Mike Nakrani – VEV

David Hunt (00:02.213)
Hello Mike, it’s great to have you with us on the podcast.

Mike Nakrani (00:05.324)
Hi, morning David, lovely to be on it, thank you.

David Hunt (00:09.371)
Cool. there as is ever the case, lots and lots to get through. Um, but before we do that talking specifically around, uh, around VEV, I think it’s really interesting to get a bit of the, the, the story of what brings you to where you are. And you’ve got such a long automotive track record, it that 18, 19 years with Ford, big chunk of time, and a five years with BP and now obviously leading this spin out from, from Vito that is VEV. So perhaps you can just give us a little bit of the journey. When did electrification first?

come into your life. Electrication transport come into your life.

Mike Nakrani (00:42.03)
Yeah, I mean, it’s been quite a long time, I guess. I’m quite an old man now, David, to be fair, right? So when you think about it. Well, to be honest, it started when I was at Ford way back when, you may not recollect it, David, but originally during the Jack Nasser time, he was one of the global CEOs from Ford. He had a very broad, expansive plan. And Ford bought a company called Think in Norway, which had very small electric vehicles. Again, using…

David Hunt (00:46.32)
Ha ha ha.

David Hunt (01:05.508)
Okay.

Mike Nakrani (01:11.854)
traditional technology if you want to call it right so it wasn’t lithium-ion technology it was a sort of nickel based technology back then and it was a was a Norwegian outfit and they did and I got involved with them then actually and we used to have them running around various plants and stuff but I could go further back than that to be fair because my first ever electric vehicle that I ever drove David was a milk float my first ever job when I was nine years old was I was a Saturday milk boy

David Hunt (01:33.347)
Ha ha ha.

Mike Nakrani (01:38.926)
So I don’t know, many of our listeners probably don’t remember those days of the milk flow, but believe it or not, I had a fantastic milkman called Graham and I was his milk boy for nearly from nine till 16. And he used to let me drive the truck, which I don’t think he was really allowed to do so, but I used to be, was allowed to drive the low power steering, fully open air, all nickel ion batteries or whatever they call, whatever they were then. And that was my first foray. It’s funny.

David Hunt (01:39.141)
Very good.

David Hunt (02:04.72)
Yeah.

Brilliant. Brilliant. Do know what? is a, I don’t know the name them, but there was a, I remember seeing something around, know, someone’s pitching an idea that what about an electrified way of getting sustainably locally produced produce to a house kind of thing. I marvelous. And it was like essentially they reinvented the milkman, but I haven’t seen one locally, but it’d be interesting if they do catch off.

Mike Nakrani (02:24.494)
Well, I I think the battery technology with lithium-ion. Lithium-ion is a massive revolution, isn’t it? And I think that revolution is you look at the DPD and the FedEx guys now delivering on those very cool little sort of tricycle kind of with a sealed in, think that’s all. So that’s coming, think, isn’t it? I think we’re gonna see a lot more of that. So it’s really quite exciting. And then from Ford, I got involved a little bit with some of the technology that we were doing as we were working on various partnerships at the time.

David Hunt (02:40.795)
Coggerparks, yeah,

Mike Nakrani (02:50.774)
And unfortunately at that point, I was working in the planning department way back when and we didn’t pursue it. We had an opportunity to go forward with one of the leading manufacturers at the time. And we decided that we wouldn’t go, we didn’t go forward with it. And that was, to be honest, that was one of the very disappointing things. But then I really got into it when I left Ford and joined BP. And BP, when I joined myself and two others, we joined together with a little unit and then we set it up.

And that’s when we really got into the detail, the strategy, what to do, how to do it, et cetera. Got to work with some brilliant people within BP and they’re really quite forward thinking, right? So, you had an organization at BP saying, this is coming, what are we gonna do about it? And it hired me together with a couple of other people to think it through and then to deploy the strategy. And that’s when I really got into the energy side of the business in terms of rather than vehicle design. And then at BP we were doing a massive breadth of things, right? You had to do the forecourt, you had to do…

fleet you had to do. I had hydrogen in my title David for a while as well so there was a real broad remit but when I left to start up this business from when Vittor tapped me on the shoulders had come and set up something in the electrification space I think that was what year it must have been sometime in… it feels like it’s 25 now right so it’s approaching 22. Back into 21 early 22 and when I joined them we focused on the fleet space.

because I see that’s the place where there’s the most likely change, the most difficult problem statements to fix, but also the ones who are going to go first and make a meaningful impact in my

David Hunt (04:23.643)
Yeah, I think that’s the thing about the meaningful impact. Don’t get me wrong, I’ve driven an EV personally for six, seven years now, and it’s important that we all do if we have the opportunity to do so. But like I say, fleets is where we can really perhaps move the dial forward. And it’s really changed that time, isn’t it? In my intro, I referenced Steve, who you may have spoken to, is one of our team who’s been seven years with us and nearly 10 years in e-mobility. But going back even that seven, eight years ago.

It was all about domestic home charging and EV charging infrastructure, that kind of thing. So it really has evolved massively. And it’s super exciting now this, which I’m keen to talk to you about this sort of intersection of actually energy, batteries, grid, V2G, potentially flexibility and vehicles. And this kind of, some ways, perfect storm that’s an opportunity, but clearly is a challenge also.

Mike Nakrani (04:51.222)
Yes.

Mike Nakrani (05:08.686)
It is, it is. I mean, I think one of the often overused words is transformation, I think. But the reality is we’re seeing a cross section, aren’t we? We’re seeing a cross section of automotive, of energy, and then digitization. And the three are sort of coming together. the various new, another overused word, ecosystems are not yet established, right? So, you know, I think, and, and

to some extent that’s really exciting because we’re going to have to invent some stuff, So it’s not the same as having to be, you here’s a prescriptive solution and go follow that solution. It’s you actually going to have to design some new things and develop some fantastic new ideas and business models. But it’s that intersection of the three. If you had a Venn diagram in front of us, I think it’s that intersection in that middle place where I think the winners are going to be found.

