Self-Driving Vehicles = Growth For STOVs?

Google Prototype self-driving low-speed vehicle.

My colleague recently penned an article exploring the nexus of self-driving cars and golf car-type vehicles. Some of the key takeaways:

  • Hardware costs are dropping precipitously and may soon be within striking distance of being affordable for golf car type vehicles.
  • Golf car manufacturers are already exploring the technology and in some cases conducting testing.
  • Other companies are using GEM vehicles as self-driving test vehicles.
  • Gated communities with low speed vehicles provide a lower complexity environment that is more conducive to self-driving solutions.
  • Self-driving technology could expand potential growth avenues in non-golf car markets, an area of focus for golf car manufacturers

The article points to gated communities and urban fleets as potential market segments for deployment of self-driving technology. There are also other potential market impacts not addressed in the article that this technology can have.

For one, self-driving technology could provide an impetus for LSVs sales in the personal transportation sector. Purpose made LSVs have not quite reached their potential in this segment due to the relative cost of LSVs compared to the available market alternatives such as used golf cars, golf cars modified to be LSV compliant, customized golf cars and new golf cars. Put simply, not enough customers have found the additional price of LSVs to be worth the additional benefits. LSVs for personal transportation have done best where local regulations have favored them such as where golf cars or modified golf cars are not allowed on public roads but LSVs are, or where night time driving or other driving restrictions require LSV compliant technology.

Self-driving technology could be a differentiator for personal transportation LSVs. Since they are higher priced, LSVs are likely to feature self-driving technology before traditional golf cars. While it is possible existing golf cars could be retrofitted with self-driving technology, it may prove cost prohibitive and, more importantly, likely to encounter regulatory issues. It’s one thing to slap on some lights and an auto-style windshield, it’s quite another to install the software and hardware components necessary to create a self-driving vehicle, not to mention supporting the system with updates moving forward.

Regulatory issues brings to mind another consideration in regard to self-driving technology, medium speed vehicles (MSVs). While a few states in the US allow medium speed vehicles, at the Federal level NHTSA has never created a MSV classification and, in fact, has strongly opposed the idea on safety grounds. A MSV would require prohibitively expensive safety features akin to a highway capable vehicle.

Can self-driving change this dynamic? It is a possibility worth considering. In January, 2017 NHTSA completed their investigation (PDF file) of Tesla’s Autopilot and Automatic Emergency Braking (AEB) system, which was initiated following a fatal crash of a Tesla with a tractor trailer in Florida. Their conclusion was that, “A safety-related defect trend has not been identified at this time and further examination of this issue does not appear to be warranted.” However, for the purposes of this discussion, the most important finding of the report was related to Tesla vehicles before and after they had Tesla’s Autopilot Technology Package (ATP) installed at purchase or through updates. “The data show that the Tesla vehicles crash rate dropped by almost 40 percent after Autosteer installation.”

This is an astonishing drop, and even more so considering it does not take into account whether Autopilot was in use. Therefore, this improvement is likely a conservative finding. The question is straightforward. Can MSVs use self-driving technology to make them safe enough to pass NHTSA’s regulatory rigor? Why rely on a package of older and likely more expensive safety technology to improve MSV safety when a potentially cheaper and possibly more effective solution is on the horizon. It may soon be time to revisit the possibility of creating an MSV classification, which could open up a range of potential growth markets.

Marc Cesare,

Should Autocycles Be Next For STOV Manufacturers

Marc Cesare,

Arcimoto SRK

The electric powered Arcimoto SRK is expected to be available later this year.

I have come across a number of articles recently focusing on autocycles and I thought this might be a potential product development direction for STOV manufacturers.

First, what is an autocycle? It is basically a three-wheeled vehicle such as the Slingshot by Polaris, or offerings from start ups such as Elio Motors and Arcimoto. There is no standard definition for an autocycle in the US or other countries. In the US, an autocycle is typically classified as a motorcycle, although not always, as Polaris discovered with their Slingshot. They have had to work with some states to develop legislation to allow their vehicles on the road. (See how the classification for the Slingshot varies by state.)

