Duncan McIntyre is the CEO and a member of the Board of Directors at Highland Electric Fleets, as well as a serial climate tech entrepreneur. Highland’s mission is to make electric vehicles affordable and accessible for all communities and has become a leader in electrifying student transportation. Prior to founding Highland in 2018, Duncan founded and served as President of Altenex, the first renewable energy marketplace serving Fortune 500 companies, where he built over 2 GW of utility scale renewable energy for corporations.

John Shegerian: Do you have a suggestion for a Rockstar Impact Podcast guest? Go to impactpodcast.com and just click Be a Guest to recommend someone today. This edition of the Impact Podcast is brought to you by ERI. ERI has a mission to protect people, the planet, and your privacy and is the largest fully integrated IT and electronics asset disposition provider and cybersecurity-focused hardware destruction company in the United States and maybe even the world. For more information on how ERI can help your business properly dispose of outdated electronic hardware devices, please visit eridirect.com. This episode of the Impact Podcast is brought to you by Closed Loop Partners. Closed Loop Partners is a leading circular economy investor in the United States with an extensive network of Fortune 500 corporate investors, family offices, institutional investors, industry experts, and Impact Partners. Closed Loop’s platform spans the arc of capital from venture capital to private equity, bridging gaps and fostering synergies to scale the circular economy. To find Closed Loop Partners, please go to www.closedlooppartners.com.

John: Welcome to another edition of the Impact Podcast. I’m John Shegerian and I’m very excited to have with us today Duncan McIntyre. He’s the CEO and founder of Highland Electric Fleets. Welcome Duncan to the Impact Podcast.

Duncan McIntyre: John, thanks. Thanks for having me. Appreciate the opportunity to be on.

John: It’s an honor to have you on. I love your work, I’m a big fan of your brand and we’re going to share your journey today and your brand’s journey with our audience. But before we get going on all the important things you’re doing at Highland Fleets with your colleagues, I’d love you to share a little bit about Duncan McIntyre. Where did you grow up and how do you even get on this very impactful, important journey that you’re on?

Duncan: I’m a New England boy, Red Sox fan, sort of grew up in Boston. I traveled around a bit for school and then ultimately for work in my early 20s and my 30s. I’ve always been interested in the world of energy transition and leaving our environment in sort of a better shape than when we found it. My early career was in renewable energy. I did a lot of work in solar and wind and became really interested in transforming transportation as an extension of that work and that coincided with getting married and having a family. I’ve got three little kids and I think the journey, the Highland Journey, started for me when I realized my son, who was a second grader, was at the same height as a diesel tailpipe on a school bus. And it felt like if we were going to solve any form of transportation, we should start there.

John: That’s really important to say stuff like that. I remember my son came out of our factory one day when we still had the old ways to power forklifts. He was 15 or 16 at the time, and he was covered in soot. I’m like, how’d this happen? He goes, dad, that’s what it’s like to work in the warehouse. And I’m like, oh, boy. We got to move things around here a little bit. We got to electrify this. And he was the one who actually said, can we get electric forklifts and get this place cleaned up? I’m like, we are now, we’re going to focus on it. And we did. So I totally get how our children could bring things to light that were obvious in front of us for years and years. But until our kids sort of show us the way, sometimes we miss the whole forest because we’re just looking at a couple trees, sometimes.

Duncan: Yeah. And, John, there are pockets of the country, Central Valley, California, one of them, where 4 out of 10 children have pediatric asthma in some places. And that’s not from power plants. Those power plants have been moved out to the country and largely cleaned up. It’s from tailpipe emissions. It’s forklifts and, 18 wheelers and city buses and garbage trucks. It’s all of the vehicles that scurry around the communities that we all live in.

John: It’s such a brilliant point you make, Duncan. I moved here in ’96 with my wife and my young children, and I grew up in New York City, so I’m used to the wind blowing everything off of the beautiful island and very clean air. And people think it’s the opposite. And actually, it’s a paradox. It’s actually wonderfully clean air on a typically regular basis, similar to how I felt when I lived in Boston on Bay State Road when I went to Boston University my first year. So I always felt the clean air of the East Coast. You come to the Valley, and it’s really the ag belt, as you just point out, the ag belt of America still number one on raisins and tomatoes and cotton and so many other great [inaudible] products. And it’s a beautiful community. But unfortunately, as you just pointed out, we got the 99 freeway going right through the valley and trucks and all those big rigs that you just mentioned 24 hours a day. And it’s all trapped because it’s a valley.

