A recent article discusses the surprising large size of the low-speed electric vehicle market in China. With over 200,000 LSVs produced there in 2013, it dwarfs the nearly 15,000 sold in the US. Some interesting characteristics of the market include, according to the article, a complete lack of regulation. Not surprisingly, hand in hand with this is a lack of safety features on the vehicles. On a more positive note, a host of component manufacturers and innovative low cost manufacturing processes have also cropped up to support this market and enabled many manufacturers to enter the fray.
A common design for a Chinese LSV is four doors with one seat in the front and two side-by-side in the back. The seating room would be considered small by Western standards. Chinese LSVs typically use lead-acid batteries and are powered by 1.5-kW to 4-kW DC motors with a top speed of around 38 miles per hour and costs range from $2,000 to $12,000. They are particularly popular in rural areas. Learn more: Green.autoblog.com
Comment: As the article points out, the small size of the US LSV market makes it a less appealing export market to Chinese manufacturers with so much opportunity at their doorstep. A friend of mine tried for several years to import a quality LSV from China that met the US safety standards and consumer requirements. He had a difficult time finding any company willing to spend the money to do the testing and meet the standards for a relatively small market opportunity. At the time, the quality of many of the vehicles he looked at was also not going to meet the needs of the US market.
Another difference in the markets is that the US market has become more of a commercial/institutional market. In the US, many of the consumer markets where LSVs would be useful are already served by golf cars and from what I’ve seen the trend among municipalities has been to allow golf cars on public streets rather than restrict them. This negates to a large degree the necessity of having purposely built LSV compliant vehicles. The commercial/institutional buyers however are looking for vehicles with those added safety features and official designation as an LSV.
In general, international markets offer greater potential for small electric vehicles than the US. From other developing countries in Asia to urban environments in Europe, from both a regulatory and market demand perspective, these markets are more conducive to creating a substantial market for these vehicles.
The new GEM M1400, a gas versions of the GEM eM1400, is new for model year 2015.
Polaris’s GEM brand announced their model year 2015 lineup including LSV and gas variants of the eM 1400 utility vehicle introduced last year. Besides these additions, the lineup includes e2, e6, e4, and light-utility vehicles eL, eS, eL XD, eM1400. They can haul up to 1,450 pounds of payload and can seat two to six passengers.
The M1400 gas powered vehicle features a 31 hp, ProStar electronic fuel injected engine and a cargo payload of 1,100 lbs. The LSV version of the eM1400 is street legal and has a top speed of 35 mph. Both vehicles will begin shipping in October 2014 with an MSRP of $10,999 for the LSV version and $7,999 for the gas version. Learn more: Automotive-business-review.com
Comment: Polaris has made the commercial/institutional and small electric vehicle segments a strategic focus and continue to execute on that strategy similar to what they do in other markets – by frequently rolling-out new models to target specific segments or sub-segments. I was surprised when they first launched the eM1400 and specifically mentioned customers looking for a non-LSV vehicle. While this may have been true for some of the market, from SVR’s research in the large college/university/institutional market, we knew that LSV compliant vehicles were in demand as they helped address buyers safety and liability concerns, regardless of whether or not the vehicles would be used on public roads. So it is not surprising that they have quickly followed with an LSV version.
The gas version is interesting from a branding point of view since, I assume, it is the beginning of an expansion of the GEM brand which has previously only been associated with electric vehicles. By developing gas vehicles under the GEM brand, Polaris can use the same distribution/marketing channel to meet the needs of commercial/institutional buyers that require both electric and gas vehicles. This should be more effective for them than trying to sell GEMs through one channel and gas powered Rangers through another channel to the same customer. The expanded branding also allows the company to extract more value from the GEM brand, which had stagnated for a number of years before being acquired by Polaris but had potential.
The Sportsman ACE, one of the many different vehicles that helped drive record quarterly performance for Polaris.
Polaris Industries reported record second quarter results with sales of $1.014 billion and net income of $96.9 million. Sales increased 20% from Q2 2013 and net income 21%. Key drivers were an increase of 15% in North American retail sales with strength in ORV and motorcycle products. Management also raised their full year guidance to a 16-18% increase revenue. Here are some highlights from the earnings call with a focus on small, task-oriented vehicles:
ORV sales increased 13% for the quarter to $701.5 million
Guidance for full year: up 11%-13%
Side-by-side sales up low teens % and outpaced the market
Polaris gained market share in side-by-sides and ATVS
Sportsman ACE is selling well and customer data to date indicates that it is reaching a new market segment
New ORV models will be announced shortly
Promotion environment for side-by-sides remains aggressive
Small Vehicle sales increased 29% to 43.5 million
Aixam Mega sales up over 40% in Q2
GEM and Goupil sales combined increased 6%
New products will be announced in the second half of the year
Small Vehicle sales guidance for the year: up 25%-30%
In the commercial segment Brutus sales are below expectations as the company tackles the B2B sales process but Bobcat and National Account sales did well.
International sales increased 29% in Q2 to $170.5 million driven, in part, by side-by-side sales in many regions
Comment: Polaris continues to operate on nearly all cylinders and will be shortly rolling out new products. Their only weakness appears to be in the commercial segment. It is telling that Bobcat and national accounts did well in the quarter but the Brutus retail sales, while improving, remained below expectations. This points to the continuing mismatch between the majority of Polaris’s distribution network and the commercial customer the Brutus is targeting. Most of their current dealers are accustomed to a different consumer-oriented sales process. Management is likely to pursue additional marketing partnerships in this segment to bolster commercial sales while trying to assist, train and bring more of their traditional dealers up to speed in this segment. But this is nitpicking, the company continues to roll in competitive markets and is even exceedng high expectations.
