Even 10-15 years ago only a few people believed that electric vehicles would be serious competitors to their gasoline counterparts. Today however, tens of thousands of electric vehicles have already been sold, and almost all of the major car manufacturers are developing their own models for sustainable transport. Even Russia does not remain detached from the global trend, although it has always had the greatest skepticism about the future of electric vehicles, so there are only a few enthusiasts so far. Maxim Osorin, CEO and founder of the "Revolta" company has told us about his eco-project.
– Maxim, how did the idea of electric vehicles come to you?
It came accidentally. Every year I would go to a big industry event in power engineering. It was always interesting to listen about new things happening in other countries and to try to do the same in Russia. At the exhibition in 2011 I accidentally noticed electric vehicles. I had heard about them before, but in my view they should have been a bit different. I thought they should be like carbon fiber capsules with solar panels and bicycle wheels. But in front of me there was a perfectly normal car – a Chevrolet Volt. I even had a chance to drive it. The same night, while still in the USA, I delved into the Internet, and since then I have been thinking about this topic all the time. Then, in June 2011, six months later that is, I decided to leave the business which was related to information technologies and consulting, and develop the idea concerning electric vehicles.
– What work experience and what kind of education had you at that time?
I'm an engineer – an economist in foreign trade. I studied at the Moscow Aviation Institute. Unfortunately I didn’t get any applicable knowledge there, but this university helped form my system of thinking.
While being a student, I started working in the IT-industry and spent many years there. My first job was in a nice company, NCR. I worked with the automotive industry – with the factories manufacturing machinery, components, tractors, combine harvesters and other plant. In 2002, I started working in power engineering relating to implementation of corporate information systems. I worked for such companies as SAP, OXS, and IBM Business Consulting Services. At one time I was the head of SPL World Group, and later – Oracle Utilities in Russia. My last job was as vice-president of ru-NET-Holding, where I was responsible for the management of the companies “Energo Data” and “Intelica”.
– Were you engaged in routine work while you were the head of these companies?
There is CFO, monitoring services and back-office for routine work. My task was characterized by the development of business and activity management with key customers. For example, we had an annual amount of projects worth 300-400 million rubles with FCC. Of course, we had a great team of project managers, consultants and representatives. We had to coordinate, manage and define a common strategy. In these scenarios, partnership is always important as you can never be the smartest at everything.
All of my jobs involved a sales turnover, so for me it was clear how to start a new business in Russia. The main thing is your team and the initial investments. We needed to clearly understand how we will operate and who our customers will be. Selling electric vehicles is a transient business, and we didn’t think about becoming a car company. We needed to find a niche where the work would be interesting, and where we could do something original and not just act as a sales office.
– Six months have passed from the onset of the ideas to making the decision. What was going on during that time?
I gently probed the ground among my customers and tried to find out whether this subject may be interesting in the context of the implementation of the idea. At that time I did not plan to quit my job. I thought it would be a kind of opportunistic project within an existing company. But the more I got into the topic, the more I realized that this wouldn’t work.
There are two large sectors to the technology: vehicles and everything connected with infrastructure – that is creation, use, maintenance and further development. The vehicles were ready, but the infrastructure required recruiting experts, whom we didn’t have. We understood how to do custom engineering and personally I have done this many times, but here problem solving was necessary.
I remember the moment when we discussed the first project with the Moscow United Electric Grid. I went to my business partners and explained to them: "There is such an opportunity, I believe in it. Let's try it." The partners said that I was crazy and that I needed to concentrate on the core business of the company, but to me it had already become boring. I hesitated for about a week. And then I went to work and just said: "I quit."
– Was it a difficult decision knowing you wouldn’t be able to go back?
Yes, it wasn’t as if I could go back again after a month…
– Was it the first experience like this in your life?
Yes, for me it was the first attempt to create my own business, which I conceived and organized. I used to work as a hired manager, I had shares in the business but they weren’t my ideas being used. I got the Western companies involved in the Russian market; I created offices and businesses from scratch... This work took place under less pressured conditions, but in this situation where I have had to do everything myself, this was the first time in my life.
– How did you organize your team? Did you have a clear idea of what kind of experts you needed?
