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This episode of BRITElights, featuring guest host Mike Stacey of KPMG and guest host Randy Cole, BRITE Expert-in-Residence, covered the high and low points of season one, future topics, and ideas for season two. Highlights included insights on electrification from industry leaders like Electrada, Edge Energy, and Foxconn, as well as challenges in government policies affecting innovation. Randy shared learnings on fleet electrification success stories and the importance of partnerships in bringing products to market efficiently. Mike emphasized innovation, partnerships, and data as key themes from EPRI’s episode and significant progress made by government initiatives supporting clean tech adoption, despite potential policy challenges impacting businesses.
The discussion addressed both challenges and unexpected opportunities for innovation in the industry, including IRS Section 174 threatening research and development activity and Tesla laying off engineers in its charging division and how this could signal evolving business strategies focusing on revenue generation.
The team at BRITElights would like to thank listeners and guests for the show’s success in season one. We wrapped up season one with appreciation and excitement for exploring more expert insights in season two.
Op-Ed with BRITE Member Petra Power: R&D tax change is impeding American innovation | Connect with Rick | Connect with Randy | Connect with Mike
Transcript:
00:00
Rick Stockburger
Well, welcome to our season one recap of BRITElights. I am so excited to have my co hosts that were here throughout this season, Randy Cole and Mike Stacey, join us to just kind of wrap up the year or the season. I guess it hasn’t even been a full year, but wrap up the season. Talk about some of our high points, some of our low points. Talk about some topics that I think are still prescient that maybe we didn’t get a chance to hit on during the season and, you know, maybe come up with some great ideas for what season two could look like. And so we’re excited to get all the amazing feedback from our listeners. Like, we’ve really been able to grow this over the last eight episodes.
00:39
Rick Stockburger
And so grateful to the BRITE community and the team here at BRITE that’s been able to put this out in the world, but also grateful to all of our guests that came on throughout the season. So first and foremost, Randy, Mike, welcome to the season finale.
00:56
Randy Cole
It’s great to be back.
00:58
Mike Stacey
Yeah. Glad we made it and looking forward to next season.
01:02
Randy Cole
I feel like it’s a call out of the bullpen. We get to be the closer.
01:08
Rick Stockburger
Well, and I thought it was important to bring both you on for this because just like, you know, I think I’ve had so much respect getting to know you all throughout my career and throughout what we’ve been doing at BRITE and how we’ve been building BRITE. And so both of you, Mike, you know, as our current board chair leading the future vision of the organization, and Randy, as an expert in residence, but also a mentor to me and the organization, you know, you all are really a big part of the brain trust moving this thing forward. So a, thank you for that, but B, let’s talk about the future. I’m excited.
01:43
Mike Stacey
Yeah, absolutely. It is an exciting future ahead.
01:48
Rick Stockburger
I would actually argue it’s a BRITE future. So before we get into the future, let’s talk a little bit about season one. So really, my first question today is, you know, what? What was your favorite part about season one? Maybe give me two or three highlights, things maybe that you learned from our guests as you were hosting this. So, Randy, since you were the first part of season one, let’s have you kick this off with our, you know, your feedback on our first four episodes that you helped me co host.
02:19
Randy Cole
Thank you. Thank you, Rick. Thanks for the opportunity to be a part of all of this. But I mean, for me, I spend so much time studying electrification and what’s happening with e mobility and where the future is but to hear directly from the people doing it, there’s a big difference between watching it and doing it. And, you know, from electrata, Irina told us how vast their ecosystem and how they’ve begun to understand the partnerships they need, the ecosystem they need, or fleet electrification. And fleet is really the best model that’s out there right now for EV. Some of us can make choices with EV, but the excitement around what they can do with fleets in understanding total cost of ownership and selling just green miles right where they can take over the whole program, that was fascinating to me.
