Platinum Equity, a global private equity firm, has announced the purchase of Ingersoll Rand’s Specialty Vehicle Technologies segment, which is primarily Club Car. The purchase price is $1.68 billion. The transaction is expected to close in the third quarter.
This is probably better for Club Car but that remains to be seen. Club Car always seemed a bit of an odd fit within Ingersoll Rand. The management did not make bold moves while being enmeshed in the conglomerate. Like the other golf car manufacturers, they were well positioned to take advantage of the off-road utility vehicle market, but mainly stayed in their lane and ceded much of the lucrative market to the powersports companies. They also allowed E-Z-GO to beat them to the market with lithium powered golf cars and personal transportation vehicles.
The question is how aggressive is Platinum Equity willing to be. Are they just looking for some operational efficiencies to milk more profits out of the steady but unexciting golf fleet market and the smaller but growing PTV and light duty utility vehicle markets. The firm owns some existing companies that already play in the automotive space to varying degrees that may provide some synergies like Ying Shing Enterprises, a China based injection molder and metal stamper, electronics manufacturer PCI Private Limited and Elevate Textiles.
On the other hand, maybe Platinum Equity see opportunities to expand the business by building on robust manufacturing volume, established supply chains and expertise in electric vehicles. The urban mobility/micro mobility market beckons, but will Club Car leave the golf car path? How about last mile delivery? Can Club Car transfer their strengths to electric scooters, e-bikes or other alternative electric vehicles? There are already startups establishing themselves in these markets. Arcimoto’s three-wheeled vehicle could challenge in portions of their utility and PTV markets. Polaris is partnering with Optimus Ride on low-speed autonomous vehicles.
The latter begs the question, was Polaris in the running to purchase Club Car? They like to acquire leading brands. Perhaps they didn’t see enough growth prospects. On the other hand, they may believe they can take advantage of new opportunities with less investment through GEM and their other in-house electric vehicle assets as they move to electrify their powersports products. It will be interesting to see in what direction Club Car and other players in the small, task-oriented vehicle market move next.
Polaris is expanding their partnership with Boston-based Optimus Ride to manufacturer autonomous vehicles. Optimus Ride has been slowly rolling out autonomous low-speed vehicle services based on the Polaris Gem. Previously, Optimus modified the GEMs, about 30 in total. Under the expanded partnership, a GEM specifically designed for driverless, autonomous driving will be developed with Polaris and be ready for the second half of 2023 according to Optimus management. The GEM vehicles fall under the Polaris Commercial business division.
Optimus Ride Autonomous Vehicle Background
Optimus Ride started in 2015 and has been proving its’ autonomous vehicle technology since then. Their service has been operating in a number of environments with routes that are relatively short and predictable. The routes are typically 1 to 3 miles with either fixed-route or on-demand services. The vehicles are all low speed vehicles and to date have also featured a safety driver. For example, the company operates a fixed-route autonomous vehicle service at the Brooklyn Navy Yard. In February, 2021 they announced a new service at TheYards waterfront development in Washington DC. Residents and tenants will use the Opti Ride app to schedule on-demand rides. These localized trips in developments, downtown areas and college and corporate campuses overlap significantly with the existing target market for the Polaris GEM product line.
This is another sign of Polaris moving towards electrification as well as positioning the company in the micro mobility space. It is also a great way to protect their existing GEM market position in places like college and corporate campuses. These markets are likely to be at the forefront of these limited scope, autonomous vehicle use cases. Now Polaris, through Optimus Ride, will be able to offer their existing customers the next generation of vehicle technology. At the same time, the partnership will likely open up new commercial markets for Polaris.
Polaris’ announcement that they will be producing a new electric Ranger in collaboration with Zero Motorcycles is a strong indication that 2021 may be a turning point for the electrifying UTVs. They are the leading UTV manufacturer and already produces an electric Ranger but with traditional lead acid battery technology. There was a lithium ion battery equipped option at one time, but the model was prohibitively priced. The Ranger EV with a lithium battery pack cost approximately $10,000 higher than the lead acid version. This new Ranger EV is another step by Polaris as they increase investment towards electrifying UTVs and other powersports products.
