John Petersen

Long-term horizon, nano-cap, micro-cap, alternative energy
John Petersen
Long-term horizon, nano-cap, micro-cap, alternative energy
Contributor since: 2008
Company: Fefer Petersen & Co.
You're wrong once again Killa!
40 CFR 86.004-40 - Heavy-duty engine rebuilding practices.
“(b) When an engine is being rebuilt and remains installed or is reinstalled in the same vehicle, it must be rebuilt to a configuration of the same or later model year as the original engine. When an engine is being replaced, the replacement engine must be an engine of (or rebuilt to) a configuration of the same or later model year as the original engine.”
As engines grow increasingly complex, most truckers are coming to rely on remanufactured engines from third party suppliers. As long as the new engine meets EPA requirements for the chassis model year, a difference in engine size is irrelevant. Our drivetrain makes it possible to replace a 14 liter EPA compliant on-road engine with a 7 liter EPA compliant on-road engine. Before publishing legal conclusions you might want to at least read the law.
Since vehicle miles traveled by the Class 8 fleet have not fallen off, lower new vehicle sales equates to higher rebuild rates as truckers try to avoid the costs of complying with increasingly stringent EPA regulations. Higher rebuild rates means our principal target market is growing, rather than contracting.
I don't think this transaction was conceived until the other transaction fell apart. The original Gesang term sheet was a $10 million basket of equity, debt and license fees. If the original transaction had come together, the $9 million private placement would have been unnecessary.
Based on a quick and dirty review, it looks like a repeat of the 2013 PIPE with some of the same investors. GLTA.
Limited finances are a big part of our decision metrics, particularly when potential investors, customers and industry partners view our battery supplier as a risk factor. The more important issue for us is keeping FedEx engaged and convincing other potential customers and industry partners to join the party. We have their attention and support. The trick will be keeping it.
Ultimately we need a battery supplier that's able to take an empty aluminum box from us and return a fully functional battery pack, complete with cooling systems and BMS. It's a tall order, but anything less would require us to become battery experts and that's not likely.
We bought two PbC strings in 2013, one for the white sleeper cab and a second for the green day cab. The string we damaged on the maiden FedEx trial was the more heavily used of the two. Since the redesigned battery boxes were too bulky for the available space on the day cab, we moved the good PbCs over to the white truck and started using the day cab as the test vehicle for our experimental NiMH systems.
I have no clarity on the question of whether we've been testing the Gen2 or the Gen3 PbC, so it's possible that we'd get different results with new batteries. At this point, however, we're reluctant to spend another $20,000 to find out.
Freya> You're confusing proof of fuel economy with proof of on road reliability.
Proving fuel economy is relatively easy and the work can be completed in a short timeframe.
Proving on-road reliability requires a million miles of experience (or more) and that process takes longer.
We already have enough hard fuel economy data at the vehicle weights specified in the EPAs proposed 2027 standards to be know that we're 20% over their target.
Generating a million miles of on-road reliability data will probably take a couple years. I fully expect our on-road reliability to start out poor and improve over time. It's the nature of the beast.
NBTF> I keep telling you that your information is both dated and inaccurate. You've also fallen victim to the same logical fallacies as Freya.
Since neither of you has any kind of stake in ePower's future, I wish you'd refrain from commenting on issues you don't understand.
I have been talking openly in this forum about ePower for a long time. While our difficulties with the PbC are not necessarily material for ePower, they could be very material for Axion and the last thing a wise ePower stockholder needs or wants is material non-public information about a public company.
We encountered a problem with battery heat during our maiden FedEx trial and we could not in good conscience talk openly about making the trip without discussing the battery problems. The steps we took to resolve the problem with improved ventilation helped, but they weren't enough. We now believe that the heat dissipation problem is inherent in a six-cell monoblock architecture and even with perfect heat transfer from the battery surface we'd still generate unacceptable heat in the battery's interior.
