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Protean Electric gaining traction in U.S., China with in-wheel motors — finally

October 28, 2018

 

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The proof is in the pudding, as the saying goes. I’m not exactly sure what that means, but I think it applies to Protean Electric’s current situation.  I’ve been writing about Protean since 2012. The “start-up” is still chugging along, still working to get automakers to give its in-wheel electric motors a try. “We have found it is very difficult to convince OEMS to use our motor,” Protean CEO KY Chan told me recently. It needs some pudding to prove its product. That may finally be happening.

Electrification takes many forms.  Protean Electric, based in the U.S., U.K., and China, makes in-wheel electric motors. To quote its web site: “Our aim has been to create an in-wheel motor with integrated power electronics and digital control that can be packaged with a brake as a single product.”

Though it is ten years old, Protean is still in start-up mode as it is still “burning shareholder capital,” says Chan. It landed $40 million Series E funding earlier this year in new equity and manufacturing licenses. The majority of that funding – some $30 million – came from Weifu High Technology Group Co. Ltd, which now owns 12.34 percent of Protean, according to an announcements by Weifu and Protean. The two companies will establish a joint venture in Wuxi, China to manufacture ProteanDrive Pd18 in-wheel motors, which are designed to fit an 18-inch wheel rim.

Protean has another site in China, in Tianjin. I wrote about that in March of 2016. It houses what Chan refers to as a “prototype line” where it can produce motors for customers that need small quantities – several dozen, say – to help those customers make up their minds about the product. That plant has also aided Protean in developing its supply chain in China. “When Weifu and U.S. licensees want to scale up, they can rely on our original suppliers,” says Chan.

The in-wheel motor maker has received small purchase orders from eleven OEMS in China to test the technology, he says. If they decide to scale up, they will buy the motors from the Weifu plant, says Chan.

Protean doesn’t plan to expand the Tianjin site into large scale manufacturing, he adds. “Our mission is in the next two years before our China licensees scale up, they can rely on Tianjin to build prototypes.”

As we all know, or anyone reading this is likely to know, China has an ambitious plan to grow its electric vehicle sector.  It has mandated that automakers produce a certain volume of electrified vehicles or pay fines – a policy similar to California’s Zero Emission Vehicle (ZEV) policy, which indeed was a model for the China policy.  Concurrently, Beijing is rolling out an updated Corporate Average Fuel Consumption (CAFC) policy. Automakers must meet that as well.   So, OEMs in China are interested in Protean’s in-wheel motors, which can help meet both targets as they can also improve fuel efficiency.

The key, of course, is to get OEMs to try the motors. And while Protean has always believe its biggest opportunities would be in the passenger vehicle segment, says Chan, for the next several years, “our business will mainly come from the logistical vehicle manufacturers.”  Indeed, in March of 2018 Protean signed an agreement with Consolidated Metco Inc. (ConMet) to develop in-wheel motors for the medium- and heavy-duty vehicle markets.

ConMet, based in Vancouver, WA, is a global supplier of components to the commercial vehicle markets. Protean and ConMet have already put a motor and battery system together and are promoting the system to customers such as Volvo Heavy Duty and Scania, says Chan.

It also just announced a deal with Linamar Corp. , a huge Canadian automotive parts manufacturer, under which Linamar will manufacture Protean’s in-wheel motors for both the commercial and passenger car segments.

Waste delivery vehicles is a promising area, says Chan. Garbage trucks, as such vehicles are commonly known, stop and start over and over again. “Using a Protean motor would save a lot of energy,” says Chan. Another promising segment – cold chain delivery trucks that deliver to supermarkets and the like. The container is a big refrigerator that traditionally uses a diesel engine as a compressor to keep the container cold.

“What ConMet and Protean would be providing is a way to use the action of the vehicle to generate energy through the Protean motor, that can be used for the refrigeration,” says Chan.  The product they offer is a complete system including a battery, electric motor, and battery management system, says Chan.  Competitors generally only offer the electric motor, says Chan.