The benefit of being classified as a motorcycle is that the vehicle does not have to conform to more expensive automobile safety standards. This benefit is key to providing STOV manufacturers with a new product opportunity. In particular, I believe Polaris and the golf car manufacturers are well positioned to produce a more practical neighborhood electric vehicle that can provide a good value proposition in relation to street legal golf cars (new or used), low speed vehicles and lower priced highway capable cars.

Now Polaris already has the Slingshot, but this is more of a recreational vehicle designed for those interested in a motorcycle like experience with a greater sense of safety and requiring less driving skill. The Slingshot is highway capable, features a gas engine and pricing starts around $22,000. The not yet in production Elio Motors autocycle is also gas powered, highway capable and has a base price of $7,300. The electric powered Arcimoto SRK is expected to be available this year, has a top speed of 80 mph and starts at $12,000 for the 12kWh model which provides a 70 mile range. Like Slingshot, the Elio and SRK provide seating for two but they are placed front to back rather than side to side as in the Slingshot. All three feature two wheels up front and one in the rear.

While all three of these vehicles are capable of highway speeds, I propose that there is a real market opportunity for a medium speed vehicle (MSV). The medium speed, say up to 40-45 mph, would make the vehicles more practical to use for personal transport than golf cars or LSVs which top out at 19-25 mph. STOV manufacturers have pushed for a MSV designation but NHTSA has not been willing to budge on the costly safety standards for four-wheeled vehicles. This is why the motorcycle/autocycle classification is critical to this opportunity. A MSV autocycle would be a more viable second vehicle for many households and a more versatile neighborhood vehicle for those in gated or retirement communities.

The vehicle should also be electric powered to maximize the environmental benefits and also take advantage of electric motorcycle incentives where available. An electric autocycle would provide a significantly less expensive electric vehicle option to green consumers than the currently available electric cars. A MSV would also require a smaller battery pack than a highway capable electric autocycle, further reducing costs. Of course, a highway capable option could be made available but that would start driving up the costs.

Besides the aforementioned startups, who is positioned to develop these type of vehicles? Polaris is an obvious choice. They already have experience designing, engineering and producing an autocycle and they are innovators. They also have been acquiring electric drivetrain technology (Brammo) and electric vehicle brands such as GEM, Goupil and Taylor-Dunn. It is a vehicle that could potentially fit nicely into their portfolio of the brands that are sold internationally. The biggest challenge for Polaris would be distribution. A MSV autocycle would probably not be a good fit for their powersports dealers, as the customers would be more transportation than recreation oriented. Their brands such as Goupil, Taylor-Dunn and even GEM are geared more towards the commercial customer. Polaris might have to partner with another company to access the right distribution channels.

This brings us to the golf car manufacturers. They have the expertise in developing and selling electric vehicles, but not necessarily the three-wheeled variety and have been more focused on lead acid battery packs. One could argue that they also haven’t been that innovative. They do however have the right distribution network. Their customers are already coming to them for personal transportation solutions.

A MSV autocycle could find a home in Textron’s (maker of E-Z-GO) Specialty Vehicle division which encompasses a wide range of small, task-oriented vehicles. They have also been striking out into new territory with new ATV and UTV products under the Bad Boy Off-road brand. Another option is Yamaha Golf Car, although they are the smallest of the big three manufacturers. This leaves Club Car. As a subsidiary of Ingersoll-Rand they certainly have the financial wherewithal to develop a vehicle on their own, and they may be the best fit for a partnership with Polaris. Unlike Yamaha and Textron they do not compete directly with Polaris in the recreational UTV space. They are also considered by many to be the highest quality brand of the three and have over 600 distributors, dealers and factory branch locations.

It will be interesting to see if the autocycles from Elio and Arcimoto prove to be popular and encourage other manufacturers to join the fray.

Learn more:

Learn more:


Road Use Regulation Roundup: August 2016

The following is a summary of some of the road use regulations for golf cars, LSVs, ATVs and UTVs that have been passed or are being considered at the state, county and city levels since May 2016.

