[00:00:37] Good morning. Welcome once again to our Supply Chain segment in Spanish. My name is Enrique Álvarez and today we have an extremely interesting episode in one of the cutting-edge technologies and an area in which many, many companies have bet on. Many companies that are putting in investment, capital, money and effort. And well, Mexico is not far behind and we have a person, an entrepreneur. Alfonso Hernández, director of Advanced Power Vehicle. Alfonso, how are you? How are you doing?

[00:01:09] How are you doing? Good afternoon. Well thank you Enrique, here for inviting me to the podcast.

[00:01:14] Thank you very much for being here. As I was saying a little bit is what you are going to present to us. And well, before we get into that, let’s talk a little bit about you and your career, but an extremely interesting industry and well, unfortunately also very impacted by the pandemic, right?

[00:01:30] Yes, yes, it is one of the industries with the greatest potential right now and I believe it has the largest number of startups. But hey, in the end it’s an opportunity. No?

[00:01:41] Well, I am proud of it. I am Mexican too, so it is a pride to have you on our show and this episode speaks very, very well of the many entrepreneurs, engineers and capable people in our country and throughout Latin America. Yes, if you want to tell us a little bit about who Alfonso Hernández is, tell us a little bit about yourself, who you are.

[00:02:04] Well, I am originally from Mexico City and practically all my life I grew up in Guadalajara. And later I had the opportunity to study in Monterrey, at the Tec de Monterrey. Initially I started with mechanical engineering, the famous IM there at Tec, but then they opened the Industrial Design career, which caught my attention and I changed to Industrial Design. And that’s where I started. I’ve always liked the automotive theme, haven’t I? And at the end.

[00:02:42] Of the night. I can imagine.

[00:02:43] Yes, yes, yes. Yes, yes, I remember since I was, I don’t know, four or five years old, when I turned on the TV and watched Formula One races. From there I was shocked, No, even me. The first name of a driver I remember was Nelson Piquet. And I had my avalanche. I don’t know if you remember.

[00:02:59] Yes, of course. Registered trademark. Avalanche.

[00:03:02] Yes. And well, I felt like a pilot and I have always been interested in automobiles. After I was a kid, I had more control carts as competition professionals. And somehow I always felt the linked to this topic, right? And in the last semester of the career and in the Tec. I had the opportunity to work with engineers who had worked for NASA and Scott Works, which is a well-known division in the aviation field. For a project that they had approached Tec for us to help redesign. And with them I learned about a system that they had designed to store energy precisely from the eighties, thinking about electric vehicles. They what.

[00:03:53] It is basically a battery for people who.

[00:03:56] No, no, the system that they had designed is a dynamo or what they call it in English is a fly while that store energy when rotating high revolutions and when you brake it in a certain way and you recover that energy and convert it into electricity. It is not like on the bicycle that you put a clear bulb and the dynamo was glued to the ring. It is not a similar concept. So they engineered this in the ’90s, even funded by Kevin Costner. But at that time no one was interested in the subject. The electrical issue did not work out and they ended up selling themselves to NASA for satellites, which was an excellent system for storing energy far superior to the batteries available at the time, which were just beginning to use lithium batteries. When I found out about this in 2004, it caught my attention and I always had the bug and said hey, this has a lot of potential. More, because batteries were still very expensive and very heavy.

[00:04:55] And not very efficient. I imagine that.

[00:04:57] Yes. So I was always looking for the how, how to start a project like this. But well, then, raise the investment. So here in Mexico it was very difficult. And they one.

[00:05:10] Quite an interesting and capital-intensive industry. In other words, it is not. It’s not just any investment thing. You need good investors, you need to have a good.

[00:05:19] Yes, several million dollars to start such an issue and they were no longer interested, then. In the end, coincidentally, Formula One around 2008 went hybrid. Or they included that the engines had an energy storage system called KERS at the time.

[00:05:39] And so far they are like this. Sorry yes, yes, yes, yes, of course, I didn’t know that.

[00:05:44] Yes, but it started in 2008, very small system and it was for a few seconds. I think it was about eight seconds. It kicks the button, the straight and that gave a power.

[00:05:52] To give you more power.

[00:05:54] Yes. Then. Virtually every team went for a battery system, but one team went for the system that was the Williams team. So I approached them, I looked for a lot of work.

[00:06:07] With Nelson Piquet. I can imagine turning your knowledge around like Williams or something.

