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Charging toward a clean energy future

cathy_zoi

Partnerships can be the secret weapon to rocketing your company to the next level. That’s what Cathy Zoi discovered when she became the CEO of charging station network, EVgo. Whether it be partnering with grocery and department stores, or aligning with the Tesla customer-base, targeting allies and collaborators are a crucial catalyst for how EVgo has grown to become the nation’s largest public EV charging network.

“The impacts of climate change are being so palpably felt, it behooves all of us to figure out how we can do clean energy and do it economically.”

— Cathy Zoi
About the guest:
cathy_zoi

Cathy Zoi is CEO of EVgo, the fastest-growing U.S. player in electric vehicle charging stations. With the federal government passing huge new funding to address climate change, EV charging is poised to be a growing part of American society.

About the host:
bob_safian

Bob Safian is the host of Masters of Scale: Rapid Response, and the editor-at-large for Masters of Scale. He’s the founder of The Flux Group, a media, insights, and strategic advisory firm. He was previously editor-in-chief of Fast Company, where he won the National Magazine Award for Magazine of the Year in 2014.

With the federal government passing huge new funding to address climate change, EV charging is poised to be a growing part of American society.

— Bob Safian
Transcript of Masters of Scale: Charging toward a clean energy future

CATHY ZOI: The impacts of climate change are being so palpably felt, it behooves all of us to figure out how we can do clean energy and do it economically. When I was at the Department of Energy, goodness gracious, batteries were 10X what they cost today, solar was 10X what it cost today. With more use, more learning, all of those costs come down. We must accelerate our use of non-carbon emitting sources as soon as possible.

During the pandemic, EVgo doubled in size, and we went truly national. Every new person I get to meet, I ask every single one, “How are we so lucky to be able to get you to come to EVgo?” And 95 out of 100 have said, “Because I want to work someplace with a mission that matters.” It’s hustle. It’s fast. It’s technology. It’s innovation. We’re helping to solve one of the world’s biggest problems, and we’re punching much above our weight class in how we’re doing that.

BOB SAFIAN: That’s Cathy Zoi, CEO of EVgo, the fastest-growing U.S. player in electric vehicle charging stations.

With the federal government passing huge new funding to address climate change, EV charging is poised to be a growing part of American society.

I’m Bob Safian, former editor of Fast Company, founder of the Flux Group, and host of Masters of Scale: Rapid Response. I wanted to talk to Cathy because, while the transition to electric cars has gotten a lot of attention, an EV future also requires remaking how we fuel those vehicles, with longstanding gas stations giving way to a new formula.   

Cathy is at the center of this transformation, working closely with retailers, utilities, ride-sharing firms like Uber, and car manufacturers. 

One of the pioneers of the EPA’s Energy Star program for appliances, Cathy has a deep understanding of how government and business can work together to address climate issues. She’s launched several energy start-ups, was founding CEO of Al Gore’s climate organization, and oversaw a $30 billion energy investment program for the Obama White House.

Cathy took the helm at EVgo in 2017 and led the company to a successful IPO last year. Now all she has to do is convince Americans that filling up the car via plug versus pump is better, cheaper, and simpler than they think, and in the process accelerate an EV revolution.  

[AD BREAK]

SAFIAN: I’m Bob Safian. I’m here with Cathy Zoi, the CEO of electric charging network EVgo. Cathy, thanks for joining us.

ZOI: It is my pleasure.

SAFIAN: The U.S. government this year has passed two large measures that impact renewable energy, the Bipartisan Infrastructure Law, the new Inflation Reduction Act — the federal government addressing climate change. This investment gets a lot of people excited. It gets some people angry. When these measures were passed, how did you react?

ZOI: I’ve been working on climate change solutions for 30 years, so this is super, super exciting to me. I mean, the biggest source of greenhouse gas emissions now in the United States is from the transportation sector. These particular pieces of legislation will accelerate the transition of the transportation sector to being one that doesn’t emit carbon, and so that’s really exciting for the whole transportation sector. It’s exciting for the U.S. economy and, of course, it’s exciting for EVgo because, as an infrastructure provider, we’re a key ingredient to having that transition happen well.

SAFIAN: EVgo has now 850-or-so charging stations nationally. It’s the largest fast-charging network in the U.S., but 850 is still small. I mean, there are 150,000 or more gas stations in the U.S. How should we expect the pace of EV charging expansion to go, and what about this legislation might adjust what that trajectory looked like?

