PowerTap’s Raghu Kilambi explains why battery EVs are ‘impractical for long-haul trucking’

PowerTap Hydrogen Corporation CEO Raghu Kilambi joins Yahoo Finance Live to break down why battery electric vehicles are impractical for long-haul trucking as well as discuss how a fuel cell future will impact companies long-term.

Video Transcript

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MYLES UDLAND: All right, it's infrastructure week here at Yahoo Finance. We're working on rebuilding America. How Joe Biden's policies could reshape the future of infrastructure here in the US. Let's talk a bit about what's been a really hot space in the investment world over the last year, and that is renewable energy. One company, working not on electric power, but on hydrogen power, is PowerTap Hydrogen. And their CEO, Raghu Kilambi joins us now to discuss.

So, Raghu, thanks so much for joining the program today. And I'd love to just start with where you guys sit in, what I've been calling, kind of this renewable power stack that continues to get built out here. We have so many different options, technologies, levels of viability at this point. So where is hydrogen power at in its life cycle of becoming a mainstream source of powering vehicles?

RAGHU KILAMBI: First off, thank you very much for having me on your show. PowerTap is focused, actually, on hydrogen fueling stations, which is the major shortfall in the current infrastructure in the United States. There are under 100 fueling stations publicly available in the USA right now. There's 25,000-plus battery electric vehicle stations and over 100,000 gas stations.

In terms of hydrogen fuel cell vehicles, there are cars on the market right now. And certainly in California, where our company is based, the Toyota Mirai is on the market. It is selling, and there's a shortfall of stations. But our view from a PowerTap's perspective is that the bigger opportunity is in the long haul 18 truck market. A lot of the major OEMs including Toyota, Daimler and Volvo, Hyundai, and then Nikola Motors, have announced long haul trucks that are coming on the market. And there's a distinct advantage in terms of long haul trucks having hydrogen fuel cells versus diesel, which is the incumbent, and certainly battery electric vehicles, which most people in the market don't view as being viable for long haul trucking .

And so we're partnering with existing gas station and truck stop owners to install our PowerTap stations starting in 2021. We announced our partnership with a station group owned by Mario and Michael Andretti of the auto racing fame. They own over 100 stations in the western United States, and they're our first partner. And also, we'll be distributing our technology to existing gas stations and truck stops.

BRIAN SOZZI: Raghu, I am interested in your comments on the long haul trucking space. Tesla's supposed to come out, or start making their first electric semi truck later this year. To me, it seems viable. Why wouldn't it be viable?

RAGHU KILAMBI: It's our view, of our team and other people within the industry, that the time to recharge batteries in their current technology, and also the size of the batteries that are needed for long haul trucking, don't make it commercially viable. That being said, you never want to bet against Elon Musk. But our view is, within the industry, that we really see challenges in the near-term. We're not saying forever, but in terms of vehicles that'll hit the market in the next couple of years in large scale, hydrogen fuel cell based long haul vehicles, it's in our view the [? nearer ?] opportunity. In addition, Tesla just announced, in terms of their semi, that they have further delays due to raw material issues, which is a major issue right now for battery electric vehicles. Some of the raw supplies that are needed to make BEV batteries.

JULIE HYMAN: Raghu, it's Julie here. We have heard a lot of promises from the incoming Biden administration-- before they came in, and now since they've come in-- about the investments they're going to be making, in infrastructure broadly, and green infrastructure, specifically. How is that going to help you, and what kind of capital are in their plans to deploy to various types of energy? How much is going to go to something like hydrogen fuel cells?

RAGHU KILAMBI: Well they haven't come out-- The Biden administration has not come out with the exact dollars, but in his policy that he put out pre being elected, he did talk about battery electric vehicle and hydrogen infrastructure, and a capital spend. Now that John Kerry is his energy czar, we're waiting at a national level to hear what they're going to do.

Our commercial launch will be first in the state of California, which has put excellent incentives in-- carbon credit and other incentives in-- to install hydrogen stations, and finally be able to generate cash flow, even prior to the hydrogen trucks or more cars hitting the market. And we're hoping that other states and the US federal government will follow suit to allow companies like ours to participate in the hydrogen highway.

BRIAN SOZZI: You know, let's say we do start to build out more of these hydrogen refill stations, which would obviously be good for your business, but how would it help improve the country's infrastructure?

RAGHU KILAMBI: Diesel is a huge carbon emitter right now. And so, from our perspective, having a fuel whose exhaust is water-- which is what hydrogen is when it runs through a hydrogen fuel cell-- versus diesel makes sense in terms of helping being good corporate citizens. And major long haul truck players who own a lot of trucks-- Anheuser-Busch and UPS-- have made announcements that they're planning to transition their fleets from diesel over to hydrogen. And so we believe that will come in the coming years. They'll get their own government incentives. They have their own pressures from their shareholders right now, in terms of their EF strategies. And so our plan is to build the stations, and we expect the vehicles to be coming in the next couple of years.

MYLES UDLAND: All right. Exciting times in the renewable space all around Raghu Kilambi is the CEO of PowerTap Hydrogen Corp. Raghu, really appreciate you taking the time to talk with us this morning.

RAGHU KILAMBI: Thank you so much. Have a great day.