Hevi Claims its Large Electric Equipment Has Similar Price to Diesel Machines

Bryan (00:00):

Today we're here to talk some more about electric equipment. Why is this such a hot topic? Well, let's be honest. I think the writing's on the wall. This is ultimately where the industry is headed. Now, we're going to have alternate fuels, obviously, to go alongside electric equipment, but really, this is the hot conversation happening right now.

(00:28):

Today, we're here to talk with Hevi about what they have to offer and what's coming down the pipeline. So can you give us a quick overview of what heavy has to offer?

Hevi CEO Raymond Wang (00:42):

Yeah. We launched our first product line in 2022 with three core machines. We have two front loaders that range in size from about 12,000 pounds to about 40,000 pounds. That's the industry favorite. And then we have a excavator that runs about 20,000 pounds. That excavator is about the size of a 308 Cat, and the large loader, that's equivalent to about a 950.

Bryan (01:06):

Gotcha. So we're not talking small equipment. These are large scale machines that are making it out on the job.

Raymond (01:11):

Yeah, you got it, not something you'd find in front of a Home Depot. These are machines ready to work.

Bryan (01:16):

Awesome. So relative to a diesel counterpart, what is my investment cost on this? Is this going to cost me three times the amount of a normal piece of equipment?

Raymond (01:26):

Yeah, that's my favorite question. That's what, unfortunately, in the industry, you come to expect, this new EV electric product and it's going to be like three times the cost of a diesel, and how does that make sense from a business standpoint? So I knew to get people to give electric a shot, it had to make sense on paper. It had to make sense to a business.

(01:48):

So what we did is we pegged the price of our equipment to a comparable diesel. We call it the GEL-5000. It's a 40,000 pound, four cubic yard bucket front loader. That's comparable to a Cat 950. A Cat 950 costs about $250,000 in our area with bucket, and for our machine, the GEL-5000, that's also 250,000, so no sticker shock at all.

(02:13):

But you add into the fact that we have about 80% less maintenance, because you don't have to worry about spark plugs, oil changes, belts, none of that. That's all gone. You don't have to worry about the fuel as much, because unlike the seven to 10 gallons of diesel you're burning per hour with that 950, we're burning about $4 worth of electricity per hour.

(02:35):

And there's incentives on us, where depending on your area, there's incentives anywhere from 20% all the way up to 100% of the purchase price. So you get first year savings for a business, which is huge. Once we share that, then people can really start thinking about the environmental benefits and how it applies to their business.

Bryan (02:55):

So the next big hurdle, and this is, I would almost argue, even past purchase price, this is the bigger hurdle, is what kind of runtime are you getting out of the machine, and then how long is it going to take me to charge that battery up?

Raymond (03:08):

Yeah. So all of our equipment, they will operate for nine hours of true operating work, not idling work, but true operating work. And that was very important for us because if it can't do a full shift, then you got a toy, right? It needs to be able to do a shift.

(03:24):

So that was very important and we utilized massive batteries to get that done. So it's about a two and a half ton lithium battery to power that 40,000 pound loader. But you need that to give it that power, that duration. And from a charge standpoint, if you're lucky enough to have a level three DCFC charger, depending on that power output, you can charge our equipment in less than an hour, but it's not realistic. They're few and far between, and it can cost over half a million dollars to put it on a job site if you're lucky enough to get the permits, so not realistic.

(03:59):

So what we did is we actually made our own line of mobile chargers, so as long as the charger's into a standard outlet and then plug the other one into the machines to charge it just like you would your cell phone or a laptop. And with our 480 volt charger from dead with our largest machine, it can take up to nine to 12 hours to fully charge it up. But the use cases, you would use it during the day for a full shift, let it charge overnight and it's ready to go in the morning to rock and roll.

Bryan (04:28):

Yeah, interesting. And so are you getting more power, more attractive effort out of those machines due to the fact that you've got electric motors on them? Have you guys done any sort of studies on the power that's resulting from those motors?

Raymond (06:40):

Yep, so we are. We have seen it. We don't advertise it, but especially with your background, you can appreciate it because they're electric systems. There's immediate feedback when you hit the accelerator, so there's instant torque right away.

