Archive for March, 2010

by Jim Motavalli for BNET, March 18, 2010

I reported yesterday that price was one of the “Seven Barriers to the Electric Car.” Indeed it is, but some states are trying to reduce the economic hurt by offering consumers electric subsidies – in the form of either tax breaks or straight rebates.

The most generous subsidy to date is probably Oklahoma’s, where buyers can get a tax credit worth 50 percent of the purchase price of  an electric vehicle (EV). Some savvy consumers combined the state break with an equally useful one from the federal government to buy electric golf carts and relatively low-cost neighborhood electric vehicles (NEVs), which are cars that can’t go on the highways. Roger Gaddis, who owns Ada Electric Cars in Oklahoma, did the math on an $8,000 vehicle. “The state credit is 50 percent—that’s $4,000,” Gaddis said. “The federal credit on that particular car is $4,400, which makes the car free. Is that about the coolest thing you’ve ever heard?”

It was very cool for Atlanta-based Wheego, which makes NEVs and has sold more than 100 of them (of its 300 to 400 total sales) in Oklahoma. Last September, the state tightened up the requirements somewhat, ruling, “The exclusion includes vehicles that have a body configuration more akin to that of a typical golf cart or go-cart rather than a traditional passenger automobile and vehicles that are principally designed and manufactured for sporting or recreational purposes.” Wheego is still safe.

Then there is California’s rebate, which went into effect early this week. Customers (even those that don’t pay taxes, such as non-profits and government agencies) can get a $5,000 check when buying a standard battery electric car, and as much as $20,000 if they buy electric trucks. The state has allocated $4.1 million for the program.

The state of California is staggering under a $20 billion deficit, and Christopher DeMorro, writing at Gas 2.0, asks, “Are there really enough [electric vehicles] to justify the $4.1 million at a time when many state governments are tightening the fiscal belt?”

That’s certainly a good question. Maybe it would help to explain that the cash payments are coming not from California’s general fund but from revenue siphoned off of Department of Motor Vehicle registration fees. But it’s still state money.

At presstime, the California Center for Sustainable Energy, which is administering the program, said no one had yet applied for the first-come, first-served subsidies, but that may be because so few electric cars are on the market . The $109,000 Tesla Roadster, in fact, is the only roadworthy example on the state’s eligibility list.

The $4.1 million fund will be replenished next year, and by then such more modestly priced EVs as the Chevrolet Volt, Coda sedan and Nissan Leaf will be on the market. As Jay Friedland of Plug In America points out, this would enable consumers to buy cars like the Leaf for something like $20,000, taking into account the federal subsidy.

EV advocates, not surprisingly, called for just such state and federal jump-starts at a Senate hearing last month. They point out, reasonably, that EV prices will only come down with high volume, and that government fleets would be a good start. California’s subsidy will undoubtedly put electric cars into state and local government motor pools.

Here’s a video look at why it could be a good deal to buy a Nissan Leaf in one of America’s greenest cities, San Diego:

http://www.youtube.com/watch?v=0K_DxbK50yg&feature=player_embedded

This story wouldn’t be complete without a special citation of Colorado’s tax credit, which allowed motorists to deduct 85 percent of the difference between the purchase price of their electric car compared to its conventional counterpart. This meant, in practice, that consumers could buy a Tesla Roadster and write off more than $40,000, which is the difference between the Tesla and the Lotus gas car it’s based on. That expired at the end of last year, alas.

Here, courtesy of The Car Electric, are some of the more interesting state tax benefits for owning zero emission cars:

• Arizona: A $75 credit for taxpayers installing EV charging at home.
• California: EVs can ride in high-occupancy vehicle (HOV) lanes without meeting occupancy requirements. In Sacramento, there’s free parking in city lots.
• Florida: Unrestricted access to HOV lanes.
• Georgia: A tax credit good for 20 percent of the EV’s purchase price, or $5,000 (whichever is less).
• Illinois: A tax rebate of up to 80 percent of the vehicle’s cost, or $4,000 (whichever is less).
• Kansas: $2,400 tax credit for vehicles up to 10,000 pounds.
• Louisiana: A 20 percent tax credit for electric vehicles.
• Michigan: Exemption from the annual emissions inspection.
• New Jersey: No state sales tax on EVs; access to HOV lanes; and a $4,000 tax rebate).
• Utah: Free metered parking in Salt Lake City, plus access to HOV lanes.

