Vehicles of The Future: Ezra Gardner Of Varana Capital On The Leading Edge Technologies That Are Making Cars & Trucks Smarter, Safer, and More Sustainable

Thank you so much for joining us in this interview series! Before we dive in, our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started in the automotive industry?

I became an investor in autotech by accident. My firm had been doing diligence into two interesting and separate solutions to provide wheelchairs with better mobility, and ended up investing in both. The companies were Galileo Wheel and Softwheel. Subsequent to our investment we, and the boards of these companies, realized that their unique solutions could actually be applied to the automotive industry in even more disruptive ways. Since then, I have never looked back and have become somewhat of an autotech geek.

Can you share the most interesting story that happened to you since you began your career?

I don’t have one specific story, but I’d like to share the part of my job that has been the most profound and interesting. Occupying the seat of an investor in the automotive and industrial tech space, I have the great honor of being able to travel all over the world to tour factories and facilities where so much important innovation and manufacturing take place. Along this journey, I have had the privilege of being taught “how things work” and “how things are made” by some of the most hard working and intelligent people one could ever hope to meet. Each of these tours and trips have been more than interesting , indeed enlightening. I have the best job in the world!

Ok wonderful. Let’s now shift to the main focus of our interview. Can you tell our readers about the most interesting projects you are working on now?

There are so many, but let me briefly highlight two: the first is a new type of electric motor designed by EVR Motors. They have invented a new topology (the geometry of the rotor and magnets) which allows for denser coil packing and produces three times more power by weight than the best in class motors on the market. This allows for a number of advantages such as lower cost, lower weight, and even has the capability to obviate the need for rare Earth metals in electric vehicles.

The second is a new type of “autonomous” tire being developed by Galileo Wheel. This is a tire that is able to operate just as a pneumatic tire would, but without any air. Solving this problem (as Elon Musk talked about recently on the Joe Rogan show) is a profound and ponderous problem. Autonomous vehicles cannot operate with a flat tire and moving to solid rubber simply doesn’t work, due to weight and lack of shock absorption. Other old tire manufacturers have been working on this problem for years with no luck, but Galileo’s new tire uses a totally novel folded sidewall that has been successful thus far.

Very exciting times!

How do you think this might change the world?

These technologies, and many others, are making significant strides to solve some of the biggest problems that have been the roadblocks to mass electrification and autonomy. We are very proud to be stepping up and solving these challenges.

Keeping “Black Mirror” in mind, can you see any potential drawbacks of this technology that people should think more deeply about?

I’m a huge fan of science fiction books and movies, but we must remember that they are in fact just that — science FICTION. We shouldn’t be afraid of these technological leaps. On the whole, there will be massive, truly massive, benefits to electrification and autonomy. I don’t think we need to be fearful of the evil runaway robot car, but this doesn’t mean that we shouldn’t be vigilant in designing autonomy with intention and caution.

What are a few things that most excite you about the automotive industry as it is today? Why?

I think that mobility as a service is coming — and in a big way. And this is super exciting. It’s really an extension of the “shared” economy, except it will emerge in bigger ways as it pertains to the automotive industry. The reason is simple — cars are large, high volume, underutilized assets. Even though there are so many vehicles on the roads, consumers and companies long for the ability to use different vehicles for different missions/purposes. Mobility as a service can both reduce the redundancy of vehicles on the road and, at the same time, increase the fulfillment of preference in real time.

What are a few things that most concern you about the automotive industry as it is today? What must be done to address these challenges?

I am concerned with potential inefficiency of our manufacturing capital stock. Let me explain. Over many decades, globally the automotive industry, both at the OEM and supplier levels, have built up a very large capital stock of manufacturing facilities and equipment. As we are transitioning to a world where EVs look ready to proliferate, what we are seeing is many new facilities being built either greenfield or converted from old, previously shuttered OEM facilities. There was a reason these facilities were shut down and new ones were built. Our manufacturing had become more efficient and the capital stock was too large to produce vehicles efficiently. I would much rather see new entrants to the market partner with existing production capacity so that we don’t go backwards in the manufacturing efficiency curve.

However, all is not to fear, as there are some very interesting solutions to this problem. Take REE Automotive, for example. This new mobility startup has partnered with existing OEMs and tier ones with excess capacity to manufacture their parts on existing lines globally, creating an extremely efficient and capital-light model. I hope others will follow suit.

Based on your vantage point as an insider in the automotive industry, what other exciting disruptive technologies will we see in the next few years? Can you share some of the new developments that will make vehicles smarter, safer, and more sustainable?

The revolution in automotive sensing has truly begun in earnest, but, like so many other emerging technologies, there is uncertainty and some confusion as to what standards will take root. We have 4D radar, lidar, swir, and several flavors of each to boot. (See ARBE Robotics, Innoviz, TriEye — and these are just three examples coming out of one small country — Israel.) We predict that there will be significant consolidation in this sector for several reasons. First of all, OEMs and tier ones need sensor supply companies that offer the full suite of products, technologies, and modalities, since they will want to develop a holistic stack with a supply partner (not 50). Secondly, Intel’s recent announcement to spin off Mobileye is setting the stage for a natural consolidator and others will surely join the consolidation movement.

In your opinion, how much longer will fossil fuel powered cars be produced? When do you think EVs will be the majority of vehicles in use? Can you explain?

Ice engines will be produced for many decades to come, as there are some (niche) applications that will have easier and cheaper access to fossil fuels. However, the unit numbers as a percentage will quickly fade in the next decade. Many industry players have focused on battery technology as a driving force for this revolution, but this is only part of the story. Next generation electric motor technology is already here, (for example — EVR Motors and their recent announcements) and it will provide several magnitudes more efficiency than advancements in battery technology will be able to produce.

When do you think we will see fully autonomous vehicles deployed in a mainstream way? What do you think are the main barriers to reaching that stage?

Fully autonomous vehicles are already here for off-road applications, as there are less multimodal traffic problems to solve. The next step will be last mile (or block) delivery vehicles, and intercity or intracity will be last. We will start to see real solutions to the multimodal traffic problems this decade.

How else will our driving experience be different over the next five years?

As mentioned earlier, Mobility will be offered more and more as a service. Why own, clean, and service a Porsche, when you can wake up on a sunny morning, press a button on your phone, have one drive to you, and then take it for a spin to work? And when you get home, it returns itself to its home and takes care of itself.

My expertise is in product security, so I’m particularly interested in this question. Recently there were famous cases of hackers breaking into the software running automobiles, for ransomware or for other malicious purposes. Based on your experience, what should auto companies do to uncover vulnerabilities in the development process to safeguard their vehicles?

Cyber security issues have been around for decades in the technology vertical, broadly. I think it would be wise for automotive players to partner more closely with some of the larger technology companies that have been dealing with issues for a long times. The good news is that we are already seeing this. Intel is a great example of this. It’s also a good thing that Apple and Google are getting involved in the automotive space. Traditional auto players would be wise to not view the world so narrowly, to strictly consider these companies “competitors.” The time for “co-oper-ation” is here.

You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂

Innovation has always been about teams, not individuals. Some of the greatest advancements that have helped society have come from big projects meant to solve big problems, solved by big and diverse teams. My idea would be to create in the private sector, as already exists in the academic sector, programs that encourage innovators in different industries to meet and exchange ideas. This would cross pollinate innovations across verticals and create more innovation for more people for more good.