Nov 6, 2009 (From the CalCars-News archive)
We just spoke at the first large-scale conference in Detroit on plug-in cars, "The Business of Plugging In." Speakers at this high-level event, organized by the auto industry's leading research/analysis/conference group, the Center for Automotive Research, with founding sponsors DTE Energy, the University of Michigan and GM, included Michigan's Governor Jennifer Granholm and William Ford, Jr. We decided this was as good a time as any to make a long-awaited statement. While cautioning that "We still face a lot of steps between here and successful commercialization," we said, for the first time, we were "taking this occasion to DECLARE VICTORY -- plug-in hybrids are coming!" Following that we outlined our view of the road ahead, including introducing the most challenging audience to our Gas-Guzzler Conversions campaign. You can see what we said below. We follow that with excerpts from a story about why fun is a key ingredient to successful commercialization. And we wind up with the first major national media report on our new conversions campaign.
WE'VE TAKEN THIS OCCASION TO UPDATE OUR PAGE
http://www.calcars.org/ice-conversions.html -- renamed "Join the Campaign to Electrify World's 900+ Million Vehicles (as many as possible, to plug-in hybrid or all-electric)." That page has links to 11 small companies and projects that are the early entrants in what we believe will be a booming global opportunity. We also point from there to our one-page campaign description and endorsement form, plus links to our presentations, flyers and White Paper.
THIS CONFERENCE FEELS DIFFERENT: Over and over, that's what we heard Detroit attendees say. Pressed to explain, most said they felt it was appropriately named "The Business of Plugging In:" everyone understood the benefits and wanted to find the most effective ways to advance the technology and the companies and organizations across the industry, the nation and globally.
Happily all-business now comes with a twist, best captured in "Fun could be the key to selling plug-in hybrid autos," an article by USA Today automotive reporter Sharon Silke Carty, http://www.usatoday.com/money/autos/environment/2009-10-21-plug-ins-cars-conference_N.htm. Here are excerpts quoting two speakers from our session plus a keynoter:
At a three-day conference on the future of plug-in hybrids, one lingering question kept coming up: Who's going to buy these things? The answer, according to outsiders and industry leaders here: no one, if they're not fun to drive. Fun to play with. And fun to look at. Naturally, people want safe and reliable cars, but, they said, the key to wide public acceptance of more expensive plug-in and electric cars is making them fun. "We're asking, 'Can you give us the next big thing? Can you make a profit? And can you make it fun?' " said Wesley Clark, former presidential candidate and keynote speaker at the Business of Plugging In conference. "If you can do that, it's a whole new age for Detroit and a whole new age for America."
Tony Posawatz, vehicle line director for General Motors' Chevrolet Volt, said GM is working to educate consumers. "Our job is to make this something they fall in love with, so they're not talking about the (higher sticker price than a similar gas-engine car). They're talking about how they want the car," Posawatz said. John Waraniak, vice president of vehicle technology for the Specialty Equipment Market Association, said every electric and plug-in hybrid will need to wow buyers. "That cool factor is critical to acceptance of green vehicles," he said.
TRANSCRIPT OF FELIX KRAMER'S 9-MINUTE REMARKS at breakout session, "The Consumer: Who, When and Why?" (agenda at http://www.pev2009.com/program/index.asp#w_bs1_3 ).
By session moderator Brett Smith, director of the Automotive Analysis Group, at the Center for Automotive Research (CAR) in Ann Arbor Michigan, organizer of The Business of Plugging In 2009 Conference.
Our next speaker is Felix Kramer. I had the chance to meet Felix actually several years ago very briefly and then last November out in California at a meeting of the Volt people and several folks from the community in California who are very passionate about this subject. At the end of the day, Felix gave up and gave what Iand [GM's] Rob Peterson -- I don't think Rob is in the room -- and I agreed, was the most amazing speech we had ever heard. This was right at the stage, I think it was the day that the Big Three chief executives were on Capitol Hill, and the mood was so bad, you remember. Felix got up, a real California guy, being someone who's been passionate about the environment for a long time, got up and gave a speech that was just stunningly thoughtful on why we need our automotive industry to succeed to get to this point. And Rob and I looked at each other and said, "Yeah, he gets the PEV part but he also gets the importance of the industry as a whole." Our next speaker is Felix Kramer from CalCars Initiative.
So I want to talk about what we've learned from conversions, and what they tell us about future consumer demand. Seven years ago, I started CalCars.org to put plug-in hybrids on the map. From 2002 to 2005, all we heard was "Nobody's interested, nobody wants to plug in -- there's no business case, there's no benefit, and the carmakers will never go for it."
