Show notes
In this episode, I discussed swappable, rechargeable batteries in two-wheeled electric scooters with Horace Luke, the CEO of Gogoro. Luke’s company is selling subscriptions to batteries in bustling emerging-market cities like Taiwan. We talked about consumer requirements for swappable batteries, the other kinds of technologies that might use them, and his plans for expansion.Full transcript of Volts podcast featuring Horace Luke, April 22, 2022(PDF version)David Roberts:Electric vehicles are all the rage these days, but at least here in the western world, most of the attention has focused on four-wheeled passenger vehicles, first Tesla and then all the companies trying to catch up with Tesla. However, across the globe, more than 50 percent of commute miles are undertaken on two-wheelers — scooters, mopeds, and the like. China, India, and Indonesia alone contain more than 500 million two-wheelers; anyone who has visited big cities in those countries has seen the vehicles swarming the streets.And they are dirty as hell. Their two-stroke motors emit as much as five times the pollutants of the average new car in the US. Millions of people have died from two-wheeler pollution, to say nothing of the climate impacts.But two-wheelers are difficult to electrify. Their owners tend not to have extra cash; theft is a constant danger; and urban density makes plugging in, especially in a place sheltered from the elements, difficult.Today’s guest, Horace Luke, set out to solve this problem with his company Gogoro, founded in 2011. The idea was simple: consumers would own the scooters, but Gogoro would own the batteries, which would be made available in stations across the urban fabric, such that riders could easily find one to swap. Consumers would subscribe to the service, effectively ensuring that they would always have a charged battery available. The company took a different course than he expected — Gogoro ended up building its own scooters, stations, and batteries, doing far more hardware than the software-minded Luke had originally envisioned — but his persistence won out and the model is taking off, preparing to expand from Taiwan (where it started) to a range of other burgeoning megacities in emerging economies. It’s a clever model, a mental shift that opens up all kinds of new possibilities, so I was excited to chat with Luke about the problem of two-wheelers, the consumer experience of subscribing to Gogoro, and the other kinds of things, outside of transportation, that cities might be able to do with thousands of distributed, swappable batteries. So without further ado, welcome, Horace Luke, to Volts. Thanks for coming. Horace Luke:Thanks, David. David Roberts:I'm so taken by this whole idea. Tell us a little bit about the problem of two-wheelers: where they are, how dirty they are, and how big a part of the climate problem they are.Horace Luke: Most of the people in the audience probably don't realize that more than 50 percent of all commute miles done globally every day are done on two-wheelers.While we in the United States look at it as more of a recreational or very short-distance commute, in the East – Vietnam, Thailand, China, India, Indonesia – you can't cross the street without being hit by one if you’re not careful. They're just everywhere. In China, India, and Indonesia alone, there are more than 500 million two-wheelers roaming around every day – taking people to school, to work, to the market. They are the absolute utility dependency vehicle that people look for when they're moving around town, and people on average ride somewhere between 300-700 miles a month. Unfortunately, because of the economics of it, the chance of them being clean is not very high. When compared to a gasoline vehicle in, let’s say, California, there are five times more pollutants coming out of the tailpipe per kilometer, easily. On top of that, you have people not using premium fuel and other carelessness that makes owning a two-wheel vehicle extremely polluting. On top of that, they're usually being used in densely populated cities where thousands of people are living on top of each other. If you're walking down the street, you can definitely smell them, you can feel the heat from them. It is a central problem that we need to solve.I grew up on the west coast of the United States. I worked for Microsoft, where I was one of the original founders of Xbox, then eventually was fortunate enough to lead the Windows XP user experience and product experience side of the business. Eventually I moved to Taiwan, where I worked for a company called High Tech Computer (now HTC). I created some of the world’s first Android phones – the T-Mobile myTouch, the Verizon Droid – and was pretty successful there. At age 40 I was traveling around Asia, thinking, “I made that company number one in the world, shipping 43 million phones a year – now what? As the world is moving to 5G and then to 6G and beyond, is that really the end game? Is human computing to make humans more efficient and more productive really the way of the future, or is sustainability?” So I picked sustainability. I think that this is the decade of sustainability. Mobility plays a huge role within that, and