Protean is also talking with another customer in the U.S. that he can’t reveal, says Chan. That customer, a major Tier One supplier in the Detroit area, has agreed to become a Protean licensee.  The deal is quite important for Protean because it will give major OEMS more comfort in dealing with Protean, says Chan. Until now, they have hesitated because of his firm’s small size, he says. That pudding is beginning to gel.

Given its growing U.S. business, Chan has relocated from Asia to the San Francisco Bay Area. His kids all work in the Bay Area, so that was another factor, he says. It has a small presence, just Chan, a VP of U.S. sales, and a few others. “Hiring is very difficult” in the Bay Area, he sighs.

Back in China, Protean is eyeing another business opportunity as well – ride hailing. The central government in China has recognized that convincing Chinese consumers to buy electric vehicles may be even tougher when the current hefty incentives are phased out by 2021.  So, Beijing is encouraging Didi Chuxing, the giant of the ride-hailing segment in China, to go all electric, he says.

Didi doesn’t want to produce its own EVs; it is encouraging Chinese automakers such as FAW and SAIC and BAIC to produce them and to lease the EVs to Didi drivers. “I would like Didi to mention to the OEMs that they should look at in-wheel motors,” says Chan.

 

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GYON adds name to long list of Chinese EV startups

August 13, 2018

LOS ANGELES — Can you believe it? Another EV startup — that will produce “affordable luxury” electric vehicles — has popped up. It is called GYON — name is an acronym for “Grow Your Own Niche.”  I attended an event here on August 8 to announce GYON’s partnership with the Gaffoglio Family Metalcrafters, a firm in Fountain Valley, CA.

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GYON’s mission is to “create the next generation of electric, intelligent, connected, and socialized transportation products and services.” Sounds really familiar, I know. And yes, we are all rolling our eyes. I asked Joe Chao, the co-founder and president of GYON, what made his EV company special. “We are not just a car company,” he told me. “We are a system provider.”

Although details of the actual car, battery, and charger were scare, GYON showed a photo of a “Smart City Ecosystem” circle — car operation-AI Smart-Charging Network-Finance-Connectivity — which make up the system, I guess.  Not exactly new but a hot topic in China. GYON is headquartered in the southwest China city of Chengdu, and has a lot of support from the local government, Joe told me.

It is true that the local governments in China all want their own EV champion. And Chengdu has a pretty solid automotive base — Volkswagen, Toyota, and Volvo have plants there. I guess the Chengdu government feels like it needs its own EV startup.

GYON aims to build two production plants in Chengdu with a total capacity of 480,000 units. The plan calls for one plant to be finished in 2021, the second in 2024. But, Chao admitted, that depends on negotiations with the Chengdu government going well. Control seems to be a sticking point — GYON wants full control to ensure quality, etc.

Most — actually all except for me — of the journalists there were Chinese, most flown over from China, it seems. The first press release was in Chinese. So the audience was clearly in China.  Los Angeles was chosen as the location for the event because Gaffoglio Family Metalcrafters are based nearby in Orange County.

GFM will produce a prototype for GYON. No sketch was available — the whole thing is pretty nascent, was my feeling. But GFM does have a stellar list of clients and accomplishments so I expect the prototype — which may be rolled out at CES in 2020 — will look great.

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GYON is super ambitious — it says it will turn out nine vehicles in eight years. They will be in the sedan, MPV, SUV, and even station wagon segments. The first models look to be small EVs, however, A and B segment or sub-compact and compact.  GYON says it will turn out “affordable luxury” cars and the price point for the first models — 100,000 to 200,000 RMB, or US $14,668 to $29,337 at current exchange rates — is pretty darned affordable. It will be interesting to see how much luxury GYON can pack into the vehicles at that price.

Joe pointed out that the quality of an EV maker’s team is very important in landing funding, and he has assembled a pretty stellar group. Joe Chao is, of course, the former head of DaimlerChrysler’s China operations. He oversaw the production of the Beijing-Benz plant whose opening I attended. He also was an SVP at Chrysler, worked at GM, and after leaving DaimlerChrysler worked for Fisker and Karma in China, among others.  He’s been around.

