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CycleElectric
Newsletter 8/17/2001
This Issue:
What Happened to Total EV?
Tomb Raiders Electric Scooters are in the USA
Parts For Electric Vehicles for Manufacturers
Information On The Legal Status Of Electric Bikes And
Scooters World Wide.
Employment Advertisements
CycleElectric Newsletter is written and edited by Ed Benjamin of CycleElectric
International Consulting Group.
This newsletter focuses on the electric bicycle and scooter industry,
and the views and opinions expressed are those of the author. Readers
should be aware that Benjamin’s opinions influence the selection
and presentation of material in this newsletter.
What Happened to Total EV? (1998 – 2001)
One of the most important factors in the light electric vehicle market
over the past couple of years has been the activity of Total EV.
Originally formed by an American electric utility company called CSW,
Total EV was a strategic move to increase use of electricity.
Millions of dollars of capital were committed to creating a distribution
company that would sell electric bikes, scooters, chargers, NEVs, and
other transportation oriented products.
Total EV lined up an all-star cast of suppliers. These included BIKIT,
Currie, EV Rider, EV Global, Condor, Wahlinger, Merida, HCF, Heinzmann,
Mercedes, MZ, Montague, Zap, Sunpex.
The sales force consisted of up to 50 outside independent reps, and two
inside sales managers. In 99 and 2000 TEV was a highly visible exhibitor
at trade shows.
Most of TEV operations were contracted out. Service was performed by LEVT;
vendor relations by CycleElectric, Graphics and advertising by Brothers
& Co, Warehousing by PMI, and even most “employees” were
actually independent contractors, or temps.
Offices were located in both Dallas and Tulsa. Warehouses were located
(at one time) in Dallas, Tulsa, and Louisiana.
However, another utility company called AEP, with the transaction becoming
final in 2000, acquired CSW. AEP did not want to be in the electric vehicle
distribution business, and TEV was slated to be sold off, in the fall
of 2000.
However, TEV continued to aggressively do business while AEP consolidated
the CSW acquisition, continuing to buy product and contract for services.
In early 2001, TEV, still unsold, was--reportedly--ordered to be sold
by the end of March 2001. At this time, most of the vendors became aware
of the fact that TEV would not continue as they had been expecting. Orders
were being cancelled, and rumors of an impending fire sale started.
The timing was unfortunate. This observer believes that if TEV had been
allowed by AEP to continue to pursue the original business plan, TEV would
be the dominant supplier of electric scooters in the currently vigorous
electric scooter market in the USA. The original strategic thinking was
on target, the timing was almost perfect, and the difficulties primarily
those of operations.
In March, remaining independent reps received notices that their contracts
were cancelled, and some TEV employees were laid off.
All of the TEV vendors found themselves without the sales representation
that they had expected. Instead of promotion of their respective products,
they were faced with prospects that a large stock of their goods might
be sold at a fraction of their value – making it difficult to find
a new distributor, and perhaps devaluing the perceived value of their
products forever.
For most of these companies, a crucial year was put on hold while TEV
sought a buyer.
A tiny inside sales force and reduced prices drove sales as TEV looked
for and talked to possible buyers.
A major obstacle to the sale was the size of the inventory. TEV had purchased
inventory that--according to various reports--ranged from 10 to 14 million
dollars at cost. Almost all of it was delivered in the second half of
2000, and was intended for sale during the 2001 season.
Not many suitors had that much cash, and any inventory that contains lead
acid batteries has a clock ticking on the value of the inventory.
Negotiations did not succeed until August 2001, when a California importer
of electric scooters made an offer that TEV was reported to accept.
However, this writer spoke to the purported buyer on the 15th, and was
told that, at that moment, the deal was off.
As of the day of this writing, TEV is offering most of the remaining inventory
at very low prices, some of it well below half of what TEV paid for the
inventory, to the original vendors, other distributors, dealers, and AEP
employees.
There will be further stories about the fate of TEV.
Here are some speculations about the impact of TEV on this industry.
The good part: TEV gave a financial shot in the arm to this industry at
a crucial time. The many millions of dollars that TEV injected into Currie
and others probably saved their companies, and helped launch a new industry.
