Startups invest millions in scooter market

When it comes to electric vehicles, the Tesla Roadster and Chevrolet Volt get all the love. But there are other EVs rolling around, and they're balancing on two wheels.

Since 2007, when Vectrix of Middletown, R.I., first rode onto the scene with its battery-powered Maxi Scooter, a growing number of U.S. startups have entered the plug-in two-wheeler market. They've invested millions of dollars in vehicles, many of which are poised for production within a year.

Led by pioneers with impressive résumés, these companies predict growth despite the down economy, and they're laying claim to niche markets with such boasts as "first" and "fastest" as they stake out territory in what many believe is the future of transportation.

"It's amazing how inefficient the vehicles we're driving today really are," said Forrest North, founder and chief executive of Mission Motorsports, a San Francisco company that unveiled the prototype for its 150 mph, 150-mile-range electric motorcycle at the Technology, Entertainment, Design conference in Long Beach, Calif., last month.

"Electricity is just so many orders of magnitude more efficient that it's the only way to go," said North, a former mechanical designer with Tesla and leader of Stanford University's solar-car team in the mid-1990s.

Like many EV entrepreneurs, North, 33, had looked into hydrogen and biodiesel as power sources but found them impractical. Hydrogen is abundant, but turning it into fuel and developing a distribution infrastructure is costly. Biodiesel can take more energy to produce than it generates.

With electricity, the infrastructure already exists: Electrical outlets are abundant. Battery technology is also improving by about 8 percent each year, North said, allowing bikes to easily upgrade once the chemistry comes along. Already, electric two-wheelers get the equivalent of about 300 to 500 miles per gallon. As technologies improve, they'll be able to generate even more energy with less weight and cost.

Debut product

Billed as "the world's fastest production electric sport bike," Mission's debut product is called the Mission One. Scheduled to ship in early 2010, its estimated retail price is $68,000 — most of which is attributable to a large lithium-ion battery pack designed to compete with a gas-powered, performance-oriented sport bike.

It's the power-to-weight ratio of existing batteries that is, in part, driving development of electric two-wheelers.

Weighing less than 25 percent of a typical passenger car, two-wheeled scooters and motorcycles require fewer expensive batteries to bring them to speed. They are also simpler; they require fewer components and safety features; and they aren't subject to the stringent governmental requirements for passenger cars.

That makes two wheels a less-complicated and less-expensive entry point than cars for entrepreneurs, which is why electric two-wheelers also are coming on the market faster and more affordably than their four-wheeled brethren. The majority of available electric two-wheelers cost less than $10,000.

Vectrix was the first company to manufacture a production electric two-wheeler. Since introducing its $11,000, 62 mph Maxi Scooter in August 2007, it has unveiled a second model and sold more than 1,500 vehicles globally. While that isn't a lot compared with the millions of cars sold every year, it represents a 300 percent increase in annual sales from 2007 to 2008.

"Any time you bring a new technology to market, when you can horizontally grow that product, it validates to the consumer that it's a real technology," Vectrix Chief Executive Mike Boyle said. This spring, Vectrix will roll out a third scooter model, the $5,195, 30 mph VX-2.

Spring is also the launch date for two other electric two-wheelers — Zero Motorcycles' Zero S and Brammo Motorsports' Enertia. Like Vectrix, The S and Enertia are oriented toward the commuter market. Unlike Vectrix, they are motorcycles.

"The market is definitely getting excited for an electric motorcycle," said Neal Saiki, 42, founder of Zero Motorcycles in Santa Cruz, Calif. "It's going to grow really rapidly as people realize how practical and fun and fast these motorcycles are. They can be environmental and have fun."

Ex-NASA engineer

Zero was the second manufacturer, after Vectrix, to make a production electric two-wheeler.

Founded by Saiki, a former NASA engineer, and funded, in part, by former Sun Microsystems executive Gene Banman, who now is Zero's chief executive, Zero has sold 200 of its $7,500 Zero X models — an off-road electric motorcycle with a 50 mph maximum speed and 40-mile range off a single charge.

Craig Bramscher, of Brammo Motorsports in Ashland, Ore., says he raised $10 million in venture capital last year.

And when his 300 Enertia electric motorcycle rolls off the line in May, he's thinking his company will be aided by the $787 billion stimulus package.

The program includes a 10 percent tax credit on the purchase price of two- and three-wheeled electric vehicles with batteries generating at least 2.5 kilowatt hours of power.

"It seems like the right place, right time," said Bramscher, former owner of a software-technology firm. "A lot of people haven't forgotten we've got an oil problem."