[00:06:15] Yes, I don’t remember well, but I think so. He was at Williams at some point in his life, in his career. But well, in the end I managed to contact them by mail. Impossible. I ended up literally grabbing the phone and I want to talk to someone today. And we started talking. I was telling them that I am interested in technology distribution here in Mexico. And they told me, well, this is just now. Development is already testing here in London. There is no point in doing simultaneous. Already. But since this is ready, we’ll talk in about two years. I don’t know if it was what I do in two years. Coincidentally, in that inter I also got involved in renewable energies with a guy who was a partner in a company that was going to build several mini hydroelectric plants precisely to sell energy to private companies. What they call it here is called the PPA, which is the Power Purchase Agreement. So I was already closely related to these energy issues. And when Williams finally finishes the technology that says this is how we’re going to commercialize it. They sell the division to a very large international powertrain manufacturing company and I lose all contact. Then it was back to contacting this company until I found the person who was in charge of the division.

[00:07:42] And he says yes, I am very interested, because the application I wanted to implement was precisely here in Guadalajara, where we have the BRT system, which is the one of the 18-meter articulated buses, they are all very heavy and go in a confined lane, right? Sure, and that’s what they were telling me, they had been testing on London buses, the double-deckers. And they said that the application is even better than the one you have over there, right? Because they are even heavier and because of the amount of kinetic energy they bring, they say it is like Formula One, because in Formula One it will weigh 700 kilos, but it goes up to 150 kilos per hour, right? So we started to talk about numbers, costs, I was able to contact the Metrobus operators here and we reviewed the issue. What happened is that at that time he says it was very cheap in Mexico, if I am not mistaken, at that time it was like 9 $ or 10 $. And compared to London.

[00:08:48] Well, still.

[00:08:49] It was $5. Yes, yes. In other words, they were around $25 and we were around $10. So it’s the numbers.

[00:08:55] They don’t give, they won’t give.

[00:08:58] That’s right, isn’t it?

[00:08:59] What has happened to you? A lot of damage. If you want a little bit back, you know the story much better than I do. He liked the story of the electric car, which in itself is nothing revolutionary or as revolutionary as people think. But all the oil and gasoline companies have been lobbying for him not to leave, because at the end of the day it was their business that was being hit.

[00:09:23] We do not talk with documents because the history of the automobile itself is credited to the first automobile as such the Daimler. This one, sorry, to Carlos Benz. So after 60.

[00:09:38] Yes. In fact, before Mercedes was Mercedes Benz.

[00:09:41] Or Mercedes Benz, invents the automobile, combustion. But it is said that there was already someone else who had invented an electric one, which had practically the same functions. But well, Karl Benz is recognized, who later becomes associated with Daimler and towards Avner Benz and the whole story, isn’t it? But electric cars have been around practically since the automobile began, which is around 1884 86.

[00:10:11] It is amazing that we are not so far behind of something that is a technology that is already certainly with many inefficiencies, because the type of energy storage was different and not very efficient.

[00:10:24] But in reality at that time the technology was far superior to combustion. Because if you try to visualize yourself in 1900 not a combustion automobile, all automobiles were expensive to begin with. I mean, we’re talking about the equivalent of $200,000 today, right? Of course, it was a luxury for very few people. They were the combustion ones. They were very slow, very noisy, unreliable. In other words, you practically needed a driver who was also a mechanic. No?

[00:10:57] Because obviously they were breaking every two or three weeks. I imagine it failed him.

[00:11:02] Oh, no, no, it was almost. Almost daily. Almost. To start it up. Start it up? You had to pour a thousand things. And also the crank, until the famous crank to start it. Well, not everyone had the strength to do it, especially for large engines. Then and electric ones worked like a golf cart. Today it was exactly the same as a golf cart. No? At that time, electric cars were very popular. It is said that around 1900, 50% of the vehicle fleet in the United States were electric vehicles, which was mostly New York. There were charging points on practically every corner. In other words, you arrive at a pharmacy, a store and connect your car and they don’t even charge you. I mean, I don’t know if for minutes, for hours, like, but there was the possibility. The entire cab fleet in New York or most cabs were electric, even had battery switching systems. Then one thing I wanted to know how, but.

[00:11:59] And suddenly. Well, that’s actually what I was looking for just now. I think there is a documentary called Okey, well, let’s put the link there for people who are passionate about this subject and cars in particular. But you’re right, then it already existed. And now back again to your professional career, which is really the interesting part of this interview. You start to see this, you start talking again to the people who had the technology. But gasoline did not make it feasible. That’s where we get sidetracked.

[00:12:29] Exactly. The return. The return was not convenient. Or especially for what companies are used to here in Mexico, which is another point. Here in Mexico we are looking for much shorter returns than in other countries, not especially in Europe or the United States. So they kind of like them. Wow, to wait two years for this not to have worked out. I said there is not going to be better, I am going to develop my own, that fits Mexico’s needs, right? And not be dependent on first world companies to develop there, right? And fortunately at that time I knew more or less how the Conacyt funds worked. And I applied. In other words, the. Yes, the project was created, we applied for the fund and we were awarded the fund in the first year. And with that we were able to start the project. Initially I wanted the project to be with slides. The idea was to use the beans that the Williams company had bought from the technology. But no, we could not reach an agreement, as they were rather reengineering the whole project. Then I had to resort to batteries. By that time, lithium batteries were already much more efficient, capable, lighter, cheaper. Comparison to what they were a few years earlier. But if back then we were talking about $1,000 per kilowatt, today in the automotive industry it is around $150 per kilowatt. In other words, it has dropped a lot.

[00:14:14] Yes.

[00:14:15] Exactly. So when you know.

[00:14:17] Better theoretically, because you know it better, it is better than Feliway. That is, the part or the Floyd is still a superior technology, but maybe more complicated or the batteries are already on par. How are those two forms of.

[00:14:31] This is an interesting question. I had never had it done before.

[00:14:34] I am a mechanical engineer. Maybe. Maybe that’s why.

[00:14:38] But tell me if flagyl has a lot of advantages, because even for example, well, the project I knew of these engineers who had worked for NASA or sold them to NASA. I remember them talking about how the system had done about 30,000 cycles without failure. When normal batteries give you 3000 cycles, there are batteries already of 10,020 thousand, but they are much more expensive. He. You have the advantage that they can deliver the power almost instantaneously.

[00:15:10] More than the battery.

[00:15:11] Yes, much more. And you can charge them faster than the battery. In reality, the charging time of a flag while, depends on the motor you use to turn it and the amount of energy you can put into it. No, no, you do not damage the system as in the case of some batteries, if you charge it too fast and damage it. Then. At the time, they obviously sounded far, far superior. But there were no suppliers. Of course, of course. For in the world there was not only one manufacturer who was for vehicles. We use them a lot in storage systems, energy. Because its response is also very fast. It cannot be even faster than a battery. So the constraint was rather the supply. I think that nowadays the battery technology would be overcoming the fly wild for the application, because you still have a mechanical element. Inside a moving vehicle, right? Of course, and also you have to have them at par, because if not the centrifugal forces that can generate there effects are several things that today are not as resolved as for a vehicle. In fact, Williams, who had it for their Formula One, I think they had it for four or five years and then ended up moving to battery. Also.

[00:16:30] I died again, sorry again that I diverted you from your career. But well, back again to what you’re doing, you’re going for batteries. You have already explained here what are the advantages and disadvantages of one technology versus the other and on and on.

[00:16:47] If the idea was then to continue with the batteries why not really.

[00:16:52] There was another.

[00:16:53] If I tell you at the time and back then I almost hated batteries, not because they are heavy, bulky, take time to take care of. But then again, even back then there were much better batteries with better potential. The costs are still very high, so we made this prototype very limited in capacity, but it was what startups call in the industry, the MVP, which is the minimum product or the minimum viable product to demonstrate that your technology works, right? So we chose to convert this bus, which is a typical transport bus here in Guadalajara at that time. But we did it with the capacity of the microbus in mind, which are these 18-meter articulated buses. This fall we put in a much more powerful engine. This truck comes with a 180 horsepower engine. We put in a 340.

[00:17:51] To simulate all the conditions that the.

[00:17:55] To simulate all the conditions that the joint would have and to do all the tests and all the development.

[00:18:00] And although it was in fact left, I think there you have a. A brief clip of what year it is to give a little background to the people who are listening to us, what year is it?

[00:18:09] We are for year 2015 2015. If you stop putting it by current law and we are around 2015 when we did this development. 2016.

[00:18:19] That’s the little truck.

[00:18:20] This is the little truck we converted, which is the.

[00:18:22] That you get it from the government, or how you took the truck out or with it.

[00:18:26] What did we have the fund and with our funds, you make your project, right? You say I need this money to do this and these are my objectives and deliverables and you send in your reports and they audit you and everything. But there was the physical bus.

[00:18:42] That there was nothing in all of Mexico at that time.

[00:18:45] With modern technology, it was the first one to be made here in Mexico by means of conversion. There you can see the engine, which is an engine that even goes directly to the differential, it does not have a gearbox and these are the tests we did simulating the Metrobus. In fact we are going for the job.

[00:18:58] On the street. Yes.

[00:18:59] Yes, that’s the cart.

[00:19:01] Maybe they lent it to you at two o’clock or 03:00, I imagine.

[00:19:04] Exactly. Since the minibus has finished its routes, we were able to test it with them. But well, that was precisely to demonstrate that the engine had the capacity to drag with the weight, with the slopes, because it is an almost unique route in the world for this type of Guadalajara.

[00:19:22] It has a lot of ups and downs, it has a lot of slopes.

[00:19:27] Yes, it has a slope of up to almost 12 degrees, which for this is a lot, even the vehicle. The buses that they have, the articulated buses, most of which are Volvo, were made with the maximum torque that was possible, not in terms of the engine, the gearbox, the reductions, everything. Because in a 32-ton vehicle, going up slopes of 12 or 14 degrees, if it is yes, it is complicated and above all that it is done at speed, because what they wanted was for it to go slowly. Then stop posting it around here. If we manage to do this, this development, we manage to do all the tests.

[00:20:09] However, from what you are telling me and what we are seeing, I say that they were successful, I was told that they were well received.

[00:20:16] Yes, yes, yes. The only issue was costs, as always.

[00:20:20] Sure, we’ve been talking, it’s not always the.

[00:20:24] Yes that here that the entrepreneur was from the development of the technology, that at that time here for example, our idea was that by means of the conversion the client could save part of the cost. No? Well, you are talking about the electric articulated vehicles that were already beginning to be seen in Europe at that time, which were also being tested, since they cost around $1,200,000. Yes, and we at that time calculated that we could do the conversion by. In half. Sacrificing a little bit of autonomy. Because obviously, being a vehicle not designed for that, there were not the ideal spaces where to distribute the batteries. And the idea was that it would have to be charged two or three times in a day with fast charging. But we have to start working. Even so, costs made it very difficult. If you’re talking about it costing twice as much as its Dicen version. So we were there like, “Okay. How do we do it? As we wait for costs to come down? The country is prepared to do this, and at that time we are promoting the issue of natural gas, which we can also discuss today about the different technologies available. Well, then came the change of government here in Mexico, which put everything on hold. Not all investments, especially this type, pass. And then this government has given high priority to fuels with the issue of refineries. All this and then the pandemic comes, right?

[00:22:07] Well, and before, before you get there, because, well, obviously that’s basically a new challenge for you and your team and for technology in general. Well, I know you were in Forbes as an entrepreneur who wants to make Mexico’s transportation, this electric one, what can you tell us about? In part ah, being Mexican, but speaking a little bit for the people who see us from all over the world, why is it for you personally so important, right? Owning an electric vehicle? Why is it so important to face the challenges involved? What was your ultimate goal?

[00:22:43] Well look, for one I was kind of in over my head with the technology, not for all my previous experience. But on the other hand, he saw the issue of contamination, of course, and said that this is the only way to start. I was even explaining back then the issue of pollution, which is like if you are in a little boat on the lake and you are sinking because you have a hole in the bottom. And if you put less emission vehicles, not as they say this, that I tell them less dirty actually that if the euro 4 €, 5 €, that of natural gas. Well, in reality all you are doing is making the hole smaller, but you are still putting it in because you are still contributing contamination. The only way for you to stop sinking is to plug the hole. And then see how you get the water out. First of all, stop the problem, then. In highly populated areas, such as Guadalajara, Monterrey, Mexico City, all the major cities in the world. The only way to solve the environmental issue, which is a public health issue, is to stop emitting emissions, that is, to stop emissions, and only electric vehicles can do that. Then comes the whole issue, which is where you generate the energy. Is it that the bottles, which are secondary outlets that have a solution, yes, but the point is that today in a city of 22 million inhabitants like Mexico City, if these vehicles do not pollute, you are already contributing a lot to millions of people, right?

[00:24:14] Of course, of course.

[00:24:15] That is the point. And that we also saw, for example Tesla, Tesla started in 2006, 2007, they released that model in 2012 and they started to send it to Mexico until 2020. In other words, it took almost ten years to reach Mexico. And I saw that I said that here in Mexico it takes a long time for all these technologies to arrive. The only way is going to be to push it from the inside. I think the big companies, the global assemblers that at that time were not even doing it. And here, let them do it. And of what? That they want it. He will spend many years in Mexico, not because of his qualities.

[00:24:53] Before you start recording, there is a delay of about ten years in brackets to the technology not arriving when there are already capable people with ventures such as yours. At the end of the day, we don’t have to wait for it to come from anyone else. We already have it there, in our country.

[00:25:12] Yes, exactly, if it can be done here. Obviously we cannot develop all the components you need. Is it clear? But if they can, they will be able to start implementing it, right? Hey, that was the loneliness.

[00:25:26] Well, and now, going back again to the story, this account of your professional career comes first the change of government, which was the first major challenge and then the pandemic which you told me was extremely unexpected for everybody, but.

