Revolutionizing Urban Transport

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"Lee Iacocca and many others with good technologies and good vision went at it at the wrong time," says Bowman, noting that oil sold for just $12 a barrel when EV Global was launched in the U.S., making electric vehicles a "nice to have" rather than a necessity. "The primary economic driver of the market has really only come about in the last three years," he says. "So everybody who came before, no matter how good or famous, was going to fail."

A More Efficient Motor

Ultra Motor is betting that with oil now exceeding $100 a barrel, Americans may finally start embracing more eco-friendly forms of transport. For example, New York City Transportation Dept. planners have been consulting with Danish urban designer Jan Gehl on a plan for the city's first-ever physically separated bike lane in Manhattan. Unlike the typical on-street bike lane where cyclists mix with motor vehicle traffic, this new design will create an exclusive path for bicycles—and, Ultra Motors hopes, two-wheel LEVs.

The British company's vehicles are an eco-friendly cross between a bike and a motorcycle. By providing one-third more force than conventional electric motors in similar power ranges, Ultra Motor models can accelerate faster in heavy traffic conditions and climb steeper hills. Another key benefit is that the battery packs are up to 10% more efficient, meaning they need to be recharged less frequently. And the motors use very few components and moving parts, making them cheaper to manufacture and easy to service.

Ultra Motor's products are proving popular in India with commuters looking to offset the adverse effects of gas prices on their disposable incomes. They're also a hit with teenagers under the age of 18 who can't legally ride motorcycles or gas-powered scooters and so must use pedal bikes or take the bus, says Bowman. Ultra Motor figures it can sell about a half-million units in India alone over the next two to three years—and potentially more than five times that number if the Indian government imposes disincentives to buying gas-powered vehicles.

Lithium Ion Batteries for the U.S.

Ultra Motor's U.S. model, known as the A2B, will be quite different from the Indian ones. The biggest change is the battery: Indian models use cheaper but clunkier lead-acid batteries, whereas the A2B will use smaller, lighter, lithium ion batteries. That will allow the battery to be integrated into the frame, making for a sleeker design. The removable battery, about the size of a box of facial tissues, can be charged from a normal electric outlet, just like a mobile phone.

Made of lightweight aluminum and sold through specialty retailers in the U.S., the A2B can run at speeds up to 20 mph and go up to 44 miles on a single charge. It will carry a price tag of $2,200, less than the typical cost of a Vespa scooter but significantly more than the Currie E-Zip Comfort Electric Bike, which sells for just over $300 at Wal-Mart (WMT). Bowman thinks customers will pay a premium for Ultra Motor's lighter, sleeker, longer-range design.

U.S. Market Is More Interesting

Who are these customers? Ultra Motor is targeting a select group of buyers in the U.S.: College students looking for eco-friendly campus transit; urban dwellers who rarely venture out of a 20-mile zone; and suburban commuters who might otherwise ride a bike or drive a car to their local train station.

Why launch in the U.S. before Europe, when the Old World is going green faster? "The U.S. market is more interesting right now because there is significantly less competition and it's more homogenous," Bowman says. "It is a greenfield opportunity." While he concedes Ultra Motor LEVs won't likely be bought by "farmers in Nebraska," Bowman says the company's market research reveals millions of people living in U.S. cities "who have never been exposed to this idea."

For more on the urban-transport revolution, see the BusinessWeek.com slide show.

Schenker is a BusinessWeek correspondent in Paris.