Green Giants – Episode 96

Wes Ashworth (03:34)

Very interesting. Just journey and story and it’s a useful reminder. I think the best founders are often sort of seeing around the corner a little bit, not just reacting to what the market already agrees on. You mentioned that too, building Turner Renewable Energy and then saw it become part of First Solar. Just looking back, kind of going through that and that building process, what did that experience teach you about how new energy categories actually move from promising to mainstream?

Freeman Hall (04:00)

Well, exactly like you said, seeing around corners a bit, what’s coming is helpful. I think in the case of solar, we could see that the conditions were going to be right for unit cost to come down and therefore the scale to be unleashed. But because it was new, there was going to be significant uncertainties with the whole industry needing to get more comfort on financing and risk concerns.

That have to do with the cost of capital. Those are intermittently connected, of course. As folks got more used to solar and more good experiences, quickly the perceived risk came down in solar. Therefore the cost at which you could profitably deliver solar would come down as the cost of capital were coming down and frankly, the cost of solar itself going down as the installed capacity increased.

That applies to what we’re doing now with B2U Storage Solutions. We shifted gears to focusing on deploying storage in 2019. B2U is a company whose name essentially refers to Battery Second Use, B2U. Our insight was that a large proportion of EV batteries that would no longer be suitable for automotive use would still have substantial residual value due to a stationary storage use case that’s frankly less demanding. You can run the batteries at lower current and still get a couple thousand, few thousand more cycles at a lot of batteries that weren’t again suitable for automotive use. We have been pioneering here.

To your question, this has been perceived as something that’s quite uncertain and quite risky, and there are real risks to mitigate. But we found that the mitigated risk profile is substantially less than the perception of risk there. That’s sort of the thesis that the company’s built around to go ahead and do it ourselves, develop that track record, show this is cost effective and profitable. Then frankly, there’s such a big need and desire for repurposing to extract that residual value that but we’re really in a very good spot right now.

Wes Ashworth (06:01)

Absolutely. I appreciate you kind of going through that and just sharing a little bit of your journey and how that all came to be. That’s kind of the macro set up, a grid evolving quickly, storage becoming more important. Then this separate realization that batteries themselves might have a much longer economic life than the industry was giving them credit for and kind of bringing you to where you are today. Maybe you shared a bit of this, but if you can expand on it. What was the sort of the real founding insight behind B2U?

What did you see that made you believe second life EV batteries were not just a sustainability story, but really a serious infrastructure opportunity?

Freeman Hall (06:35)

Well, it was, as I mentioned, a view we had that having been developing solar projects up until that point with our company, we were starting to see duck curve dynamics, which is sort of shorthand for when you get a higher penetration of solar in certain areas of the grid. When the supply of solar is plentiful, the prices decline. As that solar resource goes away in the evenings, there’s still a big demand for power and that would lead to a depressed price and then a rising price in the evenings gets referred to as a duck curve.

We frankly started deploying storage with some of our solar projects and responding to utility requests for more power with hybrid systems that would incorporate storage so that we could supply that incremental unit of solar in the evenings after storing and then discharging. Our insight was that the age of storage had arrived now that solar and wind were very much not only cost effective and reaching sort of grid parity, but really were the cheapest form of energy that were out there. Just they were intermittent and weren’t like a base load resource.

Storage paired with those renewables can act like a base load and a firm power source. That’s where we married the need for cost-effective storage with the insight that we started scaling the deployment of electric vehicles about now 15 years ago, as the Nissan Leaf was the first widely available commercial EV in the US in 2010, 2011 was first being sold.

By the time we were looking at forming B2U in 2018 and formed in 2019, we’re already starting to see hundreds of thousands of EVs out there in the marketplace. All you got to do is look in the rear-view mirror, so to speak, to know that those batteries were going to start to reach end of life. Given, as I said before, those batteries do have residual value left in them relative to a less demanding use case, which is what stationary storage represents, where they’re not being run at the current or amperage that they’re rated for can run for quite a few more cycles.