The new Kawasaki Mule PRO-FXT with seating configured for three with additional room for cargo.
The Mule PRO-FXT Camo model configured for six passengers.
The 2015 Kawasaki Mule PRO-FXT’s tilt cargo bed in action.
Kawasaki recently announced their newest Mule utility vehicle, the PRO-FXT which can seat six or three with an additional 20″ of cargo space using their configurable Trans Cab seating. The Mule PRO-FXT comes in four models: non-electronic power steering version, EPS, EPS LE and Camo. The vehicle lineup features a new 812cc three-cylinder fuel injected engine which produces 48 ft-lbs of torque and is matched with a continuously variable transmission. Other key features include:
Electrically selectable 2WD/4WD system that has a dual-mode rear differential
CVT with engine braking
1,000 lb hauling capacity
2,000 lb towing capacity
Digital fuel injection
10.2 inches of ground clearance and 8.7 inches of suspension travel
Short wheelbase and overall length
LCD instrument cluster
Four automotive style doors
Three-point harnesses for each passenger
High output alternator and multiple 12 volt outlets
Tilt-steering on most models
The MSRPs for the product lineup are $12,999 for the base model, $13,999 for the EPS, and $15,999 for the EPS LE and the Camo versions. Learn more: UTVunderground.com
Comment: While a lot of attention has been paid to the competition in the sport UTV segment, the work UTV segment is heating up as well. This is the second 2015 model year vehicle to feature six passenger seating, the other being the Yamaha Viking VI. We are also seeing a continued emphasis on versatility, more horsepower, auxiliary power and an extensive lineup of accessories. While the sport UTV segment maybe the glamour segment, the work UTV segment offers some growth opportunities for companies as more potential customers realize the versatility and productivity of work UTVs. If they make sense from a cost benefit point of view than the market will respond. It also helps that one of the booming areas of the economy is the energy sector which requires off-road access and the ability to move work crews around. Kawasaki, Yamaha and Polaris are all making pointed efforts to expand their presence in the work utility segment.
The Flex L3 electric truck produced by Ligier is now available in the UK.
ePower Trucks will be the UK distributor for Ligier’s Flex L3 electric utility truck. Ligier is a French manufacturer. Powered by lead gel batteries, the street legal Flex L3 has a top speed of 25 mph and a range of 35 mph. The target applications for the vehicle, which can come in a flat bed, cage, box body or tipper configuration, are urban delivery and estate management. The payload capacity is up to 400 kg. The Flex L3 is priced at 13,500 pounds and is available in white, red or gray. Learn more: Transportengineer.org
Comment: The urban delivery market application is a good niche market for electric vehicles especially for the delivery of goods that are neither too large or heavy. This type of application requires slower speeds and less range so more expensive lithium-based battery packs and more powerful electric powertrains are not necessary. This type of application is more prevalent in Europe and Asia. For similar reasons, light-duty maintenance applications on college or corporate campuses or city parks are also a good fit for this type of vehicle.
Polaris Ranger with HIPPO Multipower System at a recent trade show.
Polaris recently launched their Ranger Crew Diesel utility vehicle with an integrated HIPPO™ Multipower™ System (MPS) from the Mobile Hydraulic Equipment Company. The MPS allows users to power hydraulic, pneumatic, electric and welding equipment directly from the vehicle’s diesel engine, in this case a 24 hp engine. Polaris points to rail, municipal, construction, oil and gas, rental, utilities and mining industries as well as the military as potential markets for the vehicle. The integrated HIPPO 1041CP Multipower System has one hydraulic tool circuit, two quick disconnect pneumatic fittings, two 120 volt electric outlets at 20 amps and one welding console with quick disconnects.The RANGER with HIPPO MPS is currently available for sale through authorized dealers, Polaris Fleet Sales and defense channels. Learn more: Polaris.com
Comment: This vehicle is a continuation of Polaris’ strong push In the last several years into the commercial, government and military utility vehicle segment. With a sales process and longer selling cycle than what their typical dealers are accustomed to, management has not been satisfied with their rate of progress in the commercial and government segments. To that end they have developed partnerships with companies and brands with a strong presence and marketing experience in the commercial markets such as Bobcat, Ariens and now Mobile Hydraulic Equipment Company.
The 2014 RZR XP 1000 shown here will feature additional horsepower in model year 2015.
Polaris recently introduced the 2015 RZR XP 1000 and XP 4 1000 which feature a 110 horsepower high output engine compared to 107 hp in the 2014 model. The 2015 models feature additional changes related to the boost in horsepower including:
New engine calibration with high-output cams, stiffer valve springs and a higher compression ratio of 11:1.
Revised exhaust system, incorporating closed loop control and catalyst technology improves emissions and efficiency.
New direct flow intake covers, new belt and a new clutch cover with more ducting providing two times more airflow directly to the clutches
The RZR XP 1000 will be available in Havasu Red Pearl, Voodoo Blue and White Lightning, and the RZR XP 4 1000 in Havasu Red Pearl and Voodoo Blue. All units feature standard Electronic Power Steering (EPS) and will be available in dealerships starting in July. Learn more: Polaris.com
Comment: The competition in the side by side market remains strong. In the high performance sport segment horsepower is one of the areas where competitors try to outdo each other. Suspension travel and handling are not far behind. I expect to see some new models or updates from Arctic Cat and/or Can Am in this segment.