Torotrak plc, buoyed by a
cash injection from Allison Transmissions Inc. of the US, has forked out £3
million to acquire a 20 per cent stake in Flybrid Automotive Systems Ltd of
Silverstone. Torotrak has the exclusive option to acquire the remaining 80 per
cent by 20 December 2013.
The two firms have worked together
on various projects to develop technology that can be applied to obtain both
performance and fuel economy benefits for commercial vehicle and passenger car
applications.
For Torotrak, Flybrid has brought
flywheel technology to an advanced stage of technology readiness for both
applications. It also enables immediate commitment to low-volume production for
flywheel hybrid products for commercial vehicles. In the first stage this is
most likely to be applied to the mid-sized bus market.
At the same time, for the
first time in public, Flybrid’s name and its technology have been linked with
Allison Transmissions Inc.
Flybrid’s technology has
also been demonstrated in both Jaguar and Volvo passenger cars yielding a 22.4
per cent fuel economy gain, albeit in conjunction with a stop-start system. Ricardo
plc predicts this technology can reduce CO2 emissions by up to 30g/km at a cost
of £20/g. This compares with £20-£45/g for enhanced internal combustion engine
technologies and up to £30/g for electric hybrids.
Torotrak’s stake in Flybrid
coincided with Allison Transmission Inc. subscribing for an additional 8,248,434
new ordinary Torotrak shares, raising approximately £2.5 million.
At the same time, Allison
agreed to pay £6 million for continued exclusivity to manufacture and sell
Torotrak main drive transmissions ‘in commercial vehicle segments’; the
exclusivity excluding Torotrak’s other commercial vehicle licensees, namely
Tata Motors and the European Truck and Bus manufacturer (ETBM).
Of the cash inflow of £8.5
million assisting Torotrak’s part-purchase of Flybrid Automotive, some £4.5
million is payable prior to 31 march 2013 and the balance before 31 March 2014.
A discount has been
negotiated to the original Licence and Exclusivity Agreement of £2.1 million in
return for a 35 per cent increase in royalties payable on the first 10,000
units of production per annum.
Even so slowly, Torotrak
appears to be edging to a conclusive deal with Allison which will see its infinitely
variable transmission (IVT) technology arrive in production vehicles.
Lawrence Dewey, chairman,
president and chief executive officer of Allison said: “Allison is committed to
introducing fuel-efficient, emissions-reducing technologies and our licencing
decision today with Torotrak reflects our determination to be a global leader
in this field.”
Significantly, he added: “A
purely mechanical energy recovery system is in many ways an engineer’s dream
but with the anticipated technology advancement and closer working relationship
between Torotrak and Flybrid, we see the investment as having all the potential
ingredients to make this a reality.’
For the first time,
Flybrid’s flywheel-based technology has been linked to that of Allison and
Torotrak. This, together with Flybrid’s leverage through Volvo makes this
small, 18-person company, suddenly a very attractive business.
Flybrid was founded by Jon
Hilton and Doug Cross. Both worked at Renault F1. The move is opportune for
Flybrid. It had reached the point where it needed to invest to grow further,
and to be ready to manufacture components. ∎
