Tag: Electric Vehicles

Ample: A Better Better Place?

Ample: A Better Better Place?

August is supposed to be the doldrums in VC land, a time when everyone goes on vacation and companies shouldn’t expect to see any new term sheets. So it was a welcome surprise to see a cleantech funding round announced — and a big one at that: Ample raised a $31m Series A round. That’s a lot of money! Wait. Who are they? What do they do?

According to Fortune’s Term Sheet, they make “a platform that delivers a full charge to electric cars.” Neat! A full charge is way better than not-a-full-charge. Axios’s Pro Rata says they are “solving the energy delivery challenge for electric cars.” What are we talking about here: supercapacitors? ultracapacitors? ultra-fast charging? wireless charging? ultrasonic charging? The suspense is killing me!

Off to their website: a picture of a cold day in Chicago (hey, I live in Chicago, cool!) and a simple tag line: “Electric Cars for Everyone.”

Lots of non-electric taxis in the picture! (From Ample’s website and originally from Molly Porter on Unsplash)

To get some real answers, we need to head to the press release. The company offers an “alternative to traditional charging” using proprietary “autonomous robotics.”

If you’re using robots, delivering a full charge all at once, and calling it an alternative to traditional charging, in my mind there’s only one thing this could be: battery swapping. Drive your EV up to the station and a robot pops out the dead battery, switches it for a fresh one. In a few minutes you’re off to the races again.

That might sound familiar.

Back in 2013, Tesla built a battery swapping station before shuttering the program in 2016. Tesla’s pilot implementation was a little kludgy — it was designed as a temporary fix where car owners were required to come back and get their original battery back later (and pay $80 for the privilege).

Well before that, Shai Agassi launched Better Place in 2005 to build a network of swapping stations in Israel before expanding world-wide. There’s little question that the technology works. Here it is in action:

Battery swapping in action

Better Place has gotten plenty of ink through the years, both as it was growing, as it imploded, and in a recent book “Totaled: The Billion-Dollar Crash of the Startup that Took on Big Auto” by Brian Blum. Brian was recently a featured guest on Greentech Media’s Energy Gang Podcast where he recounted his own experience as the owner of a Better Place-compatible Renault. Regular listeners of the podcast know that Stephen, Katherine, and Jigar don’t pull punches, so it’s interesting to go back and listen to that episode with fresh ears.

Can this be a business? Can Ample succeed where Tesla and Better Place stumbled?

First, let’s take a look at the backers. This round was led by Shell Ventures and Moore Strategic Ventures, with Repsol Energy Ventures, Hemi Ventures, and TRIREC also participating.

Shell has a long history of making investments in cleantech and transportation deals and has lots of experience making early-stage venture investments. It’s easy to imagine Shell seeing battery swapping stations as the natural future of the filling station.

The other corporate strategic investor, perhaps not as well known here in the US is Repsol, a major Spanish oil and gas company. Repsol has increased its VC activity over the last few years. This is their second electric mobility investment this summer, following Silence, an electric scooter company.

Moore Strategic Ventures is an arm of Moore Capital Management, a Hedge Fund that makes some direct early-stage investments, including several in energy, electricity, and agriculture.

Hemi Ventures, a relatively new firm, has been very active in early stage deals across robotics, artificial intelligence, and automation.

Trirec is a relatively new cleantech-focused firm based in Singapore that doesn’t shy away from infrastructure-heavy deals.

What about the founding team?

Ample founders John de Souza and Khaled Hassounah are experienced executives, and both have undergraduate degrees in Electrical Engineering. According to their LinkedIn profiles, they founded and led MedHelp, an online portal and community for medical advice. The details here aren’t exactly clear: MedHelp was founded in 1994, long before the duo joined, and sometime around 2006, de Souza became CEO and led the company to an acquisition by a unit of Merck in 2014.

Back to the business at hand — the business

First, we can’t ignore the similarities. Better Place founder Shai Agassi made a fortune when he sold his previous company, and decided to enter the electric vehicles space. (And, for what it’s worth, that sounds a lot like Elon Musk too.) The initial pitch for Better Place was “an inexpensive car that anyone could buy.” It would be so cheap, it might even be free. (Of course, not actually free, but at least zero-money-down and a monthly subscription after that.) When Better Place was conceived, the best technology in the market was a Nissan Leaf that could get roughly 70 miles before recharging, so you couldn’t take a long road trip.

Better Place’s Stumbling Blocks

Better Place had huge issues with its swapping stations — it couldn’t co-locate them with service stations in Israel, they ended up being way more expensive ($3m each) than originally planned, required huge cooling infrastructure to charge the batteries without degrading them. The company also grew much more quickly than any revenues could support — they had around 1000 customers but were burning $1m per day on salaries.

At the very least, with Shell and Repsol on board, Ample should be able to secure locations at filling stations.

Better Place also had a hard time getting manufacturing partners on board. Renault joined because they didn’t have any plans for a Hybrid vehicle and saw this as their path towards an EV.

This excerpt from the podcast says it all:

Brian Blum:

“When he [Agassi] went to GM and tried to convince them to make a battery-swappable version of the Chevy Volt and they said ‘No, we’re not doing that, we’ve already got our version of the vehicle and we’re well along the way, but we would be interested if Better Place would be the infrastructure provider for the electricity [presumably referring to the traditional charging infrastructure] here in the United States and then we’ll see what happens.’”
 “Maybe if there was more money, and the company hadn’t spent so much, and the company hadn’t gone out of business, maybe other manufacturers would have come on board.”

