Could electric cars save the US auto industry?

Yes

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by Rick Maltese

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Get on the Bandwagon. Improve Business by Helping Consumers Fulfill Their Green Dreams.

"We can't solve problems by using the same kind of thinking we used when we created them." - Albert Einstein

The future that auto dealers face appears bleak if they choose to continue along the traditional path. Dealers need to look for new ideas in answering the big question:

"How far is the cooperation between car manufacturers and our nations growing need for energy independence going to go?"

And this begs the question: should auto dealers wait for the "Big 3" to provide the leadership to initiate change? The manufacturers are part of the problem since they have been slow to embrace change where it counts. Factors such as satisfying shareholders and keeping up with the pace to match the consumer wants and needs have been poorly implemented.

The relatively new model of the auto industry has moved toward service and zero percent financing. This trend has grown thin as viewed among those who have felt the credit crunch and wizened up about what is expected from a service contract. Is it a myth that Japanese vehicles outperform Ford, Chrysler and GM? Japanese car popularity is due to the belief that the cars outlast and surpass the traditional American and European cars. Three decades of consumer reports are testament to these "so-called" generalities. It could be argued that Japanese cars have become less reliable in more recent years. In other words the playing field has been leveling off. Investors would see this as a good thing. An idealist would be disappointed. The competition could be catching up. Let's hope.

Now with upstarts like ZENN Motor Company (ZMC) arriving on the market and if their ideas prove to be widely accepted then both Japan and the US and the whole capitalist system have to think twice before designing vehicles or anything that lasts. In traditional investment schemes "honesty" and "quality of life" have counted little as a motivating force behind profit making.

The producers of tomorrow need to ask whether they want to be a part of the revolution or continue to burden society with their half-hearted or deliberate production of low "shelf-life" products. Catherine Scrimgeour, Public Affairs Manager for ZMC said that partner EEStor is creating a "battery (supercapacitor) that outlives the vehicle."...and in addition "80% of the moving parts are no longer needed to run the vehicle." That seriously affects the traditional model of servicing.

ZMC also recognizes the need to provide car owners with a means to convert their existing vehicles. They are making retrofits a part of their business plan. With the next generation ZMC model to be introduced in 2010 (some are skeptical) the hope is that their plan to introduce the new supercapacitor model which has forecasts of 400 km per charge and can be recharged in 5 minutes and will travel at speeds over 100 km/hph, this kind of technology will revolutionize the auto industry and other industries. We're seeing the need for diverse thinking and a willingness to adapt to be the required mindset for success.

"Failure is the opportunity to begin again more intelligently." - Henry Ford

Cars don't need built-in obsolescence just manufacturers think that profit requires it. It's like the Maytag serviceman ads where the serviceman has no work. So how about improving the planet? Even existing vehicles can be given more trouble free lives by retrofitting.

Even the fact that ZMC has gone public on the stock market the cynic in us has to ask whether a true long lasting product can be a wise strategy for investors.

With the right mindset there's no need to get left behind. We do have the shining example of the Toyota Prius which has had good publicity. A New York Times story covered how a Prius owner had prepared his home for a possible repeat of a blackout in 2003 and in doing so was prepared for the next blackout in 2006. He had placed a UPS (universal power supply) in his home to keep the basic electrical needs running including his furnace. The Prius was the energy source to keep the UPS charged which without a charge would have lasted only a few hours or possibly less. The recommended technology is an inverter to regulate the voltage and something like solar panels or batteries to supply a charge. In this case the Prius was the energy source whereas an equivalent in the past might have been a noisy diesel generator in the backyard.

Is retrofitting one solution to modernizing the dealership?

There is a huge following of the green movement with the help from such people as Barack Obama and Al Gore among many others. Not only will automobiles play a part in a cleaner environment by consuming alternative fuel but they will also start to be used in place of diesel generators and encourage a grid infrastructure whose influence to other industries will eventually catch on. An automobile being connected to the home power will help home owners save on their electric bill but also help the country lower its need for carbon dioxide producing electricity generation.

So yes, auto dealers have a place in restoring the economy and the ability of the consumer to have more control in contributing to the economic outlook as well as helping to save the planet.

So how about retrofitting? Turning repair shops and service centers into retrofitting centers is accepting reality. Many dealers have already started retrofits of various kinds. Careful consideration should be given before tooling a shop for all alternative fuel solutions. There are a number of different solutions out there. Biodiesel, hydrogen, fuel cell technology, compressed natural gas and perhaps less known compressed air vehicles have recently been suggested as the new saviours. Another exciting development is the supercapacitor which will no doubt be a huge part of the next generation of electric vehicles and the growing trend towards self sufficiency and the concept of shared power grids where private citizens become both consumer and energy provider.

"Hybrid" technology, a term used by Obama in his recent address when selecting his Energy team, has also become synonymous with the accepted direction for Japanese makers and now Chevrolet and other "big 3" and european designs. For example the Toyota Prius that rescued the home owner in a blackout did not come ready-made there was a small retrofit the owner made to enable the vehicle to supply his home with power. With climate change the challenges ahead like the recent power failure in Toronto's west end had people stranded without heat for 25 hours while crews had to dry out a flooded transformer. With temperatures below -20 Celsius incidents like these could become more and more frequent and automobiles can be retrofitted to provide power in these kinds of emergencies.

Diesel vehicles need small adjustments to make them run on vegetable oil. I've heard quotes from $0 to $2000. It depends on the kind and quality of the replacement fuel. It's called Biodiesel and Germany takes it very seriously. Eliminating the carbon footprint is the goal of marrying Biodiesel to diesel engines. No conversion is necessary if the fuel is created properly. Now the State mandates in the US are more interested in a B20 Diesel Mix which is 20% Biodiesel and 80% Petroleum Diesel which requires no retrofit. In the spirit of the inventor of the diesel it is worth noting that the first diesel back in 1900 was meant to run on non-polluting peanut oil. There are dozens of homegrown and new companies finding solutions to creating alternative fuel. With ethanol and other forms of biodiesel the versatile diesel engine has provided us with a means by which to standardize. The range is significant in the adaptable nature of diesel engines. I think we're going to find vehicles being offered that can choose from one of several alternative fuel and diesel mixtures at the same time. The vast size of the US and Canada with it's long roads and highways is, and has always been part of the need to pioneer new technologies. Hybrid vehicles and multi-fueled vehicles may be part of the solution. Consumers will buy more cars if they know they can travel anywhere and keep the car going.

Last but not least it does not hurt to be up on the latest gadgets. GPS systems and iPOD and audio and communication accesories are a big deal for consumers. The hands free cell phone is becoming a requirement by law. So these upgrades should all be doable and understood by service departments.

Now what about the sales staff? They need to become more than just sales people. They can be cut in to getting the potential retrofit client. It would only be fair. This means more specializing for sales staff.

The greening and the social networking are two paradigms of the 21st century. Social networking often referred to as web 2.0 has been kind of low on the dealers totem pole of priorities. That will be my next subject in an upcoming article.

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