ZOI: Yeah. We are in the early innings of this transformation. Right now, we’re in single digit in terms of penetration of EVs on American roads, but that’s going to accelerate. What we do with EVgo is we like to build just ahead of demand. We actually get a return on our investment because EV drivers are using our infrastructure, so if we build too early, then we have idle infrastructure. If we don’t build soon enough, then we have frustrated drivers. What we’re doing is we’re matching that.

What the new pieces of legislation do is they bring all of that forward. They accelerate the pace at which companies like EVgo can deploy our infrastructure and actually get a return on our investment to cover our costs so that we can actually build more. I mean, by the time we have all cars as EVs, maybe that’s 2035, 2040, we’re going to have hundreds of thousands of fast-charging stations and millions of level-two charge ports all across the country. Again, early innings, 850 locations, about 2,000 charging stalls is what we have now, but that’s going to quickly ramp up in that proverbial hockey stick way.

SAFIAN: That ramp up, is it hard? Does it take a long time to set up a charging station?

ZOI: It takes us somewhere between four and eight weeks to actually build a fast- charging station, but from idea to when that station gets energized, right now, it takes somewhere between 12 and 18 months. You’re like, “Why is that?” Well, because we are building in other people’s parking lots. The site hosts who have the parking lot have to be like, “Okay. Yeah, you can build your stations here.” The utility has to provide the electric power to those charging stations. Now, what we’re doing is we’re building ultra-fast 350-kilowatt, to get geeky for a second, charging stations. Those almost always require the utility to come along and provide what’s called a service upgrade. Again, that takes some time.

We do the construction process, and then, before we can allow drivers to come and charge on those stations, the utility has to do a final inspection. When the flywheel is well and truly spinning, these should take maybe six months, but everybody’s just getting their sea legs on how to do this fast.

SAFIAN: I guess, the rules in each place are probably a little different, too, regulatory-wise.

ZOI: The local government authorities. The same people that approve when you’re going to do a home renovation are the folks that say, “Yeah, you can build a charging station in this grocery store parking lot.” Some of them have a lot of experience, and you can do it all electronically. Others, they go to several different local government council meetings over a period of months to say yes to it. Again, it varies by jurisdiction.

SAFIAN: Traditional gas stations differentiate on price or maybe on their convenience stores. When you look at it, what will differentiate EV charging stations from each other, or is the goal to make them all like commodities, like it’s so easy to have it out there?

ZOI: No. EVgo doesn’t believe that charging needs to be a separate destination. If you’re in a metropolitan area, you should be able to plug in and charge and go do something else that you want to do. This is why we love building our stations in grocery store parking lots, at shopping centers so that you can go get a manicure while you charge, get a coffee with a friend next to a park. What we do is we match the power to the typical dwell time. You’re going to go in and shop at a grocery store for 20 or 30 minutes. The configuration of those charging stations will match that so you can get a good amount of electrons into your car while you go do the shop. That’s one way to differentiate, just be where people want to be anyway.

Another thing that we do is we add extra stuff on top. You can make a reservation when you go to an EVgo charging station. If you know that you’re going to go shopping at a particular time or your daughter has piano lessons, you can actually reserve that charger and know it’s going to be there when you get there. At some locations, you can plug in, and you’re going to get a really nifty coupon from the store where that charging station is located. I mean, we piloted this with a grocery store chain in Northern California which said, “Hi. Welcome to Lucky Save Mart. When you plug in here, come into the store and you get $10 off your shopping cart.” People love that. We get 40% click-through rates with offers like that.

For us, that’s how we like to differentiate what we’re doing.

SAFIAN: Yeah. I know that your EVgo stations often have names, too, some named after Star Trek characters, after Biden’s dogs. What’s the thinking behind naming the stations?

ZOI: I joined EVgo in 2017, I had only been with the company for a couple weeks. We went to this one charging station that we were having a little bit of difficulty with, so we called the call center, and the call center said, “Which charger are you? Where are you?” And it with this long, Dewey Decimal-length code with letters and numbers that was going to get transferred. I said, “This is silly. Why don’t we just name our chargers? Why don’t we give them names that are recognizable?” because it actually makes it more fun, and it actually helps with the user experience.