03:17
Randy Cole
And they’ve put so much thought and effort into it, and they’re having so much success, was great. And then when I think about Foxconn, the idea of people bringing new products to market, the timeline, the expense, the millions and millions of dollars we hear going into facilities, or you could have a contract partner that you trust, like Foxconn, who can help you bring your product to market. I have happened to notice you’re wearing a monarch tractor hat, which is working in the Foxconn facility here in northeast Ohio. You know, it’s a great example of, you know, Monarch could have gone two paths. They could have done it all on their own, or they could have partnered with a company like Foxconn, and they did.
04:03
Rick Stockburger
And, Randy, I want to. I want to ping back to the company you were first talking about, because, you know, when I talked to Irena and Kevin from Electrada, it’s like, how do you bring together, you know, the best people at the best things to move your product forward faster? And I think the Monarch Foxconn relationship is a. Is a testament to we can build everything ourselves and figure it out, and we’re going to have to raise billions and billions of dollars to do it, or we can just find the right partner, to get our products to market.
04:31
Rick Stockburger
And I think whether you’re monarch and you’re building, tractor, electric tractors, and you’re having to mass manufacture on a really large scale, or if you’re a small startup that’s just getting started, like, removing the pathway to friction, I think for especially the first four episodes, was just like what I heard, like, real loud and clear.
04:52
Randy Cole
Well, so, not to mention that monarch is going to help bring us better wine.
04:57
Rick Stockburger
So that’s very important. Very important. And I do want to shout out to our board, our last board meeting, we got to take a tour of the Foxconn plant and see some of the monarch tractors. And sorry to jump around a little bit, but, Mike, you know, well, you got to see that kind of for the first time as well from your hat. Like, what did you think about that and what did that look like to you?
05:22
Mike Stacey
Yeah, I saw innovation live and it was amazing to see that, to see a company thinking of actually in moving into mass production, thinking about a first market and a product for that first market. But I think all the things that Randy mentioned, innovation partnerships. The third one I’d layer on to that is data. As I’ve mentioned, this energy transition and electrification, it’s hard, but the companies that are working at this are true innovators. They’re threading the needle on the path to market. And I think we saw that live in the factory there.
06:08
Rick Stockburger
And we’ve been talking about threading the needle with camels like the last two days from different meetings. Randy, going back to you.
06:20
Randy Cole
But it’s also the expansion. So if we’re going to, you know, we’re going to talk about that, you know, edge energy and what they’re doing, they’re letting people rethink where EV charging can happen, both in urban areas where you already have potentially limited supply and in rural areas where you may not have three phase power. And to think we have a company here in Ohio that is helping other people install chargers, rethink their business models and do it more efficiently is great because there’s going to be a lot of money spent. Right.
06:54
Randy Cole
And if you can reduce that total cost of ownership and, or expand where the power can be, which is how you started, Rick, like, it’s a lot of power and if you don’t need as much because you can take single phase and turn it into three phase, just think of what kind of impact that makes during this transition.
07:13
Rick Stockburger
Yeah, no, absolutely. And I mean, I think too, I was just in Washington, DC the last couple of weeks and you know what I hear when I, and I love what’s going on the coast and I think it’s really important. But when we talk about the companies in Ohio, like, they are solving very real, straightforward problems that I think are just being overlooked because people want to solve like the biggest, scariest issues of the world. And I think that’s super important. But at the end of the day, the companies that we support in Ohio are like, man, we’re going to have to expand the grid because more power and we’re going to have to figure out how to do more electric vehicle charging because the market adoption and we don’t have access to the power. Let’s solve that problem.
08:00
Rick Stockburger
And, you know, it’s taking a slice of a big issue, but it’s taking a slice and it’s owning it and going back to earlier, it’s removing friction to adoption. And like that’s kind of what I just see the Ohio ecosystem, you know, doing in a really meaningful way. And I think that’s something that I kind of learned. I knew, but I was learning in season one and then just kind of being in DC and being with our partners across the country.
