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Manufacturing Australia’s first and most affordable electric vehicle

Published on
21 May 2021
Category
Podcast
Manufacturing Australia’s first and most affordable electric vehicle

In this podcast, our CEO Stephen Mabbs, talks with Greg McGarvie, founder and Managing Director of ACE EV, an electric vehicle manufacturer.

In this fascinating conversation, Greg outlines the vision of ACE EV to manufacture Australia’s first and most affordable electric vehicles, which will:

About our guest, Greg McGarvie

Greg McGarvie is a visionary and maverick, supported by sound scientific thinking. He started his career as a dairy farmer in Victoria’ south west and it was a love of spear fishing that inspired him to study Marine Biology, which took him to Queensland. Greg spearheaded the Clean Up Australia campaign and has built a career, working to protect our natural environment, and in particular the ocean, which he describes as the world’s lifeblood. His latest venture is manufacturing Australia’s first electric vehicle.

Interview Transcript

Steve Mabbs: [00:00:04] G’day and welcome back to our podcast series on leadership. My name is Steve Mabbs and I’m the CEO of business and digital consultancy, Escient. In this series, we talk with Australian business and community leaders to learn more about them and try to understand what makes them effective in their roles.

Steve Mabbs: [00:00:21] Today, I’m joined by Greg McGarvie, Founder and Managing Director of ACE EV, an electric vehicle manufacturer. In this podcast, Greg explains how a marine biologist, an engineer and a mechanic got together to start a company to design and build electric vehicles in Australia. What inspired them? How did they start? What challenges did they face? And how did they overcome them?

Steve Mabbs: [00:00:46] Welcome, Greg McGarvie to our podcast series on leadership.

Greg McGarvie: [00:00:50] Thanks, Stephen. Pleasure to be here.

Steve Mabbs: [00:00:52] Fantastic. Can we begin by just telling us a bit about ACE EV and how it started?

Greg McGarvie: [00:01:01] It’s an interesting start – over five years ago now. And we were developing a solar farm and talking to one of the developers interested in electric vehicles. I said, Greg, I’ll see if I can introduce you to be very useful. And he introduced us then to Charles Kan who is Taiwanese, he’s nuclear engineer, but he’s got a heck of a pedigree behind him. He was chief engineer for high speed rail that runs the length of Taiwan, also a senior manager in one of the leading auto industries in Taiwan. They manufacture components for Toyota as well. As we dug deeper, we found that his partner, Gerhardt Kerr out of Germany is also is modest. He calls himself a mechanic, but he’s a little bit better than the mechanic.

Greg McGarvie: [00:01:47] 2000 was one of the points in his life where he worked with Earnest Tomka on the smart car, which everyone knows about. The smart car is probably one of the first small vehicles around that looked at efficiency. And I said he’s got that genetics behind him. He is also involved in Benge with the fiber reinforced plastic division setting that up. And we’re sort of a little bit lucky, Stephen, between those two people, we’ve got some very advanced thinking and technology. And at the moment, I mean, others will be catching up and some it doing similar things, we have 100% composite production technology and the advantage of composite technology and BMW and the others are recognizing this and they’re doing it themselves with some of their vehicles. Big advantages that the time between design and prototype on the road. Plus, just the manufacturing process where you can within 24 months have a concept, prototyped, ready for production. And in the in the vehicle industry, use those lead times of six to eight years, sometimes longer, sometimes shorter.

Steve Mabbs: [00:03:04] I also read somewhere to it’s not only that, not only obviously lighter and and more cost effective to power, but I think I read that they take a third of the energy to actually build the vehicle as well.

Greg McGarvie: [00:03:16] It’s true. And no water. So in our factory we’re setting up we’ll have a zero carbon footprint. It’ll be sheeted out with solar panels and storage and so on. And if we do over on energy, we will buy green energy of the solar farm. Our focus is cradle to grave green as possible. We’ve got research relationships now with the University of New South Wales, University of Queensland and Flinders University. And the projects we’re developing with them are all focused on energy efficiency and green technology.

Steve Mabbs: [00:03:51] So when you met these gentlemen five years ago, were you actually looking to build an electric car or did circumstances just come together that presented you with the opportunity? You thought this is something I was meant to do?

