Having Their S.U.V.'s and Converting Them, Too

Having Their S.U.V.'s and Converting Them, Too

KEVIN RICHARDSON, who at 32 is the oldest member of the Backstreet Boys, took delivery last week of his 2004 GMC Yukon sport utility vehicle. He raves about its "F.B.I. look" - all black and chromeless, with lacquered wheel rims - and the 5.3-liter V-8 engine that puts close to 300 horsepower under the hood.

And he dreams of ordering a customized license plate for this, his perfect Hollywood ride. It would read "CLEAN."

That may sound as contradictory as Mr. Richardson himself - an avowed environmentalist with an ungreen hankering for big, powerful cars - but, in fact, he is spending more than $10,000 to convert the Yukon to run on compressed natural gas, a domestically produced fuel that is less polluting than gasoline. The conversion will include the installation in his garage of a refueling system, which will let him fill up the Yukon by using the same gas line that supplies his house.

To do the conversion, he has hired Evo Transportation, a company started by two former entertainment industry executives, David Young and Seth Seaberg.

The two men, who had virtually no automotive experience but a lot of Hollywood connections, have built a bustling business in Los Angeles by offering environmentally friendly but cool rides. Their Evo boutique limo service features three black S.U.V.'s much like Mr. Richardson's. The vehicles also have Game Boy consoles and minibars stocked with organic goodies like soy-based vodkas and soft drinks made from green tea. Celebrities like Cameron Diaz and Woody Harrelson are regular customers.

"We figured, 'Why should people compromise?' " said Mr. Seaberg, who before founding Evo with Mr. Young was chief executive of Ray Gun Publishing, which publishes the magazine Bikini. (Mr. Young ran Bliss Artist Management, which managed rock bands.)

Unlike cars powered by electricity, a vehicle fueled by natural gas has the same power and performance - and can carry the same weight - as an identical vehicle fueled by gasoline. "You actually can get all the luxury of a big S.U.V. with none of the guilt," Mr. Seaberg said.

Now Evo is ramping up its next and potentially far bigger business: converting S.U.V.'s for Hollywood's elite - and anyone else with $10,000 or more to spend -as well as converting smaller vehicles like General Motors' new Chevrolet Colorado pickup for corporate and municipal fleets. Their municipal customers already include the City of Santa Monica and Los Angeles County.

As traditional automakers continue bickering over the future of hybrids and hydrogen, Evo is offering consumers alternate-fuel versions of the vehicles they want to drive right now.

The limo service will expand, but its founders say it was just a start toward creating a company based on the idea of alternative fuels. "The limo business was a scaleable business and got us good cash flows pretty quickly," Mr. Young said. The service started in April 2003 and became profitable in the first quarter of 2004, and the two men say they expect to have $2 million in revenue this year.

A ride in an Evo limos costs $75 an hour, with a two-hour minimum. The company said it logged 2,000 hours of service last year, 60 percent of them for hauling celebrities to events like the Academy Awards or Emmy Awards ceremonies. More important, Mr. Young said, the limo service brought the vehicles to the attention of the very customers who were likely to buy an S.U.V. conversion.

Evo has received $500,000 in venture capital to expand its limo fleet into other California cities. And more celebrities are expressing interest in conversions. Brad Pitt requested a proposal for a conversion after he rode in an Evo limo to a pre-Oscars party.

As for Mr. Richardson, he said he saw his first Evo S.U.V. in May 2003, when he showed up at a forum for the Natural Resources Defense Council featuring Arianna Huffington, the syndicated columnist, who has been pressing Detroit automakers to make more fuel-efficient cars. The topic that day was "Breaking the Chain of Oil Dependency." Mr. Richardson showed up in a gas-guzzling Mercedes CL500 sports car that gets about 16 miles to the gallon.

"I was looking for some place to hide my ride when I saw this S.U.V.," Mr. Richardson said. The converted Evo S.U.V.'s have labels saying, "powered by clean natural gas."

