Detroit 2008: AutoblogGreen Q&A: Malcolm Bricklin talks about building a PHEV supply base

During the 2008 Detroit Auto Show, ABG sat down to chat with Malcolm Bricklin about his latest project Visionary Vehicles. Mr. Bricklin has been involved in the car business for four decades and could be described as a serial entrepenuer. Over the years his projects have had varying degrees of success including being the original U.S. importer of Subarus as well as importing Fiats in the eighties after the Italian company pulled out the U.S. market. He also pre-dated John Dolorean in attempting (and failing) to build and sell a gull-wing coupe. He also brought America the Yugo.

These days Bricklin is focused on building a series hybrid electric car and creating a supply and distribution base for upstart car manufacturers to tap into for electrically-driven cars. As usual, Bricklin has some grand plans and the name Visionary Vehicles certainly seems appropriate. Read on to find out what he has in mind.

ABG: We're here with Malcolm Bricklin at the Automotive X-Prize booth to talk about your latest venture. You are working on a new plug-in hybrid electric vehicle. Why don't you tell us about the project?

Malcolm Bricklin: Actually, we are using the vehicle only as a way to sign up the dealers. But to truth of the matter is what we are really doing is trying to set up the infrastructure for electric vehicles and electric hybrid plug-ins. What we are doing is we are designing a vehicle as you can see right over there, which is going to be the size of a Mercedes S about the width of a Lamborghini that will get 100 miles to the gallon and sell for 40 grand. That, we think, will dispel everybody's thoughts that you can't build a big car and use electricity and get great gas miles and still sell at a decent price.

Continue reading about Bricklin's plans after the jump.

MB: So that was our purpose, but the real purpose is to be able go to the dealers and say look; Here is what we have to sell to begin with and we are going to give a new product every year on that platform. But more important than that, we are going to do two things that we believe the industry needs or there is not going to be an industry. That is outside of the Big Three, if you are going to build electric or electric hybrid, you have got to find a way to distribute it and you have got to find a way to bring the component prices down. In order to bring the component prices down, if you are the Big Three you subsidize it. But if you are a little guy you can't subsidize it, which means that a lot of cars are going to come in to market for $100,000 and although they may be a nice value at $100,000 there is not a big market for $100,000 cars. We think the market is under $50,000, under $40,000 and of course if we get down to $30,000 then we really think that the market is going to open up.

ABG: Sure, the lower you can go then obviously more people will buy that.

MB: There is only way to do that and that is to get the component prices at the right price. In order to get the batteries and the motors and the engines at the right price, you need somebody to come in and order them, it is that simple. What our program is, is going out and setting up 250 of the best dealers in the country and they will give us each an order of 1,000 vehicles, giving me a quarter of a million vehicles, giving me letters of credit so I can go to my various suppliers and say OK, like for instance we just announced today we made a deal with Electrovaya to be our battery supplier and we will go to them say, "What does it take to bring the prices down so that we can be competitive?" and we've made that deal. We will manufacture at these quantities, but we are going to offer the same components that we are using to anybody who wants to get in the business so the Teslas and the Phoenixes, and Fiskers. You name it, whoever is in the industry that wants to buy these components at the right price could come to us and say, OK, we want to buy those things and for roughly 10 percent more than what we are paying for that we will provide them. Once they do, we will then offer them the opportunity to go through our distribution network, which will include 250 dealers in the United States and we are setting up distributors in every country of the world. So it will be instantaneous distribution for everybody in the electric or electric hybrid plug in business, which uses our components.

ABG: So your main goal initially is to really set up a supply base that has got the economies of scale that can make these things affordable?

MB: And a distribution system that can sell them, because right now you will walk around in a room and you are going to see some beautiful cars. Let's take any one of the beautiful cars. Let's take the Fisker. Have you seen that one yet by the way?

ABG: I have seen photos of it. I haven't seen the vehicle yet.

MB: It's so gorgeous, and they are trying to sell it for $80,000 and it's probably a great value at $80,000.. But they also want to sell 15,000 a year. I don't know that they can sell 15,000 a year at $80,000. I do not know anybody who can. On the other hand if they can buy the components at the right price, I imagine that price can come down much lower. They have Vic Doolan who is a terrific guy and is setting up distribution. But when he goes out to sell or get dealers to set up distribution for one car that sells for $80,000, the best that he is going to be able to do is to get some good dealers who put it into showrooms. When you put a car in an existing show room, you are a stepchild, and although you will sell some, you're not going to be able to give it the real kind of respect.