Also at the event were Jacky Xian, a GYON investor and CEO of Sitech; Sunho Park, head of GYON quality center and also quality manager at Sitech; Sebastien Yang, manager of GYON marketing and product planning; and Thomas Zhang, chief engineer. All have impressive automotive CVs.

Another common trait is that many have connections to Sitech, another EV maker, which is backed by FAW.  Sitech launched it own little EV, the Dev1, earlier this year. Joe says GYON and the Dev1 won’t share technology. Sitech is an investor in GYON, however, which means FAW is an investor, in a way.  As with so many companies in China, the ownership structure of GYON is a tangled web.

Joe said that GYON might use FAW’s manufacturing capacity if GYON had a production-ready vehicle and its plants weren’t ready.  Loose FAW ties aside, GYON doesn’t have a close relationship with an established automaker.  Its execs, who do have a lot of automotive experience among them, touted this as a risk and an advantage (they would, of course…).

“We don’t have a big uncle behind us,” said Chao. “It is up to us. This is about risk..” But, he said, they were not going to use that as an excuse not to found GYON.

Jackie Xian added: “In China, people have an open mind to welcome a new brand.”

Not sure how true that is.

 

 

 

 

Magna aims to sell EVs in China through JV with BAIC

June 29, 2018

Magna International is jumping on the China EV band wagon. Well, that’s not entirely correct. It was already a major player in the EV component space. Now, Magna will form two joint ventures with Beijing Automotive Industry Holding Corp aka BAIC. One joint venture will focus on engineering, the other will manufacture pure electric vehicles.

The announcement Magna and BAIC would work together first came out in April of this year. That announcement proclaimed the agreement was between BAIC and Magna Steyr, the Austria-based contract vehicle manufacturer that is part of Magna International.

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The actual JV was announced in mid-June, but the parties were Magna (no Steyr) and BAIC. That is because Magna has decided to refer to all its subsidiaries as simply Magna, Klaus Drobnak, vice president fuel systems for Magna Steyr, oops, I mean Magna, told me.  Drobnak heads up Magna Steyr’s Asia business. Magna Steyr is known for engineering and manufacturing vehicles for other companies.

Magna International’s supplier business has long had a thriving presence in China. Its components are in pretty much every foreign brand car in China and many domestically-badged vehicles as well. Why jump into vehicle manufacturing in ‘China now, I asked? China “is a large market, BAIC is a strong partner. We see is as a good opportunity for us,” says Drobnak.

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I saw that coming. The large market, that is. In 2017, China was the world’s largest market for electric vehicles, including battery electric and plug-in hybrid electric vehicles. Some 700,000 BEVs and PHEVs, plus a few hydrogen fuel cell vehicles, were sold in the Middle Kingdom in 2017. BAIC’s EC series of electric vehicles was far and away the top seller.

By 2025, “the forecast for (sales of) all electric vehicles in China is 5 million,” says Drobnak. That is the government’s target, I remind him. But given that this is China, that target will likely be met.  Government regulations are another compelling reason to start producing EVs in China now.  Automakers must produce a certain number of electrified vehicles each year because of several government policies, which I wrote about for Wards Auto and you can read about here.

“We think (electric vehicles) is going to be a strongly growing segment,” says Drobnak. A good bet.

Of course, the main customers for electric vehicles in China thus far have been government fleets.  That doesn’t worry Drobnak. “The first (markets for EVs) are always fleets,” he says. Drobnak figures Chinese consumers concerned about pollution will warm to electric vehicles.  He also thinks that the daily driving behavior of China’s city-dwellers fits well with the range of electric vehicles.

One market driver Drobnak isn’t counting on are vehicle registration policies making EVs license plates easier or cheaper to obtain. Though they are major reason behind consumer EV sales in many large cities now, Drobnak figures those incentives will vanish as the volume of EVs on the road rises.

China’s healthy purchase subsidies are also scheduled to be phased out in a few years.  Drobnak didn’t sound too worried about that. The price of EVs is “definitely coming down” as volumes increase, he says. As for batteries, which account for the bulk of an EVs cost, their price is also coming down as volumes increase and cell manufacturers become more capable, says Drobnak. “I am positive the sale price (for electric vehicles) will go in the right direction,” he says.

