By Eric Peterson | Sep 18, 2017
Industry: Electronics & Aerospace
Products: Electric vehicles
Mourtada traveled to Guatemala with co-founders Michael Fox and Colin Sommer in late 2012.
Before the tip, the trio wondered about getting around the area and contacted their Airbnb host to ask how to get around the area. "He said, 'Once you get here, there are Tuk Tuks,'" says Mourtada, who previously was a management consultant for automotive and energy clients. (Fox and Sommer worked in financial services and engineering, respectively.) "I said, 'I don't know what that is, but I'll trust you.'"
They quickly learned that Tuk Tuks were three-wheeled vehicles used as taxis and cargo vehicles throughout the developing world.
After the trip, the trio became convinced that Tuk Tuks could find a big market in the U.S. and thought of starting a shuttle service. They had three criteria: The vehicles had to be safe, sized a bit larger for the U.S., and environmentally friendly. "We looked all over the world and nothing fit that criteria," says Mourtada.
That's when they decided to make the vehicles themselves and partnered with Tuk Tuk Factory in the Netherlands. "They were willing to license the design and work with us to fit the U.S. market."
When the founders officially launched eTuk USA in late 2013, Mourtada says, "We still had a long road in front of us."
It took about 18 months to certify the vehicles with the U.S. Department of Transportation (DOT). "We had 50 design changes to work on to meet DOT standards," says Mourtada, citing tweaks to the lighting, brakes, and other systems. "We sold our first vehicle in the U.S. on March 9, 2015."
eTuk USA now sells two models that are street legal in all 50 states: the Limo, starting at $17,995, and the Vendor, starting at $21,995. Both feature electric drive trains, auto-grade suspension, and a seven-kilowatt engine that captures braking power, along with perks like heated seats, charging ports, and removable rain covers. The vehicles' top outdoor speed is 25 miles per hour.
Popular with airports, resorts, and shuttle services, the Limo can accommodate a driver and six passengers, and the Vendor is essentially "a small food truck," says Mourtada. Caribou Coffee was an early customer for the Vendor model, and Aramark bought one for use at FirstEnergy Stadium, home of the NFL's Cleveland Browns. "Caribou Coffee powers all of their coffee machines right off the battery," he notes. "You're traveling with a clean power source."
"Because they're electric, you can use them both indoors and outdoors," adds Mourtada, noting that clients range from "multinational to small mom-and-pop" companies. "Almost every vehicle is custom."
Sister company eTuk Denver operates shuttles in the RiNo Art District and the Baker neighborhood; Stapleton is next. "We're working with the district and some of the breweries to provide a circulator," Mourtada says of RiNo. He says eTuks work best in "micro-areas" and trips of a few blocks to 1.5 miles.
eTuk USA sources parts from suppliers all over the world, including the frame and chassis from Tuk Tuk Factory's facility in Thailand, controllers from Maryland-based Curtis Instruments, and canopies and wraps from B-D Company in Denver.
The company sources the vehicle's batteries from manufacturers in the U.S. and other countries. "The batteries are quite a bit of the weight of the vehicle," says Mourtada, noting that a lithium-ion-powered model is due out in 2018.
eTuk has sold vehicles to customers in 26 states, and Mourtada says the company is "cash-flow positive” and "trending upwards." But it's required a lot of hard work. "We always joke that the 'e’ does not stand for easy," says Mourtada, noting that every state has its own certification processes and market quirks. "We have to work with the DMVs to educate them about what our vehicle is and how to register it."
Challenges: "Awareness," says Mourtada. "We're still a small company with limited resources." But once an eTuk is in operation at a high-visibility location like an airport or stadium, he adds, "The number of inquiries and calls dramatically goes up."
The "legislative backdrop” is another challenge. "The laws were never written for vehicles like ours," says Mourtada. "That's definitely a headwind, because it takes time."
Insurance is a third hurdle. "Insurance is more expensive for our customers than I'd like it to be," he notes. "We need more insurance providers to understand our product."
Opportunities: Dynamic growth for both models. Mourtada notes that one of Tuk Tuk Factory's customers has 160 vehicles in Lisbon, Portugal, alone. "We look at the U.S. cities that could absorb these vehicles and there's quite a few," says Mourtada, highlighting customers in smaller cities like Oxford, Mississippi, and Naperville, Illinois. "A lot of our customers could absorb 50, 100, 200 vehicles each."
He adds, "There's plenty of opportunity [for both the Limo and the Vendor], which we're optimistic about. As we hone our manufacturing capabilities, we want to drive the cost down."
Needs: More space. The lease on eTuk USA's 6,500-square-foot warehouse in RiNo is up at the end of 2017. "We're in the market for real estate," says Mourtada. "We've been shopping."