ABG: The main focus is on the big brand and not the little guy in the corner.

MB: They're talking cylinders and they're talking horsepower. And over here you're talking amps and volts. The two don't match. The service doesn't match. The sales doesn't match. There is nothing about it that matches and you will sell some if they are really cool cars and they are cool cars, but if there is a problem, if there is a warranty, if there is something that goes wrong. It is easier the dealer to say goodbye, I'll see you later because he doesn't have a big investment, and you need dealers who are going to stick into this game.

ABG: So you've got ElectroVaya signed up now to supply batteries for this program of yours. What type of batteries are they supplying?

MB: They have a lithium battery that is we think is the best density in the business. We will have 15 kilowatts in our car that will weigh under 200 pounds.

ABG: Okay, that's pretty good. Do you know roughly what the cost is going to be?

MB: We believe we are going to be able to bring a cost of $350 a kilowatt including the electronic control system. That is a big deal by the way. I've been all over the world, looking at every battery that we can look at. We looked at A123 to Altairnano to you name it. The closest that I have gotten to that is $500 plus the electronic control system.

ABG: Does ElectroVaya have these batteries in production right now for automotive applications?

MB: They have them in minimum production and they have put them in some vehicles for various states. There is a Ford that has one for New York state and there are several others. But again they have a factory and they are building in a factory-type atmosphere, but nobody has the quantity that we are talking about and nobody yet has built them in the quantities we are talking.

ABG: What about the rest of the car? Who is doing the engineering on that car? What is the current status of the first vehicle that you want to build?

MB: The first vehicle is on its way, I cannot tell you yet who is doing the engineering because we had not agreed yet to disclose that. I will tell you that we are very close to making a deal on the engine, which is going to be a very small rotary engine. Roughly, 60hp and 450 to 500 cc. That is going to be about a foot by about 10 inches. It is going to be clean as can be and it is going to be really revolutionary. (ABG has been asked to not disclose who is designing or producing the engine yet. Visionary Vehicles will be making a separate announcement about that in the next few weeks).

ABG: The vehicle is basically going to be configured as a series hybrid type of vehicle?

MB: Yes.

ABG: Is it going to be set for the engine to run constantly or only when the battery state of charge falls to a certain level?

MB: It will only run when the battery state of charge falls.

ABG: What kind of timeline do you see for having prototype vehicles running and then for production?

MB: Prototypes running this year, cars off the production line in '09, but we will not deliver until 2010. One other thing that we are doing is talking to all the other people who are trying to develop cars because it is very possible some are going to be ahead of ours. If they are and we can show them that buying our components makes more sense from the competitive point of view so we can bring the prices down, because $80,000 - although we would sell an $80,000 vehicle - it will really have to be an expensive vehicle. If we are going to sell them in quantities, we just don't think anything over $50,000 is going to sell in big quantities. We are going to talk to everybody including three-wheeler and four-wheeler and maybe some of their cars can come off and go to our dealer network before our car comes out.

ABG: You are also planning to participate in the X-Prize program.

MB: I think the X-Prize, I could not - if I had all the money in the world, I could not figure a better way to go get customers and go to find people to go out and develop technologies that I am going to use. Two things that we are doing, first of all we are doing everything we can to help the X-Prize get as many people in as possible. Number 2, we are going to offer our technology to anybody who wants to get in the X-Prize. Number 3, we are going to make a flat statement: anybody who comes in with any good ideas, we are either going to license it from them or, if they come up with a full car, distribute it for them.

ABG: Back to your vehicle for a minute, is rear wheel drive or front wheel drive?

MB: It is going to be all wheel drive. Now, we are talking to some people right now about hub motors. I do not know if we will be ready for first-generation, but I would love it because, I have driven one with hub motors and it's just outstanding. Of course, if you do regenerative braking it's just fabulous.

ABG: Have you signed up any other manufacturers that want to license or use any of your components yet?

