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Exploring Electric Vehicles with PSE&G
Kevin Chan, Keith Gladstone, Ian Naccarella, and William Yen

Kevin Chan Ian Naccarella

kchan13@newarka.edu inaccarella13@lawrenceville.org

Keith Gladstone William Yen

gladstone.keith062@gmail.com yenw24@gmail.com

NJ Governor’s School for Engineering and Technology
Abstract improving the market penetration of electric
As electric cars become more vehicles.
prevalent in society, energy providers are
becoming increasingly interested in the Introduction and Background
associated load increases and the potential In today’s age of electronics,
infrastructure issues that could arise from consumers require ever increasing amounts
widespread adoption. While energy of power to operate all of their appliances
providers are able to meet the current and devices. Correspondingly, electric
demand of electric vehicles in the United companies have to cope with high
States, extensive adoption could introduce fluctuations in demand for electricity at
infrastructure concerns. For this reason, the different points of the day. The strain on the
maintenance and awareness of load grid, however, will only get worse with the
increases are being closely monitored by mass adoption of electric vehicles.
utilities. Marketing for electric cars has also Electric cars will have a significant
proven to be ineffective at convincing presence in the future car market as gasoline
customers to switch from their traditionally becomes more expensive and society seeks
powered cars to electric vehicles. We more environmentally friendly cars. This
propose creating an electric car sharing will only happen, however, if a reliable
company called Solar Wheels that will infrastructure is created which will support
address both of these problems. This the myriad of electric vehicles charging
company will have its own solar array to simultaneously. In 2010, the average power
provide for all of the electricity needs of its consumption of a single residential utility
vehicles and will collect usage data from customer was 958 kilowatts (kW) in one
members and distribute that information to month[11]. To charge a 2013 Chevrolet Volt
electric power providers. This will help them from empty to full charge requires 12 to 13
prepare for the mass adoption of electric kilowatt hours (kWh) of energy[14]. So,
vehicles and will help them coordinate the adding the charging of an electric vehicle
charging of these vehicles with the entrance such as the Volt increases the average daily
of renewable energy sources onto the grid. power consumption of a single house by
The experience of driving an electric car will over 50%. Electric providers are concerned
also convince more people to consider that the grid may develop problems when
buying an electric car for their next car, electric vehicles become more popular.

1
Electrical suppliers like PSE&G will will reflect normal behavior for owners of
need to know how people will use their electric vehicles and PHEVs, so we will
electric vehicles, when they will charge distribute their usage information to power
them, and when they will drive them in companies to act upon.
order to prepare their infrastructure to “Taxi” users will rent cars
support increased demand. Our proposition infrequently and without much notification.
is to create a car sharing business called We hope that our business will help acquaint
Solar Wheels that will serve as a research these users with electric cars so that they
platform for the investigation of charging may more seriously consider buying an
and usage patterns in electric cars. Car electric car. Our company will enhance the
sharing businesses provide members with marketing programs of car manufacturers
short term car rentals, often only a few hours that are developing EVs or PHEVs,
long, with an emphasis on high accessibility improving the market penetration of electric
to the vehicles. The members have the vehicles.
benefit of being able to enjoy the luxuries of
car ownership, like convenience, with none Market Analysis/Business Strategy
of the headaches, like maintenance.
Our company will deploy the 1 What is car sharing?
Chevrolet Volt, a plug-in hybrid electric A car sharing business differs from a
vehicle (PHEV). The Volt is powered solely traditional car rental service in that members
by its battery, but has a gasoline powered rent cars by the hour. Rentals are usually
generator that recharges the battery when its short and periodic, providing an alternative
capacitance drops below a certain threshold. for car ownership. Members often pay an
This gas generator extends the 40 mile range annual or monthly membership fee for the
of the battery to 400 miles, significantly right to reserve a car. In addition to the
greater than the range of any other electric membership fee, they pay an hourly fee for
vehicle (EV) [9]. We will generate the renting the car. Car sharing companies try to
electricity that our cars consume from solar give members all the advantages of a
panels located on our property. By powering privately owned car like accessibility and
our cars with solar generated energy, we can flexibility, without any of the headaches of
make our business almost entirely carbon ownership, such as maintenance. Car sharing
neutral; our only emissions would be also alleviates congestion in cities as
generated when the gasoline generators in multiple people can have access to the same
the Volts engage to recharge the battery. The car whenever they need it. ZipCar actually
usage of solar cells will also help electric has a 78:1 customer to car ratio [22] and it is
providers better coordinate the charging of environmentally friendly, reducing the
EVs with the supply of renewable energy, number of cars on the road. Most car sharing
like solar, onto the grid. businesses have arrangements with local
This focus on “green” technology municipalities for reserved parking spots for
will be the defining characteristic of our their vehicles. Such spots ensure that cars
business. We anticipate two types of users: are returned to places that are very visible,
“taxi” users and “habit” users. The “habit” increasing the number of rentals.
users will be the 90th percentile and above Smaller car sharing operations
users, who will use our service frequently (CSOs) will operate out of one or two
and may actually replace leasing or owning distribution and return centers. This system
a car with our service. Their usage patterns makes fleet management much easier for the

