Plugged in to the next big thing (The Gazette) 27 May '11
(Original article can be found in the Gazette here)
Andrew Saul has seen electric vehicle manufacturers come and go. But the CEO and founder of Genovation Cars believes his Rockville company will beat the odds.
"We have carved out a unique space for us," Saul, a former banker and son of real estate magnate and former banker B.F. Saul II, said in the company's offices in an industrial area off Gude Drive. "I think we have a good shot of making it."
With gasoline prices hovering near $4 a gallon and a federal goal to put a million electric vehicles onto America's roadways by 2015, Genovation stands on the cusp of what could be a transformation of the automotive industry. And it's not the only business involved in this wave in Maryland. General Motors is building a new electric motor plant in the Baltimore area. Maryland auto dealers are starting to showcase and sell hybrid and full-electric cars such as the Chevrolet Volt and Nissan Leaf, respectively.
The wave means jobs. The GM plant is expected to create 190 positions after its planned opening in 2013. Genovation will need 125 workers per shift to hand-assemble its vehicles in a plant planned in Maryland by late 2013, said Saul, who spent a decade researching how to improve the internal combustion engine.
"We want to do our part to bring green jobs to the state," Saul said. "Maryland is a great state to do this type of work."
Back to the future
Electric vehicles were 10 times more popular than gasoline-powered cars in the late 1890s, according to the Electric Auto Association of California. But motorized assembly lines and easier starting devices for gasoline vehicles led to the decline of electric production.
As electric cars attempt a rebirth, they have not set gangbuster sales records. But the demand is there, with waiting lists for several vehicles. North American sales of battery-electric vehicles are expected to rise from almost 11,000 this year to at least 100,000 by 2020, according to research company J.D. Power and Associates. Other estimates show higher sales by 2020.
North American sales of the all-electric Nissan Leaf, which has been available for test drives at Darcars Nissan in Rockville and other dealers, almost doubled in April to 573 from 298 in March, according to Nissan. Sales of the Chevrolet Volt, an electric-gas hybrid sold at dealers such as Criswell Chevrolet in Gaithersburg, fell in April to 493 from 608 in March, though April saw the second-biggest monthly sales since delivery began late last year, according to GM.
The number of electric and hybrid models available to consumers is expected to grow from about 30 now to more than 150 by 2016, according to J.D. Power and Associates. With more people taking delivery of the Volt and others, there is likely more than 100 electric vehicles operating in the Baltimore-Washington, D.C., region, said Charlie Garlow, vice president of the nonprofit Electric Vehicle Association of Greater Washington, D.C. They range from a 1903 Baker Electric to vans and pickup trucks operated by utilities Pepco and Baltimore Gas and Electric.
Saul and Jeffrey Abramson, a partner of Rockville developer the Tower Cos., are among those on the waiting list for new vehicles such as the Volt.
"There is a finite amount of fossil fuels, and biofuels can only go so far," Saul said.
The cars could induce some sticker shock, though there is help in the form of a $7,500 federal tax credit and state credits. The Leaf starts at $33,630, with the Volt several thousand dollars more. Genovation's planned G-2 coupe will retail at $60,000 as a higher-end green competitor for Audi and BMW, executives said.
"It will fit four adults comfortably," said Steve Rogers, president and CTO of Genovation. Plus, it incorporates environmentally friendly features such as natural rubber tires and seats made from recycled plastic bottles, he said.
Consumer concerns over purchase price could hinder the industry's growth, said Mike VanNieuwkuyk, executive director of global vehicle research at J.D. Power and Associates. "The bottom line is that most consumers want to be green, but not if there is a significant personal cost to them," he said.
Genovation hopes to produce 1,000 G-2's annually.
"We are the only locally owned, federally certified company to make cars in Maryland that I know of," Saul said.
Between now and planned production, Genovation needs to locate more investors and apply for federal and local grants, Rogers said. He estimated the company needs at least $100 million more to start production.
Among its research and development partners is Tata Technologies, part of the Indian automaker that owns the Jaguar brand. Tata is the prime contractor on the design and development of the G-2.
