:07:30] And I was like. What do they mean when they say it has 10 bars? Like what does that talk? What are they talking about? Or, or people asking questions when they went to buy a used EV that they had never asked before, you know, like, how's the battery? What range am I going to get from that? You know, how do I charge it?
[00:07:50] How fast can I charge it? All these other questions, like honestly, the Auto dealers that are in the middle of this massive, massive used, uh, car market never had to answer those questions. And here's like a key difference that excites me about the EV space versus energy efficiency is we had to try and convince people to care about energy usage in their homes.
[00:08:12] We didn't have to do anything around consumer education about the problem of buying a used EV. Everybody's had, you know, a series of iPhones basically over the last 15 years and laptop computers and things with lithium ion batteries and they get that over time the battery wears down and it doesn't hold its charge as long so you can't talk all day in your phone and so people have gone into the EV buying space.
[00:08:39] thinking, you know, Oh, this is an iPhone with wheels on it. So I'm going to ask those questions, especially if I'm buying a used one. I don't want to buy the, uh, buy the car and then have to replace the battery in three years, like I have to do with my iPhone. It's going to be too expensive. So there is, it's just like incredible.
[00:08:56] situation where, uh, the consumer education was done for us by basically Apple and the iPhone sort of roll out over the last 15 years. And then, and then there were no answers, you know, for it. And so what I realized was that the used. The used EV market was being held back from kind of being a liquid high functioning market because there was this mismatch of questions and answers there.
[00:09:20] And so I was like, great, that's a market need. Right. And, and, you know, to get back to why that's important for climate emissions, well, The used car market is in a lot of ways more important than the new car market. Like if you think about it, every car can be sold new once, just definitionally, but cars get sold two or three or more times used.
[00:09:40] And so it's a much bigger market by numbers. Um, and, um. You know, so we thought like, gosh, like, um, that there's a, there's this great market opportunity. There's just this information disconnect. What was happening, uh, frankly, and it's still happening. I think more than it should, is that EVs depreciate faster than combustion engine cars for the first three years.
[00:10:02] Um, And a lot of that is not all of it. There's some incentive story in here as well, which I know you want to talk about, but a lot of it is because of uncertainty around battery life. And so we're like, gosh, if we can create certainty around this and, you know, here's like a spoiler alert that EV batteries do not wear down like your iPhone does.
[00:10:21] They hold up for a lot longer. And so if we can create certainty around here and sort of alleviate that question people were asking, that means less depreciation in the first three years, which means it's more attractive for leasing companies and car buyers to buy new EVs, which means that the overall EV adoption picks up and goes more quickly than it would otherwise.
[00:10:42] So that's why we felt that needed to be something that worked really well in order for this, you know, EV transition to happen. I bought
[00:10:50] Jeff: my, my first TV in August using Recurrent and even, you know, simple things like, you know, you always look at mileage as a proxy, right? That's not always a good data point when you're buying a used EV because if it's been sitting and weather plays such a huge factor, like, that's what I found fascinating, kind of go through my own, you know, purchase decision.
[00:11:15] Um, and I, I bought a decade old i3 this thing, but I, what was cool was I was able to check, you know, BMW makes it a little bit difficult to, to check, you know, how, how, um, how much capacities left. But, you know, I said, look, even if I get five years out of this thing, I think it was listed for like 11, nine.
[00:11:35] And then I got. Not quite the full 4, 500, you know, used EV credit, but it was like 7, 500 bucks. That's one of the best car purchase decisions I've ever made. And so there's still a need. I think there's a lot of misperceptions because you're trying to transfer like again, this internal combustion kind of world or paradigm into something that it's similar, but it is very different.
[00:12:00] In terms of how the cars operate. What are some things that have surprised you as you've been on this journey with Recurrent? Like what, when you look at like consumer behavior and what you actually see evolving, what stands out to you?
[00:12:14] Scott: We've been on the journey now for four and a half years. Like everything that I theorized in day one that was going to play out, In the industry and for the company essentially has the only thing that's happened is like it's all happened a little slower than I thought.
[00:12:27] And I think that that's the willful entrepreneurial hubris that you have to have to think, you know what, the last one was a grind. This one won't be a grind. It's going to go way easier, you know, and, and It's not surprising that I've been surprised by that, is what I'll say. Uh, I was surprised when the Inflation Reduction Act came in.
[00:12:46] That was, like, passed into law in the middle of 2022, so it was two years, over two years after we started the company. And really just, like, put the wind, you know, in the sails of New EV sales and used EV sales and in a way that we weren't expecting, you know, and so that, that kind of supercharged things, I'll say supercharged and also just kind of threw a chaos monkey into everything for the last couple of years.