"I didn't want to be a hypocrite anymore," said Mr. Richardson, who operates an environmental foundation called Just Within Reach. "I want to walk the walk if I'm going to talk the talk." He sought out the S.U.V.'s owners, and Mr. Seaberg let him take the vehicle for a drive after the meeting.

In addition to spreading the word at environmental events, the Evo founders have hired several drivers with M.B.A.'s who serve as business development employees when they are not on the road.

In effect, the drivers are missionaries for the Evo brand. Jacob Ryan, who drives for Evo and holds an M.B.A. from Schiller International University in Madrid, can reel off a host of facts and figures about Evo-mobiles. They have a range of about 175 miles on a fill-up. The gas is stored in several high-pressure tanks under the rear of the vehicle. It takes about the same time to refill the high-pressure tanks with compressed natural gas as it does to fill up a conventional tank at a gas station.

And natural gas is cheaper than gasoline. "It's $1.39 per equivalent gallon at a lot of stations, but if you go the airport it's 30 cents cheaper and there's no line," in contrast to the usual queue at regular gas stations, Mr. Ryan said. That compares with more than $2 a gallon for regular gasoline throughout much of California. "And it has 90 percent less emissions than regular gasoline engines," he added.

Despite its recent successes, Evo, like other alternative-fuel companies, faces formidable challenges. Most notable is the continued emphasis of the auto industry and the federal government on hydrogen as the fuel of the future. Compressed natural gas, which has been used most extensively in corporate and municipal fleets, including thousands of buses around the country, has become a stepsister to what experts envision as a far more exciting transportation economy based on hydrogen fuel cells.

NATURAL gas has been pumped from underground reservoirs for decades to heat homes and businesses. In the 1980's, the gas was commercialized as a transportation fuel by compressing it so it could be stored in portable tanks. Hydrogen fuel, by contrast, is made by the complex process of breaking apart molecules that contain hydrogen atoms. That is one reason experts say that compressed natural gas still has a future.

"We're driving down this hydrogen highway and that's hurting compressed natural gas," said Rebecca J. Royer, president of the Baytech Corporation, a manufacturer based in Los Altos, Calif., that provides Evo with conversion parts and does conversions for big corporate clients like United Parcel Service. "Everybody is saying it's better to just wait for the hydrogen economy."

Evo also has to contend with the rapidly expanding popularity of the hybrid gas-electric vehicles, like the Prius. Evo said it planned to add a few Priuses to its limo fleet. Even S.U.V.'s will soon be available as hybrids, as Ford Motor and Toyota add them to their lineups this year.

It is also true that many gasoline-powered vehicles produce far lower emissions than they did in the 1980's, reducing one of the benefits of natural gas. "The inherent advantages of natural gas have diminished in the past three or four years as superclean gasoline and diesels have come on the market because of tighter emissions regulations," said Tom Cackette, chief deputy executive director of the California Air Resources Board, which regulates emissions in the state. "It's hard for natural gas to compete."

Still, Evo's founders appear undaunted. To the idea of a future fueled by hydrogen, they argue that compressed natural gas can be a helpful steppingstone. "Right now, you have consumers who think hydrogen in a tank in their car is like riding with a bomb," Mr. Seaberg said. "But storage of hydrogen and natural gas aren't that different. So if you get comfortable with one, you'll feel comfortable with the other one."

Mr. Richardson of the Backstreet Boys does not seem especially worried about fueling up next to his home. In fact, he says he is happy to have such a convenient refueling station, allowing him to get natural gas at a price equivalent to 80 cents a gallon of gasoline. The fuel system in his garage is "the size of a small water cooler," he said, and the cost of the fuel he uses is added to his home gas bill.

Hybrids, meanwhile, still use gasoline, albeit in smaller quantities than a regular S.U.V. does. If gasoline becomes more and more expensive, even hybrid S.U.V.'s might be regarded as guzzlers.