Now, if somebody has an issue with one of our chargers, they can say, “I’m at charger Bob.” It’s gotten more and more fun over time. You mentioned our Star Trek chargers. In Long Beach, we’ve named one of our stations after some of the hometown heroes, Billie Jean King, Snoop Dogg. In Union Station in Washington, DC, they are all named after First Dogs.

SAFIAN: Part of the business model for EVgo is a membership. I was trying to figure out the right way to understand this just because it’s not exactly a Netflix model because you pay for using it. It’s not like my membership at Netflix. It’s not exactly like Starbucks, although there are rewards to it. Is there a parallel that exists that you’re emulating for what experience with your charger is to things that I might be used to?

ZOI: We do have a pay-as-you-go program. You don’t need to be a member. You can just drive up and charge with a credit card, with an RFID card, with our app. If you are a more frequent user and you want to be a subscriber, you can get a better price if you become a member, and we have various different membership levels. The highest membership levels, you get free reservations on our network. Maybe it’s like some of the airline offerings where frequent flyers get a few more benefits, and they may get better access to the lounge in the airport, those sorts of things.

So, if you’re a member, every time you charge at EVgo, you get reward points, and then you get to redeem those reward points for extra charging sessions. You get reward points on your birthday, things like that.

SAFIAN: A lot of Americans can charge from their homes. About a third of them can’t. Those could be two different distinctive markets. Do you have a sense yet about what the different customer groups look like, or is all that in evolution?

ZOI: I like to say we’re moving toward a market size of one. We want to be able to give you, Bob, exactly what you want based on your driving behavior. We collect a lot of information about driving patterns. I mean, in the earliest days, when I got to EVgo a long time ago, we had one national price. Meanwhile, we had different costs everywhere for every single driver at any time of day. Well, we now know that there are some drivers, like our ride-share drivers that are driving EVs, they actually are very, very price sensitive. We’ve introduced time-of-use pricing in many places, so that they can get the benefit of early-bird pricing that’s a little bit less expensive. We did that in collaboration in California with the utilities that say, “We love charging. We love EVs, but we’d love to encourage your use of your network at non-peak times.”

So we worked with them, and we introduced pricing that would entice some of those drivers who are most price-sensitive to charge at off-peak times. Equally, we know some of our other drivers are not price sensitive at all. It’s all about: is there a charging station that is right near where I want to be?

SAFIAN: And the variable pricing based on time of day is sort of a reflection of the way the marketplace for electricity works in that location, based on what demand is at those times?

ZOI: That’s right. That’s right. EVgo purchases electricity from our local utilities. And those utilities have cheaper rates at off-peak hours and more expensive rates typically at the peak hours to try to elicit some sort of response from their consumers. We’re a consumer, and we then pass those price signals on to our drivers because again, it all benefits the integrity of the grid.

SAFIAN: Is there a point where if you’re EVgo and you’re buying your energy in bulk in a certain way from those utilities, that it might be cheaper for me to go to EVgo than to plug in at my home?

ZOI: Well that would be unlikely just because of the cost of our equipment. That would be like, will it ever be cheaper for you to go to Starbucks than to brew your coffee at home, right? So let me just tell you, again quite frankly, what the costs are. So if you plug in at home into a wall, it might take you with just a regular power point, it’ll take you 36 hours to charge your car from zero up to the full battery maybe. But you’ll be paying whatever your residential rate is when that electricity’s getting absorbed, right? But there’s no extra capital equipment. If you install a higher powered charger at home, we call level two, that’ll cost you somewhere between $1,000 and $5,000 right? And you’ll be able to charge overnight, right? But you will have spent $1,000 to $5,000.

Well, one of EVgo’s charging stalls that’s very ultra high power where you’ll get a charge in 15 to 20 minutes, that costs about $130,000. So that’s an expensive piece of equipment. It’s got 2,000 components. It needs to be safe because there’s a lot of power going through it. But what we need to do in providing that convenient service that you can charge away from home very quickly, we need to actually get the money back that we’re investing in that capital equipment and in servicing that equipment. So we do need to charge you the driver more to be able to get our money back that we’ve invested in providing that convenient reliable service, just like when you get a latte at Starbucks, it’s not simply the cost of the grounds. It’s the cost of the location, the cost of the baristas, and the lovely experience.

SAFIAN: Yeah, and I’m not going to pay $150,000 to install my own charger. I just don’t have those resources right now.

ZOI: When you’re at home you don’t need to charge in 15 minutes so why would you bother right?

