Over the past two years, CalCars' has shifted
from "Putting Plug-In Hybrids on the Map" to
"Successful PHEV Commercialization ASAP. Every
word in that phrase is important -- and none more
than ASAP. How can we get enough plug-in cars on
the road quickly enough to have an impact on
climate change and energy security -- ideally in
the next decade? When we run the numbers, we
realize how challenging that is. We've concluded
we can't do it with new cars alone. Conversions
of hybrids has always been mostly about building
awareness and support for mass-produced new
PHEVs. The Next Big Think -- conversions of
internal combustion engine vehicles -- will be
about rapidly increasing market penetration.
We've completed an analytic report that supports
that approach in two ways: first, attaching
actual projections to Andy Grove's "strategic
inflection" idea, and second, in a timely
response to the increasing support for a national
"cash for clunkers" bill, showing that in many
cases, retrofitting may be a better option in
terms of energy to spending government funds to
crush cars. WE HOPE TO BEGIN TO ASSEMBLE A BROAD
COALITION SIMILAR TO THAT FOR PHEVS IN SUPPORT OF
THIS STRATEGY. Below you'll find the Summary, a
Plain-Text version of the report, and links to
the full HTML and PDF versions of the report --
including charts that graphically illustrate the idea.

(Shortly after it goes out on email, this posting
will also be viewable at
http://www.calcars.org/news-archive.html -- there
you can add CalCars-News to your RSS feed.)

CASH FOR CLUNKERS PAVES THE WAY TO RETROFIT GAS GUZZLERS

For complete versions including charts, see
http://www.calcars.org/scrap-or-retrofit.html
HTML or
http://www.calcars.org/calcars-scrap-or-retrofit.pdf.
EIGHT PAGE PDF. (A text version and link to PDF
is also found at EVWorld.com
http://evworld.com/article.cfm?storyid=1689 . See
author information at end. And see
http://www.calcars.org/ice-conversions.html for
our video, past news postings, and info on
prototypes and demonstration conversions.

SUMMARY: Analysis compares two policy options for
vehicles already on the road -- 250 million in
the U.S. and 900 million globally -- that will
continue to burn fossil fuels for decades.
Large-scale, properly tuned policies can
substantially reduce these vehicles' carbon
footprint. Two solutions focusing on older
low-efficiency vehicles are scrappage programs,
which are gaining increasing support in many
countries, and conversions to plug-in hybrids
(PHEVs) and all-electric vehicles (EVs), an
emerging new option. This paper by the California
Cars Initiative, a U.S. NGO, describes the
characteristics of conversion architectures and
the performance of early prototypes. It also
details the results of its analytic model,
quantifying projected market penetration of new
and converted plug-in vehicles from 2010-2050. It
combines this with a second model, based on GREET
and other sources, to evaluate these vehicles'
potential contributions to reduced oil use and
CO2. This model factors in energy used in
building vehicles as a percentage of lifetime
energy use and evaluates ways to conserve this
embedded energy. Derived from these comparisons,
a dual strategy combining scrappage of some
vehicles, and converting many pickups trucks,
SUVs and vans to plug in, emerges as a way to
maximize the value of public funds. Two policy
initiatives that can together significantly
reduce oil use by 2030, and help launch a new
global industry in the process -- difficult to
achieve solely with new plug-in vehicles -- are:

* to increase government tax and other incentives
for certified converted vehicles to match those
already in place for new plug-in vehicles
* to apply scrappage in a focused way so that
each scrapped vehicle's replacement has at least
double its efficiency, and so that instead of
crushing them, sound though inefficient vehicles
can instead be converted to plug in.

INTRODUCTION: SCRAPPAGE EXPANDS ITS AIMS

An old idea is coming back -- with a new twist:
governments are paying to buy up and recycle or
crush old, high-emissions, low-efficiency
gasoline vehicles. "Cash for Clunkers"
(legislators call them "scrappage") programs,
devised to get the dirtiest vehicles off the
road, are now also seen as a way to get two more
wins: improved fuel-efficiency and boosted new
vehicle sales. Both President Obama's Automotive
Task Force and the U.S. Congress see this as a
lifeline to domestic automakers. Over a dozen
other nations have been motivated to develop scrappage programs.

