Polaris Reports Strong Quarterly Earnings for Q3 2014

Posted on October 25, 2014 by Marc Cesare

RZR XP 1000’s like the new 2015 RZR XP 1000 EPS Desert Edition helped drive sales.

Polaris reported an 18% year over year increase in revenue for third quarter 2014 driven by increases in their motorcycle, PG&A and Off-road Vehicle (ORV) divisions. ORV which includes side-by-sides and ATVs recorded a 17% increase. With another strong quarter, management raised their guidance for full-year results in 2014. Some highlights of the earnings call as it relates to Small, Task-Oriented Vehicles include:

ORV revenue up 14% year-to-date
Market share gains in the quarter for both side-by-sides and ATVs in North America adds to their #1 positions
ORV revenue was driven by side-by-sides that outpaced the industry believed to be growing at 10%
The 2 and 4 seat RZR XP 1000’s as well as the RZR 900 Trail are selling well
In the commercial UTV segment Brutus retail sales continue to grow sequentially and year-over-year for both Polaris and Bobcat
Commercial national accounts and fleet sales were strong
The Gravely Atlas UTV was launched in the quarter
Defense related ORV revenue was flat for the quarter but up 25% year-to-date with international sales of the MRZR contributing
The Small Vehicle division reported an 8% revenue increase in the quarter due to GEM and Aixam
Year-to-date Small Vehicle revenue is up 52%
GEM reported retail sales increase of 20% on action in B2B and GSA sales
While Aixam grew despite a weakening European market, Goupil revenue decreased with softness in the French economy, their major market
The Opole, Poland factory opened and will produce ORV and other products for the European and Middle East markets
International sales were helped by strong ORV sales in India and Australia
Currency issues provided some headwind in foreign markets

Learn more: Seekingalpha.com (earnings call transcript)

Comments: Despite some macro economic issues the Polaris juggernaut keeps on rolling as they continue to add market share despite increased competition in the side-by-side and ATV markets. Their large market share and subsequent production volume gives them an advantage in driving down vehicle costs and provides funding for their robust R&D budget and new model pipeline. The large number of models they market allows them to target specific sub-segments with specific vehicle capabilities and characteristics. In turn this makes it more difficult for competitors to match up on a vehicle to vehicle basis in each sub-segment.

Pricing For Green Tech Automotive LSVs

Posted on September 27, 2014 by Marc Cesare

The G2 sedan a LSV from Green Tech Automotive

Green Tech Automotive recently announced pricing for their MyCar and G2 sedan with the MyCar starting at $17,140 and the G2 sedan at $21,250. Green Tech Automotive is projecting to build 30,000 vehicles annually, down from earlier projections of 250,000 several years ago. Learn more: Torquenews.com

Comment: As the article notes, these price points are pretty high. They will be double or close to double the price of some of the other LSVs on the market. In addition these vehicles appear to be targeting the personal transportation segment of the LSV market. This is not the majority or the fastest growing portion of the LSV market. The biggest market for LSVs in recent years has been commercial/institutional uses such federal, state and local governments, colleges and universities and parks departments. As Polaris has found out with GEM this is a slower sales process than the consumer end of the market. The current LSV market does not have the demand to meet production volume of 30,000 vehicles annually. I would be surprised if Green Tech Automotive can even reach 10% of their target.

Kandi Technologies Delivers First NEVs For Shanghai’s Car-Share Program

Posted on September 5, 2014 by Marc Cesare

Kandi Technologies NEV

Last month Kandi Technologies announced the delivery of 208 neighborhood electric vehicles for the launch of the Shanghai Jinshan“Car-Share” Program. The program’s manager plans to have 3,000 to 5,000 vehicles in service by the end of 2014. The first car-share program was launched last year in Hangzou.

The car-share stations which provide a variety of services, such as charging, maintenance, battery recycling, are located at airports, train stations, hotels, business centers, selected residential areas and other places that are typically congested. A network system provides EV rental service to individual drivers in and around the city. It also provides EV maintenance and battery charging to self-service users. Lastly, a tracking system allows the Car-Share Program management to keep a close watch at the status and precise location of each vehicle.

The company expects to roll-out the program to many more cities in the next few years.

