Trans Power Overview 03 16 10


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Trans Power Overview 03 16 10

  1. 1. Electric Drive Systems for Class 8 Trucks Company Overview 16 March 2010 TransPower Photo courtesy Navistar
  2. 2. Contents <ul><li>Overview and Product Offering Page 3 </li></ul><ul><li>Market and Competitive Position Page 9 </li></ul><ul><li>Marketing Strategy Page 21 </li></ul><ul><li>Key Personnel & Strategic Partners Page 28 </li></ul><ul><li>Conclusions Page 33 </li></ul>
  3. 3. Overview and Product Offering
  4. 4. TransPower Overview Mission and Strategy <ul><li>TransPower’s mission is to develop and supply reliable, affordable electric transportation products that offer the greatest possible reductions in: </li></ul><ul><ul><li>Global dependence on fossil fuels </li></ul></ul><ul><ul><li>All forms of mobile source emissions </li></ul></ul><ul><ul><li>Customer life-cycle costs </li></ul></ul><ul><li>Strategy </li></ul><ul><ul><li>Focus on heavy-duty vehicles — primarily Class 7 and 8 trucks </li></ul></ul><ul><ul><li>Emphasize grid-connected battery all-electric propulsion </li></ul></ul><ul><ul><li>Pursue dual business model of aftermarket vehicle conversions and selling integrated drive system “kits” to vehicle manufacturers </li></ul></ul>
  5. 5. The Ultimate Cleantech Machine <ul><li>Replaces the Power System on Largest Class 8 Trucks, Weighing up to 80,000 lb. </li></ul><ul><ul><li>Main propulsion — power to move the vehicle </li></ul></ul><ul><ul><li>All auxiliary power systems — power steering, braking, A/C, etc. </li></ul></ul><ul><li>Results </li></ul><ul><ul><li>No engine or transmission — replaced with single electric motor </li></ul></ul><ul><ul><li>No fuel consumption — plug-in to recharge batteries </li></ul></ul><ul><ul><li>Zero emissions </li></ul></ul><ul><ul><li>Reduced noise </li></ul></ul><ul><ul><li>Reduced maintenance </li></ul></ul><ul><ul><li>Economic value proposition for truck owners </li></ul></ul>
  6. 6. Main Components First Generation Drive System Main Drive Motor <ul><ul><li>Manufactured by Siemens </li></ul></ul><ul><ul><li>High power (250 kW cont.) </li></ul></ul><ul><ul><li>Direct drive (no gearbox) </li></ul></ul><ul><ul><li>Proven product line (“ELFA” ® ) </li></ul></ul>Remote Diagnostic System <ul><ul><li>Developed by ISE </li></ul></ul><ul><ul><li>Tracks vehicle position and status of key components </li></ul></ul><ul><ul><li>Sends data over internet </li></ul></ul>Inverter Package <ul><ul><li>Manufactured by Siemens </li></ul></ul><ul><ul><li>4 identical modules </li></ul></ul><ul><ul><li>Designed specifically to work with Siemens ELFA ® motor </li></ul></ul>Battery Subsystem <ul><ul><li>Manufacturer TBD </li></ul></ul><ul><ul><li>ISE has assembly capability </li></ul></ul><ul><ul><li>Selection in 2010-11 based on performance and pricing </li></ul></ul>Accessory Subsystem <ul><ul><li>Assembled by ISE </li></ul></ul><ul><ul><li>Electrically powers steering and braking </li></ul></ul><ul><ul><li>Improves efficiency </li></ul></ul>Integration Kit <ul><ul><li>Cradle assemblies and mounting hardware </li></ul></ul><ul><ul><li>Wiring harnesses </li></ul></ul><ul><ul><li>Control algorithms </li></ul></ul><ul><ul><li>Customized for each truck vehicle model </li></ul></ul><ul><ul><li>Updated as new technology components are introduced into drive system architecture </li></ul></ul>
  7. 7. Transpower Role Sustainable Long-Term Business Model <ul><li>Engineering and Integration Services </li></ul><ul><ul><li>Design electric drive installations for various truck models </li></ul></ul><ul><ul><li>Perform first-time integration and validation </li></ul></ul><ul><ul><li>After-market conversion of trucks in low to moderate volumes </li></ul></ul><ul><li>Drive System Kit Sales </li></ul><ul><ul><li>Manage major component supply chain </li></ul></ul><ul><ul><li>Fabricate custom integration hardware </li></ul></ul><ul><ul><li>Sell ready-to-install hardware/software “kits” to truck OEMs </li></ul></ul><ul><li>Integration Hardware/Software Sales and Licensing </li></ul><ul><ul><li>Sell or license proprietary integration products only </li></ul></ul><ul><ul><li>Allow OEMs to source other components directly </li></ul></ul><ul><ul><li>Lower revenue but higher margins – “move up value chain” </li></ul></ul>