[00:25:44] Yes, yes, that issue with government. We were even promoting, we went several times to the Energy Secretariat. And we are talking about today. Comisión Federal de Electricidad, CFE has thousands of vehicles for maintenance. Not all of them can be electric, not this one, and in the end it benefits the Federal Commission itself. But well, it was a project that did not, it did not convince us because of the same priority they had in all the issues for Pemex. And then comes the pandemic, which was really difficult because. In all this transition we focused a lot on the electric carriage project, which we can talk about a little bit now.

[00:26:31] Yes, tell us, tell us how, how you jump from the bus to the carriage. That’s good. It is interesting to see how it went.

[00:26:40] The change was more of an opportunity that we are seeing that the market in Mexico was, was, was not ready. By mentalities and costs. No, no, there will be no government support. In other words, there was nothing.

[00:26:58] You’re not going to have what it takes, obviously, to reach.

[00:27:02] Exactly. Then we heard that the city of Guadalajara, the mayor at that time was Enrique Alfaro, was bringing an issue to motorize the cars, the horse-drawn carriages, because of animal abuse and a lot of pressure from animal protection and environmental groups. And they said they were going to make a diesel pickup truck and make it look like the carriage. And I said well that’s worse, isn’t it?

[00:27:29] Yes, yes.

[00:27:31] And how are they going to get that into the center? So we approached them and I showed them the bus project. And I told them We can do the escalators, we don’t go around converting them. And since I went to see them physically, I said no, this cannot be converted, these are already in very bad condition or some are very old, plus they are all different in size or height. All. So I said that really the only option is to make them from scratch. New and no longer as a carriage, but rather as a carriage-like touring utility vehicle.

[00:28:05] Of course. And well, and for those of you who are listening to us in other parts of the world and in other parts of Latin America, Guadalajara is a very beautiful colonial city, very nice and the whole downtown normally has these calandrias. With the horses and it is a very beautiful ride. So, well, you don’t want to kill that part of tradition and folklore either, do you?

[00:28:25] Exactly. And is that the ride in Calanda de Guadalajara, which normally in many countries are known as carriages or victories, here in Malaga they are known as calandrias. It has, it has, it was born historically because some colonies were built, what is called the modern colony, especially here in Guadalajara, where the rich left the center to live in those colonies and they had houses of a whole block, right? Every Sunday people started to rent carriages that were more than cabs. We are talking about 1900. Renting a carriage was like renting a cab. But on Sundays they went for a walk, to see the houses, and so the tour became institutionalized. In the 30’s or 40’s, when there started to be trucks and cars and all this, the carriages remained for the pure walk of those colonies. And so it remained. So it was kind of tragic to remove it, wasn’t it? Of course, because that has more than 120 years of history, we can’t take it away, but the pressure from animal protectors was very strong, which is partly right, isn’t it? Already on the most important avenue the citizenship to Vallarta with traffic at 14:00 in the afternoon on Friday. What is a carriage doing there without.

[00:29:38] What makes a horse or a.

[00:29:40] Horse? Of course. And of course there are accidents. They do not panic. Then. They loved the electric project. This was developed. We take the vehicle from scratch because nobody sells you 44-inch rims, no.

[00:29:59] If it is not a very very very very special and particular niche market. But well, that’s why you also switched to industrial design, which was part of most of your passion to change careers.

[00:30:11] I imagine that here it was mostly the mechanical issue, wasn’t it? Because it is an automobile. In the end a chassis was made and it is a structure and you bring it there and it ended up weighing 1600 kilos with eight passengers and the batteries. So we had to make a very well thought out structure, doing some finite element analysis, at a very basic level. But to give us the idea of. Well, the structure is going to support this. Sure, with daily use, mostly because of the same thing that happens from time to time almost every day. But really the attraction is that being electric, the feeling of the ride remained, which is a calm, smooth, quiet ride.

[00:30:54] No engine, no emissions.

[00:30:56] Of course, you don’t have there the change to the.

[00:30:59] Second to do it.

[00:31:01] Otherwise, no, no, no, no, no, it was not the solution. And well, it was a project that when it was presented, presented by the municipal president of Guadalajara, well, suddenly it was a media boom in networks. I was saying what’s going on, right? Twitter, Facebook, Instagram, everyone talking to me. It was in all the newscasts, in all the newspapers, the next day on the front page, wasn’t it? This was a very, very, very, very, very, very, very, very, very good project. With a lot of media impact. And from all over the world. They started to talk to us from all sides, they started to talk to us. People came from New York, from the United States, they were looking for us from Europe.

[00:31:42] That’s where you get in Forbes, I imagine. That’s where all the media grab it and that’s where Forbes magazine takes the story.

[00:31:49] Or not? Actually, Fort’s theme is what they call the 30 promises and it’s like a convocation.

[00:31:58] And it was before. Then the chariot.

