Electric truck leasing is open for business in the heart of L.A.

Startup Zeem wants truck fleets to benefit from electrification without the headaches of buying vehicles and installing chargers.

Zeem CEO Paul Gioupis shows off an electric van available for lease as a plane descends to nearby LAX.
Zeem CEO Paul Gioupis shows off an electric van available for lease as a plane descends to nearby LAX. (Photo: Julian Spector)
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INGLEWOOD, Calif. — The commercial backstreets surrounding LAX, the world’s third-busiest airport, host many a truck yard. But only one of these sites is full of heavy-duty vehicles that move silently and without emissions.

The electric trucks all belong to Zeem, which plans to lease them to businesses that operate small and midsized fleets. Zeem activated its first six direct-current fast chargers this week and can support 65 vehicles per day rotating through for a full charge.

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The company plans to build a total of 77 fast-charger plugs at the site, plus 53 slower Level 2 chargers. With carefully managed scheduling, these will eventually charge up to 500 trucks and shuttles per day. The overall goal is to speed up the decarbonization of transport by making electric trucks more widely accessible.

When fully operational, Zeem’s hardware will cumulatively draw a whopping 10 megawatts from Southern California Edison, which the utility says is enough to power 4,000 homes. That will make it the most powerful commercial truck charging station in the country, Zeem claims.

More drivers are opting for electric cars each year, but trucking is generally considered to be a more challenging transportation sector to electrify. Zeem CEO Paul Gioupis argues that electric trucks are ready, right now, for routes within greater Los Angeles and can save businesses money with their lower operating costs. It’s a stance supported by trucking industry field tests conducted last year, which concluded that 5 million routes in North America could be taken over by battery-powered trucks that are already available.

That’s a timely breakthrough — in California and across the U.S., transportation has edged out electricity as the biggest contributor of greenhouse gases. Decarbonization goals require tackling emissions from trucks.

The inflection point has come: It’s now time for electrification,” Gioupis said. The problem and impediment have been charging.”

Businesses that manage bigger fleets — transit agencies, UPS, FedEx — have more resources and staff to throw at charger installation and operation. But figuring out charging infrastructure is taxing for operators of smaller fleets, like shuttles to and from LAX, tour buses roaming the Hollywood hills and intracity delivery trucks. 

Zeem offers those operators the benefits of electric driving without all the hassle. Rather than having to buy their own electric trucks, they can simply lease a fleet from Zeem, along with a promise that the vehicles will be safeguarded overnight and fully charged every morning. 

From call center to construction

Zeem got started with a call center. 

Five years ago, the startup’s founders hired staff to cold-call small and midsized fleet operators. They’d ask how these operators felt about electrifying and what they would need to make that work, then log the details in a database.

Many of those inquiries went nowhere. But after 820,000 calls, Zeem was able to identify 14,000 fleets that it deemed a good fit for electrification. Now they just needed to sell something.

The company chose Inglewood to set up shop, right in the midst of the LAX shipping and logistics corridor. People and goods are constantly moving through the area while jets roar nonstop overhead. That makes for a high concentration of local fleets that could lease fully serviced electric vehicles.

Inglewood is an incorporated city within L.A. County that gets its electricity from investor-owned utility Southern California Edison, not the municipal L.A. Department of Water and Power. This jurisdictional zoning proved to be significant because SCE has earmarked $356 million to help electrify medium- and heavy-duty vehicles via its Charge Ready Transport program. That funding pays for many of the upgrades needed to deliver power for charging depots — and Zeem’s project is among the largest to receive money from the program so far.

It wasn’t until September 2021 that Zeem got its hands on the Inglewood property. Then the company began cramming as much charging capacity as it could into the site without triggering expensive and time-consuming grid upgrades.

Electric trucks parked in lot.
Zeem guards the electric trucks and promises to fill their batteries by the time customers need to drive them. (Photo: Julian Spector)

SCE is working to ensure the area’s grid can handle the coming wave of vehicle electrification, said Director of Electrification Carter Prescott, but getting chargers installed does take time. Charge Ready Transport projects typically take 10 to 14 months to complete, but they move faster if customers know exactly what equipment and charging capabilities they want, as Zeem did. If the power pull from the new charging equipment is more than the local grid can handle, though, the utility may need to upgrade a substation, which can take up to two years, or sometimes many more if permits prove difficult to acquire. 

Zeem’s project won’t trigger these kinds of multiyear grid upgrades. That’s an advantage of being the first to pursue large-scale vehicle charging in the area: No one else is competing for that kind of power. But future charging depots looking nearby for 10 megawatts of capacity may not have it so easy. 

Zeem raised $12 million to launch the company and get its first projects going, drawing from undisclosed individuals and institutional investors. The company is now raising a Series A round to fund another seven or eight depots across the country, Gioupis said.

Full-service electric trucking

So far, much of the entrepreneurship around heavy-duty EV charging has fallen into two buckets. One is truck-stop charging along major transportation corridors. The other is concierge services to help businesses install and manage charging equipment at their own property. 

Zeem is betting that it can woo smaller urban fleets away from the build-your-own-charging-station” model. 

Zeem’s business model is to install the chargers, own the vehicles, maintain them, guard them and ensure they are fully charged when drivers need to hit the road. The startup combines all those services, plus access to a drivers’ lounge and restroom, into a simple lease payment for businesses. Leases require a minimum commitment of three years; electric shuttles start at $3,500 a month per vehicle before tax.

The advantage of this shared-depot model comes from scale: Zeem pays a small team of technicians in one location to maintain lots of chargers and cycle vehicles through the chargers based on each customer’s schedule. 

With each transaction, there are fixed costs” associated with building charging infrastructure, said James Tong, SVP of product and strategy. You want a large scale to spread that cost over. At a small scale, it just doesn’t make sense.” 

This logic holds from the utility standpoint, as well. SCE will support vehicle-electrification projects at any scale or business model, Prescott said. But the utility does report to regulators on the per-vehicle cost to convert from combustion engines to electric via Charge Ready Transport funding.

It’s definitely more cost-effective when there are a lot of vehicles charging at one site, Prescott explained.

At a fundamental level, Zeem’s business model involves spending money to purchase trucks and chargers, which the company gains back by leasing out as much of its capacity as possible. It supplements that with revenue from letting outside vehicles charge up at its facility.

We make sure we secure leases that can monetize the assets — that way, we’re not putting investor capital at risk,” Gioupis explained. Then we make sure we’re backing product, whether it’s vehicles or chargers, that has been proven [and] validated. We’re not buying the cheapest.”

Zeem needs to lease out about 30 percent of its vehicles to break even, Gioupis said. Contracting out the rest of the vehicles makes the site all the more profitable. If the business succeeds in the City of Angels, Zeem is ready to bring it to other hubs around the U.S., including the New York City area and San Francisco.

Julian Spector is senior reporter at Canary Media.