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ALTe Gains Orders/Financing/Facilities for Combustion Engine Conversions

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  • Felix Kramer
    What company will be first to make a business in large-scale conversions of internal combustion engine (ICE) vehicles? It s a new race, with a promising new
    Message 1 of 1 , Mar 22 5:06 PM
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      What company will be first to make a business in large-scale
      conversions of internal combustion engine (ICE) vehicles? It's a new
      race, with a promising new contender. ALTe, a Michigan company with a
      management team experienced in automotive technology and business,
      has just come out of stealth. It made its debut not at "alternative
      fuels" event but at the 2010 National Truck Equipment Association
      (NTEA) Work Truck Show and Green Truck Summit, March 11 in St. Louis.
      The company is at http://www.altellc.com . Below we summarize and
      outline its designs, achievements, and future plans, including
      excerpts from the company's released information and a Forbes
      Magazine profile. And we compare its technology with another
      promising gas-guzzler conversion.

      (Shortly after it goes out on email, this posting will also be
      viewable at http://www.calcars.org/news-archive.html -- there you can
      add CalCars-News to your RSS feed.)

      ALTe is big news. It's among the positive developments pointing to
      the potential for CalCars' "Big Fix" campaign to succeed alongside
      the arrival of new plug-in vehicles. There's movement at the Postal
      Service to begin to electrify its fleet. Proposed Congressional
      legislation, backed by leaders of the Postal Regulatory Commission,
      is building support. USPS has picked five companies to demonstrate
      plug-in technology on retrofit delivery trucks -- see
      http://www.edrive.org/news . Candidates are responding to our efforts
      to recruit a SEER (successful serial entrepreneur) to lead a global
      retrofit industry http://www.calcars.org/calcars-news/1093.html .
      Check for new developments at CalCars-News.

      At http://www.calcars.org/ice-conversions.html we list the companies
      that have announced they're working toward volume production of PHEV
      and EV conversions of ICE vehicles. Among these -- and others still
      under wraps -- we know of none that have come as far as ALTe, both in
      production engineering and in assembling the team, resources,
      facilities, connections, and customers for volume retrofits.

      The market opportunity is huge. ALTe says its designs could be
      applied to 80% of the vehicles found in our light-to-medium-duty
      fleet, including 70 million light trucks, 32 million light vans, 5
      million medium trucks, and hundreds of thousands of commercial vans,
      shuttle buses, taxis, limos, military vehicles, etc. ALTe, looking at
      vehicles in fleets of five or more, finds almost eight million just at Ford.


      ALTe made a big splash when it unveiled its prototype Ford F-150
      conversion (see 2 photos and 2 drawings at our ICE Conversions page).
      While we expect to see companies with many business models and
      technologies, ALTe already provides validation to the "Big Fix"
      strategy. We'll talk later about technical aspects; the company's
      promising accomplishments on the business side include:
      * FACILITIES & SOURCING: a 185,000 assembly plant in Auburn Hills, MI
      and a substantial supply chain.
      * FIRST ORDER: up to $60M/year from Gulf Stream Coach for 3,000
      shuttle bus conversions for four years; other potential corporate and
      military vehicle retrofit projects (ALTe is working with the
      innovative U.S. Army TARDEC program).
      * FINANCING: $15 million committed or raised, raising $15M more;
      $18.3M in Michigan state incentives; application pending for $101M
      from the U.S. Department of Energy Advanced Technology Vehicles
      Manufacturing Loan Program. (This program funded large automakers as
      well as Tesla and Fisker; Bright Automotive is also waiting.) ALTe
      plans to produce retrofits eligible for the federal 10% buyer tax
      credit for conversions (maximum is $4,000 per vehicle).
      * SCHEDULE: customer evaluation prototypes by October 2010; with
      funds from expected, scaling up for mass production a year later.
      * STRATEGY: plans start with a retrofit business, expand to licensing
      of technology and selling components, and eventual partnerships with
      major and niche automakers for new vehicles.
      * DISTRIBUTION: plans include individual national accounts, big box
      retailers, partnering with a nationwide network of auto service
      centers, a network of dealers, fleet depots, and smaller garages.
      * INDUSTRY DOOR-OPENERS: joinig the Board of Directors are Thomas
      LaSorda, former Chrysler Group President and CEO, and Steven Landry,
      former Chrysler EVP of North American Sales and Marketing and Global
      Service and Parts.


      MISSION: "ALTe LLC is a Michigan-based technology company and mass
      producer of electric propulsion systems. ALTe is committed to leading
      the evolution of the automobile industry from gasoline-powered
      vehicles to electric technology. With a unique combination of Detroit
      and Silicon Valley automotive engineering experience, the ALTe team
      is dedicated to innovation, excellence in engineering and operations,
      and advancing sustainable mobility for mankind. The company will
      provide electric and plug in hybrid vehicles at a very significant
      scale, faster than any of the known automakers or potentially
      competing powertrain providers."

