Volts podcast: Horace Luke on decarbonizing the world's two-wheelers

In this episode, I discussed swappable, rechargeable batteries in
two-wheeled electric scooters with Horace Luke, the CEO of
Gogoro. Luke’s company is selling subscriptions to batteries in
bustling emerging-market cities like Taiwan. We talked about
consumer requirements for swappable batteries, the other kinds of
technologies that might use them, and his plans for expansion.


Full transcript of Volts podcast featuring Horace Luke, April 22,
2022


(PDF version)


David Roberts:


Electric vehicles are all the rage these days, but at least here
in the western world, most of the attention has focused on
four-wheeled passenger vehicles, first Tesla and then all the
companies trying to catch up with Tesla. However, across the
globe, more than 50 percent of commute miles are undertaken on
two-wheelers — scooters, mopeds, and the like. China, India, and
Indonesia alone contain more than 500 million two-wheelers;
anyone who has visited big cities in those countries has seen the
vehicles swarming the streets.


And they are dirty as hell. Their two-stroke motors emit as much
as five times the pollutants of the average new car in the US.
Millions of people have died from two-wheeler pollution, to say
nothing of the climate impacts.


But two-wheelers are difficult to electrify. Their owners tend
not to have extra cash; theft is a constant danger; and urban
density makes plugging in, especially in a place sheltered from
the elements, difficult.


Today’s guest, Horace Luke, set out to solve this problem with
his company Gogoro, founded in 2011. The idea was simple:
consumers would own the scooters, but Gogoro would own the
batteries, which would be made available in stations across the
urban fabric, such that riders could easily find one to swap.
Consumers would subscribe to the service, effectively ensuring
that they would always have a charged battery available.


The company took a different course than he expected — Gogoro
ended up building its own scooters, stations, and batteries,
doing far more hardware than the software-minded Luke had
originally envisioned — but his persistence won out and the model
is taking off, preparing to expand from Taiwan (where it started)
to a range of other burgeoning megacities in emerging economies.


It’s a clever model, a mental shift that opens up all kinds of
new possibilities, so I was excited to chat with Luke about the
problem of two-wheelers, the consumer experience of subscribing
to Gogoro, and the other kinds of things, outside of
transportation, that cities might be able to do with thousands of
distributed, swappable batteries.


So without further ado, welcome, Horace Luke, to Volts. Thanks
for coming. 


Horace Luke:


Thanks, David. 


David Roberts:


I'm so taken by this whole idea. Tell us a little bit about the
problem of two-wheelers: where they are, how dirty they are, and
how big a part of the climate problem they are.


Horace Luke:  


Most of the people in the audience probably don't realize that
more than 50 percent of all commute miles done globally every day
are done on two-wheelers.


While we in the United States look at it as more of a
recreational or very short-distance commute, in the East –
Vietnam, Thailand, China, India, Indonesia – you can't cross the
street without being hit by one if you’re not careful. They're
just everywhere. In China, India, and Indonesia alone, there are
more than 500 million two-wheelers roaming around every day –
taking people to school, to work, to the market. They are the
absolute utility dependency vehicle that people look for when
they're moving around town, and people on average ride somewhere
between 300-700 miles a month. 


Unfortunately, because of the economics of it, the chance of them
being clean is not very high. When compared to a gasoline vehicle
in, let’s say, California, there are five times more pollutants
coming out of the tailpipe per kilometer, easily. On top of that,
you have people not using premium fuel and other carelessness
that makes owning a two-wheel vehicle extremely polluting. 


On top of that, they're usually being used in densely populated
cities where thousands of people are living on top of each other.
If you're walking down the street, you can definitely smell them,
you can feel the heat from them. It is a central problem that we
need to solve.


I grew up on the west coast of the United States. I worked for
Microsoft, where I was one of the original founders of Xbox, then
eventually was fortunate enough to lead the Windows XP user
experience and product experience side of the business.
Eventually I moved to Taiwan, where I worked for a company called
High Tech Computer (now HTC). I created some of the world’s first
Android phones – the T-Mobile myTouch, the Verizon Droid – and
was pretty successful there. 


At age 40 I was traveling around Asia, thinking, “I made that
company number one in the world, shipping 43 million phones a
year – now what? As the world is moving to 5G and then to 6G and
beyond, is that really the end game? Is human computing to make
humans more efficient and more productive really the way of the
future, or is sustainability?” 


So I picked sustainability. I think that this is the decade of
sustainability. Mobility plays a huge role within that, and
trying to figure out how to get the eastern hemisphere to adopt
electric was the essential problem that we needed to solve. With
Gogoro, we did that. 


David Roberts:   


So cities are choked with these two-wheelers, which have some of
the dirtiest engines possible, and you're trying to think about
how to solve this problem. One way would just be to go electric,
the same thing we've been doing with cars. Why isn't that the
intuitive solution, to make electric versions of these scooters?


Horace Luke:  


In most areas of the world where two-wheelers are massively
adopted, people live in stacked apartment buildings. Thousands
and thousands of people live on top of each other, and these
vehicles are being parked on the side of the road in a very ad
hoc kind of way. You've got nowhere to park, so you really don't
have a solution for nighttime charging. 