Mr. Ryan, the Evo driver, said such issues could change the minds of even Hollywood's most vocal environmentalists. "Now Arianna can finally ride in an S.U.V.," he joked as he waited to hear the name of his first celebrity passenger of the day. Alas, it was not Ms. Huffington.

Apr 09, 2004 EV WORLD

By Noel Adams

Toyota expected to top 2002 sales, which had been 20,119 units and projected 2004 sales in the US at 36,000 units. To help manage the increased volume the 2004 Prius would be built on the same assembly line in Takaoka, Japan that is used to build four other sedan models including the Camry.

Toyota began sales in the US by offering the new Prius to those early adopters, referred to as Pioneers by Toyota, who had purchased the original model over the Internet. Still, some dealers started a waiting list and orders flooded in. When Toyota finally placed the 2004 on sale in Japan in September 2003 they took 10,000 orders in the first month; twice what they had expected.

There was a tidal wave of orders in the US as well. By the time of the official launch in October, dealers were sitting on something close to 12,000 orders. The first shipment of cars were distributed to dealers as TRAC (Toyota Rental Cars) cars, to be used as demonstration cars and rental units. Pioneer orders were filled next. "We didn't get our pioneer orders filled until mid December so we really didn't start on our order list until after that" said Dianne Whitmire, fleet manager of Carson Toyota, one of the nations largest volume dealerships for the Prius.

It was even difficult to get a test drive in one of these cars. I went into Santa Monica Toyota, another large volume Prius dealer, one Saturday morning shortly after their TRAC car arrived. It was out on a test drive and there were three other families waiting for them to return. I went back on a weekday and the car was on a test drive at one of the movie studios and would not be back for an hour. A man sitting in one of the salesman's cubicles let me know that he would be first to test drive the car when it got back.

After a few weeks the initial excitement died down and test drives became easier to find, but orders still continued to climb.

There was an initial flood of cars in the first month after the launch as the Pioneer orders were filled, but allocations slackened during Christmas and New Year and waiting lines grew. Although California received the majority of the vehicles being shipped to the US, wait times at most Southern California dealerships quickly reached six months.

In January, Carson Toyota announced that it was no longer taking deposits on vehicles because of the extreme wait time.

Still, some people were able to get their cars in a few days. This was a result of the archaic system of allocation that is used by Toyota. Toyota's primary customers in the US are the seven sales regions. Cars are allocated to each region twice per month, based on the number of vehicles that they sold previously. Most sales of the Classic Prius had occurred in California, which is why they get the lion's share.

The regions allocate vehicles to their dealers using the same principal. So a small town dealer who just happened to sell a Prius last year may get one car allocated even though they have no orders, while another dealer, who has thirty orders but didn't sell a Prius last year won't get any.

David Franklin, fleet manager at Hollywood Toyota, told me "Toyota of Hollywood is receiving the largest Prius allocation in the world, more than any other dealer. We are currently receiving about twenty cars each month. For Dianne Whitmire at Carson Toyota things have been a little more unpredictable. "Some months we get as few as six cars and other months we thirty", she said.

In some cases, people have walked in off the street at the small town dealership and found that they had a car in inventory. Meanwhile at other dealerships in the area, people wait and wait and still no Prius.

Even when dealerships do get allocations they are not based on their orders. I heard of a case recently where a dealer had ten vehicles on order and all of the prospective purchasers wanted a fully loaded silver Prius. Their allocation was a single vehicle, partly loaded in Tideland (a sort of grayish green color). None of the people on their list wanted this vehicle so some lucky person who just stopped by got a car. Meanwhile some, who ordered from the dealership in October, are still waiting.

You might think that the Toyota dealerships would be taking advantage of this high demand and jacking up the price. I have heard rumors about the odd dealership that will bypass their order list and sell to anyone willing to pay several thousand above MSRP, and some dealerships that install options like Lo-Jack on the vehicle and insist that the buyer pays for that also. One dealership in the San Diego area was selling at MSRP but wanted the buyer to purchase a Toyota extended warranty for $2000; about $1,000 over the lowest price for this plan. Surprising though this might seem, most Toyota dealerships have been selling at MSRP.