That was really the core insight we had that that first trickle of batteries, because we did acquire a few hundred Nissan Leaf batteries from Nissan, they had gotten batteries back because of some warranty issues. We said, “OK, well, this is the first trickle, but there’s many more coming. Can we develop a technology that would avoid incurring repurposing costs?” 

We didn’t need to take that EV battery pack apart, break it down to its component modules or cells, and then add a new battery management system software, new harnesses, reassemble, retest. We could develop a technology to deploy that battery as it comes out of the vehicle and sidestep or avoid those repurposing costs.

That’s the path we took with our technology. We’ve gotten some patents around that approach to stationary storage. Like I said before, we needed to be able to sort of not just tell folks this is going to work but show folks it was going to work. We were in a unique place as a developer to not only develop a great technology, but to deploy it at our own projects onto the grid and develop that track record of reliability and performance.

We’re now five years down the road with that performance data, that reliability data showing and not just telling that this is a very reliable solution that is cost effective, is profitable and solves a real need out there.

Wes Ashworth (10:11)

I love that kind of origin story. I think so many meaningful businesses start with someone sort of noticing a problem and also seeing the opportunity and then just thinking about it differently. As you mentioned, too, sort of a lot of those early repurposing efforts focus on taking battery packs apart and rebuilding them. Your approach was just different and kind of just I love that the view of that, just seeing it completely different and then coming up with a solution. Further on to that, B2U’s model depends on sort of preserving more of the battery pack, building the controls and software around that.

Talk us through that. Like what had to be true for you to believe that approach could actually work in the field? Seeing that wasn’t like the normal way people were going about this up obviously your solution.

Freeman Hall (10:50)

Right. Well, again, like I was saying with solar, we certainly were applying some of the same lessons that my partner, Mike Stern, and I started Solar Electric Solutions in 2008 after I had left Turner Renewable Energy. Mike had a long background in power system engineering focusing on solar systems. We saw together how solar could be reliable and high performing, but it was new and just needed some time to work through.

That was how we proceeded with that business. Then we applied some of the same lessons with storage that we would need to sort of show people with a good data set how this works. Frankly, the grid wasn’t all that prepared in 2019, 2020 for some of the stresses that were coming. You had a higher penetration of renewables in a grid like California.

Solar especially, but also wind. You really were seeing these duck curve dynamics with a lot of volatility in pricing. That was another thing that we were recognizing is that there hadn’t yet been a substantial installation of storage, though the need was strong. Therefore the margins that we could see with storage systems that do profit from volatility have been very, very strong.

That was just another positive factor that was leading us to say, hey, we develop projects, we connect them to the grid, this is what we’re good at. Battery storage is what is in high demand now. We’ve got a better approach to a uniquely differentiated product that is more cost effective, but it’s perceived to be risky and it’s perceived to be perhaps unreliable.

We can not only make some good money deploying resources that were operating in the California grid with very attractive conditions, with a lot of volatility. We could make very strong margins that way while even more importantly, proving the reliability and performance of our differentiated technology platform. It really was a nice alignment of factors as you’re speaking to. We were applying some of the same lessons.

Here we are five years later with a very well proven, reliable, high performing set of battery energy storage systems, both here at our first site in Lancaster, actually where I am today, we built another system deployed in Santa Barbara County in 2023. We have gone into Texas with projects on the east side of San Antonio. Our first project has just been operational at the end of the year and have a good bit of expansion plan because frankly, the volume of batteries looking for repurposing is expanding. Our ability to demonstrate that the mitigated risk profile is a good bit lower than sort of the perception of risk has helped to attract more investors who are seeking just those opportunities to make strong returns, but with a risk that may not be that different from the alternative.

Wes Ashworth (13:42)

Absolutely incredible journey. I love that success and the growth and expansion. I do want to go back a little bit to like the early days of you get hundreds of these, Nissan Leaf batteries, I believe. You’re sort of trying to test it and prove it out and show people that can work like take us back to those early days. What did that feel like? When was that moment where you’re like, OK, I think I think we got something here?