In China the vehicles for this program are sometimes referred to as neighborhood electric vehicles, they are similar but not the same as NEVs in the US. While they are small and lack some of the features of a fully functional highway capable vehicle like NEVs in the US, these vehicles from Kandi Technologies have a reported top speed of 80 km/hr compared to 40 km/hr. Learn more: Kandivehicle.com

China Low Speed Electric Vehicle Market Booming According To Report

Posted on September 2, 2014 by Marc Cesare

A Chinese low-speed vehicle.

A research report recently published by ResearchInChina estimates that 302,000 low speed electric vehicles were produced in China last year, an increase of 46.6% from the year before. The market has grown rapidly since 2009 and is marked by manufacturers and intense competition. From the report:

At present, domestic LSEV producers concentrate their production bases mainly in Shandong Province, whose LSEV output rose from 16,300 in 2009 to 175,000 in 2013 at a CAGR of 81.0%. Key players there are Shifeng Group, Shandong Baoya New Energy Vehicle Co. Ltd., Shandong Tangjun Ouling Automobile Manufacture Co., Ltd., and so on. At the same time, spurred by the robust downstream demand for LSEV, Chery and BYD have also ventured into this field.

Learn more: Reportstack.com

Comment: As we have noted previously, the LSVs in China and LSV compliant vehicles in the US are two different animals. Relatively speaking, the Chinese LSV market is largely unregulated so the quality and safety features of the LSVs are not the same. On the other hand a dynamic LSV market has arisen with a host of manufacturers and component suppliers. China is a very large market so even a niche market like LSVs can result in sizable market demand. The relatively inexpensive LSV option is appealing to those consumers who have some money but can’t afford a highway speed vehicle or don’t need that level of features and functionality. The Chinese government is also encouraging the adoption of alternative fuel vehicles.

GEM Adds Gas & LSV Utility Vehicles to Their Product Lineup

Posted on August 25, 2014 by Marc Cesare

The new 2015 Polaris M1400, a gas powered utility vehicle being sold by GEM dealers.

GEM adds an LSV version of the electric eM1400 for 2015.

The GEM brand of transport and light utility vehicle, owned by Polaris Industries, recently expanded their product lineup to include a gas powered M1400 and a street legal version of the electric eM1400, the eM 1400 LSV. The eM1400 was introduced last year. The press release follows below with more details. The base MSRP for the M1400 is $7,999 and for the eM1400 LSV is $10,999, which is $1,000 more than the eM1400.

What’s interesting from a marketing perspective is that the gas-powered M1400 is carrying the Polaris brand but is available from GEM dealers and is included on the GEM website. While GEM has always been associated with electric powered vehicles, the distribution network and brand have a strong presence in commercial and institutional venues such as colleges, universities, municipalities and parks where customers are purchasing gas and diesel powered STOVs as well. GEM’s established distribution network and experienced commercial/institutional oriented sales force is an important asset. Polaris is trying to leverage this strength to sell more non-electric commercial vehicles but, at least for now, maintain a distinction between the electric GEM brand and non-electric vehicles. This expansion will also broaden the competition between Polaris and the golf car manufacturers that are already selling both electric and gas vehicles into these markets. Historically Polaris has attacked markets by segmenting them and creating models for specific sub-segments. It is likely that they will continue to add more gas-powered vehicles as well as electrics to be sold under the GEM umbrella.

GEM^® Extends Offerings for Dealers with New Gas and LSV Models

Gas-powered Polaris^® M1400™, electric eM™1400 LSV now available through nationwide dealer network

MEDINA, Minn. (Aug. 21, 2014) – Polaris^® Industries Inc. (NYSE: PII) has expanded its GEM® line product offering of transport and light utility vehicles to include the new Polaris^® M1400™ gas-powered commercial side-by-side utility vehicle and the GEM eM™1400 LSV street-legal electric utility vehicle.

As the first gas-powered utility vehicle available for purchase through authorized GEM dealers, the Polaris M1400 is a 4×2 vehicle designed specifically for light-duty commercial utility applications. The vehicle is equipped to handle the demands of a jobsite with 1,400 pounds of payload, a cargo box capacity of 1,100 pounds and the ability to tow up to 1,500 pounds.

“Our number one priority at GEM is to help customers find the right solution for their unique needs,” GEM General Manager Tim Blinkhorn said. “It is very common for accounts to require a fleet with a mix of electric and gas-powered vehicles. By adding a Polaris engineered gas utility vehicle to our line with an extensive range of accessories, GEM dealers are ready to provide the best tool – electric or gas – for the job.”

