Retrofitting: Remarketing Trash

Welcome to my Sustainable Transportation series!

In my first post, I defended the deployment of electric vehicles for fleet businesses as an economically and technically sound sustainable transportation solution. I also suggested that the conversion/retrofitting of aging vehicles to electric might prove successful among less affluent/more cost-conscious consumers, which provide less stringent mobility requirements than the average automotive consumer.

This idea of electric retrofitting is also promoted by tech investment expert Esther Dyson in her May 2009 Project Syndicate article.

Let us examine its merits:

(1) why retrofitting provides such an important life-line for aging vehicles

(2) who would be crazy enough to want another man’s garbage

(3) the cost of retrofitting

(4) how to promote greater rates of retrofitting.

Retrofitting: Squeezing out all the juice

The life expectancy of a conventional gasoline car is about 10 years. Why?

It’s simple really. Imagine a pint glass (i.e. an engine’s cylinder) filled a gasoline and air mixture. Take a mallet (i.e. a piston) just wide enough to slide into the glass and squeeze down to the bottom.

BOOM! The gasoline and air combust, forcing the mallet back out of the cylinder.

Now do this with six pint glasses, and turn several thousand times per minute! Each ‘BOOM!’ thrusts thousands of metal components in varying directions. As these components rub up against each other with astonishing force, they slowly eat away at each other. Eventually the cost and burden of repairs and maintenance exceed the price of buying a brand new car.

But with each ‘written off’ engine, we also throw away perfectly good seats, air conditioning systems, radios, etc… What is more, 25% of a vehicle’s lifetime carbon emissions result from its production – around 15-20 tonnes of carbon dioxide (CO2) per vehicle.

Seems like a huge waste, no? Indeed, it is. The solution is simple and ever present in our daily lives… reuse/recycle.

Don’t we reuse/recycle consumer goods such as bottles, bags, paper and so forth? The solution is to retrofit ‘written off’ vehicles. Here is what that means:

  • Rip out the engine and other gasoline related components — send those to a smelting facility so that the metals can be reused for future applications
  • Install an electric motor, a battery and some electronic control systems
  • Drive away with a ‘brand new’ car

 


Who would want a clunker?

 

Since used vehicles are typically the ‘victims’ in retrofitting or conversion, they are unlikely to meet the luxurious desires of conventional consumer groups — particularly in industrialized nations. Thus the question: who would want a clunker?

Answer: emerging market consumers and fleet operators (oh, and me!)

850 million – that is the number of vehicles currently chugging along the streets of Planet Earth. With global vehicle sales volume around 70 million, that number is growing fast, particularly in emerging markets such as China, India and Brazil.

Indeed, much of this demand is a result of rapid income growth in the lower echelons of society, which are only now discovering the luxuries of personal mobility. Notice how these consumers are not dissimilar in expectations to European and American consumers in the early 1900s. After all, four wheels and a solid platform to sit on is a luxury which they have yet to experience.

However, the booming emerging markets are ridden with old cars that are ready to be sent to the cemetery — or to be retrofitted. In Brazil, for instance, 40% of the vehicle fleet is older than 10 years and 5% is older than 21 years. If we assume these figures to be indicative of the retrofit potential in Brazil, we are looking at over 12 million vehicles. Even at a low penetration rate of 1%, Brazil alone would generate demand for 105,000 vehicle conversions annually.

{picture of Model T next to a picture of a Corolla} Subtitle: A 1990s sedan with no radio, manual windows and a faulty air conditioner would have been a dream come true to our great grandparents…

The second market segment which could be drawn to retrofitting is the fleet business. These vehicles do not come overflowing with the latest gadgets and luxuries, in fact, fleet operators are unlikely to care about vehicle age as long as the car is safe, reliable and cheap. What’s more, vehicle fleets are typically very homogeneous, which would ensure critical economies of scale during preliminary conversion projects where engineering design work would be needed.

The Real Cost of Recycling Cars

Indeed, vehicle retrofitting is, arguably, a cheap way to acquire a ‘new’ vehicle. The key to making this work lies, of course, in the use of cheap or written-off cars. If this condition is not met, then the economics of the conversion begins to look questionable. However, if a suitable vehicle is identified, then the consumer will enjoy a brand new vehicle — minus, of course, the heated seats and surround sound speakers — at a fraction of the price.

