 to be back. This is Stink Tech. I'm Jay Fidel. We're talking about community matters here at the five o'clock block. We're talking about electric buses and how they are coming to Hawaii with Sotterholm Bus. Eric Sotterholm, the founder of Sotterholm Bus and his daughter, Gabby Sotterholm, and they're they join us from Honolulu to discuss their company and electric buses and what they are doing and how the world is changing. And welcome to the show, Eric and Gabby. Thank you so much. Thank you. This is my second time I've been you on your show. I was on your show about maybe like 20 years ago, I think, right? Close to it. It was a long time ago and may I say that your hair has gone the same way mine has, but not quite, not quite as much. And I see you walking in upper Newt Water once in a while. Yeah, that's we have long discourses on political rhetoric. It's very important now. So our company started in 1989. We are the largest and really only full service bus dealer in Hawaii and the Pacific Island. We sell on 28 islands in the Pacific, including Guam, Saipan, Micronesia and American Samoa. We started out selling gas and diesel buses. And that's what we still do. But the transition in Hawaii and the Pacific is to electric. And so we're at the forefront of that. We sold our first electric buses to the city and to Hickam Air Force Base in 1994. Yeah, so we've sold the most hydrogen vehicles of commercial vehicles that anybody's sold in Hawaii. We've sold the most propane vehicles, commercial buses that anybody's sold in Hawaii. The problem is the propane is made from oil in Hawaii. It's really easy to use it in the mainland where it's 50 cents a gallon. And it's made from natural gas. And it's really easy to be green and be inexpensive. The other fuel hydrogen is a great fuel. If it was being made in Hawaii from wind or solar or geothermal, it would be wonderful. But it's made from oil. So hydrogen is very expensive and it's very, very hard to get. And then CNG is the other big fuel for transit buses on the mainland. Again... What does that stand for, CNG? Compress natural gas. And so that's how it's normally stored. You can also get LNG, which is liquefied natural gas, which when you liquefy it, you can compress it even further down in the smaller categories. But the governor has made it clear that he does not want CNG in Hawaii as a bridge fuel. Very cheap, 50 cents. It has less emissions, but it's another fossil fuel. And so we'd have to build in huge infrastructure at our ports. And we'd have to get a waiver to the Jones Act because the United States has no CNG ships, CNG in. They're these huge, big bulb things on ships, and they're good targets. So really... And he's also said he doesn't want LNG. Well, LNG and CNG basically is the same thing. It's just the state. It's in CNG is a gaseous form and LNG is in a liquid form. And there are vehicles set up for both of those. There's long range trucks now that are being LNG because LNG, you can compress it further and then you can get more BTUs or more fuel for longer distance. So you've looked at these options and it sounds like you're focused after all this on electric buses for a number of... After considering a number of options and considerations. And that, I guess, is your business decision. Going forward, it's going to be electric buses for a subtle home bus. Yes. And so Gaby, my daughter worked for another bus dealer, friends of ours, the Shetkees up in Portland for two years, and she came back to us and ended the last year and she just redid our website. Our website was terrible for, would you say? Yeah, absolutely. It was absolutely terrible for 10 years. So she just redid it all and there's an electric bus section. Let's take a look at that. Let's take a tour around the website specifically the electric bus part of the website. Gaby, why don't you take us on the tour? Yeah. So this is a photo. This is a lightning e-motor is actually of one of the electric bus manufacturers that we've partnered with. They take existing vehicles like a Ford Transit there and replace the internal combustion engine, drivetrain transmission to make it an electric vehicle. So you have familiar vehicles like the Ford Transit and E450s that technicians, drivers, operators all know already and just put an electric system in it. So it's also electric at a more digestible price point. Those look like transformers. Yeah, so that's the electric system that would hook up to the batteries underneath the vehicle. So it's a kit basically that they sell that you can install kind of a plug and play way to do it in the vehicle. So let me get this straight. Just a moment of digression here. And Eric told me about this before. It's better to buy a conventional bus and then convert it to an electric bus than to buy it as an electric bus already manufactured as such. Am I right? In the medium to light duty vehicles, that's true. In heavy duty vehicles, which Hawaii does have a few, the city has three now and there's some other demo buses here. Those are built from the ground up, the very heavy duty buses and those are a million dollars a piece landed here in Hawaii. Is that one section or a two-section bus? That's a one-section bus but you could do a two-section. You could do an articulated bus too. That would be too many. If it was a