Greg McGarvie: [00:04:04] I never thought that – I’m a marine biologist! So, you know, building vehicles didn’t really look like that was involved in my career option. But I’ve always been involved in setting up environmental type organisations. And and really, this is an environmental organisation, because changing the way we work with our environment through transport. And the big advantage of our vehicle is it doesn’t steal oxygen, doesn’t reflect oxygen with toxic exhaust fumes, very inexpensive to run. And the manufacturing process, as you said, 1/3 the energy and no, no, no water required other than the workers washing their hands and having a drink.

Steve Mabbs: [00:04:47] So you’ve spent from looking at your background, you’ve spent your whole career working in the renewables sector or trying to achieve a low carbon footprint in whatever you’ve done pretty much since you started working. You’re probably one of the early pioneers of the industry, really. Is that something you fell into or what drove you to sort of spend your life doing that?

Greg McGarvie: [00:05:13] Well, I guess in high school it started up a dive club. And I love the ocean. And people don’t realise and they still don’t know how important the ocean is for our global health. Now, the oceans produce more than 70 percent of our oxygen. The oceans actually regulate the global temperature. The oceans have been protecting us from these high rises of CO2. They’ve been absorbing it. And the scary bit is that as the oceans heat up, more CO2 bubbles out, and suddenly you have what we call runaway climate change. And, so I’m doing this because I like the concept of electric vehicles and they’re brilliant drive really driven one, you’ll understand what I’m talking about. And it’s good for the grandchildren, the future. We hope to leave a legacy here where the grandchildren are not worse off then than we are. And at the moment, they’re not facing a real hopeful future if we don’t change the way we do things.

Steve Mabbs: [00:06:16] Yeah, good on you. So tell us a bit about ACE EV and your and your three vehicles that you’re working on. It sounds to me pretty exciting. They’re Australian made, assembled in Australia, I guess, for Australian conditions. And you’ve got three different models, but you’ve also kind of focused on the commercial vehicles first, which I thought was interesting. Can you tell us a bit about what your thinking was there and where you’re heading with these vehicles?

Greg McGarvie: [00:06:43] And that was really guided by Charles and Gerhardt and I questioned them at the start but now I understand the wisdom of what they proposed because we’re effectively in a marketplace where there’s not a lot of competition that’s certainly got to come. And as I said, our focus is an affordable vehicle, it’s the last mile delivery utility vehicle, it’s not meant for long distance travel between cities, for vehicles coming along later on that will do that. And the big thing we wanted to do is help with energy management. So in effect, it can be used as a source of energy, can be used to move energy from place to place. And if it’s a handyman or a builder with one of the electric vehicles, he can plug his tools into it. So in the old days, we went to a building site and you had to have a pole put up with 240V. You can go to a building site now as a vehicle and do a lot of the work using the vehicle.

Steve Mabbs: [00:07:41] And I see you’re focusing on, I read somewhere I think you’re sort of pricing the vehicles roughly $40k to $50k – in that sort of price range, is that right?

Greg McGarvie: [00:07:49] Yeah, they’re all under $40K. The ute, which is a little bit like the Subaru Brumby, which is a very popular farm vehicle. It’s a bit bigger than Brumby (even though it doesn’t look it, it is) – it’s $25,995 round figures, $26k, Plus, what we’re saying, is rent or lease the battery, because pricing energy of the battery packs is just going to change so much. And the advantage of leasing, of course, is if something goes wrong with it, it’s a quick swap over and the lease of the rental keeps going. But I think that the key point is that when you go out and buy your old fossil fuel vehicle, you don’t go out and buy five years of fuel with it. And effectively, when you buy an electric vehicle, you’re buying a battery, that’s what you’re doing. So, we’re saying buy the vehicle, battery separate and just lease or rent it and you can fuel it from your power solar time, or off your energy at home

Steve Mabbs: [00:08:46] Fantastic. And so what’s the current availability of those vehicles, Greg?

Greg McGarvie: [00:08:52] Very tough.

Steve Mabbs: [00:08:54] Where do I sign up? And how long will it take to get one?

