A Reader’s Business Plan Contemplates Converting Gas/Diesel Powered Cars and Trucks to Electric Vehicles
A fellow by the colorful name Ulysses Pascal wanted my opinion of his plan to convert internal combustion engine-based cars and trucks to electric vehicles. With his permission, I thought I’d publish our conversation and see if other readers have any feedback:
Ulysses: I am at the very beginning of my journey in entrepreneurship. From my perspective we need to reduce our dependence on combustion engines, and electric cars are currently the most reachable alternative. However, there are still issues with economies of scale and even the most affordable electric vehicles are either out of the average American’s budget or do not square with their needs. My concept champions a can-do attitude that will not wait for established manufacturers to turn to electric vehicles.
The concept is electric vehicle conversions BUT there is a twist. I know most electric vehicles on the road currently are gas to electric conversions so the basic technology isn’t new or innovative. What is different about my idea is the business model. The companies that are currently doing this are for the most part custom mechanics that do small scale jobs for individual clients.
My company would solicit tax deductible donations of old cars and convert those cars to electric vehicles, which would be leased with a warranty on the electric motor. The company would accept any car as a donation but would only focus on converting specific popular makes and models. Cars that aren’t converted would be parted or scrapped for alternative revenue streams.
As somebody who lives and breathes green businesses strategy you are obviously more knowledgeable about this field than I am. Could I ask you to share some of your insights?
Craig: You say you’re starting out on a journey, and your name is Ulysses? Right off the bat, I have to say that I like that! You’re in good company.
Seriously, let me see if I can offer you some advice. First, you may know that Andy Grove (Intel founder) had a similar idea, i.e., to do ICE-EV conversions on a large scale, but I haven’t heard much about this recently. If you Google this, I’m sure you’ll be able to learn something of value.
At the end of the day, I’m not sure there is a practical way to do this. In particular, I see three main problems.
1) Only a fraction of the cars and light trucks on the road are really good candidates for conversion, due to the size and location of various elements of their drive trains.
2) The cost of new EVs from current OEMs (e.g., Nissan and Tesla) and those to emerge in the next couple of years (BMW, Mercedes, and everyone else and his dog) are going to put huge competitive pressure on your idea.
3) 501(c)3s, i.e., non-profit organizations, offer to take automobiles as well, but donors can write off the full (often exaggerated) value of the car or truck; unless you too are a non-profit, you won’ be able to make that offer.
In any case, good luck! You sound like a very cool person. Love your name, btw. Blaise Pascal was one of the smartest people who ever lived, and who doesn’t love the tales of great Ulysses/Odysseus?
Ulysses: Thanks for the response Craig. I wish I could live up to the intelligence of Blaise Pascal or the cunning Odysseus. My responses in reverse order:
3) I am thinking that this would be a non-profit. Guess it all depends what the goal is. From my perspective the goal isn’t to make a ton of money but to drive down the price of EV technology so the consumers can get out of the catch 22 they are stuck in.
2) EV conversions are still half as expensive as new EVs. Hopefully I could turn up the competitive heat on the established players. Plus even if they are increasing supplies, their ad departments are going to be increasing demand/desire for EVs. I think they will be opening up a niche that large scale conversion could fill.
1) Yes, I would have to focus on particular makes and models at first. But as the market for EV technology/battery technology grows we can expect stronger & smaller batteries, opening up other types of cars for conversion.
Craig: Good stuff. I’ll ask readers to comment from here if they have any suggestions.