And it is a transformation because you can’t run a fleet the same way if you have an EV fleet. Now it’s definitely better, right? It’s probably better for the driver, better for the environment, better for, let’s call it deliveries in cities and so better for people around and financially better if you do it well. But you cannot do it the same way as how you did your traditional logistics fleet or your bus fleet when you had an ICE or a hybrid vehicle.

And I think that’s.

David Hunt (06:30.283)
That’s one of the challenges, isn’t it? And that’s the same, think, from whether it’s driving an EV personally, you get on a heat pump at home or whatever. It’s a better technology, but it isn’t just do the same as before. And logistics, from my experience, is quite a old fashioned, it’s been around a long time, right? And it works, up until it didn’t, it worked really well. So it’s really hard to change those.

Mike Nakrani (06:53.741)
Yeah, I think it’s a really difficult one, really difficult one, David. And then they have, I don’t have the stats with me. I normally, normally we’re giving you top there, but clearly, know, lorries, buses, trucks, vans, they, they do the most miles, they carry the most payload. And if you think about, you know, I think trucks are like 2 % of the total vehicle fleet and they, they’re responsible for well over 20 % of the emissions and the pollutions that get out there. So we need to fix that problem if we’re going to truly make an impact. And you’re completely right because

The industry is over 100 years old and these guys are working tremendously hard, And it’s a business where the margins are extremely tight and what they do is they just work their socks off to stay afloat. And suddenly you’ve got this massive change coming. You’ve got the likes of their end consumers, Nike or Heineken or Pepsi or…

Whoever Tesco saying, I want you to migrate to an EV or migrate to a zero emission fleet, maybe not EV specifically. And it’s a really big shift for them. And this is what I meant by transformation, because suddenly they’re gonna have to transform their industry because they’re gonna have to use data a lot more. They’re gonna have to use digital platforms a lot more. The driver will have to think differently, right? The payload may well be different, et cetera.

And if you do, what tends to happen right now is that there’s that what I call pub conversation, right? Which is, it’s never going to work. You know, I, you know, I, I do trips from here to here, here, et cetera. And they mentioned the edge case is always right. This one time when Fred had to drive from London to Edinburgh and back, and he didn’t have time to stop for a pee because it was an emergency, it might be. And they use that as the example. And, and then they throw out numbers that are

let’s say based on best guesses or pub conversations again. And the reality is if you listen to me, be who? You’d be mad to touch it. You’d be like, no way. But when you get into the detail, if you step back a little bit and start to see the numbers, start to look at the route, start to look at how often, how frequent the brakes, the brakes in the cycle of what you’ve got to do if you’re a truck driver, and suddenly you’re seeing it starting to work. And what’s really interesting for us, David, is we’re seeing the leaders, you

Mike Nakrani (09:10.144)
Amazon and Tesco and many of these other leaders, Pepsi and Heineken, not, you know, they are obviously doing this for the CO2 benefit and to be able to move their brand forward, et cetera. But they are also doing it because it’s financially viable and they’re accelerating and that should be sending a signal to anybody who isn’t doing it going, there’s something a little bit odd because these guys aren’t the type who throw money away.

David Hunt (09:38.992)
Yeah.

Mike Nakrani (09:39.405)
And if it works for them and their fleets are very complex, why doesn’t it work for us? And we’re finding that that’s slowly resonating. You’re going to see a big shift. I still think it’s going to be 27, 28 by the time you see that material shift in the logistics fleet. But I think one of the things I’m worried a little bit about is that the people who don’t start now are not going to know what to do and they’re going to be left behind. And there is a real risk that they are running that the inaction from that pub conversation.

David Hunt (09:44.933)
exactly.

Mike Nakrani (10:09.047)
will result in some really difficult times for them in 27, 28, when the grid capacity won’t be there, they won’t know what vehicle to buy, the customers that are doing it have a cost advantage, so therefore they’re under pricing you. All these things by 28 will be really clear, and then when you look back, you go, it was obvious, wasn’t it?

David Hunt (10:26.843)
There’s really, yeah, in hindsight things are, isn’t it? But the other challenge they have obviously is they got assets, you know, in terms of vehicles at the very least, which they run on whatever cycles are, seven, 10 years with a vehicle or whatever. So it must be really challenging for them to, like you say, make sure they don’t make themselves in a worse situation through inaction.

Mike Nakrani (10:44.45)
No, absolutely. There is a, and I can totally understand the inertia in that regards, right? Because unless the customer, know, when you ask the customer, will you pay extra? They’re going to say no. Why would they say no? But what we found actually, if you talk to a customer say it’s this much extra for this portion, but if you get past that scale, that comes back down to here. And then if you go a bit further, it comes down to here. The analogy I quite often use with some of my colleagues and peers that I talk to in the industry is think of it like a formula one downforce. If you think about,

downforce when I remember reading an article I’ve never been faster I’d love to be able to be in a Formula One car but anyway never been fast enough to ever go in a car that has downforce but I remember reading the article when somebody was making a step up from one particular category to another type and they were saying the really difficult found they had was that you approach a corner and you have to go faster through the corner yeah if you go slower through the corner you’re gonna spin out but if you go faster through the corner you get downforce and what that downforce does is it gives you even more grip

and you just have to trust it a bit. And I see that a bit with the transition. You know, if you do one, which is your easy use case vehicle, and you then treat it, you don’t actually do it to a deep enough extent. What you do is you get the outcome that you thought you would get. And then you go, well, I tried it, it didn’t work. But Tesco’s haven’t done that. Amazon haven’t done that. Pepsi haven’t done that. Heineken haven’t done that. The bus company Stagecoach haven’t done that. First hasn’t done that. Arriva hasn’t done that. They are going…

David Hunt (11:58.747)
Yeah, if you played it.

Mike Nakrani (12:11.148)
Yeah, I’ve gone through that pain now and now I know what to do. I know how to do it efficiently. I know how to put it and my system starts to understand it. And then moving on to the next stage of problem, which the next stage of problem is I’ve got to manage the energy. And the next stage of problem is I’ve got to manage it digitally because I can’t do it manually. There’s too much information. So they’ve gone through that sort of initial phase and now they’re going, hang on to get to the next phase. I need different dashboards. I need a system that works overnight. I need cyber security. Never thought about cyber security for my fuel before.