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Jim Motavalli is the author of Forward Drive: The Race to Build Clean Cars for the Future, among other books. He has been covering the environmental side of the auto industry for more than a decade, and writes regularly on those topics for the New York Times.

Hopes are high for EVs, although some hurdles remain.

by Jim Motavalli for the Daily Green, March 17, 2010

Nobody knows how many people will be lined up at the dealership doors with checkbooks on hand when the new wave of battery electric and plug-in hybrid cars–including the Nissan Leaf, Chevrolet Volt, Coda sedan, Fisker Karma, Wheego Whip Life and BYD E6–enter the market by the end of the year.

It’s a no-brainer that green cars–if they’re produced in sufficient numbers–will be a boon to the economy, and a rare lift for American auto manufacturing. A new report issued Tuesday by the Center for American Progress, the United Auto Workers and the Natural Resources Defense Council concludes that new vehicle technology could create as many 150,000 U.S. jobs (whether they’ll also be unionized is anyone’s guess).

Many of those jobs will flee overseas, the report says, unless the Department of Energy continues to subsidize car and battery plants on American soil. “We want to reduce carbon pollution and many unemployed people want to return to work, and building better cars can help with both,” said Peter Kehner, executive director of NRDC. The report estimates that the U.S. could capture as much as 75 percent of the “total technology value” (and the same percentage of job benefits) from the new green cars.

Any potential for job creation, of course, is tied to the size of the market for green cars. Several players in the emerging EV industry, from suppliers and auto companies, testified in a little-noticed Senate hearing in February, talking about what could be “a very significant demand gap,” as Mary Ann Wright of battery maker Johnson Controls described it. She said the worldwide capacity to build EVs by 2015 could be four million vehicles, but there might be demand for only two million.

The solution, as the suppliers saw it, was for the federal government to step up in the short term and not provide start-up capital for American plants, but actually buy large fleets of green cars. “These fleet programs are a great way to stimulate demand,” Wright said.

Federal buy-in is indeed important. The green car market could be slow to develop. “I think pure battery EVs have a relatively limited market,” said David Cole, chairman of the Center for Automotive Research. “There’s a lot of range anxiety. You have to fill the back seat and trunk with batteries to create a long-range vehicle.”

Other barriers to widespread adoption besides range anxiety include high purchase prices (Corolla-sized and appointed cars will cost $40,000), sheer unfamiliarity with new technology, and a lack of dealer networks (at least for the startups). The federal $7,500 tax credit for battery cars will help with the former issue. And their advantages in dealerships will help Nissan and Chevrolet gain market share.

There are a number of surveys that measure potential EV sales in the early years. IHS Global Insight sees three scenarios with the most optimistic (51 percent of the market for battery EVs and plug-in hybrids in 2030) depending on an activist federal intervention in the market. “Business as expected” (ie, limited federal help) gets us to 20 percent market share by that date.

A recent Deloitte survey also sees three possible outcomes, with a conservative volume (again, of both battery cars and plug-in hybrids) amounting to 1.9 percent of a 15 million U.S. car market in 2020, or 285,000 cars and trucks. In 2015, the conservative view is that only 45,000 cars would be sold, making up just .3 percent of the market. The “aggressive” scenario has green cars with a 5.6 percent market share by 2020 (840,000 sold). Deloitte’s key takeaway: “Due to barriers such as battery cost and gas prices, adoption will be slow for the first three years, but will pick up as battery costs decrease.”