The M1400 features a Polaris ProStar 31-horsepower engine with electronic fuel injection and reaches a top speed of 26 mph, which can be limited with the optional Polaris Speed Key. Independent rear suspension and front IFS MacPherson Strut ensures the safe and efficient transport of people and cargo even when hauling at maximum capacity.

On the electric front, the GEM eM1400 LSV has all the features of the eM1400 introduced last fall, and is also LSV compliant with a horn, headlights/taillights, turn signals, an automotive-grade windshield, a windshield wiper and three-point safety belts.

Like all of GEM’s street-legal models, the eM1400 LSV reaches a top speed of 25 mph, produces zero emissions, can be driven indoors or outdoors and on most city streets with posted speed limits of 35 mph or less.

Available options and accessories make it easy for customers to configure the Polaris M1400 and GEM eM1400 for their specific jobsite application and unique needs. Factory installed options include removable bed sides and a fully enclosed max box. Additionally, both utility vehicles support Polaris’ innovative Lock & Ride^® and Lock & Work™ accessories.

The Polaris M1400 and GEM eM1400 come with a two-year limited warranty and can be ordered through more than 250 authorized GEM dealers in North America. To set up a test ride, or for more information on the complete Polaris GEM lineup, visit GEMcar.com.

Polaris Industries Inc. Media Contact: Megan Langenkamp
2100 Highway 55 Phone: 414-292-0246
Medina, MN 55340-9770 mlangenkamp@n-s.com

GEM Now Offers Solar Panel Option

Posted on August 12, 2014 by Marc Cesare

GEM now offers a solar panel option for their models.

GEM’s new solar panel option for their models.

As part of their 2015 product line launch, GEM recently rolled out a solar panel option to supplement vehicle charging. GEM is offering two solar panel models, the Ra Power Pro 220 and Ra Power Pro 410 which provide 220 to 410 watts of energy daily to the vehicle’s battery system. The panels are manufactured by SolarDrive US and include their Maximum Power Point Tracking (MPPT) controller that has been specifically designed and programmed to work with GEM’s 72 volt battery set systems.

The panels can be factory installed when ordering 2015 GEM models: e4, e4S, e6®, e6®S, eL and eL XD. They can also be retrofitted by dealers for 2005 and newer models. Learn more: Polaris.com

Comment: The solar panel option could be particularly popular in the College/University and Parks market segment and with other commercial buyers that have green or sustainable initiatives. For dealers this option could be a nice little add to their revenue. The installed base of older GEM models at these institutions offer an opportunity for retrofitting whole fleets.

LSVs Popular In China

Posted on July 29, 2014 by Marc Cesare

A Chinese low-speed vehicle.

A recent article discusses the surprising large size of the low-speed electric vehicle market in China. With over 200,000 LSVs produced there in 2013, it dwarfs the nearly 15,000 sold in the US. Some interesting characteristics of the market include, according to the article, a complete lack of regulation. Not surprisingly, hand in hand with this is a lack of safety features on the vehicles. On a more positive note, a host of component manufacturers and innovative low cost manufacturing processes have also cropped up to support this market and enabled many manufacturers to enter the fray.

A common design for a Chinese LSV is four doors with one seat in the front and two side-by-side in the back. The seating room would be considered small by Western standards. Chinese LSVs typically use lead-acid batteries and are powered by 1.5-kW to 4-kW DC motors with a top speed of around 38 miles per hour and costs range from $2,000 to $12,000. They are particularly popular in rural areas. Learn more: Green.autoblog.com

Comment: As the article points out, the small size of the US LSV market makes it a less appealing export market to Chinese manufacturers with so much opportunity at their doorstep. A friend of mine tried for several years to import a quality LSV from China that met the US safety standards and consumer requirements. He had a difficult time finding any company willing to spend the money to do the testing and meet the standards for a relatively small market opportunity. At the time, the quality of many of the vehicles he looked at was also not going to meet the needs of the US market.

Another difference in the markets is that the US market has become more of a commercial/institutional market. In the US, many of the consumer markets where LSVs would be useful are already served by golf cars and from what I’ve seen the trend among municipalities has been to allow golf cars on public streets rather than restrict them. This negates to a large degree the necessity of having purposely built LSV compliant vehicles. The commercial/institutional buyers however are looking for vehicles with those added safety features and official designation as an LSV.