The vehicles already on the road -- 250 million
in the U.S. and 900 million globally -- will
continue to guzzle fossil fuels and spew carbon
dioxide for at least another decade or more. At
last, people are realizing that their impact can
be lessened. But it will take large-scale,
properly tuned incentives. In a broad survey, we
explore how scrappage works and consider the
implications of current proposals. Then we go a
step further, asking, "For some vehicles, might
there be a more effective use of a U.S. $3,000 -$6,000 incentive?"

We introduce an innovative, game-changing option,
largely unrecognized to date: We can "fix"
millions of large gas-guzzlers through retrofits.
We show that converting existing vehicles --
especially certain heavy pickups, SUVs and vans
-- into plug-in hybrids or all-electric vehicles
can avert some of scrappage's unintended market
consequences, while saving lots of energy. We
demonstrate how much more rapidly plug-in
conversions can scale than the expected slow
introduction of new plug-in vehicles. In a "best
of both worlds" strategy, we suggest that
incentives for plug-in conversions can be
significantly increased -- and carefully combined
with bounties for scrapping vehicles. This way,
the world gets a quicker way to reduce greenhouse
gases and imported oil, automakers and service
companies get a boost, and local communities get green retrofit jobs.

At his March 30, 2009 press conference on the
future of the U.S. auto industry, President Obama
concluded: "Finally, several members of Congress
have proposed an even more ambitious incentive
program to increase car sales while modernizing
our auto fleet. And such fleet modernization
programs, which provide a generous credit to
consumers who turn in old, less fuel-efficient
cars and purchase cleaner cars, have been
successful in boosting auto sales in a number of
European countries. I want to work with Congress
to identify parts of the Recovery Act that could
be trimmed to fund such a program, and make it
retroactive starting today." For the new
administration, scrappage remains a concept. The
President's endorsement has sent policy analysts
and economists to the library, as journalists
scramble to write front-page stories about a
solution that has sufficient design complexity
that it's often called a "scheme." The
President's comments were a late addition, not
included in the report, "New Path to Viability
for GM & Chrysler." In this case, Washington has
time to make sure the policy is done right.

This paper describes how The California Cars
Initiative (CalCars.org), a U.S. NGO engaged in
technology development and policy advocacy, views
the current landscape -- and the quantum leap
that new policies for existing vehicles enable.
And it presents the results of new modelling and
analysis to show how to maximize the
environmental value of funds spent on incentives
for plug-in vehicles. To reach a broad audience,
this paper is intentionally non-technical,
summarizing our studies, with the exception of
some projections. The primary documents for
analysis are found in two spreadsheets in
development: Crush or Convert Internal Combustion
Vehicles
http://www.calcars.org/calcars-crush-or-convert-ice-vehicles.xls
and New PHEV Oil Displacement Projections
http://www.calcars.org/calcars-phev-oil-displacement-projections.xls
. Number-crunchers in government, academia and
industry can download them to try different
assumptions. (This document and the spreadsheets
are mostly U.S-centric; we hope to fully
internationalize the projections, add metric
units, and include other resources (such as
water) used in manufacturing and energy production.)

It's imperative to point out that any plan to
transform our global fleet rapidly must be
supplemented by other ways to reduce the total
vehicle miles travelled (VMT) and often
inappropriate use of heavy vehicles. Strategies
include expanded mass transit and rail freight,
smart urban planning and walkable communities, telecommuting and carsharing.

TECHNOLOGY, EMISSIONS AND FUEL EFFICIENCY

"Cash for Clunkers" first became popular in the
1990s as a response to air pollution, especially
from vehicles built before catalytic converters
became available in the mid-1970s. The concept is
simple: national or state governments pay owners
to retire old vehicles, sometimes only if they
buy new or more efficient ones. Scrappage
programs promise a policy trifecta: improving
average fleet fuel efficiency, reducing air
pollution, and spurring demand for new vehicles.

Miles per gallon (MPG) in new U.S. vehicles
hasn't improved for decades. Corporate Average
Fuel Economy (CAFE) standards remained unchanged
for 30 years until 2007. Moreover, they exempted
trucks, which encouraged the growth of market
share for these most-profitable vehicles.
Engineers concentrated on safety and on raising
acceleration and power for increasingly heavy
vehicles, while neglecting fuel efficiency.

Technology has enormously reduced traditional
tailpipe emissions ("criteria pollutants,"
including particulates, nitrogen oxides, ozone,
sulfur dioxides, carbon monoxide and lead). A new
2010 car in California emits 1/200th the
smog-forming hydrocarbons of an equivalent 1965
vehicle. Scrapping the oldest vehicles is an
extremely effective way to improve air quality.
Yet compared to most countries' fleets, vehicles
in the U.S. today still have much lower average
MPG, higher per capita petroleum use and higher greenhouse gas production.

