Letter - City of Austin and Global Electric
Austin Energy City of Austin
Austin's Community-Owned Electric Utility
Town Lake Center 721 Baron Springs Road Austin Texas
78704-1194 (512) 322-9800
February 27, 2004
Salim Rana
Chief Executive Officer
Suite 144
5001 East Bonanza Road
Las Vegas, NV 89110
Dear Salim:
I am writing to follow up on our meeting at the office of Lithium House on
February 16, 2004. As I mentioned, the City of Austin and its municipally-owned
electric utility, Austin Energy, have been exploring the electric vehicle
industry in an effort to identify a possible supplier of battery-powered
vehicles for the City's fleet. Austin has two objectives in this endeavor: 1)
reducing atmospheric emissions from vehicle exhaust, and 2) substituting
electric power for petroleum. Over the coming years, Austin Energy will be
generating electricity increasingly from renewable sources such as wind. At the
same time, America is becoming more dependent on imported oil.
We have determined that a practical electric vehicle must have a range of at
least 100 miles per full battery charge, and performance comparable to
conventional internal combustion engines. The life cycle cost of an electric
vehicle would have to be comparable to that of gasoline-fueled vehicles, taking
into account total lifetime projected energy costs, maintenance costs, and also
factoring in the value of zero emissions for electric vehicles. With regard to
clean air value of EVs, the Texas Emissions Reduction Program currently provides
a subsidy for zero-emission vehicles.
We are delighted that Global Electric and Lithium House have a plan for
manufacturing battery-powered electric vehicles that meet these requirements
using the demonstrated capabilities of the lithium battery. We envision a
collaboration between the Austin Energy and Global Electric that would entail a
testing phase followed by a multi-vehicle demonstration phrase. During the
testing phase, Austin Energy would purchase a single battery-powered electric
vehicle from Global Electric for use in our vehicle fleet. We will work with
Global Electric to develop a monitoring program to measure and document
performance, maintenance and other essential data. These data would be used by
Global Electric to refine designs of future vehicles. Contingent on success
during the testing phrase, the City of Austin would purchase additional vehicles
from Global Electric. The number and price are to be determined following the
testing phase. Since these City of Austin vehicles will be clearly marked as
electric-powered, we expect the demonstration phase to attract considerable
public attention. Needless to say, growing awareness of practical electric
vehicles would accelerate the creation of a private sector market for EVs.
At this time, we can express interest in this plan, but Austin Energy can only
commit funds for the test phase following approval of our coming year's budget
by the Austin City Council in September. We are requesting funding for purchase
of an electric PT Cruiser using lithium batteries. If the City Council approves
this budget request, we would purchase the vehicle this October. It is my
understanding that Global Electric acknowledges that this agreement is
contingent upon approval by the Austin City Council in September. In the
meantime, Global Electric will proceed with the test phase of the plan.
Please call me if you have any questions. We look forward to working with Global
Electric and Lithium House to demonstrate the value of electric-powered
transportation.
Sincerely,
/s/ Mark Kapner
Mark Kapner
Senior Strategy Planner