On Air Episodes

This podcast is made up of casual interviews that give interesting perspectives, provide relevant information and pique the curiosity of our members and wider audience.

Sustainable Manufacturing in the Auto Care Industry
Traction Control

Sustainable Manufacturing in the Auto Care Industry

Stream now: 

Transcript

Stacey Miller: 

Welcome to Auto Care On Air, a candid podcast for a curious industry. I'm Stacey Miller, Vice President of Communications at the Auto Care Association, and this is Traction Control, where we chat about recent news from the global to the local level and what it may mean to the industry, featuring guests on the front lines. Let's roll, All right. So today we're diving into the future of sustainability with Mark Nugent. So he's the chief sustainability officer and EVP of strategy at TerraPower. With over two decades of experience spanning finance, strategy, M&A and sustainability across industry giants like Comcast, NBCUniversal, Cummins and Intel, Mark is really leading TerraPower's charge towards innovation and carbon neutrality. So, Mark, welcome to the show. Thank you.

Mark Nugent: 

Thank you, it's great to be here, stacey.

Stacey Miller: 

I'm so excited about this one because one I think you have a really interesting journey across industries to where you came here, and I also want to do a little bit of a digest on who TerraPower is and what they do, because the company is not new, but the name is a little new, so we're going to dig into that. But first let's start with a little bit about you how you came to lead sustainability and strategy here at TerraPower.

Mark Nugent: 

All right, love the question. Do you mind if I take a step back and go way back?

Stacey Miller: 

Yeah, let's go.

Mark Nugent: 

All right, sustainability for me. I didn't realize it, but it's been part of who I am for quite some time, you could probably tell. But I have an accent right.

Stacey Miller: 

Yeah.

Mark Nugent: 

I grew up in Jamaica, and for those of you who've been there, Jamaica is a really cool place it is. For those of you who haven't been there, you've seen the pictures. It's beautiful right as a child I used to look out at the trees, the sky, the mountains, the ocean. I didn't quite take it for granted. I realized how beautiful this place was. Sometimes I spent time sitting on my rooftop just looking at the sunset Amazing and I've always thought, oh, this is such a wonderful world that we're in.

Mark Nugent: 

I've also seen the benefits of business, the ability for business to make things better as well, but when things kind of came together and it wasn't as well thought through as possible, I could see how people and business could make the environment a little bit worse. So it kind of struck me as a young child, I guess as a young man how important it was to have a really good stewardship of our world. So that kind of stuck with me. It was in the back of my head. I decided then, though, that no matter what I did in life, I wanted to make the world a better place, whether it is with people, whether it was with the environment.

Mark Nugent: 

Interestingly enough, I've always been really curious. I always wanted to figure out how things work. I wanted to figure out why things were the way they were and I could see myself making connections. I'd connect the dots and I realized I had a gift there. I liked art, I liked math, I liked science. It was all something that had all these different pieces and points of interest for me. So you talked about my diverse background. Part of it was because I like so many different things and my first career was in engineering. I don't think you had it there on the paper, but I was a civil and environmental engineer.

Stacey Miller: 

Wow.

Mark Nugent: 

Almost by. I always wanted to be an engineer, but the environmental piece of it brought me back to my childhood, brought me back to what I wanted to do when I grew up right. So my first job was in engineering. But I did a lot of environmental stuff and, like I mentioned, I love business and so my next degree was in business, particularly in finance and strategy. It kind of went for the hardest piece of business that I could find.

Stacey Miller: 

Oh, my God.

Mark Nugent: 

I didn't know what finance was, I just knew it was hard.

Stacey Miller: 

For fun. You wanted to do finance for fun.

Mark Nugent: 

I wanted a challenge I love challenges, right so I did finance and I had no idea what it was, like I said, and I kind of figured it out while I was doing it and I loved it even more than I thought I would love it. And the reason I love finance and strategy is because that's where I believe you could make those decisions that created the most value for companies and, like I said, companies can be a force for good in the world and so that was part of my journey. My diverse journey went into engineering finance strategy, but it really started as I went to different companies. I was at Intel, I was at Cummins, I was in different places and it would be really cool to say I have this direct plan for my life and I followed each step point by point. But I didn't. I didn't quite do it that way. I knew what was important to me. Like I said, I loved doing the right thing, I loved business, I liked analytical things. So as those opportunities came up, I jumped at it. I knew in the back of my head that was something I wanted. I knew I didn't want to work for somewhere that hurt the world or hurt people, so I made those choices.

