Thursday, 5 March 2009

Macro-Level Trends – London Emissions Initiative – The 'E'-Car Rental Scheme

London, it can be argued, has been one of the vanguard cities in the global effort to combat climate change. The introduction of the Congestion Charge reportedly reduced not only city-centre traffic but as a consequence lowered CO2, particulate & pollutant-levels originating from tail-pipes. Policy-makers intend to spread the coverage of low CO2 areas up to the M25 motorway boundary area by the early part of the next decade, phasing-in truck and van prohibitions and dis-incentives.

The UK Government has of course instigated efforts directed toward the automotive arena as part of its CO2 reduction manifesto, perhaps best exemplified by the LowCVP – the Low Carbon Vehicle Partnership. Now in its 5th year it's chronological experience has been one of “2003/4 over-optimism”, “2005/6/7 Uncertainty & Review” and latterly “2008/9 New Market Requirements”. Encompassing cars, trucks and buses, perhaps its primary claim to fame thus far has been the facilitator of manufacturer voluntary Fuel Economy & CO2 vehicle labeling for the new car buying public; whilst other efforts relate to Vehicle-Tech, BioFuels and Driver Awareness campaigns.

In that 5 year period, the UK has also witnessed political orientation of the local/regional governance model toward City Mayors, given the authority with making change happen and following the footsteps of New York's Giuliano & Bloomberg. For London, it's first Mayor Ken Livingstone introduced the Congestion Charge, as described, with today's current incumbent Boris Johnson ensuring that policy is expanded and supported with other initiatives. Perhaps most high-profile is the re-introduction of an updated vehicle successor to the iconic London (Routemaster) Bus of yesteryear. Something to capture the hearts and minds of Londoners and 2012 Olympic tourists - this exercise itself mimicking the previous re-modelling of the Classic London Black Taxi.

Such public transport efforts are laudable, and recognised as only one side of the CO2 coin, the more complex and problematic is that of changing the private behavior of car-buyers and the public's driving habits and expectations en mass; a hard task given the 60 years + of automotive freedom enjoyed by the masses.

Electric cars have been a small but rising contingent of London's street-scapes over the last 5 years. The qualitative PR spin witnessing Captains of Industry visiting the IoD, or the odd MP entering Westminster Palace's gates has been quantitatively backed-up by a 'band-of-brothers' of every-day users from the more progressive creative sectors (ie media, arts, design etc). Trying to spread that 'early-adopter' behavior, Boris Johnson and his No2 Kulveer Ranger mid last year set-out the criterion for an expanded use of electric vehicles under the Electric Working Group for London title; primarily focused on developing infrastructure (eg charging points). A sub-committee is the Electric Vehicles Partnership created to work as a facilitator with the auto-industry. To re-quote Ranger at the London Motor Show : “We don’t want green cars to be seen as a lifestyle choice for eco warriors. We want them to be an attractive option for everyone”.

9 months on, earlier this week, The Evening Standard proclaimed that EVs were coming, reporting that Boris is adopting a Parisian style public-private vehicle-rental 'business model' which embraces the use of both bicycles and EVs as zero-carbon personal mobility solutions.
As perhaps the first and more widely available EV, the G-Wiz sold by GoingGreen has realistically had the stranglehold on the City, the Indian manufactured vehicle appearing to be 9 out of every 10 private EVs. The YoY growth in EV sales drew in other entrants, the most notable being the NICE Car Company; which from start-up, faltered, went into receivership and was bought-over by a supplier.

NICE's attractively broad product range targeting private and commercial buyers alike, was highly undermined by very aggressive product pricing and tenuous supply arrangements & agreements aggravated credit-crunch. To illustrate, the Z-eo (an A-segment car made by China's Jiayuan) cost £14,000 and the 'toy-car' proportioned MyCar cost £8,000. NICE's commercial range was possibly even more aggressive pricing with a £44,000 electric version of FIAT's Doblo small van and other products only given a TBA regards their pricing; TBA eponymous with a lack of business model credibility and supplier 'tie-down' and possibly even product design fundamentals. An illustration of that is was the 'promise' of the electric FIAT 500-e adapted by Micro-vett. Given FIAT's global reach focus investment-auto-motives suspects that the EV concept was promoted, indeed touted, by FIAT SpA to perceptually 'keep-up' BMW's Mini-e, which at great internal cost is being rolled out. FIAT itself has showcased a 2-cylinder hybrid 500, something technically feasible vs the technical barriers to engineer a full 4 seat 500 EV (The Mini had to use the rear passenger space for the battery stack). The only truly tenable car was the Mega-City manufactured by Aixam Mega - the French 'Quadricycle' auto-maker.

investment-auto-motives long-believed that the NICE Car Company was knowingly or unknowingly viewed as a strategic 'lead-in' foot-hold by its far more powerful suppliers. This has indeed been the case, with NICE's over-ambitious plans and capital 'over-reach' leading to its demise and put into administration last November. January saw its asset acquired by Aixam-Mega Ltd (the French company's UK sub-division).

Just as G-wiz had the effective monopoly to date, so Aixam view potential for the Mega-Cit y to become the new de-riguer EV for private buyers, luring new Ev buyers and stealing re-newel customers from G-Wiz who want something designed aesthetically closer to a conventional modern car – something the G-wiz's awkward boxiness and effectively 2 seat limitations could never really do.

More-over, Aixam-Mega has gained footholds within regional local authorities such as those on the South Coast, showing their capabilities (and limitations) in the public-services domain. Thus we expect that such experiences will have been shared from county/city council to county/city council...none perhaps more interested than London Boroughs, TfL (Transport for London) and the Mayor's Office.

Thus investment-auto-motive's expects that Aixam-Mega is primely positioned to benefit from the Electric Car rental scheme now proposed. Especially so now it has the asset of the 're-born' NICE Car Company's Ladbrook Grove location in West London which can act as a regional administration and service base. It is thought that TfL itself would not want to administer the scheme, unless it has a mandate to create further departments in these high unemployment times. Better still to farm the project out to private enterprise, as councils have done with so many public-sector services; old (such as sports centres) and new (such as e-car rental).
Doing so would Allow Aixam-Mega to transpose the direct/in-direct learning gained from the Parisian Velib bike hire scheme.

In the meantime, the London Mayor will be trying to persuade the UK's Transport Secretary, Geoff Hoon, that London deserves "sizable chunk" of the £250m government money put in place to support electric initiatives. Johnson wants to see at least half the 8,000 vehicle fleet owned by the Greater London Authority replaced by electric vehicles as soon as possible.

Aixam-Mega, may not be as desperate as LDV Vans (see previous post) for the UK governmental goodwill regards electric vehicles, but Aixam-Mega will undoubtedly utilise the Mayor's initiative to maintain its UK position against its French peers of: Ligiers, MicroCar, JDM & Chatanet.