It is not only the design and manufacturing of vehicles that is being disrupted by entrants from what were not traditional automotive companies, but also marketing, finance, sales and distribution.
Electric vehicle manufacturers and distributors have been at the forefront of this new trend. An example is Ideanomics, which was founded in 2017 through the transformation of a media company.
Following a series of strategic acquisitions, direct investments and joint ventures, it is now a Fintech firm.
Bruno Wu or Wu Zheng (Chinese: 吴征) is a Chinese billionaire entrepreneur, and the chairman of Ideanomics (NASDAQ: IDEX), a fintech and asset digitization services company based in New York City.
The New York-headquartered company’s Chinese subsidiary, Qingdao Chengyang Ainengju New Energy Sales and Service, has opened the largest auto trading market in Qingdao at its one million square foot Mobile Energy Global (MEG) Qingdao electric vehicle (EV) Center. It offers a one-stop buying experience that includes financial services and onsite vehicle registration services. MEG is also ensuring that the necessary charging infrastructure will be in place.
“As EV enablement accelerates in the commercial fleet sector, the current solutions for power deployment and availability are ad-hoc and not scalable. MEG has begun sourcing partners which can help provide the technology and apparatus to solve both the efficient storage and management of energy designated for fast charging. It will work with these partners to collaborate with the key stakeholders in the energy industry to help the generation, distribution, and availability of fast-charging to meet anticipated demand,” said the company in a release.
In Nanjing, China, MEG will work with PetroChina’s gas stations in the city to assess the demand and economics of converting some fuel pumps into fast chargers provided by CATL. The pilot will run for several quarters and is planned as a potential blueprint for a broader program of gas station conversions in the switch to clean energy.
Automotive Industries (AI) asked Alf Poor, CEO of Ideanomics, how the Covid 19 pandemic has affected Ideanomics’ push for the adoption of commercial EVs.
Poor: While China, like most of the world, was forced to close businesses to contain the spread of Covid-19, it was affected early and was able to reopen early. Our MEG team persevered and was able to continue to develop our pipeline and execute some deliveries in Q1. In the second quarter China began to open, and our team worked hard to bring back the momentum in both our order book and deliveries.
More importantly, the country has doubled down on its push to convert to environmentally friendly transportation through a number of initiatives aimed at kick-starting its economy.
For example, in April Chinese State Council issued a Three-Year Action Plan for the Battle of the Blue Sky accelerating the country’s BlueSky Plan originally unveiled in 2018. The 2018 Blue Sky Plan’s centerpiece was the development of an eco-friendly transport system with higher fuel efficiency and lower emissions, and included fines for pollution, carbon emissions and the contamination of water.
The Three Year-Action Plan includes agreements of 24 provinces and cities to accelerate the adoption of new energy vehicles. Ideanomics’ Mobile Energy Global (MEG) group is already actively working with seven of the priority regions.
AI: Tell us a little about Ideanomics’ strategy in pursuing the three-pronged approach of popularizing commercial EVs, managing the energy component for EVs, and the financial products required for the building of this ecosystem?
Poor: We refer to our strategy as sales-to-financing-to charging offering, or S2F2C. It is a full-service model designed to address the unique needs of the EV ecosystem.
- Sales – Through MEG’s relationships with EV manufacturers, it offers fleet operators discounts on large unit orders. MEG earns commissions on these sales.
- Financing – MEG helps fleet operators secure financing to purchase EVs, and MEG collects fees for this service
- Charging – As there are more EVs on the road, the charging infrastructure required to power EVs must also expand. MEG has established relationships with various energy companies, utilities, and new infrastructure-related companies to help deliver not only charging solutions but clean energy solutions to the whole technology ecosystem, such as 5G base stations.
MEG expects to generate reoccurring revenues from pre-paid electricity, wholesale electricity, and rental revenues from base station towers.
Clean Technica Podcast with Alf Poor, Chief Executive Officer at Ideanomics, Inc. (Nasdaq: IDEX)
Our S2F2C model is proving to be a compelling proposition for both legislators and commercial vehicle operators. MEG continues to expand its manufacturing alliance, financial solutions and energy services to meet the needs of global initiatives for a cleaner future.
AI: Has the recent global pandemic and resultant economic downturn impacted your company’s plans and if so, how?
Poor: Due to closures, deals, deliveries, and registrations were delayed in Q1, but as China reopened in Q2, we have been able to start to execute against our order book. We’re a young company with modern infrastructure so we were able to seamlessly shift to working from home without disruption, although we do rely on physical deliveries for the EV side of the business. Our staff in New York have been working from home since March, and we continue to do so.
AI: What is the significance of the recently launched MEG Center in Qingdao?
Poor: The process of owning a vehicle is fragmented. Firstly, the majority of EV options available today are from new market entrants. Additionally, people must shop around dealerships, then get financing, then make another trip to get the vehicle(s) registered and plated and another trip for the licensing. The MEG Center brings all these services together under one roof. It will also serve to educate the public about EV and charging technology and their benefits.
AI: How does it tie in with the strategy of energy management and storage solutions?
Poor: Energy management and storage solutions are simply extensions of the value chain. Energy management is a natural component of holistic energy services – battery superchargers require more than technology to operate safely and be cost-efficient to install and operate. These solutions also require the cooperation of many parties such as energy companies, utilities, local governments, manufacturers, and technology firms. As a solutions provider, MEG can bring these industries together to create symbiotic partnerships without favoring one provider over another.
AI: How will this roll out globally?
Poor: In 2019, Ideanomics acquired 51% ownership in the holding companies of Treeletrik, a Malaysian-based EV manufacturer whose business is primarily in logistic vans, mopeds and scooters. As the China EV market matures, its manufacturers will face oversupply issues. Our plan is to export that excess capacity to the ASEAN region and beyond. Discussions with Chinese manufacturers are taking place directly with Treeletrik management and augmented with discussions facilitated by Ideanomics’ MEG subsidiary. MEG is looking to attract interest
from China’s belt-and-road development agencies for the South Asia and ASEAN regions, and anticipates that interest to develop into investment both directly and through China-based commercial EV and battery manufacturers.
AI: What is the impact of political agendas in different countries?
Poor: Our business is apolitical, and the transition to cleaner and more efficient transportation is a global imperative. The health of the commercial EV business relies on government mandates and subsidies. If some the countries where we operate were to roll back on environmentally friendly policies, we could be impacted. However, for the time being, political support for EVs has been gaining momentum, and we are optimistic for our business and the future of EVs.
SNN Network video interview with Alf Poor, Chief Executive Officer at Ideanomics, Inc. (Nasdaq: IDEX)