As long as we have aging gas guzzlers, scrappage
can reduce traditional emissions. But our
modelling indicates that scrappage reduces CO2
only if each replacement vehicle provides more
than twice the fuel economy of the vehicle it
replaces. We can attain this through a
combination of factors: higher engine efficiency,
smaller size and weight, better aerodynamics --
and, most dramatically, by powering vehicles electrically.

EXISTING SCRAPPAGE PROGRAMS AND PROPOSALS

California, Texas, Illinois and several other
states and Canadian provinces have programs to
pay $1,000 or more to retire vehicles that meet
stated criteria, such as failing smog checks.
Europe has many programs; Germany's is widely
credited with insulating that nation from
declining auto sales. France's has been
criticized for "front-loading" demand for
replacement vehicles, resulting in later sales
declines. Britain has created a program for which
any care older than 10 years is eligible.

In the U.S. Congress, H.R. 1550, the Consumer
Assistance to Recycle and Save (CARS) Act, offers
owners of pre-2001 vehicles $4,000-$5,000 toward
the purchase of new higher-MPG cars and trucks
(with higher incentives for vehicles assembled in
the U.S and for higher-MPG). Both the Detroit
automakers and the United Auto Workers support
the bill. And there is broad legislative backing
for H.R.520/S.247, the Accelerated Retirement of
Inefficient Vehicles Act (ARIVA), which offers
$2,500-$4,500 to owners of any under-18 MPG
vehicle, toward their purchase of
higher-than-fleet-average vehicles, manufactured anywhere.

Under both bills, vouchers can alternatively be
applied to pay for mass transit. In his
endorsement of the general approach, President
Obama proposed reallocating funds from other
stimulus programs (perhaps from other
clean-vehicle funds), which could prove controversial.

LIMITATIONS AND EFFECTS OF SCRAPPAGE

Scrappage has often been seen as uncertain and
imprecisely targeted, with critics describing it
as a potential "sinkhole." Economists report that
scrappage programs have caused unintended
consequences. There is no boost to automobile
production if low-income owners of older vehicles
cannot afford high-priced new cars, and instead
buy used replacements. (Texas reports this to be
the case for 60% of those who turn in cars.)

Used car pricing is destabilized when the resale
values of some very old cars get boosted by a
scrappage bounty. For example, the value of
soon-to-be-eligible old cars can rise and owners
may hold onto them longer to gain the scrappage
payment. Currently, market prices for relatively
recently manufactured used pickup trucks are
often under $5,000, lower than some proposed
incentives. And some programs inadvertently pay
for derelict, or no-longer-used cars.

Analysts warn that any "Buy American" clauses in
proposed legislation may violate international
trade pacts. (Current non-U.S. programs generally
buy back clunkers and incentivize new vehicles
built anywhere.) Today, after seven to fifteen
years in the hands of their first and second
owners, many U.S. vehicles are exported to
developing countries. There they remain on the
road for an additional 15 years or more --
sometimes with the catalytic converter removed to
slightly improve fuel economy. Although they're
more out of sight, they still add tailpipe
emissions and CO2 to the air we all share. This
pattern will continue for vehicles worth more than the crush rate.

The Specialty Equipment Market Association (SEMA)
and the Automotive Aftermarket Industry
Association (AAIA) represent constituencies
ranging from vintage vehicle exhibitors to
cash-strapped owners trying to avoid the cost of
buying a new car. The AAIA's Fight Cash For
Clunkers campaign points out that scrappage
destroys hard-to-find spare parts that are
impractical to reclaim before or after bodies are
crushed. (Notably, the ARIVA bill avoids this
problem by requiring that only the engine be
destroyed.) Internationally, The European
Federation for Transport and the Environment has
been a long-time critic of scrappage programs as
ineffective and in some cases counterproductive.
Its campaign gains strength from the European
End-of-Life Vehicle Directive, adopted in 2000,
requiring that 85% (95% by 2015) of car parts and
materials be recyclable for vehicles built after 2006.