Freeman Hall (14:03)

Well, as I mentioned, we did start with those first few hundred Nissan Leaf batteries. Nissan themselves, because of a warranty, powertrain warranty issue, found themselves with swapping out some battery packs. The batteries they were left with were still perfectly functional and had utility, just couldn’t be deployed in Nissan vehicles anymore.

We got to know some of the folks there at Nissan and some of the folks that had done these accelerated aging tests and other studies and themselves had a view of how they could still run at these lower current applications. We decided to essentially take a risk and kick the tires to take these Nissan’s, the Leaf vehicles and deploy in a technology that would not incur these repurposing costs as I’ve described. We hired some early engineers who did some great work for us. Core to what we were doing is essentially taking the proprietary communication protocol that the Leafs operated around. It’s a CAN bus protocol that would allow the rest of the vehicle’s systems to control the battery.

We hired some engineers who helped us essentially working hand-in-hand with Nissan to ensure that we can communicate effectively with the battery pack and the native battery management system software still in those Leaf battery packs. We’re looking at the right configuration and ended up coming up with an enclosure, which we refer to as cabinets, that might be the size of a small shipping container, that at those early days was still fairly low in capacity.

We were only getting 340 kilowatt hours out of early cabinets, which is funny because today we’re well over two megawatt hours and closer to two and a half to even three megawatt hours in today’s cabinets. But those early ones were lower density, but were good proof of concepts. We were able to still produce those at cost effective installed costs because when we were getting started, the installed cost for storage had just crossed below a thousand dollar per kilowatt hour or a million dollars per megawatt hour.

We were less than half that cost at the time. We’ve continued to come down ourselves in cost. Frankly, as we’ve increased the capacity of our cabinets has helped us spread the costs across more capacity. We’ve been able to sort of evolve and improve relative to the competition, even as the cost of storage has come down a good bit.

Wes Ashworth (16:24)

Absolutely. I love those moments in a founder’s journey and kind of going through that. I appreciate you sharing. Kind of going through, once you have the insight, the next challenge is much harder is earning trust and in storage, especially with second life batteries, that means getting through those questions around reliability, safety, whether the economics really hold up in the real world. When you first started talking about using second life EV batteries and stationary storage, what was maybe the most common reason people assumed it just wouldn’t work or what was that main pushback initially?

Freeman Hall (16:54)

Great question. I think one first question everybody has is, well, how long will these batteries work in your use case? How are you confident that they will continue to work? I guess the first question is, are they even going to work? We needed, as we said, to develop that technology, deploy it ourselves at our own battery energy storage or BESS system sites. That was sort of challenge one was to deploy ourselves.

Now, because we had been developers and had built, developed projects, built projects, obviously permitted them and financed them, we had a leg up on a lot of folks. We already knew how to take this novel product that still needed to be proven to market and earn attractive revenues by going straight into the grid.

That was a big advantage for us and we sort of knew that from our core thesis going in. We were able to develop that technology and as with any new technology there’s going to be a few hiccups and wrinkles to straighten out. We had spent a couple of years deploying batteries into cabinets, initially with Nissan, moving to other types of batteries that have included Honda batteries and GM batteries and Tesla batteries and Ford batteries.

We’ve now worked across the market with, I’d say, more than 80 % of today’s EV batteries we’ve deployed ourselves. Then we get the questions, “OK, you’ve got it working. How long is it going to work? How do know it’s going to be reliable? Sort of prove that to me.” The nice thing is that we’ve been tracking that not only have we built this, we’ve got our own data set.

We have a unique data set that shows the reliability and performance. Five plus years down the road, managing over 3,000 batteries have never had any type of fundamental incident or occurrence. I’ve gone through a lot of the very challenging permitting and certifications because of course people are concerned about safety as job one and permitting and certification comes out of those concerns.

