Late last year, we announced we had received a $205,000 contribution
to expand our conversion projects, responding to the large unmet need
for demonstration PHEVs. This was designed as a matching program, so
we could maximize the impact of our conversion efforts by also
scaling up complementary advocacy efforts. We are continuing to raise
those funds. Fortunately, we get to apply the full amount of the
contribution to our conversion program and aspects of our current
operation that support it.

Here are more details of our plans.

WHAT WILL WE DO?
We have begun a CalCars.org project to design and convert two Priuses
and two Ford Escape hybrids with lithium-ion batteries. Following
Phase 1 reference designs, in Phase 2 we will work with existing
integrators or even a new company to enable volume delivery of
conversions as soon as possible. Meanwhile, the non-profit
CalCars.org will continue its advocacy and partnership projects.
(Technology Lead Ron Gremban will spend most of his time on the new
project; I expect to be involved in both.)

We now have funding to create four prototypes, setting the stage for
volume production. In Phases 1 and 2, we will have many challenges as
we develop:
* technical solutions to integrate the batteries into the car's hybrid systems;
* refinements that enable conversions to be produced efficiently in volume;
* user-friendly interfaces and controls that show the technology to
best advantage;
* pricing, warranties, service and support that will give customers
what they need;
* fast-track development, efficient installation and rapid delivery
of conversions.

WHAT BATTERIES WILL WE USE?
Our first PRIUS+ conversion in 2004 and two more conversions in 2006
used B&B Battery lead-acid batteries from ElectricRider. In our work
to enable "do-it-yourself" conversions, we're still using the most
affordable lead-acid solutions. In early 2006 we worked to install
Electro Energy Inc. bi-polar nickel-metal hydride batteries in a
Prius. We are comparing notes with lithium-ion battery-maker
Electrovaya on its Escape project for New York State, and we talk
frequently with many battery makers

For our new program for prototypes and large volume conversions,
we've picked batteries from Valence Technology, Inc. (NASDAQ: VLNC)
<http://www.valence.com/>. Valence makes the advanced, safe,
lithium-ion phosphate batteries used in Segways. A dozen Priuses
converted by EnergyCS, including the one I drive daily, are now on
the road with Valence batteries.

HOW WILL THIS EFFORT BRING MORE PHEVS TO MARKET?
The Phase 2 effort will differ in three ways from the existing
after-market conversion efforts. (See
<http://www.calcars.org/howtoget.html> for information on EnergyCS,
EDrive, Hymotion, Hybrids-Plus and EAA-PHEV.):

1. WE EXPECT TO SPEED THINGS UP. To be frank, we still have no good
answer when we're asked all the time, "How can I get a PHEV?" Several
companies and one open-source project have produced excellent
prototypes since May 2005 and have since shipped a small number of
cars (see <http://www.calcars.org/where-phevs-are.html>). Yet many
people want a PHEV (the world's cleanest, extended-range, 100+MG
car) like they've wanted no other car. The slow pace of deliveries
(for many reasons) has frustrated hundreds of fleet buyers from
cities, utilities and other companies -- and uncounted individual
early adopters.
2. WE MIGHT SECURE COOPERATION FROM AN AUTO-MAKER, though that
remains a long shot.
3. WE WILL REFLECT CALCARS' ENTREPRENEURIAL SPIRIT. The
start-up/venture environment that have always characterized
CalCars.org will now be harnessed to a production goal. And as we
continue working cooperatively with the conversion companies, we
expect to complement their efforts.

HOW DOES THIS PROJECT RELATE TO OPEN-SOURCE APPROACHES?
The "conversion community" is unusually cooperative. Our PRIUS+ was
born out of the efforts of a pioneering group of advocates and
engineers. We organized ourselves into the PRIUSPlus Discussion
Group. Later we helped found the Electric Auto Association-PHEV
group. Recently, NYSERDA awarded initial single-car contracts for an
eventual $10M program to convert hundreds of state fleet vehicles. To
help compress into weeks a process that could otherwise take too
long, CalCars and one or more contract winners post information about
aspects of the Ford Escape Hybrid at the "open-source"-style
<http://www.eaa-phev.org/wiki/Escape_PHEV_TechInfo>. We continue to
juggle our responsibilities to ensure the success of our projects,
the goals of EAA-PHEV, and the strategy of encouraging conversions to
create enthusiasm and support to motivate car-makers to build PHEVs.

WHO CONTRIBUTED THE FUNDS?
The contribution comes from Carl Berg, a long-time Silicon Valley
investor and SF Bay Area commercial real estate developer. Berg is a
Director and major shareholder of Valence Technology. CalCars.org in
Phase 1 and the successor entity for the Phase 2 project will become
customers for Valence's batteries. Of course, Carl Berg hopes that
getting many cars out on the road will help Valence!

HOW DOES THIS TIE IN TO BATTERY ACCEPTANCE?
We're actively exploring ways to remove the battery's lifetime as a
risk factor from the equation for manufacturers and buyers, to
accelerate PHEV commercialization. We're proceeding on several tracks
involving government requirements and third-party warranty concepts.
We believe we can develop terms acceptable to the pioneering fleet
buyers and early adopters who will get early cars from both
converters and car-makers. We intend to use this program as a proving
ground for these efforts.

WHAT'S NEXT?
As we move forward, CalCars will announce further plans and what we
need in resources, facilities and people. Stay tuned!

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Felix Kramer fkramer@...
Founder California Cars Initiative
http://www.calcars.org
CalCars-PHEV Newsletter
http://www.calcars.org/news-archive.html
Photos of PHEVs/Well-Known People
http://www.calcars.org/photos-people.html
PO Box 61045 Palo Alt----A 94306
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