At the end of 2019 the company created a new position, senior vice president of Electrification Strategy. Signaling the initiative’s importance, they filled it with the then president of Off Road, the company’s largest business division. In September, 2020 they announced a 10-year partnership with Zero Motorcycles as a cornerstone to their electrification strategy. Named rEV’d up, the strategy aims to offer electric vehicle options within each of its core product segments by 2025. Zero Motorcycles is one of the leading electric powertrain technology companies.
Polaris Has Extensive EV Experience
Polaris actually has quite a bit of experience in electric vehicles, but mostly outside of their powersports segments. Through the years the company has acquired GEM, Goupil, Brammo Electric Motorcycles and Taylor-Dunn, all manufacturers of electric vehicles. However, these companies are primarily active in markets that are more tangential to powersports. Polaris used the Brammo technology in the Ranger EV but not a motorcycle. Goupil produces light-duty commercial vehicles for the European market, GEM produces light-duty utility vehicles and transporters for college/corporate campuses and such, and Taylor-Dunn produces industrial utility vehicles. While these acquisitions were for commercial markets not powersports, Polaris gained a wealth of experience with electric vehicles.
Moving forward, these product lines can provide manufacturing volume and a broad product development base to further spread the cost of developing new electric powertrain technology. This could become a distinct advantage for Polaris that most of their competitors do not have. Can-Am, their leading powersports rival, is also moving into electrification, but is not active in other electric vehicle segments. Others, like Textron and Yamaha are major players in the golf car market. More interesting and potentially tougher competitors may be new entrants into the market like Texas-based Volcon Motors. This electric vehicle start-up has plans to introduce an all-terrain electric motorcycle in the Spring of 2021, a two-seat electric UTV later in 2021 and a four-seat UTV in 2022. Start-ups lack the financial resources, manufacturing expertise and distribution networks of established players but aren’t burdened by cultural legacies and management incentives tied to ICE based vehicles.
Electrifying UTVs is Challenging
Electrifying UTVs poses a unique challenge because of their size, performance requirements and usage profile. They need both power and range but still must remain reasonably priced. They need the power because, well, its powersports after all and a vehicle’s horsepower is a defining characteristic. Work oriented UTVs, especially for heavy duty work applications, need plenty of horsepower as well. Users want to make long trail rides without being stranded in the middle of nowhere, or be productive work throughout the work day.
There is limited space for a battery pack in these very compact vehicles. In addition, a large sized battery pack will make the vehicles prohibitively expensive. It’s not surprising that they are starting with the lower priced Ranger. A small but efficient motor and small battery pack could keep prices low enough while still delivering better performance than the existing ICE engine in the Ranger. The new Ranger EV could also fit in nicely on college and corporate campuses or smaller farms/ranches where the range and work requirements would be not as demanding.
High-end, off-road performance vehicles might be the next step. Already a premium market, they may be able to more readily absorb the additional expense of a large battery pack. These higher-end models could also serve to demonstrate the unique performance characteristics of an electric powertrain as well as gauge the interest of a customer base that likes the sound of ICE engines. An interesting aspect is that the performance customer is likely to wear out the rest of the vehicle before the advanced battery pack. Selling or leasing the battery pack separately from the rest of the vehicle may become an option. Approaching the UTV market from both ends may be the most likely strategy. Moving up the lower priced work-oriented UTVs and moving down from the highest priced, off-road performance UTVs, as electric powertrain technology improves and becomes more affordable.
In a new market study on the small task-oriented vehicle (STOV) market in the US and Canada, Small Vehicle Resource (SVR), LLC describes an industry in midstream transition as:
Climate policies, COVID-19 effects and new technologies usher in the urban/suburban mobility market and underpin an expanding consumer market for personal transportation vehicles (PTVs), as well as commercial markets for light duty utility vehicles;
The transition from lead acid to lithium batteries continues, raising performance and transforming vehicle longevity and recycling value.
The maturing off-road utility and recreational UTV market remains fundamentally strong and highly competitive, and is poised to follow the automobile and golf-car type vehicle markets into electrification;
The study provides a strategic analysis of the rise of urban/suburban mobility market driven in the context of the STOV industry. Steve Metzger, SVR Managing Director, states that, “The intersection of climate policy, new technologies and COVID-19 effects will lead to a ‘dispersed living lifestyle’, and provide new opportunities in the urban/suburban mobility market.” He further remarks, “The STOV industry, particularly the Big Three golf manufacturers with a foothold in gated communities, have the core competencies to transition from golf-centric to urban/suburban centric. The question is will they?”
