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MOBIUS Bryan Kelly and Nicholas Roseborough Entrepreneurship Innovation Plan South Salem High School DECA 1910 Church Street SE 1/21/2016 Table of Contents I. Executive Summary Il. Problem 111. Customer Segments IV. Unique Value Proposition V. Solution VI. Conclusion Vil. Bibliography 1 2 2 3 3 4 5 1. EXECUTIVE SUMMARY The United States transports over 25,000,000 students to school each day with a fleet of diesel buses. While school buses greatly reduce the amount of cars on the road, there are still inherent flaws with the system in which Mobius will improve upon. Mobius will address the issues of considerable operation costs, maintenance costs, and the impact on human and environmental health: Traditional school buses incur astronomical operations costs due to inefficiencies in the engine and high fuel costs. In fuel alone, taxpayers spend $3,185,000,000 annually to operate school buses. With an added $7,200,000,000 per year in maintenance costs, buses cost a ludicrous amount of money to operate. School buses also present a problem to environmental and human health. Annually, school buses produce 6.7 billion kg of carbon dioxide pollution along with harmful nitrous oxide and particulate matter. These pollutants increase global warming rates and negatively impact human health by irritating the respiratory and cardiovascular systems. In response to the problems with the current school bus system, Mobius has developed an innovative all- electric school bus that utilizes regenerative braking and Vehicle to Grid systems. Utilizing electric motors and power, Mobius helps reduce global emissions by offering a zero-emissions bus. Operations costs will also be drastically reduced as electricity costs just 10% of what diesel fuel cost and maintenance of an electric motor is 80% more cost effective than a diesel engine. Mobius products also provide the opportunity for lifelong revenue. Our buses store massive amounts of electricity, which allows us to take advantage of variations in electricity costs. Mobius buses will purchase power and its lowest price point and sell it back at the peak price. As a result, Mobius products can generate thousands of dollars in revenue for each bus every year. We seek to implement our products first in the Midwest. Many school districts are forced to span a large area due to low population saturation with some being thousands of square miles large. As a result, these school districts will benefit the most from our inexpensive transportation costs. Furthermore, our low maintenance requirements provide further advantages to these more rural and expansive areas that may lack the necessary resources for comprehensive services. In order to capture first mover advantage, we are asking you to invest $400,000 for 10% of Mobius. 1 11. PROBLEM As mentioned, the school buqes in the United Statce drive over 5.7 billion miles a year. This equates to appt•ximately 12.000 miles a year pet' bus. With an average fuel efficiency of 7 miles per gallon of diesel, these buses use over 800 million gallons of diesel per year. As a result, school buses waste approximately $3.185,000,000 annually in diesel fuel costs. Another concern with eurtx•nt school bus operations is the astronomical maintenance costs. These costs are the combination of mechanic salaries, contracted maintenance, tire and battery tv•plaeement, and repair parts. A study by the Michigan School Business Officials on a nine bus fleet found that the average annual vehicle maintenance and repair cost per bus was just over $15,000. With 480,000 school buses nationwide, maintenance costs equate to $7,200,000,000 annually. Furthermote, these costs increase as the age of the bus increases. The current school bus transpottation system also has many negative impacts upon human health and the environment by emitting over 6.7 billion kilograms of carbon dioxide yearly. In addition to carbon dioxide, diesel vehicles emit extraordinary amounts of nitrous oxide and particulate matter. This particulate matter or soot is caused by the incomplete combustion of diesel fuel and can irritate the eyes, nose, throat, and lungs. Excessive exposure to particulate matter can result in respiratow and cardiovascular illnesses particularly in children and the elderly. In addition to particulate matter, nitrogen oxides irritate the respiratory system due to the formation of ground level ozone. Finally, the emission of carbon dioxide has significant implications on the environment, namely in global warming. 111. CUSTOMER SEGMENTS The United States' 13,506 public school districts transport approximately 25,000,000 students a day on school buses. These buses keep about 17,000,000 cars off the road each day, but at great cost to the school district. The outdated bus fleets that school districts use have low fuel economy and high maintenance costs. As a result, it costs school districts $961 per student to transport to and from school each year. In maintenance and fuel costs alone, school districts spend $ 10.16 billion every year. Mobius offsets these issues by providing a low-maintenance, zero-emissions alternative that will save billions of dollars per year. Additionally, Mobius buses cater to the desire for safe transport for the nation's students by stabilizing the bus through the 2 dispersal of weight of the battery. Mobius will specifically target larger public school districts in the Midwest which typically drive longer distances and have higher fuel consumption costs. IV. UNIQUE VALUE PROPOSITION Mobius targets the flaws of the current school transportation system and innovates in one of the world's most static markets. Our key features include: e A bus that runs on an electric battery thus producing zero-emissions that will prevent 6.7 billion kg of carbon dioxide from being released each year. o Drastically reduced operations costs by utilizing an electric motor and battery. The cost of electricity used by one Mobius bus will equate to about $715 per year compared to $6,635 in diesel costs. Likewise, maintenance costs of a Mobius are only $1 ,770 compared to $9,000 of diesel buses. A safer alternative to current school buses as the dispersal of weight of the battery will help stabilize the bus and prevent tipping. o Vehicle to Grid technology which allows the owner to purchase energy at off- peak times when the cost of electricity is lower, then sell excess electricity back to the grid at peak hours when the cost is higher. This lowers costs of electricity to the user can generate profits for Mobius. V. SOLUTION School buses are notorious for the emissions that have been associated with ecological damage and adverse health effects. Diesel engines emit many times more amounts of nitrogen oxides and carbon dioxide than even gasoline engines. Combined with the low gas mileage of school buses and their extreme usage, school bus engines give off noxious gases as well as particulate emissions from the diesel exhaust. The Clean Air Task Force ran a study in 2008 that found that those who work with diesel fuels regularly are at a higher risk for asthma and respiratory infection, stroke, and cancers of the bladder, colon, and lung. In particular, bus drivers have a 49% risk of heart disease, greater than any other diesel-related profession. By making zero-emission buses, we are excited to offer a bus to school districts that provides a responsible image of care for both the environment and for its employees. 3 Furthermore, Mobius buses are safer than traditional buses because of the dispersal of weight throughout the vehicle. The increased weight of the batteries on the bottom of the bus shift the bus's center of gravity lower, making the bus less likely to tip than current models. However, the absence of an engine keeps the total weight of the bus low while spreading the weight out over the entire vehicle. As a result, bus rollovers (the most dangerous type of accident) are far less likely to occur. On average, 25 casualties occur per rollover, which is why we are proud to offer one of the safest modes of transit for our children. Mobius buses also offer reduced operations costs. United States taxpayers spend $3,185,000,000 a year to pay for bus fuels, as well as $6,975,000,000 in maintenance costs. In comparison, energy in the contiguous United States costs 8.53e/kWh on average. A study on the electric bus concepts conducted by University of Delaware graduates students found that the average electric bus would use $715 of electricity annually, whereas the average diesel bus spends $6,635 in diesel costs per year. The most exciting oppottunity present in Mobius vehicles is the system known as Vehicle to Grid (V2G). The large batteries inside our buses function as massive storage units for power, which allows us to utilize V2G. The Vehicle to Grid method generates profit for Mobius by taking advantage of the varying power costs. Based on energy usage Reduced Vehicle to Operation Grid 'Costs Technotogy trends, power companies raise energy prices when consumers use more power and lower them when power usage is low. For example, Portland General Electric has an On-Peak energy cost (12.581e/kWh), a Mid-Peak energy cost (7.222ø/kWh), and an Off-Peak cost (4.195ø/kWh). The V2G system takes advantage of the price variations by purchasing power at the Off-Peak cost and reselling the power to the grid during the On-Peak time period. Peak energy prices are from 5p.m.-8p.m., and Off-Peak prices from 10p.m.-6a.m. When energy is purchased at its lowest price (4.1950, it can be sold at three times that price overnight (12.581 e). Coupling the high profit margin with the extensive energy capacity per bus, Mobius can generate thousands of dollars a year in each school district. To save energy, Mobius buses will have regenerative braking, which converts the kinetic energy of the bus into electric energy when braking. 4 VI. CONCLUSION With 480,000 school buses carrying approximately 25,000,000 students each day in the United States, it is an admirable attempt to reduce environmental and health issues due to fuel emissions. While buses greatly the amount of cars on the road, they still contribute astronomical amounts of pollution and œquire massive amounts of fuel. In addition, maintenance costs for school buses increase astronomically as the buses age. In response to the fuel costs, environmental and health inefficiencies, and astronomical maintenance costs, Mobius has developed a new electric battery-powered school bus which utilizes the Vehicle to Grid system. This allows Mobius and the school districts to not only save money on fuel and maintenance, but also provide an environmentally friendly altemative to thousands or millions of students. Futthermore, the even weight dispersal of our batteries are critical in preventing life-threatening accidents. In order to provide a cost-effective, environmentally friendly, and safe alternative to the current school bus, Mobius is asking for $400,000 for a 10% stake in the company. Vll. BIBLIOGRAPHY School Bus Crash and Fatality Facts • http://www-nrd.nhtsa.dot.gov/Pubs/812170.pdf • http://www-nrd.nhtsa.dot.gov/pdf/esv/esv20/()7-()152-0.pdf Environmental Impact and Operations Figures http://www.americanschoolbuscouncil.org/issues/environmental-benefits • http://www.catf.us/resources/factsheets/files/20080318-0ccupational Health.pdf Transport Expenditures • https://nces.ed.gov/fastfacts/display.asp?id=66 (per student) • https://nces.ed.gov/programs/digest/d14/tables/dt14 236.90.asp (yearly) V2G Concept and Execution http://www.fastcoexist.com/3036805/how-to-make-electric-school-buses-as-cheap-as- diesel-fueled-transit http://www.udel.edu/V2G/resources/V2G-Cost-Benefit-Analysis-Noel-McCormack- Applied-Energy-As-Accepted.pdf Cost Analysis of Leasing and Operation of a School Bus • http://www.msbo.org/sites/default/files/BusLeasingCost-2011.pdf 5 while spreading the weight out over the entire vehicle. As a result, bus rollovers (the most dangerous type of accident) are far less likely to occur. On average, 25 casualties occur per rollover, which is why we are proud to offer one of the safest modes of transit for our children. Mobius buses also offer reduced operations costs. United States taxpay