This is a very good thing for Americans who will enjoy electric mobility
a little sooner than otherwise. TEV also caused to happen, a service that
was badly needed: the LEVT Service Center is a telephone call center that
provides warranty service for TEV (and others), and this is an essential
piece of infrastructure for the continuation of the industry. LEVT has
done a great job, and makes it possible for otherwise impossible problems
with product to be quickly and easily resolved. LEVT is not part of TEV,
but rather a contractor. (levtusa@aol.com)
As many as 30,000 pieces of electric bikes and scooters have been or will
be sold at a steep discount. Most of these have aging batteries. (Lead
acid batteries that have not been charged regularly – or at all –
that are more than 3 months old are likely to be substantially deteriorated.
Since most of the TEV inventory has been stored in warehouses in Dallas
TX, and in Louisiana, the batteries have been subjected to relatively
high temperatures, and this would accelerate the deterioration process.)
There is a risk that 30,00 some consumers will have two experiences that
are negative – buying the product very cheap and thinking that this
is a reasonable price, and then not having the product work properly because
the batteries are deteriorated—leading them to think this is normal
performance for light electric vehicles. And not being happy with the
vehicles.
A year has been lost for Taiwanese and European companies that expected
representation in the USA. These companies are committed to the electric
vehicle business, but it is likely that they will look for distribution
that they are in complete control of for the future.
Tomb Raiders Electric Scooters are in the USA
A good, reliable, scooter that works well, for a fair price. Exactly in
time for Christmas.
Right now, many inexpensive electric scooters are being offered via mass
merchants.
Many of these low price units are being returned. They are unproven first
generation products, at an unrealistic low price. Both manufacturers and
retailers are learning that a cheap scooter doe not necessarily work.
There are exceptions; some of the Chinese scooters are handled by importers
such as Rad2Go that focus on developing good products.
However The Tomb Raider is manufactured by one of the most experienced
Taiwanese scooter makers – Sunpex.
Tomb Raiders are built with strong frames, aluminum decks, powerful motors
and are attractively styled to as the official licensee Tomb Raider product.
This author believes that there are going to many thousands of young people
who take a broken (cheap) scooter to their parents and say “I like
electric scooters, but this one does not work. Please get me one that
works.”
These are the scooters that work, and will keep on working.
Parts For Electric Vehicles for Manufacturers
Motors:
Our favorites are currently the MAC BMC brushless DC motor for cylindrical
applications, and the Heinzmann for hub motors. (www.estelle.de)
Controllers:
Agile Systems of Canada has a good controller that works on most bikes
and scooters, for a great price.
Batteries:
Out of the many hundreds of battery makers in the world, Long Battery
of Taiwan stands out as the most experienced provider of lead acid batteries
to light electric vehicles built in Taiwan.
And the Moltech Sintered NiMH cells are our current favorite for more
advanced battery packages.
Small parts:
When building or repairing electric bikes and scooters, a lot of makers
pay attention to the big things, and then are caught short needing small
parts such as switches, throttles, lights, etc.
Our favorite contact for such items is Louis Shih of EV Plus. Drop us
an email if you would like to contact Louis.
Information On The Legal Status Of Electric
Bikes And Scooters World Wide.
Check out www.extraenergy.org
and look for the downloads from the Pedelec and E bike congress in Taipei.
Also, check out the promotional and educational opportunities for manufacturers
of electric bikes and scooters at the Test It track at IFMA. This trade
show in Cologne Germany is usually the best place to see all the world’s
electric bikes and scooters.
Even motor and other component makers can benefit from the static displays
at the track.
(Paid) Employment advertisements:
Independent reps wanted to sell Tomb Raider scooters to retailers.
Quality product, great service and warranty backup, high commissions.
Please send Resume to ebenjamin at cycleelectric
dot com and your resume will be forwarded to the advertisers.
Retailers wanted to sell Tomb Raiders. Great margins, great product, warranty
and service back up. Please send message to ebenjamin
at cycleelectric dot com and it will be forwarded
to the advertisers.
Copyright CycleElectric International Consulting Group. USA
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