Mark Nugent: 

Eventually, when I was at Cummins, I came across this concept of remanufacturing and I thought this is the most amazing thing ever. You can make money using things that people would otherwise throw away, so it's good for the environment. And I had previously had roles in strategy and M&A and I thought my perfect job would be if I could do strategy, m&a, finance with something that is great for the world like remanufacturing. But in my head, nothing like that quite existed. And then one day I got a knock on the virtual door, so to speak, and a company called BBB came calling. They recruited me. One of the first things they said was hey, we're a company that does remanufacturing, we're looking for someone to do strategy and M&A, and we're really close to the water. What do you mean? You're close to the water, we're close to the Gulf of Mexico, we're close to beaches, we're close to the Mobile Bay, and I thought, oh my goodness, I love beaches. That's where I came from. Anyways, that's how I ended up at formerly BBB, now, as you said, terrapower, doing sustainability and strategy.

Stacey Miller: 

That's amazing. I love this story. When you and I first met, I knew immediately we were going to get along, because you're from Jamaica. I'm from Trinidad, if folks listening don't know, and I love that you told that story because I had a similar revelation.

Stacey Miller: 

Right, we come from these islands. There's all this tourism and you know, you go to the beach one day and someone leaves trash and you're like, oh gosh, I hate this. And we have this problem where we have these, you know, reefs really beautiful coral reefs and unfortunately, you know, the tourism industry hasn't been a good steward of those natural spaces and now they're ruined and the coral reefs are dead. And I go now versus when I was a child and it was totally different, so I could totally identify with that feeling. And what's so interesting to me is that we're calling it sustainability and we're here in the automotive aftermarket talking about sustainability.

Stacey Miller: 

But sustainability has been around for a really long time. We just maybe didn't call it that right, like it was being green or recycling or what was the campaign Reduce, reuse, recycle and now we're focused on sustainability. I think that's so cool that it came full circle for you in your career in a place where it makes an impact because there's what nearly 300 million drivers on the road that are driving these vehicles with remanufactured parts and what is the impact of that on the industry and to drivers. I think it's going to be a really, really cool discussion. So I want to jump into TerraPower, because you mentioned. Terrapower used to be BBB, so that may be a brand new name to our audience and it's a pretty major rebrand. I mean, how long was BBB around before you guys made the swap?

Mark Nugent: 

It's about 40 years. It's been around for a long time.

Stacey Miller: 

That's a really long time. I imagine that that wasn't an easy thing for the company to do. There was a lot of research. I talked to Duncan this morning about all the months of research that they did and the testing to figure out the equity of the names and what was going to resonate and all the testing that they did and I thought that was so interesting. But you guys have been involved in remanufacturing from the beginning, right. So has your core mission changed? Or what is your core mission? Kind of moving forward as TerraPower? It hasn't really changed?

Mark Nugent: 

Or what is your core mission? Kind of moving forward as TerraPower? It hasn't really changed. I think our mission is to spread the power of sustainable manufacturing at scale. What we do, as you mentioned, we do sustainable manufacturing of components and parts Basically the components and parts that keep the world going. You have millions of vehicles on the road almost 300 million on the road right and they are constantly going. If you're going to work, you need your car. If you're going to have some kind of entertainment. It's just part of our everyday life here in the United States. And because these cars are continuously going, the parts are continually breaking and sustainable manufacturing gives you the opportunity to keep them going affordably and sustainably. I use the term sustainable manufacturing a couple of times in our conversation, just for those of you who don't know how we use it.

Mark Nugent: 

There is a typical remanufacturing of a component. So just to kind of give you a little bit of background on remanufacturing, you have, say, your starter in your car or your alternator brakes. You're not going to be driving very much longer if those don't work right. So you go into your local parts store. You say, hey, I need a new starter. They'll say, okay, do you have your old one. We give it to them. That's the core. I guess that's a terminology we use, basically the used part. We give it to that parts store. The parts store will give you a replacement. Now that replacement starter alternator is typically a remanufactured one and the main component of that remanufactured part is that core that you give to that part store. That core comes back to us, to TerraPower.

Mark Nugent: 

We take a look at the core, we inspect it, we disassemble it completely, take it completely apart. Some parts you have to discard them because they're completely worn every time you remanufacture that part. Some parts you have to discard them because they're completely worn every time you remanufacture that part. Other parts you can reuse it. You can bring if it's cracked or if it's scratched or whatever. You can bring it back to the original specs using technology. At the end of the day you put everything back together, reassemble it just like you would with a brand new part. Then you inspect it again and then you basically repackage it and do it again. A lot of people do remanufacturing. What we do goes beyond that. We do it in a way that's environmentally responsible. We reduce waste from the process. We use cleaner sources of energy when we're doing it, we consider water usage, we do it better than we should have otherwise, and so that is what we consider sustainable manufacturing.

