Motiv Power Systems, which converts medium-duty truck chassis from gasoline to run on zero-emission electricity from batteries, is getting $60 million in equity funding from Winnebago Industries Inc. (NYSE: WGO) and a private holding company in Colorado.
The money will allow Motiv to pay off debt and open an engineering facility in Detroit to grow its business with large fleets, Motiv CEO Matt O’Leary told FreightWaves.
“We have been continuing to build our sales order bank and bring in some of the larger fleets,” O’Leary said. “It will take some time to win over these large fleets, but we are starting to get those wins.”
GMAG Holdings Corp., the original investor in Motiv in a $7 million raise five years ago, said Motiv has justified further investment to scale up its decade-old business.
“We strongly believe in Motiv’s technology as well as the management team driving its growth,” said Matt Gallaher, GMAG Holdings chief financial officer. “We are excited to further support them as the company scales to meet the demand of the growing commercial EV market.”
Motiv’s Electric Powered Intelligent Chassis (EPIC) system has accumulated more than 750,000 real-world customer miles from Aramark, the U.S. Postal Service and more than a dozen school districts. It is a drop-in replacement for a gasoline engine.
Motiv’s conversions of massive Winnebago recreational chassis led to a rare investment by the parent company followed by participation in the Series B round.
“Our customers are hungry for all-electric mobile solutions developed on our commercial shells, especially in California,” said Ashis Bhattacharya, Winnebago vice president of Strategic Planning and Development. “We look forward to continuing our collaboration with Motiv and growing the electric commercial segment worldwide.”
The EPIC powertrain is certified by the California Air Resources Board (CARB) and the U.S. General Services Administration (GSA). Motiv provides all-electric chassis for Ford Motor Co. (NYSE: F) commercial trucks and buses.
Motiv configurations include Class 4-5 and a few Class 6 medium-duty step vans, box trucks, work trucks, shuttle buses, school buses, trolleys and other specialty vehicles. Motiv may create systems for Class 7 trucks but will leave Class 8 heavy-duty electric models to traditional truck makers, O’Leary said.
In addition to paying off and converting debt to equity, Motiv now has the resources to set up an applications engineering center in Detroit. It will be close to the Detroit Chassis Plant, where it partners to install batteries made by BMW into Ford F59 and E-450 truck chassis.
“They’re part of our ramp-up strategy for higher volume,” O’Leary said. “So, we want somebody positioned there full-time who can help coordinate that.”
Motiv is a converter as opposed to a retrofitter, which strips out and replaces components and systems. Motiv starts with a bare chassis, integrates the electric motor and battery packs and works with walk-in body-builders like Utilimaster, Morgan Olson, and others.
“A lot of the work we do is packaging, wire routing, that type of thing, “ O’Leary said. “That’s a lot easier to do” in the Midwest than remotely in Foster City, California, Motiv’s headquarters and research and development base.
“At the lower volumes, it’s hard to justify putting a [production] line in,” he said. “But the partnership we have with the Detroit Chassis Plant is an example where, as volumes ramp up, we will start building on a small stub line.”
A start-up’s growth
Motiv was founded in 2009 by current Chief Technology Officer Jim Castelaz. He led the company until O’Leary became CEO in February of this year.
O’Leary was formerly vehicle line director for trucks, SUVs and commercial vehicles at Ford. He joined the Motiv board three years ago, bringing the business acumen that encouraged customers and investors.
“I do think it’s important to have somebody that’s recognized for understanding the business side of things, understanding the automotive industry inside and out, and having the contacts,” O’Leary said.
“When I go talk to some of these major customers, I bring 38 years of experience with Ford Motor Company to the table. I have a tendency to under-promise and over-deliver. We’re going to stand behind what we put out there, and that rings true with our customers and with the partners as we go out and speak financing.”