Ep. 6: Michael Johanns - smart charging enthusiast from Deftpower, energy transition, EV stakeholders, smart charging, projects, outlooks

0:11 Welcome to the Smart Charge by RiDERgy podcast. This is Claudio Geyken, founder and CEO of RiDERgy. This is your show to learn about all things energy management and smart charging innovation for electric vehicles and fleets.

0:37 So hey, Michael, how are you today? Nice that you're here. Hey Claudio, thanks for the invitation. Yeah, I'm doing quite well here in Berlin, nice weather, blue sky, finally the summer is coming back. So it's always for me the moment where my joy gets up. Cool, yeah, and before we dive into more specific topics, maybe you can introduce yourself to the listeners. What's your background? You can go as far as you wish, what you think is relevant, and

1:09 then to where you are today and what you're up to today. Yeah, perfect. Please stop me, interrupt me when it's too long. So Michel Joan, I'm originally a German-speaking Belgian. I always say this because it's quite, yeah, one of the few. We are only 77,000 and it quite defines a lot of where I come from, so really from the Belgian Eifel, from a little village, but still you have more borders and surfaces, so everywhere you have like

1:39 different languages, different cultures around. So Belgium speaking, the French speakers, the Luxembourgish, the Germans - it's quite an interesting region, and therefore in my heart, yeah, a deep European, let's say. Same, yeah, exactly. So I studied in French. I studied in Liège in Belgium, engineer, finished my master's in energy management, worked a few years at what is now TotalEnergies, what was back then Lampiris, one of the first bigger energy

2:14 suppliers in Belgium after the liberalization. We were number 3 on the market, where I worked a lot with portfolio management, pricing, forecasts, so I got really this 15-minute rhythm in my blood, because I had nothing to do with energy markets before. I had always wanted to work in renewables and energy transition, but it was completely new for me to get it from a market side. Which year was that? That was in 2015. And yeah, since then it's

2:47 10 years ago. There were quite some years, quite some company hopping as well. I was perhaps not the most loyal person, so I went from there, came to Berlin, did an MBA at the TU with an energy management focus as well. Met my wife, stayed in Berlin, worked a year at EA 50Hertz in the System of the Future team, where we really thought - it was like a think tank where we were thinking about

3:16 yeah, the big changes and how they influenced the business of a TSO. I went in the COVID times to a smaller startup, Oxolar, and worked there in solar business for apartment buildings, so a complete change again - from the TSO, the so-called grid autobahn, to very much lower. Apartment buildings. Yes, it was really apartment buildings. We were thinking of a scalable solution of putting kind of balcony solar but on the roofs and splitting it

3:51 into the apartments, so really about a handful of watts instead of gigawatts at the TSO. And yeah, then I went to Volkswagen Group Charging. I was there for a bit over 2 years, in the strategy department, everything around bi-directional charging, smart charging, vehicle-grid integration, and yeah, met the founder of Deft Power and was immediately convinced that this is

4:25 where I want to work and the topics I want to work on. Yeah, very cool. Before we dive deeper into the topics that you're working on, maybe just staying a little bit in the past - what are your key takeaways from the jobs that you had, key learnings that you are still proud and satisfied of having made in these different positions? Oh, that's a good question.

4:55 On my personal side, I really realized over the years that I'm not a project manager, that I don't like local small solutions, but that I really want to work on scalable, bigger solutions, ones that are really scalable throughout countries, throughout markets, and even globally. And most of the time it is only possible with software, where you still have the user contact but which is fully scalable. Me not at all coming from IT - that was really over the

5:27 years one of the biggest learnings, that I want to work in the software area, and that this is exactly how I think. I saw as well at all of the companies where the barriers were between my mindset of creating growing, scalable, exponential businesses and the limitations when you are doing project management, which is you need more people for more projects and you can only - it has a

5:57 limit to really scale this exponentially. And the other learning is - I mean, I said earlier, I'm a pure European, and this comes here as well. I have seen many different markets, energy markets with different regulations. And there I've seen as well, especially in Germany with the landscape of 900 grid operators, little kingdoms, little politicians locally that have the power of limiting scalability, that this is on the opposite side of what I see and what we need to have, yeah.

6:33 solutions throughout Europe that scale into the millions, because what we need in the energy business in all of its kinds, but especially mobility, is really low unit costs and high scalability. And this doesn't work if you need to fill in some PDFs of a local grid operator that is only working in a tiny city. You need to have regulation, you need to have possibilities to scale your solution throughout all of the markets immediately.

7:05 It definitely resonates with me as well. I'm convinced that software is going to play such a crucial role, and most energy industry professionals haven't really still grasped the complexity that lies in this distribution of energy, as we have never experienced it before - the advance of renewables and all these EVs, as we will definitely touch upon. I mean, the energy transition until now had its hurdles,

7:37 but in principle it was quite easy, because the first 30% of decarbonization - you put windmills in the existing system, you put solar panels in the existing system, and the system itself can accommodate them more or less. In some countries, in some regions, a bit better than in others, but it works. And now we are entering - we are actually in the second phase, where data is everything, where the forecasting is more important, where the

8:10 distribution, or even the consumption, becomes more important, because now we decarbonize the heating and mobility. And that means that they should use the energy that comes from the wind and the sun, and not just when somebody comes home and plugs in the car into the wall. And this is a completely new mindset of how you need to gather information, how you need to have interoperability, and this is not compatible with distributed systems where we send text files

8:44 on servers from the 1970s, which is how market communication in Germany is working. That is just not compatible. So we need to go into REST APIs. We need to have centralized servers that gather information in real time and make it accessible throughout the landscape to multiple parties. And we cannot have this old system where a little Stadtwerk sends a text file once a day or only once a week, and then somebody reads the text file and then

9:16 processes it - that's just not scalable enough for what we need in the second phase of decarbonization. Cool. And before we move into the specifics of DFT Power and smart charging, you mentioned your last role was at Eli. It's been one of the leading OEMs - traditional OEMs trying to take on a big role in the energy scene. How do you see vehicle OEMs in the

9:45 future having a role in energy management and in the energy transition as an energy player? We've also seen quite a few announcements in the last few days from the likes of Renault, etc., trying to take a role in that. What's your view on OEMs? My views have changed quite a lot. In a lot of pilot projects everybody said, oh, we absolutely need an OEM here, and in the business as well. I see

10:13 it a bit differently than a few years ago. I really thought that OEMs had to capture the customer touch point and use the momentum of selling an EV to also get the whole ecosystem around it. And I don't say that it's impossible, but the reality has shown that OEMs don't own the customer and they don't have a touch point with the customer, because cars get sold through - and Tesla is a bit the exception - but the rest of the OEMs have

10:45 dealerships, importers - there are often three companies in between the production and the final sale. And that makes it super complex. Also, they all operate really worldwide, and the energy business is often a local business, or at least a continental business, and that makes it super hard for them. On top of that, it is a software business, and we have seen what the German OEMs, but also in general the European OEMs, are capable of doing in

11:18 software - it's not that much. They're just too expensive. The innovation cycles are not built for this. And what I rather see at the moment is the opposite: that OEMs are really focusing back on what they're good at. It's making a four-year development cycle, bringing a new platform, producing it at mass, bringing the costs down, and selling hardware. In software it's just the opposite - in software you need to iterate often, you need to test, you need to

11:48 - you cannot do seven-year planning for software. The whole logic of how management in these companies works means they just don't have the right people in the right places. They're so hierarchical and not able to make distributed decisions, because nobody is trained to make decisions or even allowed to make decisions. That makes it super hard to adapt the solution to a local market. And I still see the strengths of OEMs as

12:17 huge, because they have this big branding. But I see it rather in corporations using partners that do software as a service - like DFT Power, but also like a lot of other companies on the market - and finding, per market, per continent, a really fitting solution. And then having, for example - I'll come to it later - a good MSP, a good charging app where you have the app under your control, where you perhaps buy some snippets or some parts of it, but

12:43 the rest you control - at least the design and the user journey - and then, with a good API structure, you partner in local markets with whoever you want. I mean, a Volkswagen could go to every utility in the world and say, "Hey, I want to partner with you. If you're a great forecasting algorithm and I have flexibility, can we not do something together? You have the customers, I have the data of the car." And again, it's a numbers game. I can do this for some

13:09 cents, I want some euros - there's a nice business case. But don't try to get the customers into own energy contracts and own hardware installations and so on, because the people inside the organizations are not trained to be that fast at innovating, but are also too expensive on the numbers compared to what other startups and other companies can do. OK, very, very interesting insight. And then as a segue - yeah, so what drew you to Dea Power and Jacob the founder? What