  8. 8. Motive Drive Subsystem Typical Installation <ul><li>Drive Motor </li></ul>Inverter/Motor Controller Assembly
  9. 9. Market and Competitive Position
  10. 10. Electric Propulsion: Why Now? <ul><li>Pre-2000 </li></ul>Diesel Era 2000-2009 Advent of Hybrids 2010-2014 Electric Adoption 2015- Electric Cost-Effective <ul><li>Immature electric drive technology </li></ul><ul><li>Immature control technology </li></ul><ul><li>No viable energy storage technology </li></ul><ul><li>Mature electric drive technology </li></ul><ul><li>Mature control technology </li></ul><ul><li>Limited energy storage technology </li></ul><ul><li>Energy storage technology maturing </li></ul><ul><li>Mature, cheaper energy storage technology </li></ul><ul><li>Higher fuel costs </li></ul><ul><li>Transpower “EnerLease” option </li></ul>Electric trucks are just now becoming possible, and demand for such vehicles will increase dramatically over the next 5 years as they become more cost-effective
  11. 11. A Decade of Growth Light-Duty Hybrid Vehicles Source: U.S. Department of Energy
  12. 12. Electric Truck Demand Drivers <ul><li>Simpler </li></ul><ul><ul><li>Fewer parts than diesel or hybrid systems </li></ul></ul><ul><ul><li>Cheaper and easier to maintain </li></ul></ul><ul><li>Less Expensive to Operate </li></ul><ul><ul><li>Eliminates fuel and oil expenses </li></ul></ul><ul><ul><li>Electricity 2-3x cheaper on a cost/mile basis </li></ul></ul><ul><ul><li>Brake wear reduced by 75% </li></ul></ul><ul><li>Environmental Benefits (Zero Emissions and Less Noise) </li></ul><ul><ul><li>Enable access to large government subsidies and tax breaks </li></ul></ul><ul><ul><li>Improved public image and customer acceptance </li></ul></ul>
  13. 13. Trucks will be Electrified Before Cars “ Electric drive medium- and heavy-duty trucks, buses, and non-road vehicles can saturate market niches earlier than electric drive passenger vehicles at a much lower level of production (3,000 to 5,000 vehicles per year). With these production volumes, the vehicles battery costs will be reduced significantly. Additionally, with the higher fuel savings of these vehicles they will achieve cost competitiveness with diesel vehicles sooner than in the light duty market.” - California Energy Commission, “2010-2011 Investment Plan for the Alternative and Renewable Fuel and Vehicle Technology Program,” February 2010
  14. 14. Cost-Effectiveness The “Battery-Fuel Crossover”
  15. 15. Battery Costs are Key “ CEC recommends manufacturing incentives of $7.5 million to $10 million…this funding will likely result in 20,000 to 30,000 electric vehicles sold per year within 5 years...At these levels it is expected that battery cost will drop by up to 50% from current market rates.” - California Energy Commission, “2010-2011 Investment Plan for the Alternative and Renewable Fuel and Vehicle Technology Program,” February 2010
  16. 16. <ul><li>Fundamental Change in Electric Truck Economics </li></ul><ul><ul><li>Now: large electric trucks require subsidies to offset higher cost of operating ($20-30K/year relative to diesel trucks) </li></ul></ul><ul><ul><li>Future: within three years, declining battery costs and rising fuel costs will make electric trucks more cost-effective </li></ul></ul><ul><li>TransPower Strategy </li></ul><ul><ul><li>Leverage public subsidies and tax breaks to build a near term market for its electric drive products and services </li></ul></ul><ul><ul><li>Have a mature, reliable drive system and rapid scale-up capability in place when the battery-fuel crossover occurs </li></ul></ul><ul><ul><li>Provide financing to enable truck owners to pay for higher truck cost out of fuel savings (“Solar City model”) </li></ul></ul>“ Battery-Fuel Crossover” Capitalizing on the Opportunity
  17. 17. Competition Matrix Heavy-Duty Vehicle Electrification <ul><li>Balqon </li></ul><ul><li>Navistar </li></ul><ul><li>Smith Electric Vehicles </li></ul>Battery All-Electric Drive <ul><li>Allison Transmission </li></ul><ul><li>BAE Systems </li></ul><ul><li>Eaton </li></ul><ul><li>ISE </li></ul><ul><li>Oshkosh </li></ul><ul><li>US Hybrid </li></ul><ul><li>Vision Industries </li></ul><ul><li>Allison Transmission </li></ul><ul><li>Azure Dynamics </li></ul><ul><li>Eaton </li></ul><ul><li>Enova Systems </li></ul>Hybrid-Electric Drive Class 7-8 Trucks (Over 26,000 lb.) Class 3-6 Trucks (Up to 26,000 lb.)
