LONG BEACH, Calif. — Startup infrastructure developer WattEV envisions creating a modern Pony Express with electric trucks replacing horses to keep freight moving.
Evoking the mail-moving experiment in the early 1860s, co-founder and CEO Salim Youssefzadeh is creating a high-power charging infrastructure. To that he is adding zero tailpipe emission electric trucks. Then comes digital freight brokering. Finally, his software expertise ties everything together to help shippers meet increasing customer demand for sustainable freight hauling.
And he’s doing it mostly with other people’s money — specifically grants from the state of California.
$20 million in grants for WattEV
“We’ve raised well over $20 million in grants so far that are going towards both infrastructure as well as towards the trucks,” Youssefzadeh told FreightWaves at the Advanced Clean Transportation Expo in May. “We saw the number of grants and opportunities available. And we wanted to become the dominant provider in public charging for electric trucks.”
The company raised $6 million from “family and friends” in a pre-seed round that closed a year ago. A seed round is underway. An A Series round with a $50 million goal comes next.
WattEV is building out a truck-as-a-service model that includes a public network of heavy-duty battery-electric truck charging depots to service major transportation corridors. They connect shipping ports with freight distribution centers and warehouse locations.
WattEV came into being less than two years ago. It is already a favorite of regulators in climate-conscious California. for the last two ACT Expos, it has played a starring role. Last month, it announced a plaza with 26 charging sites within the Port of Long Beach.
“In years past, we’ve talked about reducing emissions,” Mario Cordero, executive director of the Port of Long Beach, said in a May 10 ACT Expo news conference with Youssefzadeh. “Today, we’re talking about eliminating emissions as it relates to truck transportation.”
WattEV’s groundbreaking moves
In December, WattEV broke ground on its first location in Bakersfield, California. Installations in San Bernardino and Gardenia will follow by the end of the year. They create a triangle of roughly 250-mile routes. WattEV’s fleet of 50 second-generation Volvo VNR Electric trucks can cover one leg on a single electric charge.
“That allows us to show that it’s viable beyond just the short-haul freight [and] that you can go beyond just traveling the port and the locations around it,” Youssefzadeh said. “We’re already looking at creating a zero-emissions corridor that goes all the way from Long Beach in Southern California to Northern California.”
In March, WattEV ordered the VNR Electric tractors. Thy form the start of its truck-as-a-service fleet. Each truck qualified for the maximum $168,000 voucher from the California Hybrid and Zero-Emission Truck and Bus Voucher Incentive Program. And WattEV is leasing, rather than buying, the trucks to keep its capital expenditures low.
The startup envisions drivers reserving a truck at one of its charging depots, driving it to another depot where it would drop and hook its load to a freshly charged truck. Freight would move from the Long Beach and Los Angeles ports north to the agricultural San Joaquin Valley and east to the Inland Empire.
“This type of innovative thinking is necessary to transform how the industry transports freight,” said Peter Voorhoeve, president of Volvo Trucks North America.
WattEV charging up
WattEV is starting with 360-kilowatt chargers that can replenish the state of charge of a VNR Electric to 80% in about 90 minutes. Having a charged truck ready for swapping is the key to WattEV’s initial operational plan.
When megawatt charging is available about a year from now, WattEV expects to be able to charge trucks in 30-45 minutes. A driver could take a break while that is happening and then resume driving the same truck.
“At the end of the day, we don’t want our drivers waiting for anything, whether it’s to load a truck or to charge,” Youssefzadeh said.
WattEV’s homegrown charging solution uses a matrix switch to share a specific amount of power between 16 combined charging system (CCS) dispensers and four megawatt charging systems (MCS) dispensers. A global MCS standard is being worked on by a European group called CharIN.
“That will allow for a more economical solution,” Youssefzadeh said. “It’ll bring down the cost, and it’ll be more efficient for power supply.”
Who’s going to drive?
Owner-operators are a WattEV target audience. They operate 70% of the trucks on the road but usually drive older trucks because they cannot afford new units. And electric trucks cost up to four times as much as the typical $130,000 of a new diesel-powered truck.
“Most of these guys are operating secondhand trucks that are $60,000 or less,” Youssefzadeh said. “Even with all these incentives and mandates to go to zero emissions, they can’t afford it even if they wanted to.”
Guaranteeing loads and a zero-emission truck to drive with a set price for energy make a compelling case.
“If the truck is driven more miles per day, you’re bringing down the total cost of ownership,” Youssefzadeh said. “Because these assets are no longer tied to a single operator, we’re able to smartly manage those assets. It becomes a software solution.”
The Owner-Operator Independent Drivers Association is unaware of WattEV and expressed skepticism at how its model would benefit its members.
“With a small business trucking carrier, it’s all a matter of how much does it actually cost,” spokesperson Norita Taylor said. “Is there infrastructure in place to support it? Will there be enough profit to sustain?”
WattEV’s systems approach
Youssefzadeh is 33 and holds degrees in electrical engineering with a computer engineering focus, applied math, a master’s in computer science and an MBA. He has no background in the trucking industry. Before settling on a TaaS model, Youssefzadeh explored the potential for hydrogen fuel cells.
“I actually come from a software engineering background,” he said. “I have that entrepreneurship mindset and I really like solving problems.
“The way this whole ecosystem comes together is through the software that we’re building out. And that gives ease of use to the drivers that want to get into this. It also provides the intense amount of data analytics that [helps match] drivers with routes, how we optimize and place our assets and everything.
“A big portion of work going into developing that software will be operational also by the end of this year.”
Watt EV’s family affair
Youssefzadeh’s father, Emil, who is an investor and chairman of the young company, said having a trucking background is irrelevant.
“I don’t think the founders of Uber were taxi drivers,” Emil Youssefzadeh said. “It’s all the challenge of solving an engineering problem, a math problem, optimization. That’s how we approached it.”
Emil is an electrical engineer who worked at Hughes Aircraft and ran his own satellite communications company for two decades before selling it to private equity. He helped Boeing create a large infrastructure to bring broadband internet to Africa seven years ago.
“The challenge there was the same thing, how to build up an infrastructure in stages. Now we’re dealing with that on the ground,” he said.
Trucking industry evolves
The WattEV approach holds promise because it addresses the evolving role equipment plays in the trucking ecosystem.
“Truck as a product [has been] the business model for the past 100 years,” said Sandeep Kar, chief strategy officer at vehicle diagnostics company Noregon Systems. “You’d buy a truck and you’d ask yourself, ‘What do I do with this truck?’ It has come to a stage now in 2022 where you buy a truck and ask what the truck can do for me.”
For example, can it locate available loads, generate income or improve a shipper’s environmental footprint?
“Whoever solves that problem becomes a very, very interesting company to watch because they will be the ambassadors of that change,” Kar said. “Every OEM wants to do that, but OEMs are too busy making money in the current business model setting. They will never be the pioneers here. It will be companies like these who will usher this change.”
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