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Insane Mode: In a new book Hamish McKenzie argues the rise of the electric car is inevitable. (Photo: Supplied).
Insane Mode: In a new book Hamish McKenzie argues the rise of the electric car is inevitable. (Photo: Supplied).

BusinessDecember 6, 2018

A Kiwi ex-Tesla employee takes on the backlash against electric vehicles

Insane Mode: In a new book Hamish McKenzie argues the rise of the electric car is inevitable. (Photo: Supplied).
Insane Mode: In a new book Hamish McKenzie argues the rise of the electric car is inevitable. (Photo: Supplied).

Back in 2014, Hamish McKenzie was asked to write a book about Tesla, but instead Elon Musk gave him a job at the company. Four years on he’s released Insane Mode, a book that looks at Tesla and the dozens of young automaker start-ups it’s inspired. He explains to Gareth Shute why he believes the widespread adoption of electric vehicles is inevitable.

Ever since Tesla produced its first car in 2009, there’s been a steady stream of questioning articles about the viability of electric cars, though it’s done little to stall the rapid growth in sales of these vehicles. Hamish McKenzie argues in his book, Insane Mode, that in fact the rise of electric vehicles is a force that can’t be stopped and he sees the criticisms turning from thoughtful to ridiculous.

“It started off being ‘oh electric cars are too expensive, they’ll never work’. Then it was ‘oh there’s not enough charging infrastructure, they’ll never work’. Then ‘the range sucks, they can only go so far, they’ll never work’. Next, it was safety in electric cars. ‘They catch on fire, they’ll never work’. Or ‘no company can make these profitably, they’ll never work’. Or ‘Tesla is just a flash-in-the-pan and run by this renegade CEO who smoked pot once, they’ll fail and then everyone will see that electric cars will never work’. And now it’s like ‘what about the lithium needed for the batteries, is there enough?’ even though lithium is more common than lead. Or ‘cobalt mostly comes from the Democratic Republic of Congo where there’s constant war’. The excuses for why electric cars will never work just keep getting more desperate and absurd.”

McKenzie’s gung-ho support of electric vehicles is what you’d expect from an ex-Tesla employee. (He worked there for just over a year before leaving to write his book). As such, he’s had to be careful about how he speaks about his former employer, leading to a slight delay in the release date of his book (or as he puts it, “because of my past employment, the publication process was not as straightforward legally as it could have been”).

While he remains a big fan of Tesla, he admits there have been downsides to having Elon Musk become the public face of the electric vehicle industry.

“It’s a blessing and a curse. On the one hand, Tesla has made electric cars sexy and kept them in the headlines because Elon Musk has a wild personality. On the other, it does amplify those negative stories if something goes wrong. If a Tesla burns to the ground, then publications are incentivised to push that story and are very happy to associate negative Tesla stories with electric cars in general.”

McKenzie is also wary of how Tesla has tied electric cars to the development of autonomous driving.

“Self-driving and electric cars are often tied together because both technologies arrived at a time when the auto industry is going through this radical reinvention. There are also some engineering considerations – it’s much easier to do autonomous in a drive-by-wire vehicle where you can use electric signals to control the vehicle.

“Though I do fear that the autonomy side of things has been overhyped. The infrastructure that people are trying to force self-driving cars to use is not what you’d create if you wanted these things to work perfectly. There are too many edge cases created by the fact that our roads were set up for cars driven by humans. You’d really want to start building infrastructure from scratch if you want a fully autonomous world. It’s not a possibility in America, where they struggle to even build enough bridges at the moment. Though the situation could be different in China, where they can build a whole city on the turn of a dime.”

Hamish MacKenzie, author of Insane Mode. (Photo: Supplied).

More broadly, McKenzie sees China’s auto industry as better placed for the world ahead, given the country’s aggressive policies in favour of electric vehicles which are part of a huge overall investment in green technology. The most eye-opening section of McKenzie’s book describes the plethora of young Chinese startups who are upending the idea of what an automobile might be. For example, Che He Jia produces a two-seater car for NZ$11,000, which drives at 65km/h and has only 81km of range — essentially creating a midpoint between a car and an electric bicycle that has a removable battery so owners can charge inside their apartment or workplace.

When industry research firm JATO recently investigated which companies worldwide produced the most EVs, half of the list were Chinese companies whose names would be unknown to most readers (Beijing, BYD, Zotye, Hawtai, and Chery). McKenzie argues that with the current US government actively working against taking any action on climate change, China has put itself at a distinct advantage in this space.

“Already you can get $10,000 off a car in China if you buy an electric one. Also, if you buy a normal car in China you have a 0.1% chance of getting a license on your first attempt if you live in a city like Beijing, but you can skip that lottery system if you buy an electric.

