Feb 14, 2019

Axios Generate

By Ben Geman
Ben GemanAmy Harder

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Today marks the 1972 release date of Neil Young's "Harvest," so he'll play us into the newsletter...

1 big thing: ChargePoint CEO sees EVs and AVs intertwined in future

Illustration: Axios Visuals

Electric vehicle infrastructure giant ChargePoint is using some of its recent $240 million fundraising haul to position itself for interlocking changes that await: the electrification of different types of vehicle fleets and the rise of driverless tech.

What's new: CEO Pasquale Romano says in an interview with Axios that despite it being early stages of autonomous vehicle technology, AVs should be included in the infrastructure industry's long-term planning.

“Everything we know about transportation is going to get disrupted ... including charging,” Romano says. “What we have to do is make sure that we are early in supporting that."

How it works: If AVs, EVs, and the electrification of fleets — such as ride-hailing services, commercial delivery vehicles and government vehicles — were a Venn diagram, there would be lots of overlap.

  • Ultimately most AVs will be electric.
  • The places that AVs and electric fleet vehicles charge are likely to be different than personal vehicle charging spots.
  • Charging will probably be concentrated in depots that can handle a range of vehicle types, Romano notes.

Between the lines: That's a seismic shift over the long-term, Romano notes.

“It changes your architecture for your products. It changes the scope of what your software has to talk to on the fleet side, it changes the scope of what your hardware has to deal with on the fast-charge side,” he says.

Why you’ll hear about this again: Romano, whose California-based company says it has the world's largest commercial charging network, agrees with projections that as AVs rise, so will total vehicle miles traveled (VMT).

  • "As long as we are attached economically to VMT in some way, we should be fine. This is a huge market,” Romano says.
  • Romano adds that preparing for the use of EVs and AVs, especially in vehicle fleets, means "you have got to be thinking literally with a 20-year lens" — and even much longer.

Here are a few more takeaways from my interview with Romano, whose decade-old company is expanding in the U.S. and Europe...

1. The red state opportunity: He expects that southern states where automakers are expanding EV production — including Georgia, Alabama and Tennessee — will be a charging growth area.

2. The European market: “My assumption is that there will be continued consolidation. It is not going to 1 player. It is too large a market, right? But it can’t be 20,” he said, noting companies need scale to compete.

3. The future of retail: In addition to electrified bus fleets, which is a focus for the company, Romano sees the growth of online retail presenting a big opportunity.

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2. More EV notes: Amazon, Ford, VW

Amazon: Morgan Stanley analysts have some more perspective on why the retail behemoth might be investing in the startup EV truck maker Rivian Automotive, a move Reuters first reported and my colleague Joann Muller analyzed here.

  • Morgan Stanley notes that in recent years Amazon has been expanding its logistics network and point to the company's investment in the self-driving car startup Aurora.
  • "We believe the reported investment discussions with Rivian Automotive, if confirmed, could represent a potential opportunity for Amazon to use the technology to shape electric delivery vehicles to support its own logistics efforts as well as another opportunity to tap into the $900 [billion] total logistics [total available market],” they add.

Ford and VW: The companies signaled a few weeks ago that their new partnership on commercial vans and trucks could expand into EV efforts as well. But that's looking unlikely now, CNBC reports.

  • "[T]heir programs are out of sync, 'almost like snowboarding and skiing,' Jim Farley, Ford's president of global markets, said Monday," per CNBC.

Tesla: Via Mashable, "On Wednesday, the carmaker rolled out 'dog mode' through a software update, a feature which keeps the air-conditioning running and tells passersby that your pet is OK through the centre screen."

3. Trump wades into California's transit retreat

California Gov. Gavin Newsom disputed President Trump's claim Wednesday night that the state owes the federal government $3.5 billion after being "forced to cancel the massive bullet train project" estimated to be completed by 2033, Axios' Khorri Atkinson reports.

"Fake news. We’re building high-speed rail, connecting the Central Valley and beyond. This is CA’s money, allocated by Congress for this project. We’re not giving it back. The train is leaving the station — better get on board!"
— Gavin Newson, via a tweet

ICYMI: The newly elected governor said Tuesday that the state scaled back plans to build an estimated $77 billion high-speed train from San Francisco to Los Angeles, saying that the project cost too much.

Yes, but: It won't be completely canceled, as Trump claims, and will focus on the Central Valley part of the route, from Merced to Bakersfield.

