Thursday, November 15, 2007

Green Hummers and Zero emission SUVs ?

Green trucks, Hummers and SUVs ? Zero emission trucks ? Oxymoron, you say ? Phoenix Motorcars does not think so :-) . I had the good fortune to be invited to a talk by Daniel Elliott, CEO of Phoenix Motorcars. The talk was hosted by Fast Company , publishers of the magazine of the same name, at the Hilton Garden Inn, Cupertino. I didn't even have to drive that far for a great lunch and to hear about a great company and product idea.

Phoenix is targeting that niche space of truck and SUV owners who also want to be green. Clearly, these are not your typical Prius owners :-) . But, I was rather impressed as the story unfolded. Phoenix is an Ontario, California company. Their zero emission trucks have a range of about 130 miles on a full charge and take about 10 minutes to recharge ! They can get up to speeds of about 95 mph with a full payload and go 0 to 60 in 10 seconds. ! Not your average Prius :-) To achieve this they have a special combination of motor, battery technology and a few other innovations. The Nanosafe battery from Altair Nanotechnologies is a key component. These Li-Titanate batteries take only 10 minutes to charge from an offboard charger. They take about 6 hours to charge from an onboard charger hooked up to a 220V supply. The infrastructure deployment to make these off-board chargers available widely is an issue which will take time to overcome. Altair Nano's battery technology appears to be impressive, in that it overcomes the slow charge time problem. Apparently, they are targeting other applications such as a 4MW storage facility for windpower.

Phoenix buys the chassis from a Korean supplier and outfits it with their technology. There are two 35kWh battery packs on board to give the 130 mile range. The batteries can outlast the vehicle itself and can be recycled. They require a special connector to enable the 10 min charge. Otherwise they can hookup to the same chargers that other electric cars use. A typical charge costs about $3.70 and to get a range similar to a diesel truck probably around $7.40, compared to a full tank of gas at about $60. Very impressive economics. Even if gas prices were to fall this vehicle would be economical ! The truck costs about $50, 000, so more expensive than other trucks. But, Phoenix claims lifetime cost is about 76c/mile which is comparable to other trucks.

Currently, they are targeting fleet sales only and have customers like PG&E and NASA lined up. They plan to open up to consumers by 2009. With 17M automobiles sold in the US and 39M worldwide they have a large addressable market. Even if they sell in the 100,000 units only they expect to be profitable in 18 months. They have raised over $100 M so far. No big name VCs shown on the web page, though. They are partnering with others for nationwide distribution.

Clearly, they are playing in a high stakes game. Today's Mercury News reports on a court rejection of Bush's truck fuel standards. Schwarzenegger's shown as applauding the decision. As Dan Elliott pointed out, both gasoline based automobile and electric car camps have their own lobbies. The electric car lobby does seem to be gaining some strength recently. I remember electric car designs at MIT as early as the '80s sponsored by GM and other major car manufacturers. But, they never went far in the market :-) . Both their mileage and market clout have increased in recent years with major manufacturers introducing electric cars and hybrids and the public showing an increasing tendency to buy and drive them. Interestingly, this month's Fast Company magazine has an article on Jonathan Goodwin who claims he can get 100 mpg out of a Lincoln Continental and cut emissions by 80%. Yes, he works on Hummers too. See, the title of this blog was not all fake :-) He claims he can get 60 MPG on a H3. So, what are the major car manufacturers missing ?

The automobile industry requires deep pockets. Its not every day you see a new automobile company, Tesla notwithstanding. The last one was DeLorean and we know how that ended. But, I must say that I am impressed by Phoenix's approach of applying their innovation where it matters, and not trying to reinvent the wheels (literally) :-) Even if they do not have the muscle to set up their independent manufacturing, distribution and financing networks, they appear to be able to ship trucks and collect revenue on them. Their careful choices in product and market strategy seem viable. I hope they are successful, because it will drive the rest of the auto industry to follow. I'll wait to buy my Hummer :-)


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