Duncan: That’s right.

John: And the air quality is really kind of horrible. It’s typically ranks as you know, I’m preaching to the choir here on either the first or second worst air quality in America on an annual basis for the last 20 years.

Duncan: Well, the state’s doing a tremendous amount to work on electrification and arguably more than any other state. And so I think it’s on the right path.

John: Well, it’s because of people like you and brands like yours is why we’re here today to cover this. Because truly the more successful you become and the more ubiquitous Highland Fleets become, the cleaner air we’re all going to breathe and we’re going to be able to leave for our children and our grandchildren and way beyond. Talk a little bit about transitioning from your career in renewable energy over to the founding and the aha moment that you mentioned with your son on Highland Fleets. But that aha moment happens with your son and then how do you go to creating the brand Highland Fleets?

Duncan: My first career, as I mentioned, in renewable energy was really exciting because big companies like GE were making wind turbines. They had sorted out the technology and it was pretty well proven that it worked. But it was clear that they needed help commercializing and scaling their equipment. And so I started a business called Altenx that ultimately helped facilitate the build-out of renewable energy. Edison International in Southern California bought my first business. And so I was reporting to a new boss and spending a week out of the month in Rosemead. LA had some of the early last mile delivery vehicles in EV format at that point in time. This was 2015, 2016, early 2017. And when you get in an electric van or truck for the first time and you recognize that it’s on, but you can’t hear anything, the acceleration is better, the braking’s better, the cost of your fuel is half the price. And then you get to the fact that there’s no tailpipe. It’s a really remarkable experience. We think of the best marketing as butts in seats, putting people’s butts in EV seats and having them test it out and try it out and just play with it. And so to me, it felt like inevitable that our politicians would demand that our cities get cleaned up from a transportation standpoint. But similar to renewable energy, the big manufacturing companies might make great products, but they need good partners to figure out how to really create a commercially viable rollout plan in a way that’s affordable and reliable for all the communities that want to adopt these fleets. And so I took a deep dive and I looked at lots of different classes of vehicle, and when I finally got to a school bus, I decided this was just such an obvious choice. They go 50 to 60 miles a day, they come back to the same depot. They clean up a large, predominantly diesel fleet that houses our children and the members of our population with the most vulnerable lungs, candidly. And so the technology felt like it was there. Companies like Daimler and Navistar were making the products and they were putting their warranty around it. And school systems were eager to adopt, cities were eager to adopt but they needed help, they couldn’t afford it, and they couldn’t take on all the technology risks. So Highland was born out of marrying up products that were available from the market, the needs of communities that wanted this, and really trying to find a path forward that met the financial and operational parameters that exist.

John: So what year did you actually form Highland Fleets?

Duncan: Yeah. 2018.

John: 2018. Because of your success already in renewable energy and a liquidity event, so therefore, you had a successful reputation going into the formation of your new venture. Did you have to raise a lot of money and was it a challenge to do so with the new vision?

Duncan: I had a reputation in renewable energy, but I had to build a reputation in transportation, and that didn’t happen overnight. So I had to work my way up. I was able to fund the business for about three years and establish our first couple customer accounts and really prove that the business and the business model worked. So that was great. I think the ultimate inflection point in 2021 was acquiring some really big contracts. We had to go out and raise a considerable amount of private capital to really fuel our growth. But at that point, the business had a proven track record. We were building a team and we had referenceable customers who were pleased with the service. And that allowed us to go from a couple states to today we’re in 30 states. We’re the largest owner of electric school buses in North America, and we’re growing quickly. So we did have to go raise a considerable amount of money.

John: In 2021.

Duncan: Yeah, that’s right, yes.

