Can You Fund a New Electric Car Company and Be Financially Successful?

Obviously the answer is Yes you can fund it, but this is not an easy task, we know that and are still working to fund our company.
But what goes along with this is” “Can you be financially successful?” What is financial success? I define it as a sustainable business that makes money for the stakeholders and the company to survive for the long haul.
Success has been scarce and we will talk about this further.

Let’s talk about our company as a case study. EnVironmental Transportation Solutions develops and markets an urban based electric Low Speed Vehicle. We will manufacture a road-worthy commercial fleet vehicle for under $10,000. We are different from many electric vehicle companies. We require only a modest investment of $5M – ½ is equity and ½ is debt to expand our manufacturing capacity, we breakeven on a mere 1,050 units annually, we have a realistic marketing plan that targets commercial fleet users who are hungry for EcoV, and we have an experienced management team that can put EcoV into production in 9 months. We are changing the rules in niche vehicle manufacturing.

For the Low Speed Vehicle market we are changing the paradigm, as are a few others, no longer is a LSV a dual purpose vehicle to use to play golf and drive on restricted access public roads in a closed community, but now EcoV is a daily driver that can be used on all public roads, 35 mph and slower and feel safe and comfortable driving it. Furthermore, EcoV is available in 4 and 6 passenger versions with a rear seat that easily converts into a utility vehicle or a 2 passenger pickup, all with a 1000 pound payload capacity. And we will do Factory customization for our customers.

But we have NOT got funded yet! At least in Michigan, we have fallen on deft ears.

Let’s talk about three types of EV companies: 1.) Non-EV Start-ups; This could be the Daimler Chrysler – GEM or GM EV1 , 2a) EV’s not like EcoV and there are several here, Feel Good Cars or Tesla are two current examples; and lastly, 2b.) EV’s like EcoV. We will talk about our experience, efforts and results.

Category 1: Non-EV Start-ups – these are companies in business today with products; they have assets, sales and a positive bottom-line. They need funding to expand into new products. Being an existing company is a huge benefit. 90% of all start-ups fail in first 5 years. Many investors stay away from start-ups for many reasons. If you are an existing company there are many State Economic Development Funds that will provide funding to expand, if you have sales and positive income, this opens opportunities for debt financing, there are private investors who feel more comfortable investing in these companies because of past success, and lastly the companies may be large enough to self fund the technology development and manufacturing start-up themselves.

Category 2a: Companies not like EcoV – Most start-ups believe they have a “great idea” or new “twist” on an existing concept that launches their quest to create a business. You need much more than a great idea, you need a strong management team with diversity of skills and experience in “the business” to make it happen. It has been said many times that it is better to have a first-rate management team with average technology than first-rate technology with a second-rate management team. First-rate management teams are more likely to succeed. The start-ups need passion about what they are doing and how they are doing it. This passion keeps the process going, and going, and going. It sounds exciting to be the underdog challenging the Big Dog with the new technology.
Some of these companies enter the new business with a very sexy product that sounds exciting and almost too good to be true. I have found that what sounds too good to be true, usually is. These companies have the potential to raise capital and with the right publicity, usually do. But do they have more than a sexy product or idea? Time usually tells all.

Category 2b: Companies like EcoV – EcoV is a product that is not very sexy. It is practical and useful to its mainstream customers, particularly fleet users. It uses mostly proven off-the-shelf current technology production components; no sex appeal there. It’s only Intellectual Property is the company trade secrets about how to do what has been done. It is about how to integrate systems, how to find the right suppliers, how to design around existing parts and systems, how to use and adapt existing auto industry standards, how to understand customer usage cycles and abuse issues, how to put in expected and unexpected safety features, how to find the right partners to take the product to production, how to control overhead costs, how to market and sell the product in early, mid and late years, and how to make money in the business. EcoV sounds like same old, same old, but it is not. Being successful in automotive in low volume niche business is a major challenge not understood by many.