Stacey Miller: 

So more than just taking the part and recycling it, but it's everything that goes into it and surrounding it.

Mark Nugent: 

Absolutely.

Stacey Miller: 

That's fascinating because I know there is a distinction, and you were sure to tell me about it. Duncan told me about it this morning Duncan is the CEO of TerraPower that remanufacturing is different from sustainable manufacturing markedly different. So I appreciate you sharing that because I think that you know this type of movement, like the automotive industry, is not new to this right. We've been doing it since the beginning of time and there's probably a little bit of a misconception about how our industry treats tires are thrown into the ocean every single year and then I go and I find out that that's basically disinformation from years and years and years ago and we've been recycling tires since forever.

Stacey Miller: 

Or the oil, right, like I remember oil changes being such a big deal and the oil seeping into the earth and there were campaigns around how you shouldn't do oil changes in your driveway because people would just pour it in the grass. But what people don't know is when you go to your local repair shop, that oil is recycled and they use it to heat the repair shop, right? So there's all these different things that maybe the general public doesn't know about how sustainable our industry really is. But it goes so much further, beyond just those really simple examples that just the normal driver is into. Right. It goes into the parts that are on your car. We're going to talk a little bit about electric vehicles. I know everybody's talking about electric vehicles right now. That's a shifting landscape, so I just want to make that really important point that this is not new, but it's existed and TerraPower has a very long legacy of doing that.

Mark Nugent: 

Yeah, yeah, and I think even your previous question as well. Right, I think one way to answer that was to say that for the last 60 years here in the United States we've been basically remanufacturing, and back then it wasn't as cool to be green or sustainable. Right, but for every single unit that you remanufacture, like you said, you save tons, or you save a lot of materials from going into landfills, you save a lot of carbon from going into the atmosphere. It's just a cleaner way to produce the parts that keep our country and the world going.

Stacey Miller: 

Absolutely, absolutely so. Here on the Traction Control Show, on Auto Care On Air, we really focus on headlines around the industry and across the globe just for what's going on, what are those challenges and opportunities and how does the automotive aftermarket handle those challenges and opportunities? And I think this one is so unique because the younger drivers, the younger generation I don't even know if they're driving. There's all of these reports about how they're taking a longer time to get their driver's license. They're more likely to carpool or take carpool services like Uber, or they take public transportation, things like that, especially in the metropolitan areas.

Stacey Miller: 

But while that may be true, the younger generation apparently is more likely to purchase from brands that have initiatives like what you guys are doing, so sustainability. They have a purpose, they have a pledge, they're doing something that helps the greater good and they're more likely to buy. Have you talked about that at all at TerraPower in terms of like influencing the next generation of driving or how you might be able to resonate with those younger drivers? Because I just think that's so. It's an interesting correlation. Maybe not many people would have thought of it.

Mark Nugent: 

Yeah, absolutely. I think the younger generation has a vested interest in sustainability.

Stacey Miller: 

You've got kids, right I do. How old are they Not driving age, right I have three wonderful kids.

Mark Nugent: 

All of them drive. My daughter just started driving in the past year and was the most terrifying thing ever.

Stacey Miller: 

I'm sure.

Mark Nugent: 

Yeah, one day you have a little baby and the next day she's driving around town. It's scary, but she's an incredibly careful driver. I have two older sons and you're right, when I was young you had to hold me back. I wanted to jump in that car and drive all over the place. And kids nowadays? Well, my observation from my kids and from others that I've seen yep, they like to drive, the freedom it gives them, but they're not as excited about driving as some of the older generations. In fact, that's kind of how the data plays out.

Mark Nugent: 

The age of people getting licenses has crept up. There is a lot more options out there. You have public transportation, you have Uber, but you still have many, many vehicles on the road, and so you'll still need to have the parts. You'll still need to have it. Keep going. You said that you will talk about EVs later on, and we will, but electric vehicles have also taken on a bigger significance in what people think about with cars, and even the ones that are internal combustion engines. The younger generation will want to know something about how these parts are made. They will want to know that they're sustainably manufactured, or made sustainably, because they will have to live in the world in the future that is impacted by these manufacturing processes.

