Signs Ten Year Supply Agreement with ITL/Eastlake Energy
For ‘Revenue in Excess of $400 Million Over a Ten-Year Period,’
Is Said to Be a ‘Game Changer’ for the Veteran EV Drive Supplier
UQM Technologies said Monday that the first purchase order have been issued for PowerPhase electric propulsion systems for ITL Efficiency in China. Based on projected volume shipments, the relationship could mean “revenue in excess of $400 million over a ten-year period,” UQM said.
“Initially, the PowerPhase Pro 135 electric propulsion system will be sold to address the 6- to 8-meter shuttle bus market in China, with larger delivery truck and transit bus applications slated to begin in early 2017 with the PowerPhase HD 250 system,” states a release.
“The signing of this supply agreement with ITL is a major milestone for UQM, and is the result of many years of focused attention to the China market,” UQM interim president and COO Joe Mitchell said in the ITL announcement.
‘A Major Global Provider’
“This achievement solidifies our long-term strategy to become a major global provider of electric propulsion systems; particularly in China, the largest market in the world for electric vehicles,” Mitchell said.
Also according to the UQM announcement,
- Development, test and certification programs are set for 2016, ramping up to start of production in 2017;
- First year production will take place in Colorado with plans to manufacture UQM products in China thereafter;
- The Agreement provides electric propulsion system for three market segments: 6- to 8-meter shuttle buses, light- to medium-duty delivery trucks, and 10- to 12-meter transit buses; and
- Six- to 8-meter bus platforms manufactured in Colorado will utilize existing PowerPhase Pro 135 inventory enhancing UQM’s liquidity position.
Production is to begin at UQM’s Colorado plant in 2017, with plans to produce the electric vehicles in China beginning in 2018. UQM will be waiting for the “green light” on production after completion of test and certification processes during 2016. The first 3,000 units are expected to ship in 2017. That first order will include UQM’s PowerPhase Pro 135 electric propulsion system for the 6- to 8-meter shuttle bus market in China. Larger delivery truck and transit bus applications are scheduled to begin production in early 2017 with the PowerPhase HD 250 system.
Beijing-based ITL is a subsidiary of China’s Eastlake New Energy and is responsible for the entire electric drive supply to Eastlake and its subsidiaries, UQM says. “Because of its operational independence from Eastlake, ITL’s goal is to become a major e-drive system supplier to the entire China market.”
The View from Atlanta
China is an important market for UQM, and investors are very interested in seeing how this deal goes, says Randy Hough, a shareholder and investment advisor at Legacy Partners Financial in Atlanta. UQM supplies component parts to Keshi Group, a Chinese manufacturer of vehicles used in the mining industry. UQM also recently signed a memorandum of understanding with an unnamed Chinese company, Hough said.
Earlier this year, UQM announced that it will be providing its PowerPhase Pro 100 electric motor/controller systems for one-ton battery truck conversions in Korea (F&F, February 6). The customer, Power Plaza, has been working directly with the Seoul city government on this project. The initial conversions were scheduled to be placed in several local postal fleets for testing and evaluation. The Korea project has worked out well for UQM, Hough says, noting that UQM has indicated that the relationship is growing.
“Attaining this agreement is testimony to the quality and performance of our products that are second to none,” Mitchell said.
“We are excited to partner with ITL and become a dominant player in the new energy vehicle market in China. We believe this agreement is a game changer for UQM and puts us on a realistic and timely path to long term viability and profitability.”
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Source: UQM Technologies with Fleets & Fuels follow-up