The challenge is a reflection on the issues facing the transportation business in alternative energy. CleanTech, an organization assisting in investment opportunities in clean technologies and alternative energy, has indicated that only 4% of the invested money has gone into the Transportation business sector. This puts into perspective the challenge businesses have to fund EV companies.

I believe that beyond the “idea” is the need for an experienced management team that can superbly execute the idea. Having been in automotive for 35 years and having put into production many cars in North America, I realize that the automotive business is not as simple as it sometimes appears. Yes, there are now 60,000,000 vehicles being built worldwide per year, so how hard can it be? Just look at the failure rate of companies doing electric vehicles. Opportunity is the start of the maze, but it does not define the path to success.

Who is Richard Marks? Why is EcoV different? How do we find the needed investors?

I have been in automotive for 35 years. I spent 25 great years with General Motors learning the in’s and out’s of automotive design and production. I spent my last 5 years with GM’s Electric Vehicle program, EV1. I left GM in mid-96, realizing that I was far more committed to the battery electric drive technology than GM. I worked for a couple Tier 1 suppliers and then about 4 years ago, I start down a path to do my own EV. We started with a Low Speed Vehicle, because, by automotive standards, it is much simpler to do than a standard automobile because of the safety and vehicle testing required. We saw the opportunity to start with a LSV, build an organization and team, get profitable, and then move into a standard EV later.

Our management team is built around the automotive knowledge base in Detroit. My management team of 7 automotive executives is powerful because we bring extensive auto experience in all areas, bring start-up and funding experience, can build EcoV cost effectively with automotive quality, and can market and sell EcoV. Despite what people outside of Detroit think about the auto companies in Michigan, we don’t live in caves with wood burning forges building cars. I believe that the electric vehicle will come to market from outside of mainstream, but by automotive & EV experienced people. There is just too damn much to learn on the path to execution that amateurs outside of the auto industry will need to learn. It can be done, but the mistakes cannot afford to be costly ones.

What is EcoV?
EcoV is a 25mph street legal electric Low Speed Vehicle that is road-worthy with automotive ride, comfort, durability and reliability that offers a safe driving experience on daily trips on public roads 35mph and slower. EcoV is to be built in USA in Detroit, MI.
For 50 cents of electricity out of a standard wall outlet in less than 8 hrs is completely charged and ready to go another 25-40 miles day-in and day-out.
EcoV comes in 3 models each with a 1000 lb load capacity. There are a 4 and 6 passenger models with a rear seat that converts into a utility load floor easily, and a 2 passenger pick-up truck.
There are many Factory installed options available to make EcoV exactly the way you need it or want it. There is right-hand drive, extended range, air conditioning and heat for extreme climates, and many more options. EcoV is technology neutral and can be updated easily to new affordable technologies.
EcoV has changed the Low Speed Vehicle paradigm. EcoV also changes the rules on how to do niche vehicles.

Who wants it and why?
The first market is fleets. EcoV is a street-worthy commercial fleet vehicle for under $10,000. Fleets are hungry for the operational cost savings EcoV provides in city operations..

Fleets market size: 17 M new cars and trucks sold per year (2005). 3M were sold to fleets, and of those 200,000 do not need to go faster than 25 mph and could be low speed vehicles.

Fleet applications: First fleet market is electric utility companies who desire to have vehicles which use their “fuel.” Fuel provider fleets are mandated to purchase 90% Alternative Fuel Vehicles by EPAct 1992 and to reduce consumption of oil based fuels.
DTE Energy is signed up to test next year.
From there we springboard to government fleets, as Federal Fleets, State Fleets, and municipal fleets. They are mandated to purchase 75% alternative fuel vehicles and reduce oil based fuel consumption.
Cities of Ann Arbor and Grosse Pointe Woods, MI are signed up to test next year.
University of Michigan Dept of Public Safety is signed up to test next year
Detroit Department of Parking Enforcement is preparing to test next year.
US Postal Service is going to test next year as a carrier route vehicle in city and urban areas.
Commercial fleets such as delivery services, vacation rentals, city rental vehicles, hotels, resorts and community transportation services, transportation vehicles at theme parks, for sales at Master Planned Communities and for maintenance are retirement communities.
This is a realistic approach to starting a new company. Furthermore, after commercial validation and profitability, we will expand into the even larger private use market. This includes everything from baby-boomer Master Planned Communities to urban families.

