A recent bill passed by the US Congress will allow manufacturers of three-wheeled vehicles to qualify for US Department of Energy funding. Once the bill is signed by President Obama as expected, manufacturers will be eligible for funding, but approved on a case-by-case basis. The three wheel vehicles must be enclosed, carry two adults and get at least 75 miles per gallon. Learn more: Autobloggreen.com
In a speech this week the US Secretary of the Navy identified five key energy targets for the Navy to meet by 2020. One of these goals is to reduce petroleum use in their commercial fleet of vehicles by 50% by 2015. The fleet numbers approximately 50,000 vehicles. As the vehicles are retired the Navy expects to replace them with hybrids, flex fuel and low speed vehicles. Learn more: Greencarcongress.com
Comment: When the Army first announced their plans for purchasing LSVs they mentioned the Air Force and Navy possibly piggybacking on their efforts but this is the first time we have seen any official statements about the Navy acquiring LSVs. While the Army’s initial purchase is 4,000 LSVs over three years, they noted that 10,000 vehicles could eventually be purchased and estimated a similar amount for each the Navy and the Air Force. I would expect the Navy’s acquisition would boost demand for LSVs in the range of 1,000 to 2,000 vehicles per year over the next five years. With the Army and Navy on board the Air Force may also follow suit and make the US military a major factor in the market. – Marc Cesare
Last week the South Korean government announced plans to accelerate the development of the electric vehicle industry in their country. Revised plans now call for full-scale production of electric vehicles in 2011 instead of the previous target date of 2013. The government views the competition to develop the next generation of automobiles and grab market share as important to South Korea’s long term economic health.
A range of automobiles including hybrid, plug-in and fuel cell powered will be supported. The target goal is for South Korea to account for a 10% share of the global EV production by 2015. Ironically, the country does not currently allow EVs to be operated on any roads. However, as part of this initiative, the parliament is passing legislation to allow EVs including NEVs to be driven on the country’s roads. Learn more: yonhapnews.co.kr
I came across a couple of stories in the last week that I believe are representative of two key market segments for LSVs: municipalities and universities, as well as the versatility of the vehicles.
In the first, the city of Hoboken is looking to replace full size vehicles in their parking enforcement department with LSVs. For the municipality the key factors are a significantly lower capital cost for the vehicle, drastically lower operating costs and reduced maintenance costs. A secondary consideration are the environmental benefits.
“I’m very concerned about saving money for the city of Hoboken and saving the environment and I think it’s really going to reduce costs,” said Hoboken acting Mayor Dawn Zimmer after completing her ride around town.
The vehicles will mainly be used for transporting the meter readers but their configurations will also allow them to carry the necessary equipment for booting cars.
Learn more: NJ.com/hobokennow/
In the other story Princeton University is replacing small pickup trucks with LSVs configured as utility trucks. A driving factor in their decision is the university wide goal of sustainability. They are impressed by the efficiency of the vehicles and the reduction in gas consumption that can be realized.
“Electric cars are much more efficient. They use less energy to travel the same amount of miles as a gas-powered vehicle,” said Roger Demareski, the assistant vice president for facilities for plant, who oversees the pilot program.
In order to expand the streets the vehicles can be legally driven on the university had to work with the local towns to change their LSV ordinances. Some towns only allowed LSVs on streets with a 25 mph speed limit but a shift to a 35 mph limit allows vehicle access to all parts of the campus.
In both cases the LSVs are replacing gas-powered vehicles and they represent important market segments for LSVs, especially in a slow economy. The cost savings realized by the vehicles, the environmental benefits and various federal and state funding available for these type of vehicles help drive these market segments while others may be faltering.- Marc Cesare
Based on stories from around the country, the federal tax credit for new plug-in electric vehicles purchased during 2009 is providing a significant boost to LSV sales. The tax credit is included as part of the Emergency Economic Stabilization Act (EESA) and is credit of $2,500 to $7,500 for a four wheeled vehicle that draws propulsion using a rechargeable battery with at least four kilowatt hours of capacity. The base credit is $2,500 and increases depending on the size of the battery pack. An additional $417 is added for each kilowatt hour above four kilowatts hours. For many LSV this equates to a tax credit of roughly $4,000 to $6,000 depending on the brand of LSV and the battery pack option chosen.
A Tomberlin dealer in Oklahoma has reported a “dramatic” increase in sales, Bad Boy Buggies is hoping to launch their street legal vehicle shortly to take advantage of the tax credit fueled demand and in a recent story out of South Carolina a dealer reported a sales jump from 10 to 60 vehicles per month because of the tax credit. South Carolina adds a state tax credit equal to 20% of the federal tax credit and Oklahoma adds a 50% tax credit for electric vehicles. In addition, the major LSV manufacturers are all prominently touting the tax credit on their websites, often with the specific tax credit available for each model. Learn more: SCNow.com
The French government recently announced a plan to invest $2.2 billion to develop battery-charging infrastructure for electric vehicles. The plan will also require office and apartment building developers to start including recharging stations in projects with parking lots. By 2015 the government expects 50,000 to 100,000 electric vehicles to be part of private or government fleets. Learn more: Wall Street Journal
According to Trailer-bodybuilders.com:
The National Highway Traffic Safety Administration (NHTSA) issued a Notice of Proposed Rulemaking (NPRM) proposing to place a requirement in the Federal Motor Vehicle Safety Standards (FMVSS) that motor vehicles 10,000 lbs. gross vehicle weight rating (GVWR) and below, excluding walk-in vans with an automatic transmission that includes a “park” position, manufactured for sale after Sept. 1, 2010 be equipped with a brake transmission shift interlock (BTSI).
This interlock will require that the service brake pedal be depressed before the transmission can be shifted out of “park” and will function in any starting system key position.
NHTSA is issuing this document in response to a statutory mandate in the Cameron Gulbransen Kids Transportation Safety Act of 2007.
Based on changes to which type of vehicles would be covered by the regulation, low-speed vehicles would have to meet this proposed requirement. Learn more: Trailer-bodybuilders.com
Wisconsin’s Department of Natural Resource’s (DNR) pilot program that allowed utility vehicles to use ATV trails in five counties ended on September 30th. The results of the program must be reported to the legislature by January 1, 2010. The five counties involved include Florence, Sawyer, Marinette, Lincoln, and Washburn. Learn more: wkowtv.com
Comment: The potential opening of more trails is important to the utility vehicle market. The relative lack of trail access compared to ATVs is one reason some people point to as why utility vehicle sales may never surpass ATVs, although they have been stealing market share from ATVs over the years. – Marc Cesare
A recent article in the Wall Street Journal reports about the increasing use of LSVs/NEVs on public roads and the safety concerns the trend raises. The article mentions two factors that could adversely affect the market in the future. First, the IIHS may start conducting crash tests of LSVs with passenger vehicles. Second, the National Highway Transportation and Safety Administration (NHTSA) is investigating how to more tightly regulate the vehicles. NHTSA concerns include lower crash testing standards for LSVs, mixing with larger and faster vehicles on public roads and the removal of speed governors by some LSV owners. Learn more: WSJ Online
The Oklahoma Tax Commission has withdrawn the ruling of September 17th that would have prohibited buyers of certain electric powered vehicles from qualifying for a substantial tax credit. Roger Gaddis, owner of Ada Electric Cars, sued the commission last week over the ruling. The reason for reversal, according to the tax commission, is that the ruling was meant to clarify the original ruling, but instead created more confusion. This is what spokesperson Paula Ross had told me about a week ago. Going forward tax credit qualifications will be based on the original rulings. Learn more: Edmondsun.com