13:42 was so compelling that you decided to switch? So I always had, already at Eli and Volkswagen - the reason why I joined Eli and Volkswagen was really this: OK,

13:55 you have this first customer touch point, which is often the MSP business, which is the public charging. Everybody that buys an EV has range anxiety and wants to know where they can charge and how much they pay for it. So the MSP business is a really crucial provider of this security - you know where the chargers are, you navigate to them, you know how much you will pay, and you're sure that

14:23 you have a contact person to complain to or to call when you have a problem somewhere on the street and the charger doesn't work, which occurs sometimes - which occurs less and less, but still, it can occur. And then if you have a strong app and you see there, "OK, this charger doesn't work, but 100 m further I have another charger," and your MSP has a good CPO rating engine where you know beforehand it's only 2 stars - so if you're a risk-averse person

14:49 you go only to the 4- or 5-star ones where you're 100% sure they will work. Therefore, already years ago, Eli and DCS and others in the market - this MSP business was really crucial for the lift-off of e-mobility, because even if you have a garage and a home charger, from time to time you need to charge on the way, and this gives you the security. And by having the security and this app, and you like it,

15:17 it can be the OEM app, it can be a utility app, it can be whoever claims to be an MSP - you have this possibility to really, without any customer acquisition cost, start smart charging with these people. And this was already my vision always at Eli: to use the MSP of the OEMs and then build on top of this first customer touch point and say, "Here is actually a menu and we can do some peak/off-peak, we can save you some money at home,

15:45 some dynamic tariffs, or whatever," because the OEM or the MSPs can have the data of the car, can have the state of charge, can ask for a departure time. And this was my vision. And it was not really built upon, because it was different business units and different focus areas in the OEM. And then I met Jacob, and that was the idea behind Dea Power - why they founded Dea Power. It

16:15 was exactly combining MSP and smart charging, and when I heard this I was like, "OK, I need to jump on that horse," because it sounds like the story that I've been telling for years. And cool - I changed. Just maybe, because there are some listeners that might not be as familiar with all the jargon that we're going to use, let's just make a quick definition. So, MSP - maybe you can define that, and then we can put it in order of what an MSP

16:44 needs to communicate with, like CPO, CPMS, etc. Maybe we can also give a bit of a - yeah. Yes, it's a geek environment, that's for sure. We see it every week when we have new people onboarding and so on - we use a lot of jargon. Sorry to all of the listeners that are perhaps not used to this. So the CPO, the charge point operator, is the one

17:11 that mostly owns the charger, installs the charger, and operates the charger, and puts the prices on these chargers. And then on the other side you have the MSP - or in German often EMP - it's a mobility service provider, it's the user-facing part. Often they are not distinguishable. For example, IONITY is both: they have their own chargers and they have their own app, but in the app they also give access to other charge points that are not owned and operated by them. And these are the

17:44 two roles where we see a clear - should be a clear cut between both. So the one operates hardware and has their own business case in infrastructure, and of course energy as well, because they buy and sell energy, but it's all around the infrastructure. This infrastructure needs to work. This infrastructure needs to be open and interoperable with as many solutions on the market. And on the other side you have the MSP that is fully focused on the driver and their car and

18:12 on the needs of the driver and on the pricing. So it's a bit like the retailers in energy - they have the price authority. They can say, "I take the same price as the CPOs," which most of our customers do, but I can also say, "This group here, they have a subscription with me so they get it 20% cheaper," or, "These people, I bill it to their employer because it's a fleet." So all of all

18:39 Of this access rights, the price setting for the end customers is business of the MSP. All right. Yeah, and then maybe as a complement as well, there's in my view in the markets this other big player role that is good to understand. The CPOs mostly are not charging software - they don't build their own charging software, right - then they buy from CPMSs. So there are two other roles behind these two major roles. So you have behind

19:11 the CPO you have a CPMS, so a charge point management system, which is the software to operate the charge points. Some have developed it on their own, some take white label solutions or software-as-a-service solutions from the market. And the same happens as well on the MSP side. EMBA has developed it themselves, both sides, but a lot of players take it, for example, from us or from a lot of other software-as-a-service solution providers. And we have actually not

19:43 that nice a name as you have. CPMS - the software for the CPO - we don't really have a name for it on the MSP side. So it's the software as a service for MSPs, yes, the back end that MSPs use. That is also, yeah, maybe you can share what's the unique angle of that power compared to other MSPs, so to say, if you say, OK, BMW has built their own MSP, and then there's others that have built also

20:13 their own, or there might also be companies that sell MSP white label apps as a business model. And what is DF Power's angle to the whole market? Yeah, let's start at the beginning. I think what is really important to understand when you speak about DA is speaking about the founders, because where they came from - Jacob von Sonnefeld has founded, over 10 years ago, Plugsurfing here in Berlin actually

20:45 and he was the first independent, with his colleague and co-founder Adam, the first independent roaming models. So they were not OEM, they were not connected to the cars, they were not connected to the chargers, and they still wanted to get their place in the business. So they opened up a lot of roaming agreements, a lot of closed systems opened up for them, and they were the first ones on the market saying, we have the customer but

21:15 we don't have the car, we don't sell the car, and we don't have the infrastructure - we just want access to this infrastructure. Which is really a mindset of interoperability, that every charging card should work everywhere and should be invoiceable. And on the other side was Marc Dick, who was back then CIO at Allego, which was kind of the first CPO that was thinking really purely from an infrastructure business and not from the user

21:43 experience - user experience of course at the chargers, but not necessarily following up the user, billing the users, and having the users. So they wanted to have an infrastructure business and opening up for roaming. And so these two came together after a lot of years of experience and founded DF Power with the vision of creating the biggest virtual EV battery on the market. Based on this principle that the MSP is

22:12 the one that - the MSP in all of its forms, which we'll come to later when we talk about who our customers are - holds the customer touch point, and that smart charging and optimization should only be done with the clear consent and the clear guidelines of the user, because the flexibility is owned by the user and not by the hardware provider of the charge point. And that was a completely different vision. Until now I think we are the only

22:42 party on the market that combines these two business models of smart charging and MSP, thinking them together in that regard. So that's one of the major differentiations to the others. And also that we came a bit later, so through that experience we have the advantage of having, I think, one of the most advanced platforms in that regard. And what is clear - and here I think we are as well the only ones - we have never, like

23:11 from the start, been the only software as a service, meaning we have no own drivers on our platform, we don't have own fleets as customers. Our customers have the complete ownership of the business case, they can set the pricing, they own the data of the users and not us. And this is a bit distinctive from most other MSP software players in the market. They are mostly in competition with their own customers, and they are often the business provider. So on

23:39 the invoice at the end stands the software provider and not the entity that actually gives the brand. For example, on the Skoda brand stands Volkswagen Group Charging and not Skoda. So it's a bit distinct in that regard as well. So this software-as-a-service approach has much more flexibility, so to say, and there's a smart charging combination that is unique, yes. All right, then

24:09 I think let me just check if we had another point before we dive deeper into - yeah, maybe before we dive deeper into smart charging, you wanted to also say what are the customer groups typically that DF Power would service. So funny enough, our two biggest, or two of our biggest customers, are not at all in our customer groups because they are associations. So we have the ANWB, which is the ADAC of the Netherlands, with over 100 years'

24:44 experience and customer base - every 2nd Dutch person is actually a member of them - and we have the EV Association of Norway, Norske Elbilforening. So two really distinct entities that were really searching for somebody that does software as a service for them, and not MSP as a service. It's really different because they own the customer data. With the EV Association from Norway, we even don't have any customer names. We get them just over

25:17 token from their CRM system, so they really use us as a roaming platform, as their app and white label app, but in the background it's their systems, their ownership of the customer and the customer data. And that was the reason why they chose us, even at a time when our solution was quite elementary, like at the beginning. So these are two big customers, and we have the CPOs. We

25:44 have a lot of CPOs that want their customer touch points for subscriptions, for certain monthly loyalty programs. Just to be clear, in this case it's not the CPO having a CPMS but rather a CPO having both a CPMS and an MSP, so they want to add an MSP layer. A lot of them do this in the one-stop shop, so most CPMS systems have as well a certain capability to handle roaming cards, but as it is, it is only a side business.