What about finding investors to date? Our country has great belief and faith in entrepreneurs bringing new ideas to market and creating jobs in America. Yes, start-ups can do that but can they get funded? Funding commercialization projects is a limitation in our system. Government funding stops at the commercialization stage. Why? Is it because over 90% of start-ups fail? Is it because our short term thinking overwhelms our ability to think long-term? I don’t know the answer, but it must change. Investors need to think longer term and similarly politicians need to think long term as well. If it is something needed for the future, you better start investing in it today, because successful start-ups don’t happen overnight when the crisis appears.

What have we done to date? Since the beginning of this year, we have been working on the funding. .

We put together a plan of attack of where the investors identified were.
Corporate Consortiums
Individuals
Fleet Buyers
Bank Venture Funds
Philanthropic Organizations
Utilities
Environmental Groups
Utilities Venture Funds
Other Vehicle Companies
Suppliers
Pension Funds
Unions
Corporate Venture Funds
Federal Government
Venture Capital Groups
State Government
Angel Investors
City Government

We have been networking for 4 years but that is only a start.
We have applied for State economic development money but were written off because of other companies that tried LSV’s and failed.
We have approached local electric utility companies thinking this would be great for them to support. We are not done exploring that opportunity yet.
We have approached customers who could have a large use for our product but were told they did not want it. We have not got to the right people yet.
There are numerous Government agencies who should be very interested in saving money by using our product in their city/urban/military base applications, but we have not got to the right people. Who are they? What more could our Government want but to reduce dependency on foreign oil, create jobs in America, provide alternative fuel vehicles that are simply clean, affordable, and have available fuel infrastructure.

We have mentioned numerous fleet customers who have driven our early prototype and signed up to test EcoV next year when we start production. Fleet customers are not typical early adopters, they are more mainstream buyers who have a work job to do and want to be sure what ever they buy, it does the job. We will let them test EcoV with confidence they will place orders afterwards. To date, they are skeptical because of all the previous deficient products and will not make any commitments for future purchases.

So where does this leave us. We need your advice and assistance to access to your network. We need to reach the people you know. We need you to provide us introductions to EV interested parties. The EV industry will need to work together if it is going to be successful.

For the Future: The public does not understand what EV’s have to offer them. It is a major disruptive technology for a lot of industries including automotive, but for the consumer EV’s represent an exciting opportunity to move into the future of transportation alternatives. Public policy needs to provide incentives to encourage EV’s and take away incentives that don’t encourage EV’s – why do we count flex-fuel vehicles as AFV’s when most only burn gas?..tie it to actual ethanol used. I personally believe that if we can get the public into solid and sound EV’s, the public will demand the OEM’s build more of them. This is working with hybrids, and starting to work with plug-in hybrids. The public is starting to demand they be built and offered. No OEM will deny the public what it demands, no matter how much they drag their feet. GM announced a couple of weeks ago that it will show plug-in hybrids or series hybrids at LA and Detroit auto shows as a step towards electrifying their entire fleet. Is it for real or is it Johnny-come-lately to be more popular by being fuel efficient with environmentally clean vehicles? Time will tell.

EcoV is simply elegant by being elegantly simple. We offer a practical, affordable application of current technology. EcoV will change the way transportation moves us!
We need your help & advice on how to get our company rolling! Pleased contact us. Thank you.