Two JVs

Magna will be the majority owner of the engineering joint venture with BAIC; the Chinese company will be the majority owner of the electric vehicle JV.  The partnership hasn’t been approved by the central government yet, but BAIC is owned by the Beijing municipal government. “Our expectation is (the two JVs) will be approved,” says Drobnak.

BAIC, through its Beijing Electric Vehicle subsidiary, already produces the EC series, which with sales of 13,169 units in 2017.  But those are small, inexpensive EVs. With the JV, BAIC will move into higher-priced segments.

The engineering JV will develop a smart EV platform suitable for a medium or premium segment model. Drobnak declined to say what style of vehicle the JV would make, but there are plenty of clues.

Magna contracts to produce one other all-electric vehicle, the just-launched Jaguar I-PACE SUV.

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Magna Steyr produces the Jaguar I-Pace EV.

The SUV/CUV segment in China is the fastest growing. You be the judge of what style vehicle the Magna BAIC JV is likely to produce.

Production will be at a brownfield plant –meaning an existing plant BAIC owns — in Zhenjiang, in east China’s Jiangsu province. That plant has an annual production capacity of 180,000 units. Start of production is set for mid-2020, says Drobnak.

Zhenjiang is on the banks of the Yangtze River between Suzhou and Nanjing. That puts it smack in the middle of a technology and manufacturing hotbed in China, as well as near automakers SAIC – GM, and SAIC VW. There should be a good supplier base there, but a lot of competition for staff.

Magna has 51 manufacturing plants in China producing components ranging from electrical systems to structural and powertrain components to transmissions. It has more than 22,600 employees in China. The new JVs will boost that by more than 3,500.

Why did you decide to form a joint venture with BAIC rather than another automaker, I asked? “BAIC group has been a customer to our engineering and components for quite a while. This came out of our regular business discussion,” says Drobnak.

Beijing just said it will allow foreign automakers to own 100 percent of an electric vehicle manufacturing company. Why not go it alone, I asked Drobnak?

Most automakers are sticking with a Chinese partner, he points out.  Magna is no different. Also, BAIC is will be the new entities’ first and primary customer, he adds.

 

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Big connected electric SUVs, or what I saw at Auto China 2018

May 1, 2018

I lived in Kunming in January of 1992 when China’s then-paramount leader Deng Xiaoping made his famous “Tour of the South,” meant to reassure Chinese that his reform and opening policies would continue. That the common people in China were convinced was immediately apparent in Kunming, the provincial capital of Yunnan in southern China on the border with Vietnam.

Overnight on a downtown street, dozens if not hundreds of card tables sprouted. Illuminated by bare incandescent light bulbs strung overhead in long lines, those tables sported all manner of small items for sale by individual “business people” who had decided to “xia hai,” or jump into the sea of doing business for themselves, albeit on a small scale.  I mentioned it to a Chinese friend who said, “Chinese people are like a swarm of bees. When the government policy suggests something, they all do it.”

I saw evidence of that same swarming effect at Auto China 2018, which this year took place in Beijing (the show alternates between Beijing and Shanghai). One area the Made in China 2025 policy encourages is development of electric vehicles.  Boy have Chinese firms swarmed into this area. The show included 174 new-energy vehicles, which includes battery-electric, plug-in hybrid electric, and hydrogen fuel cell vehicles.

For all intents and purposes, however, it means BEVs and PHEVs. Of those at the show, more than 70 percent were made by Chinese firms. Note that I do not say automakers because all manner of Chinese companies, from automakers to internet companies to home appliance makers are investing in the sector.

One could see all this investment in EVs as a great thing.  How admirable that so many companies in China have the resources – including intellectual property, technology, design capability, human resources, etc. etc. – to answer the government’s call? On the other hand, one could also consider this a huge mis-allocation of resources. I lean more towards the huge mis-allocation side.

And it is only getting worse. The top Asia Pacific executive at a global supplier told me that they currently have applications from 41 wanna-be EV makers who want to use his firm’s technology. Having to wade through all these applications is a huge waste of his staff’s resources, the exec complained.

