Ep 14: Electric dreams: The growth story of Octopus Electric Vehicles

Thanks for listening to Inside Octopus. My name is Russell Goldsmith and in this episode we are talking all things EVs. We are actually recording on location at Octopus Electric Vehicles offices in Weybridge. For the first time in the series we're actually filming the podcast too so at some point you may be able to watch us on the OEV website as well. I'm thrilled to welcome to the show from Octopus Electric Vehicles, their CEO Fiona Howarth, along with Claire Miller, Director of Technology and Innovation. Welcome to you both. Fiona, let's come to you first. This is the first time we featured your part of the Octopus Group on the podcast. Tell us a little bit about OEV. Yeah, hi Russell. Well, this is obviously a pleasure to be on the Inside Octopus Podcast. We are Octopus EV trying to make it easy and affordable for people to make that switch to electric vehicles. When you look at overall emissions in the UK, almost a quarter of emissions are from transport and actually a significant portion of them are from our roads. Significant of that is cars. So the more that we can switch our cars into clean vehicles is super important for the climate. In addition to that, it's not that well known but almost 40,000 people die every year in the UK due to air pollution. So again, this isn't just a long term thing for the planet. This is a immediate impact that we can make on our roads today by switching out of these fossil fuel vehicles into our electric vehicles. So we can make a big difference. We're quite excited about both of those from a big picture standpoint. So over the last chapter, I've been here nearly six years and over that time we've been trying to make it as easy as possible across this transition. And what's really interesting is that we've got this combination of cars meeting the energy sector. And that's the major part of electric cars. That's the key difference that you're going to discover is that how does it work now with a battery and electric power in this vehicle that you're driving and what else can you do with that battery too when it's sitting on your driveway and you're not driving it. So we've been working through that and so we do everything from, "Help you discover the cars." There's now like nearly 100 models across 30 different manufacturers. So it's really bloomed in the last few years when I started this six years ago. It was only five. So it's completely different. Well, so cars, we help you discover the cars. We help you get a charge point at home and you can also get a tariff that charges up in the middle of the night for fraction of the cost. And if you don't have a driveway, there's the electroverse app and that gives you access to now over three hundred eighty thousand charges across Europe. And we bring it all together and make it super simple to make for people to make that switch. And in addition to that, we've been thinking about how do we then take more value out to the batteries. And I think we might come onto that later when we're lucky to have a clear with us today. I don't get into that right now, but the other part that we've really focused on is the amazing incentives that we have today. There's a low company car tax rate, which the government has committed to, I mean, it's like two percent a day and it will only increase to five percent through to twenty twenty twenty eight, which is significantly better than anything on the internal combustion engine side. And that also unlocks the single salary sacrifice. Salary sacrifice is an employee benefit that you can get through work. It's like cycle to work, but for cars. So it means that you pay out of your grey salary and you can save 30 to 40% every month on your monthly car payments. And in fact, it's not just your car, it can be your service, your maintenance, your insurance. In fact, we roll in your free childhood home and some free miles of electricity, or you get that card if you don't have the driver and get free miles of electricity on that card, all rolled into one. And you're saving 30 to 40% on all of this. And it makes it cheaper than the petrol diesel car on a monthly basis, even though sometimes they're five or ten thousand pounds more expensive at front. So when people see their list price for the EVs, they're thinking, "Are these really expensive?" But actually on salary sacrifice, they're actually much cheaper. And that's before the running costs. What's a little known fact is that if you can charge a home on an intelligent octopus tariff, you're saving something like 85% of your fuel costs than what you'd be spending on petrol in the equivalent car. That's over a thousand pounds a year if the average driver in the UK, just by making that switch from a petrol fuel car to an electric car and charging up on a smart energy tariff from octopus. So the whole thing, we've been kind of working through these different bits to bring it together to make it easy and delighted to say, you know, the last year, the last two years have been really exciting with this salary sacrifice scheme, where we've seen just so much enthusiasm for the businesses out there to help their employees