SemaConnect trying to fill a niche in the electric-car era
Monday, March 15, 2010
Annapolis-based entrepreneur Mahi Reddy is hoping to take advantage of what he perceives will be a big missing piece in the approaching era of the electric car.
Sure, homeowners can run a cord from an outlet to the environmentally friendly vehicle, but what if you don't have a garage? What if you live in an apartment and the landlord is not willing to pay larger electricity bills, as residents start clamoring for parking spaces near the power outlet?
That's where Reddy's new company, SemaConnect, comes in, with a meter designed to measure the amount of juice cars take to power up. Reddy's firm is hoping that landlords and office building owners will turn to the product as electric cars such as the Nissan Leaf or Chevy Volt come on the market and property owners try to figure out how people will pay for the extra power consumption. The firm last week installed one of its first devices at the Loews Annapolis Hotel, where it will help service a fleet of electric cars manufactured by a subsidiary of Chrysler, resembling golf carts, that shuttle people between parking spaces and local restaurants.
Although a disproportionate number of "green" entrepreneurs are on the West Coast, the Washington area might have an immediate need for the product that SemaConnect is offering. That's because General Motors has announced that the region, along with Michigan and California, will be one of the initial markets for its electric car. The Volt is scheduled for a November introduction.
"The notion that your landlord would install a socket so that you could get free juice is a fantasy," said Reddy, "This is not like charging a cellphone."
Users of the SemaConnect service will get a key fob that identifies their vehicle and authorizes access to a power outlet controlled by one of the firm's devices; a wave of the device in front of a gray box logs a user on and keeps track of power usage. SemaConnect sends the owner a bill.
Reddy isn't the only entrepreneur trying to come up with an infrastructure to support the widespread use of electric cars. A California company, Coulumb Technologies, is building a network of charging stations. Another California firm, Better Place, proposes "battery-switching stations," where drivers could pull in and switch their car's depleted battery for a fully charged one.
John O'Dell, editor of Edmunds Green Car Advisor, a blog about environmental automotive trends and technologies, said there is much opportunity for this kind of business. "We set up this country to work on gasoline and we're just starting to figure out how to accommodate alternative fuels," he said.
There are still a number of uncertainties for SemaConnect's business model. The electric car faces the same hurdles as other new technology: price and consumer anxieties. At this year's Washington Auto Show, for example, many attendees in the market for a new vehicle said they weren't willing to pay a premium for an electric car. Others expressed concerns about getting stuck in an area with no access to a recharge.
The eight-person SemaConnect team has been funded entirely out of Reddy's pocket; he sought outside funding last year, but the collapsing economy and auto industry kept investors far away, he said. Also, it was uncertain whether the new administration would support an infrastructure for electric cars.
Now, the landscape appears to be shifting. Last Monday, Maryland launched a new program offering $1 million in grants to state and local governments and private entities that invest in electric-vehicle recharging devices.
Reddy said he has enough resources to carry the SemaConnect product to a wider launch, thanks to money from a 2008 buyout of a health-care information technology company, CBaySystems, he co-founded.
SemaConnect's new Annapolis customer, Russell Rankin, said that before the installation, he had to make an educated guess about how much energy his fleet of 10 electric cars required. Rankin's service, based out of the hotel, is paid for by the restaurants that advertise on the vehicles.
Rankin will likely need another SemaConnect device this year to better attend to the crowds at Naval Academy games. And now that he's able to measure, and accurately pay for, the power his fleet consumes, Rankin hopes to more easily take his free shuttle service to other towns and hotels.
James LoBosco, the hotel manager, said that the service has replaced gas-guzzling vans and that he intends to introduce it to other managers in the hotel's chain. The notion of having a driver sitting around with the engine running at all times, he said, seems "absolutely archaic."