David Hunt (12:18.703)
understand.

Mike Nakrani (12:39.758)
But actually, if you look at what’s happened with Marks and Spencer’s with Jaguiland ever recently, one of the things we push really heavily with our platform is that it’s enterprise grade, right? We are investing heavily because there are unfortunately difficult characters out there who are going to be attacking our systems. And we are doing our best to make sure we can limit those. because the fleet, it’s not the same as you and I, right? If my Kia EV9 doesn’t charge in the morning because something went wrong, I can get an Uber. I can take the bus.

I’m lucky I live in London, I can take the tube. I can ring my brother, he can lend me his car, whatever, there are methods. However, if you’re running 400 buses from a depot, the Ministry of Transport or the mayor is gonna call the CEO of that bus depot and that CEO of the bus depot is gonna call me and we wanna make sure that actually we’ve done our utmost to make sure it works. It’s meant that we’ve had to invest more, but I’m starting to see that resonate in the marketplace a bit as well, right? People are starting saying, okay, this is serious.

It’s not just a swap in, swap out. You have to do things and take it more seriously.

David Hunt (13:40.313)
Yeah. I think that’s where getting the realization that we’ve seen in, not just in our clients, but in the broader market is that, you know, it was like electric vehicles you could kind of get for reasons that you talked about. There were obviously everyone who talked about the use cases or the edge cases of when they had to drive 500 miles on non-stop. But then in the last two years, there seems to have been a recognition that actually the technology is at a stage where we can, and we got onto molecules in a bit, we can

Mike Nakrani (13:55.757)
Good

David Hunt (14:10.075)
sort of focus and see these things happening and there’s real momentum there. I just want to touch on a couple of things because there’s still some more about the economics I want to talk about, going back to that point, we’ve got a very old and traditional industry in many ways, retail, logistics, transportation. Then we’ve got technology, we’ve got batteries, we’ve got grid connections, we’ve got energy, we’ve got data and this whole AI thing. There’s so many things which are

can seem quite complex and I can see for many people, like the old adage of, nobody gets sacked for buying an IBM, it’s like nobody gets sacked for buying another truck this time around maybe, an ICE truck this time around. how are you seeing your customers respond to that fact that there are so many evolutions going on at once, which ultimately will be successful, but it’s quite a rocky ride in the meantime.

Mike Nakrani (15:00.427)
Yeah, I mean, we do. I think a lot of my job is influence and persuasion, David. So one of things we look at and we use data to, put the real information set. One of the things that my team and myself are, you we’re a bit religious on that, a fanatical on that, which is we refuse to accept the pub conversation.

And what we’re doing is we’re laying out that data and you have to lay it out more than once quite often. But as you lay out the information set, as you show customers what’s possible, as you push into the detail, and they’re smart people. So I’ll use the technology one. It used to be, well, solid state batteries are gonna come out, hydrogen is gonna be the way. And then you show actually last year, I can’t remember, I think 70 million electric vehicles were sold last year globally.

and 17,000 hydrogen vehicles. And you just say, come on, you know? And when you start showing that data, they’re like, oh, okay. Then they say, oh, electric trucks will never happen. And then you say, well, the last count of electric trucks in China is 40 ton electric trucks is 49,000 a year and a half ago. So it’ll be well over a hundred thousand by now. I haven’t checked recently, but you start to, well, hang on. a 40,000 truck, if a 40 ton truck or a 45 ton truck works in China, why wouldn’t it work here? So.

And then you get into the data of what actually is being driven, what actually is being used. And we’re starting to, and this is my point about digital from analog to digital, which is suddenly we’re giving them tools that say, okay, vehicle number A actually doesn’t do anywhere near 40,000 miles a year. It only does 20,000. And its longest journey was 200. And we’re starting to get into smarter purchase decisions. And what you’re going to see, I think longer term is,

The OEMs have now done their bit. They’ve invested in the technology. Now they’re still charging the premium for that R &D on a small number. My ex-automotive experience told me that the prices will continue to come down gradually. They won’t be overnight. They’ll come down as the volume starts to ramp up. And what you’re now seeing is sort of from a situation where the product feasibility conversation should be answered through data. And then as the OEMs bring their cost structure down, as you start to deploy digital, as you start to…

Mike Nakrani (17:16.419)
buy energy at the right price, the value equation from, let’s say, the commercial viability will start to map. And you’re gonna start seeing it go this way. And we see this now. We probably analyze more truck and bus data than anybody else in the UK, right? Pretty much. And what’s amazing is we’re really confident that the bus network is now what we call TCO positive, right?

David Hunt (17:38.139)
Hmm?

Mike Nakrani (17:38.83)
Again, all has to be done well. You have to buy the bus at the right price. You have to get the right grid capacity. If you overspend on grid, your standing charger will kill your business case. You have to buy the energy at the right price. Then you have to run the vehicle in the right way. The driver has to drive in the right way. And then you have to charge at the right time. And all of these elements, when you add them up, if you do them well, suddenly the numbers start to look good.

David Hunt (17:57.403)
Mm.

David Hunt (18:01.691)
Let’s talk about that a little bit. Sorry to interrupt, Mike. Because let’s see where there are others, of course, but where they’ve ever played in that place. Because like you said, it’s not as simple as the OEMs doing that, but you can buy your trucks from here. You can probably get your data or software from do some analysts from here. You’ve got to buy your energy from somewhere. You’ve got to then necessarily get a good connection from somewhere. There are all those moving parts. But organizations, assume, they have, are able to of, I guess, tie those things together. that’s

Mike Nakrani (18:26.255)
Yeah, that’s role, David. mean, here’s the thing. Typically, if you look at a bus or a truck or a van company, and you know, some guys were started ahead of us, they’ve had to create this themselves, but most people haven’t started ahead of us, right? So, you know, we have a team of sort of 80 people whose full-time job, yeah, every day, Monday to Friday, together with our 24-7 cover that we offer to our customers, right? So we’re a seven-day a week operation. This is what we do all day, every day, right?

