Rex Jackson, chief financial officer of ChargePoint, joins Opto Sessions to discuss the timeframe for the electrification of the US fleet, the differentiators that set ChargePoint apart from its competitors, and the advances in EV technology that are encouraging faster adoption.
LISTEN TO THE INTERVIEW:
Rex Jackson is the chief financial officer (CFO) of ChargePoint [CHPT], the world’s largest electric vehicle (EV) charging network and the first to be publicly traded. ChargePoint boasts over 48,000 charging stations globally, and Jackson is committed to making the company profitable by the end of 2024.
Before joining ChargePoint in 2018, Jackson served as CFO for Gigamon [GIMO], Rocket Fuel, JDS Uniphase and Symyx Technologies and held senior executive positions at leading public and private companies, including Avago (now Broadcom [AVGO]) and Synopsys [SNPS].
Jackson’s career began at Read-Rite Corporation in 1992, where he rose to vice president of business development and general counsel, having graduated from Stanford Law School.
ChargePoint’s business model centres on achieving four qualities for its charging infrastructure: ubiquity, accessibility, usability and reliability.
“Our business model is not to own and operate,” Jackson tells Opto Sessions. “Where we make money is selling hardware connected to hosts who have the footprint, and we allow them to provide a service to their customers and their employees.”
ChargePoint makes margins both as one-off payments on the installation of hardware and in recurring form through subscriptions to its software. So businesses like cinemas or shopping centres can install ChargePoint chargers in their car parks and offer access to employees or customers either as a gratuity or for a charge.
In terms of differentiation from its competitors, Jackson feels the main difference is scale. This enables ChargePoint to shape its offering to its customers’ needs.
“If we walk into a customer, we don’t say, ‘I'm hoping all you have is nails because I sell hammers’. We walk in and say, ‘We can do something that's a simple wall mount all the way to a distributed architecture that can provide you a megawatt of power if you really want that.’
“The sheer production breadth is a huge differentiator between us and anyone else.”
The company’s firmest foothold is in North America, where it has, according to Jackson, above a 70% share in the AC commercial charger market.
Europe is a newer market for ChargePoint, but one that Jackson is bullish about — not least because of the appeal of potentially being able to drive an EV around the whole continent, from country to country, using a single networked charging infrastructure. In its most recent quarterly results, Europe contributed more than a fifth of ChargePoint’s revenue for the first time ever.
EVs on the charge
The adoption of EVs is central to ChargePoint’s business model; as Jackson points out, its revenue is directly correlated with changes in North American EV sales. With the underlying technology rapidly overtaking the capability of internal combustion engine (ICE) cars, barriers to more widespread adoption are falling fast.
Charging technology has advanced to the extent that the cars and their batteries themselves are, typically, the limiting factor in how fast an EV can be charged.
“If we wanted, with our infrastructure, to hit a car with a megawatt, we could do that,” says Jackson (he points out, however, that this would be akin to zapping the car with a lightning bolt).
That said, Jackson says that most cars can be charged to 75–80% within 20 to 30 minutes. Added to the fact that he drives a Tesla [TSLA] himself, it is understandable that he is an enthusiastic proponent of EVs in general.
From a charging perspective, one of the most critical advances in EV technology is range. There are still limiting factors on this front. Batteries drain faster in colder temperatures, and the furthest any currently available EV can go on a single charge is 464 miles. This compares unfavourably with the most far-ranging ICE cars, several of which can manage over 1,000 miles on a single tank of petrol.
However, as Jackson points out, it is rare that drivers need more range than EVs currently offer. “90% of charging happens at home,” he says, with a further 7% occurring “in and around town” (such as at workplaces or shopping malls). Mid-journey, or “destination” charging, accounts for only a very small amount of EV charging activity.
As well as being durable, “EVs are fast. Really fast”. Jackson says that his nine-year-old Tesla can reach 60mph in 3.4 seconds — comparable to petrol supercars. Acting in their favour on this front is the fact that a battery’s weight, which accounts for the majority of the weight of an EV, is far easier to distribute evenly throughout a vehicle, naturally boosting its aerodynamics compared to ICE cars.
The future of the EV market
Jackson sees the US vehicle fleet becoming 100% electric over a 15- to 30-year time period. Given the very low percentage of the US fleet that EVs currently comprise, this implies a rapid acceleration in EV ownership.
“I think it’s going to be a little bit jolty,” says Jackson. “Having basic availability was a huge inflection point for the industry.” Now that EVs are widely available, though, the challenge is for people to buy them.
“Macroeconomic forces are not as favourable for that as they should be,” says Jackson.
“Having basic availability was a huge inflection point for the industry.”
However, he believes that society is over a “jump” when it comes to EVs and that behaviour will start to radically shift over the next two to three years. During that time, he says, “People are going to say, ‘If I buy a gas-powered car, or diesel-powered car now, and I need to sell it three to 10 years from now, or however long you hold your car, it ain’t going to be worth anything.’
“When that seeps into the consciousness, people are going to say, ‘I don't want to buy that car anymore.’”
This will see a step change in the pace of adoption for fleet (i.e., commercial) vehicles. Indeed, this change is already underway.
“Buses are going hard,” says Jackson, adding that yard tractors and warehouse vehicles are also undergoing rapid electrification. He expects middle- to last-mile delivery vehicles to see the next wave of electrification in the fleet vehicle industry, while long-haul vehicles will take longer to convert to electric power.
For more ways to listen:
Listen to the full interview and explore our past episodes on Opto Sessions. You can also check out all our episodes via our YouTube Channel.