[00:13:10] And then what's about to happen of like that getting unwound by the new administration is like a whole different chaos monkey, you know, in terms of the market and the impact that it will have so. All of that was a real surprise, you know, we, and we just thought, well, gosh, this is great. This business was going to work anyway.
[00:13:27] And, um, and now we're getting a whole bunch more supply on the roads more quickly than we thought. And then the way that some of those federal incentives were structured is actually causing EVs to show up more quickly in the use market than, than the average combustion engine car does. And so that just means that even the new EV rebates basically are causing a very quick growth in the use space.
[00:13:51] And then the used EV rebates are sort of making that more accessible for everybody. So, uh, yeah, it's, it's that all of that has been a real surprise for me. Eye opener. Yeah.
[00:13:59] Jeff: So let's dive a little bit more on incentives. I mean, I think both you and I, we, the perspective, you know, do economic incentives, do they make a difference?
[00:14:07] I mean, going way back to college. I think my, my thesis was on, uh, the effect of bottle deposits. There were only 13 states that had bottle deposits for recycling. And so I believe it or not, nobody really looked at do they actually drive recycling rates? Well, the answer is yes, it actually does make a material difference.
[00:14:28] So that's, that was my first kind of like, Oh, I mean, it seems pretty straightforward, but I, it's surprising me that there are those out there that think that it doesn't. Have any impact when you think about incentives, what role have they played? And if you look at other sectors where incentives play a really, you know, key role, like, what do you think, what learnings are there from kind of looking at the EV marketplace?
[00:14:53] Scott: EV incentives didn't start under in the inflation reduction, reduction act. Um, all Obama years, there were, there were tax credits that were placed on, uh, new EV purchasing. And that was like back in the day, it was a tax credit. You filed it with your taxes. You did. That's right. Yeah. But one thing that was really key, and I think like the reason that it was originally, they originally did this is each vehicle manufacturer could sell no more than 200, 000 cars with that tax credit.
[00:15:23] And then after that, you would lose access to it. And so Tesla was the first one, you know, that hit that threshold. And then, um, uh, I'm pretty sure Chevy hit it as well based on their bolt sales. It was very much designed to be a kind of a ramp up the industry sort of thing because they realize there's like, there's so much, uh, infrastructure and economy of scale and everything like that, that's, that's supported combustion engine car sales for a long time that like, this was one small way that, that the government could essentially like help.
[00:15:57] You know, the EV industry sort of over that, that early adoption hump by bringing down the cost. And so they did it mostly as a consumer tax credit, which I think like certainly helped things it, you know, on the margins, it made it. Easier to buy an EV, but mostly only if you were already kind of like rich because it was only done as a tax credit.
[00:16:19] And if you couldn't, if you weren't paying, you know, at least 7, 500 on your income taxes already, like you couldn't benefit from it. And plus it wasn't like money in your pocket right then to help with the purchase. So, I mean, there were limitations to how it was originally done, but you know, that was like, it was meant to like, Hey, we're, we're, we're kickstarting a new industry.
[00:16:38] And that's, I think like incentives done really well. With that kind of a mechanism are, you know, are, are, are smart. And then it's like, Hey, like over time after the first 200, 000 units, like you better be able to stand on your own or not. And so, you know, I think Tesla benefited immensely from that, you know, for the first, for all those, those, those early years.
[00:16:59] You know, and then, and then I think the other manufacturers were beginning to, but then like Tesla had to stand on its own after the first, you know, 200, 000 cars. Now, when the inflation reduction act came up, it was worded differently, but there were kind of like the, and the details looked like, Oh, great.
[00:17:16] Like, uh, 7, 500 on a new car. Uh, whether it's purchased or leased a 4, 000 on the used car and, you know, it's no, no more caps, you know? So there's like, there's the, like, this is just an ongoing thing. That's sort of like what it looked like. And there were some income restrictions and things like, you know, on the use side, like you can't, you can't, uh, you can only apply a tax credit, you know, to a car once you can't just like keep on selling the car back and forth between you and your cousin and each taking the
[00:17:44] Jeff: 000.
[00:17:45] Totally.
[00:17:46] Scott: Yeah. Like there's all kinds of things. There's all kinds of things, but however, at least for the. the new side of things, like there was still that idea that there would be this phase out or like it, but in a different way. So the new Evie, uh, uh, originally tax credit, then it went to a point of sale rebate.
[00:18:03] Um, it's called the provision was 30 D starting in 2023, there were sort of some. extra sourcing requirements that were applied. And then beginning of 2024, it got tightened up even more. And then in the beginning of 2025, it got tightened up even more. And what that was all designed was to basically, uh, give manufacturers an incentive to onshore production of as much as of the batteries and the vehicles, and then Also bring the sourcing of the battery components that is like the most important piece and the most expensive piece of this stuff into the US and into free trade countries that are like kind of follow great labor practices and everything like that.