We’ve seen this before – in the traditional auto industry. China has more than 100 traditional automakers, most of them producing very small volumes of not very good ICE vehicles. Now, it has dozens — probably hundreds if commercial electric vehicle producers are added in — of companies trying to produce EVs.  I am the one who always says, “Shoot with buckshot and you are more likely to hit something.” But in this case, it really is a mass waste of resources in many instances.

True, China’s EV market is fast-growing. In 2017, it grew by 53 percent compared to the previous year to some 770,000 units, including 479,000 passenger vehicles, according to the China Association of Automobile Manufacturers. That was a tiny percentage of the total passenger vehicle market of 28.9 million units.

EVs have a bright future in China, no doubt.  But a lot of the investment being poured into EV production is still going to be wasted. There is very little to differentiate many of these models from each other. Consider the photos  at the top of this blog, which I snapped on the floor of the show. They represent a very small slice of the large electric connected SUVs on display.

What will differentiate these EVs, and in the end determine which manufacturers will succeed, is technology, most specifically connected car technology. I mean connectivity in the broad sense, so vehicle to vehicle, vehicle to smart phone, etc.  A pair of reporters from French media (but both were ethnically Chinese, so I automatically slipped into Chinese during the interview, only realizing later they probably wanted me to speak English) stopped me on the floor on the second media day and asked me to name one word to describe the show. I had to mull it over for a while before choosing connectivity.

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I won’t go into the special connective features of the various models because I don’t know them all. But I will say that the various executives I interviewed at the show thought China would lead the world in connectivity technology. Their reasoning: The government is mandating it – connectivity aka smart car technology is also part of Made in China 2025. Chinese consumers are demanding it. And the shear size of the market means that there is more investment and testing going into connectivity ergo faster development. Big data writ really big.

I also won’t – indeed, since I am not in China on a daily basis I don’t feel able to – pick winners and losers in the China connected EV race.  I do however think China will “win” the EV race simply by virtue of the size of its market. But it won’t necessarily have EVs that are any better than other countries, just more of them. And, some of those will carry foreign badges.

I am becoming more convinced that my friend Bill Russo may be onto something with his Automobility focus, at least where connected cars are concerned.  There is a lot to be said for sheer scale paired with actual innovation.

Now, let’s hope the government doesn’t decide there is a bit too much freedom of information in the sector and clamp down on it. That likely won’t happen, however. Indeed, the eagerness for Chinese to be connected to all things in all ways aids the government in its quest to know more about and to control what its people are saying and thinking. But I won’t go there….

 

 

Firm formerly known as Wheego again looks to China for funds

April 13, 2018

I read recently that Evatran Group Inc., a wireless charging company based in Richmond, VA, (and which I blogged about in 2015 and 2016) would no longer pursue being acquired by Zhejiang VIE Science & Technology Co, a Chinese firm that was already an Evatran investor. According to a story in the Richmond Times-Dispatch, the acquisition is “currently off the table primarily due to the Chinese government regulatory approval environment.”

That vague statement by Evatran board chairman Bob Mooney can be read several ways. It may refer to Beijing’s more restrictive attitude towards Chinese firms investing abroad.   It may also refer to the current U.S. administration’s much more restrictive approach to Chinese investment approval.  In any case, Chinese investment in the U.S. dropped by 36 percent in 2017 compared to the previous year, according to The Rhodium Group.

Either way, it could be an ominous sign for automotive startups here in the U.S. as Chinese money has been an important building block for many of them. This week, I talked with one such firm, Autonomous Fusion Inc. If that name isn’t familiar, I am not surprised. Until just a few days ago, Autonomous Fusion was known as Wheego Technologies, Inc.

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It is the second name change for the company. In October of 2015, Atlanta-based Autonomous Fusion changed its name from Wheego Electric Cars to Wheego Technologies. At that time, CEO Mike McQuary told me “We are a technology company whose primary focus is on electric vehicles and autonomous driving systems.”

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Mike McQuary says his firm is now purely a technology firm, offering software as service (SAS).

Now it is all-in for autonomous driving software.

