Decarbonising Fleets: Insights from Phil Henrick of VEV on Electrifying HGVs and Getting Started

Intro [00:00:02]:

You’re listening to the Journey to Zero podcast hosted by Alltruck Zero. If you want to stay ahead of the game and find out more about the very latest green truck technology, or you’re looking for hints and tips on how to decarbonise your own fleet, then this is the place for you. In this podcast, we’ll be sitting down with the thought leaders who are guiding the way on the journey we’re all on as we work to carbonise the transport industry.

Georgia Lomas [00:00:37]:

Hi, my name’s Georgia and I’ll be the host of this month’s Alltruck Zero podcast. I’d like to welcome Phil Henrik, sales director at Vev, part of the Vito Group, to the podcast. Hi, Phil. Would you like to introduce yourself?

Phil Henrick [00:00:52]:

Yeah. Hi, Georgia. Yeah, as you say. I’m Phil Henrick. I’m Sales Director at Vev, which is 100% owned by Vitol, which we can obviously come on to later explain who we are. In terms of my career. I entered the motor industry 5 January 1998 working for Nissan. So worked for, I think, around about eight years at Nissan, five in the UK, three over at Nissan Europe, where I ran Nissan Europe fleet. I then went into leasing and worked for LeasePlan, worked for GE Capital when it was still present in Europe, in leasing before it got sold to Arval, did a European job there. And then my first sort of foray into electric vehicles was with London Electric Vehicle Company, or as most people know it, the London Taxi Company. So I was part of the team that took the vehicle from being a diesel taxi through to the range extended electric vehicle. Then I worked for a while in rental until COVID struck. And as you can imagine, with rental, with people not traveling, that was a pretty tricky time. And then prior to Vev, I was sales and after Sales Director at Tevva electric trucks, electric and hydrogen fuel cell range extended trucks. And then I joined Vev on the 3 January this year.

Georgia Lomas [00:02:19]:

Great. Thanks, Phil. So, would you like to give us an introduction to Vev?

Phil Henrick [00:02:26]:

Vev is a full end to end decarbonisation partner for commercial fleets. So when we talk commercial fleets, obviously we’re talking about vans, trucks and buses. So it really is that end to end piece. From the very initial strategising working out how we go from Zero electric vehicles on fleet today through to 100% in a number of years, you clearly can’t make that jump from a standing start today to 100%. There may not be. That the product out there. Clearly, customers have a set chain cycle on vehicles. But the starting point for everything we do is the customer data, their telematics data to look, and we can go down to buy registration plate as to what could be electrified now and what can be electrified along the way on that journey. And from that we can then understand what their electric power requirements are and we can start some depot design. So we would design depot with the appropriate number of charges, the appropriate power of charges as well. And then we actually do the whole implementation of that, you know, the negotiations with the DNO, effectively to get a grid upgrade if it’s necessary. All the connection to the grid, all the civil work, the installation of the charging infrastructure, the commissioning, and then the ongoing maintenance throughout that life tied into that. We also will look at energy independence for the customer because we all know what prices of electricity have done in the last 18 months, both for businesses and for us as consumers. It’s been a difficult time. So there’s three things we can do. We can certainly look at taking over their supply of green electricity, and that’s obviously quite a binary choice, I’m paying XP per kilowatt hour today, vev could potentially do it cheaper. We can see if we can do that. But also then if we’re going to supply your electricity, we probably want to supply as little electricity grid electricity as possible. Which sounds a little bit perverse, but if we can find you ways to get off grid electricity by the use of solar and particularly if companies have activities going on through the night with night shifts or early morning shifts, then we can also look at the use of battery storage as well. So rather than selling any excess electricity back to the grid, you can store that and obviously use it when the sun isn’t shining. We can fund all of that because we appreciate that that investment into infrastructure can be huge. And for some companies, particularly where we are now, there’s a lot of belt tightening, but also they are probably thinking they can deploy their capex elsewhere in their core business, so we can fund all that change. And on top of that, obviously we have our own developed software that integrates seamlessly with fleet management software, twofold really to do that, nice visibility for customers so they understand what’s working, what isn’t working, to make sure that we’re maintaining that uptime of charges, which is critical, but also the smart charging piece. So a customer may have 20 vans all lined up being charged overnight. But if van number three and van number seven both have to leave at 530 to do specific jobs, then that smart charging ensures that those vehicles are fully charged by 530, whereas the others may be fully charged by, say, 07:00 or whenever the shift starts. So everything to encompass that, full end to end. From the understanding using customer data, and I can’t sort of stress that enough. This is not something that we think you need, these charges. It’s customer data that drives this through to actually doing those civil works, looking at taking customers off grid as much as possible, pulling it all together with the software piece and obviously having that possibility of funding it. If the customer wishes to avoid the capex.