two-section bus, yeah, it would be at least a million and a half. But in the mid-duty buses and vehicles, transits, E450s, 550s, like what HandyVan operates, that market is less expensive to do a repower because that's a really common chassis that millions, hundreds of thousands of those chases are built in North America and it's less expensive. Eventually you're going to see from built ground up vehicles but right now the least expensive way to do that is to repower. So does that mean I buy a used conventional bus and then put a new conversion system in it or do I buy a new conventional bus and put a conversion system in it? So it's pretty much just offering the end user or the operator different ways to go about it. If they own the vehicle already, then they're not having to pay for a new body, a new chassis, all new shipping costs and expenses. So that's one way to go about it or if they want the brand new vehicle, they want the brand new warranty and the serviceability there. So you can get the new vehicle. So what Lightning E Motors would do, for example, which only a couple other companies do this, where they'll take even that brand new internal combustion engine vehicle and switch out the drive system. And so this is actually, this photo is a location is the location in Loveland, Colorado of Lightning E Motors. So for their kit, they'll either, you know, bring the vehicle brand new to that location and do the kit install or ship the kit here where we can be able to do the conversion at our location. Well, how complex is that? What kind of skill do you need to do the conversion yourself here in your location? Yeah, so what we're doing is we're going to be trained by the Lightning E Motors top technicians and mechanics. So that we'll be able to be the service, the warranty, the install location. And, you know, we're not seeing it as an incredibly difficult project. We would just be trained and we would be able to do it. We're buying special equipment to be able to do the project. And, you know, just having the support of the manufacturer will be huge for us. Well, that takes us to this whole thing about, you know, conventional vehicles versus electric vehicles and how dealers react to that transition. So, you know, the whole notion of automobile dealerships is built around having points, locations and having skilled mechanics who are skilled in, you know, in fossil fuel cars, I guess. And then you say to them, hey, we want to go to electric cars. And so the fossil fuel mechanics don't necessarily know about that. And you have to change your tools. You have to change your whole way of thinking to move to electric. Aren't you going to be doing the same kind of transition to move from fossil fuel buses to electric buses? Yes. It's retraining. Actually, you're taking away thousands of parts go away when you go to electric vehicles. Electric vehicles are much simpler. So you don't have fluids, filters, belts. There's really no tune up. So you're taking an electric, you know, a technician. You know, I say I last engine I rebuilt was a 1964 Volkswagen in 1968. And I asked people, it was the Führer's car. And, you know, it was a very simple car. And I rebuilt it on my shop and table. But what's happening is cars now are very, very complicated. And electric cars are actually simpler. So you're going to take a technician and it's already cars we're getting to the point where you have text, you don't have mechanics anymore, and you're diagnosing things. So what you're going to be doing is read, you're going to be diagnosing. And you're going to find out if you've got a fault code or something like that. And you're going to, you know, you're going to reboot it like you do a computer. And if then if you find out a certain fault code, then you're going to replace components and reset up the thing. So electric technicians are going to be higher trained, and they're going to get better pay. Because they're going to get better pay because it's getting more complicated. But you're going to have less technicians because electric vehicles don't have as much adjustment as as you have with with the ICE internal combustion engine. So it's easier for both the dealer and the customer, the user with an electric vehicle because if something goes wrong, you switch out the parts and you don't have to go through the same kind of mechanical process to fix things. But is it cheaper or more expensive? So actually you get about 85% less maintenance required because you don't have the oil changes, the filter changes, and especially because of regenerative braking. So you're not doing nearly as many brake jobs and repairs because when you're braking in an electric vehicle, you're just getting that power right back. So the way that the vehicle reabsorbs that pretty much does away with brake pads and rotor changes. And your tires even last longer. You know, and so we were I'm on my third electric car now. And we have electric cars in our fleet, my service manager and tax drive them. So we've gotten used to working on iVoltage. How it's going to happen hopefully, or how it's going to happen, hopefully they'll be more incentive. Now I'm one of the last bald-headed moderate Republicans left in Hawaii. I think there's five of us left, you know. And I thought we weren't going to discuss politics on