(06:57):

So what we found is there's a higher brake force in our loaders picking up material, especially very dense, compacted material than a comparable diesel. There's a scenario where we've done a demo with a site that recycles steel. So they take steel, they throw it outside, these massive, massive mounds, and then they process it. But over time, that steel just compacts that bottom layer. Now it almost becomes fully solid, and then once a year, they have to get a breaker machine to break it all apart and mix it up.

(07:30):

In our demo, when they utilized our 5000, the 40,000 pound loader, right away, first movement into the mound broke right through that force, broke right through that layer, and they're like, "Oh my God, this is amazing. You knew this?" And I was like, "Yeah."

Bryan (07:47):

Totally.

Raymond (07:48):

Totally, yeah, designed for it. Yeah. Now, that was a surprise. We market and advertise our equipment that they have the same comparable force because our machines, they're hydraulic driven. That's where a lot of the torque and power comes from. It's just an electric motor powering it instead of a combustion one. So we always say that they're the same, but we're finding in our demos and our clients that the acceleration and instant torque is providing a more immediate higher brake force.

Bryan (08:21):

Interesting. I think that's one of the areas that our industry hasn't really ... Let's be honest, the industry right now is currently holding their nose up in the air and poo-pooing this whole idea of electric equipment, and they haven't really started to embrace the concept.

(08:35):

But I will say, one of the areas I think the industry really hasn't started to consider and wrap their mind around is just how much power is going to become available with electric units that simply wasn't there in diesel units because of the mechanism by which you get the power to the ground.

Raymond (08:53):

That's right. That's right. And also, just from an application standpoint itself, this is huge, it's operator safety and health because the whole purpose of our mission is to introduce some cleaner technologies to reduce the carbons, reduce the pollution that our machinery is producing.

(09:15):

A single gallon of diesel burned is 22 pounds of CO2. That's so much more than gasoline. And our equipment's, a comparable diesel is burning 10 gallons an hour across a single shift a year, 2000. It's 2000 hours. It's massive. But from an operator standpoint, it's not such a crazy out there figure of I'm going to save the world. Just from an operator standpoint, especially if you're working in an enclosed scenario like a salt silo or an indoor transfer station, that site has to have all these respirators and all these filters just to keep you from smoking out the area and yourself. Our equipment has no emissions, nothing to worry about from that standpoint.

(10:00):

And also, there's no more vibration. You have the combustion engine, you're sitting on that eight, 10 hours a day, your butt's numb by the end of it, and you're doing that day after day. No more vibration. And most importantly, from our standpoint, we get a lot of feedback on it, is especially in idle, our machines are mouse quiet, so no more sound concerns. You don't have to wear ear pro to operate the equipment anymore. You can have a conversation out the window.

(10:29):

We did a demo where the fleet manager drove around the yard, stopped, talked to his guys, and drove back into the vehicle hub, the depot, gets out of the machine and I was like, "Hey, what'd you think? What'd you like about it?" And he's like, "Ray, in 30 years of operating equipment, I've never been able to roll down the machine of my loader, talk to my guys and they can hear me." He's like, "That was amazing."

Bryan (10:56):

Absolutely. And that's yet another aspect that the industry isn't really thinking about, especially when you start getting on the smaller side. It's one thing in a huge loader, but when you start getting into the smaller machines, mini excavators, skid steers, things like that, where you're in very close proximity to your people, it's huge not to have to scream over the engine to get Bubba over there to come bring you whatever rock you need. It's just a very gentle conversation. And then the flip side of that is when that backup alarm goes off, it's going to be very clear when the backup alarm is going off because it's not trying to beep over top of the diesel engine powering the unit.

Raymond (11:34):

That's right. That's right. And actually, I would love your feedback on it because we have all the required regulatory backup alarms and everything, but especially in idle, because the machines are so quiet, we've gotten feedback on both sides of the fence on the topic.

(11:53):

When the vehicle is operating and moving forward, would you want a loud sound or not? And I'll let you know on both sides of it. For a site that doesn't operate a lot of equipment, having that sound indicator, great. Everyone knows it's coming around a corner. But let's say you're a site that you have 20 pieces of equipment rolling around at a given shift, if they're all making sounds, you become numb to it. But love to get your thoughts.