During the daytime commute, some technologies are emerging for
fast charging – something like 10-15 minutes for about a 50
percent charge. Maybe that's doable, but in a two-wheeler, you
don't have the comfort of a sofa, you don't have a stereo system,
you don't have an environment where you're protected against the
natural elements. If you're in line in front of me and somebody
else is in front of you, we're talking 30-45 minutes exposed to
rain, to heat, to sun. That just makes it almost
impossible. 


Plus there’s the economics of it. You've got batteries, you've
got a fast charger – now you're trying to figure out how much the
vehicle actually costs. By removing the battery from that
purchase equation, we help the user adopt the electric solution
much quicker. Instead of buying the battery and charging it
yourself, you stop by one of our GoStation battery swapping
stations and just swap out the battery.


David Roberts:   


Back in 2011 when you first started Gogoro, did this vision –
that you take the battery out of the scooter and make the
batteries interchangeable, a quick swap rather than having the
consumer own the battery – just come to you in a flash? Is that
what the company has always been about? 


Horace Luke:  


The company has always been about that. We started the company
with 27 desks; we were thinking that we were a software company
helping to create the algorithm and efficiency of swapping and
managing these batteries. One thing we knew was that how and when
you charge the batteries is very important to managing their
lifespan. If you're starting a company thinking about
sustainability, it's not about greenwashing or riding the
electric hype – it’s about how you take the resources and
minerals that are out of the ground today and extend the lifetime
of use for as long as possible. 


That's the thesis from which we started. Then we were looking for
people to build the vehicle, build the motor, build the station,
etc. To be honest, it sounds like a broken record – a lot of
companies start very small and eventually find out “hey, that's
something nobody can do, so let's go do that.”


Now we're fully stacked, we build our own smart batteries. We
took the technology that we did with smartphones and we turned it
upside down. Think of our battery as a smartphone that doesn't
have a big screen on it. We took the ability to update and
wirelessly connect and created perhaps the world's most powerful
little battery that can power two- and three-wheelers.


David Roberts:   


So you eventually got into making the scooters, the batteries,
and the battery banks that the batteries are stored in, just
because you couldn't find anybody else to do it any better.


Horace Luke:  


Absolutely. I have this policy in our company where you ask
twice, and if you ask three times, that means that you should
have done it yourself. The first time you ask somebody “hey, can
you help me with this?” and they're like “no, that's kind of
impossible,” then you go to the second guy. And if they say,
“you’re crazy, you can’t make that happen, that energy density is
not something we can do” – if our science and our math work out
that you could, we try and do it ourselves. 


So we built the world's most powerful and dense small, compact
motor for mobility today, a tiny little motor that powers about 7
kilowatts, about 10 horsepower. It's a replacement of the popular
125cc or so. 


We've got our own batteries, we've got our own station, we even
design our own charger. We subcontract out the bidirectional
inverter that's in our station today. We even geek out on tires;
a lot of energy is lost on tires. I sit down with the team to
look at the compound of the tread pattern, the profile of the
tire, so that we can save energy on tires to go as far as we can
go. 


We're a curious bunch that just want to make electric mobility a
possibility in these big cities.


David Roberts:   


If I'm a citizen of Taiwan and I need a scooter for my business
or my personal life, what is the consumer experience like? What
do I do, where do I go, what do I sign up for, what do I buy?


Horace Luke:  


By the way, in Taiwan, there are 14 million two-wheelers on the
ground for a population of slightly more than 22 million people.
If you don't count old and young people, you literally have a
vehicle per person.


Before 2015, when we launched our first vehicle, electric
solutions were less than 1 percent of the overall sold in Taiwan.
(In comparison, Tesla in the United States is about 3-4 percent.)
We ended last year with about 26 percent in Taipei; in the
overall market, we're somewhere between 12-13 percent. 


What's amazing is that our battery-swapping system accounts for
90-95 percent of all the electric vehicles. So we not only grew
the market ten times, but at the same time we became the de facto
standard when it comes to people adopting electric. That’s
because we partner people not only with our own brand vehicle,
but also with Yamaha, Suzuki Taiwan, Aeon, and PGO.


David Roberts:   


So if I'm going to replace my vehicle with an electric and I want
to use the Gogoro battery system, I have different brands of
scooters to choose from that can all accommodate your battery.


Horace Luke:  


Yeah, not only brand but design and functionality. Think of us as
the Android of EV, or the Windows and Intel of computing. We're
47 different models across 10 different brands, so lots of shops
around town.


You choose the horsepower and design you like, you choose the
form factor, you choose the brand, because at the end of the day
each has different performance and different affinity to the
brand. You buy the vehicle, and then you subscribe to our battery
swapping system. 


The subscription is kind of like a mobile operator plan, for
those of us who are old enough to remember those. You used to
have fixed minutes and fixed messaging; you buy the bundle pack
up front and the more you buy, the less you pay for overage per
minute or per message. Same thing with us. We have plans ranging
from all-you-can-ride, where you pay and you can go crazy and
ride all you want. Or you can buy a little bit, start with
something like $10 and about 60 miles, and then anything more
than that you pay per kilometer on overage. The more you pay up
front per month, the more you get. We even have carryover miles,
just like you had carryover minutes. We apply the mobile operator
model to battery swapping usability.


