| 777 | Date: Saturday, 30 Oct 2010, 14.21 | Message # 1 |
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| As major automakers pour billions of dollars into electric vehicles and batteries, Rick Woodbury is single-handedly keeping his EV dream alive.
At Commuter Cars in Spokane, Wash., Woodbury is a one-man car company. He formerly had nine employees but had to let them go.
"I'm a one-man team," Woodbury says. "It's a lot of work just trying to get cars delivered to customers. It's a challenge."
Woodbury, a 60-year-old former Porsche-Audi dealership sales manager, sells a skinny 2-seater called the Tango for about $150,000, depending on customer specs. Because his finances are tight, he has no room for error or debt. Revenues from one car get eaten up right away in building the next one. Woodbury has sold 10 cars so far.
Marginal as his operation may seem, Commuter Cars -- and many similar EV startups -- represent an entrepreneurial surge that the automotive industry hasn't seen since its founding days, when carriage makers across the country tried to outfit their rigs with engines.
Think of this band of outsiders as the garage-band rebels of the car business. Although many may not survive, they are bringing new ideas and energy into the closed world of major car companies.
"The smaller entrepreneurial players have really been the ones pushing the envelope," says Oliver Hazimeh, head of the global e-Mobility practice at consulting company PRTM. "You see a lot of white space, opportunities. That's why you have people saying, 'Maybe there's space for me.'"
One key factor, Hazimeh adds, is that electric powertrains are easier for newcomers to put together than internal combustion engines.
According to most estimates, "pure" battery electric vehicles will have a small market share over the next decade. Boston Consulting Group, for instance, projects that EVs will account for only 2 percent of U.S. vehicle sales by 2020.
But the new companies' push to develop EV technology, coupled with crusading enthusiasm for the environmental benefits of electric drive, are part of the reason mainstream automakers are getting into the game. One example: Former GM product chief Bob Lutz often credited Tesla Motors' EV Roadster with prompting GM to build its Chevrolet Volt plug-in hybrid.
Year of change
Tension between big automakers and small upstarts will intensify in the next year as new forms of electric vehicles show up on dealer lots. Nissan launches its Leaf in December; Mitsubishi brings out the i-MiEV in mid-2011; and the Volt arrives this fall.
Big automakers have obvious advantages: global scale, established supply chains and money. For example, Nissan just broke ground on a $1.6 billion complex to build battery packs and assemble EVs in Tennessee. Startups can't write that kind of a check.
But big companies tend to pick a technology and stick with it. Hazimeh notes that European automakers resisted hybrids and EVs because of their expertise in diesels. Toyota moved slowly on EVs because of its strong position with the Prius hybrid.
That's why Daimler and, more recently, Toyota took equity stakes in Tesla, he says. Call it a quick catch-up course in EVs.
Technology isn't everything, however. Xavier Mosquet, senior partner with Boston Consulting Group, says established automakers' national dealer networks are an important strength. Most consumers won't travel far to buy a car or to have it serviced, he says.
"Those have traditionally been two big purchase criteria," Mosquet says. "I think it will be a real challenge for the new entrants to have profitable distribution and service outlets."
Zeal for EVs
New players often have a "Why not?" attitude powered by genuine enthusiasm for EV technology. Woodruff, who used to race Porsches, says he loves the instant torque that an electric powertrain provides: "I've never been beat at a stoplight, with the exception of one time in the rain when a 4-wheel-drive beat me."
Such zeal runs through the EV makers. Tesla CEO Elon Musk has said he used to bore college girlfriends with his enthusiasm for electric cars. Another new company, EnVision Motor Co. of Ames, Iowa, got its start as its two founders talked about EVs while working at a used-car store, says Chief Financial Officer Shawn Carson.
Eventually the two hooked up with a European company that purchases gliders from Renault/Dacia and modifies them. EnVision plans to begin sending imported units to dealers in a few weeks, with assembly beginning in Iowa late this summer, Carson says.
In his view, established automakers are too wedded to past ideas of what works in a car: "Early adopters don't necessarily need leather seats and surround stereo and seat warmers and electric power washers."
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