SAFIAN: So you mentioned your long history with climate change. You’ve worked in government in the energy department during the Obama administration, in the White House under Bill Clinton, you pioneered the Energy Star program back in the day. What’s the role of government versus business in addressing climate change, and has that balance shifted in the time you’ve been working on these issues?

ZOI: I think that the government has a role to intervene where the market is not working perfectly, and again, and there are externalities. We’ve got carbon pollution that’s wrecking the climate, that there’s no cost on that at this point, so the government needs to intervene to make sure the right signals are there for businesses to not emit carbon. So that could be done with a carbon tax that turns out to be politically not viable in America for whatever set of reasons, but they can also put carrots in place. So tax incentives to do things, to engage in business behaviors that don’t emit carbon. Or tax incentives to buy an electric vehicle rather than to buy one that causes pollution by burning fossil fuel. Since we’ve organized ourselves in civil society, government has tried to affect human behavior to get to good public outcomes. And again, the environmental arena and climate change is just one of those.

How has it changed over time? Appliance efficiency standards, where we got rid of the biggest energy hogs, have been around for decades, and those continue to be effective. Grant programs that actually support businesses to invest in earlier stage technologies that are carbon friendly, those have been around for decades and continue to be very, very important. The new infrastructure bill is going to provide a whole bunch of resources that creates a safe haven for capital. The investors might’ve looked at fossil fuel investments and now it’s like, “Wow, actually I might be able to get a decent risk adjusted return by investing in solar, or wind, or efficiency, or EVs.” There’s lots of tools at our disposal to accelerate the economy toward one that is not only environmentally friendly, but is thriving economically.

SAFIAN: You worked in government. You worked on Al Gore’s alliance for climate protection, which I think is now called the Climate Reality Project. It’s in the nonprofit world. You decided to go into the business world, right? Why did you make that shift, why did you think that was the right place?

ZOI: I’ve had this charmed career where I’ve always been able to apply my energy to meaningful outcomes and meaningful work, and I sort of fancy myself as a business person mindset with a public sector heart. And so by working on climate change solutions, I can actually, the engineer in me, the multitasker in me, the move fast and take a chance in me, can contribute in a way. But always with an eye toward, what is the public policy objective? And it’s interesting Bob, during the pandemic, EVgo doubled in size, and we went truly national. It’s a superpower to be able to hire the best talent anywhere they live.

But one of the things that we do is, every new person I get to meet, I ask every single one, “How are we so lucky to be able to get you to come to EVgo?” And 95 out of 100 have said, “Because I want to work someplace with a mission that matters.” And I think that that increasingly is important to people, and EVgo, it’s hustle. It’s fast. It’s technology. It’s innovation. But we’re also helping to solve one of the world’s biggest problems, and we’re punching much above our weight class in how we’re doing that.

SAFIAN: A lot of people go into government because they want to have a big impact, and they feel like the scale there can have impact, but it doesn’t have the reputation of being someplace that moves particularly fast.

ZOI: But I think you can have a huge impact in government. I taught at Stanford for a number of years, and I would always ask my classes on the first day, “What are you going to do when you’re finished? Okay, who’s going to go into business?” And everybody wanted to be the next sort of Mark Zuckerberg type, a lot of hands went up. “Who’s going to go into government service?” Almost no hands went up.

And I said, “Well look, one of my jobs during this course is to help change your mind, because even if you go into government service for just a few years, it’s so fulfilling. It’s so meaningful. It’s different. There’s going to be different breaks on your maybe, the pace at which you can deploy things, but the reward when you make a policy change that cuts across an economy, wow. Wow.”

SAFIAN: You worked alongside President Biden in the Obama White House. What’s it like now when you go back to the White House, when you interact with the government as a CEO?

ZOI: I think because I’ve been in their shoes and I understand the opportunities and the challenges of being in government, we can just have a really good conversation about policy design or the political challenges of getting support for something new. I just love it. We take very seriously here at EVgo to try to be a thought leader to help public policy officials. We initiated a program two years ago now called Connect the Watts, which is, brings together all of the players in the charging ecosystem: auto manufacturers, state governments, local governments, federal government, vendors, and charging companies to try to outline what’s best practice at meeting the needs of the electrification transportation system, and how can we all learn from each other? And so we really, really think it’s important to be collaborative, and I think look, I think it’s working. I think we’re making progress.

