Interview with ZENN Cars' CEO, Ian Clifford, Feb 4 '08

Ian: It is an ultra - yeah, and it's - to use an ultra-capacitor to describe it doesn't really do it justice. It's really an ultra-capacitor on steroids if you will. It's an ultra-capacitor with energy and power storage type characteristics that have not - we haven't seen in the capacitor world yet.

Doug: So it's going to charge much quicker. I read that it was going to charge like when you are filling up your gas tank. And it's going to be able to give you faster speeds.

Ian: Yes. Well the limitation for us, I mean, the reason that we are in the low-speed vehicle market now is that to go to a highway capable vehicle requires a tremendous amount of cost, not just as a manufacturer, but also for the consumer. And we felt that, you know the right entry point for us is within the low-speed vehicle market.

Doug: So, but in the long run you see yourself in the full gamut of electrical vehicles?

Ian: Absolutely. Absolutely and from our perspective quite clearly it's energy storage, which really kind of breaks the mold and lets you go, lets you create a high-speed vehicle that the average consumer can identify with and can operate without the inconvenience, the perceived inconvenience of current electric vehicle technology.

Doug: What is the distance that the current battery will get?

Ian: Well, it's really - I guess the analogy would be how big is the gas tank. I mean, you can have - the interesting thing about an electric vehicle using this technology is you could create a full variety of vehicles that would have a range specific to the type of use.
So you may, you know, we might choose to make an urban commuter vehicle that yields a range of 80 miles a day say and could be recharged easily at home. And then we would size the energy storage accordingly so that it would, so you would get the most efficiency and the least cost.



But ultimately people will, you know definitely want vehicles that have a 300 mile range and that will just, you know require a larger energy source device. But it's all doable within this technology. That's what's so exciting.

Doug: Is this proprietary to you or is it just Eestor and they could sell it to any other electrical vehicle manufacturer?

Ian: We have worldwide exclusive license to their technology up to a 1400 kilo curb weight vehicle. So we're talking, you know, Toyota Prius, Honda Accord sized vehicles and smaller we have exclusive rights to globally. And then we have nonexclusive rights to build larger vehicles.
So within our exclusivity globally it's a huge market. We're talking 40 million new vehicles a year are built within that exclusivity.



We also have worldwide exclusive rights to conversion of an existing internal combustion vehicle to electric, any size passenger, four-wheel passenger vehicle. So, to me that's a very, very exciting market. We've got, you know anywhere between 750 and 900 million internal combustion cars on the road today, many of which are aging and becoming more and more polluting as they age.

Ian: The opportunity to take out an old, inefficient internal combustion drive system and put in a new highly efficient electrical drive system, we believe is a tremendous opportunity. So we are working towards drive systems to do that right now.

Doug: That's a unique idea that I really hadn't heard of. I was just reading a book called "Energy Independence" by, I think David Sandalow. And he was talking about how slow it would take to actually turn over, to replace the entire fleet because I think only 4% a year is replaced. But now you're talking about going actually to the older vehicles and upgrading them.

Ian: Exactly. When you think that -

Doug: That could accelerate it.

Ian: It could accelerate it hugely and also if you think of the enormous investment that, you know, we as a planet have made on the existing automotive fleet in terms of raw materials and water and energy to create these vehicles. And so many of them either are used way too long as internal combustion vehicles and become huge polluters or many end up in landfill and, you know are disposed of inappropriately.
If you can give them a new, you know heart basically -

Doug: Right.

Ian: Do a heart transplant on them you've suddenly got a vehicle that could potentially last many, many more years.

Doug: But what about the economics of that? I mean would it cost like $10, 000 to upgrade your vehicle? And would you be saving that much in gas?

Ian: Well, we are still working on determining actual conversion costs but the idea is that it would be a very competitive and compelling decision for either a fleet owner of, you know, many hundreds of vehicles. Or an individual, you know to convert their, you know, 1980 Jetta or whatever.

Doug: Right. So how would this compare? I mean, there is so much activity in this space - the Chevy Volt, Renault and Nissan are going to be working with Project Better Place in Israel.

Ian: Israel.

Doug: There is a lot of activity.

Ian: Yeah.

Doug: Where does ZENN fit?

Ian: Well, right now we are, as I said we are pretty well exclusively focused from a product perspective on the low-speed vehicle industry in the United States. We have engineering programs underway right now for highway capable vehicles for both new vehicle and conversion.
But really, it's funny, if you look at any of the major announcements today and you could use the Project Better Place and looking at Israel, still the missing link to all of the enablement is energy storage. So what is the optimal energy storage technology that will enable the Volt and will enable, you know any of the electric vehicle companies that are out there right now to succeed?



I firmly believe that it will be the companies who have access to the best technology that will succeed the most.

Doug: Well that I'm sure is the case. Some of these people are pretty sophisticated manufacturers and they have access to tremendous amounts of capital.

Ian: Yes.

Doug: $200 million to Project Better Place. So I'm sure that they could shop for the best.

Now I know you are saying that Eestor has the best at this time that you have found.

Doug: And I'm assuming that you have patent applications on it so that these other companies can't really just copy that technology.