David Roberts:   


If you translate it into American dollars, what is an average
monthly fee?


Horace Luke:  


The average monthly fee starts from about $10. You get about 60
miles, or 100 kilometers, and for every kilometer (or 0.6 mile)
overage, you pay about three pennies or so. Then you find
yourself snapping to the next plan, which is about $16-$17, and
for that, you get a little more kilometers on a pre-bundle. And
you just keep going up on the mileage.


David Roberts:   


So I've got the subscription, I'm riding around with one of your
batteries, I'm getting low, I look for a battery bank – what do
these things look like? What's the user experience of swapping a
battery? How long does it take? And how common are these battery
banks, how easy are they to find?


Horace Luke:  


In Taiwan, we've been going at this for almost seven years, and
we are now at about 2,200 locations. In the metropolitan area,
we're more dense than gas stations. By the end of this year, we
will definitely have more locations than there are gas stations
across the island. 


We have slightly more than 11,000 cabinets. Think of them as ATM
machines or vending machines. We put them in places like
convenience stores, cafes, universities, train stations, bus
stations, supermarkets. Instead of gas stations, where you need a
huge plot of land with a safe circumference around it, we can
place them underneath your apartment building, wherever is most
convenient for people.


David Roberts:   


They're common enough that if I'm running low, there's probably
one close by.


Horace Luke:  


Literally, you're within a quarter mile from each one. The
average distance that our consumer rides is about 40-50 miles, so
they swap maybe every 3.5 days or so. Range-wise, we’re about
60-70 percent of gasoline vehicles, but with a lot more
convenience than the gasoline vehicle. 


We can swap out batteries in less than a couple of seconds. But
when we do that, people think our system is broken, that we
didn't do the bill right or we spit out the wrong battery.


David Roberts:   


So I lift up the seat, I pull out the battery, and I put it in
one of the empty holes in the bank. When I put it in, does the
system know it's me somehow? How is it tied to my account?


Horace Luke:  


We wanted to make that user experience as seamless as possible.
One of the things that we absolutely needed to do is to make it
so much better than gasoline from a user experience perspective,
so that people would want to switch over. 


So no credit card, no phone, nothing needed. You put your battery
in, and because our battery has NFC on it, it carries your
credentials – who you are, how many kilometers you’ve ridden. You
put your battery in and it calculates whether you paid your bill,
how much is needed for this time, how you rode and how much
energy you used, then picks the right battery and spits a new one
out for you that is fully charged. 


That battery is then programmed for you. So if I stole your
battery from your vehicle and I put it in my vehicle, it won't
work. The security system is tied to you. Essentially, you can
feel confident having these expensive batteries in your vehicle;
it won't be stolen because it just simply doesn't work. A stolen
good is no good if you can’t resell or reuse it.


David Roberts:   


You're cutting out theft at a stroke there.


Horace Luke:  


You're cutting out theft on the battery; you’re also cutting out
theft on vehicles. If I go to your desk and steal your key and
ride your vehicle away, you just call our customer center and
say, “Somebody stole my bike, can you put an alert on your
network?” We put an alert on the network, so when the guy that
stole your bike puts a battery in to swap, that battery is
locked. Your vehicle handle lock is locked, so all you can do is
push the vehicle in circles. And we know exactly where it is, so
we can send a guy out to pick up the bike. There literally has
been no theft on our network, because you can't steal it. Even if
you steal it and you don't swap, you're talking about a
circumference of no more than 60 miles. 


When a consumer takes a loan out from the bank, the bank gives a
low rate because the system can be locked. If the guy doesn't pay
his bill, we know exactly how to lock the battery or slow down
the vehicle. If you don't pay your bill on time, we don't lock
your vehicle right away; we make it go really slow first, so you
can go to the bank. 


There are a lot of interesting bits that we've been able to do
with the system, and it's just a bunch of us sitting around the
table adding feature upon feature. Think of it as a smartphone,
except with wheels on it, that’s electric. 


David Roberts:   


These batteries you make are modular, so you could theoretically
have a vehicle that requires two or three or four or more. You
can imagine a lot of different vehicle form factors. What are the
varieties that are out there now using your batteries? 


Horace Luke:  


We're working with Yadea in China to ship low-cost e-bikes that
use a single battery, but the speed is not great. It’s like 17-18
miles per hour top speed; that's a regulation in China. That
battery can go pretty much forever, a really long distance.


In Taiwan we have one that is about 50cc, a single battery. But
the most popular vehicle in Taiwan, or across Asia, is 100-125cc,
and that requires two batteries. We also have three-wheelers that
we ship now with two vehicle makers; one is more just a quick
last-mile delivery vehicle – think of it as Pizza Hut or Domino’s
– and that's a three-wheeler with two batteries. We also have a
vehicle maker that’s building a wet market big utility
three-wheeler that uses four batteries. 


We recently announced the world's first solid-state battery
prototype for swappable batteries. That added about 40 percent
energy density into our battery pack. As energy density
increases, form factor variety can increase. To swap batteries on
a four-wheeler today, you might have to swap out eight of them,
and that’s kind of exhausting.