Bryan (12:18):

Yeah, I would almost think the technology that would be better utilized on the job site would be something like those laser light systems they use on forklifts and fork trucks inside warehouses to where ... on the forward side. On backup, absolutely you need that backup beeper, but for the most part, you should as an operator be paying attention when you're going forward. And so from there, I would almost say having that kind of light curtain around the machine to protect you coming around corners, or if someone's not paying attention, if they're possibly in the path of the machine to have the visual part of it, I think would actually be better because of what you just said. You got 20 machines. First of all, how am I supposed to know which of the machines is beeping at me? And then secondly, and more importantly, you're absolutely going to become immune to that sound very quickly because now you're not worried about something backing up. It's, "Oh, that's probably a machine going forward, I don't even need to look up."

Raymond (13:09):

Yep, that's right. We've been catering it to whatever our clients' desires and demands. That's one nice thing with the electric platform. We can customize it however you want. Speed, sound, lights, sensors, like the forklifts that you mentioned. We've actually done that for a client. But it's always a topic that it changes site to site, which I love to see. We actually joked around. One of our clients wanted their foreman at the job site just to record his voice going, "Get out the way," on loop, but it's going forward.

Bryan (13:42):

Well, that's the other thing about these machines that I think a lot of people don't think about as well, is we're entering into an age of complete customization, and laughingly, we can go the route of the boss yelling over the loudspeaker, "Get out the way," but another thing that we've lost as operators that has been really impactful to us is feedback in our hands. And when we've gone to an electric over hydraulic control, that feedback is totally gone.

(14:10):

It does occur to me as this technology develops, if you're able to implement sensors, or as we get away from hydraulic systems and we're using actuators to perform the work on the machine, now you suddenly have a way to take that back to the operator and put little motors in the joysticks to where you can provide that feedback again. I mean, that level of customization is where we can go with this electric equipment and it's never been available to us because everything's been based around these hydraulic systems.

Raymond (14:41):

Yeah. I mean, I think you're reading off of the playbook from some of our product dev teams right now. Right now at this initial stage, the initial launch stage, we want to keep everything simple for two reasons, one for cost, because everyone's always shocked. How do you compare it to diesel? It's because we kept the machines very simple. There's not too many bells and whistles on it. It's just difference in power. And we also wanted people to feel comfortable with it because they're used to working on that hydraulic line over the actuator. They're used to this and that, but that's definitely a future direction that we can expand into because we have the platform for it ready to go. You're absolutely right with that.

Bryan (15:19):

In all honesty, that's what gets me the most excited about the kind of upcoming electric age of equipment. Our industry doesn't really care necessarily about the environmental impact because I always tell people, we're the guys that are out there pillaging the world. We're the ones tearing all the forests out so we can create a new subdivision. And so we're not so much concerned about the environmental impact as much as what can it offer to us as operators that's never been done before? And that's where this electric equipment is just ... We haven't even really begun to unpack what we can do with it because like I said, everything's been based around either internal combustion engines or hydraulics. We've never been in this space before.

Raymond (16:03):

Because of that, it actually allows us to pretty much disrupt the industry a little bit and do things the way that we feel is best for the industry. For example, when you're talking about the sensors and the applications in principle, right, we have sensors across the machine to regulate everything, pressures, temperatures, voltage, everything across the board.

(16:27):

And unlike what's standard in the industry today, we actually promote the right to repair, so we actually display all of that information, all those sensors on a monitor within the machine itself. You don't need a diagnostic subscription. You don't need a dealer to plug it in and let you know what's going on. It'll display any error code right there with a description of what that actually means and what you should do about it. There's four different levels of error codes ranging from, "Hey, you should probably take a look at this after you finish up," to, "Get out of the machine right away," right? It'll tell you what that means, what it should look at and what you can do about it. And that's one thing that we want to really drive.

(17:10):

I know we've moved away from that as an industry, and it's a shame we got to come back to empower it. The industry is getting harder and harder. The margins are getting worse and worse, and it's the operators that are getting milked unfortunately for it. So we just wanted to use this opportunity to kind of reshuffle it, disrupt and give some power back to you guys.