The World is ready for a road-worthy Low Speed Vehicle

What is a LSV?
A Low Speed Vehicle is a Federally defined class of street legal vehicles that must go at least 20 mph but no faster than 25 mph. They are smaller and are limited to 2500 lbs GVW. They are required to have a number of safety features, such as head lamps, tail lamps, turn signals, brake lights, side reflectors, seat belts, approved automotive windshields. Over 45 States allow LSV’s on public roads 35 mph or slower. They are desirable since they can offset the use of a larger gasoline powered vehicle.

What is new?
The original intent as written in the Federal Register in 1998 was “This final rule responds to a growing public interest in using golf cars and other similar-sized, 4-wheeled vehicles to make short trips for shopping, social and recreational purposes primarily within retirement or other planned communities with golf courses. These passenger-carrying vehicles, although low-speed, offer a variety of advantages, including comparatively low-cost and energy-efficient mobility. Further, many of these vehicles are electric-powered. The use of these vehicles, instead of larger, gasoline-powered vehicles like passenger cars, provides quieter transportation that does not pollute the air of the communities in which they are operated.”
Hence the original paradigm was for a dual purpose vehicle to play golf in and to drive on restricted access public roads. The new paradigm that EcoV establishes is a road-worthy daily driver, which can be used on any public roads 35 mph or slow and feel safe and comfortable driving EcoV.
What is the history in this market?
The history of neighborhood electric vehicles probably started in Florida, Arizona, and California. In retirement communities, people needed a low cost transportation solution. Used golf carts were inexpensive and available, so they were purchased. People started to use them in more and more ways, including driving them on public roads where they could get away with it. Many closed communities allow golf carts on city streets. Then people started to modify them to go faster. This is not difficult to do, but if not done correctly will lead to problems with over-heating and poor performance on hills or under load.
In 1997 the National Traffic and Safety Administration released a proposed rule making standard for Low Speed Vehicles. In 1998 the final rule was published. This is referred to as FMVSS 500. Neighborhood Electric Vehicles were not specifically defined in the standard.
California Air Resources Board had previously set requirements for Zero Emission Vehicle (ZEV) sales in California. Originally it was set to reach 10% of the OEM’s sales volume. The OEM’s dragged their feet and the rules were relaxed. In 2000 CARB proposed to let LSV’s be counted as full ZEV’s and have in addition a multiplier as was being offered to get the OEM’s to set up. For 2001-2002, all LSV’s “sold” would get 4 credits. For 2003 it would drop to 1.25, and in 2004-2005 drop to 0.625, followed by 2006 and on when it dropped to 0.15. This created a huge incentive for the OEM’s to get into LSV’s. Chrysler bought GEM at end of 2000 and took all of the credits they had already collected. Because of the impact of producing higher volumes of electric vehicles, ZEV credits were going to be traded on open market. New companies coming in to build EV’s would get credits that they could sell to OEM’s. This created a lot of new entries trying to make money off the rule changes. As a result the value of credits was high enough that the market was stimulated. In the meantime Chrysler and GM took CARB to court over the whole ZEV issue and in 2003 won the suit and the mandate was cancelled. CARB and the industry move towards fuel cells which were at least 10-20 years off.

What is and has been in this market?
Golf Carts (2005):
New and used golf carts accounted for 620,000 units. There were 371,000 units to the non-fleet market; 150,000 new & 221,000 used. Fleets, mainly private golf courses, bought 253,000 new golf carts. Since golf course fleet sales are so strong, competitive, and important, golf carts are optimized for lowest possible cost to meet 2 rounds of golf per day for a 3 year life span. Used golf carts require major refurbishing or rebuilding before they are re-sold. Electric carts now out sell gas versions.
Club Car Precedent golf cart – $6786 (2004 price)
StreetRod Productions - golf cart chassis – customized - $16,999