Ian: There's a huge, as you know Doug, I mean there's a huge horserace on right now in terms of energy storage technologies. I mean there are more companies than you can name right now.

Doug: Right.

Ian: Who are looking seriously at a solution. And whether it is Eestor or someone else it's going to happen.

Doug: Right.

Ian: It has to happen.

Doug: Exactly.

Ian: So it's really, you know, which horse are you backing and, you know how are you approaching the potential commercialization of the technology as well. So you know, we did as I said a tremendous amount of research to determine that what Eestor had going was, you know was dramatically beyond what anyone else was proposing at the time and currently.
So, you know, we are very, very hopeful and optimistic that they will commercialize this year.

Doug: So is that something that you would - I know that you have the exclusive for the cars in that class group, but could you license that technology out to some of the bigger players to accelerate it and then obviously you would get a huge share of that licensing revenue?

Ian: Well we wouldn't license. We would joint venture specifically. So it's the same.

Doug: Right.

Ian: A different means to the same end. But no, we would ensure that, certainly our plan is to ensure that this type of technology in transportation is adopted globally. Absolutely that is our vision.

Doug: So how big could this small, the low-speed vehicle industry get? I know that on your website, you say it's for resorts and gated communities, airports, college and business campuses, things of that nature. How big of a market could that grow to?

Ian: Well, if you look at other markets globally, you know Europe as an example their low-speed vehicle market is, you know, roughly 30 to 50,000 units a year.

Ian: So you know, if we did the same in the US, I think that would be exciting. I still believe this is a niche market. It will never be a, you know, it's never going to - certainly in the United States it's never going to take on full-service automobiles directly.
But I think more and more people are realizing that a low speed vehicle is a very viable part of the transportation mix. And you know instead of firing up an internal combustion vehicle you know to drive around the corner to shop or to visit or whatever, it makes so much more sense to use a small, zero emission electric vehicles for those types of trips.



So that's how we are selling. That's how we are certainly appealing to consumers, is on that basis.

Doug: When I first saw your product on that video my first thought was that what you're doing is brilliant in that you are in the market, you're getting in the market with an electric vehicle. And it may not be mainstream yet. It may not be ready for prime time yet. But you're in the market.
And when technology improves and the market becomes more receptive to electric vehicles, you are going to be there.

Ian: Yeah, that's certainly part of our plan, you know is to build a very significant level of awareness around electric vehicles and certainly around ZENN specifically as a company, as being a leadership company with zero emission drive technology and solutions.
And certainly that has been our experience so far. I mean, it's great how much recognition the brand has got and how much, you know how much value is put in that. It's very significant.

Doug: So just in the last few seconds, few minutes, maybe you could speak to just how you started this company and how you got involved and just how it got going.

Ian: Sure, it was really grassroots for me. It was - I was one of the many millions of people in North America driving, you know an oversized vehicle in an urban core, stuck in traffic 90% of the time thinking, you know - this was in the mid-90s - thinking there has got to be a much better way of doing this. This doesn't make any sense. It's unsustainable.
And at the time you know, the EV1 was launched in California.

Ian: And the RAV4. There were a bunch of electric cars in California. So I thought as a nave Canadian that I would get on the phone and buy an EV1 and bring it to Toronto and that would be my car. You know, after a couple of years of being told basically, "You know, forget it. This is a pilot project in California." you know I said, "This is ridiculous. I've got to do something about this."
So I ended up buying a 40-year-old electric car, a Henney Kilowatt car that became my downtown, urban core car. And one thing led to another - just a tremendous fascination about this car and I figured, you know, there has got to be a very interesting business here. And nobody else is doing it.

Doug: What business were you in at the time?

Ian: At that time I had an Internet marketing company that I sold back in March of 2000 and got out of that, really got out of the Internet business right at the right time. And I thought the next thing that I would do has got to be a lot more meaningful than that and I want to leave a legacy, you know, a much more meaningful legacy in terms of what I do next. And zero emission vehicles seemed to be the right place. So I started a car company. [laughs] And that's where most people pause for laughter.
But that certainly was how it started and we have grown it very successfully. We are really pleased with where we are today. We are a publicly traded company, which is kind of interesting.

Ian: And that's given us, you know access to the markets and access to funds to build the company out. And we are really, really excited about our next steps, which will be, as I mentioned, the move into highway capable vehicles with the right technology.

Doug: Are you going to need a lot more financing to do that?

Ian: Yes, absolutely. Yeah. And we've got plans for that and we will, once Eestor, you know have made it through the next milestones, we will pull out all the stops for commercialization of that technology.

Doug: Do you have any advice for the American consumer or the North American consumer to accelerate the whole adoption process of these?

Ian: Well sure. I'd say don't wait. You know, don't wait around for the perfect solution. Consider low-speed vehicles as an interim step and for many, many people an extremely viable product. And it meets the needs of millions upon millions of Americans, North Americans' daily driving needs.
And things are only going to get better. So, yeah - so to keep your eyes peeled on that.

Doug: Well, thank you so much. Really I appreciate your time and you know, I look forward to seeing the next round.

Ian: Yeah, well it's going to be, we predict that '08 is going to be a pretty, pretty exciting year in the evolution of electric drive solutions, that's for sure.

Doug: That's super.

Ian: Good.