Marc Cesare, SVR Managing Director, adds that, “While the UTV manufacturers will see solid growth in their market, some are capable of pursuing the urban/suburban mobility market as well. However, their DNA, profit centers and distribution channels are primarily off-road and powersports. Culturally, the pursuit of the urban/suburban mobility opportunity may be a difficult paradigm shift.”
The study, the tenth in the series since 2000, covers market trends from 2016 and develops projections to 2025. The key segments are golf fleet, personal transportation vehicles, light-duty utility vehicles, and off-road utility and recreation vehicles. In total, these segments are forecasted to reach close to 1,200,000 new vehicles in 2025. Electric powered vehicles continue to make inroads. Approximately a third of the market is electric powered, primarily in the form of fleet golf cars, PTVs, as well as light duty utility vehicles, of which approximately 80% will be electric by 2025. Key trends and projections for the market include:
Demand for electric powered STOV vehicles will increase to over 450,000 vehicles in 2025.
Golf course fleet demand will decline slightly during the trend period but will remain overwhelmingly electric powered, around 80%.
Demand for PTVs will be strong.
Lithium battery powered vehicles will continue to make inroads as more models become available with this option.
The study is entitled, Trends and Outlook for Small, Task-Oriented Vehicles-2016-2025- An Analysis of the Emerging Urban/Suburban Mobility Market. For additional, detailed information see the study brochure with table of contents or contact:
Garia recently announced a recall of approximately 1,000 Garia Golf and Courtesy electric vehicles. A fuse can overheat while the vehicle is charging and can cause a fire. The recall involves model year 2010 to 2019 Golf, Golf 2+2, Courtesy 4 and Courtesy 4+2 vehicles. Owners should immediately stop charging the vehicles and contact Garia or a Garia dealer to schedule a free repair. The following recall information is from the Consumer Product Safety Commission.
Garia Recall Details
Name of product: Garia Golf & Courtesy battery-powered electric vehicles
Hazard: A fuse can overheat and melt while the electric vehicle is charging, posing a fire hazard.
Recall date: May 14, 2020
Units: About 1,000
Consumer Contact: Garia collect (281) 923-0291 from 8:30 a.m. to 4 p.m. CT Monday through Friday, e-mail at firstname.lastname@example.org, or online at www.garia.com and click on “Safety Recall” for more information.
Description: This recall involves Garia model year 2010-2019 golf and courtesy battery-powered electric vehicles (BEV’s). The models involved are as follows; Golf, Golf 2+2, Courtesy 4 and Courtesy 4+2. Garia VIN numbers are printed / etched on the chassis under the front seat cushion (see illustration below). The model year of your Garia can be identified by the 10th digit in the VIN number. The chart below can be used as a quick reference. The Serial numbers and date code range are: VIN numbers UJGDHSX1XAVXXXXXX – UJGDHSX1XKVXXXXXX are located under the vehicle’s front seat. (A to K) (2010-2019)
Remedy: Consumers should immediately stop charging these recalled golf and courtesy vehicles and contact Garia or a Garia dealer to schedule a free repair. Garia is contacting all known customers by direct mail and e-mail.
Incidents/Injuries: The firm is aware of five incidents of overheating and fire damage to the vehicles. No injuries have been reported.
Sold At: Garia dealers nationwide from January 2010 through September 2019 for between $15,000 and $75,000.Manufacturer(s): Garia A/S, of Denmark
Importer(s): Garia Inc., of Houston, Texas
Manufactured In: Denmark
Recall number: 20-122
We’ve tracked recalls since early 2015 and this is the first recall from Garia. This is not surprising since they are a lower volume manufacturer focusing on building higher quality vehicles. According to their website, the fix is relatively simple so this shouldn’t be much of a problem for Garia.
Arcimoto and the Eugene Springfield Fire Department in Oregon started the first pilot program for the Rapid Responder vehicle. The Rapid Responder is a variation of the Arcimoto FUV designed specifically for first responders like fire, police and campus security departments. The three-wheeled, electric powered vehicle for emergency response offers a low carbon, small-footprint and lower cost option to traditional vehicles.