make that switch to EVs set up these schemes and really help them make that switch to clean transport in those communities as well. That's fantastic. And just taking it back a step in terms of, like as I mentioned, we're here at your offices. How many people do you have here? I mean, you said you've been here six years. How much has, you know, the company grow or this part of this has grown in that time and how many people do you have here now? Well, we've done a bunch of different things in the team. So we started off, you know, thinking about the energy tariffs and those kind of things and a bunch of those things have actually moved into different bits of the energy business now. So there's a whole team that look after energy tariffs that doesn't sit with me, but in OctopcV where we really focus on this aggregating it together and doing the salary sacrifice piece particularly, there's over 220 people now. So that's grown from 25 people at the start of 2021. So two years ago, 25 people to 220 in two years. How do you sit in relation to the wider Octopus group? So we sit within Octopus energy, the Octopus energy group, I believe there's now 50 entities which is pretty mind-blowing. And I think I've been an entrepreneur within this environment where I've been with other amazing entrepreneurs on a similar mission, but they've kind of been ahead of us and they've shown how they can grow a business, build great customer experiences, great customer relationships. So we've been able to borrow and copy actually a lot of the kind of operational setup from Octopus energy. So the way the team is a setup and they look after customers and they, you know, if you come in as a customer you'll come into the same team again. So it'll be the same people that you'll interact with each time. Those kind of things that enable us to give an unparalleled service, we've been able to borrow from as we set up Octopus EV. And also just the kind of mentoring that we've got across the group has been unparalleled. I feel very privileged to be part of such a bigger machine, but yet still have the autonomy to be able to follow our own mission in the transport space. And is this typical of that Octopus culture here? Because obviously we've had a chance to wander around the offices. It's a fantastic environment that you've got. You've got the pool table in the kitchen. There's a table tennis room. You've got these beautiful little octopus. Yeah, Constantine is everywhere. There's coffee and free crisps. And I mean is that typical of the culture of Octopus? Or is that unique to you guys? How does that compare? Yeah, do you know what? I think there's a unified kind of common culture around looking after people. So things like people before the problem. So if things go wrong, you look after the person, you make sure they're well, and then you figure out how to solve the problem. And there are other things like I'm sure we probably cover them in other podcasts around tower creating, dry state walls. We can come on to them in a bit. But those cultural pieces are common throughout the Octopus energy group. But I do think that we get to play on that within ourselves. And obviously we work with cars. So we get to test drive cars. So every year we have a test drive event for all of our team. And last year we had I think 35 different cars. And we got the team together and we did a bit of a debrief. But also it was important for everyone to be able to try the cars, test them out. They get to talk about them. But it's also loads of fun. So we have our own pieces within that culture, I think, that are specific to the EV space too. Claire, you've been sat patiently there that we bring you into the podcast. Do you want to tell us just a little bit about your role here? Sure. And thank you. And thanks for having us. It's really nice to be on it. It's nice to be on together actually. It's really nice to have the two sides of everything. So yeah, so I have only had just over four years, kind of not quite as long, long in the teeth, or just electric vehicles as Fiona. My role over those four years, like everybody's who's been around that long, has grown and changed. So I originally, I don't know, maybe I'll tell the story of how it happened. So if you and I have known each other very long time, both engineers and we've both worked on lots of different challenges in the energy and kind of text base over the years. And I was ready to come back to work after having my second child. And we got chatting, I think, one Christmas, 2018. She said, "We've actually got this really exciting project, Paul Leube. It's vehicle to grid. It's how do you get energy out of the car battery? Put it back onto the grid at times when the grid is actually at the moment really dirty and relying on gas to meet the peak demand. So like at T time, everyone puts their lights on, puts their cook on. But we're not really sure like how we're going to do it. We don't know how we're going to get the cars. We don't know how we're going to get a special charger to make it work between the car and the house. We've got lots of project partners. And in fact, the project itself was part funded by and based through Innovate UK. And it