In general, international markets offer greater potential for small electric vehicles than the US. From other developing countries in Asia to urban environments in Europe, from both a regulatory and market demand perspective, these markets are more conducive to creating a substantial market for these vehicles.

Cenntro Motor To Produce Electric Utility Vehicles At Nevada Facility

Posted on June 26, 2014 by Marc Cesare

Cenntro Motors Kombi EV electric utility vehicles to be produced in Nevada.

Cenntro Motor plans to begin production of 1,650 electric vehicles at a Sparks, NV facility by August or September of this year. The $20.1 million, 150,000 square foot facility will also serve as the company’s headquarters. The facility will employ approximately 100 people and training grants along with tax deferrals were part of a $1.2 million incentive package to attract the company.

Cenntro Motors designs and builds lightweight electric commercial and passenger vehicles and their first vehicle is the Kombi EV designed for maintenance, delivery and light cargo transport. The vehicle currently comes in two configurations, the Green Space Version with a cargo bed and the City Version with a van box. Both vehicles are 2WD and use a 10 Stator KLD DC motor with max power of 12.5 kW. The vehicle’s KLD Energy Technologies oneDRIVE™ propulsion system uses a 48V system with a 6.8kW KLD Li-ion battery pack. Other key features include 800 payload capacity, 4-wheel hydraulic disk brakes, a range of 50 miles and top speeds of 31 mph for the Green Space and 25 mph for the City.

Cenntro Motors also recently acquired SITL-Brandt Motors located in Lyon, France, which will be the headquarters for their European operations. The acquisition was valued at $50 million and management plans to invest an additional $20 million. With the acquisition Cenntro’s lineup in Europe will include an all-electric CITELEC commercial truck, a two-person quadracycle and electric scooters. Learn more: Reviewjournal.com and Cenntromotors.com

Comment: The commercial/government market for small electric vehicles is attracting more attention as many companies believe this is where the growth is. From colleges and universities to municipalities and commercial entities organizations are finding these vehicles to be green, safe and cost-effective for applications that do not require traditional passenger vehicles or pick-up trucks. It continues to represent a growth segment for the STOV industry. It is also an international market with arguably better opportunities in European and Asian markets where smaller vehicles are more accepted, prevalent and have been used effectively for many years.

NHTSA Final Rule For Rear Visibility Technology Impacts LSVs

Posted on May 1, 2014 by Marc Cesare

In the future LSVs such as this one from Garia will need to have rear visibility technology.

In March, 2014 NHTSA finalized a rule requiring rear visibility technology in all new vehicles under 10,000 pounds by May 2018. The final rule

“…requires all vehicles under 10,000 pounds, including buses and trucks, manufactured on or after May 1, 2018, to come equipped with rear visibility technology that expands the field of view to enable the driver of a motor vehicle to detect areas behind the vehicle to reduce death and injury resulting from backover incidents. The field of view must include a 10-foot by 20-foot zone directly behind the vehicle. The system must also meet other requirements including image size, linger time, response time, durability, and deactivation.”

The rule would also apply to LSVs. According to NHTSA, on average, there are 210 fatalities and 15,000 injuries per year caused by backover crashes with more than half of those involving children under 5 or adults over 70.

Learn more: NHTSA.gov

Comment: While rear view technology is becoming more common in full-size vehicles, it will be more expensive to put into LSVs relative to their overall price. On the other hand, certain market segments such as the college/university market, which already purchase LSVs in part for their safety features, may be willing to pay for this additional feature. Consumers purchasing LSVs for personal transportation may not be as willing.

You could argue that many LSV models offer much more visibility than trucks or buses and full-size cars. Here are some come comments from NHTSA regarding this issue.

Like all other vehicle types covered under today’s final rule, LSVs are required to provide the driver with a rearview image meeting the requirements specified in the regulatory text at the end of this document regardless of whether the vehicle has any significant blind zone. However, like other manufacturers, low-speed vehicle manufacturers can petition NHTSA for an exemption or for rulemaking.

NHTSA did receive some comments regarding the difference in blind spots between LSVs and other vehicles. This is the agency’s response.

