UQM on road to electrifying transportation

UQM Technologies Inc. has been working to segue from boutique electric-vehicle research lab and supplier to a major player during the past few years. It made one of its most significant leaps in that direction in October.

On Oct. 2, the Longmont-based maker of electric motors and related products announced it had signed a memorandum of understanding with a major Chinese company to produce electric propulsion systems for what are known as New Energy Vehicles.

Some potentially huge numbers are involved:

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“The China State Council published its New Energy Vehicles plan in July, setting a goal of 500,000 energy-efficient and clean vehicles on the road in China by 2015, and 5 million vehicles by 2020,” the company said in a news release announcing the deal.

With its deal with the Chinese, UQM now claims strategic partnerships on four continents — the others being North and South America and Europe.

Compared with a lot of corporate makeovers, UQM is barreling ahead with its own, thanks in large part to alliances that have delivered the volumes it was seeking.

President and chief executive Eric Ridenour, who joined the company in fall 2010, said the wheels already were in motion for UQM’s transformation when he arrived on the scene.

“We were well known even globally in high-tech circles, mostly as a boutique producer,” Ridenour said. “But we had the foundation to be a high-volume producer, and a strategy was being created before I came aboard to make that happen.”

UQM, founded more than three decades ago, spent years developing new technologies and products, mostly funded through government grants and partnerships aimed at identifying ever more efficient and powerful electrical propulsion systems for electric vehicles.

Ridenour’s decision to join UQM was critical to CEO Bill Rankin’s plans to take UQM to a larger playing field. At 67, Rankin was looking for a successor. High on his list of priorities was to find someone with major-league automotive industry experience.

Ridenour fit the bill. He had cut his teeth in the automotive industry in Detroit, capping a long engineering career at Chrysler by being named to the board of Daimler Chrysler. He retired from Chrysler five years ago but wasn’t done working. Rather, he began to cast about for a new challenge.

“I wanted to work with a real product,” he said. “I wanted to go somewhere where I could make a difference in three to five years.”

Matchmakers brought the parties together. Ridenour liked what he saw. UQM was a leading-edge motor designer and manufacturer with a strong reputation in the industry. It was publicly held and solidly financed. Most important, UQM’s team had bigger ambitions.

“High-volume manufacturing was much more attractive to them at the time, and I knew what it took to be there,” Ridenour said. “It’s all about knowing where you want to be in the end, and then knowing how to get to that point. All these things are natural in the auto industry.”

Essentially, UQM is using a tried-and-true strategy to accelerate its growth: partnerships. Where once partnerships were designed to test the limits of electric-motor technology, they are now being forged so that UQM can crank up its manufacturing capabilities in Colorado.

The first major step came just as Ridenour arrived in 2010. UQM signed a 10-year agreement with the California vehicle maker CODA to produce motors for fleet vehicles. CODA’s first vehicles hit the market in March, powered by UQM motors. CODA also has a production agreement with a major Chinese auto company to develop electric vehicles for the Chinese market — vehicles that likely will be powered by UQM.

Other volume production partnerships followed as Ridenour built his own team, cherry-picking other former Motor City executives such as himself and putting them in charge of sales, marketing and production. Among its partners: Audi, as supplier of motors for its electric-vehicle test fleet; Rolls Royce, as supplier for a development program; Toyota, for a bus project; Truck maker EVI (Electric Vehicles International), as supplier of motors for a test-product project; and Proterra, a bus builder, as an electric propulsion-system supplier.

Sometimes, these partnerships are formal. Other times, they’re not.

“Today there are so many different kinds of strategic relationships,” Ridenour said. “Everything in China is a joint venture. We have a relationship with Borg Warner where we tout each other’s products, but there’s no written agreement. If someone is talking about transmission for electric vehicles, we recommend theirs. And they may recommend our motors if someone is looking for a quality system.

“A lot of those kinds of things could happen when you look for the ways you can grow. We want access to new customers. We want to build volume. If we can gain that through a relationship, it’s a good thing, as long as we retain our IP, so that’s what we’re looking for: new customers, growth of our business and retaining our IP. If a partnership offers that, we’re interested.”

While UQM (NYSE: UQM) has lost money in recent years, its financials are improving.

In the quarter that ended June 30, revenue showed strong quarter-to-quarter growth ($2.3 million compared with $1.3 million in the previous similar period) and per-share losses held steady quarter-to-quarter, a loss of 4 cents per share vs. a loss of 3 cents in the previous period.

With the deal with the Chinese agreement and CODA sales expanding, UQM appears well on its way to putting its boutique research-and-development-shop image in the rearview mirror.