And we bring scale, bring knowledge and we bring capability because that’s what we do. I wouldn’t claim to know how to run a logistics fleet. I wouldn’t claim to run a, that’s not our world. Our world is, when we talk to fleets, we think of five things, David, right? So one, they don’t know what to do. So we have a consultancy business, a data analytics business to do that. Two, then they need to build, you need to go.

Go get the planning done. Go get the right grid capacity. Go get it. Go get the DNO. Go get the marriage value. All of that stuff. Buy the right equipment. Make sure it’s reliable. All that stuff. So that’s the second bit. Three, say, operationally, you need a digital platform. And we’ve invested again. So that’s all internal. And we link into the fleet. We link into the telemanage. We link into the battery. But all of that information is set. You the system manages. And we have a series of strategic algorithms that help you manage your portfolio. That’s electric.

Then we supply the power and the energy. And again, really important, you buy the power at the wrong price, you charge at the wrong time, your e-commerce will never work. And then finally, we’re starting to make CapEx into Opex, right? So as we move into, and then, know, we think in the end, there’s no reason why the customers have to go on it on their own, because we’ve got a solution set that we can provide. And we’re pretty confident that because of our scale and because of our capability,

and our experience and the fact that we are allowed to do this full time as our core job, actually we can do it in a way that is just as efficient as somebody trying to piece all the stuff together themselves. Because they’re worried about margin, they’re saying, well, Mike, you must be taking a margin on this and a margin on that. And clearly we have to make a return, don’t get me wrong. But what we’re saying is I can buy charges at the price structure that you’ll never be able to buy. Because I’m buying 5,000 a year, right, for 20 different customers.

David Hunt (20:30.138)
Yeah.

Mike Nakrani (20:46.286)
I will also standardize, whereas actually you won’t know what to standardize. I have two test labs and what we do is we test charges to make sure they work properly. They will say, well, I need dashboards to be able to run. Well, I’ve built the dashboards already. You don’t need to pay somebody to rebuild the dashboards. energy. I buy energy. I know, but I’m, you know, backed by Vittor, the world’s largest energy company, guess what? Pretty good at energy too. So, you know, those things, when you put them together.

David Hunt (21:09.36)
Yeah.

Mike Nakrani (21:13.347)
We’re not trying to make oversized return, David. What we’re trying to do is accelerate the transition. Our value is to be a trusted partner for those fleets and it’s working pretty well, be honest. We’re quite excited about it.

David Hunt (21:24.047)
Yeah, I what I was particularly, I guess, intrigued about a little bit, and it does make sense when you think about it, but perhaps necessarily immediately so, that obviously coming from Vito, which is a global energy commodities, Molygold’s business to a large extent. So A, guess, and perhaps you can expand on that thing about capex, opex in terms of funding and financing these things, because again, that’s really quite complex to go through this process of electrification as we touched on.

But then obviously the obvious thing is the ability to understand and trade and hedge and get energy, uh, electors in this case, but get energy at a price clearly is a, is an added value that you would have over some others potentially. But, um, yeah, perhaps you can talk about that in terms of when, I guess it jumps back a little bit. It’s when you joined in retail, spanned this out as, as, as Verve in terms of their thinking, you know, as you say, as a global energy commodities business, um, and how you were able to help on that.

Ass up. Purchase, if you like, of going through this journey and making sure that you don’t suddenly fall off a cliff in terms of your capex.

Mike Nakrani (22:28.995)
Yeah, no, absolutely. mean, I think the so if it’s also again, a very forward thinking organization, it looks at diesel volume, it looks at gas volume, it looks at energy volume, it looks at various different matters. And it’s identified the fact that, you know, there is this transition coming and it’s taking some strategic bets. And that’s how they got hold of me. And, you know, to some extent, that’s what’s happened now. What they what they do have, but clearly, you know, they have a very strong capability in energy trading. And we’ve managed to hire one of the team.

ex-trader who works now in our organization who brings all that capability which we’re very lucky we have a mothership that helped us there. We’re pretty much able to do that now without too much right and we’ll get better over time yeah so but having that understanding and quality people helping advising has been absolutely invaluable right so but the CapEx to operate thing is pretty pretty simple we are trying to launch what we call David a TCO parity offer so we say to you if you’ve got a logistics fleet and you’ve got a truck we say

your let’s put your diesel numbers down. You know, your your ad blue, your excluding driver. Let’s hold that over here. But your ad blue, your vehicle price, your financing on your vehicle, your fuel card price, your O your journeys you do. And we map it for the whole year. And then what we then do is we create the equivalent EV simulation next to it. And then we demonstrate that we can meet the same cost structure. And then I say, I will take that risk. You give me your diesel budget.

and I will take your, and I will give it to you for the same price as that diesel budget. And how do we find the financing? Well, clearly the person has to have the right credit capability, David, because you know, whether we like it or not, our financial backers are not willing to lend if the credibility isn’t there from a credit perspective. But most people are, right? They’ve got operating businesses that been running for a long time. And then what we’re giving them is scale advantage. We’re saying, well, you we’re giving you, you may only use this much energy.

but we’re buying this much energy. So therefore you’re getting that advantage from working with this, right? So essentially you’ve got to view, you’re achieving economies of scale with actually, without having too much scale yourself. And then the capex, OPEX thing, really if they’ve got the right capability, there are loads of funders out there, David, right? So green investment is entirely possible for asset if you have a good business case and a solid credit capability. So I don’t think there’s a restriction.

Mike Nakrani (24:52.012)
We are certainly not going to finance it all ourselves. That’s not our goal. Our goal is to get the cost of capital to a certain level and allow customers to participate in that. And then there are massive sort of infra funds who are very excited once those customers have proven that they’re productive working and that the commercial viability is there, who want returns at a much lower level than typical equity partners who want returns in the logistics company. Yeah. I mean, there are pension funds who are very happy for six, seven, eight percent returns, for example.

We haven’t done that yet David, I don’t want to claim we’re further ahead, but that’s where I see the industry going. see longer term, the industry will have to have the right cost of energy, the perfectly designed location site implemented, a digital platform that works really well, and the cost of capital has to be robust. Because if it’s not, what you’re going to find is the transformation isn’t going to happen, and we won’t get that large scale implementation that I really believe we can do if we get all these pieces together.