[00:18:47] And so that was basically the ratchet that the policy used over time. And so like. So in a sense, there was a phase out for like manufacturers and battery sourcing, um, things that weren't like following kind of like weren't benefiting the U S economy and like, weren't sort of like following the best practices for, you know, sort of human rights and social things.
[00:19:08] The other one, 45 W sorry, if you, if whoever's listening to this, like. You are such a fricking nerd. Like if you are still listening and as I sit here and quote IRS legislation numbers, but 45 W was like, if you did the same thing from a leasing perspective, now that one did not have all of the sort of manufacturing requirements and the sourcing requirements or the income limits.
[00:19:34] Frankly, the, the, the loopholes in that were what. just about caused Joe Manchin to leave the Democratic Party because he was so mad that those loopholes were in there. However, it too had a, uh, a sort of a quiet phase out mechanism. And that basically was like, once a year, the IRS would look at what the price parity was between an EV and a combustion engine car.
[00:19:57] And every year, once that got started to get closer and closer, the, the, the lease credit would get smaller and smaller and smaller until we were at price parity. And then that, that, that credit worked itself out. It just went away at, at price parity. That never had a chance to happen because, well, like. At this point, the Trump administration is planning to, you know, put a bullet in it.
[00:20:17] Um, before that, that phase out got a, got a real chance to happen that, that definitely had, you know, a similar kind of, uh, self reinforcing mechanism to phase itself out of existence.
[00:20:28] Jeff: Do you feel like in the EV marketplace, okay, the incentives, you know, has done that. And now the Trump administration, you know, phasing those out, you know, what, what sort of, what are people in the industry saying?
[00:20:38] Do they think it will have a huge impact or, or now it's like, it's, it's mainstream enough that people are buying it for not just the kind of economics.
[00:20:49] Scott: It's a really interesting question and hopefully, hopefully I won't just like hold forth for the next 15 minutes and we can actually make a discussion but be, because I think there's a couple of aspects of this so, first of all, you know, incentive design and like the repeal of them whether they're going to phase out on their own because things reach price parity like that was sort of how they originally done, or whether the Trump administration and the Republicans in Congress, sort of, you know, cut it or, or phase it out themselves.
[00:21:18] Um, I think that, that either way it served the purpose of sort of juicing, you know, getting, getting the, you know, priming the pump basically. What folks in the industry are saying, um, is, you know what, we can move on from this. Um, that's okay, but don't. Like pull the plug abruptly. And the reason that that, and so that, that argues for a phase out, it could be a, like a time based phase out or sort of step down, you know, something like that versus a, just like, you know, on February 28th, it's full rebate city and, uh, March 1st, it's nothing like, um.
[00:21:55] When there are big changes in sort of like effectively the price paid for it for a good, um, and those happen really quickly. There's a lot of volatility that sort of like snaps throughout this system. In this case, the auto ecosystem. And so From a dealer perspective, like to give you some sense here, like on January 1st, 2023, every used EV dealer that had EVs in inventory basically lost, you know, 7, 000 per car held in inventory overnight because all of a sudden the new equivalent dropped, you know, because that, you know, that, that, that credit was in place.
[00:22:32] Um, uh, You have the reverse of that now, potentially where like, when you remove the new credit, all of a sudden the use inventory goes up in price, potentially it's a little more mixed reality than that, but what we've been hearing for sure is just like, do what you're going to do, like, you know, but do it slowly and do it with a lot of notice so you don't sort of create winners and losers that are just that, that, you know, volatility is bad for the industry basically.
[00:23:00] Um, I do think that, that like, On the leasing side, in particular, lease rates for EVs and plug in hybrids have been off the charts high for the last, basically since the beginning of 2023, because of those favorable, you know, the Joe Manchin special, if you will, on the, on 45W. So, What that means is that banks like us bank and, you know, uh, ally and stuff like that, and then, uh, captive finance companies in the industry, meaning like, you know, not Ford, but Ford motor credit, not Volkswagen, but Volkswagen financial.
[00:23:35] Those. Organizations own a lot of EVs and plug in hybrids. And so at the end of the three years, you know, when you, when you, when your lease is up, um, you basically turn it back into them and it's their problem to sell it. And so, um, they do not want volatility. They want to be able to sort of write a, you know, sort of like at the beginning, they price the lease according to what they expect the residual value of the car will be after three years.
[00:24:00] And they don't want it to be high. They don't want it to be low. If it's low, then they lose money when they try and sell it. And it's just like, you know, they're just screwed there. If it's high, then the person who leased it will choose to basically buy out the lease and then flip it around and sell it for a profit right back to the dealer.