John: If you’ve just joined us, we’ve got Duncan McIntyre with us today. He’s the CEO and founder of Highland Electric Fleets. To find Duncan and his colleagues and all the great work they’re doing in electric school buses, please go to www.highlandfleets.com. So talk a little bit about… This is called the Impact Podcast, obviously, and there’s not going to be short of any impacts and positive impacts, let me therefore say that your product, your services have on the communities that they serve. Why don’t we start with the positive impacts that an electric bus has in a local community where you launch your Highland Fleet school buses?

Duncan: There are a number of impacts that are positive. The most obvious to people is the environmental impact. If you’ve ever smelled diesel fuel, diesel emissions, you know what it smells like and you know that it’s not naturally occurring. You’re not meant to inhale it. Electric buses have no tailpipe and so the local health benefits are considerable. It reduces VOCs and NOX, which are harmful to the body, and it’s just generally better. There are tons of statistics about absenteeism and the health effects on children and communities in general. So just simply the local health benefits are significant. I would highlight a few other areas of impact. One is working conditions. Cities have drivers, they’ve got mechanics, you’ve got operational staff. Employees are required to run any vehicle fleet, whether it’s a garbage truck or a city bus or a school bus. For the mechanics in particular, there are very few moving parts. There’s no oil change required because there’s no oil. There’s no fuel filter, there’s no diesel particulate filter on the exhaust system. So there are very few systems and the working conditions are generally quite a bit better. Many communities have a hard time really recruiting new diesel mechanics these days. It’s not a profession that as many people are going into, and we bring workforce development and training to repurpose many of those mechanics to do EV related work and they like it. The drivers love these vehicles. Some of them are skeptical to begin with because it’s new, but you get them behind the wheel for a couple of days and they almost always say, I’m not giving this bus back. I love it. It’s quiet, it’s comfortable, it creates a very smooth ride. So working conditions are another area of impact. I’d highlight two others quickly. The fuel and the maintenance costs are cheaper. So you put dollars back into the city’s pocket. They can put it into other programs, they can meet budget gaps in places. And lastly, an electric bus is grid tied. And we’ve done some incredible work with communities on using the buses as a resource that can back up the grid. So when the buses sit idle, school buses sit idle 92% of the hours in a year. It’s a lot of time sitting idle. We can push and pull the power in and out of those batteries. We can pull it in from the grid and charge the bus, and then we can push back. We call that vehicle to grid. We can recharge the grid or recharge a building so power goes out or the grid is strained for whatever reason. Lots of demand in the summer in particular, and we can repower the grid. So you create resilient communities by electrifying your fleet. So those are some of the big areas of impact.

John: Well, first of all, that sounds like you reached back into your expertise from Altenx to come up with that last benefit, the power grid benefit. I love that. And I would assume that also is a huge, besides resilience, a huge cost savings to those communities potentially as well.

Duncan: Absolutely. Vehicle to grid provides value, and that can help offset the cost of electric buses, which are more expensive. I missed one piece, which is in 2018, when I wrote the business plan, I thought that would be a much bigger business earlier on, and it’s been difficult to really facilitate and get that business activated. But we’re really pleased. Some great journalists have written about that activity, and we’re up and running at tons of sites now, so we’re getting there.

John: It’s always fun to hear who the first client was. What was the first community that said, “Let’s do this”, when you pitch them?

Duncan: The city of Beverly, Massachusetts, and we’ve set up our headquarters here. They were passionate about this activity. They’ve done a tremendous amount of work with solar, with new sort of resilient schools that are decarbonized, efficient schools. And Mayor Cahill, who’s been the mayor in the city for a number of years, was really passionate about getting this program off the ground and believed in us.

John: It’s always so interesting. I’m so glad you said that because Duncan, California always gets a lot of the attention for doing the right environmental things first. The truth is, Massachusetts and California actually duke it out on a regular basis. They really lead the nation in responsible environmental practices. And I don’t think Massachusetts ever gets the credit that it’s due. So I’m so glad you said right there in your hometown of Beverly was your first client. How many? Talk about the universe, if Beverly was your first client, how many school bus districts are there in America that make up your universe of possibility of clients if I was reading your business plan right now?

Duncan: Well, there are over 10,000 school districts in the U.S. I think the number 12,000 comes to mind. But it’s a lot.

John: It’s a lot.

