Date: Tuesday, October 21, 2008

This month contributing editor Steve Banner visited Coventry, the home of electric vehicle manufacturer Modec, to catch up with sales director Roger Atkins.

With the price of diesel still way too high and continued concern over the damage being done to the environment by exhaust emissions, it looks as though Coventry-based electric van maker Modec has a rosy future. How are things going?

At present we're not selling huge numbers of vehicles in what remains a fledgling market. We expect to find customers for between 50 and 60 this year, which is not dissimilar to the number we sold in 2007. Although to date our volumes aren't massive, we've made significant progress with some prominent fleet operators. Well-known businesses that run our vehicles include Tesco — it has got 15 that it uses on its home delivery service — and Speedy Hire. The Tesco vans have been used in Shrewsbury and London and they'll soon be appearing in Belfast, Birmingham and Glasgow. They're getting a good geographic airing. And the progress we've made with big fleets should help us reach our sales target of 450 in 2009, including exports.


How much does one of your vehicles cost?

Around £55,000, or approximately two- to two-and-a-half times the price of a conventional van of equivalent carrying capacity, including the lithium-ion battery pack. The price comes down to £35,000 if you opt to lease the pack rather than purchase it, and that will set you back around £400 a month if you cover about 15,000 miles annually over six years.


A lot of firms are likely to be frightened off by those figures, especially in the current economic climate. How would you set about reassuring them?

In fairness to ourselves we have never suggested that our vehicle is some sort of cheap alternative. We're a low-volume manufacturer of a hi-tech product so we're never going to be able to compete on price with Ford, Mercedes-Benz and so on. Operate one of our vans in London for six years and you are likely to find that it is £750 to £1,000 a year more expensive to run than an equivalent diesel-powered van. Remember though that if you are driving a Modec into the centre of London you don't have to pay the congestion charge. No matter where you go with it you don't have to pay Vehicle Excise Duty — although you do have to display a tax disc — and the electricity you use to power your vehicle typically costs no more than 7.0p a mile. Remember too that the cost difference between running a diesel van and running a Modec could narrow significantly in our favour over the next five to six years depending on where the price of diesel goes. It could get close to being cost-neutral.


Any further advantages?

There is also the point that if you operate a Modec you are running a vehicle that stands out from the pack and declares your environmental credentials to your customers and to the world. A Modec van — we also make chassis cabs and — has enormous value as a mobile billboard. Nor will it require as much maintenance as a diesel.


Will those environmental credentials be of help to an operator tendering for work from local councils and government departments and agencies?

You will undoubtedly score a lot of points if you can say that you are running zero-emission vehicles. The government has some tough carbon reduction targets to meet and companies that want to do business with it have to take this on board.


What's your vehicle's range between recharges?

Roughly 60 to 70 miles depending on how it is driven. By January, however, we'll have a model available with a range of over 100 miles. Top payload is 2.0 tonnes and top speed is 50mph.


How long does it take to recharge a Modec?

Six hours, usually at a cost of just under a fiver if you recharge it overnight.


How rapidly will you drain the battery if your Modec is fitted with, say, a tail lift or a fridge unit?

What we try to do is keep the traction battery solely for propulsion. Ancillary systems are run off a separate 12v battery. With the Tesco Modecs refrigeration is provided by eutectic plates which do not draw current.


Because your vehicle grosses at just under 5.5 tonnes, anybody who obtained their car driver's licence after 1 January 1997 has to pass a separate test before they are allowed behind the wheel because they are restricted to nothing heavier than a 3.5-tonner. People who passed their test before that date can still drive goods vehicles grossing at up to 7.5 tonnes. Is this driving licence restriction, which of course affects diesel-powered vans too, hindering your product's acceptability?

It is definitely an issue with some of the people we'd like to do business with, although we have got customers who have been willing to put drivers through the extra test.


Any plans to market a Modec with a lower gross weight?

We're considering it. We also believe there is a market for a minibus version — especially with the London 2012 Olympics in mind — but there would be a number of legislative hurdles to overcome.


As your vehicle is a 5.5-tonner, does it have to be equipped with a tachograph and is a heavy truck-style Operator's Licence required?

The answer to both questions is 'no'. I have to say though that some of the concessions I have talked about date from a time when electric vehicles were viewed as small, slow-moving and specialist, including of course the ubiquitous milk float. I think these loopholes will eventually be closed, but having said that I suspect the government will move carefully because it will not wish to be seen to be discouraging environmentally-friendly transport.


Are you disappointed that, despite its environmental advantages, no direct UK government subsidies are available to businesses that wish to acquire a Modec?

I am and we're lobbying for changes. One area that we're addressing is enhanced capital allowances. The way they are structured helps people who want to acquire electric cars, but not those who want to acquire electric vans. Something we have welcomed is the launch by the Department for Transport of a fund worth an initial £20m that can be accessed by public sector fleets that wish to procure lower carbon vehicles and need help to meet the extra cost.


Who is managing it?

It's administered by Cenex, the Centre of Excellence for Low Carbon and Fuel Cell Technologies. Vehicles that have benefited from this support will start appearing on the streets from next March onwards. I have to say, however, that there is a lot more government backing for alternative fuel technologies in many European countries than there is in the UK, possibly because some of them feel particularly susceptible to the impact of climate change. I think that ultimately the market may be stronger for us on the Continent than it is on this side of the Channel.


Are you doing much in terms of exports?

We're entering into a partnership with Volvo Trucks in Switzerland to sell our vehicles. There's government support there because they can see the impact that climate change is having on snowfall and thus on the ski slopes and the Swiss tourist industry. We've been talking to Volvo about a partnership in Denmark too, we've appointed a dealer in the Netherlands and the Republic of Ireland and we're about to appoint a dealer in Spain. We'd like to enter the USA as well, but we're taking a cautious approach. The USA is littered with the skeletons of all sorts of British companies that have gone there and come unstuck.


How do you counter the argument that while your vehicles don't produce emissions, the power stations that provide their electricity do?

If that's a concern for a customer then we'll suggest that they get their power from a supplier that offers electricity from a renewable source; hydro-electricity for instance, or wind power.


Is it correct that some UK local authorities provide publicly-accessible recharging points?

They do, but they're typically 240v points suitable for electric cars. We require a three-phase supply. I'm convinced this facility will become more widely available in future, however; at service stations for example. It's also worth noting that some councils offer free on-street parking for electric vehicles.


A concession that is alas currently being withdrawn by the City of London. But what's happening with the dealer network? Have you begun building it up yet?

We've started by appointed three Daf dealers in the London area with two sites each. We were particularly interested in recruiting Daf dealers because of their reputation for a high standard of aftersales care. London is a core market for us, not only because our vans aren't subject to the congestion charge, but because of the Low Emission Zone too. (The LEZ affects truck owners now and van owners who want to enter it will face charges from 2010 onwards if their vehicles do not meet its requirements; but not if they own a Modec — SB). We're going to be looking for dealers in the Manchester area as well. That's the next city on our list because it too is planning to introduce congestion charging. Thereafter we'll be aiming to make appointments in Birmingham, Glasgow, Edinburgh, Leeds, Newcastle upon Tyne and Belfast. The introduction of charging schemes in these cities may take longer than people anticipate (back in 2005 voters in Edinburgh threw out a proposed scheme in a referendum by a margin of about three to one — SB) and there is always the question of how practical it will be; but I'm sure it will happen.



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