Some trends in this latest regulation roundup:

  • The ordinances were roughly split half and half between those dealing with golf cars and LSVs and those related to ATVs and UTVs.
  • ATV/UTV ordinances allow for higher vehicle speeds compared to golf car and LSV ordinances.
  • Regulatory activity is happening primarily at the town or city level, but there is some action at the county level as well.
  • Most of the regulations are in favor of allowing golf car, LSV, UTV or ATV access. Those towns restricting or prohibiting use tend to be concerned about vehicle congestion on particularly high use roads.

Georgia Tech University, Atlanta, GA – A new low speed vehicle and golf car policy was passed requiring that any Georgia Tech unit owning or purchasing LSVs or golf carts must ensure these vehicles are street legal and register each of them with Georgia Tech Fleet Services. LSVs must not be driven on high-speed streets (above 35 mph), and golf carts must not be driven on streets with speed limits above 25 mph.

Grayson County, TX – Grayson County Commissioners approved a resolution Tuesday to allow golf carts or similar utility vehicles to operate on some roadways in unincorporated areas of the county. Licensed drivers will be allowed to operate the carts on public roadways with speed limits of 35 mph or less. The resolution is only for unincorporated areas of the county, not inside city limits. Utility vehicles are defined as being designed for off-highway utility work, not for recreation.

Poth, TX – The City Council is considering adopting an ordinance currently being used in Rockport, which requires annual inspections of neighborhood electric vehicles at a cost of $10, and insurance coverage. Each vehicle must have headlamps, tail lamps, reflectors, parking brakes, rear view mirrors, turn signals, seat belts, and a flag, mounted on a 6-foot pole, attached to the rear.

Panama City Beach, FL – A regulation was passed in May preventing the registration of LSVs unless they can prove they had ordered them before May 12. The city is concerned that the increasing number of LSVs, which grew from 93 to 194 in the past year, will become a road hazard on Front Beach Road. Many of the LSVs are from LSV rental businesses.

Canton, IL – A new ordinance allowing golf cars and UTVs generated more interest than expected as the city quickly went through the original 20 permit stickers they purchased in the first month. Utility vehicles must be issued a $50 annual permit by the city, renewable mid-year, and provide proof of liability insurance that has at least the same limits of coverage required by law for regular cars. Operators must also be at least 16 years old and licensed drivers.

Landis, NC – The town board passed ordinances that would allow low-speed vehicles on public roadways. Lowering the speed limit on a key roads for LSV travel was required. The Police Chief supported the ordinance.

China Grove, NC – The town passed an ordinance that would allow golf cars and low speed vehicles to travel between China Grove and nearby Landis. Insurance, drivers license and permit are required to the drive the vehicles on local streets but an operator would not need a permit from both towns. Lights are needed to drive the vehicles at night.

Wake Forest, NC – Town leaders are considering allowing golf cars on some city streets at the urging of local residents. The local police department is against the ordinance for safety reasons.

Red River, NM – The town repealed an ordinance allowing ATVs and UTVs to access certain roads because of concerns over safely operating ATVs at high speeds on road rather than off-road. Manufacturers state that ATVs shouldn’t be operated on paved roads. The town expects to pass a new ordinance that will prohibit ATVs but allow UTVs on certain roads and at speeds up to 45 mph.

Ames, IA – The town started issuing ATV and UTV licenses in August. ATVs/UTVs are able to travel on gravel roads during daylight hours but cannot exceed 45 mph. The vehicles must have front and rear lights and the owner/operators must be insured, over 16 and have a valid driver’s license.

Peosta, IA – The City Council shelved an ordinance regarding the use of golf cars, ATVs and UTVs on city streets . There is concern over vehicle congestion on the already highly trafficked streets that the vehicles would most likely use.

Girard City, KS – The City Council voted down a ordinance that would have allowed the use of golf cars, ATVs and UTVs on city streets.

Squamish, British Columbia, CA – District of Squamish staff is drafting a bylaw, which, if passed by council, would see low-speed, zero-emissions vehicles allowed on Squamish neighborhood streets. Staff is also investigating the possibility of a future bylaw to allow medium-speed vehicles. A low-speed bylaw would allow the vehicles to travel as slow as 40 kilometers per hour, while a medium-speed bylaw would cover vehicles that travel 60 kilometers per hour.

