Deal focus: H&Q backs flexible EV player

General Motors announced earlier this year that its powertrain division would be renamed GM Global Propulsion Systems, reflecting the shift in focus to electric vehicles (EVs), plug-in hybrid electric vehicles (PHEVs) and hydrogen fuel cells. The company also noted that nearly half of the 8,600 designers and engineers in this division are working on alternative or electrified propulsion systems.

The fruits of these labors are apparent in the Chevrolet Bolt, a PHEV car that will this year be joined by a fully electric sister vehicle capable of traveling 238 miles on a single charge. The number, revealed earlier in September, is significant: it beats the 215-mile range of the forthcoming Tesla Model 3.

The battle for market position as EVs move into the mainstream has drawn in the likes of BMW, Nissan, Toyota and Ford Motor. However, not all automakers are willing to invest heavily in the fight, or at least not yet. Companies in the latter category are seen as prime targets for Efficient Drivetrains (EDI), an EV systems developer that recently received $7.8 million in funding - the first tranche of a $15 million Series C round - from H&Q Asia Pacific and Jiaxing Daxin Investment Partnership.

"GM, Ford and Toyota are the top three with their own solutions, they have been investing in this area for 10 years. Those big companies are not targets for EDI, although they could probably come to some kind of arrangement. Then there are manufacturers in China, India, Europe, Australia and Brazil that all require this newer mode of driving technology," says Robert Shen, a managing director with H&Q.

EDI was founded in 2006 but its core technology is the product of several generations of vehicles developed through projects at the University of California Davis (UCD). Andy Frank, a professor at the university who is credited as one of the inventors of the PHEV, led these efforts. He serves as EDI's chief technology officer. The company has a presence in California, Colorado and China, and its customers range from Fortune Global 100 companies to start-ups.

The key to EDI's technology is flexibility. First, its powertrain systems are suitable for load-carrying vehicles, whereas most industry players are focusing on making EVs as light as possible. Second, the systems come with four modes: EV and EV-plus for neighbourhood trips, and series hybrid and parallel hybrid for more demanding driving conditions. The new funding will be used to keep pace with rising orders from carmakers seeking to meet emissions requirements, but in an affordable way.

"Robert and I have been studying the industry for 2-3 years; we looked at everything from battery companies to EV bus companies, but we think EDI has the core technology and potential to address demand," adds Benson He, also a managing director at H&Q. "This deal is also in line with our strategy to focus on cross-border deals. The technology is rooted in the US and is expanding into different countries in Asia."

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Greater China
• North America
• Industrials
• Technology
• Expansion
• China
• USA
• manufacturing
• automobiles
• Growth capital
• H&Q Asia Pacific