was a pretty competitive process that Fiona went through with one or two others to really kind of sell this vision. Now we need to deliver. And so for me, that was like, you know, that's just grist to my mill really. I was like, okay, well, I'll come and have a look and see. And that was it like day one hooked. And we had to build, you know, every piece of that ecosystem. And a bit like Fiona was saying, you know, we've kind of grown up as the Octopus Energy Group ecosystem has grown up. Actually, Paul Leube has been the kernel for lots of bits of our business, you know, learning how you source cars, how you lease vehicles. Also, you know, bits that have gone into like other bits of the group. Like, how do you get permission to install a charger? And how do you do that charger install? Well, that's part of all the energy services. You know, there's lots of elements of that project. So that was, I guess, the start of my Octopus journey. And as the 2019 progressed, we were talking about what should Octopus Electric Vehicles kind of watch the big mission be. And Fiona's really spoken about salary sacrifice. So, you know, we could see that was going to be a huge opportunity for salary sacrifice as a scheme to make a comeback. So the bit that Fiona kind of politely avoided is actually that scheme existed but really didn't make sense. sy'n�� protedd yn estemur, ac poru. Mae'r dipho ond y fighting rydym oyn effeithais add y mae oedd hyn. Mae'r dipho arew hyn na'u rheid ar bron o'r Опynod yarlyn wahanoli newdenwyn llawth? Mae'r dipho ond r frosting maid yn eti valewn am, sy'n wynaid undwyr hyn? Mae bchu gregation sy'n yw'n profiad ol' omd ynt entrebygu Ingheidiad. Y well, using it bloody fo gyllail arwayraig. Mae'r dipho ond y fawr yma, mae'r dipho ond yma. Mae'r dipho ond yn ymwyr hynny. Closed infrastructure just for those drivers, but they thought about a lot. a lot of other parts of the experience as well. Thinking about, for example, you can look on your Tesla screen to anyone who isn't the Tesla driver, you can look and see which charge is available, how many there are, where they are. So I think you have to give credit to Tesla for not just building like the vehicles and bringing those vehicles, you know, Model 3, obviously, like a hugely popular vehicle and very popular in Arfleet as well, but actually building ecosystem around it. And actually the rest of the world is catching up now, starting to catch up. So your point was about, you know, when I look on my car, it tells me to go to this charger, there's one free, but when I get there, maybe it's busy. I think that's such an interesting observation, and it gives me lots of ideas and thoughts about actually how can we make it better for customers. And I think thinking about connected car services is really like the next, I guess, you know, innovation, like landscape. And as Octopus, you know, we think about that from a customer perspective, above and beyond anything else, which makes it really easy, I think, to make good decisions as a business about what should we do and where should we go with products and propositions. Well, like, what would I want as a customer? What do our customers need and want? So actually to that point, thinking about, well, actually these cars are connected. It means they're giving data, okay? They can broadcast data. They can talk about where they are physically, they can talk about, like, the state of charge of the battery. They can give all kinds of data signals. So increasingly, we can actually use those data signals to actually build richer and much more valuable experiences. So for example, we talked about the electroverse. You know, if you think about that route mapping, yeah, if you start to lay in the route that you want to go on with data from your vehicle, like, live state of charge, you start to layer in data from the charge points themselves. You start to think about really next level services for customers and building, you know, confidence. Because I think that's another part of it, right, is having confidence that you are going to better do your journey and get to the charge you need to, so you can get to the place you need to get to. I think that connected car world is coming and it's coming super fast within Octobus because we're building from various different angles, those connections to the vehicles and connections to other services as well. There's also a mind shift around how we're going to charge these cars. So when I first got into this, automatically my mind model of how I fill up my car as I go somewhere and I top up my car, I put in some kind of machine, like, you know, petrol pump, had been for years and I fill up and then I drive off again. Actually, for the majority of people, they're not going to do that in an electric world. They're going to do that occasionally, maybe on the longer journeys, but for most of the time, they're just not going to do that. And the equivalent is like, that's going to be for longer journeys where you need convenience and you need speed, but it's going to be more expensive as the reality. So rapid charging now is anywhere up to even one pound per kilowatt hour compared to on intelligent Octobus if you're