Neighborhood and Low Speed Vehicles (2005):
Neighborhood Electric Vehicles (NEV’s) – are not necessarily Low Speed Vehicles (LSV’s). All LSV’s are street legal. In 2005 it was estimated that between 5,000 and 5,500 LSV’s & NEV’s were sold in US.
Global Electric Motorcars (GEM) is a wholly owned subsidiary of Daimler Chrysler. It is estimated that sales were 4,500 to 5,000 units last year. They have 37 dealerships listed on their website nationwide, including Hawaii. GEM is the largest selling make of LSV.
GEM e4 starts at $8,995 as shown with doors $14, 300
Dynasty sold about 75-100 vehicles last year. They are struggling and were bought out of bankruptcy a couple of years ago.
Dynasty – base price about $13,000
Western Golf Cart Company
Western sells golf carts and some offer NEV packages; they also sell the Lido which Lee Iacocca put into production back in late 90’s and Northern built for his company.
Western (with NEV pkg) as shown $12,959 start about $7,500
Lido base $13,000; woody $15,800; no doors available
Feel Good Cars – ZENN (zero emission, no noise) is being offered by a Canadian company who is not in production yet, but will receive “gliders” from French MicroCars and convert to electric in Canada. Only available as two seater.
Miles Automotive – owned by Tianjin Xiali (Tianjin-Qingyuan Electric Vehicle Co), a subsidiary of the First Automobile Works in Tianjin, China. Miles and Tianjin plan to offer and sell standard electric vehicles. To meet LSV requirements, the ZX-40 which is a 6 passenger micro-van is only rated to carry two people to stay under the GVW requirements of FMVSS 500.
ZAP is no longer offering LSV models, but is offering a motor-cycle (three wheel) class vehicles. ZAP has offered two types of LSV’s before (one a French micro-car and one a Chinese micro-car) but apparently could not deliver them(?).
ZAP – Xebra, priced under $10,000 with max speed 40 mph and range up to 40 miles

Subcompact Standard Cars; (note all of these are equipped with 4 doors, automatic transmissions, and radios; all have A/C as part of model with A/T available; destination charges not included)
2007 Hyundai Accent – GLS 4 dr. base price $12,565 (A/C & radio)
$1,000 A/T
$13,565 Total

2007 Kia Rio – LX base price $12,695 (A/C & radio)
$850 A/T
$13,545 Total

2007 Chevrolet Aveo – LS – 4dr – base price $12,515 (A/C & radio)
$850 A/T
$13,365 Total

Has Beens, now gone:

Bombardier NEV; circa 2000

Ford Th!nk Neighbor built in 2002

Lafayette County Car Company; circa 2004

B.I.G. Man; circa 2004

What is EcoV?
EcoV is a 25mph street legal electric Low Speed Vehicle that is road-worthy with automotive ride, comfort, durability and reliability that offers a safe driving experience on daily trips on public roads 35mph and slower. EcoV is to be built in USA in Detroit, MI.
For 50 cents of electricity out of a standard wall outlet in less than 8 hrs in completely charged and ready to go another 25-40 miles day-in and day-out. EcoV comes in 3 models each with a 1000 lb load capacity.
There are a 4 and 6 passenger models with a rear seat that converts into a utility load floor easily, and a 2 passenger pick-up truck.
There are many Factory installed options available to make EcoV exactly the way you need it or want it. There is right-hand drive, extended range, air conditioning and heat for extreme climates, with no significant effect on range, and many more options.
EcoV has changed the Low Speed Vehicle paradigm. EcoV also changes the rules on how to do niche vehicles.

Why is EcoV road worthy?
1. EcoV was designed by experienced automotive engineers who have done many standard cars and trucks. EcoV has automotive ride, handling, and comfort.
2. EcoV uses a tubular steel welded frame and chassis similar to how a race car is built, including a full roll cage. It is light, strong, and easy to repair.
3. EcoV was configured as a small car. EcoV has a high cowl, full automotive safety glass windshield, additional width over a golf cart for stability, doors, and hood with dry lockable storage below. EcoV was designed to be a no excuse, do anything vehicle for use in city/urban areas.
4. EcoV uses 87% current technology, current production automotive and industrial parts. These parts are already proven, durable components. For example, EcoV uses 14” standard highway tires and wheels that are available everywhere.
5. EcoV exceeds what is required by Federal Motor Vehicle Safety Standard 500. In addition we add items like a full hydraulic 4 wheel brake system with independent mechanical park brake, third brake light and our Slow Speed Alert System lights to warn drivers approaching from the rear that EcoV is different and is only going 25 mph.