David Roberts:   


I imagine once you get up to four you're spending a lot of time
swapping.


Horace Luke:  


Anything more than a six-pack is a little troubling. As energy
density gets up to, let’s say, 3 kilowatt hours, now we're
talking about ability to create a variety of different form
factors. 


Our system is also interoperable, so our battery can be placed
into a Yamaha vehicle, and the one that's shipped with the Yamaha
can be placed into the Gogoro vehicle and the Suzuki Taiwan
vehicle. 


We've had three generations of batteries, three generations of
stations, refining, working out all that needs to work out in the
system. But the very first vehicle can use the latest battery,
and vice versa – the very latest vehicle, that literally just
shipped yesterday, can use the very first battery. And we've now
manufactured 1 million batteries, so it's really a scale in
numbers. As we get more and more vehicles and batteries out in
the network, the more efficient it gets. 


If you go on our website, you'll see our vehicles are fun,
colorful, and very eye-catching. The reason why we made them
eye-catching is because, unlike a smartphone that you put in your
pocket, every vehicle in the intersection is an advertisement. We
wanted people to realize “hey, that guy's using something new,
that guy is adopting electric, that's pretty cool.” We wanted to
build that momentum as we built up the population of vehicles on
the ground.


David Roberts:   


You've recently had a few experiments using the batteries in
other urban things that need low, constant power, like parking
meters. Is that a big direction you want to go, or just a side
benefit at this point?


Horace Luke:  


Again going back to the word “sustainability,” it’s about taking
whatever you need out of the earth. It's not about wearing
nothing, eating nothing, sitting there with nothing. It's about
the world becoming modernized, safer, smarter, and more
efficient, attracting people coming into the cities of
tomorrow. 


Our batteries are great for their first life, which is you and me
grabbing onto each other and zipping a bike up a mountain, going
out for a ride. At some point in the future, the battery can no
longer propel such a heavy vehicle with the energy demand that a
vehicle needs. Instead of retiring those batteries and recycling
them, we find a second use for them.


David Roberts:   


In cars I know that's once you degrade it down to about 80
percent of original capacity. Is that roughly the same for
two-wheelers?


Horace Luke:  


Roughly the same. The energy demand of the battery on a
two-wheeler is actually much higher than that of a four-wheeler.
It's just the sheer amount of energy you have in your car. Your
vehicle is probably 70-80 kilowatt hours; we have literally 3.4
kilowatt hours to propel you and your friends up a hill. It’s
called a C-rate; the discharge rate coming out of a little
battery is much higher. The draw on the battery is much more
demanding. 


Now, that said, once it retires at 80 percent, what are we going
to do with these batteries to extend the life instead of
recycling them? One of the things it’s great for is portable
swappable power. You mentioned the smart parking pole. We're
doing a couple thousand smart parking poles in Taiwan this year
as a pilot. Just like we piloted our battery swapping system for
scooters back in 2015, we're piloting a swappable battery system
for smart poles. 


A city like Taipei is not very orderly. In order to create
parking poles, to get organized, it's not like you just paint on
the ground and say “you park here.” You have to try and find ways
to penalize and also charge people money for it. So we are
putting our batteries into the smart parking pole that does not
require you to dig up the ground and draw power from the ground;
you just use the battery and we swap it out every 27 days or so.
In a matter of hours, a non-monitored street can become a smart
street. 


As we think about all these batteries, there is going to be a lot
of opportunity to not only turn smart devices to be powered on in
cities, but also, as we most recently announced, a power backup.
In a place like Taipei or other cities across India and in
Southeast Asia, rolling blackouts are common, and the most
dangerous part about rolling blackouts is an intersection. We're
working to develop a system where we use our battery to back up
the streetlights for three hours. Again, swappable power – coming
up to three hours, we go and swap those batteries out so it
continues to operate the intersection safely. 


Everything from crosswalks to red, yellow, green lights, we're
able to help cities become smarter and safer. Those are the
extended uses that can continue the lifespan of that battery for
another half a decade to a decade, easy.


David Roberts:   


So you can use them all the way up before you recycle them.


Horace Luke:  


To give you a philosophy of how we think, the other day we were
sitting around a table going “okay, now we got second life
figured out – what's third life? What do we do with it before
recycling?” Wouldn't it be great to power education in places
like the slums of Mumbai, where the family is not able to access
energy for cooking and it results in wood stove burning or
garbage burning in order to cook? Imagine these batteries are now
fully exhausted when it comes to depreciation, when it comes to
the cost of these batteries. If we can do that before we recycle,
that would just light me up. That's something that we want to do
to further humanity.


David Roberts:   


One of the really interesting aspects of this network to me is
that you're not primarily putting the computing power and
intelligence and tracking in the scooters; you're putting them in
the batteries. The batteries are the smart part of this. With
batteries going in and out of all these different scooters and
banks, you're gathering an immense amount of information. What is
the intelligence making the batteries smart? What does that allow
you to learn about what your customers are doing, and what does
it allow you to offer in terms of features?