the show. But I'm in Hawaii this day. I'm a social liberal and a fiscal conservative and there's no party for that. So but what's going to happen in California where the electric vehicles are at the forefront, there's huge incentive. And you can get like $100,000 for electric bus, which pays for the differential. And so we've lobbied the legislature for that. The legislature seems to want to talk about mandates. You know, I'm not big on mandates. I'm big, more big on incentives to get things going. Right now we have thousands of electric cars in Hawaii and a few electric 40-foot buses, but nothing in between. So we're going to repower a transit, what Gabby was saying. And in June, we're going to have the first big-size vehicle electric in Hawaii. And we're coming down to pick you up. Okay, I'm good for that. But let's back to Gabby now. Lightning is the one that was in the newspaper a few days ago. And the one with this beautiful looking vehicle, which you showed us a picture of. But Lightning is not the only one. Yeah, that's the Lightning bus. But there are others you're looking at, or you're going to bring in. Can you talk about that, Gabby? Yeah, absolutely. So Lightning is at the forefront of fleet electrification for existing vehicles, like the Ford Transit, the E450, things like that. And you know, they're going public through a SPAC right now. And so they're one of the ones that we're very interested in, especially we have a really good relationship with them. But we also represent another called Lion Electric. And they're based in Canada, they do school buses. And they basically went from making the dirtiest vehicles ever diesel buses to all electric. So they don't offer anything but electric vehicles now. And so especially for school buses, it's a really great opportunity to do electric, because you're driving typically in the morning and in the afternoon. And so you have all day, which is the cheapest time to charge to plug the bus in. And so, you know, you drive it, you can have some of the models go up to 170 mile range. And so in Hawaii, we don't even really need that maybe on the big island, but you know, you drive it in the morning, you plug it in during the day to get the cheapest charging time. And that's when solar is available too. That's why it is the cheapest charging time. Well, I want to take a break and talk about that for a minute too. Just as, you know, range anxiety drives the market many ways. A lot of people won't buy an electric car because they worry about it even theoretically. Even if it's not as bad as it used to be, you know, batteries are bigger and and there are more charging stations. But it remains that there's only 13,000 electric vehicles in the state when there are a million cars in the state. So, query, what about the buses now? You know, we need them to be charged, even if it's during, you know, low cost hours, so to speak. But we still need them to be charged. Where are they going to be charged? Are you offering, you know, a charging station for your customers, or does the customer have to get his own charging station? What are the options? With a bigger vehicle and a bigger battery, you need a bigger charging station, don't you? Can you talk about that? The big change in electric vehicles, the reason why electric vehicles are now at the forefront is battery technology has changed. The original vehicles that Ford made were battery, you know, lead acid battery electric vehicles a long time ago, but they couldn't go very far. So, you know, I've transitioned from cars that that had 100 mile range. Now, now cars have 250 to 300 mile range. That changes everything. The same thing is happening with buses, but buses are unique because buses are depot charged. So, you know, you basically charge it you can have a really centralized depot, and then you can go out and, you know, the first buses that they take, we did a proposal, Gabby did a proposal to hand event, to repower 10 hand event. That 120 mile range or so is not going to do every route, but it would probably do 60 or 70% of the route. Let's start with oh, let's start with the, you know, the low hanging mango, you know, and you know, we'll get to the 300 mile around the island someday. But the, you know, what we can do is we can provide a complete through lightning and through other manufacturers, a complete solution with charging infrastructure, wiring, solar panels, the whole deal. So there's, there's lots of there's DC credits available for chargers. There's federal tax credits for solar. So there's lots of, and if you go back to this whole thing, the original guy in Hawaii, original guy that started this whole thing is Kelly Judd from inner island solar. He built the very first electric car that I know of in Hawaii, converted an electric, converted a car electric with lead acid battery. And then built the biggest, he still owns the biggest solar water heater company in the United States and California. And then he transitioned inner island solar, the electric panel, the distributor through an ESOP, you know, and so he's, but so what I, what I hear you saying though, is that you can outfit me with a kind of solar facility that will charge a charging station that will provide electrical power for a charging station. And I can use that to charge my bus or my car for