Building the EV Charging Network: Lessons from Former EVgo CEO Cathy Zoi
Cathy Zoi is a clean energy veteran with a career spanning leadership roles across government, industry, and investment. Most recently, she served as CEO of EVgo from 2017 to 2023, taking the company public in 2020. EVgo is now one of the largest EV charging networks in the United States.
Today, Cathy is deeply engaged in the energy and climate space. She serves on the board of directors for Con Edison, the major investor-owned utility serving the New York City metro area. She’s also on the board of Apax, a British investment firm, and sits on the investment advisory committee for EQT, a Swedish global investment organization that recently acquired Scale Microgrids. Additionally, she’s a board member at SPAN, an MCJ portfolio company, and at Soil Organic.
Cathy’s career started at the Environmental Protection Agency, followed by roles in the White House during the Clinton-Gore administration and the Department of Energy under Obama. She’s worked at Silver Lake, founded a division of SunEdison focused on emerging markets, and helped lay the groundwork for Odyssey Energy Solutions, another MCJ portfolio company. Throughout our conversation, we explore her fascinating career journey, the lessons she’s learned along the way, and her perspective on the future of clean energy.
Episode recorded on Feb 25, 2025 (Published on March 13, 2025)
In this episode, we cover:
[3:01] Cathy’s early career at the EPA and the launch of Energy Star
[9:15] Commercializing GHG reducers in Australia
[11:59] Working with Al Gore’s Alliance for Climate Protection
[14:42] Serving as acting undersecretary in the Obama administration
[18:06] Advisory roles on investment platforms
[23:22] Experience at SunEdison and founding Odyssey Energy
[27:29] Financial discipline and capital deployment at EVgo
[32:06] The future of the EV charging business
[36:14] Evolution of pricing models
[39:18] Board work at Con Ed and risk management
[43:19] What excites her most, including beneficial electrification
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Cody Simms (00:00):
Today on Inevitable. Our guest is Cathy Zoi. Cathy is a clean energy veteran and we have a broad conversation about her background and experiences. In her most recent full-time role, Cathy served as CEO of EVgo from 2017 to 2023 and took the company public in 2020. EVgo is one of the largest EV charging networks in the United States. Today, Cathy has her hands in a diverse set of activities in our space. She's on the board of directors of Con Edison, the very large investor owned utility responsible for the New York City metro area. She's on the board of Apax, a large British investment firm, and on the investment advisory committee for EQT, a Swedish global investment organization that among other things just acquired Scale Micro Grids.
(00:55):
She also sits on the board at SPAN, an MCJ portfolio company and at Soil Organic. Cathy started her career in the Environmental Protection Agency. She worked in the White House during the Clinton-Gore administration. She worked at the Department of Energy during the Obama administration. She's worked at Silver Lake and she founded a division of SunEdison focused on emerging markets that led her to the insights that became Odyssey Energy Solutions, another MCJ portfolio company. She's had multiple other leadership roles that she and I discuss as we traverse her fascinating career and lessons learned. From MCJ, I'm Cody Simms, and this is Inevitable. Climate change is inevitable. It's already here, but so are the solutions shaping our future. Join us every week to learn from experts and entrepreneurs about the transition of energy and industry. Cathy, welcome to the show.
Cathy Zoi (02:02):
Glad to be here.
Cody Simms (02:03):
Hey, I am glad to learn from you. You have a career that has touched in so many aspects of this space that we're all working in, learning about, engaging in and it's rare that I have a guest on the show where we're not diving into one specific topic. I feel like with you, there's a menu of topics and we'll just browse as we go and talk about the things you've learned along the way.
Cathy Zoi (02:25):
Sounds good.
Cody Simms (02:27):
Let's start. I want to go way back in the way back machine with you. I think we'll work our way up through your career as we do that. But from what I could gather, in one of your earliest roles, you were with the US-EPA and then into the White House. At the White House, you actually were part of rolling out Energy Star, which is a thing that all of us see all over the place on appliances we buy and whatnot. And so from the beginning of your career having a fairly lasting impact on many of us, maybe share a little bit more about that time in your life.
Cathy Zoi (03:01):
Yeah. Well, I appreciate the question and I am really proud of Energy Star. It was a cool idea at the right time, but how did that happen? Credit where credit's due. It came from the EPA and then the Clinton White House was able to take advantage of unveiling the logo, but it was really born at the US Environmental Protection Agency. At that point, it was the mid-late 80s. I was working as part of a team when George Bush the 1st, the elder was president. What we had noticed is that you could actually work with industry in a voluntary way to create products that reduce greenhouse gas emissions. We were doing it in lighting and we were doing it in classic energy efficiency areas. But my boss at the time said, hey, Cathy, could you take a look at personal computers. They were all desktop computers.
(03:47):
This young colleague, I looked at it and it was the fastest growing electricity load in the commercial sector was these big giant. I mean, again, the kids won't even recognize them. The kids, I mean the 20 and 30 something would not even recognize these things, but they were big boxes that everybody was clamoring to get a desktop computer on their desk that they didn't have to share. Everybody was also leaving them on all the time, because they thought, if I turn this off when I go home from work, I'm going to lose all my data.
Cody Simms (04:15):
They took five minutes to boot up in the morning too.