That’s been something that we’ve been able to demonstrate to the market, how you go through that process of getting the permitting and certifications in place, which for storage in general can be challenging. Then for repurposing specifically has some added challenges. We’ve been able to then show over time that these batteries do run reliably and that the degradation we’ve been experiencing is quite minimal. You start to see third parties coming in and saying, okay, well, we see your data and we see that degradation curve that you’ve started to chart out, it makes sense to us.

Those are the steps that help develop that further confidence. Then beyond that, of course, is that next dimension of risk management, the first dimension being sort of safety concerns around permitting and certification. The next is, okay, I’m an investor and B2U is coming to ask me for an investment in this company. How do I know that putting money into this makes sense?

Once again, we have this great track record of deploying BESS projects, initially hybrid systems that were both storage paired with Solar that we plugged into the grid, essentially interconnected to the grid. We could show them as well, a profitable performance of our initial projects over those initial years. Both at that first level around safety and mitigating those risks, and then secondarily around the investment perspective of demonstrating reliability and performance, as well as the ability to get financing, attract some modest level of debt, take advantage of the tax credits that can be available. All of those steps we’ve been able to do ourselves and again, show, not just tell. That’s put us to where we are today.

Wes Ashworth (20:28)

I’ll ask this question because I’m sure probably listeners are curious. It may be a “it depends” answer, but thinking about that sort of repurposed battery that you typically see today and use, what is that? Like typically the life that it has left. Like what do you what do you see kind of in comparison? If we’re comparing it to something normal a new battery, what have you, I’m curious just the comparison and what those what those numbers actually.

Freeman Hall (20:51)

Well, we get batteries across the spectrum of their state of health, which is essentially what percentage of their nameplate capacity that they still retain. We’ve deployed batteries that were degraded a good bit, that had average states of health below 70 % and really even in the mid 60s to start. We found that some of those batteries were operating for quite a few cycles, really a couple of thousand cycles plus and beyond what we had hypothesized when we were first deploying those. We’ve also deployed batteries that were above 80 % state of health and even above 90 % state of health. What we’re finding is that the degradation on a percentage basis is been in a 2% or less range. All you got to do is sort of do the math on that.

We’re seeing that these batteries will operate again at this less demanding use case for, I think it’s going to depend a bit by chemistry and battery type, but they’ll go to 60 and sub 60% state of health. We’ve got data sets to prove that. We’re of course developing further data sets with ever more battery types as we go. That’s just kind of a feel for what we’re seeing.

Wes Ashworth (22:07)

That’s great. I appreciate going through that. Definitely. I’m sure a lot of curious minds were wondering. That’s cool to see that. You did mention this and I want to just dig into it a little bit more. I think there’s a big difference between saying a battery still has value and really just proving that value can be extracted economically and thinking about investors, but also customers partners. What are the things that they needed to see before they began to view this as bankable rather than experimental?

Freeman Hall (22:31)

Well, that journey, it continues for B2U. We’ve been developing out and deploying further projects. We’ve got investors that have been with us and have had some good experiences and continue to want to invest further, which is great. But the marketplace is still understandably looking skeptically at things that are new. We’ve been pioneering what amounts to a novel asset class.

We continue to be effective pioneers there, again, with a growing track record of strong performance. And we’re finding that our cost of capital is falling, but there’s room for that to continue to fall as we become more proven with further bankability. We have been able to attract a bit of project debt and have taken advantage of tax credits, as I mentioned, which is important in financing renewables and battery storage.

But I would just say that that will be a journey that we can stay on for quite some time. But given the experience we’ve had to date, the supply of batteries that are looking for repurposing because everybody wants to get the maximum value out of a battery before it is recycled, which is essentially destroying the battery as it is. Because of those dynamics, we feel like we’re in a great place to continue to demonstrate further bankability, bring in more investors, and keep on growing.

Wes Ashworth (23:43)

Absolutely, definitely see that being the case and getting just better and better as you go. Part of this you shared too, having the advantage of being able to prove this in your own projects rather than waiting for someone else to take the first leap. How important was that sort of controlling, getting the model where it needed to go and talk us through that.