Jigar:

“But they would have never come on board. This is what people don’t understand, even today, no one has used Tesla’s charging infrastructure and protocol. Car companies don’t work together, and the reason they don’t work together is because they believe they’re the smartest people in their industry. Every one of them believes they’re in the hardware industry. They don’t wanna all make the same thing. They don’t wanna follow a standard. They love being different from everyone else. Right, so the fact that everyone would have adopted the same battery swapping technology was ludicrous, so for him to think otherwise was equally ludicrous.”

Is Jigar right here? If he is, Ample must be doing something else—they must have a business model that doesn’t require signing up a bunch of manufacturers to conform to a new swapping standard.

What does the future for battery swapping hold?

Brian Blum has certainly made up his mind:

“[Switching] big batteries, you know consumers switching them out in expensive infrastructure, that’s not going to happen, we’re not going to see that again.”

And my guess is Ample won’t be getting project finance from Jigar for a Better Place clone any time soon:

“The thing that I always found so fascinating is how awful [Shai and team] were as entrepreneurs. The thing I want to make sure people understand is that these things are entirely avoidable through due diligence. Like, it’s not a foregone conclusion that people have to make these ridiculous mistakes. I want to make sure that its clear that like as we try to change the world and the infrastructure that powers us because we want to decarbonize the world, there are good ideas and bad ideas, and this was a really bad idea.”

Is this the next cleantech success story?

Of course, only time will tell and with limited information on a stealth-mode startup, it’s hard to predict what will happen.

We don’t know what the proprietary technology is, but Ample definitely isn’t building its own EV. Frankly it wouldn’t surprise me if they’ve licensed the Better Place patent portfolio, which is now largely owned by Renault.

I hope I’m safe in saying that Shell and Repsol wouldn’t invest in a new Better Place. If they wanted to do that, they could have bought the assets back in 2014 at fire-sale prices.

So, maybe it’s the business model that’s different. Is Ample promising individually owned cars on a monthly payment plan? Or are they offering a battery-swapped electric taxi fleet? Busses? Or an on-demand, electric car network like Car2Go?

We don’t see $30m Series A rounds in this space all that often, so there’s reason to be excited. Until they come out of stealth, here’s hoping Ample has figured out a better way to make the Better Place dream of cheap electric cars for everyone come true.

No, Tesla batteries are not a global warming disaster

But, we probably should think about the supply chain.

A new report from the Swedish Environmental Research Institute has attempted to quantify the emissions tied to EV battery manufacturing. The study aims to better understand where emissions accrue in the supply chain and to shed some light on where we can do better.

In an early piece on the Swedish website NyTeknik, another researcher from the Swedish Environmental Research Institute, not involved with the original study, did some rough calculations and came to the conclusion that you would need to drive your new Tesla for 8 years (or drive a Nissan Leaf for nearly 3 years) just to break even on CO2 emissions. This later got picked up by English-language outlets eager to publish more “EVs are actually bad for the environment” takes.

But, of course, the devil is in the details. The payback conclusion gets complicated depending on where you live, how you charge the EV, and what your alternatives would be. This means some big differences depending on whether you live in the U.S. or Sweden. For example:

  1. Swedes drive less than we do,
  2. Swedes buy more efficient conventional cars than we do, and
  3. Swedish gasoline/diesel is cleaner than ours.

(On the other hand, charging from the grid is likely to be much cleaner in Sweden. More on that in a moment.)

The payback period assumes someone drives 7,650 miles/year, fuel is 18% bio-based, and that the average tailpipe emissions of new cars is 208 g/mile.

By contrast, in the U.S. we drive around 11,000 miles/year, our passenger fuel is mostly gasoline with 10% ethanol, and average tailpipe emissions are about 350 g/mile.

Of course, we also need to think about the emissions related to charging the EV during use. The Tesla driver in Sweden can top up with very low-emission power: Sweden’s energy mix is nearly 50% Nuclear and 50% Hydro. The average U.S. energy mix is more like 65% fossil, giving us emissions per EV-mile of something like 176 g CO2.

Once we account for higher-emission conventional cars one the one hand and charging from a higher-emission grid power on the other, it seems like the CO2 payback period is about the same in both countries.

Tesla’s Gigafactory is Carbon Neutral

The report assumes that the energy used in manufacturing the battery is 50% fossil-based. Tesla has long committed to making its Gigafactory carbon-neutral, and appears to be working towards that goal. The original research states that about half of the CO2 impact of battery manufacturing occurs at the battery plant, while only 10–20% comes from mining and the rest comes from materials production. That means, for the Tesla batteries at least, the CO2 emissions payback is halved.

A Cleaner Grid Matters Here

We saw the same debate play out a few years ago when researchers showed that if you charge a car from a coal-fired grid, your emissions reductions are limited. While that’s certainly true, the grid is getting cleaner over time. Today you could charge your Tesla from your home solar system, or — soon — from Tesla’s all-solar Supercharger stations.

The Bottom Line

Under the assumptions above, the CO2 payback for a 100 kWh Tesla battery comes out to about just under 3 years in the best case and 6 years in the worst case.

The average car in the US lasts for about 8 years, but many don’t expect EV batteries to last that long. On the other hand, lots of people are trying to figure out how (or whether) to give the batteries a second life, for things like stationary storage.

This research is a great step towards understanding the climate impact of a long supply chain, and it highlights the need to think about responsible sourcing and energy-efficient manufacturing. It should also highlight, yet again, that as transportation becomes increasingly electrified, a clean and reliable grid is more important than ever.

But, it doesn’t give you an excuse not to buy a Tesla.