Rick's Red-hot Tango - Part 2
By Bill Moore
"I want to be the Henry Ford of the 21st century," Rick Woodbury told me as we talked about his plans to bring down the cost of his uniquely narrow, but high-performance electric commuter car. Like Ford, Woodbury has to find a way to make the car affordable for the common man, because with a price tag of $85,0000, there aren't a many who will be able to afford it, a problem Woodbury is acutely aware of.
"The next step is to build a stripped down version," he said. But by that, he doesn't mean just substituting the high-end goodies found in the prototype car, including top-of-the-line Sparco seats, leather dash, and 300 watt Nakamichi stereo system. He said that taking out those elements would only reduce the car to $60,000 a copy, still well out of the price range of the average buyer, while making it undesirable to upscale clientele.
Instead, he explained that he needs to find less expensive sources for the components that make up the car, itself. For example, the Tango's steering column costs $1,500 because it is OEM-grade. He projects a target price of $42,000 for the stripped down model that would include fewer amenities, but would include air conditioning. Woodbury also said he is talking to manufacturers in Taiwan about building a kit car version that would bring the cost down to the $20,000 price-range.
"I am not in love with having cars priced so high that nobody can afford one. My goal is to be the Henry Food of this century."
That might sound a bit presumptuous, but Woodbury believes there's a worldwide market for these cars totaling 150 million vehicles. He bases this number on the fact that over 92 million Americans commute to work alone every day. He thinks 50 million of them could easily adopt to the Tango for their daily commuting regime.
He foresees a time when UNVs (Ultra Narrow Vehicle) like the Tango become the norm and special lanes, like HOV lanes, are created for them. He thinks people will begin to rethink the utility of their current vehicles when UNVs go racing by at 70 mph while their conventional motor vehicles are stuck in bumper-to-bumper traffic plodding along at 5-10 mph.
Interestingly, I rode Chicago's light rail service from downtown out to Midway airport this week while attending the Global Windpower 2004 conference and exhibition, and just as Woodbury noted, we rolled along at steady, gentle 35-40 mph while the traffic on the adjoining freeway was barely moving during rush hour. It was an satisfying experience.
Woodbury isn't just indulging in wishful thinking when it comes to creating a regulatory framework for UNVs, one that accords the such special privileges. He's actually working with both regulators in the nation's capitol and with the Washington State legislature. He explained that after giving a special presentation to the legislature, it approved passage -- almost unanimously -- of legislation according UNVs the right to lane share, among other privileges.
He said it was exciting to see how quickly policymakers have gotten behind the UNV concept, but he added that the real challenge at the moment is getting the money to build the cars. Woodbury estimates that between the more than $50,000 he and his son, Bryan, have invested, and the more than $400,000 put into the project by investors, the company has spent over half a million dollars building and refining the vehicle, a relatively pawltry sum a major OEM will blow in a heartbeat on television ads and sponsorships.
Returning briefly to the question posed in Part One, Woodbury said that of those he surveyed during the January 2004 Los Angeles auto show, 8% said they'd be willing to buy the car if it were priced at $85,000. Cutting the price in half to $42,000 only added another 8%. Reducing the price and quality to $18,700 broadened the appear somewhat to 41%, while a bare bones, Chevy Cavalier-quality version priced at $10,000 would attract another 37% of potential buyer. Adding air conditioning would raise the price to $12,000. Only about six percent said they wouldn't consider the car at any price.
GM Teases While Lotus Delivers
For an all-too-brief period of time after the initial unveiling, General Motors had expressed interest in supporting the development and FMVSS certification of the Tango, offering at one point to underwrite Woodbury's efforts to the tune of at least $5 million. CommuterCars had shown the car to GM's Advanced Technology Vehicle center; the folks who had developed the ground-breaking EV1 for a reported $1 billion dollars. Here was a similar two-seat car with nearly as many bells and whistles, as well as comparable performance, that had been developed with a fraction of the cost.
Besidesoffering to help fund certification, the world's largest automaker, also talked about letting CommuterCar buy parts from its suppliers at cost. Woodbury noted that this alone would mean significant savings. "If you had to buy the parts of a Geo Metro across the counter, the car would cost you $100,000."