Cathy Zoi (04:18):
They were furnaces. They created so much heat, they were pretty big energy consumer and growing fast as everybody wanted to get a desktop computer. My colleague and I looked at this opportunity and my boss at the time had said, just have an education program. Well, we all know how we responded to our parents when they said, please turn off the lights. Turn off the lights when you leave your bedroom. It was never very successful. We came up with this idea. There was an even more nascent technology called Portable Computer, which again, remember Gordon Gekko with the mobile phone in Wall Street. It was the equivalent of that.
(04:53):
It was very, very heavy, but still the portable computer had a power management technology embedded in it that went to sleep after a period of activity to conserve the battery. I went to IBM and Apple who were 35% of the market at that point and said, what about if you guys put that technology that you have in Portable Computers into desktop computers? They said, well, I mean, I guess you could, but why would we do that? I said, to save energy, to prevent pollution, to reduce people's energy bills. They were like, well, we have no marketing reason to do that. I said, ah, that's where I can come in. I can give you an environmental good guy sticker if you do this. If you embed power management technology into these desktop computers, then you can sell them as beneficial to the environment, that'll help you sell more computers. And so they were like, I'm in.
(05:39):
IBM and Apple came in and then the rest of the industry heard about it and they said, wow, we're going to do this too. Overnight, that's how Energy Star was born. I mean, not quite overnight, but it happened quickly and then we gave everybody a year to build the equipment, and that's when the logos were unveiled after Bill Clinton and Al Gore entered the White House. They said, well, we really like this idea and the notion of Energy Star being a voluntary program where industry decides to invest in energy-saving technologies, and then the products are branded with that logo. That's how it all happened. There's one actually very funny story about that journey though that is worth telling, which is after we had gotten the entire computer industry on board and excited.
(06:21):
I went to get the final approvals at US-EPA and the legal department said, you can't do this. I mean, this is months of work. The entire industry support said, what do you mean you can't do this? It's like, because the EPA doesn't endorse specific products and services. I went back completely chagrined to my office and my boss said, what's wrong with you? I said, it's over. It's done. It's finished. He said, what? I said, the lawyers, we can't do Energy Star. He said, yes, we can. Go ask another lawyer. I said, you are kidding me, right? He said, no. How many lawyers does EPA have? I literally went back and asked another lawyer who said, well, we have to put a little disclaimer on this, but no, we can do this.
Cody Simms (07:03):
That's a good lesson for any entrepreneurs listening to this podcast.
Cathy Zoi (07:06):
Oh, absolutely.
Cody Simms (07:08):
From there, Energy Star isn't just computers. It's grown into basically the entire world of consumer electronics.
Cathy Zoi (07:15):
Well, yeah, and hard appliances. I think we did, printer's next. We stayed in office equipment, but then it spread to washing machines and dryers and that sort of thing. It almost effectively became, beyond the efficiency standards that the Department of Energy promulgates, Energy Star was that next level of efficiency that you could get in an involuntary bay.
Cody Simms (07:34):
The origin of the story, which was the desktop computers being this emerging technology that were becoming a significant amount of load consumption. Boy, it sure reminds me of everything going on in the data center world today at a mega, mega, mega larger scale.
Cathy Zoi (07:49):
Yeah. One of our philosophies of Energy Star, which I think again is also relevant today, is that, we were from the government, but we weren't going to tell the product designers how to design the products. We just gave them the end point. What we had to do was define what is the definition of a low power state. We said, it has to go to a low power state after a period of inactivity. At that point we said the low power state was 150 watts. Well, they far surpassed that, but we set the bar and then created a competitive market.
(08:19):
By the time that the equipment came out, if I remember correctly, most of them were below 20 watts when they went to a low power state. The same is true with data centers. I don't think that most government officials are going to know all of the intricacies of how to really do energy management at a data center, but we want to have them be as efficient as possible. Let's create a set of incentives for them to be able to do right by that. Create a great product that is going to be giving us all sorts of hyperintelligence through AI or wherever it is, but to do it in an environmentally responsible way, in an economically sensible way.
Cody Simms (08:52):
What a great lesson and great story, thanks. I think that view on how it may apply to today's world is hopefully very prescient because goodness knows we're going to need it as we look at these data center and AI forecasts in front of us. From that role, you then took a detour over to Australia for a few years?
Cathy Zoi (09:08):
Yeah.
Cody Simms (09:09):
Explain more about that.
Cathy Zoi (09:11):
It wasn't a detour, it ended up being 12 years.
Cody Simms (09:14):
Okay. A long tour.
Cathy Zoi (09:15):
A long tour. I had met the fellow who was just the very first CEO of the EPA of Australia, the Commonwealth EPA. He asked if the US could spare you for a year, I'd love for you to come help me out and get this going. My children were very, very small when I was working at the White House. I was ready for a little bit of a break. I still remember when I went to say goodbye to Al Gore, he said, I'll see you back here in 12 months and all that other stuff. My husband had been working for a congressional agency that Newt Gingrich had gotten rid of, so it was a good time for him to take a break. And then we went to Australia and completely fell in love with the place.
(09:48):
And then each of us, my husband and I kept getting really interesting professional opportunities. I mean, the thing about Australia is it's very, very innovative. I was able to get a job as a founding CEO of a $50 million fund run by the New South Wales government to help commercialize greenhouse gas reducers. We developed the world's first national green power program in Australia in a matter of a couple of months. It's a smaller place, it's a little less complex, and so it could be a really, really good proving ground for cool ideas. We stayed there for 12 years and then Al Gore called me and said, will you come back and run my NGO? And so we moved back to the United States at the beginning of 2007.