  • Newsom also said the state would have to return $3.5 billion in federal money if construction stops on the Central Valley leg or if it fails to complete its environmental reviews, AP reports.

The intrigue: While Newsom stopped short of declaring the wider project dead, it's clearly on ice.

  • The Los Angeles Times has published an in-depth look at how the long-planned project ballooned in costs and engineering complexity — think land acquisition woes, geological complexity, and more.
  • "[B]ite after bite, huge cost overruns, mismanagement, political concessions and delays ate away at the sleek and soaring vision of a bullet train linking San Francisco to San Diego," they report.

What they're saying:

4. Petro-notes: Venezuela, prices, climate

Venezuela: Per Reuters, "Venezuela’s opposition-controlled congress named new temporary boards of directors to state-oil firm PDVSA on Wednesday, in an effort to wrest the OPEC nation’s oil revenue from increasingly isolated socialist President Nicolas Maduro."

State of the market: "Oil prices neared a three-month high on Thursday on a combination of positive macroeconomic signals and falling output from major crude producers including Saudi Arabia," the Wall Street Journal reports.

Climate change: Bloomberg takes stock of a new report from the nonprofit group Carbon Tracker. The big takeaway: "Oil and gas companies continue to link executive pay to the discovery of energy resources the world can’t safely burn, potentially jeopardizing shareholder value."

5. Ryan Zinke heads to K Street

Former Trump campaign manager Corey Lewandowski and former Interior Secretary Ryan Zinke are joining Turnberry Solutions, a lobbying firm founded by former Trump campaign aides, Politico reports.

The big picture: Zinke resigned as Interior secretary amid several investigations into his travel and potential conflicts of interest, including a Justice Department probe into whether he lied to investigators from the Interior's inspector general's office — a potential criminal violation.

  • Zinke, a former Montana congressman, is the first Trump cabinet member to join a lobbying firm after leaving the administration.

Where it stands: Per Politico, Zinke will work with clients in the energy and defense space, and he’ll split his time among Montana, California and Washington.

  • The story, citing Turnberry partner Jason Osborne, notes Zinke's ability to directly lobby the administration is limited by Trump's ethics pledge and he doesn't plan on doing it.
  • "But he’s allowed to lobby Congress, in which he represented Montana for one term before resigning to join Trump's Cabinet," the story notes.
6. How the Senate Green New Deal fight will unfold
Giphy

Senate Majority Leader Mitch McConnell signaled yesterday that his plan to bring up the Green New Deal resolution for a vote will unfold sooner than later, though the exact timing is unclear.

Where it stands: McConnell yesterday began the Senate procedural maneuvers to bring up Democratic Sen. Ed Markey's measure — which is co-sponsored by several 2020 White House hopefuls.

  • McConnell's spokesperson said that aside from some very small wording tweaks made for process reasons, the plan is to bring up Markey's measure as written.

Why it matters: McConnell and other Republicans see a political opening to put Democrats in a tricky spot in the wake of the GND rollout last week.

  • The unveiling of the measure was complicated by Rep. Alexandria Ocasio-Cortez's office posting an FAQ document that made a series of controversial claims that aren't in the underlying resolution.

What's next: "The Rule 14 process takes three legislative days, so the GND will be available for consideration soon. Once the Senate attempts to move to the bill, if there are any Democrat objections to voting on their bill, it takes 60 votes (cloture) to proceed to the bill itself," McConnell spokesperson Don Stewart said in a memo to reporters.

  • But it's unclear when the votes will actually happen, given the upcoming holiday and Senate calendar.

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7. One solar Valentine’s thing

Photo: Amy Harder/Axios

As part of her reporting trip in Australia, Axios’ Amy Harder visited a rooftop solar installation at the Sydney Markets, an expansive produce and flower market.

Details: The installations, spread across the market’s rooftops and car parks, add up to just over three megawatts of power.

  • That covers about 11% of the market’s electricity use, according to the company behind the project, Autonomous Energy.

The big picture: Australia is a microcosm of both the challenges and opportunities that persist in the global transition to cleaner sources of energy as concerns about climate change mount.

  • The nation is just one of a few poised to be economically worse off by the 2015 Paris Climate Agreement given its outsized dependence on fossil fuel exports, a recent Brookings Institution report argued.
  • Yet employment in its renewable-energy industry is poised to expand dramatically after the agreement goes into effect in 2020.

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Ben GemanAmy Harder