To quote McQuary, now CEO of Autonomous Fusion:

“About three years ago we realized that if we were going to continue making EVs we were going to have to raise an enormous amount of capital, around half a billion dollars.  I struggled to find a business model that would work.  We had established a group to look at automotive future tech, a skunkworks group. I talked to some folks at Georgia Tech (and) they had figured out Autonomous Driving was going to be one of the corner stones of the industry.  Artificial Intelligence and Machine Learning were the way it would succeed.”

His team at Wheego was already working in that space, so it pivoted to a software as service company whose first product is a “full stack” autonomous driving software solution based on Artificial Intelligence and Machine Learning, says McQuary.

“That is what ADAS (Advanced Driver Assistance Systems) is going to be,” he says, “Particularly Level 3 and Level 4, because of the dynamic nature of the driving environment. Using machine learning as a platform for an ADAS product, you will need constant updates.”

That doesn’t mean EVs are a thing of the past for McQuary. “The software is not specific to EV’s, “he says. “It works great in ICE cars; but the automakers who are making EV’s know that their consumers will want the most advanced technology in their vehicles and so are being more aggressive in pursuing L3 ADAS.”

Autonomous Fusion is in preliminary talks with several automakers to use its software, says McQuary, and now we get to the China part of this story. Most of those automakers are Chinese.   There is a lot of interest in China, he says.

Due to government, industry, and investment community support, “China will be a lot more aggressive it their employment of ADAS and EVs,” says McQuary.  Indeed, a new policy from China’s central government calls for 50 percent of all vehicles to have full or partial autonomous function by 2020.  That same year, China aims to have five million new energy vehicles — which includes battery electric, plug-in hybrid electric, and fuel cell vehicles — on the road.

That goal is backed by a dual-credit scheme combining standards similar to California’s ZEV policy and increasingly strict vehicle emissions standards. Automakers will have to earn enough credits by producing NEVs or pay fines.

That has created an opening in the China market for foreign firms such as Autonomous Fusion. Chinese technology in the ADAS area is still developing. And, Chinese automakers are now more willing to pay for good technology than in the past, when low cost was the highest priority, says McQuary.

But the ADAS software space is getting pretty crowded, I mention. How will Autonomous Fusion stand out? Guanxi was pretty much his answer.

“It helps that we have in our DNA over ten years where we have built relationships over here,” he says. “Our relationships are deep-standing, not just on the auto side, but also in China’s evolution in technology” from copying to developing its own.

And here is where the matter of Chinese investment comes in. Wheego relied on Chinese investment to keep going. In 2013, Wheego needed funding and wasn’t having any luck finding investors in the U.S.

McQuary was visiting suppliers in China, and made an appointment to meet with GSR Ventures, a Beijing-based venture capital firm. GSR was happy to invest in Wheego so long as it turned its focus to producing EVs in China for the China market – mainly local governments, McQuary told me in 2016.

But that small EV sector is a pretty crowded market in China, so now we are back to where McQuary decided to “pivot” to the software as service business model.

Autonomous Fusion is at a familiar spot. Automakers – mostly Chinese – are interested in its software.  It is ready to go into production of a Level 3 autonomous vehicle, says McQuary. Until it finds more funding, however, it can probably only take on one new customer, he adds.

“We are sort of walking a fine line between commitments and the ability to take on full commercial customers,” says McQuary.

China once again seems like the best bet for funding. Besides Chinese VC firms, many local governments are investing in ADAS and EV startups, he says.

Like his vehicle-agnostic software, McQuary is funding-source agnostic.

“I am out in venture markets,” he says. “I am looking in China and the U.S. for money. We have gotten interest.”

 

 

NIO, XPT, Jack Cheng and a Joyful Life

December 22, 2017

The Chinese EV start up NIO is all over the news as I write this. It had a huge event in Beijing on December 16 where it revealed not just its ES8 electric car but also its plan to offer battery swapping, build a network of fast charging stations, include aspects of autonomous driving in the first model, and even include an Artificial Intelligence-driven personal assistant that learns your preferences.

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Jack Cheng hanging out with band Imagine Dragons after their performance at NIO event in Beijing.

