LOVELAND, Ohio - Loveland–based Amp Holding Inc. has completed the $5 million purchase of a truck manufacturing plant in Union City, Indiana. And CEO Steve Burns says the company is close landing its first major contract to build battery-powered step vans for one of the nation's largest package-delivery companies.
"We believe it will be the largest electric vehicle order ever," Burns said. "It's a serious order."
Burns declined to name the potential buyer.
Amp is a development-stage company that has a patent-pending drive train and battery system that it claims is highly efficient and capable of paying for itself in fuel savings within three years.
Initially, the company focused on converting gas-powered cars and SUVs to electric. But last summer, it shifted the focus to commercial fleets of step vans, like those used by UPS, FedEx and other delivery services.
Burns said there are about 300,000 such vehicles now on U.S. roads and more than 10,000 purchased each year. With diesel fuel hovering around $4 per gallon, Burns said fleet managers are taking a serious look at new technologies that reduce fuel costs. Once purchased, the trucks can generate fuel savings for 20 years. Burns said one of the nation's largest package-delivery companies asked Amp to submit to third-party durability testing, promising that it would place a large order if the testing went well.
"It's doing really well," Burns said. "We've been testing through a cold Ohio winter. The testing is so hard it's breaking suspension components on the truck, but our stuff has been flawless."
Burns recently raised $3.85 million in a private placement offering that helped pay for the purchase of a Navistar International facility in Union City, which is on the Indiana-Ohio border about 100 miles north of Cincinnati.
Amp purchased the right to use the Workhorse brand, logo and custom chassis design. Burns said the plant, idle since October, will employ 50 by August and up to 200 when in full production. He thinks the facility could generate more than $125 million in revenue annually, offering electric-powered delivery vans, along with those powered by natural gas, propane and compressed gas.
Amp is smart to offer multiple options, since electric vehicles are still too expensive to be a mainstream choice for commercial fleet managers, said David Hurst, principal research analyst for Navigant Research, a Boulder, Colo.–based consulting firm.
"The electric truck market in general is pretty small," said Hurst. "They're motivated to find a cheaper solution, but other vehicles such as natural gas and even just downsizing the vehicle tends to draw more attention."
As Amp tries to build its truck business, one of its biggest investors has placed another bet on an emerging electric-vehicle company. Kodiak Capital Group LLC established a $3 million equity line with Green Automotive Company in Newport Beach, Calif. The money will be used in part to "launch the first American electric shuttle bus," said Darren West, chief financial officer and director for Green Automotive. Kodiak provided $7.5 million in private equity financing for Amp last summer.
"We want to have between five and 10 companies in the portfolio that are in the (electric vehicle) space," said Kodiak Managing Director Ryan Hodson. "We see it growing tremendously over the next few years and we're just trying to get in on the ground floor."
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