Lowering our hauling capacity goals to try and retain a working relationship with a troubled battery supplier seems unwise. The Amazon fulfillment center was built in Florence to take advantage of the FedEx Ground hub in Florence. We're already working with the folks who haul that freight. While the vast majority of their loads are toward the light end of the scale, there are times when the loads are much heavier. A great example we recently encountered was "back to school" shipments of paper that pushed GVWs to within spitting distance of 80,000 pounds. Since trucking hardware has to be sized for the heaviest possible load, focusing on the average can lead to a wrong conclusion.
ePower is not likely to be a big enough customer to solve Axion's woes for at least a couple years. Under the circumstances we think the wiser path is to find a battery alternative that meets our requirements instead of trying to "make do" with a device that may not be available.
Since the ePower drivetrain will be offered as an alternative to a conventional major overhaul, the economic decision will be based on the cost differential between the two choices. With fuel savings of 7,000 to 12,000 gallons per year, the ROIs look good at today's low fuel prices and extraordinary at historically normal prices.
It's true that NiMH is more costly, but it's also expected to last twice as long, which makes the cost spread inconsequential over the 600,000 mile useful life of an overhaul.
Ultimately the costs we currently pay for components are irrelevant because volume discounts on components should reduce out per unit COGS by $30,000 to $40,000.
At the vehicle weights specified in the EPAs proposed 2027 fuel economy standards, we're 20% over goal. Nobody else even comes close because none of the "SuperTrucks" can handle the uphill grades the proposed regulations require. There's a reason they test those things on the lonesome prairie.
The last two years have focused on boosting our drivetrain's hauling capacity from the 50,000 pound range into the 80,000 pound range with performance that compares favorably with conventional trucks. While that work focused primarily on engine and transmission issues, the PbC was an important development tool.
Today we have a drivetrain that beats the proposed 2027! EPA fuel efficiency standards by a comfortable margin but the battery we used during the drivetrain development phase doesn't seem to be up to the daily grind. We have a list of alternatives that look promising but long-term performance will be uncertain until we amass a critical body of independent on road data.
We have no intention of modifying the drivetrain to suit a particular battery. If a battery manufacturer wants our business it will have to step up to the plate and meet our requirements. Anything less would be the tail wagging the dog.
ePower is the principal developer of its drivetrain and potential suppliers who can't measure up will be culled. It's just good business.
It's probably worth noting that I was an observer when it came to Axion but I'm management at ePower. I was predicting a most likely path when I wrote about Axion. I'm planning the path for ePower and responding directly to challenges when they arise.
Claiming "more than progress" in the long haul heavy trucking industry requires at least a million miles of end-user data and preferably several million miles.
The process of accumulating that much independent on-road experience takes time and money. The initial testing may have a great deal of variability because of differences in routes, terrain, weather conditions and driver behavior. Over time the data will become more reliable and the variability will become statistically quantifiable.
The early stats are not conclusive by any stretch of the imagination, but they're typically a good predictor of how the long-term data will evolve.
We're not done with our battery selection and system optimization process. The PbC was a great research tool for us because it gave us the ability to develop a series hybrid drivetrain that can do the work of a conventional drivetrain with 50% better fuel efficiency (9 mpg vs 6 mpg). While the PbCs we tested were not robust enough to do the required work on a day in and day out basis, a lot of clever people are developing other energy storage technologies that may be robust enough to meet our requirements.
There is a material risk that we'll fail in our efforts to find an energy storage system that's stout enough to support our drivetrain. That's why they call the process research and development.
Long-haul Class 8 trucks are in a league of their own because the useful life of a truck chassis is 12 years and the useful life of a drivetrain is 3 to 5 years. That gives rise to a natural cycle where truck owners have to either rebuild their existing trucks or trade them for new and let the purchaser of the trade-in pay the overhaul costs.
The best numbers I've been able to find suggest that while OEMs only sell about 200,000 units per year, about 300,000 Class 8 tractors are rebuilt every year.
By offering a cost effective repower option, ePower will be selling directly to truck owners (a/k/a end users) can choose to spend a pile of money for a conventional rebuild, for choose to spend more for an ePower drivetrain that will provide a solid ROI within the useful life of the replacement drivetrain.
We're taking it directly to the customers. If the plan was to take ePower's drivetrain to the OEMs I would have passed. That market may develop in the future, but it has no short-term allure for us.
