UQM Is Still Unique
By Bill Moore
Dr. Peter Harrop once said that 50% of the electric vehicle industry is profitable, just not the 50% that comprises the automotive industry.
One company that has successfully had its feet in both halves is UQM, formerly known as Unique Mobility, with headquarters located in Golden, Colorado. Started in 1967, the company has managed to survive the vicissitudes of the alternative fuel vehicle business and enter into the new millennium as an increasingly important player in the merging electric, hybrid and fuel cell arena.
EV World had the opportunity to talk at length with Bill Rankin, the company CEO about not only how the company has managed to survive and grow, but also about its newest product and the future of the company. This is part one of that three part interview.
We asked Rankin to give us an overview of the company and its history. It originally developed some vehicles for small niche markets, shifting in the mid-to-late 70s to battery electric vehicle development. About that time, it invented what Rankin calls an all-composite, built-from-the-ground-up electric vehicle. It built 50 of these for the US Department of Energy, which placed them in service at various Department facilities.
He said, "it was a very high performing, very efficient vehicle that ultimately set the stage for all the work that came later.
"In about '83 as a result of our experiences with that electric vehicle program, we started focusing on propulsion systems. It became very apparent to us that there really were no electric motor control systems that you could buy that would make vehicles perform the way customers expect them to. They were either just too heavy or would over-heat."
So the company began to develop a line of advanced brushless electric motors using powerful rare earth magnets. To these "power dense" motors the company then added their own patented electronic control systems.
By the time of the very first Sunrayce solar-powered car competition in 1987, 18 of the 32 participating teams had purchased their motors and controllers from Unique Mobility, Rankin noted with obvious pride. "We certainly didn't give them away," he added, pointing out that the teams wanted to win and they apparently believed UQM machines would give them that edge.
This paved the way for a realistic transition into the automotive mainstream with BMW approaching the company to develop a series of 15 electric-drive cars.
"As a result of that exposure nearly every automobile company in the world came to us and acquired hardware in some form or another for evaluation and [testing], which is most of what's been happening with EVs during that period," Rankin stated.
It was California's newly passed ZEV mandate that was fueling much of this interest on the part of automakers, he admits. While this fury of activity looked promising at the time, UQM wisely recognized that it shouldn't put all its proverbial eggs in the ZEV basket. So when Invacare, the largest electric wheelchair maker in the United States, approached the company about building motors for them, UQM began to take a serious interest in what Peter Harrop called the 50% of the business that was profitable; non-road electric vehicles.
"We developed the propulsion system for their top-end line [wheelchair], a gearless, brushless design [that's] quite revolutionary, and we're in volume production for them today."
It was a combination of the Invacare contract and the urging of major automakers that compelled UQM to take a serious look at their manufacturing capabilities, Rankin explained.
"Some of our major customers like the GMs and others challenged us by saying, ŒYou've got great technology but how are you going to make the product in volume production if we choose to go forward with you?' We didn't have the factories to get the order. We didn't have the order to justify building the factories.
"So during a period of opportunity, we were able to raise some money and we acquired two contract manufacturing companies, the primary purpose of which was to put credibility on the table as far as being a manufacturer, and also provide strong cash flow and a basis for growth."
These acquisitions occurred in 1998, in the middle of the stock market boom in the US. Rankin noted that the company now attracts a "bevy" of big name clients including GM, John Deere, and Invacare.
Surviving In Uncertain Times
EV World next asked Rankin what he considered where the principle reasons the company has remained a viable player for so long in such an uncertain marketplace as EVs.
He answered that there are several key factors he can point to starting with how UQM funds most of its R&D.
"We were dependent on going to potential customers like the GMs, John Deeres and others; and writing proposals to apply our portfolio of technologies, which is extensive. I think at one point in time we were bragging about $40 million invested in our technology, which results in the patents and know-how and software tools to quickly design our machines.
"As result of that, we are able to get companies to come to us who see our technology being a way to advantage their products in the marketplace through our technology; and they contract with us to apply our technology base to develop specific products for them.
"So, basically, all of our engineering is contracted out to customers, so we have no internal R&D expense. We're able to get nearly all of our money contract-funded for engineering staff."
The second factor was the company's acquisition of its two manufacturing firms, one in Missouri and the other in Colorado. Both are providing the UQM with good cash flow, enough Rankin confided to obviate any need to go back to the equities market for additional funds.