Qualicum Beach, British Columbia, CA – Premier Christy Clark has announced a pilot project that will allow golf carts on local roads (but not major highways) in the Township of Qualicum Beach on Vancouver Island and the Village of Chase in the southern Interior. The move, which starts in September, is intended to give senior citizens another method of transportation around town to run errands.

Sichuan China To Loosen Low-Speed Electric Vehicle Restrictions

Reports from Sichuan China point to the government loosening restrictions on low-speed electric vehicles. The new regulations are expected in August for the province. Lead acid battery manufacturers that supply the market expect it to grow 15% in 2015. In related news, Shandong province, a major producing area of low speed EVs in China reports production of the vehicles is up almost 70% to 69,200 vehicles in the first quarter.  Learn more:

Comment:  When it comes to low speed vehicles the market size in China far outpaces the US. However a direct comparison is hard to make because low speed vehicles in China have a much higher top speed, about 48 mph. A more basic difference though is that there is simply more market demand. With comparatively low vehicle penetration, there is a sizable demand for vehicles that are more affordable than highway capable vehicles but can still get you around town locally.

NEVs: The Future of Transportation?

An essay in the May issue of Harvard Business Review makes the argument that vehicles like the NEV will be the future of transportation. The premise is that in the future car ownership will decline significantly as ride-sharing services become a more dominant mode of transportation. Given that most driving trips are local, NEVs are positioned well for this changing market, particularly in urban areas. Industry analysts view car-sharing services and autonomous vehicles as the future. An analyst from Morgan Stanley used the following graphic to illustrate the expected shift in car ownership and use.

What one analyst sees as the future for cars.

What one analyst sees as the future for cars.

There are some statistics that indicate the transformation is already under way. “… the average person uses his car for only one hour a day, according to a still-widely cited 1995 statistic from the U.S. Department of Transportation. And driving by U.S. household fell nearly 10 percent between 2004 and 2014, marking the first major shift in car ownership since World War II.”  However, it may be a while before a wholesale shift happens, if it ever  does. Learn more:

Comment:  While NEVs are popular in certain areas, like vacation communities and gated communities, they have not quite gained traction as predicted. In fact, SVR’s research shows that their use has largely switched from predominately personal transportation to commercial use, such as on college campuses and resorts. One reason is that more municipalities are allowing golf cars or modified golf cars to be used on public roads. The price differential between these and NEVs make the NEV the less frequent choice in these areas. Where ordinances are more restrictive, NEVs have proven to be a popular choice. The key to expanding the market is allowing the vehicles to travel at a higher speed than the currently regulated 25 mph. A NEV with a top speed in the range of 35 mph to 45 mph, often referred to as a medium speed vehicle (MSV), would open up the market considerably but this would require significant and costly changes in NEV safety equipment and/or design. NHTSA has been adamant about not creating an MSV classification as currently envisioned, and they are not enthusiastic about the mixing of NEVs with highway capable vehicles on public roadways. But in the future autonomous technology and advances in safety technology could improve safety and lower the costs of safety equipment enough to make MSVs viable.

Ashok Leyland Plans for Electric Version of Dost Mini-truck

The current ICE powered Dost from Ashok Leyland may get an electric brethren.

The current ICE powered Dost from Ashok Leyland may get an electric brethren.

India-based Ashok Leyland is working on an electric version of their Dost light commercial vehicle. A prototype was recently revealed along with electric versions of a larger truck and a bus. The Dost will be undergoing testing by the company to validate the concept. There is no timetable for when the vehicle will be commercially available. Learn more:

Road Use Regulations Roundup – September 2013

Some trends in this latest regulation roundup:

  • Municipalities are passing ordinances that not only allow LSVs but a range of utility vehicles including UTVs, ATVs and mini-trucks on public roads. The ordinances for mini trucks, which operate at higher speeds, may be the beginning of a backdoor approach to more medium speed vehicle ordinances at the local level.
  • There appears to be less concerns being raised about safety issues of the vehicles in mixed traffic.
  • Ordinances governing LSV parking were common this roundup.
  • There appeared to be less road use regulatory activity at both the state and municipal level so far in 2013.

