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Protean Electric gives Tianjin, China a try

March 18, 2016

Oh how time flies. I have been very, very negligent regarding ChinaEV blogs. But I promise to do better in 2016.  And right now I have plenty of good material because I just interviewed a handful of companies with EV technology for a story for Automotive News, a follow-up to a similar story I wrote way back in 2012.

One person I spoke with is KY Chan, CEO of Protean Electric. Protean produces in-wheel electric motors which, according to the company’s website, can boost fuel economy by more than 30 percent. The motors are drive-train agnostic, i.e. they can be used in pure electric or plug-in hybrid electric vehicles

Protean has gone through some changes since 2012, but is still moving ahead.  Some significant changes: In 2012 I interviewed then-CEO Bob Purcell, who was jazzed about an agreement with the Chinese city of Liyang to build a plant. Didn’t happen.  I am not surprised. Chinese cities are not always the most constant of partners.  “Liyang didn’t pan out for one reason or another,” Chan told me.

Yes, that’s another change at Protean. Bob Purcell left the company. Chan joined Protean in early 2013 to set up the China base and has been CEO for two and a half years, he says.  Chan says Purcell is his mentor.  Bob “felt that the next phase of the company’s growth would require someone who was ethnically Chinese,” say Chan, who is from Hong Kong.

KY Chan with other guys

KY Chan with Professor Guo Konghui, renowned expert in vehicle dynamics.

Protean is a seven-year old company but it is still in start-up mode. That means Chan’s main goal since becoming CEO has been raising money, finding customers, and finding a “landing pad” for manufacturing since the Liyang deal fell through.  “All three of these items are coming to a very good milestone,” Chan tells me.

China is where is Chan seems to be finding all three, money, customers, and land, that is.  There are two driving forces in China that benefit Protean: Beijing has stuck to its goal of having 5 million new energy vehicles on the road by 2020, whether or not it is obtainable. And, Beijing mandates a fleet fuel efficiency standard of 5 liters per 100 kilometers – about 47 mpg – that all automakers must achieve by 2020.

“The government is very serious about (the standard),” says Chan. “Don’t cheat.  The market is now going in a fashion that no matter what, even if losing money, the OEMs have to produce a number of new energy vehicles in order to lower the overall (fleet fuel efficiency) below 5 liters.”

He is talking to several potential customers now, says Chan, and he is feeling positive. “The amount of resources flowing into (the EV sector) is just unimaginable,” he says.

Chinese companies are interested in Protean’s in-wheel motors because they offer high torque and high power in a small package, says Chan.  Plus they are easy to install. Protean is targeting logistical vehicle builders who are producing EVs for local government fleets. Local governments are under a central government mandate to make 50 percent of new fleet vehicle purchases new energy vehicles. So there’s a market there.

Another selling point: The in-wheel motor doesn’t take up much space so the vehicles can carry larger batteries.  Since subsidies for the local government fleet vehicles are based on KwH, they can get more money from the central government!

Chan feels confident. “We will be a very significant b2b electric vehicle components supplier in the future,” he says.  

Of course, as the Liyang situation – a promise that didn’t pan out – illustrates, China can be a frustrating place to do business.  But, this time around Protean seems to be on the right track. Consider the third area that Chan is concentrating on: Land.   Protean is now building a plant on a “sizeable piece of land” in the Tianjin Binhai Hi-Tech Industrial Development Area.  It received a mid-sized company incentive package from the zone – Chan didn’t say what that included.   But of course there are a variety of incentives to locate in the zone. Outright grants is one, I’m sure.  The land is free, I’ll wager. Etc.

While the plant is being built, Protean is already tuning various production line stations at a temporary location in Tianjin, says Chan.

Tianjin is a better bet than Liyang, in my opinion.  It already has a number of hi-tech companies based there. And Chan says:  “Tianjin itself is a very outgoing city, very industrial. The government decided to focus on new exciting state-sponsored industries. New Energy Vehicles are one of them. The government is very aggressively investing in enterprises that have a history in electric vehicles. “

All in all Chan is pretty optimistic.  Chinese companies/local governments are in a hurry to turn out new energy vehicles, and Protean’s in-wheel motors can facilitate that, he says.  The proof is in the pudding, of course. How many times have I typed that sentence?  I am as always cautious.  But Tianjin is a much more outgoing city than Liyang, and it already has a high-tech base. So we shall see.

A side note: Battery maker Boston Power is manufacturing in Liyang. GSR Ventures, a Beijing-based venture capital firm with an office in  Palo Alto which invests in both Boston Power and Protean, seems to have close ties with Liyang, which is in the east China province of Jiangsu.

 

 

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