Cody Simms (10:30):
He said 12 months, it ended up being 12 years. And you did rejoin him?
Cathy Zoi (10:33):
Yeah.
Cody Simms (10:34):
First of all, on the Australia point, I was just talking to a venture investor last week who is Australian, and she was saying how Australia is an overlooked market for founders but is actually an incredible incubation lab for technologies. Obviously every country's energy's ecosystems are unique and different, but Australia's is similar enough to the US where you can try things and learn that may be able to be applied to the US. I don't know if you would agree with that sentiment.
Cathy Zoi (11:05):
I completely agree with it. I completely agree with it. On the electricity grid side, Australia introduced competition into electricity markets first, and figured out what could go right and wrong. Frankly, the Texas market took lessons and PJM and the Northeast, all took lessons from what happened in Australia much earlier. All kinds of efficiency and renewables programs were really pioneered in Australia. But then Australians will look at the United States and say, yeah, even Australian entrepreneurs, but I got to get to the US because it's big and there's more capital available. There's more venture capital available obviously, even per capita in the United States. I feel privileged to be able to have worked in both places and flourished, and my kids grew up with Australian accents, but then came back to the United States for university, but we all long for the beaches of Sydney.
Cody Simms (11:52):
Amazing, amazing. Maybe share a bit about then the work you did for former Vice President Gore when you came back.
Cathy Zoi (11:59):
Al was always three steps ahead of the rest of us in terms of thinking about what really needs to be done to get our hands around any particular problem. The insight he had is that in order to get the mass market mobilized around climate solutions, we needed to have a mass education communication campaign. He created this organization that was at that point called the Alliance for Climate Protection that was going to invest in the Super Bowl ads and campaigns to get to ignite that pressure that could be then brought to bear on elected officials, business people and everything else.
(12:34):
That's what the Alliance for Climate Protection was. We raised, I mean, in those first couple of years we raised a $100 million and did some really, really pioneering things. Subsequently, Al has merged the Alliance for Climate Protection with the Climate Reality Project, which again is similar sort of ground up, getting more people to understand the gravity of the problem. You remember this happened post-Inconvenient Truth. Obviously it was a watershed event when Inconvenient Truth was a global success, and what do you do with that momentum to get more and more support for the solutions.
Cody Simms (13:05):
I was going to ask, it feels like just looking at your background, this is the first role you took where the word climate or the focus on climate change as opposed to energy efficiency or reducing pollution or this, that and the other became the anchor to what you do. Is that true?
Cathy Zoi (13:21):
It may have been the first time the word was there and the title of the organization, but no. When I started working at the EPA many years before, I left private consulting where I was doing electric utility modeling and things and said, I want to work on climate solutions. Again, at that point, George Bush, the elder was president, the chief of staff John Sununu didn't acknowledged climate change. We did all of our work that reduced greenhouse gases that prevented pollution, but it was under the radar that it was actually addressing climate change. I first got excited about helping to solve this problem even when I was in graduate school, which again was very early and it wasn't widely known that it was going to be a big huge deal.
Cody Simms (14:02):
Yeah. Then after you worked with Gore, then you went back into the DOE?
Cathy Zoi (14:06):
Yeah. When Barack Obama was elected president.
Cody Simms (14:10):
I guess it wasn't back in. This is into the DOE for the first, back into the federal government.
Cathy Zoi (14:13):
Yeah. Back into the federal government as a political appointee. Because Barack Obama and Joe Biden fully appreciated that there was going to need to be a lot of work that needed to be done. Fundamentally, I love technologies. I also love managing complex problems. I love public policy and I like leading organizations. Again, a really huge privilege to be able to land at the Department of Energy then when Steve Chu was the secretary, because he too was so committed to how do we do this and how do we do this fast.
Cody Simms (14:42):
What was the specific role you were doing there?
Cathy Zoi (14:42):
I started off as assistant secretary of energy efficiency and renewable energy, and then I subsequently took on the role of acting under-secretary for all of the civil energy programs, which that included nuclear and the electricity grid as well as fossil fuels and carbon capture and sequestration. It was a really, really cool set of responsibilities.
Cody Simms (15:00):
I mean, this was the time when, I think back to that era of Obama, where he came in with large ambitions around clean energy, but got focused on healthcare and the federal government became very focused on getting the Affordable Care Act passed. How did that influence or impact the work you were doing in the DOE?
Cathy Zoi (15:19):
I still had $30 billion under my tutelage to manage and invest. 2009, we had ARRA, which stood for American Something Recovery Act. I don't remember what the second R was, but anyway.
Cody Simms (15:30):
Right. We were dealing with the largest financial crisis in our lifetimes.
Cathy Zoi (15:35):
Fast-forward to Joe Biden, we got the IRA and the Bipartisan Infrastructure Law. Those were more zeros, more in that amount of money, but prior to that, R was the single biggest government investment in clean energy. While legislatively, the big pushes were really about healthcare reform financially and from an appropriations perspective, we were investing really cleverly in how to commercialize technologies. One of the things that I like to do was, to the extent that we could match the technology need with the public policy instrument that best fit the stage of that technology's development. Really early stage stuff, more R&D, later stage stuff, more cost sharing with the private sector.