[00:24:16] So like they want it to be predictable. And that's where I think like you're seeing a lot of, Hey, let's sort of slow things down. And if you're going to make changes, make it slowly so we can sort of reflect it into the residual calculations. I think that's like one force that's saying, Hey, slow, do this in a, in a calm, collected way.
[00:24:36] And then the other force is like the manufacturers themselves that have put, you know, billions of dollars into, you know, factories and, and, uh, you know, um, Places to, to make batteries and assemble EVs. And a lot of those frankly are in Republican controlled house districts. And so, you know, you're seeing like the, the, the Republican representative in, in North Carolina, where, where, um, you know, Toyota is due to open a, uh, an EV battery plant, uh, this year that'll employ 5, 000 people like.
[00:25:08] In his district, you know, I'm not going to name the representative, but like, wow, you gotta be, that's, it's, it takes a lot of, of guts to go and say, you know what, like I'm going to cost my district 5, 000 direct jobs. And then all the indirect. Jobs like, you know, and you think about that, you zoom back and you think about the, that there are 175, 000 jobs in Republican house districts that were created, that are Evie related, that were created by the inflation reduction act, and all you need is two representatives in the house of representatives to, because it's so close to say, Hey, let's just do this a little bit slower.
[00:25:44] Like, I think that there actually is going to be some compromise around this so that it, again, it's a slower. Like backing out of the government intervention that's like really support at the beginning of the EV transition, uh, rather than an abrupt like rug pull.
[00:25:59] Jeff: I've spent a lot of time on the, again, IRS tax code.
[00:26:02] I can nerd out on 179D all day long, right? But these programs that benefit they benefit blue states and red states that I think the other day, you know, money talks like people will also kind of look at that and say, Hey, we maybe have a philosophical point of view on this. But then when the rubber meets the road, I think, you know, there will be change, no doubt, but it will look, I think, different than some of the.
[00:26:27] I
[00:26:29] Scott: guess the other, the other piece of incentive that's actually, I think, more impactful on EV adoption rate is all the money that, that the government put into, uh, is putting into or was putting into, um, charger infrastructure build out in, in sort of like underrepresented or underserved areas of the country.
[00:26:47] So there's like the Nevi program. Uh, it was really just getting going. So like last year, there were 12, 000. DC fast charging ports added, um, nationwide. Um, and just to put that in perspective, like the, at the end of 2023, there were only 37, 000 DC fast charging point ports anywhere in the country. So in one year we added 12, 000 of those.
[00:27:12] Nevi funding was barely responsible for any of those. It was like a less than a hundred, uh, new ports. We will actually see a lot more Nevi funded chargers open this year. Then what opened last year, it just sort of takes a while to kind of, to bake that in what I think the, the, the problem is like with all of this is that once an area like Washington state where I live, like, and especially the Seattle area, there's tons of EVs all over the place.
[00:27:40] There's enough of a critical mass to make it so that, uh, opening a charging station is. Profitable, basically, like it gets enough utilization rate that you can actually, you can make it pay for itself, right? If you flip that around though, like in, um, areas of the country that don't have as dense population of EVs, it's sort of a money losing proposition to, to open like a, Like a lot of chargers.
[00:28:07] And so, because they just don't have the same utilization rate yet. And so I think what was really interesting about Nevi funding, similar to rural rural electrification or rural broadband initiatives is it was a way to basically like give benefits to. Mostly red states that have lower population density and sort of like make it so that there was a, um, there was a, if you build it, they will eventually come in areas that didn't already have a lot of density there.
[00:28:35] And so what I'm really like, kind of afraid of at this point is that the market sort of like splits into, you know. Blue states that have sort of like pretty high population densities of EVs already where like the private market's totally fine and they're just going to like build charges all over the place because it's profitable to do so.
[00:28:55] And then red states that just weren't quite to that level of density of EVs that are basically going to all of a sudden be really underserved by the private market. And there's going to be this really long lag. Um, and that stinks because It's just not fair. It's not fair to the people that do want to have EVs in those areas.
[00:29:15] So I think you could sort of end up with a very wide disparities between red states and blue states and EV adoption, um, that are not just a cultural thing. I think it's just like, it's just going to be sort of an infrastructure thing. Um, but you know, you can still like 80 percent of EV charging happens at home.
[00:29:33] And so. A two 300 mile car. I think a lot of people in red states will have like two cars. Uh, they're going to have their F one 50 pickup that they take on the long trips and they tow their stuff. And then they'll have their, you know, their around town car. What do you have with the I three? That's like, totally fine for 100 miles, you know, or 150 miles and you'll just, and that'll be, that's basically like the rural, the rural plug in hybrid is like one ice car and one EV and just, so I think that's ultimately probably fine.
