Why Small Business Owners Are Switching to Alternative-Fuel Vehicles

From the October 2012 issue of Entrepreneur

According to the U.S. Energy Information Administration, the number of alternative-fuel vehicles (AFVs) on the road increased from 534,000 in 2003 to almost 940,000 in 2010, the most recent figure available. Sales of hybrid and electric cars should nearly triple by 2017, when federal mandates for higher-efficiency vehicles kick in, says John Gartner, director of Pike Research's Smart Transportation practice. 

From an enviromental perspective, this is a very good thing. But for business owners, the real news behind the numbers is that AFVs are finally starting to make economic sense. Here's a collection of six entrepreneurs and their motives for making the switch to AFVs. 

2012 Tesla Model S

Electric avenue: Bill Lee and his Tesla S.

Image credit: Eva Kolenko

'Trep: Bill Lee, San Francisco-based angel investor and co-founder of Remarq, an internet messaging platform.

Ride: 2012 Tesla Model S, the $97,900 Founder Signature Performance Edition of the luxury electric sedan.

Brag-worthy: Zero to 60 mph in 4.4 seconds; 265-mile range on a single charge; touchscreen dashboard.

Motive: Standing out. Lee says Silicon Valley loves and respects innovation, and his reputation gets a boost from driving the sixth Tesla S to come off the line. A recent tweet: "Driving model s thru silicon valley and ppl are cheering at stoplights."

2012 Kenworth T660

Company: SunRidge Farms in Royal Oaks, Calif., makers of "sustainably sourced" snacks.

Fleet: Three 2004 Honda Civic Hybrids; one 2006 Honda Civic Hybrid; two 2010 Honda Civic Hybrids; two 2006 Toyota Highlander Hybrids; one 2009 Toyota Highlander Hybrid; two 2012 Kenworth T660 trucks (pictured above), with selective catalytic-reduction feature that achieves near-zero emissions; and one 2008 low-emission International truck.

Brag-worthy: Thirty-three percent fuel savings help support other company initiatives such as recycling classes, a $5-for-biking-to-work program and a facility that's 70 percent solar-powered at peak usage hours.

Motive: Going green. SunRidge Farms jumped on the alternative-fuel trend in 2004 as part of an overall sustainable-business strategy. The sales team's vehicles are gradually being replaced with hybrids; three low-emission trucks are used for weekly delivery runs to Los Angeles. In total, 20 percent of the fleet runs on biodiesel.

2012 Toyota Prius Plug-in Hybrid

'Trep: Scot Richardson, founder and CEO of socially driven ticket platform TicketMob in Los Angeles.

Ride: 2012 Toyota Prius Plug-in Hybrid, a $32,000 midsize hatchback with an mpg equivalent of 95, plus an 11-mile charge range.

Brag-worthy: The plug-in goes faster and runs longer than conventional hybrids--and if you do only city driving, you may not need gas at all.

Motive: Street cred for his company. "More consumers want to deal with socially responsible businesses, and this is a part of it," he says.

2010 Honda FCX Clarity FCEV

Cruisin': Scott Tucker in his Honda FCX Clarity.

Image credit: Jeff Clark

'Trep: Scott Tucker, co-founder of RST & Associates, a Los Angeles-based property management company.

Ride: 2010 Honda FCX Clarity FCEV, a hydrogen fuel-cell electric vehicle (a hydrogen tank stores hydrogen, which is combined with oxygen to make electricity that powers the motor). Driving range is 240 miles (at 60 miles per kg).

Brag-worthy: Zero emissions; only about 200 of the vehicles on the road.

Motive: Savings of time and money. Tucker and business partner Irma Vargas were early adopters of Honda's natural-gas Civic GXs, buying their first in 2005 to take advantage of carpool-lane access, free parking and tax credits. Six employees have since made the switch, after Tucker and Vargas began buying a new GX every year or so and selling them to the staff at a deeply discounted rate of around $10,000. In 2010, Honda offered Tucker the opportunity to lease the FCX Clarity--one of the first 25 fuel-cell vehicles available in the country--for $600 per month.

2012 Infiniti M35h

'Trep: Paul Goldman, founder and CEO of JuicedHybrid, an online store based in Redwood City, Calif., that sells accessories for hybrid cars.

Ride: 2012 Infiniti M35h, a $54,595 luxury hybrid performance sedan with 27 mpg city and 32 mpg highway.

Brag-worthy: Set a world record in August 2011 for the world's fastest quarter mile by a hybrid car (13.9 seconds).

Motive: Market opportunity. Goldman saw a "huge trend" for business use--and a business for himself.

2012 Volkswagen Passat TDI SEL

Image credit: Motor Trend

'Trep: Lou Halperin, CEO of healthcare IT company OTTR Chronic Care Solutions in Omaha, Neb.

Ride: 2012 Volkswagen Passat TDI SEL, a $32,965 clean-diesel sedan that gets 43 mpg highway and up to 795 miles per tank.

Brag-worthy: 2012 Motor Trend Car of the Year.

Motive: A cheaper and more environmentally responsible commute.

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