(16:21):
Things that are already mature, but we know they could be better. That's where you could get an appliance efficiency standard. That would be the best policy instrument. It was really fun intellectually to try to optimize those correct roles for government and not have government overreach or spending money giving grants to things that were not quite ready for prime time. After I left government, I had a whole lot of fun going to Stanford to teach. One of the favorite things I had to teach was matching the technology challenges with the policy interventions that could be most useful there.
Cody Simms (16:52):
Having just now lived through the Biden era, do you feel like the DOE over the last four years built on those lessons learned from the Obama administration, given that there was quite a bit of familiarity between the two administrations?
Cathy Zoi (17:05):
I think so. There was so much money that had to get out the door during the Biden administration. Yeah, absolutely.
Cody Simms (17:12):
And so from there, then you went to private equity. You started actively driving large amounts of dollar investments into the space at Silver Lake.
Cathy Zoi (17:20):
Well, yes, but we were a growth equity fund, and it turned out it was a little early for a growth equity fund. Again, this goes back to the same challenge of, where is the technology development, what sort of capital or what sort of public policy is it best fit? Now, there are lots and lots and lots of tech investment opportunities for private equity to choose from in clean energy across the spectrum, but back in 2011, there weren't very many to choose from.
Cody Simms (17:46):
Yeah. Let's jump to today then. We'll come back to your background tour in a minute. Since we're on the topic of private equity and growth equity, you're involved with EQT, you're involved with Apax, you're engaged in multiple firms that are deploying significant amounts of capital into this space. Maybe share a little bit about the roles you're doing there that motivated you to get involved.
Cathy Zoi (18:06):
When I decided to retire from EVgo a couple of years ago, I mean again, with a long runway so that we could have a really well-managed transition, I knew that what I wanted to do after I was being a full-time 24/7 CEO was something that's more of a portfolio approach. I thought what I would do probably was go on to a couple of different company boards, and that would be that. What has surprised me is how intellectually interesting it is to be on the advisory boards of the investment platforms themselves. That scratches a lot of my intellectual curiosity, plus it also builds on my background because as you noted in the intro, I've had my hands in lots of pies and I managed the whole portfolio when I was in the Department of Energy and have been involved in the supply side, the demand side, agriculture, almost all the greenhouse gas, submitting technologies. I've thought about how do you deal with that.
(18:54):
Today you've got technologies that have reached a level of maturity, that private equity views it as, if it's a good company of good investment on behalf of their shareholders. That is only because we're now at a stage where the unit economics of solar work, the unit economics of wind work, the unit economics of battery storage work, but all of that. Then you're talking about, is this a good management team executing well? Do they know how to gain market share? And so that's why right now you've got the likes of EQT and Apax. I mean, and KKR and BlackRock. All of the big names are saying, this makes good financial sense and we're really glad that it actually is helping to solve a climate problem, but it makes financial sense.
Cody Simms (19:39):
Do you see these companies as looking for picking up large majority ownership viewing businesses as, hey, I mean, the way I see it, is a lot of these companies in energy and climate tech required a lot of capital upfront to get whatever thing they were doing going and now they're going to essentially print money on those for 20 or 30 years. And so you have these large upfront costs that were maybe borne by earlier investors in the capital stack, and now you can come in and buy out or invest in these businesses and have access to a very substantial cash flowing machine for quite some time. I'm curious how you see that business model playing out.
Cathy Zoi (20:20):
I mean, it's great how the market works. It's a risk return equation. If they're literally just printing money, then there's going to be very little risk and therefore there's going to be a nice return, but not a gigantic return. The slightly earlier stage stuff. When we were at EVgo. We were very early in owning the fast charging stations. In those really early days, the market was like, yeah, but we're not really sure when EVs are going to get here and you're going to get back the money that you're investing. Call it $150,000 for charging stall. You're going to get that back as more EV drivers use that over the life of it. We would model the investment over seven to 10 years. In those early days, it wasn't completely clear. Now, fast-forward to today, EVgo's utilization on the network is on average 20%, all of a sudden now there's new capital that's a bit more risk averse saying, this is a pretty good bet, whereas some private equity firms still won't do it unless it's completely underwritten with a power purchase agreement or an off take agreement or everything else.
(21:22):
Again, it's different colors of capital for different risk appetites and too, do you spend a lot of time in venture, you've got a high risk appetite, but high return expectations. What I get to do now is I get to work in that whole value chain. I still am doing a bunch of work with early stage investors where it is really risky bets, but they can be category killers if they work and if they're managed well, all the way through to one of my board responsibilities with Con Ed, literally the oldest electric utility in America, Edison himself. But even so Con Ed is interesting to me because they have a commitment to phase out fossil fuel use in New York City. Goodness gracious me and I. That's a cool thing to help be able to make happen. To your question, the money doesn't just fall from the trees now that the technologies are more mature, but it certainly is easier than it was 20 years ago.
Cody Simms (22:16):
Do you see growth equity having interest in digging in on asset finance and structured capital requirements of these companies or is it more around trying to own more of the Hold Co and see these companies generate cash dividends from the yields that they're driving?