Rapid Responder Features
Arcimoto will disclose pricing and full specifications for the vehicle later this year when full production begins. As of now key specs include:
75 mph top speed
100 city mile range
Roof-mounted equipment rack
Rear cargo compartment
360-degree scene lights
This vehicle should find a nice niche in fire, police and security applications. The higher speed and range is an advantage compared to some of the first responder/security vehicles that the golf car and other low speed vehicle manufacturers offer. On the down side those four-wheel vehicles can carry a full stretcher. However, the Rapid Responder’s speed and small footprint should allow first responders to access the emergency scene faster. This can prove critical in many situations.
My colleague, Stephen Metzger, attended the 2020 PGA Show in Florida. His observations of the latest products on display “…suggests a new generation of diverse vehicles going well beyond the golf market. In general terms the emerging market that trends will play into is that of urban/suburban mobility. “ He lays out his observations and what they say about the strategies of the three major manufacturers in a new article.
PGA Show: Big Three Strategies
Club Car is looking towards connectivity and telematics technologies for new market opportunities. The company is monitoring developments in the urban/suburban mobility market. According to management, Club Car’s lithium battery powertrain and Onward PTV platform positions the company well to take advantage of new opportunities .
E-Z-GO is leaning on their latest technology advancements like their first to market (of the big three) lithium powertrain for fleet and PTVs, their IntelliBrake technology, AC drive, 72-volt powertrain and new quieter and more efficient EX1 gas engine. In addition, they continue to monitor the urban and suburban mobility markets.
Yamaha emphasized their new, fully independent suspension which is likely a precursor to a lithium powered vehicle. The absence of much heavier lead acid batteries has significant implications for the suspension setup and vehicle ride quality.
Other PGA Show Insights
Automotive features such as touchscreen LED displays and rearview cameras are continuing evidence that more automotive features are becoming standard in PTVs. The trend fits nicely with the ongoing development of the urban/suburban mobility market. A slice of this market includes low-speed vehicles and PTV like vehicles. Manufacturers also displayed scotters and golf specific, electric powered vehicles. The technology of the latter category could likely be adapted to the urban/suburban mobility markets.
New urban and micro mobility technology creates a potential challenge to the existing players in the PTV market. This technology is wide ranging from electric skateboards and electric bikes to three-wheeled and larger autonomous vehicles. While the technology is typically discussed in the context of the urban environment, it can also be well suited to the gated and vacation community markets. These alternative mobility technologies do not provide a head-on, direct competition to PTVs, but neither are they merely tangential. They can challenge the existing PTV players by taking multiple, smaller slices of the market pie. In addition, they are attracting a host of new players and new investment.
Electric Bikes & Scooters
The gated and vacation community skews older so skateboards are probably out, and at first glance electric bikes and electric scooters (Vespa like) may not seem to make sense. However, electric bikes and scooters can offer a slice of the market an alternative transportation experience. An electric pedal assist bike can provide exercise without as much exertion as a traditional bike. In addition, if you already bike, it extends your existing trip range and experiences. Scooters offer an alternative to PTVs for quick single or two-person trips. This technology can also be applied in the form of a bike or scooter share program, providing access to the whole community. A share program would seem well suited to a planned community that has a large enough population and well planned out destination points.
They are fun to ride and, in the case of bikes, can provide additional exercise opportunities. They are a less expensive alternative, especially if you need an occasional second mode of transportation and have a small footprint. Furthermore, their speed range fits well in the low speed planned community environment. They can also be used to venture outside the community with likely less restrictions than PTVs.
On the other hand these modes of transportation have some drawbacks that limits their appeal. First, they can only accommodate one or maybe two people in the case of scooters. They have limited carrying capacity for running errands. They also do not provide any protection from the elements or as much collision protection from other vehicles as a PTV does. In addition, older folks may not feel as physically capable of operating these vehicles. Although, the low speed and well planned roadways can ameliorate this issue to some degree.
Three-wheelers & Autonomous Vehicles
On the other end of the spectrum you have larger multi-passenger vehicles that provide a more direct competition to existing PTVs. Vehicles like the FUV can carry two passengers or one with cargo. As a three-wheeler, the FUV can operate at higher speeds and has no restrictions for venturing outside of communities on public roads. At the same time, this vehicle can be speed limited for golf course and planned community use. With autonomous vehicles planned community residents could displace at least some of their PTV usage, and possibly all of it if the the service is robust enough.