I understood that we needed key professionals, especially engineers, who would deal with equipment, charging stations, and other people in charge of software development. Also we needed businessmen and project managers. When we were looking for staff, we could not go to a recruitment agency and as a result I interviewed many people myself. The main criterion for me was to see the glint in the eyes of a person, after I have explained about the company. It is clear that the person must meet some basic requirements, but if there is no glint in the eye, it will be difficult.
Our current office is 250 square meters, employing 20 people. But in the beginning we did not have anything. The first office was just 20 square meters and it had just me and one more person in it. I didn’t like about half of the candidates for their professional skills, and 80 % of the second half weren’t interested in the idea. But now only people who are fanatical and committed to the idea are the core of the team. There were up and down periods including financial problems. We support ourselves financially so we experienced many hardships with these people. I think that we exist as a team only thanks to them – one man no man.
– If the company is gaining momentum, the share of routine work, as a rule, increases, and routine usually kills the glint in the eye. Is that true?
No, it isn’t. I can give you a good example. Our main developer of software solutions comes from an academic environment: he has PhD, graduated from the Moscow State University and his parents are scientists. Apart from the fact that he has a glint in his eyes, he knows how develop software quickly and effectively. Many Western colleagues are very surprised with the speed of his work. Then they test it many times, trying to find flaws or mistakes. And again they are surprised because they can’t find any.
It seems to me that the key people are able to develop independently within themselves. It is a big problem to make them develop within their specific field and at the same time develop the skills of their subordinates.
– How did you manage to unite the team at a time when there no market exists?
I can’t say that we had a long-term phased plan when we created the company. We had the basis of one large project. We formed the business model in the course of its progress. In the beginning it seemed to be different. The basic idea was to become a Russian partner of major Western infrastructure projects with companies like Siemens, and to do it in Russia. We spent 3-4 months on negotiations and realized that working with them in the Russian market would be very difficult. The main thing was that our added value would be negligible. Then we said: "We can do the same thing."
We reviewed all the world's solutions for the charging infrastructure and I had a clear idea of the integrity required. We worked on power engineering and tried to create an internetwork at the same time And this is our main differential.
An electric vehicle is a new market and it has an interesting property – it is located at the intersection of two industries. One industry is automotive, and the second is energy. I understand quite well how the auto industry works, because I once implemented projects for GM-AvtoVAZ. On the other hand, I have worked in power engineering for the last 10 years, so I know what network-based power engineering or power generation is. These two industries are not very similar to each other: one of them is adjustable and a monopoly, the second is a market and heavily dependent on consumers. Nowadays in the world there are many debates on the interaction of the automotive industry and power engineering. Many companies are doing the same thing but in different ways. With the charging infrastructure they still have several business models, and we can’t say that any one of them has won. They are different because there are different conditions in the market, and different people deal with them.
I got tired trying to sell someone else's product, working for international companies. Personally I have always had a yearning to do something different. And the area of charging infrastructure enables us to do this matching up to the world’s best standards.
We have some limitations. For example, in the United States it is easy to find an engineering investor who is willing to invest in some technological developments. It usually takes just a couple of weeks. Our story is completely different, so we can develop only through our own investment.
– How did the attitude to electric vehicles in Russia change during the time of your work?
In Russia there is a casual attitude to different issues. Sometimes the unscrupulous mass media plays a big role in the formation of a consistent stereotype or prejudice just because they are too lazy to perform their journalistic work. It’s easier to copy or translate something and publish it without thinking about the context. I remember that my first interview on the topic of electric vehicles was in the summer of 2011 on an Internet television channel. They were listening to me very carefully, recorded everything and at the end of the program the TV presenter came up to me, took me by the elbow as if I was mentally ill, looked into my eyes and said: "Do you really believe and seriously think that we will have something connected to electric vehicles in Russia?"
Here is another example. In 2011, two more manufacturers appeared on the American market with mass produced models. They were General Motors and Nissan. Up until then electric vehicles were produced in small series. Our journalists were looking only at the car; they were not interested in how the company had created the product, so they didn’t understand the whole business. And this involved a huge amount of money and a huge amount of intelligence. However, our journalists only knew that General Motors hadn’t initially revealed everything about the technical characteristics of the vehicle, so they wrote more about that than anything else.
In the summer of that year the importer, Mitsubishi Motors, represented by Rolf Import, decided to sell its electric vehicles in Russia and to certify them. In August there was a presentation at the "Skolkovo" Business School. The crowd of journalists had the opportunity to drive those vehicles, and after that the content began to change, so nowadays there is one or two pages describing electric vehicles, hybrids and related technologies.