Greg McGarvie: [00:08:58] Well, we’ve made a promise to ourselves to deliver our first vehicle to the first woman in Australia, actually who has visited one in South Australia, and that’s 22 October next year (2021). And it’s going to be hard to do, but we think we can make it. And what we’re doing, to be fair to everyone and say, look, reserve your vehicle now and then your first in line when it gets to the next step where you can order. At least your in the line to order it. Because we’ve only got 300 available of each model in the first tranche and we already got $2M worth of advance sales in vehicles. And that gives us a lot of confidence because we’re going to start building in the prototype we built last year in Brisbane. So the ute and the cargo are the ones that are available now and the urban comes online next year. And then and then down the track, we’ve got a series for which is a Transformer series, and that’s really, really clever.

Steve Mabbs: [00:10:04] Can you tell us any more about that? Is it under wraps?

Greg McGarvie: [00:10:13] It is, at least for 12 months. But, you know, it’s really clever.

Steve Mabbs: [00:10:18] Oh well, we’ll have to get you back when you can tell us a bit more of it. That sounds intriguing.

Greg McGarvie: [00:10:24] But our vehicle and the brief that we developed up was something that’s easy to use, easier than a mobile phone if you’re in the vehicle, no more issues with a mobile phone or being distracted as the vehicle will have crash avoidance capabilities and will effectively be right. The vehicle itself is effectively a mobile phone with a big battery system, seats and wheels.

Steve Mabbs: [00:10:53] And I noticed recently too you, I read you’ve attracted some federal government funding for your venture, which is great backing. That’s great recognition and great to see, you know, the Australian automotive industry getting its second lease of life, I guess. And what sort of difference will that make to you or to your business?

Greg McGarvie: [00:11:17] Big difference, because it’s effectively showing that the government does have appetite and is pivoting. And, look, the real focus is not the automotive industry, it’s energy management. And effectively, what we are building is an energy management solution. What it means is that the grid future operation of the grid can be the costs of it can be reduced because we don’t need to be seeking out power lines everywhere. And with the virtual storage networks and virtual power plants, which effectively what you have with your batteries, you got batteries everywhere, you’ve got a massive storage opportunity, and that’s an advantage for energy security in the grid in the future. And of course, the other good thing about this, because Australia is such a country with so much opportunity for renewables, where you can have incredible energy security. We don’t have to worry about oil reserves any longer once we’ve pivoted properly to using the sun’s energy, we’re on easy street and no one can threaten our transport systems.

Steve Mabbs: [00:12:26] Building a new car, designing and manufacturing a new car from scratch, I imagine is a massive undertaking. Can you tell us about some of the headwinds that you’ve had along the way and how you overcame them?

Greg McGarvie: [00:12:40] Well, we’ve had easy bit in terms of Charles and Gerhardt have done all the hard work over the last years, and they’re now doing a redesign specifically for Australia. And their first 20 vehicles, a special version being built in Adelaide in July next year, July, August, and they’ll be part of this vehicle-to-grid trial of the federal government’s funded. And now the whole idea of that trial is to demonstrate, one, that the vehicle can provide energy to the grid, two that as on board smart meter. And what that effectively means is your vehicle is locked down. So the vehicle is the one that gets charged, when it uses energy. And there’s a lot of other opportunities that come with that capability. And we’ve done that purposely because 70 percent of the market is offshore and there’s plenty of power points around,and there’s plenty of 3 phase power points. And it means you don’t have to build in charge stations everywhere, just take your car along, plug it in like a toaster and it fuels up. And the reality is that the majority of people ignore the test are owners. I’m was talking to one the other day, he’s had a Tesla for five years. He’s e-fuelled it or charged twice at a charge point. The rest of the time it’s been at home or in his workplace. And that’s the reality. Even in the UK, 90 per cent of people just charge at home. Can you imagine the convenience of it. You drive home, plug your car in, plug your mobile phone in and forget it. Next morning, the car’s full, the mobile phone’s right, away you go!

