BRIGHT SPARK – MEET THE MAN BEHIND THE SCAPE DEAL

Nova Luxe President Marc Hawxhurst speaks to SABBEX about electric boat plans for SA and the world

Hawxhurst


SABBEX: You clearly have an interest in boats and renewable energy. How did this come about, and which interest came first?

MH: No, not really. I am interested in exploration, plants and animals and being independent / free.

That’s why I bought my first boat. With it, I explored the South Shore of Long Island NY and took pictures of birds. For me it was bliss, I could go just about anywhere and I enjoyed overcoming the challenges of navigation and keeping an old 2 stroke motor running. Eventually, I planned a big solo trip for myself. It’s called the kite loop and its about 800 miles round trip. Up the Hudson River, through the Erie canal, across Lake Ontario, down the St. Lawrence river, down the Richelieu river which becomes the Hudson again. I calculated fuel for my 17’ Boston Whaler and it was about $2,000. I thought, ‘Let me look into those electric motors and maybe I can save money on fuel.’ At the same time, my motor was so loud and dumped pollution into the water at an alarming rate. I wanted to enjoy boating without the noise and pollution. I soon found out, a 70hp equivalent motor and batteries was about 10x the cost of my entire boat. So, it didn’t make sense for me to do it on my boat, but then I spent the next few months trying to figure out where it would make financial sense to use electric motors. I am interested in renewable energy and I may lose some fans here but it must be said, the only practical way to provide consistent clean power to cities is Nuclear.


SABBEX: Was boating a part of your early childhood? Where did you grow up?

MH: No, I grew up on 13 acres of land in the woods of a small town. Where I grew up the state motto is ‘Live Free or Die’ and that still resonates with me even though I have been living in NY for years now. I had dirt bikes and  snowmobiles and was legally driving at 15 and a half. Most of my childhood was spent in the woods and my parents literally had a bell they would ring when it was time to go inside for dinner.


SABBEX:  Did you set out to be an entrepreneur, or did your business grow out of an earlier career?

MH: In life, I was always surrounded by entrepreneurs. I know the path and what it takes to be successful. My great grandfather was the youngest of 7 children in Italy. He did not want to be a sheep farmer so he moved to his aunts in New York at the age of 14. He collected scrap metal in a wagon until eventually buying a scrap yard, he sold the yard and put his two surviving sons in charge of a mason yard. My grandfather ran that mason yard until retiring and passing it on to a nephew, my uncle bought another mason yard out on Long Island (I’ve worked at both locations). My mother, once a freelance interior designer started a granite countertop company in NH. I was always going to be an entrepreneur; the industry and exact business was the only unknown. Unsure of an exact path, I studied business, finance, marketing, project management, supply chain management and most importantly worked in consulting for years. I have seen the inner workings of a lot of very successful businesses. Eventually, you realize that you can run a business half as poorly as everyone else.


SABBEX:  Would you class yourself as a greenie? What is your view on climate change and fossil fuels? 

MH: Yes, but I am not building boats for ‘Greenies’ I am building boats for those who want the best.

Ideally, I will make some extra profits and with those I can achieve my life goal of buying land

for plants and animals. I believe all animals will expand until they eventually run out of resources and the population crashes. In the case of humans, I see a dystopia future where all arable land on earth is converted for human use. If other humans don’t actively buy land for animals to use, it will all go away. Only animals that serve a purpose for humans or those that can survive in the cracks of human society will be around in the next 100 years. I don’t want that to happen.

Yes, I believe the globe is warming because of human activity. It is as the Chinese say, “death by one thousand cuts.” Each so small that our global economic system cannot properly assign the cost of say burning a gallon of petrol but together over decades the change is significant.

This is definitely a problem but fortunately we have a lot of attention on the issue. Again, my focus is protecting and ultimately creating space for nature to survive. Planting trees to pull CO2 from the air is a good idea, better yet, it creates a forest for animals to live in, so I support that strategy wholeheartedly.

Hawxhurst


SABBEX:  Do you have other interests related to maritime sport or maybe motoring / aviation?

MH: Sure, I enjoy waterskiing and wakeboarding as much as the next guy. My other major hobby is 3d printing. I have a few printers and the big one I’ve been using over the last two months is the Makerbot Method X. I have been testing different materials and can print a carbon fiber, nylon mixture that is about half the tensile strength of structural steel. I printed some model crane hooks that can hold over 1000 lbs. I have also printed a propeller which could work at low speeds. This prototyping has a purpose. In a few years, I will offer a 3d printer and the 3d schematic of every part on Nova Luxe Yachts. This will be the part of the ‘global adventure package’. The yachts I build are already self-sufficient, in the future the owner can print any part that may break on the yacht or random other things they may need on global expeditions!