Cathy Zoi (22:31):
I think it depends on the personality of the investment platform. I was at SunEdison when the first fling of HoldCo OpCo things happened, and it actually was the undoing of SunEdison. I think there were some really big lessons that were learned there. Now, I think there is a resurgent appetite in AssetCo HoldCo where you can put the technology investment in the R&D operation in the TopCo, but the AssetCo can spin off returns. It's all about risk and return. The return profile is going to be lower for the AssetCo, but it's going to be more assured. That works. I mean, that really, really works. Well, the one thing that I have learned in the past few years working so closely with the investment community is, they will come up with a structure that meets their risk return profile.
Cody Simms (23:15):
It will get met. It's up to the entrepreneur and the founder to find the right person to problem solve for you on that, right?
Cathy Zoi (23:21):
Yeah.
Cody Simms (23:22):
Let's back up. We've touched on a few of these items that I do want to hit on. Let's talk about your time at SunEdison since you brought it up. A landmark company in the clean energy space that certainly had ups and obviously some downs as well. Talk about your time there.
Cathy Zoi (23:37):
I was teaching at Stanford and leading a really cool program called the Energy Transformation Collaborative. One of our guests was the then CEO of SunEdison, Ahmad Chatila. He and I just got on a house on fire and he said, Cathy, I'm doing this sort of mainstream solar thing, but I always like to think about the next horizon, and I think the next horizon is off-grid solar in emerging economies. I said, oh, that's fun. He said, I'd like to incubate a new company within our universe, would you come and be the founding CEO for that little company?
(24:06):
You'll be off to the side, but we'll give you some resources because I think it can work. Anyway, I said, that sounds really, really neat. And so I decided, sure, I'd go do that. And then I got a knock on my door at Stanford and it was a lady named Emily McAteer, whom you've interviewed for this and you've invested in, and Emily said, hi, I'm Emily. She was finishing her MBA, joined MBA, Masters of Public Policy. She said, I'm supposed to go work at some fancy consulting firm, but I really want to come help you do what you're going to do with SunEdison. I was like, wait, who are you?
Cody Simms (24:35):
Awesome.
Cathy Zoi (24:36):
She was a total rock star. She and I went to SunEdison together to start SunEdison Frontier Power. We had a 100 mini-grids we were running in India. We were about to launch a couple of projects in Kenya and Tanzania and maybe Senegal. And then SunEdison went bankrupt. SunEdison Frontier Power was collateral damage to the whole big operation coming apart. But the cool thing is what we did, is we had learned so much about what the challenges and the benefits of building solar-powered mini-grids in emerging economies, that we took all of those learnings and said, what can we do to make it easier for this to happen? Because there's still a billion people who don't have access to electricity around the world. And so then eventually Odyssey was born to help enable the delivery of power to people everywhere.
Yin (25:24):
Hey everyone. I'm Yin, a partner at MCJ, here to take a quick minute to tell you about the MCJ collective membership. Globally, startups are rewriting industries to be cleaner, more profitable and more secure. At MCJ, we recognize that a rapidly changing business landscape requires a workforce that can adapt. MCJ Collective is a vetted member network for tech and industry leaders who are building, working for or advising on solutions that can address the transition of energy and industry. MCJ Collective connects members with one another with MCJ's portfolio and our broader network. We do this through a powerful member hub, timely introductions, curated events, and a unique talent matchmaking system and opportunities to learn from peers and podcast guests. We started in 2019 and have grown to thousands of members globally. If you want to learn more, head over to mcj.vc and click the membership tab at the top. Thanks and enjoy the rest of the show.
Cody Simms (26:25):
Odyssey is the company that Emily, who you mentioned is now the CEO and co-founder of that. You helped stand up. We're proud to be investors in Odyssey. Emily's amazing. Boy, especially with all the recent USAID stuff going on around the world. What an incredibly important mission to be on the forefront of helping to drive clean energy into these emerging economies.
Cathy Zoi (26:47):
Absolutely. It really is. Emily and I together spent lots of time on the ground. I mean, during that period I was going to India every six weeks. I think you have to be there and experience it.
Cody Simms (26:56):
Emily would probably kick me for saying what an important opportunity. I would also say and an incredible business opportunity, because these are economies where they're leapfrogging the grid in many cases.
Cathy Zoi (27:08):
Well, they should because it clearly is less expensive to do a mini grid than it is to build long lines of power. And so that's what we're starting to see. Having spoken to Emily recently, a lot of the activity is in the commercial sector for Odyssey. There's still going to be a need to figure out how to do this at the residential village level. That's an unsolved problem.
Cody Simms (27:29):
How you actually finance the procurement of this equipment where you're in immature credit markets, I think is fascinating problems to try to solve. From there then Evgo, which is, when I first heard your name, I got to know you as the co-founder of Odyssey from Emily, and then I Googled your background. I was like, oh my gosh. She's the CEO of EVgo. This is this company that we all see all over the place. You rode the wave of this first EV charger deployment go-go-go time. I have so many questions about your time at EVgo and I'm excited to learn about what you experienced.
Cathy Zoi (28:02):
I got to EVgo when it was about 50 people, really early market. Most of the work was in California. It was basically a regulatory compliance company that had to roll out fast chargers in California because of some sort of settlement that NRG had had on something.
Cody Simms (28:18):
With Enron, right? It was way back to the Enron days.