It is impossible to say just how many orders are outstanding for the 2004 Prius. In an attempt to get one, people are determining how far they are willing to travel, then contacting every dealership within that radius. They tell each dealer that they are ready to do a deal today, and give them a list of colors and packages acceptable to them. Usually they are able to find a car at one of these dealerships in a few weeks but don't always tell the other dealerships they are no longer in the market for a car.

David Franklin agrees that there are a lot of people on multiple lists. "Most of our orders are authentic though", he told me, "as we require a $1,000 deposit". Diane Whitmire also has duplicate orders. "When these people find cars elsewhere they typically tell us and we drop them from our list" she said, "we still get two new orders for each one that drops off though" she added.

Since Carson Toyota stopped taking deposits they have received four allocations of vehicles but their wait list has gone from 180 to 270. Many of these will not receive a car until the 2005 model year since waiting list time for some color and package options has now reached one year.

Some people have moved on and bought another car. One Beverly Hills surgeon was in the market for a hybrid but gave up the wait for the Prius after three months. He also looked at the Honda Civic Hybrid but passed on that because a friend was unhappy with the fuel consumption he was getting. In the end he traded in an aging Honda Civic, which he had been driving since medical school, for an Acura.

Others have moved on to the Honda Civic Hybrid and sales of these vehicles have increased considerably for the 2004 model year. David Franklin agrees, "It's mostly due to the waiting list, partly due to gas prices, and partly due to the growing understanding of the benefits of hybrids." Dianne Whitmire disagrees. "It's mostly due to fuel costs" she said, "People are just looking for lower fuel consumption".

The US manufactures have said that they don't consider the hybrid as a viable step towards fuel cells and continue to hawk their gas-guzzlers. Now, with sales of the Prius being way beyond Toyota's expectations, we are going to see more and more hybrid models in dealerships. Toyota is expected to launch a hybrid SUV later this year, the Lexus 400H, and also a hybrid version of the Highlander. A hybrid version of the Camry is slated for 2006.

Honda is following on from the success of its Civic Hybrid by introducing a hybrid version of its popular Accord. This will have a V6 Power Plant which features displacement on demand, where cylinders are shut down when the vehicle does not need the full power of the V6, such as while cruising on the freeway.

Ford is expected to finally get its Escape Hybrid into dealerships later this year although it appears that this vehicle will use Toyota's hybrid drive system. GM will also enter the hybrid market this year with mild hybrid version of the GMC Sierra and Chevy Silverado.

There is no indication yet that these new vehicles will have an impact on the long wait for the Prius. "The typical Prius buyer is not the same buyer as an SUV Lexus buyer" Says David Franklin, "Those buyers that like both will buy both". Diane Whitmire agrees, "I don't expect to see any drop in orders for the Prius when we begin selling the highlander" she said, adding "I have over one hundred people on the my list of people interested in the Highlander HEV but I don't expect more than a couple of those will trade in a Prius. What I will get is other SUVs like the Ford Explorer or Nissan Pathfinder".

It appears that interest in the highlander HEV is just as strong as it is for the Prius. Rick Hirose from Fremont Toyota also has a list of about seventy people interest in being one of the first to have a Highlander HEV. "I hope they start out with an Internet ordering system like they did for the Prius", says Dianne Whitmire, "It is much easier if they build and distribute cars to match orders when there is such a short supply".

Toyota is planning to increase production of the Prius to 47,000 for the US when they introduce the 2005 model later this year, an increase of 11,000 over the 2004 model year. "I expect to see these extra vehicles begin to appear in our September or October allocations" said Dianne Whitmire. " We should see supply catch up with demand by Christmas". David Franklin in more pessimistic, "Toyota is going to have to build more", he told me, "11,000 is not enough". He doesn't expect supply to catch up with demand for another twelve to eighteen months.