State Level Regulations

Florida – A new golf car law went into effect that allows for the conversion of faster golf cars – or similar low-speed vehicles – to even lower-speed cars, saving golf car owners registration and insurance fees. A one-time $40 fee is charged.

Minnesota – A bill that would allow operation of mini trucks on local roads as passenger automobiles has been introduced in the House and Senate.

Municipal Level Regulations

Garden City, KS – The Garden City Commission drafted an ordinance which would allow micro utility vehicles (UTVs) to be operated within the city limits. The vehicles will be subject to state safety requirements such as roll cages, head and tail lights, turn signals and seat belts and will only be allowed to be operated by legally licensed drivers.

Britt, IA – The City Council is considering an ordinance to allow low speed vehicles on Main Avenue where they currently are not allowed. Some council members are concerned about safety and creating an opening for golf car use on the street.

Nederland, CO – An ordinance allowing electric golf carts was discussed.

San Antonio, TX – City Council has approved an ordinance that allows owners of NEVs to operate their vehicles on city streets with speed limits of 35 miles per hour or less. Several accidents in 2006 resulted in the vehicles being banned.

Powell River, British Columbia – The Council considered a low speed vehicle ordinance. A number of cities in the province have passed similar ordinances.

Baton Rouge, LA – The city is discussing the regulation of LSV taxis. The Taxi Control Board wants them to be regulated similar to other taxis.

Medford, MN – The Medford City Council is considering an ordinance to allow residents to use golf cars, all-terrain vehicles and mini trucks on city roads. The vehicles will need to be permitted, meet certain equipment requirements and operate on the streets only during specified hours.

North Wildwood, NJ – The City Council approved up to  20 designated parking spaces for LSVs. These spaces will be clearly marked and only low-speed vehicles may park in these spots.

Jascksonville Beach, FL – Council takes comments from the public on low speed vehicle parking in the city.

Santa Monica, CA – The city is trying to clarify free parking rules for electric vehicles that are tied to state issued zero emission stickers. The state rules governing the stickers narrowed the definition of eligible vehicles in such a way as to exclude LSVs, which previously had been included.

Polaris Acquires Small Vehicle Manufacturer Aixam Mega

Aixam Quadricycle

Aixam Mega Utility Truck

Polaris Industries announced the acquisition of Aixam Mega, a leading manufacturer of quadricycles and light commercial vehicles based in France. The acquisition adds to the company’s portfolio of small, task-oriented vehicles which includes GEM LSVs and Goupil commercial vehicles and increases their footprint in Europe as management targets international markets for future growth. In addition, the acquisition puts Polaris in a strong position in the personal transportation segment of the small vehicle market in Europe while adding to their commercial market presence.

Quadricycles are a class of vehicles characterized by limits on vehicle weight, top speed and engine power. Light quadricycles have a top speed of 45 kph and can be driven without a license in Europe depending on the regulations of the individual country. In France they have a classification similar to mopeds. There is also a heavy quadricycle classification that requires a license to drive. Aixam Mega has annual sales of approximately $110 million.

Aixam Mega offers a diverse lineup of small vehicles covering personal transportation and commercial vehicles, light and heavy quadricycles and ICE and electric powered vehicles. Their product lines include the Aixam line of quadricycles for personal transportation and their Mega brand of light commercial trucks and vans. They recently launched a new lineup of all electric models for personal transportation. Their Mega utility vehicles feature both diesel and electric powered versions of trucks and vans.

According to company information Aixam Mega is the market leader in Europe selling approximately 10,000 to 12,000 quadricycles of the personal transportation variety annually with about half being sold in France. The company has a network of about 400 dealers throughout Europe and two production facilities in France. Their Mega brand of light commercial trucks and vans are distributed internationally including in the US through Columbia ParCar.  Learn more:  TwinCitiesBusiness

Comment:  The regulations in Europe are more favorable for on-road small personal transportation vehicles than in the US where LSV regulations and road access are more restrictive. It will be interesting to see if Polaris tries to modify and export the Aixam personal transportation line into the US as an LSV. In contrast to many of the current LSV offerings on the market which still have a golf car like styling, the Aixam offers a more traditional automobile styling.  On the other hand, the US LSV market is still largely commercial oriented and the personal transportation segment may be too small for the effort without changes to regulations allowing for higher speeds.

