Last Updated Nov 30, 2010 2:36 PM EST
If EVs are going to make a dent in the all-powerful reign of the internal-combustion engine, it will have to be with large orders like this, and (with GE in the lead) major commitments to switch company fleets to green cars. It's especially important for cash-strapped American companies to get export orders, and this is a big one.
The two parties shaking hands this time are AMP Electric Vehicles (which needs customers) and Reykjavik's Northern Lights Energy, which have signed a letter of intent for the 1,000 electric SUVs to be delivered over five years. At least initially, the conversions will be based on the Equinox. but many other SUVs might end up as donor cars.
Iceland isn't the world's biggest car market: It has only 200,000 cars on the road (and a population of 300,000) so the conversions will give the country "the best EV-to-conventional ratio of any country on the planet," said Steve Burns, AMP's CEO.
Although AMP has its own conversion facility that produced 10 EVs in November, it's quite likely that at least some of the cars will be assembled in Iceland itself, using bare "gliders" without drivetrains shipped from the U.S. Iceland doesn't have any existing carmakers, but it does have a company, Sigurjon Magnusson in Olafsfjordur, that does conversions of conventional vehicles for use as ambulances, police cars and other specialty purposes.
Burns said the first converted Equinox would be delivered to Iceland in January. "Iceland is perfect for EVs," he told me. "Electricity [from a combination of hydro power and the abundant geothermal resources] is practically free, the climate is perfect because it doesn't get too hot or cold, and imported gasoline is really expensive." He described Iceland as "AMPed up" about SUVs.
If there's any hurdle to overcome here, it's in the still-lingering effects of Iceland's financial meltdown, which caused new car sales to plunge 90 percent practically overnight. Some dealerships are now government run, mirroring the U.S. takeover of GM and Chrysler on a smaller scale.
Despite that very expensive fuel, SUVs are really popular in Iceland, making up 35 percent of the new car market, according to Gisli Gislason, CEO of NLE, who first drove the AMP at the Los Angeles Auto Show. "Before the 2008 crash, we were importing more Range Rovers than Sweden," he said.
According to Gislason, 50 Icelandic companies and government offices (including the federal ministry of the environment) have signed up through NLE's Even [electric vehicle/environment] subsidiary to both host EV charging and convert their fleets to EV. He said that NLE would ramp up after the New Year to try and sign up a total of 100 such companies.
It would obviously be helpful to the conversion plans if Iceland enacts a pending bill that would remove value-added tax on imported cars. Gislason is himself the owner of the first Tesla Roadster in Europe, and registering it after the proposed law is enacted will save him a 25 percent financial penalty. But the Icelandic government has been very supportive of EVs, especially President Ã"lafur Ragnar GrÃmsson.
Also helpful would be a consistent source of gliders. AMP has talked to General Motors about that, but there's no final decision on it yet. But GM is supportive of electrifying Iceland. Britta Gross, director of global energy systems and infrastructure commercialization at GM, told me, "Iceland has been very active in green cars for quite some time, especially in the fuel-cell area, and moving into battery EVs is consistent with overall electrification."
Gislason has been scouring the world for available EVs. He also ordered 1,000 Tesla Model S cars for delivery after the car debuts in early 2012, and is talking to Wheego, the Atlanta-based company that is building the LiFe, a Smart-sized two-seat EV.
Meanwhile, AMP is on a roll. In mid-November, it announced a deal with Detroit-area utility DTE Energy to convert a trio of the company's fleet Saturn Vues to electric. The first conversion will be delivered in December. Next stop, Iceland.
Full disclosure: I have some personal involvement in this story. Because there was obvious synergy between AMP and NLE, I suggested that they talk to each other. Simply because I was intrigued by what might happen (financial incentives didn't enter into it), I put the two together, and the result is the 1,000-EV order that the two parties announced Monday. For the record and in the interest of full disclosure, I helped arrange the meeting but was not paid any finder's fee or consulting money by either company.
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