Horace Luke:  


Think of the battery as really a smartphone. It can collect as
well as it can dispatch. 


You're absolutely right, there's an immense amount of effort that
we pay attention to when it comes to machine learning and AI and
control systems on the backend side. When we want to upgrade a
swapping station, we literally do a FOTA (firmware-over-the-air
update) to all our stations, and from there we can update the
battery; the battery can carry a package and update the
vehicle. 


With consumer consent, we can add features. A couple of months
ago we rolled out “rain mode” for our consumers. By looking at
the weather report in the area that you happen to be at with your
phone, it will say “hey, it looks like it's raining outside, do
you want to turn your vehicle on with rain mode today instead of
the regular high-power mode?”


David Roberts:   


Rain mode is just a little slower and safer?


Horace Luke:  


It’s basically less torque, less jerk when it comes to the rear
wheel so you don't slip when you accelerate. That feature wasn't
available on the first day, but over time, we continue to add
features to the vehicle. All consumers have to do is say “I want
it” and all of a sudden the vehicle is updated with the battery
pack.


David Roberts:   


Those come with a subscription price? You get those updates as
long as you're a subscriber? 


Horace Luke:  


We try to get the consumer as many updates as possible. It puts a
smile on their face.


That vehicle will sing “Happy Birthday” to you on your birthday.
If I bought a vehicle secondhand from you, David, the second I
registered, my server knows that I now own the vehicle and my
birthday is in May instead of your birthday, and it’ll sing
“Happy Birthday” to me on the right day. Little delights that you
put in there because it’s a connected system. 


The vehicle data is also collected by the battery and in turn,
taken back to the swap station and fed back to the cloud. We know
how you use the vehicle, how much you deplete the battery, how
often you swap. Those are all data that we use to make your
experience better so that you can predict when you're going to go
to the next station, how much energy you're going to bring back,
and what's most likely your preference of battery – do you care
about durability, or do you care about high performance and
thrust?  


On top of that, recently we launched our usage-based insurance.
The first step is through mileage, but eventually what we want to
work toward is, if you are a safe rider – you turn on your
blinkers all the time before you make a turn, you don't hard
brake on your vehicle – we would like to know that data so that
we can collect it and give it to the insurance company on your
behalf so you can save on your insurance premium. Those are
things that a connected system can do that other people cannot.


David Roberts:   


This seems like an immense amount of data exposure. Can customers
opt out entirely? How do you safeguard privacy?


Horace Luke:  


Absolutely.  We don’t take your GPS location of where you
park your vehicle unless you grant us access to it. We all came
from working on smartphones, so you can only imagine the scrutiny
that my team and I are well aware of and practice every day. We
only do it with the consumer’s consent. Everything from
subscribing to the battery to letting us know where you swap or
letting us know where you park is with user permission.


David Roberts:   


Is this the kind of thing, though, that's buried somewhere in a
long agreement that I just click “yes” to in the process of
subscribing? Or is there something more granular and in your
face? 


Horace Luke:  


Take a look at the insurance one. Without you granting us
permission to work with the insurance company specifically on
that feature, we do not do it. We do not take your data and share
it anywhere else. 


That said, though, we do look at whether or not your vehicle
tipped. For example, if your vehicle crashed or you dropped it on
the left side, our gyro sensor inside the vehicle registers.
That's not for the insurance company, but for our workshop. By
the time it can come in and the guy takes your wireless key – or
our latest vehicle uses an NFC card so you don't even need a user
key – we swipe the NFC card, your log comes up in the service
center and sees that you tipped your vehicle on the left side and
the mechanic needs to pay more attention to the left side of the
vehicle to make sure that the brake lever has not been bent, make
sure that everything is in tip-top shape on the left side of the
vehicle. It's for customer safety, but within a confined use. Not
really related to privacy, but related to safety and servicing.


David Roberts:   


We've become familiar in the tech space with platforms, networks,
and the way that the first mover company can get these network
effects that make it very difficult for competitors to come in.
Facebook is the classic example of this. If I'm imagining all
these different vehicles from all these different brands, but
everyone's using your batteries connected to your central banks
and with your information, that looks a little bit like a
monopoly. How do you not abuse that power? Is it possible for
other networks to come in and compete?


Horace Luke:  


Oh, absolutely. You ask a really good question. The first thing
we need to do is make sure that we practice with fairness and
with the consumer’s interest first and foremost. To be honest
with you, the company today is EBITA positive, but at the same
time, we are still losing money to build out the technology and
build out the investment it needs for the network. We're 95
percent market share because of how fast we've built it out and
how much we've built out in Taiwan alone. 


That said, though, we have to make sure that the consumer always
has a pricing grandfather ability. When you buy a vehicle, if you
don't change your plan, your cost of owning that vehicle remains
the same until the end of that vehicle's life. We maintain that
to make sure that the consumer feels like they're not being
strung along in any sense. That's the first thing that we need to
make sure we do.


David Roberts:  


You don't raise subscription rates on individual consumers in the
middle of their subscription.