How does EcoV compare to its competition?

We have a chart that list key customer purchase decision attributes on top and our competitors on the side. Our competitors are golf carts, other LSV’s, and standard cars.

The key customer attributes are Street legal, Safety, Fuel Cost, Low Maintenance & repair, Long Life, Price, and Factory Customization.

EcoV has all the boxes satisfied. Golf carts are not street legal, only EcoV has a full steel frame and chassis which offers more protection than other LSV’s. The electric vehicles clearly have an advantage over gasoline vehicles, for low operation fuel costs. For low maintenance costs only EcoV uses off-the-shelf current production automotive and industrial parts, including standard sealed batteries that do not require watering. For a small sub-compact car used in a city on short missions, on and off operation, they wear out in 5 years. For price, EcoV is lower cost than comparably equipped LSV’s and small standard cars with automatic transmissions.

Who wants it and why?

The first market is fleets. EcoV is a street-worthy commercial fleet vehicle for under $10,000. Fleets are hungry for the operational cost savings EcoV provides in city operations..

Fleets market size: 17 M new cars and trucks sold per year (2005). 3M were sold to fleets, and of those 200,000 do not need to go faster than 25 mph and could be low speed vehicles.

Fleet applications: First fleet market is electric utility companies who desire to have vehicles which use their “fuel.” Fuel provider fleets are mandated to purchase 90% Alternative Fuel Vehicles by EPAct 1992 and to reduce consumption of oil based fuels.
DTE Energy is signed up to test next year.
From there we springboard to government fleets, as Federal Fleets, State Fleets, and municipal fleets. They are mandated to purchase 75% alternative fuel vehicles and reduce oil based fuel consumption.
Cities of Ann Arbor and Grosse Pointe Woods, MI are signed up to test next year.
University of Michigan Dept of Public Safety is signed up to test next year
Detroit Department of Parking Enforcement is preparing to test next year.
US Postal Service is going to test next year as a carrier route vehicle in city and urban areas.
Commercial fleets such as delivery services, vacation rentals, city rental vehicles, hotels, resorts and community transportation services, transportation vehicles at theme parks, for sales at Master Planned Communities and for maintenance are retirement communities.

Private use markets:
There are two major parts of the private use market, first is retirement communities as household’s second vehicle and secondly, urban families as the third or fourth vehicle.

Private use market size statistics:
46M households in 2010, 55 years and older; how many live in the 10,000 and growing Master Planned Communities or retirement communities? Whose second vehicle could be an EcoV?
25 M households today with 3 or more cars. How many could the 3rd or 4th vehicle be an EcoV?

Private use applications:
Car for community errands
High school or college student vehicle
Urban family vehicle for neighborhood errands on public roads
City resident transportation vehicle

Complete product offering:
We provide the complete product offering for a Fleet manager or private buyer. We provide the base product as the start. Then expand to include standard options, service and parts, and lastly factory customization, where we build the product exactly to their needs... like a refreshment truck or Postal truck or personalized vehicle in coral pink with monogrammed seats.

How do we bring new automotive technology to market faster?
Old way is wait for the OEM’s and how long will that take?
New way is to use automotive people to bring new tech forward, but create the demand on the consumer side. When customers demand, the OEM’s must respond. To do this, you need incentives and education on the customer side.
What incentives:
The domestic OEM’s did not want to go to hybrids. Toyota and Honda started to produce them and expand the market. Gas prices, foreign oil sensitivity, and environmental issues raised awareness and made them desirable to purchase. The domestic OEM’s were behind and are struggling to catch up. What drove it? Government put incentives to purchase them, classified them at a minimum performance level to count as a hybrid. California gave hybrids access to the High Occupancy Lanes even with one person. Oh, by the way, the Japanese Government is still subsidizing hybrid vehicle battery prices.

