The selling of the green - Trade Only Today

The selling of the green

Author:
Publish date:
Social count:
0
German outboard maker Toqeedo is celebrating its 10th anniversary this year.

German outboard maker Toqeedo is celebrating its 10th anniversary this year.

New technology has made cleaner, more efficient boats and engines more available than ever before, but some manufacturers say educating the American boater about cleaner alternatives can feel like an uphill battle.

Just as the first hybrid cars met with bewilderment — and, let‘s face it, outright skepticism — from American consumers, the companies behind the boating industry’s equivalents have faced challenges getting their message out.

“It’s a slow acceptance process,” says Larry Russo of New England-based Russo Marine, who took on the Slovenia-based Greenline brand two years ago after seeing a Soundings Trade Only report about it. “They love the boat. They respect the technology. They even respect the price. Then they pause and want to consider a competitive alternative, and there are none. So our sense is that the consumer goes into a non-action mode. There’s apprehension about accepting the technology because Greenline is the only active builder of this technology. Consumers are smart. They think, ‘If this is so damn good, why aren’t other companies installing these technological advancements in their boats?’ Those are valid questions.”

Grappling with exposure

Falling gasoline prices have not been a hurdle for the hybrid and electric propulsion industry, says Steve Trkla, president and general manager of Torqeedo’s North American division. Rather, the technology is just catching up with traditional combustion engines in capabilities, and it all comes at a price.

And educating Americans about the possibilities has been more challenging than the Greenline folks anticipated, says Constantinos K. Constantinou, who heads up marketing for Greenline North America.

“It’s been, for us, a great couple of years so far in the United States,” Constantinou says. “We’ve had an incredible number of people coming to see the boats and a wonderful enthusiasm by which the boats have been received. That said, it hasn’t translated into purchasing behavior at the speed we would have wanted. We have happy boat owners — the ones who have purchased boats. But to be honest with you, we expected a bit of a faster adoption rate than we received from the market.”

Greenline is the first company to use serialized diesel-electric hybrid propulsion for boats in volume production in a product that has been designed “from the ground up not just to offer electric hybrid propulsion, but functionality on board that leverages that to the fullest extent,” he says.

Blue Gas Marine is a pioneer in the use of natural gas as a marine fuel.

Blue Gas Marine is a pioneer in the use of natural gas as a marine fuel.

Part of the learning curve has to take into account that this is brand-new technology, Constantinou says.

“It’s just a matter of time. The first hybrid vehicle offered in the United States totally felt ahead of its time. Take the Prius as an example. It was at the fringe of the market. What made it a player was the arrival of others in the marketplace. Toyota benefited greatly from that. Other players entering validated that specific market. In our case, we’re still really pioneering all of that.”

Russo agrees that the brand needs more exposure, which is why he footed the bill to send his Greenline 48 to the Feb. 12-16 Miami International Boat Show instead of keeping it in Boston. (It wouldn’t fit into the display at the Feb. 14-22 New England Boat Show.)

“We came to the conclusion that green technology and hybrid technology were not getting enough exposure,” Russo says. “So we thought, wouldn’t it be better to have the fabulous 48 Greenline sitting in front of the thousands of people who attend the Miami show? And then when they see it again, they’ll think, ‘Oh yeah, I saw this in Miami.’ It’s part of the acceptance process. It’s painful and it’s expensive, but it’s necessary.”

Last year Russo Marine had the 43 and 40 in its New England show display and the dealer plans to show the 40 this year. The 33 he has in stock is already sold.

 Its system involves an electronic fuel-injection unit that is added to the existing engine, high-pressure lines to carry the gas and gauges that monitor pressure. The system can also use propane and hydrogen.

Its system involves an electronic fuel-injection unit that is added to the existing engine, high-pressure lines to carry the gas and gauges that monitor pressure. The system can also use propane and hydrogen.

The cool factor

German company Torqeedo, which is celebrating its 10th anniversary this year, showcased its Deep Blue 80-hp electric outboard at the Miami International Boat Show on a KONA 17 designed by original Scarab designer Larry Smith.

Despite challenges, the company has seen at least 20 percent growth for every year it has been in business. “To see the company go from an unknown start-up, launching at IBEX at 2006, to see where we are today — we have sales offices in six countries and direct distribution points in 44 countries — that part has been exciting,” Trkla says.

That’s attributable, in part, to the fact that the company drives the technology issue more than the green message. “We want to let the public know we’re not just saving the environment — that’s just an extra bonus,” he says.