ADDING RETROFITS TO THE MIX: FIRST PROTOTYPES

U.S. and international legislators designing
scrappage programs have not yet considered that
some older, lower-MPG scrappage candidates are
still solid, reliable platforms that -- if
converted to plug in -- could drive cleanly and
cheaply for many years on dramatically less
liquid fuel. They don't fully appreciate how long
it takes for the fleet to turn over solely from
production of new vehicles. They haven't seen
evaluations of the energy required to scrap and
replace vehicles. We will discuss all these factors below.

To start, legislators (and many others) are
unaware of the emergence of small companies
demonstrating the feasibility of imaginative
alternatives to simple scrappage. Very recently,
engineers and entrepreneurs have begun developing
custom retrofit solutions for the "low-hanging
fruit" – millions of vehicles in popular models
that can be affordably modified.

Two pioneering conversion companies focusing on
electrification of Ford pickup trucks, the
best-selling vehicles in the U.S. for three
decades, illustrate the two main design paths for
internal combustion engine (ICE) conversions.
Both companies have expensive prototypes, and
have developed business plans to reach
cost-effective pricing ($10-$20,000) in large
volumes. See these and other fledgling companies'
solutions at Conversions to Electrify the World's
900+ Million Cars http://www.calcars.org/ice-conversions.html

In one approach, some install an electric motor,
battery, and grid charger to supplement the
existing engine and create a plug-in hybrid
electric vehicle (PHEV). The resulting vehicle
has all the original capabilities, while
displacing 20-80% of liquid fuel with
electricity. (The amount depends on electric
range and blending design.) Some PHEV conversions
also gain the additional benefit of improved MPG
for extended driving. Like most PHEVs, once the
batteries are discharged, these operate as
standard hybrid-electric vehicles (HEVs).
Chicago's Hybrid Electric Vehicle Technologies,
Inc.http://www.hevt.com transforms an F-150 that
normally gets 15 MPG into a PHEV with a 30-mile
all-electric range after each full charge. It
then operates until it is recharged as a 21 MPG HEV.

In a second strategy, some retrofitters replace
the ICE with a battery and electric motor – plus
smaller electric systems for auxiliary functions
formerly powered by engine heat or pressure – to
create an all-electric vehicle (EV). EV
conversions are generally simpler than PHEVs, but
they are limited to the driving range of the
batteries (which consequently are larger than
those in PHEVs). REV Technologies, Inc.,
http://www.hevt.com in Vancouver turns a Ranger
truck into a pure EV with a 50-125 mile range.

VEHICLES ELIGIBLE FOR CONVERSION

Two criteria are the starting point for choosing
conversions over crushing. The vehicle's design
and available space must accommodate a viable
conversion. And its systems must be in condition
to run many more years as a plug-in.

Fortuitously, the bigger the vehicle, the easier
it is to find space for batteries – and the more
fuel can be saved. Former Intel CEO Andy Grove is
a vocal advocate of strategically prioritizing
the rapid conversion of millions of "PSVs"
(Pickups, Sport-utility vehicles and Vans). Many
PSVs are can last much longer than the
100,000-200,000 miles of a typical passenger car.
Many are built on durable truck frames that are
far stronger than those for sedans, and their
body panels can be replaced when corroded. If
converted to drive electrically, these vehicles,
when heavily loaded, can benefit from electric motors' high torque.

Another high-profile PHEV fan, singer Neil Young
(in "LincVolt," a forthcoming documentary film)
showcases the PHEV conversion of his famously
beloved 2.5 ton, 19-foot-long vintage Lincoln
Continental. His car illustrates how larger
passenger vehicles may have space to accommodate
batteries and motor plus the existing ICE for
PHEV retrofits. In contrast, smaller vehicles are
more likely to be convertible to EVs, where
batteries and motors are installed into the
spaces formerly used by the engine and gas tank.

Converting large vehicles provides a benefit that
is especially unrecognized in the U.S., where the
focus on "miles per gallon" ratings skews
perceptions the fuel savings. Europeans get it
right, looking at "litres per hundred kilometres"
(the metric version of "gallons per hundred
miles"). With the fraction reversed, it becomes
obvious that petroleum displacement benefits are
far greater for retrofits of larger vehicles.

For instance, since 2004, by notably transforming
50 MPG hybrids into 100+ MPG PHEVs, CalCars
succeeded in building support for PHEVs while
demonstrating savings of just one gallon per 100
miles. Compare that to making 15 MPG guzzlers
into 30+ MPG PHEVs. That saves almost four
gallons per 100 miles -- triple or quadruple the impact per vehicle!