Cathy Zoi (28:22):
Yeah, but the private equity firm, Vision Ridge that had purchased EVgo from NRG knew that this was going to happen. This was going to be a trend. The question was, and this gets back to risk, when? Because success in business, it has to do with hard work, of course. It has to do with smarts and it has to do with timing. And so, one of the things that I tried to bring to EVgo is a financial discipline about when we would deploy capital, and I know that there's no end of frustration amongst people who already have EVs. Why aren't there more fast charging stations everywhere? Well, the answer is because they're very, very expensive, and if they don't get used, you don't get paid back your capital. And so what we did is we developed very, very sophisticated algorithms about, we want to build just ahead of demand, but not too far ahead of demand.
(29:13):
Where is there going to be enough of an EV population that needs to charge away from home so that we can get a return on investment over eight years? They weren't asking for a one-year payback. It was pretty modest, and so that's why we deployed at a rate that was sensible to our shareholders, and this is why today EVgo, I don't know what the latest number is on the number of fast chargers. It's in the several thousand compared to Tesla, which invested without needing to make any money on this network. Tesla invested in creating a really good charging network so that it could sell more Teslas. EVgo is a standalone charging company doing fast chargers, which are very, very capital intensive, had to be much more judicious about it. If you ask me what did I contribute, I think it was financial discipline and deployment of capital.
Cody Simms (29:56):
On that note, when I think of where the real growth of EV chargers are, I assume most of them are at home and at work. Then you're talking about trying to find public locations that are going to be needed by people who aren't charging at home or at work. I don't know if my assumption is correct there, but that feels like hard math to figure out, a real challenge.
Cathy Zoi (30:17):
I think if you take it as red, one of our inputs, we had a 13 variable regression that would figure out where we could make money on this, was the density of multi-unit housing. If you've got a lot of apartments, then you're going to have people that need to charge away from it. What's a close proximity to where a lot of Uber and Lyft drivers live? Because a lot of Uber and Lyft drivers live in apartments and they need to charge every day because they're driving so many miles. Those sorts of tools help EVgo site its stations in really good places. Interestingly, in those early years, you couldn't make money on highways. It's only recently now that there's enough EVs on the road that EVgo is deploying on highways and or if there's grant programs that will subsidize underwrite building on highways. That's what we did.
(31:01):
Well, it's fascinating. Again, in my last year, I was a CEO for six years. My last year at EVgo, what we were seeing is people, even if they had charging at home, were convenience charging when they went to the grocery store, and I'm not exactly sure why, but that was great. It was a pleasant surprise, but we didn't plan on that. We planned on basically that fast charging is only ever going to be, I don't know, 11 or 12% of the kilowatt-hours that are consumed for charging electric vehicles at large, which is to say most people will charge at home overnight or at their workplace on a level two all day long while they're at the office.
Cody Simms (31:36):
If you had to think 10, 15 years from now, when you look at what the EV charging landscape looks like, do you expect that the auto manufacturers will have a bigger role to play in the space following Tesla's playbook? Do you expect the gas station and oil companies will have a bigger role to play? I know Shell's already rolling out a bunch of charging stations and whatnot, or do you think it'll continue to be new entrants to the market like EVgo and ChargePoint, et cetera that own this market?
Cathy Zoi (32:06):
Look, I don't think it'll be the car companies. I don't think that's a natural one, particularly. I think what it's more natural for, if you've got the real estate to either contract with somebody else, to have some of your real estate be used for fast charging or gas stations on the highways, we'll all have fast chargers. EVgo has a partnership with Pilot Flying J and are jointly building the fast chargers in most places there's truck stops. That'll continue to happen. It's pretty capital intensive and it requires a whole bunch of expertise. It requires backend software. One of the things that, you'll hear me be slightly whiny, Tesla did a great job, but Tesla's charging network only had to talk to Tesla cars back in those days. EVgo from the get-go had to talk to 50 different models of EVs, all of whom had different software.
(32:58):
I mean, everything is a computer on wheels now. All these buggy things. We had to figure out how to make that work, that's not for the faint of heart. I think there's going to continue to be a few specialists like EVgo that do their job really, really well, and whether they're white-labeled or they're branded EVgo, it doesn't really matter. It's a lot of high-powered equipment. It has safety requirements and everything else. It's just fast charging is so very, very different than level two. I mean, level two is basically a dryer outlet. When I have friends that buy EVs and they say, well, Cathy, which company should I use for my level two at home? I said, all you need to really do is get your electrician to come and make sure there's a dryer outlet in your garage. Sure, spend some more money and get some more bells and whistles, but it doesn't really matter. You can tell your car when you want it to turn on and accept the charge, so you don't need that gizmo on the side of your garage. Fast charging is really different.
Cody Simms (33:50):
Yeah. I'm so fascinated by this. Both my grandfather in Kansas ran a chain of convenience stores and my in-laws in Kansas ran a separate chain of convenience stores. Thinking about the future of how we fuel our vehicles and what that looks like in our lives, is very personal to me. I often think that the charging or the gas station to the future is essentially like Starbucks. It's like where are you going to go in and spend 15 or 20 minutes and can you plug in and there's some tie-in to get you into the store to buy something. That feels like where I think it goes. I think to your point, then who cares whose logo is actually running the charging? You don't necessarily associate it with this is a charger run by this company or a charge station run by that company. It's more who has the partnership with the place I'm trying to go in the first place.
