Merge Electric Fleet Solutions’ president and CEO Glen Stancil recently sat down with Hart Energy to discuss the biggest opportunities and challenges for his Houston-based company.

Merge helps other companies electrify their fleets, as well as assists them with getting employees to go electric and vehicle pricing.

Stancil discussed electric vehicle (EV) tax credits and why they’re not all they’re cracked up to be, barriers to adoption, infrastructure workarounds and how Merge is trying to gain traction in oil capitals like Midland, Texas, in an interview with Hart Energy’s International Managing Editor Pietro D. Pitts.

Pietro D. Pitts: What is Merge doing in the EV space?

Glen Stancil: Merge is a next-generation fleet management company. Today's fleet management companies provide vehicle services to companies that run fleets. Primarily their services are acquiring and disposing of vehicles. It's very much a transactional buying-and-selling process, and lots of companies rely on it to outsource the transactional things of dealing with vehicles that they have.

EVs are a little different. You've got to make sure there's sufficient capability in that EV for the use case [that] you're going to put it into, and then think about the charging and the vehicle together. So, it's a joint decision and you've got to think about where the infrastructure is going to go for that vehicle. We use a data-driven approach to look at how the current fleet gets used and where the best candidates are for deployment and what's the charging infrastructure that's required. Then we build a transition plan for the fleet, which includes the vehicles and the charging infrastructure, and we help [companies] execute that transition plan as a set of services.

Merge President, CEO Glen Stancil on EVs, Tax Credits and Selling in Midland, Texas
Glen Stancil (Source: Merge) 

Once they [oil and gas workers] understand the capability of the truck… they're very impressed by the frunk, the torque, the horsepower and then the ability to take power off the vehicle. — Glen Stancil, Merge 

PDP: Are there usual incentives to buy EVs offered to employees that are driving fleet vehicles?

GS: There are two different programs. One has to do with [the fact] a lot of those vehicles from the fleet are now take-home, especially post-COVID. One element of what we do is provide home charging that effectively the company is paying for in order to get that fleet vehicle charged at home. Two is what I call an employee program, where you incent employees who aren't necessarily driving company vehicles to go electric.

PDP: Is home charging more cost-effective for an employee compared to at work or some other public site?

GS: There are a lot of reasons why home charging can be economic. Many employees can have a panel set up in their garages for between $500 to $1,500 to run power out. Also, residents don't have to deal with demand charges. If you're a commercial company, you pay both demand and energy. So, that's another source of savings. And then parking. Also, the running of the power and the distribution of the power is more complex in a garage or even in an open parking lot compared to a residential garage.

PDP: How have oil and gas sector workers in Midland, Texas, a market Merge has targeted, taken to the idea of using an EV like the Ford F-150 Lightning?

GS: Once they understand the capability of the truck… they're very impressed by the frunk [trunk in the front of the vehicle], the torque, the horsepower and then the ability to take power off the vehicle. Those are the four things that sell people on that truck. I think the acceptance is there once you have the conversation and they really appreciate that it's not a threat to their industry.

PDP: In terms of the energy transition and the move from fuel vehicles to EVs, we’re still not there yet, right?

GS: Over the past 12 months, the ESG conversation has kind of faded and what's coming is energy security and energy price. The oil and gas sector’s ESG problems have to do with methane emissions… leaking tanks. That's where the big levers are, and no one sees those. They're not optically visible and don't really impact their employees. EVs may lead to a small impact on your ESG budget in terms of carbon reduction. What you get from [going electric] is that it is visible to the community, your employees, your vendors and your family.

PDP: Is Merge only focused on the energy sector?

GS: We focus on other sectors including health care, renewables, utilities, lots of different areas. We tend to focus on light-duty cars, trucks and vans, partially because that's where the economics work. You certainly have medium and even heavy-duty [vehicles], but the economics can be challenging. For instance, a semi-tractor that uses diesel might cost $180,000 and the electric version might cost $450,000. It's really tough to get the economics and the payback to work on that. Right now, with electric light there's scale, there's volume. There's plenty of opportunity.

PDP: Is there still an issue now with EV prices and a lack of charging stations?

GS: The two big barriers right now to EV adoption are vehicle price and broad, deep and reliable charging. So, lots of places, depth where it is, and it has to work great. Those are the two big barriers.

We focused on fleets because the dependance on public charging is minimal to none and fleets take a total cost of ownership perspective to a purchase. It may cost more upfront, but if I'm saving on fuel and maintenance and time to pay that back, I'm okay with that. Consumers buy a sticker price or a monthly payment at the end of the day.

PDP: Does the U.S. have enough of the necessary minerals to really make EVs that are truly North American?

GS: Not today. We have to develop new lithium sources [and others], which takes time.

PDP: If that's an issue, is that going to slow development of EVs going forward?

GS: I think we can find the resource, but it takes time. We can't find them instantaneously. People say the tax credit has been extended, but not really because the $7,500 credit that existed to the end of last year was really going to become a $0 tax credit for a lot of cars because you had to assemble the battery in the U.S. to get half of it. And you had to have the minerals come from the U.S. at the other end. So suddenly, that $7,500 tax credit would be zero for many cars, $3,750 for four or five cars that actually assembled their batteries in the U.S.


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PDP: With the tax credit and talk about energy security, what is the biggest challenge facing the EV industry?

GS: I think vehicle pricing is our big challenge this year. Last year I would have said vehicle availability, but between rising prices and rising interest rates, I think vehicle availability is going to become less of an issue than vehicle affordability. Affordability has two components: the price and the interest rate. Even for companies that lease vehicles, ultimately there's an interest rate underneath that vehicle lease as well. So, those two things are impacting affordability.

PDP: What’s the biggest opportunity facing the EV industry this year?

GS: I think the employers supporting their employees going electric would be a really big opportunity this year. You know, putting EVs on the company car menu for those customers who are comfortable with it, I can see that and not only from the retention benefit, but the come back to the office benefit which includes providing charging stations. Companies have committed to ESG and emissions, and I think that reinforces that commitment to them, to their customers, to their employees. But I also think it’s a great tool from an H.R. perspective.