08:30
Rick Stockburger
And when I think about the differences of our company is like we’re, you know, Ohio has always built products for the rest of the world in meaningful, strong, great ways and physical products and real products that you can see, touch, feel and this energy transition, this, you know, we don’t even, I don’t, I hope it’s a transition, but at the end of the day, like, we just need more power. We said earlier, like, we just need more access to electric.
09:01
Randy Cole
Are you channeling overall, Tim Allen? You need more power? I need more power. I don’t know if you’re channeling the sixties or the seventies or the nineties, but.
09:18
Rick Stockburger
Well, since I was born in the eighties, Randy, you can probably guess that I am not as great at channeling the sixties or seventies, but, man, Tim Allen and home improvement was need more power and ow. Ow. Man, he’s just like the everyman.
09:36
Randy Cole
Well, except going back to edge energy. I keep telling them their tagline should be the tagline that Star Trek was famous for was going where no man has gone before. And I like the fact that they’re putting ev charging where it’s never gone before.
09:54
Rick Stockburger
So I love it all the way.
09:56
Randy Cole
Back, but it’s just because I’m so old, Rick.
09:58
Rick Stockburger
I mean, you know, you’re, well, I think the best thing I’ve ever just heard you described as is the most handsome man in government. So, you know, we’ll see from that. But I want to bring back to Mike. So, you know, Mike, from your last four episodes, what were some of the key takeaways that you heard? You know, being able to co host and I mean, gosh, all of our guests, like how I am just amazed the people that want to spend time with BRITE, like we are so fortunate and blessed by just unbelievably talented people both on our team, but like in the ecosystem and innovate in the network, like, you know, being able to get that knowledge here and out to, you know, the people that are building the most important products of the future is just amazing.
10:52
Rick Stockburger
So, Mike, tell me about your four episodes.
10:55
Mike Stacey
Yeah, so I think they were amazing guests, and I think the mentioned, you know, with EPRi, innovation, partnerships and data. Right. That that’s kind of theme there. And the things that they’re doing are within that bucket. But I think they’re bringing together industry. They’re bridging the behind the meter challenges with the in front of the meter challenges. And those are real challenges. But. But it takes true innovation, partnerships, and data to do that.
11:25
Rick Stockburger
Right.
11:25
Mike Stacey
So I can’t speak enough. I need a t shirt that says.
11:27
Rick Stockburger
Those three things, innovations, partnerships, and data. All right, that’s. We’ll make sure the marketing team. Emily, Vicki, we need a new BRITE t shirt. Got it. On it.
11:42
Mike Stacey
The other. So I think that’s kind of one thing. I think the other thing in this came in the discussion with Jenna and with Hannah, is not only the ambition, but the progress made by government is significant. And government moves the needle. Just thinking about the scale of power usage, of building footprint that our government has and what they’re able to do, I mean, that blew me away. And I reflect back in both of those conversations on my time as an entrepreneur trying to get a technology into the market and working with government, it was overwhelming. Right. And how do you get something? How do you get traction? And then how do you get that to scale? But the combination of goals, policies, and traction that are happening there on that side was amazing.
12:40
Mike Stacey
And I think no matter what our future holds in the next few months, I think that the momentum made on the government side, you can’t stop that. I think that’s significant. And all entrepreneurs are looking at that, say, wow, this is a real market for me between the building profile, between vehicle fleets, and I think it’s something that the private sector is looking at, too.
13:09
Rick Stockburger
Yeah, well, I think too, like, as we think about the future, you know, we’re talking about our past episodes and all of that. You know, from a business standpoint, I think certainty in the market is unbelievably important. And so, you know, because of these investments in the IRA and bio and, like, we can hem and haw about whether they should have been made, shouldn’t have been made. If, you know, at the end of the day and what that looks like, I’m. I’m on the. I’m on the side of this is the most important investment our government’s ever made in the history of time and is going to move forward. Businesses that are going to impact us and create amazing jobs and americanize these supply chains and do great work. But even if you’re on the other side of that business, certainty is unbelievably important.