Freeman Hall (24:00)

You know, really important. When you’re doing something novel that is pioneering, it’s also bleeding edge. Bleeding edge is a term for a good reason because new things are uncertain things and uncertain things imply risk. The nature of business is to avoid risk where you can, but still earn a profit. You do have to have a bit of an entrepreneurial mindset that the view is worth the climb because the climb is challenging to do this for the first time.

That’s our perspective here, but because of the volumes of batteries and really a high percentage of these batteries that are good candidates for repurposing, we knew this was going to be a market that is worth the risk that we’ve been taking. The thesis we’ve had, as I mentioned from the get-go, is that the mitigated risk profile here is a lot less than the perception of risk.

We’ve been able to demonstrate that ourselves with our own projects. We’ve got a big market and a great deal of demand that’s out there right now, which helps folks see that they can join with us, work with us, maybe invest with us, and make a nice return themselves and further our mission, essentially to be the leading integrated repurposing provider for the automotive industry, whether that’s an auto OEM that finds itself with batteries or the dismantling industry at end of life that’s already processing many millions of traditional internal combustion cars and now are shifting to EVs, we think we’re in a great position to sort of help solve those problems of getting that residual value extracted and obviously doing so in a way that’s safe and can scale and perform as well.

Wes Ashworth (25:32)

I think being able to just prove it in your own projects initially feels like just a major strategic advantage. Owning the proving ground can compress learning cycles in a way that’s very hard to replicate otherwise and cool to see that. Now that you have sort of these years of operating experience behind the model, what has the real world data taught you that maybe theory alone never could have?

Freeman Hall (25:51)

Great question. I think that some of the macro factors happening out there in the world, obviously climate is one of the big drivers and macro theses that many investors are investing around. I think one of the core aspects of the playbook for dealing with climate is we need a clean grid and we need to continue to have clean resources on the grid and then we need to electrify ever more sectors of the economy.

That has been happening obviously with transportation and a transition to electric vehicles, which has been great. We’re seeing other aspects of the economy electrify. There’s a tremendous demand for electricity and that’s also being driven by the AI revolution and data centers needed to expand greatly the use of online tools and AI.

We’ve got this great tailwind behind us that’s out there. That’s what we’re sort of pushing forward around is the market needs more electricity, needs clean electricity, intermittent renewables, which are the cheapest form paired up with storage is sort of a killer app that can be quite cost effective and really is consistent with that game plan to clean up and expand the grid.

I would say that the perception of risk, you’ve traditionally financed renewable projects around having a locked in power purchase agreement, revenue certainty. We’ve been able to go out and with our own projects operate in some cases as a merchant resource and because of the volatility it’s been in the market being able to earn very healthy returns out there. I think our view going forward is that there’s a big driver to expand the grid and clean energy. That’s a good thing for us. I think there’s some increased willingness to have some exposure, but you want to cap that exposure with a degree of revenue certainty around deploying projects.

That’s one of the things we’re doing now is finding ways to lock in a degree of certainty on the revenues and perhaps have some upside with a level of exposure, but with enough certainty that we can bring in financing, whether it’s debt, whether it’s tax equity, or just sponsor equity at ever lower cost of capital, which then sort of find the sweet spot between still plenty of exposure to the upside, but reducing our cost of capital to grow faster.

Wes Ashworth (28:11)

Absolutely. I think as we’ve kind of looked at sort of the beginning and kind of the, the middle and it’s starting to prove itself, I think once the model starts proving itself, the conversation just shifts from technical validity to scale and an energy scale is never just a technology question, all often becomes a capital structure question, ultimately a question of whether the market is ready to treat something new like infrastructure.

If for someone hearing about B2U’s new fund structure for the first time, what problem does that vehicle solve? Maybe the traditional venture capital or project finance does not solve as well. Can you just talk us through that a little bit?