[00:32:00] It was not after, it was after or in fact the media boom was with the carriage. And a little later because of Force, which was also a very strong push that caught my attention, because there had been media presence in practically all the media with this project. And also with the previous one, with the one on the bus. But when it was Forza, the truth is that it was, I mean, it was almost at the same level of impact. Like the names on the magazine, it’s a lot. And we had a lot of interest in many projects already signed, already closed. And well, the pandemic is coming, tourism is over. And who wants boarding?

[00:32:42] I don’t know how things happen. That was since you had all the machinery, movement, this pandemic falls and it falls. The project is stopped where you are now, in this part of. Yes.

[00:33:00] Well, the project is kind of on standby. And precisely because of all this, we are just seeing that in the segment that you will see a lot there, in the logistics and transportation sector, it is just recovering from the pandemic of all the economic effects. Because the point is also good, all the affectation that the companies had at an economic level, well no, it is not so easy now to invest in this type of technologies, is it? Of course, and even less so when there is no government aid. For example, in the United States, the State of New York has just authorized a $200,000 grant from the State to purchase electric vehicles, $200,000 per vehicle. To purchase electric trucks for urban delivery.

[00:33:44] And that is where it makes all the difference with some Latin American countries. To be honest, that’s where the teamwork between entrepreneurs, engineers, state-of-the-art technologies and government support comes in. More so after a pandemic that I think is basic.

[00:34:01] Sure, sure, because in the end. The government will benefit from this in the long term. By not obtaining pollution in the cities, the benefits are very many that are difficult to measure, not because they are intangible, of course, or to measure them or even if they can be measured they are difficult. But health issues, noise issues, in other words, noise, is a source of stress. People don’t understand, but how much health damage do all drivers have? They don’t spend 12 to 15 hours driving and have back problems. But well, and apart is the noise that also affects or the heat emitted by the engine and have to learn the experience. In other words, all those things are eliminated with electric vehicles, which is something very interesting.

[00:34:53] Yes, I believe that maybe the new generations and what we are living now, I believe that the benefits are no longer there, the benefits are no longer being questioned so much, no, I believe that now it is a matter of getting down to work and doing the things that have to be done, because I believe that this part is no longer so important. There is no longer so much dilemma or dispute about the doubts, there is no doubt that this is the future. So, speaking of the future, I wanted to ask you what’s out there? What is what? What new technology exists now or is about to arrive to replace battery-ear diesel, hydrogen and the like that I have absolutely no idea what it looks like. But what can you tell us a little bit about the future, not going ten years from now in terms of vehicles, in terms of batteries.

[00:35:46] Well, look at the technologies. Obviously diesel dominates 99% of the market, probably. And a few years ago I was hearing a lot about biofuels, which you may have heard too. They did not really work and were also lacking. Food. In short, corn, because most of them were made from corn. It did not work. Afterwards, natural gas began to be talked about in transportation, which I believe is the one that has penetrated the most now, but I believe that this technology has already lost its moment. I believe that this natural gas technology should have started in the nineties and should have been pushed and maybe it would have been at its peak by now. And now what is coming is strong, it is practically the electric ones, which are battery electric and hydrogen electric. That there what changes is that you in the battery stores energy. And on the other side, hydrogen is energy, right? So it’s kind of two, two sides, but all hydrogen vehicles or hydrogen they call them at the end are electric, they have an electric motor. So, in reality it is simply hydrogen that functions as the fuel. After that fuel you combine it in a combustion cell which is called as oxygen. It generates energy and that energy already goes to the powertrain, to the engine and they have a small battery, usually lithium, because you have to say like starting is going to be combustion. The advantage here is that the only result is water. So, for this reason, it has a lot of potential. And another. Another issue that helps hydrogen technology a lot is that it is very fast. Charging is practically practical.

[00:37:37] Because it is how it is recharged, what is recharged in a battery or in a hydrogen car.

[00:37:42] In a hydrogen vehicle. It is no longer the hydrogen tank, literally, which is a gas. Sometimes liquid can be put in at very high pressures, but it is a supply and distribution chain very similar to diesel. You’re not going to have very large sites that are generating the hydrogen, you’re going to transport it either by product or by truck. You’re going to have charging stations. And transferring it from the charging station to your vehicle is done very quickly, as if it were gas or diesel. Then your tank can be filled in five to ten minutes. Just like he says and you leave with the advantage too, which is very light. Then you do not impact the weight of the trip and.

[00:38:26] You could use the same distribution system. In other words, you could use the same pipes and not the same ones, you would have to change them or you would have to change the whole one.

[00:38:36] It’s a whole different supply chain. It is very similar.

[00:38:39] Concept, but you can’t use what you already have installed.

[00:38:43] Exactly. What I see as a very strong limitation to this technology.