David Hunt (25:23.162)
Okay.

David Hunt (25:41.05)
Yeah.

David Hunt (25:46.389)
leaves forward. One thing which I guess plays into this is particularly you look at of stacking the revenue cost of making these investments and the other of course everybody knows there are grid connection issues on all levels from obviously connecting renewables or non-renewables for that matter but just connecting to the grid is a challenge. One of the areas where we’re seeing a lot of work at the moment is around flex, flexibility.

Mike Nakrani (26:08.845)
Mm-hmm.

David Hunt (26:14.136)
and I guess there’s a huge, well, no, there’s a huge opportunity in flexibility and in, aggregation through using the, you know, V2G essentially, you’re using batteries as a, as a storage asset. Now there’s still both some technical and some regulatory challenges and pilots going on this kind of thing, but came to get your thoughts on whether you’re forecasting or seeing that in your plans in the near future.

Mike Nakrani (26:40.59)
100%. David, 100%. Our goal for fleets is to help you bring costs down. And what we want to do, we want to be the long-term partners, consistently looking at ways of making your business better for you from an energy, from a grid management, from a capability perspective. Our goal is, we’re not there to say, I sell you this, see you later. Our goal is to be the long-term partner. And part of being a long-term partner is, maybe that’s an automotive thing. If you think about suppliers, we’re always working with them to look at how we take costs out over time.

David Hunt (27:06.597)
Mm-hmm.

Mike Nakrani (27:07.341)
And we used to call it team value management at Ford when I worked there for a long time. And that mindset is in our business. So VTG, clearly, enablers have to be the OEMs, some regulatory, but I think it’s more the OEMs willingness to understand battery degradation and to enable this. But we see that absolutely coming and we’ve run a few pilots already. And there is also DC VTG capability being demonstrated today in piloting. So we see that absolutely.

we see solar and microgrid on the roof of every warehouse. Now we, again, for me, that one really frustrates me, David, because that’s a no brainer, right? Every, I know people laugh about the UK and we’ve had this tremendously wet start, but there is, there is, if you have a premises and it has a roof and ideally facing somewhat towards south, whether it takes three years to pay back or seven years to pay back, it will pay back, right?

And all you need is the capex investment to do it. Companies like us are happy to put that in and do that for you, but we should do it. But connecting that to the charger, connecting that to the vehicle battery, allowing you to use that to shave off peaks and then allowing V2G to maybe get back to the grid, allowing frequency management, around balancing mechanism. with NISO, all of that stuff we do, right? So, and what we’re doing is we’re trying to give to a fleet operator, essentially energy expertise, right? As an outsource bundle, as I would call it.

The fleet operator doesn’t need to worry about when should I hedge, how much VTG, will my battery last? That’s our problem. And we do it through the digital platform. We do it, you essentially that understanding of what’s needed, how to manage the vehicle, how to manage the battery degradation, how to make sure that when should you take the energy from the solar and when should it go in the battery, when should it come out of that battery and et cetera. And that’s, I think, that’s where I’m super excited because if you think about Kraken Flex in Octopus and what they’re doing today, it’s exciting. It shows you it can be done.

Now we want to be the person who does that for fleets. And we’re doing it. We’re essentially allowing those fleet operators to participate in those markets without any real risk. And we do the rest and they get value from it. And V2G, think 28, realistically, David, that’s why I believe 27, 28. But I think the first step is the OEMs have to be willing. think that’s typically, I’m ex-automative as you know, it’s hard for us to give up.

Mike Nakrani (29:31.916)
that control when we’re worried about battery degradation and impact. And so we’re going to approach it very cautiously as an automotive engineer. And you’ll because there’s no value to me as an OEM if it goes wrong, my warranty profile will get worse, et cetera. So it’s going to have to be driven by fleets going, I want this, I need this because it allows us, it allows me to work with Mike to be able to get a bit more out of my system. Again, bring my costs down, hopefully increase my margin structure.

David Hunt (29:43.962)
Yeah.

Mike Nakrani (29:58.382)
But I see a completely connected system, David, and I see it completely, the data coming from various different sources. And I think what that will do is that will reduce the amount of energy we consume. And that for me has got to be our goal. Our goal is to gradually lower the consumption, thereby lower the cost structure. And then the grid capacity problem, I think, is massive. And it’s massive because we’re not thinking as a joined up system.

David Hunt (30:10.693)
Yeah.

David Hunt (30:27.575)
Mm-hmm.

Mike Nakrani (30:28.527)
Right? We’re thinking is I want my power. So I need it here and I’m going to, I’ll go grab that. And Netherlands is a classic example. I mean, you’ve got Norway and other places, but if you go to Netherlands today, a grid connection can take anything upwards of 10 years now to get. We are going exactly the same way in the UK and our goal for the fleets that we’re working with is to secure the right amount of power in the right location at the right time and be, whether we like it or not.

be prepared for when 28 comes when suddenly everyone’s going to wake up and go I need this and suddenly they’re not going to be able to. So what you’re seeing in Netherlands is you’re seeing bus and truck operators buy diesel or HVO gensets to supply power to their electric vehicles because they can’t get the grid capacity. So their economics are completely through the floor but they’ve got their choice because the government’s mandated it and they have to do it. If they want to win the routes they have to do it.

David Hunt (31:20.313)
Yeah, this is that place where yeah.

Mike Nakrani (31:27.182)
and I can see the same problem occurring in the UK. And the ones who are making loads of money, the ones who’ve thought this through, who’ve actually gone ahead and trialed it, who have now, and they’re winning contracts hand over fist. It’s like, it’s a little bit of a bloodbath for the ones who haven’t thought it through.

David Hunt (31:42.021)
Yeah, and this is where batteries are so critical to smoothing as much as is possible. We still need the connection, of course, but batteries can play a significant part in that. No.

