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Green Design June 16, 2008, 12:32PM EST

The Electric Car Lives

(page 2 of 2)

Even well-established gas-electric hybrids such as the Prius and Honda's (HMC) Civic account for barely 3% of U.S. auto sales. "Until you've got a compelling product, you won't have a market," adds O'Dell. Aside from the sleek Tesla Motors Roadster, which carries a price tag of nearly $100,000, there are almost no fully functional electric vehicles that meet average drivers' requirements. The Ox could fill that gap.

"It'll take a lot of time," Wilber James, RockPort's managing general partner and acting president of Think North America, says of the challenge of selling electric vehicles to American drivers, who still overwhelmingly prefer trucks to thriftier small cars. "We're going to focus at first on niche markets—cities, universities, and fleets."

Innovative Manufacturing

The company's business model, says James, is similar to that of PC maker Dell (DELL), which fueled its rise by ruthlessly optimizing its manufacturing and supply chain. Think's ultralean manufacturing system lets it build production facilities for about $10 million, compared with the billions invested in new plants by old-line manufacturers. That means more factories closer to customers, further cutting costs.

In addition, factories "could also be the retailers," says James, which would add a unique element to Think's branding. The company, he says, will be profitable if it can sell 10,000 vehicles a year. At 20,000 to 30,000 units in annual sales, Think can cut its component costs in half.

That focus on innovative manufacturing, in addition to the high-tech Ox itself, may ultimately set the company apart from previous attempts—and, Think is betting, finally help jump-start the U.S. market for electric cars.

For a look at an alternative approach to electric vehicles aimed at commercial city fleet-cars, see Duracar Delivers with Eco-Trucking (BusinessWeek.com, 6/16/08).

Business Exchange related topics:
Electric Cars
Green Cars
Hybrid Cars
Green Technology

Vella is a writer for BusinessWeek.com in New York.

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