Steve Mabbs: [00:14:23] It’s the future, isn’t it? I was talking to one of my previous guests about the vehicle to grid capability and the fact that the amount of energy storage in vehicles is a lot more than what most people would have in their homes, even if they had a lithium battery at home, lithium storage battery at home. And the possibilities that comes with the fact that the vehicles are mobile, obviously, and can effectively become part of the grid because you can transport energy around and plug in. And whether you’re supplying energy from the vehicle or charging the vehicle, it sort of opens up the game a lot more to the kind of integration opportunities, I guess, between the automotive vehicles and the energy sector.

Greg McGarvie: [00:15:11] Now, that’s true. And and look, what we need to think of is the vehicles are effectively part of the communication network, except in this case, instead of signals, you normally have when you’re talking on a mobile phone, it’s electrical. And basically it’s very similar principles. There are a few different regulatory hurdles but other than that. And the big advantage, of course, is that let’s say you had a natural disaster like they did in Gippsland – all the power’s out just in the swarm of vehicles down there with their batteries and plug in 240 point and then they can plug into the houses. And as you know, and they said the storage level in the vehicle is about three times what the normal house would use in one day of operation. And of course, in a disaster time, you’d be very frugal with how much energy so might have, a week of energy use off a vehicle.

Steve Mabbs: [00:16:06] Greg, how many people do you have working in your organisation?

Greg McGarvie: [00:16:10] We’ve got pretty diverse. We’ve got a few different teams.

Steve Mabbs: [00:16:17] Yo’d have some good partners, too, I’d imagine.

Greg McGarvie: [00:16:20] There are four directors. The interesting thing, really interesting, a very good thing for us is originally we’re only going to be left-hand drive for the world. That was the agreement we have with Charles and Gerhardt. And since COVID and since what we’ve done in Australia, they’ve said “oh”. They’ve been out here a few times. So they’re actually going to move to Australia. So we’ll have right hand drive and left hand drive. We’ll be the hub for the global distribution of the vehicles. And 70 percent of our product is targeted for offshore agreements. We’ve already got agreements that we’re writing up with different countries to set up what we call assembly pods or pod up order.

Steve Mabbs: [00:17:03] Brilliant, I’m interested to talk about the culture of your organization, Greg, and do you surround yourself with people who are as passionate about this as you are? Is that the kind of makeup of your organization?

Greg McGarvie: [00:17:16] I didn’t purposely surround myself with them. They you know, they came, they joined. And for example, our advisory board – they often contacted me and said “Greg, we love what you’re doing. Can we get involved?” And on our advisory board, we’ve got the bloke who started up Amazon in Australia. First started it. And we’ve got a corporate lawyer that used to work for Toyota and is now advises the ACCC. And we’ve got all the right people to make sure I don’t do something stupid.

Steve Mabbs: [00:17:45] Pretty high powered board by the sounds of it.

Greg McGarvie: [00:17:48] And then our team offshore, particularly with this government funded vehicle to grid trial. We’ve got Silicon Valley people in Silicon Valley, UK and France, and I just can’t believe it. But we have picked up some of the global best in this area. And they’re driven by passion. But they love the idea that what we’re doing is focusing on the rest of the world where they need affordable vehicles in a vehicle that’s reliable. And honestly, if we don’t manage the rest of the world with carbon emissions and pollution, we’re wasting our time. It’s fair enough for Australia and the US to clean everything up, but we’re only a small, small number and the impact on the globe. And that’s our focus. And once once we’re fully monetized, the project’s been approved. It’s just a matter of being monetized. We’ve got a few quite a few Australians actually, re-shoring, come back to Australia because they want to be here and part of the project,

Steve Mabbs: [00:18:57] How are you funded? It sounds like you’ve got a few highly committed private investors who are part of the journey with you at the moment?

Greg McGarvie: [00:19:06] Well, it’s been – I blew all my money. And so I’ve said this before – if it doesn’t work I’ve got a sleeping bag and a memorial seat on the Esplanade at Harvey Bay. I’m pretty optimistic things are going to go very well. And now we can see that because the type of companies that are asking to join with us are the big players and I can’t reveal the names at the moment but that’ll come out earlier in the new year. And in terms of finance, it has been very, very difficult because anyone from offshore looking at Australia and saying what’s happening with EV in Australia? They can’t see anything happening! And so when there’s no clear support from government, just the idea of what we’re doing, it makes it difficult. And you know, we could have been funded probably two years ago if we’d had early support. But despite that, the fact that now there’s this pivot and that five million dollars from the federal government, that’s a real tick. And that that is helping.