Stacey Miller: 

Absolutely. Hence the rise of electric vehicles, right? So people are very excited about electric vehicles. We saw really massive reports on penetration for electric vehicles when they started coming out, but nobody really knew, right. We had a couple that came to the market and then the automotive aftermarket says shit. We got to figure out how to make the parts for these cars, you know. And when are these parts going to break? What is the average age going to be of these vehicles? Right, and I think we're finally starting to see the age of electric vehicles. Now they're coming out of the warranty period, we're starting to see them more in the aftermarket and really understand about how to manufacture those parts, put those parts on the car, what's the life of a part on the car. So I feel like it's a perfect segue into kind of what you guys are doing or what you're thinking about the future of the electric vehicle space.

Mark Nugent: 

Yes, a few years ago I did a project, a strategy project, on electric vehicles and kind of like what you're saying right there. The numbers were way smaller than they are today. I think it probably was too conservative, but there's millions of EVs on the road today. Each year the share of vehicles that are electric vehicles which are sold continues to increase. A couple of years ago, 1% of vehicles sold were electric vehicles, then three percent, then eight percent and then in the last 12 months or so it's going it's above 10 percent of the electric of the vehicles are electric vehicles. You might be thinking I'm talking about Europe or somewhere else, but no, that's in the United States and we're talking just about battery electric vehicles. The growth rates of vehicles it continues to be positive. When it comes to electric vehicles and hybrids, evs have been growing year over year at double digits for a while. This past year it's been a bit smaller, about 7% year over year. But hybrids, those are growing at 30% plus per year. So huge growth.

Mark Nugent: 

And what does that mean for the aftermarket? You've probably heard this statistic before, but with an internal combustion engine there are over 2000 moving parts and the significance of that is moving parts. They spin around, they grind into each other, they vibrate, which is really good for the aftermarket, because those parts break and we get to replace them. Electric vehicles, it's a little bit different, because they only have around 15, 20 moving parts and even those moving parts they don't break as much. So we have to think about okay, how do we adjust in the aftermarket for what appears to be a growing segment of the vehicles that we will be seeing in the future?

Mark Nugent: 

And when we looked at this, the main part that has value in an EV is the battery. So that's kind of where we've been focusing our efforts on. The failure rates of batteries are more than the other components of the electric vehicle. It could be because they've been worn out through use over the long period that they've been on the road, or it could be that they just fail for whatever reason. And just like we have sustainably manufactured components that work on internal combustion engines, we are selling sustainably manufactured batteries for electric vehicles, something that's really exciting, because now we can participate in the future as well as today. We've got it covered, whichever direction it goes.

Stacey Miller: 

That's really great Because I remember there was a Washington Post expose and I don't even know if people really latched onto it, because there's so much hype around electric vehicles, right Like the government is pushing them, people are excited about them. I'm in Virginia and every other car is a Tesla. I kid you not, there's just very few ICE vehicles where I'm at in Virginia and you know the Washington Post did this story. It was a scary story and it was about the true impact of manufacturing these electric batteries and it was how they're mining the materials and the copper in Indonesia and it was ruining these small communities and the waste was running off into their water and then the water was getting into their soil and it was harming the animals and it was like whoa, what do we do about this? We can't create more harm with what we're doing.

Stacey Miller: 

So the fact that there are industries now, like ours, that are really focused on the sustainable manufacturing of that, so we don't see stories like that, because we don't need the negative PR about that here. That's not what we're trying to do. It's really encouraging because a lot of people ask questions, right, especially the younger generation. They want to know where did this come from. How was it made? Was it organic? Was it this, was it that? And we need to be able to have answers to those questions and make sure that we're not having or creating additional negative impacts.

Mark Nugent: 

I love that. I love that I think when I think about it. Yeah, at first you buy an EV and people say, oh wait, it's got a much worse impact on the environment than just building an ICE. Yeah, technically, once you first purchase one, the carbon footprint of an ICE vehicle is slightly better than an electric vehicle. But once you've operated it for two years roughly two years the electric vehicle keeps on beating the internal combustion engine when it comes to the carbon footprint of that vehicle, now, if you had to replace that battery in the EV, it starts it all over again. So you have to go back and you mine the minerals those communities you're talking about it's not very clean and then put it back in the vehicle and then it restarts the clock. However, if you did and you mine the minerals those communities you're talking about, it's not very clean and then put it back in the vehicle and then it restarts the clock.

