Bring on the dancing robots. I have had Echo & the Bunnymen's seminal track, "Bring on the Dancing Horses," running through my head as I have followed the global transportation industry's moves toward electrification. Elon Musk can bring on stage a guy in a robot suit at Tesla's (TSLA) AI Day and grab all the media attention, but the move toward electrification won't be that simple. Also, crucially, it won't just involve entry-luxury and luxury cars, which comprise the entirety of Tesla's current offer.
What I am talking about here is process. The process of shifting from vehicles powered by internal combustion engines to those powered by batteries. This process is enormous, global, and will cost trillions of dollars. Governments will subsidize some of that, but the real economic value (and, presumably, share price appreciation) will be created by the true innovators.
At the recent Management Access Conference hosted by my firm, Excelsior Capital Partners, I featured CEOs from two companies that are leading the charge toward powertrain electrification. William Trainer of Vicinity Motor (VEV) described how Vicinity will use the revenues from its existing ICE-powered bus business to fund a new completely electric offer called the Lightning, This product features BMW (BMWYY)-supplied batteries located under the bus' floor, as opposed to the Rube Goldberg-style on-the-roof solutions offered by companies like Proterra (PTRA) , which I have mentioned as an attractive short in prior columns.
Vicinity's solution makes sense, but these solutions will need to be designed in, not retroactively jerry-rigged, and that's where Exro's (EXROF) CEO Sue Ozdemir and the company' s core coil driver technology enter the picture. Batteries produce power in direct current, or DC, and motors spin a vehicle's wheels using power inputs captured in alternating current, or AC, like the kind you get from your wall outlet at home. That's a gross oversimplification of the process, admittedly, but what it points out is that there needs to be an inverter, which changes voltage from DC to AC. Exro's coil drivers enable multiple torque profiles to be created from the same electrical input, so it's especially useful for vehicles that are heavier than passenger cars, and buses obviously fit that description.
Vicinity and Exro in April announced a supply agreement under which Exro will supply its coil drivers to Vicinity for testing and validation as key powertrain components for Vicinity's future Lightning EV buses. That is synergy.
So, even as I am still processing the results from the ExCap conference, I decided that it would be most value-added to host a call featuring Sue and Will to talk about their cooperation. Call details are below, and, of course, there is no charge for investors to listen in.
No PowerPoints, no hype, just two CEOs discussing how their companies will work together to produce a revolutionary product. The process is as important as the end result. More so, actually, and please don't forget that. Elon will hog the spotlight, but it is small somewhat-off-the-beaten-track companies (both companies are headquartered in Western Canada) that are changing the world.
I can't wait to host the conversation, and I hope you can join, as well, on Sept. 20, 2 p.m. ET here: https://us02web.zoom.us/j/84521633922.