Advancements in technology and motor design allow the engines more capabilities in terms of speed and range.

As a result, the company is operating in the 40- to 80-hp space with its new Deep Blue technology, which is now also available as a 40/80 PS equivalent inboard, he said.

“Deep Blue 40 has an input power of 33 kilowatts and propulsive power equivalent to a 40-hp gas motor. It requires just one battery, minimum,” Trkla says. “Deep Blue 80 has an input power of 66kW and propulsive power equivalent to an 80-hp gas motor. It requires two batteries, minimum.”

That means the engines compete in the gas engine range of 40 to 120 hp, he says. The Deep Blue range is being expanded to include a hybrid drive system that is already in the design stage.

“What has been driving our success is, we are an engineering company on the edge of technology and we have set many standards and bars for electric boating in both motor and battery technologies,” Trkla says.

There are lots of reasons to buy hybrid boats, Constantinou says, but he is quick to add that he is not saying it is ever going to be a significant part of the overall market. For some buyers, it is about the green philosophy — what Trkla calls “the low-hanging fruit” — but for others it’s more about fuel costs or other comforts, such as silent propulsion and having no need for a generator at anchor.

Additional players

The space is attracting other builders, Trkla says. “It’s already happening. We’re already seeing other boatbuilders working on products or modifying existing products.”

Intrepid Powerboats, often regarded as a high-end, cutting-edge product, displayed a 32-foot center console at the Fort Lauderdale International Boat Show last fall with a natural gas/gasoline hybrid propulsion system developed by Blue Gas Marine.

“We can use any gas — hydrogen, propane and natural gas — to power any internal combustion engine,” Blue Gas Marine CEO and founder Miguel Guerreiro said in a statement announcing the move in September. “Natural gas is the most widely available gaseous fuel around the world, so we developed our technology specially for natural gas.”

Intrepid retrofitted a 2013 327 CC powered with twin Mercury 300-hp Verado 4-strokes. “I wanted to go through with this in the most challenging situation — and that would be taking an existing boat and adding the hybrid technology without removing or changing the existing fuel system,” Intrepid president Ken Clinton says. “It would be much easier to build a new one from scratch.”

The Intrepid can operate on natural gas or as a hybrid that carries natural gas and a traditional fuel, such as gasoline. The driver can switch between the two on demand and at any speed with the press of a button.

Blue Gas Marine is developing a network to distribute the natural gas fuel to boaters. The system consists of an electronic fuel injection unit for natural gas that is added to the existing engine; natural gas high-pressure lines; pressure gauges, safety devices and devices to control the flow of gas to the injection system; and a helm control that allows for switching between the two fuels.

Attracting new powerboaters

The technological advancements are helping to attract people for reasons other than being green, Constantinou says. “We like to believe that the product is attractive in and of itself. In other words, people would buy it even if it weren’t green,” he says.

Although about one-fifth of the people who buy Greenlines are attracted to their green nature, buyers are predominantly finding them attractive from a different perspective.

“It can run silently,” Constantinou says. “You can go somewhere and drop anchor and stay over the weekend and not have the noise and burn fuel to power the air conditioner, the entertainment center, and what have you because the boat functions independently. That’s a real life-changer, and I think people are looking at those virtues a lot more closely.”

The company is attracting a lot of aging sailors because the experience mirrors what they are used to, Constantinou says. Globally about 30 percent of Greenline buyers are lapsed or retired sailors.

“After a certain age they get tired and don’t want to have to deal with preparing boats to go out sailing, with the rigging and so forth. But they are still looking for the kind of peaceful experience sailboats offer to them. And generally speaking, sailors are more sensitive from an environmental standpoint, so we appeal to them from that perspective, too. They’ve aged out of sailing, but they want to enjoy a boat that they feel is environmentally responsible enough and they want the feeling of gliding through water and just hear water, not a motor.”

That message of being the first high-performance electric motor in serial production has resonated with younger buyers, Trkla says. “There certainly is a young class of buyers finding our product pretty cool. That’s a future market for us. Not just for Torqeedo —there are a lot of cool technological advancements. I do think that’s going to attract that younger boater.”

Constantinou says Greenline also sees a lot of families new to boating, with younger children gravitating to the boats. “The product seems to resonate incredibly well with them, versus what else is out there, for a number of reasons, some of which we’ve mentioned, but another is that the high bulwarks make it very safe for kids and pets to be on board. So there is a lot of inherent passenger safety built into the design. But just the whole concept seems to resonate with families getting into boating. We hear that all the time.”