Stacey Miller: 

However, if you did a sustainably manufactured battery, you don't have that issue. Really, wow. I need to come to one of your facilities and see how exactly this works, because I wrote a note down here. So my boss, bayzad Rasooli, he was given a tour of one of your facilities.

Stacey Miller: 

I'm very jealous, but he said when he went it was full of people with all of these materials that didn't know what they were doing with it, but they knew they were going to remanufacture it or how they were going to recycle it or reuse it in some sort of way that fit with TerraPower's mission. And it was like he described it as like a like a lab of mad scientists, and they were all so excited and so passionate about what they were doing and that they were given the liberty to figure this out. And I just think that seems like such a cool experience and more people need to see that story, particularly from this industry.

Mark Nugent: 

Absolutely. I think the really cool thing about TerraPower is we don't just keep making the same things. Obviously we do, and that's how we grow, that's how we make our money. But the cool thing is we try to figure out what's next. What's next in the future, whether it is with EVs or electronics, what's next? And that's what those guys were doing.

Stacey Miller: 

Yeah, I mean that's the big question what's next? And everybody's got a prediction. I obviously don't have a crystal ball. I'm here to learn from you as the novice, but is there anything that you think that's next that's worth noting, something you're excited about?

Mark Nugent: 

Oh, absolutely. Well, I'll talk a little bit in the context of the automotive aftermarket. Vehicles are a little bit different today than they were in the past, wouldn't you say. I think they're a little bit safer, lower emissions, way more convenient. Some of them drive themselves. It's almost like we're living in a science fiction world.

Mark Nugent: 

Yeah that's really good for me as a driver, because I'm so much more comfortable. The vehicle is way cleaner. The challenge comes in now is okay, now that's the case when these parts that make it cleaner, the parts that make these vehicles drive themselves, the parts that make it more convenient when they break, do we know how to repair them? Do we know how to remanufacture them? It gets way more complicated, but it's also exciting. So, just like you said, those people in that facility where they got the parts all around trying to figure it out, that's what they're trying to figure out.

Mark Nugent: 

Back in the day, maybe 20% of vehicles were electrical or electronic. Now it's more like 60% of the value is electronic. So how do we figure that out? How do we make a product that is high quality, that gives the end consumer something at a lower cost that they can afford and keep these vehicles running? Back in the day, if something broke, yep, we could fix it really cheaply. Now, if something breaks, that car isn't going anywhere for a while. That's where the aftermarket has to figure those things out, and here at TerraPower, we're there with you. We're going to try to help you to figure it out as well and, based on our history, we will.

Stacey Miller: 

That's amazing. It's really cool to think about because, you're right, I remember your first car and parts are a dime a dozen. Something breaks. You know your first car and you know parts are a dime a dozen. Something breaks. You can walk into the local retail store, find something. It's a couple bucks. You can probably swap it out right then and there, if you've got the tools in your trunk and you're good to go. But now the vehicles are so complex and I do worry about one the rising cost of vehicles, because that's starting to become a big trend in the industry. Right, like gone are the days where you could spend, you know, $12,499 for a brand new Dodge Neon, like I did. Like there's no such thing, right, and then replacement parts for a couple hundred bucks when something breaks and you run that thing into the ground. Now it's average cost of a car is like $30,000 and up. I did a search actually for cars under $20,000. And I think there was one at $20,000. And I thought, wow.

Mark Nugent: 

I can't believe you found a car for $20,000.

Stacey Miller: 

I'm not going to talk crap about an automaker on this podcast.

Stacey Miller: 

It's not what this is for, but it wasn't a car that I would purchase. So, and then parts prices are also kind of aligned with the increasing cost of a car. So I think that's a really interesting challenge for us to continue working on it. I think, um, between what you guys are doing, what all the other suppliers are doing, like we're working on it, but it's becoming a more complex world and that's just. That's just what comes with it, I guess, right yeah, I don't know um.

Stacey Miller: 

So tara power is doing it, tons of um suppliers are doing it, it being sustainability and um. I know there's lots of legislation and regulations around sustainability too that are happening in the automotive aftermarket. We're not going to get into depth of them here because they're very complicated, but how are you guys keeping track of what is happening to make sure that you're complying with everything that's going on? Because, from what I understand, it can be quite a confusing place to operate in and it differs by state right.

Mark Nugent: 

Oh yeah, it's not an easy task. Let's put it that way. It's almost like herding cats, because some might pop up here and everybody gets geared up for it and then it disappears. And it will pop up over there and then everybody scrambles to get on top of it and then it disappears. Is for us, it's not a matter of trying to get ready to meet the regulations.