Duncan: But there’s an 80/20 rule. A lot of the volume is with a smaller subset of those. We are on a mission to serve any community that wants to electrify. That’s urban communities and rural communities. It’s affluent communities and historically underserved communities. And so we have projects in more urban, wealthier areas. And we’ve got projects in places like Red Lake Nation, which is in northern Minnesota. And we’ve got two buses that are commissioning and going live right now. And the folks around the office here are incredibly proud of the work we’re doing there. So the bottom line is we think of everyone as a potential. If you’ve got one school bus, and that’s the total fleet, you have to really partner with the district in the right way. It’s hard to sort of staff a full-time person in that community versus if you’re in Charlotte Mecklenburg like we are there’s a staffing plan there for how you keep that fleet up and running and running smoothly. That is different. So the service offering varies a little bit. But we’re trying to serve all these communities.

John: Beyond school buses, what other… I mean, we’ve seen the rise of Tesla and so many of Tesla’s competitors, which is a great thing. Besides your school buses, are there many competitors first in the school bus category itself? EV school bus? In the EV school bus category.

Duncan: There aren’t many. No, there are a few who’ve announced plans. There are some private operators that run traditional diesel and gas bus fleets who have started to integrate some EVs into their fleets. But the majority of their fleets are still conventional buses.

John: So you’re the Tesla, and this is only a compliment, you’re the Tesla of school buses in terms of the biggest and the first mover in this category.

Duncan: That’s correct. We are without question the largest market player in this space. That’s right.

John: Do you think beyond, in terms of fleet electrification, are there opportunities outside of school buses to do more in the school districts that you’re working in or how do you look now at this category in terms of these lectures for fun’s sake, say there’s approximately 12,000 school districts. Is it all about getting at least that 20% of that 12,000 loaded in first, or is it to expand your offering, or is it to do both at the same time?

Duncan: Well, there’s a little bit of both. But I would say that the communities that we serve, we’re passionate about the communities, being able to deliver the impact and provide these services to communities. They typically run other vehicle fleets too. They’ve got buildings and grounds that have some trucks and some vans. They’ve got parks and rec. They might have some street sweepers and some garbage trucks. You need a whole bunch of different fleet vehicles to run a city. And so we’ve got the scale in services, we’ve got the technology backbones and we’ve got the ability to leverage infrastructure that we’ve already built. And so we’re actively supporting a number of our customers with other fleet vehicles. We will have electric garbage trucks on the road in Massachusetts probably by the end of the year, which is exciting. We’ve got a bunch of pickup trucks. We ordered our first fleet of Chevy Silverado EVs and they are fantastic. I’ve been driving one of them around to get a feel for it. And so the short answer is expanding within the communities we serve is a focus and continuing to be there and willing to support anyone who’s at the beginning of their fleet electrification journey is very much a cornerstone of our plan.

John: So once you’re in there with the Highland Fleet school buses, then these ecosystem opportunities in and around that community itself.

Duncan: That’s exactly right. And there are utility companies that are eager for help as well. And so sometimes they become part of the conversation and they become a local stakeholder. And so that’s a piece of our business.

John: Understood. In terms of the wow[?] numbers, let’s talk about an annualized basis annually before Highland Fleets comes into a community, how much emissions, if we’re just talking about…. And you can do bus by bus or whatever, whatever numbers that you typically use when you present to a community and you go in. But what is the emission reduction ratio, your bus over a traditional legacy bus? And in terms of the WOW numbers, I’m just excited for our listeners and viewers to understand really what is the environmental impact?

Duncan: Sure. Well, the environmental impact at a macro level is you can calculate it in tons of CO2. That’s one way to do it. And so 240 tons of CO2 is the average CO2 savings by going from a diesel bus to an electric bus, it’s equivalent to a little more than four vehicles taking four vehicles off the road. So it’s got real impact. There are other benefits around complete 100% removal of VOCs and particulate matter. The PM2.5, these are known carcinogens that cause cancer and they contribute to respiratory health. So if you think about it from a local health perspective, it’s a complete elimination of those things when you go to an electric school bus. So those are a couple data points.

