Clean move - Marathon

Shortly after crude prices had scaled a dizzy height of $135, the UK-
headquartered Ultra Motor Co unveiled a project declaring Stuttgart in
Germany as the world's first LEV (Light Electric Vehicle) city. The
occasion was World Environment Day (June 5), and Stuttgart was chosen
as "historically it has been the home of automobile innovations. Some
of the very first automobiles in the world were developed and
commercialised here, and to continue its innovative leg acy we chose
this city," says Joe Bowman, CEO of Ultra Motor Co.

But he is most excited about growth prospects in India, "our fastest
growing market that represents 50 per cent of our business today, and
where we are pioneering some of the leading technologies in the
field."

An LEV has a system of batteries that can be electrically charged, and
the main concern of consumers is the range of the vehicle. Ultra
Motors has just launched in the Indian market its longest-range
scooter called 'Marathon'. "This can travel up to 100 km on a single
charge and India is the first market to get this product. The good
news is that this vehicle can be charged at any electrical outlet; you
can plug it at your home, at the coffee shop or your workplace, and
you can get 80 per cent of the charge in the first two hours," says
Bowman.

The remaining 20 per cent charge requires six hours. So the consumer
has the option to go in for a quick charge or an overnight charge.
And, points out Deba Goshal, Ultra Motor India's Marketing Director,
LEV users in India are getting into the habit of overnight charging of
their vehicles, "just as you now do with your mobile phones".

He adds that in 2007-08, LEVs got about 10 per cent of the Indian
scooter market share; "1.1 lakh of these vehicles were bought by
Indian consumers, from a total of over 1 million scooters sold last
year." Ultra Motors, which assembles its LEVs in India, hopes to sell
about 60,000 units in 2008-09 in a market projected to be around 2.4
lakh units. In 2009-10, he estimates the Indian market for LEVs at 4.5
lakh.

The pan-Indian average for the daily commuting distance of a scooter
is about 30 km. The obvious reason a consumer chooses an electric
vehicle is to save cost, both upfront and while using it. The cost of
Ultra Motor LEVs in India is about Rs 28,000-34,000. "The upfront
capital cost is always going to be lower than a combustion engine
product. But more important for the consumer is operating cost, which
depending on where you are, can be as low as 10 per cent, as it is in
India," says Bowman.

In the capital cost there is a saving of about 25 per cent, says
Goshal, and the battery configurations are different too in different
markets. "India and Asia being price-sensitive markets, and more
oriented towards "scooter" designs, use SLA (sealed lead acid)
batteries, which are heavier and more voluminous. But they give a good
range, such as the 100 km given by the Marathon launched in India this
June. European and US markets prefer leaner/slimmer designs, hence the
lighter and smaller Lithium Ion batteries are used in these."


Bowman is more interested in the Indian, rather than the Chinese
market, "because China has already grown and it's a local market where
domestic players are fighting it out. So there won't be any further
growth there; but we'll see growth in India, South East Asia, Europe
and the US."

India is exciting because "we're seeing more and more cars on the
road, and thanks to the brilliant engineering of Tata we're going to
see the Nano enter the market and put even more cars on the road."
This would result in a higher fuel bill as well as emission of more
greenhouse gases accelerating climate change.

Upbeat about the new transportation solution his company is offering
and positive that it will catch on, he says, "In the US and Europe
consumers are shocked, paralysed; in the US gas has crossed $4 a
gallon; in India petrol is around Rs 55 and fuel continues to be
subsidised. All these negative trends will have an adverse impact on
economic development and people's lives, and electric personal
mobility is a great way to solve this problem."

He admits that consumers are hesitant to try out a new category of
transport and concerned about the battery running out and no place to
charge it. "So in an effort to drive mass adoption of LEVs across the
world we've developed a solution for cities that helps get cars off
the road, fights climate change, brings down energy cost that
negatively affects the economy and reduces traffic congestion. And we
are calling it LEV city."


Stuttgart is the first, and provides LEV users a charging station
every 200 metres… "Just like a mobile network, this is a network where
people can charge their vehicles, where there will also be a fleet of
public vehicles available for renting. So you have a smart card and
become a member in the same way you become a mobile phone subscriber.
You swipe your card and put your vehicle for charging while you go to
office, for a cup of coffee, or shopping. It's a convenient place for
parking, charging and a new form of public transportation that is cost-
efficient, fast and clean," says Bowman.

He adds, "We're not stopping here and are already in discussion with
over a dozen Western European cities and a few Indian cities because
we are on an international mission to implant charging station
networks for LEVs in every possible city in the world."

Ghosal adds that last year the LEV category got a decent exposure in
south and west India. "Central India and North India still lack that
penetration, but it's a good start and we are very positive the market
for LEVs will only grow here."

Bowman of course is engaged in "very aggressive plans to build a
global brand for his LEVs. "There are 50 cities in Europe, each with a
population above 500,000, which need a solution like this." A few of
the smaller cities in India are interested too "because there are
clear benefits. They are looking not only to cut emissions but also
get cars off the roads to ease traffic congestion and provide clean
transportation.

In Stuttgart, clean transportation two-wheelers enjoy about 8 per cent
of market share of all transportation. "They want to take this to 20
per cent in three years, and that can be done only through an LEV
personal mobility network."

So how long before Ultra Motors looks at a battery-operated car?

"I don't believe that cars — especially personally owned cars — are
going to play a major role in transportation in the 21st century,"
says the man who has been visiting India for eight years and noticing
the explosion in the number of cars. "This is probably going to
continue as you have pent-up demand. As the economy grows, people with
more money have different aspirations including freedom of mobility
and the first step is to go to a car. But you haven't seen what Europe
has seen."

And those are problems associated with the cars on the road and "I
think India has a great opportunity to leapfrog, because there are
only so many roads. Of course, as a company we are always open to
innovations but I believe the LEVs are going to play a more dominant
role in the 21st century."

Bowman gives anecdotal evidence to show that crude above $135 is
really hurting and "people are driving less cause it is costing more
to do so. On the Memorial Day weekend in the US, a big holiday, people
love to go on their motorboats. But this year if you went out on your
motorboat, or your sailboat, as our chairman Joe Santana did, you'd
have seen an amazing thing. There were no boats!"

As it costs $300 an hour to go on an average-size motorboat, "many
people decided it was not worth it. So there were barely 10 per cent
of boats out there. And the same thing happened with driving during
the same weekend, when people normally drive to the countryside. So it
is clearly a crisis.

At such a time, if there is a viable alternative and awareness
increases, the LEV market will explode not only in India but every
country in the world," is his cheerful projection for his business.

Source: Business Line