  18. 18. Competitive Assessment <ul><li>Strongest potential competitors are focused elsewhere </li></ul><ul><ul><li>Allison, BAE, Eaton, and Oshkosh — hybrid focus; too large to adjust quickly to battery all-electric </li></ul></ul><ul><ul><li>Navistar, Smith Electric — focused on smaller trucks; components are not scalable to most Class 7 or 8 trucks </li></ul></ul><ul><li>Competitors with most similar business models </li></ul><ul><ul><li>Balqon and Vision Industries </li></ul></ul><ul><ul><li>Both have acquired support from LA-area ports </li></ul></ul><ul><ul><li>Neither has delivered reliable Class 8 vehicles commercially </li></ul></ul><ul><li>TransPower strategy </li></ul><ul><ul><li>Avoid head-to-head competition with big hybrid suppliers </li></ul></ul><ul><ul><li>Focus on battery-electric propulsion for larger trucks </li></ul></ul><ul><ul><li>Leapfrog smaller competitors by leveraging experience and proven components of ISE and Siemens </li></ul></ul>
  19. 19. Competitive Edge Adapting a Proven Product <ul><li>TransPower core components are proven in Class 8 use </li></ul><ul><ul><li>Siemens — motor and inverter components used in thousands of buses and rail vehicles worldwide </li></ul></ul><ul><ul><li>ISE — its transit bus drive systems (using Siemens components and ISE accessories) have accumulated 13 million+ miles </li></ul></ul>Long Beach Transit Gasoline Hybrid Bus <ul><li>64 buses in service in Long Beach </li></ul><ul><li>More than 250 hybrid buses in service or on order using same technology </li></ul><ul><li>TransPower trucks to use same core components, greatly reducing risk </li></ul><ul><li>ISE and Siemens to provide technical support </li></ul>
  20. 20. Simplicity = Logic (= Market Acceptance) Typical Series Hybrid Drive System Electric Drive System “ Simple Simon™” Drive Motor Inverters Motor Auxiliary Battery Pack Accessory Subsystem Drive Motor Inverters Generator Motor Auxiliary Battery Pack Braking Resistors Electric Generator Diesel Engine Fuel System Engine Cooling, Exhaust, etc. Accessory Subsystem
  21. 21. Marketing Strategy
  22. 22. Overview of TransPower Marketing Strate gy <ul><li>Near Term (2010-2012) </li></ul><ul><ul><li>Deploy demonstration vehicles, focusing on heavily-subsidized markets (e.g., port trucks) to drive early revenues </li></ul></ul><ul><ul><li>Most sales through after-market retrofits </li></ul></ul><ul><ul><li>Provide “EnerLease” financing option </li></ul></ul><ul><li>Intermediate Term (2013-2015) </li></ul><ul><ul><li>Branch into other high-end vehicle markets (e.g., refuse collection) </li></ul></ul><ul><ul><li>Begin selling drive systems to OEMs in the form of “kits” </li></ul></ul><ul><li>Longer Term (2016-) </li></ul><ul><ul><li>For cost-driven OEMs, supply integration IP and let the OEMs drive costs down by sourcing major components themselves </li></ul></ul>
  23. 23. Target Entry Market Port Drayage <ul><li>Electric trucks for regional transportation of port containers </li></ul><ul><ul><li>Ideal, short-range for electric propulsion </li></ul></ul><ul><ul><li>Large enough market to jump-start electric drive business </li></ul></ul><ul><ul><li>Market aggressively seeking cleaner alternatives to diesel trucks </li></ul></ul><ul><li>Initial focus on Ports of Los Angeles and Long Beach </li></ul><ul><ul><li>Ideal location for initial demonstration </li></ul></ul><ul><ul><li>Motivated customers (e.g., TTSI, California Cartage) </li></ul></ul><ul><ul><li>Numerous regional incentives </li></ul></ul>
  24. 24. <ul><li>More than 6 million truck trips/year support LA ports </li></ul><ul><ul><li>2.4 million trips/year under 50 miles (round trip) </li></ul></ul><ul><ul><li>3.3 million trips/year under 100 miles </li></ul></ul><ul><li>Addressable local population of ~16,000 port trucks </li></ul>Ports of LA/Long Beach Drayage Market Characteristics TEU = twenty foot-equivalent unit 6,660,000 11.96 TOTAL 2,500,000 4.52 Up to 500 miles Regional shipment by truck 840,000 1.50 25-110 Transloaded truck to truck – long 840,000 1.50 4-25 Transloaded truck to truck – short 840,000 1.50 4-25 Transloaded truck to rail 930,000 1.67 25-85 Off-dock intermodal 710,000 1.27 5 Near-dock intermodal 2006 Throughput (Truck Trips) 2006 Throughput (Million TEU ) Trip Distance (miles each way)