Bryan (17:32):

And I'll say that's another big takeaway that as I do more of these interviews about electric equipment, the more of a revelation I'm having, this is going to totally stir up the market. I think we're going to have more and more new manufacturers coming onto the market that aren't the big players that everyone's familiar with, and yet are offering these very specific tailored products that the original OEMs couldn't offer, they can't offer, they're unwilling to offer, because they don't want to lose that traditional business model.

(18:03):

And so the more I have these conversations, the more excited I get that once the infrastructure's really in place, battery technology, as we continue to get further and further down the road of battery technology, this is a really cool event on the horizon for the industry of this revolution to the electric equipment.

Raymond (18:24):

Yeah. One teaser on the battery technology, and I don't want to build up too much hype, because the timeline can be a little longer for this one, but solid state is going to have drastic, drastic applications for our equipment, because now, you would take, for that size battery, from a nine-hour runtime, you're talking about a 36 plus hour runtime on a single charge. That's unheard of.

(18:51):

Compare that to diesel where you have to pull it off the job site to refuel at that site and drive it back forth. Now, 36 hours per charge, and you can charge it up even with our existing chargers in probably about four hours, the biggest machine we got, an hour or two of the smallest. That completely changes the game. But that realistically for our industry is probably a good five to seven years out.

(19:19):

Solid state technology is actually coming around the door. It is coming around the bend. It's going to be offered probably next car cycle for the automobility, but it's going to be first party users, so they're exclusive. I can't get them. It'll be directly to a Tesla or Volkswagen or something with LG and Samsung, but it'll take about five years or so for the third parties to get onboard, get it, and then we'll have access to it from there.

Bryan (19:45):

And see, that's where I see this whole conversation. Everyone currently in the industry is, "This is unfeasible, it's unpractical, blah, blah, blah, blah, blah." And what I see is we're going to trip this threshold and it's going to happen overnight to where this big change happens and now all of a sudden everyone goes, "You can run for that long and it only takes you that long to charge? When can I get one of these? That puts me way more competitive than anyone else around me." And it's going to happen overnight when we finally kind of get these next technological advances.

(20:16):

And I think that's where a lot of the early adopters are going to have a little bit of a leg up because now, you already have some of the infrastructure in place as far as your charging stations and figuring out the logistics of shuffling equipment and getting them over to the chargers. You're going to have that piece already figured out, whereas the guys who have been the naysayers for so long, they're going to have to start learning from that point. It's going to be really interesting to see how this change comes about and how it impacts the industry. On so many levels, this is going to really stir the pot. I'm excited to see it.

Raymond (20:49):

Yeah, yeah. And with the demos, actually, we're already seeing it today because something as small as just startup time, a lot of job sites, you start, you come in, you turn the machines on, and then you let the engine warm up, you go do something else, and then you can rock and roll. But for our electrics, you turn the key and you go. There's no warm up cycle. It's ready to go right away. At a public works yard, it starts to snow, they need to load salt into the plows. Turn our machine on, ours are ready to go while the diesel has been waiting. So already, there's a shift to it. People are preferring that because you don't have to worry about it.

(21:27):

It also helps out because of two things. As a fleet manager, you don't have to worry about your guy leaving it in idle when he shouldn't be, and then an inspector comes by and you get fined for it. We have no emissions, so there's zero risk of any type of fine from an idle standpoint, especially, we're seeing that more across nation, more fines and regulation against it.

(21:51):

In addition to it, our machines, they're not retrofits at all. They're built specifically for electrification, so that gives us an advantage where in the event of an idle, you turn the machine on, you leave it, let's say you leave it idling for six hours, eight hours, you don't have to worry you're going to come back to a dead battery because the systems won't turn on until they're used, so they're not going to draw power. So an idle it's drawing very, very little power.

(22:21):

One guy, because the machines were so quiet, he got a call while he was operating, the machine, got out, he didn't hear the sound, so he just thought it was off, and walked away for four hours. Came back to the machine, he's like, "Oh, no, I left it on. I killed the battery," and he took a look at the gauge. It went down by less than a percent. He gave us a call right away. He's like, "This thing is awesome."