[00:38:46] Starting over? Basically.

[00:38:49] Yes. And, that is.

[00:38:50] Could you reuse some of this? Maybe it is. It would be more practical.

[00:38:55] Yes. But, for example, imagine who is going to allow you in the middle of Mexico City to put giant hydrogen tanks that have the potential to explode. Aren’t there very good technologies, no longer very, very safe in terms of tanks, but in the end it is a potential, isn’t it? So of course, for example, natural gas stations are not allowed to be located in the outskirts of cities, right? And they say hey, it can’t be that many kilometers away from a hospital or a school, or there are a lot of limitations to this, and I think that’s what’s going to slow down hydrogen energy a lot. And then there are the costs. It is very expensive because you need energy to generate liquids. Hydrogen is the most abundant element in the universe, or one of the most abundant along with carbon. But you cannot find it in its natural state, that is, not natural, but as hydrogen. It is always combined with something. It is always in combination with something. Then. To have pure hydrogen, do you need to separate it? Yes. That there is something called gray hydrogen, blue hydrogen and green hydrogen. The gray comes from.

[00:40:03] From. Yes. I do not know this subject in detail, but if I am not mistaken, it comes from natural gas, that is, from natural gas processes. Hydrogen can be extracted from it. Also from some distillation processes or fuels. You can extract a little bit of hydrogen, but that’s why they call it gray, because of course, what you need is well another polluting matter to then have hydrogen. And if there are ways to generate hydrogen. Green. That would be, for example, doing electrolysis of water, not separating water to generate hydrogen and releasing oxygen. Very good, yes, but expensive. No, because for each kilowatt I even have a small image that you can see. This is precisely, I don’t know that it is also seen, but it is a comparison that talks about the percentages of hydrogen, diesel. And electrification. Then you have to say only 22% of the energy. And that’s what they call it from for the world to wild, which is from the well to the wheel. You only use 22% of the energy from each liter of bike. 50% is wasted.

[00:41:19] A lot of waste.

[00:41:20] In what you extract it, refine it, transport it, pump it to the truck and then you use it only 26%. And calculations without hydrogens are talking about 33 42%. Today it is 33%, while the electric ones are at 77%. So the efficiency is very high and for every kilowatt hour of energy that we say, on average here in Mexico it costs you 3 $, three 50. So instead of generating hydrogen, which you have to transport, you just put the vehicle as a charge directly into the battery and let’s go.

[00:41:59] Of course, of course. What is it that you do say? That’s what you were saying before, isn’t it? With the example you gave us. You’re on the boat, in the middle of the lake and, well, you are. You keep sinking. At the end of the day it is not. Maybe you don’t sink so fast, but isn’t the last one the final solution needed to solve the root of the problem?

[00:42:18] Exactly. No? Then here you go. With battery-powered vehicles, you have energy efficiency, you have zero emissions, at least where the vehicle is. There are no emissions that if emissions are generated elsewhere there is already the example. Also this emissions thing I was saying look, it’s like you have your air conditioning, the office you have it here. And next to you you have the plant designed to generate the energy for the air conditioning. 24. Are you going to die from the pollution that plants are generating? What do you do? Do you send the generation plant to the roof or do you send it away from where you are? In all emissions they are there and you are here with the energy. So that is like the first step, not to separate where the emissions are being generated so that they are not in highly populated places, cities where you have millions of inhabitants, as there are many around the world, Paris, New York, Los Angeles, Tokyo. There is an infinity, isn’t there? And there you take the first step to reduce pollution in an impressive way. And there is also another point that few people talk about, which is the brakes. Brakes are highly polluting. All the dust that is generated, the cheap one. If you are at the truck stop and that moment, the truck arrives, the whole town leaves and you don’t breathe. These are heavy particles that quickly fall to the ground but end up in the subsoil and eventually end up contaminating groundwater, aquifers and the like. And it’s another benefit of electrics, the electric motor. With the force that accelerates you, with that same force it can slow you down. And you also generate energy with the sick, so you recover part of the kinetic energy that you brought with the movement of the vehicle. What do the Formula One drivers do in the.

[00:44:09] Border and it is something that I in particular. No, you don’t think about it, you don’t talk about an electric vehicle and you don’t think about the brakes, you don’t think about how it moves forward, not how it brakes. But then there is a benefit to the brake that maybe not, or at least I wasn’t so clear about it, but it makes sense. And well, I thank you for everything you are sharing with us. This has basically been an east class, this interview, giving it a little bit of changing the dynamic a little bit. We are nearing the end of the interview and again thank you very much. It has been a pleasure talking to you. We are going to put several of the links and several of the things you are telling us in the interview so that people can see it. Tell us now, turning to you again, two things one. What lessons have you learned from when you started until now, going through everything you’ve been through? What would be the two things you could comment or share with us? And the other thing, what are your plans? What are your plans? And what are Advanced Power’s plans? Bicos?

