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Bank exec forms electric-vehicle biz

June 18, 2007
Banker Steve Tolen is attempting to resuscitate the electric car. Tolen believes conditions are ripe for an upstart automaker to launch a safe battery-powered vehicle capable of rapid acceleration, highway speeds and over 100 miles of distance between charges. His startup company, Symphony Motors, aims to produce it within 18 months.

"We'll change the whole paradigm of how vehicles are manufactured, sold and serviced," Tolen said. "Indiana has a unique window of opportunity to become the center of the future electric car business. But the opportunity won't last long."

Electric cars have been a green dream for decades. Auto technology has finally improved to the point that an electric car's various components are all now available off the shelf, Tolen said. What's more, there's market demand for it. Drivers are frustrated over the rising price of gasoline, the environmental impact of vehicle emissions, and America's dependence on foreign oil producers.

Tolen wants to help calm their road rage by supplying $50,000 electric cars. His ambitious business plan calls for delivery of a prototype car by the end of the year, with production to begin by the end of 2008. Symphony Motors won't take much market share from Japan and Detroit. The company plans to make only a few hundred electric cars at first, with production levels rising to 3,400 by 2012.

"We don't need to sell a lot of vehicles to do very, very well," Tolen said.

Like most startups, Symphony Motors' ambitious business plan is a long shot, said Joseph Pekny, director of Purdue University's E-Enterprise Center. But sometimes, an upstart can drive change in an area that established industry has neglected. And Symphony Motors won't have to replicate the big car companies to be successful.

"I assume these guys' business model is to get a toehold, show there's a market, and get bought out. All they have to do is show there's a niche of viability and then it's a way for Ford or GM to get into it quick," Pekny said. "If they can show a niche with a market, they'll get bought up. I'd be shocked that anybody who can raise $40 million wouldn't be thinking like that."

Tolen is best known as the founder of Carmel-based Symphony Bank, which launched in 2005 after he raised $15 million to organize it. Located at 3737 E. 96th St., Symphony Bank caters to a wealthy niche of the north side's affluent demographic by offering lavish amenities such as extra-wide heated parking spaces and concierge services.

The fast-growing bank reached $50 million in assets last month, Tolen said. He's stepping down as its CEO to focus full time on Symphony Motors. Symphony Bank named Jeffrey Hale his replacement, although Tolen will remain a board member.

Now Tolen is attempting to capitalize Symphony Motors the same way. His goal: Raise $40 million to build the electric car prototype and set up its assembly. He plans to keep Symphony Motors' costs low by taking advantage of the auto industry's existing infrastructure. Symphony Motors wants to buy every component of its electric cars, from windshield to wheels, on the open market. Using just-in-time manufacturing processes, the company will have to establish its own operations only for electric-car assembly and delivery to market, Tolen said. It's the same way Dell builds computers.

Symphony Motors also is adding experienced talent to its team. The company's board boasts Giorgio Rizzoni, director of the Center for Automotive Research at Ohio State University. Its directors also include Bill Wylam, who retired from General Motors Corp. as its chief engineer of technology development after a 42-year career there. Wylam led development of propulsion for GM's experimental electric vehicle EV1. He spent the next decade exploring electric cars as corporate director of technology for Remy International Inc., an automotive supplier based in Anderson. The William B. Wylam Energy Storage and Conversion Laboratory on IUPUI's campus is named for him.

Wylam spent much of his career hearing from his corporate superiors why Americans aren't interested in buying fully electric cars. He didn't believe it then, and he doesn't believe it now.

"We are at the threshold of some kind of more electrified vehicle-propulsion systems. Some of it will take the form of pure EVs, as opposed to the hybrids," he said. "I spent the last 10 years at GM with the management saying nobody will buy a hybrid vehicle; they don't make sense. Well, Toyota just announced the 1 millionth hybrid sold. Even GM can be wrong about what people will want to drive."

The big car companies are just now shifting their century-long focus on the combustion engine--reluctantly--toward hybrids, Wylam said. None are producing fully electric cars, because they don't believe drivers will perceive them as anything but a toy or novelty.

But recent improvements in lithium-battery technology make it possible to make an electric car with enough pep and stamina for any road conditions, Wylam said. And Indiana, he noted, has long been a hub of both the experimentation and production of automotive power technology, parts and systems.

Tom Snyder, chairman of the Anderson-based Flagship Enterprise Center, agreed. Symphony Motors is a Flagship affiliate.

"This is an area where hybrid and electric vehicle technology got started. It's a good place for this type of activity to come together," Snyder said. "We think this is a valid startup arena for Indiana."

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