      DESCRIPTION: "ALTe, LLC is an automotive supplier engaged in
      engineering, development, assembling and integrating of
      electro-mechanical automobile components and software to create
      Series Plug-In Hybrid Electric Vehicle (SPHEV) and pure electric
      vehicle powertrains. These powertrain systems deliver dramatic fuel
      economy improvements on the order of 60-200% when used in high
      mileage fleet applications. ALTe has targeted fleet applications, as
      the normal passenger car market does not drive enough miles per year
      to receive financial payback on the incremental cost incumbent in a
      hybrid or electric powertrain system."

      "ALTe is positioning itself to be a "black box" turnkey system that
      is the "Intel Inside" for hybrid vehicles in the transportation
      industry. We plan to start production in the USA, but already have
      interest in 3 other countries and have low cost solutions that can
      work for developing nations. The company business plan is divided
      into two phases: initially we will be producing powertrain systems
      "kits" for use in the retrofit of used vehicles from normal internal
      combustion engine based vehicles to new series PHEV based vehicles.
      In the second phase, we will use these new Series PHEV powertrains
      installed in a rolling lightweight chassis to serve as the foundation
      for new families of vehicles serving the fleet and niche vehicle industry."

      CEO: "We are very excited to unveil our new prototype vehicle at this
      important industry event," said John Thomas, CEO of ALTe LLC. "Though
      the prototype displays our technology as the powertrain system
      replacing a 4.6L gasoline V8 for the Ford F-150, the system can be
      applied to several vehicle types running a variety of fuels. This is
      due to the 'plug-and-play' modularity of our system, which enables
      the powertrain to expand or contract depending on the vehicle type.
      We believe our technology will lead the revolution of sustainable mobility."

      MICHIGAN GOVERNOR: "We're pleased that ALTe has chosen Michigan and
      Auburn Hills for its new assembly facility, potentially generating
      more than a thousand new jobs in southeast Michigan," said Governor
      Jennifer M. Granholm. "This project further boosts our ongoing
      efforts to diversify the state's economy, and shows that businesses
      are continuing to choose Michigan because of our highly-skilled
      workers and competitive business climate."

      COST BENEFITS: "uniquely ambitious in terms of timing and scale, with
      plans to launch in Q4 2011 and ramp up to 90,000 powertrains/year
      soon afterwards. The cost of retrofitting to ALTe's REEV powertrain
      is offset quickly by fuel savings in fleet vehicles driven 50,000
      miles per year or more. The "payback" can be as short as one year.
      Furthermore, many corporate, regional and local fleet owners and
      operators are being forced to continue to use their current fleet as
      their replacement fund budgets have been drastically reduced. ALTe
      offers them, for the first time ever, a feasible option to extend the
      life of their fleet vehicles for several years where they also
      benefit from doubled fuel economy at an affordable incremental cost."

      MARKETS: "ALTe will not be competing for a percentage of the new car
      market (11 million vehicles projected in 2010). The Company will be
      retrofitting a fraction of the 107 million light- medium trucks, many
      of which are in fleets in companies like SoCalEd, AT&T, Verizon and
      FedEx. Essentially, we are targeting 6.9% of the commercial fleet
      market or 1.36% of the commercial vehicle market. In addition, there
      are nearly 500,000 non-tactical military vehicles and ALTe is in
      discussions with the US Army TARDEC group to convert some of those vehicles."

      JOBS: "ALTe will be increasing local employment as it engages many
      suppliers to produce ALTe designed motors, generators, controller,
      battery boxes, high voltage cables and high voltage chargers. The
      State of Michigan Economic Development Office estimates a 3.67 times
      multiplier for the ALTe 400 new direct jobs created resulting in a
      potential of 1,468 new jobs in the supply base and local community.
      At its peak volume, ALTe will be procuring $1.6B of parts from the
      supply base on an annual basis. The hybrid and electric supply base
      for ALTe is very excited and is organizing quickly. Evidence of this
      is demonstrated with Letters of Intent signed or in process with
      major suppliers such as A123 Systems, Dow-Kokam, Remy Motors, Nugen
      Motors, EE Trex charger inverters, Methode Electronics,
      Fiat-Chrysler, and others."


      The conversion process consists of replacing most of a vehicle's
      whole drivetrain with its modular series hybrid system (like that in
      the Chevy Volt "extended range electric vehicle"). It can be sized
      for vehicles from pickup truck size on up through medium-sized
      trucks, vans, and light buses. Components/processes:

      * ENGINE: up to 5.4L gas or Diesel is replaced with a 2.0L or 3.3L
      gas engine driving one or two 82 kW permanent magnet (PM) generators.
      * AUTOMATIC TRANSMISSION: kept but re-tuned, with the torque
      converter removed to enable 90+% efficiency); the motor/generators
      connect to wheels through the transmission.
      * ACCESSORIES: retained but electrically driven.
      * MOTOR/GENERATORS: 2-3 82 kW PM, the same ones used for the
      engine-generator set.
      * BATTERY: 15-70 kWh Li-ion battery pack, depending on vehicle size,
      for up to 52 miles of pure electric (EV) driving per charge.
      * OPERATION: Vehicle is driven as an EV until the battery is
      depleted, then the engine is started to keep the battery from further
      discharge. The engine is not mechanically connected to the wheels.
      * PROJECTED FUEL ECONOMY: As a hybrid -- after a 40-50 mile
      all-electric range -- mileage expected to improve by 55-130% over the
      original vehicle (25-32 MPG vs. 14-16 MPG for an unconverted Ford F-150).
      * ATTENTION TO DETAIL, including a liquid battery cooling system, and
      additional weight of as little as 200 lb.
      * CONVERSION COSTS of as little as $21k per vehicle.