charging up at home overnight. It's like 10 people a kilowatt hour. So it's, you know, significantly cheaper to be charging at home on those overnight tariffs rather than it is on those rapid tariffs. So actually, it's not just at home. So a couple of points on the home charging. The PWC report a few years ago estimated that 75% of drivers have access to driveways. So that's a significant amount of people. Now it's only about 65% of homes because people are thinking, that's way too high. But actually drivers correlate with driveways. So you're more likely to have a car if you have a driveway. So actually 75% of us can probably charge at home. And then other people on top of that can charge at work or at community charging locations. So like maybe down at the local car park, like a community car park, on your lamp post outside your house, or even on somebody else's driveway. So I'm really excited about something innovation we're seeing where say there's community charges where it's like Airbnb for charging. It's like you can book my driveway coming to use my charger and it's much cheaper than say the, you know, the detour for diesel that you used to have to do or filling up, you know, detouring for your charge. Actually, it's just in that, that driveway that's in the house a few, a few doors down. So there's all this innovation that's going to be lower cost as well. And so it's not actually that we have to replicate all of the public filling stations with charge points. And in fact, by the way, there's like 8,000 filling stations in the UK. There's more than 20,000 locations now that you can charge your car publicly. So there's already more locations where you can charge your car publicly than there are filling stations. There might not be as many petrol pumps, but hey, there's only 5% of our cars today are electric. So we don't need to even replicate the number of like pumps either and most people are charging at home. So we don't have to replicate the whole filling station overnight. And then in fact, we don't have to do it at all. People won't end up using it that much. And so we might end up with stranded assets in that space. And actually, it wouldn't necessarily make sense for us all to push people to use those rapid charges because it's not going to be the right thing for the consumer. It's not going to be the best thing for your wallet. The best thing you'll be finding, the lower cost, slower charge points. I think also, like playing that back into like the range of vehicles. I think, you know, we're still in a really early stage of how many cars make some models available. And I feel like, you know, we've seen almost like that medium to high end where you have cars with the bigger batteries that are a bit more expensive. And we're starting to see now more like value for money cars, I would call them, which are, you know, smaller battery for smaller journeys because actually most journeys are short. And like what's the average? It's something like 10 miles per day. It's just 20 miles per day in the UK. And like all of these batteries now delivering like 200 mile range. So actually people only have to charge up and they're upon so weak. It's, in this interesting, I mean, this is where like this coming together of all these threads of the business and what we've been working on really. So there's definitely a, for me, a theme coming around like right sizing your vehicle to your life, which is a lot of people, you know, do those short journeys and then occasionally do a long journey. Some will be at the other end where they're doing lots of long journeys all the time. And that's cool. We need to have the right vehicle for the right journey, like to fix your life. But then there's this opportunity for batteries and wheels. And I think that's the bit that kind of brings a whole thing full circle, which is whenever you have an opportunity to plug your vehicle in and make it available to the grid to store energy when renewables are abundant or and/or when the grid needs energy and in the future vehicles will broadly be able to export energy back. Then actually you're getting the like the benefit when you need it from mobility and you're also getting the benefit when it's convenient for you at home, for your energy. I think that's just the super exciting thing about Octabers and what we're doing all the set of your vehicles is we're enabling both of those things at the same time. So for you and we've talked a lot about salary sacrifice. I've want to focus a little bit more on leasing, which is obviously another major part of what you do. Yeah, and in fact it forms the core basis of the salary sacrifice proposition. So it's sort of locked down actually we had the opportunity to really set up our own leasing business and get the systems, the processes and everything in place. And what that enables us to do is that we buy the cars, get them financed, and then we can basically rent them to you, rent them to you or rent them to your business and then they offer it to your salary sacrifice. And that's essentially a bit like a mobile phone contract. And we see this whole technology transition a lot like mobile phones. So if you remember getting