Green Pioneer: Lord Borwick

The Sunday Times
March 8, 2009
The Old Etonian who turned the white van green has big plans for expansion

IF things are grim for the motor industry in general, they are worse for vanmakers, who have been hit by falling retail sales and a slump in demand for goods vehicles.
But as Birmingham-based LDV, the commercial-vehicle company, faces closure, another producer of delivery vans a few miles down the road in Coventry is looking forward to a year of profit and expansion.
Admittedly, Modec occupies a niche market — it specialises in small vans that can be used in city centres for deliveries to shops and supermarkets as well as for courier services. Because they are battery powered, they are low polluting and cheap to run. Modec says its vans cost 15p a mile compared with a typical conventional van, which costs about 37p per mile.
The results speak for themselves. This year Modec is opening an American joint venture to sell electric vans in the Mid-West and predicts that here in Britain it will go into profit for the first time.
The firm employs 80 workers but this will rise as manufacturing is ramped up.
“Last year we made more than 100 electric vans. This year we are set to produce 400,” said its founder, Lord Borwick. In 2010 he expects to sell 1,200.
Electric vans come into their own for city-centre deliveries of light goods. In long-distance runs the advantage disappears because of the need for recharging.
But Borwick plays to his vehicles’ strengths and never tries to pretend they are all-rounders. “There are many vehicles in the delivery business in London that never go out of the city, so there is a market for an electric local-delivery vehicle,” he said.
The company’s first customer, in 2005, was Tesco, which bought 15 vans in a deal worth £450,000. Today, it is producing vehicles for the likes of express-delivery firms UPS and Fedex, which between them have ordered more than 20 vans at about £30,000 each.
The genesis of Modec can be traced back to Borwick’s time as chief executive — and later chairman — of Manganese Bronze, which makes London black cabs. During his time at the helm the company investigated making a green taxi.
“I tried to make a zero-emission taxi but it didn’t work,” said Borwick. “Taxi drivers have got wealthy and have moved out to the countryside. Most of them commute 50 miles before they switch their lights on.”
And even if taxis had a shorter daily journey, London cabs have limitations on their size because they need a tight turning circle, yet they also need space for passengers and luggage. “If you have a tonne of battery, you’ve not got much room for anything else,” said Borwick.
Undeterred, when he left Manganese Bronze in 2003 he set to work planning his next venture. “We realised we could, instead, make a zero-emission commercial vehicle,” he said.
The following year he started up Modec. Last year the company reported a turnover of about £4m.
Educated at Eton, Borwick inherited his title last year from an uncle. Besides his role at Modec, he is deputy chairman of the British Lung Foundation and chairman of Route2mobility, which funds wheelchairs and scooters for disabled people. He ploughed £30m of his own money into Modec at the initial stages.
Borwick is planning further expansion as the trend for clean vehicles gathers pace. “Everybody worldwide is interested in low emissions,” he said. “Of the last 100 vehicles we’ve sold, every single one has gone abroad. We think the market in Europe overall could be about 300,000 vehicles a year.”
The American market excites him most. “When I started the business I was sure that America wouldn’t be interested in Modec, but I was totally wrong,” he said. “I am now sure the American market will be our biggest. We’ve received a lot of interest there.”
He has already arranged to set up a plant in the American Mid-West with a joint-venture partner. It should be operational later this year. He believes America will become the company’s largest market by 2010.
A key to further success and the uptake of electric vehicles on a wider scale will be better battery technology. Although hugely improved from a few years ago, batteries still lack the range and power to run everyday vehicles.
Modec’s vans are sold separately to the lithium-ion battery pack (which is leased to buyers) and must be charged overnight (a full charge costs £5).
Borwick hopes that as technology improves, owners of his vans will be able to upgrade their battery pack for a better version. “In five years, the van you bought today could have a 200-mile range,” he said.
One of his motivations for starting the business was financial reward, but the green entrepreneur in him also gets a buzz from the knowledge that he is helping to reduce pollution. The company claims that even when run on electricity generated from traditional coal-power stations, its vans are still far cleaner than any diesel equivalent. Using green electricity from renewable sources means the vans can have a zero-emission delivery system. A Modec van could save nine tonnes of carbon dioxide a year by replacing a diesel vehicle.
And by locating Modec in Coventry, Borwick has already given a boost to the flagging West Midlands automotive industry.