2
CSO, but has an effect on the flexibility that between rental car companies and the
is available to the customer. Other larger overall market can be seen in the strong
CSOs allow members to leave their vehicles correlation between the stock prices of
in any public parking spot within a certain companies in the rental car industry and the
operating region, increasing a member’s S&P500[21, 4], so during an economic
flexibility but spreading a CSO’s fleet across recovery is the ideal time to enter the
a large area. These loosely spread CSOs risk industry. This market improvement was
that there will not be a car near any other further seen in a chart stating that all of
member who may need it. ZipCar’s peers are either buys or holds, as
ranked by experts[22] (Appendix: Figure 3).
2 Industry Similarly, Hertz is considered a strong buy
The performance of the car by experts and its options prices for 2014
rental/sharing industry is directly correlated have been increasing, indicating that people
with the performance of the overall market. do indeed believe that the rental car industry
During an economic recession, the rental car will be improving (Appendix: Figure 4).
market suffers as the majority of its business More people are renting vehicles as the
comes from people traveling for business or market rebounds, demonstrated by the 2.5%
pleasure, since both business trips and market rebound in 2010 after the 6.5% drop
vacations are seen as expendable during a in 2009 (See Figure 1).
financially strenuous period. The correlation

Figure 1: Indicates the recovery of the car rental industry by improving profits after the 2008-2009 dip.

http://academic.mintel.com/sinatra/oxygen/search_results/display/no_redirect&id=570869&?sele
ct_section=570873

Thus, we decided that as businesses is seen in the increases of all three major
begin spending again, the market for renting indices over the past three years (See Figure
cars will expand. This market improvement 2).

3
Figure 2: This graph of the three major indices of the U.S. stock market indicates an
economy that has been recovering for three years.
http://www.google.com/finance?q=NYSEARCA%3ASPY

Furthermore, according to the data travel. Our location in Jersey City targets
from Google Finance, the demand for luxury business men who are staying or live in
goods is increasing with the improving Jersey City and going into New York for
economy and the upper-middle class who business. We will distribute our cars around
buy luxury goods are those who would Jersey City in prime locations like near the
likely rent electric vehicles (Appendix: Goldman-Sachs building and hotels.
Figure 5). Another factor of an improving
The market for renting cars will economy is an increasing number of
continue to expand as businesses and people business trips (See Figure 6).

Figure 6: The number of business trips per year has been increasing after the dip from
2007-2009, indicating a recovering market for travel, and thus for car rentals. The 2011
number ended up at around a 2.1% increase, but with a 7.2% increase in spending on these
trips.

http://academic.mintel.com/sinatra/oxygen/search_results/display/no_redirect&id=570869&?sele
ct_section=570873