that matter. And that would be economic. Yes, it's economic. It's economic right now. The other thing that's happened is you know, due to the pandemic, due to lots of other things, the relative cost between a gasoline vehicle and an electric vehicle is almost parity. And the reason why is everybody's stealing catalytic converters and they're stealing them off our buses off our lot today. And, and what's happening is because catalytic converters are in such short supply, that's actually slowing down production of gas vehicles, the United States, because they don't have enough catalytic converters, and they don't have enough rare chemicals, which is what you have to minerals that you have to make catalytic converters. And catalytic converters have gone up, you know, substantially in cost. And so whereas batteries continue to fall. So we did, we did, I did a proposal, the DOE in October. And my batteries came down from October till this month, $20,000 in just cost. So you're going to see parity within a few years in cars and very few very soon within buses. And that's that's going to be the change. Well, that's, but what you know what I get is that if I'm doing commercial buses, commercial buses, and you guys are selling commercial buses, then I probably need to have my own charging facility for those buses wherever I park them during the day or the night, you know, during the off hours, whatever. And so it behooves me to get a charging station for those buses. And that's really a different thing than the individual who has an electric car. Because, you know, he's not going to be able to afford a big charging station, he's got to go outside. And I think the whole charging state, you know, and we interviewed a company that's putting charging stations in office buildings and condos, you know, in the parking lot there. And this is a shared arrangement. The whole thing is very high tech. And that's all they do. It's in big building. So we have a wave of charging stations coming on the line. And it's not necessarily from government. In fact, it isn't from government. And it's not necessarily from the utility either. It's from facilities like you're talking about. The first guys that are going to get electric buses are government. You know, and they are actually, all the mayors signed a thing out on the Hokulea a couple of years ago that they want the electric fleet, the commercial, I mean, sorry, the municipal fleets on the four islands, the four counties to be electric by 2035. And they, Jay Stanbro, who was the head of sustainability under Caldwell called me up because he had a leaf and we had a leaf, too. And he couldn't get the four mayors to to Polk Eye Bay and back. So he called us up and we have vehicles and go 250 miles in rain. So we took all the mayors to Polk Eye Bay and got them back, which is important. And so the thing is that what's happening is that those are going to be the first guys that do it, the government guys, they're going to be at the forefront. But the big thing is these guys all have a problem is infrastructure because they wanted their first thing was to get big 40 foot bus. Well, a big 40 foot bus has has 525 or 550 kilowatts of energy. Huge amount of energy takes a long time to charge that. So you have to have a level three 480 charger. You know, not everybody has 480. We don't have 480 on Dillingham Boulevard. You know, so we had to get a get a booster to boost it up to put a fast charger in a bit a transformer. But so the low hanging mangoes is is microtransit. That's the future. That's what that transit is. Because with a transit or E 450, which is a handyman, what we can do is we can use just a level two charger. This ditches what what you guys use for your house and stuff like that level two charger. They're a little bit more advanced, but they only cost about $2,000. And you can wire them up here to 20 line for maybe $1,000. So the infrastructure, and so maybe so maybe have five buses, maybe you need your four charger. The relative infrastructure cost is not that much. We could provide it in a lease. We could provide it to roll it into the cost of the equipment. The other thing is we're dealing with a company called Sustainability Partner. And they are they've got a exclusive 10 year contract with the state of why they want an RFP for the state of why in all the counties to provide infrastructure funding, not a lease. It's not financing. It's actually a utility type of usage. They charge you per mile when you use the vehicle. And they funded their first transaction with 41 Teslas or the DOT, a local partner in it, a guy named Benson Bedina who, as it turns out, went seventh grade with me, a Kyler Intermediate. All things begin at Kyler Intermediate. I think he was a big bulk extra, you know, so but that's another whole story. So they're funding these things. And what happens is infrastructure, in the United States, we're capital poor, really. I mean, if you look at our infrastructure, and Hawaii is the poster boy for capital poor, and then you add the pandemic and we're double capital poor. And so these guys could come in and literally they fund in the high millions and the low billion. So they could come in and build your infrastructure, they can build your lot, they've solar panels, charging stations, fund the vehicle. And it