13:59
Rick Stockburger
And real american businesses and innovators have made real investments, large investments based on utilizing a small portion of federal funding that helps get them moving that product forward or that investment forward. And, you know, I just don’t like the idea of changing rules, you know, going forward. And I think from a business aspect, that’s something that I really, I want to reiterate from the business community. Hands down, as we made these rules, we might have thought about these rules, but these are the rules. Let’s go forward. You guys have any input on that?
14:36
Mike Stacey
Yeah, I’d say that first step of getting traction is the hardest. And effectively that’s what this funding did. I mean, you think about deep into the Nevi program, for example, would have there been highway charging companies putting highway chargers and rural highways without Nevi? I’d argue no. No way. There’s not a provable market yet there. So to put the, have that money deployed there significant, I mean, these are significant gaps in our network. So that’s one example. But to me it’s removal of barriers and there’s several, but I think removal of the first ones is most important to get momentum.
15:25
Randy Cole
Yeah, well, Mike, just remind, just remember we’re from Ohio and the Ohio turnpike did start installing ev charging before Nevi funding was available. So just saying.
15:37
Rick Stockburger
Good job, Mister Cole. Good job, Mister Cole.
15:42
Randy Cole
But you know, when you talk about changing the rules, Rick, I’m sure one of the things you talked about while you were in Washington was the change to IR’s section 174, which, you know, doesn’t mean anything to a lot of people, but to some people, like some of our startups, it means everything right now because it’s changing their business model. Can you explain what’s going on there a little bit?
16:10
Rick Stockburger
Yeah. So, you know, as part of the tax cuts that came out of the Trump administration, they put this in place that was going to start in 2023 tax year. You know, I think there’s a lot of him and ha, I’m using him and haw is like my word today. I don’t, I don’t know.
16:30
Randy Cole
Who moved your cheese.
16:32
Rick Stockburger
I’ve never, for anybody who’s read the.
16:34
Randy Cole
Book about adopting change, but hem and Hob are the two main characters. They were mice.
16:41
Mike Stacey
But wow.
16:43
Rick Stockburger
See, fun fact Friday, for those of you that don’t know we’re recording this on a Friday, but it is fun fact Friday. Thanks so much for Randy Cole for providing our fun fact of the day. So with that said, we think it might have been to try to increase some revenue amongst all those tax credits. But basically what happened was they said all R and D expensing, you have to amortize over five years. So what that does, previously, you could take a tax credit for all R and D expensing, basically meaning you don’t have to pay taxes on that portion of your income. The huge, issue with that is there are a lot, especially on the innovation side, the venture side.
17:27
Rick Stockburger
So, and this isn’t just clean tech like, this is software companies, this is every company that you can think of that’s doing that. A major portion of their business is R and D, which is almost every startup, right? Almost every startup is moving TRL. They are trying to get a product to market. They are trying to build their product. If you’re building a product, guess what? It’s R and D. So, of those companies. So take a company that maybe makes a million dollars a year from the federal government to advance TRL of their company, of their product, and that contract with the DoD or otherwise, it’s an important contract for the United States military, because the military needs this product. And so they’ve invested in them and invested in them to move that, get that product to market so the military can buy it.
18:18
Rick Stockburger
Well, a company like that basically now will have to take that million dollars of revenue that was supposed to have be written off completely by, or previously written off completely on the tax docket as an R and D expense. Now can only R and D expense 200,000 of that. So they have to pay taxes on the other $800,000. Well, the issue becomes on, especially on federal contracts, you can’t make profit to pay your taxes with. So it will essentially just put these companies out of like straight out of business if they’re trying to commercialize technology for the government, if they’re trying to bring a new product to market. And that’s the main portion of their venture funding that we used to be able to write off as an R and D expense.
19:03
Rick Stockburger
So in a time where the only thing that America needs to be focused on is innovation and trying to beat the rest of the world and getting these technologies to market our federal government once again, maybe it was a typo, I don’t know, is figuring out a way to squash innovation. And this is something that I think for the next till the end of this year is probably the biggest thing that we should care about as a startup ecosystem to figure out how to fix. Would love. That’s a quick background on what it is, what it can negatively do. And I don’t even know what the positive would be, you know, on my taxes. I can choose to amortize over five years on those credits as an individual. So I don’t know.
19:53
Randy Cole
I would hope that this becomes a bipartisan issue. Right. In a time of a lot of divisiveness that both chambers of Congress, the House and the Senate, and then across all three branches, the administration would recognize whether it was a typo or an unintended consequence of someone’s actions or broader policy would recognize what this means. Because I agree with you 100%, Rick, it is a time for innovation. It is a time to help small businesses grow. And if one hand you’re going to spend the federal money to help someone innovate, you can’t then use the tax policy on the other side to put them out of business because then you’re not going to get the results of the funding you’re putting out there to help the innovation happen. That’s one of those crazy things that I hope is an oversight.
20:47
Randy Cole
And if not an oversight, at least reasonable people will come together and recognize the impact of it and find the solution quickly before it harms companies.
20:57
Rick Stockburger
Well, I mean, it’s already harming companies. So this was 2023. So we’re going to see that post April 15, those that filed their taxes. You know what the Congress was saying was were going to figure it out before April 15. We’re going to make it retroactive. It was going to be good. Guess what? Partisan bickering got in the way. The House passed a bill. They had a companion of a child tax credit with it. The Senate said, no, we don’t want the child tax credit. So they didn’t pass it. And, you know, and I think that’s one of the things is like, actually, I’ve met with probably about 15 to 20 offices at this point about this. And every single one’s like, yeah, no, that’s totally bad. We shouldn’t do that. And they’re like, okay, are you going to fix it?
21:41
Rick Stockburger
And they’re like, well, you know, lame duck is a great time to talk about these types of things. Right now we’ve got to pass a budget and x, y and z. And like, my response is like, I just wonder, like, oh, everybody agrees on something. So now everybody’s trying to figure out what can we attach it to get my thing through with it, because everybody thinks that this is a good idea. So if I can attach something else that maybe not everybody thinks is a good idea, but isn’t a good enough idea, like, and that’s how government works.
22:12
Randy Cole
Make it an ornament. But, you know, those are people who aren’t living on monthly cash flow or paying employees.
22:18
Mike Stacey
So, yeah, I mean, I don’t want to get into the politics of politics, but just from a pure business standpoint, you know, every day, you know, work with companies that are looking at this energy transition and looking at the barriers ahead and see some of those early ones being removed by some of the funding. But they also are worried about not just speed bumps in this transition, but barriers. And this is an example of a potential big barrier because you can get that momentum going. But if you could run into a wall here with something like this.
22:55
Rick Stockburger
Well, I want to talk to all the investors that are listening to this because I am very excited for companies across the United States to come to your venture capital fund and say, I have to raise a $250 to $500,000 round to pay taxes. I’m trying to write. I’m trying to say that with a straight face. I don’t know if you’re watching the video. I really tried my best to say that with a straight face. And I’m just wondering what VC, what investor out there is going to be like. Yes, absolutely. I think that’s a great use of my funds. Now, on the same time, if you’ve already invested in the company, you’re going to be like, I guess I got a follow on because I’m going to lose my entire investment because this company is going to go out of business.
23:40
Mike Stacey
Yeah.
23:41
Rick Stockburger
And I have to now reinvest for them to pay taxes.
23:47
Mike Stacey
Well, effectively, what will happen? Those funds, those funds won’t survive. They won’t be able to raise limited partner. What limited partner will want to say, sure, I’ll give you a check for this fund. Right. I think just, yeah, it sounds like a little more exposure on the topic and is needed here, but, yeah, but, yeah, these barriers can be significant.
24:09
Randy Cole
Maybe that’s something you can address in the next season of BRITElights.
24:16
Rick Stockburger
And Randy, you’re like the king of transitions today. Thank you. I thought I was the main host, but apparently we’re going to hand that off to Randy as the king of the transition. So appreciate that.
