At the Detroit auto show, John Thomas, CEO of plug-in hybrid powertrain manufacturer ALTe Powertrain Technologies, said, "We want to be like a Cummins or Borg-Warner, where we want to be a branded powertrain company that partners with the big OEs — we want to supply their alternative powertrain options."
With all the talk at this year's Detroit auto show about alternative and hybrid powertrain options and the future of small- and midsize cars, the message can get lost that most of the fuel-consumption savings in this country won't come from replacing a small family car with a slightly more efficient smaller family car. Those gains will be minuscule.
The truth is the biggest gains will come from segments that do the most work and whose trucks get driven in the least efficient situations in the harshest duty cycles. That means work vehicles.
For all the hype and attentioin Via Motors drew in Detroit, especailly with Bob Lutz near a microphone, the key aspect of the business model that doesn't quite add up is that it requires buying a brand-new vehicle, removing the powertrain and installing a completely new powertrain. Of course, we understand there will always be a certain percentage of fleet managers who have to replace their aging fleet with a certain percentage of brand-new trucks, but most trucks in the fleets will technically always be "used."
Why isn't it more cost effective for the powertrain retrofitter, as well as the purchaser, to offer the service for older vehicles than it is to offer to companies that have to buy more expensive new trucks?
"After talking with all the major players in the fleet market, it made sense to us," Thomas said, "that the bigger portion of the market is in replacing existing powertrains on aging trucks was going to be the easiest way to maximize fleet cost reductions for anyone who wanted to reduce their fleet's operating costs."
It's hard to argue with the strategy, but it still makes you wonder how a company like Via Motors will address the relatively difficult and challenging CARB certification process, which, in some cases, can take as long as three years to complete. With Via having strong ties to GM and GM still holding a strong connection to the federal government, it does beg the question as to how they've been able to get past some of the more tricky red tape.
The plan ALTe has in place, we're told, is progressing according to plan, with a certain amount of investor capital set in place, ready to start the production process. From what Thomas told us, all the funding necessary to start and maintain the business is in the final stages, which means production of the first retrofit conversions could start coming off the line in about 12 months.
ALTe partnered with Manheim auction houses for sales, service and any warranty issues that may arise. Manheim has 145 locations worldwide, 70 in the U.S. and four across Canada. At the start of production, three facilities — in Southern California, Atlanta and New York — will take in the host vehicles, remove the powertrain and install the extended-range powertrain.
The powertrain works similiarly to the Chevy Volt. It uses a small engine to charge the batteries, which power the electric motors that move the truck. At first, ALTe was going to lean toward retrofitting Ford F-150s because, according to Polk data, 55 percent of fleets are more likely to be Ford models rather than GM models.
Eventually, Thomas said, fleet customers will not be the only ones allowed to buy the new powertrain, which is scheduled to start production for under $30,000. In fact, he sees a day when the production locations, after a thorough vehicle inspection, will be able to take single sales right off the street.
Of course, pricing is a huge hurdle, but "we can see a day in the not too distant future that our biggest expense, the battery costs, will drop by as much as 50 percent, " Thomas said. "Add to that advancements in electric generator, motors and the hybrid controller, and you see how quickly the costs could plummet." And as battery ranges and charging times drop, we'll be able to go farther with less help from fossil fuels.
Down the road, especially as the technology could make pricing similar to a current 1-ton turbo-diesel with an automatic transmission, it would be easy to see how this could work for pickups as well as luxury sedans, and even the RV industry. We can imagine that a powertrain option offering you and your motorhome buddies as much generated power as needed — all inside an existing engine and transmission unit — could be very attractive to a lot of people. Who knows, maybe not too long from now we'll be able to choose from a twin-turbo gasoline, full-electric, turbo-diesel hybrid or hybrid electric powertrains in any pickup truck, work van, motorhome or even sports car.
At the early stages here, pricing starts at $30,000, but if it looks to be heading below $10,000, the extended-range hybrid solution looks to be the more rational and economical choice for future work trucks.
We're hoping to get a chance to spend more time with one or more of these vehicles soon. We'll keep you posted.