trying to figure out how to get the eastern hemisphere to adopt electric was the essential problem that we needed to solve. With Gogoro, we did that. David Roberts: So cities are choked with these two-wheelers, which have some of the dirtiest engines possible, and you're trying to think about how to solve this problem. One way would just be to go electric, the same thing we've been doing with cars. Why isn't that the intuitive solution, to make electric versions of these scooters?Horace Luke: In most areas of the world where two-wheelers are massively adopted, people live in stacked apartment buildings. Thousands and thousands of people live on top of each other, and these vehicles are being parked on the side of the road in a very ad hoc kind of way. You've got nowhere to park, so you really don't have a solution for nighttime charging. During the daytime commute, some technologies are emerging for fast charging – something like 10-15 minutes for about a 50 percent charge. Maybe that's doable, but in a two-wheeler, you don't have the comfort of a sofa, you don't have a stereo system, you don't have an environment where you're protected against the natural elements. If you're in line in front of me and somebody else is in front of you, we're talking 30-45 minutes exposed to rain, to heat, to sun. That just makes it almost impossible. Plus there’s the economics of it. You've got batteries, you've got a fast charger – now you're trying to figure out how much the vehicle actually costs. By removing the battery from that purchase equation, we help the user adopt the electric solution much quicker. Instead of buying the battery and charging it yourself, you stop by one of our GoStation battery swapping stations and just swap out the battery.David Roberts: Back in 2011 when you first started Gogoro, did this vision – that you take the battery out of the scooter and make the batteries interchangeable, a quick swap rather than having the consumer own the battery – just come to you in a flash? Is that what the company has always been about? Horace Luke: The company has always been about that. We started the company with 27 desks; we were thinking that we were a software company helping to create the algorithm and efficiency of swapping and managing these batteries. One thing we knew was that how and when you charge the batteries is very important to managing their lifespan. If you're starting a company thinking about sustainability, it's not about greenwashing or riding the electric hype – it’s about how you take the resources and minerals that are out of the ground today and extend the lifetime of use for as long as possible. That's the thesis from which we started. Then we were looking for people to build the vehicle, build the motor, build the station, etc. To be honest, it sounds like a broken record – a lot of companies start very small and eventually find out “hey, that's something nobody can do, so let's go do that.”Now we're fully stacked, we build our own smart batteries. We took the technology that we did with smartphones and we turned it upside down. Think of our battery as a smartphone that doesn't have a big screen on it. We took the ability to update and wirelessly connect and created perhaps the world's most powerful little battery that can power two- and three-wheelers.David Roberts: So you eventually got into making the scooters, the batteries, and the battery banks that the batteries are stored in, just because you couldn't find anybody else to do it any better.Horace Luke: Absolutely. I have this policy in our company where you ask twice, and if you ask three times, that means that you should have done it yourself. The first time you ask somebody “hey, can you help me with this?” and they're like “no, that's kind of impossible,” then you go to the second guy. And if they say, “you’re crazy, you can’t make that happen, that energy density is not something we can do” – if our science and our math work out that you could, we try and do it ourselves. So we built the world's most powerful and dense small, compact motor for mobility today, a tiny little motor that powers about 7 kilowatts, about 10 horsepower. It's a replacement of the popular 125cc or so. We've got our own batteries, we've got our own station, we even design our own charger. We subcontract out the bidirectional inverter that's in our station today. We even geek out on tires; a lot of energy is lost on tires. I sit down with the team to look at the compound of the tread pattern, the profile of the tire, so that we can save energy on tires to go as far as we can go. We're a curious bunch that just want to make electric mobility a possibility in these big cities.David Roberts: If I'm a citizen of Taiwan and I need a scooter for my business or my personal life, what is the consumer experience like? What do I do, where do I go, what do I sign up for, what do I buy?Horace Luke: By the way, in Taiwan, there are 14 million two-wheelers on the ground for a population of slightly more than 22 million people. If you don't count old and young people, you literally have a vehicle per person.Before 2015, when we launched our first vehicle, electric solutions were less than 1 percent of the overall