4
The number of business trips is now rent an electric vehicle. Increased fracking
almost the same as it was in the 2007-early from the Marcellus Shale would decrease
2008 period, but not fully back to peak natural gas costs and make solar energy
demand. In order to give the market more much less appealing. Moreover, if ZipCar
time to recover, we decided to attract a niche were to cut their prices for a short period of
of the car sharing market instead of time and take a loss to bankrupt us, then it
attempting to directly compete with the could buy us out.
other major car rental companies whose Our business’s prosperity is directly
fleets number in the hundreds of thousands, correlated to the overall economy, as stated
such as Enterprise at around 850,000 cars before, so another downturn early in our life
(Appendix: Figure 7). would be detrimental to the company. Yet,
To attract this niche market further, the economy shows signs of recovery and as
we decided to compete on price as well in long as the federal government continues to
order to attract customers from the other stimulate the economy, we do not believe
large rental companies such as Hertz, that there will be another downturn in the
Enterprise, Avis, and ZipCar. Our prices are near future.
set 25% lower than ZipCar’s, at least to Other critical risks come from the
start. Also, we decided to locate in a possible adoption of hydrogen fuel cars. As
specific area near this niche group, where stated at pluginamerica.org, “hydrogen
there is not much competition. vehicles are the ‘car of the future,’ and
Critical success factors in entering probably always will be.” We recognize
the car rental/sharing industry will be several flaws with hydrogen-powered cars.
whether or not we can quickly attract a For instance, hydrogen fuel cell vehicles
customer base and how well we can consume four times as much electricity on a
establish customer loyalty. In addition, we per-mile basis as a battery powered car.
are seeking government fiscal assistance for Although newer and cleaner methods of
the start-up costs of building our solar array. producing hydrogen have been developed,
The general interest in “going green,” which the actual products have yet to be built.
will be greatly helped by improving While the electric grid must be improved in
technology and cheaper costs for solar order to accommodate increased loads
panels and other eco-friendly equipment, associated with large numbers of electric
will also need to increase in order for us to cars, billions of dollars would have to be
convince potential investors for further spent to build a hydrogen transporting and
expansion. We will need a good marketing distributing infrastructure. Also, even
team to publicize our service without assuming all of these problems are solved,
spending too much money. Furthermore, we electric vehicles will probably dominate the
need to strategically locate our business so market for “green” cars for awhile before
that it is easily accessible to our customers. hydrogen vehicles begin to enter the market
Although we are seeking to retain customer on a mass scale.
loyalty as there are a wide range of choices Thus, we decided that the car rental
for transportation, accessibility generally market is prime for entering, although the
translates to profitability. market is currently consolidating as Hertz is
Critical risks include decreasing aiming to buy Dollar Thrifty to consolidate
prices for other forms of fuel, making it 20% of the market[5]. Also, even though
cheaper to rent a regular automobile than to Enterprise and Avis control 70.3% of the

5
remaining market [8], we believe that we can companies make a large profit each year,
consolidate a portion of the 10% of the and losses are only incurred because of their
market outside of the control of the “Big need for marketing and their attempts to gain
Three” and establish customer loyalty there. brand loyalty.
We will establish customer loyalty by Other competition comes in the form
offering rewards to members who use our of public transportation, car ownership, and
service frequently. This is a kind of taxis. Because of this, we will locate our
“frequent flyer” model used by airlines. company next to the light rail, an above
Also, revenue for the car rental industry was ground subway system, to complement
around $20.6 billion in 2010, meaning that a public transportation in Jersey City rather
large market exists for rental cars and that than compete against it. Thus, people can
we could still make a significant profit [8]. take the light rail to our location and then
rent a vehicle from there in order to travel
3 Company somewhere the light rail does not go. Also,
3.1 Competition people can rent vehicles to explore the area
The three major names in car rentals and then take the light rail to get home.
are Hertz Global Holdings Inc. (HTZ), Avis The chart below details the expenses
Budget Group Inc. (CAR), and Enterprise associated with owning a normal car like the
Rent-A-Car. Together they control over 90% 2012 Honda Accord. The cost of owning a
of the market with Enterprise making $12.6 car increases dramatically after the fifth year
billion in 2010 [10], Hertz making $7.425 as more parts begin to break and more
billion [12], and Avis making $3.882 billion expensive repairs are scheduled. The
[11]
. Dollar Thrifty Automotive Group Inc., average annual cost of owning a car for five
another major player, is about to be bought years is $11,527.20[16]. Assuming normal
out by Hertz, creating a severely driving patterns, it would only cost a Solar
consolidated market. However, room still Wheels customer about $9,727.06 to rent
remains for a car-sharing company to take one of our cars every day of the year. This is
over the market for shorter rental periods, as cheaper than owning a car, making it a
seen by ZipCar, which made $186.1 million viable alternative to car ownership for our
in 2010 [13]. All of these car rental/sharing customers.

