Detroit Electric Takes Stealth Approach to Marketing EVs in U.S.

NEW YORK – With only 18 months to go before sales of its fully electric vehicles are targeted to begin in the U.S., Detroit Electric Holding Ltd. still has not signed any franchise agreements with dealers here.

EVs to be built on existing Proton Persona and Gen 2 models.

“I'm getting a lot of inquiries,” says Marianne McInerney, president of Detroit Electric North America. “We have an opportunity to change the way we work with dealers.”

The application process will begin at the start of the summer. “But we won't sign any dealers until July,” she adds, noting Detroit Electric will award large territories. “We won't exceed 140-150 dealers.”

The Netherlands-based auto maker and Malaysian national car company Proton Holdings Bhd signed a strategic partnership this month that calls for the mass production of a range of EVs, with Detroit Electric integrating its patented electric-drive systems into the vehicles.

All of the EVs will be built on the existing Proton Persona and Gen 2 models.

Sales are scheduled to begin in the U.S. in third-quarter 2010, says Albert Lam, chairman and CEO of the company. He forecasts Detroit Electric will sell 40,000 EVs in the first full year they go on sale.

The first model to hit the market will be the base vehicle that will have a range of about 100 miles (161 km). Later, another vehicle with double that range will be offered. The major difference between the two vehicles is the number of battery packs. The base model will have eight to 10 battery packs, while the extended-range version will have 15.

The lithium-ion cells will be manufactured in South Korea and assembled into packs in Malaysia. Warranty coverage for the battery packs will be five to seven years. About half of those will be in the U.S. and the remainder in other global markets.

Lam says the EVs will be marketed under the Detroit Electric brand in Europe, the Middle East, South Africa and a number of Asian countries. The big exceptions are India and Japan. The Indian market is not yet developed for EVs, he says. “We'll have to hold off for a while in Japan.”

Hong Kong and Singapore are expected to be particularly hot markets because of their pollution problems. The Detroit Electric EVs also will be sold in China, Taiwan and Australia.

Lam says he’s received encouragement to export his vehicles to China. “But eventually we'll be in the Middle East. Oil is going to run out eventually.”

McInerney declines to say what the investment cost will be for dealers but promises they will get a full line of EVs to sell. However, they will be required to provide stand-alone dedicated facilities. “We won't have any dual dealers.

“In seven to 10 years, we plan to roll out eight to 10 models, ranging from a sub-compact all the way up to a fullsize sedan,” she says. Plans also call for Detroit Electric to offer a minivan.

Lam says the deal with the Malaysian auto maker does not bar it from signing other agreements to electrify U.S.- or European-brand cars.

However, Detroit Electric has no plans to assemble EVs itself. “We are a technology company,” he says, noting his company builds motor and battery controllers, which it intends to license to other auto makers.