The federal government plans to slash planet-warming greenhouse gas emissions from vehicles by 2040, and a new Canadian startup wants in on the action.
Canada’s transition to zero-emission vehicles (ZEVs) is inevitable — Ottawa has set a target aiming for 100 per cent of medium- and heavy-duty vehicle sales to be ZEVs by 2040, “where feasible.” But making the switch to emission-free vehicles is not without its challenges, namely finding the money to help businesses trade gas-guzzling vans and trucks for ZEVs.
Enter 7 Generation Capital (7Gen), a Vancouver-based startup that provides end-to-end services for medium- and heavy-duty vehicles like delivery trucks, fire trucks and garbage trucks. The business, launched in January 2020, helps companies with leasing ZEVs; installing, financing and managing charging infrastructure; project feasibility; and costing and operational software.
But switching to EVs involves a lot of moving parts: cost-benefit analyses, knowledge of EVs and charging infrastructure, a plan to maintain vehicles and charging stations and, of course, the money to make it all a reality. All these factors may leave businesses with fleets of vehicles reluctant to begin electrifying, which could delay reducing emissions in the transportation sector.
Co-founder Frans Tjallingii says the overall goal of 7Gen is to make it really easy for fleet operators to transition to EVs.
“We need to transition to zero-emission as quickly as we can,” he says.
Essentially, 7Gen fronts the money needed to buy and maintain electric vehicles (EVs) and chargers, and charges clients a monthly fee to lease them and to cover operational costs. The company also offers expertise on how to make the switch to electric and does the legwork of helping businesses find funding and government subsidies and grants.
This approach to taking the risk out of the EV transition makes it a more compelling option for companies, says Raymond Leury, president of the Electric Vehicle Council of Ottawa
“What they're providing in terms of the services is quite valuable,” says Leury.
Finding the cash to make these changes more affordable has long been a hurdle for clean technology, he adds.
As Canada works towards net-zero by 2050, a startup's business model is premised on accelerating the conversion of fleet vehicles to EVs. #Renewables #Electric
“If you look at the history of green technology, one of the big issues has been to get financing at reasonable costs,” Leury says.
“New technologies tend to cause lenders to see risk. When there's risk, they increase the lending rates, and that makes it much more difficult to justify the expense.”
Instead, 7Gen’s approach essentially de-risks the technology portion of the transition, says Leury. By assuming the responsibility for EV infrastructure and maintenance, 7Gen could make electrification a more attractive option, particularly for smaller businesses that can’t afford to have dedicated maintenance crews, he adds.
Since its launch, Tjallingii says 7Gen has focused specifically on last-mile delivery — the vehicles that bring goods from a warehouse to a customer’s doorstep — and waste removal services, partly because these vehicles return to a set location to charge each night, making them ideal candidates for electrification.
Other Canadian companies offer similar solutions for a range of different EV customers. Jim Pattison Lease and Swtch lease EVs and offer end-to-end charging and energy management solutions, respectively, while 7Gen covers financing, logistics, vehicles and charging infrastructure, and is “technology agnostic,” meaning the company can work with any vehicle manufacturer or charging provider.
So far, Tjallingii says, a total of 12 vehicles are being deployed through 7Gen: 10 to support Ikea Canada, one to an unnamed client and one — an electric garbage truck — to the Joliette Regional County Municipality for a pilot project where multiple municipalities are evaluating the truck’s performance to then scale up and purchase more.
One of Ikea’s home delivery partners obtained their first EVs through working with 7Gen, which helped that delivery partner find the investments and technology to start replacing their current vehicles with EVs, says Melissa Barbosa, Ikea Canada’s country sustainability manager.
7Gen also helps Ikea create an infrastructure strategy to support the fleet, apply for grants and subsidies, and strategize on placement and type of technology, she adds.
Ikea has a global goal for 100 per cent of its transport for customer deliveries and services to use electric vehicles or other zero-emissions solutions by 2025. Without 7Gen’s help, Barbosa says she doesn’t think “we'd get here as quickly or bring as many service providers on board.”
“We don't have the expertise in-house, as of yet, to be able to do this,” says Barbosa. “We don't have internal engineering and project managers. So, this is something that they (7Gen) were able to support us with.”
Few companies have this sort of knowledge, Barbosa notes, and securing 7Gen’s expertise in the Canadian market is “critical.”
When it comes to EVs “we're still relatively early in the journey,” Tjallingii says, and many of the first to make the transition have ambitious climate targets to meet, but he adds everyone is starting to move on this thanks to federal requirements and Canada’s emissions reduction targets.
“If you want to meet certain 2030 targets, you have to start today,” says Tjallingii, referring to both the federal target to reduce greenhouse gas emissions 40 to 45 per cent below 2005 levels by 2030 and commitments by private companies like Amazon. “Each year that you delay is going to be harder to meet some of those targets.
“Very few people go all in and say, ‘OK, I'm just going to replace my whole fleet,’ but people are replacing a certain portion of their fleet every year,” he said.
“So let's make sure that when you're doing fleet renewal that we help assess — is it worth it and feasible for your operations to go electric on those vehicles?”
Looking at introducing EVs into fleets when old vehicles need to be replaced is one way to start gradually transitioning, and the sooner companies start, the better.
By the end of this year, Tjallingii says 7Gen aims to deploy 500 vehicles and chargers for clients and is currently seeking government and private participation to finance garbage trucks at scale, with the aim to deploy 500 trucks over three to five years.
Natasha Bulowski / Local Journalism Initiative / Canada’s National Observer