(In the process of developing our analyses, we
have developed a useful rule of thumb: for
any-size vehicle, with daily driving and
recharging, each kilowatt-hour of installed
battery capacity displaces 30-50 gallons of fuel/year.)

Of course, we expect retrofits to offer some of
the same advances that we anticipate coming for
all new cars over time: more efficient engines,
part or full compatibility with renewable
biofuels, more aerodynamic designs, and use of
lighter and safer composites or metals. These
improvements are all additive to the primary
benefit gained by displacing a significant amount
of liquid fuel with cheaper, cleaner, domestically-sourced electricity

USING OR LOSING ENERGY

In many cases, converting a vehicle instead of
scrapping it makes sense for one more important
reason. Our analysis is among the first to
seriously explore a second key question: "Every
time a vehicle is crushed, how much of the energy
used to manufacture it is lost forever?" It turns
out that vehicle manufacturing is so
energy-intensive that, on average, building one
vehicle requires 30,000-50,000 kilowatt-hours of
energy. That's over three times the electricity
an average natural gas-heated U.S. household uses in an entire year.

It's also 9% of the energy even a low-MPG vehicle
consumes in its lifetime. As we make our vehicles
more efficient, this "embedded" energy becomes an
even larger fraction of its lifetime energy
consumption. The energy used to build an EV can
be as much as 80% of its lifetime total consumption.

When other options exist, does it make
environmental sense to transform the energy
required to build a car into little more than
waste plus some recycled material? Our modelling
shows the answer is "Yes" only if, when looking
at the car owner's disposal and purchase
transactions, the replacement's fuel efficiency
is more than double that of the scrapped one.
Notably, this answer is independent of the age of
the scrapped vehicle. These considerations are
not reflected in scrappage programs or proposals.

Whenever it's possible, converting ICE vehicles
to plug in saves both future fuel consumption and
embedded energy. For both passenger vehicles and
PSVs, using standard industry modelling tools
including results from GREET 2.7, we've found
that if we scrap an average vehicle and replace
it with a similar-sized brand new PHEV, it must
be driven 40,000 miles or more before energy
savings make up for the energy used to build the
new vehicle. Compare that to converting that same
existing vehicle into a PHEV. Measuring the
energy used in the conversion process and in
manufacturing the added components, the energy
and CO2 savings begin after just 8,000 miles.

CONVERSIONS CAN HELP END OIL ADDICTION SOONER

We see a growing national consensus that we have
no time to waste in addressing energy security
and climate change. Clearly, unless we get more
efficient vehicles on the road quickly, we won't
have a measurable impact on these problems for
decades. How much do scrappage and retrofits help?

Our modelling focuses on scenarios projecting how
rapidly we can gain significant national
fleet-wide reductions in fossil fuel consumption
and CO2 emissions -- with and without new PHEVs,
conversions, other efficiencies, and low-carbon biofuels.

Business analysts talk about "market
penetration." In 10 years hybrids reached only
2.4% of new vehicle sales and less than 1% of the
total fleet. We see a consensus that this is much
too slow. We're encouraged that every carmaker
has plans to start selling PHEVs or EVs in
2010-2012. But even if PHEVs arrive at quadruple
the hybrid rate, CO2 reductions from vehicles
will not reach 15% until 2030. We need reductions
much sooner to improve energy security. And
because atmospheric CO2 is cumulative, we need early impacts.

Our numeric projections are worth understanding
because they show that to reach significant
near-term carbon and oil consumption goals, we
must convert existing gas guzzlers. The Obama
administration has committed to getting one
million new PHEVs on the road by the year 2015.
To do this, automakers would have to build
100,000 PHEVs in 2011, then 50% more each year
thereafter – over three times the rate of hybrid
new-car penetration. The resulting one million
PHEVs will be 0.4% of the total U.S. fleet by
2015; only 3% even by 2020; and not until 2030
would 37% be reached. The corresponding
reductions in CO2 emissions are approximately 40%
of these fleet penetration percentages, still far below needed targets.

A table and charts show some of our high-level
results. Our assumptions include the
just-described new-vehicle penetration rates.
Since the scaling of increased supplies of
batteries, motors and power electronics necessary
for conversions is attainable, and retrofitting
can be done by trained local service technicians,
ramp-up can be much faster than for new vehicles.
We project 1,000 conversions in 2010 (compared to
100,00 new vehicles that year), increasing
annually eightfold (with limitations to
accommodate batteries) until 48% of ICE vehicles have been converted.