Cathy Zoi (34:39):
No, that's right. I mean, one of the things that we did at EVgo is that we developed some very cool software so that if we were in a Kroger parking lot, we could collaborate with Kroger so that when somebody plugged in, they could get a coupon from Kroger that matched their previous buying power. That's the sort of stuff that you'd expect. It shouldn't be that you have to go off to some far-flung place and sit in your car for 20 minutes by yourself. You should be able to multitask. EVgo would always be looking for where do people want to be anyway, let's build fast charging there.
Cody Simms (35:12):
Do the charge network operators tend to own those chargers and own responsibility for how they're monetized or do the real estate owners manage them or does it depend?
Cathy Zoi (35:23):
It depends. EVgo is fiercely an owner and taking responsibility for the performance of those chargers. For better or for worse. There are some old legacy chargers that have not stood the test of time very well. Those are all getting yanked out now, but we own it and we feel like we'll provide a better customer experience. I say we, I'm still very fond EVgo, so I say we.
Cody Simms (35:43):
I love it.
Cathy Zoi (35:45):
But ChargePoint would sell the equipment, for example, to an apartment or something like that and then charge a service for operating it, but wouldn't continue to keep the equipment on its books. The business models can vary.
Cody Simms (35:56):
They vary, and then ultimately who's responsible for servicing it, I guess depends on the nature of that business model. In terms of making sure it has good uptime, making sure that it's working, all of that sort of thing. Whoever is ultimately responsible for monetizing the dollars on a per charge basis is probably the one who cares the most about it, right?
Cathy Zoi (36:12):
That's right.
Cody Simms (36:14):
You have to get those incentives aligned, which I'm sure can be tricky sometimes. On that point, the evolution of pricing models and all of that will ultimately depend on who is earning the revenue from the actual charging utilization. If you're going to start to see things like surge pricing or things like that roll out, that'll depend on. Tesla does congestion pricing at their superchargers, they've clearly been trying to at least optimize to getting you out of there and not just leaving your car sitting and blocking a bay.
Cathy Zoi (36:43):
I think anybody whose business model is based on throughput of that on those assets is going to go that way. EVgo does too. EVgo has peak pricing off-peak pricing. It's a pretty sophisticated look. There are more price-sensitive drivers. EVgo's, Uber and Lyft customers are more price-sensitive, they can come in for an early bird price and most of EVgo's markets that is much less expensive than the peak pricing. Guess what? It also happens if the utilities love it. Utilities of California said, would you guys mirror our peak pricing thing so we can shift demand? We said, sure. It's a nice collaborative ecosystem that is very, very useful, but at the end of the day, if you own the assets, you've got to make a return net-net on that capital you've deployed.
Cody Simms (37:24):
Did you see any instances where the overabundance of investment tax credits and whatnot created bad incentives to deploy things where they shouldn't have been or do you feel like the companies have all been pretty efficient at following the right footprints?
Cathy Zoi (37:36):
I may be a little out of date. I have not followed all of the NEVI stuff in the past two years, but in the early days in California, there were some companies that thought the grants that say the state of California were warning were so generous that this would be a great thing, but they actually didn't really understand the cost of operating a good charging station. They started and then they bailed, or they didn't understand what it would really cost to construct the sites. You have to have a really good knowledge of what the all-in costs are to make it work.
Cody Simms (38:05):
This is back to the cost of actually maintaining this for the next 15, 20 years. Right?
Cathy Zoi (38:10):
Yeah. We were just straight up about how we modeled it. If it didn't deliver a return, then we wouldn't build it.
Cody Simms (38:16):
This is not an EVgo specific question. What do you think the market overall has learned from this wave of companies that went public via SPAC in 2020, 2021? What lessons should we learn going forward about how and when and where capital is available and how to build companies for the long term as a result of that?
Cathy Zoi (38:37):
I'm not going to generalize about SPACs because I think they come in and out of fashion like hemlines. I just was reading last week that SPACs are back. For me EVgo happened to be a SPAC. That's immaterial. The question is, is there an investment thesis that over the next time horizon that matters to me as an investor, this company is going to deliver a return that I want? Is it well run? Is it in a good sector? I still maintain that SPAC or no SPAC, EVgo is a good investment. EVgo is doing what it said it's going to do. The utilization numbers are climbing faster and continuing to grow prudently. That's what matters more to me than what the tool or the instrument was.
Cody Simms (39:18):
Awesome. I want to ask, you mentioned you're on the board of Con Ed. What a fascinating role. You were in this high growth go-go startup company. I mean, EVgo wasn't a startup per se, but it was basically a startup, high growth, high deployment focus. You sit on these board of advisors of multiple large growth equity firms that are looking at where they should deploy their capital for what's the next wave to surf. Here you are also, like you said, on the board of this incredibly seasoned company in New York that is, what? The largest, I think, investor owned utility in the country. Is that correct?
Cathy Zoi (39:57):
Largest on what measure? Because New York has so many people. It might have the most people. I don't know that. It is the oldest, and I think it is proudly these days the most reliable. There's a benefit to Con Ed by and large other than in Westchester. It is an underground network. It doesn't suffer the ravages of the increasing to the same extent other utilities do of wildfires and hurricanes. That's been a real benefit. The team is also very, very seriously committed to maintaining that reliability.