Mike Nakrani (31:46.703)
Correct. Absolutely. Absolutely. It doesn’t need to be a huge battery either. know, people always think, well, you I need this. No, actually, if you look at the peaks and troughs, what you need to do is manage just those peaks and troughs and manage them really well. And if you blow your capex bill on a massive grid connection cost, you’ll then have a huge standing charge because you’ll be paying two awesome geos charges, et cetera. They’re enormous that you never use for stuff that you’ve never used. And your economics will never work.

David Hunt (32:16.443)
I had a bit of a fear factor. You mentioned a couple of sentences or minutes ago the phrase a no-brainer, which clearly a lot of these things exactly are. And just as much I found in the past, just as much as the pub conversations, the education is, oh, but what about that time where my mom, know, granny’s fallen over and I have to drive 700 miles and back. I previously had a solar business, which I founded back in 2007.

In 2011, we put half a megawatt on the roof of a cold storage facility, fully capex, fully self-funded. And at that point, was like, that’s a no brainer. Cold storage facility, big solar roof. Everybody’s going to be knocking on the door. But when we started to talk to customers, what we found was it’s a no brainer. was like, good to be true. In some regards, you’ve got these edge cases of it would never work because of. then when you show it works, it’s like, well.

Mike Nakrani (32:57.756)
Yeah, loads of demand exactly.

Mike Nakrani (33:06.55)
Yeah, yeah, yeah.

David Hunt (33:14.851)
It’s too good to be true.

Mike Nakrani (33:15.279)
Yeah, I think you do, and this is one of the things that absolutely where there is a, doing nothing feels like a sensible solution when you don’t know what to do. The question is for how long do you do nothing and how much information do you try and get and what do you do? And then will the do nothing route lead you to a problem and how quickly? Because it will always lead you to a problem. The doing nothing eventually results in something, right? It’s a decision, even if you believe it’s not a decision. But I think you’re completely right.

There is the I have solar and battery at home and I’m actually thinking about getting a DC charger putting it at home. David, believe it or not. We’re trying to get three phase put into my driveway. My wife and I are fighting about it because the unit is a bit too big and it’s a completely unnecessary expense, but I just want to do it right to show that it can be done. We lived in Germany and Germany everything was DC and so sorry, everything was three phase. So could have put DC and I kind of.

David Hunt (33:57.915)
You have to.

Mike Nakrani (34:12.406)
Want to out compete some of my ex Ford buddies. Let’s call it that but the the solar it doesn’t produce a lot but i’m planning to be in the home for you know for for many many years and What’s amazing is that in summer we can often run two three months where we don’t use the grid at all And I have to pay the standing charge of course, right? That’s necessary evil, but we’re running and there’s something so I work out my payback is going to be probably nine years If i’m already year five into it right

So like in that regard and then if someone said to you, know, like, I mean, one of the conversations I have quite often in the pub is everybody’s first to say these days, especially that we need energy security, but there seems to be this anger towards renewables. What does energy security mean? It means you don’t have to buy gas or oil off anybody else. You can actually choose to get it from your own sources. The issue is you’ve got to get the grid connections, all the other stuff you’ve got to do, winds up north, blah, blah, blah.

Yes, of course, but in the end you will have energy security. Amazing.

David Hunt (35:13.699)
Yeah, I think that’s a bigger picture that we’ve talked on before. think maybe hopefully it’s isolated a little bit from fleets where this is a B2B decision and obviously, know, financials count for more. But certainly we’ve seen those last couple of years. I’m sure you’ve seen, you know, been more than aware of it. People like Fully Charged are very, very good at highlighting how much of a disinformation there has been around electric vehicles from a customer passenger vehicle kind of point of view.

that makes headwinds against decisions. And this energy security thing is absolutely critical to that. But you’ve got a party now which is anti-net zero, an exit I think I ever had referred to the day from Farage. So, exit net zero. And that’s such a calamity. I know I would say that because I’ve been doing this for like a lot of years.

Mike Nakrani (36:00.847)
I hope it’s, I mean, we can only hope the truth will eventually, the data, I think one of the things that so many of you, let’s not get into political landscape, guess, David, to some extent, but I do see that thinking that the big push from us as business leaders is we should force people to look at the data. We just say, I’m listening, I would like to see those words that you’ve just talked about, the numbers you’ve just mentioned.

I would like to see the information set and I would like to compare them and I would like to benchmark them and I would like to see how it would look. And, and, and just hold people to account in that conversation. Now the problem is we’re, living in a world where maybe people don’t have the appetite to get into that depth, right? Where 30 words or less kind of conversation, but, but I’m hopeful that certainly fleets, they make the right decision. So they’re slower to go, but when they do start to look,

at the actual real information set and the data and the analysis. And then if you can do some phasing for them and allow them to show them the pro point that they’re not changing their mind. I have not yet come across a fleet that has said to me where we’ve done something for them who said that I’m now going to stop or go slower. I’ve had people say to me, I need the pilot to finish. We’ve done a lot of work for ZHIP consortium for trucks. They’re saying, I want to get these trucks on the road. I want to see the data.

And then once I see the data, Mike, that you’ve told me analytically works, then let’s talk again. So that’s a year or two. And that’s why I say 28 for logistics fleet in particular, because the analytics say it is absolutely better in every way. Right. Pretty much bar the outlier edge cases. What we now need to do is have running trucks on the road. And then that real world data will inform how accurate or not our model was. And then we’ll be able to say versus that model. This is how it looks in the real world.

David Hunt (37:44.293)
that’s it.

Mike Nakrani (37:53.418)
and you will have had people using them. You know, I don’t know a single truck driver who’s driven an electric truck, who’s come back outside that truck, not beaming. It is substantially better for them as individual, right? And when you, I was lucky enough to drive a few actually at Millbrook. I drove an electric fire truck from Volvo actually. That was really good fun around the track. It was really, really good fun. it’s amazing.

David Hunt (38:15.405)
I’ve driven a few VVs around there, but only small ones, so yeah.