[AD BREAK]

SAFIAN: Before the break we heard EVgo CEO Cathy Zoi talk about the massive changes underway in remaking transportation for an EV future.

Now she talks about what people most misunderstand about EV charging and how taking her company public changed her job as CEO. 

She also shares lessons about the importance of partnerships in scaling a new technology, and why competing against Tesla and Elon Musk isn’t as fraught as it might seem. 

Among the other big players in EV charging stations is Tesla, and a lot of people are curious, what’s it like to compete with Elon Musk?

ZOI: Well we don’t actually compete with Elon. I mean, we’re the only charging company that Tesla allowed to put native Tesla connectors onto our charging stations, and that’s because Tesla didn’t have enough charging infrastructure to service its network because they were so successful at selling EVs. So Tesla’s got a closed network at this point, only charges Teslas. We charge everybody. And we need more charging infrastructure at large, so frankly we like having more players in the market.

We have, again, I think about 15% of our traffic in Phoenix, for example, is Tesla drivers. So we’re happy to be helpful there and happy to obviously earn the money that comes from Tesla drivers charging on EVgo.

SAFIAN: What do people most misunderstand about the transition to EV charging? Or what are the things that you feel like people miss?

ZOI: I think that there’s so much education that needs to happen. Each individual EV has almost like a fingerprint, a thumbprint, that’s unique to its model type that is the maximum power with which that car can charge. And what’s the rate at which it charges over the charging session? So that’s called the charge curve. Now the typical old EV like the old Bolts, the maximum power that it could take a charge was at about 50 kilowatts, and it could only take 50 kilowatts for a few minutes. So even if that Bolt would drive up to one of our Ultrafast 350 kilowatt chargers, it could still only take 50 kilowatts. So sometimes we would get the driver saying, “Your charger isn’t working, because my Bolt’s only getting 50 kilowatts.” That’s about the car, not about the charger.

What I would like to do is develop basically a really simple tool that says, “We know Bob that you drive a particular kind of car that has this charge curve,” and you say to us, “Hey, Cathy,” or “Hey, EVgo. I’ve got 15 minutes, and here’s where I am. And we say, “Go here, and you’re going to get 80 miles over that time period.”

You don’t need to know what your charge rate is or what the power of the charger is or anything. You just know that, “Okay, if I show up here, it’s going to be available for me, and I’m going to get 150 miles in 20 minutes.” That’s the world that we’re moving toward. We’re not there yet.

SAFIAN: And the idea that, at some point, all the vehicles will be standardized in some way maybe, but it’s not likely.

ZOI: Well, no, I don’t think so, because again, look, a big, heavy car, it’s going to have room for a bigger battery, but it’s also going to need more battery capacity to move that heaviness a mile? So right now the average little car, little EV, can go four miles on a kilowatt hour. But the bigger SUVs that are coming out are closer to three. The Porsche Taycan, which is a very fancy big engine, under three, somewhere between two and three kilowatt hours per mile. So it depends. That’s not going to get standardized because the cars are all going to be unique.

What will become standard though, I think, is the plug, the shape of that power point. So right now there are three different standards that exist in the market. There’s the CCS, which the GM and the German cars have. There’s the CHAdeMO, which the old Japanese cars have, but even Nissan is moving to the CCS. And then there’s the Tesla, which has a different plug shape. Those are likely going to converge onto the CCS standard over the next few years. That’ll happen on its own.

SAFIAN: Which I guess will simplify things for the chargers and for you guys in building your stations. They can be more simple as well.

ZOI: But one other plea we have to the automakers, Bob, is could they put the port in the same place on the vehicles? Some of them are in the back and the middle. Some of them are in the back left side; some of them in the front. So what that means is our cable lengths and the configuration of the parking spaces, oh my goodness, it has to accommodate all this. And you now have the entry of the big pickup trucks that are charging. And you need really long cables. When you match really long cables with really high power, the really high power requires liquid cooling. Those cables get heavy. So again, over time, we’re probably going to have to have overhead charging using gravity where the cables come down. Look, it’s really fun. These are fun engineering issues, but what we always have in mind, all of us in the sector, what’s going to make it easy for drivers? And that’s what we need to keep up with.

SAFIAN: So you became CEO in 2017. EVgo went public in early 2021. What changed about being CEO of a public company?