26:16 You see that the app ratings, you see that the happiness of the customers with it - it is not anymore, with most of these solutions, the state of the art of what drivers need today. So we really lobby a lot with our customers to say: take two different, distinct solutions for the two businesses, because on the CPMS side you need to be able to handle roaming that comes in, so third-party charging cards. And on the MSP

26:46 business, you have only a few percent of the sessions happening on your charge point, but a lot of them happen as well on third-party charge points. And then you need to handle all of these invoices from outside and so on. So these are two completely different businesses with different logics and different IT solutions that you need. And yeah, it is our success at the moment. A lot of people that were in a one-stop shop migrate. So yeah, CPOs are our

27:13 business. Also a lot of fleet operators, for example, are interested in getting a good customer solution, a customer app. Then OEMs - we had Fisker, unfortunately bankrupt, but we have, for example, General Motors for the European business. We have deep conversations with quite a handful of big worldwide OEMs as well. Then energy utilities - we have quite a lot of them that are energy suppliers and that want to cross-

27:47 sell through the different product lines, and often, especially in Germany, they have sent as well some chargers and they have everything in-house, so they need a good customer touch point. All right, yeah, I followed. But maybe just for the listener, because it might get confusing sometimes, just to explain it in a very simple way, because I realized also when I talk with non-industry professionals that people get confused, so

28:12 roaming as a concept is a bit like we know it from the telco industry, when you get with your phone and the SIM card into a grid that is not the one of your original telecommunications provider - like Deutsche Telekom going into Vodafone. In the EV industry we copied a little bit the same wording, and so if there are different charge point operators there might be different - in this case not SIM cards, but rather MSPs. This

28:42 is charging cards, and these need to be compatible and interoperable between each other, and that's why there is this roaming concept. So to go a bit deeper into this: we have at the moment over 2,000 entities throughout Europe connected to our platform with over 900,000 charge points. Some of them have only a few, some of them have 50,000, but there are over 2,000 entities we are technically connected to as charge point operators. Some have then

29:13 let's say it's the same company but with three entities in different markets, for example. But still, for all of them there are different IT connections, and they all need to agree that our cards from our customers work on their chargers. So there's a contract behind it, there's an IT connection behind it, so the charger wherever in Europe needs to detect and accept this one card or remote start over the app, and needs to allow this driver to charge there, and needs

29:44 to trust us and our partners to go in for costs, because they allow the charging without getting money for it right away. Then at the end of the month we receive from these over 2,000 entities invoices from wherever in Europe with different VAT regimes and so on. And we get as well the charge detail records - the details of what has been charged, how many kWh, when, what was the time, how long has

30:15 the parking been, and how much do we owe them. Yeah, that's quite complex, and there have been roaming platforms like Hubject that simplify this access between these players, but still there's a lot of trust needed in that regard - that you're really paying the bills and that you trust them that your card is really working there, from southern Italy to northern Norway. All right, now let's focus on maybe the most

30:48 Interesting aspect. After having laid this groundwork, I think you have on LinkedIn a self-proclaimed smart charging enthusiast, so let's talk smart charging. This podcast also is called Smart Charge by RiDERgy, so why is smart charging in your view so important for the energy systems? What makes it so relevant and why should the listener care, so to say? Yeah, I think there are two major reasons. We said before, in the second phase of the energy

31:21 transition we need to kind of get rid of the renewables - we need to consume them at the right moments, because every time there's sunshine there's too much solar energy in the grid. And it makes only sense to decarbonize mobility if we are charging on renewables and not on coal, because at the end, even on coal it's a bit more efficient, but still it makes no sense to just shift the CO2 emissions. And so this

31:49 first principle of smart charging is: we need to charge in the cheapest and in the most CO2-free hours. But on the other side it is as well a necessity - we cannot, just from a system perspective, accommodate 100% e-mobility without doing smart charging. So it's not a nice-to-have; that's what a lot of people don't understand. The grid operators can claim as much copper as they want to

32:23 put in the ground - they will not be able to put enough copper in the ground to accommodate 45 million EVs in Germany when we don't charge them intelligently, because when you see that only 5 million vehicles are charging at the same moment, it's more or less the load of the whole energy grid in Germany. So you have a lot of hours in the year where you have around 50 gigawatts of consumption, which is 50 big power plants. And 5

32:50 million vehicles charging at the same moment at a 10–11 kW charger, which is a normal home charger, is the equivalent of the whole industry, every household, every business in the whole country. And we want to have tenfold of this - we want to have 50 million EVs, not only 5. So when the 50 million come home in the evening at 6 and they plug in, the chance is really high that 5 million of them are really charging at that moment - it's probably rather 20 - and that

33:16 means that the energy system simply cannot deliver it. There's no power plant that can deliver it, no grid that can transport it, so there is no alternative to doing smart charging. And coming back to the first principle I mentioned, the EV - we need flexibility as a buzzword. We need flexibility in consumption. And the EV has just the biggest flexibility of all devices in the market, and they are already paid for the mobility part, so they will get cheaper, they will

33:47 get cheaper and equivalent to diesel, so they will scale and take over the market. But their consumption is super flexible. They need to charge only twice a week more or less, and each time for like 1 to 3 hours - so on average 1 hour per day they drive, 1 hour per day they charge, and they stand 22 hours a day. And this charging capacity is just so big - it's 10 times bigger than the average household in the peak hour -

34:13 that if you push this to the right hours you have an enormous effect on the energy system, and you have this natural flexibility which you don't have with other devices. Even heat pumps: when it's cold, you could perhaps stop them for half an hour or an hour, but you cannot stop them for a whole day. An EV you can just not charge for 2 days because on Wednesday there's wind coming, so I just don't charge on Monday or Tuesday - and that's really

34:41 the special thing, why I'm so into it, why I'm an enthusiast of EV charging. Yeah, cool. I can definitely relate. And just for the sake of definitions as well, before we dig deeper - I've seen a little bit of different definitions of smart charging actually. When I first started really looking into the topic of smart charging, I even saw some people talking about chargers being smart when they were just connected to the internet, which I think we

35:12 can agree is not the smart charging we're talking about. And I see a lot of distinction between bidirectional charging, V2G, and smart charging, which for me - I don't know, I'm not sure if there is a dictionary definition. Actually, my random side fact: my dad is actually leading the German dictionary, so I should ask him. Maybe he's listening. But yeah, what's the definition for you? Is smart charging going, stopping at, so to say, V1G - so only

35:41 charging in one direction - or also bidirectional charging, including all the flexibility? Where does it begin and stop between V1G and V2G? I don't see that so clearly either, because through my experience at Volkswagen I put a virtual pause button on V2G for at least 3 to 5 years. There are so many hurdles on the ground, and also everybody is focusing on this - in every discussion, in every universe, in every pilot project, everybody wants to do something

36:18 with bidirectional charging. But at the moment over 95% of the charging sessions - of the real kWh that we are charging - are not optimized, are not intelligent. The discussion in research and in a lot of podcasts as well is completely distinct from the reality in the market. I would say we have less than 0.01% of charging sessions happening with a vehicle that is bidirectional-charging-ready with a user

36:50 that is bidirectional charging ready at the charger, that is bidirectional charging ready. And when this is the percentage, yeah, for us as a company, but also for me from an energy market perspective, it is at this moment in time a theoretical exercise. And it is something that needs to be prepared in politics, and it needs to be a topic in regulatory workshops, and needs to be tackled in grid connection descriptions, and it needs to

37:19 be tackled in how OEMs build their platforms, because they have 5 to 7 years development. But it is not yet an end consumer topic on a scalable level. It is starting now. It's different than two years ago, but still, for me when I speak about smart charging, I don't exclude bidirectional charging, but I also don't have it as the first thing in my mind, because I always claimed that it's just a minus sign in front of

37:52 the equation. Makes sense. Yeah, good point. And actually, let's maybe dig deeper onto that for a moment. So starting with the hurdles, what are the big hurdles you see? Starting with the simple: why are we still having, as you say, 95% of the charging sessions not being optimized? What's the hurdle there? Why aren't we actually doing it already

38:26 for the things that are possible? What things do you see are possible, and for the other things, what are the major hurdles for us to finally get rocking in all the potential? I think it's a natural evolution. The last 10 years everybody was focused on bringing cars on the market. They were early adopters that had range anxiety. We had only 50–80 kilometers of range, so they were not really - Alltagstauglichkeit, in German - and there were a lot of hurdles everywhere just to get it going. When you heard your previous

38:58 podcast, a person had said, yeah, in Germany 2015 I think it was 100 cars a month sold. Now we are at - what was it - 20,000, I think 30,000 or something. So we are now really into the mass market. The fleet accepted in other markets like Belgium, Netherlands, and