Horace Luke:  


Exactly. We raise it, however, because our cost does go up –
electricity costs go up, or recently with electronics components,
everybody's well aware of the inflation that's happening
globally. Prices do go up on components and costs of us running
the network, so we grandfather the existing customer, but we
raise it for new customers instead. As a consumer comes in, they
can feel confident that what they signed up for is what they get.
That's really important.


David Roberts:   


That is great that you do that. But if you have 95 percent market
share, maybe someday you retire and a less benevolent CEO takes
over – what would stop them from changing that policy, once
you've got everybody locked into the network? That’s the whole
problem with a monopoly. 


Horace Luke:  


Will I retire one day? Probably in the distant future.


We enable a plan on our network called the Flex Plan. When you're
looking on your phone for a charge station, we have an app that
shows you all the stations and, more importantly, shows you which
stations are stressed and which stations have extra energy that
is ready to be distributed, and for that we’ll give you a
discount. We will continue to invest in things that allow the
consumer to have flexibility, to in some way game the system so
that they can get it even cheaper if they want. 


Our company is about 2,000 people at the moment, about 100-200 in
the management team and the back office, and the engineers make
up about another 400 or so. The culture is so strong. We have a
slogan that says “do good, do well, and have fun doing.” 


So “do good” is the first thing we need to do. Not just about
sustainability, but we need to do good as far as building
something that's fair, something that's great for the consumer to
have. Brand credibility is all we’ve got. The second that people
say “hey, you know what, this guy has me strong-armed,” the
escape cost of getting out of that vehicle is only a couple
hundred bucks. It's the residual value on the vehicle. So it's
not hard for a consumer to get out. 


David Roberts:   


I could get out of your network, but are there competing
networks? Are there other companies even trying to do this? Is
there another swappable two-wheeler battery that I could go to if
I for whatever reason wanted to leave Gogoro?


Horace Luke:  


In Taiwan there is another company, created by the largest gas
vehicle maker in Taiwan, that has built up their network. They
continue to do promotions to attract consumers to go over to
their side, to the point where they were offering free rides.
Literally you can swap batteries for free. You just buy the
vehicle and only have to pay a dollar for subscription. 


You mentioned network effect; network effect is both from a
business perspective and also from a convenience and user
experience perspective. We have so many batteries in so many
stations on the ground today that although the other guys are
cheaper and more aggressive when it comes to throwing dollars at
it, at the end of the day, it's not just about how much you're
charging the consumer; it’s about the value the consumer gets.


That's an important part that people need to understand – we're
not competing dollar for dollar. Giving something away only lasts
so long, but we have to create a user experience that is so
unique, that is so much a game changer when it comes to owning a
mobility solution that you can say, “I want that.” “Want” doesn’t
mean it's a dollar amount; “want” is something that is more
emotional. It’s heartstrings that we are plucking in Taiwan, and
it’s definitely worked very well so far. 


In addition to that, we also created probably one of the most
efficient ridesharing networks, called GoShare, on our system. So
our platform not only allows for that user experience when you
own the vehicle, but we have about 6,000 vehicles rolling around
Taiwan today that allow the consumers to use an app, kind of like
Bird and Lime, short term rental. But the difference is there is
no range anxiety, because we have so many swapping stations in
the network that the consumer just picks up a vehicle and at the
beginning of the ride or mid-ride, they can swap out a battery.
We've had people take a vehicle for two days and ride around the
island of Taiwan. 


More than 70 percent of refueling on our ridesharing network is
swapped by the consumer. Think of it as a hotel room that cleans
itself. The maintenance cost is really low, the OPEX cost is
really low, and it allows the consumer the identical user
experience as the vehicle they own. Maybe this time they're
hanging out with friends to go drinking, so they don't want to
ride their own vehicle; they ride one of our GoShares to the bar,
and on the way back ride a taxi or hail an Uber instead. It
allows for a lot of flexibility when it comes to what we call a
platform to enable a number of solutions on the market.


David Roberts:   


So ridesharing is built into the whole model, in addition to
ownership.


Horace Luke:  


Exactly. We have an overlap of consumers. People that buy our
vehicles love riding a Gogoro, love swapping batteries as a means
of refueling, and then they just sign up to GoShare and off they
go. Same user experience, same type of vehicle, except sometimes
you ride your own, sometimes you rideshare when there's one on
the street next to you.


David Roberts:   


An EV fleet is an enormous amount of distributed energy storage,
and in the US there’s a lot of talk about trying to hook those
batteries up to the grid such that they could, in addition to
serving their primary purpose, also be relied on for grid
stability – store excess energy in them when you need to, take
energy from them when you have a shortage. 


It occurs to me that these battery banks that you have all over
Taiwan are all themselves big batteries, so you are building
yourself a giant distributed storage network. Are you talking to
grid operators, trying to hook those things up to the grid such
that they could serve this ancillary purpose of grid stability?
It seems like it would be incredibly useful for the grid, in
theory.


Horace Luke:  


That's something that we've been working on and prototyping with
a grid provider here in Taiwan. The stations that you see on our
website are bidirectional ready. Today in our network we have
close to about 200 megawatt hours of batteries on the grid at any
time.