sold in Taiwan. (In comparison, Tesla in the United States is about 3-4 percent.) We ended last year with about 26 percent in Taipei; in the overall market, we're somewhere between 12-13 percent. What's amazing is that our battery-swapping system accounts for 90-95 percent of all the electric vehicles. So we not only grew the market ten times, but at the same time we became the de facto standard when it comes to people adopting electric. That’s because we partner people not only with our own brand vehicle, but also with Yamaha, Suzuki Taiwan, Aeon, and PGO.David Roberts: So if I'm going to replace my vehicle with an electric and I want to use the Gogoro battery system, I have different brands of scooters to choose from that can all accommodate your battery.Horace Luke: Yeah, not only brand but design and functionality. Think of us as the Android of EV, or the Windows and Intel of computing. We're 47 different models across 10 different brands, so lots of shops around town.You choose the horsepower and design you like, you choose the form factor, you choose the brand, because at the end of the day each has different performance and different affinity to the brand. You buy the vehicle, and then you subscribe to our battery swapping system. The subscription is kind of like a mobile operator plan, for those of us who are old enough to remember those. You used to have fixed minutes and fixed messaging; you buy the bundle pack up front and the more you buy, the less you pay for overage per minute or per message. Same thing with us. We have plans ranging from all-you-can-ride, where you pay and you can go crazy and ride all you want. Or you can buy a little bit, start with something like $10 and about 60 miles, and then anything more than that you pay per kilometer on overage. The more you pay up front per month, the more you get. We even have carryover miles, just like you had carryover minutes. We apply the mobile operator model to battery swapping usability.David Roberts: If you translate it into American dollars, what is an average monthly fee?Horace Luke: The average monthly fee starts from about $10. You get about 60 miles, or 100 kilometers, and for every kilometer (or 0.6 mile) overage, you pay about three pennies or so. Then you find yourself snapping to the next plan, which is about $16-$17, and for that, you get a little more kilometers on a pre-bundle. And you just keep going up on the mileage.David Roberts: So I've got the subscription, I'm riding around with one of your batteries, I'm getting low, I look for a battery bank – what do these things look like? What's the user experience of swapping a battery? How long does it take? And how common are these battery banks, how easy are they to find?Horace Luke: In Taiwan, we've been going at this for almost seven years, and we are now at about 2,200 locations. In the metropolitan area, we're more dense than gas stations. By the end of this year, we will definitely have more locations than there are gas stations across the island. We have slightly more than 11,000 cabinets. Think of them as ATM machines or vending machines. We put them in places like convenience stores, cafes, universities, train stations, bus stations, supermarkets. Instead of gas stations, where you need a huge plot of land with a safe circumference around it, we can place them underneath your apartment building, wherever is most convenient for people.David Roberts: They're common enough that if I'm running low, there's probably one close by.Horace Luke: Literally, you're within a quarter mile from each one. The average distance that our consumer rides is about 40-50 miles, so they swap maybe every 3.5 days or so. Range-wise, we’re about 60-70 percent of gasoline vehicles, but with a lot more convenience than the gasoline vehicle. We can swap out batteries in less than a couple of seconds. But when we do that, people think our system is broken, that we didn't do the bill right or we spit out the wrong battery.David Roberts: So I lift up the seat, I pull out the battery, and I put it in one of the empty holes in the bank. When I put it in, does the system know it's me somehow? How is it tied to my account?Horace Luke: We wanted to make that user experience as seamless as possible. One of the things that we absolutely needed to do is to make it so much better than gasoline from a user experience perspective, so that people would want to switch over. So no credit card, no phone, nothing needed. You put your battery in, and because our battery has NFC on it, it carries your credentials – who you are, how many kilometers you’ve ridden. You put your battery in and it calculates whether you paid your bill, how much is needed for this time, how you rode and how much energy you used, then picks the right battery and spits a new one out for you that is fully charged. That battery is then programmed for you. So if I stole your battery from your vehicle and I put it in my vehicle, it won't work. The security system is tied to you. Essentially, you can feel confident having these expensive batteries in your vehicle; it won't be stolen because it just simply doesn't work. A stolen good is no good if you can’t…
Full show notes at the publisher