Good stuff, and hopefully NIO will pull it all off. I just read a Bloomberg comparison of the ES8 and a Tesla Model X. The ES8 comes out on top, at a significantly cheaper price.  I admit to being a bit biased. Jack Cheng, one of the founders of NIO and now the CEO of XPT, NIO’s powertrain division, is a good friend.

But I am still a skeptic.  There are so many EV companies out there, with new ones popping up every day. I talked with Jack a week or so before the Beijing event and asked him, what makes NIO stand out from the crowd?

“Out total concept is that nothing is more important then the user,” he told me.

That was the mindset when NIO was founded three years ago, says Jack. The other EV startups might be successful too, he says. “But they are too focused on the technology. They aren’t focused on how to make the user happy and make a joyful life. It is easy to say but it is very hard to do.”

Hard to define as well, I suggested. What is a joyful life? Turns out technology is at the root of creating a joyful life. “The first step is to extend your living room into your car,” says Jack.

Especially in China, where people often have little personal space, and they spend a lot of time in their car, “you can move everything into the car.” Then make the car a pleasant space to inhabit, with a “brain” that knows what music you like, the temperature you prefer, where you like to shop, the list goes on.  The car is tailored to your personal tastes.

The ES8 vehicle NIO showed in Beijing offered features to realize that vision of a car as a personal living space. I won’t go into detail – you can read about it here. It is aimed directly at creating a personal user experience, it seems, right down to NOMI, billed as the world’s first in-car Artificial Intelligence system. Here is a handy YouTube video demonstrating some NOMI features.

Fingers crossed NIO – and XPT – will succeed.  The two are two parts of the same whole, of course. As Jack told me, “The most important thing for me is to get the car right.” But he has big ideas for XPT after that.  Indeed, Jack suggested to BMW chairman and CEO Harald Krueger that the XPT and the German automaker could work together in the future. 

XPT Global isn’t very well known, but it likely will be in the future. Although it is registered as a separate company in Hong Kong, XPT is part of the NIO global umbrella, which is a company registered in the Cayman Islands.

For now, XPT is focused on NIO and its vehicles. But, “eventually, XPT could be like Delphi,” says Jack, referencing how Delphi was part of GM but then separated to become an independent firm (which has now spun off its electronics division as an independent firm called Aptiv.)

Not a traditional guy

Jack got involved with NextEV, as NIO was originally known, after he and William Li,  the founder of Bitauto and a founder of NextEV, were on a panel together at a digital forum in China in 2014. Jack was, somewhat ironically, on the panel as the representative of the traditional auto industry. Li was the representative of the new age of digital human and machine interface.

After the panel, Li introduced himself. Li didn’t have a name card, says Jack, only WeChat. Fortunately,  “I had installed WeChat a short time before,” says Jack.  The two exchanged WeChat info. The rest, as they say, is history.

Jack brought more than just his long experience with supply chain and traditional manufacturing to the venture. I asked him, “What makes you uniquely qualified to be the CEO of XPT?”  “I have friends all over the world,” says Jack, “connections to all kinds of supplier partners, manufacturing partners, government partners, investor partners.”

Seems he is putting that network to use in the construction of NIO’s greenfield plant in Anhui province with partner Anhui Jianghuai Automobile Co. aka JAC Motors. “We put 100 manufacturing experts into it,” he said. “Japanese Lean Manufacturing guys plus German manufacturing.”  You get the picture. What did JAC bring to the equation besides land? Government money. “We pay by building cars,” says Jack.

His outlook is also a strength, says Jack.  “I never say myself as a traditional guy,” he says.  I think Jack sees himself as the personification of NIO’s “Joyful Life” slogan. “Still crazy after all these years,” he says.

 

 

 

Smith Electric JV with FDG emerges as Chanje

October 26, 2017

I blogged about Smith Electric’s agreement to form a JV with FDG way back in 2015. Attended a press event last week here in the Los Angeles area for the launch of the JV’s first vehicle. Hansel kept at it.  The JV is majority-owned by FDG. Smith Electric is a minority shareholder.

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Below is the story I wrote for Wards Auto about the event. You can also read the published version here.

