by Dan Emerson, Finance and Commerce, May 27,2011
Co-owner swore off the ‘combustion vehicle’
As many economists have noted, rising fuel prices are a major drag on the economy. But they have had the opposite effect for at least one south Minneapolis business, ReGo Electric Conversions.
Since launching ReGo last August, owners Shayna Berkowitz and Alex Danovitch have seen growing demand for their service: converting existing hybrid (gas and electric) vehicles into plug-in hybrid electrics.
They began by converting Toyota Priuses and have recently acquired technology for converting Toyota Highlander, Ford Fusion and Ford Escape hybrids to plug-in electrics. So far, they have converted about 35 cars locally and 20 more at their affiliated shop in Madison, Wis.
Their customers have included Mayor R.T. Rybak of Minneapolis and Great River Energy.
Berkowitz and Danovitch have worked for a number of environmental and other community groups; Danovitch was a founder of Minneapolis-based Eureka Recycling.
Several years ago, Berkowitz says, she “vowed I wasn’t going to drive a combustion vehicle any longer.” She decided to start the company after failing to find a local company that could convert her Toyota RAV4 to an electric car.
The partners spent about two years talking to experts around the country to find the right technology, networking with their contacts in the green sector, and putting together a team of engineers.
They settled on using the same battery technology as the Nissan Leaf and Chevrolet Volt, which has emerged as the industry’s front-runner, says Berkowitz, a former Minneapolis Public Schools teacher. For startup capital, they say they raised a “significant” six-figure investment from friends and family.
ReGo installs a lithium ion battery pack and charging system in the rear compartment of each car. The pack feeds additional electric energy into the car’s original battery pack, allowing the car to use more electricity and less gasoline. The conversion costs $5,000, with a 10 percent federal tax credit.
ReGo uses technology from manufacturers in Michigan, Florida, California, Seattle and China “to assemble the most reliable and cost effective system” for Minnesota’s climate, Danovitch said. The company adds its own improvements, such as insulation and heating, to keep the batteries warm in winter.
According to ReGo’s founders, the system will increase fuel economy 40 percent to 100 percent in the city and 20 percent to 40 percent on the highway. In mild weather, the average commuter who drives 20 to 40 miles per day will get 60 to 85 miles per gallon, Berkowitz said.
Along with reducing carbon emissions, the owners point out that a ReGo conversion saves the environmental impact of manufacturing a new car; 20 percent of a car’s total lifetime emissions are produced during its manufacture.
While saving on fuel costs is appealing, “financial payback is not a compelling reason to do this,” Danovitch says. “It may not be right for everybody. We talk about payback in a much broader sense – reducing carbon emissions. The reason we’re doing this is the environmental impact of the internal combustion engine and health-related issues.”
The technology is not 100 percent glitch-free, as customers N. Jeanne Burns and Liz Oppenheimer discovered after ReGo converted their 2007 Prius.
“We had the charging unit die on us twice, and it didn’t work as well as promised when I picked up the car,” Burns said, citing a problem with the charger made by one of ReGo’s suppliers. “But we really like it now that we’ve gotten used to it and the charger has been upgraded.”
ReGo has been operating in leased space in a south Minneapolis auto repair shop. At the end of the month, the business will double its space by moving into a 1,650-square-foot space on the property of Dan’s Nicollet Car Wash, 5925 Nicollet Ave.
With four installers, ReGo has about a two-week backlog of customers waiting to convert. Customers can drop their cars off and pick them up the next day.
Berkowitz and Danowitz haven’t put much effort into marketing, relying mostly on customer word-of-mouth. But they plan to ramp up efforts this year and are in the process of recruiting a chief executive officer.
The partners want to continue increasing their local customer base and then consider expanding to other regions. “In the first few years we did a lot of product development; now we’re moving into the next phase of growth,” Berkowitz said. “This technology will continue to improve over time. It’s really a growing market, and we’re right on the cutting edge.”
Eventually, Berkowitz would like to keep improving the technology so it can convert cars to 100 percent electricity.
One of their business partners is Madison, Wis., green entrepreneur Eric Powers, the event manager for the national Green Drive Expo. The alternative-energy vehicle trade show is held each July in Madison and every September in California.
ReGo has “done more conversions than just about anybody in the country,” Powers said. “They have some really bright people working with them who really know how to assess these units and make sure they are running properly. The fact that they’re in the Midwest makes it even more exciting because it seems that we’re always the last to get this kind of technology. It’s fun to be on the leading edge of things.”
ReGo Electric Conversions
- Address: 5925 Nicollet Ave., Minneapolis. ReGo is moving into a 1,650-square-foot space at Dan’s Nicollet Car Wash after operating at 3920 Nicollet Ave.
- Website: regoelectric.com
- Service: Converting hybrid vehicles into plug-in hybrid electrics
- Customers: local car owners and commercial fleets
- Founded: 2008; launched in August 2010
- Owners: Shayna Berkowitz and Alex Danovitch
- Employees: seven
- Latest annual revenue: $500,000 projected for first year