A sample text widget

Etiam pulvinar consectetur dolor sed malesuada. Ut convallis euismod dolor nec pretium. Nunc ut tristique massa.

Nam sodales mi vitae dolor ullamcorper et vulputate enim accumsan. Morbi orci magna, tincidunt vitae molestie nec, molestie at mi. Nulla nulla lorem, suscipit in posuere in, interdum non magna.

USA/China: ALTe, US Electric Drive Train Maker, Forms JV in China

Add electric/hybrid drive train retrofits to the list of U.S.-built battery and green automotive tech heading to China.
Jeff St. John: August 31, 2012

ALTe, the Auburn Hills, Mich.-based electric power train maker has become the latest U.S.-based electric transportation company to seek its fortunes in China — looking to incorporate its product into cars, trucks, vans and other fleet vehicles,

On Friday, ALTe announced a $200 million joint venture with China’s MESA Century New Energy Technology, aimed at building its company’s electric drive train components into hybrid-electric vehicles for China’s roads.

The deal includes a $70 million contract to support ALTe’s engineering work in the United States, CEO and co-founder John Thomas said in an interview. The company has raised about $23 million to date, but needed more capital to scale, and was targeting about $100 million in new investment, as well as a request for a $65 million Department of Energy loan, he said.

But ALTe recently gave up its quest for DOE backing and turned to China. The new cash injection that comes with the MESA JV will reduce ALTe’s future capital-raising needs to about $50 million total, compared to $100 million, he said.

The deal helps ALTe overcome a Catch-22 it faces as a new entrant to the automotive market. As Thomas put it, without mass production in place, it can’t get the financing to scale up to mass production volumes.

The new JV, formally named ‘MESA Industrial Technology Corp.,’ aims to solve that by churning out about 240,000 hybrid drive trains per year for “medium-duty” vehicles for China’s market. Medium duty includes everything down to vehicles with a displacement weight of 8,000 pounds or so, which could include vans and light trucks as well as buses and heavy-duty trucks, Thomas noted.

China, which expects the number of vehicles on its roads to triple between now and 2030, recently announced plans to spend up to 2 billion yuan ($315 million) per year to boost its number of “alternative-energy” vehicles to 500,000 by 2015 and 5 million by 2020.

Several big automakers, including General Motors and Volkswagen, are planning EV or PHEV vehicles for China’s market. They’re joined by domestic giants like BAIC, First Automotive Works (FAW) and Dongfeng, along with Chinese startup BYD, which is backed by U.S. billionaire investor Warren Buffett. Meanwhile, Los Angeles-based startup Coda Automotive is building electric cars for U.S. markets in Chinese factories.

ALTe, for its part, has retrofitted Ford F150 trucks and E350 vans with all-electric and hybrid electric drive trains, and has tested them out with utility and corporate clients like Frito-Lay and Pacific Gas & Electric.

The MESA deal is concentrating on series hybrid-electric drive trains, Thomas said — a nod to the fact that range anxiety still plays a role in buying decisions of government and corporate fleet buyers, as well as individual consumers — though it could extend to all-EV units in the future, he said.


Leave a Reply