The South Coast Air Quality Management District (SCAQMD) has been a long-term supporter of plug-in hybrids, beginning with its early projects with Prof. Andy Frank at UC Davis and with AC Propulsion. CalCars was part of South Coast's 2005 project to sponsor EnergyCS's conversion of several vehicles, including one for us http://www.calcars.org/­calcars-news/­41.html.

Last Friday, after a competitive bidding process, SCAQMD awarded Quantum Technologies $2,095,613 to purchase and convert 20 Ford Escape Hybrids. As described below in the Board's report, Quantum has a long history in technology integration. Quantum was the contractor for SCAQMD's much-criticized $5M project in 2004 to convert Priuses into hybrids fueled by hydrogen. Now Quantum has the opportunity to do a great job showing how the Ford Escape can become a great PHEV. For this project, Quantum will sub-contract with Advanced Lithium Power (a Vancouver battery technology company that's 19% owned by Quantum) -- see the April 3, 2006 press release at http://www.qtww.com/­about/­news_events/­press_releases

The biggest news was quietly noted: "For this project, Quantum has support from Ford Motor Company." While we have no details about how it will work, this marks the first time that a car-maker is cooperating with an outside integrator to to make-over its hybrid into a PHEV. We hope this will motivate Toyota to follow suit, or hasten its plans to produce PHEVs.

South Coast AQMD also announced a $622,000 award to Hymotion for 10 Prius conversions on vehicles to be provided by conversion recipients. Hymotion brings highly-regarded Aerovironment <www.aerovironment.com> in as a partner, giving us the opportunity to see that company's fast-charging technology put to use with A123Systems batteries. Hymotion is also partnering with University of California at Riverside's Center for Environmental Research and Technology http://www.cert.ucr.edu.

We're reproducing excerpts from the announcement below. But we encourage readers to view the actual page http://www.aqmd.gov/­hb/­2007/­march/­07034a.html, which includes ranking tables for the five bidders. (The other three were EnergyCS, EDrive Systems and Electro Energy Inc.)

BOARD MEETING DATE: March 2, 2007 Execute Contracts for Development and Demonstration of 30 Plug-In Hybrid Electric Vehicles

SYNOPSIS:
On November 3, 2006, the Board approved the release of an RFP to design and demonstrate a fleet of plug-in hybrid electric vehicles with corresponding recharging stations at up to fifteen sites within the South Coast Air Basin. Five complete proposals were received, subsequently reviewed, and scored by a panel of outside experts. This action is to fund $2,718,280 from AQMD to develop and demonstrate 30 plug-in hybrid electric passenger vehicles.

RECOMMENDED ACTION:
1. Authorize the Chairman of the Board to execute a contract with Quantum Technologies for the development and demonstration of 20 plug-in hybrid electric vehicles, including cost of base vehicles, in an amount not to exceed $2,095,613 from the Clean Fuels Fund. 2. Authorize the Chairman of the Board to execute a contract with Hymotion for the development and demonstration of 10 plug-in hybrid electric vehicles, not including cost of base vehicles to be provided by demonstration sites, in an amount not to exceed $622,667 from the Clean Fuels Fund. Barry R. Wallerstein, D.Env. Executive Officer

Background

The AQMP has identified the use of alternative clean fuels in mobile sources as a key air quality attainment strategy. True zero-tailpipe emission passenger vehicles, however, are either no longer manufactured (e.g., battery-electric vehicles) or are not anticipated to be sold in large numbers before 2015 (e.g. fuel cell vehicles). The AQMD has sponsored plug-in hybrid electric vehicle (PHEV) demonstrations for over six years because of the potential for this technology to enable zero-tailpipe emissions for portions of the driving cycle. Similar to commercially available hybrid-electric vehicles, PHEVs utilize a battery pack and an electric motor in concert with an internal combustion engine. PHEVs, however, can employ a larger battery pack which can be designed to extend the electric portion of the driving cycle, providing improved fuel economy, lower greenhouse gas emissions, and reduced petroleum dependence. The larger battery pack must be fully recharged external to the vehicle so a charger, plug, and energy management system must be integrated into the vehicle.

There has been increasing support for PHEVs from a wide array of organizations, including electric utilities, environmental groups, energy independence organizations, and other air districts. Several automobile manufacturers have also announced plans to investigate the technology but voice concerns about the battery durability in terms of calendar and cycle life. In order to discuss these concerns and identify the major obstacles to PHEV deployment, staff hosted a forum and technical roundtable on July 12, 2006 with invited experts from DOE, NREL, Sandia, CARB, Johnson Controls, SCE, EPRI, and EnergyCS. One major result of this technical roundtable was consensus by the panel members that early demonstrations are needed to provide real-world data as feedback for the technology providers to improve the battery specifications, energy management systems, and packaging. This information would then help produce reliable systems, which in turn may stimulate an early market, increase production, and thus lower the costs for these batteries and PHEVs. The proposed project is to conduct this early demonstration using converted commercially available hybrid electric vehicles in sufficient numbers to provide a wide array of driving cycles, expose a large number of users to PHEV technology, and establish statistically significant data for feedback to the battery manufacturer.

At the November 3, 2006 meeting, the Governing Board approved RFP #P2007-14 to design, engineer, convert, test, certify, demonstrate, and maintain for 60 months 30 plug-in hybrid electric vehicles with supporting infrastructure at up to 15 demonstration sites in the South Coast Air Basin.

Selection Process Five complete proposals were received in response to the RFP. The proposal from Quantum Technologies was for only a Ford Escape Hybrid platform. The proposal from E Drive was for only a Toyota Prius platform. The other three proposals provided options for a mix of vehicles. Pursuant to the Procurement Policy and Procedure, the RFP identified 100 possible points for the technical score and 20 possible points for the cost score. Within the 20 points for cost, 10 points were for the lowest cost in terms of absolute dollars, with additional points assigned based on the level of cost share. An evaluation team with strong expertise in advanced batteries, electric and hybrid electric transportation, and government policy issues was assembled. Comprising the panelists were staff from CARB's Branch for On-Road Control Regulations, a transportation technology expert from U.C. Davis, a CEC Transportation Research Manager, an expert in advanced batteries from the Department of Energy, and an electric utility transportation expert (five males and one female; four Caucasian and two Asian/Pacific Islander).

Proposal Based on the Panel's evaluation, staff recommends awarding two contracts; one to Quantum to convert 20 new Ford Escape Hybrid vehicles, with delivery of the first 6 vehicles within 10 months of contract execution, and the remaining 14 vehicles within 12 months of contract execution, and one to Hymotion to convert 10 new Toyota Prius vehicles, with delivery of the first 6 vehicles within 10 months of contract execution, and the remaining 4 vehicles within 12 months of contract execution. AQMD will work with interested fleets to develop the demonstration program at up to 15 sites. Depending on performance under these proposed contracts and value to AQMD, funding for additional vehicles may be requested.

Quantum, with headquarters in Irvine, California, is an established world leader in the design, development, manufacturing, and commercialization of gaseous fuel management systems and alternate fueled vehicles. Since 1997, Quantum has produced over 16,000 alternate fueled vehicles. Quantum is the manufacturer of record with the California Air Resources Board (CARB) for GM's CNG powered Chevrolet Cavalier, full size Van and medium and heavy-duty CNG powered Silverado and Sierra pickup trucks. Quantum's Advanced Vehicle Concept Center (AVCC) in Lake Forest is a state-of-the-art engine and vehicle development facility by recognized automobile manufacturers worldwide. Quantum has the unique capability to develop, validate, certify, and commercialize specialty vehicles from the design stage to mass production. The Lake Forest facility has the latest engine and chassis dynamometers commercially available, and the only SULEV emissions laboratory on the West Coast, recognized by CARB. Quantum has also produced hydrogen fuel cell powered Neighborhood (NVs) and All Terrain Vehicles (ATVs) in 2002 and 2004, respectively. The latter is currently in production for the U.S. Army. In 2003, Quantum developed a hydrogen fueled 2002 Toyota Prius, equipped with compressed hydrogen and metal hydride storage systems. The hydrogen powered Prius prototype produces comparable power to the gasoline version, along with increased fuel efficiency and almost zero emissions, the latter consistent with CARB's current partial zero emission standards. In 2004, in response to a competitive RFP, Quantum was awarded a contract with AQMD to develop and demonstrate 30 hydrogen-powered Prius vehicles. For this project, Quantum has support from Ford Motor Company, and will sub-contract with Advanced Lithium Power. Quantum had annual sales of $25 million in 2002-2003 and has 150 employees.

Hymotion, with headquarters in Ontario, Canada, is a provider of complete integration for hybrid and fuel cell systems, with over ten years of experience in the alternative fuel industry. Hymotion has delivered Prius PHEVs to Argonne National Labs, National Renewable Energy Lab, CoStar, Veridian, FairFax County, and HOURCAR, and is in pilot production with over 35 orders at the time of their proposal. For this project with AQMD, Hymotion has support from A123 and AeroVironment, and will be sub-contracting with UC Riverside, CE-CERT. Demonstration sites, still to be determined, are expected to pay for the base cost of 10 Toyota Prius vehicles. The cost of both projects to the AQMD shall not exceed $2,718,280. Total cost is estimated to be $3,379,663 with cost-sharing summarized in the table below:

[TABLES]

Quantum Technologies and ALP will provide almost $720,000 in cost-share by absorbing approximately 25% of the design, engineering, and administrative costs over the entire project. Hymotion and AeroVironment will provide $100,000 in cost-share using the fast-charging infrastructure.

Benefits to AQMD The expansion of the PHEV program is included in the Technology Advancement Office Clean Fuels Program 2006 Plan Update under items "Demonstrate Light Duty Plug-In Hybrid Electric Vehicles" and "Develop and Demonstrate Medium- and Heavy-Duty Hybrid Vehicles and Systems." Plug-in hybrid technologies overall have potential for lower criteria pollutant emissions and zero local emissions during portions of the commute when vehicles are operating on battery only. This can provide substantial benefits to communities, neighborhoods, and schools where these vehicles operate.

The AQMD has been a leader in developing and demonstrating plug-in hybrid technologies. Expansion of the AQMD PHEV Program will accelerate the determination of commercial viability for this technology and its associated air quality benefits. Staff believes the PHEV strategy can be an enabling technology for all types of alternative fuels, such as CNG and hydrogen, by reducing the size of the most costly components (e.g., gaseous storage tanks and the fuel cell stack) and relying more heavily on the battery system.