The coronavirus pandemic may be crushing the electric vehicle market for 2020, but Amply Power CEO Vic Shao doesn't see that as a threat to the trend of fleet electrification.
On Tuesday, he revealed a data point that bolsters that argument: His fleet-electrification startup managed to raise another $13.2 million despite the ongoing lockdown and tumult in the markets. Conversations for the round started at the beginning of the year, but the global slowdown did not derail investor interest in the company, Shao told Greentech Media.
The round brought in Soros Fund Management, a massive private investment fund that typically engages in much bigger deals than early-stage cleantech investment. Legacy electrical equipment giant Siemens joined the round, as did investors from the $3.8 million Seed Round: Congruent Ventures, PeopleFund and Obvious Ventures.
After founding and selling commercial energy storage startup Green Charge Networks to Engie, Shao launched Amply to handle all the grid-related complexities for customers that want or need to electrify their fleets. Those tasks range from scheduling charging sessions to dodge demand charges and peak electricity pricing, to handling the design and installation of charging equipment in the first place.
The business-to-business focus could insulate Amply from the unanticipated drop-off in demand for electric vehicles this year. Wood Mackenzie predicts the global EV market will fall 43 percent compared to last year, a stunning turnaround from the trajectory before the coronavirus pandemic.
Consumers don't typically have a strict timeline for when they need to buy a new car, Shao said. If everyone is home and not driving, or the economic recession has them concerned about cash on hand, individuals can simply hold off on a purchase.
Fleets operate under a different set of principles; their total cost of ownership is a carefully calibrated business expense, not a personal choice. Bus and passenger fleets have schedules for when old vehicles need to be replaced.
"While consumer buying of passenger cars may suffer, it won’t be the case for fleets," Shao said. "Fleets will continue to take advantage of the situation and get better pricing from auto [original equipment manufacturers] to continue to refresh their fleets with new cars."
Not a "winner-take-all" market
Amply's new capital will go toward expanding deployments beyond the early market of transit agencies — like Northern California's Tri Delta Transit, which recently reported 40 percent monthly power bill savings from the service.
Target segments include schools, passenger fleets and last-mile delivery, Shao said. For instance, California's Department of General Services issued an order in November banning public agencies from buying sedans that are "solely powered" by internal combustion engines. Electric utilities also use passenger sedans; electrifying those with the utility's own power could deliver substantial savings relative to buying gasoline (though heavier-duty bucket trucks will be harder to electrify).
A few other startups are tackling the fleet-charging-as-a-service concept, but Shao said there is ample room for them all.
"We’re just heads-down, laser-focused on execution at this point," he said. "There is plenty of market opportunity for everybody — it’s not going to be a 'winner-take-all' kind of situation."
Much of the innovation around fleet charging has taken place at startups, some with the backing of incumbent energy equipment providers. Amply now counts Siemens as an investor; Schneider Electric is backing a startup called eIQ Mobility. There's a potential symbiosis with these veteran companies: If fleet charging startups succeed, they could drive more business to the charging equipment manufacturers.
"If Amply, as a services business, is successful and innovates and scales, it will help the hardware companies like Siemens to really scale their own initiatives as well," Shao said.