Andy Frank, meanwhile, did the first retrofits, mostly on big GM vehicles, and almost five years ago we brought the first Prius conversion to Detroit to show to an automotive reporter. On the way back we stopped at the Center for Automotive Research to show them a plug-in hybrid.
After us, hundreds of Prius conversions and Ford Escape conversions gave a glimpse of the future to a lot of important, critical people -- some journalists, think-tank people, C-level executives, elected officials.
And those vehicles enabled us to communicate three powerful slogans that became kind of memes: "100+ miles per gallon" (with a footnote "plus a penny or two a mile of electricity"); "Good enough to get started" with the technologies we have now -- good enough to get started; and "Cleaner, Cheaper, Domestic" as a way of describing the benefits of electricity compared to gasoline.
And then they also enabled us to show this [a short "dongle" cord, with a regular 110 electrical plug on one end and a plug for the vehicle on the other] and get a laugh from people, saying "every alternative fuel source needs a new infrastructure and new technology; this connects us to today's infrastructure." And that was a really very powerful message.
So, with the help of a broad coalition that began to form, most of those objections fell away in 2006 to 2008.
We still face a lot of steps between here and successful commercialization. But today, for the first time, I'm taking this occasion to DECLARE VICTORY -- plug-in hybrids are coming! And we actually haven't had a chance -- you know, we've been working so hard all the time -- to actually say, "Look what we've done! We've made this happen. We've made this amazing change."
Now before I go on to talk about the market, I want to talk about a major new development, which I think will become part of the "What comes next?" story.
Having achieved our primary goals, we started to look at how long it takes new vehicles to penetrate into the market. It took hybrids 10 years to become 1% of the fleet and 2% of new cars. If you take that and you multiply [it] by a highly optimistic 10x factor, 15 years from now, we will still have a dribble of new plug-in vehicles in the market compared to 250 million vehicles in the United States and 900 million in the world.
That means that during those 10 to 15 years, we won't get the petroleum-reduction benefits we need. So, that leads us to a new goal: we're pointing to a global business opportunity to fix the vehicles that are on the road today.
Intel's former CEO Andy Grove likes to talk about big gas-guzzlers, PSVs -- Pickups, SUVs and Vans -- as the market (and I'd add municipal and school buses and some other vehicles to that), and he's a big fan of this strategy, although there's a lot of skepticism about it. We think it's possible to retrofit to safe, drivable, validated EVs or PHEVs, depending on the drive cycle and the technology and construction of the vehicle, millions of vehicles.
So, we're launching a new campaign that's spotlighting a few prototypes from small startups. We're collecting endorsements and getting a lot of partners on board about this. We want this effort to happen in two years instead of seven years. I'm happy to talk about it, give you a flyer, and all the info about it is at CalCars.org.
[Expectations & Our Challenge]
So back to the questions that we want to talk about here. 2010 is our real major unexplored frontier and our most critical year. The vehicles are coming this time -- not prototypes, not conversions, but real production cars. And they're going to come into a kind of twilight zone, at an unusual intersection.
On the one hand, you've got the public -- with its understanding, its conceptions and its misconceptions, its expectations and its hopes that somehow there's going to some sort of solution that's going to get us out of this problem, this situation. And they'll bring all of those expectations to their encounters with multiple flavors of vehicles -- from small manufacturers and from large companies.
So, they're going to start to see what plug-ins can deliver and there's going to be some mismatch in their thinking. And we hope that they'll recalibrate their expectations in healthy and enthusiastic ways. But that's not guaranteed.
Automakers and the broad community can take a lot of steps to influence this unpredictable journey. The actions and communication strategies that we choose can significantly improve the chances of successful commercialization.
So my predictions: I think the first vehicles will be gobbled up by early adopters. I think for a long time, carmakers will sell as many as they can build. I think the early buyers are going to self-select, based on the drive cycles and access to home or business charging.
If 50% of the population has access to a plug right now, that's not a niche -- that's a huge market and we don't have to worry for a long time about where people are going to plug in. Plenty of people can start by plugging in.
And millions of people are going to pay for features, just like they do for every kind of car. They'll pay for the green feature, the smart feature, the cool feature, the advanced-technology feature, the prestige feature. And all of those features get communicated by positioning, by design and by advertizing.
So how many people are we talking about? Let's take one example: there's an acronym LOHAS, the LOHAS community -- Lifestyles of Health and Sustainability. It's a marketing category and people estimate that over 50 million people in America, 25% of adults, are willing to pay more for products where they will get the features that appeal to the LOHAS mentality. That again is not a niche.