How does this compare to what is being done today to encourage electric vehicles and other alternative fuel vehicles?
There is still a 10% tax credit (up to $4,000) in certain individual private applications. EcoV can qualify for this tax credit.
There are other incentives or subsidies for corn, ethanol, bio-diesel, etc.
But we must stop the foolishness of allowing dual-fuel vehicles to count as alternative fuel vehicles when they only use gas; tie it directly to the amount of ethanol used.
We should allow and encourage LSV's to count as alternative fuel vehicles, which they don't today.

What more could be done?
The objective is to help stimulate awareness of the benefits of electric vehicles.
Low cost incentive issues:
1. Free parking at meters in cities
2. Free charging for EV’s on parking meters, on utility poles in city areas, or in special areas at shopping centers.
3. Free charging at work locations for EV’s
4. Allow parking in handicap spots for EV’s
5. Special designated lanes for LSV’s on public roads, including those with speed limits higher than 35 mph but less than 45 mph.
6. Each State can set its own limits for LSV’s that are operated on non-Federal roads. Maybe allow LSV’s with certain safety equipment to operate at 30 or 25 mph on State roads.

Some cost incentives:
1. Allow free licensing and registration for LSV and EV’s
2. Offer significant reduction in electricity costs for after peak hour operation

Cost (revenue positive) “incentives”
1. Tax on gasoline and diesel fuels to make fuel efficient transportation desirable. Start at a significant tax and raise it every year for 5 to 10 years. Make it stick and use the tax to fund alternative energy solutions, not for pork-barrel pet projects. This is working as oil prices have climbed, but add tax to support developing new energy initiatives to reduce dependence on foreign oil and tie it to who uses the oil based fuel. This works in Europe.
2. Make registration a “use” tax on mileage and miles driven.

Please comment whether you agree or not; we need to have discussions on this.
Thank you! Yes the world is ready for a street-worthy LSV, EcoVElectric!

Who believes GM is serious about electric vehicles?