[00:45:14] Look as well as choices.

[00:45:17] Several, so you can write.

[00:45:19] A book. And maybe not very positive. But well, entrepreneurship in Mexico is very difficult because of the financing issue, especially for technology projects. What is very complicated in the United States, I mean, we see similar states that are already worth several million dollars right now, right? Because it is very easy to lift there. Investment Obviously there is a lot to do with the country, not the certainty that the country brings, the guarantees. What I would say is well, if someone is interested in entrepreneurship, they have to measure very well. Your times, right? Because if you say today in two years I have it ready. It won’t take you four.

[00:45:58] Multiply by two or three. No?

[00:46:01] Yes. So maybe that would be an apprenticeship and the other would be to insist, right? I personally had been in many projects before, which were also very innovative. In due course. Around 2000 I was very involved in 3D animation, which was just starting and when there was no market. Then I got desperate, I got into other things and that’s when the strong market for animation started.

[00:46:29] You are always two or three steps ahead, what happens is that you have to take a two- or three-year vacation to catch up with the technology.

[00:46:36] From the pandemic.

[00:46:37] That’s right, there it is.

[00:46:39] In a way it was the pandemic. Yes. And well, right now the issue with AP is that we are restructuring the project in order to relaunch. Mexico is already starting to take an interest in vehicles. I mean, just last year the first 100% electric transport route was implemented in Mexico, which was here in Guadalajara, and they brought Chinese buses. Mexico City. Yesterday, just yesterday, he announced that they are going to all the Metrobus line three, which are articulated buses. They are already going to make the 60 electric ones for next year.

[00:47:19] How nice!

[00:47:20] That there you know why they are getting, because they are bringing in Chinese. And if we can’t here.

[00:47:26] Of course, of course.

[00:47:27] That’s also where you get a lot of the point that, well, governments tend to want what’s new, don’t they? Not retrofitting an old vehicle that doesn’t look the same in the photo? But it doesn’t matter because in the end it is the spearhead. Does this help to open up the market, so that people, all the transport operators who were hesitating when they saw it, because it happened to us a lot today is that how is an electric vehicle going to be able to move tons? How do you think trains move? Trains are electric all over the world. Some have a diesel generator, but all have an electric motor. They move hundreds of tons. So that part will be left behind with all these projects that are starting and we believe that the market will start to grow. And with all the coming battery technologies, which are coming along impressively, the development of new batteries. What is it that few people may not realize? Because nowadays if the electric ones. And it is still limited by charging time and battery weight.

[00:48:33] Sure, but in five years or seven years that will be behind us. So in cost they will be the same in charging time, they will no longer take two or three hours, they will take 20 to 30 minutes. And it started will also be greatly reduced. So all those points against electric vehicles will disappear against diesel in five years. And everyone knows by choice. In other words, today we have to push the customer to leave or the carriers, not how to convince them. But in five years they will love themselves, they will want to move because they will realize that this is the best option. You have much less maintenance, less costs or more stable costs, you have different ones. In other words, what you need is energy. No matter how you generate it, you already have it. If you use diesel you are tied up. Not diesel? If that’s electricity, it doesn’t matter if it’s generated by offshore wind, nuclear fission or whatever. As long as there is power, you put it in the vehicle and go.

[00:49:35] Alfonso, it has been a real pleasure talking to you today. I am very sure that everyone listening to us thinks so too. Once again Advanced Power Beagles in Mexico wishes you all the best, you have our full support. If the people who are listening to us, if they wanted to contact you, what would be the best way to do it?

[00:49:57] Ah, thank you. Well, look, we have the website, which is the app mx dot com. And in networks. Well, we are mainly on LinkedIn for business and also on Facebook as abbreviations for old people. If you want to contact us. And well, we can help them to understand the whole electrical issue. We also help with the issue of consultancy so that, above all, all logistics companies do not feel that this will impact them sooner or later. We rely on understanding this, the benefits, advantages and how to transition. And I thank you very much Enrique for inviting me to the podcast. I hope it was interesting for those who listened to it and learned something from.

[00:50:41] Of course it is of mobility. And well, many of us would like to invite you in a few months as all the activity and investment in this very interesting industry is reactivated. And well again we wish you the best of luck. It has been a pleasure to talk to you and thank you for being part of another episode of Supply Chain o en español. Thank you very much. Thank you to everyone who listens to us. Again, my name is Enrique Alvarez and we are waiting for you in another of our very interesting episodes. Thank you. Have a nice day.