ZOI: Wow. That was a lot of change. That was a change that I didn’t fully appreciate until I started becoming a CEO of a public company. I spend a lot of time talking to Wall Street analysts and investors now. And I enjoy that. And I really enjoy it. I love, though, the stage of the sector right now, there’s no playbook for what EVgo is doing. So I love the invention of the businesses and the business models and the emerging technologies. And quite frankly, being CEO of a public company, I have a little less time at my discretion that I can spend on those sorts of things. Good news is we have a great executive leadership team, and we have a great staff of employees that are all doing that. It’s just that for my own self satisfaction I miss it a little bit.

SAFIAN: Are there different pressures that you feel as a woman CEO? And do women leaders face different hurdles in government versus your experience in business?

ZOI: Sadly, I think it’s harder being a woman in business. I never was conscious during my time in public service of being a female leader. Just really wasn’t conscious of it. I became more conscious of it when I moved out, left the Obama administration and came back to Silicon Valley, which was, even in the clean tech space, extremely male-dominated and very boy-sy, if you will. It doesn’t phase me. I mean, we just have to keep going. There’s lots of good work to be done. But I would note that of the hundreds and hundreds of calls that I’ve done with Wall Street analysts since we became a public company, probably 10 to 15 of those hundreds have been women Wall Street analysts on the sell side or the buy side. It is still a very, very male dominated kind of sector.

Why does that matter? Look, I just think more perspectives are better. EVgo has a big diversity, equity, and inclusion program, and we are actively always seeking to diversify our employee base, across verticals, across functions, because we feel like our outcomes and our outputs and our progress is going to be that much better, because again, we’re delivering electric for all. I mean, we absolutely believe that EVs are for everyone. And how can we possibly deliver on that mission if we don’t have the perspectives of the entire population in our ranks?

SAFIAN: The investor landscape that you’re dealing with doesn’t seem to have that same priority, or at least you’re not interacting with it that way?

ZOI: I haven’t seen it as much, particularly on the analyst side. I think on the investment banking side, probably more so, but on the analyst side, no. It’s still, I mean, look, lots of enthusiastic fellas.

SAFIAN: The energy that I get from an EVgo is from utilities. Not all utilities are sourcing all of their energy from renewable sources. Sometimes they’re coal-based and others. How do you manage that? And is there any relationship that you have with the utilities to encourage them to move faster in that direction?

ZOI: Yeah. So there is a well-established market for renewable energy certificates. And I pioneered one of these programs when I was living in Australia many, many years ago. 

What we do for every kilowatt hour we consume, we purchase a renewable energy certificate which ensures that renewable electrons went into the grid to match our demand. And those renewable energy certificates can only be purchased once, so there’s no double counting. So electrons, once they’re in the grid, you can’t differentiate from whence it came, so what we do is we provide that incentive to have renewable energy enter the grid by buying those, what are called, Rex, so that’s how we handle that. Over time as you point out, more and more utilities are going to be going 100% renewable energy, and that’s great. But we are not that patient; we want to make sure that we’re jump-starting the market by financially providing an incentive for more renewables to enter the grid as soon as possible.

SAFIAN: Yeah, it’s been a tricky time lately because as energy prices have shot up, suddenly sources that maybe were less palatable, people are saying, “Oh, well maybe in the near term we need to continue to rely on some of those sources.” You’re grimacing a little bit like, “That’s a bad idea.”

ZOI: I just think that the impacts of climate change are being so palpably felt, it behooves all of us to figure out how we can do clean energy and do it economically. When I was at the Department of Energy, goodness gracious, batteries were 10X what they cost today, solar was 10X what it cost today. With more use, more learning, all of those costs come down. So I think that we have to take it as a given, we must accelerate our use of non-carbon emitting sources as soon as possible. So that’s why I was grimacing.

SAFIAN: So what’s at stake for EVgo right now?

ZOI: We have to build as fast as we can. We need to get all of the players in the EV ecosystem to get us from 18 months down to six months, because we have so many EVs coming to market. The next 24 months, it’s another a hundred or so EV models. Used to be that Tesla was completely dominant, great vehicles. That market share is going down not because Tesla’s sales are going down, but because there’s so many other choices. So we need to build as quickly as possible. And we need to do it across the country.

SAFIAN: Are there lessons going through this transition that you have learned that might be useful for our listeners and other businesses that are dealing with their own kinds of transformation?