“They’ve got mandates coming down the pipeline that will work like California’s emission regulations — by 2020 the average fleet fuel economy [across all cars produced by each automaker] has to be 42 miles per gallon, which is about as good as you can get with a brand new Honda Civic, so the gas guzzlers have to be offset by lots and lots of zero-emission vehicles. By 2025, that number is going to have to be 54.5 miles per gallon.”

A Tesla Model S and a Nissan Leaf beside the Tesla store on Karangahape Road. (Photo: Gareth Shute).

McKenzie believes that traditional big automakers will be too slow to take up the challenge ahead, even an established conglomerate like the Renault-Nissan-Mitsubishi alliance which got seriously involved in electric cars around 2009-10 (releasing the Nissan Leaf, Renault Zoe, and Mitsubishi MiEV). Their output of electric cars has been impressive in the years since, but in the first three quarters of this year, their EV sales were surpassed by Tesla, despite it only being nine years since the Musk’s company sold its first car.

McKenzie, therefore, believes that Tesla’s future competition will come from more unexpected quarters.

“I think the start-ups in China will be the really important ones to watch: Byton, Nio, and Lucid Motors [though the latter is a hybrid China-California operation]. Among the established players, I think Volkswagen has the best chance because they’re reinventing themselves as an electric car company and spending the money to make an aggressive shift [in response to their 2015 emissions scandal].

“The other players in the established auto industry have convinced themselves that a few press releases about having some electric cars ready to go by 2025 is enough and it simply won’t be… If they admit electric cars are better and that they’re the future, then they need to unwind their massive existing infrastructure and that’s a painful thing to confront.”

McKenzie believes one of the biggest unstoppable forces towards change is the declining cost of lithium batteries. The price has dropped by 80% over the last six years and he believes the increased demand from automakers (and energy storage providers) will spark the innovation to decrease this cost further. He argues that even the most conservative analysts predict electric vehicles will fall to the same price range as gas-driven ones around the mid-2020s, and the fact that they are so much cheaper to run will soon shift consumer demand in their favour.

If this change is so inevitable, why does there remain such scepticism about the rise of electric cars? McKenzie believes the answer is clear if you look at who has the most to lose in the transition.

“There are a bunch of rich people at the top of the world economic pecking order who’ve been in that position for 150 years and are now spending billions of dollars to stay there because they don’t want their profits and their power to go away.

“Yet the transition is inevitable because electric cars will soon be cheaper and there are all these climate imperatives towards switching to sustainable energy. So all they can do is keep sowing confusion while buying political influence to make that transition take place a bit slower. The fossil fuel industry and the Koch brothers are doing what is in their corporate interests – they are serving their shareholders. It just so happens that the byproducts of their business are destroying everyone’s habitat and will make it impossible for our children to grow up on a healthy planet.”

The thank you note sent out to customers on the Tesla waiting list. (Photo: Gareth Shute).

Ironically, McKenzie doesn’t own an electric car himself — he’s on the waiting list for the cheapest version of the Tesla Model 3 (at US$35,000) that’s still at least six months from being released. In the meantime, his attitude towards electric-vehicle naysayers is more one of bemusement than annoyance.

“I don’t know why people have this deep-seated inherent opposition to vehicular transport that is powered by an electric motor. It’s like they were raised by a family of internal combustion engines or something. It’s not like there were hordes of angry people when rotary phones went out of use. I guess back before Twitter and blogs, they didn’t have an outlet to stake out their mass protest against the advent of the touch-tone phone.”

Keep going!
WāHiki Creamery co-founders Haman Shahpari and Sergio Figueroa (Photo: Supplied)
WāHiki Creamery co-founders Haman Shahpari and Sergio Figueroa (Photo: Supplied)

BusinessDecember 2, 2018

How a local vegan ice cream brand is sweetening the deal for Chinese kids

WāHiki Creamery co-founders Haman Shahpari and Sergio Figueroa (Photo: Supplied)
WāHiki Creamery co-founders Haman Shahpari and Sergio Figueroa (Photo: Supplied)

Every week on The Primer we ask a local business or product to introduce themselves in eight simple takes. This week we talk to Haman Shahpari, co-founder of vegan, low calorie, halal certified ice cream brand WāHiki Creamery, which has recently signed a deal to enter the Chinese market. 

ONE: How did WāHiki start and what was the inspiration behind it?

Ronnie Tan, Sergio Figueroa and I wanted to create a healthier alternative to dairy ice cream which everyone loves but can make you feel guilty. Also, not everyone can have lactose or gluten, and with the rise of the health-conscious consumer, many people are worried about high sugar and calorie elements.

We thought high fat, high sugar dairy ice cream had its day and it was high time to innovate, not mimic, ice cream that was better for you. We were inspired by the health benefits and taste of coconuts, and we saw a visible gap in the market for something that offered more than just a singular benefit.

Our name WāHiki means ‘time out’ in te reo Māori and pays homage to the proud indigenous culture of this land. We started with a single vanilla flavour in December 2016, and nearly 24 months in, we’ve got flavours that are first in New Zealand and the world. Our sales have increased exponentially since we first launched.

TWO: Did you have any interest/experience in business prior to starting WāHiki?

Ronnie comes from a 25-year entrepreneurial background within the financial sector, Sergio brings two decades of fitness sector experience, and I come from a decade-long career in senior management roles and sales within the packaging industry. Our combined skills and experience from the various sectors meant everybody brought something to the table.

WāHiki Creamery ice cream (Photo: Supplied)

THREE: Where is WāHiki’s ice cream made and where do you source your ingredients from? 

WāHiki products are manufactured locally. However, as New Zealand doesn’t have coconut, mango or banana plantations, our sources for these flavours are international suppliers. We’ve taken painstaking measures to ensure our suppliers are sustainable and ethical sources and our ingredients are from the highest quality products on the market. It’s critical for us as a premium ice cream brand not to sacrifice quality for cost.

FOUR: A lot of new vegan ice cream brands (particularly coconut cream-based ones) have popped up over the last few years, with big companies like Sanitarium even trying their hand at dairy alternative products. What is it about WāHiki that sets it apart from the rest of the pack?

We’re premium, healthier and we just won the People’s Choice Award at the Auckland Business Awards for the central region where we took out first place by 1,200 votes. It’s also worth noting that on our first ever entries into the awards, we came away as finalists in the Best Emerging Business category, and the Excellence in Marketing category.

On product alone, we make an ice cream that’s better for you with less sugar and calories. Coconut milk’s been touted as having health benefits over dairy milk, but if it’s high in sugar and calories, you’re counteracting those benefits with all the stuff that’s bad for you. We’re making ice cream with fewer calories than a large serving of a single fruit, as four out of our five flavours actually have fewer calories than a large Honeycrisp apple (130 calories).

Sugar aside, we also have no artificial flavours and preservatives in our ice cream and have removed all emulsifiers and foaming agents from our range barring Matcha, which will join the rest by early 2019. WāHiki is also New Zealand’s first and currently only coeliac certified ice cream which means there’s a nil chance of cross contamination (a major issue in the food industry with serious repercussions). We’re also certified halal which means people with this dietary requirement can enjoy our ice cream without worrying about how and where it has been produced.

Lastly, we pump less air in the churn process which makes ice cream fluffy, producing a dense and thick product that melts later than your average tub. This means each WāHiki tub is heavier and has more ice cream than other brands.

L-R: Figueroa, Audacity PR’s Golnaz Bassam-Tabar, and Shahpari at the 2018 Westpac Auckland Business Awards (Photo: Topic Images | Hannah Rolfe)

FIVE: It was recently announced that WāHiki had signed a deal to supply ice cream to Asia’s biggest childcare centre, Cathay Future, which has about 20,000 children enrolled in Tianjin, a major port city in northeastern China. How did this deal come about and what does it mean for a small company like WāHiki? 

We’ve spent significant time and resources on carving out a mutually beneficial relationship with our Chinese partners. We established contacts in recent travels and have carefully nurtured them over time. The Chinese have proven to be incredibly progressive and have shown us more than a warm reception. The China deal is a significant milestone for us as it’s opened doors to countless opportunities in that part of the world who. from what we see, have a huge appetite for healthy food alternatives.

SIX: Crucially, what’s the response been like from kids? I would assume most of them have never tried dairy-free ice cream before.

Kids love our ice cream. You might not believe it, but from the feedback we get, our turmeric latte is a popular hit despite it being perceived as an acquired taste.

It’s really important for ice cream to be dense, creamy and full of rich texture for it to taste and feel like ice cream, otherwise, it’ll quickly be biffed as too icey and too frozen, especially by kids. Kids want ice cream to taste like ice cream, so even if you’re a little bit off, they’ll let you know about it straight away. So far, we’ve only had positive feedback with parents sending us pictures of their kids loving our products.

WāHiki Creamery Mango Flavour (Photo: Facebook/WāHiki)

SEVEN: Do you have any other plans to scale/grow further and if so, what are they? 

Our ambitions are to expand our business globally. We’re collaborating with various business partners and expect to see our products enter new markets over the next two years.

EIGHT: Lastly, tell us about a New Zealand start-up or business that you really admire right now.

We love the TradeMe story. It resonates with us because it was made by the archetypal do-it-yourself Kiwi who was fed up with the lack of options the market offered him. So true to Kiwi tradition, he went and built it himself, put in the work and persistence required and turned something small and novel into a household name. In the beginning, no one might have believed in Sam Morgan’s dream, but he persisted and persevered, and now no one can deny the success of his vision. This is how we see ourselves and we have the drive and ambition to see our vision through.