Ending on an optimistic note, there’s the report from the University of California at Berekley’s Center for Entrepreneurship and Technology last November. It says EVs could account for 64 percent of light vehicle sales in the U.S. by 2030 (when they’d be 24 percent of the cars and trucks on the road). That’s certainly encouraging. The report uses the phrase “electric cars,” and doesn’t clarify if that includes both battery cars and plug-in hybrids.

by John Voltz for Cleantech Blog, March 2, 2010

Recently, I made a small diversion from my walk to the office in San Francisco and took a ride in a Wheego. The Wheego was being showcased at Justin Herman Plaza right across from the Ferry Building not far from my office in the heart of the city’s Financial District. The Wheego is a brand new all-electric car from an interesting manufacturer in Georgia. Locally, the Wheego is sold at Ellis Brooks Auto Center. This intrigued me. Ellis Brooks is a venerable car name in San Francisco, having been around for 40+ years. I still remember their radio jingle from my childhood, “See Ellis Brooks today for your Chevrolet, corner of Bush and Van Ness . . .” The Ellis Brooks dealership now sells pre-owned cars and is no longer associated with GM. It has just begun selling the Wheego. Before I took my test drive, I had a chance to talk to Ellis Brooks’ grandson, John Brooks, about why they decided to sign up with Wheego. He seemed comfortable with the manufacturer in large part because the car was assembled from components made by manufacturers already in volume production of vehicles.

So how was the ride? Pretty good. It was quite roomy with a nice, quiet ride and a firm feel of the road. Allowing for the fact that it is a small two-seater coupe, it had the feel of real a car – not a golf cart or an experiment.

Now I should back up for a minute and explain that I have long been a skeptic that there will be significant adoption of all-electric vehicles any time soon. But this car changed my mind a bit.

My skepticism about this has been based on looking at the passenger car market and thinking about what it takes to succeed in that market. Then I compared the passenger car market to other potential electric vehicle markets.

Passenger cars have been the province of integrated high volume manufacturing, low margins, very high quality expectations (especially fit, finish and amenities), and very high service and support expectations. In short, the barriers to entry for this market seem quite daunting, especially when compared to the delivery truck market or the ATV market. These markets have significantly lower volumes, less integrated manufacturing (many manufacturers are essentially final assemblers), much lower quality expectations on fit, finish and amenities, and lower service and support expectations.

There are some low-volume passenger car manufacturers, but all make vehicles aimed at high priced specially markets, not low to mid priced daily drivers.

There is another big difference between the passenger car market and the delivery truck market – what delivery truck buyers want fits really well with what electric vehicles do best:

• predictable low to medium mileage daily duty cycle
• low noise
• excellent torque
• low total cost of ownership

With an electric delivery truck, you don’t need to worry that you’ll ever need to drive from San Francisco to L.A. to visit your sick aunt. In fact, for commercial trucks, limited range can be a plus – there’s no way for trucks to wander very far. With passenger cars, limited range is a big reason not to buy.

Given this, I have felt for some time that we wouldn’t see significant adoption of all-electric vehicles until we started seeing real traction in markets like delivery trucks. I expected passenger cars (and delivery trucks too to some degree) would likely first go hybrid, then shift the hybrid balance to more electric (e.g. using fuel to run a generator to extend the electric range), and then later shift to all electric. These successive market advances would be linked to gaining manufacturing scale, cost down of batteries and other components critical to all-electric vehicles (though batteries is the big one).

My Wheego ride today and my chat with the dealer changed my view. Here was an all-electric car, at a regular car dealer, with a high but regular car price, from a car manufacturer that nearly appeared out of thin air. You see Wheego as a manufacturer is just a final assembler. From my initial quick look, Wheego came on the scene as a passenger car player in 2007 or so, backed by the former founder of MindSpring. Before then, it was exclusively an electric golf cart manufacturer. So it’s really been an eye blink in automotive time scale (2007 to 2010) to see cars turning up at dealerships. Granted, the model at dealers today and the one that I test drove is just a medium speed vehicle (MSV) with a top speed of 35 MPH and not for highway usage (more on that later). But this was still impressive to me.