Proof of behavior.
I try very hard to avoid criticizing decisions made by others because sidewalk superintendents never have a complete grasp of the facts and circumstances. In most cases I don't know that I would made a different choice and I without rational basis to claim that I could have made a better choice, I have no right to criticize.
My 12 year adventure with Axion has taught me one critical life lesson – I will never again devote my time, effort and attention to a company that's developing a product that will be a mere component in somebody else's system. Without a direct path to the end user, I'm not interested.
I still cringe when I recall a conversation I had with a Ford battery guru in 2012. He readily admitted that the PbC would be a far better choice for their stop-start systems before explaining that the business decision was all dollars and cents. He then explained that most of their customers didn't care if their stop-start system stopped working because of a weak battery. As long as the car got them to their destination, it wasn't worth the irritation of scheduling a service call. That reality made it cheaper for them to do warranty repairs for the 5% to 10% of customers who did care than to use a more costly battery in all new cars. The only thing that stands a chance of changing that pragmatic and fiscally prudent attitude is new regulations.
While each potential battery customer faces a different set of facts, circumstances and business dynamics, they're all focused on their own product development and marketing plans and until they decide to launch a specific product using a specific battery, there's nothing the battery maker can do to influence the process.
Point fairly taken Bob. I'm only human and that makes me frequently wrong. I do, however, try to recognize my shortcomings and promptly admit my mistakes.
RA> Don't bother trying to defend me because this entire crew has slipped a few cogs on their flywheel.
This string started with a comment from NBTTF which attributed representations to me that I did not make. The quoted Instablog from December 2012 was written before I returned to the States after 15 years in Europe and it was based entirely on a presentation that Andy Claypole sent me and I provided to readers who wanted to read it.
My second ePower Instablog discussed my first visit to Florence on January 29, 2013 where I took a deeper look at ePower's technology and described what I saw.
My third ePower Instablog described a visit to ePower in July 2013 after I agreed to accept ePower's as a client and began my first deep due diligence dive. It presented a lovely graphic showing the demonstrated fuel efficiency of the Gen2 ePower drivetrain at six different weights and at two speeds for each weight.
The only fuel economy numbers that even came close the 10 to 14 mpg range were for a bobtail tractor with no trailer and no load. I don't know about anybody else but I don't get terribly excited about the fuel economy of a work truck when it isn't doing useful work.
I'm happy to accept responsibility for representations I make after appropriate due diligence. I will not accept responsibility for statements made by others that I have not confirmed.
In December 2012 the old ePower presentation gave readers more information than they would otherwise have had access to. As soon as I was in a position to clarify the facts based on my own investigation I did so.
I have nothing to apologize for.
I have better things to do with my time than wading through an extensive comment archive to give you chapter and verse quotes. I don't respond well to tantrums.
I know what I told you when you first started ragging on ePower. If you think back, I'm sure you'll eventually recall that it was your nasty ePower commentary that poisoned a previously cordial relationship.
My recollection of history is very different from yours. I repeatedly told you the claims would be revised when I completed my due diligence. When I completed my work the numbers were adjusted. Where the old CEO claimed 10 to 14 at 80,000 pounds, my numbers were closer to 9 at 55,000.
The documentary record is very clear.
ePower's former CEO some fairly extravagant claims before I was grout in to serve as counsel in the summer of 2013. Once I completed my due diligence the claims got far more accurate.
Please do not attribute statements made by others to me.
Disney economics, wish-upon-a-star thinking and irrational exuberance are holding sway far longer than I thought they would or could, but the eventual outcome remains written in stone.
I voluntarily reported that I sold 400,000 shares between 2009 and 2012 and I sold no shares after 2012.
If you are unwilling to accept the truth of this statement, you can't argue it as proof of behavior.
You asked me about the specific details that were in my mind when I wrote a comment last December. Frankly, it wasn't that memorable an event for me and I'm not willing to make up a story that will shut you up.
I've never painted an image that I believed to be false when the words were crafted. Subsequent events often proved me wrong, but I sincerely believed the words were true when I wrote them.