However,as soon as the California Air Resources Board caved in to carmaker lawsuits and pressure to build a few dozen fuel cell cars, instead of tens of thousands of battery electric cars to comply with the state's ZEV mandate, GM dropped Woodbury's project like a hot potato.
In a letter from GM's head of research, Dr. Larry Burns, the company expressed its admiration for the Tango, but added, "although your vehicle is of interest, we do not intend to enter into any financially supportive role with your company. We fully understand your interest in wishing to pursue cost reductions and access to GM purchasing rates, sales and service by seeking access to our dealers. However, it is not in GM's best interest to pursue this."
Woodbury added that it was GM's idea in the first place. But he's philosophical about it, telling EV World, "we're going to have more fun this way, anyway."
While GM teased and then backed off, other respected automotive engineering firms lent their expertise to developing the Tango, including the highly-respected suspension specialist, Herb Adams. Woodbury said that he used Adam's book to design the suspension on the first Tango prototype. And then when it cam time to design the production prototype, the Spokane entrepreneur called Adams up and hired him to work on the car. He did the same with Lotus Engineering and Special Projects, both highly respected automotive engineering firms. He said, that these companies usually won't give you the time of day, but if they like a project, they'll get involved.
According to Woodbury, the average bill for a Lotus or Special Projects job is more than $2.5 million dollars. "They did a phenomenal amount of work for us for $60,000, which is all we had for the job."
"They said they went over budget by a hundred percent and they still did what they said they were going to do to get that car to have a fit and finish like a Ferrari, and get it ready for the LA Auto Show."
He added that Burt Transmissions build the gear boxes for the drive system at their own expense, because they believe in the concept so much. He promised that they will be compensated well when the time comes.
So Close, We Can Taste It
The LA Auto Show generated a lot of interest in the car and an initial surge of orders, but Woodbury now finds himself at the frustrating point of needing a little more cash -- about $100,000, he estimates -- to finish up a few more details on the car, so he can start production.
He needs about $10,000 to pay an aircraft parts manufacturer to fabricate a mold on which they will build the carbon fiber body. The company is willing to amortize this over 10 bodies, so Woodbury says he needs only $7,500 up front. Then he wants to pay Lotus another $30,00 to fine tune the suspicion a bit more and design a pull-out battery box for the car. A company in Minnesota needs money to build the jig for the car's frame, which they can turn out at $2,700 a piece for one or two cars at a time, or for as little as $700 in lots of 100.
"We are so close, we can taste it," he commented. He's also looking at setting up a neutral escrow account where buyers will put up $10,000 each to pre-order the car. Woodbury would then use that to convince either a bank, investors or the parts suppliers themselves to give him the parts and then get paid when he gets paid.
"We're going to make it happen one way or the other," he promised.
World Changing Idea
For Woodbury, bringing to fruition a potentially world-changing idea is the most satisfying aspect of the Tango project.
"Everything points to the fact that this car is desperately needed and it's extremely fulfilling to know that I had something to do with that and to help make it a better place," he told me.
But seeing his vision through to its conclusion is also proving frustratingly long. He explained that he finds himself in a Catch 22 situation where he needs investors to help him over the last few hurdles, but he can't actively solicit them without a registered offering. To do so would put him in violation of SEC regulations.
Instead he has to hope that investors find him. "It's very tricky. Only certain kinds of people can come to us. They have to do it. They have to sign off as accredited investors; and then we have a lot of legal stuff that has to be done. It's a pain in the butt, but it's okay. It protects investors."
Despite the slow pace of development, Woodbury is determined to see the project through to the end. He said he and his family have a made a pack to not go into debt, because no one knows what the future will bring. Fortunately, he has another successful business that, as he characterized it, pretty much runs itself, allowing him the freedom to devote more of his time to the Tango than might otherwise be prudent.
One thing is clear about the future, at some point, a vehicle like the Tango will reach the marketplace. It is inevitable, especially in the major urban areas where building more and wider roads is simply no longer an option. And as oil becomes increasingly expensive, electric-drive -- either battery, hybrid or fuel cell -- will be a necessity; and when that happens we'll begin to solve the problem of local air pollution and all its attendant consequences to the environment and public health.
That's a dream worth pursuing.