Now one caveat to all the predictions that we've been reading about: they are all based on "BAU" -- Business As Usual. Business As Usual -- I don't think is likely in the next couple of years. It could come from bad news: higher oil prices, international crises, supply disruptions. We could move at any point to a post-Pearl Harbor situation where we say we've got to retool the whole country because we don't have guaranteed access to oil any more.
It could also come from positive steps, like carbon credits and additional incentives on local levels.
[Redefining the Customers' Role]
So now, I'm really encouraged that the carmakers see as their allies and -- this is in contrast, in some cases, in the past -- not only the utilities, but plug-in advocates, communities, and regional efforts like project Get Ready -- and I highly recommend that you look at http://www.projectgetready.org .
So it's now possible for carmakers, the media and advocates to use new communications tools to give voices to the future drivers who are going to be the first owners of plug-in cars. These customers and future customers can describe now what they hope for, and when they start getting them, they can say what they like and what they'd like in version 2, because we're talking about automotive software now, to a great extent, and hardware, but a lot of it is -- version 2 can go right into their car, some day in the future.
So, let's think of all of those customers as a giant fan club and as a focus group.
For the roll-out in the next year, I think the guiding principle for all of us should be the ones that GM embraced when it announced the Volt: transparency and two-way communications at every stage.
This year, just like those demonstrators' cars, those conversions for all of those years, the cars are going to do us a big favor and give us the biggest boost yet. They give us the chance to personalize the experience and for people to communicate their own personal experiences. We can enlist every new driver as an advocate -- at least for their families, their friends and their neighbors and coworkers.
But I expect, actually, many of them will jump in and become amateur evangelists to audiences who want to hear all about this. And I can't wait! Thank you.
COMING SOON: OUR ANNOUNCEMENT OF THE FIRST ENDORSERS OF THE CAMPAIGN.
Please review http://www.calcars.org/calcars-bigfix-endorse.pdf , then send us your company/organzation's endorsement or your personal endorsement if you're a high-profile individual or active advocate.
THE FIRST NATIONAL MEDIA STORY ON OUR GAS-GUZZLER CAMPAIGN. A little background: CalCars completed its first Prius conversion in fall 2004. That news didn't reach major public awareness until Spring 2005, with major profiles and features in the NY Times, Business Week, Newsweek, etcv (That story is told in Sherry Boschert's book on PHEVs -- see http://www.calcars.org/books.html -- and you can find the news clips at "CalCars in the News 2004-2005" http://www.calcars.org/kudos.html . But in late January, well before that, Mark Clayton at the Christian Science Monitor wrote "Hybrids? Some Opt to Go All-Electric," describing our project. Now Clayton returns with the first national story on our new campaign -- and he gets it all right! Here it is, filed at CSM under "Innovation."
"Electric SUVs: A smaller footprint for big vehicles: Converting existing gas-guzzling trucks and SUVs into hybrid and electric vehicles gains traction."
By Mark Clayton
Staff Writer for the Christian Science Monitor
November 4, 2009
Tom Reid likes his ride big -- a 2000 Ford Explorer SUV with plenty of interior room and all the amenities. None of those prissy little hybrid vehicles will do for him.
But after gas hit $4 a gallon last year, Mr. Reid had a big fuel bill, too -- and an epiphany: convert his gas guzzler to an all-electric vehicle.
So he did. Now Reid's bright idea has become a sideline business for his shop, HTC Racing, which produces specialized protective coating for automotive and other metal parts in Whitman, Mass. He offers kits to convert any 1995-2004 gas-sucking Ford Explorer into a cheap-to-keep, no fuel, little maintenance all-electric SUV. Cost: $15,000.
He admits that the idea may be "ahead of its time." Reid has yet to sell a single kit. With gas at only $2.50 a gallon, the conversion cost is too much for even SUV-loving die-hards. But if gasoline prices soar again, Reid says he'll be ready -- and he won't be alone either.
Converting America's vast existing fleet of gas-guzzling SUVs and pickup trucks into electrified vehicles is an idea percolating among policy wonks, start-up companies, and fleet owners such as FedEx and the US Postal Service.
Despite all the hoopla over Detroit's move to make plug-in hybrid and all-electric vehicles, there's a need for a speedier US shift away from oil in order to enhance energy security and slow the buildup of carbon in the atmosphere, says a small but growing chorus.
President Obama has set a goal of 1 million plug-in vehicles on the road by 2015. But with 260 million cars, SUVs, and light trucks on the road today, new electrified vehicles won't arrive in sufficient volume to yield a significant benefit on reducing US carbon dioxide emissions or oil consumption for at least 15 years, says Felix Kramer, cofounder of the California Cars Initiative, an advocacy group that promotes plug-in electric-gas hybrid vehicles.
What that means is that conversions will be needed -- and the best place to start is with gas guzzlers, Mr. Kramer says .