SABBEX: What is your long term view of the leisure boating industry? Covid has been a wake-up call but many see growth potential..?

MH: Well, when global travel stopped, buying a boat and taking your family out on the water became the best leisure activity available. The boat market exploded in the US. When traveling becomes possible again the smaller leisure boat market will soften a bit and I expect to be able to buy a smaller craft next year at a reasonable price.

I expect growth to continue on every yacht above 30’. This is driven by the ability to charter the boat and boat shares. “Renting” your large yacht to a charter company when not in use can actually be profitable. Leisure is important but I am placing a large bet somewhere else. I am placing a bet on the remote worker. Right now, yacht buyers tell me all the time, “I will retire next year and am looking for a boat.” In 2021, I expect to get calls, “My wife and I work remotely and would like to buy or lease a boat for the next year.” These are the people I am building and designing yachts for. Next year, Elon (Musk) will provide high speed internet to the entire globe. With that, the oceans will be fundamentally different and I will have a product ready for that new frontier.


SABBEX:  There have been some famous news items about commercial boats / ships using solar power. Do you see Nova Luxe growing in this sector? What is the business plan in this regard?

MH: We took a shot at the commercial market. In NY a small ferry operator called North Ferry moves about 30 cars about half a mile then travels back again. It is the perfect candidate for all electric or hybrid. Each time it pulls to port it could charge, cross the small channel and charge again while cars unload. We had a proposal together and the operator was in favor but it’s unclear if we would get coast guard certification after the build. Our laws are a bit behind and the coast guard would not pre-certify the plans. So, we would have to build it first, then ask for approval and if the answer was no, well, that just can’t happen. So long story short, some barriers have to fall and the rules must be better defined before we go deeper into that business here in NY. Overseas it may be possible but as a small business it’s important to stay focused on what we do well so our focus will continue to be the private consumer market.


SABBEX: My understanding is that Nova Luxe is a specialist in electric propulsion systems, and started off refitting boats. The business has now moved to partnering with builders. Is this correct and is the idea to beat the builders at their own game?

MH: The idea behind Nova Luxe is to offer customers a superior Yacht which is also better for the environment.  In 2017, it became possible to go electric and gain yacht functionality, essentially you can do more than a diesel version could ever do.  You can live autonomously, for an unlimited amount of time.  That fact should not be understated.  This hybrid electric yacht is really a hybrid between a sailboat and powerboat, quiet and unlimited like a sailboat but easy to single hand and full of electric power like a powerboat.  These qualities make it a desirable yacht for a lot of people.  I told all of the major boat manufacturers at the time about this.  I explained that using XYZ electric system with their hull would create a much better yacht.  However, the boat market was so strong, manufacturers did not want to make any changes, they were at capacity and just wanted to sell last year’s model with a larger engine and at a higher price.  Our message fell on deaf ears.

We turned our focus from partnering with a manufacturer to offer an electric Nova Luxe version of their model to re-fitting a model on the used market ourselves.  We completed a re-fit on an Aquila 44 and after bringing it to the Miami Boat show people started to understand why an electric yacht is actually better than a diesel, not just green.  This is an important point which resonates with the American market where more buyers exist for the best yacht then they do for a green yacht.  Nova Luxe proved, we offer both.

With that success manufacturers started to listen, we received a soft commitment from Fountaine Pajot to offer electric versions of their yachts.  This saves us the costly step of removing new diesel motors from a brand new yacht which we were forced to do with Aquila.  Of course, during this time we were learning more and more about power catamarans.  We had proven our diesel to electric power conversion formulas and applied what we knew to hulls all around the world.  Truth be told, you don’t need to design a yacht from scratch to work as electric.  It’s far less expensive to find a hull that is efficient and make small changes to it.  This eliminates the hull #1 troubles.  The hulls produced by Scape are by our calculation the optimal efficiency relative to the amount of livable space.  It will be the best performing electric yacht, hands down, the other contestants are not close.

Finally, to answer your question, Nova Luxe is not trying to beat boat manufacturers at their own game.  We are providing expertise so our manufacturing partners can sell more yachts then the diesel only competition and so the yachts they sell are better for the environment.

Hawxhurst


SABBEX:  The market confirms a big swing to electric. Is this largely thanks to recent technological advances or have the advances been coming on for some time?

MH: The Marine environment is at least five years behind the automotive.  However, some things are possible on yachts which are not possible in cars.  First, all major marinas have large 30amp 220 plugs which allow for high speed charging.  So counting marina’s, boats have more places to plug in then they do fuel up.  Second, if you add a solar panel to a car roof, then great, you have enough power to charge your phone in the car.  On a power catamaran the solar array size can approach that of home installations.  It hits a very important inflection point, it is large enough to gather MORE energy than you need to run the house load.  Now with each passing sunny day, you are sending excess power to your high voltage batteries and can use that for electric sailing another day.  The difference between gathering less energy than you use every day and gathering more changes what is possible.

Nova Luxe’s big advancement is the combination of tried and true technology.


SABBEX: Some press articles have pegged you as a ‘disruptor’, in the mould of Elon Musk. Would you say you are trying to do for boats what Elon is doing for cars / space?

MH: Well, Nova Luxe is definitely a disrupter in the yacht market and I come from a computer coding / software background as Elon did.  However, what he has done is “orders of magnitude” more difficult than what we do.  Elon has pushed the frontier of what is possible.  Nova Luxe is explaining to customers what is already possible while at the same time organizing the team and suppliers to deliver a product.  I like the comparison but it is a bit of a stretch.  Also, I personally think Starlink will be Elon’s most successful business venture.  It will be more valuable than Tesla.


SABBEX: Elon Musk is SA-born and here you are acquiring a SA yard. Why South Africa? Is it partly to do with our reputation for top-class cats? And why cats as opposed to monohulls? 

MH: Well yes it’s 100% because top class catamarans are built and designed in South Africa and thats the way its been for a long time. You build strong and light catamarans and that is the proper formula for a top performing electric catamaran.

Over 3 years ago I asked myself the question, “What is the best boat you can build with current electric motors and battery technology, and price” The answer was, and still is a power catamaran in the 30-60′ range.  I will bullet point the top reasons.

Electric motors paired with a solar array can give you unlimited range Catamarans are wide and can support a very large solar array Catamarans require less power to push

Electric is expensive, parts for a 160hp system are about $200,000 so it needs to be on an expensive boat (~1 million) so the propulsion system is only 20% of the boat.

Boats like the hinkley dasher are a bit foolish to me.  It’s a 27′ runabout speed boat that cost $500,000 and has a top speed of 25 miles per hour which can only be achieved for about an hour.  A gas boat will do 50 miles per hour and cost 1/5 the price.  That same electric system on a large catamaran is a much better buy.  For starters it’s only 10% more than a diesel version and it can do everything the diesel version can do and more.  Top speed is slower but the benefits of silent cruising, no diesel smell and living autonomously far outweigh that. That’s what I think and I bet the farm on it.


SABBEX:  Am I correct that this is the second partnership / acquisition following a similar deal last year? Are you looking to partner with other yards, and is the idea to get more hybrid electrics into the charter market? 

MH; Yes generally speaking we have two major manufacturing agreements in place.

The first was made with a yard in Thailand that has a large range of power catamarans which they have been building for years.  They do not have a presence in the US market and they want to offer a hybrid model but were not sure how to do it.  So we teamed up and Nova Luxe will be installing the electric propulsion system for them as well as rebranding the hybrid models as ELITE.  The ELITE 50 is ready for sale and soon we will be offering an ELITE 70 from the same yard.

In South Africa, Kevin and his team are bringing a 40′ sailing cat and what will be the crown jewel for Nova Luxe, the ELITE 44.  They still own the rights for the IP and the moulds and will be organized as a separate manufacturing company. Nova Luxe will do all the marketing, branding, and selling worldwide.  We will be expanding our operation in South Africa while at the same time moving part of the process to the USA.

We are not actively looking for more deals but I would like ‘Nova Luxe’ to provide the electric systems for all the other major manufacturers.  Our system is proven and is the best option for cats in the 30-60′ range. They are still two steps behind and the fact that customers who want to be environmentally friendly cannot buy an electric Aquila or Fountaine Pajot power cat is just pathetic.

I could write an entire paper about the charter market.  From a maintenance, operational cost and joy of experience electric is the best choice.  However, right now the payback period for electric is 10 years.  It’s too long, so we are marketing to owners who would pay a bit more to have a superior product.  As we refine our process, build up capacity we will drive the price to convert down and will be poised to address the charter market when it makes business sense.

 

 

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