ZOI: One of my thesis when I came to EVgo … I didn’t found the company, the company was in existence. Our team was going to site-host one by one and getting individual contracts. I said, “Oh, if we’re going to scale, what we need to do is sign agreements with big companies because it’s going to be much faster.” The big grocery store chains like Kroger and Albertsons and Whole Foods, it’s going to be faster. Guess what? It’s not. Because those big companies have bureaucracies; they’re not government, but they’re companies that have bureaucracies and the decision making is a bit fraught. So what our site developers find is that sometimes the one-off grocery store, owned by a mom and pop, is faster than the big companies.

Now, that doesn’t mean we don’t want to keep working with the big companies. It just was not intuitive to me that the bigger companies might move more slowly. So that’s just a lesson that we’re taking on board as we think about scaling. There’s a zillion different lessons. Being a good player in the ecosystem has been really, really important for us. We partner. We partner with car companies, we partner with governments, we partner with site hosts. If there’s an issue or a problem, we say, “We don’t have the answer to it. Let’s figure it out together.” I would advise my colleagues that are trying to scale to put bravado off to the side and just say, “Look, let’s roll up our sleeves and get this done together because it’s too important.” So, philosophically, that’s what we’re bringing to the table, I think.

SAFIAN: Oh, that’s fascinating. That the smaller players sometimes are easier to work with, and you can work with more of them more quickly than the big ones. I guess you have to find partners who have the same mindset as you do about the urgency of the situation you’re in.

ZOI: If you’re a student of organizational behavior and institutions, the middle managers have to be empowered to say, “Yep, let’s go.” And that’s a really unusual large organization that truly has that empowerment, right? And again, I’m talking about the new tech companies too. They are no different from the old guard. Once a company becomes big, it’s like, “Uh-oh, how much autonomy do I have in saying yes to something?” All of the business books I’ve read over my whole career, it’s like that there are companies … they hold up companies that allow that autonomy but it’s very, very difficult in practice to maintain the financial discipline and the rigor, and allow total autonomy.

In the early years when we were inventing, when I was inventing Energy Star, and that started with personal computers, that’s the first piece of Energy Star equipment. We were working really closely with Intel. And Intel was inventing a super energy efficient chip, and they were really excited about it. In fact, in these early days they etched an Energy Star logo onto that little tiny chip. And they were so much fun to work with, and they were already a pretty successful company, this is probably the late 80s. And I said, “Wow, what is your guys’ organizational structure?” It’s like, “Oh, we change it so frequently, we never even write it down.” And I remember that being so like, “Wow. I’m going to aspire to do that, to run a company that way.” Well, now that I’m running a company and we’re only 300 people, there’s no way we could function if we didn’t have an organizational structure of some sort.

So it’s just the practical reality of decision making is we want it to be faster, but we also want it to be disciplined. And I think some of these large companies that are their core business is not EV charging, their core business is providing groceries. It’s not necessarily the person with the power base that can say, “Yeah, let’s go build a charging station.”

SAFIAN: Hm. And because you want to scale to be much bigger, how do you help maintain that flexibility, the idea that the structure doesn’t get in the way as you grow of being able to move fast?

ZOI: The innovations that we’ve tried to do is come up with standard templates, so that every time we go back to one of our grocery store partners, it’s not a brand new thing. It’s like, “This is just like we did here, here, and here.” So getting to yes easier. We make it as easy for them as possible. The utilities are the long pole in the tent right now in terms of timing for getting a station live. We often provide the engineering design off of our nickel and say, “Look, this is consistent with what you wanted, but here we go.” We come to them with our build plans 18 to 24 months out and say, “We’ve looked at your grid. And so here’s where we’d like to build, does this work for you?” So what we try to do is help them help us, and that’s proving to be quite effective.

SAFIAN: Well, Cathy, this has been great. And I want to thank you for sharing again, taking the time to be with us.

ZOI: Well, thank you for the opportunity, Bob. It’s a great show. I love it.

Masters of Scale’s mission is to democratize entrepreneurship. Launched in 2017 as a weekly podcast featuring Reid Hoffman, we’re now two weekly podcasts — Masters of Scale with Reid Hoffman, and Masters of Scale: Rapid Response, hosted by Bob Safian — as well as an award-winning daily learning app, a best-selling book, virtual and live events, and more, serving a global community of founders, funders, and leaders looking to innovate at scale.
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