I hope we get some interesting comments.
I worked for GM for 5 years on the EV1 program. I was there from late 1990 to mid-1996 when I left GM. GM was perplexed between what the Legal people were fighting and the what the technology people were doing. Ultimately the legal people won and the EV1 disappeared. The technical people were not blame free and in part sealed their own destiny because they spent such an extreme amount of money, much was through mismanagement by the leadership. But now Bob Lutz is at it again. Toyota and Honda have embarassed GM in the automotive business with its total lack of regard for the environmental issues facing us. EV's are a disruptive technology and too difficult for GM to handle. So what is Lutz doing? I don't know but I suspect it is all a sham to look good while not doing anything serious. After they killed the ZEV mandates in California, they promised fuel cells and the hydrogen economy were just around the corner. Hydrogen is still a potential, but its future remains very foggy. Most estimates are 10, 20 or 30 years away and many inventions are still needed. How do you generate hydrogen cost effectively? how do you store it (and not lose it) both in vehicles and in storage yards, and at fueling stations, how do you distribute it, and how do you dispense it. What happens to a 10,000 psi storage tank 10 years down the road, particularly when some untrained mechanic starts to take things apart while smoking?
All these issues can be addressed but they all take time and money to do. And who's money will it be? YOURS, you can bet on it.
Then GM jumped on the ethanol, flex fuel vehicle bandwagon. Until cellulosic processes are developed the cost will be too high and unless E85 is 25% cheaper than gas, no one will buy it because it does not pay for the inconvenience of refilling 25% more often. And why in the hell, do the OEM's who sell flex fuel get these qualified as alternative fuel vehicles when almost all are refueled with straight gas? They should be awarded credits not based on the number sold, but on the number of gallons of ethanol put in the vehicles. Same way for flex-fuel vehicles counting as AFV's for fleet's EPACT requirements. Count them if they actually buy and burn E85, but but if a fleets buys 3% E85 and 97% gas, then give them 0.03 credits, not full credit. And tell me why, an electric Low Speed Vehicle which replaces a gasoline vehicle does not count as a AFV? It doesn't. I personally believe the ethanol issue will backfire for GM and others supporting it. And who is going to pay for this? YOU ARE!
But now back to GM's announcement of electrifying its entire fleet of vehicles in the future. They finally realized that fuel cell cars are electric vehicles and the same drive technology works for both. I am dying to see what technology they include for charging. Will they go back to the Hughes inductive charging or use conductive charging? Will they put the charger on-board the car (they should, absolutely!) or will they try to scream wolf again and leave it to the electric utilities' mission to invest in the infrastructure. This failed before and will probably fail again.
I don't think Lutz understand the technology very well. If Li batteries are used and they must be, the high power cells being developed for hybrids are perfect for an EV. Vehicles need peak power to accelerate and that is the same power level that a hybrid requires. The Li batteries are now getting more powerful and still holding the high energy levels required for an EV. GM may over analyze the situation and try something more expensive and ultimately more complex by adding ultra capacitors. But right now Lutz is saying the high energy cells are about 5 years off. Didn't GM say they would be building a 1,000,000 fuel cell vehicles by 2010?
So what will they show in LA next month? The easiest solution is to take a fuel cell Equinox and put in a battery pack. Sure it will run, but then all the excuses will be said about how far off it really is and why it will not meet the needs of all American drivers for years to come. Now, GM is saying they will show a series hybrid electric at Detroit Auto Show in Hanuary. Something about a small diesel generator ICE to charge the batteries so you can drive your 300-400 miles. Work the math and it will say the series engine needs to be able to provide all the energy when the pack gets low. This is all too confusing to a company that builds big V8's and all you have to do is fill it with gas and they know how to do that!
It will be interesting to watch this unfold. What I want to watch is what Mitsubishi and Subaru will show this year. Both have very serious programs going on in Japan to produce and demonstrate full electric vehicles. Both showed vehicles last year at both autoshows and I think they were at EVS23 this year.
Let me know your thoughts on this.
Richard M.
Update Dec. 4, 2006 GM has done their announcement in LA. Who is impressed?
This is a good news, bad news story. For EV people, this is great news. GM coming back to this market with a plug-in hybrid brings credibility to the EV market, which they helped kill. This is particularly good news for the battery people who need a large volume customer to sell to. Bad news is, if GM is not really driven to do it, Toyota will kill them by being faster to market. I believe GM has set-off a horse race for PHEV's. Toyota will bring one to market in one year, mark my words. They are not going to give an inch in this market. GM on the other hand is trying to re-establish itself, but talk will not do it. Only action will do it. GM's strategy is to bring their 2 mode hybrid to production (rear wheel drive, large trucks), then do another one but smaller for front wheel drive (like the Vue). How long will that take? Then, they need to figure out how to get the batteries developed, ready and how much energy to put in. How long will this take? Then they will fight over how to charge their plug-in hybrid. Will it be a conventional 110 VAC outlet plug or will GM still try to push inductive (I hope not). This will be interesting to watch. Nickel metal hydride batteries are just too expensive. Li will be the direction and it will be interesting to see who GM chooses. It will also be interesting to see how Toyota and Japan does this. Panasonic and Toyota are working to together on EV batteries. This makes a very capable and wealthy set of companies who know what they are doing.
I still think GM missed an opportunity to take their fuel cell Equinox and make a real EV out of it. Yes, it could be done quickly and easily, but this flies in the face of California trying to mandate CO2 emissions. GM claims is impossible without making all products much smaller which translate into regulating fuel ecomony, which a State can not do. Around and around it goes. Bottomline: It does not matter what GM does, this is good news for the EV cause. I am excited!