  25. 25. <ul><li>Phase 1: Prototype Demonstration (2010-11) </li></ul><ul><ul><li>Demonstrate two electric drayage trucks in service in 2011 </li></ul></ul><ul><ul><li>Secure ~$2 million in grant funding to augment private investment </li></ul></ul><ul><li>Phase 2: Commercialization (2012-) </li></ul><ul><ul><li>Use successful demonstration to stimulate demand in ports and other markets </li></ul></ul><ul><ul><li>Transition from after-market retrofits to selling kits to OEMs as demand increases </li></ul></ul><ul><li>Team Members </li></ul><ul><ul><li>Navistar : supply truck vehicles, provide initial path to market </li></ul></ul><ul><ul><li>Siemens/ISE : supply proven components, integration expertise required for rapid prototyping and perfection of product </li></ul></ul><ul><ul><li>TTSI : leading drayage firm will operate demonstration trucks, has indicated interest in large subsequent purchases </li></ul></ul>Ports of LA/Long Beach Marketing Plan
  26. 26. Purchase Analysis Port Drayage Trucks <ul><li>Up Front Cost of Electric Trucks Can be Reduced to ~ $150,000 </li></ul><ul><ul><li>Minus charger, comparable to cost of standard diesel trucks </li></ul></ul><ul><ul><li>Less than cost of equivalent natural gas trucks </li></ul></ul><ul><li>Key Assumptions </li></ul><ul><ul><li>EnerLease finances 60% of truck capital cost </li></ul></ul><ul><ul><li>50% subsidy (various sources) through 2014, 35% subsidy 2015-2019 </li></ul></ul><ul><ul><li>In long term, trucks purchased direct from OEM </li></ul></ul>
  27. 27. Target Markets U.S. Class 8 Trucking Only * Assumes long-term average sale price of $250,000 per vehicle † Assumes long-term average sale price of $20,000 per vehicle Annual Estimates Vehicle Type $500 million $6.25 billion 25,000 TOTAL $20 million $250 million 1,000 Construction and other vehicles $40 million $500 million 2,000 Tactical military trucks $200 million $2.5 billion 10,000 Local delivery trucks $200 million $2.5 billion 10,000 Refuse and recycling trucks $40 million $500 million 2,000 Port trucks Potential Revenue – TransPower Integration IP Only † Potential Revenue – Drive System Kits* Addressable Unit Sales
  28. 28. Key Personnel & Strategic Partners
  29. 29. TransPower Team Unique Products and Capabilities <ul><li>TransPower </li></ul><ul><ul><li>CEO Mike Simon built similar company, ISE, from 1995-2005 </li></ul></ul><ul><ul><li>Has focused on electric vehicles since 2005 and development of battery-electric truck strategy since 2007 </li></ul></ul><ul><li>Key Partner: ISE </li></ul><ul><ul><li>Single source for major components of first generation system </li></ul></ul><ul><ul><li>Will provide engineering support </li></ul></ul><ul><ul><li>Results: reduced integration risk, faster time to market in a larger variety of vehicle models </li></ul></ul><ul><li>Other Partners </li></ul><ul><ul><li>Navistar - major OEM provides credibility and path to market </li></ul></ul><ul><ul><li>TTSI - major drayage firm will demonstrate and buy first product </li></ul></ul>