24:31
Randy Cole
It’s not a transition it’s segue. It’s just you guys bring something up, you start to say something, and I recognize that, well, you know, there are other things that Rick wants to cover.
24:40
Rick Stockburger
You’re an ultimate dot connector. That’s. That’s why you’re a part of BRITE. So connecting the dots. Well, that’s a great time to talk about season two. So, y’all, what are, you know, what are your thoughts? What are you, what are you looking at? Like, as we kind of go forth and we’re starting to go into planning phases of season two, like what do you guys want to see? What do you think from a host standpoint, co host standpoint? You know, what worked this year? What type of guests do you want to see? Who’s the, who’s the biggest, coolest person that we could potentially have on? You know, other than I. My vote is for Cyndra Cole. So I think she would be the most impressive person because she has been able to deal with Randy for so long.
25:31
Randy Cole
Well, she was on 60 minutes twice, so remember, she’s had an audience of 13 million before.
25:39
Rick Stockburger
And with the right sponsors, BRITE can also get an audience of 13 million. There you go.
25:47
Randy Cole
Plug into 60 minutes. You know, a couple things come to my mind. One of them is politicians. If we could get the right members of Congress or even state legislators who are active in this, but from both sides. You know, we’ve talked a little bit about divisiveness, but we’ve also talked about, well, each of these issues seem to have two sides. Should we have made the investments we did, the tax code?
26:14
Randy Cole
I’d love to hear maybe on the same show, two politicians who can do it civilly but express their viewpoints from the left and the right on what this energy transition looks like in what clean tech looks like, and even the taxes that support it or investments that support it, I think that would help kind of create guardrails that the audience and some of our member companies would help them understand and make decisions. The other would be just two more quick ideas. One would be venture capital, somebody who can, from their side, explain to our audience or our member companies what it is they’re really looking for in a clean tech investment. I think that would be great. Right?
27:04
Randy Cole
It’s one thing to get back from your pitch or when you are out trying to seek money yourself, but if one of those venture capital funds or leaders in that space could say, look, this is what we’re looking at, or this is what we think is important, that could be very insightful and then the third one, Rick, would be, could we find a unicorn? And Bill Gates comes to mind because I know you spent some time in a Pittsburgh parking garage with him. So it is true. So, you know.
27:36
Rick Stockburger
I mean, you know, I will scour the Pittsburgh parking garages as much as I can to see if I can run into them again and ask him to come by. By the way, that event wouldn’t have happened without Anna Seifkin. So, you know, shout out to Anna for allowing, giving me the opportunity to physically run into Bill Gates.
27:55
Mike Stacey
Yeah, well, speaking of unicorns, Elon Musk comes to mind. If we can get him on. On the podcast, that’d be great.
28:03
Rick Stockburger
I’m here for it.
28:05
Mike Stacey
I think, in my mind, leaders in electrification. So I know we’ve had some great, incredible startups, we had some great collaborators, we’ve had government, and I think more politicians, a great idea. But those on the front lines of leading electrification, I think, would be amazing. And I think beyond Elon, I think those at utilities, those in the automotive segment, and even those on the front lines of EV charging installers, they’re seeing a lot of interesting things. And we all saw the news this week with Tesla.
28:46
Rick Stockburger
Do we want to talk about that?
28:48
Mike Stacey
We may. That’s creating a lot of interesting ripples. Right. And there’s more, I think, very interesting things to come there. But, yeah, I work with some of the frontline epcs, and some of the insights that I get from those conversations are incredible. You know, they’re on the front lines of this, so that could be a guess.
29:10
Randy Cole
I love the idea of a utility executive or someone on an innovation side from utility, again, for member companies, for the broader audience, because everyone asking, I feel like we’re going back to the beginning, but, you know, we need more power, but we also need power in different places. Where, where is, you know, how does distributed, how do derms fit into this? How do ders fit into this? How does the existing grid fit into changing where the power is being used again, to help inform the decision making for companies or for the audience who’s interested in this so that they understand that and they can help promote it and educate others on it. I’d love to hear front end from a utility executive that’s in this space.