[00:30:04] Jeff: Let's dive into Consumer mindset and how it maybe has shifted. My, my perception is this, that, you know, at the beginning it really did start with higher, you know, ideological goals. I want to feel good about my impact and, you know, EV is, you know, less contributing to greenhouse gas emission, the climate change, you know, there was a segment of the market where I think purchase decision was driven on that.
[00:30:30] My view, even my own personal experience is that I think actually that is. It's becoming further and further, you know, down on the list of, yeah, it still feels good, but it's more, this is fun to drive like zero to 60 and you know, however many seconds, like it's just, it's a better experience.
[00:30:50] Scott: What is your zero to 60 in your 10 year old I three?
[00:30:53] That's I'm pretty curious about that.
[00:30:56] Jeff: Like a Tesla plaid mode or whatever, but it's still quick. It's faster than, you know, my Volkswagen put it that way. So it's still a blast to drive. I, we, we call it, we call it the little rocket. That's what we call it.
[00:31:11] Scott: I mean, I've always been of the mind that, that EV adoption is a big tent.
[00:31:16] Like I don't care what motivates individual people. I think you're right. I mean, the, the tree huggers and I'm. Absolutely one myself, you know, are like, I want to do this because I can feel good about myself for not having the same carbon impact when I go, you know, drive from point A to point B. And so I can have my little smug tree hugging moment, right?
[00:31:36] There are people that like you, you know, or like. I love how zippy it is, and it's like fun to drive. It's like a more pleasant driving experience. It's quieter, you know, I don't like the smell of gasoline, you know, so I don't like to go to gas stations anymore. But there's also people who are like, I save money.
[00:31:55] You know, it's way cheaper, way cheaper to not have to gas up your car all the time. There's a convenience thing like I, you know, my, I literally walk out my door and, uh, every morning and the, the, the tank is always full. I never have to stop at the gas station, you know, and or wonder where one is like in, except in like the, the 1 percent of the time where I'm like going on a road trip, right?
[00:32:16] If you really think about your overall sort of like use of your car. I think there's a really interesting energy independence argument, like, you know, every bit of electricity that I use in my car is like 100 percent American made electricity, you know, that's, that's, that's, that's meaningful to some to some people, like, I don't want to send money to the Middle East, I don't want to send money to Russia for for their oil, you know, um, so I think there's that, that's a, that's an angle as well.
[00:32:44] And again, like, I don't care why people like individuals make their choices to go from a ice car to an EV. I think it's like, it shouldn't be a political thing. Um, and I think it's less and less is, uh, especially with Elon's turn to the hard, right? You know, um, it's getting more complicated for sure.
[00:33:01] Jeff: Fascinating, right? Like all the original Tesla, you know, buyers that now they're kind of like, Oh, well maybe Maybe we need to make a change there. There's got to be research out there around kind of consumer mindset and how they, when they look at an EV vehicle, like what are the top three things when you look at some of the data or, uh, research that's out there,
[00:33:23] Scott: um, in terms of why they're like the EV versus,
[00:33:26] Jeff: you know, other
[00:33:29] Scott: Yeah, I mean, I, I think the big things are, you know, uh, cost savings, environmental and, um, comfort driving experience, whatever, but in terms of the motivators, I think that that when with cost savings being probably the, the, the highest one there, I do think though, that there's like a different set of like, what are the objections and there it's like, Oh, I want to make sure that, that it holds up well, you know, the battery sort of stays in good shape for a while.
[00:33:56] This is why recurrence around. Okay. I want to make sure that I can charge anywhere I need to, I want to understand that, that, that charging is going to be reliable, you know, there's like all these kinds of other, a second level of questions that's, you may just like, you'd be, may be motivated because you see somebody like your neighbor just got a, an EV and you're like, Oh, that's really cool.
[00:34:15] And you sit in and you're like, okay, that's the motivating thing. But then you have to get past the, the questions and the objections and you have to sort of like get your answers to that could just be like, the cars look cool. You know, like people buy it's, I mean, people are so emotional when it comes to, to like car ownership.
[00:34:32] It's just this weird thing that, um, they buy it because it's a nice color red. You know?
[00:34:39] Jeff: Yeah. It's an extension right of ourselves. It's not always a practical, uh, decision. It's like, I'll be honest. I bought the first generation I three because it was the only year they made. It in silver, whatever reason, all the cars I own are silver.
[00:34:57] And so the better decision would have been like, like the gen three that, you know, it's probably last even longer, but, uh, I had to have silver. So, you know, I mean,
[00:35:06] Scott: we, we talked earlier about, um, uh, so my wife and I leased an ID buzz in, in December of this past year, my, my wife had to have it in blue, you know, so we ended up like, like buying it in, in Harrisburg, Pennsylvania.