Solar Wheels Rate
Weekday Weekend
Rate $6.00 $6.71
Hours Driven/day 4 5
Days Driven 5 2
Weeks Driven 52 52
Sub Total $6,240.00 $3,487.06
Solar Wheels Commuter Price (1 year) $9,727.06

6
2012 Honda Accord [16] Price Range: $22,280 - $30,030
5 Year Ownership Cost 5 YEAR
Year 1 Year 2 Year 3 Year 4 Year 5
Breakdown TOTAL
Maintenance $106 $152 $317 $718 $317 $1,610
Repairs $0 $0 $77 $168 $340 $585
Fuel $1,751 $1,853 $1,960 $2,074 $2,194 $9,832
Depreciation $3,797 $2,067 $1,903 $1,708 $1,513 $10,988
Financing $676 $542 $394 $242 $88 $1,942
Insurance $1,216 $1,216 $1,216 $1,216 $1,216 $6,080
State Fees $122 $85 $84 $77 $76 $444
Yearly Totals $7,668 $5,915 $5,951 $6,203 $5,744 $31,481
Initial Price $26,155
Actual 5 Year Total $57,636
Actual Average per Year $11,527.20

We decided to locate in Jersey City million per year, will have the curiosity and
so as not to compete against the more desire to try our service. Also, this large
convenient taxis in New York City. People number of visitors will be more than capable
staying in Jersey City who want to visit New of supporting our small business of ten cars.
York City can use our service.
Barriers to entry are mainly those of 3.2 Competitive Advantage
capital, due to the large costs of constructing Solar Wheels’ competitive advantage
our solar array, leasing the land next to the lies in that we are not attempting to target a
light rail, installing charging stations, and large market of car renters, but merely the
purchasing all of the automobiles. Other niche group of the technology savvy and
barriers include possible decreases in the environmentally friendly. Furthermore, we
price of other fuels besides electricity, which do not have to try to bring them in with
would make our service harder to sustain. money spent on advertising, but rather, they
Yet, if we do manage to construct deals with will come to our location at the Liberty
General Motors and an electric company for Science Center and their own interest will
getting exposure for the Chevrolet Volt and lead them to attempt to learn more about our
providing data on charging logistics and product. Thus, we are not attempting to
renewables, we would gain a significant target the early majority through mass
advantage over any possible new entrants to marketing, but rather to contact the
the market. innovators and early adopters through their
Thus, if we do manage to secure the own interest. Also, we will market the
capital for our start-up costs, we should be newest “green” technology and minimized
able to compete effectively in the car rental emissions. The aesthetic value of our solar
industry and to provide a unique service that array and the futuristic look of our base will
is of high value to a specific group. This attract more attention than most
specific group, namely visitors to the Liberty advertisements, and will enable us to attract
Science Center, which number over 1 those people who want to “go green,” but

7
are on the fence and would like to try out an we would be affected by direct competition,
electric vehicle before purchasing one. The competition from public transportation, and
money saved on advertising can be used to competition from other vehicles powered by
allow us to compete with the “cheap” car “green” technology besides electricity. We
sharing companies on price and our lower then had to determine our sources of revenue
maintenance and fuel costs will also help in to cover costs like maintenance and property
this respect. leasing. We also considered possible
Our other main competitive government assistance and grants for setting
advantage would lie in the fact that we up our charging stations, as well as
operate based on our values. This would corporate sponsorship in exchange for the
enable us to hire people with vision and add marketing exposure we are giving to both
value to our service. We might be able to solar panels and electric vehicles.
convince the state government to give us
advantages over our competitors based on 4.2 What is the service
our efforts to “go green” and convince the Our fleet will consist of ten
rest of the population to do so as well. Chevrolet Volts which can be reserved for
Incorporating electric vehicles onto the grid anywhere from a few hours to a few days.
will be a massive problem for the As many people experience “range anxiety,”
government and utilities, so our data will the fear of running out of electricity while
become invaluable in time as more and more driving an electric vehicles, we had to make
electric vehicles need to be charged on the sure that we picked the car that was the most
grid. These advantages make our product similar to what people currently drive to
unique and valuable enough to establish a make the transition from traditional car to
niche customer base and probably for electric vehicles as smooth as possible. The
expansion as well. main attraction of the service is its claim of
minimal emissions. The cars will be
distributed throughout Jersey City near
4 Service Liberty Park and the Waterfront Area. We
4.1 Determining Factors chose Jersey City because most people are
In order to create a comprehensive there for business. They need short rentals to
business strategy, we had to consider a drive themselves from their hotel to their
multitude of factors. First, we had to meeting places. There is also a large
determine the general interest in electric commuter population and tourist population
vehicles and whether or not it would be from New York City. We are targeting a
concentrated enough to support a car sharing property close to the Liberty Science Center.
business. Then we had to determine where There is a light rail system that stops near
we would deploy our business. The location the Liberty Science Center. The
had to be urban, easily accessible, and have demographic of people who are going to the
a mix of habit and taxi users. It also had to Liberty Science Center are technologically
be somewhere frequented both by business advanced and may be more willing to try
travelers and vacationers. The demographic renting an electric car. These are the early
of the region had to be one of early adopters adopters in the market. We decided to attract
of new technologies, such as affluent urban this niche group rather than directly compete
professionals, which generally implies a with Enterprise, Hertz, and Avis for control
wealthier area. We also had to consider the of the main body of the market.
presence of competitors in the area and how