– Did you find anyone in the Russian power engineering sector who was willing to discuss this topic?
At first there was nobody. I went to almost all of the senior executives in power engineering with a neat proposal to do something in this area. And only Andrei Konovalov, CEO of JSC "Moscow United Electric Grid", supported it. He personally believed in this idea. We didn’t just go in and say: "Let's buy an electric vehicle." We had an understanding of why this was necessary for Russian power engineering. We were looking for a rational link in this sector, and when we found it, we digitized it. Then we went to senior executives and said that if we made this product on a large scale, it could do a power of good for the network-based economy. If Konovalov didn’t support us, we would not have one of the main requirements for the start of any business – that is, having a customer.
Steven Chu, Nobel laureate and former Minister of Energy of the United States, created and realized a program to electrify transportation in the United States. He had a very strong team. They defined the technological vector in this area for a few decades. They made big initial investments in startup technology, in infrastructure and components that hadn’t previously existed. As a result, in the second half of 2013, there was a second generation of electric vehicles already created, which is qualitatively superior to the first.
The second phase of the long-term plan of Steven Chu has absolutely clear characteristics and is aimed at the mass distribution of electric vehicles. Its context is very simple and it coincides with what we have here in Russia: transport is a major source of pollution and a major consumer of non-renewable energy resources. We often talk about energy efficiency, so the electric vehicle is an important part of it. It is the largest consumer of the new types of power generation, both renewable and distributed.
By the way, electric transportation is actively used now in sports. Starting next year, the electric "Formula" will be held and they have already defined the list of the cities where they will hold it. Racing on electric motorcycles has already been held for three years, and their speed is the same as on normal ones.
Whether in sport or the military, there is a great need for similar technology. In many countries, especially in the United States, there is a large-scale investment in the establishment of manned and unmanned drones of all kinds – walking drones, crawling, swimming, flying – and all of them are electric. Our U.S. partner deals with charging stations, and unmanned aircraft. Their new model of an UAV can fly for two weeks at a crazy height without landing. By the way, it is a very large aircraft of the new "Awacs" generation. It can easily deploy solar panels and we’re not talking about tomorrow, it's happening today.
– Which of your predictions did not come true?
We had the illusion that all the major car manufacturers would quickly appear with their electric vehicles on the Russian market. It did not happen and that had a great impact on us. We had a big range of activities which we had never planned to do –we started selling and maintaining commercial electric vehicles. We only ever wanted to be involved with the infrastructure, but we soon realized that it would be worthless without having something to charge at those stations that we were creating. So if the mountain won't go to Mohammed, Mohammed must go to the mountain.
At present we have plenty of experience working with enterprise customers, including the internetworks. Sometimes we are the exclusive importer and we perform the whole complex routine which is related to importing, sales and service. Sometimes we just sold cars by acting as a distributor. We initially went this route because we had problems, but now we consider it to be a sufficiently big market and we understand that the presence of large corporations with their own models can’t affect us.
However there are some slight changes in spreading the word about electric vehicles in our country. State authorities have just begun to pay attention to the market for electric vehicles. In Moscow they have introduced free parking places for them. Since September the purchase tax fee on these vehicles has been cancelled, even though it was initially discussed two years ago.
– What other expectations and predictions did not come true?
We expected a higher rate of development of the Western, especially the European market. While in the USA they are already doing it as it was intended, in Europe they have only now started developing it. They have started producing models from BMW, Volkswagen Audi Group.
But I can’t say that we have made a mistake, because we can see that electric vehicles, with their 150-year history, will be popular for a long time. All car manufacturers confirm this fact.
– Does anyone know what Tesla Motors is doing in Russia?
Surprisingly, the awareness of the general community about Tesla is very high. On July 4th we held the second All-Russian Forum on the charging structure of the electric vehicles and 5-6 questions from the audience were asked specifically about the Tesla. In fact their machines are already sold in Russia. It is because this company threw out a challenge and still manages to fulfill its obligations successfully. They chose a niche with their premium Tesla Model S sports car, which is at same level as the Mercedes S-Class, BMW 7 and Audi A8. This is the best-selling car in its class in the United States. It was only a matter of time before the brought this product to Russia – to Moscow, St. Petersburg, Yekaterinburg, Kazan and other cities.
