⚡️ Electric Avenue Vol. 1

Happy Monday. This is the 1st Edition of Electric Avenue, the newsletter that brings you EV news, insights and analysis. Easy to digest and yummy - like Applesauce.

Here`s what we have for you today:

1 Pic + 2 Thoughts + 3 Links

But first, let’s take a look at the EV & Charging stocks movement over the past week:

Everyone is down except Tesla. Given the news below, there may be some buying opportunities?

1 Pic

• The photo above shows a submenu of a Volkswagen ID.5 vehicle with v3.1.0 software. It looks like VW`s vehicle-to-grid (V2G) charging is limited to 4000hours or 10,000kWh, whichever comes first, and will be disabled after that to maintain battery warranty.

• V2G technology allows you to "power your home" during a grid outage or to optimize self-consumption of solar energy. VW announced the release of V2G to millions of "ID." series vehicles for 2022. It looks like that is indeed happening with this new software version, but info from VW on launch timing for the corresponding V2G-capable home charging stations is still missing.

• A limit on V2G hours/kWh makes sense from the perspective of a carmaker that wants to warrant battery capacity - in the case of VW at least 70% capacity after 8yrs/160,000km.

2 Thoughts

I. What the limit means:

While VW`s policy will limit arbitrage opportunities that require daily charging/discharging, the major benefit for customers in grid-fragile areas remains: Emergency Backup Power. Just 20-30 hours of power per year during a grid outage or an extreme weather scenario can provide customers with a lot of value in the form of "piece of mind". Think of a backup generator being built into your electric car.

II. How this makes us feel about the VW ID. cars:

The 2023 ID.4 Pro could be an amazing value proposition for the right audience:

• 275mi range with 77kWh net battery

• 170kW improved peak DC fast charging rate

• 3yrs of unlimited 30min DC charging sessions at Electrify America + easy Plug&Charge UX

• DC discharging up to 4000hrs/10,000kWh for emergency backup power or grid load reduction

• Starting at ~$43k but eligible for $7.5k federal tax credit + state incentives

• Made in the US (Tennessee)

Unknown yet are the costs for the DC home charging station + installation that customers would need to make use of the V2G feature. We have seen DC home charging stations for ChaDeMo-based vehicles in the $6k-$10k price range but we anticipate that the purchasing power and production volumes of a company like VW can further drive these costs down. For comparison, an emergency backup generator running on fossil fuel can cost about $6k + installation.

3 Links

• Tesla VPP: Tesla`s Virtual Power Plant (VPP) made up of >2,000 privately owned Powerwall batteries recently participated in the first money-generating grid load reduction event under a PG&E program that pays up to $2/kWh discharged. This is a huge milestone and can pave the way for further participation of distributed energy resources (DERs) in our electrical grids - including bi-directional EV`s like VW`s ID. series. The $2/kWh incentive is likely not sustainable in the long term, but a vehicle discharging 10,000kWh (VW example) at this price could generate up to $20,000 in grid revenue over its lifetime - yum yum. .

• EV Roadtrippin`: Car&Driver declared the Lucid Air to be the fastest EV for a 1000mi trip. Tesla`s have been the undisputed long-distance leaders for years now. The fact that this is changing points to healthy competition in the EV industry with new OEMs entering the market to push the limits of efficiency. On the other hand, the fact that 3 out of 3 Electrify America charging stations on the trip were "underperforming" shows the challenges that still remain with public charging reliability.

• Free EV $$: President Biden signed the IRA bill into law last week. They key change for EVs are the updated tax credits for new and (for the first time) used electric car purchases:

DISCLAIMER: None of this is financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions.