Workhorse delivery van by Amp Holding Inc.
A California private equity firm says it will double its ownership stake in Amp Holding Inc., a Loveland-based electric vehicle company.
The $7.5 million investment by Kodiak Capital Group would provide cash for a new product that could dramatically reduce fuel costs for delivery trucks.
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LOVELAND - A California investment group is pumping $7.5 million into a Loveland-based electric vehicle manufacturer to help it roll out a new product aimed at reducing fuel costs for delivery trucks.
Kodiak Capital Group LLC. , of Newport Beach, Calif., said the money will also allow Amp Holding Inc. to make future acquisitions, said Ryan Hodson, Kodiak managing director.
“We’re in the process of filing a registration statement right now to get them some more money,” Hodson said. “Once they’re capitalized this will definitely be some disruptive technology within the sector.”
Amp Holding has filed a provisional patent for its new technology, known by its trademarked name, E-GEN Drive. It uses a gas-powered generator to keep batteries evenly charged while drivers stop and start on their daily routes.
“The engine and the battery-powered motor are never in use at the same time,” said Don Wires, Amp Holding’s Chief Technology Officer. “It’s not a traditional hybrid, it’s an extended-range electric vehicle.”
The generator automatically starts when the ignition is off, recharging batteries while the vehicle is parked. That means battery packs can be smaller, lighter and less expensive than those found in all-electric vehicles.
Amp Holding CEO Steve Burns said the typical gas-powered delivery truck gets seven miles per gallon, but the E-GEN Drive gets up to 18 miles per gallon, effectively cutting fuel costs in half.
“Our E-GEN Drive trucks, with vouchers, offer a three-year payback and are now in the same price range as comparable gasoline powered trucks,” Burns said.
Amp Holding is a development-stage company that initially focused on converting gas-powered luxury cars and SUVs to electric. In 2012, it shifted its focus to commercial fleets of step vans like those used by UPS and FedEx. In March, 2013, it acquired Workhorse Custom Chassis LLC, a truck-manufacturing unit of Navistar International Corp.
As WCPO reported last March , Burns was hoping to land big orders for battery-powered delivery trucks and ramp up production at a former Navistar plant in Union City, Ind., about 100 miles north of Cincinnati. Burns projected that the plant could employ 200 at full production and produce enough trucks to generate $125 million in annual revenue.
In the nine months that ended Sept. 30, the company posted a net loss of $1.3 million on $177,500 in revenue. Amp Holding’s stock, which trades under the ticker symbol AMPD on the Over the Counter Bulletin Board operated by the National Association of Securities Dealers, last sold for 12 cents per share. That’s down from a 52-week high of 59 cents in May, 2013.
Burns said he found some resistance among fleet managers because of the initial cost of battery-only trucks and concerns about their range. He thinks the E-GEN system could overcome those objections well enough to compete in a sizable market: The roughly 50,000 trucks a year sold for commercial fleets.
“We built it strictly for the delivery business, so it might work for a Cintas you know delivering uniforms,” Burns said. “It could work for package delivery, a snack company delivering snacks, anything that does local delivery of some sort that stops a lot during the day.”
Kodiak Capital is a private-equity fund that has made several investments in energy-saving transportation companies. Hodson said he likes Amp Holding’s business plan and management team and thinks the company is ready for a new round of capital. Once the $7.5 million investment is made, Hodson said Kodiak will own 10 percent of the company, up from 5 percent now.
“We’re happy with what we’ve seen so far,” Hodson said. “Slowly but surely wins the race.
"As long as they continue to execute we’ll continue to provide capital.”