– Do electric vehicles have any other advantages in addition to environmental benefits and energy-efficiency?
There is a huge transport problem in the northern latitudes. It’s very difficult to start up a diesel bus to take people to work when it’s -45C in the morning. However, electric vehicles have fewer problems – recharging the battery is sufficient to also heat it up. It is a very common prejudice that electric vehicles can’t be used in cold conditions.
There are some myths with respect to electric vehicles in general.
Myth number 1: if everybody started driving electric vehicles, there wouldn’t be enough electricity. We have about a full account of the Russian power system. First of all, any owner of an electric vehicle will want to charge it at night because it is very cheap. At night the network in Moscow is loaded only to only 43% of its capacity. Accordingly, we are helping the power system to align the night time deficit.
As for daytime charging, there is a schedule for the real profile of the Moscow power system, where we can see two peaks: the internal urban morning and afternoon half-peak. There is enough power even in these two peak hours. And even if we have 2.1 million electric vehicles, and they all start charging at the same time during the peak hour, it will require a power increase of only 1.5 %. This is an insignificant amount, and if they are turned on at night, then nothing awkward will happen.
Myth number 2: electric vehicles aren’t more environmentally friendly than cars with internal combustion engines, because electricity produces emissions. There is officially published data from MosEnergo, where they compare the entire chain – from production, transportation, refining, power generation and transmission to its consumption by electric vehicles. The same has been done for petrol and gas. In the case of electric vehicles there are 74% fewer emissions and the difference in energy efficiency is 20 times greater for electricity.
Myth number 3: electric cars can’t be used in winter. I always explain that modern lithium-ion batteries have only one restriction. When the temperature of the battery drops to -10 degrees, then its rates of charge and discharge also decrease. But the battery in the car weighs about 200 kg, so if you drive it in-35 degrees every day, and keep it outside, then these 200 kg simply do not have time to cool down at night. This is verified by our experience in Moscow. Maybe in a week they will cool down, but not below 0. At these temperatures, there is a fall in capacity of only 10-15 %.
This myth is dispelled by the fact that all modern cars have temperature controlled batteries. The main thing is to leave it in the socket, and it will warm up or cool down when necessary. The technology is well advanced.
The main problem for electric vehicle use in the winter is cabin heating. There are vehicles where this issue has been resolved well, but there are also those where it hasn’t. All of the modern electric vehicles have a heat pump, and their body is insulated. For large cars and buses the only option is the use of a heater like a Webasto, which works on liquid fuel (gas, gasoline, ethanol and diesel). In this case, during 2-3 months of the year the vehicle will not have zero emissions, but it will still use less diesel.
Myth number 4: you can’t drive an electric vehicle in bad weather or through puddles because you can get an electric shock. This is quite funny, because all the electric vehicles have gone through a complete set of certification tests. The standard test in any country is a diving test when the vehicle almost goes under water. Internal combustion engines have a limit: the liquid must not enter the air filter. Electric vehicles don’t have such a limit. The battery is sealed; all the connections are made to IP67 standards. It means that this vehicle works in water as well as on land.
These are the main myths and they are very stable. They often produced by journalists who had heard them somewhere.
– In Russia you spend a lot of energy trying to expand the market. Why don’t you use existing markets?
We work not only in Russia. As part of the charging structures, we have developed and tested our own equipment, and we have already received the first large orders. After completing them, we will stand in line with a few major players in the market. We use our own technology – hardware, software and business models.
Now we are opening a representative office in the United States with the participation of our company as shareholders of our Western partners, because nobody in the USA wants to work with just a Russian company. In June, we had negotiations with a group of large energy companies, including Duke Energy. We have a technological plan of how to help them solve problems with domestic charging stations. Our solution is 70 % complete.
From the point of view of our market, we are doing everything possible to expand this. When you re-sell other people's things, you do not have anything left for you. And we have our own technology. I don’t want to say too much too early, but now we have several large commercial projects, after which, even for a business as big as Siemens, it will be difficult to enter the market as a player and not just the supplier the equipment. But we understand the risks and we don’t have any illusions.
– While meeting with potential U.S. partners, did you sell an idea or a team?
We sold the idea, and the team, and design. I went to several power engineering companies, from Duke Energy to small municipal company like «Indianapolis Power and Light». I communicated with the largest U.S. manufacturers of equipment for charging stations – «Eton» and «AV». It turned out that we have something to offer to all of them. We are now getting their equipment and must demonstrate everything we have talked about. We must show how it works at the level of the prototype. If they like it, we will produce the product.
