Bonus: Game Changers, Part 1

sustainable energy and global resources. We'll get a peek behind the curtains of their factory floors here of the sometimes surprising origins of their ideas, and be introduced to a potentially greener tomorrow. Episode one is all about transportation. Oh yeah, okay, they want me to clap, They want me to clap? Hey, pen too good? Are you? So? This is This is our new drive train. It's called duo power. Our original

drive train was a single electric motor. Ryan Popple is showing us around the Protera factory floor in Los Angeles, California. He's a tidy man in his early forties, confidently determined, always with the number or stat to counter any question we might throw his way. He speaks of the place with fondness and an unbridled enthusiasm, like he's treating us to a glimpse of the global future. The place is huge, meticulously clean, filled with worrying busy robots, and dotted with

enormous vehicles. For the uninitiated, the scene is at once familiar and futuristic. At pro Terra, they build buses, electric buses. That is, yes, so so pro Tera, I would say, is a is a late stage technology, venture backed company. We are several hundred ease um, We have over a hundred enterprise scale customers, and we have orders across the United States and in a couple of Canadian provinces. We often get the question, is pro Tarra bus company? Orse?

Pro Terra technology company? I think pro Tear is probably the first bus manufacturing company that is a technology company. But I think in the twenty one century, if companies are going to remain relevant, if they're going to survive, they are going to have to become technology companies. Paints, more rap What else do we look at? Oh, here's l A D O T so this is this is one of the first bodies that's going to start on the line soon. And this sole this is a thirty

five ft bus. It's part of a series of electric buses that are going to be built for the city of Los Angeles and their teachers. Together, busses and freight trucks generate of all global warming emissions that come from the transportation sector, and there are a lot of them. Almost one million registered buses roll around the streets to the United States. Here Ryan sees an opportunity not only to help the environment, but to take a robust share

of an almost untapped but potentially huge market. And we've taken a long view and said, we know that the future of this market is electric, and we're not going to waste any of our time trying to be good at diesel buses. The industry lifespan, or the remaining lifespan of the diesel bus industry is very short. It's probably less than ten years. So we're able to simply focus on building and perfecting an electric bus and the charging

infrastructure associated with it. But his passion and ideas didn't come out of nowhere. To trace his journey to this futuristic factory floor, we have to travel back to a different time in a very different place. I serve four years on active duty. I UM had the pleasure of serving as a as a tank commander, a tank platoon leader, UM Humby platoon leader, and a couple of other functions

as well. UM and deployed to the Middle East in early two thousand three and participated in Operation Iraqi Freedom. You know, certainly got a lot of experience with vehicle technology and heavy vehicles. UM. It was a remarkable experience to be able to serve with other UM, other soldiers and UM lead troops and work for some of the

best leaders I've ever encountered. At first, his interest in sustainable energy was utilitarian rather than idealistic, But it also was a pretty stark experience in terms of just seeing how volatile some parts of the world are, in particular parts that were very much dependent on FORUM for fuel

production or petroleum supply. So, you know, seeing UM depolling into Kuwait and then UM operating in Iraq with with an infantry division, you definitely get a sense that that that there are a lot of parts of the world that aren't necessarily the best places to underwrite for long term energy supply. So When I finished up in the army in two thousand four and went to business school, I very much wanted to work on something related too.

I guess what would be referred to as energy security, and as I looked into it, I was not convinced that we were going to produce our way out of the problem. If you if you really look into the way the oil markets function, regardless of how much oil the US produces, we really don't have control over the price of oil we are. We are not the cheapest marginal capacity that's Saudi Arabia UM. And so if we're going to have some energy security or energy independence, we

have to create alternatives to petroleum. Armed with his new ideas in perspective and a business degree to boot, Ryan gravitated to a company that seemed to match his ideas, Tesla. My reason for being at Tesla was not because I was a sports car enthusiast. It was because of the environmental sustainability, that the clean tech aspect of what Tesla did.

By moving over to an investing role for four or five years, I really got to look broadly at the entire carbon problem, the sustainability problem, and I was able to find companies and technologies like pro Terra that took the technology that I loved and appreciated from Tesla but deployed it into a category that um that probably wouldn't have access to clean car technology for a long time.