Cost and horsepower

Another reason Torqeedo emphasizes the cool factor is because the company knows the product is expensive. “I’m getting the low-hanging fruit — people who want a green product — and people who have the income to buy something new and cool. We sell these on Lake Tahoe and Coeur d’Alene to people who want to make their Cobalt an electric boat. The problem is the higher-horsepower class, to become equal to the recreational boating experience that Americans do — let’s face it, except in pontoons, which have been a great space for us — Americans like to go fast. They like to zip across the lake.”

The 80-hp Deep Blue outboard propels the Larry Smith-designed sportboat to 40 mph, which “you couldn’t think about doing 10 years ago, and it’s still really cool. But my price is still high — $52,000 is a lot of money and the range is still relatively low,” Trkla says.

When a boater incurs about $6,000 a year in fuel costs, that’s basically the break-even point of his propulsion system.

“For recreational boating, the cost of such propulsion is still high comparatively and the range is still relatively low, but consumers are still finding the new technology appealing,” he says. “But there’s a whole new world of marine, as well, that fits us quite nicely that’s not quite recreational boating. Recreational boaters are the hardest customers to get to. When you’re apples to apples, electric boat to gas boat and pricing, we’re still not there yet, frankly.”

Torqeedo has made most of its inroads in the North American market with small commercial vessels, he says. The Deep Blue system has been applied to the Lone Star Ferry, which moves 80 people across Lake Travis in Texas; the Oklahoma water taxi system; and a water taxi in Ottawa. The company also works with Zodiac, doing military and harbor-style boats, Trkla says.

“The reason I say this is, this is where electric propulsion becomes really advantageous,” he says. “It’s quiet, clean, needs no fuel, there’s no smell, no gas. If you’re a commercial operator and spending $6,000 a year in fuel, our solution becomes actually less costly, between gas and maintenance. So in a lot of domestic markets we’re going after the commercial side.”

The company has found a market in places such as Jamaica and Thailand — that’s where all the old 2-stroke engines would turn up, Trkla says — as governments continue to invest in products for eco-fishing.

“The core government business is commercial fishing, and they’re still using these old gas combustion engines. The government in Jamaica and Thailand has actually subsidized fuel costs to support the industry. If you can meet the range and speed, and you’re protecting water and supporting governments who don’t have oil and have to pay to bring in gas, it makes sense for them. We can actually become cost-saving and take pressure off importing, plus we are protecting the fisheries and keeping the water safe.”

A finite resource

One of the recurring themes at Torqeedo is not gasoline prices, which haven’t seemed to move the consumer dial. It’s water as a resource. This is what has prompted Greenline and Torqeedo to see much faster adoption in European countries.

“If you look at countries like Germany, Austria, Switzerland, 70 percent of their lakes are green. It is different in Europe. They don’t have a choice. If you want to go fast, you have to have a system like ours.”

Trkla thinks Lake Tahoe in California will be one of the early U.S. lakes to have far-reaching green adoption, driven largely by people who don’t want to hear noisy combustion engines. But the reason that countries such as Germany are so much more careful is because if “you’ve got 80 million people in a country the size of Texas, you’ve got to protect the resources,” Trkla says. “Here, bodies like Lake Mead, Lake Lanier, all of these lakes are drinking reservoirs. That’s where we believe the pressure will come from, on the government side of things, to protect these resources. What we see as far as environmental issues is, it’s not the gas side of it. It’s the water side of it.”

Georgia, Alabama and Florida’s fight for the drinking water in Lake Lanier, north of Atlanta, got intense during a 2007 drought. In 2013 Georgia and Alabama’s fight over access to the Tennessee River, which feeds the lake, escalated.

Trkla points to these types of conflicts as issues that will continue to drive Torqeedo’s business.

“There will be 12 billion people by 2020 on the planet,” Trkla says. “There’s just not enough water on the planet to support them all. That’s where we grow.”

This article originally appeared in the March 2015 issue.

Related

NMMA: Bad trade policies are piling up

President Trump announced a new round of tariffs on China that would affect marine components being imported from there, further jeopardizing strong growth in the industry, said the National Marine Manufacturers Association.

Law symposium issues call for speakers

Following the success of the 2017 and 2018 ABYC Marine Law Symposiums on the East Coast, the American Boat and Yacht Council will host next year’s Marine Law Symposium in Seattle on Jan. 8.