Welcome, Bill, it’s a thrill to have you on our podcast. I’ve been following developments at SEA Electric for about five years since seeing a Bucher garbage truck retrofit by SEA Electric at a fleet exhibition. It’s been an exciting journey for sure, and I can’t wait to hear more about it from you, and to share it with our listeners.
Thanks Caroline. It’s great to be with you today.
Firstly, let’s talk about you joining SEA Electric, which is a recent development. When, why and how did that come about?
I joined in May this year. In my role at Hino I’d worked on the SEA Electric project, and I’d made a good connection with the founder and CEO Tony Fairweather. Over the time, I became more and more interested in the project, and more and more interested in the whole zero-emission world. I’ve always been a great advocate for greener technology, so it seemed like an obvious segue for me for the next stage of my career.
Fantastic. One of the highlights of the Brisbane Truck Show this year, where we’re talking about SEA Electric working with Hino — was the unveiling of the SEA Electric trucks, some of them built on the Hino chassis imported and built here I think by SEA Electric. Can you tell us everything about the SEA Electric trucks built here by Hino?
The two trucks in our range, the 816 (Hino 300 series) — a smaller delivery truck used for infrastructure work, like tip trucks and council trucks, and, then a larger truck — a GH (Hino 500 series) — both of those are imported from Hino in Japan, as SKD, or semi knockdown kits. We assemble them in our factory in Melbourne. We assemble the truck on a jig and then we install the SEA Electric power system or the drive system into the trucks so that’s a fully built up unit from SEA Electric — assembled in Australia, in Melbourne for the Australian market.
Fantastic. I think the introduction of an electric truck, the ideal size for these parcel and grocery deliveries at this juncture, where we have a COVID driven surge in online shopping, is magic.
Yes, that’s the most recent truck. The truck is aimed primarily at last-mile delivery, or home delivery service similar to the current truck that Woolworths for instance use. They’re one of the end-user companies that are going to trial these vehicles. We have already done extensive testing in Australia on that truck. Already it is reaching the payload benchmark, and also the range benchmarks, that we’ve set. So it is very exciting to be able to offer an Australian built, assembled electric truck that can be driven on a car licence. There is a huge demand for that in the Australian marketplace, from a range of different customers.
Amazing. So, with this swelling of the fleets by Woolworths and Coles and others, is that just being in the right place at the right time for you?
It’s not just happenstance. It’s part of the strategy to offer a last-mile delivery truck. You don’t need to be Einstein to work out the last-mile delivery business is huge and growing and will continue to grow by all forecasts. So, what we know is companies are seeking a zero-emission solution for that type of work. So if you can offer one, then arguably, you’ve got, a marketplace that’s growing, and one into which we think we can slot very successfully.
I’m also noting recent discussions now about electric vehicles aren’t so fixated on range anxiety anymore.
I think range anxiety as they describe is fairly quickly becoming an old conversation. Just recently, ARENA, a federal government infrastructure funding body, released a range of grants for different companies to instal charging infrastructure in Australia. That subsidy was for over 400 (chargers). I know Ampol is one of the companies and they plan to introduce electric charging modules to all their forecourts over the next two to three years. So, that range anxiety that people may experience today, just won’t be part of the conversation. You’ll be able to charge your cars pretty much anywhere you like. Clearly it still takes longer to charge a car than it does to put fuel in it. In the truck world, what we see is they’re charging at their base; they go out, they do their run, and they come back. So with some of the companies we work with that’s exactly how they operate, they charge from their own renewables structure — either solar on the roof, or they have another way of generating renewable energy, and they charge their trucks overnight, on a low-cost tariff regime. So they’re not saying to us, when we talk to them, that range is an issue; it’s just not a conversation. But, it’s horses for courses. Of course, if a truck is going to be driven from Sydney to Newcastle and back every day, that’s a different challenge and one that probably isn’t going to be met today by an EV truck.
Just turning to something else now, I did mention in the intro that SEA Electric has been deemed an OEM, or original equipment manufacturer. Is that because you also do complete own design and build. Can you tell us more about the designation
You need to be assembling or manufacturing your own truck, which is exactly what we do. We bring the componentry in from around the world. We also have a percentage of the truck that’s made from locally produced items — cabling, and switch gear and items like that. In that sense we’re no different to Volvo who have a factory at Wacol (in Brisbane). And we’ve joined the Truck Industry Council. We will have our registrations listed with the Truck Industry Council, just like every other truck manufacturer.
I also wanted to talk about the shift of SEA Electric headquarters from Victoria to California. California has long been a leader in the shift to sustainable energy and a proponent of it. I’ve interviewed public works fleet managers from that state so I know there’s a lot going on there in that space. But tell us in, in your words, why did SEA Electric move its headquarters to California, and when?
Well, look, I think there’s a lot of energy in Australia for zero-emission solutions, no doubt about that. We’ve had some great support from buyers around Australia, also companies and governments. I guess the fact is, of course, that the market is a certain size in Australia. We want to recognise that and respect that but the North American market is just a much bigger scale. So, if you are going to grow a business in this space, you need to be looking to North America and also Europe. We’ve just established an office in Germany. We want to stretch out, spread our wings if you like. The North American market is very important. The Californian opportunity is big because they’ve got a lot of incentives for Californian companies to change to zero-emission trucks, so it made sense for us to be in that market initially, and eventually we’ll have offices right across North America.
Wow, I’m looking forward to keeping my eye on SEA Electric. So, just talking about this boon that’s going on for you, I hear that an IPO, or initial public offering, may be being considered. Is there anything you can tell us about that, like, could it be a dual listing on the Australian exchange as well as in the US. I guess the chief benefit is that it gives SEA Electric the ability to raise capital to expand. Is that the case? Is that what you and the board are envisaging — rapid growth and planning for that.
Obviously, it costs money to scale to this level. And building trucks and the infrastructure is not without its cost, so growing the business means we need to, at some point, decide whether we list on a stock exchange and which one is it. It is more likely to be the NASDAQ; that’s most likely to be in the first part of 2022, although that’s yet to be decided. But, yes, we would like to list and go with an IPO in the first half of next year, if that timing works out.
Well, let’s finish up now with you telling us what to watch out for next from SEA, and also maybe from the electric vehicle world, generally.
I think, really for us, we’ve just finished this last-mile delivery prototype refrigerated truck. That’s the next two months; that prototyping trial program will be over, and then we will be in the market with that truck. It’s a very exciting project for us as a company, but also for the marketplace in Australia, and a real Australian first. The truck will meet the range of mileage in kilometres on auto charge and that’s game changing for the market. The other one we’re doing is, we’re working with Hino on an on-demand bus — the small Poncho 21-seat bus that they currently sell in Australia. We are working with them on a prototype and a project to repower that vehicle with an electric drive system, and that will also be a very exciting project in the first half of 2022. More generally, we’re seeing governments across Australia, mostly state governments, very interested in the whole zero-emissions space, and that’s not just electric — it’s also hydrogen and hybrid. So that whole world is really heating up. Queensland’s got their so called superhighway. And, Victoria is very keen to involve the state government, not only in just the technology but also in the potential manufacturing side as well.So it’s a really exciting time to be in the electric vehicle industry.
It certainly is. It’s just fantastic. Thank you so much for your time today Bill Gillespie, it was informative to hear what’s going on, and just great to be part of this exciting journey for SEA Electric, and for electric vehicles generally.
Thanks Caroline’s it’s been great to be with you. Thank you.