Wednesday, June 18, 2008

The Electric Car Lives

Clean, quiet, and relatively profitable to produce, electric vehicles have had a rough start in the U.S.: Five years after General Motors (GM) nixed its innovative EV1 electric car program, just a handful of automakers have committed to making and selling electric vehicles on a mass scale any time soon.

Enter Think Global, a Norwegian upstart plotting a U.S. invasion via pint-size, affordable electric cars. Think has been selling gas-free, Lilliputian city cars in Europe and will start peddling them to fuel-crunched Americans in 2009. The company's newly formed North American division has high hopes for Think's existing models—and even higher ones for the upcoming Th!nk Ox, a concept unveiled at the Geneva International Motor Show earlier this year.

An electrified people's car for the 21st century, the Ox is a preview of Think's next-generation production vehicle, due out in 2011. Roughly the size of a Toyota (TM) Prius, the Ox can travel between 125 and 155 miles before needing a recharge, and zips from zero to 60 miles per hour in about 8.5 seconds. Its lithium-ion batteries can be charged to 80% capacity in less than an hour, and slender solar panels integrated into the roof power the onboard electronics. Inside, the hatchback includes a bevy of high-tech gizmos such as GPS navigation, a mobile Internet connection, and a key fob that lets drivers customize the car's all-digital dashboard. Pricing has yet to be announced, but the company's current vehicles cost less than $25,000.

Although little-known, Think North America is backed by an undisclosed amount from Silicon Valley venture capital firms RockPort Capital Partners and Kleiner Perkins Caufield & Byers, which famously invested early in companies such as (AMZN) and Google (GOOG). General Electric (GE) made an unrelated $4 million investment in March to support the company's battery research and development operations.

Distinguished Design

Even more than its well-funded sponsors or cutting-edge technology, the Ox's killer app could be its design. To date, most electric cars available in the U.S.—small, unsafe, and underpowered—have been intended strictly for the earliest early adopters and the most faithful green believers. In contrast, Think's senior vice-president for design, Katinka von der Lippe, says the Ox is a "real car, a big step away from the cuteness of [other] electric vehicles." All that distinguishes the Ox from name-brand, fuel-sipping compact cars, in fact, is its silent hum and zero emissions.

The Ox also embodies the characteristic simplicity of Scandinavian design, featuring uncomplicated lines and clean, uncluttered surfaces. A band of unpainted metal stretches from the front of the vehicle to its rear, revealing the Ox's interior architecture, an aluminum frame. An unassuming grille is tucked between sophisticated sloping headlamps. "The Ox is a leap forward for the design of electric cars," says von der Lippe, "and, we think, the product of a mature company."

Still, the American market for electric vehicles "is virtually nonexistent," says John O'Dell, a senior editor specializing in green vehicles for car-buying site Even well-established gas-electric hybrids such as the Prius and Honda's (HMC) Civic account for barely 3% of U.S. auto sales. "Until you've got a compelling product, you won't have a market," adds O'Dell. Aside from the sleek Tesla Motors Roadster, which carries a price tag of nearly $100,000, there are almost no fully functional electric vehicles that meet average drivers' requirements. The Ox could fill that gap.

"It'll take a lot of time," Wilber James, RockPort's managing general partner and acting president of Think North America, says of the challenge of selling electric vehicles to American drivers, who still overwhelmingly prefer trucks to thriftier small cars. "We're going to focus at first on niche markets—cities, universities, and fleets."

Innovative Manufacturing

The company's business model, says James, is similar to that of PC maker Dell (DELL), which fueled its rise by ruthlessly optimizing its manufacturing and supply chain. Think's ultralean manufacturing system lets it build production facilities for about $10 million, compared with the billions invested in new plants by old-line manufacturers. That means more factories closer to customers, further cutting costs.

In addition, factories "could also be the retailers," says James, which would add a unique element to Think's branding. The company, he says, will be profitable if it can sell 10,000 vehicles a year. At 20,000 to 30,000 units in annual sales, Think can cut its component costs in half.

That focus on innovative manufacturing, in addition to the high-tech Ox itself, may ultimately set the company apart from previous attempts—and, Think is betting, finally help jump-start the U.S. market for electric cars.

For a look at an alternative approach to electric vehicles aimed at commercial city fleet-cars, see Duracar Delivers with Eco-Trucking (, 6/16/08).

Original here

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