Steve Mabbs: [00:20:15] Not only financially, of course, but also in terms of endorsement of what you’re doing.

Greg McGarvie: [00:20:20] And that’s important. I mean, I understand governments are wary, but the people involved with this group are not fly by nighters. We’ve done a lot in the past during our working history. And this will be my last contribution anyway, to try to make things a little bit better in Australia.

Steve Mabbs: [00:20:43] Greg, I just wanted to pivot now and talk a bit about your own personal background. Can you tell us where you grew up and any sort of memories of childhood that you think might have shaped who you’ve become?

Greg McGarvie: [00:20:58] Well, I grew up in Portland, in Victoria. I was a dairy farmer originally, and that’s where I developed my love of the sea. I started spear fishing quite well, I had a great spear fishing club – probably one of the first ones that had a mixed club where we had male and female members. And then I thought, well, I wanted to do marine biology. So I went to James Cook University, studied there and I did a few things while I was up there and then came back to Victoria and couldn’t get a job in marine in those days. That was a long time ago, you know. I was like a snake oil salesman, I suppose. They didn’t know where I’d fit. And anyway, I started teaching in tech schools and then we set up Marine specialised Marine study centres around Victoria. Then eventually I moved back up to Queensland in Mackay and continued that there and over that time I was involved with quite a few different things – Clean Up Australia Day, I ran that set up an organization internationally. I was a member of Australian Marine Environment Protection Association, and that was in collaboration with Helmeppa, the Greek version. And that was a learning experience. I even ran, at one stage politically and three recounts, and I’m pleased I didn’t get in, but it was a good education. It showed me how to do things. And I think, in fact, you probably know yourself Stephen, it’s much easier to achieve things outside the political process at the minute. And so I’ve had an interesting career, done quite a few different things, but it’s all been focused around the environment and trying to raise awareness about the sea. And because I would say it again and again, the sea is like our blood stream. We don’t look after the sea – forget everything else

Steve Mabbs: [00:23:02] I can see, I can see the connection there. Did you have any key role models that shaped your thinking either when you were a young man or maybe when you first started working along the way?

Greg McGarvie: [00:23:16] I think and probably later in life but my uncle was was one of both my uncles, actually, you know, they just had a very relaxed way of looking at things and very inclusive. And Paul Keating, because he was stubborn, determined.

Steve Mabbs: [00:23:34] He was.

Greg McGarvie: [00:23:36] And John Cleese – if you get serious about life, what’s the point of it? There have been influences. And we’ve got a lot of respect for the likes of John Hewson and David Attenborough. You know, he’s been persistent all his life and he’s trying to get the story across. I respect anyone that’s looking out for what’s good for the community and people. I’m not driven by (and there are people like that where they’re just driven by building their revenue and the gold the bank) but I just want to see something. I love creating things and seeing it work and progress. And most of the organisations I’ve set up are still running it.

Steve Mabbs: [00:24:27] Well, that’s a great testament. I noticed from your career background you haven’t changed jobs too much. You seem to have an average span in each job of about 15 years I reckon, or more.

Greg McGarvie: [00:24:39] Yes, I’m a bit persistent, and this one’s my retirement job.

Steve Mabbs: [00:24:46] Yeah, this one will see you through, you reckon? Well, it’ll be a great legacy to leave behind, too. Can you tell us like what I guess what you’re working on right now and what are some of the biggest challenges you see for your organisation in the next two or three years say> what’s on your mind, what keeps you awake at night?

