RTEV: From Golf Carts to Electric Cars

That's the vision of Mike McQuary, whose experience managing Web service Mindspring is helping him run a small startup in South Carolina

by Diana Holden

Watch the Video…

As the Internet revolution gained steam in the mid-1990s, Mike McQuary walked away from a comfortable career as an operations manager for Mobil's chemical division to join a small Atlanta dial-up service called Mindspring. That career gamble paid off in 1999 when the Internet service provider announced a merger with California-based EarthLink (ELNK)—leaving McQuary, by then Mindspring's president, "enough money to do anything," as he says, "but not enough money to do nothing."

But what to do next? After seeing the merger through, McQuary, who is now 48, left EarthLink, started a small record label, and dabbled as an angel investor. But he didn't really find his next calling until he stumbled on Who Killed the Electric Car?, the 2006 documentary that chronicled the short life of General Motors' (GM) EV1 electric car. As he watched the film, McQuary was struck by the zeal that the customers who leased the EV1 had for the project. "That passion—the only other time I'd seen that was in the early days of the Internet," he recalls.

Soon after, McQuary bought a stake in a small South Carolina company that made golf carts, and he has spent the past two years remaking it into a platform for his next big venture: the launch in early 2009 of a low-speed—but street-legal—electric car. By 2010, McQuary hopes that the company, RTEV (which stands for Ruff & Tuff Electric Vehicles), will be one of the first companies to come to market with a full-speed electric car. "We can make great cars that customers can actually get excited about," McQuary says.

Competing Against Giants

Still, the odds of success for McQuary's latest venture are about the same as for, well, an Internet startup. Right now, battery technology is not advanced enough to power a full-size sedan for a long distance, and with McQuary admittedly relying on "off the shelf" technology, he won't have a competitive edge when more powerful batteries do become available. Then there's the cost: Because of the currently hefty cost of electric batteries, the 35-mph, two-seat model McQuary will launch in 2009 will run something less than $30,000—more than double the current price of a gas-powered compact, such as the Toyota (TM) Yaris or Hyundai Accent.

Even then, McQuary will have to convince consumers that RTEV's cars are as reliable as electric cars being developed by such giants as General Motors (GM), Nissan (NSANY), and Chrysler, as well as such well-funded and higher-profile startups as Tesla Motors, whose sleek roadster zooms from zero to 60 mph in 3.9 seconds. "The history of the auto industry is filled with companies like this," says James Hall, a principal at 2953 Analytics, a Detroit auto-industry consulting firm. Hall says consumers shy away from smaller automakers because "[they] may have a nice early vehicle, but you may find they're not around after a while." What's more, building cars is "psychotically capital intensive," Hall says. "I wish him luck."

McQuary is confident that his company can compete, even with less capital. "You've got to make sure you're spending wisely and being smart," he says. From his experience at Mobil, he says big companies have some inherent disadvantages in a fast-moving market. RTEV will be able to do things more quickly, he judges, than a large company.