[00:35:20] And getting it shipped across the country because they were the one that had the one in blue, that was a reasonable price, you know, so it's part emotion and parts or practicality. And I think, um, here's actually, this is a good like way of hooking this back to energy efficiency in the same way that if we figured out, oh, you know, only 5 percent of people care about, um, energy efficiency.
[00:35:41] What is such a, um, I guess like a relief or what feels just great about, about the company we're doing now. I mentioned like, we don't have to do consumer education, but like, everybody has an emotional attachment to care about their car, you know, because we've just always grown up that way. It's, it's the expression of freedom when you, you know, first got your license at age 16 and like, you remember what your first car was.
[00:36:06] And though you remember that. Probably the first time you were behind the wheel in the car by yourself when you were 16 years old. And what like a rush that was of like freedom. So people care about their EVs or their cars. And, you know, like now EV owners care about their, their electric cars in a way that like.
[00:36:26] Just we can never get people to really care about energy efficiency. And so from a savings perspective, like people care about how much gas they save because they're driving an EV and they, they, they, they track that religiously with the recurrent product in a way that probably the same people like would not have really paid attention to kind of save the same amount of money in, um, electric usage in my home by putting insulation in.
[00:36:53] It's not rational, but that's the way it is, you know?
[00:36:56] Jeff: Yeah, because, yeah, the experience that the car is more emotional, there's more tied into it versus maybe this other, you know, physical thing that just doesn't have the same. It's not the same experience,
[00:37:08] Scott: right? It's not just that, but it's also like, how do other people see me?
[00:37:12] I can virtue signal and be seen as like the person that I want to be perceived as by my neighbors when, because they can see me driving around in this zero emissions car. So it's, well, I've been
[00:37:24] Jeff: fascinated exploring just the commercial building side of this and, you know, living in Washington as well.
[00:37:30] The Washington State Climate Commitment Act, now every building has to have a benchmark,
right? So, kind of this baseline for how efficient is your building or not. More and more, legislation, incentives, the rules, the carrots and sticks, they do matter, especially when it's kind of new. If the federal incentives go away, what do you think
[00:37:51] Scott: will happen?
[00:37:52] One of the things that we started to hear right, you know, after the election win was Gavin Newsom and other blue state governors basically saying like, well, if the, if the federal government's going to pull back on their rebates, we're going to backfill them at the state level. And Generally, there's still like two auto markets in the U S there's like the carb States of the California air resources board, California.
[00:38:14] Plus, you know, there's like 13 other States that represent about 40 percent of the country are like on team blue. And then everybody else is on team red, right? State wise anyway, the States are actually, they contain multitudes. Right. But. What I think is really interesting is, like, what I have sort of heard is that, like, yeah, the, the governors and the, um, the state legislatures are sort of preparing in blue states to backfill those rebates that, you know, when they go away or when they get phased out.
[00:38:42] That's weird in the sense that it could create some very different dynamics in terms of, uh, vehicle depreciation, and you could have these weird geographic triage situations where car dealers would want to Acquire used cars in blue states and ship them to red states to sell them there because they'd have better Depreciation anyway, it's just like it's just confusing like unlike houses like cars can be moved around And so I think you could have that situation it's really complicated and ugly and I don't think it's the best idea, but You know, I think that that you may have that And then you also get this interesting situation where like Gavin Newsom, you know, when he was like, well, we're going to backfill those rebates when the Trump administration, uh, pulls them.
[00:39:25] He also made sure to, to get a knife into Elon's side by saying, we're going to make sure that, that our rebates do not cover Tesla's. So it's like, just to like, just to, to twist the knife. You know, I think there's actually a rational reason to say that, you know, you can say, well, To go back to the original recovery act funding was like, well, Tesla doesn't need these anymore.
[00:39:46] They can make money on their own. So what we're trying to do is bring everybody else those advantages that Tesla got those first sort of few years. But you know, it's, it's sort of troll bait, I think for sure to say if Trump and Elon pull these at the federal level, we're going to make sure that when we backfill them, that Elon doesn't get any of that money from California.
[00:40:04] Jeff: That's a great point on leveling the playing field. And I think in the absence of leadership at the federal level, we are going to see more done at a, at a local or state level, but incentives while they're meant to, you know, kickstart markets. I don't, I don't think the. intent of incentives is, you know, to, to be around forever, right?
[00:40:26] I want to kind of shift the conversation to thinking about customers and consumers and, and tenants in the case of buildings, because most buildings are not owned by the tenants, you know, the Microsofts, the Amazons, where they own their own building. They're actually investing a ton in energy efficiency because it directly benefits them.
[00:40:44] Most buildings that were owned by somebody else, right? The landlord. And really, they want to get as much out of this asset as they can. They don't want to have to sink a bunch more money in it, uh, unless the tenants. Really demand it that's going to only increase in importance and there is some of that where tenants I think do care is Esg goals, maybe those are waning now But I think in general people do care about what their impact is And so we'll see probably more of that if I had to forecast over the next decade.