Mark Nugent: 

I think we do such a good job of taking care of our carbon footprint, of recycling, of reducing waste, of doing all the right things. It's just a matter of okay, how do we communicate that to this regulatory body? How do we communicate it to that one? They all have different templates or different formats. We are an international company. Obviously, we're based here in the US, but we have a very large Europe operation and if you know about Europe, they have many, many good regulations, many regulations. You're probably familiar with CSRD, and then they have CSDDD. We're getting ready for CBAM and these are way more complex than what you have here in the US. We've done a significant amount of work getting ready for these regulations.

Stacey Miller: 

Will you explain what those acronyms mean? For the listeners who aren't aware, because the EU and the US regulations are very different. Sometimes I like to think that the EU is ahead of us in that they implement these regulations before they get to the US, so they may not know in the EU.

Mark Nugent: 

So CSRD Corporate Sustainability Reporting Directive it makes sure that when people make claims about sustainability, that it is well harmonized, backed up. You have a bunch of standards that you have to do. You have to do a double materiality assessment, which is one of the bigger components of that. It's just making sure that what you say is what you do. Csddd means that you've done your due diligence to ensure that this is correct, that what you've said is correct.

Mark Nugent: 

I mentioned CBAM and I think that is basically something that makes sure that for Europe, when you bring a product in from outside of Europe, that you're correctly accounting for the carbon content of it, and I think there are taxes associated with that To all of them. It's really important to get them right. There are penalties associated with it. They're going through change in legislation there. So if you've gone ahead and done all the work, made sure you've done the work there, it got pushed out so you may not have the same timeline as you had in the past. Over on this side of the pond in Canada they have regulations related to sustainability, very important that you comply with that. Everybody knows about California. California has lots of regulations. There's a packaging regulation making sure that your packaging is sustainable.

Mark Nugent: 

That's the EPR one right EPR, that's right.

Stacey Miller: 

That's been the buzzword this entire week and I don't mean to say buzzword, but it's been nonstop because there's a deadline coming up.

Mark Nugent: 

There is a deadline coming up. There is a deadline, fun stuff, lots of things to keep track of. And, yeah, we do keep our ear to the ground to make sure that we're not caught by surprise, and everybody is really excited to bring something up when it pops up, so we also hear about it from whether it's a market or customers, and I do a lot of research to make sure we're not caught by surprise.

Stacey Miller: 

Do you think that the legislative landscape is the biggest challenge to sustainability in the aftermarket, or is it something else? Because I know many companies in the industry are undertaking sustainability initiatives, whether it's manufacturing, whether it's packaging, whether it's operations in their office and just being better at recycling. You know there's so many different ways that companies can be sustainable, but there are some companies who haven't yet kind of grasped onto the need for it. So what do you think is a main challenge for companies that aren't doing it?

Mark Nugent: 

I think legislative landscape is a big component when it comes to both challenges for sustainability as well as enablers of sustainability, and, as you know, the regulatory and legislative environment can change almost overnight. At one point in time it could be really pushing for sustainability. Another point in time it could be not as interested. So I think it's important not only to keep your eye on what's going on, but to respond when things change as well. So, for example, there could be legislation that encourages clean energy and there could be regulations that encourage clean energy, and so it's important to understand when that is something that we can benefit from and when it moves away from something like that we can lobby to try to make sure people are thinking about sustainability or clean energy. Some of the bigger challenges to sustainability could include educating customers. There is a big portion of the customer base that is interested in sustainability, like you said, and there's a big portion that doesn't quite know what it is and doesn't quite understand how it can benefit their lives, so education is very important to it.

Stacey Miller: 

I'm really glad that you touched on that, because I think that there's a lot in social proof. So when companies see another company doing it, it makes them think about it and when a competitor does it, it definitely makes you want to do it, because it's not quite FOMO, but it's's okay if this company is able to do it and they're seeing impacts to their profits, they're seeing impacts to their bottom line. This is advancing their position, but they're also advancing their position and doing a greater good, Like I think that that's very powerful. So the more companies that do it in our industry, maybe the better it is. And you know, you mentioned an education. We need better education and awareness across the industry Seems like that's something that we could work on in order to better educate the companies that aren't doing it. And I'm not sure which segment needs the most education. I think manufacturers are on top of it, right, you know they're being regulated, but what about the retailers? What about the shops? Who do you think needs the most education, maybe?