Georgia Lomas [00:07:06]:

So how is Vital supporting the work that you do at Vev?

Phil Henrick [00:07:11]:

So to give you and the listeners some background on Vital, your customers, or sorry, your listeners would probably not have heard of Vev, and they may well not have heard of Vitol. So they may be surprised to learn that Vital is the largest privately owned business in the world. It turned over $505,000,000,000 last year and trades 10% of the world’s energy. And we are part of Vital’s decarbonisation strategy. So thus far Vital has invested over $2.2 billion into renewable energy, from solar farms through to wind farms. And we are part of that piece because it understands that for not only this country, but other countries to hit their net zero targets moving forward, that the electrification of fleets is absolutely key. So in terms of how it’s helping us, that obviously we’re 100% owned by Vitol, so our very existence is a result of Vitol’s investments and it has allowed us to then tap into other areas of the business. So for example, I mentioned earlier that we can look at supplying grid electricity to customers, and that is from the relationships that Vito has in the wider market, allowing us to do that. It also where customer allows gives us access to maybe other green fuels. So whilst Vev is focused on electric vehicles, Vitol EV. Vitol does have, for example, a hydrogen business. So if customers are looking for the supply of green hydrogen, that’s something where we can bring our colleagues in from Vitol to look at supplying that. Because some operators obviously believe that there is a role, particularly for HGVs and longer distances with hydrogen. So we’re not just tied into our core business, which is obviously EV, we’re lucky enough to have partners within Vital colleagues that we can bring in to have wider discussions.

Georgia Lomas [00:09:38]:

Great. Could you explain to our listeners what an integrated energy solution is?

Phil Henrick [00:09:45]:

I think I touched on it earlier. I think we are keen to help customers to minimise the costs when it comes to their supply of electricity. And that’s why we can obviously look to see whether we can be more competitive than their current supplier. So that’s one side, the grid electricity. But we’re also keen to minimise the expenditure on grid electricity by looking at technologies such as solar and battery to obviously wean customers off and give them alternative of actually producing, having their own micro grids effectively to produce their own power. So it really is about giving that full picture and with data from the customer, again driven by the customer data looking typically at their half hourly meter readings, and we like to get those over twelve months. So there’s lots and lots of data there. We can then with our solar, we have sophisticated solar software which will actually by postcode drill down to what can be generated from a solar panel in that postcode per annum. We can then marrying that. With the customer’s data, we can show what will be produced by solar, what percentage of their annual electricity consumption would be met by solar, and what the payback would be, the internal rate of return, how many years we’re looking to pay that back, the way that electricity prices have gone. And obviously, fortunately, they’re starting to come back down again now. We see which is good news for everybody, but the days of 1520 year payback on solar panels are well and truly gone. When we were at over 30 pence a kilowatt hour, we were typically seeing two and a half to three year payback, maybe a little bit longer now that it’s sort of moving towards mid 20s, probably three to four year, but not the story that it was of 15 years some time ago. So it really is that giving the customer as many options as possible to make the operations of a fleet and their wider business. Because obviously this impacts not just the fleet, but the buildings as well, but giving them that full range of options and properly cost it out so they can make some key decisions for their business moving forward.

Georgia Lomas [00:12:22]:

So what is the general consensus when talking to businesses about HGV fleet electrification?