Whatever EV you’re talking about – a Tesla, a Porsche, a Bolt –
it’s a battery that is not owned by the provider and doesn't come
home often. It's the consumer's choice. The difference is, we
actually have that battery back on the rack every couple of days.
At any time we have close to about 200 megawatt hours of
batteries literally on the rack. 


We're working on things like being bidirectional, so when the
grid needs it, we can push that energy back to the provider,
_____ charging of energy. We’re also working with Enel X, the
world's largest virtual power plant provider, to do demand
response. So the grid performance is at about 65 Hertz; all of a
sudden, we see a surge coming, people need to stop. Whoever can
stop gets paid, and our stations can instantaneously swap the
stop, all of them. We're able to then participate in that
model. 


Extra revenue from that today is not very meaningful; we're still
developing the technology. But one day it could be. As we become
the de facto standard and massively deploy the batteries that
we're talking about, that revenue stream can become very
meaningful.


David Roberts:   


With EVs, like you say, with every consumer owning their own
battery, the big challenge to vehicle-to-grid coordination is the
coordination itself, those soft costs of trying to network
everyone together and coordinate and talk with everyone about
what they're willing to do. But you have that problem solved out
of the box – all your batteries are already connected, you're
already in communication with all of them, so it's primed and
ready to hook up to the grid.


Horace Luke:  


Also, for example, about a month and a half ago Taiwan had a huge
blackout; 40 percent of all households experienced a power
outage. During that time, most of our stations, except the very
early ones, can back up energy anywhere from 48 to 64 hours. Even
if there's no power, it can still swap out a battery. 


Battery-to-battery charging is something that we're working on,
so that eventually somebody can say “hey, you don't have extra
energy, I'm going to put it back on the station so that somebody
else gets to have enough energy to go pick up their kids and go
home.”


I always say to my team that energy is at the center of all human
innovation. The fact that you and I are talking to each other on
a podcast, the fact that we get to record it, the fact that I
have earbuds on, it all has to do with energy. If we think of
what Gogoro is making as portable, distributed, connected, smart
energy units, and mobility being just one part of it, and smart
cities being another, the limit is on the imagination on what we
can do with it. 


It sounds weird, but everything you mentioned, I'm working on. It
really is just a matter of focus and getting it done. Stations
that have batteries can do demand response to the grid, can do
battery-to-battery charging that can take two half-charged
batteries and provide one fully charged one. We can also have
stations and ___ charging that energy back to the grid. 


In Taiwan today, ___ charging doesn't make a lot of money, but if
you ever deploy in Brazil, ___charging can be as much as 30:1. I
can buy energy at $1 and at the right time sell it back up to $30
for a kilowatt hour. There's a huge amount of opportunity for us
to do good and provide a modern, safe, connected energy system
that powers mobility; at the same time, the business needs to be
sustainable. If we can create a sustainable business that
actually does sustainability, everything then makes sense. 


Too many times I find companies that are trying to do
greenwashing or riding on the sustainability trend, but when you
look at the mathematics, it just doesn't work. Unit economics on
a business, it has to fundamentally work, and if you look at what
Gogoro is today, every individual that comes on the network is
contribution margin positive on our battery swapping network.


David Roberts:   


Also, every increment of cost decline you get in batteries,
you're not just doing the things batteries were doing more
cheaply, you are opening up new applications, new ways to use
them. I've been waiting a long time for both solar generation and
energy storage to get so small and modular and cheap and
ubiquitous that they're infused throughout the city. Then, like
you said, you could let your imagination run. What can you do
with a city that has energy storage infused throughout?


Horace Luke:  


That's exactly what we're working on. Having these stations
placed almost at a frequency of ATM stations across town, and
being able to have these energy stores accessible literally
within seconds by the consumer, makes turning over to smart,
connected electric a lot easier than if you are demanding
somebody to charge and have to sit out there in the rain and wait
for it.


I own an electric vehicle, too, a four-wheeler, as well as
several Gogoros. Charging and sitting inside a car is easy
because you can plug it in and you can do email, you can listen
to music, I even watch a movie sometimes. But that luxury or that
privilege cannot be had with the masses. 


I still remember, when I was growing up, I had a poster of the
Lamborghini Countach, my dream car. Today, what the next
generation has on the wall is the Tesla Roadster or the Porsche
Taycan. How many people can actually own a Lamborghini Countach?
Not many. And how many people in emerging countries can own the
Tesla Roadster or the Porsche Taycan? Again, probably, not very
many. But definitely the trend of electric is here to stay. 


As you think about us pivoting to this decade or two decades of
electric mobility and sustainability, these young folks now in
their teens are going to grow up to be the decisionmakers of
tomorrow. If they can access these vehicles that are even cooler
than a plug-in charging two-wheeler, a four-wheeler, wouldn't
that be cool? That is the market that we're going after, a market
that has half a billion installed in Asia, getting ready to pivot
to electric. 


In Taiwan, for example, where there are 14 million vehicles on
the road, government a couple of weeks ago made an announcement
that by 2040, no gasoline vehicles can be sold, so that by 2050,
all vehicles on the road will be electric. And there are
milestones to that: in 2030, 35 percent; 2035, 70 percent; 2040,
100 percent of what’s sold has to be electric.