doesn't cost you anything to put the equipment in, but you have to pay per mile. You know, you know what? One thing you said, though, I think it's very interesting. And that is that if I have five buses in my fleet, so to speak, then it's much better for me to have five charging stations. And that micro charging station you talked about, that sounds very appealing, because I can charge them all at the same time. I don't have to rotate them around, you know, to change positions or change the connection, one, two, three, four, five, I can do all at the same time. And I think for that reason, any organization with a fleet that's going to want to have, you know, these charging stations that will allow more than one bus to be charged at a time. This is really important. Travel Plaza is, which is owned by Japan Travel Bureau, has pro-terra buses. They have a depot charger down in Evalet. It's super efficient. And Gabby, and part of Gabby's analysis that she did with handyman, is then your driver doesn't go to the gas station and sit there for, you know, 20 minutes filling up gas. You just plug in it at night, and they're all ready to go. This is the future, you know, and there's no reason why a Saddle Home Bus can't take advantage of this kind of infrastructure and make it available to individual cars, you know? I'm just tipping you off on this. It might be an interesting thought to have, because in the end, it's the same connecting hardware, right? It's the same connecting hardware for a car or a bus. We charge one of our cars on our level three fast charger in an hour. You know, that's how fast it charges, you know? Or you could charge it overnight for, you know, eight, seven or eight hours or whatever. There's lots of variations. I have, you know, two branded, two Ford chargers, just basic 220 chargers. And I charge my car that goes about 250 miles. I charge it on the weekend, you know, because I'm cheap and I got solar panels and I'm net metering. So I charge it while I'm mowing my lawn with my manual lawn mower. So you can't get any more greener than that. And during the day, I get it totally charged and it lasts all week. So let me talk for a moment about maintenance of these buses. You mentioned before the show that you have maintenance facilities on all islands, yeah. So the buses you've been selling for 30 plus years, you have facilities to take care of them. But do you plan to have maintenance facilities for the electric buses on all islands? Because, I mean, if we are involved in a great movement for electric buses, we need to have these facilities charging and also maintenance facilities on every island. Is that, is that the future, Gabby? Yeah. So one of the things, you know, with the vehicles that we sell, they're very specific and the components on them are very unique. And so, you know, at our shop here on Dilling, what you're telling me is that the lightning bus is going to be different than the other kinds of buses. And if you're maintaining all the buses, you have to be able to do each different kind of bus, right? Yes, exactly. And the components on the bus as well, you know, there's the wheelchair list, different kinds of suspension, different cameras. And so for, you know, 30 plus years now, our shop, as well as all of our contracted service shops on the other islands, on our neighbor islands, you know, they've been working with these unique components and unique vehicles. So they've been able to learn and adapt all this new technology. So, you know, one more new technology, two more pieces of new technology, they'll be able to learn it, they'll be able to figure it out. And especially with something so new, like electric, then it's going to be even more uniquely poised because, you know, then maybe that shop is the only shop in that town that can do it. You know, if you're on the Kona side of the big island, then that's where you have to go. You have one shop and they know exactly how to service all of these vehicles. That's great. Our customers, our customers though, Jay, are going to end up with probably only one or two types of electric buses. Sure, you wouldn't want to have too many. Is that complicates you? A small one and a big one. And so if the school bus guy, they'll have a small school bus and a big school bus. If it's a commercial guy, they might have a van and maybe a mid-sized bus. So, we're the guys that would know all the technology, but they don't have to know everything. But the trend is Gaby just is selling a shuttle bus to the new Kona brewery in Kona, so to shuttle them around. But they want to go electric. I mean, the next bus, they want to go electric. We're selling buses to, we've sold buses and we're selling more buses to Hawaii, Forest and Trail that take people up into Uptamana care and they take people up into the ranches to do bird watching. How cool is it to go up there in a four-wheel drive, all electric transit, and you can creep up on the birds and they don't even hear you coming? Another point of sale. One thing that strikes me though is that these buses are going to use the same kind of frame chassis, battery equipment, drive, what have you as a truck would use. And if you're selling buses today, I don't know who else is selling industrial quality electric trucks, if anybody on the islands. And I wonder if that's