Freeman Hall (28:45)

That’s a really important question for us right now. We, as you can imagine from my descriptions here, we’ve had to build projects, operate projects, own projects in these first chapters of the business to demonstrate that reliability and performance. At the same time, there’s a growing demand for deploying repurposing. We did launch a fund at the end of 2025 to take initial operating projects off our balance sheet and put it into a operating portfolio that we manage.

We’ve brought some investors in to sit beside us to have a majority stake in that operating portfolio where we’ve retained ownership, but it allows us to free up some capital that was tied into the fixed assets on our balance sheet. That capital has come back to us and it allows us to build more projects and then provide those projects back to this first fund or subsequent funds. It forms what amounts like a flywheel effect.

We can take the cash to build projects, build those projects, bring them online, place them into a fund. The cost to build is substantially less than the value and the cash flow they can generate. We can take that enhanced value back into the company, build more projects, and therefore sort of keep scaling this in what is a CapEx heavy industry, but continue to operate for us in more of a asset light way because of the funds we are now launching and scaling.

Wes Ashworth (30:12)

It’s a key distinction. Often what unlocks the next phase of growth is not a new technology breakthrough always, but the right capital structure around a proven model. You can obviously see that. You shared, I think, several things there. Maybe you’ve covered it all. But any other changes for B2U? When you move from the proven projects on your own balance sheet to creating an investment vehicle around a portfolio of operating assets, like anything else that that changes for you?

Freeman Hall (30:34)

That’s the phase we believe is what the market’s looking for is scaling deployments of repurposing solutions. We, with this new model and our ability to bring projects online, bring them into separate operating portfolios, and then to recycle that cash with the flywheel effect as I described, that’s really supporting our ability to grow and to scale.

We’re still able to essentially be a trusted partner for the automotive industry, whether it’s OEMs or dismantlers, and the policymakers and regulators on this space. They know that when you work with B2U, we can realize that residual value. Do so in a way that’s safe and compliant, and that we also keep control over deploying those assets. Then frankly, when the true end of life and there is no more utility to those batteries, it’s easy for us to swap out a battery from a cabinet or a cabinet out of a system and ensure that that battery is recycled properly at end of life. That’s an important part of sort of what I’ll call life cycle management in the battery ecosystem.

That’s what the regulatory schemes that are out there. Europe has implemented what’s called the Extended Producer Responsibility or EPR framework. That essentially means that folks who made the battery need to account for what happens to the battery end of life. They’ve got some rules which are referred to as the battery passport to ensure that you can track the battery to end of life and that it is being handled properly. Some version of that responsibility is finding its way here in the US. A company like B2U is that trusted partner that can realize that value, but also ensure that the batteries are handled properly at true end of life.

Wes Ashworth (32:09)

Makes so much sense, honestly. Just thinking about just switching a little bit to just your model where it sits at this intersection between automotive, energy, manufacturing, software, infrastructure, finance. Which of those worlds has been the hardest to align and why?

Freeman Hall (32:31)

Well, that’s a great question. Lining everything up is what’s going on here. There are a number of dimensions that we’re operating around. I would say there’s a number of important dimensions of risk. There’s a number of boxes to check. I tell everybody that, as I mentioned twice on this call at least, the perception of risk we understand is high. The mitigated risk profile is very manageable.

But we’ve got to be able to sort of show, not just tell. That’s led to our whole strategy around the business and our ability as developers ourselves to develop a good, strong technology platform that was novel and innovative, deployed ourselves, come up with a data set that proves that to the outside world. Then with that proof in place sort of scale with innovative models that can allow us to serve the market in ever larger ways.

It’s been the integration of those various dimensions on the technology side, in the business model side, on fundamental risk management, on going forward and doing some novel things and permitting some things that hadn’t been done before and helping third parties understandably starting skeptical to work with us to get comfortable, see how we’re doing things. Then with that comfort and confidence growing to expand.

Now as we’re expanding, to bring in more partners, more capital partners, that whole process continues and I think will for some time, but it’s aligning those various dimensions that has been fundamental to what we’re about and what we’ll continue to do more of.