Note from the "New Plug-Ins: Oil" column that at
the rates we can achieve with only new PHEVs,
petroleum reduction will be minimal for almost
two decades. And we will continue to add to
cumulative greenhouse gases at current rates
until in 2050 we will have accumulated 46
gigatons -- 5 gigatons more than without the
addition of conversions. Nor, due to the research
and huge infrastructure requirements, can
low-carbon biofuels make a dent until 2030-2040
(see 2010 column and note). However, with
conversions, comprising at least 87% of all
plug-ins during 2015-2020, 27% instead of 3% of
the fleet could plug in by 2020, and 67% by 2030.

TABLE: PROJECTIONS FOR PLUG-IN VEHICLES WITH AND WITHOUT CONVERSIONS
(SEE FULL VERSION at
http://www.calcars.org/scrap-or-retrofit.html
with charts accompanying the following captions:

* New plug-ins are not a significant percent until 2025-2030
* All near-term oil consumption benefits come from retrofits
* After 2030, additional retrofits taper off
* Maximum long-term CO2 reduction requires a
combination of new vehicles, retrofits and sustainable biofuels
* New plug-ins are not a significant percent until 2025-2030

Our conclusion? The fastest ticket to energy
security and environmental preservation requires
that we take these five simultaneous steps as soon as possible:

* Ensure that most new vehicles plug in
* Retrofit many of the ICE vehicles already on the road
* Incorporate other efficiency measures
* Ramp up renewable low-carbon biofuels
* Increase electricity production from renewable sources

QUESTIONS ABOUT RETROFIT STRATEGIES

Conversion companies and CalCars suggest that tax
incentives for retrofitting ICEs be equivalent in
scale to incentives for new plug-ins and higher
than those for scrappage. Such a proposal will
run up against the same objections that new
plug-in cars encountered from 2002-2006, which
plug-in advocates and experts have been addressing for years.

First, we hear about battery limitations: the
technology isn't far enough along; there's not
enough lithium to scale production globally;
batteries are a recycling challenge. Briefly:
batteries are "good enough to get started" and
will get better and cheaper much faster with
increased demand. Raw materials are ample.
Instead of recycling they may be used for
stationery energy storage for many years; in any
case, nickel and lithium are landfill-safe and
can be recycled. Future batteries will use less
lithium or entirely different chemistries and
designs. (Note: Our projections for adding
conversions to accelerate market penetration were
designed specifically to require no more battery
manufacturing capacity than the new-PHEV-only
scenario, though in the conversion scenario the
capacity investment occurs sooner.)

Second, we hear that high costs mean there's no
business case for retrofits. Even at today's gas
prices and with expectations for battery costs
similar to those discussed by General Motors and
its suppliers for the Chevy Volt, the lifetime
total cost of ownership (TCO), including
servicing costs and resale value, will be lower
for new PHEVs than for ICEs. We expect that
high-volume ICE conversions with corresponding
public incentives will also show a lower lifetime TCO.

More broadly, calculations rarely account for the
externalized costs of fossil fuel addiction.
Analysts who include health, environmental and
military costs see the real price per gallon of
today's petroleum as closer to $10 than $2.
Looking ahead, it's likely that the cost of oil
will again increase as the global economy
recovers and demand from developing countries
continues to grow. As this happens, retrofits
will prove increasingly cost-effective. And when
payback and cost-benefit calculations start from
an "end of business as usual" perspective --
factoring in not only external costs of oil, but
also likely carbon credits or other results of a
cap-and-trade system or a carbon tax -- everything changes.

Finally, we hear doubts that a retrofit
infrastructure and component supply chain scale
up rapidly enough to convert tens of millions of
vehicles. We responded to these concerns above,
in describing our assumptions for Table 1. And
President Obama, in his March 30 remarks,
addressed the general issue when he reminded us
of America's Second World War role as the
"arsenal of democracy". He evoked what happened
in 1942, after Pearl Harbor. President Roosevelt
told the auto industry that the nation would stop
building cars and trucks -- and shift to making
planes and tanks. He asked for 30,000 planes in
year one. They said they couldn't do it; then
they proceeded to build 120,000. Now we're in a
similar moment: the geopolitical, economic and
environmental consequences of oil addiction are
an equivalent or greater threat. In response, we
are now committing to evolving to zero-carbon
energy sources as soon as possible -- and we need
to power all our cars from those sources.
Let's Do Both: Scrap and Retrofit