…the latest agency research indicate that low-speed vehicle blind zones vary greatly within this vehicle class. Some also contain significant blind zones similar to other passenger cars and light trucks. However, some others may have very small blind zones. As low-speed vehicles may have a GVWR of up to 3,000 lbs., these vehicles are also fully capable of causing injury and death to vulnerable pedestrians. As backover crashes do not typically occur at speeds above 25 mph (the top speed of low-speed vehicles), we believe it is appropriate to include low-speed vehicles in today’s final rule. Further, the agency requested comment on low-speed vehicles in the NPRM and sought information as to whether the agency could reasonably conclude that low-speed vehicles present no unreasonable risk of backover crashes, but nocommenter provided any substantive information on this point. Therefore, the agency cannot reasonably exclude, as a category, low-speed vehicles from the requirements of today’s rule because the available information

The agency estimates the cost per vehicle of such a system will be $132 to $142. However, this includes some assumptions of manufacturing efficiencies and volumes which are more likely to accrue to high volume full-size vehicle manufacturers than lower volume LSV manufacturers. For LSV manufacturers the best approach to this issue may be to petition the agency for specific models or hope that they may share some in some of the cost reductions the rest of the market creates or that future technology becomes less expensive.

Another market response may be for consumers to switch to golf cars or utility vehicles. From SVR’s scanning of road use regulations, more municipalities are allowing golf cars and UTVs varying access to public roads, not just LSVs. This regulation will only add to the cost differential that consumers consider between LSVs and these other vehicles, especially new or used golf cars and lower priced UTVs.

Road Use Regulation Roundup – April 2014

Posted on April 30, 2014 by Marc Cesare

Some trends in this latest regulation roundup:

There appears to be less ordinances being passed than in the past.
Iowa experienced the most activity in this latest review.
The trend towards more inclusive ordinances is continuing as allowing golf cars, UTVs and ATVs are the focus of many of the ordinances.
There appears to be more regulatory activity with regards to UTVs and ATVs than low speed vehicles.
While people are still expressing safety concerns about these vehicles being used in mixed traffic situations, they seem to be in the minority and most municipal boards are passing ordinances.

Britt, IA – The city council passed a low speed vehicle ordinance after considerable discussion on whether or not to include golf cars and utility vehicles. The ordinance allows any low-speed or utility type vehicle to be operated on any city street as long as the operator has a driver’s license and obey traffic laws and police. The vehicle must also have approved working lights and other safety features and be registered with the Britt Police Department. The ordinance also covers motorized carts, motorized scooters and electric scooters, although they have a few more restrictions.

Buchanan County, IA – According to the new ordinance, registered ATVs or Off-road Utility vehicles may be operated on gravel roadways in Buchanan County. The main section of the ordinance states, “In the event that a person residing on a county blacktop wishes to operate an ATV or Off-Road Utility Vehicles on the gravel roadways, said person may operate on the shoulder of the county blacktop for a reasonable distance to reach the permissible county gravel roadway. Such operation may begin one hour after sunrise and must cease one hour before sunset. …”

Washington County, IA – Washington County Board of supervisors approved an ordinance to allow all-terrain and off-road utility vehicles on county graveled roadways and Level B roadways. The ordinance does not affect the current use of such vehicles for farming purposes. Only those 16 years and older and holding an Iowa driver’s license will be allowed to operate the vehicles and the vehicles must also be registered by the Iowa Department of Natural Resources and by Washington County and will not be allowed to carry more passengers than they were designed for. Such vehicles can only travel on the shoulder of a paved county highway until they reach the next gravel road and can only be used between sunrise to sunset. Those opposing the ordinance cited the Specialty Vehicle Institute of American (SVIA), a not-for-profit association representing ATV manufacturers and dealers, which has a strong policy statement against the use of ATVs on public roads. The SVIA states that ATVs are not designed for use on paved surface because of the negative affect on handling and control.

Bronson, KS – Bronson City Council approved an ordinance allowing special purpose vehicles to operate within the city. The special purpose vehicles include all-terrain vehicles, work-site utility vehicles, micro-utility trucks and golf carts. The board also approved picking up general purpose liability insurance in conjunction with the special purpose vehicle ordinance.

Leesburg, FL – City commissioners voted unanimously to allow golf carts, utility vehicles and low-speed vehicles on city-owned and maintained streets in the downtown area. Commissioners are concerned about safety though, so they are requiring that drivers be at least 18 years old in order to have more driving experience.

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