Wes Ashworth (33:58)

That cross-sector complexity is easy to underestimate from the outside. Often where some of the most consequential execution challenges really live and it’s been able to execute on that. It’s amazing. Something else you shared with me, too. You said there’s now more battery supply available that can currently be deployed. What’s the real bottleneck now? Is it project development, customer confidence, certification, financing, market structure or something else entirely?

Freeman Hall (34:20)

It’s all these dimensions of risk that we’ve been talking about, Wes, that have held back the space and understandably so, because there are a lot of boxes that have to get checked to get folks comfortable. We’ve been working on all these dimensions of risk and of concern. You can imagine that’s going to be a challenge for any other entity that’s looking to be in the same business that we’re in.

We have seen, frankly, in this space we’ve been pioneering repurposing now for six years and starting in 2019. Just recently you’ve seen a large recycler that has raised a good bit of money to recycle batteries in 2025 said, “hey, you know, this repurposing business is pretty interesting and may well scale faster and be more profitable than the recycling business.” We’ve really welcomed seeing that type of progress because it’s been accelerating the erosion of the conventional wisdom, where the conventional wisdom was always before that a battery would be on wheels in automotive and then go straight to shred, and that battery would be destroyed and then recycled to the next generation.

We have set out to prove otherwise that that residual value could be extracted safely, reliably, profitably, and we’ve been able to demonstrate that. But now that we’re ready to scale and frankly the industry would like to see this scale having some other capital come in and demonstrate that this is a smart way to go has been helpful.

I think we’re positioned very well because of all the work we’ve done and the unique data set we have over five years that is not really replicated out there. But we’re going to need a lot more folks to come in, invest in the space and help deploy repurposing solutions so that the maximum value of every battery can be realized before it is recycled and the next generation is created from that.

Wes Ashworth (36:12)

I love those thoughts and kind of that broader vision for the industry and kind of welcoming others to come in and participate as well and ensure you’ve been a pioneer and will continue to be that I think as you go. I want to zoom out a little bit for the final part of the conversation. This is where second life storage starts to connect to the broader forces shaping energy right now is policy and domestic manufacturing, supply chain resilience and the longer-term question of how we manage battery value just across the full life cycle.

There is more supportive policy environment emerging for domestic storage and battery deployment in practical terms, like what changes for a company like B2U when those incentives and domestic content advantages line up in your favor?

Freeman Hall (36:50)

Wes, another great question. That has been the case here as you’re inferring from the Big, Beautiful Bill that just passed last year. That has obviously been challenging for aspects of the industry, certainly solar and wind incentives knocked down. There were also consumer incentives to purchase EVs that were eliminated coming out of that legislation.

But battery energy storage, stationary storage did retain its incentives for quite some time to come, which of course we welcomed. As you’re also saying, the concern around foreign entity of concern, FEOC or prohibited foreign entity, PFE concerns, are a substantial aspect of the new legislation. That’s another thing that is a positive for us.

We are taking used batteries that have been driven by folks here in the US, and we are deploying them into stationary storage and can qualify for the investment tax credits that include, frankly, some additional bonuses where there’s domestic content. We want to see and encourage made in the US types of products. That’s what the domestic content incentives are for.

We’ve been able to qualify for that. Meanwhile, we aren’t using battery equipment, other aspects of our storage systems that are sourced from FEOC or PFE entities. It’s been really a positive story for what we’re doing. You’re going to see a lot of the leading equipment that has been in the battery industry really have challenges with the FEOC and PFE restrictions that will really restrict the use of incentives going forward. Meanwhile, we’re in a position because of our status redeploying these batteries, avoiding FEOC and PFE issues, qualifying for domestic content, added incentives, that in addition to our cost advantages we start with only actually helps us in the environment we’re facing right now.

Wes Ashworth (38:46)

Absolutely. We’ll take any positive tailwinds we can get and you know, being a part of like, actually benefiting and helping, that’s great. I always tell people too, like, there are always these parts of the market, some are affected differently than others and kind of knowing where that’s at, but looks bright, obviously, on the horizon for you. The EV market has been more uneven than many expected. In some ways, that has actually increased the availability of batteries for second life use. We’ve covered a tiny bit of that there. What does that say about the resilience of this model, even when maybe adjacent markets are volatile as we just described?

Freeman Hall (39:18)

Well, yes, the EV space is going through some tumultuous times and we have seen a huge ramp up, of course, in EV sales, both here in the US and North America, and then the wider market, which the US or North America represents about 10 % of the global market in EVs. Again, the elimination of some of these consumer incentives in the legislation last year you are going to see a dampening of adoption of EVs, of course.

But we already have a better part of 6 million EVs on the road in North America. That’s a lot of volume. We still are selling well over a million. We did cross the 2 million per year EV threshold at some point here. We’ll probably stay flat, perhaps see some small declines. But overall, we’re still seeing real growth. The wider market, which is 10X the North American market, already sees well over 60 million EVs on the road globally. The demand for repurposing, to put it mildly, is massive.

Even with some of the hiccups in adoption, it really isn’t diminishing the need to have really scalable solutions to see repurposing and ways to get that highest and best use from the battery before it is recycled and the cycle starts again. We’re not loving what we’re seeing in terms of some of the policy choices that are out there, but it doesn’t have that big an effect on the market that we’re chasing.

Wes Ashworth (40:38)

Absolutely. As we get closer to time, couple just wrap up questions here. If we sat down again, like 10 years from now, what would need to be true for you to say like the industry finally got battery lifecycle management right and B2U has been successful and done what you wanted it to do. Like what does what does that look like 10 years from now?

Freeman Hall (40:54)

That’s a great question. I think that we will see that markets working as they tend to pursue the highest return on assets. We, I think, are proving that repurposing has a important space and an important role to play in realizing that highest return on these assets for which very substantial investments are being made.

I’m very confident that we’ll see repurposing play that role in scale with B2Us really well positioned to be one of the leaders in deploying and realizing that value add that repurposing represents. There’s really a lot of incentives too. If you think about strategic issues, the industrial policy is ever more important when we think about geopolitical issues. The US has an incentive where we’re bringing large factories to make electric vehicles and their batteries to the US, on-shoring, if you will. We want to make sure we’re keeping those materials here domestically. Again, repurposing can help ensure that the highest and best use for those batteries, once the batteries are no longer suitable for automotive, is happening here. Then ultimately at true end of life, those batteries are recycled and those materials are kept here to be made into the next generation of batteries.

What we’re doing does have some very strong, I’d say, pull around these important geopolitical and critical mineral, critical material issues. I think we’re going to see that in 10 years be another big win for what we’re up to. I think that our focus has always been on delivering results and not telling but showing. That’s part of our culture and part of what we’re about as a company.

I think in 10 years from now, with the track record we’re already developing, that will be something that will have a wider awareness of what we’re up to. But that said, we’re not a consumer facing entity. We’re going to be working with probably large players and operating a little bit behind the scenes. I don’t know that we’ll have a hugely high profile, but I think that B2U will have made a big difference given the substantial role and the value add that we can play.

Wes Ashworth (42:48)

Absolutely. I think a great place to end, I think opens the door to a bigger vision of what successful should look like for B2U, but also for the entire ecosystem. With that, Freeman, this was just a fantastic conversation. I really appreciate how clearly you unpacked not just the promise of the second life battery storage, but the discipline data persistence required to make it real at commercial scale. There’s a tendency and clean energy to talk a lot about innovation and abstract terms, but what stands out in your storage is how much of this has been about doing the hard work improving a model, building confidence around it, and then creating the financial structure to help it grow.

Thank you again for joining us and sharing the journey. To everyone listening, thanks for tuning in to Green Giants. If you enjoyed this episode, subscribe to the show, leave a rating and review, and then share this with your network. It really helps us keep these conversations going. for listening, and we will see you next time.