Phil Henrick [00:12:30]:

I think there is a feeling that the product isn’t there, and if the product is there, there is some product out there that the infrastructure isn’t there. So we have this classic chicken and egg scenario at the moment whereby if you’re an operator, you’re probably not going to invest in electric HGV because you think, well, whilst I might depot charge 70%, let’s say, of the requirement. There needs to be an opportunity charge while I’m on the road of, say, 30% of the requirement for it to do its duty cycle, its daily duty cycle, and that infrastructure doesn’t exist now, therefore I’m not going to buy any EV trucks. And then if you’re an infrastructure developer like ourselves, you’re probably thinking, well, there’s no EV trucks on the road, so why would I put the infrastructure in? So we’re very much in that chicken and egg. We’re really determined to break that. And we have a strategy which I’d be delighted to run through with your customers on a one to one basis. I don’t really want to broadcast it on a wider podcast, but we think we’ve come up with a way, quite an innovative way, that we can sort of break the cycle as it is at the moment and find a way to make adoption for HGV fleets much easier. So absolutely delighted to talk to any of your customers who are seriously looking at that, but have been held back by that infrastructure piece.

Georgia Lomas [00:14:09]:

Great. What are you finding is the reason businesses are reluctant to move to alternative fuel fleets?

Phil Henrick [00:14:19]:

I think that’s multifaceted, but I think one of the key parts of it is almost a fear of the unknown. We all know diesel, don’t we? We all know diesel. We all know diesel vehicles, diesel engines, we know how they work. Fleets have been running them successfully for decades. I’m not saying they’re easy, because running a fleet, whether it’s vans, cars and particularly HGVs, is not an easy job. Let’s face it, it’s extremely complicated, but relatively compared to new energies. It’s reliable, let’s face it, euro six diesel in trucks is clean as well. Contrary to the press, we know it is clean. However, the ship has sailed, hasn’t it? We’ve taken a decision as a country to make that move. So I think there is a little bit of reticence because of it’s, a fear of the unknown, I think, as well, there’s probably coming back to the point we just talked about then, maybe a lack of product with acceptable range, and if it hasn’t got acceptable range, there’s a lack of infrastructure. So I think it’s a case of manufacturers coming to market with better product, and that is most definitely coming. The truck manufacturers, there are new entrants into the marketplace, but there are truck manufacturers, for example, who come next year with trucks that can take a megawatt charge, so that will be up to three and a half megawatt, which all of a sudden makes charging en route and opportunity charge viable. Because if a driver has to stop to take his mandatory rest anyway, he can certainly, if not, go to 100%. Battery certainly get above 80% if we’re looking at megawatt charging, it’s incumbent on people like ourselves to look at that infrastructure piece, and I’ll shout it from the rooftop again, happy to have those conversations and explain what we’re doing. And I also think there is a role for government to play to help in that situation. It’s quite interesting if you look at what is happening in the EU at the moment. There are lots of projects there about the development of trucking corridors. And I think whether people leave in Brexit or not, and that’s immaterial, it doesn’t mean to say we can’t learn from what’s going on elsewhere, whether that’s in the EU, whether that’s in China, where electrification is way, way ahead of anything else. So I think there’s a role for government to play, whether that’s the creation of trucking corridors along the major motorways with some government investment to do that, or something completely different that’s innovative. There’s also a role for government to help fleets and to encourage people like ourselves as an infrastructure provider, to make that investment.

Georgia Lomas [00:17:27]:

So onsite generation solutions, how easy is it to get started.

Phil Henrick [00:17:34]:

In terms of for us to turn around a proposal to look at Solar as a start? Relatively easy, obviously, in address. We then, believe it or not, use Google Earth, use the coordinates, and from that our software can generate a design on the roof, and from that an annual production. Customers, I said before, if they can provide their half hourly rate, which is a ton of data, but the more data we have, the more granular we can be. We can turn around, usually within a few days, a proposal that will actually show a costing and an internal rate of return for the customer. In terms of battery, I think battery is a little bit more nuanced because battery storage is quite expensive for what it is. I think if customers have a night shift, there is definitely an argument for battery because typically if you’re a domestic customer and you have solar, you can sell it back to the grid at six p a kilowatt hour. So it’s not really worth it. If you’re a business, you could potentially negotiate more, but it’s never going to be at what you buy electricity at. So if you are looking at solar and you run a night shift, then it’s probably worthwhile looking at battery. If you don’t, then I think the cost is probably prohibitive. But clearly we would look at all bases for you to make sure that anything generated is used for your business.