Mark Nugent: 

I think the retailers get it. I think the retailers understand the benefits of it. I'll talk about some of the benefits that companies would be interested in.

Stacey Miller: 

Yeah.

Mark Nugent: 

And maybe you'll touch on that later, I'm not sure, but for a lot of companies, for us I'll use myself as an example or TerraPower. Terrapower doesn't just do sustainability because it's the right thing. It doesn't just do it because it is good for us and our children and the world, but we do it because there's a real business case for doing it. So when we're reducing waste, that means we're being more efficient in our manufacturing processes. When we're reducing our CO2, it means that we're spending less on fuel. Right. Both of those things improve our profitability, so that allows us to do more things with less. We can take more to deposits in the bank, more to invest in our company. Large companies do see that, and so there is a business, a real business case for them to also do sustainability. A lot of our investors, a lot of investors, see that benefit as well, and so their investors are interested in it, and so they see the data they ask us for how we're being sustainable.

Mark Nugent: 

Fortunately, we can keep track of all that data down to the part level, like I said, and so we can help them to see how much CO2 they're saving when they buy from our bi-terra power products. Smaller companies, smaller entities, may not see it, even though they benefit from it. So we can help them to understand that, yeah, not only is the economics good, not only is it cheaper for a sustainably manufactured product, but it's high quality and you're able to save the environment. And, by the way, if you did your practices sustainably, you can also reduce waste. You can also improve your profitability. So that type of education helps and then the end customer, them being able to say, by buying this product, I have a positive impact on the environment that really resonates with a lot of people.

Stacey Miller: 

I'm really enjoying this conversation because I'm feeling like the takeaway is that you, no matter where you are in the automotive aftermarket, there's something you can do as a business to impact sustainability. And there's small steps that you can take, such as the waste that's in your office, and there's bigger steps you can take, such as remanufacturing products altogether or sustainably remanufacturing products altogether, and there seems to be a spectrum that companies can work towards and take these steps towards a more sustainable future, and it's going to be a pretty massive impact. I mean, you talk about the CO2 levels. I don't know if you have any numbers in your head right now about it, but that seems to be a pretty massive part of this discussion, whether it's the CO2 coming from the manufacturing, the sustainable remanufacturing or the CO2 coming from the vehicles right? Is that one of the biggest things that impacts our environment right now?

Mark Nugent: 

Yeah, so I mean, everybody talks about greenhouse gases. Greenhouse gases, it's real. It's scientifically shown how it can help to impact the temperature of the planet. Measure our benefits of the sustainably manufactured product by understanding how much CO2 is avoided by doing it. So, yes, over each year, roughly about 160,000 metric tons of CO2 are avoided by our products. Through our process. You could buy a new product or you could buy a sustainably manufactured product. When it comes to our processes and how we do it, we avoid 160,000 metric tons of CO2. That's a lot. That is a lot. That's a lot. And yeah, so knowing that information gives us the ability to help others, to see how they can impact the planet when they come to TerraPower and buy one of our products, and also, because we measure it, we could see how we can continue to improve that.

Stacey Miller: 

I mean, knowledge is power, knowledge is power.

Mark Nugent: 

Knowledge is power.

Stacey Miller: 

Oh man, I feel like I'm going to go home and recycle a bunch of stuff.

Mark Nugent: 

Yeah, just go home and avoid some CO2.

Stacey Miller: 

I'm feeling really wasteful with this rental car I have. Like I just man.

Mark Nugent: 

Don't worry.

Stacey Miller: 

Should have gotten the electric vehicle. I'm sorry, it hurts.

Mark Nugent: 

You can do it, just small steps. They make a big difference.

Stacey Miller: 

I promise I'll do better. I feel like I didn't do a good job today.

Mark Nugent: 

Don't worry, don't feel bad. My daughter always says, hey, you should recycle that, don't throw it in the trash. You're ahead of sustainability.

Stacey Miller: 

I love you daughter, she's not wrong.

Mark Nugent: 

I hope she doesn't watch this, or maybe she will. You're the dad at the barbecue. She'll give me a hard time.

Stacey Miller: 

Yeah, you're like the dad at the barbecue, where everybody's throwing their soda cans in the regular garbage and you're picking them out and putting them into the recycling.

Mark Nugent: 

I have this big old bag over my shoulder.

Stacey Miller: 

Like listen guys, we don't do this here. Do you know who I am?

Mark Nugent: 

Yeah, exactly.