In the commercial segment, the Polaris network of dealers, especially those already offering GEM vehicles, provide an opportunity to expand the US distribution of the Mega commercial vans and trucks. The configurations of the Mega utility trucks are a nice complement to the GEM product offerings and I can envision dealers being able to sell both lines to a customer with a range of small vehicle needs.


Where’s the Voice for the LSV Industry?

A number of events have occurred recently that demonstrate the need for an advocate for the LSV industry and raises the question of why there currently isn’t one. First, at the beginning of the year when the “fiscal cliff” bill was passed, a package of electric vehicle tax provisions were extended but LSVs were specifically excluded. The exclusion was typically framed as no tax credits for “golf cars”. In part this was the result of politics dating back to the original tax credits in the stimulus bill. A number of news outlets promoted the idea that these were tax credits for golf cars, which was factually wrong. At the time, the only push back I saw from the LSV manufacturers came from Tomberlin.  For this latest bill where was the advocacy for extending the tax credits for LSVs. These had provided a significant boost to the market when they were in place.

There was also NHTSA’s proposed rule regarding a warning alarm for electric vehicles. It’s application to LSVs in low speed environments such as university campuses and parks makes no sense since the alarm would be continuously sounding. This is a major market segment for LSVs. The rule also applies to electric motorcycles and within days the relevant industry association had commented on the ruling but there were no comments from LSV manufacturers.

Another event was the recent funding increase for California’ Clean Vehicle Rebate Fund. The increased funding was earmarked for only highway capable vehicles. Now, I understand that CARB wants to promote advanced technology, but at the same time LSVs have been successful in displacing fossil fuel use. They are being used as primary transportation in gated communities, viable secondary vehicles in communities with public road access and replacements for pickup trucks on college campuses and in public parks. They may not be advanced technology but they are affordable technology that can help towards the same goals.

More of a trend than a single event, is the use of golf cars on public streets. While early on local officials, usually with the support of the local police chief, were voting to not allow golf cars on public streets for safety reasons, that trend seems to be reversing based on what we have been tracking. In addition, some states allow golf cars to be modified to meet LSV standards. Both of these trends undercut the LSV market. Many people will choose to purchase a cheaper golf car without the safety features than an LSV or they can highly customize a golf car for the same price as an LSV and add the safety standards.

Part of the reason there is no voice for the LSV industry is that the market is still small in size. There are quite a few manufacturers but many are small and the for larger manufacturers LSVs represent only a small portion of their sales.  In addition, golf car manufacturers, logical choices to be more aggressive advocates, entered the LSV market relatively late. The market for LSVs continues to grow and hopefully in the future a forceful voice for the industry will develop. It would be helpful for not only LSVs but also if manufacturers ever want to establish a medium speed vehicle standard which would increase the utility of these types of vehicles and broaden the potential market.


Polaris News

Australian Market – Polaris introduced their Ranger Diesel utility vehicle in the Australian market not too long ago.  Reports are that New Zealand and the Australian outback serve as a testing ground for some of the companies vehicle prototypes.  International sales have been a significant growth area for Polaris UTVs and other vehicles as well.  Learn more:

GEM Acquisition – In a recent interview Polaris CEO Scott Wine discussed the company’s recent GEM acquisition.  Commenting on the potential GEM under the Polaris umbrella he stated “…if you think about Polaris’ ability to drive innovative design and performance, we really like what we can do with the GEM technology and brand.”  He also remarked that they view the GEM as a vehicle for the electric city car/commuter car market, which they expect to grow “significantly faster” than GDP.

What’s interesting is that historically the majority of GEM sales have been to parks, colleges and other commercial customers.  If Polaris is looking to push more into the commuter market they could add some muscle to lobbying efforts to push NHTSA to develop a medium speed vehicle standard, which they have resisted to date.  Learn more: