Last week, with fanfare and former president Bill Clinton in attendance at its newly opened plant based at a former elevator factory in Horn Lake, Miss., GreenTech Automotive outlined plans and noted its first order for around 20 of its MyCar Neighborhood Electric Vehicles to Dominoes Pizza Inc.
This development follows headlines made last year by former chairman of the Democratic National Committee, Terry McAuliffe, when he announced the company founded by him and Wall Street Capital Markets attorney Charles Wang.
GreenTech says it has also made a deal with Danish company, Greenabout, to distribute American-made MyCars in Denmark. And according to the company’s Web site, the goal is to go from building NEVs to introducing a line of true road electric and plug-in hybrid vehicles that are fully EPA and NHTSA compliant, unlike the initial run of NEVs.
“Production of MyCar and its derivatives, plus the all-new vehicles to be added to the product portfolio will lead to the formation of 5,000 new direct and indirect jobs in Mississippi and the vendor base nationwide,” GreenTech boldly says on its Web site.
McAuliffe was also quoted by Automotive News further touting initial production goals, yet declining to divulge how much the company raised to fund a second plant slated to open next year in Tunica, Miss.
“We’ve got to get 10,000 built over the next year,” he said. “If we can get up to 10,000 the first year, that’s a big deal.”
However, despite being a dab hand at fundraising and an energetic public speaker with oodles of charm, McAuliffe is a newcomer to the automotive game and based on some of his statements, the odds appear to be considerably stacked against GreenTech succeeding as a significant vehicle manufacturer in the long term.
For one, NEVs represent a very small segment of the market; in 2010 just 25,600 were sold in the U.S. according to data released from International Market Solutions. Furthermore, they’re restricted to roads with speed limits of 35 miles per hour or less and don’t fall under the same umbrella as regular cars and light trucks when it comes to crash standards.
In fact, the Insurance Institute of Highway Safety sees NEVs as potentially a major problem; pointing out that in a collision with a regular vehicle, the chances of the NEV occupants surviving is marginal at best. Areas around the country where such vehicles are used in retirement communities, like Arizona and Florida are seen as being notable potential black spots.
If more and more of these vehicles do hit the roads in the coming years, meaning they come more frequently in contact with regular vehicles, then it is very likely they will have to be subjected to stricter crash standards, which could make it very difficult for companies like GreenTech to market and distribute them in the US.
MyCar was originally developed by a Hong Kong-based firm before GreenTech acquired rights to the project in 2010. GreenTech has repeatedly issued bold statements saying it plans to build 100,000 MyCars at a cost of $10,000 each.
However, when asked about a specific timeframe, McAuliffe and his company have been reluctant to disclose exactly how long, stating that it is “a cumulative sales figure over time.”
What’s more, the price for the Smart ForTwo-sized NEV was more recently estimated to cost between $15,000-$20,000. The runabout is limited in the U.S. to just 25 mph, and may go 115 miles on a charge. In places in Europe such as Denmark, where such an idea has greater appeal, top speed is 45 mph.
GreenTech’s staff is reportedly comprised of fewer than 100 employees and there are many that are questioning its ability to go from making NEVs to fully functioning and compliant road vehicles, not least of which is The Truth About Cars which has been uncovering strange bedfellows in the dealings for some time now.
Sticking to more basic obstacles, one could also look at typical R&D costs and how much effort is normally required to bring vehicles – such as the planned plug-in cars it says it will – to market. As a point of comparison, General Motors hired around 2,000 engineers alone to help bring its advanced powertrain technology within the reach of consumers.
Further, with GreenTech stressing repeatedly that it is “well financed,” while so far declining to reveal the source of its funding as well as scaling back timed introduction of its “road vehicles” from 2013-14 to an undisclosed date, it’s understandable why some are viewing its plans as pie in the sky.
But as has also been said more charitably by others, it would all be nice, and some have wished GreenTech well if it can pull it all off as promised without relying on federal loans or grants like other startups.
What do you think?