Wheego gets the car bodies from a big manufacturer in China (a body that is currently used for gas drive cars in other international markets). It gets its motors from a Wisconsin electric motor manufacturer and its motor controller from Curtis Instruments who makes controllers for forklifts. Maybe the truck style manufacturing could work for passenger cars after all.

In addition, I began to think about the current passenger car market for all-electrics. There probably is a significant market for all-electric vehicles, even in the current economy, and even if they aren’t strictly ‘economic’ on a dollar per mile basis compared to gas or hybrid cars. Think about how much the early EV1 cost in its day[1], and how people still rave about it years and years later. In my revised view, I think there will be a small but significant true believer market in the U.S. for all-electric cars. Yes, the big boys are coming – Nissan with the Leaf, Chevy with the Volt, Ford with the Focus EV, but not for a year, maybe two, maybe more. In the mean time, the true believer market will be served by the likes of Wheego, Think, Smart, and others. Even after Nissan, Chevy, Ford and other big car companies arrive in the market, the early entrants may have continued success. Plus they may have customers and EV infrastructure that car manufacturers with non-existent, dormant, or failing EV programs may look to acquire. There is no substitute for firsthand customer knowledge.

The Wheego I drove was a medium speed vehicle (MSV) with a max speed 35 MPH and a real world range of 40 miles. The highway speed version is on the way – due to arrive this summer. It is currently undergoing NTHSA cash testing. It will have a top speed of 65 MPH and a range of 100 miles. The high speed vehicle (HSV) Wheego will not be a lot different than the MSV. Differences include: lithium ion batteries, airbags, and some additional structure supports to the body.

I now see the all-electric car market developing from two converging paths – the true believer all-electric passenger car market and the more economically driven all-electric truck and fleet vehicle markets. The true believer market will drive visibility and customer expectations, and provide valuable real world feedback about what electric car consumers care about and will pay for. While the truck and fleet markets will help dive down cost, I expect both will speed the adoption all-electric cars to a significant portion of the passenger car market.

So for you true believers out there, price before incentives for the MSV Wheego is ~$19K (and it’s eligible for a 10% Federal tax credit) putting the MSV price around $17K before any state or local incentives. Prices for the HSV have not yet been announced, but the target price is in the $30K range (and it will be eligible for a $7500 federal tax credit) putting the net cost of the HSV before state and local incentives in the roughly in the mid $20K range.

The moment of truth is coming for electric vehicles. Will the Wheego Whip Life be ready?

by Jim Motavalli for The Daily Green, March 5, 2010

ATLANTA–We’ve reached the make-or-break point for electric vehicles. As many as a half dozen different models will be on the road by the end of the year, and when it comes right down to it we have no idea if people will line up to buy them.

There are several big hurdles, including price (EVs will be significantly more expensive than we’re used to — small two-seat cars will start around $25,000), unfamiliarity (people will be plugging in at night, instead of going to the gas station) and range anxiety (most of these cars will go only 100 miles between charges).

Last week, I talked to Mary Ann Wright, managing director of the business accelerator at major battery maker Johnson Controls (they’re supplying lithium-ion packs to both the BMW and Mercedes-Benz hybrids), and heard about the “EV gap.” She said the industry worldwide has the capacity to produce four million cars, but the actual demand might be only two million.

Wright was among several witnesses at a Senate hearing last week asking the feds, specifically the Department of Energy, for help closing that gap — with one popular concept being the mass purchase of EVs for government fleets, which could include more than a million vehicles. It makes a lot of sense, particularly because fleet cars come back to central depots that make recharging a cinch.

Wright also told me that EV costs will come down with desperately needed volume. “Scale won’t get us all the way, but it is going to be a significant driver,” she said.

