ePower Engine Systems

Jul 22, 2013

John Petersen Last week I spent a couple days with ePower Engine Systems workingmy way through a variety of business and technical due diligenceissues. As always happens with new clients, it was a full immersioncourse in how ePower’s technology works, what the documentedperformance of the current tractor is, and how that performance isexpected to change as ePower: transitions from a four cylinder engine designed forstationary use to an EPA compliant six cylinder engine designedfor the trucking industry; automates a new charge control system that willopportunistically charge the batteries in a more fuel efficientmanner; evaluates the potential economic and performance advantages ofusing a rare earth permanent magnet generator instead of aconventional AC generator; and evaluates the potential economic and performance advantages ofusing a rare earth permanent magnet drive motor instead of aconventional AC induction motor. ePower’s original development work was done using a 197 hp JohnDeere diesel engine and a Marathon generator with a rated capacityof 115 kW that can be over-rated to 128 kW for brief intervals. Inall but the most extreme conditions, the ePower tractor is designedto minimize generator over-rating by using an array of 56 PbCbatteries from Axion Power International ( AXPW.OB )for acceleration and hill climbing boost. Since the current John Deere engine was designed for stationary usewith a generator, it is not EPA compliant and its horsepower ratingdoes not account for parasitic engine loads like power steering, airconditioning, airbrake compressor and other accessory and hotelloads. As a result, the maximum sustained generator output of thecurrent tractor is about 93 kW. ePower recently bought an EPA compliant 240 hp on-road Cumminsdiesel engine that was salvaged from a wrecked truck. Unlike theJohn Deere engine, the Cummins engine is rated on net usefulhorsepower at the flywheel after parasitic loads. It’s 32 poundslighter than the John Deere engine and has an advertised fuelconsumption of 6.8 gallons per hour at 1,800 RPM. With the Cumminsengine, ePower believes they’ll be able to run their existinggenerator at full capacity without difficulty. Over the last several months ePower has been conducting fuel economytesting of their current tractor in the Cincinnati region. Thetopography is best characterized as gently rolling hills with gradesof 1% to 3% and typical altitude changes of up to 300 feet. The fueleconomy tests were conducted according to SAE J1321 protocols usingmultiple trips over several 40 to 46.5 mile routes with city,suburban and highway profiles. Data was recorded at average speedsof 55 and 59 mph and any results that deviated from the average bymore than 5% were excluded. The blue bars in following graph show the documented fuel economy ofthe ePower tractor with a variety of loads ranging from empty tofully loaded. The red blocks at the end of the current fuel economybars represent ePower’s estimates of the incremental fuel savingsthat should be realizable with (1) the six cylinder Cummins engineupgrade, (2) automation of the charge control circuitry, and (3)integration of a rare earth permanent magnet generator. For purposes of comparison, the graph also includes a single linefor the national industry average across all weight classes and thegoals of the DOE’s Supertruck program. Since ePower’s ongoing work is by nature a research and developmentproject, there can be no assurances that the planned tractorupgrades can be completed over the next several months or that thethird generation tractor will meet current performance expectations. Disclosure: Author is a former director of Axion PowerInternational ( AXPW.OB )and holds a substantial long position in its common stock. Authorhas recently accepted an engagement to serve as legal counsel for ePower EngineSystems in connection with certain business planning andcorporate finance activities.