Greg McGarvie: [00:25:05] Nothing keeps me awake anymore. But you get to a certain stage in life where it’s not worth worrying about – what will be, will be. And you can only do the best you can to make sure that you try and achieve your goal. And I think the biggest impediment we have is a political process where it’s so, sometimes so clumsy and it’s based on ideology instead of common sense and science. And the science is really important because that’s a good guide as to the direction we should take. And the other thing is, so the regulatory environment, people will, once they’ve got regulations in place, doesn’t matter how long they’ve been there, they’re reluctant to change them. And with what’s happening nowadays, particularly in our area, it’s important that the regulatory environment starts to flex and understand what’s needed. Otherwise, Australia has got so much talent. You would know that, Stephen, just with people you’ve met. We’re oozing with it. And a lot of people are just so frustrated – that talent’s not being released and utilised properly. And that’s why we’ve got people overseas that want to come home. They can see there’s a chance with what we’re doing. And they’ve been overseas thirty years pursuing other areas. And really, it’s I think what we’re doing here, we’re sort of tapping into an innate sense of enterprise and adventure. And then drawing it together with cooperative development, and not being too serious about what we’re doing. We’re focused on, quality and clear goals and dont’ get too hung up about it.

Steve Mabbs: [00:26:49] Yeah, I know you’re pressed for time, Greg. And I just got a couple more quick questions. So what would your advice be to future leaders in the formative stages of their career? Or if you could give advice to your younger self, for example,

Greg McGarvie: [00:27:04] Don’t give up. If the test of what you’re doing is good for all concerned and it’s good for the future, don’t give up. If it’s a good idea, it’ll work. Don’t give up if it’s too much of a dream and it’s not practical, you might have troubles. But a lot of good ideas have been lost because they’ve just given up. And I can tell you, even during this process over five years of times they thought how silly am I? I spent all the money. Nothing is happening. But it is, it’s looks like it’s coming together now.

Steve Mabbs: [00:27:47] So last question. You mentioned earlier, you think this this will see you through to retirement. What are you hoping your legacy will be?

Greg McGarvie: [00:27:56] Well, I’d like to be able to see my grandkids move into part of the organization, whether it’s as part of the pipeline, the supply chain, such great research opportunities and side developments. For example, I haven’t talked about the personality that we’re putting into the car. The fact that if you walk out into the garage – it’s light will come on and it will say ‘Morning Stephen!”. It will have recognized you just by the way you’re walking. As you get closer, it will recognize your face. And if you say, “oh, I’m fine, I just want to go down to the supermarket, you’ll recognize your voice. Three factor authentication will open up and let you in so you don’t need keys.

Steve Mabbs: [00:28:37] Wow. That’s pretty high tech.

Greg McGarvie: [00:28:40] And Elon Musk, I should have mentioned Elon Musk. I wouldn’t be here without him. He’sbroken all the barriers and he just thinks outside the box. And he has no idea and says, okay, well, let’s do it. And we’re in that space now where the idea is a good idea, with the technology and the resources with the people we’ve got around us, it’s possible.

Steve Mabbs: [00:29:03] You know, you see people like him. He’s a true visionary. And you realize that if you can imagine it these days would be never a better time really to make it happen.

Greg McGarvie: [00:29:14] Exciting times, really exciting times. And it’s just it really is government stepping back and not interfering too much. And really focusing on energy efficiency and low or minimum impact on the environment. Those two things have to happen and that will take the United States, the fossil fuels, they’ve got the foot on the neck of nature at the moment. And we’ve got to get that foot off nature and get away from fossil fuels just to burn them silly. They could be used in road building and other things where it’s actually stored. When you just burn it, put it into the air, what a waste of resources.

Steve Mabbs: [00:29:57] Greg, look, it’s been fascinating talking to you, and I really appreciate your time. I know you’re extremely busy with everything you’ve got going on, but I do want to say thank you. Really appreciate it. It’s been fascinating to learn about how you go about building an electric car from nothing and to a working product. That sounds like it’s going to be pretty amazing. And I think I’ll be putting myself down for one as soon as we finish up here. But really appreciate your time, Greg, and thanks very much for that.

Greg McGarvie: [00:30:26] Look, I appreciate the chance to have a chat with you. Thanks

Steve Mabbs: [00:30:29] Guest today was Greg McGarvie, founder and managing director of Ace TV. Please join us again next time when we further explore dimensions of leadership through the experience of another of Australia’s top organisational leaders. All the best.

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