Toyota is taking some action to help alleviate the problem. "Toyota has sent out a letter to everyone who has orders at multiple dealerships asking them to cancel orders at all but one dealership" said David Franklin. "This will allow them to get a true count of the number of orders that are outstanding". It is still going to take a long time for supply to catch up with demand.

There is a lot of frustration since for many people the Prius is a must have car and the wait is so long. Dianne Whitemire says, "Please don't shoot the messenger. I get people calling every week asking where their car is. I tell them not to expect it for six months but they continue to call. I spend a lot of time looking after my Prius waiting list customers."

Personally, I think Toyota could easily sell 100,000 Prius cars per year here in the US so I don't see wait times dropping any time soon. "It is truly the car of the Future", says David Franklin, "with $20 Billion in R&D behind it the demand is justified".

I would like to see Toyota do two things. The first is to increase the build rate on the Prius to a level that will meet demand. This is not an easy task since external suppliers may not have the capacity to meet such high volumes. The second thing that Toyota needs to do is to get control of the Prius orders and begin to supply the cars that people ordered on a first come first served basis. This is also not a trivial task but it is doable as their handling of the Pioneer orders illustrated.
http://www.h2cars.biz/artman/publish/article_504.shtml

California Hydrogen Highways

By Magazine Hydrogen Cars Business, Vol. 2 No. 1

Apr 16, 2004, 17:54

California has long been a leading centre of hydrogen and fuel cell activity to insiders. Recently Californians got a new hydrogen advocate and actuator.  

It all started last September in No-Spin Zone hosted by Fox News' O'Reilly when Arnold Schwarzenegger, then Terminator – "I'll be back" – and now Governor of California, was asked about hydrogen, "I have my Hummer, for instance, " answered Schwarzenegger," and right now, I'm trying to see if we can change it, for instance, to try it out and see if it can be done; to have a hydrogen fuel cell, hydrogen fuel energy. So there's many ways of going, and I think that's where the future of fuel will be going in this state and maybe in the rest of the country," said the then campaigning Schwarzenegger.

Moving along, during the campaign Mr. Schwarzenegger made hydrogen powered cars part of his environmental plan to cut air pollution by up to 50 percent. As part of the means to achieve this goal Mr. Schwarzenegger stated that he would be prepared to "sign an executive order to ensure that California has a network of filling stations in place to allow motorists to fuel cars with hydrogen by the year 2010."

Comes the time, Mr. Schwarzenegger did become Governor of California. The Governor’s first State of the State address in early January was naturally focused on the state of the Californian economy.  In the visionary part of his speech, Schwarzenegger said he will make California the launch-pad for the extraordinary, and use his selling skills and his new title as the job-czar of California to make sure that California becomes the place where economic growth and environment can coexist. As part of the vision Schwarzenegger specifically said that he will encourage the construction of a hydrogen highway in California .

As part of taking office and in preparation of the Californian State of the State address, the new Californian Governor had made sure to team up with one of the most respected and experienced in the field by appointing the former Director of Energy Independence Now, Terry Tamminen as Secretary of the Environmental Protection Agency of California.

From Environment Now to Energy Independence Now

About three years ago the private organization Environment Now started a project to look into ways to catalyse a rapid transition to a clean, hydrogen transportation economy in California . The project also focused on reducing dependence on foreign oil whilst protecting citizens from petroleum-related health problems. Since then the Energy Independence Now (EIN) organization has evolved into a non-profit organization. Daniel Emmett, who worked with Mr. Tamminen at Environment Now, is now the Director of Energy Independence Now.

The Energy Independence Now coalition is pivotal to the development of hydrogen highways in California . It is on the analysis and vision of the organization that Governor Schwarzenegger intends to build.

The independence part of the EIN is about diversification of energy sources able to deliver hydrogen. Built on the foundation of the Environment Now, the energy sources should be clean.

"We feel that one of the key strengths of hydrogen as an energy carrier is its ability to be derived from a variety of sources; especially clean natural gas and renewable sources of energy, including wind, solar, biomass digestion, geothermal, and others," says EIN Director Daniel Emmett. 