      RON COMPARES ALTe WITH HEVT: Previously we've highlighted the
      prototype produced by Chicago-based Hybrid Electric Vehicle
      Technologies http://www.hevt.com . This F-150 retrofit uses a
      different design. Below is a similar description (with a caveat that
      HEVT is not nearly as far along as ALTe in designing a vehicle that
      can be efficiently and economically mass-produced), followed by Ron's
      general comments. HEVT's product is a series/parallel conversion:

      * ENGINE, TRANSMISSION, AND ACCESSORIES: retained as is (this means
      the engine must start periodically until the accessories are
      electrified in a later version).
      * MOTOR/GENERATOR: added behind and directly powering the
      differential, allowing EV driving with a stopped or idling engine (no
      transmission in the EV drive path increases mechanical EV efficiency
      but results in higher motor torque requirements and potentially lower
      motor efficiency).
      * BATTERY: Li-ion, sized as needed (approx. 20 kWh for 40-mile F-150 EV range).
      * OPERATION: Vehicle is driven as an EV until the battery is
      depleted, with the engine running accessories as needed; then the
      vehicle drives as a hybrid.
      * PROJECTED FUEL ECONOMY: As a hybrid -- after a 30 mile all-electric
      range -- expected improvement of 30% (current) - 60% (next
      generation), (20-26 MPG vs. 14-16MPG for an unconverted Ford F-150).
      * CONVERSION COSTS in high volumes are projected to be around
      $15,000, lower than for ALTe, as the engine is not replaced and only
      a single motor/generator is required.
      * PRODUCTION ENGINEERING: HEVT has not yet embarked on this process,
      which will affect design and costs
      * CONTROLS: Coordinated engine, transmission, and motor/generator
      control is very complex and difficult (much more so than for a series
      hybrid). This is HEVT's specialty.

      Technologically, each method has advantages and disadvantages. Though
      comparisons also involve general differences between series and
      series/parallel PHEVs, my previous investigations have led me to
      conclude, despite strong claims by each technology's proponents, that
      the theoretical differences in efficiency between the two
      architectures may be eclipsed by implementation details and
      optimization. Replacing the engine (as does ALTe) allows downsizing,
      fine tuning, and manufacturing control of the whole drivetrain for
      efficiency and emissions. But it also entails the expense of a new
      engine and the mechanical systems to make it fit. If all but the
      basic concepts were equal (which they aren't), ALTe conversions could
      be expected to be both more expensive and more effective than HEVT conversions.

      MEDIA COVERAGE: In addition to a brief story (with graphics) at Green
      Car Congress
      http://www.greencarcongress.com/2010/03/alte-f150-20100312.html you
      can read the Forbes profile, "One Energy Startup's Tireless Quest For
      Capital" at

      Chief Executive John Thomas, a 47-year-old mechanical engineer and
      former head of the Michigan sedan program at electric-car maker
      Tesla, is expansive about Alte's potential. Consider, he says, the
      13,500 sedan cabs in New York City, plus another 30,000 livery
      vehicles, mostly Lincoln Town Cars. "We want to replace the drive
      trains of every one of them," he declares. Retrofitting just a tiny
      fraction of the entire U.S. fleet inventory--including shuttle buses,
      commercial vans, limousines, police cars and post office
      trucks--could generate $2 billion in annual revenue by 2013. Then
      there's the global market: Thomas has met with the Moroccan
      government about converting that country's 100,000 taxis. He's also
      salivating over a Spanish mandate to have 1 million of the country's
      cars running hybrid or electric-drive trains by 2014.

      Alte's leaders include cofounders W. Jeff DeFrank and Nam Thai-Tang.
      Both men came from the engineering ranks at Tesla and, before that,
      Ford Motor, where Thai-Tang logged 19 years. DeFrank also worked on
      nuclear reactors for the Navy. Chief Financial Officer Roy S. Clauss
      spent 30 years as an investment banker on Wall Street. Early this
      month ex-Chrysler chief executive Thomas LaSorda signed on as an
      investor and board member (he won't disclose the size of his stake).
      Says LaSorda: "I think the plan here will succeed because they're not
      going after markets that the big car companies target."

      WATCH FOR MORE NEWS from ALTe and other ICE conversion startups, and,
      we hope, some of the larger integration firms. For more, see the two
      photos and two graphics at
      http://www.calcars.org/ice-conversions.html -- and be sure to catch
      the animation of its 13-hour installation process on ALTe's products
      page http://www.altellc.com/product.php .

      -- -- -- -- -- -- -- -- -- -- -- --
      Felix Kramer fkramer@...
      Founder California Cars Initiative
      -- -- -- -- -- -- -- -- -- -- -- --
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