On Tuesday January 29th I visited ePower Engine Systems with Brad Warneke, an Axion Power International (NASDAQ:AXPW) stockholder from Indianapolis who graciously invited me to join him, covered my out-of-pocket costs and paid a discounted day rate for my time. While I've been talking with ePower's CEO Andy Claypole for about three years the site visit was our first face-to-face meeting and the detailed discussions were tremendously educational for me.
ePower's concept for building a Class 8 Tractor with a hybrid series electric drive started with Jay Bowman, age 57, who describes himself as a "Jack of all trades" and has spent over 30 years making machines work together in manufacturing environments. Jay and Andy met while Jay was working as a consultant to Andy's former employer, the Ventures Group of Nova Chemicals, which had bought Jay's modular building products company. While Andy was skeptical when Jay first talked about his plan to build a hybrid Class 8 Tractor, he quickly saw the light when Jay built a prototype with a 97 horsepower diesel engine mated to a 60 kW generator and a 60 horsepower electric drive motor in a cab-over Mac chassis.
Jay's Gen-1 prototype was underpowered, but it got an impressive14 mpg at 35 mph with a 45,000-pound load and served as indisputable proof of concept. Based on those results, Andy joined the team and ePower started working on a Gen-2 prototype with a Peterbuilt chassis that offered more "real estate" for heavier components that could run at highway speeds with an 80,000-pound load.
Throughout the development process ePower's primary goal has been to explore the outer limits of Class 8 Tractor fuel efficiency by using the smallest possible components to power an 80,000-pound vehicle at highway speeds. The current configuration uses:
- A 197 horsepower four cylinder John Deere turbo-diesel;
- A Marathon generator that produces 128 kW at 1,800 RPM;
- A 150 horsepower Marathon electric drive motor; and
- An off-the-shelf five-speed automatic transmission.
The engine is governed to run at a steady 1,800 RPM from the moment it's started until the moment it's turned off. That engine speed is apparently the fuel efficiency and emissions sweet spot and it provides a constant 128 kW of power for the drive and battery systems.
I made a point of asking about the transmission since the Gen1 prototype didn't have one. Jay explained that electric motors have great instantaneous torque, but torque falls off as motor speed increases. The drive motor they chose for the Gen2 prototype is most efficient at 3,600 RPM. So instead of forcing the motor to operate faster than its optimal speed, the transmission lets them keep everything in balance.
I took this picture of a spare drive motor and transmission they had sitting in the shop. The plastic chair in the background gives you a rough idea of size. The combination is probably 2 feet in diameter and seven or eight feet long.
When Brad and I drilled down into the question of engine size, Jay explained that it would be relatively simple to use a six-cylinder engine with a bigger generator and drive motor, but each substitution would cut fuel economy. Since ePower's primary focus at this point is maximizing fuel economy, they're using small components for the prototypes even though they assume that some operators will be willing to trade a little fuel economy in return for more power in challenging terrain.
In their description of how the ePower drive works, Andy and Jay explained that the diesel generator running at 1,800 RPM has plenty of power to accelerate an 80,000-pound GVW tractor and trailer from zero to 35 mph, and to power an 80,000-pound truck at 65 mph on level ground. They also explained that without supplemental boost from the battery banks, the truck is a bit of a dog when it comes to accelerating from 35 to 65 mph or climbing hills.
As I noted earlier, the diesel engine is set to run at a steady state speed of 1,800 RPM, which is the optimal fuel efficiency and emissions point for the engine. That engine speed, in turn, keeps the generator output at a steady 128 kW. The drive motor has first priority on the available power, but any power that isn't used for the drive motor is shunted directly to the battery banks to keep them at an optimal state of charge.
When the truck is running steady state at highway speeds, the generator has 6 to 8 kW of excess capacity that provides a slow trickle charge to the batteries. When the driver takes his foot off the accelerator, however, the generator output available for battery charging can quickly ramp to 128 kW. When you add regenerative braking current from the drive motor, it's not unusual for the combined system to dump a transitory 650-volt charging current at up to 300 amps (~195 kW) into the battery banks. In other words, the transitory charging currents during braking events are enormous and those currents frequently gave rise to some fairly catastrophic failures with both flooded and AGM batteries.