David Roberts:   


Speaking of the future, you recently announced a prototype
solid-state battery, which is much more energy dense; you can fit
a lot more energy into your battery. Everything we've been
talking about that you could do with this distributed energy
storage would be ramped up and accelerated if you got a 30-50
percent bump in your energy density. How close is that to
reality?


Horace Luke:  


When it comes to solid-state batteries, you see ideas coming out
of a lab, or startups creating a membrane of film that allows
solid state to happen in a small package. We’re the first in the
world to package it into a battery pack that actually is
functional.


David Roberts:   


It looks and is shaped like your other batteries.


Horace Luke:  


Identical, but with energy density that we're targeting in
several years to be 40 percent higher.  We're
commercializing probably in the later half of this decade.


Is it feasible? That's the next question – can we get to a system
where you see a shift to complete solid state? I think it's going
to take time, just like hard drives and solid-state drives. In
the middle, you’ll probably see some sort of hybrid system – guys
that are using solid state but for very premium cases, and then
hard drives continuing to have the density that rotational
batteries have. 


We are definitely staying ahead. As a company, we always look at
new technology and always look at the application of such new
technology to make sure that we're looking out for the best
interests of the consumer. Because if you can provide that for
the consumer at an earlier time, that will only translate to a
happy consumer, and that translates to a happy Gogoro. 


To give you a short answer, you’ll see some momentum in the
solid-state battery space in the second half of this decade, but
is it fully feasible and commercializable in the masses? I think
it's going to be a tad longer than that, just because of how much
capacity is built up in lithium ion. Our suppliers – LG, SDI,
Panasonic – have built up a tremendous amount of capacity in the
US, Europe, and in Asia. It takes time for that capacity to ramp
down, and the cost economics are going to get better and better
because of the amount of capacity they are.


David Roberts:   


You require a certain amount of urban density for the network to
work. Where are you now? Where are you going? And is there a
single city in the US that is dense enough that you think you
could pull this off here?


Horace Luke:  


A lot of my friends are from the US. I grew up in the US, the
early part of my career was in the US. Lots of people raise their
hand and say “I want this in my city.” 


One of the most essential things that we have to do as a company
is to focus on the biggest challenge and opportunity ahead; with
every challenge comes a great opportunity. We're now, in China,
the world's largest two-wheel market with the number one electric
vehicle maker Yadea and partnering with the number one gasoline
vehicle maker in China, ____. We’re also working on the second
largest market in India, looking to deploy end of this year or
early next year. We're also working with Indonesia.


David Roberts:   


At this moment, how many cities are you operating in?


Horace Luke:  


All the cities in Taiwan. We're in China, in Hangzhou, Wuxi,
Kunming, and several more to come very soon. We are in Seoul,
Korea, mainly for food delivery. We're in Japan, with tourism
rentals of two-wheelers. We are also in Germany with a
ridesharing service, providing our vehicle and swapping solution.
We have a pilot in Jakarta with GoTo and Gojek; GoTo has about 2
million riders on a network that's looking to turn electric
through battery swapping probably by the end of this
decade. 


So a lot of conversation, a lot of pilots, and a lot of
expansion. We just listed on the NASDAQ under the ticker GGR. The
reason we got listed on the NASDAQ is to get ready for expansion.
We needed the capital, we needed the transparency, we needed to
grow the team. Going on the NASDAQ and getting to be a publicly
traded company enables us to now go very fast into those
regions. 


We dabble in energy storage; we are wholly focused on battery
swapping for mobility; we've got portable energy for smart cities
solutions, and smart parking poles, and safety. We've got ride
sharing, we’ve got rental, we’ve got food delivery. So Gogoro
goes back to the thesis that energy is at the center of all human
innovation. We can take what we're doing and enable different
businesses to enable what they care about to become real now,
because of our platform.


David Roberts:   


I didn't hear any US cities on your list.


Horace Luke:  


We're working on it. I would not say never. We’ve looked at
places like Austin, Seattle (where traffic is terrible), San
Francisco. We continue to see them, but it's a question of
resources. We're 2,000 people, we're about to attack three of the
largest markets in the world with several of the largest
partners, and focus is really important for us.


David Roberts:   


Thank you for coming on and taking all this time. It's
fascinating. The whole world of two-wheelers is something I don't
have a lot of occasion to think about. 


Horace Luke:  


If you ever come to the east side of the hemisphere, you'll see
that most people travel on two wheels. In India, 80 percent of
all commute miles done every day are done on two-wheelers, and 60
percent of all gasoline that is spent every year is on
two-wheelers. That's how big the market is, but most people don't
realize that in the West. 


We live on one blue ball, right? If Europe becomes better, if the
US becomes better, Canada is good, but what about everything
else? If everything else is not good, then that would eventually
creep over to the West, and that is a problem that a lot of us
moved to the East to solve. That's something that we're adamant
about – we have to make the planet a better planet so that our
next generation can have one.


We are now at this critical point where innovators and business
leaders have to put their resources and their time on
sustainability, not just because it makes good business sense,
but it’s essential for humanity. That's something that we as a
team are so passionate about.


David Roberts:   


Thanks so much and good luck with all your expansions. 


Horace Luke:


Thank you, David.


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