But how cheap is it really? Aren’t batteries and electric motors custom-built for each unique vehicle design? And wouldn’t governments need to certify the design and build of each retrofit solution for each type of vehicle? 

Not quite.

Vehicle modification on a commercial scale is already common practice in some countries (see links below). In the mid-1990s, low natural gas prices inspired Brazilian taxi drivers to install unauthorized natural gas equipment in their vehicles. Government and industry promptly responded, establishing equipment standards and safety norms for natural gas equipment, such that installing the equipment is now, not only legal, but as easy as installing a car radio — if not more so.

For sure, electrification of a vehicle requires a more fundamental redesign of the vehicle’s drivetrain. Nevertheless, assuming standards and safety norms are established to avoid mishaps, retrofitting is nothing a good mechanic couldn’t handle.

Consequently, retrofitting costs become a simple summation of electric component costs — i.e. electric motor, battery and electronic control devices — and labour costs. As expected, battery costs will dominate this equation. Keeping things simple, we consider two scenarios:

Cheap consumer vehicles in emerging markets might opt to use less expensive but lower-end, nickle-based batteries. These might go for $500/kWh which corresponds to some $75 per kilometre range capacity for a compact sedan. That equates to $7,500 for a 100 km range vehicle, $15,000 for 200 km range, etc.

In contrast, fleet vehicles might opt to use more expensive but reliable lithium-based batteries. These might go for as high as $1000/kWh, which converts to around the $150 per kilometre range capacity for a compact sedan. That equates to $7,500 for a 50 km range vehicle, $15,000 for 100 km range, etc.

Keeping with pessimistic estimates, we can assume other equipment costs, plus labor, comes out to some $10,000. So depending on the consumer requirements, electric conversion provides a new car for under $20,000. This is pretty reasonable when you consider that it’ll save the average consumer about $1,000 (or much more outside the US) on annual fuel expenses.

Next Steps:

  • Petition the federal government to work with automotive industry associations to establish retrofit equipment standards and safety norms
  • Petition the federal government to amend cash-for-clunkers scheme so that small clunkers are retrofitted and remarketed rather than sent to the landfill
  • Petition your local government to provide technical training and financial support to retrofit businesses

 

Curious to find out more? Have a question? Send me an e-mail or post your question below.

Do you have an idea of how to promote fleet electrification? Know of other businesses with active electric fleets? Post your thoughts!

 

photo credit: thanks to Leonard G. via wikimedia commons

72 comments

LMj Sunshine
James Merit4 years ago

Good article.

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LMj Sunshine
James Merit4 years ago

Good article.

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LMj Sunshine
James Merit4 years ago

Good article.

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LMj Sunshine
James Merit4 years ago

Good article.

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LMj Sunshine
James Merit4 years ago

Good article.

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Deborah W.
Deborah w7 years ago

this is a fantastic idea! I would buy a retrofitted car for sure. I hope this idea gets to governments.

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Dave C.
David C8 years ago

I like the ideas.

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Stephanie Cornell
Stephanie C8 years ago

This is great in theory but it wouldn't work practically. There are very few people that are going to put $7,500 to $15,000 into a used car. The author is assuming that everything else in the used car is in top condition but that is rarely the case. The interior of used vehicles is usually fair to poor condition and most used vehicles have other mechanical issues as well. Air conditioning units alone usually require servicing in used vehicles (if they work at all), most are running around on barely drivable tires, the electrical system would most likely have to be serviced, the carpeting rarely looks good, the paint is usually faded, has scratches or chips, and there are a lot of other parts that would need serviced to renew an old vehicle. It would be great if it were just as simple as the author indicates but, as someone that just put a lot of money into a used vehicle, I know from experience that used vehicles can require a lot of work and money. That doesn't mean we shouldn't try to come up with ways to end our dependance upon oil based fuels, I just don''t think this idea is a marketable one since it would cost a lot of money and you'd still end up with an old vehicle.

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Juan Pablo de la Torre

You convinced me, I'm retrofitting some junk. When I get the money.

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Hugh Collins
Hubert Collins8 years ago

and do not worry about the cars running silent when the guys put there loud systems in the cars every one will be begging for them to run (SILENT) trust me!

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