Cody Simms (40:29):
You just stole my question. I was going to ask, how much do you have to think about or focus on resilience aspects? There's a ton. We can talk about load planning, capacity planning and all of that, but when it comes to resilience, as a board director, your number one job I think is probably helping to manage risk of the company. How much is climate resilience part of that risk equation?
Cathy Zoi (40:54):
The people at Con Ed remember palpably Superstorm Sandy. Since then, a very, very serious set of investments that have been made with an eye toward resilience. Some people call it hardening. The Utilities Commission has been very, very supportive. I mean, with a public utility, it's got to be hand in hand. The regulator and the utility are working together to create great economic outcomes, great reliability outcomes, great environmental outcomes. I think that the New York Utility Commission, side by side with the executive team at Con Ed are doing a great job.
Cody Simms (41:28):
Con Ed is a regulated utility, I believe. Yes?
Cathy Zoi (41:31):
Yes.
Cody Simms (41:33):
How much do you pay attention to things that are happening in ERCOT and the deregulated markets as a sign of where things may eventually be available for you to manage as a large regulated utility? I think of in particular battery storage going bananas in Texas today. Lithium ion battery storage, solar and wind obviously has been growing like crazy. I feel like on the East coast, these things are taking a little more time to maybe get adopted. I'm curious how you look to those markets or not for inspiration of what may be to come.
Cathy Zoi (42:09):
I think that everybody on the Con Ed board and everybody on the leadership team is looking at all markets to see how do we do what we do. Con Ed is different. Even amongst New York utilities, Con Ed is obviously the most urban, has most of its network underground. But with that said, load is growing everywhere, with electrification of transportation, with electrification of buildings, and then with AI. All of those data centers being built. Everybody's thinking about, how do I most cost effectively meet my customer's needs for power and maintain the integrity of the system. Inevitably, that points you toward multiple different sources of energy, of distributed generation, of two-way power flows, of efficiency. Con Ed was already doing many, many of those things for sustainability reasons. What's so great to me after all of this time that I've spent in the career, they're all the same. Economic outcomes, sustainability outcomes, reliability outcomes, they all go together. Distributed generation makes good sense. Yes, Con Ed, while it's different looks all across the country and across the world the best practice, and sees what can be done, that's relevant to Manhattan.
Cody Simms (43:19):
You've got your hands in lots of cookie jars at the moment. Are there anything over the next five, 10 years you're most excited about, looking forward to seeing happen, motivated to help make happen? Any major trends that are really driving you right now?
Cathy Zoi (43:36):
Beneficial electrification is something that I'm passionate about. I have an agricultural property in Ojai, California where I'm right now. We had a gas leak, we had to, and it would've cost tens of thousands of dollars to figure out where the gas leak was. We said, all right, well, let's bring it forward when we're going to go all electric. It was a catalyst a couple of years ago to put the solar panels on. We have two EVs. We got rid of all the gas furnaces, gas, water heating, and did all electric grabbed heat pumps and everything else. And so I've done that and it took too long and was a little too hard to do. I really want to be part of making it easier for that transition to happen. I mean, that's one of the reasons I was excited about the invitation to join Con Ed's board.
(44:16):
How are you going to do that for apartment buildings that use natural gas right now? That I'm very, very interested in. I'm interested in how that connects to modernization of the grid and two-way power flows. Our two EVs that are both sitting in the driveway right now, if there's a power event in Southern California, we could be helpful there with that capacity. How do you enable that to happen seamlessly? One of the reasons I joined the SPAN board is because I feel like SPAN has developed a very, very cool technology, set of technologies actually, and software to make that really, really easy for householders.
Cody Simms (44:52):
We're also proud investors in SPAN here at MCJ, I agree with that sentiment.
Cathy Zoi (44:57):
That's what I'm really, really excited about.
Cody Simms (44:58):
Well, listen, I am so grateful to you for taking the time to recount your journey with us and share the work you've done. I hope you're very proud of everything that you've been a part of. You've had your hand in a lot of developments over the last couple of decades. It's an honor to get a chance to chat with you and hear more about your experience in those initiatives.
Cathy Zoi (45:18):
Well, Cody, thanks and thanks for providing a platform for practitioners like me to talk about what we do, because there's a lot more yet that needs to be done. As we can keep the excitement high, attract great talent to our sector, it's as Martin Luther King said, it may be a long arc, but it's going to bend our way.
Cody Simms (45:35):
Cathy, if you could go back and talk to yourself when you were at the EPA or the White House, what would you say to yourself, going back to the start of your career?
Cathy Zoi (45:44):
I would remind myself of the Martin Luther King quote, because there's been lots of stopping and starting. Administrations change or funding or the capital markets tank, but frankly, the technology keeps getting better and solar will be the thing that will be everywhere, et cetera, et cetera, et cetera. I would remind myself to try to be patient although, I don't know. I think my impatience has helped me get out of bed every morning. I don't know what I would say, Cody.
Cody Simms (46:08):
That's all right. I love it. Thanks for your time. It's been great.
Cathy Zoi (46:10):
Okay, thanks so much. Take care.
Cody Simms (46:13):
Inevitable is an MCJ podcast. At MCJ, we back founders driving the transition of energy and industry and solving the inevitable impacts of climate change. If you'd like to learn more about MCJ, visit us at mcj.vc and subscribe to our weekly newsletter at newsletter.mcj.vc. Thanks. See you next episode.