something for you in the future. Well, I have a good friend of mine who sells trucks, the guy named Nathan Reyes, who's the Allison transmission distributor in Hawaii and the Pacific. And one of the things that's happening is, you have to look at obsolescent. So electric drive doesn't have transmission. So Nathan's old business model goes away because transmissions are going to go away. Electric drive is direct drive. So he formed a company a while back called Hawaii Specialty Vehicles and he sells the fire trucks and the garbage trucks to the cities and the counties. And those are going to go electric, instead of having a garbage truck coming to your neighborhood and waking you up. I mean, when they come through upper New Juana, I can hear them at your house. And so that stuff is going to go away. But they talk about how these batteries only last so many years and then they have to be replaced. And it's a significant part of the cost of the vehicle in the first place that you're replacing the battery. And I wonder if there are new models coming to town. I mean, financing models and purchase models and maintenance models where somebody says to start a home bus, look, I thank you for the bus, but I want a maintenance agreement that will cover me in case I have to replace any of this. I know at some point I will. Can you, are you doing that? Well, for example, with lightning e-motors, you know, the batteries alone come with a certain warranty. And then they also have, in their system, it's a very plug and play technology. So even as batteries are advancing and getting better, then that same drive system, you can just take the batteries out, bring new batteries in, plug them in, and you don't have to change the whole system. Can I get on a plan and pay a maintenance cost and have that covered or do I have to dig deep to recover it, to replace my battery? You can lease the batteries, but what's happening is technology is changing so fast that a lot of the standard battery warranty, some places around seven to eight years. What's happening is there's a prediction now in two years that batteries are going to be 25% less expensive, less dense, and 25% more rain. And in five years, 50%. So it might be that you say, oh, gee, I paid for this thing, but maybe in five years, if you can get double the range or 50% more range, and they cost 50% less, you might just say, I'm going to get rid of my batteries, and there's a whole place to recycle them. You can take them and then put them into photovoltaic systems for battery recapture, you know, for battery storage. Sure. There are secondary purposes that you can apply. And those batteries then, because the whole thing with batteries is how many times you charge them and uncharge them, how many cycles you have. And so if you just put them into battery storage, they might last 15 or 20 years. So we're almost out of time, Eric. I don't want to ask Gabby one last question here, and you can add to it. Are we in a revolution toward electric trucks and buses and for that matter, cars? Do you see, Gabby, you know, in your working life, a time when all the vehicles in the state of Hawaii are all electric? Do you see that? Absolutely. I mean, all, pretty much all of the large car manufacturers have at some point agreed to flip their entire inventory to electric. That's the trend among everyone, you know, with Toyota Sienna. It's all hybrid right now. You can't even get a gas Toyota Sienna. So they're going that direction. And when you really think about the indirect costs, which I think should be even more of a direct cost of our health, you know, it's almost priceless because we're going to have less exhaust in the air. It's going to be healthier for people to breathe. Our air pollution will significantly go down. So when you factor in those indirect costs of our health and the planet's health, I really see no other alternative, you know, especially with buses because you can fit so many more people on the bus footprint. It's economies of scale. It's more efficient. Per passenger travel that way. My family has been very green. My mother forced me to eat brown bread and brown rice back in the early 60s in Kailua. But my daughter is an activist. So, you know, I'm green, but my daughter is an activist. So it's a whole other level. I would expect nothing, nothing other than that. I would expect that. Yeah. So, but we also, you know, we're small business people and we make a profit. I don't, I don't apologize for that. But I look at this also as a matter of economic survival. I believe in five to 10 years, if we're not, if we're not, if we're not selling electric vehicles today, we won't be in existence in five to 10 years. In this business, our company's been in business now for over almost 35 years. And Gus, my son and Gabby, my daughter, our daughter are taking over for Denise and I in the next number of years. And that's their future. Eric, you must be a happy man. I know you're a happy man. You're happier today than you were before, even 20 years ago, when I, when I met you. Eric Satterholm and Gabby Satterholm, the proprietors, if you will, of Satterholm Bus and has a great future in a way. Thank you so much, Eric and Gabby. I really appreciate it. Thank you very much. And I'll see you on the trails of upper new water. Absolutely.