But eventually Ryan realized that even though electric cars seemed like a huge step in the right direction, they still came with insurmountable issues when we look at urban sustainability. The concept of everyone being able to afford an electric car and driving an electric car is a very bad thing from a congestion and lifestyle perspective. You cannot solve the congestion problems simply by making cars cleaner. So Ryan envisioned a world with environmental stability but without the congestion.

The answer, he realized, was right under our noses, mass transit. During his time at Tesla, he had been introduced to pro Terra, a company that seemed to fit his evolving sustainability philosophy. I joined pro Terra in twenty four seen as the CEO when the company was just starting to ship commercial product, and my role since then has been perfecting the technology and really ensuring that e V can

become of the city bus market in North America. By the way e V means electric vehicle, becoming one of the market seems pretty grandiose, but if you zoom in on the data, it doesn't actually seem like that crazy of an idea. Replacing internal combustion busses with e busses as well in the works, and electric buses will take over half of the world's bus fleets. By the caveat, almost none of this work is happening in the United States.

As of China already had a fleet of over four electric buses, and counting in Europe, we're looking at just over two thousand in the US about six hundred six hundred. That's less than one percent of America's public transportation fleet. So there's certainly a lot of room for growth. But how is Ryan planning to seduce a market that clearly hasn't been able to see the virtues of electric buses.

The benefits of going electric aren't always direct. Environmental improvements can be slow and works in tandem with other technical and philosophical changes, and perhaps more important for a potential buyer, the buses with chargeable battery will last for about twelve years, but that does come with an upfront cost for the manufacturer and hence also the consumer. Back at the factory floor,

Ryan showed us how it works. Here's another set of battery, or here's another look at the Praterra energy storage system. So again, these are each ten kilo what hours. That's over a megawatt hour of energy right there, just in those ten packs. It's designed to be in a transit application for twelve years. It's electrically and mechanically warranted for

that amount of time. We are trying to educate the market to think about the fact that the battery represents the energy that the vehicle is going to use over a twelve year life. And when you buy a diesel bus, you don't pay upfront for twelve years of diesel fuel. That would be hundreds of thousands of dollars of capital expenditure. The answer comes from the business side, not the factory floor.

Potera offers a kind of energy payment plan. So a lot of the smaller cities that don't necessarily have the capital for the switching cost, what we do is we break the battery out of the cost of the vehicle, and they pay for the vehicle for the same price as a diesel bus and then they pay for the battery over time like it was the fuel, and that's enabled a lot of cities that that might not necessarily have the capital to make the switch, to be able

to do so now. So we're there technically and financially. The only thing Ryan c is holding us back is politics. As an American, UM, I'm well aware of that. Our tradition is that you know, it's that famous quote that eventually Americans will do the right thing. Um. So I think we're approaching that point where we are going to wake up and then we will respond with an enormous amount of energy and create UM. And technologically we are. We are at the moment where we can start really

scaling clean energy. The energy balance of a solar panel, as in the amount of energy you put in to build a solar panel compared to the lifetime amount of energy that'll it'll put out, exceeds that of fracking oil. So we're we're at a point where the science and the economics suggests that this is going to happen. The only thing I worry about is if we hold back or distort the markets and unnaturally extend the life of the fossil fuel industry by another decade or two, once

Americans have come to their senses. Ryan has lofty ideas and what the future holds for electric vehicles. So all of the markets that share the same characteristics as the city bus market, meaning markets where vehicles are driven a lot of miles per year, and they're operating in an urban or a fleet based region, and they're using a lot of energy per mile, we think all of those

markets are great applications for EV. And that includes things like school buses, like coach buses, refuse local delivery, construction, mining vehicles. All of those applications are are going to move to e V for the same reasons that the city bus market moved to e V. I believe that my my kids who are um, you know, grade school, in high school, when they are adults and when they're actually at a point in their career where they can make a difference, it will be too late to have

made a difference. So they we will be in a we will be in I guess an adaptation or mitigation mode if our generation doesn't do more about this. So I think that you know, when I look at my own career trajectory and my peers were ideally positioned to do something about this. This episode was produced by Magnus

Hendrickson and presented by Yours Trulli MATC Goldman. For a visual experience of Game Changers and other video content, check out YouTube dot com Slash Bloomberg special thanks to Francesca Levie and Jordan Applinger. See you next time.