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Will Lithium Batteries Disrupt The Fleet Golf Car Market?

Published: 3/12/2015 Author: Marc Cesare, Managing Director, SVR Category: Market Insights
Jon Hoster, the CEO and Founder of LiV Golf Cars, believes they can and that he has the lithium powered golf cars for the job. Founded in 2012, the Montana based LiV Golf Cars is offering two models for fleet customers, the Prosper and higher end Evolve. Both vehicles feature the company’s lithium iron phosphate power system, which is at the heart of any potential market disruption. As Hoster points out, while the lithium iron phosphate battery pack is critical to the vehicle’s performance advantage, the integration of the battery, controller and system management software is the real key. Hoster claims the battery pack can last twice as long as the typical lead acid battery packs used in today’s fleet golf cars. He backs that up with a six-year warranty on his battery packs.
How long the battery pack can last is what is so disruptive. A golf course will usually turnover their fleet when the battery pack needs to be replaced, usually 3-4 years depending on use. Why spend $600-$1,000 per vehicle for a new battery pack when you can lease a whole new set of vehicles for not much more than your current payments? If a lithium powered golf car can last twice as long then you may not need to replace your fleet for 6 to 8 years. Essentially a lithium-powered drive train could, over time, cut in half the demand for electric fleet golf cars.
Hoster states that there are other advantages too, not just the battery pack life. For one, there is no more battery maintenance required, such as watering. A fleet manager or individual would also not have to worry about hydrogen gas venting from the batteries, battery corrosion damage to vehicle bodies, chassis or damage to floors from battery leakage. The battery pack is also several hundred pounds lighter than a typical lead acid battery pack which means less compaction of the turf and wear and tear on vehicle steering and suspension components. Hoster also points out that he has a very green technology with the ability dispose his batteries in any landfill in the country including California, although he would prefer to recycle the valuable lithium. The bottom line he states, “We take the golf course out of the battery business.”
More importantly for fleet managers Hoster claims that a LiV Golf Car “…in a lot of cases we are very closely priced to lead… and will be more profitable for a course in the first month.” Besides lower maintenance costs, the LiV golf cars powered by lithium iron phosphate batteries will reduce charging costs by 28% and possible more depending on a courses charging schedule. With a shorter charging time, he adds, “You can charge up cars for 45 holes in less than 6 hours. This allows a course to charge overnight during off-hour peak usage and when more discounts may be available.” The shorter charging time also allows a faster turnover for the fleet golf car, so if the fleet operates from early morning to the early evening, there is still time to fully charge the vehicle for the next day’s rounds. Another difference between the LiV golf cars and other fleet golf cars is that the battery pack is customizable. According to Hoster they can design a battery pack specifically for how the golf car will be used. Is it going to be used on a shorter course for fewer rounds or a longer course and more rounds? LiV Golf Car has built battery packs that range from 60 lbs to 115 lbs depending on needs. The company has built ranger golf cars that patrol the courses all day with the larger size battery packs so they can run all day instead of the typical approach of using two or three golf cars that would otherwise be used for rentals.
While Hoster did not reveal pricing, the LiV Golf Cars are available for purchase or lease depending on the needs of the golf course. Leases are available from one to seven years but he expects most to be in the three to seven year time frame. His initial target area is the Southwest US. Besides the fleet golf cars LiV expects to rollout a flatbed utility vehicle and multi-passenger people movers in 2015. Local dealers will serve the commercial/industrial as well as private consumer markets.
The two models LiV Golf Cars is offering are the Prosper and the Evolve. The Prosper is marketed as …”The economical solution for the rugged, high-traffic golf course.” While the Evolve is …”The elegant alternative for a golf course aiming to add prestige to their golf course.” The Evolve has an aluminum chassis as opposed to steel, a more stylish design and Macpherson style front suspension instead of hydraulic shock absorbers with coil over spring. Both golf cars feature a K2/Elite Lithium Iron Phosphate battery pack, electric motor from D&D Motor Systems, Alltrax 48V EXT with integrated BMS technology controller, dual automotive-style strut, self-adjusting rack-and-pinion steering, impact resistant body molding and dual rear mechanical drum brakes. Hoster notes that most of the drive train is American made and they plan to move more manufacturing to the US over time. The chassis are sourced from multiple locations overseas.
Challenges lay ahead for LiV Golf Cars. The fleet market is dominated by Club Car and E-Z-GO with Yamaha a significant player as well. These companies all have established brands, widespread distribution, long-term, relationships in the market, production volume to keep costs down and financial resources. If LiV Golf Cars is successful in introducing this type of golf car into the market, the company may attract competitive offerings from those same three companies and possibly others.
Club Car and E-Z-GO, while they may seem the most likely to provide a competitive offering, have a dilemma. Their business model is predicated on turning over fleet cars every few years. They make some profit on the initial sale or lease but generate the same if not more profit by selling the used golf cars, either as is or refurbished by them, to golf car dealers around the country. For them to pursue a golf car that would potentially cut their demand for new cars and supply of used vehicles in half would involve a significant strategic shift in how they do business. Yamaha, on the other hand, has considerably less market share at stake. They may see a disruptive lithium powered vehicle as an opportunity to gain market share. An innovative electric vehicle could also be a nice complement to their electronic fuel injected gas powered vehicles.
A less obvious potential competitor might be a company such as Polaris. They have entered the small vehicle market in recent years with the acquisitions of GEM in the US and Aixam and Groupil in France. They also invested in electric motorcycle manufacturer Brammo to gain access to their lithium-based electric powertrain technology. Polaris considers golf cars as a portion of the small vehicle market, but has pursued other market segments where they see larger growth opportunities. The golf car fleet market has been stagnant, as the golf course population has declined for a number of years. However, a disruptive technology might offer Polaris an appealing new growth opportunity and a second look at the market. Distribution could prove a challenge but Polaris has recently been making a strong push into the commercial/institutional markets in the US and this market could be a complementary fit. The company certainly has the financial resources, as well as a track record of innovation and aggressive product development and the existing GEM brand name to put on any vehicle offering for this market.
In any event, 2015 will prove to be an important year for Jon Hoster and LiV Golf Cars, and potentially for the fleet golf car market as well.
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