John: And local communities, now, whether it’s a city, a municipality, just a school district itself, they’re all operating under sort of the macro trend rules that we’re all operating under in terms of ESG and making an impact and having to report to their constituents what they’re doing actually to make their community a more sustainable and, as you said earlier, more resilient place. This has to play into the great opportunity that Highland Fleets has across America to electrify the school bus systems across the country in that these communities have to report to their constituents also in a transparent way. And this is just another step in the right direction.

Duncan: You’re correct, John. There are many communities that have leaders and community stakeholders who are driving a clean economy, improved local health, ESG, a progress according to a plan. In some states, there are grants available for it. In other states, there are mandates that are requiring this type of activity. I think we try to meet communities where they are on their journey. Some of them have massive mandates. You have to buy only electric vehicles starting right now. And so that’s an overwhelming scenario. It’s overwhelming for the operators on the ground who have to operationalize that. They got to make it happen. There are other communities where the ESG movement is not a key theme, but the budget for the school is underfunded by 5%. And they’re really stressed about having to cut the entire music program as an example. And so bringing in a framework for modernizing the transportation fleet as a way to cut fuel costs and to cut down on maintenance costs is a discussion that is really productive and helpful. And it’s got the added benefit of local health improvements. But if they’re faced with the daunting prospect of having massive budget shortfalls, they’re really just going to focus on solving that. So you got to meet the communities where they are and really sell the concept of electrifying the fleets based on all of the benefits. And in some places, some benefits are more valuable than others. So it’s a little different everywhere.

John: But as you’ve pointed out earlier, Duncan, your Highland fleet vehicles actually have a great ROI, not only environmentally but financially as well. But as you just pointed out, sometimes communities that get themselves into a financial jam makes it harder for them to do the right thing to step up and purchase your vehicles. What kind of gap financing exists out there for compelling ideas and compelling products like yours for communities to take advantage of it even when they have budgetary issues? Does that kind of gap financing exist and is that a growing field?

Duncan: Absolutely. And it’s really part of our product. The fact that we’re able to bring grants from the federal government, we’re able to integrate tax credits, we’re able to sometimes bring utility funding from the local utility company, bring that all together, and then Highland is usually making up the difference. If there’s another million dollars that needs to go into a community, we will write that check. And communities can pay us over 10 or 15 years as the vehicles operate reliably and smoothly. And so being able to sort of extend that runway, really lower the cost of capital, and ultimately net net, just make it cheaper on a cash basis. That’s where it’s really powerful. And there have been a number of superintendents who’ve gone to their boards to approve contracts with Highland, and their framework has been around how it’s cheaper and they can put the dollars back into the budget to pay for other things. And that’s usually a pretty compelling case to be made.

John: But also, then a large part of what you do is this, as you just pointed out, given the vast array and patchwork quilt of different environmental rules and pressures that every state brings, every city brings, every municipality [inaudible] down to the school districts that you serve. You’re almost creating, as you said, you’re not only meeting your clients where they are right now but on their journey, but you’re also creating a specific idiosyncratic assessment for each of them so they can benefit the most from your great products, given all the opportunities for both federal, local and state financing that exists for these areas. So it’s very specific to the area that is making the request to purchase your vehicles, I take it?

Duncan: That’s exactly right. Our goal is to optimize how the transportation system gets modernized. And there are three goals. One is to make it the most reliable fleet. The second is to make it the most affordable fleet. And the third is to make it the cleanest, the best environmental performing fleet possible. And so if we need to bring a little more of the tax credit and a little less of something else in order to accomplish those three things, we’ll do that. It’s very much a service offering that has some flexibility around what the project looks like, but it’s all built on the same foundation and with a similar sort of long term support strategy.

John: I would assume, but I don’t want to assume anything in there for I’m going to ask you, the Inflation Reduction Act, how much has that helped fuel your business, no pun intended, or been the wind[?] at your back in terms of helping finance, get financing into the districts and the communities that you’re going to and you want to serve?

Duncan: It’s incredibly helpful. There are two pockets of value in particular. One of them is called the 45W tax credit and that’s a tax credit for medium and heavy-duty electric vehicles. So we are able to use that tax credit to provide value for full-size school buses. The second is the 30C, not to get too technical, but it’s basically a tax credit for charging infrastructure specifically in areas of lower income. And some of our projects are eligible for that. And so we can bring that value in, monetize it, which is complex, and pass the value through to the communities that we’re serving. So the IRA has been instrumental in really enabling this industry to be more viable for many more communities.