Bryan (22:42):

Yeah, yeah, because that's the other thing. Had that happened with the diesel machine, had he walked away and forgotten, he left it running, first of all, you just burn how much in diesel. Secondly, with all of the emission stuff going on, that's a huge impact to the machine to have idling diesel soot clogging up all of the after treatment systems. You don't have to worry about that with these machines. It's just, "Who cares? Okay, we lost a half to three quarters of a percent of battery, 1%. Okay, no big deal."

Raymond (23:12):

Yep, that's right. And it's just getting and go and do the job that they need to do.

Bryan (23:17):

Yeah, so you mentioning the salt trucks takes me into another question. I have cold weather, extreme temperatures. How do these units handle the extreme temperatures and what kind of detriment does that have on the batteries?

Raymond (23:30):

Yep. Yeah, so with the lithium batteries, the main batteries, you can go down to zero degrees Fahrenheit and not have a problem. Once you start going below zero, then the battery loss is going to start raising exponentially. From zero to negative 10, you'll see some loss, but it's not critical. But from negative 10 to negative 15, all of a sudden a chunk is going to come out of the life of the battery, like 20%, and it'll go quickly up from there. Negative 30, then you're probably in trouble. The battery's not going to start, right?

(24:04):

But we have 24 volts of lead acid battery as a backup. We put it in there from a behaviorism standpoint. While people get used to the lithium, they're probably going to run the battery until it's empty and then the machine shuts off. So we didn't want you to get stuck with a piece of equipment out in the field or on a job site, so the operator can switch the backup power. It leverages the lead acid power, and it'll give you 30 minutes of drive time to get that out of the field onto a trailer or onto a charger.

(24:35):

But I bring that up because what we found in our studies is in cold weather, the lead acid batteries will start to go first. So once you get some freezing, so sub 32 degrees, then the lead acids are going to lose power, and then when the system, when you start it up, it'll do a system check across all of the different systems. It'll get to that backup battery. It'll say, "Is there 24 volts of power? No, we're registering 21." Then it won't start.

(25:02):

So in cold weather like that, we just recommend the lead acid batteries, you just pull them out, keep them somewhere warm and dry, and then when you go to use the machine, just pop them back in. And they're standard lead acid batteries. They're nothing special. Our machines, nothing's proprietary on it from attachments, motors, hydraulics, and batteries, so you can get them at Wal-Mart. It'll work fine.

Bryan (25:26):

Yeah. Okay. So my final question for you is because the industry, this whole concept of electric equipment is so foreign. Is there any weird maintenance stuff that no one's considered, things that we're going to have to do to these machines that we haven't had to do with hydraulic machines? Anything that people should be aware of if they want to look into an electric piece of equipment?

Raymond (25:49):

Fortunately, these machines are nice and simple, so all you have to do is maintain your hydraulics, keep the machines lubricated, and keep them clean, and that's it. You're good to go. You don't have to worry about routine cycles. You don't have to worry about your 500, 2000 checkups, oil changes, all that fun stuff, maintenance. That's all gone. The battery system is fully enclosed, so you don't have to worry about maintaining that for the 10 to 12 year life time of the batteries. Plus they're warrantied for five years. Just keep it clean, keep it lubed, and you're good to go.

(26:23):

We actually put in layers to try to prevent someone from messing around with an electrical system that they may not be comfortable with. For example, for our loaders, the battery in front of them, we actually put a radiator unit there just for a heat dispersion, but we specifically put it in front of the battery. This way, if you pop up the hood, you don't have to worry about a guy on his cell phone idly playing around with the cables for 660 volt battery and doing something he shouldn't do. There's a whole radiator unit in front of him to prevent that. So that's the beauty of it. You don't actually have to do anything at all. Just keep it clean.

Bryan (27:03):

Perfect. Well, Raymond, thank you so much for all of the time and the information. Like I keep saying, just the more I learn about the electrification and what the potential is behind this, the more excited I am for what's about to take place.

Raymond (27:18):

Awesome. I appreciate the conversation. Had a lot of fun.

Bryan (27:21):

Well, thank you again for Raymond coming on the show to speak with us about what Hevi has to offer in the electric equipment space. As always, I hope this helps you and your business. We'll catch you on the next episode of The Dirt.