Electric Bike Maker Turning in the Right Direction

Rancho Cucamonga resident Steven Gomez rises weekday mornings at 5 for a two-hour commute to Van Nuys.

Most of the ride is aboard a Metrolink train, but when he disembarks at the Van Nuys station, the 40-year-old design engineer hops on an electric bicycle. In 15 minutes, he’s at the doorstep of his employer, Currie Technologies Inc., with only a few beads of sweat on his brow.

“It saves me wear and tear on my person,” Gomez said of his commute.

Clearly, in car-crazy Los Angeles, there aren’t many electric bike commuters like Gomez. And since he works for Currie Technologies, a developer of electric bikes, it may be a stretch to call him the harbinger of a trend. But Currie Technologies believes what’s working for Gomez will work for others--if they’ll try it.

So this year, the company that’s focused exclusively on developing bikes is entering a new phase. The time is right, company execs said, to build consumer awareness and establish the Currie brand, especially among aging baby boomers who might appreciate how a zero-emission electric motor can ease the strain of tackling hills on a bike.

“We are transforming ourselves into a marketing company,” said Malcolm Currie, the 72-year-old onetime chairman of Hughes Aircraft Co. who founded the firm with partner Richard Mayer, a former Van Nuys High School auto shop teacher.

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It doesn’t hurt that electric bikes represent the confluence of two hot trends in consumer marketing. First, it’s one of the array of new products aimed at the 76 million Americans who make up the influential generation born between 1946 and 1964, now middle-age, but maintaining their characteristic youthful attitude. Plus, there’s the public’s stated interest in aiding the environment.

But that said, creating a market represents a tough challenge for Currie Technologies. “The public doesn’t know it needs an electric bike,” acknowledged Currie, who was undersecretary of Defense in the Nixon and Ford administrations.

The tiny firm has operated on a relative shoestring, on total funding of $3 million. So far, it’s sold between 5,000 and 6,000 electric bikes in the U.S., chiefly its U.S. Pro Drive mountain bikes, without benefit of an advertising campaign.

This year, the company anticipates selling 20,000 units. Part of this is because it has expanded its product line: Currie Technologies now sells a folding bike, a cruiser bike, a tricycle and a foot scooter. Each uses two 12-volt, recyclable lead acid batteries mounted on the frame that can go for 20 miles on level ground before recharging. (Recharging takes six to eight hours with a standard charger that comes with the bike.)

In October, entrepreneur David Noland put up $100,000 to open a shop in Oceanside selling electric bikes exclusively.

Noland said that about 20 people a day stroll through his 3,500-square-foot Millennial Motors, and that Currie’s U.S. Pro Drive is the No. 1 seller.

Still, Currie Technologies has a long way to go. It is establishing a marketing department and plans to hire five to six sales and marketing pros within two to three months.

But as Currie moves forward, it faces new, formidable competition: Ford Motor Co. announced recently that it is entering the electric bike business with models selling for $1,000 and $1,200. The bikes will be sold in bike shops, Ford dealerships and on the Internet, starting in June.

Strangely enough, Currie is greeting Ford’s arrival with glee, not trepidation.

“I love competition,” Currie said. “This is a new industry. It needs exposure.”

In 1999, privately held Currie Technologies had annual sales of about $1.5 million. The company is breaking even, the result of careful cost controls, according to Currie, who doesn’t draw a salary. Currie projects the company will become profitable this year.

Currie Technologies’ 11 casually attired employees operate out of 4,000-square-foot offices in an industrial section of Van Nuys. There’s a fully equipped machine shop inside, but no corporate accouterments, such as art on the walls, or fancy desks.

No one--not even Currie--has a secretary.

“We all have Microsoft Word and spell-check,” said Mayer, when asked about the absence of clerical assistance.

It’s a huge contrast for Currie from his corporate days. As chairman of Hughes, Currie had 85,000 employees, plus loads of perks, such as access to a corporate Gulf Stream. Now he flies economy.

“I had platoons of lawyers, secretaries, financial people. I didn’t have to do anything,” he said. “If I needed another $100 million line of credit, I’d just call the Bank of America.”

But when Currie reached mandatory retirement age at 65 in 1992, he was out. Currie, however, had no plans to toddle off to a golf course. Already fascinated by electric vehicles while at Hughes, Currie became a first-time entrepreneur.

“It started out as a hobby, but it’s grown,” he said, adding that he is driven by the desire to make a contribution.

In the mid-90s, Currie joined flamboyant auto entrepreneur Malcolm Bricklin (he brought America the Yugo) as a partner in Electric Bicycle Co. Started at the Burbank-based incubator of Calstart (now Weststart/Calstart), the company marketed the EV Warrior electric bike through auto dealerships.

By 1997, the company was bankrupt, but the failure didn’t deter Currie’s faith in electric bikes.

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During his time with the company, Currie had become acquainted with Mayer, a dedicated environmentalist.

“I want my 13-year-old son to have clean air when he grows up,” said Mayer, a Valencia resident.

Mayer’s day job was teaching, but he also had a side venture, Electric Car Co. of America, which built environmentally correct autos, selling at $15,000 to $20,000. In their off hours, Mayer and Currie began building a hybrid electric truck.

Currie knew electric autos would be too great a challenge.

“I concluded the capital would be very, very high, and it was premature from a marketing point of view,” Currie said. But electric bikes? Start-up costs wouldn’t be so much, and the two were willing to gamble that the public might respond.

So Currie and Mayer put in some of their own money and secured $500,000 in venture capital to start Currie Technologies.

Part of Currie Technologies’ backing comes from Schwinn/GT, the Boulder, Colo.-based company whose brand resonates with baby boomers. Around six months ago, Schwinn/GT took a 9% to 10% stake. That interest could grow to a 15% share, according to the agreement.

“There’s clearly going to be a market out there [for electric bikes],” said Schwinn/GT President and Chief Executive Tom Mason.

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Currie Technologies’ strategy is simple: The company wants to offer a high-quality electric bike at affordable prices--in the $500 to $700 range--below the price tag of some rivals.

Currie’s publicity materials say Malcolm Currie aspires to be the Henry Ford of electric bikes. The company’s approach is to sell well-engineered, utilitarian electric bikes at prices suitable for mass acceptance. Currie bikes are selling at bike dealers and Sports Chalet, but also at selected Sam’s Clubs and Kmarts.

“The Currie system is simple, sturdy. It has excellent performance and it’s designed to do those things at minimal cost,” said Ed Benjamin, an analyst who operates an electric bicycle consulting firm based in Pocatello, Idaho. “Comparing the Currie bike to the Model T is pretty sensible.”

Currie Technologies isn’t alone in its belief in the potential of electric bikes in the U.S. Despite modest sales totals to date, there are many companies in the field. Key U.S. firms include Zapworld.com (formerly Zap Power Systems) of Sebastopol in Northern California, the North America unit volume leader; and EV Global Motors, the company led by former Chrysler Corp. Chairman Lee Iacocca, based in Westwood.

Electric Transportation Co., based in Santa Barbara, also competes in the niche.

The U.S. is several years behind international markets, where 90% of the electric bicycle sales currently take place. Industry consultant Benjamin estimates there were 500,000 unit sales of electric bikes worldwide in 1999, 450,000 outside the U.S.

Some of the biggest names in transportation, such as Honda, DaimlerChrysler and Yamaha, compete around the globe successfully, particularly in Asia and Europe.

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Currie recognizes the vast potential for business overseas, but for now, Currie Technologies is focusing on the American market.

Benjamin believes the U.S. public may respond because of product improvements.

“1999 was the first year the American consumer had models worth calling a real product,” he said.