Stuart McGinnis displays the low-speed models at South Jersey Electric Vehicles. The National Highway Traffic Safety Administration requires low-speed vehicles to have headlights, tail lights, brake lights, turn signals, mirrors, parking brakes, windshields, safety belts and vehicle identification numbers — even though they only go as fast as 25 mph.

By KEVIN POST, Press of A.C. Business Editor | Sunday, July 4, 2010

A strong market is emerging for small electric-powered vehicles and southern New Jersey — with its barrier island communities and many campgrounds — is an early adopter of them.

Called low-speed vehicles, or LSVs, they look like beefed-up golf carts, from which they evolved in the past decade.

But LSVs have enough federally required equipment that they’re made for their specific purpose: Driving no faster than 25 mph, mainly on municipally approved roads with 25 mph speed limits, but in some circumstances on roads with limits as high as 35 mph in New Jersey and most states.

Their appeal is that they’re efficient and cheap to operate: They cost less than a car and can drive 40 miles on 20 cents worth of electricity.

Governments at all levels are starting to embrace LSVs for their negligible pollution and low operating costs. Island municipalities in the region have approved them for use and people are driving them around shore towns such as Ocean City.

In 2002, only a fourth of states allowed LSVs — and now 46 do. The U.S. Department of Energy estimates there were 40,000 on U.S. roads in 2008.

Low-speed vehicles are headed for much wider use if they can get past one substantial speed bump: They would have to be considered safe enough to share roads with much larger cars and trucks.

LSV evolution

Low-speed vehicles and the market for them have evolved over a few decades, and South Jersey Electric Vehicles, of Egg Harbor Township, has been a part of that transformative growth.

While the company’s name suggests a recent startup to take advantage of green-energy trends, Stuart McGinnis, 53, started South Jersey Electric Vehicles in 1980.

Back then, the business was all golf carts, McGinnis said, first servicing them at area golf courses and then selling and leasing them to country clubs as well.

When the golf market got saturated, McGinnis diversified in a way that laid the foundation for the low-speed vehicles of today – branching out into the region’s large campground market more than 20 years ago.

“I took the golf-bag racks off and put on utility boxes, making them like little pickup trucks,” he said. The quiet and inexpensive carts were used for campground oversight, maintenance and housekeeping.

Then McGinnis, who also lives in Egg Harbor Township, put rear seats on carts so owners could give prospective customers tours of parks. At that point, he said, some campgrounds started renting such carts to campers for their own use getting around.

Seasonal campers especially started buying their own carts and customizing them. McGinnis said golf carts tricked out to look like a Mustang and a Rolls-Royce were among special orders made by South Jersey Electric Vehicles.

While the campground market was leveling out like the golf market before it, gasoline prices were rising and interest was growing in vehicles that provided clean, cheap alternatives.

In 2006, New Jersey joined the national trend of authorizing low-speed vehicles and opened a new market for South Jersey Electric Vehicles.

Carts no more

Under state law, LSVs can’t be modified golf carts, and federal requirements make that impractical anyway.

The National Highway Traffic Safety Administration requires LSVs to have: headlights, tail lights, brake lights, turn signals, mirrors, parking brakes, windshields, safety belts and vehicle identification numbers.

New Jersey requires operators of LSVs to carry automobile insurance coverage of $15,000 to $30,000 for bodily injury and $5,000 for property damage.

McGinnis said the Columbia models he sells, made by the Electric Car Company of Long Beach, Calif., go beyond the basic requirements with features such as hydraulic brakes and safety glass.

Models range from a two-seater costing $10,000 to a “nicely equipped” four-passenger LSV with disc brakes for $14,000, he said.

John Yarrington, who lives in Elmer, Salem County, and has a summer house in Ocean City, got his first look at his new Columbia four-passenger LSV on Thursday, which is red with tan seats and four-wheel brakes.

“I think it’s going to be good over here,” Yarrington said from Ocean City. “We’re in the north end and anticipate going to the beach and downtown to shop, wherever a regular vehicle is used but this should be easier because its smaller and more environmentally friendly.”

He said he has several friends in town who already own LSVs, one of whom drove 1,500 miles in one season.

He said having an LSV at the shore will allow him and his wife to each have a vehicle on the island without having to drive down from Elmer separately.

“They’re fun to drive, a good summer vehicle,” Yarrington said. “Now I just have to figure out a rack system so I can put my beach chair on the back.”

LSVs are also available configured as small trucks, with pickup, van or dump-truck bodies, and they cost $18,000 to $20,000, he said.

Two shore municipalities have recently purchased truck-style LSVs to reduce the cost and environmental impact of light work.

“Wildwood bought one (in May) with a pickup body for its Public Works Department and North Wildwood bought one (last fall) with a van body,” McGinnis said. “They use it for their parking meter collections and installations. They used to send a dump truck that was burning diesel fuel for that job.”

The federal government encourages LSV purchases with 10 percent tax credits of up to $2,500.

McGinnis said the state waives the sales tax as an incentive and doesn’t require vehicle inspections.

Last year, the federal government ordered 800 LSVs from Columbia and then another 200, mainly for use at military facilities nationwide, he said.

And this week, the Federal Aviation Administration’s William J. Hughes Technical Facility in Egg Harbor Township started receiving 13 LSVs under a federal contract. McGinnis said that as the local supporting dealer, he is prepping the vehicles as they arrive.

The low-speed-vehicle market seems to have reached the critical mass and momentum to make them a common alternative for personal transportation.

The final component of their success – widespread public acceptance – may hinge on whether they are viewed as safe enough.

The safety issue

The insurance industry doesn’t think LSVs are safe, especially on any roads with speed limits higher than 25 mph.

The industry’s Insurance Institute for Highway Safety says the growing use of LSVs is a disturbing trend that goes against 40 years of work by government, automakers and insurers to reduce the risks of injuries and fatalities on the nation’s roadways.

The institute, famous for its crash tests of vehicles, reported in May that it had given an LSV two crash tests at 31 mph and found they would have resulted in “severe or fatal injury” to occupants.

The institute suggested that people and agencies seeking greener vehicles choose full-featured hybrid cars and trucks instead.

McGinnis said he hadn’t heard of any accidents in the region involving an LSV.

“A tragedy can happen and it’s a shame when it happens, but I think driving an LSV is much safer than being on a moped or motorcycle,” he said.

Motorcycles, after all, go 60 mph and faster, “so at least we’re starting on low-speed roads,” he said, with motors designed to keep the LSV at 25 mph or less.

Another safety factor in LSVs’ favor is that where they operate is controlled by municipalities, which can rule out busy and potentially dangerous roads such as West Avenue in Ocean City.

McGinnis said Egg Harbor Township decided against allowing LSVs on its roads, which he said was probably wise since the township is crisscrossed with many busy through streets.

The island communities, though, are self-contained with limited through streets, making them suitable for this environmentally friendly form of transportation, he said.

Every oceanfront municipality from Cape May to Ocean City has allowed LSVs, he said.

That’s where South Jersey Electric Vehicles — which had gross sales of about $1 million in 2009 — sees its current market, and where the region will see what role LSVs will play in transportation.