I thought about all this in Atlanta, where I had the opportunity to be the first journalist to drive the Wheego Whip Life, an unusual name for a tiny, Smart-like two-seat battery EV with a 90-mile range and the need for an overnight charge. The Life, built by a small company (really small, I’m talking five employees) whose previous entries were neighborhood vehicles incapable of highway travel, could be on the road as early as June. That would make it probably the second EV on the road after the Tesla Roadster — and, at $32,000 (before a federal $7,500 income tax rebate), the first EV intended for a mass audience. The Wheego was great fun to drive, reasonably fast, offered exceptional handling and a tight turning circle, and was unearthly quiet. Here’s a closeup look on video:

http://www.youtube.com/watch?v=7ZliW06ya2M&feature=player_embedded

Mike McQuary is a brash serial entrepreneur who built the Mindspring ISP into a major force (before merging it with EarthLink), and now heads Wheego (as well as a record company, Brash Music). He says he’ll be happy with sales of only about 2,000 in the first year. EVs are an unknown in the marketplace he says. With luck, his car will survive crash testing and he’ll have 50 dealers in place by the summer. But will people plunk down what is effectively $26,000 (after the rebate) when, say, a Toyota Yaris offers familiarity and four seats for $13,000?

The cost of operating an EV is considerably less than a gas car, a few cents a mile compared to 25 to 40 cents. And we shouldn’t “mis-under-estimate” (I just heard Simon Cowell say that) people’s willingness to do the right thing when it comes to the environment, because EVs are as green as they come. Even when the electricity comes from coal plants, they’re far kinder to the planet than even a fuel-efficient gas car.

Cars like the Wheego are cute, too, and people like being early adopters of earth-friendly technology. Perhaps it will surprise everyone and become a green fad car. The Smart was definitely that, but unfortunately it didn’t last. The Mini (being tested in EV guise as the Mini-E) is showing more staying power.

“The more I researched electric vehicles, the more I was convinced that they would have a comeback and become a lasting part of the transportation industry,” said McQuary. “When you look at where we were 15 years ago with cars like the EV-1, it’s plain the technology has improved. We have battery breakthroughs, better onboard chargers, smarter hardware overall. At the same time, we’ve had a huge movement toward environmental consciousness, driven by Al Gore’s An Inconvenient Truth. People are more aware of the global consequences of climate change, and are willing to do something about it.”

Luckily, doing something about it might just include buying a Wheego Whip Life, a Chevrolet Volt, a Coda sedan, a Fisker Karma or a Nissan Leaf. Carlos Ghosn, CEO of Nissan, is in Geneva tonight, and he’s optimistic. “The numbers are big,” he said. “I think there’s going to be a need for new capacity… We may have to rush to build capacity for cars and batteries.” Of course, he also said his Nissan Leaf was going to be “the only one on the market” in 2011, and he might have some argument there.

by Jim Motavalli for BNET, March 3, 2010

Can an electric vehicle startup with just five employees find success in the cash-intensive, cutthroat automotive world? Maybe, if the five people have deep business experience, a savvy marketing sense and a compelling product.

And that just might be the case with Atlanta-based Wheego, which will get a highway-capable electric car on the road as early as June, ahead of Fisker, Coda, Think, GM and Nissan. If the two-seat lithium-ion battery car passes crash tests, it will be on sale for approximately $32,000 at (the company hopes) 50 dealerships across the country.

I was the first journalist to drive the car, known as the Wheego Whip Life, on the snowy streets of Atlanta. I enjoyed the quiet, squeak-free operation, the ultra-tight turning radius, and the nicely appointed (but not luxurious) interior. Like most EVs, the car features very quick acceleration, but this one also exhibited good regenerative braking response and generally good ergonomics. I experienced some wheelspin, a factor both of the wet roads and the light front end;  the company plans to address this by  moving the heavy battery pack forward.

The Life is a variation on a Chinese-made gasoline car (with a strong styling parallel to the Smart fortwo) called the Noble, which has not been a big success. For that reason, when Wheego CEO Mike McQuary came calling at the Shuanghuan factory two hours outside of Beijing, the management was ready  to make a deal to convert the Noble to battery power.