Georgia Lomas [00:19:18]:

So we’ve touched on this before, but in the UK, do we have a suitable electric infrastructure to power the electrification of HGVs? If not, what do you think needs to happen for us to get to this point?

Phil Henrick [00:19:34]:

Yeah, I think we’ve discussed it a couple of minutes ago. We don’t, and I think that’s probably along with product that’s not there, but is certainly coming in the next twelve months. But I think the infrastructure piece is the thing that’s really holding back adoption. And if I was an operator, I would probably be thinking exactly the same. There’s plenty of operators out there who are committed to net zero, but if they can’t recharge their vehicles and they can’t be reliable for their end customers, then it’s a really difficult thing to do. And have the adoption of EV HDVS. It can be done. It was interesting, I was in a seminar with most of the established big truck OEMs recently, and all of them bar one was hedging its bet, saying that it thinks battery electric trucks and fuel cell electric trucks can work in tandem. All the other OEMs are convinced that it can be done. Even trunking, it can be done with battery electric trucks. So I think you will see over the next 12, 18, 24 months some really interesting product coming. I think, as I said before, I think there is a place for government. If they’re serious about net zero, then the industry needs some help because these big potential truck hubs along major routes as we stand today, with the product in the market, they would probably need 350 kilowatt chargers, which are not cheap, but within 1218 months those chargers would need to be upgraded to megawatt chargers. That’s a lot of investment, but it’s also, more importantly, a lot of power. A lot of power required to the site. So I think there is definitely a role for government to play, whether that’s helping to finance or giving tax breaks to finance or to encourage the development of hubs, but also the need for power in the right places at those sites. So I think there is most definitely there’s a role for manufacturers, there’s a role for us as an infrastructure provider. But I think as we see in other markets, when government comes to the party, there is an acceleration of this.

Georgia Lomas [00:22:12]:

So other than the electric infrastructure and the product, in your opinion, what else needs to happen in the UK for us to meet 2030 target?

Phil Henrick [00:22:23]:

I think that the main thing. If you look at urban sort of last mile delivery van and truck, and when I say truck, we’re talking probably seven and a half ton, maybe up to 19 ton, it’s 18 ton with a ton derogation for the battery trucks. And also the bus market is moving forward through private investment in depot charging infrastructure. It is happening because we prove that the product is there, certainly van and certainly bus. The product is there already. I think the real inertia, as we’ve mentioned before, are the long haul routes where the need to charge en route, the opportunity charges there. I think we’ll need charge point operators need to build premium truck hubs, but that will take time to upgrade existing motorway services and acquire new land, new infrastructure, the power going to it. There’s an argument that do we cite these trucking cubs rather than at motorway services, do we cite them actually where the power is, which may be a ten minute drive away from the motorway? It could be that and then obviously operators like your customers are going to have to then look at slightly modifying their driver’s day. We can also look at a consortium of truck operators potentially jointly investing in truck hubs to make it happen, do it as a members only with reduced energy costs. And you could also see potentially big HGV operators developing their own depots and maybe put a metaphorical wall down the middle and the other side of the wall could be open to the HGV zone by other fleets who need to do an opportunity charge at any moment. And that’s potentially therefore an income stream for those bigger fleets. But I come back to it. As we’ve seen in buses, which is really moving at a pace now, public funding has most definitely been a catalyst to make this happen. So I think we can talk about privately held operators building hubs, truck operators coming together to maybe build hubs, or truck operators installing at depots and having a portion of the depot open. They will have an impact. But coming back to it, I hate to drone on. I do believe that the example we have, particularly in the bus market where there has been some public sector intervention, I think if we can get that we can start to really speed up this adoption of EV HGVs.

Georgia Lomas [00:25:23]:

Do you think that it’s achievable now for businesses to move to an electric fleet?