John: Understood. You’re now six or so years into this, so you’re still really in many ways still a very proven startup. What’s next? What are you most excited about in terms of scaling your company and getting into more communities across the country and also your terms of your R&D department? What are some of the new innovations and technologies that really get you jazzed every day?

Duncan: Oh, good questions. When we put our first project in a state, it has a way of waking up other communities in the state. Because transportation is hyper local, it’s not as easy to go experience the benefits and the impact if all the projects are in California and you live in Massachusetts. And so when we put our first project in a state, we get a tremendous amount of interest. We are in 30 cities today with projects that are up and running and operating. We will build close to a hundred more projects in the next 12 months that we know about today. So we will have our first project in Ohio, our first project in Texas. Our first projects are coming online in Florida right now, North Carolina, the list goes on. So getting over that hump is important and having a reference point, and to us, that’s a really encouraging way to encourage surrounding communities to go down the same path. I think on the technology question you asked, we see electric fleets as being an unbelievable tool to enable more renewable energy. One of the problems renewable energy has is you don’t know when it’s going to show up. And you can kind of guess, but you can’t rely on it. And that makes it hard for the people who balance the grid. Electric vehicle fleets can soak up excess renewable energy and can push the power from the batteries back to the grid when the grid needs it. They end up becoming an incredibly efficient tool at helping us decarbonize our broader energy ecosystem. And then you look at wildfires in California, you look at floods and hurricanes in the Southeast, all the things that create reliability problems for businesses, for governments, for homeowners. And I see EV fleets as just an unbelievable solution. It’s not additional equipment that sits and waits for a disaster. It’s equipment that is living and breathing and part of the community that you’re already in. And so being able to really get that technology out there and get that story out there, we think is super powerful. And we’re at that inflection point as an industry right now. And so I’m excited to see what the next couple of years bring.

John: So it took you six years to get to 30 communities or so and then 12 months to do the next hundred. How big do you think? Is it just North America or is this something you’re going to bring to Asia, something you’re going to bring to Europe or Latam? How are you thinking about… Is the scaling just going to be North America, or does scaling go beyond our borders?

Duncan: Well, long run, it’s hard to tell.

John: Yeah.

Duncan: The Europeans have been adopting electric vehicles in their public transit system for many years, and they’ve got an industry that’s growing and maturing. In parts of Latin America, there are more electric buses in China than anywhere else in the world. So this is not a new phenomenon, although the market’s still, in some senses, in its infancy globally. So long run, who can tell? What I can tell you is if I look at our plan for the next two to three years, there’s so much work we need to do in North America that it’s likely going to be at the center of our focus and our investments. That’s right.

John: That’s awesome. Duncan it’s just so wonderful. Thank you for joining us today and sharing your journey about Highland Fleets. I hope our listeners .and viewers not only got inspired, but for those who are decision makers or leaders in communities across the country, I hope they look up your great company at www.highlandfleets.com. We’ll also put that in the show notes and any other links Duncan you want to share with our listeners and viewers, we’ll put it all in the show notes so they can get fully educated before they contact you and ask for some help to get these great school buses into their communities. Thank you for your time today. But more importantly, Duncan, thank you and your colleagues at Highland Fleets for making the world a much better and sustainable place.

Duncan: Thanks, John. I really appreciate it.

John: This edition of the Impact Podcast is brought to you by Engage. Engage is a digital booking platform revolutionizing the talent booking industry with thousands of athletes, celebrities, entrepreneurs, and business leaders. Engage is the go-to spot for booking talent for speeches, custom experiences, live streams, and much more. For more information on Engage or to book talent today, visit LetsEngage.com. This edition of the Impact Podcast is brought to you by ERI. ERI has a mission to protect people, the planet, and your privacy and is the largest fully integrated IT and electronics asset disposition provider and cybersecurity-focused hardware destruction company in the United States and maybe even the world. or more information on how ERI can help your business properly dispose of outdated electronic hardware devices, please visit eridirect.com.