That's the problem with crystal balls, even the best of them are wildly inaccurate at times.
At this point I'm not convinced of anything. Last winter ePower started getting push-back from investors who were concerned that we were too reliant on a troubled battery supplier. That, combined with less customer price sensitivity than we expected was what got us looking at battery alternatives in the first place. The heat problems we encountered in April made the search more important. If our potential investors were concerned with Axion's stability, it seems reasonable to believe that other potential customers might be equally concerned. As I said, a lot can happen in 10 months.
I haven't sold any shares since 2012.
Edmund> Without a link your recollection of what I said and when I said it is not even interesting.
RA> Jay had his heart set on a particular system price point; a very low price point that assigned no value to emissions reductions.
Over the last year potential customers have made it clear that their value calculations include fuel savings AND emissions reductions as separate line items.
There have also been significant performance gains in NiMH and significant price reductions in Li-Ti. When you turn the crank on all the changed facts you get a different result.
NGS> A lot can happen over the course of two years. When the facts change, so do my opinions.
Experts who understand far more about our drivetrain than you (or even I) do disagree. It's pretty clear that ePower is not going to pull Axion's fat out of the fire. Let's just leave it at that and part as friends. We neither need nor want your advice and counsel.
Our drivetrain has demanding requirements, particularly when it comes to battery charge and discharge rates, heat dissipation and safety. As as long as our requirements are met, the chemistry of the battery is irrelevant.
We have tested the PbC as a stand-alone, NiMH as a stand-alone and both battery chemistries with a supercapacitor buffer. We are evaluating other alternatives including Li-Ti. There are minor performance differences when we switch from one energy storage device to another, but those differences are far from mission critical. Our goal as a company is to select the energy storage alternative that offers the best value from a total cost of ownership perspective.
While our performance requirements will limit the number of acceptable alternatives, there are several alternatives available and we can switch our tractor from one battery chemistry to another in a matter of hours, because that's how long it takes to remove and replace battery boxes.
We're not performance agnostic, but we are absolutely battery chemistry agnostic.
The securities laws do not distinguish between sins of commission and sins of omission. They're equally bad, but only if the subject matter is material in its own right.
Without access to a lot more facts, I have no way to reach a reasoned conclusion on the materiality question.
I'd love to be more helpful, but it's impossible to offer a well reasoned opinion when I'm sitting in a fact vacuum.
I'm not dancing around the question. I'm simply saying I don't have enough facts to answer the question.
If the consent solicitation was rejected and if number of remaining B Warrants is material one could argue that there's been a disclosure failure that could constitute a technical violation of the SEC's reporting rules.
I'd have a very hard time classifying silence as misinformation.
There was an Investor update in late-August but it included several items that we're not ready to discuss publicly. I'd like to share more but in this case I can't.
Hip shot answers in a fact vacuum are dangerous things to offer. Without knowledge of the details, I can't tell you what I would have done under the circumstances. In the final analysis these things always boil down to a question of materiality.
The 619,447 B Warrants outstanding on 30-Jun were absolutely material to a company with 2.7 million shares outstanding. If the substantial bulk of those warrants were exercised by 14-Aug, it would be pretty easy for management to conclude that the unexercised balance of the warrants was not material to a company with 3.5 million shares outstanding.
The situation may be irritating, but it's probably not actionable.
Several posters in this forum deliberately misstate the facts with shocking regularity. That is misinformation.
I've previously explained why I believe the B Warrants were all exercised before the voting closed. If I'm right the consent process became moot and the outcome became irrelevant.
Axion had 3,472,313 shares outstanding on 14-Aug as compared with 2,693,449 shares on 30-Jun. Part of the 775,000 share difference is attributable to rounding on the reverse split. The only possible explanation for the balance is B Warrents that were outstanding on 30-Jun and exercised before 14-Aug. Any other transaction that resulted in the issuance of that many shares would have required an 8-K.
I agree that Axion's failure to say anything about the vote outcome is very poor form but I don't see it as a shocking departure from SOP.
The Concentrators have become a cesspool of vitriol and misinformation. I did not call Axion a cesspool, although I do believe that it's a gravely challenged company.