Phil Henrick [00:25:30]:

It really does depend on the business and it comes back to, I think, when we first started chatting, Georgia, everything we do is driven by customer data. So if we were to work with one of your customers, that’s exactly our starting point would be, and it goes as granular as registration plate, so we can say to one of your customers, this is the proportion of fleet by plate that you can electrify today, and this is the infrastructure you would need to do it. There will be some fleets that could potentially go to 100%. If you’re dealing with fleets that are operating a fleet of vans and they’re doing last mile delivery into a city and they’re doing a certain mileage every day, then they probably could change the whole fleet. Very unlikely that you come across a fleet like that. So where it’s a mix of vans and HGVs, potentially the vans could go on some of the smaller HGVs. Again, we’d have to look, because, as you know, Georgia, every fleet is different. It has completely different duty. A a fleet operating in East Anglia is going to probably find it easier than a fleet operating in Sheffield, which is full of hills, so it’s even down to that sort of granular data.

Georgia Lomas [00:26:48]:

What would your advice be to someone who’s looking to electrify part or all of their fleet?

Phil Henrick [00:26:54]:

Whilst certainly for vans, we have the cutoff point of 2030, obviously HGVs is longer, that seems a long way away. My advice, however, would be to start thinking. Now, I’m sure your listeners will say, well, you would say that, wouldn’t you? But what I think most people in our industry would say is that as 2030 approaches, we are really going to see some supply chain bottlenecks. Because if fleets leave it and don’t do anything until the last minute, then when you go to the DNO, effectively to look at that grid upgrade, they will say, we go to the back of the queue and join that queue, because we’ve got a whole host of others who need the same when they’re looking to actually have installed the charging infrastructure. Well, there’ll be another queue with whichever, whether it’s bev or another, because there’ll be lots of fleets looking to do the same, and even on products as well. It could be a situation where the OEMs are saying, well, that’s absolutely great, but join the queue because everybody else is wanting electric product. Doing it now doesn’t mean to say that you have to do everything 100%. What we would do is if we implemented, say, charging infrastructure for 10% of the fleet, we’d still future proof it for that journey to 100%, because the last thing a fleet wants us to do is go back in two years time and dig their yard up again, completely counterproductive. So we would future proof it, because we see ourselves very much as a partner to work along on a journey to get to 100%, so that would be fully explained of what we were going to do. So we future proofed it so that as the fleet shifts and migrates to electric, we can just install additional chargers without having to go in, dig up, lay new cabling. So my message to your customers now would be, start looking today, because we will see supply chain bottlenecks as we get closer and closer to 2030. And ultimately, you need to be able to carry on operating your businesses seamlessly.

Georgia Lomas [00:29:19]:

Yeah. So how could people get in contact with you, Phil?

Phil Henrick [00:29:25]:

My email is pretty easy. We have three letters. P-N-H so, Papa november hotel at Vital But really, we’re delighted to work with Alltruck. So if you have a direct line into Alltruck, you can speak to Georgia, speak to Paul, whoever your contact is, and we’d be delighted to have that conversation with you through your trusty partner in Alltruck.

Georgia Lomas [00:29:56]:

Great, thanks. Phil, is there any exciting plans on the horizon for Vev?

Phil Henrick [00:30:03]:

Yeah, there are other countries that we’re clearly looking. You know, we won’t just be restricted to the UK. Being part of a global company like Vitol means that we can, to an extent, be opportunity led. So, for example, we’re tendering for businesses, sorry, for opportunities in EU countries now, because we know that if we are successful, then it’s pretty easy for us to set up in those countries. So very much a geographical expansion and a growth of the UK business, because we’re seeing now really starting to just scratch the surface. The more conversations we have, the more we see that whilst some fleets really do have a clear strategy and a clear direction, there are plenty of fleets out there who are looking for a trusted partner to help them and guide them through what is a major, major change. This is as big as moving from horse and cart to internal combustion. You know, I think exciting in the fact that we’re just scratching the surface now.

Georgia Lomas [00:31:16]:

Yeah, definitely. Well, thank you so much, Phil. That was some really great advice and discussions there and we really appreciate you coming on to the podcast.

Phil Henrick [00:31:28]:

Absolutely delighted, Georgia, thank you very much indeed.

Georgia Lomas [00:31:30]:

No worries. Take care, Phil.

Phil Henrick [00:31:32]:

Thank you. Bye.