  30. 30. Key Personnel TransPower Core Staff <ul><li>Mike Simon, CEO </li></ul><ul><ul><li>Co-founder and Co-CEO of ISE from 1995-2005 (other co-founder was David Mazaika, currently COO of Quantum Technologies) </li></ul></ul><ul><ul><li>Stanford engineering graduate (M.S.), also worked for 11 years at General Dynamics, 4 years at General Atomics </li></ul></ul><ul><ul><li>Product development visionary - principal catalyst for ISE gasoline hybrid and fuel cell hybrid products </li></ul></ul><ul><li>Other Key Personnel </li></ul><ul><ul><li>Jim Burns, CTO - former Director, Facility for Applied Manufacturing Enterprise (nationally recognized electric vehicle program), San Diego State University;25 years engineering experience </li></ul></ul><ul><ul><li>Tom Bartley, Manager, Strategic Development - Stanford MSEE, 40 years experience including 8 yrs at ISE </li></ul></ul><ul><ul><li>Christine Murray, Manager, Software Development - MS in Computer Science, 12 yrs experience including 10 yrs at Hewlett-Packard </li></ul></ul><ul><ul><li>Cuong Huynh, Manager, Marketing/Communications - BS in Aerospace Engineering, 25 yrs experience including 10 yrs at ISE </li></ul></ul>
  31. 31. Key Personnel TransPower Advisors <ul><li>McKinley Addy – former Project/Program Manager, Advanced Transportation Technologies and Life Cycle Analysis. Principal Author of CA State Alternative Fuels Plan and contributor to the Investment Plan for the State's $1.6 billion Alternative and Renewable Fuel and Vehicle Technology Funding Program </li></ul><ul><li>Jayson Cannon – former project manager, ISE; helped lead design and productionization of several hybrid drive and fuel cell vehicle products from 2002-2010; pursuing MBA at UC Berkeley </li></ul><ul><li>Joseph Olbermann – former engineering manager, Unique Mobility; extensive background in both electric vehicles and renewable energy; 34 years engineering experience </li></ul>
  32. 32. Key Personnel Team Members <ul><li>ISE (personnel actively supporting TransPower) </li></ul><ul><ul><li>Dr. Paul Scott - Chief Scientific Officer of ISE, 40 yrs experience including 10 years at ISE; leading expert on batteries, hydrogen combustion, fuel cells, and hybrid vehicle integration </li></ul></ul><ul><ul><li>Dr. Frederick Flett, VP of Engineering at ISE, 30 years experience including 10 years at Siemens VDO </li></ul></ul><ul><ul><li>Alex Bernasconi – Senior VP of Sales and Marketing at ISE, 30 years experience including 12 years at Freightliner </li></ul></ul><ul><li>Other Team Members </li></ul><ul><ul><li>Vic LaRosa, President, TTSI </li></ul></ul><ul><ul><li>Bob Drabecki, Director, Product Integration and Navistar Electronics Sales Teams, Navistar </li></ul></ul>
  33. 33. Conclusions
  34. 34. TransPower Strategic Plan Key Features <ul><li>Partnership Between Government and Private Sector </li></ul><ul><ul><li>Seeking $5 million in venture capital (signed engagement letter with Bay Capital Partners, CA investment bank, in Feb 2010) </li></ul></ul><ul><ul><li>Match with $5 million in early customer orders and public grants from 2010 through 2012 (focus on California-based entities) </li></ul></ul><ul><li>Perfect and Promote Technology thru Demo Vehicles </li></ul><ul><ul><li>Build 5 customer-funded and 2 company funded trucks thru 2012 </li></ul></ul><ul><ul><li>Total of 20 demonstration trucks through 2015 </li></ul></ul><ul><ul><li>Progression: port drayage -> refuse collection -> local delivery </li></ul></ul><ul><li>Dual Business Model </li></ul><ul><ul><li>Convert trucks to electric drive on after-market basis </li></ul></ul><ul><ul><li>Sell electric drive kits to truck manufacturers (starting in 2014) </li></ul></ul>
  35. 35. Near Term Focus <ul><li>Raise $5M in private capital </li></ul><ul><ul><li>Investor contacts initiated in March 2010 </li></ul></ul><ul><ul><li>Goal is to close on a deal within 6 months (by Sept 30, 2010) </li></ul></ul><ul><li>Secure public funding for “ElecTruck” project at ports </li></ul><ul><ul><li>2 demonstration drayage trucks to be deployed in 2011 </li></ul></ul><ul><ul><li>Will validate first-generation electric drive system and enable commercial orders to follow </li></ul></ul><ul><ul><li>Seeking $2 million in public grants to augment private investment </li></ul></ul><ul><li>Continue to build team </li></ul><ul><ul><li>Internal engineering, product development, marketing capabilities </li></ul></ul><ul><ul><li>Strengthen relationships with key partners ISE, Navistar, TTSI </li></ul></ul>