"In the old days we were like $4 million in revenue and were losing about $4 million, which you can't do that forever. And with the acquisitions, we had a pretty big step up in revenue and a whole new base of customers that were contracting us to manufacture product for them as a result of those acquisitions. Together they've allowed us to meet our goal, which is currently to maintain Š positive earnings before taxes, depreciation, amortization Š so basically cash flowing positive, not having to consume cash to sustain the business. We think that is a pretty good model, " Rankin stated.
He observed that a number of R&D companies are in cash burn mode with their "heads down in serious development" who hope that when they're done, someone will buy what they have.
"We think it's a pretty strong measure of our value that companies come to us and pay us to apply our technology for their use, which means they must believe there is value in it."
One such an example is GM who came to UQM and hired them to develop the hybrid-electric drive in their Precept PNGV concept vehicle. "That's our starter-motor-generator that's in their vehicle." Rankin believes GM came to his company because of a long-standing relationship and because UQM's technology and proposal "met the mail."
One Thing Leads To Another
We asked Rankin to fill us in on the status of a number of different EV projects that his company has been involved in over the last half decade including a slick little city EV and an awesome hybrid Humvee military truck.
"Most of the pure on-road electric work has pretty much fallen by the wayside, not only from our view but also from the OEM's view. There's not a whole lot going on. They've pretty much transitioned their way over to hybrids because the batteries weren't capable of meeting the markets expectations."
"So the city car was a great tool to help a number of OEMs internationally to get a feel for what we could do. [It was] a tremendously performing car." Rankin pointed out that the propulsion motor in their city-class EV ultimately found its way into wheel motors on the military hybrid-Humvee project.
"That machine puts out a peak power of a hundred horsepower, and the hybrid Humvee has four motors, one per wheel, four hundred horsepower to the ground. [It] does zero to 50 in eight seconds, weighs four-and-a-half-tons, can climb a 50 percent grade, is a stationary power plant so when it gets to its destination it can run a field hospital, telecommunications site. . . it can actually run a neighborhood, in terms of its power on board. . . It can also run stealth. You can shut the engine off and run pure electric in a very quiet, non-heat signature mode."
Rankin explained that the hybrid-Humvee program is now in its second iteration. That Humvee uses three larger UQM drive motors, a 75kW (100 HP continuous) machine that serves as the onboard generator, and one in each axle.
"So, we're supplying to that program the propulsion motor controllers and controllers, as well as the rotating generator with the electronics. That is actually going forward. AM General did receive a contract to a more production-intent program. There are several vehicles under build, which will soon be released for additional testing."
Rankin noted that he is seeing a great deal of interest in this technology from the military, so much so that the company has added a retired US Army general to its board. In addition, UQM is part of a Boeing team that has successfully won the first round in a competition to develop advanced military trucks for the 21st century.
"The military is interested in developing a lighter weight, more agile fighting force. Part of that process is to look at alternative propulsion and there is the focus on hybrids and we were part of the Boeing team in preparing work for the military for this next class of vehicle."
In addition to its work on the hybrid-Humvee, UQM also supplies the wheel motors to AVS of Chattanooga, TN for their 30-35 ft. electric buses. The company is also working with UPS, providing the drive motors and controls for a prototype hybrid-electric delivery van.
Another high profile client is John Deere, the farm equipment manufacturer, and while Rankin said he wasn't at liberty to discuss those projects plural - - , he did indicate that they were hybrid-electric-based.
All this interest in hybrid-electric technology within what are clearly niche markets indicates to Rankin that there are targeted markets where the advantages in fuel savings clearly outweighs concerns over added cost.
"Yes, we're involved with the carmakers and we hope they are wildly successful and adopt our technology in maybe more than one application, but we think that even a surer bet is some of these niche markets where the systems actually save money. There's an economic advantage that is immediate and apparent in fuel economy savings where someone's paying a fuel bill like UPS. Or the people who use John Deere [products] can see an immediate benefit by bringing electric propulsion or electric power to bear, plus all the additional benefits of onboard power. We see those niche markets being a major opportunity."
"And from a R&D point of view, our company's got more R&D work going on now than I can ever remember having, and a big jump up from last year. And with the economy in the state it's in, which is not real great for nearly everybody, we haven't seen any decrease. In fact, we've seen a fairly significant increase in contracted engineering from a wide range of customers to apply our technology to their end use."
CONTINUED NEXT WEEK. . .
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