Stacey Miller: 

Head of sustainability at TerraPower. Do you have any predictions about the future of sustainability here as we wrap up?

Mark Nugent: 

I think the easiest prediction is that it's going to keep getting bigger and bigger and bigger. If you look back when I was a kid, right, you could smell the diesel in the air, even here in the US. I mean, I used to live in LA years ago and even though it wasn't quite as bad as it had been, the air in LA was not as clean as it is now. So in these small slices where you see yourself today, you may not see that difference that has been made, but it's been a huge, huge improvement over time and that journey is not stopping. It's not slowing down. It will keep going, and the sustainability that's a huge piece of that. So I continue to expect and see that growth continuing to happen. It'll be all over the automotive aftermarket. It will be in many different parts of industries within our country and around the world and TerraPower we're so excited to be part of that.

Stacey Miller: 

Wow, I'm feeling like there isn't anything in the world that can't be recycled or sustainably remanufactured. And Duncan Gillis, your CEO, said this morning when we spoke with him that you know, when someone tells him it's impossible, he works twice as hard to get it done Something to that effect. That's not a direct quote, and it made me think. Well, you know, we're kind of doing the impossible by taking batteries and remanufacturing them and turning all of the things that we consume into new consumables. So what else is next? I think I'm very excited for it, and I'm really excited that TerraPower is here on behalf of the industry and all the other companies here that are working towards that future. So thank you so much, mark, for being here. Is there anything else that you want to share with our listeners, anything that maybe I forgot to touch on?

Mark Nugent: 

Oh, I think there are so many different things. I know I could spend the whole day talking to you, talking to the listeners, about sustainability.

Stacey Miller: 

I could tell you're very passionate.

Mark Nugent: 

This is the shy side of me, let's put it that way, but I think we touched on it a little bit. It kind of starts with you, it starts with each of us, and I think the moment that you realize that you can impact the world, you can impact the people around you for good, you can impact the world that your children live in for good, that's when you take those small steps. I think if you want to learn more about us, you go to wwwterrapowercom. That's T-E-R-R-E-P-O-W-E-Rcom.

Stacey Miller: 

Wow, and his best radio voice too, my God.

Mark Nugent: 

Coming at you.

Stacey Miller: 

Do you want my job?

Mark Nugent: 

Because you're really good at it. Oh man, no, I wish I was as good as you were.

Stacey Miller: 

No, I wish. I wish I was as good as you were. No, that was perfect. Thank you so much, mark. It's been a pleasure. Thank you, thanks for tuning in to another episode of Auto Care On Air. Make sure to subscribe to our podcast so that you never miss an episode, and don't forget to leave us a rating and review that helps others discover our content. Auto Care On Air is a production of the AutoCare Association, dedicated to advancing the auto care industry and supporting professionals like you. To learn more about the association and its initiatives, visit autocareorg.

Description

Sustainability isn't just a buzzword—it's deeply woven into the fabric of the automotive aftermarket, though many consumers remain unaware of this long-standing tradition. Mark Nugent, Chief Sustainability Officer and EVP of Strategy at TERREPOWER, brings a unique perspective shaped by his childhood in Jamaica, where he developed an early appreciation for environmental stewardship while witnessing the power of business to drive positive change.

TERREPOWER (formerly BBB Industries) has been pioneering remanufacturing for four decades, but as Mark explains, their approach goes far beyond standard practices. Sustainable manufacturing considers the entire lifecycle—reducing waste, utilizing cleaner energy, optimizing resources, and maintaining rigorous environmental standards throughout the process. The impact is substantial: approximately 160,000 metric tons of CO2 avoided annually through their operations.

The conversation takes a fascinating turn when exploring electric vehicles and the challenges they present. While EVs have significantly fewer moving parts than traditional vehicles, their batteries represent both an environmental concern and a tremendous opportunity. TERREPOWER has positioned itself at the forefront of sustainable battery remanufacturing, addressing one of the most pressing environmental questions in the EV revolution.

What makes this discussion particularly compelling is the clear business case for sustainability. Mark articulates how reducing waste leads to more efficient manufacturing, how lowering carbon emissions saves on fuel costs, and how sustainable products increasingly appeal to environmentally conscious consumers and investors. This alignment of environmental and financial interests creates powerful momentum for positive change across the industry.

Whether you're a business owner looking to implement sustainable practices, a consumer curious about the environmental impact of your vehicle, or someone passionate about the intersection of business and sustainability, this episode offers valuable insights into how the auto care industry is helping shape a more sustainable future.