Why not include conversion incentives in
scrappage proposals? With only a few prototypes
to date, it's no surprise that the value of
retrofitting ICE vehicles isn't yet recognized.
(Readers of this article could play a significant
role in changing that!) Yet we do have a foot in
the door. The federal stimulus package (H.R.1,
The American Recovery and Reinvestment Act of
2009 Section 1141) includes an unprecedented
(though still very modest) 10% tax credit of up
to $4,000 for converting HEVs and ICEs. When
conversions reach high volumes and cost
$10,00-$15,000, the 10% incentive will be only
$1,000-$1,500. Conversion companies and advocates
propose that retrofits that achieve energy
savings equivalent to new PHEVs become eligible
for equivalent credits up to $7,500. For an
industry that's just getting started, incentives
will help jump-start small companies' sales --
and encourage large integrators to enter the business.

Today, building awareness and support for
conversions is still slowed by the scarcity of
prototypes and business plans. We see new
companies developing compelling and definitive
ways forward. We expect that in the twilight of
the Age of Fossil Fuels, many new players will be
attracted to the electric vehicle industry and
will seek the best ways to convert ICE vehicles.

What will the automotive market look like when we
have a successful ICE conversion industry? Here's
a look ahead to a possible landscape. Bounties to
retrofit PSVs will give owners of gas-guzzlers an
attractive way to resuscitate their favorite
vehicles. Scrappage programs will require
destruction of only the engine, so vehicles can
be dismantled for parts or EV conversions.

Conversions of drivetrains into PHEVs via
safety-tested, certified kits will often be a
preferable alternative to destroying engines.
Conversion companies will buy, or accept on
consignment, vehicles that owners no longer want.
They will partner with used car dealers looking
to sell their inventory to an increasingly fuel-conscious public.

It's possible to imagine that in dire economic
times, one or more farsighted automakers will
scrap old ways of thinking. To gain a revenue
stream from vehicles that it sold long ago,
partnering with its dealers and one or more
conversion companies, an automaker could reach
out to existing customers to offer conversions
with warranties. Or an even bigger idea: an
automaker could get into the business itself as
its own "Qualified Vehicle Modifier" (QVM, an
industry term for authorized converters).

We might one day see Ford's oldest factory, the
Twin Cities Ranger plant in St. Paul (opened in
1924 and now on life support until 2011), reborn
and building new plug-in Ranger trucks, with a
second line converting the region's old trucks!
City and state officials and UAW Local 789 have
already said they're open to anything that keeps
the factory open and workers on the job. Such a
plan could emerge from any company and community with an automotive factory.

In the future, we may see lightweight and
affordable in-wheel electric motors, and much
higher density batteries. Such welcome
"breakthroughs" are not needed to get started
with conversions of large vehicles. However, they
will eventually make conversions feasible for
even small passenger sedans, turning them into
100-300 mile range EVs. At that point, the number
of vehicles that it makes sense to crush instead
of convert will diminish significantly. We will
become the ultimate vehicle recyclers. And that
spectacular moment in Goldfinger, familiar to any
James Bond fan, when a Lincoln Continental became
a three-foot cube, will remind us of a vanishing era.

Converting as many of our current vehicles as
possible can become a giant business opportunity.
And it presents us with a global choice. We can
wait for new efficient vehicles to slowly replace
our gas guzzling fleet. This means that for over
a decade, we will see mainly symbolic effects on
the global challenges we aim to address. Or we
can take effective steps to more rapidly reduce
both our fossil fuel use and our contribution to
greenhouse gas emissions, while at the same time
adding new green jobs and reducing driving costs.
Moving forward with conversions brings many
benefits. Delaying only increases global risks.

ACKNOWLEDGMENTS: This article is a collaboration
of CalCars.org's Founder Felix Kramer; Technology
Lead Ron Gremban; Director of Projects Carol
DiBenedetto; Senior Advisor Randy Reisinger; and
Volunteer Remy Tennant, an MBA student at San
Francisco State University. [Disclosure: the
principal author is an advisor to both Hybrid
Electric Vehicle Technologies, Inc. and REV Technologies, Inc.]


-- -- -- -- -- -- -- -- -- -- -- --
Felix Kramer fkramer@...
Founder California Cars Initiative
http://www.calcars.org
http://www.calcars.org/news-archive.html
-- -- -- -- -- -- -- -- -- -- -- --