"Plug-In Conversion Kit for Priuses Proves a Hot Commodity Despite Frigid Economy" Green Car Advisor

Plug-In Conversion Kit for Priuses Proves a Hot Commodity Despite Frigid Economy

Despite a cool reception by Toyota to the whole idea of modifying the popular hybrid, Westboro Toyota's Website boldly announces that the dealer offers A123 Systems' plug-in conversion kits for Priuses.

By Scott Doggett, Contributor

Doesn't matter that Wall Street is spiking like an EKG and the global economy teeters on the brink of a magnitude-9 collapse.

A123 Systems' plug-in conversion kits for Toyota Priuses are finally available, and droves of Prius owners can't hardly wait to plunk down $10,000-plus for the mileage-extending product.

"It's like someone's opened the floodgates," said Susan Fahnestock, general manager of The Green Car Company in Bellevue, Washington.

That garage, a few others and three Toyota dealerships scattered across the U.S. had been in talks with A123 Systems earlier this year about installing the gray battery pack stuffed with lithium-ion cells into Toyota's popular hybrid.

But a number of issues remained to be settled, including who would assume liability if, say, one of the kits -- which can more than double the roughly 48 mile-per-gallon range of a Prius -- converted an otherwise harmless gas-sipper into an improvised explosive device.

And then there was the profit-motive issue. Most of the installers complained that they only stood to make a couple hundred dollars per five-hour install. Forty bucks an hour might sound fine to you, but the hourly rate for hybrid mechanics right now is $92 plus change.

Oh, but how things have changed.

A123 Systems now warranties the kit -- as well as any damage that might result from it -- for three years. And as for the profit-motive, A123 gets $9,600 and the installer $795 (or $159 an hour!) per kit.

As for demand, supply cannot keep up with it. Since A123 Systems began delivering kits to installers six weeks ago, The Green Car Company has installed no fewer than 50 of them, Fahnestock said.

She said A123 Systems is holding at least five hundred $1,000 deposits for the kits -- Green Car Advisor has heard from a reliable source that the number of deposits is closer to one thousand -- and a good chunk of them are from people in the Pacific Northwest, which Fahnestock's garage serves.

In addition to the deposits A123 Systems is holding, Fahnestock said that she has taken deposits from 35 people who either own Priuses or are on the waiting list for one. (Yes, there are waiting lists both for the hybrid and for the mileage-boosting kit.)

The demand is no less impressive in Northern California, which A123 Systems serves through Pat's Garage in San Francisco.

Augie Barone, the shop's amiable service manager, says Pat's has installed "dozens" of the kits in the past few weeks.

He says there's a long list of people waiting for the kits and as soon as an order comes in, he gives some of those people a call and schedules the installations. Barone says his shop is able to install kits as soon as they arrive -- none is around long enough to collect dust.

What also impresses him is how seamless the units are to install, as if they were made for the vehicles by Toyota.

He said he's seen quite a few plug-in conversion kits -- San Fransicso is only 40 minutes from the heart of Silicon Valley when the 101 Freeway is clear -- and some resemble "a mad scientist's lab, with wires everywhere." Not A123 Systems' kits, though.

The Revenge Factor

Unlike the independent garages, the Toyota dealerships had a third issue to contend with: They had reason to fear that the automaker would frown upon dealers who sold the kits. That's because Toyota might offer a plug-in hybrid of its own in a few years and presumably wouldn't appreciate the competing product from A123 Systems.

All Toyota dealerships in the U.S. are independently owned and operated, but all operate under franchise agreements that bind them to Toyota. If the carmaker wanted, it could be very slow to deliver popular models to a dealership that offended it by selling an outsider's plug-in convesion kit.

Although Toyota spokesmen have told us that they gave dealers no cause for concern, cautioning them only to make sure they did nothing by installing a conversion kit that would invalidate the Prius' warranty, that's not what the dealers have told us.

Denny Hecker's Toyota of Inver Grove, Minnesota, offers the A123 Systems kits to its Prius custoimers but, fearful of harming its relationship with Toyota, the dealershiop won't do the installations.

Instead, it sends its Prius customers and their newly purchased plug-in kits down the street, to Denny Hecker's Volkswagen.

Shelley Peterson, service director for the VW dealership, said her service center has done 16 installations in three months -- triple the number she'd expected, given the moribund state of the economy.

Some of the customers are so excited about their kits that they hover over the mechanics throughout the installation process, Peterson said.

Including tax and installation, each kit costs its owner $11,050, she said, and so far there's no shortage of people willing to buy them.

Part of the reason for that is that if a customer decides when buying a new Prius to get the conversion kit, the dealership will include the cost in the vehicle's financing. The buyer needn't pay more than a fraction of the cost of the kit outright, but instead can spread the cost across many monthly payments.

Putting It Out There

Westboro Toyota, in Westboro, Mass., is one of the two other dealers offering installations of the A123 kit. It's on the small side as Toyota dealerships go, but its owners take a great deal of pride in the fact that they've been proponents of plug-in conversions for a long time.

Indeed, for several years they've allowed A123 Systems -- located in Watertown, 27 miles away -- to demonstrate its kits at the dealership at no charge. Westboro Toyota also was sponsoring high-mileage motoring competitions long before the events became popular.

Unfortunately, only one of the two brothers who own Westboro Toyota is comfortable speaking to reporters, and he was vacationing when we called to see if, perhaps, they also owned a VW dealership and were having the installations done there. You know, out of fear of hurting their relationship with Toyota.

Their Website answered that question, though. Right on the home page, just beneath the name of the dealership, appears an advertisement for the kit.

The third dealer that offers the plug-in conversion kit is Jack Fitzgerald, a veteran car salesman who owns a whole bunch of dealerships in various states.

He was unavailable for comment for this article, but he had previously told us that he's unhappy with the notion that "all of us go like little lambs to our gas stations and kneel at the foot of the oil producers."

If the kits would help reduce America's dependency on foreign oil, he said, he'd sell them even if he didn't make a nickel.

We salute you, Jack. And A123 Systems, keep up the good work.