29:57
Mike Stacey
I might have the guy actually just talking out live one of the, you know.
30:06
Rick Stockburger
Yeah, that’s like, all of that’s like just this whole show is, I know a person, I know a guy. I know a galaxy. Right? Yeah, no, that’s. That’s awesome. Yeah, and I think that’s cool. I, I’m wondering, you know, your opinion, but also the audience opinion. Like, like, Mike, you just brought up the Tesla layoff of the engineers and their charging group. And like, I, I would love to actually hear both of your perspectives on what you think about that, like both your experts in the industry. But like, and honestly, just right now, like, give me 30 seconds. What’s your opinion?
30:47
Mike Stacey
Expect the unexpected in this market. I think there’s certainly increased maybe velocity of change or turbulence, if we want to call it. That said, I think the mainstream headline is the sky is falling. I actually see a ton of opportunity for others in the market right now. I think these are good assets if you think about these sites. There’s also a lot of talent out there. So my entrepreneurial mind says, hey, there’s opportunity in this and I think we’re going to see more of that in the next couple of weeks.
31:30
Rick Stockburger
Randy, quick hits.
31:32
Randy Cole
Yeah, just a quick hit. You know, there were also big announcements at freewire of changes in what’s happening, but that doesn’t mean the sky’s falling. It may mean the investments made by a company, their size, their market cap isn’t right for where the market is right now. That’s fine, but I echo what Mike said. That means there’s more talent out there that other companies who may have a different model, a different approach to solving some of these challenges can have. Those people who are now trained in electrification in charging have the talent and now the time to apply it differently. So I don’t think if everyone really thinks through this, we are in a period of great change that is never just a straight line change or straight line growth. There will be ebbs and flows. It’s a tide. It’s a tide that’s rising.
32:28
Randy Cole
But they’re going to be ebbs and flows. And as that happens, people are going to move jobs, some companies are going to become more successful, and others are going to fade a little bit in the marketplace. That’s very natural.
32:41
Rick Stockburger
So I’m going to ask, do you guys mind if I share my opinion? And then whatever you say, I’m just going to share my opinion. I feel like sometimes as a host, you’re not really supposed to facilitate and talk, but I actually have a really, I would a strong opinion about this. A, some of the reasons why I think it happened, but b, why it’s really, really good thing. So a, I think the reason it happened is Elon wasn’t focused on Twitter anymore. He came back, focused on Tesla for a little bit and said where if you look at Tesla as an organization and where they’re making money, where they’re not making money, charging has always been a loss leader. Right? Like, that’s not.
33:26
Rick Stockburger
They’re not making Money on charging, but what charging does is facilitates and reduces friction for the experience of driving an electric vehicle. And so it is important aspect to their business, but it is not an area that they’re making Money per se. It’s an area where they’re reducing Friction to adoption. And so my opinion, a, is that means that part of the organization was probably too thick and they needed to trim some major fat from it. And especially as Elon was coming back and looking at the market and looking at where their stock was and how are they going to continue to hit THeir Stock increase numbers, telling their investors, hey, we’re still willing to cut.
34:12
Rick Stockburger
Like, we’re kicking butt, but we are still willing to make cuts to make sure that we’re a lean organization and that we are getting everything that we can out of this organization and that we’re going to get you as. As high of returns as we possibly can. And so, like, that’s step one. That’s why I I think it happened. And it’s just as simple as that Elon was looking for a place to make cuts. That part of the organization is a place they hadn’t make made cuts historically since the beginning. It’s a place that’s only grown from that standpoint. And so, like, a, I just think it was a business decision to say to your investors in your market, we got to cut somewhere. I want to prove that I’m back, and this is what it looks like.