8
Also, we decided that renting out nonrenewable sources like natural gas or
electric vehicles would work best in a city coal. Our company, however, will have 100
environment, because electric vehicles are solar cells on its main campus which will
not as fast as gas-powered automobiles, but provide power either to our cars directly or
do better in stop and go traffic because the to the grid. Our cars will only consume 150
engine can shut off and they recoup energy kWh (See Figure 8). If we create a system
through braking. Also, electric vehicles are that generates more than our cars consume
cleaner than gas-powered cars and would in electricity, we can draw from the system
thus help clean up the air in urban areas. at night when the demand for power is
Our business will distinguish itself relatively low and the price is
from other car sharing businesses by being proportionately low, and sell the electricity
eco-friendly and as carbon-neutral as we produce during the day. Because most of
possible. We will use only Chevy Volts our power comes from the sun, we have
which emit no carbon emissions when minimized tailpipe and production
running on battery power. The power for emissions.
these vehicles traditionally comes from

Figure 8: The figure above shows how the amount of power absorbed by the solar cells
changes with the time of day.
On average, there are approximately full. Building in some buffer room, we
fourteen hours of sunlight per day. predict that our fleet of 10 Volts will need
Assuming that the power intake follows the 150 kWh of power per day to charge. The
distribution above, one can calculate the amount of power absorbed by the cells is
number of solar cells needed to meet a represented by the area under the curve
certain level of demand. For our purposes, above. The area under the curve can be
we have to design an infrastructure that will approximated by the area of the triangle in
support the full charging of every single car black. From the amount of electricity that
in our fleet. Each car requires approximately we have to generate over the course of the
12 kWh of power to charge from empty to entire day, we can calculate the amount of

9
electricity that we must capture at the peak We will also develop a mobile
of the day, 1:00 P.M. In order for the area of application that will allow customers to
the triangle above to be 150 kWh, we need make reservations from their mobile phones.
to determine: The application will be available on iPhone
½ b*h = area or and Android app markets and will allow
½ (14 hours) * (x kWh) = 150 kWh customers to complete reservations for car
x = 21.4 kWh and help the company prepare to meet future
Thus, we must produce 21.4 kW at demand.
midday; this is the most sunlight we will
have to capture at a given time. Using 225 4.3 Profitability
W solar cells, we would need 95 cells to We will begin with a small fleet of
reach this maximum capacity. During the ten Chevy Volts. The MSRP pricing for
day, when the cars are not available to be Volts is currently $39,145 per car making
charged, electricity produced by our cells the initial costs for our fleet at most
will be sold back to the grid. We will be able $391,450. We are anticipating, however,
to buy energy to charge our cars at night for some discount to that price as the sale of
a discounted rate as the demand for the those cars to us would constitute a fleet sale.
power is significantly less during the night. We could also earn up to a $7,500 rebate for
We will try to avoid charging from the grid each car. Our program also acts as indirect
from 4:00 to 6:00 P.M. as this is the period advertisement for the Chevrolet Volt, so
of greatest energy consumption over the there is added incentive for GM to offer us
course of an ordinary day. reduced pricing for the cars. While the table
We chose to offer Chevrolet Volts in below shows the cost of buying our entire
our fleet because they are the most similar to fleet outright, we may arrange for a
traditional cars. Although they are entirely corporate leasing agreement similar to the
battery operated, a combustion generator ones that Enterprise and Hertz have with
turns on to recharge the battery when it various car manufacturers.
reaches a certain threshold capacity. This We calculated the maintenance cost
extends the range of the vehicle to for all the vehicles in our fleet over the
approximately 400 miles [9]. General Motors course of five years. The values below
is also investing heavily into their marketing include the cost of fuel, general
campaign for the Volt, so they may establish maintenance, and insurance. We must
a relationship with us to improve their brand provide insurance to our customers under
recognition. state law.