From Busses, via Internal Combustion Engines to Fuel Cell Cars

The EIN coalition has a clear strategy to make California first. This is in anticipation that the model of introducing hydrogen on a large scale can be replicated in other states. The aim is a "2010 Vision" to guide the development of California ’s Hydrogen Highways.

Preliminary California Hydrogen Highway map intended for illustrative purposes only. Existing and planned station data may not be complete. The map is created by GreenInfo Network (www.greeninfo.org) and printed with the permission of Energy Independence Now.

In the early years (2004 - 2008), fuel cell hybrid vehicles, both buses and light-duty vehicles, are likely to be used largely in demonstration fleets in tandem with an early hydrogen fuelling infrastructure.  Internal combustion hydrogen hybrid vehicles will also be available both in fleet applications and perhaps commercially in larger numbers in the 2006-7 timeframe.  By 2010, automakers have indicated that "tens of thousands" of fuel cells vehicles will be commercially available.  In order to achieve the "2010 Vision" matching hydrogen supply and demand is important as Mr. Emmett says: "We need to make sure that development of hydrogen infrastructure maintains pace with vehicle development and commercialization."

In fact California has begun building the hydrogen infrastructure already. There are now over a dozen hydrogen stations in California and at least as many fuels cell vehicles in demonstration programs throughout the state.  According to Mr. Emmett at least nine more hydrogen stations are expected to come on line in 2004.  Most of the pieces of the puzzle are already on the table, it's simply a question of defining a vision and pulling the pieces together.  "We now have that vision in California thanks to Governor Schwarzenegger.  The Governor is expected to issue an Executive Order shortly that will further articulate his vision and how we will go about achieving it," says Mr. Emmett. 

What Governor Schwarzenegger recognizes, is that the major challenges facing California in areas of air pollution, public health, energy security, and national security are the result of over-dependence on petroleum fuels.  "Mr. Schwarzenegger sees an opportunity to deal with these problems by investing in California's ability to innovate our way to a clean hydrogen future, thus bringing jobs, investment, and continued economic prosperity to California.  We believe this vision for California is real and attainable, however, it will take time so we must begin now," says Mr. Emmett.

U.S. President Bush’s Hydrogen Initiative is about energy independence and advancement of sciences and technologies. To many, California is a leader in the areas of advanced vehicles, alternative fuels and clean energy, and Mr. Emmett is confident that the Governor and Secretary Tamminen are working to ensure that California gets its "fair share" of federal funds for work on hydrogen R&D and commercialization.

Public Private Partnerships and International Collaboration

The Energy Independence Now Coalition is advocating a public-private partnership that will work together to invest in the early infrastructure development, and to address key hydrogen commercialization challenges, including codes and standards, education and training, and permitting and citing.

"EIN believes that a public/private partnership is a good way to spread the risks and benefits of early hydrogen infrastructure development.  The public sector needs to look at how it can help set the stage for hydrogen commercialization (incentives, loan guarantees, revenue bond funding, education and training, etc) so that investment by the private sector can take place.  Thus far response has been favourable to this type of public/private partnership approach," says the Director of the EIN.

During the past few years, hydrogen as an energy carrier in the transport sector has developed from prototypes to larger demonstration projects. Although the hydrogen highways are scattered around the globe at present, much can be learned from these projects, and sharing of experiences is important to avoid expensive duplication.

"We were in attendance at the IPHE event last fall, and it is abundantly clear to EIN and the Schwarzenegger Administration, that many of the world's nations are actively pursuing a similar vision of a hydrogen economy for a range of reasons - energy security and diversity, national security, the environment, climate change, and public health concerns, to name a few."  To Mr. Emmett there is a clear momentum building to use hydrogen as an energy carrier. "We must act in California if we want to help shape what a clean hydrogen future looks like.  We welcome international partners, as we all have much to learn from each other.  We have already learned that Canada , Norway , and Japan also have visions for hydrogen highways, finishes Mr. Emmett, Director of the Energy Independence Now.