Mike Nakrani (38:18.447)
It’s amazing. had a great time. My son was very jealous. My daughter was very jealous. I got to drive an electric fire truck. But it was easy. You know, I’m not a trained HGV driver, but it was relatively easy. Right. So compared to the stresses of many other vehicles that they have to drive. Right. So and I think that’s going to that I think is I don’t expect many to turn back. Right. There are the ones or two, let’s say people who, you know, way back when

The original diesel vans came out and the original electric vans came out and they had difficulties. But if you look at how much the technology has improved, the size of the battery, the efficiency, et cetera, et cetera now, the Gen 2 and Gen 3 versions are a step change better and they’ve addressed the product feasibility issues.

David Hunt (39:07.323)
Yeah, and also the behavior thing, understanding that you just can’t drive this exactly the same. You can do the same thing, but not necessarily in exactly the same manner. Yeah. So let’s talk about that growth really, because this is clearly a global challenge, but certainly there’s an awful lot of momentum across Europe. A of the OEMs involved are clearly European OEMs that are building these trucks. So there’s a lot of momentum. Where at the moment are they ever active? What’s your plans?

Mike Nakrani (39:13.646)
Correct, exactly right, yes.

Mike Nakrani (39:30.826)
So we’re very UK focused right now, David. So we started three years or so ago now, and we’re continuing to build in the UK. We’ve got a great set of customers. We don’t get everything right, but we work really hard to fix the things we don’t get right. And that’s been rewarded. think customers are seeing that transparency, and we will continue to do that. But we see markets like Germany, France, and Netherlands as our next foray. We think, generally, we think that there’s a massive increase in

in this is going to take place across northern Europe as such and we want to be participant in that. So we are actively pursuing options in those other three countries and then we’ll see where we grow. But the UK is our core right now.

David Hunt (40:12.45)
Okay. Okay. So one thing, as time time runs on, I say off to the dust, but I’m keen to jump back because one of the things about the podcast is around the tech for which we get nerdy about, but also about the entrepreneurial journey. And I mean, treat it a little bit because you’ve worked obviously in global, you know, Ford and BP, you know, to be here in office and obviously, maybe still part of Vitole, but essentially as a startup or a spin out. How have you found that transition to leading and building a niche little team like that? I said,

Mike Nakrani (40:36.078)
It’s

I was always in those big corporate organizations. I was always in the, let’s call it the slightly funkier parts of the business, David, as I would call it, right? So was in Smart Mobility at Ford, and then with BP really, it was like a skunkworks. We used to call it the Advanced Mobility Unit. And so I’ve always been, or for a large part of my career rather, not always, for a large part of my career, I’ve always been in those. And those were really run as a small P &L unit.

where it didn’t have the stresses and strains of traditional, let’s say board management and traditional funding problems, because you had a different mechanism for that, but actually it was a discrete unit that ran and operated outside of, so that wasn’t particularly hard. What’s been, I guess, really, and I guess great for me is that I come from a family of small business entrepreneurs, right? So, know, from simple things like running a pharmacy to my dad’s building business to those elements. And I found that

all of those skills translate. And what I’m trying to do is marry the best of the corporate with the best of the small business. And don’t get it right all the time. But you know, we are one of the things, one of the mantras we have, one of many can be a bit cliched at times, I’m sure, is, know, we’re allowed to say and think stupid things, but we’re not allowed to do stupid things. That makes sense, right? What we do needs to be backed up by data and well thought through.

In a corporate, you can spend too much time thinking it through rather than just trying it. In a small business, you can spend too little time thinking about what you need to do and just trying it and lose loads of money. So where’s the balance? And I found that’s been something where I’ve been lucky enough to have a foot in each camp, which has been really good. And I think the other bit about it is having an empowered team. In a corporate environment, empowerment means something slightly different because you’re worried about your career.

David Hunt (42:14.714)
on the balance, yeah.

David Hunt (42:31.384)
Mm.

Mike Nakrani (42:32.067)
And one of things we’ve been trying to say to the team here is you’re not building a career, you’re building a business. And if you build the business, guess what? Your career will be great. Right. And you have the ability to, we don’t want you to compartmentalize yourself into this bit here. Yeah. You have a business brain and you must use your business brain. So if you work in HR, that does not mean that you just focus on HR benefit practices, right? You should also be thinking about what’s the forward future.

thought process for the business. And you know, if you think about some of the team, they’re thinking about, well, we want to go to other countries. Should we be outsourcing? Should we be looking for low cost? That’s a corporate mindset we’re bringing into a small business. But actually, why don’t small businesses use offshoring more? Right? If think about AI technology, AI itself, you know, in a corporate, you’d give it to a department and the department will actually, we’re doing it very differently here. We’re saying actually everybody needs to use AI in their day to day workload.

and everybody can come up with new business ideas and everybody can deploy things and we push ourselves really hard. So again, trying to do both. And then the other exciting thing, David, is clearly you have to do cashflow management. have get your invoices paid. You have to pick up the phone and go, your invoice is 90 days overdue. Those kind of things which you’ve been through. Right, so again, you need to watch the bank balance, right? You need to think about those things.

David Hunt (43:46.255)
Yeah.

It’s an eye-opener for many people from a corporate background, for sure.

Mike Nakrani (43:59.439)
To be honest, I love that. My dad did it, my cousins have done it, my family have done it for decades. And so for me, it’s kind of water off a duck’s bike and I kind of enjoy it.

David Hunt (44:00.717)
Yeah.

David Hunt (44:08.282)
Building those cultures is fun, right, but also challenging to get that right because actually that blend of obviously some element of responsibility that comes from the corporate sort of grown-up world, if you like, but equally not losing the innovation, the fun, the broader thinking that comes from a startup sort of mindset.

Mike Nakrani (44:23.086)
Yeah, I mean, it’s brilliant though, David, because you could only do it in a company like this because you can’t do it in a corporate. The reason you can’t do it a corporate is because whether you like it or not, the structures are set up in a corporate, typically, to slow you down, to not make mistakes. And essentially, innovation and let’s say new business models, forget innovation technology wise, just new business models, they require a different mindset. Somebody has to think, no, someone will pay for that.