Maintenance over 5 years [18]
Car year/make/model Year 1 Year 2 Year 3 Year 4 Year 5

2013 Chevy Volt $41,600 $39,610 $37,610 $43,930 $35,270

The cost of the charging stations for each of the ten vehicles cost $82,875 to install. The
costs are broken down below.

10
Charging Station Installation
Number of Units Installation rate Material Labor Misc. Total Cost

10 $ 5,525.00 $ 1,950.00 $ 8,985.00 $ 115.00 $ 82,875.00

The initial costs of this business are broken down below. These include the cost of the
solar arrays, fleet, and charging stations. Sources from PSE&G provided us with a $5 per watt
estimate for the constriction of our solar arrays.

Initial Costs [18]
Solar Array $ 114,750.00

Initial Fleet $ 391,450.00

Charging Station $ 82,875.00

Total Initial Cost $ 589,075.00

The table below outlines the running costs of operation over the first five years. We
calculated these expenses using information provided by Motor Trend Magazine and PSE&G.

Running Costs per Year

Running Costs
per Year year 1 year 2 year 3 year 4 year 5
Maintenance[18] $41,600 $39,610 $37,610 $43,930 $35,270
Leasing[3] $138,000.00 $38,000.00 $38,000.00 $38,000.00 $38,000.00
Total cost $179,600 $177,610 $175,610 $181,930 $173,270

We project our net revenue to be revenue. The price of SRECs is
$336,202 a year. The sources include the approximately $300 at auction, but the price
actual rental of the cars, advertisements on of these SRECs is anticipated to rise as the
the car, and Solar Renewable Energy Credits federal government is about to increase the
(SRECs). Energy providers are required to amount of SRECs that companies are
invest a certain amount of money in required to obtain. Using the current rates of
renewable energies and earn a certain ZipCar, we calculated and scaled our profits
amount of SRECs. SRECs are awarded for according to the table, “Rate Comparison.”
[22]
every megawatt of energy produced using We decided to undercut ZipCar on
solar energy. If a company cannot meet the pricing so that people have an added
required amount of SRECs, they can incentive to use our car sharing service over
purchase them from other sources such as ZipCar. Advertisements on the cars of our
our company. Our company will be fleet would generate $2,000 a month per car,
producing about 28 megawatts of energy per generating $240,000 a year.
year, thus giving 28 SRECs as a source of

11
Rate Comparison
Days Mon-Thu Fri-Sun Annual Fee Application Fee
Time Hourly Daily Hourly Daily
ZipCar $ 8.50 $ 69.00 $ 9.50 $ 77.00 $ 50.00 $ 25.00
Solar Wheels $ 6.00 $ 48.71 $ 6.71 $ 54.35 $ 35.29 $ 17.65
Electric Annual
Subtotals $ 42,857.14 $ 69,579.83 $ 35,924.37 $ 58,235.29 $ 2,745.10 $ 1,372.55

ZipCar Members 700000
Vehicles 9000
Members/Vehicle 78

Solar Wheels Vehicles 10
Hours/Day 5
Days/Year 250
Members 78
Car Subtotal $ 83,684.87
Registration $ 4,117.65
TOTAL $ 87,802.52

Estimated Revenue
Estimated revenue/year
Rental $ 87,802.52
Advertisements $ 240,000.00
SRECs $ 8,400.00
Net Revenue $ 336,202.52

Projected Income over 5 years
Income over 5
years Year 1 Year 2 Year 3 Year 4 Year 5

Rental $ 87,802.52 $ 87,802.52 $ 87,802.52 $ 87,802.52 $ 87,802.52

$
Advertisements $ 240,000.00 $ 240,000.00 $ 240,000.00 240,000.00 $ 240,000.00

SRECs $ 8,400.00 $ 8,400.00 $ 8,400.00 $ 8,400.00 $ 8,400.00

Maintenance ($41,600) ($39,610) ($37,610) ($43,930) ($35,270)

Leasing[3] ($138,000) ($138,000) ($138,000) ($138,000) ($138,000)

$
Income per year $ 156,602.52 $ 158,592.52 $ 160,592.52 154,272.52 $ 162,932.52

12
According to our calculations and financial projections, the initial start up costs of the
company will be offset by the third quarter of the fourth year.

Projected Value over 5 years
year 1 year 2 year 3 year 4 year 5

-$432,472.48 -$273,879.96 -$113,287.44 $40,985.08 $203,917.61

4.4 Product life cycle curve charging stations scattered throughout
Electric cars and car sharing neighboring areas. Thus, we would target
companies are in the early stages of those customers who both take the light rail
development. ZipCar is the oldest of the car and visit the Liberty Science Center,
sharing businesses, but poor management generally those interested in new
has made them incur constant losses since its technologies and forward-thinking to the
inception in 2000. Electric vehicles have point of being radical. These would be our
been in development since the 1990’s with innovators and early adopters and then they
the introduction of the General Motors EV1 would act as our advertisements by telling
concept car. Recent demand for cleaner and their friends. Thus, instead of attempting to
more efficient cars has reinvigorated the attract the early majority, we would go for
search for more effective electric cars. those people who are actually interested in
Despite the increased dedication of the service we have to offer and might also
resources to electric cars, consumers have be among the first to bring large numbers of
yet to make a mass switch to the new electric vehicles onto the grid.
technology. Companies like General Motors
are investing heavily in marketing for their Conclusion
electric vehicles. Consumer education is 1 Where do we go from here?
critical to making consumers switch to Today, electric vehicles comprise
electric cars, so car manufacturers are merely 1% of the total rental market, but
investing heavily into consumer education. they will increase in numbers as gas prices
We think, however, that the most effective continue to rise and battery technology
way of converting consumers to electric cars continues to improve. Taking this into
is to give them an “extended test drive.” By account, we will attempt to gain funding
allowing a consumer to drive an electric from several different sources, such as
vehicle for a few hours without owning the federal grants and angel investors. One
car in any form, consumers have the perfect federal grant that we apply for will be the
opportunity to decide whether electric cars Small Business Innovation Research
suit their needs. This is the perfect chance Program- Phase I (SBIR) grant for
for car manufacturers to go beyond $100,000. This grant goes up to $450,000 in
traditional advertisements to market their Phase II of the grant. This would be enough
cars. to cover the expenses of building a solar
array. Also, a source from PSE&G Nuclear
4.5 Customers in Salem, New Jersey stated that our project
We decided to locate ourselves in may be approved by the NJ Board of Public
Jersey City, next to the light rail near the Utilities, which would then reimburse us for
Liberty Science Center, with cars and some of the cost of the solar array. This

13
would cover around $150,000 of the start-up rely on them to tell their friends about our
costs. We would also attempt to make a deal service. By making “going green” an
with General Motors for a long-term lease of attractive idea, this trend will gain in
ten Chevrolet Volts for a cheaper rate popularity and effectiveness. Thus, we
because of the improved marketing we would allow the market to create desire for
would provide. We might also try to “going green” and make it a need, not a
convince an electric company to pay for want, instead of assuaging the consciences
some of our start-up costs in exchange for of everyone who has yet to go green.
the data we would gather on electric vehicle
charging. Last of all, we would attend 3 Expectations
several “Angel Fairs” in New Jersey in an We expect to retrieve useful usage
attempt to obtain an angel investment to data from our most frequent users. Their
cover the remainder of our start-up costs. usage will be translatable to average
This capital would also give us leverage in consumption when more electric vehicles
further deals with other companies. are bought. We also predict that with the
After earning enough money to pay introduction of electric cars to the area
for our initial expenses, we would approach through our company, more people will buy
city governments and try to reserve certain electric cars for their own personal use. In
parking spaces for our cars like ZipCar’s order to remain unique even when the
arrangements with local authorities. Our market of car owners begin to adopt the
service would become much more innovative technologies we use, Solar
convenient for our customers with these Wheels will try to remain on the forefront of
dedicated parking spots. Other deals would alternative fuel sources by pioneering and
be centered on making our service more testing new technologies on microscale.
convenient for customers.
Once our business has a firm footing Acknowledgements
in Jersey City, we will consider expanding We would like to thank Professor
into New York City where we can target an Dunbar Birnie of Rutgers University, Wayne
even larger audience, improving both the Wittman and Nicole Swan of PSE&G,
quality of the information that we collect Stoyan Lazarov, Marcus Crews, and
and the effectiveness of our company at Michael Mcguire of PhillyCarShare, all of
marketing EVs and PHEVs. whom provided valuable insight,
knowledge, and time during the process of
2 Suggestions for Future Work writing this paper. We would also like to
As the ideas for this company come thank Program Coordinator Jean Patrick
together, the next step is to bring them to Antoine for organizing GSET 2012 and NJ
fruition. By establishing this company, we GSET’s Board of Overseers, The State of
will be able to test whether this service is New Jersey, Rutgers University, Lockheed
truly and realistically practical. We will Martin, South Jersey Industries Inc., and
initially target the group interested in Morgan Stanley for continuing to sponsor
technology and the environment and then tomorrow’s engineers.

14
References
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16
Terminology:

PSE&G- Public Service Electric and Gas Company. Main energy company of New Jersey.
Kilowatts (kW) - Solar cells are rated according to the maximum amount of energy that they can
generate per unit of time.
Kilowatt hours (kWh) - Kilowatt hours are a measure of energy.
Electric Vehicle (EV) - An electric vehicle is one that relies completely on battery power to
propel itself. The range of the car is completely limited by the capacity of the battery. An
example of this car is the Nissan Leaf.
Plug-in Hybrid Electric Vehicle (PHEV) - A plug-in electric vehicle has a battery and
combustion engine. The car will always run on its battery but, the engine acts to recharge the
battery when the battery capacity falls below a certain threshold value. An example of this type
of car is the Chevrolet Volt.
120 V charger vs. 240 V charging station - Electric vehicles and plug-in hybrid electric
vehicles are recharged primarily through a charging station of some sort. There are two types of
charging stations, 120 and 240 V. 240V charging stations charge the car faster, but are
permanent fixtures. 240V stations may also require additional electrical work to install if a 240V
line is not available at a particular location. 120V chargers can be more portable and can be
attached to any standard household outlet.
Options/Derivatives- Investment deals in which the buyer is given the option of purchasing
stock in a company at a later date at a set price. These are bought when a person believes that
the value of a company will increase in the future.
Solar cells - A device that converts solar light into electrical energy.
Solar Renewable Energy Credits (SRECs) - These credits indicate that an electrical provider
has invested a certain amount of capital into renewable energy. The federal government
mandates that energy providers obtain a certain amount of these credits annually, so there is a
market to sell these credits to companies that fall short of the government mandated amount.

17
Appendix:

Figure 3: Expert recommendations to buy or sell ZipCar

Figure 3: Shows that the major car sharing company is expected to do well in the near future, indicating that
the industry should do well. (http://data.cnbc.com/quotes/ZIP/tab/5.3).)

18
Figure 4: Expert recommendations to buy or sell Hertz.

Figure 4: Further recommendations from analysts who believe that a major car rental company is a good
buy, indicating the current health of the industry (http://www.dailyfinance.com/quote/nyse/hertz-global-
holdings-inc/htz/analyst-ratings?source=esadlfltnal0001)

Figure 5: This graph demonstrates that both the luxury goods industry and the overall market are improving
and are correlated (http://www.google.com/finance?q=GOOGLEINDEX_US:LUXURY).

19
Figure 7: Fleet sizes of the main competitors in the car rental/sharing industry.

Figure 7: This graph shows how many more vehicles other car rental companies have and how we will not be
able to get a large share of the market initially. Thus we will target a niche group.