The cars are assembled in Ontario, California at Hi Performance, and the 28-kilowatt-hour lithium battery packs are made by Flux Power in Escondido, California. The electric motors (60 peak horsepower) are supplied by Leeson, a division of Regal Beloit in Wisconsin.

The Life will has a range of 80 to 90 miles , and a top speed of about 67. It’s a logical extension of the low-speed vehicle (LSV) version of the Whip, which looks much the same but is speed-governed to 35 mph and is not allowed on interstates. Despite these restrictions, Wheego has managed to sell almost 300 LSV Whips—many in the state of Oklahoma, where a combination of generous state and federal tax credits meant that, until January 1, consumers could buy them for an astonishing $2,500.

“Our ambition has never been to be the biggest and sell the most,” McQuary said. “We’re trying to create an affordable, best-in-class electric car, form a community and have a dialogue with our drivers [who already get regular newsletters].” He said the company would be satisfied if it sells 2,000 Wheego Whip Lifes in the first year.

http://www.youtube.com/watch?v=qtSfqnEUs5M&feature=player_embedded

McQuary is anything but an auto industry lifer.  He has an interesting back story. He joined Mindspring in 1995 and stuck with it through a merger with EarthLink in 1999. The combined entity became the second-largest national ISP behind AOL, with McQuary as president. As he tells it, he left EarthLink after failing to convince the company to start an online music store to service what became Apple’s iPod. McQuary founded Brash Music, an independent label, in 2002.

McQuary brought two of his Mindspring/EarthLink colleagues over to Wheego, a spinoff of Ruff & Tuff Electric Vehicles (which makes plug-in ATVs in the $7,000 to $13,000 range). McQuary also brought in Jeff Boyd as president. Boyd is an experienced auto executive; he is a veteran of Roger Penske’s company and Miles Electric Vehicles, which is launching the Coda battery sedan later this year.

“We are running a very lean operation that allows us to put most of our money into R&D and technology instead of overhead,” Boyd said. “An advantage of our size is that we can be extremely nimble, but the car will have to stand or fall on its own.”

According to Boyd, Wheego will follow the Life with a small four-door crossover SUV in 2011, a utility truck for commercial use and fleets in 2012, and a sports roadster in 2013. The goal, he said, is to keep the price below $30,000 (before tax incentives) for all the models.

Photos: Jim Motavalli

Jim Motavalli is the author of Forward Drive: The Race to Build Clean Cars for the Future, among other books. He has been covering the environmental side of the auto industry for more than a decade, and writes regularly on those topics for the New York Times.

by Jim Motavalli, Mother Nature Network, March 3, 2010

Wheego is a very lean operation, with just five employees. Their new highway-capable electric car can get 90 miles on a charge, will be available this summer, and will sell for $32,000 — but there’s a $7,500 federal tax credit.

Virginia’s Evatran is talking up a trial in Wytheville, Va. of its Plugless Power brand “hands-free” proximity charging system for battery electric vehicles plug-in hybrids. “We recognize that convenient charging of electric vehicles is essential to their volume acceptance,” Evatran cofounder and sales and marketing director Rebecca Hough says in a release. The inductive hardware, which can be fitted to  existing EVs, allows contact-less charging for an EV charging regime “that is convenient, universal and reliable.” The EVs keep their cords for conventional charging when needed.

The trial is to include at least five EVs, including three Wheego Whips, one operated by the Trinkle Mansion, a Wytheville bed-and-breakfast. The Plugless Power charging system will be ready for full-scale production by late fall of this year, Evatran says.

Evatran is a unit of Wytheville-based MTC Transformers.

Evatran, co-founder Rebecca Hough, 276-620-3196; rhough@evatran.com; www.pluglesspower.com

Wheego, Les Seagraves, 678-904-4795; les@wheego.net; wheego.net

Trinkle Mansion, Patti Pizinger, 276-625-0625; trinklemansion@aol.com; www.trinklemansion.com