your first one, I walked into this mobile phone shop. And it was for you actually I think it was the one that I went into. They had a selection of different technology and they taught me through the different charging and that kind of thing on my phone and also my contract. And the idea was that I could take the phone and I'd pay on a monthly basis. And the technology might change but it would be like for two or three years that I might have that contract and then I'll be able to upgrade when I get the new one. And it's the same kind of idea right now. So you can do that with your car and you can essentially take a contract with us for two, three or four years, which is a lease. And then at the end of that you hand the car back and you get a new one. And actually we're starting to explore that for second hand cars as well so that we can open up more affordable leasing as well for people because some of the cars are a bit more expensive at the moment. And so step by step we'll provide ways in which you can access different vehicles for different prices. But just taking that commitment of two, three, four years and we'll be able to make that happen. And also customers really like that because if they're nervous about the technology they're nervous about the batteries and they're worried about putting out so much money to say buy that vehicle, we just take that risk for them and make it super easy so they just have like one monthly payment. So what have you found of being the benefits of setting up the leasing yourselves? Well one thing in particular is that we've always been part of the Octopus Energy Group with the phenomenal customer service that the Octopus Energy Team have been giving to customers for many years now and building that trust and the relationship with those customers and actually for a long time we were struggling to kind of provide that level of service that you'd expect from Octopus but actually haven't been able to set up our own leasing company. We are now fully in control and we can offer that great service. So now we have a 4.8 trust pilot rating out of five and actually I'm super proud that team that we've built over the last couple of years are full of many amazing people that take so much pride in giving a great service to our customers and whether they're building the tech tools, the kind of online experiences that you might have as a customer or they're the person that you speak to when you call up if you've got a problem everyone is so proud to be giving the best experience possible and then you can tell I think that I'm delighted by that and I think it's so much better than I'd ever hoped for. Clearly passionate about it. Yeah they're a wonderful team. They're a wonderful team. Claire I just want to come back you mentioned or you both talked about the power loop trial earlier. I want to just step back to that because I was keen to just understand a little bit more in terms of how that actually worked if you can just go into bit more detail on that at all. 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Phwll panau hwn i fel diethau gwahan iawn y añothan, bu prosperousu mewn i '上 Guatemalaau' i ffordd bakeleid. whaddau lebl euwią yn coen yayb. Godi! Cyllnantnol ' pal draw,ziehol ac ganio chylbaesol, next chopped done gy? Mae'r gwisdraf i ddim, mae'r gwisdraf i ddim, pwynt yn yw'n pwynt yn yr mynd i'n pwynt. Mae'r gwisdraf i ddim, mae'r gwisdraf i ddim. Siolau'r gwisdraf i ddim. Mae'r gwisdraf i ddim. Chydw, mae'r gwisdraf i ddim. wneud yma, yma nesbwchol o'r llwyth, a phanwchol gweithy. Mae'n yw'r sysdon sydd yn yma sydd yn ddynu yma. Mae'n ymwchol o'r llwythol amser, ddod yn ymwchol a'r llwythol amser, a'r llwythol amser, ddod yn yma'n llwythol amser, a'r llwythol amser, a'r llwythol amser, a'r llwythol amser i ddiwynt gyda newydd yn win心an gym roamer yn gweithioohatol. A miswr Silicon Lewis, stor, ac mynwch sponsored c to並 lannau jufbnwch – jetro دi diwch, gydaydiwawch. A tryingisstethau yn yr wyffirwch i Lyd Clwbio'r gandwi eithfer i'w'r faster yn commiracodioldion ddynnau ac sued fynd a ymed yn ac yn myngor y bahad Ooh Sustain, oedai yw fbyn follai dwiwn yn yr Wel? Mae'n gwybod yn gweithio gydwch yn gweithio gydwch yn gweithio. Mae'n gweithio gydwch yn gweithio. Mae'n gweithio gydwch yn gweithio gydwch yn gweithio. Mae'n gweithio gydwch yn gweithio gydwch yn gweithio gydwch yn gweithio gydwch yn gweithio gydwch yn gweithio. Mae'n gweithio gydwch yn gweithio gydwch yn gweithio gydwch yn gweithio gydwch yn gweithio. o dimanywch dyma'r"ddi Comeddrian Iain; o i dd globaliadau successfully a foliau cw measeroel impressived a 'd一定 pan dydolfi"d y Cymru! A feithol a d Let meatwch ei beginners a' knocking yn edig gyda ddiw yn y bob i wynghey. Oh, a practicable. 'Ddiwkrob y dissolvedan. Goch chi ai'r pray. 巖d besti. Ac NHS glef amser alepleu ddim defnyddio ddóbi目 autopelafficial. Or the engh stepor, b doing arlleun y po receivingo o dekinoddi ond o hynrych dobl sy'r pwnatw i dallau Efally llawer, if you have any comments on anything we have discussed today please do get in touch via the website www.atogsbus.energ or via the usual social channels. For now, for me, Russell Goldsmith thanks for listening and goodbye.