MB: No, we have just started to put the components together ourselves. We announced actually this morning, the ElectroVaya contract. We have not yet even announced that we have done this engine, we are in the process at that right now. That will be the second thing. The third thing is we are playing with a couple of electric motors and we are going to decide on, which one we want to develop. We have one that we think is head and shoulders above everything. It is an electric motor that after you run it under load, you can put hand on it, when you talk about energy efficient, it doesn't get better than that.

ABG: Yes, that's certainly an issue with electric motors, they get hot.

MB: I talked to experts and they said I need to go away. It is like perpetual motion, don't talk to me. They saw it running and they were flabbergasted. So what we've done for the last 14 months is we've run around the world, looking at everything and trying to figure out what are the best components that we could use for ourselves, and that we could end up owning enough rights to so that we could then get marketers around the world. There is something else that we are going to do. Talk China, there are 120 car companies in China, 20 are substantial, 100 of them are trying to be substantial. They're all fighting like crazy, like dot coms, to go sell a million vehicles so they exist and they don't get wiped out. One day in the next six to eight months, everybody is going to wake up and say, "oh my goodness, I'd like to have a plug in." It's a segment that we better be in. How do you get in?

You go out and you hire a whole bunch of people and you go and you do everything we just did. Run around the world and try to find a battery, a controller. Make sure there is plenty of everything. Let's say you decide on something, you can hire some engineers and they will build a car. By the way, building electric hybrid plugs is a lot easier than starting designing a car and designing engines and designing transmissions.

ABG: There is a lot of integration issues now with motors and batteries and controllers. That is actually the really difficult part. It is not designing a battery or a motor or an engine. It is putting all those pieces together and getting everything to work smoothly and seamlessly.

MB: You're right, but unlike a Prius, which is very complicated, we are talking about, all that has to happen is the controller has to tell the engine to switch on when the battery goes down to X and run. It's running at consistent rpm. There is a lot less complication than anything else.

ABG: You have to manage the battery, in order to insure that it will last for a reasonable life span.

MB: There is thermal runaway. Yes, I know that you're right.

ABG: It also has to work in environments from 40 below to 120 Fahrenheit.

MB: But once that's done it's a relatively simple thing to design a car.

ABG: Do you anticipate most of the companies that might want to pick up this technology from the supply base that you are trying to establish might be in China?

MB: They are all over the world because what they have done is that they gone out and they bought engines from somebody else and transmissions from somebody else and they built a car. Now, they have to go into a new segment, it is called electronic hybrid plug in. We are they going to go. After they decide on what they want to put in there, how do they do it? General Motors can subsidize it until they can get to the volume they need to. But how does a small company who maybe is going to build 5,000 of these vehicles ever get into business competitively? They can't. What we are going to do is offer partnerships around the world where they are going to be, for five million bucks, my R&D partners. They have got all our R&D and they get to buy from our suppliers in onesie, twosie, the same quantity as General Motors when they buy a quarter of a million.

ABG: So you're doing some aggregate engineering here, aggregating the resources in order to produce the powertrains.

MB: Then the little guys will become big guys without to having to make a big investment. After they buy our components since they have the same components, I can do the warranty, we are going to let them sell through our dealer network and our distributor network worldwide. So, people who before had their limited place where they could sell, they can go in to this category where all of a sudden, they are going to have international distribution.

ABG: Do you want the dealers to set up exclusive outlets for these vehicles?

MB: We are going to have exclusive outlets, because I am not only going to sell my vehicle. They are going to sell everybody else's vehicle that buys our components. Our dealers will end up being the place you'll go to. If you want to see the new electric vehicle three-wheeler or four-wheeler or electric hybrid plug-in that comes in. If it is going to be in any kind of quantity, we are going to be using our components, we are going to do the warranty, and they are going to be sold through our dealer network. Although our car is what we are getting started from, in the whole scheme of things our car will be one out of maybe a dozen vehicles that are being sold.

ABG: Certainly for a dealer setting up with an exclusive dealership, if they have multiple vehicles to sell, it makes them a lot easier for them to justify the investment.

MB: If you're gambling on one vehicle being a hit, it's a tough way to go.

ABG: Do you have anything else to add to this?

MB: No, nothing. Our next thing is one of these days is somebody is going to come through with a fuel cell and we will take that engine out and put a fuel cell in and that thing will be sold through our dealership.

ABG: All right, thank you so much for your time

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