With the ability to travel from golf course to community roads to public roads, the three-wheeled vehicle offers greater versatility than PTVs. Capable of higher speeds, it also has greater functionality than PTVs for certain use scenarios. For autonomous vehicles, the low-speed, well-defined and relatively limited planned community road networks offer an ideal environment. For residents less inclined or capable of driving a PTV, they provide a method to maintain mobility.
The FUV is currently much more expensive than PTVs and even LSVs. Therefore, customers may not find the increased versatility and functionality worth the price. They also are limited to two passengers, and as a result are less useful for family outings. For autonomous vehicles the technology is still in the development phase. In addition, some customers may prefer the convenience, customization and the statement made by owning a PTV. Furthermore, the cost of this type of service is not currently known.
New Players, Investment & Disruptive Innovation
An additional aspect of urban and micro mobility that PTV manufacturers must contend with is the increased number of market players, capital investment and disruptive product innovations that the technology brings. For example, Harley Davidson and Jeep have revealed at least prototype electric bikes. Completely new companies like Arcimoto have entered the market. Tech companies like Alphabet (Google) and traditional auto manufacturers are developing highly sophisticated autonomous vehicle technology. In addition, you have ride share companies.
PTV manufacturers are potentially at a disadvantage because they have neither the focus of disruptive startups or the financial resources of much larger companies. On the other hand, they do possess strong knowledge of the market and a distribution network to serve the market. They also have experience in developing and manufacturing electric vehicles in a highly competitive environment.
One strategy for PTV manufacturers to take is to start developing new mobility platforms themselves. The question is whether they have enough resources and commitment. They would have to balance maintaining their current product lines while trying to introduce entirely new a category of products. Another strategy would be to leverage their distribution and marketing expertise by acquiring or partnering with new market entrants to launch to product categories. They could also decide to keep improving their existing products and manufacturing efficiency. As a result, they could maintain or lower prices while increasing the value of their products. Therefore, new entrants could find market entry to difficult or limited to niche markets. However, compared to the other two strategies, this strategy offers less upside. In addition, it still leaves them vulnerable to a disruptive technology. The first two strategies provides the opportunity to potentially expand into urban markets.
My colleague Stephen Metzger discusses Club Car’s product development strategy in a new article. In particular, he analyzes Club Car’s partnership with AEV Technologies and the resulting offering, the Club Car 411 utility vehicle. Rather than develop the vehicle in-house, which Club Car has the capabilities to do, they decided to go outside. Is management embracing a new approach to product development or is this just a one-off exercise? In addition, an interview with Brian Rott, President Cart Mart in California, discusses how the 411 fits in the market.
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 June, 2019 are summarized below.
The majority of the ordinances expand the use of golf cars, LSVs, or UTVs on city streets.
Most of the legislative activity is occurring in the Midwest
Road Use Regulation By Location
Wisconsin – Title fees for low speed vehicles will increase from $62 to $157, similar to other vehicles.
Barnegat Light, NJ – The Council, after earlier tabling an ordinance that would allow the use of golf cars on certain city streets, have decided to not pursue the issue further. A critical issue was that the vehicles would have to cross a higher speed road, which would require an exception to state law.
Brazil, IN – Residents registered nearly 100 golf carts and off-road UTVs since an ordinance passed in February, 2019.
Wakefield, IN – The City Council is considering an ordinance to allow golf cars on certain city streets. The police chief and a councilman are looking at similar ordinances and potentially expanding the ordinance to other types of vehicles.
Paola, KS – Starting in January, 2020 residents will be able to drive UTVs on city streets with posted speed limits that are 45 mph or less. Regulations require that vehicles have lights, turn signals and reflectors, drivers have a valid license and vehicles be registered.
St. Joseph, MI – The city commissioners are considering allowing residents to drive golf cars on city streets in the Harbor Shores, Edgewater and Ridgeway neighborhoods.
Newport, RI – The Newport Jitney provides free, advertiser supported rides around town on two low-speed vehicles that seat six and eight passengers.
Glynn County, GA – A new county ordinance goes into effect in October that will allow golf cars on certain streets. The ordinance has different regulations for LSVs vs. PTVs. A key difference is that LSVs can travel on streets with posted speed limits of 35 mph or less while PTVs can travel only on 25 mph or less streets.
Perry Village, OH – The Village Council passed an ordinance to allow LSVs, golf cars, UTVs and mini-trucks to be driven on local low speed streets. The vehicles must be inspected, licensed and have certain safety equipment.