39:27 Denmark - we've seen in the last three years that we went from 10–15% market share to now nearly 50% market share. So we are really there in the mass market. And therefore it was normal that in the past vehicle-grid integration was stopping at the charging works. So my charging card at this charger: I plug in, the car detects the charger, and the electrons flow. That was hard work of over a decade to make this really work. I see a

39:58 charger on Google, I go there, I put my card and it's working. At home the same: I call my electrician, he knows what he installs, and it just charges. So that was the reason. And it was also fine like this, because just on an energy market scale, the EVs had zero significance - not for the grid, neither for the energy markets. This is now changing. This is changing as I said, when you go into

40:24 the millions in the European system. This is changing, and just to put it into perspective - because I think I know the numbers at the moment - 5 million, as you said, would be 10% of the overall vehicle fleet in Germany, and now we're around 2%, I think, in Germany, right? Yeah, I think we are not even at 2%, at 1.6 million, 2 million, something like this. So yeah, and I think the whole vehicle

40:50 fleet is 40-something million. We have something to do. In Norway we see new cars sold are nearly 100% electric, and in the fleet as well over 20% or 30% - they've even surpassed the diesel cars now. Petrol is still a bit ahead, but it's really changing every year with an average lifetime of 8 to 10 years. Yeah, that will change directly, and we see in Norway now in our discussions one of our

41:17 biggest customers that they are now in the second phase. And in a lot of countries it also comes on top that to optimize you need to have an incentive. Most optimizations nowadays are just: I want to consume my own electricity, self-sufficiency, Autarkie, whatever. But this is not a good incentive, because it should always be: what does the system need, not what is your little household optimizing on. And for this we have a principle

41:48 in RiDERgy that we optimize only on monetary systems, so only when the driver saves money or we can give him rewards for what they are doing.

42:01 So smart charging becomes now more relevant for the market, and what we need to find is price incentives, price incentives, price incentives. And in Germany it's just not possible. My boss said: forget Germany for the next 3 years. It has a reason, because you have no smart meters. When you have no smart metering, and when you have 950 grid operators that are lobbying every week in the BDEW to not go further because it's a cash cow -

42:29 grid operations without doing it in an intelligent way is little effort for a lot of returns, and they did this for the last 50 years. So Germany is just at that point. What would be the difference for the grid operators? Why do you think they lobby so much against smart meters? First of all, because all of these text files, services and servers and so on are just - yeah, they need to change.

42:57 The whole market communication. Digital meters are more complex to install, more complex. You need to school your people. You need, as a metered operator, to have the IT infrastructure, the IT security, and everything around it, which 950 operators simply cannot handle. So of these 950, perhaps 5 can handle it, and even E.ON is struggling enormously with doing it, also because the

43:26 regulation is completely absurd in Germany, completely apart from what is logical. I wish that in the last three years somebody would have just said, OK, let's give every smart meter gateway supplier a million euros or €5 million, compensate them for their losses, and now we start again and just take whatever system other countries are using - without secure channels, without whatever - we need 15-minute measurements, best even

44:01 minute measurements. But we need these values, because without these values we cannot create market signals, we cannot create price signals. Public chargers in Germany, even when there are over 100,000 kWh going through them, are on SLPs - synthetic load profiles. They get measured once a year. And all of the imbalance, all of the risk of having at 6 o'clock in the hardest, most expensive hours - nobody feels it, because it is put in an Ausgleichskreis, a Bilanzkreis, and then socialized onto the grid fees.

44:33 Germany is the only country in Europe that does it that way. So there is no incentive for the whole chain to optimize anything, neither at home nor in public, because there is no price incentive. When you have no 15-minute measurement, it doesn't make a difference if I charge at 6 or at 9, because at the end it's just the same measurement at the end of the year that gets collected. Right - just maybe to explain, because I followed, but

44:58 some people who are not so familiar might not have followed the last point you made. The way the electricity grid works is that you need to, as a consumer or producer of electricity, nominate - that's the jargon - but it really means that you predict and say how much you will consume and produce in a particular time period. This is meant to keep the stability of

45:27 50 Hz, so that production and consumption always need to be equal at the same time - that's the precondition from physics. If you are not at particular moments where you said you would be, you would be penalized. And that's what you were saying: for that you need the measurements. You could do this even with SLPs. Countries like Belgium - when I was at an energy supplier 10 years ago, most of the

45:52 households had no smart meters, so only a yearly measurement. But what they did is, for a certain area, they said: here's a consumption of, let's say, 1 megawatt. You as a supplier have 10% of the customers, so for every 15 minutes you're responsible for 10% of this megawatt. That means you still need good forecasting, you still need good procurement even in intraday, and you get hit by imbalance prices if you did something wrong. And the

46:20 same for solar: you have X% of the solar in that area, that grid area, so you get 1% of the imbalance created by it as well. In Germany the system is: the grid operator takes it off every day. They say this is the synthetic load profile, this nomination. Everybody simply follows it and everything that deviates from it is taken over by the system. This of course gives zero incentive. In Germany, a supplier with

46:46 5 people can handle the whole operations of an energy supplier, which shouldn't be the case. You should have portfolio management and you should really have intraday optimization - but you don't need it. And this of course leads to the outcome that you have zero price signals. On top of that, in public charging we have complexity. We spoke earlier about how roaming is already so complex, with 2,000 players on one hand and thousands on the other, just to get

47:16 the normal billing right: it was 1 kWh times Y price, I want €30 at the end of the month for this session. That's already complex. When you now take the time component in, it makes things super complex. It makes it complex in the app to compare different charge points, it makes it complex in the billing, it makes it complex in the communication. So if you ask why this hasn't been done in the

47:45 last 10 years - everybody was so focused on getting an invoice correct and getting the session done. Now taking this time component in is quite complex because there are so many partners involved. And this is where DER power comes in with the roles, which makes sense for the complexity. And then we come back to the software point from the beginning: this supposedly old system, where software didn't have to play such a big role, now that we're talking real-time data transfer and

48:17 control, becomes much more of a software play than before, right? Yes, and we just see that it's needed. In the last six months we had 2 or 3 Dunkelflauten where prices at 6, 7, 8 in the evening exploded, and still not every production was running, and still most of the consumption - even flexible consumption like EVs - was still just charging because there was no incentive. The prices didn't go from A to B. So we have everything there,

48:54 The tools are there, but we have not been able to communicate from A to B, "Hey, please stop, and then I give you a reward for this." At the same time we saw this weekend already the first negative prices again throughout Europe because there was a bit of sunshine. And we still didn't see more up-sessions in charging happen. So that's the problem that we need to solve. So considering what you just said that

49:20 Germany is a little bit of a tricky market because of the lack of smart meters and the DSOs being so many, and some other reasons. So what's your pragmatic approach now to make things happen today? First of all, working in other countries as well - it sounds stupid but it's really the best learning curve. Do it with the willing, the coalition of the willing as they call it. Go throughout

49:48 Europe - in markets we always follow the EVs. So in general we are stronger in countries like the Netherlands, Belgium, and Norway where the EV market is fully in the mass market, more mature. People have tested the... Unfortunately not yet fully. We are connected there and so on, but we haven't had big customers yet. We have one or two going live, but it's not something - yeah, unfortunately not yet. It's a market to look into

50:18 because the UK, I think, is the most advanced market in flexibility, in the regulation, in the willingness to take risks, and no local utilities with power - so it's a perfect combination actually. Yeah, to do so much... Tragic. Yeah, I know. As far as I know as well, the UK from an energy system flexibility standpoint is quite mature. And you have the English people, Anglo-Saxon people in general, who focus more on the soup instead of the hair

50:52 in the soup. How do you mean that in this context? In Europe and especially in Germany, we often first need to go through every edge case and every potential problem, and all of them need to be first solved in theory, then through practical trials, and then we go live with a solution - and in between is a decade. The UK just has this ability to listen to the market, and it's really interesting how the regulator works

51:22 there. For example, now in December they launched again this crazy concept that we have been lobbying for already since years: that flexibility providers can themselves directly access the intraday markets, the energy markets, even without any collaboration with the supplier of the site. They can trade and they can optimize, and this is something really revolutionary. It sounds like it, and we have been speaking about it since years, and they just implemented it. They did some trials, they did listenings, and it

51:55 took, I think, now 2–3 years and it's live, it's running. They are just faster and more risk-embracing because they see: OK, we have a problem, this problem needs to be solved, and here's a solution - let's do it. Instead of being too "technology open," which means at the end, OK, we do whatever we have done in the past. They really embrace new solutions and say, OK, let's do it. Yeah, this pragmatism - I

52:28 hear you. Pragmatism - yes, that's good. Successful innovation is crucial, also in startups. And we always need to see: OK, what effect do we have now and what do we have in 10–15 years? We cannot wait with our solutions until the problem escalates. So now there's actually a possibility to create a regulation, to just let it run. Some people are happy, some people are unhappy. You see the results. OK, what is really the financial

52:59 effect? Because in theory, on the Excel sheet, a lot of people can claim there are a lot of problems. But then in reality you see, OK, are people actually gaming this whole incentive-gaming discussion? Let us do it as long as the assets are still not that many. Let us try it. Put in a second regulation 2.0 with some penalties and put in a 3.0 with another adaptation - then we learn way more than if

53:27 some professors do some calculations based on theory. And this is a bit our approach here to change the regulation, also in the EU of course. But I see the English out there - just pragmatics, they run interesting things. But not only the English - I think you also mentioned earlier the Dutch. The Dutch are a bit less than the English, and yeah, here it is a bit more difficult. Yeah, I don't know if

53:54 you follow the Chinese market, because it's a lot on my mind lately. I mean they are also known for China speed. Do you follow at all what's happening there, and especially in smart charging? No, especially in smart charging, not so much. In general I follow, as one follows Chinese politics, the effect on the world, especially with regards to renewables and car production and battery science advances and stuff like this, but unfortunately not in the charging business.

54:25 I've never really got deep into it. It's a pity. Yeah, OK. Then, a lot of people are confused in terms of the energy system, grids, and markets - maybe just a quick explainer, and then the following question is: so there's the production of energy and then the demand of energy on the other hand, that make up the markets, and so there's market pricing based on - like Economics 101 where

54:58 It's a result of demand and production. So when there's lots of renewables, that's what we were talking about earlier, prices are usually low in markets or even negative, which is a phenomenon we will not maybe go deeper into for now. And then vice versa. Then there's the grid side of the equation, which, if you take the metaphor of water, you have how much water can flow into these pipes, and in the same analogy, electricity

55:24 cannot flow endlessly into these pipes, so there is a natural constraint based on the copper cables that are there. So as Michael said earlier, we either have the option of expanding these cables or deciding how to best utilize these cables in time. Now this is a prelude. So there's opportunities in this arbitrage of electricity prices in the energy markets that can be captured with smart charging, and then there are reduced grid fees from these grid operators.

56:00 And I think every country has a slightly different flavor of it, but in Europe, luckily, at least in the energy markets and the grids, it's quite harmonized now. With this being the scene-setting: what is your approach? Is it better to go through the energy markets first and then the grids, or is it country by country? The Netherlands, I know, is

56:26 very constrained by electricity grids, so that might be more attractive to focus on that area. How do you view these value streams from a business or regulatory point of view? First from a business perspective, and then maybe you can say what regulatory barriers there are, if any. From a business perspective, I would say the easiest is always focusing on the energy markets if you have smart meters and real allocation and real balancing, because you have clear responsibilities and clear rules

56:55 and immediate benefits, because it's just two independent systems. There's the one - the measurement of a household or a site or whatever - that works for how the system works to bill, and on the other side you have the optimization. And when you optimize, immediately the procurement costs will lower, so you have an immediate effect where somebody profits from it. And therefore the whole system is easier, because you don't need to communicate to somebody, you don't

57:27 need to integrate - you can just say, OK, I optimize for you here, it's your savings, give me a chunk of this. Whereas on the grid part, of course, they are regulated businesses and they are just not allowed to give me money, so they need to have regulation in place to pay people that give them flexibility, which in most countries is not the case. So most grid operators in most countries only get money if they build new stuff. And

57:58 then they have 10 years where they get 10% of it, which is ridiculous, because then they say, of course I need to build more stuff, because that's how they get more money. And if you don't have smart meters and sensors in the system, you don't even know if you need more, because you don't know what the utilization is, and you can just claim you need more, put in cables in the easiest places, and get more money.

58:21 And there is a lot of money - there are billions and billions and billions in this system. I mean, at the moment it's ridiculous. We are going into over 10 cents per kWh of grid fees. That's a lot of money. That's more money than the energy value of it. So what we claim and what we lobby for - but as a business, of course, it's not the first attractive market, because there's so much regulation, so many rules, so many hurdles until

58:48 you can access this. And in a lot of countries it's just not there. Like in Germany there is no DSO - distribution system operator - money that you could collect. They have now started with some flexible tariffs, but unfortunately again not global, but every little entity somewhere published a PDF on their website with certain rules and a lot more conditions. And with an effect like this, it is not really interesting to scale, nor to use actually. So

59:22 yes, we are in favor of dynamic grid tariffs, but even more in favor of flexibility markets, like the NODES platform in Norway, where the grid operator says: in this area, in this city, I need people to not consume, or I need people now to consume - and people like us can say, yeah, we can actually do it for you, right? I think in the Netherlands - I forgot the name now, it's on the tip of my tongue -

59:50 they also have that system. GOPACS? GOPACS, exactly. That would be similar. And are you - I've heard good things about it, but I'm not as familiar with it as you are in the Netherlands. Do you think it should be changed or upgraded? I think the principle of it is good. The problem is that, like always in the energy market, it's easier to make a contract with somebody that

1:00:21 has a megawatt of flexibility in one location that you can measure with a more expensive meter and so on, than if you have it really distributed at a household level where you have multiple assets - say a car together with PV, with heating - interfering. And it's more difficult to really see what the effect was of what you ordered. And there again it is not really on a granular level. So for big parties and big companies,

1:00:53 It is easy to access and it is a super good system, but it is not yet used enough by DSOs. So it's really often used for re-dispatch at tenant level, and not yet really on local level. And on top, not enough on small asset classes where it's really easy to say, OK, I have here 10,000 vehicles in that region. Make me an easy process, here's your red button, give me some money. So they will go there, it's a

1:01:25 good start, but it's not yet usable for us. One thing that I found interesting in this new energy world is that there's all sorts of different players, and I'd love to hear your opinion on the following question, which is: there's people optimizing heat pumps, there's people producing batteries or optimizing stationary batteries that are up and coming. Then there's chargers, OEMs, so people optimizing from the charger angle, others coming from the EVs. So

1:01:59 there's all sorts of dimensions, if you want, on optimizing. And how do you see this relationship between the different assets or players in sync in the future - any trends there? Is it gonna - I used recently the analogy - is it gonna be a cacophony of signals trying to somehow make it work, or is it gonna be a nice concert of beautiful APIs that are gonna work in sync to create - yeah, I like your analogy because

1:02:35 I just had a great idea for an answer. If you take hobby musicians and you put them together and say make a concert, it will be a cacophony. This is what we are doing now. We have amateur players on the market that are only optimizing their own systems, didn't think of interoperability, and then they try to play together and it doesn't work. But if you take professional musicians, you can put them together in the evening, they've never seen

1:03:07 each other. You give them the chords and you say now we play together - they can play in a symphony. I had friends that play in this, they didn't train for it, they go just before, this is the music, and then they tested it shortly and they go there and they can play in huge concerts. And I think this is where we need to go - this is actually the analogy I want to use. If you have

1:03:31 professional players in the market with good solutions that are open to collaborate - because this is the first condition: you need to be open to collaborate. You don't need to want to build a new closed one-stop-shop solution where you want everything, the customer. But if you are open to collaborate, I think there's not one way to go to Rome - to the answer, I should say. There are a lot of regional players, a lot of solutions for different needs, every household is different,

1:04:01 every user makes different choices, and they should do so. So what is really important for us is when we come into a household where there are other players on the site - where you would be working with RiDERgy, for example - that we find the best way of optimizing for the user. The end goal is always lowering the total cost of ownership, because with lower costs

1:04:29 we get more EV participation. And this we only achieve if we collaborate. So as we do it now with thousands of CPOs, we also want to do it with thousands of local controllers - not with the controller itself, but with the back ends. With OEMs we already have 40 OEMs integrated where we can see how full the battery is, and so on. And the same then on complex sites: throughout Europe there's somebody that's better than us - OK, then we deliver just a user interface

1:05:01 and some data and they do the job. In other places there is nobody, so then we do the job. If there's a utility supplying that site that already has programs running, then we need to integrate into them and deliver them the best forecasts or flexibility that we can. So we really come from this: we are experts of EVs and the user, and we have the interface of as many - and hopefully at one point millions of - users throughout Europe. And then our cards,

1:05:28 our apps of our customers are used at certain places, and in that place, if there are many of these places, we will integrate and try to help locally. We have not at all a total-control, one-stop-shop ambition. Yeah, no, that resonates with me. I yesterday listened to a podcast as well from the founder of one company. I feel a more closed approach is not the way

1:06:01 forward. I mean, I would be happy when Philip calls us and wants a good charging solution for the street as well, because I think they have great branding. But I don't agree with their philosophy of saying you need to have full control in one system to get to 100%, because I really believe in a fully interoperable way. And in the way they do it, because in every

1:06:29 market they have different backend helpers, let's say, to bring the solution into the energy market. But still, I wished we could, for example, in a place like this where our car comes to their charging point, send them for example state-of-charge data when the charger is not steerable because it's already there - don't replace it with one from them. Let us steer via the car. Let us deliver you the data, and we can

1:06:56 work together. So I really believe rather in this way that sometimes you touch, sometimes you don't, and our strong belief is that wherever the car comes and the driver comes, there should be a possibility to lower the costs and to help the system, right? And you mentioned in your blog post - I think you wrote together with Jacob as well - that the MSP, or DEF Power in particular, would be very well positioned to

1:07:23 as a market position, so to say, to leverage most of the flexibility. Maybe you want to highlight some of the main points you wrote there for the listeners? Yeah, nice opportunity to do so. So where we come from is really from public charging, and in public charging there's no smart charging happening right now. And most people that speak about smart charging speak about just at

1:07:52 home, as I said, doing some solar optimization, right. But where we come from is rather: we have this MSP solution, we have millions of sessions, a lot of charging sessions that are happening wherever, and we think that way. Because we are so close to the driver and to the car, we can predict where the car will be at what point and when it needs to leave again - so we can predict how much flexibility is there, and this in public and in private and in

1:08:24 semi-public, for example on sites where you guys are. And therefore we believe that the MSP is eccentric because they have the ability to bring this flexibility to the public charging and to bill it, to invoice it, and to treat the data - with the user, to take for example an opt-in or an opt-out. The user needs to be in control, and this is not possible if you do it just through the charger. And yeah, we believe that the

1:08:50 MSPs are the ones that have these millions of user touch points. And yeah, we showed this next week Wednesday. It was a pity we were supposed to go live this week but we postponed it by a week because, yeah, like always with launches, some little app issues. The app gets released, I think now to the app stores, and our biggest customer, Abey in the Netherlands, goes next Wednesday live on one of the big CPOs in

1:09:16 the Netherlands, on over 2000 chargers in Amsterdam, with over 200,000 users having access to this. And when they arrive at this charger, they are not fully informed before, but when they arrive they will get a push notification and have the possibility to tell us when they depart. And when there's a potential to make savings on the energy markets, we will optimize in the name of the grid, the CPO, and at the end of the month we will give

1:09:44 the drivers a cashback to help us, and we will invoice the CPO for the service that we deliver. And this is, in my opinion or in my knowledge, one of the first fully interoperable smart charging - you cannot call it a pilot because it's in full production, in full live - and it's fully scalable. So every CPO that listens to this can write me an email. We can do this in minutes,

1:10:12 we can put your chargers as well in the program. And then we can optimize the sessions on these chargers. And this is something where we really strongly believe, and hopefully at one point we are able to optimize - I don't know - 50, 60, 70% of the sessions that the user does in whatever environment, with every time different partners that are locally the best ones to save money. It sounds very cool. Yeah, I'm excited to then see the results

1:10:41 and then maybe have another recording to learn more. It would be nice. Yeah, the big press release will come - the press action will be the twenty-seventh, so we make a silent launch. Well, now it's not that silent anymore now that I said it, but the big official launch is on the twenty-seventh, when it gets announced in the press, and we hope that a lot

1:11:07 of CPOs, starting in the Netherlands but hopefully beyond as well, will join our path. And we believe in this interoperable smart charging ecosystem. Nice. Yeah, and then what's your view on how fast will we be able to do bidirectional charging at scale? I mean, you said indeed that there's - I think you said 0.01% - combinations of cases where it's actually feasible. I think CHAdeMO from Japan was leading the way with that standard,

1:11:38 making it possible with some particular Japanese cars in the beginning. I think Octopus Energy in England launched one of the first, if not the first, bidirectional or V2G tariff, where I think it's only compatible with that type of vehicles and chargers. And I think also The Mobility House with Renault recently announced something in France, and that was quite interesting as well. But yeah, indeed there are very few

1:12:08 cases here and there. And especially the volumes - I would like to know how many vehicles are until now on the pilot, because you need to have the right charger from Renault with the right car from Renault, with the right energy tariff from Renault or from The Mobility House, and then you need to want to work with them. So there's a lot of ifs, and compared to the global

1:12:33 The European car sales - that's still little. Still, this special Renault case I like a lot, because I was the biggest ambassador, let's say, inside the Volkswagen Group to do AC bidirectional charging. I'm a strong believer that when you do it the AC path, and we finally in a few years get the European Union to force grid operators to have one global, or one European, aggregation, so that you can say, OK, whatever

1:13:07 the rules are, they can be as tough as possible. It's not a problem for the power electronics. The problem is if you have every charger in every street and every grid operator with different rules, which are always the same but just a bit different. The problem is it makes them just tough - what you want from these inverters - but makes them the same throughout Europe. And when we have the same throughout Europe, plus because if they are that

1:13:32 tough, we don't need any regulation anymore, and nothing actually on the charger. So the charger doesn't need to be a bidirectional charger. It can be just a normal charger if the vehicle takes over all the job of the regulation, and it's the same regulation throughout Europe. And if we have this real bidirectional charging, and it comes from cases actually that have nothing to do with vehicle-to-grid - it's really cool to clean your car with a vacuum cleaner in your plug, or you have your

1:14:00 laptop charging in the plug - so it comes really from this. You saw it last year or two years ago, Ford was making an advertisement of the F-150 only about barbecues. It had nothing to do with the car actually. So I really believe in this: vehicle-to-home emergency power, in a lot of countries I really believe in this vehicle-to-load thing, and people are willing to pay €200 more for a vehicle if you have a plug inside.

1:14:26 It's really cool to have 50 kWh or 100 kWh. You can have a whole festival with this for a whole weekend. Like the people in the Ahrtal would have been happy if they would have had - for those 3 months or 2 months without electricity - a car standing. I mean, not the people that had no houses anymore, but all the people around that had no electricity for weeks. For them, having a 70–80 kWh

1:14:52 battery in the house and just plugging in your lamps and so on would have been a super big effect. So I really believe that from that effect the cost is taken over. And when the regulation is there and the cost is taken over, you have exactly what we do with smarter - you have a free asset, and then we can concentrate on the first cases. I don't believe in the short term in the full arbitrage

1:15:17 business, because the OEMs have a huge battery durability problem. And the problem is not the lifetime guarantee - yes, it's the guarantee - it's not the problem that they cannot build them. But you have always these 4 points: it's weight, it's charging speed, it's cost, and it's durability, and you can never have all 4 at the same time. So always when you go more toward fast charging, you have a bit less durability or a bit less cost - so all of the chemistries

1:15:46 that they have: always when you go more in one direction you have a bit less of the other. And they all get a bit better all the time, but still you always have this trade-off - to say, OK, what do I want for my vehicle model. And on top they have the problem that they have 3 to 5 suppliers which bring out every 3–4 months a new cell model, so they have in the same ID.3 - I don't know - 1,000 different battery cells

1:16:12 over 10 years. And all of them they need to guarantee for the full 160,000 kilometers, 8 years. It's easy to do so for 90% or 80%, but unfortunately with guarantees, Pareto doesn't work. For guarantees you need to have 99.9% or something, otherwise you lose money, because recalls and taking the cars back and replacing batteries and so on is super expensive. So there is this cautiousness, and I can understand this. That destroys a lot of business cases, let's say, on the arbitrage

1:16:44 models. But where bidirectional charging can be super powerful is, for example, FCR. It says, for example, helping grid operators - for the people that are not deep in the market - you can sell the capacity, the possibility of getting activated, to grid operators, and you get paid for not doing anything. So you get paid for just being available, and this availability has a huge value for the energy system. And if we have a lot of bidirectional chargers or cars connected to the

1:17:13 system that get paid for just being available if the system needs them, we don't need backup power plants anymore. We have at the moment, I don't know, 3–4, 10 gigawatts or something in the German Netz reserve. All of this you don't need anymore if you have all of these cars connected to it. So I believe rather in this - I don't know - 100 activations maximum a year, perhaps even only 20, something like this, really for the peak of the peak. But Dunkelflaute,

1:17:41 6 in the evening, 10 times a year - that's a perfect case for the next era of bidirectional charging. And just for the listeners again: this bidirectional, often in the jargon, is AC or DC. What it really means is that the inverter in the car, which basically converts - or inverts rather - the DC battery into AC usable from the grid, that can happen either in the car or at the charger level. And if it's in the car, it's called

1:18:10 AC for some reason, and then if it's in the charger it's called DC. Because through the cable runs either AC or DC, so either the AC comes into the car. What you do with slow chargers - you have always in the car, and this is also the reason why I really believe it should be in the car - because you have already power electronics. It's diodes, so they are not bidirectional yet, but still, you

1:18:36 have already this onboard charger. It costs something like €300, and for making it bidirectional it costs something like €350, so the costs on top are really not that big. The problem is when you need to make this decision, of course, for 30 million cars on the platform, that becomes significant - these €50 - and car manufacturers are calculating on the cents per screw, because it's really every little cost times 10 million. It's big, but still. If you

1:19:07 pass the €30, €50, €80, whatever it is, in your onboard charger through as a business model - like vehicle-to-load, like emergency power - and you have it inside, then you have nearly no additional cost anymore in the chain, and people like us could just access it through digital solutions. The problem is if you go the DC road: yes, you have zero additional costs in the car, just some software development - they have done it, so it works. They have no additional

1:19:35 costs anymore, but then you need a quite expensive wall box. An AC charger is nothing more than a plug with a bit of security and software in it - it's a little microchip, it's a plug - but a DC charger is completely different. It's more like a solar inverter, but more complex. A solar inverter is way easier to build; you have certain other aspects, but with vehicle charging you need to

1:20:06 disconnect the vehicle from the grid, and that makes it more expensive because you don't get the volumes. The same hardware that costs in the car €300 to €500 costs you €3,000 to €5,000 because you don't have the volumes. And on top - what is not to forget - you need specialist people to install them. Electricians are super expensive. Grid operators want different certificates, and that process is super expensive. So for me it's really crucial which

1:20:37 side we go to. I know China goes a completely different way - they don't even have an onboard charger in a lot of cars; they go completely DC. That's another situation when you go down that road. But in Europe, as we have AC chargers everywhere and we will always have onboard chargers in next year's cars, I really pledge to say - like they did it with Renault, putting the bidirectionality in the car. The issue I see is that indeed the

1:21:04 trend is not yet certain. There's even more work still on DC than on AC, because on AC it is way easier - it's just a software upgrade - and especially the grid codes are, as far as I understand, problematic. You need to apply to all these different grid operators. The commission would see this as one of their most important problems they could solve in months, and then we could, backwards looking, with a software upgrade, do

1:21:33 it through all the chargers. The physical charger that is built now in the car has capabilities of handling the most severe grid code on the European market, which is not much more cost than a lower capability, because they can react in microseconds or milliseconds - it's far enough for everything that the grid needs. So if you have the physical hardware built into the car, then even when the regulation comes only in three years

1:22:04 you do a software upgrade and then it's interoperable throughout Europe. But when you go the DC way, you still always have this expensive charger - you have nothing in the car - so you need to hope that the user pays so much money, but there is no business case. I haven't seen a business case on paper that says: OK, I build now a €5,000 bidirectional DC charger and I have a vehicle-to-grid positive business case, and

1:22:27 there's still also the hurdle software-wise: ISO 15118-20, that's the standard communication protocol between chargers and vehicles, right, for being able to use - should we have then the AC setup that we just discussed - this also is a requirement for bidirectional charging, right? Well, it's a requirement because we want to make it a requirement. If we didn't have different grid connection codes and we would just say: this is the European grid connection code, and this car is in Europe - because they are just different cars with

1:22:58 different specs for security reasons. Cars are different in Europe, in America, and in China, so you know that the car is in Europe - it's produced for the European market. So you could hard-code in this car: this is the European grid code, and as soon as you get connected to the grid, this is what you need to follow. So then, if we would put the regulation in that way, we would not need any communication in ISO 15118, which

1:23:27 defines which grid code curves you need to follow, because it is just in the car from the setup. And therefore we are stuck always in the same discussions. In Germany it cannot - it will never be scalable if 950 players put a PDF somewhere on the internet with a different cos phi curve. All of them have 0.9, but you are not sure, so you need to go and search it, and

1:23:58 then you need to program it as an electrician locally. But if we just say it's 0.85, which is more severe, but it's just applicable for the whole of Europe, and this is the curve that needs to be followed - even not 0.85, but a curve from 1 to 0.5, whatever, depending on what the grid does - and you measure it in the onboard charger, which it anyway needs to do to make vehicle-to-load work. In a vehicle-to-load scenario, the onboard charger needs to measure all of these flows.

1:24:24 So it has the capabilities of doing so. We don't need any additional capabilities in the charger if we want to. But grid operators are lobbying against it. The regulation is not set up, but it would be nice to see some OEMs - and Renault is starting it now - to say, no, we go in front, we put it in the chargers. Here's one scenario where it works, in one country where it works, but we put it in every car because

1:24:52 they put it even in the car that is sold to Germany, even when they know the next three years there's no business to make in Germany. And this is brave, and I would love to see all of them going there. That's a brave movement. And then we would get - let's be optimistic - assuming that many take the brave move, what's your most optimistic timeline for these things to be done? Well, 'done' is always a question, right? We have seen it

1:25:20 now it works, it is applicable. I think it will grow. It will grow exponentially, but coming from a really low, low, low point, and we know how slow these platform developments are and how long they want to keep them in the market. And in that one regard we will not see a lot of innovation coming from China, because they have a completely different technical setup there and the OEMs cannot play a big

1:25:55 role in the energy market in Europe. And therefore I'm not that optimistic, but I really believe that by 2030 bidirectional charging will be there, in every car.

1:26:10 Has it at least a DC road, but even AC-wise I think a lot of cars will have it built in. And then, finalizing - on a completely different note, but I find it entertaining and maybe it could also be an interesting topic - so I'm also, you know, into James Bond and these types of movies where you always have some interesting intrigues. I saw recently that - I think, I

1:26:39 think it was Jakob or your dev page - you posted about theft being an issue right now in EV charging. So maybe you can share some insights on who these people are, what type of gangs are trying to game the system, and what needs to be done, or what the MSPs are doing to prevent this type of thing from happening. Yeah, I can - I can of course not go

1:27:09 into full details, because the problem with fraud is that if you put your solutions out in the open, people will find the loophole and will then continue doing so. Fraud is a big issue in the whole industry. The problem is that you have really low margins on the MSP business, and most of the business cases are just barely positive - or most of them actually negative - and they do it for

1:27:37 other purposes, so they cannot afford to lose even more money. And what is happening is that there are two major different ways of doing fraud. The one is we have unfortunately, 15 years ago, chosen a really weak technology with the RFID cards, which is just a simple identifier saved on it and it's also saved on the charger, and as soon as they detect it they allow charging. It's really a pity that we have not

1:28:09 gone more into NFC or other protocols that are used in the banking industry, because these cards are super easy to copy - you can buy a system on Amazon and you can really copy the code, and you can even do this over long distance. So at one point somebody finds a code, sends it over, and unfortunately - without wanting to be racist - there were a lot of cases in Bulgaria and Romania. That

1:28:38 they then use for certain hours or days. A lot of people use the same code on their local devices that mimic a card, and then they do as many charging sessions as possible with a stolen token. Then the token gets blocked, they get a new one, and there's apparently a black market where you can buy a token for some euros and use it for a certain number of sessions. That was the one direction where we

1:29:05 have quite a lot of measures - like some clients just shut down certain countries, some clients don't allow virtual tokens anymore; for example, you need to have a physical address in your country to be able to charge. And especially for this copying, we detect whether it is physically possible - for example, if you have two sessions at the same time we block them, if you have 1,000 kilometres in between we block them. So there are certain

1:29:37 measures, like if you're charging way more kilowatt-hours than you have stated your vehicle has. So there are certain measures that we detect automatically, and we're putting in a new measure every few weeks to detect the fraud and to block the tokens as fast as possible. And the second issue is that unfortunately a lot of our clients don't use physical tokens anymore. They allow virtual tokens as well, so you can just through

1:30:05 the app, create an account, and then you can start sessions through the app. And it is of course easier to create fake accounts. You have Revolut that gives now credit cards - everybody thinks a credit card and banks with European law have certain know-your-customer rules, but apparently with 5 clicks you can have now a virtual credit card on Revolut, and you can use this virtual credit card to create a virtual user on an MSP and you start with

1:30:34 a virtual token, a session. And you put 1 euro on this account, so the whole know-your-customer or whatever first checks work because it is an official account, but there's just no money in it, and then you do some fast sessions. When you have a lot of MSPs they charge only once a month. You have done 1000 euros of charging and then the account is still there and you create a new account. So this is the

1:31:04 second kind of big fraud issue, where we go now - a lot of customers go now - with pre-authorization, taking at the beginning, for the first 6 sessions, blocking 50 euros on your account. Then they realize, OK, it is not there. But we still, as the industry is quite immature, we still have a lot of chargers, for example, with physical tokens that are saved locally on the charger in a huge token list, and then

1:31:40 they accept the charging and they send us only a day later - oh, there was a charging session - so we don't know about it, so we cannot block it. Of course then we can send to all of them, please don't allow this token anymore, but it could still be that a future session has already happened. So we have both places: we have legacy systems, quite a lot of them, but also we have, apparently, organized groups that

1:32:07 really choose the weakest. For us as a platform, they always search for the lowest resistance - like fraud always goes to the weak players, and there are a lot of weak players in this industry. So what we need to ensure as a platform is that our customers are not the weakest player. And that somebody else is weaker and they go there - it has a double positive effect: our customers don't have

1:32:35 fraud, but also our competitors' customers search for new solutions. I know it's bad, but it's how the market works, and we want to stand apart, in really close collaboration with our clients, to solve these fraud issues. But it must be said as well: like in every business there's a certain percentage of unpaid bills. I think even if you have the best customers, you always have some people that you need to do some debt collections and some process and some

1:33:03 reminders. But it's not real fraud, it's more like unpaid bills. What we just spoke about, especially in 2024, it erupted throughout the whole industry, and it needs to be solved. Good that you're tackling that - quite challenging times. And then lastly, to end on a positive note, there are a lot of challenges, also macro challenges - see the US, where strangely the electric mobility is being attacked,

1:33:40 if you want, from the very top. Including Elon Musk, which I'm very surprised that he would support a government that is obviously against e-mobility. And not only there, but also governments like here in Germany or elsewhere. There are challenges here and there, like the fleet emissions standard in Europe - I think just yesterday or the day before the ambitions were reduced. It feels like e-mobility and sustainability and renewables and energy transition, the

1:34:13 topic of this podcast, is being a little bit attacked from different sides. What gives you hope, and what's your biggest hope for the next, let's say 1 or 3 years, that you can achieve? Yeah, my hope comes from a bit of pragmatism, I would say. When you look at what we have done in the last 20 years - since 2008 when the PV boom started, kind of - and since 2015, it's less

1:34:45 than 10 years that the EV boom started. Nobody - humans are always good at forgetting the standpoint of the past - and it's really bad, but it is way better than we expected 15 to 20 years ago. And with this "bad but better than we thought" argument I would like to end the podcast, because we have put this artificial 100% decarbonization target for 2050. I'm a Pareto-principled person, so we should not focus on the last 20–30% now, we should

1:35:29 focus on the other 80%. And if it's then at the end of 2025 but we have a really sustainable solution, that's also fine. What is important now - and this is what gives me real hope - it doesn't matter who is president of the United States, it doesn't matter who is the Bundeskanzler in Germany, because we have seen with leapfrogging that countries like Pakistan, Nigeria, and so on are going decentralized. They see it's just the cheapest way of producing energy. It's booming in all third-world

1:36:01 countries. They will not go the coal way anymore. They will just go directly to decentralized solar and wind. I did it in telecommunications - leapfrogging exactly - and the same happens at the moment with batteries. Batteries are so incredibly cheap. Therefore, also here: please, grid operators, stop putting these big 500–600 billion euro plans to build more grids. Put batteries, let us put batteries everywhere, they will solve so many problems in our system, and they get cheaper every day. We have never thought 5

1:36:36 years ago that they could ever be so cheap, and in 5 years they will be even more cheap. And so with this, just about this, and thanks to China actually - it's not thanks to the German solar industry that we have this boom, it's thanks to China taking over at scales that we would have never thought possible. That somebody can produce 200 gigawatts or 300 gigawatts of solar, and now going the same way with battery cells, and thanks to this incredible manufacturing

1:37:01 capabilities of China, there's no way back. You saw it under the first Trump era: there were never 4 years where America decarbonized more than those 4 years. There's never been more coal plants being closed because they just cannot compete anymore with the other solutions, and this will be the same with e-mobility. It's a bit harder, especially in a country like Germany where it's nearly like a religion to drive at 250 on the Autobahn. But for

1:37:29 the normal population, it makes sense at one point. People who are negative about e-mobility have mostly not driven one. Once you drive one and you drive it for some days, you're like, OK, that's incredibly nice to drive. I can charge at home if I have a garage. I, for example, don't have a garage. I only charge in public, but I have free parking in the city center. It's amazing. We drive to the city center, I see beforehand if the parking is free - mostly, sometimes there are

1:37:57 bad people blocking it, but mostly I see, OK, two places free, so I have my parking. I don't pay for parking. I charge in the meantime. It's not stoppable. That wave is not stoppable. And if we are 2 years later than we thought, it doesn't matter in exponential curves. The result is it's just unbelievably fast how it's growing, and that makes me super positive. We are in the middle of an incredibly exponential curve on both solar, wind, and batteries and

1:38:28 e-mobility, and this will change the world of energy in the next 10 years. Yeah, very cool. And just on a side note, to end as well - yeah, I'm also very enthusiastic about this huge investment that China has been doing with all these solar systems and batteries and EVs now, and instead of criticizing that all the time and saying, hey, why are they investing so much in the technologies and we have to compete against this

1:39:02 big investment - let's also invest in doubling down on the effort here in Europe. If, as I and you definitely do agree, that's the future, then let's invest in the future instead of criticizing those that do. Yes, and also why are we singling out the solar industry when the clothes industry, the phones, all the televisions, most of even our machines at home - everything comes from China or from Southeast Asia because they're just way better in manufacturing: cheaper, better

1:39:37 quality, and in really big volumes. We have lost all of these industries from here and it was OK because they just got better and cheaper, and therefore for us all as consumers that was fantastic. But then we import 100% of our oil and nowadays all of the hard coal as well and all of the gas, but then on the solar cells we look very critically at China. I'm like, why? There's even no natural

1:40:05 dependency - when they make the prices higher, somebody else puts up mass production because the technology is available throughout the world. We know how to build this. So if they increase the prices, we stop buying from them for a year and then another country puts up a huge production, as India for example is doing. And then we still have it. It's not like they sit on rare earth, for example, where there's a problem, but in solar manufacturing they bring the cost so far down

1:40:31 they're competing with each other, and even if they put subsidies into it, it's great. Let them put subsidies on the manufacturing and give us super cheap electricity for the whole world - to the last desert place in Africa that can now afford to have light and electricity. That's a good thing. We should focus on the good thing, not on the negative part of this. Well, with those last few words, thanks a lot, Michael, for joining the podcast and best of

1:41:01 luck with the upcoming projects. Thank you very much. Thanks, Claudio, for letting me come here and speak. Sure. Wow, that was fascinating with Michael. I learned a ton. I hope you did too. For the first time we had a deep dive into the smart charging dimensions. We went a bit longer than usual, but I think we really got a lot from his background and how an OEM like one of the 2nd largest in the world thinks, and how these types of

1:41:32 players are in the charging market alongside the breakdown with the CPOs, the MSPs, and CPMSs and all this jargon. We covered a lot of ground to understand the differences between different countries and opportunities today and in the future, especially in bidirectional charging - considering grid codes, technological differences, and then all the way to practical examples and what makes that power offering unique. Yeah, I had a blast learning all of that. And then the tremendous fraud going on and all the creative

1:42:12 ways people managed to always think of to deceive, and then you need to play the cat-and-mouse game and all the good ways as well to block and combat these frauds happening today. And then especially ending on a positive, cool, optimistic, hopeful note - I love Michael's optimism, and I also double down on it, even if some people try to challenge the future and don't see all the benefits of less pollution and tackling the

1:42:48 Climate, global warming - that will have tremendous consequences, and already most people are already faced with these consequences. And not only doing it for avoiding all these negative consequences, but also seeing the opportunities of so much cheaper mobility and energy that is yet to come in this transition, coming from the challenges of this transition. Getting there will be amazing, and this is - we're in the middle of it, and let's remember all that we have achieved

1:43:23 already. The best is yet to come, and on that note, stay tuned for the next episode and thanks for listening.