Whereas in the corporate, what will happen if someone says, no one’s ever paid for that, they’re never gonna do it. And actually, you say, I think I can persuade them to do it, because I think it’s better for them. Whereas in a corporate, you’ll spend enormous amounts of time persuading somebody before you get the right to do it. Whereas in a startup like ours, you can go and trial it very low, not taking a huge amount of risk, because if you get it wrong, you’re gonna lose this much, et cetera. And I think that piece there is incredibly fulfilling for me and the team, because…

We get so much stuff done so much faster than we would in the in let’s say a traditional BP or a traditional bit hole or a traditional Ford.

David Hunt (45:27.098)
Yeah, innovation is like you say, businesses are that big for a reason and very because they’ve made fewer mistakes than they would have put them out of business.

Mike Nakrani (45:32.974)
Right. And they put structure in place to limit the damage, right? But it can be really difficult because then you run a legacy system and that inertia eventually you will get disrupted at some point. mean, I can’t remember the exact stack and figure, but how many companies are in, you know, in the top footsie? How long does the, what’s the average tenure for a company in the footsie? It’s actually not that long. Yeah. It’s really interesting. I was thinking they were saying if you go back 20 years, think Shell,

David Hunt (45:54.67)
Yeah, it’s about 20 years or something. It’s not massively young.

Mike Nakrani (46:02.058)
is still in the top 10, right? And I don’t think there’s anybody else. So as an example, right? And you think, well, well, will Microsoft and Google and the other, if they don’t continue to innovate, they absolutely will, right?

David Hunt (46:14.776)
Yeah, and this is only like 20, 30 years old, all these organizations, right? So that’s a, anyway, we could go on forever and we’d love to do so. And we’ll grab a coffee or a beer at some point, have a pub chat. Before we go, one of the things I got back into the habit of is when I started the podcast, I always used to ask for a book recommendation because I’m avid reader. So do you have anything that’s book that’s changed you or been instrumental, whether it could be fiction or could be business orientated, but just one that’s

Mike Nakrani (46:20.27)
Any questions?

Yeah, I’d love that. That would be great.

Mike Nakrani (46:39.183)
I love learning new things, right? And I love learning about corporate cultures and stuff. So I mean, love reading the autobiography. So the obvious ones like the Nike one, the Netflix read Hastings one, I’ve read all those. But my most recent book is an old one. I’m reading From Good to Great by Jim, yeah, I’ve got his surname now, Jim. Yeah, and for me, reading is innovation.

David Hunt (46:56.468)
it’s great doing Collins. Collins.

Mike Nakrani (47:05.314)
Reading is, it’s also a way of getting away from everything else, right? It’s escapism as well. I used to read a lot of fiction, but I haven’t read any fiction recently, being honest. And then the other thing I’ve been getting into, believe it or I read just recently, and I read Benjamin Graham’s Intelligent Investor. I went through all of it, and what was really interesting for me, it’s a very, very good book, right? And it’s the book that supposedly made Warren Buffet, and I had never heard of it.

David Hunt (47:23.779)
Okay.

Mike Nakrani (47:33.742)
You know, I’m not an investor in that, in the traditional sense in the stock market. But I thought, well, Warren Buffett claimed this, that all the answers were in that book. And he said that everybody should read that book and it tells you what to do. And what was, what was the big takeout for me was that Benjamin Graham was a very successful investor. Clearly, Chuchilidj, Warren and many others. And what he, what was key for me was that he said, you’re measuring the business. And I thought, I get it now. When people buy stocks and shares,

They’re thinking about the price of the stock and share, but Benjamin Graham and Warren Buffett and others are saying, actually ignore that. Focus on the business. Is the business a great business? Does the business have enough cash? Has the business got a stable management team? Has it got a wide moat versus other competition? Is it priced cheaply versus what you think it’s worth? And it made me smile because I’m a business person. I’m not an investor.

And I thought that’s really interesting. I love, I went through it again. was a big, it’s a big tome, right? It’s not a small book. Yeah. But for me personally, it was a reassurement of actually business people are valuable, you know, because it’s not just the money men that make things happen. It’s the people who make things, exactly make stuff, take risks and do stuff. But actually it’s the basics matter. And I thought that was good.

David Hunt (48:36.25)
The tone is them. Yeah.

David Hunt (48:46.606)
You have to make stuff, do stuff, build stuff, right? So yeah.

Mike Nakrani (48:56.558)
But like I said, the going from good to great for me, it’s really fun. And I love reading about business history. The other thing is on podcasts, I listen to the acquired podcast, David, I don’t know if you listen to that at all. Again, business history. And there is another business history one from Bloomberg that I’ve just started. so I guess it’s a great question. But for me, I need that as a CEO of this business, as the founder of this business, because I need to be hearing what others are doing and being challenged consistently.

David Hunt (48:59.726)
Yeah.

Mike Nakrani (49:26.349)
And I use that as let’s call it my memory bank to think about, should we be looking at that for our business? Should we be thinking about? Because AI is one classic example, David, right? There’s no answer today, right? But if you talk to and you listen to 20, 30 different leaders, eventually your formal point of view based on some fact, not just, it’s going to replace everybody or it’s rubbish, right? And so I’m trying to, I have to do more of that, to be honest, and I will do more.

David Hunt (49:54.884)
Yeah, there’s so much to learn. The AI in itself may be new, actually disruption and new technologies and you know, there’s also the yeah, except they’re always that you can always say that it’s unique and to a degree, of course it is, but there’s always something in the past that can point you in the right direction. But listen, it’s been cool. Really enjoyed the time, Mike. Thanks so much for sharing that. We’ll share on the podcast notes, links to the books and links obviously to VEV so people can find that a little bit more. And it’d be great to see how we are in 2028. Hopefully again, a lot of those thoughts.

Mike Nakrani (50:01.602)
they’ve been there for tens of eons right exactly right

Mike Nakrani (50:19.128)
Super.

Mike Nakrani (50:22.956)
Yeah, I mean, we should touch base before then, David. Let’s follow up. Let’s follow up in maybe a year and see how the things have progressed. Ideally, hopefully well, right? You never know what’s going happen in the future, of course. But yeah, but thank you for the opportunity to get a chance to share that with you. I appreciate it.

David Hunt (50:35.94)
Good stuff. Thanks very much, Mike.

Mike Nakrani (50:37.358)
All right, take care.