[00:41:14] I think tenants Will pay a premium for say office space that can really kind of showcase like here's how efficient our building is You know lead certified buildings command is 6 percent premium all that kind of
[00:41:27] Scott: stuff, but just to return it to EVs I mean, I think like ultimately The EV industry already at this point, we're very close to price parity, uh, even on upfront cost, total cost of ownership after three years and beyond, you're definitely lower cost for, uh, for buying an EV versus a combustion engine car.
[00:41:44] And ultimately the industry. Will stand on its own and you'll buy the EV because it's higher tech, it's more pleasant, it's less costly, you know, all of the things that, that, why you buy cars for. And there shouldn't be, you know, government incentive that sort of like that, that like puts a thumb on the scale after that initial start.
[00:42:05] Um, despite the fact that the government puts like hundreds of billions of dollars thumb on the scale for oil and gas companies that basically subsidize. Combustion engine cars and the gasoline infrastructure. But the fact is, like, the government's putting like a far less amount of money for a certain period of time to kind of get EVs up and running.
[00:42:24] And then I think it they will stand on their own. They're already standing on their own. I just I think the main thing is like, don't yank it and create volatility in the market just for the sake of it. So as I was doing
[00:42:36] Jeff: prep for this interview, People are crazy about their recurrent monthly reports.
[00:42:43] What is that? And why are people so pumped about that?
[00:42:46] Scott: This is my moment where I get to plug recurrent a little bit. So if you are an EV owner, come to recurrentauto. com and, um, sign up your car. So what you do is. Is, uh, you basically like create an account, you give us permission to pull data from your car, like battery data.
[00:43:01] Basically, it's all like nerdy stuff, right? We don't know where your car is or anything like that. And then once a month you get a report that basically says, here's how your car is doing compared to when it was new. But battery wise, like it's wearing down at this rate. This is fine. Like, yeah, it's cold in the winter.
[00:43:18] And so your range is going down. That's okay. That's seasonal. That'll come back, you know. We all learned to take care of a combustion engine car from our parents and our grandparents. No one could grow up knowing how to take care of an EV, folks our age, and so there's a lot that just, that just kind of like developing rules of thumb of how do I charge it for the best, you know, long term health of the battery.
[00:43:41] And so people think of their recurrent reports as like the wellness check for their car. And it's totally free. We basically, the business model for us is like we aggregate all that data up. So we now have like 30, 000 cars on our platform and then use it to train machine learning models that power our used car reports when we work with dealers.
[00:43:58] So yeah, so you sign up, you get your wellness check. And then the cool thing is like. When you're ready to sell your car, you basically have done the equivalent of keeping all your service records in the glove compartment. So when you go to sell it, it ends up you end up selling it for more because people know you took care of your car and you can prove that.
[00:44:15] Jeff: The last question we ask every guest is if you had a crystal ball, Scott, and could look out over the next five years, especially in the EV market, what, what do you see, uh, as likely to happen?
[00:44:28] Scott: So the EV sort of S curve of, of EV adoption is, is going to continue and, and, um, we are in the steep part of it right now and, and it's, that's going to continue.
[00:44:39] And I, and I think it's sort of going to continue sort of no matter what. The Trump administration does, they're going to sort of create some speed bumps here. And there's going to be some rocky things here, but like, we're going one direction. We're not going back. And we know that because like, when everybody tries an EV and they buy one, they almost always stick to that.
[00:44:58] Might not have their brand loyalty sort of figured out, but they have a very strong fuel type loyalty. Like once you go on an electric car, you don't go back. So, um. That transition is going to happen. Um, and, you know, are we done with it by 2030? No, I still have my money is we're about half of new sales are electric cars by 2030, you know, in five years from now.
[00:45:18] That's actually right where the targets for, um, non binding guidelines that the Biden administration wanted to achieve. Right about there.
[00:45:28] Scott: And then, you know, the, there, there are some lagging laggard sort of like folks that will just be longer until they adopt because they don't have the charging infrastructure or whatever.
[00:45:37] So I think that's like my prediction is we are actually, despite everything the Trump administration is about to kind of. Like throw around and do is that we are still on that transition. The other thing that I'll say for the use DV mark in particular is like over the next four years during the Trump administration, the use DV market will grow five X guaranteed.
[00:45:58] We know that those cars were already sold new. And so from recurrence perspective, focus, as we are in the USD market, like our, our markets great, you know, for the next, for the next four years, literally no matter what happens to the Trump administration policy. Um, so, you know, I, I think that this is again, once in a hundred year transition, it's not like it's going to go easily.