FULLERTON, CA – In a parking lot beside the huge warehouse at a private airport south of Los Angeles, the big white vans sit someone incongruously among a few smaller private planes. The vans, with the not-too-sexy name V8070, are the flagship model from Chanje, a new commercial electric vehicle maker.

Chanje (pronounced “change”) is owned by a Chinese company, but it aims to make big inroads into the U.S.  fleet market. It sees itself fulfilling an unmet need.

“We don’t see anyone else doing thoughtful long-term investment in medium-duty vehicles,” Bryan Hansel, CEO of Chanje, tells Wards Auto at this press event.

The Chanje V8070 is a 16,535-lb. gross weight commercial vehicle that claims a payload capacity of up to 6,000 pounds. The drivetrain is pure electric, with a 70kWh lithium-iron phosphate battery and a 7.2 kW on-board charger. The charge port is SAE J1772 Level 2. Estimated range is 100 miles.

Ryder, which owns and leases commercial vehicles, is the exclusive sales channel and service network partner for Chanje.  Vehicles will be available at Ryder locations in strategic U.S. markets by the end of 2017.

Ryder has some 800 facilities in North America, Chris Nordh, director of global fuel products for Ryder, tells Wards Auto.

“These trucks fit very well into our portfolio,” he says.

Ryder already sees customer interest in the Chanje V8070, says Nordh.  Those potential customers are interested in “how using EVs can lift their profile and affect their pricing power.”

Translation: Some are interested in marketing themselves as environmentally friendly, some want to save money.

Cost savings from electric vehicles come from many areas, says Nordh, not just in fuel and maintenance. For example, High Occupancy Vehicle lane access earned by going electric saves time, which saves money, he says.

“Everybody has a slight different profile or need.”

By adding EVs to its vehicle options Ryder is also preparing for the future, says Nordh.

“The electric motor has a very significant (role to) play” in future transportation needs, he says.

Made in China

Chanje’s investors include Smith Electric and FDG Electric Vehicle Ltd. FDG is a Hong Kong-listed firm based in Mainland China. It was formed by grouping together various electric vehicle assets, which includes Sinopoly, the battery supplier to Chanje.

The name Chanje is a play on Changjiang, the Chinese name of an electric vehicle produced by FDG in China.

Hansel wouldn’t reveal more about the ownership structure. However, speaking with Wards Auto, Suresh Jayanthi, vice president, energy services at Chanje says, “FDG is our parent company.”

In mid-2015, Smith Electric and FDG announced they were forming a joint venture to produce electric vehicles. Chanje is that JV.

The JV is incorporated in Delaware. Smith Electric has since ceased to produce electric vehicle. It is still a minority partner in the JV.

Initially, production of the V8070, and perhaps future Chanje vehicles, will occur in China at a greenfield plant the joint venture built in the East China city of Hangzhou, says Hansel.

The vehicles will be shipped to the U.S. as knock down kits and assembled at a plant whose location will be announced within several months, says Hansel.

That knock down approach gives Chanje flexibility to ship the vehicle to different locations, even different countries, he says.

“The key is to get things into containers,” says Hansel. “It gives us the opportunity to increase local content if needed.”

As for when Chanje will begin actually producing units in the U.S., that depends on demand, he says. “There is an economic tipping point.”

Hansel is confident there will be adequate demand to justify local production in the U.S. He predicts thousands will be on the road here within the first year.

Chanje is “heavily promoting” leasing as the ownership model, and the cost in the first month of use will prove to be the same as a traditional fuel vehicle, asserts Hansel.

The firm sees itself as more than just an EV manufacturer. It aims to be an “energy services provider.”  Chanje is developing a fleet depot model that includes energy generation, storing, and charging all in one location.

Future models will include bi-directional charging so Chanje can sell energy back to the grid, says Jayanthi, Chanje’s vp of energy services.

“We have been spending time with the power providers in California to look at storage and self-generation options,” he says.

It has also been discussing how to integrate into the system if Chanje has power, and how to manage grid loads, says Jayanthi.

This holistic business model will be Chanje’s biggest advantage for customers with fleets of 100 units or more, says Hansel.

“You are just buying energy,” he says, “not making that big capital investment.”