34:54
Rick Stockburger
B, why I think it’s important is, like, business models change. And I think we have gotten to a point in the charging infrastructure space that instead of Tesla having to employ engineers to deploy their charging systems, that there is enough talent out there in the market that they can hire consultants, contractors, and others to actually do the deployment phase of it. And they don’t need to employ ten engineers from Tesla to deploy one charger. They can employ one engineer from Tesla to tell engineers from this engineering firm how to deploy this charger. And so I think they are a changing their model on how they’re going to be deploying. Now, I know in the interim, it looks like, hey, we’re going to have to stop these deployments real quick from that standpoint. But what’s happening with everybody else adopting their charging network.
35:50
Rick Stockburger
And what that’s going to look like is how do you scale fast? And how you scale fast is getting the right people in that can train the people that don’t work for you, how to install and deploy your chargers. And that’s.
36:04
Randy Cole
I think those are some great points, but I take it one step further. Thinking about their customer base and what you said, charging is a loss leader, but it helped them provide diminished range anxiety and help adoption of their vehicles by getting to a standard across manufacturers and Tesla owners being able to use other chargers now. Right. And other people being able to use their chargers. When we get to that standard, I think it’s a recognition in part. I’m not channeling my inner Elon Musk, but just looking at it from a market perspective. Hey, if other people are investing in equipment that we used to pay for that now our customers can use, we don’t need to keep expanding the way we are. I mean, 50% of the public chargers in the US are Tesla. Right.
36:56
Randy Cole
But that should start to diminish with other charging companies with the Nevi funding. And so I hope that part of that’s a recognition that, oh, look, charging is just happening. And once it’s ubiquitous there, I dropped the ten cent word.
37:11
Rick Stockburger
Yeah, well, and focus on the part of your business that generates revenue. Let the friction aspect take care of itself.
37:20
Mike Stacey
Yeah, yeah. Just add, I agree with all those points. The value chain is evolving. If you think about the charging value chain and kind of what people do, there’s more competitive parts of this. The installation part, I think is becoming more competitive. The war on real estate is becoming more competitive. I think kind of going back to the core is probably where he’s heading, but. So I think there’s a lot of good in it. I think the big wild card is demand for vehicles and getting to this next wave of adoption. And I think critically thinking about utilization of the assets, not just getting more assets in the ground, but how do we get the asset more utilized?
38:08
Mike Stacey
So, again, to me it’s interesting, and I think there’s going to be some very interesting things that we’ll see in the next few weeks and months around this. But as an entrepreneur, there’s more, there’s something to solve here. Right. So going to kind of BRITE’s ecosystem, I think they’re, you know, the entrepreneurial mindset. There’s a lot to dig into here. Where there’s friction, there’s opportunity.
38:36
Rick Stockburger
Yeah. Awesome. Well, I think on that note, you know, I want to wrap up season one. And honestly, like that conversation that we just had, I want to see more of that in season two. That’s what gets me on fire and excited about this, is being able to see something that’s happening in the market and talk to people that are way smarter than me about what’s going on and get expert perspectives. And so a thank you guys, both for having an expert perspective and spending a career understanding this and not only making our organization better, but making everybody that’s associated with our ecosystem and our listeners just a little bit smarter. So I’m going to start with a heartfelt, grateful gratitude. I appreciate both y’all for being co hosts on season one. So thank you guys so much.
39:26
Mike Stacey
Yeah, thank you, Rick. That’s been an amazing ride. I think just the breadth and depth of guests and the topics we covered, hard to imagine another venue for that.
39:38
Randy Cole
Yeah, it’s fantastic. And I hope as we look towards season two, it does snowball, it does grow, and we continue that idea of covering the gamut of topics and ideas and making ourselves smarter and the audience smarter and getting them insights that they can’t get other places. And I think that’s what a podcast like this can do.
40:01
Rick Stockburger
Awesome. Well, thank you both so much. And to our listeners, please check out the links in the liner notes. Please follow us. Please share this podcast. As my kids say, make sure you like and subscribe. And this is the end of season one, so we’ll catch you in season two and we’ll see you on the BRITE side. Bye.