[00:46:20] And there are a lot of people that a lot of companies that will be losers in this. Like if you're a company that makes, you know, billions and billions of dollars selling gasoline, you're not going to be making billions and billions of dollars selling gasoline anymore. And so like understandable why executives of those companies are going to fight this tooth and nail and fight it in, um, sort of like not obvious ways.
[00:46:43] I think it's honestly weird that electric utilities aren't fighting for this more because they really have a lot to gain in terms of selling a lot more electricity.
[00:46:53] Jeff: Totally. Well, Scott, thanks so much for joining the podcast. It's been an absolute pleasure having this conversation.
[00:47:00] Scott: Yeah, it's been really fun.
[00:47:03] Jeff: I learned so much in that conversation with Scott. It opened my eyes to how many similarities there really are actually between transportation, EVs, and I think the building sector. The first is the importance of standards. Scott saw in the used EV marketplace that that was one of the big impediments, was that it was very hard to evaluate, you know, used EVs.
[00:47:30] And so that's what he, he wanted to tackle with Recurrent. And I think the same for buildings, we, we have Energy Use Index and Energy Star, which is a standard, but You know, we're still lacking in some of the legislation across the country to really have benchmarking and EUI be kind of even more commonplace.
[00:47:51] We're starting to see that shift, but standards are going to be hugely important as the market matures. The second is the role of incentives, obviously for in the case of EVs, a huge contributor, same with buildings. But I love the points that Scott made around Incentives are really meant to kickstart markets.
[00:48:12] And so in the case of cars, right, the first go was really, you know, manufacturers that apply to the first 200,000 cars. And, you know, I think the inflation reduction act in the case of buildings has been that kind of kickstart getting people to look at, you know, one seven nine D and just. think about building efficiency, but
how they might pay for some of these improvements that they may want to do to their buildings.
[00:48:38] So, uh, incentives are key, but they should not remain in place forever. And at some point the market has to stand on its own. And I, I couldn't agree more. And what's interesting with this new political environment scott talked about the chaos monkey That's been introduced to the marketplace because of maybe shifting Incentives or standards and I thought one of the things that's really interesting about the point that he made was that it's really going to be those less populated states, which in general are typically red states that are going to be the most, you know, impacted that on the coasts, you know, charging stations, these things are all going to happen, but it's really going to be, you know, states that are less populous, typically red states, they're actually going to be disproportionately hurt by You know, the lack of, you know, federal incentives and programs, um, but no doubt incentives, they matter, they play a role, uh, but at some point, you know, market has to stand on its own.
[00:49:40] And this leads to my final point and really the reframe where I think EVs and buildings are very different. Scott made the great point that You know, when we think about cars and transportation, our own personal vehicles, there's a level of an attachment and passion that people have for their cars. We all remember our first car and the way we felt as we drove and, and, and drive cars.
[00:50:07] And when you drive an EV, Scott's stat around never going, you know, back. I believe it. It's true. Having bought my own first, uh, UV this last summer, I can't ever imagine buying an internal combustion engine again. And that's the difference or the reframe is that There's a level of passion and, and personal attachment that people have to their cars and, and transportation.
[00:50:32] I think the EV marketplace is well on its way, like it's not going backwards. Buildings are different though. People don't think about buildings. People don't think about, you know, buildings and, and the impact that buildings are having on, on climate change. It's a place I have to go to work, or, you know, it's not something I have that level of personal investment or attachment to.
[00:50:57] So I don't even think about it. And I think that's one of the big contrasts and one of the challenges for this sector of, you know, kind of the climate change fight. There is one example we can look to in the case of Australia. In Australia, it's actually law that. Every commercial building has to have a building energy efficiency certificate, kind of like when you go into a restaurant in the U. S.
[00:51:21] and they have a grade for their food safety and handling. Every building in Australia has to have this energy efficiency certificate. And the goal, or the intent, is to really raise People's awareness as they go into these different spaces or environments on, you know, how efficient, how green is this space.
[00:51:41] It really trying to attack this lack of passion or even just awareness on, you know, this environment is either a good one for the larger environment or not. And so I point to that as, you know, one real example of ways that we can get people to maybe care a little bit more about how buildings contribute to climate change.
[00:52:02] I really enjoyed my conversation with Scott today, and he really has been an inspiration for me, my own career journey. And so it was so fun to catch up, compare notes, and learn more about the EV marketplace, but also how it applies to buildings. So with that, I look forward to our next episode until next time.
[00:52:24] Announcer: You've been listening to Reframe, the show about building sustainability, presented by Pilotlight. Opinions shared by the Reframe guests aren't necessarily the views of their companies. If you'd like to learn more about the podcast, the show's host, guests or topics, check out this episode’s show notes or visit Pilotlight.ai/podcast.
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