While the original Gen2 design used 56 AGM batteries to provide 650 volts of battery boost, Jay decided to increase the number of PbC batteries to 60 so they could keep the batteries at 11-volts and avoid the top end of the PbC's charging curve where the internal resistance increases rapidly. To date, they've limited the cycling range from 11-volts down to about 10-volts, which hasn't put much strain on the batteries. Over the next two weeks they will slowly increase GVW from the current weight of 50,000-pounds to the target weight of 80,000-pounds, and increase the depth of discharge as they reduce the cut-off point into the 5-volt range. They'll also be adding a control chip to the diesel generator that will boost engine speed beyond 1,800 RPM for hill climbing.
When Jay began to describe the differences he's observed between the PbC batteries and the flooded and AGM batteries he used in earlier prototypes, he explained that the other batteries were always in a state of conflict with his machines. As a result, the machines weren't happy and neither were the batteries. When he started talking about the PbC he got a big smile as he explained that his machines are "happy" with the PbC and the PbC seems to be "happy" with his machines. The conflicts and tensions he's observed with other types of batteries simply don't exist with the PbC batteries. Jay's reserving judgment until he's had a chance to really punish the PbC batteries with a deep discharge and heavy recharge, but he's clearly a man who thinks he's found the batteries his system needs.
While the PbC batteries were delivered in mid-December, ePower experienced a number of component failures that delayed the installation and testing. The first problem was an over-voltage spike from the generator that fried the control electronics. Then they had some minor wiring issues followed by a capacitor failure in the drive motor. While each of these problems introduced a delay, none of the problems was directly or indirectly attributable to the PbC batteries. By the time Brad and I arrived, the problems had been resolved and the tractor was fully operational, as we experienced first hand during our brief test rides.
My test ride in the ePower tractor was quite an experience.
The first thing that surprised me was there was no change in engine pitch when the truck was sitting at a stoplight, accelerating or decelerating. The driver explained that the engine is governed to run at 1,800 RPM and it never changes. They apparently plan to add both idle and idle elimination functionality that will kick in if the truck isn't moving and the batteries are fully charged, but for now they view it as a minor issue. They also plan to add electronic cruise control to improve efficiency even further, but they don't want to increase electrical complexity until they've finished characterization work on the batteries.
The second thing that surprised me was the quickness of the tractor's acceleration from a dead stop. It moved smoothly through the gears and didn't feel all that different from riding in an SUV. While part of the quickness was undoubtedly due to the absence of a trailer, the driver explained that he had to be careful in heavy traffic because other drivers frequently underestimate the speed and responsiveness of the tractor. He also explained that even with an 80,000 GVW, the tractor was extraordinarily quick because of the electric motor's low-end torque.
The last subject Brad and I drilled down into was the question of ePower's retrofit cost and the incremental cost of PbC batteries.
Andy explained that they landed on a $70,000 price point a couple years ago because they expected the ePower retrofit to compete with a conventional five year major overhaul that cost about $35,000. While the cost of a conventional major overhaul has risen sharply in the last couple years and can run up to $60,000 for a rebuilt Tier Three engine, ePower has stuck with the $70,000 price point because its the number they've discussed with potential users and they don't want to change their pricing without a lot more proof of performance than they have today. When you account for the incremental cost of the ePower retrofit and the incremental salvage value of the old engine that won't be replaced, ePower reckons that the cost of its retrofit is basically a wash when compared with the cost of a rebuild.
A conventional rebuild, of course, won't offer the 50% fuel savings that ePower expects from their hybrid drive.
The only complaint ePower has about the PbC battery is pricing. The PbC batteries cost about twice as much s the AGM batteries they used on the last version and three times as much as the flooded batteries they used in the Gen1 prototype. That being said, ePower originally expected a two-year replacement cycle on their AGM batteries and they think a five-year replacement cycle is possible for the PbC. Since their prior experience with AGM batteries showed that problems started to arise within six months and got pretty severe within a year, they think the PbC will be worth the price premium if it has the durability and service life Axion expects.
I'm sure I've overlooked any number of issues readers will want to explore in greater detail and I encourage you to ask questions. I'll provide the best answers I can and hopefully Brad will chime in with more color when he gets a chance. I was very impressed with what I saw during our afternoon at ePower and think this could be a tremendous market for the PbC.
Disclosure: I am long AXPW.
Additional disclosure: I'm a former director of Axion and I was paid a discounted day rate for visiting ePower with Mr. Warneke. In the future, I hope to be retained as legal counsel for ePower.