– How long has it taken you to get to the stage of creating a prototype?
Let me explain that we are talking about decisions related not to the charging station itself, but the way we can manage it. The control unit has an internal name «Terranova». We have been designing it for eight months, and it is used in the prototype of our charging stations. There's more software than hardware, but the main thing is the idea.
– You're on a wave, which intends to "wash away" the old format of road transport. How do you assess the changes that are taking place?
Nobody is saying that tomorrow, electric vehicles will completely replace internal combustion engines. Today it is possible to come to any automotive conference, where there are vendors, and they all talk about what will happen to the internal combustion engine. On the one hand, there is a regulated rate of application. In America, in 2015 it will be 5.4 liters of petrol per 100 kilometers on the lineup, and its next version will take into account the number of cars, not just their models. And then Honda will not be able to produce just 500 electric compliance cars, and thus reduce the average consumption of their models. The first trend today is to reduce the size of the engine, turbo and compressor, to increase injection pressure, and reduce body weight. And the second trend is hybridization. Moreover, the technology of the first hybrids (Toyota, Lexus) has become obsolete.
– Do you see any longer-term trends?
If you look 20-30 years ahead, then it will be the transition from the battery to the fuel cell. The cost of fuel cells has decreased by half, but it still costs about forty thousand dollars apiece to make. That's a lot. There are a number of problems with the infrastructure and security, although our fuel cell flew into space back in the 70's.
There is a strong trend towards the reduction of the cost of components, such as batteries and the electric drive. Moreover, the change in cost of the batteries last year was about 15-20 %. Today technology development is very fast – the designers are working on it very seriously. It is one thing is when a small private company is doing it, but here we’re talking about BMW with its R & D center.
– What do you think about 3–D transport –cars with vertical takeoff?
I am not an expert in this area, but I can talk about the high-speed tube «Hyperloop», which is another kind of public transport, the new brainchild of Elon Musk –the founder of Tesla Motors and Space X. The fundamental technology is old enough – the transport system is based on the fact that the capsule with passengers is moving in a pipe from which the air is pumped out. Due to this, there is no resistance and friction and energy consumption for transportation of the same number of passengers is 35 times less than by traditional means. The construction cost of the machine itself is smaller because it does not need huge locomotives and steam engines. The speed is high. It is said that the route from Los Angeles to Shanghai will take only 2 hours. There are no traffic lights, intersections, so the capacity of the system will be very high. They are making the pilot project now. They are going to try it on the airlines’ busiest section in the United States – "Los Angeles – San Francisco". There are no technological barriers. The efficiency of power input is awesome. It's a different kind of electric vehicle which is a potential replacement for railways and aircraft.
– There are two portraits in your office. Why did you choose them?
One of them is a portrait of Elon Musk. Elon is known for having made money on the payment system PayPal. But he didn’t buy 50 houses, didn’t retire, did not become a fashionable investor, but instead he put his money in to a revolutionary technology companies. One of them is Tesla Motors, which is an automotive company created from scratch. Today it is the only successful manufacturer of premium electric vehicles in the world.
Another even more revolutionary company, Space X, is the world's first space transportation system set up by a commercial company. It is not just successful. Unfortunately, it supersedes the Russian Federation on the market of commercial launches, because the cost of its flight is 40 million dollars compared to 120 million dollars in our "Proton". It reuses components and is able to return the craft back from orbit, but we don’t know how to do it. That is an absolute breakthrough in cosmonautics.
Elon Musk once came to Russia and tried to launch this project with our space agencies, but no one wanted to talk to him.
I also like him because you can just call Tesla, ask them to put you through to the office of Elon Musk, and I guarantee that you will be connected immediately.
I think, today, that Elon is one of the most significant technological entrepreneurs in the world.
The second one is a portrait of Steve Jobs. I don’t think it’s necessary to comment – this was an outstanding and well-known person. We thank him for Apple, and our children thank him – for Pixar. If we didn’t have him, there would not be digital cartoons.
These two people are closer to me than any other leaders. These are our contemporaries and we can be proud of them.
Photo: Jacek Sopotnicki / 123rf.com; from the archieve of Revolta company; from website en.wikipedia.org.