They point out that even if all new cars sold in America were electric by 2030, they would only represent a third of US vehicles.
"We're happy automakers are changing -- but new plug-in vehicles sales can't do the job alone or anytime soon," he says. "It's clear [new plug-ins] will initially be a drop in the bucket. So we have to change over existing vehicles -- we need conversions."
A big part of the problem is vehicle longevity. It takes 15 to 17 years for a typical vehicle to go from showroom to junkyard crusher -- and sometimes longer for SUVs, pickup trucks, and vans that have sturdier frames.
In the scenario where 100 percent of new car sales are plug-in hybrid vehicles by 2030, US oil consumption would fall by just 21 percent and carbon emissions by 15 percent because of the millions of remaining gasoline cars, estimates a California Cars Initiative white paper.
But with an active conversion program that included tax incentives, the number of plug-in vehicles would roughly double to about two-thirds of the fleet by 2030. That would produce a 36 percent cut in oil use and a 25 percent chop in CO2 emissions.
The reason to focus on gas guzzlers rather than gas sippers is the much bigger benefits from electrifying them. When Kramer of the California Cars Initiative converted his Toyota Prius hybrid into a plug-in hybrid with more electric power -- the car went from 50 miles per gallon up to 100 m.p.g. But the United States could save far more, he says, if it converted existing pickup trucks that get 15 m.p.g. to vehicles that can go 30 to 40 miles on a charge before shifting to gas.
And that's the aim of Ali Emadi, president of fledgling Hybrid Electric Vehicle Technologies, a Chicago spinoff of the Illinois Institute of Technology. His young company has just converted its first Ford F-150 pickup truck from a 16 m.p.g. gas hog into a plug-in hybrid that gets up to 41 m.p.g. gasoline equivalent.
"Our technology could be applied to almost any vehicle from SUVs to pickup trucks, buses, or even school buses," Dr. Emadi says. "The important issue is that when you apply our technology to larger vehicles -- trucks and buses -- the fuel economy savings and return on investment are much more attractive."
Unlike Reid's all-electric approach, Emadi's company plans to add an electric drive system to an existing internal combustion engine to create in essence a retrofitted plug-in hybrid vehicle that runs primarily on electricity. But once the battery is depleted after 15 miles or so, it can continue running on its internal combustion engine while recapturing braking energy just like a standard hybrid.
Emadi is in talks with potential customers. Big commercial fleets of pickup trucks, SUVs, and vans seem likely to be the first arena where the economics line up and gas-guzzler conversions get the go-ahead.
FedEx, the big delivery company, began retrofitting some of its trucks to standard hybrid models. But its president, Frederick Smith, says that, in the long term, the company "would likely convert a substantial portion of our fleet to the new plug-in hybrid technology."
Bright Automotive, an Anderson, Ind., startup, has its sights set on building a new commercial 100 m.p.g. plug-in hybrid van it calls the IDEA. But until it wins funding it is focusing on converting Volkswagen's Transporter van from a 15 to 22 m.p.g. vehicle to a plug-in hybrid workhorse that goes 22 miles on all-electric and 57 m.p.g. across its 50-mile daily drive cycle.
Earlier last month, Inglewood, Calif., announced it had tapped REV Technologies, a company in Vancouver, British Columbia, to convert its existing fleet of 21 Ford Escape SUVs into all-electric vehicles that get 100 miles on a charge.
"When you just look at the sheer number of cars on the road, they're not going away anytime soon," says Jay Giraud, president of REV. "People are saying, 'I want to keep driving what I've got -- I just want it to be electric.' "
Making a similar point in dramatic fashion, Raser Technologies in Provo, Utah, unveiled a converted plug-in hybrid "extended range" Hummer that gets 100 m.p.g., according to the company. Raser is trying to sell its technology to a manufacturer and has no current plans to convert existing vehicles, a spokesman says.
Which leaves Reid wondering when gas prices will rise high enough that individual consumers begin converting their beloved SUVs, vans, and pickup trucks. He also wonders why those fat federal tax credits of $7,500 for new plug-in hybrids like the upcoming Chevy Volt don't yet apply to converted all-electric vehicles or plug-in hybrids that accomplish the same fuel savings and environmental benefits. Why not a "cash for conversions?" Kramer adds.
"If the government would help with a reasonable tax credit, you'd get all these entrepreneurs like me converting all kinds of vehicles for maybe $10,000," Reid says. If gas rose to $4 or more a gallon, he figures his SUV conversion to electric-vehicle kits would be selling like hotcakes.
"The way I see it, Americans have a love affair with their SUVs," he says. "None of my friends want anything to do with little cars -- no matter how high [the price of] gas goes."